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IAS Exam: Prelims Economy NCERT Questions – INDIAN ECONOMY 1950-1990 Set II

Jan 21, 2016 18:07 IST

    NCERT Books are dispensable for the IAS Preparation. IAS Exam requires the good understanding of the NCERT Books. Economy is one of the most asked subjects on the IAS Prelims Exam. Here we present NCERT Based Questions for the IAS Prelims Exam.

    Q1. With reference to situation of small farmers, consider the below statements:

    1. The risk of the small farmers being ruined when pests attack their crops came true in most of the cases.
    2. Since the small farmers could not obtain the required inputs, the output on small farms depleted corresponding to the output on large farms in the course of time.
    3. The inaction on part of the government in this regard led to only rich farmers reaping the benefits of the green revolution.

    Select the correct statements using the codes given below:
    a) 2 and 3 only
    b) 1 and 3 only
    c) 1, 2 and 3
    d) None of the above

    Answer. d)

    Explanation: The risk of the small farmers being ruined when pests attack their crops was considerably reduced by the services rendered by research institutes established by the government. Since the small farmers could obtain the required inputs, the output on small farms equaled the output on large farms in the course of time. The government provided loans at a low interest rate to small farmers and subsidized fertilizers so that small farmers could also have access to the needed inputs.

    Q2. Assertion: Any new technology is taken up speedily by farmers.

    Reason: Subsidies were, therefore, needed for farmers to test the new technology.

    Select the correct answer using the codes given below:
    a) Both the statements are individually correct and the given ‘Reason’ is correct for the first statement.
    b) The first statement is incorrect and the given ‘Reason’ is correct by itself alone.
    c) The first statement is correct and the given ‘Reason’ is incorrect for the first statement.
    d) Both the statements are incorrect.

    Answer. b)

    Explanation: Subsidies were needed because any new technology will be looked upon as being risky by farmers. Subsidies were, therefore, needed to encourage farmers to test the new technology

    Q3. Who among the following benefits from subsidies?

    1. The fertilizer industry
    2. The farmers in the more prosperous regions
    3. The government
    4. Farmers using the new HYV technology

    Select the correct answer using the codes given below
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1, 2 and 4 only
    d) 1, 2, 3 and 4

    Answer. c)

    Explanation: The government does not benefit from the subsidies. It bears a huge burden on finances for giving subsidies.

    Q4. Consider the below statements related to Indian agriculture:

    1. By the late 1960s, Indian agricultural productivity had increased sufficiently to enable the country to be self-sufficient in food grains.
    2. Some 85 per cent of the country’s population continued to be employed in agriculture even as late as 1990.

    Which of the above statements is/are correct?
    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    Answer. a)

    Explanation:
    This question was to be tackled by elimination technique. The population employed in agriculture was not more than 65% in 1990s.

    Q5. Which of the following were the reasons that made the state to play an extensive role in promoting the industrial sector at the time of independence?
    1. Indian industrialists did not have the capital to undertake investment in industrial ventures required for the development of our economy.
    2. Although, the market was big enough to for industrialists to undertake major projects.

    Which of the above statements is/are correct?
    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    Answer. a)

    Explanation: The market was not big enough to encourage industrialists to undertake major projects even if they had the capital to do so. It is principally for these reasons that the state had to play an extensive role in promoting the industrial sector.

    Q6. Which of the following are correct with reference to the Second Five Year plan?

    1. Its chief architect was M.N. Roy.
    2. The plan tried to build the basis to develop the Indian economy on socialist lines and led to the policy of the state controlling the commanding heights of the economy.

    Which of the above statements is/are correct?
    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    Answer. b)

    Explanation: The chief architect of the second plan was Prasanta Chandra Mahalanobis. He founded the Indian Statistical Institute, and contributed to the design of large-scale sample surveys.

    Q7. Consider the following with respect to the system of licenses which came up after the Industrial Policy Resolution 1956.

    1. No new industry was allowed unless a license was obtained from the government.
    2. It was easier to obtain a license if the industrial unit was established in an economically backward area.
    3. Units established in an economically backward area could not avail concessions such as tax benefits and electricity at a lower tariff, which were available to their urban counterparts.
    4. An existing industry needed to obtain a license for expanding output or for diversifying production.

    Select the correct answer using the codes given below
    a) 1 and 2 only
    b) 2, 3 and 4 only
    c) 1, 2 and 4 only
    d) 1, 2 and 3 only

    Answer. c)

    Explanation: Units established in an economically backward area were given certain concessions such as tax benefits and electricity at a lower tariff. The purpose of this policy was to promote regional equality.

    Q8. In 1955, the Village and Small-Scale Industries Committee, noted the possibility of using Small-Scale Industries (SSI) for promoting rural development. Consider the following statements with regard to SSIs:

    1. They use more labour than the large-scale industries and, therefore, generate more employment.
    2. The production of a number of products was reserved for the large-scale industries; the criterion of reservation being their capacity to manufacture the goods at a faster pace.
    3. The large-scale industries were also given concessions such as lower excise duty and bank loans at lower interest rates which made the SSI uncompetitive.

    Select the incorrect statements using the codes given below:
    a) 2 and 3 only
    b) 3 only
    c) 1 and 2 only
    d) None of the above

    Answer. a)

    Explanation: The production of a number of products was reserved for the small-scale industry; the criterion of reservation being the ability of these units to manufacture the goods. They were also given concessions such as lower excise duty and bank loans at lower interest rates.

    Q9. Consider the below statements regarding ‘Import substitution’:

    1. Replacing or substituting exports with domestic production.
    2. It is commonly called an outward looking trade strategy.
    Which of the above statements is/are correct?
    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    Answer. d)

    Explanation: Replacing or substituting imports with domestic production. It is commonly called an inward looking trade strategy.

    Q10. Consider the below statements with reference to the Green Revolution.

    Statement: A good proportion of the rice and wheat produced during the green revolution period (available as marketed surplus) was sold by the farmers in the market.
    Reason: The price of food grains increased relative to other items of consumption.

    Select the correct alternate:
    a) Both the statements are individually correct and the given ‘Reason’ is correct for the first statement.
    b) The first statement is incorrect and the given ‘Reason’ is correct for the first statement.
    c) The first statement is correct and the given ‘Reason’ is incorrect for the first statement.
    d) Both the statements are individually incorrect.

    Answer. c)

    Explanation: The question is explicitly with reference to the green revolution. The price of food grains reduced relative to other items of consumption.

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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