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Policies that promote assimilation are aimed at persuading, encouraging or forcing all citizens to adopt a uniform set of cultural values and norms whereas policies promoting integration insist that the public culture be restricted to a common national pattern, while all ‘non-national’ cultures are to relegated to the private sphere. 

• Falling dependency ratio can be a source of economic growth and prosperity due to larger proportion of workers relative to non-workers. 
• This is also referred to as Demographic Dividend.

The main income of the Panchayats is from tax levied on property, profession, animals, vehicles, cess on land revenue and rentals.

1. Population growth is linked to overall levels of economic development. 
2. Every society follows a typical pattern of development related population growth.

It is an economic and social inequality with regard to access to, use of, or impact of Information and Communication Technologies (ICT).

The gap between technical knowledge of the people who have access to computers and internet and those who do not have that access.

The term ‘digital divide’ describes the fact that the world can be divided into people who do and people who don’t have access to – and the capability to use – modern information technology, such as the telephone, television, or the Internet. The digital divide exists between those in cities and those in rural areas. The digital divide also exists between the educated and the uneducated, between economic classes, and, globally, between the more and less industrially developed nations.

A digital divide is an economic and social inequality according to categories of persons in a given population in their access to, use of, or knowledge of information and communication technologies

Sex ratio, defined, as the number of females per thousand males, is an important social indicator to measure the extent of prevailing equality between males and females in a society at a given point of time. The sex ratio in the country had always remained unfavourable to females. 

Reasons for Unfavourable Sex-ratio for Females:

(i) Preferential treatment is given to a male child and female children get neglected in most Indian homes.

(ii) The Infant mortality rate in India is high and female infant mortality rate is still higher.

(iii) People go through pre-natal sex determination test. In case of a girl child they abort the child.

(iv) Women generally have lower social, political and economic status in the Indian society. We find dowry deaths, opposition to widow remarriages and low nutritional levels in woman.

(v) hack of social awareness programmes among people especially in rural areas.

Demographic Consequences

• High out migration from Uttaranchal, Rajasthan, Madhya Pradesh and Eastern Maharashtra have brought serious imbalances in age and sex composition in these states.
• Similar imbalances are also brought in the recipient states.

Consequences of International Migration  

• Remittances from the international migrants are one of the major sources of foreign exchange. In 2002, India received US$ 11 billion as remittances from international migrants.
• Migrants act as agents of social change. The new ideas related to new technologies, family planning, girl’s education, etc. get diffused from urban to rural areas through them.
• Migration leads to intermixing of people from diverse cultures.

The reasons for unfavourable sex ratio are:

a. Low socio-economic status of female

b. Low literacy 

c. Female infanticide 

d. Female foeticides

(i) In a serialised novel, a story was published in instalments, keeping the suspense for the next issue. 

(ii) Serialisation allowed readers to relish the suspense, discuss the characters of a novel for the next issue. 

(iii) This was possible since the magazines were illustrated and cheap and affordable due to printing.

World Trade Organisation

• In 1948, to liberalise the world from high customs tariffs and various other types of restrictions, General Agreement for Tariffs and Trade (GATT) was formed by some countries.
• In 1994, it was decided by the member countries to set up a permanent institution for looking after the promotion of free and fair trade amongst nation and the GATT was transformed into the World Trade Organisation from 1st January 1995. 
• WTO is the only international organisation dealing with the global rules of trade between nations. 
• It sets the rules for the global trading system and resolves disputes between its member nations.
• WTO also covers trade in services, such as telecommunication and banking, and others issues such as intellectual rights.

Benefits of forming trading blocs

• Regional Trade Blocs have come up in order to encourage trade between countries with geographical proximity, similarity and complementarities in trading items and to curb restrictions on trade of the developing world.
• Today, 120 regional trade blocs generate 52 per cent of the world trade. These trading blocs developed as a response to the failure of the global organisations to speed up intra-regional trade.

(i) The first requirement is strict implementation of water management policy. The canal project envisages protective irrigation in Stage-I and extensive irrigation of crops and pasture development in Stage-II.

(ii) In general, the cropping pattern shall not include water intensive crops. It shall be adhered to and people shall be encouraged to grow plantation crops such as citrus fruits. 

(iii) The CAD programmes such as lining of water courses, land development and levelling and warabandi system (equal distribution of canal water in the command area of outlet) shall be effectively implemented to reduce the conveyance loss of water.

(iv) The areas affected by water logging and soil salinity shall be reclaimed.

(v) The eco-development through afforestation, shelterbelt plantation and pasture development is necessary particularly in the fragile environment of Stage-II.

(vi) The social sustainability in the region can be achieved only if the land allottees having poor economic background are provided adequate financial and institutional support for cultivation of land.

(vii) The economic sustainability in the region cannot be attained only through development of agriculture and animal husbandry. The agricultural and allied activities have to develop along with other sectors of economy. This shall lead to diversification of economic base and establishment of functional linkages between basic villages, agro-service centres and market centres.

Indian Railways brought people of diverse cultures together –

(i)  Indian Railway was introduced in 1853. 

(ii) Indian Railways network is more than 64,000 kms. 

(iii)  It connects people of different regions through its sixteen (16) zones.

(iv)  Mahatma Gandhi said “Indian Railways brought people of diverse cultures together to contribute to India’s freedom struggle “. 

(v)  People from different languages with different customs and food habits could connect with each other using Indian Railways.

(vi)  Any other relevant point.

India has diverse climatic conditions. Three examples are:

1. While during summers, temperature may reach up to 50°C in some parts of Rajasthan and western Gujarat, while at the same time the temperature may be just around 20°C in Jammu and Kashmir.
2. While Ladakh and Leh may experience temperature as low as -40°C during winters, the temperature at Chennai may hover around 20°C to 25°C on the same day.
3. While the north eastern parts of the country receive abundant rainfall (about 200-250 cm) the north western parts of the country (about 50 cm) hardly experience any rainfall.

Since MPC + MPS = 1

MPC = 1 – MPS MPC = 1 – 0.30 = 0.70 

A-40

National Income (Y) = Consumption (C) + Investment (I) Consumption (C) = Y -1

= 500 – 100 = 400

Consumption (C) = Autonomous Consumption + (National Income x MPC) Autonomous consumption = C – (Y x MPC)

= 400 – (500 x 0.70) 

= 400 – 350 = 50

Negative externalities are the ones which lead to harms to the social welfare in the process of production.

Negative externalities include the following : 

1. Traffic jams. 

2. Pollution from the factories. 

3. Pollution from automobiles. 

Smoke out of chimneys of factories affects the health of the people by causing various diseases like asthama. As a result people will not be able to work with full zeal and enjoy the consumption of goods and

Following are the effects of ban on consumption of liquor in the country : 

(i) Gross Domestic Product – If a ban is imposed on consumption of liquor, gross domestic product will be adversely affected atleast in short run. Alcohol industry is one of the biggest industries. It would result in problem of unemployment and decline in tourism. The sale of liquor contributes to the economy through tax to the government.

(ii) Welfare – If a ban is imposed on consumption of liquor, welfare of the country would improve. A number of social problems originate from the consumption of liquor. With a ban in consumption of liquor, there would be a decline in the number of accidents, rapes and murders.

(c) Borrowing by a government represents a situation of fiscal deficit.

Non-tax revenue refers to government revenue from all sources other than taxes called nontax revenue. These are incomes, which the government gets by way of sale of goods and services rendered by different government departments. Its two sources are: 

1. Commercial Revenue (Profit and interest): It is the revenue received by the government by selling the goods and services produced by the government agencies. For example, profit of public sector undertakings like Railways, BHEL, LIC etc. Government gives loan to State Government, union territories, private enterprises and to general public and earns interest receipts from these loans. It also includes interest and dividends on investments made by the government. 

2. Administrative Revenue: The revenue that arises on account of the administrative function of the government. This includes: 

(i) Fee: Fee refers to a payment made to the government for the services that it renders to the citizens. Such services are generally in public interest and fees are paid by those, who receive such services. For example, passport fees, court fees, school fees in government schools, 

(ii) License Fee: License fee is a payment to grant a permission by a government authority. For example, registration fee for an automobile.

1. Revenue deficit indicates dis¬savings on government account because the government has to make up uncovered gap. 

2. Revenue deficit implies that the government has to cover’this uncovered gap by drawing upon capital receipts either through borrowing or through sale of its assets. 

3. Since government is using capital receipts to meet generally consumption expenditure of the government which leads to an inflationary situation in the economy. 

Two measures to reduced revenue deficit are : 

1. Government should reduce its unproductive or unnecessary expenditure. 

2. Government should increase its receipts from various sources of tax and non-tax revenue.

Income Method NDPfc = iv + v + viii + iii 

 800 + 250 + 150 + 400 = 1600 

GNPfc = NDPfc + dep + NFIA 

 = 1600 + 60 + (- 10) 

GNPfc = 1650 

Expenditure Method 

GDPmp = PFCE+ GFCE+ (NDCF + Dep) + Net export 

 = 1000 + 500 + 260 + (-20) = 1740 

GNPfc = GDPmp + NFIA – NIT 

 = 1740 + (-10) – 80 

 = 1650

Depreciation = GDCF – NDCF 

 = 700 +50 – 650 =100 

GDP mp = iii + vi+ vii+ i +dep + NIT 

 = 1500 + 300 +400 +500 + 100 + 0 

GDPmp = 2800 

NFIA = GNPfc – GDPfc 

0 = 2800 – 2800 NFIA 

= FI from ROW – FI to ROW 

 0 = X – 120 

FA from ROW = 120 

PDI = Personal income – personal tax 

 1000 = PI – 90 = 1090 

Personal Income = private income – viii) + v) 

1090 = Pvt Income – 30 – 10 

1130 = Pvt Income 

Pvt income = pvt sector' income + NFIA + National debt interest + vi) + x) 

 1130 = pvt sector’s income + 0 + 20 + 40 + (- 10) 

 1130 - 50 = 1080 = pvt sector’s income

NNPfc = 1080 + i) + ii)+ NFIA 

 = 1080 + 50 + 70 +0 

NNPfc = 1200 

GNDI = GNPmp + net current transfer from abroad = 1200 + 60 + 80 + (-10) 

GNDI = 1330

(c) Medical facilities rendered by a charitable dispensary.

High component of net export in the total expenditure on final goods and services is a sign of higher exports than imports of the domestic Economy. 

It implies – 

• That the inflow of foreign exchange is greater than the outflow of foreign exchange 
• That the domestically produced goods are able to find markets abroad. So that deficiency of demand no longer remains a hurdle in the growth process. 
• That we are by the large, self-sufficient. Our imports are so limited that we don’t have to depend much on other countries. 

(a) NNP/population

NNDI = GDP MP – consumption of fixed capital + Net FIFA + Net current transfer from abroad 

= 1000- 100 + 50 + (-20) 

= 880 + 50 = 930 crores

• At the macro level saving is a virtue. But it may be vice at the macro level. If an individual saves more, he accumulates more wealth. It enhances his ability to earn more. 
• But at the macro level, if everyone starts saving more, demand for goods and services may fall. It will adversely impact the inducement may shrink, driving the economy into state of depression.

(d) None of them

GNDI= (a) + (b) +(c) + (e)

= 2000 + 200 + 100 + 250 

GNDI = 2550 crores

Net capital formation enhances production capacity and the scale of production. 

It is the sign of growth and development. 

• Net capital formation helps to generate opportunities of employment. Accordingly, unemployment is combated in countries like India. 
• Net capital formation increases productivity of labour. It accelerates the pace of economic growth.

1. When the activities of somebody result in benefits or harms to others with no payment received for the benefit and no payment made for the harm done, such benefits and harms are called externalities. 

2. Activities resulting in benefits to others are positive externalities and increase welfare; and those resulting in harm to others are called negative externalities, and thus decrease welfare. 

3. GDP does not take into account these externalities. 

4. For example, construction of a flyover or a highway reduces transport cost and journey time of its users who have not contributed anything towards its cost. Expenditure on construction is included in GDP but not the positive externalities flowing from it. GDP and positive externalities both increase welfare. Therefore, taking only GDP as an index of welfare understates welfare. It means that welfare is much more than it is indicated by GDP. 

5. Similarly, GDP also does not take into account negative externalities. For examples, factories produce goods but at the same time create pollution of water and air. River Yamuna, now a drain, is a living example. The pollution harms people. The factories are not required to pay anything for harming people. Producing goods increases welfare but creating pollution reduces welfare. Therefore, taking only GDP as an index of welfare overstates welfare. In this case, welfare is much less than indicated by GDP.

Externalities both positive and negative are the limitations of the GDP as an indicator of the welfare, because GDP does not take them into account. 

• Taking an example of introduction of metro rail , as an latest means of transport , reduces transport cost, travel time of its commuters who have not directly contributed anything towards its cost. Expenditure on its construction is included in GDP but not the positive externalities flowing from it. 
• Similarly , GDP does not take into account negative externalities. Taking an example of factories producing goods , they exercise welfare on one hand but on the other hand create pollution of air, water and noise, which in turn harms people , so as the pollution created by the factories reduces welfare. 
• Thus taking only GDP as an index of welfare overstates welfare. In this case welfare is actually lesser indicated by GDP.

Fall in the value of fixed capital like machinery, equipment, building etc. due to general wear & tear & expected obsolescence is called as depreciation.

(i) Purchase of furniture by a firm ; Capital good- so included 

(ii) Expenditure on maintenance by a firm: intermediate good – so not included 

Capital goods are those final goods, which are used and help in the process of production of other goods and services. E.g. plant, machinery etc.

(i) Payment of excise duty by a firm : Not included- it is indirect tax & NI is calculated at factor cost 

(ii) Payment of interest by a firm : Included as firm will use the loan for production purpose. 

(i) Expenditure on fertilisers by a farmer – Not included as it is an intermediate good 

(ii) Purchase of tractor by a farmer – Included- as it is a capital good, it is an investment 

(i) Wheat grown by a farmer but used entirely for the family’s consumption-Included as it is own account production. 

(ii) earning of the shareholders from the sale of shares- Not included as it is just financial transfer. 

(iii) Expenditure by govt. on providing free education – Included as it is Govt. final consumption expendi

(i) Payment of fees to a lawyer engaged by a firm: Not included as it is intermediate consumption. It is services used in production 

(ii) Rent free house to an employee by an employer: Included as it is wages & salaries in kind form. 

(iii) Purchase by foreign tourists: Included as it is export, & value of net export is included in GDP.

(i) Imputed rent of self occupied houses- Included as house is a capital good which generates income even if the owner resides in his own house. An imputed value is estimated & added in the national income.  

(ii) Interest received on debentures: Included as it is a factor income. 

(iii)financial help received for flood victims- not included as it is a transfer payment. 

(d) All of the above.

Indifference curve is defined as the curve depicting the various alternative combinations of two goods which provide the same level of satisfaction to the consumer.

(a) Profits earned by branches of country’s bank in other countries will not be included in the domestic product of the country because it amounts to factor income from abroad which is not included in the domestic income. 

(b) Gifts given by an employer to his employees on Independence Day will not be included in the domestic product of the country because it is not an expenditure on productive activity. It is a transfer payment and not a factor payment. 

(c) Purchase, of goods by foreign tourists will be included in the domestic product of the country because goods purchased by the foreign tourists are produced by the producers in the domestic territory of the country.

When the price of the foreign currency increases, this implies that the domestic currency has increased in terms of the foreign currency. In other words, we can say that the domestic currency has depreciated. 

Now, in such a case there are two implications : 

(a) since the domestic currency has depreciated (let's say from Rs.50- per $ to Rs.60 per $), the imports become expensive, as now the domestic traders will have to pay more to buy the same units of foreign good Thus' this leads to a decline in the demand of the foreign currency 

(b) At the same time with a depreciation in the domestic currency, the exports become cheaper. This will bring in more foreign currency as the exports will increase. Hence, leading to an increase in the foreign exchange supply.

(i) Compensation of employees to the resident of Japan working in Indian embassy in Japan will be included in domestic factor income of India because Indian embassy in Japan is a part of domestic territory of India and income earned within domestic territory is domestic factor income. 

(ii) Payment of fees to a chartered accountant by a firm will not be included in the domestic factor income of India because it is an intermediate expenditure for the firm and only value of final goods and services is included in the domestic factor income. 

(iii) Rent received by an Indian resident from Russian embassy in India will not be included in the domestic factor income of India because it is a factor income received from abroad. Russian embassy in India is not a part of domestic territory of India and domestic factor income includes only those incomes which are earned within domestic territory of the country. 

(iv) Compensation given by an insurance company to an injured worker will not beincluded in the domestic factor income of India because it is not a factor income and is a transfer income which is not included in the domestic factor income. However, if compensation is given by the employer, it would be included in the domestic factor income.