DEMOGRAPHIC DIVIDEND:

It means growth in economy of a country due to decline in birth rates and moratality rates. It means
country will have lesser dependent population or more working population

 Personal savings will increases

 There will be more workers in labor force
 Due to lesser birth rates parents will able to provide more resources like better education and
health
 Per capita GDP will increases

Note: 34 birth and 10 deaths takes place every minute

2062 birth and 603 deaths takes place every hour

49481 birth and 14475 deaths takes place every day

GST( Goods and Services tax):

It is the single tax on the supply of goods and services and also it replaces all other indirect taxes levied
on goods and services.

Components:

 CGST: collected by central government on an intra state sale

 SGST: collected by state government on an intra state sale
 IGST: collected by central government on an inter state sale
 Exception : electrical energy , newspaper, milk products food grain does not follow GST

NOTE: sale within state = CGST + SGST

Sale to another state = IGST

1. There will be uniformity in laws, rates of tax, and procedures across states.

2. Uniformity in the rates of SGST and IGST will reduce tax evasion to a large extent.

3. GST is a simpler system of taxation with smaller number of exemptions.

4. Boosting factor to export and manufacturing activity and leads to substantive growth
CRYPTOCURRENCY:
It is a digital currency and it has strong cryptography to secure financial transactions

It allows transacting parties to remain anonymous while confirming the transaction is valid. It is not
owned or controlled by any institution – governments or private. There are multiple such currencies —
Bitcoin, Ethereum and Ripple are some of the popular ones. Currently, they are neither illegal nor legal
in India “One bitcoin today is worth as much as 60 grams of gold. The market cap for all crypto-
currencies has just crossed $100 billion.

The advantage of digital currency is very large. When you talk about transaction using Cryptocurrency
then there are no limits. Cryptocurrency is readily available to the general public. Making payment
using cryptocurrency is very easy. It provides an easier way to transfer funds between two parties in
a transaction. These transfers are facilitated through the use of public and private keys for security
purpose. With minimal processing fees these fund transfers are done. Cryptocurrency transaction
allows users to avoid the steep fees charged by most banks and financial for wire transfers.

BLOCKCHAIN:
The blockchain economy is a scenario in which cryptocurrency replaces current monetary systems,
potentially on a global basis. Although blockchain is most commonly associated with the Bitcoin
cryptocurrency, the technology is actually a distributed ledger that keeps track of transactional data in a
secure, verifiable and permanent manner.

Public blockchains can be inspected by anyone, whereas private blockchains can only be inspected by
computers that have been granted access rights

The power of blockchain technology rests on the interaction between three elements: a distributed
ledger, a consensus protocol, and a novel data structure

A ledger is simply a book or computer file that records transactions. So, in one sense, we are talking
about an innovation in accounting

• Negates the need for trust

• Immutability
• Transparency
• Traceability
• Synchronization
• Facilitates faster andcheaper payments
Demonetization:
Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever
there is a change of national currency. The current form or forms of money is pulled from circulation
and retired, often to be replaced with new notes or coins. Sometimes, a country completely replaces the
old currency with new currency. It can help stabilize existing problems, or it can cause chaos in an
economy, especially if undertaken suddenly or without warning. That said, demonetization is
undertaken by nations for a number of reasons.

On November 8, 2016, the Prime Minister of India, Narendra Modi announced the Demonetization of
all Rs.500 and Rs. 1,000 denomination banknotes. The objective of demonetization as claimed by
Government of India was to curtail the black money running as shadow economy and to stop the use of
counterfeit cash to fund illegal activity and terrorism. But it was not that successful instead only poor
people face challenges as India is an agriculture based economy. Due to the cash crunch, the farmers
especially small and marginal who largely depend on cash to buy seeds, fertilizers and to pay for sowing,
borrowing water for irrigation and for other related agriculture equipments remained worst affected
and could not complete the crop related activity.

One of the key effects of Demonetization 2016 has been that more people have made digital payments
part of their lives moving towards a cashless economy.

GREEN ECONOMY:
Green economics is a methodology of economics that supports the harmonious interaction between
humans and nature and attempts to meet the needs of both simultaneously. It aims at reducing
environmental risk and ecological scarcities

Green economies require green energy generation based on renewable energy to replace fossil fuels as
well as energy conservation and efficient energy use. In its simplest expression, a green economy is low
carbon, resource efficient, and socially inclusive. In a green economy, growth in income and
employment should be driven by public and private investments that reduce carbon emissions and
pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem
services.

New Delhi, India, 30 November 2018 – Partnership for Action on Green Economy (PAGE) held a two-day
Inception Workshop in the national capital with multiple stakeholders from UN agencies, Government
and other organizations. India, recently welcomed onto the PAGE programme in May this year, is fast
becoming one of the largest economies in Asia. With an economic growth averaging 7.4% annually, India
faces significant challenges including exploitation of natural resources, rapid industrialization, poverty
and unemployment.
PARALLEL ECONOMY:
When economic activities goes unreported or not measured by societies current techniques to monitor
economic activity it falls under parallel economy. It is also known as black economy , black economy as
the money that is generated by activities that are kept secret, in the sense that these are not reported
to the authorities. As such, this money is also not accounted to (he fiscal authorities i.e., taxes are not
paid on this money.

An estimate by Suraj B. Gupta had put the size of black money at over 50 per cent of GDP (at factor cost)
in 1987-88. It is also stated that annual rate of growth of black economy is higher than the annual
growth rate of GDP. According to Global Financial Integrity Study of 2009, $ 1.4 trillion belongs to
Indians were parked in safe havens abroad. $ 1.4 trillion is equivalent to Rs. 70 lakh crore, more than
India’s national income of around Rs. 50 lakh crore.

The circulation of black money has adversely affected the economy in several ways.

 It is the misdirection of precious national resources

 It has enormously worsened the income distribution, and has thereby undermined the fabric of
the society.
 Loss of Revenue to the Government
 Widening the Gap between the Rich and the Poor

CAPITAL MARKET:
Capital markets are venues where savings and investments are channeled between the suppliers who
have capital and those who are in need of capital. The entities who have capital include retail and
institutional investors while those who seek capital are businesses, governments, and people
Capital markets are composed of primary and secondary markets. The most common capital markets
are the stock market and the bond market.

Capital markets seek to improve transactional efficiencies. These markets bring those who hold
capital and those seeking capital together and provide a place where entities can exchange securities.
The capital market plays an important role immobilising saving and channel is in them into productive
investments for the development of commerce and industry.
A well-developed capital market comprising expert banking and non-banking intermediaries brings
stability in the value of stocks and securities. It does so by providing capital to the needy at reasonable
interest rates and helps in minimising speculative activities.
The capital market encourages economic growth. The various institutions which operate in the capital
market give quantities and qualitative direction to the flow of funds and bring rational allocation of
resources. They do so by converting financial assets into productive physical assets. This leads to the
development of commerce and industry through the private and public sector, thereby inducing
economic growth.
INFLATION:
inflation is a sustained increase in the general price level of goods and services in an economy over a
period of time. Inflation increases our cost of living.

If the inflation rate is more than 50 percent in a month, that's hyperinflation. If inflation occurs at the
same time as a recession, that's stagflation. Rising prices in assets like housing, gold or stocks are called
asset inflation.

There are two causes of inflation The most common is demand-pull inflation. That's when demand
outpaces supply for goods or services. Buyers want the product so much they are willing to pay higher
prices.

Cost-push inflation is the second, less common, cause. That's when supply is restricted but demand is
not.

Inflation reduces the purchasing power of each unit of currency. As prices rise, your money buys less.
That's how it reduces your standard of living over time. That's why President Reagan said, "Inflation is as
violent as a mugger, as frightening as an armed robber, and as deadly as a hit man."

FISCAL DEFICIT:
A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates,
excluding money from borrowings. Means government is spending more than its earning

fiscal deficit is defined as all expenditure minus total receipts except borrowings. Actually, fiscal deficit
represents the total borrowing requirements of the central government. Most importantly, fiscal deficit
indicate the financial health of the budget and that of the government. Higher fiscal deficit thus
becomes a matter of concern.

Fiscal deficit = Total Expenditure – Total Receipts except borrowings.

Fiscal deficits, spilled over, could lead to macro-economic instability particularly if the government
resorts to deficit financing

Reduce money supply in an economy.

. External debt leads to outflows from the local economy .When a government resorts to external debt
to finance their deficits, they will have to pay interest on these loans which will lead to cash outflows
from the local economy leading to inflation and other macro and micro economic issues.
FOREIGN EXCHANGE MARKET:
The foreign exchange market is an over-the-counter (OTC) marketplace that determines the exchange
rate for global currencies. Participants are able to buy, sell, exchange and speculate on currencies.
Foreign exchange markets are made up of banks, forex dealers, commercial companies, central banks,
investment management firms, hedge funds, retail forex dealers and investors.

Currencies are always traded in pairs, so the "value" of one of the currencies in that pair is relative to
the value of the other. This determines how much of country A's currency country B can buy, and vice
versa.

The value of a country's currency depends on whether it is a "free float" or "fixed float". Free floating
currencies are those whose relative value is determined by free market forces, such as supply / demand
relationships. A fixed float is where a country's governing body sets its currency's relative value to other
currencies, often by pegging it to some standard. Free floating currencies include the U.S. Dollar,
Japanese Yen and British Pound, while examples of fixed floating currencies include the Chinese Yuan
and the Indian Rupee.

There are fewer rules, which means investors aren't held to the strict standards or regulations found in
other markets.

There are no clearing houses and no central bodies that oversee the forex market.

Most investors won't have to pay the traditional fees or commissions that you would on another
market.

Because the market is open 24 hours a day, you can trade at any time of day, which means there's no
cut-off time to be able to participate in the market.

Finally, if you're worried about risk and reward, you can get in and out whenever you want and you can
buy as much currency as you can afford.

REPO RATE:
It is the rate at which commercial banks borrow money from the Reserve Bank of India (RBI) in case of
shortage of funds. It is one of the main tools of RBI to keep inflation under control. Technically, Repo
stands for ‘Repurchasing Option’.

To understand this lets take a scenario When you borrow money from the bank, they charge an interest
on the principal. Basically, it is cost of credit. Similarly, banks too can borrow money from RBI during
cash crunch on which they must pay pay interest to the Central Bank. This interest rate is repo rate.

During high levels of inflation, RBI makes strong attempts to reduce the money supply in the economy.
NATIONAL INCOME:
It refer to the money value of all the goods and services produced in a country during a financial year. In
other words, the final outcome of all the economic activities of the nation during a period of one year,
valued in terms of money is called as a National income.

The formula for calculating net national income is: NNI = C + I + G + NX + NFF - IT – D

Where: C = Consumption, I = Investments, G = Government spending, NX = Net exports (calculated by

subtracting imports from exports), NFF = Net foreign factor income, IT = Indirect taxes, D = Depreciation.

FDI:
Foreign direct investment (FDI) is an investment made by a firm or individual in one country into
business interests located in another country. Generally, FDI takes place when an investor establishes
foreign business operations or acquires foreign business assets, including establishing ownership or
controlling interest in a foreign company. Foreign direct investment (FDI) in India is a major monetary
source for economic development in India. Foreign companies invest directly in fast growing private
Indian businesses to take benefits of cheaper wages and changing business environment of India.

The Government of India has amended FDI policy to increase FDI inflow. In 2014, the government
increased foreign investment upper limit from 26% to 49% in insurance sector. It also launched Make in
India initiative in September 2014 under which FDI policy for 25 sectors was liberalised further. As of
April 2015, FDI inflow in India increased by 48% since the launch of "Make in India" initiative.

FII:

Foreign Institutional Investor (FII) means an institution established or incorporated outside India which
proposes to make investment in securities in India. They are registered as FIIs in accordance with Section
2 (f) of the SEBI (FII) Regulations 1995. FIIs are allowed to subscribe to new securities or trade in already
issued securities. This is just one form of foreign investments in India, as may be seen here

Foreign Direct Investment (FDI) is defined as the type of investment into production or business in a
country, by an enterprise based in another country. It is often contrasted with Foreign Institutional
Investment (FII), which is an investment fund, based in the country, other than the country, in which
investment is made. Both are the forms of investment made in a foreign country. FDI is made to acquire
controlling ownership in an enterprise but FII tends to invest in the foreign financial market. In most
cases, the former is given preference over the latter because it benefits the whole economy.