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IFRS Proposed Roadmap for India |
International Financial Reporting Standards (IFRS)
ECONOMICS AND TRADE-1e
Demand
Demand for a commodity refers to the quantity of the commodity which an individual consumer or a household is willing to purchase per unit of time at a particular time.
The Law of Demand
Law of demand states that higher the price lower the quantity demanded and vice versa other thing remaining constant.
Giffen good
A commodity in which a decrease in the price of good results in decrease in its quantity demanded and vice versa. This is an exception to the law of demand.
Income elasticity
The percentage change in quantity demanded caused by a 1% change in income.
Marginal revenue
The change in total revenue resulting from changing quantity by one unit.
Price elasticity of demand
The percentage change in quantity demanded caused by a 1% change in price.
Economics of scale
This refers to the reduction in the cost as the firm increases all of its inputs. In other words production cost per unit decreases as total production increases up to an extent.
Average fixed cost
This refers to the fixed cost per unit of output.
Average total cost
The total cost per unit of output.
Average variable cost
This refers to the variable cost per unit of output.
Marginal cost
The cost to a firm of producing an external unit of an output.
Total cost
This refers to the total cost of production including both variable and total fixed costs.
Economic order quantity
Maintaining inventory means we are incurring costs in the form of in the form of interest on investment, storage cost ,pilferage cost etc. while if we do not maintain inventory then production may be affected and supplies may not be made on time.
Market
Stonier and Hague explain the term market as “any organizational where by buyers and sellers of a good are kept in close touch with each other. The only essential for a market is that all buyers and sellers should be in constant touch with each other.
Perfect Competition
A market structure characterized by:
- A very large number of relatively small buyers and sellers. Therefore a single buyer`s and seller`s action cannot have an perceptible influence market price.
- All sellers are selling homogeneous products.
- The firms are free to enter and leave the industry.
- The firms in the industry do not collide with each other.
- The factors of production must be free to enter or leave the industry.
- Each buyer and sellers operate under conditions of certainty, being endowed with complete knowledge of prices, quantities, costs, and demand.
POVERTY : THE BANE OF MODERN TIMES

‘Poverty’ is measured by one’s income according to the World Health Organisation (WHO), with regard to the access to barest minimum desirable nutritional standards of calorie intake. It is alarming to know that even by these standards, one in every four people is living below the poverty line. On one side, we have a fast progressing and the so-called ‘vibrant economy’, but on the flip side, we have a population that is still struggling to come to terms with poverty. We cannot ignore poverty, which in turn is a factor for many of the other social problems like hunger, spread of diseases, increase in crimes, etc., and to say that the world is progressing and developing, when around 1.4 billion people in the world are living in abject poverty, i.e. below the poverty line, would be more than a farce.
The World Bank measures poverty based on income, if your income is $1.25 or less a day, then you live in extreme poverty. Poverty is endured and created by people itself, and it is the responsibility of people to eradicate it.
Poverty’ is the major cause of hunger-related deaths all around the world. According to the United Nations, about 25,000 people die every day from hunger, and many people do not have access to even a day’s meal. Poverty is also a cause for the spread of many contagious diseases like pneumonia, tuberculosis, etc. These diseases are often curable, but the problem is that in poor villages or communities, there are often no doctors or health centres for treatment.
Read Also: Poverty : Concept and its Variants
Poverty is also indirectly linked to the spread of AIDS, one of the deadly diseases. AIDS kills approximately over 1.5 million people a year. AIDS is a preventable and increasingly treatable disease, but again poverty is a major hindrance in preventing this disease, as proper education about the prevention and treatment of AIDS is not accessible to the poor. Through proper education—in general, and about the spread and prevention of the disease, in particular—and proper medicine, AIDS has been brought under control in the developed countries. The same can be true for nations where AIDS is at its peak—AIDS cases abound especially, in poverty-ridden areas.
A child, who is born into poverty, undergoes extreme hardships during his growing up years. When he sees children of his age having and enjoying all the luxuries of life, then he thinks of short cuts to achieve those luxuries, which eventually leads to a criminal being born. Thus, the rise in crime graph of a city can directly be attributed to the rise in poverty.
The UN definition of poverty is—“Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.”
In today’s modernised world where fast-food joints and malls have mushroomed in every corner of the city, we can still see people outside these complexes begging for food and money. We still see mothers with their infants on their shoulders begging for money at traffic lights. We ignore them and move on, sometimes dismissing them as criminals who are part of the begging mafia. In reality, do we care for them? Do we ever think, how their daily lives would be?
Must Read: Niti Aayog Task Force on Eliminating Poverty
Nobody should be denied his/her rights to adequate housing, food, water and sanitation, and to education and health care. There have been initiatives from world organisations and governments all around the world to fight poverty. Initiatives like ‘Food for Work’, where people have been provided free meals for doing public works like road repairs, etc., are doing well. And, the initiative, ‘Food for Education’ provides meals to children for attending schools. This initiative promotes education as well as feeds die hungry children.
Commercial banks – Scheduled and Non-scheduled

Commercial banks are classified into the scheduled and non-scheduled bank. The scheduled banks are sub-grouped into:
- Nationalized scheduled commercial banks
- Foreign banks
- Other non-nationalized scheduled banks
- It must have a paid up capital and reserves for an aggregate value of at least Rs. 5,00,000.
- It must satisfy the RBI, that its affairs are not conducted in a manner detrimental to the interest of its depositors; and
- It must be a corporation and not a partnership or a single owner firm.
Scheduled banks enjoy certain privileges such as free/concessional remittance facilities through the offices of the RBI and its agents and borrowing facilities from the RBI. In return, the scheduled are under obligation to:
- maintain an average daily balance of cash reserves with the RBI at rates stipulated by it; and
- submit periodical returns to the RBI under various provisions of Reserve Bank of India Act, 1934 and the Banking Regulation Act 1949 (as amended from time to time).