A.B.U. — Asian Broadcasting Union
Acoustics — Resonance quality of sound recording studio.
Ad. lib. — ‘ad libitum’ (Latin- “at pleasure”) speaking in microphone without rehearsal/speaking without preparation in microphone is called adlibbing.
A.M. — Amplitude modulation, audio transmission on frequencies from 550 to 1600 kilohertz. (medium wave in India).
Anchorman — News/programme presenter.
Bleed — Making all or part of the television picture go out of frame.
Break — “time out” in rehearsal or production. Programme section set apart for spots or advertisements; duration between two segments of news/programme in which the broadcasting organisation broadcasts its name.
CATV — Community Antenna Television; Cable connection.
CBA — Commonwealth Broadcasting Association
Clip — Short section of a longer film.
CCTV — Close Circuit TV
Cold — Without preparation. Also : Bluish or greenish picture tone.
Compere — Show-host or programme presenter.
Console — Control room switching desk. Announcer’s console is consists of switch controls like volume, pitch etc.
Credits — Opening or closing list of programme production personnel. In common man’s language it is called ‘casting’. The personnel who have helped in making the programme like Producer, anchor, presenter, production assistant, cameraman, sound recordist etc.
Cue sheet — A sheet having details of programmes to be broadcast.
Cue track — Auxiliary audio recording area on video tape.
Cyclorama — large J-profiled piece of background scenery, usually white, eliminating
any visual frame of reference.
DA — Directional antenna.
Diary — Self-reporting audience survey technique.
Digital — Translation of information into mathematical bits, providing easy signal regeneration without noise, drift or distortion.
Disc jockey or dj — A host entertaining listener through disc/record playing.
Dope sheet — camera operator’s take-by-take record; also a reference sheet.
ECU — Extra/extreme close-up.
Eye light — Low-level illumination (usually from camera mounted light)
Eye line — Direction of performer’s gaze.
Facts sheet — Copy points for announcers’ ad lib use.
Fader — Volume control also called pot from potentiometer.
Fade-in — Come slowly out of black picture to an image or come slowly out of silence to a sound.
Fade-out — Go slowly from an image to black or go slowly from a sound to silence.
Fishbowl — Studio observation booth.
Fish-eye — Extreme wide angle lens.
Fishing rod — Long held microphone
Floor — Shooting set in a television studio or stage.
Floor manager — Director’s representative on floor, usually connected to control room by headphones.
Floor men — Helping hands, assistants on floor.
Footage — Standard film length measurement. Scenes shot on film.
Frame — Individual motion picture film photograph. Usually there are 24 frames in one second when projected.
Freelance — Creative artists, script writers who are not on payroll.
Frequency — Rate at which electronic impulse or sound or light is repeated in a specific time period; measured in hertz.
Gain — Audio amplification usually measured in decibels.
Gobo — Sound-absorbing material or screen. A small black screen to keep stray light from striking camera lens.
Handheld — Camera without stand or tripod, microphone without stand; instrument that can be carried in hand.
Hardware — Equipment and machinery used to broadcast/transmit programme.
Headphones — Tiny speakers worn over each ear; also called headset.
Jingle — Musical broadcast advertisement, usually sung.
LED — Light Emitting Diode
Live — Broadcast of something actually happening.
Location — Non-studio broadcasting/shooting site.
MATV — Master antenna television system; cable TV.
MC — Master of Ceremony, host, anchor, compere.
MCU — Medium Close-up
Microphone — Mike/Mic. – device use to convert sound wave intoelectrical impulse
Microwave — Line-of-sight cable less system relaying broadcast signals.
Mix — Mixing different soundtrack, audio-visuals etc.
Mixer — The console or machine used for mixing/editing the tracks.
Montage — visual blending of several scenes.
Mute — Silent film; closing the volume.
Narrator — Off-camera performer/ commentator who is in the background.
OB — Out broadcast; broadcasting from location outside studio.
OB Van — Van equipped with necessary machinery for live transmission or recording from outside locations.
OC — On Camera – A narrator or performer facing the camera.
Off camera — (voice over) Same as narrator – a commentator whose face is not seen.
On the air — Transmission of programme; broadcast.
Outline — Brief written summary of a programme.
Phone over — A Radio/TV correspondent reporting over telephone during live programme. Also called ‘Phone-O.’
Pre-production — The preparation or outlining the programme before actual production.
Producer — In-charge of making programme.
Production — Making a programme for broadcast.
Prompter— A TV screen usually mounted on camera or on a stand on which the written material is rolling up for a programme presenter/newscaster to read.
PSA — Public Service Announcement; time slot set apart for non-commercial public service announcements.
Radio jockey (r.j) — Radio programme host; compere.
Rating point — Measurement unit for popularity of a broadcast. TV Rating point is used to gauge the popularity of a television Programme – through audience research etc.
Raw stock — Material to be used in programme production.
Unexposed films/ cartridges/ cassettes. Unedited scenes kept for future use.
Report sheet — Camera man’s take-by-take record to be used during editing.
Ribbon — Highly sensitive directional microphone.
Rifle — Long highly directional microphone; also called gun microphone.
Rip and read — Reading news material directly from agency’s teleprinter without editing.
Script — Written material to be read by a performer.
Scriptwriter — The person writing script for broadcast.
Signature tune — Music denoting a particular programme; usually played at beginning and/or end of the programme.
Sign-on/sign off — Station’s or performer’s identification at the start/end of the programme/broadcast.
Sound bite — Actuality/sound effect or voice of newsmaker inserted in the middle of the programme or news bulletin to make Programme/ news lively and authentic.
Sound track — Portion of film or audio/video tape on which sound is recorded.
Stock shot — Library footage kept for use as and when required.
Sub title — Text along with visuals; usually translation of foreign film in a native language.
Superimpose — Mixing/overlap of an audio/visual signal over another.
UHF — Ultra High Frequency (between 470-890 MHz)
Umbrella — Umbrella-shaped “bounce light” reflector.
Sunday, March 6, 2011
TERMS TERMS TERMS TERMS
Allegory—A literary piece in narrative put in figurative language intended to point a moral e.g., Bunyan’s “Piligrim Progress.”
Alliteration—The repetition of the same initial letter in every succeeding word; as, “Full fathom five thy father lies” (Shakespeare; The Tempest)
Anthem—A national song.
Anti-climax—A sudden descent in thought and expression.
Aphorism—A maxim or a concise sentence containing precept of important truth.
Autobiography—An account of one’s life written by oneself.
Ballad—A short narrative poem, adopted for reciting and singing.
Ballet—A combination of four arts; dancing, music, painting and drama each of which is of equal importance.
Belles letters—Choicest literature.
Biography—The history or the life of a person written-by somebody other than by the person concerned himself.
Blue Books—British Parliamentary Reports.
Blank-Verse—Poem without rhyme.
Blue Stocking—A term used to describe a lady affecting literary tastes.
Burlesque—A literary composition tending to excite laughter by caricature or extravagant contrast.
Calligraphy—Beautiful writing.
Caricature—Representation of something in a ridiculous or exaggerated style, especially in Pictures.
Catastrophe—Denotes the last stage of a tragedy.
Classic—A work of the highest class or rank in literature or art.
Classicism—The term is characterized by a sense of form, balance and proportion. It looks to the Greek and Roman authors for inspiration.
Comedy—A play dealing with comic and happy side of life.
Cubism—It is a form of modern art introduced by Picasso, Spanish painter in which human being are presented in geometrical figures.
Dirge—A mourning song.
Elegy—A song of mourning, Gray’s “Elegy Written in a Country Church Yard” is an example of elegy.
Epic—A narrative poem of some heroic deed e.g., ‘The Paradise Lost’. ‘The Ramcharitmanas.’
Epigram—A short saying full of wit.
Epilogue—A poem of speech at the end of a play.
Esperanto—A universal language invented by Dr. Ludwig Zamenh of Warsaw in 1887. This speech is constructed from roots common to the chief European languages.
Euphemism—An affected style of writing.
Free Verse—Poem without regular metre and rhyme.
Farce—A dramatic work merely to arouse laughter.
Fresco Painting—A method of painting in water-colour laid on a wall or ceiling before the plaster is dry.
Green Room—The place where to the actors and actresses retire when off stage.
Hymn—Song in praise of God.
Hyperbole—A figure of speech in which things are spoken of exaggeratedly to produce literary effect.
Hieroglyphics—The earliest pictures of symbolic expressions and art supposed to have been introduced by the ancient Egyptians.
Idyll—A short poem describing some happy, simple, rural pastoral scenes.
Ikebana—Japanese style of flower arrangement.
Innuendo—An oblique expression hinting at something but not openly stating it.
Jingoism—Ostentatious way of expressing excessive patriotism.
Lampoon—A piece of satire against a person.
Lyric—Originally a poem that could be sung to the accompaniment of a lyre; but now it is used in a general sense meaning a poem embodying one united emotion of the poet.
Malapropism—Derives its name from a character of Mrs. Malaprop in Sheridan’s ‘Rivals’. She misused word which sounded alike.
Melody—Musical arrangement of words.
Melodrama—Sensational dramatic piece with violent appeals to emotions.
Metaphor—A figure of speech in which a comparison is made between two different objects by omitting words of comparison like ‘like’ ‘as’, “Life is a tale told by an idiot.”
Naturalism—Adherence to nature in art and literature.
Nome de plume (pen name)—An assumed name under which a person writes to hide his identity; e.g. Alpha of the Plough, the pen name of A.G. Gardiner.
Ode—Poem meant to be sung to the accompaniment of dance.
Orthography—Art of correct spelling.
Parody—Imitation in a humorous way of a poem or writing.
Philology—Science of languages.
Plagiarism—Act of stealing from the writings of others. Shakespeare is supposed to be one of the greatest plagiarists and yet he was the greatest original writer.
Poet Laureate—Poet of the Royal household, now spoken of a poet recognised officially as a national poet.
Pornography—Writing, painting or photography describing sex in such a manner as to arouse baser passions and excite impressionable minds.
Prosody—Science of versification.
Realism—A term used with reference to a form of literature depicting actual life and representing universal human passions.
Romance—A branch of literature in which element of wonder or imagination predominates.
Romanticism—The term is characterised by the qualities of remoteness, resolution, disillusionment, passion, divine unrest, melancholy, idealization and all embracing power of the imagination. It is suggestive of strangeness and adventure—never satisfied aspiration after the unknown or unattainable.
Renaissance—Revival of ancient art and learning in Europe in 15th century.
Satire—A composition written in satiric vein aiming at ridiculing and eliminating evil customs from the society or individuals.
Simile—Comparison bringing out similarity between two different things otherwise dissimilar.
Sonnet—A lyric poem of fourteen lines with particular rhyming scheme.
Spoonerism—Ludicrous involuntary transposition of sounds of spoken words such as “Snowing Leopard” for “Loving Shepherd”.
Stop Press—Refers to a special space provided in a newspaper for last minute news when it is just going to be printed.
Yellow Journalism—Any newspaper giving sensational news or features with lavish use of pictures or pseudo-scientific articles is said to be indulging “Yellow Journalism”.
Artificial Gravity—This is actually the creation of centrifugal force by causing a craft-like object, the popularly known space station, to slowly rotate. This is just one more attempt to imitate the natural environment.
Astronaut—One who is chosen to go on flights into space.
Capsule—The original container for the astronauts in their orbiting flights around the earth. It is sealed tight and can maintain for an extended period of time an environment suitable for life to exist.
Command Module—The section of the Apollo space craft which houses the crew of three astronauts and which is the only reentering unit of the main sub-system used during the flight.
Communication Satellite—A satellite which is equipped to act as a middle relay station for a transmitting and receiving station pair thousands of miles apart. These wouldn't have to rely upon ground cables which are not always available between the two points.
Docking—The joining together of two separate units in space although the two are not launched at the same time. This requires very careful selection of orbit and speed of the chasing vehicle to catch up with the pursued vehicle.
Rocket—A device which can produce thrust by burning fuel and is capable of moving itself as a result of reaction.
Space Suit—A suit which can provide the necessary environment for an astronaut in case of cabin pressure failure. If he wishes to go outside and around the ship as it travels through space, he will wear the suit temporarily while he is in space.
Al Fateh—It is the name of the Palestine Liberation Movement—an organisation of guerilla fighters who indulge in hit and run attack against Israel. The chief of the organisation is Yasar Arafat.
Anand Marg—It is an organisation founded in 1955 by Mr. Prabhat Ranjan Sarkar known as ‘Anand Murtiji’. The followers of Anand Murtiji regard him as an incarnation. It was banned during Emergency by the Government headed by Mrs. Indira Gandhi.
Beatles—The Beatles were a team of pop-singers from Liverpool (U.K.). They had unconventional ways of living and dressing, with which they took the teenagers all over the world by surprise.
Black Panthers—It is a Negro organisation in the U.S.A. Originally it aimed at planning attacks against white Americans. Later they took to social work.
Black September—It was a group of Palestinian guerillas formed in 1970 after the Jordanian army’s offensive against them. The member of this group killed a number of Israeli athletes at Munich during 20th Olympics. This organisation also planned postal bomb attacks against their targets, in particular against the Jews all over the world. In Feb./March, 1973 the members of the same group kept hostages a number of diplomats at Khartoum, capital of Sudan, of whom they killed three; two Americans and one Belgian diplomat.
Red Cross—It is an international agency founded by Henry Dunant to assist the wounded and the prisoners of war. It also works to relieve human suffering during peace time arising out of, say, epidemics, floods, earthquakes etc.
Shiv Sena—It is an organisation formed in Maharashtra to protect the interest of the Maharashtians and is headed by Bal Thackeray.
SIMI (Student’s Islamic Movement of India)—A communal organisation of the Muslims in India. It was banned on Sept. 27, 2001 by Govt. of India following informations of its involvement in antinational terroriste activities and its links with international terrorist organisations.
White December—It was formed in India in the wake of the subversive activities carried out by members of the Black December against Indian interests at home and abroad. It threatened the Black December with dire consequences in case they attempted to harm Indian citizens in any way.
Interpol—It is the popular name of the International Criminal Police Organisation. It has 90 affiliated countries which have joined hands through it to fight against international crime. Its H.Qs. is in Paris.
Open University—Britain is a pioneer in starting an open university in 1971, which aroused considerable interest all over the world. It is an institution different from the conventional type symbolised by brick and mortar construction and campuses. It has been using a combination of correspondence material, television, radio broadcasts and also face to face tuition. Japan has achieved some success in the new experiment. Candidates could be allowed to appear in university examinations openly without attending regular classes particularly in Arts and Commerce. In India the idea arose following heavy rush for admissions in colleges and universities.
Servants of India Society—It was founded in India in 1905 by Gopal Krishna Gokhale.
Allah Tigers—A secessionist Organisation of Jammu & Kashmir.
Hizbul Mujahideen—Pakistan supported terrorist organization operating in Jammu & Kashmir. Talk between its leaders and Indian government for establishing peace in the State failed in August 2000. The activists of this organisation in collusion with other terrorist organisations have made life hell in Jammu & Kashmir.
SIMI (Students Islamic Movement of India)—A fundamentalist muslim organisation which has been banned by the Government of India following revelations of its involvement in terrorist and anti-national activities.
Alliteration—The repetition of the same initial letter in every succeeding word; as, “Full fathom five thy father lies” (Shakespeare; The Tempest)
Anthem—A national song.
Anti-climax—A sudden descent in thought and expression.
Aphorism—A maxim or a concise sentence containing precept of important truth.
Autobiography—An account of one’s life written by oneself.
Ballad—A short narrative poem, adopted for reciting and singing.
Ballet—A combination of four arts; dancing, music, painting and drama each of which is of equal importance.
Belles letters—Choicest literature.
Biography—The history or the life of a person written-by somebody other than by the person concerned himself.
Blue Books—British Parliamentary Reports.
Blank-Verse—Poem without rhyme.
Blue Stocking—A term used to describe a lady affecting literary tastes.
Burlesque—A literary composition tending to excite laughter by caricature or extravagant contrast.
Calligraphy—Beautiful writing.
Caricature—Representation of something in a ridiculous or exaggerated style, especially in Pictures.
Catastrophe—Denotes the last stage of a tragedy.
Classic—A work of the highest class or rank in literature or art.
Classicism—The term is characterized by a sense of form, balance and proportion. It looks to the Greek and Roman authors for inspiration.
Comedy—A play dealing with comic and happy side of life.
Cubism—It is a form of modern art introduced by Picasso, Spanish painter in which human being are presented in geometrical figures.
Dirge—A mourning song.
Elegy—A song of mourning, Gray’s “Elegy Written in a Country Church Yard” is an example of elegy.
Epic—A narrative poem of some heroic deed e.g., ‘The Paradise Lost’. ‘The Ramcharitmanas.’
Epigram—A short saying full of wit.
Epilogue—A poem of speech at the end of a play.
Esperanto—A universal language invented by Dr. Ludwig Zamenh of Warsaw in 1887. This speech is constructed from roots common to the chief European languages.
Euphemism—An affected style of writing.
Free Verse—Poem without regular metre and rhyme.
Farce—A dramatic work merely to arouse laughter.
Fresco Painting—A method of painting in water-colour laid on a wall or ceiling before the plaster is dry.
Green Room—The place where to the actors and actresses retire when off stage.
Hymn—Song in praise of God.
Hyperbole—A figure of speech in which things are spoken of exaggeratedly to produce literary effect.
Hieroglyphics—The earliest pictures of symbolic expressions and art supposed to have been introduced by the ancient Egyptians.
Idyll—A short poem describing some happy, simple, rural pastoral scenes.
Ikebana—Japanese style of flower arrangement.
Innuendo—An oblique expression hinting at something but not openly stating it.
Jingoism—Ostentatious way of expressing excessive patriotism.
Lampoon—A piece of satire against a person.
Lyric—Originally a poem that could be sung to the accompaniment of a lyre; but now it is used in a general sense meaning a poem embodying one united emotion of the poet.
Malapropism—Derives its name from a character of Mrs. Malaprop in Sheridan’s ‘Rivals’. She misused word which sounded alike.
Melody—Musical arrangement of words.
Melodrama—Sensational dramatic piece with violent appeals to emotions.
Metaphor—A figure of speech in which a comparison is made between two different objects by omitting words of comparison like ‘like’ ‘as’, “Life is a tale told by an idiot.”
Naturalism—Adherence to nature in art and literature.
Nome de plume (pen name)—An assumed name under which a person writes to hide his identity; e.g. Alpha of the Plough, the pen name of A.G. Gardiner.
Ode—Poem meant to be sung to the accompaniment of dance.
Orthography—Art of correct spelling.
Parody—Imitation in a humorous way of a poem or writing.
Philology—Science of languages.
Plagiarism—Act of stealing from the writings of others. Shakespeare is supposed to be one of the greatest plagiarists and yet he was the greatest original writer.
Poet Laureate—Poet of the Royal household, now spoken of a poet recognised officially as a national poet.
Pornography—Writing, painting or photography describing sex in such a manner as to arouse baser passions and excite impressionable minds.
Prosody—Science of versification.
Realism—A term used with reference to a form of literature depicting actual life and representing universal human passions.
Romance—A branch of literature in which element of wonder or imagination predominates.
Romanticism—The term is characterised by the qualities of remoteness, resolution, disillusionment, passion, divine unrest, melancholy, idealization and all embracing power of the imagination. It is suggestive of strangeness and adventure—never satisfied aspiration after the unknown or unattainable.
Renaissance—Revival of ancient art and learning in Europe in 15th century.
Satire—A composition written in satiric vein aiming at ridiculing and eliminating evil customs from the society or individuals.
Simile—Comparison bringing out similarity between two different things otherwise dissimilar.
Sonnet—A lyric poem of fourteen lines with particular rhyming scheme.
Spoonerism—Ludicrous involuntary transposition of sounds of spoken words such as “Snowing Leopard” for “Loving Shepherd”.
Stop Press—Refers to a special space provided in a newspaper for last minute news when it is just going to be printed.
Yellow Journalism—Any newspaper giving sensational news or features with lavish use of pictures or pseudo-scientific articles is said to be indulging “Yellow Journalism”.
Absolute Zero—The starting point of absolute temperature where all molecular motion ceases.
Artificial Gravity—This is actually the creation of centrifugal force by causing a craft-like object, the popularly known space station, to slowly rotate. This is just one more attempt to imitate the natural environment.
Astronaut—One who is chosen to go on flights into space.
Capsule—The original container for the astronauts in their orbiting flights around the earth. It is sealed tight and can maintain for an extended period of time an environment suitable for life to exist.
Command Module—The section of the Apollo space craft which houses the crew of three astronauts and which is the only reentering unit of the main sub-system used during the flight.
Communication Satellite—A satellite which is equipped to act as a middle relay station for a transmitting and receiving station pair thousands of miles apart. These wouldn't have to rely upon ground cables which are not always available between the two points.
Docking—The joining together of two separate units in space although the two are not launched at the same time. This requires very careful selection of orbit and speed of the chasing vehicle to catch up with the pursued vehicle.
Rocket—A device which can produce thrust by burning fuel and is capable of moving itself as a result of reaction.
Space Suit—A suit which can provide the necessary environment for an astronaut in case of cabin pressure failure. If he wishes to go outside and around the ship as it travels through space, he will wear the suit temporarily while he is in space.
Al Badr—An organisation which collaborated with the Pakistani occupation army in the atrocities it committed in Bangla Desh before it was jettisoned by the Indian army.
Al Fateh—It is the name of the Palestine Liberation Movement—an organisation of guerilla fighters who indulge in hit and run attack against Israel. The chief of the organisation is Yasar Arafat.
Anand Marg—It is an organisation founded in 1955 by Mr. Prabhat Ranjan Sarkar known as ‘Anand Murtiji’. The followers of Anand Murtiji regard him as an incarnation. It was banned during Emergency by the Government headed by Mrs. Indira Gandhi.
Beatles—The Beatles were a team of pop-singers from Liverpool (U.K.). They had unconventional ways of living and dressing, with which they took the teenagers all over the world by surprise.
Black Panthers—It is a Negro organisation in the U.S.A. Originally it aimed at planning attacks against white Americans. Later they took to social work.
Black September—It was a group of Palestinian guerillas formed in 1970 after the Jordanian army’s offensive against them. The member of this group killed a number of Israeli athletes at Munich during 20th Olympics. This organisation also planned postal bomb attacks against their targets, in particular against the Jews all over the world. In Feb./March, 1973 the members of the same group kept hostages a number of diplomats at Khartoum, capital of Sudan, of whom they killed three; two Americans and one Belgian diplomat.
Red Cross—It is an international agency founded by Henry Dunant to assist the wounded and the prisoners of war. It also works to relieve human suffering during peace time arising out of, say, epidemics, floods, earthquakes etc.
Shiv Sena—It is an organisation formed in Maharashtra to protect the interest of the Maharashtians and is headed by Bal Thackeray.
SIMI (Student’s Islamic Movement of India)—A communal organisation of the Muslims in India. It was banned on Sept. 27, 2001 by Govt. of India following informations of its involvement in antinational terroriste activities and its links with international terrorist organisations.
White December—It was formed in India in the wake of the subversive activities carried out by members of the Black December against Indian interests at home and abroad. It threatened the Black December with dire consequences in case they attempted to harm Indian citizens in any way.
Interpol—It is the popular name of the International Criminal Police Organisation. It has 90 affiliated countries which have joined hands through it to fight against international crime. Its H.Qs. is in Paris.
Open University—Britain is a pioneer in starting an open university in 1971, which aroused considerable interest all over the world. It is an institution different from the conventional type symbolised by brick and mortar construction and campuses. It has been using a combination of correspondence material, television, radio broadcasts and also face to face tuition. Japan has achieved some success in the new experiment. Candidates could be allowed to appear in university examinations openly without attending regular classes particularly in Arts and Commerce. In India the idea arose following heavy rush for admissions in colleges and universities.
Servants of India Society—It was founded in India in 1905 by Gopal Krishna Gokhale.
Allah Tigers—A secessionist Organisation of Jammu & Kashmir.
Hizbul Mujahideen—Pakistan supported terrorist organization operating in Jammu & Kashmir. Talk between its leaders and Indian government for establishing peace in the State failed in August 2000. The activists of this organisation in collusion with other terrorist organisations have made life hell in Jammu & Kashmir.
SIMI (Students Islamic Movement of India)—A fundamentalist muslim organisation which has been banned by the Government of India following revelations of its involvement in terrorist and anti-national activities.
MONETARY POLICY DECLARED ON 25TH JAN 2011
There have been significant changes in the macroeconomic environment since the Second Quarter Review issued on November 2, 2010. Globally, the recovery in the advanced economies appears to be consolidating and expectations of growth during 2011, particularly in the US, are generally being revised upwards. However, inflationary tendencies are clearly visible. Though still subdued in the advanced economies, inflationary pressures in emerging market economies (EMEs), which were already strong, have intensified due to sharp increases in food, energy and commodity prices.
2. The Indian economy has reverted to its pre-crisis growth trajectory, with growth in the first half of 2010-11 estimated at 8.9 per cent. Recent data on agricultural output and service sector indicators suggest that the growth momentum continued in the third quarter. The robustness of growth is also reflected in corporate sales, tax revenues and bank credit, notwithstanding some moderation in the index of industrial production (IIP).
3. Inflation is clearly the dominant concern. Even as the rate itself remains uncomfortably high, the reversal in the direction of inflation is striking. After some moderation between August and November 2010, inflation rose again in December 2010 on the back of sharp increase in the prices of primary food articles and the recent spurt in global oil prices. Non-food manufacturing inflation has remained sticky, reflecting both buoyant demand conditions and rising costs.
4. Against this backdrop, this statement sets out the Reserve Bank’s assessment of the current macroeconomic situation and forward projections. It is organised in four sections. Section I provides an overview of global and domestic macroeconomic developments. Section II sets out the outlook and projections for growth, inflation and monetary aggregates. Section III explains the stance of monetary policy. Section IV specifies the policy measures. This statement should be read and understood together with the detailed review in Macroeconomic and Monetary Developments released yesterday by the Reserve Bank.
I. The State of the Economy
The Global Economy
5. Global growth prospects have improved in recent weeks. The recovery in major advanced economies, which had weakened during Q2 of 2010, regained strength in Q3 of 2010. Real GDP growth in the US, which had moderated from 3.7 per cent in Q1 of 2010 to 1.7 per cent in Q2 of 2010, improved to 2.6 per cent in Q3. Corporate capital spending and retail sales in the US have improved. While uncertainty persists in the Euro area and Japan, the baseline outlook for both is improving. Growth in EMEs has remained strong, supported largely by domestic demand.
6. In advanced economies, the earlier fears of deflation have given way to early signs of inflation. In EMEs, inflation has accentuated significantly in the recent period. Rapidly rising food prices in several economies such as China, India, Indonesia, Brazil and Russia are a major contributory factor. According to the Food and Agriculture Organisation (FAO), international food prices rose by 25 per cent in December 2010 in comparison with the level at the end of 2009. The increase in global food prices has been led by prices of edible oils (55 per cent), cereals (39 per cent) and sugar (19 per cent). Significantly, the FAO expects food prices to further harden during 2011, intensifying global inflationary pressures.
7. These pressures are likely to be reinforced by trends in energy and commodity prices. The crude oil (Brent) price perked from US$ 85 per barrel on November 2, 2010 to US$ 97 per barrel on January 21, 2011. The price of crude (ICE Brent) in the futures market is ruling at US$ 98 per barrel for March 2011 delivery. Many other commodities have seen similar movements. As growth prospects in the US improve, the consequent increase in global demand for energy and commodities will exert further pressure on prices. Already, the 10-year benchmark US government securities yield increased from 2.4 per cent in early October 2010 to 3.4 per cent in mid-January 2011, indicating, among other things, rising inflationary expectations.
The Domestic Economy
8. Real GDP in India increased by 8.9 per cent during the first half of 2010-11, reflecting strong domestic demand, especially private consumption and investment, and improving external demand. Although on a cumulative basis, the IIP grew by 9.5 per cent during April-November 2010, it has been volatile in the current financial year with growth rates ranging between 2.7 per cent and 16.6 per cent. Overall, robust corporate sales, large indirect tax collections, advance tax payments and leading indicators of service sector activity suggest persistence of the growth momentum.
9. On the other hand, the latest quarterly Industrial Outlook Survey conducted by the Reserve Bank during October-December 2010 indicates a marginal moderation in overall business expectations during January-March 2011 from their high level in the previous quarter. The Reserve Bank’s order book, inventories and capacity utilisation survey for July-September 2010 showed a marginal improvement in capacity utilisation in Q2 of 2010-11, while the HSBC Purchasing Managers’ Index (PMI) showed some moderation in the pace of manufacturing sector expansion in December 2010.
10 . Headline inflation, based on year-on-year changes in the wholesale price index (WPI), moderated to a single digit in August 2010 and softened further to 7.5 per cent in November 2010, the lowest level attained during 2010. However, inflation reversed course to rise to 8.4 per cent in December 2010, driven primarily by food and fuel inflation.
11. Year-on-year primary food articles inflation spiked to 13.5 per cent in December from 9.4 per cent in November due to severe supply constraints in respect of some food items. In particular, vegetable prices increased by 22.9 per cent in December 2010 over the previous month’s level. Month-on-month price increases were very high for some vegetables such as brinjals (65 per cent), onions (35 per cent), garlic (26 per cent), cabbage (22 per cent), tomatoes (19 per cent) and potatoes (16 per cent).
12. Year-on-year fuel inflation, which had moderated from 14.4 per cent in May 2010 to 10.3 per cent in November 2010, rose again to 11.2 per cent in December 2010 due to a rise in non-administered domestic fuel prices, reflecting the sharp increase in international prices. In the first fortnight of January 2011, oil marketing companies further raised the prices of petroleum products (petrol and aviation turbine fuel) which will further add to fuel inflation. The year-on-year WPI non-food manufactured products (weight: 55 per cent) inflation, which moderated from 5.9 per cent in April 2010 to 5.1 per cent in September 2010, increased to 5.4 per cent in November, though it softened marginally to 5.3 per cent in December. Significantly, non-food manufactured products inflation continues to remain above its medium-term trend of 4.0 per cent. Moreover, in recent months, the underlying inflation momentum in this segment has been positive.
13. Between November and December 2010, as WPI inflation moved up from 7.5 per cent (year-on-year) to 8.4 per cent, the wholesale price index increased by 1.3 per cent. Of this increase in index, 82 per cent was contributed by primary articles and fuel groups and 18 per cent by the manufactured products group. At a disaggregated level, vegetables alone contributed as much as 40 per cent to the increase in the index in December, followed by mineral oil (13 per cent), condiment and spices (8 per cent) and minerals (7 per cent).
14. Money supply (M3) growth moderated during the year, reflecting slower deposit growth and faster currency expansion which reduced the money multiplier. Several banks raised their deposit rates after the Second Quarter Review of 2010-11 which contributed to a larger deposit mobilisation in December. Consequently, M3 growth increased to 16.5 per cent by end-December 2010, close to the indicative projection of 17 per cent for 2010-11.
15. However, year-on-year nonfood credit growth has been above the Reserve Bank’s indicative projection of 20 per cent since early October 2010, rising to 24 per cent by end-December 2010. The wide gap between credit growth and deposit growth resulted in a sharp increase in the incremental non-food credit-deposit ratio to 102 per cent by end-December 2010, up from 58 per cent in the corresponding period of previous year.
16. Disaggregated data suggest that credit growth, which was earlier driven by the infrastructure sector, is becoming increasingly broad-based across sectors and industries, evidencing growth momentum and demand pressures. Credit flow to the services sector increased significantly for transport operators, tourism, hotel and restaurant and commercial real estate, besides retail housing and personal loans. As regards industry, apart from infrastructure, increase in credit was significant for metals, engineering, textiles, food processing and chemical and chemical products.
17. Rough estimates showed that the total flow of financial resources from banks and non-banks to the commercial sector during April-December 2010 was `9,01,000 crore, up from `6,36,000 crore during the corresponding period of last year. While bank credit to the commercial sector surged, the flow of funds from other sources was lower than last year’s level mainly on account of lower net inflows from foreign direct investment (FDI).
18 . As part of the calibrated exit from the crisis driven expansionary monetary stance, the Reserve Bank increased the repo rate by 150 basis points (bps) and the reverse repo rate by 200 bps during March–November 2010. In addition, the cash reserve ratio (CRR) was raised by 100 bps. In response to these monetary policy measures, scheduled commercial banks (SCBs) raised their deposit rates in the range of 25-250 bps during March 2010 -January 2011 across various maturities, indicating strong monetary policy transmission.
19. The Base Rate system replaced the Benchmark Prime Lending Rate system with effect from July 1, 2010. Several banks reviewed and increased their Base Rates by 25-100 bps between July 2010 and January 2011. Base Rates of 67 banks with a share of 98 per cent in the total bank credit were in the range of 7.5-9.0 per cent in December 2010.
20. Tight liquidity conditions persisted throughout the third quarter of 2010-11. The average daily net injection of liquidity through the liquidity adjustment facility (LAF) increased from around `62,000 crore in October to around `99,000 crore in November and further to around `1,20,000 crore in December, with the peak injection of around `1,71,000 crore on December 22, 2010. While the overall liquidity in the system has remained in deficit consistent with the policy stance, the extent of tightness after the Second Quarter Review of 2010-11 was outside the comfort zone of the Reserve Bank, i.e., (+)/(-) one per cent of net demand and time liabilities (NDTL) of banks. Above-normal government cash balances, which rose from an average of `73,000 crore in October to `1,53,000 crore by the second half of December 2010, contributed to the frictional component of liquidity deficit. However, the widening difference between credit and deposit growth rates coupled with high currency growth accentuated the structural liquidity deficit.
21. The Reserve Bank instituted a number of measures to mitigate the liquidity deficit. First, the statutory liquidity ratio (SLR) of SCBs was reduced from 25 per cent of their NDTL to 24 per cent with effect from December 18, 2010. Second, it conducted open market operation (OMO) purchase of government securities of the order of over `67,000 crore. Third, additional liquidity support to SCBs was provided under the LAF. This facility, which was initially available up to 2 per cent of their NDTL, was brought down to one per cent of NDTL after reduction in the SLR by one percentage point. Fourth, a second LAF window was introduced.
22. Government spending resulted in a reduction of its cash balances during January 2011 (up to January 21, 2011). As a result, the average daily net liquidity injection through the LAF declined from around `1,20,000 crore during December 2010 to around `90,000 crore in January 2011 (up to January 21, 2011).
23. Reflecting the improvement in the tight liquidity conditions, the average daily call rate moderated from 6.7 per cent during December 2010 to 6.5 per cent in January 2011 (up to January 21, 2011). At the longer end, 10-year government security (G-Sec) yield, which had generally remained above 8 per cent during most of October-November 2010 on account of inflationary pressures and persistent liquidity tightness, also softened in the second half of December 2010. However, the yield on 10-year G-sec moved up again to 8.2 per cent by January 21, 2011, reflecting both liquidity conditions and inflationary expectations.
24. Over 95 per cent of the Central Government’s budgeted borrowing programme (net) was completed by January 24, 2011. During the first eight months of 2010-11, the fiscal deficit of the Central Government was less than 50 per cent of the budget estimates. The one-off revenue generated from spectrum auctions, estimated to be around 1.5 per cent of GDP for the year, has been a major contributor to the current improvement on the revenue side.
25. During 2010-11 (up to December 2010), the real exchange rate of the rupee showed a mixed trend. It appreciated by 3.7 per cent on the basis of the trade based 6-currency real effective exchange rate (REER), reflecting both nominal appreciation of the rupee against the US dollar and the higher inflation differential with major advanced countries. However, against broader baskets of 36-currency and 30-currency REER, the rupee depreciated over its March 2010 levels by 0.6 per cent and 2.5 per cent, respectively.
26. On a balance of payments (BoP) basis, the trade deficit widened to US$ 35.4 billion in Q2 of 2010-11 from US$ 31.6 billion in Q1. Coupled with stagnation in invisibles receipts, this led to a widening of the current account deficit (CAD) from US$ 12.1 billion in Q1 of 2010-11 to US$ 15.8 billion in Q2 of 2010-11. In the first half of 2010-11, the CAD expanded to 3.7 per cent of GDP from 2.2 per cent in the corresponding period of last year. Subsequent trade data indicate faster growth in exports vis-a-vis imports which may help improve the CAD in Q3 of 2010-11. However, the sharp increase in global commodity prices, particularly oil, could have an adverse impact on our trade balance going forward. For the year as a whole, India’s CAD is expected to be close to 3.5 per cent of GDP.
II. Outlook and Projections
Global Outlook
Growth
27. With advanced economies showing firmer signs of sustainable recovery, global growth in 2010 is expected to have been less imbalanced than before. While growth in advanced economies may improve, growth in EMEs, which have been the main engine of global economic growth in the recent period, may moderate due to tightening of monetary policy to address rising inflationary concerns and the waning impact of the fiscal stimulus measures taken in the wake of the global financial crisis.
Inflation
28. Even as a large slack persists, inflation has edged up in major advanced economies owing mainly to increase in food and energy prices. Inflation in the Euro area exceeded the European Central Bank’s (ECB) medium-term target for the first time in more than two years in December 2010. Similarly in the UK, the headline inflation has persisted above the target of the Bank of England. In the US, the headline CPI rose to 1.5 per cent in December 2010 from 1.1 per cent in November 2010. Whereas signs of inflation in the advanced countries are only incipient, many EMEs have been facing strong inflationary pressures, reflecting higher international commodity prices and rising domestic demand pressures.
29. Significantly, food, energy and commodity prices are widely expected to harden during 2011, driven by a combination of supply constraints and rising global demand, as the advanced economies consolidate their recovery. This suggests that inflation could be a global concern in 2011.
Domestic Outlook
Growth
30. On the domestic front, the 8.9 per cent GDP growth in the first half of 2010-11 suggests that the economy is operating close to its trend growth rate, powered mainly by domestic factors. The kharif harvest has been good and rabi prospects look promising. Good agricultural growth has boosted rural demand. Export performance in recent months has been encouraging.
31. With the risks to growth in 2010-11 being mainly on the upside, the baseline projection of real GDP growth is retained at 8.5 per cent as set out in t he Second Quarter Review of Monetary Policy of July 2010 but with an upside bias (Chart 1).
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Inflation
32. The moderation in headline inflation observed between August and November 2010 was along the projected trajectory of the Reserve Bank. This trend, however, reversed in December 2010 due mainly to sharp increase in the prices of vegetables, mineral oils and minerals.
33. While the current spike in food prices is expected to be transitory, structural demand-supply mismatches in several non-cereal food items such as pulses, oilseeds, eggs, fish and meat and milk are likely to keep food inflation high. Non-food manufacturing inflation also remains significantly above its medium-term trend of 4 per cent. The Reserve Bank’s quarterly inflation expectations survey, conducted during the first fortnight of December 2010, indicates that expectations of households remain elevated.
34. Going forward, the inflation outlook will be shaped by the following factors. First, it will depend on how the food price situation – both domestic and global – evolves. Domestic food price inflation has witnessed high volatility since mid-2009 due to both structural and transitory factors. A significant part of the recent increase in food price inflation is due to structural constraints. This is reflected in the less than expected moderation in food price inflation even in a normal monsoon year. There has also been a sharp increase in the prices of some food items due to transitory supply shocks. What is more worrying is the substantial increase in pr ice s of sever a l food items even though their production has not been affected. As a result, the usual moderation in vegetable prices in the winter season has not materialised.
35. Notably, high food price inflation is not unique to India. Food prices have spiked in many countries in the recent period. India is a large importer of certain food items such as edible oils, and the domestic food price situation could be exacerbated by the increase in global food prices. This, therefore, poses an additional risk to domestic food price inflation.
36. The second factor that will shape the inflation outlook is how global commodity prices behave. Prices of some commodities rose sharply in the recent period even as the global recovery was fragile. Should these trends continue, they will impact inflation, domestically and globally.
37. The third factor is the extent to which demand side pressures may manifest. This risk arises from three sources, viz., the spill-over of rising food inflation; rising input costs, particularly industrial raw materials and oil; and pressure on wages, both in the formal and informal sectors. The rise in food inflation has not only persisted for more than two years now, the increase has been rather sharp in the recent period. This cannot but have some spill-over effects on generalised inflation, particularly when the growth momentum is strong and both workers and producers are likely to have pricing power. There are indications that, in the corporate sector, the share of wages in total costs is increasing. The indexation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wages will also raise the wage rate in the agricultural sector. Further, besides oil, the prices of some primary non-food articles have risen sharply in the recent period. Since these are inputs into manufactured products, the risk to headline inflation is not only from the increase in non-food items but also because the increase in input costs will ultimately impact output prices. As the output gap closes, corporates will also be able to sustain higher output prices. In the absence of commensurate increase in capacity, there is the risk of demand side pressures accentuating.
38. In the Second Quarter Review of November 2010, the Reserve Bank set out the baseline projection of WPI inflation for March 2011 at 5.5 per cent, based on the new WPI series (2004-05=100). The Mid-Quarter Review of December 2010 indicated that the risks to inflation going forward were largely on the upside. Some of these risks have materialised as reflected in the increase in the prices of metals and non-administered fuel. There have also been some transitory supply shocks as reflected in the sharp increase in vegetable prices. In addition, petroleum and aviation turbine fuel prices were raised in early January which will add 9 bps to WPI inflation.
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While the impact of transitory factors is expected to wane, the price pressures on account of demand-supply imbalances in respect of some commodities will persist. Considering the increase that has already occurred and the emerging domestic and external scenario, the baseline projection of WPI inflation for March 2011 is revised upwards to 7.0 per cent from 5.5 per cent (Chart 2).
Monetary Aggregates
39. While the year-on-year money supply (M3) growth at 16.5 per cent in December 2010 was close to the indicative projection of 17 per cent, non-food credit growth at 24.4 per cent was much above the indicative projection of 20 per cent. Credit expansion in the recent period has been rather sharp, far outpacing the expansion in deposits. Rapid credit growth without a commensurate increase in deposits is not sustainable.
40. As a result of injection of primary liquidity of over `67,000 crore through OMO auctions since early November 2010, the structural liquidity deficit in the system has declined significantly. While the Reserve Bank will endeavour to provide liquidity to meet the productive credit requirements of a growing economy, it is important that credit growth moderates to conform broadly to the indicative projections. This will prevent any further build-up of demand side pressures. Accordingly, the projection for 2010-11 of M3 growth has been retained at 17 per cent and that for non-food credit growth at 20 per cent. As always, these numbers are indicative projections and not targets.
Risk Factors
41. The growth and inflation projections as outlined above are subject to several risks.
i) Food inflation has remained at an elevated level for more than two years now. It is not only that the moderation in food price inflation as expected during a normal monsoon year has not occurred to the extent expected, but also that there has been sharp unusual increase in prices. It is also significant that food inflation is not confined to a few items which were affected by unseasonal rains in some parts of the country but is fairly widespread across several food items. The inflation rates for primary articles and fuel items have risen sharply. Inflationary expectations remain at elevated levels. As high food inflation persists, the prospect of it spilling over to the general inflation process is rapidly becoming a reality.
ii) Non-food manufacturing inflation is persistent and has remained sticky in recent months as several industries are operating close to their capacity levels. Imports as a means to supplement domestic availability for many commodities will become less of an option as global growth consolidates and capacity utilisation increases. This may accentuate demand side pressures.
iii) India’s CAD has widened significantly. Although recent trade data suggest moderation of the trade deficit in the latter part of the year, overall CAD for 2010-11 is expected to be about 3.5 per cent of GDP. A CAD of this magnitude is not sustainable. Further, commodity prices, which rose sharply even when the global recovery was sluggish, may rise further if the global recovery is faster than expected. This has implications for both the CAD and inflation. There is, therefore, a need for concerted policy efforts to diversify exports and contain the CAD within prudent limits.
iv) Apart from the level of CAD, financing of CAD also poses a risk. Global growth prospects have improved significantly in the recent period. Should global recovery be faster than expected, it may also have implication for the financing of CAD. Capital flows, which so far have been broadly sufficient to finance the CAD, may be adversely affected. Faster than expected global re cover y may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of our external sector. Hence, the composition of capital inflows needs to shift towards longer-term commitments such as FDI.
v) The recent improvement in the fiscal situation has been mainly the result of one-off revenue generated from spectrum auctions. The Government also had the benefit of disinvestment proceeds, which may continue to occur for some more time. However, fiscal consolidation based on one-off receipts is not sustainable. As emphasised in the Second Quarter Review of November 2010, fiscal consolidation is important for several reasons, including the fact that monetary policy works most efficiently while dealing with an inflationary situation when the fiscal situation is under control. Apart from this, the commodity price developments that have been referred to earlier pose significant risks for fiscal consolidation in the year ahead. Rising oil prices will impact prices of both petroleum products and fertilisers. If the Government chooses to restrict the pass-through to consumers and farmers, it will have to make adequate budgetary provisions, which will constrain its ability to reduce the fiscal deficit. If it does not, either fiscal credibility will be undermined or inflationary expectations will be reinforced by the likelihood of higher prices of these key inputs, both of which will further complicate inflation management.
vi) The combined risks from inflation, the CAD and fiscal situation contribute to an increase in uncertainty about economic stability that consumers and investors will have to deal with. To the extent that this deters consumption and investment decisions, growth may be impacted. While slower growth may contribute to some dampening of inflation and a narrowing of the CAD, it can also have significant impact on capital inflows, asset prices and fiscal consolidation, thereby aggravating some of the risks that have already been identified.
III. The Policy Stance
42. The Reserve Bank began exiting from the crisis driven expansionary monetary policy as early as in October 2009. Since then, it has cumulatively raised the CRR by 100 bps, and the repo and reverse repo rates under the LAF by 150 and 200 bps, respectively. As the overall liquidity in the system has transited from a surplus to a deficit mode, the effective tightening in the policy rate has been of 300 bps. The monetary policy response was calibrated on the basis of India specific growth-inflation dynamics in the broader context of global uncertainty.
43. While the Reserve Bank decided to leave the policy rates unchanged in the Mid-Quarter Review of December 2010, developments on the inflation front since then have reinforced the already elevated concern in this regard. Accordingly, our monetary policy stance for the remaining period of 2010-11 has been guided by the following considerations:
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First, since the Second Quarter Review of November 2010, inflationary pressures, which were abating until then, have re-emerged significantly. Primary food articles inflation has risen again sharply after moderating for a brief period. Non-food articles and fuel inflation are already at elevated levels. Importantly, non-food manufacturing inflation has remained sticky. There are, therefore, signs of rapid food and fuel price increases spilling over into generalised inflation. As it is, there is some evidence of rising demand side pressures which are reflected in rapid bank credit growth, robust corporate sales and rising input and output prices, and buoyancy in tax revenues. The need, therefore, is to persist with measures to contain inflation and anchor inflationary expectations.
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Second, global commodity prices have risen sharply which has heightened upside risks to domestic inflation.
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Third, growth has moved close to its pre-crisis growth trajectory as reflected in the 8.9 per cent GDP growth in the first half of 2010-11, even in the face of an uncertain global recovery.
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Fourth, the global economic situation has improved in the recent period. The uncertainty with regard to global recovery, which was prevailing at the time of the Second Quarter Review, has reduced with the US economy showing signs of stabilising. Although uncertainty continues in the Euro area, there is an overall improvement in the global growth prospects.
44. To sum up, the current growth-inflation dynamics in the last few weeks suggest that the balance of risk has tilted towards intensification of inflation. In this scenario, the stance of the monetary policy is intended to :
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Contain the spill-over of high food and fuel inflation into generalised inflation and anchor inflationary expectations, while being prepared to respond to any further build-up of inflationary pressures.
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Maintain an interest rate regime consistent with price, output and financial stability.
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Manage liquidity to ensure that it remains broadly in balance, with neither a surplus diluting monetary transmission nor a deficit choking off fund flows.
45. It is important to emphasise that the role of monetary policy in the current inflationary situation is confined to containment and prevention of food and energy prices from spilling over into generalised inflation and anchoring inflation expectations. While energy prices are driven by global developments, the food price scenario is primarily a reflection of persistent structural constraints in the domestic agricultural sector. While these have been known and debated upon for a long time, the recent price dynamics highlight the need for rapid action to increase the output of a number of products, the demand for which is being driven by changing consumption patterns reflecting increasing incomes. Unless meaningful output enhancing measures are taken, the risks of food inflation becoming entrenched loom large and threaten both the sustainability of the current growth momentum and the realisation of its benefits by a large number of households.
46. Another challenge to effective management of inflation by monetary policy arises from the persistence of a large fiscal deficit. While the Government may succeed in raising receipts, both from high tax buoyancy and one-off sources, the real measure of fiscal consolidation lies in improving the quality of expenditure. If the Government is able to commit more resources to capital expenditure, it will help deal with some of the bottlenecks that contribute to supply-side inflationary pressures. With reference to revenue expenditure, while large and diffused subsidies may contribute in the short term to keeping supply-side inflationary pressures in check, they may more than offset this benefit by adding to aggregate demand.
IV. Policy Measures
Monetary Measures
47. On the basis of the current assessment and in line with the policy stance as outlined in Section III, the following monetary policy measures are announced.
Bank Rate
48. The Bank Rate has been retained at 6.0 per cent.
Repo Rate
49. It has been decided to:
- increase the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.25 per cent to 6.5 per cent with immediate effect.
Reverse Repo Rate
50. It has been decided to :
- increase the reverse repo rate under the LAF by 25 basis points from 5.25 per cent to 5.50 per cent with immediate effect.
Cash Reserve Ratio
51. The cash reserve ratio (CRR) of scheduled banks has been retained at 6.0 per cent of their net demand and time liabilities (NDTL).
Liquidity Management Measures
52. On the basis of an assessment of the current liquidity situation, it has been decided to extend the following liquidity management measures:
i) The additional liquidity support to scheduled commercial banks under the LAF to the extent of up to one per cent of their net demand and time liabilities (NDTL), currently set to expire on January 28, 2011, is now extended up to April 8, 2011. For any shortfall in maintenance of the SLR arising out of availment of this facility, banks may seek waiver of penal interest purely as an ad hoc measure.
ii) The second LAF (SLAF) will be conducted on a daily basis up to April 8, 2011.
53. The Reserve Bank will constantly monitor the credit growth and, if necessary, will engage with banks which show an abnormal incremental credit-deposit ratio.
Expected Outcomes
54. These actions are expected to:
(i) Contain the spill-over from rise in food and fuel prices to generalised inflation.
(ii) Rein in rising inflationary expectations, which may be aggravated by the structural and transitory nature of food price increases.
(iii) Be moderate enough not to disrupt growth.
(iv) Continue to provide comfort to banks in their liquidity management operations.
Guidance
55. Current growth and inflation trends warrant persistence with the anti-inflationary monetary stance. Looking beyond 2010-11, the Reserve Bank expects domestic growth momentum to stabilise, though the GDP growth rate may decline somewhat as agriculture reverts to its trend (assuming a normal monsoon). Inflation is likely to resume its moderating trend in the first quarter of 2011-12, but several upside risks are already visible in the global environment and more may surface domestically. The monetary stance will be determined by how these factors impact the overall inflationary scenario. For the fiscal consolidation process to be credible and effective, it is important that apart from augmenting revenue, the composition and quality of expenditure improves. Any slippage in the fiscal consolidation process at this stage may render the process of inflation management even harder.
56. The frictional liquidity shortage is expected to ease as government balances adjust to the expenditure schedule. However, banks need to focus on the underlying structural cause of liquidity tightness arising out of the gap between the credit and deposit growth rates.
Mid-Quarter Review of Monetary Policy
57. The next mid-quarter review of Monetary Policy for 2010-11 will be announced through a press release on March 17, 2011.
Monetary Policy 2011-12
58. The Monetary Policy for 2011-12 will be announced on Tuesday, May 3, 2011.
MILITARY TERMS
Aeronautics—Science of aerial navigation.
Aircraft carrier—A huge warship used for take-off and landing of war planes on the high-seas; it serves as a floating aerodrome.
Arsenal—A magazine or store for the storage of arms and military stores.
Amphibious tank—A tank which can run on land and float on water as well.
Amphibian aircraft—An aeroplane so designed that it can takeoff from and alight on either land or water.
Anti-Missile—An explosive missile launched to intercept and destroy another missile in flight.
Anti-Ballistic Missile (A.B.M.)—It is a device to destroy the guided missles of the enemy carrying nuclear war-head.
Anti-aircraft Defences—(1) Anti-aircraft guns, (2) Search light, (3) Black out, (4) Radar etc.
Bale out—To jump to the ground from an aeroplane by means of a parachute.
Battery—Set of guns for combined action.
Black Box—It is an apparatus which records the flight data of an aeroplane and is also a voice recorder.
Blockade—The stopping of supplies to a town or country to force it to surrender.
Bunker Blaster—It is a very powerful bomb which can pierce even a very strongly built bunker. The American forces used it in Gulf war-II in Iraq in March/April 2003.
Camouflage—A kind of covering to hoodwink the enemy e.g., use of screens, colours, tree branches etc. to conceal the troops or their movements.
Cockpit—Seat of the pilot in an aeroplane.
Cruiser—Fast warship that protects commerce in times of war, guards sea routes.
Depth Charges—Bombs dropped from aircraft on submerged submarines either by anti-submarine naval craft, which only explodes below the surface of water, at desired depths. Its radius is approximately 60 feet.
Embargo—Official restriction on exports to and imports from a particular country.
Espionage—Practice of spying by spies. It is a general practice of the countries to maintain an espionage ring in order to locate the military strategies of enemy country.
Flotilla—Small fleet of small ships.
Gestappo—A name for secret police of Germany, which ceased to exist in 1945.
Guerilla Warfare—Irregular war waged by small parties acting independently, to harass the enemy.
Junta—Factions or groups of individuals who capture political power by force or other non-constitutional means.
Mach—A unit of supersonic speed; I mach—760 miles per hour.
Neutron Bomb—Developed by the Energy Research and Development Administration (ERDA) of the U.S.A. The main characteristic of the bomb is that it kills people without destroying buildings or inanimate objects. France has already conducted a small neutron bomb explosion experiment.
Parachute—An umbrella like apparatus for coming down from aircraft is called parachute.
Quisling—Stands for a traitor. He was a Norwegian major, who deserted his own army and collaborated with the Germans during the World War II.
Repatriation—To restore or return to the native land. (Generally used in the case of prisoners of war).
Reconnaissance—Aerial, naval or military survey of enemy territory to locate enemy and to find out strategic positions.
RRR’ Bomb—It is an abbreviated form of ‘Reduced Residual Radiation’ bomb. The Energy Research and Development Administration of the U.S.A. has begun research on this new type of bomb which would produce increased heat and blast but reduced radioactive fall-out.
Seadog—An old and experienced sailor.
Supersonic aircraft—An aeroplane which can fly at speed greater than that of sound.
Tank—Heavily armoured vehicle driven by motor power having circular chains connecting the wheels on either side, containing crew and guns.
Tommy Gun—A self-loading rifle so called after its inventor John T. Thompson.
Torpedo Boat—A small swift warship specially designed to attack by discharging torpedoes.
Trench—A long narrow cut or ditch excavated in the earth as a defence against enemy fire.
Zero Hour—Expected time of attack in war. This term is also used to the period before a parliamentary session begins.LEAGL TERMS
Affidavit—A statement on oath for use as evidence in judicial proceedings.
Bye-Laws—These are special rules and regulations framed by any company or corporation for conducting its affairs, but they must not be repugnant to the laws of the land.
Certiorari—A writ to transfer a law suit from a lower court to a higher one.
Copyright—The exclusive right of an author invested in him for a period of fifty years.
Contempt of Court—Disregard for or disobedience of the judgment or orders of the court.
Covenant—In legal language means a promise or contract or agreement made under seal.
Decree—The decision or award of an arbitrator or court.
Easement—A legal term applied to a privilege enjoyed by any one over another's property.
Extradition—Delivering up of accused persons by one government to another—to hand over for trial or punishment to a foreign government.
Extra-territorial Right—These are enjoyed by diplomats, traders of other countries who through residing in a foreign country, are not subject to its laws. The British and Americans enjoyed these rights in China before 1949.
Injunction—Judicial process restraining a person from wrong act.
Mandamus—Writ issued by a superior court directing the state or inferior court, to whom it is issued, to perform some specified act pertaining to its office.
Perjury—The act of swearing falsely i.e., given evidence on oath which one knows to be false.
Plaintiff—One who brings a suit in a court of law.
Sedition—Speech or conduct tending to rebellion or breach of public order.
Summons—A writ of court commanding the attendance of a witness at a specified time and place.
Writ—A written command by the High Court or the Supreme Court directing the state or the court to act or abstain from acting in some way.
Will—Legal disposal of property on one’s death according to the written instructions of the deceased.
Bye-Laws—These are special rules and regulations framed by any company or corporation for conducting its affairs, but they must not be repugnant to the laws of the land.
Certiorari—A writ to transfer a law suit from a lower court to a higher one.
Copyright—The exclusive right of an author invested in him for a period of fifty years.
Contempt of Court—Disregard for or disobedience of the judgment or orders of the court.
Covenant—In legal language means a promise or contract or agreement made under seal.
Decree—The decision or award of an arbitrator or court.
Easement—A legal term applied to a privilege enjoyed by any one over another's property.
Extradition—Delivering up of accused persons by one government to another—to hand over for trial or punishment to a foreign government.
Extra-territorial Right—These are enjoyed by diplomats, traders of other countries who through residing in a foreign country, are not subject to its laws. The British and Americans enjoyed these rights in China before 1949.
Injunction—Judicial process restraining a person from wrong act.
Mandamus—Writ issued by a superior court directing the state or inferior court, to whom it is issued, to perform some specified act pertaining to its office.
Perjury—The act of swearing falsely i.e., given evidence on oath which one knows to be false.
Plaintiff—One who brings a suit in a court of law.
Sedition—Speech or conduct tending to rebellion or breach of public order.
Summons—A writ of court commanding the attendance of a witness at a specified time and place.
Writ—A written command by the High Court or the Supreme Court directing the state or the court to act or abstain from acting in some way.
Will—Legal disposal of property on one’s death according to the written instructions of the deceased.
POLITY TERMS
Ambassador—The highest diplomatic representative of one country in another.
Amnesty—A general pardon granted by a government to offenders from political or other criminal prosecution or punishment.
Apartheid—The policy of racial segregation followed by the white governments in South-Africa and Rhodesia (Zimbabwe).
Appeasement policy—Policy of a placating the hostile country and keeping at bay the forces of belligerency.
Armistice—Suspension of hostilities in order to negotiate for peace.
Autocracy—Absolute government in the hands of one person.
Attache—One attached to an ambassador’s suite, possessing special knowledge of the naval, military or commercial affairs.
Adult-Franchise—The right of vote given to all adults. This is also called adult-suffrage.
Bilateral Agreement—An agreement between two parties.
Biltzkrieg—German word meaning a lightning war; its three characteristics are;
Brain drain—A tendency on the part of intellectuals to settle in foreign countries where facilities for research and work are available in greater measure than in their own country.
Bicameral System—The form of legislature which has two houses, the upper and the lower.
Bolshevism—An alternative term used for communism in Russia.
By-election—It is mid term election caused by resignation or death of a member during the regular term of a legislature.
Cabinet form of Government—A form of government in which the executive is responsible to the legislature.
Continental System—A number of decrees issued by Nepolean by which he prohibited the European countries under his control from trading with England.
Condominium—It is a type or joint rules of a territory by two countries. Sudan was under Condominium of England and Egypt till 1955.
Casting Vote—The deciding vote of the President or Chairman when the number of votes on both sides are equal.
Cold War—Conflict of ideologies resulting in international tension short of ‘shooting war’. After the end of the 2nd World War there began an era of cold war between Superpowers U.S.A. and U.S.S.R.
Coup d’ etat—Sudden overthrowing of a Government by force.
Credentials—A letter entitling the bearer to credit of confidence. Credentials are presented by newly appointed ambassadors to the heads of the States to which they are accredited.
Demarche—A move, step or manoeuvre especially in diplomatic affairs whereby complaints or representation is made to a public authority. The government of India issued demarche to Pak Mission in India protesting against the Pak Mission Staff’s objectionable activities in India following terrorist attack on Indian Parliament in Dec. 2001.
Democracy—A form of government run by the elected representatives of the people.
Detente—A term used to denote relaxation or cessation of strained relations between states.
Dictatorship—A form of Government in which all power centres in one individual.
Dollar Diplomacy—Pursued by the U.S.A., the main object being to use dollars to promote its own economic interest.
Euro-Communism—It is the name of a new movement launched by the communist leaders of West Europe.
“Floor Crossing”—When a member of a political party leves his party and joins another in the legislature, he is said to have crossed the floor. This is also termed as “defection” of legislators from their parties.
Fourth State—It applies to the press, first used by Edmund Burke.
Fascism—A form of state which subordinates all aspects of the national life to itself.
Fifth Column—It applies to those who work clandestinely against the Government of their own country; they are sympathizers of the enemy.
Four Freedoms—Declared by President Roosevelt on Jan. 6, 1941 these are—
Genocide—Wilful and systematic extermination of a racial group or minority by passing repressive measures e.g. carried out by Hitler against the Jews; also carried out by Yahaya Khan the ex-President of Pakistan against the population of Bangla Desh.
Gun-Boat Diplomacy—It means, effort to exert political pressure through show of force.
High Commissioner—It is the designation given to the highest diplomatic representative of one Commonwealth country accredited to another Commonwealth country.
Iron Curtain—A political term referring to the U.S.S.R. and her satellites where there is no free flow of news.
Leftists—Relatively more progressive and radical party or wing in politics.
Liberalism—According to Prof. McGovern, it stands for a system of government in which there is freedom for the individual and government is run by the elected representatives of the people.
Marxism—Socialist doctrine based on the theories of Karl Marx a German Jew Socialist. According to Marx, human life in all its aspects is shaped by economic conditions and the history of the world is nothing but a history of war between classes—the haves and have-nots. In the capitalist society the rich become richer and the poor become poorer.
Nationalism—It is an intense feeling of love and devotion for one’s own country; excessive nationalism is called jingoism.
Nazism—The doctrine propounded by the Nazi Party led by Hitler in Germany. It aimed at aggressive nationalism, glorification of the German race and anti-semitism. Its agressive nationalism led to the World War II.
Open Door Policy—Admission, especially for commercial purposes, to the nationals of all countries on equal terms.
Ordinance—Is an act promulgated by the Head of a State in case of emergency when the legislature is not in session. It requires to be approved by the legislature within a specified period of the reassembly of the legislature.
Panchsheela—Five principles enunciated by the Late Prime Minister of India. Nehru and Chou-en-lai of People’s Republic of China in 1954 as the basis for international relations. These five principles are—
Plenipotentiary—An ambassador or envoy invested by the government with full powers, and deputed to act according to his discretion.
Plebiscite—Direct vote by all electors of a state on a controversial question.
Parliamentary Government—A form of Government in which the executive is responsible to the legislature.
Presidential Government—A form of government in which the President is the real executive and is not responsible to the legislature. This form of government is prevalent in the U.S.A. and many other South American States.
Preventive Detention—An act providing for measures by which an undesirable person may be detained without trial.
Privilege Motion—Is a motion moved by an M.L.A. or M.P. as the case may be, if he feels that a Minister has committed a breach of privilege of the House by withholding the facts of a case or by giving a distorted version of facts etc.
Referendum—A device by which all important laws and constitutional amendments passed by the legislature are referred to the vote of the electorate for their opinion. The people may ratify them or reject them. This procedure is mostly followed in Switzerland.
Republic—A country in which the Head of the States is elected by the people for a specified term and the government is run by the elected representatives of the people.
Rightist—The conservative wing of a political party is known as Rightists.
Rule of Law—It means that all persons irrespective of caste, colour, sex, religion or status are equal in the eyes of law and that the Government cannot exercise arbitrary powers.
Secularism—The policy of non-discrimination in matters of personal faiths and religions and having no particular official religion.
India is a secular state. Pakistan is a theocratic state whose official religion is Islam.
Socialism—It means the management and control of industry by the government in order to ensure equitable return for labour, to abolish competition and foster co-operation.
Sphere of influence—Countries or regions on which an outside power exercises passing control. The East European countries are under the sphere of influence of Russia.
Suffrage—The right or the exercise of the right of vote in political affairs.
Territorial Waters—The seas adjacent to a country over which it has an exclusive jurisdiction. The General Convention is that territorial rights extend for three miles form the coast lines measured from low water marks.
Third World—A sizeable non-aligned group of nations comprising the developing countries is known as the Third World. The countries exporting oil are now being referred to as constituting the Fourth World.
Totalitarianism—A belief in the complete centralisation of all powers of the state under-one political group, and suppression of other political organisations and rivals.
Unicameral—A legislature having a single house.
Veto—Right of executive Head to refuse to approve any legislation.
Welfare State—A state which seeks to ensure the welfare of the people through planned development.
Zionism—Literally pertaining to the Jews; this movement was started towards the end of the 19th century with the object of establishing a national home for the Jews in Palestine.
Amnesty—A general pardon granted by a government to offenders from political or other criminal prosecution or punishment.
Apartheid—The policy of racial segregation followed by the white governments in South-Africa and Rhodesia (Zimbabwe).
Appeasement policy—Policy of a placating the hostile country and keeping at bay the forces of belligerency.
Armistice—Suspension of hostilities in order to negotiate for peace.
Autocracy—Absolute government in the hands of one person.
Attache—One attached to an ambassador’s suite, possessing special knowledge of the naval, military or commercial affairs.
Adult-Franchise—The right of vote given to all adults. This is also called adult-suffrage.
Bilateral Agreement—An agreement between two parties.
Biltzkrieg—German word meaning a lightning war; its three characteristics are;
(1) suddeness of the attack,
(2) speed of the attack,
(3) volume of the attack.
Brain drain—A tendency on the part of intellectuals to settle in foreign countries where facilities for research and work are available in greater measure than in their own country.
Bicameral System—The form of legislature which has two houses, the upper and the lower.
Bolshevism—An alternative term used for communism in Russia.
By-election—It is mid term election caused by resignation or death of a member during the regular term of a legislature.
Cabinet form of Government—A form of government in which the executive is responsible to the legislature.
Continental System—A number of decrees issued by Nepolean by which he prohibited the European countries under his control from trading with England.
Condominium—It is a type or joint rules of a territory by two countries. Sudan was under Condominium of England and Egypt till 1955.
Casting Vote—The deciding vote of the President or Chairman when the number of votes on both sides are equal.
Cold War—Conflict of ideologies resulting in international tension short of ‘shooting war’. After the end of the 2nd World War there began an era of cold war between Superpowers U.S.A. and U.S.S.R.
Coup d’ etat—Sudden overthrowing of a Government by force.
Credentials—A letter entitling the bearer to credit of confidence. Credentials are presented by newly appointed ambassadors to the heads of the States to which they are accredited.
Demarche—A move, step or manoeuvre especially in diplomatic affairs whereby complaints or representation is made to a public authority. The government of India issued demarche to Pak Mission in India protesting against the Pak Mission Staff’s objectionable activities in India following terrorist attack on Indian Parliament in Dec. 2001.
Democracy—A form of government run by the elected representatives of the people.
Detente—A term used to denote relaxation or cessation of strained relations between states.
Dictatorship—A form of Government in which all power centres in one individual.
Dollar Diplomacy—Pursued by the U.S.A., the main object being to use dollars to promote its own economic interest.
Euro-Communism—It is the name of a new movement launched by the communist leaders of West Europe.
“Floor Crossing”—When a member of a political party leves his party and joins another in the legislature, he is said to have crossed the floor. This is also termed as “defection” of legislators from their parties.
Fourth State—It applies to the press, first used by Edmund Burke.
Fascism—A form of state which subordinates all aspects of the national life to itself.
Fifth Column—It applies to those who work clandestinely against the Government of their own country; they are sympathizers of the enemy.
Four Freedoms—Declared by President Roosevelt on Jan. 6, 1941 these are—
(i) Freedom of speech, (ii) Freedom of religion,
(iii) Freedom from want, (iv) Freedom from fear.
Genocide—Wilful and systematic extermination of a racial group or minority by passing repressive measures e.g. carried out by Hitler against the Jews; also carried out by Yahaya Khan the ex-President of Pakistan against the population of Bangla Desh.
Gun-Boat Diplomacy—It means, effort to exert political pressure through show of force.
High Commissioner—It is the designation given to the highest diplomatic representative of one Commonwealth country accredited to another Commonwealth country.
Iron Curtain—A political term referring to the U.S.S.R. and her satellites where there is no free flow of news.
Leftists—Relatively more progressive and radical party or wing in politics.
Liberalism—According to Prof. McGovern, it stands for a system of government in which there is freedom for the individual and government is run by the elected representatives of the people.
Marxism—Socialist doctrine based on the theories of Karl Marx a German Jew Socialist. According to Marx, human life in all its aspects is shaped by economic conditions and the history of the world is nothing but a history of war between classes—the haves and have-nots. In the capitalist society the rich become richer and the poor become poorer.
Nationalism—It is an intense feeling of love and devotion for one’s own country; excessive nationalism is called jingoism.
Nazism—The doctrine propounded by the Nazi Party led by Hitler in Germany. It aimed at aggressive nationalism, glorification of the German race and anti-semitism. Its agressive nationalism led to the World War II.
Open Door Policy—Admission, especially for commercial purposes, to the nationals of all countries on equal terms.
Ordinance—Is an act promulgated by the Head of a State in case of emergency when the legislature is not in session. It requires to be approved by the legislature within a specified period of the reassembly of the legislature.
Panchsheela—Five principles enunciated by the Late Prime Minister of India. Nehru and Chou-en-lai of People’s Republic of China in 1954 as the basis for international relations. These five principles are—
(1) Mutual respect for each other’s territorial integrity and sovereignty,
(2) Non-aggression,
(3) Non-interference in each other’s internal affairs,
(4) Equality and mutual benefit,
(5) Peaceful co-existence.
Plenipotentiary—An ambassador or envoy invested by the government with full powers, and deputed to act according to his discretion.
Plebiscite—Direct vote by all electors of a state on a controversial question.
Parliamentary Government—A form of Government in which the executive is responsible to the legislature.
Presidential Government—A form of government in which the President is the real executive and is not responsible to the legislature. This form of government is prevalent in the U.S.A. and many other South American States.
Preventive Detention—An act providing for measures by which an undesirable person may be detained without trial.
Privilege Motion—Is a motion moved by an M.L.A. or M.P. as the case may be, if he feels that a Minister has committed a breach of privilege of the House by withholding the facts of a case or by giving a distorted version of facts etc.
Referendum—A device by which all important laws and constitutional amendments passed by the legislature are referred to the vote of the electorate for their opinion. The people may ratify them or reject them. This procedure is mostly followed in Switzerland.
Recently one of such was held in Nepal. The new Iraqi Constitution was also put to referendum in October 2005.
Republic—A country in which the Head of the States is elected by the people for a specified term and the government is run by the elected representatives of the people.
Rightist—The conservative wing of a political party is known as Rightists.
Rule of Law—It means that all persons irrespective of caste, colour, sex, religion or status are equal in the eyes of law and that the Government cannot exercise arbitrary powers.
Secularism—The policy of non-discrimination in matters of personal faiths and religions and having no particular official religion.
India is a secular state. Pakistan is a theocratic state whose official religion is Islam.
Socialism—It means the management and control of industry by the government in order to ensure equitable return for labour, to abolish competition and foster co-operation.
Sphere of influence—Countries or regions on which an outside power exercises passing control. The East European countries are under the sphere of influence of Russia.
Suffrage—The right or the exercise of the right of vote in political affairs.
Territorial Waters—The seas adjacent to a country over which it has an exclusive jurisdiction. The General Convention is that territorial rights extend for three miles form the coast lines measured from low water marks.
Third World—A sizeable non-aligned group of nations comprising the developing countries is known as the Third World. The countries exporting oil are now being referred to as constituting the Fourth World.
Totalitarianism—A belief in the complete centralisation of all powers of the state under-one political group, and suppression of other political organisations and rivals.
Unicameral—A legislature having a single house.
Veto—Right of executive Head to refuse to approve any legislation.
Welfare State—A state which seeks to ensure the welfare of the people through planned development.
Zionism—Literally pertaining to the Jews; this movement was started towards the end of the 19th century with the object of establishing a national home for the Jews in Palestine.
Ante date—To give a date prior to that on which it is written, to any bill, cheque or any other document.
Appreciation of money—It is a rise in the price of money due to fall in the general price level.
Articles of Association—These are the rules and regulations elaborating the scope and method of conducting the business of a limited company.
Balance of trade—The balance between the imports and exports of a country is called balance of trade. If the imports are greater, the balance of trade is unfavourable; if the exports exceed the imports, the balance of trade is favourable.
Balance Sheet—It is statement of debits and credits maintained under broad heads by businessmen to find out the position of profit and loss at the end of a year.
Bank notes—Bank notes are promissory notes of a bank payable to the bearer on demand.
Bank rate—The rate at which the Central Bank will discount first class bills of exchange.
Bilateralism—It denotes a system of special trade and payments arrangement between two countries.
Bimetalism—A monetary system in which gold and silver are used, and coined at a fixed rate. Bimetalism was prevalent in the western countries until the first quarter of 19th century.
Budget—Is a statement of estimated income and expenditure of a state, company or corporation generally for the ensuing year.
Buyer’s Market—A market in which the supply of goods exceeds the demand, so the buyers play an active role in the determination of price and drive hard bargains.
Complementary Goods—Two goods X and Y are complementary goods if a change in the demand for one following a change in price affects similarly the demand for the other.
Co-operative Farming—A system of farming in which the farmers pool their land together and divide the produce among themselves in proportion to their land in the pool. They do not lose their proprietary rights in the land and they can withdraw their land from the pool whenever they wish after giving due notice.
Collective Farming—Practised mostly in communist countries. It differs from co-operative farming in so far as in it the farmers lose their proprietary rights and the land belongs to the state.
Death Duty—A kind of tax imposed on the property inherited at the death of its previous owner. It is also known as Estate Duty and it has been levied in India since 1953.
Deficit Financing—It is device to cover up the deficit money in budget by printing currency notes. In deficit financing there is a danger of money in circulation going up and leading to price rise. Adequate controls are necessary to be adopted to prevent its harmful effects. It proves useful in order to accelerate economic activity.
Devaluation—It is deliberate reduction in the value of the home currency in terms of foreign currency. It is resorted to in order to increase exports and reduce imports.
Economic Planning—It refers to a system wherein the economic resources of the country are exploited in a systematic and planned way in order to raise the standard of living of the people and reduce disparities.
Fiduciary Issue—Is the putting into circulation of paper money which has not been covered by any reserve of bullion.
Floating Debt—A short term debt by nature is a floating debt. That part of a national debt which is not a long-term debt is called a floating debt. It is the opposite of Funded debt which is for a long term.
Free Trade—A system of international trade wherein there are no restrictions or tariffs on imports and exports among different countries. Imports and exports are allowed duty free.
Gold Standard—It is a system of currency based on the free coinage of gold. It pre-supposes that the state will sell and buy gold at fixed price in terms of the local currency.
Hard Currency—It is the currency of a country in relation to which we have adverse balance of payments.
Hot Money—A new term used to describe money or currency which everybody is anxious to drop for fear of a fall in its exchange rate.
Index Number—A statistical method of indication variations in the price of essential commodites over a definite period of time.
Inflation—It is an increase in the quantity of money in circulation as a result of which the general price level goes up.
Laissez Faire—It is another name for individualistic theory where free initiative is allowed to private business and enterprise without intervention by the state.
Limited Company—It is one in which the responsibility of the shareholders is limited in proportion to the value of their shares in it.
Limited Liability—Liability of the shareholders of a company is limited to the extent of the value of their shares in it.
Mixed Economy—A system of planning wherein both public and private enterprise are afforded adequate opportunities of growth in their respective spheres. India is an example of such type of economy.
Operation Flood—The term refers to several measures taken by the Government to increase the supply of milk.
Preference Shares—Shares entitled to a fixed dividend before any distribution of profits can be made amongst the holders of ordinary shares.
Public Sector—A term generally applied to state enterprises or undertaking.
Recession—A state of affairs characterized by a slump in trade and industry leading to accumulation of unsold stocks owing to a fall in consumer demand is called a recession.
Rolling Plan, The—It is a term coined in the regime of Janata Party economists to introduce new type of planning strategy which will replace the Five Year and Annual Plans so far undertaken in India. Under the Rolling Plan the Planning Commission will revise the outlays and physical targets before a crisis. Under it there would be a full-fledged 5-Year Plan as in the past, but with the condition that every year a projection would be made for one extra year.
The newly constituted Planning Commission, decided to give up the concept of the rolling plan on April 21, 1980.
Sinking Fund—It is fund created by setting apart a portion of the revenues of a government with a view to paying off foreign loans.
State Trading—When the state undertakes the purchase and sale of certain commodities with a view to controlling their market price.
Sterling—It is the paper currency of England i.e., one pound currency note is called sterling.
Sterling Balances—It is a debt which Britain owed to many countries which participated in the World War II on Britain’s side. This debt had accumulated on account of the purchase made by Great Britain.
Turnover Tax—It is a tax levied every time a good finished or unfinished changes hands. It is thus cumulative sales tax.
Venture Capital—Also known as Risk Capital, it is the money supplied by stock holders.
Zero Net Aid—Refers to a stage where a country becomes self reliant so that it does not need any foreign aid.
Appreciation of money—It is a rise in the price of money due to fall in the general price level.
Articles of Association—These are the rules and regulations elaborating the scope and method of conducting the business of a limited company.
Balance of trade—The balance between the imports and exports of a country is called balance of trade. If the imports are greater, the balance of trade is unfavourable; if the exports exceed the imports, the balance of trade is favourable.
Balance Sheet—It is statement of debits and credits maintained under broad heads by businessmen to find out the position of profit and loss at the end of a year.
Bank notes—Bank notes are promissory notes of a bank payable to the bearer on demand.
Bank rate—The rate at which the Central Bank will discount first class bills of exchange.
Bilateralism—It denotes a system of special trade and payments arrangement between two countries.
Bimetalism—A monetary system in which gold and silver are used, and coined at a fixed rate. Bimetalism was prevalent in the western countries until the first quarter of 19th century.
Budget—Is a statement of estimated income and expenditure of a state, company or corporation generally for the ensuing year.
Buyer’s Market—A market in which the supply of goods exceeds the demand, so the buyers play an active role in the determination of price and drive hard bargains.
Complementary Goods—Two goods X and Y are complementary goods if a change in the demand for one following a change in price affects similarly the demand for the other.
Co-operative Farming—A system of farming in which the farmers pool their land together and divide the produce among themselves in proportion to their land in the pool. They do not lose their proprietary rights in the land and they can withdraw their land from the pool whenever they wish after giving due notice.
Collective Farming—Practised mostly in communist countries. It differs from co-operative farming in so far as in it the farmers lose their proprietary rights and the land belongs to the state.
Death Duty—A kind of tax imposed on the property inherited at the death of its previous owner. It is also known as Estate Duty and it has been levied in India since 1953.
Deficit Financing—It is device to cover up the deficit money in budget by printing currency notes. In deficit financing there is a danger of money in circulation going up and leading to price rise. Adequate controls are necessary to be adopted to prevent its harmful effects. It proves useful in order to accelerate economic activity.
Devaluation—It is deliberate reduction in the value of the home currency in terms of foreign currency. It is resorted to in order to increase exports and reduce imports.
Economic Planning—It refers to a system wherein the economic resources of the country are exploited in a systematic and planned way in order to raise the standard of living of the people and reduce disparities.
Fiduciary Issue—Is the putting into circulation of paper money which has not been covered by any reserve of bullion.
Floating Debt—A short term debt by nature is a floating debt. That part of a national debt which is not a long-term debt is called a floating debt. It is the opposite of Funded debt which is for a long term.
Free Trade—A system of international trade wherein there are no restrictions or tariffs on imports and exports among different countries. Imports and exports are allowed duty free.
Gold Standard—It is a system of currency based on the free coinage of gold. It pre-supposes that the state will sell and buy gold at fixed price in terms of the local currency.
Hard Currency—It is the currency of a country in relation to which we have adverse balance of payments.
Hot Money—A new term used to describe money or currency which everybody is anxious to drop for fear of a fall in its exchange rate.
Index Number—A statistical method of indication variations in the price of essential commodites over a definite period of time.
Inflation—It is an increase in the quantity of money in circulation as a result of which the general price level goes up.
Laissez Faire—It is another name for individualistic theory where free initiative is allowed to private business and enterprise without intervention by the state.
Limited Company—It is one in which the responsibility of the shareholders is limited in proportion to the value of their shares in it.
Limited Liability—Liability of the shareholders of a company is limited to the extent of the value of their shares in it.
Mixed Economy—A system of planning wherein both public and private enterprise are afforded adequate opportunities of growth in their respective spheres. India is an example of such type of economy.
Operation Flood—The term refers to several measures taken by the Government to increase the supply of milk.
Preference Shares—Shares entitled to a fixed dividend before any distribution of profits can be made amongst the holders of ordinary shares.
Public Sector—A term generally applied to state enterprises or undertaking.
Recession—A state of affairs characterized by a slump in trade and industry leading to accumulation of unsold stocks owing to a fall in consumer demand is called a recession.
Rolling Plan, The—It is a term coined in the regime of Janata Party economists to introduce new type of planning strategy which will replace the Five Year and Annual Plans so far undertaken in India. Under the Rolling Plan the Planning Commission will revise the outlays and physical targets before a crisis. Under it there would be a full-fledged 5-Year Plan as in the past, but with the condition that every year a projection would be made for one extra year.
The newly constituted Planning Commission, decided to give up the concept of the rolling plan on April 21, 1980.
Sinking Fund—It is fund created by setting apart a portion of the revenues of a government with a view to paying off foreign loans.
State Trading—When the state undertakes the purchase and sale of certain commodities with a view to controlling their market price.
Sterling—It is the paper currency of England i.e., one pound currency note is called sterling.
Sterling Balances—It is a debt which Britain owed to many countries which participated in the World War II on Britain’s side. This debt had accumulated on account of the purchase made by Great Britain.
Turnover Tax—It is a tax levied every time a good finished or unfinished changes hands. It is thus cumulative sales tax.
Venture Capital—Also known as Risk Capital, it is the money supplied by stock holders.
Zero Net Aid—Refers to a stage where a country becomes self reliant so that it does not need any foreign aid.
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