NCERT Solutions for Class 12 Economics

Students have elementary knowledge of economics in class 10th. In class 11th CBSE board they are supposed to learn Microeconomic and Statistics. Microeconomics was study of economic variables at an individual level whereas Macroeconomics (which we study in class 12) is the study of aggregates like aggregate demand, aggregate supply.

In class 12th, the syllabus is divided equally (in terms of marks) into macroeconomics (40 marks) and Indian economics (40 marks). There are 5 units in Macroeconomics and 8 topics in Indian economic development. For the session 2024-25, the topics infrastructure and poverty have been deleted from the syllabus prescribed by CBSE class 12th from Indian economic development.

Students are introduced to the topic money and banking (carrying 6 marks) in which we study the functions of money (reintroduced from section 2024-25) and limitations of barter system. The functions of the Central bank (The Reserve bank of India) are also to be studied. There are six major functions performed by a Central bank. One of the most important functions which has gained lot of publicity these days and is equally important from an examination point of view is the function of credit control by exercising monetary policies like – repo rate, CRR, SLR, open market operations, margin requirements.

• It also studies how the economy functions by first preparing a road map called the government budget (6 marks).
• We also study how to measure national income. The topic on measurement of national income carries 10 marks.
• Determination of equilibrium level of national income and investment multiplier carry 12 marks.

The syllabus on Class 12 Macroeconomics concludes by studying balance of payment and foreign exchange determination (together, the weightage of these two topics is 6 marks).
The subject Indian economic development is broadly divided into three units containing 8 chapters. The beginning of Indian economic development is by studying the situation of the country at the time of independence and concludes with comparison of the economies of India, Pakistan and China.

Two topics namely measurement of national income and determination of equilibrium income/investment multiplier are topics which are application based and numericals carrying 6 marks each are generally asked from these two topics. The topic on determination of income has graphs also. Students are expected to labels the axes properly. Numericals can also be asked from the topic government budget and foreign exchange- but the chances are less as compare to the first two topics discussed at the outset.
So far as, theory questions are concerned, we shall provide a list in the ensuing pages. It is expected that the students practice these question/answers thoroughly. What questions on Indian economics will be asked is difficult to say – however, we have tried to suggest all time important questions.

Revision is the most important aspect of learning. As a general rule, students are expected to complete their syllabus by the end of November- assuming that the course commences on time in the first week of April. There should be two revisions before the final exams. At least, three model papers should be attempted and solved to measure the preparedness for the exam. These should also be evaluated by the subject teacher or tutor and the mistakes noticed should be rectified.

The second part of Economics for class 12th CBSE comprises of Indian economy development carrying 40 marks. Remember 20 marks are for the project file and the viva question at the end of the second term. As young adults, students are exposed to the economic system, government policies and the problems being faced by the Indian economy and how we faced them since the time of Britishers.
Broadly, the syllabus is divided into three parts, First part consist of Indian economy on the eve of independence, steps taken by our planners from 1950 to 1990 and economic reforms introduced in 1991.

The second unit in economic development consist of the important economics problems faced by Indian economy mainly, poverty, human capital formations, rural development, employment, infrastructure and sustainable development. Out of these topics, the topic poverty and infrastructure have been deleted by CBSE for 22- 23. The last unit consist of development experience of India with its neighbours Pakistan and China.

In chapter 1 we study about the functioning of Indian economy and different sectors at the time of independence. We study how Britishers almost demolished the Indian economy but by the grace of God they left behind good infrastructure which laid foundation for future.
In chapter 2, we study about the growth of Indian economy during the period of 1950 – 1990.
In chapter 3, The 3 main components of economy reform: Liberalisation, privatization and globalization are studied.
Chapter 4 CBSE students can skip this topic. (Poverty)
Chapter 5 Deals with the most important aspect of any economy namely, human capital and its formation.
Chapter 6 Deals with rural development, agricultural marketing and agriculture trading. The sub topic organic farming is important.
Chapter 7 Deals with employment and related issues.
Chapter 8 The topic infrastructure can be omitted by CBSE students.
Chapter 9 is related to environment and sustainable development.
Finally, chapter 10 is a comparison between economies of India, Pakistan and China.
So far as, the marking scheme is concerned different Boards have different marking schemes.

Important questions
We are providing 3 of the most important questions in each of the 8 chapters.

• Chapter 1. Indian economy on the eve of independence
  (a) Reasons for backwardness of agriculture on the eve of independence.
  (b) Positive contributions by Britishers.
  (c) State of the industrial sector and infrastructure on the eve of independence.
• Chapter 2. Indian economy in 1950 to 1990
  (a) What are the periods of different five year plans and what were the priorities of the same?
  (b) Land reforms
  (c) The policy of import substitution.
• Chapter 3. Economic reforms in 1991
  (a) Define the terms Liberalisation, Privatisation and Globalisation
  (b) Advantages and disadvantages of globalization
  (c) How did economic reforms boost the Indian economy?
• Chapter 5. Sources of Human capital
  (a) Distinguish between human capital and human development.
  (b) Education sectors in India.
  (c) What is the state of human capital formation?
• Chapter 6. rural development
  (a) How does organic farming contribute to good of the economy?
  (b) Write the brief note on agricultural credit.
  (c) Agriculture marketing strategies in India.
• Chapter 7. Employment and related issues
  (a) What are the different types of employment prevalent in India?
  (b) Changing structure of employment/ occupational structure in India?
  (c) Steps taken by the government/ Government schemes for employment generation.
• Chapter 9. Environment and sustainable development
  (a) The need for sustainable development.
  (b) The strategies for sustainable development
  (c) The efforts of global bodies for preserving the environment and to promote sustainable development.
• Chapter 10. Comparative development experiences of India and its neighbors
  (a) The great leap forward movement of China
  (b) The demographic indicators of three countries
  (c) The strategies followed by the three countries during the development process.

For revising Indian economics, we suggest that the entire syllabus be broken up into four or five parts.

1. The important years when some event took place. For example, economic reforms took place in 1991. The TISCO was establish in 1907.
2. Important definitions like – liberalization, privatization, globalization, sustainable development, unemployment, human capital formation, human development etc.
3. The short questions carrying three to four marks. For example, what are the benefits of organic farming? What are the argument in favour of subsidies?
4. Long questions carrying more than four marks. For example, how did the British rule help the Indian economy? What are the different employment schemes of government of India?

Finally, three model papers must be solved. If the student has chosen a topic like sustainable development for project work, he/she must master the particular topic for viva.