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    Deepak

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    Deepak Mishra
    The document provides an overview of key macroeconomic concepts related to the Indian economy including: 1) Calculation of macroeconomic aggregates such as real vs nominal GDP, price indices, and the GNP deflator. 2) Analysis of whether India is still an agrarian economy based on sectoral share of GDP. 3) Discussion of unemployment rates in India and its impact on the economy. 4) Explanation of fiscal and monetary policy tools and their effect on aggregate demand and economic growth. 5) Components of India's balance of payments including the current account, capital account, causes of surpluses and deficits, and major imports and exports. 6) Definitions of

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    Deepak

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    The document provides an overview of key macroeconomic concepts related to the Indian economy including: 1) Calculation of macroeconomic aggregates such as real vs nominal GDP, price indices, and the GNP deflator. 2) Analysis of whether India is still an agrarian economy based on sectoral share of GDP. 3) Discussion of unemployment rates in India and its impact on the economy. 4) Explanation of fiscal and monetary policy tools and their effect on aggregate demand and economic growth. 5) Components of India's balance of payments including the current account, capital account, causes of surpluses and deficits, and major imports and exports. 6) Definitions of

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    The document provides an overview of key macroeconomic concepts related to the Indian economy including: 1) Calculation of macroeconomic aggregates such as real vs nominal GDP, price indices, and the GNP deflator. 2) Analysis of whether India is still an agrarian economy based on sectoral share of GDP. 3) Discussion of unemployment rates in India and its impact on the economy. 4) Explanation of fiscal and monetary policy tools and their effect on aggregate demand and economic growth. 5) Components of India's balance of payments including the current account, capital account, causes of surpluses and deficits, and major imports and exports. 6) Definitions of

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    50 views27 pages

    Deepak

    Uploaded by

    Deepak Mishra
    The document provides an overview of key macroeconomic concepts related to the Indian economy including: 1) Calculation of macroeconomic aggregates such as real vs nominal GDP, price indices, and the GNP deflator. 2) Analysis of whether India is still an agrarian economy based on sectoral share of GDP. 3) Discussion of unemployment rates in India and its impact on the economy. 4) Explanation of fiscal and monetary policy tools and their effect on aggregate demand and economic growth. 5) Components of India's balance of payments including the current account, capital account, causes of surpluses and deficits, and major imports and exports. 6) Definitions of

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    Flow of Presentation

    qIntroduction to Indian Economy qMacro Economic Aggregates qIs Still India an Agrarian Economy qUnemployment- A Mammoth Burden qFiscal & Monetary Policies qBalance of Payment qMoney Supply

    Introduction to Indian Economy

    Calculation of Macroeconomic Aggregates


    Real vs Nominal GNP Price indices

    Real vs Nominal GNP


    GNP is the total dollar value of the finished goods and services that were produced for consumption in a certain time by all the countrys citizens. The GNP figure that does not take into effects of inflation is called nominal GNP. GNP increases if:a)More goods and services are produced or, b)If prices rise, or both

    Price Indices
    GNP Deflator Consumer Price Index Wholesale Price Index

    Concept of GNP deflator:Nominal GNP (Rs. Crore) Price Index Real GNP (GNP Deflator (1987-88 prices) 1987-88=100)

    1987-88 1991-92 %age increase

    2,92,232 5,35,055 83.09

    100.00 147.08 47.08

    2,92,232 3,63,785 24.49

    Real GNP= Nominal GNP*(GNP Deflatorbase

    year

    /GNP Deflatorcurrent

    year

    TABLE 39 : WHOLESALE PRICE INDEX - ANNUAL AVERAGE Year Index (Average of Weeks) AC PA ofwhich FA 1 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 AC : All commodities FA : Food articles 2 100.0 112.6 121.6 127.2 132.8 140.7 145.3 155.7 161.3 166.8 175.9 187.3 195.5 206.1 215.9 233.9 242.7 3 100.0 115.8 125.3 135.8 139.4 156.2 158.0 162.5 168.4 174.0 181.5 188.1 193.6 208.6 224.8 247.3 273.6 PA : Primary articles NF : Non-food articles MP : Manufactured products. 4 100.0 112.8 122.2 137.3 141.4 159.4 165.5 170.5 176.1 179.2 181.5 186.3 195.3 210.3 222.1 239.8 274.9 NF 5 100.0 124.2 135.4 134.2 137.5 151.8 143.0 146.5 152.9 165.4 186.3 187.6 179.2 188.2 212.2 235.8 244.6 6 100.0 108.9 114.5 126.4 143.8 148.5 162.0 208.1 226.7 239.2 254.5 280.2 306.7 323.9 327.2 351.3 343.1 7 100.0 112.3 121.9 124.4 128.0 133.6 137.2 141.7 144.3 148.1 156.5 166.3 171.4 179.0 188.0 203.1 209.6 FPL&L MP

    FPL&L : Fuel, power, light & lubricants FA and NF are part of PA Also see Notes on Tables.

    Source : Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India.

    ANNUAL VARIATION Year 1 1993-94 (Base: 1993-94=100) 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 12.6 8.0 4.6 4.4 5.9 3.3 7.2 3.6 3.4 5.5 6.5 4.4 5.4 4.7 8.3 3.8 15.8 8.2 8.4 2.7 12.1 1.2 2.8 3.6 3.3 4.3 3.6 2.9 7.8 7.7 10.0 11.0 12.8 8.3 12.4 3.0 12.7 3.8 3.0 3.3 1.8 1.3 2.6 4.8 7.7 5.6 8.0 14.7 24.2 9.0 -0.9 2.5 10.4 -5.8 2.4 4.4 8.2 12.6 0.7 -4.5 5.0 12.8 11.1 4.6 8.9 5.1 10.4 13.8 3.3 9.1 28.5 8.9 5.5 6.4 10.1 9.5 5.6 1.0 7.4 -2.4 12.3 8.5 2.1 2.9 4.4 2.7 3.3 1.8 2.6 5.7 6.3 3.1 4.4 5.0 8.0 3.2 Percentage variation AC 2 8.4 PA 3 6.9 FA 4 4.9 NF 5 8.9 FPL&L 6 15.5 MP 7 7.8

    Note : 1. AC: All Commodities. 2. PA: Primary Articles. 3. FA: Food Articles. 4. NF: Non-food Articles. 5. FPL&L: Fuel, Power, Lights Lubricants. 6. MP: Manufactured Products. 7. FA and NF are part of PA. Also see Notes on Tables. Source : Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India.

    GNPMP

    -D

    ion iat ec pr e

    55,53,333 -Net Income from Abroad

    -N et In

    For 2008-09 (in Rs. Crore)


    di r ec t Ta xe s

    NNPMP

    49,78,104 -Net income from abroad

    re ep -D -N e t in d i re

    ion iat c

    GDPMP

    -N

    et

    GNPFC

    55,74,448

    ct t

    ax e

    s
    NNPFC

    t ta xe s tion cia e epr -D

    ind

    ire c

    52,07,534 -Net Income from Abroad

    NDPMP

    GDPFC

    49,99,219

    -N e

    t in

    dire

    ct t

    46,32,305
    ax e s

    52,28,650
    -De pr on i at i ec

    -Net Income from Abroad

    Net Indirect Taxes= 345799 NFIA= -21116 Depreciation= 575229

    NDPFC

    46,53,421

    Is Still India an Agrarian Economy?


    2000-2001 GDP Service A.Ratio S.Ratio 1925017 1083314 21.24% 56.28% Agriculture 408932 2001-2002 2097726 442464 1200442 21.09% 57.23% 2002-2003 2261415 425521 1326053 18.82% 58.64% 2003-2004 2538170 483030 1496722 19.03% 58.97% 2004-2005 2877701 501415 1727008 17.42% 60.01% 2005-2006 3402316 536249 2078027 15.76% 61.08% 2006-2007 3941865 596765 2408669 15.14% 61.10% 2007-2008 4540987 692229 2785720 15.24% 61.35% 2008-2009 5228650 767119 3295337 14.67% 63.02%

    Impact Of Monsoon On Indian Economy

    Unemployment A Mammoth Burden


    Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Population 104.5845 104.97 106.5071 108.0264 109.5352 112.9866 114.7996 116.6079 118.3108 Unemplyement Rate 8.8 9.5 9.2 8.9 7.8 7.2 6.8 10.7 10.8

    Impact of Unemployment on Indian Economy

    Fiscal Policy Fiscal policy Instruments Sources of revenue Taxation Raised public debt etc.. Taxation Tax structure Government Expenditure Budget deficit

    Fiscal Deficit

    Money supply growth Inflation Crowding out of private investment Crowding out of Essential public expenditure Monetized deficit Primary deficit

    Monetary policy
    Relevance of monetary policy Tools of monetary policy Quantitative instruments: Reserve requirements Discount/Bank Rate Open market operations Qualitative restrictions

    Impact of monetary policy on aggregate demand Monetary policy a tool to prevent economy from overheating Monetary policy and fiscal policy

    Balance of Payments (BOP)


    The Balance of Payments is the statistical record of a countrys international transactions over a certain period of time presented in the form of double-entry bookkeeping.

    When we say a countrys balance of payments we are referring to the transactions of its citizens and government.

    Std components of BOP


    CURRENT ACCOUNT (+) Export fob (-) Import fob = Trade Balance (+) Exports on Non-financial services (-) Imports on Non-financial services (+) Investment Income(Credit) (-) Investment Income(Debit) +(-) Private unrequited transfers +(-) Official unrequited transfers = Current Account balance = Capital Account balance CAPITAL ACCOUNT +(-) Direct Investment +(-) Portfolio Investment +(-) Other Long term Capital +(-) Other Short term Capital +(-) Net errors and omissions +(-) Counterpart items +(-) Total change in reserves

    CAUSES OF CURRENT ACCOUNT SURPLUSES AND DEFICITS

    Growing Population Growing Domestic Demand Inadequate Production International Competitiveness Exchange Rate Trade Cycles Trade Restrictions

    BOP FLUCTUATIONS

    BOP ANALYSIS.xlsx

    MAJOR IMPORTS- A PROBLEMS


    Petroleum products are imported to about approx 30% of GDP as per last 5 year data from 200506 till this financial year. Gold and Silver, Machinery tool and Electrical equipments are majorly imported.

    MAJOR EXPORTS-DEVELOPMENT REQUIRED


    Ready made garments Rice Pharmaceuticals products and Cosmetics Iron ore Cotton yarn and fabrics Gems and Jewellery

    Money supply
    M0= Notes and Coins in circulation +Cash with Banks + deposit with RBI + Other deposits with Reserve Bank M1= Currency with public +Demand Deposits + Other Deposits with RBI M3 = Time Deposits + M1

    M3 Stock and Source


    money supply.xlsx

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