Green GNP. GNP does not take into consideration the cost in terms of (i) environmental pollution, and (ii) depletion of natural resources caused by production of output. Mere increase in GNP will not reflect improvement in quality of life if it increases environmental pollution or reduces available resources for future generations. That is why concept of Green GNP has been introduced while measuring economic welfare.
Green GNP is defined as "GNP which is indicator of a sustainable use of natural environment and equitable distribution of benefits of development." This concept denotes the following characteristics (i) Sustainable economic development, i.e., development which should not cause environmental degradation (pollution) and depletion of natural resources (ii) Equitable distribution of benefits of its of development. (iii) Promotes economic welfare for a long period of time.
Expressed in the form of an equation:
Green GNP = GNP - Net fall in stock of national capital.

Circular flow of income refers to the continuous circulation of production, income generation and expenditure involving different sectors of the economy. Phases of Circular Flow of Income There are three different phases (generation, distribution and disposition) in circular flow of income, as shown in the given diagram:
(i) Production phase In this phase, firms produce goods and services with the help of factor services.
(ii) Income phase This phase involves the flow of factor income (rent, wages, interest and profits) from firms to the households.
(iii) Expenditure phase In this phase, the income received by factors of production, is spent on the goods and services produced by firms.
ncome is first generated in production units, then distributed to households and finally spent on goods and services produced by these units to make the circular flow complete its course.

Meaning. Primary deficit is defined as fiscal deficit minus interest payments on previous borrowings. We have seen that borrowing includes not only accumulated debt but also interest payment on the debt. If we deduct 'interest payments on debt' from borrowing, the balance is called primary deficit. It shows how much government borrowing is going to meet expenses other than interest payments. Thus zero primary deficit means that government has to resort to borrowing only to make interest payments. To know the amount of borrowing on account of current expenditure over revenue, we need to calculate primary deficit. Thus primary deficit is equal to fiscal deficit less interest payments. Symbolically:

The theory aims to determine the adjustments needed to be made in the exchange rates of two currencies to make them at par with the purchasing power of each other. In other words, the expenditure on a similar commodity must be same in both currencies when accounted for exchange rate. The purchasing power of each currency is determined in the process.
Purchasing power parity is used worldwide to compare the income levels in different countries. PPP thus makes it easy to understand and interpret the data of each country.

1. Low per Capita Income: India’s per capita income is very less as compare to developed countries. 
2. Agriculture Based Economy: Agriculture and allied sectors provide around 14.2% of Indian GDP while 53% of total Indian population is based on the agriculture sector.
3. Over population: in every decade Indian population get increased by about 20% . During the 2001-11 population increased by 17.6%. Currently India is adding the total population of Australia every year.  India is the possessor of around 17.5% population of the whole world.

4. Income Disparities: a report released by Credit Suisse revealed that the richest 1% Indians owned 53% of the country’s wealth, while the share of the top 10% was 76.30%. To put it differently, in a manner that conveys the political economy of this stunning statistic, 90% of India owns less than a quarter of the country’s wealth.

5. Lack of Capital Formation: Rate of capital formation is low because of lower level of income.  Gross domestic capital formation was 23.3% in 1993-94 increased upto the level os 38.1% in 2007-08 but declined upto 34.8% in 2012-13.

Main features of Indian agriculture at the eve of Independence are as follows :
(i) Agriculture was the major source of livelihood and about 75% of country’s population derived their livelihood from agriculture.
(ii) The agricultural sector experienced stagnation and deterioration during British rule.
(iii) British rulers introduced new land tenure system which proved to be the prominent cause of agricultural stagnation.
(iv) Agricultural production deteriorated because of, lack of irrigational facilities and technological upgradation.
(v) Commercialisation of agriculture transformed Indian agriculture into a raw material export activity.
(vi) Partition of the country had an adverse effect on India’s agricultural production.

Injections: It means introduction of income into the flow when households and firms borrow the savings, they constitute injections.

Leakages: It refers to the withdrawal from the flow, when households and firms save part of their incomes, it constitutes leakage.