Components of Money Supply, Four Modes of Services, Direct and Indirect Taxes

Dr. Manishika Jain- Join online Paper 1 intensive course. Includes tests and expected questions.

Components of Money Supply

Components of Money Supply


Consists of currency with the public (i.e. notes & coins in circulation minus cash with the banks)

plus, demand deposits with the bank (deposits which can be withdrawn without notice) plus other deposits with RBI (usually negligible). Also called narrow money


Ml + saving deposits +Certificate of Deposits (CDs) +term deposits maturing within a year.


M2 + term deposits with maturity more than a year + term borrowing of banking system. Also known as broad money.


M3 +all Deposits with the Post Office Savings Banks (excluding National Savings Certificates)


L1 +Term Deposits with Term Lending Institutions and Refinancing Institutions (Fis) +Term Borrowing by Fls+ Certificates of Deposit issued by Fls; and


L2 +Public Deposits of Non-Banking Financial Companies

Four Modes of Services Ullder GATT

Table Supporting: FournbspModesnbspofnbspServicesnbspUlldernbspGATT

Mode 1

Cross border trade, which is defined as delivery of a service from the territory of one country into the territory of other country;


Consumption abroad - this mode covers supply of a service of one country to the service consumer of any other country;


Commercial presence - which covers services provided by a service supplier of one country in the territory of any other country, and


Presence of natural persons - which covers services provided by a service supplier of one country through the presence of natural persons in the territory of any other country.

Direct & Indirect Taxes

Table Supporting: DirectnbspnbspIndirectnbspTaxes

Direct Tax

Indirect Tax

Corporation Tax

Excise Duties

Income Tax

Service Tax

Interest Tax

Central Value Added Tax (Vat)

Expenditure Tax

Sales Tax

Wealth Tax

Property Tax

Gift Tax


Estate Duty

Customs Duties

Land Revenue

Stamp Duties

Commissions/Committees & Their Purpose

Table Supporting: CommissionsCommitteesnbspnbspTheirnbspPurpose

Atjun Sen Gupta Committee

Public Sector Enterprise Autonomy

Rangarajan Committee

Disinvestment of PSUs & Balance of Payments.

Malhotra Committee

Insurance Sector & its regulation. Follow up led to setting up of iRDA.

Madhukar Committee

Gold exchange traded fund implementation.

L.C. Gupta Committee

Derivatives in India Model

Naresh Chandra Committee

Corporate Audit & Governance

JJ Irani Committee

Company Law

B. Bhattacharya Committee

Committee on pension reforms

Rakesh Mohan Committee

Small saving & Administered interest rates

Viiay Kelkar Committee

FRBM (fiscal responsibility & budget management) Act implementation

S.P. Gupta Committee

Generation of Employment opportunities in the 10’” plan.

Raghavan Committee

Replacement of MRTP act by competition act.


Industrial Insolvency.

M.S. Verma

Restructuring weak banks

Lakdawala Committee

Estimating Poverty line in India

Montek Singh Ahuluwalia

Power Sector reforms

Rakesh Mohan Committee

Development of Infrastructure in India

Abid Hussain Committee

Small Scale Sector

Jha Committee


Vasudev Committee


Omkar Goswarni Committe

Industrial Sickness

G.V. Ramakrishna

Disinvestment Commission

Arvind Virmani

Import Tariff Reform

Valhul Committee

Money Markets India reforms