The Story Of Village Palampur - Class 9 Economics - Extra Questions

1. Labour is one of the factors of production which is an important part of the production process.
2. Labour provide their services which help in transforming inputs into outputs.
3. They work to produce goods. In return they earn wages and salaries for these services.  

Capital is the money or resources that are used to start a business with. Capital is the resource that can be money in the form of cash or kind which is used to further purchase raw materials and inputs.
It is an extremely important part as every business needs some amount of capital in the beginning. 

 An entrepreneur is a person whose motive is to gain profitability by taking financial risk during setting up a business, where he managed himself or being managed by other. He is the main factor of production.

The different types of capital are:

Natural capital: these are the natural resources used in the production process.

Human capital: it is the people knowledge skills that help in the process.

Social capital: it is the group that helps in the maintenance of human capital like families.

Financial capital: it is the money that helps to purchase raw materials. 

Factors of production is meant by anything which helps in the process of production.

The productive mechanism is the mechanism in which the goods and services are produced in the most effective and efficient manner so that more output can be obtained using fewer resources.
When productivity increases, the income of people increase, the standard of living of people increase and the society progresses.
The more the productivity, the more the output and the more the progress. 

Savita, a small farmer, in order to cultivate wheat on her 1 hectare of land, decides to borrow money from Tejpal Singh a large farmer on the following terms:

• (i) Tejpal Singh agrees to give Savita the loan at an interest rate of 24 percent for four months which is a very high-interest rate. Savita also has to promise to work in his field as a farm labourer during the harvest season at Rs. 35 per day.  
  
• (ii) The rate of interest charged by Tejpal Singh was higher than that of banks. If Savita had taken the loan from the bank, interest would have been lower and she could have easily repaid the loan and her condition would have been far better.
  

The functions of factor inputs are:

LAND: land is used in the production process as it provides space to conduct business.

LABOUR: it provides their factor services and help in converting input into output.

CAPITAL: It provides the money to purchase the raw material for the business.

ENTREPRENEURSHIP: entrepreneur conducts the business and manufacture the goods and services. 

Factors of production are the inputs that are used to produce goods and services that are demanded in an economy. These are:

1.Land: These are the natural resources that are used in the production. As any business will need a place to operate on.

2.Labour: It is the contribution that is made by humans in the business. They are paid wages or salaries for their inputs.  

3.Capital: It is the money needed to start the business. This money is used to purchase the raw material for the production process.

4.Entrepreneurship:  Entrepreneur who starts the business, organize all the above factors and help in the production process by his skills and risk-taking ability. 

(i) Dairy is a common activity in many families of our region.  

(ii) Some people are involved in small scale manufacturing in their homes or in the field like production of jaggery by Mishrilal.  

(iii) A few people are involved as shopkeepers and traders who buy various goods from the wholesale market in the cities and sell them in the villages.  

(iv) Some people near the bus stand have opened shops selling eatables.  

(v) Some people are in the transportation sector ferrying people and carrying goods from one place to another in different types of vehicles.  

(vi) People like Kareem opened a computer class centre and also provided employment to two women who had a diploma in computer application.  

Distribution of land among the 450 families of Palampur.

Families with no land (mainly dalits):  Families with less than 2 hectares: Families with more than 2 hectares:	150 Families  240 Families  060 Families
Total	450 Families

Production means to make goods or provide services for the people. People require goods for their survival. So the entrepreneur makes use of land, labour, and capital to produce goods which the people need and want. The goods are produced according to the income of the people. The rent is paid on the land and wages is paid to the labour for contributing to the production process. 

The non-farm activities of Palampur are dairy, small scale manufacturing and transport. Nearly 25% of the people engaged in non-farm activities. 

Non-farm activities are as follows:

• Dairy is the main non-farming activity of the people of Palampur. People have domesticated cows and buffaloes. The milk is sold to the people of Raiganj.
• Some people are also engaged in small manufacturing units like spinning, weaving, leather making etc. Labourers are generally not hired for small manufacturing units.
• Many shopkeepers have set up their own shops selling stationery items, toothpaste, candles etc. in the village. They buy various goods from the wholesalers in the towns.
• Many people of the village of Palampur are also engaged in driving tractors, jeeps, bullock carts, rickshaws and trucks. They mostly transport goods from one place to another.

An all weather road connects Palampur to neighbouring villages and towns such as Raiganj (village) and Shahpur (town). 

Dairy, small manufacturing, transport, shopkeeping etc. are the non-farm activities carried out in Palampur.

Goods and services produced are sold in the markets.

Farming is the main activity, whereas several other activities such as small scale manufacturing, dairy, transport, etc. are carried out on a limited scale.

People working in activities other than agriculture are called non-farming activities.
Two types of non-farming activities are as:
(i) Dairy: People feed their buffaloes and then sell their milk in nearby villages.
(ii) Transport: Many vehicles like rickshaw, jeep, trucks, ferry etc., by which people and goods are transported from one place to another.

Non-Farm Activities in Palampur

25 per cent of the people working in Palampur are engaged in activities other than agriculture.

1. Dairy activity

Other than agriculture, some people are engaged in dairy and the milk is sold in the nearby village.

2. An example of small-scale manufacturing in Palampur

People are engaged in small-scale manufacturing which are carried out at home or in the fields. This manufacturing involves very simple production methods.

3. The shopkeepers of Palampur

Traders of Palampur buy various goods from wholesale markets in the cities and sell them in the village. General stores in the village sell a wide range of items like rice, wheat, sugar, tea, oil, biscuits, soap, toothpaste, batteries, candles, notebooks, pen, pencil, even some cloth.

4. Transport: a fast developing sector

Transport services include rickshaws, tonga, jeep, tractor, truck drivers, traditional bullock cart and bogey. They transport people and goods from one place to another, and in return get paid for it.

(i) Banks should provide loans at low interest rates so that the poor villagers can start some business to help them earn a living.  

(ii) Government should be more active and start effective employment generating schemes.  

(iii) Government should provide training to the villagers in different small crafts.  

(iv) Government should provide facilities for transportation and selling of locally manufactured goods of the villagers in the cities.

 (v) Industries can be set up in rural areas.  

The ISI is an initialism of Indian Standards Institution, the name of the national standards body until 1 January 1987, when it was renamed to the Bureau of Indian Standards.

Labour and Entrepreneur are two active factors of production. Land and capital can be used only when labour is employed on them.
No doubt, all factors are important in production because production results from cooperation among all the productive resources, yet labour is regarded as the single most important factor of production. 

Factors of production are the inputs that are used to produce goods and services that are demanded in an economy. These are:

• 1. Land: These are the natural resources that are used in the production. As any business will need a place to operate on.
  
• 2. Labour: It is the contribution that is made by humans in the business. They are paid wages or salaries for their inputs.  
  
• 3. Capital: It is the money needed to start the business. This money is used to purchase the raw material for the production process.
  
• 4. Entrepreneurship:  Entrepreneur who starts the business, organize all the above factors and help in the production process by his skills and risk-taking ability.
  

Given: Autonomous Consumption $$\bar{c}$$= Rs. 60 crores: MPC or b = 0.6. 
To make the diagram, let us first calculate consumption expenditure corresponding to different income levels. 

Income (Y) (Rs. Crores)	Consumption(C) (Rs. Crores) $$C=\bar{c} +b(Y)$$
0	$$60=60+(0.6 \times 0)$$
100	$$120=60+(0.6 \times 100)$$
200	$$180=60+(0.6 \times 200)$$
300	$$240=60+(0.6 \times 300)$$
400	$$300=60+(0.6 \times 400)$$

Features:
(i) Small scale manufacturing in Palampur involved production on a small scale by using simple methods. For example, use of sugarcane crushing machines to procure jaggery in the field itself.
(ii) The production work was mostly carried out by family members themselves unlike big manufacturing outlets in towns where labourers are hired in huge number.
(iii) Very few people in the village were involved in this sector and because of small scale production, profit earned was also less.

To encourage non-farm activities in villages, some measures can be taken, which are as follows:
(i) Banks should provide loans at low interest rates so that the poor villagers can start some business to help them earn a living.
(ii) Government should be more active and start effective employment generating schemes. Government should provide training to the villagers in different small crafts.
(iii) Government should provide facilities for transportation and selling of locally manufactured goods in the cities and industries can be set-up in rural areas.