Bhagya

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 8 Correspondence with Depositors students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 8 Correspondence with Depositors

Introduction:

→ Deposit is a short-term source of finance for a company.

→ It is an unsecured source of borrowed funds to the company.

→ It is used to satisfy the working capital needs of a company.

→ A public company having a net worth of not less than 100 crore rupees OR a turnover of not less than 500 crore rupees AND which has obtained the prior consent of shareholders through special resolution, can raise public deposit.

→ A private company can accept deposits from its members or directors or relative directors not more than 100 percent of its aggregate of paid share capital and free reserve.

→ Public companies can raise deposits maximum up to 25 percent of its aggregate of paid share capital and free reserve.

→ Government companies can raise a maximum of 35 percent deposits of their aggregate of paid share capital and free reserve.

→ The company cannot accept or renew deposits on demand.

→ Depositors are the creditors of the company.

→ The company can accept deposits for a minimum period of 6 months and a maximum period of 36 months.

→ The company is liable to pay regular interest at a fixed rate and repay the principal amount as on maturity.

→ Default in repayment can result in punishment in the form of a fine and/or imprisonment.

Points to be remembered while corresponding with depositors:

→ While writing letters to the depositors, the secretary should follow legal provisions.

→ He should communicate with courtesy.

→ His letter should be brief and prompt.

→ Correspondence with the depositors should increase the goodwill of the company.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 7 Correspondence with Debentureholders students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 7 Correspondence with Debentureholders

Introduction-
Joint Stock Company requires huge amount of capital for business. It is raised through:

(i) Issuing Shares

• Shares are issued at the beginning.
• Share Capital is the owned capital.

(ii) Issuing Debentures

• Debentures are issued at the later stage.
• It is an acknowledgment of debt.
• Debenture Capital is the borrowed capital.
• It is a safe and secured capital.
• Debenture holder is the creditor of the company.
• Debentures are issued for a specific period carrying fixed rate of interest.

→ In the beginning, shares are issued and debentures are issued at a later stage.

→ Joint stock companies raise its borrowed capital by issuing debentures.

→ Debenture is an acknowledgement of debt.

Points to be considered while corresponding with Debenture Holders-
While writing letters to the debenture holder, the following points should be considered.

• Debenture holders are company’s creditors, so due respect should be given in correspondence which means there should be courtesy in writing.
• Prompt reply should be given to the incoming letters of debenture holders.
• Secretary should be aware and follow the legal provisions of Companies Act, 2013 related to the issue of debentures, conversion and repayment of interest.
• Correspondence should be transparent. Company should not hide any adverse information about credit rating.
• It should be concise but complete.
• Information should be updated and precise.
• Confidential information about the company should not be disclosed. Secrecy has to be maintained.
• A good image of the company should be maintained with the debenture holders.

Circumstances for secretarial correspondence with Debenture Holders-

Correspondence means ‘communication in writing’ i.e. writing a letter.
Secretary has to correspond with debenture holders in the following circumstances:

• About allotment of debentures.
• Intimation about payment of interest through:
  • Interest Warrant
  • Electronic Payment of Interest
• For conversion of debenture into equity shares.
• For redemption of debentures.

Specimen Letters-

Debenture Allotment Letter:

• Company allots debentures to the applicant i.e. debenture holder.
• Allotment Letter is preserved by the debenture holder till he receives Debenture Certificate in exchange of this letter.
• Contains details of issue of debentures i.e. name of debenture holder, debentures issued, face value,
• types of debentures, rate of interest, etc.

Payment of Interest Letter:

• Interest is paid to the debenture holders through:
  • Interest Warrant
  • Electronically
• The letter contains details such as a number of debentures, distinctive numbers, the gross amount of interest payable, TDS deducted, the net amount of interest payable, etc.
• Board Resolution is required for the payment of interest on debentures.

Conversion of Debentures Letter:

• Debentures are converted into equity shares.
• Conversion of Debenture Letter is issued only when the company receives Letter of Option.
• After conversion, a share certificate will be issued.
• Approval of shareholders is necessary by passing a special resolution at Extra-Ordinary General Meeting.
• Only after receiving the shareholders’ approval, letter of conversion of debentures is sent to debenture holders.

Redemption of Debentures Letter.

• Debentures are redeemed after a specific period.
• Debenture Redemption Reserve Fund (DRRF) is created for the redemption of debentures.
• Debenture Redemption Form (DRF) is sent along with the letter.
• This letter informs that their debentures have become due for redemption.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 6 Correspondence with Members students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 6 Correspondence with Members

→ The company collects owned capital by issuing shares to its members/shareholders.

→ Shareholders are the real owners of the Company.

→ Secretary acts as a Public Relations Officer and does all the correspondences with the members on behalf of the Company.

Secretary has to write letters to the members on several occasions-

• Allotment Letter
• Regret Letter
• Issue of Share Certificate
• Issue of Bonus Shares
• Execution of Right Issue
• Letter for Payment of Dividend
• Dividend Mandate
• Approval of Transfer of Shares
• Refusal of Transfer of Shares
• Notice and Agenda of General Meeting
• Notice of loss of share certificate
• Reply to the queries raised by the members
• Letters to legal representatives regarding Transmission of Shares

→ Various points like providing correct information, use of technology, use of lucid language, prompt response, maintain secrecy, etc. is to be considered by the secretary in correspondence with members.

Issue of Share Certificate-

• Registered Document
• Title to the shares issued by the company
• Duly stamped and signed by two directors and countersigned by the secretary under the common seal of the company
• Issued or dispatch share certificate to the allottee within two months after allotment of shares
• Send by the registered post
• Contains details like name of the shareholder, number of shares held with a distinctive number, etc

Payment of Dividend-

• Dividend is distributed between the shareholders of the company
• Dividend is recommended by Board of Directors, declared and approved by shareholders in Annual
  General Meeting

Payment of Dividend:

1. Dividend Warrant
2. Electronically (ECS, NEFT, RTGS)

The letter contains a number of equity shares held, Dividend warrant number, gross dividend, TDS if any, the net amount of dividend, etc.

Issue of Bonus Share-

• Issued to fully paid-up shares
• Given free of cost and also known as capitalization of reserves
• Contains a total number of shares held, ratio decided, bonus share issued and credited to the Demat account with client ID no. date of credit, etc.

Reply Letter-

• Sent to a member who has query/ raised doubt regarding low rate of dividend
• Contains or specifies reasons for the low rate of dividend.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 5 Deposits students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 5 Deposits

→ Company can raise funds by accepting deposits from public. It is a cheap source to raise funds. There is no dilution of control.

→ Company can invite deposits:

→ Deposit can be secured or unsecured. For secured deposits, a charge on company’s tangible assets are created

Period / Tenure of Deposit-

• Minimum 6 months, maximum 36 months.
• Premature repayment – after minimum 3 months.
• Company can also renew deposit with same terms and conditions of issue.
• Company cannot accept deposits repayable on demand made by depositor.

→ Deposit Receipt has to be issued within 21 days from date of receipt of deposit money.

Deposit Trustee-

• Appointed when secured deposits are issued.
• The company can appoint one or more Deposit Trustees.
• Protect the interest of depositors.

Trust Deed-

• Company signs a contract with Deposit Trustees.
• Contains terms and conditions of the contract.
• Must be signed at least 7 days before issuing the circular or advertisement.

→ If Deposit Amount + Interest is more than Rs. 20,000, then Deposit Insurance must be taken.

Deposit Repayment Reserve Account-

• Opened in Scheduled Bank.
• On or before 30th April, the company deposits up to 15% amount in DRRA.
• used for repaying deposits.
• Private companies accepting deposits from members cannot open Deposit Repayment Reserve Account.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 1 Introduction To Corporate Finance students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 4 Issue of Debentures

→ The company can make a public issue of debentures only when:

• Company or its Promoters or its Directors are not prohibited from accessing securities market by SEBI.
• Company or its Promoters or its Directors have not declared themselves as defaulters or has not defaulted in repaying principal, interest or debt for a period of more than 6 months.

→ The company can issue debentures to its members through:

• Public Offer
• Private Placement

→ The company can also list its debentures on stock exchanges.

→ Section 71 of the Companies Act 2013, deals with the issue of debenture.

→ SEBI Regulation 2008 deals with provision for issue and listing of debenture which is not convertible.

→ SEBI Regulation 2009 deals with the provision for the issue of debenture and the listing of debenture that are convertible.

→ The Board of Directors has the power to issue debentures at:

• Par
• Premium
• Discount.

→ The Board of Directors can issue debentures up to a limit mentioned in the Articles of Association. Special Resolution is required to be passed in General Meeting to issue more debentures.

→ Following provisions are to be followed while issuing debentures:

• Provisions laid by Companies Act, 2013
• Provisions laid by Companies (Share Capital and Debentures) Rules 2014
• SEBI Regulation

→ Company issuing prospectus or more than 500 debentures has to appoint one or more Debenture Trustees.

→ Debenture Trust Deed is an agreed contract between the company and Debenture Trustee containing terms and conditions.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 3 Issue of Shares students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 3 Issue of Shares

→ A joint-stock company can raise its capital by issuing shares, debentures, inviting public deposits, taking loans etc.

→ Share Capital refers to the capital made up out of equity shares and preference shares.

Share Capital can be classified as –

• Authorised or Nominal or Registered Capital
• Issued and Unissued Capital
• Subscribed and Unsubscribed Capital
• Called up and uncalled Capital and Reserve Capital
• Paid up Capital and Calls in Arrears

Company can raise capital by selling shares in the market. Generally it issues –

• Equity shares
• Preference shares.

A company can use the following methods for issues of shares –

• Public Issue
• Fixed price issue method
• book building method
• Initial public offer
• Further public offer
• Rights issue
• Bonus issue
• Employee stock option scheme
• Employee stock purchase scheme
• Stock appreciation rights scheme
• Sweat equity shares
• Private placement

Preferential allotment-

Allotment of Shares:
The Supreme Court has defined allotment as “the appropriation out of the previously unappropriated capital of the company of a certain number of shares to a person.
Thus allotment of shares means allotting shares to an applicant based on the application submitted.

Share Certificate:
It is a registered document issued by a company which is an evidence of ownership of specified number of shares of the company. Share certificate should be issued by the company within two months.

Calls on shares:
Besides the application money and allotment money, if a company demands the balance unpaid amount on shares it is called as calls on shares. It is unpaid money demanded by the company.

Forfeiture of Shares:
If a shareholder fails to pay calls on shares within a certain period, the Board of Directors can forfeit the ownership of a member which is called forfeiture of shares. It is a forceful act by the company. Here membership is terminated by the company.

Surrender of Shares:
Voluntary return of shares by the member to the company for cancellation of shares is called surrender of shares.

Transfer of shares:
Transfer of shares means voluntary transfer of shares by a member of a company in favour of another person against consideration. It is a voluntary activity.

Transmission of shares:
When the shares of a member is automatically transferred to the nominee or legal heir on the death, insolvency or insanity of a member, it is called transmission of shares. It is performed by operation of law.

By going through these Maharashtra State Board Secretarial Practice 12th Commerce Notes Chapter 2 Sources of Corporate Finance students can recall all the concepts quickly.

Maharashtra State Board Class 12 Secretarial Practice Notes Chapter 2 Sources of Corporate Finance

→ No business activity can ever be pursued without financial support.

→ Finance is necessary throughout the activities of promotion, organization, and regular operations of the business.

→ The finance needed by a business organization is termed as ‘Capital’

→ Capital formation is a process of collection of capital from various sources according to the financial plan of the company.

→ The various sources of finance can be divided into owned capital and borrowed capital which may be external or internal.

→ When capital is made available from within the organization, it is an internal source of financing.

→ When capital is raised from outsiders, it is an external source of financing.

→ Owned capital is regarded as permanent capital and borrowed capital is regarded as the temporary capital.

→ The various requirements of finance can be divided into short term (maximum one year) and long term (more than a year maybe 5,10,15 years).

→ There are various methods of raising finance namely shares, debentures, bonds, retained earnings/profits, public deposits, trade credit, bank credit, ADR (American Deposit Receipts), and GDR (Global Depository Receipts)

→ A share is a small unit of the share capital of a company.

→ They may be issued at par, premium, or discount and redeemed at par or premium.

→ Equity shares do not enjoy a preference for dividends and do not have priority for payment of capital at the time of winding up of a company.

→ Equity shareholders are risk-takers and hence they are the real owners of the company.

→ Preference shares have prior right to receive a fixed rate of dividend and return of capital in the event of winding up of the company

→ Preference shareholders are cautious investors.

→ They neither take part in management nor attend the meetings and vote on resolutions.

→ They can have class meetings if their rights are to be altered or have not received dividends for more than two consecutive years.

→ The debt acknowledged by a company by issuing a debenture certificate is called a debenture.

→ Debenture holders are creditors of the company.

→ They get fixed interest as a return on their investment.

→ A bond is an instrument issued by the government or business as evidence of debt.

→ Bondholders are creditors of the company.

→ They get fixed interest as returns on their investment regularly or as per terms agreed.

→ Retained earnings is the sum total of accumulated profit that is re-invested in the business.

→ It is a cost-effective method of raising funds and is also known as self-financing/ploughing back of profits/
capitalization of Reserves.

→ A public deposit is a collateral-free loan accepted by public companies for a short period of time ranging from 6
months to 36 months.

→ The company can raise loans from banks in the form of overdraft, cash credit, cash loans discounting of bills. etc.

→ Financial institutions provide financial aid and assistance to companies.

→ Trade credit is a credit extended by manufacturers and suppliers to follow businessmen for 15 days to a
month.

→ Discount is made available if payments are made early.

→ A Bill of exchange is a trade bill that is accepted by the bank and cash is advanced as a loan against it.

→ ADR (American Depository Receipt) and GDR ( Global Depository Receipt) are depository receipts through
which Indian Companies raise equity capital in international markets.

By going through these Maharashtra State Board Class 11 History Notes Chapter 5 Janapadas and Republics students can recall all the concepts quickly.

Maharashtra State Board Class 11 History Notes Chapter 5 Janapadas and Republics

‘Jana’ and Janapadas:
Vedic people used the term Jana to designate a group of people, united under a common bond of singular kinship structure. Their settlement was known as ‘Grama’. A cluster of gramas consisting of the same Jana was known by the name of that particular Jana.

A region occupied by a Janas was called as Janapada. Gradually the Janapadas had more formal administrative structures transforming them into independent states. These were the first well-established states of ancient India. However, this does not necessarily mean that every Janapada evolved into an independent state.

Janapada:
The term ‘Janapada’ occurs in the Brahmana texts for the first time. Thereafter, it is frequently used in the Vedic literature and the epics – Mahabharata and Ramayana, as also in the Jain and the Buddhist literature. Considering the ancient Indian geographic perception with reference to the janapadas the said literature seems to divide the Indiansulcontinentjnto five sections:

1. ‘Praachya’ – of the east
2. ‘Praatichya’ – of the west
3. ‘Udichya’ – of the north
4. ‘Dakshina’ – of the south
5. ‘Madhyadesha – The central region.

Territoriality and Autonomous Functioning: It may be noted, that the sense of territoriality and the ensuing awareness of autonomy were the main factors responsible for the formation of ancient Janapadas in India. However, their administrative system was not much different from that of the Janas in the Rigveda.

The chief of the Janapada was known as ‘Rajan’. Two assemblies known as ‘Sabha’ and ‘Samiti’ were at the apex of all administrative decision-making processes, since the very beginning of the Vedic period.

Expansion and Development of the Janapadas: The expansion and development of the janapadas seem to have occurred in three different ways:
Expansion and development of a society formed into a Jana by uniting of a number of generations of a singular kula (family). For example, the Janapadas namely, Matsya, Chedi, Gandhara, Kashi, Kosala, etc.

Janapadas rising out of the union of more than one kula. For example, the Panchala janapada. Who were the five Janas united under the name of Panchalas, is not exactly known According to the renowned historian, Hemchandra Raychaudhuri following were the janas who merged together as Panchalas: Krivi, Turvasha, Keshi, Shrinajaya and Somaka. The more powerful janapadas conquered the less powerful ones.

Federation of States (Ganarajya):
‘Gana’ means the ruling class comprising members of equal social status. Similarly, ‘sangha’ means a state formed by many kulas or janapadas by coming together. By 6th century B.C.E. many sangharajyas had come into existence. There were three main types of the ancient federation of states in India.

• Ganarajya of the members of the same kula. For example, Malava and Shibi.
• Ganarajya created by more than one kulas coming together. For example, Vajji Ganasangha. It included eight kulas. Vajji, Lichchhavi, Dnyatruk and Videha were the important ganas among them.
• More than one ganrajyas coming together to create a sangharajya. For example, Yaudheya- Kshudrak Sangh.

Democratic States: Some of the gana sanghas were divided into regional zones called ‘Khanda’. They functioned through a group of elected individuals, who were found capable. Each of the elected members represented his respective khanda. These elected members were installed with collective authority for the smooth running of the gana sangha.

This was a democratic system. Ganasanghas which functioned in this democratic way existed in Punjab and Sindh at the time of Alexander’s invasion. Each elective representative of respective regional zone was designated as ‘Ganamukhya’. Every gana mukhya was the member of the assembly known as ‘Gana Parishad. The decisions made by the Gana Parishad were implemented by designated functionaries of various cadre. He was known as the ‘Adhyaksha’ or ‘Raja’.

Oligarchic States: In this type the elite class in the society held all the powers of decision-making and administration. Panini and Kautilya mention them as ‘Rajshabdopajivi’ Sangh. Panini includes Vajji, Andhaka, Vrishni, Yaudheya in the Rajashabdopjivi type. Kautilya includes the Vrijji or Vajji, Madrak, Kuru, Panchala, etc. in this type. This type of gana sanghas were more prevalent in the eastern region of Uttar Pradesh and Bihar.

Glossary:

→ Kula – Clan or family.

→ Grania – Settlement.

→  Rajan – Chief of Janapada.

→ Gana – Refers to the ruling class comprising members of equal status.

→  Khanda – Regional zones.

→  Varta – Means trade or commerce.

By going through these Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 3 Small Scale Industry and Business students can recall all the concepts quickly.

Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 3 Small Scale Industry and Business

Small Scale Industry-

Meaning:
Traditionally
Industries which are organized on a small scale and produce goods with the help of machines, labour and power.

• Using power with less than 50 employees
• Not using power with employees strength more than 50 but less than 100

Classification of Business-

1. Micro
2. Small
3. Medium

Micro:

• Manufacturing Sector: Does not exceed ? 25 lakhs
• Service Sector: Does not exceed ? 10 lakhs

Small:

• Manufacturing Sector More than ? 25 lakhs but does not exceed ? 5 crores
• Service Sector: More than ?10 lakhs but does not exceed ? 2 crores

Medium:

• Manufacturing Sector: More than ? 5 crores but does not exceed ? 10 crores
• Service Sector: More than . ? 2 crores but does exceed ? 5 crores.

Definition of Small Scale Industry-
(If the following condition is satisfied)

“Investment in fixed assets like plant and equipment either held on ownership terms or on lease or hire purchase should not be more than one crore. However, the unit in no way can be owned or controlled or auxiliary for any other industrial unit.”

Classification of Small Scale Industries-

Traditional Small Scale Industries:

1. Handloom
2. Handicraft
3. Coir
4. Sericulture
5. Khadi and Village Industries

Modern Small Scale Industries:

• Bicycle Parts
• Sewing Machines
• Blades, Razors
• Electric Appliances
• Spare Parts

Importance of Small Scale Industries-

• Supply if Raw Materials to Large Industries
• Balanced Development between Rural and Urban Areas
• Opportunities to Young Generation
• Large Employment
• Utilisation of Domestic Resources

Advantages of Small Scale Industries-

1. Cost Savings
2. Adaptability
3. Limited Capital
4. Low Gestation Period
5. Labour intensive
6. Opportunities Rural Youth
7. Upliftment of Economy
8. Decentralised Economy
9. Export Earning
10. Regional Balance

Steps in Setting up of a Small Scale Business-

• Decision of Business Area
• Study of Business Environment
• Selection of Product
• Selection of Place
• Selection of Technology
• Business Proposal
• Finance
• Registration
• Actual arrangements of Resources
  • Physical resources
  • Arrangement of Power and Water Supply
  • Staffing

Arrangement of Power and Water Supply

• Production and Marketing of Product
• Review or feedback of Future Changes.

Challenges Before Small Scale Industries-

• Problems of Marketing
• Infrastructural Problem
• Credit and Finance
• Delayed Payment
• Sickness Problem
• Personal Problems
• Shortage of Raw Material
• Outdated Technology
• Underutilization of Capacity
• Labour Problem

Word Meaning:

vocational – particular occupation; contemplating – looking forward; procure – to obtain; notification – to inform; assistance – to help; lease – rental agreement; auxiliary – additional; significantly – important; advantages – benefits; overheads – expenses; minimises – to reduce; migrations – moving of people from one place to another; potential – capacity; aspirants – a person who has ambition; technical – specialized knowledge about a subject; abundant – plenty; gestation – development; knitwear – woollen clothes; processed food – preserved food; substantially – considerable; concentration – centring/centralisation; devastated – destroy; adopt – to accept; tremendous – in very huge amount; inheritant – from ancestors; upliftment – improvement; compromise – to settle at a point; absenteeism – regularly staying away from work; commitment – dedication; turnover – rate at which employee leave the workplace; exploit – make use of an unfair way; feasible – not possible; prevalence – commonness; load-shedding – regular interruption of electricity; voltage fluctuation – regular change in voltage; description – to describe / explain; analyse – to examine; market research – gather information about consumer needs; installed – to fix; appraisal – to evaluate; technique – skill or ability to do so; allocating – to assign / issue; quantum – share or a portion; directories – Website list; exposure – to display; envisaged – to predict.

By going through these Maharashtra State Board Class 11 Political Science Notes Chapter 10 The World Since 1945 – II students can recall all the concepts quickly.

Maharashtra State Board Class 11 Political Science Notes Chapter 10 The World Since 1945 – II

Introduction:

This chapter deals with international relations from 1959 to 1991. We will study the Non-Aligned Movement, efforts at detente, SAARC, the collapse of the Soviet Union, and the role played by Mikhail Gorbachev in the new world order.

Developments (1959 – 1991)

Phase 1959 – 1962 (Shifts in the Cold War) –
In spite of attempts to create goodwill between the two power blocs (such as at Camp David Summit), tensions continued to escalate. In 1961, USSR began erecting the Berlin Wall due to which people couldn’t travel between East and West Berlin. In 1962, the first direct confrontation of the Cold War took place. This was the Cuban Missile Crisis.

Cuba is a small nation off the coast of the USA. It had the support of the USSR. Due to its’ strategic location, then Soviet Premier, Khrushchev, decided to convert it into a Soviet base by placing missiles there. This was a serious, direct threat to the USA which retaliated with a naval blockade of Cuba. There was a real possibility of a nuclear war. But, both the superpowers realized the need to prevent such a situation and USSR withdrew it’s missiles from Cuba.

Non Alignment

A group of Third World countries (i.e., from Asia, Africa, South America), most of whom had recently gained sovereignty from colonial rule, refused to join any Cold War alliances. This laid the foundation for the Non- Aligned Movement. It was formally established at the Belgrade Conference (1961) with 25 members. Some of the founding member leaders were Marshall Tito (Yugoslavia), Jawaharlal Nehru, (India), Gamal Nasser (Egypt), Nkrumah (Ghana), Sukarno (Indonesia), etc.

The concept of Non-alignment is based on two main principles

• independent understanding of the world affairs
• peace approach. Thus it does not mean political passivity or neutrality. In fact, the idea was active participation in world affairs to promote peace and development.

The purpose of the NAM was

• not to ally with any power bloc
• opposition to any military alliance
• freedom to take independent policy decisions with regard to international affairs.

NAM has helped the Third World countries to gain economic and political rights. Today it has 120 members countries and 17 observer countries. It is headed by a Secretary General. The 17th NAM summit was held in Venezuela in September 2016 while 18th summit (2019) will be held in Azerbaijan.

Phase 1962 – 1972 (Foundations Of Detente)

After the Cuban Missile Crisis, both the USA and the USSR made several efforts at reducing bilateral tensions (detente). This included —

• a hot line was set up between main leaders of the two nations.
• signing of agreements such as N.N.P.T., L.T.B.T. to reduce nuclear weapons.
• In 1972 the Moscow Summit between President Nixon (USA) and Brezhnev (USSR).

USA had not recognized the Chinese government since 1949. But in 1972, President Nixon visited China and thus recognized the Communist regime of Mao Zedong.

Phase 1972 – 1979 (Detente)

Some of the initiatives taken by the superpowers to bring about detente included –

• Conference at Paris (1973) to bring the Vietnam crisis to an end.
• Helsinki conference on security in Europe (1975) was attended by 35 nations including USA and USSR. It aimed to reduce the tensions between Eastern and Western European countries.
• The first joint US-Soviet space flight was the Apollo Soyuz Test project (1975)
• The USA held a conference at Camp David in 1978 to resolve the long pending Arab-Israel dispute. The ‘Framework for Peace in the Middle East’ was signed between President Carter (USA), President Sadat (Egypt) and Prime Minister Begin (Israel).

Other Significant developments include in this period.

• Arab – Israel War (1973) and increase in the price of oil all over the world.
• Demand by non-aligned counties for New International Economic Order (NIEO)
• Growing importance of economic issues in international relations and increasing demands put forward by Third World nations.
• North-South world divide i.e. between rich nations of the Northern Hemisphere in Europe and North America and Southern Hemisphere nations of Asia, Africa, South America.
• Period of economic interdependence, signing of “Free Trade” agreements and establishing of ‘trade blocs’ such as NAFTA.

Phase 1979 – 1985 (New Cold War)

Two events that occurred in 1979 changed the course of detente

• Islamic Revolution in Iran under leader Ayatollah Khomeini overthrew the rule of M.R. Shah Pahlavi. The new government withdrew from the CENTO alliance.
• Soviet Union invaded Afghanistan in 1979 and installed Babrak Karmal as the President. The insurgent groups in Afghanistan (mujahideen) fought against this government (1979 – 1989).

New Cold War refers to the end of the period of detente and return of tensions between USA and USSR.

Phase 1985 – 1991 (Gorbachev Era)

There were significant changes in the Soviet policy under Mikhail Gorbachev (President of USSR). He introduced the policies of Glasnost and Perestroika.

His new foreign policy included (i) withdrawal of Soviet troops from Afghanistan, (ii) stopping of the arms race with US and focus on arms control (iii) opening up a dialogue with China.

Gorbachev also tried to reform Soviet domestic politics. The control of Communist Party ended and people were given the right to criticize the government. On 25th December, 1991, Gorbachev resigned and the next day the USSR as a country ceased to exist.

The Commonwealth of Independent States (CIS) came into existence and finally new countries were formed such as Ukraine, Belarus, Georgia, Armenia, etc.

Other changes due to the disintegration of Soviet Union include

• Reunification of Germany in 1990.
• Splitting of Czechoslovakia into Slovakia and Czech Republic
• Splitting of Yugoslavia into Serbia, Bosnia, Croatia, Slovenia, etc.

The disintegration of the USSR signified the end of the Cold War and USA emerged as the only superpower (unipolarity). New organisations like WTO,EU,G-20, SAARC. BRICS started to play a role in world affairs. This is called multi polarity.