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Economic Presence of
the Government
India is a developing country. Agriculture forms farmers. The Second Five Year Plan targeted
the backbone of the Indian economy. More than basic and heavy industries and aimed at rapid
65 percent of the population is engaged with and industries and aimed at rapid industrial develop-
dependent upon agriculture for their livelihood. ment. The Second Five Year Plan also aimed at
India’s economy is a mixed economy. This ushering a more equitable income distribution. In
means that both the public sector and the private order to build up a more democratic society, the
sector have a role to play. In the initial years, Fifth Five Year Plan concentrated on hill and
public sector was given more importance, but the tribal areas. The Tenth Five Year Plan includes
private sector also enjoyed adequate governmen- increasing literacy rate from 65% to 75% and
tal support in the form of incentives and assis- reducing poverty.
tance through financial institutions. Maintain Law and
GOVERNMENT’S ROLE IN ECONOMIC Protection of the Order
DEVELOPMENT Environment Raise taxes
Economic planning was important and necessary Functions of a Provide Public
Regulate Labour
if independent India was to progress. The leaders Markets Government Goods
of our nation, inspired by the success of eco- Minimise
National Inequality
nomic planning in Russia through the Five Year Defence
Plans, introduced economic planning in India. Macro-economic Reduce Market
Stability Failure
The Planning Commission was set up in 1950.
The task before the Commission was to assess RURAL DEVELOPMENT
the country's resources, decide upon the key Rural areas support the bulk of India’s popula-
areas which required a boost and then formulate tion. Simultaneously, these areas are the breed-
a plan to develop that area. The First Five Year ing ground of poverty, hunger and starvation. So,
Plan, priority was given to agriculture. to accelerate the process of growth and develop-
Agriculture is the mainstay of our economy. It ment of a country, rural development must be
provides us our basic requirement of food and accorded priority. Rural development refers to
also gives support to industries like sugar, jute the actions and initiatives taken for the social and
etc. Export of agricultural crops brings in foreign economic development of the rural or backward
exchange to our country. The government has areas. The key issues in rural development are as
provided farmers with better seeds and fertilizers, follows :
irrigation facilities and modern machinery in 1. Human Capital Formation : Rural areas
order to increase agricultural production. lack quality human capital. Therefore, rural
Cooperative farming and marketing and provi- development programmes should aim at
sion for easy loans have improvedthe position of development of human resources by invest-
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