What is Money, anyway!

Name:

class:

level 2
Needs & Wants 3
The 2*2 Matrix 7
The MoSCoW Method 12
Maslow’s Hierarchy of Needs 14
Charity: The Power of Giving 18
Budgeting 22
Banking: Revisited 30
Reserve Bank of India 46
PMJDY 49
Grievance Mechanisms for Banks 53
Interest 55
Inflation 60
Loans 64
What is Trade 68
What is a Bill or Memo 89
Pricing 95
Foreign Exchange 102
Consumer Awareness & Protection 111
Introduction to Investment 123
Tax 127
Indirect Taxation: GST, VAT & Customs Duty 129
Cybersecurity: Password Hack 134
 3

Quick Revision:
In Level 1, we explored the basic difference between needs and wants:
Needs are essential for survival, like food, clothing, and
shelter. They are things you can’t live without.

Wants are things that make life more enjoyable or

comfortable but are not essential, like gadgets, branded
clothes, or dining out.
Learning to differentiate between needs and wants helps us make smarter spending
decisions and manage our money better.

The 3-Step Framework

To decide whether something is a need or a want, we can
use this simple 3-step framework:

1. Assess The Urgency :

Ask yourself, "Do I need this immediately, or can it wait?"
Example: If your family’s refrigerator has stopped working, it’s a
need to replace or repair it quickly because it’s essential for
storing food. But if your family wants to upgrade to a newer
model with advanced features like a touchscreen, that’s a want
and can wait until it fits within the budget.

2. Evaluate Consequences :
Consider what will happen if you don’t buy it. Will it
affect your daily life or is it just a desire?
Example: Not having a lunchbox might disrupt your
school day (need), but not owning a new game won’t
change much (want).
 4

3. Consider Costs :
Check if you can afford it within your
budget. If it’s too expensive or will strain

OR
your savings, reconsider.
Example: If you want to buy a bicycle that
costs ₹10,000 but you only have ₹6,000
saved, you have two choices: either settle
for a simpler bicycle within your budget or
wait for a few months to save the wait for a few
additional ₹4,000 to buy the one you months to save the
really want. This way, you balance your additional ₹4,000
financial situation without overspending.

The 30-Day Rule

Sometimes, we feel like we must have something right away. The 30-Day Rule can help:
Before buying a "want," wait for 30 days. If you still feel it’s
necessary after that, you can consider buying it.
Example: You see a new backpack in your favorite color.
Instead of buying it immediately, wait 30 days. Often, you
might realize you don’t need it, saving both money and regret.

Understanding needs and wants is a skill that helps us make better

decisions with money. When you follow the 3-step framework and
use the 30-Day Rule, you’re less likely to waste money on things
you don’t truly need!

If you "want" Wait for 30 days

before making the
to buy something
purchase

If you still need After

it, buy that thing 30 days

#FinSaarthi
Forgot about it or
Don't need it
Then Money Saved!
 5

Objective: To help students understand the subjective nature of needs and

wants, showing how personal interests and hobbies influence and change the
categorization of items as needs or wants. It illustrates that what might be a
necessity for one person could be a luxury for another, based on their unique
preferences and lifestyles.

Case 1: Aarav's Dream Room Case 2: Riya's Dream Room

Aarav is a 12-year-old aspiring Riya, a 13-year-old aspiring artist,
astronomer. His dream room is a has a room designed to inspire her
reflection of his love for the stars. creativity. Her room features an
The walls are adorned with a space- artist's corner with an easel, paints,
themed wallpaper. The centerpiece is brushes, and canvases. A dedicated
a high-powered telescope by the wall space is left blank for her mural
window. His room also includes a projects. For relaxation, she has a
comfortable study desk with a cozy reading nook with a plush
computer, primarily used for his armchair and a small bookcase
astronomical research and school holding art books. Her room also
assignments. For his leisure, there's a includes a simple bed, a basic
gaming console, where he plays wardrobe, and a study desk for her
space exploration games, and a shelf schoolwork. Like Aarav, she has a
full of various science fiction and computer, mainly used for browsing
astronomy books. Additionally, there art tutorials and watching drawing
is a simple bed and a basic wardrobe. videos. Additionally, Riya has a digital
Interestingly, there's also a digital art art tablet, which is central to her
tablet, mostly unused, as Aarav digital artwork creations and design
prefers exploring the skies over experiments.
drawing.
 7

Priortising Needs & Wants

You may have identified multiple needs and wants for yourself, but often, money is
limited. This means you need to carefully decide which need or want to prioritize. To help
with this, we use the 2x2 Matrix, a simple framework that helps you determine what to
address first and what can wait.
Whenever you face multiple expenses, ask yourself:

Is this important?
Is this urgent?

Plot your expenses on the matrix and address them based on their category. This
approach helps you make thoughtful decisions, ensuring that you meet your needs while
managing your wants wisely.

Here's how it works:

IMPORTANT NOT IMPORTANT

URGENT

DO IT NOW ! PLAN IT FOR LATER,

(When your budget allows)
URGENT

BUDGET IT
NOT

AVOID OR SKIP IT
OVER TIME
 10

Objective: This activity is to help you understand how to prioritize needs

and wants using the 2x2 Matrix.

Read the scenarios below and decide which category (Urgent & Important, Urgent but
Not Important, Important but Not Urgent, Not Important & Not Urgent) each situation
fits into. Write down your answers and explain your reasoning.

Scenario 1: Sneha (Student)

Sneha’s current backpack has a broken strap, making it impossible to carry her
books to school. She urgently needs a replacement to continue her studies without
disruption. What should she do?

Scenario 2: Arjun (Traveler)

Arjun is planning a hiking trip in two weeks and wants a durable backpack to carry
his essentials. However, he can manage with his current bag for now, as it’s still
functional. What should he do?
 12

We have learned the 3-Step Framework, 30-Day Rule, and 2x2 Matrix to manage needs
and wants effectively. These tools help you decide what to buy, delay, or skip.
The MoSCoW Method adds clarity by categorizing needs and wants based on
importance and urgency. It ensures thoughtful spending by balancing essentials with
future goals and indulgences.
Having wants is a beautiful part of life, but the key is knowing which to prioritize and
when—this is where the MoSCoW Method excels.

How the MoSCoW Method Works:

The MoSCoW Method is an acronym that stands
for Must Have, Should Have, Could Have, and
Won’t Have, helping you prioritize expenses
based on their necessity.

1. Must Have:
These are absolutely necessary expenses you cannot live without.
Example: Paying for school supplies, tuition fees, or buying food
for the family.
2. Should Have:
These are important, but they are not urgent. You can plan for them
over time.
Example: Saving for a trip, upgrading your phone when the
current one is still functional.
3. Could Have:
These are nice-to-have items but not critical to your life. They add
convenience or fun, but you can live without them.
Example: Branded sneakers, trendy clothes, or extra accessories
for your room.
4. Won’t Have:
These are things you can skip entirely for now, either because they
are too expensive or not necessary at all.
Example: The latest gaming console or a high-end gadget you
don’t truly need.

By using the MoSCoW Method, you’ll learn to focus your money on what truly matters
while still allowing yourself room to enjoy life’s little luxuries when possible.
 14

Have you ever wondered why one may feel satisfied after a good meal or why getting a
compliment from a friend makes your day better? These feelings are tied to what we call
needs— the things we require to feel happy and fulfilled. Psychologist Abraham Maslow
explained this through his Hierarchy of Needs, which shows how our needs evolve as we
grow and change. Let’s explore this idea in a way that connects with your everyday life.

5. Self-Actualization
At the top of the hierarchy, you focus on personal growth and becoming the best version of
yourself. This could mean learning a new skill, pursuing your hobbies, or working on your dreams.
Example: Taking an art class because you love painting or saving for a guitar to explore
your passion for music.
This is where you truly feel fulfilled.
4. Esteem Needs
As you grow, you might want to feel respected and confident. This might come from
achieving something or owning things that boost your status, like branded clothes etc
Example: Buying a pair of trendy sneakers because your classmates have them.
It’s okay to want these things, but always ask, “Is this the right time for me?”
3. Social Needs
We all want to feel accepted and loved. Friends, family, and being part of a
group make us happy.
Example: Going for a friend’s birthday or participating in a school club.
Feeling connected makes life more enjoyable.
2. Safety Needs
Once your basic needs are fulfilled, you think about safety and
security, like having good health and financial stability.
Example: Saving money for education or health insurance.
Knowing you’re secure helps you focus on other goals.
1. Basic Needs
The essentials for survival, like food, water, and shelter.
Example: If you're hungry, that's all you think about.
Without basic needs met, it’s hard to focus on
anything else.

Maslow’s Hierarchy of Needs

 18

Charity is not just about helping others; it’s a way to grow as a person. By giving,
you don’t just bring joy to someone else - you also experience a sense of fulfillment,
empathy, and purpose. Including charity as a regular part of your budget ensures
that giving becomes a habit rather than an afterthought. It reminds us that while
money is important, its true value lies in how we use it to make a difference.

Why Charity is Essential in Personal Finance

1. Teaches Us to Be Thankful
Sharing what you have reminds you of how fortunate
you are. It helps you realize that while you may not have
everything, you have more than enough to make
someone else’s life better.
Example: Imagine you have three pencils, and your
friend has none. By giving one pencil to your friend,
you not only help them but also feel grateful for
what you have.

2. Helps Us Use Money Wisely and Creates A Habit of

Giving
X 12
MONTHS Setting aside a portion of your money for charity
encourages careful planning and budgeting. It helps
you prioritize your spending while still contributing to a
cause.
= ₹1200 Example: If you save ₹100 every month from your
pocket money, by the end of the year, you’ll have
₹1200 to donate towards buying books for a child
in need.

3. Makes Us Feel Happy Inside

Helping others brings immense joy and satisfaction.
Knowing that your actions have brought a smile to
someone’s face makes you feel proud and content.
Example: Remember how happy you felt the last time
you shared your lunch with a classmate who forgot
theirs? Charity gives you the same warm feeling.
 21

Saarthi Scoops
During the COVID-19 pandemic, Bollywood actor Sonu Sood became a
beacon of hope for many. He arranged transportation for migrant workers,
provided financial aid, and helped students with scholarships and resources.

Anand Kumar, a mathematician from Bihar, started Super 30, a program

that offers free coaching and resources to underprivileged students
aspiring to join IITs. Many of his students have gone on to achieve great
success.

Ryan Kaji, the famous young YouTuber behind Ryan's World, decided to use
his platform to give back. He raised funds and donated toys, books, and
clothes to children in need through various charity organizations. Despite
his fame, Ryan remains dedicated to helping others.

Think of one way you can contribute to others regularly. Write down your plan below:

The cause I care about: ____________________________________________________

How I’ll contribute: _______________________________________________________

____________________________________________________________________________

How often: ______________________________________________________________

 26

Scenario
Your class is organizing a one day school picnic for 40 students. The total budget
for the picnic is ₹50,000, and you need to plan all the expenses while ensuring
everyone has a great time. The picnic will include transportation, food, tickets or
properties for activities, and some emergency funds.

Task
1. Allocate the Budget: Plan the picnic by distributing the ₹50,000 across the
following categories:
Transportation: Bus or train for 40 students.
Food: Snacks, lunch, and drinks.
Activity Tickets or Properties: Entry fees for parks or things
required for activities or games.
Miscellaneous: Include emergency funds for unexpected
expenses.
2. Keep It Balanced:
Transportation: Bus or train for 40 students.
Food: Snacks, lunch, and drinks.
Activity Tickets or Properties: Entry fees for parks or things
required for activities or games.
Miscellaneous: Include emergency funds for unexpected
expenses.

Steps to Complete
1. Create the Budget Table: Fill in the amounts for each category and make sure
they total ₹50,000.
2. Present Your Plan: Share your finalized budget with the class and explain your
choices.

REFLECTION QUESTION
1. Did you face any challenges in staying within the budget?
2. What changes did you make to balance all the categories?
3. How would you handle the situation if the number of students increased?
 27

What are SMART Goals?

SMART Goals are:

S Clearly define what you want to achieve.

Example: "I want to save money for a Lenovo i7 laptop.
Specific

m Set a target so you can track progress.

Example: "I will save ₹65,000 for a laptop.
measurable

a Ensure the goal is realistic based on your current

situation. Example: "I will save ₹10,000 each month
from my pocket money and part-time work.
achievable

r Align the goal with your priorities and needs.

Example: "A laptop will help me complete my projects
more efficiently.
relevant

t Set a clear deadline to stay motivated.

Example: "I will achieve this goal in 7 months.
time bound

Vartika’s Budgeting Adventure: Turning Goals into Reality

Meet Vartika
Vartika is a Class 12 student who’s passionate about S
managing her money smartly. She’s learned about
budgeting, saving, and setting SMART goals. With her m
pocket money and some savings, she’s determined to
achieve her dreams. But this isn’t just about money—it’s a
about planning, prioritizing, and making every rupee count.
r
The Challenge
Vartika earns ₹5,000 every month as her pocket money t
and part-time income. Here’s how her current budget looks:
 32

Factors to Consider When Choosing a Bank

Interest Rate: Look for a bank offering higher
interest for savings.

Minimum Balance: Prefer banks with low or no

minimum balance requirements.

Fees: Check fees for ATM withdrawals, cash

deposits, and other services.

Net Banking and Other Services: Ensure the bank

provides online and mobile banking options.

Products and Services

Cheques
A cheque is a financial instrument used to transfer money from one bank account to
another. It is a written instruction by the account holder (drawer) to the bank (drawee)
to pay a specific amount to the person or organization mentioned on the cheque
(payee).

Types of Cheques 0 7 0 5 2 0 2 4

Bearer Cheque: SELF------------------------------------------

Payable to the person carrying the cheque.

TWO LAKH AND FIFTY THOUSAND ONLY-----------------

-------------------------------------- 250000

Can be used for cash withdrawals. 1 2 0 3 4 6 7 8 9 0

Vedant Shah
Caution: If lost, anyone can encash it.

Crossed Cheque:
Identified by two parallel lines on the top- PA
YE
E
0 7 0 5 2 0 2 4

left corner with “A/C Payee.” A /C

SHREY AGARWAL--------------------------------

Safer option as the money is directly TWO LAKH AND FIFTY THOUSAND ONLY-----------------

250000
transferred to the payee’s bank account.
--------------------------------------

1 2 0 3 4 6 7 8 9 0
Vedant Shah
Cannot be encashed over the counter.
 33

Now that we have seen the 2 most common types of cheques: Bearer and Crossed let
us look at some more:

Stale Cheque: A cheque past its validity, three 5/09/ 2024

months after the date of being issued, is called a

stale cheque.
a post dated cheque issued on 5/01/2025

5/04/ 2025
Post-Dated Cheque: A cheque with a future date,
which the bank will process only on or after the
mentioned date, not before.

Traveller’s Cheque: Issued by a bank, it allows the

payee to cash it in another country’s currency,
making it useful for foreign trips without carrying
excess cash. It has no expiry date.

SELF
Self Cheque: A self-cheque has the word ‘self’
written as the payee. It is used by the issuer to
withdraw money from their bank account. A self-
cheque can be cashed only at the issuer’s bank.

Banker’s Cheque: Issued by a bank on behalf of an

account holder for payments within the same city.
The amount is debited from the customer’s account
before issuance, making it non-negotiable and
ensuring it cannot be dishonoured. Valid for three
months, it can be revalidated under specific
conditions.
Blank Cheque: A cheque with only the issuer's
signature and no other details filled in, posing a
high risk if lost, as it can be misused to withdraw
any amount.
 34

Dishonoured Cheque
A cheque is typically a written promise issued by the person making the payment to the
person receiving the payment for a specific amount of money. Ideally, the payer's bank
should transfer the funds from the payer's account to the payee as per this promise.
However, there are situations where the payer's bank or the payee's bank declines to
fulfill this commitment. The reasons behind this 'rejection' can vary. In such instances,
the cheque is considered invalid and is referred to as a 'dishonoured cheque.'
A cheque can be dishonoured for a host
of reasons:

Issuer of the cheque did not have

sufficient balance in the account

The signature and/or other details

on the cheque were not correct.

A dishonoured cheque attracts a penalty on the issuer of the cheque. It depends on the
reason for the bounce. If a cheque is dishonoured because funds in the payer’s account
were insufficient, it is a criminal offence under the Negotiable Instruments Act of 1881.

Tips for
Cheque Safety

Always write "A/C Payee" to ensure Avoid signing blank cheques; it can
the cheque is deposited directly into lead to misuse.
the payee’s account.

Use black or blue ink to write Record issued cheques in a cheque

cheques for clarity. book register for reference.

Avoid overwriting or leaving blank .Write “Only” after the amount in

spaces. words.
 46

Reserve Bank of India (RBI)

When you deposit your money in a bank, how do you know
it’s safe? What if the bank refuses to return it or charges
very high interest on loans? How do we make sure banks
operate fairly and transparently?

The Reserve Bank of India (RBI) ensures this doesn’t

happen. It’s the guardian of India’s banking system,
making sure banks follow rules and protect your money.

What is RBI?
The RBI is India’s central bank, established on 1st April 1935. It is like the “boss of all
banks” in India. Its primary role is to regulate and supervise the country’s banking
and financial systems. It sets the rules that banks must follow to ensure they
operate smoothly and fairly.
Functions of RBI
Regulates Banks
Ensures banks follow rules and have enough money to repay
depositors.
Monitors banks to ensure they maintain enough money to
repay depositors.
Example: If a bank is in trouble, the RBI steps in to protect
your savings.

Manages Currency
Prints and circulates all currency notes in India.
Ensures there’s just the right amount of money in the
economy—neither too much (causing inflation) nor too little
(causing deflation).
Example: Every ₹500 note is printed by the RBI.

Controls Inflation and Interest Rates

Uses tools like the repo rate (rate at which banks borrow
money from the RBI) to control inflation and keep the
economy stable.
Example: If prices rise too fast, the RBI increases interest
rates to reduce spending.
 49

PMJDY
Revolutionizing Financial Inclusion
Imagine India with over a billion people, yet
more than 50% of the population didn’t
have a bank account until a decade ago. In
2014, millions of Indians relied on cash for
all their transactions, storing money at
home and struggling to save for the
future. This made it nearly impossible for
many to access basic financial services like
loans, insurance, or even secure savings.
Why So Few Bank Accounts?
Lack of Awareness: Many people, especially in rural areas, didn’t understand the
importance of having a bank account.
Distance from Banks: Villages often didn’t have banks nearby, making it inconvenient
for people to open or manage accounts.
High Documentation Requirements: Strict Know Your Customer (KYC) rules were a
major hurdle for those without proper identification documents.
Minimum Balance Rules: People with low or irregular incomes couldn’t maintain the
required minimum balance in traditional accounts.
Lack of Trust: Many felt more comfortable keeping money at home than with a bank.

The Solution: Pradhan Mantri Jan Dhan Yojana

(PMJDY)
Recognizing these challenges, the Government
of India launched the Pradhan Mantri Jan Dhan
Yojana (PMJDY) on 28th August 2014, a
flagship scheme aimed at ensuring universal
access to banking facilities.

What is PMJDY?
PMJDY is a financial inclusion program
designed to provide affordable and accessible [Link]
banking services to every Indian, especially
those in rural and underserved areas.
 51

Banking the Unbanked Increased Digital

Transactions
Banking services have PMJDY enabled
expanded to rural and millions to participate
remote locations in India’s growing
through Bank Mitras digital economy
(banking through debit cards
correspondents). This and UPI.
has increased
financial security in
remote areas of the
country.

Saarthi Scoops
Before PMJDY, only 53% of households had access to a bank account.
Today, this figure has skyrocketed to over 98%, thanks to the initiative’s
success.

Guinness Book of World Records- External website that opens in a new

window also recognised the achievements made under PMJDY. It gave the
certificate stating that the "Most bank accounts opened in one week as
part of the Financial Inclusion Campaign is 18,096,130 and was achieved by
the Department of Financial Services, Government of India from 23rd to
29th August, 2014."

Source: [Link]
Source: [Link]
 53

Grievance Mechanisms
for Banks
Banking is an essential part of our daily lives, and
sometimes customers may face issues such as
incorrect charges, failed transactions, or unresponsive
services. To address these problems, banks have
established grievance redressal mechanisms to ensure
customer satisfaction and transparency.

What is a Grievance Cell?

A Grievance Cell is a system set up by banks and regulatory authorities to address
complaints and resolve disputes related to banking services. It ensures that
customers can report their issues and receive fair treatment.
Common Issues Handled by Grievance Cells
1. Failed ATM or online transactions.
2. Incorrect deductions from accounts.
3. Excessive charges or hidden fees.
4. Delays in processing loans or payments.
5. Poor customer service or misbehavior by bank staff.

Steps to File a Complaint

S t ep
1 Contact the Bank’s
Customer Care
Step Contact the Bank’s Customer Care
1 Most issues can be resolved by contacting
S t ep
Escalate to the 2 your bank directly.
Bank’s Grievance
Redressal Officer File your complaint through:
S t ep Branch Visit: Fill out a complaint form
3 Approach the at your local branch.
Banking Ombudsman Call Center: Use the bank’s toll-free
S t ep customer care number.
4 Online Portal: Submit your complaint on
Consumer Court the bank’s official website or mobile app.
 60

Inflation is the gradual increase in the prices of goods

and services over time. This means that as inflation
occurs, each unit of currency buys fewer goods and
services. In other words, the value of your money
decreases as inflation rises.
what inr 100 can buy today it will not be able to buy say, 3 years later.
Examples of Inflation
Let's look at some examples to understand how prices have changed over the years:

₹ 28,000 ₹ 75,000 168%

Price (2014) Price (2024)
Gold Per 10g

12% p.a. doubles every 6 years

conventional Education
things
₹ 73/litre ₹ 100/litre
Price (2014) Price (2024) 37%
Petrol

₹ 8 for 200 ml ₹ 20 for 200 ml 150%

Price (2014) Price (2024)
Pepsi

₹ 400-500 up about 50-70% compared

Per Month to Cable and DTH
new age OTT Platforms
services
₹ 400
Per Month increased 50% from 2018
Food Delivery Apps

However, income for individuals in India has

only increased by 35% from 2014 - 2023
Source: Ministry of Statistics & Programme Implementation
 61

It's important to note that inflation doesn't affect all products and
services uniformly. Some items may see more significant price increases
than others. Additionally, a few items might even become cheaper over
time due to factors like technological advancements, increased
competition, or changes in consumer preferences. A decline in prices is
called Deflation.

But how come things like Maggi, Coke, Dairy Milk etc
have been costing almost the same INR 10, INR 20 etc
since the past so many years? Does inflation not
impact these items?

Well, this can be answered by looking at the weight of

these products carefully over the years. For eg Maggi:
INR 10 for 100 gms in 2014 and today INR 14 for 70
grams.

How much has the price increased here effectively?

2014 2024
So while the price
100% tag appears similar,
consumers are
Effective Price effectively paying
Increase double per gram for
₹ 10/ 100g ₹ 14/ 70g the same Maggi.
₹0.1 per gram ₹0.2 per gram

Thus, these FMCG products often tend to

reduce the weight of the product instead of
increasing the price which in-effect has the
same impact on the pocket of the buyer. This
phenomenon of reducing the size of the
product while keeping the price the same is
called Shrinkflation. Shrink the size to pinch
more money out of the pocket. This strategy
is often adopted by companies to make the
customer feel as if he or she has not been
charged more since they keep paying the
same amount.
 63

Objective: To help students understand how lifestyle inflation impacts

savings by increasing unnecessary expenses. It encourages them to
recognize spending patterns and develop smarter financial habits.

Rohan had always been careful with his money. When he started his first job, he
earned ₹25,000 per month and was mindful of his spending. He had just one OTT
subscription for ₹500 and a gym membership for ₹1,000, leaving him with enough
savings every month.
Two years later, Rohan got a promotion, and his salary increased to ₹50,000 per
month. Excited about his higher earnings and his penchant for being up to date
with what his peers in office watched and consume daily, he subscribed to multiple
OTT platforms, premium music apps, online gaming, and even a food delivery
membership. Now, instead of ₹500, he was spending ₹5,000 per month just on
subscriptions! Thus, where the income only doubled his expenses on Entertainment
increased 10x.
One day, while checking his bank account, Rohan realized that even with double the
salary, he had very little savings. Shocked, he thought, "I used to save money even
when I earned less! Where did all my money go?" He decided to sit down and list all
his monthly expenses. That’s when he realized how lifestyle inflation had crept into
his life—he was spending more just because he was earning more.
Determined to change, Rohan cut down unnecessary subscriptions and set a fixed
amount for savings each month before spending on luxuries.

1. What is lifestyle inflation, and how did it affect Rohan’s savings? What led to the
change in spending habits?
2. What steps can Rohan take to control his expenses while still enjoying his income?
Suggest two practical ways in which young professionals can avoid unnecessary
spending on subscriptions and memberships.
 65

Rate of Repayment
Interest Collateral Structure
Purpose Tenure
Required

Saarthi Scoops
Temples in India performed banking functions before the modern
banking system came into existence. In ancient and medieval India,
temples were not only places of worship but also served as important
financial centers. They received donations and endowments from
devotees, which were often in the form of gold, land, or other valuables.
Temples used these donations not just for religious activities but also to
lend money to traders and agriculturists. This practice effectively made
them financial intermediaries, similar to banks. The wealth accumulated
by these temples was also used to support various social and community
projects, such as building infrastructure and aiding the needy. This role
of temples as financial hubs was a significant aspect of the economic
landscape in India before the advent of formal banking institutions.
 66

1. Purpose
Why do people take loans? Some reasons to take a loan could be:
Home Loan: To buy or build a house.
Auto Loan: To buy a car or bike.
Personal Loan: For other needs like a vacation or wedding.
Example: Riya’s family took a home loan to buy a new flat in the city.

2. Rate of Interest
How is the interest (extra money paid to the lender) calculated?
Fixed Interest Loan: The interest rate stays the same throughout
the loan period.
Variable Interest Loan: The interest rate changes depending on the
market.
Example: Amit’s parents took a car loan with a fixed interest rate so
they’d know exactly how much to pay every month.

3. Collateral Required
Is any form of security such as an asset provided to the lender in case
the borrower is unable to repay their money?
Secured Loan: The borrower promises an asset (like gold or
property) to the lender. If they can’t repay, the lender can take the
asset.
Unsecured Loan: No asset is promised, but these loans usually have
higher interest rates.
Example: Rohan’s father gave their farmland as security for a
secured loan to start a business.

4. Repayment Structure
How is the loan paid back?
Monthly Payments: The borrower repays in smaller amounts every
month (e.g., Equated Monthly Installments (EMIs)).
Lump-Sum Payment: The entire loan is paid back at once.
Example: Neha’s family pays their home loan every month through
EMIs.

5. Tenure
How long does the borrower take to repay the loan?
Short-Term Loan: Less than 1 year.
Medium-Term Loan: 1 to 3 years.
Long-Term Loan: More than 3 years.
Example: A 6-month loan for a new phone is a short-term loan,
while a 15-year home loan is a long-term loan.
 69

Ancient Trade
Thousands of years ago, people traded
goods like salt, spices, and silk along
famous routes like the Silk Road.
Back then, trade was slow, involving long
journeys on camels, ships, or by foot.

The Ancient Silk Road: A Gateway for Global Trade

Thousands of years ago, long before planes, trains, or the internet existed, people
exchanged goods using famous trade routes like the Silk Road. The Silk Road wasn’t a
single road but a vast network of trade routes connecting Asia, Europe, and the Middle
East. It got its name from one of the most valuable goods traded along it—silk from
China.

Goods Traded Along the Silk Road

From China: Silk, porcelain, and paper.
From India: Spices, textiles, and precious stones. C hin a In dia
From the Middle East: Glassware and carpets.
From Europe: Wool, silver, and wine.
These goods weren’t just traded for money
but were often exchanged for other valuable
items, creating a vibrant global market even M id
in ancient times. dle E ast Europe
 71

Conventional Trade
With the invention of money and
transport, trade became faster and more
organized.
Markets grew in towns and cities, and
international trade allowed countries to
exchange unique goods like tea, coffee,
and precious metals.

Conventional Trade in India: Stories and Data

India has been at the heart of trade for centuries, long before the modern era. With the
invention of money and advancements in transportation, trade in India flourished,
connecting it to regions both near and far.
The Grand Indian Markets
During the medieval period, India became a hub for domestic and international trade.
Major cities like Varanasi, Delhi, and Surat developed bustling markets where goods
such as textiles, spices, and jewelry were traded.
Surat: Known as the "Gateway to the West,"
Surat in Gujarat was a thriving port city to the West
during the Mughal era. Traders from Europe, Gateway
the Middle East, and Asia flocked to Surat to
buy Indian textiles, which were considered Asia
the finest in the world.

Hampi: In the 14th century, Hampi, the capital

of the Vijayanagara Empire, was a bustling Surat
trade center. Historical accounts describe Middle East Europe
markets filled with silk, gems, and spices,
attracting merchants from as far as Persia
and China.
 75

Empowering Sellers:
Platforms like Amazon and Flipkart allow small
businesses, rural artisans, and entrepreneurs to showcase
their goods to a global audience.

Customization and Innovation:

Advanced technologies allow businesses to tailor their
offerings based on customer preferences. For instance,
many e-commerce platforms use AI to suggest products
based on your past purchases.

Interesting Facts About Modern Trade

Amazon in India: Amazon India Flipkart: A homegrown platform,

outnumbered all other Indian Flipkart has over 450,000 sellers,
marketplaces with more than 295 many of whom are small business
million visitors per month as of owners.
March 2024. Source: Business Standard
Source: Statista

Quick Commerce Growth: Digital Payments: During the year

Platforms like Blinkit deliver over under review, there were 89.5
20 million orders monthly, driven million digital transactions in the
by the demand for speed and country. India accounted for 46
convenience. per cent of the global real-time
Source: Entrackr payments in 2022, which was
more than the combined digital
payments the next four top
countries.
Source: Economic Times
 76

How Modern Trade Solves Old Problems

No Boundaries: You’re no longer
restricted to local stores or markets.

Speed: What once took days to reach

your home can now arrive within hours or
minutes.

Availability: Even in remote areas, online

platforms ensure access to a variety of
goods and services.

Transparency: Customer reviews, ratings,

and detailed product descriptions make
purchasing decisions easier and more
informed.

Modern trade has truly redefined how we buy and sell. It connects rural sellers to
urban consumers, brings global products to your doorstep, and saves time with
lightning-fast deliveries. In today’s world, trade is no longer a distant activity - it’s
just a click away!
 77

Global Trade
International trade has brought the
world closer, allowing people to
experience goods and cultures from
every corner of the globe.
Example: Eating sushi (a Japanese dish)
in India or wearing a T-shirt made in
Bangladesh shows how interconnected
the world has become through trade.

Global Trade and India’s Contribution to the World

International trade has truly transformed the world into a global village, connecting
countries through goods, services, and culture. India, with its rich resources and
dynamic economy, plays a significant role in shaping global trade. From agriculture and
textiles to cutting-edge technology and services, India’s contribution reflects its
growth story and its influence on the global stage.

India’s Role in Global Trade

Exports of Goods:
India is one of the world’s leading exporters
(sellers to other countries) of textiles, spices,
and jewellery.
Example: Indian cotton and handwoven sarees
are highly sought after in global markets, and
the spice trade continues to be a dominant
export sector.

Agricultural Exports:
India is the largest exporter of basmati rice,
accounting for over 25% of the world’s rice
exports.
Other key exports include tea, mangoes, and
sugar, contributing significantly to feeding
global populations.
 81

Objective: Help students understand how international trade brings products

from other countries to their homes.

Instructions:
1. Pick a product you use daily which comes from outside India (e.g., chocolate,
smartphone, or tea).
2. Research and write about:
Which country it originates from.
How it reaches India (e.g., ship, airplane).
What other countries are involved in its production (e.g., raw materials,
manufacturing).
3. Draw or describe the product’s journey from its origin to your home.

Product

Reflection: Why do you think we import this product?

 84

Objective: Help students differentiate between domestic and international

trade using examples from their daily life.

Instructions:
List at least 5 items each you use daily and place them under the correct column;
Domestic and International. For the items which are international also mention the
country they come from.

Domestic international

Reflection: What percentage of your items in daily life come from

international trade?

Reflection: How does international trade improve the quality of your life?
 87

Objective: Uncover the fascinating journey of a product as it travels through

the trade chain—from raw materials to the hands of the consumer.

Instructions:
Pick A Product: Choose something you love to use or eat, like a chocolate bar, a bag
of rice, or a T-shirt.
Follow Its Journey

Step 1: Raw Materials

Where do the ingredients or materials come 1
from?
Example: Cocoa beans for a chocolate bar
are grown in Ghana. Cotton for a T-shirt is
grown in India.
Step 2: Manufacturer
Who makes the product? What happens at 2
the factory?
Example: Nestlé uses cocoa beans, sugar,
and milk to produce chocolate in their
factories.
Step 3: Wholesaler
Where is the product stored after 3
manufacturing?
Example: A wholesaler buys hundreds of
boxes of chocolates and stores them in
large warehouses.
Step 4: Retailer
Which shop or supermarket sells this 4
product to you?
Example: A grocery store or an online
platform like Amazon sells the chocolate.
Step 5: You, the Consumer
How do you buy and enjoy it?
Example: You buy the chocolate bar from a 5
local shop as a treat for yourself.
 92

Objective: Learn how to carefully check a bill for errors and understand its
components.

Instructions:
For each scenario, you will be given details of the purchase made and you have to
then reconcile the details with the bill shown and find any discrepancies.

Case 1: Grocery Shopping

Scenario:
SAARTHI SUPER STORE
51, XXX Road New Delhi
Phone: 987xxxxxx FSSAI: 1212XXXXXXXXXX
GSTIN: 03EQPXXXXXXXXXX
You went to the grocery store and bought:
Item Qty Rate Amount
2 kg of rice at ₹50/kg = ₹100.
1 packet of biscuits at ₹30/packet = ₹30. Rice 3 kg ₹50 ₹150
5 apples at ₹20 each = ₹100. Biscuits 1 ₹30 ₹30
Apples 5 ₹20 ₹100
GST (5%) should be applied to the total bill.
Total : ₹280
GST (5%): ₹15
error
Grand Total: ₹295
Bill No. A103509
Date: 13-01-2025
Time: 11:18
 100

Objective: Gain knowledge and debunk myths about pricing concepts through
fun and quick statements.

Instructions:
1. Read each statement below.
2. Mark it as True or False and explain why.

"MRP is the minimum price at which a product must be sold."

Explanation

"Selling price can never be higher than the market price."

Explanation

"A seller incurs a loss if the selling price is lower than the
cost price."
Explanation

"Market prices can fluctuate due to supply and demand."

Explanation

"Selling products above the MRP is legal if customers agree

to pay more."

Explanation
 102

Foreign Exchange
Import and Export: Connecting the World
Now that we’ve talked about global trade, let’s explore how countries buy and sell
goods across borders. This process introduces us to foreign exchange, imports, and
exports, and gives us a glimpse into the fascinating world of currencies.

What is Foreign Exchange?

Foreign exchange is the process of exchanging
one country’s currency for another to
complete international transactions.
Since each country has its own currency,
trade between nations requires this exchange.
How It Works:
Imagine you want to buy something from the USA, like a
laptop. The seller in the USA wants to be paid in dollars
(USD), but you have Indian rupees (INR). You exchange
your INR for USD through a bank or an exchange
service to make the payment.

Examples of Currency:
India: Rupee (INR)
USA: Dollar (USD)
UK: Pound (GBP)
Japan: Yen (JPY) INR USD GBP JPY

Currency Exchange Rates:

1 USD 80 INR
Exchange rates determine how much one
country’s currency is worth compared to another.

Example: 1 USD might be equal to INR 80.

 107

Let’s Imagine a World

Connected by Trade
Imagine sitting at home in India, sipping Colombian coffee from a cup made in China,
wearing a sweater made from Australian wool, while your smartphone—designed in the
USA—is charging nearby. This everyday scene is possible because of trade and the
magic of foreign exchange.
Trade and foreign exchange don’t just
move goods; they connect people,
cultures, and ideas from around the globe.
Every product tells a story of farmers,
manufacturers, and traders working
across borders to bring it to your hands.
So next time you enjoy something imported, think of the journey it took to get to you—
across seas, currencies, and continents—and remember how beautifully interconnected
our world has become!

American
Smartphone Chinese
Ceramics

Colombian
Coffee

Australian
Wool
 109

Objective: Understand how foreign exchange works by converting currencies

based on given exchange rates.

Instructions:
Use the given exchange rates to calculate how much money in Indian Rupees (INR)
is needed to complete the transactions.

Scenario 1
Vacation in Japan
You want to buy a souvenir for
1,500 Japanese Yen (JPY).
Exchange rate: 1 JPY = 0.6 INR.

Scenario 2
Studying in the USA
Your tuition fee is 10,000 USD.
Exchange rate: 1 USD = 80 INR.

Scenario 3
Shopping in the UK
You want to buy a jacket for
200 GBP.
Exchange rate: 1 GBP = 100 INR.

What happens if the exchange rate for INR weakens against foreign currencies?
 111

Consumer Awareness
and Protection
What is Consumer Awareness?
Being a consumer means you buy goods and
services to meet your needs and wants.
Consumer awareness is understanding your
rights, responsibilities, and the choices you have
when making a purchase. It empowers you to
make smart decisions and avoid being cheated.

Why is Consumer Awareness Important?

1. Protect Yourself from Fraud: Fraudulent practices are common in the market, and
being alert can save you from losing money or buying unsafe products. Fraud can come
in many forms, such as fake products, misleading offers, or online scams.
Understanding how these occur helps you make better decisions.

Examples:
Fake Products:
Example: Many times large-scale
counterfeit products are sold under
popular brand names. These fake products
posed health risks and tricked consumers
into paying for low-quality goods. Common
examples include branded clothes, shoes,
cosmetics etc.

How to Avoid: Always check for proper

branding, packaging seals, and certification
marks like ISI, FSSAI, or BIS on products.
 118

How the Government Helps

The Indian government has set up Consumer Courts and a National Consumer Helpline
(NCH) to assist people.

Consumer Courts: Consumer Courts

are quasi-judicial bodies established
to resolve disputes between
consumers and sellers/service
providers. They ensure consumers
can seek justice without incurring
high legal expenses.

Types of Consumer Courts:

District Consumer Disputes Redressal Commission (DCDRC): up to
Handles cases where the value of goods/services is up ₹50 lakh
to ₹50 lakh.

State Consumer Disputes Redressal Commission (SCDRC):

Handles cases where the value is between ₹50 lakh and Between
₹2 crore. ₹50 lakh -
Also hears appeals from District Consumer Courts. ₹2 crore
National Consumer Disputes Redressal Commission
(NCDRC):
Handles cases where the value exceeds ₹2 crore. more than
Also hears appeals from State Consumer Courts. ₹2 crore

How to File a Case:

Submit a written complaint detailing the issue and providing
relevant evidence like bills, warranties, or contracts.

Pay a nominal fee based on the claim amount.

 120

Objective: Identify potential fraud and take the necessary steps to protect
themselves.

Instructions:
Read each scenario carefully and identify what went wrong in the situation.
Also write how the consumer could have avoided the problem or resolved the issue.

Scenario 1
Sita bought a "branded" handbag at a discounted rate from a street vendor. After
using it for a week, the handle broke, and she realized the bag was fake.

What went wrong?

What should she have done:

Scenario 2
Ravi purchased a refrigerator with a “1-year warranty.” After 6 months, it stopped
cooling, but the shopkeeper refused to repair or replace it since he could not
provide the shopkeeper with an invoice or the warranty card.

What went wrong?

What should he have done:

Scenario 3
Shalini ordered a smartphone online during a big sale. When the delivery arrived, the
box contained a bar of soap instead of the phone.

What went wrong?

What should she have done:

 123

What is investment and why should we invest?

Is there a difference between investing and saving or are they the same?

Remember, we save money for needs, emergencies and wants or goals. Our goals can be
divided into three types based on the duration or how far it is in the future:

Short-Term Goals Medium-Term Goals Long-Term Goals

less than one year 2-5 years from now more than 5 years
from now from now

Now, inflation has a huge role to play in determining the prices of these goals.

Hence, if we need to have enough money with

lation us to achieve our long-term goals we need to
nf
of I ensure we save enough to take care of the
pact inflation or we save our money in such a manner
Im that it grows at a rate equal to or faster than
inflation.
This is where investments come into
picture.
Time to achieve Goals

Investments is putting your money into an asset so that it

grows in value over time and/or generates more income.

Thus, investing your money can increase it at a rate which is more

than inflation which can help us achieve our goals in the future.
 127

It is a sum of money that people pay to the government for

the services provided by it such as roads, schools and hospitals.

DIRECT TAX INDIRECT TAX

A direct tax is a percentage of the Indirect taxes are charged on
income and profits earned by goods and services rather than
residents of India and is paid income.
directly to the Government. The The Central Board of Indirect
Central Board of Direct Taxes Taxes and Customs (CBIC) is
(CBDT) is responsible for levying responsible for the collection and
and collecting direct taxes, also administration of indirect taxes.
creating direct tax rules.
The Income Tax Act of 1961 states
that you must pay income tax if GST (Goods and Services Tax):
your yearly income exceeds the
minimum exemption threshold. Indirect tax is levied on the production
It is levied on the income earned by and sale of both goods and services.
Whenever we purchase a commodity or
individuals, partnerships and other avail a service, we pay gst.
legal entities.
Feature Direct Indirect CUSTOM DUTY
Levied on Income of the Goods and services
It is a tax the government imposes on
taxpayer traded
commodities exported and imported.
Burden Can not be Can be shifted to the Import taxes are used to control trade
transferred consumer as well as provide the government with
revenue. Most of them are assessed on
Objective Reduce Increase government
an ad valorem basis. It is a duty levied
inequality revenue
by the government on exports and
imports of goods.
 129

Indirect Taxation
Key Indirect Taxes in India

GST Customs Duty VAT

GST (Goods and Services Tax)

GST is a comprehensive tax that replaced multiple indirect taxes like VAT, excise
duty, and service tax. It is a destination-based [Link] means the tax is added at
the point where you, as the consumer, buy the product.
Let’s take the example of buying a packet of chips to see how GST works:
Manufacturer:
A factory makes chips and sells them to a wholesaler for ₹50.
The factory adds GST (say 12%), but this GST is not paid by
you, the consumer—it is passed on to the next seller. ₹50 + 12 % GST

Wholesaler:
The wholesaler buys the chips for ₹50 + GST and sells them
to a retailer for ₹60 + 12 % GST. ₹60 + 12% GST
Retailer:
The retailer buys the chips for ₹60 + GST and sells them to
you for ₹100.
₹100 + 12% GST
Consumer (You):
When you buy the chips for ₹100, you pay 12% GST on this
amount:
₹100 × 12% = ₹12.
So, you pay ₹100 (price of chips) + ₹12 (GST) = ₹112 total. TOTAL: ₹112
 134

cyber Security

Creating Strong

PASSWORD
is something all of us strive for.

It is one of the best practices recommended. One such method is using the
Corresponding Number on QWERTY Keypad Method.