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NTPC ALP Group D

Indian Economy for RRB Exams

Basic Economic Concepts

National Income

  • • GDP (Gross Domestic Product): Total value of goods/services produced within country
  • • GNP (Gross National Product): GDP + Net factor income from abroad
  • • NNP (Net National Product): GNP - Depreciation
  • • Per Capita Income: National Income / Population
  • • Base Year: 2011-12 (for GDP calculation)

Economic Sectors

  • • Primary Sector: Agriculture, mining, forestry, fishing
  • • Secondary Sector: Manufacturing, construction, electricity
  • • Tertiary Sector: Services - IT, banking, transport, education
  • • Largest Contributor: Services sector (~55% of GDP)

Inflation & Price Indices

  • • Inflation: Sustained increase in general price level
  • • CPI (Consumer Price Index): Measures retail inflation
  • • WPI (Wholesale Price Index): Measures wholesale inflation
  • • Deflation: Decrease in general price level
  • • Target: RBI aims for 4% (+/- 2%) CPI inflation

Banking & Financial System

Reserve Bank of India (RBI)

  • • Established: April 1, 1935
  • • Nationalized: January 1, 1949
  • • Headquarters: Mumbai
  • • Governor: Appointed by Government of India (3-year term)
  • • Functions: Monetary policy, currency issuance, banking regulation
  • • Key Rates: Repo, Reverse Repo, CRR, SLR, Bank Rate

Banking Types

  • • Commercial Banks: Public sector (12), Private sector, Foreign banks
  • • Cooperative Banks: Urban, Rural cooperative banks
  • • Regional Rural Banks (RRBs): 43 RRBs serving rural areas
  • • Payment Banks: Limited banking (deposits up to ₹2 lakh, no lending)
  • • Small Finance Banks: Focus on MSMEs, small farmers

Key Banking Terms

  • • Repo Rate: Rate at which RBI lends to banks (currently ~6.5%)
  • • Reverse Repo: Rate at which RBI borrows from banks
  • • CRR (Cash Reserve Ratio): Cash banks must keep with RBI (4.5%)
  • • SLR (Statutory Liquidity Ratio): Liquid assets banks must maintain (18%)
  • • Bank Rate: Long-term lending rate by RBI
  • • NPA (Non-Performing Asset): Loan overdue for 90+ days

Financial Institutions

  • • SEBI: Securities and Exchange Board of India (capital markets regulator)
  • • IRDAI: Insurance Regulatory and Development Authority
  • • NABARD: National Bank for Agriculture and Rural Development
  • • SIDBI: Small Industries Development Bank of India
  • • EXIM Bank: Export-Import Bank of India

Economic Policies & Schemes

Major Economic Reforms

  • • LPG Reforms (1991): Liberalization, Privatization, Globalization
  • • GST (2017): Goods and Services Tax - "One Nation, One Tax"
  • • Demonetization (2016): ₹500, ₹1000 notes withdrawn
  • • Make in India: Boost manufacturing sector
  • • Digital India: Digital empowerment

Financial Inclusion Schemes

  • • Jan Dhan Yojana: Bank accounts for all (48+ crore accounts)
  • • PM-KISAN: ₹6,000/year to farmers
  • • PMJJBY: Life insurance (₹2 lakh cover for ₹436/year)
  • • PMSBY: Accident insurance (₹2 lakh for ₹20/year)
  • • APY (Atal Pension Yojana): Pension for unorganized sector

Taxation

  • • Direct Taxes: Income tax, Corporate tax, Wealth tax
  • • Indirect Taxes: GST (replaced excise, VAT, service tax)
  • • GST Slabs: 0%, 5%, 12%, 18%, 28%
  • • Income Tax Slabs: New regime (up to ₹3L exempt, progressive rates)

Budget & Economic Planning

Union Budget

  • • Presented by: Finance Minister (February 1st annually)
  • • Components: Revenue Budget, Capital Budget
  • • Fiscal Deficit: Total expenditure - Total receipts (excluding borrowings)
  • • Revenue Deficit: Revenue expenditure - Revenue receipts
  • • Primary Deficit: Fiscal deficit - Interest payments

Five-Year Plans (Discontinued 2017)

  • • First Plan (1951-56): Focus on agriculture
  • • Second Plan (1956-61): Industrialization (Mahalanobis model)
  • • Replaced by: NITI Aayog (2015) - replaced Planning Commission

NITI Aayog

  • • Full Form: National Institution for Transforming India
  • • Established: January 1, 2015
  • • Chairman: Prime Minister
  • • Role: Policy think tank, cooperative federalism

International Economics

Trade & Balance of Payments

  • • Exports: Major items - petroleum products, gems, pharmaceuticals
  • • Imports: Crude oil, gold, electronics, machinery
  • • Trade Deficit: Imports > Exports
  • • Foreign Exchange Reserves: Managed by RBI (USD 600+ billion)

International Organizations

  • • IMF: International Monetary Fund (HQ: Washington DC)
  • • World Bank: Development financing (HQ: Washington DC)
  • • WTO: World Trade Organization (HQ: Geneva)
  • • ADB: Asian Development Bank (HQ: Manila)
  • • BRICS: Brazil, Russia, India, China, South Africa

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