NCERT Economics Class 10 Notes
NCERT Economics Class 10 Notes
NCERT Economics Class 10 Notes
CLASS 10th
INDEX
TOPICS PAGES
1) DEVELOPMENT 02-03
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CHAPTER 1
DEVELOPMENT
Development is a process that creates growth, progress, positive change or the
addition of physical, economic, environmental, social and demographic components.
Income:
People want more income. Money, or material things that one can buy with it, is one
factor on which our life depends. However, the quality of our life also depends on non-
material things such as equal treatment, freedom, security and respect for others. For
development, people look at a mix of goals. The developmental goals are not only
about better income but also about other important things in life.
National Development
National development is the capacity of the country to raise the standard of living of
its residence. It can be achieved by providing individuals with basic livelihood
requirements and supplying them with employment, etc.
Different persons could have different as well as conflicting notions of a country’s
development.
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In World Development Reports, per capita income is used in classifying countries.
1. Countries with per capita income of US$ 12,056 per annum and above in 2017, are called rich
countries.
2. Countries with per capita income of US$ 955 or less are called low-income countries. Eg: India.
Sustainability of Development:
Sustainable development is defined as development that meets the needs of the present, without
compromising the ability of future generations. Scientists have been warning that the present type and
levels of development are not sustainable. Some of the examples are:
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CHAPTER 2
SECTORS OF INDIAN ECONOMY
SECTORS OF
ECONOMY
The secondary sector covers activities in which natural products are changed into
other forms through ways of manufacturing. It is the next step after primary. Some
manufacturing processes are required here. It is also called the industrial sector. For
example, using cotton fibre from the plant, we spin yarn and weave cloth. Using
sugarcane as raw material, we make sugar or gur.
Tertiary sector includes activities that help in the development of the primary and
secondary sectors. These activities, by themselves, do not produce a good but they
are an aid or support for the production process. It is also called the service sector.
Example: Teachers, doctors, washermen, barbers, cobblers, lawyers, call centres,
software companies, etc.
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Comparing the 3 Sectors
The value of final goods and services produced in each sector during a particular year
provides the total production of the sector for that year. The sum of production in the
three sectors gives Gross Domestic Product (GDP) of a country. GDP is the value of
all final goods and services produced within a country during a particular year. It
shows how big the economy is. In India, the task of measuring GDP is undertaken by
a central government ministry.
The graph below shows the production of goods and services in the three sectors:
In the year 2013-14, the tertiary sector emerged as the largest producing sector in India,
replacing the primary sector. The tertiary sector has become important in India because of
the following reasons:
1. Services such as hospitals, educational institutions, post and telegraph services, police
stations, courts, village administrative offices, municipal corporations, defence, transport,
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banks, insurance companies, etc. are considered as basic services and are necessary for
all people.
2. The development of agriculture and industry leads to the development of services such as
transport, trade, storage, etc.
3. With the rise in the income of people, they start demanding more services like eating out,
tourism, shopping, private hospitals, private schools, professional training, etc.
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How to Protect Workers in Unorganised Sector:
There is a need for protection and support of the workers in the unorganised sector. Here are a few points
which will help in doing so.
1. The government can fix the minimum wages rate and working hours.
2. The government can provide cheap loans to self-employed people.
3. Government can provide cheap and affordable basic services like education, health, food to these
workers.
4. The government can frame new laws which can provide provision for overtime, paid leave, leave
due to sickness, etc.
Responsibilities of Government:
1. Government raises money through taxes and other ways to meet expenses on the
services rendered by it.
2. Governments have to undertake heavy spending such as the construction of roads,
bridges, railways, harbours, generating electricity, providing irrigation through dams,
etc. Also, it has to ensure that these facilities are available for everyone.
3. There are some activities, which the government has to support to encourage the
private sector to continue their production or business.
4. The government in India buys wheat and rice from farmers at a ‘fair price’ and sells at
a lower price to consumers through ration shops. In this way, it supports both farmers
and consumers.
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CHAPTER 3
MONEY AND CREDIT
Money as a Medium of Exchange
Money acts as an intermediate in the exchange process, it is called a medium of
exchange. A person holding money can easily exchange it for any commodity or
service that he or she might want.
Currency
In India, the Reserve Bank of India issues currency notes on behalf of the central government. No other
individual or organisation is allowed to issue currency. The rupee is widely accepted as a medium of
exchange in India.
Deposits in Banks
The other form in which people hold money is as deposits with banks. People deposit their extra cash
with the banks by opening a bank account in their name. Banks accept the deposits and also pay an
amount as interest on the deposits.
The deposits in the bank accounts can be withdrawn on demand, these deposits are called demand
deposits. The payments are made by cheques instead of cash.
A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the
person in whose name the cheque has been issued.
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Two Different Credit Situations:
Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or
services in return for the promise of future payment.
Here are 2 examples which help you to understand how credit works.
Festive Season:
In this case, Salim obtains credit to meet the working capital needs of production. The credit helps him
to meet the ongoing expenses of production, complete production on time, and thereby increase his
earnings. In this situation, credit helps to increase earnings and therefore the person is better off than
before.
Swapna’s Problem:
In Swapna’s case, the failure of the crop made loan repayment impossible. She had to sell part of the land
to repay the loan. Credit, instead of helping Swapna improve her earnings, left her worse off. This is an
example of debt-trap. Credit, in this case, pushes the borrower into a situation from which recovery is
very painful. Whether credit would be useful or not, depends on the risks in the situation and whether
there is some support, in case of loss.
Terms of Credit:
Every loan agreement specifies an interest rate which the borrower must pay to the lender along with the
repayment of the principal. In addition, lenders also demand collateral (security) against loans.
Collateral (Security) is an asset that the borrower owns (such as land, building, vehicle, livestock,
deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. If the borrower
fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.
Interest rate, collateral and documentation requirement and the mode of repayment, together is called
the terms of credit. It may vary depending on the nature of the lender and the borrower.
Cheap and affordable credit is crucial for the country’s development. The various types of loans can be
grouped as:
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Formal and Informal Credit
The formal sector meets only about half of the total credit needs of rural people. The remaining
credit needs are met from informal sources. It is important that the formal credit is distributed more
equally so that the poor can benefit from the cheaper loans.
1. It is necessary that banks and cooperatives increase their lending, particularly in rural areas,
so that the dependence on informal sources of credit reduces.
2. While the formal sector loans need to expand, it is also necessary that everyone receives
these loans.
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CHAPTER 4
GLOBALISATION AND INDIAN ECONOMY
• More and more goods and services, investments and technology are moving
between countries.
• There is one more way in which the countries can be connected. This is through
the movement of people between countries.
MNCs set up production jointly with local companies which benefits local companies in the following
ways:
1. First, MNCs can provide money for additional investments, like buying new machines for faster
production.
2. Second, MNCs might bring with them the latest technology for production.
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Integration of Markets
Foreign trade creates an opportunity for the producers to reach beyond the domestic markets. Producers
can sell their products not only in markets located within the country but can also compete in markets
located in other countries of the world. Similarly, buyers have the options to choose among various goods
beyond domestically produced goods. Thus, foreign trade results in connecting the markets or integration
of markets in different countries.
Technology
Rapid improvement in technology has been one major factor that has stimulated the globalisation
process. This has made possible much faster delivery of goods across long distances at lower costs.
The developments in information and communication technology have made information instantly
accessible.
1. It has provided greater choices to consumers who now enjoy improved quality of and lower prices
on several products.
2. It has resulted in higher standards of living.
Globalisation has also created new opportunities for companies providing services, particularly in the IT
sector.
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The Struggle for a Fair Globalisation
Fair globalisation creates opportunities for all and also ensures that the benefits of globalisation are
shared better. The government can play a major role in making this possible.
Some of the steps that the government take are:
1. It can ensure that labour laws are properly implemented and the workers get their rights.
2. It can support small producers to improve their performance.
3. If necessary, the government can use trade and investment barriers.
4. It can negotiate at the WTO for ‘fairer rules’.
5. It can also align with other developing countries with similar interests to fight against the
domination of developed countries in the WTO.
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CHAPTER 5
CONSUMER RIGHTS
We participate in the market both as producers and consumers.
As producers of goods and services, we could be working in any of the sectors such
as agriculture, industry or services.
Consumers participate in the market when they purchase goods and services that
they need. These are the final goods that people use as consumers.
The rules and regulations are required for the protection of the consumers in the
marketplace.
Consumer Movement:
In India, the consumer movement as a ‘social force’ originated with the necessity of protecting and
promoting the interests of consumers against unethical and unfair trade practices. Because of all these
efforts, a significant initiative was taken in 1986 by the Indian government. It has implemented
the Consumer Protection Act 1986, popularly known as COPRA.
Information about Goods and Services: When you buy any commodity, you will find certain
details given on the packing such as:
• Ingredients used
• Price
• Batch number
• Date of manufacture
• Expiry date
• The address of the manufacturer
This information has been displayed because consumers have the right to get information about the
goods and services that they purchase. Consumers can then complain and ask for compensation or
replacement if the product proves to be defective in any manner.
In October 2005, the Government of India enacted a law, popularly known as RTI (Right to Information)
Act. This law ensures that its citizens get all the information about the functions of government
departments. 14
When Choice is Denied:
Any consumer who receives a service in whatever capacity, regardless of age, gender and nature of
service, has the right to choose whether to continue to receive the service or not.
Consumers have the right to seek redressal against unfair trade practices and exploitation. The
consumer movement in India has led to the formation of various organisations, known as consumer
forums or consumer protection councils. They guide consumers on how to file cases in the
consumer court.
COPRA, a three-tier quasi-judicial machinery at the district, state and national levels was set up for
redressal of consumer disputes.
• The district-level court called District Forum, which deals with the cases involving claims up
to Rs 20 lakh
• The state level court called State Commission, which deals with the cases involving claims
between Rs 20 lakh and Rs 1 crore.
• The national level court is known as the National Commission, which deals with cases
involving claims exceeding Rs 1 crore. If a case is dismissed in district-level court, a consumer
can also appeal in the state and subsequently in national-level courts.
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