Difference between says and said in Direct speech

I would say that you would use says when you're talking about something which has been said very recently and is still true. For example:

You and Mike are in the living room. He says "I'm hungry". You go into the kitchen and say to another friend "Mike says he's hungry, so shall we make some lunch now?"

D.S. : Kamala said, 'I meet (simple present) my friend often.'.
I.S. : Kamala said that she met (simple past) often.
A reported verb in the simple past in direct speech remains as it is even in the indirect speech, only if the reporting verb (verb outside the quotations) is in the present/ the future tense
D.S.: Kamala says, 'I went there yesterday'.
Here the reporting verb 'says' is in the present tense. So the tense of the reported
verb, 'went' (simple past) remains as it is.
I.S.: Kamala says that she went out yesterday.
If the reporting verb is in the past tense the tense of the reported verb
must be changed and the simple past must be changed into past perfect,
whether it is an immediate past action or distant past action. ('long past' as
you say)
e.g. : The constable said to the inspector, 'We arrested him ten minutes
ago' (Ten minutes ago- not distant/ long
past). Even then the I.S. is:The constable told the inspector that they
had arrested him ten minutes before
It is not question of near/ immediate past or distant past/ long past. If is depends on whether the reporting verb is in the present or the past tense.
Q. (i) I read in a book (DGP publications) that long past actions changed from D.S to I.D.S
simple past - Past perfect tense.
e.g.: He said, 'Rama Killed Ravana'
He said that Rama had killed Ravana.
(ii) He said, 'I lived many years in England.'
He said that he lived many years in England.
Please explain above example.
A. (i) D.S. : The teacher is saying, 'Rama killed Ravana'.
I.S. : The teacher is saying (Reporting verb - present tense) that Rama killed
Ravana. (Correct). Here, we don't say,
Rama had killed Ravana.
(ii) Similarly: D.S. : He says, 'I lived many years in England'.
I.S.: He says that he lived many years in England.
D.S.: He said, 'I lived many years' in England.
I.S.: He said that he had lived... in England.
Please understand the use of the past perfect tense correctly. The past perfect is used for the earlier of two past actions.
He told me that he had seen the movie. There are two past actions here - 1) His
telling me, and 2) his seeing the movie. Both are past actions. However, his seeing
the movie is the earlier, and his telling me about it is the later past action. So, his seeing the movie - must be in the past perfect tense.
Also look at the following:
He slowly got up from bed. He remembered what had happened the night before. Two
strangers had entered his room about 6 in the evening yesterday. They had hit him
hard on the head. That was all that was able to recollected. He now looked around. His wrist watch and rings he had kept on the table were no longer there. He understood that the strangers had taken them away.
Observe that his getting up slowly is a past action. all the other events had taken place 'yesterday', that is, they are all earlier past actions. So they are in the past perfect tense. So the use of past perfect has no connection with time of happening.