ECONOMICS

CHAPTER 1: THE STORY OF VILLAGE PALAMPUR

NOTES OF LESSON

Q1. Discuss the features of a village giving reference to the village of Palampur?
Ans: 1. Palampur is well-connected with neighbouring villages and towns. Palampur is
connected to a big village Raiganj and to the nearest small town of Shahpur.

2. Many kinds of transport are visible on this road.

3. This village has about 450 families belonging to several different castes. The 80 upper
caste families own the majority of land in the village. Their houses are made up of brick
with cement plastering.

4. Palampur has two primary schools and one high school. There is a primary health
centre run by the government and one private dispensary where the sick are treated.
5. Farming is the main activity in Palampur. There are other several activities such as
small scale manufacturing, transport, shop-keeping, etc.

Q2. Explain the four factors of production.

Ans: 1. Land: Land is a fixed factor of production. It is the first requirement of production
like other natural resources such as water, forests, etc.

2. Labour: Labour are the people who will do the work. Each worker is providing the
labour necessary for production. Labour can be skilled or unskilled depending on the task
requirement.

3. Physical Capital: Capital is the amount of money invested in the business with the
motive of earning high returns. It is of two types:
Fixed capital: The money which is used to purchase fixed assets in the business.
Examples: Tools, machines, buildings, etc.

Working capital: The money which is needed to meet regular expenses in

business to maintain continuity in the production cycle.
Examples: Raw material payments, labour wages, etc.

4. Human capital: The fourth requirement is knowledge and enterprise to be able to put
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 together land, labour, and physical capital and produce an output.
Q3. Differentiate between the following:
a) Land and Labour
b) Fixed Capital and Working Capital

Ans: Land Labour

i) Land is fixed in supply. Labour keeps increasing or

decreasing in size.
ii) Land is immobile. Labour is mobile.
iii) Land cannot be used by its own Labour can put itself to use.
(need other resources).

Fixed Capital Working Capital

i) It is used to buy fixed assets. It It is used to carry out day to day

consists of land, building, business operations. It consists
tools, etc. of cash, raw material, etc.
ii) Fixed capital does not change Working capital changes with a
with a change in output. change in output.
iii) It can be used & reused over a Once it is used, it is consumed
period of many years. by the production activity.
Q4. What is the unit used for measuring land in Palampur?

Ans: Hectare, Bigha, and Guintha are the units used for measuring land in Palampur.
Q5. What are the various ways of increasing production from the same piece of land?
Or
Land is fixed in supply. How can we increase production from the same piece of
land?
Ans: 1. Multiple cropping: To grow more than one crop on a piece of land during the year is
multiple cropping. It is the most common way of increasing production on a given piece
of land.

2. Modern Forming (Green Revolution): Green Revolution introduced high yielding

varieties (HYV) of seeds. HYV seeds promised to produce much greater amounts of
grain on a single plant. Higher yields were possible only from a combination of HYV
seeds, irrigation, chemical fertilizers, pesticides, etc.

3. Electricity and tube wells: Electricity came early to Palampur. Its major impact was
to transform the system of irrigation. Electric run tube wells were installed. As a result,
by mid 1970s the entire cultivated area of 200 hectares (ha.) was irrigated. The land
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 should be well irrigated to increase the production. Water sources other than rain should
be used.
Q6. Give the meaning of the following terms:
Ans: 1. Multiple cropping: Growing more than one crop on a given piece of land during the
year is called multiple cropping.

2. Yield: Yield is measured as crop produced on a given piece of land during a single
season.
Q7. What are the various types of crops grown in Palampur?
Ans: 1. Kharif crops are sown in the rainy season (from July to September) and harvested in
the autumn season. E.g., Jowar and bajra etc.

2. Rabi crops are grown in the winter season and harvested in the spring season. E.g.,
wheat, barley, etc.

3. Many are growing potatoes as the third crop between October to December.
4. A part of the land is also used for the cultivation of sugarcane which is harvested once
every year.
Q8. How did the spread of electricity help farmers in Palampur?
Ans: 1. Electricity will help in increasing production by assured irrigation (electric-run tube
wells).

2. It provides security to the farmers as there was assured income for them.

3. With good irrigation, more waste land can be brought under cultivation.

4. It will help in developing small scale industries.

5. Farmers can irrigate the field more effectively in lesser time.

Q9. Is it important to increase the area under irrigation? Why?
Ans: 1. Irrigation will help in improving the quality and quantity of production. With
increased production, we can meet the increasing demand of people as the population is
increasing day- by-day.

2. It will make agriculture more secure and will also increase the income of farmers.

3. It will also help to bring any waste land under cultivation.

4. Farmers can grow different types of crops during different seasons. Even during dry
seasons crops can be grown. (multiple cropping)

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Q10. Modern farming methods require the farmer to start with more cash than before.
Why?
Ans: 1. Modern farming methods require more capital for buying the input from the market
(e.g., HYV seeds, Chemical fertilizers, etc.).

2. Modern farming methods will be successful only with the combinations of all the
inputs. Therefore, if we use chemical fertilizers, we also need tube wells to irrigate the
fields.

3. Use of farm machinery also requires greater investment in tractors, threshers,

harvesters, etc.
Q11. What is Green Revolution? In which areas was it initiated and what were the
results?
Ans: 1. Green Revolution was introduced in the late 1960s to increase the production of food
grains with the use of HYV seeds, chemical fertilisers, irrigation, and farm machineries.
It was initiated in Punjab, Haryana, and Utter Pradesh.
Positive Effects:
1. Compare to the traditional seeds, HYV seeds promised to produce much greater
amounts of grain on a single plant. As a result, the same piece of land would now
produce far larger quantities of food grains.

2. In Palampur, the production raised from 1300 kg per hectare to 3200 kg per hectare.

3. With the green revolution, farmers now had greater amounts of surplus wheat to sell in
the markets.
Negative Effects:
1. Scientific reports indicate that modern farming methods have overused the natural
resource base.

2. In many areas, the green revolution is associated with a loss of soil fertility.

3. Continuous use of ground water for tube well irrigation has reduced the water table
below the ground.

4. Chemical fertilizers provide minerals that dissolve in water and are immediately
available to plants. But these may not be retained in the soil for long.

5. Chemical fertilizers can also kill bacteria and other micro-organisms in the soil. This
means that after some time, the soil will be less fertile than ever before.
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 6. The consumption of chemical fertilizers in Punjab is the highest in the country. The
continuous use of chemical fertilizers has led to the degradation of soil health.

7. Farmers are now forced to use more and more chemical fertilizers and other inputs to
achieve the same production level. This means the cost of cultivation is rising very fast.
Q12. What are the drawbacks of using Chemical Fertilizers for increasing output?
Ans: 1. Chemical fertilizers provide minerals that dissolve in water and are immediately
available to plants. But these may not be retained in the soil for long.
2. Chemical fertilizers can also kill bacteria and other micro-organisms in the soil. This
means that after some time, the soil will be less fertile than ever before.

3. The consumption of chemical fertilizers in Punjab is the highest in the country. The
continuous use of chemical fertilizers has led to the degradation of soil health.

4. Farmers are now forced to use more and more chemical fertilizers and other inputs to
achieve the same production level. This means the cost of cultivation is rising very fast.

Q13. What are the reasons for sub-division and fragmentation of land?
Or
“With the coming of every new generation, the land is further divided into smaller
and smaller units.” Explain.
Ans: 1. There are very large size families and with the law of inheritance, land has been sub-
divided into smaller units.

2. Due to very low income, from irrigated land in order to meet their personal expenses,
farmers sell a part of their land.

3.No alternative source of employment makes the people more dependent on the land for
meeting their needs.

Q14. Describe the work of a farmer with 1 hectare of land.

Ans: 1. They are small farmers. They usually adopt traditional methods of farming in their
small land holding by use of bullocks.

2. They do not use machines due to lack of money and all the work is done manually

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 with the help of his family members.

3. Most of the cultivation is rain fed and very little irrigation.

4. Natural manure such as cow dung is used if easily available then chemical fertilizer or
pesticides are used.

Q15. What are the employment conditions prevalent in Palampur for landless labours?
Ans: 1. The landowners exploit the landless farmers and cheat them in terms of wages. Wages
are paid in cash or kind. Sometimes meals are provided.

2. Wages vary widely from region to region, from crop to crop, and from one farm
activity to another. (Like sowing and harvesting)

3. Farm labourers can be employed on daily basis or for the entire year.

4. Most of the time they are paid less than the minimum wages set by the government.

5. No alternative sources of employment whether farming or non-farming.

6. Mechanisation has resulted in excessive unemployment.

7. They are forced to migrate to cities in search of better job opportunities.

Q16. What is a marketable surplus?

Ans: Surplus available over and above what is utilized by the farmers for self–consumption is
marketable surplus.

Q17. Why are the wages of the farm labourers in Palampur less than the minimum
wages set up by the government?
Ans: 1. Labour is surplus in villages.

2. There is heavy competition for work among the farm labourers who are the poorest of
all in villages.

3. The people are willing to work for very low wages.

4. They are uneducated and unskilled, so they are more prone to exploitation.

5.No alternative sources of employment are available.

6. Poor farmers are ignorant about the minimum wage act.
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 7. Due to Farm mechanization demand for labour decreased further.

Q18. What do farmers like Tejpal Singh do with their earnings?

Ans: 1. They put most of the money in bank account.

2. It is used for lending to small farmers.

3. They use their savings to arrange for the working capital for farming in the next
season e.g, seeds, fertilizers, etc.

4. They use their savings to buy fixed capital, eg. tractors, irrigation pumps, etc. for
farming activities.

5. Some farmers might also use the savings to buy cattle, trucks, and set up shops i.e.,
fixed capital for non-farm activities.

Q19. Despite the modernisation of farming, the traditional methods of farming are more
common among the mass of people. Discuss.

Ans: 1. The traditional methods of farming are relatively cheaper.

2. Easy availability of inputs – Farmers use cow dung and other natural manure as
fertilizers. All of these are readily available, and farmers do not have to buy them.

3. Traditional seeds need less irrigation.

Q20. On what terms and conditions do the small farmers get loans? How would
favourable terms of credit benefit them.
Ans: 1. Small farmers get loans from money lenders or landowners at a very high rate of
interest who do not maintain any repayment records.

2. At times they are asked to work on the landowner’s field as a farm labourer at very
low wages or no wages which affects their income and thereby make them unable to
repay the loans.

3. They keep their land as mortgage and sometimes have to sell a part of their land in
order to repay their loan.

4. If the loan is provided to them at low rates of interest (may be by the banks),
repayment of loans becomes easier.

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 5. Income of the farmers will be increased. Extra earnings could be saved and utilized as
capital.

Q21. How do the medium and large farmers obtain capital for farming? How is it
different from the small farmers?
Ans: 1. The medium and large farmers sell their surplus from production in the market and
earn money.

2. Part of their earnings is saved and kept for buying capital for the next season and
further, use their agricultural production.

3. They have their own savings which they have accumulated from the sale and surplus
production. They are thus able to arrange for the capital needed.

4. Small farmers have low production and do not have sufficient earnings. They have to
borrow money to arrange for capital.

5. They borrow from large farmers or from the local money lenders or traders supplying
various inputs.

Q22. Both land and capital are scarce, yet there is a basic difference between the two.
State the differences.
OR
Distinguish between Land and Capital.

Ans: LAND CAPITAL

It is a manmade factor of
The land is natural and is free gift
1 production.
of nature.
Availability of capital is
limited/scarce. But can be
Availability of land is fixed
2 increased by human
efforts.

Land is permanent, immobile, and It is mobile and not permanent.

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indestructible.

Q23. Why is there a need to start more non farming activities in villages?
Ans: 1. To reduce dependence on agriculture because people can get employment for the
whole year if they are employed in other activities besides agriculture.
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 2. To increase the level of income and improve the standard of living. It also increases
the savings of farmers.

3. Non farming activities require little land and less capital which are a scarce factor of
production.

Q24. Describe the various non- farm activities carried out in village Palampur.
Ans: There are four non-farm activities carried out in village Palampur. They are,
a) Dairy
b) Small – Scale manufacturing
c) The Shopkeepers of Palampur
d) Transport

a) Dairy
1. Dairy is a common activity in many families of Palampur.

2. People feed their buffalos on various kinds of grass and the Jawar and Bajra that
grows during the rainy season.

3. Two traders from Shahpur town have set up collection cum chilling centres at Raiganj
from where the milk is transported to far away towns and cities.

b) Small -Scale Manufacturing

1. Less than 50 people are engaged in manufacturing in Palampur.

2. Manufacturing in Palampur involves very simple production methods and is done on a

small scale.

3. They are carried out mostly at homes or in fields with the help of family labour.

c) The Shopkeepers of Palampur

1. The traders of Palampur are shopkeepers who buy various goods from wholesale
markets in the cities and sell them in the village.

2. Small general store sells a wide range of items like rice, wheat, sugar, tea, oil, biscuits,
soap, toothpaste, batteries, candles, notebooks, pen, pencil, even some cloth.

3. A few families whose houses are close to the bus stand have used a part of the space to
open small shops. They sell eatables.

d) Transport
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 1. There are varieties of vehicles on the road connecting Palampur to Raiganj.

2. Means of transport available are rickshaw, tonga, jeep, tractor, trucks, and people
driving the traditional bullock cart and bogey.

3. They ferry people and goods from one place to another, and in return get paid for it.
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