Economic Issues: Growth, National Income, Poverty, Employment, Indian Economy Reforms, Agriculture, Industry, Services, Monetary & Fiscal Policy
| Term | Formula / Meaning |
|---|---|
| GDP (Gross Domestic Product) | Total value of all final goods & services produced within a country's borders in a year. Includes output by foreigners in India. |
| GNP (Gross National Product) | GDP + NFIA (Net Factor Income from Abroad). Includes income earned by Indians abroad, excludes foreigners' income in India. |
| NNP (Net National Product) | GNP − Depreciation. Also called National Income at market price. |
| National Income (NI) | NNP at Factor Cost = NNPMP − Indirect Taxes + Subsidies |
| Per Capita Income | National Income / Total Population |
| GVA (Gross Value Added) | GDP at basic prices. GVA = GDP − Product Taxes + Product Subsidies. New methodology since 2015. |
| NFIA | Net Factor Income from Abroad = Factor income earned abroad by residents − Factor income earned by foreigners domestically |
| Nominal GDP | GDP at current year prices (includes inflation effect) |
| Real GDP | GDP at constant/base year prices (inflation removed). Measures actual growth. |
| GDP Deflator | (Nominal GDP / Real GDP) × 100. Broader measure of inflation than CPI. |
| Method | What It Measures | Formula |
|---|---|---|
| Production / Output Method | Value added at each stage of production | Σ (Value of Output − Value of Intermediate Consumption) |
| Income Method | Total income earned by factors of production | Wages + Rent + Interest + Profit |
| Expenditure Method | Total spending in the economy | C + I + G + (X − M) where C=Consumption, I=Investment, G=Govt, X=Exports, M=Imports |
| Term | Meaning |
|---|---|
| Absolute Poverty | Unable to meet minimum basic needs (food, shelter, clothing) |
| Relative Poverty | Income below a certain % of average income in society (inequality measure) |
| Poverty Line (India) | Tendulkar Committee (2011-12): ₹816/month (rural), ₹1000/month (urban). Based on calorie intake + other needs. |
| Poverty Gap | Difference between actual income of poor and the poverty line. Measures depth of poverty. |
| Poverty Ratio / HCR | Head Count Ratio = % of population below poverty line |
| MPI (Multidimensional Poverty Index) | NITI Aayog / UNDP. 3 dimensions (Health, Education, Living Standards) × 10 indicators. Score ≥ 0.33 = multidimensionally poor |
| Committee | Year | Key Contribution |
|---|---|---|
| Alagh Committee | 1979 | First official poverty line based on calorie intake (2400 cal rural, 2100 cal urban) |
| Lakdawala Committee | 1993 | State-specific poverty lines using CPI-AL and CPI-IW |
| Tendulkar Committee | 2009 | Shifted from calorie to consumption-based poverty line. Currently used officially. |
| Rangarajan Committee | 2014 | Higher poverty line: ₹972 (rural), ₹1407 (urban). Estimated 29.5% poverty (2011-12) |
| Scheme | Year | Focus |
|---|---|---|
| MGNREGS (NREGA) | 2006 | 100 days guaranteed unskilled employment to rural households. Demand-driven. Largest employment programme globally. |
| NRLM / DAY-NRLM | 2011/2015 | Self-employment through SHGs; skill development; financial literacy |
| PM Garib Kalyan Anna Yojana | 2020 | Free foodgrains to 81.35 crore people. Extended as universal food security. |
| PM Awas Yojana | 2015 | Housing for All — pucca houses for BPL families (Rural + Urban) |
| National Food Security Act | 2013 | Legal right to subsidized food for 75% rural & 50% urban population |
| Term | Definition |
|---|---|
| LFPR (Labour Force Participation Rate) | % of working-age population that is either employed or seeking employment |
| WPR (Worker Population Ratio) | % of population that is employed |
| UR (Unemployment Rate) | % of labour force that is unemployed but seeking work |
| Structural Unemployment | Mismatch between workers' skills and job requirements |
| Disguised Unemployment | More people employed than needed; removing some won't reduce output (common in Indian agriculture) |
| Seasonal Unemployment | Jobless during off-seasons (agriculture, tourism) |
| Frictional Unemployment | Short-term unemployment when transitioning between jobs |
| Formal Sector | Organized; social security, contracts, regulated. ~10% of India's workforce |
| Informal Sector | Unorganized; no social security, no contracts. ~90% of India's workforce |
| Survey | By | Key Feature |
|---|---|---|
| PLFS (Periodic Labour Force Survey) | NSO / MoSPI | Annual + Quarterly. Primary source of employment data in India since 2017-18. |
| Census | Registrar General | Decennial. Last: 2011. |
| e-Shram Portal | Ministry of Labour | Registration of unorganised workers. 31+ crore registered (Jan 2026), 54% women. |
| EPFO Payroll Data | EPFO | Monthly data on formal employment additions via EPF enrolments. |
| Scheme | Focus |
|---|---|
| PM MUDRA Yojana | Micro-enterprise loans for self-employment (Shishu/Kishor/Tarun) |
| PM Vishwakarma | Support traditional artisans & craftsmen with training, credit, market access |
| Skill India Mission | Umbrella for skilling programmes: PMKVY, ITIs, Apprenticeships |
| Start-Up India | Promote entrepreneurship; tax benefits; self-certification; Fund of Funds |
| PLI Schemes (14 sectors) | ₹2+ lakh crore investment attracted; 12.6+ lakh jobs created (Sep 2025) |
| Reform | What Changed |
|---|---|
| Liberalization | Abolished License Raj (except 5 sectors); reduced govt control on industry; de-reserved sectors for private |
| Privatization | Disinvestment of PSUs; strategic sale; allowed private entry in banking, telecom, aviation, insurance |
| Globalization | Reduced import tariffs (from 300%+ to ~10%); welcomed FDI; joined WTO (1995); FEMA replaced FERA |
| Year | Reform |
|---|---|
| 1991 | Industrial Policy Statement, New Trade Policy, Rupee devaluation |
| 1992 | SEBI Act; Narasimham Committee (Banking reforms) |
| 1994 | Telecom liberalization; TRAI established 1997 |
| 1999 | FEMA replaces FERA; Insurance sector opened (IRDAI) |
| 2003 | FRBM Act (Fiscal discipline) |
| 2005 | VAT introduced (replaced by GST in 2017) |
| 2014-16 | Make in India, Startup India, FDI liberalization, IBC 2016 |
| 2016 | Demonetization (Nov 8) |
| 2017 | GST (July 1) — One Nation One Tax; merged 17 taxes |
| 2020 | Atmanirbhar Bharat; Farm laws (later repealed); PLI Schemes; Labour Code reforms |
| 2021 | NaBFID; Asset Monetization Pipeline; Bad Bank (NARCL) |
| 2023-26 | ISM 2.0 (Semiconductors), New Income Tax Act 2025, Digital India expansion, CBDC pilot |
| Scheme | Year | Feature |
|---|---|---|
| PM-KISAN | 2019 | ₹6000/year to all farmers in 3 installments. ₹4.09 lakh crore released since inception. |
| PM Fasal Bima (PMFBY) | 2016 | Crop insurance at 1.5-5% premium (rest by govt). Largest crop insurance scheme globally. |
| Kisan Credit Card | 1998 | Easy credit for crops + allied activities. 2% interest subvention for timely repayment. |
| e-NAM | 2016 | National Agriculture Market — online trading of farm produce. 1,522 mandis in 23 states. |
| MSP (Minimum Support Price) | Since 1960s | Govt buys crops at guaranteed price. CACP recommends. 23 crops currently covered. |
| Soil Health Card | 2015 | Nutrient status of soil; crop-wise fertilizer recommendations |
| PM Krishi Sinchai Yojana | 2015 | "Har Khet Ko Paani" — micro irrigation, drip irrigation, watershed management |
| Initiative | Year | Focus |
|---|---|---|
| Make in India | 2014 | 25 sectors; ease of doing business; FDI liberalization |
| PLI (Production Linked Incentive) | 2020 | 14 sectors — Electronics, Pharma, Auto, Textiles, Semiconductors etc. |
| India Semiconductor Mission | 2021 | 10 projects, ~₹1.60 lakh crore investment. ISM 2.0 announced 2026. |
| National Logistics Policy | 2022 | Reduce logistics cost from 13-14% to ~8% of GDP; PM Gati Shakti integration |
| One District One Product | 2018 | Promote local products of each district for export & employment |
| Sub-sector | Key Facts |
|---|---|
| IT & Business Services | India's flagship export. $254B revenue (FY24). 5.4 million direct employees. TCS, Infosys, Wipro, HCL. |
| Telecom | Tele-density: 86.76%. 5G in 99.9% districts. World's cheapest data. |
| Tourism | India ranks 39th in TTDI (Travel & Tourism Development Index). $30B forex earnings. |
| Aviation | India = 3rd largest domestic aviation market. Airports: 74 (2014) → 164 (2025). |
| Banking & Financial | Digital payments boom. UPI ~16 billion txns/month. FinTech unicorns. |
| Real Estate & Construction | 2nd largest employer. RERA regulation. Smart Cities Mission. |
| Indicator | Data |
|---|---|
| Theme | "Sprint and Marathon Together" |
| FY26 Real GDP Growth | 7.4% (FAE) |
| FY27 GDP Projection | 6.8–7.2% |
| Potential Growth Rate | ~7% |
| CPI Inflation (Apr-Dec 2025) | 1.7% average |
| GNPA Ratio (Sep 2025) | 2.2% (multi-decadal low) |
| NPA Recovery Rate | 26.2% (FY25) — doubled from 13.2% (FY18) |
| Forex Reserves (Jan 2026) | $701.4 billion (11 months import cover) |
| India Merchandise Export Share | 1.8% of global (doubled from 1% in 2005) |
| Services Exports FY25 | $387.6 billion (all-time high) |
| Remittances FY25 | $135.4 billion (world's largest) |
| Jan Dhan Accounts | 55.02 crore (36.63 Cr rural/semi-urban) |
| Unique Investors in Markets | 12+ crore (25% women) |
| MPI Poverty | Declined to 11.28% (2022-23) from 55.3% (2005-06) |
| e-Shram Registrations | 31+ crore unorganised workers (54% women) |
| GII Rank | 38th (2025) — up from 66th (2019) |
| MGNREGS Assessment | Reached its limits; reassessment warranted → Vikshit Bharat-GramG |
| Parameter | FY27 BE |
|---|---|
| Total Expenditure | ₹53.47 lakh Cr |
| Capital Expenditure | ₹12.22 lakh Cr (+11.5%) |
| Fiscal Deficit | 4.3% of GDP |
| Revenue Deficit | 1.5% of GDP |
| Gross Tax Revenue | ₹44.04 lakh Cr |
| Gross Borrowing | ₹17.20 lakh Cr |
| Debt-to-GDP Target | 50±1% by 2030-31 |
| Theme | 3 Kartavyas — Sustain Growth, Build Capacity, Sabka Saath |
| New Income Tax Act | Effective April 1, 2026 |
| MSME Loans | Collateral-free doubled to ₹20 lakh |
| SME Growth Fund | ₹10,000 Cr |
| CCUS Investment | ₹20,000 Cr over 5 years |
| High-Speed Rail Corridors | 7 new corridors announced |
| Indicator | Before Reforms | Now (FY25-26) |
|---|---|---|
| Trade-to-GDP Ratio | ~15% (1991) | ~48% (FY25) |
| Average Tariff | ~300% (1991) | ~15% (2025) |
| FDI Inflows | $132M (1991-92) | ~$70B annually |
| Forex Reserves | $1.2B (1991) | $701.4B (Jan 2026) |
| Merchandise Export Share | ~0.5% of world | 1.8% of world (2024) |
| Services Export Share | Negligible | 4.3% of world (2024) |
| Advantages ✅ | Challenges ❌ |
|---|---|
| Access to global markets & technology | Rising inequality — urban-rural, rich-poor divide |
| FDI inflows → jobs, infrastructure | Agriculture exposed to cheap imports |
| IT/services export boom | Environmental degradation from industrialization |
| Consumer choice & competition | Loss of domestic small industries |
| Integration into global value chains | Vulnerability to global shocks (2008 crisis, COVID) |
| Account | Components | Nature |
|---|---|---|
| Current Account | Trade Balance (Exports − Imports of goods) + Services Balance + Primary Income (wages, investment income) + Secondary Income (remittances, grants) | Day-to-day transactions. Deficit = importing more than exporting. |
| Capital Account | FDI + FPI + ECB + NRI Deposits + Banking Capital + Govt borrowings | Asset transactions. Surplus = capital inflows > outflows. |
| Errors & Omissions | Statistical discrepancy | Balancing item |
| Overall BOP | Current A/c + Capital A/c + E&O = Change in Forex Reserves | Surplus → Forex reserves increase |
| Institution | Estd. | HQ | Members | Function | India's Role |
|---|---|---|---|---|---|
| IMF | 1945 | Washington DC | 190 | Global monetary stability; BOP assistance; surveillance; SDR allocation; capacity development | Founding member. ED: Krishnamurthy Subramanian. Quota: ~2.75%. SDR allocation: $17.86B |
| World Bank (IBRD+IDA) | 1945 | Washington DC | 189 | Long-term development loans; poverty reduction; project financing; technical assistance | Founding member. India = largest IDA borrower historically. Projects in health, infra, energy. |
| WTO | 1995 | Geneva | 164 | Global trade rules; dispute settlement; trade negotiations (rounds); MFN, National Treatment principles | Founding member. Doha Round (ongoing). Key issues: agriculture subsidies, fisheries, e-commerce. |
| ADB | 1966 | Manila | 68 | Regional development bank for Asia-Pacific. Infrastructure, climate, social development loans. | Founding member. Japan + USA = largest shareholders. India = 4th largest. |
| NDB (New Development Bank) | 2015 | Shanghai | BRICS+ | Development bank by BRICS nations. Infrastructure & sustainable development. | India = founding member. President rotates among BRICS. |
| AIIB | 2016 | Beijing | 109 | Infrastructure investment bank. China-led. Asia focus. | India = 2nd largest shareholder. Largest borrower. |
| Grouping | Members | India's Role |
|---|---|---|
| BRICS | Brazil, Russia, India, China, South Africa + 5 new (2024) | Founding member. NDB HQ agreement. De-dollarization push. |
| G20 | 19 countries + EU + AU | India held Presidency 2023. "One Earth, One Family, One Future" |
| SAARC | 8 South Asian nations | Founding member. HQ: Kathmandu. Largely inactive since 2016. |
| ASEAN | 10 SE Asian nations | India = Dialogue Partner. Act East Policy. RCEP — India opted out (2019). |
| SCO | 9 members | Full member since 2017. Security + economic cooperation. |
| Quad | India, USA, Japan, Australia | Indo-Pacific security, tech, climate, health cooperation. |
| Indicator | Data |
|---|---|
| Population (2024 UNFPA est.) | ~1.45 billion — World's most populous country (surpassed China in 2023) |
| Decadal Growth (2001-2011) | 17.7% |
| Total Fertility Rate (TFR) | 2.0 (NFHS-5, 2019-21) — below replacement level of 2.1 |
| Sex Ratio (Census 2011) | 943 females per 1000 males |
| Child Sex Ratio (0-6) | 914 (Census 2011) — worrying decline |
| Literacy Rate (Census 2011) | 74.04% (Male: 82.1%, Female: 65.5%) |
| Median Age | ~28 years (world avg: 30). India has a youth bulge. |
| Demographic Dividend | 65% population below 35 years. Window: 2020–2055 approx. |
| Life Expectancy | ~70.8 years (Male: 69.4, Female: 72.2) |
| Indicator | Data |
|---|---|
| Female LFPR | ~37% (PLFS 2023-24) — rising but still among lowest globally |
| Gender Gap Index (WEF 2024) | India ranked 129 out of 146 countries |
| Female Literacy | 65.5% (Census 2011) vs Male 82.1% |
| Maternal Mortality Ratio (MMR) | 97 per 100,000 live births (SRS 2018-20) — declining |
| Sex Ratio at Birth | 929 (NFHS-5) — improving from 919 (NFHS-4) |
| Women in Parliament (LS) | ~15% (17th Lok Sabha). Women's Reservation Act 2023 → 33% reservation. |
| Women in Judiciary | ~12% of High Court judges; 3 women SC judges (as of 2025) |
| Scheme | Focus |
|---|---|
| Beti Bachao Beti Padhao | Prevent female foeticide; promote girl child education & participation |
| PM Matru Vandana Yojana | ₹11,000 maternity benefit for first 2 live births; nutrition support |
| Sukanya Samriddhi Yojana | Savings scheme for girl child; high interest; tax-free |
| One Stop Centre (Sakhi) | Shelter, legal aid, counselling for women affected by violence |
| Women's Reservation Act 2023 | 33% seats reserved in Lok Sabha & State Assemblies for women (effective after delimitation) |
| Stand-Up India | ₹10L–1Cr loans for SC/ST/Women entrepreneurs per bank branch |
| MUDRA for Women | 68% of MUDRA loans disbursed to women entrepreneurs |
| SHG-Bank Linkage | ~90 lakh SHGs; mostly women-led. Largest microfinance programme globally. |
| Indicator | Data |
|---|---|
| Literacy Rate | 74.04% (Census 2011). Kerala: 93.91%. Bihar: 63.82%. |
| GER Primary | 90.9% |
| GER Secondary | 78.7% |
| GER Higher Education | ~28.4% (AISHE 2021-22) |
| Institutions | 23 IITs, 21 IIMs, 20 AIIMS + 2 international IIT campuses (Zanzibar, Abu Dhabi) |
| Budget allocation (FY27) | ~₹1.28 lakh crore for education |
| Indicator | Data |
|---|---|
| IMR (Infant Mortality Rate) | 28 per 1000 live births (SRS 2020) |
| Under-5 Mortality | 35 per 1000 (declining) |
| MMR (Maternal Mortality) | 97 per 100,000 (target: 70 by 2030) |
| TFR | 2.0 (below replacement level) |
| Life Expectancy | ~70.8 years |
| Stunting (under 5) | 35.5% (NFHS-5) — declining but high |
| Health Expenditure | ~2.1% of GDP (target: 2.5% by 2025) |
| Doctor:Population Ratio | 1:834 (WHO norm: 1:1000) — improving |
| Scheme | Feature |
|---|---|
| Ayushman Bharat — PM-JAY | ₹5 lakh/family/year health insurance for bottom 40%. Now extended to all 70+ citizens. |
| Ayushman Bharat — HWCs | 1.5 lakh Health & Wellness Centres for primary care. Free medicines & diagnostics. |
| PM-ABHIM | Ayushman Bharat Health Infrastructure Mission — strengthen public health infra in urban/rural |
| POSHAN Abhiyaan | National Nutrition Mission — reduce stunting, malnutrition, anaemia, low birth weight |
| Mission Indradhanush | Full immunization for all children under 2 + pregnant women. 12 vaccines. |
| # | Goal | # | Goal |
|---|---|---|---|
| 1 | No Poverty | 10 | Reduced Inequalities |
| 2 | Zero Hunger | 11 | Sustainable Cities & Communities |
| 3 | Good Health & Well-being | 12 | Responsible Consumption & Production |
| 4 | Quality Education | 13 | Climate Action |
| 5 | Gender Equality | 14 | Life Below Water |
| 6 | Clean Water & Sanitation | 15 | Life on Land |
| 7 | Affordable & Clean Energy | 16 | Peace, Justice & Strong Institutions |
| 8 | Decent Work & Economic Growth | 17 | Partnerships for the Goals |
| 9 | Industry, Innovation & Infrastructure |
| Concept | Explanation |
|---|---|
| Global Warming | Rise in Earth's average temperature due to greenhouse gases (CO₂, CH₄, N₂O) |
| Greenhouse Effect | Trapping of heat by GHGs in atmosphere. Natural process; human activities intensifying it. |
| Carbon Footprint | Total GHG emissions caused by an individual/organization/event |
| Net Zero | Balance between GHGs emitted and removed from atmosphere. India's target: 2070. |
| Carbon Sink | Anything that absorbs more carbon than it releases (forests, oceans, soil) |
| CBDR (Common But Differentiated Responsibilities) | All countries responsible for climate action, but developed nations bear greater responsibility (historical emissions) |
| Agreement | Year | Key Feature |
|---|---|---|
| UNFCCC | 1992 | UN Framework Convention on Climate Change. Foundation of all climate negotiations. |
| Kyoto Protocol | 1997 | Legally binding emission targets for developed countries. CDM mechanism. |
| Paris Agreement | 2015 | Keep temperature rise well below 2°C (aim 1.5°C). NDCs by all countries. Not legally binding on targets. |
| COP28 (Dubai) | 2023 | "Transitioning away from fossil fuels." Loss & Damage Fund operationalized. |
| COP29 (Baku) | 2024 | Climate finance framework. $300B/year target for developing countries by 2035. |
| Initiative | Detail |
|---|---|
| Panchamrit (5 Climate Targets) | India @COP26: (1) 500 GW non-fossil capacity by 2030, (2) 50% energy from renewables by 2030, (3) Reduce total carbon emissions by 1B tonnes by 2030, (4) Reduce carbon intensity by 45% by 2030, (5) Net Zero by 2070 |
| Updated NDC (Aug 2022) | Reduce emissions intensity by 45% from 2005 levels by 2030; 50% cumulative electric power from non-fossil sources |
| National Solar Mission | Target: 100 GW solar by 2022 (achieved ~75 GW). Now integrated into 500 GW RE target. |
| FAME Scheme | Faster Adoption of EVs. Subsidies for electric vehicles. Now PM E-Drive scheme. |
| Green Hydrogen Mission | ₹19,744 Cr. Target: 5 MMT green hydrogen production by 2030. |
| India RE Status | 3rd globally in overall Renewable Energy + Solar capacity. 200+ GW RE installed. |
| CCUS (Budget 2026-27) | ₹20,000 Cr for Carbon Capture, Utilization & Storage over 5 years |
| Lifestyle for Environment (LiFE) | PM Modi's initiative @COP26. Promote sustainable individual actions. Adopted by UN. |
| Law / Body | Year | Purpose |
|---|---|---|
| Environment Protection Act | 1986 | Umbrella legislation for environmental protection |
| Forest Conservation Act | 1980 | Restrict diversion of forest land for non-forest purposes (amended 2023) |
| Wildlife Protection Act | 1972 | Protect wildlife, establish national parks & sanctuaries |
| National Green Tribunal (NGT) | 2010 | Dedicated environmental court for speedy disposal of cases |
| CAMPA (Compensatory Afforestation) | 2016 | Fund for afforestation when forest land diverted |
| Biological Diversity Act | 2002 | Conservation of biodiversity; regulate access to genetic resources |