Students can download Class 8 Economics Chapter 3 National Income and Sectoral Aspects of The Indian Economy Important Questions, KSEEB Class 8 Social Science Important Questions and Answers helps you to revise the complete Karnataka State Board Syllabus and to clear all their doubts, score well in final exams.
Karnataka State Syllabus Class 8 Social Science Economics Important Questions Chapter 3 National Income and Sectoral Aspects of The Indian Economy
What is national income?
The total value of goods and services produced in a country annually is called national income. It is the total income accruing to a country from economic activities in a year’s time.
Define national income.
Simon Kuznets has defined national income as “the net output of commodities and services flowing during the year from the country’s productive system into the hands of the ultimate consumers”.
Why is it important to measure the changes in national income?
Measuring the level and rate of growth of national income is important for observing
- The rate of economic growth
- Changes in average living standard
- Changes in the distribution of income.
What is per capita income?
The average income of the people of a country in a particular year is called per capita income for that year.
How is the per capita income of a country calculated?
The per capita income is calculated by dividing the national income by the population of the country in a particular year.
If the total income of a family of 5 members in 2015 was Rs. 567890, calculate the per capita income of the members of the family.
Per capita income
What does per capita income indicate?
Per capita income indicates the average income and the standard of living of the people.
Why is per capita income not a reliable measure of development?
Though per capita income is the average income of the people of the country, it does not indicate how that income is distributed among the people. If the income is not distributed equally among the people, there will not be any improvement in the standard of living of the people with just an increase in the per capita income. Hence per capita income is not a reliable indicator of development.
Name the three sectors of an economy.
The three sectors of an economy are
- Primary sector (agriculture)
- Secondary sector (manufacturing)
- Tertiary sector (services).
What is primary sector? What is its importance?
The primary sector is the sector that consists of all nature-based activities like agriculture and allied activities like sericulture, horticulture, animal husbandry, poultry, fishery, floriculture, etc. Agriculture is the predominant activity in the primary sector and had till recently the largest share in the national income. Agriculture is the backbone of our economy.
What is secondary sector? What is its importance?
Secondary sector is the sector that converts raw materials into finished goods. It is also called manufacturing sector. It includes all industrial activities along with construction and power generation.
Industries contribute nearly one-third of national income. They have helped in building the basic infrastructure like transportation, power and communication besides producing a wide array of consumer goods.
What is tertiary sector? What is its importance?
The tertiary sector or services sector is the sector of the economy that principally provides services instead of end products. The tertiary sector includes education, telecommunication, hospitals, hotels, banking, insurance, accounting, etc.
The tertiary sector has emerged as the engine of economic growth. It is the major contributor (59%) to the national income and employs about 28% of the total workforce. It is earning valuable foreign exchange for the country. Services constitute a major item of our exports.
Describe the importance of small-scale industries.
State how small industries are helpful for the growth of a country like India.
Increase in the activity of small-scale industries is considered essential for economic development and growth of the country.
- Employment generation: Small-scale industries are labour-intensive. Hence they are a major source of employment generation.
- Mobilisation of resources and entrepreneurial skill: Small-scale industries have succeeded in mobilising savings and entrepreneurial skill in rural and semi-urban areas.
- Equitable distribution of income: Small entrepreneurs help in redistribution of wealth and income.
- Regional dispersion of industries: Concentration of large industries in cities leads to problems such as over-crowding, pollution, slums, etc. But small industries can be located in small towns or rural areas, thus bringing about dispersion of industries across the country.
- Development of technology: Small-scale industries have high capacity to generate and absorb innovations. They provide ample opportunities for the development and adoption of technology. They play an important role in commercialising new inventions and products and in transfer of technology.
- Export promotion: Small-scale industries also contribute to exports and foreign exchange earnings. They contribute about 40% of India’s total exports.
Write a note on small-scale industries in India.
Small-scale industries play a major role in the economic development of India. According to the Annual Report of the MSME Department, there were 488.46 lakh enterprises in the country . in 2013-14 employing 11.14 crore people, with an investment of Rs. 13,63,700 crores.
Their share of the national income during 2013-14 was 7.8%. They accounted for 35% of the gross value of the output in the manufacturing sector, about 80% of the total industrial employment and 40% of the total exports of the country.
What are the problems of small-scale industries?
Small-scale industries in India face a number of problems. They are:
- Non-availability of raw materials: Small-scale, industries in India suffer from lack of raw materials, vital components and equipment.
- Problem of finance: Small enterprises do not have adequate capital. Their borrowing capacity is also limited.
- Low technical skill: Technical skill and managerial ability are low in small enterprises. They are not in a position to adopt the latest technology due to financial constraints.
- Marketing problems: Small enterprises cannot engage in organised marketing or aggressive advertising as large enterprises do. They are also not in a position to conduct market research to promote sales.
- Competition from large industries: In many cases large industries work to the detriment of small industries either through aggressive marketing or procurement of inputs making the small industries helpless.
Mention some of the measures taken by the government to help small-scale industries.
Startup India, Stand-Up India, Mudra Bank, etc., are some of the measures taken by the government to help small-scale industries.
What are the reasons for the decline in the size of agricultural holdings in India?
The rapid increase in population, subdivision and fragmentation of land holdings and the changed family system from joint to nuclear families in rural India has made the size of holdings smaller and smaller. With the increase in the population dependent on agriculture, the holdings get subdivided into smaller pieces.
In addition, the laws of inheritance provide for equal share of the ancestral property to all the children. As a result the land gets subdivided among the heirs on the death of the owner of the land. With the decline in the joint family system, lands jointly held previously are being subdivided.
Explain the causes of agricultural distress.
Examine the reasons for crisis in Indian agriculture.
The major causes of agricultural distress are:
1. Uneconomic size of land holdings:
With the increase in the population dependent on agriculture, the holdings get subdivided into smaller pieces. Small holdings (1-2 hectares) and marginal holdings (less than 1 hectare) account for nearly 85% of all land holdings. Further, the average size of holdings is just 1.16 hectares. It is not possible to take up any kind of development work or adopt modern methods of production on such small pieces of land. As a result, productivity is low.
2. High population pressure:
With many workers working on small pieces of land, production and income per head are very low. Many small and marginal farmers also work as agricultural labourers. . c) Rain-fed farming and recurrence of droughts: Agriculture in India depends on rainfall which is uncertain, erratic and inadequate. Only 30% of agricultural land is irrigated and the rest 70% depends only on rainfall. Thus, lack of irrigation and frequent droughts have impoverished the farmers.
3. Partial impact of the green revolution:
The green revolution had focused on rice and wheat production on irrigated lands. It did not help farmers in dry regions. Small and marginal farmers could not adopt the new technology due to cost constraints. Therefore a large number of farmers continue to remain poor and backward.
4. Decline in public investment in irrigation and other related infrastructure:
The slowing down of agricultural growth is attributed mainly to the decline in public investment in irrigation.
5. Inadequate credit from institutional sources:
Supply of credit to the agricultural sector from formal sources like banks and cooperatives has been inadequate leading to greater borrowing from informal sources at high interest rates.
6. Inability to get remunerative prices:
Marketing of agricultural produce is plagued with numerous problems. Farmers do not get good prices, payments are not made on time and many deductions are made from the payments, leaving the farmers with very little. The price support policy of the government has also not worked well.
Discuss the measures to overcome agricultural crisis in India.
Measures to overcome the agricultural crisis in India are:
1. Increasing public investment:
Increasing public investment in drought management, water harvesting, research in new varieties of seeds, new cultivation methods that use less water and retain soil fertility, training farmers in efficient crop production practices are some of the measures that could help overcome the crisis in agriculture.
2. Expanding credit availability:
Easy and adequate flow of credit to small and marginal farmers should be ensured.
3. Marketing reforms:
Farmers should be guaranteed remunerative prices for their produce. For this purpose markets and marketing infrastructure need to be strengthened.
4. Crop insurance:
An insurance scheme that covers and compensates the losses of farmers against all types of risks needs to be put in place.
5. Counselling and moral support:
There is a need to set up counselling centres at the village level to provide moral support to distressed farmers so that they do not take any extreme step.
6. Regulating private money lenders:
There is a need to regulate the activities of money lenders so that they do not exploit or oppress the poor farmers who have borrowed from them.
Multiple Choice Questions
The total value of goods and services produced annually in a country is called
(A) per capita income
(B) national income
(C) gross national product
(D) gross domestic product.
(B) national income
Banking and finance come under
(A) primary sector
(B) secondary sector
(C) manufacturing sector
(D) tertiary sector.
(D) tertiary sector.
Raw materials are converted into finished products in this sector
For an enterprise in the manufacturing sector to be considered a micro enterprise, investment in plant and machinery should be
(A) less than Rs. 25 lakhs
(B) less than Rs. 10 lakhs
(C) Rs. 25 lakhs to Rs. 5 crores
(D) Rs. 5 crores to Rs. 10 crores.
(A) less than Rs. 25 lakhs
Fill Up In The Blanks
- Per capita income = National income divided by population
- The agency responsible for estimation of national income in India is Central Statistical Organisation
- The highest share in national income today is from tertiary/services sector.
- Small-scale industries are defined in terms of investment in plant, machinery and equipment.
- Indian agriculture is said to be gamble with monsoons.
- Extent of irrigated area in India is about 30 per cent of cultivated area.
- The tertiary sector is also known as services sector.
- Small and marginal farmers together account for 85 per cent of all holdings.