MONEY

             Money is a thing that is usually accepted as payment for goods and services as well as for the repayment of debts.

Types of Money 

• Commodity Money - Commodity money value is derived from the commodity out of which it is made. The commodity itself represents money and the money is the commodity. For instance, commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, rice, large stones, etc. 
• Representative Money - Representative Money includes token coins, or any other physical tokens like certificates, that can be reliably exchanged for a fixed amount/quantity of a commodity like gold or silver. Fiat Money - Fiat money, also known as fiat currency is the money whose value is not derived from any intrinsic value or any guarantee that it can be converted into valuable commodity (like gold). Instead, it derives value only based on government order (fiat). 
• Commercial Bank Money - Commercial bank money or the demand deposits are claims against financial institutions which can be used for purchasing goods and services. 
• Narrow and Broad Money - Money supply, like money demand, is a stock variable. The total stock of money in circulation among the public at a particular point of time is called money supply.

Banking Ombudsman

          The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services.
           The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.
            As on date, fifteen Banking Ombudsmen have been appointed with their offices located mostly in state capitals. The addresses and contact details of the Banking Ombudsman offices have been provided in the annex.
           All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
           One can file a complaint before the Banking Ombudsman if the reply is not received from the bank within a period of one month after the bank concerned has received one s representation, or the bank rejects the complaint, or if the complainant is not satisfied with the reply given by the bank.
           One may lodge his/ her complaint at the office of the Banking Ombudsman under whose jurisdiction, the bank branch complained against is situated. For complaints relating to credit cards and other types of services with centralized operations, complaints may be filed before the Banking Ombudsman within whose territorial jurisdiction the billing address of the customer is located. Address and area of operation of the banking ombudsmen are provided in the annex.
           

Budget and its types

Budget
       Budget is the estimation of income and expenditure. Budget is prepared for proper and systematic development.

Budget represent in 3 ways
              1. Income> expenditure= surplus
              2. Income= expenditure= balance budget      
              3. Income< expenditure = deficit budget
         Note- India's budget is always deficit because India is a developing country.

Sources of Money for Government

1. Loan from RBI 
2. Government securities 
3. Loan from Asian development Bank and world bank

Categories of Budget

1. Gender Budget 
2. Zero base Budget 
3. Outcome Budget
4. Traditional Budget 
5. Performance Budget 
6. Interim Budget

• Gender Budget- When budget is female oriented is called gender budget. 
• Zero base Budget- When government form budget without considering last years budget performance that is called zero base budget. 
• Outcome Budget- When budget is result oriented(means particular sector growth related). 
• Traditional Budget- When income estimated and expenditure fixed is called Traditional budget.
• Performance Budget- When government form budget with considering last year budget.
• Interim Budget- Year 2014-15 budget is interim budget. When government is not able to prepare budget for full year is called interim budget. Example in election times , in wars. Interim Budget is for 4 months.

Note- First time budget was represented by Robert woolpoul in 1773 in U.K. Bugat is a french word for Budget.

• In India under Constitution Article 112 government present Union Budget. 
• In constitution of India annual financial statement is mentioned not budget. 
• State Legislative Assemble present their budget by article 202.
• India's First Budget was presented by James Wilson in 1860 when lord canning is viceroy of India. 

In 1921 Edward committee recommend to divide budget in two parts 

1. Rail Budget
2. Union Budget 

• First Independent India's Budget presented by Mr. R. K kshadmugam chatti (it is first interim budget) in November 1947. 
• First Republic India's Budget presented byMr. John Mathei.

Inflation Related Terms

Inflation Related Terms 

• Deflation- Deflation is the opposite of inflation -- it's when prices fall. It is caused by a reduction in the supply of money or credit . 
• Hyperinflation- Extremely rapid or out of control inflation. Hyper inflation is a situation where the price increases are so out of control that the concept of inflation is meaningless. 
• Stagflation- A condition of slow economic growth and relatively high unemployment- a time of stagnation- accompanied by a rise in rises , or inflation. 
• Disinflation- A slowing in the rate of price inflation. Disinflation is used to describe instances when the inflation rate has reduced marginally over the short term. It is used to describe periods of slow inflation. 
• Reflation- Reflation is the act of stimulating the economy by incresing the money supply or by reducing taxes. it is opposite of disinflation.

Inflation

Inflation
         Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time.

Types of Inflation

1. Demand pull inflation 
2. Cost push Inflation 
3. wages Inflation 
4. Imported Inflation 

• Demand Pull Inflation- occurs demand for goods and services exceed the supply. 
• Cost Push Inflation- Price increase due to increase in price of other products. 
• Wages Inflation- It occur due to increase in wages as a result purchasing power of people increase. 
• Imported Inflation- The general price level rises in a country because of the rise in prices of imported commodities. 

Categories of Inflation

1. Creeping Inflation- When there is a general rise in prices at very low rates, which is usually between 2-4 percent annually. 
2. Walking Inflation - This type of strong, or pernicious, inflation is between 3-10% a year. It is harmful to the economy because it heats up economic growth too fast. 
3. Galloping Inflation- When inflation rises to ten percent or greater, it wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can't keep up with costs and prices. 
4. Hyper Inflation- Hyperinflation is when the prices skyrocket more than 50% -- a month. It is fortunately very rare.