Water Resources : Availability

 

Water is a prime natural resource, a basic human need and a precious national asset. Planning, development and management of Resources“>Water Resources need to be governed by national perspectives.

India accounts for about 2.45 per cent of world’s surface area, 4 per cent of the world’s water resources and about 16 per cent of world’s Population. The total water available from https://exam.pscnotes.com/precipitation”>Precipitation in the country in a year is about 4,000 cubic km. The availability from surface water and replenishable groundwater is 1,869 cubic km. Out of this only 60 per cent can be put to beneficial uses. Thus, the total utilisable water resource in the country is only 1,122 cubic km.

There are four main sources of water:

(i) Surface water

(ii) Underground water

(iii) Atmospheric water, and

(iv) Oceanic water

(i) Surface water

Water found on the surface is called surface water. About two – third of the total surface water flows into three major rivers of the country – Indus, Ganges and Brahmaputras. The water storage capacity of reservoirs constructed in India so far is about 17400 billion cubic metres. At the time of independence, the water storage capacity was only 180 billion cubic metres. Hence water storage capacity has increased about ten times.

India’s Average annual surface run-off generated by rainfall and snowmelt is estimated to be about 1869 billion cubic meter (BCM). However, it is estimated that only about 690 BCM or 37 per cent of the surface water resources can actually be mobilised. This is because (i) over 90 per cent of the annual flow of the Himalayas rivers occur over a four month period and (ii) potential to capture such resources is complicated by limited suitable storage reservoir sites.

(ii) Underground water

It refers to all water below the water table to great depths. In the Soil, both water and air coexist in the pore spaces. A profound consequence is that the capillary water in the soil can only be extracted by plant roots, within certain range of conditions. Ground water, on the other hand can be extracted by humans through wells. Ground water and soil water together constitute the lower part of the Hydrological Cycle. The annual potential natural of ground water recharge from rainfall in India is about 342.43 km3 , which is 8.56% of total annual rainfall of the country.

Underground water is used on a large scale in the areas where the rainfall is comparatively less. Underground water is used on a large scale in Punjab, Haryana, Rajasthan, Tamil Nadu, Gujarat and Uttar Pradesh whereas Andhra Pradesh, Madhya Pradesh, Maharashtra, Karnatake and Chhattisgarh are such states where inspite of less rainfall, the use of underground water is less. There is a great need to develop underground water resources here.

(iii) Atmospheric water

Evaporation and Transpiration change liquid water into vapor, which ascends into the Atmosphere due to rising air currents. Cooler temperatures aloft allow the vapor to condense into clouds and strong winds move the clouds around the world until the water falls as precipitation to replenish the earthbound parts of the water cycle. About 90 percent of water in the atmosphere is produced by evaporation from water bodies, while the other 10 percent comes from transpiration from Plants.

(iv) Oceanic water

The Ocean plays a key role in this vital cycle of water. The ocean holds 97% of the total water on the planet; 78% of global precipitation occurs over the ocean, and it is the source of 86% of global evaporation. Besides affecting the amount of atmospheric water vapor and hence rainfall, evaporation from the sea surface is important in the movement of heat in the Climate system. Water evaporates from the surface of the ocean, mostly in warm, cloud-free subtropical seas.

Wetland Conservation Programme

 

 

Wetlands are lands transitional between terrestrial and aquatic system where the water table is usually near the water surface and land is covered by shallow water.

Essential as: control floods, water treatment, recharging of water sources, reduce sediments, check soil erosion, bulwark against encroachment by the sea, winter resort for birds and important for flora and fauna. They also provide a variety of resources

Ramsar Convention: mangroves, corals, estuaries, bays, creeks, flood plains, sea Grasses, lakes etc included

A programme on conservation of wetlands was initiated in 1987 with the basic objective of identification of wetlands of national importance, assessment of wetland resources, promotion of R&D activities and formulation and implementation of management action plans

A steering committee in each state headed by the Chief Secretary consists of members from all departments related to the wetland conservation in the state. Successful model.

India is a member of the Standing Committee of the Ramsar Convention on Wetlands, 1971

Steps forward

Make use of the traditional knowledge of the people living near the wetlands for its conservation along with the engineering solutions

Monitor the impact of implementation of management action plans

Wetlands of India under Ramsar Convention

Name State  Remark

  1. Ashtamudi WL Kerala
  2. Bhitarkanika Mangroves Orissa
  3. Bhoj WL MP
  4. Chilka Lake Orissa            2nd largest in India: 116500 ha
  5. Deepor Beel Assam
  6. East Calcutta WL WB
  7. Harike Lake Punjab
  8. Kanjli Punjab
  9. Keoladeo National Park Rajasthan
  10. Kolleru Lake AP
  11. Loktak Lake Manipur
  12. Point Calimere Wildlife and Bird Sanctuary TN
  13. Pong Dam Lake HP
  14. Ropar Punjab
  15. Sambhar Lake Rajasthan
  16. Sasthamkotta Lake Kerala
  17. Tsomoriri J&K
  18. Vembanad-Kol WL Kerala            Largest in India: 151250 ha
  19. Wular Lake J&K
  20. Chandratal HP       2nd Smallest: 49 ha
  21. Renuka HP Smallest: 20 ha
  22. Rudrasagar Tripura
  23. Upper Ganga UP       Total area of these 26 wetlands: 677131 ha
  24. Hokarsar (Hokera) J&K     Kerala has the highest area under wetlands
  25. Surinsar & Mansar J&K     J&K has the largest number of wetlands (4)
  26. Gharana (2010) J&K

 

 

 

 

The Montreux Record. Sites on the List of Wetlands of International Importance which are considered to have undergone, to be undergoing, or to be likely to undergo change in their ecological character brought about by human action may be placed on the Montreux Record and may benefit from the application of the Ramsar Advisory Mission and other forms of technical assistance.

Keoladeo national park and Loktak lake from India are included in the list

Changwon Declaration

The primary purpose of the  “Changwon Declaration on human well-being and wetlands”,adopted by Resolution X.3 of the recent meeting of the Conference of the Parties, “is to transmit key messages concerning wetland-related issues to the many stakeholders and decision-makers beyond the Ramsar community who are relevant to the conservation and wise use of wetlands, to inform their actions and decision-making”

Role of Commercial Banks

Role of https://exam.pscnotes.com/commercial-banks”>Commercial Banks

A Commercial bank is a type of financial institution that provides Services such as accepting deposits, making business loans, and offering basic Investment products

There is acute shortage of capital. People lack initiative and enterprise. Means of transport are undeveloped. Industry is depressed. The commercial banks help in overcoming these obstacles and promoting Economic Development. The role of a commercial bank in a developing country is discussed as under.

  1. Mobilising Saving for Capital Formation:

The commercial banks help in mobilising Savings through Network of branch Banking. People in developing countries have low incomes but the banks induce them to save by introducing variety of deposit schemes to suit the needs of individual depositors. They also mobilise idle savings of the few rich. By mobilising savings, the banks channelize them into productive investments. Thus they help in the capital formation of a developing country.

  1. Financing Industry:

The commercial banks finance the Industrial Sector in a number of ways. They provide short-term, medium-term and long-term loans to industry.

  1. Financing Trade:

The commercial banks help in financing both internal and external trade. The banks provide loans to retailers and wholesalers to stock goods in which they deal. They also help in the movement of goods from one place to another by providing all types of facilities such as discounting and accepting bills of exchange, providing overdraft facilities, issuing drafts, etc. Moreover, they finance both exports and imports of developing countries by providing Foreign Exchange facilities to importers and exporters of goods.

  1. Financing Agriculture-notes-for-state-psc-exams”>Agriculture:

The commercial banks help the large agricultural sector in developing countries in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide Agricultural credit. They provide finance directly to agriculturists for the Marketing of their produce, for the modernisation and mechanisation of their farms, for providing Irrigation facilities, for developing land, etc.

They also provide financial assistance for animal husbandry, Dairy farming, sheep breeding, Poultry farming, pisciculture and Horticulture. The small and marginal farmers and landless agricultural workers, artisans and petty shopkeepers in rural areas are provided financial assistance through the Regional Rural Banks in India. These regional rural banks operate under a commercial bank. Thus the commercial banks meet the credit requirements of all types of rural people. In India agricultural loans are kept in priority sector landing.

  1. Financing Consumer Activities:

People in underdeveloped countries being poor and having low incomes do not possess sufficient financial Resources to buy durable consumer goods. The commercial banks advance loans to consumers for the purchase of such items as houses, scooters, fans, refrigerators, etc. In this way, they also help in raising the standard of living of the people in developing countries by providing loans for consumptive activities and also increase the demand in the economy.

  1. Financing EMPLOYMENT Generating Activities:

The commercial banks finance employment generating activities in developing countries. They provide loans for the Education of young person’s studying in engineering, medical and other vocational institutes of higher Learning. They advance loans to young entrepreneurs, medical and engineering graduates, and other technically trained persons in establishing their own business. Such loan facilities are being provided by a number of commercial banks in India. Thus the banks not only help inhuman capital formation but also in increasing entrepreneurial activities in developing countries.

  1. Help in Monetary Policy:

The commercial banks help the economic development of a country by faithfully following the monetary policy of the central bank. In fact, the central bank depends upon the commercial banks for the success of its policy of monetary management in keeping with requirements of a developing economy.

Issue of NPA

A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.According to RBI, terms loans on which interest or installment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset.

However, in terms of Agriculture / Farm Loans; the NPA is defined as under:

  • For short duration crop agriculture loans such as paddy, Jowar, Bajra etc. if the loan (installment / interest) is not paid for 2 crop seasons , it would be termed as a NPA.
  • For Long Duration Crops, the above would be 1 Crop season from the due date.

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act has provisions for the banks to take legal recourse to recover their dues. When a borrower makes any default in repayment and his account is classified as NPA; the secured creditor has to issue notice to the borrower giving him 60 days to pay his dues. If the dues are not paid, the bank can take possession of the assets and can also give it on lease or sell it; as per provisions of the SAFAESI Act.

Reselling of NPAs :- If a bad loan remains NPA for at least two years, the bank can also resale the same to the Asset Reconstruction Companies such as Asset Reconstruction Company (India) (ARCIL).  These sales are only on Cash Basis and the purchasing bank/ company would have to keep the accounts for at least 15 months before it sells to other bank. They purchase such loans on low amounts and try to recover as much as possible from the defaulters. Their revenue is difference between the purchased amount and recovered amount

 

Commodity Exchanges in India

Though there are about 25 commodity exchanges in India, the following are the major ones:

 

Multi Commodity Exchange (MCX) – 2003 – Mumbai – MCX COMDEX index

National Commodity and Derivatives Exchange (NCDEX) – 2003 – Mumbai

National Multi-commodity Exchange (NCME) – 2001 – Ahmedabad – first

WET LAND ECOSYSTEM

 

Areas of marsh, fen, peatland/water, whether natural (or) artificial, permanent (or) temporary with water that is static (or) flowing, fresh, brackish (or) salt, including areas of marine

water the depth of which at low tide does not exceed 6 mtrs.

Wetlands Classification

  1. Inland wetland-

a)Natural- Lakes / Ponds, Ox-bow Lakes, Waterlogged, Swamp/marsh

  1. b) Manmade- Reservoirs Tank, Ash pond
  2. Costal Wetland-
  3. A) Natural- Coral reef, Tidal flat, MANGROVES, Salt marsh, Estuary, Lagoon, Creek,

Backwater, Bay

b)-manmade -• Salt pans, Aquculture

Functions of Wetlands-

  • Habitat to aquatic https://exam.pscnotes.com/flora”>Flora and Fauna, birds
  • Filtration of sediments and nutrients from surface water,
  • Nutrients recycling, Water purification Floods mitigation,
  • Ground water recharging, Buffer shorelines against erosion,
  • Genetic reservoir for various species of Plants(rice)
  • the National Lake Conservation Programme (NLCP) considers lakes as standing water
  • bodies which have a minimum water depth of 3 m, generally cover a water spread of more than ten hectares, and have no or very little aquatic vegetation.
  • Wetlands (generally less than 3 m deep over most of their area) are usually rich in nutrients (derived from surroundings and their sediments) and have .abundant Growth of aquatic macrophytes

India’s Wetland

Wetlands occupy 18.4% of the country’s area of which 70% are under paddy cultivation.

Inland wetlands >Costal Wetlands

 

National Wetlands Conservation Programme (NWCP)

  • NWCP was implemented in the year 1985-86.
  • Under the programme, 115 wetlands have been identified by the Ministry which require urgent conservation and management interventions.

Aim

  • Conservation of wetlands to prevent their further degradation and ensuring their wise
  • use for the benefit of local communities and overall conservation of Biodiversity.

Objectives

  • to lay down policy guidelines for conservation and management of wetlands in the country.
  • to provide financial assistance for undertaking intensive conservation measures in the identified wetlands
  • The Central Government is responsible for overall coordination of wetland
  • conservation programmes and initiatives at the international and national levels. It also provides guidelines, financial & technical assistance to state govt.
  • State Governments/UT Administration are responsible for management of wetlands and implementation of the NWCP for ensuring their wise-use

 

Criteria for Identification of Wetlands of National Importance

Criteria for identification of wetlands of national importance under NWCP are same as those prescribed under the ‘Ramsar Convention On Wetlands‘ and are as given below:

  1. Sites containing representative, rare or unique wetland types

example of a natural or near-natural wetland type’ found within the appropriate biogeographic region.

  1. Criteria based on species and ecological communities
  • If it supports vulnerable, endangered, or critically endangered species; or
  • threatened ecological communities.
  • If it supports populations of plant and/or animal species important for maintaining the biological diversity of a particular biogeographic region.
  • If it supports plant and/or animal species at a critical stage in their life cycles, or provides refuge during adverse conditions.

 

  1. Specific criteria based on water birds
  • If it regularly supports 20,000 or more water birds.
  • If it regularly supports 1% of the individuals in a Population of one species or subspecies of waterbirds.

 

  1. Specific criteria based on fish
  • If it supports a significant proportion of indigenous fish subspecies, species or families, life-HISTORY stages,  species  interactions  and/or  populations  that  are representative of wetland benefits and/or values and thereby contributes to global biological diversity.
  • If it is an important source of food for fishes, spawning ground, nursery and/or Migration path on which fish stocks, either within the wetland or elsewhere, depend.
  1. Specific criteria based on water/life and culture
  • If it is an important source of food and water resource, increased possibilities for recreation  and eco-tourism, improved scenic values, educational opportunities, conservation of cultural heritage (historic or religious sites)

 

Earthquakes

 

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

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

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

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

 

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

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

 

Food scarcity

 

According to FAO https://exam.pscnotes.com/food-security”>Food Security  is “a situation in which all people at all times have access to adequate quantities of safe and nutritious food to lead a healthy and active life”.

This definition requires three basic conditions to be met:

1) adequacy, i.e. supplies from domestic production, stocks and imports are sufficient to meet the nation’s needs,

2) availability i.e. stability of supply both spatially and temporally throughout the year and

3) access, i.e. the Population has sufficient purchasing power to gain access to its food needs.

India is one of the few countries which have experimented with a broad spectrum of programmes for improving food security. It has already made substantial progress in terms of overcoming transient food insecurity by giving priority to self-sufficiency in foodgrains and through procurement and public distribution of foodgrains, EMPLOYMENT programmes, etc. However, despite a significant reduction in the incidence of POVERTY chronic food insecurity persists in a large proportion of India’s population.

The range of adverse events, including reduced freshwater availability and more frequent extreme weather events, will considerably increase the risks for more efficient crop production and Livestock management. Climate-change”>Climate Change is also likely to affect Soil quality by depleting organic matter – a major contributor to Soil fertility. In extreme cases, the degradation of the agricultural Ecosystems could mean Desertification, resulting in a total loss of the productive capacity of the land in question.

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

Major components of food security are:-

  1. Production and Procurement
  2. Storage
  3. Distribution

Agriculture-notes-for-state-psc-exams”>Agriculture“>Indian Agriculture is rightly called as a gamble with Monsoon, variability in food production and rising population creates food insecurity in the nation and worst effected are the downtrodden section of the Society.

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

Need for Self-Sufficiency:

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

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

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

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

(i) NFSM- Rice;

(ii) NFSM-Wheat;

(iii) NFSM-Pulses,

(iv) NFSM-Coarse cereals and

(v) NFSM-Commercial Crops.

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

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

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

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

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

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

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

  1. foolproof arrangements for identification of poor,
  2. Effective delivery of food grains to Fair Price Shops (FPSs)

Its distribution in a transparent and accountable manner at the FPS level

Congress Sessions

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

India under the British Rule

 

The economic consequences of the British rule can be studied under three heads:

  • Decline of https://exam.pscnotes.com/indian-handicrafts”>Indian Handicrafts and progressive ruralisation of the Indian economy
  • Growth of the new land system and the commercialisation of Agriculture-notes-for-state-psc-exams”>Agriculture“>Indian Agriculture
  • Process of industrial transition of India

Decline of Handicrafts

  • While India was an exporter of Handicrafts before the Industrial revolution, the revolution reversed the character of India’s Foreign Trade
    • Increase in demand for raw material for British industries
    • Hence, steps were made to crush Indian handcrafts as well as commercialise agriculture to meet the interests of the British industries
  • Principle causes for the decline of Indian handicrafts
    • Disappearance of Princely courts
    • Hostile policy of the East India Company and the British Parliament
    • Competition of machine-made goods
    • The development of new forms and patterns of demand as a result of foreign influence
  • Economic consequences of the decline of handicrafts
    • Increased Unemployment
    • Back-to-the-land movement: handicrafts were forced to take up agriculture or become landless labourers. This increased the pressure on land. This trend of growing proportion of the working force on agriculture is described as ‘progressive ruralisation’ or ‘deindustrialisation of India’. Thus, the crisis in handicrafts and industries seriously crippled Indian agriculture.

Land System during 1793-1850

  • 1793: permanent settlement
  • Zamindari, Ryotwari, Mahalwari systems
  • Absentee landlordism emerged
  • The result of the whole change in the land system led to the emergence of subsistence agriculture
  • It helped the concentration of economic power in the hand of absentee landlords and moneylenders in rural India.

Commercialisation of Agriculture (1850-1947)

  • Define: Production of crop for sale rather than for family consumption
  • What distinguished commercial agriculture from normal sales of marketable surplus was that it was a deliberate policy worked up under the pressure from British industries. It was thus forced upon the Indian peasantry.
  • Resistance: Indigo revolution etc
  • Why CA? Industrial Revolution
  • Impact of railways and road transport: Railways and road transport made possible a huge expansion in cash Cropping, for national and international markets, and production regimes across the subcontinent were placed in a new context of opportunity
  • Impact of CA
    • Mass movement to commercial agriculture caused decline in food production, increase in prices and famines.
    • Halted the process of industrialisation in India

 

SOURCE OF FINANCE

 

Sources of finance are the most explored area especially for the entrepreneurs about to start a new business. It is perhaps the toughest part of all the efforts. There are various sources of finance classified based on time period, ownership and control, and source of generation of finance.

 

The process of selecting right source of finance involves in-depth analysis of each and every source of finance. For analyzing and comparing the sources of finance, it is required to understand all characteristics of the financing sources. There are many characteristics on the basis of which sources of finance are classified.

On the basis of a time period, sources are classified into long term, medium term, and short term. Ownership and control classify sources of finance into owned capital and borrowed capital. Internal sources and external sources are the two sources of generation of capital. All the sources of capital have different characteristics to suit different types of requirements. Let’s understand them in a little depth.

 

ACCORDING TO TIME-PERIOD:

 

Sources of financing a business are classified based on the time period for which the money is required. Time period is commonly classified into following three:

  • Long Term Sources of Finance:

 

Long-term financing means capital requirements for a period of more than 5 years to 10, 15, 20 years or maybe more depending on other factors. Capital expenditures in fixed assets like plant and machinery, land and building etc of a business are funded using long-term sources of finance. Part of working capital which permanently stays with the business is also financed with long-term sources of finance. Long term financing sources can be in form of any of them:

 

  • Share Capital or Equity Shares
  • Preference Capital or Preference Shares
  • Retained Earnings or Internal Accruals
  • Debenture / Bonds
  • Term Loans from Financial Institutes, Government, and Commercial Banks
  • Venture Funding
  • Asset Securitization
  • International Financing by way of Euro Issue, Foreign Currency Loans, ADR, GDR etc.

 

  • Medium Term Sources of Finance:

 

Medium term financing means financing for a period of 3 to 5 years. Medium term financing is used generally for two reasons. One, when long-term capital is not available for the time being and second, when deferred revenue expenditures like advertisements are made which are to be written off over a period of 3 to 5 years. Medium term financing sources can in the form of one of them:

 

  • Preference Capital or Preference Shares
  • Debenture / Bonds
  • Medium Term Loans from
    • Financial Institutes
    • Government, and
    • Commercial Banks
  • Lease Finance
  • Hire Purchase Finance.

 

  • Short Term Sources of Finance: Short term financing means financing for a period of less than 1 year. Need for short term finance arises to finance the current assets of a business like an inventory of raw material and finished goods, debtors, minimum cash and bank balance etc. Short term financing is also named as working capital financing. Short term finances are available in the form of:

 

  • Trade Credit
  • Short Term Loans like Working Capital Loans from Commercial Banks
  • Fixed Deposits for a period of 1 year or less
  • Advances received from customers
  • Creditors
  • Payables
  • Factoring Services
  • Bill Discounting etc.

 

There are two main categories of sources from which the firm can get the required funds for their business. These are:

 

 (1) Internal sources; and

(2) External sources.

When the businessman invests his own money (called owner’s capital), and retains a part of the profits earned in the business it constitute the internal sources of finance. It is an integral part of every business organisation and it is cost effective. But, this source has its own limitations. Hence the business houses have to resort to the external sources of finance. The various external sources from where businessmen can get the finance include, friends and relatives, banks and other financial institutions, moneylenders, capital market, manufacturers and producers, customers, foreign financial institutions and agencies, etc. It is observed that the scope of raising funds also depends upon the nature and form of business organisation.

 

The following are the usual sources of finance. (a) Capital Market (b) Financial Institutions (c) Public Deposits (d) Commercial Banks (e) Leasing Companies (f) Investment Trusts (g) Retained Profits

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

 

 

 

 

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

 

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

 

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

 

 

  1. COMMUNICATION

 

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

 

Communication Cycle :-

 

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

 

Classification of Communication :-

 

  • On the basis of Organizational Structure:

 

  • Formal and Informal Communication

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

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

 

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

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

 

 

 

  • On the basis of Direction

 

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

 

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

 

 

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

 

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

 

  • On the basis of Mode of Expression

 

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

 

 

 

 

 

 

 

 

 

 

  1. SUPERVISION

 

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

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

 

Functions of a Supervisor

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

  1. MOTIVATION

 

Motivation is one of the important elements of directing.

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

 

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

 

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

Maslow’s Hierarchy of Needs:-

 

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

 

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

 

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

 

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

 

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

 

 

Financial and Non-financial Hierarchy Theory

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

  1. LEADERSHIP

 

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

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

Leadership and Management are two separate concepts.

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

 

Leadership Styles :

 

  • Autocratic or Authoritarian Style : 2 types

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

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

 

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

 

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

 

 

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

 

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