1.13 Constitutional Reform a three member commission headed by the Commissions former Chief Justice of India M.M.Punchchi was set up by the then Government to take a The National Commission to Review the fresh look at relative roles and responsibilities Working of the Constitution was set up by a of various levels of Government and their resolution of the Government of India in 2000 inter-relations. headed by M.N.Venkatachaliah. In April 2007,

Recap

„„ The Constitution of India was framed by a Constituent Assembly set up under the Cabinet Mission Plan, 1946. „„ The Preamble of our Constitution states that India is a Sovereign Socialist Secular Democratic Republic. „„ The word ‘Citizen’ is derived from the Latin term ‘Civis’. It means resident of a City State. „„ According to Dr. Ambedkar, Article 32 is “the heart and soul of the whole Constitution”. „„ The Fundamental Duties in the Indian Constitution are inspired by the Constitution of former USSR. „„ In 2004, the Government of India decided to create new category of languages called as “classical languages”. „„ Article 368 of the Constitution in Part XX, deals with the powers of Parliament to amend the Constitution and its procedure.

GLOSSARY

Preamble the introduction to the constitution of India 믁கꯍꯁரை Secular state A state which protects all religions equally சமய母 சார㞪ற㞱 அர毁 Discrimination unfair treatment of a person or group பா埁பா翁 Writ written command of court நீதிப்போணை Sovereignty supreme power or authority இறையாண்ம Heritage something handed down from one’s ancestors பாரம㞪쎿யம Autonomy independence in one’s thoughts or actions தன்னட்ச Imminent coming up உடன羿 Proclamation an announcement பிரகடனம

EVALUATION (a) Republic, democratic, secular, socialist, sovereign I Choose the (b) Sovereign, socialist, secular, Correct republic, democratic Answer. (c) Sovereign, republic, secular, 1. Which of the socialist, democratic following sequences (d) Sovereign, socialist, secular, in right regarding the democratic, republic Preamble?

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Unit I - INDIAN CONSTITUTION.indd 177 10-04-2019 09:56:28 2. How many times has the Preamble to the 8. Which one of the following rights was Constitution of India amended? described by Dr. B.R. Ambedkar as the (a) Once (b) Twice heart and soul of the Constitution? (c) Thrice (d) Never (a) Right to freedom of religion 3. The Indian Constitution gives to its (b) Right to equality citizens (c) Right to Constitutional remedies (a) Double Citizenship (d) Right to property (b) Single Citizenship 9. How can the Fundamental Rights be (c) Single Citizenship in some States and suspended? double in others (a) If the Supreme Court so desires (d) None of the above (b) If the Prime Minister orders to this 4. A foreigner can acquire Indian effect citizenship through (c) If the President orders it during the (a) Descent national emergency (b) Registration (d) All of the above (c) Naturalisation 10. We borrowed the Fundamental Duties (d) All of the above from the 5. Find the odd one out. (a) American Constitution (a) Right to Equality (b) Canadian Constitution (b) Right against Exploitation (c) Russian Constitution (c) Right to Property (d) Irish Constitution (d)Cultural and Educational Rights 11. The Directive Principles can be classified 6. One of the following is not an instance into of an exercise of a fundamental right? (a) Liberal and Communist principles (a) Workers from Karnataka go to Kerala (b) Socialist and Communist principles to work on the farms (c) Liberal, Gandhian and Communist (b) Christian missions set up a chain of principles missionary schools (d) Socialist, Gandhian and Liberal (c) Men and Women government principles employees got the same salary. 12. Under which Article financial emergency (d) Parents property is inherited by their children can be proclaimed? (a) Article 352 (b) Article 356 7. If the fundamental rights of Indian (c) Article 360 (d) Article 368 citizen are violated, they possess the right to have an access to 13. The procedure for the amendment of the (a) The Parliament Indian Constitution is given in (b) The Attorney General (a) Article 352 (b) Article 356 (c) The President of India (c) Article 360 (d) Article 368 (d) The Supreme court of India

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Unit I - INDIAN CONSTITUTION.indd 178 10-04-2019 09:56:28 14. Which of the following committees/ 5. What are the classical languages in commissions made recommendations India? about the Centre-State Relations? 6. What is national emergency? 1. Sarkaria Commission 7. List out the three heads of the relations 2. Rajamannar Committee between the Centre and the States. 3. M.N.Venkatachaliah Commission V Answer in Detail. Select the correct answer from the codes given below 1. Explain the salient features of the Constitution of India. (a) 1, 2 & 3 (b) 1 & 2 2. Point out the Fundamental Rights. (c) 1 & 3 (d) 2 & 3 3. Write briefly on the Right to II Fill in the Blanks. Constitutional Remedies. 4. Mention the differences between 1. The concept of constitution first Fundamental Rights and Directive originated in ______. Principles of State Policy. 2. ______was elected as the temporary President of the Constituent Assembly. VI Project and activity. 3. The Constitution of India was adopted 1. Collect information about the various on______. members of the Constituent Assembly 4. ______writs are mentioned in Article and their social background. 32. 2. Collect the pictures of the Members of 5. Fundamental duties have been the Drafting Committee and their social given to the citizen of India under background. Article______. VII Life Skill. III Match the Following. 1. Prepare a chart containing the Rights and Duties of citizens and display it in 1. Citizenship Act - Jawaharlal Nehru your class room. 2. The Preamble - 42nd Amendment 3. The mini - 1955 REFERENCE BOOKS Constitution 1. D.D. Basu - Introduction of the 4. Classical - 1962 Constitution of India, S.C. Sarkar & language Sons (Private) Ltd, 1982. 5 National - Tamil 2. PM Bakshi - The Constitution of India, Emergency Universal Law Publishing - an imprint of LexisNexis, 2018. IV Give short Answers.

1. What is a Constitution? INTERNET RESOURCES 2. What is meant by citizenship? „„ 3. How many types of fundamental rights https://www.india.org/ are listed by the Indian Constitution? T „„https://www.constitution.org/cons/ 4. What is a Writ? india/p03.html

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Unit I - INDIAN CONSTITUTION.indd 179 10-04-2019 09:56:29 Unit - 2

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Learning Objectives

„„To know the powers of the President and Vice President „„To Know the about the Prime Minister and Council of Ministers „„To understand the Lok Sabha and Rajya Sabha „„To know about Supreme Court

Introduction Indian constitution, by giving due recognition to the vastness and plural character of our The Central Government is the supreme nation, have provided a federal arrangement government in our country. The head for her governance. The Central Government quarter of the Central Government is at New consists of three organs, namely, Union Delhi. Articles 52 to 78 in part V of Indian Executive, Legislature and Judiciary. The Constitution deals with the Union Executive. Union Executive consists of the President of Our Constitution provides for a democratic India, the Vice-President, and the Council of form of government. The makers of the Ministers headed by the Prime Minister, and

Central Government

Executive Legislature Judiciary

President of India Parliament Supreme Court of India

Vice-President Chief Justice of India Rajya Sabha Lok Sabha

Prime Minister Other Judges 27 238 Elected 12 Nominated by the State Assemblies by the President Council of Ministers 543 Elected by the people 2 Nominated by the President

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Unit 2 -Central Government(06.03.2019).indd 180 10-04-2019 09:58:36 the Attorney General of India. The Legislature 2.1.1 Qualification for the is known as the Parliament. It consists of two election as President houses, namely the Rajya Sabha and the Lok Sabha. The Union Judiciary consists of the The constitution lays down qualifications Supreme Court of India. for a Presidential candidate. „„He should be a citizen of India. 2.1 The President of India „„He must have completed the age of thirty- five years. In the scheme „„ of parliamentary He must not hold any office of profit under system of the Union, State or local Government. government „„He should have the other qualifications provided by the required to become a member of the Lok constitution, Sabha. the President „„His or her name should be proposed is the nominal by at least ten electors and seconded executive by another ten electors of the Electoral authority. The College which elects the President. chief executive of DR. RAJENDRA PRASAD (First President of India) The President cannot be a Member of the Indian union Parliament or of a State Legislature; if he is is the President. He is designated as the First a member of any legislature, his seat will be citizen of India. He is the supreme commander deemed to have been vacated on the date he / of the armed forces. The President is also the she assumes the office of President. Constitutional head of the Union Executive. He is also responsible for constituting the 2.1.2 Election of the President judiciary. According to Article 53 of the The President is elected by an electoral constitution, the executive power of the college in accordance with the system of Union shall be vested in the President which proportional representation by means shall be exercised by him directly or through of single transferable vote. The Electoral officers subordinate to him in accordance with College consists of the elected members of Constitution. both houses of Parliament and the elected It is a well known fact that members of the states and elected members the President of India resides of National Capital Territory of Delhi and at Rashtrapati Bhavan in New Puducherry. Once elected as the President Delhi. The residence and the has to take an oath of office before the Chief office of the President are Justice of India. The President is elected for a located in the same building. However he term of five years and can be re-elected. has two other office cum residences where 2.1.3 Powers of the President he conducts office at least once a year. They are 'The Retreat Building' at Shimla and the The powers and functions of the President 'Rashtrapati Nilayam' at Hyderabad. These of India can be broadly classified under the locations one in North and other one is South following categories. symbolise the unity of the country and unity Executive Powers of the diverse culture of the people. The constitution vests in the President of India all the executive powers of the Central Government. Article 77 requires that every

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Unit 2 -Central Government(06.03.2019).indd 181 10-04-2019 09:58:36 general election and also at the beginning List of Presidents of India of the first session each year. This address 1. Thiru. Rajendra Prasad 1950 to 1962 is essentially identical in nature to a Speech 2. Thiru. Sarvepalli Radhakrishnan 1962 to 1967 from the Throne.The President summons 3. Thiru. Zakir Hussain 1967 to 1969 Parliament at least twice in a year. 4. Thiru. V.V Giri 1969 to 1974 He may send messages to either House of 5. Thiru. Fakhruddin Ali Ahmed 1974 to 1977 the Parliament with respect to a bill pending in 6. Thiru. Neelam Sanjiva Reddy 1977 to 1982 7. Thiru. Giani Zail Singh 1982 to 1987 the House. All bills passed by the Parliament 8. Thiru. R Venkataraman 1987 to 1992 become “Laws of Acts” only after getting 9. Thiru. Shankar Dayal Sharma 1992 to 1997 assent of the President. Money bills cannot 10. Thiru. K R Narayanan 1997 to 2002 be introduced in the Parliament without his 11. Thiru. APJ Abdul Kalam 2002 to 2007 approval. President terminates the sessions 12. Tmt. Pratibha Patil 2007 to 2012 of both or any of the Houses of Parliament. 13. Thiru. Pranab Mukherjee 2012 to 2017 He can even dissolve the Lok Sabha before the 14. Thiru. Ram Nath Kovind 2017 to till now expiry of the term of the House. He nominates 12 persons who are eminent executive action of the Union shall be taken in literature, science, sports, art and social in the name of the President. So he has to service to the Rajya Sabha. He can also make many appointments to key-offices to nominate two persons belonging to Anglo- run the administration. Indian Community to the Lok Sabha, if in He appoints the Prime Minister and the his opinion, that community is inadequately other members of the Council of Ministers, represented in the House. distributing portfolios to them on the advice Financial Power of the Prime Minister. He is responsible for making a wide variety of appointments. These Money bill can be introduced in include the appointment of Governors of the Parliament only with his prior States, the Chief Justice and other Judges of the recommendation. Annual Budget of the Supreme Court and high Courts, the Attorney Central Government is presented before the General, the Comptroller and Auditor Lok Sabha by the Union Finance Minister General, the Chief Election Commissioner only with the permission of the President. and other Election Commissioners the He causes to be laid before the Parliament Chairman and other Members of the Union the annual financial statement (the Union Public Service Commission Ambassadors Budget). The Constitution of India places the and High Commissioners to other countries. Contingency Fund of India is at the disposal of the President. No demand for a grant can be He appoints a commission to investigate made except on his recommendation. He can into the conditions of SCs, STs and other make advances out of the contingency fund backward classes.He is the supreme commander of the defense forces of India, in of India to meet any unexpected expenditure. this capacity the President can appoint Army, He constitutes a finance commission after Navy, and Air Chiefs. every five years or on the demand of the states to recommend the distribution of revenues Legislative Powers between the Centre and the States.

The President is an integral part of the Judicial Powers Union Parliament. He inaugurates the session of the Parliament by addressing it after the Article 72 confers on the President power to grant pardons, reprieves, respites or

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Unit 2 -Central Government(06.03.2019).indd 182 10-04-2019 09:58:36 remissions of punishment, or to commute „„Under Article 360, the President is vested the sentence of any person convicted of an with the power to proclaim Financial offence. In all cases where the punishment Emergency, if he is satisfied that the financial or sentence is by a court martial; in all cases stability or, the credit of India or any part of where the punishment or sentence is for and India is threatened, by any reason. offence against a Union law; and in all cases where the sentence is a sentence of death. The President is not answerable to any court Kerala and Punjab are the States of law for exercise of his/she power (however where the President’s Rule was He can be subjected to impeachment by the imposed for maximum number Parliament). of times i.e., nine times in both States. Military Powers Article 53(2) lays down that “the supreme command of the Defence Force of the Union 2.1.4 Removal of the President shall be vested in the President and the exercise thereof shall be regulated by law”. The President shall hold office for a term of The President is thus declared to be the five years from the date on which He enters Supreme Commander of the defence Force of the office. The President may by writing under the country. In the exercise of this power, it is his hand addressed to the Vice-President, the President, who can declare war against a resign his office. The President may, for country and make peace. violation of the Constitution, be removed from office by impeachment in the manner Diplomatic Powers provided in Article 61; The Impeachment The President appoints Indian diplomats to action can be brought about in the form of other countries and receives foreign diplomats resolution in either house of the Parliament. posted to India. The ambassador designate It must be supported by not less than One- becomes ambassador after calling on the Fourth of the total strength of the House for President and presenting his credentials. All its introduction. The President shall, in spite treaties and agreements with foreign States of the conclusion of his term, continue to are entered into, in the name of the President. hold office until his successor enters upon his office. Emergency Powers 2.1.5 Privileges of the President „„The President has been empowered by the Constitution to proclaim Emergency. According to Article 361(1) the President, They are follows: Article 352 confers or the Governor of a state, shall not be power on the President to make a answerable to any court for the exercise and proclamation of Emergency on the performance of the powers and duties of his grounds of war, external aggression, office or for any act done or purporting to be or armed rebellion. This is known as done by him in the exercise and performance National Emergency. of those powers and duties. „„Article 356 confers power on the President to make a proclamation of 2.2 Vice-President State Emergency by declaring that the The vice-President occupies the second Government in a State cannot be run on highest office in the country. He is accorded in accordance of the provisions of the a rank next to the President in the official Constitution. warrant of precedence. This office is

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Unit 2 -Central Government(06.03.2019).indd 183 10-04-2019 09:58:36 modeled on the lines 2.2.3 Removal of the Vice of the American Vice- President President. Article 63 The Vice President may be removed from of the constitution his office by a resolution of the Council of provides for a Vice States passed by a majority of all the then President of India. members of the council and agreed to by the This office has been House of the People. A resolution for this created to maintain the purpose may be moved only after a notice of political continuity of DR. RADHA KRISHNAN at least a minimum of 14 days has been given the state. (First Vice President of India) of such an intention. 2.2.1 Qualification for the 2.2.4 Functions of the Vice election as Vice President President The constitution lays down qualifications The Vice-President is Ex-Officio Chairman for a Vice Presidential candidate. of the Rajya Sabha. As the Chairman of the „„He should be a citizen of India. House, he carries out several functions. „„He must have completed the age of thirty- „„He regulates the proceeding of the House. five years. „„He decides the order of the House. „„He must not hold any office of profit under „„He decides the admissibility of a the Union, State or local Government. resolution or questions. „„He should have the other qualifications „„He suspends or adjourns the House in required to become a member of the case of a grave disorder. Rajya Sabha. „„He issues directions to various committees on matters relating to their functions. 2.2.2 Election and term of the Vice-President Casting Vote Article 66(1) the Vice- According to Article (100) President, like the president, of the Constitution, the vice- is elected not directly by president can\only cast his the people but the method vote when there is a tie over of indirect election. He is the Bill in the Rajya Sabha.It elected by the members means that there is need for one vote only of an electoral college to pass the Bill. So vice-president using his consisting of the member of both Houses discretion power cast his vote in favor or of Parliament. The term of office of the against the Bill. No members have any right Vice President is five years. His office may to oppose his decision. terminate earlier than the fixed term either by resignation, death or by removal. He is „„When the President is unable to discharge eligible for re-election. The Constitution his duties due to illness or absence from does not provide a mechanism of succession the country, he attends to the functions to the office of the Vice – President. Under of the President. When the President is such circumstances, election to the Vice unable to do so due to sickness or when the post of President becomes vacant President shall be held early as possible. Till due to resignation, death, or removal then deputy chairman of the Rajya sabha can by impeachment etc. the Vice-President perform the duties of the chairman of the can act as the President for a maximum Rajya sabha. period of six months.

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Unit 2 -Central Government(06.03.2019).indd 184 10-04-2019 09:58:36 by the President on the advice of the Prime If the posts of President Minister. If no party commands absolute and Vice-President lie vacant, majority in the Lok Sabha, the President can Chief Justice of India works summon the leader of any party who, in his as President. This situation opinion, can manage to form a ministry. The happened in 1969 when Chief President administers to the ministers the Justice M.Hidayutalla was appointed as oath of office and of secrecy. The salaries President of India. and allowances of the Prime Minister and the ministers are determined by the Parliament. A 2.3 Prime Minister person who is not a member of the Parliament can be appointed as a minister but he has to Article 74 (1) says: get himself elected to the Parliament within There shall be a council six months. Ministers are individually as well of ministers with the as collectively responsible to the Lok Sabha. Prime Minster as the head to aid and advice 2.3.1 Duties and functions of the President. He may Prime Minister direct the council to reconsider their Article 78 mentioned the duties of the advice, but is bound Prime Minister: JAWAHARLAL NEHRU by the advice given (First Prime Minister of India) „„The Prime Minister decides the rank after reconsideration. of his ministers and distributes various The post of Prime Minister of India has departments. adopted the Westminster (England) model of „„The Prime Minister decides the dates and constitutional democracy. the agenda of the meeting of the Cabinet The leader of the majority party in Lok Sabha which he presides. is appointed by the President as the Prime „„The Prime Minister is the Head of the Minister. The other ministers are appointed Cabinet and the other ministers are his colleagues. „„ List of Prime Ministers of India The Prime Minister informally consults two or three of his senior colleagues when 1. Thiru. Jawaharlal Nehru 1947–64 he does not convene a Cabinet meeting. 2. Thiru. Lal Bahadur Shastri 1964–66 „„The Prime Minister supervises the work 3. Tmt. Indira Gandhi 1966–77 of various ministers. 4. Thiru. Morarji Desai 1977–79 „„ 5. Thiru. Charan Singh 1979–80 To converse to the President all decisions 6. Tmt. Indira Gandhi 1980–84 of the Council of Ministers connecting 7. Thiru. Rajiv Gandhi 1984–89 to the government of the affairs of the 8. Thiru. V.P. Singh 1989–90 Union and proposals for legislation. 9. Thiru. Chandra Shekhar 1990–91 „„The Prime Minister act as the link 10. Thiru. P.V. Narasimha Rao 1991–96 between the President and the Council of 11. Thiru. Atal Bihari Vajpayee May 1996 Ministers. 12. Thiru. D. Deve Gowda 1996–97 „„The Prime Minister is the leader of the 13. Thiru. I.K. Gujral 1997–98 nation and chief spokesperson of the 14. Thiru. Atal Bihari Vajpayee 1998–2004 country. 15. Thiru. Manmohan Singh 2004–14 „„As the leader of the nation, the Prime 16. Thiru. Narendra Modi 2014–till now Minister represents our nation at all

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Unit 2 -Central Government(06.03.2019).indd 185 10-04-2019 09:58:37 international conferences like the but they do not participate in the meetings of commonwealth, summit of the non the cabinet unless invited to do so. aligned nations and SAARC nations. Deputy Ministers 2.3.2 Council of Ministers They are the lowest ranked ministers in After the elections, the President of India, the cabinet. They assist either the Ministers on the advice of the Prime Minister, appoints of Cabinet or State in the performance of the the council of ministers. Sometimes a non duties entrusted to them. – member of the Parliament too may be appointed. However, he must get elected to 2.4 Parliament of India either of the Houses of the Parliament within The parliament is the legislative organ of the a period of six months. The Constitution of Union government. Article 79 to 122 in part V India restricts the number of the Council of of the constitution deal with the organization, Ministers including the Prime Minister to composition, duration, officers, procedures, fifteen per cent of the total members of the privileges, powers and so on of the Parliament. Lok Sabha. The Parliament of India consists of three parts they are the President, Rajya Sabha (the Categories of the Ministers council of States) and Lok Sabha (the House The ministers are classified under three of the People). The Rajya Sabha is the Upper ranks House and the Lok Sabha is the Lower House it is termed as bicameral legislature. (i) Cabinet Ministers (ii) Ministers of State (iii) Deputy Ministers.

Cabinet Ministers The Cabinet is an informal body of senior ministers who form the nucleus of administration. Important decisions of the Parliament government are taken by the Cabinet, such as 2.4.1 Rajya Sabha defense, finance, external affairs and home. The Cabinet recommends to the President to The council of State or Rajya Sabha consists promulgate an ordinance. It is instrumental in of 250 members out of whom 238 represent moving Amendments to the Constitution. The the states and the Union Territories, elected Finance bills have their origin in the Cabinet by the method of indirect election. and then they are introduced in the Lok Sabha The 12nominated members shall be chosen with the Presidents recommendations. The by the President from amongst persons having Cabinet decides the foreign policy of the ‘special knowledge or practical experience in Government approves international treaties the field of literature, science, sports, art and and plays a significant role in the appointment social service. of Ambassadors to various countries. Qualification of the Members Ministers of State A person seeking membership of These ministers belong to the second Rajya Sabha must possess the following category of ministers in the council. They are qualifications. also in charge of ministries or departments

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Unit 2 -Central Government(06.03.2019).indd 186 10-04-2019 09:58:37 „„He should be a citizen of India. Legislative Assemblies they elect the „„He should not be less than 30 years of age. President and Vice President. „„He should not hold any office of profit „„It has power in the impeachment under any Government. procedure of president and judges of supreme court and high court. „„He should be a person with sound mind and monetarily solvent. „„Rajya Sabha has the power to make a state list subject into National Importance. „„ He should have such other qualification If two third majority of the members as may be approved by the Parliament for of Rajya Sabha passes a resolution to that reason from time to time. support it. Rajya Sabha can also create or „„He should not be the member of Lok abolish an All India Service. If majority Sabha or any other legislature. of members (2/3 of Total Members) supports it. Term of House The Rajya Sabha is a permanent house and 4.4.2 Lok Sabha it cannot be dissolved. The members of the The Lok Sabha is the popular house of Rajya Sabha are elected for a term of six years. the Indian Parliament and contains elected One third of the members of Rajya Sabha representatives of the people. Maximum retire every two years, and new members number of members can be elected for Lok are elected to fill the seats thus vacated. Sabha is 552. The Lok Sabha as of today has 543 The Vice President of India is the Ex-officio elected members. Out of these, 530 members Chairperson of the Rajya Sabha. The Deputy are elected from different states and 13 members Chairperson of the Rajya Sabha is elected by from the Union Territories. The President the members of the Rajya Sabha. generally nominates two members belonging to the Anglo-Indian community. At present, the Election Lok Sabha consists of 545 members. Members of Rajya Sabha are elected by the elected members of the ‘State Legislative Qualification of the Members Assemblies’ in accordance with the system „„He should be a citizen of India. of proportional representation by means of „„He should not be less than 25 years of age. the single transferable vote. This process of „„ election is called “indirect election” as they He should have his name in electoral rolls are not elected by the people directly. in some part of the country.

Functions of the Rajya Sabha Money Bill „„Any bill (except the money bills) needs Rajya Sabha does not have to be approved by Rajya Sabha to get any power to amend or reject passed. If the bill gets stuck for more than the Money bill. Lok Sabha can six months then President calls for a joint only introduce Money bill and session of both the houses to resolve the once it is approved by the Lok Sabha, it is deadlock. passed to Rajya Sabha for its approval. If „„ It has the same power as Lok Sabha, Rajya Sabha fails to pass it within 14 days for passing any bill for constitutional then the bill gets passed without the approv- amendment. al of Rajya Sabha. Also, Lok Sabha does not „„ The members of Rajya Sabha have the need to consider the amendments proposed electoral power for selection of President, by the Rajya Sabha. Lok Sabha can reject Vice President. Together with the all the proposals and pass it. members of Lok Sabha and all the State

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Unit 2 -Central Government(06.03.2019).indd 187 10-04-2019 09:58:37 „„He should not hold any office of profit „„It has the same power as Rajya Sabha under the Union or State Government. to participate in case of impeachment „„He should be mentally sound and of president and the judges of Supreme Court. economically solvent. „„It has equal power as Rajya Sabha The term of the House in passing any bill for constitutional amendment. Generally the Lok Sabha enjoys a term of „„Lok Sabha members have the power to five years from the date of its first session. It elect the president, vice president. can be dissolved by the President before the „„Motion of no confidence can only be expiry of its term on the advice of the Prime introduced in Lok Sabha. If it is passed Minister. The emergency provisions of the then the prime minister and other council Constitution enable the President to prorogue of ministers need to resign from their post. or dissolve the Lok Sabha either on the advice of the Prime Minister or on being convinced Elected members of the that no party or no alliance of parties enjoys Parliament from Tamil Nadu. necessary majority support in the House. „„Rajya Sabha – 18 members Election „„Lok Sabha – 39 members

The members of the Lok Sabha are directly elected by the people of the constituencies 2.4.3 The Speaker created on the basis of population. The The Lok Sabha is presided over by the Election Commission of India arranges, ‘speaker’ who is elected by its members. The supervises and conducts elections to the Lok office of the Speaker occupies an essential Sabha. For sake of elections to Lok Sabha position in our Parliamentary democracy. the entire nation is divided into number of The Speaker continues to be in the office even constituencies which are formed more or less in the houses dissolved, till a new Speaker is on the basis of the population. elected by the new Lok Sabha. The Speaker “Universal Adult Franchise” is followed presides over a joint sitting of the two Houses while electing the members of the Lok Sabha. of Parliament. He has the power to decide All Indian Citizens above 18 years of age who whether a Bill is Money Bill or an ordinary are registered as voters will vote for their one. The decision of the Speaker on whether representatives. a Bill is Money Bill is final. Under the anti defection of 1985, the speaker is empowered to decide whether a member of the Lok Sabha is disqualified or not on the basis of the 10th schedule of the constitution. While the office of speaker is vacant or the speaker is absent from the sitting of the house, the deputy speaker presides, except when a resolution for his own removal is under consideration.

Parliament Session Budget Session from February Universal Adult Franchise to May Functions of the Lok Sabha Monsoon Session from July to „„Any bill can be introduced and passed in September the Lok sabha (Including Money Bill). Winter Session from November to December

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Unit 2 -Central Government(06.03.2019).indd 188 10-04-2019 09:58:37 2.4.4 Powers and Functions of such other duties of a legal character that the Parliament are assigned to him by the President and „„The Parliament of India has the functions of discharge the functions conferred on him Legislation, overseeing of administration, by the constitution are any other law. In the passing of Budget, ventilation of public performance of his official duties, Attorney grievances, discussion of various subjects General of India has the right of audience in like development plans, international all courts in the territory of India. Further he relations and internal policies. has the right to speak and to take part in the „„Parliament is also vested with powers proceedings of both Houses of the Parliament to impeach the President and to remove or their joint sitting and any committee of Judges of the Supreme Court and High the Parliament of which he may be named Courts, Chief Election Commissioner a member, but without a right to vote. He and Comptroller and Auditor-General of enjoys all the privileges and immunities that India in accordance with the procedure are available to a member of Parliament. laid down in the Constitution. „„The Parliament exercises control over the 2.6 Judiciary executive through asking questions and supplementary questions, moving motions Judiciary is the third organ of the of adjournment, discussing and passing government. It plays a vital role in protecting resolutions, discussing and pushing censure the rights and freedom of the citizens. It motion or vote of no-confidence. also plays an important role in analyzing and „„The Parliament has the power to change interpreting the provisions of laws and the the boundaries of the States. Constitution. 2.5 Attorney General of Supreme Court India The “Supreme Court is the Guardian of the Constitution”. Our constitution provides The Constitution (Article 76) has provided for the establishment of an independent and for office of the Attorney General for India. integrated judiciary with ‘supreme court’ as He is the highest law officer in the country. the uppermost court in the country. Our He is appointed by the President. He must be judiciary is autonomous of the Legislative a person who is qualified to be appointed the and Executive wing of the Union and State Judge of the Supreme Court. In other words, Government. An integrated judiciary means he must be a citizen of India and he must have a single judicial hierarchy for the whole been a judge of some High Court for five years country. The judiciary plays an important or an advocate of some High Court for 10 role in defensive the rights and freedom of years or eminent jurist, in the opinion of the the citizens. It plays an important role in President. He holds office during the pleasure analyzing and interpreting the necessities of of the President. This means that he may be laws and the constitution. removed by the President at any time. He may also quit his office by submitting his resignation to the President. The Supreme Court of India, New Delhi was inaugurated 5.1 Duties and Functions of on January 28, 1950. It Attorney General of India succeeded the Federal Court To give advice to the Government of of India, established under the India upon such legal matters which are Government of India Act of 1935. referred to him by the President. To perform

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Unit 2 -Central Government(06.03.2019).indd 189 10-04-2019 09:58:37 in “New Delhi”. It may also sit any other place in India which may be decided by the Chief Justice of India with the approval of the President of India.

2.6.4 Powers and Functions of the Supreme Court (a) Judicial Functions Supreme Court The “Supreme Court is the Guardian of 2.6.1 Composition of the the Constitution”. The followings are the Supreme Court functions of the Supreme Court. At the commencement of the constitution (b) Original Jurisdiction in 1950 our supreme court consisted of 8 The cases which are brought directly in judges including the chief justice. At present, the first instance to the Supreme Court come the Supreme Court consists of 28 judges under original jurisdiction. These may including the chief justice. be (i) dispute between the Government of 2.6.2 Appointment of Judges India and one or more States of (ii) Dispute between two or more states (iii) the cases The Chief Justice of Supreme Court in India involving fundamental rights (dispute over is appointed by the President of India. The the enforcement) come under the jurisdiction other judges are appointed by the President in of the Supreme Court. The writs issued by consultation with the collegiums with Chief the Supreme Court for the enforcement of the Justice Head. fundamental rights are, (a) Habeas Corpus 2.6.3 Qualification of Supreme (b) Mandamus (c) Prohibition (d) Certiorari Court Judges (e)Quo Warranto. „„He must be a citizen of India. (c) Appellate Jurisdiction „„He should have worked as a Judge of a The Supreme Court is the final appellate High Court for at least 5 years. court in the country. As regard the Appellate „„He should have worked as an advocate of jurisdiction, the Supreme Court hears appeals High Court for at least 10 years. against the decisions of High Court in “civil, „„He is in the opinion of the President, a criminal and Constitutional” cases with a distinguished Jurist. certificate from the High Court that it is fit to The constitution also provides for the appeal in the Supreme Court. Such a case can appointment of judges to the Supreme Court be brought before the Supreme Court only if on an ad-hoc (temporary) basis. The Chief the High Court certifies that the case invites Justice and other judges of the Supreme a substantial of law as to the interpretation of Court hold the office up to the age of 65 the Constitution. years. The judges of the Supreme Court (d) Advisory Jurisdiction can resign before their term by giving their resignation in writing to the President. The The Constitution confers on the President Parliament also has power to remove the the power to refer to the Supreme Court any Judges by invoking impeachment provisions. question of law or fact which in his opinion is The Supreme Court has its permanent seat of public importance.

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Unit 2 -Central Government(06.03.2019).indd 190 10-04-2019 09:58:37 (e) Miscellaneous Jurisdiction (f) Judicial Review The Supreme Court is The power of the judiciary to declare a „„The law declared by Supreme Court is law as unconstitutional is known as “Judicial binding on all courts within the territory Review”. The Supreme Court enjoys this of India. power. The Supreme Court of India has Individual Review Power with regard to „„The Supreme Court is authorized to make rules for regulating, generally the 1) Dispute between the Centre and the States practice and procedure of the court with 2) To interpret and clarify a provision of the the approval of the President. constitution about which there are some doubts and differences of opinion. „„The Supreme Court has complete control 3) Protecting the fundamental rights, over its own establishment. 4) Those laws passed by the legislatures which are not in accordance with the Constitution.

Recap „„The Central Government consists of three organs, namely, Union Executive, Legislature and Judiciary. „„President appoints the Prime Minister and the other members of the Council of Ministers. „„The Parliament of India consists of three parts they are the President, Rajya Sabha and Lok Sabha. „„The Attorney General for the India is the highest law officer in the country. He is appointed by the President of India. „„The “Supreme Court is the Guardian of the Constitution”. „„The Chief Justice of Supreme Court in India is appointed by the President of India.`

GLOSSARY

Terminate bring to an untimely end. 믁羿ퟁ埍埁 க�ொ迍翁 வ쏁த쯍 Contingency fund an amount of money that can be used to pay for எ鎿ர்பரா செலퟁ ꎿ鎿 problems that might happen. Pardon Absolving the convict of all guilt and punishment. ப�ொ鏁மꟍꞿꯍꯁ Remission Quantitative reduction of punishment without தண㞟னை 埁றைꯍꯁ affecting Nature of punishment. Precedence priority of importance. 믁ꟍꟁ쎿மை Ex-officio because of an office. பதힿ뾿ꟍ ꎿ뮿த்மாக

EVALUATION b) The Chief Justice c) The Prime Minister I. Choose the correct answer d) Council of 1. The Constitutional Head of the Union is Ministers a) The President

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Unit 2 -Central Government(06.03.2019).indd 191 10-04-2019 09:58:37 2. Who is the real executive in a 9. The Chief Justice and other Judges of the parliamentary type of government? Supreme court are appointed by: a) Army a) The President b) The Prime Minister b) TheAttorney General c) The President c) The Governor d) Judiciary d) The Prime Minister 3. Who among the following decides 10. Dispute between States of India comes whether a Bill is a Money Bill or not? to the Supreme Court under: a) The President a) Appellate Jurisdiction b) Attorney General b) Original Jurisdiction c) Parliamentary Affairs Minister c) Advisory Jurisdiction d) Speaker of Lok Sabha d) None of these 4. The Council of Ministers is collectively 11. If you are elected as the President of India, responsible to the: which of the following decision can you take on your own? a) The President a) Nominate the leaders of your choice to b) Lok Sabha the council of minister c) The Prime Minister b) Ask for reconsideration of a bill passed d) Rajya Sabha by both the Houses 5. The Joint sittings of Indian Parliament c) Select the person you like as Prime for transacting legislative business are Minister presided over by? d) Dismiss a Prime Minister who has a a) Senior most member of Parliament majority in the Lok Sabha b) Speaker of the Lok Sabha II. Fill in the blanks c) The President of India 1. ______Bill cannot be introduced d) The Chairman of the Rajya Sabha in the Parliament without President’s 6. What is minimum age laid down for a approval. candidate to seek election to the Lok 2. ______is the leader of the nation Sabha? and chief spokesperson of the country. a) 18 years b) 21 years 3. ______is the Ex-officio c) 25 years d) 30 years Chairperson of the Rajya Sabha. 7. The authority to alter the boundaries of 4. The President generally nominates two state in India rest with? members belonging to the ______a) The President community to the Lok Sabha. b) The Prime Minister 5. ______has the right to speak and c) State Government to take part in the proceedings of both d) Parliament Houses of the Parliament. 8. Under which Article the President 6. The Chief Justice and other judges of the is vested with the power to proclaim Supreme Court hold the office up to the Financial Emergency age of ______years. a) Article 352 b) Article 360 7. ______is the Guardian of the Constitution. c) Article 356 d) Article 365

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Unit 2 -Central Government(06.03.2019).indd 192 10-04-2019 09:58:37 8. At present, the Supreme Court consists b) (A) is false but (R) is true of ______judges including the chief c) Both (A) and (R) are true and (R) is justice. the correct reason for(A) III. Choose the correct d) Both (A) and (R) are true and (R) is statement not the correct reason for(A) 1. i) Total members of the Rajya Sabha is 250. IV. Match the following ii) The 12 nominated members shall be chosen by the President from amongst 1. Article 53 - State Emergency persons experience in the field of 2. Article 63 - Internal Emergency literature, science, art, or social service - Executive power of 3. Article 356 iii) The Members of the Rajya Sabha should President - Office of the Vice not be less than 30 years of age. 4. Article 76 iv) The members of the Rajya Sabha are President - Office of the Attorney directly elected by the peoples. 5. Article 352 a) ii & iv are correct General b) iii & iv are correct V. Answer the brief questions c) i & iv are correct 1. How is President of India elected? d) i, ii & iii are correct 2. What are the different categories of Ministers at the Union level? 2. i) The Chief Justice and other judges of the Supreme Court hold the office up to the 3. What is the qualification of Judges of the age of 62 years. Supreme Court? ii) Judiciary is the third organ of the 4. Write a short note on Speaker of the Lok government. Sabha? iii) The cases involving fundamental 5. What is Money Bill? rights come under the Appellate 6. List out any two special powers of the jurisdiction of the Supreme Court. Attorney General of India? iv) The law declared by Supreme Court VI. Answer in detail is binding on all courts within the 1. Describe the powers and functions of territory of India. the President of India. a) ii & iv are correct 2. Explain the Jurisdiction and powers of b) iii & iv are correct the Supreme Court of India? c) i & iv are correct 3. What are the Duties and functions of Prime Minister of India? d) i & ii are correct 4. Critically examine the Powers and 3. Assertion (A): The Rajya Sabha is Functions of the Parliament. a permanent house and it cannot be dissolved 5. List out the functions of the Lok Sabha and the Rajya Sabha. Reason (R): One third of the members of Rajya Sabha retire every two years, VII. Project and activity and new members are elected to fill the I. Organise a mock parliament in your seats thus vacated. class. Discuss the role of President, a) (A) is false but R is true Prime Minister and Ministers.

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Unit 2 -Central Government(06.03.2019).indd 193 10-04-2019 09:58:37 II. Bring out the differences and similarities 3 Subhash Kashyap - Our Constitution, between the US and Indian President’s National Book Trust, India, 2011.

REFERENCE BOOKS INTERNET RESOURCES

1. D.D. Basu - Introduction of the „ https://www.india.org/ Constitution of India, S.C. Sarkar & „ https://presidentofi ndia.nic.in/ Sons (Private) Ltd, 1982. „ http://vicepresidentofi ndia.nic.in/ 2. PM Bakshi - The Constitution of India, „ http://www.pmindia.gov.in/en/ Universal Law Publishing - an imprint „ of LexisNexis, 2018. https://www.sci.gov.in/

ICT CORNER

Through this activity you will know about the current Governing bodies and also about the Lok Sabha & the Rajya Sabha.

Steps • Open the Browser and type the URL given below. • Click on the items under the who’s who menu to view the current Governing bodies and also know about the Lok Sabha & the Rajya Sabha. • For example, click on the president from the leftside menu to view the details of the President. • Likewise you can view all the details of the current Governing bodies.

Website URL: https://www.india.gov.in/my-government/whos-who

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Unit 2 -Central Government(06.03.2019).indd 194 10-04-2019 09:58:38 Unit - 3

State Government

Learning Objectives

„„Students acquire knowledge about the structure of the State Government „„To understand the powers and functions of the Governor, Chief Minister, Ministers and Speaker „„To know about the State Legislature „„Student understand the functioning of the judicial system in the State

Introduction Government, in part VI of the constitution from Article 152 to 237, which is applicable The Constitution of India envisages for a to all the states, save only the state of Jammu federal government, having separate systems and Kashmir which has a separate constitution of administration for the union and the states. for its government under Article 370. The There are 29 states, 6 union territories and one structure of the State Government, as formed national capital territory known as Delhi in in the Centre, consists of three branches. These India. The constitution contains provisions for are the Executive, the Legislature and the the governance of both the union and the states. Judiciary. It lays down a uniform structure for the State

State Government

Executive Legislature Judiciary

Governor High Court Legislative Legislative Council Assembly Chief Minister (Upper House) (Lower House) District Courts

Council of Other Courts Ministers

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3 State Government(06.03.2019).indd 195 10-04-2019 10:01:19 The Constitution of Jammu and the matter of appointing a person as Governor Kashmir was adopted on the of a State. He should not be a resident of the 17 November, 1957 and came State concerned and, the State Government into force on 26 January, 1957. concerned is consulted and its views are sought The Constitution of India grants regarding the proposed choice. special status to Jammu and Kashmir among According to Article 158 (3A), where the same Indian states, and it is the only state in India person is appointed as Governor of two or more to have a separate constitution. The Directive States, the emoluments and allowances payable Principles of the State Policy and fundamen- to the Governor shall be allocated among the tal duties of the constitution are not applica- States in such proportion as the President may ble to the state of Jammu and Kashmir. Right by order determine. to Property, which is denied as a fundamental Sarkaria Commission on right to rest of the India, is still guaranteed in Centre , State relations Jammu and Kashmir. suggested that the appointment of the Governor should be 3.1 The Executive made: i) From a panel to be prepared by the State 3.1.1 The Governor Legislature or The Governor is the constitutional head of ii) From a panel to be prepared by the State the state executive. The administration of a Government (in effect the Chief Minister) or State is carried on in the name of the Governor. invariably with the concurrence of the State Generally, there is a separate Governor in each Chief Minister ; or State but if the situation warrants so, the same iii) Invariably in consultation with the State person may be appointed as the Governor of Chief Minister. two or more States. Article 154 vests the executive power of the 3.1.3 Qualification State in the Governor. Article 154(1) holds that Article 157 and Article the executive power of the State shall be vested 158 of the Constitution in the Governor and shall be exercised by him of India specify eligibility either directly or through officers subordinates requirements for the post of to him in accordance with this Constitution. governor. They are as follows: „„He should be a citizen of India. 3.1.2 Appointment „„He must have completed 35 years of age. The Governor of a State shall be appointed „„He should not be a member of Parliament by the President. His usual term of office is five or of any State Legislature. If he is a member years but he holds office during the pleasure of of any of Legislature, he automatically the President. Generally, the Governor does not vacates his seat on assuming the office. belong to the State where he is appointed. He „„He should not hold any other profitable can also be transferred from one state to another occupation. by the President. He can also resign any time by addressing his resignation to the President. 3.1.4 Powers and Functions of the Governor The Legislature of a State or a High Court has no role in the removal of a Governor. A person The Governor is the head of the state executive may be appointed as a Governor for any number and he has enormous powers. In the exercise of terms. Two conventions have been set up in of functions and powers, the Governor, except

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3 State Government(06.03.2019).indd 196 10-04-2019 10:01:19 in certain cases, is to be guided by the aid and Legislative Powers advice of the Council of Ministers headed by the Chief Minister (under Article 163). As the The Governor is an integral part of the state legislature. But, he is not a member in executive head in the state level, the Governor the either house of the legislature. In this has following functions and powers. capacity, he enjoys the following legislative Executive Powers powers and functions: „„The Constitution vests all executive „„He has the right to summon, prorogue powers of the State Government in the state legislature and dissolve the State the Governor. He may exercise this Legislative Assembly. power either directly or through „„He can address the state legislature at the officers subordinate to him. He is the commencement of the first session after constitutional head of the State. All the each general election and the first session administration is carried on in his name. of each year. „„The executive powers and functions of „„He can send messages to the houses of the the Governor are: state legislature relating to a bill pending „„He appoints the leader of the majority in the legislature. party in the State Legislative Assembly as „„He can appoint any member of the the Chief Minister of the State. Legislative Assembly to preside over its proceedings when the offices of both „„He appoints other members of the Council the Speaker and the Deputy Speaker fall of Ministers on the recommendation of vacant. the Chief Minister. „„He can nominate one member to the state „„He appoints the Advocate - General of the legislature assembly from the Anglo- state and determines his remuneration. Indian Community. The Advocate General holds office during „„He nominates 1/6 of the members of the the pleasure of the Governor. State Legislative Council from amongst „„He appoints the Chairman and Members the persons having special knowledge or of the State Public Service Commission. practical experience in literature, science, However, they can be removed only by art, cooperative movement and social the president and not by a governor. service. „„He appoints the state election „„He decides on the question of commissioner and determines his disqualification of members of the state conditions of service and tenure of office. legislature in consultation with the Election Commission. However, the state election commissioner can be removed only in like manner and „„Every bill passed by the state legislature on the like grounds as a judge of a high will become law only after his signature. court. But, when a bill is sent to the Governor after it is passed by the legislature, he „„ He acts as the chancellor of universities has the options to give his assent to the in the state. He also appoints the Vice bill or withhold his assent to the bill or Chancellors of universities in the state. return the bill for the reconsideration of „„He directly rules a State when there is the the legislature. imposition of the President’s rule in the „„He has to reserve any bill passed by the State. state legislature which endangers the

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3 State Government(06.03.2019).indd 197 10-04-2019 10:01:20 position of the state High Court, for the „„He makes appointment, postings and consideration of the President. promotions of the District Judges in „„He can promulgate ordinances when the consultation with the State High Court. state legislature is not in session under „„The Chief Justice of the High Court in Article 213. But, these ordinances must the State is appointed by the President in be approved by the legislature within consultation with him. six months. He can also withdraw an „„He can pardon, commute or reprieve ordinance at anytime. punishment on receipt of appeals for „„ He has to lay the annual reports of the mercy. State Finance Commission, the State Public Service Commission and the Discretionary Powers Comptroller and Auditor General relating „„The Governor can reserve a bill for the to the accounts of the state, before the consideration of the president. state legislature. „„He recommends for the imposition of the Financial Powers President’s rule in the state. „„The Constitution confers on the Governor, „„He seeks information from the Chief the duty to get prepared and introduced Minister relating to the administrative to the State Legislature, the annual budget and legislative matters of the state. and also the supplementary budgets, if necessary. „„He can call the leader of any party to form ministry in the state when there is „„He causes the Annual Financial Statement (Budget) of the State to be presented in no clear-cut majority to any party in the the Legislative Assembly. Legislative Assembly after the general elections. „„He presents through the Minister of Finance of the State the Supplementary „„He can dismiss the Council of Ministers Budget of the State to the Legislative when it is unable to prove the confidence Assembly if there be such a need. of the Legislative Assembly; and „„Money Bills can be introduced in the „„He can dissolve the Legislative Assembly State Legislature only with his the prior if the Council of Ministers has lost its recommendation. majority. „„No demand for any grant can be made Emergency Powers except on his recommendation. If the Governor is satisfied that the „„He can make advances out of the government of the state is not carried on state Contingency Fund to meet any in accordance with the provisions of the unforeseen expenditure. Constitution, he may, under Article 356, „„ He constitutes a Finance Commission recommend to the President to impose after every five years to review the President Rule in that State. As soon as the financial position of the panchayats and President Rule is imposed, the administration the municipalities. of the State is carried on by the Governor as Judicial Powers the representative of the President. „„He appoints the Attorney-General of the State. 3.1.5 Privileges of the Governor „„He appoints Judges to the Subordinate Article 361(1) provides for the following Courts in the State. privileges for the Governor;

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3 State Government(06.03.2019).indd 198 10-04-2019 10:01:20 (a) The Governor of a State, is not be answerable Chief Ministers of Tamil Nadu from 1947 to any court for the exercise and performance of the powers and duties of his office or Thiru.O. P. Ramaswamy 1947-1949 for any act done or purporting to be done Thiru.P. S. Kumaraswamy Raja 1949 – 1952 by him in the exercise and performance of Thiru.C. Rajagopalachari 1952 – 1954 those powers and duties. Thiru.K. Kamaraj 1954 - 1963 (b) No criminal proceedings whatsoever shall Thiru.M. Bakthavatsalam 1963 – 1967 be instituted or continued against the Thiru.C. N. Annadurai 1967 – 1969 Governor of a State, in any court during his Thiru.M. Karunanidhi 1969 – 1976 term of office. Thiru.M. G. Ramachandran 1977 – 1987 (c) No process for the arrest or imprisonment of Tmt. JanakiRamachandran January 1988 the Governor of a State, shall issue from any Thiru.M. Karunanidhi 1989 – 1991 court during his term of office. Selvi.J. Jayalalithaa 1991 – 1996 Thiru.M. Karunanidhi 1996 – 2001 (d) No civil proceedings in which relief is claimed against the Governor of a State. Selvi.J. Jayalalithaa 2001 Thiru.O.Panneerselvam 2001 – 2002 3.2 Chief Minister Selvi.J. Jayalalithaa 2002 – 2006 In the scheme of Parliamentary system of Thiru.M. Karunanidhi 2006 – 2011 government provided by the constitution, the Selvi. J. Jayalalithaa 2011 – 2014 governor is the nominal executive authority Thiru.O.Panneerselvam 2014 – 2015 and the Chief Minister is the real executive Selvi.J. Jayalalithaa 2015 – 2016 authority. In other words, the governor is the Thiru.O.Panneerselvam 2016 – 2017 head of the State while the Chief Minister is the Thiru.Edappadi K. Palaniswami 2017 – till now head of the government. 3.2.1 The appointment of the 3.2.2 Powers and functions of Chief Minister the Chief Minister The Chief Minister is appointed by the Governor of the State. The leader of the majority The Chief Minister is the real executive head of party or majority group in the State Legislative the State administration. He has the following Assembly is appointed as the Chief Minister. In powers and functions. case no party commands absolute majority, in � Relating to the council of ministers the Legislative Assembly or the majority fails to elect its leader, the Governor can use his � Relating to the Governor power and invite the leader of the other largest �  party to form the ministry. He has to prove the Relating to the State Legislature confidence (majority support) in the Legislative � Other functions and powers. Assembly within the period stipulated by the Governor. Relating to the Council of The term of the Chief Minister is not fixed. Ministers He may remain as the Chief Minister as long As the head of the Council of Ministers, the as he enjoys the support of the majority of the Chief Minister enjoys the following functions members of the Legislative Assembly. He has to resign when he losses confidence of the majority and powers. in the assembly. It is ‘understood that normally „„The Chief Minister recommends the he completes 5 years term like other members persons who can be appointed as in the Legislative Assembly. ministers by Governor.

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3 State Government(06.03.2019).indd 199 10-04-2019 10:01:20 „„He allocates the portfolios among the Other function and powers ministers. „„As the leader of the ruling party, the „„He shuffles and reshuffles his ministry. Chief Minister has to control the party „„He can ask a minister to resign or to and develop the disciplines. advise the Governor to dismiss him in „„As the leader of the state, he has to keenly case of difference of opinion. consider the demands of the different „„He presides over the meetings of the sections of the people. Council of Ministers and influences its „„As the political head of the various decisions. services, he has to supervise, control and co-ordinate the secretaries of various „„He can bring about the collapse of the departments in the state level. council of ministers by resigning from office. „„For smooth functioning of the state and for good centre-state relations, he „„He guides, directs, controls and has to develop a rapport with the union coordinates the activities of all the government. ministers. 3.2.3 Council of Ministers Relating to the Governor The Council of Ministers are collectively The Chief Minister is the principal channel responsible to the State Legislature. All the of communication between the Governor and members of the Council of Ministers must be the the Council of Ministers, and he advises the members of the State Legislature. Those who are Governor in relation to the appointment of the not the members at the time of their appointment, following officials: must secure their seats in the Legislature within a period of 6 months. All the ministers work „„Advocate General of the State. as a team under the Chief Minster. As long as „„State Election Commissioner. the Chief Minister is in office, the Council of „„Chairman and Members of the State Ministers will also be in power. If a no-confidence Public Service Commission. motion is passed by the Legislative Assembly, the State Ministry shall resign. „„Chairman and Members of the State Planning Commission. Article l63 provides for a Council of Ministers to aid and advice the Governor. According „„ Chairman and Members of the State to Article 163(1) there shall be a Council of Finance Commission. Ministers with the Chief Minister at the head Relating to State Legislature to aid and advice the Governor in the exercise of his functions, except in so far as he is by or � The Chief Minister advises the Governor with under this Constitution required to exercise his regard to the summoning and proroguing functions or any of them in his discretion. the sessions of the state legislature. Other Provisions relating to �  He announces the government policies on Ministers the floor of the house. Article 164(1) holds that the Chief Minister � He can introduce the bills in the Legislative shall be appointed by the Governor and the Assembly. other Ministers shall be appointed by the � He can recommend for the dissolution of Governor on the advice of the Chief Minister, the Legislative Assembly to the Governor and the Ministers shall hold office during the pleasure of the Governor: anytime.

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3 State Government(06.03.2019).indd 200 10-04-2019 10:01:20 Article 164(1A) states that the total number Andhra Pradesh, Telangana and Jammu- of Ministers, including the Chief Minister, in the Kashmir). The lower house, legislative assembly Council of Ministers in a State shall not exceed represents the people of the state the upper fifteen percent of the total number of members house; Legislative Council represents special of the Legislative Assembly. interests like teachers, graduates and local governments. The functions and powers of the Council of Ministers „„It formulates and decides the policies of the state and implements them effectively. „„It decides the legislative programmes of the Legislative Assembly and sponsors all important bills. „„It controls the financial policy and decides the tax structure for the public welfare of the state. Tamil Nadu Legislative Assembly „„It chalks out programmes and schemes for the socio-economic changes so that In Tamil Nadu, according to the the state makes headway in various inter- strength of Legislative Assem- related fields. bly (234 members), the number „„It makes the important appointments of of ministers may be up to 36, i.e. 15 percent of 234. the Heads of Departments. „„ It discusses and takes efforts on the 3.3.1 The Legislative Assembly dispute with other states (Lower House) „„It advises the Governor on the The Legislative Assembly is a popular house. It appointment of Judges of the subordinate is the real centre of power in the State. It consists courts. of members directly elected by the people on „„ It frames the proposal for incurring the basis of adult franchise. The strength of the expenditure out of state reserves. Assembly varies from State to State depending on „„It decides all the bills whether ordinary the population. However the maximum strength bills or money bills to be introduced in of the Assembly must not exceed 500 or its the Legislative Assembly. minimum strength not be below 60. The term of „„Each minister of the Council of Ministers office of the legislative assembly is 5 years. It can supervises, controls and coordinates the be dissolved even before the expiry of its term. department concerned. The size of the Legislative Council cannot „„Annual Financial Statement called as be more than one-third the membership of the the Budget is finalised by the Council of Legislative Assembly (lower house) of that state. Ministers. But its size cannot be less than 40, except in Jammu and Kashmir where there are 36 by an 3.3 The State Legislature act of Parliament. The members draw the salary and allowances passed by the State legislature The Constitution provides a legislature from time to time. for every state. Most of the States have only Composition unicameral legislature i.e., Legislative assembly. The Legislative Assembly of Tamil Nadu Some State has bicameral legislatures (example consists of 235 members out of which 234 Bihar, Karnataka, Maharashtra, Uttar Pradesh,

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3 State Government(06.03.2019).indd 201 10-04-2019 10:01:20 members are directly elected by the people The Vidhan Parishads (Legislative Council) from the constituencies on the basis of adult forms a part of the state legislatures of India. franchise and one member is nominated by the In Seven of India’s 29 states (Bihar, Karnataka, Governor from the Anglo-Indian community. Maharashtra, Uttar Pradesh, Andhra Pradesh, However, seats shall be reserved in the house for Telangana and Jammu - Kashmir) the the scheduled castes and scheduled tribes. Legislative Council serves as the indirectly- elected upper house of a bicameral legislature. Cabinet and Cabinet Committees It is also a permanent house because it cannot be dissolved. Every Member of Legislative A smaller body called Cabinet is the nucleus Council (MLC) serves for a six-year term, with of the council of minister. It consists of only terms staggered so that the terms of one-third the cabinet ministers. It is the real centre of of members expire every two years. MLCs authority in the state government. must be citizens of India not under 30 years of The cabinet works through various age, mentally sound and not bankrupt, and his committees called cabinet committees. They are name should be in the voter’s list of the state of two types - standing and ad hoc. The former from which he or she is contesting the election. are of a permanent nature while the latter are of a temporary nature. The Tamil Nadu Legislative Council was abolished by The Speaker Tamil Nadu Legislative The Legislative Assembly elects two of its Council (Abolition) Bill, 1986. The Act came into force on the members as the Speaker and Deputy Speaker. 1st November 1986. The Speaker vacates his office, if he cannot continue to be a member of the Assembly. He may also resign his office at any time. The Election to Legislative Council speaker may be removed from office by a „„1/3 of the members are elected by local resolution of the Assembly after giving a 14 bodies. days’ notice. Such a resolution must be passed „„1/12 of the members are elected by by a majority of the members present at the Graduates of the universities in the State. time of voting. The speaker does not vacate his office, when the Assembly is dissolved. He „„1 /12 of the members are elected by continues to be the Speaker until the first sitting Graduate teachers. of the new Assembly. While the office of the „„1/3 of the members are elected by the speaker is vacant, the Deputy Speaker performs members of the Legislative Assembly. his functions. „„1/6 is nominated by the Governor who is 3.3.2 The Legislative Council eminent in the field of literary excellence, art, social services or Co-operation. (Upper House) The Chairman The legislative Council is the upper House of the State Legislature. It is constituted as a The Chairman (chair person he / she) is permanent House. Article 171(1) provides that the Presiding Officer of the Upper house. the total number of members in the Legislative The Members elect a Chairman and a deputy Council of a State shall not exceed one-third of chairman from among themselves. In the absence of the chairman, the deputy chairman the total number of members in the Legislative officiate the functions of the Legislative Assembly of that State, but not less than 40 Council. members in any case.

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3 State Government(06.03.2019).indd 202 10-04-2019 10:01:20 Abolition or Creation of questions asked by the members of the Legislative Councils Legislature. They can be removed from office if the Assembly passes a vote of “no confidence Article 169 deals with the creation or motion” against the Ministry. abolition of Legislative Council in a State. Article 169 holds that if the state Legislative 3.4.4 Wide powers Assembly passes a resolution by a majority of In State having two Houses, the Legislative not less than 2/3rd of the members present and Assembly enjoys more powers than the voting and by the majority of total strength Legislative Council. The Assembly has of the House, requesting the Parliament to complete control over the state finance. The create or abolish the state Legislative council Council cannot vote for grants. The Council of then the Parliament may by law provide for Ministers is responsible only to the Assembly. the abolition and creation of the Legislative Council. 3.5 Judiciary of State

3.4 Functions of the State 3.5.1 High Courts Legislature The institution of high court originated in The powers and functions of the State India in 1862 when the high courts were set up Legislature are almost the same as that of at Calcutta, Bombay and Madras. In the course Parliament. of time, each province in British India came to have its own high court. After 1950, a high court 3.4.1 Legislative powers existing in a province became the high court for The State Legislature can pass laws on all the corresponding state. The High Courts are subjects mentioned in the State List as per the highest courts at State level, but being part the constitution. It can also pass laws on of integrated Indian judiciary they work under concurrent subjects. The State made law in the superintendence, direction and control of a concurrent subject will become inoperative the Supreme Court. when the centre also passes a law on the same subject. The passing of Bill into law follows the same procedure, as in the union parliament. Every bill passes through three readings. Then it becomes an Act with the Governor’s assent. 3.4.2 Financial Powers

The Legislature controls the finances of the State. The Lower House enjoys greater power High Court of Madras than the Upper House in money matters. The Constitution of India provides for a Money bills can be introduced only in the high court for each state, but the Seventh Lower House or the Assembly. No new tax can Amendment Act of 1956 authorised the be levied without the sanction and permission Parliament to establish a common high court of the Assembly. for two or more states or for two or more states 3.4.3 Controls over the Executive and a union territory. The Legislature controls the Executive. For example, the States of Punjab and Haryana The Council of Ministers is responsible to and the Union Territory of Chandigarh have a the Assembly. The Ministers have to answer common High Court situated at Chandigarh.

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3 State Government(06.03.2019).indd 203 10-04-2019 10:01:20 Similarly, the High Court of Guwahati is criminal cases which are committed to them by common for seven northeastern States of Assam, the Presidency Magistrates. Nagaland, Manipur, Meghalaya, Mizoram, Appellate Jurisdiction Tripura and Arunachal Pradesh. Delhi, though As Courts of appeal, all High Courts entertain not a State, has its own separate High Court. appeals in civil and criminal cases from their Every High Court has a Chief Justice and a subordinate Courts as well as on their own. number of judges. The number of judges varies from State to State. The number of judges of They have, however, no jurisdiction over each High Court is determined by the President. tribunals established under the laws relating to At present there are 25 High Courts for 29 States the Armed Forces of the Country. (including new Andhra Pradesh High Court Writ Jurisdiction established in 1st January 2019 at principal seat in Amravati) and seven Union Territories. Under Article 226 of the constitution, the High Courts are given powers of issuing writs The High Court of Madras not only for the enforcement of the Fundamental is the one of the three High Rights, but also for other purposes. In exercise Courts in India established in of this power, a Court may issue the same the three Presidency Towns of type of writs, orders or directions which the Bombay, Calcutta and Madras Supreme Court is empowered to issue under by letters patent granted by Queen Victoria, Article 32. bearing date 26 June 1862. The High Court The jurisdiction to issue writs under this building is the second largest judicial Article is larger in the case of High Courts, for complex in the world after London. which the Supreme Court can issue them only where a Fundamental Right has been infringed, 3.5.2 Appointment of the Judges a High Court can issue them not only in such cases, but also where an ordinary legal right has Every High Court consists of a Chief Justice been infringed. and such other Judges as appointed by the President from time to time (Article 216). Habeas Corpus The writ of habeas corpus is issued to a detaining authority, ordering the 3.5.3 Jurisdiction and Powers of detainer to produce the detained person in High Court the issuing court, along with the cause of his At present, a high court enjoys the following or her detention, if the detention is found to jurisdiction and powers: be illegal, the court issues an order to set the person free. Original Jurisdiction Mandamus The writ of mandamus is issued to In their judicial capacity, the High Courts a subordinate court, an officer of government, or of the Presidency towns (Bombay, Calcutta and Madras) have both original and appellate a corporation or other institution commanding jurisdictions, while other High Courts have the performance of certain acts or duties. mostly appellate jurisdiction. Prohibition The writ of prohibition is issued Only in matters of admiralty, probate, by a higher court to a lower court prohibiting it matrimonial and contempt of Court, they have from taking up a case because it falls outside the original jurisdiction. The Presidency High jurisdiction of the lower court. Thus, the higher Courts have original jurisdiction in which the court transfers the case to it. amount involved is more than `2000 and in

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3 State Government(06.03.2019).indd 204 10-04-2019 10:01:20 Quo Warranto The writ of quo Warranto is law and return the case to the subordinate issued against a person who claims or usurps court with its judgment. a public office. Through this writ the court (d) Its law is binding on all subordinate courts inquires ‘by what authority’ the person supports functioning within its territorial jurisdiction his or her claim. in the same sense as the law declared by the Certiorari The writ of certiorari is issued to a Supreme Court is binding on all courts in lower court directing that the record of a case be India. sent up for review, together with all supporting Court of Record files, evidence and documents, usually with the All the decisions and decrees issued by the High intention of overruling the judgment of the lower Court are printed and are kept as a record for court. It is one of the mechanisms by which the future references by the Court as well as by the fundamental rights of the citizens are upheld. lawyers, is such a need arises. Thus, it also acts as a Court of Record. Supervisory Jurisdiction Power of Judicial Review High court has the power of superintendence over all courts and tribunals functioning in its Judicial review is the power of a high court territorial jurisdiction (except military courts to examine the constitutionality of legislative or tribunals) Thus, it may enactments and executive orders of both the Central and state governments. Though the (a) Call for returns from them; phrase judicial review has no where been used (b) Make an issue, general rules and prescribe in the Constitution, the provisions of Articles forms for regulating the practice and 226 and 227 explicitly confer the power of proceedings of them. judicial review on a high court (c) Prescribe forms in which books, entries and The 42nd Amendment Act of 1976 curtailed accounts are to be kept by them; and the judicial review power of high court. It (d) Settle the fees payable to the sheriff, clerks, debarred the high court’s from considering officers and legal practitioners of them. the constitutional validity of any central law. Control over Subordinate Courts However, the 43rd Amendment Act of 1977 A high court has an administrative control and restored the original position. other powers over them (a) It is consulted by the governor in the matters of appointment, posting and promotion of district judges and in the appointments of persons to the judicial service of the state (other than district judges). (b) It deals with the matters of posting, promotion, grant of leave, transfers and discipline of the members of the judicial service of the state (other than district judges). (c) It can withdraw a case pending in a subordinate court if it involves a substantial question of law that requires the interpretation of the Constitution. It can then either dispose of the case itself or determines the question of Statue of Sama Neethi Kanda Cholan at Madras High Court

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3 State Government(06.03.2019).indd 205 10-04-2019 10:01:21 Recap „ „„The Governor is the constitutional head of the state executive. „ „„The Chief Minister is appointed by the Governor of the State. „ „„The Council of Ministers are collectively responsible to the State Legislature. „ „„The Legislative Assembly is the real centre of power in the State. „ „„At present there are 25 High Courts for 29 States and seven Union Territories. „ „„The 42nd Amendment Act of 1976 curtailed the judicial review power of high court. „ „„The 43rd Amendment Act of 1977 restored the original position.

GLOSSARY

Constitution It has been defined as the fundamental law of a State. அர殿யலமைꯍꯁ Cabinet It is an inner body within the Council of Ministers which is அமைச㞚ரவை responsible for formulating the policy of the Government. Legislature the group of people in a country or part of a country who சட㞟மன㞱믍 have the power to make and change laws Tribunal a special court chosen, especially by the government, to 鏀ர்்ꮾய믍 examine particular problem Resolution an official decision that is made after a group or organisation 鏀ர்மன믍 has voted Remuneration payment for work or service ஊ鎿ய믍 Interpretation an explanation or opinion of what something means ힿளக㞕믍

EVALUATION 3 Which among the following is not one of the powers of the Governor? (a) Legislative (b) Executive I Choose the (c) Judicial (d) Diplomatic Correct Answer 4 Who can nominate one representative 1 The Governor of the of the Anglo-Indian Community to the State is appointed by the State Legislative Assembly? (a) Prime Minister (a) The President (b) Chief Minister (b) The Governor (c) President (c) The Chief Minister (d) Chief Justice (d) The Speaker of State legislature 2 The Speaker of a State is a 5 The Governor does not appoint (a) Head of State (a) Chief Minister (b) Head of government (b) Chairman of the State Public Service (c) President’s agent Commission (d) None of these (c) Advocate General of the State (d) Judges of the High Court

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3 State Government(06.03.2019).indd 206 10-04-2019 10:01:21 6 The Chief Minister of a State is appointed by (c) Punjab and Haryana (a) The State Legislature (d) Maharashtra and Gujarat (b) The Governor (c) The President II. Fill in the blanks (d) The Speaker of State 1 Governor of the state government Legislative Assembly surrenders his resignation to ______. 7 The State Council of Ministers is headed by 2 Members of the Legislative assembly (a) The Chief Minster (MLAs) elected by the ______. (b) The Governor 3 ______is the first women Governor of (c) The Speaker Tamil Nadu. (d) The Prime Minister 4 ______acts as the chancellor of 8 The Legislative Council universities in the state. (a) Has a term of five years 5 The Seventh Amendment Act of ______(b) Has a term of six years authorised the Parliament to establish (c) Is a permanent house a common high court for two or more (d) Has a term of four years states. 9 The minimum age for the membership 6 The Chairman and Members of the of the Legislative Council is State Public Service Commission can be (a) 25 years (b) 21 years removed only by the ______. (c) 30 years (d) 35 years III. Match the following 10 The members of Legislative Council are (a) Elected by the Legislative Assembly 1. Governor - Head of the Government (b) Mostly nominated (c) Elected by local bodies, graduates, 2. Chief Minister - Head of the State teachers, Legislative Assembly etc. 3. Council of Ministers- Tribunals (d) Directly elected by the people 4. MLC - Responsible for 11 Which one of the following States does the Assembly not possess a bicameral legislature? 5. Armed forces - cannot vote for (a) Andhra Pradesh grants (b) Telangana (c) Tamil Nadu IV. Choose the correct (d) Uttar Pradesh statement 1. i) Only some States in India have Legislative 12 The High Courts in India were first Councils. started at ii) Some members of Legislative Councils are (a) Calcutta, Bombay, Madras nominated. (b) Delhi and Calcutta iii) Some members of Legislative Councils are directly elected by the people. (c) Delhi, Calcutta, Madras a) ii & iv are correct (d) Calcutta, Madras, Delhi b) iii & iv are correct 13 Which of the following States have a c) i & iv are correct common High Court? d) i, ii & iii are correct (a) Tamil Nadu and Andhra Pradesh (b) Kerala and Telangana

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3 State Government(06.03.2019).indd 207 10-04-2019 10:01:21 2. Assertion (A): Th ere are limitations on the 3 Briefly discuss the Functions of the State Legislative authority of the State Legislature. Legislature. Reason (R): Certain bills on the State List 4 Critically examine the functions and can be introduced in the State Legislature powers of the Council of Ministers only with the President’s approval. 5 De scribe the powers and functions of a) (A) is false but R is true the High Court. b) (A) is true but (R) is false VII. Project and Activity c) Both (A) and (R) are true and (R) is the 1 Prepare a fl ow chart showing the State correct reason for (A) Government’s Administrative setup. d) Both (A) and (R) are true and (R) is not 2 Students to list out the names of the Tamil the correct reason for (A) Nadu Governor, Chief Minister, Ministers V. Answer the brief questions and the Governors and Chief Ministers of 1 How the state of Jammu and Kashmir the neighbouring States. diff er from the other states of India? 2 What is the importance of the Governor REFERENCE BOOKS of a state? 3 What are the qualifi cations for the 1. D.D. Basu - Introduction of the appointment of Governor? Constitution of India, S.C. Sarkar & 4 What is the original jurisdiction of the Sons (Private) Ltd, 1982. High Court? 2 Subhash Kashyap - Our Constitution, 5 What do you understand by the “Appellate National Book Trust, India, 2011. Jurisdiction” of the High Court? INTERNET RESOURCES VI. Answer in detail 1 What are the powers and functions of the Chief Minister? 1 www.tnrajbhavan.gov.in 2 Describe the various powers and 2 www.tn.gov.in functions of the Governor. 3 www.hcmadras.tn.nic.in

ICT CORNER

Through this activity you will know about the official details and functions of various states of our country. Steps • Open the Browser and type the URL given below. • Click on any state of the Indian map to view the offi cial website of the state and its function. • For example, click on the Tamilnadu state. An additional tab will open in the browser where you can see the offi cial website of Tamilnadu. • Likewise you can view the details of the other states. Website URL: https://www.mea.gov.in/india-at-glance.htm

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3 State Government(06.03.2019).indd 208 10-04-2019 10:01:22 STANDARD TEN

ECONOMICS

1 GDP AND ITS GROWTH.indd 209 10-04-2019 10:06:31 Unit - 1 Gross Domestic Product and its Growth: an Introduction

Learning Objectives

„„To know about the meaning of Gross Domestic Product „„To Understand the basic various measures of National Income „„To Understand the composition of GDP „„To know the contribution of different sectors in GDP „„To know the economic growth and development and its differences „„To know about Development path based on GDP And Employment „„To understand the growth of GDP and Economic Policies

Introduction Imagine what happens in a hotel. You place an order for two Idlis and a cup of tea. After a long time you got in touch through Someone makes the idlis and tea and someone email with a good friend of yours who lives else serves you. abroad. When she asks “how are you?” you An economist will say that in the hotel two may answer “ my health is in good shape and kinds of items are being produced . Obviously, I am progressing in my studies, so I am doing Idlis and tea are produced . These are tangible, well, thank you”. Or your reply may be “ Not physical things you can touch and feel. very well. You see, I had to receive treatment for some health problems and that adversely affected my performance in my studies”. Server Your friend than asks you : “how is India Consumer doing?” The answer to this query is a bit more challenging because she is asking about the condition of the entire nation ! Fortunately economists have provided different measures of answering your friend’s question , the most widely used one being the Gross Domestic Goods Product, or GDP. The GDP then is one way to know if “ India is doing well” or “ India is not doing as well as we would wish”. DEFINITION OF GDP To understand how the GDP tells us how India is doing, you should understand what GDP is.

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1 GDP AND ITS GROWTH.indd 210 10-04-2019 10:06:32 Economists call such tangible items “goods”. The GDP solves this problem by These goods are not free but have to paid for. measuring the goods and services in the Though you don’t realise it in addition to currency of the country, which is the rupee these tangible things called goods, something else in the case of India. The rupee values are is being produced : the work done by the cooks derived from the prices at which the goods and the people who serve the food. The activity and services are sold in the market. Only of cooking and serving is not something you can those goods and services with a market value feel and touch. Such activities are not tangible are included in the GDP. but are nevertheless crucial for you to enjoy the This implies that unless a good or service is food. Economists call such activity “services”. As sold in the market, it is not included in the GDP. in the case of goods, these and other services are For example if you pay ` 50 to get a manuscript not free but have to be paid for. typed in a computer centre, the service is included What happens everyday in a hotel happens in the GDP since it is sold in the market. If you nation wide: goods and services are produced type the manuscript yourself , the service typing and paid for and this what the GDP measures. a manuscript is not included in the GDP since The GDP is defined follows: you did not purchase it for a price in the market. The GDP is the market value of all the Final goods and services: Economists final goods and services produced in the Tyler Cowen and Alex Tabarrok say that “final country during a time period. goods and services” are the goods and services which will be used or consumed and will not Every part of the definition is important. form a part of other goods and services. The Goods and services: as you know by goods and services which will be used for now, goods are tangible items while services are producing other goods and services and will activities which are intangible . form a part of the goods and services produced Market value: This is the price at which are called “intermediate goods”. goods and services are sold in the market. Only the final goods are included in the The GDP measures all the goods and services GDP. Intermediate goods are not counted produced in the country. For this, we have to add in calculating the GDP because their value all the goods and services produced. However a is included in the final goods. So if the nation produces a wide range of goods like rice, intermediate goods are included in the GDP it shoes , trains, milk, clocks, books and bicycles. will result in what is called “double counting”. If only the quantities are taken into account, For example, a cup of tea bought in a hotel there is no meaningful way to add these up. For is a final good because it is consumed and does example, how do you add 1000 litres of milk with not form a part of producing something else. So 500 clocks?! Likewise there is no meaningful the market value of the cup of tea, being a final way to add the quantities of services since a wide good, is included in the GDP. Sugar which is range of services are produced , such as the work mixed in the tea is an intermediate good because done by doctors, police, fire brigade, teachers, it is used in making tea and forms a part of the bus drivers and district collectors. tea served. Suppose the tea is priced ` 10 a cup, When we cannot add the quantity of one of which the value of sugar used is ` 2. So the type of good with another type of good or one price of the cup of tea includes the ` 2 price type of service with another type of service, of the spoon of sugar. If this value of sugar is certainly there is no sensible way to add the included in the GDP , it will be counted twice: quantities of goods produced with those of as a spoon of sugar and again as a part of the cup services produced ! How would we add the of tea. This is “double counting” and to avoid it quantity of milk produced in the country with the intermediate goods like sugar are excluded the service produced by teachers?! from GDP.

211 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 211 10-04-2019 10:06:32 Should the market value of utensils used to Product is obtained from the Gross Domestic brew the tea be included in the GDP? You may Product by deducting the Quantum of tear and argue that since the utensils are bought not as final wear expenses (depreciation) goods but to produce tea, they are intermediate NDP = GDP − Depreciation goods and so they should not be included in the GDP. However the utensils, unlike sugar, do not 5. Per Capita Income (PCI) form a part of the final good , the cup of tea. For Per capita Income or output per person is an this reason they should be included in the GDP. indicator to show the living standard of people in 1.1 National Income a country. It is obtained by dividing the National ‘National Income is a measure of the total Income by the population of a country. value of goods and services produced by an Per capita Income = National Income / Population economy over a period of time, normally a year’. Commonly National Income is called as Gross In 1867-68 for National Product(GNP) or National Dividend. the first time Dadabhai Navroji 1.1.1  Various terms associated with had ascertained measuring of National Income the Per Capital 1. Gross National Product (GNP) Income in his book “Poverty and Un- Gross National Product is the total value British Rule of India”. of (goods and services) produced and income received in a year by domestic residents of a 6. Personal Income (PI) country. It includes profits earned from capital Personal income is the total money income invested abroad. received by individuals and households of GNP = C + I + G + (X–M) + NFIA) a country from all possible sources before C = Consumption direct taxes, therefore, personal income can be I = Investment expressed as follows (PI = NI corporate Income G = Government Expenditure Taxes − Undistributed corporate profits − social X-M = Export – Import security contribution + Transfer payment). NFIA = Net Factor Income from Abroad) 7. Disposable Income (DI) 2. Gross Domestic Product (GDP) Disposable income means actual Gross Domestic Product (GDP) is the income which can be spent on consumption total value of output of goods and services by individuals and families, thus, it can be produced by the factors of production within expressed as DPI = PI − Direct Taxes the geographical boundaries of the country. (From consumption approach DI = 3. Net National Product (NNP) Consumption Expenditures + Savings ) Net National Product(NNP) is arrived by making some adjustment with regard to 1.2 Gross Domestic depreciation that is we arrive the Net National Product (GDP) Product (NNP) by deducting the value of Produced in the country: GDP of India depreciation from Gross National Product. includes only the market value of goods and (NNP = GNP − Depreciation) services produced in India. For example the market 4. Net Domestic Product (NDP) value of apples produced in Kashmir are included Net Domestic Product (NDP) is a part in our GDP since Kashmir is in India. The market of Gross Domestic Product, Net Domestic value of apples produced in California, even if

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1 GDP AND ITS GROWTH.indd 212 10-04-2019 10:06:32 they are sold in Indian markets, are not included in our GDP because California is in the U.S. The modern concept of GDP Produced during a time period: The was first developed by Simon GDP of a country measures the market value Kuznets for a US Congress of goods and services produced only during the report in 1934. specified time period. The goods and services produced in earlier periods are not included. 1.2.1 Methods of GDP Calculating If an year is the specified time period, the GDP of 2018 will include the market value of goods 1. Expenditure Approach: In this method, the and services produced only during 2018. So a GDP is measured by adding the expenditure bicycle produced in 2017 will not be included in on all the final goods and services produced the GDP measure for 2018. in the country during a specified period. The different types of expenditure are shown in In India the GDP is measured both annually this equation: Y = C + I + G + (X − M) and quarterly. The annual GDP is for a financial 2. The Income Approach: This method looks year which is from April1 of say 2017 to March at GDP from the perspective of the earnings 31, 2018. This is written as 2017-18. The quarterly of the men and women who are involved GDP estimates are for each of the four quarters in producing the goods and services. The into which India’s financial year is divided: income approach to measuring GDP (Y) is First quarter, denoted Q1: April, May and June Y = wages + rent + interest + profit Second quarter, or Q2: July, August, September 3. Value-Added Approach: A cup of tea served to you in a hotel is a “final good”. The Third Quarter or Q3: October, November, goods used to produce it , tea powder, milk, December and sugar, are “intermediate goods” since Fourth Quarter, or Q4: January, February, March. they form The annual GDP for financial year 2017 - 18 a part of will include only the goods and services produced the final during this financial year and will exclude the good, the goods and services produced in the previous cup of tea. years. Likewise GDP for Q2 will include only the One way goods and services produced in Q2 and will not to measure include the goods and services produced in Q1. the market value of Gross Domestic Product (GDP) the cup of tea is to add the value produced definition by each intermediate good used to produce it. Each intermediate good, the tea powder , Gross Domestic Product (GDP) represents milk and sugar, adds value to the final the economic health of a country. It represents output, the cup of tea. In the value-added a sum of a country’s production which consists approach the value added by each of all purchases of goods and services used by intermediate good is summed to estimate individuals, firms, foreigners and the governing the value of the final good. The sum of the bodies. The monetary value of all the finished value added by all the intermediate goods goods and services produced within a country’s used in production gives us the total value border in a specific time period. of the final goods produced in the economy. GDP = C + I + G + (X − M ) 1.2.2 Importance of GDP C = Consumption I = Investment G = Government Expenditure 1. Study of Economic Growth. ( X − M) = X = Exports − M = Imports 2. Unequal distribution of wealth.

213 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 213 10-04-2019 10:06:32 3. Problems of inflation and deflation. 4 The GDP does not tell us about the kind 4. Comparison with developed countries of of life people are living: A high level of the world. per capita real GDP can go hand-in-hand 5. Estimate the purchasing power. with very low health condition of people, an undemocratic political system, high 6. Public Sector. pollution and high suicide rate. 7. Guide to economic planning. 1.2.3 Limitations of GDP Estimation of GDP The GDP is the most widely used measure The Central Statistical of the state of the economy. While appreciating Organisation (CSO), under its usefulness, we should be aware of some of its the Ministry of Statistical limitations. department keeps the records. 1 Several important goods and services It’s processes involves conducting an annual are left out of the GDP: The GDP includes survey of industries and compilation of various only the goods indexes like the Index of Industrial Production and services sold (IIP) Consumer Price Index (CPI) etc. in the market. The services provided 1.3 Composition of Gross by parents to their Domestic Product (GDP) children is very important but it is Indian economy is broadly divided into not included in three sectors which contribute to the GDP the GDP because namely Agriculture and allied activity, Industry it is not sold in the market. Likewise clean and Services. air, which is vital for a healthy life, has no 1) Primary Sector: market value and is left out of the GDP. (Agricultural Sector) 2 GDP measures only quantity but not quality: In the 1970s schools and banks Agricultural did not permit the use of ballpoint pens. sector is known as This is because the ones available in India primary sector, in were of very poor quality. Since then, not which agricultural only has there been a substantial increase in operations are undertake. the quantity of ballpoint pens produced in Forestry India but their quality has also improved a Agriculture based lot. The improvement in quality of goods is allied activities, production of raw materials very important but it is not captured by the such as cattle farm, fishing, mining, forestry, G D P. corn, coal etc. are also undertaken. 3 GDP does not tell us about the way income 2) Secondary Sector: is distributed in the (Industrial Sector) country: The GDP of a country may Industrial sector be growing rapidly is secondary sectors but income may in which the goods be distributed so and commodities are produced by unequally that only Industry a small percentage transforming the of people may be benefitting from it. raw materials. Important industries are Iron

Gross Domestic Product and its Growth: an Introduction 214

1 GDP AND ITS GROWTH.indd 214 10-04-2019 10:06:32 and Steel industry, cotton textile, Jute, Sugar, Cement, Paper, Petrochemical, automobile and other small scale industries. 3) Tertiary: (Service Sector) Tertiary sector is known as service sector it includes Government, scientific research, India is 2nd larger producer of agriculture t r a n s p o r t product. India accounts for 7.39 percent of total communication, Postal and Telegraph global agricultural output. In Industrial sector, trade, postal and telegraph, Banking, Education, India world rank is 6 and in Service sector, India Entertainment, Healthcare and Information world rank is 8. Contribution of Agriculture sector Technology etc.. In the 20th century,economists in Indian economy is much higher than world's began to suggest that, traditional tertiary average (6.4%). Contribution of Industry and services could be further distinguished from Services sector is lower than world's average 30% “quaternary” and “quinary” service sectors. for Industry sector and 63% for Services sector.

1.4 Contribution of different Gross value added (GVA) is the measure of sectors in GDP of India the value of goods and services produced in an area, industry or sector of an economy. In national Services sector is the largest sector of India. accounts GVA is output minus intermediate Gross Value Added (GVA) at current prices consumption; it is a balancing item of the national for Services sector is estimated at 92.26 lakh accounts' production account. crore in 2018-19. Services sector accounts for GVA is linked as a measurement to Gross 54.40% of total India's GVA of 169.61 lakh crore Domestic Product (GDP), as both are measures of Indian rupees. With GVA of ` 50.43 lakh crore, output. The relationship is defined as GVA + taxes Industry sector contributes 29.73%. While, on products - subsidies on products = GDP Agriculture and allied sector shares 15.87%. GVA = GDP + subsidies - (direct, sales) taxes.

Sector-wise Contribution in GDP of India

Year Agriculture(%) Industry(%) Service(%) 1950-51 51.81 14.16 33.25 1960-61 42.56 19.30 38.25 1970-71 41.95 20.48 37.22 1980-81 35.39 24.29 39.92 1990-91 29.02 26.49 44.18 2000-01 23.02 26.00 50.98 2010-11 18.21 27.16 54.64 2011-12 17.86 27.22 54.91 2012-13 17.52 26.21 56.27 2013-14 18.20 24.77 57.03 2015-16 17.07 29.08 52.05 2016-17 17.09 29.03 52.08 2017-18 17.01 29.01 53.09 Source: Central Statistics Office

215 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 215 10-04-2019 10:06:33 Sector-wise contribuon of GDP (2018-19) Percentage share (%) Agriculture Sector Agriculture Forestry & Fishing 14.82 15.87 Industry sector Mining & quarrying 20.96 15.87 Manufacturing Electricity, gas, water supply& other utility services 18.62 29.73 Construction Services Sector Trade, hotels, transport, 2.7 communication and services 16.83 related to broad casting 54.4 Financial, real estate & Prof Services 2.67 7.54 Public administrative, defense and other services Source: Statistics times.com. Note: The Table shows that Sector-wise contribution in GDP of India for the year 2018 - 2019.

Sectorwise GDP Growth of India (1950-2018) ■ Agriculture ■ Industry ■ Services 1950 1960 1970 1980 1990 2000 2010 2018

Source: Statistics times.com. Note: The chart shows that Sector-wise contribution in GDP of India for the year 1950-2018

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1 GDP AND ITS GROWTH.indd 216 10-04-2019 10:06:33 1.5 Economic Growth and GDP of the United States of America is 19.3 trillion Development USD and ranked one.It shows how much the production of goods and services has increased As per the economist compared from last year in a quantitative manner. Amartya Sen, economic It has many parameters to measure and few of growth is one aspect of them are human Resources. They are Natural economic development. Resource, Advancement in technology, Capital Also, united nation see it like formation, Political and social economic factors. this “Economic development focuses not only on man’s Economic Development materialistic need but it Economic development projects a focuses on overall development or rise in its living broader picture of an economy which takes standards. into account an increase in production level or output of an economy along with an Economic Growth improvement in the living standard of its It is the quantitative measure which citizens. It focuses more on socioeconomic considers the rise in the output produced in factors rather than the just quantitative an economy or nation in a particular period increase in production. Economic in its monetary value. The key parameters of development is a qualitative measure which economic growth in any economy are its Gross measures improvement in technology, labour Domestic Product (GDP) and gross national reforms, rising living standards, broader product which helps in measuring the actual institutional changes in an economy. size of an economy. Human development Index (HDI) is apt For example, we say GDP of India is 2.8 tool to measure the real development in an trillion USD and ranked 6th in globe whereas economy.

Differences between Economic Growth and Economic Development Comparison between Economic Growth and Economic Growth Economic Development Economic Development It considers the rise in the output in an It is the positive quantitative economy along with the advancement of Definition / change in the output of an HDI index which considers a rise in living Meaning economy in a particular time standards, advancement in technology period and overall happiness index of a nation. Economic growth is the Economic development is the “Broader” Concept “Narrower” concept concept Nature of Approach Quantitative in nature Qualitative in nature Rise in life expectancy rate, infant, Rise in parameters like GDP, Scope improvement in literacy rate, infant GNP, FDI,FII etc. mortality rate and poverty rate etc. Term / Tenure Short term in nature Long-term in nature Applicability Developed nation Developing economies

217 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 217 10-04-2019 10:06:33 Measurement Increase in real national income i.e. per Increase in national income Techniques capita income Frequency of In a certain period of time Continuous process Occurrence Highly dependent on government It is an automatic process so intervention as it includes widespread Government Aid may not require government policies changes so without government support/aid or intervention intervention it is not possible Economic growth does not It focuses on a balanced and equitable emphasize on the fair and equal distribution of wealth among all Wealth Distribution distribution of wealth/income individual and tries to uplift the among all its people. downgrade societies.

1.6 Developmental Path based Human Development Index on GDP andEmployment In 1990 Mahbub ul Haq, a Pakistani Economist at the In the development path United Nations, introduced the of India, it first undertook Human Development Index the policy of closed trade. (HDI). The HDI is a composite This was to give a thrust index of life expectancy at birth, adult literacy to domestic industries rate and standard of living measured as a and reduce dependence logarithmic function of GDP, adjusted to on foreign products and purchasing power parity. companies.Trade and interaction with the outside world remained limited. This outlook India climbed one spot to 130 out of 189 continued till 1991 when India finally decided countries in the latest human development to open its borders to free trade and liberalized rankings released today by the United Nations its economy by allowing foreign companies to Development Programme (UNDP). India’s enter the Indian economy. HDI value for 2017 is 0.640, which put the country in the medium human development A thrust was given to employment category. Between 1990 and 2017, India’s HDI generation under the Five Year plans. This was value incased from 0.427 to 0.640, an increase to make up for a rising population and lacking of nearly 50 percent – and an indicator of the jobs to absorb the increased workforce size. country’s remarkable achievement in lifting Rural development was also given importance millions of people out of poverty. in India, for the important constituent it was of the Indian landscape. Between 1990 and 2017, India’s life Poverty alleviation came as a corollary of expectancy at birth too increased by nearly rural development and a part of the development 11 years, with even more significant gains in path of India. India inherited a poverty-stricken expected years of schooling. Today’s Indian economy from the British rule, which had school-age children can expect to stay in school destroyed its resource base completely. for 4.7 years longer than in 1990. Whereas, The public sector was given significant India’s GNI per capita increased by a staggering importance, Private companies and industries 266.6 % between 1990 and 2017. were subject to strict regulations and standards. It was believed that the government was the sole

Gross Domestic Product and its Growth: an Introduction 218

1 GDP AND ITS GROWTH.indd 218 10-04-2019 10:06:33 protector of the people and would work towards Factors supporting Indian social welfare. development India has sustained rapid growth of GDP A fast-growing population of working for most of the last two decades leading to age. There are 700 million Indians under the rising per capita incomes and a reduction age of 35 and the demographics look good for in absolute poverty. Per capita incomes have Indian growth in the next twenty years at least. doubled in 12 years. In Per capita income, India is experiencing demographic transition placing India just inside the Middle Income that has increased the share of the working-age Country category. population from 58 percent to 64 percent over Life expectancy at birth is 65 years and the last two decades. 44% of children under 5 are malnourished. The India has a strong legal system and many literacy rate for the population aged 15 years and English-language speakers. This has been a key to above is only 63% compared to a 71% figure for attracting inward investment from companies such lower middle income countries. as those specialising in Information Technology. India has followed a different path of development from many other countries. Wage costs are low in India and India has India went more quickly from agriculture made strides in recent years in closing some to services that tend to be less tightly of the productivity gap between her and other regulated than heavy industry. There are countries at later stages of development. some emerging manufacturing giants in the India's economy has successfully developed Indian economy. highly advanced and attractive clusters of

Gross National Happiness (GNH) Gross National Happiness ( GNH) is a philosophy that guides the government of Bhutan. It includes an index which is used to measure the collective happiness and well-being of a population. Gross National Happiness is instituted as the goal of the government of Bhutan in the Constitution of Bhutan, enacted on 18 July 2008. The term Gross National Happiness was coined in 1972 during an interview by a British journalist for the Financial Times at Bombay airport when the then king of Bhutan, Jigme Singye Wangchuck, said "Gross National Happiness is more important than Gross National Product. In 2011, The UN General Assembly passed Resolution "Happiness: towards a holistic approach to development" urging member nations to follow the example of Bhutan and measure happiness and well-being and calling happiness a "fundamental human goal." GNH is distinguishable from Gross Domestic Product by valuing collective happiness as the goal of governance, by emphasizing harmony with nature and traditional values as expressed in the 9 domains of happiness and 4 pillars of GNH. The four pillars of GNH's are 1) sustainable and equitable socio-economic development; 2) environmental conservation; 3) preservation and promotion of culture; and 4) good governance. The nine domains of GNH are psychological well-being, health, time use, education, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards. Each domain is composed of subjective (survey-based) and objective indicators. The domains weigh equally but the indicators within each domain differ by weight.

219 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 219 10-04-2019 10:06:33 promotes research and development, leads to modernization and ultimately makes the economy self-sufficient. In fact, industrial development even boosts other sectors of the economy like the agricultural sector (new farming technology) and the service sector. It is also closely related to the development of trade. Several industrial policies since 1948, Industrial policy on large scale industries Eg. Textile Industry policy, Sugar Industry policy, Price policy of industrial growth, businesses in the technology space. For example Small scale industrial policy and Industrial witness the rapid emergence of Bangalore Labour policy. as a hub for global software businesses. External economies of scale have deepened 3. New Economic Policy their competitive advantages in many related The economy of India had undergone industries. significant policy shifts in the beginning of the 1990s. This new model of economic reforms is 1.7 Growth of GDP and commonly known as the LPG or Liberalisation, Economic Policies Privatisation and Globalisation model. The Many Economic Policies have been framed primary objective of this model was to make by the Government of India since independence the economy of India the fastest developing for increasing rate of economic growth and economy in the globe with capabilities that help economic development. The important it match up with the biggest economies of the world. These economic reforms had influenced economic policies are the overall economic growth of the country in a 1. Agriculture policy significant manner. Agricultural policy is the set of government decisions and actions relating to domestic Some other policies in India agriculture and imports of foreign agricultural • Trade Policy products. Governments usually implement Import and Export policy (International agricultural policies with the goal of achieving Trade Policy), Domestic Trade Policy. a specific outcome in the domestic agricultural product markets. Some over arching themes • Employment policy include risk management and adjustment, • Currency and Banking Policy economic stability , natural resources • Fiscal and Monetary Policy and environmental sustainability research and development, and market access for domestic • Wage Policy commodities. • Population Policy Some Agricultural policies are Price policy, land reform policy, Green Revolution, Irrigation 1.7.1 GDP Growth of India policy, Food policy, Agricultural Labour Policy India's economic growth story since the 1990s and Co-operative policy. has been steady, stable, diversified, resilent and reflect strong macro economics fundamentals. 2. Industrial Policy Despite fluctuations in recent quarters due to Industrial development is a very important disruptions caused by two major structural aspect of any economy. It creates employment, reforms - demonetisation and the Goods and

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1 GDP AND ITS GROWTH.indd 220 10-04-2019 11:30:14 Services Tax (GST). The world Bank projected a According to IMF World Economic growth rate of 7.3% in the year 2018-19 and 7.5% Outlook (October-2018), GDP growth rate of 2019-2020. India's average economic growth India in 2018 is projected at 7.3% and India is 5th between 1970 and 1980 has been 4.4% which rise fastest growing nation of the world just behind by 1% point to 5.4% between the 1990 and 2000. Bangladesh.

RECAP • GDP is the value of all goods and services produced within an economy in a financial year. • Indian economy is classified in three sectors Agriculture and allied Industry and Service • Depreciation: The Monetary value of an asset decreases over time due to use, wear and tear or obsolescence • Income: The amount of monetary or other returns, either earned or unearned, accruing over a period of time. • Gross Value Added (GVA): The measure of the value of goods and services produced in an area, industry or sector of an economy. • GNP Deflator: The change in GNP with the change in price levels. • Economic indicator - An economic indicator is a statistical data used to determine the health of the economy.

GLOSSARY

Depreciation The process of lossing value தேய்뮾ன믍 Intermediate Being between two other related things இடைநிலை Market Price A price that is likely to be paid for something சந்த விலை A consumer good or final good is any commodity Final Goods that is produced or consumed by the consumer to இ쟁தி ப�ொ쏁ட㞕쿍 satisfy current wants or needs the nature of something's ingredients or constituents; Composition the way in which a whole or mixture is made up கலவை Contribution a gift or payment to a common fund or collection. பங㞕ளிꯍꯁ Socio- relating to or concerned with the interaction of social ச믂க- Economic and economic factors. பொ쏁ளாதார confidence in one's own worth or abilities; self- Self-Esteem respect 毁யம쎿யாதை Broader covering a large number and wide scope of subjects பரந் continue in existence or operation uncertainly or Staggering precariously. த翁மாற㞱த்தின

221 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 221 10-04-2019 10:06:34 9. Which one is a trade policy?. EVALUATION a) irrigation policy b) import and export policy I Choose the correct c) land-reform policy answer d) wage policy 10. Indian economy is 1. GNP equals a) Developing Economy a) NNP adjusted for b) Emerging Economy inflation c) Dual Economy b) GDP adjusted for inflation d) All the above c) GDP plus net property income from II Fill in the blanks abroad 1. _____ sector is largest sector in India. d) NNP plus net property income or 2. GDP is the indicator of _____ economy. abroad 3. Secondary sector otherwise called as _____. 2. National Income is a measure of 4. _____ sector is the growth engine of Indian a) Total value of money economy. b) Total value of producer goods 5. India is _____ largest economy of the c) Total value of consumption goods world. d) Total value of goods and services 6. India is _____ fastest growing nation of the 3. Primary sector consist of world. a) Agriculture b) Automobiles 7. _____ policy envisages rapid c) Trade d) Banking industrialization with modernization for attaining rapid economic growth of GDP. 4. ______approach is the value added by each intermediate good is summed to estimate III Choose the correct statement the value of the final good. 1. The rate of saving is low in India for the a) Expenditure approach following reason b) Value added approach I. Low per capita income. c) income approach II. Poor performance and less contribution d) National Income of public sector. III. Poor contribution of household sector. 5. Which one sector is highest employment in IV. Savings potential of the rural sector not the GDP. tapped fully. a) Agricultural sector a) I, II, IV are correct b) Industrial sector b) I, II and III are correct c) Service sector c) I, II, III and IV are correct d) None of the above. d) I, III and IV are correct 6. Gross value added at current prices for IV Match the following services sector is estimated at ______lakh crore in 2018-19. 1. Electricity/ – National Income / a) 91.06 b) 92.26 c) 80.07 d) 98.29 Gas and Water Population 7. India is ______larger producer in 2. Price policy – Gross National agricultural product. Product a) 1 st b) 3 rd c) 4 th d) 2nd 3. GST – Industry Sector 8. India’s life expectancy at birth is ______4. Per capita income – Agriculture years. 5. C + I + G + (X-M) – Tax on goods and a) 65 b) 60 c) 70 d) 55 service

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1 GDP AND ITS GROWTH.indd 222 10-04-2019 10:06:34 V Give short answer 5. Explain the Developmental path based on GDP and employment. 1. Defi ne National income. 6. Explain the following the economic policies 2. What is meant by Gross domestic product? 1.Agricultural Policy 3. Write the importance of Gross domestic 2.Industrial policy product. 3.New ecnomic policy 4. What is per capita income?. 5. Defi ne the value added approach with VII Activity and Project example. 1. Students are collect the Gross Domestic 6. Name the sectors contribute to the GDP Product datas of Tamilnadu and compare with examples. the other state of Karnataka and Kerala’s GDP. 7. Write the sectorwise Indian GDP 2. Students are collect the details of composition in 2017. Employment growth of Tamilnadu. 8. what are the factors supporting to develop the indian economy REFERENCE BOOKS 9. Write the name of ecnomic policies in India. 10. Write a short note 1) Gross National 1. Sankaran Indian Economy(problems, Happiness(GNH) 2) Human Development policies,and development). Index(HDI) 2 Ramesh singh Indian economy (10th Edition). VI Write in detail answer 3 Ministry of statistics and implementation planning commission. Government of india. 1. Briefl y explain various terms associated with measuring of national income. 2. What are the methods of calculating Gross INTERNET RESOURCES Domestic Product? and explain its. 3. Write about the composition of GDP in https://en.wikipedia.org India. http://www.statisticstimes.com 4. Write the diff erences between the growth and development.

ICT CORNER

Steps • Open the Browser and type the URL given below (or) Scan the QR Code. • Click on ‘Real GDP Growth’ and select ‘India’ in Right side menu • Drag the timeline button to see the GDP Growth of India

Website URL: https://www.imf.org/external/datamapper/datasets/WEO/1

223 Gross Domestic Product and its Growth: an Introduction

1 GDP AND ITS GROWTH.indd 223 10-04-2019 10:06:34 UnitUnit - - 22

Globalization and Trade

Learning Objectives

� To know the meaning and history of globalization � To know the trade and traders in South India historical perspective � To know the evolution of growth of MNC � To know the fair trade practices and WTO � To understand the impact and challenges of globalization

Introduction Liberalization, Privatization and Globalization (LPG) have become a much talked of subjects among politicians, economists and businessmen in modern days. These three expressions are the supporting pillars of which the edifice of new economic policy of our Government has been erected and implemented since 1991. Globalization

2.1 Globalization 2.2 History of Globalization Globalization is the process of integrating The term of ‘Globalization’ was introduced various economies of the world without by Pro. Theodore Levitt. The historical creating any barriers in the free flow of goods backround of globalization can be discussed on and services, technology, capital and even three stages. labour or human capital. Under globalization, the international markets for goods and services Stage - 1 are integrated. Archaic Globalization Globalization is the integration of a country History of Stage - 2 Proto Globalization with the world economy. Basically, globalization Globalization signifies a process of internationalization plus Stage - 3 Modern Globalization liberalization.

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2 Globalisation.indd 224 10-04-2019 10:08:50 N SILK AND SPICE ROUTE W E S

ASIA EUROPE

ITER ED R M AN EAN SEA PERSIA CHINA EGYPT ARABIA INDIA AFRICA SOMALIA INDIAN OCEAN JAVA LEGEND LAND ROUTE AUSTRALIA Not to Scale SEA ROUTE

Silk Route and Spice Route

2.2.1. Archaic Globalization 2.2.2. Proto Globalization Andre Gunder Frank argued that a form The next phase is known as proto - of globalization has been in existence since the globalization. It was charterized by the rise of th rise of trade links between Sumer and Indus maritime European empires, in the 16 and th valley civilization in the third millennium 17 centuries, first the Portugues and Spanish BC (BCE). An early form of globalized Empires, and Dutch and British empires. In th economics and culture, known as Archaic the 17 century, globalization became private globalization existed during the Hellenistic business phenomenon like British East India Age. When commercialized urban centers Company[founded in 1600] described as the were focused around the axis of Greek culture first multinational company, and the first Dutch over a wide range that stretched from India to East India Company [found in 1602] were th Spain with such cities as Alexandria, Athens, established. In 16 century, Portuguese and Anthioch, as its center. An early form of started establishing trading posts [factories] globalization in the trade link between the from Africa to Asia and Brazil. Roman Empire, Parthian Empire and the Han 2.2.3. Modern Globalization Dynasty made the commercial links between these powers inspired the development of the The 19th century witnessed the advent of Silk Road. globalization approaching its modern form. Between the globalization in the 19th and in he The Islamic Golden Age was also an 20th century there are significant differences. important early stage of globalization. There are two main points one is the global The advent of the Mongol Empire, though trade in his centuries as well as the capital, destabilizing to the commercial centers of investment and the economy and another one the Middle East and China, greatly facilitated is the global trade in the 20th century shows a travel along the Silk Road. These Pre-modern higher share of trade in merchant production, phase of global exchange are sometimes a growth of the trade in services and the rise of known as archaic globalization. production and trade by multinational firms.

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2 Globalisation.indd 225 10-04-2019 10:08:50 Multinational trade contracts and 2.3.1. Early Traders agreements have been signed, like the General In the year 1053 AD (CE) the Kalinga Agreement on Tariffs and Trade [GATT] and traders (Modern Orissa) brought red colored World Trade Organization [WTO]. From 1890 stone decorative objects for trade and also and up to World War 1 instability trade was cotton textile to Southeast Asia at an early a problem, but in the post war period there date. Several trade guilds operated in medieval has mostly been economic expansion which Southern India such as the Gatrigas, Nakaras, leads to stability. Technological changes Mummuridandas, Ayyavole -500 Settis, have caused lower transporting costs, it take Birudas, Gavaras, etc.. Some trade guilds, such just a few hours to transport goods between as the Nakaras and Gavares, met only in the continents today. temple premises. 2.3 Trade and Traders in South India historical perspective 2.3.2. European Traders in South India Southern Indian trade guilds were formed This was due to the trading activities of the by merchants in order to organize and expand various European companies which came to their trading activities. Trade guilds become India during this period. The discovery of a new channels through which Indian culture was all-sea route from Europe to India Via cape of exported to other lands. South India trade was Good Hope by Vasco do Gama had for reaching dominated by the Cholas, and it replaced the repercussions on the civilized world. India’s Pallavas. coastal and maritime trade was monopolized by the Europeans.

N KALINGA TRADE ROUTE W E S

China Kalinga

Burma Champa Siam Kmer

Malaya Ceylon

Sumatra

Not to Scale Java Bali

Kalinga Trade route map

226 Globalization and Trade

2 Globalisation.indd 226 10-04-2019 10:08:51 2.3.3. The Portuguese 2.3.5. The British Company (UK)

Vasco Da Gama Queen Elizabeth st The Portuguese under the leadership of On 31 December, 1600, Queen Elizabeth Vasco da Gama landed at Calicut on the 17th granted charter to The East India Company. May, 1498. Profits of goods brought by Vasco do On the south-eastern coast, the English Gama to Portugal were to 60 times cost of the established at Masulipatnam in 1611 and entire expedition to India. The arrival of Pedro near Pulical in 1626. The Sultan of Golconda Alvarez cabral in India in 1500AD (CE) and the granted the English the “Golden Fireman” second trip of Vasco da Gama in 1502 led to in 1632 by which they were allowed to trade the establishment of trading station at Calicut freely in their “Kingdom Ports”. In 1639, built a Cochin and Cannanore. Cochin was the early fortified factory in Madras which known as Fort capital of the Portuguese in India. St.George, which soon displaced Masulipatnam as headquarters of the English settlement on the 2.3.4. The Dutch in South India coromandel coast. 2.3.6. The Danes The Danes formed an East India company and arrive in India in 1616. The Danish settlements were established at Tranguebar ( in Tamil nadu) in 1620 which was the headquarters of Danes in India. They failed to strengthen themselves, in India and in 1845 were forced to sell all their India settlements to the British. Dutch East India company 2.3.7. The French Dutch undertook several voyages from 1596 and formed the Dutch East India company The first French factory in India was (VOC) I 1602. In 1605, Admiral van der Hagen established in 1668 by obtaining permission established Dutch Factory at Masulipatnam and from the Sultan of Golconda. In 1693, the Pettapoli (Nizamapatanam), Devanampatinam. Dutch captured Pondicherry but was handed In 1610, upon negotiating with the king of back to the French. In 1701, Pondicherry was Chandragiri, found another facatory at Pulicut. the headquarters of the French. Settlements Other commodities exported by the Dutch were in the East after 1742 Political motives began indigo, saltpeter and Bengal raw silk. Pulicut to overshadow the desire for commercial was the headquarters of the Dutch in India. gain. Nagapatnam on the Tanjore coast acquired Recently, the Government of India has set from the Portuguese in 1659. up Special Economic Zones in Southern States

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2 Globalisation.indd 227 10-04-2019 10:08:51 especially in Tamilnadu, Andhra, Karnataka 2.5 Multi National Corporation and Kerala with a view to boost exports (MNC) Nanguneri Sez, Ennore Sez, Coimbatore Sez are some in Tamilnadu. Multi National Corporation is a Corporate 2.4 Globalization in India organization which owns or In India the period after 1980-81 was controls production of goods or marked by severe balance of payment difficulties services in at least one country mainly due to hike in oil price and Gulf war in other than its home country. 1990-91 and hostilities in West Asia. Otherwise called Multinational Corporations When the new government took over in (MNCs) or Transnational Corporation (TNC) or June 1991. India had unprecedented balance of Multinational Enterprise (MNE). payment crisis. The finances of the central, and state Government had reached a situation of 2.5.1.Evolution of MNC near bankruptcy. Like, the East India Company, which came With the downgrading of India’s credit to India as a trading company and then its net rating by some international agencies, there was throughout the country to become politically heavy flight of capital out of India. dominant, these multinationals first start their Since India lost its credit worthiness in the activities in extractive industries or control raw international market, the government mortgaged materials in the host countries during 1920s and 40 tons of gold to the Bank of England. Under then slowly entered. The manufacturing and these circumstances, the government for 1991-92 service sectors after 1950s. Most of the MNC’s presented its budget in July 1991 with a series of at present belong to the four major exporting policy changes which underlined globalization, countries viz., USA, UK, France, Germany. liberalization and privatization. This has come However, the largest is American. to be called as India’s new economic policy. This 11 of the 15 largest multinationals are policies were strengthened when India signed American, In 1971, the American Corporations the Dunkel Draft in 1994. held 52 percent of the total world stock of foreign direct Investment. Great Britain held Reforms made to adopt Globalization:- 14.5 percent followed by France 5 percent (New Economic policy in India) and Federal Republic of Germany 4.4 percent and Japan 2.7 percent. In 1969 the American 1. Abolition of Industrial licensing, except for a Multinationals alone produced approximately few industries. 140 billion dollars worth of goods. 2. Reduction in the number of industries The American multinationals realize quite reserved for public sector. substantial returns to the extent of 34 percent 3. Fixation of a realistic exchange rate of rupee in Asiatic countries and 22 percent in African to exchange exports of Indian goods. countries. They then acquire enormous powers 4. Foreign private sector by making rupee in hose countries, which smoothens the free convertible on trade, on current account and flow of fund across international boundaries. by reducing import duties. They purchase the best brains in these countries 5. Foreign exchanges regulations were suitably and resort to unfair practices. With their amended huge resources, the MNCs are able to invest 6. The Statutory Liquidity Ratio (SLR) was in research and development and exploit reduced to increase lending by RBI. technological developments to manufacture new products, and discover new process.

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2 Globalisation.indd 228 10-04-2019 10:08:51 2.5.2.Growth of MNCs in India 4. Technological superiorities: A common form of MNC Participation The main reason why MNCs have been in Indian industry is through entering into encouraged by the underdeveloped countries to cooperation with Indian industrialist. Trends participate in their industrial development is on of liberalization in the 1980s gave a substantial account of the technological superiorities which these spurt to foreign collaborations. This would firms posses as compared to national companies. be clear from the fact that of the total 12,760 5. Product innovations: foreign collaboration agreements in 40 years MNCs have research and development between 1948-1988. As a result of liberalized engaged in the task of developing new products foreign investment policy (FIP) announced and superior designs of existing products. in July-Aug 1991 there has a further spurt of 2.5.4.Advantages of MNC foreign collaborations and increase flow of 1. Producing the same quality of goods at foreign direct investment. lower cost and without transaction cost 2. MNC reduce prices and increase the Purchasing power of consumers world wide 3. A MNCs is able to take advantage of tax variation. 4. Spurring job growth in the local economies 2.5.5. Disadvantages of MNC 1. They are a way for the corporations to develop a monopoly (for certain products) 2. They are also a detrimental effect on the MNC Company environment. 2.5.3. Reasons for the growth MNC 3. The introduction of MNC in to a host country’s economy may also lead to the 1. Expansion of Market territory. downfall of smaller, local business. As the operations of large sized firm 4. MNC breach ethical standards, accusing expand, it seeks more and more extension of its them of evading ethical laws and leveraging activates beyond the physical boundaries of the their business agenda with capital. country in which it is in corporate. 2. Marketing superiorities: Top 10 Largest Multinational Companies in India 2018 A multinational firm enjoys a number of marketing superiorities over the national 1. Sony Corporation firms. It enjoys market reputation and faces 2. Hew left Packard (HP) less difficulty in selling its products it adopt 3. Tata Group more effective advertising and sales promotion techniques. 4. Microsoft Corporation 5. IBM 3. Financial Superiorities 6. Nettle It has financial resources and a h high 7. Procter & Gamble level of funds utilization. It has easier access of external capital markets. Because of its 8. City Group international reputation it is able to raise more 9. Pepsi Company international resources. 10. The Coca-Cola Company

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2 Globalisation.indd 229 10-04-2019 10:08:52 Indian Multi National Companies Company Headquarter Type of Industry Countries of operating Columbia, Bangladesh, Hero Motocorp New Delhi Automobile Africa United Arab Emirates(UAE), Bajaj Pune Automobile Bangladesh Brazil,Chile,Colombia, TVS Chennai Automobile Mexico,Peru Australia,Bangaladesh, State Bank of India Mumbai Banking Belgium Bharti Airtel New Delhi Communication South Asia, Africa Micromax Informatics Gurgaon Electronics Nepal, Srilanka, Bangladesh US, Thailand, Malaysia, Amul Anand (Gujarat) Food product Hong Kong, Japan, ONGC Delhi Fuel Brazil, Colombia, Iran Dr. Reddy’s Laboratories Hyderabad Medical Laboratory Brazil, Mexico, Jamalica Infosys Bengaluru Software America, Europa, Africa

FERA (Foreign Exchange Regulation Act 1974) 2.6 Fair Trade Practices and This cA t referred directly to the World Trade Organization operations of MNCs in India Fair Trade is a way of doing business that FEMA (Foreign Exchange Management Act 1999) ultimately aims to keep small farmers an active part Under FEMA the emphasis is on of the world Market place, and aims to empower ‘Management’ rather than ‘regulation’ consumer to make purchases that support their Foreign Contribution (regulation) Act, 2010 values. Fair Trade is a set of business practices FCRA, 2010 has been enacted by the Parlia- voluntarily adopted by the producers and buyers ment to consolidate the law to regulate the of agricultural commodities and hand-made crafts acceptance and utilization of foreign contri- that are designed to advance many economic, bution or foreign hospitality by certain in- social and environmental goals, including, dividuals or associations or companies and • Raising and stabilizing the incomes of small- to prohibit acceptance and utilization of for- Scale farmers, farm workers and artisans. eign contribution or foreign hospitality for • More equitably distributing the economic any activities detrimental to national inter- gains, opportunities and risks associated est and for matters connected therewith or with the production and sale of these goods. incidental thereto. • Increasing the organizational and The flow of foreign contribution to India is commercial capacities of producer groups. regulated under • Promoting labor rights and the right • Foreign Contribution (Regulation) Act, 2010 workers to organize. • Promoting safe and sustainable farming • Foreign Contribution (Regulation) Rules, 2011 Methods and working conditions.

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2 Globalisation.indd 230 10-04-2019 10:08:52 Fair trade is about better prices, decent working conditions and fair terms of trade for Fair trade food product such as coffee, tea, farmers and workers. It’s about supporting the cocoa, honey and bananas. Non-food com- development of thriving farming and worker modities include crafts, textile and flowers. communities that have more central over their 2.6.3. GATT: (General Agreement of Trade futures and protecting the environment in which they live and work. and Tariffs) 2.6.1 Beneficiaries of Fair trade practices: GATT was signed by 23 countries in 1947. India was one of the founder members of GATT. 1. Consumer: In the seventh Round 99 countries participated. Consumer support enables Fair Trade In the Eighth Round of 1986, (Uruguay Round), Organisation to be advocates and comparing 117 countries participated. The Director for wider reform of International trading rules. General of GATT Arthur Dunkel came up with They can choose from an even growing range a Drafft Final Act, known as Dunked Draft and of great products. By buying Fair trade labeled on April 15, 1994 the Final Act was ultimately products consumers support producers who are approved and signed. GATT’s primary purpose struggling to improve their lives. was to increase International Trade by reducing 2. Trader/companies: various tariffs, quotas and subsidies while Since, it launch in 2002 the Fair trade mark maintaining meaningful regulations. has become the most widely, recognized social and development label in the world. Fair trade offers companies a credible way to ensure that their trade has a positive impact. 3. Producers: Stable prices that cover the costs of sustainable production. Market access that enable buyers to trade with producers who would otherwise be excluded from market. Partnership (Producers are involved in decisions their future). The Empowerment of farmers and workers. GATT Uruguay Round 2.6.2 Principles of Fair trade Organization • Creating Opportunities for Economically Rounds of GATT Disadvantaged producers. • First in Geneva (Switzerland) • Transparency and Accountability . (1947) • Fair Trading Practices and Payment of a Fair • Second in Annecy (France) in 1949 Price. • Third in Torquay (UK) in 1950 – 51 • Ensuring no child Labour and Forced • Fourth, fifth, and Sixth in Geneva Labour. (Switzerland) in 1956, 1960-61, 1964 -67. • Commitment to Non Discrimination, • Seventh in Tokyo (Japan) in 1973 – 79 Gender Equity and freedom of association. • Eighth and final round at Punta del Este • Providing Capacity Building and Promoting (Uruguay) in 1986 – 1994, known as Fair Building. ‘Uruguay Round’. • Respect for the Environment.

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2 Globalisation.indd 231 10-04-2019 10:08:52 2.6.4. World Trade Organization (WTO) G7 Countries: (Group of Seven)

2.6.5. Objectives of W.T.O World Trade Organization(WTO) • To set and enforce rules for international trade. The signing of the Final Act of the Uruguay Round by member nations of GATT in April • To provide a forum for negotiating and 1994 paved the way for setting up of the WTO. monitoring further trade liberalization. An agreement to this effect was signed by 104 • To resolve trade disputes. members. The WTO Agreement came into force • Introduction the sustainable development from January 1, 1995 ( the present membership and environment can go together. of WTO is 164 countries) • To ensure that developing countries, secure a better share of growth in world Trade. World Trade Organization(WTO): • To resolve trade disputes. Head Quarter: Geneva, Switzerland • To increase the transparency of decision Purpose: Regulation, International trade making processes. Members of WTO: Director General, Four • Introduction sustainable development the Deputy Director General, and other 600 Official development and environment can go together. Staff from around 80 member countries. • To ensure full employment and broad increase in effective demand. 2.6.6. Trade Related aspects of Intellectual The WTO mentions five types of Property Rights (TRIPs) subsidies: • Cash subsidies, such as the grants Intellectual Property Right may be defined as “Information with a commercial Value” Under mentioned above. TRIPs Patent shall be available for any invention • Tax concessions, such as exemptions, whether product or process in all fields of credits, or deferrals. industrial technologies. Trips agreement covers • Assumption of risk, such as loan seven areas of intellectual’s property rights i.e. guarantees. Copy rights, Trade Market, Trade Secrets, • Government procurement policies that Industrial Design, Geographical appellations pay more than the free-market price. Integrated circuits and Patents. • Stock purchases that keep a company's 2.6.7. Trade Related Investment Measures stock price higher than market levels. (TRIMs) These are all considered subsidies The Uruguay Round Agreement on TRIMs because they reduce the cost of doing refers to certain conditions (or) restrictions imposed by a government in respect of foreign business. investment in the country in order to give adequate provisions for the home industries to develop.

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2 Globalisation.indd 232 10-04-2019 10:08:53 2.7 Impact and Challenges extraction. This increase negative ecological of Globalization and Social costs. • Rapid increases in exploitation of natural 2.7.1. Positive Impact resources to earn foreign exchange. • Environmental standards and regulations • A better economy introduces rapid have been relaxed. development of the capital market. • Standard of living has increased. 2.7.3. Challenges of Globalization • Globalization rapidly increase better trade • The benefits of globalization extend to all so that more people are employed. countries that will not happen automatically. • Introduced new technologies and new • The fear that globalization leads to instability scientific research patterns. in the developing world. • The industrial world that increased global • Globalization increasing the GDP of a competition will lead in race to the bottom country. in wages, labour right, and employment • It helps to increase in free flow of goods and practice. also to increase Foreign Direct Investment. • It leads to global inbalance. • Globalization has resulted with the 2.7.2. Negative Impact embarrassment. • Too much flow of capital amongst countries, • Globalization has led to an increase in Introduces unfair and immoral distributors activities such as child labor and slavery. of Income. • People started consuming more junk food. • Another fear is losing national integrity. This caused, the degradation of health and Because of too much exchange of trade, spread of diseases. independent domestic policies are lost. • Globalization has led to environmental • Rapid growth of the economy has required degradation. a major infrastructure and resource

RECAP • Globalization is the integration of country with the world economy. • The three stages of Globalization : • Archiac Globalization • Proto Globalization • Modern Globalization. • LPG – Liberalization, Privatization, and Globalization • Multi National Company is a corporate organization which owns or control production of goods and services in at least one country to other than its home country. • MNC otherwise called Transnational Company(TNC) and Multinational Enterprises(MNE). • GATT was signed by 23 countries in 1947. India was one of the founder members of GATT.

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2 Globalisation.indd 233 10-04-2019 10:08:53 GLOSSARY

the process by which businesses or other globalization organizations develop international influence or start உலகமயமாக்쯍 operating on an international scale. expected or expecting to be the specified thing in the prospective future. வ쏁ங்கல of an early period of art or culture, especially the archaic 7th–6th centuries BC in Greece. தொன்மயான evolution the gradual development of something ப쎿ணாம வளர㞚்殿 expose to future risk or constraint for the sake of mortgaged அடமான믍 immediate advantage. வைக்ப்ட் the action of abolishing a system, practice, or abolition institution. ஒழித்쯍 spurt cause to gush out suddenly. தி翀ர detrimental tending to cause harm சீரழிவான thriving prosperous and growing; flourishing. வெற்றகரமான recognition and understanding of the difference discrimination between one thing and another. பா埁பா翁

EVALUATION a) Roman Empire b) Portuguese c) Dutch d) Danish 5. When did Portuguese colonize India? I. Choose the a) 1600 BC b) 1602 BC correct answer c) 1498 BC d) 1616 BC 1. Who is the head of the 6. GATT’s first round held in World Trade Organisation a) Tokyo b) Uruguay (WTO) c) Torquay d) Geneva a) Ministerial conference 7. India signed the Dunket proposal in b) Director General a) 1984 b) 1976 c) Deputy Director General c) 1950 d) 1994 d) None of these 8. who granted the English “golden Fireman” 2. How many countries were membership in in 1632 WTO at present? a) Jahangir b) Sultan of Golconda a) 159 b) 164 c) 148 d)128 c) Akbar d) Aurangzeb 3. Colonial advent in India a) Portuguese, Dutch, English, Danish, 9. Foreign Investment policy (FIP) announced French in b) Dutch, English, Danish , French a) June 1991 b) July 1991 c) Portuguese , Danish, Dutch, French, c) July- Aug-1991 d) Aug 1991 English 10. Indian government was introduced d) Danish, Portuguese, French, English, Dutch ______in 1991 4. Who first came to India for trading purpose? a) Globalization b) World Trade Organisation

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2 Globalisation.indd 234 10-04-2019 10:08:53 c) New Economic Policy corporation. d) none 4. Short note: The Dutch in South India. 5. What are the reforms made to adopt II. Fill in the Blanks globalization? 1. The Dutch captured Pondicherry in 6. What is Fair trade ? ______. 7. Write any five principles of Fair Trade 2. A better economy introduce rapid Practices. development of the ______. 8. What is the main objective of WTO? 3. The East India Company built fortified 9. Write short note on TRIPs and TRIMs. factory in Madras which known as ______. 10. Write the positive impact of Globalization. 4. WTO agreement came into force from VI. Brief Answer ______. 1. Write briefly the history of globalization. 5. The term globalization invented by 2. Briefly explain the evolution of MNC and its ______. advantages and disadvantages. 6. French East India company established 3. Explain the trade and traders in south india. second factory at ______. 4. Write about the World Trade Organisation. III. Choose the correct statement 5. Write the challenges of Globalization. 1. I) The East Indian Company specially to VII. Activity and Projects participate in the East Indian Spice Trade 1. Teacher and students are discuss about the and later added cotton, silk, Indigo. globalization. II) Merchants of the Dutch East India 2. Students are collect the images regarded Company first established at Calicut to the globalization and make the album. III) Nanadesis were a guild of traders at the (south Indian trade and traders images, and time of Hoysala Empire silk route map, spice route map, and kalinga a) I is correct trade map, etc) b) II and III are correct 3. Students are collect the picture of various Multinational corporation companies in c) I and III are correct india and its products pictures. d) I, II and III are correct IV. Match the following:- REFERENCE BOOKS 1. Multination corporation in India - 1947 1. Dr. S. Shankaran [2007], “Indian Economy” 2. MNC - enforce [Problem, Policies and Development] international 2. Dutt “Indian Economy” trade 3. History of Tamilnadu [Social and Cultuer] 3. GATT - Minimize cost of 4. S.K. Misra and V.K. Puri “Indian Economy” production 4. 8th Uruguay Round - Infosis 5. WTO - 1986 INTERNET RESOURCES V. Give Short Answers www.gateway for india.com 1. What is globalization? 2. Write the types of globalization. http://en.wikipedia.org 3. Write short note on Multinational http://www.investopedia.com

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2 Globalisation.indd 235 10-04-2019 10:08:53 Social Science – Class X List of Authors and Reviewers

History Geography Civics Economics Chairperson Domain Expert Domain Expert Domain Expert Dr. K.A.Manikumar, V. Tamilarasan R. Subramanian Dr. M. Kaliyaperumal Professor (Retd) Professor (Rtd), Dept. of History Associate Professor & Head Professor & Head (Retd), M S University, Thirunelveli Govt. Arts College Karur Soudeshwari Arts and Science Presidency College, Chennai College, Salem Co-chairperson Reviewer Reviewer Reviewer Dr. A.R.Venkatachalapathy Dr. P. Arul A. Karunanandam Professor, Dept. of History, Associate Professor HOD (Retd), Dept. of History, Dr. J. Jeyarajan Madras Institute of Development Govt. Arts College Salem Vivekananda College, Chennai Director, Institute of development Studies, Chennai alternatives, Chennai. Authors Authors Reviewers Authors Dr. K. Rutharvel Murthy P. Balamurugan Dr. A. Thennarasu Guest Lecturer, PG Assistant, GBHSS, L. Gowsalyadevi Associate Professor & Head Arignar Anna Govt. Arts College, Thammampatti, Salem P.G. Assistant, GHSS, Thoppur, Govt. Arts College, Salem Namakkal Dharmapuri D. Suganthi Dr. K. Jayakumar Dr. S. Senthil Kumar B.T. Assistant, K. Suresh Periyar E.V.R. College, Tiruchi Guest Lecturer, Govt. Kallar HS Annanji, Theni P.G. Assistant, GBHSS, Arignar Anna Govt. Arts College, Dr. J. Murugan Pennagaram, Dharmapuri Namakkal K. Velu Arignar Anna Govt. Arts College B.T. Assistant, Dr. M. Kumar Attur, Salem T. Shrijanani GGHSS, Thalaivasal, Salem P.G. Assistant, GHSS P.G. Assistant, GBHS School, Madhanackainpatti, Salem Authors Pappireddipatti, Dharmapuri S. Gomathimanickam Prof. Kanakalatha Mukund GHSS, Old Perungalathur M. Rajeswari Former Professor, C. Selvam Kanchipuram P.G. Assistant, GHSS, Centre for Economic and Social B.T. Assistant, Kumbinipettai, Vellore Studies, Hyderabad Subramaniya Sastriyar HSS, Arani, Thiruvannamalai D.Vani, Dr. S. Ananathakrishnan PG.Assistant, Malco.Vidyalaya. Associate Professor, K.G. Jothi MHSS, Mettur Dam, Salem A.M. Jain College, Chennai B.T. Assistant, GHSS, Vrinchipuram, Vellore S. Srinivasan Dr. Maavendar Singh P.G. Assistant, GHSS Assistant Professor, D. Jaisan B.Thurinjipatti, Dharmapuri S.R.M. University, Amaravathi TGT, MVMHSS Andhrapradesh Metturdam, Salem Dr. Venkat Ramanujam V. Jayachandran ICT Dept. of History, B.T. Assistant, GBHS School Dr. Asir Julius, Madras Christian College, Thammampatti, Salem Asst. Professor, SCERT, Chennai. Tambaram S. Shankar QR Code Team Dr. Jeevanantham B.T.Assistant, GHSS, Kattukottai, Salem R. Jaganathan, S.G.T., Asst. Professor, J.F. Paul Edwin Roy, B.T. Asst., Central University, Sikkim S. Sudaroli M. Saravanan, B.T. Asst. M. Amudha B.T. Assistant, Chinmaya Art and Design Team Lecturer, DIET, Kothagiri, vidyalaya PAC Ramasamy Raja The Nilgiris MHS School, Rajapalayam, Illustration Virudhunagar K. Velu, B.T. Assistant, R. Muthukumar GGHSS, Thalaivasal, Salem V. Vinoth Kumar Layout A. Jafar Ali, P.G. Assistant, GHSS, Keeripatty, Salem S. Ashok Kumar Academic Adviser & Expert R. Balasubramani S. Gomathimanickam S. Porsellvan GHSS, Old Perungalathurl, Dr. P. Kumar Kanchipuram Joint Director (Syllabus) Wrapper Design V. Ramakumari, BT. Assistant, SCERT, Chennai Kathir Arumugam HolyAngles Matric. HSS In-House QC Alagapuram, Salem Academic Co-ordinators Kamatchi Balan Arumugam B. Latha, BT. Assistant, T. Srinivasan Holy Angles Matric. HSS Principal, DIET, Krishnagiri Rajesh Thangappan Alagapuram, Salem P. Suresh Jerald Wilson P. G. Assistant, GGHSS, Yogesh K. Selvakumar, B.T. Assistant, Attur, Salem GHS, Kunnathur, Co-ordinator Thiruvannamalai Ramesh Munisamy V. Velmurugan, BT. Assistant, GHSS, Vellalakundam, Salem P. Vedapureesan, P.G. Assistant, GHSS, Azhiyur, Nagapattinam Dr. K. Suresh, B.T.Assistant, Kumara Rajah Muthiah HSS Chennai

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