Eco 1st

• Economics


  A discipline dealing with efficient use of resources namely Land, Labour, Capital and Enterprise
• The chapter introduces you to economics through examples and stories of a hypothetical village of Palampur
• Palampur


  • Well-connected with neighbouring villages and towns
  • Has about 450 families belonging to several different castes
  • 80 upper caste families own the majority of land
  • Dalits comprise one third of the population and live in smaller houses
  • Most houses have electric connections
  • Has two primary schools and one high school
  • Has a primary health centre and one private dispensary
• Palampur is a hypothetical situation of a developed village in which production activities also take place
• Main production activities in Palampur


  • Farming
  • Small manufacturing
  • Transport
  • Shop-keeping
• Aim of production


  To provide required goods and services
• Requirements of production


  • Land and other natural resources
  • Labour
  • Physical capital
  • Human capital
• Every production is organised by combining land, labour, physical capital and human capital, which are known as factors of production
• Land


  Fixed, area under cultivation is practically fixed since 1960
• Farming is the main production activity in villages, with 75% of people dependent on it for livelihood
• Measuring land


  Standard unit is hectare, local units like bigha, guintha also used
• Ways to resolve limited land issue and grow more crops


  1. Growing different crops in different seasons (Kharif, Rabi)

  2. Improving irrigation system with tube wells and other sources
• Multiple cropping


  The practice of growing more than one crop on a piece of land during the year
• Modern farming methods


  • Use of High Yielding Variety (HYV) seeds
  • Use of pesticides, fertilizers and modern farm machinery
  • Modern irrigation techniques
• Green Revolution


  Introduction of HYV seeds and increased use of fertilizers and irrigation to improve agriculture in India
• The father of Green Revolution is Norman Borlaugh
• Reason for initial limited spread of Green Revolution


  HYV seeds need plenty of water and regular chemical fertilizers and pesticides, which was expensive for most farmers initially
• Green Revolution


  Associated with loss of soil fertility and depletion of groundwater due to overuse of chemical fertilizers and irrigation
• About one third of the 450 families in Palampur are landless, most of them dalits
• The remaining families who own land, 240 families cultivate small plots of land less than 2 hectares in size, which doesn't bring adequate income
• Labour


  Small farmers cultivate their own fields, medium and large farmers hire farm labourers who face heavy competition and agree to work on lower wages
• Capital


  Modern farming methods require a great deal of capital, small farmers have to borrow at high interest rates, medium and large farmers use their own savings