Q Nationalization of indian banks?

Indian banking system has been more focussed towards nationalisation . back in 1960’s
Despite the provisions, control and regulations of the RBI banks in India except the (SBI),
remain owned and operated by private persons. By the 1960s, the Indian banking industry had
become an important tool to facilitate the development of the Indian economy. At the same time,
it had emerged as a large employer, and a debate had ensued about the nationalisation of the
banking industry. Indira Gandhi, the then Prime Minister of India, expressed the intention of
the Government of India in the annual conference of the All India Congress Meeting in a paper
entitled "Stray thoughts on Bank Nationalization."[21] The meeting received the paper with
enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance
('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')
and nationalised the 14 largest commercial banks with effect from the midnight of 19 July 1969.
These banks contained 85 percent of bank deposits in the country. [21] Jayaprakash Narayan, a
national leader of India, described the step as a "masterstroke of political sagacity." Within two
weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition
and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated
reason for the nationalisation was to give the government more control of credit delivery. With the
second dose of nationalisation, the Government of India controlled around 91% of the banking
business of India. Later on, in the year 1993, the government merged New Bank of
India with Punjab National Bank.[22] It was the only merger between nationalised banks and
resulted in the reduction of the number of nationalised banks from 20 to 19. Until the 1990s, the
nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian
economy.
Banking system in todays time has been more liberalised with many private players coming such as
HDFC and ICICI banks. Today government is largely focusing on consolidation of indian Public sector
banks such as indian banks and dena bank to reduce the risk of npa from economy.

Q Contribution of parsi/Marwari business man

Contribution of Marwari has always been very significant to the indian businesses today we see
various businesses owned by marwari’s making a mark such as ruia’s , birla, Jindal, goenka and the
list goes on and on.

-hold upto 100 big business houses in india

-many backbone industries of india such as cement and steel plants are owned by them

-major contribution in creating jobs and entrepreneurial development in the country.

-actively present in all the sectors ranging from construction to consumer retail.

-new generations of business families have come up and venturing into new business.

-build premier education institutes such as BITS and Goenka universities

Q Leading business leaders from pre/post india

Pre independence-
1 Dhirubhai Ambani (1932 – 2002)
Dhirubhai Ambani is the most famous businessman in all of India. Even a five-year-old knows
about him - or at least will recognize his last name. Ambani's journey took him from his life as a
student in the dusty lanes of a small village in Gujarat to the major seaport city of Aden and
finally to Bombay where he becomes the doyen of the Indian industry.

Though he wanted to continue his studies after finishing school, Dhirubhai could not afford to do
so. So, he instead went to Aden, Yemen to earn money and improve his financial condition. In
Aden he worked as a clerk for a trading firm. In those days, Aden was the second-busiest port in
the world, and traders from across the world came here for business. He learned the ins and outs
of trading and read everything that he could lay his hands on.

When British rule in Yemen came to an end, many Indian expatriates went either to Britain in
search of better life or came back in India. Dhirubhai choose the latter and started his first
business, Majin, with a cousin. He then quickly launched out on his own, founding Reliance
Industries in 1966. As of now, the combined fortune of his family tops out at 60 billion dollars,
making them one of the wealthiest families in the world. As of 2012, Reliance employs over
85,000 people and is responsible for over 5% of India's tax revenue.

2 Ghanshyam Das Birla (1894 – 1983)

Inheriting his family’s money-lending business, Birla diversified into manufacturing. He moved to
Calcutta to establish a textiles business, much to the displeasure of European and British
merchants in the area, who did their best to shut Birla’s business down. Birla had to overcome
not only resistance from established players but also the biased policies of the British
government which discriminated against Bengali traders.

In the 1940s, Birla purchased Hindustan Motors and continued to diversify his business,
investing in tea, cement, chemicals, and rayon. He was also the first Indian to found a
commercial bank, the United Commercial Bank Limited. Now Aditya Birla group operates in more
than 33 countries, employs over 133,000 people and has annual revenues of over $35 billion.

Birla also founded the Birla Engineering College - now the Birla Institute of Technology and
Science, which is now one of the nation’s best engineering schools

3 Jamsetji Tata (1839 – 1904)

Jamshetji Tata is the founder of the Tata Group, India's largest conglomerate which employs
more than four lakh people and enjoys revenue of over $83 billion.
He started out by setting up cotton mills in Bombay and then Nagpur. His dream was to set-up an
iron and steel company, a science institution, a world-class hotel, and a hydro-electric plant.
He only fulfilled one of these dreams in his lifetime: the Taj Mahal hotel, near the Gateway of
India close to the Mumbai shoreline. According to legend, he wanted to found a world-class hotel
because he was denied entry to a luxury hotel when he was visiting another country. Now, the
Taj Mahal hotel is one of the most renowned in the world.

Post-independence
1 Dilip Sanghvi

The shares of India’s most valuable drug company, Sun Pharmaceutical

Industries spiked after it acquired Ranbaxy Laboratories. That being the case,
would you be surprised that Dilip Sanghvi, the founder of the company, is
richest. Total networth of $21.6 billion venturing into pharma business.

2Pallonji Mistry

With a net worth of $ 15 billion

Construction is always considered as a segment about building new ‘heights’

even though those in the business do build projects parallel to the ground also.
Anyway, Pallonji Mistry who is a construction patriarch and chairs the Shaporrji
Pallonji Group, saw the value of his 18.4 percent stake in Tata Sons rise which
puts him on the fourth slot in this rich list.

3Sunil Mittal

Mittal’s Bharti Airtel is the fourth largest mobile telephony company in the world,
going by the number of subscribers. With additional telecom spectrum and
strategic sell-offs, the company is proceeding strongly and Mittal finds himself
the 10th richest businessman of India.

With enterprises that actively influence the way we live, those listed here leave
indelible mark on the nation that is India. For that reason, they are not just the
richest Indian businessmen, they are also significant parts of what defines the
India’s social landscape, for better or for worse

Q Impact of Liberation globalization privatisation on indian business

After 1991 there was a two fold shift in the Indian economic policy-at the global level as
also the national level.

1. At the global level, it sough to integrate the Indian economy with the world economy
by allowing free movement of capital investment, both into and from India. This
exchange would also expose India to new technology
Table 1.1 indicates that there has been a significant time lag between foreign direct
investment (FDI) approvals and actual in-flows. This has been possibly due to the
government’s failure to ensure a smooth single-window clearance for projects. Other
factors have been the government’s tendency to backtrack on its own policy, and lack of
congruity in Center-state clearance for FDI inflows.

2. At the national level, it envisaged a decontrolled business environment where free

market forces would be given more freedom to operate and state control would be
reduced or eliminated. The omnipotent role of public sector corporations would be
redefined, allowing disinvestments of their equity holdings by the government.

The new economic programme has opened up the economy to a greater degree of
international participation and investments. The service industry has taken significant
strides in areas such as tourism, hospitalize or medicine, banking and financial services.
Consequently, not only have more players come into India, but mergers and acquisitions
of a large number of India companies have also taken place. This has compelled Indian
companies to sit up and re-examine their strategies and practices, as also the type of
business they are in. Such a shake-out is indeed in stark contrast to their attitude in the
recent past, where cornering a license mattered more than a company’s product or
competence. Liberalization has thus resulted in paradigmatic shift..

Q Disinvestment of PSU in india

Reasons for disinvestment

The public sector in India at present is at cross roads. The new economic policy initiated
in July – 1991, clearly indicated that the public sector undertakings have shown a very
negative rate of return on capital employed. On account of this phenomenon many public
sector undertakings have become burden to the government. They are infact turning out
to be liabilities to the government rather than being assets.

This is a sector which the government clearly wants to get rid off. In this direction the
government has adopted a new approach to reform and improve the public sector
undertakings performance i.e 'Disinvestment policy'. This has gained lot of importance
especially in latter part of 90s. At present the government seriously perceives the
disinvestment policy as an active tool to reduce the burden to financing the public sector
undertakings.

Problems of Public sector undertakings

The most important criticism levied against public sector undertakings has been that in
relation to the capital employed, the level of profits has been too low. Even the
government has crticised the public sector undertakings on this count. Of the various
factors responsible for low profits in the public sector undertakings, the following are
particularly important :-

i. Price policy of public sector undertakings

ii. Under – utilization of capacity
iii. Problem related to planning and construction of projects
iv. Problems of labour, personnel and management
v. Lack of autonomy
 The government in order to put an end to these problems, decided to disinvest its stake
in the PSUs. The companies traditionally established as pillars of growth have now
become a burden on the economy. Except few mighty oil and petroleum companies,
almost all other PSUs are incurring losses. The national gross domestic product and
gross national savings are also adversely effected by low returns from PSUs. About 10 to
15 % of the total gross domestic savings are reduced on account of low savings from
PSUs.

Objectives of Disinvestment

The following are the main objectives of disinvestment policy of the government.

i. To reduce the financial burden on government.

ii. To improve public finances.
iii. To introduce, competition and market discipline.
iv. To find growth.
v. To encourage wider share of ownership.
vi. To depoliticise essential services.

Q Miles stone on east india company

▪ Social Reforms: British raj in India had done various social activities for the country
for instance abolition of The Sati Pratha and introduction Widow Remarriage Act of
1856, Child marriage restraint Act, Act against child labor and many other acts for
improving the social tradition and custom for the betterment of humanity.
▪ Education reforms: During the British Raj only India existing education changed
with the introduction of English as the mandatory subject and official language.
During British Raj only University of Bombay, Kolkata and Madras were established
during the year of 1857 just before the rebellion. The university is still present and
being run by the modern Independent India as a most prestigious university.
▪ Employment Scheme: The British government also introduces the Indian Civil
Service for the various prestigious posts under the government. The Imperial Civil
Service at present is known as the Indian Administrative Service (IAS) which is
conducted by UPSC.
▪ Irrigation scheme: The government also structured various canals and dams for the
improvement of irrigation condition in India.
▪ Infrastructure development: During the regime of British government the India
communication and transport facility were developed. The government established
the India’s first railways service in the year of 1853-54 in the region of Bombay and
Calcutta by the two railways companies i.e. Great Indian Peninsula Railway (GIPR)
and East Indian Railway (EIR). After 5 years in the year of 1859, the first passenger
railway line opened in North India between Allahabad and Kanpur.
▪ Monuments, Legal Tenders, Heritage Site: The government had also introduced
the legal tender as an official medium of exchange at the time trading. Also they had
built many heritage sites and monuments among them Victoria Memorial Hall in
Kolkata, Victoria Terminus (now termed as Chhatrapati Shivaji Terminus), The
Gateway Of India, Viceroy’s House (now called as Rashtrapati Bhavan), Asiatic
Society of India in order to preserve the Indian monuments, literary script and many
more.

Q LICENCE AND PERMIT RAJ

The Licence Raj or Permit Raj (rāj, meaning "rule" in Hindi)[1] was the elaborate system of licences,
regulations and accompanying red tape that were required to set up and run businesses in India
between 1947 and 1990.The Licence Raj was a result of India's decision to have a planned economy
where all aspects of the economy are controlled by the state and licences are given to a select few.
Up to 80 government agencies had to be satisfied before private companies could produce
something and, if granted, the government would regulate production.Reforms since the mid-1980s
have significantly reduced regulation, but Indian labour laws still prevent manufacturers from
reducing their workforce without prohibitive burdens.

The architect of the system of Licence Raj was Jawaharlal Nehru, India's first Prime Minister.[5]
Private players could manufacture goods only with official licences.The key characteristic of the
Licence Raj is a Planning Commission that centrally administers the economy of the country. Like a
command economy, India had Five-Year Plans on the lines of the Five-Year Plans in the Soviet
Union.Before the process of reforms began in 1991, the government attempted to close the Indian
economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and
import licensing prevented foreign goods reaching the market. India also operated a system of
central planning for the economy, in which firms required licences to invest and develop. This
bureaucracy often led to absurd restrictions: up to 80 agencies had to be satisfied before a firm
could be granted a licence to produce, and, even then, the state would decide what was produced,
how much, at what price and what sources of capital were used.The government also prevented
firms from laying off workers or closing factories. The central pillar of the policy was import
substitution industrialisation, the belief that countries like India needed to rely on internal markets
for development, not international trade, a belief generated by a mixture of socialism and the
experience of colonial exploitation.

Current status

The Licence Raj system was in place for four decades. The government of India initiated a liberalisation
policy under P. V. Narasimha Rao Narasimha Rao also had the responsibility of industries minister; he is
directly responsible for dismantling the Licence Raj.

Liberalisation resulted in substantial growth in the Indian economy, which continues today.[citation
needed] The Licence Raj is considered to have been significantly reduced in 1991 when India had only
two weeks of foreign reserves left. In return for an IMF bailout, Gold bullion was transferred to London as
collateral, the Rupee devalued and economic reforms were forced upon India.The federal government,
with Manmohan Singh as finance minister, reduced licensing regulations; lowered tariffs, duties and
taxes; and opened up to international trade and investment.[7]

The reform policies introduced after 1991 removed many of these restrictions. Industrial licensing was
abolished for almost all product categories, except for alcohol, tobacco, hazardous chemicals, industrial
explosives, electronics, aerospace and pharmaceuticals.
On 6 August 2014 the Indian Parliament raised the limit on foreign direct investment in the defence sector

to 49%[8] and removed the limit for certain classes of infrastructure projects: high speed railways,

including construction, operation and maintenance of high-speed train projects;[9] suburban corridor

projects through PPP; dedicated freight lines; rolling stock including train sets; locomotives

manufacturing and maintenance facilities; railway electrification and signalling systems; freight terminals

and passenger terminals; infrastructure in industrial park pertaining to railway line, and mass rapid

transport systems.