POLITICAL PARTIES

CHALLENGES TO POLITICAL PARTIES
We know that how crucial political parties are for the democracy.They are the most visible face of the democracy and people blame them for whatever is wrong in the working of democracy.
This is a case of our country too. Popular dissatisfaction and criticism has focussed on four problem areas in the working od political parties.
1. LACK OF INTERNAL DEMOCRACY(with in the party):
all over the world there is a tendency in the political parties towards the concentration of power in one or few leaders at the top.
--parties donot keep membership registers, donot hold organisational meetings and conduct internal elections regularly.
--ordinary members donot get sufficient information on what happens inside the party.
--leaders assume greater power to make decisions in the name of party.
--more than layalty to the party principles and policies, personal loyalty to the leader becomes more important.
2.DYNASTIC SUCCESSION :
since most of the parties donot practice open and transparent procedures , there are very few ways for the ordinary worker to rise to the top in the party.As those in the position favour people who are close to them .
--in many parties top positions are always controlled by members of one family.This is unfair to the others and bad for democracy.,since people with not much experience or popular support come to occupy positions of power.
3.GROWING ROLE OF MONEY AND MUSCLES.(in parties during elections)
--since parties are focussed only on winning elections, they tend to use short-cuts to win elections.
--they tend to nominate candidates, who have or can raise money.Rich people and companies who give funds to the parties tend to have influence on the policy decisions of the parties.
--in some cases parties support criminals who can win elections.
4.PARTIES DONOT OFFER MEANINGFUL CHOICE:
In order to offer meaningful choice parties should be different, but in the recent yeras there is decline in the ideological differences among parties in most parts of the world.
--as in our country differences among all major political parties on economic policies have reduced. and also in Britain,the difference between the LabourParty and the Conservative Party is very little.
--sometimes people can not even elect very different leaders either,because the same set of leaders keep shifting from one party to another.

Q. HOW CAN PARTIES BE REFORMED?
Some of the recent efforts and sugesstions in our country to reform political parties and its leaders.
1.the constitution was amended to prevent elected MLA's and MP's from changing parties.This was done because many of them were indulging in Defections, inorder to become ministers for cash rewards.
--now the laws says that if any MLA or MP changes parties, he or she will lose seat in the legislature.The new law has brought defection down and has made dissent even more difficult.Now MLA's MP's have to accept whatever party leaders say.
DEFECTION--changing party allegience from the party on which a person got elected to a different party.
2.the supreme court passed an order to reduce the influence of money and criminals.
--now it is made mandatory for every candidate who conducts elections to file an affidavit giving details of his property and criminal cases pending against him.The new system has made a lot of information availble to the public.
AFFIDAVIT: a signed document submitted to the officer, where a person makes a sworn statement regarding her personal information.
3. the election commission passed an order making it necessary for the political parties to hold their elections and file their income tax returns.
--though parties have started doing so but it is a mere formality.

Many suggestions have been made to reform political parties as,
1. a law should be made regulate the internal affairs of political parties.
–it should be made compulsory for political parties to maintain a register of its members, to follow its own constitution, to have an independent authority ,to act as a judge in case of disputes, to hold open elections in case of disputes.
2. it should be made mandatory for the political parties to give a minimum number of tickets, one-third, to women candidates. Similarly there should be a quota for women in the decision making bodies.
3. there should be state funding of elections. The govt. should give parties money to support their elections expenses such as petrol, paper, telephone etc. or it could be given in cash on the basis of votes secured by a party in the last elections.
4. People can put pressure on political parties and this can be done through petitions, publicity and agitations. Ordinary citizens, pressure groups and movements & media can play an important role in this. If political parties feel that will loose public support by not taking up reforms they will become more serious about reforms.
5. Political parties can improve if those who want this join politics. As the quality of democracy depends upon the degree of participation. It is difficult to reform politics if ordinary citizens do not take part in politics & simply criticize it from outside .

These suggestions have not yet been accepted by all political parties but if accepted can lead to improvement.
But over regulation of political parties can be counter productive and this would force all the parties to find ways to cheat the laws, besides political parties would not like to pass the law they do not like.

POLITICAL PARTIES

POLITICAL PARTIES
Political party:- it is a group of people who come together to contest elections and hold power in the govt.
--they agree on some programmes & policies for the society with a view to promote collective good.
--these parties try to persuade people why their policies are better than others.
--they seek to implement these policies by winning popular support through election.
--they reflect fundamental political divisions in the society.They are about a part of society and involve PARTISANSHIP.
Political party has three components: the leader, the active members and the followers.
Q. Why do we need parties? Or
What are the functions performed by the political parties?
Parties perform series of functions.
Parties contest elections—in most of democracies, elections are fought mainly among the candidates put up by the political parties. In India, top party leaders choose candidates for contesting elections.
Parties put forward different policies and programmes: each one of us may have different opinions and views. In democracy large number of similar opinions have to be grouped together to provide a direction in which policies can be formulated by the govt. and parties do this .
–A party reduces a vast multitude of opinions into a few basic position which it supports.
–The govt. is expected to base its policies on the line taken by the Ruling party.
3.Parties make laws for the country: Though laws are passed by the legislature but most of the members belong to a party, they by the direction of party leadership, irrespective of their personal opinions.
4.Parties form and run govt.: Big policy decisions are taken by political executive that comes from the political parties.
--Political parties recruit leaders, train them and make them ministers to run the govt. in the way they want.
5. Those party who loose the elections, play role of the opposition. They voice different views and criticize govt. for its failures or wrong policies.
--opposition parties also mobilize opposition to the govt.
6.Parties shape public opinion: they raise and highlight issues.
--they do this through-pressure groups, which are the extensions of political parties and also launch movements for resolutions of problems faced by the people.
--Opinions in the society crystallise on the lines parties take.
7.Parties provide people access to govt. machinery and welfare schemes implemented by govt.
--for an ordinary citizens it is easy to approach a local party leader than a govt. official, they feel close to party even if they do not trust them.
--even parties have to be responsive to the people’s needs and demands otherwise people can reject parties in the next elections.
Q. How can we say parties are a necessity for democracy?
OR
Q. Why modern democracies cannot exist without political parties?

1.If every candidate in the elections will be independent, no will be able to make any promises to the people about any major policy changes.
2.The govt. may be formed ,but its utility will remain ever uncertain.
3.Elected representative will be accountable to their constituency for what they do in the locality.But, no one will be responsible for how country will run.
Also if we look at the non-party based elections to the Panchayats in many states, although, the parties donot contest formally, it is generally noticed the village gets split into more than one faction, each of which puts up a ‘panel’ of its candidates.
This is why we find political parties in almost all countries of the world.
RISE OF POLITICAL PARTIES
The emergence of political parties is linked to the emergence of Representative Democracies—large scale societies need representative democracy.
--as society become large and complex they also need some agencies to gather different views and various issues and to present these to the govt.
--they needed some way to bring various representatives together so that a responsible govt, could be formed.
--they need mechanism to support or restrain the govt. , make policies, justify or oppose them .
--political parties fulfill these needs that every representative govt. has.
HOW MANY PARTIES SHOULD WE HAVE—PARTY SYSTEMS
In different countries we have different political systems being followed.
There are three types of political party systems:--
1.ONE PARTY SYSTEM—In some countries only one party is allowed to control and run the govt.,these are called one party systems.
--we have this type in China.- Commuinist Party.
Any democratic system must allow at least two parties in to compete in the elections so that each party gets a fair chance to come to power..in this respect it is not a democratic option.
2.TWO-PARTY SYSTEM—In some countries power usually changes between two major parties.
Several other parties exist, contest elections and win few seats in the legislature . But only two main parties have a serious chance of winning and forming govt.
--examples are UK AND US.
MULTI-PARTY SYSTEM—If several parties compete for power, more than two parties have a reasonable chance of winning and coming to power either on their on their own or through an alliance with others.
--in India we have this system.

ALLIANCE/FRONT—When several parties join hand for the purpose of contesting elections or winning power, it is called front or alliance.
NDA—National Democratic Alliance, UPA-United Progressive Alliance are the examples.
COALITION—the govt. formed by various parties coming together in a coalition.
Present govt.—UPA govt. is an example of this.

Q. Which party system should a country choose?
Party system is not sometjing that a country can choose.
It evolves over the period of time, depending upon the nature of society, its social and regional divisions, its history of politics and nature of elections.
--each country develops a party system that ois conditioned by its special circumstances.for example in India we have evolved a multi-party system, it is because the social and geographical diversity is so large that it can not be accommodated by two-three parties.
--no system id ideal for all countries and all situations.
NATIONAL PARTIES/REGIONAL PARTIES
At present there are more than 750 political parties registered with the election commission in India.
Democracies that follow a federal system all over the world have two kinds of political parties.,
Parties that are present in only one of the federal units and the ones that are present in several units of the federations. This happens in India as well.

National parties;-those parties which which are country-wide parties are called National parties.
--these parties have their units in various states.
--by and large they follow uniform policies, programmes & strategy that is decided at the national level.
--Election Commission declares those parties as national parties which have got 6% of the total votes and have at least won 4 seats in the LokSabha.
--Election Commission offers some special facilities to large and established parties. These parties are given a unique symbols and only the official candidates of that party can use that election symbol.
--parties that get this privilege and some other special facilities are called Recognised Political Parties.
--according to this classification in India we have six national parties.
REGIONAL PARTIES:-
Aparty that secures at least 6% of the total votes in the in an election to the Legislative Assembly of a state and wins atleast 2 seats is recognized as a regional party/state party.
--some of these are all India parties that happen to have succeeded only in some states.
--parties like this are Samajwadi Party, Samta Party and Rastriya JantaDal have national level political organization with units in several states.
--some of the partie like Biju Janta Dal,Sikkim Democratic Front & Mizo National Front are conscious about their state identity.
NATIONAL PARTIES

1.INDIAN NATIONAL CONGRESS (INC)—
Popularly known as the Congress Party, is one of the oldest parties of the world.
--founded in 1885.
--Played an important role in Indian politics at the national and state level after the independence.
--Under Nehru sought to build a modern secular democratic in India.
--Ruling party at the centre till 1977 and then from 1980-1989, after which its support declined .
--A centrist party in its ideological orientation, it espouses secularism and welfare of weaker sections and minorities.
--Supports new economic reforms with a human face.--Emerged as an single largest party with 145 seats in 2004 elections and is currently a ruling as United Progressive Alliance coaltion govt. at the centre
BHARATIYA JANATA PARTY(BJP)
--founded in 1980 by reviving the Bharatiya Janata Sangh.
--wants to build a strong and modern India by drawing inspiration from India,s culture and values.
--cultural nationalism or Hindutva is an important element in its conception of Indian nationhood and politics.
--wants full territorial & political integration of Jammu &Kashmir with India, a uniform civil code for all people living in India irrespective of the religion, and ban on religous conversions.
--its support base has increased in the 1990's, it was earlier limited to north and north west and to urban areas, the party expanded its support in south, east, the north-east and to rural areas.
--came in power in 1998 as the leader of the National Democratic Alliance including state and regional parties.
--lost elections in 2004 and is the principle opposition party in the Loksabha.
BAHUJAN SAMAJ PARTY(BSP)
--formed in 1984, under the leadership of KanshiRam.
--seeks to represent & secure the power for bahujan samaj which includes dalits, adivasis, OBC's and religious minorities.
--draw inspiration from the ideas and teachings of ShauMaharaj, Mahatama Phule, Periyar Ramaswami Naicker and BabaSaheb Ambedkar.
--stands for the cause of securing interest & welfare od dalits and opperesed people.
--main base in the state of UP & substaintial presence in the states like MP, Chhattisghar, Delhi
Uttrakhand and Punjab.
--formed govt. in UP several times with support of different parties.
--in Loksabha elections in 2004 it polled about 5% votes and secured 19 seates in loksabha.
COMMUNIST PARTY OF INDIA-MARXIST(CPI-M)
--founded in 1964.
--believes in Marxism & Leninism.
--suports socialism , secularism and democracy and opposes imperialism and communalism.
--accepts democratic elections as useful means and helpful means to securing the objective of socio-economic justice in India.
--enjoys strong support in Kerela. westBengal & Tripura, especially among the poor, factory workers, farmers, agricultural laboures and intelligensia.
--critcal of new economic policies taht allow free flow of foreign capital and goods into the country.
--has been in power for 30 years in West Bengal.
--in 2004 elections it won about 6% votes and 43 seats in Loksabha.
--currently supports the UPA govt.from outside without joining the govt.
COMMUNIST PARTY OF INDIA (CPI)
--formed in 1925.
--believes in Marxism & Leninism secularism and democracy.
--opposed to the forces of secessionism and communalism.
--accepts parliamentary democracy as the means of promoting the interest of working class, farmers and yhe poors.
--became weak after the split in the party in 1964 that led to the formation of the CPI(M)
--popular in Kreela, WestBengal, Punjab, AndhraPradesh and TamilNadu.
--its support base has declined over the years, secured about 1.4%votes and 10 seates in 2004 Loksabha elections.
--adovocates coming together of all left parties to build a strong left front.
--currently supports UPA govt. from outside.
NATIONAL CONGRESS PARTY(NCP)
formed in 1999 following a split in congress party.
--supports democracy, gandhian secularism,equity, socail justice & federalism.
--wants high offices in the govt.to be confined to the natural born citizens.
--major pary in Maharashtra and has a significant in Meghalaya, Manipur and Assam.A coalition partner in the stae of Maharashtra in alliance with the congress .
--since 2004 a member of the UPA.
STATE PARTIES
Other than six national parties, most of the parties in India are classified as state parties or regional parties.
--some of these parties are all India parties that happen to have succeeded in only some states.
--parties like Samajwadi Party, Samta Party, Rashtriya Janata Dal have national political organization with
units in several states.
--some of these parties like Biju JanataDal, Sikkim Democratic Front & Mizo National Front are conscious
about their state identity.
--over last three decades the number and strength of these parties has expanded,this has made parliament of India more diverse.
--no national party is able to secure on its own a majority in Loksabha,as a result national parties are compelled to form alliances with state parties.
--since 1996, nearly every one of state parties has got an opportunity to be a part of one or other national level coalition govt.

DEMOCRACY AND POPULAR STRUGGLES

PRESSURE GROUPS:
--Pressure groups are organizations that attempt to influence govt. policies
--They do not directly control or share political power.
--these organizations are formed whith people with common occupation, interest, aspirations and opinions come together in order to achieve common objective.
These pressure groups are of two types.
SECTIONAL GROUP & PROMOTIONAL/PUBLIC INTEREST GROUPS.
Sectional:—seek to promote the interest of of a particular section/group of society.
--trade unions, business associations& professional lawyers doctors, teachers etc.
----they are sectional because they represent a particular section of a society.—workers, employees, businessmen followers of religion caste etc.
--the principal concern is the betterment & well being of its members & not of the society in general.
Public interest group:- they represent some common or general interest that needs to be defended.
--they are also called promotional group as they promote collective and not selective good.
--the members of the organization may not benefit from the cause that the organization represent. They aim to help groups other than their own members.
--in some cases the members of a public interest group may undertake activity they benefits them as well as others too.
--Eg.-:in Nepal Human rights was such organization, & in Bolivia FEDECOR, In India also we have BAMCEF
BMCEF-(Backward and Minorities Community Employees Federation)is such an organization that campaigns against caste discrimination, it addresses the problem of its members who suffer discrimination and its principle concern is with social justice and social equality for the entire society.
MOVEMENT GROUPS:
People’s movement word is used to describe many forms of collective action.
--it attempts to influence politics rather than directly take part in the electoral competition.
--these movements have loose organization.
--their decesion making is more informal and flexible.
--they depend more on spontaneous mass participation than an interest group.
--Eg.-Narmada Bachao Andolan,Movement of Right to Information,Anti-LiquorMovement, Environmental movement.
There are two types of movement groups:
SPECIFIC &GENERAL/GENERIC MOVEMENTS
Specific movements:-they are issue specific movements to achieve single objective
They work in limited frame of time and thus have usually short active life.--
Examples-The Nepalese movement for democracy arose with specific objective of reversing the king’s order that led to suspension of democracy.
In India, Narmada Bachao Andolan is also an example of this.
(This movement started with a specific issue of people displaced by the creation of sardar dam on the river Narmada.Its objective was to stop the dam from being constructed. Gradually it became a wider movement that questioned all such big dams.)
General/Generic movement:-these to achieve a broad goal in the long run.
--these are long term & involve more than one issue.
--there is no single organization that controls or guides such movements.
--Example—The Environmental movement and Women’smovements are such examples.
LOOSE UMBRELLA:-Some times these broad organizations have a loose umbrella. Various movement groups struggling on specific issues are constituent of this loose organization which coordinates the activities of a large number of people’s in our country.
Example-NAPM-National Alliance for People’s Movement is an organization of organizations.
Q. How do organizations and pressure groups influence politics?
They exert influence in variety of ways.
1.They try to public support and sy,pathy for their goals and activity by carrying out information campaign through organizing meetings,file petitions etc., they also make use of media.
2.They often organize protest activity like strike or disrupting govt. programmes.Workers organizations,employees associations etc. resort to these methods to force govt. to take notice of their demand.
3.Business groups often employ professional lobbyist or sponser expensive advertisements. Some persons from pressure groups may participate in official bodies or committees that offer advice to the govt. These groups exert influence on the political parties without being a party. They have political ideaology & political position
on major issues.
RELATIONSHIP BETWEEN POLITICAL PARTIES AND PRESSURE GROUPS
It can take different forms, direct and indirect:
DIRECT:
--In some instances the pressure groups are either formed or led by the leaders of the political parties or act as the extended arms of political parties. for eg.—trade unions and students organizations in India are either established by or affiliated to one or the other major political parties.--most of the leaders of such pressure groups are usually the activist or leaders of party.
--Sometimes political parties grow out of movements. As had happened
in Assam movement led by students against the foreigners came to an end and it led the formation of ASSOM GANA PARISHAD and the roots of DMK AND AIDMK in Tamil Nadu can also be traced to the social reform movements during the 1930 and 1940’s
INDIRECT:
--They often take positions that are opposed to each other, yet they are in negotiation with each other.
--they do raise issues which are taken up by the political parties.
--most of the new leardership of political come from interest or movement groups.
IS THE INFLUENCE OF THE ORGANISATIONS HEALTHY?
It may appear that it is not healthy for the groups that promote interest of one section to have influence in democracy.
--A democracy must look after the interest of all, not just one section. Also, it may seem that these groups wield power with responsibility.
--political parties have to face the people in elections , but these groups are not accountable to the people.
--pressure groups and movements may not get their funds and from people. Some times with small public support but lots of money they can highjack public opinion in their favour.
--POSITIVE INFLUENCE
--they have deepened democracy, put pressure on unhealthy activities in democracy.
--govt. can often come under the pressure of rich & powerful group but these public interest groups and movements perform a useful role of countering this undue influence and reminding govt. of needs and concerns of ordinary citizens.
--even social interest groups play a valueable role.
--All groups function actively, no single group can achieve dominance over society.
--if one group brings pressure on the govt. the other will counter pressure.
--the govt. hears about what people want.
--this brings a rough balance of power and accommodation of conflicting interest.

POPULAR STRUGGLES IN NEPAL AND BOLIVIA

MOVEMENT FOR DEMOCRACY IN NEPAL--Second movement for democracy.

Nepal witnessed an extraordinary popular movement in April 2006.The movement aimed at restoring democracy, it was aimed at regaining popular control over govt. from the king.

HISTORY:

Nepal a third wave country, had won democracy in 1990.

--King was formally the head of the state but the real power was excerised by the elected representatives.

--The king Birendra, was the one who accepted this transition from absolute monarchy to constitutional monarchy, he and his family was massacred in 2001.

--King Gayendra the new king of Nepal was not prepared to accept democratic rule, on feburary 2005 he dismissed the Prime minister and dissolved the popularly elected Parliament.

Events during the popular revolt:

All the political parties in the parliament formed an alliance--Seven party alliance--SPA and called for four day strike in Kathmandu, the capital of Nepal.

2. The protests turned into indefinite strike in which Maoist and various organisations joined hands.

3.People defied curfews and took to streets.

4.More than lakhs of people gathered almost everyday to demand retoration of democracy, on 21 april they served an ultimatum to the king and the leaders rejected the halfhearted concessions given by the king and struck to their demand s.

5.their main demands were--a)restoration of parliament,

b)power to an all party govt.

c)new constituent assembly.

RESULTS:

On 24th april , the king was forced to conceed to all the demands

--Girija Prasad Koirala was choosen as the new PM of the interim givt.

--The SPA & Maoist came to an understanding as to how new Constituent Assembly was to be elected.

--Parliament passed laws taking most of the powers of the king.

It was known as second movement of democracy in Nepal.

BOLIVIA'S WATER WAR-A Struggle against Privatisation of Water

--Bolivia is a small and poor country in Latin America.The WorldBank pressuried the govt. to give up its control of municiple water supply.

--The govt. sold off these rights to an MNC.The company immediately increased the prices four times.

--In January 2006 a new alliance of labour, human rights and community leaders organised a sucessful strike for four days in the city and the govt. agreed to negotiate but nothing happened. Police resorted to brutal repression when the agitation was started again in Feburary.

--Another strike was there in April and govt. imposed martial law.

--But the power people forced the officials of MNC to flee the city and made govt. to conceed to all demands of the protesters.

--The contract with MNC was cancelled and water supply was resorted to municipality at old rates.

This was known as Bloivia's water war.

DEMOCRACY AND POPULAR STRUGGLES OF NEPAL & BOLIVIA
The two incidents have following similarities
In both cases political conflict led to the popular struggles.
Both the cases involved mass mobilization.
Both instances involved critical role of political organizations.
DIFFERENCES
1.Nepal was struggling to establish democracy while in Bolivia the struggle involved claims on the elected govt.
2.In Bolivia struggle was about one specific policy, while struggle in Nepal was about the foundations of the country’s politics.
MAJOR ELEMENTS FOUND IN DEMOCRACY
1.It evolves through popular struggles. If significant decisions are through consensus than it is an exceptional situation. Democracy usually involve conflicts between those groups who have excercised power and those who aspire for share in the power. This happens when the country is going through transition to democracy, expansion of democracy or deepening of democracy.
2.Democratic conflicts are resolved through mass mobilization. Some times it is possible that the conflicts are resolved by the existing institutions like parliament or judiciary but when there is a deep dispute, very often these institutions get involved in the dispute and the resolution has to come from outside , from people.
3.The conflicts and mobilizations are based on new political organizations, these include—political parties, pressure groups and movement groups.

MOBILISATION AND ORGANISATIONS.
Q. Which were the major organizations involved in mobilization of the masses in Nepal & Bloivia?
In Nepal:
a) SPA-Seven party alliance of big parties.
b) Nepalese Communist Party—Maoist.
c) All major labour unions and their federations
d) Organizations like organization of indigenous people, teachers, lawyers & human right groups extended their support.
In Bolivia
There was no political party but it was led by ,
a) A n organization-FEDECOR-it comprised of local professions, engineers &environmentalists.
b) Ffederation of farmers.
c) Confederation of factory workers union
d) Middle class students and city’ growing population of homeless children.

Q. What role is played by the organizations in any big struggle?
The organizations play their role in two ways—Direct & Indirect
Direct: One way of influencing the decision in democracy is direct participation in competitive politics. This is done by creating parties, contesting elections and forming govts. Citizens participate through voting.
INDIRECT:
There are many indirect ways in which people can get govt. to listen to their demands or their point of view. This can be done by forming an organization and undertaking activities to promote their interest or their viewpoints. These are called Interest or Pressure groups.
trol of municipal water supply.

NOTES OF POLITICAL SCIENCE CHAPTERS.

Dear students you will have to go to Ms. Saini' blog for notes of political science chapters--3&4.
There is link on my blog at right side .You can go to her blog from my blog also.

GLOBALISATION AND THE INDIAN ECONOMY

LIBERALISATION OF FOREIGN TRADE AND FOREIGN INVESTMENT POLICY

LIBERLISATION: Removing barriers or restrictions set by government is known as liberalization.It has two components.,
1.goods could be imported and exported easily.
2. foreign companies could set up factories and offices here-in India.
TRADE BARRIER—Tax on imports.It is called so because some restriction has been setup.
--govt. can use barriers to increase or decrease(regulate)foreign trade and to decide what kind of goods and services and how much of each should come into the country.
Q. Why did the Indian govt., after independence had put barriers to foreign trade & investments?
--This was considered necessary to protect the producers with the country from foreign competition.
--As the industries were just coming up in 1950’s and 1960’s and the competition from imports at that stage would not have allowed these industries to come up.
--India allowed the imports of essential items as machinery, petroleum, fertilizers etc.
CHANGES AFTER 1991.----WHY?
Around 1991, some far-reaching changes were made in India
The govt. decided that the time has come for Indian producers to compete with producers around the globe.
--It felt that the competition would increase performance of the producers with in the country since they would have to improve their quality.
--Thus the barriers on foreign trade &foreign investments were removed to a large extent.
--This was Liberalisation and with it business were are allowed to take decisions freely about what they wish to export to import.
--The govt. imposes much less restriction than before, & therefore is said to be more liberal.
WORLD TRADE ORGANISATION
It is an organization whose aim is to liberalise international trade.
--It was started at the initiative of developed countries.
--It establishes rules regarding international trade and sees that these rules are obeyed.
--149 countries are at present members of the WTO.
--Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed nations have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers.
IMPACT OF GLOBALISATION
In the lasy fifteen years, globalisation of the Indian economy has come a long way.
1.MNC’s have increased their investments over the past 15 years, which means that investing in India has been beneficial to them.
a)MNC’S have invested in cell phones, automobiles, electronic, soft drinks, fast foods & in the areas such as banking in urban areas. Thses products have large number of well off buyers.
b) In these industries various new jobs have been created.
c)local companies who are supplying them raw material have also prospered.

2. Several top Indian companies have been able to benefit from the increased competition.
a) They have invested in newer technology and production methods & raised their production & standards.
some have gained from successful collaborations with foreign companies.
b)Globalisation has enabled some large companies to emerge as multinationals themselves as.,Tata motors, Ranbaxy. Asian Paints, Sundaram Fasteners (nuts& bolts).

3. Globalisation has also created new opportunities for companies providing services, particularly those involving IT. The Indian companies are the host of services like, data entry, accounting, administrative tasks, engineering are now being done cheaply in India & are exported to the developed countries.

4.Globalisation& competition among producers-both local and foreign has been of advantage to the consumer, particular of the well off section.
a)Now there is greater choice.
b) They enjoy improved quality and lower prices.
c) As a result these people, today enjoy much high standards fo living than they had before.
BUT THE IMPACT OF GLOBALISATION HAS NOT BEEN UNIFORM.
There are several drawbacks also.

1.Small producers, compete or perish—for a large number of small producers & worker it has posed major challenges.
-- Rising competition has led to shutting down of many units and many workers have been rendered jobless.
--Batteries, capacitors, plastics, toys, dairy products and vegetable oil are the examples of the industries which have been hit hard due to hard competition.
2. Competition and uncertain Employment—Globalisation & pressure of competition have substantially changed the lives of workers, faced with growing competition, most employers prefer to employ workers flexibly.
-This means that the workers are no more secure; they have long working hours, work night shifts on regular basis during peak season, no job security, no benefits as of pension, overtime, medical leave etc.
-Workers are denied their fair share of benefits brought about by globalisation.
-With this the conditions of work in the organized sector has come to resemble that of the unorganized sector.
STEPS TO ATTRACT FOREIGN INVESTMENT
In the recent years central and state govt. in India is taking some special steps to attract foreign companies to invest in India.
--Industrial zones -called SEZ’s, Special economic zones are being setup.
--SEZ’s are to have world class facilities like electricity, water road transport, storage, recreational and educational facilities.
--The industries which will set up their production units here will not have to pay taxes for initial five years.
these companies are allowed to ignore many of rulers that aim to protect the workers i.e., instead of hiring workers on regular basis, companies hire workers flexibly for short period during the peak period.
--this is done to reduce the cost of labour for the company.
STRUGGLE FOR A ‘FAIR GLOBALISATION’
Fair Globalisation: this would create opportunities for all &also ensure that the benefits of globalisation are shared better.
ROLE OF THE GOVERENMENT IN MAKING ‘FAIR GLOBALISATION.’
The govt. can play a major role in the making this possible.
1.Its policies must protect the interests, not only of rich & powerful but all in the country.
2.the govt. can ensure that labour laws are properly implemented and the workers get their rights.
3.It can support small producers to improve their performance till the time they become strong enough to compete.
4.If necessary govt. can use trade & investment barriers.
5.It can negotiate at the WTO for the ‘fairer rules’.
6.It can also align with other developing countries with similar interests to fight against the domination of the developed countries in WTO.
In past few years, massive campaigns and representations have influenced important decisions relating to trade & investments at WTO. This shows that even people can also play an important role in the struggle for fair globalisation.

GLOBALISATION AND THE INDIAN ECONOMY

GLOBALISATION AND THE INDIAN ECONOMY
Today we have wide choice of goods and services before us.
There is explosion of brands.
It is a recent trend and in a matter of years our markets have been transformed.
WHAT ARE REASONS / FACTORS FOR THESE RAPID TRANSFORMATIONS?
Middle of twentieth century:
--Production was largely organized with in the countries
--What crossed the boundaries was mainly the raw materials, food stuff and finished products.
--Trade was the main channel connecting distant countries.
EMERGENCE OF MNC’S—Multi national corporations
--It is a company that owns or controls production in more than one nation.
--MNC’s set up offices & factories for production in the regions where they can get cheap labour and other resources.
--This is done so that the cost of production is low and the MNC’s can earn greater profits.
--Many MNC’s have wealth exceeding the entire budgets of the developing countries , with such enormous wealth they have immense power & influence.
FACTORS/ CONDITIONS TO SET UP A MNC
MNC’s set up production where it is
-- close to the markets.
--where there is skilled labour available at low costs.
--where the availability of other factors of production is assured.
--They look for the government policies that look after their interests.
INVESTMENT:
The money that is spend to buy assets such as land, building, machines and other equipment is called investment.
The investment made by MNC’s is called foreign investment.
Q. Why do MNC’s set up production jointly(with local companies)?
The benefits to the local company of such joint production is two-fold.
MNC’s can provide money for the additional investments like buying new machines for faster production.
2.MNC’s might bring them latest technology for production.

VAROIUS WAYS IN WHICH MNC’s ARE SPREADING THEIR PRODUCTION:
There are variety of ways in which MNC’s are spreading their production and interacting with local producers in various countries across the globe. They do this by various means:

1.By setting up partnerships with local company..
2.By closely competing with local companies or buying them -the most common route for MNC investments is to buy up local companies and to expand production. With their huge wealth they can easily do so..
3. By using local companies for supply - Large MNC’s in developed countries place orders for production with small producers.Eg., garments, footwear, sports item etc. The products are supplied to MNC’s which then sell these under their brand names ti the customers.
As a result, production in these widely dispersed locations is getting interlinked.
MNC’s are exerting strong influence on production at these distant locations.

WAYS BY WHICH MNC’s CONTROL PRODUCTION.
Top MNC’s have enormous wealth and at times even bigger than the budget of the developing countries.
--Another way in which they control production is that MNC’s in the developed countries place orders for production with small producers .
--The products are supplied to the MNC’s, which then sell these under their brand names to the customers.
--These MNC’s have enormous power to determine price, quality, delivery. and labour conditions for these distant producers.
TRADE AND FOREIGN TRADE
HISTORY:
--Various trade routes connecting India and South Asia to markets both in the East and West & extensive trade that took place along these routes.
--It was trading interest which attracted various trading companies such as East India Company to India.
Q. What is the function or purpose of foreign trade?
1--Foreign trade creates an opportunity for the producers to reach beyond the domestic markets i.e., markets of their own countries.
2--Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.
3—For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.
EFFECTS OF FOREIGN TRADE:
There are various positive & negative effects of foreign trade. Its positive effects are
1.With the opening of trade, goods travel from one market to another.
2. Choice of goods in the markets rises.
3. Prices of similar goods in the two markets tend to become equal.
Producers in the two countries now closely compete against each other even though they are separated by thousands of miles.
Foreign trade thus results in connecting the markets or integration of markets in different countries.The economies of various countries are getting interlinked.
EFFECTS OF FOREIGN TRADE THROUGH THE EXAMPLE OF CHINESE TOYS IN INDIAN MARKETS—Chinese toys in India.
Chinese manufacturers got an opportunity to export plastic toys to India.
Q. How did it benefit to India & to China?
To China: Chinese got an opportunity to trade and expand their business.
--As they were selling it at high selling price, they got high profits.
--Within an year 70-80% of toys shops have replaced Indian toys with Chinese toys.
To India:Indian buyers have more choice now.
--Prices are cheaper now.
--designs are new.
--But due to the cheaper prices & new designs , the Indian toy makers face losses, as their toys are selling much less.

Q. What is Globalisation?
It is the process of rapid integration or interconnection between countries.
--There is one more way through which countries are becoming closer and that is Movement of people between countries. People usually move from one country to another in search of jobs or better education.This is also a result of Globalisation.
.
MNC’S are playing major role in the Globalisation process.
MNC’s have been looking for locations around the world , which would be cheap for their production
--As a result of greater foreign investment and greater foreign trade ,has been greater integration of production and markets across countries.
--More and more goods and services, investments and technology are moving between the countries.
--Most regions of the world are in closer contact with each other than a decade back
--Foreign investment in the countries has been rising.
--Foreign trade between the countries has been rising.
--The activities of most of the MNC’s involve substantial trade in goods and also services..
FACTORS THAT HAVE ENABLED GLOBALISATION
TECHNOLOGY: Rapid improvement in technology has been one major factor that has stimulated globalisation process. Due to technology there has been improvements in various fields as in ,
1.TRANSPORTATION TECHNOLOGY.
a) In past fifty years this technological improvements has led to faster delivery of goods across long distances at lower costs.
b) Containers for transport of goods: have led to huge reduction in port handling costs, increased the speed with which goods can reach markets.
c) Airlines: the cost of air transport has fallen, this has enabled much greater volumes of goods being transported by airlines.
2.INFORMATION AND COMMUNICATION TECHNOLOGY:
IT, has played a major role in spreading out production of services across countries.
Remarkable improvements have in the areas of telecommunications, computers &internet.
a)Telecommunications: facilitated by the satellite communication devices, facilities as telegraph, telephone including mobiles, fax are used to contact around the world, to access the information instantly,& to communicate in the remote areas.
b)Computer and internet: computers have entered in almost all the fields.
Internet allows one to share information on almost every thing, we can send instant e-mail and talk through voice-mail across the world at almost negligible cost.

CONSUMER RIGHTS-CH-5 ECONOMICS

WELL INFORMED CONSUMERS….
When we as consumers become conscious of our rights, while purchasing goods& services, we will be able to discriminate and make informed choices.
Q. Describe some duties which as a consumer we should observe.
If customers want their rights they should also observe duties also.
After a purchase we must insist on cash memo.
While purchasing goods we must be carefull about the quality of goods as well the guarantee of products ans services.
We should buy certified goods—ISI, AGMARK etc.
Consumers should form Consumer Awareness Organisations in their localities to help & aware others.
Consumers must know their rights & must exercise them too.
ISI AND AGMARK
These are logos and certifications which help consumers get assured of quality while purchasing goods & services.
--The organizations that monitor and issue these certificates allow producers to use their logos provided they follow certain quality standards.
--It is not compulsory for all producers to follow standards. However the products that affect health and safety of consumers or the products of mass consumption, it is mandatory on the part of producers to get certified by these organizations.
(LPG Cylinders, food colours and additives, cement, packaged drinking water etc.)
Q. After 20 years of the enactment of COPRA, consumer awareness in India is spreading but slowly. Discuss.
The consumer redressal process is becoming cumbersome,expensive and time consuming because
1.Many a times consumers are required to engage lawyers.
2.These cases require time for filing and attending the court proceedings etc.
3.In most purchases cash memos are not issued hence evidence is not easy to gather.& most purchases in the market are small retail sales.
4.The existing laws are also not very clear on the issue of compensation to consumers injured by defective products.

CONSUMER RIGHTS CH-5 ECONOMICS

CONSUMER RIGHTS
Consumer—When we pay a price for a commodity or service & use it ,we become consumer.
We participate in the market both as producer and consumers
Q. Why do we need rules and regulations in the market?
--Rules and regulations are required in the market for protecting the environment .
--As in the informal sector moneylenders use various technique to bind the borrower, similarly many people who work in the unorganized sector have to work at low wages and have to accept conditions which are not good for their health. To prevent such exploitation we need rules & regulations.
--These are required for the protection of the consumers in the market place.
--Markets do not work in a fair manner when producers are few and powerful where as consumers purchase in small amounts and are scattered.
--Companies with huge wealth , power and reach can manipulate the markets in various ways—as false information through catchy advertisements, discounts, gift offers.
The above said conditions require rules and regulations.
EXPLOITATION IN THE MARKET PLACE/COMMON FORMS OF CONSUMER EXPLOITATION:
Exploitation in the market happens in various ways, as
--Underweight& under measurement The goods sold in the market are sometimes not measured or weighted correctly.
--Sub Standard Quality: Selling defective home appliance and expired medicines are its examples.
--High Prices: some times seller charge higher than the MRP.
--Duplicity: Fake and duplicate items are sold in the name of genuine goods.
--Adulteration& Impurities: Adulteration is done in the costly items as in oil, ghee, milk, spices etc. to earn higher profits. This effects consumers health and their money goes waste.
--Lack of safety devices: Electronic goods produced locally lack the required inbuilt safeguards, which may cause accidents.
--Artificial scarcity or shortages: To earn more profits business create artificial scarcity by hoarding and sell the same at higher price.
--False or incomplete information: sellers mislead people by giving wrong information about the products, price, quality, safety, expiry date, maintenance costs etc.
--Unsatisfactory after sales service; many suppliers do not provide satisfactory after sales service in case of expensive electronic equipments, home appliances and cars etc.
--Rough behavior & undue conditions: consumers are often harassed in matters like LPG &telephone connections and in getting licensed items.
Q. Why do consumers get exploited or factors causing exploitation of consumers:
1.limited informatiom.
2.limited supply.
3.limited competition.
4.low literacy or awareness.

CONSUMER MOVEMENT —Factors &Evolution
1. Consumer movement in India arose out of dissatisfaction of the consumers as the sellers were indulging in many unfair practices.
2. There was no legal system available to consumers to protect them from exploitation in market place.
CONSUMER MOVEMENT IN INDIA.
1.As a social force it originated with the necessity of protecting and promoting the interests of consumers against unethical and unfair trade practices.
2.Rampant food shortages, hoarding, black marketing , adulteration of edible oil gave birth to the consumer movement in an organized form in 1960’s.
3.Till 1970’sconsumer organizations were largely engaged in writing articles and holding exhibitions.
4.These organizations formed consumer groups to look into the mal practices in the Ration shops and over crowding in the Road Passenger Transport.
5. More recently India has witnessed an upsurge in the number of organized consumer groups. There are today more than 700 consumer groups in the country of which only about 20-25 are well organized & recognized for their work.
6.India has been observing 24 December as National Consumers’s Day as it was on this day that the Indian parliament enacted COPRA in 1986.
6. India is one country that has exclusive courts for consumer redressal.

CONSUMERS INTERNATIONAL
In 1985 UN adopted the UN guidelines for consumer protection.
This was a tool for nations to adopt measures to protect consumers and for consumer advocacy groups to press their governments to do so.
At the international level it has become the foundation for consumer movement.
Today Consumer International has 240 organisations from over 100 countries.
COPRA—CONSUMER PROTECTION ACT
1. This act was passed in 1986, on 24th December, and since then this day is celebrated as Consumers Day in India.
2. This act was passed to bring pressure on business firms as well as government to correct business conduct , which may be unfair and against the interest of the consumers at large.
3. Under COPRA, a Three –Tier Quasi-Judicial machinery at District, State and National levels have been setup for redressal of consumer disputes.
--District level court deals with the cases involving claims upto Rs 20 lakhs, the State level courts take cases between 20 lakhs to 1 crore& the National leveldeals with the cases involving claims exceeding 1 crore.
If the case is dismissed at Distric level court, the consumer can also appeal in state and than in National level courts.
4. The enactment of COPRA has led to the setting up of separate departments of Consumer Affairs in central & the state govts. Through them the govt. spread information about the legal process which consumer can use. They work through media.
CONSUMER RIGHTS…….
1.Safety is everyone’s right:
While using many goods& services, we as consumers, have a right to be protected
against the marketing of goods and delivery of services that are hazardous to life and property.
--Producers need to strictly follow the required rules and regulations.
--There are many goods and services that we purchase require special attention to safety. For example..pressure cookers have a safety valve which if defective can cause accident, LPG gas cylinder should be sealed and leakproof.
2.Right to be Informed: --When we buy a commodity, we find details given on the packing, These details are about ingredients used, price,batch no., date of manufacture, expiry date & address of the manufacturer.
We have right to be informed about the above mentioned informations, so that consumers can complain and ask for composation or replacement in case product proves to be defective
----These days this right has been expanded to cover various services provided by the govt. In October 2005, the govt of India enacted RTI-right to information act, which insures its citizens all the information about the functions of govt. department
3.Right to Choose: Any consumer who receives a service in whatever capacity, regardless of age, gender and nature of service, has a right to choose whether to continue to receive service.
4. Right to Seek Redressal: Consumers have this right against unfair trade practices and exploitation. .If a damage is done to the consumer, she has the right to get compensation depending on the degree of damage.
5. Right to Represent:
--COPRA has enabled us to have the right to represent in the consumer courts.
--There is a three-tier quasi-judicial machinery at district, state and national levels.--There are various organisations locally known as Consumer Forums or Consumer Protection Council, they guide consumers on how to file cases in the consumer courts: they also they also receive financial support from the govt. to create awareness..

UN Day ! 24 OCTOBER

NOTES OF CH-2- ECONOMICS

Url of second chapter of economics:
http://socialsciencelearning.blogspot.com

FORMAL AND INFORMAL SECTORS-WHO GETS WHAT?--MONEY AND CREDIT

FORMAL AND INFORMAL CREDIT –WHO GETS WHAT?
Importance of formal and informal sectors in urban areas
Poor households-85% from informal sector &15% from formal.
Households with few assets-53% from informal &47% from formal.
Well-off households-28% from informal & 72% from formal.
Rich households-10% from informal &91% from formal.

**This shows that rich households are availing cheap credit from formal lenders whereas the poor households have to pay price for borrowing.
**All this suggests that the formal sector still meets only about half of the total credit needs of the rural people & remaining are met by the informal sector.
**Similar pattern is also seen in the rural areas.
Q.Why does formal sector need to lend more?
1.As most loans from informal lenders carry a very high rate of interest and do little to increase the income of the borrowers. Thus it is necessary that the banks and cooperatives increase their lending particularly in the rural areas, so that the dependence on informal sources of credit reduces.
2.While formal sector loans need to expand, it is also very necessary that everyone receives these loans. At present it is the richer households who receive formal credit whereas the poor have to depend on the informal sources. It is important that the formal credit is distributed more equally so that the poor can benefit from the cheaper loans.
Q. Why do you think that share of formal sector is higher for the richer households compared to the poorer household?
This is mainly because rich people have collaterals and therefore they can easily fulfil the requirements of documentations.
Q. Why are poor households still dependent on the informal sources of credit?
There are several reasons for it as;
1.Banks are not present every where in rural India.
2.Even when they are present, getting loan from them is much more difficult than taking a loan from informal sources, as they require proper documents and collateral.
3. Informal lenders know the borrowers personally and hence are often willing to give a loan with collateral, & the borrowers can, if necessary, approach the lender even without repaying their earlier loans.
NEWER WAYS—SHG’s
In the recent years people have tried new ways of providing loans to the poor.
The idea is to organize rural poor, in particular women into small Self Help Groups and pool their savings.
Q.What is an SHG?
A typical SHG has 15-20 members usually belonging to a neighbourhood, who meet and save regularly.
--Saving per month varies from 25-100 rupees or more depending upon the ability of the people.
--Members take small loans from group itself to meet their needs.
--The group charges interest but it is still less than what a moneylender charges.
--After year or two if the group is regular it becomes eligible for availing loans form the banks. Loan is sanctioned in the name of the group and is meant to create self employment opputunities for all its members.
--Loans are provided for releasing mortgaged land, for meeting working capital needs as buying seeds,fertilizers,raw materials, for acquiring assets like sewing machine, handlooms, cattle, etc.
--Important decisions regarding the savings, loan activities are taken by the group members.
The group decides –the purpose, amount, interest to be charged, repayment schedule etc.
Non repayment is taken seriously, because ofthis feature of repayment banks are willing to lend loan especially to women when organized in SHG.even when they have no collateral as such.

Q.Why SHG’s are becoming popular?
SHG’s are becoming popular for the following reasons:
1.They help borrowers overcome the problem of lack of collateral.
2.They can get timely loans for variety of purposes and at a reasonable interest rate.
3. They are building blocks of the organization of the poor.
4. It helps women to become self-reliant.
5.The regular meetings of the group provide a platform to discuss and act on various social issues as health, nutrition, domestic violence, etc.

Q Analyse the role of credit for development?
Credit plays a very positive & crucial role in the development.
--It helps in self-development and self-reliance.
--It helps in growth and expansion of industries and business.
--It boosts production capacity of economy and in turn leads to capital formation.
--It also helps in speeding the process of industrialization.

DIFFERENT SITUATIONS IN CREDIT--MONEY AND CREDIT

CREDIT--(LOANS)--A large number of transactions in our day to day activities involve credit in some form or the other.
CREDIT:it refers to an agreement in which lender supplies the borrowers with money, goods, services in return for the promise of future payments.
Credit plays a vital and positive role as well as a negative role.
Whether credit will be useful or not depends upon the risks in the situation & on whether there is some support, in case of loss.
Credit—in its negative role—(debt-trap)
In the rural areas the main demand for the credit is for the crop production. Crop production involves considerable cost on seeds, fertilizers, pesticides, water, electricity, repair of equipment etc..
Farmers usually take crop loans at the beginning of the season and repay loan after harvest.
Repayment of the loan is dependent on the income from farming.
At times repayment of the loan becomes difficult and credit instead of improving the earnings,
pushes the borrower into a situation from which recovery is very difficult & painful .
this situation is called DEBT TRAP..
TERMS OF CREDIT
Q. What do you understand by terms of credit?
--Interest rate
--collateral
--documentation requirement
--mode of payment together comprise terms of credit.
These terms of credit vary substantially from one credit arrangement to another.
They may vary depending on the nature of lender and borrower.

Every loan agreement specifies an interest rate which the borrower has to pay to the lender along with the repayment of the principal.
In addition to this lenders may demand COLLATERAL(security) against the loans.
COLLATERAL—is an asset that the borrower owns such as land, building, vehicle, livestocks, deposits with banks and uses this as a guarantee to a lender until the loan is repaid.
If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain the payment.
Q. Why do lenders ask for collateral while lending?
It is to ensure repayment and is a security of the lender.

VARIOUS SECTORS OF THE ECONOMY

People obtain loan through various sectors.
There are two sectors which offer loans—Formal and Informal sector.
FORMAL SECTOR / INFORMAL SECTOR
1.Formal sector includes Banks &Cooperatives whereas Informal sector includes moneylenders, traders, employers, relatives and friends etc.
2.RBI—Reserve Bank of India supervises the activities of formal sector and keep the track of their activities but there is no one supervise the functioning of informal sector.
3.Periodically banks have to submit information to the RBI on how much they are lending and to whom, at what interest rate, etc., on the other hand informal sector can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back.
4. Compared to the formal sector most of the informal lenders charge a much higher interest on loans,& thus cost to the borrower of the informal loans is much higher.
FORMAL SECTOR—FEATURES
--Includes banks & cooperatives
--RBI supervises the functioning of formal sources of loans—To see that the bank maintains a minimum cash balance and monitors that these banks give loans not just to profit-making bussiness and traders but also to small cultivators , small scale industries , to small borrowers etc.
--periodically banks have to submit information to RBI of their activities.
INFORMAL SECTOR—FEATURES
--Includes money lenders, traders, employers, relatives & friends etc.
-- there is no one to supervise their credit activities.
--can charge whatever rate of interest.
--there is no one to stop them from using unfair means to get their money back.
Q. How does high rate of interest affect the borrower?
Though informal sector is catering 48% of credit needs yet it has certain disadvantages for which formal sector has to expand its activities.
--Compared to the formal lenders most of the informal lenders charge a much higher interest on loans it means that the cost to the borrower of the informal loans is much higher.
--higher cost of borrowing ,it means that larger part of earning of the borrowers is used to repay the loan & they have less income left for themselves.
--the high rate of interest of borrowing means that the amount to be repaid is greater than the income of the borrower& it can lead to increasing debt and debt trap.
--people who might wish to start an enterprise by borrowing may not do so because of the high cost of borrowing.
For these reasons banks &cooperatives need to lend more. As it would lead to higher incomes and many people could then borrow cheaply for a variety of needs.(they could grow crops, do business, setup small industries etc.
Cheap and affordable credit is crucial for the country’s development.

MONEY AND CREDIT--CH3- ECONOMICS

Q.What is money?
Money acts as an intermediate in the exchange process & it is called medium of exchange.
In many of our day to day transactions, goods are being bought & sold with the use of money.
--at times we do exchange services with money.
--use of money has made things easier to exchange as we can exchange it for any commodity we need.
Q.Why transactions are made in money?
The reason as to why transactions are made in money is that , a person holding money can easily exchange it for any commodity or service that he or she wants.
Q. What is double coincidence of wants?
When in the exchange, both parties agree to sell and buy each others commodities it is called double coincidence of wants. In the barter system double coincidence of wants is an essential feature.
FORMS OF MONEY
In the earlier times, before the introduction of coins, a variety of objects were used as money. Since ancient times we Indians used metallic coins of –silver, gold & copper—a phase that continued into the last century.
In the modern times
Modern forms of money include currency—paper notes & coins.
--it is not made of precious metals as gold, silver ,copper
--like grains, cattles etc. it is of not of day to day use.It is without any use of its own.
Why have we accepted it as medium of exchange?
--It is accepted as a medium of exchange because the currency is authorized by the govt. of India
--RBI issues notes on the behalf of central govt.
--the law legalizes the use of rupee as a medium of payment that can not be refused in settling.
transactions in India.
DEPOSITS IN BANKS
--People need only some currency for their day to day needs.For instance workers who receive their salaries at the end of each month, have some extra cash.They deposit it with the banks by opening a bank account in their name.
Bank accept the deposits and also pay an interest rate on the deposits.
Q. Why do people deposit money in the banks?
People deposit money in the banks because :
it si safe with the banks
--it earns an interest.
--people also have the provision to withdraw money as and when they require.
Q. What is Demand deposit?
--Since the deposits in the banks accounts can be withdrawn on demand, these deposits are called demand deposits.
--Demand deposits offer another facility that is the facility which lends it an essential characterstics of money, ie.,the payment made by cheques.
The payer who has an account with the bank, makes out a cheque for a specific amount.
This facility of cheques against demand deposits makes it possible to directly settle payments with the use of cash.
--Since demand deposits are accepted widely as a means of payments,along with currency,they constitute money in the modern economy.
Q. What is a cheque?
Cheque is paper insturcting the bank to pay a specific amount to the person in whose name the cheque has been made.
Q.Why demand deposits are considered as money?
Because they share essential features of money.
LOAN ACTIVITIES OF BANKS.
Q.What do banks do with the deposits which they accept from the public?
Banks keep only a small proportion of their deposits as cash with themselves, as a provision to pay the depositiors who might come to withdrawfrom the bank on the given days.
--These days Indian banks hold about 15% of their deposits as cash.
--Banks use their major portion of the deposits to extend loans, there is huge demand of loans for various economic activities.
BANKS
--Banks mediate between those people who have surplus funds (depositors) and those who are in need of those funds(the borrowers).
--banks charge higher rate of interest on the loans than what they offer on deposits.The difference between what is charged from borrowers and what is paid to thee depositors is their main source of income.
CREDIT--LOANS
Alarge number of transactions in our day to day activities involve credit in some form or the other.
CREDIT:
it refers to an agreement in which lender supplies the borrowers with money, goods, services in return for the promise of future payments.

LIST OF MAP ITEMS FOR CLASS X EXAMINATION(BOARD)

MAP TOPICS FROM HISTORY.
Page-6-Political map of Europe
Europe after the congress of Vienna-1815
1.Sardinia
2.Kingdom of tow Sicillies
3.Austrian Empire-Austria,Hungary&Galicia.
4.Portugal
5.France
6.Spain
7.Ottoman Empire
8.Kingdom of Papal state-Rome.

Page –53-Nationalism in India—1918-1930.
For location & labelling only
1.Indian national congress sessions-Calcutta-1920, Madras-1927, Lahore-1929
2.Important centres of Indian national movement
(Non cooperation &Civil disobedience movement)
i Chauri-chaura incident(UP) calling of NCM.
ii Bardoli (Gujrat) no tax campaign.
iii Dandi (Gujrat) Civil disobedience movement.
iv.Champaran (Bihar) movement of Indigo planters.
v.Amritsar (Punjab) Jallianwala bagh incident.
For identification only
3.Main centers of overseas trade in the western coast and eastern coast of India (page 91)
Goa, Surat, Madras & Masulipatnam
4.Large-scale industrial regions in India, 1931 (page-123)
Bengal, Bombay, Madras etc.


GEOGRAPHY
NOTE—Items of locating&labelling may also be given for identification.

CHAPTER-1
Resources and development
Identification only: major soil types.
CHAPTER-3
Water resources
Locating and labeling-dams—Salal, Bhakra Nangal, Ttehri, Rana Pratap Sagar, Gandhi Sagar, Sardar Sarovar, Rihand, Hirakund, Ramagundam, Nagarjun Sagar, Tungbhadra, Koyana & Periyar Dam
CHAPTER-5
Minerals & Energy Resources
Minerals for identification only.
1.Iron ore mines-Mayurbhanj, Durg, Bailadila, Bellary and Kudermukh.
2.Bauxite mines-Koraput, Katni,Amarkntak, Bilaspur.
3.Manganese mines-Sundergarh, Balaghat, Shimoga&Nagpur.
4.Mica mines-Ajmer, Beawar,Nellor, Gaya, Hazaribagh.
5.Coal mines-Raniganj,Jaharia,Bokaro,Talcher,Korba,Singrauli,Singareni&Neyvali.
6.Oil fields-Digboi,Naharkatia,MumbaiHigh,Bassian,Kalol&Ankaleshwar.
POWER PLANTS—Locating & Labelling only
Thermal-Namrup,Loktak,Bongaigaon,Barauni,Harduaganj,Chandrapura,Korba,Delhi,Satpura,Bhusawal,Uran,Ramagundam,Vijayawada&Tuticorin.
Nuclear-
Narora,Rawabhatta,Kakarapara,Tarapur,Kaiga&Kalpakkam.
CHAPTER-6
Manufacturing industries.—Locating &Labelling only.
1.Cotton textile industries-Mumbai,Pune,Aurangabad,Indore,Ahemdabad,Surat,Agra,Kanpur,Moradabad,Chennai,
Coimbatore,Madurai.
2.Wollen Industry-Srinagar,Amritsar,Ludhiana,Panipat,Bikaner,Kanpur,Mirzapur&Jamnagar.
3.Silk Industry-Baramula,Anantnag,Srinagar,Murshidabad,Bankura,Kolar,Mysore&Banglore.
4.Iron&Steel Industry-Burnpur,Durgapur,Bokaro,Durgapur,Jamshedpur,Raurkela,Bhilai,Vijayanagar,Bhadravati,Vishakhapatnam&Salem.
5.Software Technology Parks-Srinagar,Mohali,Nodia,Jaipur,Gandhinagar,Indore,Mumbai,Pune,Guwahati,Kolkata,Bhubaneshwar,Vishkhapatnam,Hyderabad,Banglore,Mysore,Chennai,Tiruvanthapuram.
CHAPTER-7
Lifelines of National Economy—Identification only.
Golden-Quadrilateral, North-South Corridor & East-West Corridor.
National Highways-NH-1, NH-2, NH-3 , NH-5, NH-7, NH-8, NH-15, NH-17
Locating&Labelling:

Mojor ports-Kandla,Mumbai,Jawahar Lal Nehru,Marmagao,NewManglore,Kochi,Tuticorin,Chennai,Vishakapatnam,Pradip,Haldia,&Kolkata.
International Airports:
--Amritsar(RaniJhansi)
--Delhi(IndiraGandhi International Airport)
--Mumbai(Chattarpati Shivaji)
--Tiruvanthapuram(Nedimbachery)
--Chennai(Meena Bakkam)
--Kolkata(Netaji Subhash Chandra Bose)
--Hyderabad.

ASSIGNMENT ON FEDERALISM

ASSIGNMENT ON FEDERALISM
Q1. Define Federalism, jurisdiction, coalition govt.
Q2.Write key features of federalism.
Q3.There are two kinds of routes through which federations have been formed.Write about them and give examples….(Hint-coming together & holding together federations)
Q4.Federal system has dual objectives .What are these?
(Hint—unity & accommodating diversity)
Q5.Our constitution has clearly provided three-fold distribution of legislative powers between the union & state govts. Explain how it has been done?
(Hint-three lists)
Q6.How we make change in the power sharing arrangement?
Q7.How is dispute related to power sharing solved?
Q8.What is the source of income of the Union and State govt.?
Q9.What differences do you see in the political map of 1947 and that of 2006?
Q10.Some states were created not on the basis of language but to recognize the differences based on culture, ethnicity or geography. Name them.
Q11.What is the language policy as has been laid down by our constitution?
Q12.How is Indian language policy different from that followed in SriLanka?
Q13. How many languages have been reconised as Scheduled languages/
Q14. Write about Centre-State relations before & after 1990.
Q15.There has been a new trend, a new culture of power sharing. What is it & what has led to it? OR
Federal power sharing is more effective today than it was in early years after the constitution came into force. How can we say that?
Q16.How can we say that India is the most diverse country in terms of language, in the world?
Q17. What is decentralization ? what is the basic idea behind it?
Q18. Why do we need decentralization in India?
Q19.Describe decentralization of power in rural and urban areas.
Q20. What are the advantages of system of the local govt. in India?
Q21.Write the difficulties faced in the functioning of the local self govt.
Q22.Write about the power sharing experiment undertaken in Brazil

url for history notes.

http://socialsciencelearning.blogspot.com

Notes on fedralism ch-2

DECENTRALISATION IN INDIA
Decentralisation—When power is taken away from central & state govt. and given to local govt. it is called decentralization.
Why decentralization is required in India?
A vast country like India can not run only through two-tiers.
--States in India are as large as independent countries of Eroupe.
--In terms of population , UP is bigger than Russia and Maharashtra is about as big as Germany.
--Many of these states are internally very diverse .Therefore with this rationale power has to be decentralized and therefore we have third-tier of govt. ie., local govt.

Q. What has been the basic idea behind decentralization in India?
The basic idea behind decentralization in India is that ,
--there are a large number of problems and issues that can be solved best at the local level.
--people have a better knowledge of problems in their localities.
--they also have better ideas on the issues where to spend money & how to manage things more efficiently.
--at the local level it is possible for people to directly participate in decision making.
--local govt. is the best way to realize an important principle of democracy—self govt.

LOCAL GOVERENMENT –BEFORE AND AFTER THE CONSTITUTIONAL AMENDMENT IN 1992.
BEFORE-1992
The need for the decentralization was recognized in our constitution and since then there have been several attempts to decentralize power to the level of villages and towns.
--Panchayats in villages & municipalities in the urban areas were setup in all the states,
but were under the direct control of the state govt.
--Elections to these local govts. were not held regularly.
--Local govts. did not have any power or resources of their own.
--The decentralization was not very effective.
AFTER 1992….
A major step towards decentralization was taken in 1992. The constitution was amended to make third-tier of the govt. more powerful & effective.
--now it was constitutionally mandatory to hold regular elections to the local bodies.
--seats will be reserved for SC,ST,& OBC’S in the elected bodies & the executive heads of these institutions.
--at least one-third of all the seats will be reserved for women.
--an independent institution called state election commission has been created in each state to conduct panchayat and municipal elections.
--the state govt. is required to share some of its powers and revenue with the local bodies.
The nature of sharing varies from state to state.

RURAL LOCAL GOVT.—PANCHAYATI RAJ
In the villages: each village or group of villages have a GRAM PANCHAYAT.
--this is a council consisting of members called Panchs & a president called Sarpanch.
--they are directly elected by the adult population of the village.
--it is the decision making body for the entire village.
--it works under the supervision of the Gram sabha.
GRAM SABHA:
--all the voters in the village are its members.
--it has to meet twice or thrice in the year to approve annual budget of Gram panchayat.
--It reviews the performance of Gram panchayat
At the block level: A few of Gram panchayats are grouprd together to form PACHAYAT SAMITI /BLOCK /MANDAL.
--the members of this representative body are elected by all the panchayat members in that area.
At District level: All the Panchayat Samitis or Mandals together constute the ZILLA PARISHAD.
--most of its members are elected.
--members of the Loksabha, & MLAs of that district and some other officials of other districts level bodies are also its members.
--Zilla Parishad chairman is the political head of the Zilla Parishad.

LOCAL GOVERNMENT BODIES FOR THE URBAN AREAS
MUNICIPALITIES—are set up in the towns.
--big cities are constituted into municipal corporations.
--both municipalities and municipal corporations are controlled by the elected bodies consisting of the people’s representatives.
--Municipal Chair man is the political head of the municipality.
--Mayor is the head of the municipal corporation.

This new system of the local govt. in India is the largest and an innovative experiment in democracy conducted anywhere in the world. Comment.
We can say so because,
There are 36 lakhs elected representatives in the Panchayayts and Municipalities etc., all over the country.
--this number is bigger than the population of many countries of the world.
--constitutional status for the local govt. has helped deepen our democracy in our country.
--it has also increased the women participation , representation & voice in our democracy.

DRAWBACKS IN OUR SYSTEM OF LOCAL GOVT.
We are still a long way from realizing the ideal of self govt. as there are many drawbacks in the functioning of the system such as,
--while the elections are held regularly, Gram Sabhas are not held regularly.
--most states govts. have not transferred significant powers to the the local govts.
--state govts. have also not given adequate resources to the local govts.

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