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

Jun 13, 2016 15:12 IST

    From UPSC IAS Prelims 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 its 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.    Who among the following formulated the “Gandhian Plan”?
    a.    Mahatma Gandhi
    b.    Sriman Narayan Agarwal
    c.    M.N. Roy
    d.    Mahalanobis

    Answer: b

    Explanation:


    Espousing the spirit of the Gandhian economic thinking, Sriman Narayan Agarwal formulated this plan in 1944. This plan laid more emphasis on agriculture. Even if he referred to industrialisation it was to the level of promoting cottage and village-level industries, unlike the NPC and the Bombay Plan which supported a leading role for the heavy and large industries. The plan articulated a ‘decentralised economic structure’ for India with ‘self-contained villages’.

    M.N. Roy was the Chairman of the Post-War Reconstruction Committee of Indian Trade Union and advocated a plan based on Marxist socialism and advocated the need of providing the people with the ‘basic necessities of life’.

    PC Mahalanobis was one of the members of the Planning Commission of India, contributed notably to newly independent India's Five-Year plans starting from the second. In the second five-year plan he emphasised industrialisation on the basis of a two-sector model. His variant of W. Leontief's Input-output model, the Mahalanobis model, was employed in the Second Five Year Plan, which worked towards the rapid industrialisation of India and with other colleagues at his institute (Indian Statistical Indstitute) , he played a key role in the development of a statistical infrastructure.

    2.    Who among the following Indian leaders advocated the “People’s Plan”?
    a.    Mahalanobis
    b.    Jaiprakash Narayan
    c.    M.N. Roy
    d.    Sriman Narayan Agarwal

    Answer: c

    Explanation:


    In 1945, yet another plan was formulated by the radical humanist leader M.N. Roy, chairman of the Post-War Reconstruction Committee of Indian Trade Union. The plan was based on Marxist socialism and advocated the need of providing the people with the ‘basic necessities of life’. Agricultural and industrial sectors, both were equally highlighted by the plan. Many economists have attributed the socialist leanings in Indian planning to this plan. The common minimum programmes of the United Front Government of the mid-nineties (20th century) and that of the United Progressive Alliance of 2004 may also be thought to have been inspired from the same plan. ‘Economic reforms with the human face’, the slogan with which the economic reforms started early 1990s has also the resonance of the People’s Plan.

    After the reports of the NPC were published and the Government was set to go for the five-year Plans, a lone blueprint for the planned development of India was formulated by the famous socialist leader Jaiprakash Narayan—the Sarvodaya Plan published in January 1950.

    3.    Which of the following is in correct order in terms of its incorporation?
    a.    Bombay Plan > Gandhian Plan > People’s Plan > Sarvodaya Plan
    b.    People’s Plan > Sarvodaya Plan > Bombay Plan > Gandhian Plan
    c.    Sarvodaya Plan > Bombay Plan > Gandhian Plan > People’s Plan
    d.    Gandhian Plan > Sarvodaya Plan > Bombay Plan > People’s Plan

    Answer: a

    Explanation:


    Bombay Plan: It was presented by 8 leading industrialists of Bombay, Purshotamdas Thakurdas, J.R.D. Tata, G.D. Birla, Lala Sri Ram, Kasturbhai Lalbhai, A.D. Shroff, Avdeshir Dalal and John Mathai in 1944.

    Gandhian Plan: Sriman Narayan Agarwal formulated ‘Gandhian Plan’ in 1944.

    People Plan: In 1945, yet another plan was formulated by the radical humanist leader M.N. Roy, chairman of the Post-War Reconstruction Committee of Indian Trade Union. The plan was based on Marxist socialism and advocated the need of providing the people with the ‘basic necessities of life’. Agricultural and industrial sectors, both were equally highlighted by the plan.

    Sarvodaya Plan: After the reports of the NPC were published and the Government was set to go for the five-year Plans, a lone blueprint for the planned development of India was formulated by the famous socialist leader Jaiprakash Narayan—the Sarvodaya Plan published in January 1950.

    4.    ‘Gadgil Report’, one of the several area-specific reports were publish during 1940s which was on:
    a.    Agricultural Development
    b.    Rural Credit
    c.    Agricultural Prices
    d.    Cooperatives

    Answer: b

    Explanation:

    The idea for the need of a planned development of India became more and more popular by the decade of the 1940s. It was under this popular pressure that the Government of India started taking some planned actions in this direction. In the 1940s, we see several area-specific reports being published:

    • Gadgil Report on Rural Credit
    • Kheragat Report on Agricultural Development
    • Krishnamachari Report on Agricultural Prices
    • Saraiya Report on Cooperatives
    • A series of Reports on Irrigation (ground water, canal, etc.)

    All these reports, though prepared with great care and due scholarship, the Government had hardly any zeal to implement plans on their findings. But independent India was greatly benefited when the planning started covering all these areas of concerns.

    5.    Consider the following statements regarding the objectives of planning in India:
    I.    Planning for India was an instrument to realise the aspirations and dreams of the future.
    II.    These aspirations and goals got their proper places and due importance in the reports of the National Planning Committee (NPC), in the deliberations of the Constituent Assembly and finally in the Constitution of India.
    III.    From the margins of the ripening nationalist movement as well as taking clues from the Soviet and the French styles of planning, the NPC articulated the objectives 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:

    Planning for India was an instrument to realise the aspirations and dreams of the future. We know that the foundations of future India were not laid in one day. The cherished dream about future India had evolved through a long-drawn process of the entire period of the freedom struggle. These aspirations and goals got their proper places and due importance in the reports of the National Planning Committee (NPC), in the deliberations of the Constituent Assembly and finally in the Constitution of India.

    From the margins of the ripening nationalist movement as well as taking clues from the Soviet and the French styles of planning, the NPC articulated the objectives of planning in India. The process of planning in India tried to include all the aspirations of nationalist movement as well as of the future generations. But this will be a highly general comment upon the objectives of planning in India. We need to delve into the specific and objective goals of planning in India to further our discussions.

    6.    Consider the following statements regarding the important features included by the Constitutional provisions which pertain to the objectives of planning in the country:
    I.    ‘Economic and social planning’ is a concurrent subject.
    II.    The Constitution includes provisions for promoting co-operation on a voluntary basis between the Union and the states.
    III.    The Constitution also sets out in broad outline the pattern of the welfare state envisaged and the fundamental principles on which it should rest.

    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:

    There are three important features included by the Constitutional provisions which pertain to the objectives of planning in the country:

    • ‘Economic and social planning’ is a concurrent subject. Also, while framing the ‘Union’, ‘State’ and ‘Concurrent’ list, allocating subjects and other provisions, the Constitution vests power in the Union to ensure co-ordinated development in essential fields of activity while preserving the initiative and authority of the states in the spheres allotted to them.
    • The Constitution includes provisions for promoting co-operation on a voluntary basis between the Union and the states and among states and groups of states in investigation of matters of common interest, in legislative procedures and in administration, thus avoiding the rigidities inherent in federal constitutions (Articles 249, 252, 257, 258, 258-A, and 312). In other words, the objective is co-operative federalism.
    • The Constitution also sets out in broad outline the pattern of the welfare state envisaged and the fundamental principles on which it should rest.

    These are the major cornerstones of planning and its objectives enshrined in the Constitution that will breed enough Union–State tussle in coming decades and make it compulsive for the Government to resort to ‘reforms with a human face’ rhetoric. We can see the methodology of planning taking a U-turn in the era of the economic reforms since early 1990s.

    7.    Which of the following is an objective of planning in India?
    a.    Economic growth
    b.    Poverty alleviation
    c.    Employment generation
    d.    All of the above

    Answer: d

    Explanation:

    A broad consensus looks evolving through the process of planning and crystallising on the six major objectives of planning in India which are as follows:

    Economic Growth: Sustained increase in the levels of production in the economy is among the foremost objectives of planning in India which continues till date and will be so in future, without any iota of doubt in it.

    Poverty Alleviation: Poverty alleviation was the most important issue which polarised the members of the NPC as well as the Constituent Assembly that a highly emphatic decision in favour of a planned economy evolved even before independence. Several programmes have been launched in India directing the cause of poverty alleviation by all the Governments till date and the process continues even today with more seriousness (we see the National Rural Employment Guarantee Programme—NREGP—being launched by the UPA Government in 2006 by passing an Act in the Parliament—the matter has started attracting such high political concern!).

    Employment Generation:
    Providing employment to the poor has been the best tool of economics to alleviate poverty. Thus, this objective of planning in India comes naturally once it commit0ted itself to alleviate poverty. Employment generation in India has been, therefore, part and parcel of the objective of poverty alleviation in India. General programmes and schemes have been launched by the Governments from time to time in this direction, some based on the wage employments still, others based on self-employment.

    Controlling Economic Inequality:
    There were visible economic inequalities in India at the inter-personal as well as at the intra-personal levels. Economic planning as a tool of checking all kinds of economic disparities and inequalities was an accepted idea by the time India started planning. To fulfil this objective of planning the Governments have enacted highly innovative economic policies at times even inviting a tussle with regard to the Fundamental Rights Constitution.

    Self-reliance: During the 1930s and 1940s, there was an ardent desire among the nationalists, capitalists and the NPC for making the economy self-reliant in every field of the economic sphere. As Jawaharlal Nehru asserted: self-reliance, “does not exclude international trade, which should be encouraged but with a view to avoid economic imperialism.” India still strives for self-reliance in every field of economy as well as serving the realities of higher interdependence in the globalising world post-World Trade Organisation (WTO).

    Modernisation: Modernising the traditional economy was set as a foremost objective of the planning. Specially, the agriculture sector of the economy needed an immediate inclusion of modern methods and techniques of farming dairying, etc. Similarly, in education too, India needs to go for inclusion of modern education system.

    8.  Which of the following plans is/are formulated by the Central Government and financed by it for the implementation at the national level?
    a.    Five Year Plans
    b.    Twenty-Point Programme
    c.    Member of Parliament Local Area Development Scheme
    d.    All of the above

    Answer: d

    Explanation:


    The Plans which are formulated by the Central Government and financed by it for the implementation at the national level are known as Central Plans. Over the years, the Centre has launched three such plans and the Governments have maintained continuity in their implementation. The three central plans are:

    • Five-Year Plans,
    • Twenty-Point Programme, and
    • Member of Parliament Local Area Development Scheme.


    The Plans which are formulated by the Central Government and financed by it for the implementation at the national level are known as Central Plans. Over the years, the Centre has launched three such plans and the Governments have maintained continuity in their implementation. The three central plans are:

    Five-Year Plans:
    This is the most important among the central plans and is being continuously implemented one after the other since planning commenced in India. As planning has been a purely political exercise in India, the Five-Year Plans of the country have seen many unstable and critical moments till date. Several new developments related to planning also took place during the years.

    Twenty-Point Programme:
    The Twenty Point Programme (TPP) is the second Central Plan which was launched in July 1975. The programme was conceived for coordinated and intensive monitoring of a number of schemes implemented by the Central and the State Governments. The basic objective was of improving the quality of life of the people, especially of those living below the poverty line. Under this, a thrust was given to schemes relating to poverty alleviation, employment generation in rural areas, housing, education, family welfare and health, protection of environment and many other schemes having a bearing on the quality of life in the rural areas.

    Member of Parliament Local Area Development Scheme: The Member of Parliament Local Area Development Scheme (MPLADS) is the last of the Central Plans and latest to have been launched, too. The scheme was launched on December 23, 1993 with only Rs. 5 lakh given to each MP which was increased to Rs. 1 crore in the year 1994–95. When the MPs did put a demand to increase the sum to Rs. 5 crore in 1997–98, finally the Government enhanced it to Rs. 2 crore since 1998–99. In April 2011 the corpus was enhanced to Rs. 5 crore while announcing the new guidelines for the scheme.

    9.  Consider the following statements regarding the MP Local Area Development Scheme (MPLADS):
    I.    Under this scheme the Members of Parliament recommend some works (i.e. creation of fixed community assets, based on locally felt developmental needs) to the concerned District Magistrate.
    II.    The scheme is governed by a set of guidelines, which have been comprehensively revised and issued in November 2005.
    III.    In April 2011 the corpus was enhanced to Rs. 10 crore while announcing the new guidelines for the scheme.

    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: Under this scheme the Members of Parliament recommend some works (i.e. creation of fixed community assets, based on locally felt developmental needs) to the concerned District Magistrate.

    The scheme is governed by a set of guidelines, which have been comprehensively revised and issued in November 2005. Its performance has improved due to pro-active policy initiatives, focus monitoring and review.

    In recent years, many criticisms of the scheme came to the public notice which concerned either misappropriation of the funds or non-use of the funds, especially from the backward states. The people’s representative at the PRI level have been demanding scrapping of the scheme as it infringes the idea of decentralised planning. In its place, they want the funds to be given to the local bodies directly for the same kind of works specified by the MPLADS.

    10.    In which of the following year National Development Council (NDC) was set up?
    a.    1950
    b.    1951
    c.    1952
    d.    1953

    Answer:


    Explanation:

    The National Development Council (NDC) was set up in August 1952, by a Resolution59 issued from the cabinet secretariat. The first Plan recommended its formation with a very concise and suitable observation about it.

    The basic nature, legal status and other details of the NDC are same except its composition and functions. It is composed of all the members of the PC, the Union Cabinet, the Chief Ministers of the States, and the Administrators/Lt. Governors of the Union Territories (UTs).

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