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History: Caste System

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Presented by: Chan Lai Ming 98-4254-L-07 Wong Mui San 98-4489-A-07 Andy Tay Hu-Kang 97-4157-Y-07 Tan Tuan Leng 98-4260-L-07 India 6th largest country 2nd largest ... – PowerPoint PPT presentation

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Title: History: Caste System


1
Presented by Chan Lai Ming 98-4254-L-07
Wong Mui San 98-4489-A-07 Andy Tay
Hu-Kang 97-4157-Y-07 Tan Tuan Leng
98-4260-L-07
INDIA
2
India
  • 6th largest country
  • 2nd largest population
  • Started out as a British colony
  • Gained independence in August 1947
  • Separated from Pakistan and Bangaladesh
  • Self-ruling democracy
  • Current ruling party Bharatiya Janata Party
    (BJP) headed by Atal Behari
    Vajpayee
  • Practice Hindutva

3
History Caste System
  • Lifelong social stratification
  • Existed for almost 3,000 years
  • Ritual pollution

4
History Caste System (cont)
  • Caste Occupation
  • Braham Priests or scholars
  • Kshatriya Nobles and warriors
  • Vaishva Merchants and skilled artisans
  • Shudra Common labourers
  • Harijan Outcastes degrading labour
  • Abolished in 1949
  • Industrialization and urbanization

5
Indian Business Model Swardeshi
  • After independence, India's economic policies
    were driven by her leaders' deep distrust of
    foreign trade and admiration for the Stalinist
    Soviet Model of Self-reliant industrialization
  • Practised Swardeshi (self-reliance)

6
Indian Business Model Swardeshi
  • Policy of export pessimism
  • Based largely on Indian political aversion to
    foreign trade and investment
  • Domestic competition limited
  • Centralized government planning
  • -- 5-year plans

7
Strengths of Swardeshi
  • High Tariffs and Licenses for Imports
  • - discourage foreign trade
  • - policy of protectionism
  • - gain economies of scale and efficiency
  • Local Licensing and Quota Schemes
  • - ensure no powerful local enterprise
  • - granted licenses became monopoly devices

8
Strengths of Swardeshi
  • Guaranteed Profits
  • - domestic licensing scheme
  • Rent Seeking
  • - setting up License Rajs (King of Licenses)
  • Institutional Framework
  • - more developed
  • - inherited common-law system of justice from
    Britain

9
Weaknesses of Swardeshi
  • Inefficient
  • - disastrous impact in domestic industries
  • - uncompetitive for exports
  • Lack of Innovation
  • - no local or foreign competitors

10
Weaknesses of Swardeshi
  • Corruption
  • - entry barrier for new businesses
  • - expensive business cost
  • Labour Laws and Unions
  • - outdated labour laws
  • - unions play prominent role in labour market
  • - low skilled labour and low productivity

11
Need for Economic Reforms
  • Rapid and sustained improvement in the quality of
    her citizens life
  • Increase the productivity of capital, land and
    labour
  • Unprecedented economic crisis and socio-political
    turmoil in July 1991
  • Defaulting on her international commitments

12
Need for Economic Reforms (cont)
  • Denial of foreign funds and downgrading of her
    credit rating from Moodys
  • Resort to borrowing against their gold reserves
    from the International Monetary Fund (IMF)
  • Need to restore international confidence in the
    economy and to redress the imbalances that had
    emerged in external and domestic financial
    conditions

13
Technology
  • Introduction
  • Under British Rule -- Tightly controlled
    and depleted Indias resources
  • Post Independence -- Inward looking Strategy

14
Information Technology
Post Independence Ignored by government, most of
it in Foreign control Change in policy in 1965
-- Bhabha Committee formed to reinvent the
industry and have self reliance Department of
Electronics (DoE) former in 1970 Electronics
Corporation of India Limited (ECIL) formed in
1971 (monopolistic)
15
Before 1991
  • Computer Maintenance Corporation (CMC) formed
    in 1975
  • Stagnation of import volume from 1977- 1986
  • Slashed duties on imported computer component
    in 1986
  • The polices were impeding Indias IT industry

16
After 1991
  • Liberalisation of Economy
  • Removal of barriers to Foreign Investment
  • Implemented income-tax exemptions on profits
    from software exports
  • Granting of more Internet Service Provider
    (ISP) licenses in 1998
  • National Task Force on Information
    Technology and Software Development was set
    up on May 22, 1998

17
Advantages of India in IT Industry
  • Abundance of cheap skilled software personnel
  • Relatively unregulated by government
  • Access to top quality western management

18
Advantages of India in IT Industry
  • English is widely spoken
  • Experienced software engineers who have worked
    in the Silicon Valley and came back
  • Lower Operating Costs

Weaknesses
  • Poor Telecommunications Infrastructure

19
Nuclear Technology
  • Indias Nuclear Policy -- World Free of Nuclear
    Weapons
  • Began in 1969 with help from Canada and USA
  • First Nuclear Test in 1974 -- End of Foreign
    Assistance
  • Refusal to sign Non-Proliferation Treaty in
    1968
  • Safety concerns at Nuclear Plants

20
Other ways of harnessing Nuclear Technology
  • Nuclear Energy
  • Applications in Agriculture
  • Medicine / Healthcare
  • Spin of Technologies
  • Water Management
  • Space Technology

21
Nuclear Tests of 1998
  • Conducted 2 Nuclear Tests in May 1998
  • Received Worldwide Condemnation and Economic
    sanctions were enacted
  • Did not revoke any Treaties because none were
    signed in the first place
  • Remained Defiant
  • Refused to sign the Comprehensive Test Treat
    Ban but is negotiating for total disarmament

22
Reasons for Adoption of Nuclear Weapons
  • Aggressive stance of Neighbours, Pakistan and
    China
  • But.
  • Possible Real Reasons??
  • Need for recognition
  • Breaking out of Colonial Legacy
  • To be a force to be reckoned with

23
Indias Financial Markets
  •  6 Broad Institutions
  • 1.     Commercial banks
  • 2.     Specialized banking institutions
  • 3.     Mutual credit organizations
  • 4.     Informal financing organizations
  • 5.     Organized securities exchanges
  • 6.     Insurance and pension funds

24
Financial Reforms
  • Liberalization of Capital Markets
  • -- Foreign Institutional Investors (FIIs)
    are permitted to invest in Indian capital
    markets on registration with the SEBI
    (Joint Business Council, 1994)
  • -- Simplified common application forms

25
Financial Reforms
-- Foreign brokers are permitted to assist
investors -- All mutual funds are
allowed to apply for firm allocation in public
issues -- These funds are also exempted
from income tax regardless of whether they are
in the private or public sectors
26
Financial Reforms (Contd)
  • -- Consolidated payment of stamp duty
  • -- The Securities Contract (Regulations) Rules
    have been amended to enable widely held stock
    broking companies to become members of the stock
    market.
  • Reduction in Statutory Liquidity Ratio (SLR)
  • -- Set to be reduced to 25 from a high 47

27
Financial Reforms (Contd)
  • Liberalization of interest rates
  • -- Banks are now able to set their own
    prime lending rates.
  • -- The banks prime lending rates have to
    be declared and be uniformly applicable at all
    branches

28
Financial Reforms (Contd)
  • Unified exchange rate
  • -- Introduced in March 1993
  • -- Provides a powerful incentive for exports
    including services, exports and remittances
  • -- Greatly reduced the incentive for forward
    remittances flowing to the illegal hawala
    market

29
Financial Reforms (Contd)
  • Convertibility of the Rupee
  • -- Full convertibility of the rupee on the
    capital account in the 1995-1996 budget
  • New private sector banks
  • -- The restrictions on the formation of new
    banks in the private sector have been removed
  • -- Existing private banks are also allowed to
    expand without the fear of nationalization

30
Financial Reforms (Contd)
  • -- Banks can raise capital contributions from
    foreign institutional investors up to 20, and
    up to 40 from non-resident Indians (NRIs)
  • -- permitted to close non-viable branches other
    than in the rural areas
  • Elimination of government access to RBI
  • -- Government deficits will not be automatically
    monetized
  • -- Easier to control the growth of the money
    supply as well as inflation

31
Financial Reforms (Contd)
  • Strengthening of the SEBI
  • -- Armed with the necessary authority and power
    for the regulation and reform of the capital
    market
  • -- To improve trading practices, disclosure and
    investor protection
  • Incorporation of International Accounting
    practices
  • -- implemented in 1992-1993

32
Financial Reforms (Contd)
-- ensures that the banks balance sheets reflect
an accurate financial position, which is a
prerequisite for effective monitoring and
improving performance -- improve the
transparency of the capital markets to protect
investors and boost greater market efficiency In
25 December 1997, Indias investment rating was
raised to that of the lowest investment grade
rating level, Baa3 by Moodys.
33
Indias Service Industry
  • Telecommunications
  • -- Indias telecommunication sector has the
    highest proportion of unfulfilled demand
    among all service sectors
  • -- Indias burgeoning middle class has kept
    demand for telephones far ahead of
    availability
  • -- Widely considered as a strategic investment
    to maintain and develop competitive advantage
    at all levels national, regional and firm

34
Government Organization in the Telecom Sector
  • Videsh Sinchar Nigam Limited (VSNL)
  • Mahanagar Telephone Nigam Limited (MTNL)
  • Department of Telecommunications (DOT)
  • Indian Telephone Industries (ITI)

35
New Telecom Policy
  • Availability of telephones on demand and in all
    villages in 1997
  • Providing a PCO for every 500 people
  • Opening up of the sub-sector of value-added
    services to private investors in July 1992 for
    electronic mail, voice mail, data, audio text,
    video text, video conferencing, radio paging and
    cellular mobile telephone services

36
New Telecom Policy
  • Delicensing the manufacture of telecommunications
    equipment
  • Granting licences on the basis of circles
  • Allowing foreign equity participation up to 49
  • Setting up of a regulatory body (TRAI)
  • Reducing custom duties on mobile phones

37
Private Sectors MNCs
  • ATT
  • Singapore Telecoms
  • Australian Telecoms
  • CIT Alcatel of France
  • Siemens
  • Ericsson
  • Fujitsu

38
Indias Service Industry
  • Railways
  • -- The 150 year old Indian railways employs 1.6
    million people and carries some 13 million
    passengers and 1.2 million tones of goods on
    13,500 trains a day
  • -- Fifty years ago, it carried most of the
    countrys freight but today road transport
    carries more.
  • -- The freight trains are profitable but its
    market share is shrinking.

39
Performance of the Railways
40
Modernization Programmes
  • Electrification
  • Heavier and faster passenger and freight trains
    are designed
  • Bringing computers and modern telecommunication
    systems into freight management
  • Tapping in the capital markets through the Indian
    Railway Finance Corporation
  • Build-Own-Lease-Transfer (BOLT) and
    Own-Your-Wagon Scheme (OYWS) to encourage private
    participation and also to supplement resources

41
Year 2000 Railway Budget
  • Highlights
  • -- Introduction of at least 19 new trains
  • -- Free travel for girls going to school
  • -- Information Technology
  • -- 5 hike in some already high freight rates

42
Indias Service Industry
  • Airlines
  • -- 4 international airports New Delhi, Bombay,
    Calcutta and Madras
  • -- Its flag carrier, Air India is largely
    restricted to international operations
  • -- The domestic carrier Indian Airlines operates
    to some neighbouring countries
  • -- A feeder route airline, Vayudoot links remote
    or low traffic areas to nodal points
  • -- Helicopter Corporation of India providing
    access to mountain areas and to handle the
    offshore personnel transport requirements

43
India Aviation Reforms
  • Indias Dis-investment Commission has proposed
    that 60 of Air India equity should be sold off
    to the private sector and that a foreign airline
    should take the lions share of that as a
    strategic partner
  • Plan is to sell off 51 of Indian Airlines
    equity, with the most of that going to a major
    Indian business or to financial institutions

44
India Aviation Reforms
  • Govt. to inject loans and equity of up to US475
    million to offset the airlines past losses and
    to provide funds for new aircraft
  • Proposed open skies for all routes with
    private-sector investment in both airlines and
    airports
  • Creation of an independent regulatory authority
    like the USs Federal Aviation Administration

45
Future of Indian Economy
  • Eradication of Poverty

46
Poverty Alleviation and Employment Plans
  • Integrated Rural Development Programme (IRDP)
  • Training Rural Youth for Self-Employment (TRYSEM)
  • Development of Women and Children in Rural Areas
    (DWCRA)

47
Performance of Special Employment and Poverty
Alleviation Programmes




(In lakh)
48
Education
  • Increase Literacy and Improve Education System
  • (i) Education for All
  • Free and compulsory primary education up to
    5th standard and total eradication of illiteracy
  • (ii) Education of prioritised groups
  • Girls, SCs/ STs and Backward classes and
  • educationally backward minorities

49
Education
(iii) Access and quality Equal access and
opportunity for all up to school stage and
improvement of quality at all levels.
(iv)  Financing of education Increase in
government and non-government spending on
education, and bringing this up to 6 GDP
level.
50
Foreign Direct Investment
  • Encouraging FDI

  • FDI by Host
    Region (US Million)
  • Country
    1994 1995
    1996 1997 e
  • China
    33787 35849
    40800 45300
  • India
    973 1964
    2382 3264
  • Indonesia
    2109 4348
    6194 5350
  • Korea, Rep. 809
    1776 2325 2341
  • Malaysia
    4342 4132
    4672 3754
  • Philippines
    1591 1459
    1520 1253
  • Thailand
    1322 2002
    2268 3600
  • All developing countries including China
    95582 105511 129813
    148944
  • Share of India in developing countries ()
    1.0 1.9 1.8
    2.2
  •  
  • Source World Investment Report, United Nations,
    1998.
  • e estimates.
  • Note Figures for India in this table may not be
    comparable with those in other tables because of
    differences in coverage and
  • source of information

51
Foreign Direct Investment Actual Flows vs.
Approvals
1994 1995 1996 1997
1998 Total

(91 to
98) Approvals Rs crore
13590 37489 39453 57149 25103
189968 US million 4332
11245 11142 15752 6132
54268 Actual Inflows Rs crore
3009 6720 8431 12085
8433 41490 US million
958 2100 2383 3330
2073 11806 Actual Inflows as of
Approvals 22.1 18.7
21.4 21.1 33.8
21.7 (In US terms) Source RBI Upto
September, 1998. Figures are provisional. Note
The approval and actual inflows figures include
NRI direct investments approved by RBI.
52
Conclusion
  • India has potential to be the top economies in
    the world
  • Must manage bilateral relations with Pakistan
    and rid the stigma of a nuclear pariah
  • Uphold financial reforms
  • Crack down on corruption, reduce poverty,
    increase literacy

53
Thank you and The End
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