INDIAN ECONOMY OUTLINE OF INDIAN ECONOMY ‘The economy of India is the 5th langest in the Purchasing Power Parity (PPP) » Nature of the Indian Economy (®_Mixed Economy Existence of both public ‘and private sectors. This term was coined by Pat Mullins and Supported by JM Keynes. (ii) Agrarian Economy Even alter Oe ecatas of indepen jependence 58% of the workforce of India is still agriculturist and its contribution to GDP is around T7% at current pric Features Following are the features of Indian economy (® Slow growth of national_and_per_capita Incotie-(0) Caplal deiclency and low rate ot capital formation, hence low rate of investment, Tow production, eic; poor quality of human capital. Wii) Over- dependence on agriculture alongwith Tow productivity in agriculture; heavy population pressure. (iv) Unequal distribution of income and Wealth @) Mass_poverty, chronic ini chronic unemployment Broad Sectors of Indian Economy Primary Sector Agriculture, forestry and Fishing, mining etc. Secondary Sector manufacturing, electricity, gas and water supply and cor cuction, Tertiary Sector (also_called service scctor) business, transport, telecomm-_unication, cather sectors of the economy. Economic Planning in India Planning Commission (1950) was set-up under the Chairmanship of Pandit_Jawaharlal Nehru (Gulzarilal ‘Nanda was the first Deputy Chairman) Basic aim of Economic Planning is to bring rapid economic growth through agian, tees samt and al NITI Aayog NITI Aayog or National Institution for Transforming India Aayog came into existence on Ist January, 2015; licy-making ~~ think-tank of ovement that replaces Planning Commission and aims to involve states in_economic policy making Tt will rovide strategic and technical advice to the Central and tie State Governments, ‘The Prime Minister heads the Aayos as its chairperson, Rajiv Kumar_is the ‘Vice-Chairperson of NITI Aayog of India Historical Milestones Planned Economy for Inia (1234) M Visvesvaraya National Planning Committee (122) Jawatariat Nena Bombay Plan (1944) Gandhian Plan (1944) SN Agarwal People's Plan (1845) MN Roy oda (1960) JP Narayan banking, insurance, real estate, community “and personnel services.@ GENERAL KNOWLEDGE ~ Indian Economy Five Year Plans At a Glance Plan Growth Rate Important Sector Target Achieved First Plan (1951-56 2.1% 8.6% _Aaficulture,irigation, electricity (Based on Harrod Domar Model) a ‘Second Plan (1956-61) (Basedon 4.5% 4.2% Heavy industies ibis Two Sector model) — Third Plan (1961-66) 5.6% 2.8% _ Foodarains, heaw industries Plan Holiday (1966-69) Fourth Plan (1969-74) 3% 4.8% Agtiouure Fifth Plan (1974-78) 4.4% 4.8% Removal of poverty Rolling Plan (1978-80) ‘Sixth Plan (1980-85) 52% 5.4% Agriculture, Industries ‘Seventh Plan (1985-90) 5.0% 6.0% Energy, foodarains Two Annual Plans (1980-92) Eighth Plan (1992-97) 5.6% 6.6% Human resource education Ninth Plan (1997-2002) 6.5% 5.4% Social justice ‘Tenth Pian (2002-07) 8.1% 7.5% ‘Income, energy Eleventh Plan (2007-2012) 8.0% 7.9% _Inolusive growth ‘Twelfth Plan (2012-2017) — _Faster, sustainable and more oe UF os National Income in India {economy in one year. Following are the measures of National Income in India + Gross Domestic Product within the geographical boundaries of a country during a year. + Net Domestic Product (NDP) equals to the GDP minus depreciation (value loss of an asset) on country capital goods. + Gross National Product (GNP) is an estimate of the total value of all the final products and services produced in a given period (usually a year) by the nationals of a country. + The Net National Product (NNP) is obtained by subtracting depreciation value from GNP. + When NNP is obtained at factor cost it is called National Income, It is calculated by deducting indirect taxes and adding subsidies in NNP at market price. Indian Tax Structure Direct Tax The term direct tax generally means a tax paid directly to the government by the persons on whom itis imposed. e.g. income tax, Corporate income tax, capital gain tax, stamp duty, land tax, estate duty, wealth tax, petroleum revenue tax. The government earns maximum from corporate income tax. Indirect Tax An indirect tax is a tax collected by an intermediary from the person who bears the ultimate economic burden of the tax. e.g, sales tax or VAT, customs duty, insurance premium tax, excise duties, landfill tax, electricity duty, climate change levy. Goods and Service Tax (GST) ‘The GST as it is more commonly referred to is a system of taxation where there is a single {ax in the economy for goods as well as services. Indian GST was first proposed in India in the Union Budget speech in 2006-07. This tx come into effet from TTuls, 2077. ‘The main feature of the GSTis that there isa tax credit available at each stage of the value chain:GENERAL KNOWLEDGE ~ Inclusive Development “Human Development Index (HDI) + HDI measure was_given Nobel Prize Winner, Mehbub-ul-Haq + Level of Human developmentis measured by Human Development Index (HDD, wublished by UNDP since, 1990, + Three dimensions 1. Life expectancy at birth; 2, Education Index comprising means year of schooling and expected year of schooling; 3. GNI per capita (PPP US $) Index. + India has been ranked 131 out 189 countries on 2020's HDI. Programmes/Measures + NRHM (National Rural Health Mission) was Iaunched on 2nd April, 2005 to reduce Infant Mortality Rate and Maternal Mortality Rate. + NUHM (National Urban Health Mission) launched on 2013. Education programmes like Sarva Shiksha Abhiyan, Mid-Day Meal Scheme etc were launched. + Rural development programmes like MGNREGA and Bharat Nirman. POVERTY + The erstwhile Planning Commission estimated poverty rate based on data collected by National Sample Survey Organisation (NSSO) + Main Reasons for Rural Poverty Rapid population growth, lack of capital, lack of alternate employment other than poor agriculture, illiteracy and lack of proper implementation of PDS. + Main Reasons for Urban Poverty Migration from rural areas, lack of skilled labour, lack of housing facilities, limited job opportunities in cities. + Based on 2400 calories (rural) and 2100 calories (urban) and monthly per capita consumption expenditure of € 454 (rural) and 7540 (urban), Planning Commission, (Now NITI Aayog) estimated poverty ratio in India in 2004-05 was 27.5% and according to the Suresh Tendulkar Committee was 37.2%. Indian Economy @ + The Tendulkar Committee stipulated a benchmark of daily per capita expenditure of €27 and & 33 in rural and urban areas, respectively, Socio-Economic Programmes Programme/Measure Year ot Launch Twenty Point Programme 1975 Indira Awaas Yojana 1985. Jawahar Rozgar Yojana 1289 Nehru Rozgar Yojana 1989 Swamna Jayanti Shahn Rozgar Yojana _1997 Praghan MentriGramiodaya Yojana 2000 Praghan Mantri Gram Sadak Yojana 2000 Sampoorna Grameen Rozgar Yoana 2001 Bharat Nirman 2005, ‘Jawaharlal Nehru National Urban 2005 Renewal Mission Prime Minister Employment 2008 ‘Generation Programme Mahatma Gandhi National Rural 2009, Employment Programme National Rural Livelihood Mission 201 (NRLM) Nirmal Sharat Abhiyan 2012 ‘Swachh Bharat Abhiyan 2014 Pradhan Maniri Jan Ohan Yojana 2015 Atal Pension Yojana 2015, Digital India Programme 2015 National Sk Development Mission 2016 HRIDAY (Heritage Cy Development 2015 And Augmentation Yojana) ‘Smart Cty Mission 2015 ‘AMRUT (Atal Mission for Rejvenalion 2016 Sind Uroan Transformaton) Erasharmanti Jeevan yolBeeme 2015 Pradhanmant Suraksha Bema 2075 Yojana Pradhan Mant Krishi Snchayes 2075 Yojana Start-up and Stanchup Yojana 2016 Uiala Yojana 2016 SWAYAM (Study Webs of Active- 2016 Learning Yor Young Aspiring Minds Pradhan Mant Garb Kalyan Yojana 2076 Pradhan Mant Mativa Vandana 2017 Yojana Pradhan Mani Sah) Bh Har Ghar 2037 Yojana Rashiriya Vayoshri Yojana 2017® GENERAL KNOWLEDGE ~ Indian Economy Programme/Measure Year of — Programme/Measure Year Launch Bal Bandu Scheme 2011 Saubhagya Yojana 2017 Nai Roshni 2012 UDAN Scheme 2017 Boil Bachao, Bati Padhao 2015 ‘Ayushman Bharat 2018 Syujaavona BT Pradnan Manin Kisan Samman Nidhi 2019 pyr ys Vandana Yona BOT Van in Pradhan Manin Shram Yogi 2019S ; Ciganan Mant Suposnit Maa Abhyan 2020 SVAMITVA Schome 2020 ‘One Nation One Card Scheme aca. AGRICULTURE Ghat Tak Fibre Scheme 2020. Agriculture is the mainstay of Indian PM SVANidhi 2020 economy. It makes important ‘Atmanirbhar Bharat Scheme 2020 contribution in GDP. National Income, Kisan Suryodya Yoyana 2020 employment, trade and industry. Pradhan Mantii Maisya Sammpada Yojana 2020 PM-WANI Scheme 2020 UNEMPLOYMENT It refers to a situation, when a person is able and willing to work at the prevailing ‘wage rate, but does not get the opportunity to work, Estimation of Unemployment Since 1973 on the recommendation of B Bhagwati Committee, three estimates of unemployment have been brought about by Planning Commission, viz 1. Usual Prineipal Status Persons who remained unemployed for a major part of the year. 2, Current Weekly Status Persons who did not find even an hour of work in a ‘week preciding the date of survey. 3. Current Daily Status Persons who did not find work even for 1 hour in a day. Women Empowerment and Child Development Programme/Measure Year Mid-Day Meal Scheme +1995 ‘Swachar 11995 ‘Swayam Sigha 2001 SA 2001 ‘Suppor 10 Training and Employ- 2003-04 iment Programme for Women (STEP) Ujwala 2007 Dhanlaxrri 2008 Integrated Child Protection Scheme 2009-10, Sabla Scheme 2010 National Mission for Empowerment 2010 cof Women + Green Revolution is associated with the use of HYVS (High Yielding Variety Seeds), chemical, fertilisers and new technology, which led to a revolutionary results in agricultural production. + Dr. MS Swaminathan has been called the ‘Father of Green Revolution’ in India. Major Agricultural Revolutions Revolution Production Blue Fish Production Golden Fibre Jute Pink OF Red Meat White Milk Yell Oilseed Tricolour Revolutions Tricolour revolution has 3 components + Saffron revolution-Solar energy + White revolution-Cattle welfare + Blue revolution-fisherman’s welfare INDUSTRIES Industrial Policies + Industrial policies were launched in 1948, 1956, 197, 1980 and 1991 + Industrial Policy 1956 is called Economie Constitution of India and gave public sector the strategic edge + Industrial Policy 1991 opened up the economy. lls main aims were (a) to end license-permit raj; () to integrate Indian economy with the outer world; (©) to remove restrictions on FDI and (@) to reform public sectors.GENERAL KNOWLEDGE ~ Indian Economy Public Sector Enterprises (PSEs) + Industries requiring compuleory Heensing (a) distillation and brewing of aleoholie drinks: (b) egar and cigarettes of tobacco; (c) electronic aerospace and defence equipment: (2) industrial explosives (6) specific hazardous chemicals + Areas reserved for public sector are (a) atomic ener; -production, separation and enrichment of fissionable materials and (6) railways, + Present Policy on PSEs is to (@) not to privatise profitmaking companies and to modernise and revive sick companies: (0) hot to bring government stake in. PSEs below 51%; (c) to adopt initial public offering route to dlsinvestment Maharatnas, Navratnas, and Miniratnas + To impart greater managerial and commercial autonomy to the PSEs, the concept of Maharatna, Navratna and Miniraina was started. + Maharatnas were started in 2009, Ten Maharatnas are ONGC, SAIL, IOC, NTPC, Coal India Ltd, BHEL, GAIL (india) Lid, and BPCL, HPCI and Power Grid Corporation, + Navratnas Bharat Electronics Lid, HAL, MINL, NALCO, National — Mineral Development Corporation, Nevyeli Lignite Company Lid, Oil India Ltd, Power Finance Company Ltd, Rashtriya Ispat Nigam Lid, Rural’ Electrification Corporation Ltd, Shipping Corporation of India Ltd, CCIL, EIL and NBCCL + Miniratnas Public Sector Enterprises (PSEs) that have made profit continuously ‘or the last three years and have positive net worth. + Atpresent there are 61 in category land 12 in Category IL ° Industrial Committes Hazari Committee on Industrial Policy Subimal Dutt Committee on Industrial licensing Abid Hussain Committee on Small Scalo Industry Rangarajan Committee on disinvestment Memorandum of Understandings (MoU) Axjun Sengupta Small Scale Industry + Anew thrust to Small Seale Industry, given in Industrial Policy of 1977. + MSMED Act, was enacted in 2006. + Contributes 8% to GDP 45% to all manufactures and 42% to exports. + According to the 4th census (2009) of SSIs, 67% of the MSME are in manufacturing and 33% are in services sector. Classification of MSMEs Category Annual turnover Micro Not exceeding € 5 cror Smal Between &5 crores to Medium crores, Major Industries in India Tron and Steel + First Stecl Industry at Kulti, West Bengal—Bengal Iron Works Company was established in 1874 + First large scale steel plant—TISCO at Jamshedpur (1907) was followed by IISCO at Burnpur (1919), West Bengal the first public owned steel plant was Rourkela integrated steel plant. Presently, India is the rd largest producer of steel and comes 1st in the production of sponge iron,@ GENERAL KNOWLEDGE ~ Indian Economy Location (Plants) Assistance ‘Abid ussain Commitee Development of os ee Capital Markets Rourkela (Osisha)_Gemany_Damedaran Committee Customer Servi in Bhai (Chhatisoar) Russia Sane Durgapur (West Benga) Briain ‘handelwal Committee Human Resource in Bokaro (Unarkhand) Russia : Commercial Banks “Ieothanatnan Tees Pail Commitee Conporate Debt (Anata Pradesh) WK Sharma Commitee Credit to Marginal Famers Jute Industry Sarangi Committee. Non-Performing + India ranks no 1 in jute production and no Assets 2in raw jute exports after Bangladesh, Khana Commitee Regional Rural + More than two third jute industry is Goa concentrated in West Bengal Cotton and Textile Industry + Largest organised and broad-based industry accounting for 4% of GDP, 20% of manufacture value added and one third of total exports earning, Cement Industry + First cement producing unit was set-up at Chennai in 1904 but modern manufacturing unit of cement started at Porbandar (Gujarat) in 1914, + India is the second largest producer of cement in the world. Sugar Industry + India is the second largest producer of sugar in the world with a 22% share. It is the second largest agro-based industry in the country, Committees on Various Sectors of Indian Economy AC Shah Commitiee Non-Banking Financial Company Bimal Jalan Committee Market Infrastructure Insiruments Malegam Committees Functioning of Micro Finance Institutions Birla Committee Corporate Governance: Kirt Parikh Committee Rationalisation of Potrateum Prouct, Prices Chaturveai Committee Improving National Highways in India ‘SR Hashim Committee Urban Poverty ‘Abhijit Sen Wholesale Price Index Gadgil Committee BANKING AND FINANCE + Bank of Hindustan was the first bank, established in India in 1770. + First bank with limited liability managed by an Indian Board was the Oudh Commercial Bank in 1881 + First purely Indian bank was Punjab National Bank (1894) Nationalisation of Bank + A step towards social banking was taken with the nationalisation of 14 commercial banks on 19th July, 1969. Six more banks were nationalised on 1980, total number of public sector banks are 27. + Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank, * Bhartiya Mahila Bank, India’s first bank "exclusively for women, headquarters in New Delhi was Inaugurated on 19th November, 2013. Ithas been merged with SBI in 2017. + IDBI Bank is an Indian financial service company, formerly known as Industries Development Bank of India, head quartered in Mumbai, India. + In September, 2004, the RBI incorpo- rated IDBI as a scheduled bank under the RBI Act, 1934. Financial InclusionGENERAL KNOWLEDGE ~ Indian Economy + In 2019, Oriental Bank of Commerce and United Bank got merged with Punjab National Bank, Syndicate Bank is merged with Canara Bank while Union Bank of India, Andhra Bank and Corporation Bank got merged. Similarly Indian Bank got merged with Allahabad Bank, Reserve Bank of India (RBI) RBI was established in 1935, under RBI Act, 1934. RBI is the Central Bank of India, The main purpose of creating RBI ‘was to regulate money supply and credit in the country. RBI was nationalised in 1949 and its first Indian Governor was CD Deshmukh, Iis headquarter isin Mumbai Functions of the RBI + Monetary policy, regulation supervision of the banking non-banking financial institutions. + Debt and cash management for Centre and State Governments + Foreign exchange management, current and capital account management + Management of foreign exchange + Currency management; oversight of the payment and settlement systems. + Development role. + Research and statistics The RBI and Credit Control Quantitative Credit Control It is used to control the volume of credit and indirectly to control the inflationary and deflationary pressures. The ‘quantitative credit control consists of + Bank Rate It is the rate, at which the RBI gives finance to’ Commercial Banks + Cash Reserve Ratio (CRR) Cash that banks deposits with the RBI without any floor rate or ceiling rate. + Statutory Liquidity Ratio (SLR) It is the ratio of liquid asset, which all Commercial Banks have to keep in the form of cash, gold and government approved securities with itself. and and @ + Repo Rate It is the rate, at which RBI lends short-term money to the banks against securities + Reverse Repo Rate It is the rate, at which banks park short-term excess liquidity with the RBI. This is always 100 base point, 1% less than Repo rate, Qualitative/Selective/Direct Credit Control Qualitative measures are used to make sure that purpose, for which loan is given is not misused. It is done through + credit rationing, + regulating loan to consumption ete. New Bank Licence In April 2015, Reserve Bank of India provided licence for operation to two new private banks namely Bandhan Financial Services and Infrastructure Development Finance Company (DFC). MUDRA Bank Micro Units Development and Refinance Agency Bank (MUDRA Bank) was launched on 8th April, 2015. Bank set up under SIDBI (Small Industries Development Bank of India). Bank has launched 3 loan instruments upto @ 5 lakh, + Tarun-Cover loans above % 5 lakh and upto @10 lakh. Indradhanush Scheme 2015 This is for the banking reforms in India. The 7 key reforms of Indradhanush Mission includes. appointments de-stressing, capitalisation, empowerment, framework of accountability, governance "reforms and bank board bureau, 15th Finance Commission The 15th Finance Commission was constituted in accordance with the Article 280 of the Indian Constitution. ‘The first finance commission was headed by KC Neogi and the 15th Finance Commission is headed by NK Singh@ Stock Exchange of India + Capital market is the market for long-terms funds while money market is the market for short-term funds. + Capital market of India is regulated by SEBI (Securities and Exchange Board of India, 1988), + A Stock Exchange provides services for brokers and traders to trade stocks, bonds, and other securities. + The Bombay Stock Exchange (BSE) is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia, The BSE has the langest number of listed companies in the world established in 1875. + The National Stock Exchange (NSE) is the 16th largest stock exchange in the world. It is situated in Mumbai Insurance + Insurance industry includes two sectors, life Insurance and General Insurance. + LIC was established on Ist September, 1956. + Insurance Regulatory and Development Authority of India (RDAD) was set-up on 19th April, 2000 to regulate the Insurance Sector IRDA has changed its name to Insurance Regulatory and Development Authority of India in December 2014. Foreign Trade Balance of Trade (BoT) ‘The difference between a nation’s imports of goods and services and its exports of them is known as Balance of Trade. There are three possibilities in the Balance of ‘Trade (BoT) which are as follows 1. Balance BoT i.e, Exports = Imports 2. Adverse BoT i.e. Exports < Imports 3. Favourable BoT i.e. Exports > Imports GENERAL KNOWLEDGE ~ Indian Economy Balance of Payment (BoP) BoP records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time period typically a year. ‘There are two main accounts in the BoP : the current account and the capital account. In addition to that BoP includes errors and omissions and change in foreign exchange reserves. Foreign Direct Investment (EDD It is an investment in a foreign country through the acquisition of a local company or the establishment of an operation on a new greenfield site. Direct investment implies control and ‘managerial and perhaps technical, input. FDI Limits SectoriActivity % of FDIEquity Multi Brand Retail (food) 100% Telecom Services 100% Tea Plantation 100% ‘Asset Reconstruction 100% Company Patroleum and Natural Gas 4996 ‘Commodity Exchanges 40% Insurance 74% Power Exchanges 49% Stock Exchanges/Clearing 495% Conporations Credit Information "100% (Green Companies, Pharma Field), 74 % (Brown Fiela} Courier Services 100% Single Brand Product 100% Retail Trading Defence Sector 100% Aitines: 100%GENERAL KNOWLEDGE ~ Indian Economy CENSUS 2011 Population Trend in India Total Population @ 1210569573 1891-1921 Stagnant population Male 623121843 (51.47%) 1921-1951 Steady growth Female 587447730 (48.53%) 1951-1981 Rapid high growth (stage of Density 382 per sq km population explosion} Sex Ratio 943 1981-2001 High growth rate with definite Child Sex Ratio 914 signs of slowing dawn Largest and the Smallest States/UTs (in Population) Top States/UTs Bottom States/UTs Uttar Pradesh 199261477 Lakshadweep 64,429 Maharashtra 111287272 Ladakh 2,74,000 Bhar 109804637 Andaman and Nicobar Islands _3,79.944 West Bengal 91347736 Dadra and Nagar Haveli and 585.764 Daman and Dis Andhra Pradesh 84665583 Sikkim 6,07.688, Effective Literacy Rate (2001-2011) 2001 (%) 2017 (%) Difference Persons 64.85, 74.08 10.21 Males 75.26 52.14 69 Females 53.67 65.46, 18 States/UTs (according to Literacy) Top States/Uts (in %) Bottom States/Uts, (0%) Kerala 3.1 Bihar 63.82 Lakshadweep 92.28 ‘Arunachal Pradesh 65.95 Mizoram 91.58 Rajasthan 67.06 Tripura 87.75 Jharkhand 67.63 Goa 87.40 ‘Andhra Pradesh 67.65 Sex Ratio 2001 2011 Population Proportion ‘Population ‘Proportion (inmn) (in) (inmn) (in %) = Males 5822 S174 623.7 S151 = Females 496.5 48.26 586.4 48.46 ‘Adult Sex Ratio 933 943 = Males 850 51.89 829 52.24 = Females 788 4a.it 758 47.76 Child Sex Ratio 927 914® GENERAL KNOWLEDGE ~ Indian Economy ECONOMIC TERMS Assets Properly of any kind. Balance of Trade (Bol) The difference between the exporls and imports of two Counties in trade with each other is called Balance of Trade, Balance Sheet It is a statement of ‘accounts, generally of a business concer, prepared at the end of a year. Banker's Cheque A cheque by one bank to another. Bank Rate It is the rate of interest charged by the Reserve Bank of India for lending money to commercial banks, Barter To trade by exchanging one commo- city for another. Bearer This term on cheques and bills denotes that any person holding the same, has the same right in respect of it, as the person who issued it Black Money It means unaccounted money, concealed income and undisclosed wealth. The money which thus remains un- accounted for, is called the black money. Bond A legal agreement to pay a certain sum of money (called principal) at some future date and carrying a fixed rate of interest, Budget An estimate of expected revenues ‘and expenditure for a given period, usually a year, item by ite Budget Deficit When the expenditure of the government exceeds the revenue, the balance between the two is the budget deficit Bulls Speculators in the stock markets who buy goods, in some cases without money lo pay with, anticipating thal prices will go up. Buyer's Market An area in which the supply of certain goods exceeds the demands so that purchasers can drive hard bargains, Commercial Banks Financial institutions that create credit accept deposits, give loans and perform other financial functions. Call Money Loan made for a very shor period. I carries a low rate of interest Deflation It is a state in monetary market when money in circulation has decreased Depreciation Reductionin the value of fixed assets due to wear and tear. Devaluation Official reduction in the foreign value of domestic currency. It is done to encourage the country’s exports and discourage impor. Dividend Earning of shareholders. Dumping Sale of a commodity at different prices in different markets, lower price being charged in a market where demand is relatively olastic. Exchange Rate The rate at which Central Banks will exchange one country’s currency for anather. Excise Duty Tax Imposed on the manufacture, sale and consumption of various commodities, such as taxes on toxtiles, cloth, liquor, et. Fiscal Policy Government's expenditure, tax policy and borrowing, Gross Domestic Product (@D*) A measure of the total flow of goods and services produced by the economy over a specific time period, normally a year Repo Rate The rate at which banks borrow from RBI It injects liquidity into the market Inflation A sustained and approciabole increase in the price level over a considerable period of time, Monopoly Single seller selling single product. Monopolistic Competition Existence of too many sellers seling differentiated products. Bilateral Monopoly Existence of single buyer and single seler. Monopsony Single buyer buying product being unique. Oligopoly Existence of fow sollors and fow products. Price war is a common feature, Reverse Repo Rate The rate at which RBI borrows from banks for a short-term. It withdraws liquidity into the market stock paid to