RBSE Solutions for Class 11 Economics Chapter 19 Foreign Trade of India

Rajasthan Board RBSE Class 11 Economics Chapter 19 Foreign Trade of India

RBSE Class 11 Economics Chapter 19 Text book Questions

RBSE Class 11 Economics Chapter 19 Objective Type Questions

Question 1.
Which statement is correct in context to India’s foreign trade in 2013-14?
(a) Value of total exports was more than imports.
(b) Value of total imports was more than exports.
(c) Value of total exports was equal to imports.
(d) None of these
Answer:
(b) Value of total imports was more than exports.

Question 2.
The total value of Indian exports in 2013-14 (in Billion US dollars) was
(a) 314
(b) 450
(c) 135
(d)270
Answer:
(a) 314

Question 3.
Which of the following is the main item of India’s export at present?
(a) Electronic goods
(b) Pearls and precious stones
(c) Petroleum goods
(d) Non- electrical machinery
Answer:
(c) Petroleum goods

Question 4.
Which commodity group has the largest share in Indian exports at present?
(a) Agricultural products
(b) Mineral products
(c) Manufactured goods
(d) None of these
Answer:
(c) Petroleum goods

Question 5.
Which of the following nation group is India’s main import partner?
(a) OECD nations
(b) OPEC countries
(c) Eastern European countries
(d) Developing Nations
Answer:
(b) OPEC countries

Question 6.
At present, to which nation group does India make the highest exports?
(a) OECD nations
(b) Eastern European countries
(c) Developing Nations
(d) Organization of oil exporting countries
Answer:
(c) Developing Nations

Question 7.
The share of India in global exports in 2013-14 according to World Trade Organization was
(a) 0.8 per cent
(b) 1 per cent
(c) 1.7 per cent
(d) 2.5 per cent
Answer:
(c) 1.7 per cent

Question 8.
Which of the following was an export promotion scheme of India?
(a) Cash Compensatory Scheme
(b) Duty Drawback Scheme
(c) Import Replenishment Scheme
(d) All of these
Answer:
(d) All of these

RBSE Class 11 Economics Chapter 19 Very Short Answer Type Questions

Question 1.
Mention the Indian goods import, export and Trade Surplus in the year 2013-14.
Answer:
Export – 450200 (US Billion dollars).
Import – 314405 (US Billion dollars).
Trade Surplus – 135795 (US Million dollars).

Question 2.
Write the names of present five top export items (from India) in order of their value.
Answer:
The names of present five top export items (from India) in order of their value are :

1. Petroleum products.
2. Engineering products.
3. Jewels and jewellery.
4. Chemicals and related goods.
5. Stitched clothes.

Question 3.
Write the names of present five top import items (from India) in order of their value.
Answer:
The names of present five top import items (from India) in order of their value are-

1. Petroleum and lubricants.
2. Non-ferrous metals Gold and silver.
3. Electrical machinery, non-electrical machinery.
4. Pearls and precious jewels.
5. Food stuff and allied products (such as pulses, food grain, edible oil).

Question 4.
Write the names of any two major nation groups which are import partners of India.
Answer:
The names of two major nation groups which are import partners of India:

1. Developing Nations.
2. Organization of oil exporting countries (OPEC).

Question 5.
Write two main objectives of new trade policy (2015-20) of India.
Answer:
Two main objectives of new trade policy (2015-20) of India are :

1. Target has been set to increase the share of India in global exports from 2 per cent to 5 per cent.
2. To increase the present exports of 466 billion dollars to 900 billion dollars by 2019-20.

RBSE Class 11 Economics Chapter 19 Short Answer Type Questions

Question 1.
Explain the meaning of Cash Compensatory Scheme.
Answer:
Cash Compensatory Scheme is designed to compensate the exporters for unrelated indirect taxes and to provide resources for product development. This was initiated in 1996.

Question 2.
What is meant by Manufactured Goods Exports from India (MEIS) Scheme?
Answer:
Under Manufactured Goods Exports from India Scheme (MEIS), agricultural and rural industries will receive support from Special Economic Zones. Target has been set to increase the share of India in global exports from 2 per cent to 5 per cent. High-level support will be given to agricultural food stuff processing and packaging under manufactured goods export programme.

Question 3.
What is Export Promotion Capital Goods Scheme?
Answer:
EPCG is a zero duty scheme which allows the import of capital goods such as machinery for preproduction, production and post production of export items. Under the export promotion capital goods programme, duty free capital goods imports were allowed for production of engineering goods, electronic products, basic chemicals, textiles, plastics, handicrafts and leather goods.

Question 4.
Describe the names of major exports promotion schemes.
Answer:
Major exports promotion schemes are-

1. Cash Compensatory Scheme
2. Duty Drawback Scheme
3. Import Replenishment Scheme
4. Blanket Exchange Permit Scheme.

RBSE Class 11 Economics Chapter 19 Long Answer Type Questions

Question 1.
Describe the change in the composition of India’s goods in exports and imports.
Answer:
Composition of Exports- Before the implementation of five year plans, the major Indian export heads were jute, tea, cotton textiles, mica, manganese, and animal skins. During the plan period, the component of agricultural products and minerals in total export decreased and the component of manufactured goods increased. This shows that the manufacturing sector has grown rapidly in the economy. In 1960, the component of agriculture and allied products in total exports was 44.2 per cent, which decreased to 13.7 per cent in 2013-14. The contribution of ores and minerals in total export was 8.1 per cent in 1960-61, which decreased to 1.8 per cent in 2013-14. In the same way, the contribution of manufactured goods in total export was 45.3 per cent in 1960-61, which increased to 61.3 per cent in 2013-14.
Composition Of Indian Exports :

Goods	1960-61	1980-81	1990-91	2013-14
Engineering goods	3.4	12.33	11.9	19.8
Petroleum products (including coal)	1.1	0.4	2.9	20.6
Jewels and Jewellery	0.1	9.2	16.1	13.2
Chemicals and allied products	1.1	3.3	6.5	13.2
Readymade garments	0.1	8.2	12.8	4.8
Total export (in million dollars)	1346	8486	18143	314405

Source- Reserve Bank Of India, Handbook of statistics on Indian economy.

Major Indian exports have been shown as components of total export. Petroleum products were 1.1 per cent of total exports in 1960-61, which grew to 20.6 per cent of total exports in 2013-14. This is because of the petroleum refining capacity of India. Crude petroleum is exported after refining. The component of engineering goods in total export was 3.4 per cent in 1960-61, which increased to 19.8 per cent in 2013-14. The component of jewels and jewellery in total export was 0.1 per cent in 1960-61, which increased to 13.2 per cent in 2013-14. In the same way, the component of chemicals and allied products was also 13.2 per cent. In 1960-61, the component of jute and tea in total export was 21 per cent and 19.3 per cent respectively. At present, both have a component 0.5 per cent in total exports.

Composition of Imports :
At the time of Independence, India’s major import heads included machinery, oil, food grains, pulses, cotton, vehicles, iron goods equipment, chemicals, dyes, threads and cotton clothes. Due to the establishment of large scale industries and infrastructural industries on a large scale under the strategy adopted for industrial development in the second five year plan, there has been an increase in the import of equipment and machinery and the goods related to their maintenance.

Composition of Indian Imports :

Goods	1960-61	1980-81	1990-91	2013-14
Petroleum and lubricants	6.1	41.9	25	36.6
Non-Ferrous metals	4.2	3.8	2.5	8.6
Electronic goods, non electrical machinery	18.1	8.7	9.8	5.2
Pearls, precious stones	0.1	3.3	8.7	5.3
Total export (in Million dollars)	2353	15869	24075	450200

Structural changes in the major items bf import of India have been shown in the above table under which the share of petroleum oil and lubricants was 6.1% in 1960-61, which increased to 36.6% in 2013-14. At present, it is the major item of import of India. The share of non-ferrous metals (mainly gold and silver) in total imports was 4.2% in 1960-61, which increased to 8.6% in 2013-14. The share of electronic items and non-electrical machinery was 18.1 % in 1960-61, and it decreased to 5.2% in 2013-14. The total share of pearls and precious jewellary was 0.1% in total imports of 1960-61, which increased to 5.3% in 2013-14. The share of edible items in total imports was 16.1 % in 1960-61, which has become almost zero today. Import of capital goods was 31.7% in 1960-61, which declined to 12.1% of total imports in 2013-14.

Question 2.
Mention the trends of export and import of India.
Answer:
Till 1950-51, England and America were the major trading partners of India. 42% of total exports of India and 39.1% of total imports of India took place with these two countries. Trading partner countries are divided into 4 categories- a. Countries of economic cooperation organization (OECD) which include- European Union, US, Japan and Switzerland etc. b. Organization of oil exporting countries (OPEC) which include, United Arab Emirates, Saudi Arabia, Iran etc. c. Russia and other countries are included in Eastern European Countries group. D. Developing countries include China, Hong Kong, South Korea, Singapore, Malaysia etc.

Direction of Indian Exports :
The changes that have taken place in this regard have been depicted by the table given below :

Group of Countries	1960-61	1990-91	2012-13
OECD countries	66.1	53.5	34.2
OPEC countries	4.1	5.6	20.8
Eastern Europe	7.0	17.9	1.3
Developing Nations	14.9	17.1	41.5
Other Countries	8.0	2.9	3.5

Source – Reserve Bank Of India, Handbook of Statistics on Indian Economy

1. The share of Indian export with OECD countries has continuously decreased. OECD countries were India’s major export partners till 1960-61.
2. The share of oil-exporting countries in India’s exports was 4.1 per cent in 1960-61, was 5.6 per cent in 1990-91, and increased rapidly after that to 20.8 percent in 2012-13.
3. The share of Eastern European countries in total Indian export was 7.0 per cent in 1960-61, which decreased to 1.3 per cent in 2012-13. Russia is the major partner in Eastern Europe.
4. The share of Indian export to developing countries was 14.9 per cent in 1960-61, which has rapidly increased to 41.5 per cent in 2012-13.
5. In the year 2013-14, the share of European countries was 18.6 per cent in Indian exports. In the same year, the contribution of American continent in Indian exports was 17.5 per cent.
6. The share of Indian exports to Asian countries was 49.4 per cent. The Asian countries that received the most exports from India included- United Arab Emirates, China, Singapore, Hong Kong, Saudi Arabia, Iran and Japan. The countries to which India made exports in 2013-14 were- USA (12.5 per cent), United Arab emirates (9.7 per cent), China (4.7 per cent), Hong Kong (4 per cent), Singapore (4 per cent).

Trends of Indian imports :
In context to the 4 nation groups, an important change occurred in the trend of Indian imports, which has been depicted through the table given below :
Direction of Indian Exports (in Per cent)

Group of Countries	1960-61	1990-91	2012-13
OECD countries	78.0	54.0	27.8
OPEC countries	.4.6	16.3	38.6
Eastern Europe	3.4	7.8	1.8
Developing Nations	11.8	18.6	31.33
Other Countries	2.2	0.0	0.5

Source- Reserve Bank Of India, Handbook of Statistics on Indian Economy

1. In the year 1960-61, the share of total Indian imports to OECD countries was 78 per cent, which declined to 27.8 per cent in 2012-13.
2. The share of OPEC countries in total Indian imports was 4.6 per cent in 1960-61, which increased to 38.6 per cent in 2012-13.
3. The share of Eastern European countries in Indian imports was 3.4 per cent in 1960-61, which decreased to 1.8 per cent in 2012-13.
4. The main partner countries of India from Europe in 2013-14 were Germany, Belgium, UK and Switzerland.
5. The share of American continent in Indian imports was 8.1 per cent in 2013-14. India’s main import partners in African continent are South Africa, Nigeria, Angola and Botswana.
6. The share of American continent in Indian exports was 12.8 per cent in 2013-14. The major trade partner countries of India from this continent include- USA and Venezuela.

Main import partners of India in imports have been China, Saudi Arabia, United Arab Emirates, Iraq, Kuwait, Indonesia, Qatar, South Korea and Japan. In 2013-14, the main import partners were China, Saudi Arabia, United Arab Emirates, United States of America and Iraq. The share in total imports of India of these countries were 11.3 per cent, 8.1 per cent, 6.4 per cent, 5 per cent, and 4.1 per cent respectively.

Question 3.
Write an article on tendencies of India’s foreign trade in present time.
Answer:
Current trend of India’s foreign trade :
The economic reforms dictated by liberalization and globalization have influenced Indian exports and imports extensively. Import duties were reduced after the establishment of the World Trade Organization. Attempts were made to liberalize imports. The trade interaction between Indian and global economy has been influenced in a major way in context to size and shape. Indian export and import has witnessed a rapid growth in recent years.

• India’s Foreign Trade increased in Size :
  Indian’s foreign trade in the year 2004-05 was 195.1 billion US dollars which grew up to 764 billion US dollars in 2013-14. India’s position in the world’s leading importing countries was 23rd in 2004, which increased to 12th in 2013. India’s position in the world’s leading exporting countries was 23rd in 2004, which increased to 19^th in 2013.
• Increase in Exports :
  Indian exports were worth rupees 3,75,340 crores in 2004-05, which increased to rupees 1,90,5011 crores in 2013-14. In context to Gross Domestic Ratio, Indian exports increased from 12.1% in 2004-05 to 17.0% in 2013-14. Petroleum products, jewels, precious and semi-precious stones etc. are the major items of exports of India.
• Increase in Imports :
  Imports have rapidly increased after 2004-05. In 2004-05, the value of imports was 5,01,065 crore rupees in 2004-05, which increased to 27,15,434 crore rupees in 2013-14. Petroleum oil and lubricants, gold, jewelry, precious and semi-precious gems are the major items of import of India.
• Increase in Trade deficit :
  The trade deficit in 2004-05 was rupees 1,25,725 crore, which increased to rupees 10,34,844 crore in 2012-13. In the years 2009-10 and 2013-14, the trade deficit was less as compared to the previous years. Apart from this, trade deficit has increased each year as compared to previous years.
• Change in direction of trade :
  Between years 2004-05 and 2013-14, a significant change in the direction of trade in India was observed. There has been a diversification in the Indian foreign trade market. The benefit of this market diversification is that the annual fluctuation was eliminated and assistance has been received in tackling various crises such as recession.

Question 4.
Describe the main provisions of new trade policy (2015-20) of India.
Answer:
The new trade policy is in conformity with the “Make In India”, “Digital India” and “Skill India” programmes of the honourable Prime Minister.

1. The Service Export from India Scheme (SEIS) is for increase in export of specialized services. Both these programmes substituted many earlier programmes. The conditions, abilities and uses were separate. The benefits of both these programmes will also be available in Special Economic Zone. These programmes will also aid the e-commerce of handicrafts, handloom, books, etc.
2. Under Manufactured Goods Exports from India Scheme (MEIS), agricultural and rural industries will receive support from Special Economic Zone. Target has been set to increase the share of India in global exports from 2 per cent to 5 per cent. High level support will be provided to agricultural food stuff processing and packaging under manufactured goods export programme.
3. The benefit of Service Export from India Scheme (SEIS) will be provided to unorganised service providers located in India rather than to the service providers.
4. The goods in whose export, India has traditional expertise, will receive a boost through branding campaigns that will be organized.
5. To promote domestic manufacturing, the export compulsion has been reduced by 25 per cent.
6. Duty Credit Script would be freely transferable and it can be used to pay custom duty, excise duty and service tax.
7. Under Export Promotion Capital Goods Scheme (EPCG), the export compulsion for domestic realization has been reduced to 75 per cent.
8. There will be an online process for digital signature.
9. The valid period for export authorization was increased from 12 months to 24 months.
10. High-level support will be provided for export of defence equipment, agricultural products and eco-friendly products.

Question 5.
What does the concept of Swadeshi imply? Write a note.
Answer:
Concept of Swadeshi:
These days, the general meaning of word Swadeshi is taken to be indigenous products, that is, the consumption of products produced in the country is Swadeshi. When the distance between countries is decreasing in this age of globalization and contact between countries is increasing, the use of Swadeshi in this implication is to limit its meaning.

The feeling of Swadeshi implies our notion which teaches us to leave the distant and utilizing and serving our nearby region only. For example, it would be said about religion that should adhere to the religion inherited from the ancestors. In the sphere of economy, one should use commodities made by the neighbours only, removing the shortcomings of these industries and making them more complete and capable. The meaning of “Swadeshi” is a tendency, which is revealed in all aspects of life with a feeling of “self’. It is not only a constant tendency; rather it integrates the challenge of change favourably with the conditions of country and society. It is not a reaction against the blind following of the west, rather it alerts us towards blindly following it.

Pandit Deendayal Upadhyay has said that along with the knowledge and science of the west, the lifestyle, speech, food etc. customs also came into the country. We have to decide if the custom is good or bad. If it is not appropriate, then it would be best to abandon its allure. Maharishi Arvind had said that the implication of Swadeshi is about the identity of a nation’s dignity and its willpower. The readiness of society to make the sacrifices for the country is reflected through its concept of Swadeshi.

According to Gopal Krishna Gokhale, the Swadeshi philosophy teaches sacrifice for the motherland. The country becomes prosperous and the feeling of brotherhood enhances in the country by this. This thought of Swadeshi is prevalent in India since the very ancient time.

India made self-reliance an objective in the five years plans, but its implication was in the form of getting freedom from foreign assistance. Under this, the country has today become completely self-reliant in food grains and machinery, which it used to import earlier. Global influences are increasing rapidly in this age of globalization, for which global institutions propagated by the west have contributed greatly. To protect the economy and social system of the country from these influences, it is necessary that Swadeshi should be embraced.

RBSE Class 11 Economics Chapter 19 Other Important Questions

RBSE Class 11 Economics Chapter 19 Objective Type Questions

Question 1.
If the value of exports is more than the value of imports, than the trade balance is-
(a) Negative
(b) Positive
(c) Neither Negative nor Positive
(d) None of these
Answer:
(b) Positive

Question 2.
In the year 1950-51, the value of commodity exports of India stood at (billion US dollars)
(a) 1.27
(b) 8.5
(c) 44.6
(d) 314.4
Answer:
(a) 1.27

Question 3.
The average size of seventh five year plan’s trade deficit was (billion US dollars):
(a) 5.98
(b) 5.7
(c) 3.45
(d)8.41
Answer:
(b) 5.7

Question 4.
Basic Industries were established during the:
(a) Fifth Five Year Plan
(b) First Five Year Plan
(c) Second Five Year Plan
(d) Seventh Five Year Plan
Answer:
(c) Second Five Year Plan

Question 5.
Before Independence, the main foreign trade of India was with:
(a) Japan
(b) China
(c) Switzerland
(d) Britain
Answer:
(d) Britain

Question 6.
Organization of oil exporting countries (OPEC) does not include:
(a) United Arab Emirates
(b) America
(c) Saudi Arabia
(d) Iran
Answer:
(b) America

Question 7.
India’s position in the world’s leading importing countries in 2004 was:
(a) 23rd
(b) 12th
(0)19th
(d) None of these
Answer:
(a) 23rd

Question 8.
Import liberalisation was adopted due to import restriction and import limitation:
(a) In the decade of 1950
(b) In the decade of 1970
(c) In the decade of 1980
(d) None of these
Answer:
(c) In the decade of 1980

Question 9.
Major exports promotion scheme is/are:
(a) Cash Compensatory Scheme
(b) Duty Drawback Scheme
(c) Blanket Exchange Permit Scheme
(d) All of the above
Answer:
(d) All of the above

Question 10.
“The implication of Swadeshi is about the identity of a nations’ dignity and its will power”. This statement was made by:
(a) Gopal Krishna Gokhale
(b) Maharishi Arvind
(c) Pandit Deendayal Upadhyay
(d) None of these
Answer:
(b) Maharishi Arvind

RBSE Class 11 Economics Chapter 19 Very Short Answer Type Questions

Question 1.
State two advantages of foreign trade.
Answer:

1. Large scale production.
2. Benefit of division of labour.

Question 2.
According to Adam Smith, a country should export what kind of commodity?
Answer:
Goods with Absolute non-relative profit.

Question 3.
According to Richards, the country should export what type of commodity?
Answer:
Goods with Comparative profit.

Question 4.
When does trade balance become negative?
Answer:
If the value of imports is more than the value of exports, the trade balance becomes negative.

Question 5.
Why was jute imported at the time of independence?
Answer:
Due to the partition and country’s requirement of food grains, jute was imported at the time of independence.

Question 6.
After second five year plan, why there was increase in the import of capital equipments, machinery and technology?
Answer:
Due to the development of large scale industries and to encourage industrial development.

Question 7.
Which products are mainly exported by the developing countries?
Answer:
Raw materials, minerals, and agricultural products.

Question 8.
Before the start of the five year plans in India, which were the items of export of India?
Answer:
Jute, tea, cotton clothes, mica, manganese and hide.

Question 9.
How much was the component of agriculture and allied products in total exports of the country in the year 1960?
Answer:
44.2 per cent.

Question 10.
What was the percentage component of edible oil in total imports in 2012-13 ?
Answer:
2.1 per cent.

Question 11.
Which items are included under capitalist goods in the items of import of the country? ,
Answer:
Electrical machinery, other machinery and equipments, transportation equipment, electronic goods, handicrafts, and projected goods.

Question 12.
Before independence, India was the colony of which nation?
Answer:
Britain.

Question 13.
Which countries are included in the Countries of Economic Cooperation Organization (OECD)?
Answer:
European Union, US, Japan and Switzerland etc.

Question 14.
Which countries are included in the Organization of Oil Exporting Countries (OPEC)?
Answer:
United Arab Emirates, Saudi Arabia, Iran etc.

Question 15.
Which committees recommended import liberalization and export promotion?
Answer:
The Alexander Committee in 1978, the Tandon Committee in 1982 and the Hussain Committee in 1984.

Question 16.
Which corporation is working to provide export credit insurance and guarantee to the exporters?
Answer:
Indian Export Credit and Guarantee Corporation.

Question 17.
Write the names of two government agencies established for export promotion.
Answer:
Two government agencies established for export promotion:

1. State Trading Corporation.
2. Mineral and Metal Trading Corporation.

Question 18.
Which products are exported by State Trading Corporation, a government enterprise?
Answer:
Cloth, manufactured goods, coffee, cement and salt etc.

Question 19.
Write the names of any two schemes initiated for export promotion.
Answer:
Schemes initiated for promoting export are:

1. Cash Drawback Scheme.
2. Duty Drawback Scheme.

Question 20.
Cash Compensatory Subsidy Scheme designed to compensate the exporters was initiated in which year?
Answer:
1996.

Question 21.
Who is the author of the book “Economic History of India”?
Answer:
R.C.Dutt.

Question 22.
According to Adam Smith, a country should export-import which type of commodity?
Answer:
According to Adam Smith, a country should export a commodity of absolute non-relative profit and import a commodity of absolute non-relative loss.

Question 23.
According to Richardo, the country should export-import which type of commodity?
Answer:
According to Richardo, the country should export a commodity of comparative profit and import a commodity of comparative loss.

Question 24.
What does it mean by the trade balance being negative and positive?
Answer:
If the value of exports is more than the value of imports, then the trade balance is positive, and if the value of imports is more than the value of exports, the trade balance is negative.

Question 25.
State two reasons for increase in deficit in trade balance in India.
Answer:
Two reasons for increase in deficit in trade balance in India are-

1. Growth in the prices of edible oil and reduction in import duty.
2. Growth in import due to the policies of import liberalization.

Question 26.
What do you mean by trade structure?
Answer:
Trade structure refers to foreign commodity structure. It refers to the proportion of a country’s import and export commodities in the total import and export trade in particular time period.

Question 27.
Why raw materials, minerals, and agricultural products are only exported by developing countries?
Answer:
Due to backwardness and inferior manufacturing structure, raw materials, minerals, and agricultural products are only exported by developing countries.

Question 28.
What were the products exported in India at the time of independence?
Answer:
At the time of independence, the products exported included-machinery, oil, food grains, pulses, cotton, transportation, goods made of iron, equipments, medicines, colours, cotton and cotton cloth, paper, machines etc.

Question 29.
Into how many divisions are business partner countries divided?
Answer:
Into four divisions :

1. OECD- Organization for Economic Co-operation and Development
2. OPEC- Organization of Petroleum Exporting Countries
3. Eastern European Countries
4. Developing Countries.

Question 30.
What do you mean by import restriction?
Answer:
Import restriction refers to the methods employed to control the volume or value of goods coming into a country, usually to maintain the exchange rate of the country’s currency.

Question 31.
What do you mean by import replacement policy?
Answer:
Import replacement policy means the replacement of foreign imports with domestic products, so that the country may not have to import them, and foreign currency can be saved, and this also promotes self-sufficiency.

Question 32.
Into how many phases was the Import replacement policy implemented?
Answer:
Import replacement policy was implemented in 3 phases :

1. Import replacement of consumption goods.
2. Import replacement of capital goods.
3. Import replacement of technology.

Question 33.
What difference took place in the production structure of the country due to the Import replacement policy?
Answer:
Due to the Import replacement policy, emphasis was laid upon the production of goods like metals, machines and vehicles within the country, and due to higher cost of production, the competitive capacity of industries became weak.

Question 34.
Why was import liberalization adopted in the decade of 1980?
Answer:
Due to the limitations of import and import restrictions, liberalization was adopted in the decade of 1980. The quantitative limits on imports were demolished.

Question 35.
State two efforts made for import liberalization.
Answer:
Two efforts made for import liberalization are-

1. Exporters earning foreign currency of more than 10 crore rupees in an year were given permission for imports for 1 year through Advance Licensing Policy.
2. The pre-conditions of imports through government agencies were abolished.

Question 36.
What do you mean by devaluation?
Answer:
The reduction in the official value of a currency in relation to other currencies. Here, the value of exports is more than the value of imports.

Question 37.
What is Indian Export Promotion Organization?
Answer:
This organization works to coordinate between various commodities, their export, then- markets and customer (buyers). It organizes fairs and exhibitions abroad to encourage Indian exports.

Question 38.
Name the various government agencies that are established for exports. Also explain what all products are exported through them.
Answer:
State trading Corporations and Minerals and Metals Trading Corporation are agencies established to promote exports. State trading Corporations export cement, salt etc. while Minerals and Metals Trading Corporation exports minerals and metals.

Question 39.
What is Import Replenishment Scheme?
Answer:
This progamme is a scheme for easy availability of imports which are necessary for exports. Under this progamme, exporters are permitted imports of those items whose import is prohibited. Under this scheme, exporters can export those items which are not available in the country.

Question 40.
What is Blanket Exchange Permit Scheme?
Answer:
This scheme was initiated in 1987. Large export organizations like export houses and all forms of trading houses are given the facility of blanker exchange permit, under which lumpsum foreign exchange is provided to meet expenses done abroad.

Question 41.
What measures were taken for process simplification in the import-export policy of 2004-09?
Answer:
In the import-export policy of 2004-09, following measures were taken for process simplification :

1. The number of forms to be filled up by the exporters was reduced.
2. Export products were exempted from service tax.
3. Exporters having a turnover of 5 crores per annum were exempted from bank guarantee.
4. Permission was given to import of old machines.

Question 42.
State the short term and long term objectives of foreign trade policy of 2009-14.
OR
State the objectives of foreign trade policy of 2009-14.
Answer:
The objective of this policy was to double the exports of commodities and services by the year 2014. Among the short term objectives were-curb the tendency of decline in exports, provide additional assistance to export sectors affected by recession to re-establish export growth. The long term objectives of the policy were- increasing India’s share in global trade by 100 per cent (from 1.64 per cent in 2008 to 3.28 per cent in 2020).

Question 43.
State any two provisions of foreign trade policy of 2009-14.
Answer:
Two provisions of foreign trade policy of 2009-14 are :

1. Single window programme was initiated for exports of perishable agricultural products.
2. Exporters were permitted to carry stock up to 5 lakh dollars along with them to participate in exhibitions abroad.

Question 44.
State two suggestions for export promotion.
Answer:
Two suggestions for export promotion are :

1. There is a need to improve the infrastructure such as roads, rail transport, water transport, power etc.
2. Arrangement for better credit and import duty policy should be made for encouraging exports.

Question 45.
Explain “Swadeshi philosophy” according to Gopal Krishna Gokhale.
Answer:
According to Gopal Krishna Gokhale, the Swadeshi philosophy teaches sacrifice for the motherland. The country becomes prosperous and the feeling of brotherhood is enhanced in the country by this. This thought of Swadeshi is prevalent in India since the very ancient time.

RBSE Class 11 Economics Chapter 19 Short Answer Type Questions

Question 1.
Manufacturing sector has grown vividly in the Indian economy. Explain.
Answer:
Before the implementation of five year plans, the major Indian export heads were jute, tea, cotton textiles, mica, manganese, and animal hide. During plan period, the component of agricultural products and minerals in total export decreased and the component of manufactured goods increased. This shows that the manufacturing sector has grown rapidly in the economy. In 1960, the component of agriculture and allied products in total exports was 44.2 per cent, which decreased to 13.7 per cent in 2013-14. The contribution of ores and minerals in total export was 8.1 per cent in 1960-61, which decreased to 1.8 per cent in 2013-14. In the same way, the contribution of manufactured goods in total export was 45.3 per cent in 1960-61, which increased to 61.3 per cent in 2013-14.

Question 2.
State the items of export of India during 2013-14.
Answer:
The items of export of India during 2013-14 were :

1. Agricultural and allied products :
   Tea, coffee, food grains, spices, cashew, fruit and vegetables, seafood and cotton etc.
2. Manufacturing goods :
   Leather and leather products, jewels and jewellery, medicine and chemicals, metal products, machinery and equipments, transportation equipment, electronic goods, handicrafts, ready-made garments etc.

Question 3.
The trading partner countries are divided into how many categories?
Answer:
Trading partner countries are divided into 4 categories :

1. Countries of Economic Cooperation Organization (OECD) which include- European Union, US, Japan and Switzerland etc.
2. Organization of oil exporting countries (OPEC) which include United Arab Emirates, Saudi Arabia, Iran etc.
3. Russia and other countries are included in Eastern European Countries group.
4. Developing Countries- It includes China, Hong Kong, South Korea, Singapore, Malaysia etc.

Question 4.
Explain the state-wise export structure of India in the year 2013-14.
Answer:

State	Value (in Million US Dollars) 2013-14	Share (2013-14)
Gujarat	73498	23.5
Maharasthra	71661	22.9
Tamil Nadu	26937	8.6
Karnataka	17821	5.7
Andhra Pradesh	15353	4.9
Uttar Pradesh	13309	4.3
Haryana	10657	3.4
West Bengal	10496	3.4
Delhi	9329	3.0
Punjab	7063	2.3
Rajasthan	5915	1.9
Madhya Pradesh	4374	1.4
Kerala	4285	1.4
Odisha	4005	1.3
Total Exports	313610	100

Source : Economic Survey, Finance Ministry, Government of India, 2013-14.

Question 5.
During the second five year plan, why total exports were divided into 3 categories?
Answer:
During the second five year plan, India began an extensive industrialization programme. For this, capital machinery and technology was to be imported. Foreign currency was limited. Hence, total import were classified into 3 categories in 1956-57. In the first category, those items were included the import of which was prohibited. These items could not be imported. The second category included items whose import could only be done through government agencies. Third category included those items that could only be imported through Open General License.

Question 6.
Explain Import Replacement Scheme.
Answer:
Import replacement policy means the replacement of foreign imports with the domestic products, so that we don’t have to import them and foreign currency can be saved, and this also promotes self-sufficiency.

Question 7.
What is Duty Drawback Scheme?
Answer:
Manufacturers who are unable to avail any of these schemes can avail ‘duty drawback’. Under this, the excise duty and customs duty paid on inputs and service tax paid on input services is given back to the exporter of finished products by the way of ‘duty drawback’.

Question 8.
Why were Agricultural Export Zones established in the year 2001?
Answer:
Agricultural export zones were established in 2001 to promote agricultural exports. Under this, it was arranged to identify those agricultural products which could be exported and special attention was given on their production. The entire process from the initial stage of agricultural products to market distribution was integrated in the Agricultural Export Zone.

Question 9.
State any five provisions of Foreign trade policy of 2015-20.
Answer:

1. To provide domestic manufacturing, the export compulsion was reduced by 25 per cent.
2. Under Export Promotion Capital goods Scheme (EPCG), the export compulsion for domestic realization was reduced to 75 per cent.
3. There would be an online process for digital signature.
4. The valid period for export authorization was increased from 12 months to 24 months.
5. Duty Credit Script will be freely transferable and it can be used to pay custom duty, excise duty and service tax.

RBSE Class 11 Economics Chapter 19 Long Answer Type Questions

Question 1.
What do you mean by liberalization? Under this, what efforts were made towards the direction of imports?
Answer:
Liberalization :
Liberalization is a general term for any process whereby a state lifts restrictions from various sectors of the economy.
Efforts for import Liberalization :

1. For the development of re-exporting and to provide the exporters raw materials without any interruption, rebate in import duty was given.
2. Exporters earning foreign currency of more than 10 crore rupees were given permission for imports for 1 year through Advance Licensing Policy.
3. It is necessary that the supply of capital goods and raw materials be ensured for industrialization. For their import, more items were included in the Open General License list, so that the production would not be affected. Apart from open general license imports, they were permitted import of raw materials.
4. Provision of import facilities to trading houses, star trading houses, super star trading houses. Exporters who had exporterd items worth 12.50 crore rupees annually in the last 3 years were rated as export houses, those whose export in the last 3 years was a minimum of 62.50 crores, annually, were rated as trading houses, those exporters whose export in the last 3 years was a minimum of 312.50 crores were rated as star trading houses and the exporters’ whose export in the last 3 years was a minimum of 925 crore mpees were rated as super star trading houses. They were provided import facilities.
5. In order to make Indian products competitive in the international market, improvements were needed in technology. To make imports of technology and specialized services easier and simpler, a technology development fund was established.
6. The pre-conditions of imports through government agencies were abolished. The list of items whose imports required processing by government agencies was shortened, so that, if needed, imports could be done without the intervention of these agencies.

Question 2.
Explain the schemes initiated for Import promotion.
OR
Explain the following terms :
1. Cash Compensatory Scheme
2. Duty Drawback Scheme
3. Import Replenishment Scheme
4. Blanket Exchange permit Scheme
5. Special Economic Zone
Answer:
Following are the schemes initiated for export promotion :

1. Cash Compensatory Scheme :
   Cash compensatory scheme was designed to compensate the exporters for unrelated indirect taxes and to provide resources for product development. This was initiated in 1996.
2. Duty Drawback Scheme :
   Manufacturers who are unable to avail any of these schemes can avail ‘duty drawback’. Under this, the excise duty and customs duty paid on inputs and service tax paid on input services is given back to the exporter of finished products by way of‘duty drawback’.
3. Import Replenishment Scheme :
   This progamme is for easy availability of imports which are necessary for exports. Under this progamme, exporters are permitted imports of those items the import of which prohibited. Under this scheme, exporters can export those items which are not available in the country.
4. Blanket Exchange Permit Scheme :
   This scheme was initiated in 1987. Large export organizations like export houses and all forms of trading houses are given the facility of blanket exchange permit, under which lumpsum foreign exchange is provided to meet expenses made abroad.
5. Special Economic Zone :
   A Special Economic Zone (SEZ) is an area in which business
   and trade laws are different from the rest of the country. SEZs are located within a country’s national borders, and their aims include: increased trade, increased investment, job creation and effective administration. .

Question 3.
State the objectives and provisions of the foreign trade policy of 2009-14.
Answer:
The objective of this policy was to double the exports of commodities and services by the year 2014. Among the short term objectives were – curb the tendency of decline in exports, provide additional assistance to export sectors affected by recession to re-establish export growth. The long term objectives of the policy were- increasing India’s share in global trade by 100 per cent (from 1.64 per cent in 2008 to 3.28 per cent in 2020).

Its provisions are :

1. 26 new markets were included in the focus market programme. Out of these, 16 are in Latin America and 10 in Asia Oceania.
2. Focus, market incentive was increased to 3 per cent and focus product programme incentive was increased to 2 per cent.
3. Export oriented units were permitted to sell upto 90 per cent of their production in the domestic duty sector.
4. Under the export promotion capital goods programme, duty free capital goods imports were allowed for production of engineering goods, electronic products, basic chemicals, textiles, plastics, handicrafts and leather goods.
5. Use of electronic mediums, freedom to carry imported items from ports to production sites and arrangement of disposal of manufacturing waste after payment of manufacturing tax was facilitated.
6. An inter-departmental committee was set up with a point of view to provide dollar credit to exporters.
7. Exporters were permitted to carry stock upto 5 lakh dollars along with them to participate in exhibitions abroad.
8. Single window programme was initiated for exports of perishable agricultural products.

Question 4.
Which efforts need to be made to increase exports of India?
OR
Suggest the ways for export promotion in India.
Answer:
Suggestions for export promotion :
On one hand, less demand of imported goods from developed countries, rapid development of the manufacturer capability of China, political instability in foreign lands (Iran and Middle East) and growing concern about climate change, etc. are the major present challenges in context with India’s growth in export. On the other hand, the paper work for exports in India is still very cumbersome, which delays export. In order to promote exports, India is expected to make the following efforts :

1. Need for construction of better infrastructure. There is a need to improve the infrastructure such as roads, rail transport, water transport, power etc. This would speed up import and export, reduce processing time and the costs also will be reduced.
2. The availability of inputs to export industries should be facilitated. Raw materials, intermediate products, labour and capital inputs should be supplied in time and at lower cost. Interest rate on capital should be less in India, as it is in other developing countries.
3. We should search for new markets for Indian products. It i s not appropriate that our exports depend upon merely a few countries. Economic crisis, such as recession, bears an extensively adverse effect on exports in such countries. Indian exports need to be diversified by identifying new markets, so that exports could grow and the year to year uncertainty could be lessened.
4. Developed countries should not take support of trade restrictions since they are adopting a protectionist attitude towards the export of developing countries. The conflict disposal system of World Trade Organization could also not stop this trend. Developed countries should stop these protectionist measures.
5. Arrangement for better credit and import duty policies should be made for encouraging the exporters. Tax reforms should be implemented speedily in the country.
6. It is important to pay more attention on agricultural production and production of the manufacturing sector should be included in the country’s exports and the domestic consumption of these goods should be controlled so that maximum export of these goods may be done.

RBSE Solutions for Class 11 Economics