Indian Economic Survey 2010-2011

• The Economic Survey to review the economic performance in the current financial year and forecast the economy prospects for the coming year.
• Indian economy to grow by 9 per cent in next fiscal year.
• Gross fiscal deficit decreases to 4.8% of GDP.
• Inflation estimated to be higher by 1.5%.
• India on way to become fastest growing economy in the world.
• Calls for new 'Green Revolution' for agricultural sector with higher investment and introduction of latest technologies.
• Government working on regulations to emphasize on capital market.
• Increase influx of foreign capital by building close association with G-20 countries.
• National Forest Land Bank to improvise the infrastructure projects.
• Estimated economic growth at 8.75-9.25 per cent for fiscal year 2012.
• Estimated agriculture sector growth at 5.4 per cent during this fiscal year.
• Growth of Industrial output by 8.6% where, manufacturing sector registers 9.1%.
• The export stats; 29.5% in 2010 April-December and Import; 19%.
• Trade Gap  minimizes to $82.01 billion.
• Raised both saving and investment rate to 33.7% & 36.5% of GDP.
• Estimated food grains production at 232.10 million tonnes.
• Fores reserves to reach $297.30 billion.
• Importance given to telecom sector.
• Policies supporting accounting, legal, tourism, education, financial and other services.
• Taxation of goods and services to be revised.
• Introduction of Financial Schemes to monitor unemployment.
• Reformation necessary in the current education system by inviting more private participation.

MICRO & MACRO ECONOMICS

Micro Economics

Definition :

       The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets (e.g. coffee industry).

Market Interaction :

       The strength of microeconomics comes from the simplicity of its underlying structure and its close touch with the real world. In a nutshell, microeconomics has to do with supply and demand, and with the way they interact in various markets. Microeconomic analysis moves easily and painlessly from one topic to another and lies at the center of most of the recognized subfields of economics. Labor economics, for example, is built largely on the analysis of the supply and demand for labor of different types. The field of industrial organization deals with the different mechanisms (monopoly, cartels, different types of competitive behavior) by which goods and services are sold. International economics worries about the demand and supply of individual traded commodities, as well as of a country’s exports and imports taken as a whole, and the consequent demand for and supply of foreign exchange. Agricultural economics deals with the demand and supply of agricultural products and of farmland, farm labor, and the other factors of production involved in agriculture.

Macro Economics 

Definition: 

      The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels.

Market Interaction:

      The role of macroeconomics in business can be seen in way the condition of the economy affects individual businesses. For instance, during a recession, the behavior of customers and consumers of goods and services change to reflect the change in the economy. Such changes can be seen in the way the demand for goods and services drop and the manner in which such a reduction affects the balance sheets of the various businesses. An example of the role of macroeconomics in business is the way in which the reduction or increase in demand for products affects the decisions by companies to expand or to scale down their rate of production. For instance, a boom in the economy may lead to a demand for goods. Then companies will increase production, hire more employees and even expand their businesses, all with the aim of meeting up with the increase in demand.

Foreign Exhange

1).Treasury Management – Scope and Importance

2).Overview of Risk Management

3).Overview of Foreign Exchange Market

4).Spot Market

5).Forward Market

6). Determination of Exchange Rates

7). Currency Futures

8). FX Trading Controls

      

India Economy

India Economy, the third largest economy in the world, in terms of purchasing power is going to touch new heights in coming years. As predicted by Goldman sachs, the global investment bank by 2035 India would be the third largest economy of the world. Just after US and China. It will growth 60% of size of US economy. This booming economy of today has to  pass through many phases before it can achieve the current milestone of 9% GDP
 
Union Budjet 2011-12:
              The Union Budget for 2011 -2012 will be presented on February 28. Given the inflationary environment and spate of scams country is embroiled in, 2011-12 Union Budget provides a perfect opportunity to the government to allay the anxieties of common man.
               The budget may propose an increase the income tax exemption limit to provide some relief to the taxpayer from inflation. Income tax relief can be provided to lower income brackets. There would be relaxation in individual tax slabs with a likely hike in income tax exemption limit.
               This will be a natural move to align with provisions of DTC. This could take the form of raising the tax exemption limit from the current Rs 1, 60,000 to a higher income slab Rs. 2, 00, 000. Presently, income up to Rs 1, 60,000 for men and Rs 1, 90,000 and Rs 2, 40,000 for women and senior citizens is exempted from tax. DTC; GST implementation is unlikely before April, 2012. 

             2011-12 Indian budget can see an increase in the service tax to boost the revenues. The service Tax net is expected to increase either through the addition of new services or the expansion of the scope of the existing services. New set of services that could be bought under the ambit of services tax are CA audit, corporate finance and accounts services, health and education services, legal services, postal services, gas and water distribution, hospital OPD services, retail services, research and experimental development etc.

Gross Domestic Product

        The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the economy has grown by 3% over the last year.

Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.

TYPES OF ECONOMICS

1) Market economy
2) Command (planned) economy
3) Traditional economy
4) Mixed economy

A). Market Economy:

              Market economies work on the assumption that market forces, such as supply and demand, are the best determinants of what is right for a nation's well-being. These economies rarely engage in government interventions such as price fixing, license quotas and industry subsidizations.

B). Planned Economy :

              A planned economy alleviates the use of private enterprises and allows the government to determine everything from distribution to pricing. Planned economies basically give the government dictatorship type control over the resources of the country. Planned economies can provide stability, but also can limit the growth and advancement of the country if the government does not allocate resources to the innovative enterprises             

C). Traditional Economy :

                 A traditional economy is a system where traditions, customs, and beliefs shape the goods and products the society creates. Countries that use this type of economic system are often rural and farm-based. Also known as a subsistence economy, a traditional economy is defined by bartering and trading. Little surplus is produced, and if any excess goods are made, they are typically given to a ruling authority or landowner.

D). Mixed Economy :
           A "mixed" economy is a mix between socialism and capitalism. It is a hodgepodge of freedoms and regulations, constantly changing because of the lack of principles involved. A mixed-economy is a sign of intellectual chaos. It is the attempt to gain the advantages of freedom without government having to give up its power.

                   A "mixed" economy is a mix between socialism and capitalism. It is a hodgepodge of freedoms and regulations, constantly changing because of the lack of principles involved. A mixed-economy is a sign of intellectual chaos. It is the attempt to gain the advantages of freedom without government having to give up its power.       A "mixed" economy is a mix between socialism and capitalism. It is a hodgepodge of freedoms and regulations, constantly changing because of the lack of principles involved. A mixed-economy is a sign of intellectual chaos. It is the attempt to gain the advantages of freedom without government having to give up its power.

MANAGERIAL ECONOMICS

Nature of Economics

:

           Managerial Economics and Business Economics are the two terms which, at times, have been used interchangeably. The term managerial Economics has become more popular and seems to displace progressively the term Business Economics..

Decision Making and Forward Planning:

         Decision Making the process of selecting one action from two or more alternative Course of action.

             Forward Planning means establishing plans for the future.

Scope of Managerial Economics  

             1).Demand Analysis and Forecasting
             2). Cost and Production Analysis

             3). Pricing Decisions, Policies, and Practices

             4). Profit management

             5). Capital Management

WORLD FAMOUS ECONOMIST

ADAM SMITH

Adam Smith, the world's most famous, indeed the father of modern economics, was born in 1723 in the small town of Kirkcaldy, just north of Edinburgh, Scotland.

His father died before he was born, and Adam Smith was reared by his mother, retaining a life-long loyalty and devotion to her. He never married and spent most of his life living with and caring for his mother, who lived to be ninety.

The Wealth Of Nations which first made Smith’s reputation, but a book on ethics, The Theory Of Moral Sentiments. Once again, Smith looks to social psychology to discover the foundation of human morality. Human beings have a natural ‘sympathy’ for others. That enables them to understand how to moderate their behaviour and preserve harmony. And this is the basis of our moral ideas and moral actions.

AMARTYA SEN

One of India's greatest pioneers in social theories, Amartya Sen is the name who revolutionized the image of Indian society with his socio-economic policies. Better known for his contributions in classifying the reasons for famine that affected the country post-Independence, Amartya Sen forwarded feasible solutions to curb effectively the crisis that once plagued the nation. A Ph.D. in economics, Sen extensively researched on various problems affecting the socially backward communities.

Professor Sen has researched and written books in a number of wide-ranging fields, including economics, philosophy, decision theory and social choice theory. His work has covered welfare economics, theory of measurement, development economics, moral and political philosophy and the economics of peace and war. Professor Sen's books, which have been translated into many languages, and include the Identity of Violence: The Illusion of Destiny, Rationality and Freedom, Collective Choice and Social Welfare, On Economic Inequality, Poverty and Famines, Choice, Welfare and Measurement, Resources, Values and Development, On Ethics and Economics, The Standard of Living, Inequality Reexamined and Development as Freedom.

Rajiv Chandrasekaran

Rajiv chandrasekaran is an Indian-American journalist. He is currently the National Editor of The Washington Post, where he has worked since 1994. Originally from the San Francisco Bay area, Chandrasekaran holds a degree in political science from Stanford University, where he was editor-in-chief of The Stanford Daily.

His first book is Imperial Life in the Emerald City: Inside Iraq's Green Zone published in 2006, which won the 2007 Samuel Johnson Prize and was a finalist for the 2006 National Book Awards for non-fiction. The film Green Zone (2010) is "credited as having been 'inspired by" the book.