The document provides an overview of key topics related to the Indian economy including Navratnas, the World Trade Organization, demonetization, and the Goods and Services Tax. It defines these terms and outlines their objectives and advantages and disadvantages. Navratnas refers to nine public sector undertakings given greater autonomy by the government. Demonetization in 2016 aimed to reduce corruption and black money by removing high value currency notes from circulation. The Goods and Services Tax implemented in 2017 unified India's tax system.

1. CLASS XII
(Part- 2)
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INDIAN ECONOMY

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
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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.
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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.
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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. WorldTrade Organization (WTO)
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• 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. WorldTrade Organization
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• 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. Concept of Demonetization
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• 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.
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8. Objectives of Demonetization
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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. Advantages of Demonetization
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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. Disadvantages of Demonetization
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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.
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11. Goods & ServicesTax (GST)
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• 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. Objectives of Goods & ServicesTax
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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. Advantages of Goods & ServicesTax
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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. Disadvantages of Goods & ServicesTax
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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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