SSC GK PYQ SERIES 6.0 | ECONOMICS LEC-3 | FOR ALL SSC EXAMS 2026 | BY PARMAR SSC

0:27 So hello everyone and good morning to everyone. Call that boy. Where is he gone? The one who was giving 500 euros. Call him right now. Introduce that boy. The one who was giving 500 euros for being on time. Call him. Call him quickly and you guys should also learn to be on time. Okay, this whole lateness thing won't work. I'm telling you. Okay, right? No? Where has that boy gone? The one who was giving

1:16 away 500 euros. Greetings, welcome. Okay, greet me, greet me. Sir, he's from Kanpur. Okay, is it raining or not? Why does it feel like the weather is bidding farewell to the year's fall? Why did the year fall? Did the year fall or not? Let's turn the tables. It's fine now. Come on. You know tomorrow's class. I already told you. It's at 9 o'clock in the morning, okay? Tomorrow morning, it's only for tomorrow, right? It's at 9 o'clock. Okay, and bring the rest of the gift tomorrow. And okay, come

2:03 tomorrow with the song ready. If you guys don't sing the song Ji-O-Ha-Za-Ran-Sa-L, Long Live Thousand Years, I'll tell you later. Okay, are you still able to hear it? Okay, now. The roof blew off at night. Okay, the roof blew off at night. Hmm. Let's get started. Ah, today's going to be the third lecture on economics. And hours of studying, now the entire lecture in minutes, in just one page. So those of you here who are in the digital notes batch will also be getting mind maps of the lectures, so that you can quickly get one, in a single PDF, sorry, and revise everything on a single page. Okay? So, a new way to study economics. Download the Clean Style Notes from Parmar ACC

2:52 Dummy app and start studying. Okay? So go to the courses section on both the Play Store and the Apple Store, download it, that is, install it, and you'll find it in the courses section. Okay? Let's get started. Okay. We get quizzes and the like. Those in the LI course also get quizzes lecture-wise. And the weekly 100-question quiz, when we finish a subject, is free for everyone. Okay? This 100-question quiz. So just keep doing it, keep revising, keep studying, keep revising, and you won't need to do anything else. Just revise this again and again, as many times as you can. Polity and geography are done. We're doing economics. We're doing as

3:38 many subject-wise subjects. When we're done subject-wise, we'll move on to mixed, okay? Just keep revising well. Everything will be done. Okay, sir, it's my birthday tomorrow. Please pay me 500 rupees. So should I do it or will you? The union budget is presented for this period For what period is the union budget presented? It's the calendar year, the fiscal year, the financial year, or the financial year from April to March, or from June to, sorry, July to June. So we know about the budget. Article 112 doesn't mention the budget. It's the annual financial statement. It's presented in the name of the president. Always remember, the president shall cost to be led before both houses of parliament, right? This is the annual financial statement of estimated receipts and expenditure. Estimated

4:25 receipts, receipts. Receipt means income and expenditure means expenses. No, the budget is presented in the name of the president to indicate the government's income and expenditure in the next fiscal year. But who presents it? Who presents it? The union finance minister presents it, right? If we talk about the rest, who prepares it? So the Department of Economic Affairs, which falls under the Ministry of Finance. Keep in mind, it's named after the president. It's the finance minister. And who prepares it? The Department of Economic Affairs, which falls under the Ministry of Finance. And for what time period? From April 1st to March 31st, which is your financial year, right? It is a financial year. You'll understand its importance once you get a government job. As soon as the end of March approaches, the office staff will make a mess of you, right? That means the work

5:15 pressure increases significantly. Well, we've already seen this. The vertical devolution, the tax share with the states, is 41%, which was the same before. And the 16th Finance Commission also recommended keeping it the same, right? Otherwise, you can recall from here what we covered yesterday about the two taxes that the central government doesn't have to share with the states. So there's a charge charge, which is a tax on tax, and there's a cess, which is levied for a specific purpose. We've studied taxes, one being direct tax and the other being indirect tax. What did we learn about direct tax? Firstly, it's progressive in nature. It's proportional in nature. Direct tax has to be paid directly to the government. You can't bypass it. you pay it indirectly to the government. Regarding direct tax, we've read about this, which was previously asked in the TCS question. It hasn't been asked yet in the additive, and that was that the marginal tax rate is

6:04 higher than the average tax rate. What are other examples? There's gift tax, wealth tax, income tax. There are all these. Now within this, there's the concept of paper tax. What is paper tax? Paper taxes are those taxes from which the collected amount is very low. Very little is collected. For example, gift tax or wealth tax. The government doesn't earn much from these. That's why they're called paper taxes. You know there used to be many indirect taxes. So to eliminate that cascading effect, we introduced a goods and services tax under the One Nation, One Tax, GST. This was introduced through the 101st Constitutional Amendment Act of 2017, where, as you know, Article 279A was inserted, making the GST Council a constitutional body. Who is its chairman?

6:54 The Union Finance Minister is its chairman, okay? Done. Now, if you can see this here, you don't need to see it at all. Whatever you can see. The only thing you need to keep in mind is that I've already told you all these things. The first budget was presented by R.K. Sharmukh Chetty and the second budget was presented by John Matthai. Mararji Desai holds the record for presenting the most budgets so far. He has presented the budget 10 times, right? P. Chidambaram has presented it 9 times. Nirmala Sitharaman has also presented it 9 times. The next time she presents the budget, she will equal Mararji Desai's record. Pranab Mukherjee has presented it eight times. The important thing to keep in mind here is what are the functions of our budget?

7:40 The functions of the budget. This is an additional thing you need to note. The budget has three functions. What? The first function is the allocation function. Allocation means allocating how much will be spent on health, how much will be spent on education, how much will be spent on defense. This is how money is allocated. Redistributing the money is called the distribution function. The distribution function means, for example, you know that the government levies taxes. So what does the government do by imposing taxes? It does the Robin Hood panda thing. What is Robin Hood's work? Robin Hood's work means collecting taxes from the rich and distributing the money to the poor through social welfare schemes. You know about the social welfare schemes that are running, and whatever the government spends on social welfare, where does that money come from? It comes from the people who pay

8:26 taxes to the government, so in a way, money is being distributed. The third function is the stabilization function. Within the stabilization function, we have fiscal policy. I think we haven't yet studied monetary and fiscal policy. If it won't be covered in the lecture today, I'll introduce it. So what happens is that, for example, the government stabilizes the economy. You'll learn how it does that later. But yes, understand that the government stabilizes the economy whenever it becomes destabilized, whenever there's high inflation. And when the economy isn't generating enough demand, or when people aren't employed, it tries to stabilize the economy a little. You have to keep this in mind. Okay? Okay. Next up is the as of Feb 2025 ST individuals compared to total population in India. By February 2025, what

9:13 is the percentage of scheduled tribe individuals in India? 8.6%, 5.5%, 9.8%, or 12.2%? So we're talking about the ST population here. So let's look at the ST population here. Well, let's recall a little bit of what we've read so far. We've read what's the Hindu population? What's the Muslim population? You have to keep this in mind. And you have to keep in mind the Buddhist and Jain populations. And how much growth has there been among Hindus and Muslims? You have to keep this in mind. So Hindus constitute 79.8% of the population. If we talk about Muslims, they have 14.2%. If we talk about Buddhists, they have 0.7%. And if we talk about Jains, they have 0.4%. Now, how much growth has there been here? If we talk about the growth, the decade has been 16.8%. Muslims have seen a higher growth of 24.6%. You have

9:59 to keep this in mind. So we've just read this. So here we're talking about the scheduled caste population. The scheduled tribe population is 16.6%. According to the 2011 census, India's total population is 1.21 billion, of which 16.6% are scheduled castes. That's 8.6% of your ST population. This is the ST population, right? So where is the highest percentage of SC population? Ah, in Punjab. Where is the lowest? In Nagaland, the highest percentage of ST population is in Mizoram. And And where is the lowest? In Punjab, right? So keep in mind that the highest percentage of SC population is in Punjab, and the lowest percentage of ST population is also in Punjab. So these are two things you have to keep in mind. Right, and which is your largest tribal population? I mean, which tribe has the highest population? So it is Pill, right? Then it is

10:45 Gond. Then comes Santhal. So you will see the highest Pill population. India had to approach the IMF and World Bank in 1991 for a bailout loan. Foreign exchange reserves had declined to the point that they could barely finance two weeks of imports. So we know that in 1990 we were in trouble. Why was it? Because there was a severe balance of payments crisis. Now let's talk about the balance of payments crisis. That is, why did this balance of payments crisis occur? It happened because we didn't have enough foreign reserves. Foreign exchange reserves mean ours, because, for example, when we buy goods from any country, say the U.S., we have to pay in dollars. If the U.S. buys something from us, we have to pay in rupees. So, when we sell

11:31 something to any country, for example, to the U.S., the U.S. dollar will come. For example, if we sell to China, the yuan will come. If we sell to Japan, the foreign currency of the country we're selling to will will come and we'll use that for further imports. Now our foreign exchange reserves were pretty much depleted. Depleted means just two weeks, also known as fortnight. That means we had foreign exchange reserves for about 14-15 days. So we realized we were doomed. How would we survive for two weeks? That's why we had to approach the IMF for a loan. The IMF and the World Bank are called twin organizations. They're called twin organizations because both were

12:17 established in 1944 at the Bretton Woods Conference, right? Keep that in mind. Forget about the World Bank. Just remember that the World Bank was originally established as the IBRD, International Bank for Reconstruction and Development. Later, it became the World Bank. So the statement that India approached the IMF and World Bank in 1991 for a bailout loan is correct. Bailout means the same money that Pakistan goes to get every day. There's a question about foreign exchange reserves and, again, impact reasons. I always tell you that whenever you study impact, Add the reasons, because you'll understand whether the impact reason is a correct explanation of impact or not. So India had to approach the IMF and World Bank for a bailout in 1991, because

13:04 our foreign exchange reserves had declined to the point that they could barely finance two weeks of imports. So both are correct, and R is the correct explanation of A. Now understand here that you should know that 1991 was called the year of economic divide. Why? Because after that, we made significant structural changes to our economy. Because we were still living in great fear. I told you in the first lecture, we were very fearful until 1990, thinking we would completely save our economy. We won't allow private players. We won't allow anyone from abroad. So we had a very restrictive mindset. Then, when we went to the IMF for a loan, they said, look brother, you'll have to remove all these things. Why? because we're giving you a loan and we need it back and you won't be able to pay it back. So you'll have to

13:50 introduce some structural reforms. At that time, PV Narasimha Rao was the prime minister. He was also the prime minister when the 73rd and 74th amendments were passed in 1992. And Manmohan Singh was the finance minister. That's why Manmohan Singh is given a lot of credit for the financial crisis we faced in 1990. Manmohan Singh played a major role in getting us out of the economic crisis we faced. Okay, so Manmohan Singh, who was the finance minister at the time, primarily suggested these reforms. LPG, liberalization, privatization, and globalization, which we've already discussed a little bit. What were the main elements of these LPG reforms? Don't assume that the four reforms involved anything other than LPG. LPG reforms mean these four reforms. I can say that reforms were implemented under these four

14:37 heads. For example, export subsidies were abolished. Other cuts were imposed. The rupee was devalued. Now, this is a variant. The question asks, how many times was the devaluation done? So it was done twice. Once, if I'm not wrong, it was done on July 3rd. And once on July 11th. Something like that was done. Meaning, twice within a very short time. By the way, he won't ask you for the date. But it happened in July 1991. It happened twice. The first time it was 9%, and the second time it was 11%. So how much percent was the devaluation? 20%. The question is, what is devaluation, and why was it done? Devaluation means reducing the value of your domestic currency. Devaluing it. For example, today one dollar is worth 90 euros, right?

15:24 It is. So, if the government makes one dollar worth euros 100 euros, it would be called devaluation. Now, what happens is that our domestic currency doesn't have a place here. If it doesn't, it's okay. Understand that the government can either deliberately devalue its domestic currency or it can devalue itself. For example, if we look at it now, the value is falling on its own, right? That's why Modi's meme is created, in which he's holding a coin to his forehead and hitting it from behind, indicating that the currency is falling. So it's not the government that's causing it to fall. It's falling on its own, right? If it falls on its own, then it's called the currency depreciating. What is it doing? It's depreciating. Depreciation is occurring. And if the government

16:14 does it on its own, deliberately, then the market is adjusting accordingly. Here, the government is intervening. So this is called devaluation. The opposite of this is appreciation. And if the government does it, then it's revaluation. Meaning, if one dollar is currently worth 90 euros, then one dollar becomes 80 euros, then the value of our domestic currency has increased. Did you understand? So if the government is doing it, then by doing valuation, that word will be added. Now the question arises, why did the government do this? It did so because you should think for yourself. $1 is fetching 90 euros. Then after devaluation, $1 is fetching 100 euros. So, if I am an exporter, if I was selling goods worth $1, I was getting 90 euros. Now, for the same $1, I am getting 100 euros. So it means that exports become competitive. When the rupee

17:03 is devalued or depreciated, exports become competitive. This means that exporters benefit while importers suffer. Why? Because if they were importing $1, they would have to pay €90 earlier. Now, they will have to pay more. The opposite of this is appreciation. It will be done in the revaluation. Control on licenses and Inspector Raj. So we also saw how the license Raj was first introduced in 1951. But in the second IPR industrial policy resolution of 1956, the license raj was greatly strengthened. Then, in 1991, this license raj was abolished, except some industries, for example, defense, atomic energy, and railways. Things in these were still reserved for the government, meaning private sector could not enter. Now, gradually, privatization is taking place in railways.

17:51 Otherwise, earlier, it was only defense, railways, and yours, and other important factories like these, which were hazardous. They were hazardous industries. For example, we saw the Bhopal gas tragedy in 1984. It was indeed hazardous. Methyl isocyanate gas was released in 1984, right? From the Union Carbide Company, it became a hazardous factory, or let's say the tobacco one, right? Liquor. All of these still required licenses, right? So the license raj was abolished overall. But with some exceptions, the public sector was given more operational freedom to scale up. Rather, privatization was done here. Private players were invited. Because when private players come, they bring technology. They are competitive, and

18:36 this increases efficiency, right? Which of the following refers to the extent to which demand for a particular commodity decreases because others are also consuming the same commodity? Let me give you an example. An example is the iPhone. The iPhone was once a big hit. It wasn't in demand because only a few people had them, because they were expensive phones. Today, if you look around, even the KTM rider carries an iPhone, right? So what does this do? What happens is that those who used to feel a little bit of prestige, a sense of privilege, say, "Wow, I have an iPhone." Now they'll think, "Look, even this guy has

19:24 an iPhone. Now I'm not buying an iPhone. I'll buy a Samsung S24." This is the snob effect. When everyone starts buying something, its value decreases because everyone starts buying it. A snob effect. The opposite of this is the bandwag effect. Since everyone is buying it, there must be a reason for it. That's the bandwag, right? The same thing is written here. I told you about other Veblen goods. There are such high-end goods where the demand curve doesn't work. The demand curve says that as the price increases, the demand will decrease. But for Veblen goods like iPhone and Mercedes, as I told you, as their price increases, their demand increases. Why? Because they're associated with the social status of prestige. Simple. Okay? What does a lower score on the Corruption Perception

20:10 Index closer to zero indicate? The Corruption Perception Index ranges from 0 to 100. Transparency International releases this. And in this, 0 means more corruption. 100 means less corruption. If we talk about India, according to the 2025 data, India's rank is 91 out of 182 countries. And if we talk about India's score, it is 39. Okay? 39. And we performed better than our other neighboring countries. Except Bhutan, like Pakistan, ranks quite poorly at 136. Kang, sorry, Bangladesh, is even worse at 150. Others like Bhutan are performing better than us. It's written here, you can see 91, 39. These are

20:56 your laggards, Somalia and South Sudan. Okay, and the rest are fine. you can see Afghanistan, okay? Lowest and Bhutan, 71, is the leader here. We're talking about regional leaders. Okay, let's move on. In which year did the National Stock Exchange begin its operations? In which year did the National Stock Exchange begin its operations? The National Stock Exchange started in 1994. Option number A is straightforward here. Yes, from here, a question can definitely be asked about the Bombay Stock Exchange. The BSE, is Asia's oldest stock exchange. It's the oldest in Asia and the fourth oldest in the world. It was established in 1875, the year the Arya Samaj was established, due to which your Satya Shodak Samaj was established two years ago. In the same year, 1875, the Bombay Stock

21:45 Exchange was established. By whom? Premchand Roychand. Now imagine how visionary he must be, right? When it was first established, its name used to be something else: Native Share and Stock Brokers Association. Later, its name was changed, right? Bombay Stock Exchange. Then, if we talk about some other similar financial institutions, like SEBI, our Securities and Exchange Board of India, it was established in 1988 but received statutory recognition. That is, the act came in 1992. Panda is its chairman. Its headquarters is in Mumbai. Its job is to safeguard the interests of investors. Whether they are investing in mutual funds, shares, stocks, or the securities market, safeguarding their interests is the main function of SEBI. Similarly, Cytibia exists in the same way. It is not written. It is written here. It is written.

22:32 I am associating CydB with SEBI because it was established in 1988 and got state recognition in 1992. So the year in between is 1990. CydB was formed in that year. Its headquarter is in Lucknow. Okay? Then should we discuss Nebart a little? Let's do it. Come on. NABARD is National Bank for Agriculture Rural Development. First of all, it was established in 1982. Now, which five-year plan was going on in 1982? Recall quickly, the sixth five-year plan, because you see the fifth five-year plan did not run for five years. It ran from 1974 to 1978. Then the ruling plan ran for two years till 1980. Then the sixth five-year plan ran from 1980 to 1985. So it was established on the recommendations of the Bishibaraman Committee, NABARD Act of 1981, which means it is also a state. Its headquarters is in Mumbai. But the thing to

23:18 be kept in mind is that it does not directly interact with the people or it is providing loans, taking their deposits. It does not do it directly. So what does our rural banks which we call regional rural banks or cooperative banks do where the shareholders are the owners like the depositors of that bank they are the owners cooperative i had told you so these should be regulated or overseen and not mainly regulated but mainly overseen and like rrbs have these funds etc nabard also funds rrbs which are rural banks by the way if i talk about rrbs rural banks the central government has a 50 share in it right It belongs to the center, 15% for the state government. And how much is left? 35%. So this sponsor bank, for example, just yesterday I was telling you about the OSA case in Kionjar,

24:08 where Jitumunda went to the bank carrying his sister's skeleton. So there was the OSA Rural Bank there. But which is the sponsor bank of that OSA Rural Bank? It is OSA Overseas Bank. OSA Overseas Bank is its sponsor bank, right? So it provides various rural financing schemes like Pradhan Mantri Gram and Awas Yojana, Kisan Credit Card, Rupai Kisan Card, all these things. NABARD has a role in all this. NABARD launched e-Shakti and the Livelihood and Enterprise Development Program in 2015. It also launched the SSG Bank Linkage Program in 1992. Who launched the SAG Bank Linkage Program, linking self-help groups with banks? NABARD, right? I haven't received

24:58 many questions about the National Housing Bank. Let me tell you, it was established in 1988. I've never seen more questions about it. I haven't seen many questions about IRDA either. Just be careful. It was established in 2000. The act came into effect in 1999. That's it. Okay. Let's move on to MGNREGA. Why is MGNREGA important? Because you know it was replaced by GRAMG. So tell me, what's the full form of MGNREGA? This is a very straightforward question. So the MGNREGA was first introduced as NREGA, right? The National Rural Employment Guarantee Act came into effect in 2005 and was implemented in 2006. Later, on October 2, 2009, it was changed from NREGA to MGNREGA. So it became the Mahatma Gandhi National Rural Employment Guarantee Act. There hasn't been a generation, right? So, when you see something a little similar, your eyes get a little confused, thinking

25:45 everything looks the same, so there's a higher chance of making mistakes. A little more focused work would be better, right? So what was covered under the Mahatma Gandhi National Rural Employment Guarantee Act? 100 days of wage employment was available. What kind? Unskilled work was available. Unskilled means people who wield shovels. So unskilled work was available. But what has the government done now? And keep in mind, when this act was first enacted in 2005, it was called NRAGA. MGN Rega was created later, in 2009. You'll know recently that the government introduced a bill called the Vikasid Bharat Guarantee for Employment and Livelihood Mission Gramin. Development India Guarantee for Employment and Livelihood Mission Gram and Bill 2025. What it did was replace the MGNREGA of 2005 and provide 125 days of work per year. It was 100 days, but the 100 days were increased to 125. Otherwise, there aren't any major changes. Let me tell you that these are changes. So the

26:34 name has changed, and the number of days has mainly changed from 100 to 125. The key is that both government levels will fund the scheme to make it more sustainable. Previously, funding came from the center, but now the states will also have to contribute. Keep this in mind, okay? So the cost will be shared between the center and the state. This is an important matter. One is a 125-day matter, and both the center and the states will have to share it. This is an important matter, okay? The difference between GNP and NAP is... So what is the difference between gross national product and net national product? Yesterday, I gave a little hint at the end. Then I said, "Okay, no problem, we'll get into the details later." So let's do it now. Look, there are eight ways to represent a country's national income. How many

27:21 aggregates are there? There are eight aggregates. For example, we studied GDP, gross domestic product, okay? We studied gross domestic product. Now we studied the value of all the final goods and services produced within the territory of a country. GDP has a definition, the value of all the final goods and services. There are two types of goods, final, intermediate, and final goods, consumer goods, and capital goods. Now, capital goods experience depreciation. Sir, what is depreciation? Sir, why aren't you writing it down? Because I won't, because I've already explained everything. Okay? So listen carefully. There's wear and tear, and that wear and tear is called depreciation. For example, Take this laptop. I bought it two years ago, okay? Yes. Let's say I bought this laptop for 1 EUR LAK, okay? What's happening

28:07 now? I bought it for 1 EUR LAK. Is it worth 1 EUR LAK today? We don't know. Its value is 1 EUR LAK. Gradually, its value drops. It keeps decreasing. It keeps decreasing. It might be that I stop using it after five years. That means its life is five years. Five years is its life. Or, for example, let's assume its life is ten years, meaning this laptop will last ten years. This means that its value decreases by 10,000 every year. In a way, it depreciates by 10% every year. If I remove that depreciation, because capital goods depreciate year after year, it becomes net of gross. So gross domestic product becomes net domestic product. This is how we study GNP, Gross National Product. What was its definition? The value of all

28:54 the final, and for that matter, the final value of all the final goods and services produced by the nationals of a country, right? So that's GNP. If you subtract that depreciation from it, it becomes net of gross. So if that was gross national product, it becomes net national product. How much did I tell you about 1, 2, 3, 4? It's eight. Eight is the total. Okay? So you understand four, and you tell me this. If I want to go from GDP to GNP, what do I need to add? I've already explained this to you. Tell me quickly. If I want to go from GDP to GNP, from gross domestic product to gross national product, what do I need to add? I need to add net factor income from abroad. And I explained the concept of this as well. Net factor income from abroad. Sorry, why

29:42 do I need to add it? Because factor income from abroad means that foreign companies working in India will take some of their money away. So subtract that. Add the amount of Indians working abroad. So that's called net factor income from abroad. Now look carefully. I've already explained all these things to you. All these things we were just looking at are at market prices. Similarly, there's a factor cost. Whenever you want to calculate something at factor cost, you can do it. By something, I mean GDP, GNP, NDP or NDP or whatever. These are all at market prices. Okay? Now, if you want to calculate these at factor cost, then nothing. Take that item at market price and subtract the net indirect tax. Okay? Subtract the net indirect tax. Now, what is

30:28 net indirect tax? So net indirect tax is indirect tax minus indirect tax minus subsidy. What is a subsidy? It's a type of government transfer payment. For example, if they tell you, "Brother, you've been given, let's say, GDP at market price. Now, calculate NAP at factor cost." "Sir, yes, so what you do is--" "Sir, GDP at market price." If you've asked for NAP at factor cost, then you'll take GDP at market price and subtract the net indirect tax. No, wrong. Why? The same thing has to be calculated at market price. For example, if you've asked for the factor cost of nap, you'll have to take the market

31:18 price of nap. So how would that be done, sir? Why? Why not? Absolutely. What did I tell you? You're itching your nose, okay? What did I ask you here? What did I tell you? NAP is the factor cost. So you need the market price of NAP. So listen carefully. GDP is GDP at market price. What do you need? First, I have to arrive at NAP at market price. How do I arrive? First, I have to net this gross. I have to net this gross. So what do I do? I subtract depreciation from GDP at market price, and I get NDP at market price. Okay? The work isn't finished yet. This is domestic, and this is national. So if you want to convert domestic to national, add NFIA. So what does it become? NNP at market price. That's NAP at market price. Now subtract the net

32:06 indirect price. Got it? Okay. Similarly, there's another thing called basic price. So, if you want the basic price of the same thing, take its factor cost and add the net production tax. Net. Production tax. Now, what is this net production tax? It's production tax minus subsidy. What you were looking at was product tax. Indirect tax can also be written as product tax. Sir, is there any difference between production tax and excise tax? Of course there is. Product tax is directly dependent and directly proportional to the quantity of goods produced, while

32:53 production tax is not. It's the same as we studied earlier in our previous lecture about fixed costs and variable costs. Fixed costs are independent of the number of quantities produced, whereas variable costs are directly dependent on the number of quantities produced. Variable costs will increase as the number of quantities increases. However, your fixed costs remain constant. That's why the graph of the average fixed cost curve will not touch any axis. The rectangular hyperbola and variable cost were constructed in this way. It's the same way. For example, let's say I set up a factory and I'd have to get a license. Sales tax, stamp duty, etc. wouldn't apply. The company would have to be registered. It would only be done once. It's not like, say, I'm making t-shirts.

33:41 I made one t-shirt. Let's pay the stamp duty on it or else get it registered. Okay, I made another t-shirt. Let's get that registered too. It's not like that. Land business registration only needs to be done once, right? That's production tax, which is independent. What is product tax? The tax levied on that product. Now GST would be levied on every t-shirt. GST would be levied on every course. For example, I might have registered Parmar Academy. I might have registered Parmar Academy and I would have had to pay a certain amount. It's not like I have to pay money repeatedly, like, "Oh, you're sending so many courses. Oh, bring it here or bring more money." Nirmala says it's a charge, sir. But you should understand the sentiment, okay? And yet, GST has to be paid on every course. So that's a product tax. Got it? So

34:28 there's the basic price. This is the basic price. This is the basic price. So factor cost plus net production tax. Now, factor cost is calculated as market price minus net indirect tax, or net product tax. Okay? Let's move on. What role did small-scale industries, SSI, play in the six-five-year plan strategy? Tell me, what role did the plan play? So they were disregarded in favor of large-scale units. Disregarded isn't a negative connotation. They were expected to focus only on the local market. They were promoted as key exporters and employment generators. They were merged with the public sector. Okay? Okay? So this is a negative connotation, and this is the extreme keyword. They were promoted as key exporters and employment generators. They were merged with public sector units.

35:15 Now, if I have to choose between these two, this one is a little more comprehensive, affirmative, and lengthy. So option C is the correct answer. If you look at the Sixth Five-Year Plan, its duration was from 1980 to 1985. The target was 5.2%, and what was achieved here was approximately 5.7%. The goal was to increase national income. Technology had to be modernized. TRISM was launched. Training rural youth for self-employment was also included. IRDP, Integrated Rural Development Program, was launched, and NREP, National Rural Employment Program, was launched. Keep this in mind. We just saw that NABARD was created. NABARD was also created during this period. And this was Indira Gandhi's last five-year plan. After this, she died, right? Then your Rural Land and Rural Landless Employment Guarantee Program was launched in

36:04 1983. The goal here was to eradicate poverty. But the slogan of eradicating poverty was coined by Indira Gandhi in her fifth five-year plan. The fifth five-year plan, meaning 1974 to 1978, was a time when Indira Gandhi was under immense pressure from the opposition. So they were using the slogan, remove Indira. So she reversed it and said, remove poverty. This is politics. Understood? The correct answer is option number C, so you understand. Let's recall the rest of the five-year plans. For For example, tell me, self-reliant and self-generative economy. Whose goal was this? Self-reliant and self-generative economy. Generative economy. So this was your third five-year plan. Your Gadgel model will come in the third five-year plan. And if the Gadgel model doesn't

36:50 come, it's possible that Sukhumi Chakraborty might come up with a plan, which I haven't seen yet. It might have come up with something like this. Your third five-year plan failed. Yours ran from '61 to '66. The reasons for its failure were the war with China in '62. There was a war and famine with Pakistan in '65. For this, there were planned holidays from '66 to '69, that is, from 1966 to 1969. After the plan holidays, when the fourth five-year plan came, that's why I said growth with stability. Keep in mind, what target did we set in the fourth five-year plan? Growth with stability. We have to grow, but we have to achieve stable growth, right? What was the target set in your third five-year plan? 5.6%. And how much did we achieve in the fourth five-year plan? We were able to achieve only 2.8%. In the fourth five-year plan also we had kept a target of 5.6%, but how

37:39 much could we achieve? Still we failed and could achieve only around 3.3 or 3.4%. In the second five-year plan, the focus was on basic and heavy industries. Rapid industrialization was to be done rapidly. PCM Mahal was based on Nobel Small. Three steel plants were established in Rabarkela, Belay, and Durgapur. Belay was established with the help of the USSR. Chattisgarh's Rabarkela was established with whose help? Germany's OSA was established alone. The German Sheffield was established alone. This is how we have to remember it. Durgapur, in West Bengal, was set up with the help of the UK. The Bokoro plant in Jharkhand was established later, and that too was established with the help of Russia. The first one was also based on the Hadmar model, which you should know. Agriculture was the main focus, and five IITs were established there. We read about land reforms yesterday. One

38:28 is the Land Sealing Act and the Land to Tiller Policy. We saw two policies yesterday, right? Let's come to the sixth to tenth question. This is on the seventh five-year plan. The seventh five-year plan is credited with laying the foundation for which of the following major economic reform areas in India? The The seventh five-year plan is credited with laying the foundation for which of the following major economic reform eras in India. So the first three five-year plans were Nehru's. The next three were Indira's. The seventh was Rajiv's. The eighth was P.V. Narasimha Rao's. The ninth was Vajpayee's. The tenth was Manmohan's. The eleventh was Manmohan's. The twelfth was Manmohan's. But it wasn't completed. It was supposed to run from 2012 to 2017, but in 2014, you know, the government changed. As soon as the government changed, the planning commission And all the commissions were removed.

39:16 The seventh five-year plan is credited with laying the foundation for which of the following? So I've just told you three keywords, FW and P, to ensure food security. Work means to provide employment opportunities and increase worker productivity. You just need to remember FWP, right? Now he's asking, what did it lay the foundation for? It laid the foundation. So what could be the time period for the seventh five-year plan? From 1985 to 1990, we implemented the L-1 in 1990. So when we implemented the L-1 in our third five-year plan for two years, why did we implement the L-1 for three years? We took a plan holiday. And in the fifth five-year plan, the government changed, so a rolling plan was introduced. And then again, L-1 was implemented in our seventh

40:05 five-year plan. So this time, we introduced a rolling plan again. Rolling plan means starting from 1990. Sorry, I'm saying rolling. Rolling annual plans came after the fifth, from 1978 to 1980. So from 1990 to 1992, no five-year plan was introduced. For two years, from 1992 to 1992, annual plans continued. What continued? It was an annual plan. Why? You know, we implemented the L1 in 1990. There was a balance of payments crisis, where we had forex reserves left to sustain only two weeks of imports, right? That's all we had left. Okay? And one more thing, one more thing, one more thing. I should have told you about this, but no one is telling you, right? What are the things included in forex reserves? Why? All the reserves include foreign currency assets. First, What is a foreign currency asset? As I just mentioned, when we sell goods

40:53 to a country, we get its currency. That's a foreign currency asset, okay? Gold SDRs, which are called paper gold SDRs, have special drawing rights. And the fourth is your RTP reserve trying position. That means, what is our position? What is our place? In the IMF? The more money a person is given to the IMF, the more influence he has, the more voting power he has in the IMF. If we talk about SDRs, special drawing rights, you get these from five currencies. Which five currencies are they? The US dollar. You have the Chinese Yuan, which is also used here, the Japanese Yen. The British pound sterling, okay? The pound sterling and your Euro is from Europe. So the weighted average of these five

41:42 currencies is the SDR, okay? So this should be understandable. So whose name was included in the seventh five-year plan? You know, in 1992, we had the Thal, so we introduced LPG reforms and structural changes. So it laid the foundation for economic liberalization and modernization in 1990. Option number C is clear. The rest of the annual plans, as I was just telling you, no five-year plan was introduced due to political uncertainty. Political uncertainty. Rajiv Gandhi also died, you know? He was assassinated, so those were problems too. One thing to keep in mind in the remaining five-year plans is the Jawahar-Rozgar Yojana that

42:29 was launched. Jawahar-Rozgar Yojana, okay? It was merged in 1989. Actually, your National Rural Employment Plan plus the Rural Landless Employment Guarantee Program were merged. The Department of Biotechnology was also established, and the target of 5% was exceeded, achieving 6%. Keep this in mind, right? Why must an Indian buyer convert rupees to dollars when purchasing from the US? So why should an Indian buyer convert rupees to dollars when purchasing from the US? Why should they convert? What does it mean? If

43:19 you don't convert, then your Indian currency won't be accepted there, meaning the US won't be accepted there. So you have to convert. It's simple. This is called convertibility. What is it called? Convertibility. Convertibility occurs in two things. One, in the current account, and the other in the capital account. Right? Current account and capital account. Now, what does this mean? We'll get to this later, but for now, just keep in mind that India doesn't yet have full capital account convertibility. The Tarapore Committee was formed to implement capital account convertibility. It was first formed in 1997. Later, in 2006, it asked, "What was its

44:06 main job?" To recommend how much freedom should be given to convert rupees into foreign currencies, any foreign currency, and convert foreign currency back into rupees, right? For capital account transactions, The Tarapore Committee had rejected full capital account convertibility. S.S. Tarapore was its chairman. And one thing came to mind, and it immediately came to mind, the Tarapore Committee. Wait a second. There was something there, man. There was something there. Yes, Farah and FEMA, keep in mind that the Foreign Exchange Regulation Act was enacted in 1973. Foreign exchange was being regulated. At that time, we didn't have

44:53 much foreign exchange left, so anyone who came to exchange Indian currency for foreign currency was viewed with great suspicion. There were many regulations, and the scope of exchange was limited. There were many restrictions. Then, after the economic reforms of 1990, we removed FEMA and introduced FEMA. Foreign exchange will now be managed, not regulated. The Foreign Exchange Management Act was introduced in 1999 to promote trade liberalization and manage the overall management of this exchange reserve management, okay? So option number one would be the answer. FERA is from 1973. It was removed and FEMA was introduced in 1999. Next question. Okay, this is the question. That is about HDI and MPI.

45:45 Do this question slowly, taking your time. Do it slowly. Okay. It shouldn't be wrong. We're getting D as the answer. Okay. D, A, A, D, and D. Okay. How are you giving A? Y. How are you giving A? HDI is based on life expectancy and standard of living only. Either you know the

46:34 first one is correct. If you know, then this one is wrong. Let me tell you, if you know, then it must be wrong. You should mark it. And if you don't know, then you should check it. It's written only. Extreme is the key word. First of all, you have to use knowledge. No doubt. Only your knowledge will be used. Where knowledge won't work, then your net will come in handy. Whatever technique or trick you say. So it should be wrong accordingly. So the extreme key word is that it only has life expectancy and standard of living and nothing else. Even one thing goes wrong. Life expectancy and both are taken into account to measure HDI. MPI measures health and education only. The Multidimensional Poverty Index measures only health and education. I repeat this again and again. Standard of living is health and education. So only health education is written in it. So this is also gone. Now the first one

47:23 is gone and the third one is gone so the question itself is over. Two or four are automatically correct. Now look, there is neither a very specific fact nor an extreme keyword here. It is not there in two nor in four. Child mortality and nutrition are taken into account to measure health in MPI. Now if we talk about the HDI of the Human Development Index, it was first released in 1990. It was by a Pakistani economist named Mahbub ul Haq and an Indian economist named Amartya Sen, these two people jointly developed it. Samad Sen also received the Nobel Prize in 1998. Pay attention to economics. He was the first Indian economist to receive the Nobel Prize. By the way, the first Indian was in 1913. Do you know what they call it? Rabindranath Tagore received it. Okay? The dimensions here in the HDI, like the

48:11 MPI, are standard of living, health, and education. Similarly, here it is, decent standard of living, standard of living, knowledge, and healthy life, okay? Long and healthy life. Now, how many indicators are there in this? There are only four indicators in this. For example, there were 10 indicators there. Here, there are four. Long and healthy life includes life expectancy at birth. Life expectancy at birth is directly related to the IMR we were studying yesterday, infant mortality rate, because mortality, sorry, is the number of children who die at birth. So that is, what is life expectancy per birth? Plus, knowledge includes expected years of schooling and mean years of schooling, and decent standard of living includes GNI per capita. Remember, you don't need to memorize the dimension index at all, but you do need to memorize the indicators. Since these three are dimensions, and the indicators under

49:00 that dimension, you need to remember that long and healthy life includes life expectancy at birth. Knowledge includes years of schooling, expected years of schooling and mean years of schooling, and decent standard of living includes GNI per capita. Similarly, who releases the Multidimensional Poverty Index ? Why Human Development Index? the United Nations Development Program, UNDP. Otherwise, who releases the MPI? It's released by UNDP plus your Oxford Poverty Health Initiative. Sorry, yes, that's all correct. Okay? So keep in mind that the MPI has three dimensions, but there are ten indicators. You remember this by

49:45 heart, right? Under the indicator health, nutrition and child mortality are included. Education year and schooling and school attendance are included. And under standard of living, cooking fuel, sanitation, ranking water, electricity, housing and assets are included. These two are poverty measures, not indicators. So there are only 10 indicators. This is the global MPI, right? The Human Development Index is released by the UNDP, and your MPI is also released by the UNDP, but in collaboration with the Oxford Poverty and Human Development Initiative. The National MPI has 12 indicators in total, and Niti Aayog releases it. Niti Aayog releases 12 indicators. Bihar has the highest multidimensional poverty index, and where is the lowest? Kerala. You need to keep this in mind. Uttar Pradesh has lifted the highest number of people out of poverty

50:32 since 2005, okay? What does the finance bill presented in the budget mainly contain? So what does the finance bill presented in the budget primarily include? Tell me. Details of government plans, proposals related to tax changes and rules, estimates of state-level expenditures only, or monetary policy statements from the RBI. So we know that when we looked at how the budget is presented, what are its stages? So, first it is presented, then discussed, then it is scrutinized, then there is a discussion, then the appropriation bill, okay? Presentation, discussion, scrutiny, okay? Voting takes place, the appropriation bill is passed, then your finance bill is passed, okay? So, the finance bill is passed last and

51:18 it contains the rules and proposals regarding your tax changes, okay? All proposals regarding tax changes are contained in the finance bill. Which article does the finance bill fall under? Please explain in the comments why So is the finance bill a type of money bill? Our money bill is a type of finance bill. Keep that in mind. So all money bills are finance bills. All money bills are finance bills. But all finance bills are not money bills. You have to keep this in mind. So the finance bills fall under Article 117. There are two types. Category A is 117 Clause 1, and this is your Category B. This falls under 117 Clause 3, okay? So you have to keep this in mind. I told you a little about polity, and you don't have to read into so much detail. You just have to understand. Just understand

52:06 what I'm saying. We know about the money bill. Its definition is given in Article 110. Article 109 lays out its procedure. What does it cover? Imposition, abolition, remission, alteration of taxes, all that, and the central government's borrowing. All those things related to money. What doesn't it cover? Fines imposed or taxes levied for local purposes. All of that doesn't count, right? Okay. Now we know it can only be introduced in the Lok Sabha. Usually, it's brought with a recommendation from the president. The Rajya Sabha has only recommendatory power, not amending power. It has to respond within 14 days. Otherwise, it's considered passed in the same manner as the Lok Sabha passed it, right? Or the President can't suspend vetoing. We know all these things, including the joint session, which takes place under Article 108, which is convened by the President, which presides over the Speaker of the Lok Sabha, which operates according to the rules of the Lok Sabha, which we

52:54 borrowed from the Australian Constitution. This doesn't happen in money bills. It only happens in ordinary bills. It doesn't happen in money bills. It doesn't happen in money bills. It doesn't happen in constitutional amendment bills. It doesn't happen in state ordinary bills. Okay? Remember this: it only happens in central ordinary bills, which has happened three times so far: to pass the Prevention of Terrorism Act, to pass the Banking Services Commission bill, and to pass your drug prohibition bill. So this is a money bill that cannot be written. So we've seen that. Now, we remember these things about money bills very well. Do you know what happens in a finance bill, category 1? Nothing. It's the same thing. The rest of the money bill is like an ordinary bill, meaning it can only be introduced in the Lok Sabha. First thing, right? Okay. and it's introduced on the president's recommendation. Everything else is the same as an ordinary bill, meaning the Rajya

53:41 Sabha can amend it. Joint sitting is allowed. It has everything. You don't even need to read it. There's just one similarity to a money bill. Let's say there's a special privilege that the president can enter any house he directs. Okay? What matters are covered in a finance bill? Any and all of the matters of the money bill and any other matter of general legislation. General legislation means anything that is an ordinary bill, like the premise you mentioned. Okay? So which of the following is the formula for elasticity of supply? Which of the following is the formula for elasticity of supply? Yesterday, we studied the elasticity of demand, how much you change the price and how much demand changes in response. Similarly, the elasticity of supply is how much you change

54:29 the price and how much supply changes in response to it. We studied two curves, a demand curve and a supply curve. You can see that the demand curve is negatively sloping. Right? Downward sloping while the supply curve is positively sloping. Now the difference is that we see this from the perspective of the consumer that demand decreases as the price rises. The supply curve is seen from the perspective of your supplier that as the price rises he supplies more. Why? Because he will get a better price. So we note the percentage change in price and the change in quantity supplied relative to that. So option number B will be the correct answer. Now you can see the formula here. Percentage change in price and percentage change in quantity supplied. This is

55:16 the formula. Four graphs are formed here. Perfectly elastic supply, relatively elastic, perfectly inelastic, and relatively inelastic. Just like we saw with perfectly elastic demand, it's a horizontal curve, isn't it? So here too, it's horizontal, right? A slight price change results in a drastic change in supply. No matter how much you change the price, there's no change in supply. Perfectly inelastic supply. What's in perfectly elastic, sorry, relatively elastic, is that a slight price change results in a significant change in supply. Relatively inelastic means that the price change is significant, but the quantity supply doesn't change that much in response, right? That means, here, that ES, where ED was the demand, elasticity of demand, would be ES here. This is, this would be greater than 1, and then here it

56:01 would be less than 1. Okay? Now question number 15, the last 5 questions. Consider the following statement and choose the correct option. Tell me. Let's do this question quickly. Tomorrow's class timing is 9 a.m. Okay? Let's go. So now, a surplus on the current account indicates that a country is lending to the rest of the world. A current account is set to be a balance in payments minus receipts. Look, any country's balance of payments is an account. What is this account for? Its trade with other countries is maintained here. Now on one side, there is the current account. One is the current account and the other is the capital account. Trade in the current account is mainly between visibles and invisibles. Visible means something that

56:50 can be seen and touched. Goods are things that cannot be touched. Services are intangible. Okay? So these are two things, trade and transfer payments. Transfer payments are a type of transfer. They are also called unilateral transfers. Unilateral means something like the transfer payments we hear from the government. Subsidies, pensions, scholarships, these are government transfer payments. Similarly, the government receives transfer payments which are called remittances. What are remittances? Indians living abroad, earning money, and sending money back to India. This is called remittances or transfer payments. India receives the highest number of remittances in the world. India ranks number one. Does India know how much remittances it receives annually? Some guess.

57:37 Some guess. It receives this much. Approximately 135 to 136 billion dollars. Okay? So many billions of dollars come in. The USA receives the most remittances, okay? The USA receives the most. And who comes second after India? Mexico, okay? And this means we're playing with margins, so no one will be able to surpass us quickly. And these remittances account for 3% of India's GDP. You can see how large a percentage of our GDP comes from remittances alone. This is the current account. Investments come in the capital account. Investments like foreign direct investment, FDI, foreign direct investment, FPI, etc. What's the difference between FDI and FPI? In foreign direct investment, a company invests for the long term. It makes structural investments, infrastructural investments, okay? Generally,

58:26 the shareholding here is higher, more than 10%. FPI shareholdings are lower. Plus, just here, in a company, let's say a company has invested in shares, stocks, etc., there's no knowing when it will leave. That's why it's called hot money. Hot money because the investor can run away at any time. For example, Walmart acquired Flipkart. It acquired a significant shareholding. Plus, it also acquired Flipkart's infrastructure. So it won't be able to run away so quickly, right? It won't. It won't want to, right? So FDI is generally a long-term investment. FDI happens through two routes. One through the automatic route, which means you come and invest. And the other through government approval. Government approval means

59:12 you have to get approval from the government. For example, in defense, the government recently said that up to 74% can be invested through the automatic route. And if the government is to contribute 100%, then the rest will require government approval. This is how it works, okay? External assistance is done. External assistance means someone gave a loan or we borrowed, okay? Deposits, all of these things come in your capital account, okay? So the first statement written here, "A surplus on the current account indicates that the country is lending to the rest of the world. That means we are providing goods." Now, many people will be skeptical here and understandably about lending to the rest of the world. So this is a loan type thing. The loan thing is coming here. It is coming in the capital account. But in the SSC CPO question, the first

59:59 statement was considered correct. Let me tell you, okay? So here they applied the logic that lending to the rest of the world means, "Listen to us carefully. Only imports and exports are coming in the current account. If you look closely, you'll only see imports and exports of goods and services. So whenever there's a surplus, sir, as we saw in the budget, there are three types: a balanced budget, a surplus budget, and a deficit budget. When does a surplus occur? When receipts exceed expenditures. Similarly, when we export more and import less, that's a surplus. On what basis? We call that a current account surplus, right? We call that a current account surplus. Now, when does the current account become surplus?

1:00:45 We know. When we export more than we import. And what will be the current account deficit? A current account deficit occurs when we import more than we export. This creates a twin deficit. What is a twin deficit? So keep in mind that you have a double deficit when there's a fiscal deficit in the budget and a current account deficit in the current account balance of payments. Keep this in mind. So the first one is correct. A current account is set to be in balance in payments and receipts. Something is in balance only when two things are equal. Simple. The scale will be in balance when both the left and right sides are equal. So yesterday also I saw a question where some were talking about balance. There was something that

1:01:32 I'm forgetting. What was it? Yesterday we saw a similar balance thing. The break-even point is where revenue and expenditure were equal. That's where it is. If it's in balance, then both should be equal, so only statement 1 will be correct here. Okay, so here is the export-import transaction. Okay, so here in the current account, export-import, I remember when was the Ex-Im Bank established. When was the export-import bank established? So it happened on January 1, 1982. Keep this in mind. Done! Okay? So you can see that the same current account information is written here that I just told you about. Capital account, FDI, FBI, and everything. Okay? Let's go! Next is "Financial intermediaries are essential in transmitting monetary policy to the

1:02:20 real economy. They adjust lending and deposit rates in response to the policy rates set by the MPC." Do it! This is a question on the assertion region. I have told you how to answer the questions in the assertion region. Do the questions in the same manner. Done! Okay. "Financial intermediaries are essential in transmitting monetary policy to the real economy." What is monetary policy? One day, in 2013 and 2014, Arjit Patel sat

1:03:07 down and recommended that India should adopt inflation targeting, aiming for a certain percentage of inflation so that it doesn't spiral out of control and doesn't fall too far. Right? Regarding this, the Arjit Patel committee suggested that a monetary policy committee should be formed, consisting of six members, three from the RBI and three from the government. Right? So the Monetary Policy Committee meets and decides monetary policy. Because of the different rates, like yesterday we learned about CRR and SLR. What is cash reserve ratio and state liquidity ratio ? Quickly recall CRR and SLR. So of the total liabilities of banks, their net demand and time liabilities,

1:03:53 they have to keep a certain percentage of this in cash, which we call cash reserve ratio . And some things, some money, has to be kept

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