CPT Chapter Budget, Money and Banking

With Jaya Wahal.Duration:2hrs 21min

Notes

Budget and fiscal Deficit:

Meaning of Budget and fiscal deficit:
Budget = Expected receipts - Expenditure of govt

Budget deficit = Total exp (capital +revenue)-Total receipt (capital +revenue)
Fiscal deficit = Total exp (capital +revenue) - Total receipts (exl borrowings)

Fiscal deficit = Budget deficit +(borrowings + other liability)

Budget deficit doesn’t give true picture of an economy
Fiscal deficit is a more comprehensive measure
Fiscal Policy

Balance of Payment:

Index:
Balance of Trade (BOT)
Balance of Current account
Balance of Payment on Capital account
Balance of Payment
Trends in Balance of Payments

Balance OF Payment:

Balance of current account + capital account
Systematic record of all economic transaction between the residents of one country and the rest of the world in a year
Always balance in book keeping sense.

External Debt:

External assistance is of 2 types-grants and loans
90% of external assistance received by India is from loans.
Sources of loans - IMF,WB,IDA,USA,UK,Japan etc
Share of concessional debt at end 2013 was 10.5% .
External debt was 22,00,000 crore at March,2013.
As per cent of GDP, India external debt was 23% at March 2013.
Debt Service Ratio (Principal & Interest / Total Export)-6% in 2012-13,still high by international standards. represents capacity of a country to serve external debt
Export of goods as of GDP was 25%
India ranks as the third most indebted country after China & Brazil (2012)

Money & Banking:

Index:
Meaning of Money
Functions of Money
Money stock in India

Meaning OF MONEY:
Serves as a medium of exchange - for buying and selling
serves as a common measure of value - value of a good or service can be expressed in terms of money
Serves as a store of value - money saved in present can be used future.

CPT Exam Exposure-Budget

CPT Exam Exposure-Balance of Payment

CPT Exam Exposure-External debts

CPT Exam Exposure-Money

CPT Exam Exposure-Commercial Banks

CPT Exam Exposure-Reserve Bank of India

Take Quiz

Economics Reforms

Infrastructure Challenges & Inflation

CPT Chapter Population, Poverty and Unemployment

With Jaya Wahal.Duration:2hrs 15min

Notes

Population

Population At Glance:
India -125 crs (18%)
China -136 crs (20%)
US- 35 crs
World-700 crs

100 crs= 1 Billion
10 lakh= 1 Million

States
UP -17%
Maharashtra -9%
Bihar-9%

Index:
Meaning of Population
Demographic Trends in India
Causes of the Rapid growth of Population
Population Growth in India & its Effects Economic Development
Demographic dividend
Government measures for solving the population problem

Meaning Of Population:
Total number of people residing in a place.
What is better ? Small or Big Population?
-Depends upon the economy.

Poverty

Index:
Absolute poverty and Relative poverty
Poverty in India
Causes of poverty
Government programmes for Poverty Alleviation

Absolute Poverty and Relative Poverty:

Absolute poverty
Poverty taken in absolute terms and not in related to income or consumption expenditure is absolute poverty.
Relevant to less-developed countries.

Relative poverty
Poverty taken in relative terms and is related to income or consumption expenditure is relative poverty.
Relevant to developed countries.

Unemployment:

Index
Types of Unemployment
Nature of Unemployment in India
Causes of Unemployment in India
Extent of Unemployment in India
Government approach to solve problem

Meaning and Types Of Unemployment:
Voluntary Unemployment
Frictional Unemployment- lockout,changing job
Casual Unemployment-construction, catering
Seasonal Unemployment-holiday resort, sugar mill
Structural Unemployment-economy
Technological Unemployment-replaced by machine
Cyclical Unemployment-trade cycles
Chronic Unemployment-long term
Disguised Unemployment- Farming

CPT Exam Exposure-Population

CPT Exam Exposure-Poverty

CPT Exam Exposure-Unemployment

Take Quiz

Infrastructure Challenges & Inflation

National Income & Tax System

CPT Chapter National Income and Tax System

With Jaya Wahal.Duration:2hrs 00min

hi

Notes

Infrastructural Challenges

Index:
Energy
Transportation
Communication
Health
Education

Energy Index:
Importance
Sources
Electricity
Sources of Electricity
Difficulties & Problems related to Energy
Recent Steps Taken

Inflation:

Index:
What is Inflation?
Types of Inflation
Prices trends in India
Causes of Inflation in India
Measures to check Inflation

What is Inflation:
Upward movement in Price
Decline in purchasing power

Energy -

Important in production process and consumption activities
India is major energy producer and consumer
Sixth largest energy producer
Fourth largest energy consumer
Primary Energy vs Final Energy

Electricity-

Most important source of commercial energy.

Generating power was 2300 MW IN 1950-51.
2,49,000 MW in 2013-14.
over a period of 63 years 100 times increase in capacity.
Major users of electricity are industry(37%), domestic(25%), agriculture(21%)& commercial establishments (10%)

Difficulties and problems relating to Energy-

Demand and supply imbalances in commercial fuels
Oil prices and Inflationary pressure
Growing oil import bills- 37% of our import bill is on POL
Transmission and distribution losses
Sick SEBs
Operational inefficiency- PLF(65% in 2013-14)
Lowest in Eastern Region(62%) Highest in Southern Region(81%) SEB (65%) Central & Pvt. (79%)
Inadequate electrification

Recent steps taken to meet the problem-
Electricity act 2003
Electricity amendment bill 2005,2007
Partnership in excellence - 26 Thermal Station (PLF-60%)
Encouraging Hydel and Wind Energy
Rationalization of tariff structure
Accelerated Power Development and Reform Programme
Automatic approval for 100% foreign equity
National Power Grid(2012)-promote interregional energy Exchge
Ultra Mega Power plants (UMPPs)-9 sites with 4000 MW
Rajiv Gandhi Grameen Vidyutikaran 2005

Railways -

Fourth Largest network in world.
Two main segments - freight and passengers.
Freight - 70% of revenues
Passengers- 30% of revenues
Route length- 65400 kms

Road-

Second largest in the world.
Network of 4.86 million kms
Around 2% of national highway carry around 40% of total road traffic.
Pradhanmantri Bharat Jodo Pariyojana
Pradhan Mantri Gram Sadak Yojana
Making rural roads is one of the six components of Bharat Nirman- goal to provide connectivity to habitation of 1000 people in plain and 500 in hilly and tribal areas
Rural roads network connects 65% all weather roads

Water transport-

Inland Water Transport
14500 km of navigable waterways.
Five waterways are declared national waterways.

Shipping
Coastline of 7517 kms ,12 major ports, 200 minor ports.
95% of global merchandise trade is through seaways.
Kandla -Top traffic handler

Air transport-

Long distance,business travel etc.
Operational
Pvt Sector market share reached more than 82% in 2012
Infrastructure
Airport Authority of India AAI-manages 125 airports (Infrastructure)
Development
AERA-XI Plan
Domestic passenger traffic handling reached 122 million in 13-14.

Prices trends in India-
Prices remained high in recent years due to
High Food Inflation
Increased prices in global market
High international crude prices
Inflation in 2013-14
WPI - 5.98
CPI - 9.68

Causes of Inflation in India-

Increase in Public Expenditure
Deficit financing
Erratic agricultural growth
Agricultural price policy of the Government
Inadequate rise in industrial production
Upward revision of administered prices
Other factors

Measures to check Inflation-

Fiscal measures - Taken by the Govt.
(Taxation Expenditure and Public Borrowing )

Control over Investment
Other Measures

CPT Exam Exposure-Infrastructure Challenges

CPT Exam Exposure-Inflation

Take Quiz

Budget, Money and Banking

Population, Poverty and Unemployment

CPT Chapter National Income and Tax System

With Jaya Wahal.Duration:1hrs 53min

Methods of Measuring National Income
Income Method-
Rents, wages and Salaries, Interest and Profits and composite income

Expenditure Method-
Consumption expenditure
Investment expenditure

Examples-

As per the Value Added Method of measuring national income identify which of the following item is excluded?
(a) Brokerage and Commission earned by dealers of second hand goods
(b) Sale of second hand machines
(c) Production for Self Consumption
(d) Imputed rent of owner occupied houses

Value added method is used to measure______
(a) National Income
(b) Domestic Income
(c) Gross Income
(d) Personal Income

The production method of calculating national income is also known as
(a) Value added method
(b) Income method
(c) Expenditure method
(d) None of the above

Transfer payments refer payments, which are made :
(a) Without any exchange of goods and services
(b) To workers on transfer from one job to another
(c) As compensation to employees
(d) None

Transfer payments refer payments, which are made :

(a) Without any exchange of goods and services
(b) To workers on transfer from one job to another
(c) As compensation to employees
(d) None

National Income differs from Net National Product at market price by the amount of :
(a) Current transfers from rest of the world
(b) Net Indirect Taxes
(c) National debt interest
(d) It does not differ

Net national product at factor cost is also known as :
(a) Net Domestic product
(b) Gross National product
(c) National Income
(d) Personal Income

GNP = GDP +_______
(a) Depreciation
(b) Indirect taxes
(c) NFIA
(d) Subsidies

Which of the following represents National Income?
(a) GDP at factor cost
(b) NDP at factor cost
(c) NNP at market price
(d) NNP at factor cost

GDP at factor cost is equal to GDP at market price minus _____ plus subsidies.
(a) Direct taxes.
(b) Indirect taxes.
(c) Foreign loans.
(d) Depreciation.

Trends in National Income Growth & Structure-
Trends in NNP
Trends in per capita income

Notes

 National Income

Index
National income
Basic concept in National income and output
Methods of Measuring National Income
Trends in National Income Growth and Structure

Basic concept in National income and output

Gross national product
Net national product
NNP at factor cost or National income
Personal Income
Personal Disposal Income
Gross domestic product
GDP at constant prices and current prices
GDP at factor cost and GDP at Market price
Net domestic product

Tax System

Index
What is Direct & Indirect tax?

Merit and Demerits of Direct and Indirect taxes
Tax structure in India
Features of tax structure in India
Evaluation of tax structure in India

What is Direct and Indirect tax

Tax: Compulsory Contribution
Direct Tax: Incidence falls on persons who pay it
e.g. Income tax, Wealth tax
Indirect Tax: Incidence is shifted through a change in price
e.g. Sales tax, Custom, Excise Duty

CPT Exam Exposure-National Income

CPT Exam Exposure-Tax System

Take Quiz

Population Poverty & Unemployment

Role of Different Sectors