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Topic 1: Nature of Indian Economy

Population grows at a high rate of 2 percent per annum Every third poor person in the world is an Indian In 2004-05, 22 percent of population live below the poverty line Indias per capita income was $ 620 in 2004. Gross domestic capital formation was 30% in 2004-05 HDI was 0.602 in 2003 According to latest UNDP Report INDIA Ranks 127 out of 177 countries Gini index for India in 1999-00 was 0.33 In 2004-05 National income at constant prices is Rs.21, 41,776 crores. In 2004-05 Per-capita income at constant prices is Rs.19,469 In 2001 the primary sector occupies 59.3% of population In 2001 the Secondary Sector occupies 18.2% of population In 2001 the Tertiary sector occupies 22.5% of population In 2004-05 primary sector contributes 23% to composition of GDP In 2004-05 secondary sector contributes 23.8% to composition of GDP In 2004-05 tertiary sector contributes 53.2% to composition of GDP In 2004-05 installed electricity generating capacity was 1,37,500 MW In 2001 the total Literacy ratio was 65.38% The bed population ratio was 9.5 per 10,000 population

Topic 3: Industries
The tenth plan aims at achieving a growth rate of 10 percent in the Industrial sector Deceleration and retrogression was occurred in the year 1965-80 3 steel plants Bhilai, Rourkela and Durgapur were established in the 2nd five year plan The number of central public sector units was just 5 only The number of registered and un registered units is more than 118 Lakhs in 2004-05 Growth rate of small scale sector in terms of production is @ 9% since 1973 The production in small scale and cottage industries is more than 4,18,000 crores in 2004-05 The number of registered and unregistered small scale units in 2004-05 is 118-59 lakhs Small-scale sector employed nearly 283 lakhs persons in 2004-05 Exports from this sector is around more than Rs.95,000 crores in 2004-05 The ICOR was 4% during the 8th and 9th plan Large scale industries are concentrated in very few states like maharashtra, west Bengal, Tamilnadu and Gujarat with 44% of total factories In march 2003 there were 1.71 lakhs sick units

Topic 2: Agriculture
The food grain production in 2004-05 was 204.6 million tones Green Revolution was started in the year 1966 Fourteen Major banks was Nationalised in the year 1969 RRBs are established in the year 1975 NABARD is established in the year 1982 Only two third area is rain fed Only 40 percent of the gross cropped area has irrigation facilities Insurance scheme was provided to the farmers in 1985 Kisan credit scheme was introduced in 1998-99 In 1965. FCI storage facilities are started USA per capita income in 2004 is $ 41,400

Topic 4: Services
Services accounted for 35% for total exports of India In 2004 Indias share in world total services export was 1.9% Indian services exports grew by 75% in (2005-06) In the list of exporters of services India is ranked 21st The share of Financial services in 2004-05 is 22.41%

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Topic 5: National Income

GDP of India at current Prices in 2003-04 is rs.25,49,396 crores GDP of India at constant Prices in 2003-04 is Rs.22,26,041 crores During Nineties the growth rate of National Income is around 6.5 % p.a. During the planning period the percapita income has increased at a rate of 2.2% p.a.

Topic 7: Population
In 2004-05 the population was 109 crores India has only about 2.4% of worlds area and less than 1.2% of the worlds income India accommodates about 16.7% of the worlds population The year 1921 is known as year of Great divide for Indias population In 2003 the birth rate was 24.8 and the death rate is 8 per thousand of population Density of population was 324 in 2001 Delhi has the highest density of population with more than 9000 persons Arunachal Pradesh has the lowest density of population with 13 persons In 2001 the six ratio is 933 per 1000 males According to state wise sex-ratio is highest in Kerala with 945 per 1000 males In 2001 the life expectancy was 63.8 Literacy ratio is highest in Kerala with 90% and Lowest in Bihar with less than 50% In India around 40% of the population is unproductive consumers To bring about an increase of 5% in per capita income, an investment of 28% will be needed Family planning was created in 1966 National population policy was started in 2000 Free school education to the children up to 14 years of age Reduction in IMR to below 45 per 1000 live birth by 2007 and 28 per 1000 by 2012 Reduction in MMR to below 2 per 1000 live birth by 2007 and 1 per 1000 by 2012 Reduction in decadal growth rate of population between 2001-2011 to 16.2% Promote delayed marriage for girls not earlier than age 18

Topic 6: Tax Structure

Income tax in India introduced in 1860, But it was discontinued in 1873 Income Tax was reintroduced in 1886 During 1974-75 the marginal rate of income tax is 97.75%, At present it is only 30% Estate duty was first introduced in India in 1953 Estate duty was abolished in 1985 Annual tax on wealth was introduced in 1957 Annual tax on wealth was abolished in 1993, ( Except Certain assets like residential houses, farm houses, urban land, Jewellery, bullion and motor car etc.) Gift tax was introduced in 1958 Gift tax was abolished in 1998 The maximum rate of custom duty is now just 15% The maximum rate of Excise duty is now just 16% MODVAT was introduced in the year 1986-87 CENVAT was introduced in the year 2000-01 VAT was introduced in 1999 and was implemented in April 2005 At present tax revenues form about 16% of total national income of India. Tax Revenue collected by both central and state Govt. in the year 2005-06 is Rs.6,75,000 crores The ratio of direct to indirect taxes which was 40:60 in 1950-51 declined to 20:80 in 1990-91 In 2005-06 the share of direct taxes in the gross tax revenue was 34 percent Only 2.5% of the total population is liable to pay the I.T In 2005-06 Direct taxes are around 5% only Service sector contributes just 4.7% towards tax revenues

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Topic 8: Poverty
Thus if a person living in rural area is earning less than Rs.225 p.m and for Urban area Rs.265 p.m, he will be the below poverty line According to NSSO in 2004-05, 22% of people living below poverty line. The tenth plan has set a target reduction in the poverty ratio to 19.3% by 2007 and to 11% by 2012 To improve the road connectivity PMGSY scheme was introduced in 2000 up to December 2005 a total length of 82,718 kms of road works had been completed To construct houses to the poor people IAY scheme was introduced, up to January, 2006 138 lakhs houses had been constructed /upgraded As a result of restructuring and combining of IRDP programme SGSY, programme was introduced in the year April, 1999 For providing wage employment in rural areas and creation of durable community social and economic assets. SGRY programme was launched in 2001 To intensity the generation at supplementary wage employment NFFWP was launched in November, 2004 To provide gainful employment to the Urban unemployed or under employed person SYSRY scheme was introduced in December 1997 DPAP was launched in 1973-74 to tackle special problems faced by drought prone areas DDP programme was launched in 1977-78 to mitigate adverse effects of diversification IWDP programme was launched in 1989-90 for the development of waste lands/ degraded buds VAMBAY was launched in 2001. to construct and up gradation of dwelling unity

Topic 9: Infrastructural Challenges

In India nearly 80% of the population does not have the purchasing power to enter the market for commercial energy Major users of commercial energy are industry (50%) transport (22%) house hold (12%) Agriculture (9%) and commercial establishment (1%) In 2004-05 our total installed capacity of generating power was around 1,37,500 M.W Roughly we are adding 4000-5000 M.W every year In terms of generation of power thermal is contributing 72%, Hydel is 15% and Nuclear 2.5% and others are contributing 10.5% Demand for coal in 2005-06 is 338 million tonnes and available coal was only 316.66 million tonnes Indias oil imports bill has increased to a record level of Rs.1,34,094 crores in 2004-05 PLF was Lowest in North Eastern Region (16.2% in 2005) PLF was highest in Northern Region (75% in 2005) In SEBs PLF was (65%), (80%) in central sector (86.6%) in private sector in 2005 Electricity Act was passed in 2003 Electricity Amendment Bill was passed is 2005 The total inter-regional transmission capacity is planned to increase from its present 9450 M.W to about 37,150 M.W by 2012 Rajiv Gandhi Grameen Vidhyutikaran Programme was launched in 2005 to provide access to electricity to all areas including villages and hamlets. The total route length of Railways was 63.5 thousand kilometers in 2004-05 According to 2004-05 Railways carried 5416 million of passengers and 601.9 million tonnes of freight traffic. In 2002-03 the total road length had increased to 24,83,300 kms out of which 14,20,500 kms is surfaced The national high ways carry more than 40% of total road traffic India has a coast line of 7,517 kms There are 12 major parts and 187 minor ports In 2001 the costal tonnage was 0.70 million GRT. In 2002 the shifting tonnage was 6.91 million GRT.

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India Ranks 17th in the world shipping India manages 92 Airports including five international Airports To allow more services to designated foreign airlines A limited open sky policy was introduced is the year 2005-06 Domestic and international cargo recorded a growth of 11.9% in 2005 and stands second highest in the world next to china In India there are 1.55 lakhs post offices and out of which around 1.4 lakhs in the rural areas. one post office serves 6615 persons and 21 Sq.km area 140 VSATs have been setup and they handle more than 1 million money orders per month India has a total of 321 telephone exchanges, 338 long distance public call offices and 3324 telegraph offices The telephone penetration rate continues to be low at 11.32 phones per 100 population The internet connections increased to 4.1 million in December 2003 The broad band subscribers are 7.5 lakh in November 2005 There are 1.17 Leprosy cases per every 10,000 population In 2003-04 the proportion of children enrolled in Elementary Schools increased to 84.91% SSA was launched in 2001-02, it aims at having all children in school by 2005 and universal retention by 2010 The total enrolment into higher education and employment is 40.22% National Literacy Mission was Launched in 1998. Drop out rate at the Primary in 2003-04 is only 31.4%

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Topic 11: Budget and fiscal deficits

In 1997 the practice of RBI lending to government through ad hoc Treasury Bills was given up FRBM bill was introduced in 2000 FRBM act was introduced in 2003, Aims at reducing deficit by 0.5%

Topic 12: Balance of Payments

In 1979-80 India had experienced very adverse of BOP due to growing trade deficits The foreign currency Reserves in 1994 is $ 19,386 million The current Account deficit as percentage of GDP has declined from 1.9 percent during pre-crisis period to around 1% during post-crisis period (2001-04) In the year 2001-04 we had surplus in the current Account

Topic 13: External debt

The share of concessional debt in total debt is about 33.3% Indias external debt is more than Rs.5,48,000 crore in 2005-06 As percent of GDP Indias external debt was 17.3% in 2004-05 Debt service payments in 2004-05 is 6.2% India ranks 8th among the top ten debtor countries in the world

Topic 14: Economic Reforms

In 2004-05 the foreign investment in banking sector was liberalized by raising FDI in private sector bank to 74% In 2004-05 the FDI limits in Air transport service was raised by 49% In 2005 FDI ceiling in telecom sector service was raised from 49% to 74% C.R.R. was gradually lowered from its peak at 15% to 4.5% in 2003 but raised to 5% in 2004 S.L.R was reduced from its peak of 38.5% to 25% in recent years Bank rate was reduced from 8% to 6% in 2003 Rate of interest on saving deposits was reduced from 4.5% to 3.5% in recent years

Topic 10: Inflation

During the fifties the average decadal rate of inflation was 1.7% The Maximum rate of inflation at 13.9% was recorded in the year 1966-67 The rate of inflation in 2004-05 is 4.7% Public expenditure in 2004-05 is 36%

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Fresh guidelines for licensing new banks were issued in January, 2000 RBI issued guidelines for merger/amalgamation in respect of private sector banks in 2005 Principles governing the dividend payments were liberalized in 2005 The Tax rate for domestic companies has been reduced from 40% to 30%. The tax rate on foreign companies has also been reduced from 55% to 40% Dematerialization of T.D.S certificates will be effective from 1-4-08 By the year ended 2005-06, the government could auction off very small portion of its investment in public sectors raising Rs.49,214 crores in the process. By disinvestment of equity in public sector government can realize Rs.1,567 crores in 2005-06. The rate of custom duty (on non-agricultural goods) has been brought down to 15% in 2006-07 budget. Indias share in the world trade has raisen to 0.86% in 2003 Our foreign currency reserves rose substantially to about 141 billion dollars in March, 2005 The average growth rate of export has been raised by 10% p.a. during 1992-04 The surplus in current account was ranging between 0.7-1.08% of GDP During 2001-03 The external debt at the time of crisis was raised by less than $3 billion per year during 1996-03 FDI were just 155 million dollars in 1991. They increase to around 3200 million dollars in 2004-05 The number of countries in WTO is 149 At present 100% FDI is allowed in drugs & pharmaceuticals At present there are only 6 industries for which licensing is compulsory At present only 3 industries are reserved for the public sector World bank was established in the year 1945 No. of member countries in world bank is 184 World trade organisation was came into existence from 1st January, 1995. The process of Globalisation was initiated in 1991

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The rupee was devalued twice in July 1991 amounting to a cumulative devaluation of about 19% Foreign exchange regulation act was commenced in the year 1973 Quantitative restriction were removed on 714 items in EXIM policy of 2000-01 Tariff rate was lowered to 15% in 2006-07

Topic 15: Money & Banking

In 1969 14 major Commercial Banks were nationalized and 6 more banks in 1980. At present there are only 19 Nationalized Banks Number of branch offices of commercial banks has increase to 68,500 in 2005 The population per bank office has reduced to 16,000 in 2005 The percentage of rural bank branches improves to about 47% in 2005. The aggregate deposits of commercial banks have increased from Rs.4,665 crores to 17,57,846 crores in 2005 There has been a spectacular rise in the bank lending to more than 11, 69,090 crore in March, 2005. The percentage of lending to small scale industries and agriculture sector is about 40% in 2004. In terms of lending priority sectors constitute about 40% of total bank lending. Rural areas have nearly 50% of bank branches but 75% of the population residing there.

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BPL CIP EAS JRY SGRY MRD DAPR IRDP DIC MEC IIP ONGC NTPC ICOR IRCI IRBI IIBI SIC BIFR NCLT SLIIC IDBI ICICI SIDC SIDBI SIDO NSIC NEFS GDRs IOC SCI MOU NIP IPR IDRA : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : Below Poverty Line Central Issue Price Employment Assurance Scheme Jawhar Rozgar Yojana Sampoorna Gramin Rozgar Yojana Ministry of Rural Development Draft Agricultural Policy Resolution Integrated Rural Development Programme District Industries Centre Minimum Economic Capacities Index of Industrial Production Oil and Natural Gas Corporation National Thermal Power Corporation Incremental Capital Output Ratio Industrial Reconstruction Corporation of India Industrial Reconstruction Bank of India Industrial Investment Bank of India Sick Industrial Companies Board for Industrial and Financial Reconstruction National Company Law Tribunal State Level Inter Institutional Committee Industrial development Bank of India Institutional Credit and Investment Corporation of India Small Industries Development Corporation Small Industries Development Bank of India Small Industries Development Organisation National Small Industries Corporation National Equity Fund Scheme Global Depository Receipts Indian Oil Corporation Shipping Corporation of India Memoranda of Understanding New Industrial Policy Industrial Policy Resolution Industrial Development and Regulation Act

Abbreviations in Macro Economics

NLBS SFPP NPDP CADP IPM HYVP RRBs NABARD ACD RPC ARDC FCI PDS TPDS CACP LDBs FSS AFC CSO MRTP UNS BFC ARCSC CCBs SCBs TME RIDF SAO IADP RWP MFALS FPS WFP : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : National Livestock Breeding Strategy Special Food Grain Production Programme National Pulses Development Programme Common Area Development Programme Integrated Pest Management High Yielding Variety Programme Regional Rural Banks National Bank for Agriculture and Rural Development Agriculture Credit Department Rural Planning and Credit Agricultural Refinance and Development Corporation Food Corporation of India Public Distribution System Targeted Public Distribution System Commission for Agriculture Costs and Prices Land Development Banks Farmers Service Societies Agriculture Finance Corporation Central Statistic Organisation Monopolies Restrictive Trade Practices United Nations Survey Bengal Famine Commission All India Rural Credit Survey Committee Central Co-operative Banks State Co-operative Banks Technical Monitoring and Evaluation Rural Infrastructural Development Fund Seasonal Agricultural Operations Intensive Agro District Programme Rural Works Programme Marginal Farmers and Agricultural Labourers Scheme Fair Price Shops World Food Programme

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BPE SIDF NSIC NEF TDC EDP NHDC PSUs CSIR NRI BPO NSSO NAS MODVAT CENVAT VAT LTC AAY ISM IMR MMR NRY SESUP PMRY PMIUPEP SJSRY SJGSY JGSY CEA TRYSEM CRTTC DWCRA MWS USEP : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : Bureau of Public Enterprises Small Industries Development Fund National Small Industries Corporation National Equity Fund Technology Development Cell Entrepreneurial Development Programme National Handloom Development Corporation Public Sector Undertakings Council of Scientific and Industrial Research Non-Resident of India Business Process out Sourcing National Sample Survey Organisation National Account Statistics Modified Value Added Tax Central Value Added Tax Value Added Tax Leave Travel Concession Antodaya Anna Yojana Integrate Indian System of Medicine Infant Mortality Ratio Maternal Mortality Ratio Nehru Rozgar Yojana Self Employment Scheme for Urban Poor Prime Ministers Rozgar Yojana Prime Ministers Integrated Urban Poverty Eradication Programme Swarna Jayanti Shahri Rozgar Yojana Swarna Jayanti Gram Swarozgar Yojana Jawahar Gram Samridhi Yojana Council of Economic Advisers Training of Rural Youth for Self Employment Composite Rural Training and Technical Centers Development of women and Children in Rural Areas Million Wells Scheme Urban Self Employment Programme UWEP JGSY PMGY PMGSY JPRGY VAMBAY CWS CDS MTA SME NFFWP DPAP DDP IWDP NHPC NPCIL SEBs CERC OPEC POL PLF GRT AMPC VPT PCOs BSNL MTNL TRAI NIXI NPE SSA NPEGEL EGS AIE KGBV : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :

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Urban Wage Employment Programme Jawahar Gram Samridhi Yojana Pradhan Mantri Gramodaya Yojana Pradhan Mantri Gram Sadak Yojana Jai Prakash Rozgar Guarantee Yojana Valmiki Ambadkar Awas Yojana Currently Weekly Status Currently Daily Status Mid Term Appraisal Small and Medium Enterprises National Food For Work Programme Drought Prone Area Programme Desert Development Programme Integrated Waste lands Development Programme National Hydro electric Power Corporation Nuclear Power Corporation of India Limited State Electricity Boards Central Electricity Regulatory Commission Organisation of Petroleum Exporting Countries Petroleum Oil and Lubricants Plant Load Factor Gross Registered Tonnage Automatic Mail Processing Centers Village Public Telephone Public Call Offices Bharat Sanchar Nigam Limited Mahanagar Telephone Nigam Limited Telecom Regulatory Authority of India National Internet Exchange of India National Policy on Education Sarva Shiksha Abhiyan National Programme for Education of Girls at Elementary Level Education Guarantee Scheme Alternative Innovative Education Kasturba Gandhi Balika Vidyalaya

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PSK IIT IIM NLM TLC FRBM EPCG CRR SLR FDI NPAs FRAs EOUs CCS EPZs FIEO FERA FEMA DFEC TRC SEZ GDRs EMRs TRIPs FII IMF IBRD IDA IFC MIGA ICSID MTAs PTAs PRGF SBA : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : Parambhik Shiksha Kosh Indian Institute of Technology Indian Institute of Management National Literacy Mission Total Literacy Campaign Fiscal Responsibility and Budget Management Export Promotion of Capital Goods Cash Reserve Ratio Statutory Liquid Ratio Foreign Direct Investment Non-Performing Asset Forward Rate Agreements Export Oriented Units Cash Compensatory Scheme Export Processing Zones Federation of Indian Export Organisation Foreign Exchange Regulation Act Foreign Exchange Management Act Duty Free Export Credit Tax Reform Committee Special Economic Zone Global Depository Receipts Exclusive Marketing Rights Trade Related Intellectual Property Rights Foreign Institutional Investors International Monetary Fund Industrial Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment Guarantee Agency International Centre for Settlement of Investment Disputes Multilateral Trade Agreements Plurilateral Trade Agreements Poverty Reduction and Growth Facility Stand By Agreement SRF CFF DSB FTWZ EEFC DES DEPB AEZ SIL GST RCTC RCF TDICI TFCI UTI LIC GIC CRISIL IFCI DCP DCC AAP GATT UNCTAD GSTR MCA MFA OGL PLR MFIL TM T&D R&D GER : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :

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Supplemental Reserve Facility Compensatory Financing Facility Dispute Settlement Body Free Trade Ware Housing Zone Export Earners Foreign Currency Duty Exemption Scheme Duty Entitlement Pass Book scheme Agriculture Export Zones Special Import License Goods and Services Tax Risk Capital and Technology Corporation Risk Capital Foundation Technology Development and Information Company of India Tourist Finance Corporation of India Unit Trust of India Life Insurance Corporation General Insurance Corporation Credit Rating Information Services of India Ltd Industrial Finance Corporation of India District Credit Plan District Consultative Committees Annual Action Plans General Agreement on Trade and Tariffs United Nations Conference on Trade And Development General Scheme for Trade Preference Minimum Compulsory Access Multi Fiber Agreement Open General License Prime Lending Rates Modern Food Industries Limited Trade Mark Transmission and Distribution Research and Development Gross Enrolment Ratio

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