Schedules are lists in the Constitution that categorizes and tabulates bureaucratic activity and policy of the Government.
•First Schedule (Articles 1 and 4) — States and Union Territories – This lists the states and territories on of India, lists any changes to their borders and the laws used to make that change.
•Second Schedule (Articles 59, 65, 75, 97, 125, 148, 158, 164, 186 and 221) — Emoluments for High-Level Officials – This lists the salaries of officials holding public office, judges, and Comptroller and Auditor-General of India.
•Third Schedule (Articles 75, 99, 124, 148, 164, 188 and 219) — Forms of Oaths – This lists the oaths of offices for elected officials and judges.
•Fourth Schedule (Articles 4 and 80) – This details the allocation of seats in the Rajya Sabha (the upper house of Parliament) per State or Union Territory.
•Fifth Schedule (Article 244) – This provides for the administration and control of Scheduled Areas and Scheduled Tribes (areas and tribes needing special protection due to disadvantageous conditions).
•Sixth Schedule (Articles 244 and 275)— Provisions for the administration of tribal areas in Assam.
•Seventh Schedule (Article 246) — The union (central government), state, and concurrent lists of responsibilities.
•Eighth Schedule (Articles 344 and 351) — The official languages.
•Ninth Schedule (Article 31-B) - This covers land and tenure reforms; the accession of Sikkim with India. It may be reviewed by the courts.
•Tenth Schedule (Articles 102 and 191) — "Anti-defection" provisions for Members of Parliament and Members of the State Legislatures.
•Eleventh Schedule (Article 243-G) — Panchayat Raj(rural development).
•Twelfth Schedule (Article 243-W) — Municipalities(urban planning).
Tuesday, March 30, 2010
Monday, March 8, 2010
Economic Terminology - II
INFLATION
• A general increase in prices and fall in the purchasing power of money, or, an increase in available currency.
DEFLATION
• Reduction of the amount of money in circulation in order to increase its value.
DISINFLATION
• A policy designed to counteract inflation without causing deflation.
STAGFLATION
• A state of inflation without corresponding increase of demand and employment.
Cash Reserve Ratio (CRR)
• The liquid cash that all banks are required to maintain with the RBI as a percentage of their demand and time liabilities.
REPO RATE
• It is the rate at which the banks can borrow money from a central bank of the country in order to avoid scarcity of funds.
• Thus, a reduction in the REPO rate will help banks to get money at a cheaper rate.
• It is also a financial & economic tool in the hands of the government to control the availability of money supply in the market by altering the REPO rate from time to time.
PRICE INDEX
• A normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time.
• It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations.
Consumer Price Index (CPI)
• A consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households.
• It is one of several price indices calculated by national statistical agencies.
• The percent change in the CPI is a measure of inflation.
MARKET LIQUIDITY
• Is a term that refers to an asset's ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value.
COMMODITY
• A commodity is anything for which there is demand, but which is supplied without qualitative differentiation across a market.
BONDS
• A bond is a debt security, in which the authorized issuer owes the holders a debt
and is obliged to repay the principal and interest at a later date, termed maturity.
• A bond can be considered as a loan in the form of a security
• Bonds enable the issuer to finance longterm investments with external funds.
SHARE
• A share (also referred to as equity share) of stock means a share of ownership in a corporation (company).
Difference between Bonds and Stocks
Bonds and stocks are both securities, but the major difference between the two is that stock-holders are the owners of the company (i.e., they have an equity stake), whereas bond-holders are lenders to the issuing company.
Bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be outstanding indefinitely.
PROMISSORY NOTE
A promissory note is a written promise by the maker to pay money to the payee. The most common type of promissory note is a bank note, which is defined as a promissory note made by a bank and payable to bearer on demand.
COMMERCIAL PAPER
Commercial Paper is a money-market security issued by large banks and corporations to get money to meet short term debt obligations (for example, payroll. It has a fixed maturity of 1 to 270 days.
SECURITY
A security is a fungible, negotiable instrument representing financial value.
Securities are broadly categorized into:
debt securities (such as banknotes, bonds and debentures)and equity securities, e.g., common stocks.
• A general increase in prices and fall in the purchasing power of money, or, an increase in available currency.
DEFLATION
• Reduction of the amount of money in circulation in order to increase its value.
DISINFLATION
• A policy designed to counteract inflation without causing deflation.
STAGFLATION
• A state of inflation without corresponding increase of demand and employment.
Cash Reserve Ratio (CRR)
• The liquid cash that all banks are required to maintain with the RBI as a percentage of their demand and time liabilities.
REPO RATE
• It is the rate at which the banks can borrow money from a central bank of the country in order to avoid scarcity of funds.
• Thus, a reduction in the REPO rate will help banks to get money at a cheaper rate.
• It is also a financial & economic tool in the hands of the government to control the availability of money supply in the market by altering the REPO rate from time to time.
PRICE INDEX
• A normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time.
• It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations.
Consumer Price Index (CPI)
• A consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households.
• It is one of several price indices calculated by national statistical agencies.
• The percent change in the CPI is a measure of inflation.
MARKET LIQUIDITY
• Is a term that refers to an asset's ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value.
COMMODITY
• A commodity is anything for which there is demand, but which is supplied without qualitative differentiation across a market.
BONDS
• A bond is a debt security, in which the authorized issuer owes the holders a debt
and is obliged to repay the principal and interest at a later date, termed maturity.
• A bond can be considered as a loan in the form of a security
• Bonds enable the issuer to finance longterm investments with external funds.
SHARE
• A share (also referred to as equity share) of stock means a share of ownership in a corporation (company).
Difference between Bonds and Stocks
Bonds and stocks are both securities, but the major difference between the two is that stock-holders are the owners of the company (i.e., they have an equity stake), whereas bond-holders are lenders to the issuing company.
Bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be outstanding indefinitely.
PROMISSORY NOTE
A promissory note is a written promise by the maker to pay money to the payee. The most common type of promissory note is a bank note, which is defined as a promissory note made by a bank and payable to bearer on demand.
COMMERCIAL PAPER
Commercial Paper is a money-market security issued by large banks and corporations to get money to meet short term debt obligations (for example, payroll. It has a fixed maturity of 1 to 270 days.
SECURITY
A security is a fungible, negotiable instrument representing financial value.
Securities are broadly categorized into:
debt securities (such as banknotes, bonds and debentures)and equity securities, e.g., common stocks.
Friday, March 5, 2010
EconomicTerminology
Economics
Economics can be defined as the science that studies human behavior as a relationship between ends and scarce means, which have alternative uses.
Lionel Robbins
An Economy is usually analyzed by the use of Microeconomics or Macroeconomics
Microeconomics - where the unit of analysis is the individual agent, such as a household, firm or government department.
Macroeconomics examines an economy as a whole with a view to understanding the interaction between economic aggregates such as national income, employment and inflation. It also studies effects of Monetary Policy and Fiscal Policy.
Market
The existence of markets is one of the key components of capitalism.
A market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange.
The information function of a market requires that the buyer and seller are both aware of what is being sold. It is assumed that such knowledge is perfect, including knowledge of alternatives and other factors affecting the proposed sale/purchase.
GDP
GDP is the total measure of the flow of goods and services at market value resulting from current production during a year in a country, excluding net income from abroad.
It is a measure of economic activity in a country
GDP = private consumption + investment + public spending + the change in inventories + (exports - imports).
GNP
Gross National Product (GNP) = GDP + income earned by domestic residents from their investments abroad - income paid from the country to investors abroad.
NNP
Net National Product (NNP) = GNP – Depreciation
Money
Money can be defined as a legal tender that gives the possessor liquidity in hand. It fulfills three functions – each of them providing a criterion of moneyness –
* a unit of account
* a medium of exchange, and
* a store of value.
Economics can be defined as the science that studies human behavior as a relationship between ends and scarce means, which have alternative uses.
Lionel Robbins
An Economy is usually analyzed by the use of Microeconomics or Macroeconomics
Microeconomics - where the unit of analysis is the individual agent, such as a household, firm or government department.
Macroeconomics examines an economy as a whole with a view to understanding the interaction between economic aggregates such as national income, employment and inflation. It also studies effects of Monetary Policy and Fiscal Policy.
Market
The existence of markets is one of the key components of capitalism.
A market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange.
The information function of a market requires that the buyer and seller are both aware of what is being sold. It is assumed that such knowledge is perfect, including knowledge of alternatives and other factors affecting the proposed sale/purchase.
GDP
GDP is the total measure of the flow of goods and services at market value resulting from current production during a year in a country, excluding net income from abroad.
It is a measure of economic activity in a country
GDP = private consumption + investment + public spending + the change in inventories + (exports - imports).
GNP
Gross National Product (GNP) = GDP + income earned by domestic residents from their investments abroad - income paid from the country to investors abroad.
NNP
Net National Product (NNP) = GNP – Depreciation
Money
Money can be defined as a legal tender that gives the possessor liquidity in hand. It fulfills three functions – each of them providing a criterion of moneyness –
* a unit of account
* a medium of exchange, and
* a store of value.
Monday, March 1, 2010
Banking in INDIA at a glance
Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and development of the country.
Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions. With 30 banking units contributing to almost 50 % of deposits and 60 % of advances. Industry estimates indicate that out of 274 commercial banks operating in India 223 banks are in the public sector and 51(24 foreign banks) are in private sector.
Major differentiating parameter that distinguishes these banks from all other banks is the level of service offered to the customer. The need to become highly customer focused has forced the slow moving public sector to adopt a fast track approach. Indian banking has come a long way from being a sleepy business to a highly proactive and dynamic entity.
Banks that employ IT solutions are perceived to be “futuristic” and proactive players capable of meeting the requirements of a large customer base. Private banks have been fast on the uptake and are reorienting their strategies using the internet as the medium. Indeed the Internet has emerged as the new and challenging frontier of marketing.
Banking began with the idea of safeguarding money, now banks has emerged as money managers not just for individuals but for associations, companies and even countries. Switzerland is one country whose economy mainly runs from its banking industry.
A bank is a pillar of trust. It safeguards your money, transfers it, manages it and invests it. In today’s competitive scenario, it has become very necessary for a bank to provide its customers with a wide variety of services and the best technology.
Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions. With 30 banking units contributing to almost 50 % of deposits and 60 % of advances. Industry estimates indicate that out of 274 commercial banks operating in India 223 banks are in the public sector and 51(24 foreign banks) are in private sector.
Major differentiating parameter that distinguishes these banks from all other banks is the level of service offered to the customer. The need to become highly customer focused has forced the slow moving public sector to adopt a fast track approach. Indian banking has come a long way from being a sleepy business to a highly proactive and dynamic entity.
Banks that employ IT solutions are perceived to be “futuristic” and proactive players capable of meeting the requirements of a large customer base. Private banks have been fast on the uptake and are reorienting their strategies using the internet as the medium. Indeed the Internet has emerged as the new and challenging frontier of marketing.
Banking began with the idea of safeguarding money, now banks has emerged as money managers not just for individuals but for associations, companies and even countries. Switzerland is one country whose economy mainly runs from its banking industry.
A bank is a pillar of trust. It safeguards your money, transfers it, manages it and invests it. In today’s competitive scenario, it has become very necessary for a bank to provide its customers with a wide variety of services and the best technology.
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