Q.(a) Explain the main economic ideas of B.R. Ambedkar.

(a) Ambedkar contributed ideas on public finance, the rupee and exchange, agricultural economics, labour welfare and state socialism. (b) Ricardo's theory explains rent as a surplus arising from differences in the fertility (and location) of land, measured against the no-rent marginal land.

(a) Main economic ideas of Dr. B.R. Ambedkar (in the Tamil Nadu HSC Class-11 Economics syllabus):

• Public finance: in his work on the provincial and central finances of British India, he analysed the principles of taxation, public expenditure and the sharing of finances between the centre and provinces.
• Problem of the rupee (currency and exchange): in The Problem of the Rupee — Its Origin and Its Solution, he studied India's currency and exchange system and argued for a stable currency; his ideas influenced the setting up of the Reserve Bank of India (1935).
• Agricultural economics: he highlighted the evils of small and fragmented land holdings, favoured consolidation of holdings, and argued that industrialisation was necessary to draw surplus labour out of agriculture.
• Labour welfare: as a member of the Viceroy's Council he worked for labour rights — reduced working hours, minimum wages, employment exchanges and social security for workers.
• State socialism / role of the state: he advocated state ownership of key industries, insurance and land, and a strong role for the state in planned economic development and in ensuring social and economic justice.
• Water and power policy: he stressed the planned development of river valleys and electric power, and was associated with founding institutions for water and power planning.

(b) Ricardian Theory of Rent:

• Meaning: David Ricardo defined rent as "that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil."
• Basis — differential fertility: land differs in fertility and situation. When population grows, cultivation extends from the most fertile land (Grade A) to less fertile lands (Grade B, C …). Superior lands yield more produce at the same cost, and this surplus over the marginal (least fertile) land is rent. …