ECONOMICS- CBSE - XII Solutions CLASS XII for CBSE-XII - INDIAN ECONOMY (1950-1990) - SHORT Q & ANS & CASE STUDY

Logical and Analytical Questions and Answers on Indian Economics 

1. Why did India choose a mixed economic system?

 ANS.   Leaders wanted to combine the best features of capitalism and socialism.

           Private ownership was necessary in a democracy, but a strong public sector was needed to ensure social welfare and equity.

2.   What is economic planning, and why was it essential for India?

 ANS.   Economic planning involves deliberate decision-making to achieve specific economic objectives.

It was essential to revive India's backward and stagnant economy post-British rule.

3. What does 'Modernisation' mean in the context of Indian planning?

 ANS.   Modernisation involved adopting new technologies and changing social outlooks (e.g., gender empowerment).

It aimed to improve productivity and transform the economy from feudal to modern.

4.  Why was self-reliance a key goal for India?

 ANS.   To reduce dependence on foreign assistance for economic growth. To avoid foreign interference in national policies.

5.  What were the risks involved in the Green Revolution?

 ANS.   Risk of pest attacks on HYV crops. Increased income inequality between small and large farmers.

6. Why was the public sector given a leading role in industrial development?

 ANS.   Lack of capital and incentives for private sector investment. Achieving social welfare objectives.

7. What is 'Import Substitution,' and why was it adopted?

 ANS.   Import substitution refers to replacing imports with domestic production. It was adopted to save foreign exchange and achieve self-reliance.

8. What led to the initiation of the New Economic Policy (NEP) in 1991?

 Ans.    The need to reform inward-looking trade policies and improve efficiency in the global economic scenario.

Case Study 1: 

9. .A nation decides to produce more luxury cars instead of essential medicines due to high demand among affluent individuals. Which central problem is this related to?

 Answer: This is related to "What to produce", as the decision concerns the allocation of resources for specific goods.

10. After independence, India decided to adopt features from both socialism and capitalism. Why was complete socialism avoided?

 Answer: Complete socialism was avoided because private ownership and democracy were essential in India, unlike in the Soviet Union.

11. To reduce foreign dependency, India emphasized domestic production of essential goods. What goal does this align with?

 Answer: This aligns with the goal of Self-reliance

 12. India replaced imported vehicles with domestically manufactured ones. What was the objective of this policy?

 Answer: The objective was to achieve self-reliance and save foreign exchange.

13. What were the main objectives of the Industrial Policy Resolution of 1956, and how did it shape India's industrial landscape?

 Answer:   The resolution aimed to establish a socialist pattern of society by emphasizing the public sector's role in commanding heights of the economy. It classified industries into three categories: public sector, private sector, and mixed sector. It led to the establishment of PSUs but also created inefficiencies due to lack of competition.

14. Why were 14 major banks nationalized in 1969, and what were its outcomes for the Indian economy?

 Answer:  Banks were nationalized to ensure better credit flow to agriculture and small industries, reduce regional inequalities, and curb private monopolies. It improved rural credit access and expanded banking networks but led to operational inefficiencies and political interference.

15 . What role did the Agricultural Price Policy play in stabilizing the Indian economy during this period?

 Answer: The policy introduced Minimum Support Prices (MSPs) to protect farmers from price fluctuations and incentivize production. It ensured food security but also created fiscal stress due to high procurement costs.

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ECONOMICS- CBSE - XII Class CLASS XII Pdf