Economics for Class 11 Chapter 2 Indian Economy (1950-90)

Learn CBSE Economics Index Terms for Class 11, Chapter 2 Indian Economy (1950-90)

1. Economic System – An economic system is a mechanism with the help of which the government plans and allocates accessible services, resources, and commodities across the country. Economic systems manage elements of production, combining wealth, labour, physical resources, and business people. An economic system incorporates many companies, agencies, objects, models, and deciding procedures.

2. Capitalist Economy – In a capitalist system, the products manufactured are divided among people, not according to what they want but on the basis of purchasing power, which is the ability to buy products and services. This means that an individual needs to have the money with him to buy the goods and services. Low-cost housing for the underprivileged is much required but will not include demand in the market because the needy do not have the buying power to back the demand. Therefore, the commodities will not be manufactured and provided as per market forces.

3. Socialist Economy – This economic system acknowledges the three inquiries in a different way. In a socialist society, the government determines what products are to be manufactured in accordance with the requirements of the society. It is believed that the government understands what is appropriate for the citizens of the country. Therefore, the passions of individual buyers are not given much attention. The government concludes how products are to be created and how the product should be disposed of. In principle, sharing under socialism is assumed to be based on what an individual needs and not what they can buy. A socialist system does not have a separate estate because everything is controlled by the government.

4. Mixed Economy – Mixed economic systems have characteristics of both the command and the market economic system. For this purpose, mixed economic systems are also known as dual economic systems. However, there is no sincere method to determine a mixed system. Sometimes, the word represents a market system beneath the strict administrative control in certain sections of the economy.

5. Planning Commission – The planning commission played a vital role in India’s emergence from a beaten country during the days of the British Raj to an independent nation with ambitious developmental goals. The Commission has often been accused of being a soviet-styled bureaucratic body that stifled economic growth.

The Planning Commission of India was an organisation in the Government of India, which formulated India’s Five-Year Plans, among other functions. The planning commission was charged with the service of the opportunities to all for employment in the service of the community.

6. Economic Growth – Economic growth can be defined as an increase in the value of goods and services produced in an economy over a period of time. This value calculation is done in terms of a % increase in Gross Domestic Product (GDP).

Economic growth is calculated in real terms, where the effects of variation in the value of goods and services due to inflation distortion are also accounted for.

7. Self-reliant Economy – A self-reliant economy, also called Autarky, is one that does not require any aid, support, interaction, or trade with the outside world. The British conquest transformed the Indian economy from a self-reliant one into a colonial economy.

8. Land Ceiling – Land ceiling refers to fixing a cap on the size of landholding a family or individual can own. Any surplus land is distributed among landless people like tenants, farmers, or agricultural labourers.

9. The Green Revolution – The green revolution is a term used for rapid increases in wheat and rice yields in developing countries brought about by improved varieties combined with the expanded use of fertilisers and other chemical inputs that have had a dramatic impact on incomes and food supplies in many developing countries.

The term green revolution was first used by William Gaud and Norman Borlaug, the Father of the Green Revolution.

In 1965, the Government of India launched the Green Revolution with the help of a geneticist, now known as the Father of the Green revolution in India, M. S. Swaminathan. The movement of the green revolution was a great success and changed the country’s status from a food-deficient economy to one of the world’s leading agricultural nations. It started in 1967 and lasted till 1978.

10. Market Surplus – A market surplus occurs when there is excess supply. This means that the quantity supplied is greater than the quantity demanded. Some producers will not be able to sell all their goods in such a situation. In order to stay competitive, many firms will lower their prices, thus lowering the market price for the product.

11. Subsidies – A subsidy is a form of financial aid or support extended to an economic sector (institution, business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended by the government, the term subsidy can relate to any type of support, for example, from NGOs or implicit subsidies. Subsidies come in various forms, including direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates).

12. Industry – The industry is a category of active enterprises and organisations which produce or sell products, services, or sources of revenue. Industries are commonly categorised in economics as the primary industry, secondary industry, and tertiary industry.

13. Trade – Trade is referred to as a basic economic activity that involves buying and selling different goods and services between two or more parties involved in the transaction. Trade that takes place between two parties is called bilateral trade, while the same occurring between more than two parties is called multilateral trade.

14. Public Sector – The public sector consists of businesses that are owned and controlled by the government of a country. The ownership and control of the central or state governments in these organisations are either complete or partial. But it still holds a majority stake and makes every single decision regarding running the entity. These organisations include government agencies, state-owned enterprises, municipalities, local government authorities, and other public service institutions.

Some of them can be non-profit organisations, while others participate in commercial activities as well. It generally focuses on providing goods and services to the general public at relatively cheaper rates than private companies. Its main aim is to ensure the welfare of the general public within a country.

15. Private Sector – The private sector enterprises are owned, controlled, and managed either by individuals or business entities. It can be small-scale, medium-scale, or even large-scale organisations. These get formed to earn a profit from their business operations, and they can raise funding from individuals, groups, and the general public.

The different entities within the private sector include sole proprietorship, partnership, cooperative societies, companies, and multinational corporations. They also focus on taking care of the needs of their customers to survive in the long run. Ever since the introduction of the New Economic Policy in 1991 by the Government of India, almost every industry in the country has opened up to the private sector. It has led to a phenomenal increase in the size of the Indian economy and its growth rates.

16. Small Scale Industries – Small scale industries are referred to as those industries in which the process of manufacturing, production, and servicing are done on a small scale.

The investment in such industries is one-time, and these investments are mostly made in plants and machinery; the total investment in such industries does not exceed 1 crore. In small-scale industries, the manufacturing of goods and rendering of services are done with the help of smaller machines and very limited manpower.

17. Trade Policy – Trade policy can be defined as goals, rules, standards, and regulations that are involved in the trade between countries. These policies are particular to a specific country and are formed by its public officials. A country’s trade policy covers taxes imposed on inspection regulations, imports and exports, and tariffs and quotas.

Under this policy, the government protects domestic manufacturers from foreign competition. The protection from import is done in the following two forms:

Quota: It specifies the number of goods that can be imported.

Tariff: It is a tax that is imposed on imported products. This tax makes imported products more costly and discourages their use.

The purpose of quotas and tariffs is to restrict imports and, therefore, protect domestic industries from foreign competition.

18. Import Substitution – Import substitution is a strategy under trade policy that abolishes the import of foreign products and encourages production in the domestic market. The purpose of this policy is to change the economic structure of the country by replacing foreign goods with domestic goods.

Post-independence India adopted the policy of import substitution by imposing heavy tariffs on import duty. The industrial policy that the country endorsed was linked to the trade policy. In the first seven Five-Year plans, trade in India was distinguished by the inward-looking trade strategy. This strategy is known as import substitution, which aims to boost domestic production and shield domestic products from international competition.

19. Permit Raj or Licence Raj – The Licence Raj or Permit Raj (raj, signifying “Rule” in Hindi) was the arrangement or systems of licences, guidelines, and going with red tape, that prevented the set up of business organisations in India between 1947 and 1990. Up to 80 government organisations and agencies must be satisfied before privately owned businesses could deliver something and, whenever allowed, the public authority would direct and regulate the manufacturing and production. The term is a play on the “English Raj”, which alludes to the time of British rule in India.

We hope that the offered Economics Index Terms for Class 11 with respect to Chapter 2: Indian Economy (1950-90) will help you.

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