Name of the College : armiet

roll no : armiet/mms 19/gt48

NAME OF THE STUDENT : Tejaswini Gajendra Gurav
ACADEMIC YEAR : 2019-2020
SUBJECT : Business environment

Q.1] Make a study & prepare the whole study through a chart on the
regulatory policy of rbi ( including repo rate reverse repo SLR CRR Bank
rate etc )
Ans.

Regulatory policy :

In pursuance of the recommendations of an Internal Study Group (Chairman: Dr.

Janak Raj), all new floating rate personal or retail loans and floating rate loans to
micro and small enterprises (MSEs) extended by banks were linked to external
benchmarks, viz., (i) the policy repo rate; or (ii) any benchmark market interest
rate produced by the Financial Benchmarks India Private Ltd. (FBIL), including
Treasury bill rates effective October 1, 2019. Subsequent to the introduction of an
external benchmark system, the monetary transmission has improved to the
sectors where new floating rate loans have been linked to the external
benchmark. With a view to further strengthening monetary transmission, it has
been decided to link pricing of loans by scheduled commercial banks for the
medium enterprises also to an external benchmark effective April 1, 2020.
Detailed guidelines to this effect will be issued separately.

The Micro, Small and Medium Enterprises (MSMEs) sector plays an important
role in the growth of the Indian economy, contributing over 28 per cent of the
GDP1, more than 40 per cent of exports2, while creating employment for about
11 crore people3. Considering the importance of MSMEs in the Indian economy
and for creating an enabling environment for the sector in its efforts towards
formalisation, a one-time restructuring of loans to MSMEs that were in default but
‘standard’ as on January 1, 2019, was permitted without an asset classification
downgrade. The restructuring of the borrower account was to be implemented by
March 31, 2020. The scheme has provided relief to a large number of MSMEs.
As the process of formalisation of the MSME sector has a positive impact on
financial stability and this process is still underway, it has been decided to extend
the benefit of one-time restructuring without an asset classification downgrade to
standard accounts of GST registered MSMEs that were in default as on January
1, 2020. The restructuring under the scheme has to be implemented latest by
December 31, 2020. This will benefit the eligible MSME entities which could not
be restructured under the provisions of the circular dated January 1, 2019 as also
the MSME entities which have become stressed thereafter. It is re-emphasised
that this is a one-time regulatory dispensation. Detailed guidelines, in this regard,
will be issued shortly.

It has been decided to permit extension of date of commencement of commercial

operations (DCCO) of project loans for commercial real estate, delayed for
reasons beyond the control of promoters, by another one year without
downgrading the asset classification, in line with treatment accorded to other
project loans for non-infrastructure sector. This would complement the initiatives
taken by the Government of India in the real estate sector. The detailed
instructions will be issued shortly.

To give a fillip to digital banking and enabling regional rural banks (RRBs) to
provide cost effective and user-friendly solutions to their customers, it has been
decided to allow RRBs, like other commercial banks, to act as merchant
acquiring banks, using Aadhaar Pay – BHIM app and POS terminals. The
detailed instructions in this regard will be issued today.

Post transfer of regulation of HFCs from National Housing Bank (NHB) to

Reserve Bank with effect from August 09, 2019, a Press Release dated August
13, 2019 was issued stating that Reserve Bank will carry out a review of the
extant regulatory framework applicable to HFCs and issue revised regulations in
due course, and till such time HFCs shall continue to comply with the directions
and instructions issued by NHB. It is proposed to place the draft revised
regulations on the Bank’s website by the end of this month, for public comments.

REPO RATE :

Repo rate also known as the benchmark interest rate is the rate at which the RBI
lends money to the banks for a short term. When the repo rate increases,
borrowing from RBI becomes more expensive. If RBI wants to make it more
expensive for the banks to borrow money, it increases the repo rate similarly, if it
wants to make it cheaper for banks to borrow money it reduces the repo rate.
Current repo rate is 4.4%

REVERSE REPO RATE :

Reverse Repo rate is the short term borrowing rate at which RBI borrows money from
banks. The Reserve bank uses this tool when it feels there is too much money floating in
the banking system. An increase in the reverse repo rate means that the banks will get a
higher rate of interest from RBI. As a result, banks prefer to lend their money to RBI
which is always safe instead of lending it others (people, companies etc) which is always
risky.

SLR :

SLR - Statutory Liquidity Ratio - Every bank is required to maintain at the close of
business every day, a minimum proportion of their Net Demand and Time Liabilities as
liquid assets in the form of cash, gold and un-encumbered approved securities. The ratio
of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio
(SLR). RBI is empowered to increase this ratio up to 40%. An increase in SLR also
restricts the bank's leverage position to pump more money into the economy.
CRR :

CRR - Cash Reserve Ratio - Banks in India are required to hold a certain proportion of
their deposits in the form of cash. However Banks don't hold these as cash with
themselves, they deposit such cash(aka currency chests) with Reserve Bank of India ,
which is considered as equivalent to holding cash with themselves. This minimum ratio
(that is the part of the total deposits to be held as cash) is stipulated by the RBI and is
known as the CRR or Cash Reserve Ratio.

BANK RATE :

Bank Rate - This is the long term rate(Repo rate is for short term) at which central bank (RBI)
lends money to other banks or financial institutions. Bank rate is not used by RBI for monetary
management now. It is now same as the MSF rate. Current bank rate is 4.65%

CALL RATE :

Call Rate - Inter bank borrowing rate - Interest Rate paid by the banks for lending and borrowing
funds with maturity period ranging from one day to 14 days. Call money market deals with
extremely short term lending between banks themselves. After Lehman Brothers went bankrupt
Call Rate sky rocketed to such an insane level that banks stopped lending to other banks.

MSF :

MSF - Marginal Standing facility - It is a special window for banks to borrow from RBI against
approved government securities in an emergency situation like an acute cash shortage. MSF rate
is higher then Repo rate. Current MSF Rate: 4.65%

___________________________________________________________________________

Q.2] Consider a situation of recession in the economy where money supply is less in economy
during this kind of situation what are the monetory policy should be taken by RBI

Ans.

What is recession

• An economy which grows over a period of time tends to slow down the growth as a part of the
normal economic cycle. An economy typically expands for 6-10 years andtends to go into a
recession for about six months to 2 years.

• A recession normally takes place when consumers lose confidence in the growth of the
economy and spend less.
• This leads to a decreased demand for goods and services, which in turn leads to a decrease in
production, lay-offs and a sharp rise in unemployment.

• Investors spend less as they fear stocks values will fall and thus stock markets fall on negative
sentiment.

What is monetary policy

It is concerned with the changing the supply of money stock and rate of interest for the purpose
of stabilizing the economy at full employment or potential output level by influencing the level
of aggregate demand

At times of recession monetary policy involves the adoption of some monetary tools which
tends to increase the money supply and lower interest rate so as to stimulate aggregate demand
in the economy.

At the time of inflation monetary policy seeks to contract aggregate spending by tightening the
money supply or raising the rate of return.

Objectives of monetary Policy

• To ensure the economic stability at full employment or potential level of output.

• To achieve price stability by controlling inflation and deflation.

• To promote and encourage economic growth in the economy.

Bank reserves policy

• Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI
decides to increase the percent of this, the available amount with the banks comes down. RBI is
using this method (increase of CRR rate), to drain out the excessive money from the banks.

• The increase in the cash rate leads to the contraction of credit only when the banks excess
reserves.

• The decrease in the cash rate leads to the expansion of credit and banks tends to make more
available to borrowers.

Open market operations

• It means the purchase and sale of securities by central bank of the country.

• It is useful for the developed countries.

• The sale of security by the central bank leads to contraction of credit and purchase there of to
credit expansion.
Liquidity Adjustment Facility

• A tool used in monetary policy that allows banks to borrow money through repurchase
agreements. This arrangement allows banks to respond to liquidity pressures and is used by
governments to assure basic stability in the financial markets.

• Liquidity adjustment facilities are used to aid banks in resolving any short-term cash shortages
during periods of economic instability or from any other form of stress caused by forces beyond
their control. Various banks will use eligible securities as collateral through a repo agreement
and will use the funds to alleviate their shortterm requirements, thus remaining stable.

Expansionary monetary policy

Problem: Recession and unemployment

Measures:

(1) Central bank buys securities

through open market operation

(2) It reduces cash reserves ratio

(3) It lowers the bank rate

Money supply increases

Investment increases

Aggregate demand increases

Aggregate output increases by a

multiple of the increase in investmen

___________________________________________________________________________

Q.3] Consider a situation in the economy where there is infaction in the economy then what
are the monetary policy should be taken by RBI to control the excess money supply during
infaction period
Ans.

Reverse repo is a monetary policy instrument which is used to control money supply in the
system. The decision will decrease money supply, which will further help control inflation.

Amit Gupta, CEO, TradingBells. said, “The reverse repo rate was increased by 25bps, which will
help banks generate additional interest on the money deposited with RBI.”

With progressive remonetisation, the surplus liquidity in the banking system declined from a
peak of Rs 7,956 billion on January 4, 2017 to an average of Rs 6,014 billion in February and
further down to Rs 4,806 billion in March.

Currency in circulation expanded steadily during this period. Its impact on the liquidity overhang
was, however, partly offset by a significant decline in cash balances of the government up to
mid-March which released liquidity into the system, RBI said.

On the other hand, RBI kept key repo rate unchanged at 6.25 per cent for the third time in a
row. All six members of the Monetary Policy Committee voted in favour of the monetary policy
decision. The next meeting of the MPC is scheduled on June 5 and 6, 2017.

In its last policy review of the previous financial year in February, RBI kept key repo rate
unchanged at 6.25 per cent for the second time in a row while it also retained the marginal
standing facility rate, reverse repo rate and the bank rate unchanged.

___________________________________________________________________________

Q.14] Explain credit creator process through this example suppose a person deposited
RS.1500 cash in UBI Bank where UBI kept 20%as cash reserve and the rest amount it has
given loan to X while X purchase some goods of the value of loan amount from Y and pay
cash. Y deposits the amount to Baroda bank while Baroda bank kept 20% as cash reserve
and rest of the amount as loan to Z. Z purchased goods from P and gave cash and P
deposits the amount to canara bank and so on.
Ans.
Demand deposits are an important constituent of money supply and the expansion of demand
deposits means the expansion of money supply. The entire structure of banking is based on credit.
Credit basically means getting the purchasing power now and promising to pay at some time in the
future. Bank credit means bank loans and advances.
A bank keeps a certain part of its deposits as a minimum reserve to meet the demands of its
depositors and lends out the remaining to earn income. The loan is credited to the account of the
borrower. Every bank loan creates an equivalent deposit in the bank. Therefore, credit creation
means expansion of bank deposits.
The two most important aspects of credit creation are:
1. Liquidity – The bank must pay cash to its depositors when they exercise their right to
demand cash against their deposits.
2. Profitability – Banks are profit-driven enterprises. Therefore, a bank must grant loans in
a manner which earns higher interest than what it pays on its deposits.
The bank’s credit creation process is based on the assumption that during any time interval, only
a fraction of its customers genuinely need cash. Also, the bank assumes that all its customers
would not turn up demanding cash against their deposits at one point in time.
Basic Concepts of Credit Creation
 Bank as a business institution – Bank is a business institution which tries to maximize
profits through loans and advances from the deposits.
 Bank Deposits – Bank deposits form the basis for credit creation and are of two types:
o Primary Deposits – A bank accepts cash from the customer and opens a
deposit in his name. This is a primary deposit. This does not mean credit
creation. These deposits simply convert currency money into deposit money.
However, these deposits form the basis for the creation of credit.
o Secondary or Derivative Deposits – A bank grants loans and advances and
instead of giving cash to the borrower, opens a deposit account in his name. This
is the secondary or derivative deposit. Every loan crates a deposit. The creation
of a derivative deposit means the creation of credit.
 Cash Reserve Ratio (CRR) – Banks know that all depositors will not withdraw all
deposits at the same time. Therefore, they keep a fraction of the total deposits for
meeting the cash demand of the depositors and lend the remaining excess deposits.
CRR is the percentage of total deposits which the banks must hold in cash reserves for
meeting the depositors’ demand for cash.
 Excess Reserves – The reserves over and above the cash reserves are the excess
reserves. These reserves are used for loans and credit creation.
 Credit Multiplier – Given a certain amount of cash, a bank can create multiple times
credit. In the process of multiple credit creation, the total amount of derivative deposits
that a bank creates is a multiple of the initial cash reserves.
Credit creation by a single bank
There are two ways of analyzing the credit creation process:
a. Credit creation by a single bank
b. Credit creation by the banking system as a whole
In a single bank system, one bank operates all the cash deposits and cheques. The process of
creating credit is explained with the hypothetical example below:

Let’s assume that the bank requires to maintain a CRR of 20 percent.

 If a person (person A) deposits 1,000 rupees with the bank, then the bank keeps only 200
rupees in the cash reserve and lends the remaining 800 to another person (person B).
They open a credit account in the borrower’s name for the same.
 Similarly, the bank keeps 20 percent of Rs. 800 (i.e. Rs. 160) and advances the
 remaining Rs. 640 to person C.
 Further, the bank keeps 20 percent of Rs. 640 (i.e. Rs. 128) and advances the remaining
Rs. 512 to person D.
This process continues until the initial primary deposit of Rs. 1,000 and the initial additional
reserves of Rs. 800 lead to additional or derivative deposits of Rs. 4,000 (800+640+512+….).
Adding the initial deposits, we get total deposits of Rs. 5,000. In this case, the credit multiplier is 5
(reciprocal of the CRR) and the credit creation is five times the initial excess reserves of Rs. 800.
Multiple Credit Creation by the Banking System
The banking system has many banks in it and it cannot grant loans in excess of the cash it
creates. When a bank creates a derivative deposit, it loses cash to other banks.
The loss of deposit of one bank is the gain of deposit for some other bank. This transfer of cash
within the banking system creates primary deposits and increases the possibility for further
creation of derivative deposits. Here is an illustration to explain this process better:

As explained above, the initial deposit of Rs. 1,000 with bank A leads to a creation of total
deposits of Rs. 5,000.
Limitations of Credit Creation
While banks would prefer an unlimited capacity for creating credit to increase profits, there are
many limitations. These limitations make the process of creating credit non-profitable. Therefore,
a bank continues to create additional credit as long as:
 There is a negligible chance of the loans turning into bad debts
 The interest rate that banks charge on loans and advances is greater than the interest
that the bank gives to depositors for the money deposited in the bank.
Hence, we can say that the limitations of credit creation operate through shifts in the balance
between liquidity and profitability. The factors that affect the creation of credit are:
 The capacity of banks to create credit.
 The willingness of the banks to create credit
 Also, the demand for credit in the market.
Capacity to create credit is a matter of:
 The availability of cash deposits with banks
 The factors which determine their cash deposit ratio
As regards the demand for credit:
 The demand must exist in the market
 Creditworthy borrowers (to avoid bad debts)
  The amount of loan granted should not exceed the paying capacity of the borrower
Leakages
 If the banks are unwilling to utilize their surplus funds for granting loans, then the
economy is headed towards recession
 If the public withdraws cash and holds it with themselves, then it reduces the bank’s
power to create credit

Q.5] Explain in the context of indian economy the libralization policy of indian govt took in
1990 to 2020 till now

Ans.

The economic context of India

According to the IMF, the Indian economy grew by 6.1% in 2019, which is the lowest growth in
seven years, forcing policymakers and markets to rethink India’s outlook. Slower domestic
consumption dragged on growth and tighter credit conditions led to weaker private investment,
which have translated into fewer jobs. Three of the four growth engines - private consumption,
private investment, and exports - have slowed down significantly. The significant fall in
consumption - which is the biggest contributor of growth - points to fragile consumer sentiment
and purchasing ability. As such, the government has announced a slew of reforms to jump-start
the economy. Thus, the economy is expected to pick up speed again in 2020 and 2021, with
growth reaching 7% and 7.4% respectively.

India’s government deficit stood at - 7.4% by the end of 2019,and should decrease slightly in
2020 and 2021, reaching -7%. The inflation rate was the same as it was last year, 3.7%, although
it is expected to raise to 4.1% in 2020 and 2021. Moreover, as the Reserve Bank of India has cut
its key policy interest rate five times in the first 10 months of 2019, the room for monetary
policy manoeuvring has also narrowed. Still, the economy is aiming to move towards a more
stable price regime, with a programme of reforms aimed at consolidating public accounts,
promoting investment and industrial development and improving the business climate. The
government has passed a key goods and services tax bill (which aims at turning the 29 states
into a common market) and raised foreign direct investment caps in some sectors, with various
economic reforms focusing on administrative and governance changes. Public debt levels
remain high, at 70%, and should continue along that trend in the upcoming years. IMF
anticipates the government debt level at 68.5% of GDP in 2020 and 67.7% in 2021.

India is expected to overtake China as the world’s most populous country by 2024. It has the
world’s largest youth population, nevertheless according to the OECD over 30% of India's youth
are NEETs (not in employment, education or training). India continues to suffer from a low GDP
per capita, and almost 25% of the population still lives below the poverty line (about one-third
of the world’s population living on under USD 1.90/day lives in India) and the country's
inequalities are very strong: the richest 1% of the population own 53% of the country’s wealth.
According to the World Bank, unemployment rate stood at 2.5% (data retrieved from ILOSTAT).

Liberalisation policy of indian govt

Since the adoption of the New economic strategy in 1991, there has been a drastic change in the
Indian economy. With the arrival of liberalisation, the government has regulated the private
sector organisations to conduct business transactions with fewer restrictions.

For developing countries, liberalisation has opened economic borders to foreign companies and
investments. Earlier, Investors has to encounter difficulties to enter countries with many
barriers.

These barriers included tax laws, foreign investment restrictions, accounting regulations, and
legal issues. The economic liberalisation reduced all these obstacles and waived few restrictions
over the control of the economy to the private sector.

These barriers included tax laws, foreign investment restrictions, accounting regulations, and
legal issues. The economic liberalisation reduced all these obstacles and waived few restrictions
over the control of the economy to the private sector.

Objectives

To boost competition between domestic businesses

To promote foreign trade and regulate imports and exports

Improvement of technology and foreign capital

To develop a global market of a country

To reduce the debt burden of a country

To unlock the economic potential of the country by encouraging the private sector and
multinational corporations to invest and expand.

To encourage the private sector to take an active part in the development process.

To reduce the role of the public sector in future industrial development.

To introduce more competition into the economy with the aim of increasing efficiency.

Reforms under Liberalisation

Deregulation of the Industrial Sector

Financial Sector Reforms

Tax Reforms

Foreign Exchange Reforms

Trade and Investment Policy Reforms

External Sector Reforms

Foreign Exchange Reforms

Foreign Trade Policy Reforms

Impact of Liberalisation

Positive Impact of Liberalisation in India

1. Free flow of capital: Liberalisation has enhanced the flow of capital by making it affordable for
businesses to reach the capital from investors and take a profitable project.

2. Diversity for Investors: The Investors will be benefitted by investing a portion of their business
into a diversifying asset class.

3. Impact on Agriculture: In this area, the cropping designs have experienced a huge change, but
the impact of liberalisation cannot be accurately measured. Government restrictions and
interventions can be seen from production to distribution of the crop.

Negative Impact of Liberalisation in India

1. The weakening of the economy: Enormous restoration of political power and economic power
will lead to weakening the entire Indian economy.

2.Technological Impact: Fast development in technology allows many small scale industries and
other businesses in India to either adjust to changes or shut their businesses.

3. Mergers and Acquisitions: Here small businesses are merging with big companies, therefore,
the small companies employees may need to enhance their skilled and technologically
advanced. This enhancing of skill and the time it might take may lead to non-productivity and
can be a burden to the company’s capital.

__________________________________________________________________________
Q.6] Explain in the context of indian economy explain the privatization policy took by indian
govt since 1990

Ans.

The word privatization may mean different things depending on the context in which it is used.
It can mean moving something from the public sphere into the private sphere, but it may also be
used to describe something that was always private, but heavily regulated, which becomes less
regulated through a process of deregulation. The term may also be used descriptively for
something that has always been private, but could be public in other jurisdictions.

There are also private entities that may perform public functions. These entities could also be
described as privatized. Privatization may mean the government sells state-owned businesses to
private interests, but it may also be discussed in the context of the privatization of services or
government functions, where private entities are tasked with the implementation of
government programs or performance of government services. Gillian E. Metzger has written
that: "Private entities [in the US] provide a vast array of social services for the government;
administer core aspects of government programs; and perform tasks that appear
quintessentially governmental, such as promulgating standards or regulating third-party
activities." Metzger mentions an expansion of privatization that includes health and welfare
programs, public education, and prisons.

Privatization in India

In 1991 India made some major policy changes in their economic ideologies. There were
stagnation and slow growth in the economy.

To tackle these problems the, then Finance Minister Dr. Manmohan Singh introduced some
major economic reforms. Now, we call it the liberalization of the Indian Economy and the LPG
reforms.

Privatization has a very broad meaning in economics. Everything that ranges from the
introduction of private capital to selling government-owned assets to transitioning to a private
economy.

As the definition of privatization is so very diverse let us take a look at the three main features of
privatization.

Ownership Measures: The ownership of all public enterprises ultimately shifts to private owners.
The denationalization can be complete or partial.

Organizational Measures: This is where we limit the control of the state in public companies.
Some methods include holding company structuring, leasing. restructuring of the enterprises
etc.

Operational Measures: Public organizations and companies were running into huge losses. So
the efficiency of these companies was to be increased.

Advantages of Privatization

Private companies always have a better incentive than public companies. The managers and
officials of a private company have skin in the game, i.e. their income is related to the
performance of the company. In public companies, such an incentive is not present. So
privatization usually leads to higher efficiency in the company.

In a public company, there is a lot of political interference. This may dissuade the company from
taking economically beneficial decisions. However, a private company will not let political
factors affect their performance.

In public companies, at times the government can only think about the upcoming elections. So
all their goals may be short-term in the process of trying to gain favours of the voting public. But
a private company does not have such restrictions. They have long-term goals and ambitions
and steer the company in the right direction.

Privatization will also increase competition in the market. Consequently, this has proved to be
very beneficial to consumers. Healthy competitiveness in an economy will push efficiency and
performances.

___________________________________________________________________________

Q.7] Explain one of the indian MNC'S company in pharmacuticals industry globalization policy

Ans.

Globalisation is a process which involves economic inter-dependence of countries world-wide

removing all barriers for economic integration as if the whole world is a single village. Obviously,
in this process, the rich nations with their superior financial power, control the scenario and the
poor and the developing nations are forced to integrate surrendering their economic
independence knowing fully well what they are forced to accept is really prejudicial to their own
interest. In this process the world financial institutions like the World Bank, IMF and now the
WTO advance the interest of the rich countries alone. The draconian policies of the World Bank
and the IMF under the structural adjustment programme resulted in the net transfer of $178
billion between 1984 and 1990 from the poor countries to the commercial banks of rich nations.
(UNDP Human Development Report, 1994). The Transnational Corporations (TNCs) of the rich
nations are practically controlling the world finances. Today, the whole world is colonised by
global finance and the TNCs supported by the neo-colonial structure including the World Bank,
IMF and WTO are controlling the financial situation world-wide. The governments of third world
countries are powerless against global finance and are unable to control its movement within
their own national boundaries.

At the time of independence, the total drug production in our country was around Rs. 10 crores.
At that time the MNCs taking the help of the colonial Patent and Designs Act, 1911 exploited the
drug market of our country. They were engaged mainly in the import of drugs from their country
of origin. Between 1947-57, 99% of the 1704 drugs and pharmaceutical patents in India were
held by foreign MNCs. During that time the MNCs who were controlling 80% of the market did
not come forward with financial investment and technological help to establish drug production
centres in India. Drug prices in India were amongst the highest in the world. In 1954, the first
public sector drug company Hindustan Antibiotic Ltd. (HAL) was established with the help of
WHO and UNICEF. The Indian Drugs and Pharmaceutical Limited (IDPL) was established in 1961
with help from the Soviet Union. The establishment of these two public sector units and the
coming into force of the Drug Policy of 1978 had been mainly responsible for the availability of
drugs and medicines at relatively lower prices in India. The country became almost self-sufficient
in the production of drugs.

The Patent Bill was first introduced in Parliament in 1967, but the Patent Act, 1970 came into
force only in 1972. The Indian Patent Act 1970 which is in operation in our country does not
allow product patents on medicines, agricultural products and atomic energy. This is the most
suitable patent act for the developing world. Here, process patents are allowed for 5-7 years.
Mainly with the help of the Indian Patent Act 1970 India is today self-sufficient in the production
of basic drugs covering various groups of drugs. Indian scientists developed new processes for
107 drugs. Indian companies are now among the world leaders in the production of bulk drugs
from basic stages. At present, the prices of drugs in India are comparatively cheaper than many
other countries. As per UNIDO, India is identified to produce its own drug needs with its own
technology and manpower indigenously. After 1970, many new drug firms were established by
Indian businessmen. At present, around 23 thousand small, big, and medium factories are
producing drugs in India.

Mass Ending of Jobs

With the reduction of the customs duties on foreign imports many drugs manufactured in India
have become unviable compared to the foreign goods in the Indian market. As a result, the
owner of these factories are closing down their units and throwing the workers out of
employment. Messrs. Boehringer Mannheim, and Parks Davis who were the lone producers of
Chloramphenicol in India stopped their production as its prices in the international market were
cheaper than the cost of production in India. M/s. Sarabhai Chemicals closed their Vitamin 'C'
plant for a similar reason. Like Chloramphenicol and vitamin 'C' many other drugs like
paracetamol, metronidazole, ampicillin, amoxycillin etc. are available at a cheaper price in our
country from abroad because of the lowering of the customs duties so that Indian factories have
closed and workers are on the streets. For the above drugs our country has became dependent
on foreign supply.

Impact on Public Sector

With the reduced role of the state under globalisation the public sector drug companies are
faced with serious problems including imminent closures. Public sector drug companies like
Indian Drugs and Pharmaceuticals Ltd. (IDPL), Hindustan Antibiotics Ltd. (HAL), Bengal Chemicals
and Pharmaceuticals Ltd. (BCPL), Bengal Immunity (BI) and Smith Stanistreet Pharmaceuticals
Ltd. (SSPL) played an important role in the production of essential drugs at affordable prices.
Under the globalisation process the role of the public sector has been marginalised and they
have been made sick. Attempts have been made to either privatise or close them. The Penicillin
Plant in HAL, the biggest in the country, has been handed over to private hands. Its
Streptomycin plant also has been leased to a private company for manufacture of other drugs.
IDPL which is having the biggest pharmaceutical plant in Asia is closed from 1996 for want of
proper financial assistance from the government. The public sector drug companies used to
supply raw materials to the small scale sector companies. Now, these companies are facing
difficulties in procuring raw materials. Similar is the fate of BCPL, B.I. and SSPL. These three units
were taken over by the government after they were made sick by the private owners. Proper
utilisation of their capacity could not be made due to lack of will on the part of the government,
mismanagement at the administrative level and high level corruption.

Conclusion

The present government at the centre is bringing a bill in the winter session of Parliament to
change the Indian Patent Act 1970. The change in the Act is not in the interest of the people of
the country. Now patents have become an object of business instead of development.
Considering the wide gap of industrial and technological development between developed
and developing countries monopoly rights through the patent system should not be allowed
to the rich nations. Today 85% of the patents are being controlled by the TNCs of the rich
nations. 'Globalisation is hurting poor people, not just the poor countries. In this process poor
countries and poor people will become increasingly marginalised', says the 1997 world
development report of UNDP.

___________________________________________________________________________

Q.8] Big bazar is one of the well known brand under future group Now what are the social and
culture environment big bazar is following to ensure its market in the indian economy

Ans.
Big Bazaar is a chain of hypermarket in India. Currently, there are 210 stores across 80 cities and
towns in India. Big Bazaar is designed as an agglomeration of bazaars or Indian markets with
clusters offering a wide range of merchandise including fashion and apparels, food products,
general merchandise, furniture, electronics, books, fast foodand leisure and entertainment
sections. Big Bazaar is part of Future Group, which also owns the Central Hypermarket, and
isowned through a wholly owned subsidiary of Pantaloon Retail India Limited that is listedon
Indian stock exchanges

GENERAL ENVIRONMENT:

1) Political and Legal Factors:

 A stable government at the centre will facilitate speedy economic recovery and create an
encouraging investment climate

 Problems of getting subsidy from Octroi and on different taxes like land, water taxes

 Problems of taking over properties and real estate

2) Economical:

 India, one of the fastest growing economies(6-6.5% GDP growth rate)

 Retail Industry to grow to 300 billion by 2010

 Increase in the percentage contribution of the service sector to GDP

 Increase in the investment on IT with focus on cost minimization

3) Socio-Cultural Factors:

 Increase in Nuclear families

 People prefer to shop in local stores with the reasonable prices

 Increase in working women‟s proposition

 Life style changes

 Shift in product and service preferences

 Increase in young population

4) Technological:

 Technological development for fast billing and the service

 Better applications of information technology in the modern retail industry, like in supply chain
management, store management, point of sale and customer relationship management
COMPETITOR ENVIRONMENT:

Big Bazaar faces competition from all the quarters of RPG Spencer Super stores, Reliance fresh
stores, Trinethra stores, Food Bazaar. But the main threat and the strategies of Big Bazaar is
around the local neighborhood Kirana Stores because this is where the big potential for growth
lies.

___________________________________________________________________________

Q.9] What is economic growth and economic developement make a comparative study on
economic growth and economic developement in indian economy since 2000 explain the ans
in the context of educational sector infrastructure sector technology sector & health sector

Ans.

Educational sector

Several empirical studies made in developed countries, especially the U.S.A. regarding the
sources of growth or, in other words, contributions made by various factors such as physical
capital, man- hours, (i.e., physical labour), education etc. have shown that education or the
development of human capital is a significant source of economic growth.

Professor Solow who was one of the first economists to measure the contribution of human
capital to economic growth estimated that for United States between 1909 and 1949, 57.5 per
cent of the growth in output per man hour could be attributed to the residual factor which
represents the effect of the technological change and of the improvement in the quality of
labour mainly as a consequence of education.

He estimated this residual factor determining the increase in the total output on account of the
measurable inputs of capital and labour (man-hours). He then subtracted this figure from the
total output to get the contribution of residual factor which represented the effect of education
and technological change, the physically immeasurable factors.

Denison, another American economist made further refinement in estimating the contribution
to economic growth of various factors. Denison tried to separate and measure the contributions
of various elements of ‘residual factor’.

According to the estimates of Denison that over the period 1929-82 in the USA during which
total national output grew at the rate of 2.9 per cent per annum, increase in labour input
accounted for 32 per cent, the remaining 68 per cent was due to the increase in productivity per
worker.

He then measured the contributions of education of per worker, capital formation, technological
change and economies of scale. Denison found that 28 per cent points of contribution to growth
in output due to growth in labour-productivity was due to technological change, 19 per cent
points due to capital formation and 14 per cent points due to education per workers, and 9 per
cent points due to economies of scale. It is thus clear that education and technological progress
together made 42 per cent (14 + 28) contribution to growth in national product .

Infrastructure sector

The infrastructure is important for faster economic growth and alleviation of poverty in the
country. The adequate infrastructure in the form of road and railway transport system, ports,
power, airports and their efficient working is also needed for integration of the Indian economy
with other economies of the world.

It is worthwhile to mention some distinctive features of infrastructure – First, the building of

infrastructure requires large and lumpy investment and they contribute to output, after a long
time that is their gestation period is quite long. Second, due to large overhead capital and lumpy
investment, the significant economies of scale are found in most of them. Due to the significant
economies of scale found in many infrastructure services, they have the characteristics of
natural money. The third important feature of infrastructure facilities is they create
externalities.

It needs to be emphasized that good quality infrastructure is important not only for faster
economic growth but also to ensure inclusive growth. By inclusive growth we mean that
benefits of growth are shared by the majority of the people of a country. Thus the inclusive
growth will lead to the alleviation of poverty and reduction in income inequality in the country.

Lack of adequate infrastructure not only holds lack economic development, it also causes
additional costs in terms of time, effort and money of the people for accessing essential social
services such as healthcare and education. Emphasizing the importance of adequate
infrastructure, authors of Economic Survey of India for the Year 2013 -14 quite rightly write,
“Rural economic growth in recent years has put enormous pressure on existing infrastructure
particularly on transport, energy and communication. Unless it is significantly improved
infrastructure will continue to be a bottleneck for growth and obstacle to poverty reduction”. In
other words, it is the challenge to ensure strong, sustainable and balanced development
through integration of the economy with environmentally sustainable development of
infrastructure.

Technology sector

Technology equipment and services for the production of economic resources or technologies
that facilitate learning.
Technology and developing countries by developed countries may not adopt product. Major
markets of advanced industrial countries, high income, ample capital resources, supported by
good management and technical skills are the least developed countries, small income, capital
shortages, unskilled labor is abundant. Advance technology, so, what can be done for these
countries. Developing countries should adopt appropriate technology to provide the needed
employment is based. The development stage of the country’s current economic policy
framework should be within.

Economists define technology as ideas, or knowledge, that help us produce output from inputs.
Having more technology means being able to produce more output with a given amount of
inputs.

Technology can be in different shape. It may be an engineering discoveries like invention of

airplane, light bulb, basic knowledge like calculus. Services concept like all-in-one shopping of
Wall Mart.

Technology is also important because regular inputs are characterized by diminishing returns
the more of an input we use, holding others constant, the less output each additional unit is
able to produce. However, since the same idea is available to the entire economy, we do not run
into diminishing returns with technology.

Technology turns out to have a very important role to play in overcoming the limitations
imposed by diminishing returns to labor and capital.At many points in history, prophecies of
doom have been announced based on the idea that scarcities in one input or another (land,
oil,people) will bring economic growth to a grinding halt. These prophecies have been disproven
so far mostly because of technological progress: we have learned to produce more with less of
the scarce inputs, thus reducing the dangers poseniteness of available resources

Health sector

The role of health in economic development is analyzed via two channels: the direct labor
productivity effect and the indirect incentive effect. The labor productivity hypothesis asserts
that individuals who are healthier have higher returns to labor input. This is well tested in the
empirical literature with mixed conclusions. The incentive effect is borne of the theoretical
literature, and individuals who are healthier and have a greater life expectancy will have the
incentive to invest in education as the time horizon over which returns can be earned is
extended. Education is the driver of economic growth, and thus health plays an indirect role.
Accounting for the simultaneous determination of the key variables - growth, education, fertility
- the results show that the indirect effect of health is positive and significant. Without
recognition of the indirect role of health the economic benefits of health improvements are
underestimated.
___________________________________________________________________________

Q.10] Now in the world we are facing Covid 19 in a massive and cirer way under this situation
according to you what are the mazor political environment will affect the situation

Ans.

It is without a doubt a serious threat to the entire world population. This Medium post nicely
laid out why we must act today or many people will die and health care systems across the
globe will collapse. The growth of new cases is exponential and has been exploding in some
countries such as Italy, Iran, South Korea and China. However, the United States, Germany,
France, Spain and other countries are only a few days behind the developments of more
strongly affected countries.

Until March 16th, there were more confirmed cases in China than in all other countries
combined. However, China’s complete shutdown of public life has helped to flatten the growth
rate. And many other countries across all continents are adopting now similar restrictions on its
citizens.

Italy is the country with the second highest number of cases and the growth is still exponential,
followed by Iran, Spain, South Korea, and Germany. This graph also shows the difficulties that
the Italian health care system has had in dealing with the COVID-19 outbreak. And it is a
precursor for other countries that are on the same trajectory as Italy, only a few days behind.

It has been virtually impossible to miss that there is currently a pandemic going on. And all the
updates about COVID-19 have been drowning out anything else that is not related to the
pandemic. One of those things being the Democratic primary elections and the campaigns for
the general election in November.

election related news (in the US) published in digital outlets and newspapers in the US. At the
end of February, the number of COVID-19 news stories first passed the number of election news
stories and this was even before Super Tuesday! Beyond that point, the number of coronavirus
news stories exploded.

What is also interesting is how things being discussed in those news stories changed over time.
While in mid-February, the main concerns in the election news stories were the New Hampshire
primary, Bernie Sanders, the Democrats and Trump, this shifted in mid March to Trump, Joe
Biden and coronavirus. Mid February to mid March also saw in a shift in topics within COVID-19
related news stories. While most stories revolved around stranded cruise ships, the situation in
China and the “new virus” in February, this changed to Trump’s actions being the center of
attention in mid March.
TV news shifted in the same way from covering election related topics (caucuses, primaries,
Democratic presidential contenders etc.) with almost 50% of airtime to an increase in coverage
of the coronavirus. As of last week, the three major cable news channels (CNN, MSNBC, FOX
NEWS) spent close to 20% of their airtime on the virus outbreak.

___________________________________________________________________________

Q.11] Explain circular flow of income in our economy by taking the four sector firms
household government & foreign nation

Ans.

The circular flow of income or circular flow is a model of the economy in which the major
exchanges are represented as flows of money, goods and services, etc. between economic
agents. The flows of money and goods exchanged in a closed circuit correspond in value, but run
in the opposite direction.

Circular Flow of Income in a Four-Sector Economy

* Household Sector:

Households provide factor services to firms, government and foreign sector.

In return, it receives factor payments. Households also receive transfer payments from the
government and the foreign sector.

Households spend their income on:

(i) Payment for goods and services purchased from firms;

(ii) Tax payments to government;

(iii) Payments for imports.

* Firms Sector :

Firms receive revenue from households, government and the foreign sector for sale of their
goods and services. Firms also receive subsidies from the government.

Firm makes payments for:

(i) Factor services to households;

(ii) Taxes to the government;

(iii) Imports to the foreign sector.

* Government Sector :

Government receives revenue from firms, households and the foreign sector for sale of goods
and services, taxes, fees, etc. Government makes factor payments to households and also
spends money on transfer payments and subsidies.

* Foreign Sector :

Foreign sector receives revenue from firms, households and government for export of goods
and services. It makes payments for import of goods and services from firms and the
government. It also makes payment for the factor services to the households.

The savings of households, firms and the government sector get accumulated in the financial
market. Financial market invests money by lending out money to households, firms and the
government. The inflows of money in the financial market are equal to outflows of money. It
makes the circular flow of income complete and continuous. The circular flow of income in a
four-sector economy is shown in below pic
Q.12] By taking an example of wheat to the production of bread and it will be sold by the
shopkeeper in the market, where you have to determine the N.I under this, Example by
considering value added method?
Ans.
National Income refers to the money value of all the goods and services produced in a country
during a financial year. In other words, the final outcome of all the economic activities of the
nation during a period of one year, valued in terms of money is called as a National income.
National Income by Value Added Method. Let’s start with an example of a baker. Consider that a
baker needs only flour to make bread.
He purchases flour as inputs worth Rs. 300 from the miller. After processing, he converts the flour
into bread and sells it for Rs. 500.
The difference between the price of flour and the bread is termed as ‘Value-Added.’ Let’s
Measure the National Income by Value Added Method. The value-added method focuses on
value-added to a product at each stage of production. In the given example, the baker has added
a value of Rs. 200 to the flow of final goods and services. The baker added the value of Rs. 200
can be termed as ‘Value Added’ and also ‘GVAMP’.
Let’s Look at the Steps of Value Added Method. There are main four steps for measuring national
income by the value-added method. Firstly, classify all the producing firms of an economy into
primary, secondary and tertiary. Next, the gross value added at market price is added for each
sector.
The GVAMP of all the sectors is added to give GDPMP. In the next step, NDPFC is calculated by
subtracting the amount of depreciation and net indirect taxes from GDPMP.
The final step, Add net factor income from abroad to domestic income to get national income.
Let’s Look at the Precautions taken in Value Added Method. We have to ensure that we don’t
include intermediate goods already in the value of final goods.
We should also not include the sale and purchase of second-hand goods. Also, we should not
include the services produced for our self-consumption. We can include the production of goods
for self-consumption. Let’s Solve a Numerical based on this Concept.
Estimate the national income from the following data.
NDPFC = Wages and Salaries + Employers contribution to social security + Interest + Rent +
Dividends + Corporate Tax + Undistributed profit.
Therefore, NDPFC = 450 + 75 + 160 + 130 + 45 + 15 + 10. NDPFC = 885 Cr.
The net income from abroad is added to the national domestic product to get national income.
NNPFC = 885 + (-10) = 875 Cr.
The value-added method focuses on value-added to a product at each stage of production.Net
factor income from abroad is added to domestic income to get national income.The intermediate
goods are not included as they are already included in the value of final goods.The production of
services for self-consumption is not included.
Q.13] According to you how the business environment is helpfull for doing a business
[ suppose you are manufacturing FMCG product in your company X ]

Ans.

To Start FMCG products manufacturing business in India will invite certain scrutiny that comes
under policies in fast moving consumer good (FMCG) segment and is having huge scope in the
market as an essential product used daily by billions of people. Taking the example of Soap as a
product, the soap industry is divided into various segments – personal use, veterinary use and
laundry use. Personal care soap segment is dominated by large consumer goods companies,
whereas the veterinary use and laundry use segment is fragmented or dominated by a few large
players. In this blog we will be looking as an overview on the necessary compliance. The major
two:

License & Registration

If I want to start the manufacturing, I need to obtain different registrations and licenses.
However, it depends on the location where you are establishing the plant. It is advisable to
check the local state laws.

Investment Required

The investment required for starting a small soap manufacturing business is minimal. A soap
manufacturing unit setup with an investment of about Rs.15 lakhs can generate revenues of up
to Rs.50 lakhs and a profit of Rs.8 lakhs, if operated successfully. The breakup of the investment
required and the assumptions for revenue are as under:

Land & Building Requirement

A small soap manufacturing unit requires a space of about 750 square feet of which around 500
square feet must be constructed. For the financial model, we have assumed that such a place
can be obtained with an investment of about INR 5L with the necessary power and water
supply.

Machinery Required

A small detergent soap making business minimal investment in machinery. Typical list of soap
making machinery required for soap manufacturing are plodder machine, miller machine, sap
stamping machine and soap cutting machine. Based on the type of product to be manufactured
and the scale, the type and investment required in machinery would vary. Investment in a small
soap manufacturing unit can vary between INR 2L and INR 10L. The typical time for setting up of
a unit is about 3 to 6 months for obtaining the necessary licenses, equipment, raw material, act.,

Working Capital

The main working capital expenditure for a soap manufacturing unit is raw material, salaries and
wages, power cost and receivables. Raw material to the tune of INR 3L- 4L must be on-stock for
operating a soap manufacturing unit smoothly, with additional working capital requirement of
INR 1L - 2L required for other expenditures like salaries, power and receivable. Hence, taking
into a three month working capital cycle, the promoters must have about Rs.8 to INR 12L of
working capital funds to operate smoothly.

Bank Loan For Soap Manufacturing

Bank loan can be obtained for soap manufacturing from various banks in India. Since, the
amount of investment required would be less than INR 1C, loan can be obtained under the
CGTMSE scheme without any collateral.

___________________________________________________________________________

Q.14] How the Internal & External Environment of any business [ take an example of
automobile Industry ] will influence the business environment

Ans.

Automobile industry is a global industry with the market size of 5.6 million units’ annually .There
are six competing manufacturers in this industry: Amazing cars (A), Best Motors work(B), Cool
Cars(C), Driven Motors Co. (D),Efficient Motors(E)and Fast Cars(F).

Internal environment :

Resource and Capability:

These refer to materials (i.e. inputs) and abilities which are required for the firm to survive and
prosper (Johnson G, 2008).There is four types of resources: physical, financial, intellectual and
human.

Physical Resource: It includes: manufacturing plant, raw materials and finished products.

Financial Resource: This includes; company financial assets such as cash in bank, collectables
and availability of credit lines from various financiers and sales of finished products which are
the major source of cash inflows for any company.

Human Resource: This is the resource which organizes all other factors of resources in the
course of operation cycle. Each firm in case of Stratsim environment employs 3 to 4 people.

Intellectual Resource: This refers to skills of the workforce, production technique and
technologies. In car industry now day’s intellectual resource is a single biggest provider of
competitive advantage.

External environment :

External environment is very important in making informed strategic decision in any

organization (Robbins, 2007).For any strategic decision to be successful it must at least be an
informed decision. There are various External analysis techniques with each providing different
yet useful set of information. They include PESTEL analysis for analyzing macro environment;
SWOT analysis which allows analysis of the opportunities and threats; Michael Porters 5 forces
and industry life cycle from industry analysis, the critical success factors and industry groups to
identify the competitors.

PESTEL

PESTEL analysis provides the most comprehensive analysis of the macro environment in which a
Fast car operates (Johnson G, 2008). Understanding of the information provided by PESTEL is
key in ensuring success of the firm product and even going concern of it. PESTEL analysis
include: Political risk analysis, Economic risk analysis, Social analysis, Technological analysis,
Environment analysis and Legal analysis.

POLITICAL RISK ANALYSIS

Political risk analysis includes analyzing the risk of political stability both in terms of occurrence
of wars but also in term of stability of legislation. For example the country that changes the
same law frequently will be perceived to have a significant high political risk.

Apart from political stability other factors which are part of political risk analysis includes: tax
laws, employment and labour relations laws, environment laws and regulation, trade restriction
and tariffs.

ECONOMICAL RISK ANALYSIS

Economic risk analysis involves analyzing the potential for economical growth, foreign exchange
rate, population unemployment, inflation rate, interest rate and availability of credit. As a
general rule the industry is expected to sale more cars during the good economical times and
less cars during the recession and prolonged period of economical contractions.

SOCIAL ANALYSIS

Social analysis this includes environment, car culture, taste, fashion, health consciousness, age
distribution and population growth rate. Today car customers especially in major cities in
western Europe and America prefers cars that are environmental friendly and are even prepared
to pay a premium for that.

TECHNOLOGICAL ANALYSIS

This involves research and development of new product or upgrading either minor or major
ways to existing products. It also includes production technologies such as automation .While
conducting technological analysis it is crucial to analyze technological change in the economy
and how it will likely impact the industry.

ENVIRONMENTAL ANALYSIS

Environmental analysis has become very important now days because of car customers and
government environmental consciousness .Most government have legislated maximum
acceptable carbon dioxide emission for a cars to be sold in their market. Besides customers
takes into account the car fuel consummation before making a purchase decision.
LEGAL ANALYSIS

Automobile industry like other industries is regulated by the government. This requires them to
obey all of the law as enacted and enforced by the government of the land. A good hypothetical
case is carbon dioxide emission target per car which illegalizes the sale of all cars in the market
which does not meet this criterion.

___________________________________________________________________________

Q.15] If we will use insteed of petrol based vehicle the battery based vehicle then according to
you whether it should follow the environmental management system explain your view in this
context

Ans.

Petrol & diesel based vehicle

Nowadays a wide range of options of vehicles fuels and technologies are commercially available.
Still, the complicated nature of environmental impacts caused by each option makes it a tough
decision for the consumer, fleet manager, or policy maker to find the best choice. Even policy
makers may run into trouble regarding the relative advantages of cleaner options and their
relative effects on fuel and vehicle cycle. In light of these, the present paper is an attempt to
evaluate the life cycle environmental impacts of road vehicle fuels and available technologies
and compare the cleaner options with each other and the main stream fuel/technologies. A
complete fuel life cycle assessment (LCA) on petrol, diesel, compressed natural gas (CNG),
electric vehicle (EV), hydrogen fuel cell vehicle (FCV), and biodiesel vehicles was made. Results
are shown for climate change, air quality effects and Energy resource depletion impact of the
different vehicle technologies. As recommended by the results, none of the options dominated
the others regarding all dimensions. Instead of mandating a particular solution, such as electric
cars or biofuels, probably successful vehicle and fuel policies include established standards of
performance and levies to attenuate emissions and let the market to find the best effective
alternative.
Battery based vehicals

We highlight some important lessons in the report. First, we have to make sure that the
electricity supply used for making and running electric cars comes from renewable sources. Our
report shows that this is really the biggest single influence factor on their environmental and
health performance. Secondly, we have to make these cars last. Squeezing the mileage out of
every electric car that is being produced is vital. So if they are just driven for 70 000 kilometres
(km) and then scrapped, their overall environmental performance does not look so good
compared to conventional cars because of the extra energy used for their production – more
than that of a conventional car. But once you drive them for 150 000 km or more, the
comparison strongly favours electric cars. Finally, when an electric car needs to be scrapped, we
need to make the most of its materials.

How does a typical electric car compare to a petrol or diesel vehicle?

It is very important to say that no car will ever be 100 % clean. The arrival of the electric car does
not change that. What we are saying is that if you really need to use a car, an electric car is the
better choice for the environment. However, using public transport or simply walking or cycling
to work will always be much better for the environment. A car is still a car; replacing one with
another type is not going to solve transport problems like congestion.

Electric motors are simply more efficient than combustion engines, so more of the energy put in
the battery ends up being used to drive the car. Especially when driving in cities, electric vehicles
waste less energy. Also, there are simply no tailpipe emissions of air pollutants such as nitrogen
oxides and particles. We still get particles from braking and from tyre wear, but overall there is
less than from a petrol or diesel car. Electric vehicles can also bring down noise, especially at
lower speeds they are less noisy than conventional cars.

Health-wise, the main benefit is related to air quality. You will still have some air pollution from
the electricity that goes into electric cars but this typically comes from power stations which
might have better pollution controls than you could implement in a conventional car and are
usually located further away from densely populated areas.

___________________________________________________________________________