11. economic trends

8/4/2019 11. Economic Trends

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230

248

268

282

347

411

414

452

477

515

637

650

716

1181

1237

1410

1552

1976

3979

10417

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

189

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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11. economic trends

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