Business Environment : For Universities and Autonomous Colleges of Odisha

Cover
Contents
Preface
About the Authors
Chapter 1: Business Environment
	Introduction
	Meaning and Definition
	Salient Features
	Importance of the Study
	Environmental Factors
		Social Factors
		Economic Factors
		Cultural Factors
		Geographical Factors
		Technological Factors
		Political Factors
		Legal Factors
		Ecological Factors
		The Government Policies
		Labour Factors
		Competitive Market Condition
		Locational Factors
	Business Environment and Strategic Management
		Risk Overview
		Methods of Assessing Environment Risk
		Managing Environment Risk
	Market Opportunities
	Distribution of Household by Income, 1990–2000
	Recent Political Environment
		Relations with China
		Other Developments
		Domestic Developments in Trade
	Recent Economic and Financial Environment
		India Food and Drink
		Indian Automotives
		Global Economic Environment
		Multilateral Initiatives and Policies
	Case
		Case Question
	Summary
	Review Questions
	References
Chapter 2: Planning in India
	The Emergence of Planning
	The Planning Commission
	The National Development Council
		Functions
	Objectives of Planning in India
		Economic Growth
		Attaining Economic Equality and Social Justice
		Achieving Full Employment
		Attaining Economic Self-reliance
		Modernisation of Various Sectors
		Redressing Imbalances in the Economy
	Five-Year Plans
		First Five-Year Plan (1951–52 to 1952–56)
		Second Five-Year Plan (1956–57 to 1960–61)
		Third Five-Year Plan (1961–62 to 1965–66)
		Fourth Five-Year Plan (1969–70 to 1973–74)
		Fifth Five-Year Plan (1974–75 to 1978–79)
		Sixth Five-Year Plan (1980–81 to 1984–85)
		Seventh Five-Year Plan (1985–86 to 1989–90)
		Annual Plans (1990–91 and 1991–92)
		Eighth Five-Year Plan (1992–93 to 1996–97)
		Ninth Five-Year Plan (1997–98 to 2001–02)
	Distribution of Public Sector Outlay of Each Plan
	Tenth Five-Year Plan (2002–07)
		Introduction
		Objectives
		Targets
		Growth, Equity, and Sustainability
		Population
		Quality and Productivity of Employment
		Resources and Other Measures
		Central Finances
		State Financing
		The External Sector
		The Financial Sector
		Sectoral Policy Issues
		Conclusion
	Five-Year Plans—Achievements and Failures
	Eleventh Five-Year Plan (2007–12)
		Objectives and Challenges
		A Vision for the Eleventh Plan
		The Strengths of Our Economy
		Some Major Challenges
		Disparities and Divides
		Brief Policy Approaches of the Eleventh Plan
	Liberalisation and Planning
	Case
		Case Question
	Summary
	Review Questions
	References
Chapter 3: Industrial Policy
	Historical Background
		East India Company
		First World War
		Second World War
	Government’s Role
	Meaning and Objectives of Industrial Policies
		Meaning
		Objectives
	Industrial Policies
		Industrial Policy Resolution of 1948
		Industrial Policy Resolution of 1956
		Industrial Policy Statement of 1973
		Industrial Policy Statement of 1977
		New Industrial Policy Statement of 1980
		New Industrial Policy of 1991
		India’s Foreign Trade Policy of 1991
	Evaluation of the New Industrial Policy
	New Trade Policy of 1991
	The New Small-Scale Sector Policy of 1991
		Objectives
		Salient Features of New Policy
	Recent Policies for Micro and Small Enterprises (MSE) Sector
		Micro, Small, and Medium Enterprises Development Organisation
		National Small Industries Corporation Limited
		Definition of Micro, Small, and Medium Enterprises
		Performance of MSE Sector
	Case
		Case Question
	Summary
	Review Questions
	References
Chapter 4: Industrial Licensing
	Industrial Licensing in India
	Objectives of Industrial Licensing
	Industrial Licensing Act of 1951
		The Industries (Development and Regulation [D&R]) Act of 1951
		Provisions of Industries (D&R) Act of 1951
		Letter of Intent
		Exemptions from Licensing
		Industrial Licensing: A Critical Approach
	Industrial Licensing Policy
		The Industries (D&R) Act of 1951
		Main Provisions
		Industrial Licensing Policy of 1951–60
		Industrial Licensing Policy of 1960–70
		Industrial Licensing Policies of 1970–80
		Industrial Policy Statement of 1980–90
		Liberalisation in Industrial Licensing—1991 and After
	Policy Decisions
		Industrial Licensing Policy
		Foreign Investment
		Foreign Technology Agreements
		Public Sector
		MRTP Act
	Recent Industrial Licensing Policy
		Foreign Direct Investment (FDI)
	Annexure I
		Proposed List of Industries to Be Reserved for the Public Sector
	Annexure II
		List of Industries in Respect of Which Industrial Licensing Will Be Compulsory
	Annexure III
		List of Industries for Automatic Approval of Foreign Technology Agreements and for 51 Per Cent Foreign Equity Approvals
	Summary
	Review Questions
	References
Chapter 5: India\'s Monetary and Fiscal Policy
	I. Monetary Policy of India
	Concept and Meaning of Monetary Policy
	Objectives of the Monetary Policy
	Differences Between Monetary Policy and Fiscal Policy
	Meaning of CRR and SLR
	Impact of the Monetary Policy
	Measures to Regulate Money Supply
	Meaning of Some Monetary Policy Terms
	The Monetary Policy and IMF
	RBI’s Monetary Policy Measures
	RBI’s Monetary Policy, 2008–09
		Policy Measures
	II. Fiscal Policy of India
	Concept and Meaning of Fiscal Policy
	Objectives of the Fiscal Policy
	Fiscal Policy and Economic Development
	Techniques of Fiscal Policy
	Merits or Advantages of Fiscal Policy of India
	The Shortcomings of the Fiscal Policy of India
	Suggestions for Necessary Reforms in Fiscal Policy
	Fiscal Policy Reforms
	Fiscal Policy Statement, 2008–09
		Fiscal Policy Overview
		Government’s Strategy to Pursue Fiscal Consolidation
	Fiscal Policy—an Assessment
	Conclusions
	Case
		Case Question
	Summary
	Review Questions
	References
	Economic Trends
Chapter 6: Economic Trends
	I. The Indian Financial Systems
	Indian Money Market
		Concept and Meaning of Money Market
		The Composition of the Indian Financial System
		The Composition of the Indian Banking System
	Indian Capital Market
	Call Money Market
	Bill Market
	Financial System
	Structure of the Financial System
	Functions of the Indian Financial System: Promotion of Capital Formation
		Recent Trends in Money Market
	II. the Price Policy
	Price Movement Since Independence
		Price Situation During 1951–71
		Price Situation During the 1970s
		Price Movement During Janata Rule (1977–79)
		Price Movement During the 1980s
		Price Situation During the 1990s
	Objectives of Price Policy
	Prices of Industrial Products
	Control of Expenditure
		International Prices of Select Commodities
		Challenges and Outlook
	Review Questions
	References
Chapter 7: National Income
	Meaning and Definition of National Income
	Concepts of National Income
		Net National Product (NNP)
		National Income or National Income at Factor Cost (NI)
		Personal Income (PI)
		Disposable Income (DI)
	National Income Estimates in India
		National Income After Independence
		NIC and CSO Estimates
	Methodology of National Income Estimation in India
		Net-product Method
		Net-income Method
		State of the Economy
		Per Capita Income and Consumption
		Economic Growth
		Sectoral Contribution
		Aggregate Demand
	Savings and Investments
		Savings
		Investments
	Trends in National Income Growth and Structure
		Sectoral Investment and ICOR
		Consumption Basket
		Inclusive Growth
		Inflation
	Causes for the Slow Growth of National Income in India
	Suggestions to Raise the Level and Growth Rate of National Income in India
	Major Features of National Income in India
	Difficulties or Limitations in the Estimation of National Income in India
	Review Questions
	References
Chapter 8: Industrialisation and Economic Development
	Concept and Meaning of Industrialisation
	The Pattern of Industrialisation
	Structure of Effective Demand and Pattern of Industrial Development
	Relative Roles of Public and Private Sectors
		Growth of Infrastructure
		Science and Technology
	Inadequacies of the Programme of Industrialisation
	Role of Industries in the Economic Development
	Industries During the Plan Period
		Industrial Development Under the Ninth Plan
	Recent Industrial Growth
	Central Public Sector Enterprises (CPSEs)
	Micro and Sm All Enterprises (MSEs)
		Tourism
	Corporate Profitability and Investment
		Foreign Direct Investment
		FDI Policy
		Industrial Credit
		Industrial Relations
	Industrial Sickness
	Environmental Issues
		Policy Initiatives
	Challenges and Outlook
	Review Questions
	References
Chapter 9: Foreign Trade Policy and Balance of Payments
	Foreign Trade Policy and Balance of Payments
	Main Features of India’s Trade Policy
	Phases of India’s Trade Policy
	India’s Foreign Trade Policy, 1991
		Rationale of Foreign Trade Policy
	Major Trade Reforms
	Assessment of the New Trade Policy
	Balance of Payments (BoPs)
	Current Account Deficit (CAD)
	Capital Account Deficit
	Other Non-Debt Flows
	Review Questions
	References
Chapter 10: Poverty in India
	Concept, Meaning, and Definition of Poverty
	People Living Under Poverty Line
	Causes of Poverty in India
		The Developmenta List View
		The Neoliberal View
	Historical Trends in Poverty Statistics
	Poverty and Inclusive Growth
		Consumption Patterns Below and Above PL
		Trends in Consumption Growth (Rural–Urban Disparity)
	Factors Responsible for Poverty
	Measures to Reduce Poverty
	Poverty Alleviation Programmes
	Poverty Alleviation Through Micro-Credit
		Indian Experience
		Suggestions
	Outlook for Poverty Alleviation
	Controversy Over the Extent of Poverty Reduction
	Case
		ICT and Rural Poverty Alleviation
		Case Questions
	Review Questions
	References
Chapter 11: Unemployment in India
	Concept, Meaning, and Types of Unemployment
		Concept of Unemployment
	Nature of Unemployment in India
		Disguised Unemployment or Rural Unemployment
		Industrial Unemployment or Urban Unemployment
		Educated Unemployment or White-collar Unemployment
	Magnitude of Unemployment
		Unemployment Rates by Level of Education
		NSS 62nd Round on Employment and Unemployment
		Employment in Organised Sector
		Employment in the Eleventh Plan
	Factors Responsible for Unemployment
	Steps to Reduce Unemployment
	Government Policy Measures to Reduce Unemployment
	Overview of Unemployment and Underemployment
		Unemployment
	Case
		Literate State with the Highest Unemployment
		Case Questions
	Review Questions
	References
Chapter 12: Inflation
	Meaning and Definition of Inflation
	Features of Inflationary Economy
	Measures of Inflation
		Prices as Measures of Inflation
		WPI—General Trends
		Wholesale Prices—Primary Articles
		Wholesale Prices—Fuel and Power
		Wholesale Prices—Manufactured Products
		WPI—Essential Commodities
		Essential Commodities—Retail Prices
		CPI and Other Price Indicators
		Real Estate/Housing Price Index
	Inflation and Developing Economies
	Demand-Pull Vs Cost-Push Inflation
		Demand-pull Inflation
		Causes of Demand-pull Inflation
		Cost-push Inflation
	Causes of Inflation
	Effects of Inflation
		Economic Effects of Inflation
		Control of Inflation
	Global Inflation and India
		Food Price Index
		Forces Behind the Rise
		Policy Neglect
		Financial Speculators
		Implications for India
		Ineffective Strategy
	Case
		Calculating Inflation in India
		Case Questions
	Review Questions
	References
Chapter 13: Problems of Growth
	Parallel Economy
		Review of the Various Estimates of Black Income
		Impact of Black Income on the Economic and Social System
		Corruption
		Factors Responsible for the Generation of Black Money
		A Survey of Measures Undertaken to Unearth Black Money
	Regional Imbalances
		Indicators of Regional Imbalance
		Causes of Economic Backwardness and Regional Imbalances
		Wanchoo Working Group
		Conclusion
	Social Injustice
	Case
		Case Question
	Review Questions
	References
Chapter 14: MRTP Act, FERA, and FEMA
	Monopolies and Restrictive Trade Practices Act (MRTP), 1969
		Prevention of Concentration of Economic Power
		Monopolistic Trade Practices
		Permitted Monopolistic Trade Practices
		Restrictive Trade Practices (RTPs)
		MRTP and New Industrial Policy, 1991
	Foreign Exchange Regulation Act (FERA), 1973
		Definitions
		Money Changers
		Authorised Dealers in Foreign Exchange
		Restrictions on Dealing in Foreign Exchange
		Restrictions on Payments
		Blocked Accounts
		From FERA to FEMA
	Foreign Exchange Management Act (FEMA), 1999
		Definitions
		Authorised Person
		Important Concepts Under FEMA
		Applicability of FEMA
		Residential Status
		Determination of the Residential Status Under FEMA
		Non-resident Indian (NRI)
		Current Account and Capital Account Transactions
		Current Account Transactions
		Capital Account Transactions
		Distinction Between Capital Account and Current Account Transactions
		Regulation and Management of Foreign Exchange
		Export of Goods and Services
		Realisation and Repatriation of Foreign Exchange
		Exemption from Realisation and Repatriation in Certain Cases
	Case
		Case Questions
	Review Questions
	References
Chapter 15: Social Responsibility of Business
	Origin and Growth of Concept
	Meaning and Definition
	Definition Through Various Dimensions
	The Need for Social Responsibility of Business
	Social Responsibilities of Business Towards Different Groups
		Responsibility Towards the Customers
		Social Responsibility to Prospects
		Social Responsibility to Community
		Responsibility to Human Resources
		Responsibility to Society and Ecological Environment
		Responsibility to Government
		Social Responsibility to Global Business Environment
	Barriers to Social Responsibility
	Corporate Accountability Vis-À-Vis Social Responsibility
	Challenges for Social Responsibility of Business
	Emerging Perspectives for Corporate Social Responsibility
	Social Responsibility of Business in India
	Case
		Envopeace vs Suns Pvt. Ltd.
		Case Analysis
	Summary
	Review Questions
	References
Chapter 16: Liberalisation
	Background
	Policy Changes
	Economic Liberalisation
	Meaning of Liberalisation
	The Path of Liberalisation
		Relief to Foreign Investors
		Devaluation of Indian Rupee
		New Industrial Policy
		New Trade Policy
		Removal of Import Restrictions
		Budgetary Policy
		Liberalised Exchange Rate Management System (LERMS)
		Memorandum to IMF
		NRI Remittances
		Encouraging Foreign Tie-ups
		Narasimhan Committee Report
		FERA and MRTP Relaxation
		Decontrol of Steel
		Redefining SEBI’s Role
		Privatisation of Public Sector
		Simplification of Industrial Licensing
		Banking and Financial Sector Reforms
	Reform Achievements
		GDP Growth Trend
		Declining Savings and Investment
		Taxes and Subsidies—Reduced Role of State
		Poverty and Inequality
		Employment Concerns
	Industrial Growth
		Delicensing to Free Industry from Licence and Permit Raj
		Deteriorating Balance of Trade
		Declining Rupee Value
		Mounting External Debt and Liabilities
		Disastrous Consequences of the Entry of MNCs
		Volatile Portfolio Investments and Stock Market
		Increasing Concentration of Economic and Political Power
		Global Liberalisation
	Future Expectations
	Liberalisation—an Assessment
	Liberalisation and Growth of Indian Economy
	Issues and Challenges
	Case
		Case Question
	Review Questions
	References
Chapter 17: Privatisation and Disinvestment of PSUs
	Public Sector Enterprises (PSEs)—the Necessity
	A Decade of Performance
	Concept, Meaning, and Objectives of Privatisation
		Concept
		Meaning
		Objectives
	Disinvestment Strategies
		Strategy
		Background
		Desirability
		Pricing
		Utilisation of Proceeds
	The Board for Reconstruction of Public Sector Enterprises (BRPSE)
		Key Responsibilities
	The New Disinvestment Policy and Programme
		Current Policy on Disinvestment
		Calling off the Ongoing Cases of Strategic Sale
		Sale of Small Portions of Government Equity Through an IPO or FPO Without Changing the Public Sector Character of CPSE
		National Investment Fund (NIF)
		Fund Managers of NIF
		Disinvestment Programme for 2007–08
		Critical Appraisal
		Suggestions
	Case
		Case Questions
	Summary
	Review Questions
	References
Chapter 18: Globalisation
	Background
	Views of Scholars on Globalisation
	Studies on Globalisation
	Efforts of Anglo-Americans
	Salient Aspects of Globalisation
	Role of Transnational Corporations (TNCs)
	Concept and Meaning
	Definition
	Features
	Globalisation is Inevitable
	Ten Rules of Global Reforms
	India and Globalisation
	Government’S Measures Towards Globalisation
	Globalisation and Its Impact on the Indian Industry
		Economic Reforms
		Non-economic Developments
		Low Industrial Growth
		High Tariffs and Taxes
		Increased Industrial Unemployment
		Uncertainty in Stock Markets
		Old and New Economy Syndrome
		Industrial Consolidation and Restructuring
		Negligible Global Export
		Other Areas
		Areas of Concern in the Indian Economy
	Effects of Globalisation
	Pro-Globalisation
	Anti-Globalisation
	Globalisation—an Assessment
	A Critical Appraisal of Globalisation
	Threats to Globalisation
	Case
		Case Questions
	Summary
	Review Questions
	References
Chapter 19: India’s Import–Export Policies
	Historical Perspective
	Liberalisation Policy of Exim
	Annexure I
		Products Eligible for Additional Exim Scrips Entitled to 10 Percentage Points
	Annexure II
		List of Import Items to be Decanalised
	Annexure III
		List of Export Items to be Decanalised
	Exim Performance
		Import Structure
		Export Performance
	Exim Policies
		Five-year ExIm Policy
		Objectives of the Exim Policy
		Exim Policy, 1997–02
		Modified ExIm Policy, April 1998
		Exim Policy, 1999–2000
		Exim Policy, 2000–01
		Exim Policy, 2001–02
		Exim Policy, 2002–07
	India’s Exim Performance
	Trade Scenario
	Exports
	Imports
	Export Promotion Measures
	Special Economic Zones (SEZs)
		Impact of the SEZ Scheme
	Agri-Export Zones (AEZs)
	Highlights of Foreign Trade Policy (FTP), 2004–09
		Special-focus Initiatives
		New Export Promotion Schemes
		Simplification/Rationalisation/Modifications of the Ongoing Schemes
		Simplification of Rules and Procedures and Institutional Measures
	Case
		Case Question
	Summary
	Review Questions
	References
Chapter 20: International Business Environment
	The Nature of International Business Environment
	Trends in the World Trade and Economic Growth
	General Agreement on Tariffs and Trade (GATT)
		Objectives
		Principles
	General Agreement on Trade in Services (GATs)
		Principles and Obligations
		Scope
		Modes of Delivery
		Services Sectors and GATs
		Key Rules
		Better Access to Markets
		Progressive Liberalisation
		Intellectual Property: Protection and Enforcement of Rights
	International Organisations
	International Monetary Fund (IMF)
		Objectives
		Organisation
		Borrowings, Financing Facilities, and Policies
		Resources
		Financing Facilities and Policies
		Regular Lending Facilities
		Special Lending Facilities
		Concessional Lending Facility
		Review of Facilities
		Other IMF Policies and Procedures
		Conditionality
		Technical Assistance
	World Bank (WB)
		Resource
		Organisation
		Objectives
		Financing Policies
		WB’s Assistance to India
	An Evaluation of IMF–WB
	World Trade Organization (WTO)
		Emergence of WTO
		Objectives
		Areas of Negotiations
		WTO and India
	International Finance Corporation (IFC)
		Mission
		Objectives
		Main Features of Assistance
		IFC and India
	Asian Development Bank (ADB)
	United Nations Conference on Trade and Development (UNCTAD)
		Functions
		Basic Principles
		A Review of the Functioning of UNCTAD
	United Nations Industrial Development Organization (UNIDO)
	International Trade Centre (ITC)
	Generalized System of Preferences (GSB)
	Global System of Trade Preferences (GSTP)
	Case
		Case question
		Case analysis
	Review Questions
	References
Chapter 21: World Trade Organization
	Background
	Meaning and Agreements
		Different Things to Different People
	Functions
		Institutional Characteristics
		Ministerial Conferences
		Taking Decisions
		Settling Disputes
	Principles of Trading
		Much in Common
	Provisions for Developing Countries
		Growing Number
		Need for Flexibility
		Trade and Development
		Enabling Clause
	Other Provisions
		Least Developed Countries (LDCs)
		Gradual Evolution
		Package Approach
		Making Trade-offs
		Strengths and Weaknesses
		The Longest of Them All
	The WTO Agreement
		What Is It
		More Than a Short Agreement
		Bad News and Good News
		Where Are We Today
	Liberalising Trade in Goods
		Industrial Goods: Tariffs
		Tariffs and Developed Countries
		Tariffs and Developing Countries
		Binding of Tariffs
		Tariffs are Bound … But
	Textiles—Back in the Mainstream Rules
		Fighting the Goods Fight
		Outside the System
		The MFA—a Derogation
		Back in the Mainstream
	Agriculture: Fairer Markets for All
		Outside the System
		Agreement on Agriculture on Centre Stage
		Objectives of the Agreement
		A Better Deal for Developing Countries
	Trade Remedies
		Key Agreements
	Standards and Procedures
		Technical Barriers to Trade
		Sanitary and Phytosanitary Measures (SPS)
		Role for Scientific Evidence
	Administrative Procedures
		Red Tape and Trade
	Investment Measures
	Disputes Settlement Mechanisms
		A Dispute About What?
		Rapid Settlement
		Better than GAT T
		Dispute Settlement
		Right to Appeal
		More is Better
	Ministerial Meetings
		When
		What Do They Do
		When and Where
	Trade-Related Aspects of Intellectual Property Rights (TRIPS)
	Trade-Related Investment Measures (TRIMS)
	Non-Tariff Barriers and Dispute Settlement Mechanism
	Anti-Dumping Measures
	Subsidies
	Singapore Ministerial Meeting, 1996
		The Singapore Issues
		Government Procurement
		Labour Standards
		Action for LDCs
	Geneva Ministerial Meeting, 1998
	Seattle Ministerial Meeting, 1999
	Doha Ministerial Meeting, 2001
		Improving Market Access
		Singapore Issues to the Fore
		Declaration on TRIPs
		Trade and Environment
	Cancun Ministerial Meeting, 2003
		Missed Deadlines
		Optimism Prevails
		No Agreement at Cancun
		Issues after Cancun
	WTO from 2005 to 2008
	Geneva Package, 2004
	Hong Kong Ministerial Conference, December 2005
	Key Outcomes and Timelines of the Hong Kong Ministerial Declaration of WTO
	Recent WTO Proposals
	Conclusion
	Summary
	Review Questions
	References
Bibliography
Model Question Papers
	Model Question Paper I
	Model Question Paper II
	Model Question Paper III
Index