Economy

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Cotton Cloth
Types of Utility
Form utility
If the physical form of a commodity
is changed, its utility may increase.
Eg. Cotton increases, if it is converted
into clothes.
Place utility Transportation
If a commodity is transported from

one place to another,
its utility may increase.
Eg. If rice transported to
Tamilnadu to Kerala,
its utility will be more.
Warehouse
Time utility
If the commodity is stored for future usage,
its utility may increase.
Eg. Agricultural commodities like Paddy,
Wheat, etc. are stored for the regular uses of
consumersthroughout the year.
Mining Forestry
Indian Economy is a Mixed
Economy. Private and Public
Sector are existing together.
Types of Production
There are three types of production
1. Primary production
2. Secondary Production
3. Tertiary or Service Production
1. Primary Production
Agriculture
Primary production is carried out by
‘extractive’ industries like agriculture, forestry,
2. Secondary Production
fishing, mining and oil extraction. These
industries are engaged in such activities as This includes production in
manufacturing industry, turning out
extracting the gifts of nature from the earth’s
semi-finished and finished goods from raw
surface, from beneath the earth’s surface and
materials and intermediate goods, conversion of
from the oceans.
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flour into bread or iron ore into finished steel. 3. Tertiary Production
They are generally described as manufacturing
Industries in the tertiary sector produce
and construction industries, such as the
all those services which enable the finished goods
manufacture of cars, furnishing, clothing and
to be put in the hands of consumers. In fact, these
chemicals, as also engineering and building.
services are supplied to the firms in all types of
industry and directly to consumers. Examples
cover distributive traders, banking, insurance,
transport and communications. Government
services, such as law, administration, education,
health and defence, are also included.
Defence
Engineering & Building
Banking Education
Cotton Industry The most to the Gross

Domestic Product of our
country is contributed by
the tertiary sector.
Example: Primary sector and Secondary
sector Production
Factors of Production
Cotton (Primary sector) – Cotton Human activity can be broken down
Industry (Secondary Sector) = Cloth into two components, production and
Production consumption. When there is production, a
process of transformation takes place. Inputs
Iron ore (Primary sector) – Iron Industry
are converted into an output. The inputs are
(Secondary sector) = Material Production
classified and referred to as land, labour, and
Wheat flour (Primary sector) – Bread capital. Collectively the inputs are called factors
Factory (Secondary Sector) = Food of production.
Production When the factors of production are
combined in order to produce something, a
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fourth factor is required. Goods and services

do not produce themselves but need some
conscious thought process in order to plan
and implement manufacture. This thought
process is often called Entrepreneurship and
Organization.
Factors of production
1. Primary Factors and
2. Derived Factors.
Sea
Primary factors are land and labour.
These are naturally given and without them no
goods can be produced.

Derived factors are Capital and
Organization. These derived factors, when
combined with the primary factors of
production, raise total production.
FACTORS OF PRODUCTION
Land
Land Labour Capital Organization
Characteristics of Land
1. Land is a Free Gift of Nature
Land
Man has to make efforts in order to
Land as a factor of production refers
acquire other factors of production. But to
to all those natural resources or gifts of nature
acquire land no human efforts are needed. Land
which are provided free to man. It includes
is not the outcome of human labour. Rather, it
within itself several things such as land surface,
existed even long before the evolution of man.
air, water, minerals, forests, rivers, lakes, seas,
mountain, climate, and weather. Thus, land 2. Land is fixed in supply
includes all things that are not made by man. The total quantity of land does not
undergo any change. It is limited and cannot be
Land : Land can take on various increased or decreased with human efforts. No
forms,from agricultural land to alteration can be made in the surface area of land.
commercial real estate to the resources 3. Land is imperishable

available from a particular piece of Land. All man-made things are perishable and
these may even go out of existence. But land is
indestructible. Thus it cannot go out of existence.
It is not destructible.
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4. Land is a Primary Factor of Production:

In any kind of production process,
we have to start with land. For example, in
industries, it helps to provide raw materials, and
in agriculture, crops are produced on land.
5. Land is Immovable:
It cannot be transported from one place
to another. For instance, no portion of India’s
surface can be transported to some other Machinery Work
country.
6. Land has some Original Indestructible
Powers
There are some original and
indestructible powers of land, which a man
cannot destroy. Its fertility may be varied but it
cannot be destroyed completely.
7. Land Differs in Fertility
Fertility of land differs on different
pieces of land. One piece of land may produce Physical Work
more and the other less.
As a gift of nature, the initial supply
price of land is zero. However, when used in
production, it becomes scarce. Therefore, it
fetches a price accordingly.
Labour
Labour is the human input into the
production process. Alfred Marshall defines Mind Work
labour as, ‘the use of body or mind, partly or
wholly, with a view to secure an income apart Characteristics of Labour
from the pleasure derived from the work’
• Labour is more perishable than other factors
of production. It means labour cannot be
Adamsmith is
stored. The labour of an unemployed worker
known as Father of
is lost forever for that day when he does not
Economics and his
work. Labour can neither be postponed nor
Economics is wealth
accumulated for the next day. It will perish.
Economics.He wrote two
Once time is lost, it is lost forever.
classic works,"The Theory of Moral
sentiments(1759)",and "An inquiry into •
Labour is an active factor of production.
the nature and causes of the wealth of Neither land nor capital can yield much
Nations (1776)". without labour.
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•
Labour is not homogeneous. Skill and
dexterity vary from person to person.
•
Labour cannot be separated from the
labourer.
• Labour is mobile. Man moves from one

place to another from a low paid occupation
to a high paid occupation.
Bike Manufacturing Unit
•
Individual labour has only limited
Example : A Tailor stitches a shirt in
bargaining power. He cannot fight
full. In the case of Garments exporters, cutting
with his employer for a rise in wages or
of cloth, stitching of hands, body, collars, holes
improvement in work-place conditions.
However, when workers combine to form for buttons, stitching of buttons etc., are done
trade unions, the bargaining power of independently by different workers. Therefore,
labour increases. they are combining the parts into a whole shirt.
Division of Labour
The concept ‘Division of Labour’ was
introduced by the Adam Smith in his book ‘An
enquiry into the nature and causes of wealth of
nations’.
Division of labour means dividing the

Tailor
process of production into distinct and several
component processes and assigning each
component in the hands of a labour or a set of
labourers, who are specialists in that particular
process.
Garments
Activity:
Students are asked to visit the nearest private

tailoring shop and Garments Export Industry.
Teacher and students are to discuss about the

process of making dresses in the tailoring
Car Manufacturing Unit shop and Garments Export Industry.
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Merits of division of labour

• It improves efficiency of labour when labour
repeats doing the same tasks.
• Facilities the use of machinery in production,

resulting in inventions. Ex. More’s Telegraphic
Codes.
• Time and Materials are put to the best and

Machinery
most efficient use.
Demerits of division of labour

• Repetition of the same task makes labour to
feel that the work is monotonous and stale. It
kills the humanity in him.
• Narrow specialization reduces the possibility

of labour to find alternative avenues of
employment. This results in increased
unemployment. Factory
• Reduce the growth of handicrafts and the
Forms of capital
worker loses the satisfaction of having made
a commodity in full. 1. Physical Capital or Material Resources
Ex. Machinery, tools, buildings, etc.
Capital 2. Money capital or Monetary resources
Capital is the man made physical goods used Ex. Bank deposits, shares and securities, etc.
to produce other goods and services. In the ordinary
3. Human capital or Human Resources
language, capital means money. In economics,
Ex. Investments in education, training and
capital refers to that part of man-made wealth which
health
is used for the further production of wealth. All
wealth is not capital but all capital is wealth.
Characteristics of Capital
According to Marshall, ’Capital consists of those • Capital is a passive factor of production
kinds of wealth other than free gifts of nature,
which yield income’. • Capital is man-made
•
Capital is not an indispensable factor of
production
• Capital has the highest mobility
• Capital is productive
• Capital lasts over time
• Capital involves present sacrifice to get future
benefits
Office
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Entrepreneur Utility means want satisfying power of a
An entrepreneur is a person who product.

combines the different factors of production Utilities are in the nature of form utility,
(land, labour and capital), in the right proportion time utility and place utility.
and initiates the process of production and also
bears the risk involved in it. There are three types of production Primary
production, Secondary Production,
The entrepreneur is also called
‘Organizer’. In, modern times, an entrepreneur Tertiary or Service Production
is called ‘the changing agent of the society’. He is Inputs are called factors of production.
not only responsible for producing the socially
desirable output but also to increase the social Factors of Production Land, Labour,
welfare. Capital, Organization
The concept ‘Division of Labour’ was
introduced by the Father of Economics
Adam Smith in his book ‘An enquiry into
the nature and causes of wealth of nations’
Evaluation
Characteristics of Entrepreneur I. Choose the correct answer

• Identifying profitable investible opportunities
1. Production refers to
• Deciding the location of the production unit
a) destruction of utility
• Making innovations b) creation of utilities
• Deciding the reward payment c) exchange value
• Taking risks and facing uncertainties d) none of these
Activity: 2 2. Utilities are in the nature of
Students are asked to visit some a) form utility b) time utility

entrepreneurs in their nearest home town and c) place utility d) all of these
collect the information of his businesses.
3. -------- is carried out by extractive industries.
Teacher and students discuss about the
a) secondary production
entrepreneurs.
b) primary production
WRAP UP c) tertiary production
d) service production
Production is a process of combining
4. Primary factors are
various material inputs and immaterial inputs
a) land, capital b) capital, labour
in order to make something for consumption
c) land, labour d) none of these
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5. The entrepreneur is also called 4. Describe the characteristics of capital.

a) exchanger b) Agent 5. What are the functions of entrepreneur?.
c) organizer d) communicator
VI. Activity and Project
II. Fill in the blanks 1. Students are asked to prepare a chart
1. ---------- means want satisfying power of a
containing dummy images of primary,
product. secondary and tertiary sectors images.
2. Derived factors are ------------- and -------.
2. Students are asked to visit some local
3. ----------- is a fixed in supply.
farmers and to discuss about the land and its
4. --------- is the human input into the
characteristics. Collect some photographs
production process. of land and make a album.
5. --------- is the man made physical goods
used to produce other goods and services.
VII. Life skills:
III. Match the following 1. Students to know about the characteristics
1. Primary production - Adamsmith of entrepreneur , Set up your classroom
like a industry. Some Students are asked to
2. Time utility - fishing, mining
act like a businessman , Do the industries
3. Wealth of nation - entrepreneur
activities. Teacher and students together
4. Human capital - stored for future
discuss about the entrepreneur and their
5. Innovator - education, health
important of development of society.
IV. Give short answer :
1. What is production?. Glossary
2. What is utility?. 1. Production Manufacture உற்பத்தி
3. Name the types of utility. 2. Utility Usefulness பயன்பாடு
4. Name the types of production. 3. Organization Firm நிறுவனம்
5. What are the factors of production?
4. Entrepreneur Businessman த�ொழில்
6. Define Labour
முனைவ�ோர்
7. Define Division of labour.
5. Factors Component காரணிகள்
8. Write the forms of capital.
9. Who is the changing agent of the society?.
6. Division Dividing பகுப்பு
10. Write the three characteristics of entrepreneur?. 7. Resources Assets வளங்கள்
V. Give brief answer.

1. Explain the types of production? Reference
H.L.Ahuja-Principles of Micro Economics
2. What is land ? what are the characteristics of land?
K.P.M.Sundharam-Business Economics
3. E
xplain the merits and demerits of division
K.K.Dewett-Modern Economic Theory
of labour.
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Unit - 1
Money, Savings
And Investments
"Learning gives creativity, creativity leads to thinking, thinking

provides knowledge, knowledge makes you great".
–A.P.J. Abdul Kalam
Learning Objectives
▶ To know about the Evolution of Money.

▶ To know about the value, nature, function, and importance of money.
▶ To understand about Savings and Investments.
▶ To know about the black money.
Introduction Evolution of Money

Money is a fascinating subject and full The word Money is derived from Roman
of curiosities. It is important to capture this word “Moneta Juno”. It is the roman goddesses
element for the students. The history of money and the republic money of roman empire. The
and how various forms were used at different Indian rupee is derived from Sanskrit word
times is an interesting story. Modern forms of ‘Rupya’ which means silver coin.Today we use
money are linked to the banking system. paper notes, coins as money. But the evolution
of this stage has not happened overnight. It took
Money is a fundamental discovery,
thousands of years to reach such a stage. There
which has eased the day to day transactions,
are many stages of evolution of money. The
valuing goods and services and has allowed earliest and primitive stage is Barter system.
us to store the wealth and trade in future.
“Money is anything which is widely accepted Barter system
in payment for goods or in discharge of other Barter system is exchanging goods
business obligations” Robertson. Money in for goods without the use of money in the
some form, has been part of human history primitive stage. A barter system is an old
for atleast the last 3000 years Before that time, method of exchange. This system has been
it is assumed that a system of bartering was used for centuries and long before money
likely used. was invented. People exchanged services and
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goods for other services and goods in return. Commodity Money

The value of bartering items can be negotiated
In the earliest period of human
with the other party. Bartering doesn’t involve
money which is one of the advantages. civilization, any commodity that was generally
demanded and chosen by common consent
Hence Barter system had many
deficiencies like, was used as money. Goods like furs, skins,
salt, rice, wheat, utensils, weapons etc. were
1. Lack of double coincidence of wants,
commonly used as money. Such exchange
2. Common measure of value
of goods for goods was known as ‘Barter
3. Indivisibility of commodities
Exchange’.
4. Difficulties of storing wealth
Metallic Money
Some of the major stages With progress of human civilization,
through which money has
commodity money changed into metallic
evolved are as follows
money. Metals like gold, silver, copper, etc.
Commodity Money, Metallic Money,
were used as they could be easily handled and
Paper Money, Credit Money, Near Money and
recent forms of Money. Money has evolved their quantity can be easily ascertained. It
through different stages according to the was the main form of money throughout the
time, place and circumstances. major portion of recorded history.
During the ancient me........

BARTER SYSTEM:
Goods and Services are traded in exchange for other good.
Barter system
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Evolution of Money
Evolution of Money
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History of Metallic Money

The precious metals especially gold, silver, bronze were used for metallic money. The
standard weight and fineness of metal particularly gold and silver with a seal on it became
medium of exchange. They were of different denomination easily divisible, portable and were
convenient in making payment.
King Midas of Lydia innovated metal coin in the 8th century BC (BCE) by the ancient
historian Herodotus. But gold coins were in use in india many centuries than in Lydia.
The earliest issuers of coins in the world are the ancient Indians along with Chinese and
lydians from the middle east. The first time Indian coins were minted in the 6th century BC
(BCE) by the Mahajanpadas known as Puranas, Karshapanas or Panas.
The Mauryas came up with the Punch Marked Coins minting of silver, gold copper or
lead and Indo-Greek Kushan kings introduced the Greek custom of engraving portraits on
the coins. Turkish sultans of Delhi has replaced the royal designs of Indian kings with Islamic
Calligraphy by the 12th century AD (CE). The currency was made up of gold, silver and copper
known as Tanka and lower valued coin known as Jittals.
The Mugual Empire from 1526 AD consolidate the monetary system for the entire empire.
In this era evolution of rupee occurred with Sher Shah Suri defeated Humayun and issued a
silver coin of 178 gms known as rupiya and was divided into 40 copper pieces or paisa and
during the whole Mugual period silver coin remained in use. During the British East India
company i.e. 1600, the mughal currency remained popular but in 1717 AD, Farrukhsiyar the
Mughal Emperor gave permission to the Britishes to coin Mughal Money at the Bombay mint.
The British gold coins were termed as Carolina, the silver coins as Angelina, the copper coins
as cupperoon and the tin coins as tinny.
METALIC MONEY
Maurya Maurya Karshapanas Delhi Sultan
Delhi Sultan Tanka - Shershasuri Shersha Suri Coin Maurya
Metallic Money
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Paper Money
It was found inconvenient as well as Reserve Bank of India

dangerous to carry gold and silver coins Credit Money or Bank Money
from place to place. So, invention of paper Emergence of
money marked a very important stage in the credit money took
development of money. The development of place almost side
paper money started on the basis of storage by side with that
of gold and the receipts were issued by the of paper money.
goldsmiths for these storages. This receipts of People keep a
part of their cash
goldsmiths were a substitute for money and
as deposits with
became paper money. Paper money is regulated
banks, which they
and controlled by Central bank of the country can withdraw at their convenience through
(Reserve Bank of India). At present, a very large cheques. The cheque (known as credit money
part of money consists mainly of currency notes or bank money), itself, is not money, but it
or paper money issued by the central bank. performs the same as functions of money.
ACTIVITY: 1 Near Money

Fill up the following Table: The final stage in the evolution of money
has been the use of bills of exchange, treasury
Sl.No. Name in the Name in bills, bonds, debentures, savings certificate
Country Currency etc.
1 India
2 Germany Recent forms of Money
3 Japan
Plastic Money
4 Singapore The latest type of money is plastic money
5 Malaysia in the form of Credit cards and Debit cards.
They aim for cashless transactions.
6 Saudi Arabia
7 USA
8 UK
9 Sri lanka
10 Pakistan
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E-Money
Symbol of Rupee
Electronic Money is money which exists
The Indian Rupee
in banking computer systems and is available
symbol designed by
for transactions through electronic system.
M r. Ud ay a k u m a r,
Online Banking (Net Banking) Villupuram Dist Tamil
O n l i n e Nadu. It was approved by the Government of
Banking, also India on 15-July-2010
known as internet
banking is an
electronic payment The value of money is of two types
system that 1. Internal value of money
enables customers 2. External value of money
of a bank or other
financial institutions to conduct a range of The Internal value of money refers to the
financial transactions through website. purchasing power of money overdomestic
goods and services.The External value of
E-Banking money refers to the purchasing power of
Electronic money over foreign goods and services.
banking, also
known as National ACTIVITY: 3
Electronic Funds
Transfer (NEFT), • Students to know about the value of
is simply the use of money,
electronic means • Set up your classroom like a shop or
to transfer funds market
directly from one account to another rather
• Students are asked to purchase some
than by cheque or cash.
commodities from the shop
ACTIVITY: 2 • Do the market activities
• Prepare the duplicate model of different • Teacher and students together discuss
stages of Money, like Commodity the value of money
money, Metal money, Plastic Money,
etc.(including Barter System)
• Give the models to the each group Nature of Money
students.
There has been lot of controversy and
• Teacher and students discuss about the confusion over the meaning and nature of
different stages of money money(Scitovsky). “Money is a difficult
concept to define, partly because it fulfils
Value of Money not one but three functions, each of them
providing a criterion of moneyness those of
Value of money is meant the purchasing a unit of account, a medium of exchange,
power of money over goods and services and a store of value”. Sir John Hicks, say that
in a country. Thus it is related to the price “Money is defined by its functions, anything
level of goods and services. But the relation is money which is used as money, “Money is
between the value of money and price level is what money does”.
an inverse one.
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These are the functional definitions of ii) S tore of value or store of

money because they define money in terms purchasing power
of the functions it performs.Some economists Savings were discouraged under barter
define money in legal terms saying that system as some commodities are perishable.
“anything which state declares as money The introduction of money has helped to save
is money”. Such money possesses general it for future as it is not perishable.
acceptability and has the legal power to
discharge debts. But people may not accept iii) T
ransfer of value or transfer
legal money by refusing to sell goods and of purchasing power
services against the payments of legal tender
Money makes the exchange of goods to
money.On the otherhand, they may accept
distant places as well as abroad possible. It was
some other things as money winch are not
therefore felt necessary to transfer purchasing
legally defined as money in discharge of
power from one place to another.
debts. This may circulate freely.
Contingent functions
Functions of Money 1. Basis of credit
Functions of money are classified 2. Increase productivity of capital
into Primary or Main function, Secondary
3. Measurement and Distribution of National
function and Contingent function.
Income
Primary or main functions Hots
The important functions of money If there is no invention of money - imagine.
performed in very economy are classified
under main functions:-
Inflation and Deflation
i) M
edium of exchange or means Inflation refers to the prices
of payment are rising, the value of money
will fall.
Money is used to buy the goods and
services. Deflation refers to the
prices are falling, the value of money will rise.
ii) M
easure of value
All the values are expressed in terms of Savings in Banks
money it is easier to determine the rate of and Investments
exchange between various type of goods and
services. Savings
Secondary functions Savings are defined

as the part of consumer’s
The three important of secondary disposable income which
functions are is not used for current
consumption, rather
i) Standard of deferred payment kept aside for future use.
There are several ways
Money helps the future payments too.
through which a person can save money. The
A borrower borrowing today places himself
banking facilitates saving money through
under an obligation to pay a specified sum of
various forms of accounts.
money on some specified future date.
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SAVINGS ou will be more comfortable in

• Y
retirement.
• Save today for better tommarow
Intensity to save among the
students
• Teach them about taxes and accounting.
• I nvolve them in grown-up money
decisions.
1. Student Savings Account • Encourage them to apply for scholarship.
There are savings accounts some banks elp them budget and apply for student
• H
offer specifically for young people enrolled in loans.
high school or college, and they main feature • Teach them personal savings.
more flexible terms such as lower minimum Encourage them to open a student Sanchayeka
balance requirements.
Scheme.
2. Savings Deposits Investments
Savings deposits are opened by customers
to save the part of their current income. The The process of investing something is
customers can withdraw their money from known as an investment. It could be anything,
their accounts when they require it. The bank i.e. money, time efforts or other resources that
also gives a small amount of interest to the you exchange to earn returns in future.
money in the saving deposits.
3. Current Account Deposit
Current accounts are generally opened by
business firms, traders and public authorities.
The current accounts help in frequent banking
transactions as they are repayable on demand.
4. Fixed Deposits
Fixed deposits accounts are meant for
investors who want their principle to be safe Investment can be made in different
and yield them fixed yields. The fixed deposits investment vehicles like,
are also called as Term deposit as, normally, 1. Stock
they are fixed for specified period. 2. Bonds
3. Mutual funds
Benefits of Savings 4. Commodity futures
• You will be financially independent 5. Insurance
sooner. 6. Annuities
ou would not have to worry any
• Y 7. Deposit account or any other securities or
unforeseen expenses. assets
• I n future, you will have financial backup An investment always comes with risks of
in place if you lose your job. losing money, but it is also true that you can
reap more money with the same investment
ou will be prepared if your circumstances
• Y
vehicle. It has a productive nature that helps
change.
in the economic growth of the country.
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Comparison of Savings and Investments

Basis for comparison Savings Investments
Meaning Savings represents that part of Investment refers to the process
the person’s income which is of investing funds in capital asset,
not used for consumption with a view to generate returns
Purpose Savings are made a fulfil short Investment is made to provide
term or urgent requirements returns and help in capital forma-
tion
Risk Low or negligible Very high
Returns No or Less Comparatively high
Liquity Highly liquid Less liquid
Black Money 7. Distribution of scarce resource

8. Effects on production.
Black Money is any
money on which it is not
paid to the government. Demonetization
Black Money is money
InIndia,On8-November-2016,
earned through any
illegal activity controlled the Government of India announced
by country regulations. demonetization of all `500 and
Black money proceeds `1000 bank notes against Black Money.
are usually received in Black Money
cash from underground Recent steps against Black Money
economic activity and, as such, are not taxed. 1 Under pressure from India and other
The black money is accumulated by the countries, Switzerland has made key
criminals, smugglers, hoarders, tax-evaders changes in its local laws governing assist
and other anti-social elements of the society. foreign allegedly stashed in Swiss Banks.
In India, black money is funds earned in the 2 Special Investigation Team appointed by
black market, on which income and other government on the directions of Supreme
taxes have not been paid.The total amount Court on black money.
of black money deposited in foreign banks 3 Demonetization
by Indians is unknown. The root cause for
Some Legislative Framework in
the increasing rate of black money in the
India against to Black Money
country is the lack of strict punishments for
the offenders. 1 Prevention of money laundering act 2002
Effects of Black Money on economy 2 Lokpal and Lokayukta act
3. Prevention of corruption act- 1988
1. Dual economy
4. The undisclosed foreign Income and Asset
2. Tax evasion, thereby loss of revenue to government.
Bill(Imposition of Tax) 2015
3. Undermining equity 5. B enami transactions prohibition act 1988
4. Widening gap between the rich and poor amended in 2016
5. Lavish consumption spending 6. T he Real Estate (Regulation and
6. Distortion of production pattern Development) Act, 2016
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Recap
■ The word Money is derived from Roman word “Moneta Juno”.
■ Barter System - Men exchanged goods for goods without the use of Money.
■ S ome of the major stages through which money has evolved are Commodity Money, Metallic
Money, Paper Money, Credit Money, Near Money and recent forms of Money.
■ Value of money is meant the purchasing power of money over goods and services in a country.
■ Money is defined by its functions: anything is money which is used as money:“Money is what
money does”.
■ Savings are defined as the part of consumer’s disposable income which is not used for current
consumption, rather kept aside for future use.
■ Black Money is money earned through any illegal activity controlled by country regulations.
GLOSSARY
Coincidence accident தற்செயல்
Demonitization to officially stop using particular பண மதிப்பு குறைப்பு

an economic system that consists of
Dual Economy இணை ப�ொருளாதாரம்
two very different parts
the value of money considered as
Purchasing Power வாங்கும் சக்தி
the amount of goods it will buy
Unanimity the state of being unanimous ஒரு மனதாக முடிவெடுத்தல்
Tax Evasion ways of illegally paying less tax வரி ஏய்ப்பு
Deterioration the process of becoming progressively worse ம�ோசம் அடைதல்
3. The value of money is

Evaluation a) Internal value of money
b) External value of money
I
Choose the c) Both a & b
correct answer. d) None of these
1. Which metals were used 4. Which is the Bank Money?
for metallic money? a) Cheque
a) gold b) Draft
b) silver c) Credit and Debit cards
c) bronze d) All the above
d) all the above 5.
P ick out the incorrect one:
2. Who introduced the paper money? Investment can be made in different
vehicle.
a) British b) Turkish
a) Stock b) bonds
c) The Mugual Empire d) Mauryas
c) Mutual fund d) Pay tax
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6. Who is responsible for the collection and c) I, III and IV is correct

publication of monetary and financial d) All are correct
information?
a) Finance commission VI Find out the odd one.
b) Finance Ministry 1. Recent forms of money transactions are
c) Reserve Bank of India a) Credit card b) Barter system
d) Auditor and Comptroller General of c) Debit card d) Online banking
India 2. Effects of black money on economy is
a) Dual economy
II Fill in the blanks. b) Undermining equity
1. Online Banking is also known as ______. c) No effects on production
2. ______ is what money does. d) lavish consumption spending
3. T
he term of bank is derived from VII Write short answer.
______ word.
1. What is the Barter System?
4. Value of money is meant ______ of money.
2. What are the recent forms of money?
5. The Indian banking regulation act of 3. Short note on E-Banking and E-Money.
______ . 4. What are the essential of Money in your life?
III Match the following. 5. What is the Value of Money?
6. What is the Commercial Bank and its
1. Barter system tax evaders
types of Deposits?
2. Reserve Bank act Electronic Money 7. What is Savings and Investment?
Consumer’s 8. What is meant by Black Money?
3. E- Money
disposable income
9. What are the effects of black money on
exchanged goods economy?
4. Savings
for goods
5. Black money 1935
VIII
Write Brief answer.
IV Write the one word answer. 1. What are the disadvantages of barter
system?
1. The word Money is derived from?
2. Write about the evolution of Money?
2. W
hich bank gives to both short term and
3. What are the functions of Money? and
long term loans?
explain it.
V C
hoose the correct 4. Explain the types of bank Deposits.
statement. 5. What are the difference between savings
and investment?
1. Barter system had many deficiency like
6. What are the effects of black money on
I. Lack of double coincidence of wants economy?
II. No difficulties of storing wealth
III. Common measure of value Project and Activity.
IX
IV. Indivisibility of commodities 1. Students are asked to prepare a chart
a) I and II is correct containing dummy images of new and
b) I and IV is correct old currencies in India and also from
other countries.
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2. Go to your nearest Post Office and know

REFERENCE BOOKS
about the savings scheme in India and
teachers and students are discuss about
■ Jhingan - Monetary Economics
the savings schemes.
■ JagdishHanda – Monetary economics
X
Life skills. ■ Wynne A. H. Godley – Monetary economics
1. Students to know about the value of ■ Mervyn K. Lewis – Monetary Economics
money, Set up your classroom like a shop
or market.
2. Students are asked to purchase some
INTERNET RESOURCES
commodities from the shop,Do the
■ www.investopedia.com
market activities.
3. Teacher and students together discuss the ■ www.vikaspedia.com
value of money. ■ www.coinsindia.com
ICT CORNER
UNIT-1. MONEY, SAVINGS AND INVESTMENTS
Steps
• Open the Browser and type the URL given below (or) Scan the QR Code.
• Go to Currency converter
• Go to drop down menu, select any country name (Ex.India-America)
Website URL:
https://fx-rate.net/
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STANDARD NINE
ECONOMICS

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UNIT Understanding Development:

Perspectives, Measurement
1 and Sustainability
Learning Objectives
� To know the meaning of development from different perspectives

� To know the indicators of economic development
� Understand the meaning of economic development
� To know the policies for sustainable development
Introduction Different Perspectives

1
The word ‘development’ is used widely. It About Development
refers to the progress of a particular field or Every human being has an ambition
a particular person. Similarly, the economic or desire of his or her own to achieve
progress of a country is known as ‘economic progress in life. Similarly, we have ideas
development’. However, the interpretation of about how a country should progress. If
the concept development keeps on changing our thinking turns towards progress and
from time to time, from person to person about the ways to achieve the many goals
and its meaning gets extended further. for progress, it leads to development.
Let us try to imagine what development means to different people.
Improvement
Growing process in
Progress a needed direcon
Way of moving forward

Freedom to grow
Development
Not doing same

Beering yourself mistake twice
Never ending Part of daily life

process Grows within Advance
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From the above diagram, you will

notice that other than income, people
seek freedom to grow on their own. Thus,
Final value of total goods and services
development refers to the improvement in
produced with in the geographic
quality of life such as higher income, better
boundaries of a country during a specified
education, better health and nutrition, less
period of time, normaly a year is known
poverty and more equal opportunity.
as Gross Domestic Product (GDP).
The term ‘economic development’
refers to the overall growth of all sectors
of the economy by adoption of new Purchasing Power Parity (PPP) and Human
technologies. Economic development Development Index (HDI).
improves the living standards of the
people as well as the status of the country.
2.1 Net National Product
The Net National Product (NNP) is
Indicators of Economic considered as a true measure of national
2
Development output. It is also known as national income.
A rise in per capita income means an
The major indicators to measure the level increase in aggregate real output. Hence,
of economic development are Net National this is a better indicator than national
Product (NNP), Per Capita Income (PCI), income for measuring development.
Afghanistan Bangladesh Bhutan India
Maldives Nepal Pakistan Sri Lanka
GDP per capita SAARC GDP per capita

G8 Countries
(Value in US dollars) Countries (Value in US dollars)
UK 40,03,000 Afghanistan 610.24
Russia 10,63,000 Bangladesh 1,66,000
Canada 47,66,000 Bhutan 3,22,000
France 42,42,000 India 1,99,000
USA 61,69,000 Maldives 132,000
Italy 33,73,000 Nepal 882.93
Japan 40,06,000 Pakistan NA
Germany 47,54,000 Sri Lanka 4,05,000

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Per Capita Income

According to the World Bank report,
new income measurements of countries
are classified as below (2017–18)
S. Types of Per Capita Income
No. Countries (US Dollar)
GDP per capita
BRICS Countries (Value in US 1 Low Income < 1005
dollars) 2 Lower 1006–3955
Middle
Brazil 10,51,000 Income
3 Upper 3956–12,235
Russia 10,63,000 Middle
Income
India 1,99,000
4 High Income > 12,235
China 9,38,000 Source: www.worldbank.org
South Africa 6,29,000
capita income. Calculations on the
Source: www.imf.org per capita income of all countries are
calculated only in the US dollar in order
to compare International level.
For measuring a country’s
development, its income is considered
to be one of the most important factors. 2.3 Purchasing Power Parity
Countries with higher income are Purchasing power parity is defined as the
considered to be more developed than number of units of a country’s currency
those with lesser income. So, income itself required to buy the same amount of goods
is considered to be one of the indicators of
economic development.
GDP per capita, current prices (in US dollars): 2018

2.2 Per Capita Income 25,000 or more NA 10,000 - 25,000
However, for comparing the

development of various countries, total
income is not an useful measure. Since
countries have different populations,
comparing total income will not be
suggestive of what an average person
is likely to earn. Are people in one
country better off than others in a
different country? The average income 25,000 or more
under 500 500 - 2,500 2,500 - 10,000
500 - 2,500
is calculated by dividing the country’s 10,000 - 25,000 under 500
total income by its total population. 2,500 - 10,000 no data
The average income is also called per

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and services in the domestic market as

one dollar would buy in the US.
The technique of purchasing power The Ministry of Human Resource
parity allows us to estimate what exchange Development is responsible for the
between two currencies is needed to express development of human resources in
the accurate purchasing power of the two India. Its headquarters is situated at
currencies in the respective countries. Shastri Bhavan in New Delhi.
Recently, India became the third largest
economy in terms of PPP. China became the
all round development of the people in the
largest defeating the US to the second position.
society.
In the past, economists believed
2.4 Human Development
that the rate of economic growth of nations
Human resource is could be increased only by increasing
necessary for the progress investment in physical capital. But they
of any country. The term have realised over time that investment
‘human resources’ refers
to the collective abilities
of people, which can be
utilised in the production
sector. Human Development Report of the world
Human resource development means prepared and released by UNDP
the development of a person’s physical and
mental abilities through education, health
care and training. Therefore, investment Human Development Index
in education and health of people can
result in a high rate of returns in the future
HDI in HDI in
for a country. For example, if a child is S.No. Country
invested with good education and health, 2010 2015
he or she may turn to be very productive in
1 India 0.580 0.624
future in the form of higher earnings and
greater contribution to the society. Human
2 Russia 0.785 0.804
Development Index (HDI) Which indicates
3 China 0.700 0.738
4 Pakistan 0.525 0.550
5 Nepal 0.529 0.558
6 Bangladesh 0.545 0.579
7 South Africa 0.638 0.666
8 Sri Lanka 0.746 0.766
Source: hdr.undp.org/en/composite/trends

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States
S. Andhra Karnataka Kerala Gujarat Uttar Tamil

India
No Parameter Pradesh Pradesh Nadu
Literacy
1 Rate % 67.02 75.36 94 78.03 69.72 80.09 74.04
(2011)
Sex Ratio
(Females
2 per 1000 993 973 1084 919 912 996 943
Males)
(2011)
Enrolment
in Higher
3 30.8 26.1 30.8 20.7 24.5 44.3 24.5
Education%
(2015–16)
Source: Niti Aayog
in human capital is as important as

investment in physical capital.
Sustainability of Literacy rate of Tamil Nadu is the

3 second highest among the southern
Development states. Tamil Nadu’s literacy rate is
Sustainable economic development is higher than the national average.
taken to mean development without The enrolment for higher education
damaging the environment and not in Tamil Nadu is the highest in
compromising with the needs of the India.
future generation.
The consequences of environmental
degradation do not respect national resource. The question arises as to how
or state boundaries. Sustainability of sustainable development is possible if the
development is comparatively a new resources are over-used rather than getting
replenished. Non-renewable resources get
area of knowledge in which scientists,
exhausted after certain number of years
economists, philosophers and other social
of extracting and using them and they
scientists are working together.
cannot be replenished.
Natural resources
can be divided into
renewable resources and
non-renewable resources. “We have not inherited the world from
our forefathers. We have borrowed it from
Groundwater is an our children.”
example of a renewable

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Renewable resources Non-renewable resources
Renewable resources are pollution free Non-renewable resources pollute and

and environment friendly. These resources damage the environment. Million of years
take a short time for renewal. are needed for the formation of these
Example: Solar energy, wind energy, resources.
water, wood, paper. Example: Metals, glass, fossil fuels (coal,
petroleum, natural gas, diesel)
To achieve real sustainability, we need At all times, as a member of society and as

to balance economic, social and environmental individuals, we need to ask where we want
sustainability in equal harmony. to go, what we wish to become and what
In general, the question of our goals are.
development or progress is continuous.
Policies for Sustainable
4
Development
Use of Non-conventional Sources
of Energy
India depends on thermal and hydro power
plants to meet its power needs. Both these
sources have an adverse environmental
impact. Thermal power plants emit large
quantities of carbon dioxide, which
pollute the environment.
Solar Power in India

Solar power is the conversion of energy
from sunlight into electricity either
directly using photovoltaic cells or
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Solar panels absorb the sunlight as a Environmental Policies

source of energy to generate electricity. A 5
in India
solar electric system can reliably produce
electricity for our home and offices. Environmental policies in India have
These distributed solar systems are often been evolved considerably over the
installed by home and business owners to past three decades. These policies have
reduce their electricity costs. Solar power covered a wide range of issues such as air,
in India is a fast-developing industry. water pollution, waste management and
biodiversity conservation.
Tamil Nadu is the state with highest
installed solar capacity in India. Tamil India faces challenges in economic
Nadu is one of the leading solar power development, which has to be achieved
producing states in India. As on 31 July 2017, with limited resources, minimum
the total installed capacity in Tamil Nadu externalities and in the presence of an
is 1,697 MW. uncertain climate. One of the approaches
to overcome this challenge is through the
path of sustainable development.
The Supreme Court of India
has interpreted and introduced new
changes in environmental protection
through a series of directions and
judgements.
List of Environmental Acts in India
S. No Act Action
National Green Tribunal Environmental protection and conservation of

1
Act, 2010 forests and other natural resources
Biological Diversity Act,

2 To provide for conservation of biological diversity
2002
The Environment Providing for the protection and improvement of

3
(Protection) Act, 1986 the environment.
Forest (Conservation) Check deforestation and encourage afforestation

4
Act, 1980 of non-forest areas.
Water (Prevention and

Provides maintenance and restoration and
5 control of pollution)
quality of all types of surface and groundwater.
Act, 1974
Wildlife Protection Act,

6 Providing protection to wild animals and birds.
1972

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The Growth Story of Tamil Nadu

Tamil Nadu is one of the states that achieving rapid progress over a relatively short
period, though it started from appalling levels of poverty, deprivation and inequality.
It is during that period, Tamil Nadu is much to the consternation of many
economists, initiated bold social programmes such as universal midday meals in primary
schools and started putting in place an extensive social infrastructure – schools, health
centres, roads, public transport, water supply, electricity connections, and much more.
Today, Tamil Nadu has some of the best public services among all Indian states, and
many of them are accessible to all on a non-discriminatory basis.
First, active social policies constitute an important aspect of this shared
experience. This is particularly striking in the vigour of public education, but it also
extends to other domains, such as health care, social security and public amenities.
Second, these states have typically followed universalistic principles in the
provision of essential public services. This is especially noticeable in the case of
Tamil Nadu.
Third, these efforts have been greatly facilitated by a functioning and
comparatively efficient administration. The governments involved have delivered their
services in traditional lines and these ‘old fashioned’ public institutions-functioning
schools, health centres, government offices, Gram Panchayat and co-operatives have
left much room for private initiatives at a later stage of development.
Fourth, dealing with social inequality has also been an important part of these
shared experiences. In each case, the historical burden of social inequality has been
significantly reduced in one way or another. In Kerala, Tamil Nadu and Himachal
Pradesh, principles of equal citizenship and universal entitlements were forged through
sustained social reform movements as well as fierce struggles for equality on the part of
under-privileged groups-especially Dalits,.
Fifth, these experiences of rapid social progress are not just a reflection of
constructive state policies but also of people’s active involvement in democratic politics.
The social movements that fought traditional inequalities are part of this larger pattern.
Last but not least, there is no evidence that the cultivation of human capability
has been at the cost of conventional economic success, such as fast economic growth.
Tamil Nadu have some of the highest per capita incomes and lowest poverty rates among
all Indian states. Economic growth, in turn,
has enabled these states to sustain and
consolidate active social policies. This is an
important example of the complementarity
between economic growth and public
support.
Source: An Uncertain Glory by Nobel

laureate Prof. Amartya Sen.

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Article 51A(g) of the Constitution � The major indicators of economic

states that “it shall be the duty of every development are Per Capita Income, Net
citizen of India to protect and improve the National Product, Purchasing Power
natural environment including forests, Parity and Human Development Index.
lakes, rivers and wildlife and to have
� Human resource is necessary for the
compassion for living creatures.”
progress of any country.
Development increases the quality
of life. This means that people will have � Sustainable development means
higher incomes, better education, better development should take place
health and nutrition, less poverty and without damaging the environment
more equality of opportunity. and preserve it for the future.
� The Wildlife Protection Act 1972 is
Recap aimed at protection to wild animals and
� Development refers to the progress of a birds.
particular field or a particular person. � Thermal power plants emit large
� Economic development means overall quantity of carbon dioxide, which is
growth of all sectors of the economy. harmful to the environment.
GLOSSARY
Embodied — within Depletion — exhaustion;
Replenish — restore using up.
Perspective — outlook Conserve — protect
Sustainability — avoidance of
depletion
EXERCISE
I. Choose the correct answer: 2. The term ‘Human

1. Assertion (A): Development increases
resources’ refers to
the quality of life. a. investment on poor people
Reason (R): People will have higher b. expenditure on agriculture
incomes, better education, better c. investment on assests
health and nutrition, less poverty. d. collective abilities of people
a. B oth (A) and (R) are true and (R) 3. For comparing development
explains (A) between countries, their ________
b. B oth (A) and (R) are true and (R) is considered to be one of the most
does not explain (A) important attributes.
c. (A) is correct and (R) is false a. growth b. income
d. (A) is false and (R) is true c. expenditure d. savings

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4. ________ is considered a true a. Gender b. Health

measure of national income. c. Education d. Income
a. GNP b. GDP
11. Among the following states which
c. NNP d. NDP state have the literacy rate (2011)
5. The ________ income is also called higher than national average
per capita income. a. Andhra Pradesh
a. average b. total b. Uttar Pradesh
c. people d. monthly
c. Tamil Nadu
6. Which one of the following country
d. None of these
is not a G-8 country
a. Japan b. Canada 12. Sex-ratio means
c. Russia d. India a. the ratio between adult-male and
adult female in a population
7. Which one of the following country
b. the ratio between female and male
is not a member of SAARC in a population
a. India b. Pakistan c. the relationship between male of
c. China d. Bhutan female
8. Assertion (A): The Net National d. the number of females per
Product (NNP) is considered as a thousand males
true measure of national output. 13. Inter-generational equality is
ensured under the process of
Reason (R): It is also known as national
income. a. Industrial progress
a. Both (A) and (R) are true and (R) b. Economic development
explains (A) c. Sustainable development
b. Both (A) and (R) are true and (R) d. Economic growth
does not explain (A)
14. Find the odd one
c. (A) is correct and (R) is false
a. Solar energy b. Wind energy
d. (A) is false and (R) is true
c. Paper d. Natural gas
9. Assertion (A): Human resource is
15. _____________ is the state with
necessary for the progress of any
highest installed solar capacity in
country.
India.
Reason (R): Investment in education
a. Tamil Nadu b. West Bengal
and health of people can result in a high
rate of returns in the future for a country. c. Kerala d. Andhra Pradesh
a. Both (A) and (R) are true and (R) 16. _______ resources are those which
explains (A) will get exhausted after years of use.
b. Both (A) and (R) are true and (R) a. Natural b. Renewable
does not explain (A) c. Non-Renewable d. New
c. (A) is correct and (R) is false 17. Thermal plant emits large quantity
d. (A) is false and (R) is true of _______, which pollutes the
10. The Human Development Index environment.
(HDI) does not take into account the a. Oxygen b. Nitrogen
following dimension in its calculation c. Carbon d. Carbon dioxide

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II. Fill in the blanks:

1. Economic progress of any country is known as ______________
2. The head quarters of HRD Ministry is in _____________
3. The state having the highest literacy rate in India is _____________
4. Human Development Report of the world prepared and released by _____________
5. Groundwater is an example of______________ resource.
6. The book An Uncertain Glory was written by_____________
III. Match the following:
1. Development — Wild life Protection Act

2. Human resource — Renewable resources
3. Solar energy — Part of daily life
4. 1972 — Education
IV. Give Short answers: 2. Describe in detail about

1. What do you mean by development?
environmental policies in India.
2. What are the indicators of 3. Differentiate between renewable and
development? non-renewable resources.
3. Why NNP is not considered as 4. Mention any five environmental acts
an useful measure to compare a and their action.
country’s development with
other countries? VI. Projects and Activities
4. Why human resources is considered List the various ways in which the
as the foremost resource of any problems of garbage and emissions
country? are being dealt with around the
5. Expand the following:1. PPP 2. HDI world.
6. Expand the following: 1. NNP 2. PCI VII. HOTS
7. What is ‘Solar Power’? Write in detail what kind of environmental
problems you face in your locality.
V. Answer in detail:
VIII. Life Skill
1. Discuss the policies for sustainable
development. How is the Per Capita income calculated?
INTERNET RESOURCES
www.imf.org (The International Monetary Fund)

https://en.wikipedia.org/wiki/Sustainable_development
www.worldbank.org
Niti Aayog
hdr.undp.org/en/composite/trends (The United Nations Development Programme)
http://vikaspedia.in/energy/policy-support/environment-1/forests/general-environmental-acts

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UNIT Employment in India

and Tamil Nadu
2
Learning Objectives
To know the employment structure in India

Understand the organised and unorganised sector
Understand the distinction between public sector and private sector
Understand the changing employment pattern
To appreciate the case study format
Introduction Employment Structure

1
You know the basic needs of every human in India
being are food, clothes and shelter. In the The nature of employment in India is
present world, one more essential need has to multi-dimensional. Some get employment
be added in this list. That is employment. To throughout the year; some others get
survive in the world, we all need employment employed for only a few months in a year.
to earn money. Those who are engaged in
economic activities, in whatever capacity– The economy is classified into three
high or low – are called employees. People sectors: primary or agriculture sector,
who employ these workers and pay rewards secondary or industrial sector and tertiary
for their work are called the employers. or service sector.
Labour force of the economy is the
number of people in the country who work
and also capable of working. We take the age
group of 15–60 years for the computation of
workforce. Persons who are less than 15 years
are considered as children, and person who
have crossed 60 years of age are excluded
as they are not physically fit to undertake
productive occupation. If larger percentage of
population is accounted by children and old- Employment Structure
age persons, then the progress of the country The structure of employment
would be very slow as the working force is very denotes the number of workers engaged in
small. Besides, the small working force will different sectors of the economy. Though
have to maintain larger non-working force for the occupational pattern varies from
feeding out of the small national product. one country to another, one can find in
2. Employment in India and Tamil Nadu 178

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developing countries like India that a large

Primary sector work force will be engaged in primary sector,
Agriculture, forestry animal while a small proportion in secondary and
husbandry, poultry, dairy farming, tertiary sectors. Whereas, in well-developed
fishing etc. countries, the proportion of workforce
engaged in agriculture will be very small
and a majority of labour force will be in the
industrial and tertiary sectors.
Employment has always featured
as an important element of development
policy in India.
Employment growth has increased
at an average rate of 2% during the past
Primary Sector four decades since 1972–73.
Secondary sector
Manufacturing, small and large-
In the medieval period, Feroz Shah
scale industries and constructional
Thuglaq, the Sultan of Delhi, had set up
activities.
an ‘Employment Bureau’ to solve the
unemployment problem.
Activity
Govindan resides in a village called
Vallam near Thanjavur. He has two sons
named Subbiah and Kumaran. He has
Secondary Sector three acres of land and a bullock cart of his
own. They grow paddy and groundnuts in
their land. Subbiah is helping his father in
Tertiary sector agricultural activities. Kumaran, the other
Transport, insurance, banking, trade, son, is working in an insurance company
communication, real estate, government as a development oﬃcer. Their mother
and non-government services. Kamala is working as a teacher in a school
in the same village. Govindan’s neighbour
Gopal’s son Pandian is working in SIDCO
Industrial Estate in Chennai.
1. How many members in Govindan’s
family are working in the services
sector? Name them.
2. In which sector do Subbiah and
his father work?
3. Is Pandian working in a primary
Tertiary Sector sector?

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Types of Employment: 2.2 Unorganised Sector

2 Organised and The unorganised sector of the economy
Unorganised Sectors characterised by the household
manufacturing activity and small-scale
2.1 Organised Sector
industry. Jobs here are low paid and often
The organised sector is one that is not regular, Mostly, they do not have paid
incorporated with the appropriate leave, holiday, leave due to sickness and
authority or government and follows its so on. Employment is not secure. When
rules and regulations. In India employees there is no work, people are asked to
of central and state governments, banks, leave the job. This sector includes a large
railways, insurance, industry and so on number of people who are employed on
can be called as organised sector. This
their own doing small jobs such as selling
sector works according to certain rules and
on the street, doing repair work and
regulations given in the law. Organised
sector has some formal processes and so on.
procedures. The employees in this sector In the unorganised sector,
are provided with job security and receive the employment terms are not fixed
higher wages than those of the unorganised and regular. They do not enjoy any
sectors. special benefits or job security. These
Organised sector gives good salary, enterprises are not registered with the
fixed working hours, paid holidays and government.
provides medical allowance and insurance
also.

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2.3 P
ublic Sector vs Private
Sector
Economic activities are Public Sector Private Sector
classified into public and
private sector based on NLC TVS Motors
who owns assets and SAIL Ashok Leyland
is responsible for the BSNL TATA Steel
delivery of services.
Differences between the Public Sector and Private Sector
S. No. Public Sector Private Sector
1 Service motive Profit motive
2 Government owns the assets Private individuals own the assets
Wages are paid by the Wages are paid by the owner of private
3
government enterprises.
THE SECTORS
PUBLIC SECTOR PRIVATE SECTOR
SOLE
TRADER
LOCAL GOVERNMENT UNINCORPORATED
PARTNERSHIP
CENTRAL GOVERNMENT PRIVATE LIMITED

COMPANY
INCORPORATED
NATIONALISED PUBLIC LIMITED
INDUSTRIES COMPANY
FRANCHISES

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3 Employment Pattern 3.1 Employment Trends

in Tamil Nadu
In recent years, there has been a change
in the employment pattern and this has Agriculture, despite a sharp decline in
helped the employers to develop more gross domestic product, continues to be
flexible working patterns among their the largest employer in Tamil Nadu. This
employees. The trends are (a) increasing is because the non-agriculture sectors are
self-employment (b) firms using fewer yet to generate enough employment to
full-time employees and tending to offer affect a shift of labour force. Most of the
more short-term contracts (c) there has employment growth in Tamil Nadu has
been a growth in part-time employment. been contributed by the unorganised and
This may be due to lifestyle of the people. informal sectors.
Employment in Iruvelpattu: A case study

What is happening in the employment scenario can be understood not only from national
or state level, but also from the study of the village economy. Iruvelpattu is one such village
in Villupuram district in Tamil Nadu. This village has been studied for more than 100
years by many scholars. This village is also called Slater village as Gilbert Slater was the
first scholar working in the University of Madras to go with his students to study this
village in 1916.Over the years, many scholars surveyed the occupation of villagers and
collected many more details of each person in the village.
It was clearly observed that the government brought social security awareness
among the people of the village through primary health care, provision of schools and
maintenance of public distribution system. Though this village underwent many changes,
it in still dependent on agriculture as the main occupation.Look at the following table
or chart.You will notice that during 1981, out of 100 families, 24 were engaged in non-
agriculture employment.In 2008, the member of families engaged in such employment
increased to 41.During 1981–2008, the proportion of families engaged in agriculture has
declined– both as agriculture labourers and as cultivators.
Employment details of households in Iruvelpattu (in%)
1981 2008
% of
Households
Occupation
24%
1981 2008 42% 41% 33%
Cultivators 42 33 34%
26%
Agricultural labourers 34 26
Non-agricultural labourers 24 41 Cultivators

Agricultural Labourers
All households 100 100
Non-Agricultural Labourers

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Activity
1. Why did people shift from agriculture to non-agriculture jobs in Iruvelpattu? What
could have been the reasons?
2. Do you think it is easy to move from agriculture to non-agriculture jobs? Talk to
your teachers and parents and discuss in the class.
3. Collect details of main occupations of 20 families in your locality. Prepare a table or
chart as given above and discuss in the class.
Recap
� Labour force is the number of people Organised sector provides job
in the country who work and also
capable of working. security and other benefits like
insurance to its employees.
Structure of employment denotes
number of workers engaged in Public sector means government
different sectors of the economy. undertakings.
The employment growth rate of Employment pattern changes due to

India increased at an average rate of lifestyle of the people.
2% during past four decades from
1972-73.
GLOSSARY Tertiary sector–services
Primary sector–raw materials Occupation– job or profession
Secondary sector–manufacturing Cultivator–peasant
EXERCISE
I. Choose the correct answer: c. Tertiary sector,

1. We take age group _______ years for
Secondary sector, Primary sector
computation of the workforce. d. S econdary sector, Tertiary sector,
a. 12–60 b. 15–60 Primary sector
c. 21–65 d. 5–14 3. Which one of the following sectors is
the largest employer in India.
2. Which is the correct sequence of
a. Primary Sector
various sectors in GDP of India in
the descending order? b. Secondary Sector
a. Primary sector, Secondary sector, c. Tertiary Sector
Tertiary sector d. Public sector
b. Primary sector, Tertiary sector, 4. Which one of the following is not in
Secondary sector Primary Sector

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a. Agriculture b. Manufacturing c. Tertiary sector

c. Mining d. Fishery d. Private sector
5. Which one of the following is not in
9. Which Delhi Sultan of medieval India
the Secondary Sector?
formed ‘Employment Bureau’ to solve
a. Construction the unemployment problem.
b. Manufacturing a. Muhamad Bin Tugluq
c. Small Scale Industry b. Allauddin Khilji
d. Forestry c. Feroz Shah Tugluq
6. Tertiary Sector include/s d. Balban
a. Transport b. Insurance
10. _________ sector is registered and
c. Banking d. All of these
follows government rules.
7. Match the List I with List II using the
a. Agriculture
codes given below:
b. Organised
I II c. Unorganised
a. Agriculture, d. Private
Forestry, Fishery 1. Unorganised
sector 11. ________ sector provides job
and Mining
security and higher wages
b. M anufacturing,
2. Service Sector a. Public sector
Electricity
Gas and Water b. Organised sector
Supply c. Unorganised sector
c. Trade, Transport 3. S econdary d. Private sector
and sector
Communication 12. Find the odd one
d. Unincorporated a. Banking
Enterprises and 4. Primary Sector b. Railways
Household c. Insurance
industries
d. Small Scale Industry
(A) (B) (C) (D) 13. The sectors are classified into
a. 1 2 3 4 Public and Private sectors on the
basis of
b. 4 3 2 1 a. number of workers employed
c. 2 3 1 4 b. nature of economic activity
c. ownership of enterprises
d. 3 2 4 1
d. employment conditions
8. Which sector is not included in the 14. Assertion (A) : The unorganised
occupational pattern? sector of the economy characterised
a. Primary sector by the household manufacturing
b. Secondary sector activity and small-scale industry.

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Reason (R) : Jobs here are low paid and 6. ________ of the economy is the
often not regular number of people in the country, who
a. Both (A) and (R) are true and (R) work and also capable of working.
explains (A) 7. Public sector means ______________
b. Both (A) and (R) are true and (R)
III. Match the following:
does not explain (A)
1. Public sector — a. Banking
c. (A) is correct and (R) is false
2. Private sector — b. Poultry
d. (A) is false and (R) is true 3. Primary sector — c. Profit motive
4. Tertiary sector — d. Service motive
15. People who employ workers and pay
rewards for their work is termed as IV. Give Short answers:
_______.
1. What is labour force of the economy?
a employee
2. Why are children and old age (above
b. employer 60 years) are not considered for
c. labour computation of workforce?
d. caretaker 3. What are the three sectors of an
economy?
16. __________ continues to be the 4. Agriculture, despite a sharp decline in
largest employer in Tamil Nadu. Gross Domestic Product, continues
to be the largest employer in Tamil
a. Agriculture
Nadu. Give reason.
b. Manufacturing
V. Answer in detail:
c. Banking
1. Explain: (a) primary sector;
d. Small Scale Industry
(b) secondary sector; (c)tertiary sector.
2. Explain the employment structure of
II. Fill in the blanks: India.
1. In ______ sector, the employment 3. Compare the employment conditions
terms are not fixed and regular. prevailing in the organised and
unorganised sectors.
2. Economic activities are classified
4. Distinguish between the Public
into _______ and _______ sectors.
sector and the Private sector.
3. ________ has always featured as an
important element of development VI. Projects and Activities
policy in India. 1. Make a long list of all kinds of work
4. Employment pattern changes due to that you find adults around you. In
________________ what way can you classify them?
2. A research scholar looked at the
5. The nature of employment in India is working people in the city of Chennai
_________. and found the following:

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Nature Percentage of
Place of work
of employment working people
In offices and factories registered

Organised 15
with the government
Own shops, office, clinics in marketplaces

20
with formal license
People working on the street, construction

25
workers, domestic workers
Working in small workshops usually not

registered with the government
3. Classify the following list of occupations under primary, secondary and tertiary
sectors.
Milk vendor, tailor, teacher, doctor, farmer, postman, engineer, potter, fisherman,
artisans, policeman, banker, driver, carpenter.
Primary Secondary Tertiary
VII. HOTS VIII. Life Skill
Tertiary sector is in top position in the Discuss the sectors of your village
world now. Justify economy.
REFERENCE AND INTERNET RESOURCES

1. Iruvelpattu (1916–2008), Economic and Political Weekly, July 31, 2010, vol. XLV,
No.31, pp.47–61.
2. https://villageinfo.in
3. https://quickonomics.com
4. https://study.com

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UNIT
MONEY AND CREDIT
1
Learning Objectives
To know about the Barter system.

To understand about money and various transaction of money
To know about the role of RBI
To understand about the various types of credits and benificiaries
This chapter deals with the evolution Almost all things used by man have
of money over the years and its functions. a monetary value. In addition to that, the
It also elucidates on the role of the Reserve pay given for labour, wages and services
Bank of India. It throws light on Foreign are all fixed on the basis of money. The
Exchange, monetary aggregates and taxes and duties are also paid in the form
forms of credit. It further explains how of money. We would have seen our parents
technological advancements have made planning the expenses at our home every
banking easy and swift in today’s world. month. The monthly income, pending
expenditure, savings, payment of interest
'ப�ொருளல்லவரைப் ப�ொருளாகச் செய்யும் etc., are all measured in terms of money.
ப�ொருளல்லது இல்லை ப�ொருள்'
'ஆகாறு அளவிட்டி தாயினும் கேடில்லை
(Money adds value to people) ப�ோகாறு அகலாக் கடை'
(Expenditure should not exceed income says Thiruvalluvar )
1. Money and Credit COMPILED BY PAAVAI

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Not only at homes, but also the During archaeological excavations

budgets of a country or states are also framed in Egypt and Iraq (Mesopotamia), articles
on the basis of money. The Government, as used during the Indus valley civilization
well as, private institutions and industries were excavated.
calculate their financial status through
money. Thus, money plays a predominant
and inseparable role in all our lives.
Barter System
If there arises a question, “Has man
always used money?”, the answer would be
‘no’. How? when did money enter into the
lives of men? In this lesson, let us learn
about the evolution of money over the years.
Ancient man hunted and gathered
food. He lived in caves and forests. In later As years went by, there were issues
stages, he invented weapons for hunting and found in barter system. For example there
gathering food. Later, he invented fire and were problems in the exchanging needed
goods. A person who had paddy was in need
learnt to practise agriculture. He used mud
of earthenware for instance. But, the person
to build houses and settle down in a place. who had pots and other utensils was not in
and also to make earthenware. need of paddy. Thus, the needs of many people
When the agricultural yield was high, were not fulfilled. Measuring the quantity and
they made handicrafts. When there was value of the goods exchanged were found very
difficult.
surplus in agricultural produce and other
To solve these issues, they fixed a
articles like earthenware, they exchanged it common item with a standard value, for the
with people who needed them. For example, effective exchange of goods. It was usually in
if a community had excess food stuff, they the form of some metal. Metals were rare to
would exchange that with those who had find and could be maintained for a long time
excess pots. Likewise, when a particular and never lost their value. Hence, the metals
grain grew in abundance in a region, it was can be termed as the first form of money.
exchanged for a different crop in another
region. These articles which were exchanged
through barter system can be termed as the
first form of trade. During his rule(1540-1546) Sher
Shah Suri set up a new civic and military
Coins
administration and issued a coin of silver
The barter system flourished weighing 178 grams, which was termed
wherever civilizations thrived. This system the Rupiya. The silver coin remained
was active not only within a civilization, but in use during the Mughal period, the
also among civilizations. This was the initial Maratha era and in Biritish India as well.
form of international trade.

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Spice Route
Pepper, spices, pearls, gems,
rubies and muslin clothes were
exported from the eastern sea
of Tamil Nadu. Pepper and
spices took a major share of
the exports. Thus, this route
was called the spice route.
These may be the reasons why metals Paper Money

were chosen. Gold, silver and copper were
the metals used first. They were called ancient As days went by, issues arose
currency. Leather, beads, shells, tobacco, because while trade prospered, there were
salt, corn and even slaves were exchanged as insufficient reserves of gold and silver.
barter, says economists. Mines also had a limited reserve of these
metals. An alternative was found and coins
The later Cholas allowed the traders
were made using metals with lesser value.
to have their own army. Historical evidences
These were used to buy and sell goods of
state that during this period, small traders
lesser value. It was used as the money of the
and producers gave credit to the Tamil
poor people.
traders to support their export needs.
Hence these coins were printed in
large numbers. Paper money came into
being as the next stage. This money was
without form and people started saving in
banks. The Great Economic Depression
was also prompted the saving habit of the
people.
ெ்லத்தொல ப�ொருள்பெய்கத மொர்த்தல �சுமட்க
்லத்துள்நீர் ப�ய்திரீஇ யற்று
‘The wealth stored through immoral ways will
Natural Money
disappear as water kept in an unburnt pot’
The metals such as silver and gold
gained importance gradually all over Money has become an inseparable
the world. So, these metals were used as part of everyone’s life today. It has changed
standard value in the exchange of goods. its form in the economic front. Money
This was called as natural money. transactions are done through many ways
in the electronic world
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Electronic Transactions
One has to visit the bank and fill in a
challan or produce a cheque to withdraw
money from his account.
Money, i.e. paper currency is

Now this practice is gradually a value. Money is recognized as a
vanishing. Instead, one can easily standard record for the payment of a
withdraw the necessary amount from an thing or service. Using this currency,
Automated Teller Machine (ATM), with people can purchase things, pay taxes
the help of an ATM debit card. One can and repay debts. In the currency of
easily withdraw the money needed at India, I promise to pay the bearer the
any time at ATMs located everywhere.
sum of ………. rupees is printed as
A person can deposit money in their
the assurance given by the governor
account without visiting the branch.
of the Reserve Bank of India, with his
• Similarly, credit cards are also
signature. Similarly, the signature and
available, through which things are
the promise given by the highest official
bought on credit and the amount can
be paid later. are found in currencies of all countries.

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• Nowadays, instead of using cheques for circulation. According to the statistics

or Demand Drafts (DDs), online available as on August 2018, currency
transactions through net banking worth of 19 lakh crore are in circulation.
are carried out. Through this, money (source - Reserve Bank of India)
is transacted to anyone who lives
anywhere across the globe.
• Technology has advanced so much that
even mobile banking is widely used
nowadays.
Role of the Reserve

Bank of India
A government has the responsibility

to regulate money supply and oversee
the monetary policy. Hoarding of money
must be avoided at all costs in a country’s
economy. Only then money can be saved
in banks.
A major portion of the savings in banks Educational Loans
are used for the development of industries,
economic growth and various development • Educational loan attempts to meet the
schemes for the welfare of the poor. educational aspirations of the society.
• A student is the main borrower.
• A parent, spouse or sibling can be
the co-applicant.
Dr. B.R. Ambedkar’s Ph.D.thesis • It is offered to students who want to

on ‘The Problem of the Rupee - Its pursue higher education in India or
overseas.
origin and solution’ was the reference
tool and provided guidelines for the • It can be taken for a full time, part
Reserve Bank of India Act of 1934. – time or vocational course and
Graduation or Post Graduation.
All the major and important banks
• There is no security required for the
were nationalised (1969) in India. The
loan amount up to ` 4 lakhs
Reserve Bank of India (RBI) regulates the
circulation of currency in India. • The loan is repaid by the student
The Reserve Bank of India started generally after the employment.
its operations on 1st April 1935. It was • Students can apply through “Vidya
permanently moved to Mumbai from Lakshmi Portal Education Loan
the year 1937. RBI was natinolised in Scheme”. (https://www.vidyalakshmi.
1949. 85% of the printed currency is let co.in/)

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Relationship between
How is currency printed in India?
Money and Prices
There is a close relationship between One rupee and two rupee notes
volume of circulation money and the were first printed in India in the year
price of things. 90% of the products are 1917. The Reserve Bank of India is
manufactured with the main aim of sales empowered to issue the Government
or meant for services. Growing crops and of India notes since1935. 500 rupee
production are done on a commercial note currency was introduced later.
basis, rather than on a subsistence level. In 1940, one Rupee notes were issued
This phenomenon also increased the again. Till 1947, the currency notes
importance of the market and money. with the image of King George VI were
The relationship between money in circulation. After Independence, the
and price is connected with the Monetary Government of India issued currency
policy. notes.
There is a close relationship between In 1925, the British government
the growth of money supply and inflation. established a government press at
Price controls play a very important role in Nasik in Maharashtra. Currencies
a country’s economic stability. This role is were printed three years later. In 1974,
played by the Central Bank of our country, a press was started in Dewas, Madhya
RBI in India. Pradesh. (Security Printing and
Currency is the medium of exchange Minting Corporation of India Ltd.)
in a country. The Indian currency is called In the 1990s. two more presses were
the Indian Rupee (INR). In a country the started in Mysuru, Karnataka and
foreign currency is called foreign exchange. Salboni in West Bengal to print bank
purchasing capacity of all currencies notes.
in the world are compared using the US
The Reserve Bank of India has
dollar as the standard currency. This value
differs from country to country. Most of the authority to decide the value of
the international trade transactions are currency to be printed and how the
carried out in US dollar. amount should reach its destination
safely. Around ten thousand workers
Activity are employed here. Countries like Sri
Bank Lanka, Bhutan, Iraq and Africa have
• Set up your classroom like a bank. drawn contracts for printing their
currencies and sent to the respective
• With the help of your teacher, act as
countries.
a Cashier, Branch Manager, Assistant
Manager, customers etc. Though the RBI has the power to
•
Prepare dummy challans for print up to ten thousand rupee notes,
deposition of money, cheques, at present a maximum of upto rupees
Demand Draft etc. two thousand is printed.
• Do the banking activities

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Foreign exchange rate equivalent to US Dollars

Country Currency Equivalent Value for 1 US
Dollar (July 2018)
India Rupee 68.72 rupees
England Pound 0.76 pound
European Union Euro 1.14 euro
Canada Dollar 1.31 dollar
Japan Yen 111.15 yen
China Yuan 6.76 yuan
Saudi Arabia Riyal 3.75 riyal
Australia Dollar 1.35 dollar
Malaysia Ringgit 4.05 ringgit
Pakistan Rupee 124.2 rupees
SriLanka Rupee 159.8 rupees
Functions of Money Unit of Account

When money replaced the barter Money should be the common,
system, a lot of practical issues were solved. standard unit of calculating a country’s total
Money acts a medium of exchange, a unit consumer goods, products, services etc. For
of measurement, a store of value and a example, if a book costs ` 50, it means that
standard of deferred payments. It plays an the price of the book is equale to 50 units
important role in transactions. of money. Money is used to measure and
record financial transactions in a country.
Activity A Store of Value
Foreign Exchange Money is used as a store of purchasing
power. It can be used to finance future
Let the teacher bring copies of
payments.
Indian rupees and foreign currencies.
Distribute the foreign currencies to pairs HOTS
/ groups. Let the students convert it into
Indian rupees and collect the equivalent How important is foreign exchange to
amount of rupees from the teacher. one's country?
When all groups complete, the foreign
currency can be given to another group
in the next round. Credit
Farmers avail credit during monsoons
for buying seeds, agricultural input and other
Medium of Exchange
expenses. Traders and small entrepreneurs
Money should be accepted liberally in need credit for their needs. Even large industries
exchange of goods and services in a country. receive credit to take up their new projects.

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Credit is available from:

•
Formal financial institutions like
nationalised and private banks and co-
operative banks
• Informal financial institutions
• Micro credit is received through Self
Help Groups (SHG)
As far as nationalised banks and co-
operative banks are concerned the interest
to credit is comparatively lesser and there
is gurantee for the pledged, goods.
especially women and the poor really make a

difference in their life.
In Tamil Nadu, all the banks have
Money supply is divided into four: 10,612 branches,across the state They
M1 = Currency held with the public + carry on a total transaction of around 15
cash Reserves in commercial and Co- lakh crore rupees during the financial year
operative banks + cash reserves in the (2017-2018).
RBI. A few salient features of the Tamil Nadu
M2 = M1 + Money saved in Post office Bank transactions are given in the table
and bank savings Accounts below.
M3 = M 1 + Time Deposits Tamil Nadu - Banking Statistics
in C ommercial and
co-operative banks Banking Activities Rupees
M4 = M3 + Post office savings Money (April 2017- March 2018) (approximately)
Deposits Received 7.17 lakh crore
Informal Financial Institutions Loans sanctioned 7.84 lakh crore
Informal financial institutions are Loans to Micro & Small
enterprises 1.40 lakh crore
easily approachable to the customers with
flexible procedures. But there are issues like Priority Sector Loans
the safety of items pledged high rates of including Agriculture 3.56 lakh crore
interest and modes of recovery.
Loans to weaker section 1.04 lakh crore
People who live in a particular place or
those who are involved in a certain work join Education Loan 1.67 lakh crore
together as a group and start saving. These are
called as Self Help Groups. The nationalised Credit Deposit Ratio 109.34%
banks provide help to these groups through Source - Report of 154th state level Bankers Committee
micro-credit. . Credit given though Self Meeting - 2018
Help Groups for street vendors, fishermen,

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Glossary • A government has the responsibility to

regulate the money supply and oversea
1. Monetary - relating to money or
circulation.
currency
• All the major and important banks are
2. Thrive -
flourish or grow
nationalised in India.
vigorously
• The Reserve Bank of India started its
3. transaction -
buying or selling
operations on 1st April 1935. It was
something
permanently moved to Mumbai from
4. commercial - buying and selling on a the year 1937.
large scale
• There is a close relationship between
5. subsistence - self sufficient money and price.
6. reserve - retain for future use • Currency is the medium of exchange in
7. standard -
something used as a a country.
measure • Money acts as a medium of exchange, a
8. deferred - put off to a later time; store of value and a unit of account.
postpone •
Credit is given by banks and other
9. entrepreneur - a person who sets up a institutions to people to fulfil their
business financial needs.
10. micro credit - lending small amounts Exercises
of money at low interest I Choose the
to new businesses
correct answer
11. pledged - give as security on a
1. Certain metals like
loan
_____________ (gold /
iron) were used as a medium of exchange in
Recap ancient times.
2. The Head Quarters of the RBI is at

•
Barter system flourished where
_____________ (Chennai / Mumbai).
civilizations thrived.
•
Gold, silver and copper were called 3. International trade is carried on in terms of
ancient money. _____________ (US Dollars / Pounds).
• Pepper and spices took a major share of 4. The currency of Japan is _____________
exports. (Yen/ Yuan)
• Paper money was introduced because II Fill in the blanks
metal supply was limited.
1. _____________ System can be considered
• ATMs help a person to withdraw money as the first form of trade.
at any time of the day.
2. Mony supply is divided into ___________.
•
Mobile banking is widely used
nowadays. 3. The first printing press of the RBI was
started at _____________.

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4. _____________ act as a regulator of the i) 1 is correct; 2 is wrong

circulation of money.
ii) Both 1 and 2 are correct
5. The thesis about money by B.R. Ambedkar
iii) Both 1 and 2 are wrong
is _____________.
iv) 1 is wrong; 2 is correct
III Match the following 1. Most of the international trade transactions
1 US Dollar - Automatic Teller Machine are carried out in US dollars.
2 Currency in - Substitute of money 2. No other country except the US carries out
circulation trade in the world.
3 ATM - Universally accepted currency
i) Both the statements are correct.
4 Salt - Saudi Arabia
5 Riyal - 85% ii) Both the statements are wrong.
iii) 1 is correct; 2 is wrong
IV Give short answers
iv) 1 is wrong; 2 is correct
1. Why was money invented?
2. What is ancient money? VII Project and activity
3. What were the items used as barter during 1. Visit a local museum and collect information
olden days? about the coins displayed there.
4. What is spice route? Why was it called so? 2. Imagine you are going abroad for a Post
5. What is natural money? Graduation course in architecture. Write a
letter to the Branch Manager regarding an
6. Why were coins of low value printed in education loan.
large quantities?
7. What is meant by foreign exchange? VIII Life skills
1. Abserve at a 20 rupee note. What is written on
V Answer in detail it?
1. Explain how money is transacted in the 2. Prepare a family budget for a month.
digital world.
2. Explain in detail about the role of RBI in

the country.
3. Write in detail about the various functions

of money.
4. What are the divisions of money supply?
VI Write the correct

statement.
1. The barter system flourished wherever
civilizations thrived.
2. This was the initial form of trade.

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GLOSSARY
History
infidel – மத நம்பிக்கையற்ற
aqueduct – வாய்க்கால்
heathen – கிறித்தவரல்லாதவர்
ecclesiastical – திருச்சபை சார்ந்த
illustrious – ஒப்பற்ற
oligarchy – செல்வர்களின் குழுஆட்சி
ill-afford – முடியாத
antagonize – பகைத்துக்கொள்
empirical knowledge – சான்றுகள் அடிப்படையில் பெற்ற தரவுகள்
bureaucracy – அரசு அதிகாரவர்க்கம்
dynamism – செயலாற்றல்
chronically – த�ொடர்ந்து இருக்கிற
enslaved – அடிமைப் படுத்தப்படல்
impoverishment – ஏழ்மையாக்கு
martyrdom – க�ொள்கைக்காக உயிர்த் தியாகம் செய்தல்
de-facto – உண்மையான
embassy – நாட்டுத் தூதுவரின் அலுவலகம்
incursions – திடீர் தாக்குதல் (அ) திடீர் படையெடுப்பு
intrusion – தலையீடு
mercenary – கூலிப்படை
onslaught – கடுந் தாக்குதல்
disgusted – வெறுப்படைதல்
observances – கடைபிடிக்கப்படுபவை
pillage – க�ொள்ளையடி
saddle – சேணம்
stirrup – குதிரைய�ோட்டி காலை வைத்தற்குரிய வளையம்
realm – அதிகார எல்லை
retainers – அடியாட்கள்
turmoil – குழப்பம்
repulse – விரட்டியடி
interdict – சமயச் சடங்குகளைத் தடை செய்
sacraments – கிறித்தவ மதச் சடங்குகள்
watershed – சிறப்புமிக்க
awe-inspiring – மலைப்புத் தருகிற
bastion – அரண்
genealogy – பரம்பரை வரலாறு; வம்சாவளி
aesthetic value – அழகியல் தன்மை
assimilate – உள்வாங்கு
commentaries – விளக்கவுரை
alienate – அந்நியப்படுத்து
concomitant – த�ொடர்ந்து வரக்கூடிய
agglomeration – கூட்டமைப்பு
embellish - மெருகூட்டு
genocide – இனப் படுக�ொலை
feudalism – நிலப்பிரபுத்துவம்
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purgatory – பாவம் ப�ோக்கப்படும் இடம்

indulgence – பாவமன்னிப்பு
inquisitive – அறியும் ஆர்வமுள்ள
epidemic – த�ொற்று ந�ோய்
annihilation – அழித்தொழித்தல்
vernacular languages – தேச ம�ொழிகள்
excommunication – மதநீக்கம்
Geography
Ocean Floor - கடல் தரைப்பரப்பு
Gradiant - சாய்வு
Trench - அகழி.
Seamounts - கடல் குன்றுகள்
Guyots - ஆழ்கடல் மட்டக்குன்றுகள்
Atoll - வட்டப்பவளப்பாறை
Ridge - கடலடி மலைத்தொடர்
Inherent energy - உள்ளார்ந்த ஆற்றல்
Environment - சுற்றுச்சூழல்
Extinction - அழிதல்
Terrestrial Biome - நிலம்வாழ் பல்லுயிர்த்தொகுதி
Lumbering - மரம் வெட்டுதல்
Pastoral - கால்நடைவளர்ப்பு
Estuary - ப�ொங்குமுகம்
Limnology - நன்னீர் உயிரியல்
Etymology - ச�ொல் பிறப்பியல்
Civics
Fundamental - அடிப்படை
Racial - இன
Ethnicity - இனக்குழு
Remedies - தீர்வுகள்
Intervene - தலையீடு
Compensation - இழப்பீடு
Victim - பாதிக்கப்பட்ட
Abandoned - கைவிடப்பட்ட
Trafficking - கடத்தல்
Economics
Foreign Exchange - அந்நிய செலாவணி
Export - ஏற்றுமதி
Money Exchange - பணப்பரிமாற்றம்
Natural Money - புராதனப் பணம்
Electronic Transfer - மின்னணு பரிமாற்றம்
Fixed Deposit - வைப்புத் த�ொகை
Organisations - நிறுவனங்கள்
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STANDARD NINE
ECONOMICS
TERM III

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UNIT
Tamil Nadu Agriculture
1
Learning Objectives
To know about the agricultural activity in Tamilnadu

To know the extent of land under cultivation in Tamilnadu
To understand the importance of water and irrigation in agriculture
To know about various crops grown in Tamilnadu
To analyse the crop productivity in Tamilnadu
Most of the people of Tamil Nadu workers also reduced during the same
depended on agriculture at the time of period. According to the 2001 census,
independence and even after 40 years of 49.3% out of the total population of
independence. That situation is being workers were involved in agriculture. The
changed in the recent years. It has been
percentage has reduced to 42.1 in the next
noticed that the number of farmers in
10 years. In 2011 there were three crore
Tamilnadu has got reduced d uring the
29 lakh workers in Tamilnadu of which 96
last 10 years according to the 2011 census
data. Similarly the number of agricultural lakh were agricultural workers.
1. People of Tamil Nadu and Agriculture 132

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In 2011, nearly 55% of the women were farmers has increased in India. In contrast, the
involved in agriculture whereas nearly one third number of marginal farmers is decreasing in
(35.3%) of the male population was involved in Tamil Nadu. This shows that the farmers are
doing other occupations.
agriculture during the same year.
Types of land usage
Sectors of people involved The total geographical area of Tamil
in agricultural activities Nadu is one crore 30 lakhs and 33 thousand
hectares. Out of this only one third of land is used
A major portion of the workers involved
for agriculture (45,44,000 hectare). 17% of the
in agricultural activities are landless labourers.
land is used for non agricultural use. Nearly the
All the land holders do not have the same amount
same size ( 2125 thousand hectares) of land are
of land. Many have very little land and very few
forests. About 4% of the total land is unusable.
people hold large areas of land.
One tenth of the land is barren. Other fallow
During 2015-16 , there were 79,38,000 lands are 13 percent. So nearly one-fourth of the
cultivators in Tamil Nadu. But five years land is barren and we have to be concerned of
earliers there were 81,18,000 cultivators. the increasing size of the barren land. Grazing
There was a reduction of 1,80,000 cultivators land and cash crops occupy slightly more than
in these five years. Similarly, the area under 5% of the total land area.
cultivation also reduced from 64.88 lakh
hectares to 59.71 lakh hectares during the The size of the total cropping land in
same period. That is, the state of Tamil Tamil Nadu is 4,544 thousand hectare and this
Nadu had lost nearly 1,03,400 hectares on an keeps on changing every year. Sufficient rains
average during these five years. at the proper period will increase this extent of
land. Failure or shortage in rainfall leads to the
reduction of land usage for cultivation. A small
part of this area gives a chance to crop more
than once in a year. The extent of this area also
changes every year. This land extent was 9 lakh
hectare in next year but was reduced to 6 lakh
hectare, due to lack of rainfall. This area will be
Most of the cultivators in Tamilnadu more or less stable only when there is a stable
are micro farmers who cultivate in an area and reliable water source.
less than 1 hectare. Micro farmers account to
around 78% of the total cultivators, while the If there is good water for a land, more
area cultivated by these micro farmers is just than one crop can be cultivated in a year. In
36%. Small farmers cultivating 1-2 hectares of some land, two or even three crops can be
land cover 14%, while the land cultivated by cultivated. If one hectare land is cultivated
them is 26%. once in a year, then the net land and the
Cultivators of shedule caste farmers are cultivated land is also one hectare only. If the
only one percent in Tamilnadu. 96% of this one land is cultivated twice, then the net land area
percent are small, micro farmers. is only one hectare, but the cultivated land
The total land area under agriculture is area accounts to two hectare. If calculated
shrinking fast not only in Tamilnadu, but also in the same way for Tamil Nadu for the year
throughout India. The number of marginal 2012 -13, it is 45 lakh 44 thousand hectare net
133 People of Tamil Nadu and Agriculture .1

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land area whereas the cultivated land comes agriculture creates many hardships too. There
to around 51 lakh 40 thousand hectare. So, would be no sufferings if the amount of water
it is clear that 5,96,000 hectares is cultivated taken from the underground and the amount
more than once. While reliable water supply of water that goes into the underground during
increases, the possibility of cultivating the the rainy season are equal. On the contrary,
land more than once increases. Thus when as the amount of water taken increases, the
the total area of cultivable land area increases, ground water goes down resulting in complete
it results in the increase of agricultural dryness or change into unusable water.
production. The Union Ground Water Board is
In 2012-13, out of the total cultivated constantly monitoring the level and nature of
land, nearly 72 percent is used for food crops ground water. This continuous monitoring has
and the remaining for non-food crops. categorized the Panchayat Union (blocks) in
terms of the amount of groundwater used. 139
Water resources for
blocks in Tamilnadu are identified as excessive
agriculture users of groundwater and 100 blocks as nearing
There are no perennial rivers in Tamil the stage of excessive usage of groundwater. 11
Nadu. Tamil Nadu receives the required water blocks have been identified with reduced water
from the Northeast and Southwest monsoons. quality. Only 136 blocks have enough quantity
When the South West monsoon rains are high and quality water for usage.
in the catchment areas of the Cauvery River From this, we come to know that:
in Karnataka dams get filled and in turn the
Cauvery river in Tamil Nadu gets water. 1.
Tamil Nadu agriculture is dependent on
groundwater.
The area under irrigation is about 57
percent of the total area under cultivation. 2. It is very urgent and necessary to regulate the
usage of underground water.
Northeast monsoon (Oct-Dec) is a major
source of water for Tamil Nadu. The Northeast 3. This is very important for sustainable farming.
monsoon rains are stored in reservoirs, lakes, Irrigation and crop types
pond and wells for cultivation. Conventional
water bodies like lakes, ponds and canals Crops in Tamilnadu
provide water for agriculture in Tamil Nadu. All cultivated crops can be classified as
2,239 canals run through Tamil Nadu covering food crops and non-food crops. 57 percentage
a length of 9,750 km. There are 7,985 small of the total land under food grain cultivation
lakes, 33,142 large lakes, 15 lakh open wells and is irrigated. In 2014-15, 59 percentage of food
there are 3,54,000 borewells in the state where crops and 50 percentage of non food crops were
agriculture is carried out with the help of these
irrigated in Tamilnadu.
water resources.
The area of land that is irrigated using
water from lakes is very low. Nearly 3.68 lakh
hectares of land obtain water from lakes. The
canals provide water to 6.68 lakh hectares.
Borewells irrigate 4.93 lakh hectares and open • River Cauvery is the 3rd largest river in
wells provide water to 11.91 lakh hectares of land. South India. Its length is 765 km.
Agriculture in Tamil Nadu is dependent • The dams constructed across Cauvery in

mostly on groundwater. Use of ground water for Tamil Nadu are Mettur Dam, Kallanai

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The total area of land cultivated in Tamil Paddy cultivation is carried out at a
Nadu was 59 lakh and 94 thousand hectares large scale of 30 percent cultivated land area
in 2014-2015. Out of this non-food crops and other food crops in 12 percent area. Millets
were 76%. are cultivated in a very low percentage of area.
Sorghum(Cholam) cultivation in 7 per cent
Virtual water land area, cumbu in one percent and ragi in
The term 'virtual water' was introduced 1.7 per cent. Other millets occupy 6 per cent in
by Tony Allen in 1990. the year 2014 - 2015.
The water consumed in the production The area cultivatable land changes
process of an agricultural or industrial every year as a result of many factors such
product is called 'virtual water'. as rainfall, availability of water, weather and
It is the hidden flow of water when market prices
food or other commodities are traded from
one place to another. For instance, it takes Decadal growth in
1340 cubic metres of water (based on the agriculural production
world average) to produce one metric ton of
wheat. That is, if one metric ton of wheat is The total quantity of foodgrains
exported to another country, it means that produced in Tamil Nadu in the year 2014 -
1340 cubic metres of water used to cultivate
2015 was one crore 27 lakh 35 thousand tonnes.
this amount of wheat is also being exported.
Paddy alone accounted to 80 lakhs tonnes. The
India is the largest global freshwater
contribution of paddy to the total amount of
user. India has been the fifth largest exporter
of virtual water in the world food production is 62%. Maize production
was 20%, corn 7%, ragi 3% and another 3%
occupied by black gram, while other food crops
contributed a very meager amount to the total
food production in Tamil Nadu.
The amount of production varies
depending on the amount of land being
One Drop is equaivalent to 50 liters of virtual water
cultivated.
Diﬀerent water sources for irrigation

Irrigated area
Wells -62% Canals - 24% Lakes - 14%

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Next to paddy, maize stands second in

Micro irrigation
the production (8,824 kg/hectare).
Micro irrigation technology is a very
good remedial measure to tackle shortage in
irrigational water. This irrigation technology
helps to have a higher yield when compared
to the traditional irrigation methods. As
only required amount of water is supplied
at regular intervals, it increases the ability
of water usage and productivity of the crop
resulting in reduction of labour expenses and
weed growth in the field. As the fertilizer is
2,093 kg/hectare corn, 3,077 kgs of rye
distributed through water, it increases the
(cumbu) and 3348 kgs of ragi were produced
usage of fertilizer and the yield. As Tamil Nadu
during the same period.
gets insufficient rainfall, the government has
taken many measures to implement micro Black gram, one of the largest
irrigation for proper distribution of water to cultivated pulses, produced 645 kg per
crops that require more water. hectare. Production of sugarcane and ground
nut (Manila) were 107 tons and 2,753 kg per
hectare respectively.
The productivity of crops continues
to increase. For example the productivity of
paddy in 1965 - 66 was 1,409 kg. It increased
to 2,029 kg in 1975-76 and 2,372 kg in 1985-86.
It increased to 2,712 kg after a decade. The
production was 4,429 kg in the year 2014-15.
In the past fifty years, the productivity of paddy
The yield of productive has increased more than three times.
crops The food grain production capacity,
has increased about 3.5 times between 1965-
The amount of production depends not
66 and 2014-15. Similarly, the total foodgrain
only on the area but also on the productivity of
production has risen by 2.5 times during
crops.
this period. In 1965-66, the total food grain
Production capacity of paddy in Tamil
production was slightly more than 50 lakh
Nadu was 4,429 kg per hectare in 2014-2015.
This capacity was 3,039 kilograms in 2010-2011 tonnes and in 2014-15, the production increased
revealing the increase in productivity. and was slightly below one crore 28 lakh tonnes.
We find that both the productivity and
food production in Tamil Nadu continue to
increase. However, the area under food grain
cultivation has reduced in the same period. Though
there was a reduction in the area of production, the
total amount of production has been maintained
and there is an increase of productivity.

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Glossary EXERCISE
I. CHOOSE THE CORRECT
Fallow - Uncultivated ANSWER
Perennial - Flowing throughout the year 1. Irrigated land surface out of cultivable land
Catchment areas -
The area from which is.
rainfall flows into a river, a) 27% b) 57% c) 28% d) 49%
lake or reservoir.
2. Out of the following, which is not a food
Yield - Produce or product crop
Productivity - Ability to produce a) Bajra b) Ragi

c) Maize d) Coconut
Recap 3. The productivity of paddy during the year

2014-2015
The number of people involved
in agriculture and the land under a) 3,039 kg b) 4,429 kg
cultivation is declining in Tamil c) 2,775 kg d) 3,519 kg
Nadu.
4. Both agricultural productivity and food
While the number of marginal productivity has
farmers is increasing in India, it is
decreasing steadily in Tamil Nadu. a) decreased b) not stable
Out of the total geographical land c) remained stable d) increased

area, only one percent is under 5. The North-East monsoon period in
cultivation and one fourth is left Tamilnadu
fallow.
a) August – October
Areas with good water facilities can
be cultivated upto three times a year. b) September – November
South West and North East monsoons c) October – December
are the main sources of water for
d) November – January
agriculture in Tamil Nadu. So Tamil
Nadu's agriculture is dependent on II. Fill in the blanks
ground water.
1. The major occupation of people in
Crops are divided into food and non- Tamilnadu is ---------------------------
food crops.
2. Tamilnadu receives rainfall all from the
Major food crops of Tamil Nadu ------------------ monsoon.
are paddy, maize and ragi. Coconut
stands first in non-food crops. 3. The total geographical area of Tamil Nadu is
--------------------------- hectares.
Recent researches show that the
productivity of crops is steadily
increasing.

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III. Match the following V. Answer in Detail

1. Give a note on the water resources of Tamil
1. Non-food crops - 79,38,000
Nadu
2. Dhal - less than 1 hectare
2. What are the problems faced by using
of cultivable land
ground water for agriculture?
3. North east - October –
monsoon December 3. Discuss about the source of irrigation for
agriculture.
4. Small farmers - Urad Dal, Toor Dal,
Green grams 4. Tabulate the crops grown in Tamil Nadu.
5. No. of farmers - 2016 – Coconut, VI. Activity
in 2015 Channa
1. Analyse the cultivation of food crops and
IV. Give short Answers non-food crops of your village / area.
1. Give two examples for each food crop and 2. Thanjavur is famous for which crop? Why is
non-food crops it so? Research.
2. What are the factors responsible for the 3. Collect statistical data, where paddy is being
changes in cropping area? cultivated at Thanjavur District, which is
3. Who monitors the quantity and quality of called the Nerkalanjium of Tamil Nadu.
ground water?
4. Tabulate the productivity of paddy from
1965 to 2015.
5. On what factors does crop cultivation
depend? List out the factors on which crop
cultivation depend.
6. Differentiate between small and marginal
farmers.

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UNIT
MIGRATION
2
Learning Objectives
To understand the concept of migration

To learn about the extent of migration in India and Tamil Nadu
To analyse the factors underlying migration
Concept of Migration In the Census of India, migration is

enumerated on two bases
In any settlement-village or town-
(i) Place of birth: If the place of birth is different
change in population occurs due to birth,
from the place of enumeration (known as
death and migration. Of these three
life-time migrant).
components of population change, birth
and death is clearly identifiable events while (ii) Place of residence: If the place of last
migration poses the maximum amount of residence is different from the place of
problem with regards to its definition and enumeration (known as migrant, by place
measurement. As almost everyone keeps of last residence).
moving most of the time, it is not easy to
define which of these moves have to be
classified as migratory moves.
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Case Study Extent

Extent of migration
of migration in in
1
India India and Tamil
and Tamil NaduNadu
“Dad, I have to write an essay about my
native place. Will you please help me? Please In India, the Census of 2011 enumerated a
also tell me why you moved away from our total population of 121 crores, of which 45 crore
beautiful village?” people were reported as migrants, according
“Sure. I will tell you". to the definition of the place of last residence.
Similarly, in Tamil Nadu out of 7.2 crore people,
“We hail from a small village called
3.13 crore people were counted as migrants, in
Sattapathu near Ambasamudram town in 2011. That is, the percentage of migrants was 37
Tirunelveli district. The village is on the banks percent in the country, while it was at a much
of Thamirabarani river and as you pointed higher rate in Tamil Nadu at 43 percent.
out, our native place is exceptionally serene
and beautiful with paddy fields, banana Generally, one tends to associate migration
with urban areas. However, we find that in India
groves and temples. When I was a child I
as well as Tamil Nadu, the extent of migration is
used to walk 7 kms everyday to the nearest
much higher in rural areas compared to urban
school at Ambasamudram. My friends and
areas. In 2011, 37 percent of the population are
I used to have so much of fun on the way
counted as migrants in rural areas while the
to school. However, after I completed my
corresponding percentage in urban India is
schooling, I had to earn money to educate
27 percent. In Tamil Nadu, migrants account
my younger brothers. So, I moved to Bombay for 41 percent in rural areas and 35 percent in
(Mumbai) and stayed with a distant relative urban areas, in 2011. That is, the mobility of
and searched for a job. In a month’s time, my population in rural areas is greater than that in
relative could place me as a stenographer in urban areas.
a private company. Later on, that company
Further, one usually associates mobility
gave me a transfer to Madras city (Chennai).”
with males rather than females. However, an
“You had to move for the safe of examination of data clearly indicates that a
employment and earn money? Is it so?” larger proportion of females are reported to be
migrants compared to males. In the country as
“Yes, you are quite right. People also move a whole, 53 percent are female migrants while
for different reasons. Your elder brother has 23 percent are male migrants, in 2011. In Tamil
now moved to England for higher studies. Nadu, the picture is very similar, with more than
Your sister has moved to Delhi to be with her half the females (52%) reporting their status
husband who is employed there. Your aunt, as migrants, by place of last residence, and 35
who lived in the neighbouring village has percent are male migrants.
moved to our native village to look after my
Now, why is there such a large percentage
aunt. So you have to understand that people
of migration among women? 70 percent in
move for different reasons- for education,
India and 51 percent in Tamil Nadu report
employment, marriage, etc...”
marriage as the reason for migration of
“Thank you dad, I understand why people females in 2011. That is, marriage and the
move. I also understand that movement can movement associated with marriage appear
be either within the country-from village to to be a major factor responsible for women’s
town or village to village or from town to mobility in India and Tamil Nadu. Movement
town- or international. Now, please help me related to work and employment appears to be
with the essay on our native place. the driving force for migration, among men.
Of all the male migrants in India, 28 percent
141 MIGRATION
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report ‘work’ as the major reason for their • Cuddalore, Karur, Thiruvannamalai, Vellore,
migration, in 2011. The corresponding Namakkal, Salem, Dindigul, Krishnagiri,
percentage in Tamil Nadu is 26 percent. Nilgiris and Dharmapuri districts record
low number of emigrants.
N
W
S
E
This study also provides information about the
Jammu &Kashmir
sex and destination of migrants Tamil Nadu.
Himachal Pradesh
Punjab
Haryana
Urakhand
• Of the total migrants who go to foreign
sh
countries, nearly 20% have chosen to go

Delhi de
Pra
chal
na
Sikkim Aru
Rajasthan Uar Pradesh
to Singapore, while 18% to the United

Nagaland
Assam
Bihar
Mehalaya
Manipur
Arab Emirates, 16% to Saudi Arabia, 13

Jharkhand Tripura
Gujarat
West Mizoram
Madhya pradesh
Bengal
% to the United States of America; and

h
ar
Odisha
sg
a
Malaysia, Kuwait, Oman, Qatar, Australia

ch
Maharashtra
Telungana
and England are also refered as important

a
Goa
tak
destinations for migrants from Tamil

rna
Andra Pradesh
Ka
Arabian Sea Bay of Bengal
TamilNadu Nadu in the year 2015.

Kera
la
Andaman Nichobar Islands
lakshadweep Island
Indian Ocean Srilanka • Of the international migrants, 15 percent
Not to Scale
are women, while 85 percent are men.

India - Extent of migration On the question of educational qualifications
To sum up, in Tamil Nadu, two out of every of migrants from Tamil Nadu, the study reveals
five persons is reported to be a migrant in the that in 2015 about 7 % were illiterates; 30 % have
year 2011. Incidence of migrants is higher in completed. Class X; 10 % have completed Class
rural areas and larger among women. Tamil XII; 15 % had undergone vocational training;
Nadu has a history of migration and people 11 % were graduates; 12% were professionally
have moved for various reasons such as trade, qualified and 11 % had Post Graduate degrees.
business, employment etc, to various countries.
The study clearly reveals various
During the colonial period, labourers had
occupations undertaken by the migrants:
moved to other colonies seeking work and
highly skilled proffessions on one hand and low
wages. In the more recent period workers from
skilled occupations on the other, along with a
Tamil Nadu have been moving to countries
large number of semi-skilled occupations.
in the Gulf, United States of America and
Australia. In 2015, an independent research
study was conducted to understand the level, Factors underlying
Factors underlying
2
nature and pattern of migration in Tamil Nadu migration
migration
. This study has made some interesting findings,
as discussed below: The extent and nature of
• Of the total migrants in Tamil Nadu, 65 migration in any society is
percent have migrated or moved abroad basically determined by the
while 35 percent have moved within the nature of the development
country. process experienced by that
society. That is, the type
• Chennai district has recorded the and scale of development
maximum number of emigrants followed achieved by the agricultural and industrial
by Coimbatore, Ramanathapuram and sectors in an economy would determine the
Tiruchirapalli districts. migratory patterns.
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In India and Tamil Nadu, though the outcome or consequence of migration etc.
agricultural and industrial sectors have grown Poorer sections of the population migrate as
over the years, inequalities still exist in asset a survival strategy, in response to distressing
and income distribution. Endemic poverty conditions in rural areas. Migrants from
continues to be a major problem. better-off sections migrate to improve their
Reasons for Migration in India living standards.
Further, spatially, there would be a
9.6% 14.7% 1.2% tendency for migrants to converge on enclaves
3% of growth-either in urban areas or in rural
21% areas.
The pattern of migration is very complex,
6.7% 43.8% comprising of a number of streams:
• rural to rural; rural to urban; urban to rural;
urban to urban
Work / Employment • short, medium and long distance migration
Business streams
Education • long-term stable migration and short-term
Marriage circulatory type of movements
Moved after birth
Moved with household Each of these streams would consist of
different types of migrants, (from different social
Others
classes) each with its own reason for migration.
The growth processes have also created The extent and nature of these migrant streams
spatial inequalities, by leading to enclaves of would essentially depend on.
growth. The migration patterns observed in • pressures and aspirations experienced by
a developing society such as ours correspond people at the origin of migration
to these inequalities (economic, social, spatial
• constraints imposed on mobility at the
etc) created by the development processes. origin of migration
Therefore, any migrant stream would consist • opportunities at the destination and
of heterogeneous sub-streams. For example, if availability of information regarding these
we consider the rural-urban migrant stream, opportunities and
it would comprise of rural rich and the rural
• the cost of migration
poor, each with its own reasons and motivation
for migration, the mode of migration, the
The largest migration corridor in

the world in 2010 was Mexico –
U.S.A.
The Arctic tern has the longest
migration distance of any bird in
the world. Migration for survival
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3 Migration
Migration Policies
Policies GLOSSARY
Policies to address the problem of migration Census - To count the number of
in developing countries like India essentially people living in a country
aim at the following: Migration - Process of moving from
one place to another
• To reduce the volume of migration: As Population - The total number of
a large part of migration is a reflection persons inhabiting a country, city,
of poverty and insecurity faced by large district (or) area.
sections of the rural people, the focus of Migrants - A person who moves from
intervention has to be in rural areas. Rural one place to another in order to find
work or better living conditions
development policies to reduce poverty and
Urban - Relating to city or town
insecurity would be essential to reduce the
Rural - Area located outside a city or
rate of migration. town
Colonial Period - A period in
• To redirect the migrant streams:
a country’s history when it was
Redirection of migrant streams, away from
administered by a colonial power
big metropolitan cities is a desirable policy
Skilled - Having the ability needed to
option. This policy can help in reducing do a job well
spatial inequalities by suitable strategies, Semi-Skilled - Having only a small
such as developing a more dispersed pattern amount of training
of urbanisation. Inequality - It is the difference in
social status, wealth or opportunity
Recap between people or groups
Heterogeneous - Consisting of
C hange in population occurs due to
things that are very different from each
births, deaths and migration.
other
The mobility of population in rural
areas is greater than that of the urban
areas. EXERCISE
Marriage is the major factor responsible I. Choose the correct answer.
for women’s mobility in India and in 1. According to the 2011 census, the total
Tamil Nadu. population of India was .

O ccupation is the major factor
a) 120 crore b) 221 crore
responsible for male migrants in India.
c) 102 crore d) 100 crore
The extent and nature of migration in
any society is basically determined 2. has recorded the maximum
by the nature of the development number of emigrants.
process experienced by that society. a) Ramanathapuram b) Coimbatore
c) Chennai d) Vellore

T he poorer sections of the people
migrate for survival, but migrants from 3. D
uring 2015, of illiterates
better-off sections migrate to improve were migrants from Tamil Nadu.
their living standards.
a) 7% b) 175% c) 23% d) 9%
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4. Th
e poorer sections of the population 6. What does the study reveal about the
migrate . occupation undertaken by migrants?
a) as a survival strategy V. Answer in details.
b) to improve their living standards 1. State the aims of migration policies.
c) as a service
2. Discuss the patterns of migration.
d) to get experience
3.
Elucidate about some of the interesting
II. Fill in the blanks. findings on migration in Tamil Nadu.
1. Migration is enumerated 4.
Analyse the educational qualification of
on __________ and migrants from Tamil Nadu in 2015.
__________ bases.
VI. Write the correct statement
2. The mobility of population
in rural areas is __________ than urban 1. In recent times workers from Tamil Nadu
areas. are moving to Africa.
3. In rural India, as per census 2011, 2. In Tamil Nadu, the extent of migration is
__________ percent of the population are much higher in urban areas compared to
counted as migrants. rural areas.
4. __________ is the major reason for female 3.
Any migrant stream would consist of
migration. homogenous sub-streams.
5. Any migrant stream would consist of 4. Two out of every 10 persons is reported to
__________ sub streams. be a migrant.
III. Match the following. VII. Project & Activity
1. Migration policy - Work 1. Prepare statistical data by interacting with
2. Female migrants - low incidence of your class mates and school mates and find
imigration out how many families have migrated.
3. Chennai - maximum number 2. Prepare an album of pictures on Rural to
of emigration Rural, Rural to Urban, Urban to Rural and
4. Better off migrants - marriage Urban to Urban migration.
5. Salem - to reduce the VIII. Life Skills
volume of migration
6. Male migrants - to improve the living Collect data on various languages spoken in
standards your class and represent through a pie chart.
IV. Give short Answers. REFERENCE BOOKS

1. Enlist the reasons for migration.
1. Rajan S. Irudaya et. al. 2016. 'Non
2. What are the major factors responsible for
-Resident Tamils and Remittances: Results
female migrants in India?
from Tamil Nadu Migration Survey
3. Name four districts in Tamil Nadu which 2015'. Centre for Development Studies,
record low number of imigration. Thiruvananthapuram.
4. What are the factors responsible for the
poorer sections and better-off sections to INTERNET RESOURCES
migrate.
5. List the four destinations and the percentage 1. www.censusindia.gov.in/2011census/2011-
of migrants from Tamil Nadu. D05-00-prov.xls
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GLOSSARY
History
Manhunt - மனித வேட்டை
Molasses - வெல்லப்பாகு
Embossed - ப�ொறித்த
Resentment - சீற்றம் / க�ோபம்
Repealed - நீக்கப்பட்ட / ரத்து செய்யப்பட்ட
Dock - கப்பல் துறை
Incorporated - இணைக்கப்பட்டுள்ள
Impoverished - வறிய நிலைக்கு ஆளாக்கப்பட்ட
Vehement - தீவிர / உணர்ச்சி வேகமுள்ள
Dogmatic - வறட்டுச் சித்தாந்தப் பிடிப்பு
Encyclopaedia - கலைக்களஞ்சியம்
Emboldened - துணிந்த
Reconcile - ஏற்றுக்கொள்ள
Intriguing - புதிராக
Proponents - ஆதரவாளர்கள்
Guillotine - தலையை வெட்டும் இயந்திரம்
Entrepreneurial class - த�ொழில் முனைவ�ோர் வர்க்கம்
Deformities - குறைபாடுகள்
Migrants – புலம் பெயர்ந்தோர்
Pauperized – வறியவர்களாக்கப்பட்டோர்
Tainted – களங்கமுற்ற
Frustrated – விரக்தியடைந்த
Perpetuating – த�ொடர்ந்து க�ொண்டிருக்கும்
Cartel – சர்வாதீனக் கூட்டமைப்பு
Scarce – கிடைப்பருமை / பற்றாக்குைற
Commemorate ஒரு நபர் அல்லது நிகழ்வு நினைவாகக்

–
க�ொண்டாடு
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Dwindle – அளவில் குறைதல்
Subjugation – அடிமைப்படுத்துதல்
Allegiance – விசுவாசம்
Rationale – காரணம்
Tutelage – பாதுகாப்பு
Emporium – வர்த்தக ஸ்தலம்
Penetration - ஊடுருவல்
Tricked - ஏமாற்றப்பட்ட
Flogging - கசையடி க�ொடுத்தல்
Relinquish voluntarily - பதவி ப�ொறுப்பைத் துற / கைவிடு
Remittance - அனுப்பிய பணம்
Diaspora - புலம் பெயர்ந்தவர்கள்
Abortive - த�ோல்வியுற்ற
Geography
Distribution of population - மக்கள்தொகை பரவல்
Population density - மக்களடர்த்தி
Migration - இடம்பெயர்தல்
Immigration - குடியிறக்கம்
Human settlements - மனித குடியேற்றம்
Liner Pattern - நேர்கோட்டு குடியிருப்புகள்
Circular / semicircular
pattern - வட்ட வடிவ (அ) அரை வட்ட வடிவ குடியிருப்புகள்
Star like pattern - நட்சத்திர வடிவ குடியிருப்பு

Triangular pattern - முக்கோண வடிவ குடியிருப்பு
Social forestry - சமுதாயக் காடுகள்
Fracking பாறைகளை உடைக்க பயன்படுத்தும் நவீன
-
த�ொழில் நுட்பம்
Miniature - ஒரு ப�ொருளின் மிகச்சிறிய அளவிலான மாதிரி
Spatial
ப�ொ ருள்களின் இடஅமைவு, பரப்பு மற்றும்
- அளவு சார்ந்தவை
Topography - நிலப்பரப்பின் இயற்கை த�ோற்றம்
E.M.R. (Electro
Magnetic Radiation) - மின்காந்தக் கதிர்வீச்சு
Spectral Signature - நிறமாலைக் குறியீடு
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Interpreter - ம�ொழி பெயர்ப்பாளர்

Satellite imagery - செயற்கைக்கோள் பதிமம்
3D – (Three Dimensional) - முப்பரிமாண
2D – (Two Dimensional) - இருபரிமாண
Riot - கலவரம்
Lair - குைக
Cataclysms - ேபரழிவு
Rehabilitation - மறுவாழ்வு
Mitigation - தணித்தல்
Inquisitive - ஆர்வம்
Hazard - இடர்
Civics -
Reservation - ஒதுக்கீடு
Amendment - சட்டத்திருத்தம்
Autonomy - தன்னாட்சி
Cantonment - இராணுவக் குடியிருப்பு
Committee - குழுக்கள்
Conceptualisation - கருத்துருவாக்கம்
Decentralisation - அதிகாரப்பகிர்வு
Dignitaries - பிரமுகர்கள்
Dissolution - ஆட்சியைக் கலைத்தல்
Grass root level - அடிமட்டம்
Judicial - நீதிமன்றம் த�ொடர்புடையது
Assault - தாக்குதல்
Rejuvanation - புத்துயிர் அளித்தல்
Revitalisation - புத்துணர்வளித்தல்
Revive - புத்தாக்கம்
Provincial Autonomy - மாகாண தன்னாட்சி
Consensus - ஒருமித்த கருத்து
Despotism - எதேச்சதிகாரம்
Executive - செயற்குழு
Judiciary - நீதித்துறை
Legislative - சட்டமன்றம்
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Monarchy - முடியாட்சி
Rigid - கடினமான
Economics
Fallow land - தரிசு நிலம்
Perennial - வற்றாத
Catchment areas - நீர் பிடிப்புப் பகுதிகள்
Yeild - விளைச்சல்
Productivity - உற்பத்தி
Census - மக்கள்தொகைக் கணக்கெடுப்பு
Migration - இடப்பெயர்வு
Population - மக்கள்தொகை
Urban - நகர்ப்புறம்
Rural - கிராமப்புறம்
Colonial period - காலனி ஆதிக்கக் காலம்
Skilled - திறமை வாய்ந்த
Inequality - சமத்துவமின்மை
Heterogeneous - பல வகைப்பட்ட
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STANDARD TEN
ECONOMICS

1 GDP AND ITS GROWTH.indd 209
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Unit - 1
Gross Domestic
Product and
its Growth: an
Introduction
Learning Objectives
To know about the meaning of Gross Domestic Product
To Understand the basic various measures of National Income
To Understand the composition of GDP
To know the contribution of different sectors in GDP
To know the economic growth and development and its differences
To know about Development path based on GDP And Employment
To understand the growth of GDP and Economic Policies
Introduction Imagine what happens in a hotel. You

place an order for two Idlis and a cup of tea.
After a long time you got in touch through Someone makes the idlis and tea and someone
email with a good friend of yours who lives else serves you.
abroad. When she asks “how are you?” you
An economist will say that in the hotel two
may answer “ my health is in good shape and
kinds of items are being produced . Obviously,
I am progressing in my studies, so I am doing
Idlis and tea are produced . These are tangible,
well, thank you”. Or your reply may be “ Not
physical things you can touch and feel.
very well. You see, I had to receive treatment
for some health problems and that adversely
affected my performance in my studies”.
Server
Your friend than asks you : “how is India Consumer
doing?” The answer to this query is a bit more
challenging because she is asking about the
condition of the entire nation ! Fortunately
economists have provided different measures
of answering your friend’s question , the most
widely used one being the Gross Domestic Goods
Product, or GDP. The GDP then is one way to
know if “ India is doing well” or “ India is not
doing as well as we would wish”.
DEFINITION OF GDP
To understand how the GDP tells us how
India is doing, you should understand what
GDP is.
Gross Domestic Product and its Growth: an Introduction 210

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Economists call such tangible items “goods”. The GDP solves this problem by
These goods are not free but have to paid for. measuring the goods and services in the
Though you don’t realise it in addition to currency of the country, which is the rupee
these tangible things called goods, something else in the case of India. The rupee values are
is being produced : the work done by the cooks derived from the prices at which the goods
and the people who serve the food. The activity and services are sold in the market. Only
of cooking and serving is not something you can those goods and services with a market value
feel and touch. Such activities are not tangible are included in the GDP.
but are nevertheless crucial for you to enjoy the This implies that unless a good or service is
food. Economists call such activity “services”. As sold in the market, it is not included in the GDP.
in the case of goods, these and other services are For example if you pay ` 50 to get a manuscript
not free but have to be paid for. typed in a computer centre, the service is included
What happens everyday in a hotel happens in the GDP since it is sold in the market. If you
nation wide: goods and services are produced type the manuscript yourself , the service typing
and paid for and this what the GDP measures. a manuscript is not included in the GDP since
The GDP is defined follows: you did not purchase it for a price in the market.
The GDP is the market value of all the Final goods and services: Economists
final goods and services produced in the Tyler Cowen and Alex Tabarrok say that “final
country during a time period. goods and services” are the goods and services
which will be used or consumed and will not
Every part of the definition is important.
form a part of other goods and services. The
Goods and services: as you know by goods and services which will be used for
now, goods are tangible items while services are producing other goods and services and will
activities which are intangible . form a part of the goods and services produced
Market value: This is the price at which are called “intermediate goods”.
goods and services are sold in the market. Only the final goods are included in the
The GDP measures all the goods and services GDP. Intermediate goods are not counted
produced in the country. For this, we have to add in calculating the GDP because their value
all the goods and services produced. However a is included in the final goods. So if the
nation produces a wide range of goods like rice, intermediate goods are included in the GDP it
shoes , trains, milk, clocks, books and bicycles. will result in what is called “double counting”.
If only the quantities are taken into account, For example, a cup of tea bought in a hotel
there is no meaningful way to add these up. For is a final good because it is consumed and does
example, how do you add 1000 litres of milk with not form a part of producing something else. So
500 clocks?! Likewise there is no meaningful the market value of the cup of tea, being a final
way to add the quantities of services since a wide good, is included in the GDP. Sugar which is
range of services are produced , such as the work mixed in the tea is an intermediate good because
done by doctors, police, fire brigade, teachers, it is used in making tea and forms a part of the
bus drivers and district collectors. tea served. Suppose the tea is priced ` 10 a cup,
When we cannot add the quantity of one of which the value of sugar used is ` 2. So the
type of good with another type of good or one price of the cup of tea includes the ` 2 price
type of service with another type of service, of the spoon of sugar. If this value of sugar is
certainly there is no sensible way to add the included in the GDP , it will be counted twice:
quantities of goods produced with those of as a spoon of sugar and again as a part of the cup
services produced ! How would we add the of tea. This is “double counting” and to avoid it
quantity of milk produced in the country with the intermediate goods like sugar are excluded
the service produced by teachers?! from GDP.
211 Gross Domestic Product and its Growth: an Introduction

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Should the market value of utensils used to Product is obtained from the Gross Domestic
brew the tea be included in the GDP? You may Product by deducting the Quantum of tear and
argue that since the utensils are bought not as final wear expenses (depreciation)
goods but to produce tea, they are intermediate NDP = GDP − Depreciation
goods and so they should not be included in the
GDP. However the utensils, unlike sugar, do not 5. Per Capita Income (PCI)
form a part of the final good , the cup of tea. For
Per capita Income or output per person is an
this reason they should be included in the GDP.
indicator to show the living standard of people in
1.1 National Income a country. It is obtained by dividing the National
‘National Income is a measure of the total Income by the population of a country.
value of goods and services produced by an Per capita Income = National Income / Population
economy over a period of time, normally a year’.
Commonly National Income is called as Gross In 1867-68 for
National Product(GNP) or National Dividend. the first time
Dadabhai Navroji
1.1.1 Various terms associated with
had ascertained
measuring of National Income the Per Capital
1. Gross National Product (GNP) Income in his book “Poverty and Un-
Gross National Product is the total value British Rule of India”.
of (goods and services) produced and income
received in a year by domestic residents of a 6. Personal Income (PI)
country. It includes profits earned from capital Personal income is the total money income
invested abroad. received by individuals and households of
GNP = C + I + G + (X–M) + NFIA) a country from all possible sources before
C = Consumption direct taxes, therefore, personal income can be
I = Investment expressed as follows (PI = NI corporate Income
G = Government Expenditure Taxes − Undistributed corporate profits − social
X-M = Export – Import security contribution + Transfer payment).
NFIA = Net Factor Income from Abroad) 7. Disposable Income (DI)
2. Gross Domestic Product (GDP) Disposable income means actual
Gross Domestic Product (GDP) is the income which can be spent on consumption
total value of output of goods and services by individuals and families, thus, it can be
produced by the factors of production within expressed as DPI = PI − Direct Taxes
the geographical boundaries of the country. (From consumption approach DI =
Consumption Expenditures + Savings )
3. Net National Product (NNP)
Net National Product(NNP) is arrived
by making some adjustment with regard to 1.2 Gross Domestic
depreciation that is we arrive the Net National Product (GDP)
Product (NNP) by deducting the value of Produced in the country: GDP of India
depreciation from Gross National Product. includes only the market value of goods and
(NNP = GNP − Depreciation) services produced in India. For example the market
4. Net Domestic Product (NDP) value of apples produced in Kashmir are included
Net Domestic Product (NDP) is a part in our GDP since Kashmir is in India. The market
of Gross Domestic Product, Net Domestic value of apples produced in California, even if

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they are sold in Indian markets, are not included

in our GDP because California is in the U.S. The modern concept of GDP
Produced during a time period: The was first developed by Simon
GDP of a country measures the market value Kuznets for a US Congress
of goods and services produced only during the report in 1934.
specified time period. The goods and services
produced in earlier periods are not included.
1.2.1 Methods of GDP Calculating
If an year is the specified time period, the GDP
of 2018 will include the market value of goods 1. Expenditure Approach: In this method, the
and services produced only during 2018. So a GDP is measured by adding the expenditure
bicycle produced in 2017 will not be included in on all the final goods and services produced
the GDP measure for 2018. in the country during a specified period. The
different types of expenditure are shown in
In India the GDP is measured both annually
this equation: Y = C + I + G + (X − M)
and quarterly. The annual GDP is for a financial
2. The Income Approach: This method looks
year which is from April1 of say 2017 to March
at GDP from the perspective of the earnings
31, 2018. This is written as 2017-18. The quarterly
of the men and women who are involved
GDP estimates are for each of the four quarters
in producing the goods and services. The
into which India’s financial year is divided:
income approach to measuring GDP (Y) is
First quarter, denoted Q1: April, May and June Y = wages + rent + interest + profit
Second quarter, or Q2: July, August, September 3. Value-Added Approach: A cup of tea
served to you in a hotel is a “final good”. The
Third Quarter or Q3: October, November,
goods used to produce it , tea powder, milk,
December
and sugar, are “intermediate goods” since
Fourth Quarter, or Q4: January, February, March. they form
The annual GDP for financial year 2017 - 18 a part of
will include only the goods and services produced the final
during this financial year and will exclude the good, the
goods and services produced in the previous cup of tea.
years. Likewise GDP for Q2 will include only the One way
goods and services produced in Q2 and will not to measure
include the goods and services produced in Q1. the market
value of
Gross Domestic Product (GDP) the cup of tea is to add the value produced
definition by each intermediate good used to produce
it. Each intermediate good, the tea powder ,
Gross Domestic Product (GDP) represents
milk and sugar, adds value to the final
the economic health of a country. It represents
output, the cup of tea. In the value-added
a sum of a country’s production which consists
approach the value added by each
of all purchases of goods and services used by
intermediate good is summed to estimate
individuals, firms, foreigners and the governing
the value of the final good. The sum of the
bodies. The monetary value of all the finished
value added by all the intermediate goods
goods and services produced within a country’s
used in production gives us the total value
border in a specific time period.
of the final goods produced in the economy.
GDP = C + I + G + (X − M )
1.2.2 Importance of GDP
C = Consumption I = Investment
G = Government Expenditure 1. Study of Economic Growth.
( X − M) = X = Exports − M = Imports 2. Unequal distribution of wealth.

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3. Problems of inflation and deflation. 4 The GDP does not tell us about the kind
4. Comparison with developed countries of of life people are living: A high level of
the world. per capita real GDP can go hand-in-hand
5. Estimate the purchasing power. with very low health condition of people,
an undemocratic political system, high
6. Public Sector.
pollution and high suicide rate.
7. Guide to economic planning.
1.2.3 Limitations of GDP Estimation of GDP
The GDP is the most widely used measure The Central Statistical
of the state of the economy. While appreciating Organisation (CSO), under
its usefulness, we should be aware of some of its the Ministry of Statistical
limitations. department keeps the records.
1 Several important goods and services It’s processes involves conducting an annual
are left out of the GDP: The GDP includes survey of industries and compilation of various
only the goods indexes like the Index of Industrial Production
and services sold (IIP) Consumer Price Index (CPI) etc.
in the market. The
services provided
1.3 Composition of Gross
by parents to their
children is very
Domestic Product (GDP)
important but it is Indian economy is broadly divided into
not included in three sectors which contribute to the GDP
the GDP because namely Agriculture and allied activity, Industry
it is not sold in the market. Likewise clean and Services.
air, which is vital for a healthy life, has no
1) Primary Sector:
market value and is left out of the GDP.
(Agricultural Sector)
2 GDP measures only quantity but not
quality: In the 1970s schools and banks Agricultural
did not permit the use of ballpoint pens. sector is known as
This is because the ones available in India primary sector, in
were of very poor quality. Since then, not which agricultural
only has there been a substantial increase in operations are
the quantity of ballpoint pens produced in u n d e r t a k e .
Forestry
India but their quality has also improved a Agriculture based
lot. The improvement in quality of goods is allied activities, production of raw materials
very important but it is not captured by the such as cattle farm, fishing, mining, forestry,
GDP. corn, coal etc. are also undertaken.
3 GDP does not tell us about the way income 2) Secondary Sector:
is distributed in the
(Industrial Sector)
country: The GDP
of a country may Industrial sector
be growing rapidly is secondary sectors
but income may in which the goods
be distributed so and commodities
unequally that only are produced by
transforming the Industry
a small percentage
of people may be benefitting from it. raw materials. Important industries are Iron

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and Steel industry, cotton textile, Jute, Sugar,

Cement, Paper, Petrochemical, automobile and
other small scale industries.
3) Tertiary: (Service Sector)
Tertiary sector
is known as service
sector it includes
Government,
scientific research, India is 2nd larger producer of agriculture
t r a n s p o r t product. India accounts for 7.39 percent of total
c om mu n i c at i on , Postal and Telegraph global agricultural output. In Industrial sector,
trade, postal and telegraph, Banking, Education, India world rank is 6 and in Service sector, India
Entertainment, Healthcare and Information world rank is 8. Contribution of Agriculture sector
Technology etc.. In the 20th century,economists in Indian economy is much higher than world's
began to suggest that, traditional tertiary average (6.4%). Contribution of Industry and
services could be further distinguished from Services sector is lower than world's average 30%
“quaternary” and “quinary” service sectors. for Industry sector and 63% for Services sector.
1.4 Contribution of different Gross value added (GVA) is the measure of

sectors in GDP of India the value of goods and services produced in an
area, industry or sector of an economy. In national
Services sector is the largest sector of India. accounts GVA is output minus intermediate
Gross Value Added (GVA) at current prices consumption; it is a balancing item of the national
for Services sector is estimated at 92.26 lakh accounts' production account.
crore in 2018-19. Services sector accounts for GVA is linked as a measurement to Gross
54.40% of total India's GVA of 169.61 lakh crore Domestic Product (GDP), as both are measures of
Indian rupees. With GVA of ` 50.43 lakh crore, output. The relationship is defined as GVA + taxes
Industry sector contributes 29.73%. While, on products - subsidies on products = GDP
GVA = GDP + subsidies - (direct, sales) taxes.
Agriculture and allied sector shares 15.87%.
Sector-wise Contribution in GDP of India

Year Agriculture(%) Industry(%) Service(%)
1950-51 51.81 14.16 33.25
1960-61 42.56 19.30 38.25
1970-71 41.95 20.48 37.22
1980-81 35.39 24.29 39.92
1990-91 29.02 26.49 44.18
2000-01 23.02 26.00 50.98
2010-11 18.21 27.16 54.64
2011-12 17.86 27.22 54.91
2012-13 17.52 26.21 56.27
2013-14 18.20 24.77 57.03
2015-16 17.07 29.08 52.05
2016-17 17.09 29.03 52.08
2017-18 17.01 29.01 53.09
Source: Central Statistics Office

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Sector-wise contribuon of GDP (2018-19)

Percentage share (%) Agriculture Sector
Agriculture Forestry & Fishing
14.82 15.87 Industry sector
15.87 Mining & quarrying

20.96
Manufacturing
Electricity, gas, water
supply& other utility services
18.62 29.73
Construction
Services Sector
Trade, hotels, transport,
2.7 communication and services
16.83 related to broad casting
54.4 Financial, real estate & Prof
Services
2.67
7.54 Public administrative,
defense and other services
Source: Statistics times.com.
Note: The Table shows that Sector-wise contribution in GDP of India for the year 2018 - 2019.
Sectorwise GDP Growth of India (1950-2018)

■ Agriculture ■ Industry ■ Services
1950
1960
1970
1980
1990
2000
2010
2018
Source: Statistics times.com.

Note: The chart shows that Sector-wise contribution in GDP of India for the year 1950-2018

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1.5 Economic Growth and GDP of the United States of America is 19.3 trillion
Development USD and ranked one.It shows how much the
production of goods and services has increased
As per the economist compared from last year in a quantitative manner.
Amartya Sen, economic It has many parameters to measure and few of
growth is one aspect of them are human Resources. They are Natural
economic development. Resource, Advancement in technology, Capital
Also, united nation see it like formation, Political and social economic factors.
this “Economic development
focuses not only on man’s Economic Development
materialistic need but it Economic development projects a
focuses on overall development or rise in its living broader picture of an economy which takes
standards. into account an increase in production level
or output of an economy along with an
Economic Growth improvement in the living standard of its
It is the quantitative measure which citizens. It focuses more on socioeconomic
considers the rise in the output produced in factors rather than the just quantitative
an economy or nation in a particular period increase in production. Economic
in its monetary value. The key parameters of development is a qualitative measure which
economic growth in any economy are its Gross measures improvement in technology, labour
Domestic Product (GDP) and gross national reforms, rising living standards, broader
product which helps in measuring the actual institutional changes in an economy.
size of an economy. Human development Index (HDI) is apt
For example, we say GDP of India is 2.8 tool to measure the real development in an
trillion USD and ranked 6th in globe whereas economy.
Differences between Economic Growth and Economic Development

Comparison
between Economic
Growth and Economic Growth Economic Development
Economic
Development
It considers the rise in the output in an
It is the positive quantitative
economy along with the advancement of
Definition / change in the output of an
HDI index which considers a rise in living
Meaning economy in a particular time
standards, advancement in technology
period
and overall happiness index of a nation.
Economic growth is the Economic development is the “Broader”
Concept
“Narrower” concept concept
Nature of Approach Quantitative in nature Qualitative in nature
Rise in life expectancy rate, infant,
Rise in parameters like GDP,
Scope improvement in literacy rate, infant
GNP, FDI,FII etc.
mortality rate and poverty rate etc.
Term / Tenure Short term in nature Long-term in nature
Applicability Developed nation Developing economies

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Measurement Increase in real national income i.e. per

Increase in national income
Techniques capita income
Frequency of
In a certain period of time Continuous process
Occurrence
Highly dependent on government
It is an automatic process so
intervention as it includes widespread
Government Aid may not require government
policies changes so without government
support/aid or intervention
intervention it is not possible
Economic growth does not It focuses on a balanced and equitable
emphasize on the fair and equal distribution of wealth among all
Wealth Distribution
distribution of wealth/income individual and tries to uplift the
among all its people. downgrade societies.
Human Development Index

1.6 Developmental Path based
on GDP andEmployment
In 1990 Mahbub ul Haq,
a Pakistani Economist at the In the development path
United Nations, introduced the of India, it first undertook
Human Development Index the policy of closed trade.
(HDI). The HDI is a composite This was to give a thrust
index of life expectancy at birth, adult literacy to domestic industries
rate and standard of living measured as a and reduce dependence
logarithmic function of GDP, adjusted to on foreign products and
purchasing power parity. companies.Trade and interaction with the
outside world remained limited. This outlook
India climbed one spot to 130 out of 189
continued till 1991 when India finally decided
countries in the latest human development
to open its borders to free trade and liberalized
rankings released today by the United Nations
its economy by allowing foreign companies to
Development Programme (UNDP). India’s
enter the Indian economy.
HDI value for 2017 is 0.640, which put the
country in the medium human development
A thrust was given to employment
category. Between 1990 and 2017, India’s HDI
generation under the Five Year plans. This was
value incased from 0.427 to 0.640, an increase
to make up for a rising population and lacking
of nearly 50 percent – and an indicator of the
jobs to absorb the increased workforce size.
country’s remarkable achievement in lifting
Rural development was also given importance
millions of people out of poverty.
in India, for the important constituent it was of
the Indian landscape.
Between 1990 and 2017, India’s life
Poverty alleviation came as a corollary of
expectancy at birth too increased by nearly
rural development and a part of the development
11 years, with even more significant gains in
path of India. India inherited a poverty-stricken
expected years of schooling. Today’s Indian
economy from the British rule, which had
school-age children can expect to stay in school
destroyed its resource base completely.
for 4.7 years longer than in 1990. Whereas,
The public sector was given significant
India’s GNI per capita increased by a staggering
importance, Private companies and industries
266.6 % between 1990 and 2017.
were subject to strict regulations and standards.
It was believed that the government was the sole

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protector of the people and would work towards Factors supporting Indian
social welfare. development
India has sustained rapid growth of GDP A fast-growing population of working
for most of the last two decades leading to age. There are 700 million Indians under the
rising per capita incomes and a reduction age of 35 and the demographics look good for
in absolute poverty. Per capita incomes have Indian growth in the next twenty years at least.
doubled in 12 years. In Per capita income, India is experiencing demographic transition
placing India just inside the Middle Income that has increased the share of the working-age
Country category. population from 58 percent to 64 percent over
Life expectancy at birth is 65 years and the last two decades.
44% of children under 5 are malnourished. The India has a strong legal system and many
literacy rate for the population aged 15 years and English-language speakers. This has been a key to
above is only 63% compared to a 71% figure for attracting inward investment from companies such
lower middle income countries. as those specialising in Information Technology.
India has followed a different path of
development from many other countries. Wage costs are low in India and India has
India went more quickly from agriculture made strides in recent years in closing some
to services that tend to be less tightly of the productivity gap between her and other
regulated than heavy industry. There are countries at later stages of development.
some emerging manufacturing giants in the India's economy has successfully developed
Indian economy. highly advanced and attractive clusters of
Gross National Happiness (GNH)

Gross National Happiness ( GNH) is a philosophy that guides the government of Bhutan.
It includes an index which is used to measure the collective happiness and well-being of a
population. Gross National Happiness is instituted as the goal of the government of Bhutan in
the Constitution of Bhutan, enacted on 18 July 2008.
The term Gross National Happiness was coined in 1972 during an interview by a British
journalist for the Financial Times at Bombay airport when the then king of Bhutan, Jigme Singye
Wangchuck, said "Gross National Happiness is more important than Gross National Product.
In 2011, The UN General Assembly passed Resolution "Happiness: towards a holistic
approach to development" urging member nations to follow the example of Bhutan and measure
happiness and well-being and calling happiness a "fundamental human goal."
GNH is distinguishable from Gross Domestic Product by valuing collective happiness as
the goal of governance, by emphasizing harmony with nature and traditional values as expressed
in the 9 domains of happiness and 4 pillars of GNH. The four pillars of GNH's are 1) sustainable
and equitable socio-economic development; 2) environmental conservation; 3) preservation
and promotion of culture; and 4) good governance.
The nine domains of GNH are psychological well-being, health, time use, education,
cultural diversity and resilience, good governance, community vitality, ecological diversity and
resilience, and living standards. Each domain is composed of subjective (survey-based) and
objective indicators. The domains weigh equally but the indicators within each domain differ
by weight.

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promotes research and development, leads

to modernization and ultimately makes the
economy self-sufficient. In fact, industrial
development even boosts other sectors of the
economy like the agricultural sector (new
farming technology) and the service sector. It is
also closely related to the development of trade.
Several industrial policies since 1948,
Industrial policy on large scale industries
Eg. Textile Industry policy, Sugar Industry
policy, Price policy of industrial growth,
businesses in the technology space. For example Small scale industrial policy and Industrial
witness the rapid emergence of Bangalore Labour policy.
as a hub for global software businesses.
External economies of scale have deepened 3. New Economic Policy
their competitive advantages in many related The economy of India had undergone
industries. significant policy shifts in the beginning of the
1990s. This new model of economic reforms is
1.7 Growth of GDP and commonly known as the LPG or Liberalisation,
Economic Policies Privatisation and Globalisation model. The
Many Economic Policies have been framed primary objective of this model was to make
by the Government of India since independence the economy of India the fastest developing
for increasing rate of economic growth and economy in the globe with capabilities that help
economic development. The important it match up with the biggest economies of the
world. These economic reforms had influenced
economic policies are
the overall economic growth of the country in a
1. Agriculture policy significant manner.
Agricultural policy is the set of government
decisions and actions relating to domestic Some other policies in India
agriculture and imports of foreign agricultural • Trade Policy
products. Governments usually implement Import and Export policy (International

agricultural policies with the goal of achieving Trade Policy), Domestic Trade Policy.
a specific outcome in the domestic agricultural
product markets. Some over arching themes • Employment policy
include risk management and adjustment, • Currency and Banking Policy
economic stability , natural resources
• Fiscal and Monetary Policy
and environmental sustainability research and
development, and market access for domestic • Wage Policy
commodities. • Population Policy
Some Agricultural policies are Price policy,
land reform policy, Green Revolution, Irrigation 1.7.1 GDP Growth of India
policy, Food policy, Agricultural Labour Policy India's economic growth story since the 1990s
and Co-operative policy. has been steady, stable, diversified, resilent and
reflect strong macro economics fundamentals.
2. Industrial Policy Despite fluctuations in recent quarters due to
Industrial development is a very important disruptions caused by two major structural
aspect of any economy. It creates employment, reforms - demonetisation and the Goods and

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Services Tax (GST). The world Bank projected a According to IMF World Economic
growth rate of 7.3% in the year 2018-19 and 7.5% Outlook (October-2018), GDP growth rate of
2019-2020. India's average economic growth India in 2018 is projected at 7.3% and India is 5th
between 1970 and 1980 has been 4.4% which rise fastest growing nation of the world just behind
by 1% point to 5.4% between the 1990 and 2000. Bangladesh.
RECAP
• GDP is the value of all goods and services produced within an economy in a financial year.
• Indian economy is classified in three sectors Agriculture and allied Industry and Service
• Depreciation: The Monetary value of an asset decreases over time due to use, wear and tear or
obsolescence
• Income: The amount of monetary or other returns, either earned or unearned, accruing over a
period of time.
• Gross Value Added (GVA): The measure of the value of goods and services produced in an
area, industry or sector of an economy.
• GNP Deflator: The change in GNP with the change in price levels.
• Economic indicator - An economic indicator is a statistical data used to determine the health of the economy.
GLOSSARY
Depreciation The process of lossing value தேய்மானம்

Intermediate Being between two other related things இடைநிலை
Market Price A price that is likely to be paid for something சந்தை விலை
A consumer good or final good is any commodity
Final Goods that is produced or consumed by the consumer to இறுதி ப�ொருட்கள்
satisfy current wants or needs
the nature of something's ingredients or constituents;
Composition கலவை
the way in which a whole or mixture is made up
Contribution a gift or payment to a common fund or collection. பங்களிப்பு
Socio- relating to or concerned with the interaction of social சமூக-
Economic and economic factors. பொருளாதார
confidence in one's own worth or abilities; self-
Self-Esteem சுயமரியாதை
respect
Broader covering a large number and wide scope of subjects பரந்த
continue in existence or operation uncertainly or
Staggering தடுமாற்றத்தினை
precariously.

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9. Which one is a trade policy?.

EVALUATION a) irrigation policy
b) import and export policy
I C hoose the correct c) land-reform policy
d) wage policy
answer
10. Indian economy is
1. GNP equals a) Developing Economy
a) NNP adjusted for
b) Emerging Economy
inflation
c) Dual Economy
b) GDP adjusted for
inflation d) All the above
c) GDP plus net property income from II Fill in the blanks
abroad 1. _____ sector is largest sector in India.
d) NNP plus net property income or 2. GDP is the indicator of _____ economy.
abroad 3. Secondary sector otherwise called as _____.
2. National Income is a measure of 4. _____ sector is the growth engine of Indian
a) Total value of money economy.
b) Total value of producer goods 5. India is _____ largest economy of the
c) Total value of consumption goods world.
d) Total value of goods and services 6. India is _____ fastest growing nation of the
3. Primary sector consist of world.
a) Agriculture b) Automobiles 7. _____ policy envisages rapid
c) Trade d) Banking industrialization with modernization for
attaining rapid economic growth of GDP.
4. ______ approach is the value added by each
intermediate good is summed to estimate III C hoose the correct statement
the value of the final good. 1. The rate of saving is low in India for the
a) Expenditure approach following reason
b) Value added approach I. Low per capita income.
c) income approach II. Poor performance and less contribution
d) National Income of public sector.
III. Poor contribution of household sector.
5. Which one sector is highest employment in
IV. Savings potential of the rural sector not
the GDP.
tapped fully.
a) Agricultural sector a) I, II, IV are correct
b) Industrial sector b) I, II and III are correct
c) Service sector
c) I, II, III and IV are correct
d) None of the above.
d) I, III and IV are correct
6. Gross value added at current prices for
IV Match the following
services sector is estimated at ______ lakh
crore in 2018-19. 1. Electricity/ – National Income /
a) 91.06 b) 92.26 c) 80.07 d) 98.29 Gas and Water Population
7. India is ______ larger producer in 2. Price policy – Gross National
agricultural product. Product
a) 1 st b) 3 rd c) 4 th d) 2nd 3. GST – Industry Sector
8. India’s life expectancy at birth is ______ 4. Per capita income – Agriculture
years. 5. C + I + G + (X-M) – Tax on goods and
a) 65 b) 60 c) 70 d) 55 service

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V Give short answer 5. Explain the Developmental path based on

GDP and employment.
1. Define National income.
6. Explain the following the economic policies
2. What is meant by Gross domestic product?
1.Agricultural Policy
3. Write the importance of Gross domestic
2.Industrial policy
product.
3.New ecnomic policy
4. What is per capita income?.
5. Define the value added approach with VII Activity and Project
example. 1. Students are collect the Gross Domestic
6. Name the sectors contribute to the GDP Product datas of Tamilnadu and compare
with examples. the other state of Karnataka and Kerala’s
GDP.
7. Write the sectorwise Indian GDP
2. Students are collect the details of
composition in 2017.
Employment growth of Tamilnadu.
8. what are the factors supporting to develop
the indian economy
REFERENCE BOOKS
9. Write the name of ecnomic policies in India.
10. Write a short note 1) Gross National 1. Sankaran Indian Economy(problems,
Happiness(GNH) 2) Human Development policies,and development).
Index(HDI) 2. Ramesh singh Indian economy (10th Edition).
VI Write in detail answer 3. Ministry of statistics and implementation
planning commission. Government of india.
1. Briefly explain various terms associated
with measuring of national income.
2. What are the methods of calculating Gross INTERNET RESOURCES
Domestic Product? and explain its.
3. Write about the composition of GDP in 1. http://en.wikipedia.org
India. 2. http://www.statisticstimes.com
4. Write the differences between the growth
and development.
ICT CORNER
Steps
• Open the Browser and type the URL given below (or) Scan the QR Code.
• Click on ‘Real GDP Growth’ and select ‘India’ in Right side menu
• Drag the timeline button to see the GDP Growth of India
Website URL:
https://www.imf.org/external/datamapper/datasets/WEO/1

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Unit - 2
Unit - 2
Globalization
and Trade
Learning Objectives
� To know the meaning and history of globalization

� To know the trade and traders in South India historical perspective
� To know the evolution of growth of MNC
� To know the fair trade practices and WTO
� To understand the impact and challenges of globalization
Introduction
Liberalization, Privatization and
Globalization (LPG) have become a much
talked of subjects among politicians, economists
and businessmen in modern days. These three
expressions are the supporting pillars of which
the edifice of new economic policy of our
Government has been erected and implemented
since 1991. Globalization
2.1 Globalization 2.2 History of Globalization

Globalization is the process of integrating The term of ‘Globalization’ was introduced
various economies of the world without by Pro. Theodore Levitt. The historical
creating any barriers in the free flow of goods backround of globalization can be discussed on
and services, technology, capital and even three stages.
labour or human capital. Under globalization,
the international markets for goods and services Stage - 1
are integrated. Archaic Globalization
Globalization is the integration of a country History of Stage - 2

with the world economy. Basically, globalization Globalization Proto Globalization
signifies a process of internationalization plus Stage - 3

Modern Globalization
liberalization.
224 Globalization and Trade

2 Globalisation.indd 224
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SILK AND SPICE ROUTE W

N
E
S
A S I A
EUROPE
DITER
ME AN
R
EAN SEA
PERSIA CHINA
EGYPT
ARABIA INDIA
AFRICA
SOMALIA
INDIAN OCEAN
JAVA
LEGEND
LAND ROUTE AUSTRALIA
Not to Scale
SEA ROUTE
Silk Route and Spice Route
2.2.1. Archaic Globalization 2.2.2. Proto Globalization
Andre Gunder Frank argued that a form The next phase is known as proto -
of globalization has been in existence since the globalization. It was charterized by the rise of
rise of trade links between Sumer and Indus maritime European empires, in the 16th and
valley civilization in the third millennium 17th centuries, first the Portugues and Spanish
BC (BCE). An early form of globalized Empires, and Dutch and British empires. In
economics and culture, known as Archaic the 17th century, globalization became private
globalization existed during the Hellenistic business phenomenon like British East India
Age. When commercialized urban centers Company[founded in 1600] described as the
were focused around the axis of Greek culture first multinational company, and the first Dutch
over a wide range that stretched from India to East India Company [found in 1602] were
Spain with such cities as Alexandria, Athens, established. In 16th century, Portuguese
and Anthioch, as its center. An early form of started establishing trading posts [factories]
globalization in the trade link between the from Africa to Asia and Brazil.
Roman Empire, Parthian Empire and the Han
2.2.3. Modern Globalization
Dynasty made the commercial links between
these powers inspired the development of the The 19th century witnessed the advent of
Silk Road. globalization approaching its modern form.
Between the globalization in the 19th and in he
The Islamic Golden Age was also an
20th century there are significant differences.
important early stage of globalization.
There are two main points one is the global
The advent of the Mongol Empire, though
trade in his centuries as well as the capital,
destabilizing to the commercial centers of
investment and the economy and another one
the Middle East and China, greatly facilitated
is the global trade in the 20th century shows a
travel along the Silk Road. These Pre-modern
higher share of trade in merchant production,
phase of global exchange are sometimes
a growth of the trade in services and the rise of
known as archaic globalization.
production and trade by multinational firms.
Globalization and Trade 225

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Multinational trade contracts and 2.3.1. Early Traders

agreements have been signed, like the General
In the year 1053 AD (CE) the Kalinga
Agreement on Tariffs and Trade [GATT] and
traders (Modern Orissa) brought red colored
World Trade Organization [WTO]. From 1890
stone decorative objects for trade and also
and up to World War 1 instability trade was
cotton textile to Southeast Asia at an early
a problem, but in the post war period there
date. Several trade guilds operated in medieval
has mostly been economic expansion which
Southern India such as the Gatrigas, Nakaras,
leads to stability. Technological changes
Mummuridandas, Ayyavole -500 Settis,
have caused lower transporting costs, it take
Birudas, Gavaras, etc.. Some trade guilds, such
just a few hours to transport goods between
as the Nakaras and Gavares, met only in the
continents today.
temple premises.
2.3 Trade and Traders in South
India historical perspective 2.3.2. European Traders in South India
Southern Indian trade guilds were formed This was due to the trading activities of the
by merchants in order to organize and expand various European companies which came to
their trading activities. Trade guilds become India during this period. The discovery of a new
channels through which Indian culture was all-sea route from Europe to India Via cape of
exported to other lands. South India trade was Good Hope by Vasco do Gama had for reaching
dominated by the Cholas, and it replaced the repercussions on the civilized world. India’s
Pallavas. coastal and maritime trade was monopolized
by the Europeans.
KALINGA TRADE ROUTE W E

S
China
Kalinga
Burma Champa
Siam
Kmer
Malaya
Ceylon
Sumatra
Not to Scale
Java Bali
Kalinga Trade route map


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2.3.3. The Portuguese 2.3.5. The British Company (UK)
Vasco Da Gama Queen Elizabeth

The Portuguese under the leadership of On 31st December, 1600, Queen Elizabeth
Vasco da Gama landed at Calicut on the 17th granted charter to The East India Company.
May, 1498. Profits of goods brought by Vasco do On the south-eastern coast, the English
Gama to Portugal were to 60 times cost of the established at Masulipatnam in 1611 and
entire expedition to India. The arrival of Pedro near Pulical in 1626. The Sultan of Golconda
Alvarez cabral in India in 1500AD (CE) and the granted the English the “Golden Fireman”
second trip of Vasco da Gama in 1502 led to in 1632 by which they were allowed to trade
the establishment of trading station at Calicut freely in their “Kingdom Ports”. In 1639, built a
Cochin and Cannanore. Cochin was the early fortified factory in Madras which known as Fort
capital of the Portuguese in India. St.George, which soon displaced Masulipatnam
as headquarters of the English settlement on the
2.3.4. The Dutch in South India coromandel coast.
2.3.6. The Danes
The Danes formed an East India company
and arrive in India in 1616. The Danish
settlements were established at Tranguebar
( in Tamil nadu) in 1620 which was the
headquarters of Danes in India. They failed to
strengthen themselves, in India and in 1845
were forced to sell all their India settlements to
the British.
Dutch East India company
2.3.7. The French
Dutch undertook several voyages from
1596 and formed the Dutch East India company The first French factory in India was
(VOC) I 1602. In 1605, Admiral van der Hagen established in 1668 by obtaining permission
established Dutch Factory at Masulipatnam and from the Sultan of Golconda. In 1693, the
Pettapoli (Nizamapatanam), Devanampatinam. Dutch captured Pondicherry but was handed
In 1610, upon negotiating with the king of back to the French. In 1701, Pondicherry was
Chandragiri, found another facatory at Pulicut. the headquarters of the French. Settlements
Other commodities exported by the Dutch were in the East after 1742 Political motives began
indigo, saltpeter and Bengal raw silk. Pulicut to overshadow the desire for commercial
was the headquarters of the Dutch in India. gain.
Nagapatnam on the Tanjore coast acquired Recently, the Government of India has set
from the Portuguese in 1659. up Special Economic Zones in Southern States

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especially in Tamilnadu, Andhra, Karnataka 2.5 Multi National Corporation

and Kerala with a view to boost exports
(MNC)
Nanguneri Sez, Ennore Sez, Coimbatore Sez
are some in Tamilnadu.
Multi National
Corporation is a Corporate
2.4 Globalization in India organization which owns or
In India the period after 1980-81 was controls production of goods or
marked by severe balance of payment difficulties services in at least one country
mainly due to hike in oil price and Gulf war in other than its home country.
1990-91 and hostilities in West Asia. Otherwise called Multinational Corporations
When the new government took over in (MNCs) or Transnational Corporation (TNC) or
June 1991. India had unprecedented balance of Multinational Enterprise (MNE).
payment crisis. The finances of the central, and
state Government had reached a situation of 2.5.1.Evolution of MNC
near bankruptcy. Like, the East India Company, which came
With the downgrading of India’s credit to India as a trading company and then its net
rating by some international agencies, there was throughout the country to become politically
heavy flight of capital out of India. dominant, these multinationals first start their
Since India lost its credit worthiness in the activities in extractive industries or control raw
international market, the government mortgaged materials in the host countries during 1920s and
40 tons of gold to the Bank of England. Under then slowly entered. The manufacturing and
these circumstances, the government for 1991-92 service sectors after 1950s. Most of the MNC’s
presented its budget in July 1991 with a series of at present belong to the four major exporting
policy changes which underlined globalization, countries viz., USA, UK, France, Germany.
liberalization and privatization. This has come However, the largest is American.
to be called as India’s new economic policy. This 11 of the 15 largest multinationals are
policies were strengthened when India signed American, In 1971, the American Corporations
the Dunkel Draft in 1994. held 52 percent of the total world stock of
foreign direct Investment. Great Britain held
Reforms made to adopt Globalization:- 14.5 percent followed by France 5 percent
(New Economic policy in India) and Federal Republic of Germany 4.4 percent
and Japan 2.7 percent. In 1969 the American
1. Abolition of Industrial licensing, except for a
Multinationals alone produced approximately
few industries.
140 billion dollars worth of goods.
2. Reduction in the number of industries
The American multinationals realize quite
reserved for public sector.
substantial returns to the extent of 34 percent
3. Fixation of a realistic exchange rate of rupee in Asiatic countries and 22 percent in African
to exchange exports of Indian goods. countries. They then acquire enormous powers
4. Foreign private sector by making rupee in hose countries, which smoothens the free
convertible on trade, on current account and flow of fund across international boundaries.
by reducing import duties. They purchase the best brains in these countries
5. Foreign exchanges regulations were suitably and resort to unfair practices. With their
amended huge resources, the MNCs are able to invest
6. The Statutory Liquidity Ratio (SLR) was in research and development and exploit
reduced to increase lending by RBI. technological developments to manufacture
new products, and discover new process.

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2.5.2.Growth of MNCs in India 4. Technological superiorities:

A common form of MNC Participation The main reason why MNCs have been
in Indian industry is through entering into encouraged by the underdeveloped countries to
cooperation with Indian industrialist. Trends participate in their industrial development is on
of liberalization in the 1980s gave a substantial account of the technological superiorities which these
spurt to foreign collaborations. This would firms posses as compared to national companies.
be clear from the fact that of the total 12,760 5. Product innovations:
foreign collaboration agreements in 40 years MNCs have research and development
between 1948-1988. As a result of liberalized engaged in the task of developing new products
foreign investment policy (FIP) announced and superior designs of existing products.
in July-Aug 1991 there has a further spurt of 2.5.4.Advantages of MNC
foreign collaborations and increase flow of
1. Producing the same quality of goods at
foreign direct investment.
lower cost and without transaction cost
2. MNC reduce prices and increase the
Purchasing power of consumers world wide
3. A MNCs is able to take advantage of tax
variation.
4. Spurring job growth in the local economies
2.5.5. Disadvantages of MNC
1. They are a way for the corporations to
develop a monopoly (for certain products)
2. They are also a detrimental effect on the
MNC Company environment.
2.5.3. Reasons for the growth MNC 3. The introduction of MNC in to a host
country’s economy may also lead to the
1. Expansion of Market territory. downfall of smaller, local business.
As the operations of large sized firm 4. MNC breach ethical standards, accusing
expand, it seeks more and more extension of its them of evading ethical laws and leveraging
activates beyond the physical boundaries of the their business agenda with capital.
country in which it is in corporate.
2. Marketing superiorities: Top 10 Largest Multinational
Companies in India 2018
A multinational firm enjoys a number
of marketing superiorities over the national 1. Sony Corporation
firms. It enjoys market reputation and faces 2. Hew left Packard (HP)
less difficulty in selling its products it adopt
3. Tata Group
more effective advertising and sales promotion
techniques. 4. Microsoft Corporation
5. IBM
3. Financial Superiorities
6. Nettle
It has financial resources and a h high
7. Procter & Gamble
level of funds utilization. It has easier access
of external capital markets. Because of its 8. City Group
international reputation it is able to raise more 9. Pepsi Company
international resources. 10. The Coca-Cola Company

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Indian Multi National Companies

Company Headquarter Type of Industry Countries of operating
Columbia, Bangladesh,
Hero Motocorp New Delhi Automobile
Africa
United Arab Emirates(UAE),
Bajaj Pune Automobile
Bangladesh
Brazil,Chile,Colombia,
TVS Chennai Automobile
Mexico,Peru
Australia,Bangaladesh,
State Bank of India Mumbai Banking
Belgium
Bharti Airtel New Delhi Communication South Asia, Africa
Micromax Informatics Gurgaon Electronics Nepal, Srilanka, Bangladesh
US, Thailand, Malaysia,
Amul Anand (Gujarat) Food product
Hong Kong, Japan,
ONGC Delhi Fuel Brazil, Colombia, Iran
Dr. Reddy’s Laboratories Hyderabad Medical Laboratory Brazil, Mexico, Jamalica
Infosys Bengaluru Software America, Europa, Africa
FERA (Foreign Exchange Regulation Act 1974) 2.6 Fair Trade Practices and
This Act referred directly to the World Trade Organization
operations of MNCs in India Fair Trade is a way of doing business that
FEMA (Foreign Exchange Management Act 1999) ultimately aims to keep small farmers an active part
Under FEMA the emphasis is on of the world Market place, and aims to empower
‘Management’ rather than ‘regulation’ consumer to make purchases that support their
Foreign Contribution (regulation) Act, 2010 values. Fair Trade is a set of business practices
FCRA, 2010 has been enacted by the Parlia- voluntarily adopted by the producers and buyers
ment to consolidate the law to regulate the of agricultural commodities and hand-made crafts
acceptance and utilization of foreign contri- that are designed to advance many economic,
bution or foreign hospitality by certain in- social and environmental goals, including,
dividuals or associations or companies and • Raising and stabilizing the incomes of small-
to prohibit acceptance and utilization of for- Scale farmers, farm workers and artisans.
eign contribution or foreign hospitality for • More equitably distributing the economic
any activities detrimental to national inter- gains, opportunities and risks associated
est and for matters connected therewith or with the production and sale of these goods.
incidental thereto. • Increasing the organizational and
The flow of foreign contribution to India is commercial capacities of producer groups.
regulated under • Promoting labor rights and the right
• Foreign Contribution (Regulation) Act, 2010 workers to organize.
• Promoting safe and sustainable farming
• Foreign Contribution (Regulation) Rules, 2011
Methods and working conditions.

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Fair trade is about better prices, decent

working conditions and fair terms of trade for Fair trade food product such as coffee, tea,
farmers and workers. It’s about supporting the cocoa, honey and bananas. Non-food com-
development of thriving farming and worker modities include crafts, textile and flowers.
communities that have more central over their
2.6.3. GATT: (General Agreement of Trade
futures and protecting the environment in
which they live and work. and Tariffs)
2.6.1 Beneficiaries of Fair trade practices: GATT was signed by 23 countries in 1947.
India was one of the founder members of GATT.
1. Consumer: In the seventh Round 99 countries participated.
Consumer support enables Fair Trade In the Eighth Round of 1986, (Uruguay Round),
Organisation to be advocates and comparing 117 countries participated. The Director
for wider reform of International trading rules. General of GATT Arthur Dunkel came up with
They can choose from an even growing range a Drafft Final Act, known as Dunked Draft and
of great products. By buying Fair trade labeled on April 15, 1994 the Final Act was ultimately
products consumers support producers who are approved and signed. GATT’s primary purpose
struggling to improve their lives. was to increase International Trade by reducing
2. Trader/companies: various tariffs, quotas and subsidies while
Since, it launch in 2002 the Fair trade mark maintaining meaningful regulations.
has become the most widely, recognized social
and development label in the world. Fair trade
offers companies a credible way to ensure that
their trade has a positive impact.
3. Producers:
Stable prices that cover the costs of
sustainable production. Market access that
enable buyers to trade with producers who would
otherwise be excluded from market. Partnership
(Producers are involved in decisions their future).
The Empowerment of farmers and workers.
GATT Uruguay Round
2.6.2 Principles of Fair trade Organization
• Creating Opportunities for Economically Rounds of GATT
Disadvantaged producers. • First in Geneva (Switzerland)
• Transparency and Accountability . (1947)
• Fair Trading Practices and Payment of a Fair • Second in Annecy (France) in 1949
Price. • Third in Torquay (UK) in 1950 – 51
• Ensuring no child Labour and Forced • Fourth, fifth, and Sixth in Geneva
Labour. (Switzerland) in 1956, 1960-61, 1964 -67.
• Commitment to Non Discrimination, • Seventh in Tokyo (Japan) in 1973 – 79
Gender Equity and freedom of association.
• Eighth and final round at Punta del Este
• Providing Capacity Building and Promoting (Uruguay) in 1986 – 1994, known as
Fair Building. ‘Uruguay Round’.
• Respect for the Environment.

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2.6.4. World Trade Organization (WTO)

G7 Countries: (Group of Seven)
2.6.5. Objectives of W.T.O

World Trade Organization(WTO)
• To set and enforce rules for international trade.
The signing of the Final Act of the Uruguay
Round by member nations of GATT in April • To provide a forum for negotiating and
1994 paved the way for setting up of the WTO. monitoring further trade liberalization.
An agreement to this effect was signed by 104 • To resolve trade disputes.
members. The WTO Agreement came into force • Introduction the sustainable development
from January 1, 1995 ( the present membership and environment can go together.
of WTO is 164 countries) • To ensure that developing countries, secure
a better share of growth in world Trade.
World Trade Organization(WTO): • To resolve trade disputes.
Head Quarter: Geneva, Switzerland • To increase the transparency of decision
Purpose: Regulation, International trade making processes.
Members of WTO: Director General, Four • Introduction sustainable development the
Deputy Director General, and other 600 Official development and environment can go together.
Staff from around 80 member countries. • To ensure full employment and broad
increase in effective demand.
2.6.6. Trade Related aspects of Intellectual
The WTO mentions five types of
Property Rights (TRIPs)
subsidies:
• Cash subsidies, such as the grants Intellectual Property Right may be defined
as “Information with a commercial Value” Under
mentioned above.
TRIPs Patent shall be available for any invention
• Tax concessions, such as exemptions, whether product or process in all fields of
credits, or deferrals. industrial technologies. Trips agreement covers
• Assumption of risk, such as loan seven areas of intellectual’s property rights i.e.
guarantees. Copy rights, Trade Market, Trade Secrets,
• Government procurement policies that Industrial Design, Geographical appellations
pay more than the free-market price. Integrated circuits and Patents.
• Stock purchases that keep a company's 2.6.7. Trade Related Investment Measures

stock price higher than market levels. (TRIMs)
These are all considered subsidies The Uruguay Round Agreement on TRIMs
because they reduce the cost of doing refers to certain conditions (or) restrictions
imposed by a government in respect of foreign
business.
investment in the country in order to give adequate
provisions for the home industries to develop.

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2.7 Impact and Challenges extraction. This increase negative ecological

of Globalization and Social costs.
• Rapid increases in exploitation of natural
2.7.1. Positive Impact resources to earn foreign exchange.
• Environmental standards and regulations
• A better economy introduces rapid have been relaxed.
development of the capital market.
• Standard of living has increased. 2.7.3. Challenges of Globalization
• Globalization rapidly increase better trade • The benefits of globalization extend to all
so that more people are employed. countries that will not happen automatically.
• Introduced new technologies and new • The fear that globalization leads to instability
scientific research patterns. in the developing world.
• The industrial world that increased global
• Globalization increasing the GDP of a
competition will lead in race to the bottom
country.
in wages, labour right, and employment
• It helps to increase in free flow of goods and practice.
also to increase Foreign Direct Investment. • It leads to global inbalance.
• Globalization has resulted with the
2.7.2. Negative Impact
embarrassment.
• Too much flow of capital amongst countries, • Globalization has led to an increase in
Introduces unfair and immoral distributors activities such as child labor and slavery.
of Income. • People started consuming more junk food.
• Another fear is losing national integrity. This caused, the degradation of health and
Because of too much exchange of trade, spread of diseases.
independent domestic policies are lost. • Globalization has led to environmental
• Rapid growth of the economy has required degradation.
a major infrastructure and resource
RECAP
• Globalization is the integration of country with the world economy.
• The three stages of Globalization : • Archiac Globalization • Proto Globalization
• Modern Globalization.
• LPG – Liberalization, Privatization, and Globalization
• Multi National Company is a corporate organization which owns or control production of
goods and services in at least one country to other than its home country.
• MNC otherwise called Transnational Company(TNC) and Multinational
Enterprises(MNE).
• GATT was signed by 23 countries in 1947. India was one of the founder members of GATT.

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GLOSSARY
the process by which businesses or other
globalization organizations develop international influence or start உலகமயமாக்கல்
operating on an international scale.
expected or expecting to be the specified thing in the
prospective வருங்கால
future.
of an early period of art or culture, especially the
archaic தொன்மையான
7th–6th centuries BC in Greece.
evolution the gradual development of something பரிணாம வளர்ச்சி
expose to future risk or constraint for the sake of அடமானம்
mortgaged
immediate advantage. வைக்கப்பட்ட
the action of abolishing a system, practice, or
abolition ஒழித்தல்
institution.
spurt cause to gush out suddenly. திடீர்
detrimental tending to cause harm சீரழிவான
thriving prosperous and growing; flourishing. வெற்றிகரமான
recognition and understanding of the difference
discrimination பாகுபாடு
between one thing and another.
EVALUATION 5. When did Portuguese colonize India?

a) 1600 BC b) 1602 BC
I. C
hoose the c) 1498 BC d) 1616 BC
correct answer
6. GATT’s first round held in
1. Who is the head of the a) Tokyo b) Uruguay
World Trade Organisation c) Torquay d) Geneva
(WTO)
7. India signed the Dunket proposal in
a) Ministerial conference
a) 1984 b) 1976
b) Director General
c) 1950 d) 1994
c) Deputy Director General
d) None of these 8. who granted the English “golden Fireman”
2. How many countries were membership in in 1632
WTO at present? a) Jahangir b) Sultan of Golconda
a) 159 b) 164 c) 148 d)128 c) Akbar d) Aurangzeb
3. Colonial advent in India 9. Foreign Investment policy (FIP) announced
a) Portuguese, Dutch, English, Danish, in
French a) June 1991 b) July 1991
b) Dutch, English, Danish , French c) July- Aug-1991 d) Aug 1991
c) Portuguese , Danish, Dutch, French, 10. Indian government was introduced
English ___________ in 1991
d) Danish, Portuguese, French, English, Dutch a) Globalization
4. Who first came to India for trading purpose? b) World Trade Organisation
a) Roman Empire b) Portuguese c) New Economic Policy
c) Dutch d) Danish d) none

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II. Fill in the Blanks 5. What are the reforms made to adopt
1. The Dutch captured Pondicherry in globalization?
___________. 6. What is Fair trade ?
2. A better economy introduce rapid 7. Write any five principles of Fair Trade
development of the ___________. Practices.
3. The East India Company built fortified 8. What is the main objective of WTO?
factory in Madras which known as 9. Write short note on TRIPs and TRIMs.
___________. 10. Write the positive impact of Globalization.
4. WTO agreement came into force from VI. Brief Answer
___________. 1. Write briefly the history of globalization.
5. The term globalization invented by 2. Briefly explain the evolution of MNC and its
___________.
advantages and disadvantages.
6. French East India company established
3. Explain the trade and traders in south india.
second factory at _________.
4. Write about the World Trade Organisation.
III. Choose the correct statement 5. Write the challenges of Globalization.
1. I)
The East Indian Company specially to VII. Activity and Projects
participate in the East Indian Spice Trade 1. Teacher and students are discuss about the
and later added cotton, silk, Indigo. globalization.
II) Merchants of the Dutch East India
2. Students are collect the images regarded
Company first established at Calicut
to the globalization and make the album.
III) Nanadesis were a guild of traders at the (south Indian trade and traders images, and
time of Hoysala Empire silk route map, spice route map, and kalinga
a) I is correct trade map, etc)
b) II and III are correct 3. Students are collect the picture of various
c) I and III are correct Multinational corporation companies in
india and its products pictures.
d) I, II and III are correct
IV. Match the following:-
1. Multination REFERENCE BOOKS
corporation in India - 1947
2. MNC - enforce 1. Dr. S. Shankaran [2007], “Indian Economy”
international [Problem, Policies and Development]
trade 2. Dutt “Indian Economy”
3. GATT - Minimize cost of 3. History of Tamil Nadu [Social and Culture]
production 4. S.K. Misra and V.K. Puri “Indian Economy”
4. 8th Uruguay Round - Infosis
5. WTO - 1986
V. Give Short Answers
INTERNET RESOURCES
1. What is globalization?
2. Write the types of globalization. www.gateway for india.com
3. Write short note on Multinational http://en.wikipedia.org
corporation. http://www.investopedia.com
4. Short note: The Dutch in South India.

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Social Science – Class X

List of Authors and Reviewers
History Geography Civics Economics
Chairperson Domain Expert Domain Expert Domain Expert
Dr. K.A.Manikumar, V. Tamilarasan R. Subramanian
Dr. M. Kaliyaperumal Professor (Retd)
Professor (Rtd), Dept. of History Associate Professor & Head Professor & Head (Retd),
M S University, Thirunelveli Govt. Arts College Karur Soudeshwari Arts and Science
Presidency College, Chennai College, Salem
Co-chairperson Reviewer Reviewer
Dr. A.R.Venkatachalapathy Dr. P. Arul A. Karunanandam
Reviewer
Professor, Dept. of History, Associate Professor HOD (Retd), Dept. of History, Dr. J. Jeyarajan
Madras Institute of Development Govt. Arts College Salem Vivekananda College, Chennai Director, Institute of development
Studies, Chennai alternatives, Chennai.
Authors Authors
Authors Dr. K. Rutharvel Murthy Authors
P. Balamurugan
Prof. Kanakalatha Mukund Guest Lecturer, PG Assistant, GBHSS, L. Gowsalyadevi
Former Professor, Arignar Anna Govt. Arts College, Thammampatti, Salem P.G. Assistant, GHSS, Thoppur,
Centre for Economic and Social Namakkal Dharmapuri
Studies, Hyderabad D. Suganthi
Dr. S. Senthil Kumar B.T. Assistant, K. Suresh
Dr. S. Ananathakrishnan Guest Lecturer, Govt. Kallar HS Annanji, Theni P.G. Assistant, GBHSS,
Associate Professor, Arignar Anna Govt. Arts College, Pennagaram, Dharmapuri
A.M. Jain College, Chennai Namakkal K. Velu
B.T. Assistant, Dr. M. Kumar
Dr. Maavendar Singh T. Shrijanani GGHSS, Thalaivasal, Salem P.G. Assistant, GHSS
Assistant Professor, P.G. Assistant, GBHS School, Madhanackainpatti, Salem
S.R.M. University, Amaravathi Pappireddipatti, Dharmapuri S. GomathiManickam
Andhrapradesh GHSS, Old Perungalathur M. Rajeswari
C. Selvam Kanchipuram P.G. Assistant, GHSS,
Dr. Venkat Ramanujam B.T. Assistant, Kumbinipettai, Vellore
Dept. of History, Subramaniya Sastriyar HSS,
Madras Christian College, Arani, Thiruvannamalai D.Vani,
Tambaram PG.Assistant, Malco.Vidyalaya.
K.G. Jothi MHSS, Mettur Dam, Salem
Dr. Jeevanantham B.T. Assistant, GHSS,
Asst. Professor, Vrinchipuram, Vellore Academic Adviser & Expert S. Srinivasan
Central University, Sikkim P.G. Assistant, GHSS
D. Jaisan Dr. P. Kumar B.Thurinjipatti, Dharmapuri
M. Amudha TGT, MVMHSS Joint Director (Syllabus)
Lecturer, DIET, Kothagiri, Metturdam, Salem SCERT, Chennai
The Nilgiris
V. Jayachandran Academic Co-ordinators ICT
K. Velu, B.T. Assistant, B.T. Assistant, GBHSS D. Naga Raj
GGHSS, Thalaivasal, Salem Thammampatti, Salem T. Srinivasan GHSS, Rappusal, Pudukkotai
A. Jafar Ali, P.G. Assistant, S. Shankar Principal, DIET, Krishnagiri
P. Suresh R. Venkatesan
GHSS, Keeripatty, Salem B.T.Assistant, GHSS,
P. G. Assistant, GGHSS, PUPS, Velliyanai, Karur
Kattukottai, Salem
S. GomathiManickam Attur, Salem
GHSS, Old Perungalathur, S. Sudaroli
Kanchipuram B.T. Assistant,
QR Code Team
Chinmaya vidyalaya PAC R. Jaganathan,
V. Ramakumari, BT. Assistant, PUMS, Ganesapuram,
Ramasamy Raja MHSS,
HolyAngles Matric. HSS Tiruvannamalai
Rajapalayam, Virudhunagar
Alagapuram, Salem Art and Design Team J.F. Paul Edwin Roy,
B. Latha, BT. Assistant, PUMS Rakkipatti, Salem
Holy Angles Matric. HSS Illustration
Alagapuram, Salem R. Muthukumar M. Saravanan,
V. Vinoth Kumar GGHSS, Vazhapadi, Salem
K. Selvakumar, B.T. Assistant,
GHS, Kunnathur,
Thiruvannamalai Layout
V. Velmurugan, BT. Assistant, S. Ashok Kumar
GHSS, Vellalakundam, Salem R. Balasubramani
P. Vedapureesan, P.G. Assistant, S. Porsellvan
GHSS, Azhiyur, Nagapattinam C. Prasanth
Dr. K. Suresh, B.T.Assistant,
Kumara Rajah Muthiah HSS Wrapper Design
Chennai Kathir Arumugam
Content Readers In-House QC
Dr. A. Thennarasu Kamatchi Balan Arumugam
Associate Professor & Head
Govt. Arts College, Salem Rajesh Thangappan
Dr. K. Jayakumar Jerald Wilson
Periyar E.V.R. College, Tiruchi Yogesh This book has been printed on 80 G.S.M.
Elegant Maplitho paper.
Dr. J. Murugan Co-ordinator
Arignar Anna Govt. Arts College Ramesh Munisamy Printed by offset at:
Attur, Salem

8220745888 16-04-2019 11:59:09

Economy

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Economy

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நன்றி: தமிழ்நாடு பாடநூல் கழகம்.

ONLY FOR STUDY PURPOSE.

PAAVAI IAS ACADEMY’S SELF STUDY

If a commodity is transported from

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Engineering & Building

Cotton Industry The most to the Gross

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fourth factor is required. Goods and services

commercial real estate to the resources 3. Land is imperishable

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4. Land is a Primary Factor of Production:

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• Labour is mobile. Man moves from one

Division of labour means dividing the

Students are asked to visit the nearest private

Teacher and students are to discuss about the

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Merits of division of labour

• Facilities the use of machinery in production,

• Time and Materials are put to the best and

Demerits of division of labour

• Narrow specialization reduces the possibility

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Entrepreneur  Utility means want satisfying power of a

An entrepreneur is a person who product.

Characteristics of Entrepreneur I. Choose the correct answer

Activity: 2 2. Utilities are in the nature of

Students are asked to visit some a) form utility b) time utility

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5. The entrepreneur is also called 4. Describe the characteristics of capital.

10. Write the three characteristics of entrepreneur?. 7. Resources Assets வளங்கள்

V. Give brief answer.

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"Learning gives creativity, creativity leads to thinking, thinking

▶ To know about the Evolution of Money.

Introduction Evolution of Money

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goods for other services and goods in return. Commodity Money

During the ancient me........

Goods and Services are traded in exchange for other good.

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History of Metallic Money

Maurya Maurya Karshapanas Delhi Sultan

Delhi Sultan Tanka - Shershasuri Shersha Suri Coin Maurya

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It was found inconvenient as well as Reserve Bank of India

ACTIVITY: 1 Near Money

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These are the functional definitions of ii) S tore of value or store of

Secondary functions Savings are defined

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SAVINGS  ou will be more comfortable in

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Comparison of Savings and Investments

Black Money 7. Distribution of scarce resource

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Coincidence accident தற்செயல்

Demonitization to officially stop using particular பண மதிப்பு குறைப்பு

Tax Evasion ways of illegally paying less tax வரி ஏய்ப்பு

Deterioration the process of becoming progressively worse ம�ோசம் அடைதல்

• Labour is mobile. Man moves from one

• Facilities the use of machinery in production,

• Time and Materials are put to the best and

• Narrow specialization reduces the possibility

Entrepreneur Utility means want satisfying power of a

During the ancient me........

These are the functional definitions of ii) S tore of value or store of

SAVINGS ou will be more comfortable in

6. Who is responsible for the collection and c) I, III and IV is correct

Introduction Different Perspectives

Sustainability of Literacy rate of Tamil Nadu is the

Solar panels absorb the sunlight as a Environmental Policies

4. ________ is considered a true a. Gender b. Health