Introduction to Static Economy:

Here I will introduce the static economic concepts that will be used for the analysis of the existing
macroeconomy.
To categorize the study we need to first understand what is the demand of the subject, hence we
move to the definition of the subject
Hence what is economics:
“It is the social science concerned with the production, distribution and consumption of goods
and services” - investopedia
We will divide the content in
The only truth in this categorization is that we only have limited abstract themes to support our
ideas and that there is extensive cross linking between subjects.
Contents:
• Basic analysis of various themes of Economy

• Economic History of India

• Geographic Economy

• Economic Sociology

• Budget and it’s impact 2017-18

• Economic Survey 2017-18

Resources are scarce:

As we move to the root of questions for social problems, one approach would be that humans are
discontent with what they have(materialistic possessions), hence possibly they search for more
throughout their lives and wish to acquire it(by working,waging social conquests etc).
Hence throughout our motivation will be to identify who needs what, how can it be provided it to
them, how
Now that we have discussed it in a way we also need to know what we mean by each term
separately

Production of goods and services:

• Production of goods and services: The first thing that strikes to one is who will produce,
what will be produced and how will it be produced, and other sorts of questions.
• To address the Who?: It will either be a person, microorganism or any other agent including
government capable of producing any good or service.
 • How? : This will be answered by the means of production(MoP), the wikipedia refers to
MoP as the physical, non-financial input to production that adds economic value. (here we
close the discussion defining economic value to be the benefit that the economic agent
accrues by acquiring the good or service).
• But wait, merely having physical i/p won’t suffice, there is a larger set that also goes into
adding economic value the human capital and the financial capital
• Here the human capital is the skill, knowledge,social ,personality attributes that add to the
ability of Human to perform labor and add to economic value.
• Hence concluding , the factors of production are the whole set of physical, financial,
human capital with the potential to add economic value(finally producing the good and
services).

Distribution of goods:
• Here we are concerned with the way total output;income or wealth accrued from the
production is distributed among the factors of production(f.o.p).
• Here we will enter into the realm of macroeconomy.

• Here we will indulge into what questions must we ask to know how the wealth(from o/p) is
distributed to/within the labor(such questions amt. To details personal distribution); other
sets of questions tackle the functional distribution that is what are the factors that influence
the price of factors of production. Finally we have the third problem to answer; this is the
distributive share problem as in what is the share of national income that goes into each
f.o.p.
• We move to the study of Distribution theory a bit:

◦ As a vigilant citizen one needs to know if the wealth is being distributed equitably and
appropriately among the labor ;or is someone getting undue share while others are
oppressed.
◦ While accounting for personal income distribution it must be noted that as of 2014 the
World’s bottom 56% earn equal to the top 1%
◦ Now how do we know about this data?

▪ Surveys; whenever interested check this nad website World in data initiative

◦ Normative economics suggests what ought to be, hence our focus is on how
Case Studies:
Sugarcane price support to farmers in India
Why do farmers need support?
• Because otherwise they will sell @ lower market prices; to shield them from market price
dippings we need to
How to see the issue in the light of Rural development?
• Notice that we need rural development to
Economic History of India
Planning History
Keywords: Bombay Plan, People’s plan, Gandhian Plan, Sarvodaya plan, Planning and
Development Board, Planning Advisory Board, Planning Commission, National Development
Council, NITI Aayog, Five Year Plans

Bombay Plan:
Objective and basic notion of development:
Suggested by industrialists with the intent to double per capita income in 15 yrs and tripling
national income.
Hence the motivation was trickle down approach.

Gandhian Plan:
Objective was to enhance rural
In India Niti Aayog is @ the helm of economic planning.

But why did India opt to change the planning commission in the first place?