Indian Economy for Civil Services, Universities and Other Examinations

About the Author
Preface to the Twelfth Edition
Preface to the First Edition
About the Civil Services Examination
Chapter 1 Introduction
	More than a Dismal Science
	Defining Economics
	Micro and Macro
	What is an Economy?
	Sectors & Types of Economies
	Economic Systems
	Market Economy
	Non-Market Economy
	Mixed Economy
	Distribution Systems
	Washington Consensus
	Beijing Consensus
	Santiago Consensus
	Capitalism as a Tool of Growth Promotion
	National Income
	GDP
	NDP
	GNP
	NNP
	Cost and Price of National Income
	Revised Method
	Comparing GVA & GDP
	Fixed-Base to Chain-Base Method
	Standing Committee on Economic Statistics
	Income Estimates for 2019-20
Chapter 2 Growth, Development and Happiness
	Introduction
	Progress
	Economic Growth
	Economic Development
	Measuring Development
	Human Development Index
	The Debate Continues
	Introspecting Development
	Happiness
	Major Highlights
	India-specific Highlights
	The Meaning of Happiness
	The Background
	Re-imagining the Idea of Happiness
	Insights into Human Behaviour
	Social Norms, Culture and Development
	Values and Economics
	Nudge and Public Policy
Chapter 3 Evolution of the Indian Economy
	The Background
	Prime Moving Force: Agriculture vs. Industry
	Planned and Mixed Economy
	Emphasis on the Public Sector
Chapter 4 Economic Planning
	Introduction
	Definition
	Origin and Expansion of Planning
	Types of Planning
Chapter 5 Planning in India
	Introduction
	Background
	The Visvesvaraya Plan
	The FICCI Proposal
	The Congress Plan
	The Bombay Plan
	The Gandhian Plan
	The People's Plan
	The Sarvodaya Plan
	Some Area-wise Reports
	Major Objectives of Planning
	Planning Commission
	Functions of the Planning Commission
	An Epitaph to the Planning Commission
	National Development Council
	Central Planning
	1. The Five-Year Plans
	2. Twenty-Point Programme
	3. MPLADS
	Multi-Level Planning
	First Strata: Centre-Level Planning
	Second Strata: State-Level Planning
	Third Strata: District-Level Planning
	Fourth Strata: Block-Level Planning
	Fifth Strata: Local Level Planning
	Way to Decentralised Planning
	The Planning Commission & The Finance Commission
	A Critical Evaluation
	1. Lack of 'Perspective' in Planning
	2. Failure in Promoting a Balanced Growth and Development
	3. Highly Centralised Nature of Planning
	4. Lop-sided Employment Strategy
	5. Excessive Emphasis on PSUs
	6. Agriculture Overshadowed by the Industry
	7. Faulty Industrial Location Policy
	8. Wrong Financial Strategy
	9. Politicisation of the Planning Process
	Inclusive Growth
	Short-term policy
	Long-term policy
	Resource Mobilisation
	Investment Models
	Phase-I (1951-69)
	Phase-II (1970-73)
	Phase-III (1974-90)
	Phase-IV (1991 onward)
	Central Sector Schemes and Centrally Sponsored Schemes
	Central Plan Assistance
	CSSs Restructured
	Independent Evaluation Office
	Programme Evaluation Organisation
	Development Monitoring and Evaluation Office
	NITI Aayog
	Transforming India
	Changing Contours of India
	Change Must Come
	Functions of NITI Aayog
	The Guiding Principle
	Structure of the NITI
	Specialised Wings in the NITI Aayog
	Vehicle of Good Governance
	Concluding Remarks
	Major Documents of the NITI
	NITI Performs
Chapter 6 Economic Reforms
	Introduction
	Economic Reforms
	1. Planning Model
	2. Washington Consensus
	3. Mixed Economy
	Economic Reforms in India
	Obligatory Reform
	Reform Measures
	The LPG
	Liberalisation
	Privatisation
	Globalisation
	Generations of Economic Reforms
	First Generation Reforms (1991-2000)
	Second Generation Reforms (2000-01 onwards)
	Third Generation Reforms
	Fourth Generation Reforms
	The Reform Approach
Chapter 7 Inflation and Business Cycle
	SECTION-A
	Introduction
	Definition
	Why Does Inflation occur?
	1. Pre-1970s 7.3
	2. Post-1970s 7.3
	3. Measures to Check Inflation
	Types of Inflation
	1. Low Inflation
	2. Galloping Inflation
	3. Hyperinflation
	Other Variants of Inflation
	1. Bottleneck Inflation
	2. Core Inflation
	Other Important Terms
	Inflationary Gap
	Deflationary Gap
	Inflation Tax
	Inflation Spiral
	Inflation Accounting
	Inflation Premium
	Phillips Curve
	Reflation
	Stagflation
	Inflation Targeting
	Skewflation
	GDP Deflator
	Base Effect
	Effects of Inflation
	Inflation in India
	Wholesale Price Index
	Revised WPI
	Consumer Price Index
	Revision in the CPI
	Trends in Inflation
	Healthy Range of Inflation
	Producer Price Index
	Housing Price Index
	Service Price Index
	SECTION-B
	Introduction
	Depression
	Recovery
	Boom
	Recession
	Growth Recession
	Double-Dip Recession
	Conclusion
Chapter 8 Agriculture and Food Management
	Introduction
	Kharif & Rabi
	Food Philosophy of India
	The First Phase
	The Second Phase
	The Third Phase
	Land Reforms
	Phase-I
	Reasons for Failure of Land Reforms
	Land Reforms & Green Revolution
	Phase-II
	Agriculture Holdings
	Green Revolution
	Components of the Green Revolution
	Impact of the Green Revolution
	Conclusion
	Cropping Patterns
	Prevalent Cropping Systems
	Changes in the Cropping Patterns
	Animal Rearing
	Food Management
	Minimum Support Price
	Market Intervention Scheme
	Procurement Prices
	Issue Price
	Economic Cost of Foodgrains
	Open Market Sale Scheme
	Price Stabilisation Fund
	Buffer Stock
	Decentralised Procurement Scheme
	Storage
	Farm Subsidies
	Food Security
	PDS & Food Subsidy
	Agriculture Marketing
	Model APMC Act
	Model Contract Farming Act
	Agri Commodity Trading
	Upstream & Downstream Requirements
	Supply Chain Management
	FDI in Upstream, Downstream and Supply Chain Management
	Irrigation
	Irrigation Potential & Use
	Irrigation Efficiency
	Water Productivity
	Farm Mechanisation
	Seed Development
	Fertilisers
	Pesticides
	Agri-Credit
	Agriculture Extension Services
	PMFBY
	WTO and the Indian Agriculture: Prospects and Challenges
	The Prospects
	The Challenges
	WTO and Agricultural Subsidies AMS
	The Boxes
	Amber Box
	Blue Box
	Green Box
	S&D Box
	Export Subsidies
	Sanitary and Phytosanitary Measures
	NAMA
	Swiss Formula
	National Food Security Act
	Food Processing
	Importance
	Rules and Regulations
	Economic Importance
	Doubling Farm Income
	Cash Support to Farmers
	Women Farmers
	Climate Smart Agriculture
	Looking Ahead
Chapter 9 Industry and Infrastructure
	Introduction
	Review of Industrial Policies Upto 1986
	Industrial Policy Resolution, 1948
	Industrial Policy Resolution, 1956
	Importance
	Industrial Policy Statement, 1969
	Industrial Policy Statement, 1973
	Industrial Policy Statement, 1977
	Industrial Policy Resolution, 1980
	Industrial Policy Resolution, 1985 & 1986
	New Industrial Policy, 1991
	Disinvestment
	Types of Disinvestment
	Current Disinvestment Policy
	Proceeds of Disinvestment: Debate Concerning the Use
	MSME Sector
	Sectoral Concerns
	Steel Industry
	Aluminium Industry
	Apparel and Footwear Sectors
	FDI Policy Measures
	Ease of Doing Business
	Make in India
	Start-up India
	Indian Infrastructure
	An Introduction
	Official Ideology
	UDAY Scheme
	Railways
	Roads
	Civil Aviation
	Maritime Agenda 2010-20
	Smart Cities
	Private Sector and Urbanisation
	PPP Models
	Concerns of Petroleum Sector
	Renewable Energy
	Logistics Sector
	Housing Policy
	Recent Challenges
	PMAY-U
	National Infrastructure Pipeline
Chapter 10 Services Sector
	Introduction
	Overall Performance
	Trade In Services
	Sectoral Situation
	Offshore Fund Management
	Manufacturing vs. Services
	Global Negotiations
	WTO Negotiations
	Bilateral Agreements
	Restrictions and Regulations
	Trade and Transport Services
	Construction Development
	Accountancy Services
	Legal Services
	Education Services
	The Need for Reforms
	General Issues
	Outlining Future
Chapter 11 Indian Financial Market
	Introduction
	Indian Money Market
	1. Unorganised Money Market
	2. Organised Money Market
	Mutual Funds
	DFHI
	Indian Capital Market
	Project Financing
	1. Financial Institutions
	2. Banking Industry
	3. Insurance Industry
	4. Security Market
	Financial Regulation
	Regulatory Agencies
	Quasi-regulatory Agencies
	Central Ministries
	State Governments
	Special Statutes for Certain Financial Intermediaries
	Establishment of FSDC
Chapter 12 Banking in India
	Introduction
	NBFCs
	Reserve Bank of India
	RBI's Reserves & Surplus Capital
	Monetary Policy
	Cash Reserve Ratio
	Statutory Liquidity Ratio
	Bank Rate
	Repo Rate
	Long Term Repo
	Reverse Repo Rate
	Marginal Standing Facility (MSF)
	Other Tools
	Base Rate
	MCLR
	Monetary Transmission
	Liquidity Management Framework
	Nationalisation and Development of Banking in India
	Emergence of the SBI
	Emergence of Nationalised Banks
	Regional Rural Banks (RRBs)
	Co-operative Banks
	Problems of these Banks
	Financial Sector Reforms
	Recommendation of CFS
	Banking Sector Reforms
	DRI
	Priority Sector Lending
	NPAs and Stressed ASSETS
	Recent Upsurge
	Resolution of the NPAs
	Public Sector Asset Rehabilitation Agency (Para)
	Insolvency and Bankruptcy
	SARFAESI Act, 2002
	Wilful Defaulter
	Capital Adequacy Ratio
	Why to Maintain CAR?
	Basel Accords
	Basel III Provisions
	Basel III Compliance of the PSBs & RRBs
	Stock of Money
	Liquidity of Money
	Narrow Money
	Broad Money
	Money Supply
	High Power Money
	Minimum Reserve
	Reserve Money
	Money Multiplier
	Credit Counselling
	Credit Rating
	Non-Resident Indian Deposits
	Nidhi
	Chit Fund
	Small & Payment Banks
	Small Banks
	Payments Banks
	Financial Inclusion
	Pradhan Mantri Jan-Dhan Yojana
	Gold Investment Schemes
	Sovereign Gold Bonds
	Gold Monetisation Scheme
	Mudra Bank
Chapter 13 Insurance in India
	Definition
	Insurance Industry
	LIC
	GIC
	AICIL
	Public Sector Insurance Companies
	Insurance Reforms
	IRDA
	Reinsurance
	Deposit Insurance and Credit Guarantee Corporation (DICGC)
	Export Credit Guarantee Corporation (ECGC)
	National Export Insurance Account (NEIA)
	The Challenge Ahead
	Insurance Penetration & Density
	Policy Initiatives
	New Reform Initiatives
	Third Party Insurance
	New Insurance Schemes
	Road Ahead
Chapter 14 Security Market in India
	Definition
	Primary and Secondary Markets
	Stock Exchange
	NSE
	OTCEI
	ISE
	BSE
	Indo Next
	SME Exchanges: BSESME and Emerge
	Players in the Stock Exchanges
	SEBI
	Commodity Trading
	Spot Exchanges
	Spot Exchanges in India
	Advantages of Spot Exchanges
	Raising Capital in the Primary Market
	Important Terms of Stock Market
	Short Selling
	Bear and Bull
	Book Building
	IPO
	Price Band
	Scrip Share
	Sweat Share
	Rolling Settlement
	Badla
	Undha Badla
	Futures
	Depositories
	Spread
	Kerb Dealings
	NSCC
	Demutualisation
	Authorised Capital
	Paid-up Capital
	Subscribed Capital
	Issued Capital
	Greenshoe Option
	Penny Stocks
	ESOP
	SBT
	OFCDs
	Derivatives
	Indian Depository Receipts (IDRs)
	Shares 'at Par' and 'at Premium'
	Foreign Financial Investment
	Angel Investor
	QFIs Scheme
	RFPIs
	Participatory Notes (PNs)
	Reasons for the popularity of PNs
	Regulation of PNs
	The Concerns related to PNs
	International Situation
	Hedge Fund
	ECB Policy
	Credit Default Swap (CDS)
	Securitisation
	Corporate Bond in India
	Inflation-Indexed Bonds
	Gold Exchange Traded Funds
	e-Gold
	CPSE ETF
	Pension Sector Reforms
	Financial Stability Development Council (FSDC)
	Financial Sector Assessment Programme (FSAP)
	Financial Action Task Force (FATF)
	Real Estate & Infrastructure Investment Trusts
	REITs
	InvITs
Chapter 15 External Sector in India
	Definition
	Forex Reserves
	External Debt
	Fixed Currency Regime
	Floating Currency Regime
	Managed Exchange Rates
	Foreign Exchange Market
	Exchange Rate in India
	Trade Balance
	Trade Policy
	Depreciation
	Devaluation
	Revaluation
	Appreciation
	Current Account
	Capital Account
	Balance of Payment (BoP)
	Convertibility
	Convertibility in India
	Current Account
	Capital Account
	LERMS
	NEER
	REER
	EFF
	IMF Conditions on India
	Hard Currency
	Soft Currency
	Hot Currency
	Heated Currency
	Cheap currency
	Dear Currency
	Special Economic Zone
	GAAR
	Foreign Investment
	ECB Liberalised
	Risks in Foreign Currency Borrowings
	Trade Promotion
	Export Promotion Schemes
	Trade Scenario
	Current Trade Opportunity
	Exchange Rate Monitoring
	BIPA & BIT
	RTAs by India
	New Foreign Trade Policy
	Trans-Pacific Partnership
	Transatlantic Trade and Investment Partnership
	Deglobalisation and India
	Outlook for Future
Chapter 16 International Economic Organisations & India
	International Monetary System
	Adjustment
	Liquidity
	Confidence
	Bretton Woods Development
	International Monetary Fund
	India's Quota & Ranking
	Current US/EU Financial Crises: Challenges Regarding International Payments
	World Bank
	IBRD
	IDA
	IFC
	MIGA
	ICSID
	Asian Development Bank
	OECD
	World Trade Organization (WTO)
	Nairobi Negotiations & India
	Buenos Aires Conference and India
	India and WTO
	Trade Facilitation By India
	BRICS Bank
	Asian Infrastructure Investment Bank
	Reforming IMF & WB
Chapter 17 Tax Structure in India
	Tax
	Incidence of Tax
	Impact of Tax
	Direct Tax
	Indirect Tax
	Methods of Taxation
	Progressive Taxation
	Regressive Taxation
	Proportional Taxation
	A Good Tax System
	Fairness
	Efficiency
	Administrative Simplicity
	Flexibility
	Transparency
	Methods of Expenditure
	Value Added Tax
	Need of VAT in India
	Goods and Services Tax
	Implementation Process
	Commodities Transaction Tax
	Securities Transaction Tax
	Capital Gains Tax
	Minimum Alternate Tax
	Corporate Tax Reform
	Dividend Distribution Tax
	Tax Expenditure
	Collection Rate
	Legitimacy and Taxation
	Income and Consumption Anomaly
	Ease of Paying Taxes
	Simplification of Direct Tax System
	Outlook for Future
Chapter 18 Public Finance in India
	Introduction
	Budget
	Data in the Budget
	Developmental and Non-developmental Expenditure
	Plan and Non-Plan Expenditure
	Revenue
	Non-revenue
	Receipts
	Revenue Receipts
	Tax Revenue Receipts
	Non-tax Revenue Receipts
	Revenue Expenditure
	Revenue Deficit
	Effective Revenue Deficit
	Revenue Budget
	Capital Budget
	Capital Receipts
	Capital Expenditure
	Capital Deficit
	Fiscal Deficit
	Primary Deficit
	Primary Surplus
	Monetised Deficit
	Deficit and Surplus Budget
	Deficit Financing
	Need of Deficit Financing
	Means of Deficit Financing
	Composition of Fiscal Deficit
	Fiscal Policy
	Deficit Financing in India
	The First Phase (1947-1970)
	The Second Phase (1970-1991)
	The Third Phase (1991 onwards)
	Indian Fiscal Situation: A Summary
	FRBM Act, 2003
	Limiting Government Expenditure
	Fiscal Consolidation in India
	Zero-Base Budgeting
	Output-Outcome Framework
	Types of Budgets
	Golden Rule
	Balanced Budget
	Gender Budgeting
	Cut Motion
	Trilemmas
	Direct Benefit Transfer
	Change in Fiscal Year
	Public Debt
	Independent Debt Management
	Central Government Debt
	Central Transfer to States
	State Finances
	General Government Finances
	Outlook for 2020-21
Chapter 19 Sustainability and Climate Change: India and the World
	Introduction
	Global Emissions
	Sustainable Development Goals (SDGs)
	India and the SDGs
	Paris Agreement (COP 21)
	COP24
	COP25
	Green Finance
	Climate Finance
	Green Climate Fund
	Global Environment Facility
	INDCs
	India and Climate Change
	Climate Change Action Program
	Aligning Financial System with Sustainability
	International Initiative of India
	International Solar Alliance
	Coalition for Disaster Resilient Infrastructure
	India and the UNCCD
	India's Forests
	Agricultural Residue Burning
	Waste Management
	Future Outlook
	Renewable Energy
	Development with Wisdom
Chapter 20 Human Development in India
	Introduction
	Human Development
	Gender Issues
	Privacy of Women
	The Fallouts of Population Policy
	Poverty Estimates
	Promoting Inclusive Growth
	Accessible India Campaign
	Strengthening the PRIs
	Demographics
	Socio-Economic and Caste Census
	Education for All
	Skill Development
	Employment Scenario
	Gender Dimension of Employment
	Labour Reforms
	Health Scenario
	Burden of Diseases
	Health for All
	Drinking Water & Sanitation
	Housing for All
	Social Sector Expenditure
	Policy Suggestions
Chapter 21 Burning Socio-Economic Issues
	1. Economic Impact of the Covid-19
	Introduction
	Assessing the Gravity
	Conclusion
	2. Exploring a New Economic Model
	Introduction
	Alternative Economic Model
	Steady-state Economy
	Circular Economy
	Case of India
	Conclusion
	3. From Green Revolution to Green Methods
	Introduction
	The Issues and Remedies
	Conclusion
	4. Bad Bank
	Introduction
	The Concept
	Conclusion
	5. Demographic Dividend
	Introduction
	India's Demographics
	Conclusion
	6. Twin Balance Sheet Crises
	Introduction
	The Problem
	The Solution
	Functioning of PARA
	7. Universal Healthcare
	Introduction
	The Challenges
	Going for the Idea
	8. Aftereffects of Demonetisation
	Introduction
	Tapping the Prospects
	Conclusion
	9. Addressing Inequality
	Introduction
	Inequality Concerns
	Inequality Needs to be Checked
	Searching for the Remedies
	Conclusion
	10. Universal Basic Income
	Introduction
	An Effective Idea
	Working Out the Scheme
	The Benefits
	Conclusion
	11. Legitimacy in State and Socio-Economic Transformation
	Introduction
	Global Experience
	Suggestions for Today
	Conclusion
	12. Farm Indebtedness and Agripolicy
	Introduction
	Farm Indebtedness
	Farm Income
	Institutional and Non-Institutional Loans
	Possible Remedies
	Conclusion
	13. Deglobalisation—The After Effects
	Introduction
	Changing Global Contours
	Impact of Regional Trade Agreements
	The Future of Multilateralism
	India's Case
	Conclusion
	14. Data as Public Good
	Introduction
	The Issue
	The Scenario
	Conclusion
	15. The Legal Logjam
	Introduction
	Issues and Remedies
	Conclusion
	16. Amalgamation of the Public Sector Banks
	Introduction
	Merger of the Banks
	Benefits of Merger
	The Challenges
	Conclusion
Selected MCQs (Economic and Social Development)
Selected Model Answers
Economic Survey 2019-20
	Volume 1
	1. Wealth Creation: The Invisible Hand Supported by the Hand of Trust
	2. Entrepreneurship and Wealth Creation at the Grassroots
	3. Pro-business versus Pro-markets
	4. Undermining Markets: When Government Intervention Hurts More Than it Helps
	I. Essential Commodities Act (ECA), 1955
	II. Drug Price Control under ECA
	III. Government Intervention in Grain Markets
	IV. Debt Waivers
	5. Creating Jobs and Growth by Specializing in Network Products
	6. Targeting Ease of Doing Business in India
	7. Golden Jubilee of Bank Nationalisation: Taking Stock
	Solutions to Make PSBs More Efficient
	8. Financial Fragility in the NBFC Sector
	9. Privatization and Wealth Creation
	10. Is India's GDP Growth Overstated? No!
	11. Thalinomics: The Economics of a Plate of Food in India
	Volume 2
	1. India's Economic Performance in 2019-20
	2. Fiscal Developments
	3. External Sector
	Balance of Payments (BoP)
	Global Trade
	Exports
	Imports
	Logistics Industry of India
	External Debt
	4. Monetary Management and Financial Intermediation
	Monetary Policy
	Credit Growth
	5. Prices and Inflation
	6. Sustainable Development and Climate Change
	SDG India Index
	COP-25 of UNFCCC at Madrid
	Forest and Tree Cover
	International Solar Alliance (ISA)
	7. Agriculture and Food Management
	8. Industry and Infrastructure
	9. Services Sector
	10. Social Infrastructure, Employment and Human Development
	11. The Covid-19 Impact
Union Budget 2020-21
	Major Highlights
	Wellness, Water and Sanitation
	Education and Skills
	Economic Development
	New Economy
	Caring Society
	Culture & Tourism
	Environment & Climate Change
	Governance
	Financial Sector
	Financial Market
	Infrastructure Financing
	Direct Tax
	Indirect Tax
	Unprecedented Milestones and Achievements of Indian Economy
	The Covid-19 Impact
Glossary