QUIZ – 2020: INSIGHTS STATIC , 31 March 2021 – Economy

Solution: c)

• Planning, in the real sense of the term, began with the Second Five Year Plan. The Second Plan, a landmark contribution to development planning in general, laid down the basic ideas regarding goals of Indian planning; this plan was based on the ideas of Mahalanobis. In that sense, he can be regarded as the architect of Indian planning.
• Industrial Policy Resolution 1956 (IPR 1956): In accordance with the goal of the state controlling the commanding heights of the economy, the Industrial Policy Resolution of 1956 was adopted. This resolution formed the basis of the Second Five Year Plan, the plan which tried to build the basis for a socialist pattern of society.
• In the first seven plans, trade was characterised by what is commonly called an inward-looking trade strategy. Technically, this strategy is called import substitution. This policy aimed at replacing or substituting imports with domestic production.

Solution: c)

Due to miserable failure of the Third Plan the government was forced to declare “plan holidays” (from 1966 to 1967, 1967–68, and 1968–69). Three annual plans were drawn during this intervening period. During 1966–67 there was again the problem of drought. Equal priority was given to agriculture, its allied activities, and industrial sector. The government of India declared “Devaluation of Rupee” to increase the exports of the country. The main reasons for plan holidays were the war, lack of resources and increase in inflation.

The Fifth Five-Year Plan laid stress on employment, poverty alleviation (Garibi Hatao), and justice.

Solution: a)

All the above are the goals of the planning system in India between 1950-1990.

Solution: d)

‘Hindu’ rate of growth was coined to refer to the phenomenon of sluggishness in growth rate of Indian economy (3.5 per cent observed persistently during 1950s through 1980s).

Solution: d)

Since it allows specialization of production, statement a) is correct. Statement b) is a natural consequence of more producers of the same product or service.

Since exporters can tap domestic as well as foreign markets, they can produce more, reduce costs and thus reap economies of scale. So, statement c) is also correct.

Statement d) is not a valid argument out of the all four. Globalization along with free trade can adversely affect the economies of developing countries by not giving equal playing field by imposing conditions which are unfavorable.