What went wrong when the king rode under the arch?

It was too low and knocked off his crown

How does the chain of blame unfold in the poem?

Each accused person blames another, ending with the king's own changes

Why did India adopt a mixed economy?

Because the country wanted the gains of both systems — letting the market operate while the state directed development and ensured equity — so it combined features of socialism and capitalism.

When was the Planning Commission set up and what were the goals of the plans?

It was set up in 1950 with the Prime Minister as chairperson, and the five-year plans pursued four goals: growth, modernisation, self-reliance and equity.

What were the main features of land reforms?

They abolished intermediaries such as zamindars, imposed ceilings on land holdings and aimed to give land to the tiller; they were most successful in Kerala and West Bengal.

What was the Green Revolution?

It was the use of high-yielding-variety seeds along with fertiliser, irrigation and pesticide, which raised food-grain output sharply, beginning with wheat in states like Punjab in the mid-1960s.

What is a marketed surplus?

It is the portion of farm output that is sold in the market rather than consumed by farmers themselves; the Green Revolution increased it, helping feed the non-farm population.

What did the Industrial Policy Resolution of 1956 do?

It classified industries into three categories, reserved key industries for the public sector to capture the commanding heights of the economy, and provided the basis for the licensing system.

Why was small-scale industry promoted?

Because it is labour-intensive and generates employment and a more equitable distribution; following the Karve Committee, items were reserved for small-scale producers, with investment limits.

What was the import-substitution trade strategy?

An inward-looking strategy that replaced imports with domestically produced goods, protecting home industry through tariffs and quotas rather than promoting exports.

What were the drawbacks of the permit-licence raj?

Excessive regulation and licensing bred inefficiency, discouraged competition and innovation, and allowed even loss-making public enterprises to continue, weakening growth.

What progress had the economy made by 1990?

India became self-sufficient in food grains, built a diversified industrial base with a larger public sector, and saw industry's and the service sector's share of GDP rise, though inefficiencies remained.

Indian Economy 1950-1990

Class 11 Economics · Indian Economic Development · Chapter 2

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Summary

After independence India chose a mixed economy, combining features of socialism and capitalism, in which both the state and the market guide economic activity. The Planning Commission was set up in 1950 with the Prime Minister as chairperson, and five-year plans, borrowed from the Soviet model, were launched to pursue four goals: growth, modernisation, self-reliance and equity. The Second Plan, drawn up by statistician P.C. Mahalanobis, emphasised heavy industry. In agriculture, land reforms abolished intermediaries such as zamindars and imposed land ceilings to give "land to the tiller," succeeding most in Kerala and West Bengal. The Green Revolution, based on high-yielding-variety seeds with fertiliser, pesticide and irrigation, spread first to wheat-growing states like Punjab in the mid-1960s and later to more crops and regions, making India self-sufficient in food grains and creating a marketed surplus, though about two-thirds of the population still depended on agriculture in 1990. In industry the Industrial Policy Resolution of 1956 classified industries into three categories, reserved key sectors for the public sector ("commanding heights of the economy") and required licences (the permit-licence raj); small-scale industry was promoted following the Karve Committee. Trade policy was inward-looking, based on import substitution and protection through tariffs and quotas rather than export promotion. By 1990 industry's share of GDP had risen and the service sector had grown, but inefficiencies of excessive regulation set the stage for the 1991 reforms.

Indian Economy 1950-1990

Key terms

Mixed economy

An economic system that combines features of both socialism and capitalism, with roles for the state and the market.

Five-year plans

Plans drawn up by the Planning Commission (set up in 1950) to allocate resources over five-year periods.

Land reforms

Measures such as abolishing intermediaries and imposing land ceilings to give land to the actual tiller.

Green Revolution

The spread of high-yielding-variety seeds with fertiliser, irrigation and pesticide that raised food-grain output.

Import substitution

An inward-looking trade strategy of replacing imports with domestic production behind tariffs and quotas.

Permit-licence raj

The system of industrial licensing under which firms needed government permits to set up or expand.

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After independence India adopted a:

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Indian Economy 1950-1990

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Key terms

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