FST-1 (NOTES)

1. Account on social function of science?

Answer: Social science is a major branch of science, and a major category of academic
disciplines, concerned with society and the relationships among individuals within a society. It in
turn has many branches, each of which is considered a "social science". The main social
sciences include economics, human geography, political science, demography and sociology. In
a wider sense, social science also includes among its branches some fields in
the humanities such as anthropology, archaeology, history, law and linguistics.
Core concepts are: (1) That critical social theory should be directed at the totality of society in
its historical specificity (i.e. how it came to be configured at a specific point in time).
(2) That critical theory should improve understanding of society by integrating all the major social
sciences, including geography, economics, sociology, history, political science, anthropology,
and psychology.
Psychology is an academic and applied discipline that involves the scientific study of mental
functions and behaviors.
Psychology has the immediate goal of understanding individuals and groups by both establishing
general principles and researching specific cases, and by many accounts it ultimately aims to benefit
society. In this field, a professional practitioner or researcher is called a psychologist and can be
classified as a social, behavioral, or cognitive scientist. Psychologists attempt to understand the role
of mental functions in individual and social behavior, while also exploring
the physiological and biological processes that underlie cognitive functions and behaviors
Psychologists explore concepts such
as perception, cognition, attention, emotion, intelligence, phenomenology, motivation, brain
functioning, personality, behavior, and interpersonal relationships, including psychological
resilience, family resilience, and other areas. Psychologists of diverse orientations also consider
the unconscious mind.

2. Impact of freedom movement on the development of science and techonology ?

Answer: Jawaharlal Nehru aimed "to convert Indias economy into that of a modern state and to fit
her into the nuclear age and do it quickly." Nehru understood that India had not been at the forefront
of the Industrial Revolution, and hence made an effort to promote higher education, and science and
technology in India.

Indian agriculture benefited from the developments made in the fields of Biotechnology, for which a
separate department was created in 1986 under the Ministry of Science and Technology.] Both the
Indian private sector and the government have invested in the medical and agricultural applications
of biotechnology.] Massive Biotech parks were established in India while the government provided
tax deduction for research and development under biotechnological firms.
The Indian economy underwent economic reforms in 1991, leading to a new era of globalization and
international economic integration. Economic growth of over 6% annually was seen between 1993
2002. Some scientists and activists, such as MIT systems scientist Dr. VA Shiva Ayyadurai,
blame caste for holding back innovation and scientific research in India, making it difficult to sustain
progress while regressive social organization prevails.

Advancement in science and technology can help bring about development in terms of
increasing productive capability and greater freedom vis-vis the constraints of nature.
Secondly, such advancement is also instrumental in producing societal change and
transformation, with significant impacts on problems of human and social relations.
India has come a long way since its days of Independence. It has made wide scale
progress and development in many fields. Be it in the field of science and technology,
information technology or in any other field like health care, education etc., India has
achieved great heights. India has made substantial progress in the health sector. The
birth rates and death rates have come down considerably in the entire country. The
literacy rate of the nation has also increased over the years.
India has made great progress in the field of nuclear power. In today's world scenario,
India is one of the major nuclear powers. Besides, India has achieved a lot of success in
information technology. Indian I.T . sector is in great demand these days all over the
world. India is also one the few countries to have launched various satellites.
3. PROBLEM OF EVERYDAY LIFE WITH SCIENCE SOLVE AND EXAMPLE?
Answer: Our societies are 'driven' by ideas and products from science and technology (S &T)
and it is very likely that the influence of science and technology on our lives will continue to
increase in the years to come. The workplace and the public sphere are increasingly dependent
on new as well as upon more established technologies. So, too, are the private sphere and our
leisure time. Scientific and technological knowledge and skills are crucial for most of our actions
and decisions, as workers, as voters, as consumers, etc. Meaningful and independent
participation in modern democracies assumes an ability to judge the evidence and arguments
associated with the many socio-scientific issues that appear on the political agenda.

Our brains are under the influence of an ever- expanding world of new technology:
multichannel television, video games, MP3 players, the internet, wireless networks,
Bluetooth links - the list goes on and on.

For example, the possibility of engineering microorganisms to cheaply produce drugs for diseases
like malaria motivates many researchers in the field to continue their studies of microbe
genetics.

4. Theory of chemical evaluation on scientific basis?

Answer:-All material in the universe was created in a huge "explosion," creating and

defining matter and space. The sudden cooling of the superheated ejecta facilitated the
combination of atomic components into atoms and molecules. These clouds of gasses
eventually cooled and formed the principle components of galaxies - including stars
and planets.

Formation OF Solar system:A. The earth formed approximately 4.6 BYA (billion years ago.) Initially,
there was a cloud of gasses and dust particles, possibly originating from the
ejected particles of a nearby supernova.
B. The cloud gradually contracted and flattened, concentrating about 99%
of its mass in the center with the rest rotating counterclockwise in a flattened

disk.
C. As the disk rotated, turbulence was created, causing condensation of the
disk into small, turbular eddies. These gradually accreted together to form
protoplanets.
D. These protoplanets further accreted, creating the mature planets of the
solar system.
The sun also accreted, pulling in most of the mass. As these accumulated, the
pressure and temperature caused the initiation of thermonuclear fusion. This
thermonuclear fusion is what provides the ultimate source of energy for all
life on earth.
In the hot accretions of planetesimals , iron-rich elements condensed first,
creating the cores (the inner and outer cores). Next, the lower-density
silicates began to condense and aggregate, forming the mantle and the crust.
Further differentiation of the crust was fueled by the energy output from
radioactive decay deep within the earth.

Chemical Evolution Occurred Early in Earth's History

Radiometric dating technique determines age of rocks.
Unstable-decay by emitting either radiation or particles.
Particle-emitting isotopes decay to daughter isotopes.

 Rate of decay for a specific isotope is constant and has a specific half-life.
Using radioactive isotopes to determine age of rocks.
o Measure ratio of daughter isotopes to parent isotope in a rock sample.
o Estimate the ratio that existed at the time the rock formed.
o Calculate number of elapsed half-lives since the rock formed.
Estimations of the Time when Chemical Evolution Occurred
Assume all components of solar system formed at same time, about 4.6 Ga
("giga ago").
Youngest known moon rocks are 3.8 Ga-correlates to slowing of asteroid
bombardment.
Oldest known cell fossils are found in rocks dated 3.5 Ga.
Conclusion-Chemical evolution occurred in the 300 million years between
cessation of asteroid bombardment (3.8 Ga) and age of oldest known cell
fossils (3.5 Ga).
Building Blocks of Chemical Evolution
96% of every organism is composed of the elements C, H, O, N.
These elements were present in the forms of CO 2, H2O, N2 and some CH4, H2,
and NH3
Chemical Modeling of Chemical Evolution Reactions
Formaldehyde (H2CO) and hydrogen cyanide (HCN) are simple, carboncontaining inorganic molecules that are key intermediates in forming larger
organic molecules.
Can H2CO and/or HCN be produced by an input of energy to the types of
molecules available 3.8 Ga?

o Pinto et al.-Hypothesis: CO2 + 2H2 + energy ----> H2CO + H2O

o Prepared computer model of all possible reactions.
o Model used energy from photons of sunlight, which knock electrons
from valence orbitals and create free radicals. (Fig. 2.11)
o Specified concentrations and temperature based on estimates of early
Earth conditions.
Higher temperature increases number of collisions.
Higher concentration of reactants increases collisions.
Specified reaction rates in the model based on measurements from
laboratory experiments under controlled conditions.
Model indicates appreciable quantities of formaldehyde are
produced.
Zahnle develops a similar model showing HCN could also form.
Reduction of carbon was a key step in chemical evolution.
Carbon is the most versatile molecule found in biological tissues.
o Each carbon atom can form four bonds with other molecules.
o Carbon atoms form the skeleton of organic molecules.
o Carbon atoms can be linked in many arrangements.
o A wide variety of molecular shapes is possible.
o Functional groups added to carbon skeleton impart a variety of chemical
reactivities to carbon molecules.
Reduction of CO2 by H2 forms H2CO, which is used as a building block to form
organic compounds (compounds containing at least one C-C bond).

For carbon to be reduced, early atmosphere must have contained CH4, H2, and
NH3 (molecules that can give up electrons).
Volcanic ash is known to be rich in CO2, H2O, and N2.
Recent evidence indicates it also has small amounts of CH 4, H2, and NH3.
Once organic molecules formed, only heat was needed to drive formation of more
complex organic molecules to complete chemical evolution.
Heat was widely available on early Earth as thermal energy.
Heat + potential chemical energy in bonds of organic compounds was sufficient
to drive formation of more complex organic compounds.
Conditions in the Oceans at the Time of Chemical Evolution
Earth cools; water condenses from atmosphere, forms rains.
Rainwater dissolves salts from rocks, forms oceans.
o Salts are most abundant substances leached from rocks.
o Salts are held by ionic bonds
o Chemical evolution may have begun in a salty ocean of pH 7.
5. Minerals - sources can be made sustainably available?
Answer:-A mineral is a naturally occurring, inorganic substance with a definite
chemical composition and a crystalline structure. Some common minerals are
quartz, feldspar and mica. Man uses minerals not only to make household articles
such as stainless utensils, reading glasses, and even precious- jewellery , but also
materials for constructing buildings and space shuttles.
Different minerals have been used in different ways since man discovered them. In ancient
Egypt, for example, royal women used the powder of lapis lazul as a cosmetic! Nowadays,

the use of minerals is common in everyday items such as toothpaste, eyeglasses and some
life saving hospital equipments.
Sustainable development is the need of the hour if we are to provide a secure future for
future generations. The World Commission on Environment and Development defines
sustainable development as "... meets the needs of the present without compromising the
ability of future generations to meet their own needs."
Abandoned land mines, mining in open areas, drilling for all- all these activities, if unplanned
and not- environment- friendly also affects human health. Many organizations have brought
these issues into public focus through their publications and campaign.

The ability to supply a commodity determines its availability as has been demonstrated, demand for
minerals can also influence their availability. How minerals are used, where they are distributed and
how, trade barriers, downstream use industries, substitution and recycling can potentially influence
the demand for minerals, and ultimately their availability. While economists are cognisant of the role
of demand as an availability driver, historically they have not considered factors besides depletion as
having a long-term impact on mineral availability.
6. scientific possibilities and social realities in context of agriculture in india?
Answer:-

Until about four decades ago, crop yields in agricultural systems depended on internal resources, recycling of
organic matter, built-in biological control mechanisms and rainfall patterns. Agricultural yields were modest,
but stable. Production was safeguarded by growing more than one crop or variety in space and time in a field
as insurance against pest outbreaks or severe weather. Inputs of nitrogen were gained by rotating major field
crops with legumes. In turn rotations suppressed insects, weeds and diseases by effectively breaking the life
cycles of these pests. A typical corn belt farmer grew corn rotated with several crops including soybeans, and
small grain production was intrinsic to maintain livestock. Most of the labor was done by the family with
occasional hired help and no specialized equipment or services were purchased from off-farm sources. In
these type of farming systems the link between agriculture and ecology was quite strong and signs of
environmental degradation were seldom evident (1) .
But as agricultural modernization progressed, the ecology-farming linkage was often broken as ecological
principles were ignored and/or overridden. In fact, several agricultural scientists have arrived at a general
consensus that modern agriculture confronts an environmental crisis. A growing number of people have
become concerned about the long-term sustainability of existing food production systems. Evidence has
accumulated showing that whereas the present capital- and technology-intensive farming systems have been
extremely productive and competitive, they also bring a variety of economic, environmental and social
problems (2) .
Evidence also shows that the very nature of the agricultural structure and prevailing policies have led to this

environmental crisis by favoring large farm size, specialized production, crop monocultures and
mechanization. Today as more and more farmers are integrated into international economies, imperatives to
diversity disappear and monocultures are rewarded by economies of scale. In turn, lack of rotations and
diversification take away key self-regulating mechanisms, turning monocultures into highly vulnerable
agroecosystems dependent on high chemical inputs.
The expansion of monocultures
Today monocultures have increased dramatically worldwide, mainly through the geographical expansion of
land devoted to single crops and year-to-year production of the same crop species on the same land.
Available data indicate that the amount of crop diversity per unit of arable land has decreased and that
croplands have shown a tendency toward concentration. There are political and economic forces influencing
the trend to devote large areas to monoculture, and in fact such systems are rewarded by economies of scale
and contribute significantly to the ability of national agricultures to serve international markets.
The technologies allowing the shift toward monoculture were mechanization, the improvement of crop
varieties, and the development of agrochemicals to fertilize crops and control weeds and pests. Government
commodity policies these past several decades encouraged the acceptance and utilization of these
technologies. As a result, farms today are fewer, larger, more specialized and more capital intensive. At the
regional level, increases in monoculture farming meant that the whole agricultural support infrastructure (i.e.
research, extension, suppliers, storage, transport, markets, etc.) has become more specialized.
From an ecological perspective, the regional consequences of monoculture specialization are many-fold:

a. Most large-scale agricultural systems exhibit a poorly structured assemblage of farm

components, with almost no linkages or complementary relationships between crop
enterprises and among soils, crops and animals.

b. Cycles of nutrients, energy, water and wastes have become more open, rather than closed as
in a natural ecosystem. Despite the substantial amount of crop residues and manure
produced in farms, it is becoming increasingly difficult to recycle nutrients, even within
agricultural systems. Animal wastes cannot economically be returned to the land in a nutrientrecycling process because production systems are geographically remote from other systems
which would complete the cycle. In many areas, agricultural waste has become a liability
rather than a resource. Recycling of nutrients from urban centers back to the fields is similarly
difficult.

c. Part of the instability and susceptibility to pests of agroecosystems can be linked to the
adoption of vast crop monocultures, which have concentrated resources for specialist crop
herbivores and have increased the areas available for immigration of pests. This simplification
has also reduced environmental opportunities for natural enemies. Consequently, pest
outbreaks often occur when large numbers of immigrant pests, inhibited populations of
beneficial insects, favorable weather and vulnerable crop stages happen simultaneously.

d. As specific crops are expanded beyond their "natural" ranges or favorable regions to areas of
high pest potential, or with limited water, or low-fertility soils, intensified chemical controls are
required to overcome such limiting factors. The assumption is that the human intervention and
level of energy inputs that allow these expansions can be sustained indefinitely.

e. Commercial farmers witness a constant parade of new crop varieties as varietal replacement
due to biotic stresses and market changes has accelerated to unprecedented levels. A cultivar
with improved disease or insect resistance makes a debut, performs well for a few years

(typically 5-9 years) and is then succeeded by another variety when yields begin to slip,
productivity is threatened, or a more promising cultivar becomes available. A varietys
trajectory is characterized by a take-off phase when it is adopted by farmers, a middle stage
when the planted area stabilizes and finally a retraction of its acreage. Thus, stability in
modern agriculture hinges on a continuous supply of new cultivars rather than a patchwork
quilt of many different varieties planted on the same farm.

f. The need to subsidize monocultures requires increases in the use of pesticides and fertilizers,
but the efficiency of use of applied inputs is decreasing and crop yields in most key crops are
leveling off. In some places, yields are actually in decline. There are different opinions as to
the underlying causes of this phenomenon. Some believe that yields are leveling off because
the maximum yield potential of current varieties is being approached, and therefore genetic
engineering must be applied to the task of redesigning crop. Agroecologists, on the other
hand, believe that the leveling off is because of the steady erosion of the productive base of
agriculture through unsustainable practices (3).
The first wave of environmental problems
The specialization of production units has led to the image that agriculture is a modern miracle of food
production. Evidence indicates, however, that excessive reliance on monoculture farming and agroindustrial
inputs, such as capital-intensive technology, pesticides, and chemical fertilizers, has negatively impacted the
environment and rural society. Most agriculturalists had assumed that the agroecosystem/natural ecosystem
dichotomy need not lead to undesirable consequences, yet, unfortunately, a number of "ecological diseases"
have been associated with the intensification of food production. They may be grouped into two categories:
diseases of the ecotope, which include erosion, loss of soil fertility, depletion of nutrient reserves, salinization
and alkalinization, pollution of water systems, loss of fertile croplands to urban development, and diseases of
the biocoenosis, which include loss of crop, wild plant, and animal genetic resources, elimination of natural
enemies, pest resurgence and genetic resistance to pesticides, chemical contamination, and destruction of
natural control mechanisms. Under conditions of intensive management, treatment of such "diseases"
requires an increase in the external costs to the extent that, in some agricultural systems, the amount of
energy invested to produce a desired yield surpasses the energy harvested (4).
The loss of yields due to pests in many crops (reaching about 20-30% in most crops), despite the substantial
increase in the use of pesticides (about 500 million kg of active ingredient worldwide) is a symptom of the
environmental crisis affecting agriculture. It is well known that cultivated plants grown in genetically
homogenous monocultures do not possess the necessary ecological defense mechanisms to tolerate the
impact of outbreaking pest populations. Modern agriculturists have selected crops for high yields and high
palatability, making them more susceptible to pests by sacrificing natural resistance for productivity. On the
other hand, modern agricultural practices negatively affect pest natural enemies, which in turn do not find the
necessary environmental resources and opportunities in monocultures to effectively and biologically suppress
pests. Due to this lack of natural controls, an investment of about 40 billion dollars in pesticide control is
incurred yearly by US farmers, which is estimated to save approximately $16 billion in US crops. However, the
indirect costs of pesticide use to the environment and public health have to be balanced against these
benefits. Based on the available data, the environmental (impacts on wildlife, pollinators, natural enemies,
fisheries, water and development of resistance) and social costs (human poisonings and illnesses) of
pesticide use reach about $8 billion each year (5). What is worrisome is that pesticide use is on the rise. Data
from California shows that from 1941 to 1995 pesticide use increased from 161 to 212 million pounds of active
ingredient. These increases were not due to increases in planted acreage, as statewide crop acreage
remained constant during this period. Crops such as strawberries and grapes account for much of this
increased use, which includes toxic pesticides, many of which are linked to cancers (6) .
Fertilizers, on the other hand, have been praised as being highly associated with the temporary increase in
food production observed in many countries. National average rates of nitrate applied to most arable lands

fluctuate between 120-550 kg N/ha. But the bountiful harvests created at least in part through the use of
chemical fertilizers, have associated, and often hidden, costs. A primary reason why chemical fertilizers pollute
the environment is due to wasteful application and the fact that crops use them inefficiently. The fertilizer that
is not recovered by the crop ends up in the environment, mostly in surface water or in ground water. Nitrate
contamination of aquifers is widespread and in dangerously high levels in many rural regions of the world. In
the US, it is estimated that more than 25% of the drinking water wells contain nitrate levels above the 45 parts
per million safety standard. Such nitrate levels are hazardous to human health and studies have linked nitrate
uptake to methaemoglobinemia in children and to gastric, bladder and oesophageal cancers in adults (7) .
Fertilizer nutrients that enter surface waters (rivers, lakes, bays, etc.) can promote eutrophication,
characterized initially by a population explosion of photosynthetic algae. Algal blooms turn the water bright
green, prevent light from penetrating beneath surface layers, and therefore killing plants living on the bottom.
Such dead vegetation serve as food for other aquatic microorganisms which soon deplete water of its oxygen,
inhibiting the decomposition of organic residues, which accumulate on the bottom. Eventually, such nutrient
enrichment of freshwater ecosystems leads to the destruction of all animal life in the water systems. In the US
it is estimated that about 50-70% of all nutrients that reach surface waters is derived from fertilizers.
Chemical fertilizers can also become air pollutants, and have recently been implicated in the destruction of the
ozone layer and in global warming. Their excessive use has also been linked to the acidification/salinization of
soils and to a higher incidence of insect pests and diseases through mediation of negative nutritional changes
in crop plants (8).
It is clear then that the first wave of environmental problems is deeply rooted in the prevalent socioeconomic
system which promotes monocultures and the use of high input technologies and agricultural practices that
lead to natural resource degradation. Such degradation is not only an ecological process, but also a social
and political-economic process (9) . This is why the problem of agricultural production cannot be regarded
only as a technological one, but while agreeing that productivity issues represent part of the problem, attention
to social, cultural and economic issues that account for the crisis is crucial. This is particularly true today
where the economic and political domination of the rural development agenda by agribusiness has thrived at
the expense of the interests of consumers, farmworkers, small family farms, wildlife, the environment, and
rural communities (10).
The second wave of environmental problems.
Despite that awareness of the impacts of modern technologies on the environment increased, as we traced
pesticides in food chains and crop nutrients in streams and aquifiers, there are those that confronted to the
challenges of the XXI century still argue for further intensification to meet the requirements of agricultural
production. It is in this context that supporters of "status-quo agriculture" celebrate the emergence of
biotechnology as the latest magic bullet that will revolutionize agriculture with products based on natures own
methods, making farming more environmentally friendly and more profitable for the farmer. Although clearly
certain forms of non-transformational biotechnology hold promise for an improved agriculture, given its
present orientation and control by multinational corporations, it holds more promise for environmental harm,
for the further industrialization of agriculture and for the intrusion of private interests too far into public interest
sector research (11).
What is ironic is the fact that the biorevolution is being brought forward by the same interests (Monsanto,
Novartis, DuPont, etc.) that promoted the first wave of agrochemically-based agriculture, but this time, by
equipping each crop with new "insecticidal genes", they are promising the world safer pesticides, reduction on
chemically intensive farming and a more sustainable agriculture.
However, as long as transgenic crops follow closely the pesticide paradigm, such biotechnological products
will do nothing but reinforce the pesticide treadmill in agroecosystems, thus legitimizing the concerns that
many scientists have expressed regarding the possible environmental risks of genetically engineered

organisms.
So far, field research as well as predictions based on ecological theory, indicate that among the major
environmental risks associated with the release of genetically engineered crops can be summarized as follows
(12):

The trends set forth by corporations is to create broad international markets for a single
product, thus creating the conditions for genetic uniformity in rural landscapes. History has
repeatedly shown that a huge area planted to a single cultivar is very vulnerable to a new
matching strain of a pathogen or pest;

The spread of transgenic crops threatens crop genetic diversity by simplifying cropping
systems and promoting genetic erosion;

There is potential for the unintended transfer to plant relatives of the "transgenes" and the
unpredictable ecological effects. The transfer of genes from herbicide resistant crops (HRCs)
to wild or semidomesticated relatives can lead to the creation of super weeds;

Most probably insect pests will quickly develop resistance to crops with Bt toxin. Several
Lepidoptera species have been reported to develop resistance to Bt toxin in both field and
laboratory tests, suggesting that major resistance problems are likely to develop in Bt crops
which through the continuous expression of the toxin create a strong selection pressure;

Massive use of Bt toxin in crops can unleash potential negative interactions affecting
ecological processes and non-target organisms. Evidence from studies conducted in Scotland
suggest that aphids were capable of sequestering the toxin from Bt crops and transferring it to
its coccinellid predators, in turn affecting reproduction and longevity of the beneficial beetles;

Bt toxins can also be incorporated into the soil through leaf materials and litter, where they
may persist for 2-3 months, resisting degradation by binding to soil clay particles while
maintaining toxic activity, in turn negatively affecting invertebrates and nutrient cycling;

A potential risk of transgenic plants expressing viral sequences derives from the possibility of
new viral genotypes being generated by recombination between the genomic RNA of infecting
viruses and RNA transcribed from the transgene;

Another important environmental concern associated with the large scale cultivation of virusresistant transgenic crops relates to the possible transfer of virus-derived transgenes into wild
relatives through pollen flow.

Although there are many unanswered questions regarding the impact of the release of transgenic plants and
micro-organisms into the environment, it is expected that biotechnology will exacerbate the problems of
conventional agriculture and by promoting monocultures will also undermine ecological methods of farming
such as rotations and polycultures. Because transgenic crops developed for pest control emphasize the use of
a single control mechanism, which has proven to fail over and over again with insects, pathogens and weeds,
transgenic crops are likely to increase the use of pesticides and to accelerate the evolution of "super weeds"
and resistant insect pest strains. These possibilities are worrisome, especially when considering that during
the period 1986-1997, approximately 25,000 transgenic crop field trials were conducted worldwide on more
than 60 crops with 10 traits in 45 countries. By 1997 the global area devoted to transgenic crops reached 12.8
million hectares. Seventy-two percent of all transgenic crop field trials were conducted in the USA and

Canada, although some were also conducted in descending order in Europe, Latin America and Asia (13). In
most countries biosafety standards to monitor such releases are absent or are inadequate to predict
ecological risks. In the industrialized countries from 1986-1992, 57% of all field trials to test transgenic crops
involved herbicide tolerance pioneered by 27 corporations including the worlds eight largest pesticide
companies. As Roundup and other broad spectrum herbicides are increasingly deployed into croplands, the
options for farmers for a diversified agriculture will be even more limited.
The array of alternatives to conventional agriculture.
Reduction and, especially, elimination of agrochemical require major changes in management to assure
adequate plant nutrients and to control crop pests. As it was done a few decades ago, alternative sources of
nutrients to maintain soil fertility include manures, sewage sludge and other organic wastes, and legumes in
cropping sequences. Rotation benefits are due to biologically fixed nitrogen and from the interruption of weed,
disease and insect cycles. A livestock enterprise may be integrated with grain cropping to provide animal
manures and to utilize better the forages produced. Maximum benefits of pasture integration can be realized
when livestock, crops, animals and other farm resources are assembled in mixed and rotational designs to
optimize production efficiency, nutrient cycling and crop protection.
In orchards and vineyards, the use of cover crops improve soil fertility, soil structure and water penetration,
prevent soil erosion, modify the microclimate and reduce weed competition. Entomological studies conducted
in orchards with ground cover vegetation indicate that these systems exhibit lower incidence of insect pests
than clean cultivated orchards. This is due to a higher abundance and efficiency of predators and parasitoids
enhanced by the rich floral undergrowth (14).
Increasingly, researchers are showing that it is possible to provide a balanced environment, sustained yields,
biologically mediated soil fertility and natural pest regulation through the design of diversified agroecosystems
and the use of low-input technologies. Many alternative cropping systems have been tested, such as double
cropping, strip cropping, cover cropping and intercropping, and more importantly concrete examples from real
farmers show that such systems lead to optimal recycling of nutrients and organic matter turnover, closed
energy flows, water and soil conservation and balanced pest-natural enemy populations. Such diversified
farming exploit the complementarities that result from the various combinations of crops, trees and animals in
spatial and temporal arrangements (15).
In essence, the optimal behavior of agroecosystems depends on the level of interactions between the various
biotic and abiotic components. By assembling a functional biodiversity it is possible to initiate synergisms
which subsidize agroecosystem processes by providing ecological services such as the activation of soil
biology, the recycling of nutrients, the enhancement of beneficial arthropods and antagonists, and so on.
Today there is a diverse selection of practices and technologies available, and which vary in effectiveness as
well as in strategic value.
The barriers for the implementation of alternatives
The agroecological approach seeks the diversification and revitalization of medium size and small farms and
the reshaping of the entire agricultural policy and food system in ways that are economically viable to farmers
and consumers. In fact, throughout the world there are hundreds of movements that are pursuing a change
toward ecologically sensitive farming systems from a variety of perspectives. Some emphasize the production
of organic products for lucrative markets, others land stewardship, while others the empowerment of peasant
communities. In general, however, the goals are usually the same: to secure food self-sufficiency, to preserve
the natural resource base, and to ensure social equity and economic viability.
What happens is that some well-intentioned groups suffer from "technological determinism", and emphasize
as a key strategy only the development and dissemination of low-input or appropriate technologies as if these
technologies in themselves have the capability of initiating beneficial social changes. The organic farming

school that emphasizes input substitution (i.e. a toxic chemical substituted by a biological insecticide) but
leaving the monoculture structure untouched, epitomizes those groups that have a relatively benign view of
capitalist agriculture. Such perspective has unfortunately prevented many groups from understanding the
structural roots of environmental degradation linked to monoculture farming (16).
This narrow acceptance of the present structure of agriculture as a given condition restricts the real possibility
of implementing alternatives that challenge such a structure. Thus, options for a diversified agriculture are
inhibited among other factors by the present trends in farm size and mechanization. Implementation of such
mixed agriculture would only be possible as part of a broader program that includes, among other strategies,
land reform and redesign of farm machinery adapted to polycultures. Merely introducing alternative
agricultural designs will do little to change the underlying forces that led to monoculture production, farm size
expansion, and mechanization in the first place.
Similarly, obstacles to changing cropping systems has been created by the government commodity programs
in place these last several decades. In essence, these programs have rewarded those who maintained
monocultures on their base feed grain acres by assuring these producers a particular price for their product.
Those who failed to plant the allotted acreage of corn and other price-supported crops lost one deficit
hectrage from their base. Consequently this created a competitive disadvantage for those who used a crop
rotation. Such a disadvantage, of course, exacerbated economic hardship for many producers (17). Obviously
many policy changes are necessary in order to create an economic scenario favorable to alternative cropping
practices.
On the other hand, the large influence of multinational companies in promoting sales of agrochemicals cannot
be ignored as a barrier to sustainable farming. Most MNCs have taken advantage of existing policies that
promote the enhanced participation of the private sector in technology development and delivery, positioning
themselves in a powerful position to scale up promotion and marketing of pesticides. Realistically then the
future of agriculture will be determined by power relations, and there is no reason why farmers and the public
in general, if sufficiently empowered, could not influence the direction of agriculture along sustainability goals.
Conclusions
Clearly the nature of modern agricultural structure and contemporary policies have decidedly influenced the
context of agricultural technology and production, which in turn has led to environmental problems of a first
and second order. In fact, given the realities of the dominant economic milieu, policies discourage resourceconserving practices and in many cases such practices are not privately profitable for farmers. So the
expectation that a set of policy changes could be implemented for a renaissance of diversified or small scale
farms may be unrealistic, because it negates the existence of scale in agriculture and ignores the political
power of agribusiness corporations and current trends set forth by globalization. A more radical transformation
of agriculture is needed, one guided by the notion that ecological change in agriculture cannot be promoted
without comparable changes in the social, political, cultural and economic arenas that also conform
agriculture. In other words, change toward a more socially just, economically viable, and environmentally
sound agriculture should be the result of social movements in the rural sector in alliance with urban
organizations. This is especially relevant in the case of the new biorevolution, where concerted action is
needed so that biotechnology companies feel the impact of environmental, farm labor, animal rights and
consumers lobbies, pressuring them to re-orienting their work for the overall benefit of society and nature.

7. Techonological advancement in mass communication and techniques seems be in near

future.?

Answer:Definition
Mass communication is a process in which a person, group of people, or an organization sends a
message through a channel of communication to a large group of anonymous and heterogeneous
people and organizations. You can think of a large group of anonymous and heterogeneous people
as either the general public or a segment of the general public. Channels of communication include
broadcast television, radio, social media, and print. The sender of the message is usually a
professional communicator that often represents an organization. Mass communication is an
expensive process. Unlike interpersonal communication, feedback for mass communication is
usually slow and indirect.

Examples
The following are some types of mass communication:

Advertising, which consists of communications attempting to induce purchasing behavior

Journalism, such as news

Public relations, which is communication intended to influence public opinion on a product or

organization.marketingmass mediatelevision}

A]. Interpersonal Methods

In this method, the extension agent communicates with the people individually,
maintaining separate identity of each person. This method is followed when the
number of people to be contacted are few, are conveniently located close to the
communicator and sufficient time is available for communication. eg. Farm & Home
visit, Farmers call etc
Advantages
1. Helps in selecting demonstrators & local leaders
2. Helps in changing attitudes of people
3. Helps in teaching complex practices.
4. Facilitates transfer of technology
5. Getting feedback information
Limitations
1. This method is time consuming & relatively expensive
2. Has low coverage of audience

3. Extension agent may develop favoritism or bias towards some persons

[B]. Group Methods
It may be defined as an aggregate of small number of people in reciprocal
communication and interaction around some common interest. In this method
extension agent communicates with the people in groups and not as individual
persons. eg. Result demonstration, Method demonstration, group meeting etc.
Objectives
1. It helps for selection of village leaders.
2. It gives the idea for the need of people.
3. Less expensive than individual method due to more coverage
4. More effective than mass method in stimulating action.
Limitations
1. Wide diversity of interest of people may create a difficulty to learning situation
2. Every body wants for their individual development.
[C].Mass Methods
In this method, extension agent communicates with vast & heterogeneous mass of
peoples, without taking into consideration their individual identity. This method is
followed where a large & widely dispersed audience is to be communicated within a
short period of time. The size of audience may be a few hundred in mass meeting,
few thousands in campaign & exhibition and millions in newspaper, radio & TV.
Advantage:
1. Suitable for creating general awareness amongst the people.
2. Helps in transferring knowledge, forming & changing opinion.
3. Large number of people can be communicated within short time
Limitations:1. Less intensive method.
2. Cannot be held frequently
3. Little scope for personal contact with the audience.
4. Little control over the responses of audience.
5. Difficult in getting feedback information & evaluation of results

8. Detailed account on ways of technology transfer?

Answer:- Technology

transfer is the process by which basic science research and

fundamental discoveries are developed into practical and commercially relevant
applications and products. Technology Transfer personnel evaluate and manage
invention portfolios, oversee patent prosecution, negotiate licensing agreements and
periodically review cooperative research agreements already in place. Part of the
technology transfer process involves the prosecution of patents which is overseen by
the national Patent and Trademark Office. Individuals with advanced degrees in the
biomedical sciences are needed to review and process patents in the biotechnology
field.
Technology Transfer Activities include:
processing and evaluating invention disclosures; filing for patents; technology
marketing; licensing; protecting intellectual property arising from research activity;
and assisting in creating new businesses and promoting the success of existing firms.
The result of these activities will be new products, more high-quality jobs, and an
expanded economy.
Users/beneficiaries of Technology Transfer:
technology transfer agents who are responsible for the search, adaptation or
translation, packaging and dissemination, training and ensurement that a new
technology is properly implemented, accepted and used to its full potential by a
target user;
individuals responsible for technology transfer functions;
individuals charged with the responsibility of making decisions as to whether a
technology is considered for implementation within the organization;
individuals charged with budgeting responsibilities which encompass
evaluating the cost of new technology;
individuals charged with strategic and business planning responsibilities within
the organization;
individuals who are being trained to perform any of the above noted functions;

 inventors, vendors, licensors and purchasers of technology.

9. Prons and cons atomic nuceleous?
Answer:-What is Nuclear Energy
Nuclear energy is released through either fission or fusion. Through nuclear fission,
atoms are split to create smaller atoms. The process releases energy that can be
produced into electricity by nuclear power plants. Nuclear fusion is a process of
combining atoms together to create larger atoms which also releases energy. This
energy, however, has not yet been utilized to produce electricity.
The most common source of fuel for nuclear energy is Uranium. Although uranium can
be easily found throughout the world, U-235, the specific type of uranium used by
nuclear plants is relatively rare. U-235 has been designated for nuclear fuel because of
the ease in splitting its atoms.

Advantages of nuclear power generation:

Nuclear power generation does emit relatively low amounts of carbon dioxide (CO 2). The
emissions of green house gases and therefore the contribution of nuclear power plants to global
warming is therefore relatively little.
This technology is readily available, it does not have to be developed first.
It is possible to generate a high amount of electrical energy in one single plant.

Disadvantages of nuclear power generation:

The problem of radioactive waste is still an unsolved one. The waste from nuclear energy is
extremely dangerous and it has to be carefully looked after for several thousand years (10'000 years
according to United States Environmental Protection Agency standards).
High risks: Despite a generally high security standard, accidents can still happen. It is
technically impossible to build a plant with 100% security. A small probability of failure will always
last. The consequences of an accident would be absolutely devastating both for human being as for
the nature (see here , here or here ). The more nuclear power plants (and nuclear waste storage
shelters) are built, the higher is the probability of a disastrous failure somewhere in the world.
Nuclear power plants as well as nuclear waste could be preferred targets for terrorist attacks.
No atomic energy plant in the world could withstand an attack similar to 9/11 in New York. Such a
terrorist act would have catastrophic effects for the whole world.
During the operation of nuclear power plants, radioactive waste is produced, which in turn can
be used for the production of nuclear weapons. In addition, the same know-how used to design
nuclear power plants can to a certain extent be used to build nuclear weapons (nuclear proliferation).
The energy source for nuclear energy is Uranium. Uranium is a scarce resource, its supply is
estimated to last only for the next 30 to 60 years depending on the actual demand.
The time frame needed for formalities, planning and building of a new nuclear power
generation plant is in the range of 20 to 30 years in the western democracies. In other words: It is
an illusion to build new nuclear power plants in a short time.

Sustainability: Is nuclear energy sustainable?

For several reasons, nuclear power is neither green nor sustainable:

Both the nuclear waste as well as retired nuclear plants are a life-threatening legacy for
hundreds of future generations. It flagrantly contradicts with the thoughts ofsustainability if future
generations have to deal with dangerous waste generated from preceding generations. See
also here .
Uranium, the source of energy for nuclear power, is available on earth only in limited
quantities. Uranium is being consumed (i.e. converted) during the operation of the nuclear power
plant so it won't be available any more for future generations. This again contradicts the principle of
sustainability.

Is nuclear power renewable energy?

Nuclear energy uses Uranium as fuel, which is a scarce resource. The supply of Uranium is expected to
last only for the next 30 to 60 years (depending on the actual demand). Therefore nuclear energy
is not a renewable energy.

Conclusion
From the above mentioned pros and cons of nuclear power plants, it should be evident that
nuclear energy cannot be a solution to any problem. Even worse: it is the source of many
further problems.
We must not any longer shut our eyes to the consequences of our being on earth. Besides moral,
ethical and spiritual reasons, at least for the pure will to survive we should consequently strive for a
sustainable living and realize it in our personal life. It's time for change!
10.Society influence scientific development with example?
Answer:-Science is part of almost every aspect of our lives. Although we rarely think about it,

science makes extraordinary things possible. At the flick of a switch, we have light and
electricity. When we are ill, science helps us get better. It tells us about the past, helps us
with the present, and creates ways to improve our future. Scientific endeavor is as much
about us as it is for us. Its place in society, therefore, is not to unfold quietly at the sidelines
but to become a fundamental part of the game. Now more than ever, science must engage
with us, and we must engage with science.

There are times when science can seem to lose its connection to society and its needs, and
sometimes its objectives are not fully understood, even if they are well intended. The lack of
a common language and rapid progress in many areas of research has increased the public's
concern or contributed to ambivalence about the role that science and technology play in
everyday life. But science cannot work in isolation, and advances in science and technology
are not an objective in their own right.
Build gateways with the public: Of course, while new developments can improve our
quality of life and understanding of the world, scientists and policymakers may not always
properly assess the potential risks or take full account of the public's concerns. Opportunities
must be created for scientists and the general public to exchange views in a two-way
dialogue of mutual respect and trust.
Inspire the next era of scientists: With the pace that the world keeps and the speed with
which technology advances, an understanding of science is a crucial part of a rounded
education. Moreover, country needs more scientists and more people skilled in science and
technology in order to compete in the global arena. It is, however, becoming increasingly
difficult to attract young people to science careers.

Modern examples[]
Technology has become a huge part of every day societies life. When societies knows more about
the development in a technology, they become able to take advantage of it. When an innovation
achieves a certain point after it has been presented and promoted, this technology becomes part of
the society.[1]Digital technology has entered each process and activity made by the social system. In
fact, it constructed another worldwide communication system in addition to its origin.[2]
Since the creation of computers achieved an entire better approach to transmit and
store data. Digital technology became commonly used for downloading music, and watching movies
at home either by DVDs or purchasing it online. Digital music records are not quite the same as
traditional recording media. Obviously, because digital ones are reproducible, portable and free.

ECO -13
1.

What is meant by mixed economy? Why did India adopt mixed economy after achieving
independence? (5+15)

Most modern economies feature a synthesis of two or more economic systems.

The public sector works alongside the private sector, but may compete for the
same limited resources. Mixed economic systems do not block the private sector
from profit-seeking, but do monitor profit levels and may nationalize companies
that are deemed to go against the public good.
Mixed economic systems are not laissez-faire systems: the government is
involved in planning the use of resources and can exert control over businesses
in the private sector. Governments may seek to redistribute wealth by taxing the
private sector, and using funds from taxes to promote social objectives.
While capitalism allows prices to be set by supply and demand forces and
socialism fixes prices through central planning, mixed economic systems allow for
prices in some sectors to fluctuate, while fixing other prices, such as energy

Mixed Economy
A mixed economy is an economic system that incorporates aspects of more than one economic system.
This usually means an economy that contains both privately-owned and state-owned enterprises or that
combines elements of capitalism and socialism, or a mix of market economy and planned economy
characteristics. This system overcomes the disadvantages of both the market and planned economic
systems.

Features

Resources are owned both by the government as well as private individuals. i.e. co-existence of
both public sector and private sector.

Market forces prevail but are closely monitored by the government.

Advantages

Producers and consumer have sovereignty to choose what to produce and what to consume

but production and consumption of harmful goods and services may be stopped by the government.
Social cost of business activities may be reduced by carrying out cost-benefit analysis by the

government.
As compared to Market economy, a mixed economy may have less income inequality due to

the role played by the government.

Monopolies may be existing but under close supervision of the government.

India accepted the policy of mixed economy after independence. In

1948, India declared itself a mixed economy for the very first time

through theIndustrial Policy Statement & it was later confirmed by

the Industrial Policy Statements of the years 1956, 1977 & others.

The Industrial Policy Resolution of 1948 categorized the Indian

industries mainly into four classes: Exclusively government policy;
Government controlled sphere;
Industries subject to state regulation & control; &
The rest industrial field was left for the private sector.
It is clear from the following arguments that our economy is a mixed
economy.
(i) Coexistence of Public and Private Sectors:
The coexistence of large public sector with big private sector has
transformed the economy into a mixed one. Industrial policies of 1948
and 1956 formulated by the Indian government have made the
provision of such coexistence. Some basic and heavy industries are
being run under the public sector. However, with the liberalisation of
Indian economy, the scope of private sector has further enhanced.
(ii) Planned Development:
India had a poor industrial base at the time of Independence. A long
period of economic stagnation under British rule had weakened the
Indian Economy. Hence 5-year plans have been adjusted along with
the Directive Principles of State Policy to rebuild the rural economy
and lay foundations of industrial and scientific progress.
(iii) Plan Objectives:
In 1951, Five Year Plan was started in India and we are going with the
eleventh Five Year Plan.
The basic objectives of these plans are summarized as:
(a) Economic growth;

(b) Modernisation;
(c) Self-reliance;
(d) Social justice;
(e) Elimination of Poverty;
(f) Creation of conditions of near full employment; and
(g) Satisfaction of basic needs like food, clothing, shelter, education
health etc.
(iv) Role of Public Sector:
It has played an important role in the development of Indian economy.
It increased the pace of economic growth and reduced disparities of
income and wealth.
It seriously acts in the following areas, like:
(a) Development of infrastructure;
(b) Establishment of basic and heavy industries;
(c) Dispersing industries in several backward regions; and
(d) Imperative role in trading and marketing activities, including
international trade.
(v) Private Sector:
It includes not only organised industry, but agriculture, small
industry, trade and great deal of activity in housing and construction.
Private sector provides employment to three-fourths of| our
manpower. To control the private industrial units. Industries
Development and Regulation! Act and Monopolies and Restrictive
Trade Practices Act are already set up in India.
(vi) Combination between Public and Private Sector:
The second Five Year Plan and pointed out that both the sectors have
to function jointly. In fact a high level of public investment it
infrastructures and key industries is a1 precondition for development
in the private sector.

Giving examples, distinguish between direct and indirect roles of the government in business.
Explain the objectives of the Industries (Development and Regulation) Act, 1951. (10+10)
2.

Why government controls

business activities?

Businesses are usually profit motivated. Many times in order to gain more profit the business
might neglect issues like environmental protection and production of harmful and dangerous products.

Large business might take the advantage of their size and exploit consumers, employees and
even use unfair tactics to overcome competition from small businesses.

Business might use media to portray a wrong image of their product or may even mislead
customers to buy products.

How government controls

business activity?
Governments control the business activities is many ways both direct and indirect. We have already
covered governments economic policies. However, government can control business activities in a more
direct way. These are as follows:

Controlling what to produce

In order to safeguard the interest of the community government may ban or limit the production of certain
goods and services. For example, selling of guns, explosive and dangerous drugs are illegal in many
countries. Moreover, Goods which harm the environment are also totally banned or strictly controlled in
many countries, e.g. aerosol cans that use CFCs which has been banned because of their damaging
effect on the ozone layer.

Employees Protection legislations

Government may pass laws to protect the interest of employees such as
Laws against unfair discrimination at work and when applying for jobs. There is no unfair discrimination on
the basis of Race, religion, sex, age, or colour.

Legislations for health and Safety at

work:

To protect workers from dangerous machinery.

Workers should be provided with proper safety equipments and clothing.

A reasonable workforce temperature is maintained for workers.

Proper hygienic conditions and washing facilities are provided.

Workers get adequate breaks between shifts.

Protect employees against unfair

dismissal
Business can not dismiss the workers because they have joined a trade union or for being pregnant.
There should be proper warning before dismissing a worker otherwise it will be treated as unfair
dismissal.

Ensure fair wages for the employees

In many countries, government makes it mandatory to have a written contract of employment. It contains
the details of the wage rate; working hours, deductions (if any) and other necessary details regarding
working conditions. Minimum wages paid to different types of workers are also determined by the
government.

Consumer Protection legislations

Most of the countries have consumer protection laws aimed at making sure that businesses act fairly
towards their consumers: A few examples are
Weight and Measures Act: goods sold should not be underweight. Standard weighting equipments
should be used to measure goods.
Trade Description Act: deliberately giving misleading impression about the product is illegal.
Consumer Credit Act: According to this act consumers should be given a copy of the credit agreement
and should be aware of the interest rates, length of loan while taking a loan.
Sale of Goods Act: It is illegal to sell products with serious flaws or problems and goods sold should
conform to the description provided.

Environment protection
In the recent years government across the globe have passes legislations to control business activities
from harming the environment. This includes setting limits to the pollution, making it mandatory for
businesses to treat their wastes etc.

Location decisions
Government often influences location of business through

Planning controls involve restricting the business activities that can be undertaken in certain
areas.

Provide regional assistance to businesses which involves encouraging them to locate in

underdeveloped regions of the country.

IDRA , 1951
Growth of the industrial sector at a higher rate and on a sustained basis is a major determinant of a
country's overall economic development. In this regard, the Government of India has issued industrial
policies, from time to time, to facilitate and foster the growth of Indian industry and maintain its
productivity and competitiveness in the world market.
In order to provide the Central Government with the means to implement its industrial policies, several
legislations have been enacted and amended in response to the changing environment. The most important
being the Industries (Development and Regulation) Act, 1951 (IDRA) which was enacted in
pursuance of the Industrial Policy Resolution, 1948. The Act was formulated for the purpose of development
and regulation of industries in India by the Central Government.
The main objectives of the Act is to empower the Government:- (i) to take necessary steps for the
development of industries; (ii) to regulate the pattern and direction of industrial development; (iii) to
control the activities, performance and results of industrial undertakings in the public interest. The Act
applies to the 'Scheduled Industries' listed in the First Schedule of the Act. However, small scale industrial
undertakings and ancillary units are exempted from the provisions of this Act.
The Act is administered by the Ministry of Industries & Commerce through its Department of Industrial
Policy & Promotion (DIPP). The DIPP is responsible for formulation and implementation of promotional
and developmental measures for growth of the industrial sector. It monitors the industrial growth and
production, in general, and selected industrial sectors, such as cement, paper and pulp, leather, tyre and
rubber, light electrical industries, consumer goods, consumer durables, light machine tools, light industrial
machinery, light engineering industries etc., in particular. It is also responsible for facilitating and increasing
the foreign direct investment (FDI) inflow into the country as well as for encouraging acquisition of
technological capability in various sectors of the industry.
The various provisions of the Act are:

Establishment of a 'Central Advisory Council' for the purpose of advising the Central Government
on matters concerning the development of the industries, making of any rules and any other
matter connected with the administration of the Act. Its members shall consist of representatives
of the owners of industrial undertaking, employees, consumers, primary suppliers, etc.

Establishment of a 'Development Council' for the purpose of development of any scheduled

industry or group of scheduled industries. This council shall consist of the members representing
the interests of the owners, employees, consumers, etc. and persons having special knowledge of
matters relating to the technical or other aspects of the industries.

The development council shall perform the following functions assigned to it by the Central
Government:- (i) recommending targets for production, co-ordinating production programmes and
reviewing progress from time to time. (ii) suggesting norms of efficiency with a view to eliminating
waste, obtaining maximum production, improving quality and reducing costs. (iii) recommending
measures for securing the fuller utilisation of the installed capacity and for improving the working
of the industry, particularly of the less efficient units. (iv) promoting arrangements for better
marketing and helping in the devising of a system of distribution and sale of the produce of the

industry which would be satisfactory to the consumer. (v) promoting the training of persons
engaged or proposing engagement in the industry and their education in technical or artistic
subjects relevant thereto, etc.

The development council shall prepare and transmit to the Central Government and the advisory
council a report (annually) setting out what has been done in the discharge of its functions during
the financial year last completed. The report shall include a statement of the accounts of the
development council for that year, together with a copy of any report made by the auditors on the
accounts.

The IDRA empowers the Central Government to regulate the development of industries by means
of licensing with suitable exemptions as decided by the Government. Accordingly, the entry into a
business or the expansion of an existing business may be regulated by licensing. A licence is a
written permission from the Government to an industrial undertaking to manufacture specified
articles included in the Schedule to the Act. It contains particulars of the industrial undertaking, its
location, the articles to be manufactured, its capacity on the basis of the maximum utilisation of
plant and machinery, and other appropriate conditions which are enforceable under the Act.

If an application for licence is approved and further clearance ( such as that of foreign collaboration
and capital goods import) are not involved and no other prior conditions have to be fulfilled, an
industrial licence is issued to the applicant. In other cases, a letter of intent is issued, which
conveys the intention of the Government to grant a licence subject to the fulfilment of certain
conditions such as approval of foreign investment proposal, import of capital goods, etc.

The Government may order for investigation before the grant of licence to an industrial
undertaking. It can make a full and complete investigation if it is of the opinion that in the respect
of any schedule industry or undertaking, there has been or is likely to be:- (i) a substantial fall in
the volume of output; or (ii) a marked deterioration in the quality of output or an unjustifiable rise
in the price of the output. Also, if it is of the opinion that any industrial undertaking is being
managed in a manner highly detrimental to the scheduled industry concerned or to the public
interest, it orders investigation.

As a result of such investigations, the Government is empowered to issue directions to the

industrial undertaking for all or any of the following purposes:

Regulating the production of output by the industrial undertaking and fixing the standards
of production;

Requiring the industrial undertaking to take such steps as the Central Government may
consider necessary to stimulate the development of the industry to which the undertaking
relate.

Prohibiting the industrial undertaking from resorting to any act or practice which might
reduce its production, capacity or economic value;

Controlling the prices, or regulating the distribution, of an output for securing its equitable
distribution and availability at fair prices.

The Act also provides that any such directions may be issued by the Central Government
at any time when a case relating to any industrial undertaking is under investigation.
These directions shall have effect until they are varied or revoked by the Central
Government.

The power of control entrusted to the Central Government under the Act extends to that of the
take over of the management of the whole or any part of an industrial undertaking which fails to
comply with any of the directions mentioned above. The Government can also take over the
management of an undertaking which is being managed in a manner highly detrimental to the
scheduled industry concerned or to the public interest. Further, the Central government can take
over the management of industrial undertaking owned by a company under liquidation, with the
permission of the High Court, if the Government is of the opinion that the running or restarting the
operations of such an undertaking is necessary for the maintaining or increasing the production,
supply or distribution in the public interest.

Until liberalisation, the industrial licence was required for the establishment of a new industrial undertaking,
manufacturing of a new item by an existing undertaking, change of location of an industry, substantial
expansion of existing capacity and for all other purposes. But the new industrial policy s liberalised this and
exempted many industries from obtaining industrial licence. In today's scenario, only 6 categories of
industries require industrial licensing under the Industries (Development and Regulation) Act, 1951
(IDRA). Such industries file an Industrial Entrepreneur Memoranda (IEM) with the Secretariat of
Industrial Assistance (SIA),Department of Industrial Policy and Promotion to obtain an acknowledgement.

3.

What do you mean by industrial sickness? Describe its indicators

Answer:- As industrial sickness is an umbrella term applied to various things associated with industry
that make people ill and cause them to miss work.
The solutions will have to be tailored to the specific industry, and only in that way can any real effect be
made on improving the health and productivity of the industrial workforce.
The key is an aggresive work-up on the health issues for a given segment of the industrial workforce, and
usually broken down by type of work (which makes sense). Even as coal miners face overpowering
respiratory threats, and foundry and mill workers have to confront major physical threats from large
(heavy) quantities of extremely hot materials, each facet of industrial production has its hot-button health
issues. The industrial health managers need training and experience identifying and remediating
conditions that present major health threats to their respective workforces. Then they can train the rest of
management and can teach the workers themselves about the best way to carry out their jobs with
minimum threats to their health

factors responsible for industrial sickness are:Not keeping reserve funds to meet eventuality.
Not up dating the quality.
Not diversifying.
Not properly anaysing the market trend.
Keeping junk ,not usable materials.
Keeping huge stock of raw materials.
Not submitting statements, balance sheet to Bank, but rushing
to them on the eleventh hour for funds etc etc.
Industrial sickness is defined in India as "an industrial company (being a company registered for not less
than five years) which has, at the end of any financial year, accumulated losses equal to, or exceeding, its
entire net worth and has also suffered cash losses in such financial year and the financial year
immediately preceding such financial year

Indicaters?
it is necessary to identify financial indicators and a model for corporate sickness
prediction. In this paper, a model has been proposed to predict business sickness by
using seven financial ratios. The model has been developed by using cluster analysis
and step-wise logistic regression analysis. From the empirical study, it is revealed that
Rate of Growth of Profit After tax (RGPA) and DebtEquity Ratio (DE) are important
predictors of sick companies. It means that earning power and capital structure are the
important predictors of corporate distress.
INTRODUCTION
The recent global financial crisis has already caused a considerable slowdown in
economic activities in most of the developed countries. This economic slow down in
developed countries may also have significant impact on the economy of developing
countries. As a result, business firms throughout the globe are facing so many
challenges and unexpected changes in the economic, technological and social
environment. If they fail to cope up with the changes, they will be forced into bankruptcy.
They become a financially sick companies when these firms are not able to pay their
obligation in time due to shortage of cash flows.

In the year 2009, 64 companies were registered as sick unit in Board for Industrial and
Financial Reconstruction (BIFR). Such sickness can be attributed to the both internal as
well as external factors. Some of the external factors are shortage of raw materials,
power, and change in the government policy. Some of the internal factors are obsolesce
of technology and machinery, inefficiency of management which is reflected in the
financial statements. Therefore, it is important to understand the reasons behind
sickness of a company. In this study we want to predict corporate failure based on
information provided by the financial statements.
Financial statement is the primary reporting statement which provides information to the
decision makers. Those decision makers are investors, lenders, bank, shareholders and
other interested parties. Ratio analysis is an important tool of financial statement
analysis. It provides information to the stakeholder of business. Ratio analysis
concentrates interrelationship among figures appearing in the financial statement. The
ratio analysis helps management to analyze the past performance of the firm and to
make future projection of the firm. In this paper some selected ratios have been used as
indicators on the financial status of the companies. The purpose of this study is:
a. To identify the most important ratios that explain the corporate success or failure; and
b. To develop a model for prediction of business failure or success.
With these in the backdrop, the present presentation has been divided into six sections,
Section two focuses on literature review. Choice of independent variables has been
highlighted in the section three. Section four covers methodology for the study. Analysis
of the data is presented in Section five. The last Section covers conclusion, limitation
and future direction of the study.
LITERATURE REVIEW
A number of studies have been undertaken to predict corporate failure or success. In
this section an attempt has been made to review a few related empirical studies.
Earlier it was observed that corporate success of failure can be predicted on the basis
of trends of the ratios. In this context, the works of Beaver (1966) is notable. He
developed a dichotomous classification test based on simple t-test in a univariate
framework. He conducted this study on 79 failed and 79 non-failed firms for the period
1954-64- He conducted the study by comparing the mean ratios of the failed firms and

non-failed firms. He concluded that there is a difference in the mean ratios of the failed
and non-failed firms.

4 . Distinguish between the following:

(a) Heavy industries and small scale industries

(b) Foreign direct investment and foreign portfolio investment

Answer:-A.)

DEFINITION OF 'HEAVY INDUSTRY'

Relates to a type of business that typically carries a high capital cost (capitalintensive), high barriers to entry and low transportability. The term "heavy" refers
to the fact that the items produced by "heavy industry" used to be products such
as iron, coal, oil, ships, etc. Today the reference also refers industries that cause
disruption to the environment in the form of pollution, deforestation, etc.
Industries that are typically considered heavy include:
1. Chemicals and plastics
2. Steel and oil refining, production
3. Mining
4. Industrial machinery
5. Mass transit (railways, airlines, shipbuilders)
Another trait of heavy industry is that it most often sells its goods to other
industrial customers, rather than to the end consumer. Heavy industries tend to
be a part of the supply chain of other products. As a result, their stocks will often
rally at the beginning of an economic upturn and are often the first to benefit from
an increase in demand.
Heavy industries

Industries which use heavy and bulky raw-materials and produce

products of the same category are called heavy industries. Iron and
steel industry presents a good example of heavy industries.
Characteristics :

Large-scale industries.

Big plants covering large areas of land.

Capital intensive, big investment needed to set them up.

Make large products often bought by other manufacturing companies.

Examples: steel, oil-refining, chemicals, engineering and ship building.

Light industry is industry that is usually less capital intensive than heavy industry, and is
more consumer-oriented than business-oriented (i.e., most light industry products are produced
for end users rather than as intermediates for use by other industries). Light industry facilities
typically have less environmental impact than those associated with heavy industry, and zoning laws
are more likely to permit light industry near residential areas. It is the production of small consumer
goods.
One economic definition states that light industry is a "manufacturing activity that uses moderate
amounts of partially processed materials to produce items of relatively high value per unit weight".
Examples of light industries include the manufacturing of clothes, shoes, furniture, consumer
electronics and home appliances. Conversely, industries such as ship building would fall
under heavy industry.
Light (consumer) industries

Characteristics :
Make small products, mainly to be bought by individuals.

Most are small-scale, suitable for factory units on industrial estates.

Only a limited amounts of investment capital is needed.

Examples: electrical goods, clothing, food-processing and toys

(b) Foreign direct investment and foreign portfolio investment

Answer:-FDI-

Foreign Direct Investment refers to international

investment in which the investor obtains a lasting interest in an
enterprise in another country.
Most concretely, it may take the form of buying or constructing a
factory in a foreign country or adding improvements to such a facility,
in the form of property, plants, or equipment.
FDI is calculated to include all kinds of capital contributions, such as
the purchases of stocks, as well as the reinvestment of earnings by a
wholly owned company incorporated abroad (subsidiary), and the

lending of funds to a foreign subsidiary or branch. The reinvestment of

earnings and transfer of assets between a parent company and its
subsidiary often constitutes a significant part of FDI calculations.
FDI is more difficult to pull out or sell off. Consequently, direct
investors may be more committed to managing their international
investments, and less likely to pull out at the first sign of trouble.
On the other hand, FPI (Foreign Portfolio Investment) represents
passive holdings of securities such as foreign stocks, bonds, or other
financial assets, none of which entails active management or control of
the securities' issuer by the investor.
Unlike FDI, it is very easy to sell off the securities and pull out the
foreign portfolio investment. Hence, FPI can be much more volatile
than FDI. For a country on the rise, FPI can bring about rapid
development, helping an emerging economy move quickly to take
advantage of economic opportunity, creating many new jobs and
significant wealth. However, when a country's economic situation takes
a downturn, sometimes just by failing to meet the expectations of
international investors, the large flow of money into a country can turn
into a stampede away from it.

Comparison chart
FDI
Management Projects are efficiently managed
Involved in management and
Involvement ownership control; long-term
direct or
interest
indirect
Sell off

FPI
Projects are less efficiently managed
No active involvement in management.
Investment instruments that are more easily
traded, less permanent and do not represent a
controlling stake in an enterprise.

It is more difficult to sell off or

pull out.

It is fairly easy to sell securities and pull out

because they are liquid.

Tends to be undertaken by
Multinational organisations

Comes from more diverse sources e.g.a small

company's pension fund or through mutual
funds held by individuals; investment via
equity instruments (stocks) or debt (bonds) of
a foreign enterprise.

Comes from

What is Involves the transfer of noninvested financial assets e.g.technology

Only investment of financial assets.

FDI

FPI

and intellectual capital, in

addition to financial assets.
Stands for Foreign Direct Investment
Volatility Having smaller in net inflows

Foreign Portfolio Investment

Having larger net inflows

Example of FPI: John Yamashita, a Japanese citizen, purchases one hundred shares of stock in General
Motors (GM). John now owns part of a U.S. corporation, the shares of which are part of his personal
investment portfolio. John is eligible to receive dividend payments from GM, participate in shareholder
decisions, or sell the stock for a profit/loss. Johns share of GM is very minor, and his chief concern is
not the long-term profitability of the company but the short-term value of his stock. He might
therefore sell his share quickly if the share price goes up or down significantly.
Example of FDI: Hungry Dragon Toys, a Chinese company, is sitting on a lot of cash. The companys
board of directors decides to take some of that money and purchase Cooperative Chemical, a plastics
company in New Jersey. Hungry Dragon, a foreign investor, now owns a U.S. subsidiary company. Unlike
John Yamashitas small investment in GM, Hungry Dragons ownership of Cooperative Chemical is
substantial and more likely to be long term. Hungry Dragon is unlikely to sell if the U.S. economy faces
a temporary downturn. A comparison of FPI and FDI is useful to illustrate why some kinds of foreign
investment tend to be more volatile than others.
5.Write short notes on the following:

1.) Collective bargaining :"Collective bargaining agreement means an agreement in writing or writings between
an employer and a trade union setting forth the terms and conditions of employment or
containing provisions in regard to rates of pay, hours of work or other working conditions
of employees."
Collective bargaining is a process of negotiation between employers and a group of
employees aimed at reaching agreements to regulate working conditions. The interests
of the employees are commonly presented by representatives of a trade union to which
the employees belong. The collective agreements reached by these negotiations
usually set out wage scales, working hours, training, health and
safety ,overtime, grievance mechanisms, and rights to participate in workplace or
company affairs.
A collective bargaining agreement is the ultimate goal of the collective bargaining process. Typically, the a
greement establishes wages,hours, promotions, benefits, and other employment terms as well as proced
ures for handling disputes arising under it. Because the collectivebargaining agreement cannot address e
very workplace issue that might arise in the future, unwritten customs and past practices, externallaw, and
informal agreements are as important to the collective bargaining agreement as the written instrument its
elf.

Collective bargaining allows workers and employers to reach voluntary agreement on a wide range of topi
cs. Even so, it is limited to someextent by federal and state laws. A collective bargaining agreement cann
ot accomplish by contract what the law prohibits. For example, aunion and an employer cannot use collec
tive bargaining to deprive employees of rights they would otherwise enjoy under laws such as theCivil
Rights . Collective bargaining alsocannot be used to waive rights or obligations that laws impose on eithe
r party. For example, an employer may not use collective bargaining toreduce the level of safety standard
s it must follow under the OCCUPATIONAL SAFETY AND HEALTH ACT Furthermore,
thecollective bargaining agreement is not purely voluntary. One party's failure to reach agreement entitles
the other to resort to certain legaltactics, such as strikes and lockouts, to apply economic pressure and for
ce agreement. Moreover, unlike commercial contracts governed bystate law, the collective bargaining agr
eement is governed almost exclusively by federal Labor
Law, which determines the issues thatrequire collective bargaining, the timing and method of bargaining,
and the consequences of a failure to bargain properly or to adhere to acollective bargaining agreement.

Law of Collective Bargaining

The law of collective bargaining encompasses four basic points:

The employer may not refuse to bargain over certain subjects with the employees' representative,
provided that the employees'representative has majority support in the bargaining unit.

Those certain subjects, called mandatory subjects of bargaining, include wages, hours, and other
terms and conditions of employment.

The employer and the union are not required to reach agreement but must bargain in Good
Faith over mandatory subjects of bargaininguntil they reach an impasse.

While a valid collective bargaining agreement is in effect, and while the parties are bargaining but
have not yet reached an impasse, theemployer may not unilaterally change a term of employment that is
a mandatory subject of bargaining. But once the parties have reachedan impasse, the employer may unil
aterally implement its proposed changes, provided that it had previously offered the changes to theunion f
or consideration.

b) Balance of payments :-A systematic record of a nation's total payments to

foreign countries, including the price of imports and the outflow of capital and gold,
along with the total receipts from abroad, including the price of exports and the inflow of
capital and gold.
The balance of payments, also known as balance of
international payments, encompasses all transactions between a country's residents
and its nonresidents involving goods, services and income; financial claims on and
liabilities to the rest of the world; and transfers such as gifts.

Classification and Standard Components of BoP

A complete BoP account comprises the following two broad accounts: (a) Current
Account; and (b) Capital and Financial Account.
(a) Current Account
The current account measures flow of real resources including exports and imports of goods
and services, income receivable and payable abroad, and current transfers from and to abroad.
Goods, Services and Income
The standard components covering goods, services, and income are to reflect the provision and
acquisition of real resources by an economy to and from other economies. Flows recorded as
credit measure the economy's domestic output (exports of goods and services) provided to
other economies, as well as receipt of factor incomes arising from its factors of production
(compensation of employees and investment income) used in the productive process in other
economies. Conversely, flows recorded as debit measure the acquisition of output of other
economies (imports of goods and services) and payment of factor incomes to other economies
for the use of the latter's factors of production.
Current Transfers
Current transfers are those transactions in which an economy provides real and financial
resources that are immediately or shortly consumed by other economies without receiving
equivalent values in return. Examples are workers remittances sent or received by residents to
or from non-residents, and donations or gifts given or received by the government to or from
other government or non-residents.
Credit entries reflect offsetting entries to the receipts of such real or financial resources from
other economies. Conversely, debit entries recorded are offsets to the provision of such real
and financial resources to other economies.
A cash transfer is classified as current transfer except when it is linked to the acquisition or
disposal of a fixed asset. For example, if a Hong Kong migrant disposes a real property in
Hong Kong at the time of emigration and takes the cash so arising to the new economy he
migrates, such cash will be classified as migrant transfers under capital transfers which will be
described later under Capital and Financial Account.
Current transfers, and transactions in real resources, have a direct and immediate effect on an
economy's pattern of consumption in any specified period.
(b) Capital and Financial Account

Capital Account
The capital account measures external transactions in capital transfers (mainly debt
forgiveness and migrant transfers) and non-produced / non-financial assets (such as patents
and copyrights).
A capital transfer is a transfer of ownership of a fixed asset or forgiveness of a liability. For
example, Economy A extends a loan to Economy B in a given period, and later on agrees to
write off ('forgive') the loan. The forgiveness of such a loan is recorded under capital transfers.
Financial Account
The financial account shows how an economy's external transactions are financed.
Transactions in this account are classified into direct investment, portfolio investment,
financial derivatives, other investment and reserve assets.
(i) Direct Investment
Direct investment refers to external investment in which an investor of an economy acquires a
lasting interest and a degree of influence or control over the management of an enterprise
located in another economy.
External investment in real estate, as specified in BPM, is also a form of direct investment. If a
Hong Kong resident owns real estate outside the economic territory of Hong Kong, he should
be regarded as owning a nominal company in the economy in question which in turn owns the
real estate. The relationship between such nominal company and legal owner of the land and
structures is then treated as a direct investment relationship.
(ii) Portfolio Investment
Portfolio investment refers to investment in non-resident equities (i.e. stocks and shares) and
debt securities (e.g. bonds, notes, negotiable certificates of deposits). Compared with direct
investors, portfolio investors in equity and debt securities of non-resident enterprises have no
lasting interest or influence in the management of the companies they invest. A holding of less
than 10% equity in an enterprise is regarded as portfolio investment.
(iii) Financial Derivatives
Financial derivatives are financial instruments that are linked to a specific financial instrument
or indicator or commodity, and through which specific financial risks can be traded in financial
markets in their own right (e.g. options, warrants).
(iv) Other Investment
Other investment refers to other financial claims on and liabilities to non-residents that are not

classified as direct investment, portfolio investment, financial derivatives, or reserve assets.

Examples of these financial claims and liabilities include short-term and long-term nonmarketable loans, deposits, financial leases and trade credits.
(v) Reserve Assets
Reserve assets consist of external assets that are readily available to and controlled by
monetary authorities of an economy (in the case of Hong Kong, the Hong Kong Monetary
Authority) for directly financing payment imbalances and for indirectly regulating the
magnitude of such imbalances through intervention in the exchange markets to affect the
currency exchange rate of that economy.

Main Uses of BoP Statistics

BoP data are important for monetary and financial monitoring and policy deliberations in both
territorial and international contexts. Such data are useful for analytical studies on income
growth, external orientation of the economy, relationships between trade in goods and services
and direct investment flows, links between the exchange rate and the Current and Financial
accounts, international banking transactions, assets securitisation and financial market
developments, external debt situation, and so on. Some examples are given below :-

a)

Data on current transfers, when combined with Gross National Product (GNP), will
enable the compilation of gross national disposable income for Hong Kong, which should
be a very useful measure of aggregate income for analysing changes in consumption and
savings.

b)

Data on external investment flows (direct investment, portfolio investment, financial

derivatives and other investment) will provide a macroeconomic database to support
economic analysis on many important issues like economic growth, productivity change,
industrial efficiency and financial structures.

c)

A complete BoP account will help discern the various forces in the foreign exchange
market affecting the external exchange value of the Hong Kong dollar, and the supply of
foreign exchange in Hong Kong's financial system. Such information will be useful for
analysing money supply and demand using econometric techniques, and for analysing
aggregate domestic demand and inflation from the monetary side.

Course Title : Export Procedures and

Documentation
1. What is the Significance of International Trade? Discuss the factors that
motivate a firm to export. (12+8)

1.

Answer:-International trade is the exchange of goods and services between

countries. This type of trade gives rise to a world economy, in which prices, or supply
and demand, affect and are affected by global events.
The exchange of goods or services along international borders. This type
of trade allows for a greater competition and more competitive pricing in
the market. The competition results in more affordable products for the
consumer. The exchange of goods also affects the economy of the world as
dictated by supply and demand, making goods and services obtainable which
may not otherwise be available to consumers globally.

Salient Features of International Trade:

The following are the distinguishing features of
international trade:
(1) Immobility of Factors:
The degree of immobility of factors like labour and capital is generally
greater between countries than within a country. Immigration laws,
citizenship, qualifications, etc. often restrict the international mobility
of labour.
International capital flows are prohibited or severely limited by
different governments. Consequently, the economic significance of
such mobility of factors tends to equality within but not between
countries. For instance, wages may be equal in Mumbai and Pune but
not in Bombay and London.
According to Harrod, it thus follows that domestic trade consists
largely of exchange of goods between producers who enjoy similar

standards of life, whereas international trade consists of exchange of

goods between producers enjoying widely differing standards.
Evidently, the principles which determine the course and nature of
internal and international trade are bound to be different in some
respects at least.
In this context, it may be pointed out that the price of a commodity in
the country where it is produced tends to equal its cost of production.
The reason is that if in an industry the price is higher than its cost,
resources will flow into it from other industries, output will increase
and the price will fall until it is equal to the cost of production.
Conversely, resources will flow out of the industry, output will decline,
the price will go up and ultimately equal the cost of production.
But, as among different countries, resources are comparatively
immobile; hence, there is no automatic influence equalising price and
costs. Therefore, there may be permanent difference between the cost
of production of a commodity.
In one country and the price obtained in a different country for it. For
instance, the price of tea in India must, in the long run, be equal to its
cost of production in India. But in the U.K., the price of Indian tea may
be permanently higher than its cost of production in India. In this way,
international trade differs from home trade.
(2) Heterogeneous Markets:
In the international economy, world markets lack homogeneity on
account of differences in climate, language, preferences, habit,

customs, weights and measures, etc. The behaviour of international

buyers in each case would, therefore, be different.
(3) Different National Groups:
International trade takes place between differently cohered groups.
The socio-economic environment differs greatly among different
nations.
(4) Different Political Units:
International trade is a phenomenon which occurs amongst different
political units.
(5) Different National Policies and Government
Intervention:
Economic and political policies differ from one country to another.
Policies pertaining to trade, commerce, export and import, taxation,
etc., also differ widely among countries though they are more or less
uniform within the country. Tariff policy, import quota system,
subsidies and other controls adopted by governments interfere with
the course of normal trade between one country and another.
(6) Different Currencies:
Another notable feature of international trade is that it involves the
use of different types of currencies. So, each country has its own policy
in regard to exchange rates and foreign exchange

The Importance of International

Trade

The buying and selling of goods and services across national

borders is known as international trade. International trade is the
backbone of our modern, commercial world, as producers in various nations
try to profit from an expanded market, rather than be limited to selling within
their own borders. There are many reasons that trade across national
borders occurs, including lower production costs in one region versus
another, specialized industries, lack or surplus of natural resources and
consumer tastes.
One of the most controversial components of international trade
today is the lower production costs of "developing" nations. There is
currently a great deal of concern over jobs being taken away from the United
States, member countries of the European Union and other "developed"
nations as countries such as China, Korea, India, Indonesia and others
produce goods and services at much lower costs. Both the United States and
the European Union have imposed severe restrictions on imports from Asian
nations to try to stem this tide. Clearly, a company that can pay its workers
the equivalent of dollars a day, as compared to dollars an hour, has a distinct
selling advantage. Nevertheless, American and European consumers are
only too happy to lower their costs of living by taking advantage of cheaper,
imported goods.
Even though many consumers prefer to buy less expensive goods,
some international trade is fostered by a specialized industry that
has developed due to national talent and/or tradition. Swiss watches,
for example, will never be price-competitive with mass produced watches
from Asia. Regardless, there is a strong market among certain consumer
groups for the quality, endurance and even "snob appeal" that owning a
Rolex, Patek-Philippe or Audemars Piguet offers. German cutlery, English
bone China, Scottish wool, fine French silks such as Hermes and other such
products always find their way onto the international trade scene because
consumers in many parts of the world are willing to foster the importation of
these goods to satisfy their concept that certain countries are the best at
making certain goods.
One of the biggest components of international trade, both in terms
of volume and value of goods is oil. Total net oil imports in 2005 are
over 26 million barrels per day (U.S. Energy Information Administration

figures) (Note: Imports include crude oil, natural gas liquids, and refined
products.) At a recent average of $50 per barrel, that translates to $1billion,
three hundred million, PER DAY. The natural resources of a handful of nations,
most notably the nations of OPEC, the Organization of Petroleum Exporting
Countries, are swept onto the international trade scene in staggering
numbers each day, and consumer nations continue to absorb this flow. Other
natural resources contribute to the movement of international trade, but
none to the extent of the oil trade. Diamonds from Africa, both for industrial
and jewelry use, wheat and other agricultural products from the United
States and Australia, coal and steel from Canada and Russia, all flow across
borders from these nations that have the natural resources to the nations
that lack them.
Despite complaints about trade imbalances, effects on domestic economies,
currency upheavals, and loss of jobs, the reality of goods and services
continually crossing borders will not go away. International trade will
continue to be the engine that runs most nations.

Disadvantages of International Trade:

When a country places undue reliance on foreign trade,
there is a likelihood of the following disadvantages:
1. Exhaustion of Resources:
When a country has larger and continuous exports, her essential raw
materials and minerals may get exhausted, unless new resources are
tapped or developed (e.g., the near-exhausting oil resources of the oilproducing countries).
2. Blow to Infant Industry:
Foreign competition may adversely affect new and developing infant
industries at home.
3. Dumping:
Dumping tactics resorted to by advanced countries may harm the
development of poor countries.

4. Diversification of Savings:
A high propensity to import may cause reduction in the domestic
savings of a country. This may adversely affect her rate of capital
formation and the process of growth.
5. Declining Domestic Employment:
Under foreign trade, when a country tends to specialize in a few
products, job opportunities available to people are curtailed.
6. Over Interdependence:
Foreign trade discourages self-sufficiency and self-reliance in an
economy. When countries tend to be interdependent, their economic
independence is jeopardised. For instance, for these reasons, there is
no free trade in the world. Each country puts some restrictions on its
foreign trade under its commercial and political policies.
Most influential factors affecting Foreign Trade are as
follows:
Because international trade can significantly affect a countrys
economy, it is important to identify and monitor the factors that
influence it.
1) Impact of Inflation:
If a countrys inflation rate increases relative to the countries with
which it trades, its current account will be expected to decrease, other
things being equal. Consumers and corporations in that country will
most likely purchases more goods overseas (due to high local
inflations), while the countrys exports to other countries will decline.
2) Impact of National Income:

If a countrys income level (national income) increases by a higher

percentage than those of other countries, its current account is
expected to decrease, other things being equal. As the real income
level (adjusted for inflation) rises, so does consumption of goods. A
percentage of that increase in consumption will most likely reflect an
increased demand for foreign goods.
3) Impact of Government Policies:
A countrys government can have a major effect on its balance of trade
due to its policies on subsidizing exporters, restrictions on imports, or
lack of enforcement on piracy.
4) Subsidies for Exporters:
Some governments offer subsidies to their domestic firms, so that
those firms can produce products at a lower cost than their global
competitors. Thus, the demand for the exports produced by those
firms is higher as a result of subsidies.
Many firms in China commonly receive free loans or free land from
the government. These firms incur a lower cost of operations and are
able to price their products lower as a result, which enables them to
capture a larger share of the global market.
5) Restrictions on Imports:
If a countrys government imposes a tax on imported goods (often
referred to as a tariff), the prices of foreign goods to consumers are
effectively increased. Tariffs imposed by the U.S. government are on
average lower than those imposed by other governments. Some
industries, however, are more highly protected by tariffs than others.
American apparel products and farm products have historically

received more protection against foreign competition through high

tariffs on related imports.
In addition to tariffs, a government can reduce its countrys imports by
enforcing a quota, or a maximum limit that can be imported. Quotas
have been commonly applied to a variety of goods imported by the
United States and other countries.
6) Lack of Restrictions on Piracy:
In some cases, a government can affect international trade flows by its
lack of restrictions on piracy. In China, piracy is very common;
individuals (called pirates) manufacture CDs and DVDs that look
almost exactly like the original product produced in the United States
and other countries. They sell the CDs and DVDs on the street at a
price that is lower than the original product. They even sell the CDs
and DVDs to retail stores. It has been estimated that U.S. producers of
film, music, and software lose $2 billion in sales per year due to piracy
in China.
As a result of piracy, Chinas demand for imports is lower. Piracy is
one reason why the United States has a large balance-of-trade deficit
with China. However, even if piracy were eliminated, the U.S. trade
deficit with China would still be large.
7) Impact of Exchange Rates:
Each countrys currency is valued in terms of other currencies through
the use of exchange rates, so that currencies can be exchanged to
facilitate international transactions
2.Explain various kinds of letters of credit in detail. Also discuss
various documents required under letters of credit. ?

Answer :-Letter of Credit -- Definition

Letter of credit is a document issued by a third party that guarantees payment for goods or
services when the seller provides acceptable documentation. Letters of credit are usually issued by
banks or other financial institutions, but some creditworthy financial services companies, like
insurance companies or mutual funds, might issue letters of credit under certain circumstances.
A letter of credit generally has three participants: the beneficiary (the person or company who will
be paid), the buyer of the goods or services (sometimes called the applicant), and the issuing
bank (the institution issuing the letter of credit). The beneficiary may request payment to
an advising bank, which is a bank where the beneficiary is a client, rather than directly to the
beneficiary: this might be done, for example, if the advising bank financed the transaction for the
beneficiary until payment was received.

Letters of credit are most often used in international trade, where they are governed by the Uniform
Customs and Practice for Documentary Credits (UCP) rules of the International Chamber of
Commerce.

Types and Features of Letters of Credit

Most letters of credit are import/export letters of credit which, as the name implies, are used in
international trade. The same letter of credit would be termed an import letter of credit by the
importer and an export letter of credit by the exporter. In most cases the importer is the buyer and
the exporter is the beneficiary.
The revocable letter of credit can be changed at any time by either the buyer or the issuing bank
with no notification to the beneficiary. The most recent version of the UCP, UCP 600, did away with
this form of letter of credit for any transaction under their jurisdiction. Conversely, the irrevocable
letter of credit only allows change or cancellation of the letter of credit by the issuing
bank after application by the buyer and approval by the beneficiary. All letters of credit governed by
the current UCP are irrevocable letters of credit.
A confirmed letter of credit is one where a second bank agrees to pay the letter of credit at the
request of the issuing bank. While not usually required by law, an issuing bank might be required by
court order to only issue confirmed letters of credit if they are in receivership. As you might guess,
an unconfirmed letter of credit is guaranteed only by the issuing bank. This is the most common
form with regard to confirmation.
A letter of credit may also be a transferrable letter of credit. These are commonly used when the
beneficiary is simply an intermediary for the real supplier(s) of the goods and services or is one of a
group of suppliers. It allows the named beneficiary to present its own documentation but transfer all
or part of the payment to the actual supplier(s). As you might guess, an un-transferrable letter of
credit does not allow transfer of payments to third parties.

A letter of credit may also be at sight, which is payable as soon as documentation has been
presented and verified, or payment may be deferred (also called a usance letter of credit) until a
certain time period has passed or the buyer has had the opportunity to inspect or even sell the
related goods.
A red clause letter of credit allows the beneficiary to receive partial payment before shipping the
products or performing the services. Originally these terms were written in red ink, hence the name.
In practical use, issuing banks will rarely offer these terms unless the beneficiary is very creditworthy
or an advising bank agrees to refund the money if the shipment is not made.
Finally, a back to back letter of credit is used in a trade involving an intermediary, such as a trading
house. It is actually made up of two letters of credit, one issued by the buyer's bank to the
intermediary and the other issued by the intermediary's bank to the seller.

Why documentation is so important in letters of credit?

There are many important points in a letter of credit transaction that need to
be taken care of professionally. However, documentation is much more
important than any other part of the letter of credit transactions. This
importance stems its power from the letter of credit structure. Letters of
credit transactions are related to the documents only.
The importance of the documentation is stated in UCP 600 article 5 as
follows:
Banks deal with documents and not with goods, services or performance to
which the documents may relate.
In addition, every condition stated on the letter of credit form must be
connected to a document. This point is also clearly indicated in UCP 600
article 14.
If a credit contains a condition without stipulating the document to indicate
compliance with the condition, banks will deem such condition as not stated
and will disregard it.

Letter of Credit
Required Documents
Below are the most common documents required in an Import or Export Letter of Credit* and the
definition of each document.

Bill of Lading: A Bill of Lading is considered the most important document involved in a
shipment of merchandise. An exporter receives a Bill of Lading when delivering the merchandise
to the shipping company for transport to an importer.

Order Bill of Lading: An Order Bill of Lading is a title document. Steamship companies
issue one or more original Order Bills of Lading per shipment, which allows an importer to claim
merchandise when it arrives. An exporter normally endorses the Bills of Lading "in blank," which
means that they are not endorsed to a specific person or institution. The party possessing any
one of the original Bills of Lading can take possession of the goods.

Airway Bill of Lading (Straight Bill of Lading): This instrument does not convey title.
Airline companies issue Straight Bills of Lading called Airway Bills. Since an Airway Bill is issued
only in non-negotiable form, an exporter consigns it to a specific person or institution. A copy of
the Airway Bill accompanies a shipment, and an exporter is given the original to present along
with other required shipping documents. To take possession of the merchandise, a party to
which the merchandise is consigned needs to present proper identification. Therefore, if the air
shipment is consigned to a buyer, the seller might lose control of the merchandise before
payment is made. To prevent this, an Airway Bill should be consigned to Zions Bank.

Commercial Invoice: A Commercial Invoice is a document that describes merchandise, as

stated in the Letter of Credit, and lists the costs. An importer may agree to pay, in addition to the
cost of the merchandise, charges involved in shipping the merchandise. The description of the
merchandise in the Commercial Invoice and the description of the merchandise in the Letter of
Credit must be identical in every way.

Insurance Policy: Issued by an underwriting institution, the Insurance Policy states that a
specified party will be reimbursed an amount in the event merchandise is damaged or
destroyed.
An Insurance Policy generally covers accidental losses and covers voluntary losses when a cargo
must be sacrificed to save a ship. For additional cost, losses caused by spoilage, war, civil
disturbance, riots and other risks can be included in the coverage. Because commercial banks are
not included in the shipping business per se, questions regarding types of coverage should be
referred to a freight forwarder or a customs broke

3. Describe various kinds of perils against which insurance cover can be obtained. (20)
Answer:-A peril is the cause of a risk.A peril is the immediate specific event
causing loss and giving risk to risk.when building is burn,fire is peril.

DEFINITION OF 'NAMED PERILS INSURANCE POLICY'

A home insurance policy that only provides coverage on losses incurred to your
property from hazards or events named on the policy. Named peril policies may

be purchased as a less expensive alternative to a comprehensive coverage or

broad policies, which are policies that tend to offer coverage to most perils.
:=>
A named peril insurance policy covers only what is specifically noted in the policy. For example, if it doesnt say
youre covered for vandalism damages or backed up sewers, you arent. Since the named peril insurance policy only
covers specific perils, it is usually less expensive than an all-risk or open peril insurance policy. A typical broad
form named peril policy would cover fire, windstorm, hail, aircraft, riot, vandalism, explosion and smoke. Flood
insurance and earthquake insurance are two other common examples of named peril policies. When coverage is
written on a named peril basis, the burden is on the insured to prove that one of the named perils caused the
loss.
An all-risk or open peril policy covers everything except what is specifically excluded in the policy. The all-risk
insurance policy is usually more expensive than the named peril policy because it is more comprehensive. Under
an all-risk policy, the burden is on the insurance company to prove that the peril causing the damage is not
excluded; otherwise, coverage applies. Since the exclusions and limitations are the key to determining what coverage
is provided by an all-risk policy, a better name might be named exclusions coverage. The most common perils
excluded in an all-risk policy include:

War

Earthquake or earth movement

Flood, mudslide, seepage and sewer backup (and sometimes surface water that builds up after
heavy rains, underwater springs, groundwater, burst water pipes, overflowing toilets, and wind
or wave-driven water)

Governmental seizure or destruction of property

Boiler explosion

Off-premises utility service interruption

Building ordinance or law

Seepage or leakage of water over a period of time

Electrical damage to electrical devices

Employee dishonesty

Wear and tear; rust, corrosion, fungus, decay, deterioration, hidden or latent defect smog;
settling, cracking, shrinking, or expansion; nesting, infestation or release of secretions by
insects, birds, rodents or animals

Damage to building interiors by rain, snow, sleet, ice, sand, or dust unless the roof or walls are
first damaged except damage by thawing of snow, ice or sleet

Mechanical breakdown

Theft of building materials and supplies not yet attached to buildings

Pollution

Homeowners Insurance Peril

Definition:
An insurance contract needs to explain as best it can what items it will compensate for.
A peril is the choice word used by insurance contracts to explain what risks the
insurance contract will cover.

The true definition of a peril is the exposure to various risks such as injuries, losses and
complete destructions. Insurance companies use the word peril to explain particular
risks that cause damage that the insurance contract will agree to cover. Or in other
words, events that could cause damage to the property covered.
The most common perils in homeowners insurance include:
Fire: Something that produces a spark, flame or glow. Not smoke. Direct damage due to hostile
fire is covered under the fire peril. Hostile fire is a fire that burns where it is not intended to burn
such as a bed or curtains.
Lightning: Defined as natural electricity. Lightning directly damaging something or fire caused
by lightning are both covered under the lightning peril. Also, damage to the electrical system or
appliances in a home due to a lightning strike would also be covered under the lightning
coverage but not if the electrical problem comes from the company providing the power.
Explosion: Coverage for an explosion can vary depending on the insurance policy but generally
refers to explosions that originate within the covered structure but can also sometimes include
explosions that originate outside of the structure and cause damage to the covered structure.
Windstorm: Damage due to wind including cyclones, tornados and hurricanes and covers the
outside of the property and the inside of the property if the wind causes an opening to the inside.
Does not include damage due to floods.
Hail: Damage caused directly from hail. Hail coverage to the inside of a structure is only
covered if the hail itself breaches the structure and causes internal damage so if the hail enters
because of an open window, the damage to the interior due to the hail from the open window
would not be covered.
Riot or Civil Commotion: A riot is usually defined by three or more people causing damage to a
property and a civil commotion is usually defined as damage caused by a large number of
people.
Aircraft: Damage caused by any flying machines including balloons, helicopters, airplanes,
spacecrafts, and self-propelled missiles.
Q.No.4: Differentiate between:
A). Liner Shipping Service and Tramp Shipping Service.
Liner Service is a service that operates within a schedule and has a fixed port rotation
with published dates of calls at the advertised ports.. A liner service generally fulfills the
schedule unless in cases where a call at one of the ports has been unduly delayed due to natural
or man-mad causes..

Example : The UK/NWC continent service of MSC which has a fixed weekly schedule calling
the South African ports of Durban, Cape Town and Port Elizabeth and carrying cargo to the
UK/NWC ports of Felixstowe, Antwerp, Hamburg, Le Havre and Rotterdam..
A Tramp Service or tramper on the other hand is a ship that has no fixed routing or itinerary
or schedule and is available at short notice (or fixture) to load any cargo from any port to any
port..
Example : A ship that arrives at Durban from Korea to discharge cargo might carry some other
cargo from Durban to the Oakland in the West Coast of USA which in an entirely different
direction.. From Oakland say for example it could carry some cargo and go to Bremerhaven..
One of the main differences between Liner and Tramp would be in the type of contract of
carriage and Bill of Lading used..
In the case of a Liner, generally the shipping line operating the liner service will
have their own pre-printed bill of lading or use a BIMCO CONLINEBILL 2000, whereas
in the case of a Tramp service (which may be covered by a Charter Party), a bill of
lading like the BIMCO CONGENBILL 2007 will be used depending on the cargo,
charter party etc..

Are there any similarities between Liner and Tramp Trade..??

iner Service is a service that operates within a schedule and has a fixed
port rotation with published dates of calls at the advertised ports..
Liner service may be a Container service, Break Bulk service, Bulk service,
RORO service etc..
Tramp Service or tramper is a ship that has no fixed routing or itinerary or
schedule and is available at short notice (or fixture) to load any cargo from
any port to any port..
Such trampers are generally break bulk or bulk carriers that arrive at a port
to discharge some cargo and in some cases will be looking for return cargo
or cargo to other regions..
It is important that the term Tramp is not misconstrued as something inferior.

That is just the name that is used in the industry because of the fact that the ship
doesnt have a fixed home (route) and is free to generally wander (sail) around the world
in search of cargo fixtures or carrying cargo..
In terms of vessel operation, Liner and Tramp vessels have below similarities..
Both vessels are :
1.
2.

Proper seaworthy ships capable of carrying various types of cargoes

depending on the trade route
Classed by reputed classification societies

3.

Manned by a crew with the required expertise to handle the operations

and the voyage

4.

Vessels that may be custom built for a specific route/cargo or may be

used on any route to carry any cargo

5.

Subject to the same immigration, customs, health and port

requirements and regulations, except in case of liners, where there
might be a berthing window scheme in place at certain ports which
allows it to berth at the nominated berth at the nominated date/time

Apart from the above similarities in the operation of the vessel, there are also other
similarities in terms of booking, documentation etc..
b) Fiscal Incentives and Financial Incentives :-same as it is.
5.
a) Duty Drawback Scheme :-Duty Drawback is the rebate of duty chargeable on
imported material or excisable material used in the manufacturing of goods in and is
exported. The exporter may claim drawback or refund of excise and
customs duties being paid by his suppliers.
Introduction: The term drawback is applied to a certain amount of duties of Customs and Central Excise,
sometimes the whole, sometimes only a part remitted or paid by Government on the exportation of the
commodities on which they were levied. To entitle goods to drawback, they must be exported to a foreign
port, the object of the relief afforded by the drawback being to enable the goods to be disposed of in the
foreign market as if they had never been taxed at all. For Customs purpose drawback means

the refund of duty of customs and duty of central excise that are chargeable on imported and indigenous
materials used in the manufacture of exported goods. Goods eligible for drawback applies to
a.) Export goods imported into India as such;
b.) Export goods imported into India after having been taken for use
c.) Export goods manufactured / produced out of imported material
d.) Export goods manufactured / produced out of indigenous material
e.) Export goods manufactured /produced out of imported or and indigenous materials. The Duty
Drawback is of two types: (i) All Industry Rate (AIR) and (ii) Brand Rate

The All Industry Rate (AIR) is essentially an average rate based on the average quantity and value of
inputs and duties (both Excise & Customs) borne by them and Service Tax suffered by a particular export
product. The All Industry Rates are notified by the Government in the form of a Drawback Schedule every
year and the present Schedule covers 2837 entries. The legal framework in this regard is provided under
Sections 75 and 76 of the Customs Act, 1962 and the Customs and Central Excise Duties and Service
Tax Drawback Rules, 1995.
The Brand Rate of Duty Drawback is allowed in cases where the export product does not have any AIR
of Duty Drawback or the same neutralizes less than 4/5th of the duties paid on materials used in the
manufacture of export goods. This work is handled by the jurisdictional Commissioners of Customs &
Central Excise. Exporters who wish to avail of the Brand Rate of Duty Drawback need to apply for fixation
of the rate for their export goods to the jurisdictional Central Excise Commissionerate. The Brand Rate of
Duty Drawback is granted in terms of Rules 6 and 7 of the Drawback Rules, 1995.
The Duty Drawback facility on export of duty paid imported goods is available in terms of Sec. 74 (It is
discussed in more detail in under mention para) of the Customs Act, 1962. Under this scheme part of the
Customs duty paid at the time of import is remitted on export of the imported goods, subject to their
identification and adherence to the prescribed procedure.

b) India Trade Promotion Organisation (ITPO).

India Trade Promotion Organisation (ITPO) , the premier trade promotion
agency of the Govt. of India for organizing trade fairs, is committed to
showcase excellence achieved by the country in diverse fi elds especially
trade and commerce. ITPO as the nodal trade promotion agency of the
country has had a pioneering role in the national trade growth dynamics
since its inception. Apart from its role in bringing the Indian businesses,
particularly those in the MSMEs sector, closer to global markets, it was fi rst
to popularize trade fairs as a tool of trade promotion within the country. For
nearly three & half decades, it is managing India's world class exhibition
complex that is constantly upgraded to keep it in a high standard of
readiness.

The Main Activities & Services of ITPO are: [19]

Managing the extensive trade fair complex, Pragati Maidan in the heart of Delhi

 Organising various trade fairs and exhibitions at its exhibition complex in Pragati Maidan and other
centers in India.
Facilitating the use of Pragati Maidan for holding of trade fairs and exhibitions by other fair
organisers both from India and abroad.
Timely and efficient services to overseas buyers in vendor identification, drawing itineraries, fixing
appointments and even accompanying them where required.
Establishing durable contacts between Indian suppliers and overseas buyers.
Assisting Indian companies in product development and adaptation to meet buyers' requirements.
Organising Buyer-Seller Meets and other exclusive India shows with a view to bringing buyers and
sellers together.
Organising India Promotions with Department Stores and Mail Order Houses abroad.
Participating in overseas trade fairs and exhibitions.
Arranging product displays for visiting overseas buyers.
Organising seminars/conferences/workshops on trade-related subjects.
Encouraging small and medium scale units in export promotion efforts.
Conducting in-house and need-based research on trade and export promotion.
Enlisting the involvement and support of the State Governments in India for promotion of India's
foreign trade.
Trade information services through electronic accessibility at Business Information Centre.

1.

c) Voyage Charter:-A voyage charter is the hiring of a vessel and crew for
a voyage between a load port and a discharge port. The charterer pays the vessel
owner on a per-ton or lump-sum basis. The owner pays the port costs (excluding
stevedoring), fuel costs and crew costs. The payment for the use of the vessel is known
as freight.