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The GST (Goods and Service Tax) came into effect in India on 1st July, 2017.

It was proposed by the Kelkar Task Force on Implementation of the Fiscal Responsibility and Budget Management (FRBM) Act in July, 2004.

GST is an indirect tax used in India on the supply of goods and services.

GST is comprehensive because it has replaced almost all indirect taxes like excise duty, entertainment tax, entry tax, etc.

GST is classified as follows :

• Central Goods and Service Tax (CGST) : It is a tax levied on interstate supplies of both goods and services by the central government which will be governed l by CGST Act.
• State Goods and Service Tax (SGST): It is received by the state in which the goods and services are consumed and not by the state where they are manufactured.
• Integrated Goods and Service Tax (IGST) : It is a tax levied on all interstate supplies of goods and services which will be governed by the IGST Act.

Benefits of GST :

• Comprehensive tax base with nation wide coverage of goods and services.
• Boost to foreign investments and export.
• Encouragement to manufacturing ‘Make in India’ campaign.
• Improvement in investment atmosphere in a country.
• Tax system in a country simplified.
• Generating more employment and poverty eradication.

Surplus Budget: 

1. A Surplus Budget is that type of budget in which the estimated revenue is greater than the estimated expenditure. 

2. Government raises tax revenue which is more than what is required for meeting the expenditure. 

3. Surplus budget would lead to reduction in aggregate demand. 

4. It is suitable for families and not favoured for government.

5. The policy of Surplus Budget would lead to unemployment and recession in the economy.

Balanced Budget:

1. Balanced Budget is a type of budget in which the estimated revenue of the government is equal to estimated expenditure of the government. 

2. Government raises revenue to such an extent which is just sufficient to meet the expenditure. 

3. Balanced budget would not affect the aggregate demand in the economy. 

4. It is not possible to introduce a balanced budget under present circumstances.

5. The balanced budget policy is called ‘Sound Finance’ where the government performs only minimum function.

Obligatory functions of Government:

1. Obligatory functions are those functions which must be performed by government, by making adequate provision of resources. 

2. Obligatory functions are given first priority, as they are compulsory functions. 

3. Obligatory functions are mainly performed by public authority for the protection of their citizen.

Optional functions of Government:

1. Optional functions of government are those functions which may be undertaken by government if funds permit.

2. Optional functions are given second priority, as they are called discretionary functions. 

3. Optional functions are performed by central, state and local government for promoting economic activities and social welfare.

Tax revenue:

1. Tax revenue refers to revenue received by the government through various taxes. 

2. Tax revenue comes from direct tax, i,e. income tax, wealth tax and indirect tax, i.e,, G.S.T. 

3. Tax is a major source of revenue to the government.

4. Tax revenue particularly direct tax is collected to reduce economic inequality.

Non-tax revenue:

1. Non-tax revenue refers to revenue received by the government from various sources, other than taxes. 

2. Non-tax revenue comes from fines and penalties, fees, gifts, grants, donations, borrowings, special levy, etc. 

3. Non- tax revenue is not a major source of revenue to the government. 

4. Non-tax revenue, particularly special levy, fines and penalties, etc. are collected to discourage the citizens from violating the law.

Correct option: (2) a, b and c

Correct option: (4) a, c and d

Correct option: (1) a, b and d

Revenue Budget: 

1. Revenue Budget consists of 

(1) Revenue Receipts 

(2) Revenue Expenditure 

2. It explains how revenue is generated by government and how it is allocated among various expenditure heads. 

3. Revenue receipts consists of 

(1) Tax Revenue 

(2) Non-Tax Revenue

4. Revenue expenditure includes developmental and non – developmental expenditure of Central Government. 

5. Revenue Receipts do not create any liability of the government. 

6. Revenue expenditure does not lead to the creation of assets.

Capital Budget:

1. Capital Budget consists of 

(1) Capital Receipts 

(2) Capital Expenditure 

2. It deals with the capital aspect. 

3. Capital receipts consists of 

(1) Borrowing 

(2) Recovery of loans

(3) Disinvestment, small savings 

4. Capital expenditure includes expenditure on land and building machinery, investment in shares, loans granted by Central Government to State. 

5. Capital receipt create a liability of the government. 

6. Capital expenditure leads to the creation of assets.

wrong pair: (2) – b

The Women’s Indian Association was formed in Madras.

Government Revenue (income):

1. Government income refers to the revenue of the government from different sources including tax revenue non-tax revenue, administrative revenue etc.

2. E.g. Tax revenue including Direct and Indirect Tax. 

3. Non-tax revenue include profit from government enterprise administrative revenue like fees, fines, penalties. 

4. Generally government income results in transfer of purchasing power from people to government. 

5. Surplus income with government indicates sound financial background.

Government Expenditure:

1. Government expenditure refers to the expenditure by government to perform various functions and duties. 

2. E.g. Revenue expenditure on health, education, defence and administration. 

3. Capital expenditure on roads, railways, dams, machinery and public enterprise.

4. Government expenditure leads to transfer of purchasing power from government to people. 

5. Massive expenditure indicates more welfare to people.

wrong pair: (4) – d

1. Excise duty

2. Labour expenditure

3. Public park

4. Wealth tax

5. R.B.I.

6. Zero budget

7. Depression

8. Social unrest

9. Donations

10. Registration fees

(a) Japan

(b) Spain

(c) Russia

(d) France

Meghaji lokhande is recognised as the Father of the Indian Workers’ Movement.

Concept: Fine and penalty

Explanation : The government imposes fines and penalties on those who violate the laws of a country.

Traffic police charges fine and collects money for violating traffic rule.

The objective of taking fine is to discourage the citizens from violating the laws framed by government.

Concept: Disposable Income

Explanation : Disposable income refers to income which remains with a person after deducting income tax from total personal income.

So, Disposable Income = Total Personal Income – Direct Taxes (income tax) It indicates actual spending capacity of a person.

Every person is legally bound to pay income tax because it is compulsory to the government.

The Philosopy of Management F.W. Taylor.

Concept: External Debt 

Explanation : When the government borrows from foreign government or international organisations like IMF, World Bank, etc., it is known as external debt.

Government needs to raise loan for investing in developmental project of a country.

Mumbai Metro Train is a project which require huge investment.

So, Government of India takes loan from World Bank.

1. Industrialisation of India had started during the second half of the 19th century. 

2. Shashipad Banerjee and Narayan Meghaji Lokhande organised workers at local level and made efforts to solve their problems. 

3. Narayan Meghaji Lokhande formed the mill workers union known as ‘Bombay Mill Hands Association’ in 1890. 

4. Due to his efforts, the workers started getting weekly holiday on Sunday from 10 June, 1890. 

5. This was the beginning of organised movement in India.

Thus, his contribution to the working-class movement was so valuable that he is described as ‘Father of Indian Workers Movement’.

22nd April is celebrated as Earth Day all over the world.

Universal Application

(c) Maximum output

Espirit de corps

Formal line of authority from highest to the lowest ranks are known as scalar chain Principle. It should be followed by all mangers as well as subordinates.

Espirit de corps

Principle means a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.

It is nothing but the spirit of cooperation. Worker should work in team and develop a sense of oneness and should have mutual confidence and understanding.

• Activities of management have been carried out since centuries. The Kings and rulers have been using several elements of management in managing their reigns.
• Even during those times strategies were made for wars, building forts, training soldiers, managing the kingdom, water management, agriculture, etc.
• One can see systematic use of management policies and war strategies during the rule of Chandragupta Maurya and Chhatrapati Shivaji.
• As, the world evolved, various management gurus came into picture. These management gurus, thinkers, ideologists and authors have time and again given new principles through evaluation and reconsideration of the concept of management.
• Thus, the history of concept of management is very ancient and has been- changed periodically.
• These people have contributed to the modern day management. Frederik Taylor to Henri Fayol, Gilbreath, Max Weber, Chester Barnard, Peter F. Drucker and C. K. Prahalad played an important role in rendering various management principles to make it as per the era.
• Thus, management is not a modern day term. It existed even during the most ancient periods however, it has ever-evolved with time.

Science is not rule of thumb.

To develop attitude, behavior and personality of workers.

Henry Fayol.

Insecurity in job always affects adversely on the efficiency of employees.

Unity of direction.

The total number of principles contributed by Fayol is 14.

Universal Applicability

Time study means scientific study being done for the time required to complete certain part of task. The time decided to finish this work in normal circumstances, is called standard time.

Unity of command means that employees cannot follow orders from more than one superior. It means that the employees should get order from only one superior for any job or activity.

The principles, opinions and thoughts given by several management gurus are together known as management thoughts.

Centralisation means concentration of powers and authorities at a specific position.

Unity of command

Authority is the right to give order and obtain obedience. Responsibility means accountability which is the result of authority. There should be a balance between these two.

Meaning of principle of management:

• Rules and principles formed in business unit with respect to human behaviour for achieving of goal easily are called principles of management.
• The principles of management work as a guide for the managers.
• It should be well noted that the principles of the management are not the rules. They are only the sum and substance of the assumptions, traditions and experiences.
• These principles lay a strong foundation for the success of a business unit.

Concept:

• Management is the combination of art and science.
• Every science is based on some underlying principles, so is management. However, the principles of management are not as rigid as the pure science, but are quite flexible.
• The principles of management have direct relationship with the human behaviour. Since they are related to human behaviour there is a scope of improvement as and when human behaviour evolves.
• Human behaviour and the technology keep on changing. As a result, the principles of management must also be changed to adapt with the new changes.
• Principles of management are the detailed and perfect guideline for making decisions and their implementation.
• For example, through these principles the unit can increase the enthusiasm of the employees by giving them transfers, promotions etc.

Principles of management are the statements of fundamental truths which provide guidelines to the managers for making decisions, taking actions and solving various problems systematically.

Centralization means making the power in the hands of one or few. Decision making powers among more persons are called decentralization.

Responsibility means accountability which is the result of authority.

Centralization should be adopted in the organization where the size of the organization is small.

It is possible to divide any work into small jobs called division of work.

Management principles are universally applicable as they applicable to all types of organisations. Irrespective of the type or size.

1. Scalar Chain:

a. Meaning of Scalar Chain: It refers to a formal line of authority which moves from highest to the lowest ranks in a straight line.

b. Fayol’s Opinion: This chain must be followed in a strict manner. It means each communication must move from top to bottom and vice versa in a straight line. The important condition here is that no step (post) should be overlooked during communication.

c. Utility: Due to more clear system of authority and communication, problems can be solved faster.

d. Gang Plank: It is the exception of the principle of scalar chain. This concept was developed to establish a direct contact with the employee of equal rank in case of emergency to avoid delay in communication.

2. Harmony, not discord: As per this principle, such as atmosphere should be created in the organisation that labour (the major factor of production) and management consider each other indispensable. Taylor has referred to such a situation as a ‘Mental Revolution’. Taylor firmly believed that the occurrence of a mental revolution would end all conflicts between the two parties and would be beneficial to both of them.