family pension calculation for eligible dependents of central government employees who die or abscond while in service

Friends first of all, today I am giving you details of family pension to dependents of central government employees.

Yesterday I read Google news about pension calculation from1.1.06 for central Government employees.

Further, Government employee receives pension calculated on the basis of last pay or average of last 10 months pay.

Thus, Pension is 50% of average pay or last pay as the case may be.

Now, the minimum pension as per seventh pay recommendation is Rs9000/- per month.


what is family pension of central government employees and who are eligible and how.

First of all, dependents/spouse of Central government employees receive family pension.

Further Commencement of Family pension depends on conditions given below.

Family pension becomes due after employees death while in service or death after retirement.

Firstly, Spouse is eligible to receive family pension under the rules.

Unmarried Sons/daughters up to 25 years of age are eligible.

Even, Widowed /divorced daughters upto the date of remarriage/ death irrespective of their ages are eligible.

Also disabled sons/daughters gets family pension for lifetime.

Since,the disability manifested when the government employee was alive .

Simultaneously, the disability is depriving him of earning for his livelihood.

So, giving family pension to defacto guardian who is caretaker of disabled person .

Thus,in absconding cases also family pension is same like death case. Furthermore,in such cases family pension commence from the date of First Information Report with the police.

Calculation of family pension of central government employees

1.30% last pay = family pension

2. Pension

whichever is less

Calculation of Enhanced family pension

Family pension X2 = Enhanced family pension


whichever is less

Thus,this enhanced family pension is payable to the eligible family member for seven years from date of death /FIR or 67 years which ever is earlier.

Thereafter,Family pension is payable to eligible family member . Dearness relief @ the rate of 12% on basic Enhanced family pension or family pension is payable after 1.1.19. Minimum family pension with effect from 1.1.16 is Rs9000/-

Also,enhanced family pension is not payable for employees who have died while in service after rendering less than seven years service.IN SUCH CASES NORMAL FAMILY PENSION IS ONLY PAYABLE .

how is family pension to family of central government employees payable

Every eligible family member submits application for Family pension to the concerned authority .ie. treasury/ heads of department with copy of nomination, death certificate or required documents to determine their eligibility. The eligible family member thereafter receives family pension after proper scrutiny/authorization as the case may be .

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what is DEARNESS ALLOWANCE calculation

present dearness allowance and dearness relief calculation

Dearness allowance meaning in English allowance given for compensating the expenditure involved in purchase of items dear or required for day to day living.

First of all According to Wikipedia Dearness Allowance definition(DA) is cost of living adjustment allowance .

Furthermore, Dearness allowance of central government employee and dearness allowance of state government employee is based on dearness allowance order issued by Finance Ministry or Finance department as the case may be. Also, Public Sector Employees as well as Pensioners in India, Bangladesh get da. Dearness allowance on pension is termed as dearness relief.

Variations of dearness allowance calculation

Dearness allowance for bank employees, dearness allowance in BSNL and dearness allowance da in private companies ,dearness allowance psu, dearness allowance railway employees, is as per dearness allowance slab or dearness allowance percentage as per their dearness allowance rules. However in respect of dearness allowance of central government employees the dearness allowance rate is the same all over India . Dearness allowance chart is prepared according to Dearness allowance revision declared. Recently in Dearness allowance news 5% dearness allowance hike was declared to all central government employees and this is called dearness allowance to all central government employees July 2019. Dearness allowance arrears is paid in the month of October 2019.

Exactly, Consumer Price index is base for da calculation. This is also called dearness allowance cpi.

Moreover, from Dearness allowance history it is noted that Second World War DA means Dearness Food Allowance.

Thus,this concept was first of all introduced by Textile Industry in India.

Generally Dearness allowance hike is result of inflation. You can check the dearness allowance history and compare the inflationary trends.

It is based on location and pay commission also , probably it varies. Dearness allowance Gujarat, Dearness allowance Maharashtra, Dearness allowance Kerala government, Dearness allowance in Mumbai, dearness allowance Uttar Pradesh, dearness allowance Uttarakhand, dearness allowance Delhi, dearness allowance tamil nadu etc varies as per their government’s dearness allowance order. It will also vary with dearness allowance table 6th pay commission, dearness allowance rule in 7th pay commission as per the pay commissions existing in those states.

You can also read pay commission

calculation of da?

Now, calculated as % of basic pay in respect of Employees. Likewise % of basic pension in respect of Pensioners.

Thus,calculation based on AICPI

For Central Government Employees

DA% =( Average of AICPI ( Base year 2001=100) for the past 12 months – 115.76/115.76)*100

Also,For Central PSU

Thus,DA% =( Average of AICPI (Base year of 2001 =100) for the past 3 months-126.33/126.33)*100

what is CPI ?

Now, Economic Times defines CPI as comprehensive measure used for estimation of price changes in a basket of Goods and services.

So, these include transportation ,food and medical care representative of consumption expenditure in an economy.

However,CPI gives an idea of inflation.

Thus, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Furthermore, increase in CPI calculated by adding together a sampling of product prices of a previous year.

Thus add together current prices of same products .

Also,divide the total of current prices by old prices, then multiply the result by 100.

again, subtract 100 to find the percentage change in CPI. Dearness allowance base year taken as 2001 for the purpose of dearness allowance calculation.

However, for AICPI you reqested to verify this site

Dearness allowance formula

So, For 1.1.19 dearness allowance rate derived like this that means average prices upto December 2018 taken=(288+288+287+288+301+289+291+302+301+302+301+302)/12=269.91-261.4=8.51*100=851/261.4=3.2approx equals 3% So also for July 2019 average cpi upto June 2019 taken and calculated as given here.

Thus,this is the highest Dearness allowance news to central government employees after 1.1.2016. Dearness allowance declared in the month of August 2019 for July 2019 is 5%.State government Dearness allowance rates are same as central government employees in case of Maharashtra. Dearness allowance current rate is 12%. It includes dearness allowance current and dearness allowance increase.

Dearness allowance v/s HRA

This means Dearness allowance versus house rent allowance. Dearness allowance for central government employees paid twice in a year once in January and then in July. However Dearness allowance declared rate comes in January and Paid in April along with dearness allowance arrears and so also in July and paid in October. For dearness allowance in banks paid quarterly. This is as per announcement of labor Bureau. DA and HRA are % of basic salary.But their percentages are different . This rate depends on CPI. while House rent allowance rate percentage is fixed taking into consideration ABC class cities divided on the basis of population.

Dearness allowance and conveyance

Here Dearness allowance rate is different from conveyance because conveyance is slab wise while DA is percentage. Secondly Dearness allowance paid on Conveyance also. Conveyance is not taxable while dearness allowance is taxable.

Dearness allowance on Tour

While going out of station for official work Dearness allowance and travelling allowance paid to avoid hardship to the official.

Even, For more details see the site specified above.


Now do you understand how your Dearness allowance calculation.

Also, if you have any more information you can add up in my comments.

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what is Central pay commission and pay commission structure in every pay commission

What is Pay Commission?

source : wikipedia & Zee network

First of all, in 1946 January, Central Pay commission start functioning , and submit pay commission report to Interim Government of India in May 1947.

First Pay commission

Srinivasa Varadachariar Ist pay Commission chairman for Civilians.

The minimum pay was Rs55 amd maximum pay was Rs2000.

The ratio of minimum pay to maximum pay was 1:36.



The pay commission 1 focused on living wages.


The second pay commission started in May 1957 and submitted its report after two years.

The IInd pay commission chairman was Jagannath Das.

This commision also insisted on living wages and focussed on recruitment with minimum qualification.

The minimum salary wasRs80 after merging 50% DA with basic pay and maximum salary was Rs3000.

The ratio of minimum to maximum was 1:37.5.

In case of Armed forces departmental committee setup called Raghuramiah committee.


The third pay commission was setup in April 1970 and gave its report in march 1973.

The pay commission chairman was Justice Raghubir Dayal.

The three components inclusiveness, comprehensibility and adequacy of pay structure the framework in which the pay commission worked.

A government servant continues on his job means he is adequately paid .

so it extended beyond subsistence level and minimum wages as per labor Act implemented.

Now the minimum pay as per labor Act was rs185/-. Later on this revised to Rs196/-

In third pay commission the fixed pay structure and pensionery benefits of Armed forces on par with civil services was implemented.

IPS and other civil service officers demanding pay & pension of Armed forces fixed on par with CIVIL SERVICES .

SO MRS GANDHI THEN PRIME MINISTER terminated one rank one pension taking exparte decision to bring parity between civil & armed forces.

The minimum pay was Rs196/- and maximum Rs3500/-.

The ratio between minimum & maximum 1:17.9.


The fourth pay commission constituted in June 1983.

Given in three phases for four years.

The pay commission chairman was P N Singhal.

The minimum pay was Rs.750/- and maximum pay was Rs8000/-.

The ratio of minimum pay to maximum pay was 1:10.7.

Government headed by Rajiv gandhi again brought the concept of ‘one rank one Pay’.

later on resented by Armed forces and refixation of pay done from 1.1.86.


The fifth pay commission constituted in April 1994.

The chairman was Justice Ratnavel pandian.

The minimum pay was Rs2550/- and maximum pay was Rs30000/-.

The ratio of minimum pay to maximum pay was 1:10.2.

Pay scales reduced from 51-34.

Government workforce slashed by 30%.

World Bank criticized fifth pay commission as ‘single largest shock ‘ to the public finance of the nation.


The Sixth pay commission constituted in July 2006.

The chairman was Justice Shri B N Shrikrishna.

Pay Scales reduced and pay bands introduced.

Gr D cadre removed.

Minimum salary was Rs 4860/-+Rs 1800/- and maximum salary was Rs 80000/-.

The ratio of minimum pay to maximum pay was 1:11.4.


The Seventh pay commission constituted in February 2014.

The chairman of Seventh pay commission was Justice Ashol Kumar Mathur.

The minimum pay was Rs 18000/- and Maximum pay was Rs 225000/-.

The ratio of minimum pay to maximum pay was 1:14.

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First of all, When I read through the blog post by Lovemoney on MSN regarding different currencies and their worth to nothing I was shocked . Further, I felt a shiver in my heart .

SO I WENT THROUGH DIFFERENT CURRENCIES AND THEIR WORTH. Also, I went to the blog to see the weakest currencies of the world and the international purchasing power of our rupee.

SO,My God our condition is not so bad. However let me give you my analytics and observations about different currencies and their worth  .

The weakest currencies in the world when comparing different currencies and their worth are given below

Most noteworthy, To buy 10 Australian dollar worth article I will be paying rs515/-,10 British pound worth article would cost me Rs903/-,10 Canadian dollar worth article would cost me rs536/-,10 Chinese yuan would cost me rs104/-,10 euros to cost Rs812/-,10 US dollars to cost rs756/-,10 Singaporean dollar to cost rs522/-, 10saudi rial to cost Rs192/-,10 swiss franc to cost rs720/-

1.Iranian rial 1USD =42515IRR (OFFICIAL RATE) 1USD=110000 IRR (BLACKMARKET)



















Really, It is very sad indeed imagining buying  loaf of bread by  carrying laundry bags or cartload of currencies is what we see while comparing different currencies and their worth. Almost their currencies are not even the worth of paper used for printing. So, these pathetic conditions prevalent in so many countries are seen when comparing different currencies and their worth. Thus, many of India’s trading partners including those in the emerging markets too have been depreciated against, Chinese Yuan and Japanese yen have also been depreciated against dollar.

Reasons for this situation and how to correct this

Really the main factors contributing are inflation, corruption, low purchasing power etc is seen while comparing different currencies and their worth. However, Inflation is a trend where demand for goods  is more than supply. THUS, To stabilize this supplies should increase thereby stabilizing the prices is the only solution to stabilize different currencies which are worth to nothing. now, Increased production with decreased costs and quality output will enable us to boost exports thereby creating a demand globally for made in India products. Finally, this is what we should ensure while comparing different currencies and their worth

Read this post will finance ever rule the world


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First of all, When you need money and there is no job means you are struggling. Further, Savings are melting. How to get the money is what goes on ?Also, you need money fast now. How to get it? This is the time you venture into several projects and join certain institutions for working and earning money. But undoubtedly you fall into a circle and your money gets wasted. so find out if money is evil or vice .

Money/Finance is not evil or vice. This depend on who holds this money and how he uses/invests it to multiply. It  is always said Money speaks only one language . It will come to help if saved  properly.
In those days Man used to buy land or invest in gold, diamond. But after Government restrictions are imposed so many factors related to land are examined like whether the land is agriculture/non agriculture, nature of soil,  escalating price of land , whether this land can be seized by government at a later date for public usage. To avoid these man started investing in high rise building  either ready built or under construction. However the fact remains is money evil or vice
Similarly Gold, silver, diamond are getting costlier. There is a limit on how much Gold a lady can possess.However the fact remains is money evil or vice
There are so many instruments these days like shares, stock, commodities, metals etc.These are held by share/stock market. The volatility of share markets, crash of stock markets of 1987 and 1994 bond market crash has been responsible for narrowed thinking if share market is suitable to all. These conditions are responsible for viewing money as evil/vice.
Anyhow in this context I would like to say three stories to prove that money  is not evil/vice and clarify the question is money evil or vice.

first story

1. A man won a lottery and wanted to buy BMW car.Further, He knew everything about the car.Thus, He had adequate knowledge of driving but no experience. Now he tried his hand on driving and crashed his newly bought car. Even though he possessed all the knowledge he could not save the car because experience is essential.Similarly knowledge about money is not enough but experience to use money properly is required The question Is money evil or vice is answered

second story

 2. A fisherman, priest and professor went on a boat to the nearby island. On,Seeing the surging waves fisherman expected a high tide, jumped into the waters and swam safely. Similarly,  The priest believer of god took God’s name and jumped into the water , swam safely. Now the professor who had adequate knowledge of swimming, but did not know swimming jumped into the water and was drowned. This shows alertness to take action comes through experience and so holding a experienced persons hand is better and not rely on just knowledge. Again the same point experience is reiterated. So the question is money evil or vice is answered.

the third story

3. A lady lived with her daughter. she was working in a export firm. Now years passed. The lady became old. She thought of starting her own firm which she and her daughter could work. Her boss came to know this. He came to know that this lady need money loan. He talked to her the difficulties of taking a loan before retirement. The lady was very determined. Now the boss went to that lady’s house and talked to the daughter. The daughter got convinced. She promised to stop her mother from taking the loan. When her mother returned from work, she spoke to  her mother. Her mother assured her that this decision will not put them to trouble.


Instead they can work on their business strategy and win. She also told her daughter about the selfishness of her boss to keep her working for him so that he has financial gains and he pays a salary. She made her daughter realize that in business you get profit and it is their own. By working hard they can make huge profits. In her job eve of she puts double the effort her salary may rise by say 10-20%. So she had decided to quit work and start her own because of her knowledge and experience.


So money is not evil/vice but it depends on the person who  puts it to money is evil or vice is answered.


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pay commission comes in how many years?

WHAT IS PAY COMMISSION ?-is it only revision of pay and pension?

Pay commission every ten years is a administrative system or mechanism of Government of India appoints the pay commission chairman who with his office will work out the pay commission hike and submit the pay commission recommendations in the form of pay commission report.

Seeing the  pay commission news in our  daily  news I too thought of writing this . I am a government pensioner. How  we look out for this pay you commission setup and also expect a big rise.  let me give some details about 07th pay commission .

Pay commission history in India

First of all  Government of India set up this  mechanism/System called Pay commission, in 1956. Furthermore,  Pay Commission every 10 years  gives

1.Upgradation of salaries,  

2.other monetary grants

3. service improvements

4. pension upgradation

benefitting all Central government employees, pensioners and Armed forces.

Alongside   Pay commission for State Government employees, pay commission in railway,  Union Territory Governments, Village Panchayat, Pay commission for teachers, pay commission ugc for University teachers, pay commission  psu for Semi government Bodies,  pay commission for bsnl, government Corporations, Municipalities, pay commission for judges etc also determine their pay scales on par with Central government scales.

Also according to Wikipedia , Pay commission give its recommendations regarding changes in salary structure of its employees.

 So, now 07 pay commissions were set up on a regular basis .

Finally, Pay Commission reviews and make recommendations about work and pay commission fixation of all civil and armed forces of GOI .

Almost, pay commission duration takes two years to give pay commission recommendations and generally pay commission arrears is paid .


is only revising pay and pension  pay commission work

                I st to 5th pay commission

Pay scales from  pay commission1 to fifth pay commission report had fixed increments .

This point I will explain with example.

For eg 2000-200-3600-EB-300-5100 I have given a fictitious scale to explain increment and EB i.e efficiency bar.

Regular yearly  increments are Rs200/- up to Rs3600/- starting from Rs2000/- which is beginning of scale.

After 7 yearly increment Rs3600/- is reached.

After Rs3600/- appointing authority gives EB crossing certificate.

 If EB crossing certificate is not given then the employee stagnates at Rs3600/-.

However, Such situation generally do not arise. 

So,there are 13 stages in this scale which means it allows 13 pay commission yearly increments.

So,every pay scale had 13-14 stages from Ist to Vth pay commission along with efficiency bar crossing etc.

Thereafter on  reaching maximum of pay commission  scale  the government servant stagnates.

He remains stagnated unless he receives  promotion in normal course or qualifies promotional exams or his upgraded pay commission scales of new pay commission or he goes to other office in higher post  on deputation.

                                 6th pay commission calculator

In sixth pay concept of 6 pay  commission scales are introduced.

5 posts are merged  in one pay commission scale and differentiated with pay commission grade pay.

3% or .03 increment on (pay+grade pay)was pay commission yearly increment.

.03(pay+grade pay) = new increment.

The maximum of scale concept still prevails

                                      7th Pay Fixation

In the seventh pay the concept of grade pay is merged i.e. 2.57 (pay+grade pay) as on 1.1.16 is new pay from 1.1.16 and  fitted in pay matrix on  next stage.

40 stages exist and maximum of scale is still prevailing.

                           Dearness Allowance

Pay commission DA  paid half yearly  is given based on Price Index .

This is a solution to beat inflation.

After pay commission DA exceeds 50% of basic pay need for pay commission update is felt .

After 100% pay commission DA up gradation of pay scales is  actually is done to be on par with other commercial units or public sectors.

Also read Central pay commission – History

Why seventh pay fixation is not satisfactory? 

 Central government employees are totally unsatisfactory due to the following three reasons.  

1. Only 14.27% raise in pay, the lowest increase in the last 70 years.

2. The difference between lowest and highest pay was  1:10 in fifth and sixth pay commission increased to 1:14

3. The  Pay commission HRA slab rates lowered from 30%,20%,10% for Group A,B,C  cities to 24%,16%,8%.

4. Union demands   Pay commission fitness factor of 3.68 times  pay as on 1.1.16 instead 2.57 times  pay as on 1.1.16 is given 

5.Pay commission minimum pay hike is Rs18000/- whilst Union demands Rs26000/- to keep the ratio of lowest and highest pay scale intact.

Gr A,B,C places are differentiated on the basis of population.

Benefits of Pay Upgradation

The first two pay commissions provided subsistence wages for government employee and his family.

The third and fourth pay commission provided better living conditions beyond subsistence for government employee and his family.

The fifth and sixth pay commissions provided  improved living conditions and better output.

The seventh pay commission targeted at performance efficiency, public opinion for promotions, reports of  individual and office.

To improve the morale of the government employees 2.57 times of pay/pension as on 1.1.16 was given.

However Union, representative of employees  demanded 3.68 times  of pay/pension as on 1.1.16.

Actual benefits of pay commission are as follows.

is revision of pay & pension the immediate benefit ? Yes.

The outcome of this preliminary benefit along with other benefits are given below.

      Fight against corruption

First of all,  Good governance should ensure  subordinates are happy along with performance.

Even Adam smith in his Wealth of nations  indicated  wide disparity in sharing of profits between owners and labourers is disastrous .

Union represents voice of  all government employees. So Government must fulfil Unions legitimate demand. 

 Thus pay hike will stop employees from expecting small & big courtesies from public for doing work which still prevail in certain offices .

Bribery, Notorious behavior and other malafide intentions are  also controlled.

       Improvement in self image

Self image  of employee improves with a better figure on his salary sheet.

The concept ‘government office’ changes to ‘my office’ and a sense of importance toward work, colleagues, and superiors prevail.

It is work for self not  force, fear or  favor .

He takes responsibility for his actions.

However, criteria for better performance is, healthy working conditions and good atmosphere.

                          Lifestyle improvement

His living style improves because  of purchasing power .

Even today the highest paid officer in central government cannot think of buying flats in South Mumbai.

Affording a bigger house in suburbs along with second home in village is possible.

Mode of travel to work changes.

Also he may travel in his private car.

However owning a BMW , Mercedes, or a helipad is beyond reach.

He can provide good schooling & college for his children because major part of the tuition fees is reimbursed.

 He can take a loan for pursuing studies abroad for his children and also for himself.

Good upbringing means healthy society.

Travel to home town and other places is possible because of LTC .

Now even travel to SAARC countries has been covered.

Still LTC covering travel to all countries is not admissible.

Better Health conditions

Health is another consideration.

Both govt. employee and his family is covered in health schemes .

Pensioners and their family are also covered.

Pensioners can avail medical facilities in empaneled hospitals on non payment basis.

There is  health center to give regular checkups  for small ailments.

For chronic ailments empaneled hospitals are available.

However the only hurdle is that good hospitals come in and go out of panel.

So continuity in treatment  of patient is impaired.

Patient stops regular follow ups in chronic ailments.  The high hospital rates are not affordable.

The private hospital rates are over and above the Cghs prescribed rates.

Since government rates are not revised regularly the CGHS prescribed rates is very low.

Good private Hospitals are not convenient with these government rates.

In case of retired person, government takes the initiative of paying  treatment costs.

However the hospital authorities complain of non receipt of dues. 

So they either cancel their panel listing or dilly dally  patients. 

This makes government employee, pensioners  and their family suffer on account of health .

Retirement benefits

Retirement benefits is based on last pay.

When last pay is high the retirement benefits also follow.

A good retired life means

1. good pension with  lumpsum in bank to foot his bills if required.

2. Free health care , free life after shouldering all responsibilities.

A retired person aspires this feature of retired life  and thus his self dignity improves.

He also becomes a productive person to society helping many NGO’s on a honorary basis.


Government functions are in a framework of rules and regulations.

Digitization enforces rules strictly .

Similarly enhanced wages will ensure strict implementation of rules and not it’s leakages.

Staff do major part of governmental work .

 Increasing fitness factor and raising pay to motivate everybody. 

Exploit their potential and pacify their ego .

Fulfil their legitimate demand .


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Do you all agree Money/finance/financial transactions processing very important in our day to day working. Yet we see Money is only a tool and not authority. It gives power but does not mean it is powerful.

What is the beginning of Finance/financial transaction processing ruling our world?

First of all, man realized the importance of trade long time from now. Thereafter trade began with money and finance. Financial transaction processing started from here.

Above all, this necessitated a medium of exchange and transit from barter  economy. Also, this transition necessitated a currency called money. Most noteworthy is different countries have different currencies along with regulatory body for eg  RBI in India.

What is a regulatory body? What are their roles in finance ruling our world?

Similarly ,every country have their own regulatory agency or bank. A governmental body created by legislature to execute ,enforce and implement certain laws.

First of all, bank regulation involves two steps 1.  Licensing 2. Supervising.

Furthermore licensing is regulatory guidelines as per bank’s operation, financial soundness, managerial action . Moreover, supervision is ensuring that functioning of bank complies with regulatory guidelines and monitoring possible deviation from regulatory standards . Eg. Federal Reserve System ,Federal Deposit Insurance Corporation in US, Federal Conduct Authority , Federal Regulatory Authority in UK etc.

How money/finance ruling the world came into existence ?

It seems money invented as a medium of Exchange after immense struggle. Possibly, money is the road to all financial transactions processing . Furthermore,   a person’s measure  is money. Still, whether money or finance will rule our world is doubtful.

Lately bitcoin, cryptocurrency emerged. Certainly the main role of money is exchange medium.  conversion of bitcoin to euros or dollars is possible.


First of all,in earlier times in India a ruler portray his power in his own territory with his estates and Jagir. Furthermore, the strength of his defense forces, arms & ammunition, vastness of territory pictures his exact power to his rival kingdom. Moreover,the valued possessions, vastness of territory , unity etc reflected his authority to his neighboring kingdoms

Once upon a time India had 565 princely states ruled by kings/rulers. The major criteria to prove that the ruler was affluent  & powerful was size of his kingdom in all aspects.

comparison of curencies

Probably, country’s currency is compared with another  country’s currency. RBI HAS DEVALUED RUPEE AGAINST DOLLAR.

So,economists say this situation of currency getting devalued is because of several factors. The main reason which contribute to currency’s valuation is demand & supply of currency . will finance ever rule our world is question unanswered.

First of all on account of exports of products abroad the value of currency increases. Furthermore, in the reverse situation value of currency decreases. So money supply will be more than demand because RBI has issued lot of money. May be if a State earns more than it earns on taxes, then state issue more money to pay for deficit. Finally to prevent currency devaluation, lower down public debt. Above all,high interest  rates , raising incomes will prevent devaluation. Therefore high interest rates will attract NRI and foreign investors to deposit in our country. Finally,this way investors will buy our currency and our currency will appreciate.

How does Governments derive their economic power?

Governments derive their economic power from 4 key sources

  1. Print money 2.Issue 3. Taxation 4. Borrow

First of all,they hold monopoly in three areas. Furthermore in borrowing they print money to repay debts, certainly, when debts become onerous. Similarly open financial markets threaten future objectives. Another,large financial players, individual citizens  have the option to switch over to other tax regions with ease.

So, U.S. Government is waging a global war against its citizens to gain control over their taxable income. While, European nations are slow to give up their own taxation privileges.

Description of economic power

For the reason that printing money is the legal privilege and monopoly of Governments but currency soundness standards are strict. As a result, linking weak currency with stronger currency is done. LINKING OF PESO TO DOLLAR IS AN EXAMPLE.will finance ever rule our world is question till today?

what are the hurdles for regulation of financial markets?

Above all,openness of borders, difficulty in defining of territory which exists virtually are hurdles for regulation of financial markets. So all Governments can come together and establish global regulation. Even more individual governments should enforce minimum capital standards for internationalbanking.

Most noteworthy is the regulators are preserving a system which they are not thoroughly controlling.

Furthermore the  governments have immense control to change the markets with their policy moves. Even the financial authorities show how the markets reacts to their moves and financial transaction processing begins. So then one may wonder who is in charge. WILL FINANCIAL TRANSACTIONS PROCESSING RULE OUR WORLD?

How did uncertainty of finance appear?

Similarly the 1987 Stock market crash, 1994 bond market crash have made markets uncertain. Furthermore,changes in political scenario in any part of the world, natural calamities created volatility in markets. Finally this has resulted in Government versus market struggle. Certainly good governance and sound economic management of governments of the world can deter this world from entering into economic crisis.

Finally market regulatory bodies independence depends on Political or other situations in any part of the world. Even more now the question is will finance ever rule our world? So, till this situation improves,  Money /Finance ruling the world is only a dream.Probably Money /Finance can rule our mind but not this world.

You can also read Is money evil or vice


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