FINANACIAL REPORT – 1

GROSS DOMESTIC PRODUCT (GDP)-:

GDP is the final value of the goods and services produced within the geographic
boundaries of a country during a specified period of time, normally a year.

GDP = Real GDP (GDP at constant prices) – Taxes + Subsidies.

Accordingly, GDP is defined by the following formula:

GDP = Consumption + Investment + Government Spending + Net Exports

Or more succinctly as GDP = C + I + G + NX where consumption (C) represents

private-consumption expenditures by households and nonprofit organizations,
investment (I) refers to business expenditures.
GROSS NATIONAL PRODUCT (GNP)-:
Gross National Product (GNP) is the total value of all finished goods and services
produced by a country's citizens in a given financial year, irrespective of their
location.

GNP = C + I + G + X + Z
Where C is Consumption, I is investment, G is government, X is net exports, and Z
is net income earned by domestic residents from overseas investments minus net
income earned by foreign residents from domestic investments.

NET DOMESTIC PRODUCT (NDP)-:

Net domestic product (NDP) is an annual measure of the economic output of a
nation that is calculated by subtracting depreciation from gross domestic product
(GDP).

NDP FORMULA:

NDP = Gross domestic product (GDP) – Depreciation.

NET NATIONAL PRODUCT (NNP)-:
Net national product (NNP) is gross national product (GNP), the total value of
finished goods and services produced by a country's citizens overseas and
domestically, minus depreciation. NNP is often examined on an annual basis as a
way to measure a nation's success in continuing minimum production standards.

FORMULA-:

NNP = GNP - Depreciation.

FINANCIAL TERMS-:
CURRENT DEFECIT-:
Current account deficit arises when the value of imports is greater than
the value of exports. Current account surplus arises when the value of
imports is less than the value of exports.

After remaining in surplus for three quarters, India's current account

balance recorded a deficit of $1.7 billion (0.2 per cent of Gross
Domestic Product - GDP) in the quarter ended December 2020
(Q3FY21).

FISCAL DEFICIT-:
Fiscal deficit, the condition when the expenditure of the government
exceeds its revenue in a year, is the difference between the two. Fiscal
Deficit is calculated both in absolute terms and as a percentage of the
country's gross domestic product (GDP).

The Centre's fiscal deficit touched Rs 14.1 trillion in the first 11 months
of FY21 — 76 per cent of the 2020-21 revised estimates of Rs 18.5
trillion and 36 per cent higher than last year's corresponding level of Rs
10.4 trillion.

REPO RATE & REVERSE REPO RATE-:

• Repo rate is the rate at which commercial banks borrow money

from RBI by using government bonds as collateral to achieve its
fiscal goals.
• Reverse repo rate is the rate at which the central bank of a
country (Reserve Bank of India in case of India) borrows money
from commercial banks within the country. It is a monetary policy
instrument which can be used to control the money supply in the
country.

On Friday (22nd May 2020), Reserve Bank of India (RBI) cut the repo
rate by 40 basis points to adjust repo rate at 4.00% and reverse repo
rate at 3.35%.
 Repo Rate 4.00%

Bank Rate 4.65%

Reverse Repo Rate 3.35%

Marginal Standing Facility Rate 4.65%

CASH RESERVE RATIO (CRR)-:

Cash Reserve Ratio (CRR) is the share of a bank's total deposit that is
mandated by the Reserve Bank of India (RBI) to be maintained with the
latter as reserves in the form of liquid cash.

STATUTORY LIQUIDITY RATIO (SLR)-:

SLR or statutory liquidity ratio is the minimum percentage of deposits
that a bank has to maintain in form of gold, cash or other approved
securities.

CURRENT RATE-:

Indicator Current Rate

CRR 3.00% (till March 21, 2021)

SLR 18.00%
MARGINAL COST OF FUNDS BASED LENDING RATE-:
Marginal Cost of Funds based Lending Rate (MCLR) is the minimum
lending rate below which a bank is not permitted to lend. MCLR
replaced the earlier base rate system to determine the lending rates for
commercial banks. RBI implemented MCLR on 1 April 2016 to
determine rates of interests for loans.

Sl.No Tenor wise MCLR Rate effective from 01.05.2021

1 Overnight MCLR 6.70%

2 1 Month MCLR 7.20%

3 3 Months MCLR 7.25%

4 6 Months MCLR 7.30%

THE FORWARD MARKET COMMISSION (FMC)-:

 • The Forward Markets Commission (FMC) was the chief regulator
of commodity futures markets in India. As of July 2014, it
regulated Rs 17 trillion worth of commodity trades in India. It is
headquartered in Mumbai and this financial regulatory agency is
overseen by the Ministry of Finance.

• Forward Markets Commission is a regulatory body for commodity

futures/forward trade in India. This was set up under the Forward
Contracts (Regulation) Act of 1952. It is responsible for regulating
and promoting futures/forward trade in commodities.

• Central government has been given with highest authority to

control FMC as well as exchanges.

PORTFOLIO MANAGEMENT SERVICES (PMS)-:

• Portfolio Management Services (PMS), service offered by the
Portfolio Manager, is an investment portfolio in stocks, fixed
income, debt, cash, structured products and other individual
securities, managed by a professional money manager that can
potentially be tailored to meet specific investment objectives.

• Unlike mutual funds, the investors' assets here are not pooled
into one large fund. Portfolio Management Service (PMS) uses a
separate bank account and demat account for each client.
 • Portfolio management scheme popularly known as PMS are
specialized investment vehicle for lump sum investments. The
portfolio manager invests the money in shares and other
securities and manages the portfolio on behalf of the client.

ABOUT SHARE MARKET-:

SECURITY AND EXCHANGE BOARD OF INDIA (SEBI)-:

• The Securities and Exchange Board of India (SEBI) is the
regulatory body for securities and commodity market in
India under the jurisdiction of Ministry of Finance ,
Government of India. It was established on 12 April 1988
and given Statutory Powers on 30 January 1992 through the
SEBI Act, 1992.
• Securities and Exchange Board of India (SEBI) is a statutory
regulatory body entrusted with the responsibility to regulate
the Indian capital markets. It monitors and regulates the
securities market and protects the interests of the investors
by enforcing certain rules and regulations.
• SEBI plays an important role in regulating all the players
operating in the Indian capital market. ... It attempts to
protect the interest of investors and aims at developing the
capital markets by enforcing various rules and regulations.
• To regulate and approve by-laws of stock exchanges. Inspect
the books of accounts of recognized stock exchanges and
call for periodical returns. Inspect the books of financial
 Intermediaries. Compel certain companies to get listed on
one or more stock exchanges.

NIFTY-:

It is an abbreviation of the National Stock Exchange Fifty. It is a

collection of top performing 50 equity stocks that are actively
trading in the index. . Hence, Nifty is also known as Nifty50 or CNX
Nifty. Nifty is a popular stock index. The National Stock Exchange
of India introduced it.

SENSEX-:

The Sensex refers to India's benchmark stock index, which was

created in 1986 and represents 30 of the largest and most well-
capitalized stocks on the BSE. The Sensex has been on a growth
curve since India opened up its economy in 1991.
 THE INDEX OF INDUSTRIAL PRODUCTION (IIP)-:
• The Index of Industrial Production (IIP) is an index which
shows the growth rates in different industry groups of the
economy in a stipulated period of time. The IIP index is
computed and published by the Central Statistical
Organisation (CSO) on a monthly basis.
• The IIP data is compiled and published by CSO every month.
CSO or Central Statistical Organisation operates under the
Ministry of Statistics and Programme Implementation
(MoSPI). The IIP index data, once released, is also available
on the PIB website.

Growth Rates Manufacturing (weight: 78%) IIP (overall)

January 2020 1.80% 2.20%

January 2021 —2% —1.6%

April to Jan 2020 0.40% 0.5%*

April to Jan 2021 —13.6% —12.2%

The Index of Industrial Production (IIP) is an index which

shows the growth rates in different industry groups of the
economy. It is a key economic indicator of manufacturing
sector of the economy.