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CBSE PRACTICE PAPER 2026–27 · ECONOMICS (SET – 1)
General Instructions
- This question paper contains 34 questions. All questions are compulsory. (Theory : 80 marks; Project : 20 marks is assessed separately.)
- The paper is divided into two sections : Section A – Introductory Macroeconomics (40 marks) and Section B – Indian Economic Development (40 marks).
- Q. 1–10 (Section A) and Q. 18–27 (Section B) are multiple choice questions of 1 mark each. Q. 9, 10 are Assertion–Reason questions.
- Q. 11, 12 (Section A) and Q. 28, 29 (Section B) are short answer questions of 3 marks each. Answer in about 60 words.
- Q. 13–15 (Section A) and Q. 30–32 (Section B) are short answer / case-based questions of 4 marks each. Answer in about 80 words.
- Q. 16, 17 (Section A) and Q. 33, 34 (Section B) are long answer questions of 6 marks each. Answer in about 120 words.
- Internal choice (OR) is provided in some questions. Use of a calculator is not permitted. Show the working in numerical questions.
- The paper follows the CBSE 2025–26 design : typology 40% remembering and understanding, 30% applying, 30% analysing, evaluating and creating. The answer key with the marking scheme is given at the end of this paper.
SECTION A — INTRODUCTORY MACROECONOMICS (40 Marks)
Q. 1 to Q. 8 : Multiple Choice Questions (choose the correct option)
1. In an economy, GDP at market price is ₹ 800 crore, net factor income from abroad is ₹ (−) 20 crore, consumption of fixed capital is ₹ 50 crore and net indirect taxes are ₹ 60 crore. The value of NNP at factor cost is
(a) ₹ 670 crore(b) ₹ 730 crore(c) ₹ 610 crore(d) ₹ 690 crore
2. Which of the following is a qualitative (selective) instrument of credit control used by the Reserve Bank of India?
(a) Repo rate(b) Open market operations(c) Margin requirement(d) Cash reserve ratio
3. Which function of money removes the problem of the double coincidence of wants?
(a) Store of value(b) Medium of exchange(c) Standard of deferred payments(d) Unit of account
4. In an economy, the consumption function is C = 100 + 0.75Y and autonomous investment is ₹ 200 crore. The equilibrium level of income is
(a) ₹ 400 crore(b) ₹ 900 crore(c) ₹ 1,600 crore(d) ₹ 1,200 crore
5. At the income level of ₹ 2,000 crore, planned aggregate demand in an economy is ₹ 1,900 crore. In this situation
(a) unplanned inventories will accumulate and output will tend to fall(b) unplanned inventories will fall and output will tend to rise(c) planned saving equals planned investment(d) the economy is in equilibrium at ₹ 2,000 crore
6. Which of the following is a capital receipt of the government?
(a) Corporation tax(b) Interest receipts(c) Recovery of loans(d) Dividends from public sector undertakings
7. Which of the following is recorded in the current account of the balance of payments?
(a) Foreign direct investment inflow(b) Remittances received from Indians working abroad(c) External commercial borrowings(d) Purchase of foreign bonds by residents
8. An increase in autonomous investment by ₹ 50 crore raises the national income by ₹ 250 crore. The marginal propensity to save is
(a) 0.8(b) 0.25(c) 0.5(d) 0.2
Q. 9 and Q. 10 : Assertion–Reason Questions
Options: (a) Both A and R are true and R is the correct explanation of A. (b) Both A and R are true but R is not the correct explanation of A. (c) A is true but R is false. (d) A is false but R is true.
9. Assertion (A): Reducing the fiscal deficit by cutting capital expenditure improves the quality of fiscal consolidation.
Reason (R): Capital expenditure adds to the productive assets and the future income of the economy.
Reason (R): Capital expenditure adds to the productive assets and the future income of the economy.
10. Assertion (A): Under a fixed exchange rate system, the central bank must be ready to buy or sell foreign currency to maintain the rate.
Reason (R): Under a fixed exchange rate system, the rate is determined by the demand for and supply of foreign exchange in the market.
Reason (R): Under a fixed exchange rate system, the rate is determined by the demand for and supply of foreign exchange in the market.
11. Explain the problem of double counting in the estimation of national income with the help of an example. State any one method of avoiding it.(3)
12. What is meant by involuntary unemployment? Explain why it cannot exist at the level of full employment.(3)
OR
Explain the “paradox of thrift”.
13. Explain any four functions of the Reserve Bank of India.(4)
OR
The legal reserve ratio is 20% and the initial deposit is ₹ 1,000. Explain the process of credit creation by commercial banks with the help of a numerical example.
14. The following data relates to a government budget (₹ crore) : Revenue receipts 80,000; Non-debt capital receipts 10,000; Borrowings 30,000; Revenue expenditure 90,000; Capital expenditure 30,000; Interest payments 12,000. Calculate (i) the revenue deficit, (ii) the fiscal deficit and (iii) the primary deficit. (iv) What part of the borrowings is used to finance consumption expenditure of the government?(4)
15. Read the data and answer the questions.
The balance of payments data of an economy for a year (₹ crore) is as follows :
The balance of payments data of an economy for a year (₹ crore) is as follows :
| Item | ₹ crore |
|---|---|
| Export of goods | 500 |
| Import of goods | 800 |
| Export of services | 450 |
| Import of services | 250 |
| Net primary income from abroad | (−) 150 |
| Net remittances received (secondary income) | 180 |
| Net foreign direct investment | 120 |
| Net portfolio investment | (−) 20 |
| Net external commercial borrowings | 30 |
(i) Calculate the trade balance and the balance on current account. (1)
(ii) Calculate the overall balance of payments (ignoring errors and omissions) and state what happens to the foreign exchange reserves. (1)
(iii) Identify the major source of finance for the current account deficit. (1)
(iv) Is the financing of the deficit sustainable? Give one reason from the data. (1)
(4)16. From the following data (₹ crore) calculate (i) net domestic product at factor cost, (ii) gross national product at market price and (iii) national income :
(6)
| Item | ₹ crore |
|---|---|
| Compensation of employees | 1,500 |
| Operating surplus | 900 |
| Mixed income of self-employed | 600 |
| Indirect taxes | 320 |
| Subsidies | 70 |
| Consumption of fixed capital | 200 |
| Net factor income from abroad | (−) 50 |
OR
From the following data (₹ crore) calculate (i) gross domestic product at market price, (ii) net domestic product at factor cost and (iii) national income : Private final consumption expenditure 3,000; Government final consumption expenditure 800; Gross domestic capital formation 900; Net exports (−) 150; Net indirect taxes 300; Consumption of fixed capital 250; Net factor income from abroad 20.
17. In an economy, autonomous consumption is ₹ 150 crore, the marginal propensity to consume is 0.75 and investment is ₹ 250 crore. (i) Find the equilibrium level of income. (ii) Find the saving at the equilibrium level and verify that saving equals investment. (iii) The government increases investment by ₹ 40 crore to remove deficient demand. Find the new equilibrium income and explain why the rise in income is greater than the rise in investment.(6)
OR
The full employment level of income of an economy is ₹ 2,000 crore, and the equilibrium level of income is ₹ 1,800 crore. The marginal propensity to consume is 0.8. (i) Identify the type of gap and calculate its size. (ii) Suggest one fiscal and one monetary measure to remove the gap. (iii) Show that the equilibrium income reaches the full employment level if the government raises its spending by the amount of the gap.
SECTION B — INDIAN ECONOMIC DEVELOPMENT (40 Marks)
Q. 18 to Q. 27 : Multiple Choice Questions (choose the correct option)
18. The main objective of abolishing the intermediaries (zamindars) after independence was to
(a) increase the size of the land holdings of the zamindars(b) bring the actual tillers into direct contact with the government and give them ownership of land(c) raise revenue through taxes on industry(d) shift the farmers to industrial employment
19. Which of the following is not a component of the New Economic Policy of 1991?
(a) Liberalisation(b) Privatisation(c) Globalisation(d) Nationalisation
20. In a village of 2,000 persons, 440 persons live below the poverty line. The head-count ratio of poverty in the village is
(a) 22%(b) 44%(c) 4.5%(d) 18%
21. Which of the following does not lead to human capital formation?
(a) Expenditure on education(b) Expenditure on health(c) Purchase of a new machine by a firm(d) On-the-job training
22. Which institution is the apex body for agricultural and rural credit in India?
(a) SIDBI(b) NABARD(c) Reserve Bank of India(d) State Bank of India
23. A farm employs 8 workers and produces 1,000 quintals of wheat. The same output can be produced with only 6 workers. The number of workers who are disguisedly unemployed is
(a) 2(b) 6(c) 8(d) 0
24. Sustainable development means development that
(a) maximises the present rate of growth at any cost(b) protects the environment by stopping all industrial activity(c) is based only on the use of non-renewable resources(d) meets the needs of the present without reducing the ability of future generations to meet their needs
25. In India, the share of agriculture in GDP has fallen much faster than its share in employment. This suggests that
(a) agriculture is more productive than industry(b) most of the workers have moved to the industrial sector(c) output per worker in agriculture is lower than in the other sectors(d) agriculture has no role in the economy
26. Statement I : Microfinance through self-help groups reduces the dependence of the poor on informal moneylenders.
Statement II : Self-help groups charge a much higher interest than moneylenders.
Which of the following is correct?
Statement II : Self-help groups charge a much higher interest than moneylenders.
Which of the following is correct?
(a) Only Statement I is correct(b) Only Statement II is correct(c) Both statements are correct(d) Neither statement is correct
27. Which of the following countries adopted the “one-child norm” in 1979?
(a) India(b) China(c) Pakistan(d) Sri Lanka
28. Explain the term casualisation of the workforce. State any two consequences of it for the workers.(3)
29. Explain any three reasons for the rapid economic growth of China after the reforms of 1978.(3)
OR
State any three similarities in the development strategies of India and Pakistan.
30. A domestic firm making washing machines faced competition from cheap imports, and the government imposed a high import tariff on them. Explain how this policy illustrates the strategy of import substitution. State one limitation of the policy in the long run.(4)
31. A family of landless labourers depends on casual farm work for only a part of the year. Explain how the Mahatma Gandhi National Rural Employment Guarantee Act can help the family and state any two limitations of the scheme.(4)
OR
Explain any two ways in which a rise in the female literacy rate can contribute to human capital formation and economic growth.
32. Read the data and answer the questions.
The following table gives illustrative data of three developing countries :
The following table gives illustrative data of three developing countries :
| Indicator | Country A | Country B | Country C |
|---|---|---|---|
| Average annual GDP growth, 2010–20 (%) | 7.0 | 3.8 | 5.6 |
| Share of agriculture in GDP (%) | 7 | 23 | 16 |
| Share of industry in GDP (%) | 40 | 19 | 25 |
| Life expectancy at birth (years) | 77 | 67 | 71 |
| Population below the national poverty line (%) | 1 | 24 | 9 |
(i) Calculate the share of the services sector in the GDP of Country B. (1)
(ii) Which country is at the most advanced stage of structural transformation? Give one reason. (1)
(iii) Country B has the highest share of services among the three countries. Does a high share of services alone guarantee better human development? Support your answer with data. (1)
(iv) Suggest one policy priority for Country B. (1)
(4)33. Explain the three major components of the New Economic Policy of 1991 (liberalisation, privatisation and globalisation), with two features of each.(6)
OR
Explain any three goals of the Five-Year Plans in India and any three reasons for giving a large role to the public sector during 1950–1990.
34. “Sustainable development is not in conflict with economic growth.” Evaluate the statement with any three arguments in its support and discuss one challenge in achieving it.(6)
OR
Examine any three reasons for the slow growth of formal-sector employment in India and suggest any three measures to overcome the problem.
ANSWER KEY & MARKING SCHEME · ECONOMICS PRACTICE PAPER (SET – 1)
Note for evaluators : Award marks for any other relevant and correct point or method. In numerical questions, give full credit for the correct answer with working; award part marks for correct steps even if the final answer is wrong.
SECTION A — Answer Key (Q. 1–10, 1 mark each)
| Q.1 | (a) | Q.2 | (c) | Q.3 | (b) | Q.4 | (d) | Q.5 | (a) |
| Q.6 | (c) | Q.7 | (b) | Q.8 | (d) | Q.9 | (d) | Q.10 | (c) |
Reasoning for Q.1–10. (1) GNPMP = 800 − 20 = 780; NNPMP = 780 − 50 = 730; NNPFC = 730 − 60 = ₹ 670 crore. (2) Margin requirement is a selective (qualitative) tool; repo rate, CRR and open market operations are quantitative. (3) Money as a medium of exchange removes the double coincidence of wants. (4) Y = C + I = 100 + 0.75Y + 200 ⇒ 0.25Y = 300 ⇒ Y = 1,200. (5) AD (1,900) < output (2,000) ⇒ goods remain unsold ⇒ unplanned inventory accumulation ⇒ output falls. (6) Recovery of loans reduces an asset of the government ⇒ capital receipt. (7) Remittances are secondary income in the current account; FDI, ECB and purchase of foreign bonds are in the capital/financial account. (8) Multiplier = 250 ÷ 50 = 5 ⇒ MPS = 1/5 = 0.2. (9) (d) : A is false (cutting capital expenditure lowers the quality of consolidation); R is true. (10) (c) : A is true; R is false – in a fixed exchange rate system the rate is fixed by the government/central bank, not by the market.
SECTION A — Marking Scheme (Q. 11–17)
11.
| Value points | Marks |
|---|---|
| Double counting : counting the value of the same good more than once – once as an intermediate good and again as part of the final good – which overstates the national income | 1 |
| Example : value of wheat sold to a flour mill (₹ 100), flour sold to a bakery (₹ 150) and bread sold to consumers (₹ 220); counting all three gives ₹ 470, whereas the correct value is only ₹ 220 (final good) | 1 |
| Method : count only the final goods and services, or use the value-added method (sum of value added at each stage = 100 + 50 + 70 = 220) | 1 |
12.
OR
| Value points | Marks |
|---|---|
| Involuntary unemployment : a situation in which people are willing and able to work at the existing wage rate but do not find work | 1 |
| At the full employment level, aggregate demand is enough to employ all those willing to work at the ruling wage rate | 1 |
| Only frictional and voluntary unemployment remain; hence involuntary unemployment, which arises from deficiency of aggregate demand, is absent | 1 |
| Value points | Marks |
|---|---|
| Paradox of thrift : if all people try to save more, the total saving of the economy does not rise (it may even fall) | 1 |
| Reason : a higher saving rate reduces consumption and therefore aggregate demand and income | 1 |
| A fall in income reduces the saving of the people, so the final level of saving remains the same (equal to investment) or lower | 1 |
13.
OR
| Value points | Marks |
|---|---|
| Any four functions (1 mark each, name + explanation) : (1) Issue of currency – the sole authority to issue notes; (2) Banker to the government – keeps its accounts and manages public debt; (3) Banker’s bank and lender of last resort; (4) Controller of credit through monetary policy tools; (5) Custodian of foreign exchange reserves; (6) Regulator and supervisor of the banking system | 4 |
| Value points | Marks |
|---|---|
| Money multiplier = 1 ÷ LRR = 1 ÷ 0.20 = 5 | 1 |
| Bank keeps 20% (₹ 200) of the initial deposit ₹ 1,000 as reserve and lends ₹ 800; the loan returns as a fresh deposit, from which the bank keeps ₹ 160 and lends ₹ 640, and so on | 1 |
| Total deposits created = ₹ 1,000 × 5 = ₹ 5,000 | 1 |
| Total credit created = ₹ 5,000 − ₹ 1,000 = ₹ 4,000 | 1 |
14.
(1 mark each for (i), (ii), (iii)) (iv) (1) The revenue deficit of ₹ 10,000 crore is financed by borrowing; hence ₹ 10,000 crore, i.e. one-third (33.3%) of the borrowings, finances consumption (revenue) expenditure.
| Measure | Working | ₹ crore |
|---|---|---|
| Total expenditure | 90,000 + 30,000 | 1,20,000 |
| Total receipts excluding borrowings | 80,000 + 10,000 | 90,000 |
| (i) Revenue deficit | Revenue expenditure − Revenue receipts = 90,000 − 80,000 | 10,000 |
| (ii) Fiscal deficit | Total expenditure − Receipts excluding borrowings = 120,000 − 90,000 | 30,000 |
| (iii) Primary deficit | Fiscal deficit − Interest payments = 30,000 − 12,000 | 18,000 |
15.
(i) 1 mark : trade balance (−) ₹ 300 crore and current account deficit ₹ 70 crore. (ii) 1 mark : surplus of ₹ 60 crore, so the foreign exchange reserves increase by ₹ 60 crore.
(iii) (1) Net foreign direct investment (₹ 120 crore) is the major source. (iv) (1) Yes, it is largely sustainable – FDI is a stable, long-term inflow (₹ 120 crore of the ₹ 130 crore net inflow), unlike volatile portfolio flows, and it exceeds the deficit; also the remittances and services surplus reduce the deficit. (any one reason)
| Item | Working | ₹ crore |
|---|---|---|
| (i) Trade balance | 500 − 800 | (−) 300 |
| Net services | 450 − 250 | (+) 200 |
| Balance on current account | (−) 300 + 200 − 150 + 180 | (−) 70 |
| Capital/financial account | 120 − 20 + 30 | (+) 130 |
| (ii) Overall balance of payments | (−) 70 + 130 | (+) 60 (surplus) |
(iii) (1) Net foreign direct investment (₹ 120 crore) is the major source. (iv) (1) Yes, it is largely sustainable – FDI is a stable, long-term inflow (₹ 120 crore of the ₹ 130 crore net inflow), unlike volatile portfolio flows, and it exceeds the deficit; also the remittances and services surplus reduce the deficit. (any one reason)
16.
(2 marks each for (i), (ii), (iii) : 1 for the method + 1 for the answer)
OR
(2 marks each)
| Step | Working | ₹ crore |
|---|---|---|
| (i) NDP at factor cost | 1,500 + 900 + 600 | 3,000 |
| Net indirect taxes | 320 − 70 | 250 |
| NDP at market price | 3,000 + 250 | 3,250 |
| GDP at market price | 3,250 + 200 | 3,450 |
| (ii) GNP at market price | 3,450 + (−50) | 3,400 |
| (iii) National income (NNP at factor cost) | NDP at FC + NFIA = 3,000 − 50 | 2,950 |
OR
| Step | Working | ₹ crore |
|---|---|---|
| (i) GDP at market price | 3,000 + 800 + 900 + (−150) | 4,550 |
| NDP at market price | 4,550 − 250 | 4,300 |
| (ii) NDP at factor cost | 4,300 − 300 | 4,000 |
| (iii) National income | NDP at FC + NFIA = 4,000 + 20 | 4,020 |
17.
OR
| Value points | Marks |
|---|---|
| (i) At equilibrium Y = C + I ⇒ Y = 150 + 0.75Y + 250 ⇒ 0.25Y = 400 ⇒ Y = ₹ 1,600 crore | 2 |
| (ii) C = 150 + 0.75 × 1,600 = 1,350; Saving = Y − C = 1,600 − 1,350 = ₹ 250 crore = Investment (250) ⇒ S = I verified | 2 |
| (iii) Multiplier = 1 ÷ (1 − 0.75) = 4; ΔY = 40 × 4 = 160; new Y = ₹ 1,760 crore | 1 |
| The rise in income is greater because the extra investment becomes extra income for others, who spend 75% of it again, and so on – the multiplier effect | 1 |
| Value points | Marks |
|---|---|
| (i) Equilibrium income (1,800) < full employment income (2,000) ⇒ deflationary gap (deficient demand). Multiplier = 1 ÷ 0.2 = 5; gap in AD = 200 ÷ 5 = ₹ 40 crore | 2 |
| (ii) Fiscal : raise government spending / cut taxes; Monetary : cut the repo rate and the CRR / buy securities (any one of each) | 2 |
| (iii) Increase in government spending of ₹ 40 crore × multiplier 5 = ₹ 200 crore ⇒ new income = 1,800 + 200 = ₹ 2,000 crore (full employment level) | 2 |
SECTION B — Answer Key (Q. 18–27, 1 mark each)
| Q.18 | (b) | Q.19 | (d) | Q.20 | (a) | Q.21 | (c) | Q.22 | (b) |
| Q.23 | (a) | Q.24 | (d) | Q.25 | (c) | Q.26 | (a) | Q.27 | (b) |
Reasoning for Q.18–27. (18) Abolition of zamindari gave ownership to the tillers and removed the intermediaries. (19) Nationalisation is not a component of the 1991 reforms (LPG). (20) Head-count ratio = 440 ÷ 2,000 × 100 = 22%. (21) Buying a machine is physical capital formation. (22) NABARD is the apex institution for agriculture and rural credit. (23) 8 − 6 = 2 workers are disguisedly unemployed. (24) Sustainable development meets present needs without compromising the needs of future generations. (25) Agriculture employs a much larger share of workers than its share in GDP, so output per worker is lower. (26) SHGs offer cheaper credit than moneylenders ⇒ only Statement I is correct. (27) China adopted the one-child norm in 1979.
SECTION B — Marking Scheme (Q. 28–34)
28.
| Value points | Marks |
|---|---|
| Casualisation of the workforce : a shift from regular/permanent employment to casual (temporary, contract or daily-wage) employment with no social security | 1 |
| Consequences (any two, ½ + ½ each) : no job security; no pension, health or other benefits; lower and irregular wages; weaker bargaining power of workers | 2 |
29.
OR
| Value points | Marks |
|---|---|
| Any three reasons (1 mark each) : (1) The one-child norm and effective population control; (2) Land reforms and the commune system, which raised agricultural productivity; (3) Setting up of Special Economic Zones and openness to foreign investment and trade after 1978; (4) Rural industrialisation through township and village enterprises; (5) Heavy investment in education and health in the earlier period | 3 |
| Value points | Marks |
|---|---|
| Any three similarities (1 mark each) : (1) Both adopted the mixed economy framework; (2) Both followed five-year plans and a large role for the public sector; (3) Both pursued import substitution and protection of industry in the early decades; (4) Both began economic reforms (liberalisation) in the 1980s–1990s | 3 |
30.
| Value points | Marks |
|---|---|
| Import substitution means replacing imports by domestic production, by protecting domestic industries from foreign competition | 1 |
| The high tariff makes imported washing machines costlier, so the domestic firm can sell its products at a competitive price and expand output (protection of an infant industry) | 2 |
| Limitation (any one) : lack of competition leads to poor quality and high cost of domestic goods; inefficiency; consumers get less variety; rise in the fiscal burden of protection | 1 |
31.
OR
| Value points | Marks |
|---|---|
| MGNREGA gives a legal guarantee of 100 days of wage employment per year to every rural household that demands it, so the family gets income in the lean season | 1 |
| It gives the family a minimum wage, helps to reduce distress migration and creates rural assets (roads, tanks, etc.) | 1 |
| Limitations (any two, ½ each) : corruption and delay in wages; low wages and delay in payment; the work is often of poor quality; fewer than 100 days are actually provided; dependence on government funds | 2 |
| Value points | Marks |
|---|---|
| Any two ways (2 marks each, point + explanation) : (1) Educated women have better access to higher-skill jobs, raising the labour productivity; (2) They have fewer and healthier children, with better education of the next generation; (3) Higher female participation raises household income and the size of the effective workforce | 4 |
32.
| Value points | Marks |
|---|---|
| (i) Services share = 100 − (23 + 19) = 58% | 1 |
| (ii) Country A – it has the lowest share of agriculture (7%) and the highest share of industry (40%) in GDP | 1 |
| (iii) No – Country B has the highest share of services (58%) but its life expectancy (67 years) is the lowest and 24% of its people are still poor; Country A has a lower services share (53%) but better human development | 1 |
| (iv) Any one : raise public spending on health and education; promote employment in industry/manufacturing; reduce poverty through targeted schemes and agriculture reforms | 1 |
33.
OR
| Value points | Marks |
|---|---|
| Liberalisation (2) : abolition of industrial licensing for most products; freedom to expand production; removal of restrictions on imports (quotas) and reduction of tariffs; reform of the financial and tax systems (any two features) | 2 |
| Privatisation (2) : transfer of ownership/management from the public to the private sector; disinvestment of shares of PSUs; sale of loss-making units; reduces the government’s burden (any two features) | 2 |
| Globalisation (2) : integration of the economy with the world economy; outsourcing (BPO/KPO); free flow of goods, capital and technology; reduction of trade barriers and a rise in foreign investment (any two features) | 2 |
| Value points | Marks |
|---|---|
| Goals of planning (any three, 1 mark each) : growth; modernisation; self-reliance; equity | 3 |
| Reasons for a large public sector (any three, 1 mark each) : private sector lacked capital and the willingness to invest in heavy industry; the market was too small to induce investment; the government needed to control the commanding heights; reduction of regional inequalities; employment generation | 3 |
34.
OR
| Value points | Marks |
|---|---|
| Any three arguments (1½ marks each = 4½) : (1) Renewable energy and clean technology can raise output without damaging the environment; (2) Protecting natural capital (soil, water, forests) sustains long-term productivity of agriculture and industry; (3) Resource efficiency lowers costs and waste; (4) Environmental protection raises health and human capital, improving productivity; (5) Creates new green jobs | 4½ |
| One challenge (1½) : high initial cost of green technology; need for large investment; conflict between short-term growth and long-term goals; poor enforcement of the environmental laws; poverty and population pressure | 1½ |
| Value points | Marks |
|---|---|
| Any three reasons (1 mark each) : (1) Slow growth of manufacturing; (2) Capital-intensive techniques adopted; (3) Shortage of skills and a mismatch between education and jobs; (4) Rigid labour laws and high compliance cost for small firms; (5) Poor infrastructure; (6) Informalisation of employment | 3 |
| Any three measures (1 mark each) : promote labour-intensive manufacturing and MSMEs; skill development; improve infrastructure; reform the regulations; encourage entrepreneurship and start-ups | 3 |
DESIGN OF THE PAPER — Unit-wise Weightage and Typology (as per CBSE 2025–26)
| Part / Unit | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Part A – National Income and Related Aggregates | 10 | 10 | Q.1, 11, 16 |
| Money and Banking | 6 | 6 | Q.2, 3, 13 |
| Determination of Income and Employment | 12 | 12 | Q.4, 5, 8, 12, 17 |
| Government Budget and the Economy | 6 | 6 | Q.6, 9, 14 |
| Balance of Payments | 6 | 6 | Q.7, 10, 15 |
| Total – Part A | 40 | 40 | |
| Part B – Development Experience (1947–90) and Economic Reforms since 1991 | 12 | 12 | Q.18, 19, 30, 33 |
| Current Challenges facing Indian Economy | 20 | 20 | Q.20–26, 28, 31, 34 |
| Development Experience of India – A Comparison with Neighbours | 8 | 8 | Q.27, 29, 32 |
| Total – Part B | 40 | 40 | |
| Grand total | 80 | 80 |
| Typology of questions | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Remembering and Understanding | 32 (40%) | 32 | Q.2, 3, 6, 7, 11, 12, 13, 18, 19, 21, 22, 24, 27, 28, 29, 33 |
| Applying | 24 (30%) | 24 | Q.1, 4, 5, 8, 14, 16, 20, 23, 30, 31 |
| Analysing, Evaluating and Creating | 24 (30%) | 24 | Q.9, 10, 15, 17, 25, 26, 32, 34 |
| Total | 80 (100%) | 80 |
