Indian Economy, 2nd Edition by Pearson

Indian Economy, 2nd Edition by Pearson

by Madhur M. Mahajan
Released December 2022
Publisher(s): Pearson India
ISBN: 9789356065208

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Book description

The second edition of the book is divided into seven sections and comprises thirty chapters that cover almost every aspect of Indian economy. The concepts are first discussed and then analytically explained with the trends and direction of Indian economy. This edition has been updated with the latest data on Indian economy, with special focus on Economic Survey 2020-21 and Budget 2022-23. The book covers the syllabus of civil services optional and general studies, graduate and post-graduate courses of Indian universities, Indian economic services, UGC and other competitive exams.

Features -

•The chapter summary at the end of every chapter provides the crux of the whole chapter and will be a significant help to revise the chapter in a short span of time especially before the exams.
•The multiple-choice questions at the end of every chapter will broaden the objective understanding of the reader.
•Glossary at the end of book will help the students to understand the various complex terms associated with Indian economy.
•Chapter 30 based on Economic Survey 2020-21 and Budget 2022-23 has been discussed in Q&A format for a more comprehensive understanding and exam-orientation.

Table of contents

  1. Cover
  2. About Pearson
  3. What the reviewers say about this book
  4. Title Page
  5. Copyright Page
  6. Dedication Page
  7. Brief Contents
  8. Contents (1/2)
  9. Contents (2/2)
  10. Preface to the Second Edition
  11. Preface to the First Edition
  12. About the Author
  13. Chapter 01: Few Basic Concepts and Nature of Indian Economy
    1. Introduction
    2. What Is Economics?
    3. The Two Branches of Economics: Microeconomics and Macroeconomics
    4. Capitalism, Socialism, and Mixed Economies
    5. Inputs and Outputs
    6. Economic Growth and Development
    7. Types of Economies
    8. Nature of Indian Economy
      1. India—A Lower Middle-income Country
      2. Third Largest and Fastest Growing Economy
      3. Higher Population Growth and High Dependency Ratio
      4. Wide Scale Poverty and Unemployment
      5. Low Level of Savings and Investment
      6. Low Level of Human Development
      7. From Agriculture Predominance to Service Led Growth
    9. Summary
    10. Multiple-choice Questions
    11. Endnotes
  14. Chapter 02: National Income, Savings, and Capital Formation
    1. Introduction
    2. What is National Income?
      1. National Income Indicators
        1. Net National Product (NNP)
      2. National Income at Current Prices and Constant Prices
        1. National Income at Current Prices
      3. Per Capita Income
      4. Circular Flow of National Income
      5. Methods of Measuring National Income in India
        1. Expenditure Method
        2. Product Method
        3. Income Method
      6. Characteristic Features of National Income in India
        1. India: Among the Largest Economies of the World
        2. Sectoral Change in National Income
        3. Steep Increase in Per Capita National Income
        4. Fast Growing Economy
      7. Trends of National Income in India
        1. 1951–1980: The Phase of Modest Growth Rate
        2. 1980–90: The Phase of Economic Buoyancy and Recovery
        3. 1992 Onwards: Post-Reform Period
    3. State Domestic Product: Features and Trends
    4. Savings and Capital Formation in India
      1. Domestic Saving
        1. Reasons for Low Savings in India
      2. Capital Formation in India
        1. Few Concerns Related to Capital Formation in India
        2. Suggestions to Raise Capital Formation in India
    5. Impact of COVID-19 on Indian Economy
      1. Impact on Sectoral Growth Rate
        1. Agriculture
        2. Manufacturing
        3. Services
      2. Impact on Employment
      3. Impact on Poverty
      4. Impact on Trade and Balance of Payment
    6. Summary
    7. Multiple-choice Questions
    8. Endnotes
  15. Chapter 03: Human Development and Happiness Economics
    1. Introduction
    2. Human Development
      1. Human Development Index
        1. How Is HDI Calculated?
        2. Calculation of Dimension Indices
        3. Why the Concept of HDI Is superior to GNP?
    3. Other Human Development Indices
      1. Inequality Adjusted Human Development Index
      2. The Gender Inequality Index
      3. Gender Development Index
      4. Multi-dimensional Poverty Index
    4. World Happiness Index
      1. Importance/Merits of Happiness Index
        1. Useful Policy Tool
        2. An alternate to Other Measures of Development
        3. Lifestyle Problems and Happiness
      2. Demerits/Drawbacks of Happiness Index
        1. It Is Not Easy to Measure Subjective Well-Being
        2. The Statistics Problem
        3. Making Happiness Index More Comprehensive
        4. Beyond Happiness Index
    5. Summary
    6. Multiple-choice Questions
    7. Endnotes
  16. Chapter 04: Natural Resources, Environment, and Sustainable Development
    1. Introduction
    2. Natural Resources in India
      1. Land
      2. Soil
        1. Soil Erosion
        2. Soil Conservation
      3. Water
        1. Surface Water Resources
        2. Groundwater Resources
        3. Some Concerns Related With Water Resource
        4. National Water Policy, 2012
        5. Composite Water Management Index
      4. Forests
        1. Draft National Forest Policy, 2018
      5. Minerals
        1. National Mineral Policy 2019
    3. Sustainable Development
      1. Sustainable Development Goals
      2. Global Awakening Toward Sustainable Environment
      3. Paris Agreement
      4. Why Is Sustainable Environment Important for Us?
    4. Sustainable Development and India
      1. India’s Actions on Sustainable Development and Climate Change
      2. Air Pollution and Control Measures in India
        1. Initiatives on Air Pollution Mitigation
    5. Waste Management in India
      1. India’s Post-2020 Climate Goals
    6. Summary
    7. Multiple-choice Questions
    8. Endnotes
  17. Chapter 05: Indian Infrastructure
    1. Introduction
    2. Economic and Social Infrastructure
    3. TransPort
      1. Indian Railways
        1. Features of Indian Railways
        2. Problems of Indian Railways
        3. Government Policy with Regard to Railways
      2. Road Transport
        1. Problems of Indian Road Sector
        2. Government Policy With Regard to Road Transportation
      3. Water Transport: Maritime & Inland Waterways
        1. Marine Transport
        2. Features of Shipping and Port Sector
        3. Problems of Shipping and Port Sector
        4. Inland Water Transport
        5. Features of Inland Waterways
        6. Problems of Inland Waterways
        7. Policy Issues with Regard to Inland Waterways
      4. Air Transport
        1. Features of Air Transport
      5. Problems of Indian Air Transport Sector
      6. Government Policies With Regard to Air Transport Sector
        1. Airport Authority of India (AAI)
        2. Regional Connectivity Scheme—“Ude Desh ka Aam Naagrik” (RCS-UDAN)
        3. Airport Development
        4. Investment Initiatives
        5. National Civil Aviation Policy, 2016
    4. Energy
      1. Characteristic Features of Energy in India
    5. Conventional Energy
      1. Coal
        1. Features of Coal Energy Resource
      2. Problems in the Coal Sector
        1. Supply Constraints
        2. Corruption and Scams
        3. Environmental Challenges
        4. Social Challenges
        5. Policy Issues in the Coal Sector
      3. Hydroelectricity
        1. Features of Hydroelectric Power in India
        2. Challenges and Problems of Hydropower Projects
        3. Small Hydropower Programs
        4. Natural Gas
        5. Features of Natural Gas in India
        6. Challenges of Natural Gas in India and Policy Implications
    6. Oil/Petroleum
      1. Features of Petroleum Energy
      2. Government Policy Regarding Petroleum Sector
    7. Nuclear Energy
    8. Renewable Energy in India
      1. Wind Energy
      2. Policy Initiatives
        1. Draft Wind-Solar Hybrid Policy
        2. Competitive Bidding
        3. Incentives by the Government
        4. Other Measures
      3. Solar Energy
        1. Policy Action for the Development of Solar Energy
      4. Biomass Power
      5. Biofuel
        1. Benefits/Features of Biofuels
        2. National Policy on Biofuels–2018
      6. Biogas
    9. Communication
      1. Postal Services
      2. Telecommunication
        1. Telephony
        2. Broadcasting
    10. Summary
    11. Multiple-choice Questions
    12. Endnotes
  18. Chapter 06: India’s Population and Demographic Dividend
    1. Introduction
    2. Demographic Transition Theory
    3. World Population Trends
    4. Characteristic Features of Indian Population
      1. Size and Growth of Population
      2. Density of Population
      3. Age Composition of Indian Population
      4. Sex Composition of Indian Population
      5. Life Expectancy and Mortality Rates
      6. Religious Composition of Population
      7. State-wise Distribution of Population
    5. Population Policies in India
      1. Background
      2. National Population Policy 2000
    6. Is India’s Huge Population a Demographic Disaster or Demographic Dividend?
      1. Population as a Demographic Disaster
        1. Poverty, Unemployment, and Low Level of Human Development
        2. Adverse Land–Man Ratio
        3. Environmental and Ecological Consequences
        4. Urbanization
        5. Food Security
      2. Population as a Demographic Dividend
        1. Lessons from China and East Asia
        2. Demographic Dividend: Challenges and Road Ahead
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  19. Chapter 07: Poverty and Inequality in India
    1. Introduction
    2. Estimation of Poverty by International Agencies
      1. World Bank’s Estimates of Poverty
      2. Multi-dimensional Poverty Index
      3. Extreme Poverty in India as per World Poverty Clock
    3. Incidence of Poverty in India
      1. Planning Commission Working Group (1962)
      2. Task Force Under the Chairmanship of Dr Y.K. Alagh (1977)
      3. Expert Group Under the Chairmanship of Prof. D.T. Lakdawala (1989)
      4. Expert Group—Tendulkar (2005)
      5. Expert Group—Rangarajan (2012)
    4. Critical Evaluation of Poverty Alleviation Measures in India
      1. Pre-reform Phase (1947–1990)
      2. Post-reform Phase (1991 Onward)
      3. Qualitative Aspects of Poverty
    5. Universal Basic Income
      1. Arguments in Favor of UBI
        1. Freedom and Justice
        2. Poverty Reduction
        3. Optimum Allocation and Efficient Welfare Solution
        4. Reducing Income Inequality
        5. Gender Equality
        6. Increase in Financial Inclusion
      2. Arguments in Disfavor of UBI
        1. UBI as a “Negative Incentive”
        2. The Costing Problem
        3. Other Problems
      3. UBI Experiments Around the World
      4. Guiding Principles for Setting Up a UBI in India
        1. De Jure Universality, de Facto Quasi-universality
        2. Gradualism
        3. UBI and Redistributive Resource Transfers to States
    6. Inequality in India
      1. Extent of Income Inequality During Pre-reform India
      2. Causes of Inequality in India
        1. The March of Billionaires
        2. Monopolies and Crony Capitalism
        3. Inherited Wealth
        4. Gender Bias
        5. Unequal Distribution of the Gains From Growth
        6. Inequality in Wages
      3. Measures to Address the Problems of Inequality
        1. Tax Policies
        2. Redistributive Policies
        3. Addressing Human Development Issues
        4. Land Reforms
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  20. Chapter 08: Labor Force, Occupational Pattern, and Unemployment in India
    1. Introduction
    2. Activity Status of Population
    3. Characteristics of Labor Force Growth in India
    4. Occupational Structure in India
      1. Agriculture: The Mainstay of Indian Workforce
      2. Proportion of Workforce in Industrial Sector
      3. Proportion of Workforce in Service Sector
    5. Unemployment
      1. Concept of Unemployment in India
        1. Usual Principal Status (UPS)
        2. Usual Principal and Subsidiary Status (UPSS) Approach or Usual Status (US) Approach
        3. Current Weekly Status (CWS)
        4. Current Daily Status (CDS)
      2. Employment Structure in India
        1. Sectoral Distribution of Employment
        2. Employment by Status, Region, and Gender
        3. Employment Status by Categories
        4. Employment in Public and Private Sector
        5. State-wise Unemployment Patterns
      3. Causes of Unemployment in India
        1. Jobless Growth
        2. Declining Female Employment
        3. Falling Employment Elasticity
        4. Educated Unemployment
      4. Government Policies for Removal of Unemployment (1/2)
      5. Government Policies for Removal of Unemployment (2/2)
        1. Policy Action Under 5-year Plan
        2. Major Employment Generation Schemes
        3. Mahatma Gandhi National Rural Employment Guarantee Scheme
        4. Salient Features of MGNREGS
        5. Performance of MGNREGS
        6. Criticism of MGNREGS
        7. Skill Development Programs
    6. Summary
    7. Multiple-choice Questions
    8. Endnotes
  21. Chapter 09: Indian Economy During Pre-independence Period
    1. Introduction
    2. Indian Economy During Ancient and Medieval Times
    3. Indian Economy During British Times
      1. Early British Period: 1600–1757 A.D.
      2. From Battle of Plassey till the Sepoy Mutiny: 1757–1857 A.D.
      3. British Crown Period: 1858–1947 A.D.
    4. Impact of Colonial Rule in India
      1. Impact on GDP
      2. Impact on Agriculture
        1. Land Revenue Policy and Land Settlements
        2. Commercialization of Indian Agriculture
      3. Deindustrialization
        1. Decay of Local Industry and Crafts
        2. The Demise of Textile Industry and Trade
        3. Attempts of Industrialization During Colonial Period
      4. Transport and Communication
      5. English Education and New Westernized Elite
      6. Drain of Wealth
    5. Summary
    6. Multiple-choice Questions
    7. Endnotes
  22. Chapter 10: Indian Agriculture: Productivity, Land Reforms, and Livestock
    1. Introduction
    2. Role and Importance of Indian Agriculture
      1. Contribution in GDP
      2. Agriculture Trade
      3. FDI in Agriculture
      4. Employment in Agriculture
      5. Food Security
      6. Backward and Forward Linkages
      7. Capital Formation in Agriculture
      8. Agriculture and Poverty Reduction
      9. Changing Cropping Pattern
    3. Agricultural Production and Productivity Trends: Pre-reform Period
      1. Phase I (1949–1950 to 1964–1965)
      2. Phase II-1967–68 to 1980–81
      3. Phase III 1980–1981 to 1989–1990
    4. Agricultural Production and Productivity Trends: Post-Reform Period
      1. Phase I: 1990–1991 to 1999–2000
      2. Phase II: 2000–2001 to 2010–2011
      3. Phase III: 2010–2011 to 2017–2018
    5. Indian Agriculture and International Comparison
    6. Causes of Low Productivity of Indian Agriculture
      1. Small Size of Landholdings
      2. Population Pressure on Land
      3. Inadequate Irrigation Facilities
      4. Land Degradation
      5. Low Fertilizer Consumption
      6. Inadequate Access to Credit and Insurance
      7. Lower Level of Research and Development
      8. Lack of Technological Upgradation
    7. Measures to Improve Productivity in Indian Agriculture
      1. Adoption of HYV Seeds
      2. Enhancing Per Capita Fertilizer Consumption
      3. Spread of Irrigation
      4. Increase in Consumption of Power
      5. Agriculture Finance and Marketing
      6. Land Reforms
      7. Integrated Management of Land and Water Resources
    8. Land Reforms in India
      1. System of Land Tenure in British India
      2. Components of Land Reforms
        1. Abolition of Intermediaries
        2. Tenancy Reforms
        3. Reorganization of Agriculture
        4. Cooperative Farming
        5. Compilation and Updating of Land Records
      3. Critical Evaluation of Land Reforms in India
        1. Impact on Landlessness
        2. Impact on Poverty and Productivity
        3. Problems in Abolishing the Intermediaries
        4. Problems with Tenancy Reforms
        5. Problems with Land Consolidation
        6. Lack of Political Will
    9. Livestock Sector in India
      1. Role and Importance of Livestock in India
        1. Contribution to GDP
        2. Employment
        3. Structural Change in Demand Pattern
        4. Equitable Growth
    10. Summary
    11. Multiple-choice Questions
    12. Endnotes
  23. Chapter 11: Agriculture Inputs and Green Revolution
    1. Introduction
    2. Agriculture Inputs
      1. Seeds
        1. Areas of concern
        2. Policy Measures
      2. Fertilizers
        1. Problems in Fertilizer Usage
        2. Important Government Schemes
      3. Pesticides
        1. Drawbacks of Pesticides
        2. Government Policies
      4. Irrigation
        1. Importance of Irrigation
        2. Characteristics and Problems of Irrigation in India
        3. Government Policies on Irrigation
        4. Suggestions to Improve Irrigation in India
    3. Green Revolution
      1. Positive Impact of Green Revolution
      2. Drawbacks of Green Revolution
    4. Second Green Revolution
    5. Opportunities and Challenges
    6. Summary
    7. Multiple-choice Questions
    8. Endnotes
  24. Chapter 12: Agriculture Prices and Food Security
    1. Introduction
    2. Agriculture Price Policy and Its Objectives
    3. Instruments of Agriculture Price Policy
      1. Minimum Support Price (MSP)
      2. Buffer Stock
        1. Issue Price
      3. Advantages of MSP Policy
        1. Stabilizing Market Prices of Agriculture Products
        2. Technology Incentive
        3. Food Security
        4. Providing Certainty to Farmers’ Income
      4. Problems with Agriculture Price Policy
        1. The MSP Controversy
        2. MSP and the Farmers’ Distress
        3. Late Announcement of MSP
        4. Problems at the Procurement End
        5. Contribution to Inflationary Trend
        6. Bias in Favor of Surplus States and Rich Farmers
        7. Blow to Agriculture Diversification
    4. Food Security and Public Distribution System in India
      1. Components of Food Security
        1. Availability of Food
        2. Access to Food
        3. Absorption
      2. Government Measures to Ensure Food Security
        1. Public Distribution System
        2. Antyodaya Anna Yojana (AAY)
        3. Integrated Child Development Services (ICDS) Scheme
        4. Mid-Day Meal Scheme
        5. National Food Security Act, 2013 (NFSA)
      3. Critical Appraisal of Food Security Measures in India and Policy Implications
        1. Wrongful Identification of Poor
        2. Double Disadvantage to the Homeless
        3. PDS Leakages
        4. Issues Regarding Procurement and Storage of Foodgrains
        5. Rising Food Subsidy Bill
    5. Summary
    6. Multiple-choice Questions
    7. Endnotes
  25. Chapter 13: Agriculture Finance in India
    1. Introduction
    2. Sources of Agriculture Finance in India
      1. Non-institutional Credit
      2. Institutional Credit
        1. National Bank for Agriculture and Rural Development (NABARD)
        2. Financial Functions
        3. Developmental Functions
        4. Cooperative Credit Societies
        5. Regional Rural Banks
        6. Commercial Banks
    3. Agriculture Insurance in India
      1. Pradhan Mantri Fasal Bima Yojana
      2. Restructured Weather Based Crop Insurance Scheme (RWBCIS)
      3. Unified Package Insurance Scheme (UPIS)
      4. Coconut Palm Insurance Scheme (CPIS)
    4. Debt Burden and Farmers’ Suicides in India
    5. Credit Subsidy in India
      1. Types of Credit Subsidy
        1. Interest Subvention
        2. Farm Loan Waiver
    6. M.S. Swaminathan Report on Farmers’ Distress
      1. Land Reforms
      2. Increasing Irrigation Potential
      3. Adequate Supply of Funds
      4. Increase in Agriculture Production and Productivity
      5. Providing Food Security
      6. Arresting Farmers’ Suicides
      7. Making Agriculture Competitive and Remunerative
      8. Increasing Employment Opportunities of Rural Community
      9. Preservation of Biosecurity
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  26. Chapter 14: Agriculture Marketingin India
    1. Introduction
    2. Types of Agriculture Markets
      1. Rural Primary Markets
      2. The Wholesale/Assembling Markets
      3. Terminal Markets
      4. Retail Markets
    3. Characteristic Features of Agriculture Marketing in India
      1. Agricultural Produce Market Committee
      2. Grading and Standardization
      3. Changes in Standard Weights and Measures
      4. Godown and Storage Facility
      5. Development of Market Information Infrastructure
      6. Agriculture Price Policy
      7. Institutional Support
        1. CCS National Institute of Agricultural Marketing
        2. Small Farmers’ Agribusiness Consortium
        3. Agricultural Marketing Infrastructure
    4. Reforms in Agriculture Marketing
      1. Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017
      2. Contract Farming
      3. Direct Marketing
      4. Establishment of e-Markets
      5. Deregulation of Marketing of Fruits and Vegetables
      6. Ranking States in Terms of Marketing Reforms
    5. Co-operative Agriculture Marketing
      1. Structure and Progress of Co-operative Marketing in India
    6. Political Economy of Farm Laws
      1. Points in Favour
      2. Points in Disfavour
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  27. Chapter 15: Industrial Development and Policies
    1. Introduction
    2. Characteristic Features of Indian Industry
    3. Journey of Indian Industry Since Independence: Trends in Production and Growth
    4. Industrial Policy
      1. Industrial Policies During Pre-reform Period
      2. New Industrial Policy of 1991
    5. Impact of New Economic Policy on Indian Industry
    6. Why Is Manufacturing Sector Significant for India?
      1. Problems of Manufacturing Sector
      2. Recent Policy Initiatives in Manufacturing Sector
    7. National Manufacturing Policy, 2011
      1. Objectives of NMP
      2. Policy Instruments
    8. Make in India
      1. New Processes
      2. New Infrastructure
      3. New Sectors
      4. New Mindset
    9. New Industrial Initiatives
      1. Startup India
      2. Standup India
      3. Skill India
      4. Digital India
      5. Mudra Scheme
      6. Smart City
      7. Atal Innovation Mission (AIM)
    10. Summary
    11. Multiple-choice Questions
    12. Endnotes
  28. Chapter 16: Public, Private, and Small Sector in Indian Economy
    1. Introduction
    2. Public Sector Enterprises
      1. Central Public Sector Enterprises (CPSEs)
      2. Performance of Public Sector
      3. Problems of Public Sector
    3. Disinvestment
      1. Types of Disinvestment
      2. Methods of Privatization
      3. Objectives/Merits of Disinvestment in India
      4. Disadvantages of Disinvestment
      5. Journey of Disinvestment in India
    4. Private Sector in Indian Economy
      1. Role of Private Sector in Indian Economy
      2. Problems of Private Sector
    5. The Twin Balance Sheet Problem
      1. Causes of Twin Balancesheet Problem
      2. Why TBS Did Not Cause Economic Crisis in India?
      3. Solution to TBS Problem
    6. Insolvency and Bankruptcy Code (IBC), 2016
      1. Why Was IBC Needed?
      2. The IBC Ecosystem and Its Functioning
      3. Key Advantages of IBC
      4. Challenges for IBC
    7. Micro, Small, and Medium Enterprises (MSMEs)
      1. New Definition of MSMEs
      2. Performance of MSMEs in Indian Economy
      3. Problems of MSMEs in India
      4. Government Schemes for the Development of MSMEs
    8. Summary
    9. Multiple-choice Questions
    10. Endnotes
  29. Chapter 17: Service Sector in India—Characteristics, Growth, and Sustainability
    1. Introduction
    2. Characteristic Features of India’s Service Sector
      1. Increasing Share of Services in GDP
      2. Higher Growth Rate as Compared to Other Sectors
      3. FDI Inflows in Service Sector
      4. Trade in Services
      5. Indian Service Sector and Global Comparisons
    3. Reasons for Growth in Service Sector
      1. Splintering
      2. Spurt in Domestic Demand
      3. Technology, Transportability, and Tradability
      4. Globalization of Services
    4. Is Service-led Growth Sustainable?
      1. The Case for Service-led Growth
        1. Service Growth and Poverty Reduction
        2. Services Growth and Job Creation
        3. Trading in Services
      2. The Case Against Service-led Growth
    5. Summary
    6. Multiple-choice Questions
    7. Endnotes
  30. Chapter 18: Foreign Trade and Policy
    1. Introduction
    2. Why Nations’ Trade?
    3. Characteristics of India’s Foreign Trade
      1. Value of Trade
        1. Share of Exports/Imports in GDP
        2. Share of Exports/Imports in World Trade
      2. Composition of Trade
      3. Direction of Trade
        1. Direction of Exports
        2. Direction of Imports
        3. Diversification or Concentration?
    4. Foreign Trade Policy (FTP) of India
      1. FTP in Pre-reform Period
        1. Policy of Import Restriction
        2. Policy of Import Substitution
        3. Export Policy During the Pre-reform Period
      2. FTP in Post-reform Period
        1. Liberal Imports and Exports
        2. Decanalization of Trade
        3. The Managed Float System of Exchange Rate
        4. Establishment of Special Economic Zones
        5. Establishment of Agriculture Export Zones
        6. Establishment of Export-Oriented Units
        7. Export Houses and Trading Houses
        8. Market Access Initiative Scheme
      3. Foreign Trade Policy (2015–2020)
        1. Simplification & Merger of Reward Schemes
        2. Boost to “Make in India”
        3. Trade Facilitation & Ease of Doing Business
        4. Other New Initiatives
    5. Special Economic Zones (SEZs) in India
      1. Facilities and Incentives Extended to SEZs
      2. Objectives/Benefits of SEZs
        1. Contribution to GDP
        2. Contribution to Exports
        3. Increase in Investment
        4. Creation of Employment Opportunities
        5. Development of Infrastructure Facilities
      3. Demerits of SEZs
        1. Usurping the Prime Agricultural Lands
        2. The Problem of Displacement of Local Population
        3. Tax Exemptions and Revenue Foregone
        4. Generation of Inequity
        5. Underperformance
    6. Summary
    7. Multiple-choice Questions
    8. Endnotes
  31. Chapter 19: Balance of Payments, Foreign Exchange, and Investment
    1. Introduction
    2. Balance of Payment
      1. Trends in India’s BOP
        1. India’s Balance of Trade
        2. India’s Current Account
        3. India’s Capital Account
        4. Overall Balance of Payment
    3. India’s Foreign Exchange Rate System
      1. Types of Exchange Rate System
    4. Evolution of Indian Exchange Rate System
      1. Phase I: The Par value System (1947–1971)
      2. Phase II: The Pegged Regime (1971–1992)
      3. Phase III: Post-Reform Period (1991 Onward)
        1. Liberalized Exchange Rate Management System (1992–93)
        2. Managed Float System (1993 Onward)
    5. Foreign Exchange Reserves and Its Management
      1. Objectives of Holding Foreign Exchange Reserves
        1. What Should be Ideal Size of FERs?
      2. The Indian Case
      3. What Is RBI Doing With Its Foreign Exchange Reserves?
    6. Foreign Direct Investment
      1. Types of FDI
        1. Greenfield FDI
        2. Brownfield FDI
        3. Joint Venture
      2. Routes of FDI in India
        1. Automatic Route of RBI
        2. Government Route
      3. Characteristic Features of FDI in India
      4. Advantages of Foreign Direct Investment
        1. FDI Fills the Three Gaps
        2. FDI and the Technology Transfer
        3. Efficiency-Seeking FDI
        4. FDI Leads to Human Capital Enrichment
        5. FDI and Competition Enhancement
        6. FDI Ensures Consumer Sovereignty
      5. Disadvantages of Foreign Direct Investment
        1. The March of Oligopolies
        2. Capturing the Host Country’s Market
        3. The Question of Access to Technology
        4. The Threat to Sovereignty
    7. Capital Account Convertibility
      1. Case for Capital Account Convertibility
      2. Case Against Capital Account Convertibility
      3. India’s Approach Toward Capital Account Convertibility
    8. Summary
    9. Multiple-choice Questions
    10. Endnotes
  32. Chapter 20: WTO, International Economic Institutions and Regional Trade Blocks
    1. Introduction
    2. World Trade Organization
      1. Difference Between GATT and WTO
      2. Functions of WTO
    3. The WTO Agreements
      1. General Agreement on Tariff and Trade
      2. Agreement on Agriculture
        1. The Case for AOA
        2. The Case Against AOA
      3. Trade-Related Aspects of Intellectual Property Rights System (TRIPS)
        1. Case for TRIPS
        2. Case Against TRIPS
      4. General Agreement on Trade in Services (GATS)
        1. Case for GATS
        2. Case Against GATS
      5. Standard and Safety
      6. Agreement on Textile and Clothing (ATC)
      7. Anti-Dumping, Countervailing Duties, and Safeguards
      8. Non-Tariff Barriers (NTBs)
      9. Trade-Related Investment Measures
      10. Plurilateral Agreements
      11. Trade Policy Review Mechanism
    4. International Monetary Fund
      1. Functions of IMF
      2. India’s Economic Relationships with IMF
    5. World Bank Group
      1. India and Its Relationship with World Bank
    6. Regional Trade Blocs
      1. Pre-requisites of a Successful Regional Trade Block
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  33. Chapter 21: Indian Monetary System: Banking, RBI, and Money Market
    1. Introduction
    2. Evolution of Indian Banking
      1. Phase I (1786–1947): The Colonial Period
      2. Phase II (1947–1991): The Period of Nationalization and Social Control
      3. Phase III (1991 Onward): The Period of Banking Sector Reforms
    3. Structure of Commercial Banking in India
      1. State Bank of India
      2. Nationalized Banks
      3. Private Sector Banks
      4. Foreign Banks
      5. Regional Rural Banks
      6. Local Area Banks
      7. Small Finance Banks
      8. Payment Banks
      9. Cooperative Banking
        1. Urban Cooperative Banks (UCBs)
    4. Non-Performing Assets of Commercial Banks in India
      1. Causes of NPAs During Recent Years
      2. Recent Steps taken by Government to Resolve Problem of NPAs
    5. Banking Sector Reforms
    6. Reserve Bank of India
      1. Functions of RBI
        1. Currency Issuing Authority
        2. Banker and Debt Manager to the Government
        3. Formulation of Monetary Policy
        4. Regulatory and Supervisory Functions
        5. Banker to Banks
        6. Foreign Exchange and Reserve Management
        7. Developmental and Promotional Functions
    7. Monetary and Liquidity Aggregates
    8. Monetary Policy
      1. Objectives of Monetary Policy
      2. Analytics of Monetary Policy
      3. Instruments of Monetary Policy
        1. Direct Instruments of Monetary Policy
        2. Indirect Instruments of Monetary Policy
      4. Monetary Policy Reforms
        1. Background
        2. Reform Measures
    9. Money Market
      1. Characteristics/Problems of Indian Money Market
      2. Reforms in Money Market
    10. Non-banking Financial Institutions (NBFIs)
    11. Financial Inclusion
    12. Summary
    13. Multiple-choice Questions
    14. Endnotes
  34. Chapter 22: Indian Capital Market
    1. Introduction
    2. Structure of Capital Market in India
      1. Security Market
        1. Gilt-Edged Market
        2. Corporate Security Market
    3. Stock Exchanges in India
    4. Development Financial Institutions
      1. All India Development Financial Institutions
      2. Specialized Financial Institutions
      3. Investment Institutions
      4. Refinance Institutions
      5. State-Level Institutions
    5. Evolution and Growth of Indian Capital Market
      1. Phase 1 (1947–1973): The Period of Institution-Building and Legal Framework
      2. Phase 2 (1973–1980): The Period of Foreign Exchange Regulation
      3. Phase 3 (1980–1992): The Broadening and Deepening of Capital Market
      4. Phase 4 (1992 to Till Date): The Phase of Turbulence and Reforms
    6. Capital Market Reforms in India
      1. Establishment of SEBI
      2. Strengthening the Government Security Market
      3. Establishing the National Security Clearing Corporation Ltd
      4. Reforms in the Bombay Stock Exchange
      5. Exit of De-recognized/Non-Operational Stock Exchanges
      6. Establishment of NSE
      7. Development of Corporate Bond Market
    7. Securities and Exchange Board of India
    8. Summary
    9. Multiple-choice Questions
    10. Endnotes
  35. Chapter 23: Inflation in India
    1. Introduction
    2. Inflation and Its Types
    3. Wholesale Price Index
    4. Consumer Price Index
    5. Causes of Inflation
      1. Demand-Pull Inflation
        1. Higher Fiscal Expansion
        2. Higher GDP Growth and Sticky Core Inflation
        3. Income Effect
        4. Black Money
        5. Increase in Population
      2. Supply-Shock or Cost-Push Inflation
        1. Rise in Wages
        2. Increase in Prices of Basic Materials
        3. Rise in Administered Prices
        4. Rise in International Prices
        5. Other Causes
    6. Consequences of Inflation in India
      1. Impact on Balance of Payments
      2. Impact on Common Man
      3. Impact on Investment and GDP
      4. Inequality
    7. Measures to Control Inflation in India
      1. Fiscal/Trade Measures
      2. Administrative Measures
      3. Monetary Measures
        1. Inflation Targeting in India: A Paradigm Shift in Monetary Policy Framework
        2. Significance of Inflation Targeting
    8. Summary
    9. Multiple-choice Questions
    10. Endnotes
  36. Chapter 24: Indian Tax System
    1. Introduction
    2. Importance/Objectives of Taxation in India
    3. Classification of Taxes
      1. Single and Multiple Taxes
      2. Direct and Indirect Taxes
      3. Progressive, Regressive and Proportional Taxes
      4. Ad Valorem Versus Specific Tax
      5. Central Versus State Taxes
    4. India’s Direct Taxes
      1. Income Tax
      2. Corporation Tax
      3. Minimum Alternate Tax (MAT)
      4. Gift Tax
      5. Securities Transaction Tax
      6. Long-Term Capital Gains Tax
    5. India’s Indirect Taxes
      1. Custom Duty
      2. Goods and Services Tax
        1. Characteristics of GST
        2. Advantages of GST
        3. Disadvantages of GST
    6. An Assessment of Indian Tax System
      1. Elasticity in Indian Tax System
      2. Buoyancy in Indian Tax System
      3. Emergence of Progressive Tax Regime
      4. Agriculture Income Tax Is Exempted
      5. Tax Evasion
      6. Simplicity and Certainty
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  37. Chapter 25: Public Expenditure, Debt Management, and Fiscal Policy
    1. Introduction
    2. India’s Budget and Its Components
    3. Indian Public Expenditure
      1. Capital Expenditure and Revenue Expenditure
      2. Developmental and Non-developmental Expenditure
      3. Plan and Non-plan Expenditure
      4. Causes of Increase in Public Expenditure in India
        1. Increase in GDP
        2. Size of the Country and Population
        3. Urbanization
        4. Defense
        5. Interest Payments
        6. Subsidies
    4. Subsidies in India
      1. Kinds of Subsidies
      2. Standard Classification of Subsidies
      3. Central Government Subsidies
      4. Critical Evaluation of Subsidies
        1. Merit Goods Subsidy Versus Demerit Goods Subsidy
        2. Subsidies and Inefficiencies
        3. Mounting Subsidy Burden
        4. Perverse Subsidies
        5. Implicit/Hidden Subsidies
    5. Public Debt in India
      1. Internal Debt
        1. Marketable Securities
        2. Non-Marketable Securities
      2. External Debt
      3. Public Account Liabilities
      4. Causes of Public Debt
      5. Burden of Public Debt
      6. Is India’s Public Debt Sustainable?
      7. Public Debt Management
    6. Fiscal Policy
      1. Objectives of Fiscal Policy in India
        1. Promoting Economic Growth
        2. Maintaining Price Stability in the Economy
        3. Mobilization of Resources
        4. Allocating Efficiency
        5. Reducing Inequality in Income and Wealth
        6. Promoting Private Sector Investment
      2. Fiscal Responsibility and Budget Management Act
        1. N.K. Singh Committee on FRBM
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  38. Chapter 26: Center–State Financial Relations in India
    1. Introduction
    2. Fiscal Federalism and its Principles
    3. Finance Commission
    4. Important Concepts and Definitions Related to Center–State Financial Relations
      1. Tax Devolution
      2. Divisible Pool
      3. Grants-in-aid
      4. Revenue Deficit
      5. Disaster Relief
      6. Local Bodies
      7. Sector-specific Grants
      8. State-specific Grants
      9. Fiscal Capacity
      10. Income Distance
      11. Fiscal Discipline
      12. Special Category States (SCS) and General Category States (GCS)
      13. Gadgil-Mukherjee Formula
      14. State Fiscal Commission
    5. Fourteenth Finance Commission and Its Evaluation
    6. Fifteenth Finance Commission
    7. Fifteenth Finance Commission Recommendations
      1. Recommendations given by the Fifteenth FC Report for 2021–26 period
    8. Critical Assessment of Center–state Financial Relations
      1. Points in Favor
        1. Balancing Fiscal Autonomy and Fiscal Space
        2. Balanced Regional Development
      2. Points in Disfavor
        1. Vertical and Horizontal Fiscal Imbalances
        2. Increasing Recourse to Cess and Surcharge
        3. Decentralization Issues
        4. The Question of State Autonomy
    9. Summary
    10. Multiple-choice Questions
    11. Endnotes
  39. Chapter 27: Planning in India
    1. Introduction
    2. Planning Efforts in Pre-independence India
    3. Planning in Independent India
    4. Critical Assessment of India’s Five-Year Plans
      1. Planning and Growth
      2. Planning and Self-reliance
      3. Planning and Employment Generation
      4. Planning and Inequality
      5. Planning and Poverty Removal
      6. Planning and Productivity
    5. NITI Aayog
      1. Functions of NITI Aayog
      2. Transition from Planning Commission to NITI Aayog
      3. The case for NITI Aayog
      4. The case against NITI Aayog
    6. Strategy for New India @75
      1. Drivers
      2. Infrastructure
      3. Inclusion
      4. Governance
    7. Summary
    8. Multiple-choice Questions
    9. Endnotes
  40. Chapter 28: Black Money and Demonetization
    1. Introduction
    2. What Is Actually Black Money?
    3. Causes of Black Money
      1. Non-Compliance of Taxes
      2. Money Laundering
      3. Political Funding
      4. Controls on Economic Activity
      5. Illicit Money Transferred Outside
      6. Standards of Public Morality
      7. Inflation
      8. Investment in Real Estate
    4. Estimation of the Size of Black Money in India
      1. Size of Black Money in India
      2. Size of Black Money Outside India
    5. Impact of Black money
    6. Government Policies to Curb Black Money
      1. Volunteer Disclosure Scheme (VDS)
      2. Prevention of Money Laundering Act
      3. Right to Information Act
      4. Tax Reforms
      5. Demonetization
    7. Demonetization in India
      1. Objectives of Demonetization
      2. The case for Demonetization
        1. Towards a Tax Compliant Economy
        2. Digitalization of Economy
        3. Cleansing of Real Estate
        4. Impact on GDP
    8. The case against Demonetization
      1. Demonetization Affected the Common Man
      2. The Question on Impact on Black Money
      3. Effect on Informal Sector
    9. Summary
    10. Multiple-choice Questions
    11. Endnotes
  41. Chapter 29: Economic Reforms in India
    1. Introduction
    2. The Economic Crisis of 1990s
    3. Economic Reforms in India
      1. Macroeconomic Stabilization
        1. Fiscal Policy Reforms
        2. Tax Reforms
        3. Balance of Payment Reforms
        4. Monetary Policy Reforms
        5. Control of Inflation
      2. Structural Adjustment Reforms
        1. Industrial Policy Reforms
        2. Financial Sector Reforms
        3. Agriculture Sector Reforms
        4. Infrastructure Sector Reforms
    4. Impact of Economic Reforms on Indian Economy
      1. Case for Economic Reforms
        1. The Growth Turnaround
        2. Industrial and Service Sector Performance
        3. Attitude Toward Reforms
      2. Case Against Economic Reforms
        1. Impact on Poverty and Inequality
        2. Jobless Growth
        3. Structural Bottlenecks
    5. Summary
    6. Multiple-choice Questions
    7. Endnotes
  42. Chapter 30: Economic Survey 2021–22 and Budget 2022–23
    1. Introduction
    2. Economic Survey 2021–22 (1/4)
    3. Economic Survey 2021–22 (2/4)
    4. Economic Survey 2021–22 (3/4)
    5. Economic Survey 2021–22 (4/4)
    6. Union Budget 2022–23 (1/2)
    7. Union Budget 2022–23 (2/2)
    8. Endnotes
  43. Answer Keys
  44. Glossary (1/5)
  45. Glossary (2/5)
  46. Glossary (3/5)
  47. Glossary (4/5)
  48. Glossary (5/5)
  49. Index (1/6)
  50. Index (2/6)
  51. Index (3/6)
  52. Index (4/6)
  53. Index (5/6)
  54. Index (6/6)

Product information

  • Title: Indian Economy, 2nd Edition by Pearson
  • Author(s): Madhur M. Mahajan
  • Release date: December 2022
  • Publisher(s): Pearson India
  • ISBN: 9789356065208