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IAS Prelims Exam 2016: GS Economy Questions: Economic Planning in India

Jun 6, 2016 12:32 IST

    From UPSC IAS Examination point of view, the Questions based on Indian Economy are very important. The UPSC IAS Exam aspirants must be aware of the every perspective of Indian Economy either it is historical perspective or current perspective.

    For the Civil Services aspirants, here, we have developed Multiple Choice Questions for the UPSC IAS Prelims Exam based on Ramesh Singh’s Indian Economy book, one of the most important books available for UPSC IAS Exam.

    1.    Consider the following statements regarding the beginning of idea of planning in India:
    I.    By the decade of 1930s, the idea of planning had already entered the domain of intellectual and political discussion in India.
    II.    Many fresh proposals suggesting immediacy of planning in India were put forward though the erstwhile British Government remained almost immune to them.
    III.    The humble proposals of planning began to serve purpose before independence of India.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: b

    Explanation:

    By the decade of 1930s, the idea of planning had already entered the domain of intellectual and political discussion in India. Many fresh proposals suggesting immediacy of planning in India were put forward though the erstwhile British Government remained almost immune to them.
    But these humble proposals of planning served their purpose once independent India decided to adopt a planned economic pattern for India.

    2.    Who among the following has the credit of proposing the first blueprint of Indian planning?
    a.    M. Visvesvaraya
    b.    N.R. Sarkar
    c.    Dadabhai Naroji
    d.    Mhatma Gandhi

    Answer: a

    Explanation:

    The credit of proposing the first blueprint of Indian planning is given to the popular civil engineer and the ex-Diwan of Mysore state M. Visvesvaraya—in his book The Planned Economy of India, published in 1934.

    3.    Consider the following statements regarding the Visvesvaraya Plan:
    I.    According to the Visvesvaraya’s ideas of state planning were an exercise in democratic capitalism (similar to the USA).
    II.    In his idea of state planning, the greater emphasis was on industrialisation—a shift of labour from the agrarian set up to the industries targeting to double national income in one decade.
    III.    There was no follow up by the British Government on this plan; it aroused an urge for national planning among the educated citizens of the country.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: d

    Explanation:

    Visvesvaraya’s ideas of state planning were an exercise in democratic capitalism (similar to the USA) with emphasis on industrialisation—a shift of labour from the agrarian set up to the industries targeting to double national income in one decade. Though there was no follow up by the British Government on this plan, it aroused an urge for national planning among the educated citizens of the country.

    4.    Consider the following statements regarding the FICCI’s Proposal for Planning in India:
    I.    In 1934, a serious need of national planning was recommended by the Federation of Indian Chambers of Commerce and Industry (FICCI), the leading organisation of Indian capitalists.
    II.    Its President N.R. Sarkar proclaimed that the days of undiluted laissez-faire were gone forever and for a backward country like India, a comprehensive plan for economic development covering the whole gamut of economic activities was a necessity.
    III.    Voicing the view of the leadership of the capitalist class N.R. Sarkar further called for a high powered ‘National Planning Commission’ to coordinate the whole process of planning in India.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: d

    Explanation:

    In 1934, a serious need of national planning was recommended by the Federation of Indian Chambers of Commerce and Industry (FICCI), the leading organisation of Indian capitalists.

    Its President N.R. Sarkar proclaimed that the days of undiluted laissez-faire were gone forever and for a backward country like India, a comprehensive plan for economic development covering the whole gamut of economic activities was a necessity.

    Voicing the view of the leadership of the capitalist class he further called for a high powered ‘National Planning Commission’ to coordinate the whole process of planning so that the country could make a structural break with the past and achieve its full growth potential.

    5.    Consider the following statements regarding the National Planning Committee (NPC):
    I.    On the initiative of the INC president Subhash C. Bose that the National Planning Committee (NPC) was set up in October 1938.
    II.    Under the chairmanship of Subhash C. Bose, the NPC was to work out concrete programmes for development encompassing all major areas of the economy.
    III.    The 15-member NPC with 29 sub-committees and a total of 350 members produced 29 volumes of recommendations.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    I and III
    d.    All of the above

    Answer: c

    Explanation:

    Though the Gandhians and some of the business and propertied representatives were opposed to commit the party to centralised state planning (including Mahatma Gandhi), it was on the initiative of the INC president Subhash C. Bose that the National Planning Committee (NPC) was set up in October 1938 under the chairmanship of J.L. Nehru to work out concrete programmes for development encompassing all major areas of the economy.

    Basically, the NPC was set up in a conference of the Ministers of Industries of the Congress-ruled States (though other states were also invited to participate) where M. Visvesvaraya, J.R.D. Tata, G.D. Birla and Lala Sri Ram and many others including academicians, technocrats, provincial civil servants, trade unionists, socialists and communists etc. were also invited.  The 15-member NPC with 29 sub-committees and a total of 350 members produced 29 volumes of recommendations.

    6.    The final report of the NPC published in which of the following year?
    a.    1940
    b.    1942
    c.    1946
    d.    1951

    Answer: c

    Explanation:

    The work of the committee was interrupted when the Second World War broke out and in the wake of the Quit India Movement many of its members including the chairman were arrested, and between 1940 and 1945 the Committee had only a nominal existence. Though the final report of the NPC could only be published in 1949, many developments related to planning took place during the Interim Government up to 1946.

    7.    Who among the following was the Chairman Consultative Committee of Economists:
    a.    J.L. Nehru
    b.    Ramaswamy Mudaliar
    c.    Subhash C. Bose
    d.    Mahatma Gandhi

    Answer: b

    Explanation:

    A consultative committee of economists under the chairmanship of Ramaswamy Mudaliar was set up in 1941 as a ‘think tank’ to advise the four Post-War Reconstruction Committees for executing, national plan for the country.

    Though the committee suggested many plans for the different areas of the economy but they had negligible practical significance and had all the academic biases of the committee.

    8.    In which of the following year, the Post War Reconstruction Committee was set up?
    a.    1941
    b.    1945
    c.    1946
    d.    1949

    Answer: a

    Explanation:

    Some of the important developments after the NPC was set up which prepared a foundation for the coordinated planning in independent India and the Post War Reconstruction Committee was one of those developments.

    Early in June 1941, the Government of India formed (on popular demand) a Post-War Reconstruction Committee which was to consider various plans for the reconstruction of the economy.

    9.    Consider the following statements regarding the Planning and Development Department, set up in 1944:
    I.    The Government of India created a Planning and Development Department in the year 1944 under a separate member of the Viceroy’s Executive Council for organising planning work in the country and co-ordinating it.
    II.    Ardeshir Dalal (the controller of the Bombay Plan) was appointed as one of its acting members and more than 20 panels of experts were set up.
    III.    The central departments and the Governments of Provinces and Indian States were invited to prepare detailed plans for industrialisation.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: d

    Explanation:

    The Government of India created a Planning and Development Department in the year 1944 under a separate member of the Viceroy’s Executive Council for organising planning work in the country and co-ordinating it.

    Ardeshir Dalal (the controller of the Bombay Plan) was appointed as one of its acting members. More than 20 panels of experts were set up. The central departments and the Governments of Provinces and Indian States were invited to prepare detailed plans for industrialisation. This Department was abolished in 1946.

    10.    With reference to the ‘Advisory Planning Board’ of 1946, which of the following statement is incorrect?
    a.    In October 1946, the Government of India appointed a committee called the ‘Advisory Planning Board’ to review the planning that had already been done by the British Government, the work of the National Planning Committee, and other plans.
    b.    The ‘Advisory Planning Board’ was set up to advice the four Post-War Reconstruction Committees for executing, national plan for the country.
    c.    The Board, in its Report of January 1947, emphatically expressed the opinion that the “proper development of large-scale industries can only take place if political units, whether in the provinces or states, agree to work in accordance with a common plan.”
    d.    The ‘Advisory Planning Board’ emphatically advice for the creation of a National Planning Commission, similar to the FICCI’s view of 1934, which will have autonomy and authoritative say on the process of development planning

    Answer: c

    Explanation:

    In October 1946, the Government of India appointed a committee called the ‘Advisory Planning Board’13 to review the planning that had already been done by the British Government, the work of the National Planning Committee, and other plans and proposals for planning and to make recommendations regarding the future machinery of planning and also in regard to objectives and priorities.

    The Board strongly recommended the creation of “a single, compact authoritative organisation .... responsible directly to the Cabinet ... which should devote its attention continuously to the whole field of development.”

    This was an emphatic advice for the creation of a National Planning Commission, similar to the FICCI’s view of 1934, which will have autonomy and authoritative say on the process of development planning, working in tandem with the Union cabinet and influencing the developmental decisions of the states, too. This happened in 1950 with the setting up of the Planning Commission.

    The Board, in its Report of January 1947, emphatically expressed the opinion that the “proper development of large-scale industries can only take place if political units, whether in the provinces or states, agree to work in accordance with a common plan.”

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