Sounds Same, but means different

 Finance and economics are full of terms that look twins but act opposite.

So here’s a mini-series to clear that confusion once and for all.
Short, visual, and super beginner-friendly.
Presenting “Sounds Same but Means Different.”

Rethinking Growth: My First Lessons in Development Economics

 I thought economic growth of an economy is inevitable.

Something that would happen naturally — because how can growth and development be stopped... no one wants that, right?

This semester break, I tried studying development economics. The recent Nobel Prizes, the loads of research going on in this field, and being a future of a developing country like India — this subject definitely had to be one of my interests.

This blog includes the readings that struck me and helped me develop a new wave of thinking.

1. I discovered that growth could slow down or even reverse, even though we don’t want this to happen. Possible reasons include poor infrastructure, inequality, corruption, political instability, wars, or natural calamities.

2. Growth and development only come with the right institutions and a sound mindset of the people of the country.

3. I could relate the Hindi proverb “Boond boond se sagar banta hai” and say that growth is a result of collective tiny efforts taken over a long period of time.

4. The Kerala paradox — a highly educated and socially developed state in India, yet facing economic challenges like unemployment and migration — made me curious about why social progress doesn’t always translate into economic growth. It shows how good education and welfare alone are not enough unless supported by strong economic opportunities.

5. I went through the growth models and the well-known development economists, but honestly, I still need to strengthen my hold on them.

Studying development economics made me realize that growth is not a straight path — it’s shaped by people, policies, and persistence. Behind every data point, there’s a story of opportunity or struggle. The subject opened my eyes to how complex and human-centered development really is.

I’ve just scratched the surface, but it’s a start toward understanding how we can make growth more inclusive, sustainable, and real for everyone.

“Growth doesn’t just happen; it’s something we build, nurture, and protect.”

Process Reforms in Public Policy – A Session Reflection

Everybody has heard about structural reforms in public policy. But in an online session conducted by Akanksha Arora(Director in Prime Minister's Ecnomonic Advisory Council, India) under the Young Economist Forum on 19th September , I was introduced to something new: Process Reforms in Public Policy.Here’s a quick summary of what I understood and noted from the session.

What are Process Reforms?

Process reforms are basically reforms that try to remove friction in certain business or individual activities. In simple words, they aim at making life and business activities smoother—whether it’s about ease of doing business or ease of living issues.

The Process of Process Reforms

Further she talked about 2 process reforms that she was a part of which helped me clarify the concept even further 

Case Study I: Voluntary Liquidation of Companies

Earlier, the voluntary liquidation of companies in India was a painfully long process. On average, it took around 499 days! The process required publishing a notice before official liquidation and ensuring there were no unresolved issues with the company.

The reform was brought about and the publishing of notices was done weekly/fortnightly instead of piling them up and extending the time required. With the reform, the time was reduced and the number of days dropped drastically—from 499 to 195 days.That’s almost an 88% reduction in time!

Case Study II: Investor Education & Protection Fund

For the second case study, she suggested to look into the details on our own. The idea was to push us to explore how reforms in this area help protect small investors and spread awareness about their rights.

Final Thought

What struck me most was how process reforms are not about creating big, flashy policies. Instead, they are about removing the small frictions that delay, confuse, or burden people. A simple change can make the system much more efficient.

It made me realize that sometimes, improving governance isn’t about new laws or structural changes but about streamlining what already exists.

Why we keep taking unprofitable risks : Lessons from local Exhibitions

 I often visit local exhibitions in my city during my free time. My mother and some of her friends and relatives have participated in these events by setting up stalls to sell artwork, food items, and other products. However, many of them struggled to make a profit. Often, they couldn’t even recover their basic cost

Curious about this pattern, I observed that several stall owners experience losses despite putting in considerable effort and investment. They spend on stall rent, materials, and other fixed costs, yet their returns are minimal.

In contrast, the organiser earns a steady income from stall rentals, regardless of how well the stalls perform.

So, why do people still continue to participate?

A few sellers—those offering unique products, having strong branding, or operating with lower costs—manage to earn profits. But many others don’t, and yet they keep coming back. Why?

Here are the possible reasons that I found after researching up on the internet :

1. Sunk Cost Fallacy – Having already invested, sellers hesitate to back out.

2. Marketing Opportunity – Exhibitions are seen as platforms for exposure. Like giving away samples of your newly opened business will help increase brand visibility.

3. Social Proof – Seeing others participate creates a bandwagon effect.

4. Product Testing – A chance to try out new products on a small scale and get feedbacks before launcing the product in the market.

Stakeholder	Revenue Source	Risk Level	Incentive
Organiser	Stall Rent (Fixed)	Low	Guaranteed income
Stall Owner	Product Sales	High	Profit, visibility, brand promotion
Customer	Leisure/Shopping	Very Low	Entertainment, novelty, food, deals

(The above table has been generated using ChatGPT. It helped me visualize better. Hope it helps you too!)

The organisers seem to have an unfair advantage, right? Not really.

Fairness Check:

• Organisers aren’t necessarily unfair—they provide space, electricity, security, and infrastructure and thus are entitled for the rent

• Stall owners enter willingly, based on mutual agreement.the stall owner does not force them to put up a stall in his exhibition.

How Can Stall Owners Improve Outcomes?

1. Control Costs – Be mindful of spending and avoid overstocking. Plan before and have a clear estimate of sales, the type of crowd that will be visiting the exhibition ,etc

2. Use Smart Marketing – Attract the right audience with engaging strategies. For example. Providing a sample tasting piece if you have a food stall, guiding the customers with some styling tips if you put up a jewelry stall, will help build a connection with the customers .

3. Build Customer Connections – Collect data during the exhibition for future follow-ups. This will help in finding potential customers.

To make exhibitions more beneficial for stall owners, the model could be rethought to reduce financial risks and improve outcomes. One suggestion is to implement a flexible rent structure, where organisers charge a base fee plus a small percentage of the profits. This would ease the burden on low-earning stalls while still compensating organisers fairly. Additionally, collecting pre-sale data—such as expected footfall, past performance of similar stalls, or visitor preferences—can help participants make more informed decisions about whether to invest. Stall owners should also focus on selling high-margin products, which offer better profit potential even with moderate sales. Most importantly, it’s crucial to define clear goals before participating—whether the aim is to make sales, gain visibility, or test new products—so that resources can be used wisely and expectations are realistic. (Note- The ideas are a combination of my thinking, articles available online, and ChatGPT -either way, we find a solution to the problem, and that's important!)

Exhibitions are more than just weekend events—they represent the hopes of small businesses and entrepreneurs. But for these dreams to thrive, we must rethink the current model. With better planning, data, and support, more stall owners can find success in these vibrant marketplaces.

Comment down below and let me know your thoughts on this idea !!

Breaking News!Economics Has Two Sides You Need to Know

 Two terms every beginner in Economics comes across are Positive Economics and Normative Economics .

• Positive Economics = Facts or What it is 
• Normative Economics = Opinions or What it should be 

Here's an image that explains the concept clearly 

Image one states the fact "Legislation intended to strengthen border enforcement." , whereas image two states an opinion "The new law is too harsh and violates rights."

Union Budget India 2025-26:Welfare focus,Tax surprises & Bihar’s Big Boost

 India’s Union budget for FY 2025-26 was presented in the parliament on Saturday, February 1, by Finance Minister Nirmala Sitaraman. Sitaraman began the budget speech by quoting Telugu poet  Shri Gurajada Appa Rao's famous saying,

                        

          “A country is not just its soil; a country is its people.”

 

With the theme "Sabka Vikas" the budget proposed developments spanning ten broad areas focusing on the Poor(garib), Youth(yuva), Farmer(annadata), and Women(nari). The budget continues efforts to accelerate growth, secure inclusive development, promote private investments, uplift household sentiments, and enhance the spending power of Indian middle class. Our 4 powerful engines for development are agriculture, MSMEs, investment, and exports. 

But beyond the headlines, what does Budget 2025 truly offer—who benefits the most, what’s the big tax surprise, why is Bihar at the centre of major investments, and how does the government plan to balance its books?

 

·       Agriculture and allied activities

 

Agriculture being the largest contributor to GDP of the country, Government has introduced the PM Dhan-Dhaanya Krishi Yojana , a new Agri District programme covering 100 districts to boost agricultural productivity and benefit 1.7 Crore farmers. 

Additionally, A six-year mission focussing on Tur, Urad and Masoor, with procurement by NAFED (National Agricultural Cooperative Marketing Federation of India) & NCCF(National Cooperative Consumer’s Federation of India) has been introduced to achieve self-sufficiency in pulses. Advanced research and commercialization will be carried out to develop 100 + varieties of high-yielding seed. India being the second largest fish-producing country in the world, the government decides to boost its production further by creating sustainable fishing economic zones in Andaman, Nicobar and Lakshadweep islands.

 

·        MSMEs and Startups

 

MSMEs being the backbone of economy, the budget updated classification criteria for MSMEs to promote expansion and stimulate economic activities.

Following is the updated criteria :

 

Enterprise Type	Investment Limit (₹ Crores)	Turnover Limit (₹ Crores)
Micro	Up to 2.5	Up to 10
Small	Up to 25	Up to 100
Medium	Up to 125	Up to 500

 

With a vision to be global start up hub, financial support of Rs.10,000 Crore has been allocated for setting up and expansion of startups.

·        Education and Skilling and Gig worker welfare 

 

Renewing the focus on skilling and innovation, the Budget announces expansion of IITs and promises to raise 75000 medical seats in next 5 years. Emphasizing digital learning, 500 crore rupees will be invested in ‘Centre for Excellence in AI’

Acknowledging the rising gig economy, Budget introduces welfare measures like identity cards for gig workers including social security benefits, insurance coverage, and financial support via  E-Shram registration and PMJAY. Several flagship government schemes have been revamped with enhanced allocations and structural improvements to ensure better reach and efficiency.

 

 

·        Reforms in tax regime

 

 There are many surprising reforms in direct and indirect tax regime.36 new drugs were added to the exempt list along with 6 medicines included in 5 % duty category

The personal income tax system has been revised benefiting the middle class and income upto 12 lakh is made tax free aiming to increase the personal disposable income and ultimately the money flow in the economy. The TDS (tax deducted at source) and TCS (tax collected at source) have also been revised benefiting the citizens.

Here are the proposed income tax slabs under new tax regime

Income tax slabs(Rs)	Income tax rate (%)
From 0 to 4 lakh	0
From 4 lakh to 8 lakh	5
From 8 lakh to 12 lakh	10
From 12 lakh to 16 lakh	15
From 16 lakh to 20 lakh	20
From 20 lakh to 24 lakh	25
From 24 lakh & above	30

 

 

·        Bihar’s big boost

 

With Bihar’s elections approaching by, the state has earnmarked several infrastructural projects .A Makhana Board will be established to enhance the production, processing, and marketing of makhana, benefiting local farmers and the food industry. Additionally, Bihar’s irrigation sector will receive a boost through financial support under the Western Kochi Canal Project. The state will also see major infrastructure upgrades with the construction of a new airport and the expansion of Patna Airport, improving connectivity and fostering regional growth.

·        Where rupee comes from and where it goes?

                                                                 

 

 

 

To sum up, the Union Budget 2025-2026 will impact everyone from a tax payer ,an investor, a student to a senior citizen. With its multifaceted approach centered on welfare, tax reforms, and targeted regional investments, the budget represents a decisive step toward realizing India’s vision of a 5-trillion economy. Ultimately, its success will depend on effective implementation and the ability to convert policy into tangible progress.

 RESOURCE:  Budget Speech on Mint’s YouTube Channel

THE OPPORTUNITY COST TREE

THE OPPORTUNITY COST TREE

Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. Everything in this world has opportunity cost and we deal with it every day in our life !

The above image of a tree represents the concept of opportunity cost. The branch of the tree divides itself into two, indicating the two available choices for an individual to choose from. From the left to right side of the tree, the choices are as follows- Studying vs. Watching TV, Cooking at home vs. ordering food online, 

Going to a movie vs. saving money, and family time vs. overtime at work. The fruits represent the gains like a good career after studying well, good health after cooking at home, etc.

In simple words, the opportunity cost of watching TV is studying and the gains that you could have gained from it.

Did you like the doodle? Comment down below your thoughts and ideas. 

You can write me at srushti.kulkarni.pas09@gmail.com