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Economic reforms since 1991: Class XII - Part-2

This presentation will be helpful to teachers teaching online during this pandemic. It relates to class 12 topic ' Economic Reforms'. It covers the following topics:
Basic Terms

Navratnas

World Trade Organization(WTO)

Concept of Demonetization

Objectives of Demonetization

Advantages of Demonetization

Disadvantages of Demonetization

Goods & Services Tax

Objectives of Goods & Services Tax

Advantages of Goods & Services Tax

Disadvantages of Goods & Services Tax
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Economic reforms since 1991: Class XII - Part-2

  1. 1. CLASS XII (Part- 2) Image by: Business-standard.com INDIAN ECONOMY
  2. 2. Synopsis 1. Basic Terms 2. Navratnas 3. World Trade Organization(WTO) 4. Concept of Demonetization 5. Objectives of Demonetization 6. Advantages of Demonetization 7. Disadvantages of Demonetization 8. Goods & Services Tax 9. Objectives of Goods & Services Tax 10. Advantages of Goods & Services Tax 11. Disadvantages of Goods & Services Tax Image by: Pinterest.com
  3. 3. BasicTerms 1. Bilateral Trade agreements: These agreements are done between two nations for the purpose of exchange of goods and services for mutual benefit of both the countries. 2. Multilateral Trade agreements: These agreements are done between two or more countries to strengthen economy of member countries by exchanging of goods & services among them. 3. Non- tariff barriers: It is a way to restrict trade using trade barrier like quotas, sanctions, etc. 4. Black money is unaccounted money which is not recorded anywhere and is the income evaded from tax, as this money has not been declared to the tax authorities. Image by: Pinterest.com
  4. 4. Navratnas • Navratnas were the nine Public Sector Undertaking chosen by the Government, which were more liberalized and independent to take managerial decisions. • In 1997,Navratnas was introduced to improve efficiency, inject more professionalism and to compete more effectively in the global environment. • These 9 PSUs were given greater managerial and operational autonomy, in taking decisions to run the company effectively and thus increase their profits. Image by: Pinterest.com Navratnas includes: Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), HPCL, ONGC, SAIL, Indian Petrochemical Corporation Limited (IPCL), BHEL, National Thermal Power Corporation (NTPC), VSNL (It includes MTNL, GAIL).
  5. 5. WorldTrade Organization (WTO) Image by: Pinterest.com Flemish Region • The General Agreement on Tariffs & Trade (GATT) is a legal agreement between many countries whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. It took effect on 1948 with 23 member countries. • WTO was founded in 1995 as the successor of GATT. WTO is a global organization that encourages and facilitates inter country trade and it also helps in resolving trade disputes.
  6. 6. WorldTrade Organization Image by: Pinterest.com Flemish Region • WTO agreements cover trade in goods as well as services to facilitate international trade including both multilateral and bilateral trade through removal of tariff as well as non-tariff barriers by providing market access to all member countries. • India has always kept its commitments with WTO by liberalization of trade barriers.
  7. 7. Concept of Demonetization Image by: Pinterest.com Flemish Region • Demonetization is an act to stop a currency unit status as a legal tender. On 8th November 2016, the GOI announced demonetization of Rs 500 and Rs 1000 notes with immediate effect. • 86% of the cash in circulation was declared invalid. • Restrictions on cash withdrawals were also laid. Image by Quora.com
  8. 8. Objectives of Demonetization Image by: Pinterest.com Flemish Region 1. To Control Corruption: Demonetization was introduced to stop people from indulging into activities like offering bribes, money laundering, etc. 2. To Control Counterfeiting: Counterfeiting means fake currency. Through demonetization Government aimed to stop fake currency circulation in the economy and the ones existed were deemed useless. 3. To stop use of currency for illegal activities: Demonetization was done all of a sudden in order to stop terrorist activities which used to occur through old 500 and 1000 rupee notes. 4. To stop accumulation of black money: In order to stop the shadow economy, demonetization was introduced.
  9. 9. Advantages of Demonetization Image by: Pinterest.com Flemish Region 1. Demonetization helped in abolishing black money from the economy. 2. It also helped in making Indian banking system stronger. 3. Demonetization led to higher tax collections which government could use as revenue. 4. It controlled corruption to some extent and for considerable time period. 5. It turned India into cashless economy as people started using digital means for making transactions.
  10. 10. Disadvantages of Demonetization Image by: Pinterest.com Flemish Region 1. There was a negative affect on primary producers and informal sector because they mainly deal in cash transactions. 2. There was an excessive burden on bank employees to cope up with the difficult situation of exchanging scrapped currency notes. 3. Higher cost was involved for printing new currency. Image by: bbamantra.com
  11. 11. Goods & ServicesTax (GST) Image by: Pinterest.com Flemish Region • It is a destination based single tax on the supply of goods and services from the manufacturer to the consumer. • It came into effect on July 2017 and it has replaced multiple indirect taxes levied by the Central and State Government. • GST converted the country into a unified market.
  12. 12. Objectives of Goods & ServicesTax Image by: Pinterest.com Flemish Region 1. GST was implemented following the policy of ‘one nation & one tax’ in order to ensure the smooth flow of goods and services across the country. 2. GST aimed at the reduction in the prices of commodities to benefit the consumers. 3. It improved the ease of doing business by increasing tax compliance, improving tax administration and by eliminating ‘tax on tax’. 4. GST was implemented to ensure that there would be only one tax from the manufacturer to the consumer.
  13. 13. Advantages of Goods & ServicesTax Image by: Pinterest.com Flemish Region 1. GST will help to create a unified common national market for India, giving boost to foreign investment and “Make in India” campaign. 2. It made the tax system simple. 3. It reduced multiple taxes charged earlier. 4. It will help in the reduction in prices of commodities in the long run. 5. It will also help in reducing poverty by generating more employment opportunities
  14. 14. Disadvantages of Goods & ServicesTax Image by: Pinterest.com Flemish Region 1. Some of the Small and Medium Enterprises (SMEs) are still not clear about this new tax system. 2. In order to understand GST, one needs professional help since it is a completely new system. 3. New software was required by the businesses by purchasing ‘GST-Compliant network software’ .
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