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Unit 5  indian eco

Unit 5 indian eco






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    Unit 5  indian eco Unit 5 indian eco Presentation Transcript

    • Unit 5Indian Economy
    • Economic Development• It is a complex process which is influenced by both economic & non-economic factors.• Some of the economic factors are:1. Economic system2. Capital stock3. Rate of capital accumulation4. Capital output ratio in various sectors5. Agricultural surplus6. Foreign trade etc…
    • • Some of the non economic factors are:1. Quantity & quality of Human resource2. Social organisation3. General education4. Technical know-how5. Political freedom6. Corruption free environment7. People’s will to develop the country8. Natural resources
    • National Income Analysis• NI is the money value of all final outcome of all economic activities of the people in the country.• Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period.• GNP means the total of all business production and service sector industry in a country plus its gain on overseas investment.
    • GNP = market value of final goods & services + incomes earned by the nationals in the foreign countries – income earned locally but accruing to foreigners.GDP = market value of final goods & services produced by residents in the country + incomes earned locally by foreigners - income received by nationals in the foreign countries.
    • Planning in India• The economy of India is based in part on planning through its five-year plans, which are developed, executed and monitored by the Planning Commission.• Long term objectives of Planning are:1. Increasing NI2. Reduce inequalities3. Eliminate poverty4. Create full employment5. Sectoral growth
    • Monetary Policy• Government and Central Bank make use of various fiscal and monetary measures to achieve stability and growth by influencing and regulating the behavior of the consumers, investors and savers.• These policies can help the overall economic situation and business prospects.• They encourage investment and production in certain priority sectors and discourage them in the non priority sectors.• They can affect the aggregate demand and supply and the levels of employment, wages, interest, rent, prices and profit.
    • What is Monetary Policy?• Monetary policy refers to the policy regarding money supply and bank credit in the country and it is formulated and announced by the Central Bank of the country ie. the RBI.• In simple words, it refers to the policy of the govt pertaining to the monetary matters in the economic system.• The scope of this policy spans the entire area of economic transactions in the economy.
    • Instruments of Monetary Policy• General (Quantitative) – Bank rate policy, open market operations, Cash reserve ratio, statutory liquidity ratio which affect the economy in general.• Selective (Qualitative) – Minimum margins for lending against specific securities, ceilings on volume for credit, discriminatory rates of interest, moral suasion which affects selective sectors and segments of the economy.General Credit Controls are inter-related and have to be operated in co-ordination. All these instruments affect the bank reserves.
    • Industrial policy• It refers to govt policy towards the establishment of industries, their working conditions & management.• First industrial policy was spelled out in the year 1948.• Policy of 1991 brought revolution in Indian industries through introducing Licensing Raj, abolishing MRTP, Foreign technology liberlisation, Foreign Investment.
    • Industrial sickness• Acc to RBI, a sick industrial unit is one which has reported cash loss for the previous year of its operation and in the judgement of the financing bank is likely to incur each loss for the current year and also in the following year.• Causes for sickness in the industries can be classified into:1. Internal2. External