ECONOMICS - 01

INTRODUCTION OF ECONOMICS
• OIKONOMIA - ANCIENT GREEK WORD - management of a household
ECONOMICS
• processes that govern the production, distribution and
consumption of goods and services in an economy.
• study of labour, land and investments of capital, income and
production and taxes and government Expenditures.
ADAM SMITH - Father of Economics
The science relating to the laws of production, distribution
and exchange.
ECONOMY
• It represents production, distribution or trade and consumption
of goods and services in a given geographical area by different
agents, which can be individuals, businesses, organisation or
governments.
BRANCHES OF ECONOMY
1.MICRO ECONOMICS
2.MACRO ECONOMICS
TYPES OF ECONOMICS
1.OPEN ECONOMY
2.CLOSED ECONOMY
SECTORS OF INDIAN ECONOMY
1.PRIMARY SECTOR – NATURAL RESOURCE ORIENTED
2.SECONDARY SECTOR- MANUFACTURING
3.TERITIARY SECTORS - SERVICES
MIXED ECONOMY
NATURE OF INDIAN ECONOMY
• It is an economy, where both public and private sector co-exist.
• The term Mixed economy was coined by JM Keynes.
DEVELOPING ECONOMY
Following features shows that Indian economy is a developing economy
✓ Low per capita income.
✓ Occupational pattern is primary sector dominated.
✓ (Heavy population pressure.
✓ Prevalence of chronic unemployment and underemployment.
✓ Steadily improving rate of capital formation.
✓ Low capital per head.
✓ Unequal distribution of wealth/assets.
AGRARIAN ECONOMY
• An agrarian economy is a type of economy that relies primarily on
agricultural industry including livestock farming or corp production.
NATIONAL INCOME OF INDIA
• National Income (NI) is the net value of all the final goods and services
produced by its nationals during a financial year. It is a flow concept.
• In India, the financial year is from 1st April to 31st March. The national
income is calculated annually.
NATIONAL INCOME COMMITTEE (1949)
• A national income estimate measures the volume of
commodities and service turned out during a given
period counted without duplication.
NATIONAL INCOME AT CONSTANT PRICE
National Income is measured at the base year price
NATIONAL INCOME AT CURRENT YEAR PRICE
National income is measured at the current year price
• When NNP is calculated at Factor Cost (FC) it is
called National Income.
• This measure is calculated by deducting indirect
taxes and adding subsidies in NNP at Market Price
(MP).
• The CSO released the ‘New series’ of national
accounts with base year 2011-12 instead of the
base year 2004-05.
• The revisions happen every 5 years.
• In India, Central Statistical Organisation/ Office
(1949) has been formulating National Income.