BBA 2nd Year Indian Economy Exam Question

BBA 2nd Year Indian Economy Exam Question

BBA 2nd Year Indian Economy Exam Question :


Q. 1. What are the efforts made by government of India to alleviate poverty and unemployment?

Ans. The size of employment in any country depends to a great extent on the level of development. Therefore when a country makes progress, its production expands the employment opportunities grow. Government of India is very serious about these problems, Several measures have been taken by government with a view to eradicate or to minimise poverty and unemployment.

A brief description of these measures is as follows :

Government Basic Services Progammes for Alleviation of Unemployment

1. Prime Minister’s Rojgar Yojana (PMRY) : PMRY started in 1993 with the objectives cf making available self-employment opportunities to the educated unemployed youth by assisting them ill setting up any economically viable activity. So far, about 20 lakhs units have becn set up under the PMRY, creating 30.4 lakh additional employment opportunities, The targets for additional employment opportunities under the 10th plan and in 2004-05 are 16.50 lakh or 3.75 lakhs respectively, While the REGP is implemented in the rural areas and small towns (population up to 20,000) for setting up village industries without any gap on increase, educational qualification or age of the beneficiary, PMRY is meant for educated unemployed youth with family income of upto 40,000 per annum, in both urban and rural areas, for engaging in any economically viable activity.

2. Rural Employment Generation Programme (REGP) : REGP launched in 1995 with the objective of creating self-employment opportunities in the rural areas and small terms is being implemented by the Khadi and Village Industries Commission (KVIC). Under REGP entrepreneurs can establish village industries by availing of margin money assistance from the KVIC and bank loans, for projected with a maximum cost of Z 25 lakhs. Since the incipation of REGP, upto 31 March, 2004, 1,86,252 projects have been financed and 22.75 lakh job opportunities created. A target of creating 25 lakh new jobs has been set for the REGP during the 10th plan. 8.32 lakhs employment opportunities have already been created during 2003-04 for 2004-05 a target of creating 5.25 lakh job opportunities has been fixed.

3. Swarna Jayanti Shahri Rojgar Yojana (SJSRY) : The urban self employment programme and the urban wage employment progamme are the two special component of the SISRY, which in December 1997, substituted for various extent programmes implemented for urban poverty alleviation, SJSRY is funded on a 75 : 25 basis between the centre and the State. The expenditure during 2003-04 was 103 crore. For 2004-05 the allocation is 103 crores out of which 90.38 crores-were utilised by December 31, 2004.

4. Swarnajayanti Gram Swarojgar Yojana (SGSY) : SGSY launched in April 1999, aims at bringing the assisted poor families (Swarozgaris) above the poverty line by organising them into Self Help Groups (SHGs) through a mix of bank credit and government subsidy.

5. Rural Housing : Indira Awas Yojana (IAY) : The Indira Avas Yojana operationalised from 1999-2000 is the major scheme of construction Of houses for the poor, free of cost. The Ministry of Rural Development (MORD) provides equity support to be Housing and Urban Development Corporation (HUDCO) for this purpose.

6. Pradhan Mantri Gram Sadak Yojana (PMGSY) : The PMGSY, launched in December 2000 as a 100% centrally sponsored scheme, aims at providing rural connectivity to unconnected habitations with population of 500 persons or more in the rural areas by the end of the 10th plan period. Augmenting and modernising rural roads has been included as an item of the NCMP. In addition, support of the multi-lateral funding agencies and the domestic financial institutions are bring obtained to meet the financial requirements of the programme.

7. Antyodaya Anna Yojana (AAY) : AA Y launched in December 2000, provides food grains at a highly subsidized rate OR 2.00 per kg for wheat and 3.00 per kg for rice to the poor families under the Targeted Public Distribution System (TPDS). The scale of issue, which was initiajly 25 kg per family per month, was increased to 35 kg per family per month from April 1, 2002. The scheme initially for one crore families was expanded in June, 2003 by adding another 50 lakhs BPL families, During 2003-04 under the AA Y, against an allocation of 45.56 lakh tonnes of foodgrains, 41.65 tonnes were lifted by the State/ UT Governments. Budget 2004-05 expanded the scheme further from August 1, 2004 by adding another 50 lakhs BPL families. With he increase, 2 crores families have been covered under the AA Y.

8. Pradhan Mantri Gramodaya Yojana (PMGY) : PMGY launched in 2000-01, envisages allocation of Additional Central Assistance (ACA) to the State and UTS for selected basic services such as : primary health, primary education, rural shelter, rural drinking water, nutrition and rural electrification. For 2003-04 as well as 2004-05, the annual allocation of ACA for PMGY was 2,800 crores.

9. Valmiki Ambedkar Awas Yojana (VAMBAY) : The VAMBAY launched in December 2001 facilitates the construction and upgradation of dewlling units for the slum dwellers and provides a healthy and enabling urban environment through community toilets under Nirmal Bharat Abhiyaan, a component of the scheme. The Central government provides a subsidy of 50%, the balance 50% being arranged by the State government. Since its inception and upto December 31, 2004. 753 crore have been released as Government of India subsidy for the construction/ upgradation of 3,50,084 dwelling units and 49,312 toilet seats under the scheme. For the 2004-05 out of the tentative Central Fund allocation of? 280.58 crore, up to December 31, 2004;an amount oft 223.66 crore has been released covering 1,06,136 dwelling units and 20,139 toilet seats.

10. National Food for Work Programme : In line with the NCMP, was launched on November 14, 2004 in 150 most backward districts of the country with the bbjecive to intensify the generation of supplementary wage employment and desire to do the manual unskilled work. It is implemented as a 100% centrally sponsored scheme and the foodgrains are provided to State free of cost However, the transportation cost handling charges and taxes on foodgains are the responsibility of the States. The collector is the nodal officer at the district.level and has the overall responsibility of planning, implementation, coordination, monitoring and supervision. For 2004-04, 2020 have been allocated for the progamme in addition to 20 lakhs tonnes of foodgrains.

11. Drought Prone Areas.Progamme (DPAP).

Desert Development Programme (DDP) and Integrated Wastelands Development progamme (IWDP) : DPAP, DPP and IWDP are being implemented for the development of wastelands/degraded lands. During 2004-05 allocation 300 crore, 215 and 368 were prescribed for DPAP, DDP and IWDP respectively. So for during 2004-05, 2,550 projects covering 12.75 lakh hectares, 1,600 projects covering 8 lakh hectares and 105 projects covering 8.32 jakh hectares, have been sanctioned under DPAA, DDP and IWDA respectively.

12. Sampoorna Graman Rojgar Yojana (SGRY) : SGRY launched in 2001, aims at providing additional wage employment in all rural areas and thereby food security and improve nutritional levels. The SGRY is open to all rural poor who are in the need of wage employment and desire to do manual and unskilled work around the village/ habitat. The progamme is implemented through the Panchayati aj Institutions (PRIs).

Q. 2. Write an essay on unemployment problem in India.


Explain the meaning, causes, types of unemployment in India. Also give your suggestions to remove the problems of unemployment.


What is unemployment? Discuss the main problems of unemployment in India and also suggest measures to solve this problem.

Ans. Concept of Unemployment : A great problem of Indian economy is unemployment. This problem has created a challenge to our country and planners of this country because it implies the under utilisation of valuable human resources of the country.

When a person is willing to do a job at the preparing wages and he is capable of doing it, but does not find the Job, he is said to be unemployed. Thus, unemployment is a state of economy in which the number of Jobs available in the country is less than the number of persons seeking Job.

Meaning of Unemployment

Unemployment is a situation when a person is ready to work at the prevailing rate ofwages and is capable of doing job but does not have any job to earn regular income.

Types of Unemployment

Various types of unemployment can be classified as under :

1. Structure Unemployment : When the resources of the country (capital) are limited and due to this the Country is unable in providing jobs to all job-seekers, it is called structural unemployment.

2. Disguised Unemployment : When the number of persons ,engaged a particulars work is more than required, it is known as disguised unemployment. In the state of unemployment, the marginal productivity of labour is almost zero.

3. Under Employment : When the persons do not get work according to their ability, for work. For wages, it is called under employment.

4. Seasonal Unemployment : When the nature of a trade or an industry is seasons. Most of the persons engaged in it, get work for a certain period and remain unempolyment for rest of year is seasonal unemployment.

5. Open Unemployment : When the number of jobs available within the country is less than Job-seekers, it is called open unemployment.

6. Technological Unemployment : When some persons are thrown out of job because of adoption of advanced technologies it is called technological unemploment,

Causes of Unemployment in India

Various causes of unemployment are :

1. Low of Employment Capacity of Growth : The rate of growth of the economy has been much slower that what it would have been ideally required to find new job opportunities for the additional labour.’ Force on top of it, the employment generation capacity of growth has been limited.

2. Slow Growth in Agricultural Sector : India is a developing country which is based on the agricultural sector. Agricultural output increased at an annual average rate about 4% and employment in the production of agricultural commodities alone would have grown by about 3% per annum.

3. Rapid Growth of Population : The growth rate of population in India is very high, It is increasing at the rate of 1.93 per year. Thus, no programme can provide employment with this population growth.

4. Nature of Agricultural Technology : The short duration high yielding varieties of secd can facilitate an increasing labour use. The profitability of internal farming involving the use of large quantity otwater fertilizer per unit of land, there may not have been much Incentive ror increasing cropping Intensity.

5. Downfall in Small-scale Industries : An important reason of increasing unemployment is downfall of handicraft and small-scale industries.

6. Inappropriate Educational System : After remaining at school and college for a number of years men and women come out in large numbers having gained neither occupational nor vocational training nor functional literacy from which all future skilled, educated professional and managerial manpower is drawn.

7. Weakness in Planning Techniques : The growth strategy underlying our plans has been found to be faulty.

(i) Efforts to lay sufficient infrastructui-e in country for a balance economic development have been lacking.

(ii) The plans could not encourage the use of labour oriented technique of agricultural and industrial production.

(iii) The plans have failed to put due emphasis on schemes of irrigations, waste and reclamation, development o’ dairies etc.

Suggestions to Remove Unemployment

1. Economic Development : Measures should be adopted to accelerate the rate of economic growth in the country.

2. Control of Population Growth : Wisest step to solve the problem of unemployment is to control the growth rate of population.

3. Education System : Our education system should be changed to produced job oriented youths.

4. Development of Cottage and Small-scale Industries : Their growth will offer vast employment opportunities in country.

5. Agro-Industries Development : Agriculture based industries also may solve unemployment problem.

6. Survey of Natural Resources : India has vast natural resources lying unutilised,undiscovered or underutilised. Efforts should be made to discover and use them.

7. Self Government : Government should provide adequate finance and all other necessary facilitate for self employment.

8. Employment Exchange : Large number of employment exchanges should be established throughout country.

9. Full Utilisation or Installed Capacity : Industries should be encouraged to make full utilisation of their capacity for employment opportunities.

10. Man Power Planning : A long terms plan should be prepared in country for making the best use of man power.

Q. 3. What is meant by poverty? What is its extent in India? What are the causes of poverty in India? Suggest measures for its elimination.

Ans. Poverty can be defined as a social phenomenon in which a section of the society is unable to fulfil even its basic necessities of life. When a substantial part of society is deprived of the minimum level of living and continues at a bare subsistence of level, that society is said to suffer from the problem of mass poverty. Most of economists agree that the man who is living below poverty line, is poor. Lord Boyd or believed that the people, who onsume below 2300 calories food, live below poverty line.   C. Political  Causes   Various political causes are as follows :

1. Exploitation by British Rulers : India during dependence period was exploited by British rulers, because of this exploitation India remained poor.

2. Political Set-up : Our present political set-up has also failed to eradicate poverty. Political leaders are engaged in fulfilling their own self-and they do not think of poor or poverty.

3. Corruption and Inefficiency of Administration : Administrative set-up of our country is also not free and fair. The administrators and legislators do not want to help the poor.

Suggestions to Remove Poverty

The following steps can be taken to remove poverty :

1. Priority to Small-scale and Cottage Industries : While trying to accelerate the rate of economic growth, top priority should be given to small-scale and cottage industries. More and more job opportunities may be created by these industries.

2. Acceleration of Economic Growth : There is a need to accelerate the economic growth because it is expected to create new job opportunities, which will help in removal of poverty.

3. Rural Industrialisation : Rural industries must be developed. Such industries will serve two purpose simultaneously. First, they will generate employment, secondly they will not create the problems in urban areas.

4. Rural Public Works : The provide employment to rural people, it is suggested that rural public works should be started on large scale.

5. Land Reforms : Government should make best effo•rts for the effective implementation of land reform measures. These methods will help in improving the condition of farmers.

6. Social Service and Security : Government should pay due attention to provide and strengthen social services like education, health, law and order and recreation to improve the standard of living of people.

7. Population of Consumption : The growth of population should be strictly controlled, Family planning programmes must be implemented.

8. Regulation of Consumption : Along with rapid economic growth, efforts should be made to see that the distribution of consumption does not get speed further. There is a scope for making the tax structure more redistributive and the efficiency of public expenditure and of the social safety net has to be improved.

9. Social Development : Social development such as provision of primary education primary health facilities, fresh drinking, water, housing etc. has a direct bearing on poverty alleviation both by improving the social consumption of the poor and by generating employment for the rural youth in provision of such services.

10. Increasing Rate of Agricultural Growth : Agricultural growth has so far centred round the objective of achieving Self-sufficiency in food grains agricultural growth in the less developed regions where labour is abundant, wage rates are low and poverty in widespread is likely to contribute significa ntly to the red of poverty, prove agricultural wijj certainly prosper the country.

11. Promotion of Women : A recent study by the world bank brought out that are preponderant among the poor and poor households arc dependent on women’s earnings.

12. Occupational Diversification : Recent trends in empoyment  indicate a diacrcditable decline in the proportion of workforce enraged in agriculture and a significant incrcaec in employment in the informal rural non-agricultural sector, comprising, household and small-scale manufacturing etc.

13. Strengthening Beneficiary Oriented Programmes : More expansion of these programmers is not enough. The most important ‘task is to ensure that the benefits should reach those for whom they are intended. A number of changes may be noted

(i) The allocation of resources for such programmes.

(ii) In the choice of programme as well as in their implementation, local institutions have to be involved in an increasing scale with a view to ensuring that the activities chosen are economic.

(iii) To the extent possible these activities should be organised on a group.

(iv) A major training programme has to be mounted to improve the skills and capabilities of potential beneficiaries.

Q. 3. What do you mean by regional imbalance? What are the causes of regional imbalances? Suggest measures to remove these imbalances.

Ans. India presents a picture of regional variations, i.e. some states are economically advanced while others are relatively backward, Even within each, state, some regions are more developed while others are almost primitive. The coexistence of relatively developing and economically depressed states and even regions within each state is known as regional imbalance. Thus regional imbalances may be inter-state or intrastate; they may be total or sectoral.

The sixth plan has declared seventeen criteria for determination of regional imbalances. These seventeen criteria are density of rural population, number of persons emerged in secondary and territory activities per lakh of population, per capita industrial output, percentage of debt owed by all house holds to landlords and money lenders, consumption standard of weaker section in rural areas, rural unemployment rate, form investment per cultivator households, agricultural output, percentage of area irrigated, percentage of schedule castes and schedules tribes,

The above criteria identified several backward areas as under :

1. High Population Density Areas in Gangetic Plains : Despite having the high resources in these areas resources are unexploited or under-exploited. There is heavy pressure of high density of population.

2. Area of Low Agricultural Productivity : In the central and western part of India, a large area falls under drought belt and as a result these areas have low agricultural productivity and

3. The North-East : This region arises partly from its remoteness from the nation and partly from socio-cultural base.

4. Tribal Area : These are generally north east and central east part of India. These is high from socio-cultural base.

5. Ecological Problem Area : Desert hill area fall under this. Hence they have a limited scope for economic development.  Causes for Backwardness Imbalances

Following may be the causes the regional backwardness and imbalances :

1. Political Causes : This factor basically plays major role in business undertakings location, specially in public sector, resource transfer or in special area development programme.

2. Geographic Factor : This is the most important factor responsible for regional imbalance, as the development of any area depends upon its environment, natural resources, wealth, manpower and climate. These all create the environment for development of the area.

3. Historical Factor : Many backward areas have a history about their backwardness such as few areas are backward since British rule. On the other than uneven investments in irrigation during the British period helped some areas to become prosperous.

4. Economic Factor : This factor refers to locational advantage in terms of the transportation, availability of resources, finance, enjoyed by certain regions.

5. Public Finance Policy : It also has added to regional unbalances, e.g. in low income states that level of public investment, infrastructural growth and standard of administrative services are lower as compared to those high income states, thus perpetuating disparities.

Measures taken to Remove Regional Imbalances

The problem of regional imbalance is the problem for each and every country of this world, it is found in developed countries also. Following measures have been taken to remove regional imbalances in our country :

(i) Special area development programmes for backward areas.

(ii) Recognition of backwardness while transferring financial resources from centre to states.

(iii) Dispersal of industries.

(iv) Development of growth centres.

(v) Promotion of nucleus plant and ancillaries.

(iv) Expansion and simplification of banking policies.

Measures to Remove Regional Imbalances

1. Resources Transfer : Financial resources should be transferred from the centres to states. The main criterion for transfer is backwardness of states, often central funds are transferred to fill state’s revenue gaps, if any funds are transferred based on the recommendations of finance commissions from time to time.

2. Special Area Development Programme : Special schemes should be involved by the central government for the development of deserts, hill areas, tribal areas and drought prone areas.

3. Dispersal of Industries : The most effective way of achieving balanced regional development is to enclosure dispersal of industries to backward areas. Backward areas, it is believed, will shed their backwardness once they are brought on the industrial map of the country.

Their reluctance on the part of private entrepreneurs to go to backward areas because of the absence or inadequancy of infrastructure facilities.

4. Growth Centres : One ofthe main reasons for poor industrial activities in backward regions is the lack of good and adequate infrastructure facilities. For promoting industrial development in backward areas the focus should be on development of growth centres that would attract industries

5. Nucleus Plants and Ancillaries : A nucleus plant is one which is located in a backward area and which is expected to promote ancillary units around it.  6. Banking Policy : Expansion of banking policies facilitates the rural areas and it is another way of development of backward regions. Opening, of new branches is emphasised and permitted by the state bank of India. Thus, extension of monetary infrastructure gives growth to regions and assist in removing regional backwards.

Failure of Regional Planning

In spite of the measure undertaken by the government, the problem of regional imbalances, as was pointed our earlier, still persists. The most important reasons are as follows :

1.    One basis reasons for widening of disparities is that the richer states refuse to shoulder their part of the responsibility of transferring through the central government some of the resources to the poorer states.

2.    At the same time, the poor states rely too much on the flow of resources from richer states through the central government.

3.    Most of the area development measures are specially meant to help the drought prone area or hilly areas or those inhibited by scheduled tribes.

4.    The method of locating large central projects in backward states has not paid off in any significant way of improving their economies.

5.    The benefits of central government subsidy for industrial investment is specified backward states areas are concentrated in a few district/areas.

6.    Only a few entrepreneurs have approached the public sector financial institution for concessional finance even though sufficient publicity has been given to facilities.

7.    The state governments alone can tackle the problem of intrastate imbalances and local planning is main plank of any strategy for balanced spatial developing within a state.

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Montey Parjapati



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