Study Material online course for teachers by - Agra region: ONLINE COURSE ON DESGINING E-RESOURCES - AGRA REGION

Study Material Class XII Chemistry: ONLINE COURSE ON DESGINING E-RESOURCES - AGRA REGION:   ONLINE COURSE ON DESGINING E-RESOURCES - AGRA REGION S.No. Title of the video URL of You tube...

ONLINE COURSE ON DESGINING E-RESOURCES - AGRA REGION

 

ONLINE COURSE ON DESGINING E-RESOURCES - AGRA REGION
S.No.	Title of the video	URL of You tube video
1	Managing Files and Folders	https://youtu.be/0h86T5ouIvw
2	Preparing reading material (Text/Image) and converting the file to pdf	https://youtu.be/5fFFRuJqqx8
3	Preparing presentation slides	https://youtu.be/hEZQIdPrnF8
4	Uploading folders and files in Google Drive	https://youtu.be/Y7zo_zA9vmo
5	Recording Narrations in a Power Point Presentation	https://youtu.be/v-HRnVWUSlo
6	Converting Power Point Presentation into a Video	https://youtu.be/PBvSLigLfIk
7	Making videos through screen capture	https://youtu.be/8DnPd-gK8ww
8	Trim, Split, Slice Videos	https://youtu.be/ly2Y1Ftckb0
9	Creating a YouTube channel and upload the video resources	https://youtu.be/WcyGvUoRJFc
10	Creating, posting and publishing contents in a Blog	https://youtu.be/azcLPov2MXo
11	Video on Designing Online Quiz using Google Forms	https://youtu.be/BdPEqo1dkCc
12	Designing Online Quiz at www.quizizz.com	https://youtu.be/PDF0dFk9I-E
13	Introduction to Hot Potatoes Software	https://youtu.be/llXAivOZNJg
14	Preparing Interactive Quiz Exercise using Hot Potatoes Software	https://youtu.be/rPNtvIt9nL8
15	Creating Interactive Gap Filling Exercise using Hot Potatoes Software	https://youtu.be/J4KIkGHib2I
16	Creating Interactive Match Exercise using Hot Potatoes Software	https://youtu.be/B9scfxd9cm4
17	Creating Interactive Jumble Exercise using Hot Potatoes Exercise	https://youtu.be/G78v7RSqlrA
18	Creating Interactive Cross Exercise using Hot Potatoes Exercise	https://youtu.be/V-VOcnEVC_g
19	Linking Units using the Masher	https://youtu.be/wug7EKZIcW4
20	Managing interactive worksheets created using Hot Potatoes software	https://youtu.be/OVrnhhvQr4w
21	Introduction to H5P	https://youtu.be/KHnMJUjOMJA
22	Creating Fill in the blanks exercise at H5p.org	https://youtu.be/U4q6x_uoAdo
23	Creating Flash Card Exercise at H5P.org	https://youtu.be/bfvzbHPYSsY
24	Creating Interactive Course Presentation content at H5P.org	https://youtu.be/2aV_WZqlJxg

ix eco- L 3 POVERTY AS CHALLENGE NCERT Solution

Question 1;

Describe how the poverty line is estimated in India.

ANSWER:

A person is considered poor if his or her income or consumption level falls below a given minimum level necessary to fulfil basic needs. Each country uses an imaginary line that is considered appropriate for its existing level of development and its accepted minimum social norms. This is called the poverty line.

While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirements, etc., are determined for subsistence. These physical quantities are multiplied by their prices in rupees, and thereby the poverty line is arrived at. The numbers involved in the calculation of the poverty line vary. Since the economics of living in the rural parts of the country is different from that of living in the urban parts, the poverty line deducted for individuals living in the rural areas is different from that deducted for individuals living in the urban areas.

Question 2:

Do you think that present methodology of poverty estimation is appropriate?

ANSWER:

The present methodology of poverty estimation takes into account a minimum subsistence level of living rather than a reasonable level of living. A person is considered poor if his or her income or consumption level falls below a given minimum level necessary to fulfil basic needs. While ensuring the minimum necessary in terms of income is indeed essential for India to bring a large section of its population out of the clutches of poverty, the government must also focus its attention upon the broader element of human poverty. A future state may be achieved wherein everybody is able to feed himself or herself. However, in the continuing presence of factors like illiteracy, lack of job opportunities, lack of access to proper healthcare and sanitation, caste and gender discrimination, etc., such a state cannot be called a poverty-free state.

Question 3:

Describe poverty trends in India since 1973.

ANSWER:

A decline: There has been a substantial decline in the poverty ratios in India from about 55 per cent in 1973 to 36 per cent in 1993. The proportion of people below poverty line further came down to about 26 percent in 2000. Although the percentage of people living in poverty declined from 1973 to 1993, the number of poor remained stable around 320 million for a fairly long period. However, as per the latest estimates, the number of poor has shown a significant decline to about 260 million.

Rural and urban poor: The poverty trends also indicate that the problem of poverty is a much bigger menace in the rural areas than it is in the urban areas. As the greater part of the Indian population resides in the villages, the greater number of the poor also resides in the villages.

Vulnerable groups: Looked at from the point of view of the various social and economic groups in the country, the scheduled tribes, the scheduled castes, the rural agricultural labourers and the urban casual labourers turn out to be the groups most vulnerable to poverty. Though the average for people below poverty line for all groups in India is 26, the averages of these groups are higher than the average Indian poverty ratio.

Poor states: The poverty trends also show that though there has been a decline in poverty in every state from the early seventies, the success rate of reducing poverty has varied from state to state. In 20 states and union territories, the poverty ratio is less than the national average of 26. In others, the poverty ratios are higher than the national average. Among these, Orrisa and Bihar continue to be the two poorest states with poverty ratios of 47 and 43 per cent respectively. On the other hand, states like Kerala, Gujarat, Punjab and Jammu and Kashmir have shown a significant decline in poverty.

Question 4:

Discuss the major reasons for poverty in India.

ANSWER:

Major reasons for poverty in India

(i) Colonial rule: India went through a long phase of low economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles.

(ii) Low economic growth and high population growth: The Indian administration’s failure on the two fronts − promotion of economic growth and population control perpetuated the cycle of poverty.

(iii) Rural poverty: The effects of agricultural and rural development were limited to only certain parts of the country. As a result, while some parts of the country showed great progress in the rural sector, others continued in the shadow of poverty.

The presence of huge income inequalities is a major reason for the high poverty rates in the rural areas.

The government’s failure to properly implement major policy initiatives to tackle the issue of income inequalities has contributed to the continuance of poverty in villages.

(iv) Urban poverty: The jobs created by the industrial sector have not been enough to absorb all the job seekers. Unable to find proper jobs in cities, many people start working as rickshaw pullers, vendors, construction workers, domestic servants, etc. With irregular small incomes, these people cannot afford expensive housing. In consequence, they start living in slums. Thus, poverty (a largely rural phenomenon sometime back) has become a dominant feature of urban India as well.

(v) Socio-cultural factors: Various socio-cultural factors like caste and gender discrimination and social exclusion have contributed to the wider realm of human poverty.

Question 5:

Identify the social and economic groups which are most vulnerable to poverty in India.

ANSWER:

The proportion of people below poverty line is not the same for all social groups and economic categories in India. The social groups of scheduled castes and scheduled tribes, and the economic groups of rural agricultural labourers and urban casual labourers are the ones most vulnerable to poverty. The poverty ratios for each of these groups are higher than the average Indian poverty ratio. Apart from these groups, women, elderly people and female infants are considered to be the poorest of the poor.

Question 6:

Give an account of interstate disparities in poverty in India.

ANSWER:

The proportion of poor is not the same in every state. Though there has been a decline in poverty in every state from the early seventies, the success rate of reducing poverty has varied from state to state. In 20 states and union territories, the poverty ratio is less than the national average of 26. In others, the poverty ratios are higher than the national average. Among these, Orrisa and Bihar continue to be the two poorest states with poverty ratios of 47 and 43 per cent respectively. Both rural and urban poverty are quite high in these states. On the other hand, states like Tamil Nadu, Andhra Pradesh, Gujarat, Kerala, Punjab and Jammu and Kashmir and West Bengal have shown a significant decline in poverty. Public distribution of food grains, focus on human resource development, high agricultural development and land reform measures are some of the factors responsible for the decline in poverty in these states.

Question 7:

Describe global poverty trends.

ANSWER:

The proportion of people in developing countries living on less than $1 per day has fallen from 28 per cent in 1990 to 21 per cent in 2001. There has been a substantial reduction in global poverty since the nineteen eighties. However, the reduction in poverty is marked with great regional differences. Due to rapid economic growth and massive investment in human resource development, poverty declined substantially in China and Southeast Asian countries.

On the other hand, in South Asian countries (India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan), the decline has not been as rapid. While the ratio of poverty in Latin America has remained the same, in sub-Saharan Africa, poverty has risen from 41 per cent in 1981 to 46 per cent in 2001. According to the world development report of 2001, countries like Nigeria, Bangladesh and India still have a large percentage of people living under poverty.

Poverty has also resurfaced in some of the former socialist countries like Russia, where officially it was non-existent earlier.

Question 8:

Describe current government strategy of poverty alleviation.

ANSWER:

The current anti-poverty strategy of the government has a two-lined approach − promotion of economic growth and targeted anti-poverty programmes.

Economic growth widens opportunities and provides resources needed to invest in human development. Also, so that the poor can take advantage of this economic growth, the government has formulated several anti-poverty schemes to affect poverty directly or indirectly. Prime Minister Rozgar Yojana, Rural Employment Generation Programme, Swarnajayanti Gram Swarozgar Yojana, Pradhan Mantri Gramodaya Yojana, Antyodaya Anna Yojana, National Food for Work Programme, National Rural Employment Guarantee Act, and proposals for establishing National and State Employment Guarantee Funds are some of the anti-poverty schemes of the government.

However, despite the good intentions of these schemes, the benefits have not fully reached the deserving poor. Hence, the major emphasis in recent years has been on proper monitoring of all the poverty alleviation programmes.

Question 9:

Answer the following questions briefly

(i) What do you understand by human poverty?

(ii) Who are the poorest of the poor?

(iii) What are the main features of the National Rural Employment Guarantee Act 2005?

ANSWER:

(i)Human poverty is a concept that goes beyond the limited view of poverty as lack of income. It refers to the denial of political, social and economic opportunities to an individual to maintain a “reasonable” standard of living. Illiteracy, lack of job opportunities, lack of access to proper healthcare and sanitation, caste and gender discrimination, etc., are all components of human poverty

(ii) Women, female infants and elderly people are the poorest of the poor. Within a poor family, such individuals suffer more than the others. They are systematically denied equal access to the resources available to the family.

(iii) Main features of the National Rural Employment Guarantee Act 2005:

(a) The Act assures 100 days employment every year to every household.

(b) Initially covering 200 districts, the Act would be extended later on to cover 600 districts.

(c) One-third of the jobs are reserved for women.

NCERT SOLUTIONS;

Question 1: Describe how the poverty line is estimated in India?

Answer: As per 2000 figures; a family of five which is earning less than Rs. 1,640 per month is considered to be living below the poverty line. This figure is Rs. 2,270 per month for the urban area.

The expected calorie intake has been fixed at 2400 calories per person in rural areas and 2100 calories in urban areas. A person consuming less than this amount is considered to be living below the poverty line.

Question 2: Do you think that present methodology of poverty estimation is appropriate?

Answer: Any method of poverty estimation cannot be appropriate. However, the current methods give some starting point to discuss the issue and to tackle the problem. The goal of poverty alleviation is a moving target because definition of poverty changes with time. Once the basic needs of all the people are fulfilled then some higher needs would need to be taken into account to address the issue of poverty.

Question 3: Describe poverty trends in India since 1973?

Answer: The percentage of poor people has declined from 54.9% in 1973 to 26.1% in 2001. This shows a significant decline. However, the absolute number of poor has remained more or less static at 320 million. Recently it has declined to 260 million.

Question 4: Discuss the major reasons for poverty in India?

Answer: The British policies during the colonial rule were not in favour of the local economy. Traditional handicrafts declined and not much of the modern industries could develop during that period. This is considered to be a major reason for abject poverty in India at the time of independence.

The low growth rate persisted till 1980s. This was coupled with a high growth rate in population and resulted in a higher number of poor.

Green Revolution helped in reviving the agricultural sector but its effect was limited to certain parts of the country; mainly in Punjab, Haryana and Western Uttar Pradesh.

The secondary sector did not generate enough employment opportunities. This forced many rural migrants to go for unskilled works.

Inequality of income is another major reason of poverty in India. In spite of land reform initiatives, a major portion of land is in the hands of a selected few and a large portion of farmers are landless.

There are many socio-cultural factors which also contribute to poverty. An average Indian has to spend huge amount on marriage and other rituals because of socio-cultural pressure. This creates a heavy drain on savings.

Question 5: Identify the social and economic groups which are most vulnerable to poverty in India.

Answer: Scheduled tribes, scheduled castes, rural agricultural workers and urban casual labourers are the most vulnerable socioeconomic group in India.

Question 6: Give an account of interstate disparities of poverty in India.

Answer: Poverty level shows wide variations in different states of India. Kerala has the least poverty ratio at about 15%, while tops the chart with 81% of the population living below poverty line.

Question 7: Describe global poverty trends.

Answer: The percentage of people living below poverty line has fallen from 28% in 1991 to 21% in 2001; in the developing countries. Poverty declined substantially in China and some South Asian countries because of rapid economic development. On the other hand, reduction was not as sharp in countries; like Pakistan, Bangladesh, Sri Lanka, etc.

In Sub Saharan Africa, poverty increased from 41% in 1981 to 48% in 2001. The poverty level has remained the same in Latin America. Poverty has resurfaced in Russia and some of the former communist countries.

Question 8: Describe current government strategy of poverty alleviation?

Answer: The current anti-poverty measures are targetted at two planks, viz. promotion of economic growth and anti-poverty programmes. Economic growth helps in overall improvement of income through employment generation and hence is highly important to reduce poverty. Anti-poverty programmes are aimed to help those who suffer because of socioeconomic inequality. Such programmes are an attempt to support poor people so that they can improve their condition.

Question 9: What do you understand by human poverty?

Answer: A general scarcity of basic necessities of life is called poverty. The basic necessities include food, shelter, clothing, healthcare, sanitation, etc. Some of the issues which are related to poverty are; Landlessness, Unemployment, Size of families, Illiteracy, Poor health/malnutrition, Child labour and Helplessness.

Question 10: Who are the poorest of the poor?

Answer: People who are unable to fulfill even the most basic needs; like food, shelter and clothing are called the poorest of the poor.

Question 11: What are the main features of the National Rural Employment Guarantee Act 2005?

Answer: MNREGA (Mahatma Gandhi Rural Employment Guarantee Scheme): This programme was originally started in 2005 as NREGA. Under this programme, one member of each rural household shall be given 100 days employment in a year. The person should be willing to work for unskilled job. If the government fails to provide employment to a person within fifteen days, he would be getting unemployment allowance in lieu of that. National Food for Work Programme (NFWP) has also been merged with MNREGA.

class x sectors of economy Q &A

class x sectors of economy

Q1. Why does only final goods and services are included while calculating National Income?

Ans. Only final goods and services are included while calculating National Income because:

(a) Final goods are those goods which have crossed the boundary line of production and are ready for final consumption and investment.

(b) The value of final goods already includes the value of all the intermediate goods that are used in making the final goods. This would lead to the problem of double counting if all the goods of the economy will be included while calculating national income.

(c) This should be avoided because if the value of any commodity is counted more than once it will result in overestimation of national income.

Q2. What is the meaning of under employment? In which economic sector is under employment conditions more prevalent? Why?

Ans. A condition in which each individual appears working but no one is fully employed. This is the situation of under employment. People under such type of employment cannot utilize their potential and capacity in full. It is in primary sector because-

(i) This sector comprises the poorest section of society in majority

(ii) People engaged in this sector are illiterate or semi-literate.

Q3. What is meant by secondary sector? Explain it by giving examples.

Ans. 1. Secondary sector covers the activities in which natural products are changed into other forms through the ways of manufacturing that we associate with industrial activity.

2. The product is produced by a process of manufacturing in a factory, a workshop or at home.

3. For example, using cotton fiber from the plant, we spin yarn and weave cloth. This sector also called an industrial sector.

Q4. What do you understand by the term under employment?

Ans. 1. More than half of the workers in country are working in agriculture, producing only a quarter of the GDP.

2. In other words, workers in agricultural sector are underemployed. Each one is doing some work but no one is fully employed.

3. This kind of underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed. It is called disguised unemployment also.

Q5. What is the criterion to classify an economic activity as secondary sector activity? Explain.

Ans. 1. The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity.

2. The product is not produced by nature but has to be made by some process of manufacturing.

3. This could be in a factory, a workshop or at home. For example, using sugar canes as raw material we make sugar.

Q6.Do you think the classification of economic activities into primary, secondary and tertiary is useful? Explain how.

ANSWER:

The classification of economic activities into primary, secondary and tertiary is useful on account of the information it provides on how and where the people of a country are employed. Also, this helps in ascertaining as to which sector of economic activity contributes more or less to the country’s GDP and per capita income. If the tertiary sector is developing much faster than the primary sector, then it implies that agriculture is depleting, and the government must take measures to rectify this. The knowledge that the agricultural profession is becoming unpopular or regressive can only come if we know which sector it belongs to. Hence, it is necessary to classify economic activities into these three basic sectors for smooth economic administration and development.

Q7. For each of the sectors that we came across in this chapter why should one focus on employment and GDP? Could there be other issues which should be examined? Discuss.

ANSWER:

For each of the sectors that we came across in this chapter, one should focus on employment and GDP because these determine the size of a country’s economy. A focus on employment and GDP helps determine two important things—per capita income and productivity. Hence, in each of the three sectors, employment rate and status as well as its contribution to the GDP help us understand how that particular sector is functioning and what needs to be done to initiate further growth in it.

Q8.How is the tertiary sector different from other sectors? Illustrate with a few examples.

ANSWER:

The tertiary sector is different from the other sectors because it does not manufacture or produce anything. For this reason, it is also known as the service sector. It aids the primary and secondary sectors in development. The tertiary sector involves services like transport, storage of goods, communications, banking and administrative work.

Q9. What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.

ANSWER:

Disguised unemployment is a form of underemployment where one has a job but the work is divided. It is not apparent as compared to someone without a job who is clearly unemployed. In rural areas, this can be seen in the farming community where all members of a family might be working on a farm even though so many hands are not required. They do so because of lack of another job. In urban areas, disguised unemployment can be seen in the service sector where painters, plumbers, repair persons and those doing odd jobs have work but they may not find daily or regular employment.

Q10. Distinguish between open unemployment and disguised unemployment.

ANSWER:

Open unemployment is when a person has no job in hand and does not earn anything at all. Disguised unemployment, on the other hand, is mostly found in the unorganised sector where either work is not consistently available or too many people are employed for some work that does not require so many hands. This is the essential difference between open unemployment and disguised unemployment.

Q11. “Tertiary sector is not playing any significant role in the development of Indian economy.” Do you agree? Give reasons in support of your answer.

ANSWER:

“Tertiary sector is not playing any significant role in the development of the Indian economy”. This statement is not true. The tertiary sector has contributed vastly to the Indian economy, especially in the last two decades. In the last decade, the field of information technology has grown, and consequently, the GDP share of the tertiary sector has grown from around 40% in 1973 to more than 50% in 2003.

Q12. Service sector in India employs two different kinds of people. Who are these?

ANSWER:

Service sector in India employs two different kinds of people. These are primary and ancillary workers. Primary workers include those who directly provide services while ancillary workers are composed of those who give services to the service providers. For example, consultants make available their services to consultancy firms etc.

Q13. Workers are exploited in the unorganised sector. Do you agree with this view? Give reasons in support of your answer.

ANSWER: Workers are exploited in the unorganised sector. I agree with this view. The unorganised sector does not offer any job security. Neither does it allow for scope of trade or workers’ unions. Workers can be easily exploited in this scenario. They cannot afford to rebel against an employer’s tyranny as the latter can fire them at any time.

Q14. How are the activities in the economy classified on the basis of employment conditions?

ANSWER:

On the basis of employment conditions, activities in the economy are classified as organised and unorganised. The organised sector offers job security and employment benefits, while the unorganised sector is marked by low wages and lack of job security. In rural areas, the unorganised sector comprises landless agricultural labourers, sharecroppers and artisans. In urban areas, this group contains small-scale industry workers, construction workers, street vendors, rag-pickers, etc.

Q15. Compare the employment conditions prevailing in the organised and unorganised sectors.

ANSWER:

The employment conditions prevailing in the organised and unorganised sectors are vastly different. The organised sector has companies registered with the government and hence, it offers job security, paid holidays, pensions, health and other benefits, fixed working hours and extra pay for overtime work. On the other hand, the unorganised sector is a host of opposites. There is no job security, no paid holidays or pensions on retirement, no benefits of provident fund or health insurance, unfixed working hours and no guarantee of safe work environment.

Q16. Explain the objective of implementing the NREGA 2005.

ANSWER:

The objective of implementing the NREGA 2005 was to provide 100 days of guaranteed employment to those people in rural India who can work, and are in need of work. This Right to Work has been implemented in 200 districts. If the government is unable to provide this employment, then it has to give unemployment allowances to the people.

10 Eco- Money and Credit

NCERT Solutions Class 10 Social Science ,Economics -Money and Credit

Question 1. In situations with high risks, credit might create further problems for the borrower. Explain.

Answer: This statement is true “In situations with high risks, credit might create further problems for the borrower”. This is also known as a debt-trap. Taking credit involves an interest rate on the loan and if this is not paid back, then the borrower is forced to give up his collateral or asset used as the guarantee, to the lender. If a farmer takes a loan for crop production and the crop fails, loan payment becomes impossible. To repay the loan the farmer may sell a part of his land making the situation worse than before. The farmer had taken a loan to improve his situation but his situation worsens due to nonpayment of loans. Since farming is associated with high uncertainty, debt trap is common. Thus, in situations with high risks, if the risks affect a borrower badly, then he ends up losing more than he would have without the loan.

Question 2. How does money solve the problem of double coincidence of wants? Explain with an example of your own.

Answer: In a barter system where goods are directly exchanged without the use of money, the double coincidence of wants is an essential feature. By serving as a medium of exchanges, money removes the need for double coincidence of wants and the difficulties associated with the barter system. For example, it is no longer necessary for the farmer to look for a book publisher who will buy his cereals at the same time sell his books. All he has to do is find a buyer for his cereals. If he has exchanged his cereals for money, he can purchase any goods or service which he needs. This is because money acts as a medium of exchange. Medium of exchange is one of the three fundamental functions of money in mainstream economics. It is a widely accepted token which can be exchanged for goods and services.

Question 3. How do banks mediate between those who have surplus money and those who need money?

Answer: Banks accept deposits from people who have surplus money, paying interest on these deposits. The banks use the major portion of the deposits to extend loans to those who need money, charging them slightly higher interest than what they pay to the depositors. It is with the banks help both the people benefit,person having surplus money and the person in need of money. In this way, banks mediate between those who have surplus money and those who need money.

Question 4. Look at a 10 rupee note. What is written on top? Can you explain this statement?

Answer: The following words are written on the top of a 10 rupee note:

Reserve Bank Of India

Guaranteed by the Central Government of India

I promise to pay the bearer the sum of Ten Rupee

A 10 rupee note is acceptable as a medium of exchange because it is authorized by the government of India. In India, Reserve Bank of India issues currency notes on behalf of the central government. The statement means that the currency is authorized or guaranteed by the Central Government. That is, Indian law legalizes the use of rupee as a medium of payment that can not be refused in setting transaction in India. As a promise written on a promissory note, the RBI promises the bearer to pay the given sum of money.

Question 5. Why do we need to expand formal sources of credit in India?

Answer: We need to expand formal sources of credit in India due to:

To reduce dependence on informal sources of credit because the latter charge high interest rates and do not benefit the borrower much.

Cheap and affordable credit is essential for country’s development. The formal sector still meets only about half of the total credits needs of the rural people.

Banks and co-operatives should increase their lending, particularly, in rural areas. Rural borrowers depend on informal sources like moneylenders who charge them a high rate of interests, which can sometimes land them into a debt-trap.

This would lead to higher incomes and many people will be able to borrow cheaply for a variety of needs. They will be able to grow crops, do business, set up small scale industries etc.

Question 6. What is the basic idea behind the SHGs for the poor? Explain in your own words.

Answer: The basic idea behind the formation of SHGs is to create self-employment for the poor, particularly rural poor woman. Self-help groups are seen as instruments for goals including empowering women, developing leadership abilities among the poor and the needy people, increasing school enrollments and improving nutrition and the use of birth control. In countries like India, SHGs bridge the gap between high-caste & low-caste members. They also provide timely loans at a responsible interest rate without collateral.

Thus, the main objectives of the SHGs are:

To organize rural poor especially women into small Self Help Groups. A typical SHGs has 15-20 members.

To collect savings of their members.

To provide loans without collateral.

To provide timely loans for a variety of purposes.

To provide loans at responsible rate of interest and easy terms.

Provide a platform to discuss and act on a variety of social issues such as education, health, nutrition, domestic violence etc

Question 7. What are the reasons why the banks might not be willing to lend to certain borrowers?

Answer: The banks might not be willing to lend certain borrowers due to the following reasons:

Banks require proper documents and collateral as security against loans. Some persons fail to meet these requirements, particularly small farmer requiring crop loan. Repayment of the loan is dependent on crop production which is highly susceptible and depends on monsoons etc.

The borrowers who have not repaid previous loans, the banks might not be willing to lend them further.

The banks might not be willing to lend those entrepreneurs who are going to invest in the business with high risks.

One of the principle objectives of a bank is to earn more profits after meeting a number of expenses. For this purpose it has to adopt judicious loan and investment policies which ensure fair and stable return on the funds.

Question 8. In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?

Answer: Reserve Bank of India is the central bank of the country and works as the supervising authority over other banks across the country. The Reserve Bank of India supervises the functions of banks in a number of ways:

RBI checks that the bank actually maintains a minimum cash balance out of the deposit they receive. Currently this is 15%.

RBI observes that the banks give loans not just to profit making businesses and traders but also to small cultivators, small scale industries, small borrowers etc.

The commercial banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate etc.

This is necessary to ensure equality in the economy of the country and protect especially small depositors, farmers, small scale industries, small borrowers etc. Further, RBI monitoring ensures that banks do not loan more than they are supposed to, as such an action can create a crisis situation. Great Depression of 1930 is an example of such a crises situation

Question 9. Analyse the role of credit for development.

Answer: Cheap and affordable credit plays a crucial role in the country’s development. There is a huge demand for loans for various economic activities. The credit helps people to meet the ongoing expenses of production and thereby develop their business. Many people could then borrow for a variety of different needs. Credit helps in expansion of one’s business, farmers can grow a variety of crops, procure equipment for farming, send their children for higher education etc. Students get a loan without collateral for higher education which again leads to the development of the nation. In this way, credit plays a vital role in the development of a country.