book

Business Environment

Name: Business Environment
Author: A.C. Fernando
ISBN: 9788131792292

by A.C. Fernando

December 2011

Intermediate to advanced

688 pages

48h 12m

English

Pearson India

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Cover
Title Page
Contents
About the Author
Dedication
Preface
Part I - Fundamental Concepts
1. The Functioning of an Economy: Basic Concepts
What is an Economy?Economic ActivityWants: The Basis of All Economic ActivitiesCircular Flow of Economic ActivityReal FlowsMoney FlowsProductionDefinitionGoodsUtilityGoodsFree Goods and Economic GoodsConsumptionValueWealthClassesWealth and WelfareConsumptionHuman WantsFormationCategoriesCharacteristicsStandard of LivingFactors Affecting the Standard of LivingThe Standard of Living in IndiaEngel’s Law of Family ExpenditureScales of PreferencesSavingsSummaryKey WordsDiscussion QuestionsSuggested Readings
2. National Income
DefinitionsMarshall’s Production-based DefinitionPigou’s Income-based DefinitionFisher’s Consumption-based DefinitionConcepts in National-Income AnalysisGross National ProductNet National ProductNational Income at Factor CostPersonal IncomePersonal Disposable IncomePer Capita IncomeMeasurement of National IncomeThe Product MethodThe Income-received MethodThe Consumption-Savings MethodA Comparison of the Three MethodsThe Sectoral Composition of National IncomeEstimates of the National Income of IndiaPost-Independence BackgroundSpecial Features of the 1980–81 SeriesRBI’s Role in National Income AccountingAdvance Estimates and Quick Estimates of National IncomeDifficulties in the Measurement of National IncomeNational Income Data and the Changing Profile of the Indian EconomyCharacteristics of the Indian EconomyThe National Statistical CommissionLimitations of National Income Estimation in IndiaDeterminants of the Size of a Country’s National IncomeReasons for India’s Low National IncomeCausesPolitical CausesSocial CausesRemediesNational Income and Economic WelfareInequalities of National Income DistributionCausesEffectsCapital FormationSteps Taken by Governments to Reduce InequalitiesUses of National Income DataSummaryKey WordsDiscussion QuestionsSuggested Readings
3. Business and its Environment
Business: Meaning, Characteristics and ObjectivesDivisions of BusinessCharacteristics of Modern BusinessesLarge SizeGlobal ReachOligopolistic StructureBased on TechnologyDiverseGovernment ControlEmerging Ethical ConsciousnessBusiness EnvironmentThe Internal EnvironmentThe External EnvironmentThe Economic EnvironmentEconomic SystemsStructural EquilibriumMonetary PolicyFiscal PolicyEconomic and Price StabilityMoney and Capital MarketFactor EndowmentsSize of the MarketSocial Overhead CapitalPowerExternal Trade/International EnvironmentThe Non-Economic EnvironmentThe Socio-Cultural EnvironmentThe Educational EnvironmentThe Politico-Legal EnvironmentThe Demographic EnvironmentSummaryKey WordsDiscussion QuestionsSuggested Readings

4. Natural Resources
IntroductionLand ResourcesIrrigationPowerEco-Efficiency Strategy of Power GridHydropower and Sustainable DevelopmentForest ResourcesForest and Wildlife ConservationForest CoverFresh Water ResourcesMineralsCoal MiningIron OreManganese OreBauxiteCopper, Lead and ZincSea WealthSummaryKey WordsDiscussion QuestionsSuggested Readings
5. The Technological Environment
What is Technology?Technology and DevelopmentThe Contribution of TechnologyManaging Technology for DevelopmentIntegrating Technology with BusinessTechnology in Developing CountriesTechnology Acquisition and ProtectionTechnology TransferThe Need for Technology TransferForms of Technology TransferInnovationsVarying Research and Development BudgetsTechnical Cooperation and India’s CapabilitiesIndia and the Global Knowledge MarketSummaryKey WordsDiscussion QuestionsSuggested Readings
6. Human Resource Development
EvolutionWhat is Human Resource Development?Human CapitalHuman Resource Development in IndiaFunctionsHuman Development IndexSummaryKey WordsDiscussion QuestionsSuggested Readings
7. India’s Population and its Impact on the Economy
The Economic Effects of a Growing PopulationThe Economic Effects of a Declining PopulationFactors Responsible for Changes in the Size of PopulationBirth RateDeath RateTheories of PopulationThe Malthusian Theory of PopulationThe Optimum Theory of PopulationThe Theory of Demographic TransitionExcessive Population as an Obstruction to GrowthFeatures of the Indian PopulationIndia’s Population PolicyThe Population Policy,Progress under the PolicyThe National Population Policy,Trends in Population and Family Welfare ProgrammeThe ScorecardSummaryKey WordsDiscussion QuestionsSuggested Readings
8. Capital Formation, Savings and Investment
What Comprises Capital?Capital FormationGrowth in Capital FormationSources of Capital FormationCapital Formation in IndiaCapital AccumulationFactors Affecting Capital AccumulationCapital Accumulation in Developing CountriesSavingsSources of SavingsDomestic Savings in India (1951–2008)InvestmentRate of Investment and Capital FormationReasons for Low Level of Investment in IndiaInvestment CommissionSummaryKey WordsDiscussion QuestionsSuggested Readings
Part II - Economic Systems and Policies Relating to Business
9. Economic System and Capitalism
What is an Economic System?CapitalismPrivate PropertyConsumer SovereigntyFreedom of EnterpriseEnlightened Self-InterestProfit MotiveCompetitionExistence of Markets and PricesAbsence of a Central PlanLimited GovernmentActive EntrepreneurshipClass ConflictUse of Advanced TechnologySpecialization Based on Division of LabourExtensive use of MoneyMeritsAutomatic FunctioningGreater Efficiency and Incentive for Hard WorkHigher Rate of Capital Formation and GrowthEconomic Development and ProsperityOptimum Utilization of ResourcesA Just System of Reward and PenaltyDemocratic SystemAdaptabilityEncouragement to Enterprise and Risk TakingDemeritsExcessively MaterialisticNot as Productive as other Economic SystemsGives Rise to Class ConflictSocial Injustice and Economic InequalityIgnores Human WelfarePeriodic Economic Instability and UnemploymentPrecedence of Property Rights over Human RightsEmergence of MonopoliesMisallocation of ResourcesMalpracticesSummaryKey WordsDiscussion QuestionsSuggested Readings
10. Socialism
What is Socialism?FeaturesMeritsDemeritsSummaryKey WordsDiscussion QuestionsSuggested Readings
11. Mixed Economy
Mixed Economy and its TypesFeatures of the Indian Mixed EconomyCoexistence of Private and Public SectorsNationalization of Basic IndustriesReduction of Inequalities of IncomeProvision of Social Welfare MeasuresPromotion of Economic Development through Planned EffortsResource Allocation through the Price System and Government DirectionsGovernment Control and Regulation of the Private SectorConsumer SovereigntyGovernment is Committed to the Promotion of Public Welfare and Protection of Labour, the Poor and the MarginalizedControl of MonopolyPrices are Determined by Market Forces, but Products of Public Sector are Governed by Administered PricesAdvantages of India’s Mixed EconomyAchievement of Faster Economic GrowthBest Allocation of ResourcesBalance between the Private and Public SectorsThe Establishment of a Welfare StateHeavy Capital Investment through Planned EffortDisadvantagesUndue Emphasis on the Growth of Public SectorInefficiency of Both the SectorsIneffective Control of the Private SectorEconomic FluctuationsFailure to Solve Demographic and Unemployment Problems and InflationExtensive and Corrupt BureaucracyConclusionSummaryKey WordsDiscussion QuestionsSuggested Readings
12. The Role of Public Policies in Governing Business
Public Policy: A DefinitionClassificationLevelsElementsPublic Policies and the GovernmentLimitations of Governments in Executing Public PolicyNeed for Public Policies in BusinessThe Involvement of Business in Public Policy Decision MakingBusiness and Politics: Levels of InvolvementNational Economic GrowthGovernment Regulations in BusinessPublic Policies and Government Regulations in IndiaFunctional RegulationsSummaryKey WordsDiscussion QuestionsSuggested Readings
13. Economic, Monetary and Fiscal Policies
Economic PolicyObjectives of Economic PoliciesMonetary PolicyEvolutionGoals and ObjectivesFunctionsMonetary versus Fiscal PolicyThe Instruments of Monetary PolicyMonetary Policy in Developing CountriesThe Indian Monetary PolicyInstruments of the Indian Monetary PolicyThe Evaluation of the Indian Monetary PolicyFiscal PolicyObjectivesInstrumentsFiscal Policy and Economic StabilizationThe Evaluation of Fiscal PolicySummaryKey WordsDiscussion QuestionsSuggested Readings
14. Foreign Trade Policy
Statement of Trade PolicyObjectives of India’s Foreign Trade PolicyStrategies Adopted in India’s Foreign Trade PolicyPartnership with Private PlayersRoadmap of the Trade PolicyInterim Foreign Trade Policy, 2009–10Foreign Trade Policy, 2009–14Highlights of the Foreign Trade Policy, 2009–14Industries’ ReactionSummaryKey WordsDiscussion QuestionsSuggested Readings
Part III - The Economics of Development
15. The Economics of Development
The Subject and its SpectrumWhy Economic Development?What is Economic Development?Basic DeterminantsCriteriaCosts and GainsCostsGainsSummaryKey WordsDiscussion QuestionsSuggested Readings
16. The Economics of Underdevelopment
The Definition of UnderdevelopmentThe Definition of an Underdeveloped EconomyUnderdeveloped Or Developing?Non-Uniformity of UnderdevelopmentCharacteristics of an Underdeveloped EconomyLow per Capita Income and Widespread PovertyExcessive Dependence on AgricultureUnexploited Natural ResourcesPrimary-Producing Agricultural EconomiesPopulation ExplosionQualitatively Backward PopulationDisguised UnemploymentPrevalence of Unemployment and UnderemploymentDeficiency and Poor Capital FormationInadequate Development of InfrastructureDependence on ExportsDisparate DevelopmentFactor DisequilibriumPoor and Incompetent AdministrationUnderdeveloped and Uncoordinated Fiscal and Monetary OrganizationsExistence of Inhibitory Social InstitutionsThe Obstacles to DevelopmentPovertyCapital DeficiencyMarket ImperfectionsInternational ForcesForeign RuleInhibiting Socio-Cultural InstitutionsDemonstration EffectOverpopulationCorruptionSummaryKey WordsDiscussion QuestionsSuggested Readings
17. Stages and Strategies of Economic Growth
Stages of Economic GrowthRostow’s Stages of Economic GrowthTraditional SocietyThe Pre-Conditions for Take-OffThe Take-OffThe Drive to MaturityThe Age of High Mass ConsumptionBeyond High Mass ConsumptionObjections to the Take-Off TheoryBalanced versus Unbalanced GrowthThe Balanced Growth TheoryThe Meaning of Balanced GrowthCritical Minimum Effort and the Big PushThe Basic PostulatesThe Balanced Growth Doctrine: Rodan’s AnalysisNurkse’s AnalysisBalanced Growth: Other ViewpointsHow to Realize Balanced Growth?The Role of the StateCriticism of the TheoryThe Unbalanced Growth TheorySummaryKey WordsDiscussion QuestionsSuggested Readings
18. Role of the State in Economic Development
Defects of the Free-Enterprise SystemThe Evolution of the Concept of State Participation in Economic DevelopmentThe Justification and Examples of Government InterventionThe Rationale for State Interventon in Economic AffairsThe Scope of Governmental ActionRoles of the GovernmentRegulatorPromoterEntrepreneurPlannerThe Extent of Government’s ParticipationReasons for Governments’ Participation in Development in Poor CountriesAreas where Governmental Action is VitalSummaryKey WordsDiscussion QuestionsSuggested Readings
19. Economic Planning: Meaning, Evolution and Features
Meaning and DefinitionEvolutionFactors that Facilitate Successful Planning in Developing CountriesObjectivesKey Features of a Planned EconomySummaryKey WordsDiscussion QuestionsSuggested Readings
20. Industrial and Licensing Policy (1951–1991)
Industrial Development in IndiaWhat is an Industrial Policy?ComponentsImportanceThe Industrial Policy Resolution of 1948The Industrial Policy Resolution of 1956The Industrial Policy of 1973The Industrial Policy of 1977The Industrial Policy of 1980Important ProvisionsAmendments in Appendix IThe New Industrial Policy OfIndustrial LicensingForeign InvestmentForeign Technology AgreementsPublic SectorThe Monopolies and Restrictive Trade Practices (Mrtp) ActReforms in the Industrial SectorIndustrial LicensingIndustries CoveredIndustries ExemptedHow to Apply for a Licence?RegistrationSpecial Procedure for DiversificationMrtp ClearanceSummaryKey WordsDiscussion QuestionsSuggested Readings
21. The New Economic Policy,
GenesisBackgroundEarly Crisis Management Measures: Trendsetters of the Reform ProcessThe Three Pillars of Economic ReformsLiberalizationPrivatizationGlobalizationIndustry and Labour StrategyAssessment of the New Economic PolicyA Balance Sheet of Economic ReformsThe Emergence of Corporate GovernanceSummaryKey WordsDiscussion QuestionsSuggested Readings
22. The Indian Economy
A Retrospective on the Indian EconomyThe 1950SThe 1960SThe 1970SThe 1990SThe New MillenniumAgricultural and Rural DevelopmentIndustrial Production and ManufacturingInfrastructureThe Services SectorThe Financial Services SectorSavings and InvestmentThe Price SituationIndia’s National and per Capita IncomeIncome Distribution and PovertyThe External SectorSummaryKey WordsDiscussion QuestionsSuggested Readings
Part IV - Business and Society
23. Business and Society
Business: an Integral Part of SocietySociety, Values and InstitutionsThe Interrelationship between Business and SocietyBusiness-Society InteractionThe Stakeholder Model of BusinessPrimary and Secondary StakeholdersThe ConceptCriticisms of the ConceptSocio-Economic Objectives of BusinessBenefits of Business to SocietyProblems Created by BusinessesSummaryKey WordsDiscussion QuestionsSuggested Readings
24. Business, Labour and Government
Labour: Definition and CharacteristicsLabour ExploitationProtection of Employees’ InterestsTrade UnionsRights of Recognized Trade UnionsIndian Trade UnionsDefects of Indian Trade UnionsManagement ConcernsPost-Independence Labour Legislation in IndiaImportant LegislationsThe Industrial Disputes Act, 1947Problems with Indian Labour LawsSummaryKey WordsDiscussion QuestionsSuggested Readings
25. Consumer Protection
The Rise of Consumer ProtectionThe Government’s RoleConsumer Duties and ResponsibilitiesConsumer Protection in IndiaThe Current ScenarioLegal Protection to ConsumersThe Consumer Protection Act, 1986The Consumer Protection (Amendment) Act, 2002The Prevention of Food Adulteration Act, 1954Institutional Arrangements under CopraThe Three-Tier Redressal System in IndiaThe District ForumThe State CommissionThe National CommissionQuality StandardsThe Bureau of Indian StandardsStandards of Weights and MeasuresVoluntary OrganizationsConsumer Associations or CouncilsConsumer CooperativesCoordination at the National LevelOther InitiativesNational AwardsPublicity MeasuresThe Customer Service Department at RBISummaryKey WordsDiscussion QuestionsSuggested Readings
26. Investor Protection
Shareholders’ Rights and ResponsibilitiesA ShareholderRights and Postal BallotsA Guide for Investors and ShareholdersRights of a Shareholder as an IndividualRights of a Debenture HolderShareholders’ ResponsibilitiesTrading of SecuritiesTransfer of SecuritiesDepository and DematerializationGrievance RedressalInvestor ProtectionDefinitionThe NeedRights to Information and Other RightsThe Impact of Investor ProtectionOwnership and Control of FirmsDevelopment of Financial MarketsInvestor Protection in IndiaShareholder Protection in IndiaThe N. K. Mitra Committee on Investor ProtectionProblems of Investors in IndiaLaw Enforcement for Investor ProtectionGrievance Redressal MechanismsLacunae in Investor ProtectionSebi’s Performance: A Report CardSummaryKey WordsDiscussion QuestionsSuggested Readings
27. Environmental Protection
The History of EnvironmentalismPreserving the Environment: The Role of StakeholdersPublic OpinionMediaCorporationsGovernmentCosts and Benefits of Environmental RegulationTrade and the EnvironmentIndustrial PollutionIndia’s Toxic CorridorEvidence of PollutantsRole of CorporationsImproving Corporate Environmental PerformanceWaste Management and Pollution ControlPreventing PollutionPreventing Industrial PollutionInnovative Business PracticesEnvironmental AuditManaging Environmental IssuesImproving Corporate Environmental PerformanceProduct DifferentiationSelf-RegulationGovernment RegulationProcess InnovationsRedefining MarketsEnvironmental Risk ManagementEnvironmental Management in IndiaCharter for Voluntary Pollution ControlIndia’s Environment PolicyLaws Governing EnvironmentThe National Environmental Policy,Deficiencies in the Draft PolicyLatest Developments in India’s Environment PolicyCorporate India Gets Eco-FriendlyPrivate Sector InitiativesPublic Sector EffortsFuture Outlook on EnvironmentSummaryKey WordsDiscussion QuestionsSuggested Readings
28. Corporate Governance in India
DefinitionsDesiderataGood Corporate GovernanceObligation to SocietyObligation to InvestorsObligation to EmployeesObligation to CustomersManagerial ObligationIssues in Corporate GovernanceDistinguishing the Roles of Board and ManagementComposition of the Board and Related IssuesSeparation of the Roles of the CEO and ChairpersonShould the Board Have Committees?Appointments to the Board and Directors’ Re-ElectionDirectors’ and Executives’ RemunerationDisclosure and AuditProtection of Shareholder Rights and their ExpectationsDialogue with Institutional ShareholdersMaking a Socially Responsible Corporate-Investor’s RoleNeed for and Importance of Corporate GovernanceGood Governance and Corporate PerformanceInvestors’ PreferenceSignificance to Developing CountriesBenefits to SocietyBenefits to CorporationsThe Indian ModelHistoryClauseBanks and Corporate GovernanceEstablishment of the Serious Fraud OfficeA Performance AppraisalPerformance Appraisal of Indian CorporationsImpetus for the Growth of Corporate Governance in IndiaSummaryKey WordsDiscussion QuestionsSuggested Readings
29. Corporate Social Responsibility in India
Conflicting PerspectivesEmergenceWhy Social Responsibility of Business?Accountability to SocietyDebt to SocietyDefinitionsA Growing Global RoleTheoretical Justification for CsrThe Trusteeship ModelThe Social Entity TheoryThe Pluralistic ModelWhat are Corporates Expected To Do?Private Sector Needs the Goodwill of SocietyModels for Implementing CsrCsr as a Business Strategy for Sustainable DevelopmentAssessment of Csr ActivityInadequate Response to Csr in IndiaAdvantagesScopeDifferent Contexts in which Csr is RelatedProtecting and Promoting Stakeholders’ InterestsSocial Concern and Promotion of Common Welfare ProgrammesAs an Act of PhilanthropyGood Corporate Governance itself is a Social ResponsibilityCorporates in the Vanguard of Rendering Social ServiceSocial Responsibility is Abiding by Rules and RegulationsSocial Responsibility as the Creation of WealthEnsuring Ecological BalanceHuman Element FocusImproving ProductivitySponsoring Social and Charitable CausesCorporates Should Supplement State EffortsIcc’s Practical Steps to CsrThe Indian PerspectiveChanging Attitudes to CsrIndia on the Ethical/Csr MatrixSocial Responsibility and Indian Corporations: A Score CardThe Future of Indian CsrSummaryKey WordsDiscussion QuestionsSuggested Readings
30. Business Ethics in India
Principles of EthicsPersonal EthicsProfessional EthicsBusiness EthicsWhat is not Business Ethics?EvolutionNeedSignificanceValues and Ethics in BusinessThe Importance of Values and EthicsThe Distinction between Values and EthicsValues, Ethics and Business StrategyWhy Should Businesses Act Ethically?Ethical Decision MakingEthical Challenges in the Changing Business EnvironmentBenefits of Managing Ethics in the WorkplaceCharacteristics of an Ethical OrganizationRecognizing Ethical OrganizationsSummaryKey WordsDiscussion QuestionsSuggested Readings
Part V - Economic Legislations
31. The Mrtp and the Competition Acts
The Mrtp Act, 1969ObjectivesSalient FeaturesScopePost-Liberalization RelaxationsThe 1991 Industrial Policy Takes the Sting out of the Mrtp ActThe Regulation of CompetitionCorporate Control in CompetitionConstraints in Developing CountriesThe Role of BanksOwnership ConcentrationThe Benefits of CompetitionCompetition in the Product MarketCompetition in the Capital MarketEncouraging Good GovernanceCompetition is Only Part of the SolutionEnforcement of Good GovernanceChallenges to Good EnforcementWhat is a Good Competition Policy?The Competition Act, 2002BackgroundObjectivesThe Competition Commission of IndiaThe Focus Areas of the Competition ActSalient Features of the Competition CommissionMrtp Act and the Competition ActImplementationSummaryKey WordsDiscussion QuestionsSuggested Readings
32. Fera and Fema
The Foreign Exchange Regulation Act, 1973ObjectivesRestrictive ProvisionsProvisions Relating to Enforcement, Penalty and ProsecutionDraconian Nature, Content and ReachThe Foreign Exchange Management Act, 1999ObjectivesAdministrationProvisionsContravention and PenaltiesInvestigationFunctions of the Directorate of EnforcementProcedural Provisions of FemaAdjudication and AppealsAppeals against Orders Passed under FeraDecision of the Bombay High Court Relating to FeraSummaryKey WordsDiscussion QuestionsSuggested Readings
33. The Industries (Development and Regulation) Act
ObjectivesIdra’s Implementing AuthorityThe Central Advisory CouncilThe Development CouncilThe Government to Issue LicencesThe Government’s Power to InvestigateThe Government’s Power to Issue DirectionsLicensing under the New PolicySummaryKey WordsDiscussion QuestionsSuggested Readings
Part VI - The Industrial Sector
34. The Private Sector
The Phenomenal Growth of the Private SectorRole of the GovernmentImportanceIncreased Investment following LiberalizationComparative Performance of the Public and the Private SectorsSectoral Growth in the Private SectorManufacturingServicesBanking and InsuranceTransportCommunity and Social ServicesPrivate Sector and Socio-Economic DevelopmentGrowth of Private Sector Corporate GiantsPrivate Sector Caused the Growth of Modern IndustryProblems Faced by the Private SectorLack of Corporate Governance in the Private SectorSummaryKey WordsDiscussion QuestionsSuggested Readings
35. The Public Sector in India
ObjectivesRationale for its ExistenceGrowthOrganizationControlCommittee on Public UndertakingsBureau of Public EnterprisesPolicies since 1991De-ReservationsPolicy regarding Sick UnitsMemorandum of Understanding“Navaratnas” among PsusDisinvestment of SharesUnder-Pricing of SharesSquandering Away Assets to Finance DeficitsCentral Public Sector EnterprisesAchievementsCauses of Poor PerformanceSummaryKey WordsDiscussion QuestionsSuggested Readings
36. Privatization of Public Sector Enterprises
What is Privatization?The RationalePrimary ObjectivesOther Expected BenefitsMethods of Privatization in IndiaThe Rangarajan CommitteeDisinvestment in the Public SectorEstablishment of the National Investment FundThe Disinvestment CommissionThe Department of DisinvestmentThe Method and Mechanism of DisinvestmentStrong Advocacy of Disinvestment in Economic Survey 2009–10Problems Associated with DisinvestmentSummaryKey WordsDiscussion QuestionsSuggested Readings
37. The Joint Sector
The Proponents and Opponents of the Joint SectorThe Tata Memorandum on Industrial GrowthIndustrial Policy Resolution, 1956The Industrial Licensing Policy Inquiry Committee, 1969RationaleObjectivesForms and OptionsTypesThe Evolution of Indian JsesJoint Sector with Foreign CollaborationThe Joint Sector: An EvaluationSummaryKey WordsDiscussion QuestionsSuggested Readings
38. Globalization, Mncs and Foreign Capital in India
Factors Facilitating GlobalizationMncs and GlobalizationDoing Business in a Diverse WorldMultinational CorporationsIssues Relating to MncsAdvantages of MncsDisadvantagesRegulation of MncsMncs in IndiaForeign CapitalKinds of Foreign CapitalDistinction between Fdi and FiiForeign AidResponse of Foreign CapitalOther Kinds of Foreign InvestmentsNri InvestmentsGlobal Depository ReceiptsAmerican Depository ReceiptsForeign Currency Convertible Bonds (Fccb)India’s Policy towards Foreign CapitalEstablishment of the Investment CommissionDisadvantages of Foreign CapitalSummaryKey WordsDiscussion QuestionsSuggested Readings
39. India and Intellectual Property Rights
Intellectual PropertyThe Indian Government’s InitiativesThe Legislative FrameworkThe Indian Patent SystemThe Justice Bakshi Tek Chand CommitteeThe Justice N. Rajagopala Ayyangar CommitteePatent RulesTrademarksEvolutionRoleTrademarks LegislationsSalient Features of Indian Trademark Act, 1999Registration of TrademarksInfringementOffences and PenaltiesCopyright ActsOther IprsSummaryKey WordsDiscussion QuestionsSuggested Readings
Part VII - Financial Systems
40. Money: Functions and Value
EvolutionAnimal MoneyCommodity MoneyMetallic MoneyPaper MoneyCredit MoneyFunctionsPrimary FunctionsSecondary FunctionsContingent FunctionsQualities of Good MoneySystems of Note IssueKinds of MoneyLegal TenderStandard Money and Token MoneyGresham’s LawThe Value of MoneyMeaningThe Demand for MoneySupply of MoneyCurrencyDemand DepositsThe Changing Value of Money: The Quantity TheoryAssumptionsCriticismMeasuring Changes in the Value of Money: Index NumbersDefinitionMethod of ConstructionWeighted Index NumbersDifficulties in the ConstructionAdvantagesLimitationsThe Changing Value of Money: Inflation and DeflationInflationDeflationInflation versus DeflationSummaryKey WordsDiscussion QuestionsSuggested Readings
41. Money Markets
What is a Money Market?Characteristics of Money Market InstrumentsObjectivesMoney Markets versus Capital MarketsFinancial InstrumentsMoney Market InstrumentsInterbank Call MarketsTreasury BillsCertificates of DepositCommercial PapersRepo MarketsTerm Money MarketsCommercial Bill MarketsMoney Market Mutual FundsThe Indian Money Market: StructureThe Indian Money Market: CharacteristicsFunctions of a Money MarketSummaryKey WordsDiscussion QuestionsSuggested Readings
42. Commercial Banking
What is a Commercial Bank?FunctionsImportanceInvestment PoliciesLiabilitiesCommercial Banking: A Process of Credit CreationCredit CreationTechniqueLimitationsIndian Commercial Banks: EvolutionIndian Banking since NationalizationThe Current SituationIndian Banking: ChallengesStrategic Options to Cope with the ChallengesSummaryKey WordsDiscussion QuestionsSuggested Readings
43. Functions of the Central Bank
Organization and ManagementThe Government’s BankBank of IssueCustodian of National ReservesAs a Banker, Agent and Advisor to the GovernmentMiscellaneous FunctionsThe Bankers’ BankSupervisor of BanksThe Lender of Last ResortThe Custodian of Member Banks’ Cash ReservesThe Bank of Central Clearance, Settlement and TransfersThe Controller of CreditQuantitative WeaponsSelective Credit ControlSummaryKey WordsDiscussion QuestionsSuggested Readings
44. Financial Institutions
Development BanksMeaningSalient FeaturesThe Need for Financial InstitutionsThe Industrial Finance Corporation of IndiaThe Industrial Credit and Investment Corporation of IndiaThe Industrial Development Bank of IndiaThe Industrial Investment Bank of IndiaThe Small Industries Development Bank of IndiaState Financial CorporationsState Industrial Development CorporationsThe National Small Industries CorporationState Small Industries Development CorporationsEvaluation of the Role of Financial InstitutionsSummaryKey WordsDiscussion QuestionsSuggested Readings
45. The Indian Capital Market
The Capital MarketConstituentsThe Primary MarketThe Secondary MarketDebt MarketNatureDevelopmentDeficienciesImpact of GlobalizationRole of Securities Market in Economic GrowthRegulatory Framework of the Indian Capital MarketSummaryKey WordsDiscussion QuestionsSuggested Readings
46. The Indian Stock Market
DefinitionOrigin in IndiaOrganization and MembersFunctionsEvolutionTraditional Stock ExchangesNew Types of Stock ExchangesGrowthWhat are Sensex and Nifty?SensexNiftyServices Rendered by Stock ExchangesListing of SecuritiesAdvantages of ListingRegulations and ControlThe Securities and Exchange Board of IndiaSummaryKey WordsDiscussion QuestionsSuggested Readings
47. The Securities and Exchange Board of India
The Indian Securities Market before SebiThe Securities and Exchange Board of India Act, 1992Objectives and FunctionsPowersOrganizationStrengthening of SebiThe Sebi (Amendment) Bill, 2002Sebi’s Role in Promoting Corporate GovernancePerformance RecordSebi’s Role in the New EraPrimary Market ReformsSecondary Market ReformsShortcomingsThe Dhanuka CommitteeSuggestions for Sebi’s ImprovementSummaryKey WordsDiscussion QuestionsSuggested Readings
Part VIII - The External Sector
48. India and the Wto
EmergenceGatt: Wto’s PredecessorThe Formation of UnctadThe Distinction between Wto and GattObjectivesCore PrinciplesFunctionsOrganizational StructureMinisterial ConferencesThe First Ministerial Conference (Singapore, 1996)The Second Ministerial Conference (Geneva, 1998)The Third Ministerial Conference (Seattle, 1999)The Fourth Ministerial Conference (Doha, 2001)India’s Negotiating the Doha roundThe Fifth Ministerial Conference (Cancun, 2003)The Sixth Ministerial Conference (Hong Kong, 2005)The Seventh Ministerial Conference (Geneva, 2009)The Dispute Settlement MechanismThe Differences between Gatt and Wto in Settling DisputesThe Performance of Dsb in Setting DisputesWto AgreementsThe Agreement on AgricultureThe Agreement on Textiles and ClothingThe Agreement on Market AccessThe Agreement on Trade-Related Investment MeasuresThe Agreement on Trade-Related Aspects of Intellectual Property RightsThe General Agreement on Trade in ServicesThe Agreement on Technical Barriers to TradePlurilateral Trade AgreementsThe Agreement on Anti-DumpingThe Trade Policy Review MechanismWto and the Mfn ClauseThe Wto, the Imf and the World BankThe Wto and Developing CountriesThe Wto and IndiaEvaluation of the WtoImplementation IssuesBenefitsCriticismsSummaryKey WordsDiscussion QuestionsSuggested Readings
49. The World Bank Group
GenesisA Brief HistoryFocusFunctionsThe World Bank GroupFunctions Performed by the World Bank and its AffiliatesThe International Bank for Reconstruction and DevelopmentThe International Development AssociationThe International Finance CorporationThe Multilateral Investment Guarantee AgencyThe International Centre for Settlement of Investment DisputeMembership in the World BankFunding OperationsLoans, Grants and ServicesLoansGrantsOther ServicesLending PoliciesGuiding PrinciplesRecent TrendsSpecial Action ProgrammeBank Loan and Export CreditFuture Lending StrategyFive Essential Factors for Development Identified by World BankComprehensive Development FrameworkPoverty Reduction StrategiesThe Millennium Development GoalsImf-World Bank’s Work: Developed versus Poor CountriesCriticismWorld Bank Support to IndiaEducationHealthcareEnergyInfrastructureAgricultureSummaryKey WordsDiscussion QuestionsSuggested Readings
50. The International Monetary Fund
OriginObjectivesMembershipThe Members’ QuotaSpecial Drawing Rights (Sdr)The Bretton Woods SystemGold Stocks with the ImfBorrowing AgreementsGovernanceOrganizational StructureBoard of GovernorsMinisterial CommitteesThe Executive BoardEvolutionThe Bretton Woods SystemThe Collapse of the Bretton Woods SystemThe Impact of the Second AmendmentStructural Adjustment ProgrammesAccountabilityCriticismsThe India-Imf RelationshipSummaryKey WordsDiscussion QuestionsSuggested Readings
Notes
Acknowledgements
Copyright

Content preview from Business Environment

18 ROLE OF THE STATE IN ECONOMIC DEVELOPMENT

This chapter deals with the evolution of the concept of state participation in economic development, the justification and examples of government intervention, scope of governmental action, different roles of government in the economy, reasons for governments' participation in development in poor countries, etc, and concludes with the areas where governmental action is considered important. After reading this chapter, you will be able to relate to the role of the Indian state in the economic development of the country.

DEFECTS OF THE FREE-ENTERPRISE SYSTEM

A century ago, there was a general bias against interference by the state in the running of industry. It was a tacitly accepted formula that ...

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