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Theory:

 
Direct speech is the report of the exact words spoken by the speaker.
Example:
Priya VR (7).jpg
The first statement, "The girl said, "I am happy", is a Direct speech. Direct speech refers to reporting someone else speech using the speaker's actual words.
Reporting the message of the speaker in our own words is called Indirect speech.
Example:
Priya VR.jpg
The second statement, "The girl said that she was happy" is a Reported Speech or Indirect speech because some other person described the girl's state of mind.
Rules for changing Direct into Reported Speech (Indirect speech):
Rule 1: When the reporting verb of direct speech is in the past tense, all the present tenses are changed to past tense in indirect speech. We should not use inverted commas (") or question marks (?) when we are changing it into reported speech.
Example:
The boy said, "I am fine".
Here, the reporting verb (said) is in the past tense. So when we are changing the direct speech into reported speech we should change all the verbs into past tense.
 
The boy said that he was fine. (Indirect speech)
In this statement the verb "am" changed its form as "was" while getting converted into reported speech or indirect speech.
Rule 2: In indirect speech, the tenses do not change if the words used within the quotation mark (") talks of a habitual action or about universal truth.
Example:
The mother said, "We cannot live without air". (Direct Speech)
Here the statement given inside quotes speaks about the universal truth. So the tenses do not change while converting into Reported speech.
The mother said that we cannot live without air. (Reported Speech)
Difference between Direct speech and Indirect speech:
 
S.No
Direct speech
Indirect speech
1
A direct speech is also known as Quoted Speech.An indirect speech is also known as Reported Speech.
2
The direct speech makes use of punctuation marks.There will not be any punctuation marks for an indirect speech except for a period at the end.
 
Reported Speech from the lesson "A Birthday Letter"
Change the following questions from direct to reported speech:
 
1. Nehru said "My presents cannot be very material or solid".
Answer: Nehru said that his presents couldn't be very material or solid.
2. Nehru said "I have written a very long letter to you".
Answer: Nehru said that he had written a very long letter to her.
3. Nehru said to Indira "Bapuji has helped the oppressed free and happy".
Answer: Nehru told Indira that Bapuji had helped the oppressed free and happy.
4. Nehru said to Indira "It is no easy matter to decide what is right and what is not".
Answer: Nehru told Indira that it was no easy matter to decide what was right and what was not.