CBSE Class 11 Economics Indian Economic Development Revision Notes Chapter 2

CBSE Class 11 Indian Economic Development Revision Notes Chapter 2 – Indian Economy 1950-1990

The economy of India has seen significant changes in the past few years that have led to the formation of action plans. Class 11 Indian Economic Development Chapter 2 Notes deal with the liberalisation of an open economy in India and explain the economic policies practised in the Indian economy from 1950 to 1990 that led to the liberalisation of the economy. These notes are prepared as per the latest CBSE Syllabus. As a result, reading these notes will help students develop a thorough understanding and perform better in exams.

Indian Economic Development Class 11 Chapter 2 Notes by Extramarks discuss the central authority’s economic planning to target development. Students looking to understand what the Indian economy looked like from 1950 to 1990 and its impact today will get conceptual clarity on the topic after going through these notes. These notes will give students an illustrative look into the topic and ease their study. 

Economics Class 11 Chapter 2 Notes

Chapter 2 Indian Economic Development Class 11 Notes contain accurate and concise points for revision of the various topics of the chapter. They discuss the causes and needs that led to the new economic reforms: liberalisation, privatisation and globalisation. These notes also cover the various policies undertaken by the Indian government and their effects on the economy. 

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Class 11 Economics Notes Chapter 2 – Capitalism

Chapter 2 Indian Economy 1950 to 1990 discusses the establishment of capitalism which was a significant economic change. This structure decided what goods and services would be produced in our country. Moreover, the flow of distribution and money were henceforth also planned based on demand and supply.

The capitalist economy is an economy in which the private sector owns, controls, and operates the means of production. Their main goal of production is to earn profits. As a result, the key questions of what to produce, how to produce, and for whom to produce are decided by the demand and supply market forces. The allocation of goods and services among the people is based on their purchasing power to buy goods and services and not on their needs.

Indian Economy 1950 to 1990 Class 11 Notes- Socialism

This chapter explains the function of socialism. A socialist economy is a form of an economic plan that takes care of the interest of society. It is where the government owns, controls, and operates the means of production. The government decides what to produce, how to produce, and for whom to produce according to society’s demands. Every decision-making process is guided by one factor: social welfare. Indian Economic Development Chapter 2 Class 11 Notes discuss this concept in detail to help young learners understand the Indian economy.

Notes of Chapter 2 Indian Economy Class 12- Five-Year Plan

This section discusses the changes brought by five-year plans formulated by the Indian government and outlines how it was done. The reasons behind India’s decision to make the economy open are elaborated here.  Moreover, an introduction of equity, GDP, production evaluation, self-reliance schemes, etc. is discussed. The five-year plan was introduced to attain the following goals: 

  1. Growth: 

The plan aimed to grow India’s capacity to generate goods and services within its borders. Economic growth can be defined as a rise in the country’s Gross Domestic Product (GDP). The GDP method is used for measuring an economy’s growth. The greater the GDP, the greater the general population’s ability to benefit from the country’s economic policies.

  1. Modernisation: 

The five-year plan aimed to adopt innovative production techniques by manufacturers to improve the overall output of goods and services. Inventions, innovation and technological improvement all play an essential role in the modernisation of the economy and increasing its productivity. The adoption of modern agricultural techniques to increase productivity is one such example.

  1. Self-reliance: 

Self-reliance refers to the use of a country’s own resources rather than purchasing resources from other countries to promote economic growth and modernisation. The five-year plan focused on using India’s resources rather than resources purchased from other countries to ensure economic growth and modernisation.

  1. Equity: 

The key idea behind introducing and implementing the five-year plan was to ensure that the advantages of economic progress were shared equally among the poor and not just the wealthy. As a result, every Indian would be able to meet his or her fundamental necessities, and there would be less inequality in the distribution of wealth. 

Class 11 Economics Chapter 2 Notes – Agriculture

This section deals with the economic deregulation of the agricultural sector. Essentials in the agriculture sector, problems related to agriculture, reforms needed in agriculture, market surplus, etc. are some of the other topics that are discussed.

India’s economic system and activity have always been built on its agricultural sector. It is a broad term that covers everything involved with growing crops and raising animals to give humans access to enough food and useful resources. However, Indian agriculture statistics trailed behind other nations in terms of both land and labour productivity. These factors contributed to this:

Institutional Problems – 

  • Faulty tenancy reforms: The land tenure system was riddled with flaws in India. The insecurity of tenants was one of the major issues, especially before independence, when absentee landlords and fraudulent land transfers occurred in many parts of the country.
  • Inadequate agricultural credit: The financing sources offered by institutions were insufficient to meet the needs of agricultural credit. Farmers had to continue relying on moneylenders for credit whenever they needed it. 
  • Holding capacity: It is predicted that the average holding size in India fell from 1.5 hectares in 1990-91 to 1.3 hectares in 2000-01. As a result, agricultural holdings were economically dispersed and small.

General Problems –

  • Population pressure on land: Areas with a higher population density had smaller farms. The higher demand for inorganic fertiliser was also associated with higher population density. As a result, as population density increased, farm revenue per hectare dropped.
  • Negligence of natural resources: When it came to agriculture, India failed to protect its natural resources and even exploited them. Only little was done to conserve natural resources, the majority of which were tied to irrigation. The stories of acute water shortages in the whole country and migration demonstrated the gravity of the situation.
  • Agricultural uncertainty: Indian agriculture had always been susceptible to insecurity as it was dependent on the monsoon weather for rain. As a result, the production of food grains and other crops varied greatly, making the prices of agricultural produce vary continuously. This created an element of insecurity in the country’s agricultural operations.

Technological Problems – 

  • Production technique: Farmers in India used outdated and inefficient farming methods and techniques. Only in recent years have Indian farmers embraced the latest and most efficient farming tools such as seed drills, steel ploughs, barrows, hoes, and so on.
  • Irrigation facilities were in short supply: The absence of guaranteed and regular water supply through artificial irrigation systems continued to be a problem for Indian agriculture. As a result, Indian farmers relied heavily on rainfall, which was neither consistent nor even.
  • Cropping pattern: Indicators of the development and diversification of the agricultural sector included the cropping pattern, which displayed the percentage of an area planted in different crops throughout time. As cash crop prices rose, more land was shifted away from food production to cash or commercial crops. This worsened the crisis of food shortage in the country.

Indian Economic Development Chapter 2 Notes – Economy Types

Apart from these topics, Class 11 Indian Economic Development Chapter 2 Notes contain a variety of sub-topics. It covers the meaning and nature of the economy and outsourcing. The three economic types, socialist, mixed and capitalist economies, are also discussed.

Students need quality notes for studying to score better marks in exams. For this purpose, Extramarks provides notes prepared by subject-matter experts. 

FAQs (Frequently Asked Questions)

1. What is a capitalist economy?

The capitalist economy is an economy in which the private sector owns, controls, and operates the means of production. Their main goal of production is to earn profits. Thus, supply and demand market forces govern the fundamental questions of what to make, how to produce, and for whom to produce. The allocation of goods and services among the people is based on their purchasing power to buy goods and services and not on their needs.

2. Explain some merits of a mixed economy.

Some merits of a mixed economy are discussed below:

  • A mixed economy gives a chance to the private sector to make a profit and contribute equally to the economic growth and development of the country.
  • It also ensures economic stability and development in a balanced way.
  • Since there is a constant battle between the public and private sectors, it leads to an increase in the overall productivity and income of the country.

3. Describe why India's economy needed reforms in 1990.

Controlling India’s growing budget deficit was the main reason for the country’s need for economic reforms. The government was in debt and lacked the funds to cover its expenses. The growing costs (inflation) also created issues for the general populace. In the end, the administration was left with no alternative but to request a $7 million loan from the International Monetary Fund (IMF). India was requested to liberalise its economy in return. Additionally, the Indian government has taken the initiative to support local industries and workers in becoming self-sufficient. As a result, the Indian government also unveiled the five-year plan as economic reform.

4. What is the subject of Chapter 2 of Economics Class 11?

“Indian Economic Development” is covered in Economics Chapter 2 of Class 11. Since it aids in developing a thorough understanding of the subject, beginning with its history, this chapter serves as the foundational or base study material for pupils. It is expected of Class 11 students to submit well-reasoned answers in their exams, so they must have a clear understanding of all the chapter’s issues and subtopics. For a thorough grasp of Chapter 2, consult Extramarks’ Class 11 Economics Chapter 2 Revision Notes.

5. Why is agriculture important in the Indian economy according to Chapter 2 of Economics Class 11?

Apart from being the major source for producing food grains and other edible items for living beings to sustain and grow, agriculture plays a significant role in boosting the country’s economy. In a developing nation like India, it forms the base of the economy i.e. the majority of earnings generate from it. Hence, it is important for generating employment for many people and helps improve trade practices and industrial development.

6. What were the goals of the five-year plan?

Indian economy introduced the five-year plan to control the money flow. The goals of the five-year plans were as follows:

  • Growth: It is aimed to grow India’s capacity to generate goods and services within its borders.
  • Modernisation: The five-year plan aimed to adopt innovative production techniques by manufacturers to improve the overall output of goods and services. 
  • Self-reliance: The five-year plan focused on using India’s resources rather than resources purchased from other countries to ensure economic growth and modernisation.
  • Equity: The key idea behind introducing and implementing the five-year plan was to ensure that the advantages of economic progress were shared equally among the poor and not just the wealthy.