NDA ECONOMICS NOTES

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

NDA ECONOMICS NOTES

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Economy is a framework that deals with four major decisions, viz. investment, production, consumption and expenditure. Economics was defined by Adam Smith, “the father of economics, as, the science relating to the laws of production, distribution and exchange.”

Economics consists of two main branches micro-economics and macro-economics. The former deals with the forces of demand and supply, market types, labour supply and demand on a ceterus paribus approach. The later is concerned with aggregates of economy like employment, aggregate output and income, inflation etc.

Characteristics of Indian Economy

Main characteristics of Indian Economy are

• Agrarian Economy In an Agrarian economy, agriculture dominates in both the Gross National Product (GNP) and employment. More than half of India’s working population is engaged in agriculture.

• Mixed Economy It is an economy, where both public and private sector co-exist. The nature of Indian economy is a mixed economy. The term was coined by JM Keynes. India opted for ‘Mixed Economy’ in the industrial policy of 1948.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

BROAD SECTORS OF INDIAN ECONOMY

Primary Sector Agriculture, fishing.

Secondary Sector Mining, manufacturing, electricity gas and water supply, construction.

Tertiary Sector  (also called service sector) Business, telecommunication, banking, insurance, real estate, community and personnel services.

• Developing Economy Following features shows that “Indian economy is a developing economy

(i) Low per capita income.

(ii) Occupational pattern is biased towards primary sector.

(iii) Heavy population pressure.

(iv) Prevalence of chronic unemployment and under employment.

(v) Steadily improving rate of capital formation.

(vi) Low capital per head.

(vii) Unequal distribution of wealth/assets.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

HISTORY OF PLANNING IN INDIA

• First attempt to initiate economic planning in India was made by Sir M Vishveshvarayya, a noted engineer and politician, in 1934 through his book ‘Planned Economy for India’.

• In 1938. National Planning Commission’ was set-up under the chairmanship of Jawahar Lal Nehru by the Indian National Congress. Its recommendations could not be implemented because of the beginning of the World War II and changes in the Indian political situation.

• In 1944, ‘Bombay Plan’ was presented by 8 leading industrialists of Bombay. It was drafted by GD Birla and JRD Tata.

• In 1944, ‘Gandhian Plan’ was given by Sarojini Naidu Agarwal.

• In 1945, ‘People’s Plan’ was given by MN Roy.

• In 1950, ‘Sarvodaya Plan’ was given by JP Narayan. A few points of this plan were accepted by the government.

THE PLANNING COMMISSION.

• The Planning Commission was set-up on 15th March 1950 under the chairmanship of  Jawahar lal Nehru, by a resolution of Union Cabinet .

• It is an extra-constitutional and non-statutory body.

• It consists of Prime Minister as the ex-officio Chairman, one Deputy Chairman appointed by the Prime Minister and some full time members.

• The tenure of its members and Deputy Chairman is not fixed. They are appointed by the government on its own discretion. The number of members can also change according to the wishes of the government.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Functions

• Assessment of material, capital and human resources of the country.

• Formulation of plans for the most effective and balanced utilisation of country’s resources.

• To determine the various stages of planning and to propose the allocation of resources on the priority basis. To act as an advisory body to the Union Government

• To evaluate from time-to-time the progress achieved in every stage of the plan and also to suggest remedial measures.

• To advise the Centre and the State Governments from time-to-time on special matters referred to the commission.

• Planning in India drew on Economic plane of lenin.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

NATIONAL DEVELOPMENT COUNCIL

• All the plans made by the Planning Commission have to be approved by National Development Council (NDC) first. It was constituted to build co-operation between the states and the Planning Commission for economic planning.

• It is an extra-constitutional and extra-legal body

• It was set-up on 6th August 1952 by a proposal of the government, the PM is the ex-officio chairman of NDC. Other members. are Union Cabinet Ministers, Chief Ministers and Finance Ministers of all states, Lt Governors of Union Territories and Governors of Centrally-ruled States.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

FIVE YEAR PLANS

First Five Year Plan (1951-56)

• It was based on Harrod-Domar Model.

• Community Development Programme was launched in 1952. Two-fold objectives were there.

• Its objective was to correct the disequilibrium in the economy caused by 3 main problems

(i). influx of refugees,

(ii), severe food shortage

(iii). mounting inflation.

• Targeted growth rate was 2.1% and achieved rate was 3.6%. .

•  Only plan to see prices declining. .

• To initiate a process of all-round balanced development to ensure a rising national income and a steady improvement in living standards.

• Emphasised on agriculture, price stability, power and transport.

• It was more than a success, because of good harvests in the last two years.

Second Five Year Plan (1956-61)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Achieved 4.1% as against a targeted growth rate of 4.5 %.

• Durgapur, Bhilai and Rourkela steel plants were founded.

• Also called as Mahalanobis Plan after its chief architect PC Mahalanobis.

• Its emphasis was on economic stability. Agriculture target fixed in the first plan was almost achieved.   Consequently, the agriculture sector got low priority in the second-five year plan.

• Its objective was Rapid Industrilisation, particularly basic and heavy industries such as iron and steel, heavy chemicals like nitrogenous fertilizers, heavy engineering and machine building industry.

• Besides, the Industrial Policy of 1956 emphasized the role of Public Sector and accepted the establishment of a socialistic pattern of the society as the goal of economic policy.

• Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.

Third Five Year Plan (1961-66)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

•Targeted growth rate (5.6 %) could not be achieved as GDP grew by 2.8% only.

• Third Five Year plan is also called Gadgil Yojana.

• At its conception time, it was felt that Indian economy has entered a take-off stage. Therefore, its aim was to make India a “self-reliant’ and self-generating’ economy.

 • Also, it was realised from the experience of first two plans that agriculture should be given the top priority to suffix the requirements of export and industry.

• The other objectives of the plan included the expansion of basic industries, optimum utilization of country’s labour power and reducing the inequalities of income and wealth.

• Relied heavily on foreign aid (IMF).

• Complete failure due to unforeseen misfortunes, viz. Chinese aggression (1962). Indo-Pak War (1965), severest drought (1965-66).

• Prices increased by 36% in five years.

• Hence, third plan failed in every respect.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Third Annual Plans (1966-69)

• Plan holiday for 3 years.

• The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans

• During these plans a whole new agricultural strategy involving wide-spread distribution of High-Yielding Varieties (HYVS) of seeds, the extensive use of fertilisers, exploitation of irrigation potential and soil conservation was put into action to tide-over the crisis in agricultural production

• During the Annual Plans, the economy basically absorbed i the shocks given during the Third Plan, making way for a planned growth

Fourth Five Year Plan (1969-74)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• The fourth plan set before the two principal objectives-growths with stability and progress towards self-reliance

• Main emphasis an agricultural growth rate targeted 5.6 % but achieved 3.3 % growth rate only.

• Fared well in the first two years with record production, last three years failure because of poor monsoon.

• Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo-Pak War

•  During the planning period, prices increased by about 61%

• Nationalisation of 14 Banks and the Green Revolution began.

Fifth Five Year Plan (1974-79)

• It targeted a growth rate of 4.4% but achieved a growth rate of 4.8 %.

• Original approach (by subramanium) proposed complementing economic growth with direct attack on poverty.

• But it was replaced later with objectives of removal of poverty and getting self-reliance (by DP Dhar).

• The Fifth Plan prepared and launched by DD Dhar. He proposed to achieve two main objectives viz, ‘Removal of Poverty (Garibi Hatao) and Attainment of Self-reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• National programme of minimum needs was initiated in which primary education, drinking water, medical facilities in rural areas, nourishing food, land for the houses of landless labourers, rural roads, electrification of the villages and cleanliness of the dirty suburbs were included.

• The plan was terminated in 1978 (instead of 1979) when Janta Government came to power.

Rolling Plan (1978-80)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• The concept of rolling plan was given by Gunnar Myrdall.

• It meant that expenditures budgeted but unspent at the end of year would be carried over to the next year.

• There were 2 sixth-five Plans-one by Janta Government (for 78-83) which was in operation for 2 years only and the other by the Congress Government when it returned to power in 1980.

• The Janta Government Plan is also called Rolling Plan.

•  The focus of the plan was enlargement of the employment potential in agriculture and allied activities, encouragement to household and small industries producing consumer goods for consumption and to raise the incomes of the lowest income classes through minimum needs programme.

Sixth Five Year Plan (1980-85)

• Sixth Five Plan targeted 5.2% but achieved a growth rate of 5.7%

• First plan with signs of starting of economic liberalisation. Basic objective was removal of poverty through direct action

• Integrated Rural Development Programme (IRDP). Minimum Needs Programme (MNP) were started.

• Objectives Include Increase in National income, modernisation of technology, ensuring continuous decrease in poverty and unemployment, population control through family planning, etc.

Seventh Five Year Plan (1985-90)

• The Seventh Plan emphasized policies and programmes, which aimed at rapid growth in food-grains production. increased employment opportunities and productivity within the framework of basic tenants of planning.

• It was a great success, the economy recorded 6% growth rate against the targeted 5%. Indian economy finally broke the Hindu growth rate barrier.

Due to severe economic crisis, eighth-five year plan was delayed by two years. The intervening years (1990-91 and 1991-92) were declared Annual Plans.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Eighth Five Year Plan (1992-97)

• First Five Year Plan based on Rao and Manmohan mode of economic growth.

• Sought to gradually open the Indian economy through LPG Liberalisation, privatisation and Globalisation measures.

• Some of the main economic performances during Eighth Plan period were rapid economic growth, high growth of agriculture and allied sector and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.

• The most notable feature of the Eighth Plan period was that the GDP grew at an average rate of 6.8% exceeding the target growth rate of 5.6 %

Ninth Five Year Plan (1997-2002)

•  Growth rate of GDP during the plan was 5.4% per annum as against the target of 6.5%

• Agriculture grew by 2.1% as against the target of annum. 4.2% per annum.

• Industrial growth was 4.5% as against the target of 3% per annum.

• Exports grew by 7.4\% (target was 14.55\%) and imports grew by 6.6% (target was 12.2% per annum.).

• Services grew at the rate of 7.8% per annum.

Tenth Five Year Plan (2002-2007)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Objectives

(i) To attain a growth rate of 8%

(ii) Reduction of poverty ratio to 20% by 2007 and to 10% by 2012.

• Providing gainful high quality employment to the addition to the labour force over the Tenth Plan period.

• Universal access to primary education by 2007.

• Reduction in gender gaps in literacy and wage rates by atleast 50% by 2007.

• Reduction in decadal rate of population growth between 2001 and 2011 to 16.2 %.

• Increase in literacy rate to 72% within the plan period and to 80% by 2012

 • Reduction of Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012.

 • Reduction of Maternal Mortality Rate (MMR) to 20 per 1000 live births by 2007 and to 10 by 2012

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

 • Increase in forest and tree cover to 25% by 2007 and 33% by 2012.

 • All villages to have sustained access to potable drinking water by 2012.

 • Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.

 • The tenth plan focused on ways and means of correcting the regional imbalance.

 • The plan laid great emphasis on agriculture since growth in this sector is likely to lead to the widest dissemination of benefits, especially to the rural poor including agricultural labour.

• The growth strategy of the Tenth Plan sought to ensure the rapid growth of those sectors which are most likely to create high quality employment opportunities, which included such sectors as construction, real estate and housing, transport, small scale industries, modern retailing, entertainment, IT-enabled services, etc.

• The tenth-five year plan achieved a growth rate of 7.6% below the targeted 8% but higher than all Previous Five Year Plans.

 Eleventh Five Year Plan (2007-2012)

Monitorable Socio-Economic Targets of the Eleventh Plan

Income and Poverty

• Accelerate growth rate of GDP from 8% to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by 2016-17.

•  Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits.

• Create 70 million new work opportunities.

• Reduce educated unemployment to below 5%.

• Raise real wage rate of unskilled workers by 20%.

• Reduce the headcount ratio of consumption poverty by 10% points.

Education

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12. • Increase literacy rate for persons of age 7 years or more to 85%.

• Lower gender gap in literacy to 10% points.

• Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the Eleventh Plan.

Health

• Reduce Infant Mortality Rate (IMR) to 28 and Maternal Mortality Ratio (MMR) to I per 1000 live births.

• Reduce total fertility rate to 2.1.

• Reduce malnutrition among children of age group 0-3 to half its present level.

• Reduce aneamia among women and girls by 50% by the end of the Eleventh Plan.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Women and Children

• Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17.

• Ensure that at least 33% of the direct and indirect beneficiaries of all government schemes are women and girl children.

Infrastructure

• Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power by the end of the plan.

• Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015.

• Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17.

Twelfth Five Year Plan (2012-17)

• The approach paper to the plan is based on the theme “faster, sustainable and more inclusive growth,”

• The paper indicates 14 key areas to be focussed by the twelfth-five year plan. Some of these are energy transport, natural resources, rural transformation, health, transport, education and skill development.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Key Targets

(i) Real GDP growth rate-8 % (down from earlier 8.2%).

(ii) Agricultural growth rate-4%.

(iii) Manufacturing Growth rate-10%.

(iv) Consumption poverty-to be reduced by 10 % points.

(v) Employment-50 million new work opportunities in the non-farm sector,

(vi) Mean years of schooling-Increase it to 7 years by 2017.

(vii) Infant Mortality Rate (IMR)- Reduce to 25.

(viii) Maternal Mortality Rate (MMR)-Reduce to 1 per 1000 live births.

(ix) Child (0-6) sex ratio-Raise it to 950 by 2017.

(x) Total fertility rate-Reduce it to 2.1.

(xi) Gross Irrigated Area-Increase it from 90 million hectare to 103 million hectare by 2017.

(xii) Renewable energy capacity-Add 30000 MW of new power capacity.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

NITI AAYOG

NITI Aayog (National Institution for Transforming India)

Background

• Planning has been in Indian psyche as our leaders came under influence of the socialist clime of erstwhile USSR. Planning commission served as the planning vehicle for close to six decades with a focus on control and command approach.
• Planning Commission was replaced by a new institution – NITI AAYYOG on January 1, 2015 with emphasis on ‘Bottom –Up’ approach to envisage the vision of Maximum Governance, Minimum Government, echoing the spirit of ‘Cooperative Federalism’.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Administrative Skeltal

• Chairperson: Prime Minister
• Vice-Chairperson: To be appointed by Prime-Minister
• Governing Council: Chief Ministers of all states and Lt. Governors of Union Territories.
• Regional Council: To address specific regional issues, Comprising Chief Ministers and Lt. Governors Chaired by Prime Minister or his nominee.
• Adhoc Membership: 2 member in ex-officio capacity from leading Research institutions on rotational basis.
• Ex-Officio membership: Maximum four from Union council of ministers to be nominated by Prime minister.
• Chief Executive Officer: Appointed by Prime-minister for a fixed tenure, in rank of Secretary to Government of India.
• Special Invitees: Experts, Specialists with domain knowledge nominated by Prime-minister.

NITI Aayog Hubs

1. Team India Hub acts as interface between States and Centre.
2. Knowledge and Innovation Hub builds the think-tank acumen of NITI Aayog.
3. The Aayog planned to come out with three documents — 3-year action agenda, 7-year medium-term strategy paper and 15-year vision document.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Importance

• The 65 year-old Planning Commission had become a redundant organization. It was relevant in a command economy structure, but not any longer.
• India is a diversified country and its states are in various phases of economic development along with their own strengths and weaknesses.
• In this context, a ‘one size fits all’ approach to economic planning is obsolete. It cannot make India competitive in today’s global economy.

Objectives

• To foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong States make a strong nation.
• To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government.
• To ensure, on areas that are specifically referred to it, that the interests of national security are incorporated in economic strategy and policy.
• To pay special attention to the sections of our society that may be at risk of not benefitting adequately from economic progress.
• To provide advice and encourage partnerships between key stakeholders and national and international like-minded Think Tanks, as well as educational and policy research institutions.
• To create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and other partners.
• To offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda.
• To maintain a state-of-the-art Resource Centre, be a repository of research on good governance and best practices in sustainable and equitable development as well as help their dissemination to stake-holders.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Challenges

• To prove its mettle in policy formulation, the NITI Aayog needs to prioritize from the long list of 13 objectives with clear understanding of the difference in policy, planning and strategy.
• To build the trust, faith and confidence more than the planning commission, NITI Aayog needs freedom of various kinds with budgetary provisions not in terms of plan and non-plan expenditures but revenue and capital expenditure as the higher rate of increase in capital expenditure can remove infrastructural deficits at all levels of operation in the economy.

NITI Aayog	Planning Commission
It serves as an advisory Think Tank.	It served as extra-constitutional body.
It draws membership from a wider expertise.	It had limited expertise.
It serves in spirit of Cooperative Federalism as states are equal partners.	States participated as spectators in annual plan meetings.
Secretaries to be known as CEO appointed by Prime- Minister.	Secretaries were appointed through usual process.
It focuses upon ‘Bottom-Up’ approach of Planning.	It followed a ‘Top-Down’ approach.
It does not possess mandate to impose policies.	Imposed policies on states and tied allocation of funds with projects it approved.
It does not have powers to allocate funds, which are vested in Finance Minister.	It had powers to allocate funds to ministries and state governments.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

RURAL AND URBAN POVERTY INCLUSIVE DEVELOPMENT

• Inclusive development means development which is participative and empowers every individual especially the poor and excluded.

• Inclusive development in India first emphasised in the Eleventh Plan Period (2007-12).

• The essential elements of inclusive development are

(i) poverty reduction and increase in quantity and quality of employment

(ii) agricultural development

(iii) reduction in regional disparities

(iv) social sector development

(v) protecting the environment.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Human Development

• The Human Development Report (HDR) was published by the UNDP since 1990 captures the essence of Human development,

• The concept of HDR was started by Pakistani economist Mahbub-ul-Haq and Amartya Sen.

• The theme of the HDR-2013 is the rise of the South: Human Progress in a Diverse World.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Human Development Report 2013

• HDI (Human Development Index) ranks countries on scale of 0 to 1.

• It has categorised countries into

(i) Very high Human development 0.900 and above

(ii) High Human development between 0.800 and 0.899

(iii) Medium Human development between 0.500 and 0.799.

(iv) Low Human development between 0 to 0.499.

• HDR-2013 measures HDI on the basis of geometrical mean.

Poverty is a social phenomenon wherein section of society is unable to fulfill even its basic necessities of life.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Human Development Index

• UNDP (United Nations Development Programme) publishes annual human development report.

• It ranks nations in terms of progress made in three dimensions life expectancy at birth knowledge (measured by literacy and school enrolment rates) and standard of living (measured by GNP per capita in purchasing power partly terms).

Planning commission is the authority, which publishes the poverty estimates based on various rounds of National Sample Survey Organisation (NSSO) on monthly per capita consumption expenditure.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Rural Poverty

Main Reasons

  (i) Rapid population growth.

 (ii) Lack of capital.

(iii) Lack of alternate employment opportunities agriculture.

(iv) Excessive population pressure on agriculture.

 (v) Illiteracy.

(vi) Regional disparities.

(vii) Joint family system.

(viii) Child marriage tradition.

 (ix) Indifferent attitude towards investment.

 (x) Lack of proper implementation of public distribution system.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Government Efforts

  (i) Legal elimination of bonded labourers.

 (ii) Antyodaya plan.

(iii) Small Farmer Development Programme (SFDP).

(iv) Desert- Development Programme (DDP) and Drought Prone Area Programme (DPAP).

 (v) Twenty point programme.

 (vi) Food for work programme.

(vii) Minimum Needs Programme (MNP).

(viii) Integrated Rural Development Programme (IRDP).

 (ix) National Rural Employment Programme (NREP).

 (x) Indira Awas yojana.

 (xi) Mahatma Gandhi National Rural employment Guarantee Scheme.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Urban Poverty

Main Reasons

(i) Migration of rural youth towards cities.

(ii) Lack of vocational education/training.

(iii) Limited job opportunities of employment in the cities.

(iv) Rapid increase in population.

 (v) Lack of housing facilities.

(vi) No proper implementation of public distribution system.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Government Efforts

(i) Emphasis on vocational education.

(ii) Nehru Rozgar Yojana (NRY).

(iii) Self-Employment Programme for the Urban Poor (SEPUP).

(iv) Financial assistance for constructing houses.

(v) Self-Employment to the Educated Urban Youth (SEEUY) Programme.

(vi) Prime Minister’s Rozgar Yojana (Also implemented in rural areas).

(vii) National Social Assistance Programme.

(viii) Urban Basic Services for the Poor (UBSP) Programme.

(ix) Prime Minister’s Integrated Urban Poverty Eradication Programme (PMIUPEP).

(x) Swarna Jayanti Shahri Rozgar Yojana.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

UNEMPLOYMENT

• An economic condition marked by the fact that individual actively seeking jobs remain unemployed. Unemployment is expressed as a percentage of the total available workforce. The level of unemployment varies with economic conditions and other circumstances.

• In India, a person working 8 hours a day for 273 days of the year is regarded as employed on a standard person year basis.

• B Bhagwati Committee on unemployment estimates (1973) set up by the Planning Commission gave three estimates of unemployment. These are

• Usual Principal Status (UPS) Employment Persons, who remained unemployed for a major part of the year. This is also called ‘open unemployment’.

• Current Weekly Status (CWS) Unemployment Persons, who did not find even an hour of work during the survey week.

• Current Daily Status (CDS) Unemployment Persons, who did not find work on a day or some days during the survey week. This is the comprehensive measure of unemployment, including chronic as well as under-employment.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Flagship Programmes of Government of India

The flagship programmes were launched by the Government of India in 2004 to bridge education, health, employment and infrastructure divides.

The ultimate objective of the flagship programme is to achieve broad-based improvement in the living standards of our people and to ensure that growth is widely spread.

Sarva Shiksha Abhiyan (SSA, launched in 2001)

• The Sarva Shiksha Abhiyan (SSA) was conceived as a centrally sponsored scheme at the end of the ninth-five year plan.

• The main objective of this programme was to provide educational facility to all children of 6-14 age group in the state, to complete the primary education by 2007 and upper primary education by 2010 of all enrolled children and to ensure universal stay of all children up to the year 2010.

• It also concentrates on gender equality

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

National Rural Health Mission

(NRHM, launched in 2005)

• The National Rural Health Mission (NRHM), aims to provide accessible, affordable and accountable quality health services to the rural poor.

• The time-period of this programme is 7 years from 2005 to 2012.

• The objectives of the Mission include reduction in child and maternal mortality and universal access to public health care services among other

• The thrust of the Mission is on establishing a fully functional, community owned, decentralised health delivery system with intersectoral convergence at all levels.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Integrated Child Development Scheme

(ICDS, launched in 1975)

• The Integrated Child Development Services (ICDSs) Scheme aims at enhancing the health, nutrition and learning opportunities of infants, young children (0-6 years) and their mothers.

• The Scheme provides an integrated approach for converging basic services which includes supplementary nutrition, immunisation, health check-up, referral services, pre-school non-formal education and nutrition and health education.

• Since 2005-06, the Government of India is providing central assistance to states for supplementary nutrition also to the extent of 50% of the actual expenditure incurred by states or 50% of the cost norms, whichever is less.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Mid-day Meal (MDM, launched in 1995)

• Under the scheme, hot cooked meal of a minimum 450 calories and 12gms of protein is being provided to children studying in primary schools / Education Guarantee Scheme (EGS)/Alternative and Innovative Education (AIE) centre.

 • This programme is expected to help Universalisation of Elementary Education by improving enrolment and regularity of attendance, by reducing drop-outs, and by improving children’s level of learning and self-esteem.

• The programme is the largest feeding programme in the world.

• It provides nutritional support to children of primary stage in drought affected areas during summer vacation.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

National Rural Drinking Water Programme (NRDWP, launched in 2009) 

• This programme’s instrument is Accelerated Rural Water Supply Programme (ARWSP) under implementation since 1972-73, which is founded on a 50% matching share basis between the Government of India and the State Government.

• The ARWSP has been modified as National Rural Drinking Water Programme (NRDWP) in 2009-10 with a major emphasis on ensuring sustainability in terms of portability, adequacy, affordability and equity by adopting decentralised approach.

Total Sanitation Programme (TSP)

 • Total Sanitation Campaign Programme is in force in all districts of the state. TSP was started Maharashtra in the year 2000.

• This programme was originally envisaged to construct household toilets, schools and Anganwadi sanitation and community complex with overall behavioural changes in the rural habitation.

• It involves health education, awareness and hygiene education.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

National Social Assistance Programme (NSAP)

• The National Social Assistance Programme (NSAP) envisages the pension schemes, National Family Benefit Scheme and scholarship up to 2 children of BPL families studying in classes 9th to 12th.

• The pension schemes under NSAP are Indira Gandhi National Old Age Pension Scheme, Indira Gandhi National Widow Pension Scheme, Indira Gandhi National Disability Pension Scheme, provide a sum as pension to old aged, widowed and disabled.

Mahatma Gandhi Rural Employment

Guarantee Act (MGNREGA, launched on 2nd February, 2006)

• The National Rural Employment Guarantee Act (NREGA) 2005 envisages securing the livelihood of people in rural areas by guaranteeing 100 days of employment in a financial year to a rural household. It is sponsored by the Central Government above.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Main Provisions

(i) Employment to be given within 15 days application for work.

(ii) If employment is not provided within 15 days, daily unemployment allowance in cash has to be paid.

(iii) Employment within 5 km radius, else extra wages to be paid.

(iv) At least one-third beneficiaries have to be women.

(v) Gram Sabha will recommend works.

(vi) Gram Panchayat to execute at least 50% of works.

(vii) PRIS have a principal role in planning and implementation.

(viii) Grievance redressal mechanism to be put for ensuring a responsive implementation.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

MGNREGA 2

Mahatma Gandhi National Rural Employment Guarantee Act 2005 operational guidelines 2012 in what is being called MGNREGA 2.

This programme is undergoing an overlevel based on a set of recommendations of committee headed by planning commission member Hilir Shah.

Indira Awas Yojana (IAY, launched in 1999)

• The Indira Awas Yojana (IAY) addresses housing shortage as an important component of poverty alleviation in rural India.

• The cost is shared by the Centre and State in the ratio of 75:25.75% weightage is given to housing shortage and 25% weightage to the poverty. The ratios are prescribed by the Planning Commission for state level allocations. 

• Under this yojana, houses are invariably allotted in the name of women.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY, launched in 2005)

• Aims at providing electricity in all villages and habitations and access to electricity to all rural households.

• Connections to BPL families are given free of cost. 90% cost of the scheme is released as grant, where 10% as loan.

 • For creation of village electrification infrastructure, first priority is given to unelectrified villages. Preference for electrification is given to Dalit Bastis, Tribal settlements and habitations of weaker sections.

• It is a integrated energy programme aims to meet the energy needs of cluster of villages through a blend of conventional and non-conventional sources of energy.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Jawaharlal Nehru National Urban Renewal Mission

(JNNURM, launched on 3rd December, 2005)

• The aim of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is to encourage reforms and fast track planned development of identified cities.

• The duration of the Mission is seven years beginning from the year 2005-06 to 2012-13.

• The Mission has two sub-missions. One is BSUP (Basic Services to Urban Poor) and the other is UIG (Urban Infrastructure and Governance).

• The JNNURM has now been extended to 65 cities from the previous 63 cities.

• It is the single largest initiative to address the issues of urban infrastructure.

Employment, Poverty, Rural and Urban Development Programmes

• Employment Guarantee Scheme of Maharashtra (EGSM) (Set up in 1972)

To assist the economically weaker’ sections of the rural society. It was the first programme to recognise ‘Right to Work’.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Training Rural Youth for Self-Employment (TRYSEM) (Set up in 1979)

Programme for training rural youth for self employment.

• Integrated Rural Development Programme (IRDP) (Set up in 1980)

All-round development of the rural poor through a programme of asset endowment for self employment.

• National Rural Employment Programme (NREP) (Set up in 1980)

To provide profitable opportunities to the rural poor.

• Rural Landless Employment Guarantee Programme (RLEGP) (Set up in 1983)

For providing to landless farmers and labourers. Jawahar Rozgar Yojana (JRY) (Set up in 1989)

For providing employment to rural unemployed.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Nehru Rozgar Yojana (NRY) (Set up in 1989)

For providing employment to urban unemployed.

• Scheme of Urban Wage Employment (SUWE) (Set up in 1990)

To provide wages employment after arranging the basic facilities for poor people in the urban areas, where population is less than one lakh.

• Employment Assurance Scheme (EAS) (Set up in 1993)

To provide employment of atleast 100 days in a year in village. Minimum wages under NREGA has been raised to 20 per day.

• Swarna Jayanti Shahari Rozgar Yojana (SJSRY) (Set up in 1997)

To provide gainful employment to Urban unemployed and under employed poor through self employment or wage employment.

• It has been revamped with effect from April 2009. The revamped scheme has five components as follows

• Urban Self-Employment Programme (USEP)

• Urban Woman Self-Help Programme (UWSHP)

• Skill Training for Employment Promotion amongst Urban Poor (STEP-UP)

• Urban Wage Employment Programme (UWEP)

• Urban Community Development Network (UCDN)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Swarna Jayanti Gram Swarozgar Yojana (SJGSY) (Set up in 1st April, 1999)

• It replaced Integrated Rural Development Programme (IRDP), Development of Women and                         Children in Rural Areas (DWCRA), Ganga Kalyan Yojana (GKY) (1997), Million Well Scheme (MWS) (1989) and Supply of Improved Tool-kits to Rural Artisans (SITRA) (1992).

• For eliminating rural poverty and unemployment and promoting self employment through establishing micro enterprises in rural areas. Targets to Cover 50% SCS/STs, 40% women, minorities and 3% disabled. 15%

• It has been restructured as NRLM (National Rural Livelihoods Mission), now renamed as Aajeevika to implement in mission mode.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Jai Prakash Narayan Rozgar Guarantee Yojana (JPNRGY) (Proposed in 2002-03 Budget) HAYESUM

• Employment guarantee in most poor districts.

• Pradhan Mantri Gramodaya Yojana (PMGY) (Set up in 2000)

• Focus on village level development in five critical areas, i.e., primary health, primary education, housing, rural roads, drinking water and nutrition with the overall objective of improving the quality of life of people in rural areas.

• The scheme was notified to throughout the country with effect from Ist April, 2008. Renamed as MGNREGS from 2nd October, 2009. SGRY and Food for Work Programme merged into it.

• With effect from 1st April, 2012, MGNREGA-2 has been lauched. MGNREGA’s new version encompasses works related to agriculture, animal husbandry, poultry, drinking water and sanitation. Further, small marginal and SC/ST farmers will be able to employ NREGA workers for farm work.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Sampoorna Grameen Rozgar Yojana (SGRY) ET

(Set up in 25th September, 2001)

• EAS, Jawahar Gram Samridhi Yojana (JGSY) and JRY merged into it.

• To provide wage employment and food security in rural areas and also to create durable economic and social assets.

• Food for Work Programme (Set up in 2001)

To give food through wage employment in the drought affected areas in eight states. Wages are paid by the State Governments partly in cash and partly in Foodgrains.

• Prime Minister’s Employment Generation Programme (PMEGP) (Set up in 2008)

To generate employment opportunities in rural as well as Urban areas through setting up of new self employment ventures/projects/micro enterprises.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Rural Development Programmes

• Community Development Programme (CDP) (Set up in 1952)

   Over-all development of rural areas with people’s participation.

• National Fund for Rural Development (NFRD) (Set up in 1984)

    To grant 100% tax rebate to donors and also to provide financial assistance for rural development projects.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Council for Advancement of People’s Actions and Rural Technology (CAPART) (Set up in 1986)

   To provide assistance for rural prosperity.

• District Rural Development Agency (DRDA) (Set up in 1993)

  To provide financial assistance for rural development.

• Pradhan Mantri Gram Sadak Yojana (PMGSY) (Set up in 2000)

   To line all villages with pakka road having population of 500 and above in general areas and 250 and     above in tribal and general areas.

• Twenty Point Programme (Set up in 1975)

   Poverty eradication and raising the standard of living.

• Drought Prone Areas Programme (DPAP) (Set up in 1973-74)

   To minimise the adverse effects of drought on production of crops and livestock and productivity of land, water and human resources ultimately leading to drought proofing of the affected areas.

• Annapurna Scheme (Set up in 2000)

  To indigent senior citizens of 59 yrs of age or above, who are not getting pension under National Old     Age Pension scheme are covered. 10 kg of food grains per person per month are supplied free of cost under this scheme.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Total Sanitation Campaign (TSC) (Set up in 1st April, 1999)

• It follows a community led and people-centred approach and places emphasis on Information. Communication and Education (ICE) for demand generation of sanitation facilities.

• Nirmal Gram Puraskar (NGP) (Set up in October, 2003)

• It is an incentive scheme to encourage PRIs to take up sanitation promotion.

• Desert Development Programme (DDP) (Set up in 1977-78)

   It aims to mitigate the adverse effects of desertification.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Integrated Wasteland Development Programme (IWDP) (Set up in 1989-90)

  The development of wasteland and degraded lands. 

• Valmiki Ambedkar Awas Yojana (VAAY) (Set up in December, 2001)

   It facilitates construction and upgradation of dwelling units for slum dwellers.

• Member of Parliament Local Area Development Programme (MPLADP) (Set up in 1993)

   It provides for 2 crore to each MP to undertake development activities in its constituency. The amount has been raised to 5 crore from 2011.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Affordable Housing in Partnership (AHIP) (be a part of JNNURM) (Set up in 2009)

  It aims at constructing one million houses for the EWS/LIG/MIG with at least 25% for EWS category. Seeks to operationalise National Habitat Policy 2007

• Rajiv Awas Yojana (RAY) (Set up in 2010)

• It aims at ‘slum-free’ India in next five years.

• It is for urban areas.

Women Empowerment Programmes

• Support to Training and Employment Programme for Women (STEPW) (Set up in 2003-04)

  To increase the self-reliance and autonomy of women by enhancing their productivity and enabling them to take up income generation activities.

• Rajiv Gandhi Scheme Empowerment of Adolescent Girls (RGSEAG)- ‘Sabla’ (Set up in 19th November, 2010)

   It aims at empowering adolescent girls of 11 to 18 years by improving their nutritional and health status, upgradation of home skills, life skills and vocational skills.

• Rashtriya Mahila Kosh (National Credit Fund for Women) (Set up in 1993)

  It extends micro-finance services through a client friendly and hassle-free loaning mechanism for livelihood activities, housing, micro-enterprises, family needs, etc to bring about the socio-economic upliftment of poor women.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Indira Gandhi Matritva Sahyog Yojana (IGMSY)

• To improve the health and nutritional status of pregnant, lactating women and infants.

• It involves conditional cash transfer and wage loses are also compensated.

• Swayam Siddha (Set up in 2002)

  At organising women into self-help groups to form a strong institutional base.

• Swadhar (Set up in 1995)

  To support women to become independent in spirit, in thought, in action and have full control over their lives rather than be the victim of others actions.

• Support to Training and Employment Programme for Women (STEP) (Set up in 1986)

  To mobilise women in small viable groups and make facilities available through training and access to credit, to provide training for skill upgradation, etc.

• Development of Women and Children in Rural Areas (DWCRA) (Set up in 1982).

  To improve the socio-economic status of the poor women in the rural areas through creation of groups   of women for income-generating activities on a self-sustaining basis.

• Dhan Laxmi (Set up in March, 2008)

Conditional cash transfer scheme for the girl child to encourage families to educate girl children and to prevent child marriage.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Ujjwala (Set up in 4th December, 2007)

   A comprehensive scheme for prevention of trafficking with five specific components-prevention, rescue, rehabilitation reintegration and repatriation of victims.

• Gender Budgeting Scheme (GBS) (Set up in 2004)

  With a view to empower women.

• National Mission for Empowerment of Women (NMEW) (Set up in 2010).

  To achieve empowerment of women socially, economically and educationally by securing convergence of schemes.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Education Oriented Programmes

• Aims at universalisation of primary and elementary education.

• National Programme for Education of Girls at Elementary Level (NPEGEL) important component of SSA (Set up in 2003)

   Focused intervention to reach the ‘Hardest to Reach’ girls and provides for ‘model school’ in every cluster with more intense community mobilisation and supervision of girls enrolment in schools.

• Kasturba Gandhi Balika Vidyalayas (KGBVs) (Set up in 2004)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• To set up residential schools at upper primary level for girls belonging to SC/ST/OBC/Miniority communities.

• The scheme being implemented in rural areas and anal urban areas with female literacy below 30% and national average respectively.

• Inclusive Education for the Disabled at Secondary Stage (IEDSS) Replaced Integrated Education for Disabled Children (IEDC) (Set up in 2009-10)

• Provides 100% central assistance for inclusive education of disable children studying in class IX-XII in government local body and government-aided schools.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Rashtriya Madhyamik Shiksha Abhiyaan (RMSA) or Scheme for Universalisation of Access for Secondary Education (SUCCESS) (Set up in March, 2009)

Aims at raising the enrolment rate at secondary stage. from 52.26% in 2005-06 to 75% in next 5 years by providing a secondary school within reasonable distance of 5 km of any habitation; ensure universal access by 2017 and universal retention by 2020.

• Saakshar Bharat (Set up in 8th September, 2009) National Literacy Mission has been recalled as ‘Shakshar Bharat’. The aim is to cover all adults in the age group of 15 and above with its primary focus on women.

Health Oriented Programmes

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• National Rural Health Mission (NRHM) (Set up in 12th April, 2005)

• To provide effective healthcare to rural population with special focus on 18 states with weak health indices/infrastructure; to raise public spending on health from 0.9% of GDP to 2.3% of GDP; reduction of IMR and MMR; and universal access to healthcare with emphasis on women.

• The scheme Janani Suraksha Yojana (JSY) is a core component of NRHM. • Focus demand promotion for institutional on deliveries in states and regions and targets lowering of MMR.

• Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) (Set up in 2010)

To correct regional imbalance in tertiary health care and augmenting facilities for quality medical education in the country; and setting up six AIIMS-like institution and upgradation of 13 existing government medical college institution.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

NATIONAL INCOME IN INDIA

• According to the National Income Committee (1949), “A National income estimate measures the volume of commodities and services turned out during a given period counted without duplication.” Thus, national income measures the net value of goods and services produced in a country during a year and it also includes net earned foreign income.

• In other words, a total of National income measures the flow of goods and services in an economy. National income is a flow not a stock. As contrasted with national wealth that measures the stock of commodities held by the nationals of a country at a point of time, national income measures the productive power of an economy in a given period to turn out goods and services for final consumption.

• In India, National income estimates are related with the financial year (1st April to 31st March).

Concepts of National Income

The various concepts of national income are as follows

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

(i) Gross National Product (GNP) refers to the money value of total output or production of final goods and services produced by the nationals of a country during a given period of time, generally a

year.

                       GNP = GDP + X – M,

Where, X – M = NFIA = Net Factor Incomes from Abroad

X = Income earned and received by nationals within the boundaries of foreign countries

M = Income received by foreign nationals from within the country

If X = M, Then                 GNP = GDP

Similarly, in a closed economy

X = M = 0, then also GNP = GDP

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

(ii) Gross Domestic Product (GDP) is the total money value of all final goods and services produced within the geographical boundaries of the country during a given period of time. As a conclusion, it must be understood while domestic product emphasizes the total output which is raised within the geographical boundaries of the country, national product focuses attention not only on the domestic product, but also on goods and services produced outside the boundaries of a nation. Besides, any part of GDP which is produced by nationals of a country, should be included in GNP.

(iii) Net National Product (NNP) is obtained by subtracting depreciation value (i.e., capital stock consumption) from GNP. In equation form, NNP = GNP – Depreciation

(iv) National Income GNP, explained above, is based on market prices of produced good which includes indirect taxes and subsidies. NNP can be calculated in two ways

(a) at market prices of goods and services

(b) at factor cost

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• When NNP is obtained at factor cost, it is known as National Income. National Income is calculated by subtracting net indirect taxes (i.e., total indirect tax-subsidy) from NNP at market prices. The obtained value is known as NNP at factor cost or national income. In equation form, NNP at factor cost or National Income

= NNP at Market price – (Indirect Taxes – Subsidy)

= NNP_MP – Indirect Tax + Subsidy

• Personal Income = National income – undistributed profits of corporations – payments for social security provisions-corporate taxes + government transfer payments + business transfer payments +

 net interest paid by government.

• It should always be kept in mind that personal income is a flow concept.

• Disposable Personal Income When personal direct taxes are subtracted from personal income the obtained value is called Disposable Personal Income (DPI).

• [Disposable personal income] = [Personal Income] – [Direct Taxes]

                                             DPI = PI – DT

• Purchasing Power Parity (PPP) refers to the adjustment to be made in the value of money in a country so that identical goods cost identical money in a particular currency across all countries.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Distinction Between Cottage, Small and Village Industries

• Cottage industry is run by family members on full time or part time basis. It possesses negligible capital investment. There is handmade production and no wage earning person is employed in cottage industry.

• Small industrial units employ wage earning labour and production is done by the use of modern techniques. Capital investment is also there. A few cottage industries which are export oriented have been included in the category of small sector so that facilities provided to small units may also be given to export-oriented cottage industries.

• The industries established in rural areas. having population below 10000 and having less than 15000 as fixed capital investment per worker will be termed as village industries. KVIC and State Village

Industries Board provides economic and technical assistance in establishing and operating these industrial units.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

NABARD

•  It is a National Bank for Agriculture and Rural Development (NABARD) established on 12 July, 1982.
•  It was set up on the recommendations of Shivaraman committee.  Its headquarter is located at Mumbai.
•  It is an apex body handles matters concerning policy, planning and operating the filed of credit for agriculture and other development activities in rural areas.
• It gives long term loans to State Governments to enable them to subscribe to the share of corporative credit societies.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

 Khadi and Village Industries Commission (KVIC)

• It was formed under the ‘Khadi and Village Industries Commission Act of 1956.

• Sardar KA Venkataramaiya became its first director.

• Headquartered in Mumbai, it has six zonal offices in Delhi Bhopal, Bangalore, Kolkata, Mumbai, and Guwahati,

• It functions to provide employment in rural area to provide consumer goods and to help rural areas become self reliant, through concentrated focus on micro, small and medium enterprises.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Stock Exchanges

Stock exchange or share market plays a dominant role in mobilising resources for corporate sector. It is a market for dealing in shares, debentures and financial securities. In the stock exchange, shares and debentures are brought and sold for investment as well as for speculative purposes.

Bombay Stock Exchange (BSE) is one of the oldest stock exchanges in the world (since 1875) and the oldest of Asia. The -share sensex of BSE includes 30 listed companies. It has indices, viz.

(i) BSE 200

(ii) BSE 100

(iii) BSE 500

(iv) SENSEX

(v) MIDCAP

(vi) SMLCAP

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

National Stock Exchange (NSE)

• It was established in November 1992 (i), on the recommendation of pherwani committee.

• However, it became a fully fledged stock exchange in 1993 and commenced operations in 1994,

• In October 1995, it became the biggest stock exchange in India

• NSE share sensex includes 50 listed companies.

Securities and Exchange Board of India (SEBI)

• SEBI (Securities and Exchange Board of India) was initially constituted on 12th Apr, 1988 as a non-statutory body through a resolution of the Government SEBI was given statutory status and powers through an ordinance promulgated on 30th Jan, 1992.

• The statutory powers and functions of SEBI were strengthened through the promulgation of the Securities Laws (Amendment) Ordinance on 25th Jan, 1995 which was subsequently replaced by an Act of parliament.

• SEBI is managed by six members: One chairman (nominated by Central Government), two members (officers of central ministries), one member (from RBI) and remaining two members nominated by Central Government. The office of SEBI is situated at Mumbai with its regional offices at Calcutta, Delhi and Chennai. In 1988, the initial capital of SEBI was 7.5 crore which was provided by its promoters (IDBI, ICICI, IFCI). This amount was invested and with its interest amount day-to-day expenses of SEBI are met.

• All statutory powers for regulating Indian capital market area vested with SEBI itself.

• UK sinha became the 7th chairman of SEBI in 2011.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Functions of SEBI

(i) To safeguard the interests of investors and to regulate

capital market with suitable measures.

(ii) To regulate the business of stock exchanges and other securities market.

(iii) To regulate the working of Stock Brokers, Sub-brokers, Share Transfer Agents, Trustees, Merchant Bankers, Underwriters, Portfolio Managers etc and also to make their registration.

(iv) To register and regulate collective investment mutual funds.

(v) To encourage self-regulatory organisations.

(vi) To eliminate malpractices of security markets.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

(vii) To train the person associated with security markets and also to encourage investor’s education.

(viii) To check insider trading of securities,

(ix) To supervise the working of various organisations trading in security market and also to ensure systematic dealings.

(x) To promote research and investigations for ensuring the attainment of above objectives.

Insurance

Insurance has been an important part of the Indian financial system. Until recently, insurance services were provided by the public sector, i.e., life insurance by the life Insurance Corporation of India and general insurance by the General Insurance Corporation and its four subsidiaries.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Life Insurance Corporation (LIC)

• Established on 1st Sept, 1956.

• Head office Mumbai, Zonal offices 7 (Mumbai, Kolkata, Delhi, Chennai, Kanpur, Hyderabad and Bhopal)

General Insurance Corporation (GIC)

Established on 1st Jan 1973, It has four subsidiary companies

(i) National Insurance Company Ltd, Kolkata.

(ii) The New India Assurance Co Ltd, Mumbai.

(iii) The Oriental and Insurance Co Ltd, New Delhi.

(iv) United India Fire and General Insurance Co Ltd, Chennai.

Reforms in Insurance Sector

The reforms in the insurance sector started with the enactment of Insurance Regulatory and Development Authority Act, 1999. The Act paved the way for the entry of private insurance companies into the insurance market and also constitution of Insurance Regulatory and Development Authority. In 1993, Malhotra committee was set up to recommend reforms in insurance sector.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Insurance Regulatory and Development Authority (IRDA)

• IRDA was constituted on 19 April, 2000 to protect the interest of the holders of insurance policies and to regulate, promote and ensure orderly growth of the insurance industry. The authority consists of a Chairperson, three whole-time members and four Part-time members.

• It provides for regulating the insurance sector, the Authority has been issuing regulations covering almost the entire segment of insurance industry, namely, regulation on insurance agents, solvency margin, re-insurance, registration of insurers, obligation of insurers to rural and social sector, accounting procedure, etc.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Monetary Sector

Monetary Sector of a country is one of the important determining factors of the level of economic development. Sound financial system induces the level of savings and investment, thus working as a stimulant for the development variables. Rapid economic development requires a sound financial system with adequate availability of finance and a strong system of associated financial and investment institutions.

Financial market is important part of financial sector. It is that market where financial transactions take place. One the basis of short term and long term transactions, such markets are classified as

(i) Money Market

(ii) Capital Market.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

(i) Money Market

The cluster of financial institutions that deal in short term securities and loans, gold and foreign exchange are termed as Money market. Money has a time value and therefore, the use of it is bought and sold against payment of interest. Short term money is bought and sold on the money market and long term money on the capital market.

(ii) Capital Market

It is the market for long term loanable funds. There is no clear-cut distinction between the two markets although, in Principle, capital market loans are used by industry and commerce mainly for fixed investment.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Scheduled and Non-Scheduled Banks

• The scheduled banks are those, which are entered in the second schedule of the RBI Act, 1934. These banks have paid-up capital and reserves of an aggregate value of not less than 5 lakh and satisfy the RBI that their affairs are carried out in the interest of their depositors.

• All Commercial Banks (Indian and foreign), regional rural banks and state co-operative banks are scheduled banks. Non scheduled banks are those, which are not included in the Second Scheduled of the RBI Act, 1934.

Reserve Bank of India (RBI)

• RBI is the Central Bank of the country.

• RBI was setup on the basis of Hilton Young Commission recommen-dation in April, 1935, with the enactment of RBI Act, 1934. Its first Governor was Sir Osborne Smith.

• The main purpose of creating RBI was to separate currency and credit from GOI.

• RBI was nationalised in 1949 and its first Indian Governor was CD Deshmukh.

Administration

• The headquarter of the RBI is in Mumbai.

• There are 14 Directors in Central Board of Directors besides the Governor, four Deputy Governors and one Government Official.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Functions

The main functions of the RBI includes

• Monetary authority.

• Issue of currency except coins which are minted by the Union Government.

• Banker and debt manager to government.

• Banker of Banks.

• Regulator of Banking system.

• Manager of foreign exchange. Maintaining financial stability.

• Regulator and supervisor of the payment and settlement system.

• Since 1952, monetary policy of the RBI emphasise on twin goals.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

These are

(i) Economic growth

(ii) Inflation control

• Instrument of credit control can be divided into two namely qualitative/selective quantitative credit controls.

Quantitative/General credit control

Quantitative credit control is used to control the volume of credit and indirectly to control the inflationary and deflationary pressures caused by expansion and contraction of credit.

The quantitative credit control consists of

• Bank Rate It is also called the rediscount rate. It is the rate, at which the RBI gives finance to Commercial Banks.

• Cash Reserve Ratio (CRR) Since 1962, the RBI has been empowered to vary the CRR requirement between 3% and 15% of the total demand and time deposits. The RBI (Amendment) Bill, 2006, empowers RBI to prescribe CRR-Cash that banks deposits with the RBI without floor any rate or ceiling rate.

• Statutory Liquidity Ratio (SLR) It is the ratio of liquid asset, which all Commercial Banks have to keep in the form of cash, gold and unencumbered approved securities equal to not more than 40% of their total demand and time deposits liabilities.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Repo Rate It is the rate, at which RBI lends short term money to the banks against securities. Repo rate injects liquidity in the market. 5000

• Reverse Repo Rate It is the rate, at which banks park short-term excess liquidity with the RBI. Reverse repo rate withdraws liquidity from the market. This is always 100 base point/ 1% less than Repo rate.

• Open Market Operations (OMOs) Under OMOS, when the RBI sells Government securities in the market, it withdraws money liquidity from the market and thus reduces volume of credit leading to control of inflation when it buys Government securities, it injects liquidity into the market and thus increases credit volume leading to higher economic growth.

Qualitative/Selective/Direct Credit Control

Qualitative measures are used to make sure that purpose, for which loan is given is not misused. It is done through credit rationing and regulating loan to consumption etc.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

                                          Banking Ombudsman Scheme

• The scheme is in operation since 1995 and works under the control and supervision of the RBI.
• The scheme is applicable to all Commercial Banks, RRBs and Scheduled Primary Co-operative Banks.
• The Banking Ombudsman currently have their offices at 15 centres.
• The RBI’s Quasi Judicial Authority for resolving disputes between Commercial Banks, primary co-operative and RRB’s and their customers. At present there are 15 Banking Ombudsmen in India.
• There is a scheme, which is known as Chit Fund Scheme, saving scheme.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

SBI

• Bank of Calcutta (Bank of Bengal), Bank of Bombay and Bank of Madras were unified as the Imperial Bank of India in 1921.

• Imperial bank was reconstituted as SBI in 1955.

• In 1959 the State Bank of India (subsidiary banks) Act was passed. This made SBI take over eight former state-associated banks as it subsidiaries.

• Arundhati Bhattacharya became the first woman head of SBI. Since SBI is ranked 292 in fortune 500 companies, she became the first woman to lead a fortune 500 company and the only woman banker in that list.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Currency

• Rupee was first minted in India during the reign of Sher Shah Suri around 1542.

• India became a member of International Monetary Fund (IMF) in 1947, and exchange value of rupee came to be fixed by IMF standards.

• All coins and one rupee note are issued by Government of India. That’s why one rupee note doesn’t bear the signature of Governor of RBI. It bears the signature of Finance Secretary, Government of India.

• The symbol of Indian rupee () came into use on 15th July, 2010.

• The new symbol designed by D Udaya Kumar. This symbol is an amalgamation of Devenagri ‘Ra’ and the Roman ‘R without the stem.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Devaluation of Currency

Refers to reducing value of the Indian rupee in comparison to the leading currencies in the world market.

 (i) First Devaluation In June 1949 (by 30.5%) (Finance Minister Dr John Mathai).

 (ii) Second Devaluation In June 1966 (by 57%)(Finance Minister Sachindra Chaudhary).

 (iii) Third Devaluation On July 1, 1991 (by 9%). (Finance Minister Dr Manmohan Singh).

 (iv) Fourth Devaluation On July 3, 1991 (by 11%)(Finance Minister Dr Manmohan Singh).

The basic objective of devaluation is to reduce deficits in balance of trade by making exports relatively cheap and imports costly.

Hard Currency Its refers to that currency which is traded in foreign exchange market for which demand is relative to the supply.

Soft Currency It refers to that currency which is expected to vary irregularly or decreage in value against other currencies.

Inflation

Inflation is that state in which the prices of goods and services

rise on the one hand and value of money falls on the other. When money circulation exceeds the production of goods and services, the state of inflation takes place in the economy.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Types of Inflation

• Demand Pull Inflation: Inflation created and sustained by excess of aggregate demand for goods and services over the aggregate supply. In other words, demand pull inflation takes place when increase in production lags behind the increase in money supply.

• Cost Push Inflation: Inflation which is created and sustained by increase in cost of production which is independent of the state of demand (e. g., trade unions can bargain for higher wages and hence contribute to inflation).

• Stagflation In this type, there is fall in the output and employment levels. Due to various entrepreneurs have to raise the price to maintain their pressures, the margin of profit. But as they only partially succeed in raising the prices, they are faced with a situation of declining output and investment. Thus, on one side there is a rise in the general price level and on the other side, there is a fall in the output and employment.

• Hyper Inflation is Very rapid growth in the rate of inflation in which money loses its value to the point where alternative mediums of exchanges-such as barter or foreign currency are commonly used. Also called Galloping Inflation.

Measurement of Inflation

• Inflation is measured by general price index. General price index measures the changes in average prices of goods and services. A base year is selected and its index is assumed as 100 and on this basis price index for the current year is calculated. If the index of the current year is below 100, it indicates the state of deflation and on the contrary, if index of the current year is above 100 it indicates the state of inflation.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Wholesale Price Index (WPI)

▪ It measures the change in wholesale prices on weekly basis. On the basis of weekly indices average annual WPI is worked out. Average annual wholesale prices of the base year (assumed as 100).

Deflation

Deflation is that state in which the value of money rises and the price of goods and services falls.

The state of deflation may appear in the economy due to following reasons

• When the Government withdraws money from circulation.

• When Government imposes heavy direct taxes or takes heavy loans from the public (voluntary or compulsory or both).

• When the Central Bank sells the securities in open market (which reduces the quantity of money in circulation).

• When the Central Bank increases the Bank rate (which curtails the quantity of credit in the economy).

Measures of Checking Deflation

• To increase money supply.

• To promote credit creation by the banks.

• Curtailment in taxes so as to increase the purchasing power of people.

• To increase the public expenditure and to increase the employment opportunities in the economy.

• To increase the money supply in circulation by repayment of old public debts.

• To provide economic subsidy by the government to the industrial sector of the economy.

Money Stock Measures in India

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• On the recommendations of the second working group on money supply, RBI introduced a series of money stock measures in India since 1970-71, which are

M₀ = High-powered money = Monetary base = Money with the Public + Reserves of banks with RBI

 (i) M₁ → + Money with the Public (currency notes and coins) + Demand deposits of banks (on current and saving bank accounts) + Other demand deposits with RBI.

(ii) M₂ → M₁ + Saving bank deposits with Post-offices.

(iii) M₃ → M₁ + Term deposits with the bank.

(iv) M₄ → M₂ + All deposits of Post-offices.

• M₁ measure represents the most liquid form of money among four money stock measures adopted by RBI. As we proceed from M₁ to M₄, the liquidity gets reduced. In other words, M₄ possesses the lowest liquidity among all these measures.

• M₃ is the most important component among all money stock measures which is generally termed as ‘Broad Money’.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Cheap Money Policy and Dear Money Policy

• Cheap Money Policy is that monetary policy in which loans and advances are made available on low interest rate and easy terms to industries, businessmen and consumers. Cheap Money Policy increases the inflation rate in the economy and it is generally adopted to get rid of deflationary tendencies in the economy.

• On the other hand, Dear Money Policy is adopted to squeeze the credit utilization facilities in the economy. Under Dear Money Policy, interest rate is increased which helps in controlling inflation in the economy.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Union Budget

• The budget is an extension account of the government’s finances, in which revenues from all sources and expenses of all activities undertaken are aggregated.

• The Finance Minister Presents the Union Budget every year in the Parliament that contains the Government of India’s revenue and expenditure for one fiscal year, which runs from 1st April to 31st March.

• In the constitution of India the term Budget is no where used. It is rather mentioned as Annual Financial statement under Article 112 comprising the revenue budget capital Budget and also the estimates for the next fiscal year called budgeted estimates.

Tax Structure

Tax is a compulsory payment by the citizens to the government to meet the public expenditure. It is legally imposed by the government on the taxpayer and in no case taxpayer can deny to pay taxes to the government.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Direct Tax A direct tax is that tax, which is born by the person on whom it is levied. A direct tax cannot be shifted to other person.

 • Indirect Tax Indirect taxes are those taxes, which have their primary burden or impact on one person. But that person succeeds in shifting his burden on to others.

Financial Relations between Centre and States

• Article 264 and Article 293 explain the financial relations between the Union and State Government.

• Although the states have been assigned certain taxes, which are levied and collected by them, they also have a share in the revenue of certain union taxes and there are certain other taxes, which are levied and collected by the Central Government, but whole proceeds are transferred to the states.

• The Constitution provides residuary powers to the centre. It makes a clear division of fiscal powers between the Centre and the State Government.

A. List I of Seventh Schedule of the Constitution enlists the Union Taxes, which are

B. List II of Seventh Schedule enlists the taxes, which are within the jurisdiction of the States

C. Apart from taxes levied and collected by the State the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. These provision fall into-various categories.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Important Industries of your INDIA

Iron and Steel Industry

• First Steel industry was set up at Kulti (West Bengal) ‘Bengal Iron Works Company’ in 1870.

• First large scale steel plant TISCO was set up at Jamshedpur in 1907 followed by IISCO at Burnanpur in 1919. Both belonged to private sector. Cod

• The first public sector unit was ‘Vishveshvarayya Iron and Steel Works’ at Bhadrawati.

• All these are managed by SAIL. (At present all important steel plants except TISCO, are under Public Sector).

• Steel Authority of India Limited (SAIL) was established in 1974 and was made responsible for the development of the steel Industry.

• Bhilai, Durgapur and Rourkela were established during the 2nd Five Year Plan. Bokaro was established during the Third while the steel plants at Salem, Vijai Nagar and Vishakhapatnam were established in the 4th Five Year Plan.

• Presently India is the 5th largest steel producing country in the world, ranked behind China, Japan, US, and Russia in that order.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Cotton and Textile Industry

• Oldest industry of India and employs largest number of workers.

• It is the largest organised and broad-based industry which accounts for about 4% of GDP, 20% of manufacturing value added and one-third of total export earnings.

• The first Indian modernised cotton cloth mill was established in 1818 at Fort Gloaster near Calcutta, but this mill was not successful. The second mill named Bombay Spinning and Weaving Co. was established in 1854 at Bombay by KGN Daber.

Cement Industry

• Production of cement was started in 1904 at Madras, but the foundation of stable Indian cement industry was laid in 1914 when the Indian Cement Company Limited started production at Porbander in Gujarat. During planning period, the cement industry has recorded continuous growth. India became not only self-reliant at the end of 7th Plan, but also started export of cement. At present, cement is the most advanced industries in the country.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Jute Industry

• Jute industry is an important industry for a country like India, because not only does it earn foreign exchange, but also provides substantial employment opportunities in agriculture and industrial sectors.

• Its first modernised industrial unit was established at Reshra in West Bengal in 1855.

Sugar Industry

• Sugar industry is the second largest industry after cotton textile industry among agriculture based industries of the country. As on 30 Sept 2006, there were 582 installed sugar factories in the country as against 138 during 1950-51. This industry provides not only employment to a substantial number of persons, but also holds the potentialities of developing other industries related to its by-products

• India is the largest consumer of sugar and the second largest producer of sugar with a share of over 15% of world sugar production. Sugar industry is the second largest agro-based industry in India after textiles.

• Maharashtra contributes over one-third of the total sugar output, followed closely by Uttar Pradesh, Tamil Nadu and Karnataka.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Fertiliser Industry

• India is the 3rd largest producer of nitrogenous fertilisers in the world.

• There are, at present, 57 fertilizer units manufacturing a wide range of nitrogenous and complex fertilizers, including 29 units producing urea and 9 units producing ammonium sulphate as a byproduct.

Paper Industry

• The first mechanised paper mill was set-up in 1812 at Serampur in West Bengal.

• The paper industry in India is ranked among the top 15 global paper industries. The per capita paper consumption in India is still at 5.5 kg, which is far below the global average (nearly 50 kg).

• The Government had completely delicenced the paper industry from 17th July, 1997.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Coal Industry

• The credit for introducing coal in India goes to the two English men Sambhar and Hatley. They took permission from East India Company’s Chief Warren Hastings in 1774 for excavating coal from Raniganj and Veerbhum areas. Their efforts started survey of coal regions. The extraction of coal was started in 1814 in Raniganj area.

• Coal occupies the most important place among available power resources in India. Indian coal industry is a basic industry on which many other industries depend. Coal accounts for about 67% of the country’s commercial requirements. It is also an essential input in steel and So hemical industries.

Silk Industry

• India is the 2nd largest (1st being China) country in the world in producing natural silk. At present, India produces about 18% silk of the word

• India enjoys the distinction of being the only country producing all the five known commercial varieties of silk, viz, Mulberry, Tropical Tasar. Oak Tasar, Eri and Muga (of which the golden yellow muga silk being unique to India).

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Gems, and Jewellery Industry

• India is the largest cutting and polishing centre of diamonds in the world, both in terms of quantity and value. In terms of carat, India’s share in this sector is about 80% of the world market. Gold jewellery and coloured gem segments accounts for about 15% and 5% respectively of India’s gem and jewellery export in value terms.

Chemical Industry

Its turnover is estimated at around US$ 30 billion approx, which is equivalent to about 3% of India’s GDP. In terms of volume, it is 12th largest in the world and 3rd largest in Asia. Within India, it contributes 20% of the Excise revenue to the Government. A substantial proportion of exports from this sector goes to the USA, Europe and other developed nations. The industry has a weightage of about 14% in the index of industrial production and 17.6% within the manufacturing sector.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Petroleum and Natural Gas

• First successful oil well was dug in India in 1889 at Digboi, Asom. At present a number of regions having oil reserves have been identified and oil is being extracted in these regions. For exploration purpose, Oil and Natural Gas Commission (ONGC) was established in 1956 at Dehradun, Uttarakhand.

• The total oil reserves in India have been estimated to be about 13 crore tonnes. Domestic production of oil in India is much less to meet the domestic demand. India currently produces just over 32 million tonne of crude oil against its annual demand of 105 million tonnes meeting only 30.5% of demand from domestic resources.

Oil Refineries

• At present there are 19 refineries operating in the country (17 in Public Sector and 2 in Private Sector). Mangalore Refinery and Petro-chemicals Limited (MRPL), which was a joint sector company, became a PSU subsequent on acquisition of its majority shares by ONGC. Out of 17 Public Sector Refineries 7 each by 7 are owned by IOC Ltd., two each by Chennai Petroleum Corporation Ltd. (a subsidiary of IOCL), Hindustan Petroleum Corporation Ltd and ONGC, one each by BPCL, Kochi Refineries Ltd (a subsidiary of BPCL). Numaligarh Refinery Ltd. (a subsidiary of BPCL) and Bongaigaon Refineries and Petro-chemicals (a subsidiary of IOCL). The private sector refineries belong to Reliance Industries Ltd and Essar Industries.

• Jamnagar refinery in Gujarat is the world’s largest oil refinery

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Oil India Ltd

Oil India Limited (OIL). under the administrative set up of the Ministry of Petroleum and Natural Gas, is a National Oil Company engaged in the exploration, production and transportation of crude oil and natural gas in the country. OIL was incorporated in 1959 as a company with two-third share of Burmah Oil Company and one-third share of Government of India. In 1961, OIL became a joint venture company with equal share of Government of India and Burmah Oil Company. On 14th October 1981, OIL became a Government of India Enterprise, a wholly owned Public Sector Undertaking

 Navratnas

•Navratnas was the title given originally to nine Public Sector Enterprises or PSE identified by the Government of India in 1997 as its crown jewels of the most prestigious PSEs, which allowed them greater autonomy to complete in the global market.

• The number of PSEs having Navratna status has now been raised to 18, the most recent addition being Coal India Limited.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

 List of Navratnas

(i) Bharat Electronics Limited (BEL)

(ii) Bharat Heavy Electricals Limited (BHEL)

(iii) Bharat Petroleum Corporation Limited (BPCL)

(iv) Gas Authority of India Limited (GAIL)

(v) Hindustan Aeronautics Limited (HAL)

(vi) Hindustan Petroleum Corporation Limited (HPCL)

(vii) Mahanagar Telephone Nigam Limited (MTNL)

(viii) National Aluminium Company Limited (NALCO)

(ix) National Mineral Development Corporation (NMDC)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

(x) Power Finance Corporation Limited (PFC)

(xi) Power Grid Corporation of India Limited (PGC))

(xii) Rural Electrification Corporation Limited (REC)

(xiii) Shipping Corporation of India Limited (SCL)

(xiv) Neyveli Lignite Corporation Limited (NLCL)

(xv) Rashtriya Ispat Nigam Limited (RINL)

(xvi) Oil India Limited (OIL)

(xvii) Coal India Limited (CIL)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Maharatnas

In 2009, the government established the Maharatna status, which raises a company’s investment ceiling from ₹1000 crore to ₹5000 crore. The Maharatna firms can now decide on investments of up to 15% of their net worth in a project. The Navaratna companies could invest up to ₹1000 crore without explicit government approval. In terms of turnover, ONGC is the largest PSU in India.

Criteria

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

The six criteria for eligibility as Maharatna are

(i) Having Navratna status.

(ii) Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.

(iii) An average annual turnover of more than ₹20000 crore during the last 3 years. Earlier it was ₹25000 crore.

(iv) An average annual net worth of more than ₹10000 crore during the last 3 years. Earlier it was ₹15000 crore.

(v) An average annual net profit after tax of more than ₹2500 crore during the last 3 years. Earlier it was ₹5000 crore.

(vi) Should have significant global presence/international operations.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

List of Maharatna

(i) Coal India Limited (CIL)

(ii) Indian Oil Corporation Limited (IOCL)  

(iii) National Thermal Power Corporation Limited (NTPCL)

(iv) Oil and Natural Gas Corporation Limited (ONGC)

(v) Steel Authority of India Limited (SAIL)

(vi) Bharat Petroleum Corp Limited (BPCL)

(vii) Gas Authority of India Limited (GAIL)

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Miniratnas

In addition, the Government created another category called Miniratna. Miniratna can also enter into joint ventures, set subsidiary companies and overseas offices, but with certain conditions,

Category-I Miniratna

This designation applies to PSEs that have made profits continuously for the last three years or earned a net profit of ₹ 30 crore or more in one of the three years. These miniratnas are granted certain autonomy like incurring capital expenditure without government approval up to ₹ 500 crore or equal to their networth, whichever is lower. Currently there are 51 miniratna in category-I.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Category- Il Miniratna

This category includes those PSEs which have made profits for the last three years continuously and should have a positive networth. Category-II miniratnas have autonomy to incurring the capital expenditure without government approval up to ₹300 crore or up to 50% of their whichever is lower Currently there are 14 miniratnas in category-II.

International Organisations

An International Organisation has been defined as a forum of cooperation of Sovereign States based on multilateral international agreement, and comprising of a relatively stable range of participants. The fundamental feature of which is the existence of permanent organs with definite competences and powers acting for the carrying out of common aims.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Bretton Woods Conference

The Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from 1st to 22nd July, 1944, in Bretton Woods, New Hampshire, to agree upon a series of new rules for the post (World War II) International Monetary System.

The two major accomplishments of the conference were the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) also known as World Bank.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

World Bank

Since, its inception in 1944, the World Bank has expanded from a single institution to a closely associated group of five development institutions. Their mission evolved from the International Bank for Reconstruction and Development (IBRD) as facilitator of post-war reconstruction and development to the present-day mandate of worldwide poverty alleviation in close coordination with the International Development Association and other Members of the World Bank Group. On 1st July, 2012, Jim Yong Kim became the 12th President of the World Bank Group.

Reconstruction remains an important part of World Bank work. However, at today’s World Bank, poverty reduction through an inclusive and sustainable globalisation remains the overarching goal of their work.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

International Monetary Fund (IMF)

International Monetary Fund (IMF) was established along with the IBRD at the Conference of 44 nations held at Bretton Woods, New Hampshire, USA in July 1944. The IMF came into formal existence in December 1945, when its first 29 member countries signed its Article of Agreement. It began operations on 1st March, 1947. At present, 188 nations are Members of IMF.

India is a founder Member of the IMF. Finance Minister of India is the Ex-officio Governor on the Board of Governors of the IMF, which is the highest decision making body of the IMF RBI Governor is the alternate Governor at the IMF

The IMF’s primary purpose is to ensure the stability of the International Monetary System-the system of exchange rates and international payments that enables countries (and their citizens) to transact with one another.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

World Trade Organisation (WTO)

The World Trade Organisation (WTO) is the only global International Organisation dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters and importers conduct their businesses smoothly.

The members of the World Trade Organisation (WTO) agree to accord MFN status to each other. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions over 75% of WTO members are developing countries. WTO membership allows them access to developed markets at the lower tariff rate.

TRIPS (Trade Related Aspects of Intellectual Property Rights)

The 1995 TRIPS Agreement provided for both Product patents and Process patents. Product patents are meant to protect the individual product, while Process patent protect the process used to create the product. The agreement gave developing countries 10 years to enact laws to protect intellectual property. Thus, India enacted its Patents (Amendment) Act in 2005 to confirm to the agreement. Developed countries on the other hand had to enact laws in 1995 itself. Under the agreement, protection to patents had to be provided for 20 years. TRIPS agreement is administered by WTO.

General Agreement on Trade in Service (GATS)

GATS was one of the three agreements signed in 1995, along with AOA and TRIPS. It provided for regulations on International Trade in services for the first time, which were not there even in GATS. GATS negotiations are conducted among nations bilaterally on the basis of requests and offers.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

International Labour Organisation (ILO)

The International Labour Organisation emerged with the League of Nations from the Treaty of Versailles in 1919. It was founded to give expression to the growing concern for social reform after World War I and the conviction that any reform had to be conducted at an international level. The ILO has generated such hallmarks of industrial society as the eight-hour working day, maternity protection, child labour laws and a range of policies, which promote workplace safety and peaceful industrial relations.

OPEC

It is the Organisation of the Petroleum Exporting Countries. It is an oil cartel whose mission is to coordinate the policies of the oil-producing countries.

The goal is to secure a steady income to the member states and to secure supply of oil to the consumers.

FAO

The Food and Agriculture Organisation (FAO) is an agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equal to negotiate agreements and debate policy.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

Organisation for Economic Cooperation and Development (OECD)

It is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It is a forum of countries committed to democracy and free market economy. It provides a platform to countries to compare policy experience, seek answers to common problems, identify good practices and coordinate domestic and International Policies of its members. Its headquarter is located in Paris, France. OECD also publishes and updates a model tax convention that serves as a template for bilateral negotiations regarding tax coordination and cooperation. Since 1998, OECD has also led a charge against harmful tax practices, principally targeting the activities of tax havens.

Asian Development Bank (ADB)

The Asian Development Bank was established following the recommendations of the United Nations Economic and Social Commission for Asia and the Pacific. It was formed to foster economic growth and cooperation in the region of Asia and the Pacific and to contribute to the acceleration of economic development of the developing countries of the region. The Asian Development Bank (ADB), an International Partnership of 67 member countries, was established in 1966 with its headquarters at Manila, Philippines. India is a founder member.

EXIM (Export and Import Bank)

 It is established in January 1982. Recognising the important role of exports in maintaining the viability of external sector and in generating employment, RBI had sought to ensure adequate availability of concessional Bank Credit to exporters. Main function of EXIM is to promote export and curtail import.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

IBSA (India- Brazil- South Africa)

The IBSA is a international group for promoting international cooperation between India, Brazil and South Africa. The main objective of IBSA is to promote South-South cooperation and build consensus on the issue of international importance. In 2013, host country is New Delhi of IBSA.

G-24

The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) was established in 1971.

The purpose of the group is to coordinate the position of developing countries on monetary and development issues, particularly issues on the agendas of the International Monetary and Financial Committee (IMFC) and the Development Committee (DC) and to ensure increased representation and participation of developing countries in negotiations on the reform of the International Monetary System.

Asia-Pacific Economic Cooperation (APEC)

Asia-Pacific Economic Cooperation or APEC is the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. APEC is the only Inter-governmental grouping in the world operating on the basis of Non-binding commitments, open dialogue and equal respect for the views of all participants.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

BRICS

In economics, BRICS is an acronym that refers to countries Brazil, Russia, India, China and South Africa which are all deemed to be at similar stage of newly advanced economic development. In 2010, South Africa began efforts to join the BRIC grouping and the process for its formal admission, began in the August that year. South Africa officially became a member nation on 24th December, 2010 after being, formally invited by the BRIC countries to join the group. The group was renamed BRICS-with the ‘S’ standing for South Africa to reflect the group’s expanded membership.

D-8

The Developing 8 (D-8 or Developing Eight) is a group of developing countries with large Muslim populations that have formed and economic development alliance. It consists of Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.

The objectives of D-8 Organisation for Economic Cooperation are to improve member states position in the global economy, diversify and create new opportunities in trade relations, enhance participation in decision-making at international level and improve standards of living. D-8 is a global arrangement rather than a regional one, as the composition of its members reflects.

IFAD

The International Fund for Agricultural Development (IFAD) is a specialised agency of the United Nations dedicated to eradicate rural poverty in developing countries. It was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

South Asian Association for Regional Cooperation (SAARC)

It is an organisation of South Asian nations, founded in December, 1985 and dedicated to economic, technological, social and cultural development emphasising collective self-reliance. Its seven founding members are Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. Over the years, the SAARC members have expressed their unwillingness on signing a free trade agreement. Though, India has several trade pacts with Maldives, Nepal, Bhutan and Sri Lanka, similar trade agreements with Pakistan and Bangladesh have been stalled due to political and economic concerns on both sides. India has been constructing a barrier across its borders with Bangladesh and Pakistan.

Association of South-East Asian Nations (ASEAN)

It was established on August 8, 1967, in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

SAFTA and SAPTA

The South Asian Free Trade Area or SAFTA is an agreement reached on 6 January, 2004 at the 12th SAARC Summit in Islamabad, Pakistan. It created a free trade area. of 1.6 billion people in Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. In December, 1991, the Sixth Summit held in Colombo approved the establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a South Asian Preferential Trading Arragement (SAPTA) by 1997. Given the consensus within SAARC, the Agreement on SAPTA was signed on 11 April, 1993 and entered into force on 7 December, 1995 well in advance of the date stipulated by the Colombo Summit.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

European Union

The European Union (EU) is an economic and political union of 28 member states that are located primarily in Europe. The European Union received the 2012 Nobel Peace Prize for having “contributed to the advancement of peace and reconciliation, democracy, and human rights in Europe.” On 1 July, 2013, Croatia became the 28th EU member.

G-20

It comprises 19 countries namely Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, the Republic of Korea, Turkey, the United Kingdom, the United States of America and the European Union. The EU is represented by the rotating Council Presidency and the European Central Bank is the 20th member of G-20. India’s stand on Mutual Assessment Process (MAP) for increasing imbalances between surplus and deficit Economics in the Seoul conference in 2012 was finely endorsed by all the nations.

Financial Action Task Force (FATF)

It is an International Inter- governmental Body responsible for setting global standards for anti- money laundering and combating financing of terrorism. Its Secretariat is located at the headquarters of OECD in Paris. India became a observer of FATF in 2006 and subsequently the 34th full member in 2010. India agreed to implement short, medium and long range reforms related to anti-money laundering and financing of terrorism to get the membership.

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

G-8

The Group of Eight (G-8) is forum for the governments of eight of the world’s largest national economies as nominal GDP with higher HDI. The forum originated with a 1975 summit hosted by France that brought together representatives of six governments. France, the Federal Republic of Germany, Italy, Japan, the United Kingdom and The United States, thus leading to the name Group of Six or G-6. The summit became known as the Group of Seven or G-7 in the following year with the addition of Canada.

G-8+5

This is a political term used to describe an international group, which consists the G-8 nations, plus the five lending emerging economies (Brazil, China, India, Mexico, and South Africa).

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

ALSO VISIT:

Also study:	Also study:	Also study:
MUGHAL EMPIRE HISTORY	NDA GEOGRAPHY MCQS ON CYCLONES	INDUS VALLEY CIVILIZATION
NDA Syllabus 2022	NATIONAL DEFENCE ACADEMY & NAVAL ACADEMY	MCQs on Asian Games
English Comprehension Passage	GAT / NDA Test Booklet of (GAT) Paper I 2017	NDA Test Booklet of Maths Paper I 2017
GAT (General Ability Test) NDA Test Booklet of (GAT)	LARGEST, LONGEST AND HIGHEST IN INDIA	LIST OF FIRST WOMEN IN INDIA
Binomial Theorem (Mathematics)	Questions on Nuclei (Physics)	Questions on ATOM
NDA Question Paper Mathematics	Dual Nature of Matter	Properties and Solution of Triangles
System of Particles and Rotational Motion	MCQs On GP Geometric Progression	TOPPERS TIPS TO CRACK NDA EXAM
Tips for Interview	NDA  EXAM  INTRODUCTION	Important Questions on Oscillations
Dual Nature of Matter

DOWNLOAD MOBILE APPLICATION TO LEARN MORE: NDA ECONOMICS NOTES

• Facebook
• Instagram
• Telegram
• YouTube
• Link