Humanities and Social Science.

A Textbook By Vishal Kashyap
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| Humanities and Social Science
Unit I: India
Brief History of Indian Constitution:
The Constitution of India was drafted by the Constituent Assembly. The Constituent Assembly held its
first sitting on the 9th December, 1946. It reassembled on the 14th August, 1947, as the sovereign
Constituent Assembly for the Dominion of India. The proposed Constitution had been outlined by various
committees of the Assembly like: a) Union Constitution Committee b) The Union Powers Committee c)
Committee on Fundamental Rights. It was after a general discussion on the reports of these Committees
that the Assembly appointed a Drafting Committee on the 29th August, 1947. The Drafting Committee,
under the Chairmanship of Dr. Ambedkar, embodied the decision of the Assembly with alternative and
additional proposals in the form of a 'Draft Constitution of India which was published in February, 1948.
The Constituent Assembly next met in November, 1948, to consider the provisions of the Draft, clause by
clause. After several sessions the considerationof the clauses or second reading was completed by the
17th October, 1949. The Constituent Assembly again sat on the 14th November, 1949, for the third
reading and finished it on the 26th November, 1949, on which date the Constitution received the
signature of the President of the Assembly and was declared as passed. The provisions relating to
citizenship, elections, provisional Parliament, temporary and transitional provisions, were given immediate
effect, i.e., from November 26, 1949. The rest of the Constitution came into force on the 26th January,
1950, and this date is referred to in the Constitution as the Date of its Commencement.
Framing of the Constitution

The Constitution of India was draftedover a period of 2 years, 11 months and 17 days. The members of
Constituent Assembly of India met for the first time in the year 1946 on December 9. The next meeting
ofthe Assembly took place on August 14th, 1947 for the dominion of India in which the proposal of
forming various committees was presented. Such committees include Committee on Fundamental Rights,
the Union Powers Committee and Union Constitution Committee. One of the unique factors of this meeting
was that the Assembly gathered as the Sovereign Constituent Assembly of India. On 29th August, 1947 a
Drafting Committee, with Dr. Ambedkar asthe Chairman, was formed on thebasis of the various reports
submitted by the previous committees. It was in the year 1948 that a Draft Constitution including a range
of proposals was formed by the concerned committee. The Constituent Assembly of India held two
meetings in February 1948 and October 1949 to go through the clauses of the Draft. Finally, from 14th to
26th of November, 1949 the Constituent Assembly analyzed each and every provision of the Draft. The
then President of the Constituent Assembly of India signed the Draft on November 26th, 1949. Today,
there are 12 Schedules and 395 Articles in the Constitution of India. Amendments have been made to the
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Constitution time and again as per the need of the hour. Till 2006, there have been 94 Amendments made
to the constitution.
Features of the Constitution of India

The main features of Indian Constitution are the following:
(i) A written and lengthy constitution: The Constitution of India is a written constitution. It was framed
by a Constituent Assembly which was established for the purpose in 1946. It has 395 Articles and 12
Schedules. A number of amendments, (about 96) passed since its enforcementin 1950, have also become a
partof the Constitution. The Constitution of India is the lengthiest constitution in the world as no other
constitution contains as many articles. The constitution of USA has 7 Articles,of China 138, Japanese 103,
and Canadian 107 Articles.
(ii) Sovereign, socialist, secular, democratic, republic: The Constitution declares India tobe a Sovereign,
Socialist, Secular, Democratic, Republic. The words, 'Socialist' and 'secular' were added in the Preamble
of the Constitution by 42nd amendmentwhich was passed in 1976. Sovereign means absolutely independent;
it is not under the control of any other state. Before 1947, India was not sovereign asit was under the
Britishers. Now it can frame its policy without any outside interference. Socialist: Word 'Socialist' was
added in thePreamble by 42nd Amendment ofthe Constitution which was passed in 1976. This implies a
system which will endeavour to avoid concentration of wealth in a few hands and will assure its equitable
distribution. It also implies that India is against exploitation in all forms and believes in economic justice
to all its citizens. Secular: The word 'Secular', like Socialist, was also added in the Preamble by 42nd
Amendment of the Constitution. There is no state religion in India. Every citizen is free to follow and
practise the religion of his/her own choice. The state cannot discriminate among its citizens on the basis
ofreligion. Democratic : Means that the power of the government is vested in the hands of the people.
People exercise this power through their elected representatives who, in turn, are responsible to them. All
the citizens enjoy equal political rights. Republic: Means that the head of the State is not a hereditary
monarch but aPresident who is indirectly elected by the people for a definite period.
(iii) Federal government: The Constitution provides for a federal form of government. In a federation,
there are two governments-at the central level and at the state (province) level. In India, the powers of
the government are divided betweenthe central government and stategovernments. There are three
different lists of subjects-
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(i) Union list, (ii) State list and (iii) Concurrent list. The Union list contains 97 subjects of national
importance like Defence, Foreign Affairs, Currency, Post and Telegraph, Railways. On these subjects, only
central legislature (Parliament) can makelaws. State list contains 66 subjects of local importance. On
these subjects, state legislatures make laws. These subjects include agriculture, police, and jails.
Concurrent list contains 47 subjects which are of common concern to both the central and state
governments. These include marriage, divorce, social security etc. On these subjects, both the parliament
andstate legislatures can legislate. However, if there is a conflict between a central law and the state law
over a subject given in the concurrent list, the central law will prevail.
(iv) Parliamentary government: Indian Constitution provides for a parliamentary form of government.
President is nominalhead of the state. In actual practice, the government is run by the Prime Minister and
other members of the Council of Minister. The Council of Ministers is collectively responsible to the
Parliament.
(v) Fundamental rights and duties. The Constitution of India guarantees six fundamental rights to every
citizen. These are: i. Right to Equality. ii. Right to Freedom. iii. Right against Exploitation. iv. Right to
Freedom of Religion. v. Cultural and Educational Rights. Vi. Right to Constitutional Remedies. By 42nd
Amendment of the Constitution, ten Fundamental Duties of citizens have also been added.
(vi) Directive principles of state policy: The Directive Principles of State Policy are listed in Part Four of
the Constitution. The framers of our constitution took the idea of having such principles from the Irish
Constitution. These principles are instructions given by the Constitution to government. All the
governments-Central, Stateand Local-are expected to frame their policies in accordance with these
principles. The aim of theseprinciples is to establish a welfare state in India. They, however, are not
binding on the government-they are mere guidelines.
(vii) Partly rigid and partly flexible: The Constitution of India is neither wholly rigid nor wholly flexible. It
is partly rigid and partly flexible. It is because of thefact that for the purpose of amendment, our
constitution hasbeen divided into three parts:
(a) certain provisions of the constitution can be amended by a simple majority in the Parliament. (b)
Certain provisions can be amended by a two-third majorityof the Parliament and its ratification by at least
fifty percent states. (c) The remaining provisions can be amended by the Parliament bytwo-third majority.
(viii) Single citizenship: In federation, normally we have double citizenship. In U.S.A. every citizen besides
being a citizen of United States of America is the citizen of the state in which he orshe resides. But the
Constitution of India provides for singi' citizenship-every Indian, irrespective of his place of birth or
residence, is a citizen of India. There is no citizenship of Delhi, Punjab, Haryana or U.P.
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(ix) Universal adult franchise: The constitution provides for Universal Adult Franchise. It means that
every citizen who is 18 years of age or more is entitled to cast his/her vote irrespective of his caste,
creed, sex, religion or place of birth.
(x) Language policy: The Constitution has also definedthe language policy. India is a country where
different languages are spoken in various parts of the country. Hindi and English have been made official
languages of the central government. A state can adopt the language spoken by its people in that state
also as its official language. At present, we have 22 languages which have been recognised by the Indian
Constitution. These are: Languages Recognised by the Indian Constitution Assamese Gujarati Konkani
Marathi Sanskrit Telugu Bengali Hindi Maithili Nepali Santhali Urdu Bodo Kannada Malayalam Oriya Sindhi
Dogri Kashmiri Manipuri Punjabi Tamil
(xi) Special provisions for scheduled castes and scheduledtribes: The Constitution provides for giving
certain special concessions and privileges to themembers of these castes. Seats have been reserved for
them in Parliament, State legislature and local bodies, all government services and in all professional
colleges. At present these concessions will continue up to the year 2010.
(xii) Independent judiciary: The Indian Constitution provides for an independent judiciary. Thejudiciary
has been made independent of the Executive as well as the Legislature. The judges give impartial justice.
(xiii) A constitution derived frommany sources: The framers of our constitution borrowed many things
from the constitutions of various other countries and included them in our constitution. That is why; some
writers call Indian Constitution a 'bag of borrowings'.
(xiv) One national language: Although India is a multi-lingual state, the constitution provides that Hindi in
Devnagri script will be the national language. It shall be the duty of the union to promote and spread Hindi
language.
(xv) Emergency provisions: The framers of our constitution had realised that there could be certain
dangerous situations when government could not be run as in ordinary time. Hence our constitution
contains certain emergency provisions. During emergency the fundamental rights of the citizens can be
suspended and our government becomes a unitary one.
Fundamental rights:
Fundamental rights are those rights which are essential for the well being of a person. Part III of the
Indian Constitution contains the list of Fundamental Rights; that guarantees civil liberties to allthe
citizens of India to live in peace and harmony without the fear of being suppressed by others. The Indian
Judiciary has the discretion to punish those violating these fundamental rightsunder the provisions of the
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Indian Penal Code. No person can be deprived these rights pertaining to basic liberty in the form of human
freedoms. It is thejudiciary that safeguards these rights of the citizens. In some exceptional cases, i.e.
during emergencies the State can imposerestrictions on the enjoyment of these fundamental rights.
The Constitution provides for the enjoyment of 6 Fundamental rights. They are:
1. Right to Equality (under Article 14 Article 18 )
2. Right to Freedom (under Article 19 Article 22 )
3. Right against exploitation ( under Article 23 Article 24 )
4. Right to Freedom of Religion (under Article 25 Article 28 )
5. Cultural and Educational rights (under Article 29 Article 30 )
6. Right to Constitutional remedies
Fundamental duties:
Fundamental Duties are the ones that are recognized as moral obligations the citizens are expected to
perform. Article 51A under Part IV A of the Constitutionof India speaks of the Fundamental duties. One
cannot enforce these fundamental duties legally. It was through the 42 nd Amendment that these duties
were introduced in the Constitution.
There are 10 Fundamental duties that the citizens are expected to discharge. They are:
1. The citizens of India are expected to be abide by the Constitution and respect all its ideals. Likewise,
the citizens are expected to respect the NationalFlag and the National Anthem.
2. The noble ideals that inspired our freedom struggle have to becherished and followed.
3. The sovereignty, unity and integrity of India needs to be upheld and protected.
4. Citizens should be ready to defend and render national service towards India.
5. The spirits of common brotherhood and harmony haveto be promoted by all the citizens wherein they
need to transcend all forms of diversitiespertaining to religion, language and region. All the practices
thatare derogatory to the dignity of women have to be renounced.
6. India has a rich, varied and composite culture and one needs to preserve it.
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7. Natural environment including the forests, lakes, rivers and wildlife are expected to be preserved by
the citizens.
8. People of India are expected to develop within themselves humanism, scientific temperament, and
spirits of inquiry and reform.
9. Public property is expected to be safeguarded and violence needs to be avoided. 10. People are expected
to strive for the excellence of all the individuals and collective activities to help in the development of the
country.
Directive Principles of States
The Directive Principles of State Policy constitute another important feature of the Indian Constitution.
It is an idealistic andphilosophical chapter in the Indian Constitution, which contains various aims and
aspirations to be fulfilled by the State in distant future. They provide the much-desired philosophy of the
Constitution and give "an Instrument of Instructions" to the Government to follow the specific policies.
Underlying idea behind the Directive Principles is that whichever party may possess therein of
administration should implement these constitutional ideals. While incorporating the chapter on Directive
Principles, the framers of the Constitution were inspired by the Spanish and Irish constitutional practices.
While in the Spanish and Irish Constitutions there are brief references to a few of the Directive
Principles, the Indian Constitution contains an elaborate and exhaustive list of Directive Principles. A close
scrutiny of the Directive Principles in our Constitution reveals that they contain Social, Gandhian, and
Liberal ideas. The particular aim of these Directive Principles is to make India a Welfare State by
introducing measures of socialism in economic sphere, to provide social security and better standards of
sanitation and care for all, to emphasize duty towards women and children and the obligations towards the
backward and tribal classes. These principles are, however, not enforceable in any Court nor the
Constitution imposes any duty to apply these principles in making laws. While Fundamental Rights are
negative in character, the Directive Principles set forth apositive programmed for the State to be
implemented at its own convenience. Although they are not enforceable in the Courts, the Constitution
solemnly proclaims them to be "fundamental in the governance of the country and it shall be the duty of
the State to apply these principles in making laws". These principles are to serve "as a sign post and guide
the State in its entire works."
History of Indian National Movement
The East India Company had established its control over almostall parts of India by the middle of the
19th century. There were numerous risings in the first hundred years of British rule in India. They were,
however, local and isolated in character. Some of them were led by the nobility whowere refusing to
accept the changing patterns of the time andwanted the past to be restored. But the risings developed a
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tradition of resistance offoreign rule, culminating in the 1857 revolt. The Revolt of 1857, which was called
a Sepoy Mutiny by British historians and their imitators in India but described as "the First War of
Indian Independence" by many Indian historians, shook theBritish authority in India from its very
foundations. The Revolt of 1857, an unsuccessful but heroic effort to eliminate foreign rule, had begun.
The capture of Delhi and the proclamation of Bahadurshah as the Emperor of Hindustan are a positive
meaning to the Revolt and provided a rallying point for the rebels by recalling the past glory of the
imperial city. On May 10, 1857, soldiers at Meerut refused to touch the new Enfield rifle cartridges. The
soldiers along with other group of civilians, went on a rampage shouting 'Maro Firangi Ko'. They broke open
jails, murdered European men and women, burnt their houses and marched to Delhi. The appearance of the
marching soldiers next morning in Delhi was a'signal to the local soldiers, who in turn revolted, seized the
city and proclaimed the80-year old Bahadurshah Zafar, asEmperor of India. Within a month of the
capture of Delhi, the Revolt spread to the different parts of the country. Kanpur, Lucknow, Benaras,
Allahabad, Bareilly, Jagdishpur andJhansi. In the absence of any leader from their own ranks, the
insurgents turned to the traditional leaders of Indian society. At Kanpur, NanaSaheb, theadopted son of
last Peshwa, Baji Rao II, led the forces. Rani Lakshmi Bai in Jhansi, Begum Hazrat Mahal in Lucknow
and.Khan Bahadur in Bareilly were in command. However, apart from a commonly shared hatred for alien
rule, the rebels had no political perspective or a definite vision of the future. They were all prisonersof
their own past, fighting primarily to regain their lost privileges. Unsurprisingly, they proved incapable of
ushering in a new political order.
G overnment of India Act 1858
Queen Victoria issued a proclamation on November 1, 1858, placing India under direct government of the
Crown, whereby: (a) A viceroy was appointed in India (b) Princes were given the right toadopt a son
(abolition of Doctrine of Lapse) (c) Treaties were honoured (d) Religious freedom was restored and
equality treatment promised to Indians The Proclamation was called the 'Magna Carta of Indian Liberty'.
The British rule in India was strongest between 1858 and 1905. The British also started treating India as
its most preciouspossession and their rule over India seemed set to continue for centuries to come.
Because of various subjective and objective factors which came into existenceduring this era, the feeling
of nationalism in Indians started andgrow.
I ndian National Congress (1885) Although the British succeeded in suppressing the 1857 Revolt,
theycould not stop the growth of political awareness in India. The Indian National Congress was founded in
December 1885. It was the visible embodiment of the national awakening in the country. Its founder was
an Englishman, Allan Octavian Hume, a retired member of the Indian Civil Service. The Indian leaders, who
cooperated with Hume in launching the Congress, were patriots of high character. The first President of
the Congress was W.C. Bannerjee. The aims of the Congress were: promotion of friendship and cooperation
amongst the nationalist political workers from the different parts of the country; the eradication of
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racial, creed or provincial prejudices and promotion of national unity; formulation of popular demands and
their presentation before the Government; and, most important of all, the training and organisation of
public opinion in the country.
P artition of Bengal (1905) On December 30, 1898, Lord Curzon took over as the new Viceroy of India. The
partition of Bengal came into effect on October 16, 1905, through a RoyalProclamation, reducing the old
province of Bengal in size by creating a new province of East Bengal, which later on became East Pakistan
and present day Bangladesh. The government explained that it was done to stimulate growth of
underdeveloped eastern region ofthe Bengal. But, actually, the main objective was to 'Divide and Rule' the
most advanced region of the country at that time.
M uslim League (1906) In 1906, All India Muslim League was set up under the leadership of Aga Khan,
Nawab Salimullab ofDacca and Nawab Mohsin-ul-Mulk. The League supported the partition of Bengal,
opposed the Swadeshi Movement, and demanded special safegurds for its community and a separate electorates of Muslims. This led tocommunal differences between Hindus and Muslims.
S wadeshi Movement (1905) The Swadeshi movement has its genesis in the anti-partition movement which
was started to oppose the British decision to divide Bengal. With the start of theSwadeshi movement at
the turn of the century, the Indian NationalMovement took a major leap forward. The Indian National
Congress tookup the Swadeshi call in Benaras Session, 1905, presided over by G.K. Gokhale, supported the
Swadeshi and Boycott Movement of Bengal, Militant Nationalism spearheaded by Bal Gangadhar Tilak,
Bipin Chandra Pal, Lala LajpatRai, and Aurobindo Ghosh was, however, in favour of extending the movement
of the rest of India and carrying it beyond the programme of just Swadeshi and boycott of goods to fullfledged political mass struggle.
Mo rley-Minto Reforms (1909) Morley-Minto Reforms were introduced in 1909 during the period when
Lord Minto was the GovernorGeneral of India. The reforms envisaged a separate electorate for Muslims
besides other constitutional measures. The government thereby sought to create a rift within the
Congress on the one hand by winning the support of the moderates, and on the other, to win favour
ofMuslims against Bindus. To achieve the latter objective, the reforms introduced the system of separate
electorates under which Muslims could only vote for Muslim candidates. This was doneto encourage the
notion that the political, economic and cultural interests of Hindus and Muslims were separate and not
common. Indian political leaders were however dissatisfied by these reforms.
L ucknow Pact (1916) An important step forward in achieving Hindu-Muslim unity wasthe Lucknow Pact
1916. AntiBritish feelings were generated among the Muslims following a war between Britain and Turkey
which opened way forCongress and Muslim League unity. Both the Congress and the Muslim League held
sessions at Lucknow in 1916 and concluded the famous Lucknow Pact. The Congress accepted the separate
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electorates, and both organizations jointly demanded dominion status for the country. Hindu-Muslim unity
weakened the British attitude and forced thegovernment to announce its future policy. In 1916 a British
policy was announced whereby association of Indians was increased and there was to be a gradual
development of local self-governing institutions.
H ome Rule Movement (19151916) Dr. Annie Besant, inspired by the Irish rebellion, started a Home Rule
Movement in India in September 1916. The movement spread rapidly and branches of the Rome Rule
League were established all over India. Bal Gangadhar Tilak wholeheartedly supported this movement.
Rejoined forces with Dr. Besant and persuaded the Muslim Leagueto support this programme.
T he Gandhian Era (1918-1947) Mahatma Gandhi dominated the Indian political scene from 19181947. This
period of the Indian National Congress is also referred to as the Gandhian Era. It was the most intense
and eventfulphase of India's freedom struggle.Mahatma Gandhi provided the leadership of the highest
order and his philosophy of non-violent Satyagraha became the most potent weapon to drive out .the
British from the Indian soil.
K hilafat Movement (1920) The Caliph, Sultan of Turkey, was looked upon by the Muslims as their religious
head. During the First World War, when the safety and the welfare of Turkey were threatened by the
British thereby weakening the Caliph's position, Indian Muslims adopted an aggressive anti-British
attitude. The two brothers, Mohammed Ah and Shaukat Ali launched an antiBritish movement in 1920-the
Khilafat Movement for the restoration.
Th e Rowlatt Act (1919) While trying to appease Indians, the British Government was following a policy of
repression. Throughout the First World War, repression of freedom fighters had continued. The
revolutionaries had been hunted down, hanged or imprisoned. The Government now decided to arm itself
with more powers in order to suppress the freedom fighters. In March 1919, it passed the Rowlatt Act.
This Act authorised the government to detain any person without trial. The Rowlatt Act came like a
sudden blow. The Indians had been promised extension of democracy during the war. They felt humiliated
and were filled with anger when they found that their civil liberties were going to be curtailed still
further. Unrest gripped the country and a powerful agitation against the Actstarted. During this
agitation, Gandhiji took command of the nationalist movement. March and April 1919 witnessed a
remarkable political awakening in the country. There were hartals, strikes and demonstrations at various
places. The slogans of Hindu-Muslim unity filled the air.
J allianwalla Bagh Massacre (1919) The Government was bent on suppressing the mass agitation. In
Bombay; Ahmedabad, Calcutta, Delhi and at other places demonstrators were lathi-chargedand fired upon.
Gandhiji gave a call for a general hartal on April 6, 1919. The call was responded to with great enthusiasm.
The Government decided to resort to repression to suppress the agitation. At this time the British
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Government committed one of theworst political crimes in modem history. An unarmed but a large crowd
had gathered in Jallianwalla Bagh, Amritsar (Punjab) on April, 13, 1919 for a meeting. General Dyer
ordered histroops to open fire on them without warning. This massacre of unarmed people (hundreds died
and thousands were wounded) in an enclosed place from which there was no exit, was followed by a reign of
terror in several districts under martial law.
N on-Cooperation Movement (1920) With the Congress support of the Khilafat movement, Hindu-Muslim
unity was achieved which encouraged Gandhiji to launch hisnon-violent, non-cooperation movement. At the
Calcutta Session in September 1920, the Congress resolved in favour of the non-violent, non-cooperation
movement and defined Swaraj as its ultimate aim. The movement envisaged: (i) Surrender of titles and
honorary officers; (ii) Resignation from nominated offices and posts in the local bodies; (iii) Refusal to
attend government darbars and official functions and boycott of British courts by the lawyers; (iv)
Refusal of general public to offer themselves for military and other government jobs, and boycott of
foreign goods, etc. The non-cooperation movement also saw picketing of shops selling foreign cloth and
boycott of the foreign cloth by the followers of Gandhiji.
C hauri Chaura Incident (1922) The Congress session held at Ahmedabad in December 1921 decided to
launch a Civil Disobedience Movement while reiterating its stand on the non-violent, noncooperation
movement of which Gandhiji was appointed the leader. Before Gandhiji could launch the Civil Disobedience
Movement, a mob ofcountrymen at Chauri Chaura, a place near Gorakhpur in D.P., clashed with the police
which opened fire. In retaliation the mobburnt the police-station and killed 22 policemen. This compelled
Gandhiji to call off the Civil Disobedience Movement on February 12, 1922. Despite this Gandhiji was
arrested and sentenced to six years imprisonment. The Chauri Chaura incident convinced Gandhiji that the
nation was not yet ready for the mass-dis6bedience and he prevailed upon Congress Working Committee in
Bardoli on February 12, 1922 to call off the Non-Cooperation Movement.
Sw araj Party (1922) Gandhiji's decision to call off the agitation caused frustration among masses. His
decision came in for severe criticism from his colleagues like Motilal Nehru, C.R. Das and N.C. Kelkar, who
organized the Swaraj Party. The foundations of the 'Swaraj Party' were laid on January 1, 1923, as the
'CongressKhilafat-Swarajya Patty'. It proposed then an alternative programme of diverting the movement
from widespread civil disobedience programme to restrictive one which would encourage its member to
enter into legislative councils (established under Montford Reforms of 1919) by contesting elections in
order to wreck the legislature from within and to use moral pressure to compel the authority to concede
to the popular demand for self-government.
Si mon Commission (1927) Under the 1919 Act, a statutory commission was to be appointed by the British
Government at the end of ten years from the passing of the Act to inquire into the working of the system
of government in the country and to recommend further reforms. Thusthe commission was scheduled tobe
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appointed in 1929. It was actually appointed two years earlier in 1927. The commission consisted of seven
members of the British Parliament. It was headed by Sir John Simon. As all its members were British, the
Congress decided to boycott it. The Commission arrived in India in Feb. 1928. It was greeted with black
flags and hostile demonstrations everywhere it went. In one such demonstration at Lahore, Lala Lajpat Rai
was seriously injured in a wanton police lathi-charge on the demonstrators. Lalaji died soon after from
wounds received during the demonstration.
D andi March (1930) Also called the 'Salt Satyagraha'. Toachieve the goal of complete independence,
Gandhiji launched another civil disobedience movement. Along with 79 followers, Gandhiji started his
famous march from Sabarmati Ashram on March 20,1930, for thesmall village Dandi to break the Salt Law.
While Gandhiji was marching to Dandi, Congress leaders and workers had been busy at various levels with
the hard organizational tasksof enrolling volunteers and members, forming grassroot Congress
Committees, collecting funds, and touring villages and towns to spread nationalist messages. On reaching
the seashore on April 6, 1930, he broke the Salt Law by picking up salt from the seashore. By picking a
handful of salt, Gandhiji inaugurated the Civil Disobedience Movement, a movement that was to remain
unsurpassed in the history of the Indian National Movement for the countrywide mass participation it
unleashed. The movement became so powerful that it sparked off partriotism even among the Indian
soldiers in the Army. The Garhwal soldiers refused to fire on the people at Peshawar.
Ga ndhi-Irwin Pact (1931) Early in 1931 two moderate statesmen, Sapru and Jayakar, initiated efforts to
bring about rapprochement between Gandhiji and the government. Six meetingswith Viceroy Lord Irwin
finally led to the signing of a pact between the two on March 5, 1931, whereby the Congress called off the
movement and agreed to join the Second Round Table Conference. The terms of the agreement included
the immediate release of all political prisoners not convicted for violence, the remission of all fines not yet
collected, the return of confiscated land not yet sold to third parties, and lenient treatment of all the
government officials who had resigned. Gandhiji and other leaders were released from jail as Irwin agreed
to release most political prisoners and to return the properties that had been seized by the governments.
The government also conceded the right to make the salt for consumption of villages along the coast, and
also the right to peaceful and non-aggressive picketing. The Congress on its part, agreed to discontinue
the Civil Disobedience Movement and to participate in the next Round Table Conference.
The Government of India Act, 1935 The Simon Commission report submitted in 1930 formed the basis for
the Government of India Act 1935. The new Government ofIndia Act received the royal assenton August
4, 1935. The Act continued and extended all the existing features of the Indian constitution. Popular
representation, which went back to 1892, dyarchy and ministerial responsibility, which dated from 1921,
provincial autonomy, whose chequered history went back to eighteenth century presidencies, communal
representation, which first received recognition in 1909, and the safeguards devised in 1919, were all
continued and in most cases extended. But in addition there were certain new principles introduced. It
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provided for a federal type of government. Thus, the act: (a) Introduced provincial autonomy (b)
Abolished dyarchy in provincesI (c) Made ministers responsible to the legislative and federation at the
centre The Act of 1935 was condemned by nearly all sections of Indian public opinion and was unanimously
rejected by the Congress. The Congress demanded instead, the conveningof a Constituent Assembly
elected on the basis of adult franchise to frame a constitution for an independent India.
Q uit India Movement (1942) On August 8, 1942, the Congress in its meeting at Bombay passed aresolution
known as 'Quit India' resolution, whereby Gandhiji asked the British to quit India andgave a call for 'Do or
die' to his countrymen. On August 9, 1942, Gandhiji was arrested but the other leaders continued the
revolutionary struggle. Violence spread throughout the country, several government officers were
destroyed and damaged, telegraph wires were cut and communication paralyzed. The movement was,
however, crushedby the government.
Ca binet Mission Plan (1946) The struggle for freedom entered a decisive phase in the year 1945-46. The
British Prime Minister, Lord Attlee, made a declaration on March 15, 1946, that British Cabinet Mission
wouldvisit India to make recommendations regarding constitutional reforms to be introduced in India. The
Cabinet Mission which constituted of LordLawrence, Sir Stafford Cripps and A.V. Alexander visited India
and met the representatives of different political parties but a satisfactory solution to the constitutional
difficulties could not be found. The Mission envisaged the establishment of a Constituent Assembly to
frame theConstitution as well as an interim government. The Muslim League accepted the plan on June 6,
1946, while maintaining its rights of striving for a separate Muslim state. The Congress also partially
accepted the plan.
In terim Government (1946) On September 2, 1946, an interimgovernment was formed. Congress members
led by Pandit Jawaharlal Nehru joined it but the Muslim League did not as it withdrew its earlier
acceptance ofthe Cabinet Mission Plan.
F ormation of Constituent Assembly (1946) The Constituent Assembly met on December 9, 1946, and Dr.
Rajendra Prasad was elected its President. The Muslim League did not join the Assembly.
Mou ntbatten Plan (1947) In March 1947, Lord Mountbatten replaced Lord Wavell. He announced his plan
on June 3, 1947. It offered a key to the political and constitutional deadlock created by the refusal of
the Muslim League to join the Constituent Assembly formed to frame the Constitution of India.
Mountbatten's formula was to divide India but retain maximum unity. The country would be partitioned
but so would be Punjab and Bengal, so that the limited Pakistan that emerged would meet both the
Congress and the League's position to some extent. The League's position on Pakistan was conceded in that
it would be created, but the Congress positionon unity would be taken into account to make Pakistan as
smallas possible. He laid down detailed principles for the partition of the country and speedy transfer of
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political powers in the form of dominion status to the newly formed dominions of India and Pakistan. Its
acceptance by the Congress and the Muslim' League resulted in the birth of Pakistan.
The I ndian Independence Act, 1947 The Bill containing the provisions of the Mountbatten Plan of June
3,1947, was introduced in the British Parliament and passed as the Indian Independence Act, 1947. The
Act laid down detailed measures for the partition of India and speedy transfer of political powers to the
new government of India and Pakistan.
Pa rtition of India (1947) In accordance with the Indian Independence Act, 1947, India was partitioned on
August 15, 1947 into India and Pakistan. The Act made India and Pakistan independent dominions.
Bloodshed and violence marked the exodus of refugees. The state of Kashmir acceded to the Indian Union,
after the raiders were helped by Pakistan, in October 1947. Lord Mountbatten was appointed the
Governor-General of free1ndia and M.A. Jinnah the first Governor-General of Pakistan.
Socio Economic Growth after Independence
Before independence our country was at the mercy of her foreign rulers. They did whateverthey liked for
the good of their own country. After independencemuch has been done to improve the condition of the
masses. Some of the important achievements of free India made during the last fifty years are as follows.
In the economic field, unprecedented progress has been made. Our five year plans have been successfully
completed. Many Multipurpose projects have been taken in hand. Bhakra Nagal, Hirakud and Damodur
valley projects have been completed. Many new factories have been started. Sindri Fertilizers Factory,
Haldia Fertilizer Complex, Barauni and Guna Fertilizer Factory etc., are producing chemical fertilizers.
Important Steel plants are fulfilling our requirements of steel. The per capita income has been raised. Our
exports have been increasing in different spheres. The difficult food problem has been solved. To-day
there is enough food for all. Power generation has also beenincreased several folds. A net-work of
ordinance factories has been established and most sophisticated weapons for the defense of the country
are being produced. In 1989, India successfully fired Agni , a long range missile. Since then Akash
surface to air long range missile, Trishul, Nag and recently Prithivi surface to surface short range
missile have been launched. This shows further advance in the growth of the countrys science and
technology.Rapid advances have been made in the field of electronics and comprehensive program of
computerization is also under way. Thus gradually, but steadily, we are achieving self-sufficiency and
stability in the economic field. Free India has also made rapid advance in the field of science and
technology. Atomic energy has been successfully used for power generation. India successfully conducted
under ground atomic tests for peaceful purposes. Now India is nuclear power nation. The launching of
Aryabhatta , Rohini, Apple INSAT-1 and INSAT-1(D) satellites marks the entry of India in to
thespace age. Since then many moremulti-purpose satellites have been sent in to outer space. IndiaSpace
Organization had completed four launchers of the Satellite Launch Vehicle-3(SLV-3) for of Augmented
Satellite Launch Vehicles (ASLV) and two developmental PSLV. With this India became the fifth nation in
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the world capable of launching 1000 kg satellite in its intended orbit. Now it is ready to enter theGSLV
programme through which India will not only have vastly improved telecommunication capability, but also
satellite monitoring capabilities which will be of great value of our security. Revolutionary changes have
also been brought about in the political field. Our country is now sovereign Democratic Republic. All
citizens have equal rights in the eyes of law, irrespective of their caste, creed, sex and religion. To bring
democracy to the villages, Panchayats have been established and Panchayati Raj has become a reality. The
launching of the Jawahar Rozgar Yojna is another revolutionary step to improve the conditions ofrural
poor. There is a general awakening among the people. They have begun to understand their rights and
duties. We may find men in the street discussing various political problems with great interest. Thus, we
are enjoying the fruits of freedom. We may hold our heads high dueto the success of foreign policy, which
has raised the prestige of the country.
Achievements in the social sphere are also clearly visible. The Zamindari system has been abolished. The
tiller of the land is now its owner. Untouchability is a legal offence today. To drive out the demon of drink
from society, prohibition has been introduced. Socialistic pattern of society is the aim towards which our
country is making rapid progress. To reduce the inequalities in the industrial field many industries have
been nationalized. To bring about uniformity in weights and measures, the metric system has been
introduced. Prostitution, in any form has been made legal offense. These achievements are of great social
significance. Social security schemes have been introduced in some big industrial towns. The government is
busy in clearing slums and constructing new houses for the industrial workers and the weaker sections of
society. Lakhs of refugees came to India first from Pakistan, then from Bangladesh, and more recently
from Ceylon. But India has successfully solved the refugee problem. This is a mighty achievement. So it
becomes clear that no aspect of life has been left untouched. India has successfully followed the policy of
noon alignment. As a result of Indias efforts, the non-alignment movement has become a force in the
world affairs. Indias voice now carries weight in international forums. Important laurel won by India
recently is the obtaining of the sole right for the exploration of a very large area of the Indian Ocean for
its mineral wealth. Similarly, India has established its base in the Antarctica for exploration and research
in the difficult region. But this long list of free Indias achievements should not make us proud. We should
not feel satisfied by looking at our achievements. We should keep in mind the problems which are yet to
be solved. The masses of country are still poor and backward. Many social evils still prevail. Corruption is
widespread. Terrorism is raising its ugly head in several arts of the country. The balance of payment
position is difficult and threat sanctions are looming large. To face various economic problems a
comprehensive programme of economic reformshas been undertaken. Economic polices have been
liberalized, a number of controls have been removed, and multinationals have now been allowed to operate
freely in the country. Private enterprise has also been encouraged, and Indian capitalists have been invited
on alarge scale to set up industries in various field. Above all the appeal of democracy has depended over
the years. This style of governance has neatly fitted the lifestyle of a majority of Indians. Democracy
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now cuts across the parties, educational levels, classes, castes, religions, and gender and ethnics divisions.
Indeed India democracy today despite all its institutional problems is stronger in the minds of people then
it ever was.The social and territorial spread of legitimacy has survived even the sharp decline in the
peoples trust in politicians in recent years. However with faith in our leadersand our capacity for works,
we are sure to overcome our present difficulties. The present difficulties should not discourageus. Free
India is destined to become a powerful nation of the world.
Unit II:
Society Social Group
A social group is a number of individuals interacting with each other with respect to: 1. Common motives
and goals; 2. An accepted division of labor, i.e. roles, 3. Established status (social rank, dominance)
relationships; 4. Accepted norms and values with reference to matters relevant to the group; 5.
Development of accepted sanctions (praise and punishment) if and when norms short and simple: A group
of people who interact with each other and are aware of having something in common.
Types of groups
Primary groups
According to Charles Horton Cooley (18641929), a primary group is a small social group whose members
share personal and lasting relationships. People joined in primary relationships spend a great deal of time
together, engage in a wide range of activities, and feel that they know one another well. In short, they
show real concern for one another. In every society, the family is the most important primary group.
Groups based on lasting friendships are also primary groups. [ 14 ]
Secondary groups , in contrast to primary groups, are large groups involving formal and institutional
relationships. Secondary relationships involve weak emotional ties and little personal knowledge of one
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another. Most secondary groups are short term, beginning and ending without particular significance. [ 14 ]
They may last for years or may disband after a short time. The formation of primary groups happens
within secondary groups.
Individuals almost universally have a bond toward what sociologists call reference groups . A reference
group is a social group that serves as a point of reference in making evaluations and decisions. [ 15 ] Some
examples of types of groups include the following:
Peer group
A peer group is a group with members of approximately the same age, social status, and interests.
Generally, people are relatively equal in terms of power when they interact with peers. Clique A group of
people that have manyof the same interests & commonlyfound in a High School/College setting; most of
the time they have a name & rules for themselves.
Club
A club is a group, which usually requires one to apply to become amember. Such clubs may be dedicated to
particular activities: sporting clubs, for example. Household All individuals who live in the same home .
anglophone culture may include various models of household, including the family , blended families , share
housing , and group homes .
Community
A community is a group of peoplewith a commonality or sometimesa complex net of overlapping
commonalities, oftenbut not alwaysin proximity with one another with some degree of continuity over
time. Franchise An organization which runs several instances of a business in many locations.
Gang
A gang is usually an urban group that gathers in a particular area. Itis a group of people that often hang
around each other. They canbe like some clubs, but much less formal. [ 16 ] They are usually known in many
countries to cause social unrest and also have negative influence on the members and may be a target for
the law enforcers in case of any social vices
Mob
A mob is usually a group of people that has taken the law intotheir own hands. Mobs are usuallygroups
which gather temporarily for a particular reason. Posse A posse was originally found in English common law.
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It is generally obsolete, and survives only in America, where it is the law enforcement equivalent of
summoning the militia for militarypurposes. However, it can also refer to a street group. Squad This is
usually a small group, of around 3 to 15 people, who workas a team to accomplish their goals.
Dyad
This is a social group with two members. Social interaction in a dyad is typically more intense than in larger
groups because neither member shares the other's attention with anyone else. [ 17 ]
Triad
This is a social group with three members, which contains three relationships, each uniting two of the
three people. A triad is more stable than a dyad because one member can act as a mediator should the
relationship between the other two become strained. [ 18 ]
Team similar to a squad, though a team may contain many more members. A team works in a similar way to
a squad. In-group It is a social group toward which a member feels respect and loyalty. [ 17 ] It is a group
that an individual identifies in positive direction. If aperson is part of the in-group then they are
collectively part of an inner circle of friends. An innercircle may contain sub-groups within the inner circle
including the apex (best friends), core (very close friends), outer rim, etc. This group provides a support
structure and being exclusive offers protection from anyone in an Out-group (see below.) Out-group It is
a social group toward which a person feels a sense of competition or opposition. [ 17 ] It is a group that an
individual identifies in negative direction.
Socialization
Socialization is refer to the lifelong process of inheriting and disseminating norms , customs and ideologies
, providing an individual with the skills and habits necessary for participating within his or her own society.
Socialization is thus the means bywhich social and cultural continuity are attained. Theory Socialization is
the process by which human infants begin to acquire the skills necessary to perform as a functioning
memberof their society, and is the most influential learning process one can experience. [ 9 ] Unlike other
living species, whose behavior is biologically set, humans need social experiences to learn their culture and
to survive. [ 10 ] Although cultural variability manifests in the actions, customs, and behaviors of whole
social groups (societies), the most fundamental expression of culture is found at the individual level. This
expression can only occur after an individual has beensocialized by his or her parents, family, extended
family, and extended social networks. This reflexive process of both learning and teaching is how cultural
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and social characteristics attain continuity. Many scientists say socialization essentially represents the
whole process of learning throughout the life course and is a central influence on the behaviour, beliefs,
and actions of adults as well as of children.
Social Control
Social control means , control of individual behavior by society, and that control of social institutions
should be in the interest and welfare of the whole society. Some warnings and directions of prohibited
activities,are an example of social control 1- social control is an influence ,which may be exerted through
various means of control like public opinion, force, public appeal, social ,religious organizations. 2- This
influence should be implemented by society- there are so many groups who exercise this influence, like
family,trade union church ,state, school,neighborhood, clubs, religious groups etc. 3- The influence should
be exercised for promoting the welfare and interest of the entiregroup. Every society must have
harmonyand unity. without it no society actually could remain in existence. To maintain the society
effectively ,it needs some rules and regulation. in other words behavior patters for members are
essential. To obey and follow these rules and regulation society needs its implementation. There are
various ways to implement such things. In other words we can say some special type of behavioris
expected from members of society. Such expected or controlled behavior is called social control.
Types of basic forms of social control:

Internal Social Control
The process of internalizing the norms of society and accepting them as valid. It operates through the
process of socialization, that is learningand adopting the norms of the society or a particular group
orcollectivity within the society.
Agents of Socialization
Earliest Agent - The Family. Its primary function is to help children internalize the norms of the society
in which they live. Failure to socialize, leads to behaviors that society regards as deviant.
Later Agents - Schools, Peers and the Mass Media.
External Social Control
Society's effort to bring those who "stepped outside the lines" back into line. It is made up of the system
of rewards and punishments, sanctions , that persons, parties, and agents use to induce others to conform
to a norm. Thus, a Positive Sanction is a reward and a Negative Sanction is a punishment.
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Informal Social Control

Interpersonal actions betweenand among people to remind someone that their behavior upsets or pleases
them. i.e. frowning, smiling, criticizing, praising, shunning or being warm. *. Informal agents of social
control act on their own, in an unofficial capacity.
Formal Social Control
An effort to bring about conformity to the law by agents of the Criminal Justice System (CJS) i.e. police,
courts and correctional institutions.
Formal Agents of Social Control Agents who have legitimate power to make people conform to the law.
Formal agents occupy a specific status in bureaucratic organization. It is this position which give them the
legitimacy to sanction wrongdoers for violating the formal code.
"Semiformal" Social Control
a huge territory of noncriminal,nonpenal bureaucratic social control, administered by the government,
which attempts to deal with the troublesome behavior of persons under their authority. *. If a persons
behavior becomes extremely troublesome, an array of agencies, bureaucracies, and organizations may step
in to handle or control that person, to punish or bring him or her into line with the rules. These employees
of these agencies are known as Professional Controllers. i.e. social workers, psychiatrists, truant officers,
and representatives, functionaries and officers of mental hospitals, civil courts, social welfare offices,
unemployment offices, departments of motor vehicles, and public schools. Professional Controllers *. Do
not possess the power of arrest or incarceration, but canmake recommendations to agents in the CJS that
may have bering on arrest and incarceration.
Social Problems In Contemporary India
Contemporary India faced the following social problems:
Overpopulation
India suffers from the problem of overpopulation . The population of India is very high at an estimated 1.2
billion. [ 1 ] [ 2 ] [ 3 ] Though India ranks second in population, it ranks 33 in terms of population density
below countries such as The Netherlands , South Korea and Japan . Indira Gandhi , Prime Minister of India
, had implemented a forced sterilization programme in the early 1970s but the programme failed.
Officially, men with two children or more had to submit tosterilization, but many unmarried young men,
political opponents and ignorant, poor men were alsobelieved to have been sterilized. This program is still
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remembered and criticized in India, and is blamed for creating a public aversion to family planning , which
hampered Government programmes for decades.
Poverty
One-third of India's population (roughly equivalent to the entire population of the United States) lives
below the poverty line and India is home to one-third of the world's poor people. Though the high class
has gained from recent positive economic developments , India suffers from substantial poverty .
According to the new World Bank's estimates on poverty based on 2005 data, India has 456 million people,
41.6% of its population, living below the new international poverty line of $1.25 (PPP) per day. The world
Bank further estimates that 33% of the global poor now reside in India. Moreover, India also has 828
million people, or 75.6% of the population living below $2 a day, compared to 72.2% for Sub-Saharan
Africa. [ 5 ] [ 6 ] [ 7 ] [ 8 ] Wealth distribution in India is fairly uneven, with the top 10% ofincome groups
earning 33% of the income. [ 9 ] Despite significant economic progress, 1/4 of the nation's population
earns less than the government-specified poverty threshold of$0.40/day. Official figures estimate that
27.5% [ 10 ] of Indians lived below the national poverty line in 20042005. [ 11 ] A2007 report by the
state-run National Commission for Enterprises in the Unorganized Sector (NCEUS) found that 25% of
Indians, or 236 million people, lived on less than 20 rupees per day [ 12 ] with most working in"informal
labor sector with no jobor social security, living in abject poverty."
Sanitation
Lack of proper sanitation is a major concern for India. Statistics conducted by UNICEF have shown that
only 31% of Indias population is using improved sanitation facilities as of 2008. [ 14 ] It is estimated that
one in every ten deaths in India is linked to poor sanitation and hygiene. Diarrhoea is the single largest
killer and accounts for one in every twenty deaths. [ 14 ] Around450,000 deaths were linked to diarrhoea
alone in 2006, of which88% were deaths of children below five. [ 14 ] Studies by UNICEFhave also shown
that diseases resulting from poor sanitation affects children in their cognitive development.
Corruption
Corruption is widespread in India . India is ranked 95 out of a 179 countries in Transparency International
's Corruption Perceptions Index , although its score has improved consistently from 2.7 in 2002 to 3.1 in
2011. [ 25 ] Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy. [ 26 ]
In India, corruption takes the form of bribes , evasion of tax and exchange controls , embezzlement , etc.
A 2005 study done by Transparency International (TI) India found that more than 50% had firsthand
experience of paying bribe or peddling influence to get a job done in a public office. [ 24 ] The chief
economic consequences of corruption are the loss to the exchequer , an unhealthy climate for investment
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and an increase in the cost of government-subsidised services. The TI India study estimates the monetary
value of petty corruption in 11 basic services provided by the government, like education, healthcare,
judiciary, police, etc., to be around Rs.21,068 crores . [ 24 ] India still ranks in the bottom quartile of
developing nations in terms of the ease of doing business, and compared to China and other lower
developed Asian nations, the average time taken tosecure the clearances for a startup or to invoke
bankruptcy is much greater.
Education
Education in India and Literacy in India Since the Indian Constitution was finalized in 1949, education has
remained one of the priorities of the Indian government. The first education minister Maulana Azad
founded a system of education which aimed to provide free education at the primary level. Primary
education was made free and compulsory for children from 6-14, and child labour was banned. The
government introduced incentives to education and disincentives for not receiving education for instance,
the provision of mid-daymeals in schools were introduced.Many similar initiatives echoed, and the largest
of such initiatives is Sarva Shiksha Abhiyan , which actively promoted Education for All. In line with this,
the United Progressive Alliance (UPA) aimed to increase their expenditure on education to 6% of its Gross
Domestic Product (GDP) from values fluctuating about 3% through their National Common Minimum
Programme (NCMP) in 2004. The Right of Children to Free and Compulsory Education Act was also imposed
in 2009. Despite these initiatives, education continues to persist as an impediment to development.
Voilance
Religious Voilance
Constitutionally India is a secular state , but large-scale violence have periodically occurred in India since
independence. In recent decades, communal tensions and religion-based politics have become more
prominent. . [ 37 ] Although India is generally known for religious pluralism , [ 38 ] the Hindutva ideology
propagates that India belongs to the Hindus, and the Christians and the Muslims are"aliens", [ 39 ] and
many proponents of this ideology portray violence against Muslims and Christians as a form of "selfdefence" against "invaders". The Hindutva ideology is at the core of Sangh Parivar politics andits
expression in violence against religious minority. [ 39 ] Throughout the history of post-Independence India
, many religion and communal violence took place. [ 41 ] As the Hindutva ideology has grown more powerful
over the years, many Hindutva activists have partaken in riots against minority communities. [ 42 ] Over
the last decade, religious violence in Indiahas increasingly become what academics believe to be organized
pogroms to eliminate minority communities. [ 43 ] [ 44 ] [ 45 ] Some state governments in India have been
accused of not effectively prosecuting those whoattack religious minorities. [ 46 ] Major religious violent
incidents. The regions with long term terrorist activities today are Jammu and Kashmir , Central India
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( Naxalism ) and Seven Sister States (independence and autonomy movements). In the past, the Punjab
insurgency led to militant activities in the Indian state of Punjab as well as the national capital Delhi (Delhi
serial blasts, anti-Sikh riots ). As of 2006,at least 232 of the countrys 608 districts were afflicted, at
differing intensities, by various insurgent and terrorist movements. [ 64 ]
Terrorism in India has often been alleged to be sponsored by Pakistan. After most acts of terrorism in
India, many journalists and politicians accuse Pakistan's intelligence agency, the Inter-Services
Intelligence of playing a role. Recently, both the US and Afghanistan have accused Pakistan of carrying
out terrorist acts in Afghanistan.
Naxalism is an informal name given to communist groups that were born out of the Sino-Soviet split in the
Indian communist movement. Ideologically they belong to various trends of Maoism . Initially the
movement had its centre in West Bengal . In recent years, they have spread into less developed areas of
rural central and eastern India, such as Chattisgarh and Andhra Pradesh through the activities of
underground groups like the Communist Party of India (Maoist) . [ 66 ] The CPI (Maoist) and some other
Naxal factions are considered terrorists by the Government of India and various state governments in
India.
Cast related voilance
Over the years, various incidents of violence against Dalits , such as Kherlanji Massacre have been
reported from many parts of India. At the same time, many violent protests by Dalits, such as the 2006
Dalit protests in Maharashtra , have been reported as well. The Mandal Commission was established in
1979 to "identify the socially or educationally backward", [ 68 ] and to consider the question of seat
reservations and quotas for people to redress caste discrimination. In 1980, the commission's report
affirmed the affirmative action practice under Indian law whereby members of lower castes were given
exclusiveaccess to a certain portion of government jobs and slots in public universities. When V. P. Singh
Government tried to implement the recommendations of Mandal Commission in 1989, massive protests
were held in the country. Many alleged that the politicians were trying to cash in on caste-based
reservations for purely pragmatic electoral purposes. In 1990s, many parties Bahujan Samaj Party (BSP),
the Samajwadi Party and the Janata Dal started claiming that they are representing the backward castes.
Many such parties, relying primarily on Backward Classes' support, often in alliance with Dalits and
Muslims, rose to power in Indian states. [ 69 ] At the same time, many Dalit leaders and intellectuals
started realizing that the main Dalit oppressors were so-called Other Backward Classes , [ 70 ] and
formed their own parties, such as the Indian Justice Party . The Congress (I) in Maharashtra long relied
on OBCs' backing for its political success. [ 69 ] Bharatiya Janata Party has also showcased its Dalit and
OBC leaders to prove that it is not an upper-caste party. Bangaru Laxman , the former BJP
president(20012002) was a Dalit . Sanyasin Uma Bharati , former CM of Madhya Pradesh , who belongs to
OBC caste, was a former BJP leader. In 2006 Arjun Singh cabinet minister for MHRD of the UPA
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government was accused of playing caste politics when he introduced reservations for OBCs in educational
institutions all around.
Unit III:
Fundamental of Economics
Economics
Economics is the social science that analyzes the production , distribution , and consumption of goods and
services . The term economics comes from the Ancient Greek i (oikonomia, "management of a
household, administration") from i (oikos, "house") + (nomos, "custom" or"law"), hence "rules of
the house(hold)". A social science that studies how individuals, governments, firms and nations make
choices on allocating scarce resources to satisfy their unlimited wants. Economics can generally be broken
down into: macroeconomics, which concentrates on the behavior of the aggregate economy; and
microeconomics, which focuses on individual consumers.
Economics is often referred to as"the dismal science." Economics has prime importance in social sciences.
It can be discussed under two heads: i. Theoretical importance ii. Practical importance
THEORATICAL IMPORTANCE
1. Intellectual development: The study of Economics widens the mental horizon of the people because it
increases mental capacity to understand various problems of life.
2. Spirit of co-operation: The study of Economics realizes us that we are interdependent to meet our
economic and social wants. It leads to spirit of co-operation.
3. Critical analysis: An economist critically analyses the situation and then draws conclusions which
provides a guide - line for successful life.
4. Rationality: The study of Economics teaches rationality, i.e. to avail the best possible situation within
the given conditions.
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5. Sense of responsibility: Economics teaches us that we have to meet our unlimited wants with limited
resources. It creates a sense of responsibilitywhich in turn makes a person a better citizen.
6. Vision about economic system: The study of Economics not onlyenables to understand different
economic systems, i.e. capitalism, socialism, Islamic economic system but it also creates a vision to look
into the working of a particular economic system.
7. Source of unavoidable informations: To understand some problems like inflation, exchange rate, shares,
BOP, deficit financing etc. has become unavoidable fora successful life. Economics is the major source of
all these inevitable information.
PRACTICAL IMPORTANCE
1. To understand other subjects: The study of Economics is very useful to understand other subjects like
history, sociology, psychology etc.
2. Solution of economic problems: The study of Economics provides the solution of critical economic
problems like poverty,inflation, monopolies, unemployment, environmental pollution etc.
3. Government: Planning and development strategies, budget, monetary policy, fiscal policy etc. are
majorconcerns of the government. Government depends heavily upon economists for policy decision making.
4. Producers: The ultimate objective of a producer is to maximize profit in case of profit and minimize
loss in case of loss. It is the study of Economics which provides guideline to hit the target.
5. Consumers: Consumers are always in search of maximization of satisfactions.It is Economics which
provides basic principles to maximize satisfaction.
6. Bankers: Banking is the most challengingart of present era. A successful banking system is based on the
knowledge of Economics .
7. Speculators: Speculation, i.e. purchase and sale of shares, bonds, certificates etc. is the major feature
of present business world. It is Economics which provides outlines for speculation.
8. Rulers: Economic tactics are the most effective tactics to win the favour of masses. Hence it is must
for a successful ruler to have the awareness of at least basic knowledge of Economics .
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9. Labour: Labourer enriched with the knowledge of Economics can realize their role and importance to the
employer in production process. Hence Economics enables them to enjoy higher wages.
10. Citizen: Knowledge of Economics is indispensable for a good citizen. Wooten has rightly remarked that:
You cannot be a citizen in real sense unless you are at least in some degree an economist.
11. Global supremacy: Global supremacy is possible only on the basis of advanced studies in Economics . For
instance G-8 countries are enjoying global supremacy on the basis of literature of Economics .
12. Optimum allocation of resources: Optimum allocation of resources is key to economic development and
the study of Economics confirms best allocation of resources.
13. Equitable distribution of wealth: Inequitable distribution of wealth has been the crucial problem of
especially LDCs. It is the study of the Economics which provides guide - line for equitable distribution of
wealth.
14. Gate-way to economic development: Economic development has been the dream of all nations. It is the
knowledge of Economics which serves as a gate-way to economics development.
Central Economic Problem
The economic problem , sometimes called the basic, central or fundamental economic problem, is one of
the fundamental economic theories in the operation of any economy . It asserts that there is scarcity , or
that the finite resources available are insufficient to satisfyall human wants and needs. The problem then
becomes how to determine what is to be produced and how the factors of production (such as capital and
labor ) are to be allocated. Economics revolves around methods and possibilities of solving the economic
problem. In short, the economic problem isthe choice one must make, arising out of limited means and
unlimited wants .
Opportunity cost and Production Possibility Frontier
The main theory to decipher what and how to prioritise these wants and needs is to look at theopportunity
cost (looks at what good must be prioritised first according to needs and how efficiently that the good
can satisfy infinite wants). A good way to look at this is the production possibility frontier (PPF), this
isolates two goods in an economy produced at any onegiven time to show the effect of what would happen
if one changed according to the other and also the effects of new technology and new resources.
Needs
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Needs are material items people need for survival, such as food, clothing, housing and ware. Until the
Industrial Revolution , the vast majority of the worlds population struggled for access to basic human
needs.
Wants
While the basic needs of survival are important in the function of the economy, wants are the driving
force which stimulates demand for goods and services. In order to curb the economic problem, economists
must classify the nature and different wants of consumers, as well as prioritize wants and organize
production to satisfy as many wants as possible. One assumption often made in mainstream neoclassical
economics (and the methods which attempt to solve the economic problem) is that humans inherently
pursue their self-interest and the market mechanism best satisfies the various wants different individuals
might have. These wants are often classified into individual wants , which depend on the individual's
preferences and purchasing power parity , and collective wants , those of entire groups of people.
Things such as food and clothing can be classified as either wants or needs, depending on what type and
how often a good is asked for. Wants are effective desires for a particular product, or something which
can only be obtained by working for it. Choice The economic problem fundamentally revolves around the
idea of choice, which ultimately must answer the problem. Due to the limited resources available,
businesses must determine what to producefirst to satisfy demand. Consumers are considered the biggest
influences of this choice, and the goods which they want must also fit within their budgets and purchasing
power parity . Different economic models place choice in different hands.
Positive and Normative Approach
There are various approaches to studying economics, which deals with how people make choices about
scarce resources that have alternative uses. For instance, there is the micro approach to economics, which
looks at individual units in the economy, and there is the macro approach, which looks at the overall
economy. There is also the normative approach to economics, as opposed to a positive approach.
1. Normative Approach *.
A normative approach to economics looks at "what ought to be," as the economist Milton Friedman put it,
when it comes to decision-making relating to economics. Rather than just objectively studying aneconomic
situation and coming up with solutions, normative economics involves coming up with a solution that caters
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to a certain perspective. It has a moral or ethical component to it, rather than merely a factual
orientation, which introduces a subjective orientation to a study.
2. Positive Approach *.
In contrast, the positive approach to economics is to look at facts objectively and come up with input. In
analyzing a situation, positive economics does not involve imposing value judgments on others. Rather, this
approach studies things as they are, rather than as they ought to be.Economists in general favor a positive
approach to economics, so as to preserve the integrity of economic analysis and decision-making. Apositive
approach gives the field more credibility.
Economic System
An economic system is a system for producing, distributing and consuming goods and services, including
the combination of the various institutions, agencies, consumers, entities (or even sectors as described by
some authors) that comprise the economic structure of a given society or community. It also includes how
these various agencies and institutions are linked to one another, how information flows between them,and
the social relations within the system (including property rights and the structure of management). A
related concept is the mode of production . The economic system involves investments , production , the
allocation of economic inputs, distribution of economic outputs,land availability, households (earnings and
expenditure consumption of goods and services in an economy ), financial institutions and government
policies. It involves a set of institutions and their various social relations . Alternatively, it is the set of
principles by which problems of economics are addressed, such as the economic problem of scarcity
through allocation of finite productive resources. [ 1 ]
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An economic system is composedof people , institutions , rules, andrelationships. Economic systems can be
dividedby the way they allocate economic inputs (the means of production ) and how they make decisions
regarding the use of inputs. A common distinction of great importance is that between capitalism (a
market economy ) and socialism ( economic planning ).
Capitalism
In a capitalist economic system, production is carried out to maximize private profit, decisionsregarding
investment and the use of the means of production are determined by competing business owners in the
marketplace; production takes place within the process of capital accumulation . The means of production
are owned primarily by private enterprises and decisions regarding production and investment determined
by private owners in capital markets . Capitalist systems range from laissez-faire, with minimal government
regulation and state enterprise, to regulated and social market systems, with the stated aim of ensuring
social justice and a more equitable distribution of wealth (see welfare state ) or ameliorating market
failures (see economic intervention ).
Socialism
In a socialist economic system, production is carried out to directly satisfy economic demandby producing
goods and services for use ; decisions regarding the use of the means of production are adjusted to
satisfy economic demand, investment (control overthe surplus value) is carried out through a mechanism of
inclusive collective decision-making. The means of production are either publicly owned , or are owned by
the workers cooperatively . A socialisteconomic system that is based on the process of capital
accumulation, but seeks to control or direct that process through state ownership or cooperative control
to ensure stability, equality or expand decision-making power, are market socialist systems .
Unit IV: Microeconomics

Microeconomics
Microeconomics (from Greek prefix micro- "" meaning"small" + "economics"-"") is a branch of
economics that studies the behavior of individual households and firms in making decisions on the
allocation of limited resources. [ 1 ] Typically, it applies to markets where goods or services are bought
and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for
goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and
quantity demanded of goods and services. [ 2 ] [ 3 ] This is in contrast to macroeconomics , which
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involvesthe "sum total of economic activity, dealing with the issues of growth , inflation , and
unemployment ." [ 2 ]
Microeconomics also deals with the effects of national economic policies (such as changing taxation levels)
on the aforementioned aspects of the economy. [ 4 ] Particularly in the wake of the Lucas critique ,
muchof modern macroeconomic theory has been built upon ' microfoundations 'i.e. based upon basic
assumptions about micro-level behavior. One of the goals of microeconomics is to analyze market
mechanisms that establish relative prices amongst goods and services and allocation of limited resources
amongst many alternative uses. Microeconomics analyzes market failure , where markets fail to produce
efficient results, and describes the theoretical conditions needed for perfect competition . Significant
fields of study in microeconomics include general equilibrium , markets under asymmetric information ,
choice under uncertainty and economic applications of game theory . Also considered is the elasticity of
products within the market system.
Law of Supply and Demand
The price P of a product is determined by a balance between production at each price (supply S) and the
desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in
demand from D 1 to D 2 , resulting in an increase in price (P) and quantity sold (Q) of the product. In
microeconomics , supply and demand is an economic model of price determination in a market . It concludes
that in a competitive market , the unit price for a particular good will vary until it settles at a point where
the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at
current price), resulting in an economic equilibrium for price and quantity . The four basic laws of supply
anddemand are:
1. If demand increases and supplyremains unchanged, a shortageoccurs, leading to a higher equilibrium
price.
2. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium
price.
3. If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
4. If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium
price.
Utility Approach In economics ,
utility is a representation of preferences over some set of goods and services. Preferences have a utility
representation so long as they are transitive, complete, and continuous. Utility is usually applied by
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economists in such constructs as the indifference curve , which plot the combination of commodities that
an individual ora society would accept to maintain a given level of satisfaction. Individual utility and social
utility can be construed as the value of a utility function and a social welfare function respectively. When
coupled with production or commodity constraints, under some assumptions, these functions canbe used to
analyze Pareto efficiency , such as illustrated by Edgeworth boxes in contract curves . Such efficiency is a
central concept in welfare economics . In finance , utility is applied to generate an individual's price for an
asset called the indifference price . Utility functions are also related to risk measures , with the most
common example beingthe entropic risk measure . Quantifying utility It was recognized that utility could
not be measured or observed directly, so instead economists devised a way to infer underlying relative
utilities from observed choice. These 'revealed preferences', as they were named by Paul Samuelson ,
were revealed e.g. in people's willingness to pay: Utility is taken to be correlative toDesire or Want. It has
been already argued that desires cannot be measured directly, but only indirectly, by the outward
phenomena to which they give rise: and that in those cases with which economics is chiefly concerned the
measure is found in the price which a person is willing to pay for the fulfilment orsatisfaction of his
desire.
Cardinal and ordinal utility
Economists distinguish between cardinal utility and ordinal utility . When cardinal utility is used, the
magnitude of utility differences is treated as an ethically or behaviorally significant quantity. On the
other hand, ordinal utility captures only ranking and not strength of preferences. Utility functions of both
sorts assign a ranking to members of achoice set. For example, suppose a cup of orange juice has utility of
120 utils, a cup of tea has a utility of 80 utils, and a cup of water has a utility of 40 utils. When speaking
of cardinal utility, it could be concluded that the cup of orange juice is better than the cup of tea by
exactly the same amount by which the cup of tea is better than the cup of water. One is not entitled to
conclude, however, that the cup of tea is two thirds as good as the cup of juice, because this conclusion
would depend not only on magnitudes of utility differences, but also on the"zero" of utility. It is tempting
when dealing with cardinal utility to aggregate utilities across persons. The argument against this is that
interpersonal comparisons of utility are meaningless because there is no good way to interprethow
different people value consumption bundles. When ordinal utilities are used, differences in utils are
treated as ethically or behaviorally meaningless: the utility index encode a full behavioral ordering
between members of a choice set, but tells nothing about the related strength of preferences . In the
above example, it would only be possible to say that juice is preferred to tea to water, but no more.
Neoclassical economics has largely retreated from using cardinal utility functions as the basic objects of
economic analysis, in favor of considering agent preferences over choice sets. However, preference
relations can often be represented by utility functions satisfying several properties. Ordinal utility
functions are unique up to positive monotone transformations, while cardinal utilities are unique up to
positive linear transformations.
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Utility can be categoriesed by these two categories:

Marginal utility
In economics , the marginal utility of a good or service is the gain (or loss) from an increase (or decrease)
in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal
utility , meaning that the first unit of consumption of a good or service yields more utility than the second
and subsequent units. [ citation needed ] The marginal decision rule states that a good or service should be
consumed at a quantity at which the marginal utility is equal to the marginal cost.
Total Utility
The aggregate level of satisfaction or fulfillment that a consumer receives through the consumption of a
specific good or service. Each individual unit of a good or service has its own marginal utility, and the total
utility is simply the sum of all the marginal utilities of the individualunits. Classical economic theory
suggests that all consumers wantto get the highest possible level of total utility for the money they
spend.
Law of Diminishing Marginal Utility
Definition: Consumers will buy as much as pleases them, with their income. "As each additonal unit is
purchased, the excess satisfaction gained from each purchase decreases , until it becomes irrational to
continue purchasing." For example, one slice of pizza may give you muchsatisfaction, as does the second
slice. The third slice makes you extremely full, while the fourth slice makes you nauseous. At this point, it
becomes irrational for you to purchase additional slices of pizza.
*. "Utility": satisfaction or pleasure one gets from consuming it.
*.Utility is subjective, as a specific product can vary from person to person.
*. Ex. eyeglasses have utility to someone who has poor eyesight but has no utility witha person with
perfect vision.
*. Utils - imaginary unit of measurement for utility
*. Utility is not the same as"usefulness"
*. Total Utility: TU the total amount of satisfaction or pleasure a person derives fromconsuming some
specific quantity.Total Utility is equal to all of the marginal utilities added together.
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*. Marginal Utility: the extra satisfaction a consumer realizes from an additional unitof that product.
*. Consumers want to maximize the total utility not marginal utility.
Indifference Curves
In microeconomic theory , an indifference curve is a graph showing different bundles of goods between
which a consumer is indifferent. That is, at each point on the curve, the consumer has no preference for
one bundle over another. One can equivalently refer to each point on the indifference curve as rendering
the same level of utility (satisfaction) for the consumer. Utility is then a device to represent preferences
rather than something from which preferences come. [ 1 ]
The main use of indifference curves is in the representation of potentially observable demand patterns
for individual consumers over commodity bundles. Indifference curves are typically represented to be:
1. Defined only in the non-negative quadrant of commodity quantities (i.e. the possibility of having negative
quantities of any good is ignored).
2. Negatively sloped. That is, as quantity consumed of one good (X) increases, total satisfaction would
increase if not offset by a decrease in the quantity consumed of the othergood (Y). Equivalently,
satiation , such that more of either good (or both) is equally preferred tono increase, is excluded. (If
utility U = f(x, y) , U , in the third dimension, does not have a local maximum for any x and y values.) The
negative slope of the indifference curve reflects the assumption of the monotonicity of consumer's
preferences, which generates monotonically increasing utility functions, and the assumption of nonsatiation (marginal utility for all goods is always positive); an upward sloping indifference curve would imply
that a consumer is indifferent between a bundle A and another bundle B because they lay on the same
indifference curve, even in the case in whichthe quantity of both goods in bundle B is higher. Because of
monotonicity of preferences and non-satiation, a bundle with more of both goods must be preferred to one
with less ofboth, thus the first bundle mustyield a higher utility, and lay on a different indifference curve
ata higher utility level. The negative slope of the indifference curve implies that the marginal rate of
substitution is always negative.
Elasticity
In economics , elasticity is the measurement of how changing one economic variable affects others. For
example: *. "If I lower the price of my product, how much more will I sell?" *. "If I raise the price, how
much less will I sell?" *. "If we learn that a resource is becoming scarce, will people scramble to acquire
it?" In more technical terms, it is the ratio of the percentage change inone variable to the percentage
change in another variable. It is a tool for measuring the responsiveness of a function to changes in
parameters in a unitless way. Frequently used elasticities include price elasticity of demand , price
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elasticity of supply , income elasticity of demand , elasticity of substitution between factors of production
and elasticity of intertemporal substitution .
Elasticities of demand
Price elasticity of demand
Price elasticity of demand measures the percentage changein quantity demanded caused by a percent
change in price. As such, it measures the extent of movement along the demand curve. This elasticity is
almost always negative and is usually expressed in terms of absolute value (i.e. as positive numbers) since
the negative can be assumed. In these terms, then, if the elasticity is greater than 1 demand is said to be
elastic; between zero and one demand isinelastic and if it equals one, demand is unit-elastic. A
perfectlyelastic demand curve is horizontal (with an elasticity of infinity) whereas a perfectly inelastic
demand curve is vertical (with an elasticity of 0). Income elasticity of demand Income elasticity of
demand measures the percentage changein demand caused by a percent change in income. A change in
income causes the demand curveto shift reflecting the change in demand. IED is a measurement ofhow far
the curve shifts horizontally along the X-axis. Income elasticity can be used to classify goods as normal or
inferior. With a normal good demand varies in the same direction as income. With an inferior good demand
and income move in opposite directions. [ 2 ]
Cross price elasticity of demand
Cross price elasticity of demand measures the percentage change in demand for a particular good caused
by a percent change in the price of another good. Goodscan be complements, substitutes or unrelated. A
change in the price of a related good causes the demand curve to shift reflecting a change in demand for
the original good. Cross price elasticity is a measurement of how far, and in which direction, the curve
shifts horizontally alongthe x-axis. A positive cross-price elasticity means that the goods are substitute
goods . Cross elasticity of demand between firms Cross elasticity of demand for firms, sometimes
referred to as conjectural variation , is a measure of the interdependence between firms. It captures the
extent to which one firm reacts to changes in strategic variables (price, quantity, location, advertising,
etc.) made by other firms.
Elasticities of supply
Price elasticity of supply
The price elasticity of supply measures how the amount of a good firms wish to supply changes in response
to a change in price. [ 3 ] In a manner analogous to the price elasticity of demand, it captures the extentof
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movement along the supply curve. If the price elasticity of supply is zero the supply of a good supplied is
"inelastic" and the quantity supplied is fixed. Application Elasticity is one of the most important concepts
in neoclassical economic theory. It is useful in understanding the incidence of indirect taxation , marginal
concepts as they relate to the theory of the firm , and distribution of wealth and different types of
goods as they relate to the theory of consumer choice . Elasticity is also crucially important in any
discussion of welfare distribution, in particular consumer surplus , producer surplus , or government
surplus . In empirical work an elasticity is the estimated coefficient in a linear regression equation
whereboth the dependent variable and the independent variable are in natural logs . Elasticity is a popular
tool among empiricists because it is independent of units and thus simplifies data analysis.
Consumer surplus
Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual
pricethey do pay. If a consumer wouldbe willing to pay more than the current asking price, then they are
getting more benefit from the purchased product than they spent to buy it. An example of a good with
generally high consumer surplus is drinking water. People would pay very high prices for drinking water,
asthey need it to survive. The difference in the price that they would pay, if they had to, and theamount
that they pay now is their consumer surplus. Note thatthe utility of the first few liters of drinking water
is very high (as it prevents death), so the first few liters would likely have more consumer surplus than
subsequent liters. The maximum amount a consumer would be willing to pay for a given quantity of a good is
the sum of the maximumprice he would be willing to pay for the first unit, the (lower) maximum price he
would be willing to pay for the second unit,etc. Typically these prices are decreasing; they are given by the
individual demand curve . For a given price the consumer buys the amount for which the consumer surplus
is highest, where consumer surplus is the sum, over all units, of the excess of the maximum willingness to
pay over the equilibrium (market)price.
The consumer's surplus is highest at the largest number of units for which, even for the last unit, the
maximum willingness topay is not below the market price The aggregate consumers' surplus is the sum of
the consumer's surplus for all individual consumers. This can berepresented graphically as shown in the
above graph of the market demand and supply curves.
Law of Returns to Scale:
The law of returns are often confused with the law of returnsto scale. The law of returns operates in the
short period. It explains the production behavior of the firm with one factor variable while other factors
are kept constant. Whereas the law of returns to scale operates in thelong period. It explains the
production behavior of the firm with all variable factors. There is no fixed factor of production in the
long run. The law of returns to scale describes the relationship between variableinputs and output when all
the inputs, or factors are increased inthe same proportion. The law of returns to scale analysis the
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effects of scale on the level of output. Here we find out in what proportions the output changes when
there is proportionate change in the quantities of all inputs. The answer to this question helps a firm to
determine its scale or size in the long run. It has been observed that when there is a proportionate change
in the amounts of inputs, the behavior of output varies. The output may increase by a great proportion, by
in the same proportion or in a smaller proportion to its inputs. This behavior of output with the increase in
scale of operation is termed as increasing returns to scale, constant returns to scale and diminishing
returns to scale.
These three laws of returns to scale are now explained, in brief, under separate heads.
(1) Increasing Returns to Scale:
If the output of a firm increases more than in proportion to an equal percentage increase in all inputs, the
production is said to exhibit increasing returns to scale. For example, if the amount of inputs are doubled
and the output increases by more than double, it is said to be an increasing returns returns to scale. When
there is an increase in the scale of production, it leadsto lower average cost per unit produced as the firm
enjoys economies of scale.
(2) Constant Returns to Scale:
When all inputs are increased by a certain percentage, the output increases by the same percentage, the
production function is said to exhibit constant returns to scale. For example, if a firm doubles inputs, it
doubles output. In case, it triples output. The constant scale of production has no effect on average cost
per unit produced.
(3) Diminishing Returns to Scale:
The term 'diminishing' returns to scale refers to scale where outputincreases in a smaller proportion than
the increase in all inputs. For example, if a firm increases inputs by 100% but the output decreases by less
than 100%, the firm is said to exhibit decreasing returns to scale. In case of decreasing returns to scale,
the firm faces diseconomies of scale. The firm's scale of production leads to higher average cost per unit
produced.
Law of Return to Factor
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When it comes to finances, a factor return can refer to an evaluation process that helps companies to
make sure they are earning the greatest possible return on the goods and services they offer, or to a
specific type of remuneration generated by a particular business service. In both scenarios, the goal is to
make sure that all parties involved are receiving the greatest degree of satisfaction from their efforts
with specific amount ofreturn achieved. Should the return not be satisfactory, calculating
a factor return can sometimes help identify ways to refine the process so that an equitable level of
satisfaction is achieved.
A factor return is the amount of return that is generated as a result of the performance of a given
element or factor that is relevant to the production and sale of the goods or services. The purpose of
calculating this type of return is to determine if the resources utilized to create sales and some sort of
profit are actually performing at peak efficiency. Assessing the factor return can make it possible to
identify expenses that are not actually helping to generate return, eliminate or replace them, and increase
the bottom line.
Unit V: Macroeconomics
National Product
Gross national product ( GNP ) is the market value of all products and services produced in one year by
labour and property supplied by the residents of a country. Unlike Gross Domestic Product (GDP), which
defines production based on the geographical location of production, GNP allocates production based on
ownership. GNP does not distinguish between qualitative improvements in the state of the technical arts
(e.g., increasing computer processing speeds), and quantitative increases in goods (e.g., number of
computers produced), and considers both to be forms of"economic growth". [ 1 ] Basically, GNP is the total
value of all final goods and services produced within a nation in a particular year, plus income earned by its
citizens (including income of those located abroad), minus income of non-residents located in that country.
GNP measures the value of goods andservices that the country's citizens produced regardless of their
location. GNP is one measure of the economic condition of a country, under the assumption that a higher
GNP leads to a higher quality of living, all other things being equal.
National Income
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The Gross national income ( GNI ) consists of: the personal consumption expenditures, the gross private
investment, the government consumption expenditures, the net income from assets abroad (net income
receipts), and the gross exports of goods and services, after deducting two components: the gross
imports of goods and services, and the indirect business taxes . The GNI is similarto the gross national
product (GNP), except that in measuring the GNP one does not deduct the indirect business taxes.
Measurement of National Income
A variety of measures of national income and output are used in economics to estimate total economic
activity in a country or region, including gross domestic product ( GDP ), gross national product ( GNP ), net
national income ( NNI ), and adjusted national income (NNI* adjusted for natural resource depletion). All
are specially concerned with counting the total amount of goods and services produced within
some"boundary". The boundary is usually defined by geography or citizenship, and may also restrict the
goods and services that are counted. For instance, some measures count only goods and services that are
exchanged for money, excluding bartered goods, while other measures may attempt to include bartered
goods by imputing monetary values to them.
National accounts
Arriving at a figure for the total production of goods and servicesin a large region like a country entails a
large amount of data-collection and calculation. Although some attempts were made to estimate national
incomes as long ago as the 17th century, [ 2 ] the systematic keeping of national accounts , of which these
figures are a part, only began in the 1930s, in the United States and some Europeancountries. The impetus
for that major statistical effort was the Great Depression and the rise of Keynesian economics , which
prescribed a greater role for the government in managing an economy, and made it necessary for
governments to obtain accurate information so that their interventions into the economy could proceed as
well-informed as possible. Market value In order to count a good or service it is necessary to assign some
value to it. The value that the measures of national income and output assign to a good or service is its
market value the price it fetches when bought or sold. The actual usefulness of a product (its use-value)
is not measured assuming the use-value to be any different from its market value.
Three strategies have been used to obtain the market values of all the goods and services produced: the
product (or output) method, the expenditure method, and the income method.
The product method looks at the economy on an industry-by-industry basis. The total output of the
economy is the sum of the outputs of every industry. However, since an output of one industry may be
used by another industry and become part of the output of thatsecond industry, to avoid counting the
item twice we use not the value output by each industry, but the value-added; that is, the difference
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between the value of what it puts out and what it takes in. The total value produced by the economy is the
sum of the values-added by everyindustry.
The expenditure method is basedon the idea that all products are bought by somebody or some
organisation. Therefore we sum up the total amount of money people and organisations spend in buying
things. This amount must equal the value of everything produced. Usually expenditures by private
individuals, expenditures by businesses, and expenditures by government are calculated separately and
then summed to give the total expenditure. Also, a correction term must be introduced to account for
imports and exports outside the boundary.
The income method works by summing the incomes of all producers within the boundary. Since what they
are paid is just the market value of their product,their total income must be the total value of the
product. wages,proprieter's incomes, and corporate profits are the major subdivisions of income.
The output approach
The output approach focuses on finding the total output of a nation by directly finding the total value of
all goods and services a nation produces. Because of the complication of the multiple stages in the
production of a good or service, only the final value of a good or service is included in total output.This
avoids an issue often called ' double counting ', wherein the total value of a good is included several times
in national output, by counting it repeatedly in several stages of production. In the example of meat
production, the value of the good from the farm may be $10, then $30 from the butchers, and then $60
from the supermarket. The value that should be included in final national output should be $60, not the
sum of all those numbers,$100. The values added at each stage of production over the previous stage are
respectively$10, $20, and $30. Their sum gives an alternative way of calculating the value of final output.
Formulae: GDP(gross domestic product) at market price = value of output inan economy in a particular year
-intermediate consumption NNP at factor cost = GDP at market price - depreciation + NFIA (net factor
income from abroad) - net indirect taxes
The income approach
The income approach equates the total output of a nation to thetotal factor income received by residents
or citizens of the nation.
The main types of factor income are:
*. Employee compensation (cost of fringe benefits, including unemployment, health, and retirement
benefits);
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*. Interest received net of interest paid;

*. Rental income (mainly for the use of real estate) net of expenses of landlords;
*. Royalties paid for the use of intellectual property and extractable natural resources. All remaining value
added generated by firms is called the residual or profit . If a firm has stockholders, they own the
residual, some of which they receive as dividends .
Profit includes the income of the entrepreneur - the businessman who combines factor inputs to produce a
good or service.
Formulae: NDP at factor cost = Compensation of employees + Net interest + Rental & royalty income +
Profit of incorporated and unincorporated NDP at factor cost
The expenditure approach
The expenditure approach is basically an output accounting method. It focuses on finding thetotal output
of a nation by finding the total amount of money spent. This is acceptable, because like income, the total
value of all goods is equal to the total amount of money spent on goods.
The basic formula for domestic output takes all the different areas in which money isspent within the
region, and thencombines them to find the total output.
GDP=C+I+G+(X-M)
Where: C = household consumption expenditures / personal consumption expenditures I = gross private
domestic investment G = government consumption and gross investment expenditures X = gross exports of
goods and services M = gross imports of goods and services Note: ( X - M ) is often written as X N , which
stands for "net exports"
The Keynesian Theory
Keynes's theory of the determination of equilibrium real GDP, employment, and prices focuses on the
relationship between aggregate income and expenditure. Keynes used his income-expenditure model to
argue that the economy's equilibrium level of output or real GDP may not corresPond to the natural level
of real GDP.In the income-expenditure model, the equilibrium level ofreal GDP is the level of real GDPthat
is consistent with the current level of aggregate expenditure. If the current level of aggregate
expenditure is not sufficient to purchase all of the real GDP supplied, output will be cut back until the
level of real GDP is equal to the level of aggregate expenditure. Hence, if the current level of aggregate
expenditure is not sufficient to purchase the natural level of real GDP, then the equilibrium level of real
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GDP will lie somewhere below the natural level. In this situation, the classical theorists believe that prices
and wages will fall, reducing producer costs and increasing the supply of real GDP until it is again equal to
the natural level of real GDP. Sticky prices. Keynesians, however, believe that prices and wages are not so
flexible.They believe that prices and wages are sticky , especially downward. The stickiness of prices and
wages in the downward direction preventsthe economy's resources from being fully employed and thereby
prevents the economy from returning to the natural level of real GDP. Thus, the Keynesian theory is a
rejection of Say's Law and the notion that the economy is self-regulating. Keynes's income-expenditure
model. Recall that real GDP can be decomposed into four component parts: aggregate expenditures on
consumption, investment, government, and net exports.
The income-expenditure model considers the relationship between these expenditures and current
realnational income. Aggregate expenditures on investment, I , government, G , and net exports, NX , are
typically regarded as autonomous or independent of current income. The exception is aggregate
expenditures on consumption. Keynes argues that aggregate consumption expenditures are determined
primarily by current real national income. He suggests that aggregate consumption expenditures can be
summarized by the equation Aggregate consumption = C+mpc(Y) where C denotes autonomousconsumption
expenditure and Y is the level of current real income, which is equivalent to the value of current real GDP.
The marginal propensity to consume ( mpc ), which multiplies Y , is the fraction of a change in real income
that is currently consumed. In most economies, the mpc is quite high, ranging anywherefrom .60 to .95.
Note that as the level of Y increases, so toodoes the level of aggregate consumption.
Total aggregate expenditure , AE , can be written as the equation AE=A+mpc(Y) where A denotes total
autonomous expenditure , orthe sum C + I + G + NX . Different levels of autonomous expenditure, A , and
real national income, Y , correspond to different levels of aggregate expenditure, AE. Equilibrium real GDP
in the income-expenditure model is found by setting current real national income, Y , equal to current
aggregate expenditure, AE. Algebraically, the equilibrium condition that Y = AE implies that Y=A+mpc(Y)
(1-mpc)Y = A Y=m(A) where m=1/(1-mpc) In words, the equilibrium level of real GDP, Y *, is equal to the
level of autonomous expenditure, A , multiplied by m , the Keynesian multiplier. Because the mpc is the
fraction of a change in real national income that is consumed,it always takes on values between 0 and 1.
Consequently, the Keynesian multiplier, m , is always greater than 1, implying that equilibrium real GDP, Y *,
is always a multiple of autonomous aggregate expenditure, A , which explains why m is referred to as the
Keynesian multiplier.
Money and Banking
Money can be thought of as anygood that is widely used or accepted in the transfer of goodsand services.
Today, there are three common forms of money inuse. Commodity money is a good whose inherent value
serves as the value of money gold or silver being one good example. Fiat money is a good whose valueis
less than
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the value of money it represents paper money, for instance. Bank money consists of accounting credits
that can be drawn on by the depositor checking accounts, for instance. Money serves multiple functions
in an economy. Money is first andforemost a medium of exchange . When all parties in an economy will
accept money, it eliminates the need for a double coincidence of wants that goes with barter that is,
both parties have to want what the other is offering. Accordingly, money as a medium of exchange is much
faster and more convenient in commerce. Money also is supposed to hold value over time. A dollar bill or
gold coin will still be valuable tomorrow or a year from now, but a fish has very little value after a couple
of days because of decomposition. Finally, money also provides a convenient unit of account. If someone
quotes a price of $100 everyone will understand the value that represents. In comparison, 4.5 pounds of
tungsten may have the same value, but quoting prices in tungsten is not useful as hardly any consumers can
relate to the value it represents.
Demand for money is determinedby the price level and the level of activity within an economy. Interest
rates effectively serve as the cost of money, and rates are determined by the demand for money when
demand for money falls (often because economic activity has declined), rates fall and when demand for
money increases, rates rise.
The Fed and the Banking System In most countries, money is supplied by the central bank . In the United
States the central bankis the Federal Reserve. The Federal Reserve not only supplies money and sets the
price of money through a variety of mechanisms, but also regulates the banking system of the United
States. Banks are institutions that effectively buy and sell money -"buying" money from depositors, who
give up the utility of spending that money in exchange for interest and safe-keeping and "selling" moneyto
borrowers in the form of loans. The United States, and virtually all Western economies, operates a
fractional reserve banking system . This is a banking system where banks hold a government-determined
minimum amount of cash or safe securities (called the required reserve) determinedas a percentage of
the bank's deposits.
Banks are then free to loan the remainder to customers. Required reserves also lead to an economic
concept called the money multiplier. As the name suggests, a multiplier is a system where an initial is
magnified through the system. The money multiplier is expressed as the equation: 1 / required reserve
ratio. In the case of a banking system with a 10% required reserve , for instance, every $1 deposited with
a bank ultimately leads to $10 in the money supply ( 1 / 0.10 ) as the deposited money is loaned out, redeposited, loaned out again and so on. Monetary Policy While fiscal policy is conducted bya nation's
government, monetary policy is handled by a country's central banks (which have varying amounts of
independence around the world). In the United States, monetary policy is largely conducted through three
mechanisms open market operations, reserve requirements and interest rates (in the form of discount
rates). Open market operations refer to the buying (or selling) of Treasurysecurities by the Federal
Reserve. If the Fed wishes to increase the money supply, it goes into the market and buys securities.
Conversely, by going into the market and selling securities, the Fed can remove liquidity and decrease the
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money supply. Altering the reserve ratio either increases or reduces a bank's capacity to lend. By law, all
banks must retain a specified minimum percentage of deposits, while remaining free to loan the remainder.
When the reserve ratio is increased, banks are unable to make as many loans and the money supply
decreases (and vice versa when the ratio is decreased). Finally, the discount rate is the Fed's mechanism
for essentially setting the price of money. By raising or lowering the Fed Fundsrate, the Federal Reserve
can induce banks to borrow more or less money, money which can in turn be lent out to the banks'
customers and increase the money supply.
Keynesian arguments argue that monetary policy can be used to influence aggregate demand, lessening the
severity or length of recessions and slowing growth before an economy becomes overheated. The theory is
that lower rates stimulate more consumption from consumers and more investment from businesses and
vice versa for higher rates. Monetarists do not support this view. Monetarists largely believe that
changing the money supply does not produce any long-term changes in GDP and only impacts price levels
(increasing or decreasing inflation). In other words, by raising or lowering rates through monetary policy,
governments risk inflation and destabilizing the economy, but cannot produce any sustained change in
growth. These arguments about the efficacy of monetary policy revolve in large part around a concept
known as the velocity of money. The velocity of money basically refers to the frequency with which a unit
of money is spent in a given period of time; the higher the velocity, the smaller the supply of money can be
for a given level of economic activity. Monetarists hold that velocity does not change quickly or often (if
at all) and that an increase in money supply simply increases prices.
International Trade
International trade is the exchange of capital , goods , and services across international borders or
territories. [ 1 ] In most countries, such trade represents a significant share of gross domestic product
(GDP). While international trade has been present throughout much of history (see Silk Road , Amber
Road ), its economic, social, and political importance has been on the rise in recent centuries.
Industrialization , advanced transportation , globalization , multinational corporations , and outsourcing are
all having a major impact on the internationaltrade system. Increasing international trade is crucial to the
continuance of globalization . Without international trade, nations would be limited to the goods and
services produced within their own borders. International trade is, in principle,not different from
domestic trade as the motivation and the behavior of parties involved in a trade do not change
fundamentally regardless of whether trade is across a border or not.
The main difference is that international trade is typically more costly than domestic trade. The reason is
that a border typically imposes additional costs such as tariffs , time costs due to border delays and costs
associated with country differences such as language, the legal system or culture. Another difference
between domestic and international trade is that factors of production suchas capital and labor are
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typically more mobile within a country than across countries. Thus international trade is mostly restricted
to trade in goods and services, and only to a lesser extent to trade in capital, labor orother factors of
production. Trade in goods and services can serve as a substitute for trade in factors of production.
Instead of importing a factor of production, a country can import goods that make intensive use ofthat
factor of production and thus embody it. An example is theimport of labor-intensive goods by the United
States from China. Instead of importing Chinese labor, the United States imports goods that were
produced with Chinese labor. One report in 2010suggested that international trade was increased when a
country hosted a network of immigrants, but the trade effect was weakened when the immigrants became
assimilated into their new country. [ 2 ] International trade is also a branch of economics , which, together
with international finance , forms the larger branch of international economics .
Exchange Rate
In finance , an exchange rate (also known as the foreign-exchange rate , forex rate or FX rate ) between
two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the
value of one countrys currency in terms of another currency.
Determination of Exchange Rate
Exchange rates are determined in the foreign exchange market , [ 2 ] which is open to a wide range of
differenttypes of buyers and sellers wherecurrency trading is continuous: 24 hours a day except
weekends,i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. The spot exchange rate refers
tothe current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and
traded today but for delivery and payment on a specific future date. In the retail currency exchange
market, a different buying rate and selling rate will be quoted by money dealers. Most trades are to or
from the local currency. The buying rate is the rate at which money dealers will buy foreign currency, and
the selling rate is the rate at which they will sell the currency. The quoted rates will incorporate an
allowance for a dealer's margin (or profit) in trading, or else the margin may be recovered in the form of a
"commission" or in some other way. Different rates may also be quoted for cash (usually notes only), a
documentary form (such as traveller's cheques) or electronically (such as a credit card purchase). The
higher rate on documentary transactions is due to the additional time and cost of clearing the document,
while the cash is available for resale immediately. Some dealers on the other hand prefer documentary
transactions because of the security concerns with cash.
Balance of Payments
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Balance of payments ( BoP ) accounts are an accounting record of all monetary transactions between a
country and the rest of the world. [ 1 ] These transactions include payments for the country's exports and
imports of goods , services , financial capital , and financial transfers . The BoP accounts summarize
international transactions for a specific period, usually a year, and are prepared in a single currency,
typically the domestic currency for the country concerned. Sources of funds for anation, such as exports
or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as
for imports or to invest in foreign countries, are recorded as negative or deficit items. When all
components of the BOP accounts are included they must sum to zero with no overall surplus or deficit. For
example, if a country is importing more thanit exports, its trade balance will be in deficit, but the
shortfall will have to be counterbalanced in other ways such as by funds earned from its foreign
investments, by running down central bank reserves or by receiving loans from other countries. While the
overall BOP accounts will always balance when all types of payments are included, imbalances are possible
on individual elements of the BOP, such as the current account , the capital account excluding the central
bank's reserve account, orthe sum of the two. Imbalances in the latter sum can result in surplus countries
accumulating wealth, while deficit nations become increasingly indebted. The term "balance of payments"
often refers to this sum: a country's balance of payments is said to be in surplus (equivalently, the balance
of payments is positive) by a certainamount if sources of funds (such as export goods sold and bonds sold)
exceed uses of funds (such as paying for imported goods and paying for foreign bonds purchased) by that
amount. There is said to be a balance of payments deficit (the balance of payments is said to be negative)
if the former are less than the latter.
Characteristics of Indian Economy
Indian economy is an under developed economy in which Agriculture is the back bone of Indian economic.
60% of Indias population are on the below poverty line. Mineral resources are not fully utilized. We are
selling iron ore by trucks and getting blades by packets. Majority of the people of India are leading a
poverty line. Indianeconomic is affected by it. Countries which are on the part of progress and which have
their potential for development are called developing economic. So India is termed as developingeconomic
by modern views.
The important features of Indian economic:

1. Low per capita income: Under developed economy is characterized by low per capital income. India per
capital incomeis very low as compared to the advanced countries. For examplethe capital income of India
was 460 dollar, in 2000. Where as their capita income of U.S.A in 2000 was 83 times than India. This
trend of difference of per capita income between under developed and advanced countries is gradually
increasing in present times. India not only the per capita income is low but also the income is unequally
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distributed. This mal-distributionof income and wealth makes theproblem of poverty in ore criticaland
acute and stands an obstacle in the process of economic progress
2. Heavy Population Pressure: The Indian economy is facing the problem population explosion. It is clearly
evident from the total population of India which was 102.67 cores in2001 census. It is the second highest
populated country Chinabeing the first. Indias population has reached 110 cores. All the under developed
countries are characterized by high birth rate which stimulates the growth of population; the fast rate of
growth of population necessitates a higherrate of economic growth to maintain the same standard of
living. The failure to sustain the living standard makes the poor and under developed countries poor and
under developed.
3. Pre-dominance of Agriculture: Occupational distribution of population in India clearly reflects the
backwardness of theeconomy. One of the basis characteristics of an under developed economy is that
agriculture contributes a very large portion in the national income and a very high proportion of working
population is engaged in agriculture
4. Unemployment: There is larger unemployed and under employment is another important feature of
Indian economy. In under developed countries labor is an abundant factor. It is not possible to provide
gainful employment the entire population. Lack of job opportunities disguised unemployed is created in the
agriculture fields. There deficiency of capital formation.
5. Low Rate of Capital Formation: In backward economics like India, the rate of capital formation is also
low. capital formation mainly depends on the ability and willingness of the people save since the per capita
income is low and there is mal-distribution of income and wealth the ability of the people to save is very
low in under developed countries for which capital formation is very low .
6. Poor Technology: The lever of technology is a common factor in under developed economy. India
economy also suffers from this typical feature of technological backwardness. The techniques applied in
agriculture industries milling and other economic fields are primitive in nature.
7. Back ward Institutional and social frame work: The social and institutional frame work in under
developed countries like India is hopelessly backward, which is a strong obstacle to any change in the form
of production. Moreover religious institutions such as caste system, joint family universal marriage affects
the economic life of the people.
8. Under utilization of Resources: India is a poor land. So our people remain economically backwards for
the lack of utilization of resources of the country.
9. Price instability: Price instability is also a basis feature of Indian economy. In almost all the
underdeveloped countries like India there is continuous price instability. Shortage of essential
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commodities and gap between consumption aid productions increase the price persistently. Rising trend of
price creates a problem to maintain standard ofliving of the common people.
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A Textbook By Vishal Kashyap

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Framing of the Constitution

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Features of the Constitution of India

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Types of basic forms of social control:

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Informal Social Control

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Unit IV: Microeconomics

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Utility can be categoriesed by these two categories:

A Textbook By Vishal Kashyap

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*. Interest received net of interest paid;

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The important features of Indian economic:

A Textbook By Vishal Kashyap

A Textbook By Vishal Kashyap

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