In the face of the prevailing food crisis, the country was clearly vulnerable to external pressure and dependent on food aid, mainly from the USA. Which, in turn, pushed  India to change its economic policies. The government adopted a strategy for agriculture in order to ensure food sufficiency. Instead of the earlier policy of giving more support to the areas and farmers that were lagging behind, now it was decided to put  more resources into those areas which already had irrigation and those farmers who were already well off. It was argued that those who already had the capacity could help increase production rapidly in the short period. Thus, the government offered high-yielding variety seeds, fertilisers, pesticides and better irrigation at highly subsidised prices. The government also gave a guarantee to buy the produce of the farmers at a given price. This policy provided boost in agricultural production which is known green revolution.

The consequences of the Green Revolution were as given below :

Positive :
(a)There was moderate agricultural growth particulary in wheat production.

(b) It raised the availability of food in the country.

Main problems of human capital formation in India are:

1. Rising Population. Rapidly rising population adversely affects the quality of human capital formation in developing countries. It reduces per capita availability of existing facilities. A large population requires huge investment in education and health. This diverts the scarce money to production of human capital at the cost of physical capital.
2. Long Term Process. The process of human development is a long term policy because skill formation takes time. The process which produces skilled manpower is thus slow.
3.  High Regional and Gender Inequality. Regional and gender inequality lowers the human development levels.
4. Brain Drain. Migration of highly skilled labour termed as “Brain Drain” adversely affects the economic development.
5.  Insufficient on-the-job-training in agriculture. Agriculture sector is neglected where the workers are not given on-the-job training to absorb emerging new technologies.
6.  High Poverty Levels. A large proportion of the population lives below poverty line and do not have access to basic health and educational facilities. A large section of society cannot afford to get higher education or expensive medical treatment for major disease.

Land degradation means toss of fertility of land. Six of the factors responsible for land degradation are (i) Loss of vegetation occuring due to de lore station. (ii) Unsustainable fuel wood and fodder extraction. (iii) Extraction of around water in excess of the recharge capacity. (iv) Non-adoption of adequate soil conservation measures. (v) Improper crop rotation. (vi) Indiscriminate use of agro-chemicals such as fertilizers and pesticides.

Various factors that led to the rapid growth in economic development in China are as given below
(i) China initiated to implimented the economic reforms in 1978 without any compulsion by the World Bank and IMF.
(ii) China established infrastructure in the field of health and education that helped effectively in , improving the social and income indicators.
(iii) China implemented land reforms that increased the productivity.
(iv) There was long existence of decentralised planning.
(v) The size of individual enterprises was kept small.
All the factors mentioned above helped positively towards economic development.

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Problems faced by the power sector are as follows:
(i) The installed capacity of India to generate electricity is not sufficient enough to meet an annual economic growth of 7%.
(ii) The state electricity Boards (SEBs) that distribute electricity suffered a great loss of more than 500 billion due to transmission and distribution of electricity.
(iii) The wrong pricing of electricity like supply is electricity at subsidized rates to agricultural sector and theft of electricity has exaggerated the problems of power sector.
(iv) The high power tariffs and prolonged power cuts is another challenge in the power sector.
(v) The thermal power station faces the scarcity of the raw materials to generate electricity

(i) Setting up of regulated markets : Regulated markets have been set up to improve the
marketing of agricultural produce. In this,
there is a control of market committee on
the sale of agricultural produce. As a result, the malpractices have come to an end in the mandis. Out of the 7600 mandis, about 7000 mandis are regulated. Now more than 70% : of the produce is sold in the mandis.
(ii) Storage facilities : Government had set up central warehousing corporation in 1957. The main objective of this is to run and construct godowns and warehouses for the storage of agricultural produce. For the same purpose, the State Government has also set up ‘state warehousing corporations’. Godowns have been established at mandi level and village level. In the beginning of the 10th plan, the storage capacity of all the agencies was 702 lakh tonnes.
(iii) Grading and standardization : Agricultural
Produce (grading and marketing) Act was implemented in 1937. Under this act, government has established grading stations for goods like flour, ghee, eggs, etc, AGMARK stamp of the department of agricultural marketing is marked on the graded goods. There is a wide market of AGMARK goods. These goods are sold at higher prices.
(iv) Quality control: Government has setup central control quality laboratory at Nagpur. Eight other regional laboratories have also been established in various parts of the country. The main objective is to test the quality and purity of agricultural good% In this way, quality control is being given due importance.

Economic reforms did not benefit the agriculture and the, agricultural growth rate has been decelerating. Public investment in agriculture sector has been reduced in the reform period due to which irrigation, power, roads, market linkages and agricultural research have suffered. Further, the removal of fertilizer subsidy has led lo increase in the cost of production, which has severely affected the small and marginal farmers. Globalisation and membership of WTO has resulted in policy changes such as reduction in Import duties on agricultural products, removal of minimum support price and lifting of quantitative restrictions on agricultural products which have increased international competition for Indian farmers making their condition more miserable. There has been a shift from production for the domestic market towards production for the export market because of export oriented policy strategies in agriculture. This has shifted the focus on cash crops in place of production of food grains which has led to a fall in supply of food grains thereby creating pressure on prices of food grains.

Yes, we agree with the above statement that the traditional handicrafts industries were ruined under the British rule. The following are the reasons in favour of the statement. (i) Discriminatory Tariff Policy The British rule used India both as a source of cheap raw materials as well as easy accessible market for their finished products. Thereby, they imposed heavy tariffs (export duties) on India's export of handicraft products, while allowed free export of India's raw material to Britain and free import of British finished products into India. This made India's exports costlier and its international demand loll drastically leading to the collapse of handicraft industries. (ii) Competition from Machine-made Britain Goods The demand for the handicrafts products experienced a downward trend in the domestic markets as well. This was due to stiff competition from the machine made textiles from Britain. The goods produced mechanically in Britain using cheap raw material from India were comparatively lower in price and of superior quality than the Indian handicraft goods. This narrowed the market for Indian handicrafts industries. (iii) Emergence of Western Lifestyle The British rule in India popularized Western lifestyle in India. There was an emergence of a new section of population (consisting mainly of zamindars) in India who liked the British goods and also promoted their use to please the British Government. This section used to spend lavishly on the British products that provided impetus for the development of British Industries al the cost of the domestic Industries. Hence, gradually Indian handicrafts industries perished away. (iv) Downfall of Princely State Prior to the British rule, nawabs, rajas, princes and emperors ruled different parts of the country. They used to patronise handicrafts industries and consequently, Indian handicrafts gained reputation n; the international markets. But during the British rule, these princely stales were ruined thereby ruining the protection of those handicrafts industries. Thus, Indian handicrafts industries could not survive.

Land distribution has been part of India's state policy from the very beginning. Independent India's most revolutionary land policy was perhaps the abolition of the Zamindari system (feudal landholding practices). Land-reform policy in India had two specific objectives: "The first is to remove such impediments to increase in agricultural production as arise from the agrarian structure inherited from the past. The second objective, which is closely related to the first, is to eliminate all elements of exploitation and social injustice within the agrarian system, to provide security for the tiller of the soil and assure equality of status and opportunity to all sections of the rural population.” (Government of India 1961 as quoted by Appu 1996.

Investment multiplier implies that any change in the investment leads to a corresponding change in the income and output by multiple times. That is, in other words, the change in the income and output is more than (or multiple times of) the change in investment.
Investment Multiplier, K = △Y/△I
Investment Multiplier shares a direct positive relationship with marginal propensity to consume. That is, higher the value of MPC, higher will be the value of investment multiplier and vive-versa. That is Higher the proportion of increased income spend on consumption, higher will be value of investment multiplier.
Algebraically, the relationship is expressed as follows.
K= 1/(1- MPC)

(i) Heavy reliance on public sector, (ii) Regulated development of private sector, (iii) Protection of small-scale industry and regulation of large-scale industry, (iv) Development of heavy industry of strategic significance, (v) Thrust on saving and investment, (vi) Protection from foreign competition, (vii) Focus on import substitution, (viii) Restriction on foreign capital, (ix) Centralised planning.

Inflationary gap is the gap showing excess of current aggregate demand over 'aggregate supply at the level of full employment'. It is called inflationary because it leads to inflation (continuous rise in prices).

Foreign exchange rate is determined by the market forces of demand and supply in foreign exchange market.
The rate of exchange is obtained from the equilibrium exchange rate, which we get when the supply of foreign exchange equals to the demand for foreign exchange.
In the given figure, DD curve represents the demand for foreign exchange and SS curve represents the supply of foreign exchange for different values of R, i.e. rate of exchange. Point E is the equilibrium point, where DD = SS. So, R will be the rate of exchange.
If the rate of exchange is arbitrarily fixed other than R, there will be a situation of either excess demand or excess supply of foreign exchange. So, R is the rate of exchange which corresponds to the equilibrium point E.

Investment multiplier refers to the number of time by which the increase in output or income exceeds the increase in investment. It is measured as the ratio between change in income and change in investment. For example investment is increased by 1,000 crore rupees, now

(a) In the multiplier process, increase in income in the first round is always equal to additional investment. So, Increase in income in the first round =Rs.1,000=Rs.1,000 crores. 

(b) The saving off  Rs. 200 crores indicates that increase in consumption will be Rs. 800 crores in the first round. 
- additonal consumption of Rs. 800 crores out of an additional income of Rs. 1,000 indicates that 80% of income is spent, Le. MPC = 0.8. The values of second and third round are calculated on the basis of this data. 

(c) Total Increase in Income = Additional Investment x kxk. In the given case: 
Multiplier (k)=11−MPC=11−0.8=5(k)=11−MPC=11−0.8=5
So, Total Increase in Income =1,000×5=Rs.5,000 crores=1,000×5=Rs.5,000crores

(d) Total Increase in Consumption == Total increase in Income ×× MPC =5,000 x 0.8=Rs.4,000 crores=5,000x0.8=Rs.4,000crores.

(e) Total Increase in Saving == Total Increase in Income −− Total Increase in Consumption =5,000−4,000=1,000 crores=5,000−4,000=1,000crores.

(f) Values of All other Rounds' is calculated after subtracting the values of first, second and third round from the total increase in income, consumption and saving respectively.