Showing posts with label Class X - Short Notes. Show all posts
Showing posts with label Class X - Short Notes. Show all posts
Tuesday, 22 August 2017
Tuesday, 13 October 2015
The Nationalist Movement in Indo-China
RELIGION AND ANTI-COLONIALISM
Religious beliefs of Vietnam were a mixture of Buddhism, Confucianism and local practices.
The French introduced Christianity, their Missionaries were hostile to the easy-going attitude of the Vietnamese towards religion.
Scholars' Revolt of 1868 : Led by officials of the Imperial Court. Uprising in Ngu An and Ha Tien provinces killed a thousand Catholics. By the middle of the 18th century 300,000 people converted to Christianity. Revolt suppressed by the French.
The Hoa Hao Movement began in 1939 under its founder Huynh Phu So.
He performed miracles, helped the poor, opposed sale of brides, gambling and use of opium and alcohol.
The French declared him mad and sent him to a mental asylum. Freed in 1946, but exiled
to Laos. Followers sent to concentration camps.
THE VISION OF MODERNISATION
Two opinions held
(i)Vietnamese traditions had to be strengthened to resist western domination.
(ii)The second school felt that the Vietnamese had to learn from the West, while resisting its domination.
Phan Boi Chau (1867-1940) formed the 'Revolution Society' (Duy Tan Hoi) in 1903 with Prince Cuong De as the lead. He wrote a book, 'History of the Loss of Vietnam' under the influence of the Chinese reformer Liang Qichao (1873-1929). He believed that the French should be driven out first and then monarchy should be restored in Vietnam.
Phan Chu Trinh (1871-1926) differed strongly. He was totally opposed to monarchy and wanted to establish a democratic republic.
Go East Movement : Some 300 Vietnamese students went to Japan in 1907-08 to acquire modern education. Their aim was to drive out the French and re-establish the Ngu Yen dynasty. They wanted Japanese help and established a Restoration Society in Tokyo. But after 1908, the Japanese closed the society, and sent many of them, including Phan Boi Chau to exile in China and Thailand.
When Sun Yat Sen overthrew monarchy in China in 1911, a new association - Association for Restoration of Vietnam was formed. Their objective was to have a Democratic Republic and a Constitutional Monarchy in Vietnam.
THE COMMUNIST MOVEMENT AND VIETNAMESE NATIONALISM
The Great Depression of the 1930s led to unemployment, debts and rural uprisings in Vietnam.
A new leader, Ho Chi Minh, appeared on the scene in 1930. He established the Vietnamese
Communist (Vietnam Cong San Dang) Party, inspired by Europeon communists.
Ho Chi Minh (He who enlightens) was born in Central Vietnam; later became an active member of the committee. He met Lenin and other leaders. After 30 years stay in Europe, Thailand and China he returned to Vietnam in May 1941. He became President of Vietnam Democratic Republic.
In 1940, Japan occupied Vietnam. The League for the Independence of Vietnam (known as the Viet Minh) fought the Japanese, recaptured Hanoi and Ho Chi Minh became the chairman of the Democratic Republic of Vietnam in September 1943.
Vietnamese Nationalism : The French set up a puppet regime under Bao Dai as Emperor.
After years of fighting, the French were finally defeated in 1954 at Dien Bien Phu.
The Battle of Dien Bien Phu (1953-1954)
On 7 May, 1954, more than 16,000 soldiers of the French army were either killed or captured.
The entire French commanding staff, including a General, 16 Colonels, 1749 officers were taken prisoner.
Vietnam was divided into North and South Vietnam. Ho Chi Minh and Bao Dai became rulers in north and south respectively.
The division led to war. The Bau Dai regime was overthrown by Ngo Dinh Diem. The south united and formed the National Liberation Front (NLF) and fought for unification of the country under Ho Chi Minh.
Fear of communism made the US intervene in Vietnam and a bitter war was fought during
1965-1972. Thousands of US troops arrived equipped with heavy weapons and tanks and backed by B52s. Use of chemical weapons – Napalm, Agent Orange, and phosphorous bombs – destroyed many villages.
The effect of the war was felt within the US as well. Many were critical of the government for getting involved in a war. Hollywood made films in support of the war such as ‘Green Berets’ 1968. Francis Ford Coppola’s ‘Apocalypse Now’ 1979 reflected the moral confusion that the war created in the US. US underestimated the power of a small country to fight the most technologically advanced country in the world.
The Ho Chi Minh Trail
The story of the Ho Chi Minh symbolises how the Vietnamese used their limited resources to great advantage. The trail, an immense network of footpaths and roads, was used to transport men and materials from the north to the south.
The US regularly bombed this trail trying to disrupt supplies, but efforts to destroy this important supply line by intensive bombing failed because they were rebuilt very quickly.
THE NATION AND ITS HEROES THE END OF WAR
Women played no role in public life of the Vietnamese, but the freedom struggle led to an emerging new image of womanhood.
In 1913, the nationalist Phan Boi Chau wrote a play based on the lives of the Trung sisters who had fought against Chinese domination in 39-43.
One of the most venerated was Trieu Au who lived in the third century CE.
In the 1960s, photographs in magazines and journals showed women as brave fighters, Nguyen Thi Xuan, for instance, was reputed to have shot down a jet with just twenty bullets.
The image of the warrior woman was replaced with the image of worker woman, in the
1970s, when the end of the war was near.
The US failed to achieve its objectives in the US Vietnam war. The US-Vietnam war was called the first television war. The prolongation of the war created strong reactions even within
the US. Many became disillusioned with what the US was doing and writers such as Mary McCarthy, and actors like Jane Fonda even visited North Vietnam and praised their heroic defence of the country. The scholar Noam Chomsky called the war ‘the greatest threat to peace, to national self-determination, and to international cooperation’.
Finally peace was restored in 1974.
On 30 April, 1975 the North Liberation Front (NLF) occupied the presidential palace in Saigon and unified Vietnam.
Wednesday, 7 October 2015
Resources & Development
Resource - Things which can be used to satisfy our needs, is technologically accessible,
economically feasible
and culturally
acceptable.
TYPES OF RESOURCES
On the Basis of Origin
Biotic Resources: are obtained from
biosphere and have life such as
human beings, flora and fauna,
fisheries, livestock etc.
Abiotic Resources: composed of non-living things are called abiotic resources. rocks and metals.
On the Basis of Exhaustibility
Renewable Resources: can
be renewed or reproduced by
physical, chemical or
mechanical processes. solar and wind energy, water, forests and wildlife, etc. may further be divided into continuous or flow.
Non-Renewable
Resources: occur over a very long geological
time. Minerals and fossil
fuels . May further be divided
into recyclable and non-recyclable
On the Basis of Ownership
Individual Resources:
owned privately by individuals.
Plantation, pasture lands,
ponds, water in wells etc.
Community Owned Resources: resources which are accessible to all the members of the community.
Village commons, public parks, picnic spots
National Resources: All the minerals, water resources, forests,
wildlife, land within
the political boundaries
and oceanic area upto 12 nautical miles (22.2
km) from the coast
termed as territorial water
and resources
International
Resources: international
institutions regulate
these resources. The oceanic
resources beyond 200
nautical miles of the Exclusive
Economic Zone
On the Basis of the Status of
Development
Potential Resources: found in a region, but have not been utilized. Rajasthan and Gujarat have
enormous potential for the development of wind and solar energy, but so
far these have not been
developed properly.
Developed Resources: are surveyed, quality and quantity determined for utilization.
development depends on technology and level of their feasibility.
Stock: human beings do not have
the appropriate
technology to access these, are
included among
Reserves can be put into use with the help of existing technical ‘know-how’ but their
use has not been started. These can be
used for meeting future requirements. the water in the dams,
forests etc.
DEVELOPMENT OF RESOURCES
Indiscriminate use of resources by human being has led to the following major problems.
• Depletion of resources for satisfying the greed of few individuals.
• Accumulation of resources in few hands, divided the society into haves and have not's or rich and poor.
• global
ecological crises
such as, global warming, ozone layer
depletion, environmental
pollution and land degradation.
RESOURCE PLANNING
Strategy
for judicious use
of resources.
Is important as there is enormous diversity in the availability
of resources.
Many of the resources are non-renewable. This calls for balanced resource planning at the national,
state, regional and
local levels.
Resource Planning in India
involves :
(i) identification and
inventory of resources
(ii)
Evolving a planning structure endowed
with appropriate
technology, skill and
institutional set up.
(iii) Matching the resource development plans with overall national development
plans.
Conservation of
Resources: Resources are vital for any developmental
activity. Irrational consumption and over-utilisation of resources may lead to
socio-economic and
environmental problems. To overcome these problems, resource
conservation at various
levels is important. Gandhiji was very apt in voicing his concern about resource
conservation in these words: “There is enough for everybody’s need and
not for any body’s
greed.”
LAND RESOURCES
Land
is a natural resource
of utmost importance.
India has land under a variety of relief features, 43 per cent is plain, provides facilities for agriculture and industry. Mountains account for 30 per cent ensure perennial flow of
some rivers, provide
facilities for tourism and
ecological aspects. About 27 per cent is the plateau,
possesses rich reserves of minerals, fossil
fuels and forests.
LAND UTILISATION
Land resources are used for the following purposes:
1. Forests
2. Land not available for cultivation
(a) Barren and waste land
(b) Land put to non-agricultural uses, e.g. buildings, roads, factories,
etc.
3. Other uncultivated land (excluding fallow land)
(a) Permanent pastures and grazing land,
(b) Land under miscellaneous tree crops groves (not
included in net sown area),
(c) Culturable waste land (left uncultivated for more than 5
agricultural years).
4. Fallow lands
(a) Current fallow-(left without cultivation for one or
less than one agricultural year),
(b) Other than current fallow-(left uncultivated for the
past 1 to 5 agricultural years).
5. Net sown area
Area sown more than once in an agricultural year plus
net sown area is known as gross cropped area.
LAND USE PATTERN IN INDIA
The use of land is
determined both by physical
factors such as topography,
climate, soil types
as well as human factors
such as population density, technological
capability and culture
and traditions etc.
Total geographical area of India is 3.28 million sq km.
The land under permanent pasture has decreased.
NSA in India comes to about 54 per cent of
the total reporting area.
Pattern of net sown area
varies greatly from one state to
another. It is over 80 per cent of the total area in
Punjab and Haryana and less
than 10 per cent in
Arunachal Pradesh, Mizoram,
Manipur and Andaman Nicobar
Islands.
Forest area in the country is far lower than the desired 33 per cent
of geographical area,
as it was outlined in the National Forest Policy 1952
LAND DEGRADATION AND CONSERVATION
MEASURES
About 130 million hectares of degraded land in India. Approximately, 28 per cent of it belongs to the category of forest degraded
area, 56 per cent
of it is water eroded
area and the rest is affected
by saline and alkaline
deposits.
In states like Jharkhand, Chhattisgarh, Madhya Pradesh and Odisha deforestation
due to mining have
caused severe land degradation. In
states like Gujarat,
Rajasthan, Madhya Pradesh and Maharashtra
overgrazing is one of the main reasons for land degradation. In the states of
Punjab, Haryana, western Uttar Pradesh,
over irrigation is responsible for land degradation
due to water logging leading to increase
in salinity and
alkalinity in the soil.
Ways to solve the problems
of land
degradation
Afforestation , proper management of grazing, Planting of shelter belts of plants, control on
over grazing, stabilisation of sand dunes by growing thorny bushes are some of the
methods to check land degradation. Proper management of waste lands,
control of mining
activities, proper discharge and disposal of industrial effluents and wastes
after treatment
SOIL AS A RESOURCE
Relief, parent rock or bed rock, climate, vegetation and other forms of
life and time are
important factors in the
formation of soil.
Classification of Soils
Alluvial Soil : It is of two types — khadar and bangar. It is found mainly in
the Northern
Plains and Coastal Strips of the Eastern Coast.
Black Soil : It is derived from
the Deccan Traps. It occurs in areas like Maharashtra, Western
Madhya Pradesh and Gujarat. It is known for the
cultivation of cotton.
Red Soil : It is formed in areas
of igneous and metamorphic rocks. It is found in parts of
Tamil Nadu, Karnataka, Andhra Pradesh, Orissa and
Jharkhand.
Laterite
Soil : It is the intensively
leached soil of the monsoon climate. It is found in the hills of the Deccan,
Karnataka, Kerala, Orissa and parts of Assam and Meghalaya.
Mountain Soil : It is characterized
by the deposition of organic materials derived from the vegetative cover. It is
found in Meghalaya, Arunachal Pradesh, Eastern ranges, Uttarakhand, Himachal Pradesh
and Jammu and Kashmir.
Desert Soil : It is found in the
arid areas of Rajasthan, Punjab and Haryana.
Soil Erosion and Soil Conservation
The denudation of the soil cover and subsequent washing
down is described as soil erosion. Human activities like deforestation,
over-grazing, construction and mining etc., while natural forces like wind,
glacier and water lead to soil erosion. Deep channels as gullies, bad land,
Chambal ravines, sheet erosion.
Contour ploughing, Terrace cultivation, Strip cropping, Shelter belts.
Friday, 14 August 2015
Political Parties
A Political party is a group of people, who come together to contest elections and hold power in the govt.
has three components
i) The Leaders (ii) The active members (iii) followers
Functions
1. Parties contest elections. Elections are fought mainly among the candidates put up by political parties
2. Parties put forward different policies and programmes. Party reduces a vast multitude of opinions into a few basic positions which it supports. A govt. is expected to base its policies on the line taken by the rulig party
3. Parties play a decisive rule in making laws for a country
4. Parties form and run the government
5. Parties that loose in the elections paly the role of the opposition
6. Parties shape public opinion, raise and highlight issues
7. Parties provide people access to government machinery and welfare schemes implemented by governments
Necessities
1. If all the candidates are independent, no one will be able to make any promises to the people about any major policy changes. Government’s utility will remain ever uncertain, no one will be responsible for how the country will be run
2. Parties are directly linked to representative democracies, gather different views on various issues and to present these to the government, brings various representatives together so that a responsible government can be formed
How many parties should we have
more than 750 parties are registered with the Election Commission of India
Single Party System - only one party is allowed to contest election and run the government. e.g. China. Can not be termed as Democracy, as do not provide any option
Two Party System - Power usually changes between two main political parties. Though many parties exist and contest election, but the two main parties only have a serious chance of forming government. e.g. USA, UK
Multi Party System - More than two parties have a reasonable chance of coming to power either by self or in Alliance
NDA - National Democratic Alliance, headed by BJP
UPA - United Progressive Alliance, headed by Congress
Left Front
Party system depends on the nature of society, its social and regional divisions, its history of politics and its system of elections
National Political Parties
Country wide parties, have their units in various states which by and large follow the same policies
Are large and established, gets some special facilities, gets a unique election symbol, are recognized by the Election Commission
National Parties are those which secure atleast 6% of the total votes in the Lok Sabha elections or Assembly Elections in 4 states, wins atleast 4 seats in Lok Sabha
There were Seven National Parties in 2019
has three components
i) The Leaders (ii) The active members (iii) followers
Functions
1. Parties contest elections. Elections are fought mainly among the candidates put up by political parties
2. Parties put forward different policies and programmes. Party reduces a vast multitude of opinions into a few basic positions which it supports. A govt. is expected to base its policies on the line taken by the rulig party
3. Parties play a decisive rule in making laws for a country
4. Parties form and run the government
5. Parties that loose in the elections paly the role of the opposition
6. Parties shape public opinion, raise and highlight issues
7. Parties provide people access to government machinery and welfare schemes implemented by governments
Necessities
1. If all the candidates are independent, no one will be able to make any promises to the people about any major policy changes. Government’s utility will remain ever uncertain, no one will be responsible for how the country will be run
2. Parties are directly linked to representative democracies, gather different views on various issues and to present these to the government, brings various representatives together so that a responsible government can be formed
How many parties should we have
more than 750 parties are registered with the Election Commission of India
Single Party System - only one party is allowed to contest election and run the government. e.g. China. Can not be termed as Democracy, as do not provide any option
Two Party System - Power usually changes between two main political parties. Though many parties exist and contest election, but the two main parties only have a serious chance of forming government. e.g. USA, UK
Multi Party System - More than two parties have a reasonable chance of coming to power either by self or in Alliance
NDA - National Democratic Alliance, headed by BJP
UPA - United Progressive Alliance, headed by Congress
Left Front
Party system depends on the nature of society, its social and regional divisions, its history of politics and its system of elections
National Political Parties
Country wide parties, have their units in various states which by and large follow the same policies
Are large and established, gets some special facilities, gets a unique election symbol, are recognized by the Election Commission
National Parties are those which secure atleast 6% of the total votes in the Lok Sabha elections or Assembly Elections in 4 states, wins atleast 4 seats in Lok Sabha
There were Seven National Parties in 2019
All India Trinamool
Congress (AITC)
:
Launched on 1 January 1998
under the leadership of
Mamata Banerjee. Recognised as a
national party in 2016. The party’s symbol
is flowers and grass. Committed to
secularism and federalism. Has been in
power in West Bengal since 2011. Also
has a presence in Arunachal Pradesh,
Manipur and Tripura.
Indian National Congress - founded in 1885, played a dominant role in Indian politics, sought to build a modern, secular, democratic republic. Ruling party at center till 1977 and from 1980 to 89. A centrist party, espouses secularism and welfare of weaker sections and minorites, supports economic reforms with a human face. Currently leads the UPA
Bhartiya Janta Party - Founded in 1980, from Bhartiya Jana Sangh. Draws inspiration from India’s ancient culture and values. Promotes cultural nationalism, wants full territorial and political integration of J&K, Uniform Civil Code, ban on Religious Conversions. Came to power in 1998, leads NDA. Emerged as the largest party with 303 members in the 2019 Lok Sabha elections.
Bahujan Samaj Party - founded in 1984 by Kanshi Ram. Represents Dalits and Minorites. Gets inspiration by the teachings of Sahu Maharaj, Mahatama Phule, Periyar Ramaswamy Naickar and B.R.Ambedkar. Has main base in U.P and substantial presence in neighboring states like Madhya Pradesh, Chhattisgarh, Uttarakhand, Delhi and Punjab.. Has formed government in U.P several times
Communist Party of India - Marxist (CPI-M) - formed in 1964, believes in Marxism- Leninism, supports Socialism, Secularism, Democracy. Opposes Imperialism and Communalism. Enjoys strong support in W.Bengal, Kerala & Tripura. Has ruled W.Bengal for 34 years
Communist Party of India - formed in 1925, believed in Marxism-Leninism, Secularism & Democracy. Opposes Seccissionism and Communalism. Got split in 1964. Significant presence in Kerala, W.Bengal, Punjab, A.P and TN
Nationalist Congress Party - formed in 1999, from a split in Congress. Espouses Democracy, Gandhian Secularism, Equity, Social justice and Federalism. Want high offices in government to be confined to natural born citizens of the country. Significant presence in Meghalaya, Manipur and Assam
State Parties
Are commonly referred to as regional parties. Some of these parties are all India parties that happen to have succeeded only is some states.
A party that secures atleast 6 % of the total votes in an election to the Legislative Assembly of a State and wins atleast two seats is recognized as State Party.
The number and strength of these parties are increasing thus making the Parliament more and more diverse. State parties now get an opportunity to be a part of Coalition government, this has strrngthenend federalism and democracy in our country
Challenges to Political Parties
1. Lack of Internal Democracy - No organisational meetings, no internal elections, hs led to concentration of power in few hands. Those who disagree with the leadership find difficult to continue in the party. Personal loyality to leader becomes more important to loyality to party principles
2. Challenge of Dynastic Succession - Very few ways for an ordinary worker to rise to the top in a party. The top positions are always controlled by members of one family. This is bad for democracy, since people who do not have adequate experience or popular support come to occupy positions of power.
3. Growing Role of Money and Muscle Power - Rich people and companies often influence the policies and decisions of the party
4. Do not seems to offer a meaningful choice - Decline in ideological differences, those who want really different policies have no option available
How can parties be reformed ?
Recent Efforts
(i) Anti Defection Law - if any MP or MLA changes parties, will loose the seat in the Legislature. This has helped bring defection down, but has made any dissent even more difficult, members have to accept whatever the party leaders decide.
(ii) Supreme Court’s order makes its mandatory for every candidate who contests elections to file an Affidavit giving details of his property and criminal cases pending against him
(iii) Election Commission passed an order making it necessary for political parties to hold their organisational elections and file their income tax returns
Suggestions made to reform political parties
(i) a law should be made to regulate the internal affairs of political parties
(ii) to give a minimum number of tickets, about one-third, to women candidates
(iii) there should be state funding of elections
Citizens can play their role in reforming political parties
(i) People can put pressure on political parties through petitions, publicity and agitations
(ii) Political parties can improve if those who want this join political parties. The problem of bad politics can be solved by more and better politics.
Indian National Congress - founded in 1885, played a dominant role in Indian politics, sought to build a modern, secular, democratic republic. Ruling party at center till 1977 and from 1980 to 89. A centrist party, espouses secularism and welfare of weaker sections and minorites, supports economic reforms with a human face. Currently leads the UPA
Bhartiya Janta Party - Founded in 1980, from Bhartiya Jana Sangh. Draws inspiration from India’s ancient culture and values. Promotes cultural nationalism, wants full territorial and political integration of J&K, Uniform Civil Code, ban on Religious Conversions. Came to power in 1998, leads NDA. Emerged as the largest party with 303 members in the 2019 Lok Sabha elections.
Bahujan Samaj Party - founded in 1984 by Kanshi Ram. Represents Dalits and Minorites. Gets inspiration by the teachings of Sahu Maharaj, Mahatama Phule, Periyar Ramaswamy Naickar and B.R.Ambedkar. Has main base in U.P and substantial presence in neighboring states like Madhya Pradesh, Chhattisgarh, Uttarakhand, Delhi and Punjab.. Has formed government in U.P several times
Communist Party of India - Marxist (CPI-M) - formed in 1964, believes in Marxism- Leninism, supports Socialism, Secularism, Democracy. Opposes Imperialism and Communalism. Enjoys strong support in W.Bengal, Kerala & Tripura. Has ruled W.Bengal for 34 years
Communist Party of India - formed in 1925, believed in Marxism-Leninism, Secularism & Democracy. Opposes Seccissionism and Communalism. Got split in 1964. Significant presence in Kerala, W.Bengal, Punjab, A.P and TN
Nationalist Congress Party - formed in 1999, from a split in Congress. Espouses Democracy, Gandhian Secularism, Equity, Social justice and Federalism. Want high offices in government to be confined to natural born citizens of the country. Significant presence in Meghalaya, Manipur and Assam
State Parties
Are commonly referred to as regional parties. Some of these parties are all India parties that happen to have succeeded only is some states.
A party that secures atleast 6 % of the total votes in an election to the Legislative Assembly of a State and wins atleast two seats is recognized as State Party.
The number and strength of these parties are increasing thus making the Parliament more and more diverse. State parties now get an opportunity to be a part of Coalition government, this has strrngthenend federalism and democracy in our country
Challenges to Political Parties
1. Lack of Internal Democracy - No organisational meetings, no internal elections, hs led to concentration of power in few hands. Those who disagree with the leadership find difficult to continue in the party. Personal loyality to leader becomes more important to loyality to party principles
2. Challenge of Dynastic Succession - Very few ways for an ordinary worker to rise to the top in a party. The top positions are always controlled by members of one family. This is bad for democracy, since people who do not have adequate experience or popular support come to occupy positions of power.
3. Growing Role of Money and Muscle Power - Rich people and companies often influence the policies and decisions of the party
4. Do not seems to offer a meaningful choice - Decline in ideological differences, those who want really different policies have no option available
How can parties be reformed ?
Recent Efforts
(i) Anti Defection Law - if any MP or MLA changes parties, will loose the seat in the Legislature. This has helped bring defection down, but has made any dissent even more difficult, members have to accept whatever the party leaders decide.
(ii) Supreme Court’s order makes its mandatory for every candidate who contests elections to file an Affidavit giving details of his property and criminal cases pending against him
(iii) Election Commission passed an order making it necessary for political parties to hold their organisational elections and file their income tax returns
Suggestions made to reform political parties
(i) a law should be made to regulate the internal affairs of political parties
(ii) to give a minimum number of tickets, about one-third, to women candidates
(iii) there should be state funding of elections
Citizens can play their role in reforming political parties
(i) People can put pressure on political parties through petitions, publicity and agitations
(ii) Political parties can improve if those who want this join political parties. The problem of bad politics can be solved by more and better politics.
Friday, 24 July 2015
Money & Credit
Money as a Medium of Exchange
Barter System - Goods are directly exchanged without the use of money, double coincidence of wants is an essential feature.
In an economy where money is in use, money by providing the crucial intermediate step eliminates the need for double coincidence of wants. A person holding money can easily exchange it for any commodity or service that he or she might want. Since money acts as an intermediate in the exchange process, it is called a medium of exchange
Modern Forms of Money
Early coins were made of precious metals thus they had their own value
Modern forms of money include currency - paper notes and coins (not made of precious metals), without any use of its own. It is accepted as a medium of exchange because the currency is authorized by the government of the country. Reserve Bank of India issues currency notes on behalf of the central government. No individual in India can legally refuse a payment made in rupees.
Deposites with Banks
People hold money as deposits with banks. Banks accepts the deposites, in Banks money is safe and it earn an amount as interest.
Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits. Since demand deposits are accepted widely as a means of payment, along with currency, they constitute money in the modern economy.
A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been issued.
Loan Activities of Banks
Banks in India these days hold about 15 percent of their deposits as cash, as a provision to pay the depositors who might come to withdraw money from the bank at any given day. Banks use the major portion of the deposits to extend loans. Banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). The difference between what is charged from borrowers and what is paid to depositors is their main source of income.
Two different Credit situations
Credit - Refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment
Credit which leads to profit - Salim, the Shoe manufacturer recieved an order of 3000 pair of shoes to be delivered in month time. Salim asks the leather supplier to supply leather now and promises to pay later. He obtains loan in cash from the large trader as advance payment for 1000 pair of shoes. Is able to deliver the order in time, makes a good profit.
Credit which leads to debt - Swapna, a small farmer, borrows loan from the moneylender hoping that her harvest would help repay the loan. The crop is hit by pests and the crop fails. Swapna is unable to repay the moneylender, takes a fresh loan for cultivation next year. Its a normal crop this year, earnings are not enough to cover the old loan. She is caught in debt.
Conclusion - Whether credit would be useful or not depends on the risks in the situation and whether there is some support in case of loss
Terms of Credit
Collateral - An asset that the borrower owns and uses this as a guarantee to alender until the loan is repaid
Terms of Credit include Loan amount, Duration of loan, Documents required, Interest rate, Mode of Repayment, Collateral
Formal Sector Credit in India
The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. The formal are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc.
“RBI (Reserve Bank of India) supervises the functioning of Formal sources of Loans”
RBI monitors the banks in maintaining the minimum cash balance
RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, to small borrowers etc.
“Cheap and affordable credit is crucial for the country’s development”
Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans
Higher cost of borrowings means a larger part of the earnings of the borrowers is used to repay the loan
High interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower, can lead to increasing debt
Banks and cooperative societies need to lend more, would lead to higher incomes and many people could then borrow cheaply for a variety of needs
Formal and Informal Credit : Who gets what ?
85 percent of the loans taken by poor households in the urban areas are from informal sources. Rich households take only 10 per cent of their loans from informal sources, while 90 per cent are from formal sources
The rich households are availing cheap credit from formal lenders whereas the poor households have to pay a large amount for borrowing
Formal sector still meets only about half of the total credit needs of the rural people. The remaining credit needs are met from informal sources,it carries a very high interest rate and do little to increase the income of the borrowers
Thus it is necessary that banks and cooperatives increase their lending particularly in the rural areas, also necessary that everyone receives these loans
Self-Help Groups for the Poor
Need of SHG - Banks are not present everywhere. Getting a loan from a bank is much more difficult than taking a loan from informal sources, banks require proper documents and collateral. The borrowers approach the moneylenders even without repaying their earlier loans. Moneylenders charge very high rates of interest, keep no records of the transactions and harass the poor borrowers
Concept of SHG - Self Help Groups a group of 15-20 members, meet and save regularly. Saving per member varies from Rs. 25 to Rs. 100 or more. Members can take small loans, group charges interest less than what the moneylender charges. If the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name of the group and is meant to create self-employment opportunities. Important decisions regarding the savings and loan activities are taken by the group member. It is the group which is responsible for the repayment of the loan. Cases of non-repayment of loan are followed up seriously by other members in the group.
SHG help borrowers overcome the problem of lack of collateral, can get timely loans at a reasonable interest rate. It helps women to become financially self-reliant, provides a platform to discuss and act on a variety of social issues such as health, nutrition, domestic violence, etc.
Barter System - Goods are directly exchanged without the use of money, double coincidence of wants is an essential feature.
In an economy where money is in use, money by providing the crucial intermediate step eliminates the need for double coincidence of wants. A person holding money can easily exchange it for any commodity or service that he or she might want. Since money acts as an intermediate in the exchange process, it is called a medium of exchange
Modern Forms of Money
Early coins were made of precious metals thus they had their own value
Modern forms of money include currency - paper notes and coins (not made of precious metals), without any use of its own. It is accepted as a medium of exchange because the currency is authorized by the government of the country. Reserve Bank of India issues currency notes on behalf of the central government. No individual in India can legally refuse a payment made in rupees.
Deposites with Banks
People hold money as deposits with banks. Banks accepts the deposites, in Banks money is safe and it earn an amount as interest.
Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits. Since demand deposits are accepted widely as a means of payment, along with currency, they constitute money in the modern economy.
A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been issued.
Loan Activities of Banks
Banks in India these days hold about 15 percent of their deposits as cash, as a provision to pay the depositors who might come to withdraw money from the bank at any given day. Banks use the major portion of the deposits to extend loans. Banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). The difference between what is charged from borrowers and what is paid to depositors is their main source of income.
Two different Credit situations
Credit - Refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment
Credit which leads to profit - Salim, the Shoe manufacturer recieved an order of 3000 pair of shoes to be delivered in month time. Salim asks the leather supplier to supply leather now and promises to pay later. He obtains loan in cash from the large trader as advance payment for 1000 pair of shoes. Is able to deliver the order in time, makes a good profit.
Credit which leads to debt - Swapna, a small farmer, borrows loan from the moneylender hoping that her harvest would help repay the loan. The crop is hit by pests and the crop fails. Swapna is unable to repay the moneylender, takes a fresh loan for cultivation next year. Its a normal crop this year, earnings are not enough to cover the old loan. She is caught in debt.
Conclusion - Whether credit would be useful or not depends on the risks in the situation and whether there is some support in case of loss
Terms of Credit
Collateral - An asset that the borrower owns and uses this as a guarantee to alender until the loan is repaid
Terms of Credit include Loan amount, Duration of loan, Documents required, Interest rate, Mode of Repayment, Collateral
Formal Sector Credit in India
The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. The formal are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc.
“RBI (Reserve Bank of India) supervises the functioning of Formal sources of Loans”
RBI monitors the banks in maintaining the minimum cash balance
RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, to small borrowers etc.
“Cheap and affordable credit is crucial for the country’s development”
Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans
Higher cost of borrowings means a larger part of the earnings of the borrowers is used to repay the loan
High interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower, can lead to increasing debt
Banks and cooperative societies need to lend more, would lead to higher incomes and many people could then borrow cheaply for a variety of needs
Formal and Informal Credit : Who gets what ?
85 percent of the loans taken by poor households in the urban areas are from informal sources. Rich households take only 10 per cent of their loans from informal sources, while 90 per cent are from formal sources
The rich households are availing cheap credit from formal lenders whereas the poor households have to pay a large amount for borrowing
Formal sector still meets only about half of the total credit needs of the rural people. The remaining credit needs are met from informal sources,it carries a very high interest rate and do little to increase the income of the borrowers
Thus it is necessary that banks and cooperatives increase their lending particularly in the rural areas, also necessary that everyone receives these loans
Self-Help Groups for the Poor
Need of SHG - Banks are not present everywhere. Getting a loan from a bank is much more difficult than taking a loan from informal sources, banks require proper documents and collateral. The borrowers approach the moneylenders even without repaying their earlier loans. Moneylenders charge very high rates of interest, keep no records of the transactions and harass the poor borrowers
Concept of SHG - Self Help Groups a group of 15-20 members, meet and save regularly. Saving per member varies from Rs. 25 to Rs. 100 or more. Members can take small loans, group charges interest less than what the moneylender charges. If the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name of the group and is meant to create self-employment opportunities. Important decisions regarding the savings and loan activities are taken by the group member. It is the group which is responsible for the repayment of the loan. Cases of non-repayment of loan are followed up seriously by other members in the group.
SHG help borrowers overcome the problem of lack of collateral, can get timely loans at a reasonable interest rate. It helps women to become financially self-reliant, provides a platform to discuss and act on a variety of social issues such as health, nutrition, domestic violence, etc.
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