INDIAN ECONOMY

Introduction: -
Meaning of Economics : The term ‘economic’ comes from the Greek term
Oikonomous( oikos- house & nomous- custom or law), that means “Rules of
Household”. Economic is the social science that deals with economic activities in
the process of production, consumption & distribution of goods & services in
the society.
Branches: Traditionally two main branches( Micro & Macro) .
Micro – Individual level
Macro- Overall economy .Ex- State, nation, country & world levels.
Types of Economies : Depends on the Govt. involvement, it has been categorized. Some
are as mentioned below-
i. Traditional- Govt. involvement ( little). Ex- Ethnic/Tribal society ,Economic
activities are family/community based for communal economic gain than
individual.
ii. Free market Economy- Govt. interference(Less). ex- Local market situation with
private ownership/firms. They decide their sailing price according to customer’s
wills & profits.
iii. Command economy- Completely under govt. control.
iv. Mixed Economy- Combination of public sector &private sector units. Here Govt.
is the decision maker for public sector & individuals. Business men make
decisions for private sector. Ex- India, Russia& UK.
v. Open Economy- Market is free from trade barriers, is said to be open. Govt. has
the freedom to pursue it’s own economic policies.
vi. Closed Economy- No trade or trade area connection. Govt decides /facilitates
everything.
vii. Capitalist Economy- based on private or corporate ownership/competition.
Govt. does not interfere much.
viii. Socialist Economy- Production are socially owned/ by a cooperative group just
to meet their needs not profit , a type of communism. Ex- china & Cuba.
Sectors of an Economy : Traditionally divided into three:-
i. Primary :- Exam-Agriculture / Farming, mining, forestry, fishing , hunting
sectors etc( Production of raw materials/ basic foods /goods by extraction
or collection of natural resources.
ii. Secondary :- Production of finished goods (ex- Sugar from sugarcane,
manufacturing, textile, shipbuilding, construction etc.) , also called
industrial sector
iii. Tertiary :- Service sector ( provides service to the general population & to
the business). Ex- Teachers, doctors, farmers, washermen, barbers,
 cobblers, lawyers, call centres, banking, tourism, transportation,
entertainment , software companies etc.
Comparing the 3 sectors:

 The value of final goods & service produced in each sector during a particular
year provides the total production of the sector for that year.
 The sum of production in the three sectors gives GDP(Gross Domestic Product)
of a country. So, GDP is the value of all final goods & services produced within
the geographical boundaries of a country during a particular year.
 Measuring GDP is by Union Govt. Now it is Rs. 148.2 lakh crore (2021).Ministry
of Statistics & programme implementation is responsible for GDP calculation.
 Formula of GDP: C+I+G+NX( C-consumption, I-Investment, G-Government
Spending, NX- Net Export / Exports- Imports)
 GDP- Countries economic health.
 GNP-Gross National Product(It is the market value of all products and service
produced in one year of a country. GNP= GDP + X-M( x- Export, M- Import)
 Difference: In GDP , Goods & Services produced in a country by the residents &
foreigners . Whereas in GNP, the production of foreigners is not included ,
while the production of national outside the country is included.)

Other sectors-
i. Quaternary( Intellectuals & knowledge based activities. Ex- research
&development
ii. Quinary( Highest levels of decision making –Ex – top officials of govt., universities
etc.
Classification of countries based on Economic Activities : i. Developed country( High
GDP & HDI etc, ii. Developing country ( low GDP& HDI etc)& iii. Least developed country
(Lowest HDI according to UNO).

UNDP – United Nations Development Programme introduced the HDI in it’s first Human
Development Report(HDR) under the supervision of Mahbub-Ul-Haq in 1990.It
constituted three factors; 1. Life Expectancy Index 2. Educational Attainment Index & 3.
Standard of Living Index.

Other Index have been taken into action by UNDP; GII(Ge nder Inequality Index),
GDI( Gender Development Index) ,MPI(Multidimensional Poverty Index), Gross National
Happiness (GNH by Bhutan King Jigme Singye Wangchuck), GHI(Global Hunger INDEX) ,
Green GDP( index of economic growth with the environment) , SDI( Sustainable
Development Index) , Millennium Development Goals 2020 (8 MDGs - Eradicate
extreme poverty & hunger, Universal Primary Education, Gender equality & empowering
women, reduce

Child mortality, Improve maternal health, Combat HIV/AIDs , malaria, & other
diseases & Ensure Environmental sustainability).

Economic Planning in India

On 15th August India woke to a new dawn of freedom. The leaders of Independent
India thought of a suitable economic system for our country( as there are prevalence of
different types of economic system). India adopted mixed economy method.
History of Planning-
!934- M visvesvaraya, a noted engineer & politician attempted to initiate economic
planning in his book “ planned Economy “ for India.
1938- National Planning commission was set up under the chairmanship of J Nehuru by
the INC.
1944- Bombay plan made by 08 industrialists & Gandhian plan was given by Shriman
Narayan Agrawal( decentralization, agriculture, development, cottage industries etc.
1945 –People’s plan by MNRoy

1948 – The Industrial Policies( Resolution of 1948 was made for promoting of
Indian goods/ controlling of Export& Import values)
1950- The planning commission set up with the PM as it’s Chairperson.
Under this a Five year plan was planned with specific goals ; i. growth, ii.
modernization, iii. self reliance and; iv. equity. It is a non-political & non-
constitutional body which makes recommendations to the govt.
1952- National Development Council(NDC)- Is only concerned for approval of
Five Year Plan, headed by PM and consisted of the central ministers, Chief
Ministers, Lt.Governers of UTIs, Members of Planning Commission. Secretary
of PC is acts as the Secretary of NDC.
LPG Strategy- During PM Narasimha Rao time, then Finance Minister
Dr.Manmohan Singh introduced this( Liberalization, Privatization &
Globalisation).Allowed FDI to boost economic growth.
23rd January 2003- India Vision2020 ( Presented by Mr.Shyam Prasad Gupta)a
member of Planning Commission.
01st January 2015 - NITI( National institution for Transforming India) Aayog
was established by Govt to replace Planning Commission. Chairman –PM and
Vice Chairman( Arvind Panagasiya).
Sub –group of NITI Aayog : PM Narendra Modi formed a sub-group, taking
all Chief Ministers under this group & suggested for rationalization of 66
centrally funded schemes.
 Also set up sub-groups on skill development & Swachh Bharat Abhiyan.
Formulation of Fifteen Year Plan/ NITI Aayog - Based on the reports of
steering committees, working groups, the States & Central Ministries, The NDC
approves & then recommends the plans. PM has directed it’s member to
formulate a fifteen year programme road map of NITI Aayog. A thinktank
that will advise Govt. in planning policy.
Chair person – PM Modi, VC – Arvind Panagaria ,Governing Council – CM of
all States , Minister of State for planning –Rao Inderjit Singh , CEO, Members –
3
Aspirational districts – A total 117 Aspirational districts have been identified
based upon composite indicators of Health & Nutrition, Education,
Agriculture, water resources, Financial inclusion, & skill development & basic
infrastructure which have an impact on HDI.

Five year Plan: ( Ref-book)

First plan- (1951-56) started. Now we are under twelfth Five Year
Plan( 2012-17).
Focus areas of 12th plan ( 14 areas : energy, transport, natural
resources ,rural transformation, manufacturing sector, health sector,
education & skill development, social & regional equity, urbanization, science
&technology, tourism hospitality &construction, governance &innovation.

NCF (National Commission on farmers):-

Was appointed in 2004 under the chairmanship of Dr. MS Swaminathan.
The commission suggested an Agricultural renewal Plan, has five components;
i.soil health enhancement/dry farming, ii. irrigation, iii. creation of agriculture
risk fund , iv. technological reforms & assured &remunerative marketing.
Besides, Risk stabilization Fund, MIS(Market Intervention Scheme)& creation
of Pani panchayats.
NCP( National Seeds Policy,2002)- Protection of seeds.
PMKSY(Pradhan Mantri Krishi Sinchi Yojana)- To enhance firm productivity.
Govt. has decided to spend Rs. 50,000/-.
NRAA( National Rainfaid Area Authority(2006)- up gradation of country’s dry
land.
NSC (National Seed Corporation) - Seed Bank (1999- 2000 was established.-
Food Security:
The World Food Summit1996 states that sufficient, safe & nutritious
food should be accessible to all people , at all times for an active& healthy life.
TPDS(Targeted Public Distribution System)/PDS June1997-
Is operated under joint responsibility of Central &State Governments.
Central Govt. through FCI supplies to State Govt . The respective state govt.
through (FPS) fair price shops ,based on Poverty line & ration card provides
rations; wheat, rice, sugar& kerosene. In some states/UTs oil, salt, spices etc
also are given.
FCI( Food Corporation of India-1965)
Antyodaya Anna Yojana(December2000)- ( no man should sleep in hunger )
identification of 10 million poorest of poor beneficiaries HHs( 25kg food grains
per family per month at a subsidized rate of R.2 /- per kg for wheat & Rs. 3
per kg for rice.
NFSM(National Food Security Mission)2007-08- Increase production, create
employment opportunities & boost confidence of farmers.
NFSA(National Food security Act,2013-
 Whole India
 HH- 5kg food grains per person per month & Antodaya HHs (35kgs per
month).
FPI( Food Processing Industry)- India is the 3rd largest food producing country
after China & US.
NAFED(National Agricultural Co-operative marketing Federation)- Deals in
procurement & distribution of export & import agri. products.
TRIFED( Tribal Co-operative Marketing Development Federation )of India
Limited.
NAIL(National Agricultural Insurance Scheme-1999-2000)-Financial support to
farmers.
*Major Agriculture Scheme: RKVY( Rashtriya Krishi Vikas Yojana)launched in
2007-08 ( green revolution)
PMFBY(Pradhana Mantri Fasala Bima yojana)- PM Modi lunched this
Scheme(boost farming sector).
SHCS(Soil Healthcard Scheme - to check bad soil condition.
ICAR( Indian Council of Agricultural Research)- Established in 1929
NMSA ( National Mission for sustainable Agriculture)- 12th Five year plan
(transforming agriculture in to an ecological sustainable productive system).
MSP(Minimum Support price)
Animal Husbandry, Dairying & Fisheries : (11th Five Year Plan)
 India ranks 1st in milk production in the world.
 NPCBB(National Project for Cattle & Buffalo Breeding ) was launched in
2000.
 PDS(Poultry Development Scheme)
 Marine Fishing Policy(2004)

Agriculture & Industry

Green Revolution – Agriculture Field
 Credit goes to Nobel Laureate Dr.Norman Borlaug & Dr.MS Swaminathan
for their initiatives.
 Indian Green Revolution is associated with the use of HYV(High Yielding
Variety) seeds, chemical fertilizer & new technology which led to a sharp
rise in agricultural production.
Yellow Revolution-Oil seed Field
 White Revolution/Operation flood-Milk& diary products
Blue Revolution- Fishery
Pink Revolution- Meat processing/Shrimp/prawns
Brown Revolution-Non-conventional energy sources
Grey revolution- Wool
Orange Revolution- Horticulture
Golden revolution- Honey
Golden fibre Revolution-Jute
Silver Fibre Revolution- Cotton
Silver revolution- Egg &poultry
Evergreen Revolution- This concept was given by Dr. MS swaminathan with
emphasis on sustainability. In 2010/11, based on this concept, it insisted on
productivity of ‘rice based cropping systems’ in eastern India( seven states:
Assam, Bihar, Chhatisgarh, Jharakhand, Odisha, Eastern UP& Odisha).
Tricolour Revolution - This was made by PM N.Modi. it has three
components :
i. Saffron Energy Revolution- promotion & better utilization of solar
energy.
ii. White revolution- cattle welfare& further goals of white revolution.
iii. Blue revolution- fishermen’s welfare, cleaning rivers & sea &
conserving water.
India’s position in World Agricultural production:
1st- Total pulses, Jute& Jute fibres& Milk
2nd- Rice, Wheat, Groundnuts, vegetables ,fruits,
Sugarcane, cotton,
3rd- Tea, Eggs, 4th – steal 5th- Meat
Important Industries of India :
1. Iron & Steel Industries -
* 1st steel industry- Kuti, jharia, W.Bengal as “ Bengal Iron Works Company” in
1870.
* 1st large scale steel plant- TISCO at Jamsedpur(WB)1907 & IISCO ,Burnpur
(WB),1919
* 1st public sector unit – vishveshvarayya Iron & steel works ,
Bhadrawati( Karnataka)
Other Public sector Steel Plants:
Raurkela (Odisha) Germany Assistance
Durgapur(WB) British Govt.
Bhilai(MP) Russian
Bokaro (Jharakhand) Russia Govt.
Vishakhapatnam(AP) Russian
Salem(TN) -
Vijay Nagar( Karnataka)
2. Jute Industry : India ranks number one in raw jute& jute goods production.
Number two in export in the world.
i. Reshra (WB.1855)
3. cotton & Textile Industry:
* oldest Industry of India & emplous largest number of workers.
* The first Indian modernized cotton cloth mill was established in 1818 at
Fort Gloaster (Kolcutta). The second mill named “Bombay Spinning & weaving
Co.was established Bombay in 1854 by KGN Daber.
4. Sugar Industry- It is the second largest industry after cotton industry among
agriculture based industries in the country.
*India now is the largest producer &consumer of sugar in the world.
Maharashtra ranks first in production followed by UP.
4. Silk Industry : After China India is the second largest country in
producing natural silk.
5. Petroleum & Natural Gas :
 * 1t oilwell was dug in Digboi ,Assam in 1889.
* For exploration purpose, ONGC(Oil & Natural Gas was established in1956
at Dehradun(Uttarakhand)

Banking Sector in India

Money : consists of currency(bank notes & coins) & bank money.
Measures of Money :
* Money supply is the stock of liquid assets held by public which can be
freely exchanged for goods & services.

* RBI calculates four concepts of money supply , known as money stock

measures or measures of monetary aggregates.

* RBI has given four new monetary measures; M0,M1,M2,M3,M4 & three
liquidity measures L1,L2& L3.

* M0= Currency in circulation+ Bankers( is an employee of a bank or financial

institution) deposit with RBI+ Other deposit with RBI. ( reserve money of RBI),
includes currency in circulation& bankers deposits with RBI

* M1= liquid portion of money supply / physical Currency, coins & assets/
checks, check deposits etc can be converted to cash.

Currency with public+ Demand deposits with Banking system + other

deposits with RBI .

 M2= M1+ Saving deposits of post office savings( near money which
cannot be converted to currency as quickly.
 M3= M1 + M2 + Time deposits with banking system.( near money
 M4= M3 + office savings of Banks (near money)
 L1= M3+ all deposits with post office savings Banks(excluding NSC)
 L2= L1+ FIs+ Tearm borrowing
 L3= L2+ public deposits of non-banking Financial companies
Indian Currency Symbol ( ₹ ): This new symbol was designed D Udaya Kumar,
a Post Graduate of IIT Mumbai , on 15th July 2010.
 The new symbol is derived from Devanagari script “Ra” & the Roman “
R“.
Indian Money Market : Deals ( Organized banking Sector, Unorganized
banking Sector ( ex- Chit funds, money lenders) & sub markets.

Regulatory Body :
SEBI(Securities & Exchange Board of India under SEBI Act,1992 functions as
controlling agency for Stock markets & others.
Call Money Market - Call or notice money is an amount borrowed or lent on
demands for a very short period.
MMMFs(Money Market Mutual Funds )- Scheme introduced by RBI in
April,1992.
CPITAL Market- It is one of the most important segments of the Indian
financial system. It is the market available to the companies to meet their
demands on long –term funds.
Primary market - Example-fresh capitals in form of shares & debentures(fixed
rate of interests).
Secondary market- Stock market( stock exchanges) Ex – Bombay Stock
Exchange(BSE) is the oldest stock exchange in Asia was established in 1875.
NSE( National Stock Exchange)-Nov1992 was incorporated.
Gilt-Edged Market- refers to govt & semi govt securities backed by RBI.
QFI- Qualified Foreign Investor Ex- A person who is residing in a country and
the member of the FATF (Financial Action Task F)
Bank System:
Three types ( Core banking : group of net worked banks, Retail Banking:
transaction directly with consumers & Narrow Banking: also known as safe
banking, it restricts bank to hold liquids.)
1st Bank- Bank of Bengal (1806)
1st commercial Bank ( Awadh Commercial Bank, 1881)
 1895- Punjab National Bank, Lahore
State Bank of India (SBI):-
* It was created in Jan ,1921 by amalgamation of three Presidency Banks;
Bank of Bengal, Bank of Bombay & Bank of Madras & named as “ Imperial
Bank” of India.
* After nationalization in 1955, it’s name was changed to State bank Of India.
*It is the biggest commercial bank in public sector of India.
* It has the largest number of branches( more than 13,000) in the world.
SBI has 06 subsidiaries.
Reserve Bank of India:-
 It is the central bank of the country.
 It was set up on April 1, 1935 with a capital of Rs.5 crore, on the basis of
Hitong Ypung Commission recommendation with the enactment of RBI
Act , 1934.
 It was continued to serve as Central bank to Pakistan , till June,1948.
 It was nationalized on Jan1,1949 it’s first Indian Governer was CD
Desmukh..
Functions:-
 Issuing of notes
 Bankers to the Govt.
 Controller of Credit
 Custodians of Foreign Reserves
 Formulates& administers the monetary policy.
 It represents India at the IMF & WB levels.
 Regulator &supervisor
Role of RBI:- RBI has the sole authority to issue currency notes other than
Rs.1 or coins & coins of smaller denomination. After 20 years in Nov1994,
printing of Rs.1 note has been stopped due to high cost & free capacity to
print currency of higher denomination.
 In November 1994, printing of Rs.1 note was mainly due to highest cost
 Signature of RB I Governor on new 20 Rs.note by Shaktikant Dash.
 New 500 Rs & 2000/- notes ( 08 Nov2016).
  Demonetization- on 08 Nov 2016 Govt. announced demonetization of all
500 & 1000 /- notes of Mahatma Gandhi series.
 Issues of new 500/- & 2000/- notes.
 One rupee note- Except one rupee note RBI has sole right to issue other
currency notes under section22 of the RBI Act.
 The one rupee note is issued by the Ministry of Finance & it bears the
signature of Finance secretary while other notes bear the signature of
RBI Governor. The reason being that this note belongs to the Republic of
India & not to RBI.

Nationalization of banks:-
* In order to have control over banks,14 large commercial banks with turn
over more than Rs.50 crore , were nationalized on July19,1969. The banks
were –
1.The Central Bank of India 2. Bank of India 3. PNB 4. Canara Bank 5. United
Commercial bank 6. Syndicate Bank 7. Bank of Baroda 8.United Bank of India
9. Union bank of India 10. Dena Bank 11. Allahabad Bank 12. Indian Bank 13.
IOB 14. Bank of Maharashtra
* 15th April, 1980 : 06 private sectors banks whose reserves were more than
R200 crore , each were nationalized. These were-
1. Andhra Bank 2. Punjab &Sind Bank 3. New Bank of India 4. Vijaya bank
5. Corporate Bank 6. Oriental bank of Commerce
 In September 1993, the New bank of India was merged with the PNB.
 These nationalized banks , together with Regional Rural Banka(RRBs) ,
came under the category of Public Sector Commercial Banks. The other
kind of commercial banks are Private Sector Commercial banks.
 At present there are19 nationalized banks besides the RBI.

Bharatiya Mahila Bank :

 Former PM Manomohan Singh & UPA Chairperson ,SoniaGandhi
inaugurated India’s first women bank, Bharatiya Mahila Bank in Mumbai
on 19th Nov,2013, birth anniversary of former PM Indira Gandhi.
 The main objective is to focus on the banking needs of women & to
promote their women empowerment.
  This is the only women bank in India & to be operated by women.
 This is the only 1st public sector bank incorporated through an Act of the
Parliament.
IDFC Bank Ltd. - inaugurated by PM Modi in New Delhi. I was granted a
universal banking lisence in July 23,2015 . It is the 1st bank established in
Eastern India & was granted a universal license in July2915.
NHB( National Housing Bank)- Wholly owned subsidiary of the RBI for
housing.
NABARD( National Bank for Agriculture & Rural Development)
Facilitate credit flow for promotion & development of agriculture, small-
scale industries, cottage industries, village industries, handicrafts etc.
IDBI ( Industrial Development Bank of India)-
MUDRA Bank ( Micro Units Development & Refinance Agency Bank)- was
launched by PM Modi on 8th April,2015 . It is public sector bank to provide
loans at low rates to small entrepreneurs & responsible for developing & re-
financing all Micro-Finance Institutions(MFIS) at state level/regional level. It is
addressing three segments with three loan instruments-
* Shishu-cover loans- upto Rs.50,000/-
* Kishor-cover loans above Rs.50,000- Rs.5lakh
*Tarun-covers loans above Rs. 5 lakh –Rs.10 lakh

Export-Import(EXIM)Bank-
Banks Board Bureau(BBB)- Started April2016, acts as a holding company for
state run banks.
New Gold Investment Schemes (5th November ,2015)- The bond is for 08
years.The main objective is to reduce the physical demand of gold. Gold bonds
are issued by RBI on behalf of Govt. of India in rupees & denominated in
grams of gold which are sold to Indians . The minimum & maximum
investment limits are2grams& 500 grms with 2.75% per annum.
Gold Monetisation scheme- BIS(Bureau of Indian Standards certified Collection
Purity Testing Centres(CPTC) to collect the gold from the customer on behalf
of the banks.
Indradhanush ( Rainbow) : To revamp the PSU(Public Sector Units) banks , the
Govt. has launched a seven –point plan for setting up BBB(Bank of Board
Bereau) for overall monitoring of banking & governance.

Insurance
Insurance industry includes two sectors; Life Insurance & General Insurance.
LIC : Initially introduced by Britishers. But was Established- Sept 1,1956 .
Head Office-Mumbai .
Zonal offices – 07( Mumbai, Kolkata,Delhi, Chennai, Kanpur, Hyderabad &
Bhopal)
Oriental Life insurance company was established by a British firm in 1818 at
Calcutta(Kolkata).
Function- The insurance companies collect the little savings of the investors &
then reinvest those savings in the market.
Inflation:
Refers to persistent rise in the general price level in the country over a period
of time. It could be monetary or price inflation. During periods of inflation,
there is an increase of money supply. It is caused due to mismatch between
demand & supply. There are three standard measures of inflations-
 WP(wholesale Price Index- goods average price change)ex- retailer
stage /no consumer involvement
 Consumer Price Index(CPI –ex- industrial sector- retail inflation/ goods &
services bought by consumers)
 GDP deflator-measures the prices of the final goods & services
domestically produced.
 Effects - It’s effect is different on different communities. When price
rises or the value of money falls, some group of society gain, some loss &
some stand in between.

Effects - It’s effect is different on different communities. When price rises or

the value of money falls, some group of society gain, some loss & some stand
in between.
 Public Finance/ Tax System
The study of govt. revenue and expenditure is called as public finance. It is the
study of the financial health of State Government and local bodies in India.
Tax : The Indian tax system is well structured & a three tier federal
structures.; central Govt. State govt. & local municipal bodies. It is legally
imposed by the govt. to the citizens to meet the public expenditure ( Article
246). It is two types ; Direct & indirect. As per the Income Tax Act, 1961, it is
mandatory for citizens to make income tax payments if one’s annual income is
within the payment bracket of income.

Income tax slab- Th e different income tax group based on different income
tax , is called Income tax slab.

Major Central Taxes: Income Tax, Central Goods & Services tax( CGST),,
Custom Duty, Integrated Goods & Services Tax(IGST –charged when
movement of goods & services from one State to other state & revenue is
shared between state Govt & Central Govt )corporation tax, Estate duty,
Terminal taxes on goods & passengers , carried by railway, air/sea, transaction
in stock exchange

Major State Taxes: State Goods & services Tax(SGST) , Stamp Duty &
Registration.

Direct Taxes - Include e taxes on income & property, personal income tax,
corporate tax , estate duty & wealth tax , Gift Tax, land revenue, agriculture
income, estate duty, alchoholic liquors, electricity,

Indirect Tax- Are tho se taxes have their primary burden or impact on one
person, but the final or the real burden has to be borne by a third person.
Examples- sales tax, excise duty ( goods produced within the country), custom
duty ( on commodities of export & imported goods) , VAT ( sales tax of states,
first imposed by Haryana , 1st April20 03) .

*Value added= Total sales – cost of intermediate consumption ). Service tax

( imposed on a person who avails any specified service).
GST(Goods & service Tax)-
implemented on 1st July 2017. Are divided into five different taxslabs for
collection; 0%, 5%, 12%, 18%, & 28%. However, petroleum products,
alchoholic drinks, & electricity are not under GST instead are taxed separately
by individual state Govts as per previous tax system.
 India has adopted t he dual GST model; Central & State
 An integrated scheme of taxation that does not discriminate between
good & services.
 Five key features( two components; Central GST & State GST0).
 Both would be applicable to all transactions of goods& Services except
exempted goods & services.
 It has an empowered committee which has decided to adopt a two –rate
structure; a low rate for necessary items & a standard rate for goods in
general.
 The overall administration will be in respective; Central GST to Centre &
State GST to State GST.

Benefits :
 Simplify tax structure.
 Beneficial to the Corporate, Exporter, Industrial sector, individuals &
companies.
 Increase in Tax Revenues both to the Centre& state.
Miscellaneous terms :
Finance Year - March 31st- April 1st
Budget- The budget is an extensive account of the Govt. finances.
Zero – based budgeting( all budgetary allocations are set to nil at the
beginning of a financial year.
Gender Budgeting- 2004-05( to contribute towards women empowerment.
1st budget – In 1950 by John Mathai during the creation of planning
commission.
2nd - in 1956 by TT Krisnamachari . Finance Minister Morarji Desai
presented maximum( 10) times followed by P.Chidambaram(09 budgets). Mrs.
Gandhi was the first PM & FM to present budget in 1978.
Deficit : A deficit is an amount by which a sum falls short of some amounts.
They are ; Revenue , Fiscal , Budget deficit, Monetized , Gross Fiscal Deficit,
NFD, Primary Deficit & GPD.
Special Economic Zone( SEZ)- Asia’s 1st was set up in Kandla, India 1965. Agri
Export Zone(AEZ)
GATT( General Agreement on Traffic & Trade . It regulates international
trade. First signed on 1947.
WTO – 75 GATT members& the European Communities became the founding
members of the WTO on 1st Jan,1955.
MFPS( Mega Food Park Scheme) in 2008- There are 13 MFPS working.
Policy of Navaratna- Nine public sector enterprises, identified by the Govt.
MSMES( The Micro ,Small & Medium Enterprises)- policy ,2012
Make in India –
 Aims at reviving the job creating sector & manufacturing growth to 10 %.
 Aims to attract foreign companies.
 To create 10 million new jobs annually.
 25 key sectors have been identified ; automobiles,
chemicals,IT,pharmaceuticals, textiles, ports, aviations,leather,tourism,
hospitality, railway etc.
 A dedicated new portal (www.makeinindia.com), has been created to
address the queries.
 Indian embassies around the world became part of this campaign.
Digital India –*Aims at transforming the country into 4 digital empowered
social & knowledge economy.
* It is an umbrella program *Digital locker system aims to minimize the
document into e- document process. *Swachh Bharat Mission (SBM), * e-sign
frame work with Aadhaar authentication.
* Digitize India Platform (DIP) for a large-scale digitation of records in the
country. Bharat Net, a high-speed digital highway to connect all 2.5 lakh GPs
of country.
Start-up –Standup India (Signed by PM Modi). Launched on 16th Jan, 2016. The
Startup India, Standup India initiatives unveil the govt. action plan to support
early-stage start-ups. It celebrates the entrepreneurship spirit of country’s
youth.
Standup India Scheme –
To promote entrepreneurship among SC &ST youths & women on 6th
jan20016.
Pay Commission - 7th pay commission (900 –page report headed by Justice AK
Mathur was presented to Finance Minister, already implemented in 2016.
Types of Budgeting- Zero based Budgeting & Gender budgeting.
Deficit – Revenue deficit & Financial deficit.
GDP = C+I+G+NX ( C- consumption, I- Investment, G-
Govt. Expenditure , NX- Net Export)
Market Price – Actually customers pay or MP= FC+ Indirect Tax- subsidies (FC-
factor cost)
GNP= It is the market value of all products & services produced in one year of
a country . GNP=GDP+X-M .
PCI (Per Capita Income)Is earned per person per area,
Per –capital income of a country = National Income/ Population of a country
Demography
Demography: Demography is a statistical study of human population. Theory
of Demographic transition was given by Frank W Notestein in 1945. India
comes next to China as regards to the size of population, but is seventh in the
world as regards to area. Thomas Robert Malthus was the first economist to
give a systematic theory of population in his book “ Essay on Principle of
Population”.
1st Census- 1871 during the period of Lord Mayo .Since then census is held
after every 10 years.
Census 2011- Is the 15th National Census Survey.. Mr. C Chandramouli was the
commissioner 7 Registrar .The NCS was conducted in 2 phases- house listing &
population.
 India is the second largest population of older(60+) persons in the world.
 NPR( national Population Register) is the register of residents of India so,
that all the Govt, benefits & security will be maintained.
 Aadhar is a12 digit unique number, which is the Unique Identification
Authority of India(UADAI) ,is to be issued to all Indians on a voluntary
basis. It is attached to Planning commission/ NITI Aayog. The first
Chairman is mr. nandan Nilekani.