Indian Economics - FINANCIAL MARKETS IN INDIA

Overview

• India’s financial market is one of the oldest in the world
• It is considered the fastest growing and strongest among emerging economies
• Financial markets in India are under the purview of the Capital Markets Division of the Department of Economic Affairs of the Ministry of Finance
  
• The markets in India are regulated by the Securities and Exchange Board of India (SEBI)
• The PAN is the sole identification number for all transactions in securities markets
  
• Although there are more than 25 stock exchanges in the country, the Bombay Stock Exchange and the National Stock Exchange account for a large majority of securities exchanges

 

GOVERNMENTAL REGULATORY BODIES

Securities and Exchange Board of India (SEBI)

• Established 1992, headquarters Mumbai
• Functions under the Department of Economic Affairs, Ministry of Finance
  
• SEBI is the regulator for financial markets in India
• SEBI has regional offices in New Delhi, Kolkata, Chennai and Ahmadabad
• The main responsibilities of SEBI include protection of interests of investor, and the development and regulation of securities markets
• SEBI has three main functions
  • Legislative functions: it drafts regulations and policies for financial markets
  • Executive functions: conducts investigations and enforces action
    
  • Judicial functions: passes rulings and orders and arbitrates disputes
    

Forward Markets Commission (FMC)

• Established 1953, headquarters Mumbai
• Functions under the Ministry of Consumer Affairs, Food and Public Distribution
  
• The FMC is the chief regulator of forwards and futures markets in India
  
• The main functions of the FMC include
  
  • Advice the Union Government on matters relating to forward markets
  • To monitor and regulate forward markets
  • Collect and publish information relating to forward markets
• The FMC currently allows futures trading in specific spices, edible oils, pulses, energy products and metals
• These forwards and futures exchanges in commodities are performed at specialised commodity exchanges in the country
  

IMPORTANT STOCK EXCHANGES IN INDIA

Bombay Stock Exchange (BSE)

• Established 1875, location Mumbai
• The BSE is the oldest stock exchange in Asia
  
• The BSE is the largest stock exchange in India (in terms of market capitalization)
• In terms of the number of listed companies, the BSE is the largest stock exchange in the world (with over 4500 listed companies)
• The key index of the BSE is the SENSEX (BSE Sensitive Index). It is a composite measure of the performance of 30 key listed companies

National Stock Exchange (NSE)

• Established 1992, location Mumbai
• The NSE is the second largest stock exchange in India (after BSE)
• In terms of number of trades in equity, it is the largest stock exchange in India and the third largest in the world
  
• The NSE is also the second fastest growing stock exchange in the world
• The NSE is owned by a set of financial institutions, banks and insurance companies. There are at least two foreign investors in NSE: NYSE Euronext and Goldman Sachs
• The NSE’s key index is the Nifty

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General Studies - THE RASHTRAKUTAS

Overview

• The Rashtrakutas ruled large parts of southern and central India from the 6^th to the 10^th centuries CE
• The Rashtrakutas emerged as a power after overthrowing the Chalukya Kiritivarman II in c. 753 CE
• The Rashtrakutas were based around the Gulbarga region of modern Karnataka
• The capital city of the Rashtrakutas was Manykheta (Karnataka)
  
• The Rashtrakutas were in continuous conflict with the Palas and the Pratiharas for more than two centuries

Extent and lineage

The Kailasanatha Temple at Ellora, built by the Rashtrakuta king Krishna I

• The Rashtrakuta dynasty was established by Dantidurga who overthrew the Chalukyas in 753 CE
• At the height of their power, the Rashtrakutas kingdom included all of Karnataka and Maharashtra and parts of Andhra Pradesh
• The most important kings of the Rashtrakutas were Dhruva Dharavarsha (780-793 CE), Govinda III (793-814 CE) and Amogavarsha (800-878 CE)

Administration, economy and society

• The Rashtrakutas issued coins in silver and gold
• The various currency denominations were Suvarnas (silver) and Drammas (gold) weighing 65 grains, Kalanju (48 grains), Gadyanaka (96 grains), Kasu (15 grains), Manjati (2.5 grains) and Akkam (1.25 grains)

Literature

• Kannada literature attained prominence and importance during the reign of the Rashtrakutas
• Kavirajamarga by king Amogavarsha is the earliest available literary work in Kannada. Amoghavarsha also wrote the Prashnottara Ratnamalika, a religious work in Sanskrit
  
• Adipurana, a life history of the first Jain Tirthankara Rishabadeva in Kannada, was written by Pampa (c. 950 CE). Pampa also wrote the Vikaramarjuna Vijaya, based on the Mahabharata story. Pampa is recognised as one of the most famous Kannada writers
  
• Another Jain writer, Sri Ponna, wrote the history of the 16^th Jain Tirthankara Shantinatha, entitled Shantipurana. His other writings in Kannada included Bhuvanaika-Karamabhyudaya, Jinaksaramale and Gataprataigata
  
• Trikrama (c. 915 CE) wrote the Nalachampu, Damayanthi Katha and Madalaschampu in Kannada
  

Art and Architecture

• The Kailasanatha Temple at Ellora (Maharashtra) was constructed by the Rashtrakuta king Krishna I (c. 8^th century CE). The Kailasanatha Temple was carved out of a single rock, and is known for its vertical excavation i.e. it was carved starting from the top and proceeding downwards. The Kailasantha Temple is considered to be the pinnacle of Rashtrakuta architecture
• The Rashtrakutas also built some of the sculptures at the Elephanta Caves near Mumbai
• Other famous Rashtrakuta architecture include the Kasiviswanatha Temple and Jain Narayana temple at Pattadakal, Karnataka and the Navalinga Temple at Kuknur, Karnataka
• The architectural style used by the Rashtrakutas was primarily Dravidian

THE PALAS

Overview

• The Palas ruled Bengal and much of northern India from the 8^th to the 12^th centuries CE
• The capital cities of the Palas were Pataliputra (Bihar) and Gaur (West Bengal)
• The Palas were in continuous conflict with the Rashtrakutas and the Pratiharas for more than two centuries
• The Palas patronized the Buddhist universities at Vikramashila and Nalanda. The Nalanda University reached its height during the reign of the Palas
• Dharmapala constructed the Somapura Mahavira, the biggest Buddhist Vihara in Indian subcontinent. The Somapura Mahavira, located at Paharpur (Bangladesh) is a UNESCO World Heritage Site (1985)

Extent and lineage

The Somapura Mahavihara, built by the Pala emperor Dharmapala, is the largest Buddhist vihara in the Indian subcontinent. It is located in Paharpur, Bangladesh

• The Pala dynasty was established by Gopala (750-770 CE) who came to power in a democratic election. This event is said to be the first democratic elections in India since the time of the Mahajanapadas
  
• The Pala kingdom reached its peak under Dharmapala (770-810) and Devapala (810-850)
• At its height, the Pala kingdom extended from Assam in the east to Kandahar in the west, and Punjab in the north to the Deccan in the south

Literature

• The earliest development of proto-Bangla language was during the Pala reign
  
• The Buddhist texts Charyapada were the earliest form of Bangla language. The Charyapada are a collection of mystical poems from the Tantric school of Buddhism
  
• The Buddhist teacher Atisha Dipankara Shrijana wrote over 200 books, primarily translations of Sanskrit Buddhist manuscripts into Tibetan
  
• Sandhyakar Nandi wrote the famous epic poem Ramacharitam in Sanskrit (c. late 11^th century). The Ramacharitam simultaneously narrates the story of the Ramayana as well as events in Bengal during the Pala reign in a poem containing 215 verses
  

PRATIHARAS

Overview

• The Pratiharas ruled much of northern India from the 6^th to the 11^th centuries CE
• Also known as Gurjara Pratiharas, they are associated with the Gujjar tribe and are considered to be Rajputs clans
• The capital city of the Pratiharas were Kannauj and Avanti.
  
• The Pratiharas used Sanskrit, Marwari and Malwi as official languages
• The Pratiharas were in continuous conflict with the Rashtrakutas and the Palas for more than two centuries
• The Pratiharas are credited with repulsing Arab invasions in western India in the 7^th and 8^th centuries CE
  
• The Pratiharas weakened over a period of time, due to having to fight the Palas and Rashtrakutas as well as Arab armies from the west
  

Extent and lineage

• The Pratihara dynasty is said to have been founded by Harichandra in the 6^th century
• Nagabhata I (730-756 CE) was the first important ruler. He defeated the advancing Arab armies at the Battle of Rajasthan (738 CE)
  
• Vatsaraja (775-805 CE) sought to capture Kannauj, which brought them into conflict with the Palas and the Rashtrakutas. His attempts were unsuccessful
• Nagabhata II (805-833 CE) rebuilt the great Shiva temple at Somnath which had been earlier destroyed by Junaid of Sind

Conflict with Arab invaders

The Rashtrakutas, Pratiharas and Palas were in continuous conflict for over two centuries. The focal point of the conflict was the Kannauj Triangle.

• The Sind region had been captured by Muhammad bin Qasim in 710 CE
• His successor and Governor of Sind, Junaid, led an invasion into western and northern India in 738 CE
• Junaid was defeated by the Rashtrakutas at Navsari (Gujarat) and by the Pratihara king Nagabhata I at Avanti
  
• Nagabhata pursued the Arab armies as far as the Indus river ensuring that the Arabs remained on the other side of the Indus
• The Pratiharas acted as a buffer against Arab armies from the west for the next two centuries and are credited with checking Arab advances into India

THE KANNAUJ TRIANGLE

• The Rashtrakutas, Palas and Pratiharas were locked in continuous conflict between the 8^th and 10^th centuries CE
  
• This tripartite struggle was primarily over control of Kannauj and the fertile Gangetic plains around it
  
• The earliest known reference to the struggle is from the late 8^th century: Dharmapala defeated the Pratihara king Indraraja and captured Kannauj, only to be defeated by the Pratihara Vatsaraja, who was himself defeated by the Rashtrakuta Dhruva. Dharmapala retrieved Kannauj from the Rashtrakutas, but Kannauj was once again conquered by the Pratihara Nagabhata
• The area around Kannauj, called the Kannauj triangle kept changing hand throughout the tripartite struggle

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General Studies - THE (LATER) CHOLAS

Overview

• The Cholas, along with the Cheras and Pandyas, are considered to be among the oldest and longest dynasties in Indian history. They ruled southern India in the later parts of the first millennium BC (Sangam period), and supposedly in even earlier pre-historical epochs as mentioned in ancient Tamil literature
• However, this article deals only with the later Cholas, about whom concrete literary, epigraphical and archaeological evidence has been established. In this article Cholas refers to later Cholas
• The Cholas ruled large parts of Southern India including Tamil Nadu, Kerala, Andhra Pradesh and parts of Karnataka from the 9^th to 13^th centuries CE
• The lasting legacies of the Cholas include some of the most important works of Tamil literature and magnificent temples and monuments
  
• The Cholas are also known for their powerful navy with blue-water capabilities, that allowed them to project power as far away as Indonesia
• The capital of the Cholas were Tanjore and Gangaikonda Cholapuram
  

The Chola Empire at its peak under Rajendra Chola (c. 1030 CE)

• The heartland of the Chola territory was the fertile Kaveri valley centred around Tanjore
  
• The Cholas came into prominence in the 9^th century under Vijayalaya Chola (c. 850 CE)
• Important Chola kings include Parantaka Chola (c. 925 CE), Sundara Chola (c. 950 CE), Rajaraja Chola (c. 985-1014 CE), Rajendra Chola (c. 1012-1044 CE) and Kulothunga Chola (1070-1120 CE)
• The Chola empire stretched from Sri Lanka in the south to the Godavari-Krishna basin in the north.
• Additionally, large parts of north eastern India and South East Asia were conquered by Rajendra Chola, and were under Chola suzerainty. These included the Ganga-Hoogly-Damodar basin, Indo-China (Thailand, Cambodia, Vietnam), Burma, Malaysia and Indonesia.
  
• Rajendra Chola, the most successful Chola emperor, took on titles such as Gangaikonda Cholan and Mudikonda Cholan
• To commemorate his successful campaigns to the Ganges, Rajendra Chola founded the city of Gangaikonda Cholapuram, which served as the capital for over 200 years until the dissolution of the Chola empire in the 13^th century
  
• Following generations of inter-marriage between the Cholas and the Eastern Chalukyas (of Vengi), the Chalukya prince Rajendra Chalukya ascended the Chola throne under the name Kulothunga Chola (1070 CE). The line of Chola rulers following Kulothunga Chola are also known as Chalukya-Cholas
  

The Brihadeeswarar Temple in Tanjore, built by Rajaraja Chola, is the largest and tallest temple in India. The main Vimana towers over 16 storeys high, and is topped by a single granite stone weighing over 81 tonnes

• The Chola Empire was the first to bring all of south India under a common government
• The capital of the Cholas was Tanjore, and later Gangaikonda Cholapuram
• The Cholas pioneered a system of highly organised governance where a careful balance was achieved between central control and local independence in administrative matters
• Every village in the empire was a self-governing unit
  
• Several villages made up a Korram, several Korrams made up a Valanadu, and several Valanadus made up a Mandalam (i.e. province)
• The Cholas also pioneered the concept of immediately recording oral orders given by king in written form. A special official, Tirumandira Olai Nayagan, was tasked specifically with recording these oral orders in palm leaf manuscripts
  
• The Chola empire had extensive trade relations with Sri Vijaya (Indonesia), China (Tang Dynasty) and the Abassid Caliphate (Baghdad)
  
• The Cholas maintained a powerful and well-organised Navy, that it used for power projection, piracy control and trade convoy escorting
  

Art and Architecture under the Cholas

• The period of the Cholas was an age of continuous improvement and refinement of Dravidian art and architecture
• The most famous aspects of Chola art and architecture includes their exquisite bronze sculptures and massive stone temples
• The Brihadeeswarar Temple at Tanjore, built by Rajaraja Chola (c. 1002 CE), is considered to be the pinnacle of Chola architecture. The temple, the largest and tallest in India, is also the first complete granite structure in the world
• The UNESCO World Heritage Site Great Living Chola Temples consists of three temples constructed by the Cholas:
  • Brihadeeswarar Temple (Tanjore)
  • Airavateswarar Temple (Darasuram)
    
  • Gangaikonda Cholapuram Temple (Gangaikonda Cholapuram)
    
• The Chola period is also remarkable for its sculptures and bronzes, many of which are housed in museums around the world. Among the most famous Chola bronzes is that of Nataraja, depicting Siva in the cosmic dance of creation and destruction

The Great Living Chola Temples

The Great Living Chola Temples are a UNESCO World Heritage Site

Temple	Location	Date/Built by	Notes
Brihadeeswarar Temple	Tanjore (Tamil Nadu)	c. 1006 CE/Rajaraja Chola	Largest and tallest temple in India Served as the royal temple of the Cholas being the site of important royal ceremonies Also known as Peruvudaiyar Temple
Gangaikonda Cholapuram Temple	Gangaikonda Cholapuram (Tamil Nadu)	c. 1025 CE/Rajendra Chola
Airavateswarar Temple	Darasuram (Tamil Nadu)	12th century CE/Rajaraja Chola II

Literature under the Cholas

• The Chola period is noted for the flourishing Tamil literature during this period
  

  The Airavateswar Temple at Darasuram was built by Rajaraja Chola II. The temple, whose sanctum is in the form of a chariot, is known for the exquisite details of sculptures

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Indian Economics - FOREIGN TRADE IN INDIA

Overview

• In 1950, India’s share in total world trade was 1.78 %. By 2002 this had dropped to 0.8 %
• India has a total foreign trade of around USD 489 billion. Of this imports accounted for USD 303 billion and exports USD 185 billion
• Based on 2008-2009 data, India’s largest trading partner is the UAE (total trade USD 48 billion)
• India exports the maximum to UAE (USD 24 billion) and imports the most from the People’s Republic of China (USD 32 billion)
• Foreign trade in India falls under the purview of the Department of Commerce under the Ministry of Commerce and Industry

Top trading partners

Rank	Country	Exports (USD billion)	Imports (USD billion)	Total trade (USD billion)
1	UAE	24.4	23.8	48.2
2	PRC	9.3	32.4	41.8
3	USA	21.1	18.5	39.7
4	Saudi Arabia	5.1	19.9	25.0
5	Germany	6.3	12.0	18.3

Special Economic Zones (SEZ)

• India was one of the first countries in Asia to recognize the effectiveness of Export Processing Zones (EPZ)
• The first Export Processing Zone (EPZ) in Asia was established in Kandla (Gujarat) in 1965
• The Special Economic Zone (SEZ) Policy was announced in 2000
• The main objectives of SEZs are
  • Generation of additional economic activity
  • Promotion of goods and services
  • Promotion of investment from domestic and foreign sources
  • Creating of employment opportunities
  • Development of infrastructure facilities
• SEZs function under the Department of Commerce (Ministry of Commerce and Industry)

S. No.	SEZ	Location	Type
1	Kandla SEZ	Gujarat	Multi product
2	SEEPZ	Mumbai	Electronics, gems and jewellery
3	Noida SEZ	Uttar Pradesh	Multi product
4	MEPZ	Chennai	Multi product
5	Cochin SEZ	Kerala	Multi product
6	Falta SEZ	West Bengal	Multi product
7	Visakhapatnam SEZ	Andhra Pradesh	Multi product

Trade Agreements

Agreement	Contracting parties	Notes
Agreement of Cooperation with Nepal to control unauthorised trade	India, Nepal	Established in 2009 The agreement aims to restrict and prevent unlawful activities relating to traffic in narcotics, foreign exchange etc
Agreement on South Asia Free Trade Area (SAFTA)	India, Pakistan, Sri Lanka, Nepal, Bhutan, Bangladesh, Maldives	Established in 2007 Afghanistan, which became SAARC member in 2007, is set to become latest SAFTA member India, Pakistan, Sri Lanka are categorised Non-Least Developed Contracting States (NLDCS) Bhutan, Bangladesh, Nepal, Maldives are Least Developed Contracting States (LDCS) NDLCS to reduce tariffs for LDCS products to 0-5 % in 3 years from contract
Asia Pacific Trade Agreement (APTA)	Bangladesh, China, India, South Korea, Sri Lanka	Established 2005
Comprehensive Economic Cooperation Agreement between the Republic of India and the Republic of Singapore	India, Singapore
India Chile Preferential Trade Agreement (PTA)	India, Chile	Signed 2005 India offers tariff preference of 10-50 % on 178 tariff lines (including meat, fish, salt, iodine, Copper, chemicals, leather, newsprint, paper, wool, wood etc) Chile offers preference of 10-100 % on 296 tariff lines (includes agricultural products, chemicals, pharmaceuticals, dyes and resins, plastic, rubber, leather, textiles, footwear, industrial products)
India Afghanistan PTA	India, Afghanistan	Afghanistan grants preferential tariff to 8 products from India including black tea, ayurvedic and Homeopathic medicine, other medicine, sugar, cement India grants preferential tariff to 38 products from Afghanistan, mainly agricultural products like dry fruits
India Bhutan Trade Agreement	India, Bhutan
India Korea CEPA	India, South Korea
India MERCOSUR PTA	India, MERCOSUR	MERCOSUR is a trading bloc in Latin America that comprises Brazil, Argentina, Uruguay and Paraguay MERCOSUR offers tariff concession on 452 products India offers tariff concession on 450 products The major products covered in Indian offer list are meat products, chemicals, dyes and pigments, raw hides and skins, leather, wool, cotton, glass, iron and steel, machinery, optical and photographic equipment The major products in MERCOSUR offer list include food, organic chemicals, pharmaceuticals, essential oils, plastics, rubber, tools and implements, machinery
India Sri Lanka FTA	India, Sri Lanka

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