Importance Of Financial Inclusion In The Indian Scenario

Importance Of Financial Inclusion In The Indian Scenario Gandhi had once had once remarked, Our cities are not India. India lives in her seven and a half lakh of villageà ¢Ã¢â€š ¬Ã‚ ¦.. (Gandhi 1966:288-89). Thus to build a strong India it becomes very necessary to strengthen and build its villages. The banking and financial services in our country had been limited to a section of elite population. Despite huge demand for these services the financial structure of such services has forever been very weak. The population in these regions have to depend on the informal sector like the local money-lenders for availing finance. Thus there arises the need for Financial Inclusion. By Financial Inclusion we mean the easy delivery of financial services to large sections of the unprivileged society. It also means availing loans to the disadvantaged society at affordable cost. HISTORY AND EMERGENCE IN INDIA The concept of Financial Inclusion can be traced back to the year 1904 when Co-operative Movement took place in India. It gained momentum when 14 major commercial banks of the country were nationalized in 1969 and bank scheme was introduced thereafter. Branches were opened in large numbers across the country and even in the areas which were previously being neglected and those which needed quick recovery to escape the viscous cycle of poverty. Even after all these measures even till date a sizable portion of the population of the country could not be brought under the fold of banking system. In India the credit structure is crumbling and the availability of funds to the needy and disadvantaged is very poor. There are only a meagre number of such banks which are actually functional and really fulfilling the aim of bringing about financial equality and stability in the system. There is an immediate need for increased interaction and greater participation from state, banks and SHGs. The enactment of the Regional Rural Banks Act in the mid 1970s was the first step toward Financial Inclusion. It had lead to the geographical expansion of the credits and has made financial services accessible to the rural poor. In India the financial coverage of the rural communities by the commercial banks and the regional rural banks is only 29% and only about 17 % by the long-term and short-term rural credit cooperative societies. It is rather more saddening to see the result of these financial institutions individually servicing the villages. Presently each branch office of the Scheduled Commercial Banks (SCBs) services only 20 villages and the Primary Agricultural Credit Societies up to 6.4 villages. These figures itself portray the disheartening condition of the financial structure in rural India and achieving Financial Inclusion seems like a distant dream. In fact, there is a severe gap in financial access which needs special attention. IMPORTANCE OF FINANCIAL INCLUSION IN THE INDIAN SCENARIO India ranks second in the world in terms of Financially Excluded Households. In India even today loans are not available to about 135 million households. According to a report in The Hindu dated 8th December, 2012 the Deputy Governor of The Reserve Bank of India Dr K. C. Chakrabarty had remarked, India needs strong measures for the financial inclusion of the poor and the marginalized. The main reasons for financial exclusion in India, from the demand side are lack of awareness, low income, poverty and illiteracy while from the supply side is distance from branch, branch timings, cumbersome documentation and procedures, unsuitable products, language, staff attitudes etc. Thus there is an immediate need to improve on the status of Financial Inclusion in our country and this has to start from the base levels. Financial Inclusion contributes to an all round development of the society. We can show that with help of a systematic diagram:- P.T.O Financial Inclusion fulfils some economics objectives and also some social and political objectives. The economic objectives includes equitable growth of the society which implies integrating everyone in the development process mobilization of savings towards the needy larger markets for financial systems so that loans are available to the unprivileged class easily While the Social and Political objectives comprised of poverty elevation for the welfare of the general people sustainable development programs to be implemented channelizing governments programs in the right direction Thus to bring about an all round development in the society we need to have a strong financial structure. It is only possible with both government interventions and also community participation. There has to be community indulgence at a very great extent. They have to come together and collaborate with the banks and take part in their initiatives to promote financial inclusion. There are innumerable loopholes which have to focus on and dealt with to bring about equitable growth. We now concentrate on two case studies which throw light on some of the issues discussed above. CASE STUDIES We now narrow down our study and concentrate on two case studies which will help us analyse the problems of Financial Inclusion in India: Case Study 1: The Economically Backward region of Jharkhand Case Study 2: The Progressive Ras village of Gujarat Case study 1: JHARKHAND The Reserve Bank of India being the apex bank in India had given guidelines to all the commercial banks to promote financial inclusion in rural India. We take up the case study highlighting the economically backward region of Jharkhand. Poverty in Jharkhand had had a prolonged chain and this could be escaped only through financial inclusion. The main reasons for it being A very dense population A very low rate of literacy- about 53.6% Extremely poor state with the National Average of people below the poverty line being 40.2% The senior level executives in RBI were worried about the extremely low performance of the state in rural areas in Jharkhand and thus a branch of RBI was setup in Ranchi. The commercial banks were given direction to promote financial inclusion. The commercial banks tried to promote financial inclusion in this region by taking into account some other channels as involving the Self-Help Groups (SHGs), Micro-finance Institutions (MFIs), Non-Commercial Banks as National Bank for Agricultural and Rural Development (NABARD), various Non- Governmental organizations, some Non- Banking Finance Companies (NBFCs), Co-operatives and Co-operative banks. Although a large chunk of the population in Jharkhand lives in rural areas the private banks have only 13% of the total number of branches in the rural areas. The commercial banks were very reluctant to open branches here as due to poverty, less demand for financial inclusion, insufficient manpower and inappropriate technology there were high chances of incurring losses. But it was thought to be the responsibility of the banks to induce into the people a sense of financial inclusiveness. It was Bank of India who was the first to come forward and served as a backbone of the public sector banks in the light of financial inclusion in Jharkhand. Bank of India set up 385 branches in Jharkhand. Bank of India had done a commendable job in Jharkhand in terms of number of branches it had opened keeping in view the highly dispersed and dense population of the country. The products offered were Kisan Credit Card, General Credit Card, loans to run micro-finance and micro-insurance. Also a workin g group was setup by RBI to internalise NGOs and SHGs as a potential intervention tool for doing banking business with the marginalised and poor. The NABARD too came up with a massive program called the SHG Bank Linkage Programme (SBLP). According to a report there were about 5265 new savings account which were opened through SHG interventions. Though the initiative seems to be a success at a glance, but the real picture differs. The SHGs and NGOs themselves were not financially and technically sound. For successful community participation it was required to train the individuals, give them basic financial education and acquaint them with modern technologies. Thus technical empowerment could have been enabled by the commercial banks by training and development practices of banking and financial risk management. They also needed financial support. Jharkhand being largely dependent on agricultural and related occupations led to high irregularity of income. This made situations worse as in the years when agricultural and related business did not perform well all steps taken to promote financial inclusion failed. Farmers in Jharkhand do not have access to formal finance for growing crops because of the high risk associated with it. Thus there was need for creating avenues of insurance trade for the farmer to participate in the process of financial inclusion. Development of mobile banking services can be a great way in improving the condition of financial inclusion in the state. Jharkhand having very poor rate of literacy most of the masses know no other language than their vernacular language and in such situations technology based devises like ATM machines do not serve the purpose and becomes a hurdle in the way of financial inclusiveness. Thus there was a need for the RBI and the commercial banks to take up the issue with more intensive research and proper handling. Improving and better monitoring of the commercial banks by reporting at specifies intervals, it should be made mandatory for banks have to undergo a statutory audit every year apart from the internal audit system that they posses and also assessing them on their achievements in the process of promoting financial inclusion. Thus a better planning and better approach towards things were required to achieve the aimed goal. Case Study 2: RAS VILLAGE IN GUJRAT The next study concerns the Ras Village in Gujarat. This village unlike that of villages in Jharkhand is a much more developed and progressive village. The Ras Village contributes much to the revolutionary Amul Co-operative movement in Gujarat. The village had a well-functional Government Community Health Centre and branches of public sector banks. According to a report the total deposit base was 250 million dollars on 31 March 2007 where Non- Resident Indians constituted 50 % of the banks deposit base. The above village was a pretty well off and a progressive village according to the Indian standards, where the dairy activity has helped to improve the living standards of the people. Ras village more or less had some kind of financial structure and was not totally absent as in the case of villages in Jharkhand. We now focus on the data regarding presence of bank accounts and availing credit facilities in these areas: Economic Research (NCAER) The above study shows that 75.2 per cent of the villagers have bank accounts and 26.7 per cent have availed credit. According to a report by the World Bank Rural Finance Access Survey (RFAS) of 2003 which indicated that on an average only 41 per cent of rural households have bank accounts and among that only 21 per cent have some access to formal credit avenues (Bapat, 2010). Keeping that as a benchmark we can say that the Ras Village is an Ideal village as the number of people availing loans is 26.7 per cent and 75.2 per cent villagers having a bank account is a striking number in itself. The customers had a high rate of satisfaction in holding the bank accounts. The customers perceptions were based on efficiency in the functioning of the banks, adequacy, timeliness, cost, security, convenience, staff and transactions Almost 66 per cent of the villagers were inclined towards future credit facilities. The villagers were urged upon taking cattle loans, business loans and also housing loans. There was clear indication of the villagers wanting to participate in rural credit and avail loans. There has been financial penetration up to a very extent and there was ample scope for further penetration. But there is another very important aspect which existed in the Ras village which lead to these the well-developed cooperative milk collection system. They were already at a stable condition as the community had come forward and formed the milk cooperative. The banks had collaborated with them which lead to the upliftment of the village. It was profitable for the banks to enter into an agreement with the clients and the village cooperative milk-collection centre. Not only the village concerned but the whole of Gujarat has developed very rapidly on all economics terms including banking. And to achieve this goal the community and the cooperatives banks have played a crucial role. There was a significant correlation between holding bank account and their income, education, asset holding status and living conditions. The villagers in this village were economically more or less stable with moderate asset holding and thus they could easily avail loans. COMPARISONS After having an extensive view into the case studies we get a contrasting picture of the two villages in India. On one hand we have Jharkhand which is one of the poorest states in India and we see a crumbling financial structure. While on the other hand we have Gujarat, which at one point of time had aimed at 100 per cent financial inclusion, though that remains unattained but it has been is financially stable and has achieved been called a progressive state. The case studies give us an in-sight into the reasons for such glaring disparity in the same country. We now try and systematically try to analyse it in a tabular form. JHARKHAND RAS VILLAGE, GUJRAT ECONOMIC CONDITIONS Extremely poor state with the National Average of people below the poverty line being 40.2% Mostly dependent on agriculture or related activities Banks unwilling to collaborate Farmers do not have access to formal finance because of the high risk associated with it Being a rich state with a stable financial structure Economically stable and well-off The well-developed milk cooperative which made the economy flourishing The total deposit base was 250 million dollars COMMUNITY PARTICIPATION The SHGs and NGOs had tried to bring about the community together People were economically viable and no access to formal finance They had no formal training or technical knowhow to participate in the interventions Community participation more or less absent There was already existing community participation in the form of milk cooperatives The people wanted to participate based on efficiency in the functioning of the banks, adequacy, timeliness, cost, security, convenience, staff and transactions. Almost 66 per cent of the villagers were inclined towards future credit facilities. ROLE OF BANKS Banks were not willing to open up branches due to the poor economic conditions Commercial banks came forward and started working with the SHGs, MFIs and NGOs. Bank of India was the first to take such initiatives It was profitable for the banks to enter into an agreement with the clients and the village cooperative milk-collection centre Already public banks had existing branches Most people were economically aware and active EDUCATION AND TRAINING People were illiterate No economic sense No technical knowledge Insufficient manpower and inappropriate technology due to lack of educated masses Unable to reap the benefits of Kisan Credit Card and General Credit Card People were already aware of the advantages of banks and formal credit and had some amount of economic sense Already existing communities and some amount technical knowhow INFERENCE Lead to financial exclusion and failure of the government initiatives Lead to Financial Inclusion and all-round development of the village CONCLUSION Empirical evidence shows that Financial Inclusion leads to Economic Growth. To have an inclusive growth we need to bring the under-developed regions of the country at par with the developed regions. The above case studies of Jharkhand and Gujarat are an example of glaring disparity in our country which can only be bridged through initiatives from the banks and the community as well. Banks should move beyond traditional products as deposits and credits and rather introduce insurance, mutual funds and introduce better schemes for financially secluded people and have better risk managements. Also establishment of a rural infrastructure is a prerequisite for financial inclusion. There should be programs to initiate more of community participation by starting vocational training for the rural youth and have an improved workforce. Commercial banks have to draw a clear line between sound and unsound practices and chalk out a financial inclusion strategy so that it does not give rise to subp rime crisis like situation. But we know that commercial banks always work with a profit motive. Thus the aim should be to enable the poor to get out of impoverished situations and in the process simultaneously enhance their own profitability. The dream of Inclusive Growth will not be complete until millions of micro-entrepreneurs are created across the country. All budding entrepreneurs have to face these challenges and find solutions. People working in the social sector should work for filling up the deficit existing in the economic and social arena. To sum up, Financial Inclusion is the road that India needs to travel toward becoming a global player. Financial access will attract global market players in India and that will result in increasing employment and business opportunities. Inclusive growth will act as a source of empowerment and allow people to participate more effectively in the economic and social process. ******************************

IBM: Corporate Level Strategy Essay

IBM operates primarily in a single industry using several segments that create a value by offering a variety of solutions that include, either singularly or in some combination, technologies, systems, products, services, software and financing. This may lead you to believe that IBM has adopted a corporate level strategy of concentrating on a single business unit, but this is only half the picture. For IBM there is not one general type of corporate strategy that best suits their needs, but a combination of both a concentration on a single business strategy as well as a vertical integration strategy. A single business unit strategy means that IBM is concentrating on competing successfully within the confines of a single business unit. An advantage of choosing such a strategy is that the IBM can focus its total and collective resources to dominating and becoming successful in this business area. If IBM were to attempt to pursue some other strategy such as diversification, they might spread their resources out too thin, thus inhibiting them from taking advantage of some other opportunities that may come about due to a lack of available resources. Another advantage to pursuing a single business unit strategy is that IBM is remaining within an area with which it has a great deal of competence and experience. This decreases the likelihood of IBM partaking in a venture that may be unsuccessful and it keeps IBM in an area where their existing capabilities and resources can contribute and add value. But concentrating on just one business area may not be enough and so as previously stated, IBM has also adopted a corporate level strategy that involves vertical integration. Vertical integration can be seen in the corporate level strategy of IBM in their acquisition of various inputs such as the LSG Group Inc., which offers services ranging from application development to information technology consulting. This is known as backward or upstream integration. Choosing a strategy such as vertical integration generally gives a company a competitive advantage by improving scheduling, by creating efficiency-enhanced assets, by protecting product quality and by enabling the company to build barriers to new competition. IBM operates in more than 150 countries worldwide and derives more than half of its revenues from sales outside the United States. IBM has adopted an international strategy with respect to how it plans to compete and operate globally. By adopting an international strategy IBM looks to create value on a global basis by transferring valuable skill and products to foreign markets where local competitors lack those skills and products. Although much of IBM’s revenues come from overseas sales, they tend centralize the majority of the decision-making and other company functions right her in the United States. This means that they first develop marketing and product decisions in the United States and then transfer what they have done in the United States to other countries. This does not mean that no adaptation was done at all but it does mean that any adaptation that may have been done was kept to a minimal. In many cases the modifications IBM may carry out with respect to its business decisions in a particular market may be due to the laws and policies in a particular country. IBM could also be forced to modify its business decisions in a certain country due to the economic and political changes in those countries and by macroeconomic changes, including recessions and inflation. An example of this would be when a weakness in the economy of Asia had an adverse effect on the companies business in 1998 and forced it to change its strategy with respect to that market while the countries economy got itself back together.

Road use charges should be introduced in the UK both for motorways and for urban areas

Whenever we hear today about the problems facing this country and how the government intends to solve them, arguably the three most commonly occurring points for debate on the government's agenda are education, the health system and transport. Transport often comes into focus when high profile incidences involving sub-standard public transport (most notably in recent times involving the railway network) are brought to light. And all this does is reinforce the reasons why many of us choose to use a car to travel in, rather than public transport. Due to the increasing need to use cars, our roads are becoming more and more congested. Now the government, in its position of trying to improve the situation, has to find a solution, which will at least ease the problem. Congestion arises when the volume of traffic exceeds road capacity. This reduces the speed of all vehicles and so increases the average time it takes to complete a particular journey. The congestion mainly occurs at peak times where the demand for the road is at its highest. Particularly when queuing in traffic jams, more people are using the roads, which increases the (marginal) cost of time to other people. Congestion occurs due to the fact that roads are a â€Å"nonexcludable† public good, i.e. no one is excluded from using the roads (based on the assumption that everyone can afford a vehicle, can drive a vehicle, and can afford the additional costs to run a vehicle.) By its definition, when a nonexcludable public good is provided, it affects the welfare of every person in the society. A public good is one where another individual using it will have no effect on the benefits received by others using it (i.e. the marginal cost of someone else consuming it is zero) and theref ore there is no competition for the service). Figure 1;The speed flow curve (Inverse relationship between the number of vehicles on a road and the average speed of vehicles) There are many causes of congestion, which all lead to some economic costs and therefore affect businesses and users of the roads. For a business the consequences of congestion are most likely to be incurred when transporting the goods and raw materials to and from factories and retail outlets. Congestion increases firms' costs, resulting in a lower comparable profit (to the value of profit without congestion) for the firm. Providing the price is inelastic these extra costs could be passed on to consumers in the form of higher market prices (whereby demand for the good is not too sensitive to a change in price). These extra costs can be incurred by either the opportunity cost of time (delays) or direct costs of extra fuel being burned travelling at lower speed. Figure 2: Supply and Demand during congestion for a price elastic good (Congestion costs shift the supply curve to the left, resulting in higher selling price and therefore lower quantity demanded) Supply curve with congestion charges Supply curve without congestion charges Demand curve Congestion may cause delays in delivery, which in turn may lead to various negative impacts on the business itself. For instance this may adversely effect the reputation of the business. Furthermore suppliers to the business may be delayed causing the firm to be less productive incurring unnecessary costs from staff becoming idle. These consequences are an adverse affect on the welfare of the other motorists, (i.e. people most likely become more irritated). Since there is a direct effect here of the actions of one person on the welfare of another person or persons in a way that is not transmitted by market prices, we have the definition of an effect that is called an externality. In economics, public goods and externalities are closely related and are often associated with efficiency problems. Thus this is part of the reason why our roads are â€Å"inefficient†. Congestion also causes the road network to become an impure public good. A public good is defined as one where another individual using it will have no effect on the benefits received by others using it (i.e. the marginal cost of someone else consuming it is zero) and therefore there is no competition for the service. An impure good is one where the consumption of the commodity is to some extent rival. When congestion occurs the use of the road network becomes competitive (especially during the rush hour) and therefore the good becomes impure. This allows the public good to be given a price and so allows schemes such as congestion charging and toll roads to be introduced. Governments across the world are introducing road charges with the goal of reducing road use and minimising the negative effects of road usage. An important decision that the government will take into consideration will be whether introducing road charges would have a negative impact upon the environment. In the capital the Mayor of London, Ken Livingston, is currently asking for the views of 300 groups likely to be affected by road charges to enter London. Despite a London report suggesting a 12% reduction in traffic, opposing parties believe it would cause chaos and adversely effect families and small businesses. Transport is a derived demand as it comes from the needs of the people (whether they are travelling to work, going shopping or meeting socially) and needs of businesses (transportation of goods and industrial materials). However the increasing demand for road use over the years has added to the number of vehicles on the road, and in turn, increases the damaging effects upon the environment. The obvious aim of introducing road charges for using motorways or entering urban areas in private vehicles are that fewer people will choose to do so, thus decreasing the harmful gas engine emissions as a result. Noise and sight pollution, along with air pollution, should also be seen as a result of reduced traffic and congestion. This would rely on the fact that roads have an elasticity that is either inelastic or elastic. The greater the elasticity (value) of these road charges would indicate higher price sensitivity in using the road in question. Establishing the elasticity will enable us to identify the extent to which the environment will benefit from a reduction in pollution (air, gas and noise). From a report by Button (1993) the ‘trip type' significantly affects the price elasticity. For instance travelling to urban areas for shopping purposes has a high elasticity, so if road charges become applicable it is likely that fewer people will decide to make the journey using private vehicles. From an environmental perspective fewer cars entering these urban areas will reduce congestion and vehicle pollution levels. When looking into the decrease of CO emissions for particular areas, such as Hereford as shown above, this illustrates the dramatic reduction in air pollution levels when a charge is applied. This does however depend on price elasticity of demand for the road. This is in comparison to the minimum elasticity for urban commuting (travelling to work) which is much lower. Any road charges imposed on these people will have a minimal effect, as it is more essential for them to travel into the urban area. An additional advantage of road charges is the extra revenue that would be generated through payment of those people who continue to use the particular (charged) road. This has seen positive results in Norway where the funds collected are being used to support the successful public transport areas of Oslo and Trondheim. The biggest environmental concern that road charges are associated with, specifically with motorways, is the likelihood that car drivers would take alternate routes (not charged) such as country roads. These roads that were previously quiet would then be subjected to noise and gas emissions as well as congestion problems. This is an example of the substitution effect as both the main roads and the rural roads could satisfy the needs of the public. The introduction of payment for using the main roads would result in an increase in the quantity demanded of the substitute, that is the rural roads where no charges are being imposed. How elasticity effects the demand for motorways with/without alternative routes (Motorways without alternative routes) (Motorways with alternative routes) From an environmental perspective road charges should be introduced for the vehicles entering the urban areas. This is because there is significant evidence that motor vehicle usage will drop significantly (as shown in the Button 1993 table). The additional revenue raised can be used to fund the much-needed public transport services. Therefore those who will no longer use their own private vehicles will potentially benefit from an improved transport service. Evidence showed that those who continue to travel into the urban areas using private vehicles are also more satisfied if the money they are charged goes into improving public transport (as shown in the MORI diagram). For motorways the decision from an environmental perspective is split between those motorways that have alternative routes and those that do not. On those motorways with possible alternative routes the disadvantages (such as the possible movement of traffic as opposed to reduction) outweighs the potential benefit of the additional revenue. Where alternative routes are unavailable road charges are appropriate as the disadvantages stated above and in the report are much less of a problem. Revenue generated from these charges can then help urban areas with the possible improvement of public transport (like the Norwegian example). If roads were a â€Å"typical† competitive commodity, supply and demand would determine its price and an organization or business would own it. However there isn't a market for roads, and (in places where there are no toll systems in place) people can use the roads for free (i.e. its price is treated as if it was zero). Added to the fact that no one actually owns the roads (the government only has a requirement to maintain them), we have a demand for the usage of the roads by the public, but a failure of a market to emerge. Therefore there is no mechanism to ensure that the resource of roads is used efficiently. Therefore if someone owned the roads and could charge a price for their use, a market would emerge leading to an efficient use of the commodity, because the price reflects the value for alternative uses. Thus through the understanding of how a road is economically defined and the fact that at the moment, it is economically â€Å"inefficient†, a measure has to be taken. Therefore we will now explain using the defining economic principles why road use charges should be introduced for motorways and for urban areas. Arguably, though, the notion of congestion charges is more readily available to be implemented than road tolls, but the economic principles that should guide the design of this policy towards taxing and charging road users also applies to road tolls. The aim of the policy is to find an equilibrium position, where the marginal cost of using the resource is equal to the marginal cost of providing the resource. Figure 4: The equilibrium position and the effect of road charges The graph is labelled with â€Å"level of traffic† on the x-axis and â€Å"generalised cost of driving† (this means that the generalised costs are time and money spent on making the journey) on the y-axis. The first line drawn in was the demand curve (D), which is also the marginal benefit (MB) curve, (which is a straight line). The easiest way to describe it's negative gradient is as the number of people using the road increases, the marginal driver will have a lower benefit from the road than the previous one. There are two costs curves to be added to the diagram. The private marginal costs (PMC) are the direct costs to the driver. The PMC curve is also the supply curve (S). It is an upward sloping curve because with low traffic densities, the only cost to the driver is petrol. However as levels of traffic increase, congestion increases, and thus the driver incurs time costs as well. The social marginal costs (SMC) has the same base as the PMC (i.e. petrol costs) but as traffic increases, not only does it represent the time cost to that one particular driver, there is also the time costs that each driver imposes on every other driver. As is to be expected, at the moment, drivers act according to their PMC curve and the level of traffic on the road increases to the point (Xo), where the PMC is equal to the MB. Thus as the economic theory states, we are at a level of traffic above the social optimum, because the social optimum occurs when the SMC is equal to the MB. This is shown at the point X*, which is the social optimum and the optimal level of traffic. To get the level of traffic reduced from Xo to X*, we have to impose an extra charge or tax â€Å"P† (= P*-Po). This is referred to as the Pigouvian tax amount. This amount (P) forces the road user to take into account the costs of the externality that they are generating, and thus induces them to operate at the efficient level. Since this â€Å"tax† is a congestion charge, it should only be imposed where congestion arises, and the level of charge should be directly related to the amount of congestion. Therefore the inner cities (i.e. urban areas) and motorways, having high levels of traffic, should have higher charges than areas with low levels of traffic. Traffic imposes a cost on society over and above the PMC. To achieve the socially optimal solution, these costs should be passed on to the driver. In doing this, only those drivers who were willing to pay society for the externalities they cause would use the road network. Thus levels of traffic would fall to the optimal output level, reducing congestion and pollution in the desired areas of urban areas and the motorways. It could be argued that if drivers were charged for the delays and road congestion they impose on one another, some of them would arrange to travel at different times, by different means e.g. rail and bus, or arrange to use different routes where road use charges can be avoided completely. There are various technological methods of charging for road uses. The simplest method is buying a license to enter a zone at certain times. The license, like a tax disc, would be prominently displayed with traffic wardens policing the system. However this would mean that only people parked in these zones would get checked; it would not include people just driving through them. To do this, traffic wardens would somehow have to physically stop cars and charge them for entrance into the area. To set this up in the UK would be very difficult with our complicated network of motorways, urban and rural roads and actually stopping cars would cause more congestion rather than reducing it. Another method that uses the new technology of electronic tolls/beacons, no longer requires motorists to halt at tollbooths. As motorists drive past these tollbooths, the toll registers the electronic number plate and sends a signal to a recording computer. This is a very direct way to charge the amount specific to the road and to the time of day with the amount due being deducted from their bank account. However, this would infringe on privacy rights, as it would enable people to derive individuals' locations. Hence the use of smartcards would be more preferable like the method used in Hong Kong. The driver inserts a prepaid card, like a telephone card, into the electronic number plate and payments are debited from it when a tollbooth is passed. Only in a case where the card runs out of credit do the central computer monitors start charging directly for road use. The installation of electronic technology would have the drawbacks of being time consuming and very costly. Not only is there the construction of tollbooths, the installation of smartcards on every single car, but maintenance as well. A type of security system would also be needed to prevent free riders1, for example they could remove the smartcard or tamper with it. A method of overcoming this would be the use of cameras on each booth to capture an image of the license plate if a smart card was not detected. The most technical method, and therefore probably the most expensive, would be satellite car tracking technology. This uses existing Global Positioning System (GPS) satellites to track vehicles via electronic black boxes fixed to the dashboard of all vehicles. The problems associated with using satellites are similar to that of the above; that is the infringement on privacy rights and costs of setup and maintenance. However one possibility with this method is that it can also be used in conjunction with locating stolen cars. From a technical point of view smartcards seem to be the most sensible option. Although it would be more costly than just buying licenses, this method would lead to less congestion, as there is no stopping to enter the areas being charged. It is less expensive than using satellites and would not infringe on privacy rights. However there are difficulties and limitations with implementing any of these road use charging methods; the general public will have to be educated in the use of them, which will be quite complicated due to different regions and the specific times of the day having varying charges. The aim of this report was to analyse the argument that as elsewhere in the world, road charges should be introduced in the UK, both for motorways and for urban areas. On addressing the argument the environmental and the consequential factors of congestion needed to be considered. On considering the environmental factors the conclusion is that the reduction in pollution levels would only occur if the road charges reduced private road use and increased the use for public transport (i.e. there were no alternative routes that people had switched to avoid the charges). However a reduction in congestion on motorways and urban areas could certainly improve a firm's economic profit as the investigation into consequences of congestion revealed. Having decided the obvious need for charges with the economic principles supporting this, whether the application of schemes is technically possible became important. For this factor the smartcard road-charging scheme emerged as the best option. On bringing all these points together road charges are both necessary and feasible for UK motorways and urban areas. Except by environmental perspectives where additionally there have to be few alternative routes, thus preventing people congesting other roads and avoid payment.

10 Facts About Ribonucleic Acid (RNA)

RNA or ribonucleic acid is used to translate instructions from DNA to make proteins in your body. Here are 10 interesting and fun facts about RNA. Each RNA nucleotide consists of a nitrogenous base, a ribose sugar, and a phosphate.Each RNA molecule typically is a single strand, consisting of a relatively short chain of nucleotides. RNA can be shaped like a single helix, a straight molecule, or may be bet or twisted upon itself. DNA, in comparison, is double-stranded and consists of a very long chain of nucleotides.In RNA, the base adenine binds to uracil. In DNA, adenine binds to thymine. RNA does not contain thymine — a uracil is an unmethylated form of thymine capable of absorbing light. Guanine binds to cytosine in both DNA and RNA.There are several types of RNA, including transfer RNA (tRNA), messenger RNA (mRNA), and ribosomal RNA (rRNA). RNA performs many functions in an organism, such as coding, decoding, regulating, and expressing genes.About 5% of the weight of a human cell is RNA. Only about 1% of a cell consists of DNA.RNA is found in both the nucleus and cytoplasm of humans cells. DNA is only found in the cel l nucleus.RNA is the genetic material for some organisms which dont have DNA. Some viruses contain DNA; many only contain RNA.RNA is used in some cancer gene therapies to reduce the expression of cancer-causing genes.RNA technology is used to suppress the expression of fruit ripening genes so that fruits can remain on the vine longer, extending their season and availability for marketing.Friedrich Miescher discovered nucleic acids (nuclein) in 1868. After that time, scientists realized there were different types of nucleic acids and different types of RNA, so there is no single person or date for the discovery of RNA. In 1939, researchers determined RNA is responsible for protein synthesis. In 1959, Severo Ochoa won the Nobel Prize in Medicine for discovering how RNA is synthesized.