National Income & Growth
GDP (Gross Domestic Product)
Value of all final goods and services produced within a country in a year.
GNP (Gross National Product)
GDP plus net factor income earned from abroad.
NDP (Net Domestic Product)
GDP minus depreciation.
NNP (Net National Product)
GNP minus depreciation.
National Income
NNP at factor cost.
Per Capita Income
National income divided by total population.
Depreciation
Annual wear and tear of capital assets.
NFIA (Net Factor Income from Abroad)
Income earned by residents abroad minus income earned by foreigners domestically.
Gross Value Added (GVA)
Value of output minus intermediate consumption.
Prices & Inflation
Inflation
Sustained rise in the general price level.
Deflation
Sustained fall in the general price level.
Disinflation
Reduction in the rate of inflation.
Headline Inflation
Inflation measured by CPI (includes food and fuel).
Core Inflation
Inflation excluding volatile components like food and fuel.
CPI (Consumer Price Index)
Measures retail inflation faced by consumers.
WPI (Wholesale Price Index)
Measures price changes at the wholesale level.
Stagflation
High inflation combined with low growth and high unemployment.
Fiscal Policy & Govt Finance
Fiscal Policy
Government policy on taxation and public expenditure.
Revenue Receipt
Income of government excluding borrowings (e.g., Taxes, Dividends).
Capital Receipt
Receipts that create liabilities or reduce assets (e.g., Borrowings, Disinvestment).
Revenue Expenditure
Expenditure that does not create assets (e.g., Salaries, Subsidies).
Capital Expenditure
Expenditure that creates assets (e.g., Infrastructure, Schools).
Fiscal Deficit
Total expenditure minus total receipts excluding borrowings.
Revenue Deficit
Revenue expenditure minus revenue receipts.
Primary Deficit
Fiscal deficit minus interest payments.
Monetary Policy
Monetary Policy
RBI policy to control money supply, interest rates, and credit availability.
Repo Rate
Rate at which RBI lends short-term funds to banks.
Reverse Repo Rate
Rate at which RBI borrows short-term funds from banks.
CRR (Cash Reserve Ratio)
Portion of deposits that banks must keep with RBI in cash.
SLR (Statutory Liquidity Ratio)
Portion of deposits banks must keep in liquid assets (Gold, Cash, G-Secs).
Money Supply
Total stock of money in circulation in the economy at a point of time.
Liquidity
Ease with which an asset can be converted into cash.
Banking & Financial System
Commercial Bank
Bank that accepts deposits and provides loans to the public.
Central Bank
The apex institution (RBI) regulating the banking and monetary system.
NBFC (Non-Banking Financial Company)
Financial institution that provides banking services but does not hold a banking license.
NPA (Non-Performing Asset)
A loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
Priority Sector Lending (PSL)
Mandatory lending by banks to key sectors like agriculture, MSMEs, and housing.
Financial Inclusion
Ensuring access to financial services for vulnerable groups at an affordable cost.
External Sector & Trade
Balance of Trade (BoT)
Difference between the value of exports and imports of goods.
Balance of Payments (BoP)
Record of all economic transactions between residents of a country and the rest of the world.
Current Account Deficit (CAD)
Excess of imports of goods, services, and transfers over exports.
Foreign Exchange Reserves
Foreign currency assets (Gold, SDRs, Foreign Currency) held by the Central Bank.
FDI (Foreign Direct Investment)
Long-term foreign investment in productive assets/businesses.
FPI (Foreign Portfolio Investment)
Short-term foreign investment in financial markets (Stocks, Bonds).
Exchange Rate
Price of one currency in terms of another currency.
Development & Poverty
Economic Growth
Increase in the production of economic goods and services (Real GDP).
Economic Development
Economic growth accompanied by improvement in the standard of living (Health, Education).
Poverty Line
Minimum income level required to meet basic necessities of life.
Unemployment
Situation where individuals who are willing and able to work cannot find a job.
Demographic Dividend
Economic growth potential resulting from a shift in a population’s age structure (more working-age people).
HDI (Human Development Index)
Composite statistic of life expectancy, education, and per capita income indicators.
Miscellaneous
Liberalization
Reduction of government restrictions and regulations in the economy.
Privatization
Transfer of ownership, property, or business from the government to the private sector.
Globalization
Integration of national economies through cross-border trade and investment.
Subsidy
Financial assistance paid by the government to keep prices low or support businesses.
Disinvestment
Sale of government stake in Public Sector Undertakings (PSUs).
Circular Economy
Economic system aimed at eliminating waste and the continual use of resources.