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GD-PI Gyaan sessions for 2010 season and beyond
by Manish Harodia - Sunday, 9 January 2011, 02:41 AM
  We are planning to put up a series of informatory topics over the next few weeks to pep up your preparation for the most important part of your selection, the GDs and PIs. Now, you would be dealing with students who have already been filtered, so though the conversion ratio is higher here, the margin of error is definitely much less compared to the other stages of selection.

Since, TG has a wonderful advantage of having a very high written calls conversion ratio, it is natural that we start converting them to get close to 100%. smile

Credit for this article to TG students- Mehak Bharti and Amit Kumar. Slightly long but surely worth a read.

Political system is a social institution which deals with the governance of a state and its relationship with the people. India is no different and it also developed govt. and pol. inst. to give shape and form to the fundamental principles. The identity and the unity of its govt. belong to the ancient Vedic age. Ancient Indian political system goes back to 5000 years or more.
The history of Indian pol. system gets enriched with Indus valley civilisation and further develops with the coming of Aryans in the early Vedic period. This period saw the upsurge of kingdoms which was tribal in nature. Each tribe formed a separate kingdom. The basic unit of the political organisation was the family and a number of families formed a village. Here king and his subjects were bound by "dharmas" which were code of duties.
During the medieval period king-in-ministry became the usual form of govt.The concept of central govt evolved during the period of sultanate. In the mughal period pol system revolved around the autocracy of the king and assistance by the council of ministers. Village admin and panchayat system were also a significant part of ancient Indian pol system. They are systems of local self govt. found at village level. Panchayat system has become an integral part of Indian administrative system. At present its a 3 tier inst. and continues to administer the villages.
Ancient Indian system underwent a change with the coming of British. The British took over the whole administration into their hands. The establishment of east India Company made India into a colony. The princely states ruled by the individual rulers came under the dominion of the British crown. The political union after 1876 was officially called the Indian empire.
In the late nineteenth century self govt underwent a change in the British India with the appointment of Indian counsellors to advise the British viceroy. The Indian council’s act of 1892 was passed and municipal corporations and district boards were created for local administration. The govt. of India act of 1909 known as Morley Minto reforms provided limited roles to the Indians in the central and the provincial legislatures known as legislative councils. these elected members were gradually given the idea of opposition to the official govt. THE GOVT. OF INDIA ACT of 1935 was approved by the British parliament for establishment of independent legislative in all provinces of British India. This text has further influenced the development of constitution of independent India. According to the act bicameral national parliament and an executive branch under the purview of the British govt.came into force.
The attainment of independence from British colonial rule made India a sovereign nation. The constitution of India came into force on 26 January 1950 and India was made a "sovereign socialist democratic republic" with a representative parliamentary system of govt.It can be rightly identified that the present Indian political system has grown out of a long evolutionary process.
India is the largest state by population with a democratically-elected government. Like the United States, India has a federal form of government, however, the central government in India has greater power in relation to its states, and its central government is patterned after the British parliamentary system. Regarding the former, "the Centre", the national government, can and has dismissed state governments if no majority party or coalition is able to form a government or under specific Constitutional clauses, and can impose direct federal rule known as President's rule. Locally, the Panchayati Raj system has several administrative functions.
The central government exercises its broad administrative powers in the name of the President, whose duties are largely ceremonial. The president and vice president are elected indirectly for 5-year terms by a special electoral college. The vice president assumes the office of president in case of the death or resignation of the incumbent president.
The constitution designates the governance of India under two branches namely the executive branch and real national executive power is centered in the Council of Ministers, led by the Prime Minister of India. The President appoints the Prime Minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority. The President then appoints subordinate ministers on the advice of the Prime Minister. In reality, the President has no discretion on the question of whom to appoint as Prime Minister except when no political party or coalition of parties gains a majority in the Lok Sabha. Once the Prime Minister has been appointed, the President has no discretion on any other matter whatsoever, including the appointment of ministers. But all Central Government decisions are nominally taken in his name.
Legislative branch
The constitution designates the Parliament of India as the legislative branch to oversee the operation of the government. India's bicameral parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is held responsible to the Lok Sabha.
State Government
States in India have their own elected governments, whereas Union Territories are governed by an administrator appointed by the president. Some of the state legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to parliament.
Each state also has a presidentially appointed governor who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the States, although some territories have gained more power to administer their own affairs. Local state governments in India have less autonomy compared to their counterparts in the United States and Australia.
Judicial branch
India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The constitution designates the Supreme Court, the High Courts and the lower courts as the authority to resolve disputes among the people as well as the disputes related to the people and the government. The constitution through its articles relating to the judicial system provides a way to question the laws of the government, if the common man finds the laws as unsuitable for any community in India.
Local governance
Panchayati Raj
On April 24, 1993, the Constitutional (73rd Amendment) Act, 1992 came into force to provide constitutional status to the Panchayati Raj institutions. This Act was extended to Panchayats in the tribal areas of eight States, namely Andhra Pradesh, Bihar, Gujarat, Himachal Pradesh, Maharashtra, Madhya Pradesh, Orissa and Rajasthan from 24 December 1996.
The Act aims to provide 3-tier system of Panchayati Raj for all States having population of over 2 million, to hold Panchayat elections regularly every 5 years, to provide reservation of seats for Scheduled Castes, Scheduled Tribes and Women, to appoint State Finance Commission to make recommendations as regards the financial powers of the Panchayats and to constitute District Planning Committee to prepare draft development plan for the district.
As like any other democracy, political parties represent different sections among the Indian society and regions, and their core values play a major role in the politics of India. Both the executive branch and the legislative branch of the government are run by the representatives of the political parties who have been elected through the elections. Through the electoral process, the people of India choose which majority in the lower house; a government can be formed by that party or the coalition.
India has a multi-party system, where there are a number of national as well as regional parties. A regional party may gain a majority and rule a particular state. If a party represents more than 4 states then such parties are considered as national parties.
The evolution of parties and party system in India after Independence may be viewed broadly as consisting of four phases, with each phase having its genesis in the earlier one and flowing into the next one: period of Congress consolidation and dominance (1952-67); consolidation of opposition parties and emergence of multi-party system (1967-89); period of flux (1989-98); shaping of coalitional party system (1998-2004).
It has now become conventional to begin any discussion on political parties in India with the emergence of the Congress dominance during the 1950s and its breakdown during the 60s and 70s. The factors that helped Congress party to assume the role of a dominant ruling party in the wake of Independence and consolidate itself are well known. With partition, the main rival to the Congress, the Muslim League, was removed from the electoral scene.
Electoral politics that replaced the politics of freedom struggle had severely constricted the space available to non-Congress parties earlier. Relatively weak as they were when compared to the Congress during the freedom struggle, they were further rendered feeble under the first past the post electoral system followed in India. It enabled the Congress to gain two thirds majority in the legislatures .The multiplicity of parties and the presence of large number of independents enhanced the chances of victory for the Congress. Thus the presence of other parties in legislatures was much below their popular support.
However, the beauty of democracy lies in its ability to provide ground for the working out of the opposition to the dominant idea or institution. Alongside the blossoming of the Congress dominance, we notice the sprouting of the second phase. New opposition parties began to emerge in the 1950s and 1960s. Several leaders within the Congress, who were either disgruntled with the policies of the party or denied access to power went out of it and formed separate parties – Socialist parties, Kisan Mazdoor Praja Party (KMPP), Krishikar Lok Party (KLP), Bangla Congress, Kerala Congress, Jana Congress in Orissa, Swatantra, Bharatiya Kranti Dal, etc. Other parties, rooted in long-standing anti-Congress orientations, also began to gain strength: SAD in Punjab, Muslim League in Kerala, DMK in Tamil Nadu, National Conference in Jammu & Kashmir, etc. The Communist party too split on the question on support to the Congress party and those who took a vehement anti-congress position, saying that defeat of the Congress was necessary for the advancement of people’s democracy in the country, formed the CPM in 1964, which within in three years became the ruling party in Bengal and Kerala.
If the 50s saw the consolidation of the Congress, the late 60s and 70s saw the consolidation of the non-Congress parties. Although the Congress retained power at the Union level in the 1967 elections, the party citadels began crumbling in several States. Opposition parties forged alliances and formed governments in eight major Indian States. Biju Patnaik, who formed the Utkal Congress in 1970, advocated the theory that future belongs to provincial parties which championed the hopes and aspirations of the people of their respective regions. Visions of a federal government comprising representatives from different States began to appear on the political horizon.
The congress rule was interrupted between 1977 to 1980, when the Janata Party coalition won the election owing to public discontent with the controversial state of emergency declared by the then Prime Minister Indira Gandhi.
The 1980s was a period of great flux. It saw the emergence of more and more new parties. Several National and regional parties were born as the Janata party began to fall apart. So me old parties took a new avatar, such as the BJP (formed in 1980), which began to gain strength as the major opposition to the Congress at the national level and in some States. The Bahujan Samaj Party began to take shape in the North as the representative of the dalits. New regional parties sprouted, developed and captured power in States: such as the TDP (1983) in AP and the AGP (1985) in Assam. As a result of reconfiguration of politics numerous small parties began to gain strength or emerge: All India Muslim League (1948), Shiv Sena (1966), Jharkhand Mukti Morcha (1972), Manipur People’s Party, Mizo National Front (1965), J&K Panthers Party, Nagaland People’s Party, Nagaland People’s Council, Sikkim Sangrama Parishad, Indian People’s Front, etc. Due to the fragmentation of major regional parties different splinter parties of SAD, DMK (the Anna DMK in 1972), and Republican Party of India and Kerala congress began to appear.
1989 marked the collapse of the Congress dominance at the national level, In terms of presence in the Lok Sabha, the Congress for the first time in 1996 became the second party, behind the BJP. The growth of the BJP after 1989 and its coming to power in 1998 indeed marked a turning point in the history of party politics in the country. That the difference between the first and second parties was reduced to almost to zero showed that the BJP’s performance was not a one-time affair (see). The rapid expansion in the electoral support for the BJP and sudden increase in the number of its MPs in the Parliament, and its ability to forge alliances with several parties to come to power marked the party politics of the 1990s. We saw the emergence of bipolarities in the States and at the Centre. While in the States it is in the form of a competition between two parties or between two competing alliances, at the national level it was mainly a competition between competing alliances. As the BJP gained strength, the effort by the Janata Dal and other regional parties of the United Front to work with the third alternative (to the Congress and the BJP) proved to be in vain. The tri-nodal party system that raised hopes in the 1990s got slowly melted away.

The formation of alliances and coalition governments at the National and State levels ushered in a new phase in party competition and cooperation. It is amazing that NDA government at the Centre during 1999-2004 had about 25 partners in it. Wallowing in its former glory, the Congress party wanted to come to power on its own. But on the eve of 2004 Lok Sabha elections it finally realised that it could not do so and forged alliances with 16 parties. The ability to rope in the support of the regional and small parties and their electoral performance decided the fate of the National parties. In 2004 elections, a loss of few allies and the poor performance of two or three of its partner State parties caused an electoral disaster for the NDA. The reverse saw the Congress forming the government (Yadav, 2004).The 2004 Indian elections saw the INC winning the largest number of seats to form a government leading the United Progressive Alliance, and supported by left-parties and those opposed to the BJP. Thus, the alliance affect became crucial in the defeat and victory of parties at the national and State levels. The Congress allies added about 10 per cent to the UPA, while the BJP allies added about 14 per cent to the NDA.
22 May 2004, Manmohan Singh was appointed the Prime Minister of India following the victory of the INC & the left front in the 2004 Lok Sabha election. The UPA now rules India without the support of the left front. Previously, Atal Bihari Vajpayee had taken office in October 1999 after a general election in which a BJP-led coalition of 13 parties called the National Democratic Alliance emerged with a majority.
Formation of coalition governments reflects the transition in Indian politics away from the national parties toward smaller, more narrowly-based regional parties. Some regional parties, especially in South India, are deeply aligned to the ideologies of the region unlike the national parties and thus the relationship between the central government and the state government in various states has not always been free of rancour. Disparity between the ideologies of the political parties ruling the centre and the state leads to severely skewed allocation of resources between the states.
In the working of parties, caste, religion, language and region also have acquired ideological overtones. Religion has been an active element in party domain before and after Independence. Today we have parties that claim to represent the interests and culture of specific religions. In Punjab, the rise of the Shiromani SAD had its roots in religion and its membership is restricted to Sikhs only. Some times, language and region also acquired the nature of ideology. India has some of the highly developed and rich languages of the world. The consolidation of the Tamil Dravid parties, the rise of the Shiv Sena, TDP, AGP, BJD (and its earlier version the Utkal Congress), National Conference and PDP in J&K, JMM, Trinamool Congress, etc. shows how “region” has the potential to assume the form of an ideology.

Parties in India on the whole acted as key agencies of democratic transformation in the country. In a society that had a long history of social inequalities and dogged by poverty and backwardness it is not easy to bring freedoms to all in an equal measure that too in a swift manner. At the time India became a republic, the democratic political structure came in a big way. Its polity was much ahead of its social and economic structure. Leaders of India are aware of this contradiction between political democracy and socio-economic structure. Political parties had precisely tried to grapple with this new situation and tasks. Change in social relations and values cannot be brought in a jiffy nor can the pace be forced at will. In any democracy it has to happen only through reconciliation of all sections to the changing realities, which is more slow and irritating to those who want swift radical changes. Parties popularised notions of equality and freedom among people and also moderated the extreme demands for individual liberty and social equality. Both change and stability are important. Thus, even those parties that stood for radical changes are compelled to implement incremental changes when came to power.
Parties enabled the democratic institutions in India to work with a large measure of success. The parties in the initial years of post-Independence did work for the realisation of the noble objectives of the Indian Constitution. Parties grappled with the sudden expansion of democracy in 1950 through the sanctioning of basic freedoms and adult franchise. The bitter struggle among the socialists, communists and the Congressmen were both over sharing power and also shaping policies. The parties became the forums where intense discussions and debates were held on the possible policy alternatives for governments. The ability of the parties during the 50s and 60s to fight the Congress policies, although from different and often divergent perspectives, to mobilise people on the basis of alternative programmatic standpoints showed the vibrancy of parties in India. The attempts to resist the authoritarian rule and the way the non-Congress parties focused on the need to protect the basic freedoms strengthened the democratic fabric of the nation. smile
Re: GD-PI Gyaan sessions for 2010 season and beyond
by Smarti Agarwal - Monday, 10 January 2011, 09:29 AM

Thanks sir!!!

Very Informative article .


Re: GD-PI Gyaan sessions for 2010 season and beyond
by Manish Harodia - Monday, 10 January 2011, 04:52 PM
  Independent India's first years were marked with turbulent events — a massive exchange of population with Pakistan, the Indo-Pakistani War of 1947 and the integration of over 500 princely states to form a united nation.An estimated 3.5 million Hindus and Sikhs living in West Punjab, North-West Frontier Province, Baluchistan, East Bengal and Sind migrated to India in fear of domination and suppression in Muslim Pakistan. Communal violence killed an estimated one million Hindus, Muslims and Sikhs.British India consisted of 17 provinces and 562 princely states. Under the leadership of Sardar Vallabhbhai Patel, the new Government of India employed political negotiations backed with the option (and, on several occasions, the use) of military action to ensure the primacy of the Central government and of the Constitution then being drafted.
There were three States that proved more difficult to integrate than others:·
Junagadh – a December 1947 plebiscite resulted in a 99% vote to merge with India, annulling the controversial accession to Pakistan, which was made despite the people of the state being overwhelmingly Hindu.·
Hyderabad – Patel ordered the Indian army to depose the government of the Nizam after the failure of negotiations, which was done between 13–17 September 1948. It was incorporated as a state of India the next year.·
The area of Kashmir in the far north of the subcontinent quickly became a source of controversy that erupted into the First Indo-Pakistani War which lasted from 1947 to 1949. Eventually a United Nations-overseen ceasefire, pushed by Nehru’s referral of the matter to the UN, was agreed that left India in control of two thirds of the contested region. The Indian Constitution came into force in Kashmir on 26 January 1950 with special clauses for the state.
The Constituent Assembly adopted the Constitution of India, drafted by a committee headed by B. R. Ambedkar, on 26 November 1949. India became a federal, democratic republic after its constitution came into effect on 26 January 1950. Rajendra Prasad became the first President of India.

1950s and 1960s

India held its first national elections under the Constitution in 1952, where a turnout of over 60% was recorded. The National Congress Party won an overwhelming majority, and Jawaharlal Nehru began a second term as Prime Minister. President Prasad was also elected to a second term by the electoral college of the first Parliament of India.

Nehru administration (1952–1964)
Ø Foreign Policyo Was a founder member of Non-Aligned Movement along with Yugoslavia’s president Tito, Egypt’s president Nasser, Indonesia’s President Sukarno. The movement’s main concern was to keep itself non- aligned with respect to both USSR and USA, who at that time were involved in a cold war.
o Was instrumental in recognizing the republic of China and obtaining for it, the permanent seat in the UNSC.
o Nehru referred the first Kashmir war in 1947 to UN and a ceasefire was announced on 2nd Jan 1949.
o Signed the PanchSheel agreement with China in 1954
o Along with Gen. Kaul started the forward policy of establishing army posts on many disputed sites of the Indo-China border. He also granted political asylum to Dalai Lama which according to many was a major provocation for China
o The War with China in 1962 shattered Nehru’s plans of forming an ‘Asian axis’ with China and lent a blow to his plans of reducing military expenditure.
o In 1960, after continual petitions for a peaceful handover, India invaded and annexed the Portuguese colony of Goa on the west coast of India.

Ø Education and Social Reforms

o Established institutes like IITs, AIMS, IIMs. He laid great emphasis on primary education and thousands of schools were built during his tenure.
o Established National Book Trust and the National Literary Academy.
o Brought amendments to Hindu law to criminalize caste discrimination
o Brought in reservations for people belonging to SC or ST.
o He was a champion of secularism and brought greater representation to religious minorities in decision making.

Ø Economic Policies

o Was instrumental in establishing five year plans(1951)
o He took India on a path of Mixed Economy a combination of State owned Large Industries and privately owned medium and small scale industries
o His concept of State led development didn’t result in expected progress, but led to crony-capitalist private sector entities using ‘license raj’ to carve out lucrative niches for themselves
o His wariness regarding Foreign investment is often criticized.

[Image] Could not post here sad

States reorganization

Ø Demand of an Andhra State in 1953 sparked a major re-shaping of the Indian Union. Nehru appointed the States Reorganization Commission, upon whose recommendations, the States Reorganization Act was passed in 1956.
Ø Old states were dissolved and new states created on the lines of shared linguistic and ethnic demographics. Kerala, Maharashtra, Gujarat and Punjab were the few states formed then.Post-Nehru India
Ø Jawaharlal Nehru died on 27 May 1964. Lal Bahadur Shastri succeeded him as Prime Minister.
Ø In 1965 in the Second Kashmir War India and Pakistan again went to war, but without any definitive outcome or alteration of the Kashmir boundary. The Tashkent Agreement was signed under the mediation of the Soviet government,
Ø Shastri died on the night after the signing of the Tashkent agreement. A leadership election resulted in the elevation of Indira Gandhi, Nehru's daughter who had been serving as Minister for Information and Broadcasting, as the third Prime Minister. She defeated right-wing leader Morarji Desai.
Ø The Congress Party won a reduced majority in the 1967 elections owing to widespread disenchantment over rising prices of commodities, unemployment, economic stagnation and a food crisis.
Ø Indira Gandhi had started on a rocky note after agreeing to a devaluation of the Indian rupee, which created much hardship for Indian businesses and consumers, and the import of wheat from the U.S. fell through due to political disputes.
Ø Morarji Desai entered Gandhi's government as Deputy Prime Minister and Finance Minister, and with senior Congress politicians attempted to constrain Gandhi's authority. Gandhi resuscitated her popular appeal by a major shift towards socialist policies. She successfully ended the privy purse guarantee for former Indian royalty, and waged a major offensive against party hierarchy over the nationalization of India's banks.
Ø When Congress politicians attempted to oust Gandhi by suspending her Congress membership, Gandhi was empowered with a large exodus of MPs to her own Congress (R). The bastion of the freedom struggle, the Indian National Congress had split in 1969. Gandhi continued to govern with a slim majority.


Ø In 1971, Indira Gandhi and her Congress (R) were returned to power with a massively increased majority.
Ø The nationalization of banks was carried out, and many other socialist economic and industrial policies enacted.
Ø India intervened in Bangladesh Liberation War a civil war taking place in Pakistan's Bengali half, after millions of refugees had fled the persecution of the Pakistani army. The clash resulted in a complete rout for Pakistan and the independence of East Pakistan, which became known as Bangladesh, and Prime Minister Indira Gandhi's elevation to immense popularity.
Ø Relations with the United States grew strained, and India signed a 20-year treaty of friendship with the Soviet Union - breaking explicitly for the first time from non-alignment.
Ø In 1974, India tested its first nuclear weapon in the desert of Rajasthan.
Ø In the Indian protectorate of Sikkim, a referendum was held that resulted in a vote to formally join India and on 26 April 1975, Sikkim formally became India's 22nd state.

Green revolution and Operation Flood

Ø India's long-standing food crisis was resolved with greatly improved agricultural productivity due to the Green revolution. The Government sponsored modern agricultural implements, new varieties of generic seeds and increased financial assistance to farmers that increased the yield of food crops such as wheat, rice and corn, as well as commercial crops like cotton, tea, tobacco and coffee. Increased agricultural productivity expanded across the states of the Indo-Gangetic plains and Punjab.
Ø Under Operation Flood, the Government encouraged the production of milk, which increased greatly, and improved rearing of livestock across India. This enabled India to become self-sufficient in feeding its own population, ending two decades of food imports.Indian Emergency
Ø In 1974, the Allahabad High Court found Indira Gandhi guilty of misusing government machinery for election purposes.
Ø Opposition parties conducted nationwide strikes and protests demanding her immediate resignation. Various political parties united under Jaya Prakash Narayan to oust Mrs. Gandhi.
Ø In 1975, Mrs. Gandhi advised President Fakhruddin Ali Ahmed to declare a state of emergency under the Constitution, which allowed the Central government to assume sweeping powers to defend law and order in the nation. Explaining the breakdown of law and order and threat to national security as her primary reasons, Mrs. Gandhi suspended many civil liberties and postponed elections at national and state levels. Ø Indira's son and political advisor, Sanjay Gandhi was accused of committing gross excesses - Sanjay was blamed for the Health Ministry carrying out forced vasectomies of men and sterilization of women as a part of the initiative to control population growth, and for the demolition of slums, which left thousands of people dead and many more displaced.

The Janata interlude

Ø Indira Gandhi called for elections in 1977, only to suffer a humiliating electoral defeat at the hands of the Janata Party, an amalgamation of opposition parties.
Ø Morarji Desai became the first non-Congress Prime Minister of India. The Desai administration established tribunals to investigate Emergency-era abuses, and Indira and Sanjay Gandhi were arrested after a report from the Shah Commission.
Ø But in 1979, the coalition crumbled and Charan Singh formed an interim government. The Janata party had become intensely unpopular due to its internecine warfare, and the fact that it offered no leadership on solving India's serious economic and social problems.


Ø Indira Gandhi and her Congress (I) party were swept back into power with a large majority in January, 1980.
Ø But the rise of an insurgency in Punjab would jeopardize India's security.When Indian forces, undertaking Operation Bluestar, raided the hideout of Khalistan militants in the Golden Temple in Amritsar, the inadvertent deaths of civilians and damage to the temple building inflamed tensions in the Sikh community across India.
Ø The Government used intensive police operations to crush militant operations, but it resulted in many incidents of abuse of civil liberties.
Ø On 31 October 1984, the Prime Minister's own Sikh bodyguards killed her, and communal violence erupted in Delhi and parts of Punjab, causing the deaths of thousands of people along with terrible pillage, arson and rape.

Rajiv Gandhi administration

Ø The Congress party chose Rajiv Gandhi, Indira's older son as the next Prime Minister.
Ø Rajiv had been elected to Parliament only in 1982, and at 40, was the youngest national political leader and Prime Minister ever.
Ø Rajiv Gandhi initiated a series of reforms - the license raj was loosened, and government restrictions on foreign currency, travel, foreign investment and imports decreased considerably. This allowed private businesses to use resources and produce commercial goods without government bureaucracy interfering, and the influx of foreign investment increased India's national reserves.
Ø Rajiv improved relations with the United States, which increased economic aid and scientific cooperation. Rajiv's encouragement of science and technology resulted in a major expansion of the telecommunications industry, India's space program and gave birth to the software industry and information technology sector.
Ø In 1985, the Supreme Court of India ruled in favour of Muslim divorcee Shah Bano, declaring that her husband should give her alimony. Muslim fundamentalists in India treated it as an encroachment in Muslim Personal Law and protested against it. Gandhi agreed to their demands.[14] In 1986, the Congress (I) party, which had an absolute majority in Parliament at the time, passed an act that nullified the Supreme Court's judgement in the Shah Bano case.
Ø Rajiv’s decision of opening up of the gates of the Ram Janmabhoomi - Babri Masjid Gates for worship of the Ram Lala Idols at Ayodhya is believed by many to be an attempt at pacifying Hindus.
Ø India in 1987 brokered an agreement between the Government of Sri Lanka and the LTTE insurgency that had torn apart the island for over a decade.
Ø Rajiv sent Indian troops to enforce the agreement and disarm the Tamil rebels, but the Indian Peace Keeping Force, as it was known, became entangled in outbreaks of violence - ultimately ending up fighting the Tamil rebels itself, and becoming a target of attack from Sri Lankan nationalists. Thousands of Indian soldiers had ended up dying.
Ø VP Singh, who was the finance minister, was moved to the Defense ministry after he unearthed some scandals which made the Congress leadership uncomfortable. Singh then unearthed the Bofors scandal, and was sacked from the party and office
Ø Rajiv Gandhi's image as an honest politician was shattered when the Bofors scandal broke, revealing that senior government officials had taken bribes over defense contracts by a Swedish guns producer. He himself was later implicated in the scandal.
Ø VP Singh, together with some associates floated an opposition party named the Jan Morcha. Later, Janata Dal was formed by merger of Jan Morcha, Janata Party, Lok Dal and Congress (S), in order to bring together all the parties opposed to the Rajiv Gandhi government. A federation of the Janata Dal with various regional parties including the DMK, TDP, and AGP, came into being, called the National Front (India)

National Front

Ø National Front contested and won the elections and VP Singh went on to become the prime minister.
Ø V P Singh decided to implement the Mandal Commission recommendations of giving reservations to OBCs sparking widespread protest among the non-backward castes.
Ø His stay at the office was filled with problems.BJP pursuing its agenda wanted Ram Mandir at the Babri site.
Ø L K Advani, a senior BJP leader, started touring the northern states to garner support. Before he could complete the tour by reaching the disputed site in Ayodhya, he was arrested on Singh's orders on the charges of disturbing the peace and fomenting communal tension.
Ø This led to BJP withdrawing support from the government and consequently V P Singh lost the vote of confidence in the Lok Sabha.
Ø ChandraShekhar, V P Singh’s rival in the Janata Dal, broke away with his 60 MPs and the outside support of the congress formed the government.
Ø The alliance crumbled soon since congress accused the PM of spying on Rajiv Gandhi and resigned in 1991.


Ø On 21 May 1991, while Rajiv Gandhi was campaigning in Tamil Nadu on behalf of Congress (I), a Liberation Tigers of Tamil Eelam (LTTE) female suicide bomber killed him and many others, setting off the bomb in her belt by leaning forward while garlanding him.
Ø In the elections, Congress (I) won 244 parliamentary seats and put together a coalition, returning to power under the leadership of P.V. Narasimha Rao.
Ø This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalisation and reform, which has opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as traditional alignments by caste, creed, and ethnicity gave way to a plethora of small, regionally-based political parties.
Ø India was rocked by communal violence between Hindus and Muslims that killed over 10,000 people, following the Babri Mosque demolition by Hindu mobs in the course of the Ram Janmabhoomi dispute in Ayodhya in 1992.

Era of coalitions

Ø The Bharatiya Janata Party (BJP) emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without enough strength to prove a majority on the floor of that Parliament.
Ø Under Prime Minister Atal Bihari Vajpayee, the BJP coalition lasted in power 13 days since it could garner the required majority.
Ø With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal emerged to form a government known as the United Front. A United Front government under former Chief Minister of Karnataka H.D. Deve Gowda lasted less than a year. The leader of the Congress Party withdrew his support in March 1997 from the Deve Gowda government .
Ø Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister of a 16-party United Front coalition.
Ø In November 1997, the Congress Party again withdrew support for the United Front in the wake of the Jain commission report that DMK(a part of the united front) had tacitly supported LTTE.
Ø New elections in February 1998 brought the BJP the largest number of seats in Parliament (182), but this fell far short of a majority. On 20 March 1998, a BJP-led coalition government with Vajpayee again serving as Prime Minister came to power. On 11 and 13 May 1998, this government conducted a series of underground nuclear tests, prompting President of the United States Bill Clinton and Japan to impose economic sanctions on India

Into the 21st century

Ø In April 1999, the coalition government led by the Bharatiya Janata Party (BJP) fell apart, following withdrawal of support by the AIADMK, leading to fresh elections in September.
Ø In May and June 1999, India discovered an elaborate campaign of terrorist infiltration that resulted in the Kargil War in Kashmir, derailing a promising peace process that had begun only three months earlier when Prime Minister Vajpayee visited Pakistan, inaugurating the Delhi-Lahore bus service.
Ø Indian forces killed infiltrators, who included Pakistani soldiers, and reclaimed important border posts in high-altitude warfare. In the same year, India's population exceeded 1 billion.
Ø Soaring on popularity earned following the successful conclusion of the Kargil conflict, the National Democratic Alliance - a new coalition led by the BJP - gained a majority to form a government with Vajpayee as Prime Minister in October 1999.
Ø The NDA government's credibility was adversely affected by reports of intelligence failures that led to the Kargil incursions going undetected, as well as allegations that the Defence Minister George Fernandes took bribes over the purchase of coffins for soldiers who died in the battle.
Ø The Tehelka scandal exposed the BJP party chief taking unaccounted contributions in return for promised favours, and the CBI chargesheeted senior BJP leaders for inciting the demolition of the Babri mosque.
Ø In 2002, tensions increased over the Ram Janmabhoomi dispute when the Vishwa Hindu Parishad threatened to defy the government, vowing to perform a religious ceremony on the disputed site.
Ø 59 Hindu activists died returning from the site when a train carriage caught fire a month later, in Godhra, Gujarat. This sparked off the 2002 Gujarat violence, leading to the deaths of thousands of Hindus and Muslims. The BJP-led state government and its chief minister Narendra Modi were accused of not doing enough to stop Hindu mobs in attacking Muslims.
Ø . In January 2004 Vajpayee recommended early dissolution of the Lok Sabha and general elections. The Congress Party-led alliance won an upset victory in elections held in May 2004. Manmohan Singh became the Prime Minister. The Congress formed a coalition with socialist and regional parties, and enjoys the outside support of India's Communist parties. Manmohan Singh became the first Sikh to date to hold India's most powerful office.
Ø Singh has continued economic liberalization, although the need for support from Indian socialists and communists has forestalled further privatization. In the Indian General Election in 2009, the United Progressive Alliance formed by Congress(I) won a convincing 262 seats with Congress(I) alone winning 20

Hope it was useful. A very special thanks to Sushruth for putting up all of these and more. He has truly been a remarkable individual with his uncanny appetite for research.

Source files to be mentioned soon.
Re: GD-PI Gyaan sessions for 2010 season and beyond
by Prince Kumar - Wednesday, 12 January 2011, 11:06 AM

very informative!

IMHO..shouldn't this be on the home page under MBA articles..more people would access!

Re: GD-PI Gyaan sessions for 2010 season and beyond
by Manish Harodia - Thursday, 13 January 2011, 01:13 PM
  What Does Equity mean?

1. A stock or any other security representing an ownership interest.

2. On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the
retained earnings (or losses). Also referred to as "shareholders' equity".

3. In the context of margin trading, the value of securities in a margin account minus what has been borrowed from
the brokerage.

4. In the context of real estate, the difference between the current market value of the property and the amount the
owner still owes on the mortgage. It is the amount that the owner would receive after selling a property and paying
off the mortgage.

5. In terms of investment strategies, equity (stocks) is one of the principal asset classes. The other two are fixed-
income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and
return profile for an investor's portfolio.

The term's meaning depends very much on the context. In finance, in general, you can think of equity as ownership
in any asset after all debts associated with that asset are paid off. For example, a car or house with no outstanding
debt is considered the owner's equity because he or she can readily sell the item for cash. Stocks are equity because
they represent ownership in a company.

What Does Fiscal Deficit Mean?

When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings).
Deficit differs from debt, which is an accumulation of yearly deficits.

A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes
believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel
that governments should avoid deficits in favor of a balanced budget policy.

What Does Forex - FX Mean?

The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an
average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

There is no central marketplace for currency exchange; trade is conducted over the counter. The forex market is
open 24 hours a day, five days a week and currencies are traded worldwide among the major financial centers of
London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm or country
may participate in this market.

What Does Inflation Mean?

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power
is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the
excessive growth of prices to a minimum.

As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a
$1 pack of gum will cost $1.02 in a year. Most countries' central banks will try to sustain an inflation rate of 2-3%.

Ø What Does Deflation Mean?

A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused
also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the
side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an
economic depression. Central banks attempt to stop severe deflation, along with severe inflation, in an attempt to
keep the excessive drop in prices to a minimum.The decline in prices of assets, is often known as Asset Deflation.

Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories,
shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter
deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately
induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because
businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.

Deflationary periods can be both short or long, relatively speaking. Japan, for example, had a period of deflation
lasting decades starting in the early 1990's. The Japanese government lowered interest rates to try and stimulate
inflation, to no avail. Zero interest rate policy was ended in July of 2006.

Ø What Does Recession Mean?

A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial
production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two
consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP);
although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a

Recession is a normal (albeit unpleasant) part of the business cycle; however, one-time crisis events can often
trigger the onset of a recession. The global recession of 2008-2009 brought a great amount of attention to the risky
investment strategies used by many large financial institutions, along with the truly global nature of the financial
system. As a result of such a wide-spread global recession, the economies of virtually all the world's developed
and developing nations suffered extreme set-backs and numerous government policies were implemented to help
prevent a similar future financial crisis. A recession generally lasts from six to 18 months, and interest rates usually
fall in during these months to stimulate the economy by offering cheap rates at which to borrow money

Ø What Does Cash Reserve Ratio (CRR) mean?

The portion (expressed as a percent) of depositors' balances banks must have on hand as cash. This is a requirement
determined by the country's central bank, which in the U.S. is the Federal Reserve. The reserve ratio affects the
money supply in a country.

For example, if the reserve ratio in the U.S. is determined by the Fed to be 11%, this means all banks must have 11%
of their depositers' money on reserve in the bank. So, if a bank has deposits of $1 billion, it is required to have $110
million on reserve.

Ø What Does Statutory Liquidity Ratio (SLR) mean?

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of cash, or
gold or govt. approved securities before providing credit to the customers. Statutory Liquidity Ratio is determined
and maintained by the Reserve Bank of India in order to control the expansion of bank credit. Statutory Liquidity

Ratio or SLR refers to the amount that all banks require maintaining in cash or in the form of Gold or approved
securities. Here by approved securities we mean, bond and shares of different companies.

Statutory Liquidity Ratio is determined as percentage of total demand and percentage of time liabilities. Time
Liabilities refer to the liabilities, which the commercial banks are liable to pay to the customers on there anytime
demand. The liabilities that the banks are liable to pay within one month's time, due to completion of maturity
period, are also considered as time liabilities

Ø What Does Prime (Lending) Rate mean?

The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank's best
customers consist of large corporations. The prime interest rate, or prime lending rate, is largely determined by the
federal funds rate, which is the overnight rate which banks lend to one another. The prime rate is also important for
retail customers, as the prime rate directly affects the lending rates which are available for mortgage, small business
and personal loans.

Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank's best
customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be
charged to a customer who has a higher likelihood of defaulting on a loan.

Ø What Does London Interbank Offered Rate - LIBOR Mean?

An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank
market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered
average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between
overnight and one full year.

The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the
rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates
for less preferred borrowers are based. For example, a multinational corporation with a very good credit rating
may be able to borrow money for one year at LIBOR plus four or five points. Countries that rely on the LIBOR for a
reference rate include the United States, Canada, Switzerland and the U.K.

Ø What Do Repo and Reverse Repo Rate mean?

A repo or repurchase Agreement is an instrument of money market. Usually reserve bank (federal bank in U.S)
and commercial banks involve in repo transactions but not restricted to these two. Individuals, banks, financial
institutes can also participate in repurchase agreement. Repo is a collateralized lending i.e. the banks which borrow
money from Reserve Bank to meet short term needs have to sell securities, usually bonds to Reserve Bank with an
agreement to repurchase the same at a predetermined rate and date. In this way for the lender of the cash (usually
Reserve Bank) the securities sold by the borrower are the collateral against default risk and for the borrower of cash
(usually commercial banks) cash received from the lender is the collateral.

Reserve bank charges some interest rate on the cash borrowed by banks. This rate is usually less than the interest
rate on bonds as the borrowing is collateral. This interest rate is called ‘repo rate’. The lender of securities is said to
be doing repo whereas the lender of cash is said to be doing ‘reverse repo’.

In a reverse repo Reserve Bank borrows money from banks by lending securities. The interest paid by Reserve Bank
in this case is called reverse repo rate. Borrower of funds is called as seller of repo and lender of funds is called as
buyer of repo. When the term of the loan is for one day it is known as an overnight repo and if it is for more than one
day it is called a term repo. The forward clean price of bonds is set at a level which is different from the spot clean
price by adjusting the difference between repo rate and coupon earned on the security.

Manish Harodia
TG Pune
Re: GD-PI Gyaan sessions for 2010 season and beyond
by Manish Harodia - Tuesday, 18 January 2011, 06:55 PM

Ø What Does Purchasing Power Parity - PPP Mean?

An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.

The relative version of PPP is calculated as: S = P1/ P2


"S" represents exchange rate of currency 1 to currency 2

"P1" represents the cost of good "x" in currency 1

"P2" represents the cost of good "x" in currency 2

In other words, the exchange rate adjusts so that an identical good in two different countries has the same price when expressed in the same currency. For example, a chocolate bar that sells for C$1.50 in a Canadian city should cost US$1.00 in a U.S. city when the exchange rate between Canada and the U.S. is 1.50 USD/CDN. (Both chocolate bars cost US$1.00.)

Ø What Does Public private partnership mean?

Public–private partnership (PPP) describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. These schemes are sometimes referred to as PPP, P3 or P3. PPP involves a contract between a public-sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. In some types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer. In other types (notably the private finance initiative), capital investment is made by the private sector on the strength of a contract with government to provide agreed services and the cost of providing the service is borne wholly or in part by the government. Government contributions to a PPP may also be in kind (notably the transfer of existing assets). In projects that are aimed at creating public goods like in the infrastructure sector, the government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the private investors. In some other cases, the government may support the project by providing revenue subsidies, including tax breaks or by providing guaranteed annual revenues for a fixed period.

Ø What Does Economic Order Quantity - EOQ Mean?

An inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs. The full equation is as follows:  EOQ = sqrt (2SD/PI)

where :

S = Setup costs

D = Demand rate

P = Production cost

I = Interest rate (considered an opportunity cost, so the risk-free rate can be used)

The EOQ formula can be modified to determine production levels or order interval lengths, and is used by large corporations around the world, especially those with large supply chains and high variable costs per unit of production. Despite the equation's relative simplicity by today's standards, it is still a core algorithm in the software packages that are sold to the largest companies in the world.

Ø What Does Demand Elasticity Mean?

Responsiveness of the demand for a good or service to the increase or decrease in its price. Normally, sales increase with drop in prices and decrease with rise in prices. As a general rule, appliances, cars, confectionary and other non-essentials show elasticity of demand whereas most necessities (food, medicine, basic clothing) show inelasticity of demand (do not sell significantly more or less with changes in price). In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. Demand elasticity is important because it helps firms model the potential change in demand due to changes in price of the good, the effect of changes in prices of other goods and many other important market factors. A firm grasp of demand elasticity helps to guide firms toward more optimal competitive behavior. Elasticities greater than one are called "elastic," elasticities less than one are "inelastic," and elasticities equal to one are "unit elastic."

Demand elasticity is a measure of how much the quantity demanded will change if another factor changes. One example is the price elasticity of demand; this measures how the quantity demanded changes with price. This is important for setting prices so as to maximize profit.

When price elasticity of demand is elastic, the firm should lower prices, since it will result in a big uptick in demand, increasing your total revenue. When price elasticity of demand is inelastic, you should increase prices because there will be only a small decrease in demand, and again, total revenue will increase. When price elasticity of demand is unit elastic, changing the price will not change total revenue, since price and quantity will generally change in lock step with each other.

Ø What Does Cross Elasticity Of Demand Mean?

An economic concept that measures the responsiveness in the quantity demand of one good when a change in price takes place in another good. The measure is calculated by taking the percentage change in the quantity demanded of one good, divided by the percentage change in price of the substitute good:

Cross elasticity of demand is synonymous to "cross price elasticity of demand".

The cross elasticity of demand for substitute goods will always be positive, because the demand for one good will increase if the price for the other good increases. For example, if the price of coffee increases (but everything else stays the same), the quantity demanded for tea (a substitute beverage) will increase as consumers switch to an alternative. On the other hand, the coefficient for compliments will be negative. For example, if the price of coffee increases (but everything else stays the same), the quantity demanded for coffee stir sticks will drop as consumers will purchase fewer sticks. If the coefficient is 0, then the two goods are not related.

Ø What Does Cross Elasticity Of Supply mean

Supply elasticity is defined as the percentage change in quantity supplied divided by the percentage change in price. It is calculated as per the following formula:

Supply elasticity = % change in quantity supplied / %age change in price

The calculation of elasticity of supply is comparable to the calculation of elasticity of demand, except that the quantities used refer to quantities supplied instead of quantities demanded. Factors that influence the elasticity of supply include the ability to switch to production of other goods, the ability to go out of business, the ability to use other resource inputs and the amount of time available to respond to a price change.

Over a short time period, firms may be able to increase output only slightly in response to an increase in prices. Over a longer period of time, the level of production can be adjusted greatly as production processes can be altered, additional workers can be hired, more plants can be built, etc. Therefore, elasticity of supply is expected to be greater with longer periods of time.We would expect the supply elasticity of wheat to be very high as farmers can easily switch land that is used for wheat over to other crops such as corn or soybeans. On the other hand, an oil refinery cannot easily switch its production capacity over to another product, so low oil-refining margins do not reduce the quantity supplied by very much. Due to high capital costs, higher refining margins do not necessarily induce much greater supply. So the supply elasticity for oil refining is fairly low.

Ø What Does Breakeven Point - BEP Mean?

1. In general, the point at which gains equal losses.

2. In options, the market price that a stock must reach for option buyers to avoid a loss if they exercise. For a call, it is the strike price plus the premium paid. For a put, it is the strike price minus the premium paid. Also referred to as a "breakeven".

For businesses, reaching the break-even point is the first major step towards profitability.

Ø What Does Foreign Institutional Investor - FII Mean?

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. One of the major market regulations pertaining to FIIs involves placing limits on FII ownership in Indian companies.

Ø What Does Foreign Direct Investment - FDI Mean?

An investment abroad, usually where the company being invested in is controlled by the foreign corporation.

An example of FDI is an American company taking a majority stake in a company in China.

Ø What Does Brown Field Investment Mean?

When a company or government entity purchases or leases existing production facilities to launch a new production activity. This is one strategy used in foreign-direct investment.

The alternative to this is a green field investment, where a new plant is constructed.

Ø What Does Green Field Investment Mean?

A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees. This is opposite to a brown field investment.

Green field investments occur when multinational corporations enter into developing countries to build new factories and/or stores. Developing countries often offer prospective companies tax-breaks, subsidies and other types of incentives to set up green field investments. Governments often see that losing corporate tax revenue is a small price to pay if jobs are created and knowledge and technology is gained to boost the country's human capital.

Keep doing good !! We would upload stuff on ChIndia, Global Warming, Budgets et al in days to come. You can also put in your comments on the areas that you want us to cover. We would try, and not promise, covering it allsmile