ECONOMY AND
GOVERNMENT
Introduction
• Economic system is organised system of all economic activities of human beings.
• The main objective of economic system is human welfare.
• Government works towards improvement of human welfare.
• End of 19th century was the opinion of many economists that government should
not interfere in man's economic activities.
• At that time government involved only in fundamental duties of national security
dispensing of justice and maintenance of law and order.
• With the rays of welfare states in 20th century the scope of governments
involvement got extended.
• The provided Mani facilities like food Docomo clothing shelter, education, health,
hygiene, transport, communication etc.
• In developing countries many problems arise due to unemployment,
poverty,agricultural backwardness, unequal distribution of income and wealth.
• Government must solve such problems.
• Developing countries also lack basic facilities like transport, communication,
electricity, education, health etc.
• The fluctuations in national income, employment, investment, price etc. These are called
economic fluctuations.
• The economy without fluctuations is said to have economic stability.
• The income and wealth generated by country must be distributed without any discrimination in
the name is caste, class, literate, urban or rural is called Social Justice.
• Government must balance the economic stability and social justice with economic development.
• In order to overcome these problems the government implemented economic plans.
Planning in India
• Planning is Essential in everyone's life.
• A student must utilise his time in a day in systematic manner. The hours devoted for study,
sleep and play, routine works must be planned.
• Similarly Country also has yo plan to utilize it's resources.
• It has to use the resources in profitable manned and secure maximum satisfaction of people
it's called planning.
• The government should decide on what to produce? how much to produce? How to
distribute etc.
• Modern planning was introduced by Bharata Ratna Sir M. Vishveshwariah.
• In 1934 he published book titled "Planned economy for India".
• Hence is he is regarded as "Father of Economic planning in India".
• Government formed national planning commission in 1950. - Prime minister is the
chairman.
• Objective- precisely estimate the natural and human resources and capital in the country
and to prepare plans for effective utilisation of these resources.
• The plan period is 5 years hence - Five year plan.
• 1952 - National development council - chief ministers of all the states are the board
members.
2. Five year plans
• First came into existence on 1st April 1951.
• So far 12th five year plan has been implemented.
• In 2015 - NITI Ayog was established in the place of national planning commission.
• Watch five year plan has specific objectives.
• Poverty is the major problem.
• Primary objective - education of poverty and improving the standard of living.
Other objectives
• Increasing the production to the maximum extent possible.
• Increasing the employment opportunities.
• Reducing the economic disparities.
• Ensuring economic stability.
• Modernising the economics etc.
Achievements of 5 year plan
• In initial 20 year period of planning national income give at average rate of 3.5% per
annum.
• Next 20 year period it grew at an average rate of 5%.
• During the period from 1991-2000 annual growth was 5.6%
• During 2001 to 2010 the growth was 7.3%.
• This means the rate of growth of national income has increased gradually.
• In the period between 2001 to 2010 per capita income has grown at an average
rate of 5.6 per annum.
• In the development of national income theories contribution of all the three sectors
of economy that is agriculture industry and services.
• In the initial period plan agriculture sector contributed more than 50% to the
national income.
• However contribution of the sector has reduced drastically to 18.3% in 2022 to
2023.
• The production has increased five times during the plan period of production of
food grains 315.7 million tonnes in 2021-22.
• Employment opportunities have increased with expansion of industrial service sector.
• Attempts have been made to provide employment opportunities to the rural poor
through poverty alleviation and employment generation program.
• Progress has been recorded in the field of science and technology.
• Modern technology has been used in agriculture industrial and service sector.
• Services of our engineers being exported to foreign countries.
• Unfortunately post economic reform period there is drastic increas in inequality of
income as many disadvantage sections are left out of the growth process.
• Life expectancy rate of people have been improve.
• Rate of infant mortality and post natal mortality has been reduced.
• Population growth is also decreasing.
• 5 year plans failed to create adobeat jobs to all the job aspirants in the country.
• Poverty do relatively has reduced is still at large disparity between large and poor is
increasing.
• Lack of basic amenities has deepend.
3. Green revolution
• Greatest achievement of 5 year plans has been the green Revolution.
• Revolution means means change or progress.
• Food green production in India during 1967 was 74 million tons. Due to
government efforts it increase to 108 million tonnes in 1970.
• The drastic increase in food grain production during the period is called as green
revolution.
• Green revolution was the consequence of using high yielding seeds.
• In the beginning of 1960 Dr. Norman Borlaug German agriculture scientist
conducted many experiments in Mexico result of which was discovery of high
yielding wheat grains.
• Mexico and Taiwan made use of this grains and achieved immense success in
production of wheat.
• Agriculture production India in the year 1965 to 66 due to severe drought.
• Resolve this problem in 1966 Indian government initiated the use of high ending
variety seeds of wheat in the states of Punjab Haryana Delhi Rajasthan and
selected districts of Uttar Pradesh.
• Growing crops using high yielding grains involves providing specific nutrients
regulated supply of water and protection from disease hence the use of
chemical fertilizers and pesticides and irrigational facilities also initiated with
the usage of high yielding varieties seeds.
• As a result production of wheat increase.
• Improved technology used in agriculture production is called pre harvest
technology.
• The role of doctor MS swaminathan agriculture scientist in implementing the
improved technology in Indian agriculture is significant.
• Hence he is called the father of green Revolution.
• He is honoured with the first world food prize in 1987.
• Government of India has conferred after his death the highest civilian award
Bharat Ratna to him in 2024
• In the initial stages of green revolution in prove technology was used only in wheat crop.
• Later with the success of the week the government encouraged pharmas to use high yielding
grains even in paddy , jowar, ragi, sugarcane and other crops.
• Steps were taken to spread the use throughout the country. There was a great progress in
agriculture production.
• By 1980 is India achieved self sufficiency in production of food grains.
• Pre harvest technology was utilised by rich and large cultivators.
• Poor farmers or small farmers could not utilize the high yield variety seeds and chemical fertilizers.
• Hans government subsidize the fertilizers equipments etc so the poor marginal or small farmers
can also avail the benefits of improved technology.
• Governments provide loans to the farmers through banks and cooperative organisation at low
interested.
• As a result agricultural production increased.
• With the increase of agricultural production prices of agricultural products decreased and the
farmer could not recover their agriculture expenditure.
• In order to ensure good price for farmers agri markets were improved.
• Granaries and cold storage warehouse were constructed.
• The improve technology that is used to procure, process, market agriculture produce is called post
harvest technology.
• Bhoot pre harvest technology and post harvest technology has enabled green Revolution
• In order to solve the problems in agricultural sector referred sir may to promote organic and natural
farming in Indian agriculture.
• Nature friendly techniques of production are used.
• Government is making it supports to further incres agriculture production through this techniques.
This process is being referred to as second green revolution or perpetual green Revolution.
NITI Aayog
• National institution for transforming India was started on first January 2015 to replace
planning commission.
• It's objective include a 15 years road map, 7 years vision, strategy and action plan.
• Headed by the prime minister of the country.
• Day today administration is looked after by the vice chairman.
• chief executive officer will assist him.
Objectives
• To evolve a shared vision of national development priorities sector and strategies
with the active involvement of States.
• To faster cooperative federalism through structured support initiative send
mechanism with States on a continuous bases recognising that strong States make a
strong nation.
NITI Aayog's activities can be divided into 4 main
heads
• Policy and program framework
• Cooperative federalism
• Monitoring and evaluation
• Think tank and knowledge and innovation hub
