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Introduction to Accounting

• Accounting – Meaning, Objectives, Accounting as source of information, Internal and External users of accounting information and their needs.
• Qualitative Characteristics of Accounting Information – Reliability, Relevance, Understandability and Comparability.
• Basic Accounting Terms – Asset, Liability, Capital, Expense, Income, Expenditure, Revenue, Debtors, Creditors, Goods, Cost, Gain, Stock, Purchase, Sales, Loss, Profit, Voucher, Discount, Transaction, Drawings.

Theory Base of Accounting

• Accounting Principles – Meaning and Nature..
• Accounting Concepts: Entity, Money Measurement, Going Concern, Accounting Period, Cost Concept, Dual Aspect, Revenue Recognition (Realisation), Matching, Accrual, Full Disclosure, Consistency, Conservatism, Materiality..
• Accounting Standards – Concept and List of Indian Accounting Standards..
• Accounting Mechanism – Single Entry and Double Entry..
• Bases of Accounting – Cash Basis, Accrual Basis.

Recording of Business Transactions

• Voucher and Transactions: Origin of Transactions – Source documents and Vouchers, Preparation of vouchers; Accounting equation approach – Meaning and Analysis of transactions using accounting equation; Rules of debit and credit.
• Recording of Transactions: Books of original entry – Journal, Special purpose books: (i) Cash book – Simple, Cashbook with bank column and Petty cashbook, (ii) Purchases book, Sales book, Purchases returns book, Sale returns book; Ledger: Meaning, Utility, Format; Posting from journal and subsidiary books; Balancing of accounts.
• Bank Reconciliation Statement: Meaning, Need and Preparation, Correct cash balance.

Trial Balance and Rectification of Errors

• Trial Balance: Meaning, Objectives and Preparation.
• Errors: Types of Errors; Errors affecting trial balance; Errors not affecting trial balance.
• Detection and Rectification of Errors (one sided and two sided); uses of suspense account.

Depreciation, Provisions and Reserves

• Depreciation: Meaning and Need for charging depreciation, Factors affecting depreciation, Methods of depreciation — Straight line method, Written down value method (excluding change in method), Method of recording depreciation – charging to asset account, creating provision for depreciation/ accumulated depreciation account; Treatment of disposal of an asset.
• Provisions and Reserves: Meaning, Importance, Difference between provisions and reserves, Types of reserves: Revenue reserve, Capital reserve, General reserve, Specific reserve and Secret reserve.

Accounting for Bills of Exchange Transactions

• Bills of exchange and Promissory note: Definition, Features, Parties, Specimen and Distinction.
• Important Terms: Term of Bill, Concept of Accommodation Bill, Days of grace, Date of maturity, Bill after date, Negotiation, Endorsement, Discounting of bill, Dishonour, Retirement and Renewal of a bill.
• Accounting treatment of bill transactions.

Financial Statements

• Financial Statements: Meaning and Users.
• Distinction between capital expenditure and revenue expenditure.
• Trading and Profit and Loss Account: Gross profit, Operating profit, Net profit.
• Balance Sheet: Need, Grouping, Marshalling of assets and liabilities, Vertical presentation of financial statement.
• Adjustments in preparation of financial statements with respect to Closing stock, Outstanding expenses, Prepaid expenses, Accrued income, Income received in advance, Depreciation, Bad debts, Provision for doubtful debts, Provision for discount on debtors, Managers’ commission.
• Preparation of trading and profit and loss account and balance sheet of sole proprietorship.

Accounts from Incomplete Records

• Incomplete Records: Meaning, Uses and Limitations.
• Ascertainment of profit/loss by Statement of Affairs method.
• Preparation of trading and profit and loss account and balance sheet.
• Ascertaining missing figures in Total debtors account, Total creditors account, Bill receivables, Bills payables and Cash book and Opening statement of affairs.

Computers in Accounting :-

• Introduction to Computer and Accounting Information System (AIS).
• Applications of computers in accounting:
– Automation of accounting process, designing accounting reports, MIS reporting, data exchange with other information systems.
• Comparison of accounting processes in manual and computerised accounting, highlighting advantages and limitations of automation.
• Sourcing of accounting system: Readymade and customised and tailor-made accounting system. Advantages and disadvantages of each option.

Accounting and Database System :-

• Accounting and Database Management System.
• Concept of Entity and Relationship: Entities and relationships in an Accounting System:
Designing and Creating Simple Tables, Forms, Queries and Reports in the context of accounting system.

Accounting for Not-for-Profit Organisations and Partnership Firms

Accounting Not-for-Profit Organisation

• Not-for-profit organisation: Meaning and Examples.
• Receipts and Payments: Meaning and Concept of fund based and non-fund based accounting.
• Preparation of Income and Expenditure account and Balance sheet from receipt and payment account with additional information.

Accounting for Partnership

• Nature of Partnership Firm: Partnership deed (meaning, importance).
• Final Accounts of Partnership: Fixed v/s Fluctuating capital, Division of profit among partners, Profit and Loss Appropriation account.

Reconstitution of Partnership

Changes in profit sharing ratio among the existing partners – Sacrificing ratio and Gaining ratio.
• Accounting for Revaluation of Assets and Liabilities and Distribution of reserves and accumulated profits.
• Goodwill: Nature, Factors affecting and Methods of valuation: Average profit, Super profit, Multiplier and Capitalisation methods.
• Admission of a Partner: Effect of admission of partner, Change in profit sharing ratio, Accounting treatment for goodwill, Revaluation of assets and liabilities, Reserves (accumulated profits) and Adjustment of capitals.
• Retirement/Death of a Partner: Change in profit sharing ratio, Accounting treatment of goodwill, Revaluation of assets and liabilities, Adjustment of accumulated profits (Reserves).

Dissolution of Partnership Firm

• Meaning, Settlement of accounts: Preparation of realisation account and related accounts (excluding piecemeal distribution, sale to a company and insolvency of a Spartner)

Company Accounts and Financial Statement Analysis

Accounting for Share and Debenture Capital

• Share Capital: Meaning, Nature and Types.
• Accounting for Share Capital: Issue and Allotment of Equity and Preference Shares; Over subscription and Under subscription; Issue at par, premium and at discount; Calls in advance, Calls in arrears, Issue of shares for consideration other than cash.
• Forfeiture of Shares: Accounting treatment, Re-issue of forfeited shares.
• Presentation of shares and Debentures Capital in company’s balance sheet.
• Issue of Debenture – At par, premium and discount; Issue of debentures for consideration other than cash.
• Redemption of debenture.
• Out of proceeds of fresh issue, accumulated profits and sinking fund.

Analysis of Financial Statements

• Financial Statements of a Company: Preparation of simple financial statements of a company in the prescribed form with major headings only.
• Financial Analysis: Meaning, Significance and Purpose, Limitations.
• Tools for Financial Analysis: Comparative statements, Common size statements.
• Accounting Ratios: Meaning and Objectives, Types of ratios:
Liquidity Ratios: Current ratio, Liquidity ratio.
Solvency Ratio: Debt to equity, Total assets to debt, Proprietary ratio.
Activity Ratio: Inventory turnover, Debtors turnover, Payables turnover, Working capital turnover, Fixed assets turnover, Current assets turnover.
Profitability Ratio: Gross profit, Operating ratio, Net profit ratio, Return on Investment, Earning per Share, Dividend per Share, Profit Earning ratio.

Statement of Changes in Financial Position

• Cash Flow Statement: Meaning and Objectives, Preparation, Adjustments related to depreciation, dividend and tax, sale and purchase of non-current assets (as per revised standard issued by ICAI).

Computerised Accounting System

Overview of Computerised Accounting System

• Concept and Types of Computerised Accounting System (CAS).
• Features of a Computerised Accounting System.
• Structure of a Computerised Accounting System.

Using Computerised Accounting System

• Steps in installation of CAS, Preparation of chart of accounts, Codification and Hierarchy of account heads.
• Data entry, Data validation and Data verification.
• Adjusting entries, Preparation of financial statements, Closing entries and Opening entries.
• Security of CAS and Security features generally available in CAS (Students are expected to understand and practise the entire accounting process using an accounting package.)

Accounting Using Database Management System (DBMS)

• Concepts of DBMS.
• Objects in DBMS: Tables, Queries, Forms, Reports.
• Creating data tables for accounting.
• Using queries, forms and reports for generating accounting information. Applications of DBMS in generating accounting information such as shareholders’ records, sales reports, customers’ profile, suppliers’ profile payroll, employees’ profile, petty cash register.

Accounting Applications of Electronic Spreadsheet

• Concept of an Electronic Spreadsheet (ES).
• Features offered by Electronic Spreadsheet.
• Applications of Electronic Spreadsheet in generating accounting information, preparing depreciation schedule, loan repayment schedule, payroll accounting and other such applications.

Foundations of Business

Nature and Purpose of Business

• Concept and characteristics of business.
• Business, profession and employment – distinctive features.
• Objectives of business – economic and social, role of profit in business.
• Classification of business activities: Industry and Commerce.
• Industry – types: primary, secondary, tertiary.
• Commerce: Trade and Auxiliaries.
• Business risks – nature and causes.

Forms of Business Organisation

• Sole Proprietorship; Joint Hindu Family Business – meaning, features, merits and limitations.
• Partnership – meaning, types, registration, merits, limitations, types of partners.
• Cooperative Societies – types, merits and limitations.
• Company: Private Ltd., Public Ltd – merits, limitations.
• Choice of form of business organisations.
• Starting a business – Basic factors.

Private, Public and Global Enterprises

• Private Sector and Public Sector.
• Forms of Organising public sector enterprises:
– Departmental Undertaking
– Statutory Corporation
– Government Company
• Changing role of public sector.
• Global Enterprises (Multinational Companies): meaning and features.
• Joint ventures — meaning, benefits.

Business Services

• Nature and types of Business services — Banking, Insurance, Transportation, Warehousing, Communication.
• Banking — types of Banks, Functions of Commercial banks, E-banking.
• Insurance: principles, types: life, fire and marine.
• Postal and Telecom services.
• Warehousing: types and functions.

Emerging Modes of Business

• E-Business — Meaning, scope and benefits, Resources required for successful e-business implementation, On-line transactions, payment mechanism, security and safety of business transactions.
• Outsourcing — concept, need and scope.

Social Responsibility of Business and Business Ethics

• Concept of social responsibility;
• Case for social responsibility;
• Responsibility towards different interest groups: owners, investors, employees, consumers, government, community and public in general;
• Business and environmental protection;
• Business ethics: concept and elements.

Corporate Oganisation, Finance and Trade

Formation of a Company

Stages in the formation of a company:
• Promotion,
• Incorporation, and
• Commencement of business.

Sources of Business Finance

• Nature and significance
• Financial requirements and sources: owners funds and borrowed funds
• Methods of raising Finance:
– Equity and Preference shares
– Debentures and Bonds
– Retained profits
– Public deposits
– Loan from Commercial Banks
– Loan from Financial Institution
– Trade Credit
– Discounting of Bills of Exchange
– Global Depository Receipt, American Depository Receipt

Small Business

• Small Scale Industry; Tiny Sector; cottage and rural industry;
• Role of small business in rural India;
• Problems of small business in India.
• Government Assistance and Special Schemes for Industries in rural, backward and hilly areas.

Foundations of BusinesInternal Trade

• Meaning and types of internal trade: wholesale and retail;
• Services of a wholesaler and a retailer.
• Types of Retail Trade:
– Itinerant retailers and fixed shops.
– Departmental store, super market, malls, chain store, mail order business, consumer’s cooperative store
– Automatic Vending Machine
• Role of Chambers of Commerce and Industry in promotion of internal trade.

International Business

• Nature, Importance, scope and complexities involved in International Business;
• Basic information about ways of entering into International Business;
• Contract manufacturing; licensing; franchising; Joint ventures and Setting up Wholly Owned Subsidies;
• Export-Import procedures and Documentation;
• Foreign Trade Promotion: Organisational Support and Incentives; Nature and Importance of Export Processing Zone/Special Economic Zones;
• International Trade Institutions and Agreement: WTO, UNCTAD, World Bank/IMF.

Principles and Functions of Management

Nature and Significance of Management

• Management – concept, objectives, importance.
• Nature of management; Management as Science, Art, Profession.
• Levels of management – top, middle supervisory (First level).
• Management functions – planning, organising, staffing, directing and controlling.
• Coordination – nature and importance.

Principles of Management

• Principles of Management – meaning, nature and significance.
• Fayol’s principles of management.
• Taylor’s Scientific Management – Principles and Techniques.

Business Environment

• Business Environment – meaning and importance.
• Dimensions of Business Environment – Economic, Social, Technological, Political and Legal.
• Economic Environment in India; Impact of Government policy changes on business and industry, with special reference to adoption of the policies of liberalization privatization and globalisation.

Planning

• Meaning, features, importance, limitations.
• Planning process.
• Types of Plans – Objectives, Strategy, Policy, Procedure, Method, Rule, Budget, Programme.

Organising

• Meaning and importance.
• Steps in the process of organising.
• Structure of organization – functional, and divisional.
• Formal and informal organisation.
• Delegation: meaning elements and importance.
• Decentralization: meaning and importance.
• Difference between delegation and decentralisation.

Staffing

• Meaning, need and importance of staffing.
• Staffing as a part of Human Resources Management.
• Steps in staffing process.
• Recruitment – meaning and sources.
• Selection – meaning and process.
• Training and Development – meaning, need, methods – on the job and off the job methods of training.

Directing

• Meaning, importance and principles.
• Elements of Direction:
– Supervision – meaning and importance
– Motivation – meaning and importance, Maslow’s hierarchy of needs; Financial and nonfinancial incentives.
– Leadership – meaning, importance; qualities of a good leader.
– Communication – meaning and importance, formal and informal communication; barriers to effective communication.

Controlling

• Meaning and importance.
• Relationship between planning and controlling.
• Steps in the process of control.
• Techniques of controlling.

Business Finance and Marketing

Business Finance

• Business finance – meaning, role, objectives of financial management.
• Financial planning – meaning and importance.
• Capital Structure – meaning and factors.
• Fixed and Working Capital – meaning and factors affecting their requirements.

Financial Markets

• Concept of Financial Market: Money Market – nature instruments;
• Capital market: nature and types – primary and secondary market.
• Distinction between capital market and money market.
• Stock Exchange – meaning, functions, NSEI, OCTEI, Trading Procedure.
• Securities and Exchange Board of India (SEBI) – Objectives, Functions.

Marketing

• Marketing – meaning, functions, role.
• Distinction between marketing and selling.
• Marketing mix – concept and elements:
– Product – nature, classification, branding, labeling and packaging
– Physical distribution: meaning, role; Channels of distribution, – meaning, types, factors, determining choice of channels.
– Promotion – meaning and role, promotion mix, Role of Advertising and personal selling; objections to Advertising.
– Price: factors influencing pricing.

Consumer Protection

• Importance of consumer protection.
• Consumer rights.
• Consumer responsibilities.
• Ways and means of consumer protection – Consumer awareness and legal redressal with special reference to Consumer protection Act.
• Role of consumer organizations and NGOs.

Entrepreneurship Development

• Concept, Functions and Need.
• Entrepreneurship Characteristics and Competencies.
• Process of Entrepreneurship Development.
• Entrepreneurial Values, Attitudes and Motivation – Meaning and Concept

s

Nature and Purpose of Business

• Concept and characteristics of business.
• Business, profession and employment – distinctive features.
• Objectives of business – economic and social, role of profit in business.
• Classification of business activities: Industry and Commerce.
• Industry – types: primary, secondary, tertiary.
• Commerce: Trade and Auxiliaries.
• Business risks – nature and causes.

Forms of Business Organisation

• Sole Proprietorship; Joint Hindu Family Business – meaning, features, merits and limitations.
• Partnership – meaning, types, registration, merits, limitations, types of partners.
• Cooperative Societies – types, merits and limitations.
• Company: Private Ltd., Public Ltd – merits, limitations.
• Choice of form of business organisations.
• Starting a business – Basic factors.

Private, Public and Global Enterprises

• Private Sector and Public Sector.
• Forms of Organising public sector enterprises:
– Departmental Undertaking
– Statutory Corporation
– Government Company
• Changing role of public sector.
• Global Enterprises (Multinational Companies): meaning and features.
• Joint ventures — meaning, benefits.

Business Services

• Nature and types of Business services — Banking, Insurance, Transportation, Warehousing, Communication.
• Banking — types of Banks, Functions of Commercial banks, E-banking.
• Insurance: principles, types: life, fire and marine.
• Postal and Telecom services.
• Warehousing: types and functions.

Emerging Modes of Business

• E-Business — Meaning, scope and benefits, Resources required for successful e-business implementation, On-line transactions, payment mechanism, security and safety of business transactions.
• Outsourcing — concept, need and scope.

Social Responsibility of Business and Business Ethics

• Concept of social responsibility;
• Case for social responsibility;
• Responsibility towards different interest groups: owners, investors, employees, consumers, government, community and public in general;
• Business and environmental protection;
• Business ethics: concept and elements.

Corporate Oganisation, Finance and Trade

Formation of a Company

Stages in the formation of a company:
• Promotion,
• Incorporation, and
• Commencement of business.

Sources of Business Finance

• Nature and significance
• Financial requirements and sources: owners funds and borrowed funds
• Methods of raising Finance:
– Equity and Preference shares
– Debentures and Bonds
– Retained profits
– Public deposits
– Loan from Commercial Banks
– Loan from Financial Institution
– Trade Credit
– Discounting of Bills of Exchange
– Global Depository Receipt, American Depository Receipt

Small Business

• Small Scale Industry; Tiny Sector; cottage and rural industry;
• Role of small business in rural India;
• Problems of small business in India.
• Government Assistance and Special Schemes for Industries in rural, backward and hilly areas.

Statistics for Economics

In this course, the learners are expected to acquire skills in collection, organisation of quantitative and qualitative information pertaining to various, but simple, economic aspects systematically. It also intends to provide some basic statistical tools to analyse and interpret any economic information and draw appropriate inferences. In this process, the learners are also expected to understand the behaviour of various economic data.

Introduction

• What is Economics?
• Meaning, scope and importance of statistics in Economics.

Collection and Organisation of Data

• Collection of data: Sources of data – primary and secondary; how basic data is collected; methods of collecting data.
• Some important sources of secondary data: Census of India and National Sample Survey Organisation.
Organisation of Data: Meaning and types of variables; frequency distribution.
Presentation of Data : Tabular presentation of data and diagrammatic presentation of data:
(i) Geometric forms (bar diagrams and pie diagrams),
(ii) Frequency diagrams (histogram, polygon and ogive) and
(iii) Arithmetic line-graphs (time series graph).

Statistical Tools and Interpretation

• Measures of Central Tendency – mean (simple and weighted), median and mode.
• Measures of Dispersion – absolute dispersion (range, quartile deviation, mean deviation and standard deviation); relative dispersion (co-efficient of quartile deviation, co-efficient of mean deviation and co-efficient of variation); Lorenz Curve: Meaning and its application.
• Correlation – meaning, scatter diagram; Measures of correlation – Karl Pearson’s method (two variables ungrouped data) and Spearman’s rank correlation.
• Introduction to Index Numbers – meaning, types – wholesale price index, consumer price index and index of industrial production, uses of index numbers; Inflation and index numbers. (For all the numerical problems and solutions, the appropriate economic interpretation may be attempted. This means that students need to solve the problems and provide interpretations for the results derived.)

Developing Projects in Economics

The students may be encouraged to develop projects which have primary data, secondary data or both. Case studies of a few organisations/outlets may also be encouraged. Some of the examples of the projects are as follows (they are not mandatory but suggestive):
(i) A report on the demographic structure of your neighbourhood;
(ii) Consumer awareness amongst households;
(iii) Changing prices of a few vegetables in your market;
(iv) Study of a cooperative institution: milk cooperatives.
The idea behind introducing this unit is to enable the students to acquire ways and means by which a project can be developed by using the skills learned in the course. This includes all the steps involved in designing a project: choosing a title, exploring the information relating to the title, collecting primary and secondary data, analysing the data, presenting the project and using various statistical tools and their interpretation and conclusion.
Instructions to the textbook writers
(i) examples will have to be provided from simple economic data. The learners should not have any problem in understanding the economic data provided in those examples. Besides arriving at results using formulae of various statistical tools, the learners are also expected to interpret the results. So care must be taken to provide very simple economic information, which the learners can understand without knowing the conceptual meaning in depth
(ii) many multiple choice questions can be used in the textbook.

Indian Economic Development

One of the objectives of this course is to provide the learners with a background discussion on some of the key issues relating to the Indian economy. In this process, they are, as citizens, expected to be sensitised about those issues, appreciate and critically assess the role of the government in various economic spheres. This course also gives opportunities for knowing the economic resources available and how these resources are being utilised in different sectors. By exposing them to quantitative data on various economic aspects and policies, the learners would also be able to use their analytical skills, interpret the economic events and visualise the economic future of India. Nevertheless, this would not tantamount to burdening the child with concepts and data. By comparing India’s economic performance with our neighbouring nations, this course also provides opportunities for knowing where we stand today – as a nation. With regard to various economic issues and trends, this course also provides the scope for alternative views and creates opportunities for the learners to debate. When they complete the course, the learners should be able to understand the economic realities that appear in various media.

Development Policies and Experience (1947-90)

• A brief introduction of the state of the Indian economy on the eve of independence
• Common goals of five year plans
• Main features, problems and policies of agriculture (institutional aspects and new agricultural strategy, etc.), industry (industrial licensing, etc.) and foreign trade

Economic Reforms since 1991

• Need and main features — liberalisation, globalisation and privatisation
• An appraisal of LPG policies

Current Challenges Facing Indian Economy

Poverty: Absolute and relative; main programmes for poverty alleviation: a critical assessment
Rural development: Key issues – credit and marketing – role of cooperatives; agricultural
diversification; alternative farming – organic farming
Human capital formation: How people become a resource; role of human capital in economic development; growth of education sector in India
Employment: Growth, informalisation and other issues: problems and policies.
Infrastructure: Meaning and types; case studies: energy and health — problems and policies — a critical assessment.
Environment: Sustainable economic development; limited availability of resources; environmental degradation.

Development Experience of India: A Comparison with Neighbours

• India and Pakistan
• India and China
Issues: Growth, population, sectoral development and other developmental indicators
Note to textbook writers: Since this course is expected to create opportunities for learners to know about various aspects of the Indian economy, there is a need to provide information in an interesting manner. To the extent possible, data in long tabular form should be avoided. Instead, different forms of diagrams and charts, pictures and maps could be used. Since the learners study this course for the first time, those economic concepts which are used in this course, could be explained in a simple manner. Sensitising the learner towards various issues such as poverty, environmental degradation and gender concerns also forms a part of this course; many real examples in simple ways could be used.

Introductory Microeconomics

This course introduces the learner to economics as a science of abstraction and reasoning. It introduces some basic concepts and tools to understand economic issues of an individual or a firm and how decisions are taken in variety of markets. It also intends to provide exposure to the learners on how choices are made and how a variety of statistical tools are used to optimally allocate the resources.

Introduction

• What is microeconomics?
• Central problems of an economy, production possibility curve and opportunity cost.

Consumer Behaviour and Demand

• Consumer’s Equilibrium: meaning and attainment of equilibrium through Utility Approach: One and two commodity cases.
• Demand: market demand, determinants of demand, demand schedule, demand curve, movement along and shifts in demand curve, price elasticity of demand, measurement of price elasticity of demand – percentage, total expenditure and geometric methods

Producer Behaviour and Supply

• Production function: returns to factor and returns to scale
• Supply: market supply, determinants of supply, supply schedule, supply curve movement along and shifts in supply curve, price elasticity of supply, measurement of price elasticity of supply – percentage and geometric methods
• Cost and Revenue: Concepts of costs; short-run cost curves (fixed and variable costs; total, average and marginal costs); concepts of revenue – total, average and marginal revenue and their relationship.
Producer’s equilibrium – with the help of MC and MR.

Forms of Market and Price Determination

• Forms of market – perfect competition, monopoly, monopolistic competition – their meaning and features.
• Price determination under perfect competition – equilibrium price, effects of shifts in demand and supply.

Simple Applications of Tools of Demand and Supply Curves

The teachers can be given the flexibility to choose the issues: rationing, floors and ceilings and Food Availability Decline (FAD) Theory (the teachers may also choose alternative examples that are simple and easy to understand)
Note to textbook writers: More examples from day-to-day context could be given. More numerical examples (solved) will have to be given. Use of pictures, charts and simple tables is essential.

Introductory Macroeconomics

The overall working of an economy and some of its economic theorisation are introduced in this course. The learners will get some basic idea of how the government regulates the functioning of economic aspects of a country through accounting of the production activities, running financial institutions, budgeting and the accounting of its economic interaction with other countries. The impact it will have on citizens is also briefly introduced.

National Income and Related Aggregates — Basic Concepts and Measurement

• Macroeconomics: meaning.
• Circular flow of income, concepts of GDP, GNP, NDP, NNP (at market price and factor cost), National Disposable Income (gross and net); Private Income, Personal Income and Personal Disposable Income
• Measurement of National Income –Value Added method, Income method and Expenditure method

Determination of Income and Employment

• Aggregate demand, aggregate supply and their components
• Propensity to consume and propensity to save (average and marginal)
• Meaning of involuntary unemployment and full employment
• Determination of income and employment: two sector model
• Concept of investment multiplier and its working
• Problems of excess and deficient demand
• Measures to correct excess and deficient demand – availability of credit, change in government spending

Money and Banking

• Money: meaning, evolution and functions
• Central bank: meaning and functions
• Recent significant reforms and issues in Indian Banking System: privatisation and modernisation

Government Budget and the Economy

• Government budget – meaning and its components
• Objectives of government budget
• Classification of receipts – revenue and capital; classification of expenditure – revenue and capital, plan and non-plan, and developmental and non-developmental
• Balanced budget, surplus budget and deficit budget: meaning and implications
• Revenue deficit, fiscal deficit and primary deficit: meaning and implications; measures to contain different deficits
• Downsizing the role of government: meaning and implications

Balance of Payments

• Foreign exchange rate – meaning (fixed and flexible), merits and demerits; determination through demand and supply
• Balance of payments accounts – meaning and components
• A brief analysis about recent exchange rate issues

Note to textbook writers:

Since this course will take the learner to a higher level of abstraction, there
is a need to provide more examples from day-to-day context. More numerical examples (solved) will have to be given. Use of pictures, charts and simple tables is essential.