CHAPTER ECONOMY 5 - Knowledge Philic · 2017. 5. 26. · Buy books :

1

Buy books : http://www.dishapublication.com/entrance-exams-books/ssc-exams.html

INTRODUCTIONThe Economy of India is the ninth largest in the world by nominalGDP and the third largest by purchasing power parity (PPP). Theindependence-era Indian economy before and a little after 1947was inspired by the economy of the Soviet Union with socialistpractices, large public sectors, high import duties and lesser privateparticipation characterising it, leading to massive inefficienciesand widespread corruption. However, later on India adopted freemarket principles and liberalised its economy to international trade.Following these strong economic reforms, the country's economicgrowth progressed at a rapid pace with very high rates of growthand large increases in the incomes of people.India recorded the highest growth rates in the mid-2000s, and isone of the fastest-growing economies in the world. The growthwas led primarily due to a huge increase in the size of the middleclass consumer, a large labour force and considerable foreigninvestments. India is the fourteenth largest exporter and eleventhlargest importer in the world.Recently India has become one of the most attractive destinationsfor investment owing to favourable government policies andreforms. The approval of Foreign Direct Investment (FDI) inseveral sectors have allowed investments to pour into theeconomy. According to the data provided by Department ofIndustrial Policy and Promotion (DIPP), the cumulative amountof FDI inflows in the country in the period April 2000-September2014 was US$ 345,073 million.Growth in India was expected to rise to 5.6 per cent in 2014 andpick up further to 6.4 per cent in 2015 as both exports andinvestment was expected to increase, according to the WorldEconomic Outlook (WEO) report released by InternationalMonetary Fund (IMF).Sectors projected to do well in the coming years includeautomotive, technology, life sciences and consumer products.Engineering and research and development (ER&D) exportrevenue from India is expected to reach US$ 37-45 billion by 2020,from an estimated US$ 12.4 billion in FY14.Furthermore, the US$ 1.2 trillion investment that the governmenthas planned for the infrastructure sector in the 12th Five-YearPlan is set to help in further improving the export performance ofIndian companies and the Indian growth story, which willconsequently improve the overall Indian economy.

ECONOMY TYPESAn economy is a system whereby goods are produced andexchanged. Without a viable economy, a state will collapse. Thereare three main types of economies: free market, command, andmixed. The chart below compares free-market and commandeconomies; mixed economies are a combination of the two.

Free-Market Versus Command EconomiesFree-Market Economies Command EconomiesUsually occur in democratic Usually occur in communist orstates authoritarian statesIndividuals and businesses The state's central governmentmake their own economic makes all of the country'sdecisions. economic decisions.

FREE-MARKET ECONOMIESIn free-market economies, which are essentially capitalisteconomies, businesses and individuals have the freedom topursue their own economic interests, buying and selling goodson a competitive market, which naturally determines a fair pricefor goods and services.

COMMAND ECONOMIES

A command economy is also known as a centrally planned economybecause the central, or national, government plans the economy.Generally, communist states have command economies, althoughChina has been moving recently towards a capitalists economy. Ina communist society, the central government controls the entireeconomy, allocating resources and dictating prices for goods andservices. Some non communist authoritarian states also havecommand economies. In times of war, most states-even democratic,free-market states-take an active role in economic planning but notnecessarily to the extent of communist states.

MIXED ECONOMIES

A mixed economy combines elements of free-market and commandeconomies. Even among free-market states, the governmentusually takes some action to direct the economy. These movesare made for a variety of reasons; for example, some are designedto protect certain industries or help consumers. In economiclanguage, this means that most states have mixed economies.With the induction of liberalisation, Licence Raj was abolished,ended public monopolies which allowed automatic approval offoreign direct investment in various sectors. India has becomeone of the fastest-growing developing economies since 1990. Itis projected that in 2035, India will be the third largest economy ofthe world after US and China. India has taken a drift from itsearlier stand of Mixed Economies.

ECONOMY SECTORSPrimary Sector: When the economic activity depends mainlyon exploitation of natural resources then that activity comes underthe primary sector. Agriculture and agriculture related activitiesare the primary sectors of economy.

ECONOMY 5C

HA

PT

ER

2


The Indian agriculture sector accounts for 18 per cent of India'sGross Domestic Product (GDP) and employs just a little less than50 per cent of the country's workforce. This sector has madeconsiderable progress in the last few decades with its largeresources of land, water and sunshine. India is presently theworld's largest producer of pulses and the second largest producerof rice and wheat.Secondary Sector: When the main activity involvesmanufacturing then it is the secondary sector. All industrialproduction where physical goods are produced come under thesecondary sector.In the secondary sector of the national economy, naturalingredients are used to create products and services that areconsequently used for consumption. This sector can be regardedas one that adds value to the products and services on offer.Examples: The major examples of this sector are manufacturingand transporting.Employment generation: The various industries in India employalmost 14 per cent of the aggregate workforce in the country. Economic contribution: The secondary sector of Indianeconomy contributes almost 28 per cent of the GDP. Globalstanding: India occupies the 12th spot in the world when it comesto nominal factory production in real terms.Tertiary Sector: When the activity involves providing intangiblegoods like services then this is part of the tertiary sector. Financialservices, management consultancy, telephony and IT are goodexamples of service sector.Global standing: With regards to output in the services sector,India occupies the 13th spot in the world.Employment generation: It employs approximately 23 per cent ofthe Indian workforceYearly growth rate: The tertiary economic sector of India has ayearly growth rate of almost 7.5 per cent.Economic contribution: This sector accounts for almost 55 percent of India's GDP.The main difference between the private and public sectors ofIndian economy is that in the later a group of individuals or anindividual holds the rights to the properties whereas in the secondinstance the government is the owner.Employment Generation: In India there are approximately 487million workers, a number preceded only by China. 94 per cent ofthis workforce is employed in the companies that belong to theunorganised sector and this includes gems and diamond polishingentities to pushcart sellers.The organised sector is mostly made of workers that are employedin the public sector companies. Of late the scales are slowly tippingin the favour of the private sector with a lot of Indians startingtheir businesses and international entities coming into thecountry.

NEW ECONOMIC POLICYThe new economic policy 1991 was introduced to revive theeconomy. It emphasised a bigger role for Private sector. It focusedon FDI on supplement growth. It aimed at export led growth alongwith reducing the role of state and making planning liberal andmarket driven.

The main characteristics of new Economic Policy 1991 are:1. Delicencing: Only six industries were kept under Licencing

scheme. The private sectors were allowed to set up industrialunits without taking any licences. Industrial licensing wasabolished for almost all but product categories.

2. Entry to Private Sector: The role of public sector waslimited only to four industries; rest all the industries wereopened for private sector also.

3. The threshold limit of assets in respect of MRTP companiesand other major undertakings was abolished. They werefree to undertake investments without any ceiling prescribedby MRTP.

4. Disinvestment: Disinvestment was carried out in manypublic sector enterprises.

5. The role of RBI reduced from regulator to facilitator offinancial sector. This means that the financial sector may beallowed to take decisions on many matters withoutconsulting the RBI. The reform policies led to theestablishment of private sector banks, Indian as well asforeign. Foreign investment limit in banks was raised toaround 50 per cent.

6. Liberalisation of Foreign Policy: The government grantedapproval for FDI up to 51per cent in high priority areas.

7. In 1991 the rupee was devalued against foreign currencies.This led to an increase in the inflow of foreign exchange.

8. Liberalisation in Technical Area: Automatic permissionwas given to Indian companies for signing technologyagreements with foreign companies.

9. Setting up of Foreign Investment Promotion Board (FIPB):This board was set up to promote and bring foreigninvestment in India.

10. Sick public sector units were recommended to Board forIndustrial and Financial Reconstruction (BIFR) for revival.

11. Setting up of Small Scale Industries: Various benefits wereoffered to small scale industries.

12. PSU were given more autonomyThere are three major components or elements of new economicpolicy—Liberalisation, Privatisation, Globalisation.

SALIENT FEATURES OF INDIAN ECONOMYThe economy of India is the tenth-largest in the world by nominalGDP and the third-largest by purchasing power parity (PPP). Indiawas 6th largest exporter of services and 19th-largest exporter ofmerchandise in 2013. It is the 12th-largest merchandise and 7thlargest services importer. Agriculture sector is the largest employerin India's economy but contributes a declining share of its GDP(13.7% in 2012-13). Its manufacturing industry has held a constantshare of its economic contribution, while the fastest-growing partof the economy has been its services.

GROWTH INDICATORS

The growth and performance of the Indian economy is explainedin terms of statistical information provided by the variouseconomic parameters. Gross National Product (GNP), GrossDomestic Product (GDP), Net National Product (NNP), per capitaincome are the various indicators relating to the national incomesector of the economy. They provide a wide view of the economyincluding its productive power for satisfaction of human wants.

3


In the industrial sector, the Index of Industrial Production (IIP) isa single representative figure to measure the general level ofindustrial activity in the economy. It measures the absolute leveland percentage growth of industrial production.The four main monetary aggregates of measures of money supplywhich reflect the state of the monetary sector are:- (i) M1 (Narrowmoney) = Currency with the public + demand deposits of thepublic; (ii) M2 = M1 + Post Office Savings deposits; (iii) M3(Broad money) = M1 + time deposits of the public with banks;and (iv) M4 = M3 + Total post office deposits.Price movement in the country is reflected by the WholesalePrice Index (WPI) and the Consumer Price Index (CPI).WPI is used to measure the change in the average price level ofgoods traded in the wholesale market, while the Consumer PriceIndex (CPI) captures the retail price movement for different sectionsof consumers.

INDIA AS DEVELOPING COUNTRY

Indian economy has over the decades shown markedimprovements. Few facts of relevance are:(i) Rise in National Income: India's national income i.e. Net

National Product (NNP) at factor cost (National Income)has increased by about 17 times over a period of about 6decades. On an average, the NNP has increased at a rate ofa little less than 5 per cent per annum.

(ii) Rise in Per Capita Income: Per capita income in India hasincreased by more than 4 times over a period of about sixdecades. If we consider the period 1950-51 to 1990-91, therate of increase in per capita NNP was roughly 1.6 per centper annum. Since 1990-91, the per capita income shows anuptrend. It has increased roughly at a rate of about 5.5 percent per annum .

INDIA AS MIXED ECONOMY

In India, we observe that the following characteristics exist:(1) Private ownership of means of production- Agriculture and

most of the industrial and services sectors are in the privatehands.

(2) Important role of market mechanism- Market forces ofdemand and supply have free role in determining prices invarious markets. Government regulations and control overperiod of time have reduced a lot.

(3) Presence of a large public sector along with free enterprise-After Independence, the government recognised the needto provide infrastructure for the growth of the private sector.Also, it could not hand over strategic sectors like arms andammunition, atomic energy, air transport etc., to the privatesector. So public sector was developed on a large scale

(4) Economic planning - Economic planning has been anintegrated part of the Indian Economy. The PlanningCommission lays down overall targets for the economy as awhole, for public sector and even for the sectors which arein the private hands like agriculture. The government triesto achieve the laid down targets by providing incentives tothese sectors. Thus, here planning is only indicative innature and not compulsive.

INDIAN FINANCIAL SYSTEMFinancial system operates through financial markets andinstitutions.The Indian Financial system (financial markets) is broadly dividedunder two heads:(i) Indian Money Market(ii) Indian Capital MarketThe Indian money market is the market in which short-term fundsare borrowed and lent. The money market does not deal in cash,or money but in bills of exchange, grade bills and treasury billsand other instruments. The capital market in India on the otherhand is the market for the medium term and long term funds.Generally the investors are called surplus units and businessenterprises are called deficit units. So financial market transfersmoney supply from surplus units to deficit units. Financial marketacts as a link between surplus and deficit units and brings togetherthe borrowers and lenders.There are mainly two ways through which funds can be allocated,(a) Via bank (b) Financial markets. The households who are thesurplus units may keep their savings in banks; they may buy securitiesfrom capital market. The banks and financial market both in turn lendthe funds to business firm which is called deficit unit.Bank and financial market are competitor of each other. Financialmarket is a market for the creation and exchange of financial assets.

FUNCTIONS OF FINANCIAL MARKETSFinancial markets perform following four important functions:1. Mobilisation of Savings and Channelising them into most

Productive use: Financial markets act as a link betweensavers and investors. Financial markets transfer savings ofsavers to most appropriate investment opportunities.

2. Facilitate Price Discovery: Price of anything depends uponthe demand and supply factors. Demand and supply offinancial assets and securities in financial markets help indeciding the prices of various financial securities.

3. Provide Liquidity to Financial Assets: In financial marketsfinancial securities can be bought and sold easily sofinancial market provides a platform to convert securities incash.

4. Reduce the Cost of Transaction: Financial market providescomplete information regarding price, availability and costof various financial securities. So investors and companiesdo not have to spend much on getting this information as itis readily available in financial markets.

NATIONAL INCOMENational income is the final outcome of all economic activities ofa nation valued in terms of money. Economic activities include allhuman activities which create goods and services that can bevalued at market price. Economic activities include agriculturalproduction, industrial production, production of goods andservices by the government enterprises, and services producedby business intermediaries etc. On the other hand, non-economicactivities are those which produce goods and services that donot have any economic value. Thus, national income may also beobtained by adding the factor earnings and adjusting the sum forindirect taxes and subsidies. The national income thus obtainedis known as national income at factor cost. It is related to moneyincome flows.

4


MEASURES OF NATIONAL INCOMEGross National Product (GNP): It is the most comprehensivemeasure of the nation's productive activities. The GNP is definedas the value of all final goods and services produced during aspecific period, usually one year, plus incomes earned abroad bythe nationals minus incomes earned locally by the foreigners.The GNP is identical to Gross National Income (GNI). Thus, GNP= GNI. The difference between them is only of procedural. WhileGNP is estimated on the basis of product-flows, the GNI isestimated on the basis of money income flows, (i.e., wages, profits,rent, interest, etc.)

GROSS DOMESTIC PRODUCT (GDP)The Gross Domestic Product (GDP) is defined as the market valueof all final goods and services produced in the domestic economyduring a period of one year, plus income earned locally by theforeigners minus incomes earned abroad by the nationals. TheGDP is similar to GNP with procedural difference. In case of GNPthe incomes earned by the nationals in foreign countries are addedand incomes earned locally by the foreigners are deducted fromthe market value of domestically produced goods and services.In case of GDP, the process is reverse - incomes earned locally byforeigners are added and incomes earned abroad by the nationalsare deducted from the total value of domestically produced goodsand services.

ECONOMIC PLANNING IN INDIAEconomic planning in India was started in 1950 is necessary foreconomic development and economic growth. Economic Planningis a term used to describe the long term plans of government toco-ordinate and develop the economy. Economic Planning is tomake decision with respect to the use of resources.Need For Economic Planning: Social and Economic problemcreated by partition of Country.Objectives: Reduction of Unemployment, Modernisation,Balanced Regional Development, Reduction of Economic inEqualities, Economic Growth

OVERVIEWThe Indian economy still depends on the agricultural sector. Aboutone-third of its national income is derived from agriculture and itsallied sectors employing about two-third of the work force.Given below are the organisations and concepts associated withour economy:The Department of Statistics in the Ministry of Planning andProgramme Implementation is the apex body in the official statisticsystem of the country.The Department consists of:(i) Central Statistical Organisation (CSO) which is

responsible for formulation and maintenance of statisticalstandard, work pertaining to national accounts, conduct ofeconomic census and surveys, training in official statistics,coordination of statistical activities.

(ii) National Survey Organisation which was set up in 1950with a programme of conducting large-scale surveys toprovide data for estimation of national income and relatedaggregates for planning and policy formulation. It wasreorganised in 1970 by bringing together all aspects ofsurvey work into a single unified agency known as NationalSample Survey Organisation.

Ministry of Finance is responsible for the administration of thefinance of the government. It is concerned with all economic andfinancial matters affecting the country.This Ministry comprises four departments, namely:(a) Economic Affairs(b) Expenditure(c) Revenue(d) Company AffairsThe Department of Economic Affairs consists of eight maindivisions:(i) Economic(ii) Banking(iii) Insurance(iv) Budget(v) Investment(vi) External Finance(vii) Fund bank(viii) Currency and coinage.This Department inter alia monitors current economic trends andadvises the government on all matters of internal and externaleconomic management.Public Finance: The power to raise and disburse public fundshas been divided under the constitution between union and StateGovernment. Sources of revenue for Union and States are bylarge mutually exclusive if shareable taxes are excluded.All receipts and disbursement of the Union are kept under twoseparate headings namely:(a) Consolidated Fund of India and (b) Public Account of India.All the revenues received, loans raised and money received inrepayment of loans by the Union form the Consolidated Fund.No money can be withdrawn from this fund except by an Act ofParliament. All other receipts go to public accounts anddisbursements. These are not subject to the vote of Parliament.To meet unforeseen needs not envisaged in the AnnualAppropriation Act, a Contingency Fund has been established.These three are in each state also.Sources of Revenue: The main sources of the Union tax revenueare Custom duties, Union excise duties, Corporate and Incometaxes, non-tax revenues comprise interest receipts, includinginterest paid by the railways, telecommunications dividends andprofits.The main heads of revenue in the states are taxes and dutieslevied by the respective state governments, shares of taxes leviedby the Union and grants received from the Union Property taxes,octroi and terminal taxes are the mainstay of local finance.Public Debt: It includes internal debt comprising borrowing insidethe country like market loans, compensations and other bonds,treasury bills issued to the RBI State Governments, Commercialbanks as well as non-negotiable non-interest bearing rupeessecurities issued to the international financial institutions andexternal debt comprising loans from foreign countries andinternational financial institutions.

PLANNING COMMISION REPLACES THE NITI AAYOGThe Planning Commission was set up on the 15th of March, 1950through a Cabinet Resolution. Nearly 65 years later, the countryhas metamorphosed from an under-developed economy to anemergent global nation with one of the world's largest economies.In the context of governance structures, the changed requirements

5


of our country, point to the need for setting up an institution thatserves as a Think Tank of the government - a directional andpolicy dynamo. The proposed institution has to providegovernments at the central and state levels with relevant strategicand technical advice across the spectrum of key elements ofpolicy. This includes matters of national and international importon the economic front, dissemination of best practices from withinthe country as well as from other nations, the infusion of newpolicy ideas and specific issue-based support. The institutionhas to be able to respond to the changing and more integratedworld that India is part of. An important evolutionary changefrom the past will be replacing a centre-to-state one-way flow ofpolicy by a genuine and continuing partnership with the states.We need to find our own strategy for growth. The new institutionhas to zero in on what will work in and for India. It will be aBharatiya approach to development.

DIFFERENCE BETWEEN THE NITI AAYOG ANDPLANNING COMMISSION

Under the Planning Commission centre-to-state one-way flow ofpolicy existed, whereas, the NITI Aayog has planned a genuineand continuing partnership of states. Now, state governmentscan play an active role in achieving national objectives, as theyhave been empowered to provide with strategic and technicaladvice across the spectrum of policymaking. The institution to give life to these aspirations is the NITI Aayog(National Institution for Transforming India). This is beingproposed after extensive consultation across the spectrum ofstakeholders including inter alia state governments, domainexperts and relevant institutions.

COMPOSITION

Chairperson: Prime Minister.Governing Council: It will consist of Chief Ministers (of States)and Lt. Governors (of Union Territories).Regional Council: It will be formed on need basis. It willcompromise Chief Ministers (of States) and Lt. Governors (ofUnion Territories).Vice-Chairperson: To be appointed by the Prime Minister. Members: Full time Basis.Part time members: Maximum of 2. They will from leadinguniversities research organisations and other relevant institutionson a rotational basis. Ex Officio members: Maximum of 4 members of the Union Councilof Ministers to be nominated by the Prime Minister.Special invitees: They will be nominated by the Prime Ministerand will be experts, specialists and practitioners with relevantdomain knowledge as special invitees.Chief Executive Officer: Appointed by the Prime Minister for afixed tenure, in the rank of Secretary to the Government of India.Secretariat: If deemed necessary.The NITI Aayog will work towards the following objectives:(a) To evolve a shared vision of national development priorities,

sectors and strategies with the active involvement of Statesin the light of national objectives. The vision of the NITIAayog will then provide a framework 'national agenda' for thePrime Minister and the Chief Ministers to provide impetus to

(b) To foster cooperative federalism through structured supportinitiatives and mechanisms with the States on a continuousbasis, recognizing that strong States make a strong nation

(c) To develop mechanisms to formulate credible plans at thevillage level and aggregate these progressively at higher levelsof government

(d) To ensure, on areas that are specifically referred to it, that theinterests of national security are incorporated in economicstrategy and policy

(e) To pay special attention to the sections of our society thatmay be at risk of not benefitting adequately from economicprogress

(f) To design strategic and long term policy and programmeframeworks and initiatives, and monitor their progress andtheir efficacy. The lessons learnt through monitoring andfeedback will be used for making innovative improvements,including necessary mid-course corrections g. To provideadvice and encourage partnerships between key stakeholdersand national and international likeminded Think Tanks, aswell as educational and policy research institutions h. To createa knowledge, innovation and entrepreneurial support systemthrough a collaborative community of national andinternational experts, practitioners and other partners i. Tooffer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementationof the development agenda

(j) To maintain a state-of-the-art Resource Centre, be a repositoryof research on good governance and best practices insustainable and equitable development as well as help theirdissemination to stake-holders

(k) To actively monitor and evaluate the implementation ofprogrammes and initiatives, including the identification of theneeded resources so as to strengthen the probability ofsuccess and scope of delivery

(l) To focus on technology upgradation and capacity buildingfor implementation of programmes and initiatives

(m) To undertake other activities as may be necessary in order tofurther the execution of the national development agenda,and the objectives mentioned above

FUNCTIONS THAT WILL BE UNDERTAKEN BY THENITI AAYOG• It will develop mechanisms for formulation of credible plans

to the village level and aggregate these progressively athigher levels of government

• Special attention will be given to the sections of the societythat may be at risk of not benefitting adequately fromeconomic progress

• It will also create a knowledge, innovation andentrepreneurial support system through a collaborativecommunity of national and international experts,practitioners and partners

• It will offer a platform for resolution of inter-sectoral andinter-departmental issues in order to accelerate theimplementation of the development agenda

• It will also monitor and evaluate the implementation ofprogrammes, and focus on technology upgradation andcapacity building.

6


IMPORTANT POINTS TO REMEMBER• First Industrial Resolution Policy in India - 1948• New Industrial Policy - 1991• Planning Commission was set up in - 1950• First Five year plan started from - 1951• Major aim of planning - To improve standards of living of people• Removal of Poverty (Garibi Hatao) - 4th Five Year Plan (Indira

Gandhi)

ECONOMIC PLANNING IN INDIA• General Objectives :• To improve national income and raise the standard of living

in the country.• To attain rapid industrialization with an emphasis on basic

and heavy industries.• To create and expand employment opportunities.• To ensure distributional justice through reduction in

inequalities in income and wealth.• To increase employment opportunities.• Economic planning is the method of allocating resources

(physical and human) among different uses in order ofpreferences and the detailed scheme prepared for that iscalled as the economic plan.

• Bombay Plan, aimed at doubling the per capita income in thenext 15 years, was prepared by eight noted businessmen ofthe country in 1943.

• People’s Plan was prepared by Shri M N Roy in April, 1945.• Gandhian Plan was prepared by Shriman Narayan in 1944.• Sarvodaya Plan was prepared by Shri Jaiprakash Narayan

in January, 1950.

NATIONAL INCOME IN INDIA• The first attempt to estimate the National income of India

was made 1868 by Dadabhai Naoroji in his book ‘Povertyand Un-British Rule in India.’

• The first scientific estimate of National Income of India wasmade by Dr. V K R V Rao.

FIVE YEAR PLANS1st Plan: 1951-56• Priority giving to Agriculture and Irrigation.• “Harrod Domar” growth model adopted.• This is the only plan in which Prices Fell.

2nd Plan: 1956-61• PC Mahalanobis prepared this Plan. Priority given to basic

and heavy industries.• Bhilai, Rourkela and Durgapur Steel Plants, ONGC, Ranchi

Heavy Engg. Corporation, Neyveli Lignite Corporation,Multi-purpose projects - Nagarjuna Sagar, Bhakra Nangal,Hirakud started during this Plan.

• Deficit financing started in this plan.• “Socialist pattern of society” is accepted as a goal.

3rd Plan : 1961-66• This plan was a failure. Food output fell, i.e., became negative.• Bokaro Steel Plant in 1964.• Sever drought in 100 years, occurred in 1965-66.• China’s and Pakistan’s innovations.

• Rupee devalued in June 1966 (devaluation was first done in1949).

DURING 1966-69: THREE ANNUAL PLANS, PLAN HOLIDAY• Green Revolution in 1966 Kharif.• 14 Banks nationalized in July 1969

4th Plan - Aim : 1969-74• Poverty Removal, Growth with stability with distributive

justice, self-reliance• Gadgil Formula : It was followed since 4th plan for central

assistance for state plans. This formula was modified byNDC in Dec. 1991 when Pranab Mukherjee was the Chairmanof Planning Commission. Hence, it became Gadgil -Mukherjee formula since 8th Plan : “Planning from below”started from 4th Plan.

• “Garibi Hatao” slogan in 1971 Elections• Privy purses were abolished in 4th Plan

5th Plan - Aim : 1974-79• Poverty removal became distinct objective for the first time.

DP Dhar drafted.• “Minimum Needs Programme” launched.• Command Area Development Programme was started in

1974-75 to utilise water in major and medium irrigation projectsin an optimum manner.

• Oil crisis : 1973 Sept.• 20 point programme replaced 5th plan discontinued 1 year in

advance.

6th Plan: 1978-83• Proposed by Janata Party but it was defeated in elections

and could implement Rolling Plan for 2 years for 1978-80.Prof. DT Lakdawala was the Dy. Chairman, PlanningCommission.

• The idea “Rolling Plan” was taken from Japan.• “Rolling Plan” concept coined by Gunnar Myrdal.• “Hindu rate of Growth” crossed from 5th plan. This concept

was coined by Prof. Raj Krishna (Growth Rate 3% to 3.5%)

6th Plan: Aim 1980-85• Poverty eradication.• IRDP, TRYSEM, NREP launched during this Plan.• Visakhapatnam Steel Plant (Andhra Pradesh), Salem (Tamil

Nadu) Bhadravathi Steel Plants were built.

7th Plan: 1985-90• Food, Work, Productivity, “Jawahar Rozgar Yojana”

launched in April 1989’.• Vakil and Brahmananda’s wage good strategy adopted in

the 7th Plan.

8th Plan : 1992-97• Indicative planning : Based on the model of John.W.Muller.• This plan achieved highest growth rate of 6.8%.• “Indicative planning” implemented first in France in

1947–50.

9th Plan - Aim : 1997-2002• Human resources development, growth with social justice

and equality agricultural rural development, important roleto private sector.

7


10th Plan: 2002-07• Growth rate target 87%, achieved 7.8%• Highest in the entire planning era : 5 crore employment, largest

allocation to energy.

11th Plan : 2007-12• Theme : “Faster and more Inclusive Growth”• Total proposed outlay : ` 36,44,718 Crores (doubled)• Union Government ̀ 21,56,571 Crores (59.2%).• States ̀ 14,88,147 Crores (40.8%).• Approach paper to 11th Plan approved by the Planning

Commission on 18-10-2006.• 52nd National Development Council approved the Draft Plan

on 09-12-2006.• 54th National Development Council approved in its meeting

on 19-12-2007• 55th National Development council meet held on 24-07-2010.• Central Gross Budgetary Support. ` 14,21,711 Crores.• This is centre’s support to plan.• Midterm Review of the 11th plan is done by Planning

Commission on 23-03-2010, and the 11th plan growth targetis reduced from 9% to 8.1%. (It projects the growth rate for20-09-10, 20-10-11, 20-11-12 as 7.2%, 8.5% and 9%respectively. Also to increase the outlay on infrastructuresector from the present $ 500 billion in 11th Plan to $ 1 Trillionin 12th Plan).

12th Plan : 2012-17• This plan’s focus is on instilling “inclusive growth”.• The plan is concentrated to encourages the development of

India’s agriculture, education, health and social welfarethrough government spending.

• It is also expected to create employment through developingIndia’s manufacturing sector and move the nation higher upthe value chain.

• Our PM Manmohan Singh, however, warned thatmaintaining fiscal discipline is important as well.

FINANCE COMMISSION OF INDIA

A finance commission is set up every five years by the Presidentunder Article 280 of the Constitution. Finance Commission ofIndia came into existence in 1951.

It was formed to define the financial relations between thecentre and the state. These recommendations cover a period offive years.The commission also lays down rules by which the centre shouldprovide grants-in-aid to states out of the Consolidated Fund ofIndia. It is also required to suggest measures to augment theresources of states and ways to supplement the resources ofpanchayats and municipalities.Composition of the Fourteenth Finance CommissionThe Fourteenth Finance Commission has been set up under theChairmanship of Dr. Y.V.Reddy [Former Governor Reserve Bankof India].

Other Members of the Commission are:(i) Ms. Sushma Nath [Former Union Finance Secretary],(ii) Dr. M.Govinda Rao [Director, National Institute for Public

Finance and Policy, New Delhi].(iii) Dr. Sudipto Mundle, Former Acting Chairman, National

Statistical Commission.(iv) Prof Abhijit Sen (Member, Planning Commission) is the part-

time Member of the Fourteenth Finance.(v) Commission. Shri Shri Ajay Narayan Jha is the Secretary,

Fourteenth Finance Commission.Qualifications of the MembersThe Chairman of the Finance Commission is selected amongpeople who have had the experience of public affairs. The otherfour members are selected from people who:1. Are, or have been, or are qualified, as judges of High Court, or2. Have knowledge of Government finances or accounts, or3. Have had experience in administration and financial expertise;

or4. Have special knowledge of economicsProcedure and Powers of the Commission: The Commissionhas the power determine their own procedure and:1. Has all powers of the civil court as per the Court of Civil

Procedure, 1908.2. Can summon and enforce the attendance of any witness or

ask any person to deliver information or produce a document,which it deems relevant.

3. Can ask for the production of any public record or documentfrom any court or office.

4. Shall be deemed to be a civil court for purposes of Sections480 and 482 of the Code of Criminal Procedure, 1898.

Tenure of the 14th Finance Commission: The FinanceCommission is required to give its report by 31st October, 2014.Its recommendations will cover the five year period commencingfrom 1st April, 2015.

Naars imhan Committee I-II Banking Sector ReformsS.P. Gupta Committee UnemploymentOnkar Goswami Committee Industrial SicknessAbid Hussian Committee Small Scale Indus triesShankar Lal Guru Committee Agricultural MarketingMalhotra Committee InsuranceRakesh Mohan Committee InfrastructureKhan Committee Universal BankingBhandari Committee Res tructuring of Rural BanksChalayia Committee Tax ReformsN.K. Singh Committee Foreign Direct Inves tmentJanki Ram Committee Share ScamRangrajan Committee Balance of PaymentsY V Reddy Committee Adminis tered Interes t RateMS Ahluwalia (Task Force) Employment OpportunitiesMeera Seth Committee Handloom (Taxtile)Abhijeet Sen Committee Grain Policy

Some Important Committees

8


Financial Institution Year of EstablishmentReserve Bank of India (RBI) April 1, 1935Industrial Finance Corporation of India (IFCI) 1948State Bank of India (SBI) July 1, 1955Unit Trust of Inida (UTI) February 1, 1964Industrial Development Bank of India (IDBI) July, 1964National Bank for Agriculture and Rural Development (NABARD) July 12, 1982

Small Industries Development Bank of India (SIDBI) 1990

Export-Import Bank of India (EXIM Bank) January 1, 1982National Housing Bank (NHB) July, 1988Life Insurance Corporation (LIC) September, 1956General Insurance Corporation (GIC) November, 1972Regional Rural Banks (RRB) March, 1975

Housing Development Finance Corporation Ltd. (HDFC) 1977

Important Financial Institutions of India

S.N. Programme Year of Begining1 Community Development Programme (CDP) 19522 Intensive Agriculture Development Programme (IADP) 1960-613 Green Revolution 1966-674 Drought-Prone Area Programme (DPAP) 19735 Command Area Development Programme (CADP) 1974-756 Desert Development Programme (DDP) 1977-787 Food for Work Programme 1977-788 Antyodaya Yojana 1977-789 Training Rural Youth for Self Employment (TRYSEM) Aug 15, 197910 Integrated Rural Development Programme (IRDP) Oct 2, 198011 Development of Women and Children in Rural Areas (DWCRA) Sept, 198212 Rural Landless Employment Gurantee Programme (RLEGP) Aug 15, 198313 Jawahar Rozgar Yojana Apr, 1989

14 Nehru Rozgar Yojana Oct, 198915 Employment Assurance Scheme (EAS) Oct 2, 199316 Members of Parliament Local Area Development Scheme (MPLADS) Dec, 199317 Swarna Jayanti Shahari Rozgar Yojana (SJSRY) Dec, 199718 Annpurna Yojana Mar, 199919 Swarna Jayanti Gram Swarozgar Yojana (SGSY) Apr, 199920 Jawahar Gram Samriddhi Yojana (JGSY) Apr, 199921 Pradhan Mantri Gramodaya Yojana 200022 Antyodaya Anna Yojana Dec 25, 200023 Pradhan Mantri Gram Sadak Yojana (PMGSY) Dec 25, 200024 Sampoorna Gramin Rozgar Yojana (SGRY) Sept 25, 200125 Jai Prakash Narayan Rozgar Guarantee Yojana 2002-0326 Bharat Nirman Yojana 2005-0627 Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) 2006

Various Poverty Alleviation and Employment Generation Programmes since Independence

9


S.N. Organization Year of Establishment Headquarters1 IMF (International Monetary Fund) Dec, 1945 Washington DC2 IBRD (International Bank for Reconstruction and Development) or World Bank Dec, 1945 Washington DC3 WTO (World Trade Organization) 1995 Geneva4 ADB (Asian Development Bank) 1966 Manila5 ASEAN (Association of South East Asian Nations) 1967 Jakarta6 APEC (Asian Pacific Economic Cooperation) 1989 –7 NAFTA (North American Free Trade Agreement) 1992 –

8 EU (European Union) 1991 Brussels9 OPEC (Organization of Petroleum Exporting Countries) 1960 Vienna10 SAARC (South Asian Association for Regional Cooperation 1985 Kathmandu11 G-15 1989 Geneva12 OECD (Organization for Economic Cooperation and Development) 1961 Paris13 UNO (United Nation Organization) Oct 24, 1945 New York

Important International Organizations

BANKING IN INDIA

The Indian banking sector is broadly classified into scheduledbanks and non-scheduled banks. The scheduled banks are thosewhich are defined under the 2nd Schedule of the Reserve Bank ofIndia Act, 1934. The scheduled banks are further classified into:Nationalised banks; State Bank of India and its associates;Regional Rural Banks (RRBs); foreign banks; and other Indianprivate sector banks. The term commercial banks refer to bothscheduled and non-scheduled commercial banks which areregulated under the Banking Regulation Act, 1949.Generally banking in India was fairly mature in terms of supply,product range and reach-even though reach in rural India and tothe poor still remains a challenge. The government has developedinitiatives to address this through the State Bank of Indiaexpanding its branch network and through the National Bank forAgriculture and Rural Development with things like microfinance.

MONETARY POLICY

Monetary policy is the macroeconomic policy laid down by thecentral bank. It involves management of money supply andinterest rate and is the demand side economic policy used by thegovernment of a country to achieve macroeconomic objectiveslike inflation, consumption, growth and liquidity.In India, monetary policy of the Reserve Bank of India is aimed atmanaging the quantity of money in order to meet the requirementsof different sectors of the economy and to increase the pace ofeconomic growth.The RBI implements the monetary policy through open marketoperations, bank rate policy, reserve system, credit control policy,moral persuasion and through many other instruments. Usingany of these instruments will lead to changes in the interest rate,or the money supply in the economy. Monetary policy can beexpansionary and contractionary in nature. Increasing moneysupply and reducing interest rates indicate an expansionary policy.The reverse of this is a contractionary monetary policy.For instance, liquidity is important for an economy to spur growth.To maintain liquidity, the RBI is dependent on the monetary policy.

By purchasing bonds through open market operations, the RBIintroduces money in the system and reduces the interest rate.

UNEMPLOYMENT

Unemployment is a major developmental issue in Indian economyis unemployment. When the labour possesses necessary abilityand health to perform a job, but does not get job opportunitiesthat state is called as unemployment. Number of unemployed isequal to labour force minus workforce. The labour force refers tothe number of persons who are employed plus the number whoare willing to be employed. The work force includes those whoare actually employed in economic activity. If we deduct workforce from labour force we get the number of unemployment. Theunemployment rate means the number of persons unemployedper 1000 persons in the labour force.

TYPES OF UNEMPLOYMENTFollowing are the important types of unemployment.1. Voluntary unemployment: Voluntary unemployment

happens when people are not ready to work at the prevailingwage rate even if work is available. It is a type ofunemployment by choice.

2. Involuntary Unemployment: It is a situation when peopleare ready to work at the prevailing wage rate but could notfind job.

3. Natural Unemployment: This is postulated by the PostKeynesians. According to them in every economy thereexists a particular percentage of unemployment.

4. Structural unemployment: This type of unemployment isnot a temporary phenomenon. This type of unemploymentoccurs due structural changes in the economy. It resultsdue the result of backwardness and low rate of economicdevelopment.

5. Disguised Unemployment: When more people are engagedin a job than actually required, then it is called disguisedunemployment.

6. Under Employment: This exists when people are not fullyemployment ie; when people are partially employed.

10


7. Open Unemployment: Open unemployment is a situationwhere a large labour force does not get work opportunitiesthat may yield regular income to them. It is just opposite todisguised unemployment. It exists when people are readyto work but are not working due to non availability of work.

8. Seasonal unemployment: Generally this type ofunemployment is associated with agriculture. This type ofunemployment occurs when the workers are engaged in aseason products.

9. Cyclical Unemployment: It is generally witnessed in developednations. This type of unemployment is due to businessfluctuation and is known as cyclical unemployment.

10. Technological Unemployment: This type of unemploymentoccur when there is introduction of a new technology whichcauses displacement of workers.

11. Frictional Unemployment: It is a temporary unemployment whichexists when people moved from one occupation to another.

POVERTY IN INDIA

Poverty in India is a historical reality. From late 19th centurythrough early 20th century, under British colonial rule, poverty inIndia intensified, peaking in 1920s. Famines and diseases killedmillions each time. After India gained its independence in 1947,mass deaths from famines were prevented, but poverty increased,peaking post-independence in 1960s. Rapid economic growthsince 1991, has led to sharp reductions in extreme poverty inIndia. However, those above poverty line live a fragile economiclife. Lack of basic essentials of life such as safe drinking water,sanitation, housing, health infrastructure as well as malnutritionimpact the lives of hundreds of millions.The World Bank reviewed and proposed revisions in May 2014,to its poverty calculation methodology and purchasing powerparity basis for measuring poverty worldwide, including India.According to this revised methodology, the world had 872.3 millionpeople below the new poverty line, of which 179.6 million peoplelived in India. In other words, India with 17.5% of total world'spopulation, had 20.6% share of world's poorest in 2011.

INFLATION

Inflation is the percentage change in the value of the WholesalePrice Index (WPI) on a year-on year basis. It effectively measuresthe change in the prices of a basket of goods and services in ayear. In India, inflation is calculated by taking the WPI as base.Formula for calculating Inflation

=

(WPIin month of corrent year-WPIinsamemonth of previous year) ×100

WPI in samemonth of previous year

Inflation occurs due to an imbalance between demand and supplyof money, changes in production and distribution cost or increasein taxes on products. When economy experiences inflation, i.e.,when the price level of goods and services rises, the value ofcurrency reduces. This means now each unit of currency buysfewer goods and services.It has its worst impact on consumers. High prices of day-to-daygoods make it difficult for consumers to afford even the basiccommodities in life. This leaves them with no choice but to ask

for higher incomes. Hence the government tries to keep inflationunder control.Contrary to its negative effects, a moderate level of inflationcharacterises a good economy. An inflation rate of 2 or 3% isbeneficial for an economy as it encourages people to buy more andborrow more, because during times of lower inflation, the level ofinterest rate also remains low. Hence the government as well as thecentral bank always strive to achieve a limited level of inflation.

BUDGET

The Union Budget referred to as the Annual Financial Statementin Article 112 of the Constitution of India, is the annual budget ofthe Republic of India, presented each year on the last workingday of February by the Finance Minister of India in Parliament.The budget, which is presented by means of the Financial Billand the Appropriation bill has to be passed by the House beforeit can come into effect on April 1, the start of India's financial year.An Interim Budget is not the same as a 'Vote on Account'. Whilea 'Vote on Account' deals only with the expenditure side of thegovernment's budget, an Interim Budget is a complete set ofaccounts, including both expenditure and receipts.An Interim Budget gives the complete financial statement, verysimilar to a full Budget. While the law does not debar the Uniongovernment from introducing tax changes, normally during anelection year, successive governments have avoided making anymajor changes in income tax laws during an Interim Budget.

POPULATION

The population of India is estimated at 1,267,401,849 as of July 1,2014. India's population is equivalent to 17.5% of the total worldpopulation. India ranks number 2 in the list of countries bypopulation. The population density in India is 386 people perKm2. 32% of the population is urban (410,404,773 people in 2014).The median age in India is 26.6 years.India is the second most populous country in the world, withover 1.27 billion people (2014), more than a sixth of the world'spopulation. Already containing 17.5% of the world's population,India is projected to be the world's most populous country by 2025,surpassing China, its population reaching 1.6 billion by 2050. Itspopulation growth rate is 1.2%, ranking 94th in the world in 2013.The Indian population had reached the billion mark by 1998.India has more than 50% of its population below the age of 25and more than 65% below the age of 35. It is expected that, in2020, the average age of an Indian will be 29 years, compared to37 for China and 48 for Japan; and, by 2030, India's dependencyratio should be just over 0.4.Fertility Rate: (Total Fertility Rate, or TFR), it is expressed aschildren per woman. It is calculated as the average number of childrenan average woman will have during her reproductive period (15 to 49years old) based on the current fertility rates of every age group inthe country, and assuming she is not subject to mortality.Density (P/Km²): (Population Density) Population per squareKilometer (Km²).Urban Pop %: Urban population as a percentage of total population.Urban Population: Population living in areas classified as urbanaccording to the criteria used by each country.Country's Share of World Pop: Total population in the country as apercentage of total World Population as of July 1 of the year indicated.

11


1. The central banking functions in India are performed bythe:1. Central Bank of IndiaII. Reserve Bank of IndiaIII. State Bank of IndiaIV. Punjab National Bank(a) I, II (b) II(c) I (d) II, III

2. Development expenditure of the Central government doesnot include:(a) defence expenditure(b) expenditure on economic services(c) expenditure on social and community services(d) grant to states

3. ICICI is the name of a:(a) chemical industry (b) bureau(c) corporation (d) financial institution

4. On July 12, 1982, the ARDC was merged into:(a) RBI(b) NABARD(c) EXIM Bank(d) None of the above

5. In which of the following types of economy are the factorsof production owned individually?(a) Capitalist(b) Socialist(c) Mixed(d) Both (a) and (b)

6. Poverty in less developed countries is largely due to:(a) voluntary idleness(b) income inequality(c) lack of cultural activities(d) lack of intelligence of the people

7. The most appropriate measure of a country’s economicgrowth is its:(a) Gross Domestic Product(b) Net Domestic Product(c) Net National Product(d) Per Capita Real Income

8. Which of the following committees examined and suggestedfinancial sector reforms?(a) Abid Hussain Committee(b) Bhagwati Committee(c) Chelliah Committee(d) Narasimham Committee

9. Which of the following contributes the maximum earningsin Indian Railways?(a) Passenger Earning (b) Goods Traffic Earning(c) Sundry Earning (d) Other Coach Earning

10. SEBI is a(a) constitutional body (b) advisory body(c) staturory body (d) non-statutory body

11. Who has presented the Union Budget of India maximumnumber of times?(a) Choudhary Charan Singh(b) Pranab Mukherjee(c) VP Singh(d) Morarji Desai

12. Who prints and supplies the currency notes in India?(a) Security Press, Noida (b) Security Press, Mumbai(c) RBI, Delhi (d) Security Press, Nasik

13. Indian Economy is...............economy.(a) mixed (b) socialist(c) free (d) Gandhian

14. The ‘Father of Economics’ is:(a) Max Muller (b) Karl Marx(c) Adam Smith (d) Paul

15. National Sample Survey (NSS) was established in(a) 1950 (b) 1951(c) 1952 (d) 1943

16. Agriculture Income Tax is assigned to the State Governmentby:(a) the Finance Commission(b) the National Development Council(c) the Inter-State Council(d) the Constitution of India

17. National Income is the:(a) Net national product at market price(b) Net national product at factor cost(c) Net domestic product at market price(d) Net domestic product at factor cost

18. Who among the following was the first Chairman of thePlanning Commission?(a) Dr Rajendra Prasad(b) Pt Jawaharlal Nehru(c) Sardar Vallabhbhai Patel(d) JB Kriplani

19. Planning Commission was established in the year:(a) 1950 (b) 1947(c) 1975 (d) 1960

20. During which Plan the growth rate of agricultural productionwas negative?(a) Third Plan (b) Second Plan(c) First Plan (d) None of these

21. The Planning Commission of India is:(a) a constitutional body(b) a statutory body(c) a non-statutory body(d) an independent and autonomous body

12


22. Which one of the following statements most appropriatelydescribes the nature of the Green Revolution?(a) Intensive cultivation of crops(b) Seed-fertilizer-water technology(c) Intensive agriculture district programme(d) High-yielding varieties programme

23. Who gave the call for ‘Evergreen Revolution’ in India?(a) MS Swaminathan (b) APJ Abdul Kalam(c) Dr Manmohan Singh (d) MS Ahluwalia

24. Abid Hussain Committee is related to reforms in industries.(a) private sector (b) large(c) public sector (d) small

25. Name the First Indian private company to sign an accordwith Government of Myanmar for oil exploration in secondoffshore blocks in that country:(a) Reliance Energy (b) GAIL(c) ONGC (d) Essar Oil

26. In which area is the public sector most dominant in India?(a) Organized term lending financial institutions(b) Transport(c) Commercial banking(d) Steel production

27. Reserve Bank of India was nationalized in the year:(a) 1935 (b) 1945(c) 1949 (d) 1969

28. In India, inflation measured by the:(a) Wholesale Price Index number(b) Consumers Price Index for urban non-manual workers(c) Consumers Price Index for agricultural workers(d) National Income Deflation

29. Paper currency first started in India in:(a) 1861 (b) 1542(c) 1601 (d) 1880

30. Devaluation of currency leads to:(a) fall in domestic prices(b) increase in domestic prices(c) no impact on domestic prices(d) erratic fluctuations in domestic prices

31. The New Symbol of Indian Rupee is a blend of:(a) Devanagiri Ra(b) Roman R(c) Devanagiri Ra and Roman(d) None of these

32. National Rural Development Institute is situated at:(a) Hyderabad (b) New Delhi(c) Shimla (d) Patna

33. RBI was nationalised on:(a) 1945 (b) 1947(c) 1949 (d) 1959

34. Foreign currency which has a tendency of quick migrationis called:(a) Hot currency (b) Soft currency(c) Gold currency (d) Scarce currency

35. Who introduced cooperative society in India?(a) Lord Curzon (b) Lord Wavell(c) Lord Rippon (d) Lord Cornwallis

36. The country without income tax is:(a) Nepal (b) Kuwait(c) Burma (d) Singapore

37. The former name of Reserve Bank of India was:(a) National Bank of India (b) State Bank of India(c) Imperial Bank of India (d) Central Bank of India

38. The currency Deutsche Mark belongs to:(a) Italy (b) Russia(c) Germany (d) Polland

39. MRTP Act was implemented in:(a) 1967 (b) 1968(c) 1969 (d) 1970

40. Corporate Tax is imposed by:(a) State Government (b) Central Government(c) Local Government (d) Both (a) and (b)

41. Which state has the highest Per Capita Income?(a) Maharashtra (b) Delhi(c) Punjab (d) Haryana

42. Regional Rural Banks were established in:(a) 1897 (b) 1975(c) 1965 (d) 1975

43. The currency notes are printed in:(a) Bombay (b) Nasik(c) New Delhi (d) Nagpur

44. The former name of State Bank of India was:(a) Central Bank of India (b) United Bank of India(c) Imperial Bank of India (d) People’s Bank of India

45. Finance Commission is constituted every:(a) two years (b) three years(c) five years (d) six years

46. Who among the following first made economic planningfor India?(a) M. N. Roy (b) Dadabhai Naoroji(c) M. Vishveshwarya (d) Jawaharla Nehru

47. ‘Planned Economy of India’ was written by:(a) M. Vishveshwarya (b) Dadabhai Naoroji(c) Shriman Narayan (d) Jawaharla Nehru

48. ‘Sarvodaya Plan’ was prepared by:(a) Jaiprakash Narayan (b) Mahatma Gandhi(c) Binoba Bhave (d) Jawaharlal Nehru

49. Planning commission of India was established in:(a) 1948 (b) 1950(c) 1952 (d) 1951

50. National Development Council (NDC) was constituted in:(a) 1948 (b) 1950(c) 1952 (d) 1947

51. Planning in India was started in:(a) 1951 (b) 1950(c) 1952 (d) None of these

52. ‘Gadgil Formula’ is concerned with:(a) 4th plan (b) 6th plan(c) 1st plan (d) 3rd plan

53. ‘Mukherjee Committee’ was constituted during:(a) 5th plan (b) 4th plan(c) 6th plan (d) 8th plan

13


54. Who made the first attempt to estimate the National Incomeof India?(a) Dadabhai Naoroji (b) RC Dutt(c) V K R V Rao (d) PC Mahalanobis

55. Which of the following bank is a commercial bank?(a) SBI(b) Regional Rural Banks (RRBs)(c) Cooperative Bank(d) All of the above

56. The Imperial bank of India was established in:(a) 1945 (b) 1931(c) 1921 (d) 1936

57. Mumbai Stock Exchange was set up in:(a) 1875 (b) 1948(c) 1952 (d) 1891

58. UTI is now controlled by:(a) IDBI (b) Finance Ministry(c) RBI (d) SBI

59. State Bank of India (SBI) came into existence in:(a) 1948 (b) 1955(c) 1935 (d) 1949

60. NABARD was established in:(a) 1982 (b) 1964(c) 1980 (d) 1990

61. IDBI was established in:(a) 1964 (b) 1972(c) 1982 (d) 1955

62. RBI was nationalized in:(a) 1949 (b) 1935(c) 1969 (d) 1955

63. The largest bank of India is:(a) RBI (b) SBI(c) Central Bank (d) Bank of India

64. The headquarter of RBI is in:(a) Mumbai (b) Delhi(c) Kolkata (d) Chennai

65. SEBI (Securities and Exchange Board of India) wasconstituted in:(a) 1986 (b) 1982(c) 1988 (d) 1992

66. The majority of workers in India are:(a) casual workers(b) self-employed(c) regular salaried workers(d) None of these

67. Which of the following institutions does not provide loansdirectly to the farmers?(a) NABARD(b) State Bank of India(c) Regional Rural Bank(d) Primary Agricultural Credit Society

68. The apex institution in the area of rural finance is:(a) RBI (b) SBI(c) NABARD (d) All of these

69. Who was the Chairman of the first Finance Commission?(a) K Santhanam (b) A K Chandra(c) P V Rajamannar (d) KC Niyogi

70. Who is the Chairman of the 13th Finance Commission?(a) Vijay Kelkar (b) K C Pant(c) C Rangarajan (d) Montek Singh Ahluwalia

71. National Rural Employment Guarantee Scheme (NREGS)came into force in:(a) 2004 (b) 2006(c) 2002 (d) 2005

72. Community Development Programme was launched in Indiais:(a) 1948 (b) 1952(c) 1950 (d) 1951

73. Green Revolution in India was launched in:(a) 1971-72 (b) 1960-61(c) 1966-67 (d) 1980-81

74. Which of the following is/are included in the primary sector?(a) Agriculture (b) Mining(c) Forestry (d) All of these

75. Which of the following is related to secondary sector?(a) Manufacturing (b) Transport(c) Trade (d) All of these

76. Service sector (tertiary sector) includes:(a) trade (b) transport(c) health and education (d) All of these

77. VAT has been introduced on the recommendation of:(a) Kelkar Committee (b) Rangarajan Committee(c) L K Jha Committee (d) None of these

78. In India, VAT was implemented on:(a) 1 April, 2004 (b) 1 April, 2005(c) 1 April, 2006 (d) 1 March, 2005

79. Which state published the Human Development Report forthe first time in India?(a) Kerala (b) MP(c) UP (d) Rajasthan

80. Disguised unemployment in India is prevalent in:(a) service sector (b) manufacturing sector(c) agriculture sector (d) None of these

81. Which state has the highest proportion of poor population?(a) Orissa (b) Jharkhand(c) Bihar (d) Chhattisgarh

82. Which state has the lowest per capita income?(a) Orissa (b) Bihar(c) MP (d) Rajasthan

83. Which sector contributes maximum to be India’s GDP?(a) Primary sector (b) Secondary sector(c) Tertiary sector (d) All sectors equally

84. Which of the following issues currency notes in India?(a) Finance Ministry (b) Finance Secretary(c) State Bank of India (d) Reserve Bank of India

14


85. Economic Survey of India is published by:(a) Finance Ministry (b) RBI(c) Planning Commission (d) Ministry of Industry:

86. Which is the oldest Stock Exchange of India?(a) BSE (b) NSE(c) DSE (d) OTCEI

87. The slogan of ‘Garibi Hatao’ (Remove Poverty) waslaunched in:(a) 1st Plan (b) 4th Plan(c) 5th Plan (d) 6th Plan

1 (b) 11 (d) 21 (c) 31 (c) 41 (c) 51 (a) 61 (a) 71 (b) 81 (a)2 (a) 12 (c) 22 (b) 32 (a) 42 (d) 52 (a) 62 (a) 72 (b) 82 (b)3 (d) 13 (c) 23 (a) 33 (c) 43 (d) 53 (d) 63 (a) 73 (c) 83 (a)4 (b) 14 (c) 24 (c) 34 (a) 44 (c) 54 (a) 64 (a) 74 (d) 84 (d)5 (a) 15 (c) 25 (d) 35 (a) 45 (c) 55 (a) 65 (c) 75 (a) 85 (a)6 (b) 16 (a) 26 (c) 36 (b) 46 (c) 56 (c) 66 (b) 76 (d) 86 (a)7 (d) 17 (d) 27 (c) 37 (d) 47 (a) 57 (a) 67 (a) 77 (c) 87 (b)8 (d) 18 (b) 28 (a) 38 (c) 48 (a) 58 (a) 68 (c) 78 (b) 88 (b)9 (b) 19 (a) 29 (a) 39 (d) 49 (b) 59 (b) 69 (d) 79 (b) 89 (a)

10 (c) 20 (a) 30 (b) 40 (b) 50 (c) 60 (a) 70 (a) 80 (c) 90 (a)

ANSW ER KEY

88. SEBI was given statutory status in:(a) 1988 (b) 1992(c) 1998 (d) 1993

89. UTI (Unit Trust of India) was established in:(a) 1963 (b) 1966(c) 1974 (d) 1982

90. First Export Processing Zone (EPZ) of the country in privatesector was established at:(a) Surat (b) Kandla(c) Noida (d) Vishakhapatnam

15


This chapter is taken from :

Documents

CHAPTER ECONOMY 5 - Knowledge Philic · 2017. 5. 26. · Buy books :