BUSINESS ENVIRONMENT SOLVED PAPERS
2011 (November)
Commerce (General/Speciality)
(a) Which of the following is an internal
factor of business environment?
(i) Value system
(ii) Company’s image
(iii) Management
structure
(iv) Company’s
financial position
(v) All of the above factors
(b) There
is no difference between economic growth and economic development. (True of False)
(c) The units set up under SEZ, must be a
foreign exchange earner. (True or
False)
(d) Capital
market deals in short-term/long-term Loanable funds. (True or False) Money
market deals in short-term Loanable funds. Capital market deals with long term
funds.
(e) “Dunkel Draft”
was proposed in the Uruguay round of GATT.
(f) SDR’s are also called as “Paper Gold”.
(g) Write the full form of SAFTA. South Asian Free Trade Agreement
(h) Mention
an adverse impact of globalization on the Indian economy. outsourcing of jobs to developing countries has
resulted in loss of jobs
2. Write short notes on:
(4x4=16)
(a)
SWOT analysis
Ans:
SWOT analysis is a simple
framework for generating strategic alternatives from a situation analysis. It
is applicable to either the corporate level or the business unit
level and frequently appears in marketing plans.
SWOT (sometimes referred to as
TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats.
A SWOT analysis consists of the following two activities:
a. An assessment of the
organization’s internal Strengths and Weaknesses and
b. An assessment of
the Opportunities and Threats posed by its external environment
a) Assessing the Internal Environment
Internal scan or assessment of
the internal environment of the organization involves identification
of its strengths and weaknesses i.e., those aspects that help or hinder
accomplishment of the organization’s mission and fulfillment of its mandate
with respect to the following Four Ps:
1. People (Human Resources)
2. Properties (Buildings, Equipments and other
facilities)
3. Processes (Such as student placement services,
M.I.S etc.)
4. Products (Students, Publications etc.)
b) Assessing the External Environment
External scan refers to exploring the
environment outside the organisation in order to identify the
opportunities and threats it faces. This involves considering the
following:
1. Events, trends and forces in the Social,
Technological, Economical, Environmental and Political areas (STEEP).
2. Identifying the shifts in the needs of
customers and potential clients and
3. Identification of competitors and
collaborators.
(b) Present
International business environment
Ans: The
international business environment can be defined as the environment in
different sovereign countries, with factors exogenous to the home environment
of the organization, influencing decision-making on resource use and
capabilities.
International
business environment refers to totality of all the factors viz. geographic,
economic, financial, socio-cultural, political, legal, technological and
ecological which are external to and beyond the control of individual business
enterprises. International business environment is more complex than the
business environment because international business environment consists of
foreign and global factors, which are external to domestic environment. A firm
is generally familiar with the factors operating at the national level but a
firm has to be aware of various factors operating in a country of trading
partner. Thus, international business environment is sum total of domestic,
foreign and global environments.
International
business environment consists of a number of micro-level and macro-level
factors operating at domestic level, foreign level and global level.
Accordingly various factors constituting business environment may be grouped as
under:
(i) Domestic
Environment
(ii) Foreign
Environment
(iii) Global
Environment
WTO
Ans: Like on the lines of IMF and the World Bank,
it was initially decided at the Bretton Woods conference to set up the International
Trade Organisation (ITO) to promote and facilitate international trade
among the member countries and to overcome various restrictions and
discriminations as were being practiced at that time. But the idea could
not materialise due to stiff opposition from the United States. Instead
of altogether abandoning the idea, the countries that were participants
to the Bretton Woods conference agreed upon having some arrangement
among them so as
to liberalise the world from high customs tariffs and various
other types of
restrictions that were in vogue at that time. This arrangement came to be known
as the General Agreement for Tariffs and Trade (GATT).
GATT came into existence with effect
from 1st January 1948 and remained in force till December 1994. Various
rounds of negotiations have taken place under the auspices of GATT
to reduce tariff and non-tariff barriers. The last one, known as the Uruguay
Round, was the most comprehensive one in terms of coverage of
issues, and also the lengthiest one from the point of view of duration of negotiations
which lasted over a period of seven years from 1986 to 1994.
One of the key achievements of the Uruguay
Round of GATT negotiations was the decision to set up a permanent institution
for looking after the promotion of free and fair trade amongst
nations. Consequent to this decision, the GATT was transformed into World
Trade Organisation (WTO) with effect from 1st January 1995. The head quarters
of WTO are situated at Geneva, Switzerland. Establishment of WTO, thus,
represents the implementation of the original proposal of setting up of the ITO
as evolved almost five decades back.
(c)
World Bank
Ans: The World Bank or the International Bank for
Reconstruction and Development (IBRD) was established in 1945 under the Bretton
Woods Agreement of 1944. An International Monetary and Financial Conference was
held at Bretton Woods, New Hampshire during July 1-22, 1944. The main purpose
of the conference was finalisation of the Articles of Association of IMF and
establishment of an institution for the reconstruction of the war shattered
world economies. Thus, the conference has given birth to World Bank or
International Bank for Reconstruction and Development (IBRD). World Bank was
established to provide long-term assistance for the reconstruction and
development of the economies of the member countries while IMF was established
to provide short term assistance to correct the balance of payment
disequilibrium.
There are
the four basic objectives of the World Bank’s funding strategy:
a) To make
sure availability of funds in the market.
b) To provide
the funds at the lowest possible cost to the borrowers through appropriate
currency mix of its borrowing and opting to borrow when interest rates are
expected to rise.
c) To control
volatility in net income and overall loan changes.
d) To provide
an appropriate degree of maturity transformation between its lending and the
borrowing. Maturity transformation depicts the Bank’s capacity to lend for
longer period than it borrows.
3. (a) Explain the
concept and significance of business environment. (7+7=14)
Ans: Concept: Business Environment
Business is any activity undertaken for the
purpose of producing or selling a particular commodity r service and earns a
profit. The business has several dimensions such as purchasing the inputs,
converting the inputs into the output, selling that output at a profitable
price. Every dimension of a business depends upon several factors. Hence a
business is influenced by several factors, all them put together are described
as Business Environment. A business can grow and prosper in a particular
environment just as a plant can grow in a particular soil, climate, water
supply etc. Hence the entrepreneur has
to pay attention to the environment in which he has to conduct his business
activities. If he is able to adapt his business to the environment effectively
and efficiently the business can make higher profits. This makes the study of
business environment important.
According to Keith Davis, “Business environment
is the aggregate of all conditions, events and influences that surrounds and
affects the business.”
According
to wheeler, “Business environment is the total of all things external to
business firms and industries which affect their organisation and operations.”
Importance of Business Environment
There
is a close and continuous interaction between the business and its environment.
This interaction helps in strengthening the business firm and using its
resources more effectively. As stated above, the business environment is
multifaceted, complex, and dynamic in nature and has a far-reaching impact on
the survival and growth of the business. To be more specific, proper
understanding of the social, political, legal and economic environment helps
the business in the following ways:
1. Determining
Opportunities and Threats: The
interaction between the business and its environment would identify
opportunities for and threats to the business. It helps the business
enterprises to exploit business opportunities and face the threat associated
with such opportunities. For example, Maruti Udyog became the leader in the
small car market because it was the first to recognize the need for small cars
in India.
2. Continuous
Learning: Environmental analysis makes the task
of managers easier in dealing with business challenges. The managers are
motivated to continuously update their knowledge, understanding and skills to
meet the predicted changes in realm of business.
3. Image
Building: Environmental understanding helps the
business organisations in improving their image by showing their sensitivity to
the environment within which they are working. For example, in view of the
shortage of power, many companies have set up Captive Power Plants (CPP) in
their factories to meet their own requirement of power.
4. Ensures Optimum Utilization of Resources: The study of business environment is needed as it ensures optimum
use of resources available. For this, the study of economic and technological
environment is useful. Such study enables organization to take full benefit of
government policies, concessions provided, and technological developments and
so on.
5. Giving
Direction for Growth: The
interaction with the environment leads to opening up new frontiers of growth
for the business firms. It enables the business to identify the areas for
growth and expansion of their activities.
6. Coping
with rapid changes: All sizes and all types of enterprises are
facing increasingly dynamic environment. In order to effectively cope with
these significant changes, managers must understand and examine the environment
and develop suitable courses of action.
7. Improving
performance and meeting competition: the enterprises that continuously
monitor their environment and adopt suitable business practices are the ones
which not only improve their present performance but also continue to succeed
in the market for a longer period.
8. Identifying
Firm’s Strength and Weakness: Business
environment helps to identify the individual strengths and weaknesses in view
of the technological and global developments.
9. Keeping Business Enterprise Alert: Environment
study is needed as it keeps the business unit alert in its approach and
activities. In the absence of environmental changes, the business activities
will be dull and lifeless. The problems & prospects of business can be
understood properly through the study of business environment. This enables an
enterprise to face the problems with confidence and secure the maximum benefits
of business opportunities available.
10. Understanding Future Problems and Prospects: The study of business environment enables to understand future
problems and prospects of business in advance. This enables business
organizations to face the problems boldly and also take the benefit of
favorable situation.
Or
(b) Discuss the external
factors of business environment. 14
Ans: External Environment: The external environment is made up of
micro and macro environment.
Micro Environment: This refers to the factors which
influence the prospects of a particular firm; the firm can influence them with
certain efforts. They are as follows:
a)
Customers: The type and the nature of the customers influence the rate of
growth of any firm. The firm has to be very particular about choosing the
inputs and transforming them in to the output. The cost factor is subsidiary if
the firm is dealing with such customers. If the customers are more commoners
the quality of the commodity if less important than the cost of production. The
customers want the commodity at a lower price so the firm will have to
conscious about the cost in purchasing the inputs, in employment of labour, in
packing and such other factors influencing the cost.
b)
Competitors: In modern age an absolute
monopoly is a very rare thing. Most of the FIRMS have to work in some type of
competition such as Monopolistic Competition or Oligopoly. A Firm has to be
particular about the intensity of the competition. If the competition is severe
the firm will have to be very particular about keeping the costs at the lowest
level so that it can sell the commodity at a competitive price.
c)
Suppliers: The quality of the
commodity and the cost of production are considerably influenced by the supplies
of the inputs. If the inputs are supplied at economical prices, are of standard
quality and if the supply is uninterrupted and timely the firm can produce a
standard quality of a commodity and sell it at reasonable prices. Often the
firms employ more than one supplier so as to ensure an uninterrupted supply of
inputs. If the supplies of inputs are regular, consistent and reliable there is
no need to keep a larger quantity in stock.
d) Channel
Intermediaries: They refer to the different levels in the chain from the
production unit to the final customer. The chain incorporates the stockists,
the wholesalers, the distributors, the retailer etc. If there is a high level
of efficiency maintained at every part of the chain the commodity can reach the
final consumer in good condition and at a reasonable price. So the Firm has to
select and maintain efficient intermediaries. The firm has to offer them proper
terms
e)
Society: The prospects of a firm depend upon the society in which it has
to work and sell its products. In a homogenous society the job of the firm is
easy. The people have almost the same habits likes and dislikes, values and
ethical norms. In a heterogeneous society the job of the firm is difficult. A
particular product may be acceptable to a particular section of the society but
not acceptable to some other sections. In a country like India a firm has to
into consideration all types of sections of the community such as the religious
sections, the caste, the sect, language, region etc.
Conclusion:
All
these forces influence the chances available to a firm to survive and develop.
Macro Environment: The macro
environment comprises of those forces which influence all business firms
operating in an economy. They can be studied under the following categories:
economic environment, political and regulatory environment, social/ cultural
environment, demographic environment and technological. The components of these
environments are discussed as below:
a) Economic Environment: The survival and success of each and
every business enterprise depend fully on its economic environment. The main
factors that affect the economic environment are:
(i) Economic
Conditions: The economic conditions of a nation refer to a set of
economic factors that have great influence on business organisations and their
operations. These include gross domestic product, per capita income, markets
for goods and services, availability of capital, foreign exchange reserve,
growth of foreign trade, strength of capital market etc. All these help in
improving the pace of economic growth.
(ii) Economic
Policies: All business activities and operations are directly influenced
by the economic policies framed by the government from time to time. Some of
the important economic policies are: Industrial policy, Fiscal policy, monetary
policy, foreign investment policy and Export –Import policy. The government
keeps on changing these policies from time to time in view of the developments
taking place in the economic scenario.
(ii) Economic
System: The world economy is primarily governed by three types of
economic systems, viz. Capitalist economy; Socialist economy; and Mixed
economy. India has adopted the mixed economy system which implies co-existence
of public sector and private sector.
b) Political Environment: This includes the political system, the government policies and
attitude towards the business community and the unionism. All these aspects
have a bearing on the strategies adopted by the business firms. The stability
of the government also influences business and related activities to a great
extent. It sends a signal of strength, confidence to various interest groups
and investors.
c) Legal Environment: This refers to set of laws,
regulations, which influence the business organisations and their operations.
Every business organisation has to obey, and work within the framework of the
law. The important legislations that concern the business enterprises include:
Companies Act, 1956, Foreign Exchange Management Act, 1999, The Factories Act,
1948, Industrial Disputes Act, 19112, Payment of Gratuity Act, 19112,
Industries (Development and Regulation) Act, 1951 etc. Besides, the above
legislations, the following are also form part of the legal environment of
business:
(i) Provisions
of the Constitution
(ii) Judicial
Decisions.
d)
Social Environment: The social
environment of business includes social factors like customs, traditions,
values, beliefs, poverty, literacy, life expectancy rate etc. The social
structure and the values that a society cherishes have a considerable influence
on the functioning of business firms. For example, during festive seasons there
is an increase in the demand for new clothes, sweets, fruits, flower, etc.
e) Technological Environment: Technological environment include the methods,
techniques and approaches adopted for production of goods and services and its
distribution. The varying technological environments of different countries
affect the designing of products. In the modern competitive age, the pace of
technological changes is very fast. Hence, in order to survive and grow in the
market, a business has to adopt the technological changes from time to time.
f) Demographic Environment: This refers to the size, density,
distribution and growth rate of population. All these factors have a direct
bearing on the demand for various goods and services.
g) Natural Environment: The natural environment includes
geographical and ecological factors that influence the business operations.
These factors include the availability of natural resources, weather and
climatic condition, location aspect, topographical factors, etc. Business is
greatly influenced by the nature of natural environment. For example, sugar
factories are set up only at those places where sugarcane can be grown. It is
always considered better to establish manufacturing unit near the sources of
input.
4. (a) What do you mean by
“Business cycle”? Explain the phases of business cycle with the help of a
diagram. (4+10=14)
Ans: Business Cycle – Meaning,
Phases and characteristics
The business cycle is an alternate
expansion and contraction in overall business activity, as evidenced by
fluctuations in aggregate economic activity such as GNP, industrial
production, employment and income.
According to J.M.Keynes “A Business
cycle is composed of periods of good trade characterized by rising prices and
low unemployment percentages, alternating with periods of bad trade
characterized by fall in prices and high unemployment percentages.”
Phases of a Business Cycle: A
business cycle will have 5 different phases or stages. They are
1) Depression
2) Recovery
3) Prosperity
or full employment
4) Boom
or overfull employment
5) Recession
(1) Depression: During this period
business activity in the country will be much below normal level. It is
characterized by a short fall in production, mass unemployment, and fall in
prices, low wages, and contraction of credit, a high rate of business failures
and an atmosphere of all round pessimism.
(2) Recovery: During this period
business activity increases. The industrial production and volume of employment
steadily increases. The prices and wages increases. The recovery may take place
due to the following reasons:
•New government expenditure
•Exploitation of new sources of
energy
•Innovations
•Investment in new areas
•Changes in the techniques of
production
(3) Prosperity: This stage is
characterized by high capital investment in basic industries, expansion of bank
credit, high prices, high profits, high rate of formation of new business
enterprises and the full employment.
(4) Boom: It is the stage of rapid expansion
in business activity resulting in high stocks and commodity prices, high
profits and over-full employment. A situation develops in which the no. of jobs
exceeds the no. of workers in the market. Such a situation is known as
over-full employment. Profits will further increase. This will lead to more
investment and in turn further rise in price level and inflation.
(5) Recession: In this stage more
business enterprises fail, prices collapse and confidence is shaken. Building
construction slows down and unemployment increases. There is fall in income
during recession.
Or
(b) Explain the causes of
industrial sickness and analysis the effects of it in the north-eastern region
of India. (10+4=14)
Ans: Industrial Sickness – Meaning, Causes and Remedies
Industrial sickness is a
universal phenomenon. It is a major problem of all industries in the world
whether it is developed or developing countries. It is a serious matter of the
countries.
Definition of a sick unit is
given by Sick Industrial companies act, 1985. According to the act “ The sick
industrial company is a company which has at the end of any financial year
accumulated losses equal to or excluding its entire net worth and has also
suffered cash losses in that financial year and in the financial year
immediately preceding it.”
According to state bank of
India,” A sick unit is that unit which falls to generate internal surplus on a
continuing basis and depends for its survival on subsequent infusion of
external funds”.
Industrial sickness
especially in small-scale Industry has been always a demerit for the Indian
economy, because more and more industries like – cotton, Jute, Sugar, and
Textile small steel and engineering industries are being affected by this
sickness problem.
CAUSES OF INDUSTRIAL SICKNESS
1) Internal Cause for sickness: Internal causes are those which are within the control of
management. This sickness arises due to internal disorder in the areas
justified as following:
a) Lack of Finance:
This including weak equity base, poor utilization of assets, inefficient
working capital management, absence of costing & pricing, absence of
planning and budgeting and inappropriate utilization or diversion of funds.
b) Bad Production
Policies : The another very important reason for sickness is wrong
selection of site which is related to production, inappropriate plant &
machinery, bad maintenance of Plant & Machinery, lack of quality control,
lack of standard research & development and so on.
c) Marketing and Sickness:
This is another part which always affects the health of any sector as well as
SSI. This including wrong demand forecasting, selection of inappropriate product
mix, absence of product planning, wrong market research methods, and bad sales
promotions.
d) Inappropriate Personnel
Management: The another internal reason for the sickness of SSIs is
inappropriate personnel management policies which includes bad wages and salary
administration, bad labour relations, lack of behavioural approach causes
dissatisfaction among the employees and workers.
e) Ineffective Corporate
Management: Another reason for the sickness of SSIs is ineffective or bad
corporate management which includes improper corporate planning, lack of
integrity in top management, lack of coordination and control etc.
2) External causes for sickness:
a) Personnel Constraint: The
first for most important reason for the sickness of small scale industries are
non availability of skilled labour or manpower wages disparity in similar
industry and general labour invested in the area.
b) Marketing Constraints: The
second cause for the sickness is related to marketing. The sickness
arrives due to liberal licensing policies, restrain of purchase by bulk
purchasers, changes in global marketing scenario, excessive tax policies by
govt. and market recession.
c) Production
Constraints: This is another reason for the sickness which comes under
external cause of sickness. This arises due to shortage of raw material,
shortage of power, fuel and high prices, import-export restrictions.
d) Finance
Constraints: The external cause for the sickness of SSIs is lack of
finance. This arises due to credit restrains policy, delay in
disbursement of loan by govt., unfavorable investments, fear of
nationalization.
INDUSTRIAL SICKNESS IN
NORTH EAST REGION
The economy of North- East India has
got its definite identity due to its peculiar physical, economic and
socio-cultural characteristics. This region consists of eight states viz.,
Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and
Sikkim. The NER of India covers an area of 2.62 lakh sq.km. It accounts for
7.9% of total geographical area of the country. With a total population of 39
million (2001), it accounts for 3.8% of total population of India.
There are differences among the eight
States in the North Eastern region with respect to their resource endowments,
level of industrialization as well as infrastructural facilities. The
industrial sector has mainly grown around tea, petroleum (crude), natural gas
etc. in Assam and mining, saw mills and steel fabrication units in other parts
of the region. The full potential of the region is yet to be exploited and this
has left the economy in a primarily agrarian state.
Industrially, the NER continues to be
the most backward region in the country, and the states in the region hardly
have any industrial base, except perhaps Assam, because of its traditional tea,
oil and wood based industries .To some extent Meghalaya has made some headway
in setting up of small and medium industries.
Effect of sickness : Industrial Sickness contributes to high cost economy. This in turn, will
affect the competitiveness of the economy at home and abroad. Dead investment
is a burden on both banks and budgets and ultimately consumers should pay the
high cost. Money locked up in sick units gives no returns and effects the
availability of resources to the other viable units
5. (a) Discuss the salient
features of New Industrial Policy (1991) of India. 14
Ans: New Industrial Policy, 1991
In
order to solve economic problems of our country, the government took several
steps including control by the State of certain industries, central planning
and reduced importance of the private sector. The main objectives of India’s
development plans were:
a. Initiate
rapid economic growth to raise the standard of living, reduce unemployment and
poverty;
b. Become
self-reliant and set up a strong industrial base with emphasis on heavy and
basic industries;
c. Reduce
inequalities of income and wealth;
d. Adopt a
socialist pattern of development based on equality and prevent exploitation of
man by man.
As
a part of economic reforms, the Government of India announced a new industrial
policy in July 1991. The broad features of this policy were as follows:
a. The
Government reduced the number of industries under compulsory licensing to six.
b. Policy
towards foreign capital was liberalized. The share of foreign equity
participation was increased to 51% and in many activities 100 per cent Foreign
Direct Investment (FDI) was permitted.
c. Government
will encourage foreign trading companies to assist Indian exporters in export
activities.
d. Foreign
Investment Promotion Board (FIPB) was set up to promote and channelise foreign
investment in India.
e. Automatic
permission was now granted for technology agreements with foreign companies.
f.
Relaxation of MRTP Act (Monopolies and
Restrictive Practices Act) which has almost been rendered non-functional.
g. Dilution
of foreign exchange regulation act (FERA) making rupee fully convertible on
trade account.
h. Disinvestment
was carried out in case of many public sector industrial enterprises incurring
heavy losses.
i.
Abolition of wealth tax on shares.
j.
General reduction in customs duties.
k. Provide
strength to those public sector enterprises which fall in reserved areas of
operation or in high priority areas.
l.
Constitution of special boards to negotiate
with foreign firms for large investments in the development of industries and
import of technology.
Or
(b) Describe the salient
features of Government of India’s latest Industrial Policy for the
North-Eastern Region. 14
Ans: Ans: North East Industrial and Investment Promotion Policy
(NEIIP, 2007)
(i)
Sikkim will be included under NEIIPP, 2007 and
the ‘New Industrial Policy and other concessions for the State of Sikkim’
announced earlier in December, 2002 will be discontinued from the date of
notification of NEIIPP, 2007.
(ii)
Under NEIIPP, 2007, all new units as well as
existing units which go in for substantial expansion, unless otherwise
specified and which commence commercial production within the 10 year period
from the date of notification of NEIIPP, 2007 will be eligible for incentives
for a period of 10 years from the date of commencement of production.
(iii)
The incentives under the NEIIPP, 2007 will be
available to all industrial units, new as well as existing units on their
substantial expansion, located anywhere in the North Eastern
Region. Consequently, the distinction between ‘thrust’ and ‘non
thrust’ industries made in NEIP, 97 will be discontinued from the date of
notification of NEIIPP, 2007.
(iv)
Under NEIIPP, 2007 incentives on substantial
expansion will be given to units effecting ‘an increase by not less than 25% in
the value of fixed capital investment in plant and machinery for the purpose of
expansion of capacity/modernization and diversification’ as against an increase
by 33 ½ % prescribed at present.
(v)
Under NEIIPP, 2007, 100% excise duty exemption
will be continued as at present on finished products made in the North Eastern
Region. However, in cases, where the CENVAT paid on the raw
materials and intermediate products going into the production of finished
products (other than the products which are otherwise exempt or subject to nil
rate of duty) is higher than the excise duties payable on the finished
products, ways and means to refund such overflow of CENVAT credit will be
separately notified by the M/O Finance.
(vi)
100% income tax exemption will continue under
NEIIPP, 2007 as at present.
(vii) Capital
investment subsidy will be enhanced from 15% of the investment in plant and
machinery to 30% and the limit for automatic approval of subsidy at this rate
will be Rs. 1.5 crore per unit as against Rs. 30 lakhs at
present. Such subsidy will be applicable to units in the private
sector, joint sector, cooperative sector as well as the units set up by the
State Governments of the North Eastern Region. For grant of capital
investment subsidy higher than Rs. 1.5 crore but upto a maximum of Rs.30 crore,
there will be an Empowered Committee.
(viii) Interest
subsidy will be made available @ 3% on working capital loan under NEIIPP, 2007
as at present.
(ix)
Under NEIIPP, 2007, new industrial units as
well as the existing units on their substantial expansion will be eligible for
reimbursement of 100% insurance premium under the Comprehensive Insurance
Scheme.
(x)
To include tobacco and tobacco products, pan
masala, plastics carry bags and goods produced by refineries, in a host of
industries which would not be eligible for incentives under NEIIPP, 2007.
(xi)
To provide incentives to service sector,
bio-technology and power generating industries.
(xii) To
continue North Eastern Development Finance Corporation Ltd. (NEDFi) as the
nodal agency for disbursal of subsidies under NEIIPP, 2007.
The
provisions of the NEIIPP, 2007 would provide the requisite incentives as well
as an enabling environment to speed up the industrialization of the North
Eastern Region which is otherwise less than 4% p.a. against a national average
of 8%.
6. (a) What is meant by
“Monetary policy”? Discuss the objectives of monetary policy in a developing
economy. (4+10=14)
Or
(b) Explain the quantitative
credit control measures of central bank. 14