Category: Business Environment

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  • Pros and Cons of Globalization: How to Understand

    Pros and Cons of Globalization: How to Understand

    Discover the pros and cons of globalization and its effects on the economy, politics, culture, and the environment with this guide.

    Exploring the Pros and Cons of Globalization

    Globalization refers to the increasing interconnectedness and interdependence of countries through the exchange of goods, services, ideas, and information on a global scale involves the integration of economies, cultures, and societies, enabling the flow of people, capital, technology, and knowledge across borders.

    This phenomenon has been driven by advancements in transportation, communication, and technology, facilitating global trade, investment, and cultural exchange. It has both positive and negative effects, influencing various aspects of society, including the economy, politics, culture, and the environment. The following A Comprehensive Guide to the Globalization Pros and Cons below are;

    Exploring the Pros and Cons of Globalization Image
    Photo from ilearnlot.com

    Pros of Globalization:

    Globalization has been a topic of much debate and discussion. It brings with it several advantages that have had a significant impact on the world. Here are some of the key pros of globalization:

    Economic Growth:

    Globalization has opened up new markets and expanded opportunities for businesses to trade and invest across borders. This has stimulated economic growth by increasing productivity, innovation, and efficiency. It has helped developing countries in particular to attract foreign investment, create jobs, and improve their standard of living.

    Access to a Variety of Goods and Services:

    Through globalization, people have access to a wide range of products and services from around the world. This has increased consumer choices and affordability. It has also allowed businesses to access a global customer base, leading to market expansion and diversification of offerings.

    Cultural Exchange and Understanding:

    Globalization has facilitated cultural exchange and understanding by enabling the flow of ideas, values, and traditions across borders. This has led to a greater appreciation and tolerance of different cultures, promoting diversity and enriching societies.

    Technological Advancements:

    Globalization and technological advancements go hand in hand. The exchange of technology and knowledge across borders has accelerated innovation and progress in various fields. It has contributed to improvements in healthcare, communication, transportation, and many other sectors.

    Collaboration and Cooperation:

    Globalization has encouraged collaboration and cooperation between countries. It has fostered international partnerships and alliances, leading to joint efforts in addressing global challenges such as climate change, poverty, and terrorism.

    Increased Standard of Living:

    Globalization has played a role in raising the standard of living for many people around the world. It has brought access to better healthcare, education, and improved living conditions. It has also facilitated the sharing of best practices and knowledge, leading to advancements in various industries.

    While globalization has its benefits, it also has its downsides. In the next section, we will explore some of the cons of globalization.

    Cons of Globalization:

    While globalization has brought numerous advantages, it is not without its drawbacks. It is important to consider the following cons of globalization:

    Economic Inequality:

    Globalization has contributed to widening the wealth gap between the rich and the needy. Developing countries, in particular, may struggle to compete with the economic powerhouses, leading to unequal distribution of wealth and resources. This can result in social and political instability.

    Job Displacement:

    Globalization has led to the outsourcing of jobs to countries with lower labor costs. While it has created new job opportunities in certain sectors, it has also resulted in job losses in traditional industries. This can lead to unemployment and income insecurity, particularly for workers in vulnerable industries.

    Environmental Impact:

    Globalization has increased the demand for resources and has intensified production and consumption patterns. This has hurt the environment, contributing to climate change, pollution, deforestation, and the depletion of natural resources. Transporting goods across long distances has also led to increased carbon emissions.

    Cultural Homogenization:

    While globalization promotes cultural exchange, there is also a risk of cultural homogenization. Globalized trends, languages, and practices can overshadow local traditions, languages, and customs. This can lead to the erosion of cultural diversity and the loss of cultural heritage.

    Exploitation of Labor:

    In some cases, globalization has resulted in the exploitation of low-wage workers in developing countries. Sweatshops, poor working conditions, and violation of labor rights are some issues associated with globalization. This raises ethical concerns and calls for better regulations and labor protections.

    Loss of Sovereignty:

    Globalization entails an interconnected world where decisions made by international organizations and multinational corporations can impact national policies. This can erode the sovereignty of individual nations, limiting their ability to make decisions in their best interests.

    It is essential to address these challenges and work towards a more inclusive and sustainable form of globalization that minimizes the negative impacts while maximizing the benefits for all.

    Bottom line

    Globalization is the increasing interconnectedness and interdependence of countries through the exchange of goods, services, ideas, and information on a global scale. It has both positive and negative effects on various aspects of society, including the economy, politics, culture, and the environment. Pros and Cons of Globalization: A Comprehensive Overview.

    The pros of globalization include economic growth, access to a variety of goods and services, cultural exchange and understanding, technological advancements, collaboration and cooperation between countries, and an increased standard of living. However, globalization also has cons such as economic inequality, job displacement, environmental impact, cultural homogenization, exploitation of labor, and loss of sovereignty. It is important to address these challenges and strive for a more inclusive and sustainable form of globalization.

  • Old and New Industrial Pattern During for 5 Year Plans in India

    Old and New Industrial Pattern During for 5 Year Plans in India

    Old and New India Industrial Pattern: Indian industries provided all nearby needs as well as empowered India to trade its finished items. Indian fares comprised primarily of fabricates like cotton and silk textures, calicoes, masterful product, silk, and woolen material. The effect of the British association and industrial transformation prompted the rot of Indian handiworks. Here is the explain Patterns of Indian Industrial. Instead, machine-made merchandise began pouring into India. The void made by the rot of Indian painstaking work was not filled by the ascent of the current industry in India in light of the British arrangement of encouraging the import of produces and fare of crude materials from India.

    The main highlights of the industrial pattern in India just before planning (1950) were as under:

    Lopsided pattern of industry – First Industrial Pattern:

    The quirk of the industrial pattern of India was the high grouping of business either in little production lines and family unit undertakings. For example the most reduced size gathering or that there was a high convergence of work in enormous manufacturing plants, for example, the most noteworthy size gathering. The medium size industrial facilities didn’t create in India. The presence of these disproportionate industrial patterns was because of the pioneering idea of our economy. The foreign firms and those claimed by enormous business and industrial magnates were of a huge size coming at the highest point of the pyramid, and at the base were countless indigenous little size firms. The imbalance of the industrial patterns was reflected without the center business visionaries running medium-sized firms.

    Low capital Intensity – Second Industrial Pattern:

    Another element of the industrial pattern of India was the commonness of low capital intensity. It was the aftereffect of two variables – first, the overall degree of wages in India was low, and second, the little size of the home market on account of the low per capita income and the restricted utilization of large scale manufacturing (or high capital intensity) procedures brought about low capital per laborer utilized.

    Composition of Manufacturing yield – Third Industrial Pattern:

    There was an underlying lopsidedness in the industrial patterns. For the situation of buyer products, the homegrown stock was more than the interest. The index of the homegrown stockpile of purchaser products was 112 when contrasted with homegrown interest equivalent to 100. In any case, for the situation of maker products, the homegrown supplies missed the mark regarding homegrown interest. The index number of homegrown supplies about interest was 80. This increased our reliance on different nations in the capital merchandise area.

    The ends were self-evident. There was an extraordinary requirement for increasing the yield of the firm and intermediate maker products to address the unevenness between their interest and supply. Industrial improvement “isn’t exclusively a cycle of expanding yield to fulfill the rising need made by growing capita incomes; it is additionally a cycle in which existing interest for fabricates is met increasingly for homegrown creation instead of from foreign sources.

    So, the industrial plant pattern’s in Indian just before planning was set apart by low capital intensity, restricted improvement of medium-sized manufacturing plant undertakings, and lopsidedness between shopper products and capital merchandise industries. It would be of interest to examine the degree to which the Five Year Plan has endeavored to improve the industrial area patterns, right its imbalance build up the capital products area.

    Here is the article on Old and New nine Industrial Pattern During for 5 Year Plans in India.

    The pattern of the industrial areas in India has experienced significant changes during the time of planning. We can think about the progressions under the following heads:

    Infrastructure:

    An impressive extension of the infrastructure of the economy is fundamental for the present-day industrial turn of events. Therefore, efforts were coordinated towards building up essential offices like force, transport, and interchanges in the 5-year plans. Duration of 5 years Plan list:

    • First Five Year Plan (1951-56)
    • Second Plan (1956-61)
    • Third Plan (1961-66)
    • Fourth Plan (1969-74)
    • Fifth Plan (1974-78)
    • Sixth Plan (1980-85)
    • Seventh Plan (1985-90)
    • Eighth Plan (1992-97)
    • Ninth Plan (1997-2002)
    • Tenth plan (2002-2007)

    Increasing Share of Industry in GDP:

    We can see the increase in the portion of the industrial area in the GDP over the planning time frame. The administration area is the biggest area of India. Net or Gross Value Added (GVA) at current costs for the administration area assess at 100.46 lakh crore INR in 2019-20. The administration area represents 54.77% of absolute India’s GVA of 183.43 lakh crore Indian rupees. With GVA of Rupees. 50.40 lakh crore, the Industry area contributes 27.48%. While Agriculture and associated area share 17.76%.

    According to CIA Fackbook, area shrewd Indian GDP creation in 2017 is as per the following: Agriculture (15.4%), Industry (23%), and Services (61.5%). With the creation of the horticulture movement of $375.61 billion, India is the second bigger maker of farming items. India represents 7.39 percent of all-out worldwide farming yield. India is route behind China, which has $991 bn GDP in the agribusiness area. The gross domestic product of the Industry area is $560.97 billion, and the world position is 6. India’s reality rank is eight in the Services area, and its GDP is $1500 billion.

    Hefty and Capital Goods Industries:

    To reinforce the industrial base of the economy, the Mahalanobis model offered significance to the advancement of substantial machine-building industries and capital products industries. After the weighty investment in this area, it can’t be rejected that the industrial base of the nation is currently a lot more grounded than it was in 1950-51. Be that as it may, the new patterns are troubling.

    Synthetics, Petrochemicals, and Allied Industries:

    Prior, the quickest developing area involved industrial gatherings of fundamental metals, metal items, and machinery; however, in the 1980s, the main players were the synthetics, petrochemicals, and associated industries. Metal-based items and machinery items lost their supremacy in industrial development during the 1980s and confronted the possibilities of additional decline later on. The 1980s along these lines mark a huge period in industrial improvement in the country.

    The development of the Public Sector:

    There was nothing similar to a public area in pre-independent India and all exercises in the industrial area were under the private area. After independence, the public area arose and extended monstrously. At the hour of the beginning of the First Plan, the public area units numbered five with an absolute capital of Rupees 29 crore as it were. Regardless of their shortcomings, it is incorrect to excuse their commitment to the Indian economy as insignificant. PSEs have assumed a significant part in the creation of energizes, fundamental metal industries, non-ferrous metal industries, composts, correspondence hardware, and so forth

    Progression:

    From the 1990s onwards, the private area investment has increased massively; the private area would now be able to enter practically any field of the monetary and industrial movement. The part of the public area is, consequently, declining.

    Purchaser Durables:

    The purchaser sturdy products industries have extended quickly because of the strategy of advancement follows by the public authority in the 1980s.

    Dawn Industries:

    Dawn industry is a slang term for another emerging industry that requires to turn into a solid area. Also, Dawn industries fill quickly in an economy and are probably going to become market pioneers right away. What makes dawn industries effective is a right investment that can give capital appreciation for the time being and consistent returns in the long haul. Dawn industries include banking and finance, retail, medical services, and entertainment.

    In India, dawn industries have developed since the time of advancement. As a component of the reform cycle, the Indian telecom area was opened to the private area. The telecom industry, alongside information innovation, banking, retail, entertainment, flight, and accommodation has arisen as the leading dawn industries in India. These territories have obtained a colossal push and show scope for significant development.

    Footloose industry:

    The footloose industry is an overall term for an industry that can be put in any area without being influenced by variables, for example, assets or transport. These industries regularly have spatially fixed costs; which implies that the expenses of the items don’t change independently of where the item is collected.

    They for the most part rely upon crude materials that are light thus can effortlessly ship from somewhere else. Or then again such industries may have generally accessible crude materials, for instance, a pastry shop, or use parts from a wide scope of providers, for instance, the gadgets industry.

    Jewels and microprocessors are a few instances of footloose industries. For example, the industry can be sited in any of a few spots, regularly because transport costs are immaterial. Quite possibly the main footloose industries are computing and information innovation; since this industry isn’t attached to any place or wellspring of crude material, and it can pick its own areas.

    Normally, a footloose industry will find itself someplace helpful close to significant courses; and, so on where it can likewise pull in the best staff. Footloose industries likewise allude to transnational organizations that utilize individuals in foreign nations at a less expensive rate, than they could in their host nations. In India, footloose industries have arisen in the areas of metals and minerals, computing and information innovation, and so forth.

    What Pattern is the technique or Strategy for Industrial Development and Growth?

    The industrial area should develop at more than 10% to accomplish the objective development; the pace of 8 percent development for GDP during the Tenth Plan time frame. The industry will, nonetheless, need to confront more grounded international rivalry as a result of the expulsion of quantitative limitations on imports since April 2001. Besides, divestment in broad daylight ventures will bring about a consistent increase in the part of the private undertaking. Above we are read it Nine Industrial Patterns of India; The Tenth Plan must, therefore, center around creating an industrial arrangement climate helpful for productive and serious activities.

    A decrease of projective duty obstructions will progressively use to upgrade the serious capacity of the industrial endeavor. Additionally, the arrangement of advancement should make more unavoidable and a portion of the unwieldy administrative component that continues to persevere should be destroyed. Thirdly, the 10th Plan should likewise guarantee that strategies encouraging the business intensive limited scope area sought after. Nonetheless, there is a need to survey and rewind a portion of the reservations of items for the limited scale area. Fourthly, the private endeavor should likewise willingly and consistently gear itself to a climate of rivalry. Seeking strategy measures for the elimination of rivalry will nullify the upsides of the advancement strategy structure.

    Old and New Industrial Pattern During for 5 Year Plans in India Image
    Old and New Industrial Pattern During for 5 Year Plans in India; Image from Pixabay.
  • Economic reforms: Meaning, Definition, Need, and Achievements

    Economic reforms: Meaning, Definition, Need, and Achievements

    Economic reforms in India – Introduction; The performance of the Indian economy within the last decade has been remarkable. Business environment easy – This can partly attribute to the continued economic reforms. Since 1991, the govt of India has introduced diverse economic reforms to tug the country out of the depression and to accelerate the speed of growth. Also, The reforms have embraced almost all aspects of the country’s economy.

    Economic reforms: Introduction, Meaning, Definition, Importance, Need, and Achievements

    Policies concerning industrial licensing, trade and foreign investment have undergone major changes. Also, significant macroeconomic adjustments have taken place. Economic institutions too have undergone a significant change; the banking sector and capital markets, in particular, have been major targets of the change. And finally, structural adjustments covering areas like subsidies, the price Mechanism, and the public sector have also taken place. Collectively, these reforms aim at the modernization of the country’s industrial system, removal of unproductive controls, strengthening of private investment, including foreign investment, and integration of India’s economy with the global economy.

    In one word, it can be said that the all-around opening up of the country’s economy has been the essence of the reforms. All these economic reforms knowing as the new Economic Policy. Accordingly, New Economic Policy refers to all those different economic reforms introduced since July 1991 or policy measures and changes that aim at increasing productivity and efficiency by creating an environment of competition in the economy.

    Meaning and Definition of economic reforms:

    Economic reforms or new policy refers to varied policy measures and changes introduced since 1991. The common objective of all these measures is to improve the productivity and efficiency of the economy by creating a more competitive environment therein.

    The reforms are often classified into two broad categories:

    Changes in the sphere of industrial licensing policy and foreign trade as well as foreign investment policies belong to the first category. Also, Reforms touching the macroeconomy and economic institutions plus structural adjustments covering areas like subsidies, price environment, and public sector, belong to the second category. All these initiatives collectively mention because of the New Economic Policies (NEP).

    Importance and Need for Economic Reforms or New Economic Policy:

    About five decades back (1st April 1951) India had commenced its journey to economic development on the path of a socialistic pattern of society and mixed economy. So far India has completed 9 five-year plans. There is no denying the fact that in these five decades Indian economy has achieved many successes but the number of failures is by no means small. During the period of planning the public sector was given utmost importance. Also, The private sector was largely kept under government control. Trade and industry were subjected to many restrictions. Bureaucracy and red-tapism were the normal features of the economy. The cumulative effect of all this was that at the end of June 1991, the country landed in an unprecedented economic crisis.

    Stores of unfamiliar trade were only adequate to pay for fourteen day’s imports. New loans were not available. Enormous sums were being removed from the records of non-private Indians (NRIs). The faith of the international community in the Indian economy was shaken. Industrial progress was in reverse gear and prices were skyrocketing. To haul the economy out of monetary emergency and to put it on the way to quick and consistent financial development; it was generally fundamental to address monetary disequilibrium, check expansion, the right unfriendly equilibrium of installments, and recharge trade saves. To achieve all these objectives, the introduction of economic reforms or an appropriate economic policy was considered inevitable.

    The importance and need for economic reforms or the New Economic Policy were felt predominantly in light of the accompanying reasons.

    Increase in Fiscal Deficit:

    Before 1991, the monetary shortfall of the public authority had been mounting quite a long time after year because of the constant expansion in its non-advancement use. Also, Financial A shortage implies the contrast between absolute consumption and all-out receipts with fewer credits. It is equal to add up to borrowings by the public authority. In 1981-82, it was 5.4 percent of total national output (GDP). In 1990-91, it rose to 8.4 percent of GDP.

    To meet the monetary shortfall, the public authority obliges to raise advances and pay interest consequently. Consequently, because of the persevering ascent in the financial shortage, there was a relating ascend in open obligation and interest installment risk. In 1980-81, interest installment on open obligation added up to 10 percent of complete government consumption. In 1991, the measure of interest risk rose further to 36.4 percent of complete government use. There was not kidding anxiety that the public authority was quick-setting out toward an obligation trap.

    Increase in Adverse Balance of Payments:

    The equilibrium of an installment is the distinction between absolute fares and all-out imports of a nation. Exactly when outright imports outperform full-scale tolls, the harmony of portions gets threatening. Also, The public authority conceded assorted sorts of motivating forces and concessions to the exporters under the fare advancement program, yet the fare didn’t ascend to the ideal degree. It was fundamentally because in the global market our fares couldn’t contend in cost and quality.

    This was the immediate consequence of the arrangement of assurance so generously sought after by the public authority and for such a long time. As against the moderate development of fares, there was a quick expansion in imports. Subsequently, the equilibrium of installments shortfall expanded without question. The shortage of the equilibrium of installments had been rising consistently since 1980-81. For example, in 1980-81, the equilibrium of installments on the current record was unfavorable to the tune of Rupees 2,214 crore and it rose in 1990-91 to Rupees 17,367 crore. To meet this insufficiency a tremendous proportion of new credits should obtain.

    Gulf Crisis:

    Under the Iraq war in1990-91, costs of petroleum shot up. India used to get a colossal measure of settlements from Gulf nations in unfamiliar trade all that halted completely. Inlet emergency consequently further complimented as of now an antagonistic equilibrium of installments position. This has expanded the equilibrium of installments shortfall definitely.

    Fall in Foreign Exchange Reserves:

    In 1990-91 India’s new exchange saves tumble to a specific level that the identical was adequately not to cover for an import tab for even 10 days. Unfamiliar trade saves that were Rupees 8,151 crore in 1986-87 declined pointedly to Rupees 6,252 crore in 1989-90. The circumstance developed so intense that the Chandrashekhar government needed to contract the nation’s gold to release its unfamiliar obligation overhauling commitment.

    Ascend in expenses:

    In India, costs continued rising high. The normal yearly pace of expansion expanded from 6.7 percent to 16.7 percent. The fundamental explanation behind expansion or a yearly pace of expansion in costs was a quick expansion in the stockpile of cash. This, thusly, was because of the over top hotel to the shortage of financing by the public authority. Shortage financing infers getting from the Reserve Bank of India by the public authority to meet its shortfall. Bank offered this development by printing new money notes. The expense of creation takes an upward bounce because of the high pace of expansion. It unfairly impacts local and new interest in our things.

    Lackluster appearing of Public Sector Undertakings (PSU):

    In 1951 there were just 5 undertakings in the public region in India anyway in 2001 their number rose to 232. Two or three thousand crores of public resources were added to that. In the underlying 15 years, their working was very agreeable yet from that point the majority of these endured misfortunes. As a result of their terrible showing. Public area endeavors deteriorated into a risk.

    Because of the above convincing elements, it got inescapable for the public authority to embrace the New Economic Policy. It was even more important to increment mechanical yield and pull in unfamiliar capital.

    Some Basic and Advanced Achievements of Economic Reforms:

    The second economic reforms were reported in July 1991; there was an inclination that the public authority was slackening a portion of the controls. The troubles and postponements related to the previous arrangement of controls were currently expected to evaporate. Fourth biggest economy (US dollar 3 trillion GDP) as far as Purchasing Power Parity after the USA, China, and Japan. The basics of the Indian economy have got solid and stable.

    The large scale economic pointers are at present the best throughout the entire existence of autonomous India with high development, solid unfamiliar trade holds, and unfamiliar venture and powerful increment the basics of the Indian economy have gotten solid and stable. The full-scale economic markers are at present the best in the historical backdrop of autonomous India with high development, sound unfamiliar trade saves, and unfamiliar speculation and hearty expansion in fares, and low swelling and financing costs.

    Likewise, a portion of the significant achievements of economic reforms can summarize as follows:

    First achievements
    • The growth pace of the economy regarding GDP development got and arrived at a pinnacle pace of 8.4 percent in 2002-03. A novel element of the progress of the Indian economy is that it has become the second-quickest developing economy of the world in the year 2003 – 04. In the monetary year 2004 – 05, the GDP development has arrived at the midpoint of 6.9% (assessed). India has recorded one of the most noteworthy development rates during the 1990s. The objective of the tenth five-year Plan (2002-07) is an 8% development rate.
    • India’s administration area developed by 9.4% in 2004-05. Unfamiliar direct speculations have expanded from under 0.05 percent of GDP to more than 0.4 over a penny of GDP in 2002-03.
    • The unfamiliar trade holds have arrived at a record level of US dollar 138.84 billion in June 2005. Also, The agreeable circumstance of forex holds has encouraged further unwinding of unfamiliar trade limitations and a continuous move towards more prominent capital record convertibility. As per the IMF (2003 report), India’s Forex Policies by worldwide prescribe procedures.
    Second achievements
    • The unfamiliar trade save has expanded quickly. In 1990-91, the unfamiliar trade saves were sufficient to back imports for 2.5 months. In 2002-03, they are sufficient to back imports for 11 months. Unfamiliar Exchange Reserves (US dollar 138.84 billion) presently far surpass Foreign Debt (US dollar 113 billion as of September 2004).
    • The short-term obligation is under 4 percent of the stores. In March 1991 Forex Reserves including gold remained at dollar 5.8 billion as against the outer obligation of dollar 83 billion. The outer obligation to GDP proportion has improved altogether from 38.7% in 1992 to 17.8% at end of March 2004. This is one of the least among creating economies. The outer obligation in December 2004 was 120.9 billion US dollars. Of these drawn-out NRI, stores are dollar27 billion, business borrowings dollar24 billion, multilateral obligation dollar 31 billion, and respective obligation dollar 18 billion.
    Third achievements:
    • The pace of modern development likewise began ascending from 1993-94 onwards. It arrived at a pinnacle pace of 6.7 percent in 2002-03.
    • The average pace of expansion has been decreased extensively, from almost 13.6 percent in 1991-92 to around 3.4 percent in 2002-03.
    • The Government has chosen to (1) cease getting help from different nations aside from the accompanying nine: Japan, UK, Germany, USA, EU, France, Italy, Canada, and the Russian Federation and (2) to make pre-installment of all respective obligation owed to all the countries aside from the ones referenced previously. Since July 2003, India has become a net leaser to IMF, in the wake of having been a borrower before.
    • The Government has discounted obligations of US$ 30 million due from seven intensely obliged nations as a component of the “India Development Initiative” reported in February 2003. Also, The loan cost keeps on being decreased and is around 6%. This is the most minimal over the most recent thirty years and it is animating utilization and speculation.
    Forth achievements
    • Thanks to the presentation of screen-based exchanging and electronic conveyance, the financial exchange has been genuinely changed. Their joined impact has been to lessen the exchange costs in India’s securities exchange drastically.
    • India is turning into a creation base and a fare center point for assorted merchandise, from horticultural items to vehicle segments to top of the line administrations. Indian firms are presently essential for worldwide creation chains — bringing in sub-gatherings, enhancing them, and re-sending out them.
    • Taking the favorable position of its pool of top-notch logical ability, global enterprises have set up enormous R&D focuses in India. Every one of these qualities has brought about the more noteworthy joining of the Indian economy with the world economy. The exchange has ascended from 21 percent to 33 percent of India’s GDP in 10 years.
    Economic reforms Introduction Meaning Definition Importance Need and Achievements Image
    Economic reforms: Introduction, Meaning, Definition, Importance, Need, and Achievements; Image from Pixabay.
  • Business Environment: Definition, Nature, Importance, and Components

    Business Environment: Definition, Nature, Importance, and Components

    Learn Business Environment: Business means human activity directed towards producing or acquiring wealth through buying and selling goods. It can define as “the forces, factors, and institutions with which the businessman has to deal with to achieve its objectives”. Here are articles explain Business Environment with their topics of Meaning, Definition, Nature, Importance, and Components. It is a complex field of commerce and industry in which goods and services are created and distributed in the hope of profit within a framework of laws and regulations.

    What does mean Business Environment? Explain Meaning, Definition, Nature, Importance, and Components.

    Environment scanning can define as a process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business. No company can survive in the market by ignoring the effects of Business Environment. As well as, efficient management analyses the environment and makes changes in organizational policies to integrate its activities with Business Environment.

    The most suitable example to prove the impact of Business Environment is the controversial case of Pepsi and Coke Company. Business Environments provide constraints as well as opportunities for the businessman. For example, the regulation such as the MRTP Act and wealth restriction put constraints on the businessman. On the other hand, the liberalization policies, import relaxation policies bring opportunities for the businessman.

    Definition of Business Environment:

    The word business environment has been defined by various authors as follows,

    According to Wheeler as;

    “The total of all things external to firms and industries that affect the function of the organization is called business environment.”

    According to Arthur M. Weimer as;

    “Business Environment encompasses the -climate’ or set of conditions, economic, social, political or institutional in which business operations are conducted.”

    According to Keith Davis as;

    ‘‘Business environment is the aggregate of all conditions, events, and influences that surround and affect it.”

    Thus the business is an economic activity performed by human connection with the production and exchange of goods and services with a profit motive under the laws and regulations of the country. Based on the above definitions, it is very clear that the business environment is a mixture of complex, dynamic and uncontrollable external factors within which a business is to operate.

    Nature of Business Environment:

    The nature of Business Environment is simply and better explaining by the following approaches;

    1] System Approach:

    In original, business is a system by which it produces goods and services for the satisfaction of wants, by using several inputs, such as, raw material, capital, labor, etc. from the environment.

    2] Social Responsibility Approach:

    In this approach, the business should fulfill its responsibility towards several categories of society such as consumers, stockholders, employees, government, etc.

    3] Creative Approach:

    As per this approach, the business gives shape to the environment by facing the challenges and availing the opportunities in time. Also, the business brings about changes in the society by giving attention to the needs of the people.

    Importance of Business Environment:

    The importance of business environment explains with the help of the following points:

    1] Help to understand internal Environment:

    It is very much important for business enterprises to understand their internal environment, such as business policy, organization structure, etc. In such a case an effective management information system will help to predict the business environment changes.

    2] Help to Understand Economic System:

    The different kinds of economic systems influence the business in different ways. A businessman and business firm need to know about the role of capitalists, socialist and mixed economy.

    3] Help to Understand Economic Policy:

    Economic policy has its importance in the business environment and it has an important place in business. Also, the business environment helps to understand government policies such as export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy, etc. have much effect on business.

    The big plans or strategies and policies in the organization are formed keeping in mind the business environment because the strategies and policies have to execute in the presence of environmental factors. Scanning of environmental factors helps to find out the problems of business and makes a better strategy to resolve them.

    4] Help to Adapt and Adjust with the Rapid Changes:

    In today’s world, changes are taking place very fast and these fluctuations have a great impact on business. So it is important to understand these changes as fast as possible. The business environment helps to scan the problems of the companies and also helps to remove them for future benefits.

    The businessman did changes in their internal environment also to match the external environment. With the help of a scanning environment, the Ambani bros recognized that today’s environment demands quick decision so they shifted from centralization to decentralization.

    5] Help to Understand Market Conditions:

    An enterprise must know the market structure and changes taking place in it. The knowledge about the increase and decrease in demand, supply, monopolistic practices, government participation in business, etc., is necessary for an enterprise.

    Components of Business Environment (Download PDF file):

    Every business firm consists of a set of internal factors and it also confronts a set of external factors. The following components factor you a more clear and comprehensive explanation about the different factors of the internal and external business environment.

    Internal Business Environment:

    Several factors influence the various strategies and decisions within the organization’s boundaries. These factors are known as internal factors and are given below:

    1] Human Resources:

    It involves the planning, acquisition, and development of human resources necessary for organizational success. It points out that people are valuable resources requiring careful attention and nurturing. Progressive and successful organizations treat all employees as valuable human resources. The organization’s strengths and weaknesses also determined by the skill, quality, morale, commitment, and attitudes of the employees. Organizations face difficulties while carrying out modernizations or restructuring process by the resistance of employees. So, the issues related to morale and attitudes should seriously be considered by the management. Moreover, global competitive pressures have made the skillful management of human resources more important than ever. The support from the different levels of employees supports the management in the different decisions and their implementations.

    2] Company Image:

    One company issues shares and debentures to the public to raise money and its instruments oversubscribe while the other company seeks the help of different intermediaries like underwriters to generate finance from the public. This difference underlies the distinction between the images of the two companies. Also, the image of the company matters in certain other decisions as well as forming joint ventures, entering contracts with the other company or launching new products, etc. Therefore, building a company image should also be a major consideration for the managers.

    3] Management Structure:

    Gone are the days when business was carried out by the single entrepreneur or in the formation of partnerships. Now it has reshaped itself into the formation of the company where it is run and controlled by the board of directors who influence almost every decision. Therefore, the composition of the board of directors and nominees of different financial institutions could be very decisive in several critical decisions. The extent of professionalization is also a crucial factor while taking business decisions.

    4] Physical Assets:

    To enjoy economies of scale, a smooth supply of produced materials and efficient production capacity are some of the important factors of business that depend upon the physical assets of an organization. These factors should always keep in mind by the managers because these play a vital role in determining the competitive status of a firm or an organization.

    5] R & D and Technological Capabilities:

    Technology is the application of organized knowledge to help solve problems in our society. The organizations which are using appropriate technologies enjoy a better competitive advantage than that of their competitors. The organizations which do not possess strong Research and Development departments always lag in innovations which seems to be a prerequisite for success in today’s business. Therefore, the R & D and technological capabilities of an organization determine a firm’s ability to innovate and compete.

    6] Marketing Resources:

    The organizations which possess a strong base of marketing resources like talented marketing men, strong brand image, smart salespersons, identifiable products, wider and smooth distribution network and high quality of different services, make effortless inroads in the target market. As well as, the companies which are having so strong basis can enjoy the fruits of brand extension, form extension, and new product introduction, etc. in the market.

    7] Financial Factors:

    The performance of the organization is also affected by certain financial factors like capital structure, financial position, etc. Certain strategies and decisions are determined based on such factors. Also, the ultimate survival of organizations in both the public and private sectors is dictated largely by how proficiently available funds are managed. So, these were some of the factors related to the internal environment of an organization. These factors are generally regarded as controllable factors because the organization commands control over these factors and can modify or alter as per the requirement of the organization.

    Business Environment Definition Nature Importance and Components Image
    Business Environment: Definition, Nature, Importance, and Components. Image from Pixabay.

    External Business Environment:

    Companies operate in the external environment that forces and shape opportunities as well as threats.

    These forces represent “noncontrollable”, which the company must monitor and respond to. SWOT (Strengths, weaknesses, opportunities, and threats) analysis is very much essential for the business policy formulation which one could do only after examination of the external environment. The external business environment consists of macro-environment and micro-environment.

    1] Micro Environment:

    The company’s immediate environment where routine activities affect by certain actors. Suppliers, marketing intermediaries, competitors, customers, and the public operate within this environment. Also, the micro factors don’t need to affect all the firms. Some of the factors may affect a particular firm and do not disturb the other ones. So, it depends on that to what type of industry a firm belongs to. Now let’s discuss in brief some of the micro-environmental factors.

    • Suppliers.
    • Customers.
    • Competitors.
    • Marketing Intermediaries, and.
    • Publics.
    2] Macro Environment:

    With the rapidly changing scenario, the firm must monitor the major forces like demographic, economic, technological, political/legal and social/cultural forces. The business must pay attention to their casual interactions since these factors set the stage for certain opportunities as well as threats. These macro factors are, generally, more uncontrollable than the micro factors. A brief discussion of the important macro-environmental factors give below:

    • Demographic Environment.
    • Economic Environment.
    • Technological Environment.
    • Political or Legal Environment, and.
    • Social-cultural Environment.
  • How to we look at the current phase of globalization?

    How to we look at the current phase of globalization?

    The current phase of Globalization; of course, is not a new phenomenon. The period 1870 to 1913 experiences a growing trend towards globalization. The new phase of globalization which started around mid 20th century became very widespread, more pronounced and overcharging since the late 1980s by getting more momentum from the political and economic changes that swept across the communist countries, the economic reforms in other countries, the latest multilateral trade agreement which seeks to substantially liberalize international trade and investment and the technological and communication revolutions.

    Here explains the question – How to we look at the current phase of globalization?

    There are several similarities and differences between the two phases of globalization.

    The Human Development Report, 1999, mentioned the following as the new features of the current phase of globalization:

    New Market:

    They are;

    • Growing global markets in services- banking, insurance, transport.
    • New financial markets- deregulated, globally linked, working around the clock, with action at a distance in real-time, with new instruments as derivatives.
    • Deregulation of antitrust laws and the proliferation of mergers and acquisitions.
    • Global consumers market with global trends.

    New Actors:

    They are;

    • Multinational corporations integrating their production and marketing, dominating food production.
    • The World Trade Organization- the first multilateral organization with the authority to enforce national governments’ compliance with rules.
    • An international criminal court system in the making.
    • A booming international network of NGOs.
    • Regional blocs proliferating and gaining importance- European union, Association of South-East Asian Nations, Mercosur, North American Free Trade Association, Southern Africa Development Community, among many others.
    • More policy coordination groups- G-7, G-40, G-22, G-77, OECD.

    New Rules and Norms:

    They are;

    • Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades.
    • Widespread adoption of democracy as the choice of political regime.
    • Human rights conventions and instruments building up in both coverage and number of signatories and growing awareness among people around the world.
    • Consensus goals and action agenda for development.
    • Conventions and agreements on the global environment– biodiversity, ozone layer, disposal of hazardous wastes, desertification, and climate change.
    • Multilateral agreement in trade, taking on such a new agenda as environmental and social conditions.
    • New multilateral agreement for services, intellectual property, communications, more binding on national governments than any previous agreements.
    • The Multilateral Agreement on Investment under debate.

    New (Faster and Cheaper) Tools of Communication:

    They are;

    • Internet and electronic communication linking many people simultaneously.
    • Cellular phones.
    • Fax machines
    • Faster and cheaper transport by air, rail, and road.
    • Computer-aided design.

    Four phases of globalization:

    This approach naturally leads to 4 phases of globalization.

    1. First phases, consumption, and production take place together because the “hunter-gather” lifestyle meant consumption moving to “production” (i.e. food sources).
    2. Second phases, consumption, and production remained together but it was because people “brought” the food to themselves by developing agriculture.
    3. Third phases, were when modern globalization started in the 19th century. Steamships and railroads (and world peace called Pax Britannica) made it economical to consume goods that were made faraway. With things being made in one country and consumed in another, trade boomed.
    4. Finally, the one we are in today – started when production itself got broken up and shifted around to different nations. This knows as offshoring and it radically transformed world trade and manufacturing.

    The transitions between the phases – so-called “phase transitions” – were marked by world-shaping changes.

    The current and as yet not concluded the fourth phase of accelerated globalization that comprises the last two decades of the 20th century, as well as the first two of the 21st, will characterize especially by the rapidly increasing globalization of the financial markets, the building of communications systems that span the globe “in real-time,” and the overcoming of a binary, ideologically motivated political bloc system.

    By no means does this indicate—as the once more intensifying and often religiously-clothed contrasts between the “Occident” and the “Orient” show in all clarity—that under this we might be standing directly before a breakthrough to a unified world society, or that the borders between states have become obsolete. The number of states on our planet that have become independent is also consistently increasing.

    How to we look at the current phase of globalization
    How to we look at the current phase of globalization? #Pixabay.

    Discuss of Current phase:

    This also applies, of course, to other configurations between different surges in globalization. The opening of the occidental modern era onto a common space open to the future, space with which the internet age became both technologically and culturally configured during the last two decades of the 20th century, is, here again, not to comprehensively understand without consideration of those processes designated as the third phase of accelerated globalization, especially the process leading to the development of divergent modernities.

    Along with globalization “from above” (especially of financial markets and capital), there appears a globalization “from below” (on the level of mass migrations and their attendant fundamental globalization critique) and even “transverse” globalization (on the level of an information and knowledge society that interconnects on a world-wide scale, the centers of which—let us not deceive ourselves—lie nonetheless in the USA and, to some extent, in Europe).

    Within the parameters of this fourth phase, China, India, and perhaps Brazil have become global players that in the future will have an important say not only in political and social matters but in the realms of economics and culture as well. Indeed, China might currently find itself in a position that could compare in many respects to that of the USA within the time frame of the third phase. That the next surge in globalization, which might still expect to occur in the 21st century, should necessarily benefit English alone is, in light of the growing importance of Asian markets and powers, hardly likely.

    Characteristics of the Current phase:

    The characteristics of the current phase of accelerated globalization are undoubtedly quite specific, yet they are no more specific than those of the past phases, nor are they independent of them. Only when it understands that the present globalization is not something completely new, a creation ex nihilo, will we be able to draw forth the lessons of the preceding phases of this process.

    Only then is it possible for one to respond to the trailblazing and vectorizations observable since the expansion of Europe at the close of the 15th century with new paths and new forms of knowledge? Does that take the place of the dissolution of world order currently being articulated? And which could develop such models and measures as are indispensable to peaceful coexistence in diversity?

    In the search for these new paths, for this other knowledge, the literature of the world—and it is from here that this work proceeds—are of inestimable value. For their knowledge is a knowledge that does not limit to particular regions of nations, but quite clearly strides beyond individual cultural areas and is constantly on the move.

  • Water Pollution: Sources, Effects, and Control

    Water Pollution: Sources, Effects, and Control

    Water pollution can define as an alteration in physical, chemical, or biological characteristics of water making it unsuitable for designated use in its natural state. After, Air Pollution, Noise Pollution maybe you’ll like to know about another Pollution. If yes? So, this article explains Water Pollution, and its topics – sources, effects, and control. Also, water pollution is the contamination of water bodies (e.g. lakes, rivers, oceans, and groundwater).

    Here is article explains the Water Pollution and their topics; Sources, Effects, and Control.

    Also, water pollution affects plants and organisms living in these bodies of water, and in almost all cases the effect is damaging not only to individual species and populations but also to the natural communities.

    Sources of Water Pollution:

    Water is an essential commodity for survival. We need water for drinking, cooking, bathing, washing, irrigation, and industrial operations. Most of the water for such uses comes from rivers, lakes, or groundwater sources. Also, Water has the property to dissolve many substances in it; therefore, it can easily get polluted. Point sources or non-point sources can cause pollution of water. Point sources are specific sites near water, which directly discharge effluents into them.

    After Air pollution, the types of pollution one of them. Major point sources of water pollution are industries, power plants, underground coal mines, offshore oil wells, etc. Also, The discharge from non-point sources is not at any particular site; rather, these sources are scattered, which individually or collectively pollute water. Surface run-off from agricultural fields, overflowing small drains, rainwater sweeping roads, and fields, atmospheric deposition, etc. are the non-point sources of water pollution.

    1] Ground-water pollution:

    Ground-water forms about 6.2% of the total water available on planet earth and is about 30 times more than surface water (streams, lakes, and estuaries). Also, ground-water seems to be less prone to pollution as the soil mantle through which water passes helps to retain various contaminants due to its cation exchange capacity.

    However, there are several potential sources of ground-water pollution. Septic tanks, industry (textile, chemical, tanneries), deep well injection, mining, etc. are mainly responsible for ground-water pollution, which is irreversible. Ground-water pollution with arsenic, fluoride, and nitrate are posing serious health hazards.

    2] Surface water pollution:

    The major sources of surface water pollution are:

    1. Sewage: Pouring the drains and sewers in freshwater bodies causes water pollution. The problem is severe in cities.
    2. Industrial effluents: Industrial wastes containing toxic chemicals, acids, alkalis, metallic salts, phenols, cyanides, ammonia, radioactive substances, etc. are sources of water pollution. They also cause thermal (heat) pollution of water.
    3. Synthetic detergents: Synthetic detergents used in washing and cleaning produce foam and pollute water.
    4. Agrochemical: Agrochemical like fertilizers (containing nitrates and phosphates) and pesticides (insecticides, fungicides, herbicides, etc.) washed by rainwater and surface run-off pollute water.
    5. Oil: Oil spillage into seawater during drilling and shipment pollute it.
    6. Waste heat: Waste heats from industrial discharge increases the temperature of water bodies and affects the distribution and survival of sensitive species.

    Effects of Water Pollution:

    Following are some important effects of various types of water pollutants:

    1] Oxygen demanding wastes:

    Microorganisms present in water decompose organic matter, which reaches water bodies. For this degradation oxygen dissolved in water consume. Dissolved oxygen (DO) is the amount of oxygen dissolved in a given quantity of water at a particular temperature and atmospheric pressure. The amount of dissolved oxygen depends on aeration, photosynthetic activity in the water, respiration of animals and plants and ambient temperature.

    The saturation value of DO varies from 8-15 mg/L. For active fish species (trout and Salmon) 5-8 mg/L of DO require whereas less desirable species like carp can survive at 3.0 mg/L of DO. Lower DO may be harmful to animals especially fish populations. Oxygen depletion (deoxygenating) helps in the release of phosphates from bottom sediments and causes eutrophication.

    2] Nitrogen and Phosphorus Compounds (Nutrients):

    The addition of compounds containing nitrogen and phosphorus helps in the growth of algae and other plants which when die and decay consume oxygen of water. Under anaerobic conditions, foul-smelling gases are producing. Excess growth or decomposition of plant material will change the concentration of CO2, which will further change the pH of water. Changes in pH, oxygen, and temperature will change many Physico-chemical characteristics of water.

    3] Pathogens:

    Many wastewaters, especially sewage, contain many pathogenic (disease-causing) and non- pathogenic microorganisms and many viruses. Waterborne diseases like cholera, dysentery, typhoid, jaundice, etc. are spread by water contaminated with sewage.

    4] Toxic Compounds:

    Pollutants such as heavy metals, pesticides, cyanides and many other organic and inorganic compounds are harmful to aquatic organisms. Some of these substances like pesticides, methyl mercury, etc. move into the bodies of organisms from the medium in which these organisms live. Substances like DDT are not water-soluble and have an affinity for body lipids. These substances tend to accumulate in the organism’s body.

    This process calls bioaccumulation. Also, The concentration of these toxic substances builds up at successive levels of the food chain. This process calls biomagnifications. Toxic substances polluting the water ultimately affect human health. Some heavy metals like lead, mercury, and cadmium cause various types of diseases. Mercury dump into water transforms into water-soluble methyl mercury by bacterial action. Methyl mercury accumulates in fish.

    Extra knowledge:

    In 1953, people in Japan suffered from the numbness of body parts, vision and hearing problems, and abnormal mental behavior. This disease called Minamata disease occurred due to the consumption of methyl mercury-contaminated fish caught from Minamata bay in Japan. The disease claimed 50 lives and permanently paralyzed over 700 persons. Pollution by another heavy metal cadmium had caused the disease called Itai-Itai in the people of Japan.

    The disease was caused by cadmium contaminating rice. The rice fields were irrigated with effluents of zinc smelters and drainage water from mines. In this disease bones, liver, kidney, lungs, pancreas, and thyroid are affecting. Also, Arsenic pollution of groundwater in Bangladesh and West Bengal is causing various types of abnormalities. Nitrate when present in excess in drinking water causes blue baby syndrome or methemoglobinemia. The disease develops when a part of hemoglobin converts into a non-functional oxidized form.

    Nitrate in the stomach partly gets changed into nitrites, which can produce cancer-causing products in the stomach. Excess of fluoride in drinking water causes defects in teeth and bones to call fluorosis. Also, Pesticides in drinking water ultimately reach humans and are known to cause various health problems. DDT, aldrin, dieldrin, etc. have, therefore, been banned. Recently, in Andhra Pradesh, people suffered from various abnormalities due to the consumption of endosulfan contaminated cashew nuts.

    Water Pollution Sources Effects and Control
    Water Pollution: Sources, Effects, and Control.

    Control of Water Pollution:

    It is easy to reduce water pollution from point sources by legislation. However, due to the absence of defined strategies, it becomes difficult to prevent water pollution from non-point sources.

    The following points may help in reducing water pollution from non-point sources:

    • Judicious use of agrochemical likes pesticides and fertilizers, which will reduce their surface run-off and leaching. Avoid the use of these on sloped lands.
    • Use of nitrogen-fixing plants to supplement the use of fertilizers.
    • Adopting integrated pest management to reduce reliance on pesticides.
    • Prevent run-off of manure. Divert such a run-off to the basin for settlement. Also, nutrient-rich water can use as fertilizer in the fields.
    • Separate drainage of sewage and rainwater should provide to prevent the overflow of sewage with rainwater.
    • Planting trees would reduce pollution by sediments and will also prevent soil erosion.

    For controlling water pollution from point sources – the treatment of wastewater is essential before discharge.

    • Wastewater should properly treat by primary and secondary treatments to reduce the BOD, COD levels up to the permissible levels for discharge.
    • Advanced treatment for the removal of nitrates and phosphates will prevent eutrophication. Before the discharge of wastewater – it should disinfect to kill disease-causing organisms like bacteria.
    • Proper chlorination should finish preventing the formation of chlorinated hydrocarbons or ozone or ultraviolet radiation should do disinfection.
  • Noise Pollution: Sources, Effects, and Control

    Noise Pollution: Sources, Effects, and Control

    Noise Pollution can define as an unpleasant and unwanted sound. We hear various types of sound every day. Sound is mechanical energy from a vibrating source. After, Air Pollution maybe you’ll like to know about another Pollution. If yes? So, this article explains Noise Pollution, and its topics – sources, effects, and control. A type of sound may be pleasant to someone and at the same time unpleasant to others. Also, The unpleasant and unwanted sound is called noise. Sound can propagate through a medium like air, liquid, or solid.

    Here is article explains the Noise Pollution and their topics; Sources, Effects, and Control.

    The sound wave is a pressure perturbation in the medium through which sound travels. Sound pressure alternately causes compression and rarefaction. The number of compressions and rarefactions of the molecules of the medium (for example air) in a unit time is described as frequency. It is expressed in Hertz (Hz) and is equal to the number of cycles per second.

    There is a wide range of sound pressures, which encounter the human ear. Also, An increase in sound pressure does not invoke the linear response of the human ear. A meaningful logarithmic scale has been devised. The noise measurements are expressed as Sound Pressure Level (SPL) which is the logarithmic ratio of the sound pressure to a reference pressure.

    It is expressed as a dimensionless unit, a decibel (dB). The international reference pressure of 2 x 10-5 Pa is the average threshold of hearing for a healthy ear. The decibel scale is a measure of loudness. Noise can affect the human ear because of its loudness and frequency (pitch). Also, The Central Pollution Control Board (CPCB) committee has recommended permissible noise levels for different locations as given in Table;

    Central Pollution Control Board (CPCB) committee has recommended permissible noise levels
    CPCB committee has recommended permissible noise levels.

    Sources of Noise Pollution:

    The main sources of noise are various modes of transportation (like air, road, rail-transportation), industrial operations, construction activities, and celebrations (social/religious functions, elections, etc) electric home appliances. Also, High levels of noise have been recorded in some of the cities of the world. In Nanjing (China) noise level of 105 dB has been recorded, while in some other cities of the world these levels are: Rome 90 dB, New York 88 dB, Calcutta 85 dB, Mumbai 82 dB, Delhi 80 dB, Kathmandu 75 dB.

    Major causes/sources of noise pollution are:

    1] Industrial:

    Progress in technology (industrialization) has resulted in creating noise pollu­tion. Also, Textile mills, printing presses, engineering establishments, and metal works, etc. contribute heavily to noise pollution.

    These operate from workshops located on the ground floors of the residential areas and cause annoyance, discomfort, and irri­tation to the residents exposed to the noise that is inevitably produced.

    For example, the situation is much better in modern planned cities like Chandigarh where the industrial area is kept away from the residential areas and both are sepa­rated from each other by a sufficiently wide green belt.

    2] Automobile or Transport Vehicles:

    The automobile revolution in urban centers has proved to be a big source of noise pollution. Increasing traffic has given rise to traffic jams in congested areas where the repeated hooting of horns by impatient drivers pierce the ears of all road users.

    Noise from airplanes constitutes an increasingly serious problem in big cities like Delhi & Mumbai. Also, airports situated in the vicinity of population centers and airplanes pass over residential areas. Heavy trucks, buses trains, jet-planes, motor-cycles, scooters, mopeds, jeeps—the list of vehicles is endless but the outcome is the same — noise pollution.

    3] Household:

    The household is an industry in itself and is a source of many indoor noises such as the banging of doors, noise of playing children, crying of infants, moving of furniture, a loud conversation of the inhabitants, etc. Besides these are the entertainment equipment in the house, namely the radio, record-players, and television sets. Domestic gadgets like mixer-grinders, pressure cookers, desert coolers, air- conditioners, exhaust fans, vacuum cleaners, sewing, and washing machines are all indoor sources of noise pollution.

    4] Public Address System:

    In India, people need only the slightest of an excuse for using loudspeakers. Also, The reason may be a religious function, birth, death, marriage, elections, dem­onstration, or just commercial advertising. The public system, therefore, contrib­utes in its way towards noise pollution.

    5] Agricultural Machines:

    In modern times, agriculture is highly changing in food farming. They also use modern technic or machines for farming growth. In Tractors, thrashers, harvesters, tube wells, powered tillers, etc. have all made agriculture highly mechanical but at the same time highly noisy. Noise level 90 dB to 98 dB due to the running of farm machines have been recorded in the state of Punjab.

    6] Defense Equipment:

    We talk about Noise pollution, so we can not forget Defense Equipment or security level sources. Also, Defense Equipment is one of them, We have defense tools to protect the country from outside countries. In every country, they manufacture more and more defense equipment for the protection of the countrymen.

    A lot of noise pollution adds to the atmosphere by artillery, tanks, launching of rockets, explosions, exercising of military airplanes, and shooting practices. Also, Screams of jet engines and sonic booms have a deafening impact on the ears and in extreme cases have been known to shatter the window panes and old dilapidated buildings.

    Effects of Noise pollution:

    Noise pollution causes the following effects.

    • Interferes with man’s communication: In a noisy area, communication severely affects.
    • Hearing damage: Noise can cause temporary or permanent hearing loss. It depends on the intensity and duration of the sound level. Auditory sensitivity reduces with a noise level of over 90 dB in the mid-high frequency for more than a few minutes.
    • Physiological and Psychological changes: Continuous exposure to noise affects the functioning of various systems of the body. It may result in hypertension, insomnia (sleeplessness), gastrointestinal and digestive disorders, peptic ulcers, blood pressure changes, behavioral changes, emotional changes, etc.
    Effects or Impacts of Noise Pollution – diagram:
    Effects or Impacts of Noise Pollution - diagram
    Effects or Impacts of Noise Pollution – diagram.

    Noise is generally harmful and a serious health hazard. It has far-reaching consequences and has many physical, physiological as well as psychological ef­fects on human beings. Extra things:

    1] Physical Effects:

    The physical manifestation of noise pollution is the effect on hearing ability. Repeated exposure to noise may result in temporary or permanent shifting of the hearing threshold of a person depending upon the level and duration of exposure.

    The immediate and acute effect of noise pollution is the impairment of hearing (i.e. total deafness). Also, Human ears have sensory cells for hearing. If these cells are subjected to re­peated sounds of high intensity before they have an opportunity to recover fully.

    They can become permanently damaged leading to impairment of hearing. In addition to sensory cells, delicate tympanic membranes or eardrums can also permanently harm by sudden loud noises such as an explosion.

    2] Physiological Effects:

    Physiologica means, relating to the branch of biology that deals with the normal functions of living organisms and their parts. Also, The physiological manifestations of noise pollution are several as mentioned be­low:

    • Headache by dilating blood vessels of the brain.
    • Increase in the rate of heart-beat.
    • Narrowing of arteries.
    • Fluctuations in the arterial blood pressure by increasing the level of choles­terol in the blood.
    • The decrease in heat output.
    • Pain in the heart.
    • Digestive spasms through anxiety and dilation of the pupil of the eye, thereby causing eye-strain.
    • Impairment of night vision.
    • The decrease in the rate of color perception.
    • Lowering of concentration and effect on memory.
    • Muscular strain and nervous breakdown, and.
    • Psychological Effect.
    Noise Pollution Sources Effects and Control
    Noise Pollution: Sources, Effects, and Control.

    Control of Noise Pollution:

    How to control noise pollution? If we do something controlling noise or extra sound out there. So, what they are? The following controlling things below are;

    Reduction in sources of noise:
    • Sources of noise pollution like heavy vehicles and old vehicles may not allow driving in populated areas if they follow as also control some noise.
    • Noise making machines should keep in containers with sound-absorbing media. The noise path will interrupt and will not reach the workers.
    • Proper oiling will reduce the noise from the machinery.
    Use of sound-absorbing silencers:
    • Silencers can reduce noise by absorbing sound. For this purpose, various types of fibrous material could use.
    • Planting more trees having broad leaves.

    Through Law: Legislation can ensure that sound production is minimized at various social functions. Unnecessary horn blowing should restrict especially in vehicle-congested areas.

  • Political Environment: Legislature, Executive, and Judiciary

    Political Environment: Legislature, Executive, and Judiciary

    The influence of the political environment of business is enormous. This article explains the topic of the International political environment and system: with their important concepts; Legislature, Executive, and Judiciary. The political system prevailing in a country decides, promotes, fosters encourages, shelters, directs and controls the business activities of those countries. Political Environment is the relationship between the state government and institutions legislation public and private in the Business environment.

    International political environment and system: with their important concepts; Legislature, Executive, and Judiciary.

    A political system that is stable, honest, efficient and dynamic and which ensures political participation of the people, and assures personal security to the citizens, is the primary factor for the growth of any business. Two basic political philosophies are in existence all over the world, viz., democracy and totalitarianism.

    In its pure sense, democracy refers to a political arrangement in which supreme power vests in the people. Democracy may manifest itself in any of two fundamental manners. If each individual is given the right to rule and vote on every matter, the result is pure democracy which is not, however, workable in a complex society with a large constituency.

    Hence, the republican forms of the organization follow whereby the public, in a democratic manner, elect their representatives who do the ruling. In totalitarianism, also, call authoritarianism, individual freedom is completely subordinate to the power of authority of the state and concentrates in the hands of one person or in a small group that is not constitutionally accountable to the people.

    Societies ruled by a pressure clique – political, economy or military – or by a dictator plus most oligarchies and monarchies belong to this category. The doctrine of fascism and erstwhile Russian Communism is an example of totalitarianism.

    India is a democratic country. Our political system comprises three vital institutions:

    • Legislature.
    • Executive or government, and.
    • Judiciary.

    Now, explain each one:

    Legislature:

    Out of three, the legislature is the most powerful political institution vested with such powers as policy making, law-makings, budget approving, executive control and acting as a mirror of public opinion. The influence of the legislature on business is considerable. It decides such vital aspects as the type of business activities, the country should have, who should own them, what should be their size of the operation, what should happen to their earnings and other related factors.

    The legislature is the most powerful institution. The main powers are vesting in the legislature are; in today’s economies, particularly of developing countries like India, the relevance of a protective legal environment for Business assumes immense proportions as it is the very foundation of every investment decision.

    The business has to be within the law of the Land. Every aspect of the business from its birth till death covers under the laws to ensure that not only profit is earned in a justified and fairway but also to ensure that in the attainment of business interests the interest of each person fully protect and the profits of the business are distributing in a manner beneficial to the society.

    Government as Executive:

    Also called the “state” the term government refers to “the center of the political authority having the power to govern those it serves”. For business consideration, we should know what are the government’s responsibilities to the business.

    Specifically, the executive or government’s responsibilities towards business are as follows:

    • Establishment and enforcement of the law.
    • Maintenance of order.
    • Money and credit.
    • Orderly growth.
    • Infrastructure.
    • Information.
    • Assistance to small industries.
    • Transfer of technology, and.
    • Tariffs and Quotas.
    More things:

    The Government or executive is the executory body of the laws which are framed by the legislature.

    According to E. V. Schneider,

    “Government is that institution by which men everywhere, seek to order society, that is, to control the structure and functioning of society.”

    According to Musselman and Hughes,

    “Government is the center of the political authority having the power to govern those it serves.”

    In simple words, the role of the Government or executive is to shape, direct and control the business activities. The translations of the objective of any laws to the reality depend as much upon the law itself as on its implementation. The implementation of the law in its word and spirit only can ensure the realization of its true objectives.

    Indian constitution provides for a federal set up with powers being divided between central and state governments. The powers and functions of central and state governments are described in the constitution.

    Judiciary:

    The third political institution is the judiciary. Judiciary determines how the work of executives has been fulfilled. It settles the relationship between private citizens, on one hand, and between citizens and the government upon the other. The judiciary sees to it that the exercise of authority by the executives is according to the general rules laid down by the legislature, it may declare that any particular order issued is, in fact, ultra vires (beyond the authority). It is the power of the Judiciary to settle legal disputes that affect business considerably.

    1) Disputes between employers and employees, 2) employer and employer, 3) employee and employee, 4) employers and the public, and 5) employers and the government.

    The power of the judiciary is of the dual type:

    • The authority of the courts to settle legal disputes, and.
    • Judicial review – the authority of the courts to rule on the constitutionality of legislation.

    What is the International political environment?

    Introduction: The political environment of the country of operation becomes increasingly important for the international firm. As it moves from exports to foreign direct investment (FDI) as the mode of international market entry. Exporting firms use political pressure tactics to have free exportability of the products in their home country regulations, hassle-free procedures, and legislative requirements and export incentives.

    Besides, diplomatic channels are utilizing to get improve market access for imported goods in the target foreign country markets, reduced import tariffs, compatible quality regulations, etc. The dispute settlement mechanism, legal framework, and judicial independence are also critical to fair treatment expecting in international business. Cordial political relations between the firm’s home country and the host countries have a direct favorable impact on FDIs.

    More things:

    As a firm expands internationally and begins to operate in multiple countries, political and legal issues become increasingly complex. Consequent to economic liberalization in the People’s Republic of China, multi­level marketing firms, such as Amway, Avon, Tupperware, and Mary Kay Cosmetics grew rapidly. By 1997, Amway had approximately 80,000 sales representatives who generated $178 million in sales. Whereas Avon had nearly 50,000 representatives who generated sales of $75 million.

    It was reported that some other companies using the so-called pyramid schemes were cheating consumers. Consequently, the Chinese government banned direct selling in April 1998. As a result, direct marketing companies were prohibited to operate their business model in China. It was only after diplomatic pressures and negotiations between the US and the Chinese governments that the policy was reversed. The firm-level economic and political interests of the home and the host countries may differ widely.

    International managers need to understand the significance of political decision-making in the host country that may severely influence its overseas operations. International business relations between the firms are greatly affecting “affinity” or “animosity” among the countries based on historical or political reality. For instance, India’s political affinity with Sri Lanka and Mauritius has led to a high level of trade and investment whereas the reverse situation exists in the case of Indo-Pak trade.

    Political Environment Legislature Executive and Judiciary
    Political Environment: Legislature, Executive, and Judiciary, #Pixabay.

    International Political Systems and Ideologies:

    International political and economic systems or environments hardly function independently. The two are mutually inter-dependent. Political and diplomatic relations between the two counties greatly influence their economic relations. The political system of a country comprises various stakeholders. Such as the government, political parties with different ideologies, labor unions, religious organizations, environmental activists, and various NGOs.

    Each of these players in a political system has its own unique sets of beliefs and aspirations and exerts its influence upon political decisions. The acquisition, development, securing, and use of power about other entities. Where did power view as the capacity of the social actors to overcome the resistance of the other actors are term as political behavior? Ideology is a set of beliefs or ideas as to how the society or group should organize, politically, economically, or morally.

    More knowledge:

    Political ideology is a set of ideas or beliefs. That people hold about their political regime and its institutions about their position and role in it. Ideologies of different groups or political parties are often conflicting and they keep on challenging each other. In democratic countries, such as India, the US, and the UK, the shift in the political parties and their ideologies puts pressure on business operations of foreign firms. The power exerted by different pressure groups also varies from country to country.

    For instance, communist or socialist parties in countries, such as Russia and China hardly face any considerable challenge whereas such parties exert sizeable political pressure in countries like India, Sweden, Italy, and Greece. On the other hand; these parties hardly have any political viability in the US. Most religious organizations are politically neutral in India. Whereas the Catholic Church played a crucial role in overthrowing Ferdinand Marcos in the Philippines and the liberation of Poland from Soviet domination. Islamic religious leaders in Iran greatly influence political decision making.

  • Air Pollution: Sources, Effects, and Control

    Air Pollution: Sources, Effects, and Control

    What is Air Pollution? It is an atmospheric condition in which certain substances (including the normal constituents in excess) are present in concentrations, which can cause undesirable effects on living beings and the environment. These substances include gases, particulate matter, radioactive substances, etc. The question is Briefly describe the sources, effects, and control of air pollution. Air pollution is a change in the physical, chemical, and biological characteristics of air that causes adverse effects on humans and other organisms. The ultimate result is a change in the natural environment and/or ecosystem.

    What are the natural and man-made pollutants that cause air pollution? The discussion of the sources, effects, and control of air pollution.

    Gaseous pollutants include oxides of sulfur (mostly S02, S03) oxides of nitrogen (mostly NO and N02 or NOx), carbon monoxide (CO), volatile organic compounds (mostly hydrocarbons), etc. Particulate pollutants include smoke, dust, soot, fumes, aerosols, liquid droplets, pollen grains, etc. Radioactive pollutants include radon-222, iodine-131, strontium-90, plutonium-239, etc.. The substances that are responsible for causing air pollution are called air pollution. These air pollutants can be either natural (e.g. wildfires) or synthetic (man-made); they may be in the form of gas, liquid or solid.

    Content of Air Pollution Sources Effects and Control
    Content of Air Pollution: Sources, Effects, and Control.

    Sources of Air Pollution:

    Sources of air pollution refer to the various locations, activities, or factors which are responsible for the release of pollutants into the atmosphere. Also, The sources of air pollution are natural and man-made (anthropogenic).

    1] Natural Sources:

    The natural sources of air pollution are volcanic eruptions, forest fires, sea salts sprays, biological decay, photochemical oxidation of terpenes, marshes, extraterrestrial bodies pollen grains of flowers, spores, etc. Radioactive minerals present in the earth’s crust are the sources of radioactivity in the atmosphere.

    The following natural sources of air pollution below are:

    • Dust from natural sources, usually large areas of land with little or no vegetation.
    • Methane, emitted by the digestion of food by animals, for example, cattle.
    • Radon gas from radioactive decay within the Earth’s crust. Also, Radon is a colorless, odorless, naturally occurring, radioactive noble gas that forms from the decay of radium.
    • It considers being a health hazard. Radon gas from natural sources can accumulate in buildings, especially in confined areas such as the basement and it is the second most frequent cause of lung cancer, after cigarette smoking.
    • Smoke and carbon monoxide from wildfires.
    • Volcanic activity, which produces sulfur, chlorine, and ash particulates.
    2] Man-made:

    Man-made sources include thermal power plants, industrial units, vehicular emissions, fossil fuel burning, agricultural activities, etc. Also, Thermal power plants have become the major sources for generating electricity in India, as nuclear power plants couldn’t install as plan. The main pollutants emitted are fly ash and S02. Metallurgical plants also consume coal and produce similar pollutants. Fertilizer plants, smelters, textile mills, tanneries, refineries, chemical industries, paper, and pulp mills are other sources of air pollution.

    Automobile exhaust is another major source of air pollution. Automobiles release gases such as carbon monoxide (about 77%), oxides of nitrogen (about 8%), and hydrocarbons (about 14%). Heavy-duty diesel vehicles spew more NOx and suspended particulate matter (SPM) than petrol vehicles, which produce more carbon monoxide and hydrocarbons.

    3] Indoor Air Pollution:

    The most important indoor air pollution or pollutant is radon gas. Radon gas and its radioactive daughters are responsible for a large number of lung cancer deaths each year. Also, The Radon can emit from building materials like bricks, concrete, tiles, etc., which are deriving from soil containing radium. Radon is also present in groundwater and natural gas and emits indoors while using them.

    Many houses in the under-developed and developing countries including India use fuels like coal, dung-cakes, wood, and kerosene in their kitchens. Complete combustion of a fuel produces carbon dioxide, which may not be toxic. However, incomplete combustion produces toxic gas carbon monoxide. Coal contains varying amounts of sulfur, which on burning produces sulfur dioxide.

    Fossil fuel burning produces black soot. These pollutants i.e. CO, sulfur dioxide, soot, and many others like formaldehyde, benzo- (a) pyrene (BAP) are toxic and harmful to health. BAP is also found in cigarette smoke and consider to cause cancer. Also, A housewife using wood as fuel for cooking inhales BAP equivalent to 20 packets of cigarettes a day.

    Effects of air pollution:

    Air pollution has adverse effects on living organisms and materials.

    1] Effects on Human Health:

    The human respiratory system has several mechanisms for protection from air pollution. The hairs and sticky mucus in the lining of the nose can trap bigger particles. Smaller particles can reach the tracheobronchial system and there get trapped in mucus. Also, They are sent back to the throat by beating hair-like cilia from where they can remove by spitting or swallowing. Years of exposure to air pollutants (including cigarette smoke) adversely affect these natural defenses and can result in lung cancer, asthma, chronic bronchitis, and emphysema (damage to air sacs leading to loss of lung elasticity and acute shortness of breath).

    Suspended particulate can cause damage to lung tissues and diseases like asthma, bronchitis, and cancer especially when they bring with them cancer-causing or toxic pollutants attached on their surface. Sulfur dioxide (S02) causes constriction of respiratory passage and can cause bronchitis like conditions. In the presence of suspended particulate, S02 can form acid sulfate particles, which can go deep into the lungs and affect them severely.

    Oxides of nitrogen especially NO2 can irritate the lungs and cause conditions like chronic bronchitis and emphysema. Also, Carbon monoxide (CO) reaches the lungs and combines with hemoglobin of the blood to form carboxyhemoglobin. CO has an affinity for hemoglobin 210 times more than oxygen. Hemoglobin is, therefore, unable to transport oxygen to various parts of the body. This causes suffocation. Long exposure to CO may cause dizziness, unconsciousness, and even death. Many other air pollutants like benzene (from unleaded petrol), formaldehyde, and particulate like polychlorinated biphenyls (PCBs) toxic metals, and dioxins (from burning of polythene) can cause mutations, reproductive problems, or even cancer.

    2] Effects on Plants:

    Air pollutants affect plants by entering through stomata (leaf pores through which gases diffuse), destroy chlorophyll, and affect photosynthesis. Pollutants also erode the waxy coating of the leaves called a cuticle. Also, Cuticle prevents excessive water loss -and damage from diseases, pests, drought, and frost. Damage to leaf structure causes necrosis (dead areas of the leaf), chlorosis (loss or reduction of chlorophyll causing yellowing of leaf) or epinasty (downward Curling of leaf), and abscission (dropping of leaves). Particulates deposited on leaves can form encrustations and plug the stomata. The damage can result in the death of the plant.

    3] Effects on aquatic life:

    Air pollutants mixing up with rain can cause high acidity (lower pH) in freshwater lakes. This affects-aquatic life especially fishes. Some of the freshwater lakes have experienced total fish death.

    4] Effects on materials:

    Because of their corrosiveness, particulate can cause damage to exposed surfaces. Also, The presence of SO2 and moisture can accelerate the corrosion of metallic surfaces. SO2 can affect fabric, leather, paint, paper, marble, and limestone. Ozone in the atmosphere can cause the cracking of rubber. Oxides of nitrogen can also cause fading of cotton and rayon fibers.

    Air Pollution Sources Effects and Control
    Air Pollution: Sources, Effects, and Control.

    Control of air pollution:

    Air pollution can minimize by the following simple methods:

    • Siting of industries after proper Environmental Impact Assessment studies.
    • Removing sulfur from coal (by washing or with the help of bacteria).
    • Removing NOx during the combustion process.
    • Using low sulfur coal in industries.
    • Removing particulate from stack exhaust gases by employing electrostatic precipitators, bag-house filters, cyclone separators, scrubbers, etc.
    • Vehicular pollution can check by regular tune-up of engines; replacement of more polluting old vehicles; installing catalytic converters; by the engine, modification to have fuel-efficient (lean) mixtures to reduce CO and hydrocarbon emissions; and slow and cooler burning of fuels to reduce NOx emission (Honda Technology).
    • Using the mass transport system, bicycles, etc.
    • Shifting to less polluting fuels (hydrogen gas).
    • Using non-conventional sources of energy.
    • Using biological filters and bio-scrubbers.
    • Planting more trees.

    The following items are commonly used as pollution control devices by industry or transportation devices. They can either destroy contaminants or remove them from an exhaust stream before it emits into the atmosphere.

    1] Particulate Control:

    Mechanical collectors (dust cyclones, multi-cyclones)- Cyclonic separation is a method of removing particulates from an air, gas, or water stream, without the use of filters, through vortex separation. Also, Rotational effects and gravity are used to separate mixtures of solids and fluids. A high speed rotating (air) flow establish within a cylindrical or conical container called a cyclone.

    Air flows in a spiral pattern, beginning at the top (wide end) of the cyclone and ending at the bottom (narrow) end before exiting the cyclone in a straight stream through the center of the cyclone and out the top. Larger (denser) particles in the rotating stream have too much inertia to follow the tight curve of the stream and strike the outside wall, falling then to the bottom of the cyclone where they can remove.

    In a conical system, as the rotating flow moves towards the narrow end of the cyclone the rotational radius of the stream reduces, separating smaller and smaller particles. The cyclone geometry, together with the flow rate, defines the cut point of the cyclone. This is the size of the particle that will remove from the stream with 50% efficiency. Particles larger than the cut point will remove with greater efficiency and smaller particles with lower efficiency.

    2] Electrostatic Precipitators:

    An electrostatic precipitator (ESP), or electrostatic air cleaner is a particulate collection device that removes particles from a flowing gas (such as air) using the force of an induced electrostatic charge.

    Electrostatic precipitators are highly efficient filtration devices that minimally impede the flow of gases through the device, and can easily remove fine particulate matter such as dust and smoke from the air stream.

    In contrast to wet scrubbers which apply energy directly to the flowing fluid medium, an ESP applies energy only to the particulate matter being collecting and therefore is very efficient in its consumption of energy (in the form of electricity).

    3] Particulate Scrubbers:

    The term wet scrubber describes a variety of devices that remove pollutants from a furnace flue gas or other gas streams. In a wet scrubber, the polluted gas stream is brought into contact with the scrubbing liquid, by spraying it with the liquid, by forcing it through a pool of liquid, or by some other contact method, to remove the pollutants. Also, The design of wet scrubbers or any air pollution control device depends on the industrial process conditions and the nature of the air pollutants involved.

    Inlet gas characteristics and dust properties (if particles are present) are of primary importance. Scrubbers can design to collect particulate matter and/or gaseous pollutants. Wet scrubbers remove dust particles by capturing them in liquid droplets. Wet scrubbers remove pollutant gases by dissolving or absorbing them into the liquid.

    Any droplets that are in the scrubber inlet gas must separate from the outlet gas stream using another device referred to as a mist eliminator or entrainment separator (these terms are interchangeable).

  • Economic Environment: Liberalization, Privatization, and Globalization

    Economic Environment: Liberalization, Privatization, and Globalization

    What is Economic Environment? The totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influence the buying behavior of consumers and institutions. This article we have a discussion on Economic Environment and their parts; liberalization, privatization, and globalization. Economic environment refers to all those economic factors which have a bearing on the functioning of a business unit.

    Economic Environment discusses the questions of What do liberalization, privatization, and globalization of the Indian Economy mean? Better Explanation.

    Business depends on the economic environment for all the need inputs. It also depends on the economic environment to sell finished goods. Naturally, the dependence of business on the economic environment is total and it is not surprising because, as it rightly says, business is one unit of the total economy.

    Define Economic Environment in India?

    To solve the economic problems of our country, the government took several steps including control by the State of certain industries, central planning and reduced importance of the private sector. Besides people, markets require purchasing power and that depends upon current income, savings, prices, debt and credit facilities, etc. The economic environment affects the demand structure of any industry or product. The following factors should always keep in mind by the business people to determine the success of the business.

    • Per capita income.
    • Gross national product.
    • Fiscal and monitory policies.
    • The ratio of interest charged by different financial institutions.
    • Industry life cycle and current phase, and.
    • Trends of inflation or deflation.

    Each of the above factors can pose an opportunity as well as a threat to a firm. For example, in a developing economy, the low demand for the product is due to the low-income level of the people. In such a situation a firm or company can not generate the purchasing power of the people to generate the demand for the products. But it can develop a low priced product to suit the low-income market otherwise it will slip out from the market.

    Extra Things:

    Similarly, the industry gets several incentives and support from the government if it comes under the purview of the priority sector whereas some industries face a tough task if they are regarding as inessential ones. In the industry life cycle, timing is everything when it comes to making good cycle-sensitive decisions.

    The managers need to make appropriate cutbacks before the onslaught of recession because at that time sales are bound to decline which leads to increasing inventories and idle resources and that is a costly situation.

    On the other hand, business people cannot afford to get caught short during a period of rapid expansion. This is where accurate economic forecasts are a necessity and therefore, a manager must pay careful attention to the major economic changes.

    The main objectives of India’s development plan are:

    • Initiate rapid economic growth to raise the standard of living, reduce unemployment and poverty.
    • Become self-reliant and set up a strong industrial base with emphasis on heavy and basic industries.
    • Reduce inequalities of income and wealth.
    • Adopt a socialist pattern of development — based on equality and prevent exploitation of man by man.

    As a part of economic reforms, the Government of India announced a new industrial policy in July 1991.

    The broad features of this policy are as follows:
    • The Government reduced the number of industries under compulsory licensing to six.
    • Disinvestment was carrying out in the case of many public sector industrial enterprises.
    • Policy towards foreign capital was liberalizing. The share of foreign equity participation was increasing and in many activities, 100 percent Foreign Direct Investment (FDI) was permitted.
    • Automatic permission was now granting for technology agreements with foreign companies.
    • Foreign Investment Promotion Board (FIPB) was set up to promote and canalize foreign investment in India.

    Main Features of economic Reforms or New Economic Policy:

    They are three things liberalization, privatization, and globalization. The following features of the economics below are;

    Economic Environment Liberalization Privatization and Globalization
    Economic Environment: Liberalization, Privatization, and Globalization

    Liberalization:

    Liberalization of the economy means to free it from direct or physical controls impose by the government. Before 1991, the government had imposing several types of controls on the Indian economy, e.g., industrial licensing system; price control or financial control on goods, import license, foreign exchange control, restrictions on investment by big business houses, etc. these had to dampen the enthusiasm of the entrepreneurs to establish new industries.

    These controls had given rise to corruption, undue delays, and inefficiency. Economic reforms, therefore, made a bid to reduce restrictions impose on the economy. Also, Economic reforms were based on the assumption that market forces could guide the economy more effectively than government control.

    Measures Taken for Liberalization:

    Following measures have been taking under economic reforms for liberalization of Indian economy:

    Abolition of Industrial Licensing and Registration:

    The New Industrial Policy (NIP) is the first part of the liberalization measures. Under the NIP, industrial licensing has been greatly liberalizing. All industries, except a few specified ones, have been de-licensing under the NIP and liberated from the clutches of control in a bid to eliminate the obstacles to industrial growth. De-licensing of passenger car industry, bulk drugs industry, consumer electronics industry, etc. became landmarks and several new players entered these industries.

    Industries for which licenses are still necessary are:

    • Liquor.
    • Cigarette.
    • Defense equipment.
    • Industrial Explosives.
    • Dangerous Chemicals, and.
    • Drugs.

    Small Scale Industry (SSI) de-reservation, however, has not made much progress.

    The concession from the Monopolies Act:

    According to the provisions of Monopolies and Restrictive Trade Practices Act (MRTP Act) all those companies having assets worth more than 100 crores used to declare MRTP firms and were subject to several restrictions. Now the concept of MRTP has been done away with. These firms are now no longer require to obtain prior approval of the government, at the time of making investment decisions.

    Freedom for Expansion and Production to Industries:

    As a result of the liberalization policy, industries have been giving the following freedom:

    • Before liberalization under the provisions of old policy at the time of granting the license, the government used to fix the maximum limit of production capacity. No industry could produce beyond this limit. Now, this limit has been removing.
    • Producers are now free to produce anything based on demand in the market. Previously, only those goods could produce which were mentioning in the license.
    Increase in the Investment Limit of the Small Industries:

    The investment limit of the small industries has been raising to Rs. 1 crore to enable them to introduce modernization. Investment limit of tiny industries has also been increased to Rs. 25 lakh.

    Freedom to import Capital Goods:

    Under the policy of liberalization. Indian industries will be free to buy machines and raw materials from abroad to expand and modernize themselves.

    Privatization:

    In the context of economic reforms, privatization means allowing the private sector to set up more and more of such industries as were previously reserved for the public sector. Under it, an existing enterprise of the public sector is either wholly or partially sell to the private sector.

    Measures adopted for Privatization:

    Following measures were adopted in respect of privatization under economic reforms:

    Contraction of the Public Sector:

    Initially, in the economic development of India, the public sector was according to prime importance. As observed by Dr. Manmohan Singh, priority was given to the public sector in the hope that it would help capital accumulation, industrialization, development, and removal of poverty. But none of these objectives could realize. The policy of contraction of the public sector was, therefore, adopt under the new economic reforms.

    The number of industries exclusively reserved for the public sector was reduced from 17 to 4. The Government has been divesting its stake in public sector undertakings in the light of the redefinition of its role from being a provider of goods and services to that of a policy-maker and facilitator. Between 1991-2002 the Government has privatized assets worth US$ 6.3 billion.

    Note: At present, the Government is considering disinvestment of the Shipping Corporation of India, State Trading Corporation, Minerals and Metals Trading Corporation, among others. One of the biggest privatization programs that the Government has initiated is the leasing of international airports at the four metropolitan cities of Delhi, Mumbai, Chennai, and Kolkata.

    Globalization:

    It means integrating the economy of a country with the economies of other countries under conditions of freer flow of trade and capital and movement of persons across borders.

    “ Globalization may define as a process associated with increasing openness, growing economic interdependence and deepening economic integration in the world economy.”

    Main components of Globalization of the Indian economy are as under:

    Increase in Foreign Investment:

    Under economic reforms, the limit of foreign capital investment has been growing from 40 percent to 51 percent. In 47 high priority industries foreign direct investment to the extent of 51 percent will allow without any restriction and red-tapism. Also, Export trading houses will allow foreign capital investment up to 51 percent. In this regard, the Foreign Exchange Management Act (FEMA) will enforce.

    Devaluation:

    To promote exports under the policy of globalization, the Indian rupee was devaluing. In July 1991, the rupee was devaluing to the extent of 20 percent on average. The objective was an export promotion, import substitution and attraction of foreign capital.

    Reduction in tariffs:

    To render the Indian economy beneficial internationally, custom duties and tariff impose on imports and exports are reducing gradually.

    Export Promotion:

    Several measures have been taking to meet the deficit of the balance of payments. Exports have been promoting. Special facilities like the abolition of export duties, cheaper export credit and cuts in import duty have been providing to the exports to increase the share of Indian exports in world trade. The government also enhance the duty drawback in respect of a large number of items. The greater flow of bank finance to the export sector at a concessional rate also enhances the competitiveness of exports.

    The rupee made Convertible:

    The government brought in partial convertibility of the rupee in 1992-93 and full convertibility on the trading account in 1993-94. The move supported the intention to give the exchange rate mechanism its due role in regulating the trade flow. It also serves to encourage exports.