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Important Topics For IAS Prelims 2015 (Economic and Social Development)

Topics For IAS Prelims 2015 (Economic and Social Development)

National Income

National income is the monetary value of the flow of output of goods and services produced in an economy over a period of time.

While per capita Gross Domestic Product (GDP) is the indicator most commonly used to compare income levels, there are two other measures are generally preferred by analysts: per capita Gross National Income (GNI) and Net National Income (NNI).

Whereas GDP refers to the income generated by production activities on the economic territory of the country, GNI measures the income earned by the residents of a country, whether generated on the domestic territory or abroad, NNI is GNI net of depreciation.

GNI is defined as GDP plus net receipts from abroad of wages and salaries and of property income plus net taxes and subsidies receivable from abroad. NNI is equal to GNI net of depreciation.
There are a number of concepts pertaining to national income and methods of measurement relating to them.

Gross Domestic Product (GDP):

GDP is the total value of goods and services produced within the country during a year. This is calculated at market prices and is known as GDP at market prices.

There are three different ways to measure GDP:

National Output = National Expenditure (Aggregate Demand) = National Income

(i) The Expenditure Method - aggregate demand (AD)

In this method, national income is measured as a flow of expenditure.

The full equation for GDP using this approach is GDP = C + I + G + (X-M) where

C: Household spending
I: Capital Investment spending
G: Government spending
X: Exports of Goods and Services
M: Imports of Goods and Services

(ii) The Income Method – adding factor incomes

The income method, which adds up all incomes received by the factors of production generated in the economy during a year. Here GDP is the sum of the incomes earned through the production of goods and services. This is:

Income from people in jobs and in self-employment +
Profits of private sector businesses +
Rent income from the ownership of land =
Gross Domestic product (by factor incomes)

(iii) The Product Method :

In this method, the value of all goods and services produced in different industries during the year is added up. This is also known as GDP or GDP at factor cost by industry of origin.

GDP at Factor Cost:

GDP at Factor Cost = Net value added + Depreciation.

GDP at factor cost includes:

GDP at Factor Cost = GDP at Market Price – Indirect Taxes + Subsidies.

Net Domestic Product (NDP):

Net Domestic Product = GDP at Factor Cost – Depreciation.

Nominal and Real GDP:

When GDP is measured on the basis of current price, it is called GDP at current prices or nominal GDP.

On the other hand, when GDP is calculated on the basis of fixed prices in some year, it is called GDP at constant prices or real GDP.

Gross National Product (GNP) at Market Prices:

GNP at Market Prices = GDP at Market Prices + Net Income from Abroad.

GNP at Factor Cost:

GNP at Factor Cost = GNP at Market Prices – Indirect Taxes + Subsidies.

Net National Product (NNP):

NNP = GNP—Depreciation.

NNP at Market Prices:

NNP at Market Prices = GNP at Market Prices—Depreciation.

NNP at Factor Cost:

NNP at Factor Cost = NNP at Market Prices – Indirect taxes+ Subsidies

= GNP at Market Prices – Depreciation – Indirect taxes + Subsidies.

= National Income.

Formulae of National Income :

1. GVA at basic prices = CE + OS/MI + CFC + P r o d u c t i o n t a x e s - P r o d u c t i o n subsidies.
2. GVA at factor cost (earlier referred to as GDP at factor cost) = GVA at basic prices - P r o d u c t i o n t a x e s - P r o d u c t i o n subsidies.
3. GDP = GVA at basic prices + Product taxes - Product subsidies
4. GNI = GDP + Net primary income from ROW (Receipts - payments).
5. NDP/NNI = GDP/GNI - CFC.
6. Primary Incomes =CE + Property and Entrepreneurial Income.
7. GNDI = NNDI + CFC = GNI + other current transfers from ROW, net (Receipts - payments).
8. NNDI = NNI + other current transfers from ROW, net (Receipts - payments).
9. Gross Capital Formation = Gross Savings + Net Capital Inflow from ROW.
10. GCF = GFCF + CIS + Valuables + ‘Errors and Omissions’.
11. Gross Disposable Income of Households = GNDI - GDI of Govt. - Gross Savings of All Corporations.
12. Gross Disposable Income of Govt. = GFCE + Gross Saving of GG.

Acronyms

GDP : Gross Domestic Product
GVA : Gross Value Added
GNI: Gross National Income
NDP : Net Domestic Product
NNI: Net National Income
GDI: Gross National Disposable Income
CE : Compensation of Employees
OS: Operating Surplus
MI : Mixed Income
ROW: Rest of the World
PFCE: Private Final Consumption Expenditure
GFCE : Government Final Consumption Expenditure
CFC : Consumption of Fixed Capital
GFCF : Gross Fixed Capital Formation CIS : Changes in Stock

Economic and Social Development

1. GST Bill
2. Black Money : Study Report
3. Recommendations of 14th Finance Commission
4. Disinvestment of Coal India, ONGC,NHPC
5. Economic Survey 2014-15
6. Union Budget 2015-16
7. New Law on Black Money
8. Railway Budget 2015-16
9. National Income Latest facts
10. NITI Aayog
11. Vision of Twelfth Five Year Plan
12. Companies (Amendment) Bill, 2014
13. Central Public Sector Enterprises Survey 2013-14
14. Pradhan Mantri Jan-DhanYojana
15. Sansad Aadarsh Gram Yojana
16. Sukanya Samriddhi Accounts Yojan
17. Pandit Deendayal Upadhyay Shramev Jayate Scheme
18. Atal Pension Yojana
19. Swachh Bharat Mission
20. Deendayal Upadhyaya Gram Jyoti Yojana
21. Pradhan Mantri Kaushal Vikas Yojana
22. ‘Bharat Mala’ : An Ambitious Project to Connect Border Areas
23. Atal Mission for Rejuvenation and Urban Transformation
24. RBI’s Annual Report 2013-14
25. IDFC, Bandhan Get ‘In-Principle’ Approval to Set-up Banks
26. Gross Non-Performing Assets of PSU Banks to Be About 4•4% in 2014-15: ICRA
27. Government to Infuse Rs. 6,990 crore in 9 Public Sector Banks
28. SBI Launches Home-grown Index to Track Economic Trends
29. RBI Issues Draft Charter of Customer Rights
30. Zero per cent Interest Schemes Banned by RBI
31. D-SIBs : RBI Issued Tighter Regulatory Norms
32. RBI Issued Drafted Guidelines for Implementation of Bharat Bill Payment System
33. Regional Rural Banks (Amendment) Bill, 2014
34. RBI-Inflation Indexed National Savings Securities (INSS)
35. Housing Price Index
36. RBI Provides Rs. 5,000 crore Refinance Window for EXIM Bank
37. RBI Adopts CPI as New Measure of Inflation
38. CPI Basket Weights Revised, Base Year Changed from 2010 to 2012
39. New WPI to have Bigger Food Basket
40. Money Stock Measures in India
41. India’s Foreign Trade Policy 2015-20
42. India’s Foreign Trade: 2014-15
43. India’s External Debt (at end-December 2014)
44. Human Development Report-2014
45. Global Risks 2014 Report
46. Global Competitiveness List
47. Creative Productivity Index
48. Global Innovation Index
49. Economic Freedom Index for 2014
50. Women Empowerment Scale
51. Global Slavery Index
52. Global Gender Gap Report 2014
53. Global Innovation Efficiency Index
54. International IP Index
55. World Bank’s ‘Ease of Doing Business Report’
56. Global Service Trade
57. Energy Scenario During 12th Plan
58. Deepak Parekh Committee Recommended PPP Model
59. Indian Railways’ Kaya Kalp Council
60. Railway’s Vision 2020
61. Mudra Bank
62. Real Estate (Regulation and Development) Bill, 2013
63. National Food Security Scheme 2013
64. National Heritage Development and Augmentation Yojana (HRIDAY)
65. BRICS Development Bank
66. India Skills Report 2015
67. Mor Panel Recommendations on Financial Inclusion
68. New National Youth Policy 2014
69. Air Quality Index
70. Pension Bill
71. ‘Make in India’ Launch
72. 102nd Indian Science Congress
73. 13th Pravasi Bharatiya Divas
74. Mission Indradhanush
75. Maulana
76. Azad National Academy for Skills
77. ‘e-Kranti Plan’
78. Saansad Adarsh Gram Yojana