 I hope we remember what we studied in the last week right. So we had started with the survey chapters. What we have done so far is about having the overall view about what has happened to GDP, trends and patterns. That was the first chapter. The second chapter was talking about the medium-term growth. So both were sounding very factual and abstract and things to remember. When we studied these two chapters, they had mentioned a lot of global level challenges and challenges faced by India. So what were the measures taken for the challenges? Subsequent to the measures, what were the impact created by the measures which were taken for the challenges? So we saw all of these things in a sequence. We had started with the third chapter which is upon the fiscal developments, talking about the budget as such. So we recalled the basic budget structure where we said there is a revenue account and there is a capital account and we also said about the receipts and expenditure and both the things. So again, when we get into this particular chapter, we saw like two, three tables and the data related to it. The flow of the chapter will be coinciding with the budget structure. Basically we have the revenue account first, then we talk about the capital account. Similarly, here also they will be presenting about the revenue receipts, revenue expenditure followed by capital receipts and capital expenditure. So what we are doing is we are not remembering exactly the numbers from this table for the examination purpose, but we need to know the trends and patterns, whether the fiscal deficit has gone up, gone down, those kinds of trends and patterns is what we are going to observe and what dominated and why did it happen and how are the taxes increasing and how are we looking at it overall perspective. I think in the last week also we mentioned that the economy can become regressive or progressive depending upon the types of taxes collected. So these are the lessons learned. I am telling again, if you have anxiety in the reading economic survey, we need not have the anxiety. We are not here to remember every data which is given on the table of economic survey. That is not the agenda with which I have come to the class. What you have learned in your basic class, whether you are able to relate that concept to the table is what we are attempting here. No person will be able to memorize all the data and then present. That is not also the way how UPSC is going to ask you question. The questions will be only analytical in nature. At least earlier days UPSC will ask a question on what is the fiscal deficit percentage. Nowadays in the past five years, six years we don't have such kind of a factual question at all. So therefore don't be very keen on the numbers or the facts. What we are trying to say is putting in all of these things in a context to understand the overall picture. So if you can't memorize what is there in the business expectation index, all the individual indicators into it, it is fine. That is not the issue. But at least you should know what is this business expectation index telling, whether the future will be good and who is the agency who has done this. So these kind of basic information, if you know any kind of question, we will be able to answer. So set aside the anxiety, we are going to look at the survey as the survey is presenting itself. We are not putting everything what we know into the book, what we know into the table. We are going to look at the survey as it is telling us. That's all. We go slide by slide. We see what every table or every slide is telling us as a message. Is that clear? So we will go ahead today with the third chapter first where we had started actually talking about the fiscal developments. This first graph which we already discussed in the last class is actually the macro picture. I remember asking you what are the macro economic indicators? Is it not? So fiscal deficit is one of the macro economic indicators and this should be actually discussed after we look at all the budget components, receipts and the expenditure side. But however, the chapter starts with a very good point saying that the fiscal deficit is actually falling down. For your reference to think how much as it falls down, you can actually remember this somewhere around 6.4%. I'm sure you are very, very familiar with this 6 percentage number because in the inflation class they would have told you 2 to 6 percentage is the range within which the inflation should float. So remember that same kind of a 6 percentage for the fiscal deficit also. But that is also higher because FRBM Act is asking you to reduce this fiscal deficit as percentage of GDP. So this is very higher. So what is that? The government is actually planning to do further or very higher. It's a word for 6 percentage but we were even higher two years before when COVID was there. So we are actually on the track. That is what is the thing. So there are two ways of looking at this number. If you just look at the number 6.4 percentage you can still comment it as higher. But compared to how we have traveled through the years, compared to this 9.2 percentage, we have definitely reduced and we are on the track. And that's what they have said here, fiscal glide. We are gliding down and there is a very good management from the government side. How did government manage to do this? We are going to see in the subsequent slides. I think this number also we mentioned that keeping a very, very modest estimate. How much will I be able to collect the taxes? If we look at this, the collections compared between the two years, April to November 2021 and April to November 2022, you can obviously see that the gross tax revenue, the value is higher. This year they have collected like 17.81 lakh crores. Whereas the previous corresponding period was around 15.42 lakh crores. And this number as percentage of budget estimate is to show you that there is a possibility that we will be able to collect more because we said that we will be able to collect 100 rupees in a year. But within this period of April to November itself, we have collected 64 rupees. Therefore, we presume that we will be ending up collecting 120 rupees towards the end of the year. April to November, they are looking at something like half year or H1 kind of a thing. Actually April to September is half year. But still we can say that there is a scope of collecting more taxes by the end of the financial year. So that's what we are saying. Conservative assumptions have resulted really in projecting or finally ending up with the good numbers in our hand. And we also mentioned about this word buoyancy in revenue. So what is this word buoyancy? We explained that there is something which is increasing. So we said corresponding to the increase in the GDP. When the overall income of the country is increasing, the taxes what you are giving is also increasing. So what taxes I am collecting from you should be slightly higher than the percentage, the kind of way how we are doing compared to the growth rate of the GDP. So when we say that, yes, we are going to call the economy is very, very tax buoyant. So that has also been proven. And that table also I think we saw in the last class. So this is about the absolute numbers what we had in the taxes where we saw about the direct taxes and the indirect taxes. And we have definitely seen that the direct taxes collection have improved the corporate profit tax as well as the income tax. And we are seeing that the income tax collections are actually becoming very higher when compared to even the proportion, how much this corporate profit tax has increased. And similarly, we have seen that indirect taxes collection have also improved in the corresponding period. But you can see that in the union excise duty, there is a decline in the collection. I think we mentioned the reason. Sometimes this fuel related excise duties were increased when the global level oil prices reduced. But when global level oil prices increased, this thing was reduced. So it was oppositely going. When the oil prices are low, we increase the taxes. When oil prices are high, we reduce the taxes. This is to moderate the prices at which the people can get the oil and fuel. And therefore, this union excise duty was mainly related to this fluctuations. Whereas GST collections, you can obviously see that it was increasing from 4.53 to 5.57. And after showing the increase in the taxes in the corresponding period, they are also giving the reasons why we were able to do this. We have said the tax base, tax compliance, everything has improved. What is the meaning of the word tax base? Tax compliance, we all comply, we pay. Therefore, it is increasing. What is the meaning of the word tax base? Who is eligible to pay the taxes? So we are all the tax base for GST. Every single commodity or the service when we consume, we are all paying GST. So we all make the tax base. Who is the tax base for the income tax? Anybody who is earning more than 2.5 lakhs, 5 lakhs, so they are going to put a slab. So who is eligible? So that particular thing they are saying, the tax base has actually improved. So when you are earning more automatically, start paying the income tax. Then we have also seen about this GST digitalization, formalization, improved methods of collecting GST. Earlier, when we were paying service tax, we used to pay only once in three months. But GST nowadays, we have to pay every month. So there are lots of changes which they have brought into the tax collections also, which has also helped them in efficient collection of the taxes. So this diagram, as we said in the last class, personal income tax and corporate profit tax together, they have presented as overall as more than 50%. If you add the state government's collections also, then this picture will totally change. It will tilt towards indirect taxes. This is the central government taxes alone, what we are discussing here and therefore, it looks progressive. The meaning of the word progressive is direct taxes should dominate indirect taxes. On the other side of the diagram, they are trying to show that the personal income tax collection compared to the previous year, corresponding period, has increased very much even better than the corporate income tax. This customs duty and excise duty used as the flexible policy tools we have already mentioned based upon the changes in the prices in the oil. This table also we discussed in the last class where we were trying to show how the taxes are being buoyant, particularly with the GST system. We know like which were all the taxes which were getting into the GST. In the pre-GST period, we showed that the buoyancy was less than 1, whereas now we are trying to show that the buoyancy is more than 1. After all the taxes have been subsumed inside the GST, we are seeing that when the economy's GDP is growing, the collection of the taxes have also improved much better than the growth of the nominal GDP. Now we are getting into this table which is actually talking about the non-tax revenue over receipts. So far, whatever we have said is about, you remember the budget structure under the revenue account, you have tax receipts and non-tax revenue receipts. So these are the major components of the non-tax revenue receipts. The first major component will be the interest receipts which will be received by the loans which were given under the capital account. And second thing about the dividends and the profits. So they are all on the track. The meaning of that is compared to the previous year, you can see that the numbers are comparable. This is for the half early. So even then, you can see that the interest receipts are comparable to the previous year. So interest receipts are actually happening in the major way, followed by the dividends and the profits. All these things, I am going to put it into one summary table which you already know. When we get into that table, you will be able to relate and arrive at the fiscal deficit. Once we discuss the structure, we will get into that table. This is your NDCR. Is it not? Can you recall what are the components under? We are now getting into the capital account, budget capital account. Then there are two headings in the capital account. Is it not? One is the debt-creating capital receipts, non-debt-creating capital receipts. So when we are talking about debt-creating, we are going to talk about all the borrowings, what we get. But here, what we are talking is about the non-debt-creating capital receipts. So there are two major items under the NDCR. One is recovery of the loans as such. Number two is the disinvestment. Recovery of loans, they haven't discussed at all in the economic survey. What they have done here is only about the disinvestments. So in that also, they are giving you some numbers. You don't have to remember these numbers. It is only to mention that they have collected a larger amount under disinvestment. So they are saying like in the year of the financial year of 2015, they have done a very good collection through the disinvestment policy. Sometimes they just sell minorities state like 5%, 10% out of the, you know what is disinvestment, right? There will be a public sector unit. Some percentage of the public sector units the share will be sold to others. If it is sold at a minimal level like 5 to 10 percentage, it is a minority state. If you are selling a larger percentage, then it is going to be strategic disinvestment. So both the things were attempted and you can see many thousands of crores of money was raised through this. As well as we saw in the first chapters itself that we have asset monetization policy, NIP, then this for the infrastructural development, we are going towards the monetization. You remember we mentioned the difference between the disinvestment monetization. Sometimes we lease out and then we get the money. Sometimes we just sell it out and then we get the money. So all of those money are being kept under the title non-depth creating capital disease. So that was seeming to be a very good collection in the last year. This title is moving towards the expenditure side under the capital account. We can see here the government's capital expenditure is increasing. You remember we made use of the word CAPEX. So repeatedly they are bringing in more importance to this word CAPEX and they can say that out of the total expenditure what the government is spending the capital expenditure is coming at least up to 19 to 20 percentation. So this they are actually presenting as percentage of GDP. This within the expenditure itself they are looking at whether it is revenue expenditure or the capital. Slowly they are trying to claim that capital expenditure is increasing. And where do they spend the capital expenditure on? These are the major sectors which they want to show. All of them are infrastructure related sectors. The roadways, railways, defense, telecommunications these are the major things which they are spending. And they always say that when you spend on the infrastructure it's not just the spending it is employment generation subsequent to that it will result in income generation subsequent to that it will result in demand motivation. It will also result in savings. When savings come into picture again investment will improve. So that is the capability of the capital expenditure. So now we are looking at this table which is upon the revenue expenditure. We finished the capital expenditure now we are looking at the revenue expenditure. They order they have placed like this only. We should have actually finished the revenue expenditure and got into the capital account. But anyways the top most item under the revenue expenditure will always be what? Revenue expenditure question and the components of RE they have repeatedly asked in prelims examination. What are the components under revenue expenditure? That itself has been a question for several years. You need not know the numbers but you should know this. Salaries, pensions, interest payments, subsidies all of these things are major things into this. So the top most item will always be interest payments. Why are we paying interest under the revenue expenditure? Because we borrowed loans under the capital account under the heading debt to creating capital receipts. Always try to link between the accounts that is what we did with external sector BOP also on the other day. Similarly always link between revenue on the capital account. Interest receipt was there because we gave loans to somebody under capital account. Interest payments are there because we borrowed under the capital account. And can you see that the borrowing has actually increased in the previous two years because of the covid situation and that is what is actually getting reflected in the interest payments here. You can see that laps and crores of money are going out in the form of interest payments whereas subsidies you can see that it peaked in 2021 but slowly now declining. These are two different patterns which you have to see between interest payments and subsidies. Interest payment is now also peaking though our original borrowing has come down. Did you see the fiscal deficit? In the first slide we saw it was 9% now slumping to 6%. But the interest payment is moving from 6% to 9% because we have already borrowed and now we have to pay the interest payments for what we have borrowed. But subsidies is a separate thing. You can increase the subsidies, you can decrease the subsidies. It is up to the government. It doesn't have subsequent effects. It will have effects majorly for the production purpose consumption purpose but it won't come back and affect the accounts as such. So there are things which are linked between the accounts which are also having different perspectives. We all know that DCR is fiscal deficit. We all know that debt to creating capital receipts is the volume of fiscal deficit. So when I say the word fiscal deficit you all will know that this is the volume what we have borrowed. First slide we saw 6.4% just fiscal deficit. Is it not? The meaning of that fiscal deficit is that the government has borrowed that much under debt to creating capital receipts. Don't leave the word DCR. We go with the budget structure. We should not miss the words. That is why we repeatedly make use of the word NDCR and DCR. Now we are going to also summarize another word called as NDR. Now we are all clear with the DCR and NDCR. Debt to creating capital receipts. Non-debt to creating capital receipts. You have disinvestment under NDCR. You had the tax receipts with not all the revenue receipts under the tax and the non-tax. If you put taxes, non-tax revenue receipts and the NDCR together that is what is going to be called as NDR. You heard the word NDR. What is the formula for fiscal deficit? Anybody fiscal deficit? I want all the components. We don't have components. Revenue expenditure plus capital expenditure minus revenue receipts minus what is left to behind us? Debt to creating capital receipts. You have two things on the right hand side. Is it not? Revenue receipts and NDCR. If I put a bracket, I should say plus. Is it not? Everybody agree? These two things together will be called as NDR. Non-debt receipts. So, tomorrow if in the examination they are going to ask you fiscal deficit is equal and though now I will come to your language. Total expenditure minus NDR. Is this a correct answer or not? You all understood? Don't go and search for revenue receipts there. It is already added into it. This is how they are going to project the table. I am going to show you a summary table. Have we understood this? So, you should know what is DCR, NDCR and NDR. All three things. So, this is actually showing you the importance of the interest payment. Can somebody tell me the formula for primary deficit? Loud enough. Fiscal deficit minus interest payments. So, we are looking at interest payment as the major item under the expenditure and we are removing that out and then we are finally seeing the primary deficit as the value. So, now what they are trying to do is they are trying to compare that big item under the expenditure which is the interest payment as proportion of revenue expenditure, gross tax revenue and are you seeing the word non-debt receipts? That is our NDR. So, everywhere they are going to say first the red color line which is interest payments as part of revenue expenditure. Revenue expenditure, we already saw the components. Is it not? We said subsidies are there, salaries there, pension is there, interest payments are there. So, out of the expenditure that particular table, this is dominating. This is slumped a bit but now we are on a very high increasing level because we borrowed a lot in this particular period. That is like around 30 percentation. The second thing is interest payment as gross tax revenue. It is now moving on to the revenue side. Why are they saying this? We have to take the revenue and give the interest payments. Is it not? When you borrow, when you have to pay the interest, you need to have income in your hands. Is it not? So, what income we are mentioning here? It is the tax income. So, out of the tax income if I take 100 rupees is the money what I have collected in India as the taxes, I have to pay 34 rupees as the interest payment. So, then the third thing is interest payment and the non-debt receipts. This is going to include not only the taxes but also the non-tax revenue receipts as well as the NDCR, everything put together. So, in that we are seeing that it is actually going up to 41.2 percent which means that apart from the taxes, we are taking money from the NDCR also and then we are giving it to the interest payments. So, we are trying to repay a lot with the income what we get. If we keep repaying, where will be the money left behind for us to do the developmental activities? So, that is the worry which they are trying to tell us. Now, they are mentioning four reforms which they say they have done in the budget presentation. Presentation as well as in the disciplining. One they are saying the government is not being allowed to take much of the extra budgetary borrowings. You have studied public debt, is it not? Can you tell me the components of public debt? After FRBM Act, government borrows, we have studied the NDCR, we know the components of NDCR, government borrow from where? Banks, public, RBI, external institutions and other governments, external governments. So, all these things whatever you said under DCR will again be discussed under public debt. In the public debt, they would have given you two major topics, three major topics actually. What are the three? Internal debt, external debt, other internal liabilities. Whatever you said the DCR components, you are going to fit it into the internal debt and other internal liabilities and then you will be talking about the external debt. External debt is what you said from the international organizations from the other countries. So, we will leave it alone. Let us look at the internal debt. Under the other internal liabilities, you would have said that there are some post office savings coming, national small savings funds coming, you remember? So, those are all actually they won't present those borrowings under your budget. I will tell you one difference between this DCR and public debt. If you borrow this year, what is this year? Let us take from January of no, let us take from April of 2022 to current this March of 2023. Every month if you keep borrowing by the 5000 rupees from somebody, how much is the borrowing towards the end of the year? 60,000. This is DCR, we heard. Like this you would have borrowed every year in the past, you are the government, you never changed, you always borrowed. So, now you have to look at your borrowing box, you open it and then you see for several years you have borrowed and you have placed lakhs and lakhs of money. That is your public debt. We understood the difference. Motta kadan is public debt. In the Varshutta, the kadan is DCR. So, in that motta kadan, the public debt, they would have presented certain categories, internal debt, external debt, other internal liabilities. These other internal liabilities would have been mostly from the savings which the public do with the post office and other things. That money whatever will not be presented under DCR. You followed what I said? Extra budgetary borrowings. That is why I am struggling with this word. Extra budgetary borrowing. So, government is being asked to reduce these resources because wherever you borrow, ultimately it will come and hit the interest payments. So, please reduce the extra budgetary borrowings. That is the first thing which they have said. The second thing is they have removed the difference between the plan and the non-plan division under the expenditure, which is giving more flexibility for them to go for the spending. These days, we don't have a planning commission. Instead, we have a PTIO. We don't have this kind of a five-year plans, but we keep talking about medium term things. Five-year plan is actually a medium term thing, but that is what the government says. Therefore, this division under the heading, earlier when we studied budget, we will be studying the budget only with the heading plan and non-plan. But these days, we are not making use of the headings because they have removed the heading and they are giving more flexibility. Plan means in the five-year plan, whatever you have budgeted, you have to make use of the resources like that. Non-plan means there could be certain changes, but now the total thing is under kind of a non-plan and there is a bit more of flexibility in making use of the resources. So, that is the second thing. The third thing is merger of the railway budget with the main budget. This is also enabled for better resource allocation. The total fund is available to allocate across the sectors, which is why you saw that infrastructure, CAPEX also includes the rail-based thing. Then we have this shifting the date of budget to 1st of February. Earlier they used to be presenting only towards end of February, March. Now they are going towards end of Jan. This again gives you some more time. You have another two months time to meet out with your targets. You know there are lots of schemes which are spending their money only towards the year ending. Suddenly one whole year will be January comes, then the district collectors and everybody will be looking at this scheme has not been spent properly. See, if you don't spend the budget properly, next year they won't give you allocation. So, hurriedly they will go on buy things, buy the infrastructural diagnostics and other equipments, machines, everything into the year ending. So, they just want to avoid these kind of processes. They want to rationalize throughout the year. So, they are also giving a bit more reasonable timing before they finish the financial year. Budget is always presented in the quarter four of the current financial year for the subsequent financial year. So, these are all the changes which they have brought in with the budget presentations. This is a table I am sure we are very, very familiar through our class. This is not exactly into the chapter. It is there in the annexure. I brought in this table mainly to give you familiarity. We will first say revenue receipts and revenue expenditure. Inside the revenue receipts, what are the two components? Tax and the non-tax. Non-tax is seen here, but this tax is having two things. One is the gross, another one is the net. So, from the gross there are some allocations which they give to states. We transfer some of the taxes to the states from the central government. So, they are removing that out which is what is this word net. So, we take this net tax revenue and the non-tax revenue. Have you understood this? So, these are the tax revenues which is why if you add these two things you will see the revenue receipts. Is it tally? So, 1.3 and 1.1 is adding up to 8.4. Have you all understood? We should not add the gross tax revenue. We should add only the net tax revenue and the non-tax revenue. So, then we have the revenue expenditure. Then we have this revenue deficit. Let us first finish the revenue deficit formula. What is the formula for the revenue deficit? Revenue expenditure minus what is the revenue expenditure for the latest year? Let us look at revenue expenditure is 12.4 minus revenue receipts is 8.5. What is the answer? 3.9. There is some small difference in the percentage, but that is how the answer is derived here for the revenue deficit. So, next we should say the fiscal deficit formula. I said not. What is C value here? Capital expenditure 2.9 plus RE. What is RE? What do we have RE? 12.4. So, this will make the total expenditure. Have they give the total expenditure? Yeah, total expenditure is here 15.3 and we should minus the RR from it. So, 15.3 minus 8.5 minus where is the end is here? We have the 0.3 as the value. So, what is the answer here? Minus 6.4. Is it tallying? The answer is 6.4 which is what is the fiscal deficit. So, they also have this word non-debt receipts. So, instead of being 1 minus 1 minus and all, you can actually do, what is it? 15.3 minus 8.9. That will also give you 6.4 percentage. Are we clear? If you minus these two things, you will get fiscal deficit. Total expenditure minus NDR will give you fiscal deficit. So, primary deficit is how much? 2.8 percentage. Fiscal deficit is 6.4 percentage. So, how much is interest payments? FD minus interest payment is primary deficit. So, FD minus primary deficit should be interest payments. Is it known? So, that is what? 3.6. So, that is, you should go and tally this number with earlier table. It will get tally. So, that is how the table has to be analyzed. So, over a period of time, we are seeing that the revenue expenditure is actually now slowing down. The capital expenditure is actually increasing. These are some good things which we can see from the table. Particularly, the capital is increasing is seen as a very good thing. Revenue receipts also is having some good buoyancy which is what has been presented in the earlier tables. We are saying that we have collected more taxes in the completing financial. This is for the budget estimate upcoming year. So, these are the numbers what we know actually as a percentage of GDP which is presented. So, now we will move towards the state finances. Usually, UPSC does not get into asking state finances separately. Except for one data which they will say, you remember this debt to GDP ratio. FRBM at, it will be saying you should reduce at least by 1 percentage minimum. These days, they have given some target. 40 percentage should be the percentage to center and 20 percentage to the states. Put together, you get 60 percentage. But are we there in the 60 percentage? This is a bigger question. As we move ahead, I am going to show you the table of the debt to data also. As of now, we are just looking at the state's deficits. They always ask only about central government data. They don't ask the state government data. But because the survey is presenting, we are looking at some of the parameters on it. So, you can see here similar to the central government, state government is also having a pattern of reducing the fiscal deficit in the after peak happening in 2021. So, that's somewhere around like between the 0 to 1 percentage they are showing here and that is the gross fiscal deficit and the revenue deficit. Revenue deficit is between the 0 to 1 percentage whereas the fiscal deficit is up to 3.4 percentage. Central government had it around 6.4 percentage. Put together, it will go up to 10 percentage. This is to say that how the central government is helping the state government. How can it help? We have learned finance commission. Is it not? What does finance commission do? It's going to give some resources to the states based upon their performance based upon the 3-4 parameters. They are going to announce the parameters. They will say that based upon your population, your area, forest cover, certain other things, your fiscal discipline, I am going to share my resources with you. That's one way of how they do it. And there are some other ways how the center can give the share to the states which is like through the GST compensation. Why this GST compensation came into the picture because when they introduced GST, they said like for another 5 years we will support you. If you have a reduction in the collection of the GST or the taxes as such, I will help you by giving you some compensation. So that is what they are trying to say. So CGST collections, SGST collections, IGST. I am sure you are all familiar with CGST, SGST, IGST. IGST goes to whom? Central government. So that is again getting shared back to the states. And then the compensation also you can see that in the last period like when there was COVID and all they shared a lot. One point said because obviously in that period the taxes collection were less. So now again it is becoming less because the states they are themselves performing better and back to back loans. So central government can also give loans to the state governments. So this is again they are trying to show that the buoyancy, post buoyancy of GST revenues approving to states. So even that they are saying then the central is collecting more taxes. They are sharing more taxes. So how we are saying when the GDP is higher, we collect more taxes. Similarly the center is collecting more taxes. They are sharing more things to the states. So here also they are trying to show that there is a buoyancy of the GST collections. And this is one point which you can actually remember from the survey for the examination point. If you have read FRBM for the central government, you should also know fiscal regulatory legislation for the state. FRL, if it is FRBM for center, it is FRL for the state. We give some targets to the center, is it not? You should have only this much debt. You should have only this much fiscal deficit, all those things. Similarly, we are going to give some targets to the states. We are going to say you can have like 2%, 3%, 4%, like that. So in the COVID years they said you can have up to 5%, then they reduced it to 4%, then they came to 3.5%. And then this enhanced limit of borrowing, they are giving a bit more of borrowing to the states if they are doing well in the local collection. What is the local collection of the states which center doesn't like interfere at all is some property taxes collection, some electricity taxes related, power sector related. So they are saying that if you are doing well on your own, then I will give you some more enhanced limit for borrowing. Remember one thing, central government, state government, both of them if they have to borrow, they have to mostly come to us, which is the public. When central government is borrowing, state government cannot come and borrow because people will be mostly diverted towards the central government. So this is the total population of the country, both of them competing for the resources from the people. Therefore central government will give some regulations to the state government, then it can go and borrow, how much it can go and borrow from the public and all. So these kinds of regulations are now on then given to the state governments, particularly at the time of difficulties, they do enhance the limits of borrowing. So now we are coming towards the public debt of the government. We have to remember the title internal debt, external debt and other internal liabilities. These are the three major topics which I told you. Under the internal debt, the major thing will be your market borrowings. Market borrowings means you are going to sell the securities to the people and accordingly you are going to raise the funds. So that is seeming to be the largest amount. Every year that will be the largest amount followed by the other internal liabilities followed by the non-marketable, this is all the G-sectoring. Then you have this external debt will be very, very minimal. More things they have not described here. Actually under the internal debt, the things which you mentioned, borrowing from RBI, borrowing from banks, all those things should also come. In this table, they have given only the marketable securities as the major item and the resources raised through them. And therefore, let us say that this is the major borrowing of the government and they are giving one more diagram corresponding to this internal and external debt where they say that internal is the 95% and external is very less which is only up to 5%. This again safeguards India from international fluctuations because whatever we are borrowing just as the external debt 4.9% also is from the international organizations and not from other countries. So that is also like giving us a bit of security feeling. We do not have to be bothered what the other country will be doing to us. So they borrow it from the international organizations. So that is that percentage. This amount has been translated into percentage there for the overall public debt. So public account liabilities or the savings which you do with the post office and other national small savings fund schemes, your pension funds, provident funds, all those things will be placed under the public account which will be called as the other internal liabilities. So some amount is also coming from the extra budgetary resources. This is what they said they have to produce. And one nature of this public debt is they will be usually going with a fixed interest rate which is also important for the government so that it will know how much it has to pay back in the future. Sometimes this itself is a trouble because if the inflation is very low at that time when it is giving back the money then it will result in furthering the inflation. So fixed interest rate in one way it is good for the government. Sometimes it becomes bad for the economy as such. So that is the other nature of it. Overall internal debt is the maximum thing. External debt is less that's one good point and about the fixed interest rate. These are the two things which you'll have to remember on this. This slide is showing you one green and red colored thing where they are trying to say that how to make the debt is sustainable. We are only talking about sustainable development. Why should we talk about sustainable debt? Because every year government is borrowing whether the government will be able to give back the interest payments. So that's the question. So when you are seeing the growth rate is higher than the interest payment obviously you will be able to sustain the debt. Debt to sustainability has become a thing of discussion for economic survey for almost three four years. They keep on writing about this particular paragraph every year in the survey these days. And we know that the growth was affected so badly in the past two three years. So therefore you can see that in 2021 we did not have that ability of showing that the growth rate is actually higher than the interest payments. But now again slowly we are seeing the difference. And what they have done is they have given you one hypothetical table case study analysis. We just make two observations out of it. I have not brought in any of the numbers from that particular box item. They have given you a scenario. They can say that when growth is at this level what happens to the debt 8 percent 10 percent 12 percent like that they can give you hypothetical situation. What is the essence of the case study or the scenario analysis what they have done is if you have a 10 percentage growth rate definitely your debt will be sustainable. So you can borrow more when you have income more. That's one plain statement. But even if you have a moderate to growth but that growth is sustained then also your debt will become sustainable. That's the second thing what they are saying. Third observation what mainly they are saying is this. Don't assume that the fiscal deficit actually increased because the government went on borrowing. It is also looking bigger because it is presented as percentage of GDP. There are two things in max one numerator another one denominator. The numerator here in this case is we are talking about the borrowing. The borrowing can remind the same. But if the income shrinks the denominator then the percentage will look bigger agreed. That's what they are trying to say. The debt remaining the same the deficit remaining the same but suddenly it may look bigger because your income became smaller GDP reduced and therefore the percentage is looking bigger. So they are again coming and putting all pressure on the denominator. Maybe I am remaining at the same level but do you have the sustainability depends upon the denominator. So go and sustain your growth. Don't come and tell me that maintain the deficit. I will maintain my deficit but you have to focus upon the growth. Which is why even at the inflationary time the government is struggling between balancing the inflation and balancing the growth. If you contain the inflation and go and put the monetary tightening then growth will be up. So it's stuck between the objectives. So that is the major thing which they are mentioning in this particular table. They are saying if you grow by 10 percentage you will be able to sustain. But it's not just that they would have said somewhere. So even on account of higher taxes higher spending and lower taxes revenue the denominator is actually undershooting. The denominator is nothing but your GDP. So always look at economics with the numbers in the numerator and the denominator. So the fiscal chapter is getting concluded by looking at the holistic policy for fiscal stability. So they are actually stimulating. They are controlling as and when it is required. Tax reforms have definitely resulted in increased collection and formalization of the economy and they have summarized all the issues in this particular third point. We have high debt. We have high deficit. We have lots of financial issues. The financial issues whatever is there we are going to discuss in this chapter what we are going to open up now. So anyways with all these issues we have still thought that we will be moving towards the path of recovery and India's recovery is mostly dependent upon the economic growth and fiscal discipline. Economic growth is happening because we are all demanding people. Centre is also incentivizing the states whenever they are doing well they are allowing them to borrow more. Capaclet growth will definitely ensure sustainable debt levels. So they are linking all the points together. These are all the major observations for the second chapter third chapter actually which is on the fiscal. So now we will move on to the fourth chapter which is upon the monetary management and financial intermediation. You would have studied as money banking and inflation is it not? Instead of calling it as banking chapter they want to call it as financial intermediation chapter. The title itself is actually saying that there is a larger role for the banks and other organizations which are standing between two people. What are they? One fellow is having the money one fellow is wanting the money. So I am the bank I will take your savings I will give it out as loans. So financial intermediation is the major role of any organized financial institution. The most organized financial institution which we are going to discuss is the commercial bank schedule commercial bank. So this is slide needless to repeat it again we know that the history what has happened pandemic war inflation tightening now slowly recovering. This is the thing which they have repeatedly mentioned but there is one slide towards the end of this chapter which is comparing the situation with the 1970s. Again in the subsequent to this chapter after the monetary management we are going to study about inflation. So they are also you are going to see how the inflation has spiked after a long time to this high level. So now we are looking at the monetary developments definitely there had been supply side disruptions once covid was over demand came up but the war came then again the global commodity prices are increasing because of the war and now it's all coming into control. Let's look at the monetary tightening as such there is a very good diagram which has been given by the survey. So you can see a very long period with not much of an increase in the policy rates. Can you tell me what are the major instruments the heading under the monetary policy fiscal policy two things you would have studied contractionary fiscal policy expansionary fiscal policy. Expansionary fiscal policy is the word fiscal stimulus which we repeatedly saw through the entire of the last chapter. Now we are studying monetary policy who will give the monetary policy what are the two types of monetary policy again expansionary monetary policy and contractionary monetary policy contractionary is what we call as monetary tightening. So we have instruments under monetary policy what are the major types of instruments the first title the headings two types of monetary policy instruments quantitative instruments and qualitative instruments what are there under the quantitative instrument which is what Arbe believes to be controlling the inflation open market operations liquidity adjustment facility slr crr you should actually start with crr slr they both together will be called as variable reserve ratios vrr what is elia if somebody mentioned elia so i need to know what is inside elia liquidity adjustment facility so open market operations crr slr repo reverse repo marginal standing facility rate bank rate these days we have this mc lr marginal cost lending rate right what else today we are going to study one more facility standing deposit facility which is a newer thing which rba has introduced in the place of repo rate right so they are all the things which we are going to see that between 20 and 21 the period when we had covid subsequent to that they just kept it flat at a very lower rate which was basically the expansionary monetary policy whenever they reduce the rates of interest it is expansionary they were giving monetary stimulus like the fiscal stimulus but then you are seeing that it is creeping up all the colorful lines like your repo rate sdf rate msf rate everything is creeping up mainly because we have inflationary conditions as of now right so then we are saying that retail inflation you have two types of indices to measure inflation louder wholesale price index consumer price index your consumer price index will be repeatedly referred to here as retail inflation whenever you see the word retail inflation substitute in your mind cpi right cpi has actually started increasing from last jan that's slowly when the war came into the picture then this rba introduced to this a standing deposit facility so now a bit more on the standing deposit facility what do you do under repo rate rba bank what do these two people do do the repo rate rba will discount who is parking money with whom commercial banks borrow money from rba by doing what they have to first of all give the government securities to the rba and rba has to give the money to the bank it will discount to more if it is the inflationary condition sit down i have a government security of 100 rupees value okay this is the paper i won't give it to rba rba will give me 100 rupees no it will cut the value how much it doesn't cut it will increase when it is inflationary it will give you only 90 rupees it will give you only 80 rupees if it is inflationary so the amount which it cuts which is what i want to call as the discount now for the standing deposit facility commercial banks will give nothing to rba it's not the securities it's not anything right so what they are going to say is excess funds will be parked with the rba so that they don't give this money to the people why we don't want this money to go to the people to control inflation right so therefore we are going to say that it is a collateral free manner it doesn't include even if you talk about the reverse repo rate what is reverse repo rate no no no it won't give you immediately it'll tell you it'll give you later right so you are going to park your excess fund with rba intern rba has to give you back something is it not rba will give the government securities it will say that it will give you rate of interest higher in the future it won't tell you immediately so looking at that future perspective then banks will go and park the excess funds with the rba now there is no security and all which is involved here no collateral which is involved here it is just that commercial banks will go and park the excess funds with the rba so this is all happening overnight thing and therefore this is actually replacing the reverse repo rate the new floor of the liquidity adjustment facility so parking the excess funds so there are two words which we are talking in terms of the monetary policy absorption of liquidity infusion of liquidity absorption of liquidity happens when there is higher inflation infusion of liquidity happens when there is actually a requirement of motivating the economy so here is all about the absorption of the liquidity so that also they are frequently making use of it right now because of the inflationary conditions so now the word the monetary tightening and other things are there but slowly we are also looking at the survey and seeing that it's moving from accommodative to withdrawal of the accommodation but also supporting growth this is the problem which I told you whenever they are trying to control the inflation growth will definitely be affected they are explicitly saying I want to grow but I also want to control the inflation so there is a different word which they are saying I want to be accommodative but I also want to slowly withdraw the accommodation so that I control the inflation but I don't compromise on the group this is a clear signal of whenever they say withdrawal of accommodation they are calling it as signal of the monetary tighten so that's about the monetary policy which the RBA has been implementing in the recent past I'll show you one more table towards the end of the thing how much percentage they have increased in terms of all the rates repo reversal and other things this table you would have studied under your monetary aggregates we remember our reserve money narrow money intermediate money broad money right four things m0 m1 m2 m3 there is no m4 now m4 is all under liquidity aggregates right so basically they are just looking at the numbers and giving some some reasons why something increase why something decrease like that we don't have to remember numbers from this table it is only certain observations which we are trying to make so the table is upon the growth in monetary aggregates right compared to the previous year how much growth have we had we can see that they are first discussing about the reserve money where they see currency in circulation currency in circulation was not as high as the last year but still there is a eight percentage increase they are saying that this is for the precautionary holdings right most of the money we want to keep it with the bank but sometimes when we keep the currency in our hands we give the reasons that because of the uncertainty in the situation we want to hold some money in our hand then we have this expansion in reserve money can we tell the components of reserve money currency in circulation bankers deposits with rba other deposits with rba so the bankers deposits with rba will be mainly having crr into it so that is what we are saying expansion in the reserve money was also driven by amount of crr which is getting into the rba right so then we have this narrow money growth narrow money growth narrow money is the money which we want to make use of it immediately it's all kept in your savings account or in the current account but that has not grown as much as it was growing in the previous year then we come to the broad money indie broad money we can see that currency in the public is same like in the currency in the circulation similar rate of growth and in the deposits there is one good thing which we are seeing here the demand deposits actually the growth is less but the time deposits growth has actually become better whenever you see this time deposits growth are increasing it means that you are leaving your money with the bank for a longer time which means that the bank will be able to make use of it for giving it to the loans in a better way right so that is one good thing which has happened currency in circulation and public is all low people take it to the bank but they don't just keep it as a narrow money they are slowly moving it into the broad money which is a good sign to look at right whenever you have these words m3 and m1 no do this thing m3 minus m1 why you should do this because m3 has m1 in it m3 is accumulation of m1 m2 and finally it becomes m3 so if you do this m3 minus m1 you will know how much is the time deposits I load which will give you an idea whether we are actually holding the money for a longer time with the banks or not which will help the bank to give the credit right so overall there are some good features where the banks are unable to give more credit to the people and money multiplier it is actually showing you the number how fastly the credit can be or the money can be multiplied in the economy what is the formula for money multiplier m3 by n0 right broad money divided by the reserve money when the reserve is slightly lesser then you give more money to the people in form of the credit right so that is reasonably good in number so this is also saying they are it's remaining stable and it is also good in number in terms of like the number five where the money multiplication will happen better this in this graph you can actually just refer to this left hand side of the graph what is shown in this graph is first we mentioned about the monetary policies it not we said it is all tightening second we said about the monetary aggregates where we said that currency in circulation and other things are there so this is combining both the things they are trying to say that when the monetary tightening happened what is the meaning of the monetary tightening credit will not come to the people money will be there with the bank but that money will not flow to the people because they have raised the interest rate so we can see that this blue line it is keeping on fluctuating aggregate deposits currency with the public currency in the public is also fluctuating so whenever there is an uncertainty you can see that the green line will be actually going higher and whenever there is a betterment of the situation that's when the broad money will come into the picture so here they are saying there is a declining trend of the broad money when you have uncertainties you prefer to hold it in your hand and when the interest rates are all being hiked you know when they increase the interest rates for the lending same times they will also reduce the interest rate for the deposits how much percentage of deposit are you all getting for your savings amount two to three percentation earlier it was like around four to five percent even up to six percentage even if you keep it in the pixel deposit the rate of interest what they give us very very less at the time of inflation when there is a monetary tightening they will reduce all the deposit related rates and they will increase the interest rates the rates at which they are lending the loan so therefore people will not be much interested in holding their money with the banks they will try to withdraw and keep it with themselves so this is all happening because of the monetary tightening so they are trying to put in this caption declining growth of broad money right still we wouldn't say that there is no growth but there is a declining trend in the growth of the broad money in this graph I would want you to look at only on the right hand side right just leave this weighted average and all those things but you can see that reverse repo rate repo rate SDF rate marginal standing facility rate all of them they had been on an increasing trend as a result of the withdrawal of the accommodation basically the monetary tightening so this is all showing between the dates April and the December so there is a continuous increase in the all the policy rates whatever see when you mention the quantitative instruments no open market operation CRR SLR repo reverse repo STF whatever you want to mention they all will travel only in one direction when we are talking about the lending rates they all will travel only in one direction when you talk about the monetary tightening whenever there is inflation whenever there is tightening all of these rates will increase whenever there is a difficulty whenever there is an expansionary monetary policy all of them will decline together so there is no different trends for us to remember we just look at the graph you can say that every rate will only increase repo will increase reverse repo rate will also increase that's the way how we have to look at this particular condition right now we are slowly moving on to the other segments of the financial market which is one is the government securities assume that this is one government security okay government always comes and sells it to the public I sell it for 100 rupees and then I tell you that I will I'm taking I'm going to take 100 rupees from you then I'll tell that I'll give you 110 rupees okay so you're all competing for this but the competition is more you will try to offer more price so you'll say I will give you 101 rupee 102 rupee 103 rupee so you're all fighting and then somebody takes it for 103 rupees so whatever rupees you give me I will give you back only 110 agreed so when the difference is there between the price 103 and 110 that is the 7 rupees which I'm going to call it as yield understood if you all compete more and somebody's offering 105 rupees what happens to the yield so when the price which is offered to the government security is more the yield decreases when the price offered is less the yield increases so when you say that the price offered is low it means that people are not wanting GSEC which means that I don't have money to buy GSEC I don't have money to invest in GSEC which means that the economy is under trouble when the GSEC yields are reducing it means that many people are competing for the GSEC and they are coming forward to purchase so that is all what is actually presented here they first say in 2021 and all the GSEC yield rose which means people were not having money in the pandemic time to come and invest in the government security then it's slowly moderated moderated means it again reduced which means that people are now wanting to go and buy the government security that's what they are saying now the trading volume in GSEC is actually increasing obviously the GSEC yield will be moderating becoming lesser have you followed this it's not like the share it's the bond which is we actually call it as coupon rate if you have read in the newspaper we call it as zero coupon bonds where all the common terminologies which will come basically you can assume coupon rate means how much money am I going to get as a benefit by buying this government security which depends upon the price because the total amount what the government will give will remain the same that's about the government security which is actually recovering now we look at the banking sector this graph we have already seen in our first class when we were talking about production in the NPAs right so they are basically saying our bank is all becoming healthier our NPAs are all declining from 8.2 percentage to 5 percentage what is NPA what is non-performing assets assets what is an asset loan is an asset so the loans which are all not recovered for how many days 90 days so within the 90 days if you are not recovering it we declare it as NPA and that percentage is actually declining which is very good and they are representing that kind of assets the loans across different sectors we can see that how this NPAs are actually falling down you can you should actually see the latest bar it's all falling down across the sectors but in personal loans alone it's remaining the same or it's slightly higher so we can see that GNPA is declining the same diagram but we want to say that RV has worked a lot you know the success story of IBC I'm going to show you more data on the insolvency and bankruptcy for and the crar has also been maintained well so it's somewhere around 16 percentage now right 8 percent 9 percent 10 percent 12 percent 14 percent that was the kind how the slowly the capital adequacy ratio kept on increasing what is capital adequacy ratio loan percentage of capital which the bank keeps with itself as well as it keeps with RBI capital to risk weighted assets you should say it as tier 1 capital plus tier 2 capital divided by risk weighted assets right all your difficulties the risk will be sitting in the denominator all your ability to meet with that risk will be sitting in the numerator tier 1 capital tier 2 capital they should you should have it enough if you have lesser capital then a denominator will pull you down you have more loans but you have lesser capital you have less loans but you have better capital those are the situations which will vary it this scenario will be dealt differently by the public sector banks and the private sector banks right public sector banks will have to give the loans denominator must happen so therefore if there is a loss in the loan who will come and help for the capital government will come RBI will come and they will infuse the capital in the numerator whereas the private sector banks they cannot get the capital infusion from the government or from RBI therefore they will be very very vigilant about their denominator so that's the strategy which private sector banks will follow we understood what we said public sector banks will have to give loans who will come and help RBI or the government will come and infuse the capital so with some confidence they'll go ahead so there are ways how capital adequacy ratio is ensured by the public sector bank and by the private sector banks but somehow we are actually ensuring up to 16 percentage of fraud which is a very good ratio according to Basel so we this is all showing the healthiness of the financial system right and profitability of the schedule commercial banks in terms of return on equity and return of assets both are good what is the meaning of return on equity they also sell their shares can banks go on equity state bank can sell shares can the bank can sell shares so they they can also offer shares and then they can also make some returns on it when will they make returns on the shares only when you think that the bank is performing good state bank share is coming into the market do i want to buy it if i believe state bank of india only then i will go and buy it if you see a good prospective only you will go and buy somebody come some company's shares similarly return on equity and return on assets what is the return on assets return on the loans right i give a loan i get a good return on it so they they're all becoming better they are actually going back to the good periods of 2015 and all so overall they are giving a very rosy picture to the banking sector and they are saying that they have improved their performance a lot and this giving up the loans across the different sectors that are had been ups and downs in it but still we can see that towards the last two years you can see that there is improvement in agriculture improvement in giving for industry again improvement in giving for services and for the personnel so after a slump we should have been happened with the year 21 every every sector is getting more loans in the recent past right so then they want to say that credit growth will actually result in savings and the investment economic growth and the investment so again this graph is actually showing you put together everything they call it as non food bank credit apart from the agriculture sector they want to say for the other sectors it is also continuously increasing in the recent past and they want to say it is all double digit now we look at the non banking financial companies there are two things which these nvfcs will do the moment you mention non banking financial companies they are the people who are also participating in giving credit to the people but you should know that nvfcs will also go and take money from the banks then you should ask the question why the banks are not directly giving it to the people why are they giving it to the nvfcs and then giving via nvfcs to the people right i am the bank there is one more nvfc both of us are giving money to the people so we should directly deal with the people is it not why should i give my money to the nvfc and nvfc will take that money and give it to the people procedures the ease of access repayment period rate of interest monitoring by rba these are all bit different to the nvfcs when compared to the banks so instead of keeping money with the by the banks with themselves they at time give to the nvfcs and the nvfcs give it to the people otherwise also nvfcs they can also take deposit there are two types of nvfcs deposit taken or non deposit taking they can also come and collect the money from the people and then they can give that money to the people back who over is requiring so there are different modalities which will work that's why we have named this graph as credits to and credits by nvfcs so the graph is actually showing that orange color bar is showing how much credit is being given by the nvfcs whereas the blue color line is showing how much credit the banks are giving to the nvfcs both are actually increasing right and why the banks are giving to the nvfcs they are also believing that they won't be ending up with the nvs so quality is good over there also so i believe them and then i give and to whom are these nvfcs giving mostly they are giving it to the industry don't just look at the bars and then decide the amount it's about the latest year on year growth but if you look at the percentages given below no first thing is they give to the manufacturer in the car secondly they give to the personal loans that's why i told you nvfcs are easy to approach and therefore they give a lot to the retail sector they call the personal loans as a retail sector so that's happening followed by the services right even to agriculture they give loans this is about the insolvency and the bankruptcy course achievement they are saying like there are lots of cases going on this is carp that is corporate insolvency resolution process get used to the word corporate insolvency resolution process right so that process is going on and who is actually now let us assume that there are hundred companies in this classroom who are the people who are going to this ibc mostly it is the manufacturing sector followed by the services sector so manufacturing sector people are the people who will be actually finding it difficult to mobilize the capital bring in the equipments bringing in the technologies they may be mishandling things and then they may be missing out on the profit so if you see 52 percentage of all these kinds of resolution process is all going towards the manufacturing sector followed by the services right and they have also given lots of diagrams comparing that and this is all to show you that lots of ci rps have been closed if you have 6000 more than 4000 or closer to 4000 we have close to the cases so they are trying to show the success or the achievement of the ibc saying that it is all on the track they take up the case they either close it or there are different things there some people are withdrawing some people are giving they are being revived through the resolution plans there are varieties of things which they do through the resolution process here they are saying that whenever there is an npa now the ibc collection is actually the best of all the methods what rba has actually attempted we know surface a actor came by 2002 3 and all we have depth recovery tribunals which also help you to recover the npas local dollars which is outside the court which is again an alternative mechanism which will come and help you to recover the loans though we have so many mechanisms in the country the best working mechanism so far is ibc which has resulted in you can see that it is actually going on increasing with its collections so they say like ibc is a good method surface the act was good earlier right from 2002 3 but now even better than surfacey they always go towards the ibc right now slowly we are moving towards this capital market you all said you haven't attended the capital market class is it not share market so we are not actually going to teach you any basics through this thing we are only going to tell you capital market has recovered like your economies recovery so but there are some small small differences here you should know two keywords when you get into the capital market one is the primary market another one is the second what is the primary market first time you are selling the shares initial public of and all once the share is already there into the market we keep exchanging the shares within ourselves that will become the secondary market so they are trying to say that lots of companies came ahead with IPO LIC was also one of the things which in the biggest history placing IPO for the first time in the previous year right and they are trying to say that SMEs small and medium enterprises also came ahead to place the shares but you can see that many people came for selling the shares the volume raised is actually less when compared to the previous year so you should not assume that many people are coming forward to place their shares economy has totally revived that's not the case they are trying to say that 37% is the number of people compared to the previous year which means that if there are 100 people in this class 37 more people are coming into the class for selling their shares but the volume what the 100 people raised last year the money compared to that in the current year it is only 50% of it so which means still people are not demanding that much behind the shares so that the price or the value of the shares will increase so there are different different pictures slowly it is improving IPO is improving number of people increasing but volume has not increased as expected so this is the picture and there is one more change in the capital market I want to buy the shares or I want to call them as a derivative derivatives means which I will be buying in the future not now right today I buy the share today I sell the share there are lots of other things like that today I buy the share tomorrow you know within the day you can do shorts today assume that there is a company whose share is falling okay there are two people in the market buyer on the seller I will go and post myself you know the DMAT account screen is it not fully colorful always changing so I go and say that 100 rupees morning I am seeing the company's share but I know this shares value is going to fall right first I will ask you one basic question when will you go and buy shares in the share market when the price is falling you have to buy when you have to sell the price is increasing you have to sell okay now I know that one company's the share is going to fall because they have difficulties so what I go and say is I don't have the company share in my hand but I will go on say I am the seller and I will say I have 10 shares of company and post it into the market and somebody will somebody also thinks that the price is slumping so he will want to come and buy okay so he will want to come and buy by the end of the day I have to transfer my shares to him do I have shares in my hand no what I will do is 100 rupees will become 90 80 by the end of the day I will buy 10 shares and give to the other fellow to whom I promised in the morning that fellow when he bought from when he said that he will buy from me it was 100 rupees how much money did I buy for 80 rupees and I will give for 100 rupees to the other fellow within the day I have to settle but without even having the shares in my hand I will say that I will give it to you by the end of the day I have to give it to you so I will go buy somewhere else and I will give it to you by the when I am buying is a question I will buy only in the afternoon time and actually the price has fallen so I sold you for 100 rupees but I bought only for 80 rupees the difference is what is the profit what I am making but this is all very very risky what if the price doesn't fall I will be into soup so there are varieties of share market trading you can do shots you can do like you can buy today and you can keep it for two days three days four days and then you can sell shares or you can say that I will fix the price today I will buy the share in the later later date after a week's time after one month the time they're all called as the derivatives equity derivatives right so now what we are saying is in the population people have started both the equity derivatives rather than buying the equity as such I don't want to spend today I will spend in the future that's the meaning of the behavior and of course like how you are trading the shares you can also trade the commodities you know that you know that we can trade the commodities including your lng gold silver copper metals there is a market called as commodity trading market ncdex mcdex right so there also you can buy for lesser price sell for a higher price you will get varieties if you are a processing person you will get a large quantity in one place you don't have to go in search of the farmers so therefore those kinds of commodity prices also fluctuated because there was a supply chain disruption right availability of basic essentials itself was difficult so then people went towards the commodity market their price started fluctuating because there is a huge demand for the commodities so like the share market we also had trends in the commodity exchange markets right tell me some share market names which you know vse nse vse's indicator is called as sense nse's indicator is called as nifty there is one more nifty jr nifty will have 50 sensex will have 30 right they are all not fixed but they are all top performing companies right they are all the basics with that and then when we are talking about the share market suddenly we are also talking about fbi why fbi what is fbi very good what is foreign portfolio investment foreign investors will come and invest in the our share market right so there are many methods for it routes for it you would have heard about monetary tightening is it not we said so many stories in the last year we said us was doing the increase in the interest rate so dollar supply was reducing so capital flight was happening out of India actually capital was not coming towards India people were withdrawing the capital from India in spite of all these things there are two words which you have to say the capital outflow is the capital flight capital inflow is what we get as the fbi moderating these two things you can still see that between November 2021 and November 2022 there is a smile mild increase in the volume what we are holding in the form of fbi right it's not as bad as we thought now that the things have come under control we are still seeing that the fbi is giving some good volume to the country then there are different colored bars which you are seeing here and then still the title is foreign portfolio investment actually it's not just the foreign portfolio investment you also have the domestic institutional investors you are seeing the trend between 19 to 23 there are two three things foreign investments domestic investments and mf what is mf mutual funds have you heard about mutual funds some companies will take money from you and they will invest across different types of instruments short-term long-term high risky low risky instead of you directly going and doing the transactions in the share market mutual fund companies will be subjected to market risk you have to read the documents offer documents very carefully and go on invest with the mutual funds mutual fund was ruling our capital market or the kind of the investments at one point at a time three to four years ahead if you say that everybody was talking about mutual fund but this year economic survey is presenting mutual funds are even going into negative they have slowed down i don't want on the people where are the people moving they are mostly moving towards the derivatives as i told you they all want to spend only in the future they don't want to do the investment immediately so there are lots of uncertainties that's why this yellow bar has even tilted down so now they have given a summary of the all the three things the point from this graph is yet another thing you can see that the blue thing reminding consistent which is the domestic institutional investors foreigners come and invest in our share market indians also invest in the share market so those people who have invested in the share market there was not much of a change the change only comes with the instrument not now but in the future that's the behavioral change which the diagram is actually showing we have already said even there was a fba outflow still we are having overall one asset holding in india though in the initial period we can say that the outflow was higher but still now now we have a positive fba into our hands and they are saying instead of the foreign investors our domestic institutional investors are showing lot of strength into the capital market so people are having positive outlook about the economy then there is a larger discussion on the cryptocurrency I'm sure you would have studied in your basic classes about the bitcoins banning of the bitcoins people don't trust it why people don't trust bitcoins there is no central authority there is no person who is printing it there is no backing up for what do you mean by backing up there should be legal tender money somebody should sign governor should sign right it's all not there so therefore what is our money backed up with indian currency is backed up by what it should be backed up by gold it should be backed up by foreign exchange reserves 515 crores of backing up is required 400 crores of forest reserves 115 crores worth of gold every country should be backing up its currency with some amount of gold and the larger amount of foreign exchange reserves if you are not an international currency am i an international currency india ayana no why we are not an international currency they're still depreciating we are not hard currency yet we are only soft currency we are fluctuating people are not trading with ayana people are trading with dollars right so as long as i am not an international currency my currency should be backed up by gold because gold is an international currency you all agree gold is an international currency and foreign exchange reserves totally we should have 515 crores worth of backing up which is called as minimum reserve system those kinds of systems are not there behind this bitcoin therefore right from us everybody is thinking that we should not make use of this they are also talking about the challenges of this bitcoin to the banking system the risks which are being posed second thing is when you say about the cryptocurrency what are all the variety of other digital products available also is a question because nobody is actually giving the ownership of this there are more challenges which they want to mention the broad spectrum of digital products are being called as the cryptocurrency and there are lots of people who are called as a miners who are the protocol developers there are lots of like a software development there are lots of people who are involved in this development of the cryptocurrency how do we regulate all of them if there is a leakage and how would i find it out and who is creating it who is transferring it who is exchanging it and how are we storing it everything is like very ambiguous these are all the reasons why we are not liking the digital currency or rather the cryptocurrency right so there is a detailed discussion which is being given in the survey how every country is now dealing with this cryptocurrency has india agreed it to it do we like the cryptocurrency no but why is it being called as currency then it is not having a back what are the functions of a currency what is the what is the function of our money medium of exchange store of value it should be able to be paid in the deferred payment and it should be countable it should have a unit of account is it not right of all the four things the major thing what this will do is it will act as a medium of exchange with a kurutha samaan vangalam that's why it is becoming into currency that is why it is posing risk to the economy right store of value that we don't know deferred payment if i borrow and then if i give rba this bitcoin nobody will accept but the major function which this bitcoin is doing right now is medium of exchange which is why it is becoming into currency which is why barter system is called as a type of money we gave commodity for commodity but still we call that as the origin of our currency system or the money as a concept why whichever is giving you and getting back thing that will become into money money is not a thing money is a concept that's why bitcoin is all evolving right gift to city current affairs you're all done right should i repeat gujarat are indramudi smart city high level infrastructure international financial services center so we have lots of facilities here for the residents and the non-residents to bring in more financial interactions between the countries and there is also a authority now which is called as international financial services authority which is controlling it that authority has all powers of rba sebi virida pension regulatory fund so everything is now being given with this one particular agency to control the financial services with very high level infrastructural and all the kind of facilities in the smart city of the state gujarat where is it located closer to gandhi nagaran ahmadabad between that right so that's about the mention there is a box item on this gift to city then they have discussed on two different markets one is the insurance market another one is the pension market right whenever you talk about the insurance the immediately what comes into your mind is an uncertainty so the uncertainty could be about the life or it could be about the theft another thing so they divide the insurance market into two major things life and non-life right so they are giving picture across the world that us is the most insurance having the biggest insurance market followed by china and japan and developing countries and developed countries they are presenting different pictures between the life and the non-life insurance products right so we have to study two variables here one is called as insurance penetration another one is insurance density if i take this class as the country what is insurance penetration is how much premium you are all paying assume it is 10 000 rupees 10 000 divided by gdp that is penetration you remember penetration with premium in your mind density when you make use of the word the density you always think of the population density is it not similarly if i assume that this is the country how many of you have come forward to do the insurance is the insurance density so keep those two keywords with you so that it will be easy for you to remember now we go see the data for this these are all the life related insurance premiums this is all non-life related in the life related you can see that euro zone they are leading in it whereas in the non-life insurance things we are in the emerging economies india is also part of this rose bar so in the non-life thing is where we are all going ahead what will be the non-life thing it will be mostly the health insurance motor insurance fire insurance theft insurance they are all the things which will come under the non-life so slowly india's penetration as well as density both are increasing why is it all increasing they are again saying there is a lot of formalization digitalization and then this irida is also coming into picture for the regulation with all these facilities we are able to become better off in the insurance market you can see the insurance penetration insurance density both are increasing this is for the life insurance and non-life insurance you can see in india they are actually moving more towards the non-life insurance philosophically these people they think like let us not worry about when we will die but let us think we have to be very safe when we are alive so they're not bothered much about the life insurance but they are worried about the motor insurance theft insurance health insurance and all so you can see the behavior of the people into the insurance market the number of people also correspondingly to that we can see for the non-life insurance thing only they are actually giving more importance eurozone was giving more importance to the life insurance probably because of the covid experience right there are lots of government insurance schemes many of these schemes you would have already read as part of your current affairs i'm just going to mention the name and then major thing what it does aishman barat yojana the moment you hear the word aishman you understand it is a health insurance scheme then there is one pradhan mantri surakshabhima yojana suraksh is all given to the disabled people pradhan mantri jivan jyoti yojana jivan jyoti right you should remember the jyoti the life is going out of you so it's related to the life insurance or death and you have pradhan mantri vaya vandana yojana vaya is vayodhigar old people so like that you should remember this is all for the coverage for the old people pradhan mantri fasal bima yojana obviously for the farmers f fasal farmer so you remember the schemes name and how they are covering the different sections of the society the last sector which this chapter is actually touching is upon the pension sector similar to the insurance pension has one nature usually we think that people who are working with the organized sector they are the people who should do the pension slowly only the idea of pension moved out of this organized sector to the unorganized sector any person who is not having a regular employment should also be able to contribute towards the pension so there are lots of pension schemes old age pension widow pension scheme disability pension but the most popular thing which came into the picture is the nps and the apy national pension scheme which came up in 2004 it slowly moved towards this unorganized sector then it was having a very wide coverage of the years you can see the age between 18 to 70 years over there whereas in case of your atal pension yojana it is between 18 to 40 years of age lesser than that and but it is also giving trying to give it is trying to make it as a universal social security system so after bringing in this nps and then apy only the situation actually changed a lot in terms of the pension sector penetration pension funds are very very important source of borrowing for the government but extra budgetary other internal liability uh these are all voluntary savings insurance sector at least you can say there are lots of private players into it right pension is mostly the government system and the money whichever is coming in the form of the voluntary savings is all going for the dcr or into the extra budgetary borrowings so this is seen as a very major source for the government to take the for the resource mobilization and here also the processes have been formalized a lot you see the digi locker all the permanent pension retire retirement account number like your pan number and they are processing it within two days and settling it to the people if it is required right so the life certificate facility and all they can get it easily done at home you know the meaning of life certificate whenever they go and do some claim they have to take a certificate from the doctor and then prove that uh the life certificate so that they can claim things so all those things have been simplified these days digitalized these days so with all these process facilitation pension sector is also becoming into a better off sector in terms of resource mobilization so the outlook for the chapter is finally saying banks and non-banks everything is actually improving ibc is also doing good our demand is becoming better insurance pension everything is doing better gsec is also doing better these days and therefore overall there is a positive outlook when you talk about this capital market remember one thing whenever you talk about the share market private sector will dominate whenever you talk about the bonds market government will dominate people will not like to go and buy government's share not much why government share will come only through the process of disinvestment when will government go and do the disinvestment the company is actually not doing well so government's shares are not liked by the people you go and talk about the people to buy private sector bond no they won't buy private sector bond corporate bond they don't trust the people private sector for bond market so there is a peculiar behavior of people in the market in india government bonds private sector share this is how the capital market functions have you understood this difference right government means that's why government is borrowing the internal debt of the government is majorly through the gsec marketable securities but when you talk about the share market they will always go only with the companies they will not go on by government shares so this pattern in the capital market is also to be remembered so with that we are done with the chapter 4 you go ahead with the fifth chapter threshold ready to absorb only about inflation which you already know the whole chapter is going to talk about two things what are the two things cpa wpa monetary policy and all we already spoke in the last chapter itself how is inflation what caused inflation what are the weights what are the difference between wpa cpa where does they converge where do they diverge these are the things which are there in this chapter actually a lighter chapter and compared to the previous chapters these are all country wise presentations where you can see different countries peaked in different different times you can see that us inflation rates peaked in may june itself whereas uk uh no brazil peaked in may june itself us also actually peaked in june uk is having a peak right now uh germany is also having a had a peak in september so different countries at least they can say that in this past year they are saying they have reached to the inflation rates which they have not seen in the past 10 years 15 years 20 years 30 years right inflation is harmful to the economy inflation snatches away money from the people prices increase so it's not good for the economy that's why we are going to now go and see why did all this thing happen and how do we control it right this is story of india what is story of india between 21 inflation all went very down in pandemic time then it started increasing then they are saying it stayed for some time uh then it's slumped started increasing mainly because of the war and other conditions monsoon was also into difficulty stayed in one particular place mainly because uh monsoon was becoming better off and government came and intervened for the controlling of this inflation slumped because commodity supply became better off and uh slowly oil prices are also coming under control when you make use of this word oil know be very very careful throughout this chapter the moment i tell the oil you all will be thinking about petrol and fuel but i'll be actually talking about edible oil because the chapter mostly talks about edible oil uh petrol diesel and they're mostly focusing only upon edible oil so when i say oil put both the categories into your head some chapters some slides with this and some with the edible so now this is about our cpi right so they are saying that cpi had increased mainly because of food inflation and fuel and light inflation and clothing inflation they're all the major items basically uh which has resulted in this they have given the picture also between rural and urban but all the sensitive items fluctuated mainly your food items fluctuated you know the meaning of the core inflation core inflation is from the total headline inflation you have to minus out all the sensitive items like the food fuel and all and finally what is left behind will be the core inflation when you call the retail inflation first thing you should come into your mind is it will be like a family's budget it will also include services it will have a higher weightage towards food these are all the issues with the cpi this is wpi when you say wpi wpi gives a slightly lesser weightage to the food articles 20 22 percentage but more weightage to the manufacturing sector which is 62 percentage weightage to the manufacturing sector core inflation means much more meaning in wpi than giving the meaning in the cpi fine have you understood the differences there are oil and fuel in wpi there are oil and fuel in cpi cpi will tell you what it says in wpa what it says in cpi there is no edible oil oil oil and fuel edible oil leave it it will go into the food items firewood cow dung LPG carousel these are cpi oil and fuel what is there in the oil and fuel in wpi petrol diesel petrol diesel then it is not in cpi is it there in cpi or not petrol and diesel it is there in the form of transportation services not in the form of oil and fuel we heard all the differences wpi cpi weightage difference services in cpi no services in wpi oil and fuel different components in cpi petrol and diesel in wpi internationally oil prices fluctuating wpi will be hit first two months later lag the effect cpi will be hit next impact of kerosene LPG this firewood cow dung cake these things will not be seen in wpa we are not connected all differences clear with this we get into the table food inflation was higher and that's one of the reasons why your cpi was actually increased but core inflation was under control when we say food inflation what in food inflation actually went bad we are getting into the details of it we can see the food in the beaver ages you have to look at the purple color bar in all these things you can see food and beaver ages clothing fuel and light these are all the things which were actually higher in the retail inflation when compared to the previous periods which are being shown by the green thing you can see a diamond on the top of it which is what is actually showing the weight of these commodities in the calculation of the cpi which is the retail inflation the other major groups they are saying whenever you read a graph always look at the y axis so you can see that clothing and footwear was also almost closer to the double digit fuel and light it kept between this 10 percentage and eight percentage miscellaneous we don't have to see household goods and services services was also climbing up but it did not reach that double digit level it was slightly lesser than the other categories inside the food inflation food and beaver ages was on the top so what is actually causing so much high prices cereals and cereals and products milk vegetables meat and fish so these are the first four things earlier and all we used to call the uh pulses causing inflation because we used to import a lot of pulses sugar causing inflation because we also import sugar right but these days in the last year we can see that the retail inflation was dominated mainly by the cereals milk vegetables in the vegetable what is the vegetable which always troubles us tomato onion potato so you should always remember the top vegetables three top vegetables which cause inflation here also you can see that in the period of september and all the vegetables prices increased mainly because of your potato what was boy tomatoes all the red color is the tomato one they chosen the color purposefully so we can see that it is actually slumping only in the recent past in between this august and september in this peak it was tomato which was spoiling the show and they are saying it's all because of the unseasonal heavy rains and the many of the southern states now they want to call this edible oil as the imported inflation we used to call this word this imported inflation for the crude oil but they are making use of this word now for the edible oil right and mainly because edible oil all mostly 60% is we are importing it right and internationally we can see that the sunflower oil is the major one which we import all came from Russia and Ukraine and mainly they both were fighting and they didn't supply edible oil so we were all into trouble so the prices are totally at the mercy of the international prices we can see that import of edible oil actually got into trouble as a result of which we had prices increasing slowly now there is some moderation of the edible oil of course in the recent November December period whenever there is a problem with the exports and the imports their custom duty will be altered if the international prices are increasing customs duties will be waived off or it will be reduced exports will be contained they'll say that you're not supposed to export anything which is actually essential here they'll they'll also put a limit on the stock what you can hold essential commodities act will come into picture we should not hold the things and then artificially again increase the prices there will be lots of restrictions which will be given by the government so after doing all those measures now they are saying that the oil prices are coming under control this picture is actually giving you the difference between the rural and the urban inflation you have to convince your mind and then believe the fact what I'm going to tell you rural inflation was higher because of food inflation urban inflation was higher because of fuel inflation the second part you will agree but the first part you have to convince yourself that's how the survey has presented itself they are saying rural and urban divide was very high but now the divide is actually narrowing down but still there's a difference between the rural and urban mainly because the food inflation in rural areas is actually still higher fuel inflation in urban area is still higher then you are going to ask back why this rural area food inflation how do I think this fact the fact is because they put a higher weightage on the food items in the cpi rural and compared to cpi urban so because of the weightage problem this factor is coming out as food inflation being higher in the rural areas so that's how they are showing this red color thing even in the food inflation you can see that the red color thing is actually the urban lesser whereas the dotted like neural is more than the red line right then they are presenting this inflation across the states they are giving this Telangana Andhra Pradesh, West Bengal, Maharashtra, Madhya Pradesh and all having higher levels of inflation the center part of the country you can say that having higher level and here also they are trying to say that food the clothing fuel these are the reasons why the inflation was higher and if you look at the rural it was mostly the food related inflation which was on the higher side right so similar pattern in terms of food inflation dominating the entire country now coming to the wholesale price index all these time we were talking about the retail price index which was the cpi now looking at the wholesale price index where you can see the agriculture or the food articles only up to 22 percentage fuel and oil up to 13 percentage manufacture products up to 64 percentage as the weightage please memorize the weightage for the examination sake it's okay if you don't memorize cpi but you need to know that the way food is weighted more there than compared to here but memorize this 20 percent 14 percent and 64 percent several years they have asked about the weightage of this right and here also you will talk about the core inflation where you will be minusing the sensitive items like the food and the fuel out of the total headline inflation to arrive at the core inflation so core inflation remained sticky but still here also the food and the fuel kept fluctuating fuel fluctuation is again because of the international oil prices fluctuating sometime there was supply disruption wantedly countries did not offer the quantity we remember we were discussing about the excise duties changes depending upon the prices of the oil so based upon that also we had difficulties in the inflation happening here through the wpa when the supply actually started improving again you started getting a better number for the wpa but these kind of reflections on the oil and fuel will happen in the cpi with a lagged effect it won't show it up immediately in cpi it will happen after two to three months so here they are saying now slowly the food and the core inflation everything is becoming coming under control mainly because there is a as I told you the import duties export related duties they all will be moderated as and when there is a supply chain disruption so based upon that global commodity prices have now come under control therefore we are seeing that headline inflation food inflation core inflation everything coming under control according to the wpa so we have three segments right primary articles fuel and power manufactured products you look at the purple colored bar you can actually see that more than the primary articles fuel and power actually had a lesser weightage this was 20 percentage this was only 14 percentage but still fluctuations are higher in the fuel and power when compared to the primary articles so the main driver if you look at in this manufactured products actually it is declining it is the core inflation which is remaining almost in the expected direction but this is because of the international oil prices keeping on changing and here the food is also increasing but though here the weight is more with a lesser weight oil and fuel is what is actually damaging the entire scenario of the wpa as such and also your edible oil edible oil will come under the primary articles under the food products moderation in crude oil prices is what we said after june slowly it started declining which is why we also started having better supply as well as monetary changes also had an impact you remember we were saying that when the depreciation of the currency happens imports become costlier exports become better off and all so when oil imports are also happening when the imports are again becoming costlier then government has to come forward to cut down the excise duties and all in a larger way in order to rationalize the prices and supply it to us so lots of efforts have gone in to moderate the crude oil prices this is the diagram which they are saying there is a convergence of wpa and cpi i have given you lots of differences between the wpa and cpi in spite of that how this which is on the top wpa or the cpa what is this red light wpa right so those cpi has so many items to talk about wpa is on the top mainly because of that oil and fuel only it will be on the top and now that that crude oil prices have also come under control global supply chain destruction has also been set slowly it is cooling and then it is coming down and you are seeing a small increase in terms of this cpi now dominating the wpa in the end for that they are giving the reason that the services are picking up the demand for the services and therefore the prices of the services picking up and it is resulting in the increase right this is about the expectations the inflationary expectations this is a huge area for economics optional student how will be the inflationary expectation based upon that we do so many things in the business as well as many things so when prices are controlled business go on well so what is the expectation one year ahead household as well as business both of them they are giving that they presume that the prices will be under control why household should be suddenly taken into account because you would have studied in the circular flow of income is it not who determines the price the producers the consumers price giver price takers right so therefore both of their expectations should match so that the economy will be going on in a smoother way so we can see from the graph both of them think that the inflation will come under control and therefore things will become better off right housing price index is other thing which is given by you have to read this source this will be the question which is which has been asked in the preliminary examination earlier are you seeing the word NHB which is a wholly owned subsidiary of RBI national housing bank you should also remember the indicator receipt decks which is going to talk about the real estate and the housing prices across different states and different cities and based upon which they are going to give the prediction how much will be the how will be the prices whether everything will be sold off in terms of volume quantity and the prices everything they will judge it so they are saying that slowly the prices are picking up in all the major cities this is also showing that the real estate is bouncing back which is a good sign of recovery of the economy so this source is the most important thing for you to remember in this graph monetary policy statements this is what you have been seeing in the colorful diagram where everything climbed up how many times did it climb up within the days they have given it with the days you can see that it has moved from 4 percentage to 6.2 to 5 percentage and this is what we call as a monetary tightening right so monetary policy committee has revised to so many times in order to control this inflation i told you survey has gone ahead with the comparison between 1970s and the current period inflation because we are saying that after so many years we are facing this kind of a high double-digit inflation and all so 1970s also we had similar oil problem but we did not have much backup at that point of time only the oil was a major problem but now we can't say that oil is the only problem we had we are part of a lot of global chain and there are lots of commodities which we are importing other than the oil so our nature of inflation is very very different when compared to the 1970s and one more major thing which you have to remember is before 1970 the inflation kept on hiking and it reached a peak in that period and government had to do lots of measures to control it whereas now the government is facing a different scenario we were completely under control and suddenly it spiked up both again you can say it oil is the reason it could be the edible oil it could be the crude oil whatever it is but our precedence of the period is different we were much under control and suddenly spiking whereas there it the problem was aggravating and it reached a peak that's the other major difference which the survey is talking about and one another major organizational change what was happened was the Bretton Woods agreement also got cancelled or it was collapsing at that time in 1970s which is why we were talking about the backing up of the currency a few minutes ago we said currency should be backed up by gold and by the foreign exchange reserves now we are saying it as a minimum reserve system but then it was backed up only by gold according to the Bretton Woods system so if you have like 10 kgs of gold to that extent only you will be able to print the currency then who would have printed most to currency US all time one answer only US it's not about the gold under the soil by which you can answer Africa I wouldn't mind but it's about the gold in hand so it's not about the mines or the resources what you have it's about the resources what you hold so US was the boss US is the boss we don't know whether it will be the boss we have to wait and see right so that's about the comparison between 70s and now and these are the other efforts because we had been saying from the beginning of the chapter that food inflation was a major trouble so what were the efforts taken by the government the controller we can say that lots of excise duties were reduced waiver of customs duties on cotton customs duty on chemical products and gems were also reduced essential commodities act I told you we should not hold beyond a certain level you should not hold the stocks and all and imposing stock limits buffer stock of pulses they were scared that this may also get into inflation and regulating maximum retail price on edible oils this was very much needed because 60 percentage of the edible oil we are importing so with this we are finishing this chapter also so we will be we are done for today's target we will be starting with the sectoral perspectives first I will finish external sector though the chapter is placed at 10th chapter in the economics survey I want to finish external sector because with that the core economics part will be done then we will go into agriculture industry services that sectoral perspective after we finish external sector why then we will be done with the survey in one another class thank you everyone good day