Ambedkar 2017 Trade in early India was not entirely - - PowerPoint PPT Presentation

Economic Thoughts of Ambedkar

2017

• Trade in early India was not entirely
• individualistic. There is enough evidence

to show the corporate commercial activity and partnership in Trade were occasional, if not general.

• The trade between India and Judea does

not date with Soloman: it enjoys considerable antiquity; mentions

• f Qphir are to be found long before the

time of Soloman in the I Chronicles XXIX, 4, I kings XXII 48, and in Isaiah, XIII 12.

• These Biblical evidences may be

supplemented by linguistic evidences, such as the Hebrew word tuki which is but a little changed form of the poetical word Tokei i. e. the Tamil- malayalam language for peacock or the Hebrew word Ahalim or Aholoth—* aloes. *—a corruption of the Tamil-malayalam word, Aghil.[f34]

• Certain of the Tamil poets have beautifully

described some of the commercial ports and towns in southern India. One of them says, " The thriving town of Muchiri, where the beautiful large ships of the Yavans,bringing gold, the gold received from ships, in exchange for articles sold, is brought to shore in barges at Muchiri,

Deendayal Upadhyay “I visualize for

India a decentralized polity and self-reliant economy with the village as the base. We cannot rely upon superficial Western concepts like individualism, socialism, communism, capitalism and need to be rooted in the timeless traditions of our ancient culture. He was of the view that the Indian intellect was getting suffocated by Western theories and ideologies and consequently there was a big roadblock

• n the growth and expansion of original

Bharatiya thought. 1960s

Humankind, according to Upadhyaya, had four hierarchically organized attributes of body, mind, intellect and soul which corresponded to four universal

• bjectives,

kama (desire

• r

satisfaction), artha (wealth), dharma (moral duties) and moksha (total liberation or 'salvation'). While none could be ignored, dharma is the 'basic', and moksha the 'ultimate' objective of humankind and society. He claimed that the problem with both capitalist and socialist ideologies is that they only consider the needs of body and mind, and were hence based on the materialist objectives of desire and wealth

Indian Financial and Business Models 8

Features of Indian Business Models

Dominance of Non-corporate Sector Generation of funds from

• wn and close

sources Family Business Community Drive Relationship, Faith and Goodwill as the Base Less Dependence

• n State

Risk-bearing Nature

Indian Financial and Business Models 9

Family Orientation

• Age-old , rich and continuous tradition of family business
• Predominant proprietorship pattern
• Required finance for initial investment raised through

family savings, earnings of the family, support from relatives and friends, and borrowings from local financiers using family goodwill and against family assets

• Two outstanding features of India’s family business:

 Tradition of surrendering one’s individuality before the family  Attitude of self-denial and dedication

• Families provide continuity to business
• Family and ethnic ties give competitive advantage
• Advantages of division of responsibilities, pooling of

talents and sharing of risks

Indian Financial and Business Models 10

Dominance of Non-corporate Sector

Industry 2002 - 03 Manufacturing 36.6 Construction 62.8 Trade, hotels and restaurants 74.2 Transport, storage and communication 62.9 Financing, insurance, real estate & business services 39.6 Community, social & personal services 17.3 Net domestic product at factor cost 56.7 Share of Unorganized Segment in Net Domestic Product by Economic Activity

• Share of non-corporate sector to the Indian economy and

business is much higher than other sectors

Source: Statement 76.3, Statement of National Account Statistics 2005, Central Statistical Organization, Government of India.

Indian Financial and Business Models 11

• Significant role in providing employment
• The non-corporate sector businesses develop on their own

without spending on the state  Out of the 10.52 million units in the SSI sector, only 4.55% units have outstanding loans with institutional sources  40% of these units function without making use of power

• The non-corporate sector continuously produces lakhs of

entrepreneurs every year making India one of the largest entrepreneurial nations in the world. Local entrepreneurs have devised business models that suit their conditions and systems

• Rests on the larger foundations of Indian ethos and values

Dominance of Non-corporate Sector

Indian Financial and Business Models 12

• Most of the funds are usually generated by the promoters

through savings and close sources of networks

• A study of the branded ghee business in Tamil Nadu

revealed that in almost all the cases the families provided the entire funds to start businesses

• Ladies play an important role in financing:

 Contribute funds to businesses  Market household products  Control family earnings to secure commodities necessary for the family

• In a few cases, dowries have played the crucial role in the

promotion of ventures

• Local financiers play a notable role in many centres

cont….

Generation of Funds

Indian Financial and Business Models 13

cont….

• Businessmen prefer local financiers to banks due to

reasons such as convenience, easy availability and lack of rigid formalities and procedures

• Businessmen in clusters usually invest most of their

surpluses back into the business for expansion and diversification

• An analysis by the Economic Times Intelligence Group

noted that the Indian companies in the FMCG category ‘seem to be almost thrice as efficient as global heavyweights when it comes to utilization of capital.’ It showed that for every rupee invested, the Indian companies generated Rs 4/- worth of sales, whereas it as only Rs 1.50/- for multinationals

Indian Financial and Business Models 14

• Indian business is society-driven. It is the society that

promotes and drives businesses

• Community relationships provide certain benefits and cost

advantages in business:  Trust – communities generate high level of trust due to their close-knit relationships  Lower transaction costs – this results in increased efficiency and reduction in costs (division of labour)

• The World Bank has acknowledged that the community-

based relationships help business to become competitive in the international market

• Higher and similar value systems prevail among different

business communities across the country

Community Drive

Indian Financial and Business Models 15

• Indian economy and business had largely remained a

product of the society, until the intervention of the British

• Indian mind has always been a self-dependent, and not a

state-dependent, one

• Post independence, this self-dependent mind led to the

large-scale developments in various sectors

• The independent attitude of Indians has made them to

develop all the facilities that they require on their own initiatives without depending on the state

• While the different sectors of businesses grow with the

support

• f

the state and institutional mechanisms in developed countries, much of the Indian businesses have grown on their own

Less Dependence on State

Indian Financial and Business Models 16

• Indian businessmen generally tend to bear all the risks

upon themselves

• Non-corporate sector:

 Owners shoulder all the risks  Take up all the responsibility for their investments

• Proprietorship units:

 Proprietors take all the risks on their shoulders  Partners share the risks

• Corporate sector:

 Dependence

• f

companies

• n

equity markets is generally low, compared to the western countries

Risk-bearing Nature

Sectoral Contribution in Growth

1.Traditional Society, majority of workforce is based on agricultural activities 2.Phase of Industrialisation ruled by manufacturing sector 3.Growth of services sector

18

Facts and Figures

19

Ease of Doing Business

20

Need for Make In India

21

To

• Difficult business environment: India ranks 134 out
• f 189 countries in the World Bank’s ease of doing

business index in 2014

• Slow growth of manufacturing sector: Share has

stagnated at around 15 percent of the GDP. The aim

• f this campaign is to grow this to a 25%
• Need to create jobs : By 2025 will see GDP double.

India will add over 80 million net new job seekers. But

• nly 30 million net new jobs will be created .

A focus on labour- intensive sectors in manufacturing will lead to creation of numerous job opportunities.

Inception of Make in India

• International marketing campaigning slogan

coined by the Prime Minister of India

• It was a campaign directly coming from the

PMO, after winning full majority in the general elections in 2014, the nation was highly ambitious and eagerly waiting for a turnaround

• It did not require much of parliamentary

approvals, passing any bills in the parliament was easy as the government had full support

• It was supported by a series of budgetary

allocation in the fiscal years of 2015-16 and 2016-17

22

Budget 2015: Big push for PM Modi's 'Make in India' initiative

• Reduction of customs duty on 22 items
• Cutback in taxes for technical services from 25 per cent to 10

per cent

• Reduction in corporate tax from 30 per cent to 25 per cent
• Tax breaks and other incentives for several sectors etc.
• Allocate Rs 34,699 crore under the rural job scheme.
• The government has also decided to launch National

Investment and Infrastructure Fund with a corpus of Rs 20,000 crore to help boost the sector.

• Between September 2014 and November 2015, the

government received Rs 1.20 lakh crore in proposals from companies interested in manufacturing electronics in India.

• Rate of Income-tax on royalty and fees from technical services

reduced from 25% to 10% to facilitate technology inflow

23

Budget 2016: Government gives big push to Make in India

• Allowing new manufacturing companies an option to be taxed at 25% plus

surcharge and cess, provided they do not claim profit-linked or investment- linked deductions will provide with improved cash flow in the initial 2-3 years.

• The revised Customs and excise duty rates to give cost benefits to key areas
• f Make in India drive such as IT hardware, capital goods, defence

production and textiles, among others.

• The government tried to curb imports of mobile handset components by

withdrawing Customs and countervailing duty exemptions to boost local production of mobile phones and peripheral products in India.

• The Government has also allowed 100% FDI in Railway and removed

restrictions in Construction. It has also recently increased the cap of FDI to 100% in Pharmaceutical.

• The government has allowed 100% FDI in all the sectors except Space

(74%), Defence (49%) and News Media (26%).

• FDI restrictions in tea plantation has been removed, while the FDI limit in

defence sector has been raised from the earlier 26% to 49% currently

24

The Three Pillars

Foreign Direct Investment Infrastructure Development

De- Licensing/ De- Regulatio n

25

Other Initiatives and Funds Allocation

Set aside Rs. 17,000 Crore in

• rder to boost the

Skill India Mission Invested Rs. 4000 crore in the launch of SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion Programme)

• Rs. 10,000 crore

funds with 80% reduction in patent registration fee. Freedom from capital gain tax and tax on profit for 3 years A total of ฀980 billion (US$15 billion) has been approved by the Indian Cabinet for development of 100 smart cities and rejuvenation of 500

• thers

26

Policies under Make in India

This initiative is to improve the ease of doing business in India, which includes increasing the speed with which protocols are met with, and increasing transparency The government has allowed 100% FDI in all the sectors except Space (74%), Defense (49%) and News Media (26%). FDI restrictions in tea plantation has been removed, while the FDI limit in defense sector has been raised from the earlier 26% to 49%

27

1 2

Policies under Make in India

The government has decided to improve and protect the intellectual property rights of innovators and creators by upgrading infrastructure, and using state-of-the-art technology. National Manufacturing:

• to

increase manufacturing sector growth to 12-14% per annum over the medium term

• to

increase the share

• f

manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.

• to

create 100 million additional jobs by 2022 in manufacturing sector.

28

3 4

Sectors

29

Source: http://www.livemint.com/Politics/adOPm2gl7qy1ccnqgsW0sL/2015-not-a-breakout-year-for-Make-in-India.html

Impact of Make in India Initiative

30

Investments promised by various companies

US$18bn worth

• f proposals in

manufacturing electronics FII investments totaled $40.92bn in FY ending March’15 Foxconn plans to spend $5bn

• n factories and

in R&D in India Huawei invested US$170mn in R&D campus Alibaba, Xiaomi, Airbus, BMW planning to invest heavily

31

Challenges in Implementation

32

Inadequate Infrastructur e

Lack of focus

• n R&D

Job-Skill Mismatch Manufacturer s in India sees Globalization as a myth Land Acquisition and Labour Laws Stringent Regulatory Clearances Multiple Taxation Competition from China Inefficient Transport Network