Important Questions Class 11 Economics Indian Economic Development Chapter 6

Important Questions Class 11 Economics Indian Economic Development Chapter 6 – Rural Development

An economy can witness growth and development not only when the urban areas become more developed, but the rural areas also witness growth and upliftment. While people are engaged in farm and non-farm activities, agriculture is the primary source of occupation for the people living in rural areas. In an economy, the importance of rural area development is to be given because many people in the agricultural sector still live in abject poverty. This implies that for an economy to prosper, people engaged in various occupations in rural areas require some help to make their operations more productive. Chapter 6 in Class 11 Economics explains in detail the topic of rural development in India’s context. 

Students get to learn about rural development and the various issues attached to it, understand the role of various credit and marketing systems, learn about the importance of diversification in productive activities to enjoy a sustainable livelihood, and the significance of organic farming in sustainable development. Chapter 6 on Rural Development is an essential chapter for students from their learning perspective. The Important Questions Class 11 Economics Indian Economic Development Chapter 6 provided by Extramarks can be a great saviour to study and revise this chapter, especially before exams. 

Extramarks credibility lies in providing students in India with a trustworthy and reliable study partner. At Extramarks, we recognise the need to study important questions to perform well on exams. Extramarks subject experts ensure that the Important Questions Class 11 Economics Indian Economic Development Chapter 6 has the most reliable and credible solutions and students can actually speed up their preparation at the 11th hour. The list of important questions is produced after reviewing a wide range of sources, including NCERT books, CBSE sample papers, reference books, etc. These questionnaires are prepared by faculty experts who  meticulously prepare concise, authentic and reliable answers for the students to be well prepared and confident ahead of the exams.

Apart from the Important Questions Class 11 Economics Indian Economic Development Chapter 6, Extramarks has a repository of study resources such as NCERT books, NCERT solutions, CBSE past years’ question papers, CBSE sample papers, CBSE revision notes, reference books, etc. Further, it is ensured that the vital question list is created, keeping in mind the latest CBSE guidelines and syllabus for maximum effectiveness. 

Important Questions Class 11 Economics Indian Economic Development Chapter 6 with Solutions

Chapter 6 on rural development provides insights on many topics such as rural development, credit and marketing in rural areas, agriculture market systems, diversification into productive activities, and sustainable & organic farming activities. Students can have a deeper understanding by studying the Class 11 Economics Indian Economic Development Chapter 6 Important Questions, especially for students to practice before their examinations thoroughly.

Given below are some of the Important Questions Class 11 Economics Indian Economic Development Chapter 6 provided with solutions for students’ practice:

Question 1. Briefly explain rural development.

Answer 1: Rural development is implementing a strategy for rural areas’ social and economic upliftment.

Question 2. What does the microcredit programme mean?

  1. Credit provisions made by small farmers
  2. Credit provisions made by self-help groups to their members
  3. Credit provisions made by large farmers
  4. None of the above

Answer 2: b) Credit provision made by self-help groups to its members.

Explanation: Microcredit is a popular type of microfinance. A very small loan is offered to a person to assist them in starting their own small business or becoming self-employed.

Question 3. The full form of NABARD is 

  1. National Bank for Agriculture and Rural Development 
  2. Native Bank for Agriculture and Rural Development 
  3. Native Bank for Agriculture and Real Development   
  4. National Bank for Agriculture and Real Development 

Answer 3: a) National Bank for Agriculture and Rural Development

Question 4. Which of the following statements is false regarding SHGs? 

  1. Small and informal associations of poor persons 
  2. Provide rural credit by mobilising their resources 
  3. Introduced in 1982 
  4. Improve poor rural access to the formal credit system 

Answer 4: c) Introduced in 1982.

Explanation: SHGs were established in 1992 at NABARD’s proposal to connect the informal banking sector with the formal economy.

Question 5. What is horticulture?

Answer 5: Horticulture is a branch of crop agriculture that includes forestry and agronomy. Horticulture traditionally distributes garden produce like nuts, vegetables, fruits, spices, herbs, ornamental plants, crop varieties for beverages, and more.

Question 6. Define the term TANWA. Where is it used? 

Answer 6: Tamil Nadu Women in Agriculture is TANWA. The project, centred in Tamil Nadu, intends to teach women cutting-edge farming techniques. It motivates women to actively contribute to raising agricultural productivity and household income. They use the money they’ve raised to support small family activities like mushroom farming, soap production, doll making, and other sources of revenue.

Question 7. Discuss the importance of credit in rural development.

Answer 7: Credit is essential to developing rural areas. Farmers in rural areas earn less money, which results in lower savings. As a result, productivity has decreased. Banks also favour lending money to farmers who make a solid livelihood. Small or marginal farmers who borrow money from moneylenders fall into traps. Credit inflow is crucial for the agriculture industry to bring about rural development.

The following points can enumerate the importance of credit: 

  1. Farmers can commercialise their operations with the help of loans. In other words, credit is necessary for commercial farming. Because small and marginal farmers primarily produce for their own needs, they do not make enough money from their surplus to reinvest in their crops, which causes land degradation.
  2. Secondly, because crops take a while to mature between planting and harvesting, farmers are given credit for purchasing initial agricultural inputs like seeds and fertilisers.
  3. Farmers can escape the cycle of poverty with the help of credit. Farmers need finances to cover both general and specific needs. Government should employ inventiveness to fulfil these needs.

Question 8. What is sustainable development?

Answer 8: Sustainable development is the idea of accomplishing human development goals while preserving the capacity of natural systems to provide the resources and ecosystem services essential to the economy and society. Sustainable development is “development that satisfies existing needs without compromising the capacity of future generations.”

Sustainable development is easily understood with three overlapping virtues, namely, social, economic, and environmental progress, which highlights the need to balance and manage the trade-offs between them. 

Collaboration is required because sustainable development has an influence that transcends political boundaries. The best example of sustainable development is using wind energy to pump water or power homes, offices, and other facilities. The wind is a free resource, after all.

Question 9. Explain the steps taken by the Government of India in developing rural markets.

Answer 9: The following steps were taken by the government in developing rural markets:

1.Regulated Markets:

The government developed the idea of a regulated market, in which a market committee supervises the sales and acquisitions of items. The Market Committee is composed of traders, government officials, and farmers. This technique promotes greater transparency in the marketing system when used with appropriate scales and weights. These committees ensure that producers, such as farmers, and consumers, are paid fairly for their goods.

2. Infrastructure Development:

The current infrastructure is inadequate to meet the growing needs of farmers. The construction of cold storage facilities and warehouses by the Indian government let farmers sell their goods for a profit. Railways additionally offer farmers subsidised transportation. As a result, farmers may sell their produce in big cities and potentially earn a lot of money.

3. Cooperative Agricultural Marketing Societies:

To help farmers get fair prices, the government has also started cooperative marketing. This is due to the farmers’ stronger negotiating position due to the market’s collective selling.

4. Minimum Support Price Policy:

The Minimum Support Price is a set minimum standard that a farmer may demand in exchange for his goods (MSP). This enables them to sell their goods on the open market for more money. The MSP provides farmers with protection because it is the lowest price they can get in the case of a price decline.

Question 10. Distinguish between ‘Green Revolution’ and ‘Golden Revolution.

Answer 10: The following differences exist between the green revolution and the golden revolution:

Basis of Comparison Green Revolution  Golden Revolution
Meaning The Green Revolution is the term used to describe this rise in food grain production. Rice and wheat production was increased through the joint use of HYV seedlings, improved use of fertilisers, and developed irrigation systems. The Golden Revolution refers to the rapid increase in the production of horticulture crops such as fruits, vegetables, tuber crops, flowers, etc.
Production Increase It led to the increase in the production of rice and wheat. It increased the production of fruits, vegetables, flowers, aromatic plants, spices, etc.
Results As a result of the green revolution, India became self-sufficient in producing wheat and rice crops. As a result of the golden revolution, India became a global leader in producing mangoes, bananas, coconut and spices.

Question 11. Explain the role of non-farm employment in promoting rural diversification.

Answer 11: India relies heavily on agricultural products, and most people in rural areas work in agriculture. The need for non-farm activities has greatly expanded as a result of the overcrowding of the agricultural sector. The issue of disguised unemployment is a challenge for the agricultural sector. Compared to agriculture, non-farm sectors are less risky and help rural residents live comfortable lives. A few dynamic market segments where employment might be created include the agro-processing, leather, food processing, tourism, and leather industries. Other industries like pottery, handlooms and crafts lack infrastructure and assistance. A hallmark of rural diversification is that men and women from rural regions are looking for work possibilities in these businesses.

Question 12. Is rural banking successful in India? What are the difficulties? 

Answer 12: Residents in rural areas require the same banking services as those in larger towns and cities. A rural community bank may offer standard retail banking services like loans and mortgages to assist individuals and businesses with their local financial needs. Depending on the location and local business focus, some rural banks develop specialised commercial experience in agriculture-related industries. Here is the scenario of rural banks in the country:

  • Most Indians still live in rural or semi-urban areas; hence, rural banking has become a crucial part of the country’s financial markets.
  • The Government of India and the RBI, which is the Reserve Bank of India, have been working tirelessly to achieve overall financial inclusion, that is, timely and appropriate access to financial services and credit at a reasonable price, throughout our country.
  • The Pradhan Mantri the Jan Dhan Yojana, one of the most recent programmes launched by the new administration, clearly managed to bring banking into every home.
  • Over time, this rural banking programme will dramatically reduce the financial inclusion gap between rural and urban areas. Still, it is important to remember that 24% of Indians in rural areas have official bank accounts and that 70% of the country’s population still lives in rural areas.
  • By starting to provide formal credit to rural households, these banks’ actions have promoted banking culture.
  • These amenities have contributed to the modernisation of the agrarian-based economy.
  • Furthermore, banks must consider the complexities of culture and lifestyle and acknowledge that rural economic norms are distinct from urban forces. However, everything has its limits, so we can say that rural banking still has a way to go before it becomes completely successful in a nation like India.

The constraints of rural banking are mentioned below:


This can result from high operational costs, a decline in loan rates, lower profit margins, a considerable increase in employee compensation and benefits, etc.

2. Poor progress:

Due to several operational restrictions, Regional Rural Banks’ success falls short of expectations and is slow compared to other types of banks.

3. Limited investment scope:

Regional Rural Banks’ main objective was to extend credit to the weaker and poorer sections of society, including small and marginal farmers and other vulnerable groups.

4. Lack of training facilities:

Rural Regional Banks’ staff members are frequently urban-oriented; therefore, they might not be familiar with the difficulties and circumstances in rural areas. The absence of training facilities in these areas further hinders the expansion of Regional Rural Banks.

5. Capital deficiency:

The primary pillar of financial stability is adequate capital. Most Regional Rural Banks’ have large losses on their balance sheets, depleting all of their capital and resulting in a capital deficiency.

Question 13. Bring out the importance of animal husbandry, fisheries and horticulture as a source of diversification.

Answer 13: Importance of animal husbandry:

  • The most significant non-farm occupation in India is animal husbandry. It is also known as livestock farming. 
  • India’s three main elements of livestock farming are poultry, cattle, goats and sheep. The majority of rural families raise animals in addition to crops to boost their income. 
  • Comparatively, more animals are raised in semi-arid and arid regions than in irrigated regions. This is because agricultural cultivation is less feasible in arid regions. After all, they have limited access to irrigation systems. 
  • Therefore, it can be noted that livestock farming offers a sustainable means of livelihood to people in semi-arid and arid regions where farming is difficult..
  • Furthermore, compared to crop production, livestock farming requires less capital investment. Additionally, livestock farming is a significant source of work for rural women. 
  • Animal farming currently employs about 70 million small and marginal farmers, making it the most significant alternative employment sector. 
  • Livestock farming has increased the production of milk, eggs, meat, wool, and other by-products, creating jobs and improving the quality and nutritional value of the overall food supply.

Importance of fisheries:

  • In coastal states like Kerala, Maharashtra, Gujarat, and Tamil Nadu, fishing is a significant source of income.
  • India’s fishing community is reliant on both inland and marine water bodies. Rivers, lakes, ponds, and streams are inland sources, whereas seas and oceans are examples of marine sources. 
  • The state government’s escalating efforts have drawn funding to this industry, increasing production. 
  • The country continues to be among the most underdeveloped nations, with a low per capita income, a lack of labour mobility to other industries, illiteracy, and debt.
  • Despite having a sizable active section, this sector barely contributes 1.4% to India’s overall GDP.

Importance of horticulture:

  • In rural places, horticulture is becoming a significant source of income. Fruits, vegetables, medicinal and aromatic plants, and flowers are all examples of horticultural crops. 
  • India is currently the world’s second-largest producer of fruits and vegetables, including various species like mangoes, bananas, coconuts, and cashew nuts. 
  • The income levels of families involved in horticultural output have significantly increased. The vulnerability of small and marginal farmers has decreased due to the increase in horticulture production. 
  • 19% of the labour force in India is employed by it. This has given women access to new employment opportunities.
  • Horticulture does not experience ecological or environmental issues, in contrast to fishing. Therefore, horticulture needs to be promoted with enough funding and infrastructure.

Question 14. How can IT help achieve the target of sustainable development and food security? 

Answer 14: In the opinion of many modern thinkers, information technology can be crucial to achieving food security and sustainable development. IT cannot alter things on its own, but when used effectively as a tool, it can help.

Here are a few ways in which IT can aid in sustainable development and food security issues:

  • The government can use information technology to provide timely information about areas prone to food insecurity, facilitating a quick response.
  • Farmers can access information on current weather conditions, seed costs, and agricultural product prices. They can also find relevant information on the best farming practices online if they have access to the internet.
  • Today, most Indian villages have access to mobile phones, which can be utilised as a tool to help farmers take advantage of information technology. Farmers in their area can use short message systems (SMS) to get farming advice, weather forecasts, and market prices. Farmers can utilise the internet to learn about new farming techniques, trade, and build new partnerships.
  • As the world’s population increases, much more effort and innovation will be necessary to sustainably increase agricultural production. It will strengthen the global supply chain, reduce food losses and waste, and ensure that everyone suffering from hunger and malnutrition has access to nourishing food.
  • Many individuals worldwide believe that eradicating hunger within the next generation is an achievable goal, and they are working together to achieve it.
  • The Sustainable Development Goal 2 (SDG2), which seeks to “End Hunger, Achieve Food Security, Improve Nutrition, and Promote Sustainable Agriculture,” recognises the interdependence of promoting sustainable agriculture. It empowers small farmers, advancing gender equality, ending rural poverty, ensuring healthy lifestyles, combating climate change, and other issues covered by the 17 SDGs.
  • In India, e-Choupal offers services to help farmers raise production and secure higher prices. TradeNet, a company based in Accra, Ghana, has created a platform that enables farmers and dealers worldwide to exchange market data using mobile networks and the internet. Similar platforms are being constructed in Kenya.
  • The first step in tackling food security is thorough monitoring of the world’s food supplies. It involves creating huge datasets and tracking agricultural productivity and food shortages.
  • Using ICT, which enables remote sensing of agricultural and water resources and collecting, analysing, and disseminating data crucial to food security using computers and software, may significantly improve monitoring. Additionally, geographic information systems provide great resources for statistical analysis.
  • Rural radio connects individuals in remote areas and helps them increase the efficiency and productivity of their farming operations. Farmers in rural areas can also obtain information through community telecentres, sometimes known as digital villages, which offer internet, phone, and fax services to rural residents.

Question 15. Do you think the various measures taken by the government to improve agricultural marketing are sufficient? Discuss.

Answer 15: The Indian government has taken several measures to enhance agricultural marketing, including market regulation, infrastructure development, cold storage facilities, warehouses, highways, and railways, and the establishment of cooperative agricultural marketing societies. It has also implemented a minimum support price policy. The market is still dominated by private parties, including money lenders, intermediaries, politicians, and wealthy farmers, despite government efforts to enhance agricultural marketing.

Following are some of the problems faced by agricultural marketing mechanisms:

  • Farmers lack awareness of market prices and conditions, resulting in the sale of produce at a lower-than-expected price.
  • Farmers are forced to sell their produce at low prices due to a lack of storage space.
  • Farmers cannot reach new markets due to a lack of transportation options.
  • Many mediators are involved, which decreases customer interaction and lowers farmer compensation.
  • Farmers are simple victims of false weighing techniques.
  • Farmers are forced to take out high-interest loans from moneylenders due to a lack of institutional credit.

Question 16. Critically evaluate the role of the rural banking system in rural development in India.

Answer 16: In the past, farmers would borrow money from traders or moneylenders who would take advantage of them by demanding exorbitant interest rates or manipulating their records to keep them in debt. When social banking and a multi-agency approach were adopted in 1969 to fully address rural India’s credit demands, it brought about a much-needed transformation in the credit facilities available to that sector of the economy. Later, as part of a government initiative, the National Bank for Agriculture and Rural Development (NABARD) was also established to coordinate all of the institutions involved in funding for rural areas.

Later, the Green Revolution took place, which enhanced both Indian agriculture and credit facilities by introducing modern farming techniques and technology. It also resulted in the diversification of rural credit portfolios toward product-oriented lending. 

Today’s rural banking industry comprises several multiagency entities, including commercial banks, regional-rural banks, cooperatives, and land development banks. It strives to provide the rural economy with the credit it needs at lower interest rates. Self-Help Groups (SHGs) have recently been founded in rural areas to encourage people to spend responsibly, save money in small amounts, and contribute a small quantity to the group. The combined funds would be used to give needy members credit that members would repay in modest monthly instalments with minimal interest.

Rapid banking system expansions have helped rural sector development in the following ways:

  1. Favorable impact on agricultural and non-farm production in rural areas.
  2. Consistent income and job prospects due to the availability of various loans to meet farmers’ production needs.
  3. Achieving food security and maintaining a grain buffer supply.
  4. Encourage thrift and saving.

Despite the formation of multi-agency institutions, there remained gaps in lending facilities in rural India. Most poor people were cut off from the credit network and forced to borrow loans from unorganised money lenders and wealthy farmers who would charge high-interest rates because banks and cooperatives required collateral security to utilise loans. Even though a lot of steps have been taken to develop rural credit, India still has a long way to go to build a strong and effective banking system. In the banking area, most credit institutions perform poorly, and most borrowers are willful defaulters, which discourages lending facilities in this sector.

Farmer suicides are a major cause of concern for our country today. They highlight the lack of employment opportunities or appropriate income and the pressure that credit lenders put on farmers, particularly in the event of crop failure or other unfavourable circumstances that drive the farmers to suicide.

Benefits of Solving Important Questions Class 11 Economics Indian Economic Development Chapter 6

Economics is a subject that requires students to have a deeper understanding of the core concepts to relate them to the current world. The concepts can be challenging and interesting for students to learn and study, but with the right amount of practice, students can develop an interest in the subject. Students can take the help of Chapter 6 Class 11 Economics Indian Economic Development Important Questions to cover all the crucial concepts mentioned in the chapter. Practising the questions can help in understanding the concepts and prepare them in a way that will help them in their examinations.

Here are some of the benefits of solving the Important Questions Class 11 Economics Indian Economic Development Chapter 6 for students:

  • The questions are collated from various study materials keeping in mind the latest CBSE guidelines and syllabus so that the students can refer to it.
  • The Important Questions Class 11 Economics Indian Economic Development Chapter 6 covers questions from all core concepts of the chapter. Practising these questions will also ensure complete chapter revision for students.
  • Students can simply study and have a revision of the chapter with the support of the important questions. Experts provide straightforward, step-by-step solutions so students can readily understand the key concepts to answer any advanced-level questions and perform well on exams.
  • The students get solutions to the Economics Indian Economic Development Class 11 Chapter 6 Important Questions available in a simple step-by-step method, making it easy to comprehend and giving an overview of how students should present answers in the examinations.

Extramarks also provide various sources of study materials for a holistic study session for students. Apart from the Important Questions Class 11 Economics Indian Economic Development Chapter 6, students get access to NCERT textbooks, NCERT revision notes, CBSE sample papers, CBSE past years’ question papers, CBSE extra questions, and CBSE mock exams. All of these resources, along with the essential questions, can be accessed on the Extramarks website.

The students can access these resources by clicking on the links below:

  • NCERT books
  • CBSE Revision Notes
  • CBSE syllabus
  • CBSE sample papers
  • CBSE past years’ question papers
  • Important formulas 
  • CBSE extra questions

Q.1 According to Professor Alfred Marshal the economics is

A. ‘the study of man in the ordinary business of life’

B. ‘the study of wealth of nation’

C. ‘the study of the business of the nation’

D. ‘the study of production and consumption’


‘the study of man in the ordinary business of life’

Q.2 Why is statistics a necessary tool for the Economist


Statistics is a necessary tool for the economist in many ways: –

1. To understand any economic problem the economist must have all the quantitative and qualitative facts about it which he gets with the help of statistics.

2. It also enables the economist to provide facts in a precise and definite form. If we say that 25% of Indians are illiterate it makes more impact than saying that lots of people are illiterate.

3. Statistical tool helps to condense the mass of data into a few numerical measures such as mean, variance etc.

4. Statistics is often used to find relationship between different economic factors. Like demand and price of a good. In some cases, the economist might assume certain relationship between them and want to test whether the assumptions he made was correct or not. This can be done only by using statistical techniques.

5. The economist also has to know the impact of changes in one variable on another, like the impact of todays investment on the National Income in future.

6. Statistics is used to predict future trends based on the data of past years.

Q.3 Statistical methods are no substitute for common sense. Comment.


Yes, statistical methods should not be used blindly. Every science needs basic intelligence and common sense. There is a story about statistics giving foolish results. An epidemic broke out in some villages of a state. Help was sent in terms of doctors and medicines. It was found that the number of deaths was highest in the village where the number of doctors was highest. So according to statistical data it was concluded that doctors were responsible for the deaths and should be punished.

This conclusion is wrong. Thus, statistics should be used with basic intelligence and common sense.

From the above example, it is clear that statistical methods should be used carefully.

Q.4 What considerations should be kept in mind while using Statistical data


The quality of data plays an important part in statistical analyses. Fallacies may arise if we are using data which is insufficient or unrepresentative or incomparable.

If we want to estimate the average income of people living in a town and base our estimate on income of people living in the rich areas of the town only we will get an overestimate.

Any vagueness in the definitions and concepts in data collection may lead to wrong conclusions. If we are collecting figures on income than we should know exactly how we intend to calculate income. A wage or salary earner may easily give an answer but a businessmans income differs from month to month. We should decide how we will calculate his income.

Lastly statistical methods should be used with a lot of common sense.

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FAQs (Frequently Asked Questions)

1. Are the important questions for Class 11 Economics helpful in studying chapter 6?

The Important Questions Class 11 Economics Indian Economic Development Chapter 6 provided by Extramarks are a great saviour for students studying and revising chapter 6 for Class 11 Economics. The questions and solutions provided by subject experts will guide the students on how the questions might appear in the examinations especially at the 11th hour when students don’t have much time and how they should answer them. As the questions are covered from the chapter, going through these questions can also help students revise the entire chapter without missing out on a single topic. Hence these questions are a helpful resource along with other study materials such as NCERT books, CBSE past years’ question papers, and reference books.

2. What are the books that are to be used to study Class 11 Economics?

The Central Board of Secondary Education (CBSE)  has recommended two books for Class 11 Economics. The first book, The Indian Economic Development, discusses issues including the Indian economy, policies relating to privatisation, liberalisation, and globalisation, as well as issues like rural development, poverty, infrastructure, and the environment.

Statistics for Economics, the second book, covers data collection, organisation, presentation, central tendency, measures of dispersion, correlation, and statistical techniques, among others.

Students can gain from studying both NCERT books since most of the CBSE board questions are picked from the NCERT books.