GOBIND KUMAR JHA 9874411552

Unit – I
Monopoly
FEATURES OF MONOPOLY MARKET:
1. Single Seller:

2. Price Maker:

3. No Close Substitute:

4. Product Differentiation:

5. Dominating in Market:

6. Full Control:

7. Restriction of Entry:

8. Price Discrimination:

PURE MONOPOLY:
A pure monopoly is a market structure where a certain product is produced or sold by a single company. The
following are the characteristics of a pure monopoly:
a) Sole supplier
b) No substitute product
c) No rivals/competitors
In a pure monopoly, there are certain barriers that prevent other players from entering the market. The barriers include
economies of scale, control of resources and legal barriers.

NATURAL MONOPOLY:
A natural monopoly is a type of monopoly that exists typically due to the high start up costs or powerful economies of
scale of conducting a business in a specific industry which can result in significant barriers to entry for potential
competitors. Example of natural monopoly is railroad company.

MARGINAL REVENUE:
Output Price Total Revenue Marginal Revenue
0 14 0 -
1 12 12 12
2 10 20 8
3 8 24 4
4 6 24 0
5 4 20 -4

DEMAND CURVE:
In a monopoly, the demand curve seen by the single selling firm is the entire market demand curve. As the demand
curve is downward sloping, the marginal revenue corresponding to any quantity and price on the demand curve is less
than the price (i.e. Average Revenue)

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SUPPLY CURVE:
In a monopoly, however there is no unique supply curve, there is no definite relationship between the price and the
amount offered for sale. A monopoly firm equates marginal cost with marginal revenue, which is lower than the price.
(MC = MR and MR<AR or P)

MONOPOLY POWER:
Monopoly power (also known as Market Power) refers to a firm’s ability to change a price higher than it’s marginal
cost. Monopoly power typically exists where there is low elasticity of demand and significant barriers to entry.
Learner’s Index of Monopoly Power = (p – MC)/p = 1/e

SOURCES OF MONOPOLY POWER:

The sources of monopoly power include economies of sce, locational advantages, high sunk costs associated with
entry, restricted ownership of key inputs and government restrictions, such as exclusive franchisee, licensing and
certification requirements and parents.

SHORT-RUN EQUILIBRIUM OF A MONOPOLY FIRM:

The conditions for equilibrium in Monopoly are the same as those under perfect competition. The marginal cost is
equal to the marginal revenue and the MC curve cuts the MR curve from below.
Like in perfect competition, there are three possibilities for a firm’s equilibrium in monopoly. These are:
a) The firm earns normal profits – If the average cost = the average revenue
b) It earns super normal profits – If the average cost < the average revenue
c) It incurs losses – If the average cost > the average revenue
In the short run, a monopolist firm cannot vary all it’s factors of production as it’s cost curves are similar to a firm
operating in perfect competition. Also, in the short run, a monopolist might incur losses but will shut down only if the
losses exceed it’s fixed costs. Further, if the demand for his product is high, then the monopolist can also make super
normal profits.

LONG RUN EQUILIBRIUM OF A MONOPOLY FIRM:

In the long run, a monopolist can vary all the inputs. Therefore, to determine the equilibrium of the firm, we need only
two cost curves – the AC and the MC. Further, since the monopolist exits the market if he is operating at a loss, the
demand curve must be tangent to the AC curve or lie to the right and intersect it twice.
In monopoly, on the other hand, long run equilibrium occurs at the point of intersection between the monopolists
marginal revenue (MR) and long run marginal cost (LMC) curves.
There are two alternative cases for the determination of equilibrium in Monopoly:-
a) With normal profits
b) With super normal profits

PRICE DISCRIMINATION:
In monopoly, there is a single seller of a product called monopolist. The monopolist has control over pricing, demand,
and supply decisions. Thus, sets prices in a way, so that maximum profit can be earned.
The monopolist often charges different prices from different consumers for the same product. This practice of
charging different prices for identical product is called price discrimination.

TYPES OF PRICE DISCRIMINATION:

1) Personal: When different prices are charged from different individuals. For example, a doctor charges
different fees from poor and rich patients.
2) Geographical: When the monopolist charges different prices at different places for the same product. This
type of discrimination is also called as dumping.

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3) On the basis of Use: When different prices are charged according to the use of a product. For instance, an
electricity supply board charges lower rates for domestic consumption of electricity and higher rates for
commercial consumption.

DEGREE OF PRICE DISCRIMINATION:

1) First-degree Price Discrimination: Price discrimination in which a monopolist charges the maximum price
that each buyer is willing to pay. In this, consumers fails to enjoy any consumer surplus. First degree is
practiced by lawyers and doctors.
2) Second-degree Price Discrimination: Price discrimination in which buyers are divided into different groups
and different prices are charged from these groups depending upon what they are willing to pay. Railways and
airlines practice this type of price discrimination.
3) Third-degree Price Discrimination: A price discrimination in which, the monopolist divides the entire
market into submarkets and different prices are charged in each submarket. Therefore, third-degree price
discrimination is also termed as market segmentation.

CONDITIONS FOR PRICE DISCRIMINATION:

a) Existence of monopoly
b) Separate market
c) No contact between buyers
d) Different elasticity of demand

SOCIAL COST OF MONOPOLY:

Under monopoly, resources are misallocated causing loss of social welfare. Monopoly results in a social loss because
output is restricted below it’s optimal level, meaning that marginal benefit and marginal cost are not equated.
Traditionally this social loss has measured in terms of the dead weight loss (DWL) of monopoly.

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Unit – II
Imperfect Competition
TYPES OF IMPERFECT COMPETITION MARKET:
There are four types of imperfect markets:-
a) Monopoly (only one seller),
b) Oligopoly (few sellers of goods),
c) Monopolistic Competition (many sellers with highly differentiated product),
d) Monopsony (only one buyer of product).

CHARACTERISTICS/FEATURES OF MONOPOLISTIC COMPETITION:

1) Price differentiation
2) Many firms (large number of sellers and buyers)
3) Freedom of entry and exit
4) Independent decision making
5) Some degree of market power
6) There are many producers and many consumers in the market and no business has total control over
the market price. Producers have a degree of control over price.
7) Consumers perceive that there are non-price differences among the competitors products.
8) Buyers and sellers do not have perfect information (imperfect information)
9) Price makers
10) Blend of competition and monopoly
11) Each firm earns only normal profit in long run
12) Each firm spends substantial amount on advertisement. The publicity and advertisement costs are
known as selling costs
13) The principal goal of the firm is to maximise it’s profits.

EXAMPLES OF MONOPOLISTIC COMPETITION:

Toothpaste, Soap, Air conditioning, Smartphones and Toilet Paper.

KEY DIFFERENCE WITH MONOPOLY:

A monopoly is a single firm with high barriers to entry. Monopolistic competition implies an industry with
many firms, differentiated products and easy entry & exit.

KEY DIFFERENCE WITH PERFECT COMPETITION:

In monopolistic competition, firms do produce differentiated products. Therefore, they are not price takers
(perfectly elastic demand). They have inelastic demand.

DEMAND CURVE IN MONOPOLISTIC COMPETITION:

The demand curve for a monopolistically competitive firm is relatively more elastic than that of a monopoly.
Demand is not perfectly elastic.
Monopolistic competition has a downward sloping demand curve.

SUPPLY CURVE IN MONOPOLISTIC COMPETITION:

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No unique supply curve (as well as the supply schedule) can be drawn. For a firm under imperfect
competition, it is not a question of adjusting output or supply at a given price but of choosing price-output
combination which maximise it’s profits.

MONOPOLISTIC COMPETITION IN SHORT RUN:

❖ Short-run equilibrium for a monopolistically competitive firm is identical to that of a monopoly firm.
❖ The firm produces an output at which marginal revenue equals marginal cost.
❖ Price and average revenue is greater than marginal revenue in monopolistic competition.
❖ Price is also greater than marginal cost.
❖ In short run, the company may earn normal profit or super normal profit or incur loss.
❖ [MR = MC]; [AR > MR]; [P > MC]

MONOPOLISTIC COMPETITION IN LONG RUN:

❖ In the long run, in monopolistic competition any economic profits or losses will be eliminated by
entry or by exit, leaving firms with zero economic profit.
❖ In Long run monopolistically competitive industry earn normal profit only.
❖ A Monopolistically competitive industry will have some excess capacity.
❖ In the long run, companies in monopolistic competition still produce at a level where marginal cost
and marginal revenue are equal.
❖ The demand curve will shift to the left due to other companies entering the market.

OLIGOPOLY:
An oligopoly is an industry dominated by a few large firms. For example, an industry with a firve firm
concentration ratio of greater than 50% is considered a oligopoly.

FEATURES OF OLIGOPOLY:
a) Prices are rigid in oligopoly
b) Demand is inelastic for a price cut but demand is elastic for price increases
c) Kinked demand curve model
d) An industry which is dominated by a few firms. (Few firms and large number of buyers)
e) Interdependence of firms: companies will be affected by how other firms set price and output
f) In an oligopoly, there must be some barriers to entry
g) Differentiated products
h) In an oligopoly firms often compete on non-price competition
i) Oligopoly is the most common market structure

EXAMPLES OF OLIGOPOLIES:
❖ Car industry
❖ Petrol retail
❖ Pharmaceutical industry
❖ Coffee shop retail – Starbucks, Costa Coffee, Café Nero
❖ Newspapers

POSSIBLE OUTCOMES OF OLIGOPOLY:

There are different possible outcomes for oligopoly:-
➢ Stable prices (e.g. through kinked demand curve)
➢ Firms concentrate on non-price competition
➢ Price wars (competitive oligopoly)
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➢ Collusion – leading to higher prices
➢ The objectives of the firms is profit maximization or sales maximization
➢ The degree of contestability i.e. barriers to entry
➢ Government regulations
➢ Price war
➢ Main aim to maximize profit

TYPES OF OLIGOPOLIES:
a) Pure Oligopoly: Here, the oligopolists sell practically homogenous products. This type is found in
steel, copper, cement, petrol and a few other industries.
b) Differential Oligopoly: In such a case, few firms sell similar but not identical products under the
same conditions. It is found in automobiles, tyres, electrical appliances, cigarettes, baby food and a
few other industries.

COLLUSION:
➢ Another possibility for firms in oligopoly is for them to collude on price and set profit maximizing
levels of output. This maximises profit for the industry.
➢ Collusion is illegal but tacit collusion may be hard to spot.
➢ For collusion to be effective, there need to be barriers to entry.
➢ A cartel is a formal collusive agreement. For example, OPEC is a cartel seeking to control the price
of oil.

COLLUSIVE OLIGOPOLIES:
Another key feature of oligopolistic markets is that firms may attempt to collude, rather than compete. If
colluding, participants act like a monopoly and can enjoy the benefits of higher profits over the long term.

TYPES OF COLLUSION:
a) Overt: It occurs when there is no attempt to hide agreements, such as when the firms form trade
associations like the Association of Petrol Retailers.
b) Covert: It occurs when firms try to hide the results of their collusion usually to avoid detection by
regulators such as when fixing prices.
c) Tacit: It arises when firms act together, called acting in concert, but where there is no formal or even
informal agreement.

SWEEZY’S KINKED DEMAND CURVE MODEL:

One of the important feature of oligopoly market is price rigidity. And to explain the price rigidity in this
market, conventional demand curve is not used. The idea of using a non-conventional demand curve to
represent non collusive oligopoly was best explained by Paul Sweezy in 1939. The kink in the demand curve
stems from the asymmetric behavioural pattern of sellers. If a seller increases the price of his product, the
rival sellers will not follow him so that the first seller loses a considerable amount of sales.
On the other hand, if one firm reduces the price of it’s product other firms will follow the first firm so that
they must not lose customers. In other words, every price will be matched by an equivalent price cut. As a
result, the benefit of price cut by the first firm will be inconsiderable. As a result of this behavioural pattern,
the demand curve will be kinked at the ruling market price.

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Unit – III
Factor Price Determination

MARGINAL PRODUCTIVITY THEORY OF DISTRIBUTION:

The marginal productivity theory of distribution was developed by J. R. Clark, at the end of the 19 th century,
provides a general explanation of how the price of a factor of production is determined.
In other words, it suggests some broad principles regarding the distribution of the national income among
the four factors of production. The theory states that the firm employs each fa tor up to that number where
it’s price is equal to it’s VMP. Thus, wages tend to be equal to the VMP of labour, interest is equal to VMP
of capital and so on.

ASSUMPTIONS OF THE THEORY:

a) It assumes that all units of a factor are homogenous.
b) One factor is variable and other factors are constant. (All factors except one are fixed)
c) There is perfect competition in the factor market.
d) There is perfect competition in product market.
e) They can be substituted for each other.
f) There is perfect mobility of factors as between different places and employments.
g) There is full employment of factors and resources.
h) The various units of different fa tors are divisible.
i) Technique of production are given and constant.
j) The entrepreneurs are motivated by profit maximization.
k) The theory is applicable in the long run.
l) It is based on the Law of Variable Proportion.

SOME KEY CONCEPTS:

1) MPP:- The first concept is Marginal Physical Product of a factor. The marginal physical product of a
factor, say labour, is the increase in the total product of the firm as additional workers are employed
by it.
2) VMP:- The second concept is Value of Marginal Product. If we multiply the MPP of a factor but the
price of the product, we would get the value of the marginal product (VMP) of that factor. VMP of a
factor = MPP of the factor X Price of the product per unit.
3) MRP:- The third concept is Marginal Revenue Product (MRP), which is the addition to the total
revenue when more and more units of a factor are added to the fixed amount of other factors. MRP =
MPP X MR under perfect competition.
Under perfect competition, VMP of a factor = MRP of that factor.

CRITICISM OF THE THEORY:

The marginal productivity theory of distribution has been one of the most criticised theories in economics
due to it’s unrealistic assumptions.
1) Units of a factor not homogenous
2) Factors not perfectly mobile
3) No perfect competition
4) Factors not fully employed
5) All factors are divisible
6) Production not the result of one factor
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7) Profit not the main motive
8) Not applicable in the short run
9) Nested on technical progress
10) Supply of factors not fixed
11) Only demand theory
12) No justification for inequalities in income
13) Reward determines productivity

MARGINAL PRODUCTIVITY THEORY OF WAGE:

The marginal productivity theory of wage states that the price of labour, i.e., wage rate is determined
according to the marginal product of labour. This was stated by the neoclassical economists, especially J. B.
Clark in the late 1890s.
The marginal product of labour refers to a company’s increase I total production when one additional unit
of labour is added (in most cases, one additional employee) and all other factors of production remains
constant.
Assumptions of Marginal Productivity Theory of Wage:
The important assumptions of this theory are:-
a) Perfect competition prevails in products market and in labour market.
b) Law of variable proportions operates.
c) The firm aims at profit maximization.
d) All labourers are homogenous and are divisible.
e) Labour is mobile and is substitutable to capital and other inputs.
f) Resources are fully employed.
Criticism of the Theory:
a) In the real world, perfect competition does not exist.
b) Labour can never be homogenous.
c) Perfect t mobility of labour is another unrealistic assumption.
d) The marginal productivity theory of wage ignores the supply side of labour and concentrates only on
the demand for labour.
e) Full employment of resources is another unrealistic assumption.
f) This theory, in fact, is not a wage theory but a theory of employment.
g) Finally, this theory ignores the usefulness of trade union in wage determination.
In view of all these criticism, the marginal productivity theory of wages has become useless.

DEMAND CURVE OF LABOUR:

The demand curve of labour tells use how many workers a business will employ at a given wage rate in a
given time period. In the theory of competitive labour markets, the demand curve of labour comes from the
estimated marginal revenue product of labour (MRPL).
Labour demand curve is explained by the VMPL curve coincides with the MRPL curve. VMPL = MRPL
Curve is the firm’s demand curve for labour. This curve slopes downward because of diminishing marginal
returns.

SUPPLY CURVE OF LABOUR:

In economics, a backward bending supply curve of labour or backward bending labour supply curve, is a
graphical device showing a situation in which as real (inflation corrected) wages increase beyond a certain
level, people will substitute time previously devoted for paid word for leisure (non paid time) and so higher
wages lead to a decrease in the labour supply and so less labour time being offered for sale.

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As wages increase above the subsistence level, there are two consideration affecting a worker’s choice of
how many hours to work per unit of time (usually day, week or month). The first is the substitution or
incentive effect.

WAGE DETERMINATION IN AN IMPERFECTLY COMPETITIVE LABOUR

MARKET:
Wage Determination under Perfect Competition:
Under perfect competition, equilibrium wage rate is determine where demand for labour is equal to supply
of labour. In other words, under perfect competition, a labourer will get wage equal to it’s marginal revenue
productivity in the long run.

Wage Determination under Monopsony:

In case of monopsony, there is only one buyer of a factor of production, which is labour in this case. This
single buyer has no competitor in the market. Therefore, the position of the buyer is very strong as compared
to labour. In this case, the employer would have a control on selling the wages for that particular job.

Demand for Labour under Monopoly:

A monopolist hires labour up to the point where MRPL equals the wage rate. And it employs extra labour so
long as revenue per worker exceeds the wage rate and stop where MRPL – wage rate. And a portion of MRP
curve which lies below the ARP curve is the demand curve of labour.

CONSTITUENTS OF COLLECTIVE BARGAINING:

There are three distinct steps in the process of collective bargaining:-
a) The creation of the trade agreement,
b) The interpretation of the agreement, and
c) The enforcement of the agreement.

FEATURES OF COLLECTIVE BARGAINING:

a) It is a group action
b) It is a continuous process
c) It is a bipartite process
d) It is flexible and mobile and not fixed or static
e) It is dynamic
f) It is a complementary and not a competitive process.

FACTORS DETERMINING THE POWER OF TRADE UNIONS TO RAISE

WAGES:
a) Ability to pay
b) Demand and supply
c) Prevailing market rates
d) Cost of living
e) Bargaining of trade unions
f) Productivity
g) Government regulations
h) Cost of training

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RICARDIAN THEORY OF RENT:
David Ricardo, a classical economist developed a theory in 1817 to explain the origin and nature of
economic rent. Rent is the payment made to landlord for the use of land. Ricardo was of the view that rent is
paid for the fertility of land. Ricardo stated “Rent is the portion of the produce of the earth which is paid to
landlord for the use of the original and indestructible powers of the soil “.
In his theory, rent is nothing but the producer’s surplus or differential gain and it is found in land only.
Ricardo said that “Corn is high not because rent is high but rent is high because corn is high”.
ASSUMPTIONS OF THE THEORY:
a) Rent of land arises due to the differences in the fertility of the soil.
b) Law of diminishing marginal returns.
c) Rent accrues only to land
d) There is tendency to move from most fertile land to the less fertile one.
e) Land on which no rent is earned is known as marginal land.
f) Total cost spent on each piece of land is same. According to Ricardo, rent arises as the difference
between production of Marginal Land (on which zero rent accrues) and superior land.
g) Ricardo assumed that land had only one use to grow corn.

REASONS FOR EXISTENCE OF RENT:

Ricardo offered two reasons for the emergence of rent:-
1) Scarcity Rent:- Land is limited in quantity and thus with the growth of population it becomes scarce
in relation to the demand for it. Thus, rent arises due to scarcity of land as a factor.
2) Differential Rent:- Different pieces of land are not uniform in quality. Hence, with the progress of
society, successively worse qualities are brought under cultivation. The owner of the marginal
quality land gets no rent at all. The Ricardian theory is thus called the Differential Theory of Rent.

CRITICISMS OF THE THEORY:

Ricardian theory had been criticised on the following grounds:-
a) Ricardo considers land as fixed in supply. Of course, land is fixed in an absolute sense but it has
alternative uses.
b) Ricardo's order of cultivation of lands is also not realistic.
c) The productivity of land does not depend entirely on fertility.
d) Ricardo’s assumption if no rent land is unrealistic as in reality, every plot of land earns some rent,
although the amount may be small.
e) Ricardo restricted rent to land only, but modern economists have shown that rent arises in return to
any factor of production, the supply of which is inelastic.
f) According to Ricardo, rent does not enter into price (cost) but from the point of view of an individual
farm rent forms a part of cost and price.

MODERN THEORY OF RENT:

Modern theory of rent is an amplified and modified version of Ricardian theory of rent. It was first of all
discussed by J. S. Mill and after that developed by economists like Jevonus, Parcto, Marshall, Joan
Robinson, etc.
Ricardo in his theory assumed that rent arises only on land but the advocates of modern theory of rent
believed that rent can arise on any factor of production.
According to modern version, rent is a surplus which arises due to difference between actual earning and
transfer earning.
So rent is the extra payment over the opportunity cost (minimum cost which has to be incurred). The scare
factor attracts more rent as the difference in the opportunity cost and actual rent paid is more.
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Rent = Actual Earning – Opportunity Cost

QUASI RENT:
❖ The concept of quasi rent was given by Alfred Marshall. He defined quasi rent as surplus earnings
generated by the factors of production except land.
❖ The earnings from machines and instruments are termed as quasi-rent.
❖ The quasi-rent refers to the income produced when the demand for products increases suddenly.
❖ It is used for a short-period of time. In the long run, all the costs are considered as variable cost. In
long run, the equilibrium can be attained when total revenue is equal to total costs. In such a case,
there is no quasi-rent.

THEORY OF PROFIT:
❖ Profit is a residual income, while return is a total revenue.
❖ Profits may be negative, whereas returns such as wages and interest are always positive.
❖ Profits have greater fluctuations than returns.

EXPLICIT COSTS:
A firm’s explicit costs are the actual cash payments it makes to those who provide resources. For example,
rent is paid on land hired, wages are paid to the employees, interest is paid on capital. In addition to this, a
firm also pays insurance premium and taxes and sets aside depreciation charges.

IMPLICIT COSTS:
Implicit Costs are the opportunity costs of using resources owned by the firm or provided by the firm’s
owners. Implicit costs include:- (a) Rent on entrepreneur’s own land, (b) Interest on his own capital, (c)
Wage of the entrepreneur which he could earn in alternative occupation.

GROSS PROFIT AND NET PROFIT:

Gross Profit = Total Revenue – Total Explicit Costs
Net Profit = Total Revenue – (Total Explicit Costs + Total Implicit Costs)

ACCOUNTING PROFIT AND ECONOMIC PROFIT:

Accounting Profit = TR – (W + R + I – M)
Here, TR = Total Revenue
W = Wages and Salaries
R = Rent
I = Interest
M = Cost of Materials
Economic Profit = Total Revenue – (Explicit Costs + Implicit Costs)
Economic profit is not always positive. It can also be negative, which is called economic loss. Economic
business resources can be better employed elsewhere.

NORMAL PROFIT:
❖ Normal profit is a situation where a firm makes sufficient revenue to cover it’s total costs and remain
competitive in an industry.
❖ In measuring normal profit, we include the opportunity cost of working elsewhere.
❖ Normal profit are included in the cost of production.
❖ Normal profit = Total Revenue – Total Costs

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❖ Normal profit occurs at an output where AR = ATC.
❖ Normal profit implies zero economic profit.

DIFFERENT THEORIES OF DETERMINATION OF PROFIT:

1. Schumpeter's Innovation Theory of Profit: Joseph Schumpeter propounded a theory caller
innovation according to which profits are the reward for innovation.
2. Knights' Uncertainty Bearing Theory: The uncertainty bearing theory of profits, which was
propounded by Prof. Knight. According to the theory, profit is a reward for the uncertainty bearing
and not the risk taking. Knight divided the risks into calculable and non-calculable risks.
INTEREST:
Interest is the reward of parting with liquidity for a specified period.
Gross Interest = Net Interest + Payment of risk + Payment for inconvenience + Cost of administrating
credit
Net Interest = Gross Interest – (Payment for risk + Payment for inconvenience + Cost of administrating
credit)

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Unit – IV
Basic Issues in Economic Development

ECONOMIC DEVELOPMENT:
In economic terms, development has been understood as achieving sustainable rates of growth of income per
capita to enable the nation to expand faster than the population.
A country’s economic development is usually indicated by an increase in citizen’s quality of life. ‘Quality of
life' is often measured using the Human Development Index (HDI), which is an economic model that
considers intrinsic personal factors not considered in economic growth, such as: Nutritional level, health,
sanitation, drinking water, vaccination, education and other such indicators which makes quality of life
better. Thus, we can say economic development is both quantitative as well as qualitative progress.
• Economic Development is the overall well being of the citizens of a country.
• Economic growth on the other hand, is a narrower concept than economic development.
• Economic development is measured as increase in Gross National Product (GNP).

GROSS DOMESTIC PRODUCT (GDP) :

GDP is the market value of all final goods and services produced in a country in a given year. This is
calculated at market prices and is known as GDP at market prices.
There are three different ways to measure GDP:-
1) The Product Method:- In this method, the value of all goods and services produced in different
industries during the year is added up. In other words, it is the sum of gross value added.
2) The Income Method:- The people of a country who produce GDP during a year receive incomes
from their work. Thus, GDP by income method is the sum of all factor incomes. Wages and Salaries
(compensation of employees) + Rent + Interest + Profit.
3) The Expenditure Method:-
GDP by expenditure method at market prices = Consumer Expenditure (C) + Investment in Fixed
Capital (I) + Government Expenditure (G) + Export of goods and services (X) – Imports (M).

GNP:
GNP is the total value of all final goods and services produced within a nation in a particular year, plus
income earned by its citizens (including income of those located abroad), minus income of non residents
located in that country. Basically, GNP measures the value of goods and services that the country’s citizens
produced regardless of their location. The GNP is one measure of the economic development and it is
assumed that higher GNP leads to higher standard of living.
GNP = GDP + Net Property Income from Abroad

GDP AT MARKET PRICE AND GDP AT FACTOR COST:

GDP at Factor Cost = GDP at market price – Indirect Taxes (T) + Subsidies (SU)

NET DOMESTIC PRODUCT (NDP) :

NDP = GDP at Factor Cost – Depreciation

NET NATIONAL PRODUCT (NNP) :

NNP = GNP – Depreciation

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NNP AT MARKET PRICE:
NNP at Market Price = GNP at Market Prices – Depreciation
NNP AT FACTOR COST:
NNP at Factor Cost = NNP at Market Price – Indirect Taxes + Subsidies = National Income

REAL INCOME:
𝑁𝑁𝑃 𝑓𝑜𝑟 𝑡ℎ𝑒 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟 𝑋 𝐵𝑎𝑠𝑒 𝑌𝑒𝑎𝑟 𝐼𝑛𝑑𝑒𝑥
𝑅𝑒𝑎𝑙 𝑁𝑁𝑃 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟 𝐼𝑛𝑑𝑒𝑥

PER CAPITA INCOME:

𝑁𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝐼𝑛𝑐𝑜𝑚𝑒
𝑃𝑒𝑟 𝐶𝑎𝑝𝑖𝑡𝑎 𝐼𝑛𝑐𝑜𝑚𝑒 =
𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
Since, for the purpose of arriving at the Real Per Capita Income:-
𝑅𝑒𝑎𝑙 𝑁𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝐼𝑛𝑐𝑜𝑚𝑒
𝑅𝑒𝑎𝑙 𝑃𝑒𝑟 𝐶𝑎𝑝𝑖𝑡𝑎 𝐼𝑛𝑐𝑜𝑚𝑒 =
𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

METHODS OF MEASURING NATIONAL INCOME:

1) Product Method
2) Income Method
3) Expenditure Method
4) Value Added Method

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Unit – V
Basic Features of Indian Economy

CLASSIFICATION OF INDIAN ECONOMY:

Indian Economy is classified in three major sectors:-
1) Agriculture & Allied Sector: This sector includes forestry and fishing also. This sector is also
known as the primary sector of the economy. But year by year it’s contribution goes on declining and
currently it contributes only 20% of Indian GDP at current prices. It is worth to mention that
agriculture sector provides jobs to around 54% population of India.
2) Industry Sector: This sector includes ‘Mining & Quarrying', Manufacturing (Registered &
Unregistered), Gas, Electricity, Construction and Water supply. This is also known as the secondary
sectors of the economy. Currently it is contributing around 26% of the Indian GDP (at current
prices).
3) Services Sector: Services sector includes ‘Financial, Real estate & professional services, Public
Administration, Defence and other services, Trade, Hotels, Transport, Communication and services
related to broadcasting. This sector is also known as tertiary sector of the economy. Currently this
sector is the backbone of the Indian economy and contributing around 55% of the Indian GDP.

OCCUPATIONAL STRUCTURE:
Occupational structure refers to distribution of working population across primary, secondary and tertiary
sectors of the economy.
Some of the main features of occupational structure in India are as follows:-
1) Agriculture is main occupation
2) Less development of industries
3) Unbalanced
4) Less income
5) Small villages
6) Backward agriculture
7) Increase in the proportion of agriculture labourers
8) Less development of tertiary sector

STRUCTURE CHANGE IN INDIAN ECONOMY:

In order to study the structural change in any economy, one have to analyse the contribution of various
sectors to the national output.
Apart from the growth in quantitative terms, there have been significant changes in India’s economic
structure since independence.
1) Changing sectoral distribution of domestic product
2) Growth of basic capital goods industries
3) Expansion in social overhead capital
4) Progress in the Banking and Financial sector

ISSUE OF SERVICE-LED GROWTH:

The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign
investors flows, contributed significantly to exports as well as provided large scale employment. India’s
services sector covers a wide variety of activities such as trade, hotel and restaurant, transport, storage and

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communication, financing, insurance, real estate, business services, community, social and personal services
and services associated with construction.
The services sector is the key driver of India’s economic growth. The sector has contributed 57.12% of
India’s Gross Value Added at current Price in 2018-19.
The critical issues that have been identified are:-
1) What is the pattern of growth in India’s service sector, i.e., how do different services compare in
terms of their growth rates and shares in GDP, employment, trade and FDI?
2) What explains growth in India’s service sector?
3) What explains the lack of employment growth in the services sector?
4) Can India’s service sector sustain its growth?
5) What are the important external and internal barriers to trade in different services in India?

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Unit – VI (A)
Sectoral Trends and Issues:- Agricultural Sector

PROBLEM OF LOW PRODUCTIVITY:

The main causes of low productivity of agriculture are broadly of three types:-
1. Human Factors:- Human factors are those which are related to training and efficiency of the
farmers.
a) Social atmosphere
b) Pressure of population on land
2. Technical Factors:- Technical factors include techniques and methods of production.
a) Traditional methods of cultivation
b) Old implements
c) Insufficient irrigation facilities
d) Problems of soil
e) Problems of pests and diseases of crops
f) Feeble cattle
g) Lack of credit facility
h) Lack of Hugh Yielding Variety (HYV) seeds
i) Improper marketing
3. Institutional Factors:-
a) Small size of farms
b) Defective land tenure system

GREEN REVOLUTION:
➢ Green Revolution is also called as Wheat Revolution.
➢ Significant break through by way of productivity increase under Green Revolution was achieved in
wheat. This experiment was extended with new wheat and rice varieties.
➢ Green revolution commenced in the year 1966.
➢ Substantial improvement in agricultural productivity was achieved through Green Revolution. The
father of Green Revolution was M. S. Swaminathan.
➢ The introduction of HYV seeds and increased use of fertilizers, pesticides and irrigation –
collectively known as Green Revolution.
➢ The Green revolution within India led to an increase in agricultural production, especially in
Haryana, Punjab and Uttar Pradesh.
➢ Green Revolution is associated with agricultural production.
➢ It is the period when agriculture of the country was converted into an industrial system due to the
adoption of modern methods and techniques like the use of high yielding variety seeds, tractors,
irrigation facilities, pesticides and fertilizers.

LAND REFORMS:
➢ Land reforms is a change in the system of land ownership, especially when it involves giving land to
the people who actually farm it and taking it away from people who own large areas for profit.
➢ The comprehensive land reform policy consisted of:-
a) Abolition of Zamindari and similar intermediary tenures during 1950 – 55.
b) Tenancy reforms
c) Fixation of ceiling on landholdings

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d) Consolidation of holdings.

TENANCY REFORMS:
Tenancy legislations have taken three forms:-
a) Rationalisation and regulation of rent
b) Providing security to tenants, and
c) Conferring rights of ownership for tenants.

ROLE OF RURAL BANKING IN RURAL DEVELOPMENT:

A. Credit Facilities to Farmers:- Rapid expansion of banking system has benefited rural areas by
providing services and credit facilities.
B. Eliminating Money Lenders:- Liberal credit terms and conditions of credit by commercial banks
has eliminated money lenders.
C. Control on Famines:- Government can maintain buffer stock after Green revolution to control
famines.

SOURCE OF AGRICULTURAL CREDIT:

1. Institutional Source:
➢ Established by government
➢ Also known as “Formal Source of Capital”
➢ Aim is to provide credit at cheap rate of interest
A. Commercial Banks:- It provides loan for all agricultural purpose for short, medium and long
term.
B. Regional Rural Banks:- They are opened up where there are no banking facility and it’s aim to
provide credit to small farmers.
C. Co-operative Credit Societies:- Its aim is to ensure timely and rapid flow of credit to the
farmers at lower rate of interest.
D. Self – Help Groups:- Credit is given from money collected by each member at very low rate of
interest.

2. Non – Institutional Source:

➢ Traditional source of credit
➢ Also known as “Informal Source of Capital”
➢ They charge high rate of interest
A. Money Lenders:- Famous source of providing credit to all rural people.
B. Rich Land Lords:- Provide loan to small and marginal farmers at high rate of interest.
C. Traders and Commission Agents:- Provide credit to peasants on mortgaging crops at high rate.
D. Relative and Friends:- Credit from relative and friends at no interest.

PROBLEMS OF RURAL CREDIT:

1) Insufficiency
2) Inadequate amount of sanction
3) Lesser attention of poor farmers
4) Growing over dues
5) Inadequate institutional coverage
6) Red tapism

MEASURES TAKEN TO IMPROVE CREDIT FLOW TO AGRICULTURE:

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A. Land reforms
B. Tenancy reforms
C. Regulation of higher rents
D. Provision of credit to rural farmers
E. Subsidies e.g. Urea subsidy
F. Food Security Act, 2013
G. Public distribution system
H. Minimum support price and Procurement pricing system

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

(NABARD):
➢ NABARD was established on 12th July, 1982 by an Act of the Parliament.
➢ NABARD is a Development Bank.
➢ NABARD is regarded as apex rural financial institution.
➢ NABARD, with its Head Office at Mumbai has 31 Regional Offices located in States and Union
Territory.
➢ NABARD is mandated for providing and regulating credit and other facilities for the promotion and
development of agriculture, small scale industries, cottage and village industries, handicrafts and
other rural crafts and other allied economic activities in rural areas.
➢ The major functions of NABARD include promotion and development, refinancing, financing,
planning, monitoring and supervision.

REGIONAL RURAL BANKS (RRBS):

Regional Rural Banks (RRBs) established on 2nd October, 1975 are government owned scheduled
commercial Banks of India that operate at regional level in different states of India. These Banks are under
the ownership of Ministry of Finance, Government of India. They were created to serve rural areas with
basic banking and financial services. However, RRBs also have urban branches.

AGRICULTURAL MARKETING:
The term agricultural marketing includes all those activities which are mostly related to the procurement,
grading, storing, transporting and selling of the agricultural produce. “Agricultural marketing comprises all
operations involved in the movement of farm produce from the producer to the ultimate consumer. Thus,
agricultural marketing includes the operations like collecting, grading, processing, preserving, transportation
and financing”.

PRESENT STATE OR AGRICULTURAL MARKETING IN INDIA:

A. Sale in Villages
B. Sale in markets
C. Sale in mandis
D. Co-operative marketing
E. Regulated markets

PROBLEMS OF AGRICULTURAL MARKETING:

a) Lack of storage facility
b) Distress sale
c) Lack of transportation
d) Unfavourable mandis
e) Intermediaries
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f) Unregulated markets
g) Lack of market intelligence
h) Lack of organization
i) Lack of grading
j) Lack of institutional finance

REMEDIAL MEASURES FOR IMPROVEMENT OF AGRICULTURAL

MARKETING:
a) Establishment of regulated markets
b) Establishment of co-operative marketing societies
c) Extension and construction of additional storage and warehousing facilities
d) Expansion of market yards and other allied families for the new and existing markets
e) Provision be made for extending adequate amount of credit facilities to the farmers
f) Timely supply of marketing information to the farmers
g) Improvement and extension of road and transportation facilities

STEPS TAKEN FOR IMPROVEMENT OF AGRICULTURAL MARKETING IN

INDIA:
a) Warehouses
b) Development of marketing societies and regulated markets
c) Infrastructure facilities
d) NAFED:- The National Agricultural Co-operative Marketing Federation of India (NAFED) is also
working as an apex body of marketing co-operatives in the country.

NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF

INDIA (NAFED):
NAFED was established on Gandhi Jayanti on 2nd October, 1958. NAFED is registered under the Multi
State Co-operative Societies Act. It was setup with the object to promote co-operative marketing of
agricultural produce to benefit the farmers.

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Unit – VI (B)
Sectoral Trends and Issues:- Industry and Service Sector

NEW INDUSTRIAL POLICY, 1991:

Finance Minister Manmohan Singh introduced the NEP on July 24, 1991. The 1991 policy made ‘License,
Permit and Qouta Raj' a thing of the past. It attempted to liberalise the economy by removing bureaucratic
hurdles in industrial growth.
Main Features of New Industrial Policy, 1991:
a) Industrial delicensing
b) Deregulation of the industrial sector
c) Public sector policy (dereservation and reform of PSEs)
d) Abolition of MRTP Act (Monopoly and Restricted Trade Practice Act)
e) Foreign investment policy and foreign technology policy
f) Focus on Liberalisation, Globalisation and Privatisation.

DIVESTMENT OR DISINVESTMENT:
Divestment or disinvestment means selling a stake in a company, subsidiary or other investments. Business
and governments resort to divestment generally as a way to pare losses from a non-performing asset, exit a
particular industry or raise money.
Government often sell stakes in public sector companies to raise revenues. In recent times, the central
government has used this route to exit loss making ventures and increase non-tax revenues.
The Indian government started divesting it’s stake in public sector companies in the wake of a charge of
stance in economic policy in the early 1990s – commonly known as ‘Liberalisation, Privatisation,
Globalisation’. This has helped the centre pare it’s fiscal deficits.

MSMEs:
MSMEs are Micro, Small and Medium Enterprises that engage in the service sector or the manufacturing,
processing, production and preservation of goods. The government of India has introduced MSME in
agreement with Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. These
enterprises primarily engaged in the production, manufacturing, processing or preservation of goods and
commodities.
Micro Small Medium
Investment in Plant & Investment in Plant & Investment in Plant and
Machinery or Equipment: Machinery or Equipment: Machinery or Equipment:
NOT more than ₹ 1 crore NOT more than ₹ 10 crores NOT more than ₹ 50 crores
and Annual Turnover: NOT and Annual Turnover: NOT and Annual Turnover: NOT
more than ₹ 5 crores. more than ₹ 50 crores. more than ₹ 250 crores.

PROBLEMS FACED BY THE MSME SECTOR:

a) Financial issues
b) Regulatory issues
c) Infrastructure
d) Low productivity
e) Lack of innovation
f) Technical changes
g) Competition

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h) Skills

ROLE OF THE SERVICE SECTOR:

• India’s services sector covers a wide variety of activities such as trade, hotel and restaurants,
transport, storage and communication, financing, insurance, real estate, business services,
community, social and personal services and services associated with construction.
• The service sector has highest growth rate and is the least volatile sector.
• The most growing service sector is Information and Communication Technology.
• The services sector accounts for 53.89% of total India’s GVA (Approx 54%)

GROWTH OF BANKING SECTOR DURING THE POST-REFORM PERIOD:

• On 19th July, 1969, major process of nationalisation was carried out. It was the effort of the Prime
Minister of India, Mrs. Indira Gandhi. Fourteen commercial banks were nationalised.
• In the year 1980, another 6 banks were nationalised, taking the number to 20 banks.
• There are 12 public sector banks in India in 2022.
• After the massive merger, the total number of Public Sector Banks (PSBs) in India has come down
from 27 banks in 2017 to 12 in 2021.
• Nationalised banks have such an ownership structure where the government is the majority
shareholder i.e., >50%.
• Reserve Bank of India or RBI is the overall regulator of banking system in India.
• Banking Regulation Act 1949 is a legal framework that contains rules and regulations related the
banking system.
• RBI regulates all the nationalised and non-nationalised banks in India.
• State Bank of India is widely regarded as the best government bank in India.
• There have been major mergers in Banks in India. The most recent ones are:-
Anchor Bank Banks to be Merged with Anchor Bank
Punjab National Bank Oriental Bank of Commerce + United Bank of India
Canada Bank Syndicate Bank
Indian Bank Allahabad Bank
Bank of Baroda Dena Bank + Vijaya Bank

IMPACT OF NATIONALISATION:
• This lead to an increase in funds and thereby increasing the economic condition of the country.
• Increased efficiency
• Helped in boosting the rural and agricultural sector of the country
• It opened up a major employment opportunity for the people
• The competition decreased, which resulted in increased work efficiency

GROWTH OF INSURANCE SECTOR DURING THE POST-REFORM PERIOD:

The insurance industry till August 2000 had only two nationalised players – LIC and GIC and it’s four
subsidiaries.
Therefore, in 1999, a committee was set up under the chairmanship of R. N. Malhotra to evaluate the Indian
Insurance Industry and recommend it’s further direction. The committee submitted its report and it’s major
recommendations included:-
• Government to bring down it’s stake in insurance companies to 50%
• Private companies with a minimum paid up capital of ₹ 100 crores allowed to enter the industry.
• No single company should be allowed to transact business in both i.e. LIC and GIC.
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• Foreign companies may be allowed to enter the industry in collaboration with domestic companies,
etc.
Recognizing the global trend of market driven and competitive industry and the recommendations of the
Malhotra Committee, the insurance sector of India was opened up in August 2000. The Insurance
Regulatory and Development Authority (IRDA) was constituted in April 2000 under the IRDA Act, 1999.

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Unit – VI (C)
Sectoral Trends and Issues: External Sector

BALANCE OF PAYMENTS:
The balance of international payments or simply the balance of payments of a country is a systematic record
of all international trade, economic and financial transactions of that country during a given period.
In other words, the balance of payments is a statement that records all economic transactions visible and
invisible within a given period (usually a year) between the residents of one country and the rest of the
world.

BALANCE OF TRADE:
Balance of Trade refers to the difference between the value of imports and exports of commodities or goods
or of visible items only. Thus, balance of trade is only a part of the balance of payments. (Invisible items
include services).

STRUCTURE OF BALANCE OF PAYMENTS:

The balance of accounts consists of two parts – the current account and the capital account. The current
account deals with payment for currently produced goods and services. The capital account, on the other
hand, deals with payments of debts and claims.

CAUSES OF UNFAVOURABLE BALANCE OF PAYMENTS:

1. Economic Factors:
a) Imbalance between exports and imports, b) Large Imports, c) High Domestic, d) Cyclical
fluctuations (like recession or depression), e) New Sources of Supply and New Substitutes.
2. Political Factors:
Experience shows that political instability and disturbances cause large capital outflows and hinder
inflows of foreign capital.
3. Social Factors:
a) Changes in fashions, tastes and preferences of the people bring disequilibrium in BOP by
influencing imports and exports; b) High population growth in poor countries.

MEASURES TO CORRECT DISEQUILIBRIUM IN BOP:

Following remedial measures are recommended:-
1) Export promotion
2) Restrictions and import substitution
3) Reducing inflation
4) Exchange control
5) Devaluation of domestic currency
6) Tariff
7) Quota restrictions

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Unit – VII
Social Issues in Indian Economy

POVERTY:
Poverty is a social phenomenon in which a section of the society is unable to fulfill even it’s bare necessities
of life.
The Planning Commission of India has defined a poverty line on the basis of recommended nutritional
requirements of 2,400 calories per person per day for rural areas and 2,100 calories per person per day for
urban areas.
The all India poverty ratio in 2020-21 is 17.9%, with lower poverty in urban India compared to rural India.
Poverty can be measured in terms of the number of people living below the poverty line (with the incidence
of poverty expressed as the Headcount Ratio).

POVERTY LINE & HEAD COUNT RATIO:

Poverty Line is defined as the expenditure incurred to obtain the goods in a “Poverty Line Basket” (PLB).
The proportion of the population below the poverty line is called the Poverty Ratio or Head Count Ratio
(HCR).

POVERTY ESTIMATION IN INDIA:

In India, the most commonly used method to estimate poverty is through the measurement of income and
consumption levels. When the income or consumption of an individual or the household he/she belongs to
fall below minimum level then they are designed to be Below the Poverty Line.
The Poverty Line calculation is now carried out by the NITI Aayog (the successor to the erstwhile Planning
Commission of India) through the calculation of the poverty line based on the data collected by the National
Sample Survey Office (NSSO).

ABSOLUTE POVERTY & RELATIVE POVERTY:

Poverty is of two types: Absolute and Relative. Absolute Poverty is measured by the percentage of people
living below the poverty line or by the head count ratio. Relative poverty refers to income inequality.

CAUSES OF POVERTY IN INDIA:

a) Lack of inclusive economic growth
b) Sluggish agricultural performance and poverty
c) Non-implementation of land reforms
d) Rapid population growth
e) Unemployment and under employment
f) Low productivity in agriculture
g) Under utilised resources
h) Low rate of economic development
i) Political factors
j) Unequal distribution of income.

POVERTY ALLEVIATION PROGRAMMES IN INDIA:

a) Integrated Rural Development Programme (IRDP), 1978
b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005
(The Act provided 100 days assured employment every year to every rural household)
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c) Jawahar Gram Samridhi Yojana (JGSY)
d) Annapurna: To provide 10 kg of food grains to the eligible senior citizens who are not registered
under the National Old Age Pension Scheme.
e) Sampoorna Gramin Rozgar Yojana (SGRY)
f) Pradhan Mantri Jan Dhan Yojana (PMJDY)
g) Pradhan Mantri Ujjwala Yojana (PMUY) (LPG connections to women below the poverty line)
h) Pradhan Mantri Garib Kalyan Yojana (PMGKY)

UNEMPLOYMENT:
Unemployment may be defined as “a situation in which the person is capable of working both physically
and mentally at the existing wage rate, but does not get job to work”.

TYPES OF UNEMPLOYMENT IN INDIA:

1) Disguised Unemployment: It is a situation in which more people are doing work than actually
required. Even if some are withdrawn, production does not suffer. In other words, it refers to a
situation of employment with surplus manpower in which some workers have zero marginal
productivity. So their removal will not affect the volume of total production overcrowding in
agriculture due to rapid growth of population and lack of alternative job opportunities may be cited
as the main reasons for disguised unemployment in India.
2) Seasonal Unemployment: It is unemployment that occurs during certain seasons of the year. In
some industries and occupations like agriculture, holiday resorts, ice factories, etc., production
activities take place only in some seasons. So they offer employment for only a certain period of time
in a year. People engaged in such type of activities may remain unemployed during the off-season.
3) Cyclical Unemployment: It is caused by trade cycles at regular interval. Generally capitalist
economies are subject to trade cycles. The down swing in business activities results in
unemployment. Cyclical unemployment is normally a short-run phenomenon.
4) Structural Unemployment: It is a natural outcome of economic development and technological
advancement and innovation that are taking place rapidly all over the world in every sphere.
5) Chronic Unemployment: If unemployment continues to be a long term feature of a country, it is
called chronic unemployment.
6) Frictional Unemployment: It is caused due to improper adjustment between supply of labour and
demand for labour. This type of unemployment is due to immobility of labour, lack of correct and
timely information, seasonal nature of work, etc.

CAUSES OF UNEMPLOYMENT:
1) Slow economic growth
2) Increase in population
3) Agriculture is a seasonal occupation
4) Joint family system
5) Fall of cottage and small industries
6) Slow growth of industrialization
7) Immobility of labour

MEASURES TO SOLVE UNEMPLOYMENT PROBLEM:

1) Change in industrial technique
2) Policy regarding seasonal unemployment
3) Change in education system
4) Expansion of employment exchanges
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5) Full and more productive employment
6) Increase in production
7) Population control
UNEMPLOYMENT ALLEVIATION PROGRAMMES IN INDIA:
1) Integrated Rural Development Programme (IRDP)
2) National Rural Employment Programme (NREP)
3) Training of Rural Youth for Self-Employment (TRYSEM)
4) Jawahar Rozgar Yojana (JRY)
5) Employment Assurance Scheme (EAS)
6) Prime Minister Rozgar Yojana (PMRY)
7) Jawahar Gram Samridhi Yojana (JGSY)
8) Sampoorna Gramin Rojgar Yojana (SGRY)
9) Swarna Jayanti Gram Swarozgar Yojana (SGSY)
10) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)