Industrial Sector (VSAQs)
Economics-2 | 6. Industrial Sector – VSAQs:
Welcome to VSAQs in Chapter 6: Industrial Sector. This page covers the most significant FAQs for Very Short Answer Questions. Each answer is provided in simple English and follows the exam format. This will help you focus on essential topics and aim for top marks in your final exams.
VSAQ-1: Index of Industrial Production
The Index of Industrial Production (IIP) is like a scorecard that tells us how busy our factories and industries are. It measures how much things like cars, clothes, and gadgets are being made in a certain period and compares it to a past period. For example, if more cars and clothes are being produced now than last year, the IIP will show growth. This helps us understand if our industries are doing well or not.
VSAQ-2: Extractive Industry
The extractive industry is all about taking natural resources from the earth, like digging up coal, drilling for oil, or cutting down trees. Think of it like gathering materials you need to build something. For example, to build a house, you need wood from trees (timber) and iron from the ground (mining). This industry provides the raw materials for many things we use every day, like fuel for cars or wood for furniture.
VSAQ-3: Liberalization
Liberalization means making it easier for businesses to grow by removing strict rules and regulations. Imagine if your favorite game had too many rules, making it hard to play. By removing some unnecessary rules, the game becomes more fun and easier to play. In the same way, liberalization helps businesses operate more freely, which can lead to more jobs and better products.
VSAQ-4: Industrial Policy Resolution, 1956
The Industrial Policy Resolution of 1956 was like a new set of guidelines for how industries should grow in India. The government wanted to make sure that important industries were managed well to benefit everyone. For example, instead of letting only a few people control big industries like steel or energy, the government stepped in to ensure these industries grew in a way that helped the whole country, especially the poorer regions.
VSAQ-5: Make in India
Make in India is a program that encourages companies to manufacture their products in India rather than in other countries. Think of it like this: instead of buying toys made in another country, what if those toys were made right here in India? It would create jobs, boost the economy, and make India stronger in producing goods.
VSAQ-6: Industrial Finance
Industrial finance is the money that factories and industries need to keep running. It’s like the fuel for a car—without it, the car won’t move. Industries need this money to buy materials, pay workers, and keep machines working. For example, a factory making biscuits needs money to buy ingredients, pay bakers, and maintain ovens. Without industrial finance, none of this would be possible.
VSAQ-7: Major Objectives of Industrial Policy Resolution, 1991
The Industrial Policy Resolution of 1991 had several key goals. It wanted to build on the progress India had already made, fix any problems, and promote steady, sustainable growth. One big aim was to make Indian businesses strong enough to compete globally. To do this, the policy focused on liberalizing the economy, which means reducing government control and allowing more freedom for businesses.
However, there’s some criticism too. Some people feel that the policy mainly benefited large companies while smaller businesses and local communities were left behind. Others argue that it led to social issues, like increased inequality. Even though the policy was a big step forward, critics say that continuous changes and improvements are still needed.
VSAQ-8: Privatization
Privatization is when the government decides to hand over certain businesses or services to private companies. Imagine if a government-owned company that makes buses is sold to a private firm. This shift can bring in more competition, which often leads to better services and more jobs. However, it’s important to manage this carefully so that the public still gets fair access to essential services.
VSAQ-9: Globalization
Globalization is the process of connecting a country’s economy with the rest of the world. It means that goods, services, and ideas flow more easily across borders. For example, because of globalization, a smartphone made in one country can be sold in many others, or a fashion trend from one part of the world can quickly become popular everywhere. This integration helps countries trade more easily, share technology, and grow together, but it also means they have to compete on a global scale.
VSAQ-10: Global Market
The global market refers to the idea that the economy of one country is closely connected to the economies of other countries. For example, if India produces excellent software, it can be sold all over the world, not just in India. The global market allows products, services, and even ideas to move freely across countries. It also means that businesses in one country have to compete with businesses from all over the world. This competition can lead to better products and lower prices for consumers.