Presentation

on

Economic Analysis
Framework

10th Aug 2009

 AGENDA

– The Indian Economy – Key indicators

– Financial Institution - Overview

 INDIAN ECONOMY
 The economy of India is the 12th largest economy in the world by
the market exchange rates and the 4th largest by Purchasing
Power Parity (PPP) basis.

 Indian Economy is a mixed economy with the following features:-

 Agriculture is the main occupation
 Incidence of poverty is high.
 Indian population has grown at a fast rate of more than 2%.
 Techniques of production, especially in the agriculture sector are
still backward.
 The incidence of unemployment is also quite high.
 Economic System

Capitalist Economy Socialist Economy

Mixed Economy
 Indian Economic System
 Mixed Economy
1) Both private and state ownership of mean of production.
2) Co-existence of free price mechanism and economic planning.
3) Co-existence of profit and social welfare motives.
4) Freedom of occupation.
5) Freedom of Consumption.
6) Right to keep property and Right of inheritance.
7) Existence of Trade Cycles.
8) Existence of economic inequalities.
9) Social Welfare Measures.

 Industrial Policy Resolution – 1948

 Public Sector – Basic, Heavy & Strategic
 Private Sector - Rest
 Industrial Policy Resolution – 1948
 Public Sector – Basic, Heavy & Strategic.
 Private Sector – Rest.
 Balanced Economy.
 INDIAN ECONOMIC INDICATORS
 Indian economic indicators are important as they provide
an accurate account of state of Indian economy at various
points of time.
1.GDP – Gross Domestic Product
The most recognized indicator used for assessing a
nation’s economic growth is GDP . GDP equals the market
value of all the products and services that are produced by
the people and property of a given nation in one year
period.
FORMULA :
GDP = Value of total consumption + Amount of Govt.
purchases + Amount invested+ Net exports consumption
2. BALANCE OF PAYMENT :
It is the summary of the economic transactions that occur
between the residents of a given nation with the other countries
for a specific period, usually a year.
3. UNEMPLOYMENT RATE :
This gives the percentage of labor force that is capable of working
but is presently un-hired because of lack of opportunities. The
indicator shows the ‘untapped talent pool’ of a nation.
4. CONSUMER PRICE INDEX :
A consumer price index (CPI) is a measure estimating the
average price of consumer goods and services purchased by
households. It is a measure of price change for a constant
market basket of goods and services from one period to the next
within the same area (city, region, or nation).
ROLE OF DIFFERENT SECTORS
 FINANCIAL INSTITUTION
 A financial institution is an institution that provides financial services
for its clients or members.
 It mainly act as financial intermediaries
 Three major types of financial institution:
1. Deposit taking institutions Banks.
2. Insurance Companies and Pension Funds.
3. Brokers, Underwriter and Investment funds.

FUNCTIONS OF FINANCIAL INSTITUTIONS:-

 Accepting deposits.
 Providing commercial loans.
 Providing Real estate loans.
 Providing Mortgage loans.
 Issuing share certificate.
 FINANCIAL INSTITUTION

Banking Non - Banking

 BANKING INSTITUTIONS

Commercial Banks Regional Rural Banks Co operative Banks

State co operative
Public sector Banks Private sector Banks Banks

State bank Nationalized Distt Co operative

Indian foreign
group Banks banks

State bank of India Subsidiary bank

Primary Credit
Societies

Subsidiary
companies
 NON-BANKING INSTITUTIONS

Investment Credit Guarantee Money Market

Institutions Institutions Institution

LIC GIC UTI

 RESERVE BANK OF INDIA :

Apex financial institution developed on 1st April’ 1935 and

nationalized in 1949.

Functions –
1. Issuing currency notes.
2. Serving as a banker to the Government.
3. Acting as banker’s bank and supervision.
4. Monetary regulation and control.
5. Exchange management and control.
6. Controller of credit.
COMMERCIAL BANKS :

 A commercial bank is a profit seeking business firm,

dealing in money and credit.
 It is a financial institution dealing in deposits money and
advancing loans.

FUNCTIONS OF COMMERCIAL BANK:

 Acceptance of deposits from public.

 Advancing loans.
 Remittance of funds.
 Agency functions.
 General utility functions
 PRESENTED BY

 Faiza Khan
 Rukhsana Tabassum
 Mohd Rehan Baba
 Fazalur Rehman
 Md. Aariz Imam
 Md. Asif Khan

THANK YOU