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Economics Data for Dec. 2011 CPT Examinations
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GDP of India at current prices in 2008-09 Rs.74,97,282.
NNP = NDP when NFIA = 0
The real National Income in India has increased at an annual average rate of 4.4% during 55 years of economic planning.
Tenth Plan targets at an annual average growth rate of 8% in NNP (2002-07) but has achieved only 7.6%.
India’s per capita NNP is increasing at a rate of 2.3% p.a.
Approach paper to Eleventh plan keeps a target of 8.5% p.a. growth rate
Average targeted growth rate of 8% p.a. in Tent plan (02-07) achieved 7.6% p.a.
About 72% of the population of India was dependent on agriculture at the time of independence.
Every third poor person in the world is an Indian.
According to NSSO, in 2004-05 about 22% of population was below poverty line in India. In 2008-09 it was 19%.
The minimum & the maximum age limit of non –working (dependent) group is below 15 years & above 64 years.
The present dependency rate is 40% in India & 33% in other countries.
GDP is calculated at current prices.
India’s per capita income in June 2011 was Rs 54167.00.
The gross domestic savings rate in India 2004-05 was 32.4%.
The rate of gross domestic capital formation in India in 2005-06 33.8%.
The Tenth Plan Estimates aims at creating jobs for 85.29 million person years.
According to 10th Plan estimate (CDS) 55th million person years, people were in unemployed in 05-06.
Percentage of people unemployed in rural areas (CDS Basis) are: Males -7.5% Females -11.6%.
Percentage of people unemployed in rural areas (CDS Basis) are: Males -8% Females -8.7%.
Human well being is measured by Human Development Index (HDI)
HDI was constructed by United Nation Development Programme.
HDI has three basic indicators namely: Longetivity, Knowledge & Standard of Living.
Standard of living is measured in terms of real GDP per capita.
India’s global relative rank as per the latest UNDP report , HDI index is 119 among 177 countries.
HDI Index in 2000 was 577 & in 2004 was 611.
Gini Index is used for measuring inequality of income & wealth.
Range of Gini Index is 0 to 1.
Gini Index of 0 represents perfect equality & that of 1 represents perfect inequality.
Gini Index of India at present 0.34.
The per capita income of India in 2005-2006 was Rs. 20,734 per annum. The three sectors of India are: Primary Sector –
Agriculture & Related activities, Secondary Sector –manufacturing & construction, Tertiary Sector –trade, transport, banking.
The occupational distribution of working population in India of 2001 was: Primary Sector -59.3%, Secondary Sector -18.2%,
Tertiary Sector -22.5%.
Contribution of various sectors in the composition of GDP of India in 2006-07 was Primary Sector -18.5%, Secondary Sector –
26.4%, Tertiary Sector -55.1%.
The current rate of service tax is 10.3%.
In the second plan, a high priority was given for the establishment of basic industries.
India has the First largest rail network in the world.
Metro Rail system has solved the problem of traffic congestion in the metro cities.
Indian Road Network has become one of the largest in the world aggregating 3.34 million kilometers.
The bed population in India is 9.5 per 10,000 population.
RBI was nationalized in 1949. Headquarter in Mumbai.
The installed electricity generating capacity of India in 2004-05 is 1,43,000 MW and it was 1,17,800 in 2000-01.
Land under irrigation in 2002-03 was 70.7 million hectares. It was increased from 22.6 to 70.7.
The literacy rate of India in 2011 was 72.6%.
The number of doctors in 2009 were 74 thousand.
The planning in India is only indicative and not compulsive
Agriculture contributes about one fourth of GDP.
The agro products which were exported at the time of independence were cotton, textile, jute & tea. They accounted for more
than 50% of the total export earnings.
Percentage of people working in agricultural sector came down to 54% in 2004-05
Share of Agriculture in GDP came down to 18% in 2006-07
In 2005-06, the percentage of earnings from the export of agricultural products were: 10.2%
Major agricultural exports are: June, tea, tobacco & coffee.
Special agricultural Product Scheme was started to promote export of fruits, vegetables etc.
In 2005-06, Agro imports in India were 2.5%
.Agriculture has low capital output ratio.
Green Revolution was started in 1966.
The adoption of High Yield Veriety Programme (HYVP) led to an increase in production of food grains.
HYVP was restricted to wheat, rice, jowar & bajra, maize
Green Revolution stressed on (a) Use of HYV seeds (b) proper irrigation facilities (c) Extensive use of fertilizers
The highest production of sugarcane was in 2006-07 which was 315.5 million tonnes
Green Revolution is also called Wheat Revolution.
Agricultural Productivity is also measured in terms of yield per hectare of land.
Rain Water Harvesting is an example of scientific water management.
The land tenure ststeme or the agrarian systems prevailing in the country at the time of independence were zamindari system,
mahalwari system and ryotwari system.
In all the above systems land was cultivated by tenants and they paid rent for the use of land.
Proficiency Notes on Economics (Macro)
fjtYV rks cl cnykuh Dyklst gh nsrk gS A
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The objectives of these land reforms were: (a) Abolition of intermediaries (b) Tenancy Reforms (c) Reorganization of
agriculture.
Agriculture productivity has increased at a rate of 2.06%.
Rate of growth of Food grains is 2.42%.
Measures taken under the tenancy reforms were: (a) Regulation of rent (b) Security of tenure (c) Conferment of ownership rights
on tenants.
the maximum limit of land that a family could hold was 18 acres of wetland or 54 acres of un irrigated land.
The current rate of agricultural loan is 12%.
About 60% of the net sown area is rain fed.
44% of the gross cropped area is covered by HYVP.
Only 40% of the gross cropped area has irrigation facilities.
Regional Rural banks were established in 1975.
NABARD set up in 1982, is known as the apex bank for agriculture.
Food corporation of India provides storage facilities to farmers.
Industrial Sector faced the process of retrogression & deceleration during 1965 -1980 (4.1%)
Industrial sector can absorb ever increasing labour force.
Industries engage 18% of labor force in India.
77% of export earnings are contributed by industrial goods.
Industrial Growth helps the economy to attn self sustaining growth.
Direct Taxes are progressive in nature and indirect taxes are regressive or differential in nature.
Income tax was introduced in 1860, abolished in 1873 and reintroduced in 1886.
Gift tax was introduced in 1958 and abolished in 1998. Again restarted in April 2005 @ of 30%.
The maximum rate of custom duty is 10%.
MODVAT was introduced in 1986-87.
CENVAT was introduced in 2000-01.
At present, the ratio of direct taxes to indirect taxes is 20:80 (currently, share of direct tax 35%, indirect tax -65%)
Agricultural income is wholly exempted from Income Tax.
In India in 2006-07, the % of direct taxes in GNP is 5%.
The rate at which the black money is generated is 50% of country’s GDP.
MODVAT was replaced by CENVAT.
Tax revenue form about 20% of total national income of India in 2005-06.
Tax revenue collected by the centre & state have been more than Rs. 6,89,000 crores in 2006-07.
Only 2.5% of 115 crore population is liable to pay income tax.
One of the largest source of tax revenue is union Excise Duy.
Service tax is a form of indirect tax imposed on specific services called taxable service. It was introduced in the year 1994-95.
Service sector contributes only 7.8% towards tax revenues. The cost of tax collection has been increased to more than Rs. 3,663
crores in 2006-07.
Classification of industries on the basis of end use: (a) Basic Good Industries –minerals, cement, etc. (b) Capital Goods
Industries – rubber, plastic, etc. (d) Consumer Goods – watches, cosmetics, etc.
In 2006-07 the share of industrial sector in GDP was 26.4%.
Manufactured goods contribute about 72% of export earnings of India.
Per capita income of India is just Rs 45136.
The industrial production has grown at a rate of 6.2% over the planning period.
The tenth Plan aimed at a growth rate of 10% in the industrial sector.
The manufacturing growth rate of India in 2005-06 is 9 9.1% and 11.5% in 2006-07.
The 11th plan aims at 8.5% p.a. growth in the GDP. This will require industry to grow at 10% paand manufacturing at 12%
during the 11th plan.
MRTP stands for Monopolies & Restrictive Trade Practices. It is also known as Competition Act.
Mahalonobis Model (in the second plan) stressed upon the establishment of capital & basic good industries.
FMCG stands for Fast Moving Consumer Goods.
The growth rate of industrial goods in 2005-06 was: (a) Basic Goods – 6.7% (b) Capital Goods – 15.8% (c) Intermediate Goods
– 2.5%. The rate of Consumer durable goods was 15.3%.
In the Second Plan, Public Sector Steel Plants were set up in Bhilai, Rourkela & Durgapur.
The production in small & cottage industries have been increased to more than 4,76,000 crores in 2005-06. They contribute 39%
of the value of output in the manufacturing sector.
The small scale sector employed nearly 546 lakhs persons in 2008-09.
Exports from the small scale sector increased to more than Rs. 1,24,000 crores in 2004-05. It contributes about 45% of the
manufacturing exports & 34% of total exports.
The average under utilization of capacity in the industrial sector is 40% to 50%.
NOC stands for NO Objection Certificate.
There were 239 public sector industrial units in 2006 and the number of private sector industries have increased to 80.
In manufacturing sector micro enterprise are the units with an investment upto Rs. 25 lakhs, enterprises with an investment
between Rs. 25 lakhs & Rs. 5 crores are called small enterprises, units with investment between Rs. 5 crores & Rs. 10 crores
are called medium enterprises.
In service sector, investment upto Rs. 10 lakhs – Micro units, between Rs. 10 lakhs & Rs. 2 crores – small enterprises, between
Rs. 2 crores & Rs. 5 crores – Medium enterprises.
ICOR stands for Incremental Capital Output Ratio.
SEZ stands for Special Economic Zones
About 98% of the sick units in India are small units. (total sick units 1.71 lakhs).
Tertiary sector accounts for the largest share in GDP.
India’s share in world’s total export service is 2.3% as compared to 1.9% in 2004 & 0.57% in 1990.
BPO stands for Business Process Outsourcing.
Proficiency Notes on Economics (Macro)
fjtYV rks cl cnykuh Dyklst gh nsrk gS A
2
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Services accounted for 35% of total exports in India in 2004-05.
Indian services exports by 72% at present.
In 2005, India is ranked 11th among the list of exporters of service.
Working Population is about 40% of total population.
For highest income slab income tax rate was as high as 97.75%
Estate duty (levied on total property passing to the heirs on the death of a person) was introduced in 1953 and was abolished in
1985.
Annual tax on wealth was introduced in 1957 and abolished on 1.4.1993.
Import duties are generally levied on the basis of ad valorem (as a % of the price of the commodity)
Vat (Value added tax) was introduced in 1999 and implemented in April 2005.
Service tax is levied on 112 different taxable service.
The average growth rate of service sector during the Tenth Plan turns out to be around 9% p.a. The 11th Plan aims at an annual
average growth rate of 9.4% for the service sector.
Service Sector grew by around 9.2% in 2004-05 & by 7.8% in 2005 -06. The construction services have grown by 12.5% during
2004-05 & 2005-06.
India has largest scientific & technical manpower in the world.
Banglore, the silicon city of India, is facing the problem of traffic congestion.
Industrial Sector acts as a catalyst in the development of other sectors.
More than 25% of the produce was taken away by the intermediaries.
Second green revolution is urgently needed to raise the growth rate of agricultural GDP to 4%.
Micro Small & Medium enterprises Development Act 2006 has broadly classified the enterprise in those engaged in (i)
Manufacturing (ii) Providing services.
The accumulated losses of Central public Sector units stood at Rs. 73150 crores in 2005-06 compared to Rs. 83725 crores in
2004-05
Under Export Import policy (2002-07) service sector increased by around 10% in 2004-05 and 2005-06. Financial services grew
by 9.2% in 04-05 and 9.7% in 2005-06.
India’s Medicine system –Ayurveda, Unani, Nature care
IT enabled services such as BPO (business process outsourcing) have been growthing rapidly @ 60-70%.
Density is measured in terms of number of persons per square Kilometer.
In 2001, density of population was 324 persons per square kilomether.
Kerela, West Bengal, Bihar & U.P. have density higher than the average density.
Sex ratio is measured in terms of females per thousand males.
In kerela, the sex ratio for females is favourable.
If death rate is high, life expectancy will be low.
In 2001 life expectancy rate was 63.8.
In India, only 1/4th of males & 1/12th of females are literate.
In India, 65.38% of the world’s population was literate in 2001.
[Males 75.85% & Females 54.16%]
Kerela has the highest literacy rate in India i.e. of 90%
Causes of rapid growth of population are (a) high birth rate (b) relatively lower death rate (c) immigration.
Population Explosion is a transitory phase according to the theory of Demographic transition.
Literacy rate in 2001 was – Males (Urban) 86%, Female (Urban) 73%; Mate (Rural) – 71% & Female (Rural) -46%.
Literacy rate in Kerela -90%, Goa -82%, Tamil Nadu -73% and 77% in Mahrashrta & Himachal Pradesh.
National income rose by more than 17 times during 1950-51 to 2005-06. The population rose by more than 2 times and the per
capita income rose by more than 4.5 times.
Total Production of food grains in India in 2006-07 was 209 million tones.
The per capita domestic availability of food grains in 2004-05 was 422 grams per day.
The population of India in 2005-06 was 111 crores.
The rural population of India in 2001 was 72.2%.
India covers about 2.4% of world’s area.
In size of population India ranks second in the world.
China has the highest population in the world.
India accommodates about 16.7% of the world’s population.
Every sixth person in the world is an Indian.
Year 1921 is known as the ‘Year of Great Divide’ for India’s population:
Birth Rate & Death Rate is measured in per thousand of population.
Birth rate in 2005 was 23.8 (25.4 in 2001) and Death Rate in 2005 was 7.6 (8.4 in 2001)
The growth rate of population became negative in India in 1901-1921.
West Bengal is the most densely populated state in the country where about 904 persons are living per square km. West Bengal
is followed by Bihar with 880 persons living per square km.
In India, around 63% of the population is in the age group of 15064 years and 37% of population is unemployed.
Poverty which is not related to the income or consumption expenditure or distribution is called absolute poverty.
Poverty which is related to the income or consumption expenditure or distribution is called relative poverty.
Absolute Poverty is relevant for less developed countries whereas relative poverty is relevant for developed countries.
Percentage of population below poverty line is 27% in rural areas and 24% in urban areas.
The minimum daily consumption of calories in urban areas is 2100 calories and in rural areas is 2400 calories.
As per 2005 cesus, a person having an income of less than Rs. 368 p.m. (rural areas) & Rs. 559 p.m. (urban areas) and
consuming less than 2400 cal. Per day (rural) & 2100 cal. Per day (urban) are considered to be below poverty line.
The Tenth plan aims top reduce poverty to 19.3% by 2007 & 11% by 2012.
Agriculture contributes to about 18% of GDP.
The following programmes were started for poverty alleviation:
Proficiency Notes on Economics (Macro)
fjtYV rks cl cnykuh Dyklst gh nsrk gS A
3
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Pradhan Mantri Gram Sadak Yojna (PMGSY) – December, 2000. Upto December, 06 a total length of 107569 km of road work
has been completed.
Indira A was Yojna (IAY)
Swaran Jyanti Gram Swarozgar Yojna (SGSY) –April, 1999 SGSY = Integrated Rural Development Programme (IRDP) +
Million wells Programme (MWS) + Allied Programmes. Upto December, 06 73.25 lakh swarojgars have been assisted.
Sampoorna Grammen Rozgar Yojna (SGRY) – 2001
SGRY = Employment assurance Scheme (EAS) + Jawahar Gram Samridhi Yojna (JGSY)
National Food for Work Programme (NFFWP) – Nov, 2004 , Till Jan 2007, 3,47 crore job cards have been issued and of 1.50
crores households who demanded employment, 1.47 crores have been provided with it.
National Rural Employment Guarantee Act (NREG) – The act was passed in September 05 and the scheme was launched in Feb
06, SGRY & NFFWP would be submerged in it.
Swarn Jyanti Shahri Rozgar Yojna (SJSRY) December, 1997, SJSRY = Nehru Rozgar Yojna + Urban Basic Services
Programme + P.M’s Integrated urban Poverty Eradication Prog..
Drougth Prone Area Programme (DPAP) – 1973-74
Desert Development Programme (DDP) -1977-78
Integrated Wastelend Development Programme -1989-90
Valmiki Ambedkar Awas Yojna (VAMBAY) -2001.
About 10% of the population is unemployed.
Cafetera approach is a approach in which various contraceptive methods were offered and the acceptors had the freedom to
choose any of the methods.
The current unemployment rate according to the above staus’s are: UPS -2. 14%, CWS-5.12%, CDS- 9.09%.
MTA stands for Mid Term Appraisal.
Unemployment problem gained attention after the 5th Plan.
The highest rate of unemployment is in Sri Lanka.
The result of the 61st round of the NSSO shows that above 97 million persons were provided employment during 2000-2005.
As per 2000 census, unemployment was highest in Sri lanka (8%) and lowest in Malaysia (3%). India’s unemployment level
was 4.3%.
The result of the 61st round of the NSSO shows that above 47 million persons were provided employment in 2000-05.
Labour Force Participation rate (LFPR) is defined as the number of persons in the labour force per 1000 persons.
In India most of the unemployment is of Structural & Cyclonic type.
The unemployment rate in India is:
Rural
Urban
Males
5.6 to 9%
6.7 to 8.1%
Females
5.6 to 9.3%
10.5 to 11.7%
About 1/3rd portion of India’s workforce is disguisedly unemployed.
Tenth Plan aims at creating 50 million jobs.
Labour Force Participation rate is defined as the number of persons in the labour force per 1000 population.
Employment & unemployment can be measured through: (a) Current Daily Status (CDS) (b) Current Weekly Status (CWS) (c)
Usual status (UPS)
Usual status gives us the lowest measure of unemployment.
Work Force Participation rate (WFPR) is defined as the number of persons/person days employed per 1000 person/ person days.
The latest round of NSSO was conducted during July 2004- June 2005.
Daily Status > Current weekly status > Usual status.
9% of the labour force is unemployed.
NPP stands for National Population Policy which started in 2000.
ISM stands for Indian System of Medicines.
Tenth Plan targets to reduce decadal growth rate of population to 16.2% between 2001-2011
Tenth Plan aims to reduce infant mortality rate to 45 per thousand by 2007 and 28 per thousand by 2012.
Tenth Plan aims to reduce maternal mortality rate to 2 per thousand live births by 2007 and 1 per thousand live births by 2012.
The Eight Plan aimed at complete eradication of illiteracy in the age group of 15-35.
Ratio between growth of population and growth of capital formation to maintain existing standard of living is 4: 1
Family planning was organized in 1966.
Emergency period was declared in 1975-77.
National population Policy 2000 was adopted to encourage two child norm.
The important infrastructure services provided are –(a) Energy (b) Transport (c) Communication (d) Education (e) Health 2.33%
rise in Industrial Production in the world is accompanied by 2% increase in energy consumption.
About 50% of the population does not have the purchasing power to enter the market for commercial energy.
Firewood & Dung Cakes are the most important non commercial traditional source of energy.
About 23% of the energy consumed is obtained from non commercial sources.
The major users of commercial energy are the industries (50%).
In 2005-06 the total installed capacity of generating power is 1,43,800 MW.
There has been nearly 60 times increase in the installed capacity.
Of the present capacity of electricity, thermal sector – 62%, hydel sector -22.5%, nuclear sector 2.5% rest in others.
The contribution of various sources in generation of power are :
Thermal – 72.5%; Hydel -14.5%; Nuclear – 2.5% Others- 10.5%
The demand for fuel has increased at the rate of 5.5%.
OPEC stands for Organization of Petroleum Exporting Countries.
(It is a perfect example of oligopolist Market.)
The amount of oil-import bill for 2005-06 was Rs. 1,94,640 crores.
POL stands for petrol, oil & lubricants which contributes about one third of the import bill.
National average of transmission & Distribution losses are 23%.
Proficiency Notes on Economics (Macro)
fjtYV rks cl cnykuh Dyklst gh nsrk gS A
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Plant Load Factor measures the operational efficiency of a thermal plant.
PLF in 2006 is lowest in North Eastern Region (16.4%) and highest in Southern Region (80%).
The percentage of PLF (in 2006) in various sectors are: SEB -68%; Central Sector – 81%; Private sector – 88%.
Electricity Act was passed in 2003 and Electricity Amendment Bills was passed in 2005.
Partnership in Excellence Programme was launched by Ministry of Power to improve generation of power.
Power Sector in Delhi was privatized in 2002.
All India Power Grid is also known as the National Grid.
The estimated inter-regional transmission capacity by 2012 will be 37,150 MW.
Five sites with a capacity of 4,000 of MW each, were identified for the development of Ultra Mega Power Plants.
Total route length of railways in 05-06 was 63.5 thousand kms out of which 17.9 thousand kilometers were electrified. It carried
5725 million of passengers and 666.5 million tones of freight traffic in 2005-06.
Some of the steps taken by government to improve railways performance are rational price policy, increased wagon load, faster
turn around time, public private partnerships (PPP), double line freight corridor, etc.
Rajeev Gandhi Grameen Vidhyutikaran was started in 2005 to provide access to electricity including villages.
Indian Rail Network is the largest in Asia & second largest in the world.
The ratio of revenue earned between freight & passengers are 2: 1.
Indian Road Network is the largest in the world measuring about 1,57,000 kms surfaced & 2,43,000 kms unsurfaced.
The National Highway carry more than 40% of the total road traffic and a road length of 66590 kms.
The rural network connects 65% of all weather roads.
In India, there are 12 major & 187 minor ports.
Coastal Shipping is the cheapest mode of transport.
GRT stands for Gross Registered Tonnage.
India ranks 17th in the world’s shipping tonnage.
Vishakhapatnam is the top traffic handler port in India since last six years.
Domestic Air services are provided by Indian Airlines Ltd. and International Air Services are provided by Air India Ltd.
In Aviation, private operators account for 69% traffic.
Pawan Hans Helicopter Ltd. provides helicopter support service.
There are 92 airports in India.
Delhi, Mumbai, Kolkata, Chennai & Thiruvanandpuram have International airports.
Green Field airports of international standards are constructed at Hyderabad, Bangalore & Goa. One such airport of Kochi is
already operational.
International services are governed by Bilateral Agreements.
In 2006 Domestic Traffic grew up by 44% and international traffic by 16%. Domestic & international cargo recorded a growth
of 9% & 14% respectively.
India ranks second in the growth rate of international air services. The first is China.
India ranks 1st in the Indian Postal Network. Out of a total of 1.55 lakhs post offices in India, 1.4 lakhs are in rural area. More
than 8,000 post offices are computerized.
On an average one post office serves 6623 person & 21.16 sq. km area. Presently more than 8,000 post offices are computerized.
VSAT stands for Very Small Aperture Terminals and these are 140 in India.
AMPC stands for Automatic Mail Processing Centers.
There are 321 telephone exchanges in India & India ranks 1 st in telephone network system.
The growth of telecommunications have been 190 million connections by December, 2006. About 5.6 lakh villages were
connected using a village public telephone (VPT).
By the end of 2007 total number of phones are aimed to be 250 million.
The telephone penetration rate is 16.8 phones per hundred population. Upto December 2006, there were about 150 million
subscribers of cellular phones.
The two PSU’s in the telecom sector are: Bharat Sanchar Nigam Limited & Mahanagar Telephone Nigam Ltd.
In India there are 42 million Internet Connections & 25.6 lakhs Broadband Subscribers in August 2007.
The regulatory authority for telecom sector is Telecom Regulatory Authority of India. (TRAI).
NIXI stands for National Internet Exchange of India.
In India the number of malaria cases in 2001 was 1.2.
In 2006 number of telephone connections were 14.18 million (it was 1.2 million in 2005) & more than 2 lac PCO’s in Rural
areas.
NPE stands for National Policy on Education. It was made in 1986 & further modified in 1992. India now has the second largest
education system in the world. 84% of the rural habitation in India now have a primary school located within a distance of
1km.
GER stands for Gross Enrollment Ratio. The GER has increased to 94.23 in 2004-05.
The number of secondary or higher education schools have been increased to more then 1,52,000 in 2004-05. Total student
enrolment have been increased to 37 million in 2004-05. Annual enrolment of women was 4.04 million in 2004-05
The main vehicle for providing elementary education to all children is Sarva Shiksha Abiyan (SSA) launched in 2001-02.
NPEGEL stands for National Programme for Education of Girls at Elementary Level.
There are 7 IIT’s & 7 IIM’s in India.
NLM aims to achieve literacy of 75% by 2007.
National Literacy Mission was launched in 1998 for adult education.
The combined share of PSU’s in telecommunication has declined from 98.65 to 85.31%.
NPE (National policy on Education) aimed to spend 6% of GDP on education against which only 3.49% has been spent.
Sarva Shiksha Abhiyan = Education guarantee Scheme + Alternative & Innovative Education.
Secondary education is in the age group of 14 – 18 years.
In December 2006 there were 150 million subscribers of cellular mobile telephone service.
Globalization means integrating domestic economy with world’s economy.
The peak rate of custom duty was brought down to 10% in 2006-07.
India achieved full convertibility in current A/c in August, 1994.
Proficiency Notes on Economics (Macro)
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289. ADR – American Depository Receipts
GDR – Global depository Receipt
290. TRIPs – Trade Related Intellectual Property Rights.
291. FII – Foreign Institutional Investor.
292. Agreement of trade related intellectual property rights Patent Amendment Act 1999 was passed for providing EMR’s (Exclusive
Marketing Rights).
293. Globalization got a real thrust from new economic policy 1991.
294. Dual Exchange Rate System was from 1992-93.
295. In 2003, India’s share in world Trade was 0.86%.
296. Our foreign currency reserves are about 180 billion dollars in March 2007.
297. Export finance over 65% of imports as compared 60% in 1985 due to globalization.
298. International Monetary fund was organized in 1946 & commenced its operation in March, 1947.
299. International Monetary Fund is affiliated to UNO (United Nation Organization).
300. IMF, a short term credit institution, has 187 countries as its members.
301. World Bank is also called International Bank for Reconstruction & Development (IBRD). It was formed in 1945 in Bretten
Woods & has 187 countries as its members.
302. The average growth rate of exports was 10% in 2004.
303. World Bank consist of: (a) International Development Association (IDA) (b) International Finance Corporation (IFC) (c)
Multilateral Investment Guarantee Agency (MIGA) (d) International Centre for settlement of Investment Disputes (ICSID)
304. World Trade Organization gave a real push to Globalization.
305. WTO came into existence on 1st, January, 1995. It was 153 countries as its members.
306. PTA – Plurilateral Trade Agreements.
MTA – Multi lateral Trade Agreements
GATT – General Agreement on Trade & Tariff
307. The three economic pillars of economic dimensions are IMF, World Bank, WTO.
308. Dual Exchange rate system was started in 1992-93.
309. Committee on fuller capital account convertibility (Tarapore committee) has chalked out a road map for capital good
convertibility.
310. India’s foreign currency reserves were 180 billion US dollars in March 2007.
311. In 2004-05 and 2005-06 current deficit was of (-) 0.4 and (-) 1.1% respectively.
312. Foreign direct & portfolio investment was 4700 million dollars in 2005-06.
313. IDA is known as the soft loan window.
314. Inflation results in the decline in the purchasing power of money.
315. There are three types of inflation – (a) Demand Pull Inflation (b) Cost Push Inflation (c) Stagflation
316. The period of 1991 -94 was the period of inflation in India.
317. Public expenditure has been increased to 35% in 2006-07.
318. Approximately 45% of the government expenditure in India is on non developmental activities.
319. Te combined phenomena of demand pull inflation & cost push inflation is called Stagflation.
320. The rate of inflation was lowest in fifties. (1.7%)
321. Inflation rate of India in 2005-06 was 4.7%. Exact current rate in March 2007 was 6%.
322. Two ways of deficit financing are (a) Borrowings from bank (b) Printing more currency.
323. The year 1966-67 has marked the maximum inflation at 13.9%.
324. Fiscal deficit as a proportion of GDP during 2006-07 was 3.6%.
325. Fiscal deficit was about 5.6 in 00-01
326. The practice of RBI lending to Government through ad-hoc treasury bills was given up in 1997.
327. The government now taps 91 days treasury bills from the market.
328. FRBM stands for Fiscal Responsibility & Budget Management.
329. FRBM Bill was passed in 2000 & FRBM Act was passed in 2003.
330. FRBM act aims at reducing gross fiscal deficit by 0.5% of GDP in each financial year.
331. In 2004-05, the fiscal deficit as a proportion of GDP was 4.1%.
332. Essential pre –requisites for privatization are Liberalization & Deregulation.
333. An exchequer is a person who collects taxes.
334. Liberalization refers to relaxing of previous government restrictions.
335. Privatization refers to the transfer of assets, functions, services from public to private ownership.
336. Disinvestments means disposal of public sector unit’s equity in the market or selling of a public investment to private
entrepreneur.
337. Disinvestments is a method of privatization.
338. Disinvestment of equity in public sector enterprises in 2007-08 is 2367 crores
339. 100% privatization has taken place in Centaur Hotel.
340. GDR stands for Global depository Receipts.
341. Various methods of disinvestments are –
(a) Domestic Public Issues (issuing equity to retail investors.
(b) Issue of Global Depository receipts
(c) Cross Holding Method (selling part of its shares from one PSU to another)
(d) Warehousing (Governments own financial institutions buying Government stake.
342. In 13 profit making centers, government has decided to stake through strategic sale.
343. The largest disinvestment was in the year 2003-04.
344. Disinvestment programme started in 1991-92.
345. Disinvestment Minister in 1991-92 was Mr. Arun Shouri.
346. In 2005-06 there was no target for disinvestments in equity but still realized Rs. 1567 crores.
347. Privatization can be achieved through (a) Franchising (b) Leasing (c) Contracting (d) Divesture.
348. There are total 39 PSU’s chosen for disinvestment.
Proficiency Notes on Economics (Macro)
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349. 3 PSU’s are loss making PSU’s and remaining 36 are profit making.
350. Balance of Payment refers to the balance of all economic transactions between two countries whereas balance of trade refers to
the balance of export & imports between two countries.
351. Balance of payments = Balance of Current account + balance of capital account.
352. Balance of current account = Balance of Trade + Balance of services + Balance of unilateral transfers. It can be positive,
negative or zero.
353. India experienced surplus in the BOP in the Fifth Plan.
354. During the post crisis period the current account deficit was 1% of GDP.
355. BOP is regarded as the statistical statement of any country.
356. The sixth Plan characterized the BOP “acute”.
357. Imports have been grown at (24% in 2003-04, 48.6% in 2004-05 and 32% in 2005-06).
358. For the years 2004-05 and 2005-06, the current account deficit were (-) 0.4% and (-) 1.1% respectively.
359. Forms of external assistance are grants & loan.
360. About 90% of external assistance received by India has been in the form of loans.
361. Amount of external debt in 2006-07 of India was Rs. 5,65,000 crores.
362. India’s external debt was 15.8% of GDP in 2005-06.
363. Concession on loans is @ 25% and total concessional loans is 34% of total loans.
364. According to the Global Development Finance, 2005, India ranks 8th among the top ten debtors of the country.
365. About 12% of GDP is constituted by exports of goods.
366. The available foreign exchange reserves were sufficient to finance for 3 weeks in 1991.
367. National debt constituted 60% of the GNP in 1991.
368. The sectors in which economic reforms were introduced were (a) Industrial sector (b) Financing sector (c) External Sector (d)
Fiscal policy.
369. At present, there are 6 industries for which licensing is compulsory.
370. At present, only three industries are reserved for public sector. These are (a) atomic energy (b) atomic energy substances (c) Rail
Transport.
371. In 2001, the defence production was dereserved & opened to private participation.
372. In Defence production, maximum limit for foreign investment is 26%.
373. According to the New Industrial Policy, 1991, the mandatory convertibility clause is no longer applicable for term loans, from
the financial institutions for new projects.
374. DGTD stands for Director General Board.
375. OCB stands for Over the Counter Board.
376. Direct foreign investment is allowed upto 51% equity in high industries.
377. 100% FDI was allowed in Drugs & Pharmaceuticals, etc.
378. In Banking 49% FDI was allowed. In Private sector banking & telecom sector 74% FDI was allowed.
379. MRTP of 1991 is also known as the Competition Act.
380. Financial sector is comprised of (a) Banking Sector (b) Capital reforms (c) Insurance sector reforms.
381. Cash reserve ratio (CRR) is in 2010- 6%.
382. Statutory Liquidity Ratio (SLR) declined from 38.5 to 24% in the recent years.
383. Bank rate since April 2003 is 6% which lowered from 8%.
384. Rate of Interest on saving deposits of commercial banks in recent years is 3.5% which declined from 4.0%.
385. Cash Compensatory Scheme was abolished in July, 1991
386. EXIM Scrip Scheme was replaced by Dual Exchange Rate Scheme.
387. Export Promotion Capital Goods (EPCG), introduced in 1990 & liberalized in 1992 was introduced to encourage import of
capital goods.
388. FERA stands for Foreign Exchange Regulation Act.
389. FERA was replaced by Foreign Exchange Management Act (FEMA)
390. FTP stands for Foreign Trade Policy. It was started in 2004-09.
391. Government of India constituted the Tax Reform Committee in August 1991.
392. The Tax rate for Domestic -30% & Foreign – 40%.
393. Dematerialization of TDS certificate will take place from 1 st April, 2008.
394. Currently Foreign Exchange reserve is US$ 141.5 billion in 04-05.
395. Tax Base refers to the number of people paying Tax.
396. Industrial licensing was abolished for all projects except for 18 industries related to strategic and security concerns.
397. In August 1991 the Government of India constituted the tax reform committee.
398. PLR stands for Prime Lending Rates.
399. In 1993 RBI issued guidelines for licensing of new banks in the private sector.
400. Fresh Guidelines for licensing of new banks were issued in Jan, 2000.
401. Maximum limit of NRI participation in the primary equity of a new bank is 40%.
402. NPA stands for Non Performing Assets.
403. Derivative products are those products which derive their prices from underlying securities. Ex –Forward rate agreements.
404. Base II framework (banking norms) came into operation from March, 2008.
405. Foreign Trade Policy of India was made restrictive from Second Plan.
406. EPT – Export Processing Zones
EHTP – Export & Hardware Technology Park
STP – Software Technology Park.
407. Some schemes started to promote exports are Duty Drawback Scheme, Cash Compensatory Scheme, 100% EOU’s & EPZ’s.
408. The rupee was devalued twice in July, 1991.
409. EXIM policy gave a push to the process of liberalization.
410. QR stands for Quantitative Restrictions. It was removed from 714 items in EXIM policy of 2000 -01 & on 715 items in EXIM
policy of 2001-02.
411. India’s tariff rate in 2007-08 was 10%.
Proficiency Notes on Economics (Macro)
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412. Government followed differential Pricing method of disinvestments in 2005-06.
413. There are Total 298 Scheduled Bank.
414. Now, Jammu & Kashmir is a Scheduled Bank.
415. Repo Rate – March 2011 is 6.75%, May 2011 is 7.25%.
416. Reverse Repo Rate – March 2011 is 5.75%, May 2011 is 6.25%.
417. First Bank of India ‘Bank of Hindustan’ in 1770 established by Alexander
418. First Bank in World – in 1157 in Italy ‘Bank of Vienca’
419. First Five Year Plan 1951 – 1956
420. NABARD – National Bank of Agriculture & Rural Development
421. NABARD was established on 12 july 1982
422. R.R.B – Regional Rural Bank
423. R.R.B was established on 2 oct 1975
424. Scheduled Commercial Bank – 289
425. Scheduled Non Commercial Bank – 9
Under Scheduled Commercial
426. Bank:- Domestic – 242, Foreign Bank – 47
427. Public Sector Bank – 28
428. Nationalized Bank – 19
429. Scheduled Public Sector Bank – 9
430. Fiscal Deficit – Budgetory Deficit + External Borrowing of Central Government
431. Excise Duty = 9%
432. Corporation Tax Income = 23%
433. Individual – 1,80,000 = No tax
434. Women – 1,90,000 = No tax
435. Senior Citizen – 2,50,000 = No tax
436. Service Tax = 10.3%
437. CENVAT = 10%
438. There are total 111 types of services
439. Fiscal Deficit – 5.1% of GDP, For 2011-12 estimated at 4.6%.
440. Revenue Deficit – 2.3% of GDP, For 2011-12 estimated at 1.8%.
441. Primary Deficit – 2% of GDP, For 2011-12 estimated at 1.6%.
442. Senior Citizen age now reduced from 65 years to 60 years.
443. Super Senior citizen age now is 80 years or more.
444. MAT has been increased from 18% to 18.5% of book profit. (MAT- Minimum Alternative Tax).
445. Central Excise Duty is 10%.
446. Forex Reserve is 297.3 billion US$.
447. Budget System was introduced on 7-4-1860 first time.
448. Financial Year system introduced in India from 1860. (Financial Year- 1st April to 31st March).
449. Budget has been described in Article 112 of Indian Constitution as Annual Financial Statement.
450. Railway Budget was separated from General Budget in Year 1924 on the recommendations of Acworth Committee.
451. Budget is presented on the last working day of February by Finance Minister of India in parliament.
452. Former Finance Minister Morarji Desai presented Budget 8 times, the most by any finance minister.
453. Cencus 2011 is 1210.19 million or 1.21 billion.
454. 623.72 millions are males (51.54%).
455. 586.46 millions are females (48.46%).
456. Population of India has increased by more than 181 million in decade 2001 to 2011.
457. %age Growth in population:
2001-2011 = 17.64% ,
Males = 17.19%
Females= 18.12%
458. UP is the most populous state in India with 199.5 millions.
459. Literacy Rate increased by 64.83% 2001 to 74.04% in 2011.
460. Mizoram has highest child sex ratio (0-6) of 971
461. Kerala has highest sex ratio with 1084.
462. China Population is 1.34 billions.
463. Repo Rate: June 2011 - 7.5% , at present it is 8.5%.
464. Reverse Repo Rate: June 2011 - 6.5% , at present it is 7.5%.
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Proficiency Notes on Economics (Macro)
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