Definitions [10]
Definition: Economic activity
Man's efforts to satisfy his desire for food, shelter and clothing constitute the primary economic activity of man.
Definition: Economic Goods
The scarce objects which are attained through a serious and continuous effort of man for the satisfaction of basic needs of living are known as economic goods.
Definition: Utility
“Utility means how much satisfaction one can get from a particular good to fulfil one’s desire.”
Definition: Free Goods
“The goods which can be attained spontaneously, such as air, sunlight, river water etc., are known as free goods.”
Definition: Capital Goods
“Capital goods are having the utility to produce further, as for instance, machinery, raw material etc.”
Definition: Consumer Goods
“Capital goods are having the utility to produce further, as for instance, machinery, raw material etc.”
Definition: Price
“Every economic good has a price. This implies the money or other medium to be received in exchange of the economic good.”
Definition: Cost (Cost of Production)
“While an item is produced, it involves an expense, which is known as cost of production.”
Definition: Profit
“When the cost is deducted from the price of a thing, the remains comprise profit.”
Definition: Economic Organisation
Madan and Majumdar define economic organisation thus, "it consists of the ordering and organisation of human relations and human effort in order to procure as many of the necessities of day-to-day life as possible with the expenditure of minimum effort."
Key Points
Key points: Food Gathering
- Food gathering is one of the oldest tribal occupations.
- Tribes collect fruits, honey, roots, and hunt animals.
- Fishing is also a form of food gathering.
- Tribes like Birhor, Kharia, and Chenchu practice it.
- Tribes often move to new areas when food becomes scarce.
Key points: Agriculture
- Agriculture is the main economic activity of Indian tribes.
- Tribes like Oraon, Munda, Santhal, Bhil, and Ho practice farming.
- Both men and women work in the fields.
- Women mainly do sowing, weeding, and harvesting.
- Some tribes work as agricultural labourers on cash payment.
Key points: Shifting Axe-Cultivation
- Shifting cultivation involves changing fields after each crop.
- Land is cultivated for a short period and then abandoned.
- It is known as Jhoom, Penda, or Bewar in different regions.
- Forests are cleared by cutting and burning trees.
- The practice is declining due to population growth and soil conservation.
Key points: Handicrafts
- Handicrafts support agriculture and hunting activities.
- Activities include basket making, weaving, pottery, and metal work.
- Tribal handicrafts have varied regional forms.
- Products are often made from natural materials.
- Tribal handicrafts are popular even in modern markets.
Key points: Pastoralism
- Pastoralism is based on rearing of animals.
- The Toda tribe depends mainly on buffaloes.
- Milk and milk products are the main sources of income.
- Pastoral tribes exchange products with neighbouring communities.
- Pastoral life is closely linked with social and religious practices.
Key points: Industrial Labour
- Tribals gradually shifted from traditional occupations to industrial labour.
- Many work in mines, factories, and construction.
- Santhals are known as coal cutters and mine workers.
- Displacement forced tribals to work as wage labourers.
- Tribes are increasingly absorbed into the modern economy.
Key Points: Agrarian Economy
- Before colonial rule, village land was under community ownership and land relations were simple.
- British rule introduced a new revenue system, altering traditional agrarian arrangements.
- Colonial policies led to the emergence of landlordism in some areas and individual peasant proprietorship in others.
- Agrarian social structure in India varies from region to region and is highly complex.
- The colonial period witnessed differentiation and disintegration of the peasant proprietors.
Key Points: Profit Sharing
- Profit sharing allows workers to receive a share of company profits in addition to wages.
- Profits are given as bonus, retirement benefits, or company shares.
- The scheme is usually voluntary and privately implemented in industries.
- It creates a sense of ownership and cooperation between workers and management.
- Profit sharing helps handle crises when responsibilities and losses are shared.
Key Points: The Enterprises As An Association
- Industries perform a social role, not merely an economic function.
- Workers, management, and owners share common responsibility in production.
- Workers’ participation improves commitment and productivity.
- Modern enterprises provide better working conditions and welfare facilities.
- Co-operation between labour and management is essential for industrial success.
Key Points: Co-Management
- Co-management involves workers’ participation in policy-making and management decisions.
- Workers take part in economic decisions like production quality, costs, wages, and markets.
- The system was successfully practiced in Germany, especially after economic recovery.
- Co-management has limitations as management requires specialised skills and true sharing is difficult.
- If properly implemented, co-management can promote social equality and economic growth.
Key points: Property of Primitive Economics
- Primitive economies gave little importance to accumulation of property.
- Property included material goods, land, and social privileges.
- Ownership was mainly collective or community-based, not individual.
- The concept of multiple possessory rights existed over the same land.
- Property and inheritance systems were simple compared to modern society.
Key Points: Economic Organisation
- Tribal economy is mainly a subsistence economy based on simple production–consumption relations.
- Thurnwald identified various types of tribal economic life such as hunters, agriculturists, herdsmen, and artisans.
- Tribal societies show homogeneous and graded economic structures at different stages of development.
- Economic classification is often based on food quest like hunting, fishing, agriculture, and herding.
- Tribal economy is community-oriented, unlike modern economy which is individual-centred.
Key Points: Land Relations
- Daniel Thorner classified agrarian classes on the basis of income from land, nature of rights, and extent of field work.
- On this basis, agrarian society was divided into Maliks, Kisans and Mazdoors.
- Tenancy and sharecropping expanded during the British period, often with insecure rights.
- The main forms of land relations are Landlord–Tenant and Landlord–Agricultural Labour relationships.
- These relationships are largely characterized by subordination of tenants and agricultural labourers to landlords.
Key Points: Jajmani System
- The Jajmani system refers to economic, social and ritual ties among different caste groups in a village.
- It is based on caste-based specialised occupations and the exchange of services between patron (jajman) and service castes.
- Service relations are hereditary, with specialist workers such as potters, carpenters and barbers serving specific families.
- The serving castes receive payment in cash and kind and render services on economic and ritual occasions like birth, marriage and death.
- The Jajmani system involves interdependence, reciprocity and cooperation among castes and families in rural society.
Key points: Economies of Indian Tribes
- Indian tribes passed through food-gathering, pastoral, and agricultural stages, not always in sequence.
- Different economic activities like hunting, farming, and animal husbandry often coexist.
- Madan and Majumdar classified tribal India into three geographical–agricultural zones.
- Agriculture is the main source of livelihood, along with hunting, fishing, and forest produce.
- In recent times, tribes are entering wage labour, education, and technical occupations.
Key Points: Collecting Economy
- Nature-based subsistence – Collecting economy depends on direct use of natural products like fruits, nuts, roots, honey, fish and wild animals without altering them.
- Minimal or no tools – In its pure form, no tools are used, though in practice very simple tools were later adopted.
- Nomadic life – Food-collecting people live a nomadic life, moving from place to place when food resources are exhausted, with no permanent settlements.
- Small communities – Such societies are small, sparsely populated, without private land ownership, social classes or formal political organization.
- Division of labour – Work is divided mainly on the basis of age and gender; men usually hunt and fish, while women gather plant foods.
Key Points: Simple transformation economy
- Beginning of food production – Humans started growing crops and domesticating animals about 10,000 years ago.
- Horticulture – Crops are grown with simple tools; includes shifting cultivation and long-growing tree crops, without fertilizers or irrigation.
- Intensive agriculture – Permanent fields are used with ploughs, fertilizers and irrigation; production is mainly for the market.
- High productivity and change – Leads to cities, specialization of work, mechanization and commercialization of agriculture.
- Pastoralism – Some societies depend mainly on rearing animals for milk, wool and other products, often living in dry or grassland regions.
Key Points: Industrial Revolution
- New sources of energy – The invention of the steam engine (1765) marked the beginning of industrialisation and use of new energy sources.
- Shift from home to factory – Production moved from homes to factories, making work centralized and machine-based.
- Transformation of raw materials – People stopped directly collecting from nature and focused on converting raw materials into finished goods.
- Specialisation of work – Division of labour increased productivity but reduced the skill level of individual workers.
- Rise of wage labour – Cottage industries declined and workers became wage labourers working in factories for employers.
Key Points: Early Industrialism
- Early industrialism represented the transition from a simple to a complex transformative economy through innovations in production.
- It was marked by the use of simple machines, division of labour, surplus production, and importance of raw materials.
- Trade and commerce expanded, and the medium of exchange became significant in economic transactions.
- The economy functioned through three systems Feudal, Guild, and Domestic systems each shaping production and labour.
- The decline of the Guild system and rise of the Domestic system led to capitalism and modern industrialism.
Key Points: Modern Industrialism
- Modern industrialism began after the Industrial Revolution of the 18th century, bringing radical economic changes.
- It was characterised by mechanical power, new inventions, capital accumulation, factory system, and improved transport and communication.
- Rapid industrial growth increased production and improved education, life expectancy, and living standards.
- Modern industrialism also caused problems such as wastage of resources, economic crises, concentration of capital, monopoly, and unemployment.
- The system created a gap between workers and owners, making production impersonal and highly complex.
Key Points: Human Conception of Work
- In modern industrial society, labour is no longer viewed only as an economic activity, but also as a human and social activity.
- Workers are motivated not only by wages but also by job security, promotion opportunities, freedom, learning, and recognition.
- Studies show that even low-paid workers value security and advancement more than money alone.
- Work provides social honour, satisfaction, and identity, while unemployment negatively affects human dignity.
- The human conception of work emphasises understanding workers as human beings, not merely production units, as developed by thinkers like Maslow and Herbert Simon.
Key Points: Spread of Property
- Economic changes have transformed worker–owner–consumer relationships in modern industry.
- Property ownership became wider through shares and stocks.
- Even small investors can now own a part of companies, unlike earlier concentration of property.
- Direct ownership has reduced, while indirect ownership operates through banks and life insurance companies.
- Economic control spread beyond a few people.
Key Points: Impact of Industry on Society
- Industrialisation brought major social changes, especially in India.
- Modern education created a new educated middle class and a new labour class.
- Traditional caste-based and agrarian systems weakened due to industrial economy.
- Religion and social life were influenced by foreign rule and missionary activities.
- Industrial policies under British rule caused social unrest and tribal revolts (Hos and Mundas).
Key Points: Class as effect of Industrialisation
- Industrialisation led to the decline of caste-based social system.
- Occupation, education, and wealth became main factors of class status.
- Birth became less important in deciding social prestige.
- In India, birth still matters but economic factors gained priority.
- Thus, the class system entered Indian society.
Key Points: Characteristics of Class
- Class system is based on individual merit and achievement.
- Social mobility is possible through occupation and income.
- Money and occupation determine status and position.
- Traditional customs and taboos lost importance.
- Class system encouraged rational and modern thinking.
Key Points: The New Class
- A new middle and wealthy class emerged after industrialisation.
- It included managers, technicians, businessmen, teachers, and clerks.
- Post-independence industrial expansion multiplied classes.
- Technical education and administration gained importance.
- Western influence changed lifestyle, culture, and occupations.
Key Points: Industry and the Position of Women
- Industrialisation expanded employment opportunities for women.
- Women gained access to education and technical courses.
- Use of domestic appliances reduced household burden.
- Birth control and health awareness empowered women.
- Women achieved better social and economic status.
Key Points: Urbanization and Modernisation
- Industrialisation led to the growth of cities and urban centres.
- Cities became centres of economic and social life.
- Modernisation promotes freedom, choice, and self-confidence.
- Traditional taboos and social restrictions weakened.
- People rely on ability and effort rather than destiny.
Key Points: Economic Organisation
- Madan and Majumdar define economic organisation thus, "it consists of the ordering and organisation of human relations and human effort in order to procure as many of the necessities of day-to-day life as possible with the expenditure of minimum effort."
Key points: Nature of Primitive Economics
- Primitive economies aimed at satisfaction of basic needs, not profit.
- Production was for collective consumption, not for market surplus.
- Work was not measured in money and had no wage system.
- There was no specialisation of labour; division of work was mainly by gender.
- Exchange was based on gift and barter system, and economy was community-centred.
Key Points: Features of Jajmani System
- The Jajmani system has a standardised and well-organised arrangement of economic services, different from employer–employee or master–servant relations.
- The relationship between Jajman and Praja/Kamin is permanent, hereditary and socially secured, continuing from generation to generation.
- The right to Jajmani work is treated as a property right and is passed from father to son or inherited by family members.
- Payment under the system is made in cash or kind, earlier mainly in agricultural produce and later also in cash.
- One Praja may serve more than one Jajman family, ensuring continuous employment and stable social relations.
Key Points: MGNREGA 2005
- Mgnrega guarantees 100 days of wage employment to every rural household willing to do unskilled manual work.
- It aims to provide social protection and livelihood security to the rural poor.
- The Act is rights-based, demand-driven, and people-centred in nature.
- It promotes asset creation, water conservation, and drought/flood management.
- The programme strengthens Panchayati Raj, transparency, and democratic governance.
