शोध चेतना - Chetana College · entrepreneurship is gaining importance in India. In...

शोध-चेतना

ISSN - 2454 - 1877

Published By:

Chetana’s Hazarimal Somani College of

Commerce and Economics,

Smt. Kusumtai Chaudhari

College of Arts.

S.No. 341, Chetana Mahavidyalay

Marg, Near Govt. Colony,

Bandra (E), Mumbai – 400051.

Vol. 1 No. 1 July-Sept

SHODH-CHETANA

1] Prof. Molsy Thomas 2] Prof. B.A.Hosur

3] Prof. S.B.Desai 4] Prof. K.L.N. Sastry

5] Prof. P.P.Malwadkar 6] Prof.Amruta Deshmukh

7] Prof. Tanuja Koli 8] Prof. Nitin G. Rindhe

9] Prof. M.P.Borkar 10] Mr. Sanjay More

11] Prof. Mahesh K. Patil 12] Prof. Kedar Paranjape

13] Prof. Bhavesh Vaity 14] Prof. Niyomi Patel

Editor In Chief:

Dr. Maheshchandra Joshi.

[email protected]

[email protected]

Executive Editor:

Mr. Prashant H. Bhagat

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ISSN (2454 - 1877)

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From the Editor’s Desk

Dear Reader,

I feel very proud while introducing new platform for researchers through publishing

a research journal “Shod-Chetana” which will be published by Chetana’s Hazarimal

Somani College of Commerce & Economics, Smt. Kusumtai Chaudhari College of

Arts. “Chetana” Theprofound Education movement is established under the

leadership of the renowned social thinker and the then Education Minister of

Maharashtra State Late Shri. Balasaheb Madhukarrao Chaudhari. He rightly noted

that the aim of “Chetana” is to nurture the basic educational needs of the

underprivileged society. He insisted that all the efforts should be concentrated to

enlighten the individual. With this Vision the first volume of a research

journal,“Shodh-Chetana” is going to be published. It will be useful to students,

teachers and practitioners to define the problems and limitations of the socio-

economic life of the society & suggest the measures to minimize it. Shodh-Chetana

will act as a mirror of the contemporary life of society.

In January, 2015; Chetana’s Hazarimal Somani College of Commerce &

Economics, Smt. Kusumtai Chaudhari College of Arts has organized National Level

Conference on “Innovative Practices and Application in Commerce, Trade and

Management.”This conference focused on how the Globalization has created ample

opportunities in the various fields and at the same time, how it has given rise to

various problems in Indian social, economic & cultural life too. It was interesting &

exciting experience for the researchers that there are business establishments in

India which tried their level best to fight with the Global Competitive environment

by developing innovative techniques. While running businesses successfully they

not only survived but also expanded their activities globally. Some of the research

papers presented in the conference are included in this journal. With salute to the

innovative senses of Indian Entrepreneurs, the editorial board expects encouraging

responses to this journal, from all the segments of the society.

With all wishes.

Dr. M. P. Joshi.

Shodh-Chetana, July – September, 2015 ISSN: 2454 - 1877 II

SHODH-CHETANA

VOLUME: 1 NUMBER: 1 JULY-SEPTEMBER 2015

CONTENTS

Sr.No. Research Title Author Page No.

01 Integrating Women into sustainable development through Micro

Entrepreneurship.

Mamatha

D’Souza.

01 - 06

02 Innovations in the Indian Hospitality Industry.

Asha Kadam.

07 - 13

03 Merger in the Indian Banking Sector.

Abhijit Bhosle.

14 - 23

04 Corporate Social Responsibility and Innovative Practices in

India.

Mahesh Krishna

Patil.

24 - 30

05 A Comparative Study of Financial Performance of BSE & NSE. A.R. Chougule &

A.K. Khamborkar.

31 - 36

06 Innovative Practices and Application in Marketing

Management.

Pashmeen Kaur

Anand.

37 - 41

07 Innovative Techniques: Key in Acquainting English Language. Vrushali V.

Bhosale-Kaneri.

42 - 44

08 Foreign Direct Investment and Retail sector in India.

Raj A. Soshte.

45 - 48

09 Industrial Waste Management in India. Rekha Shelar.

49 - 55

10 Role of Forensic Accountant in Detection, Investigation, and

Prevention of Frauds.

Sandeep S.

Sawant.

56 - 59

11 Sustainable Transport and Urban Transport Related Issues in

Mumbai and Suburban Region.

Kshamali

Sontakke.

60 - 63

12 Growth of Private Insurance Companies Precautions to be taken. Ravindra S.

Netawate.

64 - 69

13 International Financial Reporting Standards (IFRS) Sachin Manohar

Phadke. 70 - 74

14 Impact of Globalization on Small Scale Industries. B.R. Kamble.

75 - 79

15 शाश्वत शतेीच ेग्रामीण ववकासातील महत्व; नननतन वव. खरात

80 - 83

Shodh-Chetana, July – September, 2015 ISSN: 2454 - 1877 III

A Study On

Integrating Women into sustainable development through Micro Entrepreneurship * Mamatha D’Souza

Introduction

The entrepreneurship of women is considered to be an effective instrument to the economic development

and empowerment of women. Promoting entrepreneurship through microenterprise approach has been

recognized as the solution for incorporating women in development into the overall economic

development process in many developing countries. So Entrepreneurship has been considered as one of

the key factors for a country’s economic development (Raman, Anantharaman and Ramanathan, 2013).

India’s Eleventh Five Year Plan (2007-12) has recognized for the first time that women are not just as

equal citizens but as agents of economic and social growth. The approach to gender equity in the Plan is

based on the recognition that interventions in favour of women must be multi-pronged and they must (a)

provide women with basic entitlements, (b) address the reality of globalization and its impact on women,

(c) ensure an environment free from all forms of violence against women physical, economic, social and

psychological, (d) ensure the participation and adequate representation of women at the highest policy

levels and (e) strengthen existing institutional mechanisms and create new ones for gender mainstreaming

and effective policy implementation. Any development strategy will be lop-sided without involving

women who constitute half of the world population. Women entrepreneurship has gained momentum

since the early 1980s when countries in Asia (particularly India and China) and elsewhere started

liberalizing their economies. The resultant globalization propelled by foreign direct investment,

technological innovations and manufactured exports has brought a wide range of economic and social

opportunities to women entrepreneurs.

Literature Review

In the two key approach to entrepreneurship definitions by (Ntale, 2010), the functional and indicative

(traits), it is indicative that entrepreneurship is used to reduce poverty. The functional approach indicates

that an entrepreneur is a person who performs certain function in business to make money. While in the

indicative approach an entrepreneur a person who make business contractual relation with other parties

and do business and create wealth (Ntale, 2010). Though activities undertaken in an entrepreneurship

differ from one company to the other, the fundamental goal is to create wealth. Several studies have been

made on women entrepreneurs with reference to various countries and in India. Huntley (1985) used a

case study approach to explore the life events and experiences that had influenced women to choose

entrepreneurship as a career alternative. Most ventured into entrepreneurship because of a desire to be

Professor, Don Bosco College , Mumbai., E-mail: [email protected]

Shodh-Chetana, July – September, 2015 ISSN: 2454 - 1877 01

Abstract

In the globalised world, women entrepreneurs are playing a vital role and they have become an

integral part of the global quest for the sustained economic development and social progress. Micro

Entrepreneurship among women is relatively recent phenomenon. Due to the growing

industrialization, social legislation, urbanization, political and economic transformations, social

empowerment, the emergence of women owned enterprises are fast increasing in the economies of

almost all countries. Micro Entrepreneurship is a path to the creation of jobs and incomes. Women

Entrepreneurs play an important role in a country’s growth, and market economy. Studies have

shown that engaging women in business leads to fairer employment, improved corporate social

responsibility, and greater investment back into communities. Spread of education and awareness has

shifted the position of women from kitchen to higher levels of professional activities. Women

entrepreneurship is gaining importance in India. In modern India, more and more women are taking

up entrepreneurial activity especially in Micro Enterprises. At the same time women entrepreneurs

are faced with many social, economic and family problems too. This paper focuses on integrating

women entrepreneurs in the competitive world of business environment for sustained development.


independent and to be in control of their lives. Entrepreneurships create job, increase income among

individuals and improve the standards of living among citizens (Kimani and Kombo, 2010). Thus,

governments and Non-government organizations are attracted to support individuals who are aspiring to

become business owners, by applying various economic strategies. It is through sharing these positive

stories of women that we will inspire the continual growth of better protection of women’s rights,

recognize women’s achievements and build stronger economic development. Sextan and Kent (1982)

compared 45 women executives with 48 women entrepreneurs and found that women entrepreneurs were

better educated, placed a slightly higher emphasis on their job than on their family. Surti and Sarupriya

(1983) investigated the psychological factors affecting women entrepreneurs in India. Results indicated

that unmarried women experienced less stress and less self-role distance than married women. Singh and

Sengupta (1985) conducted a study on 45 women who were attending the entrepreneurial development

programme held at Delhi from November-December 1983 organised by NIESBUD, FICCI. Vinze’s

(1987) studied of 50 women entrepreneurs of Delhi, showed that all of them found future prospects of

their enterprise to be quite bright. Mohiuddin (1983) found that women became entrepreneurs due to their

economic needs, as a challenge to satisfy some of their personality needs. Based on the importance of

Micro entrepreneurship, emphasize for women entrepreneurial activities, and importance of the

government support for women entrepreneurial activities, it is important to identify the role of

government support for women entrepreneurial start-up.

Definition

In accordance with the provision of Micro, Small and Medium Enter-prises development (MSMED) Act,

2006, the Micro Enterprises are classified into two categories based on their Investment in plant and

machinery and Investment in equipments.

Manufacturing Sector:

Enterprises Investment in plant & machinery

Micro Enterprises Does not exceed twenty five lakh rupees

Service Sector:

Enterprises Investment in equipments

Micro Enterprises Does not exceed ten lakh rupees Source: Ministry of MSME

Women entrepreneurs may be defined as the women or a group of women who initiate, organize and

operate a business enterprise. The Government of India connotes women entrepreneurs as “an enterprise

owned and controlled by a woman having a minimum financial inter-est of 51 percent of the capital and

giving at least 51 percent of the employment generated in the enterprise to women”. However, this

definition is subject to criticism on the condition of employing more than 50 percent women workers in

the enterprises owned and run by the women. Women in India constitute about 50 percent of the

country’s population.

Need for Micro Entrepreneurship

India’s achievement, in recent years, is not only marked by high performance in aggregate economic

growth but also in many other parameters. For example, after Ninth Plan period (1997–98 to 2001–02),

when gross domestic product (GDP) grew at only 5.5% per annum, the economy accelerated in the Tenth

Plan period (2002–03 to 2006–07) to an average growth of 7.7%. However, such optimism in the

economy failed to make substantial benefits to the poor who are nevertheless socially excluded to take

advantage of opportunities that economic growth offers. Incidences of poverty and rising inequality are

still major concerns among the policy makers, academics and activists. Because of lack of employment

opportunities, family roles and dependence on social welfare among others, 70% of poor in the world are


women (United Nations, 1995). Thus, it is essential to find ways to poverty reduction. Studies show that

women's involvement in entrepreneurial activities has a significant impact on the economy, society and in

poverty reduction. Although it is often stated that the development of women entrepreneurship should be

part of the women’s empowerment efforts in developing countries, women often faces various constraints

in starting up and expanding their microenterprises. As in many other countries, access to finance has

been recognized as one of the greatest obstacles faced by women entrepreneurs. In this context,

importance of micro entrepreneurship in contributing to job creation and inclusive growth is widely

acknowledged. Government of India has been pursuing a proactive policy through several measures and

interventions since the beginning of the planning period to support the growth of micro and small

enterprises for generating larger self employment and reducing poverty. The XIth Five Year Plan (2007-

08 to 2011-12) has been designed to generate more income and employment opportunities aimed at

reducing poverty and enabling inclusiveness. The major advantages of the MSME sector are its

employment potential at low capital cost, labour flexibility, use of local raw material and skills and wider

geographical dispersal etc. It is the nursery for entrepreneurship, often driven by the individual creativity

and innovation, with a significant contribution in the country’s GDP, manufacturing output, exports and

employment generation. MSMEs contribute 8% of the country’s GDP, 45% of the manufactured output

and 40% of exports (Prime Minister’s Task Force on MSME, 2010). The labour and capital ratio in

MSMEs and the overall growth in the MSMEs are much higher than in the larger industries The MSME

sector in India is highly heterogeneous in terms of the size of the enterprises, variety of products and

services produced and the levels of technology employed. While one end of the MSME spectrum

contains highly innovative and high growth enterprises, more than 94% of MSMEs are unregistered, with

a large number established in the unorganized sector. As per the estimates of 4th All-India Census of

MSME’s (2006-07), the number of enterprises is estimated to be about 26 million and provide

employment to an estimated 60 million persons. Of the 26 million MSMEs, only 1.5 million are in the

registered segment while the remaining 24.5 million (94%) are in the unregistered segment. The sector is

dominated by micro units1, of the total working enterprises, the proportion of micro, small and medium

enterprises were 95.05%, 4.74% and 0.21% respectively. Further, it has been found that two-third of

Indian manufacturing MSMEs are present in cluster, with 95% of them being micro with dominant share

(84%). Generally these type of micro-enterprises use very simple and traditional technology, serve a

limited local market and mostly unregistered. Vast numbers of men and women are engaged in different

forms of employment which include home-based work, self-employment, employment in household

enterprises, small units, on land as agricultural workers, labour on construction sites, domestic work and a

myriad other forms of casual or temporary employment. Though, the sector has consistently registered

higher growth rate compared to the overall industrial sector, workers engaged in the sector could not

enjoy the benefit of country’s economic growth and largely remains poor (Sengupta Committee Report,

2009).

Objective of the Study

Thus, this study aims to

Examine the role of Micro entrepreneurship for Sustainable Development of Women

Understand the need for Micro Entrepreneurship

Research Methodology

The research is based on secondary data such as references from journals, magazines, articles etc.

Findings and Discussion

The schematic and programmatic interventions during the last few decades has created many

opportunities, however, also raised few questions on

Improvement in the areas of value chain up-gradation and linkage, financing,

empowerment, highly competitive business environment, etc.

Efforts to be made to understand the problems that the micro enterprises face.

Incorporation of felt need of women in the developmental strategy is very much required

at this juncture of developmental process.

Awareness of the special schemes for Women entrepreneurs in Micro enterprise

Role of SHG’s and NGO’s in empowering women for Micro entrepreneurship


Schemes for women entrepreneurs

At present, The Government of India has over 27 schemes for women entrepreneurs operated by different

departments and ministries. Some of the special schemes for women entrepreneurs implemented by the

government bodies and allied institutions are provided below:

1. Integrated Rural development Programme (IRDP)

2. Khadi and Village Industries Commission (KVIC)

3. Training of Rural Youth for Self-Employment (TRYSEM)

4. Prime Minister’s Rozgar Yojana (PMRY)

5. Entrepreneurial Development Programmes (EDPs)

6. Management development Programmes

7. Women’s Development Corporation Scheme (WDCS)

8. Marketing of Non-Farm products of Rural Women (MAHIMA)

9. Assistance to Rural Women in Non-Farm Development (ARWIND) Schemes

10. Trade Related Entrepreneurship Assistance and Development (TREAD)

11. Working Women’s Forum

12. Indira Mahila Yojana

13. Indira Mahila Kendra

14. Mahila Samiti Yojana

15. Mahila Vikas Nidhi

16. Micro Credit Scheme

17. Rashtriya Mahila Kosh

18. SIDBI’s Mahila Udyam Nidhi

19. Mahila Vikas Nidhi

20. SBI’s Stree Shakti Scheme

21. NGO’s Credit Schemes

22. Micro and Small Enterprises Cluster development programme (MSE-CDP)

23. National Bank for Agriculture and Rural Development’s Schemes

24. Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP)

25. Priyadarshini Project- A programme for Rural Women Empowerment and Livelihood in Mid

Gangetic Plains

26. NABARD-KfW-SEWA Bank Project

27. Exhibitions for women, under promotional package for Micro and Small Enterprises approved by

CCEA under marketing support

Global Facts of Women Entrepreneurship

The number of women-owned businesses is growing. While this means that more sales and jobs are being

generated by women-owned businesses, these businesses still account for a smaller percentage of overall

US sales and employees.

o The State of Women-Owned Businesses survey, conducted jointly by NAWBO (National

Association of Women Owned Business) and Web.com, found that 85 percent of women

entrepreneurs surveyed believe that more women will venture to start their own businesses in

2013 than in 2012.

o Statistics on women entrepreneurs according to Meghan Casserly in Forbes on this topic: “In

2007 there were 7.8 million women-owned businesses in the United States, generating $1.2

trillion in revenues, up from 5.4 million in 1997.

The interesting statistics include: 81% are optimistic about their business’ overall performance in 2013.

85% predict more women will start their business in 2013.

73% plan to invest more in Marketing in 2013.


http://www.web.com/community/women-business-owners/

http://www.nawbo.org/

http://www.web.com/community/women-business-owners/#.URpwSyLUn9o

http://blogs.forbes.com/meghancasserly/

http://www.census.gov/econ/sbo/

http://www.census.gov/prod/2001pubs/cenbr01-6.pdf

o Since women-owned businesses are usually smaller, they generate a small percentage of US

sales and employment. In 2010, women owned 30% of privately-held businesses, but these

businesses accounted for only 11% of sales and 13% of employment. (Women-Owned

Businesses in the 21st Century, 2010)

o In 2009, 11% of companies backed by VC funding either had or used to have female CEO’s

or female founders. (Wall Street Journal, 2010)

o Women entrepreneurs usually start with less capital than men, and are less likely to take on

debt. Women are more likely to say that they need financing to start their business. (Women-

Owned Businesses in the 21st Century, 2010

Conclusion

Women entrepreneurship plays a key role in industrial development. Empowering women entrepreneurs

is essential for achieving the goals of sustainable development. Entrepreneurship of women has enhanced

their economic status and decision making power. Women entrepreneurs are aware of opportunities

available to them, but there is scope for improvement in it. Economic status, self worth, self confidence

and social status of women entrepreneurs are the variables that define empowerment of women. Woman

entrepreneurship is still an unexploited source of economic growth and potential to create new

employment opportunities for the women and others. Better knowledge of woman entrepreneurship may

also reduce gender disparity in entrepreneurship.

If women gain economic strength, they gain both visibility and a voice at home, workplace and

community. This has an impact on their social status in terms of increase in their literacy, education of

their children and family well being. Therefore, empowerment of women has a rich payoff in economic

development and egalitarian goals of the society.

Today with the growth of Micro and Small enterprises, many women have entered into entrepreneurship.

The Government of India has come forward with many schemes, concessions and incentives exclusively

for women entrepreneurs. But in spite of these, women entrepreneurs have to fulfil their multiple roles as

mother, wife and business women. Women entrepreneurs face many problems in their efforts to develop

their enterprise. Therefore, women entrepreneurs need encouragement and support from the family

members, Government, society and male counterparts. In 2012, the UN is working to strengthen women

in business, producers groups and self-help groups in supporting women to improve their productivity

and the quality of their products.

Reference

1. Annual Report (2012-13), Ministry of Micro, Small and Medium Enterprises, Government of

India

2. Bisht N. S. and Sharma P. K., Entrepreneurship Expectation and Experience, 2nd Ed. Bombay:

Himalaya Publishing House, vol. 2, pp 23-24, 1991.

3. Dant P. R., “Participation patterns of women in franchising,” The Journal of Small Business

Management, April 1996.

4. Dolinski L., Pasumarty R. K., and Quazi H., “The effects of education on business ownership: a

longitudinal study on women,”

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6. Frontiers of Entrepreneurship Research, pp.463-64, 1992.


http://www.esa.doc.gov/sites/default/files/reports/documents/women-owned-businesses.pdf

http://www.esa.doc.gov/sites/default/files/reports/documents/women-owned-businesses.pdf

http://blogs.wsj.com/venturecapital/2010/08/27/addressing-the-lack-of-women-leading-tech-start-ups/

7. Hisrich R. D. and Fuldop G., “Women entrepreneurs in controlled economies: a Hungarian

perspective,” Frontiers of Entrepreneurship Research, vol. 7, no. 3, pp. 590-91, 1993.

8. Honjo S., Ohe T., Okada Y., and Miura K., “Female entrepreneurs in the united states and Japan:

a study of perceived differences,”

9. Huntley R. L., “Women entrepreneurs and career choice,” Dissertation Abstracts International,

May 1985.

10. Kent C. A., Sexton D. L., and Vesper K. H., “Encyclopedia of entrepreneurship,” Englewood

Cliffs, N.J., Prentice-Hall, vol. 1, pp. 4, 1982.

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http://www.academicj ournals.org/ERR2 ISSN 1990-3839.

12. Kirve H. and Knitkar A., “Entrepreneurship at the grass roots: developing the income generating

capabilities of rural women,” The Journal of Entrepreneurship, vol. 2, no. 2, 1993.

13. Kushalakshi, Raghurama, “Problems of Women Entrepreneurs of Micro, Small and Medium

Enterprises (MSMEs), Vol.3, Issue, Jan 2014, ISSN No 2277 - 8160 No 2277 – 8160

14. Meally N. B. O., “Small business opportunities for women in jamaica,” SEDME, vol. 18, no.1,

pp. 186-191, 1991.

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SEDME, vol. 10, no. 1, pp. 1-8, 1983.

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of theories and models. Paper presented at the first African International Business and

Management (AIBUMA) conference on knowledge and innovation leadership for

competitiveness.

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Motivational Factors: A Comparison Study between Women Entrepreneurs and Women Non

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motivation: an exploratory study,” Research Report Serial One, 1985.

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21. Vinze M. D., “Women entrepreneurs in India,” New Delhi, Mittal Publications, 1987, pp: 53.


Innovations in the Indian Hospitality Industry

*Asha Kadam

ABSTRACT: Innovations in the Indian hospitality sector can be analyzed on many different levels.

This analysis makes the attempt to give a broad overview on innovations taking place in the industry according to various categories of hotels as well as relevant functions, concluding with a brief outlook on future directions these innovations might take.

Much hope for the Indian economy lies in harnessing innovations in the hospitality industry. Not only has the Indian hospitality industry an enormous growth potential, the industry itself reinforces the diffusion of innovations by attracting foreigners, facilitating the movement of people, and so on.

The hospitality business requires entrepreneurs to continuously come up with new services, new ways to present existing services, new ways of enhancing the experiences of their increasingly demanding clientele, and new processes to economise operations. Without innovation, hospitality service providers face the threat of becoming ‘obsolete’- ultimately driving them out of business

Hospitality in the Indian Economy:

The contribution of the entire travel and tourism sector in India to Gross Domestic Product is estimated to

rise from 8.6% (USD 117.9 billion) in 2010 to 9.0% (USD 330.1 billion) by 2020. Between 2010 and

2019 the demand for travel and tourism in India is expected to grow annually by 8.2%, which will place

India at the third position in the world. Travel and tourism in India also accounts for 49,086,000 jobs in

2010 (about 10% of total employment) and is expected to rise to 58,141,000 jobs (10.4% of total

employment) by 2020. Within the travel and tourism sector, the Indian hospitality industry is one of the

fastest growing and most important segments, revenue-wise as well as employment-wise. According to

an estimate of the Economic Survey of India and Technopak, the Indian hotel industry accounts for USD

17 billion, 70% (USD 11.85 billion) of which take their origin from the unorganized sector and the

remaining 30% (USD 5.08 billion) from the organized sector.

In 2000, India hosted only 2.6 million international visitors. By 2009, the figure had already

increased to 5.13 million arrivals. Compared to other tourism markets in nearby Asian countries, this is

still a limited success, but one with the potential to develop into a tremendous success story.

Innovations According to Particular Hospitality Categories

Major players in the hospitality industry can be categorized into leading domestic hotel chains,

international brands, emerging Indian brands, market entrants from outside of the industry, and the

remainder of nondescript, largely standalone properties.

* Assistant Professor; Department of Environmental Studies, Chetana’s H S College of Commerce and

Economics, Bandra (E), Mmubai 400051.Contact: 9892677494 / 7506870308. Email Id:

[email protected]


Abstract

Innovations in the Indian hospitality sector can be analyzed on many different levels. This analysis

makes the attempt to give a broad overview on innovations taking place in the industry according to

various categories of hotels as well as relevant functions, concluding with a brief outlook on future

directions these innovations might take. Much hope for the Indian economy lies in harnessing

innovations in the hospitality industry. Not only has the Indian hospitality industry an enormous growth

potential, the industry itself reinforces the diffusion of innovations by attracting foreigners, facilitating

the movement of people, and so on.The hospitality business requires entrepreneurs to continuously come

up with new services, new ways to present existing services, new ways of enhancing the experiences of

their increasingly demanding clientele, and new processes to economise operations. Without innovation,

hospitality service providers face the threat of becoming ‘obsolete’- ultimately driving them out of

business or forcing them to hand the business over to more efficient and innovative entrepreneurs. This

paper is going to focus on Hospitality in the Indian Economy and Innovations According to Particular

Hospitality Categories


The Taj Mahal Palace & Tower, Mumbai

The leading Indian hotel chains, such as The Taj Group of Hotels, Oberoi Hotels & Resorts, and ITC

Welcome group, and the government-run ITDC dominated the Indian hotel market for decades, when

only a handful of international brands had a token presence in India. Of the major international hotel

chains Sheraton, Hilton, Hyatt, Radisson, Marriott, and Le Meridian are already firmly established in the

Indian markets and steadily expanding. With China and India as leading engines of growth in the global

hospitality industry, few of the globally operating companies want to be left out. Considering the

immense scope of opportunity in India, more and more international brands follow their footsteps. By

now, about 50 international hotel chains have entered the Indian marketplace.

With more international players and their sophisticated services, competition in the market is

growing increasingly fierce thus leading to a higher degree of professionalism in the industry, and with

the spread of established hospitality brands, guests are increasing their demands and expectations on the

whole industry, thus creating an environment conducive to innovation.

Budget Hotels:

The Bed and Breakfast concept has arrived in India. The government is now classifying home owners

providing hospitality facilities as "Incredible India Bed and Breakfast “Establishments”. Remarkably,

also big hospitality service providers are attracted to this nascent market. Mahindra Group's Mahindra

Home stays already have hundreds of rooms on a Bed and Breakfast basis in Indian homes countrywide

that can be booked online. Average room rates hover around INR 2,500 for facilities at par with three star

category hotels.

Also leading hotel groups offer quality accommodation for economical prices, such as Ginger

Hotels, Lemon Tree, Sarovar Hotels, Fortune Hotels, Ibis, and Choice Hotels. High demand but a still

rather limited supply in this mid-market segment proves attractive to potential investors and many of the

upcoming hotel development projects currently taking place, position themselves in this segment.

The Indian Hotels Company Limited (IHCL), a unit of Tata Group known mainly for its Taj luxury

hotels, such as the famed Taj Mahal Hotel in Mumbai's Colaba district, is India’s largest hotel chain with

more than 70 hotels in India and abroad as well as more than 100 years of presence in India’s hospitality

sector. One innovative experiment by IHCL is Ginger Hotels, a revolutionary concept in hospitality for

the value segment focusing on key facilities that meet the key needs of the economically-minded traveler.

Ginger outsources a wide range of services from cleaning and laundry to computer support and

cafeteria service. To free up space in the very compact rooms, TVs are mounted on the wall. To save on

cleaning staff, the furniture, flooring, and bathroom fixtures are made of easy-to-clean materials. To cut

the need for security, guests stash valuables in lockers. To deal with the increasingly expensive real estate

rates in India, the company has come up with an innovative strategy of offering landowners a share of the

hotels' profits. With their concept they are able to offer rooms between INR 1,000 and 1,500, while

making handsome purofits selling highly sought after quality rooms at reasonable rates.

Most bookings are made online and the brand spreads mostly through media reports and word of

mouth due to the very reasonable rates, which allows the Taj Group to save on advertising expenses as

well. The concept proves so successful that the company is planning to open hundreds of Ginger Hotels

in India and around the world. Taj's brand sharpening exercise is bearing fruits. Credit Suisse recognized

IHCL as one of the 27 ‘Great Brands of Tomorrow'.

Luxury Hotels:

India also has entered the field of Super Luxury Hotels; some are located in the big cities, while others

are located close to nature. Mumbai's Sahara Star hotel, for instance, is one of famous the Super Luxury

city hotels in India. It features the 3-floor Sahara Suite, which might well be India's most expensive suite

at INR 400,000 per night (about USD 8,600). The price is justified by a private elevator; a personalized

spa station with floatation tank, a glass-roofed lounged with artificial rainfall, etc. In the same line, Super


Luxury resorts such as the Aman Bagh in Alwar have entered they fray, where the cheapest rooms are

priced at about USD 600 per night.

Udaipur City Palace by tvangoethem:

Often by necessity as much as opportunity in a time of declining importance Indian royalty open their

family palaces to guests. Authenticity, a concept that already is in danger of becoming a cliché in the

hospitality world, is quite an understatement for what is on offer. Guests in India easily know the

difference between brand-new hotels built to look like 200-year-old palaces and authentic 200-year-old

palaces turned into hotels with modern amenities and history that speaks to guests from every corner.

Often the royal family will be present at dinner and be accessible to explain their heritage to hotel guests.

More and more rustic colonial properties, beautiful havelis (stately mansions), and imposing

palaces are renovated to become heritage hotels. Properties that are also converted are ruined castles,

planters' clubs, and hunting lodges, among others. All, however, have one feature in common: a

minimum of 50% of the floor area was built before 1950 and no substantial changes to the façade have

been made.

Authenticity:

Based on the believe that it depends heavily on the type of accommodation how guests will experience

local culture, a rising amount of hospitality service providers focus on cultural content, for example,

accommodations that mirror the authentic architecture, flair, and lifestyle of the respective destinations.

New hospitality ventures such as New Delhi-based Travel Must go a step further and take tourists

to fascinating places that are not always easy to navigate on their own, trying to strike a balance between

cultural immersion, vivid history, sheer natural beauty, and enjoyment. They offer exposure to local

culture by giving deep insights into the local culture such as local trades, customs, art, architecture,

religion, food, and music. These kind of authentic cultural experiences are tailored according to the

demands and needs of the clients, and can be as diverse as a tribal village stay in the jungle-clad

mountains of Alwar or an urban home stay run by a university professor and her scientist husband.

Welcome Rangoli by mckaysavage:

Travel must as trusted intermediary between local communities and the interested public ensures that a

meaningful exchange results between guests and hosts. Guests are welcomed into private homes, attend

fascinating ceremonies, and gain invaluable insights into ancient, complex cultures often unknown and

inaccessible to outsiders. Intricate local networks coupled with deep cultural expertise guarantee that

guests learn about and participate in the rich traditions that make India such a vibrant destination.

Eco-Tourism:

Eco-Tourism can be defined as responsible travel to natural areas that conserves the environment and

improves the well-being of native cultures, thereby contributing to the preservation of the diversity of our

world's natural and cultural environments. According to the World Tourism Organization, Eco-Tourism

is the fastest growing market in the entire tourism industry. From the 1990s, the global Eco-Tourism

sector has experienced an annual growth rate of between 20% and 34%, thereby growing three times as

fast as the tourism industry as a whole. Until 2014, the Eco-Tourism industry is expected to grow up to a

quarter of the world's total travel market.

India had initially been a laggard regarding ecological hospitality models rather following the old

trodden path of mass tourism. However, the ugly face of mass tourism in India was soon visible and


ecology emerged as a popular concept in the hospitality industry, striking a balance between business

interests and sustainability. Given the massive potential Indian hoteliers have jumped on the bandwagon

and are gradually harnessing the potential of some of the most outstanding ecosystems in the world, such

as in the Himalayas and the Western Ghats.

Kerala Houseboat by Christian Haugen:

An excellent example here is Kerala, a state on the tropical Malabar Coast of south-western India that is

nicknamed as "God's own country". It is famous especially for its houseboats travelling the extensive

backwaters, Ayurveda retreats, jungle lodges in the Western Ghats, pristine beach resorts, eco-lodges,

and other Eco-Tourism initiatives. Its unique culture and traditions, coupled with its varied geography,

has made it one of the success stories in India.

An increasing number of tour operators in India make it a point to minimise the negative

environmental impacts caused by their customers and make positive contributions to the conservation of

biodiversity. So when their customers chance upon a Red Panda in the Himalayas or witness the hatching

of sea turtles on the Bay of Bengal, they have improved the chances of preserving their habitat by

providing a realistic economic alternative to exploiting local natural resources.

Agricultural Tourism:

Agricultural tourism is widely acknowledged as an instrument for economic development and

employment generation particularly in the remote and backward areas. It creates opportunities to generate

additional revenue, makes for economic diversity, and improves the understanding of farmers in society.

The Indian government collaborates with the United Nations Development Program (UNDP) to promote

rural tourism and also sanctioned more than 100 rural tourism infrastructure projects to spread tourism

and socio economic benefits to identified rural sites.

Guests in India can stay on farms ranging from stud farms over dairy farms up to full-fledged

agricultural farms. They are perfect for urbanites looking to unwind and get back to nature, but with a bit

of comfort and the chance to freely choose the activities in what the guests want to engage in, whether

they want to milk the cows, wash the buffalos, learn to grind wheat, pick vegetables, or go fishing.

Besides, guests experience the natural, cultural, and heritage aspects of the region, such as the local

geography, cuisine, and handicrafts.

Unconventional Accommodations:

Today's travelers are enthusiastic about travelling in different ways to widen their experiences. This is

also reflected in their choice of unconventional accommodation options. In India religious centers,

ashrams, and monasteries are among the popular alternatives to classic choices of accommodation. Given

the cleanliness and hygiene of these accommodations, besides their unique cultural content, this segment

offers huge potential. Organisations such as the Krishnamurti Foundation, Bharat Sevashram Sangha,

Ramakrishna Mission, ISKCON, and Aurobindo Ashram are among the religious institutions that offer

accommodation options across India.

Unique Sales Points:

Many higher end hotels in India are realizing that their key USP in international competition is not their

high-tech facilities, but rather their outstanding staff-to-guest ratios and the longstanding tradition of

Indian hospitality as immortalized by "Atithi Devo Bhava". Hospitality is about serving the guests and to

provide them with a "feel-good-effect". Personalized comprehensive service, such as suites having their

own personal butler, gives guests that extra feel of being valued by their hosts.


Hospitality Staff by Stuck in Customs:

Journeys to India can be complex and challenging. If any tourist destination asks for support in logistics,

knowledge of culture, local connections, and insightful guides, it must be India. At the same time, the

extra amount of support and attention needed is highly affordable in India. Drivers fluently speaking

English, high-profile facilitators accompanying guests in tribal villages, staying in the home of a

professor and his family or dining with the Maharajas in their family palace, in India the extraordinary

becomes the rule rather than the exception.

Diversification:

Innovative concepts of diversification hold the key to survival in the hospitality industry in the long run.

Fierce competition has led to innovative ideas by hotel majors, thereby delivering impressive hospitality

products and services. Exotic spas, gorgeous golf courses, multi-cuisine fine dining, spacious conference

and convention facilities are all among the growing list of facilities found in leading hotels.

Hotels are adapting to innovative operating models by bringing in external brands of restaurants,

spas, and lounges on lease or management contracts to capitalize on proven concepts that generate

substantial revenue by attracting hotel guests and local residents. Cafes and bars which have high profit

margins are increasing their presence in hotels and are quickly developing into core profit centers. A

prominent example is Café Coffee Day found at Ginger Hotels.

Ananda Spa by blaiq:

Taking the example of India's most famous spa, Ananda Spa, one can feel the extent of diversification in

the industry. Renovating the erstwhile palace of a local Maharaja in the Himalayas, Ananda Spa has

created a spa resort that heavily draws on India's spirituality.

Inviting "resident masters", such as those who teach Yoga and heal using Ayurveda, and combining and

packaging spiritual wares with pure luxury, offers a promising revenue model.

Food and Beverages:

With the deeper integration of India in global economic exchange and the free flow of goods across

borders, the Indian hospitality industry now has access to better products, such as imported foods and

beverages. Until recently, five star hotel restaurants were considered the epitome of fine dining

experiences in India and even now many of the best restaurants and bars are still located in India's five

star hotels. The concept of high-end standalone restaurants remained a rare exception.

By now, however, any new trend that emerges in any part of the world rapidly spreads to India,

such as the latest fads of ice bars and ethnic lounges. With well travelled upwardly mobile consumers,

new and trendy food concepts find an increasing following in India. The resulting manifold opportunities

entice famed international chefs to move to India. At the same time, foreign tourists increasingly dare to

sample the diversity of local food. Even many domestic guests seek for opportunities to dine on quality

local delicacies, drink traditional beverages, and learn something of the culinary traditions of the locale.

Foreign versus Domestic Tourists:

Earlier foreign tourist arrivals to India were highly lopsided, with a few countries such as the US and the

UK accounting for the bulk of arrivals in India. In recent years, foreign tourist arrival figures have been

diversifying. More and more people from Afghanistan, Bangladesh, Sri Lanka, and Nepal visit India now,

as are people from Southeast Asian countries, South America, and Africa.


Domestic tourism in India has been a widely neglected topic. Even today, the statistics on foreign

travelers garner all the attention. However, of the total of 500 million trips taken in India per year, only

about five million are from international visitors. Domestic travelers form the major component of

revenue generation in the Indian travel industry.

Indian Family by Wen-Yan King:

Tourism has taken Indians by storm. Indians travelling within the country have nearly doubled in the past

decade. Besides business trips, the traditional pilgrimage tourism, and visiting relatives, the emerging

Indian middle class with their rapidly rising disposable income are following suit and are discovering

their myriad India. While family trips are still fairly dominant, the number of Free Individual Travellers

(FIT) is increasing rapidly.

The improved availability of quality hotels in the budget and mid market segment is also

providing more cost-effective travel options, as Indians are very price sensitive. With more Indians

travelling internationally, there also is greater awareness of international brands and service standards.

Consequently, Indian guests will become more discerning in coming years and will take a good room and

a meal for granted, and will increasingly demand special travel experiences.

Reading the Tea Leaves:

India is today in the defining stages of the business of hospitality. Decisions taken today will massively

impact the growth trajectory the industry will take. Reckoning the future of the Indian hospitality industry

is a very difficult task, especially so due to the ever more rapidly changing market environment.

According to World Travel and Tourism Council, India will be a tourism hotspot from 2009 to 2018,

having the highest 10-year growth potential.

Attempting to read the tea leaves, the Indian hospitality industry will experience a gradual

consolidation process, especially in the unorganised sector. At the same time, more and more players are

attracted to enter the field as profit margins and growth projections seem very promising. This increase in

supply has the potential to benefit the hospitality industry as a whole, since new markets can be

developed and more segments can be catered to than previously. More competition in the field also leads

to better rates for clients and puts pressure on hospitality service providers to improve upon their quality

and diversify their service offering.

Conclusion

The guests of the future will become increasingly unpredictable. Social status and wealth will no longer

be good predictors of the needs and objectives of the guests. That is why flexibility is becoming the key

advantage in a highly volatile hospitality industry. Also technology will play an increasingly important

role in the hospitality equation. Web-savvy India is in a good position to engage its international

competition on search engine optimization, web advertising, and e-marketing. Many innovative concepts

developed in the Indian market can also be easily adapted by other nations such as Nepal, Pakistan,

China, and Brazil. One interesting innovation export might very well turn out to be the quality budget

hotels that are mushrooming in India.While the possibilities for positive change seem endless, it will take

an earnest effort, both from the industry's key stakeholders in the private sector as well as the relevant

government authorities to truly harness the innovation potential of the Indian hospitality industry.


References

1. Verma, Ravindra. (2010). Tourism in 21st Century. Centrum Press, New Delhi.

2. Girija Prasad, P.N. (2010). Global Tourism Principal & Practices, Adyayn Publishers, New Delhi.

3. Pasricha, Ashu. (2009). International Tourism. Regal Publications, New Delhi.

4. Kothari, Anurag. (2011). Tourism Management. Wisdom Press, New Delhi.


Merger in the Indian Banking Sector *Abhijit Bhosle

Introduction

MEANING OF MERGER:

Merger is defined as combination of two or more companies into a single company where one survives

and the others lose their corporate existence. The survivior acquires all the assets as well as liabilities of

the merged company or companies. Generally, the surviving company is the seller. Merger is also defined

as amalgamation. Merger is the fusion of two or more existing companies. All assets, liabilities and the

stock of one company stand transferred to Transferee Company in consideration of payment in the form

of”

1. Equity shares in the transferee company

2. Debentures in the transferee company

3. Cash or A mix of the above modes.

TYPES OF MERGERS:

Merger depends upon the purpose of the offer or company it wants to achieve. Based on the offerors’

objectives profile, combinations could be vertical, circular as precidsely described below with reference

to the purpose in view of the offeror company.

* Assistant Professor; Department of Finance, SIES College, Sion.


Abstract

The project aims to understand the various “Mergers in Indian Banking Sector”. A large number of

international and domestic banks all over the world are engaged in merger activities. One of the

principal objectives behind the mergers in the banking sector is to reap the benefits of economies of

scale. In the recent times, there have been numerous reports in the media on the Indian Banking Industry

Reports have been on a variety of topics. The topics have been ranging from issues such as user

friendliness of Indian banks, preparedness of banks to meet the fast approaching Basel II deadline, in

ceasing foray of Indian Banks in the overseas markets targeting inorganic growth.

Mergers is the only way for gaining competitive advantage domestically and internationally and

as such the whole range of industries are looking to strategic acquisitions within India and abroad. In

order to attain economies of scale and also to combat the unhealthy competition within the sector besides

emerging as a competitive force to reckon with in the International economy. Consolidation of Indian

banking sector through merger on commercial considerations and business strategies is the essential pre-

requisite. Today, the banking industry is counted among the rapidly growing industries in India. It has

transformed itself from a sluggish business entity to a dynamic industry. The growth rate in this sector is

remarkable and therefore, it has become the most prederred banking destinations for international

investors’. In the last two decade, there have been paradigm shift in Indian banking industries. The

Indian banking sector is growing at an astonishing pace. A relatively new dimension in the Indian

banking industry is accelerated through mergers. It will enable banks to achieve world class status and

throw greater value to the Stakeholders.

Keywords : Mergers, Indian banking.

[A] Vertical Combination:

A company would like to take over another company or seek its merger with that company to expand

espousing backward integration to assimilate the resource of supply and forward integration towards

market outlets. The acquiring company through merger of another unit attempts on reduction of

inventories of raw material and finished goods, implements its production plans as per the objectives and

economizes on working capital investments. In other words, in vertical combinations, the merging

undertaking would be either a supplier or a buyer using its product as intermediary material for final

production.

The following main benefits accrue from the vertical combination to the acquirer company i.e

1. It gains a strong position because of imperfect market of the intermediary products, scarcity of

resources and purchased products.

2. Has control over products specifications.

[B] Horizontal Combination:

It is a merger of two competing firms which are at the same stage of industrial process. The acquiring

firm belongs to the same industry as the target company. The main purpose of such mergers is to obtain

economies of scale in production by eliminating duplication of facilities and the operations and

broadening the product line, reduction in investment in working capital, elimination in competition

concentration in product, reduction in advertising costs, increase in market segments and exercise better

control on market.

[C] Circular Combination:

Companies producing distinct products seek amalgamation to share common distribution and research

facilities to obtain economies by elimination of cost on duplication and promoting market enlargement.

The acquiring company obtains benefits in the form of economies of resource sharing and diversification.

[D] Conglomerate Combination:

It is amalgamation of two companies engaged in unrelated industries like DCM and Modi Industries. The

basic purpose of such amalgamations remains utilization of financial resources and enlarges debt capacity

through re-organizing their financial structure so as to service the shareholders by increased leveraging

and EPS, lowering average cost of capital and thereby raising present worth of the outstanding shares.

Merger enhances the overall stability of the acquirer company and creats balance in the company’s total

portfolio of diverse products and production processes.

Merger in the Indian Banking Sector

During the last two decades, the Indian banking sector has undergone a metamorphic change following

the economic reform process initiated by the Government of India. The forces of globalization,

deregulation and liberalization unleashed by the economic reforms, set in motion in 1991, have

transformed the face of the Indian financial services sector landscape , including that of the Indian

banking sector in a big way. There has been a paradigm shift from a regulated to a deregulated

environment. Earlier, the banking industry was largely a nationalized industry (since 1969). The larger

developments in the economies across the globe, the economic crisis in 1991 & more recently the sub-

prime crisis and the changing outlook of the policy makers in India have forced the pace of change of the

Indian banking industry. The economic liberalization and deregulation measures initiated in the 1990s

have opened up the doors to foreign competition and made the markets more efficient and competitive.

Continuous innovation and keeping pace with technological change have become a must for survival of

the firms in the financial services industry including the banking sector. The developments in the Indian

banking sector have witnessed quite a few mergers and The banking sector in India has made remarkable


progress since the economic reforms in 1991.The entire financial sector - the banking 10 sector in

particular is of fundamental importance to a developing economy. The Narasimham Committee report in

August 1991 highlighted the need for financial sector reforms and fostering competitive spirit in the

Indian banking sector. The report also suggested a roadmap to achieve this objective.

The central theme of the reforms was straight forward: providing the much needed platform to

the Indian banks to operate from a vantage point on the basis of operational flexibility and functional

autonomy, thereby improving efficiency, productivity and profitability. The central theme of the reforms

was straight forward: providing the much needed platform to the Indian autonomy, thereby improving

efficiency, productivity and profitability. The Government did not accept all the recommendations due to

political compulsions and the practical difficulties in implementation. In 1997, a second committee was

set up (under M. Narasimham) to specifically suggest further measures for banking sector reforms. The

second Narasimham committee, in its report submitted in April, 1998 had suggested, inter alia mergers

among strong banks, both in the public and private sectors. Since the onset of reforms in 1990, according

to the RBI report, 22 bank amalgamations, have taken place in India (up to 2007). While, the

amalgamations of Indian banks were mostly driven by weak financials as reflected in the continuously

deteriorating balance sheets of the merging entities prior to the year 1999, in the post-1999 period there

have been mergers between healthy banks prompted by business and commercial considerations. The

mergers of the largest commercial bank of India, SBI with State Bank of Saurashtra and State Bank of

Indore (in progress) are the latest among such mergers.

Objectives

To study the purpose of mergers in the Banking Sector

To study the Benefits of mergers.

To study the Bank merger under various Acts

To study the Procedure of Bank Mergers

To study the risk involved in merger.

Case study on the merger of ICICI Bank and Bank of Rajasthan.


The analysis is purely based on the secondary data collected from Internet Sources.

List of Select Commercial Bank Mergers in India

Sr.no. Acquiring Bank Target Bank Year of Amalgamation

01 Bank of India Parur Central Bank Ltd. 1993-1994

02 State Bank of India Kashi Nath Seth Bank Ltd. 1996-1997

03 Bank of Baroda Bareilly Corporation Bank Ltd. 1999-2000

04 Oriental Bank of Commerce Bari Doab Bank Ltd. 1996-1997

05 Union Bank of India Sikkim Bank Ltd. 1999-2000

06 HDFC Bank Ltd. Times Bank Ltd. 1999-2000

07 ICICI Bank Ltd. Bank of Madura Ltd. 1999-2000

08 Bank of Baroda Banares State Bank Ltd. 2002-2003

09 Punjab National Bank Nedungadi Bank Ltd. 2002-2003

10 Oriental Bank of Commerce Global Trust Bank Ltd. 2004-2005

11 IDBI Bank Ltd IDBI Ltd. 2005-2006


Purposes of Mergers

The purpose for an offeror company for acquiring another company shall be reflected in the corporate

objectives. It had to decide the specific objectives to be achieved through acquisition. The basic purpose

of merger or business combination is to achieve faster growth of the corporate business. Faster growth

may be had through product improvement and competitive position. Other possible purposes of

acquisition are short listed below:

[A] Procurement of supplies:

1. To safeguard the source of supplies of raw materials or intermediary product.

2. To obtain economies of purchase in the form of discount, savings in transportation

costs, overhead costs in buying department, etc.

3. To share the benefits of suppliers’ economies by standardizing the materials.

[B] Revamping production facilities:

1. To achieve economies of scale by amalgamating production facilities through more intensive

utilization of plant and resources.

2. To standardize product specification, improvement of quality of product expanding.

3. Market and aiming at consumers satisfaction through strengthening after sale services.

4. To obtain improved production technology and know-how from the offered company

5. To reduce cost, improve quality and produce competitive products to retain and improve market share.

[C] Market expansion and strategy:

1. To eliminate competition and protect existing market.

2. To obtain a new market outlets in possession of the offeree.

3. To obtain new product for diversification or substitution of existing products and to enhance the

product range.

4. Strengthening retain outlets and sale the goods to rationalize distribution.

5. To reduce advertising cost and improve public image of the offeree company.

6. Strategic control of patents and copyrights.

[D] Financial Strength:

1. To improve liquidity and have direct access to cash resource.

2. To dispose of surplus and outdated assets for cash out of combined enterprise.

3. To enhance gearing capacity, borrow on better strength and the greater assets backing.

4. To avail tax benefits.

5. To improve EPS(Earning Per Share)

[E] General Gain

1. To improve its own image and attract superior managerial talents to manage its affairs.

2. To offer better satisfaction to consumers or users of the product.

[F] Own developmental plans:

The purpose of acquisition is backed by the offeror comapny’s own developmental plans. A company

thinks in terms of acquiring the other company only when it has arrived at its own development plan to

expand its operation having examined its own internal strength where it might not have any problem of

taxation, accounting, valuation,etc. But might feel resource constraints with limitation of funds unlack of

skill managerial personnel’s. It has to aim at suitable combination where it could have opportunities to


supplement its funds by issuance of securities, secure additional financial facilities, eliminate competition

and strengthen its market position.

[G] Strategic purpose

The Acquirer company view the merger to achieve strategic objectives through alternative type of

combinations which may be horizontal, vertical, product expansion, market extensional or other specified

unrelated objectives depending upon the corporate strategics. Thus, various types of combinations

distinct with each other in nature are adopted to pursue this objective like vertical or horizontal

combination.

[H] Corporate Friendliness

Although it is rare but it is true that business houses exhibit degrees of cooperative spirit despite

competitiveness in providing rescues to each other from hostile takeovers and cultivate situations of

collaborations sharing goodwill of each other to achieve performance heights through business

combinations. The corporate aim at circular combinations by pursuing this objective.

[I] Desired Level of Integration

Mergers and acquisition are pursued to obtain the desired level of integration between the two combining

business houses. Such integration could be operational or financial. This gives birth to conglomerate

combinations. The purpose and the requirements of the offeror company go a long way in selecting a

suitable partner for merger in business combinations.

Benefits of Merger

1. Growth or Diversification

Companies that desire rapid growth in size or market share or diversification in the range of their

products may find that a merger can be used to fulfil the objective instead of going through the time

consuming process of internal growth or diversification. The firm may achieve the same objective in a

short period of time by merging with an existing firm. In addition such a strategy is often less costly than

the alternative of developing the necessary production capability and capacity. If a firm that wants to

expand operations in existing or new product area can find a suitable going concern. It may avoid many

of risks associated with a design, manufacture the sale of addition or new products. Moreover when a

firm expands or extends its product line by acquiring another firm, it also removes a potential competitor.

2 Synergism

The nature of synergism is very simple. Synergism exists whenever the value of the combination is

greater than the sum of the values of its parts. In other words, synergism is “2+2=5”, But identifying

synergy on evaluating it may be difficult, infact sometimes its implementations may be very subtle. As

broadly defined to include any incremental value resulting from business combination, synergism in the

basic economic justification of merger. The incremental value may derive from increase in either

operational or financial efficiency.

3 Operating Synergism

Operating synergism may result from economies of scale, some degree of monopoly power or increased

managerial efficiency. The value may be achieved by increasing the sales volume in relation to assts

employed increasing profit margins or decreasing operating risks. Although operating synergy usually is

the result of either vertical/horizontal intergration some synergistic also may result from conglomerate

growth. In addition, some times a firm may acquire another to obtain patents, copyrights, technical

proficiency, marketing skills, specific fixes assets, customer relationship or managerial personnel.


Operating synergism occurs when these assets which are intangible, may be combined with the existing

assets and organization of the acquiring firm to produce an incremental value. Although that value may

be difficult to appraise it may be the primary motive behind the acquisition.

Financial Synergism

Among these are incremental values resulting from complementary internal funds flows more efficient

use of financial leverage, increase external financial capability and income tax advantages.

a) Complementary internal funds flows

Seasonal or cyclical fluctuations in funds flows sometimes may be reduced or eliminated by merger.

If so, financial synergism results in reduction of working capital requirements of the combination

compared to those of the firms standing alone.

b) More efficient use of Financial Leverage

Financial synergy may result from more efficient use of financial leverage. The acquisition firm may

have little debt and wish to use the high debt of the acquired firm to lever earning of the combination

or the acquiring firm may borrow to finance and acquisition for cash of a low debt firm thus

providing additional leverage to the combination. The financial leverage advantage must be weighed

against the increased financial risk.

c) Increased External Financial Capabilities

Many mergers, particular those of relatively small firms into large ones, occur when the acquired firm

simply cannot finance its operation. Typical of this is the situations are the

Small growing firm with expending financial requirements. The firm has exhausted its bank credit

and has virtually no access to long term debt or equity markets. Sometimes the small firm has

encountered operating difficulty, and the bank has served notice that its loan will not be renewed? In

this type of situation a large firms with sufficient cash and credit to finance the requirements of

smaller one probably can obtain a good buy. Making a merger proposal to the small firm. The only

alternative the small firm may have is to try to interest 2 or more large firms in proposing merger to

introduce, competition into those bidding for acquisition. The smaller firm’s situations might not be

so bleak. It may be threatened by non renewable of maturing loan. But its management may

recognize that continued growth to capitalize on its market will require financing be on its means.

Although its bargaining position will be better. The financial synergy of acquiring firm’s strong

financial capability may provide the impetus for the merger. Sometimes the acquired firm possesses

the financing capability.

d) The Income Tax Advantages

In some cases, income tax consideration may provide the financial synergy motivating a merger, e.g.

assume that a firm A has earnings before taxes of about rupees ten crores per year and firm B now

break even, has a loss carry forward of rupees twenty crores accumulated from profitable operations

of previous years. The merger of A and B will allow the surviving corporation to utility the loss

carries forward, thereby eliminating income taxes in future periods.

Counter Synergism

Certain factors may oppose the synergistic effect contemplating from a merger. Often another layer of

overhead cost and bureaucracy is added. Do the advantages outweigh disadvantages? Sometimes the

acquiring firm agrees to long term employments contracts with managers of the acquiring firm. Such

often are beneficial but they may be the opposite. Personality or policy conflicts may develop that either

hamstring operations or acquire buying out such contracts to remove personal position of authority.

Particularly in conglomerate merger, management of acquiring firm simply may not have sufficient

knowledge of the business to control the acquired firm adequately. Attempts to maintain control may

induce resentment by personnel of acquired firm. The resulting reduction of the efficiency may eliminate

expected operating synergy of even reduce the post merger profitability of the acquired firm. The list of

possible counter synergism factors could go on endlessly, the point is that the mergers do not always

produce that expected results. Negative factors and the risks related to them also must be considered in

appraising a prospective merger.


Other Motives for Merger

Merger may be motivated by two other factors that should not be classified under synergism. These are

the opportunities for acquiring firm to obtain assets at bargain price and the desire of shareholders of the

acquired firm to increase the liquidity of their holdings.

1. Purchase of Assets at Bargain Prices

2. Increased Managerial Skills or Technology

3. Acquiring New Technology

Bank Merger/Amalgamation under various acts

The relevant provisions regarding merger/amalgamation of banks under various acts are discussed in

brief as under:

Mergers-Banking Regulation act 1949

Amalgamations of banking companies under B R Act fall under categories are voluntary amalgamation

and compulsory amalgamation.

Section 44A Voluntary Amalgamation of Banking Companies

Section 44A of the Banking Regulation act 1949 provides for the procedure to be followed in case of

voluntary Mergers of banking companies. Under these provisions a banking company may be

amalgamated with another banking company by approval of shareholders of each banking company by

resolution passed by majority of two third in value of shareholders of each of the said companies. The

bank to obtain Reserve Bank’s sanction for the approval of the scheme of amalgamation. However, as

per the observations of JPC the role of RBI is limited. The reserve bank generally encourages

amalgamation when it is satisfied that the scheme is in the interest of depositors of the amalgamating

banks.

A careful reading of the provisions of section 44A on banking regulation act 1949 shows that the

high court is not given the powers to grant its approval to the schemes of merger of banking companies

and Reserve bank is given such powers. Further, reserve bank is empowered to determine the Market

value of shares of minority shareholders who have voted against the scheme of amalgamation. Since

nationalized banks are not Banking Companies and SBI is governed by a separate statue, the provisions

of section44A on voluntary amalgamation are not applicable in the case of amalgamation of two public

sector banks or for the merger of a nationalized bank/SBI with a banking company or vice versa. These

mergers have to be attempted in terms of the provisions in the respective statute under which they are

constituted. Moreover, the section does not envisage approval of RBI for the merger of any other

financial entity such as NBFC with a banking company voluntarily. Therefore a banking company can be

amalgamated with another banking company only under section 44A of the BR act.

Section 45- Compulsory Amalgamation of banks

Under section 45(4) of the banking regulation act, reserve bank may prepare a scheme of amalgamation

of a banking company with other institution(the transferee bank) under sub-section (15) of section 45.

Banking institution means any banking company and includes SBI and subsidiary banks or a

corresponding new bank. A compulsory amalgamation is a pressed into action where the financial

position of the bank has become week and urgent measures are required to be taken to safeguard the

depositor’s interest. Section 45 of the Banking regulation Act, 1949 provides for a bank to be

reconstructed or amalgamated compulsorily’ i.e. without the consent of its members or creditors, with

nay other banking institutions as defined in sub section(15) thereof. Action under there provision of this

section is taken by reserve bank in consultation with the central government in the case of banks, which

are weak, unsound or improperly managed. Under the provisions, RBI can apply to the central

government for suspension of business by a banking company and prepare a scheme of reconstitution or

amalgamation in order to safeguard the interests of the depositors.

Under compulsory amalgamation, reserve bank has the power to amalgamate a banking

company with any other banking company, nationalized bank, SBI and subsidiary of SBI. Where as

under voluntary amalgamation, a banking company can be amalgamated with banking company can be


amalgamated with another banking company only. Meaning thereby, a banking company can not be

merged with a nationalized bank or any other financial entity.

Procedure of Bank Mergers

The procedure for merger either voluntary otherwise is outlined in the respective state statutes the

Banking regulation Act. The Registrars, being the authorities vested with the responsibility of

administering the Acts, will be ensuring that the due process prescribed in the Statutes has been

complied with before they seek the approval of the RBI. They would also be ensuring compliance with

the statutory procedures for notifying the amalgamation after obtaining the sanction of RBI.

Before deciding on the merger, the authorized officials of the acquiring bank and the merging

bank sit together and discuss the procedural modalities and financial terms. After the conclusion of the

discussions, a scheme is prepared incorporating therein the all the details of both the banks and the area

terms and conditions. Once the scheme is finalized, it is tabled in the meeting of Board of directors of

respective banks. The board discusses the scheme threadbare and accords its approval if the proposal is

found to be financially viable and beneficial in long run.

After the Board approval of the merger proposal, an extra ordinary general meeting to the

shareholders of the respective banks is convened to discuss the proposal and seek their approval.

After the board approval of the merger proposal, a registered valuer is appointed to valuate both

banks. The valuer valuates the banks on the basis of its share capital, market capital, assets and

liabilities, its reach and anticipated growth and sends its report to the respective banks.

Once the valuation is accepted by the respective banks, they send the proposal along with all

relevant documents such as Board approval, shareholders approval, valuation report etc to Reserve

Bank of India and other regulatory bodies such Security & exchange board of India(SEBI) for their

approval.

After obtaining approval from all the concerned institutions, authorized officials of both the banks

sit together and discuss and finalize share allocation proportion by the acquiring bank to the

shareholders of the merging bank(SWAP ratio)

After completion of the above procedures, a merger and acquisition agreement is signed by the

bank.

RBI Guidelines on Merger of Banks

With a view to facilitating consolidation and emergence of strong entities and providing an

avenue for non disruptive exit of weak/unviable entities in the banking sector, it has been decided to

frame guidelines to encourage merger/amalgamation in the sector.

Although the Banking Regulation Act, 1949 (AACS) does not empower Reserve Bank to

formulate a scheme with regard to merger and amalgamation of banks, the State Governments have

incorporated in their respective Acts a provision for obtaining prior sanction in writing, of RBI for an

order, inter alia, for sanctioning a scheme of amalgamation or reconstruction.

The request for merger can emanate from banks registered under the same State Act or from

banks registered under the Multi State Co-operative Societies Act(Central Act) for takeover of a banks

registered under State Act. While the State Acts specifically provide for merger of co-operative

societies registered under them, the position with regard to take over of a co-operative bank registered

under the State Act by a co-operative bank registered under the CENTRAL.

Although there are no specific provisions in the State Acts or the Central Act for the merger of a

co-operative society under the State Acts with that under the Central Act. It is felt that, if all concerned

including administrators of the concerned Acts are agreeable to order merger/amalgamation, RBI may

consider proposals on merits leaving the question of compliance with relevant statutes to the

administrators of the Acts. In other words, Reserve Bank will confine its examination only to financial

aspects and to the interests of depositors as well as the stability of the financial system while

considering such proposals.


Risks in Bank Mergers

1. When two banks merge into one then there is an inevitable increase in the size of the organization.

Big size may not always be better. The size may get too widely and go beyond the control of the

management. The increased size may become a drug rather than an asset.

2. Consolidation does not lead to instant results and there is an incubation period before the results

arrive. Mergers and acquisitions are sometimes followed by losses and tough intervening periods

before the eventual profits pour in. Patience, forbearance and resilience are required in ample

measure to make any merger a success story. All may not be up to the plan, which explains why

there are high rate of failures in mergers.

3. Consolidation mainly comes due to the decision taken at the top. It is a top heavy decision and

willingness of the rank and file of both entities may not be forthcoming. This leads to problems

of industrial relations, deprivation, depression and demotivation among the employees. Such a

work force can never churn out good results. Therefore, personal management at the highest

order with humane touch alone can pave the way.

4. The structure, systems and the procedures followed in two banks may be vastly different, for

example, a PSU bank or an old generation bank and that of a technologically superior foreign

bank. The erstwhile structures, systems and procedures may not be conducive in the new milieu.

A thorough overhauling and systems analysis has to be done to assimilate both the organizations.

This is a time consuming process and requires lot of cautions approaches to reduce the frictions.

5. There is a problem of valuation associated with all mergers. The shareholder of existing entities

has to be given new shares. Till now a foolproof valuation system for transfer and compensation

is yet to emerge.

6. Further, there is also a problem of brand projection. This becomes more complicated when

existing brands themselves have a good appeal. Question arises whether the earlier brands should

continue to be projected or should they be submerged in favour of a new comprehensive identity.

Goodwill is often towards a brand and its sub merger is usually not taken kindly.

Conclusion

Banks today are under tremendous pressure to perform- to meet the objectives of all their

stake holders, while satisfying the regulators that the bank’s policies, loans and investments are

financially sound. Over the years, as banks have grown in size, more and more of them have approached

the money and capital markets to raise funds by issuing stock, bonds and other securities. Banks’ entry

into open market for mobilizing funds means that their financial statements are being increasingly

scrutinized by the investors and the general public.

Based on the trends in the banking sector and insights from the cases highlighted in this study, one

can list some steps for the future with banks should consider, both in terms of consolidation and general

business. Firstly Banks can work towards a synergy-based merger plan with minimisation of technology-

related expenditure as a goal. There is also a need to note that MERGER or large size is just a facilitator,

but no guarantee for improved profitability on a sustained basis. Hence, the thrust should be on

improving risk management capabilities, corporate governance and strategic business planning. In the

short run, attempt option like outsourcing, strategic alliances, etc. Can be considered Banks need to take

advantage of this fast changing environment, where product life cycles are short, time to market in

critical and first mover advantage could be a decisive factor in deciding who wins in future. Post Merger

the resulting larger size should not affect agility. The aim should be to create a nimble giant, rather than

a clumsy dinosaur. At the same time, lack of size should not be taken to imply irrelevance as specialized

players can still seek to provide niche and boutique services.


References

www.banknetindia.com

www.rbi.org.in

www.thehindubusinessline.com

www.icici.com

www.bankofrajasthan.com

EBSCO Research database

www.iba.org.in IBA (Indian Banks Association) .


Corporate Social Responsibility and Innovative Practices in India

*Mahesh Krishna Patil

Introduction One of the human kinds greatest challenges in this century will be to ensure sustainable , just and balance

development. In this context the it is increasingly recognised the role of business sector . As a part of

society , it is business community to contribute to addressing the common problems. Strategically

speaking business can only flourish when the communities and ecco-system in which they operate are

healthy. In this circumstances the concept of corporate social responsibility play very crucial role at

international and national level. CSR is the deliberate inclusion of public interest into corporate decision-

making, and the honoring of a triple bottom line: people, planet, profit. India is developing economy and

present government announced its various policies for the faster economic growth such as “Make in

India”, providing the relaxation and flexibility in rule and regulation to the corporate sector. In this

circumstances the newly added provisions relating to the Corporate Social Responsibility in Company

Act, 2013 is significant one. Which make it mandatory for the certain class of companies to spend their

some income on the corporate social responsibility.the concept of CSR has been changing.Today, CSR

has been understood in terms of accountability where corporators are feeling that they are responsible for

the impact their actions have on several stakeholders. They feel that the basic motive of CSR today is to

increase the company’s overall impact on the society and stakeholders. It one of the important task before

the corporate sector in India to adopt the innovative and strategic plans and policies to fulfill this legal

obligation. Today CSR is emerging as a core focus area for an increasing number of organizations, which

are looking at new and innovative ways to contribute to the communities they operate. If every business

firm starts taking initiatives of CSR practices this planet will be marvellous place to live.

* Assistant Professor; Department of Business Law, Chetana’s Hazarimal Somani College of Commerce

and Economics, Bandra (E), Mmubai 400051.Contact: 9921016719. Email Id: [email protected]


Abstract

The expanding reach and growing influence of transnational corporations is the most visible embodiment

of globalization. These transnational corporations play very crucial role in the governance and public

policy. The various international frameworks created relating to recognise the social responsibility of

these transnational corporations. The major challenge before India is promote equitable, inclusive and

sustainable growth. The Parliament of India passed Company Act 2013, which included the provisions of

Corporate Social Responsibility i.e. Section 135 and Schedule VII. The practice of CSR is not new to

companies in India. The industry has responded positively to the reform measure undertaken by the

government with a wide interest across the public and private sector, Indian and multinational

companies. But the companies has to evolve the innovative strategies while they performing their

corporate social responsibility. So in the present paper the concept of corporate social responsibility,

international and legal provisions in India relating to CSR, the various innovative practices adopted by

the corporate sector in India relating to CSR analyzed.


Concept of Corporate Social Responsibility Every business firm has to work under some social environment that is known as a society and as a good

corporate entrepreneur one has to responsible for the society by means of preserving the environment,

minimizing the wastage of natural resources, helping the needful,conducting the educational camps,

promoting I.T. Education, running schools/NGO’s, recycling products, counseling sessions, awareness

programmes regarding various diseases etc. CSR demands that businesses manage the economic, social

and environmental impacts of their operations to maximize the benefits and minimize the downsides.CSR

describes a company‘s commitment to be accountable to its stakeholders.The most often cited definition

is Carroll‘s (1979) statement that ―The social responsibility of business encompasses the economic,

legal, ethical, and discretionary expectations that society has of organizations at a given point in time.

There are three (3) approaches : CSR as Value Creation; CSR as Risk Management;and CRS as

Corporate Philanthropy.

Definitions of CSR

The World business council for sustainable development defines CSR as “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.” According to the UNIDO i.e. United

Nations industrial development organization, “Corporate social responsibility is a management concept

whereby companies integrate social and environmental concerns in their business operations and

interactions with their stakeholders. CSR is generally understood as being the way through which a

company achieves a balance of economic, environmental and social imperatives (Triple-Bottom-Line

Approach), while at the same time addressing the expectations of shareholders and stakeholders. In this

sense it is important to draw a distinction between CSR, which can be a strategic business management

concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable

contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its

brand, the concept of CSR clearly goes beyond that.” From the above definitions, it is clear that: The CSR approach is holistic and integrated with the core business strategy for addressing social and

environmental impacts of businesses. CSR needs to address the well-being of all stakeholders and not just

the company’s shareholders. Philanthropic activities are only a part of CSR, which otherwise constitutes

a much larger set of activities entailing strategic business benefits.

Global Norms and guidelines

United Nations Global Compact

The UN guiding principles on business and human rights

ILO’s tripartite declaration on multinational Enterprise and social policy

OECD guidelines for multinational enterprise organisation for economic and social development

Social accountability international-(SAI)- SA 8000 Standard

The Social return on investment Network

Provisions in India-

Recently in the Company Act, 2013 included the provisions relating to CSR as under-

135. Corporate Social Responsibility (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one

thousand crore or more or a net profit of rupees five crore or more during any financial year shall

constitute a Corporate Social Responsibility Committee of the Board consisting of three or more

directors, out of which at least one director shall be an independent director. (2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the

Corporate Social Responsibility Committee.

(3) The Corporate Social Responsibility Committee shall,


(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate

the activities to be undertaken by the company as specified in Schedule VII;

(b) recommend the amount of expenditure to be incurred on the activities referredto in clause (a); and

(c) monitor the Corporate Social Responsibility Policy of the company from timeto time.

(4) The Board of every company referred to in sub-section (1) shall,—

(a) after taking into account the recommendations made by the Corporate Social Responsibility

Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of

such Policy in its report and also place it on the company's website, if any, in such manner as may be

prescribed; and

(b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are

undertaken by the company.

(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in

every financial year, at least two per cent. of the average net profits of the company made during the three

immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:

Provided that the company shall give preference to the local area and areas around it where it operates,

for spending the amount earmarked for Corporate Social Responsibility activities:

Provided further that if the company fails to spend such amount, the Board shall, in its report made under

clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.

Explanation.—For the purposes of this section “average net profit” shall be calculated in accordance with

the provisions of section 198.

SCHEDULE VII

(See sections 135)

Activities which may be included by companies in their Corporate Social

Responsibility Policies Activities relating to:—

(i) eradicating extreme hunger and poverty;

(ii) promotion of education;

(iii) promoting gender equality and empowering women;

(iv) reducing child mortality and improving maternal health;

(v) combating human immunodeficiency virus, acquired immune deficiency

syndrome, malaria and other diseases;

(vi) ensuring environmental sustainability;

(vii) employment enhancing vocational skills;

(viii) social business projects;

(ix) contribution to the Prime Minister's National Relief Fund or any other

fund set up by the Central Government or the State Governments for

socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled

Tribes, other backward classes, minorities and women; and

(x) such other matters as may be prescribed.

National voluntary guidelines on social environment and economic responsibilities of business published

by the ministry of corporate affairs.

Factors Influencing CSR P. Mahajan,Corporate Social Responsibility; A wave of Corporate governance (2011), states that many

factors and influences, including the following have led to increasing attention being devoted to CSR.

1. GLOBALIZATION- coupled with focus on cross border trade, multinational enterprises and global

supply chains is increasingly raising CSR concerns related to human resource management practices,

environmental protection and health and safety amongst other things.

2. GOVERNMENTAL AND INTER-GOVERNMENTAL BODIES- have developed compacts,

declarations, guidelines, principles and other instruments that outline social reforms for acceptable

conduct.


3. ADVANCES IN COMMUNICATION TECHNOLOGY- is making it easier to tract corporate

activities and disseminates information about them.

4. CONSUMERS AND INVESTORS- are showing increasing interest in supporting responsible business

practice and are demanding more information on how companies are addressing risks and opportunities

related to social and environment issues.

5. NUMEROUS SERIOUS AND HIGH-PROFILE BREACHES OF CORPORATE ETHICS- have

contributed to elevated public mistrust of corporations and highlighted the need for improved corporate

governance.

6. CITIZENS- in many countries are making it clear that corporations should meet standards of social and

environmental care, no matter where they operate.

7. INCREASING AWARENESS OF THE LIMITS OF GOVERNMENT LEGISLATURE- to regulate

initiatives to effectively capture all the issues that CSR addresses.

CSR in India

India has a long tradition in the field of corporate social responsibility and industrial welfare has been put

to practice since late 1800s. Historically, the philanthropy of business people in India has resembled

western philanthropy in being rooted in religious belief. Business practices in the 1900s that could be termed socially responsible took different forms: philanthropic donations to charity, service to the community, enhancing employee welfare and promoting religious conduct. The concept of CSR has evolved from being regarded as detrimental to a company’s profitability, to being considered as somehow benefiting the company as a whole, at least in the long run. Today, CSR in India has gone beyond merely ‘charity and donations’ and is approached in a more organized fashion. It has become an integral part of the corporate strategy According to Indian Institute of Corporate Affairs, a minimum of 6,000 Indian companies will be

required to undertake CSR projects in order to comply with the provisions of the Companies Act, 2013

with many companies undertaking these initiatives for the first time. Further, some estimates indicate that

CSR commitments from companies can amount to as much as 20,000 crore INR.

Importance and benefits of CSR

One is reminded of the famous words of late John F Kennedy, former US president, who had said “Ask

not what your country can do for you, but ask what you can do for the country”. As our economy is

growing at a rapid speed, the means becomes as important as the end, if not more. No business should

flourish at the cost of the society. Business houses must behave ethically and contribute to the economic

development while improving the quality of life of the employees and that of the society at large.

Different options exists on this topic ranging from “CSR is Government‟s or NGO‟s baby and business

has nothing to do with it” to “money spent on CSR is a theft from the shareholders of the business”, etc.,

but the fact remains that a business survives only through the service of its employees, who by

themselves form an effective part of the society itself.

Social Entrepreneurs can lead innovative projects that can be funded by CSR Funds

Innovation will lead Transformation of processes, products, and practices

Benefits of CSR

The basic objective of CSR in these days is to maximize the company's overall impact on the society and

stakeholders.

CSR should not be viewed as a drain on resources, because carefully implemented CSR policies can help

your oragnisation:

1. Win new business.

2. Increase customer retention.

3. Develop and enhance relationships with customers, suppliers and networks.

4. Attract, retain and maintain a happy workforce and be an employer of choice.

5. Save money on energy and operating costs and managing risk.

6. Differentiate yourself from your competitors.

7. General innovation and learning and enhance your influence.


8. Improve your business reputation and standing.

9. Provide access to investment and funding opportunities.

10. Generate positive publicity and media opportunities due to media interest in ethical business

activities.

Corporate social responsibility (CSR) is gaining more and more importance day by day. CSR is not only

drawing the corporate magnates into its circumference, but is also luring educationists, social activists,

reformists, from all over the world to delve deeper into it. Changing market scenario, globalization, ethical consumerism all are adding heat to the CSR concept. More and more organizations are showing

their commitments towards CSR either for enhancing their corporate image or to be in competition.

Emergence of different marketing innovations demands direct linkage of corporate social responsibility

practices with the business corporate strategies. They are incorporating their corporate social

responsibility initiative in their annual report. Companies have CSR teams that devise specific policies,

strategies and goals for their CSR programs and set aside budgets to support them.

However, over the last few years, Several innovative programmes in thematic areas of public health,

education, environment, microfinance and related areas are being developed. These programmes are

developed bearing in mind the local cultural context and the needs of people. Apart from devoting funds,

expertise in terms of knowledge and human resource is also allocated for successful implementation of

these programmes.

Good Practices in CSR 1.Committing to Long Term CSR Vision

2.Engaging Employees for CSR Practices

3.Inclusive Business Practices

4.Sustainable Business Practices

5.Innovation in CSR Practices

6.Transparency in CSR Reporting

Innovation and CSR Practices

CSR Goals are challenging and has fostered Innovation

Innovation has accelerated Adoption of CSR Goals with CSR Funds

Global and Examples 1. Product Innovation like E-Rickshaw, Hybrid cars – new opportunities

2. Energy Efficient data centers, computers, lighting – huge innovation, ongoing

3. Apple’s iMac consumes 97% less energy than first iMac (1998)

4. New opportunities in Organic Food (e.g. Sikkim)

5. Innovation of New Financial Instruments [Green Bonds, Foundations funded by Equity, Social

Impact Bonds (SIB), etc.]

6. Rise of Social Entrepreneurship for new products, solutions

National Examples-

Companies in India have quite been proactive in taking up CSR initiatives and integrating them in their

business processes.

Organizations like Bharat Petroleum Corporation Limited, Maruti Suzuki India Limited, and Hindustan

Unilever Limited, focus holistic development in the villages they have adopted. They provide better

medical and sanitation facilities, build schools and houses, and help the villagers become self-reliant by

teaching them vocational and business skills.

Reliance Industries initiated a project named as “Project- Drishti” to bring back the eyesight of visually

challenged Indians from the economically weaker sections of the society. This project has brightened up

the lives of over 5000 people so far. GlaxoSmithKline Pharmaceuticals’ CSR programs primarily focus on health and healthy living. They work in tribal villages where they provide medical check-ups and treatment, health camps and health awareness programs.


As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with the Tribal

Development Department of Gujarat for a development project aimed at upliftment of tribal in the Sasan

area of Gir forest

The Tata Steel Rural Development Society aims to improve agricultural productivity and raise farmers‟

standard of living.

Oil & Natural Gas Corporation offers community-based health care services in rural areas through 30

Mobile Medicare Units (MMUs). The ONGC-Eastern Swamp Deer Conservation Project works to

protect the rare species of Easter Swamp Deer at the Kaziranga National Park in Assam.

Infosys: The Infosys Science Foundation, set up in 2009, gives away the annual Infosys Prize to honour

outstanding achievements in the fields of science and engineering. The company supports causes in

health care, culture and rural development.

The financial services sector is going green in a steady manner. Efforts by companies such as HSBC

India, Max New York Life and Standard Chartered Bank have ensured that the green movement has kept

its momentum by asking their customers to shift to e-statements and e- receipts.

Challenges for CSR

The following are important challenges for the planning and implementation of CSR-

1.Lack of community participation in CSR activities: CSR is largely misunderstood by Indian

businesses and their stakeholders. There is a view that businesses are already socially responsible, when

they are clearly not.

2. Need for capacity building of the local non-governmental organizations: There is a need for

capacity building of the local non -governmental organisations as there is serious dearth of trained and

efficient organisations that can effectively contribute to the ongoing CSR activities initiated by

companies.

3. Issues of transparency: Lack of transparency is one of the key issues brought forth by the survey.

This reported lack of transparency negatively impacts the process of trust building between companies

and local communities, which is a key to the success of any CSR initiative at the local level.

4. Non-Availability of Well Organized Non-Governmental Organizations: in remote and rural areas

that can assess and identify real needs of the community and work along with companies to ensure

successful implementation of CSR activities.

5. Visibility Factor: The role of media in highlighting good cases of successful CSR initiatives is

welcomed as it spreads good stories and sensitizes the local population about various ongoing CSR

initiatives of companies.

5. Narrow Perception towards CSR Initiatives: Non-governmental organizations and Government

agencies usually possess a narrow outlook towards the CSR initiatives of companies, often defining CSR

initiatives more donor-driven than local in approach. As a result, they find it hard to decide whether they

should participate in such activities at all in medium and long run.

6. Lack of Consensus on Implementing CSR Issues: There is a lack of consensus amongst local

agencies regarding CSR projects. This lack of consensus often results in duplication of activities by

corporate houses in areas of their intervention.


Conclusion

Today, CSR in India has gone beyond simply charity and donations, and is approached in a more

organized and legal fashion. It has become an integral part of the corporate strategy. Companies have

CSR teams that formulate specific policies, strategies and goals for their CSR programs and set aside

budgets to support them. The Companies Act, 2013 has introduced the idea of CSR to the forefront and

through its disclose-or-explain mandate, is promoting greater transparency and disclosure. Schedule VII

of the Act, which lists out the CSR activities, suggests communities to be the focal point. So the

companies having freedom to adopt various innovative practices within legal framework which will

contribute both to the corporate sector and also to society as whole i.e. to fulfills both economic and

social obligations.

References

1. Company Act,2013

2. Corrol A.B.(1991) The Pyramid of CSR; toward the moral management of organization stakeholder,

Business Horozen, Vol.34 pp.39-48

3. Corrol A.B.(1979) Three Dimensional Conceptual model of Corporate Performance, Academy of

management review, Vol.V, No. 4, pp.n497-505.

4. Handbook on Corporate Social responsibility in India, published by Confederation of Indian industry

5. Michael Fontain, Corporate Social Responsibility- The new bottom line , Journal of business and

social science, Vol. V, no.4, April,2013

6. Mahajan D (2011) Corporate Social Responsibility; A wave of Corporate governance

7. Aupam Sharma And Ravi Kiran, Corporate Social Responsibility; Driving force and Challenges,

International journal of business research and development, Vol. 2, No.1. Pp. 18-27 (2013)

8. Nitish Kumar, Corporate Social Responsibility; An Analysis of impact and Challenges in India,

Abhinav International monthly referred journal of research and management and technology, Vol.3,

issue-5, May 2014.

9. www.pwc.in

10.http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/index_

en.htm

11.http://www.wbcsd.org/work-program/business-role/previous-work/corporate-social-responsibility.

aspx

12.http://www.unido.org/what-we-do/trade/csr/what-is-csr.html#pp1[g1]/0/

13.http://www.recindia.nic.in/download/DPE_Guide-lines_CSR_Sust.pdf


A Comparative Study of Financial Performance of BSE & NSE * Dr. A.R. Chougule

** Dr. A.K. Khamborkar

Introduction

The Stock index is a barometer of nation’s economic health as market prices reflect expectation about the

economy’s performance. There are two most prominent stock exchanges out of 23 stock exchanges in

India. One of them is Bombay Stock Exchange (BSE Limited), ruling on Indian economy over a century.

The second prominent stock exchange is National Stock Exchange of India Limited which has just

completed two decades but gives really very tough competition to BSE. Both are world ranker in terms of

number transactions, trading volume, market capitalization, number of listed companies. The indices of

BSE and NSE reflect the overall market sentiments, i.e. both SENSEX and NIFTY have shown up

pattern when economy was good, both slowed down when there was a depression. Therefore, both the

indices are referred as benchmark indices of the Indian Economy.

Profile of BSE and NSE

Bombay stock exchange ( BSE) Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia. BSE

was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in

Asia, even older than the Tokyo Stock Exchange, which was established in 1878.It got Government of

India's recognition as a stock exchange in 1956 under Securities Contracts (Regulation) Act, 1956. At the

time of its origin it was an Association of Persons (AOP) but now it has been transformed to a corporate

and demutualised entity. BSE is spread all over India and is present in 417 towns and cities. The total

number of companies listed in BSE is around 5,294 (as per December, 2013).BSE is one of Asia’s fastest

stock exchanges, with a speed of 200 microseconds and one of India’s leading exchange groups.Over the

past 139 years, BSE has facilitated the growth of the Indian corporate sector by providing an efficient

capital-raising platform.The companies listed on BSE Ltd. command a total market capitalization of USD

1.51 Trillion as of May 2014. It is also one of the world’s leading exchanges (3rd largest in March 2014)

for Index options trading (Source: World Federation of Exchanges).BSE is the first exchange in India and

the second in the world to obtain an ISO 9001:2000 certification and the Information Security

Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT) 1.

* Assistant Professor; Department of Economics, Sydenham College, “B” Road, Churchagte, Mumbai,

E-mail : [email protected], Contact no.9987881030.

** Assistant Professor; Department. of Statistics, Sydenham College, Mumbai, E-mail ID :

[email protected]. Contact no. 7208069001.


Abstract

The Stock index is a barometer of nation’s economic health as market prices reflect expectation about

the economy’s performance. There are two most prominent stock exchanges out of 23 stock exchanges

in India. One of them is Bombay Stock Exchange (BSE Limited), ruling on Indian economy over a

century. The second prominent stock exchange is National Stock Exchange of India Limited which has

just completed two decades but gives really very tough competition to BSE. Both are world ranker in

terms of number transactions, trading volume, market capitalization, number of listed companies. The

indices of BSE and NSE reflect the overall market sentiments, i.e. both SENSEX and NIFTY have

shown up pattern when economy was good, both slowed down when there was a depression. In this

paper an attempt has been made to compare financial performance of these two prominent stock

exchanges.

Keywords: Ratio Analysis, Market Capitalization, Nifty, Sensex.



National stock exchange (NSE)

NSE was started by a group of leading Indian financial institutions at the order of the Government of

India to bring transparency to the Indian market, and has a diversified shareholding comprising domestic

and global investors. It was in year 1992 that the National stock Exchange was for the first time

incorporated in India. It was not regarded as a stock exchange at once. Rather, the national Stock

exchange was incorporated as a tax paying company and had got the recognition of a stock exchange only

in year 1993 the recognition was given under the provisions of the Securities Contracts (Regulation) Act,

1956.

National Stock Exchange of India Limited (NSE) is a nationwide, electronic exchange offering

investors trading facility in a variety of financial instruments. The National Stock Exchange (NSE) is

India's leading stock exchange covering various cities and towns across the country. NSE was set up by

leading institutions to provide a modern, fully automated screen-based trading system with national

reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market

integrity. The NSE provides a modern, fully automated screen-based trading system, with over two lakh

trading terminals. This enables anyone in any part of the country to trade on shares listed in the NSE.

NIFTY (NSE Index or the Nifty Index), is the index of the performance of the 50 largest & most

profitable, popularcompanies listed in the index. NSE uses satellite communication expertise to bind

trading of over 400 Indian cities. The exchange regulates transactions of around ‘1 million’ on a daily

basis. It is one of the biggest VSAT incorporated stock exchange across the world. About 8,500

customers are involved with online trading business on NSE2.

Review of literature

BansiRajnikant Shah (2012)3

Study concluded that the financial position of BSE and NSE from 2000-’01 to 2009-’10 is quite

satisfactory. In most of the cases the trends are more stable in BSE than NSE. In BSE and NSE both most

of the items of balance sheet and profit and loss account show favourable trends. If any negative sign was

there it was soon recovered. There are fluctuations in the amounts of Net Current Assets and from Total

Income, Profit after Tax but most of them are favourable in BSE and NSE both. Most important thing to

be noticed is that in not a single year of study BSE or NSE registered any loss in terms of Profit before

Tax of Profit after Tax.

DakshaPratapsin h Chauhan(2013)4

Concluded that BSE and NSE are the icons of Indian capital market. BSE is the icon of stability,

consistent and constant growth in terms of financial performance while NSE is the icon of rapid growth

and taking a lead in implementing innovations. NSE was incorporated only before twenty years and today

it has overtaken the BSE which ruled monopolistically on Indian capital market over a century. This

shows the efficiency and effectiveness of the performance of the management of NSE. BSE and NSE are

not rivals, both of them are the pillars of Indian economy. Both must be try to be complimentary to each

other. If both will go hand in hand than it will result in rapid growth and upliftment of the nation.

EktaArora(2012)5

Said that to ensure transferability of securities with speed, accuracy and security, the Depositories Act

was passed in 1996, Whichprovided for theestablishment of securities depositories and allowed securities

to be dematerialized. Following the legislation, two depositories (NSDLand CDSL) have so far been

established. Further,thecompulsorydematerializationof shares for trading purpose has been introduced in

a phased manner with the aim of synchronizing thesettlement of trade and transfer of securities

irrespective of geographical locations,and eliminating the ills associated with paperbased securities

systemsuch as delay in transfer, bad delivery, theft and forgery. Although the process of compulsory

dematerialization is nearing completion, its full benefits have not been reapedbecause of slow progress of

rolling in introducing rolling settlement.


Rouf Ahmad MirandArshadNabiWani( 2012)

The returns offered by Sensex and BSE exhibited a fluctuating pattern. But the average return for the

given period is positive. This transcends a warm message to the investors to hold the investment for a

longer period of time. The CAGR of Sensex is slightly more than Nifty indicating a better index for

investment purposes. The Sensex and Nifty movements almost show a similar trend. This is evident from

the Pearson’s coefficient of Correlation (r=-995), almost a perfect one. The indices reflect the overall

market sentiments and are hereby called as benchmark indices of Indian Economy.

Objectives of the study

1. To study financial performance of BSE

2. To study financial performance of NSE

3. To compare financial performance of BSE & NSE

Research methodology

Present research is based on secondary data. To study the financial performance of NSE & BSE,

secondary data is collected through, annual reports of both NSE & BSE from 2009 to 2014. The collected

data is presented in tabular form. To study the financial performance of NSE & BSE, ratio analysis is

used.

Different ratios

In order to ascertain the financial performance of bothBSE &NSE, some ratios are used.Analysis of ratios

provides valuable insight into specific strengths and weaknesses of a company's financial situation. Some

of the ratios are as follows:

a) Return on Capital Employed (ROCE) =Operating Profit

Capital employed× 100

b) Working Capital = Current Assets − Current Liabilites

c) Current Ratio = Current Assets

Current Liabilites

d) Return on Networth (RONW) =Net Profit after Tax

Networth× 100

e) Networth per share =Networth

No.of equity sahres

Comparative study financial performance of BSE & NSE:

The above table depicts that in the year 2009-10, NSE’s ROCE is more than thrice of BSE’s ROCE.

Also, till 2010-11, ROCE is higher in NSE than BSE which means that NSE is applying its capital

efficiently and generating better shareholder value than BSE .But in the year, 2011-12,ROCE is higher in

BSE than NSE and in the consequent years i.e. 2012-13 &2013-14,again ROCE of NSE is higher than

BSE. Therefore, on an average ROCE of NSE is higher than BSE, which depicts efficient utilization of

funds.


Figure 1. Comparison of Return on Capital Employed (ROCE) of NSE & BSE

Year ROCE [BSE] (%) ROCE [NSE] (%)

2009-10 10.44 33.46

2010-11 10.76 17.79

2011-12 14.80 10.67

2012-13 11.78 13.04

2013-14 10.71 13.90

Average 11.70 17.77

Source: Data compiled from the Annual Report of BSE& NSE

The above table shows that as Working capital of NSE is greater than BSE, we can say that current assets

of NSE are greater than that of BSE. Also, NSE is having more working capital than BSE in order to

carry its day to day operations.

From the above table no.3 ,it is clear that in the initial two years, Current ratio of NSE is far more than

BSE and far more than the ideal ratio(2:1) which means that NSE is utilizing its funds ineffectively in

that period. But in the subsequent years, its current ratio is near to the ideal ratio (2:1), hence NSE is

coming on the right track. Also in the year, 2009-10, current ratio of BSE is very low, but in the

subsequent years its current ratio is almost near to the ideal ratio (2:1), it is concluded that BSE is on the

track of being a successful enterprise. On an average, it current ratio of BSE is near to the ideal ratio (2:1)

in comparison to NS

The above table indicates that Net worth per share of BSE as well as NSE is increasing which is a clear

indication that both the companies has reduced its liabilities and are successful in raising net worth of the

company per share. On an average Net Worth per share of NSE is higher than BSE which clearly shows

that NSE’s worth per share is more than BSE.


Figure 2. Comparison of Working Capital of NSE & BSE

Year

Working Capital [BSE]

(Rs. in lakh)

Working Capital

[NSE] (Rs. in lakh)

2009-10 22865 268822

2010-11 54014 309012

2011-12 161626 435948

2012-13 193869 499091

2013-14 119836 399261


Figure 3. Comparison of Current Ratio of NSE & BSE

Year Current Ratio [BSE] Current Ratio [NSE]

2009-10 1.24:1 6.55:1

2010-11 1.52:1 6.59:1

2011-12 2.27:1 2.55:1

2012-13 2.61:1 2.64:1

2013-14 1.83:1 1.67:1

Average 1.89:1 4:1


Figure 4. Comparison of Net Worth per share of NSE & BSE

Year Net Worth per share [BSE] Net Worth per share [NSE]

2009-10 189.102 539.169

2010-11 205.494 659.644

2011-12 215.480 1067.209

2012-13 220.805 1205.573

2013-14 228.940 1233.421

Average 211.964 941.003


The RONW of both NSE & BSE are decreasing which indicates that return on the investment made by

shareholders is also decreasing. Also, RONW of BSE is less than 10% and showing a downward trend

which is an indicator that value of shareholders fund is decreasing. Moreover, RONW of NSE is very

high in the first two years, but in the subsequent years RONW of NSE is moving in right dimension

which indicates that the company is spending wisely. On an average, RONW of NSE is better than BSE,

therefore shareholder’s money is utilized well in NSE than BSE.

Conclusion

Ratios BSE(Average) NSE(Average)

ROCE (%) 11.70 17.77

Current Ratio 1.89:1 4:1

RONW (%) 8.73 19.53

Net Worth per share 211.964 941.003

After analyzing the financial performance of NSE & BSE with the help of ratio analysis technique, it can

be concluded that in terms of Return on Capital Employed (ROCE), NSE is better than BSE. On the basis

of Current ratio, BSE is better than NSE. In case of Return on Net Worth, NSE is again better than BSE

with higher percentage. At last but not the least, NSE also possesses high Net Worth per share than BSE.

Therefore, overall performance of NSE is better than BSE.


Figure 5 Comparison of Return on Net Worth of NSE & BSE

Year RONW [BSE] (%) RONW [NSE] (%)

2009-10 10.98 25.30

2010-11 10.91 21.48

2011-12 9.21 18.48

2012-13 5.84 15.52

2013-14 6.73 16.90

Average 8.73 19.53


References

1. BSE: Stock Exchange Reviews

2. Indian Securities Market – A Review (ISMR), Vol. XII, 2013.

3. Shah, Bansi Rajnikant (2012):A Comparative Study of Bombay Stock

Exchange (BSE) and National Stock Exchange (NSE),IJSR - International Journal Of Scientific

Research, Volume: 1 | Issue: 7 | Dec 2012 • ISSN No 2277 – 8179, pp26-31

4. Chauhan, Daksha Pratapsinh (2013): Performances of stock exchanges in India, International

Journal of Conceptions on Management and Social Sciences Vol. 1, Issue. 1, Dec’ 2013; ISSN:

2357 – 2787 pp40-44

5. Arora, Ekta (2012): A study of performance of BSE and NSE in India,international journal of

social science & interdisciplinary, research , vol.1April 2012, ISSN no22773630 pp90-95

6. Ahmad, Rouf & NabiWani, MirandArshad (2012):Benchmark Indices Of Indian Economy: A

Comparative Analysis Of Sensex And Nifty,ABHINAV,VOLUME NO.2, ISSUE NO.6 ISSN

2277-1166, pp 9-15

7. QueenslyJayanthi, B.J. (2010): A Study on NSE of India, Serial Publication, New Delhi

8. www.bseindia.com

9. www.nseindia.com


Innovative Practices and Application in Marketing Management * Pashmeen Kaur Anand

Introduction

Marketing managers today have a difficult challenge--how to improve their products to market

characterized by hyper competition and ever more detailed segmentation. Today customers are becoming

immune to all the tools of sales promotion and perceive homogenous products. In this competitive

environment, business enterprise should to combine several concepts of products into one offer, which is

wanted and desired market. This can be achieved by applying innovations in marketing, allowing to the

Business be succeed in a competitive competition with other business enterprises.

An important prerequisite for successful innovation is to establish a suitable environment. Marketing

managers must properly understand the need to innovate and get it into a successful marketing

management. Important role in this process is management. Innovation plays an important role,

especially in today's period marked by the action of the global economic crisis. Just those business

enterprises that invest in the innovation will be best prepared when crisis period finish. Also they will

receive favourable starting position in the struggle for redistribution of markets

Objectives of the Study

The main aim of the paper is to acquire new knowledge in the field of innovation management focusing

on the area of marketing, highlighting the innovative practices of marketing, focusing on human capital

practices that drive innovation, showcase the effects of innovation in different marketing areas.

____________________________________________________________________________________

* Assistant Professor; Anna Leela College of Commerce and Economics, Buntar Bhavan Marg,

Kurla (E), Mumbai-24. E-mail: [email protected], Contact no.9920942231.


Abstract

As said organization will be doomed if it does not produce managerial innovations. The successes of

many companies in today’s environment are basically due to their innovative approaches. Today, for

survival of any organization innovation is a key factor. No wonder, many companies who have

remained at the top always encouraged innovation. Many companies should have progressed well in the

past and but not doing well because of lack of innovative approach in marketing. It is very easy to run

when the conditions are favorable. However, real test comes when there is competition. The innovative

approach has helped many companies to improve their standing. It is now needless to say that

innovation plays the leadership role in all functional disciplines of the business and marketing being the

most rigorous and instrumental in creating the success stories of market penetration and expansion

requires innovative measures and continuous research more persistently than other business functions.

Following the globalization and its worldwide business trends most of the large corporations and

aspiring small as well as medium companies are driving innovative marketing strategies and initiatives

in the global scale to obtain better stability and reach in market. Most innovative practices of marketing

are well known to create penetration and depth in customer reach that have remained practically

impossible for many successive ages. The objective of this paper is to acquire new knowledge in the

field of innovation management focusing on the area of marketing, highlighting the innovative

practices, focusing on human capital practices that drive innovation, showcase the effects of innovation

in different marketing areas. The data has been collected from secondary source.

Keywords - innovation, innovative practices, human capital, marketing, effects of innovation


Literature Review

The article reviews the literature relevant to innovation in marketing, which has flourished since the

1990s. The definition of innovation has been discussed and to what extent the innovative practices in

marketing have influenced the conceptualization of innovation in marketing. Then, based on the literature

review, a conceptual framework for innovation in marketing sector is developed, which highlights the

effect of innovation in different market area. This review highlights that innovation means more than just

new products or services focusing on best human capital practices that drive innovation. For years there

has been a fierce debate on the key elements of the correct marketing strategy to win in the Customer

Age. The debates revolved around three solutions: Automate, Innovate, and Collaborate. Over the years,

innovation has taken the lead as the key solution.

Methodology of the Study

The data and information has been collected from secondary sources like business newspapers, journals,

reports, text books and websites.

Limitations

The paper is made on the basis of secondary data alone.

Meaning

"Innovation is: production or adoption, assimilation, and exploitation of a value-added novelty in

economic and social spheres; renewal and enlargement of products, services, and markets; development

of new methods of production; and establishment of new management systems. It is both a process and

an outcome." by Crossan and Apaydin

Innovation management is the management of innovation processes. It refers both to product and

organizational innovation. Innovation management includes a set of tools that allow managers and

engineers to cooperate with a common understanding of processes and goals.

Marketing Innovation is defined as the plan to incorporate the advances in marketing science, technology

or engineering to increase the effectiveness and efficiency of marketing, to gain competitive advantage

and increase shareholder value.

Human capital practices that drive innovation

Innovation means more than just new products or services. It means improving the process of creating

those products, or selling them, or experiencing them, or even improving the ways we manage the people

who do all of the above. Some of the best human capital practices that drive innovation:

Use Technology to Collaborate and Share Knowledge. Collaboration drives creativity and

innovation, and social media and conferencing technologies can help bring people together (or

virtually together) more often for that collaboration.

Promote Innovation as an Organizational Value. The most innovative companies didn’t just luck

into hiring creative people; they placed creative and even average people into creative cultures.

Include Innovation as a Leadership Development Competency. Part of building an innovative

culture is having leaders who value creativity, and are creative themselves.

Tie Compensation to Innovation. The jury is still deliberating the influence of incentives on

creativity, but their use in organizations sends a signal that innovation is valued. That signal is an

important part of culture building.

Develop an “Idea-finding” Program. As we’ve discussed elsewhere, it’s not enough to have great

ideas. Innovative companies build a system that taps into the collective knowledge of everyone

and lets everyone promote good ideas.

Fund Outside Projects. It might sound counterintuitive to allow funding to develop projects that

are technically outside your organization, but as market boundaries continue to blur, strategic

innovation partnerships become even more important.

Train for Creativity. Creativity isn’t innate. Creative thinking skills can be developed and the

most innovative companies fund training programs to develop them.

Create a Review Process for Innovative Ideas. Even the best ideas don’t come fully formed.

There is a process to refining, developing and identifying the ideas with the most market potential.

Creating a review process allows this to happen and signals that innovative ideas are valued.


Recruit for Creative Talent. Especially at the undergraduate and graduate levels. The war for

talent is slowing shifting its focus from quantitative minds to creative ones.

Reward Innovation with Engaging Work. Research demonstrates that companies that are able to

identify their most creative employees can enhance their creative ability by providing them

autonomy to work on projects that are naturally interesting to them.

Effects of innovation in different marketing areas

Marketers in many industries know that innovation through new

product development is vital to remain competitive. But product decisions are not the only areas affected

by new developments. Below is a sampling of how innovation has affected different marketing areas:

Marketing Area Effect of Innovation

Marketing Research Creates new ways to conduct research including

more sophisticated methods for monitoring and

tracking customer behavior and analyzing data.

Targeting Markets Allows for extreme target marketing where

marketing-to-person is replacing mass marketing.

For customer service, technology makes it easier to

manage relationships and allows for rapid response

to customer’s needs.

Product Creates new digital products/services. Incorporation

of innovation into existing product/service

enhances value by offering improved quality,

features & reliability at a lower price

Promotion New techniques allow better matching of promotion

to customer activity and individualized promotion.

Makes it easier for sellers to offer product

suggestions and promotional tie-ins.

Distribution Creates new channels for distribution

and transaction (e.g., electronic commerce) that

include making it easier for buyers to place

orders. Allows more control over inventory

management and closer monitoring of product

shipment

Pricing Enables the use of dynamic pricing methods

The above table details the derivation of effects of innovation in different marketing areas.

Innovative and creative practices of marketing

Companies are looking for ways to get an extra edge, and one of the chief ways is through marketing.

Today’s marketing professionals work to establish traditional marketing goals like converting consumers

from one brand to another, then creating customer loyalty with that new brand. They do it with innovative

solutions that embrace changing technology and an evolving understanding of how customers shop.

Buzz Marketing

Buzz marketing is creating a personal connection with each consumer instead of a larger, general

campaign to a particular demographic. It works to convince consumers the company takes a

personal interest in them. Buzz marketing is not new in itself, but the techniques marketing

professionals are now using are certainly innovative. For instance, today's marketing professional

might reach out to consumers through a blog, chat room or even instant messaging.

Presence Marketing

Presence marketing seeks to make a company as widely known as possible. Just as politicians


know constituents are more likely to vote for the better-known candidate, marketing professionals

also know consumers are more likely to purchase from a better-known company. Marketers seek

to have consumers conclude, "If everyone likes/buys/enjoys this, it must be pretty good.” With the

rise of social networking outlets, it is even easier to create extensive presence marketing. A

company with a blog and on Facebook and Twitter has created presence and provided a familiar

name for consumers to look for when they shop.

Astroturfing

Named after the artificial grass, Astroturfing is a designed marketing plan disguised to look

spontaneous, like a grass-roots effort. It is devised to reach consumers who would automatically

shun a more obvious campaign. As with presence marketing, Astroturfing is finding a place in the

world of social networking. Companies now pay bloggers to make “random” comments on blogs

or other websites pitching company products.

Experiential Marketing

Experiential marketing allows consumers to experience an item for themselves. The hope is that

experiencing the product will cause them to buy. This is why some car dealerships allow

prospective buyers to take a vehicle home for 24 hours. It is why other companies provide trial-

size promotional items. For example, a detergent company providing samples is using experiential

marketing.

Wild Posting

Wild Posting advertising is an inexpensive form of advertising with high degree of gained

exposure when postings are placed in large number on several places in order to attract maximum

attention. Posters are often adhered to construction site barricades, building facades, in alleyways,

and on assorted buildings.

Alternative Marketing

Alternative marketing tends to focus on more inexpensive, but still significant ways of getting

company information to the public. These range from bumper stickers with clever comments that

also list your company's information, to fliers that baggers can include with your grocery buys at

checkout, to place mats you donated to local restaurants.

Presume marketing

Presume marketing is based on thought that people need to feel the presence of the product. The

company use presume marketing for increasing exposure and recognition of the product on public

places, as it is very often achieved during festivals, TV shows or by product placement in movies.

Presume marketing may be applied on Internet by placing the visuals or notes about the product

on social networks like Twitter, Facebook and others.

Marketing through Web(Online) The present age is distinctly marked by the dominance of internet, web based services, mobile

telephony and related technological as well as virtual world of communication. Naturally the

practice of marketing also had to follow this and as a result the new world of web based

marketing opened the door for all the small, medium and large business companies across the

world. With the practice of web based marketing now a small or medium sized company can

compete with a large multinational company in the marketing of services and products and web

based marketing as one of the most innovative practices of marketing makes a wide array of

innovations possible in different segments of products and services.

Effective Promotion through Social Media Marketing(SMM) Social media sites in the present world of information technology users are most popular and the

world population is increasingly becoming dependent on the sharing platforms of social media

sites in various regards. Naturally large business companies have started to target these sites as the

mass platform for the purpose of their brand promotion and various functions of marketing.

Effective promotion through social media sites is considered to be one of the most innovative

practices of marketing potential of which to target global audience is huge.

Marketing through new technological application In the recent years we have witnessed number of mobility brands to come up with completely new

range of software and product applications that paved the way for a new attitude towards


http://www.twitter.com/

http://www.facebook.com/

marketing initiatives. Today it is a well-known fact that research in the user friendliness of the

interface, operating platforms and content applications paved the way for the success of many

large companies like Apple, Samsung, etc. This new approach of incorporating technological

innovations into the marketing strategy is one of the most innovative marketing practices in the

present era.

Conclusion

The need for Innovation is a product of such a school of thought. Innovation is the profitable exploitation

of new ideas. It’s a tangible process and the need for an innovate work environment is widely recognised

as being one of the key success factors in gaining competitive advantage in the global market place.

Firms today realize that investing in innovation is crucial to business success. For years there has been a

fierce debate on the key elements of the correct marketing strategy to win in the Customer Age. The

debates revolved around three solutions: Automate, Innovate, and Collaborate. Over the years, innovation

has taken the lead as the key solution. Productive ad accurate Innovation, enables a firm to be proactive

in anticipating emerging consumer trends, and thus address them via effective marketing strategies. It

allows it to stay ahead of the pack, the fundamental difference between success and failure. This holds

particular significance today, the market place of the 21st century, which is more exciting and

unpredictable than ever before.

References

1) Robert B Tucker, Driving growth through innovation, Berrett-Koehler Publishers

2) Bolko von Oetinger (2004). “Form idea to innovation: making creativity real”, Journal of

business strategy, Vol. 25, No.5, pp. 35-41.

3) Frederic Tomala , Olivier Senechal. (2004). “Innovation management: a synthesis of academic

and industrial points of view”, International Journal of Project Management, Vol. 22, pp. 281–

287

4) Ruud Smits (2002). “Innovation studies in the 21st century: Questions from a user’s

perspective” Technological Forecasting & Social Change, Vol. 69, pp. 861–883.

5) ADAMS, R., Bessant, J., Phelps, R. (2006). Innovation management measurement: A review.

International Journal of Management Reviews 8 (1), 21–47.

6) MARQUIS, D. (1969). The Anatomy of Succesful Innovations. Innovation Magazine 1(7),

28-37.


Innovative Techniques: Key in Acquainting English Language * Vrushali V. Bhosale-Kaneri

Introduction English today is a language of opportunity. Officially English has a status of assistant language, but in

fact English has become the most prominent language in India.

English is the chief language in the Indian education system today. All the prestigious schools and

colleges use English as their medium of instruction. Today, careers in the field of science and technology,

business and commerce require a good knowledge of English. Most of the works in the field of space,

nuclear technology, medicine etc. are available only in English. The vocabulary and terminology used in

these are available in English. Therefore, English has become a passport of getting a good job not only in

India but also abroad in almost all fields. With the growing importance of computers in every field, the

English language has received a further boost.

The researcher has observed that, urban students, though they have been part of urbanized society lack in

English language. In this paper, the researcher has tried to show the problems in learning English

language among the urban students studied through vernacular medium till 10th standard.

Objective:

1. Understanding the problems in learning English language among urban students.

2. To recommend innovative teaching pedagogies to teachers.

Methodology

A structured questionnaire was used to collect data from the defined prospects. The researcher visited

selected colleges and collected first hand data. The data was then tabulated and analysed using

computers. Two questionnaires were used viz. one for teachers and one for students. The researcher used

questionnaire, interview, personal interaction with students and observation as methods while collecting

the primary data.

Analysis The responses from the teachers generated the following analysis:

1) Inferiority complex: Students are subjects of inferior complex. They feel inferior in front of

students who can communicate in English. Thy remain aloof in the class. They do not mix up

with other students. They form their own group, where they communicate with each other in their

mother tongue.

2) Fear: Fear in the mind of students about English language is the main reason for their non-

acquisition of language. Students havepsychological barriers like fear, preconceived notions about

the language and the mental block which stops them to accept new thing and stops them from

changing their views about English language.

3) Grammar: Students have learnt grammar in school. They are aware of the basic rules, but when

it comes to apply them, they make mistakes.


Abstract

In today’s globalised world, English has become an important tool to communicate with people around

you. Be any field, Science, Engineering, Pharmacy, Commerce or Humanities, knowledge of English is

essential.

This paper will try to explore the current situation of English language among the college students in

urban area who have completed their secondary education through Marathi medium schools. The

researcher has given an attempt in identifying the problems of speaking English among these students.

The researcher has proposed certain teaching methodologies as recommendations for teachers.

Keywords: Innovation, teaching pedagogies

4) Division among students in the class who speaks English and those who don’t: If the teacher

speaks in English, students think that the teacher is unapproachable and they prefer staying away

from such teacher. The students prefer teachers who talks with students in mother tongue, and the

one who will spoon feed them everything. Teachers cannot opt for bilingual method, as the

method of instruction in colleges is English. Students among the class gets divided among the

English speakers and non-speakers.

Recommendations for teachers

“Do not train a child to learn by force or harshness; but direct them to it by what amuses their

minds.”- Pluto.

a. Remedial coaching – Teachers should take a survey of students in college. They should try to

understand what the problems of the students are. Accordingly he/she should design own teaching

plan. The students can be divided into batches as per their intelligence level. The batch size

should of maximum 25 students. As per the availability of the class rooms within the college time,

the teacher can conduct remedial lecture for these students. UGC provides money to colleges to

conduct remedial lectures, so the teacher can earn extra remuneration and these lectures can be

kept free of cost for the students. In this way individual attention can be provided to the student

and he/she can be helped to overcome the problems.

b. Vocabulary building:

i. Reading daily newspaper – Newspapers are available in the college library.

ii. Reading simple story books – with the help of the college library.

iii. Games:

1. Give one word, write the spelling of it and then from each letter in that word, create new words.

Eg. Apple : Air, Parrot, Pen, Lion, Ear

2. Spellings antakshari.

3. Context game: Teacher will give one word and students will write down all the words related to

that particular context. Eg: Railway, related words like station, train, departure, arrival, ticket,

porter, engine, compartment, seat number, reservation etc.

4. Playing games: eg: each student can bring 5 picture cuttings from any news paper. Mix those

pictures. Then let each student pick up any 5 pictures other than which he/she has brought. Tell

the student to make a story out of these pictures. This exercise will help to see the student’s

creativity, imagination, innovation and it will also help to increase his/her vocabulary and

confidence.

c. Read any news item. Underline the word which is not understood. Refer to the dictionary.

Understand meaning of the word. Understand the core news and write it in one’s own

words.

d. The above mentioned exercise can be repeated when listening news.

e. College can purchase dictionaries like Marathi to English, English to English dictionary,

which can in turn be used by the students. If possible college can distribute dictionaries to

students who are academically and economically backward.

f. The teachers can also find out some innovative methods to make the students understand

grammar rules and applications of the same. The teacher can opt for some interactive

sessions where students will participate. This will help to trim down the fear in their mind

about the language and help to boost the confidence.

g. Even the teachers can pick up best students can sponsor his/her studies.

ICT in Education

Every child has a right to education whether the child resides in urban or rural area. But if one observes

closely there is great disparity between the way education is provided at urban and rural area. Most of the

teachers (and coupled by the parents in home) impose learning processes on child. The teachers/parents

themselves are badly taught and so they viciously follow the cycle. Learning is a joy. The children should


feel that it is like a roller-caster ride. To get to that level, children should be taught how to learn. For

example, they should be told as many as stories. Exercise to the kids on this would be to tell many more

stories to other children. Children must be formed into a group of 5-10 and then teacher must guide each

group. This is basically a process of peer review. They can source the new stories from parents,

neighbourhood, friends, relatives etc. And in fact, children are natural at creating their own stories. Songs

and dance are very natural to them and TV, mobiles, competitions, etc can help in this regard.

The researchers found the following reasons might be the cause behind it:

1. Qualified Teachers’ unwillingness to take up job in government run schools.

2. Poor infrastructure facilities at school.

3. Unavailability of study material or proper teaching aids.

4. Government policies related to education.

5. Poor pay package for the teachers which fail to attract talented people towards teaching field.

6. Instead of teaching, the teachers are involved in lot may other activities like census work, cooking

meal for children etc. which might discourage people to take up teaching job.

7. Lack of enthusiasm and creativity among teacher which reflects in students.

In this situation, if ICT is introduced then it would be a welcome change.

In India, the education system is basically divided into three levels. First is primary level, second

secondary level and third higher level. At all these three levels use of ICT can be made to impart quality

education. Benefits of ICT in education sector at government run vernacular medium schools are as

follows:

1) It will help to reduce the school drop outs rate as students will feel interested in coming to school.

2) It will attract more number of students, as the students will get to learn something new every day.

3) Anytime, anywhere: The ICT based education is available anytime and anywhere the student will

be able to do their studies.

4) Access to remote learning resources.

5) ICTs help prepare individuals for the workplace.

6) It helps to motivate students to learn.

7) It helps to facilitate the acquisition of basic skills.

8) It will help to improve employability of these students.

Government need to take up this cause and work to improve the condition of rural education. It should

ensure that the schemes related to education are reaching to the root level. At the same time, proper

infrastructure should be provided. Training programs for teachers can be organized. These training

programs will help to get the fear factor out of teachers’ mind; at the same time will make them more

confident to handle new technology.

Conclusion

Government of India has announced 2010-2020 as decade of innovation. Reasoning and critical thinking

are two major factors responsible for innovation. To lay a strong foundation among children for

innovative thinking use of ICT and other innovative methods can be made right from the primary level.

The use of ICT can move in upward direction as the child moves from one level to higher level in

education system.

“The principle goal of education is to create men who are capable of doing new things, not simply of

repeating what other generations have done – men who are creative, inventive and discoverers.” — Jean

Piaget


Foreign Direct Investment and Retail sector in India * Raj A. Soshte

Introduction

In just 10 years after china permitted FDI in the retail sector, the share of organized retail has grown from

10 per cent to 20 per cent. Current norms allow foreign retailers to set up in India via the franchise route,

as has been done by the Wal-mart Marks & Spencer and Mango, Retailing is the largest private industry

in India and second largest employer after agriculture. The sector contributes to around 10% of GDP and

6- 7% of employment. India has the highest retail outlet density in the world retailing provides a crucial

link between producer and consumer. Foreign Direct Investment (FDI) is defined as a long term capital

inflow into a country other than aid portfolio investment or a repayable debt. It is a long term investment

in equity by an entity i.e. outside the host country. India has been portrayed as an important investments

destination for the global retail chains. This is evident from the fact that India has received request from

many important trading partners. Such us Japan, China, Eu, Singapore, Brazil and Korea, in the DOHA

round in WTO negotiations to allow FDI in retailing. With the increase In cost of the labour in their home

market, many foreign retailer and manufactures are Sourcing products from India, with its cheap

availability of labour and raw materials has its position as a sourcing hub and many international, players

such as Wall Mart, Pottery Born, Levis, Tommy, are sourcing product such as garments and textiles,

gems and jewellery, households items, leather products, from India., Some of the items opened up retail

outlets, while others or have get up franchising operations

Indian Retail Sector- an overview

Retail is India’s one of the largest sectors of economy accounting for ten percent of GDP and eight

percent of total employment. India is the country having the most unorganized retail market. Indian retail

industry can be broadly divided into organized and unorganized sector. Convenience stores, mom and

pop stores, street markets, traditional bazaars can be classified into unorganized sectors. These shops

have low rental and property costs, availability of cheap labor and minimum use of technology. Better

proximity to residential location, convenience and personalized services are bright features of this sector.

At the same time, space constraints, limited assortments, poor logistic management, erratic supply chains,

lack of cold storage facilities, hygiene, poor ambience, ignorance of statutory regulations are some of the

major constraints of small traders in this sector.

Current size of retail industry of India is pegged at Rs.1, 036,000 crores (2006-07) and is growing at five

percent per annum. It has been shedding its conventional garb, thus slowly but steadily paving a way to

the era of organized retailing. Organized retailing is seen as one of the fast paced and dynamic sectors of

India’s businesses, offering incredible opportunities of growth. Organized retailing contributes to five

percent of total retailing at present but it is growing at thirty percent per annum. According to A. T.

Kearney, global management consultant, India’s organized retail industry will jump to $ twenty two

billion in 2010 from $ 4.2 billion in 2001. Retail growth in coming five years is expected to be stronger

than GDP growth of the country.

Assistant professor, NSS College of Com. & Eco. Tardeo, Mumbai-400 034


Abstract

India is in the midst of a retail boom. The sector witnessed significant transformation in the past decade

from small-unorganized family-owned retail formats to organized retailing. Indian business houses and

manufacturers are setting up retail formats while real estate companies and venture capitalist are

investing in retail infrastructure. Many international brands have entered the market. The Concept of

Foreign Direct Investment is now a part of India’s economic future but the term remains vague to many,

despite the profound effects on the economy India has encouraged Foreign Direct Investment (F.D.I.)

since its policy of liberalization adopted since 1991. India as a developing country is always striving to

get maximum amount of such investment and often comparisons are made with China who gets more

FDI than India. The paper explained FDI policy, challenges, towards retail sector in India

FDI and Indian Retail Sector An important aspect of the current economic scenario in India is the emergence of organized retail. There

has been considerable growth in organized retailing business in recent years and it is poised for much

faster growth in the future. Major industrial houses have entered this area and have announced very

ambitious future expansion plans. Transnational corporations are also seeking to come to India and set up

retail chains in collaboration with big Indian companies. However, opinions are divided on the impact of

the growth of organized retail in the country. The important role of FDI in supplementing domestic

resources and in ensuring employment generation in the development of an economy is unquestionable.

(Retail industry report (2006), Dinlersoz, (1999), and Rao (2006)). At present, India's retail market is

largely unorganized, with an estimated 15 million tiny outlets catering to the individual needs and

employing the second largest number of people after agriculture. The organized retail giants targeting the

300 million in the "middle classes" and the 200 million in the rural areas, who form a consumer market

worth more than $100 billion. Even though India has the highest number of per capita outlets- 6-per1000

populations; it has the lowest retail power. The retail outlets are dominated by grocery in both the urban

and rural areas and this represents 71% of the retail market in the rural market.

Organized retailing should be given policy support and time by the government to establish itself firmly.

Investments into the Indian retail sector are estimated at Rs. 20,000 crore (Rs. 200 billion) by 2010.

According to Sreejith and Raj (2007) the organized retail segment is growing at the rate of 25-30 per cent

per annum, revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24

billion by 2010 and making it among the fastest growing industries in the country. Study conducted by

the Indian Council for Research on International Economic Relations (ICRIER, 2008) shows that

organized retail, contributes only 4.0 % at present in India, while in USA and Taiwan it is about 85% and

81% respectively (see Fig.1), It will grow by 25-30% every year and become Rs.100,000 crore (Rs.1000

billion) by 2010. With the growth of malls, multiplexes and hypermarkets, the consumer is being exposed

to a new kind of shopping experience and services which is quietly and surely redefining her expectations

from shopping. India is having a more than 30% young population and the younger generation, which

was comfortable with the buy--today, pay-later concept would drive the retail boom. Retailing is the

largest private sector industry in the world economy with the global industry size exceeding $6.6 trillion

and a latest survey has projected India as the top destination for retail investors. And the further upsurge

is anticipated in the retail sector as the Government of opened up 51% FDI in single brand retail outlets.

And as the government is in a process to initiate a second phase of reforms, it is cautiously exploring the

avenues for multi-brand segment. The Government is seeking for these options keeping in view the

existing social framework of India and the will ensure that the entry of global retail giants do not displace

the existing employment in the retail business.

Industry experts are sensitive to the point that local markets have an edge over the retail investors in

India as they have unique advantages such as an understanding of local needs and extended service like

home delivery. As the FDI influence on the Indian retail sector sets in, the total size of the retail trade is

expected to grow extensively in the coming years and the consumer segments patronizing the big malls

will create frenzy for organized retailing predicting a growth of 25-30 per cent per annum over the next

decade. Moreover, Indian retail chains would get integrated with global supply chains since FDI will

bring in technology, quality standards and marketing thereby, leading to new economic opportunities and

creating more employment generation.

Rational behind allowing FDI in Indian Retail Sector FDI can be a powerful catalyst to spur competition in the retail industry, due to the current scenario of

low competition and poor productivity.The policy of single-brand retail was adopted to allow Indian

consumers access to foreign brands. Since Indians spend a lot of money shopping abroad, this policy

enables them to spend the same money on the same goods in India. FDI in single-brand retailing was

permitted in 2006, up to 51 per cent of ownership. Between then and May 2010, a total of 94 proposals

have been received. Of these, 57 proposals have been approved. An FDI inflow of US$196.46 million

under the category of single brand retailing was received between April 2006 and September 2010,


http://www.indianground.com/investments/major_investors_realestate.aspx

http://www.indianground.com/investments/major_investors_realestate.aspx

http://www.indianground.com/retail/retail-sector-in-india.aspx

comprising 0.16 per cent of the total FDI inflows during the period. Retail stocks rose by as much as 5%.

Shares of Pantaloon Retail (India) Ltd ended 4.84% up at Rs 441 on the Bombay Stock Exchange. Shares

of Shopper’s Stop Ltd rose 2.02% and Trent Ltd, 3.19%. The exchange’s key index rose 173.04 points, or

0.99%, to 17,614.48. But this is very less as compared to what it would have been had FDI up to 100%

been allowed in India for single brand.

The policy of allowing 100% FDI in single brand retail can benefit both the foreign retailer and the

Indian partner – foreign players get local market knowledge, while Indian companies can access global

best management practices, designs and technological knowhow. By partially opening this sector, the

government was able to reduce the pressure from its trading partners in bilateral/ multilateral negotiations

and could demonstrate India’s intentions in liberalizing this sector in a phased manner.Apart from this, by

allowing FDI in retail trade, India will significantly flourish in terms of quality standards and consumer

expectations, since the inflow of FDI in retail sector is bound to pull up the quality standards and cost-

competitiveness of Indian producers in all the segments. It is therefore obvious that we should not only

permit but encourage FDI in retail trade.

Lastly, it is to be noted that the Indian Council of Research in International Economic Relations

(ICRIER), a premier economic think tank of the country, which was appointed to look into the impact of

BIG capital in the retail sector, has projected the worth of Indian retail sector to reach $496 billion by

2011-12 and ICRIER has also come to conclusion that investment of ‘big’ money (large corporate and

FDI) in the retail sector would in the long run not harm interests of small, traditional, retailers.

In light of the above, it can be safely concluded that allowing healthy FDI in the retail sector would not

only lead to a substantial surge in the country’s GDP and overall economic development, but would inter

alia also help in integrating the Indian retail market with that of the global retail market in addition to

providing not just employment but a better paying employment, which the unorganized sector ( kirana

and other small time retailing shops) have undoubtedly failed to provide to the masses employed in them.

Industrial organizations such as CII, FICCI, US-India Business Council (USIBC), the American Chamber

of Commerce in India, The Retail Association of India (RAI) and Shopping Centers Association of India

(a 44 member association of Indian multi-brand retailers and shopping malls) favor a phased approach

toward liberalizing FDI in multi-brand retailing, and most of them agree with considering a cap of 49-51

per cent to start with.

The international retail players such as Walmart, Carrefour, Metro, IKEA, and TESCO share the same

view and insist on a clear path towards 100 per cent opening up in near future. Large multinational

retailers such as US-based Walmart, Germany’s Metro AG and Woolworths Ltd, the largest Australian

retailer that operates in wholesale cash-and-carry ventures in India, have been demanding liberalization

of FDI rules on multi-brand retail for some time.

Thus, as a matter of fact FDI in the buzzing Indian retail sector should not just be freely allowed but per

contra should be significantly encouraged. Allowing FDI in multi brand retail can bring about Supply

Chain Improvement, Investment in Technology, Manpower and Skill development, Tourism

Development, Greater Sourcing From India, Up gradation in Agriculture, Efficient Small and Medium

Scale Industries, Growth in market size and Benefits to government through greater GDP, tax income and

employment generation.

Conclusion

Though growth march of Indian retail has slowed down due to global recession, the prospects of this

sector are bright. There are several factors that fuel this optimism. Some of them are discussed below.

Changing demographic profile of Indian market is supposed to be favorable to economic growth of India

in 21st century. The theory of demographic dividend projects Indian market as the most productive

market, where in more than 60 percent of population is expected to be economically productive in next


twenty five years. This phenomenon has a potential to translate Indian market into one of the most

vibrant markets in coming years and Indian retail sector is bound to be the natural beneficiary of the

same. Indian market has become matured now in terms of customers’ profile. Urban Indian consumers

are well educated, well travelled and expect to see global standards in Indian markets. With rising levels

of education, IT and communication revolution, plastic card penetration etc, Indian consumers have

become more assertive part of global village today. Another striking feature of Indian economy is

development of rural India. “Bottom of the pyramid” theory has drawn Indian corporate world towards

rural India. Bright prospects of “Shining Bharat” pose optimistic scenario. Rural consumers are

increasingly seen following the footsteps of their urban counterparts and are demanding shopper-tainment

experience on their home turf too. Though present recession has put brakes on the influx of overseas

retailers, saturation in their home markets and structurally changing Indian market cannot keep them

away for a long period. Role of Indian government post globalization has changed from being a controller

towards being a facilitator. User friendly policies of Indian government such as FDI relaxation, tax rebate

etc has created conducive environment for the growth of retail.

References

1. Indian retail report, Images and F& R study, 2006-07, and The Marketing White book, Business

World, 2005.

2. Aggarwal, A., Current issues in Indian retailing, European Retail Digest, Issue 25.

3. Berman B. and Evans, Retail Management, Upper Saddle River, N.J.Prentice Hall,

2001.

4. Dale Gillian, Ban field Graham, Retailing & Distribution: A First Course, U.K.,

Pitman, 1985.

5. Hasty John, Reardon James, Retailing Management, New Delhi, Tata McGraw Hills Companies

.Inc, 1997.

6. Mayer, et al, Retailing: Principals & Practices, New Delhi, Tata McGraw Hills

Companies .Inc, 1982.

7. Foreign Direct Investment-A Study of India and China. By S. Narimha Chary & V Gangadhar. in

Indian Journal of Commerce .Oct-Dec 2006 Edition.

8. FDI in Retail Sector: India by Arpita Mukherjee and Nitisha Patel, Academic Foundation in

association with ICRIER and Department of Consumer Affairs, New Delhi, 2005.

9. FDI in India’s Retail Sector -More Bad than Good?By Mohan Guruswamy, Kamal

Sharma,Jeevan Prakash Mohanty, Thomas J. Korah

10. Impact of Organized Retailing on the Unorganized Sector By Mathew Joseph, Nirupama

Soundararajan, Manisha Gupta& Sanghamitra Sahu May 2008.

11. Foreign Direct Investment and Indian Economic Scenario- By Dr. Ramchandran, N. Kavitha, N.

Krishna Veni in Economic Challenger April- June 2008 Edition.

12. FDI in Retail Trade in India- By Dr. R, Ganesan in Economic Challenger April June 2007

Edition.

13. FDI in India’s Retail sector: Prospects and Hurdles. By Nasir Zameer Qureshi & Mir.M Amin in

Indian Journal of Commerce. Oct-Dec 2007 Edition.

14. FDI in Retailing-A Boon or Bane? By Prof H.Venkateshwarlu and C.V. Rajani in Indian Journal

of Commerce. Jan- March 2007 Edition.


Industrial Waste Management in India

* Rekha Shelar

Introduction Environmental degradation is the major problem associated with rapid industrialisation, urbanisation

and rise in living standards of people. For developing countries, industrialisation was must and still this

activity very much demands to build self-reliant and in uplifting nation's economy. However,

industrialisation on the other hand has also caused serious problems relating to environmental pollution.

Therefore, wastes seem to be a by-product of growth. Countries like India can ill- afford to lose them as

sheer waste. On the other hand, with increasing demand for raw materials for industrial production, the

non-renewable resources are dwindling day-by-day. Therefore, efforts are to be made for controlling

pollution arising out of the disposal of wastes by conversion of these unwanted wastes into utilisable raw

materials for various beneficial uses. The problems relating to disposal of industrial solid waste are

associated with lack of infrastructural facilities and negligence of industries to take proper safeguards.

The large and medium industries located in identified (conforming) industrial areas still have some

arrangements to dispose solid waste. However, the problem persists with small scale industries. In number

of cities and towns, small scale industries find it easy to dispose waste here and there and it makes

difficult for local bodies to collect such waste though it is not their responsibility. In some cities,

industrial, residential and commercial areas are mixed and thus all waste gets intermingled.

It takes a lot of valuable energy and materials to create and manufacture products and the resulting

industrial waste can be difficult to manage. Many cities and countries have put new laws into place to

heavily tax companies that produce excess amounts of waste or create potentially harmful effects on the

air and ecosystem. The extra taxes help to offset the environment damage by going toward environmental

restoration, protection and spreading information to increase knowledge on these issues. People

and companies need to educate themselves about the environment. Smog alerts in many cases result from

not only harmful transportation emissions but also from the output of factories into the air we breathe.

Professor, Smt.MMP Shah Women’s College, Matunga , Mumbai 400019.


Abstract

There is evidence of a social decline and environmental degradation in direct proportion to

technological advances and the industrialization of a nation. Besides, this evidence is getting reiterated

day-by-day, by several environmental and social issues that are being faced in today’s times. The

footprints of urbanization and industrialization have been left on the environment, which are impossible

to be erased, and they have to be learned to be dealt with. Industries and wastes go hand-in-hand; they

are two sides of the same coin. Industrialization is inevitable without the emission of wastes. If it is not

possible to manufacture without wastes, the logical option is to manage these wastes. And this is the

only possible way that the blatant contribution of industrialization on environmental degradation can be

regulated.

Industrial Waste Management is a complex issue, and it involves several nuances and intricacies,

linking an industry, its wastes, and the environment. The ever-increasing need for Industrial Waste

Management has to be recognised by the various industries, and it has to be considered accordingly.

It is also the responsibility of the concerned Government to aid the industries in the process of

Industrial Waste Management. It can do so by framing appropriate waste management policies,

monitoring disposal and treatment of wastes and by educating the industries about appropriate waste

management techniques.

The growing importance of this sustainable development and eco-friendly living, coupled with the

increasing awareness of the CSR activities of the industries has made Industrial Waste Management

one of the most vital concepts that industries need to concentrate on presently. Businesses must

consciously adopt the triple bottom line philosophy to be able to manage a judicious combination of

making profits duly respecting the ecology and the environment.

Keywords: Industrial Waste, Global Warming, Pollution, Environment degradation, CSR.

Companies need to be responsible with their industrial waste management and specifically their

hazardous waste. Many local governments provide counselling, consulting and recommendations to

organizations on what they can do to better manage their waste and plan for a more environmentally

friendly production processes. More than ever, there need to be consequences to companies that do not

take waste management seriously. Part of this includes reducing harmful emissions into the environment

over a period of time and correctly disposing of waste materials.Countries have terms and conditions

about what is acceptable in terms of waste management. Today, more than ever, industries know their

impact of manufacturing on smog levels and the escalating cost of managing their waste. More industrial

leaders are showing their accountability for the environment. Citizens need to support companies whose

business practices include environmentally conscious and responsible conditions. Using energy more

efficiently, reducing the hazardous waste they output into the air and to the landfills and practicing

composting and recycling are key factors in improving the way waste is managed.

Objectives

The wastes emitted by the industries.

The various methods of waste management.

The results of industrial waste.

India stand with respect to the Industrial Waste Management scenario.

Research Methodology This paper reviews the literature on the basis of secondary data collected from the sources such as

articles, research papers, annual reports, sustainability reports, company’s official websites, etc.

Industrial Waste Management :

Industrial waste management generally refers to a set of strategies and approaches that aim to eliminate,

reduce, reprocess or dispose of waste produced in an industrial setting. Industrial waste can be toxic,

chemical, solid, liquid, or non-hazardous. Typically, however, industrial waste management is concerned

with the proper disposal of industrial by-products that could be harmful to the environment.

Industrial Waste management can thus, be defined as the collection, transport, processing, recycling or

disposal, and monitoring of waste materials that are a cause of the industrial processes taking place. The

waste products means the various materials produced by human activity and is undertaken for reducing

their effect on health, environment or aesthetics. Another application of the waste management is to

recover the various resources from it. It involves the management of solid, liquid, and gaseous wastes.

Each type of waste requires a different method and fields of expertise. The practices of waste

management differ from developed and developing nations. In fact, there is difference in methods used in

the urban and rural areas, and also for industrial or residential producers. It is the responsibility of local

government authorities to manage non-hazardous residential and institutional waste in metro areas. On

other hand the management for non-hazardous commercial and industrial waste is done by the generator

Every nation has industrial waste practices that are in accordance with the Laws passed for environmental

protection. Moreover, it is also the moral duty and responsibility of the industries themselves to have

integrated and reliable industrial waste management practices.

Thus, the management of any waste that they are emitting lies with them. Industrial waste is often

hazardous, and therefore, improper management will result in degradation of the environment and will

put the well-being of the society at great risk.

Effects of Industrial Waste

Global Warming

Global warming is one of the most common and serious consequences of industrial gaseous waste.

The emission of various greenhouse gases such as CO2, methane (CH4), among others from various

industries, increases the overall temperature of the earth, resulting in global warming. Global

warming has various serious hazards, both on the environment as well as on human health.


http://www.wisegeek.com/what-is-waste-management.htm

http://en.wikipedia.org/wiki/Waste_collection

http://en.wikipedia.org/wiki/Transport

http://en.wikipedia.org/wiki/Waste_treatment

http://en.wikipedia.org/wiki/Recycling

http://en.wikipedia.org/wiki/Waste

It results in melting of glaciers and snow-capped mountains, causing an increase of the water levels in

seas and rivers, thereby increasing the chances of flood. Apart from this, global warming also has

numerous health risks on humans, such as increase of diseases such as malaria and dengue, cholera,

Lyme disease and plague, among others.

Air Pollution

Industrial pollution, as stated above, is one of the major causes of air pollution. With the increase in

the number of industries and factories due to the industrial revolution; air pollution also has increased

significantly. The emissions from various industries contain large amounts of gases such as carbon

dioxide, sulphur and nitrogen, among others. These gases, when present in elevated levels in the

atmosphere, often result in various environmental and health hazards such as acid rain, and various

skin disorders in individuals.

Water Pollution

Liquid industrial waste emitted from the industries is also one of the major factors contributing

towards water pollution. Dumping of various industrial waste products into water sources, and

improper contamination of industrial wastes, often result in polluting the water. Such water pollution

disturbs the balance of the ecosystem inside, resulting in the death of various animal and plant species

present in the water.

Soil Pollution

Soil pollution is defined as a phenomenon is which the soil loses its structure and fertility due to various

natural and artificial reasons. Dumping of industrial wastes is one of the prime factors contributing

towards soil pollution. Industrial wastes contain large amounts of various chemicals which get

accumulated on the top layer of the soil, resulting in loss of fertility of the soil. Such loss of fertility

ultimately results in changes in the ecological balances of the environment due to reduction in plant

growth.

Health Consequences of poor Industrial waste disposal

The solid waste generated from industrial sources contains a large number of chemicals, some of which

are toxic. It is necessary to know the properties of the waste so as to assess whether its uncontrolled

release to the environment would lead to toxic effects on humans or other living organism in ecosystem.

This evaluation is carried out using criteria such as toxicity, phytotoxicity, genetic activity and bio-

concentration. The potential toxic effects also depend on quantity of the toxic constituents. Substances

are classified as hazardous or otherwise depending on the dose, exposure, and duration of exposure. For a

chemical to affect human health it must come in contact with or enter the human body. There are several

ways in which this can happen.

Skin contact:

Chemicals that cause dermatitis usually do so through direct contact with skin. Some chemicals like

corrosive acids can damage the skin by a single contact while others, like organic solvent, may cause

damage by repeated exposure.

Inhalation: Inhalation is the most common source of workplace exposure to chemicals and the most difficult to

control. Air pollutants can directly damage respiratory tract or gets absorbed through lung and cause

system/systemic effects. An adult male will breathe about 10 cubic meters of air during a normal working

day.

Ingestion: Ground water and sub soil water contamination from leachates from refuse dumps and poorly managed

landfill sites can result in ingestion of toxic chemicals by population groups who live far away from the

factory sites and decades after the garbage has been dumped. A landfill has many potential public health

and safety problems if it is not properly engineered and operated:


Waste disposal, especially in open areas, attracts rodents, insects, and birdswhich can spread

disease;

Pathogens can be directly inhaled as wind transports fine-grained waste

contaminants; and

Children playing at the dump as well as human scavengers are exposed todisease or toxic

chemicals and injure themselves on sharp objects in and around the landfill.

Industrial Waste Management in India

India is the second most populous country, which has about 16% of the world population and 25% of the

land area. Rapid industrialization last few decades have led to the depletion of pollution of precious

natural resources in India depletes and pollutes resources continuously. Further the rapid industrial

developments have, also, led to the generation of huge quantities of hazardous wastes, which have further

aggravated the environmental problems in the country by depleting and polluting natural resources.

Therefore, rational and sustainable utilization of natural resources and its protection from toxic releases is

vital for sustainable socio-economic development. Hazardous waste management is a new concept for

most of the Asian countries including India. The lack of technical and financial resources and the

regulatory control for the management of hazardous wastes in the past had led to the unscientific disposal

of hazardous wastes in India, which posed serious risks to human, animal and plant life.

Present Hazardous Waste Generation Scenario:

The hazardous waste generated in the country per annum is estimated to be around 4.4 million tonnes

while as per the estimates of Organization for Economic Cooperation and Development (OECD) derived

from correlating hazardous waste generation and economic activities, nearly five million tonnes of

hazardous waste are being produced in the country annually. This estimate of around 4.4 million MTA is

based on the 18 categories of wastes which appeared in the HWM Rules first published in 1989.Out of

this, 38.3% is recyclable, 4.3% is incinerable and the remaining 57.4% is disposable in secured landfills.

Twelve States of the country (Maharashtra,Gujarat, Tamil Nadu, Orissa,Madhya Pradesh,Assam, Uttar

Pradesh,West Bengal, Kerala, Andhra Pradesh, Karnataka and Rajasthan) account for 97% of total

hazardous waste generation. Small and medium sized enterprises (SMEs), however, are the major

hazardous waste generators. The amount of hazardous waste generated in this country is quite small in

comparison to that of the USA, where as much as 275 million tons of hazardous waste was generated

annually.However, considering the fragile ecosystem that India has, even this low quantum of hazardous

wastes (around 4.4 million MTA) can cause considerable damage to natural resources if untreated before

releases. India's fragile ecosystem could be seen from the following:

Air pollution in Indian cities is highest amongst the world

Over seventy per cent of the country's surface water sources are polluted and, in large

stretches of major rivers, water is not even fit for bathing

India has among the lowest per capita availability of forests in the world, which is 0.11 ha as

compared to 0.50 ha inThailand and 0.8 ha inChina

The security of Indian fragile ecosystem, therefore, warrants sustainable consumption of natural

resources and protection from environmental degradation

Significance of SMEs in Industrial Output and Hazardous Waste Generation

According to the National Productivity Council, New Delhi (India), there are more than 3 million small

and medium scale industries, which are spread throughout the country in the form of clusters/industrial

estates. SMEs in India cannot afford to adopt and maintain adequate hazardous waste treatment and

disposal technologies. In the absence of common disposal facilities, the waste generators have been

accorded temporary permission to store waste in their premises except in areas serviced by common

facilities that have come up in the States of Gujarat, Maharashtra and Andhra Pradesh (where storage

period should not exceed for more than 90 days). The lack of common facilities has been a major factor

in mushrooming of illegal dump sites since most of the units in the small and medium sector do not have

adequate space within their premises to arrange for storage over several years.


Therefore it is urgently required to make available common hazardous waste treatment and disposal

facility in the areas in all the states where SMEs are operating.

The State Governments should not only expedite notification of sites based on environmental impact

assessment but play a catalytic role and persuade the industry associations to set up common facilities.

Such common facilities would need to be planned based on reliable estimate of current waste generation

and projections for the future. As this was not done, hazardous waste dumping was rampant in all the

states which prompted in public interest litigations in High Courts and Supreme Court.

Role of Ministry of Environment and Forests (MOEF)

a. Sustainable development initiatives

The MOEF has to work closely with the Planning Commission in the area of sustainable development.

The need for development programs to increase production, productivity and to create employment is

well recognized. GDP growth, industrialization, energy production, exports are all part of this. However,

this cannot be at the cost of present and the future in terms of quality of life for society as a whole.

Industrial policy relating to what industries should be encouraged and permitted, the role of SMEs, issues

relating to industrial estates (including their governance, facilities to be provided etc.), land use patterns,

urban development and zoning and such other matters are of a general nature which call for over all

national policy. These cannot be dealt with by any individual Ministry Department with concerns only for

its limited area of responsibility. MOEF has the responsibility to put forward the environmental

implications implicit in various policy options.

b. Location of Industrial Sites and Secured Landfills

The MOEF would consider the suggestion of HPC regarding development of National Policy for landfills

sites. The suggestion is to the following effect

In industrialized countries, the selection of sites for disposal facilities lies with the Government. In view

of this, a national policy needs to be developed for locating such centralized/common TSDFs. The

location of final disposal facilities should be based on the total quantity of hazardous waste generated in

the individual State. For effective monitoring and an economically viable facility, it is important to locate

a centralized facility within a distance of about 100 km. of the waste-generating units. Those States which

generate less than 20,000 tonnes per year of hazardous waste may be permitted to have only temporary

storage facilities and then transfer the waste to the final treatment and disposal facilities in the nearby

State. It is not necessary and also not advisable to develop a facility in each and every district and/or State

as land is a valuable natural resources.

c. National Policy Document on Hazardous Waste

MOEF is directed to either itself or through the CPCB or any other agency draft a policy document on

hazardous waste generation and its handling within the country. While examining this aspect, the

following recommendations of the HPC would be kept in view:

The policy document should emphasize a commitment to the recycling of wastes and propose incentives

for encouraging and supporting recycling. Industries must be given a clear message that they must show

concrete and tangible results as far as prevention and reduction of wastes are concerned. If they do not,

they should be made to pay a waste generation tax. The policy document should enunciate a doctrine of

partnership between SPCBs, entrepreneur and other stakeholders like the community, which will be

involved in monitoring, preventing and reducing hazardous waste generation. The policy should review

further growth of non-ferrous metallic waste, waste oil and used lead acid battery recycling in the SSI

sector.

Implementation of Plastic Waste Recycling Rules, Battery Waste Recycling Rules,Draft Used Oil

(Management and Handling) Rules. MOEF is directed to ensure compliance of "Recycled Plastics, Plastics Manufacture and Usage Rules,

1999 and the "Batteries Management and Handling Rules, 2001".


The Ministry shall issue directions to all Public Sector Institutions not to openly auction their hazardous

wastes but only to those who are registered units having Environmentally Sound Technologies (EST).

Reducing the harmful effects of global warming: As a responsible and socially conscious company, Tata Steel is playing a leading role by modernizing its

facilities to be energy efficient in its production processes. Tata Steel has already reduced its Green

House Gas emissions by 2.4%.The company's efforts at continual improvement of its environment are

well recognized. Tata Steel Main Works at Jamshedpur has been re-certified as ISO-14001 standard. It

has also been re-certified for compliance to the requirement of international standard ISO-14001, 1996.

In yet another vital step for better environment management, the company has commissioned a facility

for the recovery of waste gases from the blast furnace in collaboration with New Energy and Industrial

Development Organisation, Japan, under CDM, which is the first of its kind in India. CDM is a

cooperative mechanism under Kyoto Protocol between developed and developing signatory countries, to

meet partial obligations of developed countries to reduce their committed GHG emissions and help

developing countries to achieve Sustainable Development.Tata Steel is fully aware of the impact of its

activities, products and services on the environment at a local and global scale. That is why the

company's endeavour is not limited to compliance with applicable legislations, but to go beyond

compliance with minimisation of process waste, optimisation of recovery and recycling of waste

materials of the six Greenhouse gases, Carbon Dioxide is most relevant for the steel industry. Tata Steel

has reduced the CO2 emission by 35% in the last 12 years.

Conclusion:

Tata Steel can thus, be considered as a socially responsible, environmentally conscious company. All the

waste management techniques are carefully chalked out, keeping in mind the company’s vision and

mission. The reduction in wastes, solid, liquid and gaseous, over the years has resulted in retaining the

bio-diversity, preserving the environment and increasing the standard of living of both the employees,

and the society in which Tata Steel operates in.Every industry should use Tata Steel’s industrial waste

management techniques as guidelines for constant improvement, productivity and environmental

preservation.

Findings and recommendations:

The findings can be explained as below:

1 Growing Awareness: Presently, environmental awareness is at its highest in all these

years. The society at large is more aware of environmental issues then it was all these

years. Industries too, are becoming more conscious of the wastes they produce, which

result in pollution and degrade the environment. Becoming aware of the wastes emitted is

the first step in Industrial Waste Management.

2. Industries’ liability: Waste emitted by industries is an accepted problem, and ways to

tackle this problem are being increasingly acknowledged. Waste management is no longer

touted as a concern of solely the Government, but it is now considered as the liability of

the industry that is responsible for the wastes. Thus, Industrial Waste Management is the

liability of the industries.

3. Industrial Waste Management in India: Developing countries like India have to bear

the brunt of excessive industrialization with a view to be economically progressive. The

industrial sector in India is unorganized, and the waste emitted is not properly managed.

The environmental standards in India are low, with air pollution being the highest, over

seventy per cent of the water being polluted and the least forest land available as

compared to the rest of the countries in Asia.

4. Improper Waste Management: Improper handling of industrial waste is extremely

dangerous and detrimental to the quality of life of the prevailing society. Industries are

taking every possible measure to increase waste management efficiency, and industries

which aren’t doing so, should take cue from the ones that are


The following can be recommended:

1. Equal Preference:

Wastes, be it of any kind, solid, liquid must be given equal importance in the waste management plan.

All the different types of wastes are equally hazardous and dangerous and singling out of a waste in the

waste management plan is not advised. Instead, every waste emitted should be given equal importance by

the industries.

2. Solid wastes:

Industries should adopt the solid waste management hierarchy, in order to increase waste management

efficiency and help increase the quality of the environment. The solid waste management hierarchy helps

the industries to adopt better techniques of waste management in terms of solid waste. This helps to not

only increase the productivity of the industry, but it also helps in reducing the pollution and

environmental degradation caused by usage of improper methods of waste treatment and disposal.

As seen above, land filling is the least favoured of methods, while the favoured methods are energy

recovery, recycling or composting and reuse.

3. Liquid Waste:

There are a lot of aspects that need to be considered while developing a liquid industrial waste

management programme:

a) Geographical outline of the area covered by the plan

b) Existing environmental, social and economic conditions

c) Existing official plan and proposed land use (land-use bylaws and zoning)

References:

Websites referred to:

1. www.brownfieldsnet.org

2. www.ehow.com

3. www.wastemanagement.in

4. www.wikipedia.com

Other material referred to:

1. WasteReductionAndIncineration.pdf

2. IndiaWasteManagement.pdf

3. Environment-book-Tata Steel.pdf.


http://www.brownfieldsnet.org/

http://www.ehow.com/

http://www.wastemanagement.in/

http://www.wikipedia.com/

Role of Forensic Accountant in Detection, Investigation, and Prevention of Frauds * Sandeep S. Sawant

Introduction:

The term is not strictly defined in regulatory guidance and the meaning of forensic accounting is quite

broad: it is the application of accountancy skills and knowledge in circumstances that have legal

consequences. There are many circumstances with legal consequences in which accountancy might be

required; the most well known of which is investigating alleged fraudulent activityForensic accounting is

the term used to describe the type of engagement. It is the whole process of carrying out a forensic

investigation, including preparing an expert’s report or witness statement, and potentially acting as an

expert witness in legal proceedings. Forensic investigation is a part of a forensic accounting engagement.

Forensic investigation is the process of gathering evidence so that the expert’s report or witness statement

can be prepared. It includes forensic auditing, but incorporates a much broader range of investigative

techniques, such as interviewing witnesses and suspects, imaging or recovering computer files including

emails, physical searches of premises etc. Forensic auditing is the application of traditional auditing

procedures and techniques in order to gather evidence as part of the forensic investigation.

Financial forensic engagements may fall into several categories, for example,

Economic damages calculations, whether suffered through tort or breach of contract

Post-acquisition disputes such as earnouts or breaches of warranties

Bankruptcy, insolvency, and reorganization

Securities fraud

Asst. Prof., Dept. of Accountancy Chetana’s H.S .College of Commerce & Economics, Bandra. (E),

Mumbai. E-mail- [email protected] Mobile No.-9930488744.


Abstract Forensic accounting or financial forensics is the specialty practice area of accountancy that describes engagements that result from actual or anticipated disputes or litigation. “Forensic” means “suitable for use in a court of law”, and it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accountants, also referred to as forensic auditors or investigative auditors, often have to give expert evidence at the eventual trial. The increase in the corporate scandals and revenue leakage in the recent past has forced professional accounting bodies to think beyond statutory audit. Forensic Accounting is that branch of accounting which uses investigative skill to determine the accuracy of a company’s financial statement. Forensic Accounting can be defined as the science of gathering and presenting financial information in a manner that will be accepted by a court of jurisprudence, against perpetrators of crimes related to finance. This concept assumes significance for institutions willing to put in efforts to fight frauds and striving to build a strong and ethical reputation .Its application extends in industries like telecom ,infrastructure ,IT, pharmaceuticals as well as in sorting disputes over hidden assets in divorce cases I strongly feels that Forensic Accounting ,being the need of hour ,should not only be incorporated as a usual process in an organization but also be introduced in course having Accountancy as the major subject. Objective of the Study: The main objectives of this paper are as follows: 1. To understand importance of Forensic Accountant in today’s world 2. To know applications of Forensic Accountancy in practical as well as professional life. 3. To understand the role of Forensic Accountant in detecting, investing and preventing frauds and scams in corporate world. 4. To understand planning, procedure, and evidences to be collected by Forensic Auditor under Forensic Audit. 5. To know importance of fundamental ethical principles to be followed by Forensic Accountant under Forensic Audit.


Business valuation

Computer forensics/e-discover

Applications

The major applications of forensic accounting include fraud investigations, negligence cases and

insurance claims. An insurance claim would require determination of how much the client should claim

from the insurer. The first step would be a detailed review of the insurance policy to determine

‘coverage’, ie what is insured and any clauses that might restrict the amount that can be claimed or

invalidate the claim. The second step would be to gather evidence to quantify the loss, ie the amount to be

claimed. Insurance claims might include claims following misappropriation of assets, ie theft of goods or

money. In such cases, the forensic accountant will review inventory or cash records and details of sales

and purchases to reconcile the amounts held and determine the value of the goods or cash stolen. They

will also test the reliability of the information held by counting a sample of inventory or cash currently

held in comparison with the client’s records. The forensic accountant will not assume that there has been

a theft; they will consider other possibilities such as an error in the data held. Insurance claims may

however, be much more complicated than this, such as in the case of business interruptions arising as a

result of fire or flood. In these types of engagements the forensic accountant will review prospective

financial information in comparison with reported outturn to evaluate the loss of profit arising as a result

of the business interruption. The forensic accountant will not assume that there has been any loss of profit

due to the business interruption; they will consider other possibilities such as a straightforward loss of

market share to a competitor.

Forensic engagements often require the forensic accountant to quantify a loss. One such engagement is in

professional negligence claims, ie when another accountant has breached their duty of care to a client or

third party resulting in a loss for that client. In these types of engagement, the forensic accountant would

also provide an opinion on whether the duty of care owed has been breached, ie whether the audit or

other accountancy service was performed in accordance with current standards in practice, legislation and

techniques. In relation to an audit, this would require consideration of whether the International Standards

on Auditing were followed;

The need for a forensic accountant may also arise because two parties cannot agree on the amount owed

by one party to another, and the accountant is engaged to provide an expert valuation, of a business for

example. This might be the case in a matrimonial dispute, where a divorcing couples whose assets

include shares in a company or partnership, engage a forensic accountant to value the company so that a

settlement can be reached. A similar process might apply in partnerships, when one partner wishes to

leave the partnership and is being bought out by the remaining partner(s).

The Role of an Expert Witness

An expert witness is quite different to any other witness in court proceedings. Most witnesses are

'witnesses of fact', ie they can only provide evidence on what they saw, did or heard. Most importantly,

they cannot give their opinion on any of the matters about which they give evidence. By contrast, an

expert witness is specifically called to give their opinion on a particular matter.An accountant can be

called to give evidence as a professional witness, ie a witness of fact, or an expert witness. In order to

give evidence as an expert witness they must be just that, an expert. They must be able to demonstrate a

level of expertise that means their opinion is valuable to the court. This means not only expertise in

accountancy, but also expertise in the particular area of accountancy that they are giving evidence on.

A witness will provide a written report/statement to the court, and may also be required to attend court to

give live evidence, in person, and be cross-examined by the ‘other side However, not all forensic

engagements will require evidence to be submitted to a court. Often, the engagement will simply require

a report for the client’s own purposes or sometimes a report for use by the insurer. Either way, a key skill

necessary in being a successful forensic accountant is the ability to explain complex accounting concepts

in simple terms to someone who is not themselves an accountant, whether that be as an expert witness

explaining matters to the judge or jury, or when explaining matters to the client. Forensic accounting

integrates investigative, accountancy, and communication skills.


PLANNING

Forensic accounting engagements are agreed-upon procedures engagements, not assurance engagements.

The forensic accountant will not provide an assurance opinion – that is the role of the auditor when

reviewing the amount of loss included in the financial statements.This will normally involve determining

an appropriate value or quantifying a loss as discussed above; this is quite distinct from an assurance

engagement in which the engagement team would review an amount determined by the client. As an

agreed-upon procedures engagement, the forensic accountant will normally prepare a report for the client

that sets out their findings, based on the scope agreed in the engagement letter. This report may be

addressed to management, often in the case of a fraud, or to the insurer. It may be that a witness

statement/report for submission to the court/arbitrator is required in addition to or instead of a report to

the client. However, planning the investigation is likely to be similar to planning an audit or any other

assurance engagement. Planning will commence with a meeting with the client in which the engagement

team will develop an understanding of the issue/events (the fraud, theft etc) and actions taken by the

client since it occurred. A key part of planning is to confirm exactly what format the output is required in,

and exactly what matters are required to be covered within it.At this stage any key documentation will be

obtained and scrutinised – for example, the insurance policy, the partnership agreement, the evidence that

led to the discovery of the fraud, etc.

The team will agree with the client, what access to other information or personnel will be required and

this will be arranged. Based on the above, the team will design procedures that enable them to meet the

requirements of the client, as agreed. This may or may not include test of controls, depending on the

circumstances. There would be no need to tests control when valuing a business for a matrimonial

dispute. However, testing controls will be key to determining how a fraud took place.

PROCEDURES AND EVIDENCE

Any method of obtaining evidence can be used in a forensic accounting engagement – this is not a limited

assurance engagement in which procedures are likely to be restricted to enquiry and analytical

procedures. Forensic engagements will include a detailed and wholesale review of all documentation and

electronic evidence available. The opinion given by the expert accountant must be reasoned, and backed

up by evidence. Their opinion cannot be objective if only based on what they are told; they must

corroborate that information. This also applies when recommending enquires of or discussions with

management – it must be clear in Forensic Accountant’s mind that, what it is the engagement team

should ask of them, eg have they informed the police, has the suspect been suspended, have they

informed the insurer etc. Equally it is not sufficient to suggest the use of computer assisted auditing

techniques (CAATs). You must specify how the CAATs could be used. For example, data matching bank

accounts used for paying suppliers with bank accounts for paying employees, exception reports

identifying employees who are not taking holiday, etc.

In order to design appropriate procedures you must identify the type of forensic accounting engagement,

and the specific type of fraud, insurance or negligence claim. For example, quantifying the theft of goods

will be very different from quantifying a loss from payroll or ‘ghost employee’ fraud or loss of profits

following a business interruption (as discussed above).

FUNDAMENTAL ETHICAL PRINCIPLES

The range of ethical and professional issues will be similar to any other type of engagement. However,

the importance of ethics is arguably much greater in relation to forensic accountancy. Often both ‘sides’

will bring an expert witness to the hearing where they do not agree. The decision maker must decide

which evidence they ‘prefer’ – the credibility of the witness is often the primary factor on which they can

base that decision and the credibility of an accountant is reliant on their compliance with the fundamental

ethical principles.

As a Forensic Accountant, you will also need to note whether the client requesting the forensic

accounting service is an audit client, if so, this will present an additional and particularly important threat

to objectivity; a self-review threat. The investigation is likely to involve the quantification of an amount,

which will then be reviewed as part of the financial statements audit. The significance of the threat will

be affected by the materiality of the amount and the subjectivity involved in quantifying it, eg if for loss

of profits following business interruption this will be more subjective than quantification of the value of


stolen inventory. Remember that the decision to prosecute is a matter for the client. Often, clients do not

want to prosecute for fear of damaging their reputation. The forensic accountant can provide the client

with an analysis of all of the facts, but must not make the decision to prosecute (a management threat to

objectivity). The forensic accountant has a duty of confidentiality, unless it is in the public interest to do

so, they must not disclose the fraud to any third party including the police, without client’s permission.

Conclusion:

With the ever-increasing pressure on employees to achieve targets and on the management to show

growth of earning only increases the probabilities to fraud being committed in any organization

.Traditional auditing is getting less effective day by day to keep a moral check over the employees and

the management. Hence, to fight this ever increasing risk, some organizations have now recognized the

importance of employing experts in the field for early and timely detection of frauds. When an

organization suspects a fraud , it may hire an Forensic Accountant to investigate the matter, document the

findings and make recommendations. Remember that a forensic accountant is just that; an accountant!

Their role is to provide an accountant’s expert opinion or analysis of the facts. They are not the law-

enforcer, prosecutor or judge.

References:

1. ICAI Journals magazines and Books

2. Reference study material of ACCA (Association of Chartered Certified Accountants) Course.

3. www.icai.org

4. www.caclubindia.com

5. www.investopedia.com

6. www.accaglobal.com


http://www.investopedia.com/

http://www.accaglobal.com/

“Sustainable Transport and Urban Transport Related Issues in Mumbai and

Suburban Region” * Kshamali Sontakke

Literature Review:

Mr. R. B. Singh published his paper on ‘Environmental and Infrastructural Sustainability: Major

Challenges facing Indian Metropolitan Cities’ (2006) states that commuting time in our four mega

cities (Delhi, Calcutta, Chennai and Mumbai) has gone up by one third on an average during last 10

years, apart from larger travel time and loss of productivity, discomfort, higher emission levels and

degradation of environment, it has also resulted in expensive drain on energy. Road space is highly

inadequate at 6 per cent for Calcutta and 10 oer cent in Mumbai creating more and more congestion and

crawling traffic movement.

A paper published in 2006 on ‘Urban Traffic and Transportation Management’ by Mr. P. R. K.

Murthy and Dr. Shankar Viswanath states that in Mumbai, the number of vehicles has grown in the

last four decades but the expansion f the road network has failed t keep pace with demand owing to city’s

geographical constrains. Unless, substantial investments are made to improve and develop mass transit

systems, it will be very difficult to supply adequate road transport infrastructure to cater to the needs of

private vehicle owners.

In 2007 V. S. Phadake published his paper on ‘Urbanisation and Related Issues in the Mumbai

Metropolitan Region’. In this paper the author states that the newly added urban population is confined

to the same old transport corridors, causing problems both for the existing commuters and the newly

added ones. There are attempts to accommodate some of the growing population into the city itself by

promoting high rise buildings, but such attempts have their own risks as they would strain the existing

infrastructure further.

Introduction:

Growth of urban transport along a sustainable path in cities is the foremost need of the hour; local

pollution is a health hazard and Green House Gas (GHG) emissions are a global issue. Thus, the

introduction of green transport is the current hot topic. The present urban transport scene in India, in

general, is quite unsustainable; the use of cars and two-wheelers is rising, public transport (PT) is

inadequate, while walking and cycling are becoming less popular.

Assistant Professor, Department of Commerce; Chetana’s Hazarimal Somani College of Commerce and

Economics. Bandra (E), Mumbai 400051 E-mail - [email protected]


Abstract

The uncontrolled growth in urbanization and motorization generally contributes to an urban land use and

transportation system that is socially, economically, and environmentally unsustainable. This paper uses

Mumbai as a case study, which is the largest urban and economic centre of India, passing through an

uncontrolled phase of rapid urbanization and motorization. The paper first evaluates the existing

transportation and infrastructure system, national transportation policies, and urban transportation

projects to determine if the current paradigm is moving toward or away from sustainable transportation.

Furthermore, the principles for sustainable urban transportation are developed to see what significance

national transportation policies have given to urban transportation from a sustainable transportation

point of view. Finally some strategies are suggested, adoption of which may lead to a sustainable urban

development and transportation system in Mumbai.

Key words sustainable development;

urbanization;

integrated land use and urban transportation system

India is a very large country with over a billion people and nearly 50 of its cities contain populations

above 1 million each. Most cities, it appears, are not aware about the role and importance of urban

transport. While large cities have initiated steps, many more cities (those comprising about 1 million

population each) have not realised the unsustainability of present trends in urban transport growth. India,

thus, needs a wide range of strategies to achieve sustainable urban transport.

Data Source:

Secondary data is collected through books, journals, articles, reports and internet.

Population Trend in Mumbai:

Mumbai, also called Bombay, is the capital city of the state of Maharashtra in India, and it's the most

populous city in India. As the 4th most populous city in the world and one of the populous urban regions

in the world, Mumbai has a metro population of about 20.5 million in 2010. Mumbai's 2013 population is

estimated at 19 million, but its total metropolitan area is home to more than 20.5 million. As with other

metropolitan areas in India, Mumbai's population has grown very rapidly over the past two decades, and

much of its population are migrants from other regions in the country who came seeking better

employment opportunities. Mumbai's population has nearly doubled since 1991, when its population was

just 12.5 million. This rapid expansion has led to serious health-related issues, and a large percentage of

the population lives in slums.The number of people living in slums is estimated at 9 million, which is up

from 6 million just a decade ago. That means about 62% of all Mumbaikers live in slums. Dharavi, the

second largest slum in Asia, is located in central Mumbai and is home to 800,000 to 1 million people in

just 2.39 square kilometres (or 0.92 square miles). This makes it one of the most densely populated areas

on the planet with a density of a minimum of 334,728 people per square kilometre. It's also the most

literate slum in India with a literacy rate of 69%. Because land is at such a premium, residents of Mumbai

frequently live in cheap, cramped housing far from work, so there are usually long commutes necessary

on its busy mass transit system.

By 2020, Mumbai will have an estimated 24 million people with the highest population density in the

world. While Greater Mumbai now has a density of 27,348 people per square kilometre, this will reach a

peak of 101,066 per square mile, which will be the highest on earth.

Towards Sustainability:

To promote sustainable transport, the Government of India has taken six significant steps:

1. Finalised and issued the National Urban Transport Policy (NUTP) in 2006

2. Initiated demonstration projects with Global Environment Facility (GEF)

3. Strengthening the institutional set up

4. Initiating an ambitious capacity building programme

5. Support to improve both road and rail based mass rapid transit (MRT) facilities

6. Making emission norms increasingly stringent and improving quality of fuels

National Urban Transport Policy (NUTP)

The project, in partnership with the Ministry of Urban Development, Government of India, aims to

strengthen capacities of government agencies national/state urban transport departments, municipal

corporations and transport experts engaged in urban transport planning and regulations to reduce urban

transport emissions causing environmental damage. The project will also demonstrate sustainable urban

transport models in 10 cities in the country.

The main aim of NUTP is to promote sustainable transport in cities in India. Its main thrust is to:

Bring about a more equitable allocation of road space with people, rather than vehicles, as the main

focus

Encourage greater use of PT and nonmotorised modes of transport (NMT) which include walking,

cycling and cycle rickshaw

Establish multi-modal integrated PT systems

Address concerns of road safety, and

Reduce pollution through changes in travel habit


Essential Ingredients of Sustainable Transport

There are four essential ingredients of sustainable transport:

1. Comprehensive mobility plan for the city

2. Compact city so that it is NMT and PT friendly

3. PT system to be citywide, multimodal and integrated

4. Interchanges with minimum time penalty

Role of Institute of Urban Transport India (IUT)

IUT is a professional body set up in 1997 under the purview of India’s Ministry Of Urban Development

(MOUD). The Secretary to the Ministry is its ex-officio President. It has more than 1,000 members

spread throughout the country and provides professional support to the Ministry in implementing various

projects. IUT is already assisting MOUD in the capacity building exercise under the GEF project and will

continue the programme after the implementation of the initial phase of the project. The primary mission

of IUT is to assist cities in developing transportation along a sustainable path. Accordingly, it has

launched an awareness campaign to make small and medium sized cities aware of the adverse

environmental consequences of inaction, introduce them to the importance of urban transport and to

advise them on “how to start and where to start”. Thereafter IUT will handhold cities and assist them in

initiating steps to grow along a sustainable path until they develop in-house skills. Otherwise, these may

end up as major problem cities of tomorrow requiring expensive solutions. Role of Institute of Urban

Transport India (IUT)JOURNEYS November 2010 21

Delhi Situation

Delhi has nearly 6.1 million vehicles, mostly cars and two-wheelers. Delhi has taken action in nearly all

areas to control air pollution over the past decade; 15-year-old commercial vehicles are off the road and

transit freight traffic passing through Delhi is restricted. Nearly 300,000 buses, three-wheelers and a great

number of taxis and private cars run on CNG. Other steps include pollution checks, public awareness, the

use of catalytic converters and phasing out of old vehicles. Last year, nearly 0.3 million vehicles were

checked and most had ‘pollution under control’ certificates. PT is being augmented by the Metro and

buses, while NMT has been promoted by upgrading pedestrian and bicycle paths. In the context of the

2010 Commonwealth Games in Delhi, infrastructure has been upgraded through the construction of

flyovers and bridges, road widening, junction and corridor improvements, street-scaping, installation of

new street lights and signage, and the construction of new parking sites. This will provide long term

benefits to the city.

Conclusion:

Sustainability requires more comprehensive and integrated planning, which accounts for a broad set of

economic, social and environmental impacts, including those that are difficult to measure. Sustainability

planning requires adequate stakeholder involvement to allow diverse perspectives and preferences to be

incorporated. Sustainability tends to support transportation planning and market reforms that result in

more diverse and economically efficient transportation systems, and more compact land use patterns that

reduce automobile dependency. These reforms help increase economic efficiency, reduce resource

consumption and harmful environmental impacts, and improve mobility for non-drivers. Although it is

relatively easy to define the general type of policy changes that support sustainable transportation, it may

be difficult to define exactly what degree of change is needed.


References:

‘Committee for a study on transportation and a sustainable environment’ (1997) Toward A Sustainable

Future; Addressing the Long-Term Effects of Motor Vehicle Transportation on Climate and Ecology,

National Academy Press, www.nas.edu/trb.

Green Earth Society (2004) www.greeningearthsociety.org

J.S. Mathur, S. P. Agarwal, “Surface Transport in India”, Printwell publishers Distributors, 1999.

‘Mumbai Vision 2015: Agenda for Urban Renewal’; edited by R. Swaminathan and Jaya Goyal,

Macmillan India Ltd., 2006.

‘Sustainable Urban Development’; edited by R.B. Singh, Concept Publishing Co., New Delhi, 2006.

‘Urbanisation, Development and Environment’ edited by V. S. Phadake and Swapna Banergy Guha;

Rawat Publications, 2007.

http://www.in.undp.org/content/india/en/home/operations/projects/environment_and_energy/sustainable_

urbantransportprogramme/

http://www.lta.gov.sg/ltaacademy/doc/J10Nov-p13Singal_UrbanTransportIndia.pdf.

http://www.censusindia.gov.in/maps/Town_maps/Mum_slum_pop.aspx


http://www.nas.edu/trb

http://www.greeningearthsociety.org/

http://www.in.undp.org/content/india/en/home/operations/projects/environment_and_energy/sustainable_urbantransportprogramme/

http://www.in.undp.org/content/india/en/home/operations/projects/environment_and_energy/sustainable_urbantransportprogramme/

http://www.lta.gov.sg/ltaacademy/doc/J10Nov-p13Singal_UrbanTransportIndia.pdf

http://www.censusindia.gov.in/maps/Town_maps/Mum_slum_pop.aspx

Growth of Private Insurance Companies Precautions to be taken

* Ravindra S.Netawate

Introduction

Insurance is an essentials supplement of modern business activities internal and global Human life and

property is subject to risk and uncertainties. insurance give safety and protection to Business and

encourages them to take more interest and initiatives in the promotion of business activities it is

protective device and offers safety ,security ,and mental peace to businessman. Insurance is must in the

present world which is full of risk, uncertainties accidents and theft and so on. The risk of loss is existing

in the case of human life and property due to fire, flood, riots etc. In fact it is not possible to create a

riskless world. The better solution is to make some safety arrangement due to which person who suffers

loss will be compensated in monetary terms to the extent of actual loss. This is exactly the purpose of

insurance. The business of insurance is started with marine insurance .Traders that used to gather in

liyed’s Coffee house in London agreed to share the losses to their goods while being carried by ships the

loss use to occur because of pirates who robbed on the high seas or because of bad weather spoiling .the

goods or sinking the ship. The first insurance policy was issued in 1853. In England

In India insurance begin in 1870 with life insurance being transacted by English Company.

“’ The European and albert ‘” the first insurance company was the Bombay municipal assurance Society

Ltd. This was followed by thru oriental insurance company in 1874. The Bharat in 1896 and the empire

of India in 1897 .later Hindustan co operative is formed in Calcutta, United India in madras Bombay life

in Bombay national in Calcutta ,New India in Bombay Jupiter in Bomba And laxmi in New Delhi. These

were all Indian companies started due to swadeshi movement in the early 1900. In the year 1956 .Life

insurance business was nationalised with the primary objective of harnessing the investment of insurance

companies for national development and also spread of life insurance to every nook and corner of the

country.

LIFE INSURANCE CORPORATION OF INDIA was set up on 1St January 1956. With the assets and

liabilities of 245 insurance companies existing in 1956. .LIC gave a phenomenal growth to the volume of

the Business. GENERAL INSURANCE COMPANY established under the general insurance.

1. Life Insurance Corporation of India. (Public Sector.)

2. Life Insurance in private sector.

3. Aviva Life Insurance Co. Ltd.

4. Bajaj Allianz LIC Co.Ltd.

5. Bharati Axa LIC Co.Ltd.

6. Birla Sun Life LIC Co.LTD.

7. Canara HSBC OBC LIC Co.Ltd.

8. DLF Pramerica LIC Co.Ltd.

9. Future General LIC Co.Ltd.

10. HDFC Standard LIC Co.Ltd.

11. IDBI Federal LIC Co.Ltd.

12. ICICI Prudential LIC Co.Ltd.

13. India First Life Insurance LIC Co.Ltd.

14. ING VYSYA LIC Co.Ltd.

Assistant Professor, Head of the Dept. of Commerce; D.G.Ruparel College, Senapati bapat marg ,Mahim.,Mumbai.


15. KOTAK MAHINDRA LIC Co.Ltd.

16. MAXLIFE INSURANCE LIC Co.Ltd.

17. METLIFE LIC Co.Ltd.

18. Reliance Insurance LIC Co.Ltd.

19. Sahara INDIA LIC Co.Ltd.

20. SBI LIC Co.Ltd.

21. Shree Ram LIC Co.Ltd.

22. Star Union Dia-ichi LIC Co.Ltd.

23. TATA AIA LIC Co.Ltd.

Types of Insurance.

1. Reinsurance

2. Life insurance

3. General insurance

4. Property insurance

5. Fire insurance

6. Fidelity insurance

7. Liability insurance

8. Critical illness insurance.

Types of insurance policy:

1) Whole life policy

2) Endowment policy

3) With and Without policy

4) Joint life policy

5) Doubled accident policy

6) Annuity policy

7) Group insurance policy

8) Convertible whole life policy

9) Janata policy

10) Jeevan mitra policy ( Jeevan shree ,bima sandesh , jeevan kishore , jeevan sarita , Jeevan

chhaya , bhavishya jeevan , jeevan balya double accident policy ).

Objectives of the study:

1) To find the performance of Indian insurance company

2) To study the impact of the private insurance players

3) To find the ways to overcome on private insurance company

4) To find the measures for the development of insurance companies

5) Significance of insurance to the society.

Statement of the problem:

The current situation in insurance industry is very complex. The government allow the private insurance

companies as well as foreign direct investment. Therefore the tough competition increases and the small

insurance companies are out of the market. Secondly the e- commerce played very crucial role in the

Insurance sector. To acquire more market many companies tried to reach to target customer.


Insurance companies trying to collect more customers with the help of its various schemes and insurance

agent.

Review of Literature:

Dr. P. K. Gupta in his reference “Insurance and Risk Management “focuses on various risks in

insurance areas as well as customers facing the problems at the time of settlement of the insurance

claims.

Prof. Satish S. V. In his articled “life insurance marketing “a phenomenon content that insurance

marketing requires creativeness of the insurers implying

Updating knowledge on the market with global perspective.

According to O. C. And S. Srivastava “Indian insurance industry transition and prospects “its

contribution to Indian economy and liberalisation of opening up

To the private players.

According to Jagendra Kumar in his articles he propounded that CRM technology can help improve

customer service and customer contact.

In the article of Mohd. Azhar Suharwardi and Iqbal Ahamad hakim Published in Indian journal of

marketing focused that LIC should concentrate rural area with various policies and product.

Scope of the study:

The above study has great scope to the insurance sector. Insurance is the future protection to the policy

holder. It can cover all types of policy holder i.e. self employed, businessmen, agriculture, Government

employee, private sector. General insurance has lot of scope. In the case of property, livestock, marine

insurance etc.

Collection of data :

The above research paper study is based on the primary and secondary data. The primary data is collected

from the respondent as fifty policy holder and ten insurance agents are interviewed.

The secondary data is collected from the various references journals and articles as well as from web

sites.

The above research paper study is based on the primary and secondary data. The primary data is collected

from the respondent as hundred policy holder and twenty insurance agents are interviewed.

The secondary data is collected from the various references journals and articles as well as from web

sites.


Data analysis From the above pie-chart it came to know that many private players entered in Indian insurance market

but LIC is the leading insurance company whose market share is half of the remaining private insurance

companies. In private insurance companies only ICICI has increased its market share up to 10% were as

other private companies share is below 6% but in future these companies can create big challenges in

front of LIC. Therefore for future precautions LIC has to bring innovative services and different types of

products for its customers.

Hypothesis

After the data analysis it assumed that the hypothesis is H0 because the private insurance companies

acquired fewer customers than LIC by introducing various schemes to the Indian insurance policy

holders.

Challenges:

1. Though there is great scope to the insurance sectors but government allowed FDI in

insurance sectors it is very difficult to face the foreign players ultimately it is inverse

Impact on the performance of insurance sectors.

2. The agents once registered the policy of the customers later on they forget to the

customers then customers face number of problems.

3. The insurance brokers not provided satisfactory services to their customers.

4. Many times the policyholders could not received their receipt of payment on time,

many times company did not provide proper information to the customers.

5. In rural areas insurance sector has a great scope but the insurance companies did not

follow the proper customer’s relationship programme.


50

10

5.9

4.5

5.9

4.2

5.1

4.9

3.9 3.2 2.4

Market Share of private insurance players and LIC

LIC

ICICI

BAJAJ ALLIANZ

Birla Sunlife

HDFC

TATA AIG

Max NewYork

Kotak Mahindra

Aviva

ING Vyasya

SUGGESTIONS:

After the liberalisation , The Indian govt. Has opened the doors of insurance sector for the Private

players .If the proper measures has not been taken on the right time then this public sector will

remove the insurance scenario .

1. If the insurance company keep a regular touch with the customers of the rural and urban areas it is

great future to the insurance sectors.

2. The company should follow good CRM with modern customers by providing them proper

information.

3. Insurance agents are the backbone of insurance sectors if agents provide good services to the

customers’ definitely insurance sectors boom rapidly.

4. The government allowed FDI in insurance sectors if it is restricted in certain areas then the

insurance sectors has a chance for the development.

5. The insurance companies should apply the social media such as face book, internet, mobile

advertising, twitter the customers would get proper information about their policies.

6. Though the private insurance companies enter in Indian insurance sector the LIC Should

campaign insurance awareness programme for the various age groups.

7. The motivational factor is very important in insurance sector; the commission agents should be

provided good commission and other compensation such as bonus, extra benefit, future security

etc.

8. The maximum population still residing in rural areas if insurance company concentrate in this

sector forcefully the insurance has great scope to strengthen its area.

9. Customer relation service should be developed , customer care service department should be

opened and immediate actions required to the problems of your clients

10. Claim settlement is very important factor in insurance sector many times the claim is not settled

quickly and therefore the clients have no good faith on insurance sector.

11. Consumer education is also important aspects in insurance sector the insurance company should

conduct the insurance education for their clients so that without any difficulty they can do their

work by their own.

12. The govt. Should frame the legal frame work for the private insurance players Where some

restrictions should be imposed on the private insurance players .Such as policy amount , area of

functioning , fulfil the govt. Terms and conditions .

13. Private company with a minimum capital of Rs. 1 billion should be allowed to enter the industry

14. No company should deal in both and life insurance through a single entity


Conclusion

After the data analysis it came to know that the insurance company has to take more efforts to

develop its business. Insurance is the need of every human being if insurance company run it

programme with well planned manner it has a great scope to the insurance sectors. Though many

private players entered into the Indian insurance sectors LIC has more scope in the insurance

sectors. IF the company implemented good customer relationship management, it has a great

scope.

Bibliography:

Insurance merchandise by K Ravichandran Himalaya publishing house.

Insurance in India Dr.S. K.Bali A.K.Publications

Insurance Risk Management Dr.P.K.Gupta

Life Insurance Marketing by Prof. Satish.

Opportunities & challenges in bankin and insurance sector by Gupta & Gupta, Deep & Deep

Publications.

Indian marketing Association journal.

Times Of India

Economic Times


International Financial Reporting Standards (IFRS)

* Sachin Manohar Phadke

Introduction

International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an

independent, not-for-profit organization called the International Accounting Standards Board (IASB).

The goal of IFRS is to provide a global framework for how public companies prepare and disclose their

financial statements. IFRS provides general guidance for the preparation of financial statements, rather

than setting rules for industry-specific reporting. Having an international standard is especially important

for large companies that have subsidiaries in different countries. Adopting a single set of world-wide

standards will simplify accounting procedures by allowing a company to use one reporting language

throughout. A single standard will also provide investors and auditors with a cohesive view of finances.

IFRS began as an attempt to harmonize accounting across the European Union but soon it became

globally acceptable and widely came to be known as International Accounting Standards (IAS).

Currently, over 100 countries permit or require IFRS for public companies, with more countries expected

to transition to IFRS by 2016. IFRS as an international standard maintain that the cost of implementing

IFRS could be offset by the potential for compliance to improve credit ratings.

Objective of the Study

To Study INTERNATIONAL FINANCIAL REPORTING STANDARD. To help India to implement

Indian as Converged IFRS.

Hypothesis:-

The research is applicable to business organization as well to non business organization for running day

today business, building good corporate image, achieving goals, etc.

Research methodology

There researcher has collected data from secondary source such as reports, journals, magazines, internet,

etc.

Limitation of study:-

The data gathered by the researcher is not from the primary source.

Concept of IFRS:

International Financial Reporting Standards (IFRS) are designed as a common global language for

business affairs so that company accounts are understandable and comparable across international

boundaries. They are a consequence of growing international shareholding and trade and are particularly

important for companies that have dealings in several countries. They are progressively replacing the

many different national accounting standards. The rules to be followed by accountants to maintain books

of accounts which is comparable, understandable, reliable and relevant as per the users internal or

external.

In the absence of a Standard or an Interpretation that specifically applies to a transaction, management

must use its judgment in developing and applying an accounting policy that results in information that is

relevant and reliable.

Faculty, Dept. of Accountancy, Chetana’s H.S.College of Commerce & Economics, Bandra (E),

Mumbai 400051. E-mail- [email protected] Mob. 9594743444.


http://searchdatamanagement.techtarget.com/definition/compliance

Objective of financial statements

A financial statement should reflect a true and fair view of the business affairs of the organization. As

statements are used by various constituents of the society / regulators, they need to reflect a true view of

the financial position of the organization, and they are very helpful to check the financial position of the

business for a specific period.

IFRS authorize three basic accounting models I. Current Cost Accounting, under Physical Capital Maintenance at all levels of inflation and deflation

under the Historical Cost paradigm as well as the Capital Maintenance in Units of Constant Purchasing

Power paradigm

II. Financial Capital Maintenance in Nominal Monetary Units, i.e., globally implemented Historical cost

accounting during low inflation and deflation only under the traditional Historical Cost paradigm.

III. Financial Capital Maintenance in Units of Constant Purchasing Power – CMUCPP – in terms of a

Daily Consumer Price Index or daily rate at all levels of inflation and

The following are the three underlying assumptions in IFRS:

1. Going concern: An entity will continue for the foreseeable future under the Historical Cost paradigm

as well as under the Capital Maintenance in Units of Constant Purchasing Power paradigm.

2. Stable measuring unit assumption: Accounts are prepared based on Financial capital maintenance in

nominal monetary units or traditional Historical cost accounting only under the traditional Historical Cost

paradigm

3. Units of constant purchasing power: Capital Maintenance in Units of Constant Purchasing Power at

all levels of inflation and deflation

Qualitative characteristics of financial statements include:

Relevance (Materiality)

Faithful representation

Enhancing qualitative characteristics include

Comparability

Verifiability

Timeliness

Understandability

Elements of financial statements

Revenues and expenses are measured in nominal monetary units under the Historical Cost Accounting

model and in units of constant purchasing power (inflation-adjusted) under the Units of Constant

Purchasing Power model, Statement of Changes in Equity, Statement of Cash Flows, Notes to the

Financial Statements, Recognition of elements of financial statements, An item is recognized in the

financial statements when;

its probable future economic benefit will flow to or from an entity, the resource can be reliably measured

– otherwise the stable measuring unit assumption is applied under the Historical Cost Accounting model,

it is simply assumed that there is no inflation or deflation ever, and items are stated at their original

nominal Historical Cost from any prior date: 1 month, 1 year, 10 or 100 or 200 or more years before; i.e.

the stable measuring unit assumption is applied to items such as issued share capital, retained earnings,

capital reserves, all other items in shareholders´ equity, all items in the Statement of Comprehensive

Income (except salaries, wages, rentals, etc., which are inflation-adjusted annually), etc.

Under the Capital Maintenance in Units of Constant Purchasing Power (CMUCPP) model, all constant

real value non-monetary items are measured in units of constant purchasing power in terms of a daily

index at all levels of inflation and deflation; i.e. all items in the Statement of Comprehensive Income, all

items in shareholders´ equity, Accounts Receivables, Accounts Payables, all non-monetary payables, all

non-monetary receivables, provisions, etc.


http://en.wikipedia.org/wiki/Historical_cost_accounting


http://www.treasurydirect.gov/instit/annceresult/tipscpi/tipscpi_hiscpi.htm

http://en.wikipedia.org/wiki/Going_concern

http://en.wikipedia.org/wiki/Stable_measuring_unit_assumption

http://en.wikipedia.org/wiki/Nominal_monetary_units


http://en.wikipedia.org/wiki/Units_of_constant_purchasing_power

http://en.wikipedia.org/wiki/Nominal_monetary_units



http://en.wikipedia.org/wiki/Inflation_adjustment



http://en.wikipedia.org/wiki/Statement_of_changes_in_equity

http://en.wikipedia.org/wiki/Statement_of_Cash_Flows

http://en.wikipedia.org/wiki/Notes_to_the_Financial_Statements

http://en.wikipedia.org/wiki/Notes_to_the_Financial_Statements

Measurement of the elements of financial statements;

Measurement is the process of determining the monetary amounts at which the elements of the financial

statements are to be recognized and carried in the balance sheet and income statement. This involves the

selection of the particular basis of measurement.

A number of different measurement bases are employed to different degrees and in varying combinations

in financial statements. They include the following:

(a) Historical cost Assets are recorded at the amount of cash or cash equivalents paid or the fair value of

the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the

amount of proceeds received in exchange for the obligation, or in some circumstances (for example,

income taxes), at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the

normal course of business.

(b) Current cost Assets are carried at the amount of cash or cash equivalents that would have to be paid

if the same or an equivalent asset was acquired currently. Liabilities are carried at the undiscounted

amount of cash or cash equivalents that would be required to settle the obligation currently.

(c) Realizable (settlement) value Assets are carried at the amount of cash or cash equivalents that could

currently be obtained by selling the asset in an orderly disposal. Assets are carried at the present

discounted value of the future net cash inflows that the item is expected to generate in the normal course

of business. Liabilities are carried at the present discounted value of the future net cash outflows that are

expected to be required to settle the liabilities in the normal course of business.

The measurement basis most commonly adopted by entities in preparing their financial statements is

historical cost. This is usually combined with other measurement bases. For example, inventories are

usually carried at the lower of cost and net realizable value, marketable securities may be carried at

market value and pension liabilities are carried at their present value. Furthermore, some entities use the

current cost basis as a response to the inability of the historical cost accounting model to deal with the

effects of changing prices of non-monetary

Requirements

IFRS financial statements consist of

A Statement of Financial Position

A Statement of Comprehensive Income separate statements comprising an Income Statement and

separately a Statement of Comprehensive Income, which reconciles Profit or Loss on the Income

statement to total comprehensive income

A Statement of Changes in Equity (SOCE)

A Cash Flow Statement or Statement of Cash Flows notes, including a summary of the significant

accounting policies

Comparative information is required for the prior reporting period . An entity preparing IFRS

accounts for the first time must apply IFRS in full for the current and comparative period although

there are transitional exemptions.

Implementation in India

The Council of the Institute of Chartered Accountants of India (ICAI), at its last meeting, held on March

20-22, 2014, has finalized the roadmap. The revised roadmap recommends Indian AS to be implemented

for the preparation of Consolidated Financial Statements of listed companies and unlisted companies

having net worth in excess of Rupees 500 crores from the accounting year beginning on or after 1st

April, 2016, with previous year comparatives in Indian AS for the year 2015-16. The stand-alone

financial statements will continue to be prepared as per the existing notified Accounting Standards which

would be upgraded over a period of time.


http://en.wikipedia.org/wiki/Statement_of_Financial_Position

http://en.wikipedia.org/wiki/Statement_of_Comprehensive_Income

http://en.wikipedia.org/wiki/Income_Statement

http://en.wikipedia.org/wiki/Comprehensive_income

http://en.wikipedia.org/wiki/Statement_of_Changes_in_Equity

http://en.wikipedia.org/wiki/Cash_Flow_Statement

http://en.wikipedia.org/wiki/Statement_of_Cash_Flows

The Ministry of Corporate Affairs (MCA) had earlier notified Indian AS converged with IFRS in 2011,

but the Indian AS were not notified, as per the Press Release issued by the MCA, primarily due to tax

implications. Since then the Parliament has passed the new Companies Act, 2013, which is in the process

of notification by the MCA. The new Act has introduced various new provisions, including requirement

to prepare Consolidated Financial Statements, which would facilitate implementation of Indian as

converged with IFRS. The recommendation of the ICAI to implement Indian AS for preparation of only

the Consolidated Financial Statements would have the advantage that Indian AS would have no tax

implications as well as implications for computation of managerial remuneration and dividend

distribution etc., since, for these purposes, the existing notified Accounting Standards would continue to

be used as is the practice in almost all countries that have adopted or converged with IFRS. This approach

would enable India also to be become an IFRS-converged country as promised by it as a part of its G-20

commitments.

CA. K Raghu, President ICAI said, "Further, implementation of Indian AS from 1st April, 2016, with

previous year Indian AS comparatives for 2015-16, would allow industry ample time to prepare

themselves for the Indian AS, with certain subsequent revisions and amendments after 2011, which have

been and are being carried out by the ICAI to keep pace with IFRS revisions/amendments. These would

be submitted for consideration of the Government for notification as per the provisions of the Act. It is

also felt that the aforesaid time is sufficient to implement Indian AS for all listed companies and unlisted

companies having net worth in excess of Rupees 500 crores in one go, instead of implementing Indian

AS in phases, as was laid down in the previous roadmap" The roadmap also proposes that the previous

year comparatives for the year 2015-16 shall be prepared in accordance with Indian AS as against the

previous roadmap which required the same to be prepared in accordance with the existing notified

Accounting Standards, which was done at that time because the time for implementation of Indian AS

was very short. This proposal would also be another step to make Indian AS convergent with IFRS, as

without this, Indian AS would not be considered to be IFRS-converged. It is felt that for preparation of

previous year comparatives also, the time presently proposed is sufficient.

The above roadmap has been submitted to the Ministry of Corporate Affairs for its consideration, which

is expected to take decision in the matter shortly.

Conclusion

It is believed that IFRS, when adopted worldwide, will benefit investors and other users of financial

statements by reducing the cost of investments and increasing the quality of the information provided.

Additionally, investors will be more willing to provide financing with greater transparency among

different firms' financial statements. Furthermore, multinational corporations serve to benefit the most

from only needing to report to a single standard and, hence, can save money. It offers the major benefit

where it is used in over 120 different countries, while U.S. GAAP is used only in one country.

There are three primary merits or advantages of IFRS i.e. universality, flexibility & Transparency.

As far as India is concerned it should converge Indian AS (Indian Accounting Standards) to IFRS as early

as possible as it is not possible to adopt IFRS in its entirety.


References

(a) ICAI Journals magazines and Books

(b) www.icai.org

(c) www.ifrs.org

(d) www.investopedia.com


Impact of Globalization on Small Scale Industries

* B. R. Kamble

Introduction

Globalization signifies a process of internationalization plus liberalization, in which the world has

become a small village due to the concept of globalization. The competition has become intense in every

field. Nations fight with game plan to sustain their economy, by introducingnew policies and announcing

incentives to support mainly their economic-indicators. After the world economy was open to attack, the

Indian economy has initiate to concentrate on the development of small industrial base, which had

contribute positively to the India’s GDP; India’s GDP growth is better than other developing countries

with the developed small industrial sector.

In order to impart more vitality and growth to small scale sector, a separate policy statement has been

announced for small, tiny and village enterprises on 6th August, 1991. This policy statement was a leap-

forward because it was the first time that Government had issued a separate policy statement for the small

and decentralized sector. In the past, small scale sector merited only two or three paragraphs in the more

general industrial policy statements. The fact that Government considered it necessary to make a separate

policy statement for small enterprises was a welcome recognition to the dynamic and vibrant nature of

the Sector. This policy statement proposed some path- breaking measures to mitigate the handicaps that

were faced up by small enterprises in respect. Government of India introduced a large number of

innovative promotional measures to uplift the growth of small scale sector. Major features of the Small

Industrial policy of 1991:

1. Emphasis to shift from cheap credit to adequate credit.

2. Equity participation by other undertakings (both domestic and foreign) upto 24

percent.

3. Introducing of factoring services by banks.

4. Marketing of mass consumption goods under common brand name.

5. Setting up of sub- contracting exchanges.

6. Establishment of technology development cell.

7. Opening of quality counseling and technology information centers.

8. New technology up gradation programs.

Objectives of this study;

Small Scale Industry in India has been confronted with an increasingly competitive

environment due to:

* Associate Professor; Dept. of Commerce; Kirti College, Dadar, Mumbai- 400028, Maharashtra.


Abstract

Globalization is the metamorphosis of the individual nations into an integrated entity by means of their

interconnection on an economic, social and cultural level, fuelled by easy transport and communication

among them. It is the modern renaissance that makes ideas, goods, services, trade, technology and

culture permeate into the entire geography of the world thus turning it into a global village.

While globalization is a large scale phenomenon, small scale enterprises are a local phenomenon but

having effects of dimensions as large as it's global 'friend and foe'. Friend- because both globalization

and small scale industries are the two wheels of the vehicle of economic growth and prosperity; foe-

because some argue that given the developing nation that India is, Small Scale Industries(SSIs) can

suffer and strangulate to death by the fierce competition put up by globalization. Let us observe.

(i) Liberalization of the investment regime in the 1990s, favoring foreign direct investment at the

international level, particularly in socialistic and developing countries;

(ii) The formation of the World Trade Organizations (WTO) in 1995, forcing its member- countries

(including India) to drastically scale down quantitative and non-quantitative restrictions on imports, and

(iii) Domestic economic reforms. The cumulative impact of all these developments is a remarkable

transformation of the economic environment in which small industry operates, implying that the sector

has no option but to ‘compete’. To compete in the international market, the Indian Government

Announced a separate Industrial Policy for Small, Tiny and Village Industries on 6th August, 1991 and

started some development programmes for the development of Small scale Sector. The main objective of

the present study is to analyze the impact of globalization on the growth of small scale industries.


In the present study an attempt has been made to analyze the impact of globalization on the growth of

small scale industries. For this, the growth pattern and some aspects of productivity in SSI sector in India

have been calculated. The study has been conducted with reference to the data related to Performance of

Small Scale Industries in India. The SSI sector has been studied with the belief that they hold the largest

share of Industrial Sector in India. The reference period for the analysis of the data has been taken from

1973-74 to 2006-07. The study period has been divided into two parts: pre liberalization (1973-74 to

1989-90) and post liberalization (1990-91 to 2006-07) to know the impact of globalization after

liberalization. For this, a comparative analysis of Average Annual Growth Rates for pre and post

globalization periods has been carried out for key growth and performance parameters like number of

units, production, employment and exports. The study has been based on secondary information. The data

for the study purpose has been taken mainly from ‘Ministry of Micro, Small and Medium Enterprises,

Government of India’ published by Reserve Bank of India in Handbook of Statistics on Indian Economy.

Impact of Globalization on Small Scale Industries

Small scale industries have an essential role to play in socioeconomic uplifting of developing countries

like India. India initiated the economic reforms in 1991 with the objective of faster economic growth.

Since the Globalization process has been in vogue for the past 22 years, it becomes important to analyze

whether the new economic order has had a positive or negative impact on the performance of SSIs in

India. The decade of 1990s was marked by considerable deregulation of industrial economy through de

licensing and de reservations, opening up the industrial sector to internal external competition, lowering

of tariffs, removal of quantitative restrictions etc. These reforms have an adverse effect on the small scale

sector. Cheaper and good quality of imported goods are posing a serious threat to small scale units

operating in various industries like toys, sports goods, footwear, auto parts, silk etc. The most serious

threat is being posed by cheap Chinese imports as the so called “China Price” is forcing many small scale

units to close down. The costs of production in China are indeed very less as compared to India; it is no

doubt correct to say that China is resorting to ‘dumping’ to eliminate its competitor in other markets.

Globalization had a negative impact on Small Scale Industries. SSIs were not in fashion as they produced

goods on small scale and their markets too were little. They are less priced. But with coming the wave of

Globalization, the entire scenario changed. Globalization has ultimately led to the demise of the SSI in

India. Large factories produced the goods on much larger scale to get economies of scale and made the

prices much cheaper or reasonable and as a result, small scale industries started shutting down because

they could have the capability to face competition by the large producers.

Impact on Export and Import:

India's Export and Import in the year 2001-02 was to the extent of 32,572 and 38,362 million

respectively. Many Indian companies have started becoming respectable players in the International

scene. Agriculture exports account for about 13 to 18% of total annual of annual export of the country. In

2000-01 Agricultural products valued at more than US $ 6million were exported from the country 23% of

which was contributed by the marine products alone.


Marine products in recent years have emerged as the single largest contributor to the total agricultural

export from the country accounting for over one fifth of the total agricultural exports. Cereals (mostly

basmati rice and non-basmati rice), oil seeds, tea and coffee are the other prominent products each of

which accounts fro nearly 5 to 10% of the countries total agricultural exports.

Impact on Financial Sector:

Reforms of the financial sector constitute the most important component of India’s programme towards

economic liberalization. The recent economic liberalization measures have opened the door to foreign

competitors to enter into our domestic market. Innovation has become a must for survival. Financial

intermediaries have come out of their traditional approach and they are ready to assume more credit risks.

As a consequence, many innovations have taken place in the global financial sectors which have its own

impact on the domestic sector also. The emergences of various financial institutions and regulatory

bodies have transformed the financial services sector from being a conservative industry to a very

dynamic one. In this process this sector is facing a number of challenges. In this changed context, the

financial services industry in India has to play a very positive and dynamic role in the years to come by

offering many innovative products to suit the varied requirements of the millions of prospective investors

spread throughout the country. Reforms of the financial sector constitute the most important component

of India’s programme towards economic liberalization.

Impact of Globalization on Agricultural Sector:

Agricultural Sector is the mainstay of the rural Indian economy around which socio-economic privileges

and deprivations revolve and any change in its structure is likely to have a corresponding impact on the

existing pattern of Social equity. The liberalization of India’s economy was adopted by India in 1991.

Facing a severe economic crisis, India approached the IMF for a loan, and the IMF granted what is called

a ‘structural adjustment’ loan, which is a loan with certain conditions attached which relate to a structural

change in the economy. Essentially, the reforms sought to gradually phase out government control of the

market (liberalization), privatize public sector organizations (privatization), and reduce export subsidies

and import barriers to enable free trade (globalization). Globalization has helped in:

• Raising living standards,

• Alleviating poverty,

• Assuring food security,

• Generating buoyant market for expansion of industry and services, and

• Making substantial contribution to the national economic growth.

Impact on Employment and Unemployment:

The total number of persons employed in these SSI units has also increased over the years. SSI has

emerged the second largest employment providing sector next to agriculture. The average growth rate of

employment has declined during the post liberalization period. Advance technology, reduction in cost,

CRS and VRS, steep competition, Hire and Fire policy etc. these are the factors responsible for slow

growth.

Globalization is the process by which markets integrate worldwide. Over the past 60 years, it has

accelerated steadily as new technologies and management expertise have reduced transportation and

transaction costs and as tariffs and other man-made barriers to international trade have been lowered. The

impact has been stunning. More and more developing countries have been experiencing sustained growth

rates of 7-10 percent; 13 countries, including China, have grown by more than 7 percent per year for 25

years or more. Although this was unclear at the outset, the world now finds itself just past the midpoint in

a century-long process in which income levels in developing countries have been converging toward

those in developed countries.


Challenges Faced by Small Scale Industries:

1. Non-availability of raw materials: Our small scale and cottage industries suffer from the want

of raw materials, important components and equipment. The allocation of these inputs is residuary

in this sector.

2. Problem of finance: The small enterprises are naturally very weak in matter of finance. They are

often to depend on indigenous and unscrupulous money lenders who charge very high rates of

interest.

3. Low technical skill: There is scarcity of technical skill and managerial ability in this sector. The

organizers and artisans of the small enterprises lack proper knowledge of the modern technology

and the marketing conditions.

4. Problems of the market: Products of these enterprises in spite of their originality are not often

standardized and therefore, are not exposed to advertisement. There is a gap of information

between the producer and the prospective buyers.

5. Competition of large scale industries: Large stale industries enjoy the economics of scale and

are at the same time favored by the bureaucrats. The clearance of the applications of the smaller

units often takes unduly long time.

Suggestions

Small scale industries should organized consumer awareness camps for their products in rural

and semi-urban areas.

It is necessary to declare the entire Nanded district as D+ zone in order to achieverapid industrial

growth and to attract outside industrialist to Nanded district.

The Small Scale Units should use cost effective transportation needs. The SmallScale Units

should enter in to tie-ups with the organized retail stores to improve theirdistribution.

The Small Scale Units should acquire knowledge about the taxation and regulatorymeasures by

way of training. They should use budgetary control for financialplanning.

The Small Scale Units should use proper human management techniques to acquire,train,

motivate and retain the employees

All SSI’s should join their hands with national and international small scale industries.

Summary and Conclusions

Small scale industry in India finds itself in an intensely competitive environment since 1991, thanks to

globalization, domestic economic liberalization and dilution of sector specific protective measures. As a

result, its growth in terms of units, employment, output and exports has come down. This has resulted in

less impressive growth in its contribution to national income and exports though not in terms of

employment in the 90s. Lack of reliable and stable economic infrastructure, reduced growth of credit

inflow and technological obsolescence, which together would have led to inferior quality and low

productivity are the major banes of small industry in India. But at the same time, international and

national policy changes have thrown open new opportunities and markets to Indian small industry.

Concerted efforts are needed both from the government and more importantly, from small industry itself

to imbibe technological dynamism into Indian small industry. Technological upgradation and inhouse

technological innovations and promotion of inter-firm linkages need to be encouraged consciously and

consistently. The benefits and need to go for technology development through either technology transfer

or technological innovations or inter-firm linkages should be emphasized in the light of dimensions of

global competition and its negative fallouts as well as positive opportunities, to small industry

entrepreneurs through seminars and workshops at the local level. Financial infrastructure need to be

broadened and adequate inflow of credit to the sector be ensured taking into consideration the 24growing

investment demand including the requirements of technological transformation. Small industry should be

allowed to come up only in designated industrial areas for better monitoring and periodic surveys through

DICs should enable policy corrections from time to time. A technologically vibrant, internationally

competitive small industry should be encouraged to emerge, to make a sustainable contribution to

national income, employment and exports.


References

K.R.Vijayarani-“ Small Scale Industries in India:Problems & Policy Initiatives.

Reddy T. Koti- “Problems & Prospects of Small Scale Industries in India”

www.shodhganga.inflibnet.ac.in

Lee, Eddy and Marco, Vivarelli (eds.) (2006), Globalization, Employment and Income

Distribution in Developing Countries, ILO, Geneva.

Mathew, M.(2004), “ Small Industry and Globalization”, Economic and Political Weekly

Subrahmanya, M.H. (2004), “Small Industry and Globalization: Implications, Performance

andProspects”, Economic and Political Weekly

Small industries development Organization, Modernization of Small Scale Industriesproceedings

of the Open House Discussion, Small Industries Service Institute, Patna

www.google.com

www.wikipedia.org


http://www.shodhganga.inflibnet.ac.in/

http://www.google.com/

http://www.wikipedia.org/

शाश्वत शेतीचे ग्रामीण ववकासातील महत्व

* निनति वव .ताात.

सकंल्पिा

भावी विढीसाठी आवश्यक असलेल्या मलूभतू स्त्रोताांना कोणत्याही स्त्वरुिाची हानी िोहचू न देता वततमान विढीच्या गरजा भागववण्यासाठी अवलांबण्यात आलेली शतेी िद्धत म्हणजे शाश्वत शतेी होय.

शाश्वत शतेी म्हणज े जमीन, विके, वने, िशधुन, मासे, ियातवरण इत्यादी िनुतजीवीत करण्याजोगे स्त्रोताांच्या प्रतवारीचा घसारा न होऊ देता सांतलुलत व्यवस्त्थािन करून वततमान व भावी विढीसाठी अन्न, वस्त्र, व ननवारा याांचा िरुवठा करणे होय.

उद्धेश –

१) सामाजजक िररजस्त्थती व ियातवरण समतोल राखण्यास मदत होत.े

२) शाश्वत िद्धतीत सकस अन्नधान्य उत्िादन होऊन मनषु्य व प्राण्याच ेआयषु्यमान सधुारत.े

* ग्रामीण ववकास ववभाग, कीती महाववद्यालय ,दादर .


प्रस्ताविा

भारतात शतेी हा प्रमखु व्यवसाय असनू शतेी उत्िादन वाढववण्याच ेप्रयत्न सतत सरुु आहेत. ववशषेतः स्त्वातांत्र्यनांतर १९६५ च्या दरम्यान वि ांकाच्या सांकरीत व सधुाररत वाणामळेु हररतक्ाांती झाली व कृषी उत्िादनात भरीव वाढ झाली. त्यानांतर मार खूि प्रयत्न करूनसदु्धा कृषी उत्िादन वाढीत अिेक्षेप्रमाणे यश लमळाले नाही व हे उत्िादन १७ त े१८ कोटी टनाियतं जस्त्थरावले आहे. देशाची २००० साली झालेली १०० कोटी लोकसांख्या ववचारात घेता त्यासाठी लागणाऱ्या २० त े२२ कोटी टन अन्नधान्य उत्िादनाचा िल्ला गाठणे जरूरीचे होत.े त्या मानाने भारतात आज शतेीसाठी उियकु्त असलेल्या २६.६ कोटी हेक्टर शरेामध्ये फारशी वाढ होण्याची शक्यता नसल्याने उिलब्ध शरेातनूच हह अन्नधान्याची वाढ करावी लागेल. त्यासाठी िीक उत्िादन वाढीचा सवतकष कायतक्म घेणे गरजेचे आहे. आजच्या उिलब्ध शरेातनू िीक उत्िादनाची वाढ करताना जलमनीची सिुीकता कमी होणार नाही व एकूण कृषी व्यवसायात जस्त्थरता येईल याकड ेकटाक्षाने लक्ष्य द्यावे लागेल. अशा प्रकारच्या कृषी उत्िादनातील वाढीच्या समस्त्या अमेररका, यरुोि यासारख्या ववकलसत देशाांबरोबरच भारतासारख्या ववकसनशील देशातही भास ूलागल्या आहेत. कृषी माल उत्िादनास लागणारा वाढता खचत व मालास लमळणाऱ्या कमी ककमती यामळेु शतेकऱ्याांना शतेी उद्योग करणे कठीण होत असनू त्यािासनू बचाव होण्यासाठी कमी खचातच्या ियातयी शतेी िद्धतीचा अवलांब करावा लागणार आहे. ग्रामीण भागातील जीवन कठीण झाले असनू त े सधुारण्यासाठी व दीघतकाळ जस्त्थर राहण्यासाठी शाश्वत शतेी िद्धतीचा अवलांब करावा लागेल. यासाठी िारांिाररक व सधुाररत शतेी िद्धती व त्यात अलीकडील काळात नवीन तांरज्ञाननामळेु झालेला बदल याचा अभ्यास करून नवीन शाश्वत शतेी िद्धत स्त्वीकारावी लागेल.

३) शाश्वत िद्धतीत रासायननक िादाथातवर उदा. खत,े कीटकनाशके, सजीवके इत्यादीवर जास्त्त प्रमाणात अवलांबनू न राहता विकाांचे टाकाऊ िदाथत, िालािाचोळा व जनावराचा मलमरुाचा उियोग आणण एकाजत्मक तण, कीड व रोग ननयांरण ठेवणे.

४) शतेीच्या समस्त्या समजावनू त्या सोडवण्यासाठी योग्य त ेफेरफार करणे.

शाश्वत शतेीची व्याप्ती

१) िाणलोट शरे व्यवस्त्थािन

िाणलोट शरे व्यवस्त्थािनाांतगतत सवातत महत्वाची कृती म्हणजे कोरडवाहू शतेीसाठी मदृ व जलसांधारणाची कामे करणे, जलमनीच्या क्षमतनेसुार नतचा उियोग करणे, िडीक जलमनीच ेव्यवस्त्थािन करणे, वकृ्षलागवड करणे व िीक उत्िादन िद्धतीचा अवलांब करणे.

२) विकाांचे अनवुाांलशक गणुधमातचे सांवधतन करणे

प्रदीघत कालावधीियतं सधुाररत जातीचा वािर केल्यामळेु अनवुाांलशक गणुधमत ढासळतात व त्यामळेु जलमनीची उत्िादनक्षमता कमी होत.े त्यासाठी विकाांचे अनवुाांलशक गणुधमातचे सांवधतन करणे गरजेचे आहे.

३) मशागत

शाश्वत शतेीत अांतगतत केल्या जाणाऱ्या मशागतीचा कामाचा उद्धेश म्हणजे जलमनीची धूि कमी करणे, तणननयांरणासाठी सधुाररत तांरज्ञानाचा वािर करणे व ववलशष्ट कालावधीत सेंहिय िदाथातचे ववघटन घडवनू आणणाऱ्या सकु्ष्मजीवासाठी अनकूल िररजस्त्थती ननमातण करून ववघटनाच्या क्ीयाला चालना देउन व अन्नघटक चक् कायम चाल ू ठेवणे शाश्वत शतेीद्वारे केल े जात.े जलमनीचा वरचा ८ सें.मी. थर जैववक कक्याशीलतसेाठी उत्तम असतो. त्याचे सांवधतन करणे शाश्वत शतेी अांतगतत केल ेजात.े

४) अन्निव्याचे व्यवस्त्थािन

शाश्वत शतेी मखु्यता: अन्निव्याचा िरुवठा करण्यासाठी सेंहिय िदाथातवर अवलांबनू असणे आणण सदर सेंहिय िदाथत, शणेखत, कां िोस्त्ट खत व हहरवळीच े खत या माध्यमातनू उिलब्ध होत असतात. शाश्वत शतेीिद्धती सरुवातीच्या काळात अन्निव्याचा ियातप्त िरुवठा करण्यासाठी सेंहिय खताबरोबर थोडयाफार प्रमाणात रासायननक खताांचा िरुवठा करणे गरजेचे आहे. अन्निव्याचे चक् सांतलुलत करण्यासाठी शतेी उत्िाहदत अझोला, नीळ हहरव ेशवेाळ, अझेटोबक्टर व इतर जैववक खताांचा वािर करण्यात येतो. जलमनीची सिुीकता हटकवण्यासाठी वि ांकाची फेरिालट हा उिक्म राबववला जातो.

५) कायतक्षम िाणी व्यवस्त्थािन

िाणी व्यवस्त्थािनाने िावसाचे िाणी व लस ांचनाचे िाणी व्यवस्त्थािन अशा दोन प्रकारात ववभागणीत करता येऊ शकत.े िावसाचे िाणी अडवनू त ेविकाांसाठी िरुववणे व बाश्बोत्सजतनाचा वेग कमी करणे. लस ांचनाच्या िाण्याचे


व्यवस्त्थािन योग्य वेळािरक व विकात ियातप्त प्रमाणात िाणी देणे याचा समावेश होतो. जास्त्त िाण्यामळेु दलदल क्षारता व खारटिणा वाढणार नाही याववषयी काळजी घेतली जात.े

६) तण व्यवस्त्थािन

तण ननयांरणासाठी मशागत याांत्ररक, जैववक व रासायननक िदाथातचा समावेश होतो. शाश्वत शतेीमध्ये मशागत, याांत्ररक व जैववक िद्धतीवर जास्त्त भर हदला जातो. वि ांकाांची फेरिालट मशागत व खुरिणी याद्वारे तणाांचे चाांगल्या प्रकारे ननयांरण करता येत.े ठराववक मयातहदत ियतं व ठराववक काळासाठी तणामळेु अन्निव्याांचे चक्, कीड ननयांरण मदृ सांधारण व सेंहिय िदाथांच्या प्रमाणात सधुारणा घडवनू आणता येत.े

७) कीड व्यवस्त्थािन

ठराववक िद्धतीचाने साकारलेल्या कृषी िरीस्त्थीतीने सेंहिय शतेीमध्ये वनस्त्िती व कीड याांच्यातील ववववधतमेळेु कीड व रोगाांचा िादभुातव कमी प्रमाणात हदसनू येतो. प्रचललत शतेी िद्धतीिेक्षा शाश्वत शतेी िशधुनाला कमी प्रमाणात रोगाचा िदुतभाव होतो. त्याच ेमहत्वाचे कारण म्हणजे चाांगल्या प्रतीचे खाद्य लमळणे आहे.

शाश्वत शतेी िद्धतीत एकाजत्मक कीड ननयांरण व कीड प्रनतकारक जातीचा समावशे केला जात असल्यामळेु रासायननक कीटकनाशकाांचा वािर कटाक्षाने टाळला जातो. शाश्वत शतेी िद्धतीमध्ये ववषारी रसायना ऐवजी वनस्त्ितीजन्य कीटकनाशक व जीवाणू, भरुशी इत्यादी सकु्ष्म जीवाांचा वािर करून कीड व रोगाांचे ननयांरण केले जात.े

८) वि ांकाची फेरिालट

शाश्वत शतेीसाठी उत्तम अशी वि ांकाांची फेरिालट िद्धती ननवडणे खूि महत्वाचे आहे. जलमनीची सिुीकता विकवण्यासाठी कीड, रोग व तणाांचे ननयांरण यासाठी विकाांची फेरिालट करणे महत्वाचे आहे. प्रत्येक िीक फेरिालटसाठी डाळवगीय वि ांकाची गरज असत.े आणण त्याांचे ३०% त े५०% प्रमाण असावे लागत.े लमश्र िीक िद्धत जनावराांचे चराई िद्धत या गोष्टी शाश्वत शतेीच्या यशस्त्वीत ेसाठी खूि आवश्यक आहे.

शाश्वत शतेीचे फायदे –

१) ियातवरणाचे सांतलुन राखणे हा शाश्वत शतेीचा महत्वाचा फायदा आहे.

२) शाश्वत शतेीसाठी िीक उत्िादन खचत कमी असतो.

३) शदु्ध ियातवरण व कोणतहेी हाननकारक नसलेल्या अन्न उत्िादन शाश्वत शतेीसाठी शतेीद्वारे हदले जात.े

४) ननव्वळ सामाजजक नफा जो असतो तो शाश्वत शतेी िद्धतीत वाढतो.

५) प्रनतकूल हवामान व बाजारभावामळेु होणारे नकुसान शाश्वत शतेीद्वारे टाळता येत.े


शाश्वत शतेीसाी ववश्यक ससणााे ाााी

१) जलमनीचे व्यवस्त्थािन सधुारून, िीक िद्धतीत योग्य त ेबदल करून व खताचा योग्य प्रमाणात वािर करून उियोग क्षमतपे्रमाणे विकाच ेननयोजन करावे.

२) योग्य मशागत, धूि प्रनतबांधक विकाांची लागवड व सेंहिय खताचा भरिरू वािर करून जलमनीची सिुीकता हटकवावी.

३) जलमनीतील हवा, िाणी, सेंहिय िदाथत व खननज ेया घटकाचे प्रमाण २५, २५, ०५, व ४५ टक्के राहील अस ेिहावे यामळेु जलमनीची उत्िादकता चाांगली राहील.

४) यालशवाय ताग, चवली, सबुाभळू याांचा हहरवळीचे खत े म्हणून वािर करावा. तसेच विकाांच्या फेरिालटीत कडधान्य विकाांचा समावेश करून नर खतावरील बचत करावी.

५) ज्वारी, बाजरी, भईुमगु, सयुतफुल, कािसू व तरू या विकाांची आांतरिीक िीक िद्धत मटकी, हुलगा व िाण्याची उिलब्धता िाहून खरीि व रब्बी हांगामात िीक ननयोजन करावे.

निष्कर्ष

शतेीमध्ये असे बदल करताना शतेकऱ्याांना अनेक अडचणी येतात. शतेकऱ्याांची आर्थतक व सामाजजक िररजस्त्थती, प्रत्यक्ष अवलांब करण्यासाठी योग्य तांरज्ञानाचा अभाव, लागवडीस लागणाऱ्या वस्त्तूांचा अिरुा िरुवठा व त्यातील अडथळे, अननक्षक्षत िाऊसमान व जलमनीच्या सिुीकता व उत्िादकतवेरील मयातदा या सवातचा िररणाम होऊन शतेकऱ्याांना इच्छा असनूही अिेक्षेप्रमाणे यश लमळत नाही. यावर शाश्वत शतेी िद्धतीचा अवलांब करणे हाच उिाय आहे.

सदंर्षसचूी (Reference Book) –

१) िीक लागवड व शतेी िद्धती तांरज्ञान- एम. सी. ए. ई. िणेु.

२) आिली जमीन आिली शतेी, कॉ नेन्तल प्रकाशन, िणेु.

३) समदृ्ध शतेीचा िायवाटा, सकाळ वप्र ांटीांग पे्रस, कोल्हािरू.

४) सेंहिय शतेी िद्धती आणण प्रमाणीकरण, कृषी भाांडार प्रकाशन, िणे.

५) कृषीदशतनी-२०१०, महात्मा फुले कृषी ववदयाविठ, राहुरी. अहमदन


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