The Critique of the Eleventh Plan

11th FYP visualizes "Faster and more inclusive growth" as its objective. Does the 11th plan really address the concern?

Targets fixed by 11th plan

(1) to push overall GDP to average rate of 9%
(2) boosting agriculture growth to 4% from a disappointing 2%, industry to 10-11% and services to 9-11%
(3)Generation of 58 million employment opportunities;
(4) Reduction unemployment among the educated to less than 5%.
(5) 20% increase in the real wage of unskilled workers.
(6) Reduction in headcount ratio of poverty by 10 percentage points.

(ii) Education

(1) Reduction in drop-out rate among children at the  elementary level from 52.2% in 2003-04 to 20% by 2011-12.
(2) Developing minimum standards of attainment in elementary schools, to ensure quality of education.
(3) Increasing literacy rate for persons 0-7 years or more to 85% by 2011-12.
(4) Reducing gender gap in literacy to 10 percent points by 2011-12.
(5) Increasing the percentage of persons going for higher education from 10% to 15% by 2011-12.

(iii) Health

(1) Infant mortality rate (IMR) to be reduced to 28 and maternal mortality rate (MMR) to 1 per 1,000 by 2011-12.
(2) Total fertility rate to be reduced to 2.1 by 2011-12.
(3) Clean drinking water to be made available to all by 2009.
(4) Malnutrition among children of age 0-3 to be reduced to half its present level.
(5) Anaemia among women and girls to be reduced to half its present level.

(iv) Women and Children

(1) Sex ratio for age group 0-6 to be raised to 935 by 2011-12 and to 950 by 2016-17.
(2) Ensuring that at least 33% of beneficiaries of all government schemes are women and girl children.
(3) Ensuring that all children enjoy a safe childhood, without any compulsion to work.

(v) Infrastructure

(1) To ensure electricity connection to all villages and BPL (Below Poverty Line) Households by 2009 and reliable power by the end of the 11th  Plan.
(2) To ensure all, weather road connection to all habitations with population 1000 and above (500 and above for hilly areas) by 2009.
(3) To connect every village by telephone and provide broad band connectivity to all village by 2012.
(4) To provide homestead sites to all by 2012 and step up the pace of housing construction for the poor to
cover all the poor by 2016-17.

(vi) Environment

(1) To increase forest and tree cover by 5 percentage points.
(2) To attains WTO standards of air quality in all major cities by 2011-12.
(3) To treat all urban waste water by 2011-12 to clean river waters.

To increase energy efficiency by 20 percentage points improvement of governance.

For these targets government indicated the concept of 'inclusive growth' as a part of 11th plan framework and intends to chart out a course which is basically anti-labour and pro-corporate sector. This is precisely in conflict with the goal of providing secure income and employment for "aam admin". The best way to achieve this is to promote small and medium enterprises (MSMEs) and small peasant agriculture. But there is no clear policy of promoting SME. The recommendations of the National Commission on Farmers (NCF) headed by Dr. M S Swaminathan regarding setting up a fund for farmers affected by crop lease, reducing interest on import of agricultural products, have not been included in the Eleventh Plan. The removal of poverty requires targeted attention. The Planning Commission has given a long catalogue of schemes such as NREGS, SJRY, slum improvement program, housing for poor and skill development program etc. The effectivity of implementation will indicate the extent to which the targeted beneficiaries are helped. The Planning Commission is silent on issues like food security, strengthening price support systems, creation of price stabalization fund for agricultural comodities, universalization of crop insurance, protection to peasantry from subsidized imports of agricultural commodities and land reform.

Inclusive Growth part 2

We have so far covered rapid growth that reduces poverty and creates employment opportunities, access to essential services in health and education especially to poor and empowerment through education and skill development. These topics were covered from Dutt and Sundaram, India 2013 and 11th Five Year Plan Ch - 11 on inclusive growth.

Now moving futher, as we talked about seven broad targets for achieving inclusive growth we move to the fourth one mentioned. 

Extension of employment opportunities using National Rural Employment Guarantee Program

Through this target Government has thus tried to develop and transform the rural economy for rapid expansion of employment and income opportunities, both on farm and off farm along with improvement in health, education and skill development. The development efforts have been directed in creating adequate livelihood and provision of services for a better quality life for poor. However the poverty estimates as per the methodology suggested by Tendulkar Committee put 41.8% of rural population  Below Poverty Line (Various States BPL figures) which indicates that concerted efforts are required to alleviate poverty in the rural areas.

Schemes such as Mahatma Gandhi Rural Employment Guarantee Act, Sampoorna Gram Swarozgar Yojana ect are some break through into this way. But these schemes have their own loopholes.

Environment Sustainability

With environment sustainability in mind, environment concerns were given a high place in the plan. The role of  environment and forestry is very crucial for inclusive growth and sustained economic development of a country. Environmental management (including municipal solid waste and sewage management) is a crucial component of urban planning and has been sadly neglected. Sewage treatment must be given focused attention. Recycling of the treated water for appropriate purposes must be incentivized. Efforts will be made to integrate sewage treatment with water conservation. The River Conservative Programme strengthened to ensure adequate water supply for quality living conditions. Participating systems also strengthened for sustainable use of forests in keeping with the global consensus on the need for community involvement for
management of natural resources. The prospect of climate change presents a serious threat to our development over the longer term horizon. Available scientific evidence suggests that India will be one of the countries that will be severely affected by climate change. The Himalayan glaciers are already receding and the trend could intensify. There is likely to an increase in the mean temperatures which would have adverse effects on foodgrain production with the present level of technology. The monsoon would be affected with a greater frequency of extreme events. We have to evolve a positive stance toward adaptation and also engage constructively with the international community to reach a consensus on mitigation based on fair principles of burden sharing. (Please refer to NGRBA, NGT )

We must certainly begin to consider what steps we need to take to adapt to these changes and to mitigate the damage to climate. However, an effective strategy requires international co-operation to evolve forms of burden sharing for mitigation as well as adaptation that are fair and equitable across nations. We have to address these challenges in the years ahead.

Reduction in Gender inequality

To advance social inclusion by promoting positive relationships among men and women, different groups and individuals within communities is a major challenge so that all identify with and belong to a community. For women in India, the challenge is particularly complex. Forty-nine percent of the poor are women and 96 percent of the women work in the informal economy. The 11th Five-Year Plan (2008-12) points out that “gender inequality remains a pervasive problem and structural changes are having an adverse effect on women.”
While endeavoring to guarantee the rights and entitlements of all women, the Eleventh Plan recognizes that women are not a homogeneous category. Their situations, and consequently requirements, differ based on their locations within various castes, communities, religions, geographic and development zones and the effort during the Eleventh Plan is to cater to all these differential and specific requirements.

Improvement in Governance

Over the years we hear our Government making so many plans and launching so many schemes  but they are all found to be ineffective. The cause = corruption a t various levels of Government structure, poor design and insufficient accountability. It is therefore important to improve evaluation of the effectiveness of how government programmes work and to inject a commitment to change their designs in the light of the experience gained.

Accountability and transparency are critical elements of good governance. The Right to Information Act (RTI) enacted in 2005 empowers people to get information and constitutes a big step towards transparency and accountability.

The Deep Web

     The Deep Web

·   Deep Web is the part of the Internet that search engines do not reach.

·     Most of the Web's information is buried far down on dynamically generated sites, and standard search engines do not find it. This means Traditional search engines cannot "see" or “retrieve” content in the deep Web.

·   It is also known as Deepnet, the Invisible Web, the Undernet or the Hidden Web, and is World Wide Web content that is not part of the Surface Web, which is indexed by standard search engines. Mike Bergman, founder of Bright-Planet has coined this phrase i.e. Deep Web.

·     There is a lot of information hidden in the form of websites that standard search engines do not find because those pages do not exist until they are created dynamically through a specific search.

·     It makes use of an anonymity network called ‘Tor’ which encrypts the data and then distributes the small packets of data across multiple relays set-ups by users across the world.

·     These websites with the help of Tor are launched on onion network i.e. they make use of onion URL. You need to install Tor Browser Bundle, if you want to access those websites which uses a special DNS server.

·   "Onion Network Routing" refers to the layers of the encryption used. The original data, including its destination, are encrypted and re-encrypted multiple times, and are sent through a virtual circuit comprising successive, randomly selected Tor relays.

·   The Tor browser guides the route and in due course hops many times so as to keep the identity of website and the user anonymous i.e. they keep the IP address unknown.

·    It can be used by intelligence agencies for their surveillance practices as it keeps critical and important documents private. It can also be used by government research, military and police departments for hidden communication and safe submission of sensitive documents to various government authorities.

Still technology is always meant for welfare of human beings and should not be misused. Deep Web is a remarkable concept and government regulation and controls are needed for its safe use.

Inclusive Growth

This is a small compilation of various sources I tired to study for the Inclusive growth and issues arising from it. I will try to present the whole topic in various posts.

First of all what is Inclusive Growth?

In simple words Inclusive growth means broad based growth, shared based growth and pro-poor growth. It decreases the level of poverty in a country and increases the involvement of people into the growth process of the country. Inclusive growth as the literal meaning of the two words refers to both the pace and the pattern of the economic growth. The ‘inclusive growth’ as a strategy of economic development received attention owing to a rising concern that the benefits of economic growth have not been equitably shared. Growth is inclusive when it creates economic opportunities along with ensuring equal access to them. Apart from addressing the issue of inequality, the inclusive growth may also make the poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections of the society (as stated by planning commission 2007).

 So Inclusive growth in our country is possible if the targets are set to achieve :

1. rapid growth that reduces poverty and creates employment opportunities.
2. access to essential services in health and education especially to poor.
3. empowerment through education and skill development.
4. extension of employment opportunities using National Rural Employment Guarantee Program
5. environment sustainability
6. reduction of gender inequality
7. improvement in governance.

Now taking each and every point mentioned above.

Rapid growth and Poverty reduction 

For rapid growth, it is essential to achieve increase in employment and income for large number of our people. Growth should be balanced in such a way that the job creation is done in industrial and services sector and this must be accompanied with efforts to increase real incomes per-head. And also increase income opportunities for those who remain in agriculture by raising land productivity.

11th FYP's focus on inclusive growth resulted in greater attention to MSE. These enterprises create most of the employment in industry since they are less capital intensive, entrepreneurial and dispersed. The MSME is dedicated to the growth of this sector. This sector contributes 8% of country's GDP, 45% of manufacturing sector's output and 40% of exports.

The ability to generate an adequate number of employment opportunity is one of the major factor on which India's inclusive growth will be measured because India is going through the stage of Demographic Transition. This means that working people will have fewer dependents.  This young demographic profile places India in a favorable place in terms of manpower availability and this could prove a great for investment when the industrial world is ageing. Since more women have entered the workforce the unemployment rate has also increased.



Access to Essential Services

Now what do we understand by essential services? They are the basic need of any individual. Yes! Roti, Kapda aur Makan (Manoj Kumar has done much research on the topic though !!) Elaborating this essential need would mean public goods and services and natural resources. Access to health services, food, electricity, roads, credit facilities for investment, education and all what u can think of. Thus in short run access to basic facilities such as health, education, clean drinking water etc impacts directly on welfare, in long run it determines economic opportunities for the future. Thus 11th FYP's vision of reduction of poverty includes major expansion in the supply of these services. There is a massive thrust in this plan on access to education and health through schemes such as National Rural Health Mission, Sarva shikha Abhiyan etc.

Empowerment through Education and Skill Development

The 11th FYP placed agreat emphasis on expanding access to all levels - elementary education, secondary education and higher education - also improving the quality of education. Sarva Shikha Abhiyan is one of the major social sector flagship program addressing the national resolve of Universalization of Elementary Education (UEE). As a result there is a reduction in drop out rate (though not a significant reduction), an increase in Gross Enrollment Rate.

The quality of teaching in our elementary schools is also not what it should be. Teacher absenteeism is widespread, teachers are not adequately trained and the quality of pedagogy is poor. These issues are being tackled by concerned authorities. Besides, there are equality concerns of disadvantaged, vulnerable social groups and urban-deprived groups with regards to access and retention; decentralization of teachers recruitment  and decision-making. 11th FYP also began the process to universalize secondary education.

Some of the proposed actions in 11th FYP for secondary education includes the following :

1. Rapid up-gradation of  15000 Upper Primary Schools to Secondary Schools.

2. Establishment of high quality model schools at block level to serve as benchmarks for excellence in secondary schooling though PPP.

3. Provision of Laboratories/ Libraries and also strengthening of the existing facilities available.

4. Provision of hostels and residential schools for girls.

5. A more liberal approach on the part of State Government on allowing private schools to set up to meet the large unmet demand of quality education.

11th Plan also focused on the development of higher education and technical and professional education. GER for India currently is 18.8% which is behind China. (India And US GER Dialogue) A general improvement in  the quality of universities is necessary, including up-gradation of facilities and improved methods of teaching. (Please refer to 11th FYP for initiatives taken in education sector)

Skill Development poses major challenges and also open up unprecedented doors for opportunity. The NSS 61st round results shows that among age group of 15-29 only about 2% have received formal vocational training, indicating that very few young persons actually enter the world of work with any kind of formal vocational training.  Our Vocational Education and Training system needs to cover more trades. However it is suffering from disabilities such as poor infrastructure, ill-equipped classrooms/laboratories/workshops, below par faculty, absence of measurement of performance and outcomes etc.

In addition to the existing basic problems with the skill development system in the country , the urgency is felt with the demographic changes taking place.

Electoral Reforms... A long way to go

                                                         

Electoral reforms.... A long way to go 

Fair, transparent and just elections are soul of democracy but       criminalization deteriorate the very idea of democracy. Since          last two decade people's faith in election and democracy is          reducing consistently which is a further blow on democracy. to      correct this situation changes in election process in the form of      electoral reforms is inevitable. some important electoral reforms    include; use of EVM, Universal Adult Franchise initiated by      61st Amendment, 1988 which has reduced the age of voters        from 21 years to 18 years and Anti- Defection Law which            curtails the criminals from taking tickets of various political             parties. despite these reforms criminalization of politics did not      reduce even marginally. Recent two SC ruling again started the debate for need of more vigorous electoral reforms. In one ruling SC banned those politician, who are convicted for more than 2 year by any court of law, from contesting election as well as forfeiture of membership of legislative assembly and parliament. In second ruling SC ordered election commission to include ' none of the above' option in EVM or ballet paper. Both of the ruling likely to affect the upcoming election result.
                       While one will help to give the country a good,clean, corruption free and transparent governance second will give the voter greater flexiblity and freedom for the expression. Among two landmark judgement second judgment; inclusion of 'NOTA' option has far reaching consequences. it is a vote expressing disapproval which can be either against leadership, policies or both.On one hand  it will build more pressure on political parties to put up clean and corruption free candidate on the second hand foster greater participation among voters.
These two ruling are welcome step but one has to keep in mind that criminalization of politics is to a large extent a function of massive and continuing socio-economic inequalities and uneven power relation. Bridging these gap through political institutional efforts would play in curbing criminalization.
as far as participation in election is concerned it is linked to a whole lot of factors like complicated registration process, votes apathy, income disparities, increasing spatial mobilization, loss of a day's wages and social turmoil. Reforms in these factor directly or indirectly related with deterioration in quality of politics. once the developmental politics will take place these factors will subsides gradually.

Unbanked Direct Blood Transfusion

The rural health sector is already in shambles with unwilling doctors, inadequate para-medical staff and facilities. As a cherry on the cake we have the ban on UDBT. The amendment to the Cosmetic and Drugs 1945 (Rules) that mandated even blood be collected by authorised and licensed blood banks only. 69% of Indian population is living in rural areas and they are the ones facing the direct impact of this ban. India is the country with one of the highest MMR. we loose so many lives during the child birth due to unavailability of blood. Doctors and staff feel that their hands have been tied and they could do nothing to save them.

Government has put a ban on UDBT due to the fear of spreading HIV and other diseases. They have thus advised the doctors to only use blood from licensed blood bank that has been checked properly. Unlike blood banks UBDT has more chances of spreading diseases like HIV etc as this is the most preferred in rural areas. A proper check of the blood for any infections like HIV, Hepatitis B and other diseases should be check thoroughly and also the medical and para-medical staff should be trained to do their job even more professionally and without any errors. But every solution has its fallacies too. Socio-economic, caste barrier along with infrastructural issues are also some hindrances in this. A solid framework should be put in place for legalising UDBT while simultaneously minimizing illegal practices.

Some of the solution for blood demand can be summarized as below:
1. Use of UDBT after testing in certified institution.

2. Maintenance of minimum stock of blood for all the blood group.

3. Blood donation camp and awareness among the people for blood donation.

4. Encouragement to new bank on the PPP model or private bank with strict surveillance.

5. Use of blood alternatives wherever possible.

Current affairs

1. Short Answer type (100 words)
a. WPI
b CPI
c. KKNP
d. GHI
e. Phallin
d. Bnei Menashe

Que.2- Much awaited  recent SC judgement are on the line of cleansing politics. Justify the statement with special reference of NOTA. (250 words)

Que.3 Discriminatory visa policy of india is hampering confidence building measure between india and china. analyse it (200 words)

Que.4 Judicial accountability bill is the need of hour but with sufficient safeguard to ensure independence of judiciary. highlight the major loopholes in the bills and also compare the same provision prevalent in different countries (250)

Que. 5. what is unbanked directed blood transfusion. why it should be legalized in india and  what safety measure to be followed for performing UDBT? (250 )

Indian Economy Mock Test answers by Gargi Sagar

Q1. 1) Kumarappa committee
Kumarappa committee was appointed after independence to inquire and do a deeper study of agrarian relations of the country at that time. It was an agrarian reforms committee under chairmanship of J C Kumarappa. The committee tabled its report in 1949 which influenced the evolution of agrarian reforms in post independence period. It suggested that the intermediaries between the soil tillers and the state should be abolished and land should belong to the cultivators.
2) Bhoodan and gramdan
Bhoodan was a movement that was launched in Telangana region of AP in 1951 after the peasant uprising. Gramdan was launched in 1957. Under these movements the soil tillers and peasants were to contribute their land to the village associations, after which the land would become the property of village association for equal distribution for joint cultivation. The movement failed as the land acquisition and land distribution was very limited.
3) Tribal land
Land belonging to tribal people is being refered to as tribal land here. All the states have taken certain measures by passing laws to prevent alienation of tribals from their land. Transfer of land from tribal to non tribal has been prohibited. Loopholes in the administrative system was not able to prevent alienation. Existence of moneylenders, poverty, acquisition for irrigation and dams were some of the main reasons responsible for Tribal alienation.
8) Land reforms
Land reforms means improving land tenure and institutions related to agriculture, redistribution of poverty rights for benefit of landless poor and to remove barriers for economic and social development caused by deficiencies in the existing land tenure system.
5) Direct and Indirect tax
Direct taxes are the taxes who burden of tax and liability to pay falls in one person like income tax, corporation tax, wealth tax etc. Indirect taxes are the taxes whose liability to pay is on one person and burden is on another person.

Q2. a) As discussed above under Kumarappa committee the agrarian reforms committee suggested that the intermediaries should be abolished. Along with that the committee also recommended that the leasing of land should be abolished except in certain cases of widow. minors and cultivators with disability. To further strengthen the view point, five year plans implemented the idea stating abolition of intermediaries and a rightful place for tillers in the agrarian system.
But in order to avoid eviction of land tenants landlords used certain primitive measures like defective land records, oral lease etc. To act on these illegal acts by the landlords, state governments enacted certain laws to ensure security of tenure.
The state governments thus enacted the land reforms on the following four patterns :-
1. concealed tenancy continued
2. Banned tenancy without exceptions
3. Reverse tenancy, but tenancy continued
4. did not ban leasing-out but recognised tenants. (Operation Barga in West Bengal)

Indian Economy Mock Test

Q1. Write short note on any 5 of the following. (50 words)
1. Kumarappa committee
2. Bhoodan and Gramdan
3. Tribal land
4. Zamindari and Ryotwari system
5. Direct and indirect tax
6. Article 112
7. Budget
8. Land Reforms
9. Co-operative farming

Q2. a) Discuss the distinct pattern on which tenancy reforms have been undertaken by diffrent states.
Or
Elaborate ceiling on landholding along with objectives, achievements and failure.
b) Why did the scheme of consolidation of landholdings failed?
Or
State reasons for decline in leased-in area in 1961-62 over 1953-54?

Q3. Do you think New Economic Policy and land reforms are contradictory to each other?
Or
Is Budgetary deficit better or fiscal deficit a better evaluator of a country's economic state?

Q4. Elaborate the process of budget.
Or
Discuss the components of budget along with the explaination for each.

Modern India Mock Test Answers by Gargi Sagar

Q1.
a) Annexation of Awadh
Annexation of Awadh in 1856 on pretext of maladministration was a very aggressive move by the Company. It was a big blow on the prestige of the ruling class. One of the major political cause for the Revolt of 1857 which also had many other causes attached to it. Like two-third of the sepoys of the Company were recruited from Awadh and most of them were simply peasants in uniform. It led to disbanding of Nawab's army and affected the entire aristocracy. Thus, the revolt was of highest intensity in Awadh.

b) Doctrine of Lapse
The aggressive annexation policy followed by Lord Dalhousie was widely criticized and resented. by the Doctrine of Lapse the adopted son of the deceased King was not recognised as the hier to the throne, which led to the annexation of large number of kingdoms.
Satara (1848), Nagpur, sambhalpur and Bhagat (1850), Udaipur(1852), Jhansi(1853) to name a few were annexed by the British.

d) Velu Thampi
In 1808-09 Velu Thampi the Dewan of Travancore rose up in rebellion against the British attemptes to remove him from the Dewanship and heavy burden imposed on the state through Subsidiary alliance system. In one of the skirmish Velu Thampi was injured and died in forest. Even though he was dead, he was publicly hanged as an example of the fate of those who rose against the British.

e) Tribal Movements
Tribal movements can be divided into two categories based on the geographical region occupied i.e. Non-frontier and Frontier tribes. Tribal people were engaged in shifting agriculture, hunting, fishing and forest produce as the mainstay of their economic base. Due to the imposition if Land Revenue Settlement, christian missionaries, Forest Act and Indian Forest Act established monopoly over forest land, exploitation by outsiders and many more reasons led Tribal people rise in rebellion against the Britishers and outsiders such as the moneylenders and sahukars.

f) Faqir Movement
Faqirs were wandering muslim religious mendicants. shortly after the annexation of Bengal in 1776-77, Manjum  Shah the leader of the Faqirs, began to levy contributions on the zamindars and peasant, which defied the British Authority. After Manjum Shah, supported by Pathans, Rajputs and Indian disbanded soldiers extended the operation to the northern district of Bengal. Two prominent leaders were Bhawani Pathak and Devi Chaudhrani. The Faqirs were finally brought under control at the beginning of the 19th Century.


Q2. Foreign policy of British towards India's neighbours.

Foreign Policy adopted by British in late 19th century towards India's neighbours was primarily dictated by British interest. The policy which British Government adopted was influenced by the political and administrative motives of reaching out to the natural and geographical frontiers of India. They argues the foreign policy to be essential for internal unity of India and also defence against foreign threats.
The foreign policy of a country may ne of two types. One is the foreign policy of a free country and second is the foreign policy of a country ruled by a foreign country. Foreign policy of a free country is based on the needs and interests of the country and in the other type foreign policy serves the interests of the ruling country.
The British foreign policy was mainly dominated by the motives of protection of British empire and expansion of British commerce and economic interest to Africa and Asia. Both these aims of British Government led to expansion outside the Indian borders. Due to their this motive British were also involved in many wars with the other Imperial European countries who also wanted to extend their influence on the Asian and African land. British thought that there was potential threat from other European countries which led to their increased influence in Afghanistan. This was again for their own motive of keeping Europeans off the borders of India. Indian foreign that was developed by the British was just to serve British imperialist intentions and for their pursuance in the Asian countries.

Q3. Dalhousie was an annexation. He applied Doctrine of Lapse where ever applicable to achieve his aggressive ends. Where the doctrine of lapse was not applicable as in the case of Awadh, he annexed it on the pretext of maladministration. Rulers of Indian states believed that the annexation was not on the pretext of Doctrine of Lapse but on the policy of lapse of morals on the part of East India Company.

Lord Dalhousie bought in harmony the works of his two great predecessors Lord Warren Hastings and Lord Wellesley. He consolidated the scattered territories under the Company's direct rule. He carried the British frontier across Indus and entering into Alliance with Afghanistan and providing protection over Baluchistan. Dalhousie worked immensely in setting up Railways and Telegraph services across India and developing the infrastructure of the country. Dalhousie proved an active moderniser . Dalhousie however had defects of his qualities. He cared little for the moral values and plighted word. While dealing with Punjab, he cared more for the end than for means. He also cared little while dealing with Indian states which angered the aristocracy and the  ruling classes. Dalhousie proved to be ruthless imperialist and he was greatly responsible for creating unrest all around and the Rebellion of 1857. Dalhousie's annexations and es-cheats worsened the situation. He went too far and too fast. His ruthless and injudicious policy provided leaders like Rani Lakshmi Bai of Jhansi, Nana Sahib, Tantia Tope etc who channelised the prevalent discontent and proved the brain behind the movemnt once the soldiers had mutinied. Responsibility of the Rebellion of 1857-58 partly rests on the shoulders of Lord Dalhousie.

Q5. The state of Indian Economy under the imperial rule has a long history. Economic nationalists in 1860s led by Dadabhai Naroji and R. C. Dutt spoke about the apparent lack of growth and development of
Indian Economy in the colonial period. The nationalist school has been the staunchest critics of role of government.

R C Dutt broadly identifies three phases of British exploitation of India.
1. Mercantile phase from 1757 to 1813.
2. 2nd phase coincided with the industrial revolution in England. 1813 - 1858
3. Finance-Imperialism from the later part of the 19th century onward

The true exploitative nature of the colonial  economy started in the first phase after gaining the Diwani of Bengal, Bihar and Orissa. In trade till 1750s bullions flowed into India from Europe which meant that India was profited from the trade. The Import from India was so high that the Parliament in 1700 had to pass an Act which Prohibited the use of articles of Asian skill, printed and dyed calicoes. Protective duty was imposed on Indian cloth entering England was imposed with duties as high as 80%. But throughout this period India Gained due to inflow of Bullions.

In the late 18th century and beginning if the 19th century England was undergoing the Industrial Revolution. Machines were replacing the human labour in production. Machines made possible production of goods in large scale. England now needed an oulet to sell these goods and raw material to feed its growing industries.

EICo by several means was able to change the balance of payment in their favour. Under the conditions of the farman granted by the Emperor Farrukhsiyar in 1717, a Dastak approving free trade for individual servants of company was signed. This was one of the bone of contention between the English and Siraj-ud-daula and reasons for the Battle of Plassey in 1757. Defeat of Siraj gave the British the freedom to expolit Indian sources and acted as a steppping stone in Indian Politics. By 1764 after Battle of Buxar and /treaty of Allahbad EICo got diwani rights of Bengal, Bihar and Orissa. This meant that the Company gained the rights to collect the revenues. This marked the beginning of the reversal of terms of trade.

From this The Drain Of Wealth theory was propounded. The main gist of the Drain of Wealth theory was tht the national income or total annual product was exported to England for which Indians got no adequate economic or material gain. The salaries and pensions of British civil and military officials working in India and interest on loans taken by Indian Government was being drained. Unequal terms of trade prevailed where a heavy duty was imposed on Indian goods entering England and English good faced no such duty and there existed free trade policy in India. The agriculture and the handicraft sectors of Indian Economy were worst hit by the British expansionist policy. Dadabhai Naroji also called this "an British rule".

Modern Indian History Mock Test

Please be noted that the answers needs to be published by eod i.e 5pm. Also mention your name either on the top of your post or the bottom.

Ques1. Write short note on any 5 of the following
a) Annexation of Awadh
b) Doctrine of Lapse
c) V. D. Sarvarkar
d) Velu Thampi
e) Tribal movements
f) faqir uprising
g) Moplah rebellion
h) policy of protection

Ques2. Briefly explain British policy towards Afghanistanand the developments leading to the annexation of burma and Nepal war. Word limit 150 words.
                                       Or
What were the basic objectives of the British Government's policy towards India's neighbours in 19th century?

Ques3. Describe the restrictions imposed on the press by the British government in 19th century.
                                  Or
Assess the responsibility of Dalhousie in hastening the events of 1857.

Ques4. & ques5 long answer type

Ques4. Discuss the causes and failures of revolt of 1857.
                                      Or
Write a brief note on the socio-cultural awakening in 19th century and the measures taken to improve Indian society.

Ques5. Discuss and critically analyse the economic impact of British rule.

Revenue Components Of Government of India

Constitution and Budget

Different Stages of Budget

Budgetary Process

Fiscal and Revenue Deficit

What is fiscal deficit? 
The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

Generally fiscal deficit takes place due to either revenue deficit or a major hike in capital expenditure. Capital expenditure is incurred to create long-term assets such as factories, buildings and other development. A deficit is usually financed through borrowing from either the central bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.

What is the difference between fiscal deficit and primary deficit? 

Primary deficit is one of the parts of fiscal deficit. While fiscal deficit is the difference between total revenue and expenditure, primary deficit can be arrived by deducting interest payment from fiscal deficit. Interest payment is the payment that a government makes on its borrowings to the creditors.

What are the views of different experts on fiscal deficit? 

Economists differ widely on their views on fiscal deficit. According to John Maynard Keynes, a deficit prevents an economy from falling into recession, while another school of thought is that a country should not have fiscal deficit.

Many economists think that if the deficit is financed by raising debt from the central bank it may lead to an inflationary scenario. Higher fiscal deficit is one of the reasons for the Indian economy to have relatively higher inflation.

What is revenue deficit? 
A mismatch in the expected revenue and expenditure can result in revenue deficit. Revenue deficit arises when the government's actual net receipts is lower than the projected receipts. On the contrary, if the actual receipts are higher than expected one, it is termed as revenue surplus. A revenue deficit does not mean actual loss of revenue.

Let's take an hypothetical example, if a country expects a revenue receipt of Rs 100 and expenditure worth Rs 75, it can result in net revenue of Rs 25. But the actual revenue of Rs 90 is realised and an expenditure is Rs 70. This translates into net revenue of Rs 20, which is Rs 5 lesser than the budgeted net revenue and called as revenue deficit.

What is the current scenario in India? 

To revive the economy, the government has announced several stimulus packages. This has led to a hike in the fiscal deficit. The interim budget has also proposed an expenditure of Rs 953,231 crore. The Reserve Bank of India recently said that the fiscal deficit might touch 5.9% against earlier estimates of 2.5%.

This turns into a deficit of Rs 3,54,731crore from an initial expectation of Rs 1,50,310 crore. The government is expected to lose Rs 36,074 crore due to a cut in taxes. 

What is CRR, Reverse Repo Rate and Repo Rate?

What is CRR?

Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.

Scheduled banks are required to maintain with the RBI an average cash balance, the amount of which shall not be less than 4% of the total of the Net Demand and Time Liabilities (NDTL), on a fortnightly basis.

What is Reverse Repo rate?

Reverse Repo rate is the rate at which the RBI borrows money from commercial banks. Banks are always happy to lend money to the RBI since their money are in safe hands with a good interest.

An increase in reverse repo rate can prompt banks to park more funds with the RBI to earn higher returns on idle cash. It is also a tool which can be used by the RBI to drain excess money out of the banking system.

What is a Repo Rate?

The rate at which the RBI lends money to commercial banks is called repo rate. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI.

A reduction in the repo rate helps banks get money at a cheaper rate and vice versa. The repo rate in India is similar to the discount rate in the US.

Western Ghats Ecology Expert Panel (WGEEP)

The Supreme Court dismissed the Kerala government appeal which challenged the jurisdiction of National Green Tribunal (NGT) which directed the Kerala government to stick to the report of the Western Ghats Ecology Expert Panel (WGEEP), headed by Madhav Gadgil,while granting environmental clearance. While the State wants both sustainable development and environment protection to go hand in hand the apex court and the NGT intends to provide protection to the Western Ghats as suggested in Gadgil committee report and wants the Kerala government to adhere to it, the State is of the view that the tribunal’s direction would hinder the development process in the State and therefore sought quashing of the order and an interim stay of its operation.

What were the highlights of WGEEP panel report?

In view of the environmental sensitivity and ecological significance of the Western Ghats region and the complex interstate nature of itsgeography, as well as possible impacts of climate change on this region, the Ministry of Environment & Forests Government of India constituted in 2010, a Western Ghats Ecology Expert Panel (WGEEP) headed by Madhav Gadgil from IISC Bangalore.

The Panel was asked to perform the following functions:

To assess the current status of ecology of the Western Ghats region.
To demarcate areas within the Western Ghats Region which need to be notified as ecologically sensitive and to recommend for notification of such areas as ecologically sensitive zones under the Environment (Protection) Act, 1986.
In doing so, the Panel shall review the existing reports such as the Mohan Ram Committee Report, Hon’ble Supreme Court’s decisions, recommendations of the National Board for Wildlife and consult all concerned State Governments.
To make recommendations for the conservation, protection and rejuvenation of the Western Ghats Region.
To suggest measures for effective implementation for declaring specific areas in the Western Ghats Region as eco-sensitive zones under the Environment (Protection) Act, 1986.
Major Recommendations of WGEEP panel report:
Develop and conserve thoughtfully: Development plans should not be cast in a rigid framework, but ought to be tailored to prevalent locality and time specific conditions with full participation of local communities; a process that has been termed adaptive co-management.
Ecologically Sensitive Zones: Following the Pranob Sen committee’s criteria, WGEEP proposes that the entire Western Ghats region be declared as an Ecologically Sensitive Area (ESA). Within this Western Ghats ESA, WGEEP proposes to assign different regions, other than those covered by Wildlife Sanctuaries or National Parks to one of the following three zones; Ecologically Sensitive Zone 1 (ESZ1), Ecologically Sensitive Zone 2 (ESZ2), and Ecologically Sensitive Zone 3 (ESZ3).
Community Participation: Ecological sensitivity is not merely a scientific, but very much a human concern. In particular, a great deal of locality specific understanding of what has been happening and what is desirable, is simply not part of any scientific databases and resides with local communities. Hence, set of regulations tailored to the needs of the locality should be put in place if the area were to be formally declared as being ecologically sensitive
ESZ assignment: The 2,200 odd grids spanning the entire Western Ghats be assigned to (1) Protected Areas, namely, Wild Life Sanctuaries and National Parks, and (2) ESZ1 (3) ESZ2 and (4) ESZ3 on the basis of composite scores of ecological significance derived from the database generated by WGEEP. treat Western Ghats regions of each state separately, Assigning ESZ1, ESZ2 and ESZ3 status only to grids outside existing Protected Area
Grass-roots involvement: It is inappropriate to depend exclusively on Government machinery for constitution and management of ESZs. Instead, WGEEP suggests that the final demarcation of the Zones (including those surrounding PAs, as also in context of the UNESCO Heritage Site proposal), and fine tuning of regulatory, as well as promotional regime, must be based on extensive inputs from local communities and local bodies, namely, Gram Panchayats, Taluk Panchayats, Zill Parishats, and Nagar Palikas, under the overall supervision of the Western Ghats Ecology Authority (WGEA), State level Ecology Authorities and the District Ecology Committees.
Western Ghats Ecology Authority: WGEA should be a statutory authority appointed by the Ministry of Environment and Forest, GOI under Environment (Protection) Act 1986 to focus on promoting transparency, openness and participation in every way for development and sustainability of these areas.
On Mining and other issues: An indefinite moratorium on new environmental clearances for mining in Ecologically Sensitive Zones 1 and 2, phasing out of mining from ESZ1 by 2015, Continuation of existing mining in Ecologically Sensitive Zone 2 under strict regulation with an effective system of social audit, No new red and orange category industries, which would include coal based power plants, should be permitted to be established in Ecologically Sensitive Zones 1 and 2.

39 Serial sites of Western Ghats in recently updated World Heritage Sites list

The Western Ghats (Sahayadri in Hindi) is recognised as one of the world’s eight “hottest hotspots” of biological diversity. The list declared in 2012 by the United Nations contains total 39 sites where Kerala leads with 20 sites being inscribed in the heritage list followed by Karnatakawith ten, Tamil Nadu five and Maharashtra four.

The list includes the individual sites listed in the following table.
State Sites
Maharashtra

1. Kaas Plateau
2. Koyna Wildlife Sanctury
3. Chandoli National Park
4. Rathnagiri National Park

Kerala-Tamil Nadu

1. Kalakad- Tiger Reserve
2. Shendurney Wildlife Sanctuary
3. Neyyar Wildlife Sanctuary
4. Peppara Wildlife Sanctuary
5. Kulathupuzha Range
6. Palode Range
7. Periyar Tiger Reserve
8. Ranni Forest Division
9. Konni Forest Division
10. Achankovil Forest Division
11. Srivilliputtur Wildlife
12. Tirunelveli North Forest Division
13. Eravikulam National Park   Â
14. Grass Hills National Park
15. Karian Shola National Park
16. Parambikulam Wildlife Sanctury
17. Mankulam Range,
18. Chinnar Wildlife Sanctuary
19. Mannavan Shola
20. Silent Valley National Park
21. New Amarambalam Reserve Forest
22. Mukurti National Park
23. Kalikavu Range
24. Attapadi Reserved Forest
25. Pushpagiri Wildlife Sanctuary

Karnataka

1. Brahmagiri Wildlife Sanctuary
2. Talacauvery Wildlife Sanctuary
3. Padinalknad Reserved Forest
4. Kerti Reserved Forest
5. Aralam Wildlife Sanctuary   Â
6. Kudremukh National Park
7. Someshwara Wildlife Sanctuary
8. Someshwara Reserved Forest
9. Agumbe Reserved Forest
10. Balahalli Reserved Forest

Later the government appointed a High-Level Working Group led by K. Kasturirangan to study the report and provide suggestions.
K. Kasturirangan-led 10-member panel High-Level Working Group (HLWG) Presented its report on Western Ghats to MoEF (Ministry ofEnvironment and Forests)
K. Kasturirangan-led 10-member panel High-Level Working Group (HLWG) prepared a report on Western Ghats which suggests for ban on development activities in 60,000 sq km ecologically sensitive area spread over Gujarat, Karnataka, Maharashtra, Goa, Kerala and Tamil Nadu.
Objective: K.Kasturirangan panel was formed to study and advise Govt on the earlier report of ecologist Madhav Gadgil-led Western Ghats Ecology Expert Panel (WGEEP).

Some Facts:
Around 37% of the total area defined as the boundary of the Western Ghats is ecologically sensitive.
This area is of about 60,000 sq km and it spreads over the states of Goa, Gujarat, Karnataka, Kerala, Maharashtra and Tamil Nadu.

What were the key suggestions made by the K. Kasturirangan led HLWG?

K.Kasturirangan panel has moved away from the suggestions of the Gadgil panel.
The HLWG has suggested a prohibitive regimen on those activities which have the most interference and harmful impact on the environment.
The report notes, “environmentally sound development cannot preclude livelihood and economic options for this region, the answer (to the question of how to manage and conserve the Ghats) will not lie in removing these economic options, but in providing better incentives to move them towards greener and more sustainable practices”.
Promotion of Ecotourism along the ecologically-volatile Western Ghats to preserve the depleting natural         wealth of the area
Economically empower the local population
Incentivize green growth in the Western Ghats i.e. supervising forests and bettering their productivity to ascertain inclusive growth and economical gains for local communities; integrating forest accounts into state and national economic assessments; initiating an ecosystem service fund to help villages around the forests; promoting sustainable agriculture and; encouraging ecotourism for local benefits.

Establish a Decision Support and Monitoring Centre for Geospatial Analysis and Policy Support in the Western Ghats, which will supervise changes and propose state government on policy reform and all such reports must be in the public domain.

High-resolution map, delimiting ecologically sensitive areas, down to each village settlement, must be put in the public domain so that people can be involved in taking decisions about environment.
The HLWG report draws upon the basic framework suggested by WGEEP to use remote sensing technologies to demarcate the ecologically sensitive areas of the Western Ghats but with two key differences:-
First: it used satellite data, down to 24 m resolution, as against 9 km used by WGEEP.
This finer resolution was possible because of the collaboration with NRSC/ISRO, which used datasets to distinguish vegetation types over the landscape of the entire Western Ghats.
Second: it distinguishes between the cultural and the natural landscape of the region.
Using remote sensing technology, it has found that the cultural landscape – which includes human settlements, agricultural fields and plantations – covers 58.44% of the region.
The natural landscape ranges over the remaining 41.56 %.
Thus, HLWG moved away from the suggestions of the Expert Panel, which had recommended a blanket approach consisting of guidelines for sector-wise activities, which would be permitted in the ecologically sensitive zones.

What were the key suggestions made by the Madhav Gadgil led WGEEP earlier?

Earlier, the WGEEP had suggested that:
Entire Western Ghats be declared as an ecologically sensitive area.
3 levels of categorization for the regulatory measures for protection would be imposed.
Establishment of the Western Ghats Ecology Authority for management of the Ghats.
A blanket approach comprising of road map for sector-wise activities, which could be permitted in the ecologically sensitive zones.

WGEEP Report Summary

Efficient Market Hypothesis

American Economist Eugene Fama won the Nobel prize for economics for developing new methods to study trends in asset markets. He is one of the three American Economists who won Nobel Prize for Economic Sciences. He shared Nobel for Economic Sciences jointly with Robert Shiller and Lars Peter Hansen.

Eugene Francis “Gene” Fama is known for his work on portfolio theory and asset pricing. Fama is regarded as the father of the “Efficient Market Hypothesis”. In 1970 issue of the Journal of Finance, entitled “Efficient Capital Markets: A Review of Theory and Empirical Work,” Fama gave the concept of EMH (Efficient Market Hypothesis).

What is EMH (Efficient Market Hypothesis)?

It is a hypothesis, which says that no person can perform better than the Market itself without taking more risk than the market, because every information is built in the market itself. In simple words we can say: Financial markets are “informationally efficient” i.e. that price of an asset reflects all information about an asset. Thus, it is virtually impossible to regularly predict asset prices and “beat the market” i.e. generate returns that are higher than overall market on average without incurring more risk than the market.

As per this hypothesis, stocks on a stock exchange always trade at fair market value, thus it is impossible for any investor to purchase an undervalued stocks or sell a stock for inflated prices. The only means by which an investor can obtain higher returns is via purchasing taking more risk.

Reading the market is impossible because the stocks are already accurately priced and reflect all available information. Therefore it is impossible to make profit with any trading strategy. Theoretically impossible to make profit from any trading strategy. Thus, there is no way to identify a bargain stock or use past stock price movements to predict future prices. The only way to earn higher returns than those of an index is by purchasing higher risk investments.

So if Ramesh wants to buy a share of Infosys at Rs 3,000 per share he will not be able to make any profit because as per the EMH the intrinsic value of a share of Infosys is Rs 3,000 per share, so Ramesh will not be able to profit from a potential under-valued or over-priced share of Infosys.

3 forms of Efficiencies as per EMH (Efficient Market Hypothesis):-

1) Weak Form Efficiency

2) Semi-Strong Form Efficiency

3) Strong Form Efficiency

In weak-form efficiency, it is said that one can’t predict future prices by analyzing prices from past i.e. historical data. Thus, one cannot earn excess return for long time by his/her strategy based on historical share prices.

In semi-strong-form efficiency, it is said that a share’s price adjust itself to all publicly available new information, thus one cannot earn one cannot earn excess return for long time by his/her strategy based on publicly available information.

In strong-form efficiency, it is said that a share’s price reflects all information, public and private, and no one can earn excess returns for long time by his/her strategy based on all publicly available information and historical data.

What do the critics say about Efficient Market Hypothesis (EMH)?

EMH is highly controversial and often disputed.

There are several reasons why EMH may be incorrect:-

1. All investors come to know of information differently and will thus have different valuations of the stock.

2. Stocks take time to respond to new information, investors who receive or act on this information first can take advantage of it

3. Stock prices can be affected by human error and emotional decision making.

4. Investors like Warren Buffet have proven that they can profit from market consistently over long periods of time

5. If EMH is true, then investors should place all their assets in index funds and thus they will earn same returns as overall market and focus on minimizing their risk.

Mixed Economy and Planning

Mixed Economy is the outcome of the compromise between the two diametrically opposite school of thoughts - the one which champions the cause of capitalisation and the other which strongly pleads for the socialisation of all other means of production and control of entire economy by the state. Mixed economy had the salient features if capitalism and socialism very clearly and cleverly incorporated.

Mixed economy is necessarily a planned economy. the public sector will have to be operated according to certain priorities and to achieve certain specified social and economic goals. The Govt. will have to prepare an integrated economic plan in which private will also have well defined role.

The success of planning in a mixed economy depends upon the following factors:

1) to what extent is the public sector able to pursue the socially determined goals?

2) to what extent is the state able to guide the private sector to follow the socially determined goals?

3) to what extent is the state able to check the distortions in investment decisions arising out of private sector interests going against overall objectives of the economy?

Poverty and misery a neglected section of Indian Planning.

A very small group of people in India have never experienced poverty and misery. These are rich landlords in the countryside, Government top officials, industrialists, bankers, etc. The vast majority of people in India are poor because their income is low. Existence of extreme inequalities of income and wealth is due to the age old social formations and necessarily, the reduction in the equality is possible through abolishing the semifuedal relations of production in our villages. Another aspect of inequality in income is the large disparities between rural and urban incomes which are bound to be accentuated over years due to industrialisation and economic growth.

Even though reduction in poverty n misery have always been talked about in our plans, in terms of priority this topic got a low position. This could be so because Nehru the architect of Indian Planning, did not believe that the problem of economic inequality could be solved merely by redistribution. They believed in establishing heavy industries that would inturn improve the standard of living, strengthen the infrastructure, create employment. A growth in the national income and per capita income would reduce the miseries was assumed. However no such attention was given development of socialistic society. (4th FYP)

Questions of the day!!

Q.1 Discuss the planning strategies of USSR, China, France.

Q.2 Process of planning. Explain.

Q.3 Discuss planning in mixed economies.

World Economies

Independent Economic thinking is nurtured by the Nehruvian Economics.

For Jawahar Lal Nehru, the first Prime Minister if India,m the development if heavy industry was synonymous with industrialization. He stated that the primary importance was to industrialize and to have heavy industry. Nehru was forthright in stating that industrialization meant development of heavy industry.

Thus the core of the strategy adopted by the Indian Planners was rapid industrialization through lumpy investment on heavy, basic and machine building industry. The planners justified their strategy in the following points.

1) Planners felt that diversification of the use of resources would be in the interest of the country from the point of view of production, employment and defence.

2) Heavy pressure was felt on land due to population pressure and productivity of labour was quiet low. One method of reducing the pressure was to set up industrial sector.

3) Rapid industrialization was an essential condition for the development of not only agriculture but also for other sectors too. Like, increase in the production and supply of fertilizers, pesticides, agricultural machinery etc. would inturn help agricultural sector. Expansion of markets would expand trade and commerce, transportation, banking, finance, etc.

The strategy of planning was essentially to achieve the objective of self sustained long term growth via investment in heavy sector.
Nehruvian model of development emerged as the driving force of the development. The model was based on long-run development strategy which accorded greater preference to the long term goals of development rather than succumbing to the immediate and short term goals:

1) a higher rate of saving so as to boost investment to a higher level.

2) it prefered a heavy industry bias to develop the industrial base of the economy.

3) It opted the perfectionist path so as to safegaurd infant industry.

4) It encouraged import-subsitution so as to achieve self-reliance.

5) It aimed at enlargement of opportunity for the less privileged sections of the society.
(growth with social justice)

However, model met with failures too. Massive investments were made in public sector enterprises, no serious efforts were made to run them on commercial lines. Serious mistakes were committed in administration. Top positions were given to general administrators rather than expert professionals. Thus bureaucracy of the country took charge of PSUs and acted in collusion with political bosses as their fiefs. Another major mistake was the failure to develop work-ethics among the employees. As a result, huge wage bill without commensurate increase in productivity. To satisfy certain lobbies - big farmers, urban consumers etc, irrigation, electricity and fertilizers charges were kept below costs and huge subsidies were paid as  a result huge losses were incurred.

Nehruvian model exhibited other weakness too. It failed to provide a national minimum level of living despite five plans. Nearly 40% of the population lived below poverty line. the number of unemployed and under-emplyed was high and continuously increasing. Inequality of income and wealth had worsened. Land reforms were not properly implemented,, resulting in much dissatisfaction.

Q.1 Independent economic thinking is nurtured by the Nehruvian Economics. Critically analyse.

Ans. Development of various economic ideologies for independent India started before independence however it takes it's shape after independence. After 1930 two ideologies Gandhian and Nehruvain contributed in the evolution of economic policy of India.Gandhian model supported free market concept with limited state interference and Nehruvian model gave emphasis to socialistic concept with limited state control.After independence, India needed an economic policy which would have two function; to ensure economic development and upliftment of poor people. Nehru as a PM started to follow two way approach, of state control on social sector and government help to industrial sector, to realize both goals by implementing Nehruvian model of development. Implementation of Five Year Plan and land distribution policy represented the impact of socialistic economy on Nehruvian Model. In first five year plan Nehru announced the industry sector as prime motive force of economy for economic development of country while taking control of social sector in government hand, he ensured social security to poor and marginalized people.

Nehruvian model was according to the need of people and the country at the time of independence but with some faulty approach which in long term hampered the very idea of economic development of India as well as socio-economic development of people. every country in the world moved from agrarian economy to industrial economy but Nehru's decision of making industrial sector prime motive force undermined the agriculture sector which was inefficient to fed huge population and resulted in the economic burden on the country.in long term it causes diversion of resources to met food security rather than making agriculture more productive and self sustainable. which after some time would have helped in development of industrial sector.

Questions of the day!!

Q.1 Independent economic thinking is nurtured by the Nehruvian Economics. Critically analise.

Q.2 Indian planners aimed at increasing NI and per capita incomes on the assumption tht the continuous increase in these incomes would reduce and eventually remove poverty and misery. Comment.

Economic Planning

Economic planning, which as a concept emerged as a socialistic idea, is now considered an important aspect of all national economies with varying political and ideological persuasions and at different stages of socio-economic development. There are as many types and forms of economic planning as the number of countries, because each country formulates a plan according to its political and economic environments and goals of the national economy. In a general sense, the term economic planning can be defined as formulation of control and regulation of economic activity by public agency with a view to achieving well-defined objective(s). Since the key questions implicit in this definition such as formulation of economic policies, regulation and control of economic activity and goals and objectives of the national economy, are closely related to the political structure of a society, the techniques and patterns of economic planning thus become intricately woven with its political system.