Topics
National Income and Related Aggregates
- Macroeconomics Vs Microeconomics
- Representative Goods and Sectors
- Macroeconomic Agents and Government Role
- Emergence of Macroeconomics
- Context of the Present Book of Macroeconomics
- Meaning of Economic Wealth and Final Goods
- Stocks, Flows, and Depreciation
- Capital Formation, Trade-off & Circular Flow of Income
- Circular Flow of Income and Methods of Calculating National Income
- Output Method/Product Method
- Expenditure Method
- Income Method
- Factor Cost, Basic Prices and Market Prices
- Some Macroeconomic Identities
- National Disposable Income
- Private Income
- National Income Aggregates
- Real GDP and Nominal GDP
- GDP and Welfare
Introductory Macroeconomics
Introduction
- A Simple Economy
- Central Problems of an Economy
- Concepts of Production Possibility Frontier
- Organisation of Economic Activities
- Positive and Normative Economics
- Macroeconomics Vs Microeconomics
Development Experience (1947-90) and Economic Reforms since 1991
- India's Economy Before Independence
- Low Level of Economic Development Under the Colonial Rule
- Agricultural Sector in India
- Industrial Sector
- Foreign Trade of India
- Demographic Condition
- Occupational Structure
- Infrastructure
- Post-Independence Economic Systems and Planning
- Five Year Plans (FYP)
- Agriculture
- Industry and Trade
- Trade Policy: Import Substitution
- The 1991 Economic Crisis and Reforms
- Background of the New Economic Policy
- Liberalisation
- Privatisation
- Globalisation
- World Trade Organisation (WTO)
- Impact of the Economic Reforms
Money and Banking
- Concept of Money
- Functions of Money
- Demand for Money and Supply of Money
- Money Creation by Banking System
- Limits to Credit Creation and Money Multiplier
- Policy Tools To Control Money Supply
- Demand and Supply for Money : A Detailed Discussion
- The Transaction Motive
- The Speculative Motive
- Various Measures of Supply of Money
- Narrow and Broad Money
- Demonetisation
Theory of Consumer Behaviour
- Consumer Behaviour: The Problem of Choice
- Basic Concepts of Microeconomics > Utility
- Cardinal Approach (Utility Analysis)
- Derivation of Demand Curve in the Case of a Single Commodity
- Ordinal Utility Analysis/Indifference Curve Analysis
Indian Economic Development
Current Challenges Facing Indian Economy
- Concept of Human Capital
- Sources of Human Capital
- Human Capital and Economic Growth
- Human Capital and Human Development
- State of Human Capital Formation in India
- Growth of Education Sector in India
- Challenges and Future Prospects in Education
- Rural Development in India
- Credit and Marketing in Rural Areas
- Agricultural Market System
- Diversification into Productive Activities
- Sustainable Development and Organic Farming
- The Nature and Importance of Work in Society
- Workers and Employment
- Participation of People in Employment
- Self-employed and Hired Workers
- Employment in Firms, Factories and Offices
- Growth and Changing Structure of Employment
- Informalisation of Indian Workforce
- Concept of Unemployment
- Government and Employment Generation
- Environment and Sustainable Development in India
- State of India’s Environment
- Concept of Sustainable Development
- Strategies for Sustainable Development
Development Experience of India – a Comparison with Neighbours
Determination of Income and Employment
- Aggregate Demand and Its Components
- Consumption
- Investment
- Determination of Income in Two-sector Model
- Determination of Equilibrium Income in the Short Run
- Macroeconomic Equilibrium with Price Level Fixed
- Effect of an Autonomous Change in Aggregate Demand on Income and Output
- The Multiplier Mechanism
- Paradox of Thrift
- Equilibrium Output and Employment
Introductory Microeconomics
Production and Costs
- Production Function
- Concept of Production
- Some Basic Concepts - Total, Average and Marginal Physical Products
- Relation Between Total, Average and Marginal Product
- Law of Variable Proportions
- Average and Marginal Physical Products
- Changes in Production
- Fixed Cost and Variable Cost
- Behaviour of Cost in the Short - Run
- Relationship Between Average Variable Cost and Average Total Cost and Marginal Cost
- Opportunity Cost
- Revenue Concepts
- Producer's Equilibrium
- Law of Supply
- Supply Schedule
- Distinction Between Supply and Stock
- Determinants of Supply
- Movement Along the Supply Curve Or Expansion and Contraction of Supply
- Measurement of Elasticity of Supply > Percentage Method
- Methods of Measurement of National Income
- Marginal Cost (MC)
- The Law of Diminishing Marginal Product
- Shapes of Product Curves
- Costs in Long Run Period
- Returns to Scale
Government Budget and the Economy
The Theory of the Firm Under Perfect Competition
- Concept of Market
- Market Equilibrium
- Determination of Market Equilibrium
- Effects of Changes (Shifts) in Demand on Equilibrium Price and Equilibrium Quantity
- Perfect Competition
- Imperfect Competition
- Factors Determining Market Forms
- Oligopoly
- Market Forms - Perfect Oligopoly
- Market Forms - Imperfect Oligopoly
- Equilibrium Price
- Applications of Tools of Demand and Supply Price Control
- Price Ceiling
- Price Floor
- Revenue Concepts
- Profit Maximisation Objective
- Determinants of a Firm’s Supply Curve
- Supply Schedule
- Price Elasticity of Supply
Balance of Payments
- Open Economy and Its Linkages
- Concept of Balance of Payments
- Current Account
- Capital Account
- Balance of Payments Surplus and Deficit
- Foreign Exchange Market
- Foreign Exchange Rate
- Determination of the Exchange Rate
- Merits and Demerits of Flexible and Fixed Exchange Rate Systems
- Managed Floating Exchange Rate System
Market Equilibrium
- Simple Monopoly in the Commodity Market
- Other Non - Perfectly Competitive Markets
Estimated time: 20 minutes
CBSE: Class 12
Meaning of Informal Sector
Formal sector includes:
- All public sector establishments.
- Private sector establishments with 10 or more hired workers.
Informal sector includes:
- Small enterprises (fewer than 10 hired workers).
- Most farmers and agricultural labourers.
- Owners of small enterprises and people working in those enterprises.
- Self-employed persons without hired workers.
- Non-farm casual wage labourers (e.g., construction workers, head-load workers).
CBSE: Class 12
Social Security Benefits
| Feature | Formal Sector | Informal Sector |
|---|---|---|
| Maternity Benefit | Available | Not available |
| Provident Fund (PF) | Available | Not available |
| Gratuity | Available | Not available |
| Pension | Available | Not available |
CBSE: Class 12
Statistical Data (2011–12)
- Total workers in India: ~473 million
- Formal sector workers: ~30 million (≈6%)
- Informal sector workers: ~94% of total workforce
- About 20% of formal sector workers were women.
- About 30% of informal sector workers were women.
CBSE: Class 12
Informalisation is a Concern
- Development planning aimed to shift workers from agriculture to higher-quality industrial jobs.
- However, more than half of India's workforce still depends on farming.
- Formal sector employment has not been growing sufficiently.
- Most workers remain in the informal sector and lack social security, making them economically vulnerable.
CBSE: Class 12
Policy Response
- Since the late 1970s, India and other developing countries shifted focus towards enterprises and workers in the informal sector.
- Efforts influenced by the International Labour Organisation (ILO).
- Policy goals:
- Modernisation of informal sector enterprises.
- Extension of social security measures to informal sector workers.
CBSE: Class 12
Case Study: Ahmedabad Textile Mills
Event:
- Textile mills in Ahmedabad began closing in the early 1980s.
Impact:
- Approximately 80,000 permanent workers and over 50,000 non-permanent workers lost their jobs.
- Workers were pushed into the informal sector and poverty.
Consequences:
- Economic recession.
- Communal riots.
- Alcoholism and suicides.
- Children withdrawn from school and sent to work.
CBSE: Class 12
Activity: Identify Informal Sector Workers
| Worker | Sector |
|---|---|
| Hotel worker (hotel with 7 hired workers and 3 family workers) | Informal |
| Private school teacher (school with 25 teachers) | Formal |
| Police constable | Formal |
| Nurse in a government hospital | Formal |
| Cycle-rickshaw puller | Informal |
| Owner of a textile shop employing 9 workers | Informal |
| Driver of a bus company with more than 10 buses and 20 workers | Formal |
| Civil engineer working in a construction company with 10 workers | Formal |
| Computer operator in a state government office (temporary basis) | Formal |
| Clerk in the electricity office | Formal |
CBSE: Class 12
Key Points: Informalisation of Indian Workforce
- The formal sector covers all public sector establishments and private firms with 10 or more hired workers; all other enterprises and workers belong to the informal sector.
- Informal workers generally lack social security benefits like Provident Fund, gratuity, pension, and maternity benefit.
- In 2011–12, about 94% of India's 473 million workers were employed in the informal sector, while only about 6% were in the formal sector.
- Despite development planning, more than half of India's workforce continues to depend on agriculture.
- The Ahmedabad textile mill closures in the 1980s are a key example of informalisation pushing workers into poverty and social distress.
- Since the late 1970s, ILO-influenced policies have focused on modernising the informal sector and extending social security to informal workers.
