1 INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

• Objectives of British rule in India

1 To use India as a supplier of raw materials for British Industries

2 To convert India into a market for the finished products produced in Britain

• Major Reasons for Agricultural Stagnation

1. The exploitative land settlement system
2. Use of low level of technology
3. Rural indebtedness
4. Low agricultural productivity
5. Use of limited chemical fertilizers
6. Inadequate irrigation facilities
• Land Settlement Systems
1. Zamindari System: Introduced in 1793by Lord Cornwallis- in Bengal presidency. Here Zamidars recognized as
the full proprietors of land and act as intermediaries btn the cultivators and the company.
2. Ryotwari System : Madras presidency- the responsibility of paying land revenue was the duty of the individual
farmers himself and avoided intermediaries.
3. Mahalwari System: North India-Mahals- group of villeges.
• Commercialization of Agriculture
Farmers started cultivating cash crops instead of food crops
• Industrial Sector
1. Because of the twin objectives of British rule Industrial sector was affected.
2. Handicrafts industry also affected
• The only landmark in industrialization was setting up of TISCO-1907.
• Foreign Trade
1. India became an exporter of primary products and an importer of finished goods.
2. But it doesn’t benifited India, The Balance of Trade –BoT become unfavourable.
• Demographic Condition
First Census in India in 1881-takesplace in every 10 years. 1921 is known as a ‘year of great divide’. In 1921 India
entered to the IInd state of demographic transition.
Demographic Indicators
Colonial Period 2011 Kerala
1 Literacy 16 % 75% 94%
2Female literacy 7% 65% 92%
3 Deathrate 32/1000 7.4/1000 6.8/1000
4 Infant mortality 218/1000 44/1000 12/1000
5 Life expectancy 32years 69 75
• Occupational Structure
The number of people working in different sectors
Primary Sector : Eg: Agriculture, Animal husbandry, fishing etc
Secondary Sector : Eg: Small and largescale all industries.
Tertiary Sector : Eg: Transportation, Communication, Banking, education
• Infrastructure
Transportation (Road, Railway, Air, Water) facilities developed
Dams, bridges, canals, powerstations, pipelines, educational institutions, hospitals, telegraph
• National Income Calculation
Dadabhai Naoroji, William Digby, Findlay Shirras, V.K.R.V. Rao and R.C.Desai
During colonial period there was no improvement in GDP and National Income. It was about 2 %
There were 4 phases for demographic transition
Imp land settlement system-Zamindari

2. INDIAN ECONOMY 1950-1990

• Economically India selected Mixed Economy
• Politically India choose a Parliamentary democracy
• Planning: It is a process by which resources are allocated according to pre determined manners so as to achieve certain
goals and targets within a specific time period.
For 5 years- Five Year Plan and for 20 years- Perspective plan
• Aims of FYPs Ist FYP 1951-56
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 1. Growth 2. Modernisation 3. Self reliance 4. Equity

Other Objectives

Infrastructural dvpt, health, Agricultural and Industrial dvpt, dvpt of Science & technology, poverty eradication, rural dvpt,
improvement, improvement of educational facilities, raise the std of living of the population, reducing inequalities

• 2 Major initiatives in Agriculture : Land reforms & Green Revolution

• Aims of land reforms
1. Abolotion of intermediaries like Zamindars
2. Tenancy reforms
3. Ceiling of land holding
4. Distribution of land amoung landless
5. Consolidation of holding & prevention of subdivision and fragmentation
6. Organization of co operative farming
• Green Revolution – Features
1. Use of HYV seeds
2. Use of chemical fertilizers and pesticides
3. Use of modern farm implements
4. Better irrigation facilities
5. Provision of credit facilities to farmers at low rate of interest
• Advantages of Green Revolution
❖ India became self sufficient in food grains
❖ Increase wheat production
❖ Reduction in price of food grains benifited weaker sections of the society
❖ Government could create better stock of food grains
❖ Strengthened PDS
• Limitations of Green Revolution
o Growth of capitalist farming
o Disparity widened between rich & poor farmers
o HYV seeds were prone to attack from insects and pests
o Use of chemical fertilizers, pesticides, insecticides destroyed the natural fertility of soil.
o Heavy dependence on irrigation facilities
o GR concentrated on wheat alone.
• SUBSIDY
Arguments against subsidy
1. Major parts of the subsidy goes to the rich farmers
2. The Subsidy amount could have been used for the welfare of the poor people
3. Therefore, fertilizer subsidy should be stopped in a phased out in the longrun
• Arguments for Subsidy
1. Majority of the farmers are poor and agriculture in India is a risky business
2. Since majority of the Indian farmers are marginal farmers. They can’t afford the cost of agricultural inputs without
subsidies
3. Stopping subsidies will increase inequality btn rich & poor farmers
4. If subsidies are unduly benefitting the fertilizer industry and big farmers, they should be excluded from the range
of subsidies
5. Subsidies are inevitable for agricultural dvpt
6. In the current context of declining interest of farmers in cultivation, subsidies can attract more people into
agriculture
• IPR 1956 - According to this industries are classified into 3
1. Industries exclusively owned by the state
2. Industries in which the private sector could supplement the effort of the state
3. Remaining industries which were to be in the private sector. But they will be kept under the state control through
the system of licenses.
• Small scale Industries – Karve Committee – 1956
Advantages:-
1. Less capital investment
2. Labour intensive technology
3. Less dependence on inputs
4. Less pollution
5. Rural Development
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 • Trade policy : Import Substitution : Policy of Protection
1. Tariff : Taxes imposed on imported goods
2. Quota: Specify the maximum quantity of goods which can be imported
• Effects of policies on Industrial Development
1. Increase in the share of contribution to GDP
2. Growth of indigenous industries
3. Development of small scale industries creating many entrepreneurs with small capital investments & millions of
jobs.
• Drawbacks of Industrial policies
1. The ‘Permit-licence raj’ prevented certain firms from becoming more efficient
2. Through the majority of public sector industries performed well, the performance of some public sector firms were
not upto the mark as it was expected.
3. Due to restriction on imports Indian consumers had to purchase whatever the Indian producers produced.

LPG – AN APPRAISAL

Background
- In 1991 India faced with an extraordinary economic crisis
- The main crisis was the inability of government to repay the foreign loans
- There was a fall in the export from India to Gulf countries and the remittances from Gulf dried up
- The Gulf war and the subsequent events created severe foreign exchange crisis in our country
- Flight of capital form the country due to political instability
- India failed to fulfill some of its international commitments due to economic crisis.
- Low rating of Indian currency and subsequent withdrawal of deposits of NRI’S
- Refusal of credit by international commercial banks
- Increased levels of fiscal policy
- In order to overcome this crisis, India pledged gold bank of England and obtained loan
- As part of LPG government announced stabilization measures as well as structural adjustment programme.
- Stabilization measure- it refers to short term measures to correct macroeconomic imbalances like foreign exchange
crisis, inflation etc.
- Structural adjustment programme-it consists of measures to improve the productivity of the economic in long run.
• LIBERALISATION
Liberating the trade from unwanted govt control and restrictions
1. Industrial sector reforms
- Delicensing
- Dereservation
- Allowed Industries to expand their capacity
- MRTP and FERA were amended
2. Financial sector reforms
- Bank branch licensing liberalized
- New generation banks were allowed to operate in country
- CRR and SLR reduced, facilitating more money with bank
- Insurance companies were allowed in the private sector
- Capital markets liberalized
- Mutual funds opened to the private sector
3. Tax reforms
- Fiscal policy (public expenditure, tax collection, public debt) It is a policy of govt
- Monetary policy – refers to any action undertaken by the Central govt to change the quantity, availability or
cost of money
- Reduction in personal income tax
- Reduction in corporation tax
- Excise duty and customes duty reduced
- GST (Goods and Services Tax) introduced

4. Foreign exchange reforms

- In 1991 as a stabilization measure, Indian rupee was devalued. Devaluation prevented the flight of capital
encouraged capital inflows and encouraged exports.

5. Industrial investment policies

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- Industrial investment policies
- Imports liberalized
- Quantitative restriction on imports removed
- Import duty reduced
- Import licensing abolished
- Export duties removed to encourage exports
- Moved to market determined exchange rate.
• PRIVATISATION
It implies giving away ownership/ management of govt enterprises to private companies. India started privatization as
part of Structural Adjustment Programme.
Disinvestment : It is a form of privatization. Disinvestment implies selling govt investment in public sector undertaking.
It aims at:-
- Improving the management of PSU’s through superior management techniques
- Improving the financial performance of PSUs through financial discipline.
- Enhancing the ability of companies to raise financial resources from the mkt
- Raising revenue for the govt from sale of equity
- Promote direct foreign investment
• GLOBALISATION
The term Globalisation indicates the opening up of domestic economy for the world market or integration of an
economy with global economy. It involves creation of network and activities transcending economic, social and
geographic boundaries. It attempt to establish links in such a way that happening in India can be influenced by events
happening miles away. It is very complex phenomenon.
➢ Outsourcing
In outsourcing, a company hires regular service from external sources, mostly from other countries. Developed
countries are outsourcing many services from developing countries. Computer software, ITES like medical
transcription, accounting, legal services, editing, animation, call centers etc. are some of the areas of outsourcing to
India . Proficiency in English language has made India a favorable destination for Business process Outsourcing (BPO)
services.
➢ WTO ( WORLD TRADE ORGANISATION )
➢ GATT was established in 1948 to pursue the objective of free trade. GATT was replaced by WTO in 1995
➢ Aims of WTO
➢ Provides equal opportunities to all participating nations in International trade.
➢ To ensure optimum utilization of World resource and protect the environment
➢ Removal of restrictions on trade, there by facilitating free entry and free exit of goods.
➢ To encourage multilateral trade rather than bi-lateral trade
➢ Extension of trade by including trade in services.
➢ Indian Economy During Reforms : An Assessment
➢ GDP : In 1980-90 , the GDP growth rate was 5.6 % but in 1990-2000 it was 6.4% and rather increased
to 8 % in 2002-07.
➢ Foreign Investment: The improved economic environment helped to attract more investment to the
country. Both FDI and FPI increased.
➢ Foreign exchange reserves: Although the GDP growth has increased during the reform period. This
growth has not generated sufficient employment opportunities in the country.
➢ The growth rate of agriculture has fallen down
➢ Reduced public investments on agriculture
➢ Reduction in import duty on agricultural products
➢ Removal of minimum support price of some crops
➢ Shift from production for the domestic mkt to export mkt
➢ Basic facilities like power supply have remained inadequate.
➢ Globalization has resulted the free movement of goods and services from foreign countries especially
developed countries affected the domestic industries and employment.

POVERTY
• Characteristics of poor in India
- Malnutrition, Indebtedness, unemployment, Employed in unorganized sector, lack of access to basic amenities, higher
levels of the poor belongs to Dalits
- To identify the poor a concept was developed known as ‘Jail cost of living’ – Dadabhai Naorji
- Poverty line : To define poverty , the population is divided into poor and nonpoor. The information about poor in
India is published through Planning Commission. It is estimated on the basis of data collected by NSSO.
• Causes of poverty

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 Rapid growth of population, unsatisfying economic growth, unequal distribution of income and wealth, backwardness
in agriculture, social factors, corrupt and inefficient administration, and failure of poverty alleviation programmes.
• Policies and programmes towards poverty alleviation
➢ Through economic growth poverty can be reduced
➢ Trickledown theory and govt approaches
1. Growth oriented approach
2. Raising the income and employment
3. Providing minimum basic amenities
- Self employment programmes
- IRDP NOW SGSY Includes TRYSEM, DWCRA, GKY, MWS, SITRA
- Wage employment programmes
- NREP, RLEGP, JRY&NRY, MWS,PMRY-GA, IAY,NREGP
- Social security programmes
- -Old age pension
- -Financial support in the event of the death of the breadwinner
- -Support for pregnant women
- Food security programmes
- PDS, TPDS, ICDS, Annapurna Scheme, AAY & IAY

Assessment

-While considering the magnitude of poverty, the amount of funds allocated for these programmes are insufficient.

-Due to lack of commitment and dedication of implementing agency the outcome of the programme are not satisfactory

-Due to corruption, there are leakages from the funds sanctioned for the programme.

-Govt policies failed to address the majority of people who are living on or just above poverty line.

5 HUMAN CAPITAL FORMATION OF INDIA

• Social Infrastructure : Education,Health, Housing, Water supply

• Economic Infrastructure : Roads, Bridges, Buildings, Energy, Transportation, Communication.
For converting human being to human capital, we should invest in human capital
• Sources of Human Capital
1 Investment in education
2 Investment in health
3 On the job training
4 Migration
Investment in information acquisition
• Physical capital V/S Human capital
Similarities
1. Both physical capital and human capital are the results of investment
2. Both are mobile subject to rules and regulations of respective nations
3. Both depreciates over time

Dissimilarities

Physical capital Human capital

1 Outcome of an economic & Outcome of conscious decision

Technical process.

2 Tangible Intangible

3 Depreciates with use Depreciates with aging

4 Separable from its owner Not possible to separate

• Human capital and Economic growth

The contribution of the educated person to economic growth is morethan that of an illiterate person.
• India as a knowledge economy
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 The reasons for highlighting India as a major player on the globe are due to the following reasons.
1. The fast growing service sector
2. Greatest source of human capital interms of trained, technical, scientific and managerial human resource.
3. Source of cheap technical labour
4. Knowledge based economy
5. Higher level of computer literacy
6. Knowledge of English language
7. Existence of democratic political system
• Major Regulatory Agencies in the field of Education In India –
NCERT…………………School level Education
UGC ………………….Higher Education
AICTE …………………Technical Education
ICMR ………………….Medical Education
(Article 21 A) …education a fundamental right to all children in the age group of 6 – 14 years.
• Challenges
- % of students completing higher education is relatively small
- Decreased std of higher education
- Unemployment among the youth is high

6 RURAL DEVELOPMENT
• Some of the thrust areas of rural dvpt are:
Human resource dvpt, Land reforms, Dvpt of Infrastructure, Poverty alleviation, Generation of employment
opportunities
• Farmers face the following problems
-indebtedness
-high cost of agricultural inputs
-poor marketing facilities
-lack of non-farm employment opportunities
• Government adopted the following credit facilities
- _In 1969, 14 commercial banks were setup now it rounded up to 20
- _Setting up of NABARD in 1982
- _Expanding of co-operative credit system
- _Priority sector lending by banks

Rural banking: a critical appraisal

- _Farmers are not getting any benefit through this credit system
- _There are instances where farmers deliberately refuse to repay
- _Small farmers are dependents of village money lenders

Govt has initiated the following steps to improve Agricultural Marketing

- Establishment of regulated markets. Provision of infrastructure , co operative marketing facilities, providing credit
facilities, Distribution of food grains through PDS
- Emerging Alternative marketing channels : Apni Mandi (Punjb, Rajastan, Hariyana), Hadaspar Mandi (Pune), Rythu
Bazar (Andra Pradesh), Uzhavar Sandies(Tamil Nadu), Karshaka Vipanana Kendram (Kerala).
• Diversification into Productive Activities
The first one relates to diversification of the crop production. The IInd one relates to the shift of work force from
agriculture to other allied activities. Diversification of agriculture helps to provide alternative employment
opportunities in the non-farm sector

Agricultural related activities

1. Animal husbandry
2. Fisheries
3. Horticulture
4. Other alternative livelihood options
Due to advancement in Science & Technology new livelihood options are emerging in the modern world.
Development of IT helps agriculture in many ways:
1. It provides information about weather
2. It helps to know the price of agricultural inputs

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 3. It solves the problems of farmers
4. It introduces new techniques in farming

Benefits of Organic Farming

➢ High nutritional value

➢ Generates employment opportunities
➢ Good demand in International market
➢ It is an environmentally sustainable technology

7 EMPLOYMENT, GROWTH, INFORMALISATION & OTHER ISSUES

• Study of employment is very important

- _provides insight into the quality &nature of employment
- _farming &planning human resources
- _understanding the contribution of different industries &sectors towards GDP
- _Helps in understanding and analyzing social issues worker- population ratio=number of workers total populated X100
• Following are reasons for lower work participation of women:
- _lower level of literary and educational attainment of women
- _most rural women remained unemployed due to insufficient job opportunities in rural areas
- _under estimation of female employment
- _no job security
• There are 3 types of workers
- _self employed
- _casual workers
- _salaried employees
• Jobless growth: there was improvement in GDP but the employment growth was not mentioned during the year 2010
& 2014.
• ORGANISED SECTORS:ADVANTAGES
HIGH SALARY, PAID LEAVE, MEDICAL BENEFIT, PF, GRATUITY, PENSION BENEFITS
UNEMPLOYMENT
It is situations in which people who are willing to work, but do not get any work. The major sources of data on
unemployment are NSSO
_OPEN UNEMPLOYMENT- situation in which people above a certain age who are able to work & and willing to
work at the prevailing wage remain unemployment
_disguised unemployment- when more persons sre working in a job than actually required, the situation is
termed as disguised or hidden employment
_seasonal unemployment- the type of unemployment caused by change in seasons is termed as seasonal
unemployment.
8. INFRASTRUCTURE
Infrastructure is the support system of modern industries
PPP- public private participation
BOT-build operates & transfer
Energy- sources- coal, petroleum, natural gas, sunshine, electricity
Sources of energy
1. commercial sources-coal, petroleum products, natural gas & electricity
2. non-commercial sources-firewood, vegetable waste & dried animal dung
_conventional source of energy-coal, petroleum, electricity-which cannot be renewed, pollution.
_non-conventional source of energy-solar energy, bio-gas, biomass, wind energy, tidal energy-renewable,
pollution free
Thermal power is the largest source of electric power generation. It accounts for 70% of the total.
• Challenges in the power sector
- _fast growing economy like India needs more power. But the power generation is not sufficient to
meet the growing demand.
- _the installed capacity is under utilised because plants are
- not running properly
- _many states electricity boards are very inefficient
- _power transmission loss is very high
- _govt is faced to provide subsides to consumers which are causing losses to electricity boards
- _power theft is rampant in the country
- _there is frequent power cuts and interpretation in power supply
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 - _shortage of raw materials
• suggestion to meet these challenges:
_more investment in both private and public sector
_promote private public partnership in power generation
_encouraging the production of renewable energy
_minimize transmission loss & adopt measures to check power theft
_promoting energy conservation through CLF/LED
_enhance production of nuclear energy
_improve the performance of SEBS
• HEALTH
- _health of people is an essential element of human resource development
- _infant mortality, maternal mortality, life expectancy, nutritional levels, incidence of communicable &
non-communicable diseases, health infrastructures
- _health infrastructures-hospitals, doctors, nurses, paramedical staffs, beds, equipments required at
hospitals, adequate medicines.
• Health system in India
Primary health care
_health education
_prevention & control of diseases
_promotion of nutrition
_issues related to portable water & sanitation
_materials & child health care
_immunization against major infectious diseases like polio, TB
_promotion of mental health
_provision of essential drugs
_primary health care is provided through subcentres primary health centre’s, PHC’s, community health
centres
Secondary health care
Clinic laboratory, scanning, x-ray, surgeons, gynecologists, pediatricians-available health centres
Tertiary health care
Medical collages, super specialty hospitals & multi specialty hospital
• Private sector health infrastructure
Eg: CMC Velloor, Chennai apolo
• Indian system of medicine
Ayurveda, yoga, unani, sidha, naturopathy &homeopathy
• Urban-rural & poor-rich divide
Through 70% of india’s population lives in rural areas, where as 80% of hospital beds are in urban areas.
Women’s health-increase in female, foeticide, low literary level, child marriage, matanal mortality etc.

9 .ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

ENVIROMENT-it is defined as the total planetary inheritance and the totally of all resources. It includes all
biotic & abiotic factors.
Functions of environment
_supplies resources
_assimilate waste
_sustains life
_provides aesthetic services.
To enable the environment to perfume the above functions resources should not be over exploitated &
degraded. The environment has carrying capacity & absorptive capacity
• Global warming: gradual increase in the average temperature of the earth’s lower atmosphere
Consequences of global warming:
_melting of polar ice resulting into rise of sea level & coastal flooding
_extinction of many species
_frequent tropical storms
_increased incidence of tropical diseases
_disruption of drinking water supplies.
• Ozone depletion: phenomenon of reduction in the amount of ozone in the stratosphere. The UV
radiations are responsible for skin cancers in humans.
_state of India’s environment-
Environment is in stage of threat
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 i. Poverty induced environmental degradation –deforestation, overcrowding cities &
growth of slums etc.
ii. Threat of pollution from affluence & rapidly growing industrial sectors-air pollution, water
contamination, soil erosion, wildlife extinction etc.
• LAND DEGRADATION
Degradation makes the land unfit for cultivation.
Causes:
• deforestation
• overgrazing
• encroachment into forest
• non-adoption of crop rotation
• indiscriminate use of chemical fertilizers & pesticides
• exploitation of ground water
• excessive sand mining
• shifting cultivation slash & born cultivation
• use of top fertile soil
• Air pollution: vehicles, factories etc causes pollution
• Water pollution: domestic & human waste water, industrial waste & agricultural run of .
• Sustainable development
- _environment friendly development
- _use of non-conventional sources of energy
- _LPG & Gobar gas in rural areas
- _CNG in urban areas
- _wind energy
- _solar energy
- _mini-hydel projects

10. COMPARATIVE DEVELOPMENT EXPERIENCE

OF INDIA AND HER NEIGHBOURS

India and Pakistan became independent in 1947 and china in 1949

FYP (5 year planning)-India in 1951, pakistan in 1956, china in 1953.

Economic reforms India-1991, china-1978, Pakistan in 1988.

China: maosethung-1949-communist administration.

_people’s republic of china-commune system-GLF in 1958, in 1965-great proletarian Cultural Revolution, deng Xiao ping-old
command economy was slowly abandoned. Private initiatives & enterprises were encouraged. Foreign investment was allowed,
farmers were given freedom to produce any crop of their choice.

Pakistan – Mixed economy- followed protectionist policy in International trade- financial support from Western nations- 1988
more reforms were introduced – FDI was encouraged ..-Military rule – availability of fresh water – high fertility rate.

Demographic indicators

- The Average annual growth rate is lowest in China and highest in Pakistan
- China has got lowest density of population
- Pakistan has highest fertility rate and lowest in China
- China is having more urban population and India is having lowest urban population.

Indicators of human development

According to human development report China is ahead of India and Pakistan. Comparing to other 2 countries China is better in
literacy level, Infant mortality rate, Maternal mortality, Life expectancy. In case of distribution of fresh water the 3 countries
are same. The no of people below poverty line is more in India compared to other two countries.

11 STATISTICS – INTRODUCTION

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Economic facts are expressed in terms of numbers statement like these information are called economic data. Statistics make use
of economic data for drawing meaningful inferences.

Statistics in day – to – day life. : Average mileage the car can provide with a specific price …

Govt collects wast amount of information for its normal administration and national/economic planning

Statistics – As a plural sense , is used to refer the quantitative information or data. In singular sense, statistics denotes the various
methods adopted for the collection, classification, presentation, analysis and interpretation of data

Functions of Statistics

- It simplifies complexity of data

- It reduces the bulk data
- It adds precision in thinking
- It helps comparison of different sets of figures.

Statistics in Economics

- In Economics, variables are systematically and scientifically analyzed with the help of statistical tools
- Statistics is extensively used in various stages of economic and development planning
- Decision making in Economics is done with the help of Statistics.
- Framing economic policies are undertaken with the help of Statistics.

Limitations of Statistics

- It does not study qualitative phenomena

- It does not study individuals
- It is liable to be misused
- Statistical laws are true only on average
- It does not reveal the entire story

12 COLLECTION OF DATA

Sources of data: Internal Sources and External Sources..Data collected within the organization is called internal data. External
data can be classified into 2

Primary Data Secondary Data

• In Original form Second hand data

• More expensive Less expensive
• More time consuming Less time consuming
• More care is needed at the time of collection Care needed at the time of its use
• It is a raw item It is a finished material

Methods of Collection of Primary data

- Direct personal interview

- Indirect oral investigation
- Information from correspondents
- Telephonic interview
- Mailed Questionnaire
- Questionnaire filled by the enumerators

Pilot Study – pre testing of a questionnaire – helps to identify & correct the mistakes.

Secondary data collection - Published sources

- Official publications of the Central, State & Local govts

- Official publications of international agencies like UNO
- Reports and publications of trade associations, banks etc
- Reports of committees and commissions
- Reports published in technical trade journals

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 - Reports submitted by researchers, Economists etc

How to use Secondary data ?

Investigator should make sure that the data is reliable, upto date, relevant and adequate for the study of his problem.

Method of data collection

1. 1 Census method
2. 2 Sample survey method
1. Census method – Merits :
- The results obtained are likely to be more accurate and reliable
- Free from sampling errors
- Detailed study of units is possible
- Collected data will be useful for further studies

Demerits

Needs more time, Needs more enumerators, More expensive, possibility of errors &

Not applicable for infinite population

Sample survey method

Survey conducted by taking sample to represent the characteristics of the population under study is referred to as sample survey.

The no of units in the sample is called sample size.

Merits

- Less expensive
- less time consuming
- More reliable
- Detailed study of the selected unit is possible

Demerits

- Faulty selection of the sample would lead to wrong interpretations

- Sample selection may not be applicable in all cases
- Difficult to make generalization when population is heterogeneous.

Non Sampling Errors -- Reasons

- Data specification being inadequate with respect to the objectives of the survey
- Statistical units prescribed may be inappropriate
- Methods of interview may be unsuitable
- Investigators may be untrained
- Incorrect response from the respondents
- Errors in data processing
- Errors occurred during presentation and tabulation of data

Important Sources of Secondary data : NSSO, Census of India

Qualities of a good questionnaire

- Questions should be capable of objective answers

- Questions should be clear, simple and easy to understand
- The questionnaire should be brief
- The questions should not be a leading one
- Personal questions should be avoided.

Sampling Methods

1. Random Sampling and 2. Nonrandom Sampling

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 a. Simple Random sampling
i. Lottery method
ii. Random Number table method
b. Restricted Random sampling
i. Stratified sampling
ii. Systematic sampling
iii. Cluster sampling
14 ORGANISATION OF DATA
Classification of data is a technique, with the help of which the collected data is arranged into different groups or
classes according to some common characteristics.

Types of Classification

Geographical (Spatial): Eg. India, Tamilnadu, Keralassery etc

Chronological (Temporal): Eg. Year, month hour etc

Quantitative : Eg. Income, height, mark etc

Qualitative: Eg. Beauty, honesty, attitude etc

Continuous Variables: It can take any numerical value

Eg : height of a student, weight of a student

Discrete Variable: It can take any certain value

Eg : Number of students in a class, Rank of 10 students in an exam

Statistical series

- Individual series
- Discrete series
- Continuous series

Frequency distribution: A mass of raw data put into an orderly arrangement of magnitude along with their corresponding class
frequencies.

Class Limits: Class limits are the two ends of a class

Class Interval = Upper limit – Lower limit

Class mark = Middle value of a class ie,( LL+UL )/2

Construction of frequency distribution

Eg: 4, 8, 12, 1, 5, 7, 18, 20, 6, 28, 13, 24, 25, 17, 31, 14, 19, 20, 23.

Marks Tally Frequency

0-5 IIII 4

5-10 IIII 4

10-15 III 3

15-20 III 3

20-25 IIII 4

25-30 II 2

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 20

Exclusive method : The class limits are so fixed that the upper limit of one class will be the lower limit of the next class.

Inclusive method: Both the upper limit and lower limits are included the same class itself.

Conversion of inclusive classes to exclusive classes:-

- Find the gap between the UL of a class & the LL of the next class.
- Gap/2
- Subtract the result from all LLs and add the value(gap/2) with all ULs

Univariate – Frequency distribution that has only one variable

Bivariate - Frequency distribution with 2 variable.

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Importance of Index numbers

- It involves the computation of average value of a phenomenon

- It makes the study of relative changes of a phenomenon over a period of time
- It measures changes of a phenomenon such as pricelevel, volume of production etc which are not capable of direct
measurement
- It expresses results through the technique of common denominator 100 without using the sign of %.

Uses & purposes of Index Numbers

- Helps in studying trend

- Policy formulation
- Measuring the purchasing power of money
- Helps in deflating various values
- Act as economic barometers
- CPI is useful in wage negotiation , formulation of income policy, price policy, rent control, taxation etc.

CPI- Consumer Price Index – Cost of living Index

Whole sale Price Index – Uses to measure inflation, longterm purchases, Rent adjustments

PPI – Used by Industrialist, trade profit, transport expenditure etc

Others – Agricultural production Index, HDI, Sensex, Nifty etc

Issues in the construction of Index Number

- Purpose of Index number, choice of commodities, choice of base year, Collection of data relating to price& quantities,
Choice of price, Choice of weight, Choice of average.

19 USE OF STATISTICAL METHODS

Steps towards making a project
- Identifying a problem or an area of study
- Choice of a target group
- Collection of data
- Organisation and presentation of data
- Analysis and Interpretation
- Conclusion
- Bibliography

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