KSLU Solved Question Papers
Economics II (Hons)
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 3
2022 Apr Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 3 Economics II (Hons) 2022 Apr Question Paper with Solutions
First published on munotes.in on 2 November 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2022 Apr examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2022 Apr examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2022 Apr examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 2½ hours · Total marks 70 · 12 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1Define economic growth. Discuss the factors determining economic growth in India.[10]
Answer
For full marks, cover: a definition of economic growth (a sustained rise in real output, real GDP or real income per head; quantitative; how it differs from development); India's recent growth (real GDP 7.4 per cent in 2025-26, First Advance Estimates); the factors that determine growth in India: capital formation (30.0 per cent of GDP), the labour force and the demographic dividend (nearly 65 per cent aged 15 to 59 around 2030), human capital, technology, natural resources and agriculture, infrastructure, the financial system and saving, entrepreneurship and MSMEs, economic policy and reforms (1991, GST), external demand (21.6 per cent of GDP), and political stability; a conclusion.
Definition of economic growth
Economic growth is a sustained increase in a country's real output of goods and services. It is usually measured by the annual rise in real gross domestic product (GDP) or in real income per head. Growth is quantitative and can be stated as one number. It differs from economic development, which also includes structural change and better living conditions. Growth is necessary for development but not enough for it.
India has grown fast. The First Advance Estimates place real GDP growth in 2025-26 at 7.4 per cent. The Economic Survey 2025-26 calls India the fastest growing major economy for the fourth year running.
Factors determining economic growth in India
1. Capital formation. Output grows when there are more machines, buildings, roads and power plants. This depends on saving and investment. India's gross fixed capital formation is about 30.0 per cent of GDP in FY26, which has financed its high growth.
2. The labour force and the demographic dividend. A growing number of working-age people can raise output if they find jobs. The Economic Survey expects the demographic dividend to peak around 2030, when nearly 65 per cent of the population will be aged 15 to 59. In July to September 2025, 56.2 crore people aged 15 and above were employed.
3. Human capital. Education, skills and health make each worker more productive. Literacy rose from 18.3 per cent in 1951 to 73.0 per cent in 2011. Better skills are still needed to turn the dividend into output.
4. Technology. New methods raise output from the same inputs. In India, information technology, digital payments and improved seeds have each lifted productivity in their sectors. Technology also stops the return on new capital from falling as the stock of capital grows.
5. Natural resources and agriculture. Land, water and minerals support farming and industry. Agriculture still employs about 42.4 per cent of workers, so its productivity matters for the whole economy.
6. Infrastructure. Power, roads, railways, ports and telecommunication cut costs for every producer. Their lack has held back Indian manufacturing.
7. The financial system. Banks and capital markets collect saving and lend it to producers. Reforms after 1991 turned finance from rationing into allocation.
8. Entrepreneurship and MSMEs. Entrepreneurs combine resources and take risks. Micro, small and medium enterprises produce 31.1 per cent of GDP and employ the second largest number of workers after agriculture.
9. Economic policy and reforms. The licence system before 1991 held industry back. The reforms of 1991, which ended most industrial licensing and opened the economy to foreign investment, raised the growth rate. The goods and services tax of 2017 created a common national market.
10. External demand. Exports widen the market, and imports bring machines and technology. External demand is about 21.6 per cent of GDP in FY26.
11. Political stability and institutions. Stable government, the rule of law and steady policy give investors confidence to commit capital for many years.
| Factor | Indian evidence |
|---|---|
| Capital | Fixed investment about 30 per cent of GDP |
| Labour | Working-age share near 65 per cent around 2030 |
| Human capital | Literacy 73.0 per cent (2011) |
| Policy | Reforms of 1991; GST from 2017 |
| External demand | About 21.6 per cent of GDP |
How the factors work together
Some factors raise the quantity of inputs: capital, labour and land. Others raise the efficiency with which inputs are used: technology, skills, infrastructure and good policy. Lasting growth needs both kinds.
No factor works alone. Capital needs skilled workers, workers need jobs, and both need power, roads and good policy. India's high growth since 1991 came from more investment, reforms and technology acting together. Its weaker points, few manufacturing jobs and many workers on small farms, show where the factors have not yet combined.
Conclusion. Economic growth is a sustained rise in real output, measured by real GDP or real income per head. In India it is determined by capital formation, the labour force and its demographic dividend, human capital, technology, natural resources, infrastructure and the financial system. Entrepreneurship, economic policy, external demand and political stability also play their part. With investment near 30 per cent of GDP and a young workforce, India has the means for fast growth. Skills, jobs and infrastructure must keep pace.
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