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Monetary & Fiscal System

This document discusses India's monetary and fiscal systems as well as its credit structure. It outlines various public and private financial institutions that provide credit to different sectors. It also describes tools for quantitative and qualitative credit control. Additionally, it explains key aspects of India's fiscal system including sources of public revenue and expenditure as well as the federal finance system between central and state governments.

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Pravah Shukla
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51 views17 pages

Monetary & Fiscal System

This document discusses India's monetary and fiscal systems as well as its credit structure. It outlines various public and private financial institutions that provide credit to different sectors. It also describes tools for quantitative and qualitative credit control. Additionally, it explains key aspects of India's fiscal system including sources of public revenue and expenditure as well as the federal finance system between central and state governments.

Uploaded by

Pravah Shukla
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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ECONOMIC & SOCIAL

ENVIRONMENT (III)
MONETARY & FISCAL SYSTEM
CREDIT STRUCTURE OF
INDIAN ECONOMY
R B I

O r g a n i z e d S e c t o r U n o r g a n i z e d S e c t o

N o n - b a n k i n g B a n k i n Mg o n e yI n d i g e n o u s
i n s t i t u t i o n s i n s t i t u t i ol e n n s d e r s b a n k e r s

L I C G I C U T I P v t . F i n a n c i a l B a n k s
f i n . I n s t i t u t i o n s
c o s .

S F C s N A B A R I DD B I I C I C I I R B I E X I M C o m m e R r ce i g a i l o n aC l o o p
B a n k B a n k s R u r a l B a n k
B a n k s

P u b l i c P r i v a t e S t a t
S e c t o r S e c t o r l e v e
C o o p

I n d i a n F o r e i gC n e n t r a

P r im
C r e d
S o c i e
• Quantitative Credit Control

• Qualitative Credit Control


FINANCIAL INSTITUTIONS
• Commercial banks
• Development banks
• Cooperative banks
• Regional banks
• Specialized financial institutions
INDUSTRIAL FINANCE
CORPORATION OF INDIA
• Granting of loans in Indian
& foreign currencies
• Underwriting of
shares/debentures of public
limited companies
• Guaranteeing of deferred
payment for machinery
imported from abroad or
purchased from within the
country or loans from
banks
INDUSTRIAL CREDIT &
INVESTMENT CORP. OF
INDIA
– To encourage &
assist industrial
investment in the
private sector
– To provide the
scarce foreign
currency loans
– To develop
underwriting
facilities in India
INDUSTRIAL
DEVELOPMENT BANK OF
INDIA
• Direct assistance to
industrial concerns
• Indirect assistance
through refinancing,
rediscounting of
bills, etc.
• Promotional
assistance
EXPORT-IMPORT BANK OF
INDIA
• Providing financial
assistance to
exporters &
importers
• Coordinating the
working of
institutions engaged
in financing export &
import of goods &
services
NATIONAL BANK FOR AGRI.
& RURAL DEVELOPMENT
• Providing short-term
refinance assistance
to state cooperative
banks, regional rural
banks, & other
approved financial
institutions
• Providing long-term
loans to regional
rural banks
INDUSTRIAL
RECONSTRUCTION BANK OF
INDIA
• Acts as a principal
credit &
reconstruction
agency for revival
of sick industrial
units
FISCAL SYSTEM
• Public revenue, i.e., sources of revenue for
the State
– Taxation
– Public debt
– Creation of additional currency
– Market borrowings
– Income from public undertakings
– Sale of public assets
• Public expenditure, i.e., expenses incurred
by the Government
– for its own maintenance
– for the maintenance of society as a whole
• Public budget
– Financial plan which describes in detail the
estimated receipts and proposed expenditure
under various heads
• Public debt
– Short-term debt
– Floating debt
– Permanent or funded debt
• Burden of public debt = P/Y
where
– P is the total public debt
– Y is the total national income
FEDERAL FINANCE
• The Constitution of India has made a
number of provisions for distribution of
certain revenues between the Centre & the
States.
• Finance Commissions
– A Finance Commission is appointed by the
President of India every 5 years, the main
function of which is to make recommendations
regarding
• Distribution of net tax proceeds between the
Centre & States
• Grants-in-aid given by the Centre to the States

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