Perspectives of an economics student
I wonder if there is a second begining, but still, i have included all the posts i considered as important from my previous blog. I will not be blogging in blogspot any more.
Will be continuing with my economics related posts.
The main reason for the shift was that i found blogspot hard as i was not well versed with HTML.
Money
Economists have proposed a functional definition of money, i.e. any object that is generally acceptable in facilitating the exchange of goods and services.
It took me a lot of time to come up with the meanings of the monetary aggregates in the Indian context. This post gives an idea about the composition of various monetary aggregates. These aggregates are commonly used in journals relating to economics, so these definitions will help in comprehending the data better.
What are M1 and M3′
M1 and M3 are standard measures of money supply. Other standard measures are M0 and M4. Each monetary aggregate is ranked according to the degree of liquidity it provides. Monetary aggregates measure the amount of money circulating in an economy.
M0 includes only currency in the hands of the public, banks’ statutory reserve deposits held at the central bank and banks’ cash reserves. In India it is usually referred to as reserve money. It is controlled by the central bank of the country. (Link:RBI)
Narrow money (M1) is the sum of currency in circulation and demand deposits at monetary institutions.
Monetary aggregate (M2) is defined as M1 plus post office savings, bank deposits and residents’ deposits in foreign currency at deposit money banks.
M3 is defined as M2 plus other time deposits with banks. The components of M3 vary between countries. It is also called broad money.
M4 or L is referred to as very broad money. It comprises M3 plus treasury bills, negotiable bonds and pension funds.
Narrow money measures cover highly liquid forms of money (money as a means of exchange) while broad money includes the less liquid forms (money as a store of value).
After my 12th boards i knew Economics was what i wanted to do and preferably in the best college in the country. I realised economics could never bore me and it was the most interesting and dynamic subject that i had ever learnt. So i pursued it at Loyola College, Chennai, India.
Well, there i realised that most of my class mates were there either out of compulsion from their parents or just for studying in Loyola or because they did not get B.Com. I felt weird. I was eager to meet people who were as interested in economics as me. I felt disheartened.
Here i am, after three years of my undergrad, and still enjoying economics as i have never before. Yesterday, i happened to view a programme on NDTV, we the people, about getting 90% and still not getting into economics honours at St Stephens. I was happy and sad to see that the most sought after course was economics honours. I was happy to know that the youngsters of today were so interested in economics as a subject and sad because a lot many chose it because of compulsion and because it was the sought after course.
Here, in my hometown of Kerala, the most sought after course is Medicine and Engineering. Chartered Accountancy is cathching up. But humanities are looked down upon. What a pitiable condition.
What is it that the students of this generation look for’ Is it more and more money or knowledge’Taken from: Undergraduate Economics
India is shining with 7% GDP, SENSEX at 10684.30, Inflation at about 4.6 and foreign exchange reserves have crossed $150 billion. What an acievement! It can be seen in the indian media both electronic and print. The governement and the Indians deserve to be applauded. And that is exactly what the media is doing. The people(middle and upper class) are happy and the media is happy too. What a rosy picture!
But is the whole country rejoicing’ NO!
While going through the current issue of Economic and political weekly, some facts surprised me.
In India, the prevailing poverty line is Rs 368 and Rs 559 per person per month for rural and urban areas.(Could any individual live a decent life with this money”)
Malnutrition is another problem faced by Indians.Around one in four indians are malnourished.
Presently 47% of Indian children below the age of 5 are underweight for their age.(Malnourishment hinders developmentand capacity to learn.)
Only 20% of Indians are covered by public health care.( Due to the bad condition of public hospitals, no one prefers going there even though the costs are less.)
At least one in three Indians does not get the basic daily water requirement.
Presently, about 57% of Indian households do not have electricity.( I wonder if about 10% of the ducated in India knows this fact.)
Education is a fundamental right. 71.16% of the people in the 15-19 year age group had not completed a secondary education-a 2001 survey. (Unimaginable! and what ahve the priveleged been doing about it, nothing!)
According to the article in EPW, Redefining Poverty: A new poverty line for a new India, the poverty line in India should be about Rs 840 per capita per month. “At this expenditure level nearly 69% of India’s population is below the povert line which is over two and a half times the present official poverty rate of 26.1%.
Related links:
http://nanonomics.blogspot.com/( A Friend’s view on india shining)
http://www.thehindubusinessline.com/2006/07/11/stories/2006071101391100.htm(On the economic progress made)