LAWprep/Sample Notes/CLAT 2009

Concept: National Income

National 1993-94) GDPMP: - Sum total of the market value of all final goods and services produced within the domestic territory of a country during an accounting year (counted without duplication) GNPMP : - GDPMP + Net factor income earned from abroad (In India, GDP>GNP) Depreciation value of consumption of (NDPMP: - GDP Depreciation) NNPMP: - GNP Depreciation (NNP = NDP + Net factor income from abroad). GDPFC: - GDPMP Net direct Taxes (Net direct taxes = Indirect taxes paid = Subsidies received). Therefore GDPPFC = GDPMP Indirect taxes + Subsidies When NNP is obtained at factor cost, it is known as National Income. NI = NNPFC. Therefore NNPFC = NNPMP Indirect taxes + Subsides NI at current Prices: Goods and services are valued at prices prevailing in the current year for which NI is calculated. NI at constant Prices: If goods and services are valued at constant prices i.e. with reference to some base year in past. It eliminates the effect of rising prices. Therefore known as real NI. Per capita income = Total income Total population of the country fixed capital = GDP-NDP income (NI) is calculated by CSO (Central Statistical

Organisation). Base Year is taken as 1999-2000 (From 2005-06). (Earlier

Purchasing power party: PPP Index is constructed by taking into account what a unit of currency can purchase in its own country as compared to what a dollar can purchase in the US of a certain representative internationally traded basket of good s or services. Introduced by International Comparison Program of U.N.

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GNPMP = GDPMP Net Factor income from abroad NDPMP GDPMP Depreciation NNPMP = GNPMP Depreciation GDPFC = GDPMP Indirect taxes + subsidies = GDPMP Net Indirect Taxes NI = NNPFC NNDFGF

Note: Gross Domestic product (GDP), Gross National Product (GNP), Net National Product (NNP), Net domestic product (NDP), Market Prices MP, Factor cost FC

Important Legislations
1951: IRDA (Industries Development and Regulation Act) 1969: MRTP (Monopolies and Restrictive Trade Practices Act) 1973: FERA (Foreign Exchange Regulation Act) 2000: FEMA (Foreign Exchange Management Act) came into force (Sun set Clause) 2002: FEMA became fully operational. It differed from FERA in that the violation under FERA comes under criminal act while FEMA violations are civil offence. COMPETITION ACT 2002 By S.S. Raghvan committee Establishment of a Competition Commission of India (CCI) OTHER PROVISIONS 1. 2. 3. 4. Establishment of a commission to prevent practice having adverse effect on competition. To promote and sustain competition in markets in India To protect the interests of consumers. To ensure freedom of trade carried on by participate in market in India for related matters. Area Covered 1. 2. 3. Prohibition of anti competitive agreements prohibition of abuse of dominance Regulation of Mergers and Acquisitions

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Important Reports With The Institutions That Issue Them

Title World Development Report World Economic Outlook World Trade Report World Investment Report Human Development Report Global Environment Outlook Asian Development Report Economic Survey (India) National Human Development Report Currency and Finance Report Issuing Institution World Bank United Nations WTO UNCTAD World Economic Forum (WEF) UNEP: United Nations Environment Programme Asian Develop Bank Ministry of Finance Planning Commission Reserve Bank of India

Economy: Points to Remember

Bank rate is the rate at which the RBI extends credit to the Commercial Banks. Disinvestment refers to sale of share holding to raise cash. In the Economics the Law of demands means when price rises, demand falls. Scheduled Bank is a bank included in the second schedule of RBI. Signatures on a hundred rupee note is of Governor, Reserve Bank of India. Signatures on a one rupee note is of Finance Secretary. The National Income in India is estimated by the Central Statistical Organization (CSO). White paper is a governments statement on the policy matters. Zero Based Budgeting (ZBB) lays emphasis on both preparing new budget right from the scratch and preparing the budget neglecting the history of expenditure.

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Know Customer Scheme launched by RBI relates to improving the relationship between the Banker and Customer. Adam Smith is known as the father of Economics Arthashastra a book on Indian Economics was written by Kautilya. Money Bill is always presented first in Lok Sabha and then in Rajya Sabha. Bombay Samachar is the oldest existing Newspaper in India. First Asian games were held in New Delhi. J. R. D. Tata is also known as the Father of Civil Aviation in India. Important Books on Economics: Author Karl Marx Adam Smith Work Das Capital Wealth of Nations

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