INDIAN ECONOMY

(NCERTs SUMMERY)
 CLASS IX - ECONOMICS
Chapter 1: The Story of Village Palampur
o Factors of production:
1) Land, water, forests, minerals. Etc.
2) Labour – Educated or manual.
3) Physical capital – inputs required at every stage
a) Fixed Capital – Tools, machines, building,
generators, turbines, etc. can be used over
many years.
b) Working Capital – Raw material & money in
hand.
4) Human Capital
Chapter 2: People as Resource
o Educational Schemes:
1) Sarva Shiksha Abhiyan: Providing elementary
education to 6 to 14 years children by 2010. It is
time-bound initiative of central govt., in
partnership with state & local govt.
2) Mid-day Meal Scheme: To encourage
attendance and retention of children and
improve their nutritional status.
o Infant Mortality rate: Death of a child under 1 year of
age.
o Birth Rate: No. of babies born there for every 1,000
people during a particular period of time.
o Death Rate: No. of people per 1,000 who die during a
particular period of time.
Chapter 3: Poverty as a Challenge
o Poverty causes or issues: Landlessness or unequal
distribution on land and resources, Unemployment,
Size of family, Illiteracy , Poor health/malnutrition,
Child labour, Helplessness, Not implementation of
various policies such as, redistribution of land and
resources, Socio-cultural and economic factors, etc.
o Poverty Line: Estimated periodically (every 5 years) by
conducting sample survey carried by NSSO. On the
international level – World Bank use a uniform
standard. In India every 4th person is poor.
o Anti-Poverty Measure of Govt.: Based on; (1)
promotion of economic growth and (2) Targeted anti-
poverty programmes.
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o Prime Minister Rozgar Yojna (PMRY): Started in 1993,
to create self-employment opportunities for educated
unemployed youth in rural areas and small towns.
o Rural Employment Generation Programme (REGP):
Launched in 1995, to create self-employment
opportunities for educated unemployed youth in rural
areas and small towns. 25 lakhs job has been set under
the 10th five year plan.
o Swarnajayanti Gram Swarozgar Yojna (SGSY):
Launched in 1999, to bringing the assisted poor
families above the poverty line by organizing them into
SHGs through mix of bank credit & govt. subsidy. Now,
National Rural Livelihoods Mission (NRLM).
o Pradhan Mantri Gramodaya Yojna (PMGY): Launched
in 2000, Additional central assistance given to states
for basic services such as primary health, education,
rural shelter, drinking water and rural electrification.
Chapter 4: Food Security in India
o What is Food Security?
1) Availability: Production, import and buffer stock
of food.
2) Accessibility: Within reach of every person.
3) Affordability: Individual has enough money to buy
sufficient, safe and nutritious foods to meet one’s
dietary needs.
o Buffer Stock: Stock of food grains, namely wheat and
rice procured by the govt. through Food Corporation
India (FCI). FCI purchases wheat and rice from farmers
in states where there is surplus production.
o Minimum Support Price (MSP): The farmers are paid a
pre-announced price for their crops. Declared by the
govt. every year before the sowing season to provide
incentives to farmers for raising the production of these
crops.
o Issue Price: Distribution of food grains in the deficit
areas and among the poorer strata of society at a price
lower than market price.
o Public Distribution System (PDS): Food procured by FCI
 regulated ration shops / Fair Price Shops.
o Antyodaya Anna Yojna (AAY): Target group of ‘poorest
of poor’
o Annapurna Scheme (APS): Target group of ‘indigent
senior’.
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 CLASS X - UNDERSTANDING ECONOMIC DEVELOPMENT
Chapter 1: Development
o Per capita income: Average income / Total population.
(Prepare the World Development Reports – World Bank
& Measure in dollars)
o Infant Mortality Rate: No. of children die before age of
1 year as a proportion of 100 live children born in
particular year.
o Literacy Rate: Literate population in the 7+ age group.
o Net Attendance Ratio: Total number of children of age
14 & 15 years attending school as a percentage of total
number of children in the same age group.
o Body Mass Index: Weight (kg) / Height2 (metre). If less
than 18.5 – Undernourished, if more than 25 –
overweight.
o Life Expectancy at birth: Expected length of life of a
person at time of birth.
Chapter 2: Sectors of the Indian Economy
Primary Produced the goods by exploiting natural
(Agriculture) resources. E.g. agriculture, dairy, fishing,
Sector forestry, etc.
Activities in which natural products are
Secondary
changed into other forms through the
(Industrial)
ways of manufacturing. e.g. Sugarcane –
Sector
Gur/sugar
Helps in development of primary &
secondary sectors and aid or support for
Tertiary
the production process. It generates
(Service)
services rather than goods. E.g.
Sector
communication, transport, banking,
insurance, storage, etc.
o Final Goods: Final goods are goods that are ultimately
consumed rather than used in the production of
another goods.
o Total Production of year: The value of final goods and
services produced in each sector during a particular
year.
o GDP: Sum of final goods & services produced within
boundaries of a country during particular year. It
shows how big economy is.
o Why service sector is becoming so important in India?
1) In developing countries government has to take
responsibility for the provision of basic services
2) Development of primary & secondary sectors led
to development of service sector.
3) Income rise – start demanding services
4) IT based services has been rapidly rising.
o Underemployment: People are apparently working
but all of them are made to work less than their
potential. It is hidden and also called disguised o
employment.
o Planning Commission Study:
1) Nearly 20 lakhs jobs can be created in Education
sector.
3 | INDIAN ECONOMY
2) If tourism as a sector is improved, we can give
additional employment to 35+ lakhs people every
year.
o Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA), 2005:
- CG made law implementing Right to work in about
625 district.
- In this act, provides 100 days guaranteed
employment in a year. And aimed at sustainable
development to address the cause of draught,
deforestation and soil erosion.
- 1/3rd jobs reserved for women.
- If govt. fails to provide, it will give unemployment
allowances to the people.
o Division of sectors – Organized & Unorganized:
1) Organized Sector:
- Terms of employment or places are regular,
- Registered by the govt. and follow its rules &
regulations (given in Factories Act, Minimum
wages act, Payment gratuity act, etc.),
- It has some formal processes and procedures,
- Security of employment,
- Expected to work fixed hours (if they work more
– must paid overtime),
2) Unorganized Sector:
- Outside the govt. control
- Small & scattered units.
- Nonexistence of rules & regulations.
- Low paid & often not regular.
- No provision of overtime, paid leave, holidays,
etc.
- No job security.
o Division of Sectors – Ownership:
1) Public Sector:
- Most of assets owned by govt. and provide all
the services. (E.g. Railways, post offices, public
transports, etc.)
- Money raised by taxes & other possible ways.
- Why? To provide services at reasonable cost, to
provide facilities to everyone, to support farmers
& consumers.
2) Private Sector:
- Ownership of assets & delivery of services –
individuals / companies.
- These activities done by the motive of earn
profits.
Chapter 3: Money and Credit
Currency can be issued only by RBI on behalf of central
govt.
o Demand Deposit: Means the deposit in the bank
account can be withdrawn on demand.
o Loan activities in Banks: In India, banks hold just 15% of
their deposit as cash for the provision to pay on demand
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 of account holders. Other portion used to lend the If case dismissed in district level, consumer may
money as loans and charge higher interest rate than appeal to the state or national level court.
offer on deposits.
Bank’s Profit = (Interest gained on borrower – Interest
paid to deposit)
o Credit: An agreement in which the lender supplies the
borrower with money, goods or services in return for
the promise of future payment.
o Debt trap: Credit pushes the borrower into a situation
from which recovery is very painful.
o Terms of Credit: Interest rate, repayment,
documentation, mode of payments & Lenders may
demand a security (collateral) against loans. Collateral
means an asset that borrower owns and uses this as
guarantee to lender until the loan is repaid.

Chapter 4: Globalization & the Indian Economy

o Multinational Corporations (MNC): A company that
owns or controls production in more than one nation.
o Investment: Money spent to buy land, building,
machines, and other equipment. And investment
made by MNCs called foreign investment.
o Benefits by MNCs to Local company:
1) MNCs provide money for additional investment.
2) Access to developed technologies.
o Special Economic Zones (SEZs): Industrial zones which
provides electricity, roads, water, transport, and
storage, recreational and educational facilities. Units in
SEZs don’t have to pay taxes for first years.

Chapter 5: Consumer Rights

o In 1985, UN adopted guidelines for consumer
protection. At international level, this has become the
foundation for consumer movement. Consumer
International has become an umbrella body to over
220 members organizations from over 115 countries
o “24th December – National Consumer Day” in India.
o Information about Goods & Services:
- Right to be informed about goods and services that
they purchase.
- Any consumer who receive goods or services in
whatever capacity, regardless of age, gender,
nature of service has the Right to choose whether
to continue or not
- Right to information (RTI), Act, which ensure its
citizens all the information about the functions of
governments departments.
o Rights to get justice:
- Right to seek redressal against unfair trade
practices and exploitation. If damage is done – get
compensation depending on degree of damage.
- Rights to represent in consumer courts.
o Forums under COPRA, 1986:
 District level court – up to ₹ 20 lakhs
 State level court - ₹ 20 lakhs to ₹ 1 crore.
 National level court - ₹ 1 + crore

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 CLASS XI – INDIAN ECONOMIC DEVELOPMENT
UNIT I – DEVELOPMENT POLICIES AND individual. Purpose was to reduce land ownership
EXPERIENCE (1947- 1990) in a few hands.
- ‘Abolition of intermediaries’ i.e. 200 lakhs
Chapter 1: Indian Economy on the Eve of
tenants come into direct contact with govt. rather
Independence
than zamindars, jagirdars, etc.
o Capital Goods Industry: Industries which can produce
o Green Revolution: Use of ‘High Yielding Variety (HYVs)
machine tools which are in turn, used for
seeds.
industrialization.
o Subsidies: To encourage farmers to test the new
o National Product/Income: Total value of goods and
technologies in agriculture.
services produced in a country plus income from
o Marketed Surplus: It means the portion of agriculture
abroad.
produce which is sold in the market by the farmers.
o Commercialization of Agriculture: Production of crops
o Industrial Policy Resolution (IPR) 1956: It was formed
for the market rather than for self-consumption. The
on the basis of 2nd five year plan to promote regional
British started offering higher price to farmers for
equality. No industries were allowed unless license was
producing cash crops rather than for food crops.
obtained even exist industries as well. Licensed
Because cash crops were used as raw material for
industries were give tax benefits and electricity at
industries in Britain.
lower tariff. And classified industries in three
o Mortality Rate: The annual number of deaths (from
categories.
diseases or in general) per 1,000 people.
1) Industries exclusively owned by the state
o Infant Mortality Rate: The number of deaths of infants
2) Owned by the private sectors – supplement to
before reaching the age of 1 year, in a particular year,
the efforts of state sectors.
per 1,000 live births during that year.
3) Owned by just private sector.
o Occupational Structure before independence:
o Small Scale Industry: In 1950, village and small-scale
Agriculture – 70-75 %, manufacturing – 10 % and
industries committee / Karve committee, noted the
service sectors – 15-20%.
importance for promoting rural development. In 1950,
Chapter 2: Indian Economy 1950 – 1990 investment limit was ₹ 5 lakhs; at present maximum is ₹
o Five Year Plans: It was borrowed from the former 1 crore. Decided to reserve the products, and given
Soviet Union. It’s not only specify the objectives concession such as lower excise duty and bank loans at
attained in 5 years but also what is achieved over a lower interest rates.
period of 20 years (This long-term plan – ‘Perspective o Tariff: A tax on imports, which can be levied on either
Plan’). Prasanta Chandra Mahalanobis known as the on physical units or on value.
architect of Indian planning who established ‘Indian o Quotas: Quantities of goods which can be imported.
Statistical Institute (ISI)’ in Calcutta and started journal o Trade Policy – Import Substitution: This policy is aimed
‘Sankhya’. at replacing or substituting imports with domestic
Goals of 5 year plans: production and to protect domestic industries from
 Growth: Increase in the country’s capacity to foreign competition.
produce the output of goods & services within o Permit License Raj: Rules and regulations framed by the
the country i.e. increase in GDP. govt. to start, run and operate an enterprise for
 Modernization: Not only Adaptation of new production of goods and services in India.
technology in production but also recognition
UNIT II – ECONOMIC REFORMS SINCE 1991
to the women at workplace.
Chapter 3: Liberalization, Privatization and
 Self—reliance: Reduce the dependency on
Globalization: An Appraisal
foreign countries about goods or services.
o Reasons to introduce NEP: Form 1980s, in meet the
 Equity or Social Justice: Every Indian should be
following crises;
able to meet his or her basic needs.
 Not able repay the external debts.
o Land Reforms: Equity in agriculture which refer to
 Foreign Exchange Reserve were not sufficient for
change in the ownership of landholdings.
even a two weeks.
- ‘Policy of land to the tiller’ is based on the idea
 Rise in Prices of essential goods.
that cultivators will take more interest, have more
 Unemployment, population and poverty.
incentives and increasing output if they are
 Income for public sectors were not sufficient.
owners of land.
 Expenditure began to exceed its revenue.
- ‘Land Ceiling Policy’ means fixing the maximum
size of land which could be owned by an

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 India approached IMF & WB and received 7 billion dollars o Globalization: Integration of economy of a country with
as loan, on the following conditions. the world economy.
o Non-tariff barriers: Restrictions imposed by govt. other
 Liberalize the economy
than taxes may be in case of quantity or quality of goods
 Open the economy, remove the restrictions on
imported.
private sectors
o World Trade Organization: Founded in 1995 (General
 Reduce the role of govt. in many areas.
Agreement on Trade Tariff – GATT. It was established in
 Remove trade restriction between India & other
1948 with 23 countries to administer multi-lateral trade
countries.
agreement).
o Deficit Financing: A situation where the expenditure of
 Aim is to liberalize international trade (free trade).
the govt. exceeds its revenue.
 Establishes rules regarding international trade and
o Foreign Exchange: Currency or bonds of foreign
sees that these rules are obeyed.
country.
 Enlarge production & trade services, to ensure
o Balance of Payment (BoP): The outcome of total
optimum resources.
transactions of an economy with the outside world in 1
 To protect the environment.
year. It looks like Balance Sheet.
o An Appraisal?
o Inflation: A sustained rise in the general price level.
 GDP – increased, but not generated sufficient
o Fiscal Policy: All planned actions of a govt. in mobilizing
employment.
financial resources for meeting its expenditure and
 Not benefited agriculture, where the growth rate
regulating the economic activities in a country.
has been decelerating.
o Foreign Exchange Markets: A market in which
 Reforms in Industry recorded slowdown. Because
currencies are bought and sold at rates of exchange
of decreasing demand of industrial products.
fixed now, for delivery at specified dates in the future.
 Disinvestment of PSUs every year has been a
o Foreign Institutional Investors (FIIs): Banking and non-
substantial loss to the government.
banking financial institutions of foreign origin.
 Reforms and Fiscal Policies placed limits on the
o Foreign Institutional Investment: Which come in the
growth of public expenditure especially in social
form of stocks, bonds, or the financial assets. But is does
sectors. The tax reductions have not resulted in
not entail active mgmt. or control over the firms or
increase in tax revenue for the government.
investors.
o Quantitative Restrictions: Total quantities or quotas UNIT III – CURRENT CHALLENGES FACING THE
imposed on imports to reduce BoP deficit and protect INDIAN ECONOMY
domestic industry. Chapter 4: Poverty
o Import Licensing: Permission required from the govt. to
import goods into a country. Poverty Line
o Export Duties: Taxes imposed on goods exported. Billionaires
o Disinvestment: Sale of capital stock of a company to Millionaires
raise resources and change equity and / or mgmt.
Non Poor
The very rich
structure of a company. The rich
o Devaluation: A fall in exchange rate which reduce the Upper middle class
value of currency in terms of other currencies. Middle class
o Liberalization: Put an end to the restrictions and open Not so poor
up various sectors. Poor
 Deregulation of industrial sector.
Poor

Very poor
 Financial sectors reforms – allowed to take
Absolutely poor
decision without consulting the RBI.
o Head Count Ratio: When the number of poor is
 Tax reforms
estimated as the proportion of people below the
 Foreign exchange reforms.
poverty line.
 Trade & investment policy reforms.
o Swarna Jayanti Shahari Rozgar Yojna (SJRSY):
o Privatization: Shedding the ownership or mgmt. of a
Creating self and wage employment in urban areas
govt. owned enterprises.
under the Khadi & Village Industries Commission. Now,
 Maharatnas – Indian Oil Corporation Ltd. and Steel
National Urban Livelihoods Mission (NULM).
Authority of India Ltd.
 Navratnas – Hindustan Aeronautical Ltd. And
Mahanagar Telephone Nigam Ltd.
 Miniratnas – BSNL, Airport Authority of India and Chapter 5: Human Capital Formation in India
Indian Railway Catering & Tourism Corp. Ltd.

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o Human Capital: Education & health as a means of to
increase labour productivity.
o Human Development: Based on, education & health
are integral to human well-being. And have the rights
of it.
o Education Sectors Institution: NCERT, UGC & All India
Council of Technical Education (AICTE).
o Health Sectors Institution: Indian Council of Medical
Research (ICMR).
o Tapas Majumdar Committee: In 1998, estimated
expenditure of ₹ 1.37 lakhs crore over 10 years (1998-
99 to 2006-07) to bring all Indian children in the age
group of 6-14 years under the purview of school
education.
o Right to Education Act, 2009: To make free education
a fundamental right of all children in the age group of
6-14 years.
Chapter 6: Rural Development
o Areas which are challenging for Devt.
1) HRD – literacy, skills and health
2) Land reforms
3) Development of productive resources
4) Infrastructure Development
5) Special measures for alleviation of poverty,
improvement in living conditions of weaker
sections and access to employment opportunities.
o National Bank for Agriculture & Rural Development
(NABARD): Set up in 1982, apex body to coordinate the
activities of all institutions involved in rural financing
system.
o Steps to improve the marketing aspects:
1) Regulation of market
2) Infrastructure
3) Cooperative marketing – fair prices for farmers’
products
4) Policy instruments – assurance of MSP,
maintenance of buffer stocks, and Distribution
through PDS.
o Saansad Adarsh Gram Yojana (SAGY): MP’s identify and
develop the village for their constituencies. It covering
2,500 villages in India. But it should not be MP’s own or
their spouse village.
Chapter 7: Employment – Growth, Information &
Other Issues
o Casualization of Work: Process of moving self and
regular salaried employment to casual wage work.
o Labor Laws: Rules & regulations made by govt. to
protect the interest of the workers.
o Trade Union: Organization of workers to address its
members’ interests in respects of wages, benefits and
working conditions.
7 | INDIAN ECONOMY
o Social Security: A govt. or privately established system
of measures, which ensure material security of elderly,
disabled, widows, destitute and children. It includes
pension, PF, gratuity, maternal benefits, health care,
etc.
o Formal Sector Employment: Info is collected by Union
Ministry of Labour though employment exchanges
located in different parts.
o Sources of Data on Employment:
1) Reports on Census of India
2) Report on Employment & Unemployment Situation
by NSSO
3) Directorate General of Employment & Training Data
of Registration with Employment Exchange.
Chapter 8: Infrastructure
o Infrastructure: Supporting services in main areas of
industrial and agricultural production, domestic and
foreign trade and commerce. It includes Roads,
railways, ports, airports, dams, power stations, oil & gas
pipelines, telecommunication facilities, educational
systems (school & colleges), health system (hospitals),
sanitary system (clean drinking water), monetary
system (bank, insurance & financial institutions).
o Morbidity: The proneness to fall ill.
o Challenges in Power Sector:
- Capacity to generate electricity is not sufficient.
- State Electricity Boards (SEBs) incurred losses which
exceed ₹ 500 billion.
- Private investors are playing major role.
- High power tariffs & power cuts in different parts.
- Shortage of raw material & coal in thermal power
plants.
o Central Council of Health & Medical Welfare: Collects
information & renders financial & technical assistance
to state govt., UTs and other bodies for implementation
of important health programmes in country.
o Indian Systems of Medicine (ISM): Includes 6 systems –
Ayurveda, Yoga, Unani, Siddha, and Naturopathy &
Homeopathy (AYUSH).
UNIT IV – DEVELOPMENT EXPERIENCES OF
INDIA: A COMPARISION WITH NEIGHBOURS
Chapter 10: Comparative Development
Experiences of India & It’s Neighbour
o South Asian Association for Regional Cooperation
(SAARC): An association of 8 countries of South Asia –
Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan,
Shri Lanka, and Afghanistan. Platform for SA countries
to work together in spirit of friendship, trust &
understanding and aims to accelerate the process of
social & economic development in member countries.
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o European Union: Union 25 independent states founded o G-8: Group of 8 countries to annual political & economic
to enhance political, economic, and social cooperation summit meeting of heads of govt. with international
within the European continent. officials.
o The Association of South-east Asian Nations (ASEAN):
Political, economic & cultural organization of counties
in SE Asia.
o G-20: Promote global economic stability & sustainable
growth. This forum brings finance ministers & central
bank governors from 19 countries including India. EU
also member of G20.

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