PSC Notes

FUNCTIONS OF MANAGEMENT- DIRECTION (Communication,Supervision,Motivation,Leadership)

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Directing is concerned with instructing, guiding, supervising and inspiring people in the organisation to achieve its objectives. It is the process of telling people what to do and seeing that they do it in the best possiblemanner.

 

Elements in Directing: The four essential elements in Directing are :

 

  1. Communication
  2. Supervision
  3. Motivation
  4. Leadership

 

 

  1. COMMUNICATION

 

Communication is a basic organisational function, which refers to the process by which a person (known as sender) transmits information or messages to another person (known as receiver). The purpose of communication in organisations is to convey orders, instructions, or information so as to bring desired changes in the performance and other attitude of employees. In an organisation, supervisors transmit information to subordinates. Proper communication results in clarity and securing the cooperation of subordinates. Faulty communication may create problems due to misunderstanding between the superior and subordinates. The subordinates must correctly understand the message conveyed to them.

 

Communication Cycle :-

 

Sender—> Message—>Encoding—>Channel/Medium—>Transmission of message—> Receiving & Decoding—>Response & feedback—> Receiver.

 

Classification of Communication :-

 

  • On the basis of Organizational Structure:

 

  • Formal and Informal Communication

The path through which information flows is called channel of communication. In every organisation we have both formal and informal channels. The paths of communication which are based on relationship established formally by management are the formal channels.

For example, The Collector of the district communicates a decision to the SDM who may then issue orders or instructions to the Tahsildaar.

 

Communication, which takes place on the basis of informal or social relations among staff, is   called informal communication.

For example, any sharing of information between a police inspector and an accountant, as they happen to be friends or so. Mostly informal channels are used due to friendly interaction of members of an organisation. In fact, it may be purely personal or related to organisational matters.

 

 

 

  • On the basis of Direction

 

  • Upward: When employees make any request, appeal, report, suggest or communicate ideas to the superior, the flow of communication is upward i.e., from bottom to top. For instance, when a typist drops a suggestion in the suggestion box, or a foreman reports breakdown of machinery to the factory manager, the flow of communication is upward. Upward communication encourages employees to participate actively in the operations of their department. They get encouraged and their sense of responsibility increases when they are heard by their supervisors about problems affecting the jobs.

 

  • Downward: When communication is made from superiors down the hierarchy it is called a downward communication. For instance, when superiors issue orders and instructions to subordinates, it is known as downward communication. When the General Manager orders supervisors to work overtime, the flow of communication is downward i.e., from top to bottom. Similarly, communication of work assignments, notices, requests for performance, etc. through bulletin boards, memos, reports, speeches, meetings, etc, are all forms of downward communication.

 

 

  • Horizontal: Communication can also be amongst members at the same level in the organisation. For instance, production manager may communicate the production plan to the sales manager. This is known as horizontal flow of communication. Here, the communications among people of the same rank and status. Such communication facilitates coordination of activities that are interdependent.

 

  • Diagonal: when communication is not made between people who are in the same department nor at the same level of organisational hierarchy, it is called diagonal communication. For example, cost accountant may request for reports from sales representatives not the sales manager for the purpose of distribution cost analysis. This type of communication does take place under special circumstances.

 

  • On the basis of Mode of Expression

 

  • Verbal and Non verbalCommunication : On the basis of the mode used, communication may be verbal or non-verbal. While communicating, managers may talk to their subordinates either face to face or on telephone or they may send letters, issue notices, or memos. These are all verbal communication. Thus, the verbal modes of communication may be oral and written. Face to face communication, as in interviews, meetings and seminars, are examples of oral communication. Issuing orders and instructions on telephone or through an inter-communication system is also oral communication. The written modes of communication include letters, circulars, notices and memos. Sometimes verbal communication is supported by non-verbal communication such as facial expressions and body gestures. For example – wave of hand, a smile or a frown etc. This is also termed as the gestural communication

 

 

 

 

 

 

 

 

 

 

  1. SUPERVISION

 

It is the duty of the manager to see that they perform the work as per instructions. Managers play the role of supervisors and ensure that the work is done as per the instructions and the plans. Supervisors clarify all instructions and guide employees to work as a team in co-operation with others.

Though supervision is required at all levels of management, it is of great importance at the operational level i.e., at the level of first line supervisor. Managers at this level devote maximum time in supervising the work of subordinates. Though the top or middle level managers also supervise the work of their subordinate managers, but it is the first line supervisors who are in direct and constant touch with operatives i.e., workers in the factory and clerical staff in the office. Thus, they are directly responsible for getting the work done through most of the employees in an organisation.

 

Functions of a Supervisor

 

A supervisor works at the lowest level of management like all other managers he performs the functions of planning, organising, directing and controlling with respect to his own subordinates and department. A major part of his time is devoted in directing and controlling the activities of his subordinates. He also coordinates the activities of his subordinates by integrating the same with the activities of other departments of the enterprise. Besides he performs certain special functions which have been described below:

 

  1. Link between Top Management and Workers: A supervisor works as a link between managers working at higher levels and workers. He conveys the decision of the higher level managers to the workers and also communicates the performance of the workers to the higher level management through different performance reports. He also communicates the grievances, feelings of demands etc. of the workers to the higher level management.

 

  1. Creating Ideal Atmosphere: Being an important link between the operatives and the management a supervisor is expected to create an ideal atmosphere for work in the organisation by correctly communicating the ideas, wishes and decisions of the higher level management to the workers.

 

  1. Guiding the Workers: For obtaining best results the supervisor assigns jobs to the workers keeping in mind their ability and aptitude for work. He makes them available the necessary tools and equipments, raw materials etc. for proper execution of the jobs. He also guides the worker properly to ensure that the job is done with perfection and accuracy.

 

  1. Quality Output : A supervisor has to ensure quality output through constant watch on the performance of workers. He ensures that the performance of the worker takes place as per the plans. This results into study flow of output.

 

  1. Feedback: A supervisor keeps on watching the performance of his subordinates and identifies their strengths and weaknesses. He gives the feedback about this to the workers with the object to further improve the performance of the workers in future.

 

  1. Suggest Training Programmes: A supervisor identifies the areas in which the workers require training and accordingly suggests training programmes that should be organised for them.

 

 

 

  1. MOTIVATION

 

Motivation is one of the important elements of directing.

It is a force that inspires a person at work to intensify his willingness to use the best of his capability for achievement of specified objectives. It may be in the form of incentives like financial (such as bonus, commission etc.) or, non-financial (such as appreciation, growth etc.), or it could be positive or negative. Basically, motivations directed towards goals and prompt people to act.

 

The importance of motivation lies in converting this ability to work into willingness to work. Performance depends on ability as well as willingness; and willingness depends on motivation. Thus, motivation is a key element in directing people to do the job.

 

Each employee has some needs of his own that he wants to fulfil. While directing, it is essential to ensure that any of the unfulfilled need of the individual is being taken care of.

Maslow’s Hierarchy of Needs:-

 

According to Maslow, an individual has many needs and their order can be determined. If a person satisfies his first need, then he thinks about his next need. After satisfying the second need, he tries to satisfy third need and so on. So needs are the motivators. Maslow has given hierarchy of needs in the following ways :

 

  1. Physiological Needs: These needs include need for food, shelter and clothing.

 

  1. 2. Safety and Security Needs: Once physiological needs are fulfilled then the people start thinking about their safety. Safety needs include need for physical safety and economic safety. Physical safety means safety from accidents, disease etc. Economic safety refers to safety of livelihood.

 

  1. Social Needs: Man is a social animal. He wants to live in the society honourably. Therefore, he wants friends and relatives with whom he can share his joys and sorrows. Social needs include need for love, affection, friendship etc.
  2. 4. Esteem Needs: These are the need for respect and recognition. Esteem needs are also known as Ego needs.

 

  1. Self ActualisationNeeds : Self actualisation needs are concerned with becoming what a person is capable of becoming. These needs include need for growth, self-fulfilment etc.

 

 

Financial and Non-financial Hierarchy Theory

 

Monetary / Financial incentives are directly related with money. Non-financial incentives are not directly related with money. Following are the financial incentives:

 

  1. Pay and Allowances: Salary is the basic monetary incentive of every employee. Salary includes basic pay, dearness allowance etc.

 

  1. Bonus: Bonus means the payment to employees in addition to their regular remuneration. Bonus is provided in the form of cash, free trips to resorts or foreign countries etc.

 

  1. Commission: In sales department, sales persons get commission on the basis of their sales.

 

  1. Retirement Benefit: Every employee is concerned about his future after retirement. Some retirement benefits are Provident fund, Pension, Gratuity etc.

 

  1. Perquisites: Rent free accommodation, car allowance, facility of a servant etc.are called as perquisites.

 

Non-financial Incentives: Besides the financial incentives there is certain non financial incentive that motivates the employees. The important non-financial incentive is given below:

 

  1. Career Advancement Opportunity : Appropriate skill development programmes will encourage employees to show improved performance.

 

  1. Status: Status means the rank of a person in a organisation. The rank is linked with authority, responsibility and other extra benefits. Everybody has a wish to be in high rank. Therefore an employee can be motivated by placing him in higher rank.

 

  1. Employee Recognition Programmes: Every employee wants to be considered as an important part of the organisation. Work of an organisation should be distributed in such a way that every employee feels that his work is yield and he is capable to do that work. This motivates the worker and he works hard and in a responsible manner.

 

  1. Employee Participation: It means involving employee in decision making especially when decisions are related to workers.

 

  1. Organisation Climate: It means the relationship between superior and subordinates. Employees can put their best if healthy climate exist in an organisation. It is important to remember that the needs and desires of people change. Once their basic needs are satisfied, other needs arise. Managers have thus, to understand the needs and desires of subordinates and decide how to motivate them. The knowledge of the different types of need enables a manager to adopt different ways to motivate individuals depending upon which need is unsatisfied for the individual. For example, a person whose physiological needs are not fulfilled may be motivated to work with a promise of increase in pay, whereas another person may be motivated if he is given a very challenging job to perform regardless of the pay.

 

 

 

  1. LEADERSHIP

 

Leadership is the process, which influences the people and inspires them to willingly accomplish the organisational objectives. The main purpose of managerial leadership isto gets willing cooperation of the workgroup to achieve the goals.

Leadership is the ability to persuade and motivate others to work in desired way for achieving the goals. Thus, a person who is able to influence others and make them follow his instructions is called a leader.

Leadership and Management are two separate concepts.

Leadership exists in both formal and informal organization but Management operates in formal organization.

 

Leadership Styles :

 

  • Autocratic or Authoritarian Style : 2 types

Pure autocrative or negative Leader : Dictator & makes all decisions by himself.

Benevolent autocrat or Positive Leader : Reward power to influence subordinate and welfare of subordinates.

 

  • Participative Leaders : Decentralise authority, Such leaders involve subordinates in decision-making process.

 

  • Free-rein or Laissez – faire Style : Leaders uses his power very little, gives high degree of freedom to his subordinates in their operation. Aids subordinates in performing their job.

 

 

  • Paternalistic Leadership : It is authoritarian by Nature. Heavily work-centred but has consideration for subordinates.

 

Leadership Qualities: – In order to be successful, a leader must possess certain qualities. A good leader should be professionally competent, intelligent, analytical and he/she should have a sense of fair play, including honesty, sincerity, integrity, and sense of responsibility. He must possess initiative, perseverance, be diligent and realistic in his outlook. He must also be able to communicate his subordinates effectively. Human relation skills are must for any leader. Earlier, it was believed that the success or effectiveness of a leader depends upon his personal traits or characteristics, like physical appearance, intelligence, self-confidence, alertness, and initiative.

Earthquakes

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Earthquakes occur when energy stored in elastically strained rocks is suddenly released. This release of energy causes intense ground shaking in the area near the source of the earthquake and sends waves of elastic energy, called seismic waves, throughout the Earth. Earthquakes can be generated by bomb blasts, volcanic eruptions, sudden volume changes in minerals, and sudden slippage along faults. Earthquakes are definitely a geologic hazard for those living in earthquake prone areas, but the seismic waves generated by earthquakes are invaluable for studying the interior of the Earth.

The point within the earth where the fault rupture starts is called the focus or hypocenter. This is the exact location within the earth were seismic waves are generated by sudden release of stored elastic energy.

The epicenter is the point on the surface of the earth directly above the focus. Sometimes the media get these two terms confused.

Seismic waves are the vibrations from earthquakes that travel through the Earth; they are recorded on instruments called seismographs. Seismographs record a zig-zag trace that shows the varying amplitude of ground oscillations beneath the instrument. Sensitive seismographs, which greatly magnify these ground motions, can detect strong earthquakes from sources anywhere in the world. The time, locations, and magnitude of an earthquake can be determined from the data recorded by seismograph stations.

 

Two of the most common methods used to measure earthquakes are the Richter scale and the moment magnitude scale.

The Richter scale is used to rate the magnitude of an earthquake, that is the amount of energy released during an earthquake.
The Richter scale doesn’t measure quake damage (which is done by Mercalli Scale) which is dependent on a variety of factors including population at the epicentre, terrain, depth, etc. An earthquake in a densely populated area which results in many deaths and considerable damage may have the same magnitude as a shock in a remote area that does nothing more than frightening the wildlife. Large-magnitude earthquakes that occur beneath the oceans may not even be felt by humans. Richter Scale of Earthquake Energy
The magnitude of an earthquake is determined using information gathered by a seismograph.
The Richter magnitude involves measuring the amplitude (height) of the largest recorded wave at a specific distance from the seismic source. Adjustments are included for the variation in the distance between the various seismographs and the epicentre of the earthquakes.
The Richter scale is a base-10 logarithmic scale, meaning that each order of magnitude is 10 times more intensive than the last one.

 

Amendments to the Constitution

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Amendments to the Constitution are made by the Parliament, the procedure for which is laid out in Article 368. An amendment bill must be passed by both the Houses of the Parliament by a tw

o-thirds majority and voting. In addition to this, certain amendments which pertain to the federal nature of the Constitution must be ratified by a majority of state legislatures. As of June 2013 there have been 118 amendment bills presented in the Parliament, out of which 98 have been passed to become Amendment Acts.

 

Amendments of constitution                 

 

  1. 1951 To fully secure the constitutional validity of zamindari abolition laws and to place reasonable restriction on freedom of speech. A new constitutional device, called Schedule 9 introduced to protect laws that are contrary to the Constitutionally guaranteed fundamental rights. These laws encroach upon property rights, freedom of speech and equality before law.
  2. 1953 A technical amendment to fix the size of each parliamentary constituency between 650,000 and 850,000 voters.
  3. 1955 LS limit of 500 members, one member of a constituency represents between 500000 and 750000 people.
  4. 1955 Restrictions on property rights and inclusion of related bills in Schedule 9 of the constitution.
  5. 1955 Provides for a consultation mechanism with concerned states in matters relating to the amendments to the territorial matters and in the re-naming of the state.
  6. 1956 Amend the Union and State Lists with respect to raising of taxes.
  7. 1956 Reorganization of states on linguistic lines, abolition of Class A, B, C, D states and introduction of Union Territories.
  8. 1960 Clarify state’s power of compulsory acquisition and requisitioning of private property and include Zamindari abolition laws in Schedule 9 of the constitution.
  9. 1960 Minor adjustments to territory of Indian Union consequent to agreement with Pakistan for settlement of disputes by demarcation of border villages, etc.
  10. 1961 Incorporation of Dadra, Nagar and Haveli as a Union Territory, consequent to acquisition from Portugal.
  11. 1961 Election of Vice President by Electoral College consisting of members of both Houses of Parliament, instead of election by a Joint Sitting of Parliament.

Indemnify the President and Vice President Election procedure from challenge on grounds of existence of any vacancies in the electoral college.

  1. 1961 Incorporation of Goa, Daman and Diu as a Union Territory, consequent to acquisition from Portugal.
  2. 1963 Formation of State of Nagaland, with special protection under Article 371A.
  3. 1962 Incorporation of Pondicherry into the Union of India and creation of Legislative Assemblies for Himachal Pradesh, Tripura, Manipur and Goa.
  4. 1963 Raise retirement age of judges from 60 to 62 and other minor amendments for rationalizing interpretation of rules regarding judges etc.,
  5. 1963 Make it obligatory for seekers of public office to swear their allegiance to the Indian Republic and prescribe the various obligatory templates.
  6. 1964 To secure the constitutional validity of acquisition of Estates and place land acquisition laws in Schedule 9 of the constitution
  7. 1966 Technical Amendment to include Union Territories in Article 3 and hence permit reorganisation of Union Territories.
  8. 1966 Abolish Election Tribunals and enable trial of election petitions by regular High Courts.
  9. 1966 Indemnify & validate judgments, decrees, orders and sentences passed by judges and to validate the appointment, posting, promotion and transfer of judges barring a few who were not eligible for appointment under article 233. Amendment needed to overcome the effect of judgement invalidating appointments of certain judges in the state of Uttar Pradesh.
  10. 1967 Include Sindhi as an Official Language.
  11. 1969

Provision to form Autonomous states within the State of Assam.

 

  1. 1970 Extend reservation for SC / ST and nomination of Anglo Indian members in Parliament and State Assemblies for another ten years i.e. up to 1980.
  2. 1971 Enable parliament to dilute fundamental rights through amendments to the constitution.
  3. 1972 Restrict property rights and compensation in case the state takes over private property.
  4. 1971 Abolition of privy purse paid to former rulers of princely states which were incorporated into the Indian Republic.
  5. 1972 Reorganization of Mizoram into a Union Territory with a legislature and council of ministers.
  6. 1972 Rationalize Civil Service rules to make it uniform across those appointed prior to Independence and post independence.
  7. 1972 Place land reform acts and amendments to these act under Schedule 9 of the constitution.
  8. 1973 Change the basis for appeals in Supreme Court of India in case of Civil Suits from value criteria to one involving substantial question of law.
  9. 1973 Increase size of Parliament from 525 to 545 seats. Increased seats going to the new states formed in North East India and minor adjustment consequent to 1971 Delimitation exercise.
  10. 1974 Protection of regional rights in Telengana and Andhra regions of State of Andhra Pradesh.
  11. 1974 Prescribes procedure for resignation by members of parliament and state legislatures and the procedure for verification and acceptance of resignation by house speaker.
  12. 1974 Place land reform acts and amendments to these act under Schedule 9 of the constitution.
  13. 1975 Terms and Conditions for the Incorporation of Sikkim into the Union of India.
  14. 1975 Formation of Sikkim as a State within the Indian Union.
  15. 1975 Formation of Arunachal Pradesh legislative assembly.
  16. 1975 Enhances the powers of President and Governors to pass ordinances
  17. 1975 Amendment designed to negate the judgement of Allahabad High Court invalidating Prime Minister Indira Gandhi’s election to parliament. Amendment placed restrictions on judicial scrutiny of post of President, vice-president and Prime Minister.
  18. 1976 Enable Parliament to make laws with respect to Exclusive Economic Zone and vest the mineral wealth with Union of India

Place land reform & other acts and amendments to these act under Schedule 9 of the constitution.

 

  1. 1976 Raise Retirement Age Limit of Chairmen and Members of Union and State Public Commissions from 60 to 62.
  2. 1977 Amendment passed during internal emergency by Indira Gandhi. Provides for curtailment of fundamental rights, imposes fundamental duties and changes to the basic structure of the constitution by making India a “Socialist Secular” Republic.
  3. 1978 Amendment passed after revocation of internal emergency in the Country. Repeals some of the more ‘Anti-Freedom’ amendments enacted through Amendment Bill 42.
  4. 1979 Amendment passed after revocation of internal emergency in the Country. Provides for human rights safeguards and mechanisms to prevent abuse of executive and legislative authority. Annuls some Amendments enacted in Amendment Bill 42.
  5. 1980 Extend reservation for SC / ST and nomination of Anglo Indian members in Parliament and State Assemblies for another ten years i.e. up to 1990.
  6. 1983 Amendment to negate judicial pronouncements on scope and applicability on Sales Tax.
  7. 1984 Place land reform acts and amendments to these act under Schedule 9 of the constitution.
  8. 1985 Article 356 amended to permit President’s rule up to two years in the state of Punjab.
  9. 1984 Recognize Tripura as a Tribal State and enable the creation of a Tripura Tribal Areas Autonomous District Council.
  10. 1984 Technical Amendment to curtailment of Fundamental Rights as per Part III as prescribed in Article 33 to cover Security Personnel protecting property and communication infrastructure.
  11. 1986 Provide reservation to Scheduled Tribes in Nagaland, Meghalaya, Mizoram and Arunachal Pradesh Legislative Assemblies.
  12. 1985 Anti Defection Law – Provide disqualification of members from parliament and assembly in case of defection from one party to other.
  13. 1987 Special provision with respect to the State of Mizoram.
  14. 1986 Increase the salary of Chief Justice of India & other Judges and to provide for determining future increases without the need for constitutional amendment.
  15. 1987 Special powers to Governor consequent to formation of state of Arunachal Pradesh.
  16. 1987 Transition provision to enable formation of state of Goa.
  17. 1987 Provide reservation to Scheduled Tribes in Nagaland, Meghalaya, Mizoram and Arunachal Pradesh Legislative Assemblies.
  18. 1987 Provision to publish authentic Hindi translation of constitution as on date and provision to publish authentic Hindi translation of future amendments.
  19. 1988 Article 356 amended to permit President’s rule up to three years in the state of Punjab, Articles 352 and Article 359A amended to permit imposing emergency in state of Punjab or in specific districts of the state of Punjab.
  20. 1988 Profession Tax increased from a maximum of Rs. 250/- to a maximum of Rs. 2500/-.
  21. 1989 Reduce age for voting rights from 21 to 18.
  22. 1989 Extend reservation for SC / ST and nomination of Anglo Indian members in Parliament and State Assemblies for another ten years i.e. up to 2000.
  23. 1990 Emergency powers applicable to State of Punjab, accorded in Article 359A as per amendment 59 repealed.
  24. 1990 Article 356 amended to permit President’s rule up to three years and six months in the state of Punjab.
  25. 1990 National Commission for Scheduled Castes and Scheduled Tribes formed and its stututory powers specifed in The Constitution.
  26. 1990 Place land reform acts and amendments to these act under Schedule 9 of the constitution.
  27. 1990 Article 356 amended to permit President’s rule up to four years in the state of Punjab.
  28. 1991 Article 356 amended to permit President’s rule up to five years in the state of Punjab.
  29. 1992 To provide for a legislative assembly and council of ministers for Federal National Capital of Delhi. Delhi continues to be a Union Territory.
  30. 1991 Include National Capital of Delhi and Union Territory of Pondicherry in electoral college for Presidential Election.
  31. 1992 Include Konkani, Manipuri and Nepali as Official Languages.
  32. 1992 Provide reservation to Scheduled Tribes in Tripura State Legislative Assembly.
  33. 1993 Statutory provisions for Panchyat Raj as third level of administration in villages.
  34. 1993 Statutory provisions for Local Administrative bodies as third level of administration in urban areas such as towns and cities. (Municipalities)
  35. 1994 Provisions for setting up Rent Control Tribunals.
  36. 1994 Enable continuance of 69% reservation in Tamil Nadu by including the relevant Tamil Nadu Act under 9th Schedule of the constitution.
  37. 1995 A technical amendment to protect reservation to SC/ST Employees in promotions.
  38. 1995 Place land reform acts and amendments to these act under Schedule 9 of the constitution.
  39. 2000 Extend reservation for SC / ST and nomination of Anglo Indian members in Parliament and State Assemblies for another ten years i.e. up to 2010.
  40. 2000 Implement Tenth Finance Commission recommendation to simplify the tax structures by pooling and sharing all taxes between states and The Centre.
  41. 2000 Protect SC / ST reservation in filling backlog of vacancies.
  42. 2000 Permit relaxation of qualifying marks and other criteria in reservation in promotion for SC / ST candidates.
  43. 2000 Exempt Arunachal Pradesh from reservation for Scheduled Castes in Panchayati Raj institutions.
  44. 2002 Extend the usage of 1991 national census population figures for statewise distribution of parliamentary seats.
  45. 2002 A technical amendment to protect seniority in case of promotions of SC/ST Employees.
  46. 2002 Provides Right to Education until the age of fourteen and Early childhood care until the age of six.
  47. 2003 Extend the usage of 2001 national census population figures for statewise distribution of parliamentary seats.
  48. 2004 To extend statutory cover for levy and utilization of Service Tax.
  49. 2003 The National Commission for Scheduled Castes and Scheduled Tribes was bifurcated into The National Commission for Scheduled Castes and The National Commission for Scheduled Tribes.
  50. 2003 Reservation in Assam Assembly relating to Bodoland Territory Area.
  51. 2004 Restrict the size of council of ministers to 15 % of legislative members & to strengthen Anti Defection laws.
  52. 2004 Enable Levy of Service Tax. Include Bodo, Dogri, Santali and Maithili as National Languages.
  53. 2006 Reservation for OBCs in government as well as private educational institutions
  54. 2006 To provide for a Minister of Tribal Welfare in newly created Jharkhand and Chhattisgarh States.
  55. 2010 Extended the reservation of seats in Lok Sabha and State Assemblies for SCs and STs from sixty to seventy years.
  56. 2011 Changed “Oriya” in the Eighth Schedule to “Odia.
  57. 2012, Jan 12 Right to form unions or co-operative societies. (19(1)C)

Promotion of Co-operative Societies. (43B)

 

The Co-operative Societies. (Part 9B)

 

  1. 2013, Jan 2 To empower the Governor of Karnataka to take steps to develop the Hyderabad-Karnataka Region.

(To insert Article 371J in the Constitution)

Congress Sessions

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1885 W.C. Bannerjee Bombay  
1886 Dadabhai Naroji Calcutta  
1887 Badruddin Tyabji Madras  
1888 George Yule Allahabad  
1889 William Weederburn Bombay  
1905 G.K. Gokhale Banaras – Issues like welcoming the prince of wales led to feud  
1906 Dadabhai Naoroji Calcutta – Approval of issues of swadesi & national education.  
    Dadabhai Naoroji was chosen as compromise president. He  
    declared swaraj as the objective.  
1907 Rashbihari Bose Surat – split  
1912 R.N. Madholkar Bankipur. Shortest session as the efforts to make Aga Khan  
    preside over proved futile.  
1916 Ambika Charan Lucknow.  
  Mazumdar      
1920   Calcuttta. Approval of Non cooperation Movement  
1921   Ahmedabad – intensify Non Copperation Movement.  
1924 Mahatma Gandhi Belgaun  
1928 Motilal Nehru Calcutta. Adopted the Nehru Report – Constitution.  
1929 Jawahar Nehru Lahore. The resolution demanding complete independence was  
    passed on the banks of river Ravi.  
1930   No session but Independence Day Pledge adopted on 26th January  
1938 S.C. Bose Haripura.  
1939 S.C. Bose Tripuri. Formed ‘Forward Bloc’.

Financial Inclusion

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Financial Inclusion

Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.

Government of India has launched an innovative scheme of Jan Dhan Yojna for Financial Inclusion to provide the financial services to millions out of the regulated banking sector.

 

 

 

 

Various program’s for financial inclusion are:-

  • Swabhimaan Scheme:under the Swabhimaan campaign, the Banks were advised to provide appropriate banking facilities to habitations having a population in excess of 2000 (as per 2001 census) by March 2012.
  • Extention of  the banking networkin unbanked areas,
  • Expansion of Business Correspondent Agent (BCA)Network
  • Direct Benefit Transfer(DBT) and Direct Benefit Transfer for LPG (DBTL)
  • RuPay, a new card payment scheme has been conceived by NPCI to offer a domestic, open-loop, multilateral card payment system which will allow all Indian banks and financial Institutions in India to participate in electronic payments.
  • Pradhan Mantri Jan-Dhan Yojana (PMJDY)was formally launched on 28th August, 2014. The Yojana envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension. The beneficiaries would get a RuPay Debit Card having inbuilt accident insurance cover of Rs.1.00 lakh. In addition there is a life insurance cover of Rs.30000/- to those people who opened their bank accounts for the first time between 15.08.2014 to 26.01.2015 and meet other eligibility conditions of the Yojana.

 

 

 

Inflation in India

<use fundaes from your MAP> this question is very likely to be asked given the present inflationary trend.

Monetary Policy of India

Topics

  1. MP background
  2. Evolution of monetary policy in India: Different phases
  3. Transmission Mechanism
  4. Goals of MP
  5. Instruments of MP
  6. Determinants of MP
  7. Role of RBI: Pre and post-reforms
  8. MP: pre and post reforms
  9. Committees on Monetary Management in India
  10. MP and Money Market
  11. MP and Fiscal Policy
  12. MP and the external sector
  13. MP and the banking sector
  14. MP and Economic growth
  15. MP and Inflation
  16. Financial Stability: New Challenge
  17. Challenges before monetary policy
  18. Criticisms of India’s MP

 

Some background information

  • An important factor that determines the effectiveness of MP is its transmission – a process through which changes in the policy achieve the objectives of controlling inflation and achieving growth
  • MP transmission mechanism describes how MP action affects output and inflation, the final objectives of MP
  • Various MP transmission channels
    • Quantum Channel relating to money supply and credit
    • Interest Rate Channel –this has become important in the post reform period
    • Exchange Rate Channel
    • Asset Price Channel
  • How these channels function in an economy depends on its stage of development and its underlying financial structure.
  • These channels, however, are not mutually exclusive. There could be considerable feedback and interaction among them.

Evolution of MP

  • 1935: Proportional Reserve System
  • 1954: Minimum Reserve System
  • 1973-76: Minimum and maximum lending rates for bank loans prescribed
  • 1985: Flexible monetary targeting with feedback
  • 1998: Multiple indicator approach adopted

Divide MP into phases and study

Functions of RBI

  • Monetary functions
    • Conduct of monetary policy
    • Bank of issue
    • Banker to the government
    • Banker’s Bank and Lender of the Last Resort
    • Controller of credit
    • Custodian of foreign exchange reserves
    • Foreign exchange management – current and capital account management
    • Oversight of the payment and settlement systems
  • Non-monetary functions
    • Regulation and supervision of the banking and non-banking financial institutions, including credit information companies
    • Regulation of money, forex and government securities markets as also certain financial derivatives
    • Promotional functions: promotion of IFCI, SFC etc
    • Developmental role
    • Research and statistics

Objective of MP

  • To catalyse economic growth: by ensuring adequate flow of credit to productive sectors
  • Price stability
  • After the financial crisis, achieving Financial Stability has emerged as an important objective. Exchange rate management can be yet another objective

Tools of MP

  • General Credit Control (Quantitative Control)
    • Bank Rate
    • Open Market Operations
    • Cash Reserve Ratio
  • Specific and direct credit control (Qualitative Control)
    • Lending margins
    • Purpose specific credit ceiling
    • Discriminatory interest rates
    • Eg: Credit Authorisation Scheme, Credit Monitoring Arrangement.

MP pre-reforms

  • MP in India was conducted under the monetary targeting framework till 1997-98 with M3 as an intermediate target. This amounted to regulating money supply consistent with the expected growth in real income and a projected level of inflation.
  • During the monetary targeting phase (1985-1998), while M3 growth provided the nominal anchor, reserve money was used as the operating target and   cash reserve ratio (CRR) was used as the principal operating instrument.  Besides CRR, in the pre-reform period prior to 1991, given the command and control nature of the economy, the Reserve Bank had to resort to direct instruments like interest rate regulations and selective credit control. These instruments were used intermittently to neutralize the expansionary impact of large fiscal deficits which were partly monetised. The administered interest rate regime kept the yield rate of the government securities artificially low. The demand for them was created through periodic hikes in the Statutory Liquidity Ratio (SLR) for banks. The task before the Reserve Bank was, therefore, to develop the financial markets to prepare the ground for indirect operations.

MP post-reform

  • In the wake of the financial reforms, questions were raised about the appropriateness of this framework.
  • Working Group on Money Supply (1998)
    • Highlighted that the interest rate channel of transmission mechanism was gaining importance
  • On the recommendation of this working group, RBI shifted over to a multiple-indicator approach from 1998-9
  • Multiple Indicator Approach: Interest rates or rates of return in different markets (money, capital and g-sec), along with such data as on currency, credit extended by banks and financial institutions, fiscal position, trade, capital flows, inflation rate, exchange rate, refinancing and transactions in foreign exchange available on high-frequency basis, are juxtaposed with output data for drawing policy perspectives.
  • LAF: Another important feature post reform is the increased use of LAF. It has enabled RBI to modulate short-term liquidity under varied financial market conditions, including large capital inflows from abroad.
  • CRR: Reduced
  • 1992-93: market borrowing programme of the government was put through the auction process
  • SLR was brought down to its statutory minimum of 25 pc by Oct 1997 and 24 pc in 2010
  • CRR was brought down from 15 pc of NDTL of banks to 9.5 pc in Nov 1997 which has stabilised at 6 pc for a long time. Not bound by its statutory limit (lower) of 3 pc now.
  • Narsimhan Committee (1998) recommended reforms in the money market
    • RBI introduced LAF in 2000 to manage market liquidity on a daily basis and also to transmit interest rate signals to the market. In the post-reform period, LAF, with OMO, has emerged as the dominant instrument of MP, though CRR continued to be used as an additional instrument of policy.
    • Call money market was transformed into a pure inter-bank market by 2005.
    • With the introduction of prudential limits on borrowing and lending by banks in the call money market, the collateralized money market segments developed rapidly
  • To absorb the capital inflows in excess of the absorptive capacity of the economy MSS was introduced in 2004. Interestingly, in the face of reversal of capital flows during the recent crisis, unwinding of the sterilised liquidity under the MSS helped to ease liquidity conditions.
  • Increased Micro-finance: To strengthen rural finance RBI has focused on SHGs.
  • Fiscal Monetary Separation: Automatic monetization of deficit faced out since 1994. Thus it has separated the monetary policy from the fiscal policy.
  • Changed interest rate structure: Phased deregulation of lending rates in the credit market. Minimum lending rates had been abolished and lending rates above Rs. 2 lakh were freed. In 2010, the base rate mechanism was adopted. Savings rate was deregulated in 2011
  • Higher market orientation for banking: the banking sector got more autonomy and operational flexibility.

 

Challenges in the post-reform period

  • A major challenge is the conduct of monetary policy in surplus liquidity conditions.
  • Increased capital inflows
    • To deal with this, RBI initiated the Market Stabilization Scheme (MSS) in 2004
    • Under the scheme RBI issues Treasury Bills and dated government securities. The money generated from sale of these bills is kept in a different account held by the government and maintained and operated by RBI. This money is not available for government’s expenditure. Thus, liquidity in the market is mopped.
    • The operationalisation of the MSS to absorb liquidity of more enduring nature has considerably reduced the burden of sterilization on the LAF window.
  • Financial stability is an emerging concern
  • The ongoing modernisation of the payments system with the introduction of RTGS would have a significant impact on MP.
  • The transmission of policy signals to banks’ lending rates has been rather slow. <base rate system introduced to correct this?>
  • Central bank independence

Criticisms/Limitations

  • In case of high fiscal deficit, monetary expansion has continued to happen
  • Limited coverage: The MP covers only commercial banking system and leaves out the non-bank institutions. This limits the effectiveness of MP
  • Unorganised money market: Its pretty large and does not come under the control of the RBI. Hence, MP does not affect them.
  • Predominance of cash transcation (?): <check out the current situation> In India, still there is huge dominance of cash in total money supply. It is one of the main obstables in the effective implementation of MP. Because MP operates on the bank credit rather than cash.
  • Increase volatility: As MP has adoptged changes in accordance to the changes in the external sector as well, it could lead to a high amount of volatility.

Evaluation of the changes in MP and Money Market

  • In response to the reforms, over the years the turnover in various market segments increased significantly
  • The reforms have also led to improvement in liquidity management operations by the RBI as is evident from the stability in call money rates, which also helped improve integration of various money market segments and thereby effective transmission of policy signals
  • The rule based fiscal policy pursued under the FRBM Act, by easing fiscal dominance, contributed to overall improvement in monetary management.
  • With the changing framework of monetary policy in India from monetary targeting to an augmented multiple indictors approach, the operating targets and processes have also undergone a change. There has been a shift from quantitative intermediate targets to interest rates, as the development of financial markets enabled transmission of policy signals through the interest rate channel. At the same time, availability of multiple instruments such as CRR, OMO including LAF and MSS has provided necessary flexibility to monetary operations. While monetary policy formulation is a technical process, it has become more consultative and participative with the involvement of market participant, academics and experts. The internal process has also been re-engineered with more technical analysis and market orientation. In order to enhance transparency in communication the focus has been on dissemination of information and analysis to the public through the Governor’s monetary policy statements and also through regular sharing of policy research and macroeconomic and financial information.
  • The availability of multiple instruments and their flexible use in the implementation of monetary policy have enabled the RBI to successfully influence the liquidity and interest rate conditions in the economy.

Changes in MP

  Pre-reform Post-reform
Operating Target Reserve Money was used as the operating target in the monetary targeting framework until mid-1990s Multiple Indicator Approach
Monetary Policy Instruments CRR and SLR was heavily used Reliance on direct instruments has been reduced and liquidity management in the system is carried out through OMOs in the form of outright purchases of g-secs and daily repo and reverse repo operations under LAF. MSS also introduced.
    Large capital inflows witnessed in recent years have posed a major challenge in the conduct of monetary and exchange rate management.
    Phased deregulation of the interest rates
  High SLR and CRR Low SLR and CRR
     

 

Money Market

  • RBI operationalises its monetary policy through its operations in government securities, foreign exchange and money markets
  • 1985: Money Market reforms begin
  • 1992: Introduction of auction system for government securities
  • 1996: Primary Dealer System initiated
  • 2002: Electronic trading and guaranteed settlement through CCIL for G-Sec starts
  • 2006: RBI expressly empowered to regulate money, forex, G-sec and gold related securities markets

 

Role of RBI

Pre-reform Post-reform
Developmental Role: the developmental role has increased in view of the changing structure of the economy with a focus on SMEs and financial inclusion Priority Sector Lending: Introduced from 1974 with public sector banks. Extended to all commercial banks by 1992 In the revised guidelines for PSL the thrust is on ensuring adequate flow of bank credit to those sectors that impact large segments of the population and weaker sections, and to the sectors which are employment intensive such as agriculture and small enterprises
Lead Bank Scheme Special Agricultural Credit Plan introduced.
Kisan Credit Card scheme (1998-99)
Focus on credit flow to micro, small and  medium enterprises development
Financial Inclusion
Monetary Policy: the role of RBI has changed from regulating credit and money flow directly to using market mechanisms for achieving policy targets. MP framework has changed to promote financial deregulations and market development. Role as a facilitator rather than as principal actor. M3 as an intermediary target Multiple Indicator Approach
Regulation of foreign exchange Management of foreign exchange
Direct credit control Open Market Operations, MSS, LAF
Rupee convertability highly managed Full current ac convertability and some capital account convertability
Banker to the government Monetary policy was linked to the fiscal policy due to automatic monetisation of the deficit Delinking of monetary policy from the fiscal policy. From 2006, under FRBM, RBI ceased to participate in the primary market auctions of the central government’s securities.
As regulator of financial sector: As regulator of the financial sector, RBI has faced the challenge of regulating the increasing financial sector in India. Credit flows have increased. RBI had to make sure that financial institutions are regulated in a way to protect the consumers while not impeding economic growth. Reduction in SLR
Custodian of FOREX reserves Forex reserves have increased drastically. Need to manage it adequately and avoid inflationary impact
Inflation Direct instruments were used Multiple indicators
Financial Stability Closed economy Increased FDI and FII has made financial stability one of the policy objectives.
Money Market Narsimhan Committee (1998) recommended reforms in the money market

 

 

The term Sustainable growth became prominent after the World Conservation Strategy Presented in 1980 by the International Union for the Conservation of Nature and Natural Resources. Brundland Report(1987) define sustainable development as the a process which seek to meet the needs and aspirations of the present generation without compromising the ability of the future generation to meet their own demands.

Natural resources are limited and thus sustainable development promotes their judicious use and put emphasis on conservation and protection of environment.Global warming and Climate change has brought the issue of Sustainable development in prominence.

Inclusive Growth is economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.Indian Plans after the independence were based on the downward infiltration theory, which failed to bring equitable growth to all the sections of the Indian society.

Approach paper of 11th five year plan talked about “Inclusive and more faster growth” through bridging divides by including those in growth process who were excluded. Divide between above and Below Poverty Line, between those with productive jobs and those who are unemployed or grossly unemployed is at alarming stage.

Liberalization and Privatization after 1990’s have brought the nation out of the hindu growth rate syndrome but the share of growth has not been equitably distributed amongst different sections of Indian Society.

Various dimensions of Inclusive growth are:-

  1. economic
  2. social
  3. financial
  4. environmental

Important issues that are needed to be addressed to achieve the inclusive growth are:-

  1. Poverty
  2. Unemployment
  3. Rural Infrastructure
  4. Financial Inclusion
  5. Balanced regional development
  6. Gender equality
  7. Human Resource Development (Health, Education, Skill Development)
  8. Basic Human Resources like sanitation, drinking water, housing etc.

Government has launched several programs and policies for Inclusive growth such as:-

  1. MNREGA
  2. Jan Dhan Yojna
  3. Atal Pension Yojna
  4. Skill India Mission
  5. Deen Dayal Upadhyaya Gram Jyoti Yojana
  6. Pradhan Mantri Suraksha Bima Yojana
  7. Pradhan Mantri Jeevan Jyoti Bima Yojana
  8. Sukanya Samridhi Yojana
  9. Pradhan Mantri  Garib Kalyan Yojana
  10. Jan Aushadhi Yojana (JAY)
  11. Nai Manzil Scheme for minority students
  12. The Pradhan Mantri Awas Yojana (PMAY) or Housing for all by 2022

 

Food Security & Public Distribution System(PDS)

WHO Defines Food security to exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life.
Food security has three interlinked contents such as :-

  1. Availability of food,
  2. Access to food and
  3. absorption of food.

Food security is a multidimensional concept covering even the  micro level household food security,energy intakes and indicators of malnutrition.

 

Major components of food security are:-

  1. Production and Procurement
  2. Storage
  3. Distribution

Indian Agriculture is rightly called as a gamble with Monsoon, variability in food production and rising population creates food insecurity in the nation and worst effected are the downtrodden section of the society.

While India has seen impressive economic growth in recent years, the country still struggles with widespread poverty and hunger. India’s poor population amounts to more than 300 million people, with almost 30 percent of India’s rural population living in poverty. The good news is, poverty has been on the decline in recent years. According to official government of India estimates, poverty declined from 37.2% in 2004-05 to 29.8% in 2009-10.

Need for Self-Sufficiency:

India suffered two very severe droughts in 1965 and 1966. Food Aid to India was restricted to a monthly basis by USA under the P.L. 480 programme.  The Green Revolution made a significant change in the scene. India achieved self-sufficiency in food grains by the year 1976 through the implementation of the seed- water-fertilizer policy adopted by the Government of India.

Food grain production increased four-fold during 1950-51 and 2001-2002 from 51 million tons to 212 million tones. The country is no longer exposed to real famines. But the regional variation in the success of Green Revolution which was chiefly limited to northern- Western states has lead to the divide in the nation. Evergreen revoloution and Bringing green revolution to eastern India is the need of the hour.

Green revolution was focused on wheat and rice and thus the production of pulses was stagnant.

National Food Security Mission comprising rice, wheat and pulses to increase the production of rice by 10 million tons, wheat by 8 million tons and pulses by 2 million tons by the end of the Eleventh Plan (2011-12). The Mission is being continued during 12th Five Year Plan with new targets of additional production of food grains of 25 million tons of food grains comprising of 10 million tons rice, 8 million tons of wheat, 4 million tons of pulses and 3 million tons of coarse cereals by the end of 12th Five Year Plan.
The National Food Security Mission (NFSM) during the 12th Five Year Plan will have five components

(i) NFSM- Rice;

(ii) NFSM-Wheat;

(iii) NFSM-Pulses,

(iv) NFSM-Coarse cereals and

(v) NFSM-Commercial Crops.

Government through Public Distribution System has tried to counter the problem of food insecurity by providing the food grains through fair price shops.

The central Government through Food Corporation of India has assumed the responsibilities of  procurement,storage,transfer and bulk allocation of food grains to state governments.

The public distribution system (PDS) has played an important role in attaining higher levels of the household food security and completely eliminating the threats of famines from the face of the country, it will be in the fitness of things that its evolution, working and efficacy are examined in some details.

PDS was initiated as a deliberate social policy of the government with the objectives of:

  1. i) Providing foodgrains and other essential items to vulnerable sections of the society at resonable (subsidised) prices;
  2. ii) to have a moderating influence on the open market prices of cereals, the distribution of which constitutes a fairly big share of the total marketable surplus; and

iii) to attempt socialisation in the matter of distribution of essential commodities.

 

The focus of the Targeted Public Distribution System (TPDS) is on “poor in all areas” and TPDS involves issue of     35 Kg of food grains per family per month for the population Below Poverty Line (BPL) at specially subsidized prices. The TPDS requires the states to Formulate and implement :-

  1. foolproof arrangements for identification of poor,
  2. Effective delivery of food grains to Fair Price Shops (FPSs)
  3. Its distribution in a transparent and accountable manner at the FPS level.

 

 

 

 

Establishment of Various Financial Institutions

1.     Reserve Bank of India 1934        
2.     Industrial Finance Corporation of India 1948. Sick financial institution.
3.     ICICI 1955        
4.     SBI 1955. Nationalized
5.     Life Insurance Corporation (LIC) 1956        
6.     Industrial Development Bank of India (IDBI) 1964        
7.     Unit Trust of India (UTI) 1964        
8.     HUDCO 1970        
9.     General Insurance Corporation (GIC) 1972        
10.   NABARD 1982        
11.   SEBI (Replaced Controller of Capital Issue) 1988  Functional in 1992
12.   Small Industries Development Bank of India (SIDBI) 1990. Subsidiary of IDBI
13.   IRDA 1999        
          Various Acts & their Enactment Years        
      1.   Banking Regulation Act     1949    
      2. Industries (Development & Regulation) Act     1951    
      3.   MRTP Act     1969    
      4.   FERA     1973    
      5.   Negotiable Instrument Act     1981    
      6.   FEMA     2000    
      7.   Competition Act     2002    
          FDI Upper Limit in Various Sectors        
    1. Print Media   26 % (Recent)  
    2. Defense Sector   26 % (Recent)  
    3. Private Sector Banking, Radio (FM)   74%    
    4. Insurance   26%    
    5. Telecommunications   74%    
    6. Trading   51%    
    7. Power, Drugs & Pharmaceuticals, Road and highways, Ports 100%    
        and harbours, Hotel & Tourism, Advertising, Films, Mass        
        Rapid Transport Systems, Pollution Control & Management,        
        Special Economic Zones, Petroleum Refining(Private Sector)        
        Construction Development, Non Banking Financial Companies.        
    8. Airports   74%    
    9. Domestic Airlines   49%    
    10. Agriculture (including plantation except tea), Atomic Energy, Not Allowed  
        Railways (except Mass Rapid transport system)          
    11. Tea Plantation   100%    

 

 

 

 

 

 

 

 

 

Depository Receipt

A depositary receipt (DR) is a type of negotiable (transferable) financial security that is traded on a local stock exchange but represents a security, usually in the form of equity, that is issued by a foreign publicly listed company. The DR, which is a physical certificate, allows investors to hold shares in equity of other countries. One of the most common types of DRs is the American depositary receipt (ADR), which has been offering companies, investors and traders global investment opportunities since the 1920s.

 

Global Depository Receipt

A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches.

 

Global Depository Receipts facilitate trade of shares, and are commonly used to invest in companies from developing or emerging markets.

 

American Depositary Receipt

An American Depositary Receipt (abbreviated ADR) represents ownership in the shares of a non-U.S. company that trades in U.S. financial markets. The stock of many non-US companies trade on US stock exchanges through the use of ADRs. ADRs enable U.S. investors to buy shares in foreign companies without the hazards or inconveniences of cross-border & cross-currency transactions. ADRs carry prices in US dollars, pay dividends in US dollars, and can be traded like the shares of US-based companies.

 

Each ADR is issued by a U.S. depositary bank and can represent a fraction of a share, a single share, or multiple shares of the foreign stock.

 

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.

 

Qualified Institutional Placement – QIP

A designation of a securities issue given by the Securities and Exchange Board of India (SEBI) that allows an Indian-listed company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators. The SEBI instituted the guidelines for this relatively new Indian financing avenue on May 8, 2006.

 

Minimum Alternate Tax (MAT)

The Indian Income Tax Act contains large number of exemptions from total income. Besides exemptions, there are several deductions permitted from gross total income. Further, depreciation allowable under the Income Tax Act is not the same as required under the Companies Act. The result of such exemptions, deductions, and other incentives under the Income tax Act in the form of liberal rates of depreciation is the emergence of Zero tax companies which inspite of having high book profit are able to reduce their taxable income to nil.

 

The system of minimum alternate tax has accordingly been introduced under which a company is required to pay a minimum tax of 7 % of the book profit in case the tax on the total income computed under the normal provisions of law works out to less than this amount [Sec 115JB].

 

 

 

Negotiated Dealing System

Negotiated Dealing System (NDS) is an electronic platform for facilitating dealing in Government Securities and Money Market Instruments.

 

NDS facilitates electronic submission of bids/application by members for primary issuance of Government Securities by RBI through auction and floatation. NDS also provides interface to Securities Settlement System (SSS) of Public Debt Office, RBI, thereby facilitating settlement of transactions in Government Securities including treasury bills, both outright and repos.

 

National Spot Exchange

Estd. 2008

 

HQ: Mumbai

 

It is a private commodity exchange in India that is a joint venture of Financial Technologies (India) Ltd. (FTIL), Multi Commodity Exchange (MCX) and National Agricultural Cooperative Marketing Federation of India Limited (NAFED).

 

Basel III

India is a member of the Basel Committee on Banking Supervision. It has actively engaged in the development of the Basel III accord. Proposals entail:

 

Require banks to hold more and better quality capital

Require banks to carry more liquid assets

This would limit their leverage and mandate them to build up capital buffers in good times that can be drawn down in periods of stress.

 

Teaser Loans

Loans – usually house loans – that have low, customer friendly and fixed interest rate for initial some time and high interest rate set on a floating rate basis thereafter.

 

The problem with such loans is that there is a greater risk of default as the interest rate increases.

 

National Payments Corporation of India

Incorporated in 2008. To consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems. Promoted by 10 banks.

 

Multidimensional Poverty Index

Developed by Oxford Poverty and Human Development Initiative supported by UNDP

It was featured in HDR-2010 and replaces Human Poverty Index (HPI) which had been included in HDR since 1997

Was created using a technique developed by Sabina Alkire and James Foster

The Alkire-Foster method measures outcomes at the individual level (person or household) against multiple criteria (dimensions and indicators)

The method is flexible and can be used with different dimensions and indicators to create measures specific to different societies and situations

The method can show the incidence, intensity and depth of poverty, as well as inequality among the poor, depending on the type of data available to create the measure

<details in the file in the economy section>

de-mutualised, online exchange dealing in numerous commodities

Indian Commodity Exchange (ICEX) –

Others are:

 

Bharat Diamond Bourse – (Diamond Exchange) – Mumbai

International Pepper Exchange – 1997 – Kochi

These are regulated by the Forward Market Commission setup in 1953

 

Credit Default Swaps

It is a form of insurance against debt default. When an investor buys corporate (or govt) bonds he/she faces the risks of default on part of the issuing agent. The investor can insure its investment in such bonds against default through a third party. The investor pays a premium to the party providing insurance. In the event of default by the bond issuer, the insurer would step and pay the investor. A CDS is just that insurance, which is bought by those who fear default and sold by those who believe it wont.

 

Seigniorage

When the cost of production of a note or coin is less than its face value, seigniorage is said to exist. In some cases, especially for low denomination coins, negative seigniorage can exist. This will mean that the cost of producing the coin is more than its face value.

 

Takeout Finance

Takeout finance is essentially a mechanism designed to enable banks/lenders to avoid asset liability mismatch that may arise out of extending long tenor loans to infrastructure projects. Under this arrangement, banks that extend credit facility to infrastructure projects enter into an arrangement with a financial institution for transferring the loan outstanding in the banks’ books to the books of the financial institution who take out the loan.

 

Subsequent to the announcement in the Union Budget of 2010-11, the government entrusted India Infrastructure Finance Company Ltd (IIFCL) with the task of introducing the Takeout Finance Schemes (TFS)

 

The scheme enhances the availability of long tenor debt finance for infrastructure projects, enables availability of cheaper cost of finance available for the borrower, addresses sectoral/group/single party exposure issues of banks etc. three institutions IIFCL, LIC and IDFC signed MoU to provide takeout finance for infrastructure projects.

 

Impact of Liberalisation

The leading economists of the country differ in their opinion about the socioeconomic and ecological consequences of the policy of liberalisation.Liberalization has led to several positive and negative effects on Indian economy and society. Some of the consequences of liberalisation have been briefly described here:

  1. Increase in the Direct Foreign Investment:The policy of liberalisation has resulted in a tremendous increase in the direct foreign investment in the industrial and infrastructural sector (roads and electricity).
  2. Enhancement in the Growth of GDP:There is a significant growth in the Gross Domestic Product (GDP). Prior to the liberalisation, the growth rate of GDP was around 4 per cent which rose to around 10 per cent in 2006-07.
  3. Reduction in Industrial Recession: The industrial sector of India was passing through a period of recession prior to the policy of liberalisation. The foreign and private investment has checked the recession trend. This happened because of the massive investment in modernisation, expansion, and setting up of many new projects. Industries like automobiles, auto-components, coal-mining, consumer electronics, chemicals, food-processing, metal, petrochemicals, software, sport-goods, and textiles have undergone a growth rate of about 25 per cent. In addition to these, other industries, like crude-oil, construction, fertilisers, and power generation have shown an increase of about 15 per cent.
  4. Employment:The heavy investments in industries and infrastructure by the Indian and foreign investors have generated great employment opportunities for the professionals, and skilled and unskilled workers.
  5. Development of Infrastructure: Prior to the liberalisation, the infrastructure (roads and electricity) were in a bad shape affecting the industrial growth and economic development of the country adversely. Heavy investment in infrastructure has improved the efficiency of the industrial sector significantly.
  6. Rise in Export:There is a phenomenal increase in export after liberalisation. Simultaneously India is importing raw materials, machinery, and finished products. Despite heavy imports, there has been a tangible improvement in the balance of payment.

7-Increase in Regional Disparities:The policy of liberalisation and New Industrial Policy (1991) could not reduce the regional inequalities in economic development. In fact, investments by the Indians and foreign investors have been made in the states of Andhra Pradesh, Gujarat, Haryana, Karnataka, Maharashtra, Rajasthan, Tamil Nadu, and West Bengal. The states like Bihar, Himachal Pradesh, Jammu and Kashmir, Kerala, Meghalaya, Mizoram, Nagaland, Orissa, Tripura, Uttar Pradesh, and Uttarakhand are lagging behind. This has accentuated the regional imbalance and has lead to north south devide. The maximum investment so far has been done in Maharashtra, Gujarat, Andhra Pradesh, West Bengal, and Tamil Nadu. This uneven industrial development has resulted into many socioeconomic and political problems. The Naxal Movement, ULFA, and political turmoil in Jammu and Kashmir may be partly explained as being caused due to the less industrial and economic development of the regions.
8. Damage to Cottage and Small Scale Industries:Liberalisation in a country like India has adversely affected the traditional cottage and small scale industries which are unable to compete with the large-scale industries established by the multinationals. The cottage and small scale industries need protection in the form of subsidies, technology, technical access, funds, and network to export their products, Indian traditional workers such as silk workers of bihar are threatened by the imported synthetic silk.

9.Sophisticated Technology: The latest technology, being sophisticated, replaces labour and thus results in unemployment. This may be counter productive and detrimental to our industrial structure.

  1. Comparatively Little Direct Investment: The foreign investors are more inclined to portfolio investment rather than direct investment. The former may be withdrawn at will at the slightest of hurdles giving a jolt to the economy of the country  and it may create instability to Indian economy.

    11. Investment in Selected Industries: Most of the foreign investment comes to white-goods and not to wage-good sector. Hence, it may be fruitful in improving the high priority sector and bringing in the latest technology. This will be counter productive. India is blessed with demographic dividend and the selective investment has failed to harness it.

    12. Economic and Political Freedoms are at Stake: The over-enthusiasm of liberalisation to attract more investors and foreign exchange might lead to gradual handling over of the whole economy to the multinationals. This will affect adversely our economic and political freedom.

  2. Inflation:Since the new industrial policy and liberalisations, the rate of inflation is continuously increasing. A section of the society is becoming more rich and adopting the lifestyle of consumerism. As opposed to this, the absolute number below the poverty line is also increasing. The gulf between the rich and the poor may be the cause of numerous social problems resulting in social tension.

Impacts of Privatization

Privatization in generic terms refers to the process of transfer of ownership, can be of both permanent or long term lease in nature, of a once upon a time state-owned or public owned property to individuals or groups that intend to utilize it for private benefits and run the entity with the aim of profit maximization.
ADVANTAGES OF PRIVATIZATION
Privatization indeed is beneficial for the growth and sustainability of the state-owned enterprises.
• State owned enterprises usually are outdone by the private enterprises competitively. When compared the latter show better results in terms of revenues and efficiency and productivity. Hence, privatization can provide the necessary impetus to the underperforming PSUs .
• Privatization brings about radical structural changes providing momentum in the competitive sectors .
• Privatization leads to adoption of the global best practices along with management and motivation of the best human talent to foster sustainable competitive advantage and improvised management of resources.
• Privatization has a positive impact on the financial health of the sector which was previously state dominated by way of reducing the deficits and debts .
• The net transfer to the State owned Enterprises is lowered through privatization .
• Helps in escalating the performance benchmarks of the industry in general .
• Can initially have an undesirable impact on the employees but gradually in the long term, shall prove beneficial for the growth and prosperity of the employees .
• Privatized enterprises provide better and prompt services to the customers and help in improving the overall infrastructure of the country.

DISADVANTAGES OF PRIVATIZATION
Privatization in spite of the numerous benefits it provides to the state owned enterprises, there is the other side to it as well. Here are the prominent disadvantages of privatization:
• Private sector focuses more on profit maximization and less on social objectives unlike public sector that initiates socially viable adjustments in case of emergencies and criticalities .
• There is lack of transparency in private sector and stakeholders do not get the complete information about the functionality of the enterprise .
• Privatization has provided the unnecessary support to the corruption and illegitimate ways of accomplishments of licenses and business deals
ADVANTAGES AND DISADVANTAGES OF PRIVATISATION IN INDIA

  • Privatization loses the mission with which the enterprise was established and profit maximization agenda encourages malpractices like production of lower quality products, elevating the hidden indirect costs, price escalation etc..
    • Privatization results in high employee turnover and a lot of investment is required to train the lesser-qualified staff and even making the existing manpower of PSU abreast with the latest business practices .
    • There can be a conflict of interest amongst stakeholders and the management of the buyer private company and initial resistance to change can hamper the performance of the enterprise .
    • Privatization escalates price inflation in general as privatized enterprises do not enjoy government subsidies after the deal and the burden of this inflation effects common man

 

 

Impacts of Globalisation:-

Definition of Globalization :- Its a process(not an outcome) characterized by increasing global Interconnections by gradual removal of barriers to trade and investment between nation and higher economic efficiency through competitiveness.

Various economic, political, social and cultural effects of globalization are as follows:-

Economic:-

  • Breaking down of national economic barriers
  • International spread of Trade, Financial and productive activities
  • Growing power of transnational cooperation and International financial Institutions(WTO, IMF)Through the process of:-

1- Liberalization- relaxation of restrictions, reduction in role of state in economic activities,decline in role of govt in key industries, social and infrastructural sector.

2- Privatization- Public offering of shares and private sale of shares, entry of private sector in public sector and sale of govt enterprises.

3- FDI

4- International regulatory bodies(WTO,IMF)

5- MNC’s

6- Infrastructural development

7- Expansion of information and communication technology and birth of information age.

8- Outsourcing of services- ie BPO and Call Centres.

9- Trade related intellectual property rights(TRIPS)- product based patent rather than process based.

Social effects:-

  • Withdrawal of National govt from social sectors ie declining share of govt in public spending, reducing social benefits for worker(social dumping,pension cuts,subsidies reduction)
  • Labor  reforms and deteriorating Labor welfare:-
    • Labour Market deregulation:-
      • Minimum wage fixing
      • Employment security
      • Modifying tax regulation
      • Relaxed standards of security
    • Increased Mechanization demands skilled labour and thus loss of job for unskilled labour
    • Loss of jobs for traditional workers for example bihar silk workers due to imported Chinese- Korean silk
  • Feminism of Labour ie increased women participation specially in soft industries
  • Trickle down theory of poverty reduction has limited success and in agricultural nations poverty has infect increased.
  • Unsustainable development practices such as:- excessive use of fertilizers, irrigation, fish trawling by mnc’s(Protein flight ),Exploitation of natural resources by MNC’s.
  • Migration and urbanization have lead to problem of slums
  • Commercialization of indigenous knowledge:- patenting
  • Rising inequality in wealth concentration

 

Cultural:-

  • Increased pace of cultural penetration
  • Globalization of culture
  • Development of hybrid culture
  • Resurgence of cultural nationalism ie shivsena opposing valentine day

 

Political:-

  • Globalization of National Policies- Influenced by International agencies
  • Reducing economic role of govt
  • Political lobbying

 

Positive effects of Globalization

  • Increased competition
  • Employment generation
  • Investment and capital flow
  • Foreign trade
  • Spread of technical know how
  • Spread of education
  • Legal and ethical effects
  • Improved status of women in the society
  • Urbanization
  • Agriculture:- greater efficiency,productivity, use of HYV seeds, Future contracts and cooperative farming
  • Higher standard of living

 

 

Financial Stablity

 

Reasons for financial instability

  • Increased non-official capital flows across countries through banks and international capital markets.
  • Hasty and non-strategic liberalisation
  • Deregulation of financial sector
  • Opening up of the capital account in many countries

Intiatives by RBI

  • Had set up the Committee on Financial Sector Assessment in 2009
  • Will setup a dedicated interdisciplinary Financial Stability Unit with the remit to assess the health of the financial system with a focus on identify and analysing potential risks to systemic stability and carrying out stress tests on an ongoing basis
  • Financial Stability Reports are being released

Financial Stability Report

  • Three FSRs released till June 2011
  • First was released in March 2010
  • As per the three FSRs released so far, there is no serious threat to the Indian financial system
  • FSR 2011
    • states that the Indian financial system remains stable in the face of some fragilities being observed in the global macro-financial environment.
    • Banking sector continues to be stable
    • Banking stability indicator confirms the overall improvement in the stability of banking sector
    • Toxity index/vulnerability index: the probability of a bank causing distress to another bank or being affected by the distress of another bank

FS in India

  • The relatively crisis free environment in the Indian financial system can be attributed to the strength of state home grown policies pursued with caution and prudence.
  • In the late 1990s, FS was incorporated as a specific objective of the RBI’s policy after the Asian Financial crisis.
  • Present weaknesses in the financial system
    • Greater access of domestic corporate to ECBs has resulted in increased currency mismatches
    • Increased reliance on market borrowings could adversely affect the liquidity position of banks
    • There remains gaps in the regulatory framework for NBFCs

 

 

GRASSLAND ECOSYTEM

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found where rainfall is about 25-75 cm per year, not enough to support a forest, but more than that of a true desert.

vegetation formations that are generally found in temperate climates.

In India, they are found mainly in the high Himalayas. The rest of India’s grasslands aremainly composed of steppes and savannas.

Steppe formations occupy large areas of sandy and saline soil; in western Rajasthan, where the climate is semi-arid,

The major difference between steppes and savannas is that all the forage in the steppe is  provided only during the brief wet season whereas in the savannas forage is largely from grasses that not only grow during the wet season but also from the  smaller amount of regrowth in the dry season.

 

Types of Grasslands

  1. semi-arid zone (The Sehima-dichanthium type)

It covers the northern portion of Gujarat, Rajasthan (excluding Aravallis), western Uttar Pradesh, Delhi and Punjab.

The topography is broken up by hill spurs and sand dunes.

senegal, Calotropis gigantia, Cassia auriculata, Prosopis cineraria, Salvadora oloides and zizyphus Nummularia which make the savanna rangeland look like scrub.

  1. dry sub humid zone (The Dichanthium- cenchrus-lasitrrus type)

It covers the whole of peninsular India (except Nilgiri).

The thorny bushes are Acacia catechu, Mimosa, Zizyphus (ber) and sometimes fleshy Euphorbia, along with low trees of Anogeissus latifolia, Soymida febrifuga and other deciduous species.

Sehima (grass)is more prevalent on gravel and the cover maybe 27%. Dichanthium (grass) flourishes on level soils and may cover 80% of the ground.

3)  moist subhumid zone(The Phragmities- sacchrum-imperata type)

It covers the Ganga alluvial plain in Northern India.

The topography is level, low lying and ill-drained.

Bothriochloa pertusa, Cypodon dactylon and     Dichanthium annulatum are found in transition zones.

The common trees and shrubs are Acacia arabica, hogeissus, latifolia, Butea monosperma,

Phoenic sylvestris and Zizyphus nummularia.

Some of these are replaced by Borassus sp in the palm savannas especially near Sunderbans.

4) The Themeda – Arundinella type

This extends to the humid montane regions and moist sub-humid axeas of Assam, Manipur,West Bengal, Uttar Pradesh, Punjab, Himachal Pradesh and. Jammu and Kashmir.

The savanna is derived from the humid forests on account of shifting cultivation and sheep grazing.

Indian Grasslands and Fodder Research Institute, Jhansi and Central Arid Zone Research institute, Jodhpur

Role of fire

fire plays, an important role in the management  of grasslands.

Under moist conditions fire favours grass over trees, whereas in dry conditions fire is often necessary to maintain grasslands against the invasion of desert shrubs.

Burning increases the forage yields, e.g. Cynodon daotylon

MATHEMATICS AND QUATITUATIVE APTITUDE – SIMPLE INTEREST

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Introduction

Money is not free and it costs to borrow the money. Normally, the borrower has to pay an extra amount in addition to the amount he had borrowed. i.e, to repay the loan, the borrower has to pay the sum borrowed and the interest.

Lender and Borrower

The person giving the money is called the lender and the person taking the money is the borrower.

Principal (sum)

Principal (or the sum) is the money borrowed or lent out for a certain period. It is denoted by P.

Interest

Interest is the extra money paid by the borrower to the owner (lender) as a form of compensation for the use of the money borrowed.

Simple Interest (SI)

If the interest on a sum borrowed for certain period is calculated uniformly, it is called simple interest(SI).

Amount (A)

The total of the sum borrowed and the interest is called the amount and is denoted by A

  • The statement “rate of interest 10% per annum” means that the interest for one year on a sum of Rs.100 is Rs.10. If not stated explicitly, rate of interest is assumed to be for one year.

 

  • Let Principal = P, Rate = R% per annum and Time = T years. Then

    Simple Interest, SI = PRT/100

 

  • From the above formula , we can derive the followings

    P=100×SI/RT

    R=100×SI/PT

    T=100×SI/PR

 

Some Formulae

  1. If a sum of money becomes n times in T years at simple interest, then the rate of interest per annum can be given be R = 100(n−1)/T %
  2. The annual instalment which will discharge a debt of D due in T years at R% simple interest per annum =100D/ (100T+RT(T-1)/2)
  3. If an amount P1is lent out at simple interest of R1% per annum and another amount P2 at simple interest rate of R2% per annum, then the rate of interest for the whole sum can be given by
    R=(P1R1+P2R2)/ (P1+P2)
  4. If a certain sum of money is lent out in n parts in such a manner that equal sum of money is obtained at simple interest on each part where interest rates are R1, R2, … , Rnrespectively and time periods are T1, T2, … , Tn respectively, then the ratio in which the sum will be divided in n parts can be given by (1/R1T1):(1/R2T2):⋯(1/RnTn)
  5. If a certain sum of money P lent out for a certain time T amounts to P1at R1% per annum and to P2at R2% per annum, then P = (P2R1−P1R2)/ (R1−R2) and T = (P1−P2) ×100 years / (P2R1−P1R2)

SOLVED EXAMPLES

LEVEL 1

1.       Arun took a loan of Rs. 1400 with simple interest for as many years as the rate of interest. If he paid Rs.686 as interest at the end of the loan period, what was the rate of interest?
               A. 8% B. 6%
               C. 4% D. 7%

Ans. Let rate = R%

Then, Time, T = R years

P = Rs.1400

SI = Rs.686

SI= PRT/100⇒686 = 1400 × R × R/100⇒686=14 Rx R ⇒49=Rx R ⇒R=7

i.e.,Rate of Interest was 7%. (D)

2.       How much time will it take for an amount of Rs. 900 to yield Rs. 81 as interest at 4.5% per annum of simple interest?
               A. 2 years B. 3 years
               C. 1 year D. 4 years

 

 

Ans. P = Rs.900

SI = Rs.81

T = ?

R = 4.5%

T= 100×SI/PR = 100×81/(900×4.5) = 2 years (A)

3.       A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is :
              A. Rs. 700 B. Rs. 690
              C. Rs. 650 D. Rs. 698

 

 

Ans. Simple Interest (SI) for 1 year = 854-815 = 39

Simple Interest (SI) for 3 years = 39 × 3 = 117

Principal = 815 – 117 = Rs.698 (D)

 

4.       A sum fetched a total simple interest of Rs. 929.20 at the rate of 8 p.a. in 5 years. What is the sum?
 A. Rs. 2323 B. Rs. 1223
C. Rs. 2563 D. Rs. 2353

 

Ans. SI = Rs.929.20

P = ?

T = 5 years

R = 8%

P = 100×SI/RT=100×929.20/(8×5) = Rs.2323 (A)

5.       What will be the ratio of simple interest earned by certain amount at the same rate of interest for 5 years and that for 15 years?
A. 3 : 2 B. 1 : 3
C. 2 : 3 D. 3 : 1

 
Solution 1
Let Principal = P

Rate of Interest = R%

Required Ratio = (PR×5/100)/ (PR×15/100) =1:3 (B)
Solution 2

Simple Interest = PRT100

Here Principal(P) and Rate of Interest (R) are constants

Hence, Simple Interest ∝ T

Required Ratio = Simple Interest for 5 years Simple Interest for 15 years=T1T2=515=13=1:3 (B)

6.       A sum of money amounts to Rs.9800 after 5 years and Rs.12005 after 8 years at the same rate of simple interest. The rate of interest per annum is
A. 15% B. 12%
 C. 8% D. 5%

 

 

Ans. Simple Interest for 3 years = (Rs.12005 – Rs.9800) = Rs.2205

Simple Interest for 5 years = 22053×5=Rs.3675

Principal (P) = (Rs.9800 – Rs.3675) = Rs.6125

R = 100×SI/PT=100×3675/(6125×5) =12% (B)

7.       A lent Rs. 5000 to B for 2 years and Rs. 3000 to C for 4 years on simple interest at the same rate of interest and received Rs. 2200 in all from both of them as interest. The rate of interest per annum is:
 A. 5% B. 10%
C. 7% D. 8%

 

 

Ans. Let the rate of interest per annum be R%

Simple Interest for Rs. 5000 for 2 years at rate R% per annum +Simple Interest for Rs. 3000 for 4 years at rate R% per annum = Rs.2200

⇒5000×R×2/100+3000×R×4/100=2200

⇒100R + 120R=2200⇒220R=2200⇒R=10

i.e, Rate = 10%. (B)

8.       In how many years, Rs. 150 will produce the same interest at 6% as Rs. 800 produce in 2 years at 4½% ?
A. 4 years B. 6 years
C. 8 years D. 9 years

 

 

Ans. Let Simple Interest for Rs.150 at 6% for n years = Simple Interest for Rs.800 at 4½ % for 2 years

150×6×n/100=800×4.5×2/100

150×6×n=800×4.5×2

n=8 years (C)

 

LEVEL 2

1.        Mr. Thomas invested an amount of Rs. 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?
 A. Rs. 6400 B. Rs. 7200
 C. Rs. 6500 D. Rs. 7500

 

 

Ans. Let the investment in scheme A be Rs.x

and the investment in scheme B be Rs. (13900 – x)

We know that SI = PRT/100

Simple Interest for Rs.x in 2 years at 14% p.a. = x×14×2100=28x100Simple Interest for Rs.(13900 – x) in 2 years at 11% p.a. = (13900−x)×11×2/100 =22(13900−x)/100

Total interest =Rs.3508

Thus, 28x/100+22(13900−x)/100 = 3508

28x+305800−22x=350800

6x = 45000

x=45000/6=7500

Investment in scheme B = 13900 – 7500 = Rs.6400 (A)

2.       A certain sum in invested for T years. It amounts to Rs. 400 at 10% per annum. But when invested at 4% per annum, it amounts to Rs. 200. Find the time (T).
 A. 45 years B. 60 years
C. 40 years D. 50 Years

 
Solution 1
Let the principal = Rs.x

and time = y years

Principal,x amounts to Rs.400 at 10% per annum in y years

Simple Interest = (400-x)

Simple Interest = PRT/100

⇒ (400−x) = x×10×y/100

⇒ (400−x) = xy/10— (equation 1)

Principal,x amounts to Rs.200 at 4% per annum in y years

Simple Interest = (200-x)

Simple Interest = PRT/100

⇒ (200−x) = x×4×y/100

⇒ (200−x) = xy/25— (equation 2)

(equation 1)/(equation2)

⇒(400−x) / (200−x) = (xy/10)/(xy/25)

⇒ (400−x)/ (200−x) =25/10

⇒ (400−x)/ (200−x) =52

⇒800−2x = 1000−5x

⇒200=3x

⇒x =200/3 Substituting this value of x in Equation 1, we get,

(400−200/3) = (200y/3)/10

⇒ (400−200/3) = 20y/3

⇒1200−200=20y

⇒1000=20y

y=1000/20=50 years (D)

Solution 2
If a certain sum of money P lent out for a certain time T amounts to P1 at R1% per annum and to P2 at R2% per annum, then

P = (P2R1−P1R2)/ (R1−R2)

T = (P1−P2)x 100 years/(P2R1−P1R2)

R1 = 10%, R2 = 4%

P1 = 400, P2 = 200

T = (P1−P2)x 100 / (P2R1−P1R2) = (400−200)x 100 / (200×10−400×4)

=200 x 100/ (2000−1600) =200 ×100/400 = 12×100=50 years (D)

3.       Mr. Mani invested an amount of Rs. 12000 at the simple interest rate of 10% per annum and another amount at the simple interest rate of 20% per annum. The total interest earned at the end of one year on the total amount invested became 14% per annum. Find the total amount invested.
  A. Rs. 25000 B. Rs. 15000
 C. Rs. 10000 D. Rs. 20000

 

Ans. If an amount P1 is lent out at simple interest of R1% per annum and another amount P2 at simple interest rate of R2% per annum, then the rate of interest for the whole sum can be given by

R= (P1R1+P2R2)/(P1+P2)

P1 = Rs. 12000, R1 = 10%

P2 =? R2 = 20%

R = 14%

14 = (12000×10+P2×20)/ (12000+P2)

12000×14+14P2 =120000+20P2

6P2=14×12000−120000=48000

⇒P2=8000

Total amount invested = (P1 + P2) = (12000 + 8000) = Rs. 20000 (D)

4.       A sum of money is lent at S.I. for 6 years. If the same amount is paid at 4% higher, Arun would have got Rs. 120 more. Find the principal
  A. Rs. 200 B. Rs. 600
 C. Rs. 400 D. Rs. 500

 

 

Ans. This means, simple interest at 4% for that principal is Rs.120

P=100×SI/ RT=100×120/ (4×6) =100×30/6 = 100×5 = 500 (D)

5.       The simple interest on Rs. 1820 from March 9, 2003 to May 21, 2003 at 7 1⁄2% rate is
 A. Rs. 27.30 B. Rs. 22.50
C. Rs. 28.80 D. Rs. 29

 

 

Ans. Time, T = (22 + 30 + 21) days = 73 days = 73/365 year=1/5 year

Rate, R = 7.5%=15/2%

SI = PRT/100 = 1820× (15/2) × (1/5)/100 = 1820 × (3/2)/100 = 910 × 3/100

= 2730/100 = 27.30 (A)

6.       A sum of Rs. 7700 is to be divided among three brothers Vikas, Vijay and Viraj in such a way that simple interest on each part at 5% per annum after 1, 2 and 3 years respectively remains equal. The Share of Vikas is more than that of Viraj by
 A. Rs.1200 B. Rs.1400
 C. Rs.2200 D. Rs.2800

Ans. If a certain sum of money is lent out in n parts in such a manner that equal sum of money is obtained at simple interest on each part where interest rates are R1, R2, … , Rn respectively and time periods are T1, T2, … , Tn respectively, then the ratio in which the sum will be divided in n parts can be given by

1/R1T1:1/R2T2:⋯1/RnTn

 

T1 = 1 , T2 = 2, T3 = 3

R1 = 5 , R2 = 5, R3 = 5

Share of Vikas : Share of Vijay : Share of Viraj

= (1/5×1) : (1/5×2) : (1/5×3) = 1/1:1/2:1/3 = 6:3:2

Total amount is Rs. 7700

Share of Vikas = 7700×6/11=700×6 = 4200

Share of Viraj = 7700×2/11=700×2=1400

Share of Vikas is greater than Share of Viraj by (4200 – 1400) = Rs. 2800 (D)

 

7.       David invested certain amount in three different schemes A, B and C with the rate of interest 10% p.a., 12% p.a. and 15% p.a. respectively. If the total interest accrued in one year was Rs. 3200 and the amount invested in Scheme C was 150% of the amount invested in Scheme A and 240% of the amount invested in Scheme B, what was the amount invested in Scheme B?
 A. Rs.5000 B. Rs.2000
 C. Rs.6000 D. Rs.3000

 

 

Ans. Let x, y and x be his investments in A, B and C respectively. Then

Then, Interest on x at 10% for 1 year

+ Interest on y at 12% for 1 year

+ Interest on z at 15% for 1 year

= 3200

x×10×1/100+y×12×1/100+z×15×1/100=3200

⇒10x+12y+15z=320000−−−(1)

Amount invested in Scheme C was 240% of the amount invested in Scheme B

=>z=240y/100 = 60y/25=12y/5−−−(2)

Amount invested in Scheme C was 150% of the amount invested in Scheme A

=>z=150x/100=3x/2

=>x=2z/3=2/3×12y/5=8y/5−−−(3)

From(1),(2) and (3),

10x + 12y + 15z = 320000

10(8y/5)+12y+15(12y/5)=320000

16y+12y+36y=320000

64y=320000

y=320000/64=10000/2=5000

i.e.,Amount invested in Scheme B = Rs.5000 (A)

 

DISCOUNT

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Discount

 

The discount is referred to the reduction in the price of some commodity or service. It may anywhere appear in the distribution channel in the form of modifications in marked price (printed on the item) or in retail price (set by retailer usually by pasting a sticker on the item) or in list price (quoted for the buyer). The discount is provided for the purpose of increasing sales, to clear out old stock, to encourage distributors, to reward potential customer etc. In short, the discount can serve as a way to attract customers for a particular item or service.

In math, discount is one of the easiest way to raise the customers of particular product. Discounts are a significant element of your online merchandising plan. You build discounts so that you can force sales on items or collection of products to your customers who convene particular conditions. In math, the discount problems can be solved by using discount formula.

The “discount rate” means the interest rate. Discount rate is based on the simple interest rate. To calculate simple interest rate, just find out the interest rate for one period (multiply by amount, interest rate, period) but calculate the discount rate, just multiply by the amount and an interest rate. This is called the define discount rate.

To calculate the discount rate, just multiply the amount by an interest rate. By using the Formula Discount rate DR = pr (p = principal amount, r = interest rate).

 

What is Discount Rate?

Discount rate is one of the simple ways to increase the customers of particular product. Discounts are a important element of your online merchandising strategy. You make discounts so that you can force sales on products or collection of products to your customers who meet certain particular conditions.

 

 

The formula used to calculate the discount is discount = marked price – selling price.

Here,

 

Selling price is what you actually pay for the item.

 

Marked price is the normal price of the item without a discount.

 

Discount is either a dollar rate or a percentage of the marked cost.

 

Discount Rate Definition

Discount Rate is the cost of the total amount generally less than its original value is called . In other words, a total bill will generally sell at a discount, and the discount rate is annualized percentage of this discount, that is percentage is adjusted to give an annual percentage.

 

Discount Rate Formula

Formula of the Discount Rate is:

 

Discount rate DR = pr

where,

  • p = principal amount
  • r = interest rate

 

 

 

Questions:

Level-I

1: Ricky purchase the dress. That dress rate was Rs1000 at 10% discount . Find discount rate? And then ricky how many dollars give to cashier?

2: Kalvin purchased land for 50000 dollars at 20% in 2000th year. Then 2004th year that land sales 3000 dollars. How many dollars he loss?

  1. The marked price of a ceiling fan is $ 1250 and the shopkeeper allows a discount of 6% on it. Find the selling price of the fan.
  2. A trader marks his goods at 40% above the cost price and allows a discount of 25%. What is his gain percent?
  3. A dealer purchased a washing machine for $ 7660. He allows a discount of 12% on its marked price and still gains 10%. Find the marked price of the machine.
  4. How much per cent above the cost price should a shopkeeper mark his goods so that after allowing a discount of 25% on the marked price, he gains 20%?
  5. Find the single discount equivalent to two successive discounts of 20% and 10%.
  6. A merchant who marked his goods up by 50% subsequently offered a discount of 20% on the marked price. What is the percentage profit that the merchant make after offering the discount?

 

  1. Applied to a bill for Rs. 1,00,000 the difference between a discount of 40% and two successive discounts of 36% and 4% is:
  2. On a 20% discount sale, an article costs Rs. 596. What was the original price of the article?

Level-II:

  1. A discount of 15% on one article is the same as discount of 20% on a second article. The costs of the
  2. A discount of 2 ½% is given to the customer on marked price of an article. A man bought the article for Rs. 39. The marked price of article is:
  3. Printed price of an article is Rs. 900 but the retailer gets a discount of 40%. He sells the article for Rs. 900. Retailer’s gain percent is:
  4. The marked price of a watch was Rs. 720. A man bought the same watch for Rs. 550.80, after getting two successive discounts. If the first discount was 10%, what was the second discount rate?
  5. A shopkeeper marks his goods 20% above cost price, but allows 30% discount for cash. His net loss is:
  6. A retailer buys 40 pens at the marked price of 36 pens from a wholesaler. If he sells these pens giving a discount of 1%, what is the profit percent?
  7. A pizzeria has a coupon that reads, “Getoff a $9.00 cheese pizza.” What is the discount? What is the sale price of the cheese pizza?

18.In a video store, a DVD that sells for $15 is marked, “10% off.” What is the sale price of the DVD?

 

Answers:

Level-I:

 

Solution:1
Here,

Principal amount p = 1000 rs

Interest rate r = 10%

Discount rate DR = pr

DR = 1000*

= 100

The discount amount for the dress is 100.

Discount rate DR = 100.

Dress rate = principal amount – discount rate

= 1000 – 100

=900

Ricky gives 900 rs to cashier

 

 

Solution:2
Principal amount p = 50000 dollars

Interest rate r = 20%

Discount rate DR = pr

DR = 50000 x 2010020100 in 2000th year

= 10000

Discount rate DR = 1000 dollars in 2000th year.

The discount amount is 10000 dollars.

Discount rate DR = 50000*30/100 in 2004th year

Discount rate =15000 dollars.

The discount amount is 15000 dollars.

Loss Discount rate in 2004th year – Discount rate in 2000th year

=15000 dollars – 10000 dollars

=5000 dollars

Kalvin 5000 dollars losses in that land.
 

Solution:3

Marked price = $ 1250 and discount = 6%.

Discount = 6% of Marked Price

= (6% of $ 1250)

= $ {1250 × (6/100)}

= $ 75

Selling price = (Marked Price) – (discount) 

= $ (1250 – 75)

= $ 1175.

Hence, the selling price of the fan is $ 1175.

 

Solution:4

Let the cost price be $ 100.

Then, marked price = $ 140.

Discount = 25% of Marked Price 

= (25% of $ 140)

= $ {140 × (25/100)

= $ 35.

Selling price = (marked price) – (discount) 

= $ (140 – 35)

= $ 105.

Gain% = (105 – 100) % = 5%.

Hence, the trader gains 5%.

 

Solution:5

Cost price of the machine = $ 7660, Gain% = 10%.

Therefore, selling price = [{(100 + gain%)/100} × CP]

= $ [{(100 + 10)/100} × 7660]

= $ [(110/100) × 7660]

= $ 8426.

Let the marked price be $ x.

Then, the discount = 12% of $x

= $ {x × (12/100)}

= $ 3x/25

Therefore, SP = (Marked Price) – (discount)

= $ (x – 3x/25)

= $ 22x/25.

But, the SP = $ 8426.

Therefore, 22x/25 = 8426

⇒ x = (8426 × 25/22)

⇒ x = 9575.

Hence, the marked price of the washing machine is $ 9575

 

Solution:6

Let the cost price be $ 100.

Gain required = 20%.

Therefore, selling price = $ 120.

Let the marked price be $x.

Then, discount = 25% of $x

= $ (x × 25/100)

= $ x/4

Therefore, selling price = (Marked Price) – (discount)

= $ {x – (x/4)

= $ 3x/4

Therefore, 3x/4 = 120

⇔ x = {120 × (4/3)} = 160

Therefore, marked price = $ 160.

Hence, the marked price is 60% above cost price.

 

Solution:7

Let the marked price of an article be $ 100.

Then, first discount on it = $ 20.

Price after first discount = $ (100 – 20) = $ 80.

Second discount on it = 10% of $ 80

= $ {80 × (10/100)} = $ 8.

Price after second discount = $ (80 – 8) = $ 72.
Net selling price = $ 72.

Single discount equivalent to given successive discounts = (100 – 72)% = 28%

 

Solution:8 The easiest way to solve these kinds of problems is to assume a value for the merchant’s cost price.
To make calculations easy, it is best to assume the cost price to be $100.

The merchant marks his goods up by 50%.
Therefore, his marked price (quoted price) = cost price + mark up.
Marked price = $100 + 50% of $100 = 100 + 50 = $150.

The merchant offers a discount of 20% on his marked price.
Discount offered = 20% of 150 = $30.

Therefore, he finally sold his goods for $150 – $30 = $ 120.
We assumed his cost to be $100 and he sold it finally for $120.

Therefore, his profit = $20 on his cost of $ 100.
Hence, his % profit = profit/cost price * 100 = 20/100*100  = 20%.

 

Solution:9 40% of Rs. 1,00,000 = Rs. 40,000
36% of 1,00,000 = 36000
4% of 36,000 = Rs. 2,560.
Therefore, two successive discounts on Rs. 1,00,000 = 36,000 + 2560 = Rs. 38,560.
Difference between a discount of 40% and two successive discounts of 36% and 4%
= 40,000 – 38,560
= Rs. 1,440

Solution:10 If the selling price of the article is S, then
S – 20% of S = 596
S – S/5 = 596
4S/5 = 596
⇒ S = 596 x 5/4
⇒ S = 745

Level-II

Solution:11Let the prices of two articles be X and Y
From the question 15X/100 = 20Y/100
X/Y = 20/15
Thus the ratio of prices of two articles is 4 : 3
Any two amounts in the ratio 4 : 3 will satisfy the condition.
In the above instance, Rs. 80 and Rs. 60 is the answer.

Solution:12 Formula for Marked Price = 100 x SP/(100 – d%) = 100 x 39/(100 – 2.5%)
= 3900 / 97.5
= Rs. 40.
Marked Price of Article is Rs. 40.

Solution:13 Retailer gets a discount of 40% means he buys it at 60% of the price
60% x 900 = Rs. 540
Profit on selling it at Rs. 900 = 900 – 540 = Rs. 360.
Profit % = (Profit / C.P) x 100 = (360 / 540) x 100 = 662/3
Retailer’s Gain percent is 662/3

Solution:1410% discount on 720 = Rs. 72
Cost after 1st discount = 720 – 72 = Rs. 648.
Cost after 2nd discount = Rs. 550.80
Therefore 2nd discount = 648 – 550.80 = Rs. 97.20
Discount % = (97.2 x 100)/648 = 15%
Second discount rate = 15%.

Solution:15 Let the cost price be Rs. 100.
M.P. (which is 20% above C.P.) = Rs. 120.
30% discount on Rs. 120 = Rs. 36.
Selling Price = Rs. 120 – 36 = Rs. 84
Cost Price = Rs 100 and Selling Price = Rs 84 {since CP > SP, it is a loss}
Loss% = (16/100) x 100 = 16%.
His net loss percent is 16%.

Solution:16 Assuming the M.P. of each pen to be Rs. 10, the M.P. of 36 pens = Rs. 360
Cost price of 40 pens = Rs. 360 (from the question)
Cost price of each pen = 360/40 = Rs. 9
Selling Price of each pen at a discount of 1% on a marked price of Rs. 10 = 99% x 10 = Rs. 9.90
Profit = 9.90 – 9.00 = Rs. 0.90
Profit % = (0.90/9.00) x 100 = 10%
Profit % = 10%.

Solution:17 The discount is $3.00 and the sale price is $6.00

Solution:18 The rate is 10%. Thus, the customer is paying 90% for the DVD

The sale price is: 0.90 x $15.00 = $13.50

The sale price is $13.50.

Current Geopolitical Conflicts

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Geopolitical Conflict is the Military engagements and diplomatic crises between nations with global implications and which even threatens in extreme circumstance to the survival of humanity.Various types of Geopolitical Conflicts are as follows:-

Ø  Conventional War:-The engagement of two or more nations in military conflict, using conventional weapons to target military infrastructure and invade/defend sovereignty

Ø  Asymmetric War:- Military action, insurgency and violent resistance carried out between combatants of significantly different power, resources, and interests

Ø  Nuclear War:- Military Conflict pursued using nuclear weapons

Ø  Civil War:- Internal conflict within a country, including wars of succession and coups d’etat

Ø  External Force:- Blockades, No-Fly zones, missile attack or other military action by external forces to prevent national authorities pursuing internal policies deemed harmful or repugnant

 

Currently several geopolitical conflict zones across the globe are observed , Few of them are:-

  • Syrian Civil WarThe Syrian civil war is an ongoing multi-sided armed conflict in Syria in which international interventions] have taken place. The war grew out of the unrest of the 2011 Arab Spring and escalated to armed conflict after President Bashar al-Assad’s government violently repressed protests calling for his removal. The war is now being fought among several factions: the Syrian Government, a loose alliance of Syrian Arab rebel groups, the Syrian Democratic Forces, Salafi jihadist groups (including al-Nusra Front) who often co-operate with the rebels, and the Islamic State of Iraq and the Levant (ISIL). The factions receive substantial support from foreign actors, leading many to label the conflict a proxy war waged by both regional and global powers.

Syrian opposition groups formed the Free Syrian Army and seized control of the area surrounding Aleppo and parts of southern Syria.

Read More

  • Russia and Turkey:-On 24 November 2015, Turkish F-16 combat aircraft shot down a Russian Su-24 during an airspace dispute close to the Turkish-Syrian border. In response, Russia imposed a number of economic sanctions on Turkey. These included the suspension of visa-free travel to Russia for Turkish citizens, limits on Turkish residents and companies doing business in Russia and restrictions on imports of Turkish products
  • Afghanistan and Pakisthan
  • India and Pakisthan
  • India and Nepal
  • South China Sea
  • Libyan Crisis
  • Sudan Internal ethnic conflict
  • Nigeria: Boko Haram terrorists
  • Iraq
  • Isreal and Palestine
  • EU: Inflow of refugees from West Asia & N.Africa
  • Iran and Saudi Arabia
  • Yemen
  • Russia and Ukraine
  • Greece and EU
  • Myanmar

Mazor Causes of Conflicts :-

Perhaps more than at any time in our history, our world is engaged in conflict. From the UK and USA engaged at war in Afghanistan and Iraq, through to insurgencies in Algeria, Burma and Columbia, civil wars in African nations, and conflict between people in China, Iran and Israel, we see that we are in a fragile landscape.

Over the past century, a number of facets of humanities development have contributed to this, including:

  • Economics: From early colonialism to modern capitalism, our western economic growth has often been at the detriment of other nations where, for example, we have aggressively acquired assets, created trade routes, or leveraged economic scale to source products, assets, and services artificially cheaply. These processes, while creating great wealth and development in Europe and the USA, have exacerbated poverty and economic inequality in many nations, creating a great deal of tension and potential for conflict.
  • Agriculture and Energy: Our world is hugely dependent on agriculture and energy. Both of these asset classes are in huge demand, with their protection and development becoming serious debate. Population and economic growth also puts huge strains on these assets, as our world comes close to consuming greater than is sustainable.
  • Technology: While technology has been a huge enabler for global development, it has also made our injustices and inequalities more visible to external and internal participants in any situation.
  • Climate Change: This is now becoming a real and significant issue with millions worldwide becoming displaced by climatic effects.
  • Religion, Governance, and Politics: These issues, and their allied topics of human rights, justice, and so forth have historically caused many of the world’s most significant conflicts, and continue to do so as often these issues are the most fundamental in the structure of a society.

 

 

BOAT AND STREAM

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Boat and stream problems is a sub-set of time, speed and distance type questions where in relative speed takes the foremost role. We always find several questions related to the above concept in SSC common graduate level exam as well as in bank PO exam. Upon listing the brief theory of the issue below we move to the various kinds of problems asked in the competitive examination.

Important Formulas – Boats and Streams

  • Downstream
    In running/moving water, the direction along the stream is called downstream.
  • Upstream
    In running/moving water, the direction against the stream is called upstream.

 

  • Let the speed of a boat in still water be u km/hr and the speed of the stream be v km/hr, then

    Speed downstream = (u+v) km/hr
    Speed upstream = (u – v) km/hr

 

  • Let the speed downstream be a km/hr and the speed upstream be b km/hr, then

    Speed in still water =1/2*(a+b)km/hr
    Rate of stream = 1/2*(a−b) km/hr

Some more short-cut methods

  • Assume that a man can row at the speed of x km/hr in still water and he rows the same distance up and down in a stream which flows at a rate of y km/hr. Then his average speed throughout the journey

    = (Speed downstream × Speed upstream)/Speed in still water=((x+y)(x−y))/xkm/hr

 

  • Let the speed of a man in still water be x km/hr and the speed of a stream be y km/hr. If he takes t hours more in upstream than to go downstream for the same distance, the distance

    =((x* x –y* y)*t)/2ykm

 

  • A man rows a certain distance downstream in t1 hours and returns the same distance upstream in t2 If the speed of the stream is y km/hr, then the speed of the man in still water

    =y((t2+t1) / (t2−t1)) km/hr

 

  • A man can row a boat in still water at x km/hr. In a stream flowing at y km/hr, if it takes him t hours to row a place and come back, then the distance between the two places

    =t((x* x –y* y))/2xkm

 

  • A man takes n times as long to row upstream as to row downstream the river. If the speed of the man is x km/hr and the speed of the stream is y km/hr, then

    x=y*((n+1)/(n−1))

 

 

Solved Examples

 

Level 1

 

1. A man’s speed with the current is 15 km/hr and the speed of the current is 2.5 km/hr. The man’s speed against the current is:
A. 8.5 km/hr B. 10 km/hr.
C. 12.5 km/hr D. 9 km/hr

 

Answer : Option B

Explanation :

Man’s speed with the current = 15 km/hr

=>speed of the man + speed of the current = 15 km/hr

speed of the current is 2.5 km/hr

Hence, speed of the man = 15 – 2.5 = 12.5 km/hr

man’s speed against the current = speed of the man – speed of the current

= 12.5 – 2.5 = 10 km/hr

2. In one hour, a boat goes 14 km/hr along the stream and 8 km/hr against the stream. The speed of the boat in still water (in km/hr) is:
A. 12 km/hr B. 11 km/hr
C. 10 km/hr D. 8 km/hr

 

Answer : Option B

Explanation :

Let the speed downstream be a km/hr and the speed upstream be b km/hr, then

Speed in still water =1/2(a+b) km/hr and Rate of stream =1/2(a−b) km/hr
Speed in still water = 1/2(14+8) kmph = 11 kmph.

3. A boatman goes 2 km against the current of the stream in 2 hour and goes 1 km along the current in 20 minutes. How long will it take to go 5 km in stationary water?
A. 2 hr 30 min B. 2 hr
C. 4 hr D. 1 hr 15 min

 

Answer : Option A

Explanation :

Speed upstream = 2/2=1 km/hr

Speed downstream = 1/(20/60)=3 km/hr

Speed in still water = 1/2(3+1)=2 km/hr

Time taken to travel 5 km in still water = 5/2= 2 hour 30 minutes

4. Speed of a boat in standing water is 14 kmph and the speed of the stream is 1.2 kmph. A man rows to a place at a distance of 4864 km and comes back to the starting point. The total time taken by him is:
A. 700 hours B. 350 hours
C. 1400 hours D. 1010 hours

 

Answer : Option A

Explanation :

Speed downstream = (14 + 1.2) = 15.2 kmph

Speed upstream = (14 – 1.2) = 12.8 kmph

Total time taken = 4864/15.2+4864/12.8 = 320 + 380 = 700 hours

  

 

5. The speed of a boat in still water in 22 km/hr and the rate of current is 4 km/hr. The distance travelled downstream in 24 minutes is:
A. 9.4 km B. 10.2 km
C. 10.4 km D. 9.2 km

 

   

Answer : Option C

Explanation :

Speed downstream = (22 + 4) = 26 kmph

Time = 24 minutes = 24/60 hour = 2/5 hour

distance travelled = Time × speed = (2/5)×26 = 10.4 km

6. A boat covers a certain distance downstream in 1 hour, while it comes back in 11⁄2 hours. If the speed of the stream be 3 kmph, what is the speed of the boat in still water?
A. 14 kmph B. 15 kmph
C. 13 kmph D. 12 kmph

 

Answer : Option B

Explanation :

Let the speed of the boat in still water = x kmph

Given that speed of the stream = 3 kmph

Speed downstream = (x+3) kmph

Speed upstream = (x-3) kmph

He travels a certain distance downstream in 1 hour and come back in 11⁄2 hour.

ie, distance travelled downstream in 1 hour = distance travelled upstream in 11⁄2 hour

since distance = speed × time, we have

(x+3)×1=(x−3)*3/2

=> 2(x + 3) = 3(x-3)

=> 2x + 6 = 3x – 9

=> x = 6+9 = 15 kmph

7. A boat can travel with a speed of 22 km/hr in still water. If the speed of the stream is 5 km/hr, find the time taken by the boat to go 54 km downstream
A. 5 hours B. 4 hours
C. 3 hours D. 2 hours

 

Answer : Option D

Explanation :

Speed of the boat in still water = 22 km/hr

speed of the stream = 5 km/hr

Speed downstream = (22+5) = 27 km/hr

Distance travelled downstream = 54 km

Time taken = distance/speed=54/27 = 2 hours

 

8. A boat running downstream covers a distance of 22 km in 4 hours while for covering the same distance upstream, it takes 5 hours. What is the speed of the boat in still water?
A. 5 kmph B. 4.95 kmph
C. 4.75 kmph D. 4.65

 

Answer : Option B

Explanation :

Speed downstream = 22/4 = 5.5 kmph

Speed upstream = 22/5 = 4.4 kmph

Speed of the boat in still water = (½) x (5.5+4.42) = 4.95 kmph

9. A man takes twice as long to row a distance against the stream as to row the same distance in favor of the stream. The ratio of the speed of the boat (in still water) and the stream is:
A. 3 : 1 B. 1 : 3
C. 1 : 2 D. 2 : 1

 

Answer : Option A

Explanation :

Let speed upstream = x

Then, speed downstream = 2x

Speed in still water = (2x+x)2=3x/2

Speed of the stream = (2x−x)2=x/2

Speed of boat in still water: Speed of the stream = 3x/2:x/2 = 3 : 1

 

Level  2

1. A motorboat, whose speed in 15 km/hr in still water goes 30 km downstream and comes back in a total of 4 hours 30 minutes. The speed of the stream (in km/hr) is:
A. 10 B. 6
C. 5 D. 4

 

   

Answer : Option C

Explanation :

Speed of the motor boat = 15 km/hr

Let speed of the stream = v

Speed downstream = (15+v) km/hr

Speed upstream = (15-v) km/hr

Time taken downstream = 30/(15+v)

Time taken upstream = 30/(15−v)

total time = 30/(15+v)+30/(15−v)

It is given that total time is 4 hours 30 minutes = 4.5 hour = 9/2 hour

i.e., 30/(15+v)+30/(15−v)=9/2

⇒1(15+v)+1(15−v)=(9/2)×30=3/20

⇒(15−v+15+v)/(15+v)(15−v)=3/20

⇒30/(15*15−v*v)=3/20

⇒30/(225−v*v)=3/20

⇒10/(225−v* v)=1/20

⇒225−v* v =200

⇒v* v =225−200=25

⇒v=5 km/hr

2. A man rows to a place 48 km distant and come back in 14 hours. He finds that he can row 4 km with the stream in the same time as 3 km against the stream. The rate of the stream is:
A. 1 km/hr. B. 2 km/hr.
C. 1.5 km/hr. D. 2.5 km/hr.

 

Answer : Option A

Explanation :

Assume that he moves 4 km downstream in x hours

Then, speed downstream = distance/time=4/x km/hr

Given that he can row 4 km with the stream in the same time as 3 km against the stream

i.e., speed upstream = 3/4of speed downstream=> speed upstream = 3/x km/hr

He rows to a place 48 km distant and come back in 14 hours

=>48/(4/x)+48/(3/x)=14

==>12x+16x=14

=>6x+8x=7

=>14x=7

=>x=1/2

Hence, speed downstream = 4/x=4/(1/2) = 8 km/hr

speed upstream = 3/x=3/(1/2) = 6 km/hr

Now we can use the below formula to find the rate of the stream

Let the speed downstream be a km/hr and the speed upstream be b km/hr, then

Speed in still water =1/2*(a+b) km/hr

Rate of stream =12*(a−b) km/hr
Hence, rate of the stream = ½*(8−6)=1 km/hr

 

3. A boat running upstream takes 8 hours 48 minutes to cover a certain distance, while it takes 4 hours to cover the same distance running downstream. What is the ratio between the speed of the boat and speed of the water current respectively?
A. 5 : 6 B. 6 : 5
C. 8 : 3 D. 3 : 8

 

Answer : Option C

Explanation :

Let the rate upstream of the boat = x kmph

and the rate downstream of the boat = y kmph

Distance travelled upstream in 8 hrs 48 min = Distance travelled downstream in 4 hrs.

Since distance = speed × time, we have

x×(8*4/5)=y×4

x×(44/5)=y×4

x×(11/5)=y— (equation 1)

Now consider the formula given below

Let the speed downstream be a km/hr and the speed upstream be b km/hr, then

Speed in still water =1/2(a+b) km/hr

Rate of stream =1/2(a−b) km/hr
Hence, speed of the boat = (y+x)/2

speed of the water = (y−x)/2

Required Ratio = (y+x)/2:(y−x)/2=(y+x):(y−x)=(11x/5+x):(11x/5−x)

(Substituted the value of y from equation 1)

=(11x+5x):(11x−5x)=16x:6x=8:3

 

4. A man can row at 5 kmph in still water. If the velocity of current is 1 kmph and it takes him 1 hour to row to a place and come back, how far is the place?
A. 3.2 km B. 3 km
C. 2.4 km D. 3.6 km

 

Answer : Option C

Explanation :

Speed in still water = 5 kmph
Speed of the current = 1 kmph

Speed downstream = (5+1) = 6 kmph
Speed upstream = (5-1) = 4 kmph

Let the requited distance be x km

Total time taken = 1 hour

=>x/6+x/4=1

=> 2x + 3x = 12

=> 5x = 12

=> x = 2.4 km

5. A man can row three-quarters of a kilometer against the stream in 111⁄4 minutes and down the stream in 71⁄2minutes. The speed (in km/hr) of the man in still water is:
A. 4 kmph B. 5 kmph
C. 6 kmph D. 8 kmph

 

Answer : Option B

Explanation :

Distance = 3/4 km

Time taken to travel upstream = 111⁄4 minutes

= 45/4 minutes = 45/(4×60) hours = 3/16 hours

Speed upstream = Distance/Time= (3/4)/ (3/16) = 4 km/hr

Time taken to travel downstream = 71⁄2minutes = 15/2 minutes = 15/2×60 hours = 1/8 hours

Speed downstream = Distance/Time= (3/4)/ (1/8) = 6 km/hr

Rate in still water = (6+4)/2=10/2=5 kmph

6. A boat takes 90 minutes less to travel 36 miles downstream than to travel the same distance upstream. If the speed of the boat in still water is 10 mph, the speed of the stream is:
A. 4 mph B. 2.5 mph
C. 3 mph D. 2 mph

 

   

Answer : Option D

Explanation :

Speed of the boat in still water = 10 mph

Let speed of the stream be x mph

Then, speed downstream = (10+x) mph

speed upstream = (10-x) mph

Time taken to travel 36 miles upstream – Time taken to travel 36 miles downstream= 90/60 hours

=>36/(10−x)−36/(10+x)=3/2=>12/(10−x)−12/(10+x)=1/2=>24(10+x)−24(10−x)=(10+x)(10−x)

=>240+24x−240+24x=(100−x* x)=>48x=100− (x* x)=> x* x +48x−100=0

=>(x+50)(x−2)=0=>x = -50 or 2; Since x cannot be negative, x = 2 mph

7. At his usual rowing rate, Rahul can travel 12 miles downstream in a certain river in 6 hours less than it takes him to travel the same distance upstream. But if he could double his usual rowing rate for his 24-mile round trip, the downstream 12 miles would then take only one hour less than the upstream 12 miles. What is the speed of the current in miles per hour?
A. 2*1/3 mph B. 1*1/3 mph
C. 1*2/3 mph D. 2*2/3 mph

 

Answer : Option D

Explanation :

Let the speed of Rahul in still water be x mph
and the speed of the current be y mph

Then, Speed upstream = (x – y) mph
Speed downstream = (x + y) mph

Distance = 12 miles

Time taken to travel upstream – Time taken to travel downstream = 6 hours

⇒12/(x−y)−12/(x+y)=6

⇒12(x+y)−12(x−y)=6(x*x−y*y)

⇒24y=6(x*x−y*y)

⇒4y= x*x−y*y

⇒x * x =(y* y +4y)⋯(Equation 1)

Now he doubles his speed. i.e., his new speed = 2x

Now, Speed upstream = (2x – y) mph

Speed downstream = (2x + y) mph

In this case, Time taken to travel upstream – Time taken to travel downstream = 1 hour

⇒12/(2x−y)−12/(2x+y)=1

⇒12(2x+y)−12(2x−y)=4*x* x –y* y

⇒24y=4*x* x –y* y

⇒4*x* x = y* y +24y⋯(Equation 2)

(Equation 1 × 4)⇒4x* x =4(y* y +4y)⋯(Equation 3)

(From Equation 2 and 3, we have)

y* y +24y=4(y* y +4y)⇒y* y +24y=4y* y +16y⇒3y* y =8y⇒3y=8

y=8/3 mphi.e., speed of the current = 8/3 mph=2*2/3 mph