Bank rate

It’s the rate charged by the central bank for lending funds to commercial banks.

Balance of Trade

 It’s the difference between the monetary value of a nation’s exports and imports over a certain time period. It is usually expressed in the unit of currency of a particular country.

Black Market

The buying and selling of goods or foreign money in an illegal way.

Black economy

It’s a section of a country’s economic activity that is derived from sources that don’t follow the country’s rules and regulations regarding commerce and trade. The activities are mostly illegal in nature.

Brown economy

It’s an economy that depends on the economic growth of the petrochemicals such as coal, petroleum and natural gas, which in production, great amounts of carbon dioxide and soot are released into the atmosphere. The economic development depends on restricted resources, the environmental pollution is severe.

Blue Economy

Blue economy is a term in economics related to the exploitation, preservation and regeneration of the marine environment. Its scope of interpretation varies among organizations. According to the World Bank, the blue economy is the “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem.

Capital

It’s typically refers to cash or liquid assets being held or obtained for expenditures.

Cost

In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost.

Consumer Sovereignty

Consumer sovereignty is the economic concept that the consumer has some controlling power over goods that are produced, and the idea that the consumer is the best judge of their own welfare.

Demand  

Demand is an economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service. 

Economics

It’s the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively.

Elasticity of Demand

It’s the responsiveness of the quantity demanded of a commodity to changes in one of the variables on which demand depends. In other words, it is the percentage change in quantity demanded divided by the percentage in one of the variables on which demand depends.

Equilibrium

In economics equilibrium is a condition or state in which economic forces are balanced. In effect, economic variables remain unchanged from their equilibrium values in the absence of external influences.

Economic Benefit

Economic benefits are defined as tangible benefits that can be measured in terms of revenue generated or money saved through the implementation of policies. An economic benefit is a benefit that we can quantify in monetary terms. Profits, net cash flow, net income, or revenue, for example, are economic benefits.

Fiscal policy

Itrefers to a government’s spending and how it affects the economy, particularly if spending levels change. Fiscal policy also refers to the tax policies of a government to influence economic conditions. It drives the policy actions of the Government. Budget, tax, subsidies, expenditure etc. form part of the fiscal policy.

GDP

Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services.  

Golden Economy

The term describes an ideal state for an economic system. In this perfect state, there is full employment, economic stability, and stable growth. It is also called sunshine economy. Emphasis is laid on energy sector. Sunshine Economy depend on non-fossil energy such as wind energy, solar energy, water, biomass energy, geothermal energy, marine energy etc. as basic energy supply to encourage distribution of facilities, to improve the energy structure.

Government spending

It refers to money spent by the public sector on the acquisition of goods and provision of services such as education, healthcare, social protection; the important areas being social welfare and defence.

Grey Market

It’s an unofficial market in goods that have not been obtained from an official supplier.

Grey Economy

The informal economy is also known to be the grey economy. This is an economy that is a diversified set of economic activities, enterprises, jobs, and workers that are not regulated or protected by the state. The grey economy helps to establish self-employment in small, unregistered enterprises. It has been expanded to include wage employment in unprotected jobs.

Green Economy

It’s a three-dimensional focus in sustaining and advancing economic, environmental and social wellbeing, to increase GDP and reduce poverty. A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus.

Incentives

In economics, incentives are what encourage an individual to act in a certain way. In other words, how consumers and businesses respond to market signals such as prices and financial benefits.

Inflation

Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.

Law of demand

It states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded.

Market

It’s a place where the exchange of goods and services takes place as a result of buyers and sellers being in contact with one another, either directly or through mediating agents or institutions.

Money

It’s a medium of exchange; it allows people to obtain what they need to live. Bartering was one way that people exchanged goods for other goods before money was created. Money has worth because for most people it represents something valuable. The units of measurement are dollars or another currency, with no time dimension.

Market capitalization

It’s the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by multiplying the current market price of the company’s share with the total outstanding shares of the company.

Marginal utility

It refers to the amount of satisfaction a consumer gets by consuming a good or service. Marginal utility can be used by economists to measure how much of a good or service a consumer would buy in a given period of time.

Macroeconomics

Macroeconomics is a branch of economics dealing with performance, structure, behaviour, and decision-making of an economy as a whole; for example using interest rates, taxes, and government spending to regulate an economy’s growth and stability. This includes regional, national, and global economies.

Microeconomics

It’s a branch of mainstream economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

Monopoly

It’s a market situation where there is a single seller in the market. In conventional economic analysis, the monopoly case is taken as the polar opposite of perfect competition. By definition, the demand curve facing the monopolist is the industry demand curve which is downward sloping.

Micro Economics

Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices.

Macro Economics

Macroeconomics focuses on the performance of economies; changes in economic output, inflation, interest and foreign exchange rates, and the balance of payments. 

Opportunity cost

What a business firm misses out on when selecting one option over another. It’s a way to quantify the benefits and risks of each option, leading to more profitable decision-making overall.

Oligopoly

An oligopoly is a market characterized by a small number of firms who realize they are interdependent in their pricing and output policies. The number of firms is small enough to give each firm some market power.

Optimization

It’s the process of making a trading system more effective by adjusting the variables used for technical analysis. A trading system can be optimized by reducing certain transaction costs or risks, or by targeting assets with greater expected returns.

Purple Economy

Purple Economy takes into account the ethnic, cultural, and sociological aspects of the place they operate in. Concepts such as racial equality, cultural transmission, and economic anthropology are the core tenets of this principle which draws from the ideas of both politics and capitalism. It is about looking beyond the economic value of cultural outputs to include the cultural dimension of any asset or service. Purple economy is part of a wider ethical approach.

Repo Rate

It’s the rate at which the Reserve Bank of India (RBI) lends money to commercial banks or financial institutions in India against government securities. Repo Rate in 2022 is 4.40%

Recession

In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending.

Red Economy

It’s related to the economy that is ruled by a government with style of communism.

Supply

 In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual. Supply can be in produced goods, labour time, raw materials, or any other scarce or valuable object.

Scarcity

The gap between limited resources and theoretically limitless wants.

Sovereign bond

It’s a debt security issued by a national government to raise money for financing government programs, paying down old debt, paying interest on current debt, and any other government spending needs. Sovereign bonds can be denominated in a foreign currency or the government’s domestic currency.

Silver Economy

Silver economy is the system and structure of production, distribution and consumption of goods and services aimed at using the purchasing potential of older and ageing people and satisfying their needs, wants and consumption for a well living and health needs. All strategies are driven to face new challenges related to an ageing population (geriatrics), especially regarding technology services for wellbeing and health monitoring such as robotic assistance, electrical mobility, or health sports, including health tourism and green care.

Time value of money

It’s the concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the short-term.

Unemployment

It’s a term referring to individuals who are employable and actively seeking a job but are unable to find a job. Included in this group are those people in the workforce who are working but do not have an appropriate job.

White economy

Focuses on Digital Economy and how it changed business and trading for start-ups and entrepreneurs via digital.

The concept of economic complexity in a country refers to the production of domestically-based knowledge products as well as the volume and diversification of export goods by a country. Economic complexity means the emphasis on technical knowledge and its application in goods and services produced by a country.  It also means the intense application of technical knowledge in product diversification to encompass it in the domestic consumer markets on one hand and foreign markets on the other. However, the economic complexity of countries’ production is not limited to the ability to apply knowledge to the production process rather it encompasses much broader dimensions. Therefore, the more varied the country’s export basket is, it is considered more refined and more powerful in terms of economic interfaces at the international level. More exports bring in more economically viability with it.

In today’s global economy, consumers are used to seeing products from every corner of the world in their local grocery stores and retail shops. These overseas products come with imports which provide more choices to consumers. And because they are usually manufactured more cheaply than any domestically-produced equivalent, imports help consumers manage their strained household budgets.

When a country’s imports is bigger than the exports in terms of volume and it distorts a nation’s balance of trade and devalues its currency. The devaluation of a country’s currency can have a huge impact on the everyday life of a country’s citizens because the value of a currency is one of the biggest determinants of a nation’s economic performance and its gross domestic product (GDP). Maintaining the appropriate balance of imports and exports is crucial for a country. The importing and exporting activity of a country can influence a country’s GDP, its exchange rate, and its level of inflation and interest rates.

The Atlas of Economic Complexity is a 2011 economics book by Ricardo Hausmann, Cesar A. Hidalgo, Sebastián Bustos, Michele Coscia, Sarah Chung, Juan Jimenez, Alexander Simoes and Muhammed A. Yıldırım.  The book attempts to measure the amount of productive knowledge that each country holds, by visualizing the differences between national economies. The book’s originality is to go beyond standard statistics by making use of “complexity statistics” of 128 countries. The book concludes that it is difficult and a complex task for a country’s government planners to kick-start new industries, entrepreneurship development, new products, intellectual property rights etc. The book is accompanied by two websites that host interactive visualizations and expand upon data featured in the book.

The visualizations presented in The Atlas were created in the observatory of Economic Complexity (OEC), a data visualizations engine created by Alex Simoes and Cesar A Hidalgo in the Macro Connections group at the MIT Media Lab. The Observatory of Economic Complexity was launched in 2011. In 2013, Harvard’s Centre for International Development released an autonomous version of the platform, entitled The Atlas of Economic Complexity. The Harvard version builds on the original code base developed by Alex Simoes at the MIT Media Lab and uses a different method for cleaning the data than the OEC. The Atlas is distributed under a creative commons license which makes it free for non-commercial use.

The Economic Complexity Index (ECI) is a holistic measure for calculating the productive capabilities of large economic systems, usually cities, regions, or countries. Higher economic complexity as compared to country’s income level drives economic development. Countries that are home to a great assortment of productive know-how, particularly complex specialized know-how, are able to produce a great diversity of sophisticated products.

Countries that are able to sustain a diverse range of productive know-how, including sophisticated, unique know-how, are found to be able to produce a wide diversity of goods, including complex products that few other countries can make.

A prediction of how much a country will grow based on its current level of Economic Complexity, its Complexity Outlook or connectedness to new complex products in the Product Space, as compared to its current income level in GDP per capita and expected natural resource exports. Economic complexity alone helps explain the lion’s share of variance in current income levels. But the value of economic complexity is in its predictive power on future growth, where a simple measure of current complexity and connectedness to new complex products, in relation to current income levels and expected natural resource exports, holds greater accuracy in predicting future growth than any other single economic indicator.

A rank in ECI of countries is based on how diversified and large their export basket is. Countries that are home to a great diversity of productive know-how, particularly complex specialized know-how, are able to produce a great diversity of sophisticated products.

Highly ranked countries in EC tend to have these attributes: a high diversity of exported products, sophisticated and unique exported products, in short, the ranking hinges on the concept of “productive knowledge” or the implied ability to produce a product. The top 10 export countries are China, United States, Germany, Japan, Netherlands, Hong Kong, South Korea, Italy, France and Belgium. Collectively, those leading exports-based economies represent over half (52.3%) of total exports by value from all countries.

India’s biggest export products by value in 2020 were refined petroleum oils, diamonds, pharmaceuticals, jewelry and cars. India main imports are: mineral fuels, oils and waxes and bituminous substances, pearls, precious and semi-precious stones and jewelry electrical machinery and equipment, nuclear reactors, boilers, machinery and mechanical appliances, and organic chemicals.

More exports mean more production, jobs and revenue. GDP increases when the total value of goods and services that domestic producers sell to foreign markets exceeds. If a country exports more than it imports, there is a high demand for its goods, and thus, for its currency. The economics of supply and demand dictate that when demand is high, prices rise and the currency appreciates in value.

The Economic Survey says that while the government is already doing the “heavy lifting”, its India’s private sector that needs to step up. The Indian government already has tax incentives for corporates contributing to R&D. The Chief Economic Advisor KV Subramanian said that the tax incentives in the past have been more liberal than other countries but it didn’t bring about a great participation from India’s private sector.

The Diwali just got over. And, our stance of boycotting Chinese goods was without really understanding facts and figures.

One of the obvious global fact is that trade between countries increases economic wellbeing. I think the growing uproar for a ban on Chinese goods needs to be tackled reasonably. The Chinese embassy recently cautioned India about it. Our trade data shows that our bargaining power is narrow: India needs China more than China needs India. China accounts for nearly 20% of India’s imports. Toys, kite strings and crackers may be the most visible imports for consumers, but they don’t even make the top 10 by category. The big numbers are assigned to industrial goods, such as electrical machinery, nuclear reactors and organic chemicals and iron & steel. Among the top ten categories, in eight categories by value, India imports more from China than any other nation, essentially covering out the demand for a blanket ban.

The fact is that the boycott will cost the Indian traders selling Chinese goods a big loss. Chinese manufacturers have already earned their money from Indian traders. The boycott will be a tremendous loss for the Indian traders and ultimately it will be a loss for the Indian economy.

Due to cheap prices Indians can afford buying Chinese products such as jute bags. Chinese poly-bags might be a much better alternative. The middle class of Indian society will not face problems with the boycott. However, if there is a lack of availability of Chinese products, poor people will have to sacrifice the most.

Why are Chinese goods so cheap? Cost of a product depends upon the cost of raw materials, employees, infrastructure, transportation, energy and ease of starting a business to name a few major factors. Most of the raw materials for products that are cheaper when made in China, are readily available in China at a very good price quality index. Public infrastructure in China is very cheap. Goods can be transported efficiently, on-time and across country at a much lower cost than in India.

Comparatively, Indian manufacturers cannot rely on public infrastructure for reliable transportation.Cost and ease of starting a business in India is notoriously very high. It is relatively easier and cost efficient in China. Bribery in China is low; punishment when caught being bribed is too harsh. Therefore, Chinese products are cheap as compared to Indian products.

And, certainly a boycott on Chinese goods is not going to make Indian products cheaper and competitive. Lets’ get our facts right – due to the competition from the Chinese goods, Indian businesses are grounded, and they do not enjoy the monopoly. Our Government cannot support the boycott for two reasons: firstly, it will be against the decorum of the World Trade Organization. The costs of which may be heavy to bear for the Indian government. Secondly, Indian government’s developmental plans also depend on Chinese products. For example in the field of solar power generation, about 66% of the total imports of solar power panels were from China during the first three months of the fiscal year 2015.

China is the king of manufacturing. Let us think reasonably; the chances are extremely low that a modern commercial gadget or device does not have a single component that is not made in China. To what extent are we going to boycott Chinese goods? Let’s not behave ultranationalist.

It’s easy for social media loyalists to dissuade the common man in India from buying anything Chinese; they dissuaded us during Diwali. Since China has problems with India’s stand on Pakistan-based terrorist Masood Azhar, we must therefore stop using all things Chinese; this is certainly not the logic. As usual, the opinion generators on social media are high on provoking us, but rather poor on facts. The fact is – whatever be China’s position as far as India’s fight with terrorism is concerned, we cannot afford to ban Chinese goods imports. The matter must be handled subtly, using bilateral trade as a weapon suits ultra-nationalists but not India’s economy. Ultra-nationalists are people having the belief that their nation will benefit from acting independently than from acting internationally.

As per the website of Indian Department of Commerce last year, we imported more from China the highest value of goods, than the combined amount India spent on importing stuff from United States, UAE and Saudi Arabia last fiscal. India imported goods worth $61.7 billion from China last fiscal when we exported merely worth $9.05 billion to it. India is profoundly dependent on Chinese imports and any weakening of trade ties between the two countries will substantially hurt Indian businesses, not so much China.

Once again, why is India unable to compete with China when it comes to exports? According to a logical answer Commerce Minister Nirmala Sitharaman gave in Lok Sabha during the Monsoon Session earlier this year, trade deficit with China has been increasing as India relies on Chinese exports such as manufactured items to meet the demand of fast expanding sectors like telecom and power. Whereas. India’s exports to China, are characterized by primary and transitional products. The consequence of this is that we send products to China which are not high value-added, whereas China is sending products such as telecom instruments, computer hardware, peripherals, fertilizers, electronic components/ instruments, project goods, organic chemicals and drug intermediates, consumer electronics, electrical machinery and equipment, iron and steel etc. India’s trade deficit with China increased from $38.67 billion in 2012-13 to $48.45 billion in 2014-15. Trade deficit is an economic measure of a negative balance of trade in which a country’s imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.

So friends this Diwali our approach towards boycotting Chinese products was much of a misguided slant. Lets not jump into the social media bandwagon without thinking. Let’s behave maturely, let us understand our national priorities first.