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 INDEX
Quick Economy GK 1-41

• Branches of Economics
• Micro Economics
• Macro Economics
• Banking System
• Reserve Bank of India
• Public Finance
• Stock Exchange
• Poverty
• Unemployment
• Agriculture
• Welfare Schemes
• Industries
• Classifica on of Corpora ons/ Government Companies
• Maharatna
• Navratna
• Industrial Policy 1991
• FDI Policy 2016
 EBD_7239
ECONOMY

TOP ECONOMIC TRENDS THAT CHANGED THE WORLD

 GK-2 ECONOMY

ECONOMY
INTRODUCTION from each successive unit goes on falling as
The term ‘Economics’ has originated from the intensity of want for the commodily declines.
Greek word ‘Oikonomics’; Oikos (Home)
Nomos (Management) together means
Demand
‘Home Economics. Demand for a commodity refers to the
It is a social science of human behaviour quantity of a commodity which a consumer
relating to allocation of scarce resources in is willing to buy at different price level in a
such a way that consumers can maximise given period of time.
their satisfaction, producers can maximise Factors Affecting Demand :
their profits and society can maximise
social welfare. (1) Price of the commodity itself
(2) Price of the related goods
Branches of Economics (a) Substitute goods : These are
The two chief branches are as follows: those goods which are used in
Micro Economics place of each other to satisfy
It is that branch of economics which deals a given want for eg. coffee is a
with the behaviour of individual economic substitute for tea
units of the economy such as individual (b) Complementary goods : These
households, individual firms or industry. It are those goods which are used
revolves around determination of prices of jointly to satisfy a given want
individual commodities and factors. for eg. car and petrol.
Macro Economics (3) Income of the consumer
(4) Taste and preference of the consumer
It is that branch of economics which deals
with the study of overall averages and Law of Demand
aggregates like aggregate national income, It states that other things remaining
national savings, general price level. unchanged, quantity demanded of a
MICRO ECONOMICS commodity is inversely related to the price
of a commodity.
Consumer Behaviour and Demand
Demand Curve
Utility It reflects graphically the relationship
It is the power or capacity of a commodity between the quantity demanded of a
to satisfy a human want or it is the amount commodity and its prices.
of satisfaction that a person gets from the It is dounward sloping from left to the right
consumption of a good or service. It is because of the law of diminishing marginal
measured in utils. utility, income effect and price effect.
Marginal Utility
It is the additional utility derived from
consumption of an additional unit of
commodity.
Total Utility
It is the sum of all the utilities derived from
consumption of all the units of a particular
commodity. It is the sum of all marginal Exceptions to Law of Demand
utilities.
(1) Inferior goods or Giffen goods : In
Law of Diminishing Marginal Utility case of these goods, when their
As more and more units of a commodity prices fall, their demand may not
are consumed, marginal utility derived rise as the consumers divert their
India’s retail market is estimated to be worth US$450 billion.
 EBD_7239
ECONOMY GK-3

extra purchasing power to purchase Market Demand

superior goods. Their price effect is It is derived by summing up the individual
positive and income effect is negative. demands
(2) Status Symbol Goods.
(3) Goods expected to become scarce or Cross Price Effect
costly in future. When demand for one product is affected
Income Effect by change in the price of the other product.
A change in quantity demanded as a result Price Elasticity of Demand
of change in real income caused by change It is the measure of degree of
in price of commodity. responsivesmess of demand for a commodity
Substitution Effect to change in its price.
It refers to the substitution of the eD ⇒ % change in demand
commodity in place of other commodity ed
when it becomes relatively cheaper.
% change in price

Degrees of desticity of demand

Coefficient of eD Nature of eD Relationship between price and demand
eD = 0 Perfectly inelastic Demand does not change as price changes

eD < 1 less than unit elastic % change in demand is less than that in
price
eD = 1 Unit elastic % change in demand is equal that in price

eD > 1 more than unit elastic % change in demand is more than that in
price
eD = ∞ Perfectly elastic Demand changes infinitely

Producer Behaviour and Supply Supply

Production Function Supply of a commodity by a firm refers to
the quantity of the commodity which the
The functional relationship between firm is willing to supply at a particular price
physical inputs and physical output of a and time.
firm. Factors affecting supply:
(1) Price of the commodity itself
Law of Variable Proportion (2) Change in the technology of
If more and more units of variable factors production
are employed with fixed factors, output (3) Change in price of inputs
(4) Change in excise duty
increases at an increasing rate in the (5) Price of other related goods
beginning, then increases at diminishing
Law of Supply
rate and finally starts falling.
Other things being constant, quantity
Law of Returns to Scale supplied of a commodity is directly related
This law explains the behaviour of output to price of commodity.
when quantities of all the inputs are Supply Curve
changed in the same proportion. It reflects the relationship between the
price and quantity supplied graphically.
India is the world’s second largest importer of arms and spent $50 billion in the last decade.
 GK-4 ECONOMY
Supply Curve
Y
Price Elasticity of Supply
It is the degree of responsiveness of supply
Price of a commodity to change in its price,

es ⇒ % change in quantity supplied

X es
Quantity
% change in price
It is positively sloped.
Degrees of Elasticity of Supply
Coefficient of eS Nature of eS Relationship Between Price and
Supply
es = 0 Perfectly inelastic Quantity supplied does not change will
not core with change in price
es < 1 less than unit elastic % change in supply is less than that in
price
es = 1 Unit elastic % change in supply is equal to that in
price
es > 1 more than unit elastic % change in supply is more than that in
price
es = ∞ Perfectly elastic supply changes infinitely without
change in price

Cost
It is the money expenditure incurred by the producer to purchase factors of production.
Short Run Period
It is a period of time in which some factors of production cannot be changed due to
insufficiency of time while others can be changed.
Long Run Period
It is a time period during which quantities of all the factors inputs are variable. There is no
difference between fixed costs and variable costs.
TYPES OF COST

Fixed cost Variable cost Explicit cost Implicit cost

Expenditure on Expenditure on Expenditure incurred Cost of self

hiring/purchasing of variable inputs on both fixed and supplied
fixed inputs (eg. land) (eg. labour) variable inputs factors
CONCEPTS

Total Cost (TC) Average Cost (AC) Marginal Cost (MC)

↓ ↓ ↓
TC = Total fixed AC = Total cost MC = Increase in total
cost + Total variable cost Total output cost due to increase in
one extra unit of output

India is the second largest producer of fruits and vegetables in the world
 EBD_7239
ECONOMY GK-5

Revenue Market Equilibrium

Revenue of a firm is its money receipts
from the sale of its products
Profit
It is the surplus of revenue over total cost
of production
Profit = Total Revenue – Total cost
Loss
Loss = Total cost – Total revenue
It is defined by equality between quantity
demanded and quantity supplied in the
market.
Equilibrium Price
It is the price at which quantity demanded
of a commodity is equal to quantity
supplied in the market

Market
Market is a place where forces of demand
and supply operate and where buyers and
sellers interact to trade goods, services
It is determined by general interaction
or contracts or insturments for money or of market forces between demand and
barter. supply. P1 is equilibrium price and Q1 is
equilibrium quantity in the diagram.

S. Market Types of Number of Entry & exit Price determination

No. products sellers/firms
1. Perfect Homogeneous Many Freedom of entry Firms are price-takers
Competition product and exit
2. Monopoly Unique One Barriers to entry Firms are price-makers
3. Oligopoly Differentiated Few Barriers to entry Firms are price-makers
products
4. Monopolistic Differentiated Many Freedom of entry Firms are price - makers
Competition products and exit

MACRO ECONOMICS
Circular Flow of Income
It refers to continuous circular movement of goods and services between major sectors.
eg. Household, Firm, Government sectors.
Real Flow
It refers to the flows of goods and services. It implies flow of factor services from household
to firm and corresponding flow of goods and services from firm sector to household sector.
Money Flow
It refers to the flow of money in the form of factor payments and consumption expenditure.

National Stock Exchange (NSE) was set up in 1984

 GK-6
REAL FLOW AND MONEY FLOW BETWEEN DIFFERENT SECTORS OF ECONOMY
Factors of Production
The primary inputs which are used to
produce goods and services are called
factors of production. It includes.
Land: All natural resources used in the
production of goods
Labour: Human effort done mentally or
physically with the aim of earning income.
Capital: All goods which are used for
further production of wealth. eg. machines,
tools, buildings.
Entrepreneur: Individual who organises
the other factors and undertakes risks to
make an economic profit.
National Income of India
National Income is the net value of all
the final goods and services produced in
a country during a financial year. It is a
flow concept. In India the financial year is
from 1st April to 31st March. The National
Income is calculated annually.
National Income Aggregates
Gross National Product (GNP)
GNP refers to the money value of total
output of production of final goods and
services produced by the national of a
country during a given period of time,
India has third largest Economy in the world by Purchasing Power Parity (PPP)
ECONOMY
generally a year.
Symbolically,
GNP = C + G + I + (X – M) + (R – P)
Where, C = Consumption expenditure
G = Government expenditure
I = Investment expenditure
(X – M) = Net exports
(R – P) = Net Factor Income from Abroad
Gross Domestic Product (GDP)
It 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.
Symbolically, GDP = GNP – (R – P)
When, R – P = 0 then GDP = GNP
Net National Product (NNP)
NNP = GNP – Depreciation
NNP refers to the money value of total
final goods and services produced by the
nationals of a country minus depreciation
during a given period of time.
Personal Income (PI)
Personal Income = National Income –
Undistributed Profits of Corporations
– Payment for Social Security Provisions –
Corporate Taxes + Transfer Payments + Net
Interest paid by the Government.

ECONOMY
Personal Disposable Income (PDI)
When personal direct taxes are subtracted
from personal income, the obtained value is
called personal disposable income.
Symbolically,
PDI = Personal Income – Direct Taxes
PDI = Consumption + Saving
National Income (NI)
When NNP is calculated at Factor Cost (FC)
it is called National Income. This measure is
calculated by deducting Indirect Taxes and
adding subsidies in NNP at Market Price
(MP).
NNPFC = NNPMP – Indirect Taxes + Subsidies
or NNPFC = GNPMP – Depreciation –
Indirect Taxes + Subsidies
Measurement of National Income
Product/Output/Pro- Income
duction method method
Gross value added = Output N.I. = Total Rent +
of final goods & services – Total wages + Total Expenditure of Consumers
Intermediate Consumption Interest + Total profit
GDP = Gross value added +
Indirect Taxes – Subsidy
Income and Employment
(1) Classical Theory of Employment
An economy as a whole always functions at
the level of full employment.
Say’s law of market-Supply creates its own
demand.
(2) Keynesian Theory of Income and
Employment
According to this theory economic system
does not ensure automatic equilibrium at
full employment. Equilibrium can also be
attained below full employment.
This Theory says “Demand creates its own
Supply”
Aggregate Demand
It refers to the total demand for goods and
services in the economy during a given
period of time.
Textile manufacturing is the second largest source of employment after agriculture
EBD_7239
GK-7
National Income at constant price
& current price
NI @ CONSTANT PRICE = Total quantity
of all final goods & services produced in a
particular year × Price of base year.
Base year of National Income accounts
is the year chosen to enable inter – year
comparisons. The new series changes the
base to 2011-12 from 2004-05.
NI @ CURRENT PRICE = Total quantity
of all final goods & services produced
in a particular year × Price of goods &
services in that particular year.
Consumption/Expen-
diture method
GDP = Consumption
+ Consumption Expenditure
of investors or entrepreneur
called investment +
consumption of government
AD = C + I + G + (X – M)
C → Private consumption demand
I → Private Investment demand
G → Government demand for goods and
services
(X – M) → Net export demand
c
Aggregate Supply
It is the total output available for purchase
by the economy during a given period.
AS = C + S
C = Consumption expenditure
S = Savings
 GK-8
Equilibrium Level of Income
Equilibrium level of income is that level of
income at which aggregate demand equals
aggregate supply.
Fiscal Policy of Government
Fiscal policy is the expenditure and revenue
policy of the government to accomplish the
desired objectives
Main tools of Fiscal Policy are:
(i) Expenditure Policy : In this policy
government curtail its expenditure on
public works thereby reducing the money
income of the people and their demand for
goods and services or vice versa
(ii) Revenue Policy : During inflation,
government raises rates of all taxes,
to curtail the purchasing power which
reduces the effective demand or vice versa.
(iii) Public borrowing : In this
government resorts to large scale public
borrowing to mop up excess money with
the public by issuing bonds etc.
(iv) Deficit financing : To control
demand Government cut down deficit
financing (printing of notes)
Monetary Policy of Government
It is the policy of the Central Bank of a
country to regulate and control money
supply and credit in the economy. Its
measures are Quantitative Measures and
Qualitative Measures.
Quantitative Measures
(a) Bank Rate : It is the rate of interest
at which Central Bank lends to commercial
Banks.
To control inflation, Central Bank raises
bank rate.
(b) Open Market Operation : It refers
to buying and selling of government
securities and bonds in the open market by
the Central Bank.
India has the largest postal network in the world
ECONOMY
(c) Cash Reserve Ratio (CRR) : It is
ratio of bank deposits that a commercial
bank must keep with Central Bank.
During inflation, Central Bank raises CRR
thereby curtailing the lending capacity of
commercial Bank.
Current CRR – 4%
(d) Statutory Liquidity Ratio (SLR) :
According to this, every bank is required
to hold a minimum proportion of its total
deposits in liquid form with themselves.
Current SLR – 19.50%
Inflation
It is rate at which the general level of prices
for goods and services rises on one hand
and value of money fall on the other.
Types of Inflatio
(a) Demand Pull inflation : It occurs
when aggregate demand increases at a
faster rate than aggregate supply.
(b) Cost Push Inflation : It occurs
when there is an increase in the cost of
production.
Measurement of Inflatio
(1) General Price or Wholesale Price
Index : It measures the changes in average
prices of goods and services in comparison
to base year.
Current base year : 2011-2012
Tentative base year : 2017–2018
(2) Consumer Price Index : It measures
the average change in prices paid by the
consumer for a particular basket of goods
and services over a period of time.
Deflation : It is the decrease in the general
price level of goods and services and
increase in the value of money.
Stagflation : It is a situation in which the
inflation rate is high, the economic growth
rate slows and unemployment remains
high.
Disinflation : The rate of inflation at a
slower rate.
 EBD_7239
ECONOMY GK-9

BANKING SYSTEM
Bank is an institution which borrows and
lends money. Banking means the accepting
for the purpose of lending or investments
of deposits of money from the public,
repayable on demand and withdrawable by
cheques, draft, order or otherwise
•• The first bank of limited liability
managed by an Indian was Oudh
Commercial Bank in 1881.
Subsequently, PNB was established in
1894.
•• The step toward ‘Social Banking’ was
taken with the nationalisation of 14
commercial banks on 19th July, 1969.
Six more Commercial Banks were
nationalised on 15th August, 1980.
•• Five associates and the Bharatiya
Mahila Bank became part of the State
Bank of India (SBI) on 1st April, 2017.
•• The largest bank Imperial Bank of
India was nationalised in 1955 and
renamed as State Bank of India
followed by formation of its 7 associates
in 1959.

Reserve Bank of India

[Central Bank and supreme monetary authority of the country]

Scheduled Banks Unscheduled Bank

Scheduled Commercial Bank Scheduled Co-operative Banks

Public Private Foreign Regional Scheduled Scheduled

Sector Sector Bank in Rural Urban State
Banks (20) Banks (21) India (43) Banks (357) Cooperative Cooperative
Banks (54) Banks (19)

Other State Bank Old New

Nationalised
Public of India Private Private
Banks (19)
Sector Bank & its Banks Banks
Associates

RESERVE BANK OF INDIA

•• It is the apex regulatory body of Indian
Banking system. Also called as the
Central Bank.
•• It keeps the cash reserves of all
Scheduled Banks & hence is known as
the ‘Reserve Bank’.
•• It was inaugurated in April 1935.
•• Situated in Mumbai.
•• Fully owned by the Government of
India.
India current inflation rate is 4.9% and unempdoyment rate is 3.5%.
•• Presently, the Governor is Dr. Urjit R.
Patel.
•• Has 19 regional offices.
Functions of RBI–
(a) Bank of Issue (All notes except ` 1 note
& coins are issued by RBI). One rupee
note & coins are issued by Ministry of
Finance but circulated by RBI.
 GK-10
(b) Banker & debt manager to Government.
(c) Banker’s Bank.
(d) Custodian and manager of Foreign
Exchange.
(e) Controller of credit
(f) Supervision over commercial &
cooperative banks.
Commercial Banks
Accept deposits, give loans and provide
other financial services to earn profit.
Consist of both public sector and private
sector banks.
Public Sector Banks
Public sector banks are those banks in
which the majority of ownership is with
government. The majority of ownership
means, shareholding of more than 51%.
State Bank Group
State Bank group means State Bank of India
(SBI) and its Associates. It was created in
1921 by amalgamating the three Presidency
Banks of Bengal (1806), Bombay (1840)
and Madras (1843). Imperial Bank of India
was partially nationalised on July 1, 1955
and renamed as State Bank of India (SBI).
Other Nationalised Bank
The public sector banks other than SBI and
its associates are other nationalised banks.
For examples – PNB, BOI, etc.
The IT industry is the biggest private sector employer in India.
ECONOMY
The Regional Rural Banks (RRB):
These banks were established since 1975,
under RRBs Act 1976. These banks were
set up by public sector banks. RRBs were
established to lend to weaker section called
target group like landless labour, artisan and
craftsmen at concessional rate.
Co-Operative Banks
Co-operative banks are established by State
laws. These banks are called as co-operative
banks because these have co-operation of
stake holders as motive. Along with lending,
co-operative banks also accept deposits.
NABARD
NABARD was set up in July 1982.
The functions of NABARD, viz. financing of
agriculture and refinancing of cooperative
banks and RRBs.
NABARD (National Bank for Agriculture
and Rural Development) is the apex body
of co-operative sector in India.
Repo Rate
It is the rate at which commercial banks
borrow from RBI by mortgaging their dated
government securities and treasury bills 6%.
Reverse Repo Rate
It is the rate at which RBI borrows from
commercial banks by mortgaging its dated
government securities and treasury bills.
–5.75%.
 EBD_7239
ECONOMY GK-11

PUBLIC FINANCE
Budget
Budget is an annual financial statement. The Budget in India is divided into 2 parts – Revenue
Account & Capital Account.
 GK-12 ECONOMY
New Classification of Expenditure
 EBD_7239
ECONOMY GK-13

Important Terms
(1) Revenue– It is the income received by the government.
(2) Expenditure– It is the amount incurred by the government to meet day to day & regular
needs.
(3) Deficit– It means shortage. The gap between the Receipts & Expenditure is called
deficit. The important types of deficit are as follows:
(a) Budget Deficit = Total Expenditure – Total Receipts
(b) Revenue Deficit = Revenue Expenditure – Revenue Receipts
(c) Fiscal Deficit = Total Expenditure – Total Receipts except Borrowing & Other Liabilities.
(d) Primary Deficit = Fiscal Deficit – Interest Payment

Tax
The money which public has to pay to the government so that the latter can pay for public
services is called tax.
(i) Types of Taxes

Direct Tax Indirect Tax

Income
Tax Wealth Minimum Excise Value added Goods & Services
Tax Alternate Tax Duties Tax (VAT) Tax (GST)
Corporate Commodities Custom Service
Tax Transaction Tax Duties Tax

(ii)
Broad Areas of Tax

Tax on Income Tax on Tax on Property &

& Expenditure Commodities Property Transaction

Personal Income, Excise Wealth Tax,

Corporate Income, Duty Estate &
Sales Tax Succession Duties
(iii)
Classification of Taxation

Proportional Progressive Regressive Taxation

Taxation Taxation

Tax levied as Tax rate increases Tax rate decreases

a% of tax base with increase in the with increase in
at a uniform size of tax base tax base
 GK-14 ECONOMY
Types of Taxes •• GST– It is a uniform tax on goods &
•• Direct Tax– The tax that people pay services throughout the country.
directly to the government is called METHODS OF TAXATION OF GOODS
direct tax.
Methods of
•• Indirect Tax– The tax burden, shifted Taxation on Goods
to another person, is called indirect tax.
•• Income Tax– Tax on the personal
income of the individuals.
Ad– Valorem Specific Duty
•• Corporate Tax– Levied on Company’s
profit income.
(1) Ad Valorem– If tax is levied as x of the
•• Wealth Tax– Imposed on the
value of the goods regardless of number
accumulated wealth or property of
of units produced/ sold/ imported,
every individual.
then it is called ad valorem.
•• MAT (Minimum Alternate Tax) – Imposed
Eg. Price of car Tax Amount
on zero tax companies (companies pay
` 2 lakh ` 20,000
very low tax by using the provisions of
` 4 lakh ` 40,000
exemptions, deductions, incentives, etc.
•• Excise Duties– Tax on production of (2) Specific Duty– If tax is levied at a flat
commodities. rate per unit of goods produced/ sold/
•• Custom Duties– Tax on Import & imported, regardless of the value, then
Export of commodities. it is called specific duty.
•• VAT (Value Added Tax) –Tax on sale of Eg. Car’s Price Tax
commodities. It is a state level tax. The ` 2 lakh ` 10,000
tax rate is imposed as x of value added. ` 4 lakh ` 10,000

India has Jumped 30 positions to become the top 100th country is terms of ease of doing business ranking in 2017.
 EBD_7239
ECONOMY GK-15
GK-16 ECONOMY

ECONOMY
INSURANCE
Insurance
It is a form of risk management, primarily
used to hedge against the risk of a
contingent, uncertain loss.
Insurance policy
It is a financial contract between the insurer
& the policy holder where the details of the
policy are mentioned including the benefits
& the premium that a policy holder has to
pay.
Premium
It is the periodic payment made on an
insurance policy. Insurance premiums are
collected in monthly or quarterly or half-
yearly or yearly mode.
Major Types of Insurance
(a) Life Insurance: Descendant’s
family receives financial benefits.
(b) Automobile Insurance: Protects
policy holder against financial loss
Insurance Companies in India
IRDA
Life Insurance
Public Sector Private Sector
(LIC) (24 Companies)
IRDA
Insurance Regulatory and Development
Authority of India (IRDAI) is an autonomous
apex statutory body which regulates and
develops the insurance industry in India.
It was constituted by a Parliament of India Act
called Insurance Regulatory and Development
Authority Act, 1999 and duly passed by the
Government of India.
India ranks 131 on Human Development Index
EBD_7239
GK-17
in the event of an incident involving
a vehicle they own.
(c) Health Insurance: Covers the
expenditures associated with
treatment & medical expenditures.
(d) Property Insurance: Provides
protection from risks associated with
theft, fire, floods, etc.
•• Insurance Industry in India
The Indian Government passed
an ordinance on January 19, 1956
whereby the life insurance sector
was nationalised & the Life Insurance
Corporation of India (LIC) came into
existence. The Indian Parliament
passed the General Insurance Business
(Nationalisation) Act in 1972 & the
general insurance sector was brought
under governmental control from
January 1, 1973.
General Insurance
Public Sector Private Sector
(7 G.I Cos)
The agency operates from its headquarter at
Hyderabad, Telangana, shifted from Delhi
in 2001.
The key objectives of the IRDA include
promotion of competition so as to enhance
customer satisfaction through increased
consumer choice and lower premiums,
while ensuring the financial security of the
insurance market.
 GK-18
India’s Public Debt
Public Debt
The Public Debt of the Government of India
is composed of – (a) Internal Debt & (b)
External Debt.
Internal Debt
It comprises of market loans, compensation
bonds, prize bonds & 15–year annuity
certificates. It also includes borrowings
of a temporary nature, viz treasury bills
issued to the RBI, commercial banks, etc. &
also non– negotiable, non–interest bearing
securities issued to international financial
institutions like the IMF, World Bank & the
Asian Development Bank.
External Debt
It includes borrowings by Central Government
from external sources & are based upon
historical rates of exchange.
Central Government’s public debt & other
liabilities has increased by nearly 4.5 times.
Government Subsidies
It is the money paid by government to help
an industry to reduce its costs, so that it can
provide products services at lower prices.
Subsidies– A sum of money granted to
support an undertaking held in public interest.
Types of Subsidies
Cash Subsidies
Providing food or fertilizers to the consumer
at prices lower than those at which
government procures the commodities.
Interest or credit subsidies
It relates to loans given at rates lower
than market rates. This takes the form of
concessional credit to small scale industries
or priority sector loans to individuals to
buy a taxi, an auto-rickshaw or to set up
some small enterprise by buying some
equipment.
Tax subsidies
It can be in the form of tax exemption of
Dr. Rajiv Kumar, Economist is the Vice chairman of NITI Aayog
ECONOMY
medical expenses, postponing collection of
tax arrears.
Procurement subsidies
It is the purchase of food grains at an
assured price which is higher than the
prevailing market price.
In-kind subsidies
Provision of free medical services through
government dispensaries, provision of
equipment to physically handicapped
persons.
Regulatory subsidies
Fixation of prices of goods produced by
the public sector at less than the cost with
a view to providing inputs to industry
or helping certain other categories of
consumers.
Finance Commission
Under the provisions of Article 280 of the
Constitution, the President is required to
constitute a Finance Commission every fifth
year for the specific purpose of devolution
of non-plan revenue resources. The
functions of the Commission are to make
recommendations to the President with
respect to
(i) the distribution of net proceeds of taxes
to be shared between the Union and
the States and the allocation of share of
such proceeds among the States,
(ii) the principles which should govern the
payment by the Union Government as
grants-in-aid to the States, and
(iii) any other matter concerning financial
relations between the Union and the
States.
The appointment of the Finance
Commissioner is of great importance, for
it enables the financial relation between
the Centre and the units to be altered in
accordance with changes in need and
circumstances.
 EBD_7239
ECONOMY GK-19

FINANCE COMMISSION IN INDIA

Finance Established in Operational Year of Submitting
Sr. No.
Commission Chairman Duration Report
I 1951 KC Niyogi 1952-57 1952

II 1956 K Santhanam 1957-62 1956

III 1960 AK Chanda 1962-66 1961

IV 1964 PV Rajamannar 1966-69 1965

V 1968 Mahavir Tyagi 1969-74 1968

K. Brahmananda
VI 1972 1974-79 1973
Reddy
VII 1977 JM Shelat 1979-84 1978

VIII 1983 YB Chavan 1984-89 1983

IX 1987 NKP Salve 1989-95 1989

X 1992 KC Pant 1995-2000 1994

XI 1998 AM Khusro 2000-2005 2000

XII 2003 C Rangarajan 2005-2010 2004

XIII 2007 Vijay L Kelkar 2010-2015 2009

Y Venugopal
XIV 2012 2015-2020 2015
Reddy

Stock Exchange in India More than 5500 companies are publicly

In India, there are small and big stock listed in the BSE.
exchanges. The most prominent exchanges Top 10 Stock Exchanges of the World
are National Stock Exchange (NSE) and
1. New York Stock Exchange
Bombay Stock Exchanges (BSE).
National Stock Exchange (NSE) 2. NASDAQ
The NSE is the leading stock exchange of 3. London Stock Exchange
India, located in Mumbai. It was established
4. Japan Exchange Group
in 1993 on the recommendation of
Pherwani Committee. Industrial 5. Shanghai Stock Exachange
Development Bank of India (IDBI) is
6. Hong Kong Stock Exchange
the main promoter of this exchange. The
number of listings in NSE is 1696. 7. Euronext
Bombay Stock Exchange (BSE) 8. Shenzhen Stock Exchange
It is an Indian stock exchange located at Dalal 9. TMX Group
Street, Kala Ghoda, Mumbai. Established in
1875, the BSE is Asia’s first stock exchange 10. Deutsche Borse
and the World’s fastest stock exchange with
a median trade speed of 6 micro seconds.

On 30 June 2015, Greece became the first developed country to fail to make an IMF loan repayment.
 GK-20 ECONOMY

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The SEBI was set up in 1988 in place of the Controller of Capital Issue who was a
functionary of the Ministry of Finance. It was made a statutory body in 1992. It is the
main regulatory institution of the Indian capital market.
SEBI is managed by six members- one chairman (nominated by the Central Government),
two members (officers of central ministries) one member (from RBI) and remaining
two members are nominated by the Central Government. The office of SEBI is situated
at Mumbai with its regional offices at Kolkata, New Delhi and Chennai.
The SEBI is authorised to:
•• oversee the working of stock exchanges;
•• regulate merchant banks and mutual funds;
•• register and regulate intermediaries such as stock brokers;
•• curb fraudulent and unfair trade practices including insider trading;
•• promote the development of a healthy capital market.

LIST OF SEBI RECOGNISED STOCK EXCHANGES IN INDIA

Sr. No. Name Address Valid Up to

1 Ahmedabad Stock Address: Kamdhenu Complex Opp, Permanent
Exchange Ltd. Sahajanand College,
Panjarapole, Ambawadi,
Ahmedabad - 380001
Website : http://www.aselindia.co.in/
2 BSE Ltd. Address: P J Tower, Permanent
Dalal Street, Mumbai 400023
Website : http://www.bseindia.com
3 Calcutta Stock Address: 7, Lyons Range, Permanent
Exchange Ltd Kolkata - 700001
Website : http://www.cse-india.com/
4 India International India International Exchange IFSC Limited, Dec 28, 2017
Exchange (India 101, First Floor, Hiranandani Signature
INX) Tower,
GIFT City IFSC - 382355, Gujarat, India
Website : http://www.indiainx.com
5 Magadh Stock Patna, India Permanent
Exchange Ltd.
6 Metropolitan 4th Floor, Vibgyor Tower, Sep 15, 2018
Stock Exchange of Plot No C 62, G Block,
India Ltd. Bandra Kurla Complex (BKC),
Bandra (E), Mumbai - 400051
Website : http://www.msei.in/index.aspx
7 National Stock Address: Bandra Kurla Complex, Bandra Permanent
Exchange of India (East) Mumbai 400051
Ltd. Website : https://www.nseindia.com
8 NSE IFSC Ltd. Unit No. 46 - 53, 1st Floor, May 28, 2018
GIFT Aspire One Business Centre,
Block 12, Road 1-D - Zone 1,
GIFT SEZ, Gandhinagar 382355
Website : http://www.nseifsc.com
China, European Union, Saudi Arabia, United Arab Emirates, and Switzerland are the main import partners of India.
 EBD_7239
ECONOMY GK-21

RECENT COMMITTEES ON BANKING/INSURANCE

Name of the Date of
S. No. Chairman Objectives
Committee Establishment
Digital Shri. Ratan P. Watal,
9th December, To boost Digital Payment
1 Payment Principal Advisor,
2016 System in India
Committee NITI Aayog
To identify all possible
Amitabh Kant Amitabh Kant, CEO
2 November, 2016 modes of digital payment
Committee of NITI Ayog
across sector
Sudarshan Sen, the To improve Financial
Sudarshan Sen
3 14th July, 2016 Executive Director Technology and Digital
Committee
of RBI Banking in India
Banking Sector To review the banking
4 1998 Narasimham
Committee reforms since 1992
Malhotra RN Malhotra, former For reforms in the
5 1993
Committee Governor of RBI insurance sector

BANKING AND INSURANCE SECTORS YOJANA/SCHEMES

S. N. Schemes Launching Objectives Features

1 Varishtha 2017 To provide social Assured pension based on a
Pension Bima security during old guaranteed rate of return of 8%
Yojana, 2017 age and protect per annum for 10 years, with
elderly persons, an option to opt for pension on
aged 60 years and a monthly, quarterly, half yearly
above or annual basis.
2 Digi Dhan 25th Dec. 2016 To encourage The scheme would cover
Vyapar Yojana merchants to use transactions between ` 50 to `
digital payment 3000 to encourage poor, middle
methods class and small business for
cashless payments.
3 Lucky Grahak 25th Dec. 2016 To give incentive The winners would receive
Yojana to the consumers a reward payment of `1000
using digital in their bank account. A total
payments of 15000 winners would be
announced every day for next
100 days.
4 Janashree 10th August, To provide Provide for an insurance cover
Bima Yojana 2000 financial security of ` 30000 on natural death;
(JBY) for weaker `75000 on permanent disability
sections due to accident and ` 37500 on
partial disability.
5 Universal 2003-04 To improve Launched by four public sector
Health healthcare access general insurance companies.
Insurance to the poor Export Credit Guarantee
Scheme (UHIS) families Corporation (ECGC) and the
Agriculture Insurance Company
(AIC) are the special insurers.
 GK-22 ECONOMY
ECONOMIC ORGANISATION/ALLIANCE

Organisation Establish-ment Headquarter Objectives

Federation of
Indian Chamber To support trade and commerce in
1927 New Delhi
of Commerce & India
Industry (FICCI)
Bureau of Indian 23 December, Formulation, recognition and
New Delhi
Standard 1986 promotion of the Indian Standards.
Providing a forum for debate and
Indian Economic
1971 New Delhi discussion of theoretical and policy
Association
oriented issues of Economic Science
To create an environment conducive
Confederation of to the growth of industry in the
1895 New Delhi
Indian Industry country and play a proactive role in
India’s development process.
Asia-Pacific
Promote free and open trade and
Economic 1989 Singapore
investment
Cooperation (APEC)
Eradicate extreme poverty and
World Bank July 1945 Washingtonhunger; Achieve universal primary
education; Promote gender equality.
Promote global monetary co-
operation; secure financial stability;
International Washington, facilitate international trade;
7 July 1944
Monetary Fund D.C. promote high employment and
sustainable economic growth and
reduce poverty around the world.
Introduces the concept of
sustainable development in relation
to the optimal use of world’s
World Trade resources; Raising standards of
1 January 1995 Geneva
Organization living and incomes; ensuring full
employment; expanding production
and trade and optimal use of world’s
resources
To foster economic growth and
cooperation in the region of Asia
Asian Development 19 December Mandaluyong, and Far East and to contribute to
Bank 1966 Philippines the acceleration of the process
of economic development of the
developing members in the region.
United Nations Vienna,
1966 Promote industrial development
Industrial Austria
and cooperation at global, regional,
Development
national and sectoral levels.
Organization
 EBD_7239
ECONOMY GK-23

IMPORTANT INTERNATIONAL REPORTS INDEX

Human Development Index
The UNDP Human Development Report
ranks countries on the basis of measuring
human development by combining
indicators of the Health, Education
& Income into a composite Human
Development Index (HDI). The HDI
classifies the World into 4 broad segments :
Very High → High → Medium and → Low
Human Development Components of HDI.
HDI includes
(a) Health : Life Expectancy at Birth
(b) Education : Mean years of schooling,
Expected years of schooling
(c) Living standards: Gross National
Income Per Capita
India has been classified in the Medium
Human Development Category placed at
131 rank out of 188 countries (Human
Development Report 2015).
The title of 2015 edition of HDR is
‘Work for Human Development’. The
top 3 nations in 2015 HDI are Norway
(1st), Australia (2nd) & Switzerland(3rd).
The first Indian Human Development
Report was formally released by the then
Prime Minister Mr. Atal Bihari Vajpayee
on April 23, 2002. Madhya Pradesh was
the first state to release state-level Human
Development Report.

INDIA’S RANK IN IMPORTANT INTERNATIONAL REPORTS/INDEX

Index India’s Rank Topped
Global Competitiveness Index Report 2016-2017- By 39 Switzerland
WEF
Global Innovation Index Report 60 Switzerland
World Press Freedom Index Report 136 Norway

Intellectual Property (IP) Environment Report 2017 43 USA

World’s Most Valuable Nation Brands Report 7 USA
World’s Best Countries for Easy of doing Business 130 New Zealand
2017
FDI Inflow (Report By UNCTAD) 2016 (Latest Report) 9 USA
Global Peace Index Report 2017 137 Iceland
Global Retail Development Index 2017 1 India
Human Development Index 131 Norway
Global Connectivity Index Report 2017 43 USA
Global Hunger Index Report 2016- By International 97 Central African
Food Policy Research Institute Republic
Legatum Global Prosperity Index 2016 104 New Zealand
Global Health Index 2016 143 Iceland
Global Environment Performance Index Report 2016 155 Finland
Networked Readiness Index 2016 91 Singapore
World’s Largest Oil Consumer Report 2016 3 USA
 GK-24 ECONOMY
Global Corruption Index 2016- By Transparency 79 Denmark &
International New Zealand
World Happiness Index 2017 122 Norway
Human Capital Index 2016- By World Economic 105 Finland
Forum
FM Global Resilience Index 2017 60 Switzerland
Global Talent Competitiveness Index 2016 92 Switzerland
Travel & Tourism Competitive Index Report 2017- By 40 Spain
World Economic Forum
FIVE YEAR PLANS
Plans Period Growth Themes
Performance (%
p.a.)
Target Actual
1st Plan (1951 - 56) 2.1 3.5 Development of primary sector
2nd Plan (1956 - 61) 4.5 4.2 Development of public sector (Industries)
3rd Plan (1961 - 66) 5.6 2.8 Agricultural Development, Defence
Industry, Price stabilisation
Annual Plan (1966 - 69) – 3.9 Growth with stability & progress towards
(Plan Holiday) self-reliance. (Nationalisation of Banks,
Green Revolution).
4th Plan (1969 - 74) 5.7 3.2 Employment, Poverty Alleviation
5th Plan (1974 - 78) 4.4 4.7 Economic Liberalisation
Annual Plan (1979 - 80) – – 5.2 Growth, Modernisation, Self-Reliance &
Social Justice
6th plan (1980 - 85) 5.2 5.5 Human Development in various
aspects, Beginning of Liberalisation -
Privatisation- Globalisation
7th plan (1985 - 90) 5.0 5.6 Growth with Equity & Distributive
Justice
Annual Plan (1990 - 92) – 3.4 Equity with Social Justice
8th Plan (1992 - 97) 5.6 6.5 Towards more Inclusive Growth
9th Plan (1997 - 6.5 5.5 Faster, more Inclusive & Sustainable
2002) Growth
10th Plan (2002 - 07) 7.9 7.7
11th Plan (2007 - 12) 9.0 8.0
12th Plan (2012 - 17) 8%

India ranks second in world fish production, contributing about 5.4 per cent of global fish production.

ECONOMY
Poverty
Poverty can be defined as a social
phenomenon in which a section of the
society is unable to fulfil even its basic
necessities of life.
Magnitude of Poverty in India
The Planning Commission of India has
estimated rural and urban poverty in India
from the sixth Five Year Plan ownwards.
Types of Poverty
1. Absolute
2. Relative
Rural & Urban Poverty
I. Rural Poverty
Main Reasons for Rural Poverty
1. Rapid population growth.
2. Lack of capital.
3. Lack of alternative employment
opportunities other than agricultural.
4. Excessive population pressure on
agriculture.
5. Illiteracy
6. Regional disparities.
7. Joint family system.
8. Child marriage tradition.
9. Indifferent attitude towards investment.
10. Lack of proper implementation of
public distribution system.
Government Efforts for Eliminating
Rural Poverty
1. Legal elimination of bonded labourers
2. Preventing the centralisation of wealth
by modifying the law
3. Antyodaya plan
4. Small Farmer Development Programme
(SFDP)
5. Drought Area Development Programme
(DADP)
6. Twenty Point Programme
7. Food for Work Programme
8. Minimum Needs Programme (MNP)
9. Integrated Rural Development Programme
(IRDP)
10. National Rural Employment Programme
(NREP)
11. Rural Labour Employment Guarantee
Programme (RLEGP)
12. Jawahar Gram Samriddhi Yojana (JGSY)
(Formerly known as Jawahar Rojgar
Yojana)
Food Corporation of India was established in 1965.
EBD_7239
GK-25
13. TRYSEM scheme
14. Family Planning/Welfare programme for
population control
15. Employment Assurance Scheme
16. Scheme for Rural artisans / craftsmen
17. DWCRA programme
18. Swarna Jayanti Gram Swarozgar Yojana
19 Mahila Samriddhi Yojana
20 National Social Assistanc Programme (NSAP)
21 Group Life Insurance Scheme for Rural
Areas
22. Rural Housing Programme
23. Pradhan Mantri Gramodaya Yojana
(PMGY)
24. Swarna Jayanti Gram Swarojgar Yojana
25. Sampurna Gramin Rojgar Yojana
26. Indira Awaas Yojana
27. Samagra Awaas Yojana
28. Pradhan Mantri Rojgar Yojana
29. Agriculture Income Insurance Scheme
30. Mahatma Gandhi National Rural
Employment Guarantee Scheme
(MGNREGS)
II. Urban Poverty
Main Reasons for Urban Poverty
1. Migration of rural youth towards cities.
2. Lack of vocational education /training.
3. Limited job opportunities of employment
in the cities.
4. Rapid increase in population.
5. Lack of housing facilities.
6. No proper implementation of public
distribution system (PDS).
Government Efforts for Eliminating
Urban Poverty
1. Emphasis on vocational education.
2. Nehru Rozgar Yojana (NRY).
3. Self-Employment Programme for the
Urban Poor (SEPUP).
4. Financial assistance for constructing houses.
5. Self-Employment to the Educated Urban
Youth (SEEUY) Programme.
6. Prime Minister’s Rozgar Yojana (Also
implemented in rural areas).
7. National Social Assistance Programme.
8. Urban Basic Services for the Poor (UBSP)
Programme.
 GK-26
9. Prime Minister’s Integrated Urban Poverty
Eradication Programme (PMIUPEP).
10. Swarna Jayanti Shahri Rozgar Yojana.
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.
Types of Unemployment
Types of Unemployment are as follow
Under-Employment
Those labourers are underemployed
who obtain work, but their efficiency and
capability are not utilised at their optimum
and as a result they contribute in the
production up to a limited level.
Structural Unemployment
This type of unemployment is associated
with economic structure of the country, i.e.
productive capacity is inadequate to create
a sufficient number of jobs.
Open Unemployment
When the labourers live without any
work and they don’t find any work to do,
they come under the category of open
ECONOMY
unemployment. The migration from rural
to urban area in search of work is very often
found in India, which is an example of open
unemployment.
Classical Unemployment
This type of unemployment problem arises
when the wages rise above the equilibrium
full employment level.
Disguised Unemployment
If a person does not contribute anything in
the production process or in other words, if
he can be removed from the work without
affecting the productivity adversely, he will
be treated as disguised unemployed.
Frictional Unemployment
Frictional unemployment is the time period
between jobs when a worker is searching
for or transitioning from one job to another.
Cyclical Unemployment
The demand for labour increase with the
economy in the boom phase. Again, when
the economy passes though recession,
demand for labour contracts and the
surplus is released as the unemployed
labour force.
Seasonal Unemployment
It appears due to a change in demand based
on seasonal variations. Labourers do not
get work round the year.

NREGS (NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME)

After the notification of ambitious step of UPA government of the National Rural
Employment Guarantee Act on September 7, 2005, a new scheme named “National
Rural Employment Guarantee Scheme (NREGS)” (It was later changed with the name
Mahatma Gandhi National Rural Employment Guarantee Act) has been launched on
February 2, 2006. The objective of this scheme is to provide 100 days of employment to
begin with, through asset-creating public works every year at minimum wages to one-
able bodied person in every poor class household.
The National Rural Employment Guarantee Act came into force in 2006 in India’s 200
most backward districts. In 2007, it was extended to another 130 districts. With effect
from April 1,2008, the Act is to cover all districts.
The following are the major short-comings of NREGS:
•• Lack of adequate professional staff
•• Lack of project planning
•• Bureaucratic resistance of NREGA on account of the widely held belief that it
is much more difficult to make money under NREGS as compared with other
employment programme.
•• Lack of transparency and absence of social audit
•• Inappropriate rates of payment.
 EBD_7239
ECONOMY GK-27

VARIOUS DEVELOPMENT AND EMPLOYMENT PROGRAMME/YOJANA/

SCHEMES IN INDIA – AT A GLANCE
Programme/Plan/ Year of Objective/Description
Institution beginning
Command Area Development 1974-75 To ensure better and rapid utilisation of irrigation
Programme (CADP) capacities of medium and large projects
Twenty Point Programme 1975 Poverty eradication and raising the standard of
(TPP) living
Antyodaya Yojana 1977-78 To make the poorest families of the village
economically independent (only in Rajasthan)
Training Rural Youth for 1 August Programme of training rural youth for self-
Self-Employment (TRYSEM) 15,1979 employment
Integrated Rural Development October 2, All-round development of the rural poor through a
Programme (IRDP) 1980 programme of asset endowment for self-employment
National Rural Employment 1980 To provide profitable employment opportunities to
Programme the rural poor
National Fund for Rural February To grant 100% tax rebate to donors and also to
Development (NFRD) 1984 provide financial assistance for rural development
projects
Industrial Reconstruction March To provide financial assistance to sick and closed
Bank of India 1985 industrial units for their reconstruction
Council for Advancement of September To provide assistance for rural prosperity
People’s Action and Rural 1, 1986
Technology (CAPART)
Jawahar Rozgar Yojana April 1989 For providing employment to rural unemployed
Nehru Rozgar Yojana October For providing employment to urban unemployed
1989
Members of Parliament December To sanction ` 1 crore per year to every Member of
Local Area Development 23, 1993 Parliament for various development works in their
Scheme (MPLADS) respective areas through DM of the district
Scheme of Infrastructural 1993-94 To provide capital through special institutions for
Development in Mega Cities water supply, sewage, drainage, urban transportation,
(SIDMC) land development and improvement of slum projects
undertaken in Mumbai, Kolkata, Bangalore, Chennai
and Hyderabad
Mid-Day Meal Scheme 1995 Improving the nutritional status of children in
government, local body, government aided schools
and Education Guarantee scheme and Alternate
& Innovative education centres with the main
objective of enabling poor children to attend
school regularly
Mahila Samridhi Yojana October 2, To encourage the rural women to deposit money in
1993 Post Office Savings & Account
Kasturba Gandhi August 15, To establish girls schools in districts having low
Education Scheme 1997 female literacy rate
 GK-28 ECONOMY
Programme/Plan/ Year of Objective/Description
Institution beginning
Swarna Jayanti Shahari December To provide gainful employment to urban
Rozgar Yojana (SJSRY) 1997 unemployed and under employed poor through
self-employment or wage employment
Annapurna Yojana March To provide 10 kg foodgrains to senior citizens (who
1999 did not get pension)
Swarna Jayanti Gram April 1999 For eliminating Rural poverty and unemployment
Swarozgar Yojana and promoting self-employment
Jan Shree Bima Yojana Aug. 10, Providing Insurance Security to people living
2000 below poverty line
Pradhan Mantri 2000 To fulfil basic requirements in rural areas
Gramodaya Yojana
Antyodaya Anna Yojana Dec. 25, To provide food security to poor
2000
Pradhan Mantri Gram Dec. 25, To provide good all-weather road connectivity to
Sadak Yojana (PMGSY) 2000 unconnected villages
Vande Mataram Scheme Feb. 9, Major initiative in public-private partnership during
2004 pregnancy check-up
National Food for Work Nov. 14, Programme to intensify the generation of
Programme 2004 supplementary wage employment
Janani Suraksha Yojana April 12, Providing care to expectant mothers
2005
Bharat Nirman Dec. Development of Rural Infrastructure including six
Programme 16,2005 components : Irrigation, Water Supply, Housing,
Road, Telephone and Electricity
Jawaharlal Nehru National 2005 To assist cities and towns in taking up housing and
Urban Renewal Mission infrastructural facilities for the urban poor in 65
(JNNURM) cities in the country
National Rural Health 2005 To provide effective healthcare to rural population
Mission (NRHM) and universal access to healthcare with emphasis
on women
National Rural Employment Feb. 2, To provide atleast 100 days wage employment in
Guarantee Scheme (MNREGA) 2006 rural areas
Beti Bachao Beti Padhao 2014 Generating awareness and improving the efficiency
Yojana of delivery of welfare services meant for women
Pradhan Mantri Jan Dhan 2014 To link poors at grassroot level by providing bank
Yojana accounts
Atal Mission for 2015 To upgrade urban infrastructure across 500 towns
Rejuvenation and Urban and cities
Transformation (AMRUT)
 EBD_7239
ECONOMY GK-29

Programme/Plan/ Year of Objective/Description

Institution beginning
Shyama Prasad Mukherji September To deliver integrated project based infrastructure
Rurban Mission 2015 in the rural areas
Sarva Shiksha Abhiyan 2001 Programme for achievement of universalization of
(SSA) elementary education in a time bound manner
Make in India August To revive manufacturing sector
2015
National Skill Mission July To develop skill and entrepreneurship
2015
Atal Pension Yojana March For Social Security
2015
Pradhan Mantri Jeevan May To provide a renewable 1 year accidental death-
Jyoti Bima Yojana 2015 cum-disability cover of ` 2 lakh for partial/
(PMJJBY) permanent disability to all savings bank account
holders in the age group of 18-70 years for a
premium of ` 330 per annum per subscriber
Pandit Deen Dayal 25th May, To provide training to rural youth to maintain
Upadhyaya Sanchar 2017 mobile towers, repair optical fibers and fix other
Kaushal Vikas Pratisthan communication technologies across the nation
Scheme
Seekho aur Kamao (Learn 2013-14 To improve employability of existing workers,
& Earn) school dropouts etc
Support to Training and 1986-87 To provide skills that give employability to women
Employment Programme
for Women (STEP)
National Career Service 20 July To help job-seekers land up at the job they deserve
(India) 2015
Deen Dayal Disabled 1st April, To create an enabling environment to ensure
Rehabilitation Scheme 2003 equal opportunities, equity, social justice and
(DDRS) empowerment of persons with disabilities

AGRICULTURE
•• Agriculture plays a vital role in India’s
economy.
•• 54.6% of the population is engaged in
agriculture and allied activities (Census
2011).
•• It contributes 17% to the country’s
Gross Value Added.
•• The net sown area works out to be 43%
of the total geographical area. The net
irrigated area is 68.2 million hectares.
•• 12th Five year plan had a target of 4%
agricultural growth rate, with growth in
food-grains at 2% and non-food grains
at 5.6%.
RBI is the nodal agency for implementing monetary policy.
•• This plan puts an emphasis on
improvement in technology, use of
public-private partnership, greater
road connectivity, development of
horticulture, dairying and other related
agricultural field.
Green Revolution in India
•• American Scientist Dr. William Grande
termed it as Green Revolution.
•• During the middle of 60s, Indian
agricultural scientists developed a
number of new high yielding varieties
of wheat by processing wheat seeds
imported from Mexico.
 GK-30 ECONOMY
•• As a result, Green Revolution ensured •• The ARAP comprised of soil health
India’s self-dependence in foodgrains. enhancement, irrigation water
The credit for it goes not only to Nobel supply augmentation and demand
Laureate Dr. Norman Borlaug but also to management, credit and insurance,
Dr. M. S. Swaminathan. technological reforms and assured
remmunerative marketing.
Second Green Revolution
Evergreen Revolution
•• The call for Second Green Revolution
was given by then Prime Minister The pioneer of Indian green revolution
Manmohan Singh at the 93rd Science Dr. M.S. Swaminathan, gave a new call for
Conference in 2006. ‘Evergreen Revolution’ for doubling the
•• The Second Green Revolution aims to present production level of foodgrains from
210 million tonnes to 420 million tonnes.
cover dry land farming and concentrate
For making ‘Evergreen Revolution’ a
on the small and marginal farmers. It
success, he stressed on adopting organic
seeks to raise the food grain production
farming. He also mentioned four pre-requistes
to 400 million tonnes by 2020.
for achieving the success. These are:
Farmer’s Commission i. Promoting soil health.
•• A National Commission on farmers ii. Promoting Lab to Land exhibitions.
was appointed in 2004, under the iii. Making rainwater harvesting compulsory.
Chairmanship of Dr M.S. Swaminathan, iv Providing credit to farmers on suitable
which interalia suggested an conditions.
Agricultural Renewal Action Plan
(ARAP).
AGRICULTURAL REVOLUTION IN A NUTSHELL
Revolution Product Related Person Associated with
Protein Revolution Higher Production (Technology Coined by PM Narendra
driven 2nd Green revolution) Modi and FM Arun Jaitely
Yellow Revolution Oilseed Production (Especially Sam Pitroda
Mustard and Sunflower)
Black Revolution Petroleum products
Blue Revolution Fish Production Dr. Arun Krishnan
Brown Revolution Leather / Cocoa / Non-
Conventional Products
Golden Fiber Revolution Jute Production
Golden Revolution Fruits / Honey Production / Nirpakh Tutej
Horticulture Development
Grey Revolution Fertilisers
Pink Revolution Onion Production / Durgesh Patel
Pharmaceuticals / Prawn
Production
Evergreen Revolution Overall Production of Agriculture Started in 11th 5 year Plan
Silver Revolution Egg Production / Poultry Production Indira Gandhi
Silver Fiber Revolution Cotton
Red Revolution Meat Production/Tomato Production Vishal Tewari
Round Revolution Potato
National Stock Exchange (NSE) was set up in 1984.
 EBD_7239
ECONOMY GK-31

Green Revolution Food Grains Norman Borlaug

M.S. Swaminathan
William Gaud (UK)
White Revolution (Operation Milk Production Verghese Kurien
Flood)

Note: Pink revolution has been used and
propagated by the media in context with
meat production. But Meat and tomato
production are both referred to as “red
revolution.”
Food Security
World Development Report defined food
security as “access by all people at all times
to enough food for an active, healthy life”.
Main components of the food security
system
1. Promoting domestic production to meet
the demands of the growing population
and also to reduce under-nutrition among
quite a large section of the population
2. Providing minimum support prices for
procurement & storage of food items
TIMELINE OF PDS: 1930s TO PRESENT
3. Operating a Public Distribution System
4. Maintaining buffer stocks so as to take
care of temporary shortage of food
arising due to natural calamities.
Public Distribution System (PDS)
•• It is established by the Government of
India in an Indian Food Security system.
•• It distributes subsidised food & non-
food items to India’s poor.
•• Major commodities distributed include
staple foodgrains, such as wheat,
rice, sugar and kerosene oil, through
a network of public distribution
shops, (also known as ration shops)
established in several states across the
country.
•• Food Corporation of India procures
and maintains the PDS.

Evolution of PDS Timeline Details

PDS 1940s As general entitlement scheme
RPDS June 1992 It covered 1775 blocks.
TPDS 1947 To target poor households
Antyodaya Anna 2000 Scheme launched to target the “poorest of the
Yojana poor”
PDS Control Order 2001 To administer TPDS
PUCL vs. Union of 2001 Ongoing case in Supreme Court, contending
India that “right to food” is a fundamental right
National Food 2013 Act to provide legal right to food to the poor
Security Act 2013
Minimum Support Price of Agriculture Production
Minimum Support Price (MSP) announced by the Government is the price at which
Government is ready to purchase the crop from the farmers directly, if crop price becomes
lower than MSP. As a result, market price of the crop never comes down from the levels of
MSP. The minimum price security gives incentives to farmers to increase their production.

Asia’s first Export Processing Zone (EPZ) was set up in Kandla in 1965.
 GK-32
NABARD
A National Bank for Agriculture and Rural
Development (NABARD) was set up in July
1982 by an Act of Parliament to take over
the functions of ARDC and the refinancing
functions of RBI in relation to co-operative
banks and RRBs. NABARD is linked originally
with the RBI by the latter contributing half
of its share capital, the other half being
contributed by the Government of India
and nominating three of its Central Board
Directors on the board of NABARD, besides
a Deputy Governor of RBI being appointed
as Chairman of NABARD.
Functions of NABARD
(i) It provides refinance facilities to all
banks and financial institutions
lending to agriculture and rural
development.
(ii) It provides short-term, medium-
term and long-term credits to State
Co-operative Banks (SCBs), RRBs,
IMPORTANT COMMITTEES AND THEIR RECOMMENDATIONS
ON AGRICULTURE
S.No. Name of the Establishment Objectives
Committee
1 Arvind 11th July, 2016
Subramanian
2 Ashok Dalwai 22nd April,
Committee 2016
3 Hanumantha January, 1997
Rao Committee
ECONOMY
LDBs and other financial institutions
approved by RBI.
(iii) NABARD gives long-term loans (up
to 20 years) to State Governments
to enable them to subscribe to the
share capital of co-operative credits
societies.
(iv) NABARD gives long-term loans to any
institution approved by the Central
Government.
(v) NABARD has the responsibility of co-
ordinating the activities of Central
and State Governments, the Planning
Commission and other all- India and
State level institutions entrusted with the
development of small scale industries, village
and cottage industries, rural crafts, industries
in the tiny and decentralised sectors, etc.
(vi) It has the responsibility to inspect
RRBs and co-operative banks, other
than primary co-operative societies.
(vii) It maintains a Research and
Development Fund to promote research
in agriculture and rural development.
Recommendations
To address To increase the buffer
the issue of stocks to 20 lakh tonnes
escalating prices from the existing 8 lakh
of pulses tonnes
To import pulses from
countries like Mozambique
and Myanmar
To prepare Reduce the risk of
a blueprint farming by diversifying
for doubling to horticulture and allied
farmers’ income activities like livestock and
by 2022 fisheries to boost income
To review the A uniform Normative
existing system Referral Price (NRP) be
of subsidization fixed for existing gas based
of urea; suggest urea units and also for DAP.
an alternative A Feedstock Differential
broad-based, Cost Reimbursement (FDCR)
scientific and could be given for a period
transparent of five years for non-gas
methodology urea units.
 EBD_7239
ECONOMY GK-33

4 Mahajan 1997 To study the Complete Decontrol Of

Committee development Sugar Price
and growth
of the sugar Supply Of Sugar Through
industry in PDS
India; Modify, Establishment of
amend and Sugarcane Pricing Board
repeal existing
laws
5 Second Food 1947 To emphasize Gradual abolition of the
Grains Policy the need to food controls
Committee increase the
indigenous Rationing and import for
production of the maintenance of the
food grain in the reserve stocks
country

WELFARE SCHEMES/YOJANA FOR AGRICULTURE

S.No. Name Launch Objectives

1 Mera Gaon August, 2015 To provide farmers with required
Mera Gaurav information, knowledge and advisories on
regular basis by adopting villages
2 Rashtriya 2007-08 To incentivize states to enhance investment
Krishi Vikas in agriculture and allied sectors to achieve
Yojana 4% growth rate
3 National 2005-06 For promotion of holistic growth of
Horticulture horticulture sector, including fruits,
Mission vegetables, root and tuber crops, mushroom,
spices, flowers, aromatic plants, cashew and
cocoa
4 Livestock 2005-06 Providing protection mechanism to the
insurance farmers and cattle bearers against any
eventual loss of their animals due to death
5 National 1991-92 To provide basic amenities like housing,
Scheme on drinking water, community hall etc. for
Welfare of fishermen
Fisherman
 GK-34 ECONOMY

INDUSTRIES

Types of Industries

Primary Secondary (Manufacturing) Tertiary (Services)

Production of Transform raw material into Provide services to other

goods with help finished product with the people & industries
of nature help of manpower machines.

Eg. Agriculture, Heavy & Light Industries, Travel & Tourism,

Forestry, Fishing, Automobile, Oil Refining, Information Technology,
Horticulture Textile, Energy Production etc.

Liberalisation 2. Globalisation: It refers to a process

Liberalisation is a relaxation of government
restrictions, usually in areas of social,
political and economic policy. It is commonly
known as free trade. It implies removal of
restrictions & barriers to free trade.
1. Privatisation: Privatisation can be
partner and players in the global
defined as the transfer of ownership
arena & control of public sector units to
private individuals or companies.
whereby there are social, cultural,
technological exchanges across the border.
Structure of PSEs in India
The PSEs in India are basically categorised
under four broad types based on their
ownership structure. These include:
(i) departmental undertakings
(ii) statutory corporations
(iii) government-owned companies
(iv) autonomous bodies set up as registered
societies

Public Enterprises

Autonomous Bodies
Departmental Statutory Government Registered under
Undertakings Corporations Companies Societies
Registration Act

• Railways • Airport Authority of • Steel Authority of • Indian Council of

• Post India India Ltd. Agricultural
• All India Radio • National Highway • Coal India Ltd. Research
• Doordarshan Authority of India • Hindustan Copper • Council of Scientiic
• Food Corporation Ltd. & Industrial
of India • State Bank of India Research
• Industrial Finance
Corporation of India

MSME is the largest job provider and contributes about 8% to the GDP of India.
 EBD_7239
ECONOMY GK-35

(i) Departmental undertakings •• It is registered under the Indian

•• Departmental undertakings are
primarily meant to provide essential
services such as railways.
•• They function under the control
of the respective ministries of
Government of India (GOI).
(ii) Statutory corporations
•• Statutory corporations are
public enterprises that came into
existence by a Special Act of the
Parliament.
•• The Act defines the powers and
functions, rules and regulations
governing the employees and the
relationship of the corporation
with government departments.
(iii) Government-owned companies
•• Government-owned or controlled
companies refer to companies in
which 51% or more of the paid up
capital is held by the central or any
state government (partly or wholly
by both).
Companies Act and is fully governed
by the provisions of this Act.
(iv) Autonomous bodies
•• Autonomous bodies are set up
whenever it is felt that certain
functions need to be discharged
outside the governmental set up
with some amount of independence
and flexibility without day-to-day
interference from the governmental
machinery.
•• These bodies are set up by the
concerned ministries or their
departments and are funded
through grants-in-aid, either fully
or partially, depending on the extent
which such institutes generate
internal resources of their own.
•• They are mostly registered as
societies under the ‘Societies
Registration Act’ and in certain cases
they have been set up as statutory
institutions under the provisions
contained in various Acts.

CENTRAL PUBLIC SECTOR ENTERPRISES (CPSE) ROLE IN ECONOMY

•• CPSE investments have a multiplier effect on the economy
During the first five-year plan (1950-51 to 1955-56) there were only 5 CPSEs with
a total financial investment (Including equity plus long-term loans) of `290 million,
whereas at present, in 2015, there are as many as 290 CPSEs, wherein, 169 are Holding
CPSEs and 121 are the subsidiaries. As of March 31, 2012, the total financial investment
of CPSEs was 7,292.3 billion, showing a CAGR of around 12% during the same period.
•• CPSEs continue to dominate domestic output of key sectors
CPSEs continue to hold control across several industries, despite opening up of several
sectors for private investment. CPSEs continue to have complete monopoly in nuclear
power generation. Other leading areas of dominance are coal (over 80%), crude oil
(over 70%), refineries (over 55%) and wired lines (over 80%). However, their share
has decreased considerably, with the exception of coking coal and power generation.

Maharatna, 17 Navratna and 74 Miniratna

Classification of Corporations/
Government Companies
Corporations & Government companies are
divided into three categories - Maharatna,
Navratna and Miniratna. As per available
information (Sep, 2017), there are 8
MSME contributes about 40% to India’s exports.
Companies in India.
Maharatna
Criteria for grant of Maharatna status
The CPSEs fulfilling the following criteria
are eligible to be considered for the grant of
Maharatna status.
 GK-36
(i) Having Navratna status.
(ii) Listed on Indian stock exchange with
minimum prescribed public shareholding
under SEBI regulations.
(iii) Average annual turnover of more than `
25,000 crore, during the last 3 years.
(iv) Average annual net worth of more than `
15,000 crore, during the last 3 years.
(v) Average annual net profit after tax of
more than ` 5,000 crore, during the last 3
years.
(vi) Should have significant global presence/
international operations.
Companies
1. Bharat Heavy Electricals Limited
2. Coal India Limited
3. GAIL (India) Limited
4. Indian Oil Corporation Limited
5. NTPC Limited
6. Oil & Natural Gas Corporation (ONGC)
Limited
7. Steel Authority of India Limited
8. Bharat Petroleum Corporation Limited
Note: The decision to elevate BPCL to
Maharatna status was taken by a panel
headed by the cabinet secretary in
September 2017.
Navratna
Criteria for grant of Navratna status
The Miniratna Category – I and Schedule ‘A’
CPSEs, which have obtained ‘excellent’ or
‘very good’ rating under the Memorandum
of Understanding system in three of the last
five years and have composite score of 60
or above in the six selected performance
parameters, namely,
(i) net profit to net worth
(ii) manpower cost to total cost of production/
services
(iii) profit before depreciation, interest and
taxes to capital employed
(iv) profit before interest and taxes to
turnover
(v) earning per share
(vi) inter-sectoral performance
Companies
1. Bharat Electronics Limited
2. Container Corporation of India Limited
3. Engineers India Limited
4. Hindustan Aeronautics Limited
Indian Railway network is the biggest railway network of Asia.
ECONOMY
5. Hindustan Petroleum Corporation
Limited
6. Mahanagar Telephone Nigam Limited
7. National Aluminium Company Limited
8. National Buildings Construction
Corporation Limited
9. NMDC Limited
10. Neyveli Lignite Corporation Limited
11. Oil India limited
12. Power Finance Corporation Limited
13. Power Grid Corporation of India
Limited
14. Rashtriya Ispat Nigam Limited
15. Rural Electrification Corporation Limited
16. Shipping Corporation of India Limited
17. National Buildings Construction
Corporation Ltd.(NBCC)
Industrial Policy 1991
(A) Main Features (Objective)
•• To maintain a sustained growth in
productivity
•• To enhance gainful employment
•• To achieve optimum utilisation of
human resources
•• To attain international competitiveness
•• To transform India into a major partner
and players in the global arena
(B) Main Focus on
•• Deregulating Indian industry.
•• Allowing the industry freedom &
flexibility in responding to market forces
•• Providing a policy regime which
facilitates and fosters growth of Indian
industry
(C) Policy Measures
(i) Liberalisation of Industrial Licensing
Policy
(ii) Introduction of Industrial Entrepreneur’s
Memorandum (i.e. no industrial approval
is required for industries not requiring
compulsory licensing)
(iii) Liberalisation of Locational Policy
(iv) Liberalised policy for Small Scale Sectors
(v) Non-Resident Indians Scheme (NRIs are
allowed to invest upto equity on non-
repatriation basis in all activities except
for a small negative list)
(vi) Electronic Hardware Technology Park
(EHTP)/ Software Technology Park (STP)
Scheme for building up strong electronic
industry to enhance exports

ECONOMY
(vii) Liberalised policy for Foreign Direct
Investment (FDI)
(viii) Abolition of the MRTP limit
(ix) FERA was replaced by highly liberal
FEMA
Core Industries
There are 8 core industries in the economy
having a weightage of 38% in the IIP
(Index of industrial production). The 8 core
industries are-Coal, Crude oil, Natural Gas,
Petroleum Refinery production, Fertilizess,
Steel, Cement and Electricity.
MAJOR INDUSTRIES
Biotechnology Industry in India
India is among the top 12 biotech
destinations in the world and ranks third in
the Asia-Pacific region.
The Indian biotech industry holds about 2%
share of the global biotech industry.
Biopharma is the largest sector contributing
about 64% of the total revenue followed
by bioservices (18%), bioagri (14%),
bioindustry (3%) and bioinformatics
contributing (1%).
Cement Industry in India
India is the second largest producer of
cement in the world. India’s cement
industry is a vital part of its economy,
providing employment to more than a
million people, directly or indirectly.
Gems and Jewellery Industry in India
•• India is one of the largest exporters of
gems and jewellery and the industry
is considered to play a vital role in
the Indian economy as it contributes
a major chunk to the total foreign
reserves of the country.
Manufacturing Industry in India
•• Manufacturing sector grew at a CAGR of
7.32 per cent between FY12 and FY17.
•• The sector grew 7.7 per cent in FY17
•• The wholesale price index, in respect of
manufactured goods, grew 2.4 per cent
between April 2016 and January 2017.
•• The Index of Industrial Production (IIP)
is prepared by the Central Statistics
Office to measure the activity happening
The Industrial Policy Resolution 1948, was the first economic policy of our country.
EBD_7239
GK-37
in three industrial sectors namely
Mining, Manufacturing and Electricity.
•• It is the benchmark index and serves
as a proxy to gauge the growth
of manufacturing in India, since
manufacturing alone has a weight of
77.63 per cent in the index.
•• The manufacturing component of the
IIP recorded 4.9 per cent growth in
FY17 while 1.8 per cent growth in Q1
FY18.
Oil and Gas Industry in India
•• The oil and gas sector is among the
six core industries in India and plays
a major role in influencing decision
making for all the other important
sections of the economy.
•• Oil consumption has expanded at a
CAGR of 3.3 per cent during FY2008–
16F to reach 4.0 mbpd by 2016.
•• The demand of Petroleum Oil and
Lubricants grew at a Compound Annual
Growth Rate (CAGR) of 5.6 per cent
under the 12th Five Year Plan (2012-17)
•• Due to the expected strong growth in
demand, India’s dependency on oil
imports is likely to increase further.
•• Rapid economic growth is leading
to greater outputs, which in turn
is increasing the demand of oil for
production and transportation.
•• With rising income levels, demand for
automobile is estimated to increase, in
turn, leading to an augmented demand
for oil and gas.
Real Estate Industry in India
•• The housing sector alone contributes
5-6 per cent to the country’s Gross
Value added (GVA).
•• It comprises four sub sectors- housing,
retail, hospitality and commercial.
•• In August 2015, the Union Cabinet
approved 100 Smart City Projects in
India.
•• The Government has also raised FDI
limits for townships and settlements
development projects to 100 per cent.
•• Real estate projects within the Special
Economic Zone (SEZ) are also permitted
100 per cent FDI.
 GK-38
•• In Union Budget 2017-18, allocation
of Rs 23,000 crore (US$ 3.57 billion)
has been made for Pradhan Mantri
Awaas Yojana – Gramin, with a target to
complete 10 million houses by 2019 in
rural areas.
•• A new Public Private Partnership (PPP)
policy with eight PPP options has been
unveiled by the Ministry of Housing and
Urban Affairs, Government of India, to
push for investments in the affordable
housing segment.
•• The Reserve Bank of India (RBI) has
proposed to allow banks to invest in
Real Estate Investment Trusts (REITs)
and infrastructure investment trusts,
which is expected to benefit both real
estate and banking sector in diversifying
investor base and investment avenues
respectively.
Textile Industry in India
•• Textile plays a major role in the Indian
economy (i) It contributes 14 per cent
to industrial production and 4 per
cent to GVA. (ii) With over 45 million
people, the industry is one of the largest
sources of employment generation in
the country.
•• The industry accounts for nearly 15 per
cent of total exports.
•• The Indian government has come up
with a number of export promotion
policies for the textile sector. It has also
allowed 100 per cent FDI in the Indian
textile sector under the automatic
route.
•• As of June 2017, the central government
is planning to finalise and launch the
new textile policy in the next three
months. The policy aims to achieve US$
300 billion worth of textile exports by
2024-25 and create an additional 35
million jobs.
IT & ITeS Industry in India
•• India remained the world’s top sourcing
destination in 2016-17 with a share of
55 per cent. Indian IT & ITeS companies
have set up over 1,000 global delivery
centers in over 200 cities around the
world.
The BOP of a country reflects its economic strengths and weaknesses.
ECONOMY
•• The IT industry has also created
significant demand in the Indian
education sector, especially for
Engineering and Computer Science. The
Indian IT and ITeS industry is divided
into four major segments – IT services,
Business Process Management (BPM),
software products and engineering
services, and hardware.
•• Indian IT exports are projected to grow
at 7-8 per cent in 2017-18, in addition
to adding 130,000-150,000 new jobs
during the same period.
•• Digital payments in India rose 55
per cent in volume and 24.2 per cent
in value year-on-year in FY 2016-
17, stated Mr Ratan Watal, Principal
Advisor, Niti Aayog.
•• India plans to create wireless
Technology 5G by the end of the year
2020.
Government Initiatives
In the Union Budget 2017-18, the
Government of India announced the
following key proposals.
•• The Government of India is planning
to set Wi-Fi facility for around 5.5
lakh villages by March 2019 with an
estimated investment of Rs 3,700 crore
(US$ 555 million) and the government
expects to start broadband services
with about 1,000 megabit per second (1
gbps) across 1 lakh gram panchayats by
the end of 2017.
•• All the 400 field offices of the Central
Public Works Department (CPWD)
have been connected through a special
integrated portal.
•• Mr Ravi Shankar Prasad, Union
Minister of Law & Justice and
Information Technology, has launched
a free Doordarshan DTH channel called
DigiShala, which will help people
understand the use of unified payments
interface (UPI), USSD, aadhaar-
enabled payments system, electronic
wallets, debit and credit cards, thereby
promoting various modes of digital
payments.
 EBD_7239
ECONOMY GK-39

•• The Railway Ministry plans to give a Iron & Steel Industry

digital push to the Indian Railways
by introducing bar-coded tickets,
Global Positioning System (GPS) based
information systems inside coaches,
integration of all facilities dealing with
ticketing issues, Wi-Fi facilities at the
stations, super-fast long-route train
service for unreserved passengers
among other developments, which will
help to increase the passenger traffic.
Coal Industry in India
India has the fifth largest coal reserves in
the world. It is a major source of electricity
production in India.
Coal India Limited (CIL) was formed as a
holding company in 1975, incorporating the
state-owned companies that were created
following the nationalisation of India’s coal
assets.
Coal India Limited accounts for around
80% of India’s total coal production.
Started by TISCO at Jamshedpur in 1907.
India is world’s 3rd largest producer of
crude steel. Provides employment to large
number of people. Steel sector contributes to
nearly 2% of GDP. SAIL is the largest public
sector steel producing company. India is the
largest producer of sponge iron in the world.
Travel & Tourism Industry
According to World Economic Forum’s Travel
& Tourism Competitiveness Report 2015, India
ranks 52nd globally out of 141 economies
ranked on Travel & Tourism Competitiveness
Index. Tourism in India accounts for 6.8% of
the GDP & is the 3rd largest foreign exchange
earner for the country.
Foreign Direct Investment Policy
2016
The FDI policy amendments are meant to
liberalise and simplify the FDI policy so as to
provide ease of doing business is the country
leading to larger FDI inflows contributing
to growth of investment, incomes and
employment.

SECTOR WISE FDI LIMITS

Sr. Sector/Activity % of Entry Route
No. Equity/FDI
Cap.
1 Agriculture & Animal Husbandry 100 Automatic
(Only in Floriculture, Horticulture, Cultivation
of Vegetables, Development and Production of
seeds and planning materials, Animal Husbandry,
Pisciculture, Aquaculture, Apiculture and Service
related to agro and allied sector)
2 Plantation sector 100 Automatic
(Tea sector, Coffee plantation, Rubber plantation,
Cardamom plantation, Palm oil and Olive oil tree
plantation
3 Mining 100 Automatic
Mining and Exploration of metal and non-metal
ores including diamond, gold, silver and precious
ores but excluding titanium bearing minerals and
its ores

Deficit financing was first done in the USA.

 GK-40 ECONOMY
Mining and mineral separation of Titanium Government
bearing minerals and ores, its value addition and
integrated activities
4 Petroleum & Natural Gas 100 Automatic
Exploration activities of oil and natural gas fields,
infrastructure related to marketing of petroleum
products and natural gas, marketing of natural
gas and petroleum products, petroleum
product pipelines, natural gas/pipelines, LNG
Regasification infrastructure
Petroleum refining by the Public Sector 49 Automatic
Undertakings (PSU), without any disinvestment
or dilution of domestic equity in the existing PSUs
5 Broadcasting Carriage Services 100 Automatic
i.Teleports(setting up of Up-linking HUBs/
Teleports);
ii.Direct to Home (DTH);
iii.Cable Networks
iv. Mobile TV;
v.Headend-in-the Sky Broadcasting Service(HITS)
Cable Networks(Other MSOs not undertaking up 100 Automatic
gradation of networks towards digitalization and
addressability and Local Cable Operators (LCOs))
Terrestrial Broadcasting FM(FM Radio), subject 49 Government
to such terms and conditions, as specified from
time to time, by Ministry of Information &
Broadcasting, for grant of permission for setting
up of FM Radio stations
Up-linking of ‘News & Current Affairs’ TV 49 Government
Channels
Up-linking of Non-‘News & Current Affairs’ TV 100 Automatic
Channels/ Down-linking of TV Channels
6 Print Media
Publishing of newspaper and periodicals dealing 26 Government
with news and current affairs
Publication of Indian editions of foreign 26 Government
magazines dealing with news and current affairs
Publication of facsimile edition of foreign 100 Government
newspapers
7 Civil Aviation 100 Automatic
Greenfield projects
Existing projects 100 Automatic

The General Budget is presented in Lok Sabha by the Minister of Finance.

 EBD_7239
ECONOMY GK-41

Scheduled Air Transport Service/ Domestic 100 Automatic up to

Scheduled Passenger Airline (b) Regional Air 49% (Automatic up
Transport Service to 100% for NRIs)
Government route
beyond 49%
8 Telecom Services 100 Automatic up to 49%
(including Telecom Infrastructure Providers Government route
Category-I) beyond 49%
9 Banking
Banking- Private Sector 74 Automatic up to 49%
Government route
beyond 49% and up
to 74%.
Banking- Public Sector 20 Government
Credit Information Companies 100 Automatic
10 Defense
Defense Industry subject to Industrial license 100 Automatic up to
under the Industries (Development & Regulation) 49% Government
Act, 1951; and Manufacturing of small arms and route beyond 49%
ammunition under the Arms Act, 1959 wherever it is likely
to result in access to
modern technology
or for other reasons
to be recorded

FDI is prohibited in the following sectors

•• Lottery Business including Government/private lottery, online lotteries, etc.
•• Gambling and Betting including casinos etc.
•• Chit funds
•• Nidhi company
•• Trading in Transferable Development Rights (TDRs)
•• Real Estate Business or Construction of Farm Houses (Real estate business does not
include development of townships, construction of residential /commercial premises,
roads or bridges )
•• Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco
substitutes
•• Activities/sectors not open to private sector investment e.g. Atomic Energy and Railway
operations (other than permitted activities)

Mumbai is the financial capital of India and the headquarter of LIC, NSE, BSE.