MAHESH TUTORIALS I.C.S.E.

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1 MAHESH TUTORIALS I.C.S.E. GRADE - ( ) Exam No. : MT/ICSE/PRELIM-I-SET-A-010 ECONOMICS (Two hours) Answers to this Paper must be written on the paper provided separately. ou will not be allowed to write during the first l5 minutes. This time is to be spent in reading the question paper. The time given at the head of this paper is the time allowed for writing the answers. Section A (40 Marks) Attempt all questions from this section. Question 1 Which of the following is considered as labour in economics? Give reasons. 1. The judgement given by a judge in the court. 2. Participation in the annual athletic meet by a student. [2] (b) How do wages affect efficiency of labour? [2] (c) Differentiate between 'concrete capital' and 'money capital'. [2] (d) What does the demand curve given below show? [2] D Income (e) O Demand In a situation, more of a commodity is demanded at the same price.does it indicate extension of demand or increase of demand? Give reason. [2] Question 2 What is cross demand? [2] (b) Define income elasticity of demand with the formula. [2] (c) Is the slope of the demand curve positive or negative? Explain. [2] (d) State two main exceptions of law of supply. [2] (e) Distinguish between stock and supply. [2] Question 3 What is the relationship between public finance and political science? [2] (b) Distinguish between tax revenue and non-tax revenue. [2] Copyright reserved. This Paper consists of 2 printed pages

2 (c) What is productive expenditure? [2] (d) Mention two points indicating effect of public debt on the economy. [2] (e) What do you mean by legal tender money? [2] Question 4 What are scheduled banks? [2] (b) What is demand pull inflation? [2] (c) What is open market operation? How does it influence the total money supply? [2] (d) What is COPRA? [2] (e) State the organization that sets standards of products in India. [2] SECTION B ( 40 MARKS) Attempt any four questions Question 5 Describe the various forms of division of labour. [5] (b) Differentiate between : 1. Wealth & Capital 2. Money & Capital [5] Question 6 State and explain Law of demand with the help of a schedule and figure. State the assumptions. [5] (b) Distinguish between expansion and increase in demand. [5] Question 7 Discuss the importance of elasticity of demand. [5] (b) Explain five types of elasticity of supply. [5] Question 8 What do you understand by progressive tax? Explain with the help of a figure. [5] (b) Describe 5 types of public expenditure. [5] Question 9 What is cost-push inflation? State the factors causing it. [5] (b) What are the important methods of lending available to the commercial banks? [5] Question 10 State the primary & secondary functions of money. [5] (b) Explain the ways in which consumer is exploited. [5] All the Best

3 ICSE MAHESH TUTORIALS I.C.S.E. SUBJECT : ECONOMICS Exam No. : MT/ICSE/PRELIM -I-SET-A-010 Marks : 80 Time : 2 hrs. Model Answer Paper A.1 (b) Section A (40 Marks) Attempt all questions from this section. Labour consists of all human efforts of body or of mind which are undertaken in the expectation of reward. The judgement given by a judge is labour as he is remunerated for his work. Participation in the athletic meet by a student is not considered as labour as he attends the meet out of his willingness and deliberation. He is not paid for this work. [2] Level of wages also affects efficiency of a worker. A higher wage increases the worker's standard of living and, hence his efficiency. [2] (c) (d) Real capital or concrete capital refers to the physical stock of goods which are used as inputs in the production process. Thus the machines raw materials etc. are the examples of real capital. On the other hand, money itself is not a means of production. However, Money can be used for buying capital goods (like machines and raw materials). It would not be wrong to treat money used for this purpose as capital. The demand curve shows positive relationship between demand and income. As income increases, demand too increases. This is a case of normal goods. [2] [2] (e) The above condition depicts increase in demand. Increase is demand is a situation when more of a commodity is demanded at the same price due to change in other factors like increase in consumer's income, change in taste & preference, increase in population etc. [2] A.2 If a change in the price of one good affects the demand for another good, it is called cross demand. Substitutes & complementary goods have cross demand. [2] (b) If other determinants of demand (i.e. price of the commodity, taste & preferences of the consumer, price of related goods etc.) remain constant, the responsiveness of demand to a change in income is called income elasticity of demand. Symbolically, it can be expressed as under: E i = Percentage in demand of a commodity Percentage change in income

4 E i = ΔQ Q Δ Where Ei = Income elasticity of demand. Q = Change in demand Q = Original demand = Change in income = Original Income [2] (c) (d) (e) A.3 (b) The slope of the demand curve is negative as the demand curve is itself a negative curve. Other things being equal, when price rises, demand falls and when price falls, demand rises. The inverse relationship of demand with price makes demand curve a negative curve. [2] Following are the circumstances under which the law of supply does not operate - (i) In case of agricultural goods : The supply of agricultural goods depends more on natural factors such as drought, floods, natural calamities etc. and less on their prices. (ii) In case of perishable goods : The supply of perishable goods like milk, vegetables, fish, eggs, etc. is also not affected by their prices. Sellers cannot hold these goods for long. [2] Stock is the total quantity of a commodity that can be brought into the market for sale at a short notice. It thus, indicates the maximum limit of sales at a short notice. Supply, on the other hand, implies the quantity that the seller is ready to sell at a given price and time. We know that generally a producer does not offer whole of his stock for sale at a given price in the market. Supply thus, refers to that part of stock which a seller is prepared to sell at a given price. [2] Public finance is a subject that lies on the border line between economics and political science. Public finance is the study of finances of the government or public bodies. The government being headed by politicians, it is but natural that the finances may be governed by political thinking. [2] A tax is a compulsory payment imposed on the persons or companies by the governments to meet the expenditure incurred on providing common benefits to the people. Tax revenues include income tax, VAT, Excise duty, Education cess etc. These are compulsory & there is no quid pro quo. Non-tax revenues which include commercial revenues, administrative revenues, gifts & grants, foreign aid are not a significant source of revenues for the govt. They are not compulsory on people. For example, a person has to pay for a telephone connection provided by the government only when he opts to consume the service. There is an element of quid pro quo. [2]

5 (c) Productive expenditures are those expenditures which help in improving the productive capacity of the economy. These expenditures are of the nature of investment. These expenditures may take the form of physical assets like machinery, buildings as well as human capital like education, training, health, etc. [2] (d) Public debt has positive as well as negative effects on the economy. (i) Burden of Public Debt : Since loans (both internal and external) have to be paid after certain fixed time periods, interest payments are to be made regularly till loans are finally paid off. It is known as 'debt servicing burden'. (ii) Growth Potential : A significant portion of the internal debt was utilized for the development of industries and minerals, power projects, railways, postal and communication services, etc. This indicates that public debt in India has not always been wasted on unproductive activities. [2] (e) A.4 (b) Standard money is legal tender money. It is legal tender in the sense that no one can refuse to accept it. It is authorized by the government and the central bank of the country. [2] Scheduled banks are those commercial banks which are included in the second schedule of the Reserve Bank of India Act According to this, a commercial bank must satisfy the following three conditions : (i) It must have a minimum paid-up capital and total reserves of Rs.5 lakhs. (ii) It must be a joint stock company as defined in section 3 of the Indian Companies Act 1956 and not a sole trader or partnership firm. (iii) Any activity of the bank will not adversely affect the interest of the depositors. [2] Demand pull inflation refers to a situation in which prices rise because the demand for goods and services exceeds their total supply available at current prices. It is also known as 'excess demand inflation.' Excess demand means aggregate real demand for output in excess of maximum possible output or full employment output at the current price level. Thus, demand pull inflation may be defined as a situation where the aggregate demand exceeds the economy's ability to supply the goods and services at the current prices, so that the prices are pulled up by the excess demand. [2] (c) Open market operations refer to the buying and selling of government securities by the central bank from/to the public and banks. When the central bank intends to contract credit during inflation, it sells government securities which are usually purchased either by commercial banks or by their customers. Consequently, cash reserves with the banks are reduced and so does their lending power. On the other hand, when the bank desires to expand credit during deflation in the economy, it starts purchasing such securities. This is how open market operation

6 influence total money supply in the country. [2] (d) COPRA stands for Consumer Protection Act which was passed in 1986 for protecting rights of consumers. [2] (e) The organizations that sets standards of products in India are - (i) Bureau of Indian standards (BIS) - has the responsibility of laying down the standards for industrial and consumer goods on a scientific basis. (ii) Agricultural Marketing (Agmark) - meant for grading agricultural products. [2] A.5 SECTION B ( 40 MARKS) Attempt any four questions (i) Product- Based Division of Labour : When a person (or worker) specialises in the production of a particular commodity or service, it is called product based division of labour. It is also known as simple (or occupational) division of labour. In traditional economies, a worker used to be specialised in the production of a single commodity. This is division of labour by profession. Some were farmers, some were carpenters, blacksmiths etc. In skilled professions, some are teachers, lawyers, doctors and so on. (ii) Process-Based Division of labour : In a modern economy, production of a good or service involves several processes and each worker (or labourer) specialises in one or two processes. This type of division of labour is called process-based division of labour or complex division of labour. It requires the services of labour of varied abilities/skill. All workers engaged in different processes of the production of a good or service are supposed to work in coordination since the commodity has to pass through these various processes. We can illustrate this with the help of simple example of a modern garment factory. In it, one person takes the measurement, the other does the cutting, the third sews it and the fourth buttons it, the fifth irons it and so on. In the corporate or quasi-corporate sector, almost all producing units use process based division of labour. (iii) Geographical (or Territorial) Division of Labour : Sometimes, due to some reasons, the production of certain goods takes place in a particular place, state or country. This particular type of division of labour is called geographical division of labour. For example concentration or localisation of textiles in Bombay (Mumbai), jute industry in Bengal and sugar industry in U.P. are the good examples of territorial division of labour. [5] (b) (i) Wealth and Capital :- Wealth refers to all economic goods which are scarce and command some price. Capital refers to real capital eg. machines, factory, building etc. which is further used in production of other goods and services. All wealth cannot be considered as capital. Only that part of wealth (consisting of producer goods) is called capital. Wealth used for consumption (like household car) is not capital. But when the same car is used as taxi, it is capital. Thus, income yielding wealth is called capital.

7 (ii) Money and Capital : Money itself cannot be regarded as capital because it itself cannot produce anything. So money cannot be considered as a distinct factor of production. Money when used for starting any business, for purchasing machinery, tools raw materials etc. is regarded as capital. [5] A.6 The law of demand explains the inverse relationship between the price and quantity demanded of a commodity. According to this law, other things being equal, price and quantity demanded of a commodity move in the opposite direction. In other words, when the price of a commodity increases,its demand falls. When price falls, quantity demand increases, provided, factors other than price remain constant. Assumptions of the law (or other things being equal) In the statement of law, the phrase other things being equal has been used. By other things, we mean factors other than price which influnce the demand. They are:- (i) There should be no change in consumer s income during the period of consumption. (ii) There should not be any change in the price of related goods (i. e. substitute or complementary goods) (iii) There should be no change in consumers taste and habits. (iv) Consumers do not expect any change in the price of the commodity in the near future. (v) No change in population. Demand Schedule. Demand schedule shows diferent quantities of a commodity demanded (per period of time) at different prices (per unit of the commodity). The following table shows that the household will demand more sugar at a lower price, other things being equal. For instance, when price is ` 20 per kg, he demands only 1 kg of sugar but, at ` 19, he is prepared to buy 2 kg, at ` 18 per kg, 3kg sugar and so on. This shows that price and demand are inversely related. Price of Sugar (per kg.) Quantity of Sugar Demanded (per month) (kg) [5] Demand Curve The curve which shows the relation between the price of a commodity and the amount of that commodity the consumer wishes to purchase, is called demand curve. When price falls from Rs.20 to Rs.19, demand rises form 1 to 2 kg. of sugar

8 (b) Basis 1. Meaning 2. Demand curve Extension of Demand Other things being equal, when with a fall in price, demand for a commodity rises, it is called extension of demand. Under it, there is downward movement along the same demand curve (from A to B) as shown in Fig. But the consumer remains on the same demand curve. Downward Movement A P B P 1 Increase in Demand An increase in demand implies that at a given price, a large quantity is purchased. Under it, consumer s demand curve shifts upward to the right. as shown in fig. Price D D 2 Upward shift of the demand curve O M M 1 Quantity O Demand D D 1 3. Example Price Demand (Rs per unit) (Units) Cause It is caused by a fall in price of the commodity. Price Demand (Rs per unit) (Units) It is caused by the following factors : (i) Increase in consumer s income. (ii) Rise in the price of substitute commodity. (iii) Fall in the price of c o m p l e m e n t a r y commodity. (iv) Increase in number of consumers. [5] A.7 (i) The concept of elasticity of demand is of great importance for producers, farmers, workers and the government. Importance to a producer. Every producer has to decide the price of his product at which he has to sell it. In deciding it, elasticity of demand becomes inportant for him. If the demand of his product is less elastic, he will fix up a higher price and vice-versa. If the producer is a monopolist, his price discriminatory policy would depend upon the elasticity of demand in different markets. Discrimination

9 (ii) (iii) (iv) would be profitable for him only when elasticity of demand is different in different markets. Importance to a Finance Minister. The Finance Minister of a country makes use of the concept while imposing taxes. He often taxes those commodities whose demand is less elastic. An increase in price (due to increase in tax) of these commodities will not affect their demand much and the Finance Minister can easily raise revenue from taxation. Importance in Factor Pricing. The concept of elasticity of demand is useful in the determination of factor prices. The factor of production for which demand is less elastic, can obtain a higher price as compared to those having elastic demand. For example, workers producing product having inelastic demand can easily get wages raised. Importance in International Trade. The idea of elasticity of demand enables us to determine the terms of trade between the two countries. If India knows that Pakistan will buy coal from her (i. e. demand for coal is inelastic), India would take advantage of her position and thus will increase price of coal. [5] (b) There are five types of elasticity of supply : - (i) Perfectly Inelastic Supply : If there is no change in quantity supplied with S changes in the price of the product, then the supply of that commodity is perfectly inelastic (i.e., e s = 0). For example, when P 1 price per kg, increases from Rs 2 to Rs.3, the quantity supplied may remain P unchanged at 10 units. The supply curve will be a vertical line. P 2 The figure clearly shows that quantity supplied is fixed at OQ, whatever the O Q Quantity Supplied price. At all points on such a straight line supply curve, price elasticity of supply will be zero. Price (ii) Perfectly Elastic Supply : If there is an infinite change in quantity supplied in response to a small change in price, the supply of that commodity is said to be perfectly price elastic (i.e., E s = ). It is purely an imaginary concept. If we calculate the elasticity of supply, the numerical value of elasticity of supply will be infinite. Elasticity of supply is infinite, which means that P S the quantity supplied may increase or decrease up to any extent irrespective O Q of change in price. Quantity Supplied Perfectly elastic supply is shown graphically in the above Figure. PS is the perfectly elastic supply curve which is a horizontal line. It shows that at OP price, any quantity of the commodity can be supplied Price

10 (iii) Relatively Elastic : Supply of a commodity will be said to be elastic, if the percentage change in quantity supplied exceeds the percentage change in price. Consider the following supply schedule. If we calculate elasticity of supply in the above example, we will find that it is more than one. Let us work it out. e s = Q P = P Q = = 1.5 It implies that one per cent changes in price leads to 1.5 per cent changes in supply. In such a case, supply curve meets -axis above the point of origin as shown in the Figure. Supply Schedule of commodity Price Quantity Supplied (Rs.) (Kg.) Quantity Supplied (iv) (v) Relatively Inelastic or Less than Unit Elastic : Supply of a commodity will be said to be inelastic if the percentage change in Supply Schedule quantity supplied is less than Price per unit Quantity Supplied the percentage change in price. (Rs.) (Units) Consider the following supply schedule. 1,000 2, Here Percentage change in supply is less than the percentage change in price e s = Q P = = 0.5 P Q It implies that one per cent change in price will result in 0.5 per cent change in supply. The supply curve SS is an inelastic supply curve which meets -axis when extended to the right. Unit Elastic : The supply of a commodity is said to be unit elastic when percentage change in supply is equal to Price percentage change in price Q P = =1 P Q 5 20 Price Quantity Supplied Consider the following supply schedule Quantity Supplied In such cases, a straight line supply curve passes through the point of origin as shown Quantity Supplied in figure. [5]

11 A A tax is said to be progressive when the rate of taxes increases as the tax payer s income increases. Tax base (Income) 10,000 15,000 20,000 Rate of tax (%) 5% 10% 15% Amount of Tax (`) The above table clearly shows that the tax rate increases with the increase in income. For each income slab, there is a different rate of T taxation. Under progressive system of taxation, the tax liability increases not only in absolute terms but the proportion of income tax also increases. In the given figure, - axis measures the tax P base while rate of tax is measured on vertical O axis. PT line shows the progressive rate of Tax base (Income) taxation. As the tax base (i.e., income) changes, the rate of tax also changes. [5] (b) The five types of public expenditure are : Rat eof Tax Protective expenditure Expenditure incurred to protect the country from foreign aggression and to maintain law and order situation within the country is called protective expenditure. It includes the expenditure incurred by the government on defence, police, courts, jails, etc. Primary expenditure Primary expenditure includes the following four heads of expenditure : (i) defence (ii) law and order (iii) civil administration and (iv) debt services. This expenditure is very essential for the existence of any state. Commercial expenditure Commercial expenditure helps commerce. It consists of expenditure on the commercial activities such as bounties, industrial exhibitions, etc. Secondary expenditure All other expenditure of the government other than primary expenditure fall under this category. Secondary expenditure includes expenditure on health, education, poor relief, unemployment, insurance, famine relief, etc. It also includes expenditure on roads, railways, irrigation canals, post and telegraph, subsidies for industrial and agricultural research, etc.

12 Direct payment Direct payment refers to those kinds of expenditure against which the government obtains goods and services. Expenditure incurred on defence, education, health, etc. are non transfer expenditures because in return for such expenditures, the government obtains the services of army personnel, doctors, teachers, etc. Constant expenditure It is that type of expenditure which does not depend upon the extent of use by the people. For example, expenditure on defence which is incurred irrespective of the number of people using the services. People have no influence upon the amount of public expenditure that the government decides to spend. Transfer payment Transfer payments refer to those expenditures against which there is no corresponding transfer of goods and services to the government. Expenditures incurred on old-age pension, unemployment allowance, interest on national debt, etc. fall under this category. Variable expenditure It refers to that expenditure which increases with every increase in the use of public services by the people. For example, expenditure on postal service, telephone service, etc. Revenue expenditure Revenue expenditure includes all current expenditure on administration defence and public commercial undertakings such as railways, post and telegraphs and grant in aid to the states. This type of expenditure does not result in the creation of assets. They are also called current or non developmental expenditure. Capital expenditure Capital expenditure includes all capital transactions including defence and capital transactions of public commercial undertakings. Expenditure on acquisition of assets, land and buildings, machinery, equipment, loans and advances granted by Central Government to State and Union Territory Governments are examples of capital expenditure. [5] A.9 Production requires use of factors of production like land, labour, capital & enterprise. These factors receive remuneration. Land receives rent, labour receives wages, capital receives interest & enterprise earns profits. These remunerations are called as cost of production. If the cost of production increases, the firm has to increase the price of the product to compensate for the increased cost. Such rise in price is called cost-push inflation. The cost push inflation is caused by the following factors : (i) Rise in Wages : Rise in wages has been considered as the main determinant of cost push inflation. This is because in modern times, workers have organized themselves into strong trade unions which have succeeded in getting higher wages for their members. (ii) Increase in the Price of Basic Materials : Cost push inflation is also caused by increase in the prices of some basic materials, such as steel,

13 basic chemicals, oil, etc. Since, these materials are used directly or indirectly in almost all the industries, any increase in their price affect the whole of the economy and the prices everywhere tend to increase. (iii)higher Taxes : Another important cause of cost push inflation is the imposition of higher taxes on commodities, like excise duties, sales tax etc. These taxes are largely passed over by the producers to the consumers by the way of taxes. [5] (b) Commercial Banks can advance loans in various ways. Commercial banks give loans and advances to businessmen, farmers, consumers and employers against approved securiries. Approved securities refer to gold, silver, bullion, government securities, easily saleable stock, and shares and marketable goods. The banks advance following types of loans : Cash Credit : Under this, the borrower is allowed to withdraw upto a certain amount on a given security which comprises mainly stocks of goods and bills receivable from others. But interest is charged on the amount actually withdrawn. (b) Overdraft : It is the most common way of lending. Under it, the borrower is allowed to overdraw his current account balance. Overdraft is a temporary facility. (c) Short term loans : Under it, loans of a fixed amount are sanctioned. The sanctioned amount is credited in the debtor s account. Bank charges interest on the whole amount from the day it was sanctioned. (d) Discounting bills of exchange: Commercial bills are debt instruments which facilitate exchange of goods and services. Suppose seller A is selling goods to buyer, B, the exchange will get settled on the payment of money. But if the buyer does not has finance to honour the exchange, the seller will draw a bill upon the buyer taking a committment from the latter to pay the exchange amount at it s maturity. If the seller, i.e., creditor of a bill of exchange wants money immediately, the bank provides him the money by discounting the bill of exchange. It deposits the amount of the bill in the current account of the bill- holder after deducting its rate of interest for the period of the loan which is not more than 90 days. When the bill of exchange matures, the bank gets its payment from the banker of the buyer who accepted the bill. (e) Money at Call (or Very Short - term Loans ): Such loans are very short period loans and can be called back by the bank at a very short notice of, say, one day to fourteen days. Such loans are repayable immediately on demand, hence, they are described as demand loans. [5] A.10 The primary functions of money are : (i) Medium of Exchange : Medium of exchange is considered to be the first and the most important function of money. As money has the quality of general acceptability, all the exchanges in an economy take place in terms of money. While functioning as medium of exchange, money benefits the society in many ways : (1) It overcomes the difficulties of barter system. (2) It promotes transactional efficiency in exchange with minimum effort and time. By acting as an intermediary, it increases the ease of trade.

14 (ii) (i) (ii) (iii) (3) It allows freedom of choice in the sense that a person can use money to buy goods of his choice from people who offer him the best bargain. Measure of Value : The second fundamental function of money is that it acts as a common measure of value. Money serves as a unit of measurement in terms of which the values of all goods and services are measured and expressed. Money is a useful measuring rod of value only when its own value remains stable. The value of money is linked to its purchasing power. As the general price level increases, a unit of money can purchase lesser amount of goods and services. So the value or purchasing power of money declines. Money also acts as a unit of account. The Secondary functions of money are : Standard of Deferred Payments : When money is generally accepted as a medium of exchange and a unit of value, it naturally becomes the unit in terms of which deferred or future payments are expressed. This function in fact is an extension of the medium of exchange function of money. Here again, money is used as a medium of exchange, but this time the payment is spread over a period of time. Money has successfully performed the function of a standard of deferred payments because, firstly, its value is relatively more stable than that of other commodities. Secondly, the element of durability is higher as compared to other commodities and finally, it possesses the quality of general acceptability. Store of Value : Money also serves as a store of value. People can now keep their wealth in the form of money. Money allows us to store surplus purchasing power which can be used at any time in future to purchase goods and services. In simple words, money enables people to save a part of their current income for spending in future. It was Keynes who first realised the store of value function of money and regarded money as a link between the present and the future. Transfer of Value : Money also functions as a means of transferring value. Through money, value can be easily and quickly transferred from one place to another because money is acceptable everywhere. It is because of this function of money, people can buy goods at far off places for the satisfaction of their wants.they can also purchase immovable property at any specific place for money. [5] (b) (i) (ii) (iii) (iv) (v) The ways in which consumers are exploited by manufactures and traders are mentioned below : Underweight and Undermeasurement : The goods being sold in the market are sometimes not measured or weighed correctly. Sub-standard Quality : The goods sold are sometimes of sub-standard quality. Selling of medicines beyond their expiry dates and supply of defective home appliances are generally the regular grievances of consumers. Duplicate Articles : In the name of genuine parts or goods, fake or duplicate items are being sold to the consumers. High Prices : Very often the traders charge a price higher than the prescribed retail price. Lack of Safety Devices : In order to increase the sale of their products, some producers especially of electrical foods, electronic devices and such other appliances, try to produce things of poor quality without caring for the standard safeguard norms. Such things prove very dangerous for the customers and some are even involved in serious accidents.

15 (vi) Artificial Scarcity : In order to get more and more profit, certain traders resort to hoarding of things thereby creating artificial scarcity. They sell these things later on at higher prices. (vii) Poor After-sale Service : Many of the high cost durable items, such as electrical or electronic equipments, home appliances and cars etc. need adequate after-sale care. The supplier does not provide the satisfactory after-sale services despite the necessary payments. (viii) Adulteration and Impurity : In costly consumer items such as oil, ghee and spices, adulteration is made in order to earn higher profits. This causes heavy monetary loss to the consumers as well as spoil their health. (ix) Rude Behaviour and Undue Conditions : In matters like LPG gas connection, fixing of a new telephone line, procurement of licensing items etc., consumers are often harassed and undue conditions are put before them.