11. economic trends
TRANSCRIPT
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1976
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Sweden
Belgium
Sw itzerland
Taiw anRussia
Australia
NetherlandsBrazil
South Korea
IndiaMexico
Spain
CanadaItaly
China
FranceUnited Kingdom
Germany
JapanUnited States
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Central Bank RBI Commercial Banks based on profits
Co operative Banks based on co operativeprinciples
Scheduled Banks included under the second schedule ofRBI Act, 1934; paid capital and reserves of greater than Rs.5 Lakhs
Money Markets - Lending and borrowing of short
term funds Unorganized traditional bankers, NBFCs Organized RBI, SBI etc
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Call Money Market Call market or overnight market
Short Notice Market
Call Money Rate rate at which funds are borrowedand lent in call money market
market determined i.e based on demand and supply
Bill Market Discount Market; short term bills
usually upto 90 days are bought and sold Commercial Bill Market
Treasury Bill Market
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Institutions and mechanism that affects thegeneration of savings by community anddistribution of the same
Structure: Industrial Finance
Agricultural Finance
Development Finance
Government Finance
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GDP Gross Domestic Product - The total marketvalue of all final goods and services produced ina country in a given year.
GDP = Consumer Investment + Govt. Spending
+ (Export Imports) NI National Income - The income earned by a
country's people, including labor and capitalinvestment.
sum of wages, profits, rents, interest, andpension payments to residents of the nation.
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Per Capita Income -Income per person in apopulation.
Per capita income is often used to measure acountry's standard of living.
This is what each citizen is to receive if theyearly national income is divided equally amongeveryone.
Monetary Policy - Monetary policy is the processby which the monetary authority of a countrycontrols the supply of money, often targeting arate of interest
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Fiscal Policy - Fiscal policy is the use ofgovernment expenditure and revenue collectionto influence the economy. government expenditure
taxation.
Changes in the level and composition of taxation andgovernment spending can impact various variables in the
economy. Repo Rate - Repo rate is the rate at which our
banks borrow rupees from RBI. A reduction in therepo rate will help banks to get money at a cheaperrate. When the repo rate increases borrowing fromRBI becomes more expensive.
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Reverse Repo Rate - Reverse Repo rate is therate at which Reserve Bank of India (RBI)borrows money from banks. An increase in Reverse repo rate can cause the
banks to transfer more funds to RBI due to thisattractive interest rates. It can cause the money tobe drawn out of the banking system.
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Inflation Rate (December, 2010) 13.73% Exchange Rate (August 25, 2010) 46.95 Food Inflation(August 7) 10.35% GDP 9.4% Per Capita Income Rs. 44,345
Repo Rate (July 27, 2010) 5.75% Reverse Repo (July 27, 2010) 4.5% Bank Rate Effects of Trade Policy Five Year Plans and their impact
Political situation showing greater signs of stability FDI inflows gaining momentum Infrastructure Growth Privatization of PSUs new IPOs NHPC
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2185
3297
3816
3919
5367
5596
6092
30209
35067
43926
Italy
France
Germany
UK
Russia
Brazil
Japan
India
US
China
Goldman Sachs: Constant 1995US$ billion
Note the big gap between the first three and therest
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Capital Market sensex Primary Market IPO
Secondary Market - FII
FII
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Price Situation Inflation
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Sectoral growth rates sinceIndependence
(Percent)
50s 60s 70s 80s 90s
1 Agriculture and Allied 3.1 2.5 1.8 3.6 2.8
2 Industry* 6.3 5.5 4.1 7.1 5.7
3 Services 4.3 4.8 4.4 6.7 7.8
4 GDP (factor cost) 3.9 3.7 3.2 5.6 5.8* Includes Construction
Source: Central Statistical Organisation
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Elasticity of Employment to GDP
1977-78 1983 1993-94
to to to
1983 1993-94 1999-00
1 Agriculture 0.45 0.50 0.00
2 Mining & Quarrying 0.80 0.69 0.00
3 Manufacturing 0.67 0.33 0.26
4 Electricity 0.73 0.52 0.00
5 Construction 1.00 1.00 1.00
6
Wholesale & Retail
Trade 0.78 0.63 0.55
7Transport Storage &Construction 1.00 0.49 0.69
8
Finance, Real Estate,
Insurance & Business
Services 1.00 0.92 0.73
9
Community, Social and
Personal Services 0.83 0.50 0.07
All Sectors 0.53 0.41 0.15Source: Planning Commission Reports on Labour and Employment
Sector
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Central Statistical Organization
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282
309
351
383
465
474
494
514
577
582
603
659
715
738
0 100 200 300 400 500 600 700 800
Bihar
Orissa
Uttar Pradesh
Madhya PradeshRajasthan
Andhra Pradesh
West Bengal
All India
Karnataka
Kerala
Tamil Nadu
Gujarat
Haryana
Maharashtra
Punjab
State GDP p.c. USD, 1999-00
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Water stress
Water scarce
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