Category: Maharashtra State Board Notes

By going through these Maharashtra State Board Class 12 Economics Notes Chapter 3A Demand Analysis students can recall all the concepts quickly.

Maharashtra State Board Class 12 Economics Notes Chapter 3A Demand Analysis

Meaning of Demand:
Demand refers to a desire or want for goods. Desire is the willingness to have some commodity which is backed by willingness and ability to pay.

Definition:
According to Benham, “The demand for anything at a given price is the amount of it, which will be bought per unit of time at that price. ”

Features of Demand:

• Demand is a relative concept.
• Demand is always expressed with reference to time and price.

Demand Schedule:
Demand schedule is a tabular representation which shows functional relationship between price and quantity demanded for a particular commodity.
A Demand schedule may be either individual demand schedule or market demand schedule.

Individual Demand Schedule:

→ Individual demand schedule is a tabular representation of various quantities of a commodity demanded by an individual consumer at different prices during a given period of time.
This can be explained with the help of following schedule.

Individual Demand Schedule

Price of Commodity ‘X’ (in ₹ )	Quantity Demanded of Commodity ‘X’ (in kg)
50	2
40	4
30	6
20	8
10	10

→ The above individual demand schedule shows an inverse relationship between price and quantity demanded of commodity ‘X’. At a higher price of ₹ 50 per kg. of commodity ‘X’, the demand is only 2 kg. of ‘X’ commodity and as price falls from ₹ 50 to ₹ 10, quantity demanded rises from 2 kg to 10 kg. of ‘X’ commodity.

Individual Demand Curve:
It is a graphical representation of individual demand schedule. X-axis represents quantity demanded and Y-axis represents the price of the commodity. The demand curve DD slopes downward from left to right. It has a negative slope as price and demand are inversely related.

Market Demand Schedule:

→ Market Demand Schedule is a tabular representation of various quantities of a commodity demanded by different consumers at different prices during a given period of time. This can be explained with the help of following schedule –

Market demand schedule

→ The above Market Demand Schedule shows an inverse relationship between price and market demanded of commodity ‘X’. At a high price of ₹ 10 per kg of commodity ‘X’, the market demand is only 30 kg and at a lower price of ₹ 2, market demand rises to 90 kg of commodity ‘X’.

Market Demand Curve:
It is a graphical representation of market demand schedule. X-axis represents quantity demanded (Market Demand) and Y-axis represents the price of the commodity. When the above market demand schedule is plotted on this graph, we derive the market demand curve DD, which slopes downwards from left to right indicating inverse relationship between price and quantity demanded.

Reasons justifying downwards sloping demand curve:

→ The Law of Diminishing Marginal Utility: Marginal utility goes on diminishing when there is increase in the stock of commodity and consumer tends to buy more when price falls and vice-versa.

→ Income Effect: Whenever there is a fall in price of a commodity, purchasing power of a consumer gets increased, which enables him to buy more of that commodity.

→ Substitution Effect: When price of commodity rises consumer tends to buy more of cheaper substitute goods and less of the commodity whose price has increased.

→ Multi-purpose Uses: When a commodity can be used for satisfying multiple needs, its demand will rise with a fall in its price and vice-versa.

→ New Consumers : When there is fall in price of a commodity, a new consumer class buy the commodity as they can afford it. Thus, total demand for commodity increases with fall in price.

Types of Demand:

→ Direct Demand: When a commodity satisfies the want of a consumer directly, it is said to have direct demand. Demand for consumer goods like food, clothes, sugar, vegetables, milk, etc.

→ Indirect Demand: It refers to demand for goods which are required for further production. It is also called as derived demand. E.g. demand for factors of production like land, labour, capital, etc.

→ Joint or Complementary Demand: When two or more goods are demanded at a same time to satisfy single want, it is known as Joint or Complementary Demand. E.g. car and fuel, pen and ink, mobile phone and Simcard, etc.

→ Composite Demand: When one commodity can be utilized for several needs or multiple uses, it is known as Composite Demand. E.g. electricity, steel, coal, etc.

→ Competitive Demand: It is demand for those goods which are substitute for each other. E.g. tea or coffee, sugar or jaggery, Pepsi or Thumbs-up, etc.

Determinants of Demand:

→ Price: Demand for a commodity is mainly influenced by its price. Normally at a higher price the demand is less and at a lower price it is more. Thus, demand varies inversely with price of a commodity.

→ Income: Income determines the purchasing power of a consumer. Rise in income will lead to a rise in demand of a commodity and fall in income will lead to a fall in demand of a commodity.

→ Price of Substitute Goods: Demand for cheaper substitute goods will rise when there is fall in price of such goods. E.g. when sugar price rises then demand for jaggery will rise.

→ Price of Complementary Goods: Demand changes with changes in prices of complementary goods like car and petrol, etc.

→ Nature of Product: Under necessary and unavailable circumstances, the demand of a commodity will continue to be same irrespective of the corresponding price. E.g. medicine to control blood pressure.

→ Size of Population: Demand for commodity depends upon size and composition of population like age structure, gender ratio, etc. E.g. larger the child population more will be the demand for toys, chocolates, etc.,

→ Expectation about the Future Prices: If the consumer expect a rise in price in the near future, they will demand more at present price. Similarly, when they expect fall in price, then they will buy less at present price.

→ Advertisement: Effective advertisement and sales promotion will lead to greater demand for a product. E.g. cosmetics, toothbrush, etc.

→ Taste, Habits and Fashions: Habits influence market demand. If people habituated to the consumption of certain goods they will not give up such habits easily. E.g. demand for liquor, cigarettes, etc. Sometimes fashion change the attitude and preference of consumer, which in turn changes the market demand.

→ Level of Taxation: There would be increase in price of goods and services due to high rates of taxes which results in decrease in demand and vice-versa.

Other factors:

• Climatic condition
• Changes in technology
• Government policy
• Customs and Traditions, etc.

Law of Demand:

→ The law of demand is one of the important law of consumption which explains the functional relationship between price and quantity demanded of a commodity. Prof. Alfred Marshall in his book ‘Principles of Economics which was published in 1890, has explained the consumer’s behaviour as follows:

Statement of the Law:

→ According to Prof. Alfred Marshall, “Other things being equal, higher the price of a commodity, smaller is the quantity demanded and lower the price of a commodity, larger is the quantity demanded. ”

→ In other words, other things remaining constant,’ demand varies inversely with price. Marshall’s law of demand describes the functional relationship between demand and price. It can be presented as:

Dx = f (P_x) [where D = Demand for Commodity
x = Commodity
f = function
P_x = Price of a commodity]

Assumptions to Law of Demand:

→ Constant Level of Income: Consumer’s income must remain unchanged because if income increases consumer may buy more even at a higher price not following the law of demand.

→ No Change in Size of Population: The size of population, gender ratio and age composition are assumed to remain constant. As such changes are sure to affect demand.

→ Prices of Substitute Goods remain constant: The price of substitute goods should remain unchanged as change in the price will affect the demand for the commodity.

→ Prices of Complementary Goods remains constant: A change in the price of one goodwill affect the demand for other, thus the prices of complementary goods should remain unchanged. No expectation

→ about Future Changes in Prices: Consumer’s expectation of change in price of a commodity in future will affect his present consumption.

→ No Change in Tastes, Habits, Preferences, Fashions, etc.: If the taste changes, then the consumer’s preference also will change which will affect demand. When commodities are out of fashion, then their demand will be low even at a low price.

→ No change in Taxation Policy: The level of direct and indirect tax imposed by the government on the income and goods should remain constant.

Demand Schedule and Demand Curve:
The law of demand is explained with the help of the following demand schedule and diagram:
Demand Schedule

Price of Commodity ‘X’ (in ₹)	Quantity Demanded of Commodity ‘X’ (in kgs)
50	1
40	2
30	3
20	4
10	5

From the above demand schedule we observe that at a higher price of ₹ 50 per kg, quantity demanded is 1 kg. When price falls from ₹ 50 to ₹ 40, quantity demanded rises from 1 kg to 2 kg. Similarly, at price ₹ 30 quantity demanded is 3kg and when price falls from ₹ 20 to ₹ 10 quantity demanded rises from 4 kg to 5 kg. This shows an inverse relationship between price and demand.

In the above diagram, ‘X’-axis represent quantity demanded and ‘Y’- axis represent the price of the commodity. The demand curve DD slopes downwards from left to right showing an inverse relationship between price and demand. It has a negative slope.

Exceptions to the Law of Demand:
There are some important cases in which the demand for the commodity is greater when price rises and smaller when price falls. Such cases are called exceptions to the law of Demand. In such case, demand curve slopes upwards from left to right and it has a positive slope.

→ Giffen Paradox: Demand for low-quality goods and inferior goods decrease even if there prices falls.
According to Sir Robert Giffen when price of bread declined, people did not buy more because of increase in their real income and they preferred to buy superior goods like meat.

→ Prestige Goods: Rich people buy more expensive goods like gold, diamonds, etc., even when there prices are high to maintain their status.

→ Speculation: People are tend to buy more commodities if they expect prices to rise further. E.g. prices of oil, sugar, etc. are expected to rise before Diwali, so people buy more of these commodities even at higher price.

→ Price Illusion: Consumer feels that goods at higher price are of better quality, therefore demand for such goods are higher even at rise in their prices.

→ Ignorance : Sometimes people completely ignore the price of commodity and buy more of that commodity ignoring higher price.

→ Habitual Goods: Due to habit of consumption, certain goods like tea is purchased in required quantities even at higher price.

Variations in Demand:
Variations in Demand refers to change in quantity demanded for a commodity due to change in price alone and other factors remaining constant.
There are two types of variations in demand.
They are (1) Expansion or Extension of Demand (2) Contraction of Demand

→ Expansion or Extension of Demand: It refers to rise in quantity demanded due to fall in price and other factors like tastes, income, etc. remaining unchanged.

→ It is shown by a downward movement on the same demand curve. In the given diagram,’ DD is the demand curve which is showing downward movement on the same demand curve from point ‘b’ to point ‘c’ and indicates an expansion of demand.

→ Contraction of Demand: It refers to fall in quantity demanded due to rise in price and other factors like tastes, income, population, etc. remaining unchanged.

→ It is shown by an upward movement on the same demand curve. In the given diagram, DD is the demand curve which is showing upward movement on the same demand curve from point ‘c’ to point ‘a’ and indicates contraction of demand.

Changes in Demand:
Changes in demand refers to change in quantity demanded due to change in other factors while price remaining constant.

There are two types of changes in demand.
They are : (1) Increase in Demand (2) Decrease in Demand

→ Increase in Demand: It refers to rise in quantity demanded due to favourable changes in other factors like tastes, income, etc. and price remaining constant.

→ Demand curve shifts to the right-hand side of the original Demand curve. In the given diagram DD is the original demand curve. D₁D₁ demand curve indicates increase in demand by shifting towards the right side of original demand curve from point bb to point ‘c’.

→ Decrease in Demand: It refers to fall in quantity demanded due to unfavourable changes in other factors like tastes, income, etc. Demand curve shift to the left-hand side of the original Demand curve. In the given diagram DD is the original demand curve. D₂, D₂, demand curve indicates decrease in demand by shifting towards the left-hand side Quantity Demanded of original demand curve from point ‘b’ to point ‘a’.

By going through these Maharashtra State Board Class 12 Sociology Notes Chapter 5 Social Movements in India students can recall all the concepts quickly.

Maharashtra State Board Class 12 Sociology Notes Chapter 5 Social Movements in India

→ Social movements are used to denote a wide variety of collective actions which attempt to bring about a change in a certain social systems or to create a new order or resist change.

→ The Women’s Movement began in the British era where many social reformers fought against unwanted and outdated customs. Through women’s movement, women have become aware of their rights and they have stood together to improve their position in the society.

→ The Workers’ Movement in India date backs to period of industrialization in the Indian society Exploitation of the workers where they faced various problems like long working hours, low wages, poor working conditions, lack of promotions, etc.

→ Which further saw formation of trade unions where workers came together and fought for their rights. This unit we will see role of trade unions in improving the worker s working conditions and resolve industrial disputes.

→ The Farmers’ Movements focuses on the lives of farmers, their livelihoods, land rights and farmers’ issues.

→ The Environment Movement has come up with various issues like global warming’s, ecology, save forest life, deforestation, tribal rights, preserve and protect environment.

Social Movements:

→ Meaning: Social movement is a collective effort by group of people with a common objective to promote or resist change in the society

→ Features: Collective action, Ideologies and objectives, Pre-planned leadership, Social change

→ Factors: Cultural drift, Social disorganisation, Perceived social injustice, Normative structures.

Types of Social Movements:

Women’s Movement India:

Worker’s Movement:

Farmers Movement:

→  Exploitation of Zamindar’s, moneylenders, exorbitant rates of land revenue all these led to growth of peasant movements in the absence of proper leaderships.

→ Emergence of Peasant Organization (Kisan Sabha Movement), worsening of peasant position, culminating into a series of revolts.

→ Emergence of strong farmers’ organisation, industrialisation and Globalisation leading to agrarian crisis, and Farmers’ Strike.

Environmental Movement:

Emergence of the Environmental Movements in India:

→ Environmental Movement in India:
Modern environmentalism – 1960s. Awareness about environmental degradation and organisation of many activities.

→ Causal Issues:
Modern science and technology and inequalities in society reasons for environmental degradation.

→ Significant Environmental Movements in India:
It encompasses issues related to ecology, health, human rights, tribal rights, eco-feminism etc.

Chipko Movement:
Sundarlal Bahuguna -Chamoli district in the Himalayan rëgion, protest of the inhabitants by hugging the trees to save the forest from the contractors.

Narmada Bachao Aandolan:
Medha Patkar – Maharashtra, Gujarat and Madhya Pradesh. Against the construction of Sardar Sarovar Damon the river Narmada and, against displacement of local inhabitants.

Abbreviations:

→ AITUC – All India Trade Union Congress

→ AIWC – All India Women’s Conference

→ BKU – Bharatiya Kisan Union

→ HMS – Hind Mazdoor Sabha

→ INTUC – Indian National Trade Union Congress

→ ILP – Independent Labour Party

→ NBA – Narmada Bachao Andolan

→ SEWA – Self Employed Women’s Association.

→ CTUO – Central Trade Union Organisation

→ BKD – Bharatiya Kranti Dal

→ BLD – Bharatiya Lok Dal

→ BMS – Bharatiya Mazdoor Sangh

→ UTUC – United Trade Union Congress

→ CITU – Centre of Indian Trade Union.

By going through these Maharashtra State Board Class 12 Sociology Notes Chapter 4 Processes of Social Change In India students can recall all the concepts quickly.

Maharashtra State Board Class 12 Sociology Notes Chapter 4 Processes of Social Change In India

→ Indian society has undergone many changes. Sociologists have studied these changes and identified concepts to explain these changes.

→ The term social change refers to changes that takes place in the structure and functioning of social institutions.

Impact of processes of social change:

→ Industrialisation is a process whereby human energy to produce was replaced by mechanical process and machines to enable higher production.

→ Urbanisation is the process of migration of people from rural to urban areas.

→ Modernisation is the process where there is the use of scientific and rational thinking that is deep-seated.

→ Globalisation is basically an economic process that has opened the markets to a global economy.

→ Digitalisation is a process of the impact of computers on various aspects of life.

By going through these Maharashtra State Board Class 12 Sociology Notes Chapter 3 Diversity and Unity in Indian Society students can recall all the concepts quickly.

Maharashtra State Board Class 12 Sociology Notes Chapter 3 Diversity and Unity in Indian Society

→ India is a land of diversities and yet there is a sense of we-feeling that unifies us, as a people.

Diversities are of various kinds:

Diversity in India:

Layered Regional Identities:

Factors that have contributed towards a sense of unity:

→ Geographical Unity- Sharing of the natural resources which cut across the length and breadth of India, festivals gives the people a sense of oneness.

→ Religious Unity- Religious unity in India finds its expression through places of worship scattered all over the country.

→ Political Unity- The Constitution of India has established the “rule of law” throughout the country.

Linguistic Unity:

The Three Language Formula

1. 1st language: Regional Language or Mother Tongue.
2. 2nd language: English or Modern Indian Language (in Hindi speaking States) Hindi or English (in non-Hindi speaking States)
3. 3rd language: English or modern Indian language in Hindi speaking states

→ Cultural Unity- Festivals like Diwali, Onam, Eid, Raksha Bandhan, New Year, Christmas are remembered and celebrated all over the country.

Need for unity:

→ To strengthen and enrich our cultural Heritage

→ To protect the multiple diversities of Indian society

→ To protect Human Rights of all citizens.

→ To boost workplace, organizational and community morale.

→ For effective and inclusive Communication

→ For conflict resolution

→ For peaceful coexistence

→ For the welfare of all people irrespective of caste, creed, sex, gender, race, economic class, culture etc.

→ For prosperity of our land and its People.

Forces that threaten national unity as well as national integration:

→ Casteism: Casteism refers to loyalty to one’s own caste before loyalty to the nation.

→ Communalism: Communalism refers to loyalty to one’s own religion before the nation.

→ Regionalism: Regionalism refers to loyalty to one’s own State or region before one’s nation.

→ Linguism: It is a form of excess loyalty towards one’s own language.

→ Economic inequality: unequal distribution of wealth.

→ The need of the hour is to develop an empathetic understanding of our multiple diversities and work towards strengthening the overall sense of national unity and emotional integration.

→ Some policies must promote social cohesion and interdependence. So also, rights and responsibilities are for all.

By going through these Maharashtra State Board Class 12 Sociology Notes Chapter 2 Segments of Indian Society students can recall all the concepts quickly.

Maharashtra State Board Class 12 Sociology Notes Chapter 2 Segments of Indian Society

Tribal Community

→ The tribal segment constitutes 8.6% of the different identity and are referred to by various names.

→ The Constitution of India calls them Scheduled Tribes.

→ Each tribe has its distinct identity (e.g., Warli, Mizo, Toda, Bhil, Jarawa. Gond, Santhal, Munda, Andamanese)

→ Tribes are found in various parts of India. They have their unique characteristics and their culture has set them apart from others.

→ However, due to contact with rural and urban people, tribal people have undergone many changes and this has impacted their way of life. There is cultural disintegration taking place in tribal areas.

→ After Independence, the Government of India has taken various efforts for Tribal Development.

Tribal Religion	Term introduced by
Animism	Edward Tylor
Animatism	Robert Marett
Totemism	James Frazer
Manaism	Robert Marett
Naturism	Max Mueller

Rural Community:

→ Most of India lives in its villages. Villages constitute the rural segment their predominant economic activity is agriculture. Institutions such as joint family, caste and panchayat are considered the pillars of rural society.

→ There are a large number of villages which suffer from major problems.

Problems of Indian rural community:

→ Several programmes have been started for rural development and reconstruction.

Urban Community:

→ Urban areas are distinct when compared to tribal and rural segments of Indian society. This is due to tertiary occupations like business, trade commerce, professions etc. urban areas are more heterogeneous, impersonal and individualistic

→ Urban areas have their own set of problems from inadequate infrastructure to meeting growing demands, crime, poverty, class extremes, alienation, environmental pollution, diseases etc.

Major Urban Problems:

→ The government has taken up various programmes for urban development. Several steps have been initiated to meet the challenges posed by the urban crisis.

By going through these Maharashtra State Board Class 12 Sociology Notes Chapter 1 Introduction To Indian Society students can recall all the concepts quickly.

Maharashtra State Board Class 12 Sociology Notes Chapter 1 Introduction To Indian Society

The study of our past has been broadly divided into three periods :

1. Ancient and Medieval India
2. Colonial period
3. Post-Independence period.

Religious beliefs and practices:

→ The impact of three ancient indigenous religions: Hinduism, Jainism and Buddhism are significant especially up to the end of the Later Vedic period.

→ The Vedic period is usually divided into: Early Vedic Period (c. 100 BCE to 10000 BCE) and Later Vedic Period (c.1000 BCE to c.500 BCE).

→ For Hindus, the Puranas and Dharmashastras laid out a Code of Conduct based on the Law of Karma (Action) rebirth, until it can attain moksha (salvation).

→ Jainism is said to have been revealed by 24 Tirthankaras of which Vardhaman Mahavir was the last. Ahimsa (non-harming) and Tapas (penance) are important and integral components of the Jain way of life.

→ Buddha, with his teachings, advocated the middle path based on the Four Noble Truths and the Eightfold Path.

→ The Medieval Period (c. 650 CE – c. 1500 CE), saw several religions come to India from outside. These include Judaism, Christianity, Islam and much later Zoroastrianism.

→ The Sangham Period (6th century BCE to 3rd century CE) is the period of history of ancient peninsular India.

→ The roots of Zoroastrianism are found in the Middle East region.

→ People of Jewish faith are believed to be one of the early foreign religions to come to India.

→ It is in the 1st century CE that Saint Thomas, an Apostle of Jesus Christ, brought Christianity to the shores of Malabar in South India.

→ Islam first came to India in the 8th century CE, the impact and influence of the religion is seen only much later.

→ Like Judaism and Christianity, Islam also preaches Monotheism and the faith centres on the Holy Quran. Muslims believe in the Five Pillars of Faith.

→ Sikhism emerged in the late 15th century CE and was founded by Guru Nanak (1469 CE – 1539 CE). Like Hinduism, Jainism and Buddhism, Sikhism too preached the Karma theory.

→ The Bhakti movement emerged with the need to bring religious reform in Hinduism during the medieval period.

Status of Women in Education:

• Indian women enjoyed a comparatively high status during the early Vedic period.
• The Later Vedic period witnessed a decline in the status of women in society.
• The status of women deteriorated even further in Medieval India.

Nature of education:

→ During the Early Vedic period the content of education was based on sacred literature which was written in Sanskrit.

→ Vardhaman Mahavir was a religious teacher for three decades.

→ The Buddhist system of education was conducted through Buddhist monasteries.

→ Education in the Sangham period was a widespread social activity.

→ The decline of Buddhist Viharas is significant as it marked the decline of an organised system of education.

→ Education during the medieval period is centred on the Quran.

Social Life:

→ Harappan civilisation was known for its well-planned towns.

→ Sangham. literature makes reference to tribes and traditional castes. This is indicative of their coexistence.

→ The Varna System during Vedic period referred to the social order or class of people. Ashramvyavastha was prescribed for the so-called twice-born castes.

→ This referred to the four stages in the life of a Hindu. The Classical Period (i.e., the period of the Gupta Dynasty) believed to be the ‘Golden Age. During the Delhi Sultanate, society experienced a synthesis of Indian and Islamic culture.

Urbanisation:

→ The Harappan civilisation suggest that Harappa was indeed a well-planned town with a ‘way of life’ that can be referred to as ‘first urbanisation’.

→ The period c.500 BCE to c.200 BCE is considered the period of ‘second urbanisation’ which brought a large-scale beginning of town life in the middle Gangetic basin.

Colonial Period:

Consequences of Colonialism in India:

→ Education: The British set up a system of education which was secular in nature, had far-reaching impact on Indian society and which led to the rise of a new class of intelligentsia,

→ Culture: Many of the educated elite took to the lifestyle of the British, this process of imitation was referred by M.N. Srinivasan as westernisation.

→ Administration: The British set in new systems of administration. A new judiciary system was created, which took into consideration the earlier legal traditions of the Indian communities. However, its implementation was carried out on a secular basis.

→ Economy: The economic system got transformed by industrial growth and urbanisation.

→ Transport and Communication: Development of transportation and communication led to an increase in market outlets for Indian raw materials.

→ The Nationalist Movement: The 19th century saw the emergence of the Indian National Congress and Mahatma Gandhi as the key figure in the call for independence.

→  Social Reform Movements: The 19th century is witness to the emergence of many social and religious reform movements.

→ Social Legislation: The increase in the number of reformative groups enabled Indians to exert pressure upon the British government, For passing laws against prevalent social evils.

Post-Independent Period:

→ Constitution of India: The Constitution of India was framed by the Constituent Assembly, founded on 6th December 1946 which recognises various diversity of Indian society.

→ Legislation: Several laws related to civil and criminal matters have been enacted, which may be amended or repealed from time to time.

→ Economy: The economic growth of India until recently was guided by Planned Development, through twelve Five-Year Plan.

→ Education: There has been significant expansion of number of educational institutions.

→ Polity: In Post-Independent India, a system of governance based on the principle of democracy has been adopted by us.

By going through these Maharashtra State Board Class 12 Economics Notes Chapter 5 Forms of Market students can recall all the concepts quickly.

Maharashtra State Board Class 12 Economics Notes Chapter 5 Forms of Market

→ Market in Economics refers to an arrangement through which buyers and sellers come in close contact with each other directly or indirectly for exchange of goods and services at a particular price. This may be by way of telephone, internet, etc. Thus, the essentials of market are

1. There are many buyers and sellers.
2. Market involves exchange of goods and services.
3. There is a price for a commodity.
4. They have either direct or indirect contact.
5. They may be spread over to a place, region, country or world without knowing each other e.g. We buy things through Amazon.

Classification of Market:
Market can be classified on the basis of place, time and competition.

1. On the basis of place: These can be further divided into :

→ Local Market: When goods are produced and sold in local areas mainly then market for such goods is called local market. E.g. perishable goods or bulky goods like bricks.

→ Regional Market: When goods have market within a particular region, market for such goods is called regional market. E.g. Regional movies mainly have regional market.

→ National Market: Market confined to a domestic market in a country is called national market. E.g. cars, scooters, T.V., etc.

→ International Market: Goods which can be sold in any part of the world have international market. E.g. tea, coffee, petroleum, etc.

2. On the basis of Time: These can be further divided into :

→ Very Short Period Market: A market which lasts for a few days or maximum a week, is called very short period market. E.g. for fruits market, vegetables market, etc.

→ Short Period Market: When the supply of the product can be increased to some extent say upto one year with the help of available raw material, then market to such goods is called short period market.

→ Long Period Market: It is a market from one year to five years when the supply can be increased on demand.

→ Very Long Period Market: It is a market for more than five years when supply can be fully adjusted to demand.

On the basis of Competition: These can be of following types:

→ Perfect Competition

→ Imperfect Competition: This is further divided into :

• Monopoly,
• Oligopoly,
• Monopolistic competition.

Perfect Competition: In Perfect competition, there are large number of buyers and sellers engaged in buying and selling a homogeneous product at a single uniform price in the market. Its main features are –

• Large number of buyers and sellers
• Homogeneous products
• Free entry and exit of firms
• Uniform price or price taker
• Perfect knowledge
• Perfect mobility of factors
• No transport cost
• No government intervention

Price determination under Perfect Competition: In this market, price is determined at the point of intersection of demand and supply curves in the market. This is called equilibrium price where quantity demanded is equal to quantity supplied as follows:

In this diagram, demand and supply curves intersect at point E, where sellers are ready to sell OQ quantity at price OP and buyers O are ready to buy OQ quantity at price OP. If price rises or falls, changes in demand and supply bring the price back to equilibrium level.

Imperfect Competition: It is a type of market which has some features of perfect competition. It may be of following types: Monopoly, Oligopoly, Monopolistic competition.

(I) Monopoly: It is a market in which there is only one seller who has complete control over the market supply and there are no close substitutes. Its main features are:

• Single seller
• Large number of buyers
• No close substitutes
• Entry barriers
• Price maker
• Price discrimination
• Control oversupply
• Aims at profit maximisation
• No difference between firm and industry

Types of Monopoly:
It can be of following types:-

1. Natural monopoly
2. Legal monopoly
3. Joint monopoly
4. Simple monopoly
5. Discriminating monopoly
6. Private monopoly
7. Public monopoly

(II) Oligopoly: On the basis of competition, oligopoly market is one in which there are a few sellers selling homogeneous or differentiated products which are close substitutes of each other. E.g.
cement companies, baby foods, etc. Its main features are –

• Large number of buyers
• A few sellers
• Interdependence
• Selling cost
• Entry barriers
• Uncertainty
• Lack of uniformity

(III) Monopolistic Competition: It is a market in which there are large number of buyers and fairly large number of sellers producing similar or differentiated products which are close substitutes of each other. It has some elements of monopoly and some elements of competition. Therefore, this market is known as monopolistic competition. e.g. market for vegetable oil, washing powders, soaps etc. Its main features are –

• Large number of buyers
• Fairly large number of sellers
• Product differentiation
• Free entry and exit of firms
• Selling cost
• Downward sloping demand curve
• Concept of group

Thus, market is said to exist when:

1. There are many buyers and sellers.
2. They may be spread either to a place, region, country or world.
3. Goods are bought and sold at a price.
4. People have the knowledge about market price.
5. Freedom of entry and exit of firms.

By going through these Maharashtra State Board Class 12 Psychology Notes Chapter 1 Psychology: A Scientific Discipline students can recall all the concepts quickly.

Maharashtra State Board Class 12 Psychology Notes Chapter 1 Psychology: A Scientific Discipline

Introduction:
The word science is derived from the Latin word ‘Scientia’ which means ‘knowledge’. Science is the pursuit and application of knowledge and understanding of the natural and social world, following a systematic methodology based on evidence.

The key features of science are:

• Empirical evidence – It refers to acquiring information through direct observation or experiments. Scientific knowledge is based on verifiable evidence.
• Objectivity – This refers to the ability to observe and accept facts as they exist, setting aside all sources of expectations, values, prejudices, etc.
• Scientific causality – Science aims to establish a cause-effect between the variables under consideration, i.e., the effect of the Independent Variable on the Dependent Variable.
• Systematic exploration – Science adopts a sequential procedure for studying various phenomena. It includes scientific steps like formulating a hypothesis, collection of facts, scientific generalisation etc.
• Replication – Scientific knowledge can be replicated under the same circumstances as the original experiment. This ensures reliability of results towards establishing a scientific theory.
• Predictability – Science involves describing and explaining phenomena as well as to make predictions accordingly.

History Of Psychology As A Science:

• Psychology did not emerge directly as a science. It was earlier a branch of philosophy. In 1879, at the University of Leipzig (Germany), Wilhelm Wundt established the first psychological laboratory. This led to psychology as a separate scientific discipline.
• Structuralism advocated by Wundt and Titchener is regarded as the first school of thought in psychology. Functionalism was advocated by William James. Psychoanalysis was proposed by Sigmund Freud.
• In the early 20th century, John Watson advocated a new school of thought in psychology, i.e., Behaviourism. It focused on the study of observable behaviours.
• In the later half of the 20th century, Humanistic Psychology was advocated by Carl Rogers. It focused on the power of free will towards self-actualization.
• American Psychologist, Ulric Neisser, is considered as the founder of Cognitive Psychology which focuses on cognitive processes.

School of thought	Main contributors	Focus
(1) Structuralism	Wilhelm Wundt, Titchener	Method of Introspection
(2) Functionalism	William James	Human Consciousness
(3) Psychoanalysis	Sigmund Freud	Unconscious mind
(4) Behaviourism	John Watson, Ivan Pavlov	Observable behaviour
(5) Humanistic Psychology	Carl Rogers, Abraham Maslow	Free will, self-actualization
(6) Cognitivism	Ulric Neisser, Jean Piaget	Cognitive processes

Research Methods In Psychology:

Experimental Method – The systematic observation about a certain problem under controlled laboratory conditions is called an experiment.

The steps involved in an experiment are:

• identifying the problem,
• formulating a hypothesis,
• selecting an experimental design,
• conducting the experiment and data collection,
• data analysis,
• drawing conclusions.

The features of the experimental method are :

• it is the most objective and scientific method of studying behaviour
• it helps to establish cause-effect relationship between two or more variables
• the findings of an experiment are verifiable.
• The limitations of this method are :
• it may not be possible to control all intervening variables,
• it has a limited scope, i.e., there may be ethical constraints or risk factors
• experimenter’s expectations or participant attitude may influence the conclusions.

Survey Method – A survey is a research method used to collect data from a pre-determined group of respondents, i.e., a sample. It is used to obtain information about the preferences, opinions, etc., of the ‘sample’ population making use of tools like questionnaires, checklists, interviews, etc.

Survey method is employed by social psychologists, industrial psychologists, etc. The researcher must ensure that the sample of respondents is representative of the population.

Observation Method – It is a research method that is employed in conditions where experiments may not be possible or even necessary. Observation method is used by child psychologists and social psychologists. It may be carried out in a natural setting, for e.g., observing candidates waiting their turn for an interview or may be done in controlled conditions.

It is a time-consuming, subjective method. It needs to be carried out in a systematic manner for it to be considered as scientific.

Case Study Method – It is a qualitative research method employed by clinical psychologists. It provides intensive, descriptive information about an individual from multiple sources such as family, peers, school, etc.

This helps to assess the person’s level of psychological and social functioning. Researchers employ techniques like observation, interviews, psychological tests, etc.

Correlation Method – A correlation refers to a statistical tool used to measure the relationship between two or more variables.

If the change in one variable is accompanied by a change in the other variable, this interdependence is called correlation. It is measured by correlation coefficient which extends between -1.00 to +1.00.

The types of correlation are :
Positive correlation – Both variables either increase or decrease at the same time, for e.g., extent of rehearsal (revision) ↑ and recall score ↑. The value of positive correlation from 0.00 to + 1.00. It is represented as :

Negative correlation – An increase in one variable is associated with a decrease in the other and vice versa. The value of the correlation is between 0.00 to -1.00, for e.g., bunking of lectures (↑) and score in exams (↓).

Zero correlation – A change in one variable leads to no significant change in the other variable, for e.g., height and intelligence.

Challenges In Establishing Psychology As A Science:

Many criticisms of psychology as a science have been made on practical, philosophical and ethical grounds.

The challenges in establishing psychology as a science are :

• It is in pre paradigmatic state – According to American philosopher, Thomas Kuhn, psychology is still in a preparadigmatic state as it has not succeeded in producing a cumulative body of knowledge that has a clear conceptual core. In psychology, basic paradigms on which the whole scientific inquiry can rest do not exist.
• Issues related to objectivity and validity – Methods used in psychology such as introspection, surveys and questionnaires are subjective. Due to this, psychology lacks two criteria of science, i.e., objectivity and validity.
• Issues related to predictability and replicability – In psychology, it is difficult to make exact predictions as people respond differently in different situations. Test results tend to be more varied and hence difficult to replicate.
• Objectifying humans – According to some psychologists, subjecting human behaviour to experimentation amounts to objectifying human beings.

Rationality:
One of the significant aims of individuals is the attainment of happiness. However, in the pursuit of happiness, one should not be driven by irrational influences or compromise on social norms and ethics. Psychology helps to improving life quality by applying the concept of rationality in daily life.

According to Stanovich, “Rationality involves adaptive reasoning, good judgement and good decision making.”

According to Dr. Albert Ellis, rationality helps a person to successfully attain goals and be happy. He proposed Rational Emotive Behavioural Therapy (REBT), which is a popular intervention method in counselling psychology.

According to Ellis, rational people possess characteristics such as:

• Understanding both self-interest and social interest – Rational people understand what choices help them to grow and take responsibility for their actions. They are also careful not to violate the rights of others.
• Self-direction – The person does not demand excessive attention or support from others as he/she assumes the responsibility for his/her own life.
• Tolerance – It is the willingness to accept beliefs and behaviour patterns of others that may differ from our own way of thinking.
• Flexibility – Rational people tend to be flexible and unbiased in their thoughts and actions.
• Self-acceptance and self-responsibility – A rational person accepts him/herself unconditionally as well as takes responsibility for his/her thoughts, emotions and behaviour.

The concept of rationality can be explained as :

B (Balance)	Balance between self-interest and interest of others
E (Estimate)	Estimate the time, efforts, gains and losses
R (Respect)	Respect oneself and others
A (Affiliate)	Affiliate with others
T (Tolerate)	Tolerate oneself and others
I (Integrate)	Integrate personal wellbeing with social wellbeing
O (Optimize)	Optimize potential fully
N (Navigate)	Navigate path of success
A (Accept)	Accept the limitations and overcome them
L (Live)	Live life fully

Glossary:

→ Correlation Coefficient – A number which denotes the magnitude and direction of the relationship between two variables, it ranges between .1.00 to + 1.00.

→  Independent Variable – The variable being studied in an experiment it may change due to manipulations of the independent variable.

→ Hypothesis – A tentative explanation that can be tested to determine if it is true.

→ Independent Variable – In an experiment the variable that is systematically changed or manipulated by the experimenter in order to study its effect on the dependent variable.

→ Interview – An assessment tool for data collection involving face to face communication that can be used for diagnosis and in research.

→ Participant In a research study the individual who voluntarily participates and whose behaviour is being studied. Also called a subject or experimental participant.

→ Questionnaire – An instrument typically used in a research study that consists of a senes of questions that is used to collect information from the participants.

→ Replicability – It is the possibility to replicate a research or its findings in order to test its validity.

By going through these Maharashtra State Board Class 12 Political Science Notes Chapter 3 Key Concepts and Issues Since 1991: Humanitarian Issues students can recall all the concepts quickly.

Maharashtra State Board Class 12 Political Science Notes Chapter 3 Key Concepts and Issues Since 1991: Humanitarian Issues

Introduction

Globalization brought in concepts like participatory State, environmental concerns, awareness of human rights, etc. Today, humanitarian issues have assumed significance.

Environment refers to everything that makes up our surroundings i.e., the conditions in which organisms live. The environment includes the natural environment i.e., all living and non-living things (e.g., soil, atmosphere, water, etc) that occur naturally as well as built environment i.e., natural environment that is modified into a human environment e.g., roads, bridges, etc.

Efforts to protect the environment-

→ UN Conference on Human Environment (Stockholm, 1972) The purpose was to encourage and provide guidelines for the protection of the environment.

→ World Commission on Environment and Development (1983) also called Brundtland Commissions put forward the concept of sustainable growth.

→ Rio de Janeiro Earth Summit (1992) sought to raise public awareness on the need to integrate environment and development and to create a partnership between developing and more industrialized nations to ensure a healthy future for the planet.

→ Earth Summit at Johannesburg (2002) recognized sustainable development as the most important goal for institutions at the national, regional, and international levels.

→ UN Conference on sustainable development (Rio-2012) is also called Rio Earth Summit or Rio+20. Environmental sustainability is defined as responsible interaction with the environment to avoid depletion or degradation of natural resources and allow for long-term environmental quality.
Its goal is to conserve natural resources, reduce pollution, develop alternate sources of power, etc.

Some of the important environmental concerns include –

→ Climate change due to greenhouse gas emissions have resulted in extreme weather conditions like flooding, wildfires, etc.

→ Pollution – Smog, air pollution, etc endanger public health.

→ Deforestation worsens global warming and also threatens humans and animals who rely on forests to sustain themselves

→ Water scarcity is a worldwide problem.

→ Loss of Biodiversity is mainly due to climate change and threatens food security and population health.
The Ministry of Environment, Forest, and Climate change is the nodal agency in India for planning, promotion, coordination, and implementation of the country’s environmental and forest policies and programmes. The main concerns of MoEFCC relate to the conservation of natural resources and biodiversity and the prevention of pollution. It is guided by the principle of sustainable development.

Poverty And Development:
The traditional perception of poverty is where people are unable to provide for their basic necessities of life. It is the deprivation of common necessities that determine the quality of life including food, clothing, shelter, and safe drinking water. The alternate view of poverty focuses on both material and non-material aspects i.e., focus on community ties, values and availability of common resources, participatory decision making, and political and economic decentralization.

The purpose of development is to ensure the welfare of the people and is associated with economic growth. The traditional approaches to development focus on the predominant role of the State in promoting economic growth (Socialist) or the role of a free-market economy (Capitalist). Since the 1990s, the alternative view of development that focuses on both material and non-material aspects has become acceptable. The focus today is a development based on equity, participation, empowerment, and sustainability.

According to ECOSOC, poverty is a denial of choices and opportunities and a violation of human dignity. Poverty entails more than the lack of income and productive resources to ensure sustainable livelihoods.

The first UN Decade for poverty eradication (1997-2006) and the second UN Decade for ‘poverty eradication (2008-2017) stated that poverty is the greatest global challenge and that it is necessary to bring about sustainable development to alleviate poverty. Democratization and protection of human rights are key components of good governance that are necessary to eradicate poverty.

Poverty And Development In India:
India’s vision of development had three aspects :

→ Modernisation of the Economy – During the Nehruvian period, the focus was on land reforms, irrigation and large scale industrialisation to provide employment and increase productivity.

→ Self-reliance – This included ‘import substitution strategy to develop indigenous industry.

→ Socialist pattern of society – It was based on promotion of the Welfare State, employment generation and importance to the public sector. The Planning Commission (March 1950 to 31st December 2014) was created to chalk out Five Year Plans for development.

→ ‘Growth with Social Justice and Equity has been India’s policy towards poverty and development. Its development strategy has evolved over the years. In the early stages, government played a dominant role through the public sector. The 1960s were the period of the Green Revolution.

In the 1980’s India faced on economic crisis, due to poor performance of the public sector and wasteful public expenditure programmes. After 1991, wide-ranging economic reforms were initiated. Policies of economic liberalisation and privatisation of public sector were initiated.

→ The government, along with private sector and civil society continue to play an important role in socio-economic development. The Global MPI released by the UNDP indicates that between 2005-06 and 2015-16 incidence of multidimensional poverty has decreased from 54.7% to 27.5%.

Gender Issues:

There is a distinct link between poverty and unsatisfactory conditions of women. In most parts of the world, women are poor due to cultural norms and unequal power equations between men and women. In the 1970s, women’s empowerment came to be accepted as an important philosophy to bring about gender justice.

The UN ‘Decade for Women’ began in 1976 with the following objectives:

• to link women’s issues with developmental issues
• to promote equal rights and opportunities for women across the globe.

Some of the important gender-related issues in India:

→ Economic inequality – There is a high level of the male-female wage gap. The participation of women in the labour force is only 28.2 %

→ Literacy rate – As per the 2011 census report, the female literacy rate is 65.46% as compared to 82.14% of male literacy

→ Trafficking and exploitation – Women in India, especially in the hinterland, are vulnerable to be forced into marriage, to work as maids or in the flesh trade

→ Low political representation – There is a 33% reservation for women in elected local bodies only. Women representatives are few, both in Parliament and in most State legislatures.

→ The 1st Lok Sabha had 24 women (5%) and the 17th Lok Sabha has 78 women (14%) which is the highest representation to date. The Central Social Welfare Board (CSWB) was set up in 1953 to carry out welfare activities for women, children, etc.

The evolution of approaches to women’s issues are :

→ Welfare approach – It focused on community development through Mahila Mandals, health, and education programmes, etc.

→ Development approach – It focused on the rights and status of women in areas of health, education, and employment.

→ Empowerment approach – It focused on the participation of women in planning and implementing welfare schemes was necessary.

→ National Commission for Women (NCW) was established on 31st January 1992 under provisions of the NCW Act (1990).

→ 73rd and 74th amendments (1993) provided for reservation of seats in local bodies (like Municipalities, Panchayats) for women. Department of Women and Child Development was set up as a separate ministry in 2006 to create gender equitable and child-centered legislation and programmes.

Legislations for women’s welfare include the Protection of Women from Domestic Violence Act 2005, Muslim Women (Protection of Right of Marriage) Act, (2019).

By going through these Maharashtra State Board Class 12 Economics Notes Chapter 9 Money Market and Capital Market in India students can recall all the concepts quickly.

Maharashtra State Board Class 12 Economics Notes Chapter 9 Money Market and Capital Market in India

Financial Markets:
Financial Markets refers to market where sale and purchase of financial assets such as bonds, stock, derivatives, government securities, foreign currency, etc. takes place.
Financial market operates through banks, non-banking financial institutions, brokers, mutual funds, discount houses, etc.
Financial Markets include two distinct markets i.e. Money market and Capital market.

MONEY MARKET IN INDIA

Money Market:
Money Market is a market for short terms funds. It deals in funds up to one-year maturity.
It is market for ‘near money’ i.e. short term instruments such as trade bills, government securities, promissory notes, etc.
Such instruments are highly liquids in nature, less risky and easily marketable.

Structure of Indian Money Market:
The Indian money market consist of 2 segments namely organised sector and unorganised sector. Main money marketplace in India are located at Mumbai, Delhi and Kolkata.
Mumbai is the most active money market centre in India.

Central Bank of India (Reserve Bank of India):
Central Bank is the apex or the supreme monetary banking authority and occupies an important position in the monetary and banking structure of the country.

→ The central bank aims at promoting the financial and economic stability of the country.

→ It is a reservoir of credit and a lender of the last resort.

→ RBI was set up on the basis of the recommendation of Hilton Young Commission.

→ RBI commenced its operations on 1st April, 1935 as a private shareholder’s bank.

→ RBI was nationalised on 1st January 1949.

→ It is the most important constituent of the money market.

→ In different countries, the central banks are known by different names, for instance in U.S.A. it is known as Federal Reserve System, in UK it is called as Bank of England.

Definition:

→ According to M.H. de Kock “A central bank is one which constitutes the apex of the monetary and banking structure of its country, and which performs as best as it can in the national interest, certain functions such as note issue, banker to the government, banker to the banks and custodian of country’s foreign exchange resources.”

→ According to Prof. W. A. Shaw “A central bank is a bank which controls credit. ” From the above definitions, it is clear that the central bank is the supreme monetary and banking authority and occupies a pivotal position in the monetary and banking structure of the country.

Functions of Central Bank:
The functions of central bank differ from country to country in accordance with the prevailing economic conditions. But some functions which are commonly performed by the central banks in all the countries are :

→ Issue of Currency Notes: The central bank has been authorised to print and issue currency notes. The RBI enjoys the monopoly of note issue of all denominations except one rupee note. The one rupee note and coins are issued by the Ministry of Finance of the Government of India but their distribution is undertaken by RBI.

→ Banker to the Government: The central bank acts as (A) a banker, (B) an advisor, and (C) an agent to the government. It performs all those functions which commercial banks perform for their customers.
It act as a friend, philosopher and guide to the government.

→ Bankers’ Bank: The central bank is the apex body of the banking system. It supervises, coordinates and controls the operations and activities of the commercial banks. As their bank it undertakes following functions:

(A) acts as a custodian of Cash Reserve
(B) acts as a lender of last resort
(C) acts as a clearinghouse

→ Controller of Credit / Money Supply: To overcome inflation, it restricts the supply of credit and to prevent depression and deflation, it expands credit. There are various methods through which central bank controls the supply of credit in the economy. They are –

(A) Quantitative Methods or General Measures
(B) Qualitative Methods or Selective Measures

→ Custodian of Foreign Exchange Reserve of the Country: The central bank is a custodian of country’s gold and major foreign currencies like US dollar, Euro the British Pound, etc. which are obtained by government from international trade. An important function of central bank is to maintain the exchange rate of national currency.

→ Developmental and Promotional Functions: In developing countries like India, a very important function of central bank is to promote, economic development.

• To promote banking habit among the people.
• To provide agriculture finance through NABARD and to promote rural and agriculture development.
• To provide Industrial Finance through IDBI, IFCI and SFC and to boost the growth of industrial sectors of India.
• To provide Export-Import Finance through EXIM Bank.
• To encourage small savings by providing opportunities of investment and better returns for small savers.

→ To collect data and publish through monthly bulletins like RBI Bulletin, RBI Journals, etc.

Commercial Bank:
A bank is a dealer in credit. Commercial bank performs all the functions for earning profit. Commercial banks play an important role in mobilizing savings and allocating them to various sectors of the economy. It includes both scheduled commercial bank and non scheduled commercial bank.

Scheduled commercial banks are those included in the second schedule of the Reserve Bank of India Act 1934. In terms of ownership and function commercial bank in India can be classified into 4 categories Public Sector banks, Private Sector banks, Regional Rural banks, Foreign banks.

Definition:
Banking Regulation Act 1949 defines – “Banking means the accepting for the purpose of lending or investment of deposits of money from public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise. ”

Functions of a Commercial Bank:
Primary Functions / Banking Functions :

→  Accepting Deposits: Commercial bank accepts the following types of deposits :
(a) Demand Deposits and
(b) Time Deposits

(a) Demand Deposits: are of two types –

1. Current Account Deposits
2. Saving Account Deposits

(b) Time Deposits: are of two types –

• Recurring Deposits
• Fixed Deposits

→ Advancing / Granting Loans: Commercial banks grant loans and advances to the borrowers in the following forms :

1. Loans
2. Cash Credit
3. Overdraft facility
4. Discounting of bills

Ancillary, Secondary or Non-Banking or Subsidiary Functions:

Multiple Credit Creating Process of Commercial Banks:
Commercial banks accept deposits called primary deposits from the public. These deposits form the basis of all credit creation activities. A part of these deposits are kept as reserve by the bank to meet the demand for cash by the depositor. This is termed as minimum cash reserve.

The balance over the minimum cash reserve which is used by the banks to create credit by way of providing loans is known as derivative deposits. When a bank grants loan to a borrower, bank opens a deposit account in the name of the borrower and credit the loan amount in this account. This is called derivative deposit. Borrower can withdraw money from this account by means of cheque.

When the borrower withdraws money from his loan account by a cheque, it is deposited by the payee in some other bank. These banks again create credit on the basis of fresh deposits received after keeping the required reserves. In this way commercial bank creates credit money which is the part of total money supply. So commercial banks are also known as manufacturers of money. The amount from repaid loans can be further used to sanction additional loans. This process is called as multiple credit creation.

Co-operative Banks:
Co-operative Credit Societies is Act of 1904 led to formation of co-operative banks. Presently registered under Co-operative Society Act, 1965. Their main function is to get the deposits from members and public and grant loans to farmers (even farmers who is not a member) and small industrialist in both rural and urban area.

The co-operative credit sector comprises of co-operative credit institutions such as primary co-operative credit societies, district central co-operative bank and state co-operative banks.

Development Financial Institutions (DFI’S): Development financial institutions are agencies that provides medium and long term financial assistance and are engaged in promotion and development of industry, agriculture and other key sectors.
Industrial Finance Corporation of India (IFCI) was the first development financial institution to be established in 1948. Following are the types of financial institutions in India :

• Term lending eg. IFCI, IDBI, ICICI, EXIM
• Refinance Institutions
• Investment Institutions
• State level Institution

Industrial Credit and Investment Corporation of India (ICICI) has become a universal bank by a reverse merger with its subsidiary ICICI Bank.

Discount and Finance House of India (DFHI):
DFHI was incorporated in March 1988 on recommendation of the Vaghul Committee. It commenced its operation in April 1988. It is jointly owned by the RBI, public sector banks and financial institutions. The main function of this money market institution is to discount, re-discount, purchase and sell treasury bills, trade bills, commercial bills and commercial papers.

Unorganised Sector
Unorganised money market generally operates in urban centres, but their actual activities are largely confined to rural sector. This market is unorganised because its activities are not coordinated by the RBI.

Indigenous Bankers:
They are financial intermediaries which operates on similar line to banks. They deal in short term credit instruments like hundi (Indigenous bill of exchange). The rate of interest differ from one market to another and from one bank to another. They do not depend on deposits entirely, they may also use their own funds.

They provide loans directly to trade and industry and to agriculturists through money lenders and traders.
They are the important source of fund due to inadequate banking facilities, simple and flexible nature of their operations, their informal approach and personal contacts, prompt services and availability of timely funds.

Money Lenders:
Moneylenders are predominant in villages. However, they are also found in urban areas. Interest rates are generally high. Large amount of loans are given for unproductive purposes. The operation of money lenders are prompt, informal and flexible. The borrowers are generally agricultural labourers, marginal and small farmers, artisans, factory workers, small traders, etc. Due to exploitative nature of money lenders, their activities are presently restricted by RBI.

Unregulated Non-bank Financial Intermediaries:
It consist of Chit funds, Nidhis, Loan Companies and others.

→ Chit funds: They are saving institutions. The members make regular contributions to the fund. The collected fund is given to some member based on previously agreed criterion (by bids or by draws). Chit funds are more famous in Kerala and Tamilnadu.

→ Nidhis: The deposits from the members are the major source of funds and they make loans to members at reasonable rate of interest for the purpose of construction of house, repairs, etc. They are highly localized to South India.

→ Loan Companies: They are called finance companies. Their total capital consists of borrowings, deposits and owned funds. They offer high rate of interest along with other incentives to attract deposits. A part is invested in banks in the form of fixed deposits and the rest is used to grant loans. Their activities are mainly confined to traders, small scale industries and self-employed person. Loans are given at a very high rate of interest.

Money Market Instruments:
The following instruments are traded in the money market – Call or Notice Money, Treasury Bills, Commercial Papers, Certificate of Deposits and Commercial Bills.

Role of Money Market in India:

• To fulfil short-term requirements of borrowers.
• To provide better liquidity management.
• To provide portfolio management.
• To establish equilibrium between the demand for and supply of short-term funds.
• To fulfil financial requirements of the Government.
• To implement monetary policies announced by the central bank.
• To economize the use of cash.
• To ensure growth of commerce, industry and trade.

Problems of the Indian Money Market:
Indian Money Market is relatively underdeveloped when compared to advanced markets like London and New York Money Markets.

Its main weaknesses are given as below :

• Existence of Unorganised Money Market
• Multiplicity in Interest Rates
• Shortages of Funds
• Seasonal Diversity of Money Market
• Absence of Well Organized Banking Sector
• Delays in technological up-gradation

Reforms Introduced in the Money Market:

1. Introduction of New Money Market Instruments
2. Liquidity Adjustment Facility (LAF)
3. Deregulation of Interest Rates
4. National Electronic Fund Transfer (NEFT) and Real-Time Gross Settlement (RTGS)

CAPITAL MARKET IN INDIA

Capital Market:
Capital market is the market for long term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending funds (Medium-term and long term funds). The demand for long-term funds comes mainly from industry, trade, agriculture and governments. The supply of funds comes largely from individual savers, corporate savings, bank, insurance companies, specialized financial institutions and government.

Structure of Capital Market in India:
The Capital Market, like any market, is composed of those who demand funds (i.e. borrower) and those who supply funds (i.e. lenders).

Indian Capital Market is broadly composed of

• Gilt-Edged (i.e. Govt. Securities Market)
• Industrial Securities Market
• Development Financial Institutions
• Financial Intermediaries.

→ Gilt Edged Market: It deals in government and semi-government securities. These securities carry fixed interest rates. The investors in government securities are mainly financial institution like Commercial banks, LIC and Provident fund. RBI plays a very important role in this market through open market operation.

→ Industrial Securities Market: It deals with shares and debentures of old and new companies. This market is further divided into new issue market i.e. Primary Market and old issue market i.e. Secondary Market.
The primary market helps to raise new capital through share and debentures. The secondary market deals with securities already issued by the companies. The primary market operates through the companies, while the secondary market operates through stock exchange. BSE and NSE are the premier stock exchanges in the country.

→ Development Financial Institution: They provide medium-term and long term financial assistance to the private sector. They include Industrial Finance Corporation of India 1948 (IFCI), the Industrial Credit and Investment Corporation of India (ICICI), the Industrial Development Bank of India (IDBI), Industrial Reconstruction Bank of India (IRBI) in 1971, which was renamed as Industrial Investment Bank of India Ltd., (IIBL) in 1995, the Export and Import Bank of India (EXIM Bank) in 1982 and so on.

→ Financial Intermediaries: They consist of merchant banks, mutual funds, leasing companies, venture capital companies and others. They help in mobilising savings and supplying funds to the capital market.

Role of Capital Market in India:

• To mobilise long term savings from various section of the population through sale of securities.
• To provide equity capital to business organisations for purchase of assets.
• To encourage public to invest in industrial securities.
• To help to achieve operational efficiency in the organisation.
• To determine fair and quick value of equity shares and debt instruments.
• To bring integration among various sectors of the economy.

Problems of the Capital Market:

• Irreparable loss to capital market, due to increasing number of scams and frauds.
• Loss of public trust and confidence among the investors.
• Problem of insider trading and price manipulation affecting smooth functioning of capital market.
• Lack of trading in debt instruments like bonds, debentures, etc.
• Decline in volume of trade as investors preferred to trade in premier stock exchanges like BSE and NSE.
• Lack of efficient information as compared to advanced countries.

Reforms in Capital Market:

1. Establishment of Securities Exchange Board of India (SEBI) in 1988.
2. Establishment of National Stock Exchange (NSE) in 1992.
3. Introduction of Computerised Screen-Based Trading System (SBTS).
4. Introduction of Demat Accounting system in 1996.
5. Increased access to global funds by Indian companies through ADRs and GDRs.
6. Establishment of Investor Education and Protection Fund (IEPF) in 2001.
7. Introduction of automated complaint handling system.