In this PPT, I have explained the following topics in detail. It will be helpful for teachers as well as students. Content covered: Economic System Types of Economic System Economic planning Goal of five year plans Problems faced by Indian Agriculture Solutions to solve problems faced by Indian Agriculture Problems under Green Revolution Importance of Subsidies Public and Private sectors in Indian Industrial Development Industrial Policy Resolution, 1956 Industrial License Industrial Concessions Small Scale Industries Trade policies: Import substitution Also meaning of Green Revolution

1. Indian Economy
1950-1990
Class XII
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2. Synopsis
1. Economic System
2. Types of Economic System
3. Economic planning
4. Goal of five year plans
5. Problems faced by Indian Agriculture
6. Solutions to solve problems faced by Indian Agriculture
7. Problems under Green Revolution
8. Importance of Subsidies
9. Public and Private sectors in Indian Industrial Development
10. Industrial Policy Resolution, 1956
11. Industrial License
12. Industrial Concessions
13. Small Scale Industries
14. Trade policies: Import substitution
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3. Economic System
• Economic system is a system of
production, resource allocation and
distribution of goods and services within a
society.
• It solves the central problems of the
economy.
• Central problems includes;
What to produce?
How to produce?
For whom to produce?
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4. Types of Economic System
1. Capitalist System: Under this, goods produced
are distributed among people according to
their purchasing power.
2. Socialist System: Under this, Government
decides what goods are to be produced for the
benefit of the entire society.
3. Mixed Economy System: Under this, some
goods are provided by the market and some
are provided by the Government.
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5. Economic Planning
• A system under which set of
targets are defined by
Central Authority of the
country which are to be
achieved within a specified
period of time, taking
resource consideration.
• It is based on the principles
of mixed economy and it
includes economic and social
areas of planning.
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6. Goals of five year plans
• Due to limited resources, a choice
has to be made in each plan to
give primary importance to
specific goals.
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• Growth refers to increase in the country’s capacity to produce the output of goods and services within the
country.
• Modernisation also includes changes in the social outlook such as the recognition that women should have
the same rights as men.
• Self reliance policy was considered a necessity in order to reduce our dependence on foreign countries to
avoid foreign interference.
• Equity ensures that the benefit of economic prosperity reaches the poor section instead of being enjoyed
only by the rich section.
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7. Problems faced by Indian Agriculture
• Disguised Unemployment: Meaning more then required people are working on a piece of land, which
reflected backwardness and poverty.
• Lack of Irrigation facilities: Indian agriculture was highly dependent on rainfall which was unpredictable.
• Lack of finance: Farmers were highly dependent on non-institutional sources like moneylenders who charged
them very high rate of interest.
• Lack of modern inputs: Inputs like chemical fertilizers, insecticides and pesticides was not used due to severe
poverty.
• Small and scattered holdings: It does not allow use of modern technology.
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8. Solutions to solve problems faced by Indian Agriculture
• Two reforms were introduced to solve the problems faced by Indian agriculturist:
1. Land Reforms: It is also termed as institutional reforms which means change in the
ownership of land holdings to achieve equity in agriculture. This reform focussed on
abolition of intermediaries and land ceiling.
a. Under this reform ownership rights were given to those who actually cultivate the soil.
b. Maximum size of land was fixed beyond that limit the land would be taken over by the
government.
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9. Solutions to solve problems faced by Indian Agriculture
• Two reforms were introduced to solve the problems faced by Indian agriculturist:
2. Technical Reforms: It is also termed as green revolution which means large increase in
production of food grains from the use of High Yielding Variety (HYV) seeds especially for
wheat and rice.
a. Use of HYV seeds required the use of fertiliser and pesticide in the correct quantities with
regular supply of water
b. This reform enabled the government to procure sufficient amount of food grains to build
a stock in case of food shortage.
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10. Problems under Green Revolution
• Increase in disparities between small and big farmers: Only big farmers could afford the
required inputs. Hence, they got the maximum benefit from green revolution and small
farmers suffered.
• Risk of Pest Attack: HYV seed crops were more prone to pest attack. Any small farmer who
adopted this technique could lose everything in a pest attack.
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Steps Taken by Government to solve the problems associated with Green Revolution :
1. 2.

11. Importance of Subsidies
• To encourage farmers to test the new
technology.
• To increase poor farmers purchasing power
of required inputs.
• To bring equity in agricultural sector.
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12. Public and Private sectors in Indian Industrial Development
• Lack of capital (money) to undertake
investment: As Indian industrialist did not
have the capital to invest, so public sector
played a major role in promoting
industrial sector.
• Growth with social justice: The decision to
develop the Indian Economy on socialist
lines led to the state controlling the
economy.
• Private sector acted as complimentary
unit: Public sector had complete control
on the core industries required for the
economic growth and private sector just
played a secondary role.
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13. Industrial Policy Resolution, 1956
• The IPR classified industries into three categories:
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Schedule A:
Industries
exclusively
owned by the
state.
Schedule B:
Industries
owned by both
the state &
private.
Schedule C:
Industries
exclusively
owned by the
private sector
through
License Raj.
• Industrial licensing policy means rules, regulations, principles, policies
and procedures laid down by government for regulating, developing and
controlling industrial undertakings in the country.

14. Industrial Licensing
• No new industry was allowed to be set up
unless a license was obtained from the
Government.
• The policy was used for promoting
industrialisation in backward regions because
it was easier to obtain a license if the industrial
unit was set up in an economically backward
area to promote regional equality.
• Even an existing industry had to obtain a
license for expanding or diversifying its
production.
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15. Industrial Concessions
• Industrial units were
given industrial
concessions such as tax
benefits and electricity at
a lower tariff to
encourage establishing
their units in the
backward regions of the
country.
• Industrial Concessions
promote regional
equality.
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16. Small Scale Industries (SSI)
• SSI, is defined with reference to the maximum investment allowed on the assets of a unit.
At present the maximum investment allowed is Rs 1 crore.
• SSI are more labour intensive and it generate more employment.
• Number of products are reserved for these industries.
• SSI also get concessions such as lower excise duty and bank loan at lower rates.
• In 1955, Karve committee saw the possibility of using Small Scale Industries for promoting
rural development.
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17. Trade Policy: Import Substitution
• Import substitution or inward looking trade strategy aims at replacing imports with
domestic production.
• Protection from imports can be done with the following tools.
1. Through tariffs, which are taxes on imported goods. They make imported goods more
expensive and discourage their use.
2. Through quotas, which specify the quantity of goods which can be imported.
• Both tools help in restricting imports and protect the domestic firm from foreign
competition.
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