INTERNATIONAL BUSINESS
IBM (PYQ April 2011)
PART A
QUESTION 1
a) Identify India’s economic system during 1947 to 1990.
India’s economic system during 1947 is a democratic system of government. The economic system that developed in India after 1947 was a mixed economy characterized by a large number of state owned enterprises, centralized planning, and subsidies.
b) Based on the case study, describe the following:
i) India’s current economic system.
Economic system is the framework adopted by each country to run their economy in the best manner. There are three economic systems prevailing in the world currently.
India had adopted a mixed economy after independence with the intention of procuring the advantages of both and avoiding their disadvantages.
The productive activities are divided between the government (Public Sector) and the people (Private Sector). Normally the basic industries, the Capital Goods Industries, The Heavy Industries are placed in to the public sector and the light and consumer goods industries in the Private Sector. The activities of the public sector are guided by the welfare motive whereas the activities of the private sector are guided by profit motive. They balance each other. This ensures earning a profit and also a high level of public welfare. The public sectors are completely directed by the government whereas the private sectors are indirectly controlled by the government.
A mixed economy today in India resembles a capitalist economy with certain modifications. It is not a complete different economic system. The state tries to change the structure of the capitalist economy so as to make it more appropriate for model economy situations.
In India almost the entire agricultural sector is under private ownership. In the non agricultural sector, 3/4th of the industries are in the private sector. The wholesale and retail trade is mostly in the private sector and transport is also largely in the private sector except the railways
PART A
QUESTION 1
a) Identify India’s economic system during 1947 to 1990.
India’s economic system during 1947 is a democratic system of government. The economic system that developed in India after 1947 was a mixed economy characterized by a large number of state owned enterprises, centralized planning, and subsidies.
b) Based on the case study, describe the following:
i) India’s current economic system.
Economic system is the framework adopted by each country to run their economy in the best manner. There are three economic systems prevailing in the world currently.
India had adopted a mixed economy after independence with the intention of procuring the advantages of both and avoiding their disadvantages.
The productive activities are divided between the government (Public Sector) and the people (Private Sector). Normally the basic industries, the Capital Goods Industries, The Heavy Industries are placed in to the public sector and the light and consumer goods industries in the Private Sector. The activities of the public sector are guided by the welfare motive whereas the activities of the private sector are guided by profit motive. They balance each other. This ensures earning a profit and also a high level of public welfare. The public sectors are completely directed by the government whereas the private sectors are indirectly controlled by the government.
A mixed economy today in India resembles a capitalist economy with certain modifications. It is not a complete different economic system. The state tries to change the structure of the capitalist economy so as to make it more appropriate for model economy situations.
In India almost the entire agricultural sector is under private ownership. In the non agricultural sector, 3/4th of the industries are in the private sector. The wholesale and retail trade is mostly in the private sector and transport is also largely in the private sector except the railways