Category: Industry

Major causes leading to inflation are as follows: Causes 1. Increase in money supply: Over the last few years the rate of increase in money supply has varied between 15 and 18 per cent, whereas the national output has increased at an annual average rate of only 4 per cent.Hence the rate of increase in output has not been sufficient to absorb the rising quantity of money in the economy. Inflation is the obvious result. Image Source: weknowyourdreams.com 2. Deficit financing: When the government is unable to raise adequate revenue for its expenditure, it resorts to deficit financing. During the sixth and seventh Plans, massive doses of deficit financing had been resorted to. It was Rs. 15,684 crores in the sixth Plan and Rs. 36,000 crores in the seventh Plan.…

Constructed in different parts of India some more youth hostels are coming up in the north-eastern region. In order to consider and recommend measures necessary for the promotion of tourist traffic to India from other countries and from one part of the country to another, a Tourism Advisory Board has been constituted. The Board reviews the tourist trends and suggests appropriate measures.In October 1966, a public sector enterprise called India Tourism Development Corporation (1TDC) was set up for the progressive development of tourist infrastructure. It operates India’s largest accommodation chain-the Ashok Group-comprising several hotels spread throughout India. In January, 1983, the Government set up the Indian Institute of Tourism and Travel Management. This Institute organises seminars, workshops on Hotel Management, restaurant management, tourism planning, etc.As a matter of fact, India…

In a mixed economy, the entire economic system is divided into three parts:(i) Sectors which are exclusively controlled and managed by the private enterprise subject to the general control and regulation by the State; ADVERTISEMENTS: (ii) Sectors which are exclusively controlled and managed by the State; and(iii) Sectors which are jointly managed and controlled by the state and private enterprise. Image Source: i.ytimg.com Essential Parts of the Economic System 1. Private Sector: There is a vast private sector in India dealing with both production and distribution of goods and services. The private ownership has taken many forms—single proprietorship, partnership, joint stock companies and co-operatives.The private sector produces and distributes a major proportion of the total product of the country. This is quite clear from the fact that it contributes to…

Anybody would know an underdeveloped country when he sees one. It is a country characterised by poverty, with beggars in the cities, and villagers eking out a bare subsistence in the rural areas.It is a country lacking in factories of its own. It usually has insufficient roads and rail-roads, insufficient government services and poor communication. It has few hospitals and few institutions of higher learning.Most of its people cannot read and write. In spite of the generally prevailing poverty of the people, it may have isolated islands of wealth with a few persons living in luxury. Its banking system is poor, small loans have to be obtained through money-lenders who are little better than extortionists. Image Source: cdn.publishyourarticles.net ADVERTISEMENTS: The exports of an underdeveloped country usually consist of raw materials…

A business manager lives, moves and operates in an environment and does not function in a vacuum. The success or failure of a manager depends upon a number of factors which may not be always within his control. A manager who takes decision cannot neglect the importance of his environment. Economic Environment Environment refers to the sum total of all factors— economic, political, social and cultural—which are external to and beyond the control of the individual business enterprises and their management.Environment furnishes the macro- contexts, while the business firm is the micro-unit. The environmental factors are ‘given’ within which the firm operates. Image Source: abc.net.au ADVERTISEMENTS: The environmental factors are numerous and complex. Some of these factors are static while others are dynamic.The environmental factors generally vary from country to…

The differences between the small-scale and cottage industries are basically two:(a) While small-scale industries are mainly located in urban centres as separate establishments, the cottage industries are generally associated with agriculture and provide subsidiary employment in rural areas and(b) While small-scale industries produce goods with mechanised equipment employing outside labour, the cottage industries involve operations mostly by hand which are carried on primarily with the help of the members of the family. ADVERTISEMENTS: The Fiscal Commission (1949) also made a distinction between small-scale and cottage industries in this manner:A cottage industry is one which is carried on wholly or primarily with the help of members of the family either, as a whole or part- time occupation. Image Source: cdn.shareyouressays.comA small-scale industry, on the other hand, is one which is operated…

External Causes: 1. Power Cuts: A large number of industrial units, particularly in West Bengal and Bihar, face power cuts from time to time. Power cuts are necessitated by the fact that generation of power is much below its actual requirements. Image Source: i.vimeocdn.com 2. Erratic Supply of Inputs: Lack of regular supply of raw materials and other inputs disturb the production schedule causing losses to the unit. This is particularly the case of units depending upon the supply of imported inputs. Also transport bottlenecks sometimes affect the supply of inputs. 3. Recession: General recessionary trends in the market adversely affect the demand for most of the goods resulting in unsold stocks and losses to individual units. Products with high prices like cars, tractors, VCR etc. depend for their sustained…

An important case of imperfect competition is that of oligopoly. While monopolistic competition is more frequently found than pure competition in modern industry, however, it is not the typical market form. Oligopoly is the typical market form, many of the markets being oligopolistic.A large proportion of output in a modern industrial economy is accounted for by industries where all or most of the output is produced by a small number of large firms.Here, competition is much less impersonal than in monopolistic competition because the number of producers is fewer. If any firm cuts its price, the other firms will know who the price cutter was. Image Source: financialtribune.com ADVERTISEMENTS: Each firm, therefore, has to watch closely what its competitors are doing because any action by one of the competitors is…

Government is a very powerful institution which can create a favourable business environment. We can study its role under the following heads: Role 1. Government: Regulator of Business: The entire regulatory legislations and policies stand covered under this segment. On the one hand, there is a very large indirect area of government control over the functioning of private sector business through budgetary and monetary policies.But against this there is also a fast expanding area of direct administrative or physical controls through which the government seeks to ensure that private investment and production in industry and the use of scarce resources conform to government’s basic socio-economic objectives. Image Source: frozenfoodeurope.com ADVERTISEMENTS: They have become necessary tools in a system which seeks to avoid total nationalisation of resources.Government’s regulatory functions with regard…

Important factors that are involved in demand forecasting: Factors (i) Period of forecasting: Demand forecasting may be short-term or long-term. A short-term demand may cover a period of three months, six months or one year but not exceeding one year and long forecasting covers a period exceeding 5 years.A business should forecast short term as well as long term sales/demand for its products to have a clear view of business activities. ADVERTISEMENTS: An alternative method may be to associate the long term and short term forecasting with certain types of decisions.Thus, short term forecast is one which provides information for day to day operations within the limits of resources currently available. Whereas long term forecasting is more concerned with decisions extending or reducing the units of resources. Image Source :…