Business and Magazine Journalism

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Reserve Bank of India

The Reserve Bank of India (RBI) is India’s central banking institution, which controls the monetary policy of the country and the Indian rupee. It commenced its operations on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934. It is the largest financial institution in the country and is solely responsible for monitoring and controlling the flow of currency in the country. As the central bank of the country, it takes up the mantle of overseeing the financial health of India and ensuring that not only do we possess enough resources to function as an economy within ourselves but also that we possess the ability to trade and exchange, a convenient system of banking, a well-balanced budget and more. Some of the most important functions of the RBI are as follows:

a)         Monetary Authority: To control the monetary policy, here are a few actions/steps/procedures/techniques used by central banks:-

a.          Quantitative Measures: These include:-

                                                    i.         Bank Rate (Rate at which commercial banks get loans from central banks)

                                                  ii.         Open Market Operations (Selling or buying bonds and government securities in the market)

                                                iii.         Reserve Ratios (These include (i) Cash Reserve Ratio (ii) Statutory Liquidity Ratio (iii) Repo Rate (iv) Reverse Repo Rate)

b.         Qualitative Measures: These include:-

                                                    i.         Regulating margin requirements (How much of a margin should be charged on providing collaterals for loan)

                                                  ii.         Regulating credit (Changing min down payment or max period of payment to affect credits and loans)

                                                iii.         Issuing directives (Directives to commercial banks to follow credit policies)

                                                iv.         Credit rationing (Putting a ceiling on credit or advances)

                                                  v.         Moral suasion (Trying to talk or persuade commercial banks into following credit policies)

                                                vi.         Direct action (Taking action against banks that don’t follow the policies)

b)         Regulator and Supervisor of the Financial System

c)         Manager of Foreign Exchange

d)         Issuer of Currency (Helps maintain monopoly and create uniformity, stability and confidence in the currency issued, since it comes from a single source)

e)         Developmental Role

f)          Controller of Credit

g)         Banker to the Government (Acts as a banker, advisor and agent)

h)         Banker to Banks (Custodian of cash reserves, clearing house facility, lender of last resort, advisor)

i)          Data Collection

Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992. The SEBI is the designated regulatory body for the finance and investment markets in India. The board plays a vital role in maintaining stable and efficient financial and investment markets by creating and enforcing effective regulation in India’s financial marketplace. Some of SEBI’s most important functions are:-

a)         Protect the interests of those involved in the stock exchanges by regulating them: There are essentially three main parties in the stock markets – the issuers of securities, the investors and the market intermediaries.

b)         Enforce its quasi-legislative, quasi-executive and quasi-judicial powers: It drafts and creates different regulations under its legislative capacity, it executes them and investigates and takes action in situations of needs in its executive capacity, and it passes rulings and judgments on these actions in its judicial capacity. Like any other body, there is a proper appeal system in the SEBI, the first going to a three member tribunal, the second directly to the SC.

c)         Other functions: The SEBI also performs a variety of other functions. These include:

a.          To create and approve by-laws for the different securities exchanges

b.         To inspect the books and accounts of these recognized exchanges

c.          To impose companies to list themselves on one or more recognized exchanges

d.         To demand periodical returns from these exchanges

e.          To inspect the books and accounts of financial intermediaries

f.          To require securities exchanges to amend their by-laws if required

g.         To register brokers

Satyam Scam

·       Satyam an Indian IT Services company

·       Founded by Ramalinga Raju in 1987

·       Quickly rose to become a prominent force in the technological scene in India

·       Became a public limited co in 1992

·       Won various awards and achievements during its lifetime, like having over 53, 000 employees in more than 60 countries, winning the Golden Global Award in Business Achievement and the Golden Peacock Award and being one of India’s biggest Fortune 500 companies.

·       The scam happened in the wee hours of 2009

·       On 7th January, 2009, Ramalinga Raju resigned from Satyam and claimed an accounting fraud of over 7000 crore in the balance sheets

·       Raju wrote a letter confessing all the wrong-doings he engaged in to the BODs, the government and all the investors, stating “It was like riding a tiger, not knowing when to get off without being eaten.”

·       He disclosed that the balance sheets had been tampered with. For example, it was revealed that in the account for one of their quarters, their total revenue was shown to be 2700 crores with an operating cost of 649 crores. In fact, their total revenue was 2112 crores and their operating cost was 61 crores, already showing a gap of 588 crores in their sheets for the operating cost.

·       It was also revealed through further investigations that while Satyam claimed they had 53,000 employees, they only had about 40,000. This meant that Ramalinga Raju had been withdrawing over 20 crores each month to pay for these 13,000 non-existent employees.

·       This breach of investor trust had been building up over some time, especially after the torrid sales of shares by Satyam in order to acquire control over the two Maytas companies, both of which were owned by Raju’s sons. A $1.6 billion dollar deal was to be struck, which shook investor trust and left the BODs as skeptics, forcing a few to resign in December, 2008.

·       The various people implicated in the scandal include Raju himself, his brother, the managing director, the CFO and two Price Waterhouse Coopers auditors. The auditors were blamed for not correctly inspecting the discrepancies between the books and actual figures and considered to be complicit in the fraud. In 2018, SEBI banned PWC from auditing any listed companies in India.

·       Raju and the others were let go on bail in 2011 due to a proper chargesheet not being filed at the time. He was again brought back to court and kept in custody in 2014, and was pronounced to be guilty of breach of trust, forgery, criminal conspiracy, falsifying of accounts and other charges and was sentenced to 7 years in prison.

Women’s Magazines

·       Explain the history of magazines for women, beginning with the spread of feminism and the feminist wave, starting with the suffragette movement in the early 20th century.

·       How magazines evolved primarily for women as they were the ones who spent the most time idle and at home, tending to the house, caring for their children.

·       These magazines evolved to have themes specifically related to women and their lives, such as regarding their favorite soaps, home-management and being a good wife and mother.

·       This lead to the growth and development of advice columns and articles as such, and the common cliché of sex and love tip articles that you can find in any Cosmo today (Hint: the best and only tip is to just show up and be excited)

·       Go on to how these magazines evolved to include a lot of different aspects that they wanted to educate women about, primarily fashion and lifestyle. However, they also expanded into technology, world affairs and news of happenings around them and the world, since they were the ones with the most time on their hands to actually be aware of such things and read about them in magazines.

·       Popular examples of women’s magazines in India are (typical) Femina, Elle, Harpers Bazaar, Cosmopolitan, Vogue, Verve, Woman’s Era, Woman’s Health, Grazia, (regional) Sarita, Grihshobha, Grihlakshmi, Saras Salil, Manushi etc.

·       Women’s Magazines cover a number of issues ranging from current affairs to contemporary women’s issues and how they should be dealt with. Women’s magazines are one of the oldest niche areas.

·       There are different issues pertaining to women, especially today’s woman. Right from dowry to harassment at the workplace; to rights of women to dealing with financial matters, the concerns are many and need to be tackled effectively.

·       There is a section of women’s magazine which not glamorous but deal with serious issues pertaining to women. One of the pioneers of this genre is the magazine titled ‘Manushi’.

·       It is interesting to understand that Women’s magazines in the Indian Regional languages give their English counterparts a run for the money. The content, style, presentation, advertisements, layout are contemporary and what’s more they are available online so that the NRI audience is captivated with the information.

·       Then go into the difference between women’s English magazines and women’s regional magazines. These are the points you cover: Cover, Editorial and articleship, Layout, Language and grammar, Content, Pictures and photographs, Advertising.

Sports Magazine Journalism in India

·       Sports journalism includes personalities, fitness, rehabilitation, performance enhancing drugs, etc. It also includes articles on new regulations, new sports, improved techniques in sports and sports equipment as well as events conducted to raise awareness about social causes.

·           A sports magazine usually features articles or segments on sports comprising of many photographic images and illustrations. Some magazines concentrate on all general sports news and related issues while others concentrate on specific sports or games such as football, baseball, athletics etc. But the common aim of any sports magazine is to take fans inside the game and provide a mix of columns, features, profiles of their favorite players, scores, statistics and analysis of the game. News and information about sports, reviews, interviews, expert advice, player profiles, season previews, predictions and pre-game analysis as well as quality photos are some of the main ingredients in a sports magazine.

·       There are only some basic points of difference that you have to talk about, mainly with regard to the difference between sports on paper and on the ‘visual medium’

·       Sports magazine examples include Sportstar, Diamond Cricket, ESPN, Sports Illustrated, Cricket Today and others I really don’t give much of a crap about.

·       Sports magazines have colorful covers, good pictures, a lot more detail, better archiving, sports related ads. In fact, many popular TV channels, such as ESPN, originated from sports magazines.

·       Sports broadcast channels have the obvious advantage of playback and the audio-visual medium, where it becomes easier to actually view events as and when they go on. Audience interaction and discussion is a lot easier and responsive. It’s live and quick, but it’s usually much easier to cover smaller games and events in broadcast, as compared to magazines. They also have better receptacles (HD TVs).


Atal Pension Yojana

Introduced by: Prime Minister Narendra Modi

Key people: Arun Jaitley

Launched- 9 May 2015; 17 months ago

Atal Pension Yojana is a government-backed pension scheme in India, targeted at the unorganised sector. It was originally mentioned in the 2015 Budget speech by Finance Minister Arun Jaitley in February 2015. It was formally launched by Prime Minister Narendra Modi on 9 May in Kolkata. As of May 2015, only 11% of India’s population has any kind of pension scheme, this scheme aims to increase the number.

In Atal Pension Yojana, for every contribution made to the pension fund, The Central Government would also co-contribute 50% of the total contribution or ₹1,000 (US$15) per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years. The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Aadhaar would be the primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term. The subscribers are required to opt for a monthly pension from Rs. 1000 – Rs. 5000 and ensure payment of stipulated monthly contribution regularly. The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided once in year during the month of April.

This scheme will be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically. Most of these accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes.

Benefits of Atal Pension Yojana (APY)

The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower middle class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India has decided to contribute 50 percent of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution will, however, be enjoyed only by those who are not income tax payers and those who join the scheme before 31 December 2015.

Who is Eligible?

The Atal Pension Yojana (APY)  is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme.

All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.

Recent Developments

·   Government will extend the benefit of the APY via Post Offices all over the country so as to bring more people under its ambit. The implementation of the scheme through post offices is expected to be more helpful for the people in rural areas.

·   In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on premature death of the subscriber.

·   The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.

·   Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in year 2015 Budget.

·   To increase the outreach of Atal Pension Yojana (APY) among the prospective subscribers in the country, The Pension Fund Regulatory and Development Authority of India (PFRDA), on August 19, 2016, has integrated the APY module with the bank’s core banking system, allowing nrolments to happen through people’s saving accounts. It will not only make the process convenient, but a whole lot faster and hassle-free. The customers would not be required to submit physical forms to the bank from now on, and a web-based APY subscriber registration mode has been allowed for customers with net-banking accounts.

The scheme, which is administered by the Pension Funds Regulatory and Development Authority, can be availed by anyone who has a bank account, an Aadhar card and a mobile number.

1. Anyone in the age group 16-40 can subscribe to the Atal Pension Yojana. The age for exit from this scheme and start of pension is 60. So the minimum period for contributions by the subscriber is 20 years.

2. The monthly pension will depend on the contributions made by the subscriber. The minimum amount of monthly pension will be Rs 1,000 and the maximum will be Rs 5,000.

3. The Government of India will also contribute 50% of what the subscriber contributes per month, or Rs 1,000, whichever is lower.

4. However, the government has asked the banks to collect penalty on delayed payments, which can range from Re 1 to Rs 10 per month based on the amount of contribution.

5. You can help your driver, cook or domestic help sign up for this scheme by taking them to the nearest public or private bank and filling out their details. Also, you can help them register online by filling up an online subscription form.


-The Indian banking sector is an important constituent of the Indian financial system.

-Banking system plays a very significant role in the economy of a country. It is central to a nation’s economy as it caters to the needs of credit for all the sections of the society.

-India is an emerging economic giant.

-For the past three decades, India’s banking system has several outstanding achievements to its credit. It is no longer confined only to metropolitans but has reached even the remotest corners of the country.

This is one of the reasons of India’s growth process.

Banking sector in India:

-Towards the beginning of the 20th century, with the onset of modern industry in our country, the need for government-regulated banking system was felt.

-The British govt began to pay attention towards the need for an organized banking sector in the country and the RBI was set up to regulate the formal banking sector in the country.

-Ever since they were nationalized in 1969, banks have been playing a major role in the socio-economic life of the country.





-Business journalism is also known as Economic journalism, is one of the most important arms of journalism in the present times.

-It tracks, records, analyses and interprets the economic changes that takes place in society.

-It covers companies, workplaces, personal finance and economics, including unemployment and other economic indicators.

-Beginning in the early middle ages to help well-known traders communicate with each other, the first known instance of business journalism was when the Fugger family of Augsburg, Germany, published a newsletter of business information related to its financial business in 1568. Many such newsletters informing people about the availability and price of goods in a town/city later came up.

-In 1700s, British newspapers began publishing advertisements of merchants and also gave business information about arrival and departure of vessels and cargo to/from ports.

-In1750s newspapers began listing prices of goods available in towns and cities. This was called ‘price current’.

-The first US business newspaper was published in 1793, followed by the dedication of one page solely for business news in the New York Herald from 1835.

-The Wall Street Journal began publishing in 1889.

-The famous muckraking journalist Ida Tarbell’s reporting and writing about the standard Oil Co. In 1902 provided the template for how business journalists have covered companies since.

-The pioneer investigative and business journalist and editor of McClure’s magazine, exposed the scam of John Rockefeller, the first billionaire who found oil refineries.

Business Journalism in India:

-In India, business newspapers like The Economic Times are known as ‘Pink Papers’ in context of the salmon pink newsprint used for printing them.

-The history of business journalism in the country dates back to the 19th century with Reuters (the U.K) starting its operations in Mumbai in 1866, with financial news as its staple.

-The Economic Times was the first daily business newspaper in independent India, published by Bennett, Coleman & Co.Ltd., in 1961.

It has risen to a place among the top ten business newspapers in the world.

-Business Standard, The Financial Express, Financial Chronicle, Business Line, Mint are some of the other business newspapers in India.

Era of Privatization:

-Post LPG in India business journalism in the country gained pace.

-With ‘business’ as a newsbeat reaching heights in the county, India is the only large economy to have as many as six national English language business newspapers and around half a dozen 24×7 business news channels. US till date, only has two business channels- Bloomberg and CNBC.

-Today, business journalism in India has become one of the fastest growing employer.

-Financial news continually occupies the front page and opportunities in the field are expanding.

-Business journalism is spreading fast on the digital and mobile platform and is also extending to regional languages.

-With an increase in the population of the country, the demand is growing with a simultaneous growth in the supply leading to a growth in the GDP and a s a resultant increase in business news.

-Business reporting in India, includes, at present, corporate news, announcements, of deals, appointments, union budget, govt plans, plans and policies, political news with  business implication and the stock market.

Why Business Journalism?

-Money is the greatest invention of mankind.

-All economic activities revolve around money and consequently, a lay man is always related to business news.

-But the common man does not have the time and energy to foresee changes in the economic conditions that a business journalist, with experience, develops.

-Everything, at the end of the day is related to money.

-Money and its management is what drives a country, a company and the well-being of everybody.

-The modern day era of today is called ‘Money Era’ and people want a share in the growth and want to be financially literate citizens, to have a decent lifestyle.

-Business journalism plays a crucial role in ensuring this.

-A business journalist associates him/herself with everyone’s never ending desire to earn money, helping them in it and making them aware of where and how their hard earned money is being spent.

-The cardinal rule of business journalism is to touch the depths of the subject.

-Clarity, connection and comparison between the developments should be established.

-The base of retail investors in the industry has increased dramatically over the recent years, and so the number of business channels, the world does not need more information, but more analysis, understanding and insight.

-The information provided should be authentic, readable, understandable, informative and interesting.

What are the qualities and skills required for a good business journalist today?

-Just like covering any other beat, a business journalist should know which documents to look for and which sources to use.

-Knowledge of the basic principles of economics is a must.

-A business journalist covers a sector and follows it closely, reading upon it regularly. The journalist always approaches the sector from his reader’s perspective, thinking how it will impact them and interprets the development through available data.

-A business journalist consults the WHY of the story before the remaining 4 Ws and 1 H.

-Some of the sectors that readers directly relate to are personal finance, automotives, FMCG, real estate, technology and hospitality.

-Some sectors that they do not directly relate to are oil, metals, chemicals, fertilizers, pharmaceuticals and infrastructure.

-All major business newspapers, business magazine are looking at India as a place to make money, leading to a growth in business readership, financial literacy, different forms of business media, and consequently, the growth of business journalism.



What is Jan-Dhan Yojna?

Pradhan Mantri Jan-Dhan Yojana is India’s National Mission for Financial Inclusion to ensure access to financial services, namely banking savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner. This financial inclusion campaign was launched by the Prime Minister of India Narendra Modi on 28 August 2014. He had announced this scheme on his first Independence Day speech on 15 August 2014.

Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore (15 million) bank accounts were opened under this scheme. Guinness World Records recognises the achievements made under PMJDY, Guinness World Records certificate says “The most bank accounts opened in 1 week as a part of financial inclusion campaign is 18,096,130 and was achieved by banks in India from 23 to 29 August 2014”. By 1 June 2016, over 22 crore (220 million) bank accounts were opened and ₹384,110,000,000 (US$5.7 billion) were deposited under the scheme.


Purpose of the Yojna:

In a run up to the formal launch of this scheme, the Prime Minister personally mailed to Chairmans of all PSU banks to gear up for the gigantic task of enrolling over 7.5 crore (75 million) households and to open their accounts. In this email he categorically declared that a bank account for each household was a “national priority”.

The scheme has been started with a target to provide ‘universal and clear access to banking facilities’ starting with “Basic Banking Accounts” with overdraft facility of ₹5,000 (US$74)after six months and RuPay Debit card with inbuilt accident insurance cover of ₹1 lakh (US$1,500) and RuPay Kisan Card. In next phase, micro insurance & pension etc. will also be added.



The scheme has been criticized by opposition as an effort to please voters that has created unnecessary work-burden on the public-sector banks. It has been claimed that the poor deserves food more than bank accounts and financial security.

Further, these accounts have not yet added considerable profits to PSU banks. According to the experts, offers like zero balance, free insurance and overdraft facility would result in duplication. Many individuals who already have bank accounts may have had accounts created for themselves, lured by the insurance covers and overdraft facilities.

As per the scheme, a very few people are eligible to get the life insurance worth ₹30,000 (US$450) with a validity of just five years.

The claimed overdraft facility has been completely left upon the banks. As per the government notice, only those people would get the overdraft facility whose transaction record is satisfactory and financially sound.


Special Benefits under the Scheme:

1.      Interest on deposit.

2.      Accidental insurance cover of Rs. 1 lac

3.      No minimum balance required.

4.      The scheme provides life cover of Rs. 30,000/- payable on death of the beneficiary, subject to fulfilment of the eligibility condition.

5.      Easy Transfer of money across India

6.      Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.

7.      After satisfactory operation of the account for 6 months, an overdraft facility will be permitted

8.      Access to Pension, insurance products.

9.      The Claim under Personal Accidental Insurance under PMJDY shall be payable if the Rupay Card holder have performed minimum one successful financial or non-financial customer induced transaction at any Bank Branch, Bank Mitra, ATM, POS, E-COM etc. Channel both Intra and Inter-bank i.e. on-us (Bank Customer/rupay card holder transacting at same Bank channels) and off-us (Bank Customer/Rupay card holder transacting at other Bank Channels) within 90 days prior to date of accident including accident date will be included as eligible transactions under the Rupay Insurance Program 2016-2017.

10.   Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.






No Of Accounts

No Of RuPay Debit Cards

Aadhaar Seeded

Balance In Accounts

 % of Zero Balance Accounts





Public Sector Banks









Regional Rural Banks









Private Banks















₹45,302.48 crore(US$6.7 billion)






-Prime Minister Modi scrapped the 64 year old Planning Commission and replaced it with a new institution called National Developmental Reforms Commission (Niti Aayog) to address India’s economic need and strengthen its federal structure.

-The new body has eight members-three from industry and the rest comprising former or existing chief ministers and Cabinet ministers.

-The abolition and replacement with a new body did not require legislative changes , as the Planning Commission is set up by an executive order.

Aims and Objectives:

-The stated aim for NITI Aayog’s creation is to foster involvement and participation in the economic policy-making process by the State Government of India, a “bottom-up” approach to planning in contrast to the Planning Commission’s tradition of “top-doen: decision-making.

-Niti Aayog will provide opportunities, that the previous Planning Commission structure lacked, to represent the economic interests of the State Governments and Union Territories of India.

-It is an institution for creative thinking, using India’s young population.

-Niti Aayog is a group of people with authority entrusted by the government to formulate/ regulate policies in social and economic issues with experts in it.

-To provide public access to articles, field reports and work in progress as well as the published opinions of Niti officials, are available to the public on the Aayog website.

-The main objective is to make India $300 Billion plus e-commerce market by 2030 from $40 Billion today

-Help take it to all nooks and corners.

-It is a big breakthrough in Unified Payment Interface.

-All transactions could be done on mobile.

-At present 78% transactions take place in cash. However, the aim is to make India a paperless and cashless society by 2025.

-To act as a bridge between the center and the state.

-Assist the state with best Global expertise.

-To focus on improvement to social sanctions, health, education and nutrition.


1)         Prime Minister of India as the Chairperson.

2)         Governing Council comprising the Chief Minister of all the States and Union Territories with legislatures and lieutenant governors of other Union Territories.

3)         Regional Councils will be covened by the Prime Minsiter and will be composed of the Chief Ministers of States and Lt. Governors of Union Territories in the region.

4)         Experts, specialists and practitioners with relevant domain knowledge as special invitees nominated by the Prime Minister.

5)         Full-time organizational framework  (in addition to Prime minster as the Chairperson) comprising-

a)         Vice Chaiperson-Arvind Panagariya

b)         Members: Three Full time-economist Bibek Debroy, former DRDO Chief V.K Saraswat and Agriculture Expert Professor Ramesh Chand.

c)         Part-time members: Maximum of two from leading universities research organizations and other relevant institutions in an ex-officio capacity. Part-time members will beon a rotational basis.

d)         Ex-officio members: Maximum of four members of the Union Council of Ministers to be nominated by the Prime Minister.

e)         CEO: To be appointed by the PM for a fixed tenure.(Amitabh Kant)

f)           Secretariat as deemed necessary.




-The Planning Commission of India plays a key role in developing a framework for inclusive growth of the country and its citizens.

-It prepares the five year and annual plans of the country, plays an important part in the allocation of resources, acts as a vital think tank for the Government.

-The work of the Commission is organized into divisions/ units which are headed by Principal Advisers, Senior Advisers, Joint Secretaries.

-All of them maintain close contact with the concerned Central Ministries or State Governments and various non-official agencies.

-They also study and examine problems and issues in relation to the formulation as well as implementation of Plans, programmes and policies.


-The Planning Commission was set up by a Resolution of the Government of India in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community.

-Jawaharlal Nehru was the first chairman of the Planning Commission.

-The first Five-year plan was launched in 1951 and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan conflict.

-Two successions years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-Year plan was started in 1969.

-The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre and the years 1990-1991 and 1991-1992 were treated as Annual Plans.

-The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

-For the first eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries.

-Since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less.


Chairman-Prime Minister

Vice Chairman- Government appointed bureaucrat or economist

Other important government appointed officials

Main functions:

1)         To formulate and implement all the plans, policies and programmes (5 year plan).

2)         The preparation of Five Year Plan starts with formulation of an Approach paper, outlining the macro- economic, strategies and objectives of the plan. It also discusses alternative feasible scenarios and policy implications.

3)         The Approach Paper is prepared in the Planning Commission after intensive consultations with individuals and organizations, and of all the State Chief Ministers.

4)         The Approach Paper is prepared in the Planning Commission then presents this Approach Paper to the National Development Council for its consideration and approval.

5)         On approval, by the NDC, the Approach Paper is circulated among the State Governments and the Central Ministers, based on which they prepare their respective Five Year Plans.

6)         The approach Paper is also circulated among the institutions associated with Plan formulation, such as the Reserve Bank of India.

7)         Based on the parameters postulated in the NDC approved Approach Paper, the Central Ministries and the states prepare their respective plans.

8)         The basic modality involves establishment of a large number of Steering Committees/ Working Groups.

9)         Based on the reports of these Steering Committees and Working groups, the States and the Central Ministries come up with proposals of detailed plans and programmes.

10) The Planning Commission reviews these plans and programmes of the Central and State Plans and as a result, a detailed plans and programmes.

11) The Planning Commission reviews these plans and programmes of the Central and State plans and as a result, a detailed plan is evolved.


Reasons why it became obsolete:


1)         In 1991 LPG, free market was introduced. Therefore the role of the Planning Commission.

2)         The Commission suffered from accusations of discrimination if different parties governing state and centre.

3)         Role of the private sector.

4)         It failed to achieve the targets.

5)         It was termed as a control commission.

6)         Under developed states like North-East states suffered considerably.

7)         Prescriptions of one-size-fits-all scheme.



It was bifurcated into two divisions- Administrative and General

These are the following divisions that fall under the Planning Commission:


1)         Agriculture

2)         Communication, I.T and Information

3)         Development Policy and Perspective Planning

4)         Financial Resources

5)         Health, Family Welfare and Nutrition

6)         Housing and Urban Affairs

7)         Human Resource Development

8)         Industries

9)         Infrastructure

10) International Economics





-The Reserve Bank of India is the central bank of the country.

-It commenced its operations on 1st April 1935 during the British Rule in accordance with the provisions of the Reserve bank of India Act, 1934.

-The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission, Sir Osborne Smith was the 1st governor.

-Till 1949, RBI was not owned by the government. After 1949, RBI was owned by the government.

-At present it has 19 regional offices and 9 sub-offices.

-First headquarters was in Calcutta, then shifted to Bombay in 1937.

-Central Bank is the final authority on all banking regulations and policies.

-Its core responsibility is to manage currency in India.

-It ensures prices remain stable and enough for economic growth by keeping making systems safe and stable.

-It is also called “Banker to the banks”. It is an autonomous body.


Board for Financial Supervision (BFS):

-Inspects legal issues in bank frauds.


Reserve Bank’s Monetary Policy Department (MPD):

-Reviews policies every quarter.


Financial Markets Department (FMD):

-Handles day-to-day liquidity management operations.


Preamble of the RBI:

-To regulate the issue of bank notes.

-Keeping of reserves with a view to securing monetary stability in India.

-To operate the currency and credit system of the country to its advantage.


Direct and Indirect Instruments of Monetary Policy used by RBI:

1)     Cash Reserve Ratio (CRR) 4%

A certain percentage of the total deposit of the commercial banks have to be kept with the RBI. Changes every quarter, every 3 months, the rate changes)


2)     Repo Rate 8%

Rate at which the Central Bank lends money to commercial banks in the events of any shortfall of funds. During inflation, banks increased reserve ratio. (Interests at which banks borrow from the RBI)


3)     Reverse Repo Rate 7%

Rate at which RBI borrows from the commercial banks within the country. An increase in the Reverse Repo Rate leads to decrease in money supply. (Interests at which RBI borrows)


4)     Statutory Liquidity Ratio (SLR)

Amount of money that is invested in certain specified securities predominantly central and state government. This again is the percentage of the total deposit- 22.5% slashed by 0.5%=22%.

(Amount of which the commercial banks have to invest in government securities)


Functions of RBI:


1)     Issue of Bank Notes:

-The Reserve Bank of India has the sole right to issue currency notes except one rupee notes which are issued by the Ministry of Finance.

-Currency notes issued by the RBI are declared unlimited legal tender throughout the country.

-This concentration of notes issue function with the RBI has a number of advantages:

i) It brings uniformity in notes issues.

ii) It makes possible effective state supervision.

iii) Easier to control and regulate credit in accordance with requirements of the economy.

iv) It keeps faith of the public in the paper currency.


2)     Banker to the government:

-As banker to the government the RBI manages the banking needs of the government.

-It has to maintain and operate the government’s deposit accounts.


3)     Custodian of Cash Reserves of Commercial Banks:

The commercial banks hold deposits in the Reserve Bank and the latter has the custody of the cash reserves of the commercial banks.


4)     Custodian of Country’s Foreign Currency Reserves:

This enables the RBI to deal with the crisis connected with adverse balance of payments position.


5)     Lender of Last Resort:

The commercial banks approach the RBI in times of emergency to tide over financial difficulties and the Reserve Bank comes to their rescue though it might charge a higher rate of interest.


6)     Central Clearance and Accounts Settlements:

Since commercial banks have their surplus cash reserves deposited in the Reserve Bank, it is easier to deal with each other and settle the claim of each on the other through book keeping entries in the books of RBI.


7)     Controller of Credit:

Since credit money forms the most important part of the supply of money, and since the supply of money has important implications for economic stability, the importance of control of credit becomes obvious.


8)     Development and Promotional Function:

-The RBI also has an active and developmental role in agricultural and rural sector.

-In an agrarian economy like ours, the RBI has to provide special attention for the credit need of agriculture and allied activities.

-It has successfully rendered service in this direction by increasing the floe of credit to this sector.

-It has earlier the Agriculture Refinance and Development Corporation (ARDC) to look after the credit, National Bank for Agriculture and Rural Development (NABARD) and Regional Rural Banks (RRBs)



What is a subsidy?

-A subsidy is a form of financial aid or support extended to an economic sector generally with the aim of promoting economic and social policy.

-A subsidy, often viewed as the converse of a tax, is an instrument of fiscal policy. Derived from the Latin word ‘subsidium’, a subsidy literally implies coming to assistance from behind. However, their beneficial potential is at its best when they are transparent, well targeted and suitably designed for practical implementation.

Subsidies in India:

-The Indian government has, since independence, subsidised many industries and products, from fuel to food. Subsidies play a vital role in the economy of the country.

-A country has various resources which are to be gainfully deployed for the benefit of the population of the country.

-Subsidies are provided to ensure equitable utilization of the resources for the people. The three types of countries: the underdeveloped, the developing and the developed have different types of subsidy methods and types based wholly on the economic and political conditions.

-Developing countries like India provide subsidies to their population for improving the standard of living; the underdeveloped countries provide subsidies for meeting bare minimum needs of the vast majority of the population.

-Subsidies represent a sizeable item of the center’s non-plan expenditure. In India, food and fertilizers are the two main items subsidised by the government through budgetary support.

-A developing country like India in constant need of subsidies for promoting development.

-Providing minimum consumption entitlement to the poor by subsidising the items consumed by them is extremely important for the welfare of the economy.

-However, these subsidies can be maximised only when they are transparent, well targeted and designed for effective implementation without any leakages.

-The issue of granting subsidies or not has given rise to many questions which needs to be answered by the government, economists and politicians as well.

-The major question in front of the policymakers and economists these days is ‘do we really need subsidies?’

-For this we need to understand the negative aspects of subsidies which seem to be more than the positives.

-Once received the people receiving become dependent and lethargic and start to think that it is their birth right to receive these subsidies.  These subsidies make the beneficiaries lethargic. Misuse of subsidies for political purposes are known worldwide.

Food Subsidies:

Those who advocate the beneficiaries should also keep in mind one thing that is that the subsidies in Indian never reach the intended i.e the poor . The fact is that, in India, most subsidies are not for the poor but foe the rich. Despite the continuous rise in food subsidies, hunger and malnutrition rate has not reduced as much as it should. Due to the faulty government practices, people who are in serious need of subsidies are being forced out of the system.

Fertilizer Subsidies:

Similar is the case in terms of fertilizers as well. The fertilizer subsidy places another burden on the central government. It is a well-known fact that 70% of the Indian economy is agriculture based, hence the subsidy need to be of greater benefits to the farmer in terms of fertilizers, but only 60% subsidies seem to reach the farmers, rest is taken by the middlemen, rich farmers. The purpose and credibility is getting lost.


The most alarming factor yet is not the size but rather the manner and purpose of spending. Subsidies provided in India suffer from both inclusion error and those who are counted under the exclusion error. Unless the subsidies follow transparency and take steps to make it effective so as to reach to the target consumers and people in need are benefited by it.

The positives of subsidies are:

-Subsidies ensure equitable utilization of resources of the people.

-Subsidies represent a sizeable item of the Center’s non-planned expenditure.

-Food and fertilizers are two main subsidised items.


Measure for effective utilization:


-Should be given as one time help for a short period of time.

-Should be continuously monitored over for the entire period.

-The focus of achievements for the criteria should be more on the terms of physical achievement rather than financial disbursements.

-The parameter fixed on subsidy should be transparent.

-Cost effective and reach the target consumer.

-Proper targeting of subsidies.

-Timing of the subsidies, they should reach within the time limit so that the use can be done effectively.



-This is an Act of the Parliament of India which aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.

-Under the provision of the Bill, beneficiaries of the Public Distribution System (PDS) are entitled to 5kgs of rice for Rs3, wheat at Rs2, coarse gram (millet) at Rs1.

-Pregnant women, lactating mothers, and certain categories of children are eligible for daily free meals. It’s a political motivation and fiscal responsibility.

-The states are responsible for determining eligibility criteria:

·           Pregnant women and lactating mothers are entitled to a nutritious “take home ration” of 600 calories and a maternity benefit of at least Rs 6000 for six months.

·           Children six months to 14 years of age are to receive free hot meals or” take home rations”.

·           The Central govt will provide funds to states in case of short supplies of food grains.

·           The current food grain allocation of the states will be protected by the central government for at least six months.

·           The state govt will provide a food security allowance to the beneficiaries in case of non-supply of food grains. The PDS system is to be reformed.

·           The eldest woman in the household, 18 years or above, is the head of the household for the issuance of the ration card.

·           There will be a state and district level redress mechanisms.

·           State Food Commissions will be formed for implementation and monitoring of the provisions of the Act.

-In the end, the whole issue of subsidies is as much political as it is economical.

-The policies implemented and are advocated by those who are pro-poor in front of the public as they fear the loss of the vote bank from the organized labour section of the society.

-They fear the loss of vote bank at an excess where this topic is untouched in the parliament.

-The politicians only touch this issue during the time of elections and corner and real meaning of subsidies and their value and importance to the people.

-Increasing in subsidies will only result in keeping the political constituency happy and lead to a bulging fiscal deficit-without benefiting the intended beneficiaries.



A pin drops:

-In 2010, Roshan lal, a CA based out of Indore, sent a letter requesting the National Housing Bank (NHB), to investigate housing bonds issued by Sahara India Real Estate Corporation and Sahara Housing Investment Corporation.

-The letter was forwaded to the market regulator SEBI.

Regulator in action:

-The SEBI ordered an investigation based on Lal’s letter.

-Investigations hit a hurdle as SIREC and SHIC were not listed on stock exchanges.

A few shreds of evidence:

-Luckily for SEBI, Sahara Prime City, a real estate arm of the Sahara Group, had filed a draft red herring prospectus (DHRP) for an IPO.

-The SEBI reviewed information regarding the bond issued by the two companies in question, which was mentioned in the DRHP itself.

-The SEBI concluded that SIREC and SHIC violated the companies Act by collecting money through optionally fully convertible unsecured debentures and ordered the company not to raise any further funds using these instruments.

Courtroom battle begins:

-The Allahabad High Court stayed the SEBI order and the SC also turned down SEBI’s plea to stop the two firms from raising money from investors.

-The SC however, empowered the regulator to seek information.

Out in the open:

-The SEBI issued a public notice cautioning investors against buying bonds issued by SIREC and SHIC.

-Lucknow bench of Allahabad high court vacated earlier stay on the SEBI order.

-The SEBI then alerted investors about a ban on fund raising schemes by the two Sahara companies.

-Sahara challenged the Allahabad HC order in Supreme Court, the SC told Sahara to share details of investors and asked the company to approach the Securities Appellete Tribunal (SAT).

-The SAT ruled in SEBI’s favour, upholding the order and asking the company to refund the money.

-The Sahara Group accused the SEBI of refusing to accept documents of the investors, which the company was required to submit to the market regulator to meet the deadline set by the SC.

-Sahara alleged that the truck’s carrying documents were waiting since the evening of September 10 outside SEBI headquarters but not allowed inside.

-In August 2012, the SC ordered the Sahara Group to return Rs 24,000 crore, plus 15% interest to millions of investors, within three months.

Ad fest:

In newspapers, Sahara said that it would return the money to the investors.


-SEBI told Sahara that they indulge too much in hide and seek and that SEBI cannot rust them anymore. There is no escape for Sahara and that they have to return the money.

-Too this, Subroto Roy replied that right from the beginning SEBI’s one point programme was to hit and destroy Sahara.


-After repeated attempts to get Sahara to refund Rs 19,000 crore to small investors, the court had asked Sahara to deposit title documents of land assets which it then asked market regulator SEBI to sell and make the refunds.

-Sahara submitted title deeds of land assets worth Rs 4000 crores, mostly in and around Mumbai. Documents assessed by NDTV suggest that SEBI has found multiple defects in these, making it impossible to sell the land.

-SEBI also said that Ambey Valley is under multiple litigation and lacks green clearances from the State Pollution Control Board.

-The regulator has also questioned Sahara’s valuation of a plot of land in Versova. Sahara puts a value of Rs 20, 000 crore on it, whereas SEBI said that it was worth only Rs 118 crore.

-Sahara says that SEBI uses the same valuation agency so there should be no sort of discrepancy.

-Sahara lawyers admitted in the SC that the land assets that they had submitted could not be sold because they belonged to other entities.

-This irked the court, which asked Subroto Roy to appear before it. His failure to do so led them to issue the arrest warrant and to his eventual arrest in Lucknow.

-Sahara has alleged that SEBI is dragging its feet in repaying the investors even though Sahara has paid Rs 5000 crores to the regulator.

-SEBI accepts that it has only been able to repay Rs 1 crore from this, but it has only received 3500 requests for refunds. Of this, the regulator says only 560 cases have been found fit for repayment.

-SEBI also claims that Sahara has still not given details to support its claim that it has refunded Rs 19,000 crores to investors, alleging that the company changes its position repeatedly.



Market regulator Securities and Exchange Board of India (SEBI) has ordered the Kolkata-based Saradha Realty India to close all its collective schemes and refund the money it collected from investors within three months. It has also barred the Saradha group and its Managing Director Sudipta Sen from the securities markets till the company winds up all its chit fund schemes and refunds the entire money to investors.

Investors and fund collection agents of the Saradha group have been protesting for many days now in West Bengal. Mr Sen, who was absconding since early April, has been arrested in Kashmir.

Saradha lured lakhs of investors to deposit money in its schemes with glossy brochures and the promise of abnormally high returns. A perceived closeness to the ruling Trinamool Congress in West Bengal allegedly also helped it get investors and agents on board – Saradha had Trinamool Rajya Sabha MP Kunal Ghosh heading its media division and MP Satabdi Roy was featured in its promotional material. Chief Minister Mamata Banerjee had inaugurated two Saradha offices. 

An official estimate says Saradha had mopped up about Rs. 1200 crore through its chit funds, but some calculations put that the figure closer to Rs. 4000 crore. 

An army of fund collection agents worked for Saradha; about 2.5 to 3.5 lakh people, many of who also invested their own money. These agents got a commission ranging from 15 to 40 per cent.

The schemes were simple and attractive. An investor could invest as little as 100 rupees and there was no upper limit. Saradha promised returns unheard of – 15 per cent to 50 per cent.  

It also promised land and fancy holidays, always with the assurance that if it failed to deliver, it would give cash. 

It was a classic ponzi scheme. With the money it collected, Saradha did not create the assets it promised it would. It merely gave money collected from one depositor to pay off another.   

There are no clear answers yet on why the Saradha chit funds collapsed. There is speculation that the inflow of money began to dry up after a crackdown by the SEBI and the Reserve Bank of India. Also, many policies held by depositors were beginning to mature and Saradha simply did not have the cash to pay up. 

The marker regulator launched an investigation into Saradha Realty about three years ago after it received a reference from the Director of Economic Offences Investigation Cell of the West Bengal government in April 2010. 

SEBI has warned that it will be launching a criminal case for “fraud, cheating, criminal breach of trust and misappropriation of public funds” and initiate the of winding up of the entire company if Saradha does not pay back its investors within three months.

Satyam Scam

-Satyam Computers has been one of the major contributors to IT revolution in India.

-A company which had been the fourth largest Software Company of India came to ground on January 7, 2008 with its chairman Ramalinga Raju conceding that he has systematically fudged the accounts of the company.

-Cash and bank balance as reflected in the accounts, actually does not exist.

-According to a rough estimate total fraud is to the tune of around Rs.8000 crores. Keeping in view the interest of the investors, employees and the IT sector at large, government reconstituted the board of Satyam computers, with a view to control the damage.

-It was decided to give away a package to revitalize the company starving of funds to even pay the salary of its 51,000 employees.

-When this fraud was brought to light by Satyam’s chairman himself, the price of the share tumbled by about 80 percent in a day. The government has even ordered an equiry into the affairs of 8 group companies of Satyam.

-SEBI, Company Law and Board and Institute of Chartered Accountants of India have also initiated their enquiries on their own. But this is a fact that shareholders net worth has been eroded by thousands of crores and 51,000 of workers are at the verge of losing their livelihood, exchequer and the economy would be at a great loss.

-Enron-an American company did the exact same thing. In that case auditors were named as one of the main culprits. CEO of the company is serving 24 years of imprisonment, but at the same time auditing company Arthur Anderson has lost its existence world over after the incident.

-In this scam the auditing company was Price Waterhouse Cooper. Experts believe that the company could not have done a fraud of this magnitude without the connivance of auditors.

-The fact is that when Satyam was fudging the accounts in, the auditing company was certifying these accounts to be correct. Auditor is obliged to minutely inspect each and every transaction of a firm and certify the same to be correct as per rules. These certified account statements are then sent to the shareholders

-Thus we can say that the fraud has not been committed by Raju alone, the auditing company must also have been fully involved in the same.


-The capital market has witnessed tremendous growth during late 1980s characterized particularly by the increasing participation of the public.

-Investors’ confidence in the capital market can be sustained largely by ensuring investors’ protection.

-With this, the Centre decided to setup Securities and Exchange Board of India and vast immediately with statutory powers to deal effectively with all matters relating to capital market.

-It was felt by the Government that by transferring the pl Issues to an powers of the Controller of Capital Issues to an independent body would enable it to effectively regulate, promote and monitor thw working of Stock Exchanges in the country.

-in 1988 the SEBI was established by the Govt of India through an executive resolution, and was subsequently upgraded as a fully autonomous body on April 12th, 1992 with the passing of the SEBI Act on January 30th, 1992. Paradoxically, this was a positive outcome of the Securities Scam of 1990-1991.

-Initially SEBI was a non-statutory body without any statutory power. However, in the year of 1995, the SEBI was given additional statutory power by the Govt of India through an amendment to the SEBI Act 1992.

-In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Govt of India.

-The SEBI is managed by its members which consists of a chairman- nominated by the Center, two members i.e officers from the finance ministry, one member from RBI and five members nominated by the Center.

-At present, the office of SEBI is situated at SEBI Bhavan, BKC in Mumbai, with its regional offices at Kolkata, Delhi, Chennai and Ahmedabad.

-It has recently opened local offices at Jaipur and Bangalore. Further, the board is planning to open offices at Guwahati, Bhibhaneshwar, Patna, Kochi and Chandigarh in the financial year 2013-2014.

-Preamble-“To protect the interests of investors in securities and promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto.”

Objectives: The objectives are: to protect the interests of investors in securities, to promote the development of securities market, to regulate the securities market and formatters connected therewith or incidental thereto.

-Since its inception, the SEBI has played a crucial role towards the improvement in the securities markets and capitalization requirements, margining and establishment of clearing corporations which also reduced the risk of credit.

-SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the eligibility criteria, the code of conduct for different intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers , registrars, portfolio managers, credit rating agencies, underwriters and others.

-It also framed bye-laws, risk identification and risk management systems for clearing houses of stock exchanges and surveillance system which have made dealing in securities both: safe and transparent to the end investor.

-The Board comprises Upendra Kumar Sinha as thr chairman, Prashant Saran, Rajeev Kumar Agarwal, S Raman, Prakash Chandra, K.Jairath Magya, Ananad Sinha, Naved Masood and Raje Kumar.


It is the foremost duty of the Board to protect the interests of investors, regulate and promote the development of securities market, by such measures as it thinks fit.

-SEBI regulates the stock exchange business and any other securities markets, registrars, and regulates the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant brokers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner and aims at prohibiting fraudulent, unfair trade practices relating to securities markets.

Other important roles:

-Promoting investor’s education and training of intermediaries of securities markets.

-Conducting research for the above purposes.

-Inspecting of any books, registers or other important documents of corporate and their employees.

-Issuing commissions for the examination of witnesses or documents.

-Suspend the trading of any security in a recognized stock exchange.

-Seize books, registers, other documents and record, it considers necessary for the purposes of the investigation.

-It is expected from SEBI that no company or broker is allowed to act against the interests of the shareholder. In fact existence of a regulator gives a confidence amongst the stakeholders in that sector.

-However, according to industry analysts , this regulating agency has failed at various occasions.

-Thousands of companies vanished eating away lakhs of crores of rupees of investors and SEB could not so anything. Sometimes, tiny cases of insider training by companies are investigated by SEBI, fraud of lakhs of rupees gets easily escaped from its scanners.

-Secondly, there is a need to examine the condition and functioning of SEBI and make suitable changes wherever needed to enable SEBI to meaningfully discharge its duty as a regulatory in the stock market.

-All multinational and India auditing companies which are found to be indulged in fraud in any part of the world, should be placed under the scanner and their acts be investigated in India.

-This would be a proactive step in the interest of the nation at large.



How does it function?

-Gambling is a zero-sum game which takes money from the losers and gives the total amount to the winner.

-It creates no value.

-Stock market, on the other hand, creates value for the money invested and the investors also benefit from the same.

-Stock exchange provides a trading platform where buyers and sellers can meet to transact in securities. In India, there are, a total of 24 stock exchanges.

-When you buy a stock or a share, you are buying a piece of the company. Shares are issued by the company to raise funds for the growth of the business.

-Traders and investors buy and sell stock of the company on stock exchange.

-However, the company only receives money from the Initial Public Offer, the further trading of the stocks of the company does not benefit the company monetarily.

-Trying to predict which stock will rise or fall, and when is very difficult.

The Capital Market is divided into two segments:

1)         Primary Market-

-Companies mostly start privately.

-However, the promoters’ capital and borrowed capital might not be sufficient for running the business in the long term.

-This is when they turn to the primary market, to raise long-term funds by issuing securities such as debt and equity.

Debt– It is an obligation where the company borrows money and has to pay periodic and fixed returns. The debt owners are like money lenders are investment in debt is less risky than in equity.

Equity-It means ownership i.e the investor becomes a part owner of the company he is investing in. The investor is entitled to earn dividends but may or may not receive the same; it depends on how the company is doing; the returns are not fixed. Hence, investing in equity is highly risky. These securities may be issued at face value, at premium or at discount.


2)         Secondary Market-

-It provides liquidity to the investors in the primary market.

-It provides an efficient platform for trading of the securities initially offered in the Primary Market.

-All investors who apply for shares in the IPO may or may not get allotment.

-If they don’t, they can always buy the shares in the Secondary Market.




1)     Economic Barometer:

-A stock exchange is a reliable barometer to measure the economic condition of a country.

-Every major change in the country and economy is reflected in the prices of shares.

-The rise or fall in the share prices indicates the boom or recession cycle of the economy.

-Stock exchange is also known as a pulse of the economy or economic mirror which reflects the economic conditions of a country.


2)     Pricing of Securities:

-The stock market helps to value the securities on the basis of demand and supply factors.

-The securities of profitable and growth oriented companies are valued higher as there is more demand for such securities.

-The valuation of securities is useful to investors, government and creditors.


3)     Safety of Transaction:

-Only listed companies are traded in and stock exchange authorities include the companies’ names in the trade list only after verifying the soundness of the company.

-The companies which are listed have to operate within strict rules and regulations which ensures safety of dealing through stock exchange.


4)     Contributes to economic  growth:

-The buying and selling of securities of various companies-a process of disinvestment and reinvestment- helps to invest in the most productive investment proposal which leads to capital formation and economic growth.


5)     Spreading the equity cult:

-Stock exchanges encourages people to invest in ownership securities by regulating new issues, better trading practices and by educating public about investment.


6)     Providing Scope for speculation:

To ensure liquidity and demand and supply of securities, the stock exchange permits healthy speculation of securities.


7)     Liquidity:

-The stock market is a ready market for sale and purchase of securities.

-The presence of stock exchange market gives assurance to investors that their investment can be converted into cash whenever they want.


8)     Better Allocation of Capital:

-The general public hesitates to invest in the securities of loss making companies.

-So Stock exchange facilitates allocation of investors’ funds to profitable channels.

-The shares of profit-making companies are quoted at higher prices and are actively traded in so that these companies can easily raise fresh capital.


9)     Promotes the habit of savings and Investment:

-The stockmarket provides attractive opportunities of investment.

-These encourage people to save more.




Why do some symbols have three letters while other have four?

-The ‘ticker symbol’ quotes stocks of one exchange.

-Throughout the trading day, these quotes will continually scroll across the screen of financial channels.

-In most cases, the ticker will only quote the stocks of one exchange but it is common to see the numbers of two exchanges scrolling across the screen.

The abbreviations used for the volumes of the trade being quoted are:


M-10 lakhs

B-100 crores

-The number of letters tell where the stock is trading.

-A three-letter symbol indicates trading on the NYSE and four-letters indicate trading on the Nasdaq.

-Green is used to indicate that the stock is trading higher than the previous day’s close.

-Red indicates that the stock is trading lower  than the previous day’s close.

-Blue or white means the stock is unchanged from the previous day’s closing price.


Qualities of a stock market reporter:

-Market reporters publish business and financial news.

-They are journalists who specialize in the stock market and provide information and analysis.

-A market reporter gives the investors a private screening of the stock market’s show.

-Like every traditional reporter, a market reporter also has a beat i.e a single commodity market like agriculture, energy or metals.

-The market reporter is responsible for knowing everything about the beat. This requires research of relevant industries, companies and individual, funding and interviewing industry contacts.

-In addition to this, they need to be aware of the latest developments in the areas of business, politics and regulation.

-The person should hold a bachelor’s degree or higher and share the following traits:

1) Reliable

2) Persistent

3) Keep pushing through, even when faced with tough obstacles

4) Calm under pressure



-The Bombay Stock exchange was established in 1875.

-It was the prominent stock exchange in India and the oldest in Asia.

-It was started in 1850 by an informal group of 22 stockholders who began trading under a banyan tree opposite the town hall of Bombay.

-It was called the Native Share and Stock Brokers Association back then.

-In 1860, this group increased to 60 stock brokers and further, to 250 in 1875 when t was renamed as BSE. They acquired a plot of land in 1928 and occupied it in 1930.

-Premchand Roychand, a leading stock broker, assisted in setting out traditions, conventions and procedures for trading of stocks at BSE which are followed till date.

-The BSE index, SENSEX stands for Sensitive Index and consists of 30 representative stocks.

-Over a period of time, BSE brought about various technological upgrades and transformed to trading online (BOLT-Bombay Online Trading) from the initial outcry system.

-In 1956, the Govt of India recognized BSE as the 1st stock exchange in the country.

-In the aftermath of a major scandal with the market manipulation involving BSE member Harshad Mehta, BSE responded to calls for reform.

-This encouraged the creation of the NSE which created an electronic marketplace.



-NSE was promoted by leading financial institution IDBI at the behest of the Government of India.

-NSE is professionally managed with excellent use of technology.

-In 1993, it was recognized as a stock exchange under the Securities Contact Regulation Act 1956.

-NSE started on 4th November 1994, and within a year its turnover was more than that of the BSE.

-In a short span of time, it became the leading stock exchange in India.

-Established in 1992, the NSE has developed into a sophisticate, electronic market which ranks third in the world for the transacted volume.

-It is the first fully automated electronic exchange with a nationwide presence.

-The NSE index NIFTY is a well-diversified stock index representing 50 stocks accounting for 13 sectors of the economy.

-The number of listed stocks on the BSE is approximately 6,000 while the number is 1,800 for the NSE.

-The NSE covers more than 161 cities in comparison to BSE’s coverage of 98 cities.

-The budget is prepared by the Finance Minister with the assistance of number of advisors and bureaucrats.

-The Finance Minister seeks the view of industry captains and economists prior to preparation. Various accounting and finance related organizations send in their opinions and suggestions.

-The budgeting exercise in India remains mainly the domain of bureaucrats to participate and influence the outcome.

-Normally, the budget-making process starts in the third quarter of the financial year.

•Budget 2017-18 contains 3 major reforms: advancement of date of presentation, merger of railway budget with general budget, abolition of Plan and non-Plan expenditure

The 2017 Union Budget, presented by Finance Minister Arun Jaitley on 1st of February, was broadly focused on 10 themes — the farming sector, the rural population, the youth, the poor and underprivileged health care, infrastructure, the financial sector for stronger institutions, speedy accountability, public services, prudent fiscal management and tax administration for the honest.

Following are the highlights of Mr. Jaitley’s Budget speech:


1.     Demonetisation is expected to have a transient impact on the economy.

2.     It will have a great impact on the economy and lives of people .

3.     Demonetisation is a bold and decisive measure that will lead to higher GDP growth.

4.     The effects of demonetisation will not spillover to the next fiscal.

Agriculture sector

1.     Sowing farmers should feel secure against natural calamities.

2.     A sum of Rs. 10 lakh crore is allocated as credit to farmers, with 60 days interest waiver.

3.     NABARD fund will be increased to Rs. 40,000 crore.

4.     Government will set up mini labs in Krishi Vigyan Kendras for soil testing.

5.     A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.

6.     Irrigation corpus increased from Rs 20,000 crore to Rs 40,000 crore.

7.     Dairy processing infrastructure fund will be initially created with a corpus of Rs. 2000 crore.

8.     Issuance of soil cards has gained momentum.

9.     A model law on contract farming will be prepared and shared with the States.

Rural population

1.     The government targets to bring 1 crore households out of poverty by 2019.

2.     During 2017-18, five lakh farm ponds will be be taken up under the MGNREGA.

3.     Over Rs 3 lakh crore will be spent for rural India. MGNREGA to double farmers’ income.

4.     Will take steps to ensure participation of women in MGNREGA up to 55%.

5.     Space technology will be used in a big way to ensure MGNREGA works.

6.     The government proposes to complete 1 crore houses for those without homes.

7.     Will allocate Rs. 19,000 crore for Pradhan Mantri Gram Sadak Yojana in 2017-18.

8.     The country well on way to achieve 100% rural electrification by March 2018.

9.     Swachh Bharat mission has made tremendous progress; sanitation coverage has gone up from 42% in Oct 13 to 60% now.

For youth

1.     Will introduce a system of measuring annual learning outcomes and come out with an innovation fund for secondary education.

2.     Focus will be on 3,479 educationally-backward blocks.

3.     Colleges will be identified based on accreditation.

4.     Skill India mission was launched to maximise potential. Will set up 100 India International centres across the country.

5.     Courses on foreign languages will be introduced.

6.     Will take steps to create 5000 PG seats per annum.

For the poor and underprivilege health care

1.     Rs. 500 crore allocated for Mahila Shakthi Kendras.

2.     Under a nationwide scheme for pregnant women, Rs. 6000 will be transferred to each person.

3.     A sum of Rs. 1,84,632  crore allocated for women and children.

4.     Affordable housing will be given infrastructure status.

5.     Owing to surplus liquidity, banks have started reducing lending rates for housing.

6.     Elimination of tuberculosis by 2025 targeted.

7.     Health sub centres, numbering 1.5 lakh, will be transformed into health wellness centres.

8.     Two AIIMS will be set up in Jharkhand and Gujarat.

9.     Will undertake structural transformation of the regulator framework for medical education.

10.  Allocation for Scheduled Castes  is Rs. 52,393  crore

11.  Aadhaar-based smartcards will be issued to senior citizens to monitor health.

Infrastructure and railways

1.     A total allocation of Rs. 39,61,354 crore has been made for infrastructure.

2.     Total allocation for Railways is Rs. 1,31,000 crore.

3.     No service charge on tickets booked through IRCTC.

4.     Raksha coach with a corpus of Rs. 1 lakh crore for five years (for passenger safety).

5.     Unmanned level crossings will be eliminated by 2020.

6.     3,500 km of railway lines to be commissioned this year up from 2,800 km last year.

7.     SMS-based ”clean my coach service” is put in place.

8.     Coach mitra facility will be introduced to register all coach related complaints.

9.     By 2019 all trains will have bio-toilets.

10.  Five-hundred stations will be made differently-abled friendly.

11.  Railways to partner with logistics players for front-end and back-end solutions for select commodities.

12.  Railways will offer competitive ticket booking facility.

13.  Rs. 64,000 crore allocated for highways.

14.  High speed Internet to be allocated to 1,50,000 gram panchayats.

15.  New Metro rail policy will be announced with new modes of financing.

Energy sector

1.     A strategic policy for crude reserves will be set up.

2.     Rs. 1.26,000 crore received as energy production based investments.

3.     Trade infra export scheme will be launched 2017-18.

Financial sector

1.     FDI policy reforms – more than 90% of FDI inflows are now automated.

2.     Shares of Railway PSE like IRCTC will be listed on stock exchanges.

3.     Bill on resolution of financial firms will be introduced in this session of Parliament.

4.     Foreign Investment Promotion Board will be abolished.

5.     Revised mechanism to ensure time-bound listing of CPSEs.

6.     Computer emergency response team for financial sector will be formed.

7.     Pradhan Mantri Mudra Yojana lending target fixed at Rs 2.44 lakh crore for 2017-18.

8.     Digital India – BHIM app will unleash mobile phone revolution. The government will introduce two schemes to promote BHIM App – referral bonus for the users and cash back for the traders.

9.     Negotiable Instruments Act might be amended.

10.  DBT to LPG consumers , Chandigarh is kerosene-free, 84 government schemes are on the DBT platform.

11.  Head post office as the central office for rendering passport service.

12.  Easy online booking system for Army and other defence personnel.

13.  For big-time offences – including economic offenders fleeing India, the government will introduce legislative change or introduce law to confiscate the assets of these people within the country.

Fiscal situation

1.     Total expenditure is Rs. 21, 47,000 crore.

2.     Plan, non-plan expenditure to be abolished; focus will be on capital expenditure, which will be 25.4 %.

3.     Rs. 3,000 crore under the Department of Economic Affairs for implementing the Budget announcements.

4.     Expenditure for science and technology is Rs. 37,435 crore.

5.     Total resources transferred to States and Union Territories is Rs 4.11 lakh crore.

6.     Recommended 3% fiscal deficit for three years with a deviation of 0.5% of the GDP.

7.     Revenue deficit is 1.9 %

8.     Fiscal deficit of 2017-18 pegged at 3.2% of the GDP. Will remain committed to achieving 3% in the next year.

Funding of political parties

1.     The maximum amount of cash donation for a political party will be Rs. 2,000 from any one source.

2.     Political parties will be entitled to receive donations by cheque or digital mode from donors.

3.     An amendment is being proposed to the RBI Act to enable issuance of electoral bonds .A donor can purchase these bonds from banks or post offices through cheque or digital transactions. They can be redeemed only by registered political parties.

Defence sector

The defence sector gets an allocation of Rs. 2.74,114 crore.

Tax proposals

1.     India’s tax to GDP ratio is not favourable.

2.     Out of 13.14 lakh registered companies, only 5.97 lakh firms have filed returns for 2016-17.

3.     Proportion of direct tax to indirect tax is not optimal.

4.     Individuals numbering 1.95 crore showed an income between Rs. 2.5 lakh to Rs. 5 lakh.

5.     Out of 76 lakh individual assessees declaring income more than Rs. 5 lakh, 56 lakh are salaried.

6.     Only 1.72 lakh people showed income of more than Rs. 50 lakh a year.

7.     Between November 8 to December 30, deposits ranging from Rs. 2 lakh and Rs. 80 lakh were made in 1.09 crore accounts.

8.     Net tax revenue of 2013-14 was Rs. 11.38 lakh crore.

9.     Out of 76 lakh individual assessees declaring income more than Rs 5 lakh, 56 lakh are salaried.

10.  1.95 crore individuals showed income between Rs. 2.5 lakh to Rs. 5 lakh.

11.  Rate of growth of advance tax in Personal I-T is 34.8% in the last three quarters of this financial year.

12.  Holding period for long term capital gain lowered to two years

13.  Proposal to have a carry-forward of MAT for 15 years.

14.  Capital gains tax to be exempted for persons holding land from which land was pooled for creation of the state capital of Andhra Pradesh.

15.  Under the corporate tax, in order to make MSME companies more viable, there is a proposal to reduce tax for small companies with a turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. Ninety-six % of companies to get this benefit.

16.  The government proposes to reduce basic customs duty for LNG to 2.5% from 5%.

17.  The Income Tax Act to be amended to ensure that no transaction above Rs 3 lakh is permitted in cash.

18.  The limit of cash donation by charitable trusts is reduced to Rs 2,000 from Rs 10,000.

19.  Net revenue loss in direct tax could be Rs. 20,000 crore.

Personal income tax

1.     Existing rate of tax for individuals between Rs.  2.5- Rs 5 lakh is reduced to 5% from 10%.

2.     All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500.

3.     Simple one page return for people with an annual income of Rs. 5 lakh other than business income.

4.     People filing I-T returns for the first time will not come under any government scrutiny.

5.     Ten % surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore loss due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.

6.         The government on its part has shown confidence in its existing approach and schemes, and has increased allocations in a number of programs in the Union Budget 2017. The next step would clearly be the effective implementation of these schemes, which can potentially help the economy from a structural perspective. Schemes to alleviate skill shortages are likely to also lead to a healthier job market that is in tune with the changing times while increased rural spend is likely to bring about changes at the supply side of the economy.

7.         While there remain challenges on the domestic front such as inflation, and on the international front due to geo-political concerns, the stage set by Union Budget 2017 seems to harbinger a more sustainable growth process, and in turn, headway for our economy.



-The term budget has been derived from the old French word ‘bouquette’ meaning a leather purse.

-The first use of the term budget may date back to the year 1773 financial statements by French President Walpole.

-A cartoon of him opening a patent medicine seller’s wares was published at that time, as a a satirical comment with the caption ‘The Budget Opened’.

-Initially the budget referred solely to the Chancellor’s annual speech on the nation’s finances. Now, the term is used to an annual financial statement of income and expenditure of the govt.

-Budget is the annual financial statement, laid before both the Houses of Parliament constitutes the budget of the Union govt. The budget process of India precedes Independence.

-The budget was first introduced on 7th April, 1860, two years after the transfer of Indian administration from the East-India company to the British crown.

-After independence, India’s first finance minister, Mr R.K Shanmukham Chetty presented the budget on 26th November 1947.

The Budget Process:

-The budget is prepared by the Finance Minister with the assistance of number of advisors and bureaucrats.

-The Finance Minister seeks the view of industry captains and economists prior to preparation. Various accounting and finance related organizations send in their opinions and suggestions.

-The budgeting exercise in India remains mainly the domain of bureaucrats to participate and influence the outcome.

-Normally, the budget-making process starts in the third quarter of the financial year.

-The budget has four stages.


Part A: Estimates of Expenditure

-The process begins with various ministries providing initial estimates of plan and non-planned expenditures. The ministries discuss the plan expenditures with the Planning Commission.

-The Planning Commission allocates resources for continuing plan programmes and decides on the new programmes that can be undertaken on the basis of a tentative estimate or resources available, that is provided to it by the Finance Ministry.

-The financial advisors of the ministries prepare the non-plan expenditures. The expenditures secretary consolidates them and after intensive discussion with the financial advisors, budget estimates are set for ensuring fiscal year.

-The majority of the non-plan expenditures is accounted for by interest payments, subsidies and wage payments to employees.

Part B: Estimates of Revenue

-Apart from estimating the expenditure, an assessment of expected revenues likely to flow into the government treasury has to done as a concurrent exercise.

-Revenue receipts are of two types: capital and concurrent.

-Capital receipts include repayment of loans given by the government, receipts from disinvestment of public-sector equity and borrowings-both external and domestic.

-Current receipts also include tax revenue, receipts by way of dividends from public-sector units and interests payments on loan given out by central government.

STAGE 2: First estimates of Deficit

-After the estimates of revenue and expenditure are made, they are matched together. This provides the first estimate of expected shortfall in revenue to meet projected expenditures.

-The government then, in constitutions with the Chief Economic Advisor, decides on the optimum level of borrowing to meet this deficit.

-The level of domestic borrowing depends partly on the desired level of fiscal deficit that the government targets for itself. A part of the revenue gap is left unfilled through the issue of ad hoc treasury bills.

STAGE 3: Narrowing of the deficit

-After the targets  for the fiscal deficits and the overall budget deficit is decidaed, any remaining shortfall is filled through a revision in tax rates if feasible, keeping in mind the fiscal incentive structure the government wishes to put in place to stimulate the growth in different sectors.

-Following the plans, if any changes need to be made adjustments are made to the expenditure, usually the plan expenditure has to be modified.

-The non-plan expenditure comprises of interest payments, subsidies and administrative expenditure.

STAGE 4: The Budget

-The presentation of the Budget for ensuring fiscal year is usually done on the last working day of the month of February. The Indian Constitution has made the Parliament supreme in financial matters. The Union government, under Article 112 of the constitution is required to lay an annual financial statement of estimated receipts and expenditure before both houses of the Parliament. It can levy taxes or disburse funds on approval in both houses of the parliament.

-The proposals in the budget come into force on April 1st. Between the presentations and effective date there is a gap of 1 month during which the Lok Sabha can review and modify the government’s budget proposals. Since the proposed budget has to be effective from April 1, the government usually sees an interim approval to meet emergent expenditures that have to be incurred pending and approval of the budget.

-This is called the vote-on-account and the sanctions given by the passage of the vote-on-account gets automatically overridden once the Budget is approved by the Parliament.




-The World Bank is an international financial institution that provides loans to developing countries for capital programs.

-It comprises two institutions- The International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA).

-The World Bank is a component of the World Bank Group, which is a part of the United Nations system.

-The World Bank’s stated official goal is the reduction of poverty.


World Bank is playing main role of providing loans for development works to member countries, especially to underdeveloped countries. The World Bank provides long-term loans for various development projects of 5 to 20 years duration.

The main functions are as follows:

-World Bank provides various technical services to the member countries. For this purpose the World Bank has established “The Economic Development Institute” and a staff college in Washington.

-Bank can grant loans to a member country up to 20% of its share in the paid-up capital.

-The quantities of loans, interest rate and terms and conditions are determined by the Bank itself.

-Generally, Bank grants loans for a particular project duly submitted to the Bank by the member country.

The debtor nation has to repay either in reserve currencies or in the currency in which the loan was sanctioned.

-Bank also provides loan to private investors belonging to member countries on its own guarantee, but for this loan private investors have to seek prior permission from those countries where this amount will be collected.


-The Indigenous Knowledge Project has achieved remarkable success in bank-supported projects, building partnerships, increasing capacity through peer-to-peer exchanges and mainstreaming IK in growth.

-The successful implementation of the World Bank Loan Project from 1992 to 2000 on schistosomiasis control.

-Global actions promoted by the bank have helped in combating diseases, such as river blindness and smallpox. Also, new problems, such as the depletion of ozone layer, have been addressed.

Major Achievements:

1)     General Progress:

-The Bank’s membership has increased from the initial number of 30 countries to 68 in 1960 and to 151 countries in 1988.

-The subscribed capital has increased from the initial amount of $10,000 million to $19,300 million in 1960 and further to $91,436 million in 1988.

-In 1960, the Bank approved loans worth $659 million which went up to $14,762  million 1988.

-The disbursement of loans increased from $544 million in 1960 to $11636 million in 1988.


2)     Lending Operations:

-Till June 1988, the IBRD has granted loans worth $155059 million. About 22% of the Banks aggregate lending is for energy, 21% for agriculture and rural development, 18% for transportation and communications and 10% for industry and small scale enterprises.


3)     Term Loans:

-The Bank grants medium and long-term loans for reconstruction and development purposes to the member countries. The actual term of a loan depends upon the estimated useful life of the equipment or plant financed.


4)     Loans for Reconstruction:

-In the initial years of its establishment, the World Bank’s loans were mainly directed to the European countries for financing their programmes of reconstruction. The Bank provided loans worth about $5,00 million for reconstruction purpose.


5)     Traditional Development Loans Policy:

-In 1948, the Bank started paying attention to lending for development purposes. The traditional development loan policy of the Bank has been to help the member nations to strengthen the foundations of their economies for rapid economic development.

-Therefore, the major portion of the Bank’s assistance has gone to finance infrastructure of the borrowing country.

-About half of the loans have been for the development of electric power projects and other half for the development of other sectors, i.e transport, agriculture and industry.


6. New Loan Strategy:

-Recently, however, the Bank has changed its development loan strategy and lays more emphasis of financing schemes which directly influence the well-being of poor masses of the member countries, especially the developing countries.

-the bank’s adoption of the new strategy of ‘development with justice’ has led to the following changes in the sectoral finance

-The amount of agricultural loans has increased more rapidly than any other sector.


7. Assistance to Underdeveloped Countries:

-The World Bank has a special role in accelerating the process of economic and welfare schemes in these countries. The following are the main aspects of Bank’s assistance to the underdeveloped countries:

-Bulk of the Bank’s financial assistance has been given to the underdeveloped countries for the promotion of development.

-Through its “third window”, the bank has made available loans to the underdeveloped countries at tower interest rates.



World Bank failed to protect the poor, research shows Projects funded by the World Bank have displaced more than three million people in the past decade, according to a group of investigative journalists. Activists say the bank needs to upgrade its human rights policies.

-Dams, Power plants, conservation progress and other projects financed by the World Bank have pushed an estimated 3.4 million people out of their homes, off their lands, or threatened their livelihoods.

-Human rights organizations have long criticized the bank for failing to monitor the effects on communities of the programs it sponsors.



The World Bank admitted to “serious shortcomings in the implementation of its resettlement policies’ after it had ordered an internal review of its action.

People search through the rubble of their demolished houses in Lagos after bulldozers destroyed their homes.

“The bank does not really verify the information that has been provided by the borrower. And obviously the borrower has an economic advantage of not presenting the potential problems and the potential negative impact on communities because they want to get the loan. The bank is pushing this loan out the door in a much more rushed way.”

People who rely on farming for their livelihoods struggle if they have to relocate.



Germany – the World Bank’s fourth largest donor – has come forward and said it wants to see priority given to addressing human rights in an appropriate manner – which includes the rights of indigenous people, land rights and greater transparency, as well as including communities in the process.

“Germany can play an important role by ensuring that the World Bank commits to respect human rights.”



“It’s a race to the bottom and that’s why we feel that the World Bank, being a standard-setting institution, should not play that role.”

However, human rights activists remain skeptical. “The ultimate problem is: the bank is an institution that prioritizes economic growth over human rights.”





The World Bank (WB) was originally created as the International Bank for Reconstruction and Development (IBRD) in 1944 along with its twin, the IMF. Together they came to be known as the ‘Bretton Woods’ twin sisters’. When it was set up it was decided that this international bank would assist in the economic reconstruction of the World War II-damaged European economies. In early 1946 this international bank launched its carrier as the multilateral development bank and since then the IBRD came to be known as the World Bank. Its headquarters is located in Washington, opposite the IMF building, and it lies as the next door neighbour of the White House.


Being twin sisters, membership in the IMF is a prerequisite for membership in World Bank (188 countries in May, 2012).

The Bank performs the following functions:

I. To assist in the construction and develop­ment of the territories of its members by facilitating investment of capital for productive purposes, including the ‘restoration of economies destroyed or disrupted by war’, and the encouragement of the “development” of productive facilities and resources in less developed countries.

II. To promote private investment and long run balanced growth of international trade and BOP equilibrium by means of guarantees or partici­pation in international loans and investments.

III. To arrange loans made or guaranteed by it. so that more useful and urgent projects receive preference.

IV. To provide finance to projects from its own capital, funds raised by it and by participating with other members.

In addition, the Bank provides advice and expertise. It now puts more emphasis on institutional technical assistance and infrastructure assistance. Over the years, it has been able to generate and disseminate policy relevant knowledge. Today, it has been concentrating more on this asset rather than financial resources. This organisation is now called the ‘knowledge bank’.


The purposes and objectives are constantly changing. For instance, in the early years, the Bank’s investment concentrated on infrastructural build-up like power, transport, communications and irrigation. During the late 1960s and 1970s, the Bank went on financing agricultural projects more actively—particularly in the promotion of cash crops. However, in the 1980s, agricultural lending declined drastically.

BRICS – Objectives, Summits, Need and Disparities


– BRICS is a acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa

– Originally called as BRIC as South Africa was not included till 2010.

– The term “BRICS” was coined in 2001 by then-chairman of Goldman Sachs Asset Management, Jim O’Neill

– Common characteristics are large, fast-growing economies all developing or newly industrialized countries.

Importance of BRICS

– As of 2014, the five BRICS countries represent almost 3 billion people, or approximately 40% of the world population.

– The five nations have a combined nominal GDP of US$16.039 trillion, equivalent to approximately 20% of the gross world product,

– They have an estimated US$4 trillion in combined foreign reserves.


–        Consensus on improving the global economic situation and reforming financial institutions. BRIC nations announced the need for a new global reserve currency, which would have to be “diversified, stable and predictable”

South Africa officially became a member nation. Iran and nuclear weapons, development, the furtherance of the BRIC as an international body, the global economic situation at the time, reform of financial institutions, the financial G20, and cooperation and issues related to global governance.

Economics, anti-terror law under UN auspices, United Nations Security Council reform, decision to cease mutual trade payments in U.S. dollars and instead henceforth give credits to one another in their national currencies alone.

A proposal to create a joint BRICS development bank that would finance investments in developing nations

Negotiations for setting up the bank.

Creation of two financial institutions: the New Development Bank (NDB) to finance infrastructure and “sustainable development” projects, with $50 billion in capital to start with, and the $100 billion Contingent Reserve Arrangement (CRA), to tide over members in financial difficulties.

Similar objectives shared by BRICS

1. The BRICS countries act as one to promote a more legitimate international system, including advocating reform of the UN Security Council.

2. The BRICS group is a South-South framework for cooperation.

3. The BRICS group also acts as a bridge between developed and developing countries. For example, in the WTO, the BRICS countries are trying to promote a fair order regarding agricultural policies. They are attempting to promote the liberalization of the international economic order to diminish agricultural subsidies in the United States and the European Union, which would make developing countries’ agricultural products more competitive.

4. The BRICS group will also play an increasingly important role in assisting developing countries in gaining an advantage in trade and climate change negotiations, as well as on issues related to the export of manufacturing products.

5. Developing countries on the periphery of the group will be able to leverage the NDB and the CRA to increase their bargaining power.

6. The group established the BRICS Business Council, made up of 25 prominent entrepreneurs from the five countries and representing many industries and economic sectors.

7. The BRICS also formed an information-sharing and exchange platform that expands beyond economic cooperation to also involve educational, cultural, and environmental engagement.

8. They have a shared interest in challenging the current governance of Western financial institutions like the International Monetary Fund and the World Bank for that they have announced the establishment of the bank

9. They will advocate for the interests of middle powers on global forum.

Disparities with BRICS

1. The dominance of China in BRICS is problem for others. The Chinese economy is now not only the second largest in the world but also larger than the economies of all the BRICS together.

2. China’s political aspiration creates a challenges that has made it difficult for it to make consensus.

3. China’s manipulation of its currency has resulted in significant problems for the manufacturing sectors of other emerging powers. Central banks of other countries have registered protest against undervalued yuan

4. There is doubt if BRICS can emerge as a unified political force.

5. BRICS is a loose grouping of countries that share interests in particular areas but that play by different rules. It is not a formal international alliance.

6. It maintains a low profile on security issues. BRICS will never attempt to make the group into a traditional security framework.

7. With the exception of the NDB and the CRA, the BRICS framework has not proven very efficient or substantive.

8. The BRICS have little in common. The Chinese economy is 28 times the size of South Africa’s. Income per person in India is one-tenth that in Russia.

9. Brazil, India, South Africa are democratic countries while Russia, China are authoritarian regimes

10. Russia, Brazil and South Africa export different commodities, while China exports manufactured goods and India exports services.



– New Development Bank will have an initial subscribed capital of $50 billion which will be raised to $100 billion.

– The five members will have an equal share for each in the bank, so no one member dominates the institution.

– Headquarters – Shanghai

– Bank will have African Regional Center in South Africa

– India will assume the first presidency of the bank.

– Chairman of Board of governance will be Russian

– The emergency reserve fund – which was announced as a “Contingency Reserve Arrangement” will also have $100bn and will help developing nations avoid short-term liquidity pressures.

– It will have $41 billion from China, $5 billion from South Africa and $ 18 billion from remaining nations.

Need of a BRICS bank

1. Global financial institutions like IMF and world bank are dominated by U.S and western countries

2. IMF and world bank follows different voting power based on quota system. Though China is second largest economy after U.S it has fewer voting rights.

3. The financial institution created by BRICS will reduce the importance of US dollar as a global currency and eventually it will increase importance of Yuan

4. IMF cash assistance program is conditional. If a country’s foreign policy clashes with US then it will be difficult to obtain a loan.

5. It will provide resources for infrastructure development of developing countries.

Structure and Functions of Asian Development Bank (ADB)!

The Asian Development Bank (ADB) is a multilateral development finance institution whose mission is to reduce poverty in the Asia Pacific region.

Although the ADB claims to operate in the interest of Asia’s poorest citizens, civil society groups have long been concerned about the ADB’s role in promoting sustainable and equitable growth in the region.

The ADB was founded in 1966 with the goal of eradicating poverty in the region. With over 1.9 billion people living on less than $2 a day in Asia, the institution has a formidable challenge.

It plays the following functions for countries in the Asia Pacific region:

i. Provides loans and equity investments to its Developing Member Countries (DMCs)

ii. Provides technical assistance for the planning and execution of development projects and programs and for advisory services

iii. Promotes and facilitates investment of public and private capital for development

iv. Assists in coordinating development policies and plans of its DMCs

Though well-intentioned, ADB-funded operations have been responsible for causing widespread environmental and social damage, adversely affecting some of the regions poorest and most vulnerable communities.

Though publicly financed by taxpayer dollars, ADB activities (and those of other multilateral development banks) are often carried out without the informed participation of affected people, Non- Governmental Organizations (NGOs), or, in many cases, the elected officials in the borrowing countries.

A global movement to reform the ADBs has based its activities on the assumption that sustainable development and poverty alleviation are impossible without informed public participation in the decision making process.

Civil society concerns with the ADB include:

i. Access to information about the ADB’s operations

ii. Public participation in the design, implementation, monitoring and evaluation of ADB projects

iii. The social and environmental impacts of ADB programs and projects and the Bank’s accountability for those impacts

iv. The ADB’s private sector lending

v. The ADB’s role in regional and sub-regional economic cooperation

The Bank Information Center, in collaboration with its partners, works toward democratizing the ADB so that social and environmental considerations are incorporated in the Banks’ decision making processes and operations.

ADB’s Vision – An Asia and Pacific Free of Poverty:

ADB is an international development finance institution whose mission is to help its developing member countries reduce poverty and improve the quality of life of their people.

Headquartered in Manila and established in 1966, ADB is owned and financed by its 67 members, of whom 48 are from the region and 19 are from other parts of the globe. ADB’s main partners are governments, the private sector, non-government organizations, development agencies, community- based organizations and foundations.

Under Strategy 2020, a long-term strategic framework adopted in 2008, ADB will follow three complementary strategic agendas: inclusive growth, environmentally sustainable growth and regional integration.

In pursuing its vision, ADB’s main instruments comprise loans, technical assistance, grants, advice and knowledge. Although most lending is in the public sector and to governments ADB also provides direct assistance to private enterprises of developing countries through equity investments, guarantees and loans. In addition, its triple-A credit rating helps mobilize funds for development.


From 31 members at its establishment in 1966, ADB has grown to encompass 67 members of which 48 are from within the Asia and Pacific region and 19 outside. Georgia is the 67th and newest member, having joined ADB effective 2 February 2007.

Organization Structure:

The highest decision making tier at ADB is its Board of Governors, to which each of ADB’s 67 members nominate one Governor and an Alternate Governor to represent them. The Board of Governors meets formally once a year at an Annual Meeting held in a member country.

The Governors’ day to day responsibilities are largely delegated to the 12-person Board of Directors, which performs its duties full time at ADB’s Head Quarters in Manila.

The ADB President, under the Board’s direction, conducts the business of ADB. The President is elected by the Board of Governors for a term of five years and may be re-elected.


The President is Chairperson of the Board of Directors and under the Board’s direction conducts the business of ADB. He is responsible for the organization, appointment and dismissal of the officers and staff in accordance with regulations adopted by the Board of Directors. The President is elected by the Board of Governors for a term of five years and may be reelected. He is also the legal representative of ADB.

On 17 April 2006, the Board of Directors approved the recommendation on the reassignment of the functions and duties of the operations vice presidents. The President has also approved the structure of the four realigned regional departments, effective 1 May 2006.

The President now heads a management team comprising four Vice-Presidents and the Managing Director General, who supervise the work of ADB’s operational, administrative and knowledge departments.

History of ADB:

ADB was conceived amid the postwar rehabilitation and reconstruction of the early 1960s. The vision was of a financial institution that would be Asian in character and foster economic growth and cooperation in the region then one of the poorest in the world.

A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East in 1963, set that vision on the way to becoming reality.

The Philippines capital of Manila was chosen to host the new institution, the Asian Development Bank which opened on 19 December 1966, with 31 members to serve a predominantly agricultural region. Takeshi Watanabe was the first President.

For the rest of the 1960s, ADB focused much of its assistance on food production and rural development. The next three years saw ADB’s first technical assistance, loans (including a first on concessional terms in 1969) and bond issue (in Germany).

In 1970s:

Assistance expanded in the 1970s into education and health and then to infrastructure and industry. The gradual emergence of Asian economies in the late 1970s spurred demand for better infrastructure to support economic growth. ADB focused on improving roads and providing electricity.

When the world suffered its first oil price shock, ADB shifted more of its assistance to support energy projects, especially those promoting the development of domestic energy sources in member countries.

Co-financing operations began to provide additional resources for ADB projects and programs. 1970 saw ADB’s first bond issue in Asia worth $16.7 million in Japan.

A major landmark was the establishment in 1974, of the Asian Development Fund to provide concessional lending to ADB’s poorest members.

At the close of the decade, some Asian economies had improved considerably and graduated from ADB’s regular assistance.

In 1980s:

It was also becoming clear that the private sector was an important ally in driving growth. ADB thus in the 1980s made its first direct equity investment. ADB also began to use its track record to mobilize additional resources for development from the private sector.

In the wake of the second oil crisis, ADB continued its support in the 1980s to infrastructure development, particularly energy projects. ADB also increased its support to social infrastructure, including gender, microfinance, environmental, education, urban planning and health issues.

In 1982, ADB opened its first field office, a Resident Mission in Bangladesh to bring operations closer to their intended beneficiaries. Later in the decade, ADB approved a policy supporting collaboration with non-government organizations to address the basic needs of disadvantaged groups in its developing member countries.

In 1990s:

The start of the 1990s saw ADB begin promoting regional cooperation, forging close ties among neighboring countries through an economic cooperation program.

In 1995, ADB became the first multilateral organization to have a Board-approved governance policy to ensure that development assistance fully benefits the poor. Policies on the inspection function, involuntary resettlement and indigenous peoples designed to protect the rights of people affected by a project were also approved.

ADB’s membership, meanwhile, continued to expand, with the addition of several Central Asian countries following the end of the Cold War.

But in mid-1997, a severe financial crisis hit the region, setting back Asia’s spectacular economic gains. ADB responded with projects and programs to strengthen financial sectors and create social safety nets for the poor. ADB approved its largest single loan-a $4 billion emergency loan to the Republic of Korea and established the Asian Currency Crisis Support Facility to accelerate assistance.

A milestone came in 1999 when, recognizing that development was still bypassing so many in the region, ADB adopted poverty reduction as its overarching goal.

Into the 21st Century:

The new century brought hope and tragedy, as well as a new focus on helping its developing members achieve the Millennium Development Goals and to enhance development effectiveness.

In 2003 saw severe acute respiratory syndrome (SARS) hit the region, making it clear that fighting infectious diseases was a public good that required regional cooperation. ADB began providing support at national and regional levels to help countries more effectively respond to HIV/AIDS and the growing threat of.

ADB had to respond to other unprecedented natural disasters, committing more than $850 million for recovery in areas of India, Indonesia, Maldives and Sri Lanka hit by the Asian tsunami disaster of December 2004 and a $1 billion line of assistance to help victims of the October 2005 earthquake in Pakistan.

As 2007 drew to a close, ADB celebrated 41 years of fruitful cooperation with the governments and peoples of the Asia and Pacific region, looking back on phenomenal economic growth in the region alongside abiding development challenges.

Now in 2008, it is looking to the future with its Strategy 2020 that will determine the organization’s future direction and vision for the next dozen years.


Dynamic economic development has substantially helped reduce poverty in Asia and the Pacific. Despite some spectacular progress over the last few decades, the region remains home to two thirds of the worlds poor. The number of people living in absolute poverty remains high at 903 million (2005).

While growth between 2005 and 2008 has further reduced poverty, the food and fuel price crisis in 2008 and the global recession starting 2009 has slowed down progress in poverty reduction substantively.

The region’s economic growth has been accompanied by widening disparities both within and between countries. Such disparities, together with climate change and the mounting environmental costs of growth, threaten to undermine the region’s development and stability. Partner governments therefore, emphasize the need to make growth and social development in the region more inclusive.

To fulfill its mission and realize its vision of an Asia and Pacific free of poverty, ADB will follow three complementary strategic agendas, as set out in Strategy 2020, ADB’s long-term strategic framework: inclusive growth, environmentally sustainable growth and regional integration.

Inclusive growth and social development, addressing the environments of the poor and ensuring that the vulnerable and poor benefit from regional integration are ADB’s specific contributions to poverty reduction in the Asia-Pacific region.

In this context, it will focus on five core areas of operation:

i. Infrastructure

ii. Environment, including climate change

iii. Regional Cooperation and Integration

iv. Finance Sector Development

v. Education

ADB will continue to operate on a more selective basis in health, agriculture and disaster and emergency assistance.

ADB will focus its efforts on five drivers of change in the region:

i. Private sector development and private sector operations

ii. Good governance and capacity development

iii. Gender equity

iv. Knowledge solutions

v. Partnerships


ADB works in partnership with governments and public and private enterprises in its developing member countries on projects and programs that will contribute to economic and social development, based on the country’s needs and priorities.

In 2008, ADB approved loans worth $10.5 billion for 86 projects, most of which went to the public sector. Technical assistance, which is used to prepare and implement projects and support advisory and regional activities, amounted to $274 million. Grant-financed projects totaled $811 million.

Projects and Programs:

In the past 40 years, ADB has supported projects in agriculture and natural resources, energy, finance, industry and non-fuel minerals, social infrastructure and transport and communications. More than half of ADB’s assistance has gone into building infrastructure – roads, airports, power plants and water and sanitation facilities. Such infrastructure helps lay the foundation for commerce and economic growth and makes essential services accessible to the poor.

Countries with limited debt repayment capacity in the region receive additional help through the Asian Development Fund (ADF), set up in 1973, to provide grants and low-interest loans.

Since 2000, ADF has helped build 38,000 schools and build or improve 6,700 health facilities. It has helped provide over 200,000 safe water connections; irrigate more than 300,000 hectares of land; and build or rehabilitate 42,000 kilometers of roads. ADB is quick to help when catastrophe strikes. It provides assistance in the wake of natural disasters, such as earthquakes and landslides, as well as in post-conflict situations.

Assistance to its developing member countries creates an enabling environment for private sector development. ADB also directly finances private sector projects to assist commercial investors and lenders. ADB has a triple-A credit rating and actively mobilizes financial resources through its co­-financing operations, tapping official, commercial and export credit sources.


ADB consults people from all sections of society to ensure that its projects, programs and strategies address their needs. The Country Partnership Strategy (formerly Country Strategy and Program), the main planning document at the country level, emphasizes consultations with the government, the private sector, civil society and all project stakeholders.

The strategy functions as a business plan composed of individual loan and technical assistance projects and programs planned for priority sectors and themes.

To ensure coherence over a wider geographical area, Regional Cooperation Strategies and Programs are prepared for the five sub-regions covered by ADB’s regional operations.

The various stages that a project undergoes in its planning and execution from country programming to project completion and evaluation is collectively known as ADB’s project cycle.

Financial Resources:

Carrying a triple-A credit rating, ADB raises funds through bond issues on the world’s capital markets. It also utilizes its members’ contributions and retained earnings from lending operations. These sources comprise ADB’s ordinary capital resources and account for 74.1% of lending to ADB’s developing member countries.

Loans are also provided from Special Funds Resources financed mostly from contributions of donor members for ADB’s concessional loan and technical assistance programs.

How ADB’s Assistance is financed:

Ordinary Capital Resources (OCR):

These are a collection of funds available for ADB’s lending operations, replenished by borrowings from the world’s capital markets. OCR loans are offered at near market terms to better-off borrowing countries.

Asian Development Fund (ADF):

Funded by ADB’s donor member countries, ADF offers loans at very low interest rates and grants that help reduce poverty in ADB’s poorest borrowing countries.

Technical Assistance (ТА):

Assists countries in identifying and designing projects, improving institutions, formulating development strategies, or fostering regional cooperation. ТА can be financed by grants, or more rarely loans through ADB’s central budget or a number of special lands provided by ADB’s donor members.

Innovation and Efficiency Initiative (IEI):

Financing Instruments and Modalities. In 2005, new financing instruments and modalities were introduced under the IEI. These new financing instruments are intended to provide ADB clients and operational teams with additional alternatives to help finance development projects.


-Commercial banks in India have been playing a very important role in the process of development due to their modern organization and functioning huge funds and wide network all over the country.

-As per the McKinsey report titled “India Banking 2010” the banking sector index  has grown over 50% CAGR since the year 2001, as compared to a 27% growth in the market index during the same period.

-Commercial banks are considered not merely as dealers in money but also the leaders in economic development.

-They are not only the store houses of the country’s wealth but also the reservoirs of resources necessary for economic development.

-They play an important role in the economic development of a country. A well-developed banking system is essential for the economic development of a country.

-In case of developing countries like India, the commercial banks are considered to be the backbone of the economy.

-Commercial banks can contribute to a country’s economic development in the following ways:

Accelerating the rate of capital formation:

Capital formation is the most important determinant of eco development. The basic problem of a developing eco is a slow rate of capital formation. Banks promote capital formation. They encourage the habit of saving among people. They mobilize idle resources for production purposes. Ecoomic development depends upon the diversion of eco resources from consumption to capital formation. Banks help in this direction by encouraging saving and mobilizing them for productive uses.

Provision of finance and credit:

Commercial banks are a very important source of finance and credit for industry and trade. Credit is a pillar of development. Credit lubricates all commerce and trade. Banks become the nerve center of all commerce and trade.

Monetisation of Economy:

An underdeveloped eco is characterized by the existence of a large non-monetized sector. The existence of this non-monetized sector is a hindrance in the eco development of the country.


Innovations are an essential prerequisite for eco development. These innovations are mostly financed by bank credit in the developed counties. Facilities of bank loans enable the entrepreneurs to step up their investment on innovational activities, adopt new methods of production and increase productive capacity of the eco.

Implementation of monetary policy:

Eco development needs an appropriate monetary policy. But a well developed banking is a necessary pre-condition for the effective implementation of the monetary policy. Control and regulation of credit by the monetary authority is not possible without the active co-operation of the banking system in the country.

Encouragement to right type of industries:

Banks generally provide financial resources to the right type of industries to secure the necessary material, machines and other inputs. In this way they influence the nature and volume of industrial production.

Development of Agriculture:

Underdeveloped economies are primarily agricultural economies. Majority of the population in these economies live in rural areas. Therefore, eco development in these economies requires the development of agriculture and small scale industries in rural areas. So far in underdeveloped countries have been paying more attention to trade and commerce and have almost neglected agriculture and industry.

In recent years, the State Bank of India and other commercial banks are granting short term, medium term and long term loans to agriculture and small scale industries.

Promote Industrial Development:

Industrial development needs finance. In some countries, commercial banks encouraged industrial development by granting long term loans also, Loan or credit is a pillar to development.

In developing countries like India, commercial banks are granting short term and medium term loans to industries. They are also underwriting the issue of shares and debentures by industrial concerns. This helps industrial concerns to secure adequate capital for their establishment, expansion and modernization.

Commercial banks are also helping manufacturers to secure machinery and equipment from foreign countries under instalment system by guaranteeing deferred payments.

Fulfilment of Socio-economic objectives:

In recent years, commercial banks particularly in developing countries, have been called upon to help achieve certain socio-economic objectives laid down by the state.

For example, nationalised bank in India have framed special innovative schemes of credit to help small agriculturists, self employed persons and retailers through loans and advances at concessional rates of interest.


Banking is thus used to achieve the national policy objectives of reducing inequalities of income and wealth, removal of poverty and elimination of unemployment in the country.

Thus, banks in a developing country have to play a dynamic role. Eco development places heavy demand on the resources and ingenuity of the banking system. It has to respond to the multifarious eco needs of a developing country. Traditional views and methods may have to be discarded.


Satyam Computers has been one of the major contributor to IT revolution is India. Till now a company which had been fourth largest Software Company of India came to ground on January 7, 2008 with its chairman Ramalinga Raju conceding that he has systematically fudged the accounts of the company. Cash and bank balance as reflected in the accounts, actually does not exist. According to a rough estimate total fraud is to the tune of around 8000 crores.

Keeping in view the interest of the investors, employees and the IT sector at large, government recently reconstituted the board of Satyam Computers, with a view to control the damage. It has even decided to give away a package to revitalize the company starving of funds to even pay the salary of its 51000 employees.

When this fraud was brought to light by Satyam’s chairman himself, the price of the share tumbled by about 80 per cent in a day. In the international market, price of its ADR depreciated by 90 per cent and its trading was forbidden forthwith. Government has even ordered an enquiry into the affairs of 8 group companies of Satyam. SEBI, Company Law Board and Institute of Chartered Accountants of India have also initiated their enquiries on their own.. But this is a fact that shareholders net worth has been eroded by thousands of crores and 51000 of workers are at the verge of losing their livelihood, exchequer and the economy would he at a great loss.


But real question is much different and pertinent. Satyam fraud may be first of its kind in India, but not the first such fraud of the world, where fraud was given effect by forging the books of accounts. Enron an American company did exactly the same. In that case auditors were named as one of the main culprits. CEO of the company is serving 24 years of imprisonment, but at the same time auditing company Arthur Anderson has lost its existence world over after the incident. In the present scam auditing company is Price Waterhouse Cooper. Experts believe that the company could not have done a fraud of this magnitude without the connivance of the auditors. Price Waterhouse Cooper is also escaping to speak on the issue.

Fact is that when Satyam was fudging its accounts in, the auditing company was certifying these accounts to be correct. Auditor is obliged to minutely inspect each and every transaction of a firm and certify the same to be correct and as per rules. These certified account statements are then sent to the shareholders. Thus we can say that fraud has not been committed by Ramalinga Raju alone, auditing company must also have been fully involved in the same. It is worth noting that Price Waterhouse Cooper, auditing firm of Global Trust Bank (USA) also, is facing legal proceeding in the case of not only certifying fudged accounts of the bank but also giving it a good rating.


Constituted under the Act of Parliament, Security Exchange Board of India (SEBI) is a regulatory body of Indian share and bond markets. It is expected from SEBI that no company or broker is allowed to act against the interests of the shareholder. In fact existence of a regulator gives a confidence amongst the stakeholders in that sector. Existence of SEBI naturally gives a confidence to the investors in the share markets. But this regulating agency has failed at various occasions. Thousands of companies vanished eating away lakhs of crores of rupees of investors and SEBI could not do any thing. Sometimes tiny cases of insider trading by companies are investigated by SEBI, fraud of lakhs of crores of rupees gets easily escaped from its scanners. Recently a company made Initial Public Offer (IPO) and lakhs of crores of application money which should have gone to an independent agency went into the accounts of the company and SEBI could not even issue a clarification in this regard.

All or any information regarding all transactions of a company, issue of capital, sale-purchase of shares in either available with SEBI or it could be asked for by it. Then why SEBI could not get a clue about such a big fraud. We should not conclude that fault lies with the officers of SEBI. Perhaps constitution of SEBI as provided by the Act of the Parliament itself forbids SEBI to proactively act against defaulting parties.

Learning lesson from the present case and to avoid repetition of such incidents, there is a need to make government’s audit compulsory for all big private sector companies on lines of public sector companies. We know that strict auditing of public sector companies by Comptroller and Auditor General of India (CAG) has been reason why there has never been any big scam in public sector companies.

Secondly there is a need to examine the constitution and functioning of SEBI and make suitable changes wherever needed to enable SEBI to meaningfully discharge its duty as a regulator in the stock market.

All multinational and Indian auditing companies which are found to be indulged in fraud in any part of the world, should be placed under the scanner and their acts be investigated in India . This world be a proactive step in the interest of the nation at large.




Journalism: Before and After (The Changing Trends and the New Definition of ‘News’)

Posted on 23 April 2010 by BMMBoxer

Everything changes at a very fast pace in this busy and happening world. And what happens when the source of all our news i.e. media too redefines itself. Journalism, which was once about sincerely penning your thoughts and letting people know what’s happening in various parts of the world, is now about creating news rather than investigating news.

It’s a revolution in media industry that first came through the cable television, then satellite and now online versions of newspapers is augmenting the news media scene. In olden times, news was that which came from newspapers or word of mouth. Today the term ‘news’ is not just about informing, but also about doing it fast, effectively and also analyzing it for Gen X. Being in the eye of public domain has created a tremendous pressure on the publication as well as news channels.

With various multimedia options – from streaming video online to downloadable applications, blogs and mobile alerts, the options are varied for today’s reader. Journalists are working harder than ever to cater to their readers. From live reporting, interviewing, analyzing the facts to the digitalization of news on blogs and official websites, the job is easier said than done. Journalists who want to set their articles apart as truthful and comprehensive have began giving public access to their sources.

Playing an active role in the process of collecting , reporting, analyzing, and disseminating news and other information was the definition of journalism in olden times. Today it is defined as – Revelation , current events, gossip, new information, imparting facts. There is no ‘News’ anymore rather just about anything is news today.

E.g. Famous bollywood actress Aishwarya Rai’s marriage controversy or we can say a tea-gossip that Ms. Rai will change her name after marriage was unbelievable. To some extent it may be news for entertainment and gossip lovers , however television channels carried 30 minutes slot in this very subject.

The media ecology, with its additional agency of interactivity, democracy and with a new domain of bloggers and citizen reporters has extended the medium to further discuss a set of issues and opportunities that extend beyond familiar boundaries. The news business and political journalism have now experienced such incredible changes as specialized news, financial news and sports 24- hour cable satellite service.

Today social media has also changed journalism. It’s an extension of those practices which are now an essential component of any news organizations strategy. However , an increase in competition has also led organizations to distinguish themselves from less responsible outlets by being more transparent about how they do their work. Due to all this newsmakers face increasing competition to cover all the pertinent stories and reach sources before their competitors . The biggest change which has occurred is increased involvement of the audience , which has morphed from the occasional letter in to an active citizen participating in polls and giving feedback through emails.

Understanding online journalism, impact of technology on journalism, journalism in digital age, print media v\s television media are some of the terms that define modern journalism.

The basic rule of good journalism is- “ Tell the story right, tell it well,” or “ If you cant be funny, then be interesting.”




There’s a separate division in the Ministry of Finance to look after the preparation of the Budget. It’s major functions include the following:

  • Overall responsibility of consolidating, finalising and printing of General Budget documents, Supplementary and Excess Demands for Grants and Parliamentary business connected therewith
  • Provisioning of funds for expenditure by Ministries/Departments
  • Monitoring of the Ways & Means position, Market borrowing programme of Central and State Governments and Government guaranteed Institutions
  • National Savings Institute and Small Savings Schemes
  • Finance Commission, Budgets of States under President’s Rule, Consent for borrowing of States under Article 293 of the Constitution, Release of share in Central taxes and Ways & Means
  • Advances to States, State reorganisation matters
  • Audit & Accounts matters
  • Government guarantees
  • Non-tax receipts of Government
  • Resources for Annual and 5 year Plans
  • Contingency Fund of India
  • Investment pattern of non-Government Provident Funds & Pension Funds
  • Fixation of terms & conditions including interest rates on Central Government’s lending
  • Railway Convention Committee, Parliamentary Consultative Committee, Estimates Committee, Parliamentary Standing Committee on Finance, Public Accounts Committee
  • Performance Budget
  • Treasurer, Charitable Endowments of India

Niche Magazine and Journalism

Definition of Magazines

A magazine is a periodical (weekly, bimonthly, monthly, biannual, annual) paperback publication containing articles that may cover either general areas or a particular subject or area of interest.


These articles are normally accompanied by illustrations and advertisements.

Although magazines normally refer to magazines in the print form, a magazine can also be defined as regular TV, Radio, Internet programs comprising of news or infotainment.

The magazine can be current and/or can have information of historical relevance as well.

The journalistic style that is normally followed by magazines is that of feature and opinion.



Classification of Magazines

Magazines can be broadly classified into three categories:

i.                  News Magazines

ii.                General Interest Magazines

iii.               Special Interest Magazines


i.                  News / News based Magazines basically deal with the latest news, news which may not be recent, but is newsworthy. It also deals with news analysis, which may take the form of any kind of feature.

ii.                Magazines of General Interest are not essentially news-based, but include features on a range of subjects and cover a variety of topics under each subject. They include a little bit of everything for everybody.

iii.               Special Interest / Niche Magazines are those magazines which cater to a specific interest. It can also be classified as niche. Classification for niche can also be made on the basis of age, gender, geographical location, profession / trade and hobbies. Niche magazines cater to a select audience who already have an interest and/or a degree of knowledge on the same. Niche magazines can also attract a new audience of readers, depending on the type of magazine it is.



A Brief history of Magazine Journalism

1665: The origination of magazine journalism can be found as far dated back as 1665 in France from a magazine called Journal des Scavans, edited by Sieur de Hedouville.


1700s: The first magazines looked like books, wherein literate men expounded their points of view in the form of essays / satire. Daniel Defoe started the first English language magazine The Review.


1883: Until the 1880s, only the upper classes read magazines, they were considered much too expensive for the lower classes. At this point in time, publishers were trying to appeal to the new publicly-educated, industrial-urban lower-middle-class by decreasing the prices of their magazines. Thus, 1883 is considered the birth year of mass media.


1890: Ad agencies started in 1890. They developed research and circulation boosting- the subscription discount offers, the efforts to survey a magazine readership to document their demographics for potential advertisers.


1890-1930: Before the turn of the century, even the most popular magazines carried only a small amount of what we call classified advertising and almost no large display ads.


1920s and 30s: Dadaist magazines combined the styles of high-class soapbox magazines with the more pedestrian magazines.


Post 1930s: While few magazines changed their editorial viewpoint directly because of advertising pressure, there were subtle changes in content from the beginning. This trend continues even today.


Magazine Formats

According to Art Kleiner, formats can be defined as follows:

Formats are the grammars through which creative artists and journalists (verbal and visual) can quickly and effectively make sense of the world. Formats are often denigrated as “genres” and “formulas” (which are indeed kinds of formats) but they play a pivotal role in making media meaningful and viable.


The factors to be considered while planning the formats of a magazine are:

1. Demographics. 2. Psychographics. 3. Typography. 4. Pictures, illustrations, graphics. 5. Content.

6. Page make-up 7. Advertisements. 8. Current Design Trends. 9. Genre.


Formats can be classified as: a. External formats b. Internal Formats


a. External formats in a print magazine include:

The size and shape- We can have print magazines in the regular A4 book form, in the tabloid form or the broadsheet form or in the digest form.


Back and front

cover- The front and back covers will include the name of the publication, the price, the places where the magazine is for sale, the edition (subscriber’s copy or newsstand), the name of the publisher, the registration number of the publication, colour / full page advertisements.


By and large, there aren’t too many changes that take place in the external format of a magazine as it is a fairly expensive proposition.


b. Internal formats in a print magazine include:

The internal format of a print magazine would include the following aspects-


The content page includes the name of the chief editor, the editorial board information, names of the correspondents, photographers, owner of the magazine, circulation and centres where the magazine is published and the contents of the magazine.


This is followed by the editorial page, normally considered the first page of the magazine.

The next page is normally a feedback page where the readers write to the editor with their views and opinions as regards the coverage of the story or the story itself, which is then followed by the cover story of that issue.


Standard content in a general interest or news magazine may include milestones, quotable quotes, columns by regular contributors, guest columns, debates, culture reviews and contests.

Space must be left for illustrations/photographs and graphics.

Space must also be provided for advertisements depending on the rates that the advertisers are willing to pay. Sometimes, provision can also be made for an advertorial (a feature consisting of advertisements for an industry/location).

The entire content can be presented in columns (vertically) or horizontally.


Radio and TV magazines have more of a theme-based format. There are regular news-based magazines on both these media that have regular contents and style.


Internet magazines are similar to print magazines, except that they don’t have an external cover and may not have an editorial. They have hyperlinks that may provide archival information, related stories or the source for the story.



Developmental Journalism

Any socio-economic issue, which may be dealt with at any level in society starting from the grass-roots and moving upward falls under the purview of developmental journalism.


Developmental issues exist not only in developing nations, but in developed nations as well. However, the issues among developing nations differ from the issues that exist in developed nations.


Developmental Journalism does not merely highlight the issue at hand but finds solutions to it as well. There may be just one issue or related multiple issues that are covered under developmental writing.


Developmental journalism has borrowed ideas from various disciplines and integrated them in a manner that is suitable to the situation.


Developmental Journalism has come of age today because of people who have studied developmental problems in great detail and are in a position to offer suggestions and advise other organisations and nations, which may be dealing with similar issues.


With the advent of Globalisation, developmental journalism has not just come of age, but has transcended ideologies, geographical boundaries and social values.

Issues that are covered under developmental journalism include:

1.      Any issue of civic interest

2.      Environmental issues

3.      Social issues

4.      Basically any issue that stagnates the development of an individual or a group of individuals



Sports Journalism

Sports journalism covers all sports events, including local level right up to world events. The category of Sports includes:

  1. Track and Field
  2. Aquatic
  3. Gymnastics
  4. Ball games
  5. Racquet events
  6. Indoor games
  7. Equestrian
  8. Sports medicine
  9. Ethics in sports


Sports journalism also includes personalities, fitness, rehabilitation, performance enhancing drugs, etc. It also includes articles on new regulations, new sports, improved techniques in sports and sports equipment as well as events conducted to raise awareness about social causes.



Health Journalism

WHO defines health as “physical, mental and emotional well-being of an individual.”  Health can be categorised into a variety of areas dealing with physical illness and mental illness on the basis of age (newborns to senior citizens), gender (male/female) and based on different areas of specialization depending on various parts of the body (neurology to orthopaedics). Illnesses could be seasonal (jaundice, gastro) or it could be based on lifestyles (obesity, diabetes, and hypertension).

Under health journalism, we don’t just talk about problems; we talk about solutions to these problems. We cover alternative schools of medicine such as Ayurveda, homoeopathy, unani and siddha as well as alternative therapies ranging from aromatherapy to water therapy.



Lifestyle Journalism

Lifestyle covers trends in personal fashion, home and living as well as lifestyles of the rich and the famous.




This covers anything from films to eating out, theme parks, theatre, books and music.



Women’s Magazines

Women’s Magazines cover a number of issues ranging from Current affairs to contemporary women’s issues and how they should be dealt with. Women’s magazines are one of the oldest niche areas. Women’s magazines remain as one of the most popular magazines even today.



There are different issues that concern s pertaining to Women, especially today’s woman. Right from Dowry to harassment at the workplace; to rights of Women to dealing with Financial matters, the concerns are many and need to be tackled effectively.


There is a section of Women’s magazine which not glamorous but deal with serious issues pertaining to Women. One of the pioneers of this genre is the magazine titled ‘Manushi’.


It is interesting to understand that Women’s magazines in the Indian Regional languages give their English counterparts a run for the money. The content, style, presentation, advertisements, layout are contemporary and what’s more they are available online that the NRI audience is captivated with the information.









 Western Ghats

Dense mist floats about every now and then, its ethereal, amorphous form as if pulled on all sides by some magical force, to reveal a sparkling clarity to the wet air. What appear like stars descended on earth are but the sparkle of fireflies along hill roads, as the hum of silvery waterfalls, the chorus of amphibians and the melody of crickets enhances the magic.

I could very well have penned those words in a diary had I the slightest hint of what lay in store for a 9-year-old. Back in the monsoon of 1971 that had been my first ever journey through lush verdure outside of the backyard wilderness of my suburban Mumbai home and it took me through the Sahyadri Hills, having joined an uncle on a drive to Pune.

I later learnt that those hills we had climbed earlier that morning to reach a vast plateau atop was also called Western Ghats. Almost every image of that journey seems so fresh in the mind’s eye. Perhaps that’s the power and allure of nature that ensures her memories never fade. I have since made scores of trips along the length of these mountains and experienced just how extensive and ecologically profuse India’s second most formidable mountain system really is-an absolute biogeographic zone, no less.

The Western Ghats are not one mountain but more like a cluster of ranges, especially in their southern spread where numerous lesser ranges branch from the main mountain-mass, like a candelabra. The Agastyamalais or Ashambus, Annamalais, Brahmagiris, Cardamom Hills, Nelliampattis, Nilgiris, Palanis, Satyamangalam, and the Wayanad Hills-what an unbridled realm, this labyrinth of mountain ranges in southern Karnataka, Kerala, and extreme western Tamil Nadu.

With a length of nearly 1,500 km north to south, from South Gujarat to the nearextreme of Kerala and Tamilnadu, the WG is a narrow, near continuous mountain system save for a unique 30 km break, the Palakkad Gap. Together with the Malabar Plains, this zone covers just over 4 per cent of India’s geographical area. Several major rivers originate in these mountains that also nurture these waters.

Most are shortflowing raging torrents that rush down the steep western slopes and the narrow plains into the Arabian Sea, resulting in some spectacular waterfalls in their short seaward runs. And several key rivers like Krishna, Godavari and Cauvery that originate in these mountains as tiny trickles actually flow right across the Deccan plateau for over a 1,000 km to drain into the Bay of Bengal.

Over 5,000 species of India’s flowering plants exist here, as do more than 550 species of birds and nearly 130 mammals, some 175 of amphibians (frogs, toads), besides several thousand of other life forms. There is a very high degree of endemism (species not found anywhere else) observed in the Western Ghats. This includes 1,800 species of flowering plants, over 125 amphibians, 27 birds, and numerous reptiles, fish and insects.

Interestingly also, these mountains have, along their entire length, an intimate and integral link with the narrow strip of the verdant Malabar Plains, that are the Konkan in the north, Kanara in the central region of Karnataka, and Malabar further south. As the human population in these mountains has risen with more and more settlements and changing land-use, as the blitzkrieg of uncontrolled tourism has bulldozed across the charms of more and more hill sites, as more and more dams and reservoirs began cropping up once the hydel and irrigation potential of these mountains and hill-streams for the drought-prone, higly populous lowlands was strongly realised, well some of the change was predictable.

Though, it is the scale and speed of this contemporary developmental blitz that has raised serious local, national and international concern, because the Western Ghats, quite simply, are amongst the world’s biodiversity hotspots.




The Western Ghats, a UNESCO site since 2012, sustain livelihoods of about 50 million of the 1 billion people in India. Except the Indo-Malayan region, no other biodiversity hotspot impacts so many. Historically, well-covered in forests providing food and natural habitat for its natives, inaccessibility made it difficult for the plainsmen to cultivate and construct. The British cleared territories for plantations (tea, coffee, rubber, eucalyptus, teak) affecting species. Increasing population stressed protected area fringes from loggers and illegal poachers. Human-wildlife conflict, elephants raiding crops, leopards killing livestock, grazing cattle causing erosion and deforestation for reservoirs, roads and railways are common. Presently, 20% of the pristine cover has forests above 200 km² (Cardamom Hills and Silent Valley). Elsewhere, are pressures from hunting, extraction of fuels, non-timber products and uncontrolled tourism.

The Western Ghats or Sahyadri run parallel to the coastal plain (Konkan) along the Arabian Sea, about 30-50 km inland India. Covering 160,000 km², it stretches N-S for 1,600 km from the southern tip of Tamil Nadu onto Kerala, Karnataka, Goa, Maharashtra and Gujarat.

Older then the Himalayas, the Great Escarpment is the faulted edge of the Deccan Plateau formed during the Gondwana super-continent’s breakup, 150 million years ago. Their Outstanding Universal Value is manifested in its unique and fascinating influence on large-scale biophysical and ecological processes on the peninsula.

The Ghats (1,200 m) intercept the moisture laden, south-westerly, tropical monsoon winds causing 3,000-4,000 mm rainfall on the western, windward slopes (June-Sept.). Dense forests act as a substrate for condensation of sea winds by releasing moisture via transpiration and condensing to rainfall.

Climate varies with altitude – humid and tropical in the lower reaches and temperate with frosts and sub-zero temperatures in higher elevations (1,500-2,000 m) in the Matheran, Lonavala, Mahabaleshwar, Kudremukh, Kodagu and Munnar hill stations.

The Western Ghats form the catchment of a riverine system draining almost 40% of India through some of the biggest perennial rivers – Godavari, Krishna and Kaveri flow /east (Bay of Bengal) and the Periyar, Netravathi, Mandovi and Zuari into the Arabian Sea. The steep gradient forms waterfalls (Jog, Sivasamudram) while the slopes make sites for hydro-electric projects (Koyna, Parambikulam, Idukki).

Dams provide supply for drinking water and irrigation. Ooty, Kodaikanal and Pookode lakes attract tourists for scenery, boating and fishing. Rainfall and terrain variations make the Ghats biologically diverse. Scrub forests dominate low-lying, rain shadows. Moist deciduous forests and tropical evergreen rainforests exist elsewhere. Above 1,500 m is a mosaic of ecologically diverse montane forests with orchids, seasonal flowers, fresh water Myristica swamps and shola grasslands rich in medicinal plants, fruit and spices.

Recognized internationally as a region of immense global importance for their exceptional natural heritage, endemism, cultural and aesthetic values the Western Ghats are one of the eight ‘hottest hotspots’ of biological diversity in the world with globally threatened and restricted species in significant numbers. They cover 6% land area and are home to 30% of plant, reptile, fish, bird and mammals in India.

The 325 globally threatened flora and fauna are represented by 229 plants, 31 mammals, 15 birds, 43 amphibians, 5 reptiles and 1 fish species. Of these, 129 are Vulnerable, 145 Endangered and 51 Critically Endangered. The level of plant endemicity is high with 325 trees, 1,700 vascular plants and 130 orchid species.

30% of the world’s Asian elephants exist here (particularly, in the Nilgiri Bio-sphere and Project Elephant Reserve) and 17% of the world’s Indian tigers (outside Sundarbans). Flagship mammals are the endangered lion-tailed macaque (Silent Valley), Nilgiri tahr (montane grasslands), gaur (Bandipur and Nagerhole National Parks), Indian muntjac (Bhadra Wildlife Sanctuary) and the critically endangered large-spotted civet (Malabar plains). Leopards, black panthers, sambars, sloth bears and wild boars hide in canopies. Among 50 bat species, the Wroughton’s free tailed, Theobald’s tomb and Lesser False Vampire are endangered. The arboreal, bush-tailed, rufous Malabar Giant Squirrel balances on tree tops. Diverse land snails are abundant.

Of equally diverse amphibians, about 80% are endemic. The Bronzed frog on stream edges, Blue-eyed bush frog, Ponmudi bush frog (after the Kerala hill station), Malabar gliding frog and endangered purple frog (discovered here in 2003) are all natives. Amphibians fare high levels of threat (20 recorded extinctions) from habitat loss. Reptiles include the green vine snake, Malabar pit viper and the flagship King Cobra, the world’s largest venomous snake besides Forest Calotes lizards. Of 450 bird species, 35 are endemic and 10 threatened, including the green-billed coucal, Malabar whistling thrush, rufous-breasted laughing thrush, spot-billed pelican, lesser adjutant stork and Kashmir flycatcher.

The Malabar Pied Hornbill, Scarlet Minivet, Nilgiri Wood-pigeon, Malabar Parakeet, Grey-headed Bulbul, Crimson-backed Sunbird, Golden-Backed Woodpecker and Crested Hawk Eagle exist. Among invertebrate species, 100 of (140) tiger beetles and 37 (300) butterflies are endemic.

India has a history of reverence for nature, conservation, environmental legislation and a strong civil society. The Western Ghats have stringent protection regimes under the Wildlife Protection Act (1972) and the Forest Conservation Act (1980). The State Forest Department’s conserve biodiversity, ensure social forestry and protect endangered species. NGO’s involve communities in sustainable resource utilization and participation in Village Eco Development Committees. WWF’s Biodiversity ‘Hotspots’ Conservation Programme (1993-2005) identified and mapped critical wildlife corridors and key species, mitigated human-animal conflict, strengthened protected areas, promoted sustainable livelihoods and involved Government-civic body partnerships. 126 Key Biodiversity Areas were identified and delineated (2003) to protect threatened species. The Western Ghats Ecology Expert Panel designated an Ecologically Sensitive Area (2011) assigning three levels of sensitivity.

Since 2012, 39 properties (20 in Kerala, 10 in Karnataka, 5 in Tamil Nadu, 4 in Maharashtra), has been designated as a UNESCO World Heritage Site encompassing 14% of the hotspot is officially protected in 20 national parks and 68 wildlife sanctuaries (11 % of which is in IUCN’s I-IV categories) while 40% is under Reserved Forests. Integrating their management and coordination is challenging at the Centre, State and sites. As home to several rivers, plants and animals, the loss of the Ghats will have far reaching consequences beyond comprehension.


 Magazine journalism

Much has been written and said about the death of the magazine due to the advent of Internet. Interestingly what is emerging now is a print-digital collaborative business model.

Six online experts have reasoned out ‘Why Magazines Have a Future.’

Globally, some magazines survived recession while some succumbed. Here’s what Alex Lockwood has to say in an article titled ‘Magazines: Can online make an industry recession-proof?’ posted by on March 2, 2009 on

Magazines have shown themselves to be an accurate barometer of the recession so far. Since the property market crashed and people lost jobs, car and home magazines obviously lost out on circulation. Almost every major publishing house saw its range lose circulation in the last one year.

The author argues that magazines are like cheap cosmetics during times of recession. You know it’s a luxury but you still want to indulge in at least something. Magazines give people something to do during recession, states Lockwood.

News and finance titles, such as The Economist and What Investment, are also showing circulation growth, as people look to absorb credible information about the credit crunch.

It is probably true, however, that the titles with falling circulations all target younger groups who have less disposable income and are more likely to be affected by job cuts. That’s certainly the case in the women’s weekly market, where women are cutting back on how many magazines they buy.

But perhaps the biggest individual factor outside of the credit crunch is where consumers are looking. The move towards delivery of magazine-branded content on different platforms was, before the recession hit, the number one concern for the magazine industry: how will print survive in the age of the internet?

Isobel McKenzie-Price, editor of Ideal Home magazine, the market leader in the home styling sector, is responsible for IPC’s home magazine websites,; and While her ABC figures are down, she argues that her magazine is as recession-proof as any, and a lot of that is to do with being online.

So magazines can no longer be measured simply by quoting their ABC circulation figures. Nowhere is this more relevant than in the men’s magazine market. IPC’s Nuts, down 13 per cent year-on-year, argues that looking at print circulation is an outmoded way of judging a magazine’s value: you have to look at what a title is doing and who it is speaking to, via its TV channel, website and mobile platforms.



1. The right to a clean environment and sustainable development is fundamental and is closely connected to the right to life and good health and well being. The environmental journalist should inform the public about the threats to the environment – whether it is at the global, regional, national or local level.

2. Often the media is the only source of information on the environment. The journalist’s duty is to heighten the awareness of the public on environmental issues. The journalist should strive to report a plurality of views on the environment.

3. By informing the public, the journalist plays a vital role in enabling people to resort to action in protecting their environment. The journalist’s duty is not only in alerting people about their endangered environment at the outset, but also in following up such threats and keeping them posted about developments. Journalists should also attempt to write on possible solutions to environmental problems.

4. The journalists should not be influenced on these issues by vested interests – whether they are commercial, political, and government or non-governmental. The journalist ought to keep a distance from such interests and not ally with them. As a rule journalists should report all sides in any environmental controversy.

5. The journalist should as far as possible cite sources of information and avoid alarmist or speculative reportage and tendentious comment. He or she should crosscheck the authenticity of a source, whether commercial, official or non-governmental.

6. The environmental journalist should foster equity in access to such information and help organizations and individuals to gain it. Electronic retrieval of data can provide a useful and egalitarian tool in this regard.

7. The journalist should respect the right of privacy of individuals who have been affected by environmental catastrophes, natural disasters and the like.

8. The environmental journalist should not hesitate to correct information that he or she previously believed was correct, or to tilt the balance of public opinion by analysis in the light of subsequent developments.

Telecommunications: Before & After Liberalisation

Before liberalisation, the government owned Department of Telecommunications had a monopoly over telecommunications in India. The lack of competition resulted in slow expansion and poor services.

To cite from a paper by Kiran Pandya and Smruti Bulsari:

…Moreover, the only service offered by DoT was that of fixed lines. This was characterized by underinvestment, outdated equipment, services that were not customer-centric and growth well below the potential of the market (Jain, 2001). This was reflected in sluggish growth of the telecom sector.

The liberalization policy introduced many changes in the telecom sector and that has shown positive impact on this sector. After the adoption of liberalization policy, drastic changes are visible in the operations and deployment of telecom services. Privatization in manufacturing of telecom equipment and telecom networks in industrial areas was introduced after the liberalization policy. The private sector got further strengthened with government divesting 25 percent of the stake and surrendering its management control in Videsh Sanchar Nigam Ltd. (VSNL) (Rastogi, 2003). On October 1, 2000, the corporatization of government-owned Department of Telecommunications (DoT) took place and Bharat Sanchar Nigam Ltd. (BSNL) came into existence (Vittal, 2000). Also, the liberalized policy attracted substantial inflows of Foreign Direct Investments (FDIs). The FDIs attracted by the telecom sector during the period 1991 to 2002 is US$150 bn (Rastogi, 2003).

The cumulative FDI inflow, during the August 1991 to March 2007 period, in the telecommunication sector amounted to USD 3,892 million. It is the third largest sector to attract FDI in India in the post-liberalisation era.

FDI calculation takes into account radio paging, cellular mobile and basic telephone services in the telecommunication sector.

A survey conducted up until March 2002 shows that since independence the number of basic telecommunication services network has expanded from about 84 thousand connections to around 385.95 lakh connections as on March 31 2002. This shows that post-liberalisation the competition has risen on this playing field. Not only that, the number of people with the inclination towards having a connection has also risen steeply. With disposable incomes being the crux of this age, every person has the means to get themselves a telephone or mobile connection. Every household has more than one phone connection. From the days of government monopoly, we have now reached a point where  the main service providers in the Indian telecommunication sector are as follows –

  • State owned telecommunication companies like – VSNL, BSNL and MTNL
  • Private Indian telecommunication companies like – Tata Teleservices and Reliance Infocomm
  • Foreign telecommunication companies like – Idea Cellular, BPL Mobile, Spice Communications, Hutchison – Essar, Bharti Tele-Ventures, Escotel, etc


The main objectives of the telecommunication industry after the Liberalization of Indian Telecommunication Sector have been as follows. Let us observe if these objectives have been achieved –

  • Creating world class telecommunication infrastructure to meet the requirements of growing Indian industries (Yes).
  • Easy and affordable access to basic telecommunication services across India (Somewhat).
  • Establishing a modern and efficient telecommunication infrastructure to meet the requirements of modern industrial nation (No, needs to extend into rural markets).
  • Modernization of the Indian telecommunication industry (As compared to pre-liberalisation, phenomenally).
  • Provisions for entry of private players into the Indian telecommunication industry (Yes).
  • Provide an equal opportunity for all the telecommunication service providers operating in India (No, considering the scams and scandals, this cannot be considered true).
  • Strengthening R&D in telecommunication sector (No).
  • Efficient and transparent spectrum management  (No).
  • Enabling efficient protection of the defense and security systems of the country (No).
  • Facilitating the Indian telecommunication companies to be at par with other global players (Yes).
  • Facilitate world class services at affordable prices (Somewhat).
  • Institutionalize the Department Of Telecommunication, to help them function as an independent corporate bodies (As a law-making governing body, yes).
  • To make telephone available on demand (Yes).
  • Facilitate reliable media to all telephone exchanges (Yes).
  • Facilitate high-speed data and multimedia connections (Somewhat).
  • Facilitation of world class service to all uncovered and rural areas of India (No, not anywhere close).

Today the Indian telecom industry is one of the fastest growing cellular markets in the world. The annual growth rate for this sector between 2006 and 2007 was 47%! While before liberalisation the DoT provided only fixed lines, the trend today is inclined more towards GSM connections and internet services rather than fixed lines.

A presentation by the Indian Brand Equity Foundation points out:

The Indian telecom services can be divided predominantly into basic, mobile and Internet services. It also comprises smaller segments, such as radio paging services, Very Small Aperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) and Global Mobile Personal Communications by Satellite (GMPCS).

The growth witnessed in the mobile services and Internet services segments was higher as compared to other services, such as basic services and radio paging services. Private players account for highest subscriber base growth in the basic telephony services segment.

Mobile services have led to a spectacular growth in the Indian telecom industry. Currently, 12 players are active in this segment. The total number of wireless subscribers escalated to 185.13 million at the end of June 2007, with a monthly addition of more than 6 million wireless subscribers. Despite the decreasing ARPU, the minutes of usage is on a rise, which provides impetus to the mobile services growth in India.

The following is the market share of wireless operators as of June 2007. It is vastly different from the monopoly that prevailed before 1990:


After liberalisation, particularly post the year 2000, various other services have materialized. Citing from the presentation again, the following points are to be noted:

·       Public Mobile Radio Trunked Services have not grown to their expected potential in India. The high licence fee leaves a very thin margin for services providers; thereby, inhibiting its growth. About 31,000 subscribers are currently availing this service in India from 12 different operators.

·       The market for Very Small Aperture Terminal services increased by 5.73 percent during the quarter ending in December 2006, and the segment had a total subscriber base of 55,070. HCL Comnet is the largest of the eight players functioning in the market.

·           Growing Mobile Personal Communication by Satellite services were launched in India in 1999. These services allow a subscriber to communicate from any point on earth through a handheld terminal. Moreover, the telephone number remains unchanged, irrespective of the subscriber’s location.

·       In 1995, radio paging services emerged as a promising segment in India. However, this segment could not compete with cellular services in general and SMS technology in particular, and is currently shrinking. At present, only four radio paging service providers are present  in the Indian market.

Subsequently internet services too have penetrated the markets further. The telecom sector has become  a major investment attracting one. India being the world’s largest democracy with an independent jury also offer skilled and more importantly cheap labour.  After China, it has proven to be the second largest telecom network among emerging economies – and fifth largest in the world. Liberal Foreign Investment Regime has caused the FDI limit to increase, and the rural telecom equipment market too is opening to large investments. These rural markets are largely untapped, so there is an immense amount of potential for growth. Noting this, the government has been promoting telecom manufacturing by providing tax sops and establishing telecom specific SEZs.

Various important laws have been passed in India in the post-liberalisation period. The following graph (courtesy Indian Brand Equity Foundation):


Further, there have been regulations which have added  impetus to the growth of this sector.  This is facilitating rural growth as well as attracting foreign investment.

It is for the reasons mentioned in the past three paragraphs that foreign investments is adding to this economic sector. Vodafone purchased stake in Hutch from Hong Kong’s Hutchison Telecom International for USD 11.08 billion. Reliance Communications Limited has sold a five percent equity share capital of its subsidiary Reliance Telecom Infrastructure Limited to international investors across the US, Europe and Asia. The deal was worth USD 337.5 million. Telekom Malaysia acquired a 49 percent stake in Spice Communications for USD 179 million. Maxis Communications acquired a 74 percent stake in Aircel for USD 1.08 billion. Ericsson to design, plan, deploy and manage Bharti Airtel network and facilitate their expansion in the rural areas, under a USD 2 billion contract.

This is expected to grow further! 3G services and WIMAX too will help penetration further into India. The Indian government plans to auction the spectrum for 3G services by inviting bids from domestic as well as foreign players, and creating a competitive environment that offers better services to consumers. Therefore, the 3G spectrum is among the major investment opportunities and growth drivers of the telecom industry. WiMAX has been one of the most significant developments in wireless communication in the recent past. Since this mode of communication provides network access in inaccessible locations at a speed of more than 4 Mbps, it is expected to be a major factor in driving telecom services in India, especially wireless services. Thus, it will lead to the increased use of telecom services, Internet, value-added services and enterprise services. WiMAX is expected to accelerate economic growth and assist in providing better education, healthcare and entertainment services.

Value added services made a huge impact in the market too. Vodafone, Airtel, etc all took to the VAS trend like bees to honey – everybody remembers VAS being advertised on bills, on billboards, on televisions. This gave the average phone user MORE to look forward to than just calls and SMSes. In this way, more customers were attracted.

In a sense though, it is completely fair to say that this growth has been noticed more predominantly in urban India. Rural India is still far behind. The government has targetted to increase rural teledensity from the previous 2 percent to 25 percent by 2012. This is unlikely to happen. There is not enough demand in the rural areas nor is there this kind of disposable income. There will be need for competitors to reduce prices drastically and provide many package deals. Apart from that the government has not provided enough infrastructure for the same, so 2012 is too soon for this development to take place, realistically.

So we can say that the three phases employed by the government are doing their job in boosting the telecom sector:

Phase 1, in the 80s, allowed private sector telephone equipment manufacturing. MTNL and VSNL were formed and a telecom commission was set up to regulate policy making. Phase 2, in the 90s, opened up the markets and telephones began to be available on demand. Phase 3, the most recent one, has brought in a third generation of reforms, launch of CDMA technology, FDI increase and 3-6 operators in each circle.










The term “development journalism” is used to refer to a new school of journalism which began to appear in the 1960s. The idea behind this type of development journalism is similar to investigative reporting, but it focuses on conditions in developing nations and ways to improve them.

The term ‘development journalism’ was coined very recently in 1968, at the conference of the Press Foundation of Asia in Philippines. Since then it has become quite popular with the Third World Media, however the West is still sceptical about the nature and functions of Developmental Journalism.

The prime move and objective of development journalism is guaranteeing, augmenting, forwarding and causing socio-economic development in the entire country.

Development journalism centres around issues that determine, hinder, contradict, intervene development of a nation such as poverty, unemployment, sanitation, health, environment, infrastructure, agriculture, gender issues, road and safety, education, human rights, and labour issues.

It focuses on the needs of the poor, the deprived, the marginalized and emphasizes their effective participation in developmental planning. Or to say it slightly elaborately, this kind of journalism motivates the active participation of the affected people and advocating for their interests, in place of the views of the policy makers and the planners i.e. the government

As the fourth estate of democracy the media has focused much on the legislature and executive with most of the space in the mainstream media being occupied by news related to the legislature, the executive, social failures, crimes, statements of political leaders and maligning propaganda. Through developmental journalism the media makes an attempt to publish and highlight events that create sense of unity among the citizens of the country






Developmental Journalism attempts to –

1.    Document the conditions within a country so that the larger world can understand them.


2.     Journalists are encouraged to travel to remote areas, interact with the citizens of the country, and report back. This type of development journalism also looks at proposed government projects to improve conditions in the country, and analyzes whether or not they will be effective.



3.    Ultimately, the journalist may come up with proposed solutions and actions which can be implemented. Often, this type of development journalism encourages a cooperative effort between citizens of the nation and the outside world.


4.    To inform the general public about the various issues that affect the nation, and thus awakening, educating and enlightening the readers so that such problems can be eroded from the society.


5.    To give space to the small initiatives of the people


6.    To ensure that rural populations are consistently kept informed about latest and relevant information and can have a forum for articulating their views.


7.    The ultimate aim is to rationalize people, and build up a changed and better society.




The specific skills required to be a development journalist include excellent communication, to be able to know, understand, comprehend, and share and educate. So is the need of inter-personal skills to be able to empathize, and extract the most crucial and hidden truths. One has to have keen observation power, which does not mean only looking out for different and new events, but also exploring and exploiting those that are already present. Sometimes the most bitter of truths lie in front of us, and we tend to ignore or overlook it.


Developmental Journalism aims to bring about values of human dignity, equality, social justice and security and provide equal opportunities to all the people. For this the mainstream media needs to focus on the people’s problems, initiatives and movements at the grassroot level, it is only then that Developmental Journalsim will prove to be successful. If it remains confined to only a particular sect of the audience, it would then be termed as ‘envelopment’ journalism.’

The underlying idea behind Developmental Journalism is that the media should support national interests for economic and social development and to support national unity, stability, and cultural integrity.


The Finance Commission of India came into existence in 1951. The Finance commission is established under article 280 of the Indian Constitution of India by the President of India. The Indian Finance Commission Act was passed to give a structured format to the Finance Commission of India as per the world standard.

The need for the Finance Commission was felt by the British for guiding the finance of India. The structure of the modern Act was laid in the early 1920’s. The Finance Commission is formed to define the financial relations between the centre and the state. The Finance Commission Act of 1951 tells about the qualification, appointment, term, eligibility, disqualification, powers etc of the Finance Commission.

The First Finance Commission of India was established in the year 1951 with K.C Neogy as the Chairman.

Today we have the Thirteenth Finance Commission appointed in the year 2007 with Vijay l kelkar as the Chairman. Its operational years are from 2010-2015.


Powers of the Commission:

The Finance Commission has the following powers:

  • The Commission shall have all the powers of the Civil Court as per the Code of Civil Procedure, 1908.
  • It can call any witness, or can ask for the production of any public record or document from any court or office.
  • It can ask any person to give information or document on matters as it may feel to be useful or relevant.
  • It can function as a civil court in discharging its duties.

Functions Of The Finance Commission:

The Finance Commission’s duty is to recommend to the President on –

·        Distribution of the income of the government including central and state governments in accordance to the contribution made towards the collection of revenues by each such state governments or central government.

·        Define the grounds on which the government should allocate the grants-in-aid to the Indian states out of the Consolidated Fund of India. The quantum of allocation of such funds needs to compliment the requirements of the Municipalities in the State and the resources of the Finance Commission of the State.

·        Any other matter referred to the Commission by the President in the interests of sound finance.

·        The Finance Commission of India shall also determine the operational process and is vested with such powers in the operation as per the provisions enacted by the Parliament of India.

Sahara Scam

·       Now it’s very confusing, so it’s hard to explain much of the Sahara scam but here goes.

·       Sahara India Pariwar is an Indian conglomerate headquartered in Lucknow with business interests in finance, infrastructure and housing, media and entertainment, consumer merchandise retail venture, manufacturing and IT. It was well known as the title sponsor for the Indian cricket team and India’s Formula One Racing Team.

·       This scam’s origins can be traced back to 2008, when the RBI denied Sahara India from raising funds through fresh deposits. Sahara had always been questionable in terms of where they get their finances from, with some even believing that they ran a Ponzi scheme. Nevertheless, they decided to resort to Optionally Fully Convertible Debentures (OFCDs) (Basically, OFCDs function as regular investments, as in they allow investors to control a stake in the organization or become shareholders. However, there is no asset marked against this investment, leaving it completely unsecured and these investors are, therefore, some of the last to be refunded if the company liquidates or goes under.)

·       Sahara approached the Registrar of Companies (ROC) with the intention of acquiring permission to collect OFCDs worth 20,000 crores from public investors with two of their companies, Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC). Despite the negligible net worth of these companies for such a large amount, the ROC okay-ed it.

·       The SEBI then caught light of this and barred the Sahara companies from collecting any more money in 2010. It is apparently required to take permission from the SEBI to collect money from more than 50 investors, the ROC is approached for less than 50. The Saharas collected from about 30 million (3 crore) investors. This came to light after Sahara filed their DRHP (Draft Red Herring Prospectus) with the SEBI in order to obtain permission for an IPO.

·       Sahara then appealed at the Allahabad HC, which ordered SEBI to not take any action until a court order was passed. The Delhi HC then found Sahara guilty of taking money from people on a fictitious housing scheme and ordered them to return it (24,000 crores) with 15% interest. The Saharas finally approached the Supreme Court in 2012. After suggesting they approach the Securities Appellate Tribunal (SAT), they were again termed guilty and tasked to return the money within 3 months with 15% interest, which the Saharas challenged. The SC asked the Saharas to furnish the information of their investors, which they sent to SEBI in loads of trucks which reached after the deadline, so they weren’t accepted, and they turned out to be vague and unrealistic anyway.

·       Sahara failed to return the money in time, so the SC asked to return it in 3 installments. Sahara maintained that it just had 5000 crores to return, since it paid off almost all of their investors. Of the 3 crore, only 4600 investors came forward demanding their money, which gave weight to their statement. However, questions were raised as to which investors had already received their money and what the source of the money was.

·       The SC froze the bank accounts of Subrato Roy and his other directors and released a warrant for his hearing in court in 2014. When he didn’t appear, he was arrested by the Lucknow police and kept in custody (apparently his mother was sick and she wanted him there and some other Bollywood nonsense). He was kept in custody for 2 years, till he was released on parole in 2016 to attend his mom’s funeral. Sahara was charged with money laundering in 2017.

Planning Commission and some of their key functions

·       The Planning Commission of India was a committee or institution in the Government of India that was responsible for creating the five-year plans that enabled the government to carry out economic planning as to how to utilize and mobilize the resources in the country. It was ultimately disbanded by Narendra Modi in 2014, establishing the NITI Aayog in its place.

·       It was first proposed by Meghnad Saha in 1938 to Netaji Subhash Chandra Bose as a means to enable economic planning for India. Engineer M. Visvesvaraya was the first head, however he stepped down when Saha asked him to, in order to get someone who was equally competent in both science and politics. So, Jawaharlal Nehru became the first head of the first fully formed Planning Commission in 1950.

·       The Planning Commission was mainly responsible for creating five-year plans that would aid in the growth of the country. Their main functions included to (i) assess the material, capital and human resources of the country, (ii) chalk out a plan to mobilize those resources, (iii) define the different stages for the execution of the plan, (iv) identify the factors that would hamper its growth, (v) create conditions to facilitate the implementation of the plan, (vi) procure the machinery required for the plan, (vii) periodically appraise the plan and (viii) suggest recommendations. These are its main functions, among other smaller things.

·       The plans of the Planning Commission have traditionally tried to cover as many aspects of the economic, commercial, industrial and social domain as possible. Starting with the very first plan in 1951, the focus was heavily on the public sector, with the first plan focusing on agriculture. Emphasis was placed on improving heavy industrial growth, agricultural output and the banking system. However, as we moved toward becoming a more open economy, especially once liberalization hit in 1991, the plans started taking a more socialist turn and focused more on expanding trade and welfare. More and more emphasis was placed on reducing poverty, increasing employment, education and basic facilities for people.

·       The Planning Commission’s ex officio Chairman or head is the Prime Minister, while a Deputy Chairman is appointed with the full rank of a cabinet minister. While the other members of the committee are experts in various fields like science, administration and law, the other cabinet members are allowed as special members, including the Agriculture Minister, Finance Minister, Home Minister, Health Minister, Information and Technology Minister, Human Resource Development Minister and others.

·       The Planning Commission was rendered obsolete in 2014. Many problems started to emerge, such as their failure to keep their plans in sync with earlier ones once liberalization took place, red tapism and nepotism, budget and financial allocation issues and the fact that it was a very rigid and long-term process (five years, seriously?).

NITI Aayog (I don’t know much about it, so it’ll be a note)

·       The NITI Aayog or National Institution for Transforming India is a government policy think-tank that came into being as a replacement for the decades-old Planning Commission.

·       In 2014, a recommendation was submitted to the Union Cabinet to do away with the Commission because of its redundancy in national and state planning. In his first Independence Day speech in 2014, Modi announced the NITI Aayog. It first came into being on January 1, 2015 and the first meeting was held on February 8, 2015 chaired by Prime Minister Modi.

·       The PM is the ex-officio chairman, a vice chairman is nominated by the Prime Minister (currently Dr. Rajiv Kumar) and the committee also comprises of all the chief ministers of the different states of the country, the CMs and the Lieutenant Governors of the Union Territories and Andaman and Nicobar and temporary members selected from leading universities and research institutions. There are four ex-officio and two part-time members and a CEO.

·       The NITI Aayog was formed with the intention of creating a ‘think-tank’ over the statutory body that was the Planning Commission. It aims to foster ‘cooperative federalism’, wherein those in the centre i.e. the PM and the cabinet ministers collaborate equally with all the state ministers to formulate plans for the country’s development, keeping in mind the conditions in different states and creating a more holistic approach. This is called a more ‘bottoms-up’ approach, as opposed to the PC’s more ‘top-down’ approach.

·       The NITI Aayog also aims to advise and direct rather than create and implement, like the PC would do. This would allow it to function as a think-tank and be more of an advisory body, but still give it enough power to affect the country’s economy. Probably one of the very few differences between the NITI and the PC is the fact that the NITI Aayog can’t allocate funds.

·       The NITI Aayog has done its fair share of work since its inception, such as helping push forward the ‘cashless transaction’ agenda and focus on jobs and employment. However, some are still skeptical of the NITI Aayog, mostly because it is still in its infancy stage and also because it is not detached enough from the government to function independently as a think tank. Also, being an advisory body, it doesn’t have as much power as the PC did to implement its policies.

Differences between the NITI Aayog and the Planning Commission


Planning Commission

NITI Aayog

Full Time Members

The last Commission had eight full-time members.

The number of full-time members is fewer than PC.

State’s Role

States’ role was limited to the National Development Council and annual interaction during Plan meetings.

State governments are expected to play a more significant role than they did in the Planning Commission- includes leaders from 29 states and seven union territories

Member Secretary

Secretaries or member secretaries were appointed through the usual process.

Secretaries to be known as the CEO and to be appointed by the prime minister.

Part Time Members

Full Planning Commission had no provision for part-time members.

To have a number of part-time members, depending on the need from time to time.

Committee members

Had deputy chairperson, a member secretary and full-time members

New posts of CEO, of secretary rank, and Vice-Chairperson. Will also have five full-time members and two part-time members. Four cabinet ministers will serve as ex-officio members.

Power of funds allocation

Had power to decide allocation of government funds for various programmes at national and state levels.

No power to allocate funds

Power on imposing policy

Imposed policies on states and tied allocation of funds with projects it approved.

NITI is a think-tank and does not have the power to impose policies.

Answerable to

Used to report to National Development Council.

Full time members directly answerable to the Prime Minister, who is the Chairman of NITI Aayog.

Planning Approach

Top-down approach with a one size-fits all approach; indirect say in policy planning.

Invites greater involvement of States, direct say in policy planning.


Banking Sector in India

·       The Indian banking sector is one of the strongest in the world, in terms of functionality, division and sheer strength. There are close to 1 lakh banking institutions all over the country, most of which are rural and urban co-operatives. This includes the biggest and most important financial institution in India, the RBI, established in 1935.

·       The Indian banking sector has grown extremely quickly over the years, especially due to the amount of focus the initial five-year plans placed on developing the banking institution in the country. Our banking institution, despite the minor issues, mostly functions like a well-oiled machine (at least it does on paper; and to a good extent in practicality).

·       One notable aspect of the Indian banking system is the way it has managed to penetrate rural areas, with over 90,000 of the banks in India being rural co-operatives. This has enabled rural occupations like farming, herding and livestock rearing to grow at a substantial rate due to the availability of funds and credit to people living in such areas. It also helps maintain a connectivity of sorts with urban areas.

·       The Indian banking sector has also made significant strides towards digitization and cashless transactions. With demonetization taking effect in 2016, the flow of liquid cash in the economy has reduced, and banks have adapted to the change by greatly digitizing their processes, leading to a large growth in e-commerce, e-banking and mobile banking. The rate of the liquidity in the economy is also enough to keep rates of inflation at bay, ensuring that we won’t endure recession-like situations anytime soon.

·       The division in the banking sector of India can be looked at like so:-




































Commercial Banks and their functioning

·       A bank is an institution that deals with money and credit, whether it involves lending it to people or taking it from them with interest. This is in the form of loans, deposits, investments etc. A commercial bank does all that with the motive of making a profit.

·       The commercial bank is an important institution in India’s banking sector. Commercial banks ensure that money flows in the economy and there is a sufficient provision of credit. It essentially follows through on the orders and policies set by the RBI to ascertain that people have enough money to lead their daily lives.

·       The functions of commercial banks mostly can be taken as the following:-



a)         Accepting Deposits: This is one of the most basic functions of any bank, which is to accept the deposits that are made by people. It is through this deposit and the interest that they accrue on loans that they provide that banks are able to make their profits. These deposits can be made in two forms:-

i)          Demand Deposits: The money from these deposits are withdrawable on demand. They are in two forms – current deposits and saved deposits.

ii)        Time Deposits: These are deposits which are repayable after a certain period of time. They are in two forms – recurring and fixed deposits.

b)         Advancing Loans: One of the other basic functions of any bank is to be able to lend to people. After keeping cash reserves, the balances the bank have are used to lend to needy borrowers and supply credit to them. Banks provide finances to institutions and individuals alike. The profit earning capacity of these banks depends upon this function. Generally, banks grants loans and advances to the borrowers in four main terms – loans, cash credit, overdraft facility and discounting of bills.



c)         Agency Functions: Banks perform certain functions on behalf of their customers. The bank acts as an agent while performing these functions for their account holders. Some of these functions are:-

i)          Collection of money: Commercial banks accept standing instructions from customers regarding collection of money such as cheques, drafts, interest, dividend, bills, promissory notes, rents, demand drafts etc. The bank charges a small commission for this service.

ii)        Payments/Periodical payments: Banks can also make payments on behalf of their customers, such as payment of insurance premium, rent, electricity bill, telephone bill, taxes etc.

iii)   Purchase and sale of securities: Banks can also undertake buying and selling of securities, shares, debentures for their customers.

iv)   Acting as trustee, executor or attorney: As a trustee, the bank is the custodian of the customer’s fund, he is an executor of his will and signs documents on the customer’s behalf as his attorney.

v)         E-Banking: This enables customers to be able to carry out their regular banking functions, such as deposits and withdrawals, through the internet or their mobile phones.

vi)   Dematerialization (D-Mat) Account: A D-Mat account is most useful for customers who deal in shares, which records transactions relating to buying and selling of shares.

vii) Other functions like working as an agent for government or local authorities i.e. clearing and forwarding of goods.

d)         General functions: These mainly include (i) Safe deposit vault (ii) Remittance of funds (iii) Letters of credit (iv) Reference/Status report (v) Underwriting (vi) Dealing in foreign exchange (vii) ATM, credit card and debit card facilities (viii) Compilation of statistics/Publishing information and much more.

Pradhan Mantri Jan-Dhan Yojana

·       The Pradhan Mantri Jan-Dhan Yojana is a banking scheme announced by PM Modi in his first Independence Day speech in 2014. The program was launched on 28 August, 2014. The aim of the program was to bring banking and financial services to every household across India, especially rural households. Zero balance accounts were opened in many branches across the country, which meant that no minimum balance was required to open them. Over 1.8 crore accounts were opened in the first 5 days of operation.

·       RuPay cards were issued to people who used these accounts. A number of benefits were provided to them. An overdraft facility of 5000 was available to one account holder in the household after successfully using the account for 6 months, preferably a woman,

·       An extra accidental insurance of 1,00,000

·       30,000 additional life insurance with a validity of five years as long as the account holder meets certain eligibility criteria.

·       No document account

·       Micro insurance and pension schemes to be implemented in phase two.

·       Easy transfer of money across India

·       Tens of thousands of crores have been deposited in these accounts. Over 20 crore RuPay cards have been issued and more than 30 crore families have benefitted from these, almost two-thirds of them being rural.

·       There have been some criticisms, however. The poor don’t need banks, what they need first is food and other basic necessities. No one thought of the banks and how this volume of overflow would affect them. The availability of overdraft and extra insurance has led to more duplication cases, since verification is not as strict. Also, the overdraft has been left completely up to the bank as to whether they want to provide it or not. Also, the eligibility criteria to meet to procure extra insurance and overdraft have also been left up to the bank.

Pension and the Pension Schemes in India

·       A pension plan is a retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker’s future benefit. The pool of funds is invested on the employee’s behalf, and the earnings on the investments generate income to the worker upon retirement.

·       A pension plan may allow a worker to contribute part of his current income from wages into an investment plan to help fund retirement. The employer may also match a portion of the worker’s annual contributions, up to a specific percentage or dollar amount.

·       The Pension Fund Regulatory and Development Authority or the PFRDA was established by the Government of India on 23 August, 2003. It acts as the regulator for the pension sector.

·       PFRDA promotes old age income security by establishing, developing and regulating pension funds and protects the interests of subscribers to schemes of pension funds and related matters. Currently, PFRDA is regulating and administering the National Pension System (NPS) along with administering the Atal Pension Yojana (APY).

·       Atal Pension Yojana: Launched in 2015; available for anyone who holds a savings bank account between the ages of 18 to 40; has to contribute a set amount each month till he’s 60 in order to earn a pension payout once he retires; the payouts could be for 1, 2, 3, 4 or 5k, depending on the monthly contribution; the beneficiary has to contribute for a minimum of 20 years (when he is, at the most, 40 years old) and a maximum for 42 years (when he is 18 years old); you pay depending on the age and how much you want as your monthly annuity; for example, an 18 year old would have to pay 42 a month for a 1000 as annuity, he’d have to pay 84 for 2000 and so on. Similarly, a 39 year old would have to pay 264 a year for 1000 as annuity, and then 528 for 2000 and so on; the amount would go to the beneficiary, then on his death, to his wife and then, on her death, the lumpsum goes to the nominees of the account. The Government will also contribute 50% of what the subscriber contributes.

·       National Pension System: National Pension Scheme (NPS), a government-sponsored pension scheme, was launched in 2004 for government employees. It was opened to all sections in 2009. A subscriber can contribute regularly in a pension account during her working life, withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement. A minimum yearly contribution of Rs 6000 is to be made. At the age of retirement, 40% of the corpus can be withdrawn tax free. Of the remaining 60%, at least 40% has to be used to purchase an annuity income from one of the PFRDA-approved insurance companies. The remaining 20% can be withdrawn and taxed or used to purchase the annuity.

·       There are mainly two kinds of pension plans: Immediate Annuity (Once you make a lumpsum payment, it starts giving you a payout) and Deferred Annuity Plans (You keep paying for a certain amount of years and you get payouts once you retire, the plan we follow in India)

·       Some of the different pension plans in India are: (i) Immediate Annuity Plan (ii) Deferred Annuity Plan (iii) Annuity Certain (iv) With Cover and Without Cover Pension Plans (v) Guaranteed Period Annuity (vi) Life Annuity.

Some Popular(ish) Insurance Schemes in India

·       Pradhan Mantri Jeevan Jyoti Beema Yojana: Available to 18-50 year olds who enable auto-debit in their accounts; provides them with a life insurance of 2 lakhs with an annual premium deposit of 330 (regardless of age) which gets deducted through auto-debit; it is available for 3 years from June 1 of the first year till May 31 of the third year, after which it is reviewed based on the account holder’s banking history.

·       Stand Up India Scheme: This scheme was launched in 2016 and allows for bank loans ranging from 10 lakh to 1 crore to at least one SC/ST and at least one woman borrower at every Scheduled Commercial Bank branch. The aim of this scheme is to aid SC/ST or woman entrepreneurs to set up Greenfield enterprises, the sectors of the population with limited advice/mentorship and a lack of credit facilities. In case of a non-individual enterprise, to be eligible for the loan, at least 51% of the stake should be held by an SC/ST and/or a woman entrepreneur.

·       Pradhan Mantri Suraksha Beema Yojana: This is an accidental-insurance policy which provides cover for accident related death or disability. Available for 18-70 year olds, a premium of Rs 12 has to be paid annually (which is auto-debited) for a cover of 2 lakh on account of death or full disability and 1 lakh for partial disability. It is offered by several general and private insurance companies and over 10 crore people in India are covered by this scheme.

·       Aam Aadmi Beema Yojana: Merged with the Janashree Beema Yojana, this social security scheme aims to provide a life cover for those living BPL in rural landless households. The cover is on the head of the household or one earning member of 18-59, and the premium is of 200, although that is shared by the Central and State government, making sure that the insured person doesn’t have to pay anything. The life cover received is of 30,000 for natural death and 75,000 for accidental death. This scheme also provides scholarships to children of these households.

·       Rashtriya Swasthya Beema Yojana: This is a health scheme that intends to cover BPL families to help them cope with immediate financial liabilities resulting from hospitalization and medical costs. The cover is of up to 30,000 that extends up to 5 members. Rs 30 is the registration fee and the premium is paid to the insurer selected by the State through a bidding process. This benefits the insured with a choice of public or private hospitals and provides hospitals with a chance to earn some money.

Qualities and skills required to be a business journalist

·       Just like covering any other beat, a business journalist should know which documents to look for and which sources to use.

·       Knowledge of the basic principles of economics is a must.

·       A business journalist covers a sector and follows it closely, reading upon it regularly. Constant change is very regular in the economy and business, so it’s necessary to stay up to date.

·       A business journalist consults the WHY of the story before the remaining 4 Ws and 1 H, due to the analytical nature of business and how it works.

·       Some of the sectors that readers directly relate to are personal finance, automotives, FMCG, real estate, technology and hospitality. Some sectors that they do not directly relate to, relevant more to those who work or take special interest in it, are oil, metals, chemicals, fertilizers, pharmaceuticals and infrastructure. The journalist must be able to understand his audience and know what to write about/on.

·       A business journalist must be very particular about details, specifically facts and numbers. Getting your facts right and accurate is important, because audiences could be making crucial business or investment decisions based on what you tell them.

·       Above all, for a business journalist more so than many others, the need to know your terminology. Business and economics possess many terms and concepts that are unfamiliar to normal readers. Depending on your audience, the journalist must be able to write his story in such a manner that it is understandable to audiences, yet not feel like it’s been dumbed down.

World Bank, ADB and BRICS

·       World Bank: The World Bank is an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement. It was established in 1944, is headquartered in Washington D.C., and has more than 10,000 employees in over 120 offices worldwide. The World Bank was created out of the Bretton Woods agreement as a result of many European and Asian countries needing financing to fund reconstruction efforts. As of 2017, the Bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle and poor-income countries. The World Bank has 189 member countries represented by a Board of Governors. The World Bank Group is one of the world’s largest sources of funding and knowledge and a provider of financial and technical assistance to developing countries around the globe. It does accord power based off of the amount of capital each member contributes, or the number of shares each member holds. The top 5 shareholders become part of the Board of Executives, and make the more important decisions such as approving loans and grants. It expressly states in its mission statement that it wants to ‘effectively reduce poverty’ and has continually used that as its main aim. It also tries to promote foreign investment and trade capital. Its primary objective is to provide funds for economic reconstruction and development, and to induce long run capital investment. Its main functions are essentially providing financial assistance through its various means or provide services, which could be technical assistance, donor-aid coordination or economic and sector work. The World Bank also goes hand in hand with the International Monetary Fund (IMF). It provides for financial aid through a system of grants, aids and other financial assistance techniques. The World Bank has successfully helped raise the Per Capita Income in many countries around the world. It has helped under-developed and developing countries escape conditions of poverty and illiteracy, such as Mozambique, Maldives, Afghanistan, Rwanda and Sri Lanka.

·       Asian Development Bank: The Asian Development Bank was created in the early 1960s and its headquarters are located in Manila, Philippines. It was created as a financial institution that would be Asian in character and assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development. ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside. As of 31 December 2016, Japan and United States hold the largest proportion of shares followed by China, India and Australia. ADB assistance can be understood through its three strategic pillars: boosting economic competitiveness to create more and better jobs, providing inclusive access to infrastructure networks and services, and addressing climate change and increasing climate resilience. The Asian Development Bank mainly caters to the needs of countries in the Asia-Pacific region. That is reflected in its focus areas: education; environment, climate change and disaster management; finance sector development; infrastructure and regional cooperation and integration. However, it does also allow member countries from different parts of the world, including those from the Western world (USA, Canada, France, UK etc). It primarily aims at improving the conditions of countries in the Asia-Pacific region, with a specific focus on poverty and sustainable development. This mainly involves helping them understand their potential natural resource base and being able to use them to their fullest potential. The ADB also attempts to foster greater regional cooperation amongst its member nations and encourage better trade relations between them. It provides financial aid through a normal system of grants, loans and other financial assistance techniques. ADB has evolved into a leading development banking institution in the global financial markets during the past half century since it was established. Over 50 years, the Asian Development Bank has mobilized more than $250 billion in infrastructure, research, and knowledge sharing to expand opportunities and build prosperity across Asia and the Pacific, contributing significantly to the region’s historic global rise.

·       BRICS: BRICS as an acronym stands for the countries Brazil, Russia, India, China and South Africa. The acronym BRIC was first used in 2001 by Goldman Sachs in their Global Economics Paper, “The World Needs Better Economic BRICs” on the basis of econometric analyses projecting that the economies of Brazil, Russia, India and China would individually and collectively occupy far greater economic space and would be amongst the world’s largest economies in the next 50 years or so. South Africa was added to the mix in 2010. The BRICS members are all leading developing or newly industrialized countries, but they are distinguished by their large, sometimes fast-growing economies and significant influence on regional affairs. The BRICS system is essentially meant to serve and aid only the five member countries of the alliance. Therefore, the reach of the BRICS financial institutions is the shortest compared to the other major international banks like the World Bank and Asian Development Bank, which allows for more concentrated focus on lending and development. The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank operated by the BRICS states. The bank’s primary focus of lending will be infrastructure projects with authorized lending of up to $34 billion annually. Brazil, Russia, India, China and South Africa will initially contribute $10 billion each to bring the total to $50 billion. The bank acts as the primary source of financing for BRICS members and their projects in such instances where they may need it, another option being the BRICS CRA (Contingent Reserve Arrangement) to provide for liquid and other precautionary assets if need be. These countries pool in capital to supplement the reserves of the bank, and they use that same capital when the time comes. However, unlike the other banks, it provides an equal vote to each member, regardless of how much capital is contributed. It, therefore, provides for much simpler and varied lending options, which is even more efficient considering its smaller user base. The establishment of the BRICS development bank has long-term implications on global order and development and its creation is significant for future international order. Despite their differences in opinions, unlike G7, BRICS members are largely developing countries, and this situation means that for a long time these countries will focus on how to improve the living standards of their citizens and do so through co-operation.

Stock Exchanges in India

·       Bombay Stock Exchange: The Bombay Stock Exchange is based in (you guessed it!) Mumbai on Dalal Street. It was set up in 1850 by an informal group of stockholders who would trade under a banyan tree opposite town hall. It is one of the world’s largest (and India’s largest) stock exchanges and the oldest in Asia. It became known as the BSE in 1875. It is the world’s fastest exchange with a speed of 6 micro seconds. There are over 6000 companies listed with the BSE. The BSE has kept up with the fast changing technological times and has moved to BOLT (Bombay Online Trading) for its stock activities. The BSE Index is the SENSEX, short for ‘Sensitive Index’. The SENSEX has 30 leading company stocks under its wing. It is calculated using a free float market capitalization method (no of shares multiplied by price of each stock, do that for all 30 companies), with a base year of 1978-79 and a base price of a 100. These companies represent various different sectors of the economy. The SENSEX is a capable indicator of market movement and performance of the represented companies. If the SENSEX goes down, most of the companies are performing poorly and their stock prices have gone down. If the SENSEX goes up, it means most of them are performing well and their values have gone up. It is an important tool for measuring overall economic performance and giving investors a look into the stock industry and informing them about which stocks to invest in, or whether it is good to invest or not. The emergence of scams and poor management, like the Harshad Mehta case, prompted the creation of another major stock exchange in the NSE.

·       National Stock Exchange: The National Stock Exchange is currently the leading and fastest growing stock exchange in India, started to end the monopoly of the BSE in the securities market. The NSE trades in a variety of different kinds of shares and investment items, as opposed to the BSE. It was the first decentralized electronic exchange in India, and was started in 1992. It was recognized as a stock exchange under the Securities Contract Regulation Act of 1956. The NSE has close to 2000 stocks listed. The NSE Index is the NIFTY, also called NIFTY 50. The NIFTY has 50 leading company stocks under its wing. It is calculated using a free float market capitalization method as well, with a base year of 1995 and a base price of a 1000. These companies represent various different sectors of the economy, almost about 15 to 20. The NIFTY is a capable indicator of market movement and performance of the represented companies. If the NIFTY goes down, most of the companies are performing poorly and their stock prices have gone down. If the NIFTY goes up, it means most of them are performing well and their values have gone up, functioning like the SENSEX.

Stock Markets


Now the stock market is a place where shares of public listed companies are traded. A stock market is similar to a share market. The key difference is that a stock market helps you trade, along with shares, financial instruments like bonds, mutual funds and derivatives as well. The primary market is where a company gets registered to issue a certain amount of shares and raise money, also called getting listed in a stock exchange. Once new securities have been sold in the primary market, these shares are traded in the secondary market. In India, the secondary and primary markets are governed by the Securities and Exchange Board of India (SEBI). India’s premier stock exchanges are the Bombay Stock Exchange and the National Stock Exchange.


Stock markets play a crucial role in the consolidation of a national economy in general and in the development of the industrial sector in particular. They also facilitate acquisition and mergers through trading of shares. These exchanges determine the market trends of the economy and indicate the success of the large and important businesses. Thus, good market condition implies good financial infrastructure of the economy.


One thing to understand is that stock markets aren’t always an indicator of India’s economic strength. There are many investors who believe that the rise or fall of these markets is directly related to the strength or weakness of India’s economy. Stock markets, by nature, go up and down in unpredictable ways – depending on factors, like, corporate performance, availability of shares at cheaper rates, sentiments of the investing community, the growth of India’s national income and several other factors. The movement usually reflects the investors’ perception of the company’s future profits.


Media coverage of the stock markets and all its components can, however, influence its movement. Today there are many newspapers, TV channels and websites dedicated to the niche of business journalism. These organizations, apart from reporting the rises and falls of the markets, provide information on government initiatives as well as different companies and individuals in the business field and what they are doing. It engages in debates, speculative content as well as in depth analyses.


Some functions of stock exchanges are:-


a)     Economic Barometer

b)     Helps Price Securities

c)     Ensures and provides a platform for safe transactions

d)     Contributes to economic growth (as a process of investment and disinvestment and reinvestment, helps lead to capital formation and growth)

e)     Providing scope for speculation (buying or investing in an asset with the hope that it will increase in value)

f)      Provides for liquidity (their shares and stocks can easily be converted to cash moneyyyyyy)

g)     Promotes the habit of savings and investment

h)     Helps the public with better allocation of capital


Some qualities a stock market reporter should possess are as follows:-


a)         The market reporter is responsible for knowing everything about the beat. This requires research of relevant industries, companies and individual, funding and interviewing industry contacts.

b)         In addition to this, they need to be aware of the latest developments in the areas of business, politics and regulation.

c)         They need to be well versed with the technicalities and the terminology of the stock markets, lest they make a mistake and cost the public money.

d)         They need to be extremely accurate and very careful with what they report, since what they say has an effect on how the public invests.

e)         They need to be constantly updated and possess great business savvy.

India’s Foreign Exchange Reserves and Fiscal Deficit Problem


·       India’s foreign exchange reserves represent some of the largest foreign asset reserves in the world. Currently, our foreign reserves are somewhere around $410 billion, and this enables us to maintain smooth trade relations with the countries of the world. It is to make international payments and work around exchange rate risks.

·       India’s central bank, the RBI, manages the foreign exchange reserves, as do the rest of the world’s central banks. It is responsible for making sure that our foreign reserves don’t deplete, in order to maintain healthy trade. It is also responsible for preventing devaluation of our currency, which it can combat by releasing more foreign currency.

·       Our forex reserves consist of – (i) Foreign Currency Assets (foreign currency), (ii) Monetary gold (gold reserves), (iii) Special Drawing Rights (SDRs) (A basket of four currencies – dollar, pound, yen, euro – introduced by the IMF as a standard unit of trade) and (iv) Reserve Position (the reserve amount of SDRs kept by the IMF for a country depending on its economy).

·       While India’s forex reserves seem pretty stable now, we’ve had a pretty rough history with it (haven’t we always had a rough history with everything?)


·       We started suffering from a lot of issues with Balance of Payments as the 80s rolled around. We were unable to pay back our existing loans and were borrowing more than what we were making. This is known as the 1990s fiscal deficit crisis, which is defined as when the net expenditure exceeds the net revenue, or our net borrowings are higher than how much we earn.

·       Our crude oil imports were at a high in the 80s and overall exports and trade were down, a lot of it due to the Gulf War, which cost us our major trading partners in the Middle East and the United States. We were also importing a lot more gold than usual.

·       As a result, by the mid-80s, our Current Account Deficit (when the expenditure on imports is more than what we earn from exports) was getting higher and higher. This caused our credit to dry up and, as a result, a lot of our investors started pulling out. And we couldn’t rely on any sort of foreign investment or capital, since we were a ‘closed economy’ at the time.

·       Our currency’s value started to plummet and despite the RBI’s efforts to slow it down by releasing foreign currency, it still continued to devalue.

·       Our fiscal deficit had reached an all-time high of 12% of the GDP in 1990-91, and our borrowings comprised of more than 50% of the GDP in the same year. And our forex reserves were barely enough to finance three weeks of imports. At this moment, we knew we had to act fast.

·       We acquired a $2.2 billion loan from the IMF, by pledging 67 tonnes of our gold. This caused a major public outcry and concern. As a result, the Chandra Shekhar government collapsed and P.V. Narasimha Rao came to power, who introduced several economic policies in 1991 now called ‘liberalization’.

·       We opened up our markets to more foreign investment and trade. The devaluation of our currency helped bring in more trading partners who wanted to take advantage of the low value. Our industries were restructured, and we were able to trade in a better manner.

·       Our forex reserves started to build, and continue to build to this day. In fact, in 2009, we bought about 200 metric tons of gold from the IMF, proving that we were able to stand on our own ground, financially, once again (let’s see how long that lasts).


Retail Marketing in India


The Indian retail market has emerged as one of the cornerstones of the Indian economy. The need for the Indian public to satisfy their whims and fancies, whether everyday or not, with fancy supermarkets or local kirana stores has led to the more than exponential growth of the Indian retail market over the years. As of 2015, the Indian retail market has been valued at US $600 billion, making up more than 10 percent of our GDP. This sector has seen significant growth over time, and continues to do so, due to increased consumerism, rapid urbanization, higher incomes and digitization. Food and consumer goods and apparel continue to form the largest part of this sector. Eg. Big Bazaar, Shoppers Stop, Bata, Zara, Reliance etc.


The Indian retail market can be divided into two sectors – the organized/modern retail or unorganized/traditional retail. The organized retail markets consist of modern shopping stores and supermarkets, which have you browse through rows and rows of products to find what you like. This westernized concept has grown quickly in India, rising from 4% to forming almost 10% of the total retail market share (about $60 billion). With brands like Big Bazaar, Shoppers Stop and the Reliance franchise, the organized sector has achieved substantial growth, extending far beyond just metros and big cities to many towns around the country. Still, however, it hasn’t completely penetrated the Indian landscape, which is where the unorganized retail comes in. This is your average, everyday local kirana or corner retail store, where you go to buy your daily supplies every day, where you probably even know the owners, and which form a significant part of your environment and societal culture. Shopping at such stores is considered a ritual, and is a social catalyst. However, their lack of growth beyond being simple stores and significant lack of monitoring, storing and administrative facilities make them fizzle out in front of the organized sector. These account for the 90% of retail market share.


Over the years, the retail market has grown due to the penetration of foreign franchises taking up the mantle of setting up outlets in India. Ever since the period of liberalization, India has been more open to world trade and investment. However, the practice of letting foreign retailers in didn’t take shape till 2011, when the government allowed single brand retailers such as IKEA and Nike to set up shop. Literally. In 2012, however, they provided allowances for multi-brand retailers such as Walmart and Carrefour to enter the market. This received praise and criticism, with only some states allowing for these retailers. While they will bring investment, quality products and more jobs to the country, they might also bring along with it the demise of local businesses and middlemen, who form a significant part of the Indian retail landscape.


The government has taken, and keeps on taking, various initiatives to improve the retail market set up in India. It is predicted that the market will grow to $1.3 trillion dollars by 2020, with the organized sector accounting for 20% of that. Regardless of the change, the retail market continues to be one of the largest sectors influencing the growth of the Indian economy.


Subsidies in the Indian Economy


Subsidies can be defined as ‘money granted by the state, public body in some shape or form in order to help keep the prices of commodities low’. In other words, a subsidy is kind of like a grant or some form of financial assistance provided by one party (in this case mostly the government) to another party (mostly the people) in order to help them develop and obtain greater returns. Subsidies affect the market by lowering the price of that particular commodity, thereby leading to an increase in its demand and (at least, the intent is) to grow its output.


Subsidies are counted as expenditure by the government in its budget. While this expenditure is made for the right cause, it has received criticism and has been debated. On the one hand, it has helped in the growth of several sectors like agriculture, fuel services, education, health and availability of basic necessities to the underprivileged. On the other, this means much higher expenditure for the government on something that isn’t giving them as much returns as it should, and is constantly compounding on their already scarce resources. Also, a lot of times, these subsidies are managed badly and corruption makes its mark – agricultural subsidies is diverted to industries, kerosene is mixed with petroleum and PDS goods are sold in black markets. However, subsidization has been considered a necessary step to take to invest in the resources of the country and ensure that they are available to the people.


There are essentially two kinds of subsidies:-


a)     Direct Subsidies: These are subsidies which are provided directly as grants, financial incentives, interest-free loans and other direct benefits. This kind of subsidy helps in increasing the purchasing power of the people who receive it and help raise their standard of living.

b)     Indirect Subsidies: These subsidies come more in the form of low-interest loans, rent rebates, depreciation write-offs, tax breaks, insurance etc. These could include something like cheaper and more flexible credit facilities, loan waivers or provision of special facilities like fertilizers or seeds to farmers.


There are a variety of subsidies that are provided in India.


a)     For agriculture, there are fertilizer subsidies, seed subsidies, credit subsidies, farm loan waivers and irrigation and power facilities.

b)     There are also subsidies which encourage exports, such as providing direct financial incentives or reducing tariffs and exchange rates.

c)     For fuel, the government provides discounts on crude oil prices from companies like OIL and ONGC for Oil Marketing Companies like BPCL and HPCL.

d)     The National Food Security Act was introduced, which introduced the Public Distribution System concept to our retail markets. Those living BPL and marginally above it were able to obtain basic goods like wheat, rice and millets for nominal prices, ranging from 3-6 rupees for 5 kilograms. There are specific benefits provided to women under this scheme, and those purchasing are issued with ration cards.

e)     There are also several schemes subsidizing health and education, especially in many public universities and hospitals.


In order to curb a lot of the corruption and leakages that were taking place in the transfer of subsidies, the government introduced the concept of DBTs or Direct Benefit Transfers (the cash subsidy transfer via bank account). This allows for whatever subsidy is to be provided to be transferred directly to the beneficiary’s account. This will help avoid the money getting intercepted or diverted somewhere else and will allow for it to be used properly and avoid leakages and delays. It mainly covers child scholarships and the LPG subsidy. However, as of December 2017, it has been implemented in over 400 schemes in India.  


Travel Writing

Travelogues and tourism

·        Among the new entrants to the genre of feature writing are the ‘travelogues’, which deal with the mix of travel, tourism and the hospitality industry.

·        A growing number of domestic and international tourists are keen to see our ancient heritage. Thus, feature writers need to provide information through sensitive writing, promotions and highlighting of the tourism venues.

·        Feature writers are needed in large numbers to create a good ‘image’ a tourist destination. This is done by photo-features, collages, travelogues and re-portages.


Travel Literature

·        Travel literature typically records the people, events, sights and feelings of an author who is touring a foreign place for the pleasure of travel. An individual work is sometimes called a travelogue or itinerary.

·        To be called literature the work must have a coherent narrative, or insights and value, beyond a mere logging of dates and events, such as a diary or ship’s log.

·        Literature that recounts adventure and conquest is often grouped under travel literature, but it also has its own genre called outdoor literature. These genres will often overlap with no definite boundaries. This article focuses on literature that is more akin to tourism.


Types of travelogues

·        Travel literature may be cross-cultural or transnational in focus, or it may involve travel to different regions within the same country. Accounts of spaceflight may also be considered as travel literature.

·        Fictional travelogues make up a large proportion of travel literature.

·        Many “fictional” works of travel literature are based on factual journeys.


Travel journal

·        A travel journal, also called road journal or travelogue, is a record made by a voyager. Generally in diary form, a travel journal contains descriptions of the traveler’s experiences, is normally written during the course of the journey, and may or may not be intended for publishing


Health Magazines


Health writers generate content for medical publications and the general public. They have a specific area of expertise or a working knowledge of different health concerns. Health magazines are a great way to keep you updated with the latest of what is going on in the world of fitness today. Health magazines deal with issues regarding the upkeep of health and do well in providing information relating to every aspect of health and fitness that you can think of. The amazing level of detail that most health magazines offer is incredible. Health and general fitness magazines form an often underrated part of the magazine journalism scenario in India, due to the fact that it’s not typically a genre of magazines that most people gravitate towards. However, these magazines prove to be extremely helpful to those who read it and have developed a, if not wide, dedicated user base. These people can safely attest that these kinds of magazines do help them lead better, healthier lives, mainly because everything they get is from very well-informed and research-oriented individuals. In India, some of the most popular health magazines are Health and Nutrition (general readership; motivational and informational; health and nutritional advice), Men’s Health (grooming, appearance and fitness; tips on sex, fitness and general health), Women’s Health (same as Men’s Health, just a little less vapid, more interested in helping women), B Positive (Talks frequently about mental health and being happy; empowers its readers; talks about health, nutrition, sanity, hygiene, disease prevention), Food and Health (blends food with healthcare; healthy lifestyle living, whether fitness wise or social wise), Psychology Today (psychological; how to lead a happy life, reduce stress, mind-body, relationships).


Some skills required to be a health journalist are as follows:-


a)     You should have a good set of skills regarding what you write about. Know the health processes, know the terms, know the right things to suggest.

b)     That being said, for health magazine writers, what matters more than technical knowledge is writing ability. It would make no sense to throw some jargon at people and not convince them to actually change their lives.

c)     Make sure that all your facts are accurate. One wrong word here or there, the next thing you know, you could be facing a lawsuit because someone thought insulin was for those with low blood sugar.

d)     As usual, keep on doing your research. You never know what medical breakthrough could land you an article.

e)     Try and look for the most ‘different’ story you could find. It’s often interesting to read articles about odd or little known medical practices or health practices.

f)      Make sure that you know who your reader is and write accordingly (Does your reader want fitness advice? Is your reader predominantly female? Are your readers familiar with nutrition and the different facets?)


Technology/Tech Magazines


A tech magazine is just like a holy book for the people who follow technology as a passion. The amount of useful information that is offered in most tech magazines relating to the latest in anything that has anything to do with technology is staggeringly detailed and still some magazines have managed to set the bar higher with every edition. The exceptionally large number of magazines makes the choosing of the best tech magazines a difficult and intriguing task. That said there are many magazines that have kept their standards very high in this regard. Some of the most popular of those in India are Digit, Chip (now discontinued), PCQuest, Developer IQ, Computer Shopper, Computer World etc.


Some skills required to write for tech magazines are as follows:-


a)     Know your subject very well. Of all genres of magazines, this is one that requires a lot of technical know-how. It is important to know what you’re talking about, so as to not come off as a bumbling idiot.

b)     Technology is one sector that keeps on changing. So keep reading and doing your research, you are bound to discover something new that you could write about or that affects your writing.

c)     Develop your niche early on. There are many sectors to write for when it comes to tech, which could include software, computer hardware, mobile technology, gadgets, scientific breakthroughs and many others. Learn what interests you the most and practice, practice, practice!

d)     Don’t be afraid to harness social media and the internet for your writing. After all, they are technology.

e)     Make sure that your information is palatable to your audience, but not so much that it feels simplified, that wouldn’t work as far as tech is concerned. Also, if your audience consists of devoted technological experts, it doesn’t hurt to show off your know-how.

f)      Make sure you get all your basics right before delving into the deeper more complicated stuff.

g)     If you are writing product reviews or product catalogues, make sure that you try them out first to have an informed opinion.

Automobile Magazines


Automobile journalism is basically considered a ‘glamorous’ field of journalism, which is seen as being just about cars and driving them. But it’s a lot more complex than you’d think. Keeping up with the industry, the new developments and trends is a tough job to do. And your readers rely on you to do it, so you better do it well. Writing for automotive magazines is a job that requires you to possess a good amount of technical know-how and, obviously, an interest in cars. However, weirdly enough, you wouldn’t necessarily need a driver’s license to write about one. Some popular ones in India are Motoring World, Overdrive, Autocar, Top Gear, Car etc.


So here are some key skills required for an automotive journalist:-


a)     Don’t get caught up in all the fanciness of what you’re doing, make sure to concentrate on your work and not make a habit of accepting freebies or free rides.

b)     Keep yourself updated with the automotive industry and new cars coming out. New models release all the time.

c)     A lot of the companies you write about are big Fortune 500 names, it wouldn’t hurt to keep in touch with general and business news in that regard.

d)     Attend local car shows frequently, network and check out the new products.

e)     Maybe try developing an interest in motorsports.

f)      Possess a good amount of technical know-how, a lot of this industry has to do with tech and engineering.


Environmental Magazines


Environmental journalists are expected to be advocates for changes to improve the quality of the planet. They should educate people about the serious state of the environment and use the power of the news media to bring about changes to improve the quality of the air, water, wildlife and natural resources. Journalists investigate environmental problems and their causes, report on environmental policy disputes, and make the public aware of these issues and the importance of a healthy planet. Environmental journalism, of all beats, is one that is considered the most urgent and important, since it talks about factors and conditions that affect the way we live our lives. Using the medium of magazines to inspire change in the habits of people or inform them about how the world around us is constantly changing is a great feat to achieve. Some of the most popular environmental magazines in India are Down to Earth, Geography and You, Sanctuary Asia and Terra Green.


Some skills required to be a good environmental journalist are as follows:-


a)     You should be well aware of the constant changes taking place around you. Keep reading the newspaper and have a good background in environmental research to understand the causes and consequences of what you write about.

b)     You should not only be well aware of what is taking place now, but also what happened before. Knowing your Earth and environmental history helps you understand how we’ve come to the present Earth as it is.

c)     Make sure that your writing style is informative and objective and, at the same time, inspirational and should motivate people to actually think about the planet and saving it.

d)     Always make sure that you don’t sound too invested or biased on a particular issue, it could sway readers the wrong way.

e)     Don’t be afraid to go out into the field, it is pretty crucial for your job.

f)      Get yourself involved with environmental drives on occasion, but mostly just try to observe or attend rather than be an active part of it.


Difference between writing for a magazine and newspaper (difference between writing for a feature and a report)


a)     Magazines are more time-taking, newspapers are more urgent and quick. As in, you have more time to write magazine articles as opposed to newspaper ones.

b)     Newspaper articles cover newsworthy and general topics (usually) while magazines cover a variety of topics.

c)     Usually, only one, maximum two, people go into the writing of a newspaper article. Multiple people can be involved in a magazine article.

d)     Magazine articles can afford to be longer than newspaper articles.

e)     Magazine articles have more of a creative liberty when it comes to its content. Newspaper articles have to stick to the facts and a clear unbiased thread.

f)      Magazine articles can use more frank, colloquial and informal language. Newspapers have to be formal in nature.

g)     Magazine articles can use more of graphics, illustrations, cartoons and photographs. Newspapers don’t use much of those, usually they would just use one of these tools at a time.

h)     Newspaper articles are mostly very region-centric to appeal to the specific readers of the area. Magazine articles, depending on the subject, could be based off of anything happening all over the world.

i)      Newspaper articles have to concern themselves with recent events. Magazines don’t necessarily have to do that.

j)      Newspapers usually target the general audience, magazines usually target a specific niche audience.

k)     Newspapers have a simpler and cleaner layout, magazines are more stylistically formatted and presented.

l)      Newspapers are cheaper and circulate more, magazines are more expensive and don’t circulate as much as newspapers.

m)   In terms of digitization, people prefer to read magazines online. With newspapers, people don’t read newspapers online per se, they get their online news from other sources. Newspapers are meant to be a physical medium.

n)     Newspapers come out every day, magazines come out periodically (weekly, biweekly, monthly)

o)     Magazines have a greater shelf life and archival capability, newspapers once past their issue date are of little use except maybe research.


Budget Highlights


a)     Health: National Health Protection Scheme, upto 5 lakh per family per year for health expenses, largest govt funded healthcare program in the world

b)     Agriculture: Heavy investment and MSP raised by 1.5 times, 500 cr to operation Green, 2000 cr for the agri market

c)     Twin balance sheet issue

d)     Economic survey on pink paper

e)     Increase in jobs for women in retail sector

f)      E-mitra for railways, electronic railways, bio toilets, improved sanitation and coach capacities

g)     Infrastructure spending on roads and railways, to develop 35,000 km under phase 1 of Bharatmala project

h)     Customs duty hike to promote ‘Make in India’

i)      Fiscal deficit is 3.5% of GDP

j)      No change in personal income tax rates

k)     Exemptions to senior citizens for medical insurance and income from FDs

l)      85 lakh new tax payers filed income tax returns in FY17

m)   Corporate tax of 25% for companies with turnover higher than 250 cr

n)     Education cess increased to 4%

o)     In 9 months of current fiscal, GST collections 4.44 lakh cr

p)     Social welfare surcharge of 10% on imported goods

q)     New LPG connections for 8 cr poor women

r)      Housing for All scheme wants to create better homes for those living in kutcha houses


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Bottom of Form

Satyam scam: All you need to know about India’s biggest accounting fraud

A special CBI court on Thursday sentenced B Ramalinga Raju, his two brothers and seven others to seven years in prison in the Satyam fraud case. HT presents a lowdown of the country’s biggest-ever corporate accounting scandal.

HT Correspondent

Hindustan Times




A special CBI court on Thursday sentenced B Ramalinga Raju, his two brothers and seven others to seven years in prison in the Satyam fraud case.

The court also imposed a fine of Rs 5 crore on Ramalinga Raju, the Satyam Computer Services Ltd’s founder and former chairman, and his brother B Rama Raju and Rs 20-25 lakh each on the remaining accused.

HT presents a lowdown of the country’s biggest-ever corporate accounting scandal.

What is the Satyam scam about?

It is about corporate governance and fraudulent auditing practices allegedly in connivance with auditors and chartered accountants. The company misrepresented its accounts both to its board, stock exchanges, regulators, investors and all other stakeholders.

Is this an accounting fraud, a market manipulation/fraud or both?

It is a fraud, which misled the market and other stakeholders by lying about the company’s financial health. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good health.

Who is to blame here? The promoters?

The promoters are primary culprits, although it is almost impossible to misrepresent such facts without the connivance of the auditors and some executive board members. Independent directors, it seems, were kept in the dark about the actual books of accounts.

What about the auditors?

The role of external third party auditors, who were tasked to ensure that no financial bungling is undertaken to carry out promoters’ interest or hide facts, have also been brought to question.







Links for Business Journalism


Satyam scam: All you need to know about India’s biggest accounting ……/satyam-scam…/story-YTfHTZy9K6NvsW8PxIEE

Satyam scam – SlideShare

Core banking – SlideShare

Retail Industry in India: Overview of Retail Sector, Market Size, Growth …

Bombay stock exchange – SlideShare

Nse products – SlideShare

World Bank

BRICS bank


Pradhan Mantri Jan Dhan Yojana



Scheme Details

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet. Accounts opened under PMJDY are being opened with Zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfill minimum balance criteria.

Document required to open an account under Pradhan Mantri Jan-Dhan Yojana

An account can be opened by presenting an officially valid document.

i.the passport,

ii.          the driving licence,

iii.          the Permanent Account Number (PAN) Card,

iv.          the Voter’s Identity Card issued by Election Commission of India,

v.          job card issued by NREGA duly signed by an officer of the State Government,

vi.          the letter issued by the Unique Identification Authority of India containing details of name, address and Aadhaar number, or

vii.          any other document as notified by the Central Government in consultation with the Regulator:

Provided that where simplified measures are applied for verifying the identity of the clients the following documents shall be deemed to be officially valid documents:—

a.      identity card with applicant’s Photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

b.      letter issued by a Gazetted officer, with a duly attested photograph of the person.

Reserve Bank of India (RBI), vide its Press Release dated 26.08.2014, has further clarified that those persons who do not have any of the ‘officially valid documents’ can open “Small Accounts” with banks. A “Small Account” can be opened on the basis of a self-attested photograph and putting his/her signatures or thumb print in the presence of officials of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lakh in a year), aggregate withdrawals (nor more than Rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point of time). These accounts would be valid normally for a period of twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account-holder provides a document showing that he/she has applied for any of the Officially Valid Document, within 12 months of opening the small account.

Special Benefits under PMJDY Scheme

1.      Interest on deposit.

2.      Accidental insurance cover of Rs. 1 lac

3.      No minimum balance required.

4.      The scheme provide life cover of Rs. 30,000/- payable on death of the beneficiary, subject to fulfillment of the eligibility condition.

5.      Easy Transfer of money across India

6.      Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.

7.      After satisfactory operation of the account for 6 months, an overdraft facility will be permitted

8.      Access to Pension, insurance products.

9.      The Claim under Personal Accidental Insurance under PMJDY shall be payable if the Rupay Card holder have performed minimum one successful financial or non-financial customer induced transaction at any Bank Branch, Bank Mitra, ATM, POS, E-COM etc. Channel both Intra and Inter-bank i.e. on-us (Bank Customer/rupay card holder transacting at same Bank channels) and off-us (Bank Customer/Rupay card holder transacting at other Bank Channels) within 90 days prior to date of accident including accident date will be included as eligible transactions under the Rupay Insurance Program 2016-2017.

10.  Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady ofthe household. 31.34 Crore beneficiaries banked so far

₹76,578.41 Crore Balance in

beneficiary accounts

1.26 lakh Bank Mitras delivering branchless

banking services in Sub-Service Areas










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10 things you need to know about Sahara row

Sahara chief Subrata Roy’s days of evading the law are finally over. The Lucknow police has taken him into custody following the issuance of a non-bailable warrant by the Supreme court, after he failed to appear in court. The Sahara Supremo will be produced before the court on March 4.

The irritation of the judges on Roy’s evasion tactics can be understood from their statement where they told Roy’s counsel that even if we retire; we will ensure that the order is implemented.

Along with the Supreme Court the only reason that Subrata Roy will be behind bars is because of the hard work of a whole-time director of Sebi, K M Abraham. It was Abraham’s watertight investigation in the entire Sahara OFCD issue that the case might see its logical end.


Before we look at the chronological events that led to this Supreme Court order, an explanation of OFCD is needed.


OFCDs are optionally fully convertible debentures. They are issued by the company to potential investors in order to raise money. OFCD holders can become shareholders of the company if they choose to do so. Generally (which is true in the case of Sahara) there is no asset marked against such investment. In other words, they are unsecured in nature and in case of a default and liquidation of the company, they will be one of the last stakeholders to be refunded.


Sahara’s case is all about OFCD and its investor. But its root is in a ruling by the Reserve Bank of India in 2008. Here is a chronological list of how events unfolded from 2008 to the issuance of non-bailable warrant to Sahara chief


1. In 2008, RBI debarred Sahara India Financial Corporation from raising fresh deposits. The growth of Sahara’s empire was always a mystery; many believed it ran a Ponzi scheme by collecting funds from investors. The group needed continuous flow of fresh funds to keep it afloat. With RBI closing a door on the group from collecting deposits from the people, the group needed a financial instrument that would be out of the purview of RBI but still get access to public funds.


2. Sahara decided to issue OFCDs by floating two companies – Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC). It was the Registrar of Companies (ROC) that needed to clear these investment vehicles.


3. ROCs role in the entire episode is critical since it cleared the proposal without raising the most basic questions. Consider these facts. Both the companies had negligible net worth. SIREC had an equity capital of only Rs 10 lakh and a negative net worth at the time of issuance while the net worth of SHIC was around Rs 10 lakh. But both the companies planned to raise Rs 20,000 crore each. Imagine applying for a bank loan of Rs 20,000 crore with only Rs 10 lakh as your contribution. A banker would fall laughing on such a proposal, but ROC allowed the Sahara Group companies to go ahead with the proposal. More than one law was flouted by Sahara in issuing these OFCDs, which it calls private placement.


4. Firstly, the sheer size of the issue makes it a public issue. Any company seeking money from more than 50 persons has to take the approval of Sebi in doing so, in which case the company would have to make all the disclosures required as per Sebi norms. The Sahara group had sought money from nearly 30 million investors. Apart from the size and number of investors, another deliberate error was keeping the issue open ended; ideally such issues should be closed within six weeks. In fact a Sahara group company kept an issue of Rs 17,250 crore open for 10 years.



5. Sahara’s money-making machine could have continued had it not committed another major mistake. Sahara decided to tap the stock markets to raise money through Sahara Prime City. In doing so the company had to file a Red Herring Prospectus and disclose working and financials of other group companies. This is when K M Abraham spotted SIREC and SHIC and found that the money raised through OFCDs was camouflaged as private placements.  


6. Abraham found out that even though the Sahara group companies collected money they did not have proper records of the identity of its investors. How and to whom would they then return the money? Even professional agencies were unable to locate the investors.


7. The two companies, Abraham alleged, intended to rotate money between group companies. Though the OFCD instruments were issued in the name of the two companies, cheques were sought in the name of Sahara India.


8. When Sebi issued its order on the wrongdoings of the Sahara group on June 23, 2011, Sahara group took the matter with Securities Appellate Tribunal (SAT). But SAT held the Sebi findings to be correct. SAT in its order said “What it (Red Herring Prospectus) did not disclose was the fact that the information memorandum was being issued to more than 30 million persons inviting them to subscribe to the OFCDs and there lies the catch…This concealment is, indeed, very significant    and goes to the root of the controversy.”


9. Sahara group then approached the Supreme Court but in August 2012, the honourable court asked the group to repay an amount of over Rs 24,000 crore to Sebi within 90 days. The regulator will then distribute the money to bonafide investors. But suddenly Sahara said it had repaid most of the money over the last one year and an amount of just over Rs 5,000 crore was pending.


10. In the October hearing Supreme Court had clearly hinted that it was no longer amused by the delaying tactics of the Sahara group and would detain the group’s officials till the payments are made. The Supreme Court Bench had said that previous orders had not been compiled with and that was why Roy and the directors were been summoned to explain the delay. Roy did not turn up, thus the non-bailable warrant with an order to appear before the court on March 4.


Key features of the Budget 2008-2009

I.                 General Overview of the Budget

1.          The Gross Domestic Product increased to 9.6 percent over the previous year’s GDP.

2.          The drivers of growth continue to be ‘services’ and ‘manufacturing’ which are estimated to grow at 10.7% and 9.4% respectively. Growth rate in agriculture for 2007-08 is estimated at 2.6%.

3.          Allocations for schemes related to employment, skills enhancement & training, women & children, drinking water & sanitation, the North East, Minorities and Agricultural Credit & Investment have seen an increase this year.

4.          One of the mainstays of this budget has been the debt waiver and debt relief for small and marginal farmers.

5.          Rural Inclusion has been a recurring theme in various allocations and policies throughout this budget.


II.                Major Foci- Education and Health


1.          In the Eleventh Five-Year Plan, there have been many policies to bolster the education sector. Sarva Shiksha Abhiyan provided Rs.13,100 crore with the focus to shift from access and infrastructure at the primary level to enhancing retention and improving quality of learning. Mid-day Meal scheme will get Rs. 8,000 crore; secondary education will get Rs. 4,554 crore. There have been residential schools set up for girls and higher schools of learning will receive an impetus, particularly in science and technology. A special grant of Rs. 100 crore has been granted to 3 institutes of excellence.

2.          The health sector is allocated Rs. 16,534 crore, thus, marking an increase of 15% over 2007-08. Allocations have been made to the National Rural Health Mission, HIV/AIDS awareness programmes, Polio eradication drives, Rashtriya Swasthya Bima Yojana (insurance for workers in the unorganised sectors) and a Programme for the elderly.


III.              Manufacturing Sector


1.          FDI amounted to US$ 12.7 billion and FII to US$ 18 billion. Government to provide support to Central Public Sector Enterprises through equity and loans.

2.          There is a bid to increase power supply. Funds have been allocated for exploration and discovery of oil and gas. Coal distribution to beregulated.

3.           Allocation for National Highway Development Programme enhanced to Rs.12,966 crore in 2008-09 from Rs.10,867 crore in 2007-08.

4.          Allocation to the Department of Information Technology enhanced to Rs.1,680 crore in 2008-09 from Rs.1,500 crore in 2007-08.

5.          An impetus has been provided to the textile industry, particularly the handloom sector. Micro, Small and Medium Enterprises are likely to enjoy paying lower fees to SIDBI (Small Industries Development Bank of India). Exporters have been provided relief amounting to over Rs. 8,000 crore.



IV.              Other Allocations


1.          Banks have been advised to embrace Total Financial Inclusion. Capital Markets are likely to see new financial instruments and markets.

2.          Allocation for Defence has been increased by 10% over the previous year.

3.          The Commonwealth Games will be provided Rs. 624 Crore in 2008-09. Other cultural and environmental activities that will be benefitted include establishing an institutional mechanism for climate change, tiger conservation and enhancing India’s Soft Power through the Indian Council of Cultural Relations.


V.               Tax Proposals- Indirect Taxes


1.          The contribution of Tax to GDP is 12.5%.

2.          The following products are off the radar for customs duties: steel and aluminium scrap, bactofuges (to increase the shelf life of packaged milk), specified parts of set top-boxes & specified raw materials for use in the IT/Hardware industry & sports goods, rough cubic zirconia (for the gem and jewellery industry) and helicopter simulators.

3.          Customs duty has been reduced to 5% for the following products: project imports, certain specified life-saving drugs and bulk drugs used for the manufacture of such drugs, phosphoric acid for dairy and poultry feeds, convergence products (to establish parity between entertainment and IT sector), machinery to manufacture sports goods and polished cubic zirconia & rough coral (to provide a fillip to the gem & jewellery industry).

4.          Crude & unrefined sulphur (for local fertiliser production) and Vitamin pre-mixes & mineral mixtures (for poultry feeds) too have seen a fall in customs duty. Naphtha for production of polymers is back on the excise radar while chrome manufacturers have to pay higher export taxes.


VI.              Tax Proposals- Excise Duty and Service Taxes


1.           General CENVAT rate on all goods reduced from 16 % to 14 % to give a stimulus to the manufacturing sector.

2.          There have been excise duty cuts in the following sectors: the automobile industry, paper, pharmaceutical (including an exemption of excise duty on the anti-AIDS drug, Atazanavir), mass consumption products (including puffed rice, packaged coconut water, wireless data cards, water purification devices, sterile dressing pads) and refrigeration equipment.

3.          Excise duty rates for bulk and packaged cement brought on par, packaged and customised software brought on par, filter and non-filter cigarettes too brought on par.

4.          Ad valorem duties on unbranded petrol and diesel were abolished and replaced with specific duty without impacting their retail prices.

5.          A levy has been imposed on cellular phones.

6.          Four services brought under service tax net namely, asset management service provided under ULIP, services provided by stock/commodity exchanges and clearing houses.




VII.            Tax Proposals- Direct Taxes


1.          Threshold limit of exemption from personal income tax in the case of all assesses increased to Rs.150,000. The slabs and rates of tax are:

Up to Rs.150,000 NIL

Rs.150,001 to Rs.300,000 10 per cent

Rs.300,001 to Rs.500,000 20 per cent

Rs.500,001 and above 30 per cent

2.          In case of a woman assessee, the threshold limit increased from Rs.145,000 to Rs.180,000; for a senior citizens, the threshold limit increased from Rs.195,000 to Rs.225,000.

3.          There has been no change in corporate income taxes or the surcharge rate. However, there have been schemes to exempt corporate debt instruments from TDS and exempt events and benefits provided for employees from FBT.

4.          Senior citizens have been provided with many tax exemptions in addition to the increase in threshold limit.

5.          In agriculture, tax income arising from sale of plants grown in nurseries exempted; seeds and agricultural implements production has been granted deductions for in-house scientific research.

6.          Five year tax holidays have been granted to hospitals located outside urban centres as well as to two, three and four-star hotels located in districts having UNESCO recognised heritage sites.

7.          Transaction Taxes have been introduced for commodities; banking cash transaction taxes will be withdrawn with effect from April 1, 2009.

8.          Central Sales Tax has been reduced from 3% to 2% to pave the way for Goods and Service Tax to be introduced on April 01, 2010.


VIII.            Conclusion


A quick review reveals that this year’s budget is a populist and rather safe budget which has been made keeping the upcoming elections in mind.

It is a consumerist budget made to increase spending in the economy. This year’s major foci have included education, health care (particularly of the elderly) and of course, the waiver of agricultural loans.

Allocations have also been made to encourage sports, culture and tiger conservation.

With the world economy spiralling downwards, it looks as though the Indian economy will take a hit despite concessions on various duties.

Despite the fact that the budget is a consumerist one, spiralling inflation rates and heavy interests on home loans are likely to play spoilsport in encouraging spending.

It is not a very investor friendly budget despite the introduction of new instruments and markets.

This budget has been a mixed bag for the corporate sector and only time will tell what the effect has been on this sector.



Interim Budget 2009

The final UPA Budget was nothing but a cursory rundown of the Government’s Achievements. It disappointed Industry. The Markets, too, reacted negatively by sliding down 329 points.

–         The Economic Times, 17th February, 2009.

An ‘Interim Budget’ is presented at a time when there is likely to be a transition in Governments.

This interim budget isn’t very different from the 2008 budget and is thus, disappointing. Some of the salient features are listed below:

The Economy

* The GDP is projected to grow at a rate of 7% pa while inflation rates are likely to drop to 4% pa

* The tax burden is likely to become moderate next year

* Government will step up spending to stimulate growth in a slowing economy

* This spending will be largely financed through borrowings which will run the risk of increasing interest rates

* The Government will provide stimulus to private investment through public-private partnership infrastructure projects

Industry and Core

* Aiding consumer goods sector by providing higher income to workers and increased rural demand

* Cement, Steel and Construction to benefit from boost to infrastructure

* Textiles, Carpets, Leather, Gem and Jewellery, Marine Products to enjoy lower interest rates till September 30, 2009

* Unique ID plan to benefit Software firms

The Markets

* Both the Mumbai Stock Exchange and the NIFTY fell by 3% each

* Realty, Business and Metal shares were among the worst hit

* As mentioned previously, Government borrowings are likely to lead to an increase in interest rates which in turn will reflect in the bonds market

* More funds for the infrastructure sector as banks will be refinanced through IIFCL (India Infrastructure Finance Company Limited)

Social Sectors

* Farmers continue to get cheap credit as Government retains interest subsidy on short-term loans

* Cheaper Credit for exporters to continue

* Pension for disabled and widows below the poverty line

* More Primary Health Centres and increased spending on education

* City infrastructure and transport get a boost through more funds for urban renewal schemes

* Rural infrastructure gets more attention through more funds for Bharat Nirman schemes

* Boost in Rural Incomes through hike in allocation to Rural Job Guarantee scheme

Attached herewith are some statistical figures for the interim budget.





* Plan expenditure for 2009-10 pegged at Rs 953,231 crore (Rs 9.52 trillion)

* Budgetary support for 2009-10 at Rs 2,85,149 crore (Rs 2.85 trillion), 17.16 per cent

* Additional plan expenditure between 0.5 per cent to 1 per cent of GDP may be considered

* Subsidy for food, fertiliser and petroleum at Rs 95,579 crore (Rs 955.79 billion)

* Defence allocation increased to Rs 141,703 crore (Rs 1.417 trillion)

* Urban renewal spending pegged at Rs 11,842 crore (Rs 118.42 billion)

* Gross market borrowing estimated at Rs 3,62,000 crore in 2009-10 (Rs  3.62 trillion)

* 2009-10 gross budgetary support at Rs 2,85,000 crore (Rs 2.85 trillion)

* Substantial relief of about Rs 40,000 crore (Rs 400 billion) due to tax cuts in 2008-09

* Rural job schemes to get Rs 30,100 crore (Rs 301 billion) in 2009-10

* Rural sanitation spending at Rs 1,200 crore (Rs 12 billion)

* National rural health mission spending at Rs 12,070 crore (Rs 120.7 billion)

* Rural infrastructure development outlay at Rs 14,000 crore (Rs 140 billion)

* Midday meal scheme spending at Rs 8,000 crore (Rs 80 billion)

* India remains second-fastest growing economy in the world

* Economy expected to grow 7.1 per cent this fiscal

* Need to make economic growth inclusive

* Government spent Rs 70,000 crore (Rs 700 billion) on 37 infrastructure projects in 2008-09

* Under public-private partnership (PPP), 54 central infrastructure projects approved

* Total expenditure of PPP projects estimated at Rs 67,700 crore (Rs 677 billion)

* India Infrastructure Finance Company to raise Rs 10,000 crore (Rs 100 billion) by end-March

* Focussed attention to agriculture

* Plan allocation for farm sector hiked 300 per cent in past five years

* Three-fold increase in short-term agriculture credit to Rs 250,000 crore (Rs 2.5 trillion) in 2007-08

* Farm debt worth Rs 65,300 crore (Rs 653 billion) waived of 360 million farmers

* Government will continue to provide additional subsidy to farmers

* Corpus of Rural Infrastructure Development Fund hiked to Rs 14,000 crore (Rs 140 billion) from Rs 5,500 crore (Rs 55 billion)

* Outlay for higher education hiked 900 per cent for 11th Five-Year Plan

* New scheme unveiled for young widows in the age group of 18-40

* New disability pension scheme introduced for age group of 18-40

* 15-point programme for welfare of minorities set up

* Record foreign direct investment of $32.4 billion attracted

* Global economic situation not encouraging

* Extraordinary situation merits extraordinary measures

* Need to consider additional fiscal measures in regular budget

* Financial sector reforms need to be accelerated

* Non-performing assets (NPAs) of public sector banks have declined

* State-run banks see NPAs drop from 7.8 per cent to 2.3 per cent in four years

* Number of loss-making state-run units down from 73 to 58

* Profit-making units up from 143 units to 158 units

* In past three years, India grew by average of over 9 per cent

* Per capita income expanded by 4.7 per cent per annum

* Fiscal deficit was brought down from 4.5 per cent to 2.7 per cent

* Revenue deficit was cut from 3.6 per cent to 1.1 per cent

* Exports increased 26.4 per cent per annum

* Foreign trade increased from 27.3 per cent to 35.5 per cent

* Tax to gross domestic product ratio expanded by 9.2 to 12.5 per cent

* Agriculture grew by 3.7 per cent per annum

* Revised estimates for 2009-09 peg plan expenditure at Rs 282,957 crore (Rs 2.83 trillion)

* Central plan increased for host of areas like telecom, rural development

* Tax collections expected to fall to Rs 627,949 crore (Rs 6.28 trillion)

* Revised revenue deficit is 4.4 per cent of GDP against 1 per cent

* Revised fiscal deficit at 6 per cent of GDP against 2.5 per cent


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