Business environment new 2

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Business environment new 2

  1. 3. CLASSROOM EXERCISE <ul><li>1. LIST TOP 20 BUSINESSESS IN YOUR CITY. </li></ul><ul><li>LIST NAME OF 20 RESTAURANTS IN YOUR CITY. </li></ul><ul><li>LIST THE PRICE OF 30 ITEMS IN YOUR HOUSE. </li></ul>
  2. 4. <ul><li>LET START WITH A QUESTION? </li></ul><ul><li>WHAT IS RECESSION . </li></ul>I DON`T WANT TO SPEND. STOCK MARKET CRASH BANKS GO BANKRUPT
  3. 5. SO PANTALOON DID IN THIS WAY <ul><li>WITH MALL OWNERS: FROM FIXED RENT TO REVENUE-SHARING MODEL……RESULTED IN 10% SAVING ON OVERALL COST. </li></ul><ul><li>AIR CONDITIONER TEMPERATURE RAISED TO 25 DEGREE FROM 22 DEGREE…….RESULTED IN LOW COST. </li></ul><ul><li>OFFICE OCCUPY BY EMPLOYEES DOWN FROM 200 Sq FT TO 150 Sq ft……RESULTED IN 25-30% RUDUCE IN REQUIREMENT </li></ul><ul><li>CHANGED THE PAYMENT PATTERN OF DEBT TO CASH GENERATED THROUGH SALES </li></ul>
  4. 6. HERO HONDA <ul><li>OUR DEPENDENCE ON FINANCE TO CONSUMER THROUGH BANKS REDUCES FROM 55-60% TO JUST 15 %. </li></ul><ul><li>SIGNED AS TITLE SPONSORS FOR HOCKEY WORLD CUP. </li></ul><ul><li>RESULTS: GROWING FASTER THAN THE INDUSTRY </li></ul>
  5. 7. MCDONALDS INDIA <ul><li>24 Hr DRIVE THROUGH </li></ul><ul><li>IN DELHI, STORES ARE OPEN TILL 1 A.M </li></ul><ul><li>ALTERED OUR MENU TO TASTE OF CUSTOMERS. </li></ul><ul><li>SO THAT WE INVITE THE SAME CUSTOMER TO VISIT MORE OFTEN AND INVITE NEW CUSTOMERS ALSO…RESULTED IN 10% INCREASE. </li></ul>
  6. 8. ICICI BANK <ul><li>LOWER EXPOSURE TO UNSECURED LOANS </li></ul><ul><li>LESS RELIANCE ON DIRECT SELLING AGENTS </li></ul><ul><li>MORE FOCUS ON BRANCH BANKING </li></ul><ul><li>GREATER INPORTANCE TO HR </li></ul>
  7. 10. NATURE,COMPONENTS AND DETERMINANTS OF BUSINESS ENVIRONMENT COMPLEX SO BUSINESS ENVIRONMENT COMPLEX UNSTABLE
  8. 13. SO WHO WILL FRONT RUNNER <ul><li>COMPANIES  PROACTIVELY FACES THE CHALLENGES </li></ul><ul><li> DEVISE THE WAYS TO COUNTER AND TAKE APPROPRIATE DEFENCE </li></ul><ul><li> INNOCULATIVE MEASURE </li></ul><ul><li>WILL LEAD THE PACK AMONG. </li></ul>
  9. 15. CONTINUE………. <ul><li>FIRMS ELEMENTS CHANGE  EXETRNAL E. BUT– SOMETIME EXTERNAL E HAS—POSITIVE IMPACT AND NEGETIVE IMPACT. </li></ul><ul><li>ITS DEPEND AND CHANGES: WHAT IS AND WILL BE </li></ul><ul><ul><ul><li>COMPETITIVE SITUATION </li></ul></ul></ul><ul><ul><ul><li>PRODUCT MIX OF FIRMS </li></ul></ul></ul><ul><ul><ul><li>MANAGERIAL CAPABILITIES </li></ul></ul></ul><ul><ul><ul><li>ABILITY OF THE FIRM TO MAKE STRATEGIC ADJUSTMENT TO ENVIRONMENT CHANGES . </li></ul></ul></ul>
  10. 16. INPUT PROVIDER CUSTOMER CHANNEL MEMBERS BUSINESS GOVERNEMENT EMPLOYEE RIVALS DOMESTIC MACRO ECONOMIC ENVIRONMENT GROWTH AND DISTRIBUTION ENVIRONMENT ECONOMIC SYSTEM ECONOMIC STABILITY ECONOMIC POLICY SOCIAL CULTURE ENVIRONMENT NON MACRO ENVIRONMENT COMPETITIVE ENVIRONMENT DEMOGRAPHIC ENVIRONMENT INTERNATIONAL ENVIRONMENT INTERNATIONAL ENVIRONMENT COMPONENTS OF B.E DIFFERENT LAYERS OF B.E OF FIRM
  11. 17. GLOBAL B.E MAY CAUSE CHANGES IN DOMESTIC ENVIRONMENT BUT EFFECT OF LATTER ON POLICY ENVIRONMENT MAY BE SLOW AND LAGGARD
  12. 18. <ul><li>INTERNATIONAL ENVIRONMENT: </li></ul><ul><ul><li>MOST DYNAMIC AND VOLATILE COMPONENT OF BUSINESS ENVIRONMENT. </li></ul></ul><ul><ul><li>EX: FOREIGN CURRENCY CHANGE. </li></ul></ul><ul><ul><li>THIS RESULT—PRICE CHANGE—DOMESTIC MARKET WILL BE EFFECTED- ALSO IT CAN COST VARIATION IN PRODUCTION COST—AS PRICES OF GOODS CHANGE. </li></ul></ul>
  13. 19. <ul><li>BY GROWTH OF THE WORLD ECONOMY </li></ul><ul><li>DISTRIBUTION OF WORLD GDP </li></ul><ul><li>ECONOMIC RELATIONS AND INTERDEPENDENCE BETWEEN NATIONS. </li></ul><ul><li>INTERNATIONAL ECONOMIC POLICIES OF MAJOR INDUSTRIAL MARKET ECONOMIES: AMERICA,CHINA. </li></ul><ul><li>EX  CURRENT CHANGE IN DOLLAR VALUE EFFECT ON CHINA. </li></ul>
  14. 20. CONTINUE……. <ul><li>5. MULTINATIONAL CORPORATIONS </li></ul><ul><li>6. BANKS </li></ul><ul><li>7. MULTILATERAL INSTITUTIONS– IMF,WTO,WORLD BANK, ILO ETC. </li></ul>THESE ALL ABOVE INTURN EFFECT BY INTERNATIONAL ECONOMIC LAWS, TREATIES, AGGREMENTS AND CONVENTIONS. ALL THESE FACTORS AFFECT– COST AND FLOW OF INTERNATIONAL TRADE, I INVESTMENT, I FINANCE, I TECHNOLOGY AND GROWTH AND COMPETENCE OF FIRMS THE WORLD OVER.
  15. 21. <ul><li>MIXED ECONOMY: COMBINATION OF MARKET AND COMMAND </li></ul><ul><li>SOCIALIST MARKET ECONOMY </li></ul><ul><ul><li>Productive Resources—with Gov </li></ul></ul><ul><ul><li>But allocation,production and distribution—as—principle of market. 1 st S.M.E.  Yogoslavia-1950 </li></ul></ul>NOW MOST S.M.E ARE MOVING TOWARDS(MARKET) TRANSITION TO OPEN MARKET ECONOMIES: THESE ARE CALLED TRANSITION ECONOMIES.
  16. 22. CONTINUEE.. LAYERS OF B.E: GROWTH AND DISTRIBUTION ENVIRONMENT <ul><li>ECONOMIC GROWTH: Process of increase in real output(GDP measuring factor) over period of time(usually 1 year). </li></ul><ul><ul><li>4 components of this(GDP) </li></ul></ul><ul><ul><ul><li>Personal Consumption expenditure </li></ul></ul></ul><ul><ul><ul><li>Gross domestic Private Investment </li></ul></ul></ul><ul><ul><ul><li>Govt Expenditure on Consumption and Investment </li></ul></ul></ul><ul><ul><ul><li>Net Export </li></ul></ul></ul>
  17. 23. HOW GDP IS THEN ALLOCATED.
  18. 24. Continue….. <ul><li>Second measure: Net Domestic Product </li></ul><ul><ul><li>NDP= GDP- Depreciation(this is arbitarary) </li></ul></ul><ul><li>Gross national Product: </li></ul><ul><ul><li>Total final output produces by resources owned by residents of the country. GDP includes produce by foreign companies and national also. </li></ul></ul>
  19. 25. <ul><li>GDP= C + I + X-M </li></ul><ul><li>NDP= GDP – DEPRECIATION </li></ul><ul><li>NATIONAL INCOME= NDP – T(indirect taxes) </li></ul><ul><ul><li>IT CONTAIN INCOME RECEIVED BY OWNERS, SUPPLIERS,LAND OWNER, LABOUR AND CAPITAL IN FORM OF RENT , WAGES, INTEREST AND PROFIT. </li></ul></ul>DISPOSAL INCOME= NI – T(direct taxes)
  20. 26. <ul><ul><li>STABILITY IN PRICE LEVEL </li></ul></ul><ul><ul><li>EXCHANGE RATE </li></ul></ul><ul><ul><li>INTEREST RATE </li></ul></ul><ul><ul><li>MONEY SUPPLY </li></ul></ul><ul><ul><li>AGGREGATE DEMAND </li></ul></ul><ul><ul><li>BALANCE PAYMENTS </li></ul></ul><ul><ul><li>EMPLOYMENT RATE </li></ul></ul><ul><ul><li>BUDGETARY BALANCE </li></ul></ul><ul><ul><li>AND NATIONAL INCOME AND OUTPUT </li></ul></ul>ALL ABOVE VARIABLE ARE INTERACTIVE AND INSTABILITY OF ONE OR FEW EFFECT OTHER
  21. 27. <ul><li>SO YOU MAKE ECONOMIC POLICY. </li></ul><ul><ul><li>MONETARY POLICY </li></ul></ul><ul><ul><li>FISCAL POLICY </li></ul></ul><ul><ul><li>INDUSTRIAL POLICY </li></ul></ul><ul><ul><li>TRADE POLICY. </li></ul></ul>
  22. 28. <ul><li>TO STIMULATE AND MAINTAIN GROWTH </li></ul><ul><li>ACHIEVE ECONOMIC STABILITY </li></ul><ul><li>INCREASE EMPLOYMENT </li></ul><ul><li>STABILIZE BALANCE OF PAYMENTS </li></ul><ul><li>CORRECT REGIONAL IMBALANCES </li></ul><ul><li>MAKE ECONOMY MORE COMPETITIVE. </li></ul>SO IF YOU TAKE GRANTS AND OTHERS FROM MULTILATERAL INSTITUTIONS LIKE IMF,WTO THEN YOU HAVE TO FOLLOW THERE GUIDELINES
  23. 29. <ul><li>Deal with cost ……avalibility  credit—market. </li></ul><ul><li>WHO TAKES THE ACTION: Gov`t or Central Bank of country. </li></ul><ul><ul><li>How: Directly or Indirectly– Supply of Money, rate of Interest and banking System. </li></ul></ul>FIRM`s affect: It affects his Liquidity & Cost of capital– So in turn effects its DEBT:EQUITY
  24. 30. SO WHAT YOU WOULD DO IN CASE: Its Recession and To fight Inflation <ul><li>If Recession: LIBERAL POLICY--- CREDIT LIBERAL </li></ul><ul><li>MONETARY EXPANSION: REDUCE RATE OF INTEREST. </li></ul><ul><li>TO FIGHT INFLATION: RESTRICTIVE MONETARY POLICY  RAISE THE RATE OF INTEREST, REDUCE MONEY SUPPLY GROWTH RATE, RESTRICT FLOW OF CREDIT. </li></ul>
  25. 31. <ul><li>USE OF TAXES AND GOVERNMENT EXPENDITURE </li></ul><ul><li>GOVT-EXPEN  CONSUMPTION EXPENDITURE </li></ul><ul><ul><ul><ul><ul><li>- INVESTMENT EXPENDITURE </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>- TRANSFER PAYMENTS(SUBSIDARY, GRANTS , - UNEMPLOYMENT,ALLOWANCES) </li></ul></ul></ul></ul></ul>SO INCREASE IN GOV`T EXPENDITURE  LEAD—MORE MONEY  MORE DEMAND FOR PRIVATE GOODS ETC.
  26. 32. CONTINUE……… <ul><li>FISCAL  DIRECT AND INDIRECT TAXES. </li></ul><ul><li>Direct taxes: reduces DISPOSIBLE INCOME– so reduce demand or core demand to diminish </li></ul><ul><li>Indrect taxes: Raises the cost of Production. Impact the profits of the firms. </li></ul><ul><li>Inform of: </li></ul><ul><ul><ul><ul><ul><li>EXCISE, CUSTOM, SALE TAX. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>SO CERTAIN CATEGORIES BECOME LESS PROFITABLE COMPARED TO OTHER. </li></ul></ul></ul></ul></ul>NOTE: FISCAL POLICIES BY GOVT AND MONETARY POLICY BY CENTRAL BANK. SO BOTH CLOSELY RELATED BOTH THE POLICY ARE TOFIGHT AGAINST INFLATION AND RECESSION
  27. 33. <ul><li>ROLE OF GOVT. </li></ul>
  28. 35. SO FIRM RESEARCH  DEEPLY AND UNDERSTAND– TO GO INTERNATIONAL MARKET.
  29. 36. <ul><li>POLITICAL </li></ul><ul><li>COUNTRY RISK(Erratic economic and Social Performance, Discrimination in foreign countries) </li></ul><ul><li>CULTURE RISK( Affecting marketing communication, Consumer attitude towards foreign goods and change in fashion, taste and preference). </li></ul>
  30. 37. <ul><li>IT ENVELOPS AND PROVIDES TO ALL FIRMS. </li></ul><ul><ul><ul><li>FRAMEWORK </li></ul></ul></ul><ul><ul><ul><ul><li>TO OPERATE AND ADOPT </li></ul></ul></ul></ul>ECONOMIC SYSTEM : is a way in which a society is organised to decide…. <ul><li>WHAT PRODUCTS SHOULD BE PRODUCES AND IN WHAT QUANTITIES. </li></ul><ul><li>HOW SHOULD THE PRODUCTS BE PRODUCED. </li></ul><ul><li>FOR WHOME SHOULD THE PRODUCTS BE RODUCED. </li></ul>
  31. 38. CONTINUE…….. <ul><li>SO ECONOMIC SYSTEM  Is a framework within which a FIRMS OPERATES AND VARIOUS ECONOMIC UNITS AND AGENTS MOULD THEMSELVES TO FIT INTO THE SYSTEM. </li></ul>SUB PART OF ECONOMIC SYSTEM: a. MARKET ECONOMY b. COMMAND ECONOMY. MARKET ECONOMY:( CAPITALISM) ARE PRODUCTIVE ASSETS ARE PRIVATELY OWNED AND FIRM HAVE THE FREEDOM TO MAKE MAJOR DECISION OF PRODUCTION & CONSUMPTION UNDER COMPETITIVE CONDITIONS. COMMAND ECONOMY: GOVERNMENT MAKE DECISION REGARDING PRODUCTION AND DISTRIBUTION.
  32. 39. <ul><li>. THE STATE OF WORLD ECONOMY & DISTRIBUTION OF WORLD OUTPUT. </li></ul><ul><li>. INTERNATIONAL ECONOMIC COOPERATION </li></ul><ul><li>. ROLE OF MULTILATERAL ECONOMIC INSTITUTIONS </li></ul><ul><li>. INTERNATIONAL ECONOMIC LAWS, TRETUES, AGGREEMENTS, NORMS , PRACTISES AND CODES. </li></ul><ul><li>. POLITICAL SYATEM AND CONDITIONS IN DIFFERENT COUNTRIES. </li></ul><ul><li>. TECHNOLOGY GROWTH AND TRANSFER. </li></ul><ul><li>. CORPORATE GOVERNANCE STANDARDS AND ETHICAL PRACTISES ACROSS COUNTRIES. </li></ul><ul><li>. INTERNATIONAL MARKET STRUCTURE AND COMPETITION. </li></ul><ul><li>. BARRIERS TO INTERNATIONAL TRADE AND INVESTMENT. </li></ul><ul><li>. NATIONAL ECONOMIC POLICIES OF DIFFERENT COUNTRIES. </li></ul>
  33. 40. MAJOR EVENTS AFFECTING INTERNATIONAL BUSINESS ENVIRONMENT. <ul><li>Formation of WTO in 1995 </li></ul><ul><li>Collapse of the EASTERN EUROPE in 1989, USSR in 1991. </li></ul><ul><li>Emergence of European Union(EU) and Introduction Of EURO as common currency. </li></ul><ul><li>Increasing economic strength and presence of MNC`s the world over. </li></ul><ul><li>Increase in No. of FTA`s( Free Trade Areas). </li></ul><ul><li>Economic crises in east and south east Asian countries </li></ul>
  34. 41. <ul><li>ECONOMIC SLOWDOWN IN A NUMBER OF INDUSTRIAL MARKET ECONOMIES INCLUDING JAPAN. </li></ul><ul><li>ECONOMIC REFORM AND OPENING UP OF A LARGE NO. OF LESS DEVELOPED COUNTRIES INCLUDING INDIA. </li></ul><ul><li>PROTECTIONIST TRENDS IN THE INDUSTRIAL MARKET COUNTRIES NOTABLY IN USA . </li></ul>CONTINUE……. SO IN ADDITION TO ECONOMIC FACTORS, INTERNATIONAL SOCIAL, CULTURAL AND DEMOGRAPHIC FACTORS ALSO PLAY ROLE.
  35. 42. <ul><li>COMPETITIVE ENVIRONMENT. ONE OF THE MAJOR FACTOR AFFECTING. </li></ul><ul><ul><ul><ul><li>RATE OF GROWTH </li></ul></ul></ul></ul><ul><ul><ul><ul><li>INCOME DISTRIBUTION </li></ul></ul></ul></ul><ul><ul><ul><ul><li>CONSUMER WELFARE </li></ul></ul></ul></ul>ON INDIVIDUAL BUSINESS:  FREEDOM OF ENTRY AND EXIT IN THE MARKET  ITS PRICE AND SCAL OF OUTPUT.
  36. 43. CONTINUE….. <ul><li>ALSO DEPEND UPON TYPE OF GOVERNMENT. </li></ul>CAPITALIST AND MIXED ECONOMY ATTEMPTS TO MAINTAIN LAW THROUGH.. SUITABLE ECONOMIC LAWS AND REGULATION, FREE AND FAIR COMPETITION IN VARIOUS SECTORS OF THEIR ECONOMIES, CHEK MONOPOLISTIC or ANTI-COMPETITIVE ABUSE OF MARKET POWER.  ABUSE : PRICE FIXING, PRICE DISCRIMINATION ETC. ALSO MERGERS, ACQUISITIONS AND TAKEOVER ALSO REDUCE THE NO. OF COMPETING FIRMS AND CREATE MONOPOLISTIC TENDENCIES.
  37. 44. <ul><li>POLITICAL ENVIRONMENT </li></ul><ul><li>LEGAL ENVIRONMENT </li></ul><ul><li>CULTURAL ENVIRONMENT </li></ul>V.IMP—BUSINESS POINT OF VIEW—NOT IN POSITION TO BRING CHANGE IN ENVIRONMENT IT OPERATES.
  38. 45. <ul><li>IT ALSO INCLUDE INTERNATIONAL POLITICAL RELATIONS—MNC ARE MOST INTERESTED IN THIS. </li></ul><ul><li>COUNTRIES WITH ABSOLUTIST GOVT HAVE AN AFFECT. </li></ul><ul><li>FREE MARKET S LIKE CHINA. BUT ONLY WITH PERMISSION OF GOVT. </li></ul>
  39. 47. <ul><li>INDUSTRIAL DEVELOPMENTS AND REGULATIONS  </li></ul><ul><li>LICENSING </li></ul><ul><li>REGISTRATION OF INDUSTRIES </li></ul><ul><li>PRICE AND OUTPUT REGULATIONS. </li></ul><ul><li>MERGERS ACQUISITIONS AND TAKEOVER OF INDUSTRIES </li></ul><ul><li>LOCATION OF INDUSTRIES. </li></ul><ul><li>FOREIGN EXCHANGE MANAGEMENT: </li></ul><ul><li>TRANSCATIONS IN FOREIGN CURRENCY AND SECURITY. </li></ul><ul><li>CURRENT ACCOUNT TRANSACTIONS </li></ul><ul><li>CAPITAL ACCOUNT TRANSACTIONS </li></ul><ul><li>FOREIGN EXCHANGE REALIZATION </li></ul><ul><li>FOREIGN TRADE AND INVESTMENT TRANSACTIONS </li></ul><ul><li>BORROWING AND LENDING IN FOREIGN EXCHANGE </li></ul>
  40. 48. CONSUMER PROTECTION: CONSUMER RIGHTS,DISPUTES,COMPLAINTS AND GRIEVANCE REDRESSAL SYSTEM. ESSENTIAL COMMODITIES– COVERING THEIR SUPPLY, PRICES, QUALITY WEIGHT, MEASURE AND PACKAGING- COVERING STANDARD UNITS, PACKAGING NORMS AND DECLARATION INSPECTION. PATENTS  APPLICATION PROCEDURE, LIFE OF A PATENT, RIGHT OF PATENTEE, EXCLUSIVE MARKETING RIGHTS INFRINGMENT OF PATENTS, CLAIM PROCEDURE And SETTLEMENT.
  41. 49. LABOUR  EMPLOYESS INSURANCE,PAYMENT OF GRATUITY,DISPUTES,BONUS,EMPLOYEES PROVIDENT FUND, COMPENSATION,DISCIPLINARY CORPORATE MANAGEMENT  FORMATION OF COMPANIES, MANAGEMENT OF COMPANIES, GOVERANCE OF COMPANIES, RAISING OF CAPITAL AND LIQUIDATION OF COMPANIES.
  42. 50. CHANGE SLOW TO OCCUR – CAN ACCELERATE—WITH-SOCIAL MOVEMENTS—CAMPAIGN—ALSO BY EXTERNAL INFLUECE EX- MAGGIE, ETC
  43. 51. ALSO HAS AN IMPACT ON BUSINESS ENVIRONMENT POPULATION DENSITY, SEX RATIO, FERTILITY AND MORTALITY RATIO, AGE COMPOSITION, LIFE EXPECTANCY, GEOGRAPHICAL DISTRIBUTION OF POPULATIO. ABOVE FORMS THE BASES OF MARKET SEGMENTATION, PRODUCT POSITIONING FOR MARKETERS . IT AFFECT THE SIZE OF MARKET AND DISCOURAGE/INCOURAGE PRIVATE INVESTMENT PARTICULARLY IN REGIONS OF LOW PER CAPITA INCOME.
  44. 54. TO FULLFILL MISSION, A FIRM AHS A VISION– LAYS DOWN ITS BASIC PHILOSOPHY AND APPROACH. STRATEGY  BASED ON THOROUGH—CLEARLY OBJECTIVES TO BE ACHIEVED OVER A PERIOD OF TIME. IS BASED ON ITS MISSION: WHY AND FOR WHOME DOES IT EXITS. SO BASIS FOR FIRM`S EXISTENCE AND OPERATIONS A FIRM EXECUTE THE MISSION THROUGH A STRATEGY.
  45. 55. <ul><li>MISSION AND VISION OF THE ORGANISATION </li></ul><ul><li>MANAGEMENT PHILOSOPHY AND STRATEGY </li></ul><ul><li>INDUSTRIAL RELATIONS </li></ul><ul><li>CORPORATE CULTURE AND VALUES </li></ul><ul><li>LINE AND STAFF RELATIONS </li></ul><ul><li>GOVERANCE STANDARD AND CODES </li></ul><ul><li>QUALITY CONTROL SYSYTEM </li></ul><ul><li>TEAM SPIRIT AMONG EMPLOYEES </li></ul><ul><li>WORK CULTURE AND SOCIO-ECONOMIC BACKROUND OF EMPLOYEES </li></ul><ul><li>JOB DESIGN AND COORDINATION </li></ul><ul><li>QULAITY OF INTERNAL COMMUNICATION </li></ul><ul><li>COMPENSATION SYSTEM AND CAREER PROGRESSION OF OF EMPLOYEES </li></ul><ul><li>CONTROL SYSTEM OF THE ORGANISATION. </li></ul>
  46. 56. B.E IS DYNAMIC. SO THOROUGH KNOWLEDGE IS REQUIRED TO INTERPRET THE B.E. . SO REQUIRE PROFESSIONAL BUSINESS ECONOMISTS AND MANAGERS
  47. 57. <ul><li>CHANGES IN GOVERNMENT POLICIES: OF FISCAL: MONETARY AND PUBLIC DEBT (Affects the supply of saving and the aggregate level of demand for the private sector) </li></ul><ul><li>VARIATIONS IN GROWTH PERFORMANCE. SECTOR WISE GROWTH—7% -INCRESE THE NATIONAL INCOME. </li></ul><ul><li>CORRECTIVE POLICY ACTIONS: GOVT—USE FISCAL AND MONETARY: READJUST MONEY SUPPLLY AND CREDIT GROWTH RATES. </li></ul><ul><li>CHANGES IN MARKET STRUCTURE AND COMPETITION. </li></ul><ul><li>FUTURE EXPECTATION AND BUSINESS SPECULATION. </li></ul>
  48. 58. <ul><li>CHANGES IN MARKET STRUCTURE AND COMPETITION. </li></ul><ul><li>FUTURE EXPECTATION AND BUSINESS SPECULATION </li></ul><ul><li>TO MAKE FIRM MORE EFFICIENT—PACKUP </li></ul><ul><li>MARKET STRUCTURE DEPENDS UPON: </li></ul><ul><li>NO. OF BUYERS AND SELLERS IN THE MARKET </li></ul><ul><li>FREEDOM OF ENTRY AND EXIT </li></ul><ul><li>INDEPENDENCE BETWEEN FIRMS </li></ul><ul><li>MOBILITY OF THE FACTORS OF PRODUCTION. </li></ul><ul><li>AVALIBILITY OF MARKET INFORMATION TO VARIOUS PARTICIPANTS </li></ul><ul><li>2. FIRM ON BASES– PAST—PRESENT  PREDIT FUTURE. </li></ul><ul><li>RATE OF INTEREST </li></ul><ul><li>RATE OF INFLATION </li></ul><ul><li>TAXES </li></ul><ul><li>GOVERNMENT BORROWING </li></ul><ul><li>ADV EXPENDITURE </li></ul><ul><li>PRODUCTION IN Various sectors, so firm predict accordingly </li></ul>
  49. 59. YOUNG GROUP,TASTE CHANGES: FACTOR THAT BRING CHANGE .. EDUCATION,GEOGRAPHICAL MOBILITY,FASHION TREND. AS CONSUMER INDUCE CHANGES IN PRODUCT CONTENT AND PRESENTATION  PACKAGING,DELIVERY ETC SO MORE COMPETITIVE ENVIRONMENT
  50. 60. CONTINUE……… <ul><li>A. IMPORT AND FOREIGN INVESTMENT CHANGES. </li></ul><ul><li>AS COUNTRY PROGRESS UNDER GLOBALISATION—--LIBERA-CHANGES OCCUR. </li></ul><ul><li>WHAT TYPE…………… </li></ul>
  51. 61. 2. EXTERNAL ECONOMIC SHOCKS
  52. 62. ALL ABOVE CAN CAUSE TREMENDOUS DAMAGE TO ECONOMY.
  53. 63. AREAS OF ENVIRONMENTAL CHANGE AREAS OF CORPORATE RESPONSE TECHNOLOGICAL ENVIRONMENT R&D, FOREIGN TECHNICAL COLLABORATION,CHOICE OF TECHNOLOGY,LABOUR-CAPITAL RATIO. LABOUR ENVIR.. EMPLOYEE MOTIVATION, PRODUCTIVITY,COMPENSATION,TURNOVER RATE,WORKING CONDITIONS, LABOUR RELATIONS,NATURE OF EMPLOYMENT, JOB DESCRIPTION AND SPECIFICATION
  54. 64. COMPETITIVE ENVIRONMENT PRICING,MERGER,ACQUISITION OR AMALGAMATION,SUB-CONTROLLING, HORIZONTAL, VERTICAL, BACKWARD OR FORWARD INTEGRATION, MARKETING STRATEGY, NPD, ECONOMIES OF SCALE AND SCOPE. MONETARY ENVIRONMENT WORKING-CAPITAL FINANCING, LIQUIDITY RESTRUCTURING FISCAL ENVIRONMENT DIVIDEND POLICY, SUB-CONTRATING, TRANSFER PRICING,PRODUCT MIX,INDUSTRIAL LOCATION,SOURING. TRADING ENVIRONMENT FOREIGN COLLABORATION, INPUT MIX,EXPORT ORIENTATION, IMPORT INTENSITY, PRODUCT MIX
  55. 65. SO IMPORTANT TO FIND OUT FIRST BEFORE A PARTICULAR RESPONSE: WHIH CAUSATIVE FACTOR WILL AFFECT WHICH COMPONENT OF BUSINESS ENVIRONMENT. FINANCIAL ENVIRONMENT PRODUCT DEVELOPMENT, OVERHEAD FINANCING, FINANCING MIX, CAPITAL STRUCTURE, RATE OF RETURN, EXTERNAL FINANCING. LEGAL ENVIRONMENT PROCEDURE AND DOCUMENTATION, CREDIBILITY, CONFORMITY AND ETHICAL PRACTISES, INTELLECTUAL PROPERTY PROTECTION. SOCIAL ENVIRONMENT SOCIAL RESPONSIBILTY, LOCAL AND REGIONAL RELATIONSHIPS, WELFARE EXPENDITURE.
  56. 66. POSSIBILITY OF LOSS OR DAMAGE TO A BUSINESS FIRM. NO. OF POSSIBLE FUTURE EVENTS OR OUTCOMES IS LARGER THAN THE NUMBER OF EVENTS OR OUTCOMES WHICH WILL ACTUALLY TAKE PLACE.
  57. 67. TO IDENTIFY AND ASSESS THE RISKS  KNOW THE CURRENT STATE OF THE ENVIRONMENT AND ITS LEADING DETERMINANTS.
  58. 68. BUT ALL ABOVE INCREASE COST: SMALL AND MEDIUM LACK THIS SYSTEM.
  59. 69. SOME METHODS OF RISK ASSESSMENT 1. CHECKLISTS NO. OF SOCIAL,ECONOMICAL & POLITICAL VARIABLES—EFFECT BUSINESS
  60. 70. THROUGH CHECKLIST: YOU CAN: COMPARE RISK LEVEL OF SAME COUNTRY.. 2 DIFFERENT POINTS, 2 OR MORE COUNTRIES AT SAME POINT ETC.
  61. 71. 2. EXPERT BASED SCORING SYSTEM
  62. 72. ITS LIKE THIS 
  63. 73. 3.ECONOMIC METHODS YOU: LINEAR NON LINEAR: QUANTIFY  STRENGTH OF EACH VARIABLE--: THAT EFFECT B . E. YOU TRY TO QUANTIFY ECONOMIC RISK
  64. 74. 4. RATING AND RANKING SYSTEMS MANY BANKS : OFFER SERVICE: B O A: MAINTAINS WORLD INFORMATION SYSTEM NATIONAL AND INTERNATIONAL ECONOMIC ANALYSIS AND FORECASTS TO ITS CUSTOMERS: JUST LIKE SCORING SYSTEM
  65. 75. WHY I NEED TO KNOW TO KNOW WHERE A PARTICULAR COUNTRY STANDS DOLLAR AND RUPEE
  66. 76. CREDIT WORTHINESS <ul><li>INTERNAL DEBT WILL INVITE: </li></ul><ul><li>FEAR HIGHER TAXATION </li></ul><ul><li>PUBLIC SECTOR DISINVESTMENT </li></ul><ul><li>REDUCE EXPENDITURE ON INFRA </li></ul><ul><li>EXCESSIVE BUREAUCRATIC CONTROL </li></ul><ul><li>HIGH EXTERNAL DEBT INVITE. </li></ul><ul><li>POLICIES FOR IMPORT CONTROL </li></ul><ul><li>EXCHANGE CONTROL </li></ul><ul><li>RESTRICTION ON OUTWARD REMITTENCES </li></ul>
  67. 77. SOME OF THE MAJOR INDICATORS OF COUNTRIES CREDITWORTHINESS: <ul><li>TAXES AS PROPORTION TO GDP </li></ul><ul><li>FISCAL DEFICIT </li></ul><ul><li>DEBT SERVICES AS PERCENTAGE OF GDP AND EXPORTS. </li></ul><ul><li>IMPORT RESTRICTIONS </li></ul><ul><li>BALANCE OF PAYMENT DEFICIT AND EXCHANGE CONTROLS. </li></ul>
  68. 78. ANOTHER: RISK BENCH MARKING YOU BENCHMARK RISK: NORMAL  FUNCTIONING  ACCEPTABLE RANGE– ENVIRONMENTAL FACTOR ASERTAIN: YOU COMPARE THE ACTUAL RISK(ABSOLUT) WITH BENCHMARK. R = R a -- R b R b 1 0 0 1 r R1r= RELATIVE RISK OF THE COUNTRY R1a= ACTUAL(ABSOLUTE) LEVEL OF BUSINESS ENVIRONMENT RISK OF COUNTRY. R0b= ACTUAL(ABSOLUTE) LEVEL OF BUSINESS ENVIRONMENT RISK OF REFERENCE COUNTRY. BENCHMARK = 0 MORALE OFF THE STORY: THE REFERENCE OR THE BENCHMARK COUNTRY MAY LOSE ITS STATUS AS SUCH IF THE LEVEL OF BUSINESS ENVIRONMENT RISK RISES SUBSTANTIALLT IN SUBSEQUENT YEAR.
  69. 79. RISK PREMIUM ON INTEREST UNDERSTAND THIS <ul><li>PREVAILING INTEREST RATE: INDICATOR OF ENVIRONMENT RISK. </li></ul><ul><li>MORE RISK HIGH RATE OF INTEREST : FUNDING RATE HIGH FROM ABROAD. </li></ul><ul><li>DEVELOPED COUNTRIES: LIBOR(LONDON INTER BANK OFFER RATE: </li></ul><ul><li>MY COUNTRY GET MORE RATE THAN LIBOR: MY COUNTRY IS PERCEIVED RISKY SO DIFFERENCE IS CALLED SPREAD. </li></ul><ul><li>BANK RATE: SET BY CENTRAL BANK: . DIFFERENCE BETWEEN ACTUAL AVERAGE RATE OF INTEREST AND BANK RATE: SHOWS GENERAL RISK IN BUSINESS ENVIRONMENT. </li></ul>
  70. 81. FOR INDIVIDUAL FIRMS IT MEANS:
  71. 82. BECAUSE/MAY BE : VULNERABILITY OF ECONOMY TO CHANGING: :ECONOMIC CIRCUMSTANCES :POOR ECONOMIC POLICIES :ADVERSE MOVEMENTS IN SOCIAL AND POLITICAL CIRCUMSTANCES
  72. 83. SOURCES OF COUNTRY RISK SHARP AND FREQUENT SWINGS IN CONTENT,OBJECTIVES or IMPLEMENTATION OF MACRO POLICIES INCLUDING: <ul><li>MONETARY POLICY. </li></ul><ul><li>FISCAL POLICY </li></ul><ul><li>ANTI-INFLATIONARY POLICY </li></ul><ul><li>EXCHANGE RATE POLICY </li></ul><ul><li>FOREIGN TRADE POLICY </li></ul><ul><li>POLICY TOWARDS FOREGN INVESTMENT </li></ul><ul><li>MULTINATIONAL CORPORATIONS </li></ul><ul><li>INDUSTRIAL POLICY </li></ul><ul><li>AGRICULTURAL POLICY </li></ul><ul><li>INCOME POLICY </li></ul><ul><li>POLICY TOWARDS MAJOR SOCIAL SECTORS </li></ul>
  73. 84. DOMESTIC ECONOMIC SOURCES::: <ul><li>CHANGES IN INDUSTRIAL LICENSING POLICY </li></ul><ul><li>VARIATIONS IN PRICE CONTROLS </li></ul><ul><li>TAXATION AND SUBSIDY CHANGES </li></ul><ul><li>GOVERNMENT STANDARDS </li></ul><ul><li>CHANGES IN ENVIRONMENT REGULATIONS </li></ul><ul><li>FISCAL DEBT AND INTERNAL DEBT GROWTH </li></ul><ul><li>CHANGES IN COMPETITIVE ENVIRONMENT </li></ul><ul><li>VARIATIONS IN INTEREST RATE STRUCTURE AND CREDIT CONTROL </li></ul><ul><li>CHANGES IN GOV EXPENDITURE AND INVESTMENT </li></ul><ul><li>VARIATIONS IN NATIONAL INCOME. </li></ul>
  74. 85. DOMESTIC ECONOMIC SOURCES::: <ul><li>INFLATIONARY PRESSURE </li></ul><ul><li>DEMOGRAPHIC CHANGES </li></ul><ul><li>CHANGES IN INCOME AND WEALTH DISTRIBUTION </li></ul><ul><li>INFRASTRUCTURE GROWTH AND MAINTENANCE </li></ul><ul><li>CHANGES IN INDUSTRIAL OWNERSHIP PATTERN </li></ul><ul><li>CHANGING PATTAERN OF INDUSTRIALIZATION </li></ul><ul><li>GROWTH OF UNEMPLOYMENT AND POVERTY </li></ul><ul><li>TECHNOLOGICAL DEVELOPMENTS </li></ul><ul><li>CHANGES IN GROWTH AND PATTERN OF DISTRIBUTION CHANNEL </li></ul><ul><li>CHANGES IN THE COVERAGE AND ATTITUDE OF MEDIA TOWARDS BUSINESS. </li></ul>
  75. 86. DOMESTIC SOCIAL AND CULTURAL SOURCES <ul><li>CHANGES IN FAMILY PATTERNS(NUCLEAR,JOINT ETC) </li></ul><ul><li>FAMILY DYNAMICS(PARENTAL ROLES,MALE/FEMALE ROLES, MARRIAGE ETC </li></ul><ul><li>CHANGES IN QUALITY AND LEVEL OF EDUCATION </li></ul><ul><li>CHANGING NATURE OF SOCIAL ORGANIZATIONS. </li></ul><ul><li>CHANGING RELIGIOUS AND ETHICAL VALUES </li></ul><ul><li>CHANGES IN LIFESTYLE AND LIVING CONDITIONS </li></ul><ul><li>LANGUAGE FACTORS– COVERING OFFICIAL, USE OF INTERNATIONAL LANGUAGE. </li></ul><ul><li>ETC </li></ul>
  76. 88. <ul><li>MONETARY POLICY SWINGS </li></ul><ul><li>FISCAL POLICY VARIATIONS </li></ul><ul><li>EXCHANGE CONTROLS </li></ul><ul><li>IMPORT CONTROLS </li></ul><ul><li>TRIMS(TRADE-RELATED INVESTMENT MEASURES). </li></ul><ul><li>PRICE CONTROLS </li></ul><ul><li>LABOUR POLICY AND LEGISLATION. </li></ul>
  77. 89. EASY MONEY POLICY: SUPPLY OF MONEY AND COST AND AVAILABILITY OF CREDIT. IF MONEY CREDIT IF INCREASES – THAN– LIQUIDITY INCREASES  DEMAND INCREASES– LOW RATE OF INTEREST. SO GOOD AT TIME OF INFLATION RESTRICTIVE MONETARY POLICY: CREDIT & MONEY RESTRICTED & RATE OF INTEREST HIGH  GOOD TO CONTROL THE SURGING DEMAND.
  78. 90. 2. FISCAL POLICY VARIATIONS: CHANGES EFFECT: TAX & NON TAX REVENUES, SUBSIDIES, PUBLIC SECTOR & INFRA INVESTMENT, SOCIAL EXPENDITURE & EVENTUALLY GOVERNMENT BORROWING PROGRAMMES. FISCAL POLICY IS DETERMINED BY: BY EXPENDITURE REQUIREMENT AS PER MACRO ECO OBJECTIVE: LIKE AND BY REVENUE MOBILIZATION FISCAL DEFICIT: DIFFERENCE BETWEEN REVENUE RECEIPT AND TOTAL EXPENDITURE: GOVT  ADOPT  MIX OF EXPENDITURE REDUCTION, ADDITIONAL TAXATION, INCRESED NON-TAX CHARGES & ADDITIONAL BORROWING FROM MARKET.
  79. 91. CONROLS THAT GOVERNMENT PUT IN PLACE TO BAN OR RESTRICT THE AMOUNT OF FOREIGN CURRENCY OR LOCAL CURRENCY TO BE TRADED OR PURCHASED. : USE OF F.CURRENCY, RESTRICTING AMOUNT OF DOMESTIC CURRENCY THAT CAN BE EXCHANGED WITHIN THE COUNTRY. WHY THESE CONTROLS: <ul><li>FOR NATIONAL SECURITY </li></ul><ul><li>PROTECTION OF SOME INFANT OR NEWLY DEVELOPED INDUSTRIES AGAINST COMPETITION. </li></ul><ul><li>RETALIATION AGAINST UNFAIR TRADE PRACTICES. </li></ul><ul><li>FOR CONSERVING FOREIGN CURRENCY </li></ul>SO COUNTRIES IMPOSE: CONTROLS ON CURRENCY CONVERTIBILITY.
  80. 92. WHY WHEN TRADE AND BOP ADVERSE HOW THROUGH HIGHER IMPORT DUTIES, NON-TARIFF MEASURES  IMPORT QUOTOS. STATE TRADING, IMPORT LICENCING, VOLUNTRY EXPORT RESTRAINTS(VER), ORDERLY MARKETING ARRANGEMENTS(OMR) ITS ADVERSE EFFECTS: RESTRICT COMPETITION, LESS TECH-UPGRADATION-INNOVATION  LEAD TO BREED INEFFICIENCY THROUGH DOMESTIC INDUSTRY PROTECTION.
  81. 93. TO WHOME IT AFFECTS: MULTINATIONAL COMPANIES AND THEIR AFFILITIES. HOW IT EFFECTS: MAINLY 2 THINGS (LCRs AND DBRs). LCRs  MINIMUN LOCAL CONTENT REQUIREMENTS  MOSTLY FOR FIRMS WHICH ARE PREDOMINANTLY ENGAGED IN ASSEMBLY OPERATIONS USING IMPORTED COMPONENTS: DBRs  DIVIDEND BALANCING REQUIREMENT. DIVIDEND OUTFLOW OF AN MNC MUST BE MATCH BY AT LEAST AN EQUAL AMOUNT OF INFLOW OF F.E THROUGH EXPORTS, F.INVESTMENT  SO OPERATIONS OF MNC DOESNOT CAUSE A DRAIN ON HOST COUNTRY F.EXCHANGE RESERVES.
  82. 94. 6. PRICE CONTROL GOVERNEMENT IMPOSES ON PRODUCTS OF MASS CONSUMPTION <ul><li>CEMENT, </li></ul><ul><li>SUGAR </li></ul><ul><li>PETROLEUM PRODUCTS </li></ul><ul><li>PHARMACEUTICALS </li></ul><ul><li>FOOD </li></ul><ul><li>ETC </li></ul>MORE CONTROL MORE RISK FOR INVESTMENT SOME AGENCIES: DPCO: DRUG PRICE CONTROL ORDER, AGRICULTURE PRICE COMMISION, BUREAU OF INDUSRIAL COSTS ETC
  83. 95. MORE STRONG LABOUR BACK BY GOVERNMENT MORE RELUCTANT TO INVEST IN THAT COUNTRY. SO RISK HIGH IN LABOUR INTENSIVE INDUSTRY: IN INDIA 150 MINOR MAJOR LEGISLATION.
  84. 97. GENERAL INSTABILITY RISK : POLITICAL SYSTEM MAY CHANGE AS GOVT CHANGES. POOR COUNTRIES ARE MORE PRONE: POOR GOVERNANCE, POVERTY, EXPLOITATION, WEAK AND INEFFICIENT GOVERNMENT SO MORE POLTICAL RISK.
  85. 98. 2.OWNER SHIP RISK ; RISK OF CONFISCATION(GOVERNEMENT TAKING OWNERSHIP OF PROPERTY WITHOUT COMPENSATION, EXPROPRIATION(GOVERNMENT TAKING OWNERSHIP WITH SOME COMPENSATION), NATURALIZATION, OR DOMESTICATION(SURRENDERING PART OR FULL CONTROL IN AN MNC TO NATIONAL OR DOMESTIC FIRM OR GOVERNMENT). EARLIER UNDER FOREIGN EXCHANGE REGULATION ACT(1973), FOREIGN FIRMS WERE REQUIRED TO DILUTE SHAREHOLDING TO 40%.
  86. 100. DISINVESTMENT PROGRAMME <ul><li>FOR GREATER PRIVATISATION OF ECONOMY  LAUNCHED IN 1991-92-> WITH ANNOUNCEMENT OF NEW INDUSTRIAL POLICY. </li></ul><ul><li>TARGETS WERE SET BUT GOVERNMENT FAILED TO ACHIEVE AS PER TARGET: </li></ul><ul><li>EXAMPLE: TARGET IN 2002-03 12000 CR BUT ACHIEVED 3342 CR ONLY. </li></ul>
  87. 101. WAYS OF DISINVESTMENT. <ul><li>EARLIER  SALE OF MINORITY STAKE  LATER Yrs  STRATEGIC SALES  IN ADDITION TO THIS  INITIAL PUBLIC OFFERINGS(IPO) AND RIGHTS OFFER. </li></ul><ul><li>FACED CRITICISM WHEN DISINVEST  HPCL AND BPCL SO SUSPENDED THE OPERATION. </li></ul>
  88. 102. SOME OF THE COMPANIES DISINVESTMENT. <ul><li>HOTEL CORPORATION OF INDIA LTD(3 HOTELS) 100% </li></ul><ul><li>HTL LTD 74 % </li></ul><ul><li>CMC LTD 51 % </li></ul><ul><li>ETC </li></ul>
  89. 103. PRESENT DISINVESTMENT POLICY <ul><li>CONTENT AND DIRECTION OF THE PRIVATISATION POLICY: </li></ul><ul><ul><li>MODERNISATION AND UPGRADATION OF PSE. </li></ul></ul><ul><ul><li>CREATION OF NEW ASSETS </li></ul></ul><ul><ul><li>GENERATION OF EMPLOYMENT </li></ul></ul><ul><ul><li>SETTING UP OF DISINVESTMENT PROCEED FUNDS(DPF) </li></ul></ul><ul><ul><li>FORMULATION OF GUIDELINES FOR DISINVESTMENT OF NATIONAL ASSET COMPANIES </li></ul></ul><ul><ul><li>PREPARATION OF A PAPER ON THE FEASIBILITY AND MODALITIES OF SETTING UP AN ASSET MANAGEMENT COMPANY TO HOLD, MANAGE AND DISPOSE THE RESIDUAL HOLDING OF THE GOVERNMENT IN THE COMPANIES IN WHICH GOVERNMENT EQUITY HAS BEEN DISINVESTED TO A STRATEGIC PARTNER. </li></ul></ul>
  90. 104. VALUATION OF P S UNITS. <ul><li>VARIOUS METHODS AVAILABLE LIKE: </li></ul><ul><ul><li>DISCOUNTED CASH FLOW </li></ul></ul><ul><ul><li>HISTORICAL COST METHOD </li></ul></ul><ul><ul><li>BALANCESHEET METHOD </li></ul></ul><ul><ul><li>COMPARABLE TRANSACTION METHOD. </li></ul></ul><ul><ul><li>UNDERVALUATION OF PSU STOCK IS A LOSS OF PUBLIC PROPERTY AND A SETBACK TO NATIONAL INTEREST. </li></ul></ul>
  91. 105. STRATEGIC SALE METHOD <ul><li>INVOLVES AN EFFECTIVE TRANSFER OF CONTROL AND MANAGEMENT FROM GOVERNMENT TO A PRIVATE ENTITY WITH THE EXPECTATION THAT THE SURRENDER OF MANAGEMENT CONTROL WOULD FETCH A BETTER PRICE FROM THE PRIVATE PARTY IN A MATCHING PROPORTION. </li></ul><ul><li>PRIVATE PARTY IS CALLED THE STRATEGIC PARTNER WHICH GENERALLY HAS EXPERIENCE IN RELATED LINES OF BUSINE SS. </li></ul><ul><ul><ul><ul><li>BALCO, CMC, VSNL, IBP , ITDC HOTELS, MARUTI, HZL </li></ul></ul></ul></ul><ul><ul><ul><ul><li>READ PAGE 497 SURESH BEDI. </li></ul></ul></ul></ul>
  92. 106. PROCEEDS TO BE UTILIZE: NOT FOR DEFICITS: IT SHOULD BE USED FOR <ul><li>RETIRING HUGE PUBLIC DEBT– REDUCE INT BURDEN OF GOV`T. </li></ul><ul><li>INCREASING SOCIAL WELFARE  EXP  PUBLIC HEALTH, EDUCATION OR EMPLOYMENT GENERATION. </li></ul><ul><li>BUILDING SOCIAL AND ECONOMIC OVERHEADS </li></ul><ul><li>INCREASING CAPITAL FORMATION IN AGRI </li></ul><ul><li>RETRAINING OF WORKERS AFFECTED IN THE PROCESS OF PRIVATIZATION </li></ul><ul><li>BUILDING SAFETY NET FOR WORKERS ADVERSELY AFFECTED BY PUBLIC SECTOR RESTRUCTURING. </li></ul>
  93. 107. <ul><li>CONTAINED IN LATEST COMPETITION ACT 2002. </li></ul><ul><li>TO PREVENT PRACTISES HAVING ADVERSE EFFECT ON COMPETITION </li></ul><ul><li>TO PROMOTE AND SUSTAIN COMPETITION IN MARKETS </li></ul><ul><li>TO PROTECT THE INTERESTS OF CONSUMERS </li></ul><ul><li>TO ENSURE FREEDOM OF TRADE CARRIED ON BY OTHER PARTICIPANTS IN ONE MARKET. </li></ul>THE ACT COVERS THE WHOLE OF INDIA EXCEPT J AND K AND REPLACES EARLIER MRTP ACT.
  94. 108. COMPETITION COMMISSION OF INDIA(CCI) <ul><li>TO ELIMINATE PRACTICES HAVING ADVERSE IMPACT ON COMPETITION, PROTECTING THE INTEREST OF CONSUMERS AND ENSURING FREEDOM OF TRADE CARRIED ON BY OTHER PARTICIPANTS. </li></ul>
  95. 109. WHILE DETERMINING THE EFFECT OF COMP,… UNDER THIS ACT FOLLOWING SIX FACTORS ARE TAKEN INTO ACCOUNT.
  96. 110. <ul><li>P S DISINVETMENT AND PRIVATISATION </li></ul><ul><li>OPENING UP OF NEW SECTORS TO PRIVATE ENTERPRISE </li></ul><ul><li>DELICENSING </li></ul><ul><li>DE-RESERVATION OF SSI ITEMS </li></ul><ul><li>LIBERALISATION OF FDI </li></ul><ul><li>INFRASTRUCTURE DEREGULATION AND FACILITATION </li></ul><ul><li>IMPORT COMPETITION. </li></ul>
  97. 111. IMPORT COMPETITION <ul><li>REFORMS HAVE LED TO  INCREASED COMPETITION  BETWEEN DOMESTIC BUT ALSO FOREIGN FIRMS. </li></ul><ul><li>UNDER LIBERALISATION UNDER WTO  INCREASED IN A NUMBER OF PRODUCTS FROM 24.1 BILLION $ IN 190-91 TO $ 44.9 BILLION IN 2001-02: </li></ul><ul><li>IMPORTS IN  CAPITAL GOODS, ELECTROIC, SMALL VALUED PRODUCTS, FOOD, CHEMICALS , IRON AND STEEL, MEDICINAL PRODUCTS, COMPUTER SOFTWARE ETC. </li></ul>
  98. 112. INFRASTRUCTURE DEREGULATION AND FACILITATION: RESULTED IN <ul><li>INCREASE IN NUMBER OF FIRMS ENGAGED IN INFRASTRUCTURE PROJECTS AND RELATED SERVICES </li></ul><ul><li>CORPORATISATION OF A NUMBER OF PUBLIC UTILITIES AND THEIR FUNCTIONING ALONG MODERN CORPORATE LINES. </li></ul><ul><li>SO FOLLOWING AGENCIES ARE PLAYING IMPORTANT ROLE FOR THE SAME </li></ul><ul><li> IDFC(INDUSTRIAL DEVELOPMENT FINANCE CORPORATION. </li></ul><ul><li> STATE ELECTRICITY REGULATORY COMMISSION </li></ul><ul><li> TELECOM REGULATORY AUTHORITY OF INDIA(TRAI) </li></ul><ul><li> NATIONAL HIGHWAY DEVELOPMENT PROJECT(NHDP) </li></ul>
  99. 113. LIBERALISATION OF FDI. <ul><li>FDI CONTRIBUTED TO COMPETITION AND EXISTENCE OF COMPETITIVE CONDITIONS INDUCES FDI INFLOIW AND MNC ENTRY. </li></ul><ul><li> 1991-2002 16000 FDI PROPOSAL OF ABOUT  284812 CR WERE APPROVED, 7500 FOREIGN TECHNOLOGY AGGREEMENTS WERE APPROVED. </li></ul>
  100. 114. DE-RESERVATION OF SSI ITEMS <ul><li>RESULTED: COMPETITION NOT ONLY BETWEEN DOMESTIC AND FOREIGN FIRMS BUT ALSO SMALL AND LARGE FIRMS WITHIN DOMESTIC ECONOMY. </li></ul><ul><ul><li>HOW </li></ul></ul><ul><ul><li>1996-2003 100 ITEMS DERESERVED – EARLIER WITH ONLY SSI. </li></ul></ul><ul><ul><li>ABOUT 600 ITEMS ONLIST OF RESERVED PRODUCTS NOW FREELY IMPORTABLE. </li></ul></ul>
  101. 115. BROAD BANDING <ul><li>EXAMPLE: YOU CAN MAKE MOTORCYCLES UNDER LICENSE OF MANUFACTURING MOTORCYCLES, BUT WHEN BROAD-BANDED AS TWO WHEELER  WOULD INCLUDE SCOOTERS AND MOPEDS AS WELL. </li></ul><ul><ul><li>REASON: NEW FIRMS CAN ENTRE AND EXISTING CAN EXPAND THEIR PRODUCT LINES AND BECOME MORE COMPETITIVE THROGH ECONOMIES OF SCALE(DIVERSIFICATION ECONOMIES). </li></ul></ul>
  102. 116. DELICENSING: IT REDUCES ENTRY BARRIERS, ENCOURAGES THE FLOW OF PRIVATE INVESTMENT AND ENCOURAGES COMPETITION. <ul><li>YOU DELICENSE: EARLIER – MANDATORY  FOR  ESTABLISHING A NEW UNIT </li></ul><ul><ul><ul><li> EXPANDING THE CAPACITY OF AN EXISTING </li></ul></ul></ul><ul><ul><ul><li> CHANGING THE LOCATION OF EXISTING </li></ul></ul></ul><ul><ul><ul><li>SO UNDER NEW DELICENSING: NOW ONLY 5 INDUSTRIES ARE LEFT FOR REQUIREMENT OF LICENCE. </li></ul></ul></ul><ul><ul><ul><li>NOW ALSO INDUSTRIAL UNITS ENJOY  BROAD BANDING—SO INCREAE IN COMPETITIVE ENVIRONMENT IN THE COUNTRY. </li></ul></ul></ul>
  103. 117. ANOTHER FACTOR LEADING TO GREATER COMPETITION. <ul><li>OPENING UP OF NEW SECTORS TO PRIVATE ENTERPRISE. </li></ul><ul><ul><li>HOW: IN LAST 2 DECADES  NO OF INDUSTRIES RESERVED FOR PUBLIC SECTOR HAS BEEN GRADUALLY REDUCED. </li></ul></ul><ul><ul><ul><ul><li>ONLY DEFENCE PRODUCTS </li></ul></ul></ul></ul><ul><ul><ul><ul><li>ATOMIC ENERGY </li></ul></ul></ul></ul><ul><ul><ul><ul><li>RAILWAY TRANSPORT </li></ul></ul></ul></ul><ul><ul><ul><ul><li>SPECIFIED MINERALS ARE LEFT. </li></ul></ul></ul></ul>
  104. 118. DISINVESTMENT PROGRAMME <ul><li>FOR GREATER PRIVATISATION OF ECONOMY  LAUNCHED IN 191-92-> WITH ANNOUNCEMENT OF NEW INDUSTRIAL POLICY. </li></ul><ul><li>TARGETS WERE SET BUT GOVERNMENT FAILED TO ACHIEVE AS PER TARGET: </li></ul><ul><li>EXAMPLE: TARGET IN 2002-03 12000 CR BUT ACHIEVED 3342 CR ONLY. </li></ul>
  105. 119. WAYS OF DISINVESTMENT. <ul><li>EARLIER  SALE OF MINORITY STAKE  LATER Yrs  STRATEGIC SALES  IN ADDITION TO THIS  INITIAL PUBLIC OFFERINGS(IPO) AND RIGHTS OFFER. </li></ul><ul><li>FACED CRITICISM WHEN DISINVEST  HPCL AND BPCL SO SUSPENDED THE OPERATION. </li></ul>
  106. 120. SOME OF THE COMPANIES DISINVESTMENT. <ul><li>HOTEL CORPORATION OF INDIA LTD(3 HOTELS) 100% </li></ul><ul><li>HTL LTD 74 % </li></ul><ul><li>CMC LTD 51 % </li></ul><ul><li>ETC </li></ul>
  107. 121. PRESENT DISINVESTMENT POLICY <ul><li>CONTENT AND DIRECTION OF THE PRIVATISATION POLICY: </li></ul><ul><ul><li>MODERNISATION AND UPGRADATION OF PSE. </li></ul></ul><ul><ul><li>CREATION OF NEW ASSETS </li></ul></ul><ul><ul><li>GENERATION OF EMPLOYMENT </li></ul></ul><ul><ul><li>SETTING UP OF DISINVESTMENT PROCEED FUNDS(DPF) </li></ul></ul><ul><ul><li>FORMULATION OF GUIDELINES FOR DISINVESTMENT OF NATIONAL ASSET COMPANIES </li></ul></ul><ul><ul><li>PREPARATION OF A PAPER ON THE FEASIBILITY AND MODALITIES OF SETTING UP AN ASSET MANAGEMENT COMPANY TO HOLD, AMANGE AND DISPOSE THE RESIDUAL HOLDING OF THE GOVERNMENT IN THE COMPANIES IN WHICH GOVERNMENT EQUITY HAS BEEN DISINVESTED TO A STRATEGIC PARTNER. </li></ul></ul>
  108. 122. VALUATION OF P S UNITS. <ul><li>VARIOUS METHODS AVAILABLE LIKE: </li></ul><ul><ul><li>DISCOUNTED CASH FLOW </li></ul></ul><ul><ul><li>HISTORICAL COST METHOD </li></ul></ul><ul><ul><li>BALANCESHEET METHOD </li></ul></ul><ul><ul><li>COMPARABLE TRANSACTION METHOD. </li></ul></ul><ul><ul><li>UNDERVALUATION OF PSU STOCK IS A LOSS OF PUBLIC PROPERTY AND A SETBACK TO NATIONAL INTEREST. </li></ul></ul>
  109. 123. STRATEGIC SALE METHOD <ul><li>INVOLVES AN EFFECTIVE TRANSFER OF CONTROL AND MANAGEMENT FROM GOVERNMENT TO A PRIVATE ENTITY WITH THE EXPECTATION THAT THE SURRENDER OF MANAGEMENT CONTROL WOULD FETCH A BETTER PRICE FROM THE PRIVATE PARTY IN A MATCHING PROPORTION. </li></ul><ul><li>PRIVATE PARTY IS CALLED THE STRATEGIC PARTNER WHICH GENERALLY HAS EXPERIENCE IN RELATED LINES OF BUSINE SS. </li></ul><ul><ul><ul><ul><li>BALCO, CMC, VSNL, IBP , ITDC HOTELS, MARUTI, HZL </li></ul></ul></ul></ul><ul><ul><ul><ul><li>READ PAGE 497 SURESH BEDI. </li></ul></ul></ul></ul>
  110. 124. PROCEEDS TO BE UTILIZE: NOT FOR DEFICITS: <ul><li>RETIRING HUGE PUBLIC DEBT– REDUCE INT BURDEN OF GOV`T. </li></ul><ul><li>INCREASING SOCIAL WELFARE  EXP  PUBLIC HEALTH, EDUCATION OR EMPLOYMENT GENERATION. </li></ul><ul><li>BUILDING SOCIAL AND ECONOMIC OVERHEADS </li></ul><ul><li>INCREASING CAPITAL FORMATION IN AGRI </li></ul><ul><li>RETRAINING OF WORKERS AFFECTED IN THE PROCESS OF PRIVATIZATION </li></ul><ul><li>BUILDING SAFETY NET FOR WORKERS ADVERSELY AFFECTED BY PUBLIC SECTOR RESTRUCTURING. </li></ul>
  111. 125. <ul><li>CONTAINED IN LATEST COMPETITION ACT 2002. </li></ul><ul><li>TO PREVENT PRACTISES HAVING ADVERSE EFFECT ON COMPETITION </li></ul><ul><li>TO PROMOTE AND SUSTAIN COMPETITION IN MARKETS </li></ul><ul><li>TO PROTECT THE INTERESTS OF CONSUMERS </li></ul><ul><li>TO ENSURE FREEDOM OF TARDE CARRIED ON BY OTHER PARTICIPANTS IN ONE MARKET. </li></ul>THE ACT COVERS THE WHOLE OF INDIA EXCEPT J AND K AND REPLACES EARLIER MRTP ACT.
  112. 126. COMPETITION COMMISSION OF INDIA(CCI) <ul><li>TO ELIMINATE PRACTICES HAVING ADVERSE IMPACT ON COMPETITION, PROTECTING THE INTEREST OF CONSUMERS AND ENSURING FREEDOM OF TRADE CARRIED ON BY OTHER PARTICIPANTS. </li></ul>
  113. 127. WHILE DETERMINING THE EFFECT OF COMP,… UNDER THIS ACT FOLLOWING SIX FACTORS ARE TAKEN INTO ACCOUNT.
  114. 129. IMPORT COMPETION <ul><li>REFORMS HAVE LED TO  INCRESED COMPETITION  BETWEEN DOMESTIC BUT ALSO FOREIGN FIRMS. </li></ul><ul><li>UNDER LIBERALISATION UNDER WTO  INCREASED IN A NUMBER OF PRODUCTS FROM 24.1 BILLION $ IN 190-91 TO $ 44.9 BILLION IN 2001-02: </li></ul><ul><li>IMPORTS IN  CAPITAL GOODS, ELECTROIC, SMALL VALUED PRODUCTS, FOOD, CHEMICALS , IRON AND STEEL, MEDICINAL PRODUCTS, COMPUTER SOFTWARE ETC. </li></ul>
  115. 130. INFRASTRUCTURE DEREGULATION AND FACILITATION: RESULTED IN <ul><li>INCREASE IN NUMBER OF FIRMS ENGAGED IN INFRASTRUCTURE PROJECTS AND RELATED SERVICES </li></ul><ul><li>CORPORATISATION OF A NUMBER OF PUBLIC UTILITIES AND THEIR FUNCTIONING ALONG MODERN CORPORATE LINES. </li></ul><ul><li>SO FOLLOWING AGENCIES ARE PLAYING IMPORTANT ROLE FOR THE SAME </li></ul><ul><li> IDFC(INDUSTRIAL DEVELOPMENT FINANCE CORPORATION. </li></ul><ul><li> STATE ELECTRICITY REGULATORY COMMISSION </li></ul><ul><li> TELECOM REGULATORY AUTHORITY OF INDIA(TRAI) </li></ul><ul><li> NATIONAL HIGHWAY DEVELOPMENT PROJECT(NHDP) </li></ul>
  116. 131. LIBERALISATION OF FDI. <ul><li>FDI CONTRIBUTED TO COMPETITION AND EXISTENCE OF COMPETITIVE CONDITIONS INDUCES FDI INFLOIW AND MNC ENTRY. </li></ul><ul><li> 1919-2002 16000 FDI PROPOSAL OF ABOUT  284812 CR WERE APPROVED, 7500 FOREIGN TECHNOLOGY AGGREEMENTS WERE APPROVED. </li></ul>
  117. 132. DE-RESERVATION OF SSI ITEMS <ul><li>RESULTED: COMPETITION NOT ONLY BETWEEN DOMESTIC AND FOREIGN FIRMS BUT ALSO SMALL AND LARGE FIRMS WITHIN DOMESTIC ECONOMY. </li></ul><ul><ul><li>HOW </li></ul></ul><ul><ul><li>1996-2003 100 ITEMS DERESERVED – EARLIER WITH ONLY SSI. </li></ul></ul><ul><ul><li>ABOUT 600 ITEMS ONLIST OF RESERVED PRODUCTS NOW FREELY IMPORTABLE. </li></ul></ul>
  118. 133. BROAD BANDING <ul><li>EXAMPLE: YOU CAN MAKE MOTORCYCLES UNDER LICENSE OF MANUFACTURING MOTORCYCLES, BUT WHEN BROAD-BANDED AS TWO WHEELER  WOULD INCLUDE SCOOTERS AND MOPEDS AS WELL. </li></ul><ul><ul><li>REASON: NEW FIRMS CAN ENTRE AND EXISTING CAN EXPAND THEIR PRODUCT LINES AND BECOME MORE COMPETITIVE THROGH ECONOMIES OF SCALE(DIVERSIFICATION ECONOMIES). </li></ul></ul>
  119. 134. DELICENSING: IT REDUCES ENTRY BARRIERS, ENCOURAGES THE FLOW OF PRIVATE INVESTMENT AND ENCOURAGES COMPETITION. <ul><li>YOU DELICENSE: EARLIER – MANDATORY  FOR  ESTABLISHING A NEW UNIT </li></ul><ul><ul><ul><li> EXPANDING THE CAPACITY OF AN EXISTING </li></ul></ul></ul><ul><ul><ul><li> CHANGING THE LOCATION OF EXISTING </li></ul></ul></ul><ul><ul><ul><li>SO UNDER NEW DELICENSING: NOW ONLY 5 INDUSTRIES ARE LEFT FOR REQUIREMENT OF LICENCE. </li></ul></ul></ul><ul><ul><ul><li>NOW ALSO INDUSTRIAL UNITS ENJOY  BROAD BANDING—SO INCREAsE IN COMPETITIVE ENVIRONMENT IN THE COUNTRY. </li></ul></ul></ul>
  120. 135. ANOTHER FACTOR LEADING TO GREATER COMPETITION. <ul><li>OPENING UP OF NEW SECTORS TO PRIVATE ENTERPRISE. </li></ul><ul><ul><li>HOW: IN LAST 2 DECADES  NO OF INDUSTRIES RESERVED FOR PUBLIC SECTOR HAS BEEN GRADUALLY REDUCED. </li></ul></ul><ul><ul><ul><ul><li>ONLY DEFENCE PRODUCTS </li></ul></ul></ul></ul><ul><ul><ul><ul><li>ATOMIC ENERGY </li></ul></ul></ul></ul><ul><ul><ul><ul><li>RAILWAY TRANSPORT </li></ul></ul></ul></ul><ul><ul><ul><ul><li>SPECIFIED MINERALS ARE LEFT. </li></ul></ul></ul></ul>
  121. 136. WORLD IS NOW SMALL PLACE TO WORK. MORE OF NECESSITY. NOW YOU SEE IT MORE AS A GROWTH FACTOR YOU DESIGN POLICIES TO LINK WITH VARIOUS/ REST OF THE WORLD. ITS UNDOUBTLY NOW A PILLAR OF ECONOMIC GROWTH
  122. 137. ITS NOT PURELY A ECONOMIC AND BUSINESS CONCEPT BUT MUCH MORE PROCESS OF INTERNATIONAL INTEGRATION OF PRODUCTS, TECH, HR,CAPITAL,INFOR AND CULTURES. AS GLOBALIZATION MOVES SO ECONOMIC, SOCIAL, POLITICAL MOVES AND INTERACTION FURTHER INCREASES.
  123. 138. WHY NEED TO GLOBALIZE? <ul><li>WORLD CONCERNS  </li></ul><ul><ul><li>BIO-DIVERSITY </li></ul></ul><ul><ul><li>ENVIRONMENTAL PROTECTION </li></ul></ul><ul><ul><li>POVERTY </li></ul></ul><ul><ul><li>SUSTAINABLE DEVELOPMENT </li></ul></ul><ul><ul><li>INTERNATIONAL SECURITY AND CO-OPERATION </li></ul></ul><ul><ul><li>SO REQUIRE GLOBAL ACTION  RESULTS COUNTRIES COMING CLOSE TO EACH OTHER </li></ul></ul>
  124. 139. WORLD LEVEL GLOBALISATION <ul><li>INDICATOR/MEASURED BY: </li></ul><ul><li>SHARE OF WORLD Trade in world GDP </li></ul><ul><li>FDI(FOREIGN DIRECT INVESTMENT) IN THE WORLD AS %AGE TO WORLD GDP </li></ul><ul><li>TOTAL FOREIGN OUTPUT OF MNC AS %AGE OF WORLD GDP </li></ul><ul><li>GLOBAL TRANSACTIONS IN F E AS PROPORTION OF WORLD GDP </li></ul><ul><li>AGGREGATE TURNOVER IN FOREIGN EXCHANGE MARKETS </li></ul><ul><li>TOTAL BALANCE OF PAYMENTS RECEIPTS OF ALL THE COUNTRIES OF THE WORLD AS PROPORTION OF WORLD GDP. </li></ul>APART FROM ABOVE: CROSS BORDER TRANSACTION IN FINANCIAL SECURITIES, INT` COMMUNICATION, INT` TOURIST TRAFFIC, CROSS-BORDER FLOW OF HR ETC  INDICATOR OF WORLD GLOBALIZATION.
  125. 140. COUNTRY LEVEL GLOBALISATION SEE FROM COUNTRY POINT OF VIEW THE FOLLOWING INDICATIORS. <ul><li>SHARE OF FOREIGN TRADE(IMP+EXP) IN NATIONAL INCOME(CALLED FOREIGN TRADE ORIENTATION) </li></ul><ul><li>FOREIGN INVESTMENT(INWARD AND OUTWARD) AS PROPRTION OF TOTAL DOMESTIC INVESTMENT OR NATIONAL INCOME. </li></ul><ul><li>TRANSACTIONS IN F.E. AS PROPORTION OF TOTAL VALUE OF TRANSACTIONS IN THE ECONOMY. </li></ul><ul><li>INTERNATIONAL INVESTMENT INCOME FLOWS(IN OR OUT) AS PROPORTION OF AGGREGATE INVESTMENT INCOME(DIVIDEND + INTEREST + ROYALTY) IN THE COUNTRY </li></ul><ul><li>EMIGRANT AND IMMIGRANT VIS A VIS TOTAL POPULATION IN THECOUNTRY </li></ul><ul><li>INTERNATIONAL TOURISM TRAFFIC AS PROPORTION TO TOTAL POPULATION. </li></ul><ul><li>THE SHARE OF FOREIGN OUTPUT OF DOMESTIC MULTINATIONAL + DOMESTIC OUTPUT OF FOREIGN MULTINATIONAL AS PROPORTION OF NATIONAL INCOME OF COUNTRY. </li></ul>
  126. 141. BOP(BALANCE OF PAYMENTS) <ul><li>SYSTEMATIC SUMMARY OF ALL THE INTERNATIONAL TRANSACTIONS OF ITS RESIDENTS(INCLUDING ORGANISATION ) WITH REST OF THE WORLD OVER A PARTICULAR PERIOD, USUALY 1 YEAR. </li></ul><ul><li>TRANSACTION CAN WITH FOREIGN NATIONAL, ORGANISATION, GOVERNEMENT. </li></ul>
  127. 142. CONTINUEE. <ul><li>INTERNATIONAL TRANSACTION(RECEIPTS OR PAYMENTS). DIVIDED IN TO 2: </li></ul>CAPITAL ACCOUNT: IN THIS RECORDS TRANSACTIONS WHICH HAVE STOCK DIMENSION AS WELL: SUCH AS INTERNATIONAL COMMERCIAL BORROWINGS, FOREIGN LOANS, INVESTMENTS AND FOREIGN GOVERNMENT LOANS AND ALSO TRANSACTION WITH IMF . A BOP DEFICIT IS FINANCIED EITHER THROUGH FOREIGN BORROWINGS OR DRAWN DOWN ON COUNTRY`S F.E. RESERVES. CURRENT ACCOUNT: IN THIS TRANSACTION HAVE ONLY FLOW DIMENSION::::::::::::::: SUCH AS EXPORT AND IMPORT, REMITTANCES,DIVIDEND AND INTEREST FLOWS.
  128. 143. OTHER INDICATORS ARE: <ul><li>WORLD PRICE INDEX AND HOME PRICE INDEX </li></ul><ul><li>LEADING WORLD STOCK PRICE INDICES AND HOME STOCK PRICE INDEX. </li></ul><ul><li>WORLD GROWTH RATE VIA VIS HOME COUNTRY GROWTH RATE. </li></ul><ul><li>VARIATIONS IN F.E OF WORLD CURRENCIES VIS VIS HOME CURRIENCY. </li></ul><ul><li>ALSO SEE WORLD LEVEL MACRO- INDICATORS EFFECT HOME MARCO INDICATORS. </li></ul>
  129. 144. <ul><li>INDUSTRY LEVEL GLOBALISATION: INDICATORS </li></ul><ul><li>MNC`S:: BETTER PLACED </li></ul><ul><li>INDUSTRY EXPORTS PLUS IMPORTS AS PROPORTION OF INDUSTRY OUT PUT </li></ul><ul><li>FOREIGN INVESTMENT IN THE INDUSTRY + FOREIGN INVESTMENT BY FIRMS OF THE INDUSTRY AS PROPORTION TO TOTAL INVESTMENT IN THE INDUSTRY. </li></ul><ul><li>TOTAL FOREIGN EXCHANGE TRANSACTIONS CONDUCTED BY THE FIRMS IN THE INDUSTRY AS PROPORTION OF TOTAL TRANSACTIONS OF THE INDUSTRY. </li></ul><ul><li>TOTAL FOREIGN OUTPUT AS PROPORTION OF TOTAL OUTPUT(DOMESTIC + FOREIGN) OF THE FIRMS IN THE INDUSTRY. </li></ul><ul><li>INVESTMENT INCOME RECEIVED FROM ABROAD AND REPATRIATED AS A PROPORTION OF TOTAL DIVIDEND PLUS INTEREST PAID BY THE FIRMS IN THE INDUSTRY TO DOMESTIC AND FOREIGN ENTITIES. </li></ul>WITHIN A COUNTRY SPECIFIC INDUSTRIES OPERATE GLOBALLY
  130. 145. FIRM LEVEL GLOBALISATION <ul><li>WITHIN INDUSTRIAL SEGMENTS  INDIVIDUAL FIRMS OPERATE GLOBALLY. </li></ul><ul><li>THEY HAVE </li></ul><ul><ul><li>HIGH LEVEL OF TECHNOLOGY DEVELOPMENT </li></ul></ul><ul><ul><li>STRONG COMPETITIVE ADVANTAGES </li></ul></ul><ul><ul><li>INTERNATIONAL OUTSOURCING CONNECTIONS </li></ul></ul><ul><ul><li>ACCESS TO FOREIGN MARKETS. </li></ul></ul>
  131. 146. CONTINUE..
  132. 147. INDIAN MEASURES FOR GLOBALIZATION. <ul><li>TRADE LIBERALIZATION: REDUCTION OF IMPORT TARIFFS </li></ul><ul><li>REMOVAL OF QUANTITATIVE RESTRICTIONS </li></ul><ul><li>LIBERALISATION: EASY NORMS FOR MNC ENTRY AND FDI </li></ul><ul><li>LIBERALISATION OF F.E. MANAGEMENT REGIME </li></ul><ul><li>GREATER FREEDOM TO FIIs IN MONEY AND CAPITAL MARKETS </li></ul><ul><li>CONVERTIBILITY: RUPEE IN F.E AND VICE VERSA ON CUREENT ACCOUNT TRANSACTIONS  FOREIGN TRANSACTION RELATED TO TRADE OG GOODS AND SERVICES, SHORT TERM BANKING AND CREDIT FACILITIES. </li></ul><ul><li>STRENGTHENING OF TRADE INFRASTRUCTURE INCLUDING PORT. </li></ul><ul><li>WIDENING,DEEPENING AND STREAMLINING OF FOREIGN EXCHANGE MARKET </li></ul><ul><li>INCENTIVES AND POLICIES TO ATTARCT NRI FUND AND INVESTMENT </li></ul><ul><li>GREATER FREEDOM TO CORPORATE ORGANIZATION TO RAISE FUNDS DIRECTLY FROM ABROAD. </li></ul>
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