Sunday, December 9, 2012


gist for cst 9-12-2012

hari kiran PM (0 minutes ago)
to me
hello sir,
i am attaching gist of todays cst session with this mail (i.e on 9-12-2012)
thank you
09-12-2012 CST SESSION.docx
09-12-2012 CST SESSION.docx
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Human development index
§  Created by :mahabub ul haq(pakistan)
o   Followed by amratya sen(india)
o   Statistics of the factors which leads to development.
§  Example:
o   If u want to buy a tablet. Either apple ipad or Samsung note
What will u do? Search for specifications like: RAM, speed, display, memory, resolutions etc. all these are different from one another if we consider it as individuals. But if we combine and validate we can choose, which tablet is best one.
o   Similarly if u compares two countries and say which one is developed? How will u do that?
There HDI plays an important role. Each and every country has their own HDI based on their own factors. It may be health, education, life expectancy, PPP (purchasing power parity).
v  Remember these factors may or may not be same for all countries.
What is PPP?
Minimum capacity of purchasing essential goods required. This goods listed will be made by govt and agencies to calculate HDI. 
o   Remember the questionnaire we will fill in surveys.
§   Example: NSSO survey, census.

Based on the obtained answers, Calculations will be done. Recall the statistics we learnt earlier classes same methods. There will be different co-efficient for each weighted sum. These co-efficient are different.
            Now HDI of country is done.  Another country’s HDI will be calculated with different factors i.e., there co-efficient will be different. Then how to compare?
            For comparison there  coefficients will be equalized by some adjustments. This is called Inequality Adjustements in HDI.
From 2011 inwards three factors are introduced in HDI calculation.
o   Life expectancy at birth
o   Education index
o   PPP (purchasing power parity)
Some other indexes are multi dimensional poverty index, gender inequality index
Ø  What is per capita income?
o   Capita means life. i.e single
o   Per + capita+ income = income for each individual.

Consider kiran started a company abc. Invested amount in it. He bought an office, new building.  Machinery bought for production. Goods produced and sold.  He started a branch office xyz in America and sold goods also there.
Case1: while calculating GDP
                        Income earned in india from abc company is only calculated
Case 2: while calculating NDP
                        Next year again calculation starts. Last year income calculated even considering the machineries. So will it be calculated this year also?  There the depreciation values should be removed.
                        NDP = GDP – depreciation
Case 3: while calculating GNP
                        Here income of both abc company and xyz (abroad branch) company will be calculated.
Case 4: while calculating NNP
                        Same as NDP calculation
                        NNP = GNP - depreciation
v  All in the above cases country’s capital goods are to be considered.

Q) Obama’s new tax making policy: rich people have to pay more taxes.  Can it be implemented in India?
            Previously US govt supports rich people. As there economy is a capitalistic economy. but now it tend to change from it. In Indian govt has service motto. Where all the people (rich and poor) should be benefitted.

Q) Why railway has different budget from annual budget?
                                    When it is first started by British it is under delegation of powers. This is considered as separate department and probably largest dept to maintain.
                                    Moreover after independence when railways were taken from british . we have took assistance from them to maintain it. So we need to provide pension for them. Which will not be govt purpose.

Q) why govt withdraw pension scheme in 2010?
                        In the intial days of govt establishment after independence , it is the govt duty to look after its employees. So they introduced pension schemes but now a days many banks and agency started this scheme.

Q) if india has to take grants from other countries (imf) why it is giving to other countries in bi lateral relations (afghanistan)?
                        To make self reliant we are marketing our natural resource in the internation marker and  earning money. Why we are giving money is to maintain relationship with those countries.  We are providing aid to those countries to access that market and also maintain relations and international friendships.
            Example:                     providing educational aid to Afghanistan means helping to construct universities and providing employment for our teacher there  to teach them. So relation between afghan and india  also increases.

Ø  Cost and price are different.
o   Cost of good at shop = cost of good at place it produced + transportation cost.

Ø  Chairman for (IMG)Inter ministerial Group Inflation will be chairman of PM advisory council.

Ø Norman Borlaug  first one to start green revolution in the world.
o   In India : MS Swaminathan

Cheque Truncation System (CTS-2010): Meaning, Advantages explained

    What is cheque clearing house?
    What is MICR code?
    What is Cheque Truncation System (CTS)?
    What are the benefits of Cheque Truncation?

What is cheque clearing house?

    Suppose a party from Delhi pays you via cheque of Citibank and you have account in SBI, Ahmedabad. You deposit this cheque in your area’s SBI branch.
    Now the SBI branch manager would send his [overworked, underpaid] Bank PO to Citibank’s office in A’bad. He’d show the cheque, collect the cash and return to deposit the money in your account.
    But SBI would be getting thosands of cheques everyday- some from ICICI, some from Citibank, some from axis and so on. SBI cannot send its staff to every other bank to get the cash, that’d be extremely time consuming.
    Therefore To simplify this cheque transection process, each bank will send a representative to a central place and exchange cheques drawn on each other.
    This centralized place is called clearing house/processing house.
    Reserve bank of India is act as clearing house.
    In cities where RBI’s office doesnot exist, usually SBI or other public sector bank acts as the clearing house.

What is MICR code?

    By seeing the PIN code, a postman can know the destination of an envelope. Same way by using the MICR code, RBI (clearing house) can know the name of a bank, location of its branch from where the cheque was issued= faster clearing of cheques.
    MICR = Magnetic ink character recognition.
    At the bottom of every cheque, you’d see some black colored numbers with weird looking fonts. That is the MICR code.
    These numbers are printed with a special ink  containing iron oxide, so that it can be automatically read by a special machine.
    Ofcourse this sounds similar to bar codes, but there is a difference: unlike barcode, you can read the MICR code and decode it, without the use of special machines.

What is Cheque Truncation System (CTS)?

    Under the old paper cheque based clearing, the SBI bank will send the paper cheque to the clearing house and get the money and then transfer it to your account.
    This is still time consuming. because SBI (or any bank) would need to physically move the cheques to a clearing house.
    So RBI came up with a new idea known as ‘Cheque Truncation System (CTS)’.
    In this Cheque Truncation System (CTS), SBI branch will not send the paper cheque to the clearing house, but instead, it’d merely scan the cheque, and electronically send the image + MICR data, to the clearing house.
    From the clearing house, the data would goto the paying bank (Citibank in our example), they will inspect the MICR data, signature on the scanned image and release the money to SBI.
    This process is faster and more safer than the conventional paper-cheque clearing method.

What are the benefits of Cheque Truncation?

    It Eliminates the time, money and manpower wasted during physical movement of cheques (from banks to clearing house).
    Thus, Cheque Truncation =faster clearing = better service to customers,
    Cheque Truncation system reduces the scope for clearing-related frauds
    There is no fear of losing cheque in transit.


    In the year 2010, RBI came up with the guidelines for Cheque Truncation system. (CTS 2010)
    The banks would need to upgrade a few things to comply with CTS 2010 standards of RBI.
    For example, in their branch offices, they would need to buy scanners and install special software provided by RBI, to securely transfer and receive the scanned image and data.
    They may need to change the color-scheme of chequebooks so that signature and handwriting is visible in the scanned image. And so on…
    Problem: some jholachhaap banks, are yet to comply with RBI’s CTS 2010 guidelines.
    Hence recently RBI issued a warning to all banks:


‎121209 - My Learnings from my Guruji.....
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