1

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VIVA COLLEGE OF ARTS, COMMERCE

AND SCIENCE

This is to certify that the report entitled Project on economic and social
environment affecting Industries submitted to Mrs. Shubhangi Kadam in
partial fulfillment of requirement for the semester-II in academic year
2009-2010 is bona-fide work carried out by Rohit Omprakash Gupta of
F.Y.B.M.S.

Prof. In-Charge Head of The

Department

Mrs. Shubhangi Kadam Mrs. Sanchita

Banerjee

Date: 22/02/2010

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NAMES OF MEMBERS

NAMES ROLL NO.

 RUPALI S. DESAI 29

 MANALI P. HATKAR 43

 PRATIK JADHAV 46
 JIGNESH V. KAWA 57

 PRASAD S. LOHAR 67

 ARUNA R. MADDIN 68

 RUSHIKESH R. MADVE 69

 ARCHANA B. MORE 81
 PRIYANKA P. MORE 84
 SAMEER NAIK 87

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ACKNOWLEGEMENT

We take this opportunity to express our sincere gratitude to all the

people who have been associated in the development of the project.
We owe a special thanks to Mrs. Shubhangi Kadam under whose
guidance and supervision the project was conceived, planned and
performed. We are greatly indebted to all the professors of the
department of BMS.
Our sincere gratitude to prof. Sanchita Banerjee, Head of the
Department of BMS, VIVA College for her extensive support and
encouragement that has made a significant contribution towards the
timely completion of the project.

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INDEX
SR.N PARTICULARS PG NO.
O
FOREWORD
1
1. ECONOMIC AND SOCIAL ENVIRONMENT
2
1.1 Economy Review
2
1.2 Economic Factors Affecting the Mining Industry
5
1.3 Social and Political Factors Affecting the Mining Industry
11
2. REVIEW OF MAJOR MINERALS AND PETROLEUM IN WA
17
2.1 Overview and Outlook
17-23
2.2 Petroleum
24-26
Conclusion 32
Bibliography 33

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CRISIS MANAGEMENT

INTRODUCTION:

A crisis may occur due to act of nature like earthquake, flood, drought,
epidemic etc.
Majority of corporate crisis arises due to internal problems which are caused by
low productivity and operational inefficiency that tend to threaten the basic
objective of the organizations.
There are instance when the handling of tragedies or serious crisis by PR staff
turned out to the advantage of the organizations by way of sympathetic
communication with those involved in community of what had happened, goodwill
and understanding is created even when disaster strikes.

DEFINITION:

Webster’s dictionary defines crisis as, “a turning point for better or worse”.
This means that situation could turn out to be both good and bad.

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Crises are like plays. Two factors are always present. Crisis involves people and
they interrupt the normal “chain of command”.
A crisis is defined as a significant threat to operation that can have negative
consequences if not handled properly.
It can create three related threats 1) Public safety 2) Financial loss 3) Reputation
loss. It damages the organization in terms of finance. The primary concern in a
crisis has to be public safety.
If failure to address public safety intensifies the damage from crisis reputation
and financial concern are considered after public safety has been remedied.

HISTORY OF 26/11
The 2008 Mumbai attacks were more than ten coordinated shooting and
bombing attacks across Mumbai, India's largest city, by terrorists from Pakistan.
The attacks, which drew widespread condemnation across the world, began on 26
November 2008 and lasted until 29 November, killing at least 173 people and
wounding at least 308.

Eight of the attacks occurred in South Mumbai: at Chhatrapati Shivaji

Terminus, the Oberoi Trident, the Taj Mahal Palace & Tower,Leopold Cafe, Cama
Hospital a women and children's hospital the Orthodox Jewish-owned Nariman
House, the Metro Cinema,and a lane behind the Times of India building and St.
Xavier's College. There was also an explosion at Mazagaon, in Mumbai's port area,
and in a taxi at Vile Parle. By the early morning of 28 November, all sites except
for the Taj hotel had been secured by Mumbai Police and security forces. An
action by India's National Security Guards (NSG) on 29 November (the action is
officially named Operation Black Tornado) resulted in the death of the last
remaining attackers at the Taj hotel, ending all fighting in the attacks.

Ajmal Kasab,the only attacker who was captured alive, disclosed that the
attackers were members of Lashkar-e-Taiba, the Pakistan-based militant
organization, considered a terrorist organization by India, the United States, and
the United Kingdom, among others.The Indian Government said that the attackers
came from Pakistan, and their controllers were in Pakistan.

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On 7 January 2009, after more than a month of denying the nationality of the
attackers,Pakistan's Information Minister Sherry Rehman officially accepted Ajmal
Amir's nationality as Pakistani. On 12 February 2009, Pakistan's Interior Minister
Rehman Malik, in a televised news briefing, confirmed that parts of the attack had
been planned in Pakistan and said that six people, including the alleged
mastermind, were being held in connection with the attacks.

BACKGROUND

On the Wednesday night of 26 November 2008, India’s cosmopolitan,

financial soul viz., the city of Mumbai was attacked brutally by several
militants. Mumbai, which was previously known as Bombay, is the capital of the
state of Maharashtra in Western India. Mumbai is a microcosm of India’s diversity
as well as the face of India’s growth and development. The city has also witnessed
severe communal clashes and tension as well as terrorist attacks and threats in the
last two decades.
On December 6 1992, the controversial Babri Masjid in Ayodhya was
destroyed by fanatical Hindu nationalists. This resulted in a massive Muslim
backlash in Mumbai leading to widespread communal rioting in the city. The

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killing of several Hindu workers in an area called Dongri, in South Mumbai,

during this backlash, further resulted in counter violence by the Hindus in
Mumbai. The subsequent massacre of Muslims in Mumbai, led to the 1993
bombings in Mumbai which claimed almost 250 lives. 1993 saw serial
bombings in 13 locations in Mumbai including the Bombay Stock Exchange.
The violence of 1993 saw a demographic change in Mumbai with widespread
migrations of
Hindus and Muslims from different parts of the city to the signature Hindu
and Muslim
majority areas in the city respectively resulting in a ‘ghettoisation’ of the city’s
poorer Hindu
and Muslim communities. These attacks also exposed the deep-rooted
vulnerability of
Mumbai’s community to tension and violence. After 1993, in July 2006,
Mumbai was
attacked again when a series of bombs exploded in the packed local commuter
trains in the
peak hours of the evening. Seven blasts carried out within eleven minutes claimed
over 250
lives in this attack. The attacks were designed to claim lives as Mumbai
local trains are packed in the peak hours of the evening, when thousands of
commuters travel from
workplaces in southern Mumbai to residential areas in suburban Mumbai. Post
2006, the
terrorist attacks on 26-28 November 2008 were probably the worst that the city and
even the
country has witnessed in a very long time. The planning and ruthlessness of the
operation
left India reeling under its impact and has initiated unprecedented public vigilance
regarding
terrorism in Mumbai.

THE INCIDENT

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• The November 2008 attack was on Mumbai was the longest attack ever carried
out
by a terrorist group. It was also one of the deadliest attacks witnessed by India.

• The attack on Mumbai lasted approximately 60 hours and was meticulously

planned.
The attack was a reflection of meticulous planning, detailed precision and
preparation. It required immense effort, both physical and mental, on the part of
the
militants, who operated effectively over an extended period of time.

• The attack employed numerous tricks of terrorist tradecraft including firing, use
of
guns, grenades, bombing, hostage-taking etc. It focused on creating confusion
and
overwhelming the authorities with its mixed tactics, delaying effective response.

• The attack was carried out by ten militants armed with AK-47s, low intensity
bombs.

ATTACK
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TARGETS:

• The militants attacked a total of ten targets. Five of these targets were the
primary
targets. The attacks on these targets were carefully crafted and meticulously
planned.
These targets were of importance and agenda and were attacked for different
yet
specific reasons.

• The five other targets were the Secondary targets. These were targets of
opportunity.

The Targets

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According to investigations the attackers traveled by sea from Karachi,

Pakistan across the Arabian Sea, hijacked the Indian fishing trawler 'Kuber', killing
the crew of four, and then forced the captain to sail to Mumbai. After killing the
captain, the terrorists entered Mumbai on a rubber dinghy. The captain of 'Kuber',
Amar Singh Solanki, had earlier been imprisoned for six months in a Pakistani jail
for illegally fishing in Pakistani waters.

The first events were detailed around 20:00 Indian Standard Time (IST) on 26
November, when 10 Urdu-speaking men in inflatable speedboats came ashore at
two locations in Colaba. They reportedly told local Marathi-speaking fishermen
who asked them who they were to "mind their own business" before they split up
and headed two different ways. The fishermen's subsequent report to police
received little response.

Chhatrapati Shivaji Terminus

The Chhatrapati Shivaji Terminus (CST) was attacked by two gunmen, one of
whom, Ajmal Kasab, was later caught alive by the police and identified by
eyewitnesses. The attacks began around 21:30 when the two men entered the
passenger hall and opened fire,using AK-47 rifles.The attackers killed 58 people
and injured 104 others,their assault ending at about 22:45. Security forces and
emergency services arrived shortly afterwards. The two gunmen fled the scene and
fired at pedestrians and police officers in the streets, killing eight police officers.
The terrorists passed a police station. Many of the outgunned police officers were
afraid to confront the terrorists, and instead switched off the lights and secured the
gates. The terrorists headed towards Cama hospital intending to kill patients, but

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the hospital staff locked all of the patient wards. The two men reached the hospital
and attempted to enter the patient wards. They demanded a glass of water from the
hospital staff. They asked the man who gave it to them what his religion was, and
shot him dead when he said he was a Hindu. When local police arrived, Kasab and
Khan threw grenades and shot a police officer dead before fleeing. A team of the
Mumbai Anti-Terrorist Squad led by Police chief Hemant Karkare searched the
Chhatrapati Shivaji Terminus and then headed out in pursuit of Kasab and Khan.
Kasab and Khan opened fire on the pursuing vehicle, and the police returned fire.

Karkare and four of his officers were killed, and the only survivor was wounded.
However, the terrorists ran into a police roadblock, which had been set up after the
wounded police officer radioed for help, leading to a gun battle in which Khan was
killed, and Kasab was wounded. Kasab struggled with police as they arrested him.

Leopold Cafe

The Leopold Cafe, a popular restaurant and bar on Colaba Causeway in South
Mumbai, was one of the first sites to be attacked. Two attackers opened fired on
the cafe on 26 November night, killing at least 10 people (including some

foreigners), and injuring many more.

Bomb blasts in taxis

There were two explosions in taxis caused by timer bombs. The first one
occurred at 22:40 at Vile Parle, killing the driver and a passenger. The second
explosion took place at Wadi Bunder between 22:20 and 22:25. Three people
including the driver of the taxi were killed, and about 15 other people were injured.

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Taj Mahal Palace & Tower and Oberoi Trident

Two hotels, the Taj Mahal Palace & Tower and the Oberoi Trident, were
amongst the four locations targeted. Six explosions were reported at the Taj hotel
and one at the Oberoi Trident.At the Taj Mahal, firefighters rescued 200 hostages
from windows using ladders during the first night.

CNN initially reported on the morning of the 27 November 2008 that the
hostage situation at the Taj had been resolved and quoted the police chief of
Maharashtra stating that all hostages were freed; however, it was learned later that
day that there were still two attackers holding hostages, including foreigners, in the
Taj Mahal hotel.

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The Wasabi restaurant on the first floor of the Taj Hotel was completely gutted.

During the attacks, both hotels were surrounded by Rapid Action Force personnel
and Marine Commandos (MARCOS) and National Security Guards (NSG)
commandos.When reports emerged that attackers were receiving television
broadcasts, feeds to the hotels were blocked. All attackers were out of the
Taj Mahal and Oberoi hotels by the early morning of November 29. Major
Sandeep Unnikrishnan of the NSG lost his life as a result of a gun shot during the
evacuation of Commando Sunil Yadav who was hit in the leg by a bullet during the
rescue operations at Taj.

A number of European Parliament Committee on International Trade delegates

were staying in the Taj Mahal hotel when it was attacked, but none of them were
injured.British Conservative Member of the European Parliament (MEP) Sajjad
Karim (who was in the lobby when attackers initially opened fire there) and
German Social Democrat MEP Erika Mann were hiding in different parts of the
building. Also reported present was Spanish MEP Ignasi Guardans, who was
barricaded in a hotel room.Another British Conservative MEP, Syed Kamall,
reported that he along with several other MEPs left the hotel and went to a nearby
restaurant shortly before the attack. Kamall also reported that Polish MEP Jan
Masiel was thought to have been sleeping in his hotel room when the attacks
started, but eventually left the hotel safely.Kamall and Guardans reported that a
Hungarian MEP's assistant was shot. Also caught up in the shooting were the
President of Madrid, Esperanza Aguirre, while checking in at the Oberoi
Trident,and Indian MP N. N. Krishnadas of Kerala and Sir Gulam Noon while
having dinner at a restaurant in the Taj hotel.

Nariman House

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Front view of the Nariman House a week after the attacks

Nariman House, a Chabad Lubavitch Jewish center in Colaba known as the

Mumbai Chabad House, was taken over by two attackers and several residents
were held hostage. Police evacuated adjacent buildings and exchanged fire with
terrorists, wounding one. Local residents were told to stay inside. Terrorists threw
a grenade into a nearby lane, causing no casualties. NSG commandos arrived from
Delhi, and a Naval helicopter took an aerial survey. During the first day, 9 hostages
were rescued from the first floor. The following day, the house was stormed by
NSG commandos fast-roping from helicopters onto the roof, covered by snipers
positioned in nearby buildings. After a long battle, one NSG commando and both
terrorists were killed. Rabbi Gavriel Holtzberg and his wife Rivkah Holtzberg, who
was six months pregnant, were murdered with other hostages inside the house by
the attackers. The bodies of six hostages, including Rabbi Holzberg and his
pregnant wife, were found by commandos. According to doctors, the victims had
been tied up and tortured before being killed.

End of the attacks

By the morning of 27 November, the army had secured the Jewish outreach
center at Nariman House as well as the Oberoi Trident hotel. They also incorrectly
believed that the Taj Mahal Palace and Towers had been cleared of attackers, and
soldiers were leading hostages and holed-up guests to safety, and removing bodies
of those killed in the attacks. However, later news reports indicated that there were
still two or three attackers in the Taj, with explosions heard and gunfire
exchanged.Fires were also reported at the ground floor of the Taj with plumes of
smoke arising from the first floor.The final operation at the Taj Mahal Palace hotel
was completed by the NSG commandos at 08:00 on 29 November, killing three
attackers and resulting in the conclusion of the attack The security forces rescued
250 people from the Oberoi, 300 from the Taj and 60 people (members of 12
different families) from Nariman House In addition, police seized a boat filled with
arms and explosives anchored at Mazgaon dock off Mumbai harbour

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ATTACKERS

There were ten gunmen, nine of whom were subsequently shot dead and one
captured by security forces. Witnesses reported that they looked to be in their early
twenties, wore black t-shirts and jeans, and that they smiled and looked happy as
they shot their victims.

On December 9, the ten attackers were identified by Mumbai police, along

with their home towns in Pakistan: Ajmal Amir from Faridkot, Abu Ismail Dera
Ismail Khan from Dera Ismail Khan, Hafiz Arshad and Babr Imran from Multan,
Javed from Okara, Shoaib from Narowal, Nazih and Nasr from Faisalabad, Abdul
Rahman from Arifwalla, and Fahad Ullah from Dipalpur Taluka. Dera Ismail Khan

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is in the North-West Frontier Province; the rest of the towns are in Pakistani
Punjab.

INDUSTRIAL EFFECT

HOTEL INDUSTRY:
One of the fastest growing sectors in India, the hospitality sector has been hit
severely in the last one year. The 26/11 attacks on Mumbai and the fall in demand
due to the recession, dented the industry's revenues.
With travel advisories against travelling to India, the number of tourist arrivals
dropped. One year after the gruesome attacks, The Oberoi-Trident and the Taj
Mahal Hotel, which bore the brunt of the terrorist attacks, have seen occupancy
levels go down.
During the last one year after the terror attacks, the Trident has seen
occupancy levels drop by 16 per cent. The Oberoi is still not open. Post 26/11,
Indian companies have become more aware about security issues. But are the
hotels safer now? No, say experts and give their reasons for it too. . .
While some hotels are tightlipped about security arrangements, others say the
security of the guests is the topmost priority and they are spending more on
security, but experts point out that there is still more to be done.

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"The biggest threat India Inc faces is from terrorism. The hotel industry is not
secure today. Just setting up barricades will not help unless internal security
measures are enhanced. The people behind the machines must be well trained,"
says Shah Amber, consultant (information security management services),
Mahindra Special Services Group.
The government spend on security has gone up by 35-50 per cent with the safe
cities project and securing of vital installations. Aviation, power, transportation
sectors have increased spend on security.
However, the private sector is yet to invest more in security measures, says
Pramoud Rao, managing director, Zicom Electronic Security Systems and
president, Mumbai Chapter, Fire Safety Association of India.
"The hotels are still not secure. The guards who check the cars do not know
anything about explosives, they don't even know if ammonium nitrate is a liquid or
a solid. They do not know what RDX is. The security guards and barricades are
just to scare innocent people and not the terrorists. There needs to be a change in
the Indian mindset. Despite many terrorist attacks, Indians still feel it is too
expensive to invest in security," Rao says.
Hotel security is a costly business. Hotels want to remain profitable so they try
to spend less on security upgradation.
Though all good hotels have invested a lot on security and equipment, more
can be done. Hotels are doing a business and they need to register profits. 
Everyone is bound by budgetary constraints, so it is a matter of perception in the
eyes of the owners/management as to what is the optimum that can be expended on
security systems," says Pramathesh Raina, consultant on hotel and aviation
security.
The security equipment market size is pegged between Rs 1,250 and Rs 1,500
crore (Rs 12.50-Rs 15 billion). It is growing at an annual rate of 20 per cent,
according to Pramoud Rao.
But this is dismal considering that India is a target of many terror attacks and
has a population of over one billion.
Security equipment makers are seeing sales pick up after the recession. Zicom's
sales have improved post 26/11 as the government has increased expenditure on
CCTV cameras and law enforcement equipment like explosive detectors, etc.

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As far as the government is concerned, various steps are being taken. The
response time during a crisis has certainly come down. They have enhanced and
procured modern equipment, according to Shah Amber.
However, the human factor should never be under-estimated, say experts. "The
most sophisticated of equipment is useless in the hands of an ill-trained person.
Regular training and periodic rehearsals in emergency response is the key to
effective security. I would always prefer to have a trained and motivated guard
with the proper security mindset and the basic equipment, rather than an ill-trained
or casual person with the state-of-the-art security equipment," Pramathesh Raina
explains.

However, hoteliers insist that they have taken all possible measures to make
sure the guests are safe. "Security has been tightened at the Trident hotel.
Baggage scanners, hand held devices, increased camera surveillance, regular
patrolling and screening of vehicles are taking place. The spend on security has
been increased by Rs 40 lakh (Rs 4 million). However, preventing terror attacks is
primarily the responsibility of the state law enforcement agencies," says Kanan
Udeshi, manager (communications), The Oberoi Group.

At the Taj Mahal Palace & Tower in Mumbai, the entire portico is cordoned
off with just a small makeshift gate to one corner guarded by security personnel.
"You can no longer drive into the Taj Palace Hotel portico, you have to stop the
vehicle on the road and get in through this gate. The portico has turned into a
security checkpoint. However, at the Taj President you can drive till the portico,"
says a visitor.
The Taj officials declined to give details of security arrangements. "We cannot
elaborate on the measures taken as it would be breach of security. We have moved

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on, our guests are positive and have come back," says Nikhila Palat, spokesperson,
The Taj Group. 

“The job of the security staff at the hotel is much more difficult than in any other
industry. This is because he has to present a polite and welcoming demeanour and
yet has to deter criminals and persons of questionable intent from entering the
hotel. Security cannot be so overbearing that it discourages guests from patronising
the hotel, yet it has to be overt enough to make a guest feel secure," says
Pramathesh Raina.

INDIAN ECONOMY:

World in recent past, has witnessed several economies burning with disaster &
crisis. Today every nation faces some or the other economic, social or communal
unrest. Further, globalization has enabled the impact of these tremors to be felt
even at remotest part of the world. India till FY  2008 had seen a steady growth
with its GDP shining as high as 9.3%. Subsequently, the economy was hit with US
Sub Prime Crisis, Satyam scandal & the Mumbai 26/11 Terrorist attacks.

Many believe that terrorism can't hamper ones economic activity as it only destroy
a small fraction of the stock of capital of a country. However, a broader look at the
geo-political & economical scenario can easily erode this misconception. India has
been facing the terrorism threat as long as since 1970.  Terrorism in India is

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primarily attributable to Islamic, Naxalite and various other radical movements. At

least 232 of the country’s 608 districts were afflicted, at differing intensities, by
terrorism. Over a period of time terrorism has severely affected Indian economy. 
Following are the issues that had been major hindrance for Indian economic
growth:

A] SHORT-TERM EFFECT

1) Loss of Human Capital

The human costs have been horrendous. Estimates are in past 5 years 4000+ were
killed in terrorist attacks. This puts India next to Iraq both in terror deaths and
terror incidents. The recent 26/11 Mumbai attacks itself left 257-300 dead and 700
injured which includes several high profile individuals such as Shri Ashok Kapur,
chairman of Yes Bank who was killed in attack.

2) Investor Behavior
Frequent attacks on commercial & government institutions shatter the confidence
of the investors causing heavy investment drainage. One example of the same is
the terrorist attack in Indian Parliament in 2001, which internationally provoked
insecurity & discouraged the investors (FII's & FDI's), obstructing the economic
growth. A heavy impact of this can be observed at the stock market that keep
diving down post any major terrorist event.

3) Short Term Financial Loss

In short term the obstacles like loss suffered due to the diversion of business away
from the city to other locations, lost earnings of public due to disability and trauma
among survivors etc. drains out the productivity levels & impact the respective
economy adversely. Post 26/11 the Taj & Trident Hotels incurred heavy loss as
operations were halted for 3-4 months. After 26/11 Mumbai attack Pak cricket
team had to cancel its Mumbai tour due to which BCCI has incurred a loss to the
tune of INR 120 crore. Another such incident was Post Ex-PM Indira Gandhi's
assassination 1984 riots which hit the economy severely especially the Agriculture
& Transport industry that lost hundreds of crores.

4) Retrenchment effect on Specific Industries

The Jaipur serial blasts, J&K Terrorism & Mumbai 26/11 attacks did have
immediate and concentrated impacts on a number of industries: most notably,
airlines,  aerospace, travel, tourism, insurance, lodging, restaurants, recreation and
related activities. Gross earnings from foreign tourists are currently around 1%  of
GDP. Post 26/11 terrorist attack estimates suggest that nationally hotels have seen

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about 60% booking cancellations. Hotel occupancy in western India is  down some
25% and rates have plunged. These industries suffered concentrated economic and
job losses. Of course, regions or localities with heavy  concentrations of these
industries suffered disproportionately as well.

B) LONG-TERM EFFECT

1) Political Instability
The assassinations of 2 Ex-PM of India, Mrs. Indira Gandhi, Mr. Rajeev Gandhi
already had jolted Indian politics & economy at large. India had lost 2 of its 
strongest pillars which otherwise would have taken Indian politics, Business &
industry at unimaginable heights. Recently speaking the siege of South Mumbai 
has taken toll as home minister Shivraj Patil, Chief minister Vilasrao Deshmukh &
Home minister R.R. Patil had to resign. This further unstabilized the  Indian
industry from a long-term perspective. The Political instability at times have also
let to erosion of FII's & FDI's.

2) Global Implications
India, post Kargil war then Attack on Parliament now 26/11 has lost millions of
business as the trade link between the two countries are frozen during such period.
Agri-Exporters in bordering states have taken heavy burns. This has resulted in
unemployment in these regions, which in turn again triggers riots. 26/11 Attack
involved foreign hostages  and places where business leaders, executives and
foreigners frequented. This will lead to a drop in investments.

3) Long Term Financial Loss

The direct economic  damage done by terrorist attacks: buildings and infrastructure
destroyed, productive lives ended. The structural damages post 26/11 attacks was
amounting to total of INR 500 crores, which  subsequently took its toll on the
insurance industry. Another form of longer-term costs security involves the 
opportunity cost of spending additional money to fight terrorism. Currently India
ranks on 9th position in the world for highest military expenditure (2009-10),
which amount to sum total of USD 32,700,000,000. Further, a variety of new
spending on security occurred after this incident. As all this happens,  economic
resources will be directed to shoring up security and diverted away from more
productive private sector.

TOURISM INDUSTRY:

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Viewing India has "Incredible India" now looks for its gleam. Terror attacks
continuously in last year (2008) have come as a whammy for India's Tourism and
Hospitality industry.

We can see now that the most famous tourists places in India are having lonely
roads with very few tourists all round .Goa Tourism has lost almost half of its
tourists. If we talk in figures-we can compare that there were 25 lacs tourists(2007-
08) whereas only 11 lacs (2008-09) submitted a report by Hoteliers and Tour
operators. Goa attracted large crowds despite repeated security threats and warning
of Bali like Bombings. But this time, situation is worst.

If we step into the high tourist season in India(Nov-March) there was already a
dip of 15% because of US recession but IATO (Indian Association of Tour
operators) released a news that there will be another dip of 10% because of the
terror attacks. Travel advisories have put a warning of a high terrorist threat
throughout India and especially the attacks on the luxurious hotels have added to
the negative impact .Hotel Industry is viewing 18% dip in revenue .Hospitality
industry has been hit harder with a dip of 40% in Business since the attacks. Even
the domestic tourism has slowed down .Smaller cities like Chandigarh and Punjab
are confronting 20-30% cancellations.

Even the aviation industry are in for a rough ride ahead with cancellations of
trips by overseas visitors. Tourism industry brought 12000 crores to the
government but this year it is expected to be a drop of 20 to 25% .Drop in the
tourists will take away a good chunk of seasonal income .Situation is grim for the
industries mentioned above which will have its impact on gross domestic product
of our country. Unfortunately, India does not have politicians like Rudy Giuliani,
Spunky Mayor of New York who rallied the city after an attack .

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STOCK MARKET:

It has viewed that financial markets are directly or indirectly the victims of
Terrorist attacks .It has been found that attacks in countries which are wealthier
and more democratic are associated with larger negative share price reactions.
Also, human capital loss such as kidnappings of company executives are
associated with larger negative stock reactions than physical loss such as bombings
on buildings.  One reason that the country expects to observe a reaction in the
stock price of affected firm is because investors considers tangible and intangible
losses as well as increased cost of doing business in new terrorism aware
environment. It also leads to a decision such as when to reopen the market taking
into consideration the factors like safety of personnel returning to work and
viability of infrastructure and communication in systems. If we take the example of
terror attacks of 9/11, it undermined the stability of the US and international
financial system. The aftermath of the attacks was that financial markets were not
only confronted with, major activity disruptions caused by massive damage to
property and communication systems but also with soaring levels of uncertainty
and market volatility .Impact of terror attack is visible on the stocks of various
industries of the country which has been attacked. Also, the investors confidence
level is deteriorated beyond the national boundaries because of contagion effects.

It can be concluded that when the return deviation is large and statically
significant, the market saw the events as important.

This year has been the worst time for India's financial hub. Analysts feel that
the fear will continue to overshadow events for the long time. There would be
incalculable impact on investors climates, tourism and hospitality industries. The
stock markets bellwether Index, Sensex almost down after a day, a big terror
incident in the country took place. Due to attack, financial capital of India has been
hit by 4000 crores.

Market reopened for trading on Nov 27, and Sensex opened at 1.5% or 137
points down before regaining some of its customary defiance to terror and close
0.7%higher. Overseas investors have pulled out a record $13.5 Billions from
Indian Stocks in 2008 as of November 25 causing Benchmark BSE sensitive Index,
to slump 56%.Taj Mahal Hotel saw a sharp dip of nearly 17% in share price to Rs.
40.20 marking a new 52 week low. Decline was accompanied by an abnormal rise
in volumes. East India Hotels, after opening weakly, share price dipped to a low of
Rs.83 before recovery to close at Rs. 97.75. Volumes in share did not show any

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abnormal variation on BSE. Jet Airways was down as Rs. 129 against earlier
closing of Rs. 138. Kingfisher airlines came down to Rs. 27.50.

Particularly 55% drop Indian equity Indexes, major mutual fund managers
like Mark Mobius of Templeton Asset management and Devan Kaloo of Aberdeen
Asset Managers have been insisting that India democratic traditions are strong
enough to withstand terrorism.

RECOVERY OF INDUSTRIES AFTER

ATTACK

The share prices of companies owning five-star hotels, which had bore the burnt
of the 26/11 terrorist attack on Mumbai, have witnessed a strong bounce-back.

However, market analysts say that after the attacks, hotels have been operating
by reducing their average room rates.

The shares of the Tatas-promoted Indian Hotel Company, the owner of the Taj
Mahal hotel at Apollo Bunder, and East India Hotel, which owns the Trident at
Nariman Point in Mumbai, which were targeted by the terrorists, have risen 147
and 202 per cent, respectively, from the time markets started rising this year.

The rise is significant from March 2009, after which the Sensex, the equity
benchmark index of the Bombay Stock Exchange (BSE), has risen 111 per cent
from its all-time low.

Just a day before the first anniversary of the attacks, Indian Hotels shares closed
at Rs 86, while EIH was quoted at Rs 132.60 on BSE. The shares of both had
fallen nearly 30 per cent in a few days of the siege on their premises ending. They
fell further when the broader markets went into a free fall.

Market analysts say post 26/11, business has come at high a cost. According to
Amol Rao, a hospitality sector analyst at Mumbai’s Antique Stock Broking, while
the fall in stock prices was mainly due to the attack, the rise had been partly due to
a recovery in markets. “The entire hotel industry had been bogged down for
several months after the attacks. Post 26/11, the average rate per room in the hotel

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industry has decreased by nearly 40 per cent. Even though the occupancy has gone
up by nearly 60 per cent, the overall impact on net profit will be very less,” said
Rao. Rao says hotel stocks look expensive as a huge supply of shares is expected
due to delayed projects.

“From security point of view, both hotels seem to have taken precautions, so
tourists would want to go, even while there may be some who may not want to
return due to bad memories. But institutional investors had not sold these stocks as
a keen-jerk reaction after the attacks. They are still watching the space as economic
recovery keeps action going,” said Kashmira Mehta, institutional dealer at CD
Equisearch.

Other top hotels whose stocks have done well include Taj GVK Hotels, based
mainly in South India. Its shares have risen 270 per cent from their low in March
this year. Tulip Star Hotel has risen 149 per cent during the period. Hotel Leela
Venture is up 140 per cent, Asian Hotels is up 112 per cent while Royal Orchids
has gained over 80 per cent during the period.

One year. In the intervening period, the stock market has surged nearly 100 per
cent since its lows, the Congress government won the general elections
unchallenged and has managed to hold on to the reins of the state of Maharashtra,
inflation has shot through the roof, the much vaunted Mumbai Sea Link has finally
opened, many Nanos have hit the road, we have witnessed floods and drought, and
tourism is finally limping on the road to recovery.

Or is it? According to data compiled by STR Global for September 2009, hotels
in Asia Pacific recorded a year-on-year occupancy rise of 1.4 per cent to reach 62.3
per cent; yet ADR declined 7.7 per cent to US$ 123.72, and RevPAR fell 6.3 per
cent to US$77.12. Two of the worst performing cities in this analysis were New
Delhi and Mumbai. New Delhi witnessed a double-digit occupancy decline of 12.2
per cent to 63.2 per cent and the largest ADR decrease, falling 37.2 per cent to US$
157.20. New Delhi (-44.8 per cent to US$99.32) and Mumbai (-31.3 per cent to
US$ 103.27) reported the largest declines in RevPAR for the month. Meanwhile
the growth rate of foreign tourist arrival was at a decline during January to October
2009 of 0.9 per cent over the corresponding period of 2008. Grim statistics indeed.

But statistics never reveal the complete picture without taking into consideration
the underlying context. India has emerged over the darkest period of tourism post
the Mumbai terror attacks. Add to this the economic recession and the increase in

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room inventory, it has been the singularly most difficult time period which has
shaken up the way things work.

Despite that, there is a silver lining surrounding the dark clouds. Consider the
Foreign Exchange earnings from tourism in Rupee terms, during January-October,
2009 it was 4.1 per cent over the corresponding period of previous year. The total
Foreign Exchange earnings during this period were Rs 42,395 crore or US$ 8.7
billion as per the Ministry of Tourism (MoT) statistics. In 2008 domestic tourists
hit the 563 million mark, while total number of tourism jobs in the country during
2007-08 was 49.8 million.

Several initiatives have been taken over the year. The Reserve Bank of India
(RBI) has de-linked credit for hotel projects from commercial real estate, thereby
enabling hotel projects to avail credit at relaxed norms and reduced interest rates.
In addition, the External Commercial Borrowing (ECB) norms have been relaxed
by Ministry of Finance to solve the problem of liquidity being faced by the hotel
industry due to economic slow down. The focus of the MoT is on the
Commonwealth Games which are less than a year away, which in a way will make
or break India's image as a tourist friendly destination.

The year that will be: 2010:

In what environment is tourism functioning today? A Polish sociologist

Zygmunt Bauman has summed up the world situation succinctly with the term
'Liquid modernity' that describes the present condition of the world where an
individual must act, plan actions and calculate the likely gains and losses of acting
(or failing to act) under conditions of endemic uncertainty. Such lives require
individuals to be flexible and adaptable - to be constantly ready and willing to
change tactics at short notice, to abandon commitments and loyalties without regret
and to pursue opportunities according to their current availability.

The current world scenario is volatile, as described. In the hospitality industry,

this is best exemplified by the sky-high ARRs that prevailed two years ago, which
have sunk to abysmal lows. There are other concerns for global travellers -
pandemics, political instability, xenophobia and terrorism. But the biggest

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detriment to an informed travel decision is fear, and there is a dire need for a clear
and consistent message to be sent out to reassure travellers today by a destination.
Today's traveller desires an experiential holiday where he can connect to different
cultures, cuisines and people. The cash-rich, time-poor traveller takes shorter
breaks and rushes to short and medium haul destinations. Travel decisions are on
the spur, for the moment, and the traveller wants the best value out of a deal,
whatever segment he belongs to.

VOICES FROM THE INDUSTRY:

The incident of November 26, 2008 certainly made us more aware about the
sensitivity with which we need to look at hotel security at all times. I
feel that a learning process needs to be devised as today we are much
more aware of the changes technology has brought into hospitality.

My career challenges have never changed throughout but there has

been a constant learning going on. Security technology is one such
area of learning.

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The business strategy of the hospitality sector overall hasn't changed at all. It is all
about imbibing the new facets in hospitality to address customer needs. Hotels
have to provide secured environment and therefore, knowing about applications
that can secure them has become of critical importance. So, the management has to
know everything from architecture, engineering, security and so on. However, it
needs to be said that as hotels, one can address security but not terrorism.

Rattan Keswani,
president, Trident Hotels (part of The Oberoi Group)

Mumbai still hasn't recovered completely, the business is not the

same as it was last year before the attacks. Also the recession hasn't
made things simpler.

Security has definitely taken a priority and all hoteliers are taking
efforts to see that what happened on November 26 last year is not repeated. The
repercussion being that hotels are becoming more and more like fortresses, with
various checks and security measures. It is often very daunting for a guest who
walks in.

It is only so much the industry can do. The only thing that I can hope for is that our
armed forces are more capable and quick on reacting to such attacks in the future.

Anil
Madhok
MD, Sarovar Hotels and
Resorts

ROLE OF COMMUNICATION
Media Sensationalism of the 26/11 Attacks: Is it justified?

As the terror unfolded on the streets of Mumbai, television channels gave a

minute-by-minute coverage of information about the November 2008 attacks,

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some of which was considered confidential. Let’s take a look at media

sensationalism issues and find out if we have truly lost our sensitivity, somewhere
along the way.
Mumbai, 26/11/08: People screamed… petrified and distraught, looking for near
and dear ones. Some were trapped while some were held as hostages. The raging
fire at the Taj Hotel only added to the misery. Hundreds were killed and many
more injured.
Reading reports about the terrorist attacks in Mumbai sent shivers down my
spine. Seeing the news on television made me realize the agony. But there was a
different side to this story unfolding on television. News reports continually
focused on each and every move of the terrorist attacks at Taj and all the other
areas of Mumbai. People remained glued to their television sets as the dreadful
drama unfolded on television. While brave officers lost their lives, television
journalists held microphones before distraught people to know their reactions.
Every minute, channels gave ‘live coverage’ about Mumbai’s 26/11 terror attacks.
As ‘Breaking News’ flashed across all the television channels, one wondered if it
was ‘yet another scoop’! Brave journalists rushed with their cameramen to capture
live footage of terrorism in Mumbai. But then, this brings one question to my
mind… can we really call this a brave attempt?

One could get a clear picture that the Indian security services were trying their
best to manage the crowds and figure out ways to get into the Taj. But the throngs
of news reporters and cameras were something the security services did not ask
for. On one hand, brave soldiers and people from the police force had to tackle
important issues of terrorism and assist in the rescue operations. On the other hand,
they had to tactfully handle the flashbulbs and microphones. Is the media justified
in causing stress to the police force and security services and adding to the chaos of
the situation? What if a journalist was hurt in a situation like this? Who is to
blame? Is this media sensationalism at its best… or should I say, at its worst?

The events were unfolded in detail not only on television but also on many
websites. Reports reveal that the Indian Government even had to request the
citizens of Mumbai in particular, to avoid giving such live coverage. Questions
have been raised about the amount of information to be revealed on television.
This is simply because, such channels are accessible to all, including the people
who have planned this ghastly terror attack.
Media can be a powerful tool to help people in a time like this. Media plays an
important role when it comes to asking for help for the needy, flashing news about
the status of the rescued people and such issues that can help improve the situation
or help people in need.

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However, giving a minute-by-minute coverage about important activities by

the security services is surely not a wise move and can never be justified.

Whilst the people of India are still reeling under the aftereffects of the terror
attack, the whole situation seems to have given inspiration to filmmakers in India!
Indian filmmaker, Ram Gopal Verma has raised quite a few eyebrows with his
visit to the site with the then Head of State of Maharastra, Vilasrao Deshmukh. Is
this yet another way of thinking and planning about possible hit flicks in sensitive
and tragic times like these? Well, the reactions from Bollywood stars have revealed
how strongly they condemn his visit. Perhaps Ram Gopal Verma should
understand the gravity of the situation and be sensitive towards the people of
Mumbai!

Indian musician, Vishal Dadlani (of the music duo Vishal-Shekhar fame) has
clearly voiced his opinion about media sensationalism of the terror attacks in
Mumbai. He has filed a petition hoping for a change in the way news is handled by
media personnel. This petition is available online and talks about the irresponsible
ways of the media. He seeks intervention in the live coverage broadcasted by the
media and regulation of the news reports to avoid any form of misrepresentation of
news or exposure of confidential information.

How far should the media go in divulging important information on the

television? Who will regulate or set a code of conduct to be followed? Questions
like these remain unanswered and we can only hope that every person acts
responsibly and shows a sensitive approach towards such issues.

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THE ROLE OF INDIAN TELEVISION CHANNELS

IN THE 26/11 MUMBAI TERROR ATTACK
There are three themes in the anger against Indian news media’s coverage of the
11/26 Mumbai terror attack –

1. Criticism for broadcasting sensitive information and sensationalizing the news

coverage.

2. Criticism for giving more importance to the attacks on the Taj Mahal and Oberoi
Trident hotels than the attack on the Chhatrapati Shivaji Terminus (CST).

3. Criticism (by Pakistani media) for not questioning the government’s version of
the story.

Most media channels are too busy trying to sensationalize the news to bother
thinking through the consequences of what they’re saying. It’s not just that much
of the coverage seems to be designed to amplify the general hysteria and panic, it’s
also that watching journalists describe what the police are doing or report on who
is still trapped inside the hotels, I find myself wondering whether anyone’s
considered that at least some of that information might be helping the attackers.

It’s not simply a question of whether live feeds have finally been disabled, or
television input to the hotel eventually been cut. It’s not even really a question of
how much the information given out by the media helped the attackers this time
around. The real question – to me, at least – is: if the government needed to clamp
down on the media and cut communication channels in an emergency, could it do
so quickly, efficiently and comprehensively? The answer, based on what we’re
currently seeing, is a frightening no. That’s a vulnerability that future terrorist
groups – groups far more sophisticated in their manipulation of information than
the ones currently attacking Mumbai – could exploit to devastating advantage.

Most of the Indian television news channels have been around for less than five
years. For some, the Mumbai siege, which began Wednesday night, was the first
major event they had covered live, and they rushed to provide nonstop coverage to
the riveted national audience.

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Viewers’ feedback on coverage of the siege has been uneven. While millions of
viewers remained glued to their screens for the latest information, some criticized
the coverage in their blogs — irritated with the hyperbole and melodramatic
rhetoric of some TV reporters.

The live coverage of the attack raised concerns about potential risks to India’s
security operations. Some TV channels showed the positions of security forces
stationed outside the buildings that were under siege, and some aired information
about commandoes’ movements. That alarmed security officials: They worried that
the information might reach the terrorists, who Indian authorities believe carried
cellphones.

Security officials and a broadcasting-industry association eventually asked TV

channels to exercise restraint in what they aired.

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CONCLUSION

It is difficult to distill all that is known about crisis management into one,
concise entry. I have tried toidentify the best practices and lessons created by crisis
management researchers and analysts. While crisis begin as a negative/threat,
effective crisis management can minimize the damage and in some case allow an
organization to emerge stronger than before the crisis. However, crisis are not the
ideal way to improve an organization. But no organization is immune from a crisis
so all must do their best to prepare for one. This entry provides a number of ideas
that can be incorporated into an effective crisis management program.
The world is not undergoing a crisis in the system but a crisis of the system in
which the real
economy has become subservient to financial economy. All solutions must be
based on thisunderlingtruth. Nothing less than a Global Round on a Reconstructed
Economic Order is required to address an integrated reform and restructuring of
the global economy- including finance, trade, investment, production, corporate
codes of conduct, labor standards, systemic risk and environmental regulation. The
efforts of the G20 are puny compared to thecomprehensive and serious process
appropriate to the scale of these converging crises of the 21st century.

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BIBLIOGRAPHY

For this project we have taken the reference from the various books and sites:

BOOKS:-

 Business Environment: - Vipul Prakashan.

 Effective PR

WEBSITES:-

 www.google.com.

 www.wikipedia.com.

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