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Indian Economy Nature

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Indian Economy Nature

shape Introduction

An Economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents in a given geographical location. Indian Economy is considered to be a mixed economy with share of Agriculture, share of Industry and a share of Service Sector. India is considered to be a developing economy. India has a co-existence of private [Reliance, Tata Groups,etc.] and public sector[BHEL, ONGC,etc. enterprises.

shape IEN

Indian Economy Nature – IEN:

  • The economy of India is the sixth-largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity (PPP)
  • .

  • The country is classified as a newly industrialized country, one of the G-20 major Economy, a member of BRICS and a developing with an average growth rate of approximately 7% over the last two decades.

  • India’s economy became the world’s Fastest-growing major economy in the last quarter of 2014, replacing the People’s Republic of China.

  • India did not wish to build a monopolistic economy either with no private players.


Indian Economy Nature – Mixed Economy:

  • A mixed economy combines the advantages and disadvantages of market, command, and traditional economies.

  • Mixed Economy is that economy in which both government and private individuals exercise economic control.”


Meaning:

  • It is a golden mixture of capitalism and socialism.

  • Under this system, there is freedom of economic activities and government interference for the social welfare, hence it is a blend of both the economies.

  • The developing countries like India have adopted mixed economy to accelerate the pace of economic development. Even the developed countries like UK, USA, etc. have also adopted ‘Mixed Capitalist System’.


Indian Economy Nature – Nature of Indian Economy:

  • To know and understand the nature of Indian economy, it is very necessary to have a clear idea about the meaning of Indian economy.

  • After Independence India launched its First Five Years plan in 1950-51; then now 5-Year Plan is going on.

  • Although India is an agro-based economy, but a lot of emphases has been given on the development of industries (both consumer goods and capital goods), service sector (including construction, trade, commerce, banking system etc.) and socio-economic infrastructure (like education, health, housing power, energy, transport, communication etc.).

  • Both central and state governments in India join their hands in all the spheres leading to economic development.

On the basis of production:

(i) Primary or Agricultural Sector:

This sector consists of agriculture and its allied activities including

  • dairy

  • poultry

  • cattle rearing

  • shing,

  • forestry, and

  • animal husbandry etc


In the primary sector, most of the goods are produced by using natural resources, since India is an overpopulated agro-based economy, therefore, this sector plays an important role in economic growth.

(ii) Secondary or Manufacturing Sector:

  • This sector is also known as an industrial sector.

  • In this category, all types of manufacturing sector like large-scale, small-scale and tiny scale are included.

  • Small and tiny scale industries include clothes, candle, poultry, matchbox, hand loom, toys etc.

  • These units provide huge employment.

  • On the other hand, large-scale industries like iron and steel, heavy engineering, chemicals, fertilizers, shipbuilding etc. contribute a huge amount to our gross domestic product.


(iii) Service or Tertiary Sector:

  • This sector produces different services like transport, communication, banking, insurance, trade and commerce, including both national and international trade.

  • Moreover, all the professional services like doctors, engineers, teachers, lawyers etc. come under service sector.

  • Again the services provided by the government itself for the welfare of citizens are also included in the tertiary sector.

On the basis of Ownership or Organization:

(i) Public Sector:

  • It consists of all the economic organizations which are controlled and managed by the government.

  • All the government-owned production units come under this head.

  • These units produce and distribute goods and services among the common mass with an objective of welfare motives.


(ii) Private Sector:

  • It consists of all the economic enterprises which are controlled and managed by the private enterprises.

  • All the privately owned production units come under this category.

  • These units will produce and distribute goods and services to the people with an objective of the prot motive.

On the basis of habitation:

(i) Rural Sector:

  • According to M.K. Gandhi, “India lives in villages”. About three-fourths of the total population in India lived in the rural sector.

  • The main occupations of this sector are agriculture and allied activities.


(ii) Urban Sector:

  • One-fourth of the total population in India lived in the urban sector.

  • It consists of towns and cities.

  • People living in this sector are mainly engaged in either secondary sector or tertiary sector.


shape Quiz

1. Mixed economy means an economy where

    A. both agriculture and industry are equally promoted by the State
    B. there is co-existence of public sector along with private sector
    C. there is importance of small scale industries along with heavy industries
    D. economy is controlled by military as well as civilian rulers


Answer: Option B

2. Capital deepening refers to

    A. both agriculture and industry are equally promoted by the State
    B. there is co-existence of public sector along with private sector
    C. there is importance of small scale industries along with heavy industries
    D. economy is controlled by military as well as civilian rulers


Answer: Option A

3. which of the following group suffers the most from inflation?

    A. Debtors
    B. Creditors
    C. Businessman
    D. Holders of real assets


Answer: Option B

4. Banking Sector will fall under which of the following sectors?

    A. Agricultural sector
    B. Service Sector
    C. Manufacturing
    D. Industrial Sector


Answer: Option B

5. The type of unemployment in agriculture sector in India is?

    A. Structural
    B. Frictional
    C. Open
    D. Seasonal


Answer: Option D

6. Primary sector also includes?

    A. Transport
    B. banking
    C. mining and quarrying
    D. Insurance


Answer: Option C

7. Which of the following statements is/are correct ?

i) Tourism is an example of Tertiary Sector
ii) Gini Index is used to measure the inequalities of income and wealth
iii) The share of agriculture in India’s national income has decreased over the years
iv) India accommodates nearly 17.5% of worlds population

    A. i
    B. i, ii
    C. i, ii, iii
    D. i, ii, iii, iiv


Answer: Option D

8. Which bank is limited to the needs of agriculture and rural finance?

    A. RBI
    B. SBI
    C. IFC
    D. NABARD


Answer: Option D

9. The development process under capitalism has been described as “Creative Destruction” by?

    A. Schumpeter
    B. Hansen
    C. Karl Marx
    D. J.S. Mill


Answer: Option A

10. Mixed Farming means

    A. Sowing of both cash and food crops
    B. Sowing of two or more crops in the same field.
    C. Sowing of two or more plants in alternate year
    D. Rearing of cattle and agriculture


Answer: Option D