The
enterprises or companies owned and handled by the government are the public
sector enterprises. These may be held by the state or the central government.
Most of the times, the aim of such enterprises is the public welfare. They
participate and contribute in the economic activities to for the growth of the
country. Their second motive is to earn as much profit as they can from these
activities. Some of the biggest public sector enterprises in India are Indian
Oil Corporation (IOC), Hindustan Machine Tools Ltd. (HMT) and Life Insurance
Corporation of India (LIC). Although, not all these enterprises are the same
just because they come under the public sector. There are three forms of such
enterprises.

DEPARTMENTAL
UNDERTAKINGS

This is the
most ancient type of public sector enterprise. These are the departments
through which the government functions and their activities are the most
crucial part of it.

These types
of enterprises are suitable where the complete control of the government is
necessary with the supreme secrecy for all the information. Also, in these a
large of amount heavy investment is required and the economic control is
mandatory which can be only done by the government.

Some of the
advantages of these enterprises are that there is effective control over the
operations being executed since all the power lies within the hands of one
authority. Also, there is high degree of public answerability which means that
the public is aware of almost every step undertaken by them.

Although the
disadvantages of these enterprises are that there are no immediate decisions
made since for every action, a written permission must be received by the
concerned authorities which takes a long time. Also, because of this long
procedure, they can’t take the full advantage of the opportunities available to
them.

STATUTORY
CORPORATION

These are a
special type of enterprises which is brought into existence only by the
parliament. They decide the powers, rules, regulations, operations and
activities as well as its relationship with the government. These enterprises
require a large amount of capital investment and must be run as a business
along with keeping in mind about the public welfare. Some examples of such
enterprises are Air India, Indian Airlines, Reserve Bank of India (RBI) and
Industrial Development Bank of India (IDBI).

The merits
of such organizations are that they have a lot of flexibility since they do not
necessarily have government interference in their operations as well as
financial matters. Also, they are highly important for the economic development
since they have the power of government along with the features of a private
organization.

However,
some downsides are that since it has the responsibility to run as a business,
they may lose themselves into some anti-social actions such charging really
high prices from the public. Also, they do not usually have to face any
competition from anyone therefore, they might slack behind sometimes and turn
out to be inefficient.

GOVERNMENT
COMPANY

Any company
whose majority of the shares, that is at least 51%, are held by a state or the
central government then it is declared a government company according to the
Indian Companies Act, 2013. These types of companies suitable when the
government wants to control an organization in the private sector with the aim
of public welfare. Some examples of such companies in India are Bharat Heavy
Electrics Ltd. (BHEL), Steel Authority of India (SAIL) and Hindustan Aircrafts.

The main
merits of such organizations would be that there is no requirement of a written
permission by the parliament since it is formed under the Companies Act, 2013.
Also, they have complete power over the management of the company since there
is no government interference.

But they are
not answerable to the parliament since it is more of a private organization and
also the independence factor exists on the paper only. Therefore, the
politicians and ministers can interfere if they want to.

Before the
British rule in India beginning from the late 1750s, India was not in a much
good condition due to the lack of education and knowledge. Even though we had a
prosperous and flourished economy, we didn’t know how to utilize it, this is
why we had a majorly backward society for a long time. It was after the British
rule that we understood the importance of education and started investing in
it.

So, what
exactly was India’s condition before and during the rule. How were we
underusing our opportunities?

AGRICULTURAL
SECTOR

There was a
big sluggishness in the agricultural sector during the British empire. This was
mainly because of the ‘zamindari system’. Under this system, all of the profits
earned by the farmers for selling the harvested crops in market went directly
to the zamindar of the land in the form of a ‘lagaan’. Here, the zamindars were
only concerned about their lagaan and not the condition of the farmer. So even
if he was not in a good financial position to pay the lagaan, their remaining money
were forcefully being taken away from them. These lagaan was to be given to the
colonial government by the zamindars and therefore, the government did nothing
to improve this system.

Apart from
this, the government also forced the commercialization of agriculture. This
meant that the farmers were only supposed to grow those crops which were meant
for the sale in the market and not the ones for their own consumption. For
doing this, the farmers were even being paid but it didn’t really help since
all of the crops were being taken away by the government.

Also, India
was really underdeveloped when it came to technology. Therefore, there were
hardly any irrigation facilities available or any fertilizers accessible. Due
to this, there was extremely low productivity in the country and there were
never enough crops being produced for the entire nation. Furthermore, the
colonial government did absolutely nothing to improve the conditions of this
sector, no initiatives, no investments, nothing.

INDUSTRIAL
SECTOR

The
industrial sector was quite reputed in the international market, before the
British rule, for its handicrafts. We were known for our creativity in
hand-made products. Although, during the rule, our handicraft industry declined
since British were following two-fold policy to completely collapse the Indian
market. They used to buy the raw materials from India at cheaper rates and
export them their own country. However, when the finished goods were made, they
imported back and sold to the Indians at higher prices.

As a result,
there was high level of unemployment in the nation and also the market was
rebuffing since the Indian goods could not compete with the imported
machine-made goods.

Also, there
was rarely any capital goods industry available during the rule in the country
therefore, industrialization could not be promoted further. this resulted in
the limited contribution to Gross Domestic Product (GDP) which restricted the
growth of the Indian economic. Again, the British government did not take any
initiative to improve this situation as they were more interested in the
economic growth of their home country.

Formation of
a company is a big and lengthy procedure. It means bringing your business idea
into existence. This process involves the completion of a lot of legal
formalities and procedures. There are three basic steps involved in the
formation – Promotion , Incorporation and Subscription of capital. The
important fact is that these three steps are required for the formation of a
public company only. In case of the private company, the first two steps are
enough. Hence, private company can be started right after the incorporation of
the company. Lets discuss these steps in detail.

PROMOTION

Promotion
means the discovery of a business opportunities and then taking the right steps
to grab it. According to the Section 2 (69), a promoter is someone who has
complete control over the management of the company, directly or indirectly,
and this could be as a shareholder or director or any other top position.

In the
promotion process, first the identification of the business opportunity is
necessary to further continue the process. After this, the promoter checks the
feasibility of the idea. The ides should be something that is realistic and
financially and economically possible. If the promoter is satisfied with the
finance requirement, then he can move ahead to launch the company.

Next, he has
to give a name to his company or brand by submitting an application to the
Registrar of Companies (ROC). It must be noted that the name cannot be
identical or close to the name of any other existing company. Then he must
decide the signatories to the memorandum of association. These signatories
would be the first official director of the company. For this, their written
consent is mandatory. In a public company, at least 7 signatories must sign the
memorandum whereas, in a private company, only two members are enough.

Then the
promoter appoints certain professionals who are going to help him in the
preparation and the submission of the important documents to the ROC.

INCORPORATION

Incorporation
basically means the legal registration of the company and receiving a
‘certificate of incorporation’. For this, the promoter makes an application for
incorporation to ROC along with other mandatory documents. These other documents
include the articles of association, memorandum of association, statement of
authorized capital, address of the office of the company and the written
consent of the signatories.

Along with
the application for incorporation, a registration fee has to be submitted and
the amount depends upon the amount of the authorized capital.

The ROC then
analyses your application thoroughly and if they are satisfied with all the
legalities and paperwork then they officially declare the company as a
corporate body under the Companies Act, 2013 after which you receive the certificate
of incorporation.

CAPITAL
SUBSCRIPTION

The
formation of a private company was done in the last step. This step is required
for the formation of a public company. After the above two steps, the promoter
must raise funds for his company which can be done through issuing shares and
debentures to the general public. For this, he must take the approval of the
Securities and Exchange Board of India (SEBI).

After this,
a prospectus is to be filed under the ROC. A prospectus is an official document
that invites the public to subscribe to the shares and debentures offered by
the company.

This task is
quite difficult. Therefore, some officials are appointed to ease the process. A
broker is appointed to distribute the prospectus and the application form to
the public and encourage them to buy the shares. A banker is appointed to
collect and deposit all the money from the public. And finally, an underwriter
is appointed if in case the company is not sure of receiving the minimum
subscription from the public. The underwriters are those who will buy the
remaining shares to fulfill minimum subscription requirement.

In order to
issue the shares and debentures to the public, it is necessary for the company
to be officially listed under the stock market. After that, the IPO process can
be started, and shares are allotted to the prospective shareholders.

Planning is
a major part of the business. In fact, it is the first and foremost step by the
organization towards the achievement of their goal. In terms of business, it
basically refers to the process of setting up of objectives in a given time period
and analyzing all of the alternatives possible to achieve those objectives and
then finally, choosing the correct method to do so.

We can tell
by its definition itself that it is a crucial part of the business that cannot
be ignored. Let us now discuss how this important step is initiated by an
organization and what goes on in order to achieve a perfect plan.

SET
OBJECTIVES

The first
step is to set up the objectives that you want to achieve. These objectives
could be both short-term and long-term. They basically give you a direction to
work in. you can plan your next steps and actions according to these objectives
and develop a proper plan. These objectives must be set for the entire
organization, from the top management to the employees to the field workers.
Everyone should know what they are aiming for.

DEVELOP A
PREMISE

Since
planning is something that is done for an uncertain future event, there always
have to be certain assumptions made. These assumptions are the base of the plans
and they called the premises. They help to foresee the unpredicted losses in
future and also helps in preventing them.

RECOGNIZE
THE ALTERNATIVE COURSES

The next
step is very important. In order to reach your destination, there could be
several ways. Similarly, in order to achieve your objectives, there are several
options available. You will have to identify and gather all of these
alternative options so that you will have more options to choose from. There is
rarely a plan for which there are no alternatives available.

ASSESS
THE ALTERNATIVE COURSES

There are
negative as well as positive impacts of all the alternative options you have in
your hand. In order to choose one, the head or the manager must be aware of all
the pros and cons of these alternatives. Not just this but, the financial
feasibility and the risks must also be measured before selecting one as your
main plan. Besides, the manager must also measure the profitability of each one
of these alternatives as profit is one of the common goals of all the
companies.

SELECT AN
ALTERNATIVE

Now, this is
the real decision-making time. after the evaluation of all the alternatives,
the manager must know which one will prove to be the most profitable at the
least risk. He must not make a mistake while choosing one because this is the
plan that the whole organization will follow and the wrong one might result in
the failing of the achievement of the goals.

EXECUTION
OF THE PLAN

Now that the
most suitable plan has been chosen, it must be properly executed. Execution
means putting and the plan into action as in doing the correct job towards the
achievement of the goal. Not just this, but it should also be noticed by the
heads of every department that all the employees are genuinely committed to
doing their work efficiently and effectively.

Stock market
has been in the news for quite a long time now. Almost everyone is interested
in the buying and selling of the stock and earning profit out of it. The
trading procedure, although, is a lengthy one. On top of that, investing in
this market needs a lot of knowledge and skills. One must be experienced enough
to anticipate the future of each company in the market and invest their money
accordingly. Those who are not very well educated about the market may hire
brokers for their investment.

These days,
the trading process has been digitalized to minimize the risk of unhealthy
trade practices and keep everyone’s money safe and secure. Let’s have a look at
the whole procedure of trading and settlement in detail.

1.SELECTION
OF BROKER

The first
and foremost step is to select a broker who will buy and sell the securities on
your behalf because according to the rules, only those who are registered under
the Securities and Exchange Board of India (SEBI) can trade securities. These
brokers can be anyone from an individual to a corporate body. There is a broker
– client agreement and a client registration form that has to be signed to
start the process. Also, the investor must submit the following details and documents:-

1.    PAN number

2.    Date of birth

3.    Address

4.    Educational qualification and
occupation

5.    Residential status

6.    Bank account details

7.    Depository account details

8.    Client code number available in the
client registration form

2.OPENING A
DEMAT ACCOUNT

The investor
is then required to open a demat account or a Beneficial Owner (BO) account
with a Depository participant (DO) for holding and transferring the securities
in the demat form. The depository is the organization or institution that holds
the securities in an electronic form. In India, there are two depositories –
National Securities Depositories Limited (NSDL) and Central Depository Services
Limited (CDSL). Also, the investor is supposed to open a bank account for the
cash transactions in the securities market.

3.PLACE THE
ORDER

Then the
investor places an order with his broker to buy or sell the securities. It
should be clearly mentioned by the investor how much shares he wants to buy or
sell so that there would be no confusion. Thereafter, an order confirmation
slip is issued by the broker to the investor.

4.EXECUTING
THE ORDER

The broker,
after the placement of the order, will then connect to the main stock exchange
online and he will match the shares and the best prices available for them.
When the shares are available to be bough or someone is available to buy those
from you, the broker is informed about it and the execution takes place
electronically. The broker then issues a trade confirmation slip to the
investor. After this, a contract note has been issued by the broker within 24
hours which is an important legal document as it helps to settle any disputes
between the broker and the investor.

5.SETTLEMENT

Now the
investor is supposed to deliver the shares he sold or pay the cash in case he
bought. This should be done immediately after the contract note has been
received or before the day when the broker will make the payment or deliver the
shares.

 What is
foreign exchange? What is foreign exchange rate? In the business world,
especially an international one, the use foreign exchange is quite frequent,
and it is necessary for them to be updated on the latest news of these
exchanges as their whole finance depends on this. So, what is it?

Foreign
exchange is the currency of all the other countries except for your own. The
money or legal tenders that the other country deals in is known as the foreign
exchange and in order to make a payment to that country, you will have to
exchange your currency with theirs. For instance, India’s currency is rupee but
all the other currency like US Dollar, UK Pound and more will be the foreign
exchange for us.

Foreign
exchange rate is basically the rate at which you are exchanging one currency
for another. Meaning, the price of one currency in respect of other. For
instance, 1 US Dollar in India is of 70 rupees therefore, in India, the price
of US Dollar is 70 rupees.

But how do
we decide this rate and who is responsible for the fluctuations in these rates?
How does the exchange rate system work? Well, there are three different systems
that deals with the foreign exchange rate with different rules in each of them.
Let’s study them in detail.

FIXED
EXCHANGE RATE SYSTEM

In this
system, the rate of a currency is fixed by the government and no one else is
allowed to interfere in their decision. The basic purpose of this system is to
maintain stability in the rates. To maintain the rate fixed by the them, they
buy the foreign currencies when the exchange rate is less and sells them off
when the rate increases. For this, the government must maintain a large reserve
with them so that they can buy the currencies whenever they desire.

Also, in
this system, each country fixes their currency value in the terms of an
‘external standard’. This external currency can be anything, from gold to
silver to any other country’s currency.

FLEXIBLE
EXCHANGE RATE SYSTEM

Under this
system, the exchange rate is set by the forces of demand and supply of the
foreign exchange in the market. This system is also known as ‘floating exchange
rate’. There is no government, or any other authority involved here to make a
decision on the price of the foreign exchange. Therefore, the value of the currency
fluctuates a lot in this system. The demand and supply of the currency in the
market is affected by the interaction of thousand of associations like the
banks, firms and others who buy and sell these currencies on a regular basis.

MANAGED
FLOATING RATE SYSTEM

This is a
system which is a combination of both the above systems. Here, the exchange
rate is set by the market forces of demand and supply as well as the central
bank influence on the prices through the intervention in the market. This system
is also known as ‘dirty floating’. The central bank intervenes in the foreign
exchange market to restrict the rates being fluctuated vastly. The aim is to
keep the rates close to the targeted prices.

 Deficient
demand is basically a situation which arises when the aggregate demand is less
than the aggregate supply that too when the economy is at full employment
level. This means that the population is demanding less that the country is
ready to produce with all the resources available. This could happen due to
many reasons like increment in taxes, increase in the imports, decrease in the
exports, decrease in government expenditure and many more. Due to these
reasons, the population holds no money power to demand and therefore, the
aggregate demand decreases. During these times, the aim to circulating more and
more money among the population so that their demanding power could increase.
So, how does the government control such a consequential matter. Here are the
measures taken by the government.

FISCAL
POLICY

1.INCREASE
IN GOVERNMENT SPENDING

The
government usually spends a huge amount of money in the infrastructure and the
administrative operations. During the time of deficient demand, they would
increase these spendings because then they would have to pay more to their workers,
a part of the population, and eventually more money would be circulated in the
economy.

2.DECREASE
IN TAXES

When in
deficient demand, the government reduces the rate of taxes so that the public
will have more money with them to spend on consumption and investment and
eventually they will end up demanding more.

MONETARY
POLICY

1.DECREASE
IN BANK RATE

Bank rate is
basically the rate at which the central bank lends money to the commercial bank
to meet their long-term needs.  During
this time, the central bank decreases these rate so that the commercial banks
have more than enough funds available with them to lend to the public and
eventually, more money would be circulated in the economy.

2.DECREASE
IN REPO RATE

Repo rate is
the rate at which the central bank lends money to the commercial bank to meet
their short-term needs. This also works as the same way, the banks will have
enough funds to circulate to the public and the demand would surely increase.

3.PURCHASE
OF SECURITIES

In the time
of deficient demand, the central bank starts purchasing securities from the
commercial bank. While selling these securities, the commercial banks will get
more money as their payment in their reserves which will again increase their
lending power and the public will be able to borrow more.

4.DECREASE
IN LEGAL RESERVE RATIO (LRR)

The
commercial banks are supposed to be maintaining a legal reserve. There are two
types of these reserves, Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio
(SRR). If these reserves would be decreased then eventually the banks will have
more money to lend forward to the people and hence, more money circulation in
the economy.

5.DECREASE
IN MARGIN REQUIREMENT

Margin
requirement is the difference between the market value of the security offered
and the value lent to them. During deficient demand, the RBI decreases this
margin which allows the banks to lend extra to the public. Also, after a
decrease in this margin, the public is more interested in borrowing money.

6.ADVISE TO
ENCOURAGE LENDING

During the
deficient demand, the central bank advises, requests or persuades the
commercial banks to lend more money ahead to the public. This helps to increase
the money power among the population and eventually the aggregate demand
raises.

 Excess
demand is basically a situation which arises when the aggregate demand is more
than the aggregate supply that too when the economy is at full employment
level. This means that the population is demanding more that the country can
produce with all the resources available. This could happen due to many reasons
like reduction in taxes, decrease in the imports, increase in the exports,
increase in government expenditure and many more. Due to these reasons, the
population holds more money power and therefore, demand more to raise their
standard of living. During these times, the aim is to extract as much money
from the population as possible so that their demanding power would decrease. So,
how does the government control such a consequential matter. Here are the
measures taken by the government.

FISCAL
POLICY

1.DECREASE
IN GOVERNEMNT SPENDINGS

Generally,
the government spends a huge amount on the infrastructure and administrative
activities. Although, during such a situation, they decrease these spendings so
that they will have to pay less to the workers who are a part of the population
and eventually it will lessen their money power. The government should usually
reduce the expenditure on defence as they rarely contribute towards the growth
of the economy.

2.INCREASE
IN TAXES

Here, the
government increases the rate of taxes and also tries to impose some new taxes.
This is because they want to take away the extra money circulating in the
economy so that their credit availability would be lowered, and they won’t be
able to demand more than their need.

MONETARY
POLICY

1.INCREASE
IN BANK RATE

Bank rate is
basically the rate at which the central bank lends money to the commercial bank
to meet their long-term needs.  During
this time, the central bank increases these rate so that the commercial banks
wont have enough funds available with them to lend to the public and
eventually, less money would be circulated in the economy.

2.INCREASE
IN REPO RATE

Repo rate is
the rate at which the central bank lends money to the commercial bank to meet
their short-term needs. This also works as the same way, the banks won’t have
enough funds to circulate to the public and the demand would decrease.

3.SALE OF
SECURITIES

In the time
of excess demand, the central bank offers securities to the commercial bank. In
order to purchase these securities, the commercial banks will have to use their
own money from their reserves which again will reduce their lending power and
the public won’t be able to borrow much.

4.INCREASE
IN LEGAL RESERVE RATIO (LRR)

The
commercial banks are supposed to be maintaining a legal reserve. There are two
types of these reserves, Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio
(SRR). If these reserves would be increased then eventually the banks will have
less money to lend forward to the people and hence, less money circulation in
the economy.

5.INCREASE
IN MARGIN REQUIREMENT

Margin
requirement is the difference between the market value of the security offered
and the value lent to them. During excess demand, the RBI increases this margin
which does not allow the banks to lend extra to the public. Also, after an
increase in this margin, the public is less interested in borrowing money.

6.ADVISE TO
DISCOURAGE LENDING

During the
excess demand, the central bank advises, requests or persuades the commercial
banks not to lend money ahead for a speculative or any non-essential activity.
This helps to reduce the money power among the population and eventually decrease
the aggregate demand.

 In July
1999, the government of India introduced a new industrial policy,
Liberalization Privatization and Globalization (LPG) as a pert of the economic
reform. It focused on liberating the industry from the licensing system(liberalization),
reducing the role of public sector in the economy and introducing private
sector(privatization) and encouraging the foreign-private participation in the
country for the growth of the economy(globalization).

The main
objective of this policy was to increase the standard of living in the nation
and growth of the economy. Also, the nation needed to be strongly independent
and not making money from other countries. Therefore, the focus was to set-up
strong industrial bases which had heavy industries.

Since,
poverty, unemployment and inequalities in income and wealth was and still is a
major problem in the nation, another goal was to reduce them by giving
employment opportunities to as much of the population as possible so that their
living standard could be raised.

Under this
policy, many industries which were reserved under the public sector was
de-reserved by the government since the focus was supposed to be on the private
sector. In many cases, disinvestment was also taking place.

The policy
opened up the opportunities for foreign capital investment. This increased the
foreign participation percentage in the country and in a lot of cases, a 100%
Foreign Direct Investment (FDI) was also permitted.

This
automatically granted the permission by the government required for technology
agreements with the foreign companies investing in our nation. A board namely
Foreign Investment Promotion Board (FIPB) was set-up for the promotion as well
channelization of foreign investment.

Economic
policies by the government like fiscal and monetary policies, infrastructural
factors, economic growth of the country, the mixed economy of the nation that
allows to recognize both public and private sectors are some of the factors
responsible for the new policy LPG.

LIBERALIZATION

It means
freeing the businesses and industries in the nation from unnecessary controls
and regulations. This was done through the following processes –

·       Abolishing the requirement of license
in majority of the industries

·       Removing the restrictions on the
movement of goods

·       Reducing the tax rates

·       Lifting up of unnecessary control
over the economy

·       Simplifying the procedure of
international trade

·       Making the foreign companies invest
in our country

PRIVATIZATION

It basically
means reducing the role f public sector in the economy and giving that power to
the private sector instead. In order to execute, a lot of public sector
enterprises were transferred to the private sector. This is called
disinvestment. As a result, the government held less power and control over the
public enterprises. If the government will not have more than 51% ownership of
the public enterprises, then its rights an ownership will automatically be
given to the private sector.

GLOBALIZATION

This means
the adaptation of various successful policies around the world and integrating
them towards the emergence of a global economy. Till 1999, the government
followed the old policy of strict and attentive international trade due to the
fear being captured again. This policy was to be changed. This was necessary so
that the country won’t be secluded. It needed a great level of international
socialization and interaction. A global economy will be boundary less with the
following characteristics  –

·       Free flow of imports and exports

·       Free flow of capital

·       Free flow of information and
technology

·       Free movement of citizens across
borders

 There are
two aspects on which the whole market functions – demand and supply. These are
inter-dependent and without the existence of even one of these, the market
would collapse. So, what is market? Market is basically a region or area where
the byers and sellers come in contact which each other in an effort to make a
sale or a purchase. But there isn’t only one form market where this process
takes place. A market has various forms with a variety of different functions.
Different commodities are served under different types of market. Let’s have a
look at few of them.

PERFECT
MARKET

This is the
type of market that doesn’t really exist in reality. A situation where there is
a very large number of buyers and sellers dealing in homogenous products whose
prices are fixed by the market. Because it is quite difficult to sell a product
at a fixed rate throughout its sales because of numerous sellers available,
this market is very rare, but the closest example could be the agricultural
grains offered in the market like wheat and rice.

One
important fact is that only homogenous product exists in this market. This
means that only those products that are similar in nature will be available
here so that the demand and supply fluctuates leading to a constant change in prices.

IMPERFECT
MARKET

MONOPOLY

This is a
market where only a single seller exists and there is no other competition
because his product doesn’t have any other substitutes. The word ‘monopoly’ is
derived from the Greek word ‘monos’ meaning single and ‘polus’ meaning seller.
A perfect example for this would be the railways in India. There is only
one platform in India that sells tickets for train travels and that is the
IRCTC. It doesn’t have any other competition because there is no other
substitute available for this.

Also, there
are some strong barriers that are made up in this market for a new firm to
enter. This gives the existing firm even more power and therefore, they are the
only ones who get to decide the prices of the commodities. Now because there is
no other substitute, the consumer will have to purchase the commodity at
whatever price it is available.

MONOPOLISTIC

This one is
kind of a mixture of both the above markets. This is a market where there are
large number of firms available who sell products that are closely related but
not exactly the same. Basically, it is the type of market we witness every day.

For example,
soap, toothpaste, shampoo and more. These are the type of products that do have
substitutes, but they are not the same due to the brand.

So, this
market is both perfect market and monopoly market. Here is how. Let’s talk
about toothpaste. There are loads of brands available in the market for this
like Pepsodent, Colgate, Sensodyne etc.. this shows that this market has the
freedom of entry and is full of competition. On the other hand, each product is
different. Even though they are all toothpastes, they are differentiated on the
basis of their brands and their functions.

OLIGOPOLY

Now this is
a market that has a few big sellers who sell homogenous as well as
differentiated products. This market is a mix of monopolistic and monopoly. The
word ‘oligopoly’ was derived from the Greek words ‘oligi’ meaning few and
‘polein’ meaning sell. In India, one of the biggest examples of such market
is automobiles industry. There are various big brands available in the market
who are all selling cars but with different features. Also, these brands are
inter-dependent which means that a change in the price of one firm will lead to
a change in the price of another.

For
instance, if Honda reduces its price by 2% then Maruti will have to reduce its
prices as well since the consumers will be more inclined towards Honda if they
don’t.

Also, since
it is a market of big sellers, there barriers over here as well for a new firm
to enter. The competition would be extremely high.

 What is one
of the most important factors that needs to be done correctly for an
organization to grow when their product is of good quality and have an
affordable price? It’s promotion. The organization needs to ensure that they
are promoting themselves properly to wide range of the population so that more
people can know about them and their business can grow.

Promotion is
basically communicating with your customers or prospective customers with aim
of informing them about your product and persuading them to make an immediate
purchase. In this, you will have to describe your product’s features,
availability, use and more important things that will earn you brownie points
and make the customer buy it.

There are
different ways of promoting yourself and one can use a combination of such ways
to grow their business. Let’s have a look at these tools.

1.ADVERTISING

It is the
most commonly used tools of promotion. Does not need any explanation as we come
across a hundred of ads every day.

In a formal
language, advertising is any paid form of presentation or promotion of the
product by the marketer. It includes the provision of the information about the
product in detail so that the buyer would take an action in favor of the
marketer.

The most
commonly used modes by the companies to advertise themselves have been
televisions, newspapers, magazines and radios. Although, since the past few
years, digital marketing has also been gaining attention impressively. More and
more people are opting for this method as it is easier and more affordable to
use. Plus, it reaches out to more masses considering the whole world is
connected online now due to the pandemic.

It can be
very surely said that advertisement plays a major role in the success of a
business.

2.PERSONAL
SELLING

It is
usually the oral presentation of the product to one or more consumers with the
aim of making them buy it. For this method, a salesperson is appointed by the
company who goes from door to door of the customers to explain them about the product
make a sale. It is generally more time taking and costlier than advertising.
Also, it is not possible for a human to go around in every corner of the nation
to promote the product therefore, the mass reach is very low here. One plus
point though, in personal selling, the seller gets an immediate and clear
feedback from the customer which may not be possible in the case of advertisement.

3.SALES
PROMOTION

These are
basically the short-term schemes initiated by the company to attract more
customers and make them buy the product. All promotional efforts other than
advertising and personal selling comes under this. Some of these techniques may
include free shipping or free return of the product, any giveaways,
competitions with rewards, flash sale of 60-80% off and lot more. These type
incentives attract a large number of people which increases the customer base.

4.PUBLIC
RELATIONS

These mean
the programs organized by a company to protect the image of their product or
themselves, for that matter, in the eye of the public. The business needs to
communicate with its buyers, investors and suppliers since they play a major
role in increasing the sales and profit of the company. Therefore, they need to
have a good public image constantly so that these people would be loyal to
them. A bad image may harm the reputation of the company and eventually people
would start to back-off from them since they do not want to be in touch with a
unsavoury reputed company.

 The problem
of unemployment is a serious problem which if not cured, leads to poverty. In
India, this problem is a quite major one. Currently, a whole of 13.3% of the
Indian population is unemployed. Basically, it is a situation where people are
willing and able to work but are not getting any jobs due to many reasons.
These people include only those who are above the age of 18 years because of
the child labor law in India. There are various reasons for this situation to
arise. Let’s discuss them.

1.SLOW
ECONOMIC GROWTH

The actual
rate of growth of the Indian economy is always far behind the rate that has
been planned in the five-year plans. This has been observed since the past five
decades. Due to this, there are low employment opportunities available and
hence, a majority of people are left unemployed. The generation of these
opportunities could not keep up with the increasing labor force.

2.POPULATION
EXPLOSION

The rapid
growth of the population is another prime reason why unemployment is growing.
The human capital in the country is increasing rapidly but the employment
opportunities is not growing enough. This leads to a lot of people being
jobless.

3.UNDERDEVELOPED
AGRICULTURE

The antique
methods of technology used for agriculture is also responsible for unemployment
or underemployment because the population is growing more than the
opportunities available.

4.FAULTY
EDUCATIONAL SYSTEM

The
education system in India right now is still full of defects as it does not
provide the students with any transformational technical and vocational
education. As a result, most of the students are not qualified enough or does
not possess the required education skills for many jobs. This again leaves a
lot of them unemployed.

5.SLOW
GROWTH OF INDUSTRY

There is a
massive shortage of capital and technology that restricts the industries from
growing and developing. This is why they are not able to create more employment
opportunities in the country. It is only possible for them to increase this
opportunity percentage if their own industry will shine bright since they
require more employees. For this, advanced technology is required which is
unavailable.

6.REDUCTION
OF SMALL-SCALE INDUSTRIES

Over the
past few years, a large number of small-scale industries in the villages have
declined. This is due to the change in taste of the consumers. With the
availability of new technology, people have started shifting their choices from
traditional products to modern products. This led to the shutting of these
small-scale industries due to the lack of demand. As a result, not only people
have less employment opportunities but those who did have a job also lost it
and became unemployed.

7.DEFECTIVE
PLANNING

The plans
formed by the government did not stop the migration of rural population to the
urban population and have also failed to encourage labor intensive technology
in the agriculture and industrial sector and as a result, in the rural areas
there is less employment opportunities considering everyone tends to move to
the urban areas.

8.LOW
CAPITAL

There is a
considerably low growth rate of capital in the country in both the agricultural
and the industrial sector and therefore, the employment opportunities is less
since these sectors are not able to grow as much as they should.