This is another high frequency area for many entrance tests, including all sort of management entrances, government services, PSUs; even interview boards ask questions on this. Questions from Indian economy has turned up in limited number in almost every question paper of various law entrances. That is hardly the only reason you need to read up on these topics. Remember that even recruiters ask these questions to law graduates. Having some idea about the economy is going to be very handy for almost anyone with any professional profile. Even those already in law schools will find this write up useful if they have lost touch with what is happening in the economic world.
What are the issues at the forefront of discussion these days?
1) The fall of dollar as a global currency: It was the normal practice for countries accross the globe to store up dollars to meet their international expenditure. India has a phenomenal stock pile of dollars, so does China. Given that the price of dollar is nose-diving, the value of these dollar stock piles are reducing.
What will happen now if India or China decides to sell off its dollar reserve (practically, some of it) to stock some other more stable currency like Euro? It already does so to an extent to reduce its exposure to price fluctuation of dollars, by having a basket of different currencies. Still, the mos significant portion is still in dollar, and if India decides to sell even half of these dollars to convert them into another currency, or even worse, china decides to do that, dollar is doomed! The price of dollar will fall even further, probably causing a panic in the International Currency Markets, triggering a crisis.
These apprehensions and what seems to be the fall of dollar from grace, has brought up some issues, making them important for your preparation. Read about them on the internet and keep an eye out for news about these things:
IMF, clearing houses, gold standard, foreign currency reserve, international debt, pegging of currency, Dubai financial crisis
2) BRIC nations emerging as new economic forces: This is supposedly happenning for a while now, but the economic downturn and the crisis of the financial giants has highlighted the strong fundamentals and also the potentials of these four countries. (DO you know which are the BRIC countries?
related issues: share of India in international trade, GDP (the concept and projected figures), recession, economic concepts related to demand and supply, Adam Smith, business cycles, Keynes, energy security
3) India has a new minister representing it in the WTO and international trade negotiations. Who is he? The earlier one used to be Kamal Nath, who famously opposed the agenda of the developed countries and gave indian barganing some teeth.
Related issues: Uruguay round, WTO, GATS, negotiations at WTO, least developed countries, Doha round, food security, agricultural market access, export subsidy, quantitative restrictions, subsidy in agriculture, most favoured nation, national treatment, regional trade agreements, technical barriers to trade, sanitary and phyto-sanitary measures, major indian exports (rice, tea, jute, sugercane, spices, coffee, cashew – read up the data and figures like Indian share in the inernational market, biggest exporting country in the world about these products)
4) Stock markets have been in the news a lot. While few will expect you to have comprehensive idea about stock markets, it will be a good idea to know what the following terms mean:
IPO, QIP, insider trading, liquidity, FII, FDI, mutual funds, bonds, security, stock, share, SEBI, capital market, levaraged transaction, mergers, acquisition
Ok, that's a lot to do. Good Luck! Please point out in your comments any issue I might have missed, I shall try and include them in the post.
What are the issues at the forefront of discussion these days?
1) The fall of dollar as a global currency: It was the normal practice for countries accross the globe to store up dollars to meet their international expenditure. India has a phenomenal stock pile of dollars, so does China. Given that the price of dollar is nose-diving, the value of these dollar stock piles are reducing.
What will happen now if India or China decides to sell off its dollar reserve (practically, some of it) to stock some other more stable currency like Euro? It already does so to an extent to reduce its exposure to price fluctuation of dollars, by having a basket of different currencies. Still, the mos significant portion is still in dollar, and if India decides to sell even half of these dollars to convert them into another currency, or even worse, china decides to do that, dollar is doomed! The price of dollar will fall even further, probably causing a panic in the International Currency Markets, triggering a crisis.
These apprehensions and what seems to be the fall of dollar from grace, has brought up some issues, making them important for your preparation. Read about them on the internet and keep an eye out for news about these things:
IMF, clearing houses, gold standard, foreign currency reserve, international debt, pegging of currency, Dubai financial crisis
2) BRIC nations emerging as new economic forces: This is supposedly happenning for a while now, but the economic downturn and the crisis of the financial giants has highlighted the strong fundamentals and also the potentials of these four countries. (DO you know which are the BRIC countries?
related issues: share of India in international trade, GDP (the concept and projected figures), recession, economic concepts related to demand and supply, Adam Smith, business cycles, Keynes, energy security
3) India has a new minister representing it in the WTO and international trade negotiations. Who is he? The earlier one used to be Kamal Nath, who famously opposed the agenda of the developed countries and gave indian barganing some teeth.
Related issues: Uruguay round, WTO, GATS, negotiations at WTO, least developed countries, Doha round, food security, agricultural market access, export subsidy, quantitative restrictions, subsidy in agriculture, most favoured nation, national treatment, regional trade agreements, technical barriers to trade, sanitary and phyto-sanitary measures, major indian exports (rice, tea, jute, sugercane, spices, coffee, cashew – read up the data and figures like Indian share in the inernational market, biggest exporting country in the world about these products)
4) Stock markets have been in the news a lot. While few will expect you to have comprehensive idea about stock markets, it will be a good idea to know what the following terms mean:
IPO, QIP, insider trading, liquidity, FII, FDI, mutual funds, bonds, security, stock, share, SEBI, capital market, levaraged transaction, mergers, acquisition
Ok, that's a lot to do. Good Luck! Please point out in your comments any issue I might have missed, I shall try and include them in the post.
A new economic crisis seems to be on the horizon regarding the debt structuring in Dubai, coming to light with Dubai asking for an extension of the loan entered into by it, primarily for funding its ambitious real estate projects. Apparantly, there are reasons to believe that it may culminate into a major sovereign default. The impact of the debt crisis cannot be forecast at this point. Our Finance Minister assures us that we are not to be affected much tahnks to the limited exposure of the Indian banking system to th Dubai financial system in terms of FDI (foreign direct investment, in case you're wondering). But we know all too well that often the issues are much more complicated, and in a crisis, the innocuous snowball has an uncomfortable tendency to transform into something quite formidable.
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