CBSE Class XII Indian Economic Development

1. INDIAN
ECONOMY
(1950-1990)
By Priyanka Chhabra

2. CENTRAL PROBLEMS OF AN ECONOMY
What to produce?
How to produce?
For whom to produce?
By Priyanka Chhabra

3. Types of Economic System
Capitalist
Economy
Socialist
Economy
Mixed
Economy
By Priyanka Chhabra

4. By Priyanka Chhabra

5. India adopted
Mixed Economy
By Priyanka Chhabra

6. By Priyanka Chhabra

7. ECONOMIC PLANNING
• It can be defined as
• making major economic decisions
(what, how and for whom to produce)
• by the conscious decision of a
determinate authority
• on the basis of a comprehensive
survey
• of the economy as a whole
By Priyanka Chhabra

8. By Priyanka Chhabra

9. • To make economic planning effective, GoI
set up Planning Commission in 1950, with
PM as the Chairman
• Its purpose was to carefully assess the
human and physical resources of the
country and to prepare Plans for their
effective utilization
• The planning period was fixed at 5 years
• It began the era of Five Year Plans
PLANNING COMMISSION
By Priyanka Chhabra

10. MEANING OF PLAN
• It is a document
• Showing detailed scheme, program
and strategy
• Worked out in advance
• For fulfilling an objective
• Within a specified time period
By Priyanka Chhabra

11. FEATURES OF A PLAN
• Plans are made for duration of 5 years and
are known as ‘Five Year Plans’
• It specify objectives to be attained
• There are two types of plan
• Perspective Plans
• Five Year Plans
• Perspective Plans are long term plans for 20
years
• Five Year Plans provide basis for
Perspective Plans
By Priyanka Chhabra

12. FEATURES OF FIVE YEAR PLAN
• It has been concerned with the removal of
economic backwardness of the country
• It aimed at making India developed
• It ensures that weaker section gets benefit
from the progress of the country
• It contains basic goals for India’s development
• Each plan has different goals
• First FYP was from 01/04/1951 to 31/03/1956
• Last FYP was from 01/04/2012 to 31/03/2017
By Priyanka Chhabra

13. Twelfth Plan 2012-2017
By Priyanka Chhabra

14. GOALS OF FIVE YEAR PLANS
Growth Modernization
Self-reliance Equity
By Priyanka Chhabra

15. GROWTH
• It is the first and foremost objective of Indian plan
• It refers to increase in country’s capacity to
produce the output of goods and services within
the country
• It implies:
• Either a large stock of productive capital
• Or a large size of allied services
• Or an increase in the efficiency of productive
capital and services
• Increase in GDP is an indicator of Economic Growth
as it enables people to enjoy a more rich and varied
life
By Priyanka Chhabra

16. MODERNISATION
• It indicates a variety of structural and
institutional changes in the framework
of economic activity.
• It implies
• Shift in sectoral composition of
production
• And diversification activities
• An advancement of technology
• And institutional innovations
• So as to transform
• A feudal and colonial economy into a
modern and independent economy
By Priyanka Chhabra

17. Adoption of
new
technology
Change in
social outlook
Modernisation
By Priyanka Chhabra

18. SELF- RELIANCE
• It means overcoming the need of
external assistance
• It is related to the use of own
resources, so as to reduce the
dependence on foreign countries
• Importance:
• To reduce foreign dependence
• To avoid foreign interference
By Priyanka Chhabra

19. By Priyanka Chhabra

20. 1. ECONOMY
We need an economy that doesn't bring incremental
change but makes quantum jumps.
2. INFRASTRUCTURE
We need infrastructure that will become the identity of
modern India.
3. SYSTEM
We need a system that is no longer based on the rules and
rituals of the past but one that actualizes the dreams of the
21st century. This system needs to be technology-based.
4. DEMOGRAPHY
We are the world's biggest democracy. A vibrant
demography is our strength. It is the source of energy for
our efforts to make India self-reliant.
5. DEMAND
The cycle of demand and supply in our economy is an asset.
We need to utilize this power fully.
By Priyanka Chhabra

21. "I announce a special economic
package today. This will play an
important role in the 'Atma nirbhar
Bharat Abhiyan'. The announcements
made by the government over Covid-
19, decisions of RBI and today's
package totals to Rs 20 lakh crores. This
is 10 per cent of India's GDP,"
By Priyanka Chhabra

22. "The economic package will
help cottage industries, home
industry, small-scale industries,
MSMEs, which are the means of
livelihood for crores of people.
This package is also for farmers,
who toil in different weather
conditions and for the middle
class who pay their taxes on
time,"
By Priyanka Chhabra

23. "Time has taught us that we must
make 'local' the mantra of our lives.
Global brands that are there today
were once local too but when people
there started supporting them they
became global. That is why from today,
every Indian must become vocal for
our local,"
By Priyanka Chhabra

24. VOCAL
FOR
THE LOCAL
By Priyanka Chhabra

25. EQUITY
• It aims to raise the standard of living of
all people and promote social justice
• According to the goal of equity
• every Indian should be able to
meet his/her basic needs
• inequality should be reduced and
• The benefits of economic
prosperity should reach all sections
of the society.
By Priyanka Chhabra

26. EQUAL
v/s
EQUITABLE
By Priyanka Chhabra

27. By Priyanka Chhabra

28. FEATURES OF ECONOMIC
POLICY TILL 1991
• Heavy reliance on Public Sector
• Regulated development of Private Sector
• Protection of Small scale industry and regulation of large
scale industry
• Development of heavy industry of strategic significance
• Focus on saving and investment
• Protection from foreign competition
• Focus on import substitution
• Restriction on foreign capital
• Centralized planning
By Priyanka Chhabra

29. SUCCESS OF PLANNING
• Increase in national income
• Prior to planning – 0.5% pa
• 1st FYP – 4.6% (ACTUAL) 2.1% (TARGET)
• 11th FYP – 7.5% (ACTUAL) 9% (TARGET)
• 12TH FYP – 6.7% (ACTUAL) 8% (TARGET)
• Increase in Per Capita Income
• Prior to planning – NEGLIGIBLE
• 1st FYP – 2.7%
• 11th FYP – 6%
• 12TH FYP – 5.7 % AS AGAINST 5.3%
• Rise in Savings and Investment
• 1950-51 - 9.5% 9.3%
• 2015-16 - 32.3% 33.3%
By Priyanka Chhabra

30. • Institutional and Technical change in Agriculture
• Abolition of intermediaries
• Ceiling on land holdings
• Improvement in technology (HYV seeds)
• Growth and Diversification of Industry
• Consumer good industries achieve self
sufficiency
• Indian economy is now 10th largest economy in
the world
• Economic Infrastructure
• Indian railways has become one of the world’s
largest railway networks
• Power generation capacity has increased from
2300 MW in 1950-51 to 330861 MW in 2017
By Priyanka Chhabra

31. • Social Infrastructure
• Death rate has reduced to 6.4 per
thousand from 27 per thousand in 1950-51
• Life expectancy has increased from 27
years to 69 years in 2015
• Employment
• Unemployment rate has came down to
5.6% in 2011-12
• MGNREGA
• International Trade
• Value of foreign trade has increased from
792 crores to 4031719 crore in 2016-17
• We are now exporting engineering goods
as compared to primary goods in British
era
By Priyanka Chhabra

32. FAILURE OF PLANNING
• Abject Poverty
• High rate of Inflation
• Unemployment Crises
• Inadequate infrastructure
• Skewed distribution
By Priyanka Chhabra

33. AGRICULTURE
By Priyanka Chhabra

34. CONDITION OF AGRICULTURE
• Low productivity
• Disguised Unemployment
• High dependency on rainfall
• Subsistence farming
• Outdated technology
• Conflicts between tenant and landlords
By Priyanka Chhabra

35. Land
reforms
Green
revolution
POLICIES FOR GROWTH OF
AGRICULTURE
By Priyanka Chhabra

36. Abolition of Intermediaries
• It brought 200 lac tenants into direct
contact with the govt
• It gave them incentive to increase
output
• It could not achieve the goal of
equity
Land Ceiling
• It refers to fixing the specified
limit of land that can be own
by an individual
• Extra land will be taken over by
govt and allotted to landless
cultivators
• It helped to promote equity
LAND REFORMS
By Priyanka Chhabra

37. By Priyanka Chhabra

38. GREEN REVOLUTION
• It refers to large increase in production
of food grains by using HYV seeds
• Also known as New Agricultural Strategy
• Adopted in Third Plan i.e. during 1960s
• Its aim was to raise agricultural
production through introduction of
fertilizers, credit, marketing facilities etc
By Priyanka Chhabra

39. By Priyanka Chhabra

40. PHASES OF GREEN
REVOLUTION
1st Phase (1960-1970)
Use of HYV seeds was
restricted to Punjab, AP, TN
etc
Benefited primarily wheat
growing regions
2nd Phase (1970-1980)
Spread to large no of states
Benefited more variety of
crops
By Priyanka Chhabra

41. EFFECTS OF GREEN
REVOLUTION
Resulted in Marketable Surplus
Buffer stock of food grains
Decline in the prices of food grains
By Priyanka Chhabra

42. By Priyanka Chhabra

43. RISK INVOLVED UNDER
GREEN REVOLUTION
Risk of pest
Attack
Risk of Increase
in Income
Inequality
By Priyanka Chhabra

44. DEBATE OVER SUBSIDY TO
AGRICULTURE
Favor
•Farming is a risky business
•Low affordability of farmers
•Eliminating subsidy may
violate the goal of equity
Against
•Subsidies should be phased
out after adoption of
technology
•Poor and small farmers will
not receive its benefit
By Priyanka Chhabra

45. CRITICAL APPRAISAL OF
AGRICULTURAL DEVELOPMENT
• ‘Land Reforms’ and ‘Green Revolution’
were the greatest achievement
• Self sufficiency in food production
• Abolition of zamindari system
• Declined contribution by agriculture in GDP
of country
• Disguised unemployment
By Priyanka Chhabra

46. INDUSTRY
By Priyanka Chhabra

47. IMPORTANCE OF INDUSTRY
• It is an epicenter of economic growth
• It increases per capita income
• It increases forex reserve with the country
• It is an important source of employment
especially when agriculture is over burdened and
labor force is rising rapidly
• It helps in the mechanization of farming by
providing machineries like tractors, threshers etc.
• It has provided with a wide variety of goods and
services
• It provides infrastructural facilities like railways,
power generation etc.By Priyanka Chhabra

48. ROLE OF PUBLIC SECTOR
Shortage of capital with Private
Sector
Lack of incentive with Private sector
Objectives of Social Welfare
By Priyanka Chhabra

49. IPR 1956
• On 30 April 1956, a second IPR was adopted in
India
• It was a comprehensive package of policy
measures which covers various issues
connected with different industrial enterprises
of the country
• It laid a roadmap for the 2nd FYP
• It was a milestone for achieving growth with
social justice
• After IPR 1948, Indian economy faced a series
of economic and political changes which
necessitated the need for fresh IPRBy Priyanka Chhabra

50. ELEMENTS OF IPR 1956
Industrial
Concession
Industrial
Licensing
Classification
of Industries
By Priyanka Chhabra

51. CLASSIFICATION OF INDUSTRIES
Schedule A
• Exclusively
owned by
states
• 17 industries
Schedule B
• Owned by both
public and
private sector
• Secondary role
of private
sector
• 12 industries
Schedule C
• Owned by
private sector
• Industries
Development
and
Regulation act
1951
By Priyanka Chhabra

52. INDUSTRIAL LICENSING
• It is a written permission from the government to an
industrial unit to manufacture goods
• That is industries in private sector could be
established only through a license from the
government
• The idea was to develop regional equality through
establishing industries in backward regions of the
country
• License was required form business expansion as
well
• The focus was to develop social welfare rather than
private profit
By Priyanka Chhabra

53. INDUSTRIAL CONCESSION
• Private sector was offered with various
concessions for establishing industries in
backward regions
• These concessions include:
• Tax holiday i.e. freedom from tax
payment for a specified period
• Subsidized power supply
• The focus was to promote regional equality
By Priyanka Chhabra

54. SMALL SCALE INDUSTRIES
• It is defined as one whose investment does
not exceed Rs. 5 crore (in 1951 it was 5 lac)
• It was given by Karve Committee also
known as Village and Small Scale Industries
Committee in 1955
• They cannot compete with big industrial
firms
• Their products were reserved and various
concessions were given
By Priyanka Chhabra

55. CHARACTERISTICS OF SSI
Equity Oriented
Equality
Oriented
Employment
Friendly
By Priyanka Chhabra

56. CRITICAL APPRAISAL OF
INDUSTRIAL DEVELOPMENT
6% annual increase
in output
Diversification of
industrial sector
Growth of LSI
Growth of SSI
Good
Effects
Inefficient Public
Sector
Lack of
competition
Decrease in FOREX
reserve
Bad
Effects
By Priyanka Chhabra

57. FOREIGN TRADE
By Priyanka Chhabra

58. CONDITION DURING 1947
• Indian economy suffered colonial exploitation
• Britishers used our natural resources as raw
material for their domestic industrial output
• Indian economy was only importing British
industrial goods
• On the eve of independence, India’s BOT was
favorable
• In 1946-47, BOT was 31 crore which reduced to 14
crore in 1947-48
• India’s trade was restricted to Britain
• The composition of trade indicated backwardness
of Indian economyBy Priyanka Chhabra

59. DirectionofTrade
CompositionofTrade
VolumeofTrade
Moderate
Decay of
Handicraft
Industries
Surplus in
BOT
Backward
Export of
raw
material
Import of
Finished
Goods
With
Britishers
By Priyanka Chhabra

60. IMPORT SUBSTITUTION
• It was an inward looking trade strategy
• It aims to give protection to domestic industries
through import restrictions and import duties in the
area of international trade
• It means production of those goods which the
economy has been importing from RoW
• It is a strategy to save Forex by restricting volume of
import
• Such Forrex can be utilized for developmental imports
• Through this GoI tried to economize the use of Forex
rather than maximize the generation of Forex
• Protection was given to domestic industries through
Tariffs and Quotas
By Priyanka Chhabra

61. IMPACT OF IMPORT
SUBSTITUTION
High rate of
Industrial Growth
Diversification of
Industrial Growth
Opportunities of
Investment
Growth of Sunrise
Industries
Structural
Transformation
Good
Impact Growth of
inefficient Public
Monopolies
Lack of
Modernisation
Indiscriminate
spread of PSU
Economically
unviable state
enterprises
Bad
Impact
By Priyanka Chhabra

62. By Priyanka Chhabra

63. India became
self reliant in
food production
Diversified
Industrial Sector
with excessive
government
regulations
Inward looking
strategy
By Priyanka Chhabra

64. By Priyanka Chhabra

65. By Priyanka Chhabra