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## TN State Board 11th Economics Model Question Paper 3 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3:00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions: [20 × 1 = 20]

Question 1.
Knitted garment production is concentrated in …………………..
(a) Coimbatore
(b) Tiruppur
(c) Erode
(d) Karur
(b) Tiruppur

Question 2.
The recommendation of Narashimham Committee Report was admitted in the year ………………….
(a) 1990
(b) 1991
(c) 1995
(d) 2000
(b) 1991

Question 3.
In literacy rate, TN ranks …………………
(a) Second
(b) Fourth
(c) Sixth
(d) Eighth
(d) Eighth

Question 4.
The average revenue curve under monopolistic competition will be ………………….
(a) Perfectly inelastic
(b) Perfectly elastic
(c) Relatively
(d) Unitary elastic
(c) Relatively

Question 5.
The main theme of the Twelfth Five Year Plan …………………..
(a) Faster and more inclusive growth
(b) Growth with social Justice
(c) Socialistic pattern of society
(d) Faster, more inclusive and sustainable growth
(d) Faster, more inclusive and sustainable growth

Question 6.
The Oldest large scale industry in India …………………
(a) Cotton
(b) Jute
(c) Steel
(d) Cement
(a) Cotton

Question 7.
The main gold mine region in kamataka is ………………..
(a) Kolar
(b) Ramgiri
(c) Anantpur
(d) Cochin
(a) Kolar

Question 8.
The command Ctrl + M is applied for …………………..
(a) Saving
(b) Copying
(c) Getting new slide
(d) Deleting a slide
(c) Getting new slide

Question 9.
Theory of distribution is popularly known as ………………………
(a) Theory of product pricing
(b) Theory of factor pricing
(c) Theory of wages
(d) Theory of Interest
(b) Theory of factor pricing

Question 10.
Identify the formuld of estimating average cost ………………………
(a) AVC/Q
(b) TC/Q
(c) TVC/Q
(d) AFC/Q
(b) TC/Q

Question 11.
The cost per unit of output is denoted by …………………. cost.
(a) Average
(b) Marginal
(c) Variable
(d) Total
(a) Average

Question 12.
Revenue received from the sale of additional unit is turned as …………………. revenue.
(a) Profit
(b) Average
(c) Marginal
(d) Total
(c) Marginal

Question 13.
The Headquarters of Southern Railway is at ……………………
(a) Tiruchirappalli
(b) Chennai
(d) Coimbatore
(b) Chennai

Question 14.
Financial sector reforms mainly related to …………………….
(a) Insurance sector
(b) Banking sector
(c) Both (a) & (b)
(d) Transport sector
(c) Both (a) & (b)

Question 15.
Identify the cause for rural indebtedness in India.
(a) Poverty
(b) High population
(c) High productivity
(d) Full employment
(a) Poverty

Question 16.
Differentiation of constant term gives …………………..
(a) One
(b) Zero
(c) Infinity
(d) Non – infinity
(b) Zero

Question 17.
The recommended nutritional intake per person in rural areas …………………
(a) 2100 calories
(b) 2200 calories
(c) 2300 calories
(d) 2400 calories
(d) 2400 calories

Question 18.
Perfect competition assumes …………………….
(a) Luxury goods
(b) Producer goods
(c) Differentiated goods
(d) Homogeneous goods
(d) Homogeneous goods

Question 19.
The concept of ‘Quasi – Rent’ is associated with ……………………
(a) Ricardo
(b) J.M. Keynes
(c) Walker
(d) Marshall
(d) Marshall

Question 20.
In Economics, distribution of income is among the ………………….
(a) Factors of production
(b) Individual
(c) Firms
(a) Factors of production

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
State the meaning of liquidity preference?

1. Liquidity preference means the preference of the people to hold wealth in the form of liquid cash rather than in other non – liquid assets like bonds, securities, bills of exchange, land, building, gold etc.
2. “Liquidity Preference is the preference to have an equal amount of cash rather than of claims against other”.

Question 22.
State the various components of central sector schemes under post – harvest measures?

1. Mega food parks, Integrated cold chain, Value Addition Preservation, Infrastructure and modernization of slaughter house.
2. Scheme for quality Assurance, Codex Standards, Research and Development and other promotional activities.

Question 23.
What are the nuclear power plants in Tamil Nadu?
The Kalpakkam Nuclear Power Plant and the Koodankulam Nuclear Power plant are the major nuclear energy plants for the energy grid.

Question 24.
Give the meaning of deductive method?

1. Deductive method is also named as analytical or abstract method.
2. It consists in deriving conclusions from general truths,
3. It takes few general principles and applies them to draw conclusions.
4. The classical and neo – classical school of economists notably, Ricardo, JS Mill, Malthus Marshall, Pigou applied the deductive method in their economic investigations.

Question 25.
Give a short note on Sen’s ‘Choice of Technique’?
Sen’s ‘Choice of Technique’ was a research work where he argued that in a labour surplus economy, generation of employment cannot be increased at the initial stage by the adaptation of capital – intensive technique.

Question 26.
Give the meaning of non – renewable energy?
Non – renewable energy sources:

1. The sources of energy which cannot be renewed or re – used are called non – renewable energy sources.
2. Basically these are the energy sources which will get exhausted over a period of time.
3. Some of the examples of this kind of resources are coal, oil, gas etc.

Question 27.
Distinguish goods from services?

 Goods Services 1. Free and Economic goods. Ex: air and sunshine 1. Intangible Ex: brand image 1 pen drive 2. Consumer goods. Ex: TV, Furniture, Automobile, etc. 2. Heterogeneous Ex: Music, Consulting physicians etc. 3. Capital goods also called producer goods. Ex: Machines 3. Inseparable from their makers Ex: Labour and Labourer 4. Perishable goods Ex: Fish, Fruits, Flower. 4. Perishable. Ex: A ticket for a cricket match once the match is over. 5. Durable Goods Ex: table, chair. 5.           –

Question 28.
Write the meaning of Economic Growth?

1. Economic growth is usually measured by National Income, indicated by cross domestic product. [GDP].
2. The GDP is the total monetary value of the goods and services produced by that country over a specific period of time, usually one year.
3. On the basis of the level of economic development, nations are classified as developed and developing economies.

Question 29.
Name the basic approaches to consumer behaviour?
There are two basic approaches, namely:

1. Utility approach

1. The utility approach involves the use of measurable (cardinal) utility to study consumer behaviour.
2. Marshall is the chief exponent of the utility approach to the theory of demand. It is known cardinal utility analysis or marginal utility analysis or marshallian utility analysis.

2. Indifference curve approach
The indifference curve approach was the idea of comparable utility [ordinal utility] J.R. Hicks and R.G.D. Allen introduced the indifference curve approach.

Question 30.
What do you mean by fixed cost?

1. Fixed Cost does not change with the change in the quality of output.
2. Fixed Cost is also called as “Supplementary Cost “or Overhead Cost”.
3. All payments for the fixed factors of production are known as Total Fixed Cost.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
Write the formula of consumers surplus?
Consumer’s Surplus = Total utility [Actual price × Units of commodity]
= TU – [P × Q]
20 – [2 × 5] = 20 – 10 =10
Total utility = 20
Actual price = 2
Quantity = 5

Question 32.
Mention any two type of price discrimination?

1. Personal: Different prices are charged for different individuals. For example, the railways give tickets at concessional rate to the ‘Senior citizens’ for the same journey.
2. Geographical: Different prices are charged at different places for the same product. For example, a book sold within India at a price is sold in a foreign countiy at lower price.

Question 33.
Explain different types of economic activities?
The seven types of economic activities are:

1. Micro Economics: Micro Economics is the study of the economic actions of individuals say households, firms or industries.
Micro economics covers:-

1. Value theory [product pricing and factor pricing]
2. Theory of economic welfare.

2. Macro – Economics:

1. Macro economics is the obverse of micro economics.
2. The general theory of employment, Interest and money published by Keynes is the basis of modem macro economics.

3. International Economics:

1. In the modem world, no country can grow in isolation.
2. Every country is having links with the other countries through foreign capital, investment [foreign direct investment] and international trade.

4. Public Economics:

1. Public finance is concerned with the income or revenue raising and expenditure incurring activities.
2. The scope of public finance covers public expenditure, public revenue, public debt and financial administration.

5. Developmental Economics:
The development economics, deals with features of developed nations, obstacles for development, .economic and non- economic factors influencing development, various growth models and strategies.

6. Health Economics:

1. Health economics is an area of applied economics.
2. It covers health indicators , preventive and curative measures medical research and education, rural health mission, drug price control, neo – natal care, maternity and child health, budgetary allocation for health.

7. Environmental Economics:

1. Depletion of natural resources stock and pollution result from rapid economic development.
2. Environmental economics is a study of inter disciplinary tools for the problems of ecology, economy and environment.

Question 34.
Write a note on Risk – bearing theory of profit?

1. Risk bearing theory of profit was propounded by the American economist F.B. Hawley in 1907.
2. According to him, profit is the reward of risk taking in business.
3. Risk taking is an essential function of the entrepreneur and is the basis of profits.
4. It is a well know fact that every business involves some risks.
5. Since the entrepreneur undertakes the risks, he receives profit.
6. If the entrepreneur does not receive the reward, he will not be prepared to undertake the risks.
7. Every entrepreneur products goods in anticipation of demand.
8. It is the profit that induces the entrepreneurs to undertake such risks.

Question 35.
Distinguish between Fixed cost and Variable cost?

 Fixed Cost Variable Cost 1. Fixed cost does not change with the change in the quantity of output. 1. Variable cost vary with the level of output. 2. Fixed cost is also called as “Supplementary Cost” or “over head cost”. 2. Variable cost is also called as “ Prime cost”, “Special cost” or Direct cost. 3. For example: Watchman’s wages, Permanent worker’s Salary, machines Insurance Premium deposite for power Licence fee, etc. 3. For example: Temporary workers, cost of raw materials, fuel cost, electricity charges, etc.

Question 36.
What are the characteristics of land?

1. Land is a primary factor of production
2. Land is a passive factor of production
3. Land is the free gift of nature
4. Land has no cost of production
5. Land is fixed in supply. It is inelastic in supply
6. Land is permanent
7. Land is immovable
8. Land is heterogeneous as it differs in fertility
9. Land has alternative uses
10. Land is subject to Law of Diminishing Returns.

Question 37.
What are the factors governing elasticity of supply?
1. Nature of the commodity:
Durable goods can be stored for a long time. So, the producers can wait until they get a high price. Once they get higher price, larger supply is possible. The elasticity of supply of durable goods is high. But perishables are to be sold immediately. So perishables have low elasticity of supply.

2. Cost of production:
When production is subject to either constant or increasing returns, additional production and therefore increased supply is possible. So elasticity of supply is greater. Under diminishing returns, increase in output leads to high cost. So elasticity of supply is less.

3. Technical condition:
In large scale production with huge capital investment, supply cannot be adjusted easily. So elasticity of supply is lesser. Where capital equipment is less and technology simple, the supply is more elastic.

4. Time factor:
During very short period when supply cannot be adjusted, elasticity of demand is very low. In short period, variable factors can be added and so supply can be adjusted to some extent. So elasticity of supply is more. In long period, even the fixed factors can be added and hence supply is highly elastic.

Question 38.
Mention the similarities between perfect competition and monopolistic competition?

 Perfect Competition Monopolistic Competition 1. Large number of buyers and sellers 1. Large number of buyers and many sellers 2. Homogeneous product & uniform price 2. Close substitute commodity 3. Free Entry and exit 3. Free Entry and exit 4. Very small size of market for each firm 4. Small size of market 5. It has no monopoly power 5. Limited power 6. Uniform power (or) low price 6. Moderate power 7. Price policy price taker 7. Low control elasticity of demand 8. Price elasticity – infinite 8. Some control over price depending on consumers brand loyalty

Question 39.
Write any three objectives of Industrial Policy 1991?

1. Economic development of a country particularly depends on the process of Industrialisation.
2. At the time of Independence, India inherited a weak and shallow Industrial base.
3. Therefore dining the post-Independence period, the Government of India took special emphasis on the development of a solid Industrial base.

Question 40.
Enumerate the remedial measures to rural poverty?
Remedial measures:

1. Since rural unemployment and rural poverty are interrelated, creation of employment opportunities would support elimination of poverty.
2. Poverty alleviation schemes and programmes have been implemented, modified, consolidated, expanded and improved over time.
3. However, unemployment, begging, rag-picking and slumming continues.
4. Unless employment is given to all the people poverty cannot be eliminated.

PART – IV

Answer all the questions. [7 × 5 = 35]

Question 41 (a).
Explain the objectives of nationalization of commercial banks?
The Government of India nationalized the commercial banks to achieve the following objectives:

1. The main objective of nationalization was to attain Social Welfare. Sectors such as agriculture, small and village industries were in need of funds for their expansion and further economic development.
2. Nationalisation of banks helped to curb private monopolies in order to ensure a smooth supply of credit to socially desirable sections.
3. In India, nearly 70% of population lived in rural areas. Therefore it was needed to encourage the banking habit among the rural population.
4. Nationalisation of banks was required to reduce the regional imbalances where the banking facilities were not available.
5. Before Independence, the numbers of banks were certainly inadequate. After nationalization, new bank branches were opened in both rural and urban areas.
6. Banks created credit facilities mainly to the agriculture sector and its allied activities after nationalization.
After New Economic Policy 1991, the Indian banking Industry has been facing the new horizons of competitions, efficiency and productivity.

[OR]

(b) Describe the Salient features of EXIM policy [2015 – 2020]?
The new EXIM policy has been formulated focusing on increasing in exports Scenario, boosting production and supporting the concepts like Make in India and Digital India.
Salient Features:

1. Reduce export obligations by 25% and give boost to domestic manufacturing supporting the “Make in India” concept.
2. As a step to Digital India concept, online procedure to upload digitally signed document by CA /CS / Cost Accountant are developed and further mobile app for filing tax, stamp duty has been developed.
3. Repeated submission of physical copies of documents available on Exporter Importer Profile is not required.
4. Export obligation period for export items related to defence, military store, aerospace and nuclear energy to be 24 months.
5. EXIM policy 2015 – 2020 is expected to double the share of India in World Trade from present level of 3% by the year 2020. This appears to be too ambitions.

Question 42 (a).
Describe the wastes of monopolistic competition?
Wastes of Monopolistic Competition:
Generally there are five kinds of wastages under monopolistic competition.

(I) Idle capacity:

1. Un – utilized capacity is the difference between the optimum output that can be produced and the actual output produced by the firm.
2. In the long run, a monopolistic firm produces delibourately output which is less than the optimum output that is the output corresponding to the minimum average cost.
3. This leads to excess capacity which is actually as waste in monopolistic competition.

(II) Unemployment:

1. Under monopolistic competition, the firms produce less than optimum output.
2. As a result, the productive capacity is not used to the fullest extent.
3. This will lead to unemployment of human resources also.

1. There is a lot of waste in competitive advertisements under monopolistic competition.

(IV) Too many varieties of Goods:

• The goods differ in size, shape, style and colour. A reasonable number of varieties would be sufficient.

(v) Inefficient firms:
Under monopolistic competition, inefficient firms charge prices higher than their marginal cost. Efficient firms cannot drive out the inefficient firms.

[OR]

(b) Illustrate the Ricardian Theory of Rent?

1. The Classical theory of Rent is called “ Ricardian Theory of Rent.”
2. “ Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil” – David Ricardo

Ricardian theory of rent assumes the following:

1. Land differs in fertility.
2. The law of diminishing returns operates in agriculture.
3. Rent depends upon fertility and location of land.
4. Theory assumes perfect competition.
5. It is based on the assumption of long period.
6. There is existence of marginal land or no – rent land.
7. Land has certain “Original and indestructible powers”.
8. Land is used for cultivation only.
9. Most fertile lands are cultivated first.

Question 43 (a).
State the differences between money cost and real cost?

 Money cost Real cost 1. Production cost expressed in money terms is called as money cost. 1. Real cost refers to the payment made to compensate the efforts and sacrifices of all factor owners for their services in production. 2. Money cost includes the expenditures such as cost of raw materials, payment of wages and salaries, payment of rent, Interest on capital, expenses on fuel and power, expenses on transportation and other types of production related costs. 2. Real cost includes the efforts and sacrifices of landlords in the use of. land, capitalists to save and invest, and workers, in foregoing leisure. 3. Money costs are considered as out of pocket expenses. 3. Real cost are considered pains and sacrifices of labour as real cost of production.

[OR]

(b) Explain the Keynesian Theory of Interest?

1. Keynes Liquidity Preference Theory of Interest or The monetary Theory of Interest
2. Keynes propounded the Liquidity Preference Theory of Interest in his famous book,
“ The General Theory of Employment, Interest and Money “ in 1936.
3. According to Keynes, interest is purely a monetary phenomenon because the rate of interest is calculated in terms of money.
4. “Interest is the reward for parting with liquidity for a specified period of time”.

Meaning of Liquidity Preference:

1. Liquidity preference means the preference of the people to hold wealth in the form of liquid cash rather than in other non – liquid assets like bonds, securities, bills of exchange, land, building, gold etc.
2. “ Liquidity Preference is the preference to have an amount of cash rather than of claims against others” – Meyer.

Motives of Demand for Money:
According to Keynes, there are three motives for liquidity preferences. They are:

1. The Transaction Motive:
The transaction motive relates to the desire of the people to hold cash for the current transactions [ or-day-to-day expenses ] M( = f(y)

2. The Precautionary Motive:

1. The precautionary motive relates to the desire of the people to hold cash to meet unexpected or unforeseen expenditures such as sickness, accidents, fire and theft.
2. The amount saved for this motive also depends on the level of Income Mp = f(y)..

3. The Speculative Motive:

1. The speculative motive relates to the desire of the people to hold cash in order to take
advantage of market movements regarding the future changes in the price of bonds and securities in the capital market. M – f(i)
2. There is inverse relation between liquidity preference and rate of interest.

Question 44 (a).
Illustrate price and output determination under monopoly?
Price & output Determination under Monopoly:
A monopoly is a one firm – industry. Therefore, a firm under monopoly faces a downward sloping demand curve (or AR curve). Since, under monopoly AR falls, as more units of output are sold, the MR lies below the AR curve (MR < AR). The monopolist will continue to sell his product as long as his MR > MC. He attains equilibrium at the level of output when its MC is equal to MR. Beyond this point, the producer will experience loss and hence will stop selling. Let us take the following hypothetical example of Total Revenue Function and Total cost function.

TR = 100Q – 4Q2 and
TC = Q3 – 18Q2 + 91Q + 12
Therefore AR = 100 – 4Q;
MR = 100 – XQ;
AC = Q2 – 18Q + 91 + 12/Q;
MC = 3Q2 – 36Q + 91;
When Q = 3,
AR = 100 – 4(3) = 88,
AC = 32 – 8(3) + 91 + 12/3
9 – 54 + 91 + 4 = 50;
MR = 100 – 8(3) = 76;
MC = 3(3)2 – 36(3) + 91
= 27 – 108 + 91 = 10

From this diagram, till he sells 3 units output, MR is greater than MC, and when he exceeds this output level, MR is less than MC. The monopoly firm will be in equilibrium at the level of output where MR is equal to MC. The price is 88.

To checkup how much profit the monopolist is making at the equilibrium output, the average revenue curves and the average cost curves are used. At equilibrium level of output is 3; the average revenue is 88 and the average cost is 50. Therefore (88 – 50 = 38) is the profit per unit.
Total profit = (Average Revenue – Average Cost) Total output = (88 – 50) × 3
= 38 × 3 = 114

[OR]

(b) Write a note on Risk – bearing theory of profit?

1. Risk bearing theory of profit was propounded by the American economist F.B. Hawley in 1907.
2. According to him, profit is the reward of risk taking in business.
3. Risk taking is an essential function of the entrepreneur and is the basis of profits.
4. It is a well know fact that every business involves some risks.
5. Since the entrepreneur undertakes the risks, he receives profit.
6. If the entrepreneur does not receive the reward, he will not be prepared to undertake the risks.
7. Every entrepreneur products goods in anticipation of demand.
8. It is the profit that induces the entrepreneurs to undertake such risks.

Question 45 (a).
What are the ideas of information and communication technology used in economics? Introduction: Information and communication Technology [ICT] is the infrastructure that enables computing faster and accurate?
The following table gives an idea of range of technologies that fall under the category of ICT

 Information Technologies 1. Creation Personal computers, Digital Camera, Scanner, Smart Phone 2. Processing Calculator, PC – Personal Computer, Smart Phone 3. Storage CD, DVD, Pen Drive, Microchip, Cloud 4. Display PC – Personal computer, TV – Television, Projector, Smart Phone 5. Transmission Internet, Teleconference, Video, Conferencing, Mobile, Technology, Radio 6. Exchange E – mail, Cell Phone

The evaluation of ICT has five phases:
They are evaluation in:

1. Computer
2. PC – Personal Computer
3. Micro Processor
4. Internet

In Economics, the uses of mathematical and statistical tools need the support of ICT for:

1. Data Compiling
2. Editing
3. Manipulating
4. Presenting the results

[OR]

(b) Raja purchased 6 pens and 5 pencils spending ?49, Rani purchased 3 pens and 4 pencils spending ₹42. What is the price of a pen and pencil?
$$\begin{bmatrix} 6 & 5 \\ 3 & 4 \end{bmatrix}$$ $$[\begin{matrix} x_{ 1 } \\ x_{ 2 } \end{matrix}]$$ = $$[\begin{matrix} 49 \\ 32 \end{matrix}]$$ = $$\begin{vmatrix} 6 & 5 \\ 3 & 4 \end{vmatrix}$$
= 24 – 15 = 9
x = $$\begin{vmatrix} 49 & 5 \\ 32 & 4 \end{vmatrix}$$ = 196 – 160 = 36
y = $$\begin{vmatrix} 6 & 49 \\ 3 & 32 \end{vmatrix}$$ = 192 – 47 = 45
x = $$\frac{36}{9}$$ = 4
y = $$\frac{45}{9}$$ = 5
The cost of pen = ₹4
The cost of pencil = ₹5

Question 46 (a).
Explain the weakness of Indian Economy?
(I) Large Population:

1. India stands second in terms of size of population next to China and our country is likely to overtake China in near future.
2. Population growth rate of India is very high and this is always a hurdle to growth rate.

(II) Inequality and poverty:

1. There exists a huge economic disparity in the Indian economy.
2. The proportion of income and assets owned by top 10% of Indians goes on increasing.
3. Increase in the poverty level in the society and still Below Poverty Line [BPL] a higher percentage of individuals are living.
4. As a result of unequal distribution of the rich becomes richer and poor becomes poorer.

(III) Increasing Prices of Essential Goods:

1. Even though there has been a constant growth in the GDP and growth opportunities in the Indian economy, there have been steady increase in the prices of essential goods.
2. The continuous rise in prices erodes the purchasing power and adversely affects the poor people, whose income is not protected.

(IV) Weak Infrastructure:

1. A gradual improvement in the infrastructural development.
2. There is still a scarcity of the basic infrastructure like power, transport, storage etc.

1. Growing youth population, there is a huge need of the employment opportunities.
2. The growth in production is not accompanied by creation of job.
3. The Indian economy is characterized by “ Jobless growth”.

(VI) Outdated technology:
The level of technology in agriculture and small scale Industries is still outdated and obsolete.

[OR]

(b) Discuss the problems of Rural Economy?
Rural areas are facing number of problems relating to,

1. People
2. Agriculture
3. Infrastructure
4. Economy
5. Society and Culture

(I) People Related Problems:
The problems related to individuals and their standard of living consist of illiteracy, lack of technical know how, low level of confidence, dependence on sentiments and beliefs etc.

(II) Agriculture Related Problems:
The problems related to agriculture include as follows,

1. Lack of expected awareness, knowledge, skill and attitude.
2. Unavailability of inputs.
3. Poor marketing facility.

(III) Infrastructural Related problems:
Poor infrastructure facilities like, water, electricity, transport, educational institutions, communication, health, employment, storage facility, banking and insurance are found in rural areas.

(IV) Economics related problems:
The economic problems related to rural areas are,

1. Inability to adopt high cost technology.
2. High cost of inputs.
3. Under privileged rural industries.
4. Low income
5. Indebtedness
6. Existence of inequality in land holdings and assets.

The Specific leadership related problems found in rural areas are,

1. Leadership among the hands of inactive and incompetent people
2. Self – interest of leaders
3. Biased political will
4. Less bargaining power
5. Negation skills and dominance of political leaders

1. Political interference
2. Lack of motivation and interest
3. Low wages in villages
4. Improper utilization of budget
5. Absence of monitoring
6. Implementation of rural development programme.

Question 47 (a).
Explain the role of SSIs in Economic development?
1. Provide Employment

1. SSIs use labour intensive techniques. Hence, they provide employment opportunities to a large number of people. Thus, they reduce the unemployment problem to a great extent.
2. SSIs provide employment to artisans, technically qualified persons and professionals, people engaged in traditional arts, people in villages and unorganized sectors.
3. The employment-capital ratio is high for the SSIs.

2. Bring Balanced Regional Development

1. SSIs promote decentralized development of industries as most of the SSIs are set up in backward and rural areas.
2. They remove regional disparities by industrializing rural and backward areas and bring balanced regional development.
3. They help to reduce the problems of congestion, slums, sanitation and pollution in cities. They are mostly found in outside city limits.
4. They help in improving the standard of living of people residing in suburban and rural areas in India.
5. The entrepreneurial talent is tapped in different regions and the income is also distributed instead of being concentrated in the hands of a few individuals or business families.

[OR]

(b) Explain the objectives and characteristics of SEZs?

1. The Special Economic Zones [SEZs] Policy was announced in April 2000.
2. The Special Economic Zones Act of 2005, the government has so far notified about 400 such zones in the country.

Major objectives of SEZs:

1. To enhance foreign investment, especially to attract foreign direct investment [FDI] and thereby increasing GDP.
2. To increase shares in Global Export. (International Business)
3. To generate additional economic activity.
4. To create employment opportunities.
5. To develop infrastructure facilities.
6. To exchange technology in the global market.

Main Characteristics of SEZ:

1. Geographically demarked area with physical security.
2. Administrated by single body authority.
3. Streamlined procedures.
4. Having separate custom area.
5. Governed by more liberal economic laws.
6. Greater freedom to the firms located in SEZs.