RBI - Reserve Bank Of India:
Establishment:
1. Taxation Enquiry Committee:
i) It was established in 1953 chaired by Dr.John Mathal.
ii) To examine the incidents of Central, State and Local taxation on various classes of people.
iii) To examine the suitability of tax system to remove inequalities.
iv) To examine the effect of taxation on income and capital formation.
v) To explore fresh avenues of taxation
2. Indian Tax Reforms Committee:
i) Made in 1956
ii) Chaired by Prof.Kaldor
iii) Measures to widen the basis of Taxation on the following items.,
* Wealth Tax
* Capital Gains Tax
* Gift Tax
* Expenditure Tax
* Reforming
* Commercial Tax
* Tax Evasion
3. Boothalingam Committee:
i) main report was on " Rationalization and Simplification of Direct Taxation in India.
ii) Recommended 10% advalorem on all products.
iii) Simplification of Customs rates.
iv) Raising of exemption limit to the Income tax.
v) Abolition of Dividend Tax.
4. Direct Taxes Enquiry Committee:
i) Made in 1970 and Chaired by Mr.K.N.Wanchoo.
ii) Main concern of the committee was on Black Money.
iii) Extent of Black Money
iv) Causes of Tax Evasion
v) Measures to unearth Black Money
vi) Fighting Tax Evasion.
Establishment:
The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
Functions Of RBI in brief:
Fuctions:
The fuctions are classified into three heads,viz.,
A) Traditional functions
B) Promotional functions and
C) Supervisory functions. lets see the detailed accont in these heads.,
B) Promotional functions and
C) Supervisory functions. lets see the detailed accont in these heads.,
A) Traditional functions
1.Monopoly of currency notes issue
2.Banker to the Government(both the central and state)
3.Agent and advisor to the Government
4.Banker to the bankers
5.Acts as the clearing house of the country
6.Lender of the last resort
7.Custodian of the foreign exchange reserves
8.Maintaining the external value of domestic currency
9.Controller of forex and credit
10.Ensures the internal value of the currency
11.Publishes the Economic statistical data
12.Fight against economic crisis and ensures stability of Indian economy.
B) Promotional functions
1.Promotion of banking habit and expansion of banking systems.
2.Provides refinance for export promotion
3.Expansion of the facilities for the provision of the agricultural credit through NABARD
4.Extension of the facilities for the small scale industries
5.Helping the Co-operative sectors.
6.Prescribe the minimum statutory requirement.
7.Innovating the new banking business transactions.
C) Supervisory functions
1.Granting licence to Banks.
2.Inspects and makes enquiry or determine position in respect of matters under various sections of RBI
and Banking regulations
and Banking regulations
3.Implements Deposit insurence scheme
4.Periodical review of the work of the commercial banks
5.Giving directives to commercial banks
6.Control the non-banking finance corporation
7.Ensuring the health of financial system through on-site and off-site verification.
These are all the functions which are protective to the Indian Economy, thats why RBI is considered as the head of all banks.
Credit Control of RBI(briefly)
Need:
1.To encourage the priority sectors for overall growth
2.Fecilitate the flow of adequate volume of bank credit to its industry, agriculture and trade
3.To keep Inflation pressure under check
4.To ensure that Credit is not diverted to undesirable purposes
5.To fecilitate the Development of Indian economic growth
Types of credit control :
1)Quantitative Method
1.Bank rate policy: by controlling the ways and means advances to the govt.
2.Open Market operation: by controling Short term liquidity in the market.
3.variation of cash reserve ratio: by increasing or reducing CRR or SLR.
4.fixation of lending rate: control by Increasing or reducing the rate of primary or secondary lending rates
5.Credit sequeenze: by controlling the amount of bank credit at a certain limit and fixing maximum limit for commercial borrowings.
2)Qualitative Method
1.Fixation of Margin Requirement
2.Regulation of consumer credit
3.Rationing of credit
4.Prior authorisation of schemes
5.Moral sausion
6.Direct Action
Need:
1.To encourage the priority sectors for overall growth
2.Fecilitate the flow of adequate volume of bank credit to its industry, agriculture and trade
3.To keep Inflation pressure under check
4.To ensure that Credit is not diverted to undesirable purposes
5.To fecilitate the Development of Indian economic growth
Types of credit control :
1)Quantitative Method
1.Bank rate policy: by controlling the ways and means advances to the govt.
2.Open Market operation: by controling Short term liquidity in the market.
3.variation of cash reserve ratio: by increasing or reducing CRR or SLR.
4.fixation of lending rate: control by Increasing or reducing the rate of primary or secondary lending rates
5.Credit sequeenze: by controlling the amount of bank credit at a certain limit and fixing maximum limit for commercial borrowings.
2)Qualitative Method
1.Fixation of Margin Requirement
2.Regulation of consumer credit
3.Rationing of credit
4.Prior authorisation of schemes
5.Moral sausion
6.Direct Action
National Income:
" A National Income estimate measures the volume of commodities and services turned out during a given period counted without duplication." Thus National Income measures the net value of goods and services in the country.The following are the importance of Calculating National Income.,
- To see the economic development of the country.
- To assess the developmental objectives.
- To know the contribution of the various sectors to National Income.
Concept Of National Income:
The following are the various concepts of National Income.,
1. Cross National Product(GDP):
It refers to the money value of total output or production of final goods and services produced by the nation of a country during a given period of time say for example 1 Year. From this definition let us find the calculation of GNP.,
GNP = Money Value of total output or production of final goods and services produced.
GDP + (X-M) where GDP = Total money value of all Goods and services produced within the boundaries of the nation(C+I+G).
so, Consumer spending(C) + Investments on Assets(I) + Government Spending(G) +(X(Income earned and received by nationals within boundaries) - M(Money paid by India or Income received by Other nationals from the country))
GNPAs GNP stands for Gross figure of national income in must include all the capital investments(GDP) and also revenue incomes(X) and the relevant revenue payments too to be deducted out of the total figure of GDP and X. Now the Gross figure of national income is derived.
Net National Product:
Net National Product is a mostly Revenue nature of Income which will show the net income after the expenses and losses on the capital goods.
NNP = GNP - Depreciation on Capital Stock Consumption
National Income:
Now, let us calculate National Income.,
National Income = NNP - Net Indirect Taxes
= NNP - (Indirect Taxes - Subsidies)
= National Income.The National Income above derived is nothing but NNP only, but after the above calculation the NNP is at its Factor cost. Before the calculation it is at Market Cost. When NNP is derived at Factor Cost then it becomes National Income.
Various Committees On Taxation Reforms In India:
1. Taxation Enquiry Committee:
i) It was established in 1953 chaired by Dr.John Mathal.
ii) To examine the incidents of Central, State and Local taxation on various classes of people.
iii) To examine the suitability of tax system to remove inequalities.
iv) To examine the effect of taxation on income and capital formation.
v) To explore fresh avenues of taxation
2. Indian Tax Reforms Committee:
i) Made in 1956
ii) Chaired by Prof.Kaldor
iii) Measures to widen the basis of Taxation on the following items.,
* Wealth Tax
* Capital Gains Tax
* Gift Tax
* Expenditure Tax
* Reforming
* Commercial Tax
* Tax Evasion
i) main report was on " Rationalization and Simplification of Direct Taxation in India.
ii) Recommended 10% advalorem on all products.
iii) Simplification of Customs rates.
iv) Raising of exemption limit to the Income tax.
v) Abolition of Dividend Tax.
ii) Main concern of the committee was on Black Money.
iii) Extent of Black Money
iv) Causes of Tax Evasion
v) Measures to unearth Black Money
vi) Fighting Tax Evasion.
Public Debt:
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
Public Debt:
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
its too good :)
ReplyDeletecan i see this topic in Hindi language
ReplyDeletesorry rishi , since i am from englis medium i only posts in that only
ReplyDelete