-

by

MANISH DUA
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Brand Manish Dua

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 Questions for CA-CPT (Economics)

CHAPTER 1

CHAPTER 1

1. The words Economics have been derived from Greek word Oikonomia.

2. Oikonomia means household.

3. Adam Smith define economics in 1776 as “Enquiry into the nature about causes of

wealth”.

4. J.B. Say said “Economics is branch of knowledge which deals wealth.”

5. According to Alfred Marshall, “Economics is the study of mankind in the ordinary

business of life in which we study that part of individual and social action which are
most close connected to Material Welfare.

6. Marshall and A.C. Pigou were welfare economists.

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7. Robbins defined economics as science of scarcity.

8. Robbins said Economics is neutral between ends.

9. Robbins said Economics is positive science.

10. Robbins defined Economic as science of choice making.

11. What to produce, how to produce and for whom to produce are the 3 economic problems
which arises due to scarcity of resources.

12. Positive science explains “cause & effect” relationship.

13. Normative science explains “What ought to be” or “What ought not to be”

the relationship.

14. In inductive method reason proceeds from particular to general.

15. In deductive method reason proceeds from general to particular.

16. PPC is also known as Production Possibility Frontier and Transformation curve.

17. Combination lying on or inside the PPC are attainable but combination lying outside
the PPC are unattainable.

18. PPC is concave to the origin due to increasingly marginal opportunity cost.

19. Increase in resource, technology will shift the PPC rightward.

20. Movement from inside PPC to the PPC shows reduction in unemployment. It does not
shift the PPC.

21. In socialist, controlled or command economy resources are owned by public but
controlled by govt. In such economy, economic decision are taken by planning authority.

22. In capitalist, or free economy resources are owned by private sector and economic
decision are taken by forces of market demand and supply curve.

23. In mixed economy Dual Price System exist.

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24. According to Jacob Viner, “Economics is what economist do”

25. Inequalities of income is the disadvantage capitalist economy.

26. Micro economic theory deals with allocation of resources it is also known as Price

Theory.

CHAPTER 2
CHAPTER

27. Demand is a flow concept. It differ from desire.

28. Substitute goods are also known as alternative goods. Substitution effect is positive
i.e. increase in price of one substitute results in increase in demand of other substitute
goods.

29. Demand for complementary goods is also known as Tied and Joint demand.

30. Income effect of normal good is positive and of inferior goods is negative.

31. Size of population distribution of income effect market demand.

32. Law of demand is qualitative statement.

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33. Giffen goods paradox was given by Sir Robert Giffen.

34. He explain behaviour of two goods Bread and Meat.

35. Giffen goods exhibit positive price effect and their demand curve is upward sloping.

36. Goods demanded not because of their intrinsic worth but because of the prestige
attached to them is called Veblen effect.

37. Diamonds, rare paintings are called Veblen goods.

38. Change in quantity demanded is due to change in price.

39. Change in demand is due to change in factors like, Income, Price of related goods,
Taste & Pref.

40. Change in quantity demand is shown by movement along with demand curve.

41. Change in demand is shown by shift in demand curve.

42. Price elasticity measures degree change in demand due to change in price of the
commodity.

43. The value of price elasticity ranges from 0 to ∞.

44. Point method measures elasticity of demand for very minute change in price.

45. Arc method is used to measure elasticity of demand between two points of demand curve.

46. Where the demand curve touches price axis, εd = ∞.

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47. Where the demand curve touches quantity axis εd = 0.

48. Moving down the demand curve elasticity decreases.

49. In the mid of the straight line demand curve εd = 1.

50. Higher price, higher εd and lower price, lower εd.

51. Perfectly inelastic demand curve is vertical to x-axis.

52. Perfectly elastic is horizontal to x-axis.

53. No commodity have perfectly inelastic demand not even salt. Salt have almost inelastic
demand.

54. Cross elasticity measures degree change in demand due to change in price of related
goods.

55. The value of cross elasticity if positive then two good are substitute goods.

56. The value of cross elasticity is negative then two goods are complementary goods.

57. In case of value of cross elasticity is zero then two goods are unrelated.

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58. Monopoly have zero cross elasticity.

59. Perfect substitutes have infinite cross elasticity.

60. Monopolistic competition have very high cross elasticity.

61. When the demand is elastic increase in price will results in decrease in total
expenditure.

62. When demand is inelastic increase in price will results in increase in total expenditure.

63. When demand is unitry elastic, and change in price brings no change in total
expenditure.

64. Unity elastic demand curve have rectangular hyperbola.

65. Derived demand is the demand of inputs which arised due to demand of final goods.

66. When we demand shirt, manufacturer demands cloths thus cloth is derived demand.

67. Marshall has given cardinal approach.

68. According to cardinal approach, utility derived from a commodity can be measured.

69. Constant marginal utility of money is assumed constant.

70. When marginal utility is positive, the total utility keep on rising.

71. When marginal utility is zero, total utility is maximum.

72. When marginal utility is negative, total utility starts falling.

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58. Monopoly have zero cross elasticity.
73. Area lying below the marginal utility curve is total utility.

74. Consumer equilibrium is the point where

Utility derived = Utility sacrificed in terms of price

Marginal utility = Px.MUm

75. Consumer surplus was given by Alfred Marshall.

76. Consumer surplus is the difference between what the consumer is willing to pay and
what be actual pays.

77. Consumer surplus is maximum in case of necessities and minimum in case of luxuries.

78. Consumer surplus is the area lying below demand curve and above price line.

79. For explaining consumer surplus Marshall used concept of perfect competition.

80. Water-Diamond paradox is explained by Law of Scarcity.

81. In case of 1st degree price discrimination, consumer surplus is zero.

82. Indifference curve provides same level of satisfaction. It is also know as Iso-Utility Curve.

84. Ordinal approach was given by J.R. Hick and Allen.

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85. Slope of Indifference Curve = MRS .
xy

86. IC Curve and convex to origin because MRS is diminishing.

xy

87. When MRS = 0, the Indifference Curve is L-shaped, this is the case of perfect
xy

complementary.

88. In case of perfect substitute MRS =1 & constant and IC curve is straight line.
xy

89. Higher IC curve provides higher level of satisfaction, IC do not cut each other.

90. IC curve do not touch the axis.

91. In the left hand above corner of IC curve MRS xy is very high.

92. In the right hand below corner of IC curve MRS is very low.
xy

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93. Budget line represents various combination of 2 goods X & Y which consumer can
purchase out of given income.

94. Combination lying on or inside the budget line are attainable but the combination
lying inside the budget line are unattainable.

95. Slope of budge line = .

96. In case consumer purchases commodity, X only, then budget line merged with X-axis.

97. In case consumer purchases commodity Y only then budget line will merged with Y-
axis.

98. Consumer equilibrium condition by IC,

i) MRS xy = Px/Py

ii) At equilibrium, IC curve must be convex to origin.

99. Supply is flow concept.

100. Change in quantity supplied is due to change in price of the commodity.

101. Change in supply is due to change in technology, Increase in number supplier, change
in price of related good, change in government policy.

102. Elasticity of supply measures degree change in supply due to change in price. ER 3

CHAPTER 3

103. Production function explains relationship between Input and Output.

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104. In short Run production is function of variable factors.

105. In long Run production is function of fixed and variable factors.

106. Short Run is too short the time period when at least one factor is fixed.

107. Long Run is too long the time period when all the factors are variable.

108. In very short period supply is fixed.

109. Perishable goods have perfectly inelastic supply.

110. Very large period is also called as secular period.

111. Very short period price is also known as market period price.

112. Long period price is Normal price.

113. Normal price is always less than market period price.

114. Alfred Marshall explained the impact of time element on price and output.

115. In the law of variable proportion, the technology remains constant.

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116. In the law of variable proportion the proportion between fixed and variable factor
keeps on changing.

117. Out of MP, AP & TP , MP reaches at its maximum point at first and TP at last.

118. Out of MP, AP &TP, MP starts falling at first and TP at last.

119. When AP is rising, MP is rising as well as falling.

120. When AP = 15 & MP = 20 , We cannot tell whether MP is rising or falling.

121. When AP is maximum, AP = MP.

122. When AP is falling, AP > MP.

123. When AP = 20 & MP = 15, then both MP & AP both are falling.

124. Where MP is maximum corresponding to that point there is point of inflexion on TP

curve.

125. Returns to scale is long run production function, here the inputs are increased in
same proportion.

126. When returns to scale is increasing doubling the inputs results in more than double
the output.

127. When returns to scale is constant, then doubling the inputs results in double the output.

128. When returns to scale is diminishing then doubling the inputs results in less than
double the output.

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129 AP = TP TP = Total product, L = Total labour employed.

130. In the 1st stage of law of variable proportion, TP is increasing with Increasing rate
initially then with diminishing rate.

131. Stage 1st of variable proportion ends where AP is maximum.

132. Stage 2 nd of variable proportion ends where MP is zero and TP is maximum.

133. When the distance between successive isoquant diminishes we call it Increasing returns
to scale.

134. When the distance between successive isoquant diminishes we call it increases returns
to scale.

135. When the distance between successive isoquant remains same we call it constant
returns to scale.

136. Supply of land is Inelastic.

137. According to Riccardo the power of land is undestructible.

138. Supply curve of labour is backward bending.

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139. Labour supply curve is an exception to law of supply.

140. All capital is wealth but all wealth is not capital.

141. Saving, mobilization of saving and investment are the 3-stages of capital formation.

142. Initiating business process, risk bearing and innovation are function of entrepreneur.

143. Concept of innovative Entrepreneurship was given by Schumpeter.

144. Increasing marginal returns is due to

(a) Indivisible fixed factor

(b) Division of labour

(c) Specialisation.

145. Diminishing returns to factor is due to

(a) breaking VP of optimum combination between fixed and variable factor.

(b) Lack of capital.

146. Increasing returns to scale is due to economies of scale.

147. Decreasing returns to scale is due to diseconomies of scale.

148. Law of diminishing returns is applicable to all types of economic activity.

149. Accounting cost is the cost incurred on hired factor of production. It is also known as
explicit cost.
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150. Economic cost is sum of explicit and implicit cost.

151. Accounting profit is always more than economic profit.

152. The pain and discomforts which labour suffer during production process is called as
real cost.

153. Direct cost is known as traceable cost.

154. Implicit cost is the cost which incurred on owned factor of production.

155. Implicit cost is calculated on the basis that what we could have earned if we have
employed our resources some where else.

156. Opportunity cost is the cost of forgone opportunity.

157. Fixed cost is parallel to x-axis.

158. Fixed cost do not depends upon level of output.

159. Variable cost changes with the change in level of output.

160. Variable cost increases with increase in level of output

161. When TVC increases with diminishing rate, The returns to factor was increasing.

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162. When TVC increases with the increasing rate, the returns to factor was diminishing.

163. At zero level of output TC = TFC.

164. TC – TVC = TFC, since TFC remains constant ∴ TC || TVC.

165. Marginal cost changes with change in variable cost.

166. MC = ΔTC & MC = ΔTVC

ΔQ ΔQ

167. AFC curve continues to fall but never touches x-axis.

168. AFC curve is rectangular hyperbola.

169. AFC is convex to origin.

170. AVC is u-shaped cost curve. Initially it diminishes due to increasing return and after

reaching at its maximum point it starts rising because of diminishing returns.

171. AC is also u-shaped cost curve.

172. The difference between AC & AVC keeps on falling because AFC continues to fall. But
these two curves never touches x-axis as AFC never becomes zero.

173. Out of MC, AC &AVC , MC reaches at its minimum point at first then AVC and then

AC.

174. Initially MC and AC both are falling but falling rate of MC > AC.

175. At minimum point of AC , AC = MC.

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162. When TVC increases with the increasing rate, the returns to factor was diminishing.
176. MC = 20, AC = 15, both MC & AC are rising.

177. MC = 15, AC = 20, Impossible to tell whether MC is falling or rising.

178. Long run Avg. cost curve is also known as planning curve and envelop curve.

179. Output at minimum point of LAC is efficient output.

180. Negatively sloped part of LAC is due to economies of scale.

181. Positively sloped part of LAC is because of diseconomies of scale.

182. Only one short run Average cost curve (SAC) is tangent to long run average cost curve

(LAC) at its minimum point.

183. At minimum point of LAC , LAC = SAC = SMC = LMC.

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 CHAPTER 4

Ed MR

Ed < 1 - ve
184.

Ed = 1 0

Ed > 1 + ve

185.

186. The slope of MR is double the AR.

187. Slope of AR is ½ of MR.

188. MR divide distance between AR & y-axis in two equal parts.

189. In perfect market TR is upward sloping straight line. ∴ when output is double the TR

will also double.

190. In perfect market AR = MR = P.

191. In imperfect market, AR and MR are downward sloping.

192. MRn = TRn – TRn – 1

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 CHAPTER 4
193. In perfect market , number of seller are very large ∴ one firm cannot influence the price.

194. In perfect market , firm sells homogeneous product ∴ cross elasticity is infinity.

195. In perfect market, firm produces efficient output.

196. In perfect market there exists no excess capacity.

197. The demand curve of perfect competitive firm is horizontal.

198. In perfect market the firms earns, super normal profit, normal profit or may suffer
the loss in short run.

199. In long run the competitive firms only normal profit because entry is free.

200. In monopoly, the distinction between firm and industry disappears.

201. The monopoly firm is price marker.

202. The competitive firm is price taker.

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203. In monopoly the demand curve is downward sloping.

204. In monopoly there exists no substitutes ∴ demand curve is inelastic.

205. In monopoly the firm experience super normal profit even in the long run ∴ the entry

is restricted.

206. Soap, Shampoo and Toothpaste industry is example of monopolistic competition.

207. In monopolistic competition the firms produces differentiated products.

208. Product differentiation is the characteristics of monopolistic competition

209. In monopolistic competition the cross elasticity is very high.

210. In monopolistic competition there exist excess capacity.

211. In monopolistic competition the firm earns normal profit in the long run because
entry and exit is free.

212. Long run outcome of monopolistic competition is similar to that of perfect competition
i.e. normal profit because in both market entry is free.

213. The pr i m e dif f erenc e of per f ec t and mono poli sti c c o mpe titio n is of product
differentiation.

214. In short run the firm continue to produce even in situation of loss as long as .

215. In short run the firm leave market when AR < AVC.

216. In long run the firm leaves market when AR < AC.

217. When MR > MC, the firm continue to produce.

218. When MR = MC, the firm produces equilibrium output.

219. When MR = MC, the firm produces profit maximizing output.

220. MC should cut MR from below this is sufficient condition of equilibrium.

221. When MR < MC, the firm does not produce.

222. Difference between Price and MC is the indicator of monopoly power.

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203. In monopoly the demand curve is downward sloping.

223. Higher the elasticity, lower is the difference between price and marginal cost therefore
lower is monopoly power.

224. Bread, butter, eggs market is local market.

225. Semi-durable goods market is regional market.

226. Durable goods market is national market.

227. Gold, silver market is international market.

228. Where delivery of goods takes place on the spot the market is called spot market.

229. Where delivery of goods takes place in future we call it future market.

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230. Stock exchange is regulated market.

231. Organisation of petroleum exporting countries (OPEC) is cartel.

232. Cartel is also known as collusive oligopoly.

233. In pure oligopoly firm produces perfect substitutes.

234. Kinked demand curve was given by Paul M. Sweezy.

235. Kinked demand curve is used to explain price rigidity.

236. In kinked demand curve, the response to decrease in price is more than increase in
price.

237. Cartel is also called syndicated oligopoly.

238. Price discrimination can be carry out for different use, person and place.

239. There must exists monopoly for carry out price discrimination.

240. There must exists difference in elasticity on two sub-market for carrying out price
discrimination.

241. In 1st degree price discrimination the consumer surplus is zero.

242. In 2nd degree price discrimination the firm charges different price for different quantity
purchased.

243. In 3rd degree price discrimination the firm divide the total market into small sub-
market.

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230. Stock exchange is regulated market.
244. That portion of marginal cost (MC) which lies above AVC is short run supply curve of
perfect competition.

245. In pure competition there exist large no. of firm, free entry and homogeneous product.

246. Agricultural goods market is closer to perfect competition.

247. Increase in supply with demand remaining constant results in decrease in price.

248. Equilibrium price is determined where demand is equal to supply.

249. Globalization has made Indian market as buyer market.

250. Average revenue curve is also known as demand curve.

251. Oligopoly firm do not enter in price competition they carry out non-price competition.

252. Perfect competition is ideal market.TE:ACRO

CHAPTER 5 MACRO

253. An economy is said to be underdeveloped where agriculture main occupation, poverty

is widespread, population growth rate is more than 2% etc.

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254. In India the number of people dependent upon agriculture has decreased in relative
sense but increased in Absolute sense.

255. National Sample Survey Organisation (NSSO) measures poverty in every 5years.

256. 22% of Indian population is still below poverty line during (2015-16).

257. India’s per capital income is 1600$ in 2016.

258. UNDP measure Human Development Index (HDI).

259. Longivity, knowledge and standard of living are three indicators of HDI.

260. HDI rank of India is 131/188 in 2016.

261. HDI index is .624 in 2016.

262. Inequalities of Income is measured by Gini Index.

263. The value of Gini Index ranges from 0 to 1.

264. Gini Index of 0 shows perfect eqvalities of Income.

265. Gini Index of 1 showss perfect Inequalities.

266. India’s Gini Index is .334 in 2011-12 earlier it was .368 (2010-11).

267. India Gini Index is less than other developed nation.

268. India’s National Income Increases 18 times but percaptita National Income Increases
only 5 times.

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269. Irrigation facilities has increased to 6 3 mn. hact land.

270. Primary school has been quaderupled.

271. Literacy ratio is 73% 2016.

272. Occupational Structure

Primary 46% (15-16)
Secondary 2 2 % (15-16)
Teritary 32% (15-16)

273. Share in GDP

Primary 15% (16-17)

Secondary 31% (16-17)
Teritary 54% (16-17)

274. Share of agriculture in total export is 10% and Import 4.5%.

275. Production of food grain in 2016-17 was 252.2 mn ton.

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276. Share of commercial crop like sugarcane, cotton and oilseeds is increasing.

277. Green revolution was started in 1966.

278. Green revolution is also known as wheat revolution.

279. Land reform consist of

(a) Abolition of intermediaries

(b) Tenancy reforms

(c) Reorganisation of land holding

280. According to rent regulation act the rent is 25 to 50% of gross produce.

281. Land ceiling is on 18 acre wet land or 54 acre unirrugated land.

282. Regional Rural Bank (RRB) was established in 1975.

283. National Bank for Agriculture and rural development (NABARD) was established in

1982.

284. NABARD is apex bank for Agriculture sector.

285. RRB was established for help of farmers & villagers.

286. Industrial development and per capital income are +vely correlated.

286. USA’s per capital income is 5 6 1 1 5 $.

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288. 2nd F.Y.P stressed on development of Basic and capital good.

289. Mahalnobis model is connected with basic and capital goods.

Basic Goods Capital Good

290.

Iron & Steel Rail road

CEMENT MACHINE

FERTILIZERS MACHINE TOOLS

291. Durgapur, Rourkele and Bihlai Iron & Steel plant were made in 2nd F.Y.P.

292. In the 1st F.Y.P we have 5 PSU with total investment of 30 crore and now we have 277

PSU with investment of 8 ,50,000 crore.

293. In the planning period the industrial growth was uneven.

294. 1965-80 is known as period of deceleration & Retrogression.

295. III F.Y.P had registered highest growth rate of 9%.

296. In Xth F.Y.P the target growth rate was 10% but actual growth rate was 8.7%.

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297. XIth F.Y.P target the growth rate of 10%. but actual growth rate was 7.4%.

B. XIIth F.Y.P target the growth rate of 9.06%.

298. Our Industries are under utilized, the maximum capacity utilization is 50 to 60%.

299. Our Industries have increment capital output ratio, In 1 F.Y.P it was 2.95, in 7 th F.Y.P

it was 3.9 in 8th & 9th F.Y.p it was 4.

300. 50% of factories are situated in Gujarat, Maharastra, West Bengal and Tamil Nadu.

301 . Sick units are those which a ) a n y o f t h e b o r r o w a l a c c o u n t o f t h e e n t e r p r i s e r e m a i n s N P A .

f o r t h r e e m on t h s o r m o r e, o r , b ) t h er e i s e r os i on d u e t o a c c u m u la t ed l os s es t o t h e e xt en t

o f 5 0 % o f i t s n et wo r t h d u ri n g t h e p r e vi ou s a c c ou n t i n g yea r .

302. 2.50 lakh units are sick in India. Out of which 90% are small and medium scale units.

303. Service sector share 1/3rd of total export.

304. India’s share in the total world service export is 3 . 3 %.

305. In the list of exporter India rank 12th.

306. India has 3rd largest scienctific and technical manpower.

307. Direct Tax are progressive in nature.

308. Indirect Tax are regressive in nature.

309. Burden of Direct Tax can’t be shifted and burden of Indirect Tax can be shifted.

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297. XIth F.Y.P target the growth rate of 10%. but actual growth rate was 7.4%.
310. Incidence of tax lies on the person who ultimately bears the burden of Tax.

311. Income Tax, corporate tax, capital gain tax, and gift tax are direct tax.

312. Custom duty, Excise duty, VAT Service tax are indirect tax.

Tax Introduced Abolished Re-introduce

Income tax 1860 1873 1886
Estate Duty 1953 1985 –
Wealth Tax 1957 April 2016 --
Gift Tax 1958 1998 2005
Service Tax 1994-95 – –
VAT 1999 Implemented in 2005 Now it is part of
GST
Modvat 1986-87 2000-01 --
Cenvat 2000-01 - -

314. Ad-volrem Tax is tax on certain % of price.

315. Tax collection is 2 3 0 0 0 0 0 C R i n 2 0 1 5 - 1 6 .

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316. Direct : Indirect tax ratio

38.5 : 6 1 . 5 ( 2 0 1 5- 1 2 )

317 Agriculture tax is exempt from tax

318 GST is applicable on supply of goods & services rather than manufacture or sales of goods & services.

319 MODVAT:- Modified value added Tax.

320 CENVAT:- Centralised Value added tax.

321 MODVAT was introduced in 1986-87.

322. CENVAT was successor of MODVAT.

323. CENVAT was introduced in 2000-01.

324. Basic duty is 16%.

325. Excise is tax on production.

326. Custom Duty is tax on export and import.

327. In pre-reform time custom duty was 125% but in post reform time it reduced to 10%.

328. National Income is equal to Net National Product at factor cost (NNPFC).

329. Market price - ( Net Indirect Tax) = Factor Cost.

330. Gross - ( Depreciation) = Net

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316. Direct : Indirect tax ratio
331. Domestic + (NFIA) = National

332. GDP > GNP if NFIA is -ve

GDP = GNP if NFIA is zero

GDP < GNP if NFIA is +ve

333. Indian Economy is divided into 3 sectors primary, secondary and tertiary.

334. Primary sector is divided into Agriculture, Animal Husbandry Fishery, Forestry,
Minning and Querring.

335. We use production method for entire primary sector and Registered manufacturing.

336 For construction sector we use expenditure method.

337. Production method is also known as industry origin method.

338. Personal Income-Personal Taxes = Personal Disposal Income.

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339. Private Income- corparte saving and taxes = Personal Income.

340. Transfer is not the part of National Income.

341. Mixed Income is the income of self-employed people.

342. Final goods are demanded by both household and govt.

343. Intermediate goods are demanded by all producing units.

344. National Income is calculated by Central Statistical Organization (CSO).

345. Chellian Raja and Bhoot lingam committee were set up for tax reform.

CHAPTER 6

346. India’s population

01 102.7 cr
10 117 cr
11 121 cr
2016 128 cr

347. India population every year ↑es equal to the population of Australia.

348. India is 2.4% of world’s area.

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339. Private Income- corparte saving and taxes = Personal Income.

349. India accommodates 17.5% of world’s population.

350. India share only 1.2% of world’s income.

351. Every 6th person is an Indian.

352. Every 3rd person is Chiense.

353. Birth rate - Death rate = Population growth rate.

354. India’s birth rate is declining.

355. In 1st state of demographic transition BR & DR both are very high.

356. Upto 1920 India was in stage 1.

357. In 1921, India entered into 2nd state of demographic transition.

358. 1921, is known as year of great divide.

359. India is in II stage of demographic transition.

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360. In III stage of demographic transition BR & DR both falls.

361. Birth rate = 1 9 .6 (2015-16)

362. Death rate = 7.3% (2015-16)

363. Density of population = 382 person / square km

364. Literacy ration - % of literate in total population. 73%

365. Sex ratio = 943 per thousand boys

366.

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 Literacy ratio Kerala (92%) Bihar 5 3%
Sex ratio Kerala 1084/1000 boys Haryana 879 girls/1000 boys
IMR MP Kerala
MMR MP Kerala
360. In III stage of demographic transition BR & DR both falls.
IMR = = Death of Children in age group of 0-1 year per thousand

Material mortality rate – ( MMR) = Death of mother during pregnancy

367. Among Union Territory Delhi has highest density of population 11297 (2012).

Ratio 01 16
368. Sex ratio 933 943
Literacy 63% 73%
Life exp. 64.4 yrs 66.1

369. New national population policy was made in 1976.

370. New population policy 2000.

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371.
Plan IMR MMR
IX 30/100 1/1000
X 43/1000 2/1000
XI 28/1000 1/1000

372. IMR in recent time is still very high (40/1000) .

373. MMR is also very till now. It is 1 .67/100.

POVERTY

374. Poverty is measured in 2 tems Abolute and Relative term.

375. In India we use Absolute Poverty Measures.

376. Relative sense is used for developed nation.

377. Cut off for poverty line

Rural Area Urban Area

2400 calaries per day 2100 calaries per day
378. Gini cofficient is used for measuring poverty is relative sense.

379. National Sample Survey Organisation (NSSO) measures poverty in every 5 years.

380. Year Poverty Ratio

93-94 36%
25
99-00 26%
15-16 21.9%
371.

381. ACC.to UNDP Report 54% Indians are multi dimensionally poor.

No. of day Family exp. 15-16

382. Mixed recall period 365 days on 5 non food items (Cloths, 21.9%

footwear, health, education

durables
Uniform recall
(MRP method) 30 days on food items 27.5%
Period (URP
method)

383. Pradhan Mantri Gram Sadak Yojna (PMGSY) was started to connect villages with all
weather roads.

B. Pradhan Mantri Bharat Jodo Priyojna was started to connect metro cities with four

lane.

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384. Swarn Jayanti Gram Swarojgar Yojna (SGSY) started to help poor peoples in villages
by opening micro enterprises. (JRY + EAS = SGRY → NREGA)

385. Jawahar Rojgar Yojna + Employment Assurance Scheme = SGRY later on merged
with MNGEGA.

386. Mahatma Gandhi National Rural Employment Guarantee Act was started to provide

100 days employment to rural poor.

387. SJSRY = Swarn Jayanti Shari Rojgar Yojna. (NRY + UBSP = SGSRY → NULM)

UNEMPLOYMENT

388. Every 6th person of world is an Indian and every 3rd poor person in the world is also an

India.

389. Frictional unemployment is arised due to change in job.

390. In India most of the unemployment is structural.

391. In Xth plan around 70 mn people were unemployed.

392. Unemployment rate is 5 . 6 %. In 68th NSSO Round.

393. If a person is unemployed for round the year he is said to be unemployed on usual
status.

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394. If a person had not worked even for a day during a week is said to be unemployed on
weekly basis.

395. If a person had worked for 1 hr. or more is said to be worked for ½ of the day and if he
worked for 4 hrs. or more during the day is said to employed for whole day.

396. CDS is realistic measure.

397. Unemployment order.CDS > CWS > VS

398. Employment orderUS > CWS > CDS

INFRASTRUCTURAL CHALLANGES

399. Requirement energy and eco. development are +vely correlated.

400. 3% rise in industrial development is accompompained with 2% rise in requirement of

energy.

401. India is 4 th largest energy producer and 5 th largest consumer.

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402. 22% of our energy requirement is fulfilled from non-comm. source.

403. Coal, Oil & gas are both primary and final energy source.

404. Electricity is only final energy source.

405. Industry is main consumer of our energy.

406. Electricity generated from coal, oil & gas is called as Thermal energy.

407. Our energy installed capacity has increased from 2300 MW to 3 ,19,000 MW.

408. In the term of generation thermal is the most efficient source.

409. In Delhi electricity was privatised in 2002.

410. Rajiv Gandhi Grameen Vidhyutikarn Programme was started to provide electricity
to villages now it is replaced by Deendayal Upadhaya Gram Jyoti Yojna

411. 35% of total import is of Petrol, Oil and Lubricants.

412. Transmission and distribution loss is very high i.e.,around 20%.

413. Plant Load Factor (PLF) measures operational efficiency of Thermal Power Plant.

414. Sourthern region has highest PLF of 82% and Eastern region has lowest of 62%.

415. Among Central, SEB and private sector,Central highest PLF(65) and SEB has lowest

PLF(54) and private has 56 PLF.

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416. Railways largest in Asia and 2 t h largest in World.

417. Route length of railway = 65400 thousand Km.

418. Two segment

Freight : 70% of revenue

Passanger : 30% of revenue

419. Roadways 2nd largest in world.

420. Road length 4.87 mn km.

421. National Highway route length = m o r e t h a n 1 la c Km. It handles 40% total road traffic.

422. Airways has 125 airports and 18 international airports.

423. Air India and Indian airlined was amalgamated to form National Aviation Co. Ltd.

424. Name National Aviation Co. Ltd. has been changed to Air India.

425. Our coastal line is 7517 Km having 13 major parts and 200 minor parts.

426. 13 major parts handles 57 of total traffic with Kandla as top traffic handler.

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427. Gross Registered Tonnage (GRT)

428. India rank 20th in the world shipping tonnage.

429. Shipping fleet on March 2013 was 1186 vessels.

430. Postal department was setup in 1837.

431. Postal network is largest in the world.

432. We have 1.55 lakh post office out of which 9 0 % post offices are in rural areas.

433. 8221 person/post office.

434. In every 21.22 Km we have 1 post office.

435. Postal index number cane in 1974.

436. Telephone network is 2nd largest in world.

437. Telephone density is 9 2 . 5 9 %.

438. Village Public Telephone (VPT).

439. 462 mn Internet users are in India.

440. NRHM - National Rural Health Mission was started in 2005.

441. Sarv Siksha Abhiyan started in 2001-02.Padhe Bharat -Badhe bharat. Started under SSA
programme in 2014 which meant for making student independent in writing & reading.

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427. Gross Registered Tonnage (GRT)
442. National Literacy Mission was started 1998 for adult education now recast into Sakhshar Bharat

443. Malaria, T.B. & Polio cases has reduced but AIDS, Cancer & Blindness cases has
increased.

BUDGET AND EXT DEBT

444. Budget Deficit = Total Exp – Total Receipts

445. Budget Deficit + Borrowing & Liability = Fiscal Deficit.

446. Fiscal Deficit – Interest Payment = Primary Deficit.

447. Fiscal Responsibility of Budget Management Bill was passed in 2003. (FRBM)

448. The aim of FRBM bill was to reduce fiscal deficit by 3 % every year.

449. Fiscal deficit = 3.5% of GDP (2016-17)

450. External Debt = 23 .5 % of GDP (16-17)

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451. Concessional Debt = 9 % it was 75% earlier

452. Debt-service ratio = 8 . 8 % 16-17(it means returning of principle as well as interest)

453. 90% of external assistance is in the form of loan.

454. As per the World Bank’s International debit statistics 2017, India continues to be amongst the
less vulnerable countries. India’s key debt indicators compare well with other indebted countries.

455. Balance of payment is systematic record of all type of international transaction a

country with rest of the world.

456. BOP is prepared on double entry accounting system.

457. Balance of trade is the balance of goods exported and imported by a country. It is also
known as visible trade.

458. Balance of current account is summation of BOT, BOS & BOUT.

459. In Xth plan our export was 23% and import was 30%.

460. In XIth plan export is estimated to be 20% and import 23%.

461. Upto 2008-09, USA was the top desination of our export.

462. In 2009-10, UAE replaced USA.

463. At present 60% of total export import is don e with Asia & ASEAN countries.

464. Inflation of continous increase in price.

465. Inflation is measured on whole sale price index.

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451. Concessional Debt = 9 % it was 75% earlier

466. If prices ↑es due to increase in demand, we call it demand pull inflation.

467. If prices ↑es due to increase in cost of production, we call it cost push inflation.

468. Stagflation = Stagnation + Inflation.

469. Highest inflation rate was 13.9% in 1965.

CHAPTER 7 : ECONOMIC REFORM

CHAPTER 7 ECONOMIC REFORM

470. Economic reforms started in 1991.

471. In the pre-reform period India has very poor economic condition.
(a) National debt was 60% of GDP

(b) Inflation was 12%

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 (c) Foreign exchange reserve only to finance import of 3 week.

472. Industrial licensing has been abolised for 18 industries now reduced to 5 industries.

473. No. of industries reserved for public sector are 2. A) ATOMI C ENERGY B)RAILWAY OPERATION

474. Defence has been dereserved in 2001. Now private company can invest in defence but
minimum requirement is 100 for entry.

475. For importing capital goods no permission is required provided the amount of imported
capital is not more than 2 crore and availability of foreign exchange is ensured.

476. Mandatory convertibility clause from lending operation hyas been abolished.

477. Case by case approval for new projects is not required.

FDI Areas
478.
100% Drug & P harma, Airport, E-commerce, Oil refining, Film H o t e l &
To r u i s m a n d Ag r i c u lt u r e a nd An i m a l Hu s b an d ry
49% Telecom ,Defense
74% Pvt. Banking, Air Transport
26% Print media, Insurance

479. Before reform banking sector was highly regulated.

489. CRR was 15%, SLR was 38.5% but now it has reduced to 4 and 20% respectively in AU G 2016.

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481. The securitisation and reconstruction of financial asset and enforcement of Security

Interest Act was passed for recovery of loan.

482. Basel II reform was launched in 2008 Basel III frame work were launched in 2013 and it is mandatory

For every bank to follow by 2019.

483. In order to promote export following scheme was launched

• Cash Compensation Scheme

• 100% Export Oriented Undertaking (EOU)

• Special Economic Zone (SEZ)

484. FIEO = Federation of Indian Export Organisation.

485. Devaluation means reduction in external value of currency in respect of US$.

486. Devaluation has been 4 times since independence (a) 1949 (b) 1965 (c) twice in 1991.

487. In July 1991, Indian rupee was devalued by 19%.

488. Import licenses has been reduced.

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489. In 2000-01, 714 items has been removed from negative list in 01-02, 715 more items
has been removed. Now few items have quantitative restriction.

490. Cash Compensating Scheme bas been abolished in 1991.

491. Export Promotion of Capital Good (EPCG) Scheme was started for promotion of import
of captial good in 1990 and liberalized in 1992.

492. Special Ecomomic Zone p o l i c y s t a r t e d i n 2 0 0 0 a n d S E Z A c t was set up in 2006.

493. SEZ provides employment to 6,44,000 person.

494. Foreign Exchange includes (a) foreign currency (b) gold reserve (c) SDR.

495. FERA = Foreign Exchange Regulation Act.

496. FERA was enacted in 1973 in 2000 it was replaced by FEMA.

497. FEMA : Foreign Exchange Management Act.

498. Vishes Krishi Upaj Yojna started for promotion of agricultural goods.

499. “Served from India Scheme” was started for promotion of export of services.

500. DFEC = Duty Free Export Credit.

501. DFEC has recast into served from India Scheme.

502. Chelliah Raja and Bhoot Lingam committee are related to Tax reform.

503. In 1973-74 the maximum tax in highest slab was 97.75%.

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504. Tax on Domestic Co. = 30%
Tax on Foreign Co. = 35%

505. Dematerialisation of TDS certificate was made effective from 2008.

506. FRBM Bill = Fiscal Responsibility of Budget Management Bill was passed in 2003.

507. GST = Good Service Tax.

508. Disinvestment means selling of investment.

509. Privatisation means selling of public sector company share to private sector company.

510. 100% disinvestment has been done in 1 8 Hotels of ITDC and 3 Hotel of HCI.

B. Minorty disinvestment means were public company after disinvestment keep 51% or more share

along with management and control. NTPC and NHPC has been disinvested in this way.

C. Majority disinvestment means were public company after disinvestment keep less than 51% share

And no control over management and operations. MRL, BRPL was sold to IOC. Modern Food to HLL,

BALCO to STERLITE, CMC to TCS.

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511. Cross Holding, Ware Housing, Strategic sale method are method of disinvestment.

512. Disinvestment started in 1991-92.

513. 2009 - National Hydropower Corporation was disinvested through domestic issue.

514. Globalisation means integrating the domestic economy with world economy.

515. WTO established in 1/1/1995.

516. GATT was predessor of WTO.

517. WTO have 164 member countries.

518. WTO help in increase world trade.

519. Rupee got current account convertibility in August 1994.

520. Capital Account Convertibility (CAC) is being done under phased manner.

521. Tarapore Committee was set up for CAC.

522. MIGA, IDA & ICSID are bank in World Bank group.

523. IMF was established in 1946 Operationalized in 1947.

524. Initially 31 countries have its member but now 189 countries are its member.

525. IDA is soft window of World Bank.

526. World Bank is also known as International Bank for reconstruction and development.
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 It was established in 1945. It has 189 members.

CHAPTER 8 MONEY & BANKING

CHAPTER 8 : MONEY & BANKING

527. Prof. Walker said “Money is What Money Does”.

528 Static Function of money.

Dynamic Function of Money

Transform Saving to Investment Promote Economic Activity Promote Divison of labour

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529. N M1 is narrow money supply.

530. NM3 is broad money supply.

531. In refined version M4 has been deleted.

532. Total money supply in India is given by N M3.

533. NM1 does not includes term deposit but NM3 includes term deposit.

534. NM1 = CC + DD + other deposite with RBI.

535. Function of comm. Bank

(a) Receipts of deposit
(b) Lending of money
(c) General services

536. Nationalisation started in July 1969.

537. In 1969, 14 Bank were nationalised.

538. In 1980, 6 more Bank were nationalised.

539. 1993, two Banks were merged.

540. Total nationalised bank are 19.

541. Factors responsible for nationalisation

(a) Economic concentation

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529. N M1 is narrow money supply.

(b) Urban b ias

(c) Agriculture sector reglected

(d) Voilated the norm laid down in plan.

542. No. of bank branches - 1 34000 (2016).

543. Population per bank decreased from 55000 to 10000.

544. No. of branches in rural areas increased from 22% to 38%.

545. Maharastra contributes maximum to bank deposit (22%).

546. Lending to priority sector increased from 15% to 34%.

547. Causes of low profitability of comm. bank

(a) Insufficient growth

(b) Regional imbalances
(c) Lack of expertise

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 (d) Expansion of branches

548. NPA = Non-performing assets (Bad debts).

549. RBI is central bank of India.

550. RBI do not deals with general publc.

551. RBI is known as Bank of Issue.

552. RBI is known as Banker of Bank.

553. RBI is lender of last resort.

554. RBI was established in 1935.

555. RBI was nationalised in 1949.

556. One rupee note and all types of coins are issued by Central Government.

557. Under Lead Bank Scheme we appointed leader bank in every area for banking
development.

558. RBI offers central settlement and clearance.

559. A u g . 2016

Rate %
Bank rate 6.25%

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 Reppo rate 6%
Reverse reppo rate 5.75%
SLR 20%
CRR 4%
560. Prime Lending Rate (PLR) now decided by comm. bank earlier decided by RBI.

561. Qualitative measures indiscriminately effect the entire economy. (Q.31 ICAI)

562. Qualitative measures is also known as Selective Credit Control Measures.

563. In order to encourage investment (credit expansion) decrease CRR,SLR,Bank rate,Repo rate & buy
the security.

564. In order to discourage investment (credit control) - CRR↑, BR↑, SLR↑, PLR↑, sell the

Securities.

565. Change in margin requirement, moral suasion, credit rationing are qualitative measure.

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