ECONOMICS BOMB SHOT FOR SSC CGL 2025 | GK BY PARMAR SIR | PARMAR SSC

0:36 We will confirm with anyone once. Let's see, let's drop a few. Will they fall or not. Come on brother, let's start. So what is bomb shot? This is also fine. Let's start. We are all okay okay. Let's start. We are going to see complete economics in this lecture. And who wrote the spelling of bomb wrong brother? This

1:23 has become bomb brother. Come on, let's start. So this will be a complete video in which we are going to see complete economics. Whoever has a fat man will keep it open and mostly I have tried to keep it in order. But there is just a little change. And that is that here first we will do a little microeconomic concept. Because that is more important. And later in the end we will do a microeconomic concept in which demand and supply comes. So this is the only change. Okay? So see that a little. You will have to turn the page. You can at least work this hard. Yes, because yesterday I was looking at the comments that Sir should teach in Fatman's order. So brother, you will find all the things there. So is it true that those who have it have to make separate notes or else there will be no need for all this. That's it. Okay?

2:09 Let's start. So those who have it, keep it open. Yes and those who don't have it, you will get the complete PDF of this entire PPT on Parmar SSC tlgram channel. So you can download it from there. Let's start, first of all what is the difference between the Mac and the Microeconomics? What is the difference ? You can understand from the name. Mac means we are dealing at a large level. Micro means we are dealing at a small level. When it comes to microeconomics, here we study the entire economy as a whole. Okay? Entire economy as a whole is studied. On the other hand, if we talk about microeconomics, then it is studied at an individual level. Okay? As I told you, this is talking about the entire economy. Entire economy

2:56 and this is about specific economy. Specific economy. Like let's say for example when we are studying about national income. When we are studying about national income , that is national income. That is a microeconomics concept. Because there we are discussing about the income of the entire nation. When we talk about microeconomics, there we are talking about a specific person. There we are talking about demand and supply, that if we bring changes in certain factors, then there will be change in demand, there will be change in supply. We study that in microeconomics. Okay? So whatever we will study in national income, GDP, GNP, your inflation, fiscal policies, all these things will come in microeconomics. There we will study consumer behaviour, that is demand, supply,

3:43 all these will come in microeconomics. Now here we have to study a little bit about father and mother. That is who is called the father of microeconomics? In Hindi it is called macroeconomics and in Hindi it is called microeconomics. When we talk about father, then it is called John Maynad Keynes and if we talk about microeconomics, then here we call Adam Smith and if Adam Smith is not in the option, then it may be Alfred Marshall in the option. We also call Alfred Marshall as the father of microeconomics. We should know the book written by him . And the book is General Theory of Employment. The full name is General Theory of Employment Interest and Money. But in short you can remember General Theory of Employment. If we talk about Adam Smith then only we will remember the book

4:32 Wealth of Nations. Wealth of Nations. He wrote this book in which he discussed about invisible hands. Okay? Then comes private good versus public good. Look, this is one way of classifying the economy, we can do it on a large level and on a small level. There is another way, if I talk about capitalist and socialist, I will tell you only two-three points in it, but first let us understand about private and public good, what is the difference between them, so private goods are revolving in nature, what does revolving mean, revolving means that whoever bids the highest for it, whoever has the right to buy it, then only he will get the benefit, but if we talk about public good, then it is non-revolving. Non-revolving means that if I

5:19 consume it, then it will not affect your consumption. When we talk about example, for example, our road is a public good. Because the government has built it. It is not like I will walk on that road and will not let you walk because I have bought that road. That means it is non-excludable. Okay ? They are non-excludable. No one can be excluded. But in the case of private good, it is excludable. That means we can exclude someone . You have to keep this thing in mind. Okay? Clear? And here there is positive marginal cost. Positive marginal cost. And if we talk about it here, then there is zero marginal cost. That means you do not have to make any extra expenditure in its consumption. But here you have to make extra consumption.

6:07 Apart from these three points, if he asks more, then it will be fine. He asks only these three points generally. Okay? So you do not need to take more load. Okay? Clear? Now here we will see a little bit about what is this capitalistic and socialistic economy? We have to remember only two-three points in this and these are true that not many questions will be asked from this. If they are asked, then they will be asked from this. Capitalist and Socialist Economy. As an example, if I talk about it, like USA is an example in capitalism. The best example of this if you want to code and if we talk about it, then there are economies like Russia, China. Okay? Purely, look friend, no one is a capitalist. Purely no one is socialist. But yes, it is slightly inclined towards either capitalist or socialist. Okay? Like India, now let's know its features . Then you will understand what India is. Okay? So what happens here

6:53 ? Here there is private ownership. There will be private ownership in everything. Okay? What happens here? Public ownership. Now public ownership means that there is government ownership. Where public is written in economy, it means who is he talking about? He is talking about the government. Remember that. Okay ? So there is private ownership in capitalism and public ownership in socialism. This is the first point you have to keep in mind. Here the main purpose is profit. Here the main purpose is profit . There is no profit in socialism. In socialism, it is to do good to the people, to do welfare of the people. Okay? Clear? Here the government is very much involved. No, there is complete involvement. The government is looking after everything. There is complete involvement. Okay? There is zero involvement

7:42 of the government. Okay? There is zero involvement. Now what happens in between these is called mixed economy. What happens in between capitalism and socialism, that is called as mixed economy. Meaning, there will be private as well as public. There will be profit as well as welfare. There will be some involvement of the government as well. There will be some involvement of the public as well. That means it will be of the government. So this is a mixed economy. Like India. In India, we know that there are many such firms where there is private ownership. There are many such PSUs where there is government. That is why they are called PSU Public Sector Enterprises. But if we talk about the Government of India, if we talk about the Government of India, then earlier we were more inclined towards socialism, after independence, that is why

8:28 we implemented the five year plan, which we will read in today's lecture because they were inspired by Russia and Russia, as we told, is socialist and if we talk about capitalism, then it is called capitalism there . The main thing of capitalism is to earn profit. So you can see that India is gradually moving from socialism to capitalism. As you can see , the government is disinvesting. Disinvestment means selling public shareholding. Selling the government's shareholding in any organization . That is called disinvestment. So gradually you must be hearing that the government is privatizing the railways. It is privatizing it, schools are also being privatized or government schools are being closed. So what are all those things in private schools? Let us see in one way. So from socialism we are moving towards capitalism. Now we

9:14 come to the different sectors of the economy, let us read what are the different sectors of the economy? So the first thing is that there are mainly three sectors of the economy. Mainly how many sectors are there in the economy? There are three. Right? Primary, secondary and Tertiary. Okay? The primary sector includes those activities which are agriculture and allied activities. What do we say? Agriculture and allied activities. That means agriculture and related activities will come under the primary sector. Or we can directly say that the activities which are directly related to nature will come under the primary sector. Which are directly related to nature. Is this clear? Like for example agriculture is directly related to nature. Fishing, dairy, forestry,

9:59 mining, all these activities are covered under the primary sector. Now talking about the contribution of the primary sector to GDP, what is the contribution of the primary sector? If we go by the data of 2011, then the contribution is about 14.4%. And if we talk about LFPR, that is labor force participation rate, that is, how many people are employed in this sector, then the data is 54.6%. Okay? If we talk about the secondary sector, we also call the secondary sector the manufacturing sector. We also call it the manufacturing sector. So whatever manufacturing activities take place , what things are manufactured now? The thing which is made here or

10:46 not made from here, rather we can say that it is a part of the primary sector from here, like for example, this person took out this wheat. Right? The farmer. Now if it is processed from this. Flour, that is maida will be made from this. Then biscuits will be made . Everything comes under the secondary sector. That means every thing which is being manufactured, we keep it in the secondary sector. That means the things which are produced in the primary active sector, from there they will be processed and some good or goods will be made, then it will be a part of the secondary sector. If we talk about how much is its contribution in GDP? So you can assume that its contribution to GDP is approximately 31.1%. That is in Gross Domestic Product. Now what is GDP? We will see GDP later. Just after this we have to see GDP, understand what it is. And what

11:33 is the LFPR in this? 24.3% Labour Force Participation Rate. So automobile, food processing, electronics, clothing everything comes under the secondary sector, whatever is being manufactured comes under the tertiary sector. We also call it service sector. Why do we call it so? Because mostly services are offered in it. In tertiary sector. What kind of services? Health care services, education, financial services that is banking etc. come. Hospitality, hospitality means the services provided by hotels etc. what are those services ? These are of intangible nature. Meaning you cannot touch them. You cannot see them

12:18 . You can only feel them. Health care, education, like I am teaching you. So can you see? No. No, now you will say sir we can see, you are writing that I am offering you the service through which you are getting knowledge, can you see that knowledge, can you touch that knowledge, no, that means it comes in the tertiary sector, so education, banking, chartered accountant services, health care services, hospitals, everything of yours will come in the tertiary sector which is also known as the service sector. Its contribution in GDP is the highest 54.4% but if we talk about LFPR that is labour force participation rate, then it is the lowest. That is 21.1% contribution in GDP is the highest and

13:06 labour force participation rate is the lowest. On the other hand, if we talk about the primary sector, then the contribution is the lowest and maximum number of people are employed here. Now why is it so? When we look at unemployment, we will clearly understand why so many people are employed in agriculture but their contribution to GDP is not that much. Okay? This much is clear? Now we also call them something. Like the primary sector is called red collar jobs. The people who work here are called red collar jobs, that these are red collar jobs. Whereas if we talk about the secondary sector, then we call them blue collar jobs . Okay? Blue collar jobs. Whereas if we talk about the tertiary sector, then they are known as white collar jobs. Is it clear till here? If anyone has any problem

13:54 till here, then tell us quickly. Yes, railway workshop will definitely come in secondary, son Gajendra, improve yourself. All teachers and students, come on the road. So what are you doing? You are standing on the road right now.

14:41 Ok, it is not one, it is multiple. Ok, ok, tell me how much percent of GDP is of tertiary sector? Ok , what is this written? I mean you should not look at the comments. Anyway, let's come now. And yes, here, for example, no one asks much about quartile, quinary. Ok, I will tell you. But keep these three sectors in mind. Ok? In a proper way, if I ever ask about quartile, no one asks like that. What is quaternary sector? Ok? So this is knowledge sector. What is knowledge sector as an example, that we divide this tertiary sector also. How do we divide everything? So, for example, suppose someone is working in your house. He is mopping. He is sweeping. What is he doing? He

15:29 is giving you service in tertiary sector. I am teaching you. Ok? So I am also giving service in the tertiary sector. But if we see, the service of sweeping and mopping. Okay? With due respect, anyone can do that. Isn't it? There is no requirement of knowledge for that. But teaching, being a doctor means providing health care services, providing chartered accountant services , providing banking services, knowledge is required for all this. No one can do it. So we put it in the quaternary sector. And that is why we also call it the knowledge sector. Is this clear? And if we ask what is the queenry sector? So above queenry, there are decision making jobs. Okay? Your decision policy makers, policy makers, that is, our MPs and MLAs, they will come under queenry

16:19 . Okay? So this is a sub-division of the tertiary sector. Now let's come to the concept of national income. All those who are sleeping, please wake up. Because this is very important. The most common question is from the concept of national income and from the budget component like fiscal deficit etc. Because if you ask anyone right now, yesterday two questions were asked about fiscal deficit. Two questions were asked about fiscal deficit. So understand it properly. From this the main question will be from national income and budget. Okay? That is why I have written everything. So that too much means that your time is not wasted and all the things are finished in a very short time. Bomb shot does not mean that it is very heavy. Bomb means that all your work is completed in a short time. Okay? So I will try to

17:06 keep your lecture productive, do not waste my time by asking useless comments. Okay? I am writing a Bhai Saheb # Boycott Purse. Yes, you do this first. Okay ? We keep doing it, why do you do this? Why do you do it? Ask. It is like sorry. Let us start with the concept of national income. Keep in mind that this is a microeconomic concept. Okay? First of all, we have to know what are the methods to calculate national income. But before that, we have to read what are these two sectors of economy? Okay? Because if we do not understand two sectors of economy, then we will not understand the methods that we will read about now . What are two sectors of economy? Which is this one part of? This is a part of normative economics. What is normative economics?

17:55 Okay? What is normative economics? Normative economics works on the basis of opinion. It works on empty promises. Positive economics is that which works according to actual data. Did you understand? It is based on the actual data, actual fact, there is no need to write actual numbers, right? Normative works in a boastful way. That is, on the basis of opinion. It works on the basis of actual data facts. So, suppose there is an economy where there are only household firms. There is no government. There is nothing. No foreign investment is coming. Nothing is going from here. There is just a closed box in which there are households, every house and a firm. Right? Let us assume that this firm is producing something. For example, this factory is making bread. Right? Carefully. It is making bread. Now who set up this factory? Suppose

18:42 I set it up. Right? So what do I need? First I need land. We need money to build the factory. Tell me what all do I need? First I need land, then I need money which is called capital in economics. Then I need labourers to work. That means we need labour. We need three things: Labour. And then I need my own capabilities. I need my own intelligence. Okay? I need my own intelligence. This is what is called entrepreneurship. Not just anyone can do business. Intelligence is needed for business too. Intelligence is needed for business too. It is not like this that no no brother, here is the land, we have it. I have given this capital. These people have

19:31 given it. Run the business. Business does not run like this. Anyone who can run it is called an entrepreneur. Okay? These four things that are written here are called factors of production. What do you call them? Factor of production. Listen carefully. Okay? Factor of production. Now what will you call household? Man will come from here. Who will come from here? Man means labour. Okay? Land will be given by one of them saying that here is our vacant land. Take it. And capital will also be given by one of them saying that here we have capital and take this money. Okay? Listen carefully. Now this land , now this bread has been produced. Pay attention. Bread is produced. So when bread is produced and sold, what will he give to all of them in terms of land, who will pay rent on land,

20:19 pay interest on capital, pay wages to labour and entrepreneurship means he will keep profit for himself, when will he keep it, but when he sells bread, when he sells whatever good he has produced, to whom will he sell it, he will sell it to household, good will he sell it to household, then household will buy it , how will household buy it, from the wages that household has. Now now you know that you don't have to think too much in this because sir, wages have not been received yet because when household will buy, then wages will be received and then people will not pay. You have to assume that in the last cycle, they have already received the money for wages. Okay? There is no need to go too deep . There is no need to split hairs. Okay? Whatever is enough to get the work done

21:04 , whatever is enough to get our paper done, that much should be our concern. We are not sitting here to do PhD in Economics. So what will the household do? The household will buy this bread and give money. With that money, he will pay rent, interest , wages and earn profit. This is the two sector economy. What do you call it? Two sector economy. This is called factors of production. What do you call it? Factors of production. And this is called payment factors. Okay ? Or is it okay? These are factors of production. This is factor of payments or payment factor. Okay? Clear? This is called two sector economy. Where there

21:51 is no government, whatever these people are earning, whatever they are getting, they are using all of it to buy bread. All those who are getting wages, whatever rent they are getting, whatever dividend they are getting, whatever they are getting, they are returning it to the firm while buying bread. Then the firm uses that thing and then produces more every day and then sells it, so the cycle keeps going on like this. This is the simplest form of economy which is called two sector economy. Okay? If we talk about three sector, then government also comes into it. Government also comes into it. Then what does the government do? Then leakage and injection start from here . What starts? Leakage starts and injection starts. Now there was no government here. No tax

22:39 was being levied. No foreign investment was happening. No export import was happening. Nothing was happening. But as soon as the government comes, the government comes into the three sector economy. What happens in the four sector economy? Keep in mind in the four sector economy that foreign investment from private players also starts coming in. Keep this thing in mind. Now understand the meaning of leakage, understand the meaning of leakage. Leakage means that all the money was going to the household and everyone was buying bread, which means it again returned to the firm, again the firm from the household, from the household to the firm, from the firm from the household, from the household to the firm, but suppose the household gets trapped, it could not reach the firm, the money got leaked from the system, how can it happen if the government imposes a tax, because it will have to be paid to the government, then it will not reach the firm, the other way is if something is imported,

23:27 then why, because if you import, the money will go out, right? The money went out of the system. The money went out of the system. That means it has leaked . Right? Or the household saved. Can we save a little? Why spend all of it? What is injection? Injection means if extra money is put in, then export. If you export then Money will come in. Expenditures made by the government like subsidies etc. will all come in the form of injection. Did you understand? Or foreign investment has come, all these will come in the form of injection. This much should be understood. Two sectors, three sectors, four sectors, economy, leakage injection. If this is understood, then the methods of

24:14 calculating national income will be understood. There are three methods. There is no fourth apart from three. The first is value added method. What is the first? Value added method. Second income method. Third expenditure method. Let us come to value added method. First value added method. This is also called product method. What is it called ? This is also called product method. What happens in this? How much value is being added in each stage, if we calculate it and add it, then we get value added. That means sigma of gross value added is equal to the value added at every stage GVA1 GVA2.gva.n. Wherever it goes, all of them have to be added. For example, this is a farmer. He produced wheat, let's say,

25:03 worth ₹100 without any input cost. With an investment of ₹, he produced wheat worth ₹100 and sold it to the flour seller who must have bought flour for ₹150 from the farmer for ₹100 and then he must have sold it for ₹150 to the biscuit seller and the biscuit seller made it for ₹250 and sold it for ₹250. So what is the value? Now, if I talk about this, tell me, son, how much total value was added? How much total value was added in this entire process? So that we will get the national income, that is, what is the income of the nation. This is the first method to find out what is the income of the entire nation ? So what do some gentlemen do? Add 100, add 150 and add 250.

25:49 Write all these and add them. 200, 300, 400 and 500. And this is wrong. Why? Because how much value has been added? From here to here is 100. Because he has produced wheat worth 100. Right? Then from here to here or if you want to believe how much has been added in the first stage? In the first stage, that means here, you can only say that he sold here for ₹100. Then how much has he sold from here to here? Only value of ₹50 has been added. He had bought it for ₹100. Only value of ₹50 has been added. And if you see in the last stage, it has become 250 from 150. That means value of ₹100 has been added. So write 100, write 50 and write 100. What will come out is 250, this much value has been added and this is the country's GDP ₹250.

26:36 Do you understand how much value have we added at each stage? And if we had done this, then it would have been double counting. Why? Because this 100 is already included in this 150. 100 is already included in this 150. That 150 is already included in this 250. So if you keep on adding again and again, then there will be double counting error, which we shouldn't do. Then we come to the income method, I remember the factors of production, land, worker, that is labour, capital, entrepreneur, that is the factor of production, what do they get, what do they get, factor of payment, I remember, to the sector of economy, yes, how to the sector of economy, what are these people, households, giving, factor for production, they are giving, take our wages, take our land, take our money, we will give us money in return,

27:26 give us rent, give us dividend that is interest rate, what will we do in return? We will spend it and you give us goods and services. This is what was happening. This is what was happening. So what happens, wages, rent and dividend, this is what we call income method. In the income method, the income that is coming, interest, rent, wages, salary, profit, this is what we call it. Okay? Okay, what is operating surplus? What is operating surplus? Operating surplus is interest, rent, wages, not profit. Add all of them . Remove wages. Wages are not the part of operating surplus. Remember that

28:12 if you ever ask what is operating surplus? Wages are not included in operating surplus. OK? Clear? Now let's come to expenditure method. Expenditure means the people who are spending, consumer expenditure, if we tap it at this level, we will know how much is spent. Now who all are spending ? So its formula is we remember by chewing gum. OK? This is not the chewing gum of Motu Patlu. This is chewing gum. How is it chewing gum? Remember chewing gum. C is consumption expenditure. Consumption means the households who are spending. If this is a method of finding out the national income. This is another new way that whatever amount of money people are spending like I spent to buy T-shirts etc. you Also, the households must have incurred expenditures etc. So add up all the expenditures that are being incurred by the households

28:59 . So we will call it consumption expenditure. Okay? I stand for the investment, that is how much investment is coming. Okay? Yes, government expenditure. The government must also be spending some money. Add up that expenditure. And this is export. Remember, this is export. And this is import. Okay? Collectively we call it NX, that is net export. Net export means export minus import. Keep this in mind. Write it neatly. And this is the expenditure method to calculate the national income. So, did you remember? Recall quickly. Recall before we read the aggregates of national income. So, the first thing we read was that there are three ways to calculate the national income.

29:47 But we will understand those two ways only when we know them. Okay? How does this sector economy work from two factors two . There is no leakage injection in it. In this we saw what is the factor of production? Land labour, land, labour, capital and entrepreneurship. And if we talk about what factor payments are received? So labour receives wages. Capital gets interest, land gets rent, entrepreneurship makes its profit. Right? So, this factor payment, do we calculate it and say? After calculating this we say that it is the income method. It is the income method of calculating the national income. Then in the value added method we saw that we have to calculate only how much value has been added in each stage. And if we talk about the expenditure method,

30:35 then how much expenditure has been done which we calculate by the formula of Chagjam. He easily gives us your expenditure details. If anyone has any doubts about operating surplus, I have mentioned operating surplus. It includes your profit, rent, royalty, interest, etc. Wages are not salaries. Because keep in mind that wages and salaries are called as compensation to employees.

31:24 We also call it compensation to employees. And we do not include it in operating surplus. Okay? What is mixed income? It is mixed income. We also include mixed income in it. Okay? It is mixed income. For example, mixed income means that I may have invested some of my money somewhere, or given it to someone on interest. So the income that I am getting from that, that is a part of mixed income. Okay? It is called mixed income. Those who are self-employed. Okay? Those who are unincorporated businesses. Like for example, I am. Okay? The money I am earning, okay? That will become a part of mixed income. Because it is possible that I have not invested in land, labour, capital etc. Okay? I have

32:13 not bought land and started any business. I teach, I earn. I am self-employed. That means we will keep this in mixed income. So all these are part of the income method. Keep in mind. In the income method, your profit, wages, rent, interest, mixed income, all these come. Okay? Now, coming on to the aggregates of national income. We have seen the methods. Now let's come to aggregates. What are aggregates? There are total eight. Okay? We use value added method Priyanshi ji , we add the value added in each stage and then we get gross value added. How much value has been added in each stage? Gross value added is obtained after adding all and we call it value added method or product method. There are total eight aggregates to calculate national income. In which first of all we have to understand GDP. GDP. Okay? What does GDP mean? So the full

33:02 form I think let me write it. By the way, you should know this much, so Gross Domestic Product, what do we do in it? It is the value of all final goods and services produced within the territory of a country. Okay? Within the territory of a country. This territory is of India. Whatever value of good and service has been produced within it . Good means that which is of tangible nature which can be touched. Table means furniture,

33:47 laptop, AC, fan. All these things are called good. Service means I am offering you service. I know this much. So whatever is within the territory. This is a very important keyword within the territory. That is, what is being produced within the region is called GDP. Here comes another term which we call GNP, Gross National Product. Okay? Gross National Product is completely the same. I repeat again, completely the same. Value of all final goods and services produced. Everything is the same till here. In its place comes By the nations of a country. By the nations of a country. Finished. Even now some people might not have understood the point. This is India. This is USA. Suppose this is Australia. Yes, this

34:39 is Africa here. Okay? So understand carefully. I will not repeat this thing again because I am repeating it. Okay? Suppose those who are living inside India. Who is living there? Doesn't matter. Indian, American, African, anyone living in India, whatever goods he is producing or any service he is providing, with the value he is providing, if we add that, it will become GDP. Okay? Second, I told you about Gross National Product. I am only concerned with Indians in that. There will be Indians working here too . There will be Indians working here too. There will be Indians working here too and there will be Indians working in India. Yes. But there will be some foreign powers working in India. Let us assume that I

35:27 have shown it with a blue dot. Okay? Now, to find out GNP, what did I tell you about GNP? GNP means that I am concerned with these white people. I am concerned with these white dots. Who are these white dots? These are the people of India. So, I am concerned only with the people of India . So, now my GNP will be found out. Gross National Product. How will it be found out? So, Sir, first take the entire GDP. Okay? Remove these blue dots from it. I mean who are these blue dots? These blue dots are foreigners. What will they do? Whatever they earn, they will send it to their country. So, minus it. What? Factor income to abroad. And Sir, take theirs. We will send this to our country,

36:14 right? In India, yes. So you are adding it, right? You are blabbering so much? Factor income from abroad. Okay? That means I will get GNP. If I subtract factor income to abroad from GDP and add factor income from abroad. And this is what we call it ? GDP plus net factor income from abroad. Did you understand? You can write this in a roundabout way. If you want GNP from GDP, then you add NFI to GDP. Net factor income from abroad. End of discussion. Well, I had just said that there are eight aggregates. I have seen only two till now. Well, it was gross domestic product. Listen Bhaiya. Hey, it was gross domestic product. Was it there or

37:02 not? Now I want net domestic product. We were gross national product. We have seen both of these. Now I want net national product. What did I do? I connected gross. What did I do? I connected gross . Don't do anything. Take GDP and subtract depreciation. Yes, take GNP, subtract depreciation. Finished. Meaning, we are able to clearly understand that if I subtract depreciation, it becomes net of gross. Everything else remains the same. It becomes net of gross. Everything else remains the same. Depreciation is subtracted from depreciation. What is this depreciation? Depreciation is of capital goods. What is capital good? Good is of two kinds. Goods are of two kinds. One is intermediate

37:50 and the other is final. Intermediate are those which get consumed in the process. He brought tea leaves and made tea from them. The tea got consumed. Okay. Yes. And what are final goods? Final goods are of two kinds. How? Consumer goods and capital goods. Final goods are also of two kinds. Consumer goods and capital goods. For example, I brought tea leaves. Okay? I made tea. Should I keep it in intermediate or final? So the answer is if I make tea leaves and consume it for myself then it is final because it is not moving further in the further economic process. If

38:38 we are using something and making it a final good then it will be called intermediate. For example, the tea seller, right? Let's take for example Dolly the tea seller, he will not consume the tea himself. He will sell it. That means it has not ended in the economic process yet. It will move further. So for him tea leaves will be an intermediate good. But for us, whatever we consume will immediately become a final good. Did you understand? So much that intermediate means that it is used in the process. The thing that is being used in making the final good, for example, one factor is making biscuits using refined flour, so refined flour is intermediate. It will happen. There are two types of final goods. One is consumer and the other is capital. Capital goods are like for example I have my laptop with which I

39:26 generate my own income. I run my work. I have this pen tab in which I am wearing out. What will happen to it after a few days? It will get damaged. I will have to buy a new one. I will have to buy a new laptop. Will I have to buy it or not? Tell me. I mean it is getting depreciated. Then will it be final or intermediate? Because by using it you are earning money, you are teaching. By using it, son, I am using it, but is it getting consumed in that process ? Isn't it? That I took a class and the laptop got over. I can't see it. Come on brother, let's go and get another laptop. While writing, the pen tab got worn out. It got worn out, it got over. So then what happens is that either its system software will keep getting damaged from inside or it may be that it will start lagging. So I

40:15 will have to discard it. After a time period and that is called as depreciation, the original value is decreasing. And hence the concept of depreciation comes in. Okay? People who do business, pay tax, they depreciate whatever machines they have. On what basis? Depreciation is charged every year. Depreciation is charged at this rate. It is charged at this rate that suppose I have a laptop worth ₹1 lakh and I will discard it in 10 years, that means generally the government decides that a laptop will last for 10 years, that means every year one can claim approximately this much or how much. In this way, instead of depreciating 10,000 at once,

41:00 what can they do in every financial year on a regular basis? They can claim it. Okay sir, suppose we have a TV in our house and we watch TV, even if it is not being consumed, it would still be a capital good. You are not earning any money from it, so it would be a consumer good. But sir, we are not consuming it. Yes, that is why it is called consumer durable. What is it called? Consumer durable. Did you understand? It became four. GDP, GNP, NDP, NAP became four. No no, it became eight. How? Whatever I was teaching you just now, all these were at market price. Market price is of two things. One is market price and the other is factor cost. Market price means how much a thing is available in the market and factor cost means how much is that thing being made in the factory? Understood?

41:49 Market price means like when I went to buy a packet of biscuits, I got it for ₹15. But when it was made in the factory, what would have been its cost? Cost price. It is possible that now it has come to ₹10. So factor cost will be ₹10. Market price is ₹15. Did you understand ? So if these four indicators which I have just told you are at market price. Market price, market price, market price, all are at market price. All are at market price. Okay? All are at market price. If I write all these four at factor cost then it will be done. Will there be eight indicators or not? Four are at market price. Four are at the same factor cost. Okay. So if he ever asks me to tell you what will be GDP at factor cost? Then do you know

42:35 what to do? Whatever thing, whatever it means GDP, NDP, NAP, GNP, whatever factor cost is asked, take its market price and subtract the net indirect price. Subtract the net indirect tax. Why subtract? Understand that too. Like if I have to find the factor cost that how much was produced in the factory? So I should subtract it from the market price. Why? Brother, why did it become 10 to 15 by the time it came here from the factory? Because tax was levied on it, brother GST was levied on it. Now suppose I give you a course for ₹ 1000. I give you a course for ₹ 1000. But the government says listen, keep 18% reserved for us too. Yes. Ask the students. We will not say it directly. Otherwise we will become responsible. You take it and get abused but

43:24 give us the money. What will 18% do when 18% comes? We will increase the course fees. Why? We have to give it to the government, so consider the cost of manufacturing it as ₹ 1000. But because I have to pay tax, I increased it by 18%. This is what happens in market price. Why do you get a thing at a higher rate in the market than the factory? Then after removing that profit-fit, all profit off is included in the factor cost. Don't think that the one who is making it earns profit. Remove all that. Even after that, because the government takes tax, it increases. So what do we have to do? Subtract the net indirect tax. What is net indirect tax? Indirect tax minus subsidy. Right? Yes. If we assume that the government is levying tax, then because of this I will have to increase the price. The government will say that we are giving you subsidy. That means

44:09 give it to people at a cheaper price. Then you will have to subtract the subsidy. If the government is giving you any subsidy. Okay? So there is another way to write this. What is the way? Nothing. Put the minus inside. Finish. You must know this much mathematics. This will become minus and this minus minus will become plus. So there are many ways to write it. The point is the same. Did you understand? Did you understand how to go from gross to net? Depreciation is reduced. And how to go from domestic to national? Add NFII. And how to go from market price to factor cost? Let us subtract the net end ratio. Did you understand? Now say anything. Hey listen , tell me NNP at factor cost. Okay? And we are giving you GDP at market price. So do you know what I will do? First, do you know what I will do first? I want NP at factor cost.

44:56 So I will first find out NAP at market price. Why? I had just told you that if I want factor cost, then I will first find the market price of GDP, GNP, G, NAP, NDP of the same thing for which you have asked. So, this is the market price of GDP. I will first find the market price of NAP. How? First I will have to net this gross. I will subtract the depreciation. Then I will have to convert this domestic to national. I will add NFI. What does it become? NNP at market price has become . I will subtract the net and finish. Did you understand? Arey brother, did you understand or not? Then we have to come to real and nominal. What is depreciation? Depreciation is the radish of our field. We uproot the radish. It gets depreciated. What was going on here just now? What was going on? Intermediate, final good and capital good and laptop. What was all this going on?

45:51 Sir, I don't understand. I don't understand, right? There is an app, it is a very good app. Its name is Instagram. Post reels comfortably. It will be fun. Okay. Come here. Real and nominal GDP. Real GDP and nominal GDP. What is GDP? How much is being produced in the country? How much is being produced in the country, sir? Maybe laptops are being produced, ACs are being produced. There are a lot of things. There are a lot of things. Everything is being produced. Okay, let's take one thing. Let's take one thing, let's take biscuits. Absolutely good, our favourite example. Let 's take biscuits. This is a factory. Now let's assume it. Okay? And this year too, wait a second.

46:42 Let's take two years. Let's take this. The year is 2000 11. Okay? Why buy it for 11? Let's buy it for 15, from 10 years ago. And this is today, the year 2025. Be careful. Okay? Now, assume that the Parleg that you are eating today costs ₹10. Earlier, in the year 2015, it would have been available for ₹5. Brother, if you want to go this far , very far, then go to 2010. If you want to go much further, then go in 2010. Tell me, which class were you in in 2010? In 2010. So, the Parleg that was available for ₹5 in 2010, is available for ₹10 today. Okay? Okay? You won't understand like this. Understand the example of a factory. Okay? So, assume that this is a factory. Okay? I was saying that in 2010, it

47:31 was contributing ₹100 to GDP. And today this same factory is contributing ₹200 i.e. making biscuits worth ₹200. Earlier it was making biscuits worth ₹100 and now ₹200. So what can we say Sir? Its contribution to GDP has doubled. Why? Sir, you can't see clearly. 100 has become 200. So earlier it used to make biscuits worth ₹100. Now it is making biscuits worth ₹200. So you can't see that it has doubled. I won't say it son. If possible, you can't see the other side of the coin . Actually, the production has decreased. How? Let's assume that the price of biscuit here was ₹5. The price of biscuit was ₹5 and 20 packets of biscuits were being made. Only then will the contribution of ₹100 come. 20 * 5 = 100

48:20 will come only then, right? Tell me brother. Only then will it come. But the same ₹5 biscuit has become ₹20 today . How much? It has become 20 today. The biscuit has become ₹20. The biscuit has become ₹20 and for ₹200 he is making 200 biscuits. Meaning he is making only 10 packets sir. Yes. Earlier he was making 20, today he is making 10. So it means the prices of things have increased. So please if you remove it, that means you will remove it. I mean if you make it only for ₹5 If we assume the price to be ₹50 even today, the contribution to GDP has halved. And this thing which has increased from 5 to 20 is called inflation. This is the next topic. This is our next topic which we call inflation. So if

49:07 I remove this inflation, did you understand? If I remove this inflation, what will come? Real GDP. And if I don't remove it, then normal GDP will come. That means real GDP is adjusted for inflation and it is not adjusted for inflation. That means the air of inflation has been taken out from this. It has not been taken out from this. How do you take out the air of inflation? Now we will give a needle, it will come out from that, we will tell you now what

49:54 happens in real, what do we do, let's assume a base year, it is calculated at constant price, that is called real GDP. This is calculated at current price. Constant price means that I have assumed a common price of ₹5 for a biscuit. Whether it was produced in 2010, 15, 20 or 25. I will assume it to be ₹5 only. Everything will be clearly understood, how many units you are producing and how much your production has increased or not, whether it is appearing more due to inflation in real. So let's take a constant price. For which we determine a base year. The base year which used to be 2011-12 earlier but now it

50:44 is 2022-23. Now know what that needle is. That needle is called price deflator. I am writing its formula in Hindi, Mudra acceptance factor Mudra acceptance factor Nominal GDP. Nominal GDP upon Real GDP * 100, this is what we call price index or GDP deflator or price index. Okay? Pay price deflator or GDP deflator and price index

51:35 nominal upon real * 100 and then comes GDP deflator which is called price index . Tell me the answer of this question in the comment. And that is in which case the value of GDP deflator will be 100. It will be 100. In which case? [Music] So when nominal and real GDP are equal then I understood the thing Sir, what is subsidy,

52:21 what is subsidy, so brother, when you buy gas cylinder etc., does the government give subsidy in it or not? The transfer payment made by the government is called subsidy. Transfer payment like ₹1000 given under Ladli Behna Yojana. ₹500 given under any other scheme, then these are called as subsidies. These are called as transfer payments. Okay? When both are equal. This is absolutely correct. When both are equal, normal and real GDP. Tell me in the comment what is green GDP? What is green GDP? What is Green GDP? And what is Potential GDP or leave it or tell me what is recessionary gap.

53:07 What is recessionary gap? So remember Green GDP is when we subtract the environmental damage from the total GDP. Remove the environmental damage. That is Green GDP. What is recessionary gap? What is recessionary gap? Potential GDP. This is the potential of India's GDP. This is the potential of GDP. But how much is it now? How much is it? Now subtract that. That means Potential GDP minus Real GDP. Like your potential is to study for 10 hours . But how much are you studying? 7 hours. So there is a recessionary gap of 3 hours. Okay? Did

53:57 you understand Green GDP? Does GDP in does increase in GDP mean welfare of people? Tell me. If GDP is increasing? So it necessarily means that welfare of people is improving. So answer is no. Okay? If GDP is increasing that does not necessarily mean that people are getting welfare because it is possible that contribution to GDP is happening only at some places . Okay? Clear? For example, let 's say I am here. Okay? For example, let's say Ambani is here. This is Adani . They are producing a lot of money . They are doing a lot of things. Who will get this money? Only they

54:42 will get it. Is this improving people's welfare? The answer is no. So then it means that if GDP is increasing then it does not necessarily mean that people are getting welfare. Okay? So the answer is no. Okay? It does not necessarily mean that. What is personal income? Look at personal income, if you take national income. Okay? If I talk about personal income, then the total income of individuals, whatever income they are earning from all the sources, do we call it? Personal income. Is this clear? The entire personal income that all the people are earning individually. There is a formula to calculate it which we should know.

55:28 In personal income is equal to national income, you will add what? Income received but not earned and subtract income earned but not received. Okay? For example, what is the income that is received but not earned , transfer payments from the government. Yes, transfer payments example, the Government of India is giving subsidy, the Government of India is also giving scholarships, the

56:17 Government of India is giving pension etc. You have not done anything, right? You are getting subsidy for that, suppose brother ₹ 1000 Ladli Behna Yojana, you have done something, it was just your loveliness due to which you are getting it, so subsidy, scholarship, scholarship, pension, these are just part of transfer payments. So let's add them. Because you received it but you did not earn it. And what is that income which is earned but not received? So what are the undistributed corporate profits? Undistributed corporate profits. You invested somewhere. Okay? You made your profit. You invested somewhere and that company performed well. But

57:04 what did you get from that income now? You haven't received it. You may get it in the next financial year. So it has to be deducted. Is this clear? So how is personal income calculated? You add transfer payments and deduct undistributed corporate profits and from there personal income is calculated. Okay? Now talking about what is PDI? PDI stands for Personal Disposable Income. Yes, disposable income is called disposable income in Hindi. Okay? So disposable means that after paying all the final taxes, how much income is left with you that is called disposable income. The income you have and the tax you have paid, after deducting that,

57:51 the remaining income is called disposable income. That means personal income minus tax. You deduct the tax that you will pay to the government. Because suppose you got a government job. You are earning say 70000 rupees per month. Okay? How much is it for a year? 8,400 out of which 400 can be there. Right now it is exempted up to 12 lakhs. Okay? Almost up to ₹1.5 lakhs. But let us assume that your income is 2 lakhs. So it is 24 lakhs. Out of 24 lakhs, you have to pay 1 lakh tax. I have said this less. You have to pay 2 lakh tax. Okay? You have paid 2 lakhs as tax. So the 2 lakhs that you have paid as tax, you cannot spend it. It has to be given to the government. So the remaining 22 lakhs will be your disposable income. Okay? So tax has to be deducted. That

58:38 is personal disposable income. Is that clear? Is it clear till here? Is it clear till here? Ok. What is the rank of India? If I talk about the rank of India in terms of GDP, then remember India currently comes at number four. USA comes first, China comes second, Germany comes third, India comes fourth. We have left Japan behind . Okay? Germany soon but this is in nominal terms, in actual. On the other hand, if we talk in terms of PPP. What is this PPPP? PPP stands for purchasing power parity. Purchasing power parity. Okay? Purchasing power parity. This

59:29 is what PPP means. What is this thing? So actually we take a common basket of goods. We compare them. For example, like wait a second. There is a place here. Look at the place here. For example, let's say there is a soap. Okay? There is a soap. It is sold in the USA. It is sold in India. I have $1. I have $1. How much is $1? How much do I think right now? 88 is going on. How much is it going on? Let's assume 89 or 90. Tell me, let's assume 90. I have approximately assumed 90. I think it is around 85. OK? Let's assume 90.

1:00:18 A soap is available in USA for $1. OK? The soap which is available in India, the same soap is available in India. Do you know the price? ₹15. It is available for ₹15. Meaning that I can buy six soaps with $1. I can buy six soaps with $1. Meaning, where is the purchasing power of this $1 more? In India or USA? In India, it is able to purchase more things with it. We take some common basket of commodities which are available in USA as well as in India and then compare them and calculate GDP in those terms because their dollar is highly inflated, isn't it? Okay? Their dollar is quite inflated. It is highly inflated. So it will appear that their GDP is very high. So that is why

1:01:04 purchasing power parity means that we are looking at purchasing power. Okay? Okay? Let's take a common basket of commodities, let's say some set of commodities. And then when we compare, our GDP rank in terms of PPP is third after USA and India, USA and China. Okay? So in nominal terms our GDP rank is fourth. Third in terms of purchasing power parity. Okay? Clear? That's it. We are ranked third in terms of purchasing power parity. Let's now come to what is inflation? What is inflation? So simple inflation is the increase in the prices of things. The increase in the prices of things is called inflation, which we call

1:01:50 increase in the general level of prices. Okay? That is increase in the general level of prices. That is called inflation. Now when this happens, okay? Now when this inflation happens, what happens because of it? Due to this the purchasing power decreases. The purchasing capacity decreases. Purchasing power decreases. How does purchasing power decrease?

1:02:35 Like I had ₹1000 5 years ago. Okay? 5 years ago I lent this to my friend. Okay? He returned ₹1000 to me . Look brother, the work is done. Okay? After 5 years. So what will I call this? Will I call it my profit, loss or nothing. Nothing happened? No, profit non loss. What will you call it? What will you call it? So you will call it more profit not loss. Why? Because I gave 1000. I got 000. The answer is no. The answer is loss happened. How? Then when I observed that whatever things I was able to buy in ₹1000, 5 years ago,

1:03:25 I could buy a t-shirt and a pair of jeans for myself. Okay? T-shirt for ₹400 and jeans for ₹600. But today the case is that a single pair of jeans is available for ₹1000. That same pair of jeans is the same pair of jeans. The same pair of jeans is available for ₹1000. That means today the purchasing power of ₹1000 is no more. It has decreased. Why? Due to inflation, the prices of things have increased. The prices of things have increased. So, you will not be able to buy as much as you were able to buy earlier in ₹1000. So what happens in such a case? When the purchasing power decreases, the lender, who gives the money, incurs a loss and the debtor makes a profit. Whoever borrows money makes a profit. Clear? Okay? Did you understand till here

1:04:12 ? And this is Irving Fisher's theory of money illusion. The concept of money concept where people feel that I have earned ₹ 1000, I gave you an example that it seems that there is no loss, no profit but there is a loss. Isn't it? Like Irving Fisher said that when the salary of workers increases, for example, 5 years ago he was getting ₹ 100, okay and today he is getting ₹ 100, then he becomes happy that look, his salary has increased by 10,000 but actually his salary has decreased because this is an illusion of money. Illusion means it is a false concept. It is a false notion. It seems that it has happened but in reality it has not happened. For example, the things that a worker would have been able to buy for Rs. 20,000 5 years ago, which he cannot buy even in Rs. 100 today,

1:05:00 he needs Rs. 35,000 to buy them. This means his salary has decreased by Rs. 5,000. This was given by Iroving Fisher. And he gave an equation MV = PT. Where M is money supply, v is velocity of circulation of money, p is your price level and T is transaction. Velocity of circulation of money means how many places, how many times, where all did a note go, where all did it travel. For example, I withdrew money from the bank KTM. Let's assume I withdrew a Rs. 100 note. I gave that Rs. 100 to someone. May be to a vegetable vendor. The vegetable vendor may have given some money to a clothes vendor . The clothes vendor paid his child's school fees. So how much did it circulate? That is the velocity of money. Okay? Who gave the term mv = PT? He gave it. Okay? So did you understand the concept of inflation?

1:05:48 So what is inflation, a dirty thing. We will see later what kind of dirty thing it is. But inflation is of different kinds. If we see, then inflation depends on the basis on which we are classifying it. If we are classifying it on the basis of its rate, that is, how the price of things is increasing. So if it is increasing gradually, that is, increasing by 3 to 4%, then it is cupping inflation. Isn’t it? A little more it becomes walking inflation and more it becomes running, galloping, hyper inflation which becomes quite severe. Then is it clear here? Now we will see what is the cause of inflation here? Okay? What is the cause of inflation here ? Demand means there are two types of inflation. One is demand pull

1:06:34 and the other is cost push inflation. Demand pull inflation means that the demand of the people has increased, for example, suppose people were buying tomatoes. People were buying tomatoes. Okay? Now what happened suddenly? Their price, their income increased a lot. Okay? Like if someone was earning 10,000, then 15,000 means a lot more money has come into their hands. They will demand more. But sir, the production has been the same. For example, suppose only 10 kg of tomatoes were produced. I used to give 1 kg each to 10 people. But those 10 people are still there . Okay? There are still 10 kg of tomatoes. But what is he saying? No, he wants 2 kg and not 1 kg. Why? The production has increased. So he will increase the price. Why? Because he has only that much. So whatever he has, he will increase the price and pay. So if

1:07:21 someone does not have that much money, then he will automatically be left out because he has only that much. So this is called demand side inflation. Caused by an increase in demand. Increase in demand is called demand side inflation. This happens due to increase in production cost. It is called cost push. Production cost means the cost incurred in making things. It is possible that the cost of producing tomatoes has been higher this time because it rained at the wrong time and the crop got ruined. It is possible that this time they used to use urea as fertilizer. For example, if you know,

1:08:07 you should know that the price of DAP, which is di-ammonium phosphate, is very high. If any of you are associated with farming, you would know that DAP is running at a very high price these days. So, if DAP is running at a high price, then as a farmer, I had to pay more for it. So, whatever I sell, I will sell it to you at a higher price because the cost of production has increased. That is why this is called production. This is demand side inflation and this is supply side inflation. Okay? Demand side inflation and this is supply side inflation. Is this clear? Okay? Now let's come to the measures of inflation.

1:08:55 How do we calculate inflation? How do we find out about inflation? There is this much percent inflation, there is that much percent inflation. How do we find out? There are indicators for that, Sir. Can you see it? CPI Consumer Price Index. Are you able to see ? Wholesale Price Index. We can check it at two levels. One is if we want to see at the wholesale level. We have to see in bulk. Wholesale means wholesale goods are available at cheaper rates, right? Offers are available. For us, wholesale means that as a consumer, we are getting the price at which we buy it. For example, I have this mobile. Now, as a consumer, I got this mobile for ₹ 00. But the person who has bought it in wholesale would have got it for ₹ 400. It would have been available for less. Hmm. So, if we check at the consumer level, then Consumer Price Index is an

1:09:43 index and if we check at the wholesale level, then it is Wholesale Price Index. Right? This is called WPI. What is it called ? WPI and this is called CPI. Consumer Price Index, Wholesale Price Index. This is calculated by the Office of Economic Advisor which comes under the Ministry of Commerce and Industry. Who calculates this that is CPI? National Statistics Office which comes under the Ministry of Statistics and Program Implementation. If I talk about the base year

1:10:28 in CPI and WPI, then the base year is 2022-23, I just told you. Okay? 2022-23 is there in this as well. In this also a set of commodities is taken in CPI. Then it is seen how much inflation happened, how much did not happen and it is also taken in WPI. If I talk about the weightage distribution of CPI, then food and beverage.

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