Economy And Government

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ಕನ್ನಡದಲ್ಲಿ ನೋಡಿ

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Concept Map


Text book

  1. karnataka Text book Economy And Government

Additional References

The Indian Economy Since Independence has a simple overview of the Indian economy and covers different ideas relating to the role of Government / public sector.

  1. more information about Economy and government

How the topic is discussed in NCERT Books

The chapter has a few distinct components

  1. Role of Government in economy (this is very well written, lucid and easy to read and understand)
  2. Green revolution
  3. Globalisation, liberalisation and privatisation

There is no single equivalent chapter in the NCERT books.

  1. Karnataka Text Book Class 10 - Economics - Chapter 2 - Economy and Government => NCERT Text Book of class 10, Chapter 4 - Globalisation and the Indian Economy has a detailed discussion on globalisation, which is worth reading. The benefits of globalisation and its the harmful effects as well as possible methods to address the problems are discussed. Many examples from real life have also been given, e.g. IT Industry boom due to globalisation, the growth of Indian MNCs (multi national companies) of Tata, Birla, Reliance groups is discussed. The chapter has many photographs and cartoons which are illuminative. There are many discussion points given as 'let us work it out' which can be used for CCE purposes as well. Very useful to read
  2. Karnataka Text Book Class 10 - Economics - Chapter 2 - Economy and Government => NCERT Text Book - Class 12, Chapter 5 - The Government - Budget and Economy has a very brief discussion on Government role in economy.

Useful websites

Wikipedia has many pages relevant to this topic. These pages give a broad overview of the topic and sub topics. There are also further weblinks to other sites on these sub topics. Going through these links will give a good idea. The language is also quite simple to follow.


Newspapers and magazines focused on economics

  1. Economic Times
  2. Financial Express
  3. Economic and Political Weekly
  4. International magazine 'Economist' that discusses economic news across the world

Reference Books

Redefining the Role of the State, Joseph Stiglitz. This article discusses in detail the events over the last few decades of the role of markets and governments in economic activities and the advantages/disadvantages, benefits/challenges of both.

The Role of Government in Economic Development. Author Joseph E. Stiglitz

Teaching Outlines

Please describe the key ideas to be conveyed in this section. Also broken down in details by each idea

Key Idea #1 Role of Government

A couple of hundred years ago, it was believed that the Government should not enter into economic activities and only focus on core functions such as security (law and order, defence). This is termed 'Laissez Faire' (least interference) and was promoted by 'classical economists' such as Adam Smith, the 'father' of modern economics.

However, the experiences of the great depression of the 1930's as well as World War 1 and 2 convinced most that Government has an important role in the economic activities.

John Maynard Keynes, was an influential economist, who argued that Government had an important role in the economy, to stimulate economic growth, income and employment and counter business cycles. It is often said that ' "We are all Keynesians now"], since most people support some kind of a role for Government in economic activities. The role of Government covers many aspects such as

  1. Providing for public goods like law and order, defence, education, health, transport
  2. Re-distributing national income through fiscal measures such as taxation
  3. Promoting social justice and equity
  4. Creating and maintaining core economic infrastructure
  5. Countering business cycles (inflation and depression), through monetary and fiscal measures
  6. Regulating the private sector's economic activities, this includes both enabling/encouraging certain activities and discouraging others

Learning objectives

  1. Understand the role that Governments play in the economy of a country
  2. Understand the need for Governments to play such a role
  3. Be aware of the areas in which Indian Government has a role in Indian economy

Notes for teachers

It is important to understand that the role of Government in economic activities is very important one. This is also changing, in some areas the government is withdrawing and giving the space to the private sector, it is also expanding in some other sectors. Comparing the role played in India with other countries can help in broadening our understanding. Wikipedia has many articles relating to this topic which should be read to give a deeper understanding.


  1. Activity No #1 Concept Name - Activity No.Economy_and_government_role of government_activity1
  2. Activity No #2 Concept Name - Activity No.Economy_and_government_role of government_activity2

Key Idea #2Economic Planning

In theory, free market capitalism has stressed the need for governments to not interfere in economic activities ('Laissez Faire'), while socialism has made state planning the main method of deciding the goods/services to be produced and their quantities etc.

India adopted the Soviet Union model of five year plans, and the initial focus was to support rapid industrialization of the economy. Under this approach, the 'public sector'became quite dominant. India's first prime minister, Sri Jawaharlal Nehru suggested that the Public Sector should hold the "commanding heights of the economy". Over decades, the movement towards a 'mixed economy' have been strong, yet the five year plans have an important role in guiding the economic development and growth in India.

Learning objectives

  1. Understand the importance of planning in an economy
  2. Become aware of the five year planning process in India
  3. Understand the gains and limitations of India's five year plans

Notes for teachers

A useful history of the five year plans of India is available in Wikipedia. The history shows how the priorities and focus areas of planning in India have changed over time. Initially the focus was primarily on industrialisation, which is more diffused now, with focus on services sector also. The direct intervention through establishing public sector units has reduced with role of regulation of private sector increasing, due to the liberalisation and privatisation processes in India. In response to the ill effects of liberalisation and privatisation processes, the recent five year plans have attempted to focus on 'globalisation with a human face' and on 'sustainable development'. There is also more attention being given to the environmental implications of economic activities. Explaining the planning processes and plans through a historical narrative will make it more realistic for learners.


  1. Activity No #1 Economy_And_Government_economic_planning_activity1
  2. Activity No #2 Economy_And_Government_economic_planning_activity2

Assessment activities for CCE

Usually, the daily newspaper will have many articles on specific government schemes, activities, announcements that impact economic activities.

Students can be asked to identify such of these topics that interest them and a presentation (by teams of students for each topic) followed by a discussion on issues can help get an assessment of the students understanding of economic issues and their understanding and views about the Governments role in economic activities.

For instance, Government provisioning of public goods - articles relating to the budgetary support provided under SSA, RMSA for school education, the Mid day meals scheme etc can be discussed.What the budgetary allocations? How does the Government fund these? Is such funding required? Similarly health provisioning through the National Rural Health Mission programme

A second example could be Government efforts to reduce poverty and unemployment through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for livelihoods support can be discussed.

A third example could be Government efforts to counter business cycles by responding to inflationary pressures on the economy, reducing deficit financing and balancing the budget.

Such discussions will make these macro economic topics easier to understand as well as for the teacher to assess understanding.

Project Ideas

Review your school academic plan (SAP). What are the components that involve receipt and expenditure of money? Compare the plan for current year, with the plans of the last five years. Please make a plan for the next five years for the academic and overall development of your school. What factors would you consider? Who all would you consult to make this plan?

Community Based Project

Conduct interviews with the local shop keeper, panchayat official about the role the Government plays in Indian economy. Ask if the role of Government has increased or reduced over time and the nature of the role played.

Textbook Feedback

Please add below suggestions/ errors in the textbook.

The English text book is a pleasure to read. The language is easy and flows well and in a simple way, the concepts have been explained.

Spelling errors

  1. page 248. aslo => also
  2. page 248. fire => five
  3. page 248.achive => achieve
  4. page 249.complimentary => complementary

Grammatical errors

  1. The first two paragraphs say 'man's economic activities'. It can simply say 'economic activities' since only the human species has economic activities.
  2. "Soviet Russia implemented the economic plan" can be changed to "Soviet Russia implemented economic planning"
  3. "student has to utilize their time" can be changed to "student has to utilize his/her time"