Business Environment Notes

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

UNIT – I BUSINESS CONCEPT Q. What do you mean by business? What are its characteristics? Or Outline the nature of modern business. Or What is your perception about business in 21st Century? Ans : Characteristics of Business : The nature of business is very dynamic and it undergoes changes from time to time. Business in 21st Century is characterized by intense competition among firms, aggressive expansion, growth and diversification strategies, keeping pace with sophisticated technology and the like.  Business fundamentally involves exchange of goods and services for income.  Activities of business enterprise are recurring in nature.  Profit motive is the main characteristic of business; however the enlightened organizations endeavour to optimize the profits rather than to maximize it.  Business firms of modern era are strategically oriented to have optimum leverages of strengths, and minimize the impact of weakness and adverse elements in the environment  Globalizaton is the order of the day, and business firms are increasingly becoming global entities, posing and facing competition world over.  Growth of Management education and training contributed to professionalization of business, alienating management from ownership.  Integrated supply chain management is one of the key characteristics of business, which involves integrating procurement, production and distribution operations in the most efficient manner.  Restructuring of organizational designs, marketing mix and business portfolio is necessitated in the current business due to changes in global environment.  Co-existence of public and private sector, and increasing number of public private partnerships (PPP) is another distinguishing feature of modern business. Similarly small and medium firms co-exist with large conglomerates.  Intense competition among domestic firms, and between domestic and multi-national firms: The competition poses several challenges to the firms, but creates immense opportunities as well.  Business is characterized by increasing use of Technology. Technology influences every sphere of business activity

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

 Information revolutionizes the way business is run. Timely availability of reliable information is the key for making right decisions.

Q.

Write a note on Vision, Mission, Objectives and Goals of Business.

Ans: Vision: Vision is a broad explanation of why the firm exists and where it is trying to lead. Vision gives the organization a sense of purpose, and a set of values to its employees. It answers the question “where do we go from here”. The vision of Infosys is “To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, vendors and society at large”. Mission: A mission statement outlines the fundamental purpose of the organization. A vision becomes tangible as a mission statement. It answers the question “what is our business”. The mission statement of Birla Group reads as “To deliver superior value to our customers, employees, shareholders and society at large”. Similarly the mission statement of Ford Motors is “to improve continually our products and services to meet our customers’ needs, allowing us to prosper as a business and to provide a reasonable return for our stockholders, the owners of our business”. Objectives: Objectives are more precise statements, giving a clear direction and action plan for accomplishment of mission. Objectives normally cover long-range company aims, more specific department goals, and even individual assignments. Thus objectives may pertain to a wide or narrow part of an enterprise. Goals: A goal may be defined as an intermediate result to be achieved in a certain time, as part of the grand plan. Specific goals are usually referred to as targets. It may be noted that objectives are the long-term results that an organization seeks to achieve, while goals are the short-term benchmarks that organization strives to reach.

Q.

Discuss various goals of business.

Ans: The most common goals of business include the following: Profit: It is the main incentive and motivator for running the business. Even not-for-profit organizations endeavor to work for a surplus- i.e excess of income over expenditure, to ensure long-run survival and growth. Even though profit is the most important criteria for business, progressive organizations work towards the goal of profit optimization rather than profit maximization- the former often involves exploiting the consumer and resorting to unethical and illegal means to enhance profitability, while the latter duly emphasizes on increasing profits by ethical means and genuinely working to satisfy the customers’ needs. Growth: Every business house strives to grow over the time in terms of its size, market coverage, market share, sales, profits, revenues, brand equity, customer patronage and the like.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Power: Business confers enormous power on owner and endows them with vast resources. Business executives make and unmake political parties and political leaders. The power commanded by business personalities like Mittal, Tata, Vijay Malya, Ambanis and the like is very much evident from their media posturing. Employee satisfaction and development: Caring for employee satisfaction and providing for their development has been one of the objectives of enlightened business houses. Providing training and development programs, competency enhancement and career planning programs for employees top the agenda of progressive organizations. Quality Products and services: Offering quality products/ services keeps the firm ahead of its competitors. So the firms desirous of long run survival make no compromise on quality of products and services that they offer to the consumers. Market Leadership: Firms do seek to carve a niche for themselves in the market place, through innovation in various areas- product, advertising, distribution, finance and the like. Pidilite, for instance, retains its market leadership in adhesive solutions market through its leading brands Fevicol, Feviquick etc. Challenging: Businesses endeavor to take on challenges from adverse elements, while constantly posing challenges to the competitors. Maneuvering the rivals gives utmost contentment to the firms. Joy of creation: It is the ability of the business house to provide solution to the diverse needs of various consumer groups through new ideas and innovations. . Good Corporate Citizenship: It implies that the business unit complies with the rules of the land, pays taxes to the government regularly, discharges its obligations to society and cares for its employees and consumers.

Q. Define Business Environment and Discuss various components (or elements) of Business Environment. OR Write a note on Micro and Macro Environment of business OR Write a note on internal and external environment OR Write a note on controllable and uncontrollable environment of business. Ans: Business Environment consists of all those factors that have a bearing on the business. Business Environment refers to all external and internal forces that have a bearing on the functioning of business. Environmental Analysis is must for the organizations to identify firm’s strengths & weaknesses that lie in the internal environment and to make out opportunities and threats that exist in the external environment. The survival and success of a business firm depend on its innate strength – resources at its command – and its adaptability to the environment and the extent to which the environment is favourable to the development

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

of the film. The survival and success of a firm, thus, depend on two sets of factors, which are the internal factors – the internal environment – and external factors – the external environment. However, the term business environment often refers to the external factors. The external environment has, broadly, two components, that are business opportunities and threats to business. Similarly, the organizational environment has two components: strengths and weaknesses of the organization. As the company, generally, has control over the internal factors, they are generally regarded as controllable factors because it can alter or modify such factors as its personnel, physical facilities, organization and functional means, such as marketing mix, to suit the environment. The external factors, on the other hand, are, by and large, beyond the control of a company. The external or environmental factors such as the economic factors, socio-cultural factors, government and legal factors, demographic factors, geo-physical factors etc., are, therefore, generally regarded as uncontrollable factors. Those external factors with have a direct and intimate impact on the firm (like the suppliers and distributors of the firm) are classified as micro environment, also known as task environment and operating environment. There are other external factors which affect an industry very generally (such as industrial policy, demographic factors etc.). They constitute what is called macro environment, general environment or remote environment. The following Figure gives a bird’s eye view of the important components of business environment.

IMPACT OF INTERNAL ENVIRONMENT ON BUSINESS IS PRESENTED BELOW:-

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

• Mission/objectives: Well defined mission/objectives give clear direction and path to the organization.

• Promoters/shareholders values are emulated down the line in organizations. Values upheld by personalities like Tata helped building ethical and social entities that serve the society the most. • Management Structure influences concentration or distribution of powers/decisionmaking authority at various levels within the organization. • Internal power relationships: The relationship between Board of directors and other key members of the enterprise determine the effectiveness of decision-making and its implementation. • Firms having strong base of Assets and Physical facilities will have absolute control over operations, and could ensure effective implementation of strategies.

• Company image & Brand equity helps in raising funds, diversifying activities operations etc. smoothly. • Competent and committed manpower provides greater efficiency, process improvisation and better quality of products/services to the customers. • Research and Development, and Technological capabilities determine a company’s ability to innovate, reduce cost and achieve leadership position. IMPACT OF EXTERNAL ENVIRONMENT: Micro Environment: It is the firm’s immediate environment, and micro-environmental factors are more intimately linked with company’s performance. It includes the following elements: Suppliers: Having a wide network of reliable suppliers ensures procurement of quality material in the right time in right quantities at competitive prices. Channel Partners: They act as vital link in taking the product from point of production to point of consumption, providing feedback to the company on customer’s expectations & preferences, and in upholding the image of brands & organizations that they deal with. Financiers: Reliable financiers are needed for funding the projects, implementing various programs and for smooth functioning of operations. Competitors: Competitive environment has undergone sea change with the advent of globalization & liberalization. Various firms across diverse sectors compete for the limited disposable income of consumers. A marketer should strive to create primary & selective demand for his product to have an edge.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Customers: Having a large and loyal customer base is required for sustainable growth and development of the firm. Public : Rising public awareness on various issues like environment, product safety etc., and changing public expectations towards the companies influence their decision making, product policy, pricing, waste disposal, participation in community development and other issues. IMPACT OF MACRO ENVIRONMENT ON BUSINESS: Global Environment: It includes factors such as WTO principles and agreements, Trading blocs, Treaties, conventions, declarations, protocols etc. among various countries/regions. It largely influences firm’s overseas operations, revenues and overall corporate performance. Political & legal environment: Political parties, alliances, their ideologies, the type and tenure of government and similar factors largely determine the economic agenda of the nation. Similarly various laws relating to consumer protection, employee protection, environment protection, Taxation, foreign exchange transactions etc create certain obligations on the firms to do business in a responsible manner. Economic Environment: Factors kike GDP/NI, Per Capita Income, Monetary & Credit Policy of Government, Demand & Supply conditions, Inflation/phase of business cycle etc will have tremendous impact on business. Social & Cultural environment: It consists of people’s values, attitudes, beliefs customs, traditions and the like that have huge influence on what they want, what they accept and what they don’t. Technological environment: Development of Information and Communication Technology facilitates fast cross-border spread of cultures, movement of Technology and capital, which have significant implications for business. Natural Environment: Geographical conditions, climate, monsoon, rainfall, draught availability of natural resources etc… have huge impact on firm’s decisions and operations.

Q.

What is macro environment? What are its components?

Ans: MACRO ENVIRONMENT: It is also called as general environment and remote environment. The macro environment is generally uncontrollable than micro environment, the success of the company depends on its adaptability to the environment. The important macro environment factors as follows: I. TECHNOLOGICAL ENVIRONMENT

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Technology is one of the important determinants of success of a firm as well as economic and social development of nation. It includes both hardware and software to solve problems and promote progress. 1. Innovative drive of company The term innovation means introduction of new product, the use of new method of production. “The technical, industrial and commercial steps which leads to marketing of new products and to commercial use of new technical process and equipment.” 2. Customers Needs / Expectation Technological orientation and R&D effects of a company may also be influenced by the customer needs and expectation. In several cases the customer and the supplier have a collaborative relationship to develop the product or solutions. If the customers are highly demanding, companies would be compelled to be innovative. 3. Demand conditions The size of demand influences the choice of the technology . The size of demand influences the choice of the technological scale. Fast growing trend of demand would encourage development of technology of large scale. 4. Suppliers offering Many times technological changes are encouraged by the suppliers of a company, like a capital goods supplier etc. 5. Competitive dynamics Competition compels the adoption of the best technology and constant endeavor to innovate. 6. Substitutes Emergence of new substitutes or technological improvements or substitutes which alter technological change. 7. Social forces Certain social forces like pretext against environment pollution or other ecological problems demand for eco-friendly products. 1. Research organization The technological environment of business is enriched by researched organizations which develops new technologies and provide other technical inputs. 2. Govt. policy The govt. contributes to the development to the technology by its own direct involvement by establishing research organization and funding R & D. The govt. may encourage private R & D by various incentives. II. DEMOGRAPHIC ENVIRONMENT The importance of demographic factors to business is clear from the facts that “Management is men” & “Market is people.” i.e., Management in Men, Material, Machinery and Money, and market is people in the sense that the demand depends on the people and their characteristics – the number, income levels, tastes and preferences, beliefs, attitudes and sentiments.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Important demographic bases of market segmentation include the following: 1. Age structure 2. Gender 3. Income distribution 4. Family size 5. Occupation 6. Education 7. Social class 8. Religion 9. Race 10. Nationality Demographic factors such as size of population, growth rate, age composition, ethnic, density of population, rural – urban distribution, nature of family have very significant implication for business. III. ECONOMIC ENVIRONMENT Economic Environment refers to all those economic factors, which have a bearing on the functioning of a business. Business depends on the economic environment for all the needed inputs. It also depends on the economic environment to sell the finished goods. Naturally, the dependence of business on the economic environment is total and is not surprising because, as it is rightly said, business is one unit of the total economy. Economic environment influences the business to a great extent. It refers to all those economic factors which affect the functioning of a business unit. Dependence of business on economic environment is total — i.e. for input and also to sell the finished goods. Trained economists supplying the Macro economic forecast and research are found in major companies in manufacturing, commerce and finance which prove the importance of economic environment in business. The following factors constitute economic environment of business: (a) Economic system (b) Economic planning (c) Industry (d) Agriculture (e) Infrastructure (f) Financial & fiscal sectors (g) Removal of regional imbalances (h) Price & distribution controls (i) Economic reforms (j) Human resource and (k) Per capita income and national income The state became the encourager of savings and also an important investor and the owner of capital. Since the state was to be the primary agent of economic change, it followed that private sector activities had to be strictly regulated and controlled to conform to the objectives of state policy.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

The growth strategy also meant, in the early years of planning, a relative neglect of public investments in agriculture. This negligence of agriculture sector was supported by the general view that the increase labour in the developing countries could only be absorbed in the industry, and that during the early stages of industrialization, it was necessary for agriculture to contribute in the establishment of modern industry by offering inexpensive work force. A faster development of industry was the central objective of planning. The above is a thumbnail sketch of the growth strategy followed by the planners in the past four decades. Business partners and strategies are influenced by the economic characteristics. The economic environment includes the structure and nature of the economy, the stage of development of economy, economic resources, level of income, global economic linkages, economic policies etc. 1. Nature of the Economy The general level of development of the economy has lot of implication for business – it has significant bearing on the nature and size demand, govt. policies affecting business. The widely used method of classification of the economies is on the basis of per capita income. Accordingly the low income, middle and high income economies. Low income economies are economies with very low per capita income. High income economies are economies with very rich income per capita. Middle income economies are sub divided into lower middle and upper middle income where income per capita is neither very high nor low. 2. Structure of the economy Factors such as contribution of different structure like primary (agricultural), secondary (industrial) & tertiary (secondary) sectors, large, medicine, small sectors to economy. These factors and the nature of each sector have business implication. For example, India is one of the largest producers of agricultural products, because of the small and fragmented nature of land holdings, efficient collection and processing of products become difficult. The land holding pattern also makes productivity improvements difficult. 3. Economic policies There are several economic policies which can have very great impact on business. Important economic policies are a) Industrial policy It defines the scope and role of different sectors like private, public, joint and cooperative. It may influence the location of industrial undertakings. Choice of technology, state of operation, product mixes etc. b) Trade policy

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

It can affect the fortunes of firms. For example a policy of protecting the home industry may greatly help the import competing industries, while liberation of the impart policy may create difficulties for such industries. This mean the firm should come up with quality, cost, and marketing and after sales service etc. c) Foreign exchange policy Exchange rate policy and policy in respect of cross border movement of capital are important for business. d) Foreign investment and technology policy Foreign investment and technology policy will increase domestic competition at the same time it would benefit many domestic firms – by permitting global sourcing of capital and technology, by increasing the quantity and quality of domestic supply of many goods and services. e) Fiscal policy Govt. strategy in respect of public expenditure and revenue can have significant impact on business. The pattern of public expenditure may affect the develop of industries. Such as govt. often use tax incentives or disincentives to encourage or discourage certain activities. For ex: when industry suffers from recession, a reduction of taxes like excise duty or sales tax may help improve the demand. f) Monetary policy The central bank, by its policy towards the cost and availability of credit, can significantly influence savings, investments and consumer spending in economy. For example – 1% reduction in cash reserve ratio will significantly increase loan able funds with commercial banking systems. IV. NATURAL ENVIRONMENT The natural environment ultimately is the source and support of everything used by business – every raw material, energy resource, life sustaining factor etc. The natural environment determines what can be got done in a society and how institution can function. Resource availability is the fundamental factor is the development of business in the society. Thus geographical and ecological factors, such as natural endowments, weather and climatic conditions, topographic factors, vocational aspects in the global context etc., are all relevant to business. 1. Geographical factors: differences in geographical condition between markets may sometimes call for changes in the market mix. It influences the location of some industries. E.g. Industries with material index tend to be located near the raw material sources.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

2. Climatic and weather conditions: It affects the location of certain industries like cotton textile industry. Topographic factors may affect the demand pattern in some cases. E.g. in hilly areas Jeeps are greater demand than cars. Weather and climatic factors affect the demand of certain types of products. E.g. in region where temperature is very high in summer, there is good demand for desert coolers. Weather and climatic factors can affect the demand pattern of clothing, building materials, food, medicines etc. further, weather and climatic conditions may call for modification to the products, packaging storage conditions etc. 3. Ecological factors: It assumes great importance, the depletion of natural resources, environmental pollution another disturbance of the ecological balance have carried great concern, govt. policies aimed as preservation of environment purity and ecological balance, conservation of non-replenish able resources have resulted additional responsibilities and problems for business. Macro environment of business consists of Economic, Political and legal, Social, Cultural, Technological, Natural and Global environment.

ECONOMIC ENVIRONMENT 8. What do you mean by Economic Environment? What are the different factors of economic environment that effect business (OR) Evaluate Economic Environment in India (OR) What are the Components of Economic Environment? Ans : Economic environment refers to all those economic factors which have a bearing on business. Business depends on economic environment for procurement of inputs & sale of its output. The major factors of economic environment effecting business are discussed as below:  Growth Strategy of the nation  Economic Systems

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

 Economic Planning  Major sectors of the economy, such as Agriculture, Industry and Infrastructure  Economic Reforms  Human Capital  Income & GDP  Distribution of Income & Assets  Global linkages Growth Strategy: The growth strategy followed in India until 90’s was Soviet Model, with little/marginal participation by private sector. This strategy contributed to overall growth of the economy, but was subjected to severe criticism for its poor focus on agriculture, neglect of export and trade opportunities and excessive protectionism. There has been a major turnaround in the growth strategy in the post-liberalization era. Economic Systems: Major economic systems adopted in various countries include. Capitalist Model, in which the private enterprises have major control over resources; Socialism, in which the tools of production are organized, owned and managed by government; and Communism which goes further to abolish all private property and property rights to income. Though India adopted Mixed Economic System to facilitate existence of public and private sectors, the role of private sector was very limited. The scenario had drastically changed in 90’s with the phenomenon of Liberalization, Privatization & Globalization. Economic Planning: India has been planned economy with the central and state governments playing a lead role in determining priorities and allocation of funds & resources across various sectors and regions. However the objectives of economic planning such as rising production & income, full employment, equitable distribution of income and wealth, and equality & justice could not be achieved to the right extent due to lapses in policies and their implementation. Production, Agriculture & Infrastructure: These are the vital components of the structure of the economy. Great emphasis was laid on development of Industry; with due priority to agricultural sector. However the scenario has been rapidly changing in the last two decades, as the service sector growing phenomenally and contributes 51.6% of GDP, while Agriculture and Industry contributes 22.7% and 25.7% respectively. Economic Reforms: Economic Reforms helped dismantling license, permit, quota Raj, which was taken over by the phenomenon of liberalization, privatization & globalization. Controls are largely slashed/ rationalized, restrictions on FDI & MNCs are removed/relaxed, prices are deregulated (still few price controls exist). Protectionism given way for market oriented

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

policies. Various economic policies that have profound influence on business include: Industrial policy, Foreign Investment policy, Foreign Exchange Policy, EXIM Policy and Monetary and Fiscal Policy. Human Capital: Of late, required attention is being paid to development of skilled and competent manpower in India. The nation’s excessive population, once viewed to be a burden on the economy, is being shaped into vital resource, which makes India a most attractive manufacturing and outsourcing destination for MNCs. However the problem of unemployment is still in dangerous proportion, especially in the unorganized sector/among unskilled laborers. Programs like Mahatma Gandhi National Rural Employment Guarantee Scheme go in the right direction, if properly implemented. Income & GDP: They are the most vital indicators of a nation’s economic progress. India’s position on these parameters has been improving over the time in money terms. The situation is even better in terms of purchasing power Parity. India ranks 10 th in terms of Gross National Income in the world, but stands 4th in terms of purchasing power Parity. The rate of economic Growth in India in new millennium has been highly impressive and the future looks to be very promising. Distribution of Income & Assets: The rising employment, Income, FDI and the like do not compensate for widening inequalities between rich and poor in the society. The number of Millionaires & Billionaires is growing but the fact that the farmers, weavers and other vulnerable & disadvantaged sections committing suicides cannot be ignored. The growing inequalities between rich & poor nations has been alarming, as 20% of world population in developed countries control 80% of income/resources while 80% people fight for remaining meager income. Global Linkages: It includes elements such as magnitude and nature of cross-border trade and investments, and membership of WTO, IMF, World Bank, Trading Blocs, etc. India has been the active member in various international bodies. Its cross-border flows are rising, but India’s contribution in Global Trade is dismally low at about 1%. To conclude, the economic environment in India is turning out to be positive and promising as Indian firms are increasingly exploiting global opportunities, and MNCs are being increasingly inclined to do business in India.

Q. How is economic environment important for business?

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Ans: Economic environment refers to all those economic factors which have a bearing on business. Business depends on economic environment for procurement of inputs & sale of its output. The impact of economic environment on business may be understood from the following facts.  Business depends on economic environment for pooling various resources.  Crucial business decisions viz. what to produce, how to, how much, when, where etc. are largely influenced by the factors in economic environment.  Economic Environment reflects government’s policy towards various sectors of the economy viz., Manufacturing, Agriculture & Services. The quantum of credit available for various sectors, interest rates, subsidies, incentives/controls, price regulations, taxation structure and other such vital factors.  It determines the extent of protection or competition faced by the organization.  It influences firm’s decisions with respect to pricing, promotion, business growth, expansion and diversification.  It influences overall investment climate in the country and flow of FDI into the country. The following table shows various variables/ factors of Economic environment and how they are related to business. Factors/Variable

Relevance to Business

−Income & employment −Purchasing power of people & demand for goods & services. −GDP trends

−Overall investment climate in the country.

−Distribution of income −Prevailing inequalities in income & wealth distribution. −Price Trends

−Output discuss inventory, profitability, investment etc.

−Trade and BOP Trends −Degree of flexibility on exports and imports, incentives/controls. −Industrial policy.

−Role & Scope for private investment.

−Monetary policy.

−Cost and availability of credit, its impact on demand

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

−Global linkages.

−Fosters open competition, removal of trade barriers, protectionism abandoned.

−Economic planning.

−Priority areas/sectors of investment.

−Global economic Trends.

−Influences outsourcing Foreign investment, etc.

analysis of economic environment enables the organization to leverage the favorable factors, and take steps to minimize the impact of adverse factors in the environment.

Q. Do you think the present economic environment in India is favorable to business? Ans: Yes. The present economic environment in India is largely favorable with favorable macro economic indicators – impressive growth rate in GDP @ 7% +, which is commendable during the spell of recession world over. Thanks to the strong fundamentals of the domestic economy, series of stimulus packages ushered in by the government and partial recovery of the global economy, Indian economy is going strong. The sales of various manufacturing units such as Automobile, PCs, consumer electronics, industrial goods, etc have been rising, while exports register an impressive growth during latter half of F.Y 2009-10. The recovery of IT sector is very much evident from the companies’ expansion plans, new recruitments and further investments. The opportunities in sectors like Telecom, Retail, Automobile Consumer Electronics, FMCG, Pharma, Insurance & Financial services, real estates and the like are plenty. India is 4th largest economy in the world in terms of purchasing power parity and 2 nd rapidly growing economy after China, and is competing strongly with China in attracting FDI. However there are still several controls on flow of FDI in various sectors, while rapidly changing political environment in some states including that of Andhra Pradesh that could adversely affect the economic climate. To conclude, the economic environment in India is by and large favourable, however prudence demands caution and meticulous scrutiny of problems and prospects of every business decision. Q. Give a comparative account on pre-reform and post-reform economic environment in India. Ans: Indian Economic Reforms and Environmental Change

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Pre-1991 situation

Post-1991 situation

Consequent / implication Of the change

Private sector excluded from many important industries. All but a few industries Enormous scope for private investment. Considerable In a number of other are open to the freedom to decide the portfolio strategy. important industries public private sector. Competition increases substantially and public sector had priority to sector loses its monopoly/dominant positions. establish new undertakings. Entry, involving investment All but a few industries Reinforces the above factors. above specified exemption are free from limit, are restricted by licensing. licensing. Entry of large firms was subject No MRTP Act restrictions Reinforces the above factors. to MRTP Act restrictions, on entry. besides licensing. Licensing and MRTP Act All but a few industries Companies can grow organically and by acquisitions. restrictions on growth of are free from Firms will grow in size and several industries existing undertakings. licensing restrictions will witness consolidation of firms. A small on growth. No number of firms would eventually dominate the MRTP Act industry in several cases. restrictions on growth. Limited scope for foreign capital Foreign capital and Entry of many foreign firms by Greenfield projects and technology. technology policies and acquisitions. Opportunity for Indian firms have been for acquiring technology and establishing joint substantially ventures. Substantial increase in competition. liberalized. Highly restrictive import policy. Imports substantially User industries can benefit by global sourcing. Import liberalized. competing firms face stiff competition. Global competition emerges in the Indian market. Indian firms will have to improve their competitiveness and become more innovative to face the global competition.

Q. What is political environment? Outline the impact of political environment on business

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Ans: The political environment of a country is influenced by the political organizations such as philosophy of political parties, ideology of government or party in power, nature and extent of bureaucracy influence of primary groups etc. The political environment of the country influences the business to a great extent the political environment includes factors such as  Characteristics and policies of the political parties.  The nature of the constitution and government system and the government environment.  Encompassing the economic/business policies and regulations.  Stability of Government.  Type: Democracy/Autocracy.  Role of Judiciary: Various laws like consumer protection Act, Environment protections Act, MRTP Act or Competition Act, Companies Act, various Acts governing employee welfare /security viz. factories Act, PF Act, ESI Act, Gratuity Act, workmen compensation Act etc., create several obligations on the part of organizations. Contravention of the provisions of any law/act calls for severe penalties to the firm  Political Interference in business. Reliance Retail business in Uttar Pradesh faced many hurdles and suffered huge losses since Mayavathi Government came to power. Similarly investment in Telangana Region had drastically slowed down if not turned negative- that may largely be ascribed to political factors.

These factors may vary very significantly across different countries, different provinces in a country and also over the time. The vital institutions under political system include legislature, executive and judiciary, each bestowed with well defined role and authority. They have profound influence on business. The businessman of today cannot limit himself to the problems internal to his business unit but has to intelligently keep himself constantly abreast of the national problems. Such an understanding will help him in the long run while dealing with his own managerial and business problems being influenced by the political environment. Public opinion is a very important aspect of modern life. In a democracy, any act must be supported by public opinion to be upheld and sustained. Even so the business activity must get the support of public opinion. Political leaders are the representatives of the public and the spokesmen of its opinion. Therefore, business and politics are closely related. Without a clear understanding of dynamics of politics and the support and encouragement from the politicians, business cannot prosper. The business strategy adopted by the businessman is to be framed keeping in mind what is the present political situation, what are going to be the steps taken by political forces in the country and abroad and what will be the repercussions of different political developments on the life of business. If the general atmosphere in the political circle is against business-specially the private sector, the businessman has to deal with it by making necessary modifications in his attitude, policies and practices. If he does not care for the political environment he may be meeting with the failure as the political forces may finish the chances of his success by creating insurmountable obstacles in his way.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

The case of Maruti Limited which was set up for the manufacture of mini-cars in good example of how the change of political forces affects favorably or adversely the business venture. During the emergency, when the country was governed by the Congress (I), Mr. Sanjay Gandhi was able to get all sorts of assistance from the Government including huge finance because of his close relations with the then Prime Minister Mrs. Indira Gandhi. With the change in Government, i.e., when the Janata party came into power, the same concern had to see its dooms day as so many charges of corruption and bungling were laid against Maruti Limited and its Directors because of which the business came to a close and the legal battle is still going on. The political climate determines the prospects and problems of any concern.

Q. Write a note on impact of a) Legislature, b) Executive or government c) Judiciary on business Ans : Impact of legislature on business : Various laws like consumer protection Act, Environment protections Act, MRTP Act or Competition Act, Companies Act, various Acts governing employee welfare /security viz. factories Act, PF Act, ESI Act, Gratuity Act, workmen compensation Act etc., create several obligations on the part of organizations. Contravention of the provisions of any law/act calls for severe penalties to the firm. Impact of Executive or Government on business: Executive is the law implementation agency. Keeping in tune with federal setup, the powers are divided between the central and State Government. The role of the govt. is vital as it facilitates smooth conduct of business. The mutual impact of govt. and business towards each other is show below: Govt. also influences business by fixing tariffs and quotas. With the advent of liberalization, privatization and globalization, the role of government changed from regulator to a facilitator. However the role of government continues to be relevant as licensing continues, though the list of industries subject to licensing is reduced, subsidies and tariffs continue though on a reduced scale. Impact of Judiciary on business: The role of the judiciary is to ensure that the executive authority conforms to the general rules laid down by the legislature. It also settles the relationship between private citizens on the one hand, and between citizens and the government on the other. The power of the judiciary to settle legal disputes affects business considerably. Judiciary has the power to penalize the erring organizations /employers, duly protecting their rights. DEMOGRAPHIC ENVIRONMENT Q.

State the impact of Demographic environment on business

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

Ans: It is conventionally said that Management is Men, Material, Machinery and Money. Even if all the other Ms are excellent, it would not be of use unless the Men are the right ones (in terms of quality, potential, motivation & commitment etc.) Market is people in the sense that the demand depends on the people and their characteristics – the number, income levels, tastes and preferences, beliefs, attitudes and sentiments and a host of other demographic factors. No wonder, demography is an important element of macro environment Important elements of demographic environment include the following. • Age structure • Gender • Income distribution • Family size • Family life cycle (For example: Young, single: young, married, no children; young married with children ……) • Occupation • Education • Social class • Religion • Race • Nationality The demographic environment differs from country to country and from place to place within the same country or region. Further it may change significantly over time. Peter Ducker, who emphasizes the tremendous economic and business implications of demographic changes, suggests that any strategy, that is any commitment of present resources to the future expectations, has to start out with demographics. Various demographic factors that influence business include:  Population size: Larger the size of population greater the opportunity for business. Eg: India & China are attracting MNCs given to the size of population in respective countries.  Population Growth Rate: It determines pattern of demand for various product, services, and govt. spending on social sector.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

 Age composition: It determines needs, income/ earning capacity, ability to work, physical stamina of people of different age groups.  Ethnic composition: People belonging to different caste, religion, race, nationality etc exhibit different buying patterns and behaviour. The organizations should tailor the products/services according to ethnic composition.  Density of population: With rising density of population, especially in urban and semiurban areas, the demand/need for compact houses, household goods vise.  Rural – Urban distribution: People in rural and urban areas have different levels of income and purchasing power. So accordingly the organization should design their marketing mix.  Family Size & Nature of family: The demand for consumer electronics for instance, will be greater with nuclear family system and vice versa.  Income levels: Higher the incomes, greater the spending on comforts & luxuries and viceversa.  Family life cycle: Double income families with no/single kid have higher levels of income & purchasing power than the families with grown-up children.

Q. What is natural environment? Give a detailed note on impact of natural environment on business. Ans : Natural Environment : As Watrick and Wood observe “the natural environment ultimately is the source of and support of everything used by businesses (and almost any other human activity) - every raw material, every energy source, every life-sustaining factor, even every waste disposal site. A country's territorial size, geographical location, natural resources, climate, rivers, lakes and forests constitute its physical environment. The physical environment influences political and economic activities, shapes cultural characteristics such as language and religion, and determines land usage, transportation, and commercial flows. The natural environment determines what can be got done in a society and how institutions can function. Resource availability is the fundamental factor in the development of business in societies. Differences in geographical conditions between markets may sometimes call for changes in the marketing mix. Geographical and ecological factors also influence the location of certain industries. For example, industries with high material index tend to be located near the raw material sources. The dreadful earthquakes that ravaged several areas of Gujarat in early 2001 and the potential for such occurrences in a number of other places would influence the decision

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

making in respect location of business. It is also likely to affect the demand for flats and accommodation in high rise buildings. It could also influence the choice of building technology, design, material etc. Topographical factors may affect the demand pattern in some cases. For example, in hilly areas, with a difficult terrain, jeeps may be in greater demand than cars. Similarly, in several regions where the temperature is very high in summer, there is good demand for desert coolers; but they are not at all used in some of the States in India. In regions characterized by very cold climate in winter and very hot climate in summer both room heaters and air conditions may in good demand in the respective seasons. Weather and climatic factors can affect the demand pattern for clothing, building materials and designs, food, medicines etc. Further, weather and climatic conditions may call for modifications to the product, packaging, storage conditions etc. Abnormal weather conditions (e.g. winter season in Jammu & Kashmir region) can disrupt the transportation of export products while unforeseen changes in the weather can threaten companies which produce seasonal goods. Topography will influence the routing of goods and the choice of transport mode, which in turn will affect cost and thus impact on the price offered to the buyer. Ecological factors have recently assumed great importance. The depletion of natural resources, environmental pollution and the disturbance of the ecological balance has caused great concern. Government policies aimed at the preservation of environmental purity and ecological balance, conservation of non-replenishable resources, etc., have resulted in additional responsibilities and problems for business, and some of these have the effect of increasing the cost of production and marketing. Externalities have become a very important problem the business has to confront with. Although the physical environment is not considered one of the core components of the SLEPT factors (Social, Legal, Economic, Political and Technological factors) it is an environment that can impact upon success of a firm’s exports and consequently needs to be considered. Q. What is meant by culture? What are its characteristics and elements (or components)? Ans : Nature of Culture : Culture is understood as that complex whole which includes knowledge, belief, art, morals, law, customs and other capabilities and habits acquired by an individual as a member of a society. It includes the thought and behavioral patterns that members of a society learn through religion, language and other forms of symbolic interaction-their customs, habits, beliefs, and values, the common viewpoints which bind them together as a social entity. Cultures change gradually, picking up new ideas and dropping old ones, but many of the cultures of the past have been so persistent and selfcontained that the impact of any sudden change tears them apart, uprooting their people psychologically. The following characteristics of culture are worth mentioning: 1. Learned – Culture is not inherited or biological based, it is acquired by learning and experience.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

2. Shared – People as members of a group, organization, or society share culture; it is not specific individuals. 3. Transgenerational – Culture is passed on from one generation to the next. 4. Symbolic – Culture is based on the human capacity to symbolize or use one thing to represent another. 5. Adaptive – Culture is based on the human capacity to change or adapt, as opposed to the more genetically driven adaptive process of animals.

Q. Discuss the impact of culture on business. Ans : Impact of Culture on Business : − Culture creates people. It trains people along particular lines, there are sub-cultures within culture. It conveys a sense of identity to organizational members. − Culture & Globalization: As business units go international, the need for understanding and appreciating cultural differences across various countries is essential. Workforce diversity becomes major issue in cross-cultural environment. − Culture determines what type of goods/services people like/dislike; Eg products like cosmetics, Fashion goods, Liquor, etc. are largely consumed/prohibited on cultural lines. − Language & culture: The interrelationship between language and culture is very strong. All languages have limited set of words that in turn constrain the ability of the users to understand or conceptualize the world. − Culture determines attitudes towards work, ethics, business, time, interpersonal relationships and so on. − It determines individualism vs collectivity, which effects employee morale, motivation, unity, and the like. − Ambitious/complacent: Culture makes a person to be ambitious or complacent. Ambitious individual is highly motivated, is wealth acquisitive while complacent employee is satisfied with status quo. − Culture determines education that in turn influences labour characteristics, wage structure, workforce distribution, employment and the like. − Culture determines family system which has high relevance to protection in inheritance, property rights, morality, care for sick and helpless and so on. − It determines exercises of authority and management style.

BUSINESS ENVIRONMENT (Prof. Pathan F.N.)

− Others factors: Other elements of culture such as Religion, Scientific outlook, caste /creed etc. have profound impact on business.

Q. Explain the importance of environment analysis. (OR) “Firms which systematically analyze and diagnose environment are more effective than those which don’t”. Elucidate. Also discuss the limitations of environmental analysis. Ans: Environmental analysis has several benefits like those mentioned below.  The very idea of environmental analysis makes one aware of the environmentorganization linkage.  A corollary of the above is that (environmental analysis helps) an organization to identify the present and future threats and opportunities.  Environmental analysis will provide a necessary and very useful picture of the important factors which influence the business.  Environmental analysis helps to understand the transformation of the industry environment.  Technological forecasting will indicate some of the future opportunities and challenges.  A very important benefit of environmental analysis is its contribution to identification of risks.  Environmental analysis is a prerequisite for formulation of right strategies – corporate, business and functional.  Environmental monitoring helps suitable modifications of the strategies as and when required.  Environmental analysis keeps the managers informed, alert, and often dynamic  It encourages favourable attitude towards change and forward thinking.  It minimizes the effects of adverse conditions and changes.

Limitations of Environmental Analysis:  Environmental forecasting has several limitations. Some of the limitations arise from the forecasting techniques used. Further there are also chances of certain errors affecting the reliability of the forecasts.  Environmental analysis does not foretell the future, nor does it eliminate uncertainty for any organization.

 Environment analysis is only a tool for strategy development and testing, and not a sufficient guarantor of organizational effectiveness.  Excessive reliance on scanned data may lead to erroneous decisions  Decision making is often constrained by overload of information In spite of several limitations, organizations do engage in scanning and analyzing the environment to cope with dynamics of business environment.

Q. Explain the process (or steps) of environmental analysis. Ans: The Process of Environmental Analysis: Environmental analysis is a challenging, time consuming and expensive affair. The analysis consists of four sequential steps: (i) scanning, (ii) monitoring, (iii) forecasting, and (iv) assessment. Scanning - Being the first step in the process of environmental analysis, scanning involves general surveillance of all environmental factors and their interactions in order to (a) identify early signals of possible environmental change, and (b) detect environmental change already under way. The potentially relevant data for scanning are unlimited but are scattered, vague, and imprecise. The fundamental challenge for analysis in scanning is, therefore, to make sense out of vague, ambiguous, and unconnected data. Monitoring: Monitoring involves tracking the environmental trends, sequences of events, or streams of activities. It frequently involves following signals or indicators unearthed during environmental scanning. The purpose of monitoring is to assemble sufficient data to discern whether certain trends and patterns are emerging. Thus, as monitoring progresses, the data turn more precise. Three outcomes emerge out of monitoring: (a) a specific description of environmental trends and patterns to be forecast; (b) the identification of trends for further monitoring, and (c) the identification of areas for further scanning. These outputs (particularly the first) become inputs for forecasting. They will also cause for further scanning and monitoring. Forecasting: Scanning and monitoring provide a picture of what has already taken place and what is happening. Strategic decision-making, however, requires a future orientation. Naturally, forecasting is an essential element in environmental analysis. Forecasting is concerned with developing plausible projections of the direction, scope, and intensity of environmental change. It tries layout the evolutionary path of anticipated change. For example, how long will it take the new technology to reach the market place? Are current life-style trends likely to continue? These kinds of questions provide the grist for forecasting efforts. Unlike scanning and monitoring, forecasting is well focused and is much more deductive and complex activity. This is so because the focus, scope and goals of forecasting are more specific than the earlier two stages of environmental analysis.

Assessment: - Scanning, monitoring and forecasting are not ends in themselves. Unless their outputs are assessed to determine implications for the organization's current and potential strategies, scanning, monitoring and forecasting simply provide 'nice-to-know' information. Assessment involves identifying and evaluating how and why current and projected environmental changes affect or will affect strategic management of the organization. In assessment, the frame of reference moves from understanding the environment - the focus of scanning, monitoring and forecasting - to identifying what the understanding means for the organisation. Assessment, therefore, tries to answer questions such as what are the key issues presented by the environment, and what are the implications of such issues for the organisation. Linkages among Stages:Though conceptually scanning, monitoring, forecasting and assessment are separate activities, they are inextricably intertwined.

For example, upon unearthing an emerging trend through scanning, one might quickly jump to - potential implications for the organization (assessment) by implicitly forecasting the future path of the trend. If warranted by the potential impact, one may then continue scanning and monitoring. Deriving implications (assessment) often prompts the organisation to the need to conduct further scanning, monitoring and forecasting. Thus, environmental analysis is not as simple and as linear as moving from scanning to monitoring to forecasting to assessment, and should be carried out diligently.

RESPONSIBILITY OF BUSINESS/CSR Q. Define Social Responsibility of Business. OR

Discuss the responsibility of business towards various sections (or interest groups or stakeholders) of society Ans: Social Responsibility, also referred as corporate social responsibility, is understood as the obligation of decision makers to take actions, which protect and improve the welfare of society as a whole along with their own interests. There is no unanimity of opinion as to what constitutes social responsibility of business. The important generally accepted responsibilities of the business to different sections of the society are described below. Responsibility to Shareholders: The responsibility of a company to its shareholders, who are the owners, is indeed a primary one. The fact that the shareholders have taken a great risk in making investment in the business should be adequately recognized. 1. To protect the interests of the shareholders and employees, the primary business of a business is to stay in business. 2. To safeguard the capital of the shareholders and to provide a reasonable dividend, the company has to strengthen and consolidate its position and improve its business and build up its financial independence. 3. To provide clean and transparent administration of the enterprise and making necessary disclosures from time to time. 4. By innovation and growth the company should consolidate and improve its position and help strengthen the share prices. At the same time, it should avoid indulging in tampering of share prices and mislead the investors. 5. The shareholders are interested not only in the protection of their investment and the return on it but also in the image of the company. It shall, therefore, be the endeavour of the company to ensure that its public image is such that the shareholders can feel proud of their company. It may be mentioned here that the shareholders also have certain responsibilities which they have to discharge to protect their own interests. They shall not only offer whole-hearted support and co-operation in the positive efforts of the company but shall also guide and control properly its policies and activities. At the same time, they shall appreciate the responsibility of the business to other sections of society – to the workers, consumers and the community. Responsibility to Employees: The success of an organization depends to a very large extent on the morale of the employees and their whole-hearted co-operation. Employee morale depends to a large extent on the discharge of the company’s responsibilities to them and the employer-employee relationship. The responsibility of the organization to the workers includes: 1. The payment of fair wages; 2. The provision of the best possible working conditions; 3. The establishment of fair work standards and norms;

4. The provision of labour welfare facilities to the extent possible and desirable; 5. Arrangements for proper training and education of the workers; 6. Reasonable chances and proper system for accomplishment and promotion; 7. Proper recognition, appreciation and encouragement of special skills and capabilities of the workers; 8. The installation of an efficient grievance handling system; 9. An opportunity for participating in managerial decisions to the extent desirable. The Committee that conducted the social audit of Tata Iron and Steel Company (TISCO) observes that “not only should the company carry out its various obligations to the employees as well as the larger community as a matter of principle, but his has also led to a higher degree of efficiency in TISCO works and an unparalleled performance in industrial peace and considerable team spirit and discipline which have all resulted in high productivity and utilization of capacity”. Thus, by discharging its responsibilities to the employees, the business advances its own interests. It may, however, be pointed out that the expenditure on labour welfare, etc., should have relevance to the financial position of the company and the economic conditions of the nation. This aspect has to be particularly taken note of by public sector enterprises. Such expenditure shall not exceed the socially and economically warranted limits and shall not cause undue burden on the consumers or the general public. It shall not result in the formation of islands of affluence or comfort in the midst of poverty and suffering at the expense of society. Responsibility to Consumers: According to Peter Drucker, “there is only one valid definition of business purpose; to create a customer”. It has been widely recognized that customer satisfaction shall be the key to satisfying the organizational goals. Important responsibilities of the business to the customers are: 1. To improve the efficiency of the functioning of the business so as to (a) increase productivity and reduce prices, (b) improve quality and (c) smoothen the distribution system to make goods easily available. 2. To do research and development, to improve quality and introduce better and new products. 3. To take appropriate steps to remove the imperfections in the distribution system, including black-marketing or profiteering by middlemen or anti-social elements. 4. To supply goods at reasonable prices even when there is a seller’s market. 5. To provide the required after-sales services. 6. To ensure that the product supplied has no adverse effect on the consumer.

7. To provide sufficient information about the products, including their adverse effects, risks, and care to be taken while using the products. 8. To avoid misleading the customers by improper advertisements or otherwise. 9. To provide an opportunity for being heard and to redress genuine grievances. 10. To understand customer needs and to take necessary measures to satisfy these needs. Responsibility to government: They include: 1. Payment of taxes from time to time 2. Compliance to various laws, rules and regulations 3. Provide vital information to facilitate policy decision making 4. Participate in effective implementation of various schemes, programs etc. Responsibility to the Community: A business has a lot of responsibility to the community around its location and to the society at large. These responsibilities include: 1. Taking appropriate steps to prevent environmental pollution and to preserve the ecological balance. 2. Rehabilitating the population displaced by the operation of the business, if any. 3. Assisting in the overall development of the locality. 4. Taking steps to conserve scarce resources and developing alternatives, wherever possible. 5. Improving the efficiency of the business operation. 6. Contributing to research and development. 7. Development of backward areas. 8. Promotion of ancillary and small-scale industries. 9. Making possible contribution to furthering social causes like the promotion of education and population control. 10. Contributing to the national effort to build up a better society.

Q. What are the arguments for and against social responsibility of business?

Ans: Arguments for and Against Social Involvement: The important arguments for and against the social involvement of business are given below. Arguments for ( in favor) Social Involvement Business: 1. Business which survives using the resources of the society has a responsibility to the society. 2. Business which is an integral part of the social system has to care for the varied needs of the society. 3. Social involvement of business would foster a harmonious and healthy relationship between the society and business to the mutual benefit of both. 4. Social responsibilities like recycling of waste may have favorable financial effects. 5. Social involvement may discourage additional government regulation and intervention. 6. Social involvement may create a better public image for the company which may help it in attracting customers, efficient personnel and investors. Arguments Against Social Involvement of Business: 1. Business should confine to its own business. There are government and social organizations to carry out social activities. 2. Involvement in social activities could adversely affect the economic health of a business enterprise. It may be noted that the expenditures on social welfare has been imposing severe burden on TISCO. 3. If the cost of the social involvement of the business is ultimately passed on to the consumers, there is no point in exalting the social involvement of business. Sometimes there could even be a net loss to the society because of the high cost of the corporate sector undertaking such activities. 4. Many companies involve themselves in social activities because of the tax exemptions on the income spent on special social purposes. 5. If the social involvement of a business enterprise causes an increase in the price of its product, it could affect its competitiveness both in the domestic and international markets. 6. Social involvement of business could lead to an increase in the domination or influence of business over the society.

Q. What are benefits and challenges involved in CSR? Ans: Being good in CSR provides bundle of benefits to the organization. The major benefits that organizations gain include:

 Building a reputation as a responsible business unit, improved consumer perception towards the enterprise  Sales of 'environmentally friendly' products continue to grow - and these products often sell at a premium price-means more profits to the firms  Reducing resource use, waste and emissions doesn't just help the environment - it saves you money too.



A good reputation makes it easier to recruit and retain competent employees, which means employees may stay longer, reducing the costs and disruption of recruitment and retraining. Employees are better motivated and more productive.

 CSR helps ensure effective compliance with regulatory requirements.



Activities such as involvement with the local community are ideal opportunities to generate positive press coverage.

 Good relationships with local authorities make doing business easier.



Understanding the wider impact of business can help develop new products and services.



CSR can make business more competitive and reduces the risk of sudden damage to reputation (and sales).

 Investors patronage In spite of several benefits, implementation of CSR programmes poses several challenges to the firms. The main challenges include:  Lack of community participation in CSR activities:  Need to build local capacities  Issues of transparency  Non-availability of well organized non-governmental organizations  Narrow perception towards CSR initiatives:  Non-availability of clear CSR guidelines:  Lack of consensus on implementing CSR issues

 Lack of resources, skill, competent manpower and the like.

Q.

What are the key drivers of social responsibility?

Ans: The key drivers for CSR include the following: Enlightened self-interest:- creating a synergy of ethics, a cohesive society and a sustainable global economy where markets, labour and communities are able to function well together. Social investment: - contributing to physical infrastructure and social capital is increasingly seen as a necessary part of doing business. Transparency and trust: - business has low ratings of trust in public perception. There is increasing expectation that companies will be more open, more accountable and be prepared to report publicly on their performance in social and environmental arenas Increased public expectations of business: - globally companies are expected to do more than merely provide jobs and contribute to the economy through taxes and employment. The shrinking role of government: In the past, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector. Shrinking government resources, coupled with a relaxation of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead. Demands for greater disclosure: There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations. Increased customer interest: There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers. In a recent survey by Environics International, more than one in five consumers reported having either rewarded or punished companies based on their perceived social performance. Growing investor pressure: Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns. A survey by Environics International revealed that more than a quarter of share-owning Americans took into account ethical considerations when buying and selling stocks. Competitive labour markets: Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions. Supplier relations: As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their suppliers, to ensure that other companies' policies or practices do not tarnish their reputation.

Q. Critically evaluate the CSR performance of Corporates in India and abroad. Ans: The Indian Situation: The Indian business sector presents a mixed picture as far as social responsibility is concerned. J.R.D. Tata, who was instrumental in conducting the first social audit in India and perhaps in the world, was of the opinion that while on the side of production, of growth, of efficiency, Indian industry, on the whole, did remarkably well, usually against odds and in spite of crippling infrastructural shortages. On the distributional side, however, its record was often poor and, in some respects, dismal, judged by the size of the black-market, the volume of black money and the general corruption that pervaded our economic life. The Sachar Committee suggested that companies in the public sector, which were very much a part of the total corporate sector and accounted for about 70 per cent of the total investment in the corporate sector, must reckon with the social cost and social benefits arising out of any given investment. The business firms should be made accountable at least to the extent of informing the public about the extent and manner in which it has or has not been able to discharge its social obligations in the course of its own economic operations. It has also been repeatedly emphasized that the report on social responsibility of the company should not be in a vague or general manner, but should have an element of particularization and certainty. Here is a glance of CSR initiative of prominent business houses in India.  Tata Group: Involved in development of Sciences & Technology, healthcare, Centre for Human Resource development, promoting Art & literature, rural development and the like.  Birla Group: Involved in Technical education, agricultural research, medicine, art & culture, Temple building, renovation & archeology, scientific research, education etc.  Godrej: Involved in education, health & medicine, sports, environment protection, family planning art, wildlife, etc.  Hindustan Unilever: Involved in community development, rural education and entrepreneurship, upliftment of rural women, protection of girl children etc.  Bajaj: Community development, higher education, upliftment of widows/orphans scholarships, spiritual, and cultural development, literacy etc.  Infosys: Community development calamity relief, development of ICT in rural areas, spreading awareness of health, hygiene and literacy in slums etc. Global Scenario:  IBM : IBM - Japan’s ‘e-elder’ initiative is a national program using training materials and other support from IBM Japan which will hire and train seniors as instructors for

other seniors in an effort to help elder citizens (expected to make up one-fifth of Japan’s population by 2008) more fully participate in a Web-based society.  HP: In Singapore, HP staff raised nearly $295,000 for charity in 2003 and received a SHARE Gold Award from the Community Chest of Singapore for employee participation exceeding 50%. One event was Gladiathon, a fundraiser in support of the President's Challenge 2003. Leading by example was the Managing Director from HP Asia Pacific, who wore a gladiator costume and competed with other IT industry leaders in the battle for charity. HP was the largest corporate donor of this event, raising a total of $121,000.  Microsoft: Microsoft works closely with international organizations such as the World Food Programme, Save the Children, and Mercy Corps to provide technology-based development assistance through the HEART (Humanitarian Empowerment and Response through Technology) program. It now contemplates to work closely with India, especially in the states of UP and Bihar to protect children. Apart from above organizations, other organizations – both Indian & foreign are increasingly engaged, and getting more responsive to the dire needs of the society at large. MULTINATIONAL CORPORATION Q. What Do You Mean By MNC? Or Explain Multinational Company Ans. Why to go global? 1. To achieve higher rate of profit 2. Expanding the production capacities beyond the demand of domestic country 3. Secure competition in the home country 4. Limited home market 5. political stability and instability 6. Availability of Technology and managerial competition Multinational companies are that companies: 1. Which produce in abroad as well as in headquarter 2. Which operate in certain minimum number of nations 3. Which drive some minimum percentage of its income from foreign operations. 4. Which have certain minimum number of ratio of foreign to total number of employees.

5. Possesses a management team with geometric orientation Favorable impact of MNC’s 1. It helps increase the investment level and thereby the income and employment in host country. 2. The transnational corporations have become vehicle for the transfer of technology. 3. The work to equalize the cost factors of production around the world. 4. MNCs provide an efficient means of integrating national economies. 5. It also helps increase competition and break domestic monopolies. 6. MNCs enable the host countries to increase their exports and decrease their imports. 7. Help to improve standard of living 8. Employment of highly sophisticated management techniques 9. They kindle management revolution in the host countries 10. MNCs stimulate domestic enterprise 11. The reasons resources of MNCs enable them to have very efficient research and development systems. Harmful effects of MNC’s 1. The MNC’s main objective is profit maximization, not the development needs of the countries. 2. MNC’s may destroy competition and acquire monopoly powers 3. MNC’s retard growth of employment in the home country 4. Interference in the other affairs of the country 5. Faulty technology transfer 6. Depletion of non-renewable resources 7. They undermine the local culture and traditions, change the consumption habits for their benefits against interest of local community.

Q. Explain Foreign Investment in India [FDI]

Or Explain Foreign Direct Investment Ans. Foreign investment is playing an increasing role in economic development. Economic reforms and the far reading political changes have resulted in very substantial changes in international capital flows. FDI now contributes to a significant share of the domestic investment, employment, exports etc. the India began to experience a surplus on the balance of payment and very remarkable improvement in the reserves positions. Foreign investment has assisted and is assisting the economic growth of country. 1. FDI shifts the burden of risks of investment from domestic to foreign investors. 2. FDI is only capital inflow that has been strongly associated with higher GDP since 1970. 3. FDI generated large employment opportunity. The flow of direct foreign investments to India has been comparatively limited because of the type industrial development strategy and the very cautious foreign investment policy followed by nation. Direct foreign investment in India is adversely affected by the following factors – 1. The public sector was assigned as monopoly or dominant position in most important industries, and therefore, the scope of private investment, both domestic and foreign was limited. 2. When the public sector needed foreign investment, there was a marked preference for the foreign govt. sources. 3. Foreign investment was normally permitted only in high technology industries. 4. Foreign equity participation was normally subject to 40%. 5. Payment of dividends abroad, repatriation of capital etc., as well as inward remittances was subject to stringent laws like Foreign Exchange Registration Act (FERA) 1973. These discourage foreign investments. 6. Corporate taxation was high and tax laws and procedures were complex. These factors either limited the scope of foreign investment in India.

Q. What do you mean by economic system? Explain in detail. OR What are the characteristics and functions of economic system?

Ans. MEANING: A system designed to utilize her resources for the purpose of satisfying the needs and wants of people. W.W. LOUCKS; “An economic system consists of those instructions which a given nation or group of nations has chosen or accepted as means through which their resources are utilized for the satisfaction of human wants.”  Structure  Nature of economy  Stage of development of economy  Economic Resources  Level of economy  Distribution of Income & Assets  Global economic linkages  Economic Policies/ Reforms etc.  Industry  Agriculture  Infrastructure  Financial & Fiscal Sectors  Removal of Regional imbalances  Price & Distribution Controls  Per Capita Income & National Income  Human Resources It comprises of all Institutions, Organizations and Policy mechanisms by which the people of a country manage and utilize the country’s resources to obtain things they need. BASIC UNITS OF ECONOMIC SYSTEM:  Household  Firm  Industry  Government

HOUSEHOLD:  Simplest yet most significant.  Limited means but multiple needs.  Problem of allocation of scarce resources.  A household decides what part of income to consume and what to save. FIRM:  Unit of Ownership, Management and Control.  A business unit owns and controls one or more factory, branch/office and is engaged in production and/or distribution of some product/services.  Household represents demand side, whereas Firm represents Supply side.  Person who launches a firm is called Entrepreneur.  Entrepreneur takes decisions regarding size, location of plant/office- nature & quality of product, factors & means of production, fixation of price, sales promotion, distribution channel, source of finance etc. INDUSTRY: Meaning: All firms producing same or similar products. According to P.S. Florence; “An industry is a group of firms tending to specialize in the same transactions or series of transactions”. Firm means Single unit of production, whereas Industry comprises of all the firms producing the same type of product. e.g. Mercedes Benz is a firm, while all the firms producing cars constitutes Car industry. GOVERNMENT: All public Agencies, State bodies and other units which govern the country.  LOCAL GOVERNMENT  STATE GOVERNMENT  CENTRAL GOVERNMENT Maintenance of Law & Order

Provides public Services (e.g Education, Health, Water, Electricity, Telephone, Public transport etc.) Several government/ public enterprises:e.g: Indian Oil Corporation, State Bank of India, Steel Authority of India (SAIL) CHARACTERISTICS OF ECONOMIC SYSTEM  Dynamic  National Entity  Need Satisfaction  Scarcity of Resources  Interdependence  Institutional FUNCTIONS OF ECONOMIC SYSTEM  What to produce  How to produce  Economic Growth  For whom to produce  Choice b/w Current needs & Future needs TYPES OF ECONOMIC SYSTEM 1. MIXED ECONOMY 2. CAPITALISTIC ECONOMIC SYSTEM 3. SOCIALISM MIXED ECONOMY In a mixed economy there exist a mixture of government control and free enterprise. It can also be defined as a form of economy where the elements of capitalist economy as well as the social economy can be found. Most developed countries of the world have mixed economy. Mixed economy is also known as dual economy. In some areas of a mixed economy the government can even have a monopoly. Typically in mixed economies, the government runs things like postal services, railways and health care services. The influence of the government is considerable even on the industries that are not owned or run by the government, in the form of regulations and taxes. It is very difficult to define the economy of a country as socialist,

capitalists or a mixed one. It has been seen lately that the role of government is increasing rapidly after the recent worldwide depression. In a mixed economy we see the presence of the private economy freedom along with the centralized planning having a common goal of avoiding the problems that are linked with socialism as well as the capitalist system of economy. In the system of a mixed economy, freedom in economic activities is influenced by the licensing policies and regulations of the government. Mixed economy allows the participation of private entrepreneurs in the field of production and in a competitive environment with the objective of making profit. As against some of the features of socialism, mixed economy includes both public and private ownership in production with a view to maximize the welfare of the society. Where both Public & Private sectors exists.  Some resources and enterprises controlled by the State, other economic activities are left to the private initiative.  Private sector allowed to work for private motive but under certain regulations decided by the government.  Extent of State participation & regulation may vary from time to time. CAPITALISTIC ECONOMIC SYSTEM Capitalism is followed by a large number of countries these days. The countries like USA that are following the capitalist system are leading the world in terms of the level of economic development. Capitalism follows four basic principles (i) The doctrine of self interest (ii) Theory of competitions (iii) Profit Motive. Free enterprise, competitions and private ownership of property are some of the features of capitalism. It is also known as the free enterprise economy. A policy of non-interference is adopted by the government in this system. Trade and industry are allowed to take their own course and the government is mainly concerned with the maintenance of law and order in the country. Characterized by Free Enterprise & Profit motive. Decisions of Production Decisions of Consumption Decisions of Exchange Decisions of Distribution  Self-Interest guides all the economic activities.

 Factors of production (Land, Labor, Capital etc) are privately owned and production takes place at the initiative of private enterprise.  People having freedom of choice concerning occupation, savings and investment.  Found in USA, U.K, Japan, Canada etc. Though a completely free market economy is rare. SOCIALISM: Also called Communist Economic System/ ‘Free Enterprise economy’ or ‘Laissez Faire’ Socialism is a type of economic system in which the state totally owns or controls the resources and means of production. The basic stress is on the use of these resources for the overall welfare of all members of the society. The socialistic system followed in Communist countries is characterized by state capitalism but in the democratic socialistic nations a dominant private sector is also present. Under the socialistic system the workers in sectors like industry, agriculture and transport become the joint owners of the means and results of production. As the non-human resources of production are mainly owned by the state or the society it ensures better allocation and utilization of these resources, elimination of unemployment and class struggle. It also reduces the inequality in income. On the other hand socialism can increase Red-tapism, corruption and Bureaucratization.  State owns and controls all means of production. Decisions pertaining to production, distribution.  State focuses on maintenance of law and order in the country, defending country from foreign war and provides fair justice to people, leaving trade and industry to take their own course.  BASIC PRODUCTION UNITS: Households and Firms.

Q. Explain Changing Role Of Government In Indian Economy. Ans. INTRODUCTION: All of us are part and parcel of the political environment around us. Business executives and representatives are no exception. They must understand the aspects of political and government environment prevailing in the country. They cannot limit themselves to the problems internal to the business organization but have to keep themselves updated of the national and international issues that have an impact on their business. Such an understanding will help him in

the long run while dealing with his own managerial and organizational problems being influenced by the political and government environment. \ROLE OF GOVERNMENT: One of the merging features of modern business is the increasing involvement of government in business activities. As of today, there is no single country in this world where government does not interfere in any form in its economic activities. The two most powerful institutions in society today are Business and Government where they meet on common ground. They determine public policy, both foreign and domestic for a nation. The extent and nature of control vary widely between nations depending upon the nature of political system, administrative system, role and contribution of private sector, etc. In traditional sense, the role of any government has been to maintain law and order, provide social security, exercise control over public activities and protect the national from external aggression. But, in course of time, emphasis on planned economic development and various other circumstances such as increasing gap between rich and poor, monopoly like situation created by private sector, rise in inflation and concentration of national wealth in the hands of few, prompted the government to play an active role in promoting and regulating the business activity consequently. Thus, government has assumed four important roles in an economy as explained under: • • • •

Regulatory Role. Promotional Role. Entrepreneurial Role. Planning Role.

One thing should be noted that these roles are not exclusive to each other. There may be circumstances when the government becomes active in more than one way to serve national or sectoral objectives. For instance, the regulatory and planning roles may be mutually complementary and so can be the entrepreneurial, planning and promotional roles. The implications of each role are as follows:(1) Regulatory Role In almost every country, government plays a regulatory role for the extent and development of industries with the least wastage of resources. Government regulation of the business may cover a broad spectrum extending from entry into a business to the final results. More specifically, government may regulate business activities using direct (discretionary) measures and/or indirect (non-discretionary) measures. Direct Control It refers to measures which are applicable at the discretion of administrative authorities. They can be applied selectively from firm to firm and industry to industry. Many developing countries like India, China and Brazil have instituted a variety of controls over economy, including

industrial licensing and price and distribution controls. The objectives of direct control include the prevention of the market structure from becoming monopolistic, the development of small and new entrepreneurs, balanced regional development, etc.

Direct Control Vs Indirect Control Direct Control: The fixation or deciding criterion for price, quality and quantity standards for certain product or services is true example of direct control. The administered price policy of the government of India is nothing but a direct control measure. Similarly, reservation of products for exclusive manufacture in small scale units is another example of direct control which has been used for employment generation and decentralization. Indirect Control: Typical examples of indirect control are fiscal and monetary controls which may include tax measures, change in interest rates on bank deposits and loans, regulating money supply and credit creation, granting subsidy to particular industry and so on. The basic difference between direct and indirect control is that where direct control are applicable at the discretion of administrative authorities, no such administrative discretion is required under indirect measures.

Indirect Control Indirect control of government is usually exercised through fiscal and monetary incentives and disincentives (penalty). For example, a high import duty may discourage imports while on the other hand, fiscal and monetary incentives may encourage the development of export oriented industries. Indirect regulations may consist of legislative measures or rules laid down whereby private activities are automatically regulated, whether and to what extent, the measures apply to business firms or individuals do not depend upon discretionary powers of the administration due to the specific content of legal provisions and rules. In short, the regulatory role of government may include: (a) To regulate and monitor the conduct of business by laying down acts and standard of management, e.g. making provisions in law (Factory Act, 1948) for regulating working conditions, minimum remuneration and service rules. (b) To lay down measures to control the disposal or accrual of income, e.g. ceiling on dividend distribution, levy of wealth tax, etc. (c) To prescribe conditions under which private firm would be permitted to enter certain business areas or avail of public facilities and scarce resources. For instance, permitting entry into oil and gas exploration on issue of license and to set up economic zones like special economic zone (SEZ), free trade zone (FTZ), export oriented units (EOUs), etc. and inviting particular business groups on long term lease and attractive subsidies.

(d) To monitor and regulate the relationship between different interest groups or segments in the economy so as to protect legal rights or resolve disputes or prevent unhealthy concentration of economic power, e.g. (a) Check on mergers, acquisitions and take-over. (b) Check on inter-company investments. (c) Emphasizing on corporate governance. (d) Legal enactment to protect consumer rights, and (e) Ceiling on purchase/acquisition of share by FIIs/NRTs. Note This is wrong to understand that government controls and regulations usually imply negative effects only. These may have positive implications as well. Basically, it depends upon the purpose, government seeks to achieve. Under positive regulations, measures, such as, tax concessions, subsidies, technical and financial assistance, counter guarantee, easy credit, free or cheap land, protective against foreign competition (dumping of goods) by way of anti-dumping duties or barriers on imports are popular and in

On the other hand, legislative or administrative measures aimed at restricting or limiting private trade and industry come under the category of negative regulations. These negative regulations sometimes may include restrictions on raising up of capital from primary market through control of capital issues, raising taxes and duties, controlling supply of essential goods and services, imposing price ceiling and so on. Thus, it would not be correct to suggest that government regulations always have either positive or negative implications. Sometimes, even it happens that a measure taken by government may have both positive and negative implications. Thus, it is welcome by one group of businessmen and on the other hand, opposed by another group of business people. For example, any increase in import duty may restrict the profits of some domestic industries but it may be a welcome decision for producers and/or suppliers of competing products. (2) Promotional Role In developed economies, government does not only regulate industrial labour and agricultural activities but actively assist and develop them. This role may not be quite surprising by people of developed economies but for a developing country like India, China and Korea, the promotional role of government is obviously of greater significance. If developing world has to become independent, the government will have to assure direct responsibility to build up and strengthen the necessary development of infra-structure, such as, road, power, transport, means of communication, finance, marketing, institutions for training and guidance and other promotional activities. The promotional role of government may include: (a) Assistance for development of rural/backward/remote areas by way of setting up business zones, offering subsidies, tax concessions, allocating scarce resources, providing land, power, water at concessional rates, making available credit and finance at low interest and marketing and promoting through specialized organizations.

(b) Providing insurance cover to businesses and up-to-date information inputs for the development of priority sectors. (c) To assist and promote industrial and commercial activities by assuming the responsibility to provide and strengthen road network, water and power supply, transport, communication network, availability of funds, setting up training and R&D houses and so on. (d) Expansion of public sector. (e) Establishment and operation of development banks. (f) To promote sick units. (g) Encouragement to small and medium scale enterprises (SMEs). (h) Promoting sick and weak units. (i) Balanced regional development. Promotional Role The promotional measures are of positive nature and are basically aimed at initiating and promoting business activities.

(3) Entrepreneurial Role In many countries, the government also plays the entrepreneurial role which means the government itself becomes the entrepreneur. It then not only establishes business enterprises but operates, manages and control the business operations. There are number of factors to justificate this role and may be found in developed and developing countries. These are mainly (a) (b) (c) (d) (e)

To promote balanced regional development. To provide employment. Socio-political factors. To prevent the exploitation of consumers by traders. Areas belonging to public welfare and safety where private sectors hesitate to invest due to low margin. (f) To promote capital intensive industries involving huge investments which may not be an attractive option to private sector due to greater risk and low returns. (g) To take over and manage private enterprises those offers huge employment but are not profitable in present. Further, Indian industrial policy also reserves certain industries where private sector cannot enter. These industries basically belong to Defence products, Atomic energy, Atomic metal and so on. The reason for restricting entry of private sector is that these areas belong to a nation’s security and strategic concerns.

Entrepreneurial Role In most of the economies, government assumes entrepreneurial role and establish enterprises because these are the area where huge capital investment is required and gestation period is very long thus enabling private sector to enter and seek entrepreneurial role.

(4)

Planning Role

The Planning role of the government has been closely related with its regulatory role. The Modern State is custodian of the welfare of society. The welfare government has the responsibility to fulfill the aspirations of the society by bringing about all-round prosperity. The basic idea in favour of Government’s planning role was exclusive dependence on the market mechanism and freedom of private enterprise has not been conducive to rapid economic development. The ends i.e. the objectives to be achieved and the purpose to be served are many. In the pursuit of this task, the most important problem especially in the case of less developed countries is the scarcity of resources. The resources that are readily available are quite insufficient to meet all the ends. The resource constraints demanded that some of the purposes go unserved. This calls for the determination of the more urgent needs or national priorities and the optimal allocation of the available resources as best to sub-serve the common man. This is also the basic principal of national planning. Q. Define Bank / Commercial Bank and Discuss the functions of Commercial Banks. Ans. MEANING AND DEFINATION OF COMMERCIAL BANK : In modern economy commercial Banks Play an important role in the financial sector. A Bank is an institution dealing in money and credit. Credit money is the major component of money supply in a modern economy. Commercial banks are the creators of credit. The strength of economy of any country basically depends on a sound and solvent banking system. A Commercial bank is a profit seeking business firms dealing in money or rather claims to money. It safeguards the savings of the public and give loans and advances. The Banking Companies Act of 1949, defines banking company as “accepting for the purpose of lending or investment of deposit money from the public, repayable on demand or otherwise and withdrawable by cheque, drafts, order or otherwise”. FUNCTIONS OF COMMERCIAL BANKS :Modern commercial banks perform a variety of functions. They keep the wheels of commerce, trade and industry always revolving. Major functions of a commercial bank are: Primary or Banking functions and Secondary or Non-Banking functions. FUNCTIONS OF COMMERCIAL BANKS Primary

Deposits

Loans & Advances

Secondary

Agency Services

Subsidiary Activities

Utility Services

I. Primary / Banking Functions :Commercial banks have two important banking functions. One is accepting deposits and other is advancing loans. 1) Deposits:-

One of the main function of a bank is to accept deposits from the public. Deposits are accepted by the banks in various forms. a) Current Account Deposits:Current Accounts are usually opened by businessmen who have a number of regular transactions with the bank, both deposits and withdrawls. There is no restriction on number and amount of deposits. There is also no restriction on withdrawls. No interest is paid on current deposits. Banks may even charge interest for providing this facility. These accounts are also known as demand deposits as amount can be withdrawn on demand. b) Saving Account Deposits:Saving Accounts are opened by salaried and other less income people. There is no restriction on number and amount of deposits. withdrawls are subject to certain restrictions. It earns Interest but less than fixed deposits. It encourages saving habit among salary earners and others. Saving deposits are an important source of funds for banks. c) Fixed Account Deposits :Deposits in fixed account are time deposits. Money under this account is deposited for a certain fixed period of time varying from 15 days to several years. A high rate of interest is paid. If money is withdrawn before expiry date, the depositor receives lower rate of interest. Deposits can be renewed for further period. Many banks sanction loans against security of fixed deposits. d) Recurring Account Deposits:In Recurring deposit, a specified amount is regularly deposited by account holder, at an internal of usually a month. This is to form the habit of small savings among the people. At the end of maturity period, the account holder gets a substantial amount. Interest on this type of deposit is almost equal to fixed deposits. Thus by creating variety of deposits, banks motivate people in a variety of ways and encourage savings in the economy. 2) Loans And Advances:Banks not only mobilize money but also lend to its credit worthy customers for maximizing profits. Loans and Advances are granted To :a) Business And Trade:Commercial banks grant short-term loans to business and trade activities in following forms:i) Overdraft:Commercial banks grant overdraft facility to current account holders Under this system a borrower is allowed to draw more than what is deposited in his account. The borrower is granted to a fixed additional amount against collateral security. Interest is charged for actual amount drawn. ii) Cash Credit:Cash credit is given by the bank to any businessman to meet regular working capital needs, against the security of goods or personal security. Interest is charged on actual amount drawn by the customer. iii) Discounting of Bills:When the holder of the bill is not in a position to wait till the maturity of the bill and requires cash urgently, he sells the bill of exchange to bank. Bank advance credit by discounting bills of exchange, government securities or any other approved financial instruments. The bank purchases the instruments at a discount.

iv) Money At Call:Banks also grant loans for a very short period, generally not exceeding 7 days. Such advances are repayable immediately at a short notice hence they are called as Money at Call or Call money. These loans are given to dealers or brokers in stock market against Collateral Securities. v) Direct Loans:Loans are given to customers against the security of moveable properties. Their maturity varies from 1 to 10 years. Interest has to be paid on entire loan amount sanctioned. Loans are of many types like :- personal loans, term loans, call loans, participative loans, collateral loans etc. b) Loans to Agriculture:Banks grant short-term credit to agriculture at a lower rate of interest. Loans are granted for irrigation, purchase of equipments, inputs, cattle etc. c) Loans To Industries:Banks grant secured loans to small and medium scale industries to meet their working capital needs. The time period may be from one to five years. It may be in the form of Overdraft, cash credit or direct loan. d) Loans To Foreign Trade:Loans are granted to export and import in the form of direct loans, discounting of bills, guarantee for deferred payments etc. Here the rate of interest is low. e) Consumer Credit / Personal loans:Banks also grant credit to household in a limited amount to buy some durable consumer goods like television sets, refrigerators, washing machine etc. Such consumer credit is repayable in installments. Under 20-point programme, the scope of consumer credit has been extended to cover expenses on marriage, funeral etc., as well. f) Miscellaneous Advances:Banks also gives advances like packing credits to exporters, export bill purchased or discounted, import finance, finance to self-employed, credit to weaker sections of society at concessional rates etc. II. Secondary / Non-banking Functions:Banks gives various forms of services to public. Such services are termed as non- banking or secondary functions:1. Agency Services:Banks perform certain functions on behalf of their customers. While performing these services, banks act as agents to their customers, hence these are called as agency services. Important agency functions are: a) Collection:Commercial banks collect cheques, drafts, bills, promissory notes, dividends, subscriptions, rents and any other receipts which are to be received by the customer. For these services banks charge a nominal amount. b) Payment:Banks also makes payments on behalf of their customers like paying insurance premium, rent, taxes, electricity and telephone bills etc for such services commission is charged. c) Income – Tax Consultant:Commercial banks act as income-tax consultants. They prepare and finalise the income tax returns of their clients. d) Sale and Purchase Of Financial Assets:-

As per the customers instruction banks undertake sale and purchase of securities, shares and any other financial assets. Nominal charges are charged by a bank. e) Trustee, Executor And Attorney:As a trustee, banks become the custodian and manager of customer funds. Bank also acts as executor of deceased customer’s will. As an Attorney the banks sign the documents on behalf of customer. f) E- Banking:Through Electronic Banking, a customer can operate his bank account through internet. He can make payments of various bills. He can even transfer money from one place to another. 2.

Utility Services:Modern Commercial banks also performs certain general utility services for the community, such as a) Letter Of Credit:Banks also deal in foreign trade. They issue letter of credit and provide guarantee to foreign traders for the soundness of their customers. b) Transfer Of Funds:Banks arrange transfer of funds cheaply and safely from one place to another. Transfer can be in the form of Demand draft, Mail transfer Travelers cheques etc. c) Guarantor:Banks offer a guarantee of payment on behalf of importer to facilitate imports with deferred payments. d) Underwriting:This facility is provided to Joint Stock Companies and to government to enable them to raise funds. Banks guarantee the purchase of certain proportion of shares, if not sold in the market. e) Locker Facility:Safe Lockers are provided to the customers. So that they can deposit their valuables like Jewellary, Securities, Shares and other documents. f) Referee:Banks may act as referee with respect to financial standing, business reputation and respectability of customers. g) Credit Cards:Credit card facility has been introduced by commercial banks. It enables the holder to minimize the use of hard cash. Credit card is a convenient medium of exchange which enables its holder to buy goods and services from member – establishment without using money. III.

Subsidiary Activities:Many commercial banks also undertakes subsidiary activities such as :1) Housing Finance:Housing finance is provided against the security of immoveable property of land and buildings. Many banks such as SBI, Bank of India etc. have set up housing finance subsidiaries. 2) Mutual Funds:A Mutual fund is a financial intermediary that pools the savings of investors for collective investment in diversified portfolio securities Many banks like SBI, Indian Bank etc. have set up mutual fund subsidiaries.

3)

Merchant Banking:A variety of services are offered by merchant banking like:Management, Marketing and Underwriting of new issues, project promotion, corporate advisory services, investment advisory services etc. 4) Venture Capital Fund:Venture capital fund provides start-up share capital to new ventures of little known, unregistered, risky, young and small private business, especially in technology oriented and knowledge intensive business. Many commercial banks like SBI, Canara Bank etc. have set up venture Capital Fund Subsidiaries. 5) Factoring:Factoring is a continuing arrangement between a financial intermediary (factor) and a business concern (client) where by the factor purchases the clients accounts receivable. Banks like SBI and Canara Bank have established subsidiaries to provide factoring services. Thus various services are provided by commercial Banks.

Q. What Is Mean By Exim Policy/Foreign Trade Policy Explain In Details? Ans: Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in matters related to the import and export of goods in India. The Foreign Trade Policy of India is guided by the Export Import in known as in short EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992. DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy. The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India. Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947. Introduction: Indian EXIM Policy contains various policy related decisions taken by the government in the sphere of Foreign Trade, i.e., with respect to imports and exports from the country and more especially export promotion measures, policies and procedures related thereto. Trade

Policy is prepared and announced by the Central Government (Ministry of Commerce). India's Export Import Policy also know as Foreign Trade Policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. History of Exim Policy of India: In the year 1962, the Government of India appointed a special Exim Policy Committee to review the government previous export import policies. The committee was later on approved by the Government of India. Mr. V. P. Singh, the then Commerce Minister and announced the Exim Policy on the 12th of April, 1985. Initially the EXIM Policy was introduced for the period of three years with main objective to boost the export business in India OBJECTIVES OF THE EXIM POLICY: Government control import of non-essential items through the EXIM Policy. At the same time, all-out efforts are made to promote exports. Thus, there are two aspects of Exim Policy; the import policy which is concerned with regulation and management of imports and the export policy which is concerned with exports not only promotion but also regulation. The main objective of the Government's EXIM Policy is to promote exports to the maximum extent. Exports should be promoted in such a manner that the economy of the country is not affected by unregulated exportable items specially needed within the country. Export control is, therefore, exercised in respect of a limited number of items whose supply position demands that their exports should be regulated in the larger interests of the country. In other words, the main objective of the Exim Policy is:  To accelerate the economy from low level of economic activities to high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities.  To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components,' consumables and capital goods required for augmenting production.  To enhance the techno local strength and efficiency of Indian agriculture, industry and services, thereby, improving their competitiveness.  To generate new employment.  Opportunities and encourage the attainment of internationally accepted standards of quality.  To provide quality consumer products at reasonable prices. Governing Body of Exim Policy

The Government of India notifies the Exim Policy for a period of five years under Section 5 of the Foreign Trade (Development and Regulation Act), 1992. The Exim Policy is updated every year on the 31st of March and the modifications, improvements and new schemes became effective from 1st April of every year.All types of changes or modifications related to the EXIM Policy is normally announced by the Union Minister of Commerce and Industry who co-ordinates with the Ministry of Finance, the Directorate General of Foreign Trade and network of DGFT Regional Offices. FEATURES OF CURRENT EXIM POLICY:1. Special Economic Zones (SEZs):(a) Offshore Banking Units (OBUs) shall be permitted in Special Economic Zones (SEZs). (b) Units in SEZ would be permitted to undertake hedging of commodity price risks, provided such transactions are undertaken by the units 'on stand alone basis. (c) Units in SEZ shall be permitted External Commercial Borrowings (ECBs) for a tenure of less than three years. (d) Four existing EPZs have been converted into SEZs and 13 New SEZs have already been given approval. 2. Employment Oriented Measures:- Exim policy initiated a number of measures which would help employment orientation. Among them were the following: (a) Agriculture :  Removal of quantitative and packaging restrictions on wheat and its products, butter, pulses, grain and flour of barley, maize, bajra, ragi and jowar.  Removal of restrictions on export of all cultivated (other than wild) varieties of seed, except jute and onion.  Agricultural Export Zones have been notified.  Transport subsidy for export of fruits, vegetables, floriculture, poultry and dairy products.  43% special DEPB rate for primary and processed foods exported in retail packaging of 1 kg. or less. b) Cottage Sector and Handicrafts :  An amount of Rs. 5 crore under Market Access Initiative (MAl) has beenearmarked for promoting cottage sector exports coming under the Khadi and Village Industries Commission (KVIC).  Market Access Initiative (MAI) scheme for the development of website for virtual exhibition of products from the handicrafts sector.  Entitlement for Export House Status at Rs. 5 crore instead of Rs.15 crore for others.  Entitlement to duty free imports of an enlarged list of items as embellishments upto3% of FOB value of exports. (c) Small Scale Industry:

With a view to encouraging further development of centres of economic and export excellence such as Tirpur for hosiery, woolen blankets in Panipat, woollen knitear in Ludhiana, following benefitswould be available to small-scale sector.  EPCG facility for the common service providers in these areas.  Market Access Initiative (MAl) for creating focused technological services and marketing abroad to the recognised associations of units in SSI.  Entitlement for Export House Status at Rs. 5 crore instead of Rs.15 crore for others. (d) Leather:Duty free imports upto 3% of f.o.b. value combined to leather garments has been extended to all leather products. (e) Textiles :  Sample fabrics permitted duty free within the 3% limit for trimmings and embellishments.  Additional items such as zip fasteners, inlay cards, eyelets, rivets, toggles,Velcro tape, cord and cord stopper included in input output norms.  Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics permitted. (f) Gem and Jewellery :  Import of rough diamonds is allowed freely at 0% customs duty.  Licensing regime for rough diamond is being abolished.  Value addition norms for export of plain jewellery reduced to 7% and for all merchandised unstudded jewellery to 3%. .  Personal carriage of jewellery allowed through Hyderabad and Jaipur airport as well. TECHNOLOGY ORIENTED (a) Electronic Hardware:1 Conversion of the Electronic Hardware Technology Park (EHTP) into zero duty regime under the ITA (Information Technology Agreement)-I 2 Net Foreign Exchange as Percentage of Exports (NEEP) to be made positive in 5 years. 3 No other export obligation for units in EHTP. (b) Chemicals and Pharmaceuticals :

1 65% of DEPB rate for pesticides formulations. 2 No limit on export of samples. . 3 Reimbursement of 50% of registration fees on registration of drugs. (c) Projects: 1 Free import of equipment and other goods used abroad for more than one year. GROWTH ORIENTED (a) Strategic Package for Status Holders: 1 License, certificate, permissions. and customs clearances for both imports and exports on selfdeclaration basis. 2 Priority finance for medium and long term capital requirement as per conditions notified by the RBI. 3 Exemption from compulsory negotiation of documents through banks, However, the remittance would continue to be received through banking channels. 4 100% retention of foreign exchange in Exchange Earner's Foreign Currency 1EEFC) account. 5 Enhancement in normal repatriation period from 180 days to 360 days, (b) Diversification of Markets : 1 . Setting up of "Business Centre" in Indian missions abroad for visiting Indian exporters/businessmen... 2 . ITPO portal to host a permanent virtual exhibition of Indian export products. 3 . Focus Latin American Countries (LAC) has been extended upto March 2003. 4 . Focus Africa has been launched for developing trade relations with the Sub-Saharan African region. The exporters exporting to these markets shall be given Export House Status. on export of Rs. 5 crore. 5 . Links with the Commonwealth of Independent States (CIS) countries to be revived. (c) North Eastern States, Sikkim and Jammu and Kashmir : 1 Transport subsidy for exports to be given to units located in North East, Sikkim and-Jammu and Kashmir so as to offset the disadvantage of being far from ports. (d) Neutralizing High Fuel Cost:1 Fuel costs to be rebated for all export products. This would enhance the cost competitiveness of our export products.

SECTION- B

UNIT-I ENVIRONMENTAL EDUCATION Q. Define environmental education, Explain its principle, Objective and scope. Ans: The word environmental Education is originated from the word 'Environir' which is French word which means 'to surround'. So, it is very simple to mean that environment is the total of various situations that surrounded men in a particular place or time. In a wider view, the word environment can be realized as a composite word. Environment includes all the biotic and abiotic substances or things. Environment means the situation created independently or dependently by the natural, biological and social elements. Environment can be dived into two types by analyzing the basic structure and fundamental traits. They are physical (abiotic) and biotic environment. Physical environment can again be divided into three special types that is: Solid: Solid environment includes rock, earth, minerals, trees etc Liquid: The liquid environment is covering water, petroleum and all the liquid resources Gas: gaseous environment are lithosphere, hydrosphere or and the atmosphere The biotic elements of the environment include the trees or forest, animals or living organisms. Among the living organism the most important is the man most intelligent and civilized organism on earth. Man is the only living being who can create and destroy environment according to the needs of his/ her. With the help of civilization man has succeeded to control and dominate Nature with the help of knowledge, science and technology through gradual development. The main objective of environmental education is to develop awareness among the people of the earth about the environment which is sum total of water, air and land, interrelationships among themselves and also with the humans. Environmental education develops the proper use of resources and develops the proper consciousness for the protection of the environment and proper utilization of natural resources. According to the International Union for the Conservation of Nature (IUCN), environmental education (EE) is: "The process of recognizing values and clarifying concepts in order to develop skills and attitudes necessary to understand and appreciate the interrelatedness among men, his culture and his biophysical surroundings. EE also entails practice in decision-making and selfformulation of a code of behavior about issues concerning environmental quality. International Union for the Conservation of Nature (IUCN; 1971) Principles of Environmental Education:

Principles for environmental education (EE) programmes. These are summarized as follows:  EE is a lifelong educational process that occurs at all levels of education.  EE is about the interactions which occur in the natural, the built and social environment. It should lead to the understanding of how human interactions and political processes, together with the nature of socio-economic issues and the effect of these on environmental degradation or enhancement.  EE is for developing attitudes and value systems which lead to socio-economic improvement through positive social interactions and the maintenance and improvement of the natural and built environment.  EE aims to develop an individual's understanding, skills and the feelings of empowerment that are necessary for both positive behavior towards the biophysical and social environment in everyday living, and for active participation in group efforts to find the optimal solutions for environmental problems.  EE requires a holistic and preferably interdisciplinary approach to teaching with opportunities for diverse learning experiences, but with particular emphasis on direct experiential learning in natural, built and social environments. The overall goal of environmental education can be expressed in another form as three principal objectives (UNESCO, 1977a). 1. To foster clear awareness and concern about economic, social, political and ecological interdependence in urban and rural areas. 2. To create new patterns of behaviors of individuals, groups and society as a whole towards the environment. 3. To provide every person with opportunities to acquire the knowledge, values, attitudes, commitment and skills needed to protect and improve the environment OBJECTIVE/FUNCIONS OF ENVIRONMENTAL EDUACTION: The objectives and functions of environmental education are as follows: (a) Awareness: To develop the sense of awareness among the students, social groups and individuals about environment and its various problems & sensitivity to the total environmental. (b) Knowledge: To help the students, social groups and individuals in acquiring basic knowledge about environment, gain a variety of experiences in and acquire a basic understanding of the environment and its associated problems. (c) Attitude: To develop the sense of responsibility for the environment among social groups and individuals. Acquire a set of values and feelings of concern for the environment and motivation for actively participation in environmental improvement and protection. By creating positive attitude about environment among them

(d) Skill: To help social groups and individuals acquire skills for identifying and solving environmental problems. To develop the capability of using skills to fulfill the required aims, to realize and solve environmental problems through social, political, cultural and educational processes. (e) Evaluation ability: To help individuals and social groups to evaluate environmental measures and education programs in terms of ecological, economic, social, aesthetic and educational factors. Make realize them the inter-relationship between man and environment (f) Participation: To provide social groups and individuals with the opportunities to be actively involved at all levels in working towards the resolution of environmental problems. To develop required curiosity among the students for the realization of environmental problems so that they would be inspired to work for the solution of such problems. Participate in the process of decision making about environment. (g) Environmental perception and awareness. (h) Environmental education and training. (i) Control of environmental degradation and pollution. (j) Resource management. (j) Environmental impact assessment In order to achieve these goals and objectives, environmental education should be a continuous life-long process, to be provided for all age groups, at all levels, both in and out of school education. It should foster in public large-children, adolescents and adults alike awareness and better understanding of the environmental issues. Environmental education programs need to be planned nationally as there is difference in the environmental priorities. Fast growing populations, high .intensity agriculture, human settlements and slum improvement, introduction of modern transport systems, increasing demands for energy and industrialization are the environmental priorities for developing countries whereas over exploitation of resources, industrial pollution and waste disposal are the main environmental priorities for developed countries. Environmental education is a dynamic process. The priority of such education is to develop cautious mind of people about their total surrounding. Its main task is to impart proper knowledge and training to solve various problems of our environment systematically. In order to enable people to enjoy good health and a high quality of life, it is vital to prevent harmful effects to human health or damage to the environment caused by pollution of air, water and soil, noise, vibration, noxious smells etc. The Components/Scope of Environmental studies is based on five fundamental aspects. 1. Environmental perception and awareness. 2. Environmental education and training. 3. Control of environmental degradation and pollution. 4. Resource management. 5. Environmental impact assessment.

Q. What do you mean by NGO? Explain the role of NGO in Environment education. Ans: INTRODUCTION: NGOs are defined as “private organizations which conduct and pursue activities to relieve sufferings, promote the interests of poor, provide basic social services or undertake community development”. In wider usage, the term NGO can be applied to any non profiting organization which is independent from the government. NGOs are typically value based organizations which depend, in whole or in part, on charitable donations and voluntary service. Although the NGO sector has become increasingly professional over the last two decades, The Consequences of the Environmental pollution are not hard to comprehend, whereas the solution to ending environmental pollution is not easy to come by this is an unending complex and intricate debate and may be single solution, however attempts can always be made to find out solution to specific problems keeping in view the technological solutions legal parameters and judicial pronouncements & the role of NGO’s has a very important to protection of environment through social services. The NGO’s from past five decades have witnessed the difficult problems encountered in providing health care services to our poor people; spread the awareness to public protection of wildlife, forest, human right, Women and Children etc Human beings are the ecologically dominant species in the whole ecosystem. Although they have the same need for heat, light, water and food that other species have, they alone posses’ attributes that give them dominance over other living species. Thus, human beings compete far more successfully than all other living creatures. Furthermore, human beings have been able to manipulate natural forces in the eco-system with an intensity unsurpassed by any other living being. This manipulation has given rise to the breakdown of the natural selfprotective and self-perpetuating mechanisms built into nature, a situation made even worse by a belief that human beings have the right to use the natural environment solely for their own design and ends, without consideration for the consequences of their own designs and ends, without consideration for the consequences of their actions on the system. With the gearing up of industrial revolution, this human tendency towards nature becomes much stronger. The of technology and machines to subjugate nature became the redo of the modern world. Meaning of Social Work: "Never think, I will give when I am rich;Just give what you can, while you can..."Social work is a professional and academic discipline that seeks to improve the quality of life and wellbeing of an individual, group, or community by intervening through research, policy, community organizing, direct practice, and teaching on behalf of those afflicted with poverty or any real or perceived social injustices and violations of their human rights. Research is often focused on areas such as human development, social policy, public administration, program evaluation and international and community development. Social workers are organized into local, national, continental and international professional bodies. Social work, an interdisciplinary field, includes theories from economics, education, sociology, medicine, philosophy, politics, psychology, Environment and etc.

A Non-Governmental Organization is a social service organization working towards a better society. True to its name, ‘ perseveres to bring in a positive change by uniting people who share the common vision of a developed India, and pay back to the society which helped us. All big missions have humble beginnings and so is ‘is endeavor. Our mission is to address issues like poverty and ignorance that are threatening and weakening our country’s progress. We aim to achieve literacy, eradicate poverty, abolish child labour, uplift and instill confidence among the weaker sections of the society. Our NGO services focus on assessing individual strengths and needs, setting personal goals and providing an environment that encourages overall growth and development. Historical Evolution of NGO’s in India The expression, “Non-Governmental Organization” can be defined in the following terms: “A non-governmental organizations (NGO’s) is any non-profit, voluntary citizens’ groups which is organized on a local, national or international level. Task orientated and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizens concerns to the government, advocate and monitor policies and encourage political participation through provisions of information. Some are organized around specific issues, such as human rights, environment or health. They provide analysis and expertise, serve as early warning mechanisms and help monitor and implement international arguments”. A country like India, which is the world largest democracy, the seventh largest country in the world in terms of land area and the second most populous country in the world, the relevance of the NGO as a concept in theory and in practice, as a vibrant means of ensuring that the concerns of the citizens of this country derive protection in terms of the rule of law, can hardly be over emphasized. The constitution of India, provide an extraordinary source of valuable fundamental rights for the protection of the rights of individuals. It is these rights, coupled with the directive principles of state policy that are relied upon by NGOs in their pivotal role in supporting individuals for the enforcement of their rights in India. During the days of British Empire, in India, voluntary organizations flourished with an object to improve social welfare, literacy and relief projects. The history of NGO’s an be traced from Mahatma Gandhi’s mission to encourage village to be self-reliant and this lead to the creation of central Social Welfare Board in 1953, the establishment of National community development programme, the National Extension Services, and the three tier Panchayati Raj System in 1958, Subsequently, the Association for Voluntary Agencies for Rural Development (AVARD) was established as a consortium of major voluntary agencies. Role of NGO’S in Protection for the Environment in India: The NGO’s constitute a worldwide net work interacting with Governments and Internal intergovernmental organization in shaping international environmental policies; Creating awareness among the public on current environmental issues and solutions.

 Facilitating the participation of various categories of stakeholders in the discussion on environmental issues.  Conducting participatory rural appraisal.  Being involved in the protection of human rights to have a clean environment.  Protecting the natural resources and entrusting the equitable use of resources.  Data generation on natural resources, time line history of villages.  Analysis and monitoring of environmental quality.  Transferring information through newsletters, brochures, articles, audio visuals, etc.  Organizing seminars, lectures and group discussion for promotion of environmental awareness.  Helping the villages’ administrative officials in preparation, application and execution of projects on environmental protection. India has a number of NGOs that work in the field of environmental conservation and ecology. Here is a comprehensive list: 1. Assam Science Society: They impart environmental education and training through camps for teachers and students and conduct surveys on environment. Publications: Science books and journals 2. Bombay Natural History Society: Aims to disseminate knowledge of flora and fauna by means of lectures, field trips, literature and expeditions and, to study wildlife related problems and recommend management plans to conserve wildlife and its habitat. It conducts field research projects on bird migration and studies on the movement and population structure of Indian avifauna. Publications: Hornbill (4 issues in a year), other journals. 3. Centre for Environmental Education (CEE): They mainly aim to create environmental awareness in the communities, conduct widespread environmental education and training programmers through a very vast network. Publications and database, they have a vast range of publications – books, posters, educational packages, bibliographies and directories. There is also a large computerized database – the Environment Education bank, which has a collection of more than 800 environment concepts, about 2500 environment related activities and 100s of case studies. 4. Centre for Science and Environment (CSE): Involved in research, investigative and educational work in the field of pollution, forest, wildlife, land and water use. Publications: Down to Earth - a fortnightly environment magazine; Children’s magazine The Gobar Times; books; reports; computer database; audio visuals, etc.

5. CPR Environmental Education Centre (C.P. Ramaswami Aiyar Foundation): Promotes environmental awareness, to produce and disseminate basic educational and reference material on environment and to take up environmental projects. It works in the field of environmental education. Publications: Books on environment, posters, audio cassettes, web site on environment education. 6. Kerala Sastra Sahitiya Parishad: To preserve the environment, to provide alternative models for development and to popularize science among the people. They have worked in the field of eco-development, creating awareness about water and energy conservation and encouraging the use of non-conventional energy sources such as smokeless chulhas, etc. Publications: Quarterly publications and books. 7. Kalpavriksh: It is a citizen’s action group set up to inculcate understanding and concern on environmental issues, especially among the youth. It also aims to conduct research in environmental problems, to campaign on environmental issues and to evolve a holistic environmental perspective. It imparts environmental education in schools and colleges by forming a network of nature clubs, conducting bird watching expeditions and nature trails and has developed workbooks for the school level. Publications:  The Little Green Book.  Narmada – a campaign newsletter.  What is that bird (An illustrated guide) 8. Narmada Bachao Andalon: Set up in 1986 under the leadership of Medha Patkar. It aims mainly to educate those directly affected by large development projects, such as tribals, on the social and environmental impact of such projects. To protest against the construction of dams in the Narmada Valley in general; struggling towards a right to information and new environmentally sustainable water policy. To help the tribals get a substantial share of the government’s development schemes/services and to unable them to undertake development activities themselves. They mainly educate, mobilize and organize residents of the Narmada Valley on human rights and justice, alternative development policies, environmental issues related to big dams in general and the Narmada project in particular. They undertake surveys of the affected villages, protest against land and forest issues and government interference in this regard. They are fighting against displacement and disregard of the rights of the people. Publication: They come out with a bi-monthly publication the Narmada Samachar. 9. World Wide Fund for Nature: Its main aim is the promotion of conservation of nature and environmental protection as the basis for sustainable and equitable development. Publications: They have innumerable books, cassettes and data on various issues which can be got from their outlets in the cities. Some of them are as follows –  Nature News.  The Web of Life – a resource pack for children.  The Law Digest, etc.

10. Foundation for Revitalization of Local Health Traditions (FRLHT): FRLHT is a pioneering Knowledge institute with a vision to revitalize the Indian Medical Heritage. Its Mission is to demonstrate contemporary relevance of Indian Medical Heritage by designing and implementing innovative programme on a size and scale that will have societal impact. The three thrust areas of FRLHTs work are:  Conservation of natural resources used by Indian Systems of Medicine.  Demonstrate the contemporary relevance of traditional knowledge.  Revitalizations of social processes for transmission of heritage.

MANAGING NATURAL RESOURCES

Q. Explain the management of natural resources and importance of water & Land. Ans: INTRODUCTION: Natural resource management refers to the management of natural resources such as land, water, soil, plants and animals, with a particular focus on how management affects the quality of life for both present and future generations. Natural resource management deals with managing the way in which people and natural landscapes interact. It brings together land use planning, water management, biodiversity conservation, and the future sustainability of industries like agriculture, mining, tourism, fisheries and forestry. It recognizes that people and their livelihoods rely on the health and productivity of our landscapes, and their actions as stewards of the land play a critical role in maintaining this health and productivity. Natural resource management is also congruent with the concept of sustainable, a scientific principle that forms a basis for sustainable global land management and environmental governance to conserve and preserve natural resources. Natural resource management specifically focuses on a scientific and technical understanding of resources and ecology and the life-supporting capacity of those resources. Environmental management is also similar to natural resource management. In academic contexts, the sociology of natural resources is closely related to, but distinct from, natural resource management. WATER: Our Earth seems to be unique among the other known celestial bodies. It has water, which covers three-fourths of its surface and constitutes 60-70 wt % of the living world. Water regenerates and is redistributed through evaporation, making it seem endlessly renewable.

Actually, only 1% of the world's water is usable to us. About 97% is salty sea water, and 2% is frozen in glaciers and polar ice caps. Thus that 1% of the world's water supply is a precious commodity necessary for our survival. Dehydration (lack of water) will kill us faster than starvation (lack of food). Since the plants and animals we eat also depend on water, lack of it could cause both dehydration and starvation. The scenario gets worse. Water that looks drinkable can contain harmful elements, which could cause illness and death. IMPORTANCE OF WATER: Water is scarce. Yet, we take it for granted, we waste it, and we even pay too much to drink it from little plastic bottles. Today, nearly 1 billion people in the developing world don't have access to it. Clean, safe drinking water is scarce. It is the foundation of life, a basic human need. Yet today, all around the world, far too many people spend their entire day searching for it. The importance of access to clean water cannot be overstated. Without water life as it exists on our planet is impossible. The importance of water in sustaining a healthy biosphere on our planet can be summed up as follows:  Water is the very medium in which all biochemical reactions within a living organism and a large number of chemical reactions involving components of rocks, soil and pollutants of environment occur. It is the availability of water which determines the nature, composition and abundance of terrestrial life. Regions with very low rainfall become deserts. Lush green vegetation develops where water is in abundance.  Due to its high specific heat, changes in its temperature need large amounts of heat energy or its withdrawal as compared to other objects. This causes temperature differences between land and sea when heated by solar radiations and an active air circulation is maintained. The air circulation in turn determines precipitation pattern and climatic conditions of locality.  A high latent heat of vaporization causes a large amount of solar energy to be used up in evaporation of water. The solar heat could have, otherwise, raised global temperatures significantly.  Water vapors effectively absorb long wavelength radiations as carbon dioxide does. It acts like a greenhouse gas and plays an important role in regulating the temperature of earth's crust.  The unique property of expansion, when cooled below 4°C causes water to freeze from top downwards as aquatic bodies lose or gain most of their heat energy from the surface in contact with air above. Aquatic life stays safe under the ice-sheet.  It is because of extraordinary high surface tension that a considerable amount of water is retained in the soil due to capillary action. It is on this moisture that green plants thrive during dry periods.

 Water is an efficient means of transfer and transport of the material dissolved or suspended in it. Low lying regions of the world, river basins, land along sea coasts are, therefore, much more productive than upland areas. Water transports dissolved materials, silt, debris, nutrients and pollutants etc. from upland areas to low lying regions. Nearly 90% of world population is, therefore, concentrated in these areas.  Water plays an important role in weathering of all types of rocks and the formation of soil.  Water also plays an important role in reducing the atmospheric burden of particulates and gaseous pollutants. Water vapours condense around fine particulates and gaseous materials dissolve in water and the entire load of waste materials and gases is brought down with rains or snow. This cleans the atmospheric air.  Hydration - living creatures like humans need water to refresh them not just because for the sake of being refreshed, but also because this rehydrates the body, so it can continue working. Without water, exhaustion is considerably fast, and to a certain extent, death of dehydration. This also regulates the 70% water content of the body, which is just as vital for sustained living. This is second to air in humans' most important needs.  Cleansing - water is widely used in cleaning appliances, and other equipment, but this also serves as a cleaning agent in our body. This washes away dirt from our skin when we take a bath, and helps clean our digestive tract, especially food particles and fecal materials trapped in it. Without water, dirt inside our body will become poison, which will affect our entire system.  Cooling - drinking water also regulates body temperature. The coolness of water lowers the hot temperature of the organ systems and the blood, which is why it's advisable to drink lots of water, especially if you're sick, particularly fever.  Solvent - chemicals and medicines which aid humans won't be created without the universal solvent, water. Water is common and accessible to most places, and can dissolve most substances, making this the most practical solvent in the world. Water really is the universal solvent.  Marine Life support system - this also serves as habitat for marine creatures, making water a pivotal aspect to the balance of the ecosystem. Supposing the Earth is deprived of all water, the marine life won't have oxygen to sustain them, for their gills won't suit dry land, and therefore die, making a commotion to the natural food chain.  Tourism - open beach resorts, swimming pools, and other similar tourist attractions are all thanks to water. This provides additional income to people and to the government's economy as well, making water not just essential physiologically, but economically and financially too. LAND MANAGEMENT:

In order to have a sustainable environment, understanding and using appropriate management strategies is important. In terms of understanding, Young emphasizes some important points of land management:  Comprehending the processes of nature including ecosystem, water, soils.  Using appropriate and adapting management systems in local situations.  Cooperation between scientists who have knowledge and resources and local people who have knowledge and skills. The ecological principles relate to time, place, species, disturbance and the landscape and they interact in many ways. It is suggested that land managers could follow these guidelines:  Examine impacts of local decisions in a regional context, and the effects on natural resources.  Plan for long-term change and unexpected events.  Preserve rare landscape elements and associated species.  Avoid land uses that deplete natural resources.  Retain large contiguous or connected areas that contain critical habitats.  Minimize the introduction and spread of non-native species.  Avoid or compensate for the effects of development on ecological processes.  Implement land-use and land-management practices that are compatible with the natural potential of the area. IMPORTANCE OF LAND:  Land – natural resources such as iron ore, gold, diamonds, oil, etc.  Labor – human resources such as wage-earning workers.  Capital – plants and equipment used in the production of final goods, such as assembly lines, trucks, heavy duty machinery, factories, etc.  Entrepreneurship – the marshaller of resources, the person or group that marshals resources in the production of final goods (Bill Gates, Steve Jobbs, Henry Ford, etc.)  Carry out projects, or build plants.

GLOBAL WARMING Q. What do you mean by global warming. explain its causes & consequences Ans. INTRODUCTION: Global Warming is the increase of Earth's average surface temperature due to effect of greenhouse gases, such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from Earth. This is a type of greenhouse effect. Global warming is when the earth heats up (the temperature rises). It happens when greenhouse gases (carbon dioxide, water vapor, nitrous oxide, and methane) trap heat and light from the sun in the earth’s atmosphere, which increases the temperature. This hurts many people, animals, and plants. Many cannot take the change, so they die. Greenhouse effect The greenhouse effect is when the temperature rises because the sun’s heat and light is trapped in the earth’s atmosphere. This is like when heat is trapped in a car. On a very hot day, the car gets hotter when it is out in the parking lot. This is because the heat and light from the sun can get into the car, by going through the windows, but it can’t get back out. This is what the greenhouse effect does to the earth. The heat and light can get through the atmosphere, but it can’t get out. As a result, the temperature rises. The sun’s heat can get into the car through the windows but is then trapped. This makes whatever the place might be, a greenhouse, a car, a building, or the earth’s atmosphere, hotter. This diagram shows the heat coming into a car as visible light (light you can see) and infrared light (heat). Once the light is inside the car, it is trapped and the heat builds up, just like it does in the earth’s atmosphere. Sometimes the temperature can change in a way that helps us. The greenhouse effect makes the earth appropriate for people to live on. Without it, the earth would be freezing, or on the other hand it would be burning hot. It would be freezing at night because the sun would be down. We would not get the sun’s heat and light to make the night somewhat warm. During the day, especially during the summer, it would be burning because the sun would be up with no atmosphere to filter it, so people, plants, and animals would be exposed to all the light and heat. Although the greenhouse effect makes the earth able to have people living on it, if there gets to be too many gases, the earth can get unusually warmer, and many plants, animals, and people

will die. They would die because there would be less food (plants like corn, wheat, and other vegetables and fruits). This would happen because the plants would not be able to take the heat. This would cause us to have less food to eat, but it would also limit the food that animals have. With less food, like grass, for the animals that we need to survive (like cows) we would even have less food. Gradually, people, plants, and animals would all die of hunger. The most significant greenhouse gas is actually water vapor, not something produced directly by humankind in significant amounts. However, even slight increases in atmospheric levels of carbon dioxide (CO2) can cause a substantial increase in temperature. Secondly, CO2 tends to remain in the atmosphere for a very long time (time scales in the hundreds of years). Water vapor, on the other hand, can easily condense or evaporate, depending on local conditions. Water vapor levels therefore tend to adjust quickly to the prevailing conditions, such that the energy flows from the Sun and re-radiation from the Earth achieve a balance. CO2 tends to remain fairly constant and therefore behave as a controlling factor, rather than a reacting factor. More CO2 means that the balance occurs at higher temperatures and water vapor levels. This enormous input of CO2 is causing the atmospheric levels of CO2 to rise dramatically. The following graph shows the CO2 levels over the past 160 thousand years (the upper curve, with units indicated on the right hand side of the graph). The current level, and projected increase over the next hundred years if we do not curb emissions, are also shown (the part of the curve which goes way up high, to the right of the current level, is the projected CO2 rise). The projected increase in CO2 is very startling and disturbing. Changes in the Earth's average surface temperature are also shown (the lower curve, with units on the left). Note that it parallels the CO2 level curve very well. What causes global warming?  Many things cause global warming. One thing that causes global warming is electrical pollution. Electricity causes pollution in many ways, some worse than others. In most cases, fossil fuels are burned to create electricity. Fossil fuels are made of dead plants and animals. Some examples of fossil fuels are oil and petroleum. Many pollutants (chemicals that pollute the air, water, and land) are sent into the air when fossil fuels are burned. Some of these chemicals are called greenhouse gasses. The growing need of energy is one of the most significant causes to increase the temperature of the earth. Fossil fuels (petroleum, oil, natural gas, etc.) are burned to meet the energy needs which emit hazardous gases like carbon dioxide. These fuels are made up of dead leaves and wood and have high carbon dioxide component. United States avail 38 per cent of its electricity requirement from the petroleum. There are alternate environment friendly resources which wait for proper implementation.  Another factor contributing in the green house effect is the excessive use of electricity. All of our action involving electricity like switching on lights, turning on television, washing, using microwave oven, switching on hair dryer, driving car, using air

conditioner, playing video games, etc. are responsible for increasing the green house gases in the atmosphere. We use these sources of energy much more than the sources that give off less pollution. Petroleum, one of the sources of energy, is used a lot. It is used for transportation, making electricity, and making many other things. Although this source of energy gives off a lot of pollution, it is used for 38% of the United States’ energy.  When you do these things, you are causing more greenhouse gasses to be sent into the air. Greenhouse gasses are sent into the air because creating the electricity you use to do these things causes pollution. If you think of how many times a day you do these things, it’s a lot. You even have to add in how many other people do these things! That turns out to be a lot of pollutants going into the air a day because of people like us using electricity. The least amount of electricity you use, the better.  Improper methods to deal with the wastage also affect the earth climate. Heaps of garbage is burned on daily bases which add excessive carbon dioxide and other harmful gases into the atmosphere and thus increase the chances of more heat trapping. When we throw our garbage away, the garbage goes to landfills. Landfills are those big hills that you go by on an expressway that stink. They are full of garbage. The garbage is then sometimes burned. This sends an enormous amount of greenhouse gasses into the air and makes global warming worse.  Deforestation Cutting trees unnecessarily also affects the system. Trees are the best

consumer of carbon dioxide and with less number of trees the rate of consumption will automatically decrease. With the growing population of human beings, the amount of carbon dioxide which they breathe out increase. With no trees to absorb the increasing carbon dioxide, it will be one day impossible for the living beings to take breathe on this earth. Global warming worse is when people cut down trees. Trees and other plants collect carbon dioxide (CO2), which is a greenhouse gas. Carbon dioxide is the air that our body lets out when we breathe. With fewer trees, it is harder for people to breathe because there is more CO2 in the air, and we don’t breathe CO2, we breathe oxygen. Plants collect the CO2 that we breathe out, and they give back oxygen that we breathe in. With fewer trees and other plants, such as algae, there is less air for us, and more greenhouse gases are sent into the air. This means that it is very important to protect our trees to stop the greenhouse effect, and also so we can breathe and live.  This gas, CO2, collects light and heat (radiant energy), produced by the sun, and this makes the earth warmer. The heat and light from the sun is produced in the center of the sun. (The sun has layers just like the earth.) The radiant energy reaches the earth’s atmosphere. As a result of this process we get light and heat. When you pollute, you send chemicals into the air that destroy our atmosphere, so more heat and light cannot escape from the earth’s atmosphere.  Burning natural gas, coal and oil -including gasoline for automobile engines-raises the level of carbon dioxide in the atmosphere.

 Some farming practices and land-use changes increase the levels of methane and nitrous oxide.  Population growth is another factor in global warming, because as more people use fossil fuels for heat, transportation and manufacturing the level of greenhouse gases continues to increase. As more farming occurs to feed millions of new people, more greenhouse gases enter the atmosphere.

Impacts of Global Warming Global warming is already underway with consequences that must be faced today as well as tomorrow. Evidence of changes to the Earth's physical, chemical and biological processes is now evident on every continent. To fully appreciate the urgency of climate change, it's important to understand the ways it affects society and the natural environment. Sea levels are rising and glaciers are shrinking; record high temperatures and severe rainstorms and droughts are becoming increasingly common. Changes in temperatures and rainfall patterns alter plant and animal behavior and have significant implications for humans. In this section, explore the connections between the climate data and the changes happening around you—and those you can expect to see in the future—in all parts of the globe, including your own backyard. Not only are global warming-induced changes currently underway, but scientists also expect additional effects on human society and natural environments around the world. Some further warming is already unavoidable due to past heat-trapping emissions; unless we aggressively reduce today's emissions, scientist’s project extra warming and thus additional impacts. Following major groups on which global warming is effecting:  People  Freshwater  Oceans  Ecosystems  Temperature Each of these major groupings, in turn, is divided into specific categories that describe more.

 Health As our climate changes, the risk of injury, illness, and death from the resulting heat waves, wildfires, intense storms, and floods rise.

 Extreme heat. If high temperatures, especially when combined with high relative

humidity, persist for several days (heat waves), and if nighttime temperatures do not drop, extreme heat can be a killer. Of all climate-related projections by scientists, rising temperatures are the most robust. Higher temperatures are also the most influenced by human behavior.  Rising Seas- inundation of fresh water marshlands (the everglades), low-lying cities, and islands with seawater.  Changes in rainfall patterns - droughts and fires in some areas, flooding in other areas. See the section above on the recent droughts, for example!  The effects of Global Warming can already be seenThe IPCC's Third Assessment Report finds that in the last 40 years, the global average sea level has risen, ocean heat content has increased, and snow cover and ice extent have decreased, which threatens to inundate low-lying island nations and coastal regions throughout the world  Effects of global warming already being felt on plants and animals worldwideGlobal Warming Effects that will happen in the future  Global warming will have serious impacts on the environment and on society. Higher temperatures will cause a melting of ice in Greenland and Antarctica.  The speed at which global warming is expected to occur in the 21st century is faster than most plant and animal species will be able to cope with. Some will adapt but others will suffer and may become extinct. Global warming will affect agriculture. New crops will be able to be grown in areas that are currently too cold to support them. However, more pests and diseases may offset any benefits higher temperatures may have. Water resources will also be affected. Effects of Global Warming on Earth in Future  Effects of Global Warming felt on plants and animalsGlobal warming is having a significant impact on hundreds of plant and animal species around the world -- although the most dramatic effects may not be felt for decades, according to a new study in the journal Nature.  OZONE LAYER DEPLETION The ozone layer protects the Earth from the ultraviolet rays sent down by the sun. If the ozone layer is depleted by human action, the effects on the planet could be catastrophic.Ozone is a bluish gas that is formed by three atoms of oxygen. The form of oxygen that humans breathe in consists of two oxygen atoms, O2.

When found on the surface of the planet, ozone is considered a dangerous pollutant and is one substance responsible for producing the greenhouse effect.

 Increased likelihood of extreme events- such as flooding, hurricanes, etc.  Melting of the ice caps - loss of habitat near the poles. Polar bears are now thought to be greatly endangered by the shortening of their feeding season due to dwindling ice packs.  Melting glaciers - significant melting of old glaciers is already observed.  Widespread vanishing of animal populations.  Spread of disease -migration of diseases such as malaria to new, now warmer, regions.  Bleaching of Coral Reefs due to warming seas and acidification due to carbonic acid formation - Coral reefs are underwater structures made from calcium carbonate secreted by corals.Coral reefs are colonies of tiny animals found in marine waters One

third of coral reefs now appear to have been severely damaged by warming seas.  Loss of Plankton due to warming seas - The enormous (900 mile long) Aleution island ecosystems of orcas (killer whales), sea lions, sea otters, sea urchins, kelp beds, and fish populations, appears to have collapsed due to loss of plankton, leading to loss of sea lions, leading orcas to eat too many sea otters, leading to urchin explosions, leading to loss of kelp beds and their associated fish populations.

Q. Define Carbon Credits. Explain in detail. Ans. INTRODUCTION: The concept of carbon credits came into existence as a result of increasing awareness of the need for controlling emissions. When a company or individual actively participates in carbon projects, it is possible to earn carbon credits. A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world.

There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. Buyers and sellers can also use an exchange platform to trade, such as the Carbon Trade Exchange, which is like a stock exchange for carbon credits. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Definitions “A certificate showing that a government or company has paid to have a certain amount of carbon dioxide removed from the environment”. The Environment Protection Authority of Victoria defines a carbon credit as a “generic term to assign a value to a reduction or offset of greenhouse gas emissions. Usually equivalent to one tonne of carbon dioxide equivalent (CO2-e).” “Carbon credit is permit that allows the holder to emit one ton of carbon dioxide which can be traded in the international market at their current market price”. Background The burning of fossil fuels is a major source of greenhouse gas emissions, especially for power, cement, steel, textile, fertilizer and many other industries which rely on fossil fuels (coal, electricity derived from coal, natural gas and oil). The major greenhouse gases emitted by these industries are carbon dioxide, methane, nitrous oxide, hydro fluorocarbons (HFCs), etc., all of which increase the atmosphere's ability to trap infrared energy and thus affect the climate. The concept of carbon credits came into existence as a result of increasing awareness of the need for controlling emissions. The IPCC (Intergovernmental Panel on Climate Change) has observed that: Policies that provide a real or implicit price of carbon could create incentives for producers and consumers to significantly invest in low-GHG products, technologies and processes. Such policies could include economic instruments, government funding and regulation, while noting that a tradable permit system is one of the policy instruments that has been shown to be environmentally effective in the industrial sector, as long as there are reasonable levels of predictability over the initial allocation mechanism and long-term price. The mechanism was formalized in the Kyoto Protocol, an international agreement between more than 170 countries, and the market mechanisms were agreed through the subsequent Marrakesh Accords. The mechanism adopted was similar to the successful US Acid Rain Program to reduce some industrial pollutants.

Kyoto's 'Flexible mechanisms' A tradable credit can be an emissions allowance or an assigned amount unit which was originally allocated or auctioned by the national administrators of a Kyoto-compliant cap-and-trade scheme, or it can be an offset of emissions. Such offsetting and mitigating activities can occur in any developing country which has ratified the Kyoto Protocol, and has a national agreement in place to validate its carbon project through one of the UNFCCC's approved mechanisms. Once approved, these units are termed Certified Emission Reductions, or CERs. The Protocol allows these projects to be constructed and credited in advance of the Kyoto trading period. The Kyoto Protocol provides for three mechanisms that enable countries or operators in developed countries to acquire greenhouse gas reduction credits  Under Joint Implementation (JI) a developed country with relatively high costs of

domestic greenhouse reduction would set up a project in another developed country.  Under the Clean Development Mechanism (CDM) a developed country can 'sponsor' a

greenhouse gas reduction project in a developing country where the cost of greenhouse gas reduction project activities is usually much lower, but the atmospheric effect is globally equivalent. The developed country would be given credits for meeting its emission reduction targets, while the developing country would receive the capital investment and clean technology or beneficial change in land use.  Under International Emissions Trading (IET) countries can trade in the international carbon credit market to cover their shortfall in Assigned amount units. Countries with surplus units can sell them to countries that are exceeding their emission targets under Annex B of the Kyoto Protocol. These carbon projects can be created by a national government or by an operator within the country. In reality, most of the transactions are not performed by national governments directly, but by operators who have been set quotas by their country.

What are Carbon Credits? A carbon credit (often called a carbon offset) is a financial instrument that represents a tonne of CO2 (carbon dioxide) or CO2e (carbon dioxide equivalent gases) removed or reduced from the atmosphere from an emission reduction project, which can be used, by governments, industry or private individuals to offset damaging carbon emissions that they are generating. How are Carbon Credits used? Carbon credits are associated with either removing existing CO 2 or CO2e emissions from the atmosphere in the case of carbon sequestration from forests and planting of trees or the reduction of future CO2 or CO2e emissions from renewable energy and energy efficiency projects that displace fossil fuel power generation production or industrial processes.

Where do Carbon Credits come from? Carbon credits originate from a range of emission reduction activities associated with the removal of existing emissions from the atmosphere and the reduction of future emissions. These are commonly called "methodologies". Afforestation and reforestation activities are a key means by which existing emissions can be removed from the atmosphere and carbon credits created while construction of a wind farm rather than a coal-fired power station may create carbon credits through reducing future emissions. Carbon credits originated through these emission reduction activities can be created under a variety of voluntary and compliance market mechanisms, schemes and standards. Some of these instruments have been established so countries can comply with their mandatory Kyoto targets and others provide avenues for voluntary offsetting purposes. Some schemes around the world clearly deliver more environmental benefits than others. Developing parts of the world produce the most carbon credits by far, often these locations are essentially considered environmental 'hot spots' as they lack the appropriate laws, regulations and funding that usually exist in developed regions. Due to these reasons they have the most room for improvement and therefore offer the most environmental benefits if worthy improvements are introduced.

POLLUTION Q. What are the causes of environment pollution and what are the measures to prevent and control pollution? Ans: Pollution is the introduction of contaminants into an environment that causes instability, disorder, harm or discomfort to the ecosystem i.e. physical systems or living organisms. Pollution can take the form of chemical substances or energy, such as noise, heat, or light. Pollutants, the elements of pollution, can be foreign substances or energies, or naturally occurring; when naturally occurring, they are considered contaminants when they exceed natural levels. The measures for prevention and control of pollution include the following:  Adoption of cost effective cleaner technologies  Spreading awareness messages through programs for the prospective and existing entrepreneurs on usage of cleaner technologies and pollution control  Waste minimization for improvement of productivity and creation of Waste minimization circle

 Assistance for sustainable development, to be facilitated by the Government of India through fiscal incentives, technology, trainings etc  An additional system of taxation to be introduced based on concentration of waste  Encourage industry to regard 'pollution' as an economic problem  To decide the cost of water, power, fuel, etc through market instruments  Tax exemption on waste selling, resource recovery and reuse to be introduced  Incentives may be introduced on waste selling, resource recovery, reuse, etc  Allowance for capital investment and cleaner technology from foreign and private players  Simplification of Environmental clearance procedures for the industries located in industrial estates  Encourage Common Effluent Treatment Plant  Encourage common captive power plant and steam generation unit  During relocation of units detailed action plan to be prepared based on  Environmental risk assessment  Change of technology  Waste minimization  Small industries to get assistance from government  Further Research and development of cleaner technologies is proposed Measures that could be taken by individuals to check pollution:  Use unleaded gasoline in cars  Keep vehicles properly maintained to keep it in good running condition to avoid smoke emissions  Never use open fires to dispose of wastes  Have a proper waste disposal system especially for toxic wastes  Take very good care of pets and their wastes.

 Never throw, run or drain or dispose into the water, air, or land any substance in solid, liquid or gaseous form that shall cause pollution.  Do not cause loud noises and unwanted sounds to avoid noise pollution.  Do not litter in public places. Anti-litter campaigns can educate the populace. In India the following Acts and Rules governs the various Pollution Control Measures  The Water (Prevention and Control of Pollution) Act, 1974  The Water Prevention and Control of Pollution Cess Act, 1977  The Air (Prevention and Control of Pollution)Act, 1981  The Environment (Protection) Act, 1986  The Batteries (Management and Handling) Rules, 2001  The Municipal Solid Wastes (Management and Handling) Rules, 2000  The Recycled Plastics Manufacture and Usage Rules, 1999  The Rules for the Manufacture, Use, Import and Export and Storage of Hazardous microorganisms  Genetically engineered organisms or cells, 1989  The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989  The Hazardous Wastes( Management and Handling ) Rules, 1989  The Bio-Medical Waste ( Management and Handling ) Rules, 1998  Dumping and disposal of fly ash discharged from coal or lignite based thermal power plants on land, 1999  Noise Pollution( Regulation and Control ) Rules, 2000  The Ozone Depleting Substances ( Regulation and Control )Rules, 2000  The 2-T Oil ( Regulation of Supply and Distribution) Order, 1998  The Public Liability Insurance Act, 1991  The National Environment Appellate Authority Act, 1997  The National Environment Tribunal Act, 1995

 Forest (Conservation) Act, 1980  The Biological Diversity Act, 2002

DISASTER MANAGEMENT Q. What is mean by Disaster management & explain it’s phases & features. Ans: The word Disaster is from a French word Disaster meaning bad or evil star. However this is a very narrow conception of disaster and in our context, any disaster means a situation in which there is a sudden disruption of normalcy within society causing widespread damage to life and property. Disaster: A serious disruption of the functioning of a society with widespread human, material, or environmental losses which can exceed the ability of affected community or area to cope using its own resources. "Natural" disasters involve largely geological and climatic hazards. In human-made disasters, the principal direct causes are identifiable human actions. A disaster can be either natural [rain, flood, cyclone, storm, landslides, earthquake, volcanoes] or manmade [war including biological, arson, sabotage, riots, accident (train, air, ship), industrial accidents, fires (forest fires), bomb explosions, nuclear explosions and The discussion here is confined to the natural disasters. Before Independence, droughts and famines (A famine is a widespread scarcity of food, caused by several factors including crop failure, population unbalance, or government policies.) were the biggest killers in India. The situation has changed due to a combination of factors like irrigation development, food security measures. Floods, cyclones, droughts, landslides, avalanches and earthquakes are some of the major natural disasters that repeatedly and increasingly affect the country. The need for having an effective and efficient Disaster Management mechanism is not debatable for the reason that it is essential to meet situations arising out of natural disasters, accidents affecting large number, bomb blasts, riots, floods as well as conditions during war times. The Disaster Management mechanism is needed to take care of the following: A. B. C.

Saving human life and providing medical help to the victims. Controlling/ preventing further damage to the property. Restoring normal living conditions in the affected area.

2. Many times situations arising out of earthquakes, floods, fires, train accidents, bomb explosions or enemy attacks on civilian population, cannot be handled effectively by Government machinery on account of enormity of damage and as such public participation becomes essential. It has also been seen that large number of people reach the spot and try to help the victims but they are neither trained nor well equipped to render meaningful assistance and as

such add to the confusion. Thus, there is a need to have trained citizens who may give effective support to the Government machinery and supplement its efforts in the hour of need. Mitigation refers to activities which actually eliminate or reduce the vulnerability or chance of occurrence or the effects of a disaster. Mitigation phase begins with conducting hazard identification and vulnerability analysis which are essential to the planning of all other phases. Hazard identification and vulnerability analysis is a two step process. First the hazard is identified which has the potential of affecting the population. Secondly, how people, property and structures will be affected by the disastrous event. Preparedness is a state of being ready to react promptly and effectively in the event of an emergency. Being prepared means that a plan of action exists for an emergency so that it is clear as to what to do before the emergency occurs. Preparedness measures to be undertaken depends upon the analysis of hazard severity and vulnerability, which is also the basis for deciding mitigation strategy. In some cases, such as a flood or hurricane, an early warning gives several hours to act. However, often no prior warning of an impending emergency, such as with earthquakes, tornadoes, explosions, or major fires is possible. Preparedness for any emergency, especially those, which strike without notice, requires a plan. It is essential to identify the resources available, and ways to utilize them. It must also be reasonably certain that the plan will work in an emergency situation.

Some natural disaster are Tsunami, Flood, Earthquake, Hurricane, Wildfire, Volcanic Eruption, Landslide Drought, Famine, Environmental Degradation, Desertification, Deforestation, Pest Infestation System Failure/Accident (wreck, derailment), Spillage, Explosion, Fire Terrorism, Insurgency, Armed Aggression This usually involves four phases : 1. Prevention 2. Preparedness 3. Response 4. Recovery

The following guide to producing a disaster plan outlines recommended action in all four phases, but prevention is the best protection against disaster, natural or man-made. Phase 1 : Prevention Identify and minimize the risks posed by the building, its equipment and fittings, and the natural hazards of the area. The events which are leading to the disaster are occurring, but often the fact that a disaster will occur is not obvious

 Carry out a building inspection and alter factors which constitute a potential hazard.  Establish routine housekeeping and maintenance measures to withstand disaster in buildings and surrounding areas.  Install automatic fire detection and extinguishing systems, and water-sensing alarms.  Take special precautions during unusual periods of increased risk, such as building renovation.  Make special arrangements to ensure the safety of library or archival material when exhibited.  Provide security copies of vital records such as collection inventories, and store these off-site.  Protect computers and data through provision of uninterrupted power supply.  Have comprehensive insurance for the library or archives, its contents, the cost of salvage operations, and potential replacement, re-binding and restoration of damaged materials. Phase 2 : Preparedness Getting ready to cope. Preparedness is a state of being ready to react promptly and effectively

in the event of an emergency. Being prepared means that a plan of action exists for an emergency so that it is clear as to what to do before the emergency occurs. Preparedness measures to be undertaken depends upon the analysis of hazard severity and vulnerability, which is also the basis for deciding mitigation strategy. In some cases, such as a flood or hurricane, an early warning gives several hours to act. However, often no prior warning of an impending emergency, such as with earthquakes, tornadoes, explosions, or major fires is possible. Preparedness for any emergency, especially those, which strike without notice, requires a plan. It is essential to identify the resources available, and ways to utilize them. It must also be reasonably certain that the plan will work in an emergency situation. Phase 3 : Response When disaster strikes. The occurrence of the event. May be short or prolonged. Often little can be done at this point to prevent the disaster from occurring  Follow established emergency procedures for raising the alarm, evacuating personnel and making the disaster site safe.  Contact the leader of the disaster response team to direct and brief the trained salvage personnel.  When permission is given to re-enter the site, make a preliminary assessment of the extent of the damage, and the equipment, supplies and services required.  Stabilize the environment to prevent the growth of mould.  Photograph damaged materials for insurance claim purposes.  Set up an area for recording and packing material which requires freezing, and an

area for air-drying slightly wet material and other minor treatment.  Transport water-damaged items to the nearest available freezing facility. Phase 4: Recovery Getting back to normal. Returning the population to normal. May take prolonged periods of time.

 Establish a programme to restore both the disaster site and the damaged materials to a stable and usable condition.  Determine priorities for restoration work and seek the advice of a conservator as to the best methods and options, and obtain cost estimates.  Develop a phased conservation programme where large quantities of material are involved.  Discard items not worth retaining, and replace or re-bind items not justifying special conservation treatment.  Contact insurers.  Clean and rehabilitate the disaster site.  Replace treated material in the refurbished site.  Analyze the disaster and improve the plan in the light of experience. – Be prepared for any type of disaster. Contact and consult other libraries or archives and library or archives associations to share information and experience, and with a view to regional cooperation. – Take advantage of educational sessions, particularly disaster planning workshops and preparedness exercises. • •

Disasters are considered low probability but high impact events Generally, they are defined by a overwhelming of the emergency department resources: the number of patients presenting to the department exceeds its capabilities.

•

Note that lack of supplies is rarely a problem in disasters taking place in populated regions.

DISASTER Disaster is a sudden, calamitous event bringing great damage, loss, destruction and devastation to life and property. WHO defines Disaster as "any occurrence, that causes damage, ecological disruption, loss of human life, deterioration of health and health services, on a scale sufficient to warrant an extraordinary response from outside the affected community or area” The damage caused by disasters is immeasurable and varies with the geographical location, climate and the type of the earth surface/degree of vulnerability. This influences the mental, socio-economic, political and cultural state of the affected area. Generally, disaster has the

following effects in the concerned areas: 1. It completely disrupts the normal day to day life. 2. It negatively influences the emergency systems. 3. Normal needs and processes like flood, shelter, health, etc. are affected and deteriorate depending on the intensity and severity of the disaster. It may also be termed as “a serious disruption of the functioning of society, causing widespread human, material or environmental losses which exceed the ability of the affected society to cope using its own resources” Thus, a disaster may have the following main features:      

Unpredictability Unfamiliarity Speed Urgency Uncertainty Threat

DISASTER MANAGEMENT AND MITIGATION STRATEGIES Disaster Management is the discipline of dealing with and avoiding risks. It is a discipline that involves preparing for disaster before it occurs, disaster response (e.g. emergency evacuation, quarantine, mass decontamination, etc.), as well as supporting, and rebuilding society after natural or human-made disasters have occurred. In general, any disaster management is the continuous process by which all individuals, groups, and communities manage hazards in an effort to avoid or ameliorate the impact of disasters resulting from the hazard. Disaster Mitigation is efforts, attempt to prevent hazards from developing into disasters altogether, or to reduce the effects of disasters when they occur. The mitigation phase differs from the other phases because it focuses on long-term measures for reducing or eliminating risk. The implementation of mitigation strategies can be considered as part of the recovery process if applied after a disaster occurs. COMPONENTS OF DISASTER Risk is a measure of the expected losses due to a hazardous event of a particular magnitude occurring in a given area over a specific time period. Risk is a function of the probability of particular occurrences and the losses each would cause. The level of risk depends on:  Nature of the Hazard.  Vulnerability of the elements which are affected.  Economic value of those elements.

Vulnerability is defined as “the extent to which a community, structure, service, and/or geographic area is likely to be damaged or disrupted by the impact of particular hazard, on account of their nature, construction and proximity to hazardous terrain or a disaster prone area” Hazards are defined as “Phenomena that pose a threat to people, structures, or economic assets and which may cause a disaster. They could be either manmade or naturally occurring in our environment.” The extent of damage in a disaster depends on: 1. The impact, intensity and characteristics of the phenomenon and 2. How people, environment and infrastructures are affected by that phenomenon Q. What are the Types/causes & Consequences/Impact of Disaster? Ans. Natural disasters occur when forces of nature damage the environment and manmade structures. If people live in the area, natural disasters can cause a great deal of human suffering. As a result of disasters, people may be injured or killed, or may lose their homes and possessions. The impact is so great that the affected community often must depend on outside help in order to cope with the results (Noji, Gunn and William). Examples of natural forces that can cause widespread human suffering include earthquakes, tornadoes, hurricanes, floods, volcanic eruptions, wilderness fires, and extreme hot or cold temperatures. Between 1975 and 1996, natural disasters worldwide cost 3 million lives and affected at least 800 million others (Noji). In the United States, damage caused by natural hazards costs close to one billion dollars per week. Generally, disasters are of two types – Natural and Manmade. Based on the devastation, these are further classified into major/minor natural disaster and major/minor manmade disasters. some of the disasters are listed below:

EARTHQUAKES: An earthquake is the result of a sudden release of energy in the Earth's crust that creates seismic. At the Earth's surface, earthquakes manifest themselves by vibration, shaking and sometimes displacement of the ground. The vibrations may vary in magnitude. Earthquakes are caused mostly by slippage within geological faults, but also by other events such as volcanic activity, landslides, mine blasts, and nuclear tests. The underground point of origin of the earthquake is called the focus. The point directly above the focus on the surface is called the epicenter. Earthquakes by themselves rarely kill people or wildlife. It is usually the secondary events that they trigger, such as building collapse, fires, tsunamis (seismic sea waves) and volcanoes that are actually the human disaster. Many of these could possibly be avoided by better construction, safety systems, early warning and planning. VOLCANIC ERUPTIONS: Volcanoes can cause widespread destruction and consequent disaster in several ways. The effects include the volcanic eruption itself that may cause harm following the explosion of the volcano or the fall of rock. Second, lava may be produced during the eruption of a volcano. As it leaves the volcano, the lava destroys many buildings and plants it encounters. Third, volcanic ash generally meaning the cooled ash - may form a cloud, and settle thickly in nearby locations. When mixed with water this forms a concrete-like material. In sufficient quantity ash may cause roofs to collapse under its weight but even small quantities will harm humans if inhaled. Since the ash has the consistency of ground glass it causes abrasion damage to moving parts such as engines. The main killer of humans in the immediate surroundings of a volcanic eruption is the pyroclastic flows, which consist of a cloud of hot volcanic ash which builds up in the air above the volcano and rushes down the slopes when the eruption no longer supports the lifting of the gases. It is believed that Pompeii was destroyed by a pyroclastic flow. A lahar is a

volcanic mudflow or landslide. The 1953 Tangiwai disaster was caused by a lahar, as was the 1985 Armero tragedy in which the town of Armero was buried and an estimated 23,000 people were killed. FLOODS: A flood is an overflow of an expanse of water that submerges land. The EU Floods directive defines a flood as a temporary covering by water of land not normally covered by water. In the sense of "flowing water", the word may also be applied to the inflow of the tide. Flooding may result from the volume of water within a body of water, such as a river or lake, which overflows or breaks levees, with the result that some of the water escapes its usual boundaries. While the size of a lake or other body of water will vary with seasonal changes in precipitation and snow melt, it is not a significant flood unless the water covers land used by man like a village, city or other inhabited area, roads, expanses of farmland, etc. LIMNIC ERUPTIONS: A limnic eruption occurs when a gas, usually CO2, suddenly erupts from deep lake water, posing the threat of suffocating wildlife, livestock and humans. Such an eruption may also cause tsunamis in the lake as the rising gas displaces water. Scientists believe landslides, volcanic activity, or explosions can trigger such an eruption. To date, only two limnic eruptions have been observed and recorded: 1984, in Cameroon, a limnic eruption in Lake Monoun caused the deaths of 37 nearby residents. TSUNAMI: Tsunamis can be caused by undersea earthquakes as the one caused by the 2004 Indian Ocean Earthquake, or by landslides such as the one which occurred at Lituya Bay, Alaska. • •

The 2004 Indian Ocean Earthquake created the Boxing Day Tsunami. On March 11, 2011, a tsunami occurred near Fukushima, Japan and spread through the Pacific.

BLIZZARDS: Blizzards are severe winter storms characterized by heavy snow and strong winds. When high winds stir up snow that has already fallen, it is known as a ground blizzard. Blizzards can impact local economic activities, especially in regions where snowfall is rare. CYCLONIC STORMS: Cyclone, tropical cyclone, hurricane, and typhoon are different names for the same phenomenon a cyclonic storm system that forms over the oceans. The deadliest hurricane ever was the 1970 Bhola cyclone; the deadliest Atlantic hurricane was the Great Hurricane of 1780 which devastated Martinique, St. Eustatius and Barbados. Another notable hurricane is Hurricane Katrina which devastated the Gulf Coast of the United States in 2005.

DROUGHTS: Drought is unusual dryness of soil, resulting in crop failure and shortage of water for other uses, caused by significantly lower rainfall than average over a prolonged period. Hot dry winds, high temperatures and consequent evaporation of moisture from the ground can contribute to conditions of drought. HAILSTORMS: Hailstorms are falls of rain drops that arrive as ice, rather than melting before they hit the ground. HEAT WAVES: A heat wave is a period of unusually and excessively hot weather. The worst heat wave in recent history was the European Heat Wave of 2003. TORNADOES: A tornado is a violent, dangerous, rotating column of air that is in contact with both the surface of the earth and a cumulonimbus cloud or, in rare cases, the base of a cumulus cloud. It is also referred to as a twister or a cyclone, although the word cyclone is used in meteorology in a wider sense, to refer to any closed low pressure circulation. Tornadoes come in many shapes and sizes, but are typically in the form of a visible condensation funnel, whose narrow end touches the earth and is often encircled by a cloud of debris and dust. Most tornadoes have wind speeds less than 110 miles per hour (177 km/h), are approximately 250 feet (80 m) across, and travel a few miles (several kilometers) before dissipating. WILDFIRES: Wildfires are large fires which often start in wild land areas. Common causes include lightning and drought but wildfires may also be started by human negligence or arson. They can spread to populated areas and can thus be a threat to humans and property, as well as wildlife. IMPACTS/CONSEQUENCES OF DISASTER Disaster impacts comprise physical, individual and social/community, environment impact. The physical impacts of disasters include casualties (deaths and injuries) and property damage, and both vary substantially across hazard agents. The physical impacts of a disaster are usually the most obvious, easily measured, and first reported by the news media. Social impacts, which include psychosocial, demographic, economic, and political impacts, can develop over a long period of time and can be difficult to assess when they occur. Despite the difficulty in measuring these social impacts, it is nonetheless important to monitor them, and even to predict them if possible, because they can cause significant problems for the long-term functioning of specific types of households and businesses in an affected community. A better understanding of disasters’ social impacts can provide a basis for preimpact prediction and the development of contingency plans to prevent adverse consequences from occurring.

PHYSICAL IMPACTS Casualties: There often are difficulties in determining how many of the deaths and injuries are “caused by” a disaster. In some cases it is impossible to determine how many persons are missing and, if so, whether this is due to death or unrecorded relocation. Damage: Losses of structures, animals, and crops also are important measures of physical impacts, such losses usually result from physical damage or destruction of property, but they also can be caused by losses of land use to chemical or radiological contamination or loss of the land itself to subsidence or erosion. Damage to the built environment can be classified broadly as affecting residential, commercial, industrial, infrastructure, or community services sectors. Moreover, damage within each of these sectors can be divided into damage to structures and damage to contents. It usually is the case that damage to contents results from collapsing structures (e.g., hurricane winds failing the building envelope and allowing rain to destroy the furniture inside the building). Because collapsing buildings are a major cause of casualties as well, this suggests that strengthening the structure will protect the contents and occupants. Other important physical impacts include damage or contamination to cropland, rangeland, and woodlands. Such impacts may be well understood for some hazard agents but not others. SOCIAL IMPACTS Psychosocial impacts: Research reviews conducted over a period of 25 years have concluded that disasters can cause a wide range of negative psychological responses; these include psycho physiological effects such as fatigue, gastrointestinal upset, and tics, as well as cognitive signs such as confusion, impaired concentration, and attention deficits. Psychological impacts include emotional signs such as anxiety, depression, and grief. They also include behavioral effects such as sleep and appetite changes, ritualistic behavior, and substance abuse. Political impacts: There is substantial evidence that disaster impacts can cause social activism resulting in political disruption, especially during the seemingly interminable period of disaster recovery. The disaster recovery period is a source of many victim grievances and this creates many opportunities for community conflict. INDIVIDUAL IMPACT At the individual level, the impact can often be felt physically, mentally and emotionally. Natural disasters cause destruction of property, loss of financial resources, and personal injury or illness. The loss of resources, security and access to shelter can lead to massive population migrations in lesser-developed countries. After experiencing a natural disaster, many individuals develop severe post-traumatic stress disorders or withdraw into states of depression. Others develop negative associations with the environment, in more developed nations; this can also lead to significant population migrations. COMMUNITY IMPACT Those communities that experience a natural disaster must also absorb the impacts of these destructive events. Many local communities lose so much in economic resources that recovery becomes difficult, if not almost impossible. Some communities find opportunity in the aftermath of a disaster to rebuild better and stronger communities than before. Communities

must often recognize population, demographic, and cultural shifts as a result of the impact of the natural disaster on their individual citizens. ECONOMIC IMPACT Economic impacts. The property damage caused by disaster impact creates losses in asset values that can be measured by the cost of repair or replacement. The ultimate economic impact of a disaster depends upon the disposition of the damaged assets. Some of these assets are not replaced, so their loss causes a reduction in consumption (and, thus, a decrease in the quality of life) or a reduction in investment (and, thus, a decrease in economic productivity). Other assets are replaced—either through in-kind donations (e.g., food and clothing) or commercial purchases. In the latter case, the cost of replacement must come from some source of recovery funding, which generally can be characterized as either intertemporal transfers (to the present time from past savings or future loan payments) or interpersonal transfers (from one group to another at a given time). Unfortunately, these losses are difficult to determine precisely because there is no organization that tracks all of the relevant data and some data are not recorded at all. For insured property, the insurers record the amount of the deductible and the reimbursed loss, but uninsured losses are not recorded so they must be estimated—often with questionable accuracy. ENVIRONMENTAL IMPACT Just as a natural can change the landscape of our personal lives as well as aspects of our community, so too can different types of disasters drastically alter the natural environment. The cyclones that occurred in Myanmar in 2008, or the wildfires that spread throughout California in 2009 are examples of how areas of land that detail whole ecosystems can be dramatically damaged or transformed from a single disaster event. On a larger scale, the debate regarding how to address global climate change and the resulting natural impacts is further punctuated by estimates of sea level increases that will completely swamp some island nations. Furthermore, the rapid desalination of salt water oceans caused by melting glaciers could deprive the world of 30 percent or more of its edible fish supply, and the loss of coral reefs from the same cause would put numerous coastal regions in jeopardy of tidal waves and surges. ROLE OF STUDENTS IN DISASTER MANAGEMENT   Knowledge on first aid, rescue and evacuation.   Help in the preparation of the school disaster contingency plan.   Aware the parents and community on various types of hazards and what are the preparedness measures to be taken.   Plantation in the school premises.   Boosting the morale of the community after the disaster.   Senior students can help villagers in preparing the Village Disaster Preparedness and Response Plan.   The students can be volunteers in the first-aid team, Rescue and Evacuation team, early warning team in their village. ROLE OF EDUCATIONAL INSTITUTIONS IN DISASTER MANAGEMENT The educational Institution can act as follows:

 Act as a safe shelter.  Health center for the locality.  Disaster management Information center where data base could be maintained on population, health, institutions etc.  A center for learning and counseling.  The school can be feeding center.  Training for DRM volunteers, Village Council members, Teachers, Government officials at the Sub-Division level. The Government of India over the years formulated strategies to cope with, prevent and mitigate disasters because of the frequency of disasters affecting the country. These policies consist of long and short term prevention and preparedness measures and immediate response mechanisms. They also include appropriate administrative structures to manage disaster response, financial systems to fund and facilitate them, the mechanisms to ensure that policies and strategies are continuously reviewed and revised in the light of experiences within the country and in other parts of the world. We, as teachers as responsible citizens of our country should be a part and parcel of the disaster preparedness drive taken up in the country.