Q 1. The main objective of the Industrial Policy Resolution, 1956 was to:
A. Promote privatisation of industries
B. Establish a socialist pattern of society
C. Encourage foreign domination in industries
D. Abolish public sector enterprises
B. Establish a socialist pattern of society
Q 2. Which model greatly influenced India’s Second Five Year Plan?
A. Harrod-Domar Model
B. Lewis Model
C. Mahalanobis Model
D. Solow Growth Model
C. Mahalanobis Model
Q 3. The strategy of import substitution was adopted mainly to:
A. Increase dependence on foreign goods
B. Protect domestic industries from foreign competition
C. Promote agricultural exports only
D. Reduce public sector investment
B. Protect domestic industries from foreign competition
Q 4. Which of the following industries was reserved exclusively for the public sector under Industrial Policy Resolution, 1956?
A. Consumer goods industry
B. Textile industry
C. Atomic energy industry
D. Automobile industry
C. Atomic energy industry
Q 5. Land reforms introduced after independence mainly aimed at:
A. Increasing landlord control
B. Abolishing intermediaries and improving farmer’s conditions
C. Promoting foreign investment in agriculture
D. Reducing food grain production
B. Abolishing intermediaries and improving farmer’s conditions
Q 6. The Green Revolution initially benefited mainly:
A. Dry and rain-fed regions
B. Small and marginal farmers only
C. States with good irrigation facilities
D. Tribal agricultural areas
C. States with good irrigation facilities
Q 7. Which of the following was NOT a feature of India’s planning strategy during 1950–1990?
A. Public sector dominance
B. Centralised planning
C. Liberalised foreign trade regime
D. Import substitution
C. Liberalised foreign trade regime
Q 8. The term “License Raj” refers to:
A. Free industrial competition
B. Excessive government control and licensing requirements
C. Agricultural taxation policy
D. Open market economy
B. Excessive government control and licensing requirements
Q 9. Which institution was established to provide financial support to agriculture and rural development?
A. Reserve Bank of India
B. NABARD (National Bank for Agriculture and Rural Development)
C. SEBI (Securities exchange board of India )
D. LIC (Life Insurance Corporation)
B. NABARD (National Bank for Agriculture and Rural Development)
Q 10. The Second Five Year Plan gave highest priority to:
A. Agriculture
B. Service sector
C. Heavy and basic industries
D. Foreign trade
C. Heavy and basic industries
Q 11. Which of the following was a major criticism of the Green Revolution?
A. Decline in food grain production
B. Increase in regional inequalities
C. Elimination of irrigation facilities
D. Decrease in use of HYV seeds
B. Increase in regional inequalities
Q 12. The concept of “self-reliance” in India’s planning meant:
A. Complete isolation from world economy
B. Dependence on foreign aid
C. Reducing dependence on imports and foreign assistance
D. Privatisation of all industries
C. Reducing dependence on imports and foreign assistance
Q 13. Which of the following correctly explains the reason behind protectionist policies in India after independence?
A. To encourage foreign firms to dominate Indian markets
B. To allow unrestricted imports
C. To nurture domestic infant industries
D. To reduce industrial development
C. To nurture domestic infant industries
Q 14. The Green Revolution was mainly associated with the increased use of:
1. HYV seeds
2. Chemical fertilisers
3. Irrigation facilities
4.Traditional farming methods
A. 1 and 2 only
B. 1, 2 and 3 only
C. 2, 3 and 4 only
D. 1, 2, 3 and 4
B. 1, 2 and 3 only
Q 15. Which economist is most closely associated with India’s planning strategy based on heavy industrialisation?
A. Amartya Sen
B. Milton Friedman
C. P. C. Mahalanobis
D. Adam Smith
C. P. C. Mahalanobis
Assertion & Reasoning Questions
Directions:
Choose the correct option:
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
B. Both A and R are true, but R is not the correct explanation of A.
C. A is true, but R is false.
D. A is false, but R is true.
Q 16. Assertion (A): India adopted a mixed economic system after independence.
Reason (R): Both public and private sectors were allowed to operate in the economy.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 17. Assertion (A): The Second Five Year Plan focused mainly on agriculture.
Reason (R): The Mahalanobis strategy emphasised rapid industrialisation through heavy industries.
D. A is false, but R is true.
Q 18. Assertion (A): Import substitution was adopted to protect domestic industries.
Reason (R): Indian industries were not strong enough to compete with foreign firms immediately after independence.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 19. Assertion (A): The Green Revolution increased regional inequalities in India.
Reason (R): Benefits of HYV technology were mainly concentrated in states with better irrigation facilities.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 20. Assertion (A): Industrial licensing was introduced to regulate the private sector.
Reason (R): The government wanted balanced regional growth and prevention of concentration of economic power.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 21. Assertion (A): Land reforms completely eliminated inequality in rural India.
Reason (R): Zamindari abolition was effectively implemented in all states without any loopholes.
C. A is true, but R is false.
Q 22. Assertion (A): Public sector enterprises were established to promote social welfare and infrastructure development.
Reason (R): Private sector lacked sufficient capital to invest in heavy industries and infrastructure projects.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 23. Assertion (A): Self-reliance was an important objective of Indian planning.
Reason (R): India wanted to reduce dependence on imports and foreign aid.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 24. Assertion (A): The Green Revolution reduced dependence on food grain imports.
Reason (R): Agricultural productivity increased significantly due to HYV seeds and modern inputs.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 25. Assertion (A): The “License Raj” encouraged efficiency and competition in Indian industries.
Reason (R): Excessive government controls often reduced industrial efficiency and delayed decision-making.
A. Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Q 26. Fill in the blanks:
a) India adopted a __________ economic system after independence.
b) The Planning Commission was established in the year __________.
c) The Second Five Year Plan was based on the __________ model.
d) The Industrial Policy Resolution of 1956 aimed to establish a __________ pattern of society.
e) The strategy of protecting domestic industries from foreign competition is called __________ substitution.
f) Industries reserved for government ownership and control formed the __________ sector.
g) The system of excessive government controls and industrial licensing became known as the __________ Raj.
h) The abolition of intermediaries like zamindars was an important step under __________ reforms.
i) The Green Revolution was mainly associated with the use of __________ yielding variety seeds.
j) The Green Revolution initially benefited states like Punjab, Haryana and western __________.
k) The Agricultural Prices Commission was established to ensure fair __________ prices to farmers.
l) The main objective of self-reliance was to reduce dependence on foreign __________.
m) The Second Five Year Plan gave priority to __________ and basic industries.
n) The concept of cooperative farming aimed at improving agricultural __________.
o) The Green Revolution increased regional and __________ inequalities in agriculture.
p) The Industrial Policy Resolution of 1956 classified industries into __________ categories.
q) The institution established for agricultural and rural development financing is called __________.
r) India’s planning strategy during 1950–1990 strongly emphasised economic __________.
s) The Mahalanobis strategy believed that long-term growth required expansion of __________ goods industries.
t) The Five Year Plans in India were inspired largely by the planning system of the former __________ Union.
a) mixed
b) 1950
c) Mahalanobis
d) socialist
e) import
f) public
g) License
h) land
i) high
j) Uttar Pradesh
k) Minimum Support
l) imports
m) heavy
n) productivity
o) economic
p) three
q) NABARD
r) planning
s) capital
t) Soviet
Q 27. Why did India choose a mixed economy after independence?
India adopted a mixed economy to combine the advantages of both capitalism and socialism.
Reasons:
- Private sector was encouraged for profit and efficiency.
- Public sector was needed for social welfare and infrastructure.
- Heavy industries required huge investment beyond private capacity.
- It aimed to reduce economic inequality while promoting growth.
Thus, both public and private sectors were allowed to operate together.
Q 28. What were the major objectives of the Industrial Policy Resolution, 1956?
The main objectives were:
- Establishment of a socialist pattern of society.
- Expansion of public sector industries.
- Prevention of concentration of economic power.
- Balanced regional industrial development.
- Rapid industrialisation and economic growth.
The policy gave a dominant role to the public sector.
Q 29. Explain any three limitations of the Green Revolution.
1. Regional Inequalities
Benefits were mainly limited to Punjab, Haryana and western Uttar Pradesh.
2. Interpersonal Inequalities
Large farmers benefited more because small farmers lacked resources.
3. Environmental Problems
Excessive use of fertilisers, pesticides and groundwater caused environmental degradation.
Q 30. Why was import substitution adopted in India?
Import substitution was adopted to:
- Protect domestic infant industries from foreign competition.
- Reduce dependence on imports.
- Promote self-reliance.
- Save foreign exchange.
- Encourage industrial growth within the country.
High tariffs and restrictions were imposed on imports for this purpose.
Q 31. What is meant by “License Raj”? State its major drawback.
License Raj refers to the system in which industries required government approval, licenses and permissions for production, expansion and investment.
Major Drawback:
- It increased bureaucratic delays and corruption.
- Reduced competition and industrial efficiency.
- Discouraged innovation and entrepreneurship.
As a result, industrial growth often became slow and inefficient.
Q 32. Reliance on public sector enterprises in five year plans was a tactical mistake. Do you agree with this view?
When five year plans were adopted as a model of growth and development, reliance on public sector enterprises was indispensible.
On the eve of independence, the Indian economy was so much in a state of backward ness and stagnation that it needed a big push of investment to break this deadlock. Private investment was not forthcoming owing to low returns.
Accordingly, there was no option but to rely on public investment and public enterprises. Therefore, to conclude that reliance on public sector was a tactical mistake would be an exaggeration.
Q 33. Explain ‘growth with equity’ as a planning objective.
Economic growth (in terms of GDP growth) would become a meaning less exercise if the benefits of it accrue to only a handful of people in the society.
Benefits of growth must spread across larger sections of the society, so that the distribution of income becomes eqitable.
‘Equity’ (in terms of equitable distribution of income) implies social justice, and economic growth must be combined with social justice. That is why, planning in India, focuses not merely on economic growth, but on ‘growth with social justice’.]
Q 34. ‘Aatmanirbhar Bharat’ had been at the roots of the Indian planning process in the form of ‘self-reliance’ as an objective of the planning process. Do you agree with the given statement? Justify your answer.”
Yes, I agree with the given statement. The modern concept of Aatmanirbhar Bharat (Self-Reliant India) is a direct continuation of the core long-term objectives established at the inception of India’s economic planning process.
1. Historical Continuity in Five-Year Plans
- Core Objective: Ever since independence, India’s institutional planning framework (through the Planning Commission and early Five-Year Plans) prioritized self-reliance to avoid excessive dependence on foreign nations for essential goods, capital, and technology.
- Foreign Intervention Shield: The early planners recognized that heavy reliance on foreign food supplies and foreign capital could leave domestic policies vulnerable to external political pressures and global economic shocks.
2. Structural Sectoral Initiatives
- The Green Revolution: Formulated in the mid-1960s, these agricultural policy initiatives intended to make India completely self-sufficient in food grain production, successfully ending its structural reliance on food aid imports.
- Import Substitution Policy: The initial decades of planning employed domestic industrial shields (tariffs and quotas) to promote indigenous industries, encouraging the production of locally made alternatives over imports.
3. Evolution into Aatmanirbhar Bharat
- Modern Iteration: The modern Aatmanirbhar Bharat Abhiyan campaign expands upon this structural base. It shifts focus toward making India a robust global manufacturing hub by integrating local production with cutting-edge global supply chains.
- Strategic Pillars: Instead of complete economic isolation, it uses modern technology-enabled systems, infrastructure upgrades, and domestic demand to build local resilience across critical sectors like defense, electronics, and medical supplies.
If you are preparing for an assignment, let me know if you would like to list the five pillars of Aatmanirbhar Bharat, analyze its impact on MSMEs, or outline its role in the Green Revolution.
Q 35. Explain the features, objectives and importance of the Industrial Policy Resolution, 1956.
The Industrial Policy Resolution (IPR), 1956 was the basis of India’s industrial development strategy after independence. It aimed to establish a socialist pattern of society.
Features of Industrial Policy Resolution, 1956
1. Classification of Industries
Industries were divided into three categories:
Schedule A
- Completely owned by the government.
- Included industries like:
- Defence
- Atomic energy
- Railways
Schedule B
- Both public and private sectors could operate.
- Government gradually expanded its role.
Schedule C
- Remaining industries left for private sector under government regulation.
2. Expansion of Public Sector
Public sector was given a dominant role in:
- Heavy industries
- Infrastructure
- Strategic sectors
3. Industrial Licensing
Private industries required licenses for:
- Establishment
- Expansion
- Production decisions
This system later became known as License Raj.
Objectives of IPR, 1956
1. Rapid Industrialisation
To develop heavy and basic industries.
2. Reduction of Inequalities
To prevent concentration of economic power.
3. Balanced Regional Development
To reduce regional disparities.
4. Social Welfare
To promote employment and economic justice.
Importance
- Created industrial base for India.
- Promoted infrastructure development.
- Increased public sector participation.
- Helped economic planning.
Limitations
- Excessive controls reduced efficiency.
- Licensing encouraged corruption and delays.
- Public sector enterprises often became inefficient.
Conclusion
The Industrial Policy Resolution, 1956 laid the foundation of India’s industrial structure, though over time excessive regulation created inefficiencies.
Q 36. Explain the strategy of import substitution adopted by India after independence.
Import substitution refers to replacing imported goods with domestically produced goods.
India adopted this strategy to promote self-reliance and industrial growth.
Objectives of Import Substitution
1. Protection of Domestic Industries
Indian industries were weak and needed protection from foreign competition.
2. Reduction in Foreign Dependence
India wanted economic independence after colonial rule.
3. Saving Foreign Exchange
Reducing imports helped conserve scarce foreign exchange reserves.
4. Promotion of Industrialisation
Encouraged growth of domestic industries.
Measures Adopted
- High import duties
- Quotas and restrictions on imports
- Licensing of imports
- Encouragement to domestic industries
Advantages
1. Development of Industrial Base
Helped establish many industries in India.
2. Self-Reliance
Reduced dependence on foreign products.
3. Employment Generation
Industrial growth created jobs.
Limitations
1. Lack of Competition
Protected industries became inefficient.
2. Poor Quality Products
Limited competition reduced innovation and quality improvement.
3. High Costs
Domestic goods often became expensive.
Conclusion
Import substitution helped India build an industrial base but excessive protection eventually reduced efficiency and competitiveness.
Q 37. Explain the achievements and limitations of the Green Revolution.
The Green Revolution refers to the large increase in agricultural production due to modern technology introduced during the 1960s.
It involved:
- HYV seeds
- Irrigation
- Fertilisers
- Pesticides
- Modern machinery
Achievements of Green Revolution
1. Increase in Food Grain Production
India became self-sufficient in food grains.
2. Rise in Agricultural Productivity
Yield per hectare increased significantly.
3. Reduction in Food Imports
Dependence on foreign food aid declined.
4. Development of Agricultural Infrastructure
Expansion of irrigation and rural markets occurred.
Limitations of Green Revolution
1. Regional Inequalities
Benefits concentrated mainly in:
- Punjab
- Haryana
- Western Uttar Pradesh
2. Interpersonal Inequalities
Large farmers benefited more than small farmers.
3. Environmental Problems
- Soil degradation
- Water depletion
- Excessive chemical use
4. Limited Crop Coverage
Mainly benefited wheat and rice crops.
Conclusion
The Green Revolution transformed Indian agriculture but also created regional, social and environmental imbalances.
Q 38. Explain the main features of India’s economic planning during 1950–1990.
Economic planning refers to a systematic effort by the government to allocate resources and achieve economic goals.
India adopted planned economic development after independence.
Main Features of Economic Planning
1. Centralised Planning
The Planning Commission prepared Five Year Plans for the economy.
2. Mixed Economy
Both public and private sectors operated together.
3. Public Sector Dominance
Public sector controlled strategic and heavy industries.
4. Import Substitution
Domestic industries were protected from foreign competition.
5. Focus on Self-Reliance
India aimed to reduce dependence on imports and foreign aid.
6. Emphasis on Heavy Industries
Second Five Year Plan prioritised capital goods industries.
7. Agricultural Development
Land reforms and Green Revolution were introduced.
Achievements
- Creation of industrial base
- Expansion of infrastructure
- Increase in food grain production
Limitations
- Slow economic growth
- Poverty and unemployment persisted
- Industrial inefficiency under License Raj