GM 02
Economics & Social Environment
Assignment - I
Assignment Code: 2015GM02A1 Last Date of Submission: 15th May 2015
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. “Business Environment may act as stimulant or as a constraint for business management”. Highlight the above statement with suitable example.
2. Why was FERA replaced by FEMA? How both acts are different from each other?
3. Define sick industrial unit? What are the various causes of industrial sickness?
4. Explain with suitable examples the method of SWOT Analysis to scan the environment.
Section-B
Case Study
Indian PSUs: Leading the nation since independence
Public sector enterprises are an integral part of the Indian economy and a major driver of economic growth over the past six decades. Economic reforms of 1991 transformed these companies in size and stature, lading to improvement in productivity and profitability owning to focus on business growth. They competed with major players, both in domestic and international markets and attracted huge investor interest.
In spite of the wave of privatization across India, the centre and state owned enterprises control vast swaths of the national Gross Domestic Product of India. Rising globalization and integration of the Indian economy with the global markets has opened up new opportunities and challenges for the public sector, says a KPMG report. The central public sector enterprises (CPSEs) contribute over 6 percent to the country’s GDP and account for profit of over Rs 125,000 crore.
Many Central PSUs, particularly the Maharatnas, are already global players matching the best global firms in their field of operations. One of the important reasons for the excellent performance of Central PSUs during recent years was the empowerment of the boards of such profit making Central PSUs by the Government leading to greater autonomy. Consequently, such PSUs have been able to effectively use this autonomy to enhance their performance and operate on commercial lines. A K Balyan, MD and CEO of Petronet LNG and a PSU veteran says, “PSU have been a success story in most of the sectors. The government needs to be complimented that across the vital sectors of the industry public sector has contributed immediately by setting up a base and foundation from where the private sector was able to take off and further grow the sector. Now we see private sector thriving on the base created by public sector”. He adds, “We must also acknowledge the fact the most private leading companies across sectors like telecom, petroleum, auto and power are driven by former PSU veterans because the leadership and training they acquired from public sector was unmatched”.
PSUs contributed significantly to the country’s economy. The public sector is an integral part of the Indian economy and a key growth driver. With the advent of globalization the public sector gained credence in the face of faced new challenges in developed economies, says a report of Dun & Bradstreet. This sector provided the required thrust to the economy and developed and nurtured human resources, the vital ingredient for the success of any enterprise. Over the last few years, public sector enterprises have gained tremendous credibility and recognition not just domestically but also in the international markets and the government is now gearing up to cash in on this.
According to the 52nd Public Enterprises Survey for the year 2011-12, brought out in February 2013 by the Department of Public Enterprises on the performance of CPSEs, there were 260 CPSEs in 2011-12, out of which 225 were in operation. The remaining 35 CPSEs were under construction.
The main highlights of the performance of CPSEs during 2011-12 are as follows: The total paid up capital in 260 CPSEs as on March 2012 stood at Rs 163,863 crore compared to Rs 157,438 crore as on March 2011 showing a growth of 4.08 percent. The total investment (equity plus long term loans) in all CPSEs stood at Rs 729,228 crore as on March 2012 compared to Rs. 603,975 crore as on March 2011, recording a growth of 20.74 per cent.
The capital employed (paid –up capital plus reserves and surplus and long term loans) in all CPSEs stood at Rs.13,43,176 crore as on March 2012 compared to Rs, 11,64,178 crore as on March 2011 showing a growth of 15.38 per cent. The total turnover/gross revenue from operations of all CPSEs during 2011-12 was Rs 18,41,927 crore compared to Rs. 14,98,018 crore in the previous year showing an increase of 22.96 per cent. The profit of profit making CPSEs stood at Rs 125,115 crore during 2011-12 compared to Rs 113,944 crore in 2010-11 showing a growth of 9.80 percent. Reserves and surplus of all CPSEs went up from Rs. 560203 crore in 2010-11 to Rs 613,949 crore in 2011-12, showing an increase by 9.59 percent. Net worth of all CPSEs went up from Rs 717641 crore in 2010-11 to Rs 777,812 crore in 2011-12 registering a growth of 8.38 percent.
The contribution of CPSEs to Central Exchequer by way of excise duty, customs duty, corporate tax, interest on Central Government loans, dividend and other duties and taxes increased from Rs.156,751 crore in 2010-12, showing an increase of 2.58 percent.
The foreign exchange earnings through exports of goods and services increased from Rs. 91774 crore in 2010-11 to Rs 124,492 crore in 2011-12 showing a growth of 35.65 per cent. The foreign exchange outgo on imports and royalty, know-how, consultancy, interest and other expenditure increased from Rs. 550,086 crore in 2010-11 to Rs 733,544 crore in 2011-12 showing an increase of 33.35 percent.
The total market capitalization of 44 listed CPSEs, based on the stock price in Bombay Stock Exchange, however decreased from Rs. 15,06,698 crore as on 31.03.2012. Market capitalization of CPSEs, based on the stock price in Bombay stock Exchange, however decreased from 15,06,698 crore as on 31.03.2011 to Rs 12,53, 245 crore as on 31.03.2112. The market capitalization of CPSEs during this period, therefore, decreased by 16.82 percent.
The market capitalization of CPSEs as percent of BSE market capitalization decreased from 22.03 per
cent as on 31.03.2011 to 20.17 percent as on 31.03.2012. This was in line with the over 10 percent fall
in BSE Sensex during the said period.
Last October, Prime Minister Manmohan Singh interacted with Chief Executives of various CPSEs and it was emphasized that domestic demand is the driver for investments. The CPSEs have been asked to use their surplus funds for benefits of their company as well as for the economy. According to estimates, PSUs have investible surpluses of over Rs 250,000 crore. Heads of 25 PSUs, including the cash-surplus ONGC, Coal India, BHEL, NTPC, SAIL and NMDC attended the meeting.
Questions:
1. Discuss the role and contribution of central public enterprises as an integral part of Indian economy and a major driver of economic growth. (10)
2. In spite of laying strong foundation of major industries, public sector enterprise has been facing various shortcomings? Highlight them. What reforms have been initiated by government in this regards? (10)
GM02
Economics & Social Environment
Assignment - II
Assignment Code: 2015GM02A2 Last Date of Submission: 15th May 2015
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. “Industrialization and technology can have both good and bad effects on the environment. But really it is the way in which we use the technology that matters.” Explain with suitable examples.
2. What are the different forms of Regional Trade Agreement? Why are countries going for Regional Trade Agreements? Do RTAs act as blessing or burden?
3. What is the difference between monetary policy and fiscal policy? How effective they are for fighting against economic disturbances like recession.
4. “Increased interaction between nations through globalization must be a good thing”. DO you agree? Why?
Section-B
Case Study
India Inc. shifts focus from mere profitability to meeting societal challenges
Corporates’ social responsibility is a matter intrinsically ingrained in the constitution of India which envisages an economic development that does not result in the concentration of wealth and means of production to the common detriment and that material resources of the community are so disturbed as best to sub serve the common good.
Social responsibility of business refers to what business does over and above the statutory requirement for the benefit of the society. The word responsibility emphasizes that the business has some moral obligations towards the society. The term corporate citizenship is also commonly used to refer to the moral obligations of the business towards the society. It implies that like individuals, corporate are also the part of the society and their behaviour shall be guided by the social norms.
The concept of CSR originated in the 1950s in the USA and the concept came into prominence in public debate during the 1960’s and 1970’s. At that time US had lots of pressing social problems like poverty, unemployment, race, urban blight and pollution. Corporate Social Responsibility became a matter of utmost importance for diverse groups demanding change in the business.
There are various strategic approaches to CSR. Some emphasis risk management for instance through reputation management. Others advocate a more proactive approach to CSR, where finding solutions to social problems becomes part of the company’s business strategy, thereby providing access to important markets. Quite apart from the company’s contribution to society through job creation, taxation and generating economic spillover effects, the company can develop products, services, production methods and business practices that promote development. Examples of this include micro credit, mobile telecommunications, solar power and water supply.
The substance and understanding the concept of CSR are dynamic. The focal issues vary according to the area of activity in question, and change over time. Philanthropy, or donating to good causes, has traditionally been perceived as an expression of a company’s commitment to corporate social responsibility. Many companies continue to view CSR in terms of charity and support to the local community. However, there is a growing tendency to see the core area for practicing social responsibility as the company’s own operations.
Corporate social responsibility offers manifold benefits both internally and externally to the companies involved in various projects.
Externally, it creates a positive image amongst the people for its company and earns a special respect amongst its peers. It creates short term employment opportunities by taking various projects like construction of parks, schools, etc. Working with keeping in view the interests of local community bring a wide range of business benefits. For example, for many businesses, local customers are an important source of sales. By improving the reputation, one may find it easier to recruit employees and retain them. Businesses have a wider impact on the environment also. Plantation and cultivation activities taken up by Intel India are a step towards the same. Recycling used products also acts as a step towards the same. Recycling used products also acts as a step towards minimizing wastes.
Internally, it cultivates a sense of loyalty and trust amongst the employees in the organizational ethics. It improves operational efficiency of the company and is often accompanied by increase in quality and productivity. More importantly, it serves as a soothing diversion from the routine workplace practices and gives a feeling of satisfaction and a meaning to their lives. Employees feel more motivated and thus, are more productive. Apart from this, CSR helps ensure that the organization comply with regulatory requirements.
Questions:
1. What is Corporate Social Responsibility (CSR)? What are the various strategic approaches to CSR?
(10)
2. What are the benefits of CSR? What is your opinion about the current amendments made regarding CSR initiatives in the Companies Bill?
(10)
Economics & Social Environment
Assignment - I
Assignment Code: 2015GM02A1 Last Date of Submission: 15th May 2015
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. “Business Environment may act as stimulant or as a constraint for business management”. Highlight the above statement with suitable example.
2. Why was FERA replaced by FEMA? How both acts are different from each other?
3. Define sick industrial unit? What are the various causes of industrial sickness?
4. Explain with suitable examples the method of SWOT Analysis to scan the environment.
Section-B
Case Study
Indian PSUs: Leading the nation since independence
Public sector enterprises are an integral part of the Indian economy and a major driver of economic growth over the past six decades. Economic reforms of 1991 transformed these companies in size and stature, lading to improvement in productivity and profitability owning to focus on business growth. They competed with major players, both in domestic and international markets and attracted huge investor interest.
In spite of the wave of privatization across India, the centre and state owned enterprises control vast swaths of the national Gross Domestic Product of India. Rising globalization and integration of the Indian economy with the global markets has opened up new opportunities and challenges for the public sector, says a KPMG report. The central public sector enterprises (CPSEs) contribute over 6 percent to the country’s GDP and account for profit of over Rs 125,000 crore.
Many Central PSUs, particularly the Maharatnas, are already global players matching the best global firms in their field of operations. One of the important reasons for the excellent performance of Central PSUs during recent years was the empowerment of the boards of such profit making Central PSUs by the Government leading to greater autonomy. Consequently, such PSUs have been able to effectively use this autonomy to enhance their performance and operate on commercial lines. A K Balyan, MD and CEO of Petronet LNG and a PSU veteran says, “PSU have been a success story in most of the sectors. The government needs to be complimented that across the vital sectors of the industry public sector has contributed immediately by setting up a base and foundation from where the private sector was able to take off and further grow the sector. Now we see private sector thriving on the base created by public sector”. He adds, “We must also acknowledge the fact the most private leading companies across sectors like telecom, petroleum, auto and power are driven by former PSU veterans because the leadership and training they acquired from public sector was unmatched”.
PSUs contributed significantly to the country’s economy. The public sector is an integral part of the Indian economy and a key growth driver. With the advent of globalization the public sector gained credence in the face of faced new challenges in developed economies, says a report of Dun & Bradstreet. This sector provided the required thrust to the economy and developed and nurtured human resources, the vital ingredient for the success of any enterprise. Over the last few years, public sector enterprises have gained tremendous credibility and recognition not just domestically but also in the international markets and the government is now gearing up to cash in on this.
According to the 52nd Public Enterprises Survey for the year 2011-12, brought out in February 2013 by the Department of Public Enterprises on the performance of CPSEs, there were 260 CPSEs in 2011-12, out of which 225 were in operation. The remaining 35 CPSEs were under construction.
The main highlights of the performance of CPSEs during 2011-12 are as follows: The total paid up capital in 260 CPSEs as on March 2012 stood at Rs 163,863 crore compared to Rs 157,438 crore as on March 2011 showing a growth of 4.08 percent. The total investment (equity plus long term loans) in all CPSEs stood at Rs 729,228 crore as on March 2012 compared to Rs. 603,975 crore as on March 2011, recording a growth of 20.74 per cent.
The capital employed (paid –up capital plus reserves and surplus and long term loans) in all CPSEs stood at Rs.13,43,176 crore as on March 2012 compared to Rs, 11,64,178 crore as on March 2011 showing a growth of 15.38 per cent. The total turnover/gross revenue from operations of all CPSEs during 2011-12 was Rs 18,41,927 crore compared to Rs. 14,98,018 crore in the previous year showing an increase of 22.96 per cent. The profit of profit making CPSEs stood at Rs 125,115 crore during 2011-12 compared to Rs 113,944 crore in 2010-11 showing a growth of 9.80 percent. Reserves and surplus of all CPSEs went up from Rs. 560203 crore in 2010-11 to Rs 613,949 crore in 2011-12, showing an increase by 9.59 percent. Net worth of all CPSEs went up from Rs 717641 crore in 2010-11 to Rs 777,812 crore in 2011-12 registering a growth of 8.38 percent.
The contribution of CPSEs to Central Exchequer by way of excise duty, customs duty, corporate tax, interest on Central Government loans, dividend and other duties and taxes increased from Rs.156,751 crore in 2010-12, showing an increase of 2.58 percent.
The foreign exchange earnings through exports of goods and services increased from Rs. 91774 crore in 2010-11 to Rs 124,492 crore in 2011-12 showing a growth of 35.65 per cent. The foreign exchange outgo on imports and royalty, know-how, consultancy, interest and other expenditure increased from Rs. 550,086 crore in 2010-11 to Rs 733,544 crore in 2011-12 showing an increase of 33.35 percent.
The total market capitalization of 44 listed CPSEs, based on the stock price in Bombay Stock Exchange, however decreased from Rs. 15,06,698 crore as on 31.03.2012. Market capitalization of CPSEs, based on the stock price in Bombay stock Exchange, however decreased from 15,06,698 crore as on 31.03.2011 to Rs 12,53, 245 crore as on 31.03.2112. The market capitalization of CPSEs during this period, therefore, decreased by 16.82 percent.
The market capitalization of CPSEs as percent of BSE market capitalization decreased from 22.03 per
cent as on 31.03.2011 to 20.17 percent as on 31.03.2012. This was in line with the over 10 percent fall
in BSE Sensex during the said period.
Last October, Prime Minister Manmohan Singh interacted with Chief Executives of various CPSEs and it was emphasized that domestic demand is the driver for investments. The CPSEs have been asked to use their surplus funds for benefits of their company as well as for the economy. According to estimates, PSUs have investible surpluses of over Rs 250,000 crore. Heads of 25 PSUs, including the cash-surplus ONGC, Coal India, BHEL, NTPC, SAIL and NMDC attended the meeting.
Questions:
1. Discuss the role and contribution of central public enterprises as an integral part of Indian economy and a major driver of economic growth. (10)
2. In spite of laying strong foundation of major industries, public sector enterprise has been facing various shortcomings? Highlight them. What reforms have been initiated by government in this regards? (10)
GM02
Economics & Social Environment
Assignment - II
Assignment Code: 2015GM02A2 Last Date of Submission: 15th May 2015
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. “Industrialization and technology can have both good and bad effects on the environment. But really it is the way in which we use the technology that matters.” Explain with suitable examples.
2. What are the different forms of Regional Trade Agreement? Why are countries going for Regional Trade Agreements? Do RTAs act as blessing or burden?
3. What is the difference between monetary policy and fiscal policy? How effective they are for fighting against economic disturbances like recession.
4. “Increased interaction between nations through globalization must be a good thing”. DO you agree? Why?
Section-B
Case Study
India Inc. shifts focus from mere profitability to meeting societal challenges
Corporates’ social responsibility is a matter intrinsically ingrained in the constitution of India which envisages an economic development that does not result in the concentration of wealth and means of production to the common detriment and that material resources of the community are so disturbed as best to sub serve the common good.
Social responsibility of business refers to what business does over and above the statutory requirement for the benefit of the society. The word responsibility emphasizes that the business has some moral obligations towards the society. The term corporate citizenship is also commonly used to refer to the moral obligations of the business towards the society. It implies that like individuals, corporate are also the part of the society and their behaviour shall be guided by the social norms.
The concept of CSR originated in the 1950s in the USA and the concept came into prominence in public debate during the 1960’s and 1970’s. At that time US had lots of pressing social problems like poverty, unemployment, race, urban blight and pollution. Corporate Social Responsibility became a matter of utmost importance for diverse groups demanding change in the business.
There are various strategic approaches to CSR. Some emphasis risk management for instance through reputation management. Others advocate a more proactive approach to CSR, where finding solutions to social problems becomes part of the company’s business strategy, thereby providing access to important markets. Quite apart from the company’s contribution to society through job creation, taxation and generating economic spillover effects, the company can develop products, services, production methods and business practices that promote development. Examples of this include micro credit, mobile telecommunications, solar power and water supply.
The substance and understanding the concept of CSR are dynamic. The focal issues vary according to the area of activity in question, and change over time. Philanthropy, or donating to good causes, has traditionally been perceived as an expression of a company’s commitment to corporate social responsibility. Many companies continue to view CSR in terms of charity and support to the local community. However, there is a growing tendency to see the core area for practicing social responsibility as the company’s own operations.
Corporate social responsibility offers manifold benefits both internally and externally to the companies involved in various projects.
Externally, it creates a positive image amongst the people for its company and earns a special respect amongst its peers. It creates short term employment opportunities by taking various projects like construction of parks, schools, etc. Working with keeping in view the interests of local community bring a wide range of business benefits. For example, for many businesses, local customers are an important source of sales. By improving the reputation, one may find it easier to recruit employees and retain them. Businesses have a wider impact on the environment also. Plantation and cultivation activities taken up by Intel India are a step towards the same. Recycling used products also acts as a step towards the same. Recycling used products also acts as a step towards minimizing wastes.
Internally, it cultivates a sense of loyalty and trust amongst the employees in the organizational ethics. It improves operational efficiency of the company and is often accompanied by increase in quality and productivity. More importantly, it serves as a soothing diversion from the routine workplace practices and gives a feeling of satisfaction and a meaning to their lives. Employees feel more motivated and thus, are more productive. Apart from this, CSR helps ensure that the organization comply with regulatory requirements.
Questions:
1. What is Corporate Social Responsibility (CSR)? What are the various strategic approaches to CSR?
(10)
2. What are the benefits of CSR? What is your opinion about the current amendments made regarding CSR initiatives in the Companies Bill?
(10)
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