Key Concepts in Economics, Governance, and Resource Management

Understanding Money and Exchange

Money is a medium of exchange that is widely accepted in transactions for goods and services.
It can take many forms, such as currency, coins, bank deposits, and digital currency.
Money acts as an intermediate in the exchange process and thus eliminates the need for a double coincidence of wants.
Money acts as an intermediate in the exchange process.

In India, the Reserve Bank of India issues currency notes on behalf of the Central Government.
It supervises the functioning of formal sources of loans.
Banks maintain a minimum cash balance out of the deposits they receive.
The RBI monitors that banks actually maintain the cash balance.
The RBI ensures that banks provide loans not just to profit-making businesses and traders, but also to small cultivators, small-scale industries, and small borrowers.
Periodically, banks must submit information to the RBI on their lending activities: how much they are lending, to whom, and at what interest rate.

Members of SHGs can take small loans from the group itself to meet their needs.
The group charges a lower rate of interest on these loans.
After a year or two, the group becomes eligible for availing loans from banks.
The group is responsible for the repayment of the loan.
Any case of non-repayment of a loan by a member is seriously followed up by other members of the group.
SHGs help borrowers overcome the problem of lack of collateral.
They can get timely loans for a variety of purposes and at a reasonable interest rate.
SHGs help women become financially self-reliant.
The regular meetings of the group provide a platform to discuss and act on a variety of social issues, such as health, nutrition, and domestic violence.

Members of SHGs can take small loans from the group itself to meet their needs.
The group charges a lower rate of interest on these loans.
After a year or two, the group becomes eligible for availing loans from banks.
The group is responsible for the repayment of the loan.
Any case of non-repayment of a loan by a member is seriously followed up by other members of the group.
SHGs help borrowers overcome the problem of lack of collateral.
They can get timely loans for a variety of purposes and at a reasonable interest rate.
SHGs help women become financially self-reliant.
The regular meetings of the group provide a platform to discuss and act on a variety of social issues, such as health, nutrition, and domestic violence.

In hill and mountainous regions, people built diversion channels like the ‘guls’ or ‘kuls’ of the Western Himalayas for agriculture.
Rooftop rainwater harvesting was commonly practiced to store drinking water, particularly in Rajasthan.
In the flood plains of Bengal, people developed inundation channels to irrigate their fields.
In semi-arid and arid regions, agricultural fields were converted into rain-fed storage structures that allowed water to stand and moisten the soil, such as the ‘khadins’ in Jaisalmer and ‘Johads’ in other parts of Rajasthan.

Industry and agriculture are strongly dependent upon mineral deposits and the substances manufactured from them.
The geological processes of mineral formation are very slow.
Mineral resources are finite and non-renewable.
Continued extraction of ores leads to increasing costs as mineral extraction occurs from greater depths, along with a decrease in quality.

A concerted effort must be made to use mineral resources in a planned and sustainable manner.
Improved technologies need to be constantly evolved to allow the use of low-grade ores at low costs.
Recycling of metals, using scrap metals, and other substitutes.

There are two or more levels (or tiers) of government.
Different tiers of government govern the same citizens, but each tier has its own jurisdiction in specific matters of legislation, taxation, and administration.
The powers and functions of each tier of government are specified and guaranteed by the Constitution.
The fundamental provisions of the Constitution cannot be unilaterally changed by one level of government; such changes require the consent of both levels of government.
Sources of revenue for different levels of government are specified by the Constitution.
Courts have the power to interpret the Constitution and the powers of different levels of government. The highest court acts as an umpire if disputes arise between different levels of government in the exercise of their respective powers.