Tuesday, April 15, 2014

MS-03: Economic and Social Environment


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MS-03: Economic and Social Environment

ASSIGNMENT


Course Code                                      :           MS-03
Course Title                                       :           Economic and Social Environment
Assignment Code                               :           MS-03/TMA/SEM-I/2014
Coverage                                            :           All Blocks



Note: Attempt all the questions and submit this assignment on or before 30th April, 2014 to   the coordinator of your study center.


1.  Suppose you have to set up a new business. What would be the purpose of visiting selected industrial departments in the Ministry of Industry and also indicate their functions.

Answer : The ministry aims to develop the industry to ensure effective contribution in the increase in gross domestic product and regulation of commercial activity in accordance with the Constitution and the laws and policy of the state and plan economic and social development and in particular by the following tasks : 
1)      Contribute to the development of general economic policy of the State, plans and programs needed to implement
2)      Develop and implement a strategy of industrial development and regulation of commercial activity and propose policies and programs in accordance with the laws in force.
3)      Proposal and preparation of draft


2.  Explain the growth and structure of the private sector in India.

Answer : The private sector of Indian economy is the past few years have delineated significant development in terms of investment and in terms of its share in the gross domestic product. The key areas in private sector of Indian economy that have surpassed the public sector are transport, financial services etc.


 Indian government has considered plans to take concrete steps to bring affect poverty alleviation through the creation of more job opportunities in the private sector of Indian economy, increase in the number of financial institutions in the




3. Identify the industrial policy of India in which industries were classified into three categories. Explain why this industrial policy is called ‘economic constitution’ of the country.  

Answer : A number of new developments had taken place since the formulation of the 1948 policy. These developments included the adoption of the constitution of India, successful implementation of First Five year Plan (1951-55), formulation of Second Five year plan with greater thrust on industrialisation, adoption of a socialist pattern of society (Avadi session) as the goal of economic and social policy.





4. Discuss the Foreign Trade Regime with special emphasis on analytical phases and changes overtime.
Answer : J. Bhagwati and A. Krueger defined a set of analytical phases in which exchange control regime can be found. However 2 important things must be kept in mind -

1. It is not necessary that a country must pass through all the phases.
2. A country need not pass through the phases in the chronological sequence as given by Bhagwati and Krueger.



5. Briefly discuss the financial sector reforms recommended by the Narasimham Committee.
Answer : The recommendations of Narasimham Committee – II on financial sector reforms
The main recommendations of the Narasimham committee are:
1.       Phased reduction of Statutory Liquidity Ratio to 25 % over a period of five years
2.       Progressive reduction in Cash Reserve Ratio
3.       Phasing out of directed credit programs and redefinition of the priority sector.
4.       Deregulation of interest rates so as to


 6.  Write Short Notes on the following:

a)     Sick Industrial Companies Act, 1985
Answer : According to Companies (Second Amendment) Act, 2002
"'Sick Industrial Company' means an industrial company which has
i) The Accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four years immediately preceding such financial year; or
ii) Failed to repay its debts within any three consecutive quarters on demand made in writing for its repayment by a creditor or creditors of such company."




c)     Administered Prices
Answer : administered price, price determined by an individual producer or seller and not purely by market forces. Administered prices are common in industries with few competitors and those in which costs tend to be rigid and more or less uniform. They are considered undesirable when they cause prices to be higher than a competitive standard, when they are accompanied by excessive non-price competition (efforts to increase sales without enhancing the value of the product), or when they add to inflationary tendencies—either by failure to lower prices in response to cost reductions or by increasing prices to maintain a given margin of profit in the face of rising costs.

The stability of administered prices is counted by some observers as an advantage in its provision of a basis for planning. Some consumers have been

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