2. How is human capital in a way superior to other resources like land and physical capital? 3. What do you mean by capital? 4. Explain the four factors of production with examples. 5. What are the ways to increase production on agriculture fields? 6. What are the various types of crops grown in village Palampur? 7. Define: a) Physical capital b) Working capital
Answers
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur
1
Chapter
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in We
- 2. Human capital is superior to other resources like land and physical capital because human resources can make better use of land and physical capital but land and physical capital cannot become useful on its own. Several years of education adds to the quality of labour. This enhances their all over productivity.
- 3. Capital includes all goods that are made or created by humans and used for producing goods or services.
- 4. Land, Labor, capital, and entrepreneurship.
- 5. Multiple cropping and the use of modern farming methods are the two common ways of increasing production on the same piece of land.
- 6. The kharif crops arejawar and bajara and rabi crops are wheat and sugarcane. Potatoes are grown in between these two seasons
- 7.a) Physical capital consists of man-made goods that assist in the production process.
- b) Working capital is a financial metric which represents operating liquidity available to a business, organization, or other entity, including governmental entities.