UPSC Economics Quiz Notes PDF

16 Jun 2024 13:05

CSE PRELIMS PAPER 1 2024

UPSC Economics Quiz Notes PDF

05 Jun 2024 18:59

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UPSC Economics Quiz Notes PDF

03 Jun 2024 15:07

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UPSC Economics Quiz Notes PDF

03 Jun 2024 08:47

📍 LIQUIDITY ADJUSTMENT FACILITY

#Monetarypolicy

💡 Banks need liquidity to meet their daily mismatches between need and availability.

💡 RBI helps them with a limited amount on a short-term basis through LAF.

💡 Liquidity Adjustment Facility (LAF) was introduced by RBI in 2000. It is the window through which RBI adjusts liquidity (credit) in the market against the collateral of government securities.

💡 When banks borrow under LAF, they do so at Repo rate. Banks undertake to repurchase the security at a later date, be it over night or a few days.

💡 Reverse Repo is when RBI borrows short-term from the market (absorbs excess liquidity) based on government securities and repurchases them. The rate at which it borrows is called Reverse Repo rate as it is the reverse of the Repo.

UPSC Economics Quiz Notes PDF

31 May 2024 18:06

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UPSC Economics Quiz Notes PDF

30 May 2024 08:11

Banking Abbreviations

• FEDAI- Foreign Exchange Dealers Association of India
• ALCO- Asset Liability Committee
• ALM- Asset Liability Management
• KVIC- Khadi and Village Industries Corporation
• KYC- Know Your Customer
• EXIM bank- Export and Import Bank of India
• NABARD- National Bank for Agriculture and Rural Development
• SIDBI- Small Industries Development Bank of India
• EDP- Entrepreneurship Development Programme
• LAMPS- Large Sized Adivasi Multipurpose Societies
• LERMS- Liberalized Exchange Rate Management System
• NABARD- National Bank for Agriculture and Rural Development
• NBFC- Non Banking Finance Companies
• QIB- Qualified Institutional Bankers
• RBI- Reserve Bank of India
• RDBMS- Relational Database Management System
• REC- Rural Electrification Corporation
• RFC- Resident Foreign Currency
• RIDF- Rural Infrastructure Development Fund
• RRB- Regional Rural Bank
• RTGS- Real Time Gross Settlement
• RWA- Risk Weighted Assets
• SBI- State Bank of India
• SCB- Scheduled Commercial Bank
• NRE- Non Resident External Account
• NRI- Non Resident Indian
• SDR- Special Drawing Rights
• YTM-Yield to Maturity
• LAB- Local Area Banks
• ALM- Asset Liability Management
• ANBC- Adjusted Net Bank Credit
• ASBA- Applications Supported Bank Accounts
• DPG- Deferred Payment Guarantee
• DRI- Differential Rate Of Interest
• DSCR- Debt Service Coverage Ratio
• FEDAI- Foreign Exchange Dealers Association Of India
• FOB- Free On Board
• NPV- Net Present Value
• DPN- Demand Promissory Note
• DRAT- Debt Recovery Appellate Tribunal
• OCB- Overseas Corporate Bodies
• POA- Power of Attorney
• OLTAS- Online Tax Accounting System
• OMO- Open Market Operations
• PACS- Primary Agricultural Credit Societies
• LIC- Life Insurance Corporation of India
• IEPF- Investors Education and Protection Fund
• IRDA- Insurance Regulatory and Development Authority
• CCIL- Clearing Corporation of India Limited
• OTCEI- Over the Counter Exchange Of India
• ISCI- International Standard Industrial Classification
• KCC- Kisan Credit Card
• BCSBI- Banking Codes and Standards Board of India
• SEBI- Securities and Exchange Board of India
• SFMS- Structured Financial Messaging Services
• SHG- Self Help Group
• CAR- Capital Adequacy Ratio
• SEBI- Securities and Exchange Board of India
• MICR- Magnetic Ink Character Recognition
• NSE- National Stock Exchange
• FCNR- Foreign Currency Non Resident Deposit Accounts
• CDRS- Corporate Debt Restructuring
• IDRBT- Institute for Development and Research Of Banking Technology
• YTM- Yield To Maturity
• MCA- Ministry Of Company Affairs
• MIS- Management Information System
• CRISIL- Credit Rating Information Services Of India
• ICRA- Investment Information and Credit Rating Agency of India Limited
• CARE- Credit Analysis and Research Limited
• IRDA- Insurance Regulatory and Development Authority of India
• CASA- Current and Savings Accounts
• CBLO- Collateralized Bank Lending Obligations
• CIBIL- Credit Information Bureau of India Limited
• CRR- Cash Reserve Ratio
• KYC- Know Your Customer Guidelines
• IPO- Initial Public Offer
• SLR- Statutory Liquidity Ratio
• SLRS- Scheme for Liberation and Rehabilitation of Scavengers
• EMI- Equated Monthly Instalments
• SSI- Small Scale Industries
• SME- Small and Medium Industries
• UTI- Unit Trust of India
• WPI- Wholesale Price Index
• EDI- Electronic Data Interchange
• EPS- Earning per Share
• ESOP- Employee Stock Options
• PDO- Public Debt Office
• PIN- Personal Identification Number
• NBFC- Non Banking Finance Companies
• NEFT- National Electronic Fund Transfer
• RTGS- Real Time Gross Settlement
• NPA- Non Performing Assets
• QIB- Qualified Institutional Buyers
• BOE- Bill of Exchange
• SMERA- SME Rating Agency of India Limited
• SLR- Statutory Reserve Ratio
• SIDBI- Small Industries Development Bank of India
• SIDC- State Industrial Development Corporation
• SJSRY- Swarna Jayanthi Shahari Rozgar Yojana
• SSSBE- Small Scale Service and Business Enterprises

UPSC Economics Quiz Notes PDF

27 May 2024 10:31

✔️  Key Differences Between FERA and FEMA

❤️ FERA
✔️FERA is an acronym for Foreign Exchange Regulation Act.
✔️It was passed by the Parliament of India in 1973. The act came into force on 1st January 1974.
✔️FERA Act was repealed by the Vajpayee government in 1998.
✔️It was enacted to regulate foreign exchange and payments in India. Its main objective was to conserve forex transactions.
✔️The rules and regulations of FERA on foreign exchange were conservative and restrictive.
✔️This act came into force when the forex position in the country was not good.
✔️Comparatively, FERA Act is lengthier as it has 81 sections.
✔️Under this act, the definition of the term ‘Authorized person’ was narrow.
✔️Under this act, the citizenship of an individual was the basis for determining his/her residential status.
✔️Under FERA, no provisions were made for IT.
✔️Violation of the provisions of FERA has been considered a criminal offence and the punishment for contravention was imprisonment.
✔️Violation of FERA was a non-compoundable offence i.e. the offence cannot be compromised. Moreover, the accused was not allowed any assistance from the lawyer.
✔️The appeals were sent to the Supreme Court.
✔️According to FERA, an individual should obtain permission from the RBI to carry out forex transactions.


❤️ FEMA
✔️FEMA is an acronym for Foreign Exchange Management Act.
✔️FEMA Act was passed by the Parliament of India in 1999 to replace the FERA. It came into force on 1st June 2000.
✔️FEMA is currently active in the country.
✔️It was enacted to remove the stringent regulations on foreign exchange and promote orderly management of foreign exchange and payments. Its main objective was to manage the forex transactions.
✔️The approach of FEMA Act toward foreign exchange is flexible.
✔️This act was introduced when the strict provisions of FERA were hampering the growth of the Indian economy.
✔️FEMA has 49 sections and is shorter than the FERA.
✔️Under this act, the definition of the term ‘Authorized person’ is broad and it has included the banks under it.
✔️Under this act, the basis for determining the residential status was that an individual should be residing in India for the past 6 months.
✔️Provisions on IT were introduced under the FEMA Act.
✔️Violation of the provisions of FEMA has been considered a civil offence and the punishment for contravention was a monetary penalty. If an individual fails to pay the penalty on time, he/she may be imprisoned.
✔️Violation of FEMA is a compoundable offence and the charges can be compromised or removed. FEMA provides the accused the right to obtain legal assistance from a lawyer.
✔️A special director and a special court were introduced under FEMA to address the appeals.
✔️Under FEMA, no such pre-approval or permission of RBI is required to carry out forex transactions.

UPSC Economics Quiz Notes PDF

21 May 2024 10:08

📍 HEDGE FUND

#Capitalmarket  #Moneymarket

A hedge fund is like a Mutual Fund (MFs)-both are investment vehicles which pool investors' money and invest as per the fund's mandate and returns are distributed among unit holders for a commission.

💡 However, hedge funds use strategies far more complex than MFs. Hedge funds are less transparent. SEBI. regulates them under Alternative Investment Fund (AIF).


📍 VENTURE CAPITAL

#Capitalmarket  #Moneymarket

💡 Venture capital is money provided by financial institutions who invest in startups generally that have the potential to develop into significant economic contributors.

💡 The name comes from the fact that the enterprise has certain risk built into it.


📍 ANGEL INVESTORS

#Capitalmarket  #Moneymarket

💡 An angel investor or angel is a wealthy individual or firm that provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

💡 They invest their own money unlike a venture capitalist who invests public money.

💡 They became popular after the web-based enterprises came up in the 1990's. With an aim to encourage entrepreneurship in the country by financing small start-ups, SEBI in 2013 notified norms for angel investors who are allowed to be registered as Alternative Investment Funds (AIFs).

UPSC Economics Quiz Notes PDF

19 May 2024 07:50

✅OBJECTIVE OF IMPORTANT COMMITTEES 

- Swaminathan Committee: Population Policy
- Janaki Raman Committee: Securities Scam
- Daantwala Committee: Unemployment Estimates
- Sarkaria Committee: Center State Relations
- Goswami Committee: Industrial Sickness
- Mahalanobis Committee: National Income
- Rangarajan Committee: Balance of Payments
- Goi Poria Committee: Bank Service Reforms
- Bhurelal Committee: Increase in Motor Vehicle Tax
- Sachar Committee: Socio-economic and Educational Status of Muslims
- Mahajan Committee: Sugar Industry
- Meera Seth Committee: Development of Handloom

UPSC Economics Quiz Notes PDF

11 May 2024 10:50

भारत में बैंकिंग तंत्र(Banking System in India):–

०बैंक ऑफ हिंदुस्तान–1770:
०भारत का पहला बैंक।
०अंग्रेजों द्वारा प्रारम्भ।
०कलकत्ता में।

०बैंक ऑफ बंगाल –1809
०बैंक ऑफ बॉम्बे –1840
०बैंक ऑफ मद्रास –1843:
०1921 में तीनों का विलय।
० इंपीरियल बैंक ऑफ इंडिया का गठन।

०इलाहबाद बैंक– 1865:
०इलाहाबाद में स्थापना।
०बाद में hq कलकत्ता बनाया गया।

०अवध कॉमर्शियल बैंक–1881:
०सीमित देयता के साथ।
०भारतीयों द्वारा स्थापित।
०फैजाबाद में स्थापना।

०पंजाब नेशनल बैंक–1894 :
०पूर्ण देयता के साथ।
०भारतीयों द्वारा स्थापित पहला बैंक।
० लाहौर में स्थापना।
०HQ–नई दिल्ली।

०आरबीआई(RBI)–1935:
०RBI Act,1934 के तहत।
०कलकत्ता में स्थापना।
०बाद में बम्बई स्थानांतरित।
०1 जनवरी 1949 को राष्ट्रीयकरण।

०बैंकिंग रेगुलेशन एक्ट–1949:
०बैंकिंग फर्मों को नियंत्रित करने हेतु।


०स्टेट बैंक ऑफ इंडिया (SBI)–1955:
०इंपीरियल बैंक ऑफ इंडिया का नाम SBI कर दिया गया।
०1 जुलाई 1955 को राष्ट्रीयकरण।
०गोरेवाला समिति की सिफारिश पर।
०मुख्यालय–मुंबई।

नोट:–
०भारत का पहला बैंक “बैंक ऑफ हिंदुस्तान“ है।
०पूर्ण रूप से भारतीयों द्वारा स्थापित पहला बैंक “पंजाब नेशनल बैंक" है।
०19 जुलाई 1969(4th पंचवर्षीय योजना) में इंदिरा गांधी सरकार द्वारा ’14 बैंकों’ का राष्ट्रीयकरण किया गया।
०1980(6th FYP) में “6 बैंकों" का राष्ट्रीयकरण किया गया।

#Prelims Facts"

UPSC Economics Quiz Notes PDF

06 May 2024 05:31

Capacity cost

🧤- Capacity Cost is associated with the capability to produce and deliver a certain level of output.

🧤- It is an expenditure or cost incurred by a company to expand its business operations.

🧤- These costs may include items such as lease agreements on larger facilities, purchase and depreciation of new equipment, as well as increased costs to operate and maintain those larger or newer assets.

🧤- For any business, it is difficult to avoid costs like insurance, rent payments, property taxes, depreciation on equipment, etc. These are examples of capacity costs.

Advantages

- This type of cost helps to ensure that the production costs are kept low while maximizing profits.
- Improves the quality of the product produced & enhances the efficiency of the processes.
- Helps reduce the amount of inventory held by a company, which can help to reduce overhead costs.

Disadvantages
- High cost of energy and infrastructure
- Limited access to capital
- Lack of reliable transportation networks

UPSC Economics Quiz Notes PDF

30 Apr 2024 04:24

📍MONEY MULTIPLIER

💡 It is the ratio of broad money (M3) divided by Reserve Money (M0)

💡 Therefore, Broad money (M3) = Reserve Money (M0) x money multiplier

💡 In other words, when Reserve money increases, Broad money will also increase. Monetary Aggregates.

💡 The New Monetary Aggregates are as given below:

1. Reserve Money (M0) = Currency in circulation + Bankers’ Deposits with the RBI + ‘Other’ deposits with the RBI.

2. Narrow Money (M1) = Currency with the Public + Demand Deposits with the Banking System + ‘Other’ deposits with the RBI.

3. M2 = M1 + Savings Deposits of Post-office Savings Banks.

4. Broad Money (M3) = M1 + Time Deposits with the Banking System.

5. M4 = M3 + All deposits with Post Office Savings Banks (excluding National Savings Certificates).

UPSC Economics Quiz Notes PDF

23 Apr 2024 07:46

🗳Bank of India (RBI)

🔷Founded – 1 April 1935

🔷RBI Nationalized – 1 January 1949

🔷Headquarters – Mumbai, Maharashtra

🔷RBI set up – Hilton Young Commission

🔷1st Governor – Sir Osborne Smith (Australia)

🔷1st Indian Governor – CD Deshmukh

🔷25th Governor – Shaktikanta Das
RBI Deputy Governor (4)
🔷 Tavarna Rabi Sankar
🔷Mukesh Kumar Jain
🔹Michael D Patra
🔹M Rajeshwar Rao

🔶Five Subsidiaries of RBI
🔷Deposit Insurance and Credit Guarantee Corporation of India (DICGC)

🔷Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
Reserve Bank Information

🔷 Technology Private Limited (ReBIT)

🔷Indian Financial Technology and Allied Services (IFTAS)

🔷Reserve Bank Innovation Hub

UPSC Economics Quiz Notes PDF

20 Apr 2024 08:13

👉🏻 Plan Holidays (1990-1992)
Salient Features
➖ Declared due to the failure of the Seventh Plan
➖ Annual plans in 1990-91 and 1991-92

👉🏻 Eighth Five Year Plan
1992-1997
Actual Growth: 6.8% against Targeted Growth: 5.6%
Salient Features
➖ Introduced reforms to combat economic issues
➖ Emphasis on universal education and eradication of illiteracy
➖ Increased private sector investment and improved current account deficit

👉🏻 Ninth Five Year Plan
1997-2002
Actual Growth: 5.4% against Targeted Growth: 6.5%
Salient Features
➖ Focused on growth with social justice and equality
➖ Prioritized agriculture and rural development
➖ Aimed to provide safe drinking water, education, and shelter
➖ Ensured food and nutritional security

👉🏻 Tenth Five Year Plan
2002-2007
Actual Growth: 7.6% against Targeted Growth: 8%
Salient Features
➖ Targeted GDP growth, access to basic services, poverty reduction, gender gap reduction, and more
➖ Focused on various key indicators of development

👉🏻 Eleventh Five Year Plan
2007-2012
Actual Growth: 8% against Targeted Growth: 9%
Salient Features
➖ Introduced the concept of inclusive growth
➖ Addressed agriculture, infrastructure, and education
➖ Set detailed national targets

👉🏻 Twelfth Five-Year Plan
2012-2017
Actual Growth: 5.1% (2012-13), 6.9% (2013-14), 7.2% (2014-15), 7.6% (2015-16), 7.1% (2016-17)
Salient Features
➖ Focused on inclusive growth
➖ Set 25 core monitorable targets, including GDP growth, manufacturing growth, education, poverty reduction, renewable energy, infrastructure, and more.

UPSC Economics Quiz Notes PDF

18 Apr 2024 11:45

🔆 Jute Industry in India

India is the world’s biggest producer of jute, followed by Bangladesh. Jute is primarily grown in West Bengal, Odisha, Assam, Meghalaya, Tripura, and Andhra Pradesh.

▪️Factors responsible for the location of the jute industry in India:
✅ Raw material: These industries are located in close proximity of the jute-producing areas. For instance, in West Bengal the jute mills are located along the banks of Hugli River.
✅ Means of transportation: Inexpensive water transport, supported by a good network of
railways, roadways, and waterways facilitates movement of raw material to the mills.
✅Water requirement: The availability of abundant water facilitates the processing of raw jute. For example, the Hugli river supplies the adequate water for jute mills in West Bengal.
✅ Labour: Cheap labour from West Bengal and adjoining states of Bihar, Odisha and Uttar Pradesh make this region attractive for industries.
✅ Other factors: A large urban centre providing banking, insurance, and port facilities for the export of jute goods, for example, Kolkata.

▪️Challenges faced by the industry:
✅ Fragmentation: Indian Jute industry is highly fragmented and is dominated by the unorganized sector and small and medium industries.
✅ Increasing input costs: Unpredictable market conditions, weather, policies, etc. have resulted in a supply shortage of raw materials and an increase in their material costs.
✅ Highly competitive export market: In the global market, tariff and non-tariff barriers coupled with lack of free/preferential trade agreements are posing a major challenge to these Industries.
🔸 For instance, there is stiff competition in the international market from synthetic substitutes
and from other competitors like Bangladesh, Brazil, Philippines, Egypt, and Thailand.
✅ Other issues:
🔸 Poor access to the latest technology and low automation.
🔸Social issues like child labour and personal safety norms.

It must be noted that the growing global concern for environment-friendly, biodegradable materials, has once again opened the opportunity for jute products. In order to give an impetus to the jute industry, the government has approved that 100% of the food grains and 20% of the sugar shall be mandatorily packed in jute bags.

UPSC Economics Quiz Notes PDF

07 Jun 2024 08:07

✅List of Abbreviations Used in Economics

👉🏻 National Income and Related Aggregates

GDP: Gross Domestic Product
GDP MP: Gross Domestic Product at Market Price
GDP FC: Gross Domestic Product at Factor Cost
NNP MP: Net National Product at Market Price
NNP FC: Net National Product at Factor Cost
NDP MP: Net Domestic Product at Market Price
NDP FC: Net Domestic Product at Factor Cost
PI: Personal Income
PDI: Personal disposable Income
GVA: Gross value added
NVA: Net value added

👉🏻 Money and Banking

LRR: Legal Reserve Requirement
CRR: Cash Reserve Ratio
SLR: Statutory Liquidity Ratio
OMO: Open Market Operation
RBI: Reserve Bank of India
GOI: Government of India
MD: Money Demand
MS: Money Supply

👉🏻Income and Employment Determination

APC:  Average Propensity to Consume
APS: Average Propensity to Save
MPC: Marginal Propensity to Consume
MPS: Marginal Propensity to Save
AD: Aggregate Demand
AS: Aggregate Supply

👉🏻Government Budget and Economy

PSUs: Public Sector Undertakings
FRBMA: Fiscal Responsibility and Budget Management Act

👉🏻Balance of Payment

BOP: Balance of Payment
BOT: Balance of Trade
PPP: Purchasing Power Parity
NEER: Nominal Effective Exchange Rate
FDI: Foreign Direct Investment

UPSC Economics Quiz Notes PDF

05 Jun 2024 09:58

📌 अर्थव्यवस्था के प्रकार –

✍️ कृषक अर्थव्यवस्था – अगर किसी अर्थव्यवस्था के सकल उत्पादन (सकल घरेलू उत्पाद) में प्राथमिक क्षेत्र का योगदान 50% या इससे अधिक हो तो वह कृषक अर्थव्यवस्था कही जाती है।

✍️ औद्योगिक अर्थव्यवस्था – ऐसी अर्थव्यवस्था में उसकी सकल आय में द्वितीयक क्षेत्र का हिस्सा 50% या इससे अधिक रहता है तथा इसी अनुपात में इस क्षेत्रक पर लोगों की निर्भरता भी रहती है। पूरा का पूरा यूरोप-अमेरिका इस स्थिति में रहा था, जब उन्हें औद्योगिक अर्थव्यवस्था का नाम दिया गया था। यह स्थिति भारत में अभी तक नहीं आयी न तो द्वितीयक क्षेत्र का योगदान इस स्तर तक बढ़ा न ही इस पर जनसंख्या की निर्भरता ही बढ़ी।

✍️ सेवा अर्थव्यवस्था – ऐसी अर्थव्यवस्था जिसके अंतर्गत सकल आय में तृतीयक क्षेत्र का योगदान 50% या उससे ज्यादा होता है, उसे सेवा अर्थव्यवस्था कहा जाता है।

📌 Types of Economy –

✍️ Agrarian Economy – If the contribution of the primary sector in the gross production (Gross Domestic Product) of an economy is 50% or more, then it is called agrarian economy.

✍️ Industrial Economy - In such an economy, the share of the secondary sector in its gross income is 50% or more and in the same proportion the dependence of the people on this sector is also there. The whole of Europe-America had been in this state when they were named industrial economies. This situation has not yet come in India, neither the contribution of the secondary sector has increased to this level nor the dependence of the population on it has increased.

✍️ Service Economy - An economy in which the tertiary sector contributes 50% or more to the gross income is called a service economy.

UPSC Economics Quiz Notes PDF

03 Jun 2024 08:47

📍 POTENTIAL GDP

#Nationalincome

💡 Potential output is what the economy can produce without destabilizing the macroeconomic fundamentals like inflation, interest rates, fiscal deficit and so on.

💡 It is the optimum production that can be achieved over the long term.

💡 The actual GDP is what is produced, and the difference between potential output and actual output is referred to as output gap or GDP gap. It indicates the policies that need to be followed, either to accelerate or decelerate the growth rate.

💡 Sustainability is crucial in deciding on potential output. Sustainability is in terms of prices, fiscal deficit, current account deficit (exports cannot be boosted by devaluing the exchange rate as it can be dysfunctional), financial sector not accumulating Non- Performing Assets (NPAs), etc.

UPSC Economics Quiz Notes PDF

03 Jun 2024 08:47

📍 MARKET STABILIZATION BONDS

#Monetarypolicy

💡 For normal liquidity management, there are open market operations of the RBI when the RBI tolls and buys G-secs as the market conditions demand.

💡 But when the need to absorb huge amounts of cash arises, for example post demonetization in 2016, normal OMOS do not work.

💡 When foreign currency comes into the country, it gets converted into rupees and enters the economy. RBI prints rupees to buy the foreign currency. Thus, the rupee flow increases and is inflationary.

💡 It needs to be absorbed by the RBI. In 2004, RBI floated large amount of Government securities, as a part of the Market Stabilization Scheme (MSS), to absorb excess liquidity from the market. MSS is a sterilization effort of the central bank.

💡 The normally available government securities are not enough for the RBI to draw out the huge rupee supply (printed money) that was created for buying the dollar. Therefore, the MSS was started.


📍 LIQUIDITY TRAP

#Monetarypolicy

💡 A liquidity trap is a situation when rates and reserve requirements are lowered to stimulate demand, but it does not have the positive impact on reviving demand and growth. There are no takers for bank credit.

💡 It happens in times of recession that is getting worse. There are deflationary expectations and the economy can be faced with the problem of short-term interest rates reaching or nearing zero. This makes the monetary policy ineffective.

💡 Money supply can be increased by printing more to make credit cheap and de-risk lending. Otherwise, recession can turn into depression. It is called the Zero Lower Bound (ZLB).



📍ANCHOR INVESTOR

#Stockmarket

💡 Anchor investors or cornerstone investors (as they are called globally) are institutional investors like sovereign wealth funds, mutual funds and pension funds that are invited to subscribe for shares ahead of the IPO to boost the popularity of the issue and provide confidence to potential IPO investors.

💡 The benefit for institutional investors applying in anchor quota is that they get guaranteed allotment.

💡 Anchor investors, however, can- not sell their shares for a period of 30 days from the date of allotment as against IPO investors who can sell on listing day.

UPSC Economics Quiz Notes PDF

30 May 2024 16:17

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UPSC Economics Quiz Notes PDF

29 May 2024 10:20

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UPSC Economics Quiz Notes PDF

26 May 2024 19:33

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UPSC Economics Quiz Notes PDF

19 May 2024 07:50

Four Currencies Note Printing Presses

☀️Nashik in Maharashtra owned by govt of India.

🎉Dewas in Madhya Pradesh owned by govt of India

🎊Mysuru in Karnataka owned by RBI

✨Salboni in West Bengal owned by RBI

☀️Four Mints owned by the Government of India Mumbai, Hyderabad, Calcutta and 
Noida.

UPSC Economics Quiz Notes PDF

12 May 2024 15:04

GDP

GDP, also known as gross domestic product, is the total market value or monetary value of all the finished goods and services produced within the borders of a country during a specific time period.

The total goods and services comprise all the government spending, net exports, investments, and private expenditures.

The three approaches to determine GDP are as follows:

Expenditure approach
Income approach
Output approach
Let us discuss these in brief in the following lines:

Expenditure approach

The expenditure approach calculates the GDP by calculating the sum of all the services and goods produced in an economy.

The GDP formula is mathematically represented as:

Y = C + I + G + (X − M)

Where,
Y = Gross domestic product
C = Consumption
I = Investment
G = Government spending
X = Exports
M = Imports

The components are described in brief here.

Consumption is denoted by C. It stands for all the private spending, which includes services, non-durable and durable goods.
Government expenditure is denoted by G and includes employee salaries, construction of roads and railways, airports, schools, and expenditures in the military.
Investment is denoted by I and refers to all the investments that are spent on housing and equipment.
Net export is denoted by (X – M), which is the difference between the total imports and exports.
Income approach

The income approach of GDP calculation is based on the total output of a nation with the total factor of income received by the residents or citizens of a nation.

The formula for calculating GDP by the income approach is:

GDP = Compensation of employees + Rental and royalty income + Business cash flow + Net interest

Output approach

The output approach emphasises the total output of a nation by finding the value of the total value of goods and services produced in a country.

The formula for calculating GDP by the output approach is:

GDP = GDPmp of primary sector + GDPmp of secondary sector + GDPmp of tertiary sector

GDPmp (for all the sectors is calculated as) = Sales + Change in stock – Intermediate consumption

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ℑoin us 🔜 @Economics_Notes_Quiz

UPSC Economics Quiz Notes PDF

06 May 2024 05:31

What is economy

👁An economy (from Greek οίκος – "household" and νέμoμαι – "manage") is an area of the production, distribution and trade, as well as consumption of goods and services by different agents.

👁In general, it is defined 'as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'.

👁 A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors.
👁These factors give context, content, and set the conditions and parameters in which an economy functions.

👁In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone.

UPSC Economics Quiz Notes PDF

04 May 2024 03:52

📍 MARKET STABILIZATION BONDS

#Monetarypolicy

💡 For normal liquidity management, there are open market operations of the RBI when the RBI tolls and buys G-secs as the market conditions demand.

💡 But when the need to absorb huge amounts of cash arises, for example post demonetization in 2016, normal OMOS do not work.

💡 When foreign currency comes into the country, it gets converted into rupees and enters the economy. RBI prints rupees to buy the foreign currency. Thus, the rupee flow increases and is inflationary.

💡 It needs to be absorbed by the RBI. In 2004, RBI floated large amount of Government securities, as a part of the Market Stabilization Scheme (MSS), to absorb excess liquidity from the market. MSS is a sterilization effort of the central bank.

💡 The normally available government securities are not enough for the RBI to draw out the huge rupee supply (printed money) that was created for buying the dollar. Therefore, the MSS was started.


📍 LIQUIDITY TRAP

#Monetarypolicy

💡 A liquidity trap is a situation when rates and reserve requirements are lowered to stimulate demand, but it does not have the positive impact on reviving demand and growth. There are no takers for bank credit.

💡 It happens in times of recession that is getting worse. There are deflationary expectations and the economy can be faced with the problem of short-term interest rates reaching or nearing zero. This makes the monetary policy ineffective.

💡 Money supply can be increased by printing more to make credit cheap and de-risk lending. Otherwise, recession can turn into depression. It is called the Zero Lower Bound (ZLB).



📍ANCHOR INVESTOR

#Stockmarket

💡 Anchor investors or cornerstone investors (as they are called globally) are institutional investors like sovereign wealth funds, mutual funds and pension funds that are invited to subscribe for shares ahead of the IPO to boost the popularity of the issue and provide confidence to potential IPO investors.

💡 The benefit for institutional investors applying in anchor quota is that they get guaranteed allotment.

💡 Anchor investors, however, can- not sell their shares for a period of 30 days from the date of allotment as against IPO investors who can sell on listing day.

UPSC Economics Quiz Notes PDF

28 Apr 2024 05:18

Classification of market on the basis of degree of competition

1. Perfect market: The perfect market is one where there are a large number of buyers and sellers having perfect knowledge of demand, supply and prices.

2. Imperfect market: The market in which the conditions of perfect competition are lacking are characterised as imperfect market. The following situations, each based on the degree of imperfections, may be identified.

a. Monopoly market: Monopoly is a market situation in which there is only one seller of a commodity. When there is only one buyer of a product, the market is termed as a monopsony market.

b. Duopoly market: A duopoly market is one which has only two sellers of a commodity. The market situation in which there are only two buyers of a commodity is known as duopsony market.

c.Oligopoly market: Market in which there are more than two but still a few sellers of a commodity is termed as an oligopoly market.
A market having a few (more than two buyers is known as oligopsony market.

d. Monopolistic competition: When a large number of sellers deal in heterogeneous and differentiated form of a commodity, the situation is called monopolistic competition.
Ex. Choice between various makes of insecticides, fertilizers and equipments.

UPSC Economics Quiz Notes PDF

22 Apr 2024 08:03

🔥📣 RBI Policy Rates

➡️ Policy Rates

📌 Repo rate: It is rate at which RBI lends to its clients generally against government securities.

📌 Reverse Repo Rate: It is rate at which banks lend funds to RBI.

📌 Marginal Standing Facility (MSF) Rate: It is rate at which scheduled banks can borrow funds overnight from RBI against government securities. It is very short term borrowing scheme for scheduled banks.

📌 Bank Rate: It is rate charged by central bank for lending funds to commercial banks. It influences lending rates of commercial banks. Higher bank rate will translate to higher lending rates by banks.

📌 Cash Reserve Ratio (CRR): It is amount of funds that banks have to keep with RBI. The RBI uses CRR to drain out excessive money from system.

📌 Statutory Liquidity Ratio (SLR): It is amount that banks have to maintain a stipulated proportion of their net demand and time liabilities (NDTL) in form of liquid assets like cash, gold and unencumbered securities, treasury bills, dated securities etc.

UPSC Economics Quiz Notes PDF

20 Apr 2024 08:13

💎 History of Economic Planning in India

➖ The concept of economic planning was not completely new in India. In 1934, Sir Visvesvaraya published a book entitled “Planned Economy For India.” He was the first person in the country to advocate economic planning for India.

➖ Towards the end of 1938, the National Planning Committee, under the chairmanship of Pandit Jawaharlal Nehru, was established by then President of INC, Netaji Subhash Chandra Bose. The main objective of the Congress to set up the committee was to provide ways and means for the establishment of new industries and also for the development of the existing ones.

➖ Following this, few historically significant economic plans were made, most of which remained only in the papers.

✅ Concept of Five Year Plans
Five year plans are documents that the Government of India prepares. This shows the income and expenses of the government for the next five years.
➖ The budget of the central government and all the state governments is divided into two parts:
1) non-plan budget, spent on routine items every year
2) plan budget, spent on a five-year basis according to the priorities fixed by the plan
➖ The Indian economy was based on the concept of planning based on five year plans from 1951 to 2017.
➖ The Five Year Plans were formulated, implemented, and regulated by a body known as the Planning Commission.
➖ The Planning Commission was replaced by a think tank called NITI AAYOG in 2015. The NITI Aayog has come out with three documents:
1) 3-year action agenda
2) 7-year medium-term strategy paper
3) 15-year vision document

✅ List of Five Year Plans in India

👉🏻 First Five Year Plan
1951-1956
Actual Growth: 3.6% against Targeted Growth: 2.1%
Salient Features
➖ Based on the Harrod-Domar model
➖ Focused on increasing agricultural production, full employment, and removal of economic inequalities
➖ Achieved objectives like food self-sufficiency and establishment of Indian Institutes of Technology (IITs)

👉🏻 Second Five Year Plan
1956-1961
Actual Growth: 4.3% against Targeted Growth: 4.5%
Salient Features
➖ Developed based on the Harrod-Domar model
➖ Authored by P C Mahalanobis
➖ Emphasized rapid industrialization, but was not fully implemented due to foreign exchange shortages
➖ Introduced the Industrial Policy 1956 for a socialist society

👉🏻 Third Five Year Plan
1961-1966
Actual Growth: 2.8% against Targeted Growth: 5.6%
Salient Features
➖ Initially aimed at self-reliance, shifted focus to defense
➖ Promoted medium and small-scale industries
➖ Borrowed from IMF for the first time
➖ Affected by events like the 1962 Chinese aggression and Indo-Pak war

👉🏻 Plan Holidays (Annual Plans)
1966-1969
Salient Features
➖ Declared due to the failure of the Third Plan
➖ Three yearly plans from 1966 to 1969

👉🏻 Fourth Five Year Plan
1969-1974
Actual Growth: 3.3% against Targeted Growth: 5.6%
Salient Features
➖ Aimed for growth with stability and self-reliance, especially in defense
➖ Introduced family planning programs
➖ Faced challenges due to the influx of Bangladeshi refugees
➖ Nationalized 14 major Indian banks and Green Revolution

👉🏻 Fifth Five-Year Plan
1974-1979
Actual Growth: 4.8% against Targeted Growth: 4.4%
Salient Features
➖ Focused on poverty removal and self-reliance
➖ Introduced the Electricity Supply Act
➖ The first plan with poverty removal as a prime objective

👉🏻 Rolling Plan (1979-1980)
Salient Features
➖ Proposed by the Janata government, removed by the Congress government in 1980

👉🏻 Sixth Five Year Plan
1980-1985
Actual Growth: 5.7% against Targeted Growth: 5.2%
Salient Features
➖ Aimed at poverty removal, higher growth, and modernization
➖ Successfully achieved most targets
➖ Emphasized family planning

👉🏻 Seventh Five Year Plan
1985-1990
Actual Growth: 6% against Targeted Growth: 5%
Salient Features
➖ Focused on food grain production and employment
➖ Recorded high agricultural and overall growth
➖ Followed by planned holidays from 1990 to 1992

UPSC Economics Quiz Notes PDF

18 Apr 2024 11:45

🔆National Mission on Natural Farming

✅In India, Natural farming is promoted as Bharatiya Prakritik Krishi Paddhati Programme (BPKP) and is a sub-mission under centrally sponsored scheme- Paramparagat Krishi Vikas Yojana (PKVY).
✅PKVY falls within the umbrella of the National Mission on Sustainable Agriculture (NMSA).
✅ BPKP is being up-scaled as ‘National Mission on Natural Farming (NMNF)/ (Bhartiya
Prakratik Krishi Paddhati)’ for
implementation all across the country.
✅Tenure: 6 years (2019-20 to 2024-25).
✅It will be a demand driven programme and states shall prepare a long-term perspective plan with year-wise targets and goals.
✅Knowledge partner for natural farming extension: National Institute of Agricultural Extension Management (MANAGE).