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  • 1973 witnessed Oil Crisis in which OPEC countries reduced their Oil supply which leads to increase in Oil prices. As Crude Oil was US Dollar dominated so to buy it we need to sell Indian Rupee and buy US Dollar. This lead to increase in demand of USD that leads to rise in trade deficit and shrinking of Foreign currency reserve. As the supply of rupee increases it lead to devaluation of Rupee.To control the value of Rupee the government has to jump in and has to regulate the price of Rupee and thus Came FERA ( ie. Foreign Exchange Regulation Act)
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    2. 2. MRTP Liberalization Brijesh Agravat
    3. 3. I. MRTP Liberalisation  The MRTP Act, brought into force form 1st June 1970, was a very controversial piece of legislation  The Monopolies and Restrictive Trade Practices Act (MRTP) has been growth restricting regulation  The existing restrictions on acquisition/transfer of shares have also been removed  The main objectives of MRTP Act 1969 were (1) Prevention of concentration of economic power to common detriment (2) Control of Monopolistic, restrictive and unfair trade practices which are pre judicial to public interest
    4. 4. II. MRTP Act to Competition Act  India has, in the pursuit of globalization, responded to opening up its economy, removing controls and resorting to liberalization  The MRTP Act, 1969 has become obsolete in certain respects in the light of international economic developments relating more particularly to competition laws and there is a need to shift the focus from curbing monopolies to promoting competition  The MRTP Act, in comparison with competition laws of many countries, is inadequate for fostering competition in the market and trade and for reducing, if not eliminating, anti- competitive practices in the country‟s domestic and international trade
    5. 5.  Effective Enforcement  The gains sought through competition law can only be realized with effective enforcement  The Government should provide the required infrastructure and funds to make the Competition Commission an effective Tribunal to prevent  The Future  The opinion of the Commission is not binding on the Government and it may formulate its Competition Policy as it deems fit
    6. 6. III. Rise, Fall and Need for Change  India, in its formative years of freedom, laid down the seeds of socialistic approach towards economic development  the basic aim is to establish the reasons for the failure of the MRTP and the subsequent reasons for the establishment of the Competition Act  The methodology adopted in this project is descriptive. The research is based on findings and statistics provided in primary sources like Statistical data and Committee Reports and on secondary sources of books and articles published in journals  The research is limited to the resources available at the NALSAR Library and the data sets available online and at the NALSAR Library in the manner of Study Reports and Research findings
    7. 7. IV. HC pulls up BMC for inaction against unauthorized structure  The Bombay High Court has pulled up BMC for not taking action against an unauthorized construction in Prabhadevi area of the city until they got authority from the city police to proceed in this direction  The counsel for the corporation was not been able to point out any such provision in law, except referring to Section 53(6) of the MRTP Act  The second petition was filed by Katkam, as a counter application to the first petition  "In that sense, the fact that the petitioner in the first writ petition has invoked remedy of civil suit will not come in the way of the first petitioner in pursuing the remedy of petition which is pending in this court," the court noted
    8. 8.  However, Katkam alleged that even the first petitioner had committed illegality and carried out unauthorized construction in the premises occupied by him  "Since we have directed the Deputy Commissioner to look into the matter and take corrective measures in respect of the premises referred to in the show cause notice January 12, we hope and trust that even grievance of the petitioner in the second petition in respect of unauthorized structure put up by the petitioner in the first petition is also examined and appropriate action taken in accordance with law in that respect," the judges
    9. 9. V. Forum wants cable contracts registered under MRTP Act  In a major development, the Pune consumer disputes redressal forum has directed cable control room owners in Maharashtra to register their contracts with broadcasters under the MRTP Act, 1969  This is expected to bring in the much needed legal regulation to the cable television service industry  The court gave this directive in the matter of a representative complaint filed by subscribers' group Grahak Hitvardhini (GH) against the Union of Cable Operators & Control Room Owners, Maharashtra, and its president, Vasant Patwardhan. The complaint (327/2002) was decided by consent terms (mutual agreement) of the parties involved
    10. 10.  He stated that when the conditional access system (CAS) will be introduced in Mumbai, Delhi, Chennai and Kolkata from July 14, channel companies are expected to introduce individual rates for channels  Even these rates can now be challenged in the MRTP commission, Velankar said, adding that contrary to popular belief, the MRTP Act is still very much valid in the country  Meanwhile, the GH, acting on behalf of subscriber Ajit Gokhale, has filed another complaint with the consumer court, seeking compensation from Shiva Cable Vision, Baner road, for disconnecting cable connection without due notice  The case has been filed under Section 2(G) of the Consumer Protection Act, 1986
    12. 12.  The new industrial policy curtailed public sector‟s pre-eminent role in industry and threw open the industrial arena to the private sector in almost full measure.  Throughout the previous 40 years “a commanding role for the public sector” had formed the cornerstone of India‟s industrial policy. Public sector‟s exclusive domain now stands limited to a few core industries like arms and ammunition, atomic energy and railways. As much as three-forth of total industrial activity of the country is now available for the private sector.  Another significant measure under the NIP as regards the public sector is the extension of the purview of the board for Industrial and Financial Reconstruction (BIFR) to the public sector.  The government amended the Sick Industrial Companies Act (SICA) and armed itself with powers to tackle sick PSUs.  According to the amended provisions of SICA, chronically sick PSUs would be referred to BIFR for suggestions on rehabilitation. Through this route, even closure of PSUs has become a real possibility.
    13. 13. Article-1 Articles on Public Sector Employee Motivation -- Success Stories ... Employee Motivation A supervisor's two most important functions are to develop and motivate their employees Building a Better Carrot This terrific article from GovernmentExecutive.com outlines some of the creative employee recognition strategies that Federal managers have used with great success. Motivation Secrets This excerpt from John Baldoni's book Great Motivation Secrets of Great Leaders provides an excellent overview of the leadership behaviors that contribute to employee motivation. Includes some excellent leadership stories and summarizes the framework covered in the book. Employee Engagement .The Gallup Organization has graciously allowed GovLeader.org to post several articles from the Gallup Management Journal Making Creative Use of Employee Recognition Programs This article discusses the importance of using a mix of employee recognition techniques throughout the year. Includes free award certificate templates. The Link Between Innovation and Motivation This article discusses several techniques managers can use to foster innovation in a way that can energize employees and improve your operation. EPIC: The Science and Art of Delegating This article, from the Spring 2002 issue of the Kravis Leadership Institute's leadership review, provides a useful framework to help managers delegate more effectively
    14. 14. Article-2 Public sector cutbacks: Which IT contracts are at risk?  As the UK government looks for ways to cut public spending, Tola Sargeant, research director of TechMarketView examines which major software and IT services (SITS) contracts are at highest risk of cancellation, curtailment or 'de-scoping'. Which suppliers are likely to be most affected as the axe falls and what can they do to minimise the risk?  A complex issue  The Labour government is considering which projects could be sacrificed to cut costs. But, as you might expect, the risk of IT programmes being cancelled or curtailed is significantly higher if there is a change of government at the next election, due by June 2010.  The National Identity Scheme (ID Cards)  Gordon Brown's government has already announced plans to make ID cards voluntary, rather than compulsory, at least for the next Parliament.  National Programme for IT in the NHS (NPfIT)  Any supplier tendering for these deals will have watched BT, CSC and former LSPs Accenture and Fujitsu struggle to deliver and demand a very 'fair' price for the work. Even with nationally agreed frameworks for purchasing such systems, the total cost could well exceed the keen deals that former NHS IT chief Richard Granger originally negotiated with the LSPs back in 2003
    15. 15. Article-3 9/11, Deep Events, and the Curtailment of U.S. Freedoms  A war on terror is as inappropriate a cure as a U.S. war on drugs, which as we have seen in Colombia makes the drug problem worse, not better. The war on terror and the war on drugs have this in common: both are ideological attempts to justify the needless killings of thousands – including both American troops and foreign civilians – in another needless war.  The war on terrorism was not declared on September 11 [2001]; rather, it was redeclared, using the same rhetoric as the first declaration twenty years earlier.  events which are systematically ignored, suppressed, or falsified in public (and even internal) government, military and intelligence documents, as well as in the mainstream media and public consciousness. Underlying them is frequently the involvement of deep forces linked to either the drug traffic or to agencies of surveillance (or to both together), whose activities are extremely difficult to discern or document  This brings us to 9/11. On that day, before the last plane had crashed in Pennsylvania, the White House authorized the institution of so-called COG plans. There is no doubt that COG was introduced – The 9/11 Report confirms it twice, on pages 38 and 326.
    16. 16. Article-3 9/11, Deep Events, and the Curtailment of U.S. Freedoms  One of the post-Watergate reforms so detested by Vice-President Cheney was the National Emergencies Act. It requires specifically that “Not later than six months after a national emergency is declared, …, each House of Congress shall meet to consider a vote on a joint resolution to determine whether that emergency shall be terminated  Thanks to 9/11, followed by COG, we now have a military command in the United States (NORTHCOM), unprecedented surveillance of both foreign nationals and U.S. citizens, and plans for massive detention of folks like you and me, if our protests should begin to threaten the war machine.
    17. 17. Foreign exchange regulatory regimes in India - from control to management
    18. 18.  Context of foreign exchange regulations  There is a German word called zeit-geist which, I am told, can broadly be translated as the „spirit of time‟. Nothing better describes the evolution of foreign exchange regulation in India. Let me start with a brief brush of history. Soon after independence, a complex web of controls were imposed for all external transactions through a legislation i.e., Foreign Exchange Regulation Act (FERA), 1947.  Control- to- management: FERA-to-FEMA  In the 1990s, consistent with the general philosophy of economic reforms a sea change relating to the broad approach to reform in the external sector took place. The Report of the High Level Committee on Balance of Payments (Chairman: Dr. C. Rangarajan, 1993) set the broad agenda in this regard.
    19. 19. As emphasized by the Rangarajan Committee that there could be capital outflows from residents in the guise of currentaccount transactions after current account convertibility, certain safeguards were also built into the system after FEMA came into effect. For example:  First, the requirement of repatriation and surrender of export proceeds was continued, with provision of Exchange Earners Foreign Currency (EEFC) account for use by exchange earners.  Second, all authorized dealers were allowed to sell foreign exchange for underlying current account transactions supported by documentary evidence.  Third, a proactive approach in the development of money, government securities and forex markets has been adopted.  Fourth, effort has been made to improve the information base on transactions in the forex markets with respect to its nature and magnitude through reports and statements. The insistence on adequate and timely reporting requirements from authorised dealers for various foreign exchange transactions also helped in simplification and liberalisation process.  Fifth, as a general rule, genuine hedging of exposures under specified conditions is allowed.
    20. 20.  Capital account liberalization approach  Globalization of the world economy is a reality that makes opening up of the capital account and integration with global economy an unavoidable process. Today capital account liberalization is not a choice. Governor, Dr. Reddy once commented that, “capital account liberalisation is a process and it has to be managed keeping in view the elasticity in the economy, and vulnerabilities or potential for shocks. These include fiscal, financial, external, and even real sector say, oil prices and monsoon conditions for India.”  Recent policy initiatives  India adopted a gradualist approach while initiating a process of gradual capital account liberalisation in the early 1990s and treated it as a process rather than an event. In recent past, there has seen significant changes in the external sector policy of the Reserve Bank.  Investment overseas  To further the process of capital account liberalisation, steps were taken to encourage the strategic presence of the Indian corporates overseas. Overseas investment are also permitted for undertaking agricultural activities including purchase of land incidental to this activity either directly or through the overseas offices
    21. 21.  External commercial borrowing  Keeping in view India‟s external sector position, as reflected in country‟s various external debt sustainability indicators, a comprehensive review of the ECB guidelines was carried out in consultation with the Government and revised ECB guidelines, effective February 1, 2004, were announced to encourage corporates to access ECB for undertaking real investment activity in India and for overseas direct investment in JVs and Wholly Owned Subsidiary (WOS). The maximum amount of ECB that can be accessed under the Automatic Route is enhanced to USD 500 million (from USD 50 million previously) per financial year
    22. 22.  Procedural simplifications  No liberalisation effort is complete unless the customers or the end-users of the forex market can access the same through simple and transparent procedures. A number of initiatives have been taken towards procedural simplification with an objective of reducing the transaction cost.  Way ahead  India‟s capital account liberalisation measures have been largely effective. Among other factors, suitable policy measures in respect of the external sector insulated India from the 1997 Asian crisis. We have moved forward gradually towards Capital Account Convertibility with a broad reform agenda that encompasses trade, competition, reform of the financial system and industrial restructuring.
    23. 23. FROM FERA TO FEMA Summary Government of India and RBI managed our foreign exchange better than several other countries. However, today FERA is doing more harm than good. The policy of consistent devaluation of rupee is counter productive and harmful. We must move much faster towards Foreign Exchange Management Act. It is good that both GOI & RBI are serious about it. India is at such a fortunate position in terms of foreign exchange that - It is possible to start revaluing the rupee; This can only help us in controlling inflation and simultaneously achieving growth. The presentation is more on macro policy level than on technicalities of the law. Conclusion is - there is reason for considerable optimism on the FERA front. It is for the nation to exploit the available potential.
    24. 24. Paradigm Shift. Paradigm shift means, for the same issue/problem which you want to solve, Have an entirely new model, a new structure. Be prepared to consider radically new ideas. Probably contrary to our thinking so far. Purposes of FERA 1) To help RBI in maintaining exchange rate stability. 2) To conserve precious foreign exchange. 3) To prevent/regulate Foreign business in India
    25. 25. Exports No country can survive in the long run without exports paying for imports. However, there can be phases in the growth cycle of a nation - when foreign investments can pay for trade deficit. At present, some of the exports are deeply hurting India.
    26. 26.  Future role of RBI In future, the role of RBI has to be similar to that of Central Banks world over. It is not RBI's function to sit in judgment over several business decisions to be taken by the businessmen - Indian as well as foreign. In a fast moving economy, one can not expect that for several business decisions, the businessman has to go to RBI and take a "prior permission". This is the bottleneck in expanding Indian economy. RBI has to act like SEBI. Businessman can go ahead and do his business. There will be prescribed guidelines and regulations for business. It will be expected that the businessman will follow these guidelines. There will be no question of taking prior permissions. If anybody violates the guidelines, RBI/enforcement directorate will strike just as SEBI or police may strike a violator of law.
    27. 27. Foreign Exchange Regulation Act [FERA] PREPARED BY: MANMITSINH VAJA-25
    30. 30.  Foreign exchange is the system or process of converting one national currency into another, and of transferring money from one country to another
    31. 31. FOREIGN CURRENCY  Foreign currency means any currency other than Indian currency. FOREIGN SECURITY  Foreign security means any security, in the form of shares, stocks, bonds, debentures or any other instrumental denominated or expressed in foreign currency and includes securities expressed in foreign currency but where redemption or any form of return such as interest or dividends is payable in Indian currency.
    32. 32. HISTORY Reason
    33. 33. The 1973 law was created during the tenure of Prime Minister Indira Gandhi with the goal of conserving India's foreign exchange resources. The country was facing a trade deficit, which was followed by a devaluation of the currency and an increase in the price of imported oil. The act specified which foreign exchange transactions were permitted, including those between Indian residents and nonresidents.
    34. 34. AN INTRODUCTION TO FERA  The FERA (Foreign Exchange Regulation Act) deals with laws which relate to foreign exchange in India  The laws were made to manage foreign investments in India. The FERA has its origin at the time of Indian Independence.
    35. 35. In the beginning, it was a temporary arrangement to control the flow of foreign exchange. In 1957 the act was made permanent. As the industrialization grew in India, there was an increase in the foreign exchange investments. As a result, there arose a need to protect it.
    36. 36. AN INTRODUCTION TO FERA  The FERA (Foreign Exchange Regulation Act) deals with laws which relate to foreign exchange in India  The laws were made to manage foreign investments in India. The FERA has its origin at the time of Indian Independence.
    37. 37. In the beginning, it was a temporary arrangement to control the flow of foreign exchange. In 1957 the act was made permanent. As the industrialization grew in India, there was an increase in the foreign exchange investments. As a result, there arose a need to protect it.
    38. 38.  . Accordingly, in 1973 the Foreign Exchange Regulation Act was amended.  FERA consists of 81 complex sections  Under FERA, any offence was a criminal one which included imprisonment as per code of criminal procedure, 1973.
    39. 39. OBJECTIVE‟S  prevent the outflow of Indian currency  To regulate dealings in foreign exchange and securities  To regulate the transaction indirectly affecting foreign exchange  To regulate import and export of currency and bullion
    40. 40.  To regulate employment of foreign nationals  To regulate foreign companies  To regulate acquisition, holding etc of immovable property in India by non- residents To regulate certain payments . To regulate dealings in foreign exchange and securities. To regulate the transactions indirectly affecting foreign exchange.
    41. 41. PROVISIONS  Regulation of dealing in foreign exchange.  Restrictions on payments.  Restrictions regarding assets held by non residents and import & export of certain currency & bullion .  Duty on persons entitled to receive foreign exchange and payment for exported goods. cont…
    42. 42.  Restriction on appointment of certain persons and companies as agents or technical or management advisers in india  Restriction on establishment of place of business in india  Prior permission of Reserve Bank required for taking up employment in india by nationals of foreign state  Restrictions on immovable property
    43. 43. AMENDMENTS TO THE ACT  Government proposed to introduce comprehensive amendments in FERA due to changes in economic policy ,especially liberalization of industrial sector and most to open up the economy through changes in trade policy and encouragement of foreign investment .As a result ,the required changes were announced in budget speech of 1992-1993. The changes so introduced by issue of notification by RBI or Central Government.  cont…