202110248-TRIUMPH-STUDENT-WORKBOOK-SOCIAL_STUDIES-G09-PART2

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Table of Contents 1 20 8 SERVICE ACTIVITIES IN INDIA 38 9 CREDIT IN THE FINANCIAL SYSTEM 62 10 PRICES AND COST OF LIVING 81 11 THE GOVERNMENT BUDGET AND TAXATION 100 19 HUMAN RIGHTS AND FUNDAMENTAL RIGHTS 115 20 WOMEN PROTECTION ACTS 134 21 DISASTER MANAGEMENT 154 22 TRAFFIC EDUCATION PROJECT BASED QUESTIONS TABLE OF CONTENTS

8. SERVICE ACTIVITIES IN INDIA SESSION 1 SERVICE SECTOR 1.1 Mind Map Service Activities Importance of service sector and some challenges. SESSION 1. SERVICE SECTOR 1

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 1.2 Terminology 1. Call centres: Located in some Indian cities but they provide service to people located across the globe using telecommunications links. 2. Service activities: Specialised services required by people and business. These activities do not produce any commodities. 1.3 Improve Your Learning Conceptual Understanding Q1. What is meant by the term “service activities?” [Refer to TB page 103 Q1] A. 1) Service rendered by different people in a specified activity are known as service activities. Given below are some categories of service provider: a )Teachers’ Services b) Health and Medical Services rendered by doctors and para–medical staff c) Service of people working in army, navy and airforce d) Financial activities of banks and insurance companies e) Trading activities of banks and insurance companies All the above services can be termed as service activities. It should be remembered that none of services listed above do not: Following are some of the important points about services activities: I) Service activities do not produce any tangible commodity like paddy or cloth. II ) Service activities here refer to ‘the nature of work. III) “Service activities” in this context of work does not mean something that is done ”free of cost” or “out of love or devotion”. IV) All the above people earn money by rendering these “service activities”. This is their livelihood. V) These service activities are required for agriculture and industrial activities ( Agricultural or Industrial Casual workers ) SESSION 1. SERVICE SECTOR 2

CHAPTER 8- SERVICE ACTIVITIES IN INDIA Q2. List five service activities and give your reasons why they are not to be considered as either agricultural or industrial activities. [Refer to TB page 103 Q2] A. 1) Health and Medical Services: A doctor examines patients, prescribes medicines and monitors their progress. Other para –medical staff help doctors. 2) Trade: Goods (whether agriculture or manufacture goods) are to be transported to distributors. Distributors, in turn, supply goods to wholesalers who in turn supplies them to retailers. And consumers purchase from the retailer. These are trading activities. 3) Financial Services: Banks issue loans to all farmers and entrepreneurs and facilitate agriculture and industrial activities. Insurance companies insure goods against risk. 4) Defence: People who work in all the armed forces such as army, navy and airforce. 5) Personal Service: Workers who do domestic work, laundry, cleaning, dyeing, hairdressing etc., In all the above example we can see that services are rendered. Nothing new is produced here. In agriculture, we produce some crops and in industrial activity we work on raw materials and convert them into finished goods. Here in the above examples, nothing tangible is produced. These are special kind of activities that help agriculture and industry and also provide service that people require. So we cannot consider the service activities as either agricultural or industrial activities. Q3. How can service activities help in the overall development of a country? [Refer to TB page 103 Q3] A. 1) Overall development of a country depends on developmental initiatives involving setting up of establishments like educational institutions, hospitals etc. 2) Other developmental activities include expansion of infrastructural facilities such as transporta- tion, telecommunications, banks, insurance services and other services like trading and public administration. 3) All these activities are service activities that help agriculture and industry and facilitate overall development of our country. Q4. How are agricultural and industrial activities related to service? [Refer to TB page 103 Q4] A. Agriculture and industrial activities need the following services of various sectors. SESSION 1. SERVICE SECTOR 3

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 1) Transportation helps in transferring raw materials from the mines to industrial factories then again in carrying finished goods from industry to markets 2) Roads, railways etc consisting of man–power to transport finished products 3) Marketing services 4) Import and export services 5) Storage services like godowns and cold storage. 6) Financial services like banking loan and insurance services 7) Health and education services help in maintaining good health of human resources, to be able to do work 8) Without education there would be no skills acquired to perform different tasks. 8) Education, acquired skill–sets, communication system, information technology ––all are vital but only when agricultural and industrial development is on a constant increase. 1.4 Key Concepts i. Agriculture, industries and service activities are important productive activities in India. ii. Service activities are required for agricultural and industrial activities. iii. People engaged in service activities do not produce any commodity. iv. Teachers, all the administrative staff and their activities constitute education services. A doctor provides health and medical services. v. Public administration is providing public services under village and town panchayats, state and central governments etc. Banks provide financial activities. SESSION 1. SERVICE SECTOR 4

SESSION 2 LACK OF JOB OPPORTUNITIES 2.1 Mind Map 2.2 Terminology 1. Outsourcing: It is an arrangement in which one company provides services for another company that could also be or usually have been provided in–house. SESSION 2. LACK OF JOB OPPORTUNITIES 5

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 2.3 Improve Your Learning Conceptual Understanding Q1. Why are service sector activities becoming important? [Refer to TB page 103 Q6] A. 1) Service sector activities include all the services like banking and finance, trade and commerce, transport and communications, health, education, personal services etc., 2) Service sector activities include special kind of services that help agriculture and industry and provide a lot of services that people require. 3) Provision of education and health fulfills the aim of social welfare. 4) Trade and commerce help in bringing buyers and sellers together. 5) Transportation is necessary for the movement of men and material from one place to another. 6) The development of telecommunications has cut the geographical boundaries and helps in globalization. 7) They provide information about new markets and products. 8) They are considered as means of modernization. 9) They provide employment opportunities and are very useful in raising the standard of living of the people. Due to the above reasons the service sector activities are indeed very important for country like India which is making its presence felt on the World map. Q2. Service activities cannot expand beyond a level unless agriculture and industries develop. Explain. [Refer to TB page 103 Q7] A. 1. Development of a country is always measured in terms of production of goods and services. 2. Increase in production is possible only through the development of agriculture and industry. 3. Service activities are necessary to modernize agricultural and industrial sectors. SESSION 2. LACK OF JOB OPPORTUNITIES 6

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 4. Development services without an increase in production is a waste and simply not possible. Unless there in surplus production, development and service would not exist . For eq., if there are no mobile phone, there will be no network and hence no service will be provided. 5. Hence, service activities cannot expand beyond a level unless agriculture and industries de- velop. 6. In fact all three sectors need to go hand in hand. Q3. How can service sector reduce educated unemployment in India? [Refer to TB page 103 Q8] A. 1) There has been tremendous change in the communication technology which has opened a wide range of jobs for educated people. 2) Business Process Outsourcing (BPO) has brought in new kinds of employment opportunities. 3) They provide services to people located across the globe using telecommunication links. 4) The entertainment industry creates jobs to work in various print media firm and cable television channels. 5) We see number of internet cafes and telephone booths in most of the cities and towns. 6) The advertising industry too has led to brought new job opportunities. 7) Many new jobs are available in banking and insurance sectors. Hence service sector can reduce educated unemployment to a great extent in our country. Reading the Text, Understanding and Interpretation Q1. The growth of service is sustainable and can make India a rich country. Do you agree with this statement? Elaborate. [Refer to TB page 103 Q5] A. 1) There is a lot of change in technology and by exporting our services i.e., by “BPOs” or “Out- sourcing”, we are earning a lot of foreign exchange. 2) Service sector constitutes one–fourth of the jobs people do in India. 3) 90.5 lakhs and 25.3 lakhs of people are involved in community, providing socio–personal ser- vices and transport and communications respectively. SESSION 2. LACK OF JOB OPPORTUNITIES 7

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 4) Many jobs are available for educated people in service sector. 5) Due to the development of telecommunications and information technology, the world has be- come a global village. 6) Due to the establishment of multinational companies, we are getting many projects from foreign countries. 7) The standard of living of the people has been on a rise for the last two decades. Hence, the growth of service sector is sustainable and can make India a rich country, without any doubt. Q2. Read the 9th paragraph of this chapter “Working people engaged” and answer the following: [Refer to TB page 103 Q10] i) What are the service activities required for agriculture and industries? A. Students activity. Information Skills Q1. Is there any migration of the labourers from your area find out the reasons for the migration?[Refer [Refer to TB page 103 Q9] A. Students Activity SESSION 2. LACK OF JOB OPPORTUNITIES 8

SESSION 3 JOBS IN INFORMATION TECHNOLOGY AND DESIRED SERVICES 3.1 Mind Map Jobs in IT 3.2 Terminology 1. Information technology: Internet, E–seva, E–mail etc. are technology which supports activi- ties involving the creations, storage, manipulation, communication of information together with their methods, management and application. 2. Economic development: Quantitative and qualitative improvement of a country. 3. Retail trade: Where a retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale and then sells small quantities to the consumer for profit. SESSION 3. JOBS IN INFORMATION TECHNOLOGY AND DESIRED SERV... 9

CHAPTER 8- SERVICE ACTIVITIES IN INDIA 3.3 Improve Your Learning Mapping Skills Q1. Observe the map given on page 104. Locate the software technology parks of our country in the outline map of India. [Refer to TB page 103 Q11] A. SESSION 3. JOBS IN INFORMATION TECHNOLOGY AND DESIRED SERV... 10

CHAPTER 8-SERVICE ACTIVITIES IN INDIA —— CCE Based Practice Questions —— AS1-Conceptual Understanding Very Short Answer Type Questions 1. Match the following. Column A Column B i. Information technology a. Buying and selling activities ii. BPOs iii. Outsourcing b. Highly skilled engineers iv. Public Administration c. Workers of various government depart- v. Trade ments d. Recruiting from outside e. Call centres 2. Answer the following questions in one sentence. (i) Which activities constitute the major sector of economy? (ii) How do the BPOs provide services to people located across the globe? (iii) Name the two important productive activities in India? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 11

CHAPTER 8-SERVICE ACTIVITIES IN INDIA (iv) Whom do the IT companies employ in their companies? (v) How are paddy and vegetables transported from villages? (vi) How have the new activities emerged in banking and insurance sectors? (vii) Mention some of the service oriented activities. (viii) Why have many industries diverted a major section of their activities to service sector? (ix) How has the BPO helped us? (x) Why have the workers taken up low income service professions? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 12

CHAPTER 8-SERVICE ACTIVITIES IN INDIA 3. Fill in the blanks. (xi) The workers have low employment opportunities in service sector. (xii) IT companies get from foreign companies. (xiii) FDI will increase agricultural wages in the . (xiv) contribute to economic development of the country. (xv) In outsourcing we get work done from . (xvi) The wholesale traders earn profit from farmers by lending money and buying their produce in return for a . (xvii) The companies that has number of branches in different countries is known as . (xviii) Service jobs bring a lot of income to the families but at the same time bring .. (xix) Business Process has brought in new kind of employment opportunities for many young people. (xx) The growth of service sector in India may not help in reducing in the country. Short Answer Type Questions 4. Answer the following questions in 3-4 sentences. (i) What are the advantages of working in Information Technology companies? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 13

CHAPTER 8-SERVICE ACTIVITIES IN INDIA (ii) What do you know about the new FDI policy of 2012? (iii) How do the Paddy traders earn their profit? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 14

CHAPTER 8-SERVICE ACTIVITIES IN INDIA Long Answer Type Questions 5. Answer the following questions in 6-8 sentences. (i) What are the factors responsible for increase in the service sector? AS3-Information Skills Long Answer Type Questions 6. Answer the following questions in 6-8 sentences. (i) Read the following text, and answer the questions given below: The shortfall of different medical professionals has resulted in the uneven distribution of all cadres of health workers, medical and nursing colleges, nursing and ANM (Auxiliary Nurse and Midwife) schools, and allied health institutions across the States with wide disparity in the quality of education. The uneven distribution of professional colleges and schools has also led to an imbalance both in the production capacity and in the quality of education and training, leading to poor health outcomes. By empowering allied health professionals or paramedics, as they are known at present, they can be the leaders of change, playing critical role in improving the reach of health services to underserved areas. i. What is the reason for the uneven distribution of all cadres of health workers? ii. What is the problem due to the uneven distribution of professional colleges and schools? iii. How can the paramedics be the leaders of change? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 15

CHAPTER 8-SERVICE ACTIVITIES IN INDIA iv. How can health services be improved in rural areas? AS4-Reflection on Contemporary Issues and Questioning Long Answer Type Questions 7. Answer the following questions in 6-8 sentences. (i) Is the new Foreign Direct Investment in Retail sector a boon for the foreign investor companies? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 16

CHAPTER 8-SERVICE ACTIVITIES IN INDIA AS6-Appreciation and Sensitivity Short Answer Type Questions 8. Answer the following questions in 3-4 sentences. (i) Why do the MNCs purchase more of the produce from the farmers? CHAPTER 8. SERVICE ACTIVITIES IN INDIA 17

CHAPTER 8-SERVICE ACTIVITIES IN INDIA Objective Questions AS1-Conceptual Understanding 9. Choose the correct answer. (i) Service activities constitute about of all the jobs people do in India. (A) one –third (B) one –fourth (C) half (D)two –thirds (ii) Since the early there has been a change in the communication technology. (A) 1990s (B) 1980s (C) 1970s (D) 1960s (iii) Many information technology companies were established in (A) districts (B) villages (C)metropolitan cities (D) towns (iv) Closure of many industries has created unemployment in areas. (A) urban (B) rural (C) villages (D) coastal (v) Many youngsters dream of becoming a/an (B) mechanical engineer (A) electrical engineer (C)software engineer (D)civil engineer (vi) India’s new Foreign Direct Investment policy was introduced in___________. (A) 2010 (B) 2011 (C) 2012 (D) 2013 CHAPTER 8. SERVICE ACTIVITIES IN INDIA 18

CHAPTER 8-SERVICE ACTIVITIES IN INDIA (vii) About _________ of agricultural goods are wasted due to lack of proper storage facilities. (A) 50 to 60% (B) 40 to 50% (C)10 to 20% (D)20 to 40% (viii) BPO means ______ (A) Business Post Organisation (B) Business Processes Outsourcing (C)Best Packaging Outlet (D)None of the above (ix) The full form of ANM is (A) Auxiliary nurse and midwife (B) Army and Navy Men (C)Andhra nurse mandals (D)All nurses and midwives (x) India faces an acute shortage of over skilled service professionals in the health. (A) 34 lakhs (C)54 lakhs (B) 44 lakhs (D)64 lakhs CHAPTER 8. SERVICE ACTIVITIES IN INDIA 19

9. CREDIT IN THE FINANCIAL SYSTEM SESSION 1 BANK - DEPOSITS AND MONEY 1.1 Mind Map 1.2 Terminology 1. Demand deposits: Deposits in the bank accounts which can be withdrawn on demand. 2. Economic activities: Activities through which people earn money. SESSION 1. BANK - DEPOSITS AND MONEY 20

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM 1.3 Improve Your Learning Appreciation and Sensitivity Q1. What are the services rendered by the banks in fulfilling the needs of farmers? [Refer to TB page 117 Q7] A. Reserve Bank of India has taken breakthrough steps in accessibility of easy credit to small farm- ers and cultivators. • Banks operate in rural areas either through branches or through Business Correspondents (BC). • A business correspondent provide basic banking services and facilities through Micro ATM (Terminal). • These Business Correspondents educate rural people open accounts, save money and also take loans from the banks. • Bio–metric Smart Card Identification systems are used to open these accounts. • AEPS ( Aadhar Enabled Payment Systems ) offered by the NPCI ( National Pay- ments Commission of India ) to banks, financial institutions of India, using Aadhar number and online UAIDI authentication through their respective Business Correspondent service centres. • The customer needs his or her Aadhar numbers with the bank offering the AEPS services. • These AEPS provide mainly four services–––a) Cash Withdrawal b) Cash deposits c) Bal- ance enquiry and d) Fund transfer. • RBI also makes sure that banks provide loans to small farmers and small borrowers apart from big businesses. • NABARD (National banks for agricultural and rural development) which facilitates formal credit organizations in rural areas. • Still more than 2/3 rd of farmers are not able to avail bank loans. Nearly 9 crores of farmers depend on informal source of credits for their cultivation needs. • The main lacuna in formal source of credit is that they have many elaborate rules and regu- lations which they expect their customers to follow which the informal credit providers do not have but rate of interest is very high. • Therefore, the banks and other co–operative societies should lend more and more loans to the farmers on easy and understandable terms which would lead to higher incomes for the lenders and benefit large number of farmers and would also free them from clutches of blood sucking money–lenders. • The data shows that only 15% and 47% of very poor farmers and poor farmers avail loans from banks etc respectively, whereas 72 to 90% of loans from formal sources are availed by well–off and rich households of rural areas. SESSION 1. BANK - DEPOSITS AND MONEY 21

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM A lot needs to be done by the banks, co–operative societies and institutions like NABARD for poor farmers, to make it easy for them to cultivate, which is the basic life–line of them. 1.4 Key Concepts i. Different kinds of credit arrangements are an important component of financial system of our country and play a crucial role. ii. Modern forms of money include currency –paper notes and coins and bank deposits. iii. Bank accept the deposits and also pay an interest rate on the deposits. iv. People’s money is safe with the banks and it earns an interest.The deposits in the bank accounts can be withdrawn on demand, called demand deposits. v. The modern forms of money –currency and deposits –are closely linked to the working of the modern banking system. vi. The entire banking system is supervised by the government’s Reserve Bank of India. vii. The Reserve Bank issues guidelines for this system and examines its working so that people’s trust is maintained. viii. Banks mediate between the depositors and the borrowers. ix. Banks charge a higher interest rate on loans than what they offer on deposits. SESSION 1. BANK - DEPOSITS AND MONEY 22

SESSION 2 BANKS - CREDIT AND LOAN 2.1 Mind Map Why people require credit 2.2 Terminology 1. Cooperative societies: A Cooperative Society is an autonomous association of persons united voluntarily to meet common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. 2. Commercial bank: A bank that offers services to the general public and to companies. 3. Informal sources of credit: Moneylenders, traders, employers etc. who are able to lend at whatever interest rate they can force upon. SESSION 2. BANKS - CREDIT AND LOAN 23

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM 2.3 Improve Your Learning Conceptual Understanding Q1. How are high interest rates on loans harmful? [Refer to TB page 117 Q2] A. 1) Higher interest rates on loans means a larger part of the earnings of the borrowers is used to repay the loan. 2) Borrowers will have less income left for themselves. 3) The high rate of interest means the amount to be repaid is greater than the income of the borrower. 4) Debt will be increasing day–by–day. 5) High interest rate and increasing debt sometimes lead farmers to commit suicide. Information Skills Q1. Talk to a banker and find out what are the purposes for which people in urban areas generally take loans? [Refer to TB page 117 Q4] A. According to a banker, the purposes for which people in urban areas generally take loans are – 1) Personal loans –for personal requirements (travelling, medical treatment, renovation of home etc.) 2) Home loans –to buy or build a home 3) Education loans –for higher education of their children. 4) Car loans –to buy a car. Q2. Most of the credit needs of the poor households are met from informal sources. The dependence of richer households on informal credit is less. Do you agree? Use the data from Table 1 to support your answer. [Refer to TB page 117 Q1] A. i. More than 2/3rd of farmers don’t have access to bank loan facilities. ii. The rich households are getting 90% of their credit from formal sources and 10% from infor- mal sources. SESSION 2. BANKS - CREDIT AND LOAN 24

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM The poor households are getting 15% of their credit from formal and 85% from the informal sources. i. Yes, I agree that the dependence of richer households on informal credit is less. ii. The dependence of poor households on informal credit is more. 2.4 Key Concepts i. The increased availability of consumer goods in the market and arrangements for finance has also increased the variety of credit arrangements. ii. In the rural areas, the main demand for credit is for crop production. iii. Farmers usually take crop loans at the beginning of the season and repay the loan after harvest. Repayment of the loan is crucially dependent on the income from farming. iv. If the crop fails, credit pushes the person into a debt trap. v. In addition, lenders may demand collateral (security) against loans. vi. Depending on the nature of the lender and the borrower, the terms of credit vary. vii. Money–lenders are an important section of informal credit providers in India. viii. The RBI sees that the banks give loans not just for profit–making businesses or traders but also to poor farmers, small scale industries etc. ix. Bank loans require proper documents and collateral. x. Absence of collateral is one of the major reasons which prevent the poor from getting bank loans. SESSION 2. BANKS - CREDIT AND LOAN 25

SESSION 3 SELF HELP GROUPS 3.1 Mind Map SESSION 3. SELF HELP GROUPS 26

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM 3.2 Improve Your Learning Conceptual Understanding Q1. What is the difference between a bank loan and a loan through SHG? [Refer to TB page 117 Q5] A. BANK LOANS i. Bank loan is taken individually. ii. Collateral is compulsory and proper papers must be submitted. iii. The bank loan can be in thousands to a few lakhs. iv. Can be short–term to long–term SHG LOANS i. Loan through SHG is taken collectively. Documents and collateral are not needed. ii. The amount of loan sanctioned is usually less. iii. Generally these loans are for short–term. iv. Rate of interest is low compared to bank loan. v. In case of non–repayment of loans the whole group takes the responsibility whereas in case of bank loans only borrower is responsible. Reading the Text, Understanding and Interpretation Q1. Read paragraph 3rd under the heading of “Self Help Groups for the Poor” and answer the ques- tion. How are SHGs working in your area? [Refer to TB page 117 Q6] SESSION 3. SELF HELP GROUPS 27

CHAPTER 9- CREDIT IN THE FINANCIAL SYSTEM A. i. In our locality there are around 20 Self Help Groups. ii. Each group has 15 –20 members, mostly women. iii. They save small amounts of money in the bank. iv. The group is regular in savings. v. After two years of regular savings, the group becomes eligible for a loan from the bank. vi. Loan is sanctioned in the name of the group. vii. The SHGs are responsible for the repayment of the loan. viii. Loans create self–employment opportunities. ix. Some members purchase sewing machines, embroidery machines and some others invest in papad–making and petty pan shops. x. These SHGs empower women as they become financially self–sufficient. Reflection on Contemporary Issues and Questioning Q1. What is the basic idea behind the SHGs for the people? Explain in your words. [Refer to TB page 117 Q3] A. i. To organize and help the rural poor financially. ii. Collect the savings from the rural poor, particularly women to empower them. iii. To create self–employment opportunities. iv. The SHG can get loan from the bank without any collateral, after a period of two years of regular savings. v. To protect the poor from informal loans, especially from the debt–trap. 3.3 Key Concepts i. Absence of collateral is one of the major reasons which prevent the poor from getting bank loans. ii. A typical SHG has 15–20 members, usually belonging to one neighborhood, who meet and save regularly. iii. SHGs are the building blocks of financial self sufficiency of the rural and urban poor. iv. Financial literacy helps one to have better financial planning, puts them in a better position to achieve their financial goals and protect oneself from frauds and debt traps. v. Financial literacy facilitates easy access to financial services. vi. Information is available in brochures and pamphlets prepared by RBI and other banks. vii. RBI also has its website from where necessary information can be collected. SESSION 3. SELF HELP GROUPS 28

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM —— CCE Based Practice Questions —— AS1-Conceptual Understanding Column B Very Short Answer Type Questions a. Formal & informal sector 1. Match the following. Column A i. Guarantee to Lenders ii. Types of loans b. Comic on financial literacy iii. Aadhar Card c. Collateral iv. Raju and the money tree d. Self help groups v. SHG e. UIDAI 2. Answer the following questions in one sentence. (i) What does the modern form of money include? (ii) How can better financial planning be achieved? CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 29

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM (iii) What do banks accept from their customers? (iv) What are the social issues discussed in the SHGs? (v) What do banks pay for the money deposited in it? (vi) What are the decisions taken by the SHG members? (vii) What does financial literacy facilitate? (viii) What loans do the richer households receive? CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 30

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM (ix) What is the website of RBI? (x) Name the co–operatives that provide cheap credit in rural areas? 3. Fill in the blanks. (xi) The formal credit providers follow certain rules and regulations framed by the . (xii) The charge high rate of interest and harass the poor followers. (xiii) Informal credit providers evolve their procedures and do not follow government rules. (xiv) A typical self help group has members. (xv) When the amount to be repaid is greater than the income of the borrower, it leads to increasing . (xvi) The self help group makes the financially self reliant. (xvii) Poor householders are still dependent on credit. (xviii) Financially self–sufficient on financial literacy is available for children RBI website. (xix) Absence of is one of the major reasons which prevent the poor from getting bank loans. (xx) For the benefit of illiterate persons, the state level bankers committee has prepared an . CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 31

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM Short Answer Type Questions 4. Answer the following questions in 3-4 sentences. (i) What are the various types of loans? (ii) What is meant by credit (loan)? (iii) What is called the terms of credit? 32 CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM AS3-Information Skills Long Answer Type Questions 5. Answer the following questions in 6-8 sentences. (i) Read the following table and answer the following questions: Description of the borrower Households Formal credit Total credit Total credit Poor households 15 85 100 Households with few assets 47 53 100 Well–off households 72 28 100 Rich households 90 10 100 i. How many household borrowers are mentioned in the above table? ii. Which type of households occupies the first place in the formal credit? iii. What is the percentage of informal credit occupied by the poor households? iv. How much percentage of formal credit do the poor households receive? v. Draw a pie chart showing the sources of credit for the rural households in India. CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 33

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM AS4-Reflection on Contemporary Issues and Questioning Long Answer Type Questions 6. Answer the following questions in 6-8 sentences. (i) Why are the farmers adversely affected by loans? (ii) Why do people require more credit in the present day? CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 34

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM AS6-Appreciation and Sensitivity Long Answer Type Questions 7. Answer the following questions in 6-8 sentences. (i) Do you think that it is appropriate to sanction loans on the collateral? CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 35

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM Objective Questions AS1-Conceptual Understanding 8. Choose the correct answer. (i) Banks in India hold about of their deposits as cash. (A) 50 percent (B) 25 percent (C)20 percent (D)15 percent (ii) The people’s money is with the banks. (A) safe (B) unsafe (C) non–productive (D)both B and C (iii) The ______has been taking steps for improving the financial access to people in rural areas. (A) Private sector Banks (B) Public sector banks (C)Reserve Bank of India (D)Auditor General’s office (iv) The has to ensure that the supply of notes and coins is in adequate amount. (A) Government (B) People (C)Bank Managers (D) Clerks (v) Banks keep a __________ percent of people’s deposit as cash with themselves. (A) 40% (B) 15% (C) 60% (D) 19.5% (vi) Banks use a major portion of the deposits to grant (A) charity (B) salaries (C) loans (D)welfare activities CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 36

CHAPTER 9-CREDIT IN THE FINANCIAL SYSTEM (vii) As business and trade increases, people’s requirement of loans also (A) increases (B) decreases (C)remains constant (D)None of the above (viii) In the rural areas, the main demand for credit is for (A) soil improvement (B) crop production (C) harvesting (D)cattle rearing (ix) The unique identification number given to every citizen of India is called as (A) Ration card (B) Aadhar card (C)Pan card (D)Voter card (x) More than _________ of farmers do not have access to bank loan facilities. 1 1 (A) (B) 2 3 (C) 1 (D) 2 4 3 CHAPTER 9. CREDIT IN THE FINANCIAL SYSTEM 37

10. PRICES AND COST OF LIVING SESSION 1 FAMILY BUDGET 1.1 Mind Map SESSION 1. FAMILY BUDGET 38

CHAPTER 10- PRICES AND COST OF LIVING 1.2 Terminology 1. Standard of living: The amount of money and level of comfort that a particular person or group has. 1.3 Improve Your Learning Conceptual Understanding Q1. Why is there a need to regulate prices? [Refer to TB page 128 Q1] A. 1) People are always worried about the rise in prices. 2) When prices increase, it affects their consumption, as they have to pay more for everything. 3) As income is fixed, consumer has to reduce their expenditure. 4) Cost of living rises. 5) Standard of living falls. 6) Otherwise, people have to borrow money to meet their rising expenditure. They have to repay with interest charges. 7) So, there is a need to regulate prices. Q2. How are prices fixed by a seller/producer? [Refer to TB page 128 Q2] A. 1) Prices are what must be given in exchange for something. 2) Prices rise when demand is in excess and fall when supply is in excess. 3) Prices include the average cost of producing an item, plus a profit margin, the size of which is loosely determined by market conditions. Q3. Differentiate cost of living from standard of living. [Refer to TB page 128 Q3] A. 1) The amount of money that people need to pay for food, clothing and shelter is called cost of living. 2) Standard of living refers to the quantity of material goods and services that ensures a comfort- able life. 3) When cost of living rises, standard of living falls. Reflection on Contemporary Issues and Questioning Q1. Which groups can get higher incomes whenever there is inflation? [Refer to TB page 128 Q5] SESSION 1. FAMILY BUDGET 39

CHAPTER 10- PRICES AND COST OF LIVING A. 1) People working in Central and State Government offices get additional payment called Dear- ness Allowance. 2) People doing business activities. They recover the higher cost of living by increasing the prices of goods they sell. 3) Dry cleaners, barbers, lawyers, doctors etc. providing services. They charge more for their services. 4) These groups can get higher incomes whenever there is inflation. Q2. Who is affected most by increase in cost of living? Why? [Refer to TB page 128 Q4] A. 1) Daily wage workers, hired workers, people with fixed income etc., are affected the most. 2) As these people earn fixed incomes, it affects their standard of living. 3) They cannot afford to buy the same number of goods as before. 4) They have to reduce their consumption of these goods and services. 5) It is difficult to reduce the minimum consumer expenditure. 1.4 Key Concepts i. The increase in the prices of goods reduces the consumption of many goods. ii. Standard of living refers to the quantity of material goods and services that ensures a comfort- able life. iii. People working in Central and State Government offices and in some organizations get a ratio- nal payment called “Dearness Allowance” or DA. iv. When prices rise by a certain percentage, government employee’s salary is also increased by the government in the form of additional DA. v. People doing business activities recover the higher cost of living, by increasing the prices of goods they sell. vi. The agricultural labourers, construction workers or factory workers demand their employers to raise their wages when prices increase. vii. The trade unions are compelled to go for strikes for higher wages, as it gets difficult for the workers to meet the ends. SESSION 1. FAMILY BUDGET 40

SESSION 2 HOW INFLATION IS MEASURED 2.1 Mind Map 2.2 Terminology 41 1. Inflation: Continuous rise in prices over a period. SESSION 2. HOW INFLATION IS MEASURED

CHAPTER 10- PRICES AND COST OF LIVING 2.3 Improve Your Learning Conceptual Understanding Q1. Write True or False against the statement: [Refer to TB page 129 Q13] a) Inflation increases the standard of living of the people. b) Value of money is shown by changes in its purchasing power. c) Change in cost of living does not affect the standard of living of pensioners. d) Central Government workers are compensated for inflation by rise in DA. e) WPI measures changes in the price level of only consumer goods. A. a) Inflation increases the standard of living of the people. (F) b) Value of money is shown by changes in its purchasing power. (T) c) Change in cost of living does not affect the standard of living of pensioners. (F) d) Central Government workers are compensated for inflation by rise in DA. (T) e) WPI measures changes in the price level of only consumer goods. (F) Information Skills Q1. The following table shows the Wholesale Price Indices of industrial goods. Prepare a line diagram and answer the questions that follow. [Refer to TB page 129 Q14] Year Coal Cotton cloth Fertilizers Cement Iron, Steel & Ferro Alloys 2005 118 99 102 102 100 ––06 97 104 119 105 2006–07 118 99 106 138 119 103 107 139 137 2007—08 122 107 108 149 124 115 117 151 136 2008—09 151 2009—10 156 2010–11 165 SESSION 2. HOW INFLATION IS MEASURED 42

CHAPTER 10- PRICES AND COST OF LIVING a) Which commodity’s price rose steeply over the years? b) What could be the reasons for a slow rise of prices of cotton clothes and fertilizers? A. A) Cement’s price rose steeply. B) The demand is increasing slowly. 2.4 Key Concepts i. Change in price is measured with the help of a statistical device referred to as price index. ii. The price index number shows the percentage change in the prices of a set of goods from one time period to another. iii. The price index numbers are of different types, depending on which group of consumers we are looking at: Wholesale Price Index(WPI), Consumer Price Index (CPI)etc. iv. The WPI includes all goods (capital goods and consumer goods) and changes in their wholesale rates. v. The CPI only measures changes in price of consumer goods at the retail price. SESSION 2. HOW INFLATION IS MEASURED 43

SESSION 3 PRICE INDEX NUMBERS 3.1 Mind Map 3.2 Terminology 1. Consumer price Index: It is a price index that tracks the prices of a specified basket of consumer goods and services. 2. Wholesale price Index: WPI is the price of a representative basket of wholesale goods. SESSION 3. PRICE INDEX NUMBERS 44

CHAPTER 10- PRICES AND COST OF LIVING 3.3 Improve Your Learning Conceptual Understanding Q1. How is Wholesale Price Index different from Consumer Price Index? [Refer to TB page 128 Q6] A. Change in price is measured with the help of a statistical device referred to as “Price Index” . Price Index is of two types. They are– i. Consumer Price Index ii. Wholesale Price Index The Consumer Price Index The Wholesale Price Index i. The CPI measures only changes in i. The Wholesale Price Index prices of a few selected consumer includes all goods and changes in goods at retail price. their wholesale rates. 2. Different CPIs are published by 2. There is only one wholesale price government. index. 3. The CPIs are used to calculate the 3. The inflation is generally measured DA to be paid for government on the basis of changes in WPI. employees. Q2. What are the uses of the CPI? [Refer to TB page 128 Q8] A. 1) The CPIs are used to calculate the D.A. to be paid for government employees. 2) To revise legal wage rates as part of Indian government laws. 3) To estimate the number of poor in India. Q3. How is Administrative Price Mechanism (APM) different from Minimum Support Price (MSP)? [Re- fer to TB page 128 Q10] SESSION 3. PRICE INDEX NUMBERS 45

CHAPTER 10- PRICES AND COST OF LIVING A. APM MSP For preventing hoarding and keeping the Government helps farmers by procuring prices of essential commodities within paddy and wheat through Food the reasonable levels. Corporation of India using Minimum Support Price. The government fixes the prices of The policy helps not only farmers but essential commodities and makes it also is used by the government to mandatory for traders to sell goods in the regulate the prices of paddy, wheat in the market at those price levels. market. Those who do not follow are penalized Similarly government both at central and by Government state levels fixes price for sugarcane procured to make sugar, produced by cooperative sugar mills. Goods such as kerosene, diesel, LPG, Goods such as foodgrains. For eg CNG etc. are examples of goods sold paddy, wheat etc. are sold under MSP. under APM. 3.4 Key Concepts i. Food Price Index is used to estimate rise in prices of food items called food inflation. SESSION 3. PRICE INDEX NUMBERS 46

SESSION 4 HOW TO CONSTRUCT A CPI 4.1 Mind Map How to construct CPI 4.2 Terminology 1. Administrative Price Mechansim: The government fixes the price levels of essential commodi- ties and makes it mandatory for traders to sell goods in the market. This is Administrative Price Mechanism. SESSION 4. HOW TO CONSTRUCT A CPI 47

CHAPTER 10- PRICES AND COST OF LIVING 4.3 Improve Your Learning Conceptual Understanding Q1. How is food inflation different from Consumer Price Index. [Refer to TB page 128 Q7] A. 1) Rise in the prices of food items is called food inflation. 2) The food price index consists of the wholesale price of food materials such as rice, wheat, pulses etc. 3) Consumer Price Index only measures the changes in prices of a few selected consumer goods at the retail price. 4) In India CPI is published on a monthly basis and food inflation on an annual basis. Q2. Write any five issues that are considered while measuring CPI. [Refer to TB page 128 Q9] A. 1) CPI only measures changes in prices of a few selected consumer goods at the retail price. 2) Changes in the quality of products are difficult to incorporate into the CPI. 3) Problems of price data collection. 4) Lags in conducting surveys. 5) The CPI will need revisions as there are significant changes in consumer buying habits. Information Skills Q1. Take any five goods or services used by your family and construct a Consumer Price Index for your family based on these five goods/services. [Refer to TB page 128 Q12] SESSION 4. HOW TO CONSTRUCT A CPI 48