Indian Banking Sector

A bank is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans or make an investment to derive a profit from the difference in the interest rates paid and charged, respectively. In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities.Some are of Indian origin and some are foreign players. India’s economy has been one of the stars of global economics in recent years. It has grown by more than 9% for three years running. The economy of India is as diverse as it is large, with a number of major sectors including manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a major component of the Indian economy, as over 66% of the I ndian population earns its livelihood from this area. Banking sector is considered as a booming sector in Indian economy recently.Banking is a vital system for developing economy for the nation. However, Indian banking system and economy has been facing various challenges and problems which have discussed in other parts of project. INDIAN BANKING SYSTEM Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit.The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's r egular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money.Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: †¢Early phase from 1786 to 1969 of Indian Banks †¢Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial ; Banking Sector Reforms after 1991. After 1991, under the chairmanship of M Narasimham, a committee wa s set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money.This resulted that Indian banking is growing at an astonishing rate, with Assets expected to reach US$1 trillion by 2010. â€Å"The banking industry should focus on having a small number of large players that can compete globally and can achieve expected goals rather than having a large number of fragmented players. † KINDS OF BANKS Financial requirements in a modern economy are of a diverse nature, distinctive variety and large magnitude. Hence, different types of banks have been instituted to cater to the varying needs of the community.Banks in the organized sector may, however, be classified in to the following major forms: oComm ercial banks oCo-operative banks oSpecialized banks oCentral bank †¢COMMERCIAL BANKS Commercial banks are joint stock companies dealing in money and credit. In India, however there is a mixed banking system, prior to July 1969, all the commercial banks-73 scheduled and 26 non-scheduled banks, except the state bank of India and its subsidiaries-were under the control of private sector. On July 19, 1969, however, 14 major commercial banks with deposits of over 50 Corers were nationalized.In April 1980, another six commercial banks of high standing were taken over by the government. At present, there are 20 nationalized banks plus the state bank of India and its 7 subsidiaries constituting public sector banking which controls over 90 per cent of the banking business in the country. †¢CO-OPERATIVE BANKS Co-operative banks are a group of financial institutions organized under the provisions of the Co-operative societies Act of the states. The main objective of co-operative bank s is to provide cheap credits to their members.They are based on the principle of self-reliance and mutual co-operation. Co-operative banking system in India has the shape of a pyramid a three tier structure, constituted by: †¢SPECIALIZED BANKS There are specialized forms of banks catering to some special needs with this unique nature of activities. There are thus, oForeign exchange banks, oIndustrial banks, oDevelopment banks, oLand development banks, oExim bank. †¢CENTRAL BANK A central bank is the apex financial institution in the banking and financial system of a country.It is regarded as the highest monetary authority in the country. It acts as the leader of the money market. It supervises, control and regulates the activities of the commercial banks. It is a service oriented financial institution. India’s central bank is the Reserve Bank of India established in 1935. A central bank is usually state owned but it may also be a private organization. For instance, the Reserve Bank of India (RBI), was started as a shareholders’ organization in 1935, however, it was nationalized after independence, in 1949. It is free from parliamentary control.CHALLENGES FACED BY INDIAN BANKING INDUSTRY The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. These multiple changes happening one after other has a ripple effect on a bank trying to graduate from completely regulated sellers market to completed deregulated customers market. oDEREGULATION This continuous deregulation has made the Banking market extremely competitive with greater autonomy, operational flexibility, and decontrolled interest rate and liberalized norms for foreign exchange.The deregulation of the industry coupled with decontrol in interest rates has led to entry of a number of players in the banking industry. At the same time reduced corporate credit off take thanks to sluggish economy has resulted in large number of competitors battling for the same pie. oNEW RULES As a result, the market place has been redefined with new rules of the game. Banks are transforming to universal banking, adding new channels with lucrative pricing and freebees to offer. Natural fall out of this has led to a series of innovative product offerings catering to various customer segments, specifically retail credit. EFFICIENCY This in turn has made it necessary to look for efficiencies in the business. Banks need to access low cost funds and simultaneously improve the efficiency. The banks are facing pricing pressure, squeeze on spread and have to give thrust on retail assets. oDIFFUSED CUSTOMER LOYALTY This will definitely impact Customer preferences, as they are bound to react to the value added offerings. Customers have become demanding and the loyalties are diffused. There are multiple choices; the wallet share is reduced per bank with demand on flexibility and customization.Given the relatively low switching costs; customer retention calls for customized service and hassle free, flawless service delivery. oMISALLIGNED MINDSET These changes are creating challenges, as employees are made to adapt to changing conditions. There is resistance to change from employees and the Seller market mindset is yet to be changed coupled with Fear of uncertainty and Control orientation. Acceptance of technology is slowly creeping in but the utilization is not maximized. oCOMPETENCE GAPPlacing the right skill at the right place will determine success. The competency gap needs to be addressed simultaneously otherwise there will be missed opportunities. The focus of people will be on doing work but not providing solutions, on escalating problems rather than solving them and on disposing customers instead of using the opportunity to cross sell. STRATEGIES OPTIONS WITH BANKS TO COPE WITH THOSE CHALLENGES Leading players in the industry have embarked on a series of strategic and tactical initiatives to sustain leadership.The major initiatives include: oInvesting in state of the art technology as the back bone of to ensure reliable service delivery oLeveraging the branch network and sales structure to mobilize low cost current and savings deposits oMaking aggressive forays in the retail advances segment of home and personal loans oImplementing organization wide initiatives involving people, process and technology to reduce the fixed costs and the cost per transaction oFocusing on fee based income to compensate for squeezed spread, (e. . CMS, trade services) oInnovating Products to capture customer ‘mind share’ to begin with and later the wallet share oImproving the asset quality as per Basel II norms INDIAN ECONOMY The Indian Economy is consistently posting robust growth numbers in all sectors leading to impressive growth in Indian GDP. The Indian economy has been stable and reliable in recent times, while in the last few years it’s experienced a positive up ward growth trend.A consistent 8-9% growth rate has been supported by a number of favorable economic indicators including a huge inflow of foreign funds, growing reserves in the foreign exchange sector, both an IT and real estate boom, and a flourishing capital market. All of these positive changes have resulted in establishing the Indian economy as one of the largest and fastest growing in the world. The process of globalization has been an integral part of the recent economic progress made by India.Globalization has played a major role in export-led growth, leading to the enlargement of the job market in India. As a new Indian middle class has developed around the wealth that the IT and BPO industries have brought to the country, a new consumer base has developed. International companies are also expanding their operations in India to service this massive growth opportunity. The same thing has followed by international banks that are entering in Indian market and pulling their hug e investments in Indian economy. This is helping to accelerate the growth of Indian economy.Economy can be studied from two points of views†¦ ?MICRO ECONOMIC POINT OF VIEW The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets.Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it. ?MACRO ECONOMIC POINT OF VIEW It is a field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as c hanges in unemployment, national income, rate of growth, gross domestic product, inflation and price levels. Macroeconomics looks at the big picture (hence â€Å"macro†). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world.For example, people who study this branch of economics would be able to interpret the latest Gross Domestic Product figures or explain why a 6% rate of unemployment is not necessarily a bad thing. Thus, for an overall perspective of how the entire economy works, you need to have an understanding of economics at both the micro and macro levels. ECONOMIC SYSTEMS An economic system is loosely defined as country’s plan for its services, goods produced, and the exact way in which its economic plan is carried out. In general, there are three major types of economic systems prevailing around the world they are†¦ Market Economy oPlanned Economy oMixed Economy MARKET ECONOMY In a market ec onomy, national and state governments play a minor role. Instead, consumers and their buying decisions drive the economy. In this type of economic system, the assumptions of the market play a major role in deciding the right path for a country’s economic development. Market economies aim to reduce or eliminate entirely subsidies for a particular industry, the pre-determination of prices for different commodities, and the amount of regulation controlling different industrial sectors.The absence of central planning is one of the major features of this economic system. Market decisions are mainly dominated by supply and demand. The role of the government in a market economy is to simply make sure that the market is stable enough to carry out its economic activities properly. PLANNED ECONOMY A planned economy is also sometimes called a command economy. The most important aspect of this type of economy is that all major decisions related to the production, distribution, commodity and service prices, are all made by the government.The planned economy is government directed, and market forces have very little say in such an economy. This type of economy lacks the kind of flexibility that is present a market economy, and because of this, the planned economy reacts slower to changes in consumer needs and fluctuating patterns of supply and demand. On the other hand, a planned economy aims at using all available resources for developing production instead of allotting the resources for advertising or marketing. MIXED ECONOMY A mixed economy combines elements of both the planned and the market economies in one cohesive system.This means that certain features from both market and planned economic systems are taken to form this type of economy. This system prevails in many countries where neither the government nor the business entities control the economic activities of that country – both sectors play an important role in the economic decision-making of the country. In a mixed economy there is flexibility in some areas and government control in others. Mixed economies include both capitalist and socialist economic policies and often arise in societies that seek to balance a wide range of political and economic views. IMPORTANT BANKING AND ECONOMIC INDICATORS CASH RESERVE RATIO Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks. The amount of which shall not be less than three per cent of the total of the Net Demand and Time Liabilities (NDTL) in India, on a fortnightly basis and RBI is empowered to increase the said rate of CRR to such higher rate not exceeding twenty percent of the Net Demand and Time Liabilities (NDTL) under the RBI Act, 1934. STATUTORY LIQUIDITY RATIO In terms of Section 24 (2-A) of the B. R. Act, 1949 all Scheduled Commercial Banks, in addition to the average daily balance which they are required to maintain in the form of†¦. oIn cash, Or oIn gold valued at a price not exceeding the current market price, Or oIn unencumbered approved securities valued at a price as specified by the RBI from time to time. ?REPO RATE Repo rate, also known as the official bank rate, is the discounted rate at which a central bank repurchases government securities.The central bank makes this transaction with commercial banks to reduce some of the short-term liquidity in the system. The repo rate is dependent on the level of money supply that the bank chooses to fix in the monetary scheme of things. Repo rate is short for repurchase rate. The entity borrowing the security is often referred to as the buyer, while the lender of the securities is referred to as the seller. The central bank has the power to lower the repo rates while expanding the money supply in the country. This enables th e banks to exchange their government security holdings for cash.In contrast, when the central bank decides to reduce the money supply, it implements a rise in the repo rates. At times, the central bank of the nation makes a decision regarding the money supply level and the repo rate is determined by the market. The securities that are being evaluated and sold are transacted at the current market price plus any interest that has accrued. When the sale is concluded, the securities are subsequently resold at a predetermined price. This price is comprised of the original market price and interest, and the pre-agreed interest rate, which is the repo rate. ?BANK RATEBank rate is referred to the rate of interest charged by premier banks on the loans and advances. Bank rate varies based on some defined conditions as laid down the governing authority of the banks. Bank rates are levied to control the money supply to and from the bank. From the consumer's point of view, bank rate ordinarily d enotes to the current rate of interest acquired from savings certificate of Deposit. It is most frequently used by the consumers who are concerned in mortgage Some commonest types of bank interest rates are as follows: oBank rate on CD, i. e. , on certificate of deposit Bank rate on the credit of a credit card or other kind of loan oBank rate on real estate loan ?INTERBANK RATE The rate of interest charged on short-term loans made between banks. Banks borrow and lend money in the interbank market in order to manage liquidity and meet the requirements placed on them. The interest rate charged depends on the availability of money in the market, on prevailing rates and on the specific terms of the contract, such as term length. Banks are required to hold an adequate amount of liquid assets, such as cash, to manage any potential withdrawals from clients.If a bank can't meet these liquidity requirements, it will need to borrow money in the interbank market to cover the shortfall. Some ba nks, on the other hand, have excess liquid assets above and beyond the liquidity requirements. These banks will lend money in the interbank market, receiving interest on the assets. There is a wide range of published interbank rates, including the LIBOR & MIBOR, which is set daily based on the average rates on loans made within the London interbank market & Mumbai Interbank Market. ?GROSS DOMESTIC PRODUCTThe monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. GDP = C + G + I + NX Where: ?†C† is equal to all private consumption, or consumer spending, in a nation's economy. ?†G† is the sum of government spending. ?†I† is the sum of all the country's businesses spending on capital. ?† NX† is the nation's total net exports, calculated as total exports minus total imports. NX = Exports – Imports) GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country's standard of living. ?INFLATION Inflation can be defined as a rise in the general price level and therefore a fall in the value of money. Inflation occurs when the amount of buying power is higher than the output of goods and services. Inflation also occurs when the amount of money exceeds the amount of goods and services available. As to whether the fall in the value of money will affect the functions of money depends on the degree of the fall.Basically, refers to an increase in the supply of currency or credit relative to the availability of goods and services, resulting in higher prices. Therefore, inflation can be measured in terms of percentages. The percentage increase in the price index, as a rate per cent per unit of time, which is usually in years. The two basic price indexes are used when measuring inflation, the producer price index (PPI) and the consumer price index (CPI) which is also known as the cost of living index number. ?DEFLATION It is a condition of falling prices accompanied by a decreasing level of employment, output and income.Deflation is just the opposite of inflation. Deflation occurs when the total expenditure of the community is not equal to the existing prices. Consequently, the supply of money decreases and as a result prices fall. Deflation can also be brought about by direct contractions in spending, either in the form of a reduction in government spending, personal spending or investment spending. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. ?DISINFLATIONWhen prices are falling due to anti-inflationary measures adopted by the authorities, with no corresponding decline in the existing level of employment, output and income, the result of this is disinflation. When acute inflation burdens an economy, disinflation is implemented as a cure. Disinflation is said to take place when deliberate attempts are made to curtail expenditure of all sorts to lower prices and money incomes for the benefit of the community. ?REFLATION Reflation is a situation of rising prices, which is deliberately undertaken to relieve a depression.Reflation is a means of motivating the economy to produce. This is achieved by increasing the supply of money or in some instances reducing taxes, which is the opposite of disinflation. Governments can use economic policies such as reducing taxes, changing the supply of money or adjusting the interest rates; which in turn motivates the country to increase their output. The situation is described as semi-inflation or reflation. ?STAGFLATION Stagflation is a stagnant economy that is combined with inflation. Basically, when prices are increasing the economy is de ceasing.Some economists believe that there are two main reasons for stagflation. Firstly, stagflation can occur when an economy is slowed by an unfavourable supply, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable. In the 1970's inflation and recession occurred in different economies at the same time. Basically, what happened was that there was plenty of liquidity in the system and people were spending money as quickly as they got it because prices were going up quickly.This gave rise to the second reason for stagflation. ?FOREIGN INSTITUTIONAL INVESTMENTS Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India. The ceiling for overall investment for FIIs is 24 per cent of the paid up capital of the Indian company and 10 per cent for NRIs/PIOs.The limit is 20 per cent of the paid up capital in the case of public sector banks, including the State Bank of India. ?FOREIGN EXCHANGE RESERVES Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. This broader figure is more readily available, but it is more accurately termed official reserves or international reserves.These are assets of the central bank held in different reserve currencies, such as the dollar, euro and yen, and used to back its liabilities, e. g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions . Large reserves of foreign currency allow a government to manipulate exchange rates – usually to stabilize the foreign exchange rates to provide a more favorable economic environment. ROLE OF BANKS IN DEVELOPING OF ECONOMY A safe and sound financial sector is a prerequisite for sustained growth of any economy.Globalization, deregulation and advances in information technology in recent years have brought about significant changes in the operating environment for banks and other financial institutions. These institutions are faced with increased competitive pressures and changing customer demands. These, in turn, have engendered a rapid increase in product innovations and changes in business strategies. While these developments have enabled improvement in the efficiency of financial institutions, they have also posed some serious risks.Banks play a very useful and dynamic role in the economic life of every modern state. A study of the economic history of western country shows that without the evolution of commercial banks in the 18th and 19th centuries, the industrial revolution would not have taken place in Europe. The economic importance of commercial banks to developing countries may be viewed thus: oPromoting capital formation oEncouraging innovation oMonetsation oInfluence economic activity oFacilitator of monetary policy Above all view we can see in briefly, which are given below:PROMOTING CAPITAL FORMATION A developing economy needs a high rate of capital formation to accelerate the tempo of economic development, but the rate of capital formation depends upon the rate of saving. Unfortunately, in underdeveloped countries, saving is very low. Banks afford facilities for saving and, thus encourage the habits of thrift and industry in the community. They mobilize the ideal and dormant capital of the country and make it available for productive purposes. ENCOURAGING INNOVATION Innovation is another factor responsible for economic development.The entre preneur in innovation is largely dependent on the manner in which bank credit is allocated and utilized in the process of economic growth. Bank credit enables entrepreneurs to innovate and invest, and thus uplift economic activity and progress. MONETSATION Banks are the manufactures of money and they allow many to play its role freely in the economy. Banks monetize debts and also assist the backward subsistence sector of the rural economy by extending their branches in to the rural areas. They must be replaced by the modern commercial bank’s branches. INFLUENCE ECONOMIC ACTIVITYBanks are in a position to influence economic activity in a country by their influence on the rate interest. They can influence the rate of interest in the money market through its supply of funds. Banks may follow a cheap money policy with low interest rates which will tend to stimulate economic activity. FACILITATOR OF MONETARY POLICY Thus monetary policy of a country should be conductive to economic development. But a well-developed banking system is on essential pre-condition to the effective implementation of monetary policy. Under-developed countries cannot afford to ignore this fact.A fine, an efficient and comprehensive banking system is a crucial factor of the developmental process of economy. RESERVE BANK OF INDIA AS A REGULATORY INSTITUTION IN INDIAN ECONOMY The RBI was established under the Reserve Bank of India Act, 1934 on April 1, 1935 as a private shareholders' bank but since its nationalization in 1949, is fully owned by the Government of India. The Preamble of the Reserve Bank describes the basic functions as ‘to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally, to operate the currency and credit system of the country to its advantage'.The twin objectives of monetary policy in India have evolved over the years as those of maintaining price stability and ensuring adequate flow of cred it to facilitate the growth process. The relative emphasis between the twin objectives is modulated as per the prevailing circumstances and is articulated in the policy statements by the Reserve Bank from time to time. Consideration of macro-economic and financial stability is also subsumed in the mandate. The Reserve Bank is also entrusted with the management of foreign exchange reserves (which include gold holding also), which are reflected in its balance sheet.While the Reserve Bank is essentially a monetary authority, its founding statute mandates it to be the manager of market borrowing of the Government of India and banker to the Government. The Reserve Bank's affairs are governed by a Central Board of Directors, consisting of fourteen non-executive, independent directors nominated by the Government, in addition to the Governor and up to four Deputy Governors. Besides, one Government official is also nominated on the Board who participates in the Board meetings but cannot vote . IMPORTANT FUNCTIONS PLAYED BY RESERVE BANK OF INDIA IN ECONOMY MAIN FUNCTIONS oMONITORY AUTHORITY The Reserve Bank of India formulates implements and monitors the monetary policy. Its main objective is maintaining price stability and ensuring adequate flow of credit to productive sectors. oREGULATOR AND SUPERVISOR OF FINANCIAL SYSTEM Prescribes broad parameters of banking operations within which the country’s banking and financial system functions. Their main objective is to maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services to the public. MANAGER OF EXCHANGE CONTROL The manager of the exchange control department manages the Foreign Exchange Management Act, 1999. Its main objective is to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. oISSUER OF THE CURRENCY The person who is issuer issues and exchanges or destroys currency and co ins not fit for circulation. His main objective is to give the public adequate quantity of supplies of currency notes and coins and in good quality. oDEVELOPMENTAL ROLEThe reserve bank of India performs a wide range of promotional functions to support national objectives. The promotional functions are such as contests, coupons, maintaining good public relations, and many more†¦.. oRELATED FUNCTIONS There are also some of the relating functions to the above mentioned main functions. They are such as Banker to the Government, Banker to banks etc†¦. ?BANKER TO THE GOVERNMENT It performs merchant banking function for the central and the state governments; also acts as their banker. ?BANKER TO THE BANKS Maintains banking accounts of all scheduled banks. ?SUPERVISORY FUNCTIONSThe Reserve Bank act, 1934 and the Banking Regulation act, 1949 have given the RBI wide powers of supervision and control over commercial and co-operative banks, relating to licensing and establishments, br anch expansion, liquidity of their asset, management and methods of working, amalgamation, reconstruction, and liquidation. The RBI is authorized to carry out periodical inspections of banks and to call for returns and necessary information from them. The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop on sound lines and to improve the methods of their operation. PROMOTIONAL FUNCTIONS With economic growth assuming a new urgency since Independence, the range of the Reserve Bank’s functions has steadily widened. The bank now performs a variety of developmental and promotional functions, which, at one time were regarded as outside the normal scope of central banking. The RBI was asked to promote banking habit, extend banking facilities to rural and semi-urban areas, and establish and promote new specialized financing agencies. PROBLEMS FACED BY INDIAN ECONOMY Macro-economic environment in India has taken a seriou s turn since the beginning of the year.Unprecedented rise in crude prices, surge in inflation and continued strong growth in money supply (M3) have forced the government and RBI to take strong fiscal and monetary measures leading to liquidity tightening, significant rise in interest rates and slowdown in economic growth. Economic shocks are events which adversely affect the economy and the government’s macroeconomic objectives such as growth, inflation, unemployment and the balance of payments. CERTAIN PROBLEMS FACED BY INDIAN ECONOMY oFALL IN SAVINGS RATIO The savings ratio is the % of income that is saved not spent.A fall in the savings ratio implies that consumer spending is increasing; often this is financed through increased borrowing. EFFECTS OF FALL IN SAVINGS RATIO ?HIGHER LEVEL OF CONSUMPTION This results in increase in Aggregate Demand. The increase in AD will cause an increase in economic growth and lower unemployment. However, rising Aggregate Demand may cause inf lation. Inflation will occur when growth is faster than the long run trend rate. This is now a potential problem in the India. Inflation has recently gone above 12% ?BOOM AND BUST A fall in the savings ratio is usually accompanied by a rise in confidence.It is the rise in confidence which encourages borrowing and consumers to run down savings. Therefore, there is always a danger that a falling savings ratio can be a precursor to a boom and bust situation. ?ECONOMY MORE SENSITIVE TO INTEREST RATES With a fall in the savings ratio interest rate changes will have a bigger effect in reducing spending. This is because levels of borrowing are higher and therefore a rise in interest rates has a significant impact on increasing interest repayments. Also, higher rates will not be increasing incomes from savings as much. ?BALANCE OF PAYMENTWith higher levels of consumer spending, there will be an increase in imports. Therefore this will lead to deterioration in the current account. The curren t account deficit could put downward pressure on the exchange rate in the long term. However, some people argue a fall in the savings ratio is not a problem, but, it is just a reflection of strong economy and booming housing market, which increases scope for equity withdrawal. oINFLATION Inflation is posing a serious challenge to the economic growth of India. Since Jan’08 onwards, inflation in the country has surged by 8. 2% to hit a 13-year high of ~12%.M3 growth in the economy too continued to remain strong at 20% (in July’08), well above the RBI’s comfort level of 17%. The WPI inflation rate flared up during the period driven by significant increase in the prices of commodities, primary articles and manufactured products, even though very small part of global crude price increase has been passed on to the Indian consumers. oGLOBAL RECESSION It appears that Europe, Japan and the US are entering into recession. Falling house prices, crisis in the financial syst em, and lower confidence could lead to a sharp downturn, with the worst still to come.Many argue that India’s growth is not so dependent on growth in the West. However, the Indian stock markets have been hit by the global crisis. India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. oRISE IN CRUDE PRICES How global crude prices would behave probably has no easy answers; however we believe that the current challenging and uncertain macro-economic conditions does not lead Indian financials into a state of crisis. But continued rise in crude prices and its resultant impact on inflation, interest rates and government finances has the potential to do so.Hence, crude price remains the key risk to our positive stance on the Indian financials. In the last couple of months oil prices have surged by 45% from US$ 100 to US$ 145 (and now back to US$ 115). India currently imports 70% of its crude requirement, resulting in pressure on government coffers on back of rising crude prices. oDEPRICIATING INR Surge in crude prices has severely impacted current account deficit of the country. This coupled with the outflow of FII investments has resulted in INR to depreciate sharply against dollar further fueling inflation. IMPACT OF ECONOMIC PROBLEMS ON INDIAN FINANCIALSThe current macro-economic conditions are expected to result in oSLOWDOWN IN CREDIT GROWTH oIMPACT ON MARGINS OF BANKS oPREASURE ON CREDIT QUALITY †¢SLOWDOWN IN CREDIT GROWTH While the rise in interest rates should lead to a moderation in demand for credit, Indian banks too are exercising caution while lending. Credit growth of 18% in FY09E and 17% in FY10E vs. 22% in FY08. Risks and uncertainties in the system have increased given the higher crude and commodity prices and its inflationary impact. This would curtail consumption, which would impact economic growth adversely.Further higher rates will not only impact the profitability of Indian corp orate but also impact IRRs of various proposed capex projects. This coupled with elections next year could lead to some postponement of capex plans of corporate, leading to negative impact on demand for credit. Higher rates have particularly impacted retail loan growth. As can be seen in the exhibit below, retail loan growth has slowed down significantly from 26. 5% in FY07 to ~13% in FY08. SLR Ratio of the system has started rising since mid FY08 and currently stands at 28. %. Given the expected negative impact on credit growth. †¢IMPACT ON MARGINS OF BANKS During the past 18 months, CRR has increased by 400 bps to 9. 0% currently and RBI has also discontinued with interest payment on CRR balances. Every 50 bps hike in CRR generally negatively impacts margins by ~5 bps. Till June’08, most of the banks had restrained from hiking lending rates despite significant monetary tightening. However on account of recent measures by RBI, banks have resorted to hiking PLRs in July/ August by 50-150 bps to preserve their margins.In fact in an environment, where liquidity is tight, interest rates are at elevated levels and risk premiums have increased, the banks tend to regain the pricing power. This would not only help the banks to adequately price in risks but also help protect their margins. Apart from hiking PLRs, banks are also resorting to reprising (in fact right-pricing) the loans that were sanctioned well below PLRs. Significant portion of fixed rate loans would also get re-priced over the period of 12-18 months. †¢PRESSURE ON CREDIT QUALITY Higher lending rates are expected to impact credit quality for the banking system.The extent of the impact on credit quality would also be bank specific given the loan mix (retail vs. corporate), proportion of unsecured lending, credit profile of corporate loan book and industry wise exposure. Indian banks’ fundamentals are relatively resilient with better risk management systems, dramatically improved a sset quality, stronger recovery mechanisms (legal provisions) and with adequate capitalization and provisioning. Even Certain sectors (like real estate, airlines industry) might feel the stress due to the changing macro environment and rise in interest rates.Many companies where crude forms a key raw material component are expected to get hit more severely. Similarly, sectors like real estate and SMEs, which are interest rate sensitive, would face higher delinquencies if interest rates strengthen further by 100-200 bps. NECESSARY INITIATIVES TAKEN BY RBI & MINISTRY OF FINANCE TO TACKLE ECONOMIC PROBLEMS As most of economists feel that the most horrible problem which India is facing currently is inflation which has crossed 12%. To come out of these problems RBI and ministry of finance and other relevant government and regulatory entities are taking various initiatives which are as follows†¦ RBI MONITORY POLICY With the introduction of the Five year plans, the need for appropriat e adjustment in monetary and fiscal policies to suit the pace and pattern of planned development became imperative. The monitory policy since 1952 emphasized the twin aims of the economic policy of the government: oSpread up economic development in the country to raise national income and standard of living, and oTo control and reduce inflationary pressure in the economy. This policy of RBI since the First plan period was termed broadly as one of controlled expansion, i. e. a policy of â€Å"adequate financing of economic growth and at the same time the time ensuring reasonable price stability†. Expansion of currency and credit was essential to meet the increased demand for investment funds in an economy like India which had embarked on rapid economic development. Accordingly, RBI helped the economy to expand via expansion of money and credit and attempted to check in rise in prices by the use of selective controls. OBJECTIVES OF MONITORY POLICY ?PRICE STABILITY ?MONITORY TAR GETTING ?INTEREST RATE POLICY ?RESTRUCTURING OF MONEY MARKET ?REGULATION OF FOREIGN EXCHANGE MARKET WEAPONS OF MONITORY POLICYCentral banks generally use the three quantitative measures to control the volume of credit in an economy, namely: oRaising bank rates oOpen market operations and oVariable reserve ratio However, there are various limitations on the effective working of the quantitative measures of credit control adapted by the central banks and, to that extent, monetary measures to control inflation are weakened. In fact, in controlling inflation moderate monetary measures, by themselves, are relatively ineffective. On the other hand, drastic monetary measures are not good for the economic system because they may easily send the economy into a decline.In a developing economy there is always an increasing need for credit. Growth requires credit expansion but to check inflation, there is need to contract credit. In such a encounter, the best course is to resort to credit contr ol, restricting the flow of credit into the unproductive, inflation-infected sectors and speculative activities, and diversifying the flow of credit towards the most desirable needs of productive and growth-inducing sector. It should be noted that the impression that the rate of spending can be controlled rigorously by the contraction of credit or money supply is wrong in the context of modern economic societies.In modern community, tangible, wealth is typically represented by claims in the form of securities, bonds, etc. , or near moneys, as they are called. Such near moneys are highly liquid assets, and they are very close to being money. They increase the general liquidity of the economy. In these circumstances, it is not so simple to control the rate of spending or total outlays merely by controlling the quantity of money. Thus, there is no immediate and direct relationship between money supply and the price level, as is normally conceived by the traditional quantity theories.Wh en there is inflation in an economy, monetary restraints can, in conjunction with other measures, play a useful role in controlling inflation. †¢FISCAL POLICY Fiscal policy is another type of budgetary policy in relation to taxation, public borrowing, and public expenditure. To curve the effects of inflation and changes in the total expenditure, fiscal measures would have to be implemented which involves an increase in taxation and decrease in government spending. During inflationary periods the government is supposed to counteract an increase in private spending.It can be cleared noted that during a period of full employment inflation, the aggregate demand in relation to the limited supply of goods and services is reduced to the extent that government expenditures are shortened. Along with public expenditure, governments must simultaneously increase taxes that would effectively reduce private expenditure, in an effect to minimise inflationary pressures. It is known that when m ore taxes are imposed, the size of the disposable income diminishes, also the magnitude of the inflationary gap in regards to the availability of the supply of goods and services.In some instances, tax policy has been directed towards restricting demand without restricting level of production. For example, excise duties or sales tax on various commodities may take away the buying power from the consumer goods market without discouraging the level of production. However, some economists point out that this is not a correct way of combating inflation because it may lead to a regressive status within the economy. As a result, this may lead to a further rise in prices of goods and services, and inflation can spread from one sector of the economy to another and from one type of goods and services to another.Therefore, a reduction in public expenditure, and an increase in taxes produces a cash surplus in the budget. Keynes, however, suggested a programme of compulsory savings, such as def erred pay as an anti-inflationary measure. Deferred pay indicates that the consumer defers a part of his or her wages by buying savings bonds (which, of course, is a sort of public borrowing), which are redeemable after a particular period of time, this is sometimes called forced savings. Additionally, private savings have a strong disinflationary effect on the economy and an increase in these is an important measure for controlling inflation.Government policy should therefore, include devices for increasing savings. A strong savings drive reduces the spendable income of the consumers, without any harmful effects of any kind that are associated with higher taxation. Furthermore, the effects of a large deficit budget, which is mainly responsible for inflation, can be partially offset by covering the deficit through public borrowings. It should be noted that it is only government borrowing from non-bank lenders that has a disinflationary effect.In addition, public debt may be managed in such a way that the supply of money in the country may be controlled. The government should avoid paying back any of its past loans during inflationary periods, in order to prevent an increase in the circulation of money. Anti-inflationary debt management also includes cancellation of public debt held by the central bank out of a budgetary surplus. Fiscal policy by itself may not be very effective in combating inflation; therefore a combination of fiscal and monetary tools can work together in achieving the desired outcome. †¢DIRECT MEASURESDirect controls refer to the regulatory measures undertaken to convert an open inflation into a repressed one. Such regulatory measures involve the use of direct control on prices and rationing of scarce goods. The function of price control is a fix a legal ceiling, beyond which prices of particular goods may not increase. When ceiling prices are fixed and enforced, it means prices are not allowed to rise further and so, inflation is supp ressed. Under price control, producers cannot raise the price beyond a specified level, even though there may be a pressure of excessive demand forcing it up.In times of the severe scarcity of certain goods, particularly, food grains, government may have to enforce rationing, along with price control. The main function of rationing is to divert consumption from those commodities whose supply needs to be restricted for some special reasons; such as, to make the commodity more available to a larger number of households. Therefore, rationing becomes essential when necessities, such as food grains, are relatively scarce. Rationing has the effect of limiting the variety of quantity of goods available for the good cause of price stability and distributive impartiality.Another control measure that was suggested is the control of wages as it often becomes necessary in order to stop a wage-price spiral. During galloping inflation, it may be necessary to apply a wage-profit freeze. Ceilings o n wages and profits keep down disposable income and, therefore the total effective demand for goods and services. On the other hand, restrictions on imports may also help to increase supplies of essential commodities and ease the inflationary pressure. However, this is possible only to a limited extent, depending upon the balance of payments situation.Similarly, exports may also be reduced in an effort to increase the availability of the domestic supply of essential commodities so that inflation is eased. In general, monetary and fiscal controls may be used to repress excess demand but direct controls can be more useful when they are applied to specific scarcity areas. As a result, anti-inflationary policies should involve varied programmes and cannot exclusively depend on a particular type of measure only. RECENT INNOVATIONS IN INDIAN BANKING HDFC Bank’s ‘Net Safe’ card is a one-time use card with a limit that’s specified, taken from Tendon’s credi t or debit card.Even if Tandon fails to utilize the full amount within 24 hours of creating the card, the card simply dies and the unspent amount in the temporary card reverts to his original credit or debit card. Welcome to one of the myriad ways in which bankers have been trying to innovate. They’re bringing ATMs, cash and even foreign exchange to their customers’ doorsteps. Indeed, innovation has become the hottest banking game in town. Want to buy a house but don’t want to go through the hassles of haggling with brokers and the mounds of paperwork? Not to worry.Your bank will tackle all this. It’s ready to come every step of the way for you to buy a house. Standard Chartered, for instance, has property advisors to guide a customer through the entire process of selecting and buying a house. They also lend a hand with the cumbersome documentation formalities and the registration. Don’t fret if you’ve already bought your house or car â€⠀œ you can do other things with both. You can leverage your new house or car these days with banks like ICICI Bank and Stanchart ready to extend loans against either, till it’s about five years old.Loans are available to all car owners for almost all brands of cars manufactured in India that are up to five years old. Last month, Kotak Mahindra Bank introduced a variant of the sweep-in account. If the balance tops Rs 1. 5 lakh, the excess runs into Kotak’s liquid mutual fund. â€Å"Even if the money is there only for the weekend, a liquid fund can earn you a clean 4. 5 per cent per annum,† points out Shashi Arora, vice president, marketing, Kotak Mahindra Bank. That’s not a small gain considering that your current account does not pay you any interest.And if, meanwhile, you want to buy a big-ticket home theatre system, the minute you swipe your card the invested sum will return to your account. Banks are also attempting to reach out to residents of metropo litan cities where people are pressed for time (what with long commuting hours, traffic jams and both spouses working), beyond conventional banking hours. ICICI Bank, for example, introduced eight to eight banking hours, seven days of the week, in major cities. Not to be outdone, some of the other private banks have also done this too.HDFC Bank even has a 24-hour branch at Mumbai’s international airport. INDIAN BANKING IN 2010 The interplay between policy and regulatory interventions and management strategies will determine the performance of Indian banking over the next few years. Legislative actions will shape the regulatory stance through six key elements: industry structure and sector consolidation; freedom to deploy capital; regulatory coverage; corporate governance; labor reforms and human capital development; and support for creating industry utilities and service bureaus.Management success will be determined on three fronts: fundamentally upgrading organizational capa bility to stay in tune with the changing market; adopting value-creating M&A as an avenue for growth; and continually innovating to develop new business models to access untapped opportunities. Through these scenarios, we can paint a picture of the events and outcomes that will be the consequence of the actions of policy makers and bank managements. These actions will have dramatically different outcomes; the costs of inaction or insufficient action will be high. Specifically, at one extreme, the sector could account for over 7. per cent of GDP with over Rs.. 7,500 billion in market cap, while at the other it could account for just 3. 3 per cent of GDP with a market cap of Rs. 2,400 billion. Banking sector intermediation, as measured by total loans as a percentage of GDP, could grow marginally from its current levels of ~30 per cent to ~45 per cent or grow significantly to over 100 per cent of GDP. In all of this, the sector could generate employment to the tune of 1. 5 million comp ared to 0. 9 million. Today availability of capital would be a key factor — the banking sector will require as much as Rs. 00 billion (US$ 14 billion) in capital to fund growth in advances, non-performing loan (NPL) write offs and investments in IT and human capital up gradation to reach the high-performing scenario. Three scenarios can be defined to characterize these outcomes: oHIGH PERFORMANCE In this scenario, policy makers intervene only to the extent required to ensure system stability and protection of consumer interests, leaving managements free to drive far reaching changes. Changes in regulations and bank capabilities reduce intermediation costs leading to increased growth, innovation and productivity.Banking becomes an even greater driver of GDP growth and employment and large sections of the population gain access to quality banking products. Management is able to overhaul bank organizational structures, focus on industry consolidation and transform the banks into industry shapers. In this scenario we witness consolidation within public sector banks (PSBs) and within private sector banks. Foreign banks begin to be active in M&A, buying out some old private and newer private banks. Some M&A activity also begins to take place between private and public sector banks.As a result, foreign and new private banks grow at rates of 50 per cent, while PSBs improve their growth rate to 15 per cent. The share of the private sector banks (including through mergers with PSBs) increases to 35 per cent and that of foreign banks increases to 20 per cent of total sector assets. The share of banking sector value adds in GDP increases to over 7. 7 per cent, from current levels of 2. 5 per cent. Funding this dramatic growth will require as much as Rs. 600 billion in capital over the next few years. oEVOLUTION Policy makers adopt a pro-market stance but are cautious in liberalizing the industry.As a result of this, some constraints still exist. Processes to create highly efficient organizations have been initiated but most banks are still not best-in-class operators. Thus, while the sector emerges as an important driver of the economy and wealth in 2010, it has still not come of age in comparison to developed markets. Significant changes are still required in policy and regulation and in capability-building measures, especially by public sector and old private sector banks. In this scenario, M&A activity is driven primarily by new private banks, which take over some old private banks and also merge among themselves.As a result, growth of these banks increases to 35 per cent. Foreign banks also grow faster at 30 per cent due to a relaxation of some regulations. The share of private sector banks increases to 30 per cent of total sector assets, from current levels of 18 per cent, while that of foreign banks increases to over 12 per cent of total assets. The share of banking sector value adds to GDP increases to over 4. 7 per cent. oSTAGNATION I n this scenario, policy makers intervene to set restrictive conditions and management is unable to execute the changes needed to enhance returns to shareholders and provide quality products and services to customers.As a result, growth and productivity levels are low and the banking sector is unable to support a fast-growing economy. This scenario sees limited consolidation in the sector and most banks remain sub-scale. New private sector banks continue on their growth trajectory of 25 per cent. There is a slowdown in PSB and old private sector bank growth. The share of foreign banks remains at 7 per cent of total assets. Banking sector value adds meanwhile, is only 3. 3 per cent of GDP. oNEED TO CREATE A MARKET DRIVEN BANKING SECTOR WITH ADEQUATE FOCUS ON SOCIAL DEVELOPMENTThe term â€Å"policy makers†, refers to the Ministry of Finance and the RBI and includes the other relevant government and regulatory entities for the banking sector. The coordinated efforts between the v arious entities are required to enable positive action. This will spur on the performance of the sector. The policy makers need to make coordinated efforts on six fronts: †¢Help shape a superior industry structure in a phased manner through â€Å"managed consolidation† and by enabling capital availability.This would create 3-4 global sized banks controlling 35-45 per cent of the market in India; 6-8 national banks controlling 20-25 per cent of the market; 4-6 foreign banks with 15-20 per cent share in the market, and the rest being specialist players (geographical or product/ segment focused). †¢Focus strongly on â€Å"social development† by moving away from universal directed norms to an explicit incentive-driven framework by introducing credit guarantees and market subsidies to encourage leading public sector, private and foreign players to leverage technology to innovate and profitably provide banking services to lower income and rural markets. Create a un ified regulator, distinct from the central bank of the country, in a phased manner to overcome supervisory difficulties and reduce compliance costs. †¢Improve corporate governance primarily by increasing board independence and accountability. †¢Accelerate the creation of world class supporting infrastructure (e. g. , payments, asset reconstruction companies (ARCs), credit bureaus, back-office utilities) to help the banking sector focus on core activities. †¢Enable labor reforms, focusing on enriching human capital, to help public sector and old private banks become competitive. NEED FOR DECISIVE ACTION BY BANK MANAGEMENT Management imperatives will differ by bank. However, there will be common themes across classes of banks: †¢PSBs need to fundamentally strengthen institutional skill levels especially in sales and mar marketing, service operations, risk management and the overall organizational performance ethic. The last, i. e. , strengthening human capital will be the single biggest challenge. †¢Old private sector banks also have the need to fundamentally strengthen skill levels.However, even more imperative is their need to examine their participation in the Indian banking sector and their ability to remain independent in the light of the discontinuities in the sector. †¢New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serve segments like the rural/low income and affluent/ HNI segments; actively adopting acquisitions as a means to grow and reaching the next level of performance in their service platforms.Attracting, developing and retaining more leadership capacity would be key to achieving this and would pose the biggest challenge. †¢Foreign banks committed to making a play in India will need to adopt alternative approaches to win the â€Å"race for the customer† and build a value-creating cus tomer franchise in advance of regulations potentially opening up post 2009. At the same time, they should stay in the game for potential acquisition opportunities as and when they appear in the near term. Maintaining a fundamentally long-term value-creation mindset will be their greatest challenge.The extent to which Indian policy makers and bank managements develop and execute such a clear and complementary agenda to tackle emerging discontinuities will lay the foundations for a high-performing sector in 2010. CONCLUSION We can conclude that the financial sector is a nerve system of Indian economy. Banking plays an important role in development of economy. For steady growth in economy innovations and development in financial sector is very important. Economy of any country faces lots of challenges and problems. To tackle those problems financial sector plays a vital role.The financial sector makes the economy efficient to the extent where it can rival other developed economies in t he world. Financial sector also faces lots of problems but it should develop certain strategies to come out of these problems which is very important for healthy growth of economy. BIBLIOGRAPHY ?FINANCIAL SRVICES AND MARKET GORDAN AND NATRAJAN ?INDIAN BANKING SYSTEM V. K. BHALLA ?INTRODUC TION TO ECONOMIC ANALYSIS R. PRESTON MCAFEE ?MONEY, BANKING, INTERNATIONAL TRADE AND PUBLIC FINANCE D. M. MITHANI ?BANKING AND PRACTICE P. N. VARSHNEW ?MONEYCONTROL. COM ?MONEYPORE. COM ?RBI. ORG. IN

Analysis of 2012/2013 Botswana Budget Speech

UNIVERSITY OF BOTSWANA NAME: MATILDAH TILLY KAUNDA COURSE: MGT 306 LECTURER: DR MAROBELA TOPIC: ANALYSIS OF THE BUDGET SPEECH ? INTRODUCTION Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Neo-liberalism is the case where the rich grow richer and the poor grow poorer. These are a set of policies that are under the influence exerted by the International Monetary Fund (IMF), the World Bank and the Inter- American Development Bank.They include frameworks of free market trade and no government intervention as well as elements of privatization. This report explores the theories of Managerialism, New public Management and finally neoliberalism implementation in Botswana, to assess whether such a change is constructive to the development of Botswana and Batswana by referring to the budget speech to evaluate whether Botswana is prepared for such a change Managerialism is the pursuit of goals by managers other that for profit maximizati on.According to Locke & Spender (2011) Managerialism is what occurs when a special group called managers ensconces itself systematically in a n organization and deprives owners and employees in their decision making power including the distribution of emoluments and justifies that takeover on the grounds of the managing group’ education and exclusive possession of codified knowledge and know- how necessary to the efficient running of the organization. Application of managerialism to the public sector involves privatization profit motive, incentives for managers and delegation of power.According to Pollitt & Bonkaert (2011) New Public Management refers to deliberate changes to the structures and processes of public sector organization with the objective of getting them to run better. It basically means changes in the way things are done to make them more efficient, more responsive to those who use them; their main focus is on achieving objectives like reduction of poverty. The main emphasis of New Public management is the need to change inefficient, money losing state enterprises into competitive, profit making, taxpaying businesses that provide quality goods services to consumers.This is greatly in line with the words that Honorable Math ambo said in the recent budget speech. He talked of the need for transfer of state owned enterprises to private ones. In the budget Speech Mr Mathambo stated that â€Å" a Privatization Master Plan adopted in 2005 and aimed at identifying all public enterprises suitable for privatization is being revised to among others, identify services and Public Enterprises that are suitable for outsourcing and divestiture during the period 2012 to 2017.In Botswana as said by the minister a new master plan or NDP 10 set out a prudent strategy for ensuring fiscal sustainability while supporting private sector development. A central feature of the strategy is for Government to reduce its dominance by cutting Government expenditure as a share of GDP from 40 to 30 percent Neoliberalism explains the state of no government intervention, free market trade and privatization.According to a journal of sociology (2007) this term broadly means the project of economic and social transformation under the sign of the free market and needs which are formerly met by public agencies in communities and families met by companies selling services in the market. Basically the policy recommendations of neoliberalism are concerned mainly with dismantling what remains of the regulations welfare state. These recommendations include deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class.The theory of neoliberals advocates for no or rather reduced government spending in the economy. Locke, R (2011) stated that International monetary fund which was created to administer the international monetary system is a strong supporter of neoliberalism or rather privatization. According to an article by Victor Baatweeng dated 12 January 2011,The international Monetary fund (IMF) has advised Botswana and other Southern African Customs Union (SACU) member states to slash their expenditure in order to ensure fiscal and debt sustainability.As a result, the IMF has recommended an appropriate mix of revenue and recurrent expenditure measures, with particular emphasis on reducing the wage bill. The Minister of Finance and Development Planning, Kenneth Matambo announced during his budget speech on Wednesday that the government is concerned that due to its dominance in Economic activities, the public sector wage bill has escalated over time and is high compared to that of other comparable middle income countries and that it needs to be reduced.According to Matambo, this can be achieved by reducing the size of the public sector, with functions and activities which are better carried out in a commercial environment being provided by the private sector. It looks like finally the government is responding to the pressures of IMF. However this is a drastic move that will only cause social upheavals and throw some people into the labor market. This move that can be taken by developed countries rather than developmental states like Botswana.Considering the fact that unemployment as mentioned in the recent budget speech continues to be high, and the government planning to cut wage bill and freeze posts, this initiative will solve nothing but rather lead the county into a downhill. Also the introduction of privatization will cause people who were employed by the government to lose their jobs when the private companies take over. The reason for this is that cost cutting has become the main strategy companies adopt in response to the liberalization of markets.These companies will come with short term contracts, part time positions, minimum wages and no job security. Instead of finding ways to curb the issue the government plans to add fuel to the fire. H0 This move to privatization and outsourcing of services most importantly essential services like water and electricity will only have a negative impact on the poor . According to Steger and Roy (2010), there should be state ownership of crucial national enterprises like energy and railroads.They further stated that Keynes in particular advocates for massive government spending in time of economic crises to create new jobs and lift consumer spending. The paramount objective of the capitalist’s economy is to make profit rather than enhancing wellbeing in economically efficient ways. Prices in the private sector tend to be high unlike in the public sector where they are subsidized to cater for those below the poverty line. In the budget speech the Minister stated that individuals below Botswana Poverty Datum Line declined from 30. 6% of population in 2002/03 to 20. % in 2009/10 but taking this initiative of privat ization will negatively affect those living below poverty datum line and may even end up increasing their number. State intervention is important as well as crucial to the economy as well as to the welfare of its citizens. It ensures social efficiency and fair and just allocation of resources and prevents market failure. According to monopolistic competition economy is a further reason for intervention by the government because it has the potential for the misallocation of resources through fixing wrong prices and making the customers worse off.Hughes(2003)’ s view on privatization was that market systems does not necessarily bring high employment , price stability and the socially desired rate of economic growth and thus the essentiality of public policy to secure such objectives. There are a number of reasons for the need of neoliberalism and why less state intervention in a state may be appropriate and viable. According to a journal by Wendy Larner† Liberalization is essentially about the introduction of competition. The main argument for avocation of liberalization is that competition forces alternative providers to improve productivity and service quality. She further stated that though there is reduction of employment as a consequence of liberalization and privatization, in many cases, lower staff levels result in work intensification. According to Locke (2001) Private sector practices and technologies are superior to those used in the public sector, thus there is high efficiency and effectiveness. He further stated that this idea has a long tradition that can be traced back to 1868. Privatization comes with competition and thus considered a viable strategy for improving performance of public bureaucracies because it lowers costs and increases efficiency.A further argument for privatization is to reduce cross subsidies and charges for services in accordance with their true cost. The argument is that subsidies are economically undesirable as true costs and inefficiencies are can be hidden. There are other mechanisms preferable like direct funding from the budget or giving cash to those to be given assistance. Neoliberasation also reduces government borrowing. The government should only borrow for long term assets such as power stations. A lower government borrowing has lower interest rates and thus helping the economy. Hughes 2003 pg 104). CONCLUSION Government intervention in the market is mainly aimed at reducing injustices and inequalities. While state intervention should be reduced to a minimum to promote efficiency, government should always keep an eye out for situations that only government intervention will regulate in everyone’s best interest against the interest of just a firm. It is difficult to choose a stance between state interventions in the economy because it comes with both advantages and disadvantages for the country.However for a developmental state like Botswana I believe that it is advisable n ot to undergo this change as it not well developed and the welfare of Batswana depends on it. REFERENCES Baatweng, V. (2011, January 12). IMF SLASHES WAGE BILL. Larner W, Neo- liberalism:policy, ideology Governmentality. studies in political economy . Journal of Sociology  © 2009 the Australian Sociological Association, Volume 45(4): 331–338 Locke, R. R. (2011). confronting managerialism. New York: Zed Book Ltd. Kotz M (2002). Globalisarion and Neoliberalism. Rethinking Marxism, Volume 12, Number 2, Summer 2002, pp. 64-79. , 64-79.Matambo, O. (2012). BUDGET SPEECH 2012. Gaborone: Government Printing and Publishing Services,. Steger& Roy (2010) NEO LIBERISALISM- A VERY SHORT INTRODUCTION. New York, USA: Oxford University Press. Locke & Spender (2011). Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance (Economic Controversies) by. new york, USA: zed Books Ltd. Hughes E (2003). public management and administration. An introductio n. NEW YORK, USA: Palgrave macmillan. Pollit et al (2011) Comparative Analysis- New Public Management, Governance and †¦. , New York, USA, XFORD University Press

Like dove and serpent

Brief SummaryThe article depicts the life of an imprisoned priest, Edicio de la Torre, while he was involve with a Christian movement for national liberation in the Philippines under the regime of autocratic leader, President Ferdinand Marcos. His passion for human rights work continued even after he was released from prison that set him off to leave the priesthood.The Priest has made public his idealism through the interview with the representatives from Mennonite Central Committee; Earl Martin, Dave Schrock-Shenk, and Brenda Stoltzfus. The disclosure of his experience, ideas and outlook in life was impelled by three guide questions that encouraged him to freely express his position in some circumstantial events involving the helpless victims suffering from the ruthless governance.When he was asked the first question on how did he survive being imprisoned for nine years, and how did his faith help him, he humbly affirmed that it was his faith that helped him survived. But, he furthe r elucidate that it was his perseverance in living that encourages him to stay focus in order to help the people that seek his assistance even he is in prison. He has accordingly, extended inspirational or counsel or even technical advices to the people that worth him the living. He remained steadfast being part of the movement, even he is in prison.The second question being asked to the priest is about the need for reconciliation in Philippine society and what is necessary for reconciliation considering that Marcos has fallen.   The priest answered citing that reconciliation is quite a problem.   Accordingly, it is difficult to handle reconciliation that demands justice. It might be easy for the oppressor or for the human rights violators to ask forgiveness, but for the victims, it’s not just simply to â€Å"forgive and forget,† it’s a challenge to find the divine grace to forgive. He cited that if a military man is asking for forgiveness from the family of the people he killed, then, he has to be genuinely repentant and initiate restitution and offer penance. With that, just reconciliation could be attained assuring or safeguarding mental, human and Christian values, and acknowledging realities of human wickedness and deceitfulness.The priest calls it as biblical politics which reflects simplicity of heart, like a dove, and assessing the deviousness and intricate ways of human mind, like a serpent. Accordingly, it is the problem of any movement to be both simple and forgiving and at the same time politically clever and cautious to live within a historical world.   The priest further stated that something should happen in the Philippines where reconciliation with justice will be realized, just like what Gandhi of India has proposed for a repentant Indian who set fire a Muslim house and roasted the people there, to raise a Muslim orphaned baby.   This has to be done on an individual basis, but for those who are in the movement, it is not easy to do it and it is also hard on the social and political level. Genuine reconciliation is accordingly, hard to attain with so many victimized people grieving family members who suffered cruelty.The third question on what reflections could the priest would offer on liberation and the movement for democracy in the Philippines after spending nine years in prison and much work in the movement, was   accordingly hard for him. He expressed regret for being with the complicated situation that requires one to be modest and less dogmatic. The priest thought that liberation was just simply witnessing that the sinful world had been redeemed and that God has promised the kingdom.   But, it is accordingly, more than that, everyone should contribute something and should work together to create a better world, a better earth.   It requires full commitment of oneself using resources, skills, strengthens and even weaknesses to claim a part of historical moment where each one could recollect and reaffirm commitments.Finally, the priest did not see anymore himself in traditional or institutional ministry. He has change his vocation, he has see more meaning and the need to be with the people’s movement as a fulfilling task to be part of historical and popular movement toward the coming of the kingdom.Reflection and Relevance to Today’s SocietyGod has given everyone the right to chose what is good and what is bad. Hence, we have to respect the decision of the priest (Edicio de la Torre), in choosing to join the movement and deny his priesthood for the sake of helping the struggle of the many Filipino people who are victims of injustice, social and political oppression, and economic deprivation. Being radical with the movement is the best way for him to help the people than working in traditional institution, in which he implies that it is not enough to evangelize and witness the word of God, but to actually release the people from the bandage of per secution manipulated by oppressors.On the other hand, there had been so many Filipino priests like Fr. Edicio de la Torre, who had changed their vocation (as priest) and joined liberation movements. But their struggle for better future and better world is in vain, some have died along the way. However, this does not stop the struggle, instead, encourages the movement to go on.ConclusionSocietal problems are manipulation of the forces in the dark. Everyone should be aware that the power of darkness wants dominion over the whole world. The problems in the Philippines, whether social, political, economic and even religious are likewise the kind of problems presently faced by the whole world. Solving these problems and healing wounds could be done by addressing the root causes of the problem in a wise and humble way, not using force or rebellious act. As what God has promised; blessed are the peacemakers, for they shall be called children of God, and blessed are they that hunger and thi rst after justice, for they shall have their fill. Lastly, God said that, blessed are they that suffer persecution for justice’ sake, for theirs is the Kingdom of Heaven.

Functions of Management Paper Essay Example | Topics and Well Written Essays - 750 words - 2

Functions of Management Paper - Essay Example mpany and they use to give example of Southwest Airlines where right application of human resource pool helped the airlines to achieve business excellence (Pride, Hughes, & Kapoor, p.p. 159-160). Business management is a broad term used by management researchers to define various elements of business operation. Not only has private sector given importance on business managing but also other types of organizations (NGOs, public sectors) give importance on the subject. Business management is important counterbalance any types of organizational complexity or inconveniences (Spicer, 1997, p. 92). Planning is integrated part of management system while many management researchers has indicated planning is the first step of management. Planning is the systematic framework of setting business objective for the organization and designing strategy map to achieve the objective. Organizations establish a mission statement (like Google’s mission statement is to organize information for people and making an easy online platform to access the information for people) is the initial phase of planning process. Companies allocate resources in accordance the mission statement while the process is known as strategic planning. Suppose my organization is Finnish telecommunication giant Nokia. Tagline of the company is connecting people. The company needs to establish business objective of expanding distribution and regain market position within next five years. New product development and retail chain expansion are two major strategic plans in order to compete with Apple and Samsung. Management creates the basic design of work pattern in the organizing phase by defining organizational communication level (vertical or horizontal) for employees. In this phase management assign work responsibility to certain groups or individual workers. Defining who the target customers plays important role in this phase since knowing the needs of target customer’s helps employees to provide

Trends of HIV and AIDS in the USA Assignment Example | Topics and Well Written Essays - 5000 words

Trends of HIV and AIDS in the USA - Assignment Example Human Immunodeficiency Virus (HIV) is like any other virus that attacks human beings. The difference is that this virus cannot be eradicated by the immune system. The virus is responsible for weakening the key parts of the human immune system (CD4 cells or T-cells), such that it becomes ineffective in fighting diseases. With time, it causes Acquired Immune Deficiency Symptom (AIDS), at the final stage of HIV infection. With proper treatment, however, a person can keep his/her HIV level low reducing the chances of developing AIDS (Aids.gov, 2014). The condition can be transmitted through unprotected sexual intercourse with an infected person, childbirth (from infected mother) and blood transfusion (exchange of blood from infected individuals). In 1981, United States of America became the first country to recognize HIV and AIDS as a new disease among gay men. However, the origins of HIV and AIDS are suspected to be in Africa (Avert, 2014). Since it was first discovered to the public conscience more than three decades ago to date, the disease has gained a notorious reputation as a feared and controversial disease in modern medicine which leads to it being widely politicized and mystified (Avert, 2014). During the early 1980s, disjointed reports from many states, especially California and New York, claimed that small groups of men, most notably elderly men of Jewish/Mediterranean descent and young African Americans, were contracting a rare and new type of cancer and/or pneumonia. A common factor in the groups of individuals affected by this disease was that they were all homosexuals. In June 1981, the condition was first documented by the United States Center for Disease and Control and Prevention (CDC) and was named as Pneumocystis Pneumonia. By early 1982, the condition had acquired various names including ‘gay-related immune deficiency’, ‘gay-cancer’ and ‘gay compromise syndrome’ with approximately five new cases being reported per week. The acronym AIDS (Acquired Immune Deficiency Syndrome) was suggested in July 1982 at a meeting in Washington with the CDC first using the term in September 1982. Â  

Discussion Essay Example | Topics and Well Written Essays - 250 words - 67

Discussion - Essay Example porter, a country through its government may require pre-shipment inspections on/ for inspection certificate to confirm that the price being charged by the exporter is commensurate with the true valley of the goods or services [to be shipped]. This therefore parries away the danger of substandard goods infiltrating a country. The same also assuages attempts to escape the payment of custom duties. This is always the case if the shipment being made is of high value, as was previously mentioned. In some cases, an inspection certificate may be required in some countries, for a specific type of goods. For instance, on the one hand, in Kuwait, an inspection certificate is required whenever there is an importation of a regulated product whose value exceeds 3,000 dollars. On the other hand, Mexico requires an inspection certificate for goods such as textiles, shoes, bicycles and shoes, if only these products fail to qualify for NAFTA. Conversely, shipments to Kuwait and Saudi Arabia must contain an inspection certificate for a small number of

Strategic Marketing Essay Example | Topics and Well Written Essays - 2000 words

Strategic Marketing - Essay Example In this respect, they have recognised their responsibilities towards its internal and business environment. For example, existing business organisation are more focusing on enhancing stakeholders’ value. Moreover, they are also concentrating on the welfare of society, environment and community as they have understood that these activities are very important for their sustainability and for corporate governance (Aras and Crowther, 2009, p.36). In post-modern organisations, management are using these concepts and theories as an important tool for marketing, brand development and for entire strategic management. This paper will attempt to present discussions on environmental marketing which is emerging as a tool for better strategic management. In this respect, the entire discussion will focus on critical analysis, and at first a brief overview of environmental marketing will be presented followed by critical evaluation of its increasing importance. Then, multiple influencing fac tors in environmental marketing will be assessed followed by an analysis on multiple issues in environmental marketing. ... Brief Description of Environmental Marketing Environmental marketing is an emerging concept in strategic business management and it refers to the marketing activities revolving around the environmental consciousness. The increasing environmental awareness among the management and consumers is the major reason for its development. Environmental marketing is also referred as the green marketing. Polonsky and Wimsatt have explained that â€Å"environmental marketing is rooted in the essential tension between environmentalism and modern mass consumption† (Polonsky and Wimsatt, 1997, p.38). Environmentalism involves the entire environmental related issues like global warming, air pollution, water pollution, resource depletion etc. Increasing industrialization and business activities have a greater negative impact on environment and being a social entity, the business organisations have now realized their responsibility towards the safety of environment. There is a conceptual relati on relationship between the green marketing, industrial ecology and environment. Oyewole (2001), have developed a model that clarifies this conceptual relationship. The model is given below. Figure 1: Relationship between Industry and Environment (Source: Zaman, Miliutenko and Nagapetan, 2010) As per the above figure, social cost (including monetary and non-monetary) is major factor that relates the industry and environmental aspects. Considering the social cost, business organisations are now practising green marketing management. For example, they are implementing innovative technologies to develop eco-friendly products focusing on recycling and energy conversation. Increasing Importance of Environmental Marketing Since last decade, the importance and necessity of

Corrections Module 6 Writing Essay Example | Topics and Well Written Essays - 750 words

Corrections Module 6 Writing - Essay Example The fourteenth amendment has a statute of incorporation which enforces that all details contained in the bill of rights must be followed by all the states. Moreover, prisoners are provided with equal protection irrespective of the state jurisdictions. Alongside this, there is a clause to ensure the federal government respects and honors all citizens’ legal rights as contained in the bill of rights. The Civil Rights Act of 1871 impacts fairness and equity in lawsuits irrespective of whether one person involved is a minor or a servant of the other. This was meant to protect those who were enslaved from cruel treatment that led to deprivation of human and civil rights, immunities and privileges offered to individuals. This was to be followed irrespective of the race, tribe or religion. Especially the freed slaves were allowed equal and free access to courts of law to claim their rights against civil rights offences inflicted on them. They would file lawsuits like any other person. The hands off doctrine deduced that prison administration should operate on its own without interference or control by outside forces such as the courts and prisoners are further considered as slaves of the state . Once the prisoner is under prison administration, the court has no power over him again unless the eighth amendment is violated. The doctrine of intervention claims for the freedom of religion, need for privacy, safety and communication without forgetting the right to or for due process. Finally the nominal doctrines circulates in between the intervention and hands off doctrines, as far as the court jurisdiction had presided since the eighty’s. In matters regarding prisoners access to courts, they are allowed full access to the since without it they cannot air their grievances which means no lawsuits. Moreover prisoners did not have adequate knowledge on legal affairs thereby their lawsuits did not stand a chance. The courts ruled to assist them by

Business Ethics in IT Management Essay Example | Topics and Well Written Essays - 750 words

Business Ethics in IT Management - Essay Example When the organization collect data related to employees they are supposed handle it with secrecy and confidentiality. My organization is highly strict on safeguarding the details of the employees and other information related to the human resource department. Information related to pay scale of employees, social security numbers and other account details are allowed to be handled only by authorized personnel. Even the organization is not supposed to conduct any activity which can harm the environmental balance of nature. The nature of business is not supposed to be conducted against the social interest of the community and nation. The managers are not allowed to manipulate and misuse the key strategies and policies of the organization. My organization also have the right to monitor our activities to assess whether we follow the ethical code and principles of the business. In my organization employees are evaluated by the ethical standard they follow, as it is the core value of the or ganization. A person with no moral or ethical value can never be a good employee and can spoil the goodwill and reputation of a firm. My company tests my ethical behavior while I work in the organization in order to make sure that I am productive and harmless to the organization working process. My company does not allow using the company telephones to make long distant calls as this show that as an employee I want to misuse the company services. Manipulating the software’s of the company and using company products when not in offices are against my organizational ethical standard. My organization feels that if the employee cannot adhere to the ethical code of the firm then he is not worth to work in the organization. An employee can only be trusted and relied upon if he can follow the moral and ethical value of the organization.  

Pizza! the Best Party Food Essay Example for Free

Pizza! the Best Party Food Essay Ding! Dong! â€Å"The pizza’s here everybody†. What do you mostly always eat when there is a party? What do you expect to eat at a party? That’s right! It’s pizza. A party without pizza is like a store without anything to sell. Some reasons that it is the best party food is that everybody eats it and is easy to get. Another reason is that everyone loves it. So why not get pizza the next time you decide to throw a party. First of all, lactose intolerant people aside, who doesn’t love when the pizza guy arrives at the door with, boxes of that deliciousness. Also it is the easiest thing to get for a party is pizza. Its so hard to cook for anywhere from 50-100 people. That would take hours of work and make the house smell bad. Why not just spend 60 dollars and get about seven whole boxes of Pizza Hut, Domino’s, DiGiorno’s, or anything else. Its saves so much time and the trouble of cooking. Also who knows if they will honestly even like the food you cook. When getting pizza you know everybody will eat it because the hosts of parties know people love pizza. Do you want to be remembered as a good host or party thrower? Then go buy pizza. You will probably spend that much on whatever you are cooking any way. So take the easy way out, and also the smart way. Next, everyone enjoys pizza, name one person that just doesn’t enjoy pizza. The perfect blend of cheese, tomato, and bread gets everyone’s mouths watering. Everyone just can’t resist from taking a slice. On the other hand it also tastes very good with drinks such as sodas. You can have all the wings and breadsticks you want but no matter what it won’t be a party without pizza. If I ever met someone who doesn’t like pizza I would interrogate him with questions. Did you ever even try it? Are you crazy? What’s wrong with you? What planet have you come from? Good thing I have never met anyone like that. Pizza is also rated the peoples’ most favorite food worldwide. So at a party you know it’s pretty demanding. If people don’t get pizza then it will make the guests unhappy and unsatisfied in their stomach. Overall there is no way around it. Pizza is the king of the party. It is the stomach filler. It is the most essential ingredient to making a successful party.

Cushings Disease: Symptoms, Treatment and Causes

Cushings Disease: Symptoms, Treatment and Causes Julie Seel   Introduction Cushings disease is relatively rare and is commonly in adults. Cushings is a hormonal disorder that the bodys tissues care exposed to increased levels of the hormone cortisol. (NIH) The cortisol hormone is released when there is stress and with exercise in some people. The main things that the cortisol does are: throttling or suppressing the immune system, metabolizing fats and carbohydrates, and increases blood sugar. (healthline) The Cushings disease is more commonly observed in women, and about 90% of those cases are due to pituitary microadenoma or corticotroph hyperlplasia. (virtual library) Signs and Symptoms Signs and symptoms vary, but most cases have upper body obesity, round face (moon face), increased fat around the neck and shoulder area (buffalo hump), osteoporosis, high blood pressure, increased blood sugars. Also women can have increased hair on face and chest, abdomen and thighs. Men may get a decrease in fertility and absence of sexual desire and possibly erectile dysfunction. (Nih)(Lab) the ICD-10 code for the Cushings disease is E24.9. In some rare cases people have had inherited the gene for Cushings disease, such as multiple endocrine neoplasia type 1 or Men-1. This can increase risk for tumors developing throughout the endocrine system and sometimes include the pituitary and adrenal glands. People who are obese and have diabetes are at a high risk for this disease (Lab). Diagnostic Testing There are a number of tests the doctor can give for the Cushings disease diagnosis. A 24-hour urine cortisol, dexamethasone suppression test (low dose), salivary cortisol levels are taken in early morning and late at night. These three tests will confirm too much cortisol in the body. Also, the tests can determine the cause of the disease are: blood ACTH level, brain MRI, corticotropin-releasing hormone test, dexamethasone suppression test (high dose), and inferior petrosal sinus sampling (IPSS). Other tests that can be done but isnt necessary are: fast blood glucose and A1c for diabetes, lipid and cholesterol testing, bone mineral density can too check for osteoporosis. (Medline Plus) Treatment Options At the follow-up appointment the doctor will go over all the test results, and the next plan of action will be. The treatment would be surgery to remove the pituitary tumor and the pituitary gland may return to normal and start to work slowly again. During the recovery process, cortisol replacement therapy, so the pituitary needs to be able to have time to make ACTH again. Also, if the doctor could not remove the whole tumor completely radiation might be done to the pituitary gland. If surgery and radiation doesnt work on the tumor, medication may be needed to stop making the coritsol in the body. The last resort if none of these treatments work, the adrenal glands will be removed, and it will stop the increased levels of the cortisol. Also, if the adrenal glands are removed the tumor on the pituitary gland will get much, much bigger. (medline) Prognosis/ Summary If Cushings disease is left untreated, it can lead to severe complications. People can have excessive fatigue, obesity, nausea and vomiting, diabetes, hypertension and can lead to premature death. (Skull) Removal of the tumor can be a full recovery, but lifelong replacement medication to keep your hormones in balance. Two medications that have been approved by the FDA are: mifepristone and pasireotide, for the treatment of Cushings disease. (Medline Plus) Very rare the tumor can grow back, and the patients will need to go back to the doctor and see what can be done the treatment options are. REFERENCES Cuevas-Ramos, D. (n.d.). Update on medical treatment for Cushings Disease. [online] Available at: http://clindiabetesendo.biomedcentral.com/articles/10.1186/s40842-016-0033-9. Ilias I, N. (2012). National institute of diabetes and digestive and kidney diseases. [online] Available at: https://www.niddk.nih.gov/health-information/endocrine-diseases/cushings-syndrome [Accessed 5 Mar. 2017]. Krause, L. (2005). Pituitary-dependent Cushings disease. [online] Available at: http://www.healthline.com/health/cushings-disease [Accessed 28 Jan. 2016]. Labtestonline.org. (2016). Labtestonline.org. [online] Available at: http://www.labtestonline.org/conditions/cushing [Accessed 10 Mar. 2017]. Mayoclinic.org. (2016). Overview Cushing syndrome Mayo Clinic. [online] Available at: http://www.mayoclinic.org/diseases-conditions/cushing-syndrome/home/ovc-20197169 47k [Accessed 10 Mar. 2017]. Medlineplus.gov. (2016). Cushing Syndrome | Hypercortisolism | MedlinePlus. [online] Available at: https://medlineplus.gov/cushingssyndrome.html [Accessed 10 Mar. 2017]. Skullbaseinstitute.com. (n.d.). Cushings Disease: Surgery, Treatment Symptoms | Skull Base Institute. [online] Available at: http://www.skullbaseinstitute.com/pituitary-gland-tumor-surgery/cushings-disease-endoscopic-surgery.htm [Accessed 10 Mar. 2017].

Solutions To Overcome HR Issues

Solutions To Overcome HR Issues Reliance telecommunications LTD is an Indian telecommunication company founded by Anil Ambani in 2004.The headquarters of the company is in Navi Mumbai India. Reliance telecommunication is the 15th largest telecommunication provider in the world with 150 million subscribers and the second largest telecommunication provider in India. The company has segments like wireless and broadband in telecommunication industry. The company achieved a high growth in telecommunication industry from the beginning stage itself. Customer satisfaction and good company policies made them to competitive with other companies. Reliance communications follows good human resource policies and procedures even though it has some draw backs. Vision of the company-Providing information, communication, entertainment services and being the benchmark in customer experience, employee centricity and innovation is the main vision of the company. Mission of the company-meeting beyond customer needs and wants with a segmented approach, relentless offering of services and products that are value for cash and stimulate customers, offer a network experience that is best in the communication industry, make reliance in to an international brand which is a iconic brand by others and lead industry in target to purchase and faithfulness. INTRODUCTION TO HUMAN RESOURCE MANAGEMENT Human resource management refers to an assortment of policies used to systematize work in the employment relationship and centres on the management of work and the management of people who undertakes this work. Therefore HRM is concerned with recruitment, selection, learning and development, reward, communication, teamwork and routine management. While it is relatively easy to list activities that make up HRM, It is a subject that stimulates much debate and disagreement. The hr process is considered as important for the management of the consumer pleasure with human recourses. The clients find comfortable and will be satisfied when they understand the hr processes and how they are connected and the hr processes interact. Modern hr processes are measured and frequently analysed and identifies the irregularities in the activities and it brings the improvements for the benefits of the organisation. The success of Human Resources Management is in the connection of all HR processes as they provide the adequate supports to workers and the managers. So the main aim of Human Resource Management is to keep the human capital ready for action on the market and the rational grouping of HR Processes helps to interact and manage the individual processes. Every organisation has their own HR processes, but the main HR Processes are always same in all companies as it is the market HR Best Practices. Human Resource Management is considered as a comparatively new approach to Personnel Management. HRM emphasizes primarily on its strategic contributions and its closer alignment to business, HRM is a vital component of any organization, its involvement among other components of line management is notable (Paauwe. J, Jan 2009). Paauwe further suggests that HRM aims on its ultimate goals such as High job performance, low absence and high cost effectiveness through the efficient utilization of the man power of the company. Human resource is really the major component of any organization, the success or failure of an organization heavily relies on its Man power management. Maslows need Hierarchy theory is considered as guiding principle for HR Management across the globe. Maslow identified the very basics of human motivation factors. Following this principle it can be assumed that to motivate an employee HR manager should understand his level of expectations, potential of the employee, a nd should evaluate the performance before and after certain motivational measures implemented. KEY HUMAN RESOURCE ACTIVITIES OF RELIANCE TELECOMMUNICATIONS MANPOWER PLANNING Human Resource Planning is the integral part of Human Resource Management Human Resource Planning estimates the optimal level of Man power requirement on the basis of quality and quantity. Thus HRP can be considered as the foundation of Human Resource management. Although HR planning is very important it cannot be executed faultlessly in all cases, as HR is dependent on various factors such as employment situation of the country, influence of technological advancement, changes in the organization structures, Demographic factors such as age, population, composition of workforce, lack of skill, multicultural workforce etc. Certain pressure groups will also affect the precision of the HRP. Understanding of competencies of the Human resource is vital in forming a successful HR frame work. Lengnic-Hall, 1988, Milliman et al., 1991, describes the terms Internal and External fit, Internal fit refers to the extent to which the manpower constituents are linked in a logical way and how effecti vely they support themselves, on the other hand external fit primarily focus on the strategy of the organization, external fit reveals to what extent human resources systems are integrated. Manpower Planning or Human Resource Planning includes putting exact number of people, exact kind of people at the exact place, exact time at a low cost. Personnel Planning hold an important place in the world of industrialization. Personnel Planning has to be a systematic approach and is managed in a set of model operations. The procedure is as follows: Assessing the present manpower in the company Forecasting the future needs budding employment programmes Organising training programmes BENEFITS OF MAN POWER PLANNING Manpower planning is very important part of human resource management. A few importance of man power planning are. concentrated labour cost.-with the help of manpower planning there is most favourable operation of labour force in the organisation workers are given those jobs to implement for which they are skilled (right person for the right job).it leads to overall progress of the man power in the organisation. Optimum utilisation of manpower: it helps to utilise the labour force in the company which helps in the growth of manpower in the organisation. Develops business plan-Man power planning is an important part of overall business planning. No business can survive without having the right type and number of people doing the right work at the right time. Helps in career succession planning-with the help of better manpower planning it helps to produce a good career succession of employees which provides much lead time for internal succession of workers through higher position through encouragement. Development of the organisation- The man power planning helps in the expansion of an organisation. Growth in overall business planning-Manpower planning is a main part of overall business planning. Efficient manpower planning will help to improve the business. RECRUITEMENT AND STAFFING Recruitment and staffing is the process of selecting the right labours in to the organisation. The main aim of recruitment is to look for and be a magnet for persons with skilled to fill the vacancies. This process includes job analysis preparing personnel requirement sources of skilled employees. Job analysis Job analysis is a process of analysing the job in detail and providing the details of job needs to the HR planning department they present details as job specification and job analysis. Job analysis is important in the whole organisation. And they will provide the details of manpower requirements. The main sources of recruitment are Reliance communications have two main sources of recruitment internal and external internal external sources of recruitment(figure.2) Internal sources of recruitment are. Promotion-This is a normal source of recruitment, which means providing higher position, salary and responsibilities to the employee. So the position of the job vacancy is filled by promoting the suitable employee within the organisation. Transfers-It means transferring one employee to the other organisation without change in salary and position, so the vacancy can be filled by transfer. Advertising internally-Here the job vacancy is advertised within the organisation so the existing employees in the organisation can apply for the post. So the recruitment is take place inside the organisation. External sources of recruitment are. Selective recruitment through job boards-This is a major source of recruitment .To ensure most appropriate qualified candidates are being applied for the major position. The agency considers the following details for every positions junior, intermediate, senior, Level of education degree, diploma etc. Using these details the company determines which job boards, communication channels, and advertisement strategies are suitable for attract the right skilled candidates to apply for the job positions. Management consultants-For the vacancies in the higher positions in the company, management consultants are used to find the qualified and skilled employees. They act as a recruiter on the behalf of the company. Advertisement for public-The Company advertises the vacancy in internet, newspapers, Television etc. And this will provide the details of the company, job and the qualification required for the position. NEED AND IMPORTANCE OF STAFFING Keep space with new development-New developments are happening every day. A business will have to keep phase with new changes. This will be possible only if competent persons are employed who can adjust as per the new situation. Manpower Development-man power planning will have to be done in advance. The future requirements of personnel will be estimated quite in advance. The new staff will be recruited, people will be prepared for talking up higher responsibility jobs, and all this will be possible with a well planned staffing function. HUMAN RESOURCE DEVELOPEMENT This function helps the employees to develop their skills and knowledge for increasing their output. This process is not only done for the freshers but also to the existing employees in the firm to develop their skills and responsibilities. Human resource development helps to increase the total knowledge, abilities, skills, talents, and aptitudes of an organisations work force. Human resource development includes function such as training, career development. Training-Training is providing to improve the knowledge and skills of the employees there are mainly two types of training they are on the job training and off the job training. On the job training is a process of giving training in normal working situations using actual materials or documents, equipment, actual tools trainees will make use when completely moulded. Off the job training is usually provided away from the usual working environment, it may include more general skills and knowledge which is useful for the job. This type of training is given by the specialised trainers or from an outside company who outsource the trainers. METHODS OF TRAINING A.Programmed learning- It is a step by step process of self learning method,providing questions, facts, and problems to the learner then allowing the person to respond and providing feed back on the accuracy of the answer. B. Apprentiship training- It is a method of process that the employees will become efficient workers through grouping of classroom coaching and also through on job training. C. Audio visual based training- This method of training includes tools like power point presentation, online video conferencing, audiotapes and video tapes. D. Computer based trining- This training method is widely used to provide good training to employees, it is time consuming and easy way to provide training. It is cost effective while comparing to other training methods. E. Simulated training- In this method trainess will learn from the actual or simulated equipement they will use on the job, but actually trained off the job. F. Lectures- When their is a large number of trainees, this method is used it is the immideate way to give instruction of job related activities within a specified period of time. H. Internet and distance Training Internet training includes video conferencing and web based training, distance training means traditional training paper and pencil correspondence course. 1. Tele training where a trainer in a central location teaches groups of employees at remote locations via television hookups. 2. Videoconferencing Video conferencing will provide the opportunity to train the employees from one location and communicate live through video and audio visuals with people in different locations another country, city etc. 3. Training via the Internet the Internet based learning programs are very popular. Several companies simply let their employees to take online courses provided by online course providers while others use their intranets to facilitate computer-based training. CAREER DEVELOPEMENT Diagram demonstrating your personal development Carrer developement of employees is a crucial part of the organisation, It helps to identifies the overall acheivement of the employees .Career developement is becoming an essential part of HR departement due to todays everchanging organisaton enviornment and work place. Reliance communications helps the employees to attain a good carrer graph based on the company HR policies and procedures. First of all the company gather the strength and weakness of every individual, then they provide different opportunities to develop their carrer based on the strength and weakness. The basic formula for the career developement is self awareness every individual asses their own problems and issues and then the company will help to over come this issues .Now days people are changing their jobs to attain a good carrer success .Reliance communication identifies this problem and they had a good career sucession plan for every individual employee in the organisation. COMPENSATION AND BENEFITS Compensation and benefits is a basic motivational factor to the employees.Every employee will search for high paid jobs,benefits is also another important factor if the company provides good benifits the employees will get good attachment to the company. Benefits include bonus, medical insurance,retierment policies, life insurace, vacation etc.Reliance communicatons provide basic pay which is satisfiable for every employee to motivate the employees and to attract to qualified employees to the organisation. LEADERSHIP DEVELOPEMENT Leadership developement helps the organisation to achieve the goals, through the developement of good leadership in each employee reliance aims at the overall developement of the organisation as well as the growth in employees functioning.Every employee in the organisation is gaining a better leadership quality through the leadership developement function.Each emloyees in the company are closely monitored by the management and if they are weak in the work the company will encourage them.And the workers are councelled by the management to increase work efficiency.And their will be a structured plan to create a positive working enviornment.The main aim of leadership developement is to leading self,leading others and leading the organisation. MAJOR HR ISSUES FACED BY RELIANCE COMMUNICATION ISSUES IN RELIANCE COMMUNICATIONS EMPLOYEE RETENTION POOR HR POLICIES CASH AND COMPENSATION ISSUES 1.CASH AND COMPENSATION ISSUES: Cash and compensation issues is a major problem faced by HR managers in reliance communications. There is more pressure on HR function to pay more incentives and basic pay for the employees.However reliance paying basic salary to each individual employees the company faces more pressure to meet the employee beniefits . 2.EMPLOYEE RETENTION ISSUES: Most of the companies face the same problem of employee lay-offs. So the organisation have to prevent the issue by retaining the employee by providing good working condition and benefits whichever the employees need. In reliance industries there are so many employees leave the company due to lack of co-ordination between workers. The organisation tries to check the issue but fails sometimes. 3. POOR HR POLICIES : The plocies and practices adopted by the HR managers regarding their networking sector is an important example. They brought some new plans in mobile networking sector like low call rate for mobile users, low internet browsing charge.etc., but the competitors like AIRTEL communications, BSNL network, VODAFONE facilitated some more exciting offers than the reliance. In that situation the Reliance communication hesitated to change their HR policies and techniques. From the graphical representation of reliances communications profit from 2007 to 2012, we can easily determine that the profit is coming down in last two years comparing to the past this is due to the poor HR issues as mentioned above.The company is earning a high growth in 2008 and 2009 which is around 55000 million and it is dramatically falling down in the upcoming years.That means the company is facing some major HR issues and also high competition from other companies, so the organisation must change their HR policies eventually. SUGGESTIONS TO OVERCOME THE HR ISSUES Nowdays telecommunication industry is facing high competition from other telecommunication companies, If the company has no good HR stratergies the company cannot exist in the high competative world.Reliance communication is facing some HR issues as mentioned above, to overcome this problems company must do some good HR restructuring process in the company .The first main issue is ; Cash and compensation issues- As it is a major problem the company must find a good solution to overcome this issue, the suggestion to solve this problem is to pay cash and compensation based on the experience of the employees.As mentioned above the company is paying a basic salary to each individual, first of all the company must change this basic payment method,and the compensation and benifits must be paid according to the experience and skills of each individual. So the company can reduce the cost of labour so the company can meet the compensation and benifits of each individual according to the profit earned by the company. Employee retention issues-Retention of employees is another HR issue faced by the company, nowadays a lot of employees are leaving the company due to high pressure of work and lack of co-ordination between employees are the main employee retention issues faced by reliance communication, to reduce this problems reliance must provide good working enviornment to reduce the pressure of work, communication is another way to over come this problem good communication between the management and staff will make a good understanding between the employees and management, this will increase employees confidents and reduce the work pressure.A high rate of employees resigning their job and going to another companies who offer better working enviornment. Better co-ordination is the another way to improve employee retention,co-ordination will improve better relationship between employees and management.And this will result increase employees confidence and work efficiency. Poor HR policies-Due to high competition in communication industry lots of companies introducing new HR techniques to improve their company goodwill .Reliance communication is following the traditional HR policies and plans so the company is facing high market competition from other companies, to exists in the competative market company must improve their HR stratergies and policies.Nowadays companies are providing good offers to the employees so the company must realise the problems and try to overcome such issues.