IMF & INDIA (5:03 PM):

• India is a founding member of the IMF.
• India was a borrower and currently, it is emerging as a lender. (India lent during the Eurozone Crisis).
• The eurozone crisis is also known as the European Union Debt crisis during 2009-2010.
• India's voting rights have increased from 2.3% to 2.64%.
• IMF helped India during its Balance Of Payment (BOP) crisis in 1991.
• India borrowed under the Extended Fund Facility(EFF)  in 1981.
• India also borrowed under the Standby Arrangement in 1991.

World Bank Group(WBG):

Member of the WBG	IBRD	IDA	IFC	MIGA	ICSID
Formed in	1944	1960	1956	1988	1966

General information about WBG:

Body	Purpose	Voting structure
International Bank for Reconstruction and Development (IBRD)	Developmental loans, originally to war-ravaged European countries. Now it focuses on other developing and under-developed countries and on sustainable development.	Based on share capital given. The USA has the most voting power.
International Development Association	Interest-free long-term loans and grants for poor countries that are not credit-worthy.	Based on share capital given. The USA has the most voting power.
International Finance Corporation	Supports Private enterprises of developing countries. India has been its beneficiary in many ventures like launching Masala Bonds.	Based on share capital given. The USA has the most voting power.
Multilateral  Investment Guarantee Agency	Provide guarantees for protecting foreign investments in developing nations against arbitrary policy action of the government( and not market risks). Such a guarantee then makes the foreign investor more willing to invest in the developing country.	Based on share capital given. The USA has the most voting power.
International Centre for Settlement of Investment Disputes	Settling disputes between the companies and the local authority( domestic government). India is not a member of ICSID.	It is based on the principle of arbitration and has no concept of voting as such.

• India is a Blend Nation.
• It means that India borrows from both the IBRD (because India is credit-worthy) and the IDA (because India has a large poor population).
• India, just like many post-colonial nations needed foreign aid for standing up on its feet.
• The aid can be used for developmental projects (capital investments) and also for transfer payments (revenue expenditure).
• Transfer payments like subsidies, pensions, etc. can also be used for electoral gains, but in some cases, they are necessary for the poorest population.

MAJOR REPORTS BY WORLD BANK (5:40 PM):

World Development Report:

• It has been published annually since 1978 by the IBRD.
• The report provides an in-depth analysis of specific aspects of economic development.
• This year's report focuses on migrants & refugees along with their reflections on societies.

Ease of Doing Business Report:

• This is an annual report published by the World Bank.
• The report considers 10 qualitative indicators to judge the business atmosphere of any region.
• A higher rank would mean a conducive regulatory environment.
• India is ranked 77th out of 190 economies.

Global Economic Prospects:

• It is issued by the World Bank twice a year in January & June.
• The report examines global economic development & prospects with a special focus on emerging and developing economies.

Global Findex Database:

• It was launched by the World Bank every three years after 2011.
• The database was formed with help from the Bill & Melinda Gates Foundation.
• The database is a comprehensive data set on financial inclusion- how people save, borrow, make payments, manage risks, etc.

Transformative Carbon Asset Facility:

• It was launched by the World Bank in 2015 to provide a financially innovative results-based carbon market mechanism under the Paris Agreement 2015.

Poverty & Shared Prosperity Report:

• It is a biennial (once in two years) report released by the World Bank.
• It provides consistent estimates of global poverty & shared prosperity.

APPROACH TO THE EXAMINATION(6:15 PM):

• Previous Year's questions are very important.
• For prelims, we can refer to questions from 1995, and from 2013 for mains.
• Any source for them would be enough.
• For mains, we must first go through solutions of previous questions, and then go through the mains questions as given in the printed material.
• Volume II will be more important for this purpose.
• Class notes must be condensed to around 20 pages after 3 revisions.
• We must use topper notes for reference.
• We must try to follow the approach of the topper who we feel has a similar approach( weaknesses, strengths) to us.
• We must avoid being anxious regarding our language skills at this stage of preparation.
• Note-making and addition must be done in the original source (book or notes) only.
• Notemaking must be made as per the topics mentioned in the syllabus.
• Notes must be updated as per current affairs.

Approaches for some questions:

I. Critical Evaluation of Five-Year Plans:

• Keywords like "substantiate, evaluate", etc. demand relevant data and/or examples.
• We will list the long-term objectives of planning and discuss the performance.
• We can mention the objectives & results of some important plans like the first and second.

II. SERVICES -LED GROWTH AFTER 1991 REFORMS; IS IT SUSTAINABLE (6:40 PM):

• We can evaluate the performance of the services-led growth (or nay reform) in a period of around 8-10 years.
• We need to cover aspects like FDI, job creation, effects on GDP, increase in exports, etc.
• We must give a background of the BOP crisis, LPG reforms, growth trajectory, overcoming the hindu growth rate, etc.
• We must also cover some negative aspects like income inequality, ignoring agriculture, over-regulation of manufacturing, etc.
• It would be very good if we could prepare data for important and expected themes.

General Instructions:

• We must prepare the presentation strategies beforehand- relevant diagrams, bar graphs, pie charts, flow charts, etc.
• We must practice such presentations while writing mock tests as it is very difficult to replicate these things directly in the examination hall for the first time.
• We also expect some repetitions from the Economics Optional question paper, like jobless growth.
• We must not prepare even those topics in a very technical manner but must look for some value addition in terms of presentation or data.

REVISION THROUGH QUESTIONS (7:15 PM):

• Marginal Standing Facility (MSF) is for overnight borrowings only by commercial banks and banks can use the  SLR securities.
• Repo Rate borrowings can be availed by both commercial banks and governments, and banks cannot use SLR securities.
• A counter-cyclical buffer is a buffer of capital maintained by banks in good times, which may be used to maintain the credit flow  in difficult times
• The Hawkish money policy/Calibrated tightening would decrease the money supply in the economy during high inflation.
• Net Fiscal Deficit is the Gross Fiscal Deficit - the loans given (capital expenditure).
• GDP = C + I + G + (X-M).
• C is consumer spending, I is business investment, G is government spending, and (X-M) is net exports.
• Here, investment into shares is not considered under I.
• Harrod Domar's Model mentioned that a better saving: capital-output ratio will drive national development.
• The First Five-year plan was based on this model
• Indicative planning was introduced in the 8th five-year plan (1992-1997).
• Rolling Plans saw three plans- 1 year, 3 years, and a long-term plan.
• National Treatment as per WTO means
• Countervailing Duty refers to the duty levied over imported products that have been made cheaper by their original countries through subsidies and other similar facilities.
• Anti-dumping duty is levied over the imported products that are cheaper in their domestic country than the importing country so as to bring parity with the domestic manufacturers of the importing country.
• Trade-Related Investment Measures TRIMS is only for goods and not for services.
• GNP can be greater than or less than GDP as per the NFIA- Net Factor Income from Abroad.
• Net Retained Earnings and Net Interest Earnings are a part of NFIA.
• Transfer payments & grants are not a part of NFIA
• Transfer income is a part of personal income calculation but not of national income.
• Goods produced for own consumption are also a part of national income calculation.
• A Cess is for a specific purpose, it can be carried forward, not shared with the states.
• A surcharge is a tax on tax to reduce income inequality
• Advalorem tax is when the tax is levied on the quantity regarding the specifications.
• For example, a tax on soap bars will be the same on any size of soap.
• Specific tax is as per the specifications.
• For example- cigarettes as taxed as per their length in India.
• Minimum Alternate Tax reduces the tax exemptions availed by companies so that they pay at least a minimum amount of corporate tax to the government.
• Asset Monetisation is trying to monetize (earn money ) through the assets that were not monetized earlier.
• For example- Leasing out advertisement space on Metro stations.
• The Poverty Gap Ratio is used to measure the intensity of poverty.
• The Squared Poverty Gap Ratio amplifies the magnitude which gives a better idea regarding poverty in a smaller area.
• Fair and Remunerative Price (FRP) has legal backing, is only for sugarcane, and has to be settled within 14 days.
• Minimum Support Price (MSP) has no legal backing.

The syllabus for Economics has been completed for RB 1 2024.