UPSC Notes EPFO Labour Law

2021-05-06 05:20:05 Net National Product (NNP)
Net National Product (NNP) in an economy is the GNP after deducting the loss due to depreciation.

NNP = GNP – Depreciation

NNP at Factor Cost:It is the value of NNP when the value of goods and services is taken at the production cost.
NNP at Market Price:It is the value of NNP at consumer cost.
NNP at market cost = NNP at factor cost + Indirect taxes – Subsidies

Closed Economy: An economy that does not maintain any economic relations with the rest of the world. Economic Goods: Those goods which are scarce in supply and, hence, command a price.
Nominal National Income: The money value of all the final goods and services produced in an economy during a year, estimated at current prices.
Real National Income: The money value of all the final goods and services produced in an economy during a year, estimated at some fixed prices.
Subsidy: It is the grant given on current account by the Government to the private industries and public corporations for selling certain goods at a price fixed by the Government.


National Income Measurement:
➨ Primary sector: all production units engaged in exploitation of natural resources like Agriculture, Fishing, Mining and Quarrying , Forestry and Logging
➨ Secondary sector: all production units engaged in transforming one good to another like Registered manufacture, unregistered, Construction, Electricity Gas Water supply
➨ Tertiary sector: all units engaged in producing services like Banking&Insurance, Trade, hotel, restaurant, transport, storage , Real estate dwelling, Public administration & defence, other services. Open / Comment

2021-05-06 05:20:05 Concept of National Income
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National income estimates are the most reliable macroeconomic indicators of an economy. Therefore, it is essential for students to be aware of National Income Concepts. Changes in national income measure the rate of growth of the economy.

Similarly, changes in the structure of national income of an economy reflect the changing significance of different sectors. In India,
national income, as also per capita income, have been continuously increasing. In more recent years, the rate of growth of national income has
accelerated. It indicates that the economy has been growing at a faster rate in recent years than in the past. Along with this, the structure of national income has also undergone a change, the tertiary sector has emerged as the dominant sector of the economy.

National income accounting comprises of four concepts of calculations- GDP, NDP, GNP, NNP.

1. Factor cost is the input cost that producer has to incur in the process of production. It includes cost of capital – loan inetrest, prices of raw materials, labour, power, rent, etc. Can be termed as Production cost.

2. Market cost is calculated after adding indirect taxes to the factor cost of the product. It is basically the cost at which the goods reach the market. Also termed as EX-FACTORY PRICE. In India we calculate income at factor cost because of non-uniform taxes.

National Income:The sum total of factor of incomes accruing to the residents of the country, both from their activities within and outside the economic territory is the national income of the country.

National income is calculated for a particular period, normally a financial year (In India, financial year means April 1 to March 31 of next year). Net factor income from abroad is added to the domestic product to get the value of National Income.

National Income = C + I + G + (X – M)
Where,C = Total consumption expenditure
I = Total investment expenditure
G = Total government expenditure ; X – M = Export – Import


Gross Domestic Product (GDP)
Gross domestic product is the value of all final goods and services produced within the boundary of a nation during one year. In India one year means from 1st April to 31st March of the next year.
GDP calculation includes income of foreigners in a Country but excludes income of those people who are living outside of that country.

Net Domestic Product (NDP)
NDP is calculated by deducting the depreciation of plant and Machinery from GDP.
NDP = Gross Domestic Product – Depreciation

Gross National Product (GNP)
GNP is the value of all final goods and services produced by the residents of a country in a financial year (i.e., 1st April to 31st March of the next year in India).
While Calculating GNP, income of foreigners in a country is excluded but income of people who are living outside of that country is included. It is the GDP of a country added with its income from abroad.
GNP = GDP + X – M
Where,X = income of the people of a country who are living outside of the Country

and M = income of the foreigners in a country

India’s GNP is always lower than its GDP.
This is the national income according to which the IMF ranks nations.
It allows for knowledge of factors in production behaviour and pattern of an economy’s dependence on outside world, nature of human resources internationally, position in world economics.
It indicates both qualitative as well as quantitative aspects of an economy in a more exhaustive fashion than GDP.

Intermediate products = one production unit purchasing from other for resale

Final product = all goods and services purchased for consumption and investment , and not for resale

Value added = Value of output – Intermediate cost

Gross value added = net value added + depreciation

Indirect tax = all taxes levied on production, finally paid by consumer of buyer Ex – sales tax, excise, customs

Subsidies = Financial help given by the government to the production units for selling the product at lower prices. Open / Comment

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2021-05-05 05:07:42 Centralised Funds Management System (CFMS)

The Centralised Funds Management System (CFMS), is a system set up, operated and maintained by the Reserve Bank of India to enable operations on current accounts maintained at various offices of the Bank, through standard message formats in a secure manner.

The CFMS comprises two components –
Centralised Funds Enquiry System (CFES) and
Centralised Funds Transfer System (CFTS).

These have been made available through the following sub-systems :

the Apex Level Server (ALS) – ALS is the software component which resides in the mainframe computer systems currently housed in at Mumbai

the Local Funds Management System (LFMS)- LFMS is the software component which would be functioning from the server systems at the Regional Offices of the Bank where the Deposit Accounts Department (DAD) is existent.

the Bank Level Funds Management System (BLFMS)- BLFMS is the software component provided by the Bank to the members of the CFMS and would be used by the Treasury Department / Central Accounts Department

the Local Banks Funds Management System (LBFMS) –BFMS is the software component which would be given by the Bank to the CFMS members for accessing the facilities at each local DAD.


Eligibility Criteria

Each entity, which maintains a current account with the Bank and is a member of INFINET, will be eligible for membership to the CFMS.

Admission to the CFMS may be granted, suspended or revoked by the Bank at its sole discretion. All applications for the CFMS membership shall be addressed to the Regional Director, Reserve Bank of India, Deposit Accounts Department, where the Current Account of the Institution is maintained with. The respective DAD shall duly process the application and grant access subject to:

a. Declaration on site readiness by an officer not below the rank of a General Manager
b. Certificate of INFINET Membership
c. Maintains a current account with DAD


Transaction Types

The following types of facilities shall be available through CFMS:

a) Enquiries relating to the operation of its current account/s maintained with any of the DADs
b) Funds Transfers between accounts of the same account holder at different DADs.


CFMS Operation Sessions

The CFMS will normally be operational on all days on which at least two Deposit Accounts Departments of Reserve Bank of India are working.

The Bank may, at its discretion, change the operating calendar. Any changes to the operating calendar or any declaration of unscheduled holidays will be communicated by the RBI to the members by means of a broadcast message or otherwise.

The Bank, may at is discretion, and in the interest of the system as well as its members, effect changes in the hours of operation of the CFMS for a particular period which may be for a part of a day or be across days or for any period as may be decided by the Bank. Such changes will be notified by the Bank to the members through a broadcast message or otherwise. Open / Comment

2021-05-04 09:01:06 Revenue deficit refers to the excess of revenue expenditure over revenue receipts.

Effective revenue deficit is the difference between revenue deficit and grants for creation of capital assets.

Fiscal deficit is the difference between the revenue receipts plus non-debt capital receipts and the total expenditure including loans, net of repayments. This indicates the total borrowing requirements of Government from all sources.

Primary deficit is measured by fiscal deficit less interest payments. Open / Comment