Reserve Bank of India(RBI)

RBI is an apex institution of our country.The RBI started working since,1st April ,1935 in accordance with the provision of the Reserve Bank of India Act ,1934.Governor is the highest authority of RBI.He is appointed by the Government of India for a term of 5 years.He can re-appointed for another term.At present Dr.D.Subba Rao is the Governor of RBI.


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Inflation

Question: What is Inflation?

Answer: Inflation is when the prices of most goods and services continue to creep upward. It is measured by the Consumer Price Index [CPI]. .

Inflation can affect different parts of the economy at different times. For example, oil prices move up and down rapidly, because they are driven by the bids on the price of oil futures contracts. As a result, gas prices are also very volatile. This can drive up the price of food, which is usually transported long distances. For this reason, the price of food and energy is left out of the core inflatio rate. This is used by the Federal Reserve as a better indicator of true inflation.


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Budget

The term budget is derived from French word Bougett which means a sack or pouch.It was a leather bag from which the Britsh Chancellor of Exchequer extracted his papers to present to the Parliament the governments financial plan for the ensuing fiscal year.The budget is a statement of the estimated receipts and expenditure of the government in respect to a financial year.
The following points highlight the functions of budget.
1.It ensures the financial and legal accountability of the executive to the legislature.
2.It is an instrument of social and economic policy to serve the function of allocation,distribution and stabilisation.
3.It facilitates the efficient execution of the functions and services of the government.
4.It facilitates administrative management and coordination as it unifies the various activities of the government departments into a single plan.
5.It ensures the accountability of subordinates to superiors in administrative hierarchy.
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Indian Economy

Why do we call Indian economy a developing economy?
India possesses vast amount of unutilized and under-utilized natural resources and substantial surplus manpower as well. But there is a shortage of capital and lack of modern technology so essential for the development of the economy on modern lines.

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