Introduction:
Economics is a vital subject in almost every competitive exam, from UPSC to SSC and State PSCs. To master economics, understanding key concepts and terms is essential. Here’s a carefully curated glossary of Indian Economy terms commonly seen in textbooks like NCERTs and Ramesh Singh, as well as in exam papers.
📘 Frequently Used Terms in Indian Economy
These terms frequently appear while reading standard economics books, daily newspapers like The Hindu, Indian Express, and Business Standard, and exam materials:
A-C
- Balance of Payments (BoP) – Record of all economic transactions between a country and the rest of the world.
- Budget – Annual financial statement showing expected revenue and expenditure.
- Capital Account – Part of the BoP that records capital transactions like FDI.
- Consumer Price Index (CPI) – Measures inflation based on the retail prices paid by consumers.
- Credit Rating – An assessment of the creditworthiness of a borrower by rating agencies.
D-G
- Deficit Financing – When government spending exceeds its revenue, and the gap is financed by borrowing or printing money.
- Depreciation – Decline in value of an asset over time or decline of currency value in foreign exchange.
- Disinvestment – Selling of the government stake in public sector enterprises.
- Fiscal Deficit – When the government’s total expenditure exceeds its total revenue, excluding borrowings.
- Gross Domestic Product (GDP) – The Total value of goods and services produced within a country in a year.
I-M
- Inflation – Rise in the general price level of goods and services over a period.
- Liberalisation – Reducing government restrictions to encourage private enterprise.
- Monetary Policy – Central bank’s policy to control money supply and interest rates.
- Minimum Support Price (MSP) – Price at which the government buys crops from farmers to ensure they are not underpaid.
N-R
- National Income – Total income earned by a country’s people and businesses.
- Non-Performing Assets (NPAs) – Loans on which borrowers are not making interest payments or repaying any principal.
- Public Distribution System (PDS) – System to distribute essential commodities at subsidized prices.
- Repo Rate – The Rate at which the RBI lends money to commercial banks.
S-Z
- Subsidy – Financial support given by the government to reduce costs for producers or consumers.
- Supply and Demand – A Fundamental economic concept determining the price of goods in the market.
- Tax-to-GDP Ratio – An Indicator of tax revenue compared to GDP.
- Value Added Tax (VAT) – Tax on the value added at each stage of production or distribution.
- Wholesale Price Index (WPI) – Measures inflation at the wholesale level.
📰 Daily Economic & Business Terms from Newspapers
- Blue Economy: Sustainable use of ocean resources for economic growth.
- Stagflation: A situation with stagnant economic growth and high inflation.
- Bond Yield: The return investors get from government or corporate bonds, often seen in financial news.
- Unicorn: A privately held startup valued at over $1 billion.
- IPO (Initial Public Offering): The process by which a private company becomes publicly traded by offering shares.
- Current Account Deficit (CAD): When a country imports more goods, services, and capital than it exports.
- Fintech: Technology used to improve financial services, like digital wallets or online banking platforms.
- Gig Economy: Labor market characterized by short-term contracts or freelance work.
📚 Glossary of Economic Terms – Exam-Oriented Definitions
- Blue Chip Companies: Large, reputable companies with consistent performance.
- Cash Reserve Ratio (CRR): Percentage of deposits banks must keep with the RBI.
- Economic Survey: Annual document by the Ministry of Finance reviewing the economy’s performance.
- Financial Inclusion: Providing financial services to the weaker sections of society.
- GDP Deflator: A Measure of inflation that reflects the change in prices of all goods and services included in GDP.
- Green Revolution: Agricultural reform that increased production through the use of modern technology.
- Human Development Index (HDI): Composite index measuring life expectancy, education, and per capita income.
- Inflation Targeting: The Central bank’s strategy to control inflation within a specific range.
- Jan Dhan Yojana: A Financial inclusion scheme aimed at providing bank accounts to all households.
Conclusion
Mastering economics terminology will help you decode questions in both Prelims and Mains effectively. Use this glossary to revise quickly and accurately before exams, and don’t forget to share it with fellow aspirants.
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