Commerce Optional (UPSC-IAS)

👆🏻All students are advised to study CA Journal topic which is matching with Commerce Optional syllabus. @commerceoptional

👆🏻Cash flow

The terms ‘Investing activities’ and ‘Financing activities’ are defined in paragraph 6 of Indian Accounting Standard (Ind AS) 7, Statement of Cash Flows, notified under the Rules, as below: “Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.” “Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.” @commerceoptional

ILO Report Highlights 👆UPSC Commerce Optional Paper 2 of Industrial relations topic. Join🔜 @commerceoptional Also Join @Civilservicegurukul

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👆🏻 rating topics of paper 1. #Currentaffairs4commerceoptional @commerceoptional

current affairs for commerce optional

Zero Base Budgeting (ZBB) Zero Base Budgeting is a new technique of budgeting. It is designed to meet the needs of the management in order to ensure the operational efficiency and effective utilization of the allocated resources of a concern. @Commerceoptional Steps Involved in Zero Base Budgeting The following are the steps involved in Zero Base Budgeting: @Commerceoptional (1) No Previous year performance of inefficiencies are to be taken as adjustments in subsequent year. (2) Identification of activities in decision packages. (3) Determination of budgeting objectives to be attained. (4) Extent to which Zero Base Budgeting is to be applied. (5) Evaluation of current and proposed expenditure and placing them in order of priority. (6) Assignment of task and allotment of sources on the basis of cost benefit comparison. (7) Review process of each activity examined afresh. (8) Weightage should be given for alternative course of actions.

SIGNIFICANCE OF EXCHANGEABLE BONDS Exchangeable bonds are a good candidate for creating diversification in the portfolio. It provides a complete set of different risk and returns from the issuing company to the investors. Another attractive fact about these bonds is they provide some kind of inflation protection. When the share price of the underlying asset is below the exchange price, these bonds yield like a bond but when the share price is above the exchange price, they act like stocks. From the company’s point of view, issuing these bonds is done to sell a large portion of their holdings to another company. On selling its shares directly to the other company, the issuer dilutes their shareholders. It also affects the market repute. Doing this using exchangeable bonds will save these issues from arising. @Commerceoptional

Initial public offering Initial public offering is the process by which a private company can go public by sale of its stocks to general public. It could be a new, young company or an old company which decides to be listed on an exchange and hence goes public. @commerceoptional Companies can raise equity capital with the help of an IPO by issuing new shares to the public or the existing shareholders can sell their shares to the public without raising any fresh capital.

9. Growth of Derivative Transactions : Since June 2000, the NSE has introduced the derivatives trading in the equities. In November 2001 it also introduced the future and options transactions. These innovative products have given variety for the investment leading to the expansion of the capital market. 10. Insurance Sector Reforms : Indian insurance sector has also witnessed massive reforms in last few years. The Insurance Regulatory and Development Authority (IRDA) was set up in 2000. It paved the entry of the private insurance firms in India. As many insurance companies invest their money in the capital market, it has expanded. 11. Commodity Trading : Along with the trading of ordinary securities, the trading in commodities is also recently encouraged. The Multi Commodity Exchange (MCX) is set up. The volume of such transactions is growing at a splendid rate.

Reforms in Capital Market of India The major reforms undertaken in capital market of India includes:- 1. Establishment of SEBI : The Securities and Exchange Board of India (SEBI) was established in 1988. It got a legal status in 1992. SEBI was primarily set up to regulate the activities of the merchant banks, to control the operations of mutual funds, to work as a promoter of the stock exchange activities and to act as a regulatory authority of new issue activities of companies. The SEBI was set up with the fundamental objective, "to protect the interest of investors in securities market and for matters connected therewith or incidental thereto." * The main functions of SEBI are:- * To regulate the business of the stock market and other securities market. * To promote and regulate the self regulatory organizations. * To prohibit fraudulent and unfair trade practices in securities market. * To promote awareness among investors and training of intermediaries about safety of market. * To prohibit insider trading in securities market. * To regulate huge acquisition of shares and takeover of companies. @Commerceoptional 2. Establishment of Creditors Rating Agencies : Three creditors rating agencies viz. The Credit Rating Information Services of India Limited (CRISIL - 1988), the Investment Information and Credit Rating Agency of India Limited (ICRA - 1991) and Credit Analysis and Research Limited (CARE) were set up in order to assess the financial health of different financial institutions and agencies related to the stock market activities. It is a guide for the investors also in evaluating the risk of their investments. 3. Increasing of Merchant Banking Activities : Many Indian and foreign commercial banks have set up their merchant banking divisions in the last few years. These divisions provide financial services such as underwriting facilities, issue organising, consultancy services, etc. It has proved as a helping hand to factors related to the capital market. 4. Candid Performance of Indian Economy : In the last few years, Indian economy is growing at a good speed. It has attracted a huge inflow of Foreign Institutional Investments (FII). The massive entry of FIIs in the Indian capital market has given good appreciation for the Indian investors in recent times. Similarly many new companies are emerging on the horizon of the Indian capital market to raise capital for their expansions. 5. Rising Electronic Transactions : Due to technological development in the last few years. The physical transaction with more paper work is reduced. Now paperless transactions are increasing at a rapid rate. It saves money, time and energy of investors. Thus it has made investing safer and hassle free encouraging more people to join the capital market. 6. Growing Mutual Fund Industry : The growing of mutual funds in India has certainly helped the capital market to grow. Public sector banks, foreign banks, financial institutions and joint mutual funds between the Indian and foreign firms have launched many new funds. A big diversification in terms of schemes, maturity, etc. has taken place in mutual funds in India. It has given a wide choice for the common investors to enter the capital market. 7. Growing Stock Exchanges : The numbers of various Stock Exchanges in India are increasing. Initially the BSE was the main exchange, but now after the setting up of the NSE and the OTCEI, stock exchanges have spread across the country. Recently a new Inter-connected Stock Exchange of India has joined the existing stock exchanges. join @Commerceoptional 8. Investor's Protection : Under the purview of the SEBI the Central Government of India has set up the Investors Education and Protection Fund (IEPF) in 2001. It works in educating and guiding investors. It tries to protect the interest of the small investors from frauds and malpractices in the capital market.