onomi     on epts and erminolo ies          22.11
                                                          guarantors provide in the form of an asset (like
        chinese wAll                                      land, building, etc.) while seeking a loan. The
     The segregation of the different activities          principal/primary security is usually the borrower’s
     of a financial institution (such as, jobbing,        personal guaranty, or the cash flow of a business.
     stockbroking, fund management, etc.) in order to          Except for highly creditworthy customers
     protect clients’ interest.                           (who can get loans against their signatures),
                                                          lenders always demand a collateral if the primary
        circuit limit                                     security is not considered to be reliable or sufficient
                                                          enough to recover the loan in case of a default—
     A limit of regular fall in share indices of Stock
                                                          lenders have the legal right to seize the collateral.
     Exchanges around the world after which the
     exchange are closed for further trading. For
     example, circuit limit decided for the BSE              closeD shop
     (Bombay Stock Exchange) has been fixed at 10 per     The requirement that all employees of a given
     cent. The time there is a continuous fall in the BSE firm be members of a specified trade union. It
     Sensex and it reaches 10 per cent, the exchange is   is a method of restricting labour supply and
     closed to further trading.                           maintaining high wages applied by a powerful
         Such a limit/provision prevents the share        trade union.
     market from crashing down.
                                                             collective proDucts
        clAssicAl economics
                                                          A product which can only be supplied to a
     A school of thought in economics based on the        group. Many goods and services provided by the
     ideas of Smith, Ricardo, Mill, etc. The school       governments fall in this category, such as, national
     dominated the economic thinking of the world         defence, police administration, etc.
     until about 1870, when the ‘marginalist revolution’
     took place.                                             committeD expenDiture
        cleAn coAl                                        The expenditure of the governments from which
                                                          they can not deny (as they have already committed
     Underground coal gasification and liquefaction       them to pay) are known as committed expenditure.
     which converts coal into liquid and gaseous          The liabilities such as ‘interest’ (of the internal as
     fuel alternatives is a recognised ‘clean coal’       well as external loans) and ‘pension’ (of the retired
     technology—handy in extraction of energy from        personnel of the governments) are examples of
     coal seams which connot be mined through             such expenditure.
     conventional methods.
                                                               By the year 2015-16, this expenditure for the
                                                          Government of India was 41.5 per cent of the
                                                          non-plan expenditure. Non-plan expenditure for
     Any item/asset which accompanies/subordinates/       the year was 73.8 per cent of the total expenditure
     supplements a primary item is known as collateral.   (plan pluc non-plan). The GoI has decided to
     The term is used in banking industry while           shift to the ‘revenue’ and ‘capital’ classification
     providing loans. This is also known as ‘secondary/   for its expenditure from 2017-18 (in place of the
     subordinate security’— which borrowers/              existing classification ‘plan’ and ‘non-plan’).