Scribd
Upload
4 views

day46CDS,NDA

Uploaded by

filmcameo
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
4 views

day46CDS,NDA

Uploaded by

filmcameo
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

OLIVE

PRINT
THE ULTIMATE GUIDE TO SUCCESS
FOR CDS/NDA
OPEN ECONOMY MACROECONOMICS

Key Components:

International Trade:
Involves exchanging goods and services across borders.
Guided by comparative advantage, allowing countries to specialize in products with lower
opportunity costs.

Capital Flows:
Involves cross-border movement of financial capital (FDI, portfolio investments, loans).
Influences asset prices, interest rates, and economic stability.

Exchange Rates:
Determine currency value in international markets.
Affect trade competitiveness, inflation, and foreign investment.
Can be fixed or floating (determined by market forces).

Balance of Payments (BOP):


Records a country’s transactions with the rest of the world.
Comprises the current account (trade and income), capital account (capital transfers), and
financial account (investments).
Economic Policies:
Governments use tariffs, subsidies, quotas, and currency interventions
to regulate trade.
Trade agreements and capital controls influence economic stability and
growth.

Global Interdependence:
Economies are interconnected, making them vulnerable to global
economic changes.
Requires international cooperation and policy coordination.

Macroeconomic Identities in an Open Economy:

1. Trade Balance (TB): Measures net exports (exports - imports).


2. Current Account (CA): Records trade balance plus net income from
abroad.
3. Savings-Investment Identity: National savings = domestic investment +
current account balance.
4. Purchasing Power Parity (PPP): Reflects currency value adjustment
based on price levels between countries.

DO IT YOURSELF
Applications and Policy
Implications in Open
Economy Macroeconomics
ECONOMIC COMMITTEES IN INDIA

Banking and Financial Sector:

1. Rangarajan Committee: Disinvestment policies.


2. Narasimham Committee: Financial sector reforms, including banking and capital markets.
3. Basel Committee: International banking supervision standards.
4. Tandon Committee: Working capital financing system by banks.
5. Vaghul Committee: Development of India’s money market.
6. Tarapur Committee: Capital account convertibility.
7. Goiporia Committee: Improvement of customer service in cooperative banks.

Taxation and Fiscal Policy:

1. Kelkar Committee: Tax reforms, including direct and indirect taxes.


2. Raja Chelliah Committee: Comprehensive tax reforms.
3. Rekhi Committee: Reforms in indirect taxes.
4. Y.V. Reddy Committee: Review of income tax rebates.

Industrial and Infrastructure Development:

1. Abid Hussain Committee: Development of small-scale industries.


2. Parikh Committee: Infrastructure financing recommendations.
3. Chandrashekar Committee: Venture capital promotion.
4. Dhanuka Committee: Simplification of securities market transfer rules.
5. Meera Seth Committee: Handloom sector development.
6. Prasad Panel: International trade and services growth.

Rangarajan Committee
Insurance and Corporate Governance:

1. Malhotra Committee: Insurance sector reforms.


2. JJ Irani Committee: Corporate law reforms.
3. CB Bhave Committee: Company information transparency.
4. Malegam Committee: Reforms in primary markets and restructuring of UTI
.
Agriculture and Rural Development:
1. Hanumanth Rao Committee: Fertilizer policy.
2. Khusro Committee: Agricultural credit system reform.
3. RV Gupta Committee: Small savings and rural credit.
4. Abhijit Sen Committee: Long-term food policy.

Economic Reforms and Policy:


1. Athreya Committee: Restructuring of IDBI.
2. Deepak Parekh Committee: Revival of UTI.
3. Mashelkar Committee: Auto fuel policy.
4. Bimal Julka Committee: Working conditions for ATCOs.
5. GV Ramakrishna Committee: Disinvestment framework.
6. Bhure Lal Committee: Motor vehicle tax increase recommendations.

Capital Market and Securities:


1. Janakiraman Committee: Securities transactions review.
2. Chore Committee: Cash credit system evaluation.
3. Chandrate Committee: Share market delisting regulations.
4. JR Verma Committee: Current account carry-forward practices.
5. Dave Committee: Pension schemes for the unorganized sector.
POVERTY IN INDIA

Definition: Poverty
signifies a lack of basic
resources such as
income, food, shelter,
healthcare, and
education.

World Bank Definition: Deprivation in well-being due to inadequate incomes and restricted
access to essential services.

Poverty in India:
2011 Data: 21.9% of India’s population lived below the national poverty line.
Global Context (2018): 8% of the world’s workers lived on less than $1.90 per day.

Types of Poverty:

Absolute Poverty:
Defined globally, indicating insufficient income to meet basic survival needs.
World Bank Threshold: Less than $1.90 per day.
Relative Poverty:
Reflects income inequality within a society.
Defined relative to the median income of the population.

Poverty Estimation in India:


Conducted by NITI Aayog using NSSO data.
Based on consumption expenditure rather than income.
Head-count Ratio: Measures the percentage of the population living below the poverty line.
Key Committees for Poverty Estimation:
Alagh Committee (1979): Caloric intake-based poverty line (2400 calories rural,
2100 urban).
Lakdawala Committee (1993): Updated the poverty line with current prices.
Tendulkar Committee (2009): Used consumption-based criteria, accounting for
health and education.
Rangarajan Committee (2014): Updated poverty line with higher monthly
expenditure thresholds.

Major Causes of Poverty in India:


Population Explosion: Strain on resources due to rapid growth.
Low Agricultural Productivity: Outdated methods, fragmented landholdings.
Inefficient Resource Utilization: Underemployment and disguised unemployment.
Low Economic Development: Slow growth pre-1991 reforms.
Inflation (Price Rise): Higher costs of living for the poor.
Unemployment: Limited job creation despite rising job seekers.
Lack of Capital & Entrepreneurship: Limited investments and innovation.
Social Factors: Caste system, traditional customs, and lack of social mobility.
Colonial Exploitation: Economic damage during British rule.
Climatic Factors: Natural disasters disrupting agriculture and livelihoods.

Poverty Trap:
A cycle where lack of resources and
opportunities prevents individuals from
escaping poverty

DO IT YOURSELF

Poverty Alleviation Programs in India

You might also like