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 India’s 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 CO2, H2O, N2 and some CH4, H2,

and NH3

Chemical Modeling of Chemical Evolution Reactions

Formaldehyde (H2CO) and hydrogen cyanide (HCN) are simple, carbon-containing 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 + H2Oo 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 CH4, 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 bondso 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 nutrient-recycling 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 variety’s 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 virus-resistant 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 world’s 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 resource-conserving 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:DefinitionMass 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.

ExamplesThe 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 (CO2). 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 -131.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 EconomyA 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.2. 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)

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 government’s 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 legislationsGovernment 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 employeesIn 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 legislationsMost 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 protectionIn 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 decisionsGovernment 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 (capital-

intensive), 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 FPI

ManagementProjects are efficiently managed

Projects are less efficiently managed

Involvement - direct or indirect

Involved in management and ownership control; long-term interest

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

Sell off It is more difficult to sell off or It is fairly easy to sell securities and pull out

FDI FPI

pull out. because they are liquid.

Comes from

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.

What is invested

Involves the transfer of non-financial assets e.g.technology and intellectual capital, in addition to financial assets.

Only investment of financial assets.

Stands for Foreign Direct Investment Foreign Portfolio Investment

Volatility Having smaller in net inflows 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. John’s 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 company’s 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 Yamashita’s small investment in GM, Hungry Dragon’s 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 

agreement establishes wages,hours, promotions, benefits, and other employment terms as well as proce

dures for handling disputes arising under it. Because the collectivebargaining agreement cannot address 

every workplace issue that might arise in the future, unwritten customs and past practices, externallaw, a

nd informal agreements are as important to the collective bargaining agreement as the written instrument 

itself.

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, provide

d 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 a

nd 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 no

t yet reached an impasse, theemployer may not unilaterally change a term of employment that is a manda

tory subject of bargaining. But once the parties have reachedan impasse, the employer may unilaterally i

mplement its proposed changes, provided that it had previously offered the changes to theunion for consi

deration.

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 non-marketable 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 TradeThe 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 oil-producing 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

country’s economy, it is important to identify and monitor

the factors that influence it.

1) Impact of Inflation:

If a country’s 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

country’s exports to other countries will decline.

2) Impact of National Income:

If a country’s 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 country’s 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 country’s 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 country’s

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, China’s 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 country’s 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 CreditMost 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 CreditRequired 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 doesn’t say

you’re covered for vandalism damages or backed up sewers, you aren’t. 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 PerilDefinition:

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

doesn’t 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. Proper seaworthy ships capable of carrying various types of cargoes

depending on the trade route

2. 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 fields 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 first 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.