UPSC Economy GS 3


Channel's geo and language: India, English
Category: Economics


This channel is created with an aim to provide UPSC specific notes for both prelims and Mains.
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📍PERSONAL INCOME

🔸It is the sum of all the income received by the people of the country in one year.

Personal Income = National Income + Transfer payments – Undisclosed profits of corporate + Payment for social security provisions

🔸Transfer Payments are the payments that are not against any productive work. (Example- Old Age Pension, Unemployment compensation etc.)

🔸Social Security Provisions- Payment made by employees towards PF, Insurance etc.


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📍GROSS NATIONAL PRODUCT

🔸GNP is defined as the total value of the final goods and services produced by Indians in India as well as abroad during a particular period.

🔸GNP includes the value of goods produced by resident and non-resident citizens of a country whereas the income of foreigners who reside in India is excluded.


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📍GROSS DOMESTIC PRODUCT

🔸GDP is the total value of all final goods and services produced within the geographical boundary of the country during a particular period (Generally one year).

🔸In this, we consider all goods/ services, produced by both resident citizens and foreign nationals who reside within the boundary of that country.


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📍NATIONAL INCOME

🔸National Income is usually defined as the total Value of all final goods and services produced in a country in a particular period (Generally one year).

🔸Following are the measures of National Income-

(A) GDP (Gross Domestic Product)

(B) GNP (Gross National Product)

(C) NNP (Net National Product)

(D) PI (Personal Income)

(E) DPI (Disposable Personal Income)


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📍OPTIMUM UTILISATION OF THE AVAILABLE RESOURCES

Here we see two catch concepts.

🔸First, is the way of utilising the resources. Till the idea of sustainability emerged ( 1987 ) experts tried to maximise the resource exploitation.

🔸Second is the idea of the natural resources which are available. Resources (i.e., natural as well as human) could be of indigenous origin or exogenous. Most of the countries
doing planning tried to utilise their
indigenous resources, yet some tried to tap the exogenous resources too, taking leverage of their diplomatic acumen.

🔸By the 1950s, planning had emerged as a method or tool of utilising resources to achieve any kind of goals for policymakers, around the world.


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📍PLANNING MUST HAVE WELL DEFINED GOALS

After the Second World War, several countries went for development planning. As these nations had enormous socio- economic hurdles, they first set some goals and objectives and then started their process of realising them viaplanning.

● Important Points :

💡In due course of time, there emerged a consensus that planning must have some goals and those goals should be well- defned (not vaguely defned)—so that the government’s discretionary intervention in the economicorganisation could be democratically transparent and justifed.

💡Even in the non-democratic nations (i.e., erstwhile USSR, Poland, China, etc.) the goals of planning were clearly defned


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📍ECONOMIC PLANNING

"The making of major economic decisions—what and how much is to be produced and to whom it is to be allocated by the conscious decision of a determinate authority, on the basis of a comprehensive survey of the economic system as a whole.”

● Important Points:

💡By the late 1930s, there was an almost political consensus that independent India will be a planned economy.

💡As India commenced economic planning by the early 1950s, the planning commission of India also went on to define planning. According to the Planning Commission,


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📍ECONOMIC PLANNING

"The making of major economic decisions—what and how much is to be produced and to whom it is to be allocated by the conscious decision of a determinate authority, on the basis of a comprehensive survey of the economic system as a whole.”

● Important Points:

💡By the late 1930s, there was an almost political consensus that independent India will be a planned economy.

💡As India commenced economic planning by the early 1950s, the planning commission of India also went on to define planning. According to the Planning Commission,

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