Government Business Interface State participation in business At what level of state participation do business managers become concerned about

the issue of loss of local control? Why? There is threshold level of state participation when businesses managers become concerned about the issue of loss of local control beyond this level state-owned companies become the assault weapons of the corporate state. Having mastered the main principle of state-corporatism "privatize profit, nationalize loss" - they turn to massive intervention in the private sector. Managers become concerned about the loss of local control because companies that are still in private hands resemble ever more closely their state-owned siblings. Any request from the state whether it's a donation to a "necessary" project or the sale of the company itself to "correct" buyers - should be fulfilled. Managers become concerned about the loss of local control because declining is not an option Managers become concerned about the loss of local control because some companies are confronted with the maximum possible (and sometimes impossible) tax bills; others get unique exemptions. In some cases the sale of shares to foreigners is prohibited; in others it gets overwhelming state support (along with financing beyond any limits set by law). The critical level of state participation is reached when one set of buyers pay one price; another, five times as much. The critical level of state-participation may seem unclear to some managers at first blush. This critical level is marked with the offering privileges, subsidies, credits, powers and authority to those who are "ours." This critical level can be identified by the practice of handing out all sorts of state-owned and national resources to members of the corporation, both current and prospective. "Ours-ism" is a level of state participation of protecting "our own" businesses not because they're right, but because they're "ours." Managers become concerned about the loss of local control because it is a level of state participation that is an aggression to "others." What's wrong with that? What is so awful if state corporations become the driving force of the economy? If private companies carry out the wishes of the government? If the authorities inflate the non-market sector, strengthen state controls, set restrictions for "strategic" reasons? If state capitalism displaces a market economy? Managers become concerned about the loss of local control because the primacy of law and equality before law are absent, and inequality and discrimination triumph. Please note the lacunae of the question given to you. First, the question does not give you the context of state participation. Second, the question does not mention the country in which these business managers operate. Third, the issue of loss of control is relative to the level of control that existed earlier. The question does not give you the previous level of state control.

Still, this is an excellent question relating to business managers and state participation. Please use the above guidelines and write an excellent answer. Wish you all the best! Chamber of commerce A chamber of commerce is also known as a board of trade, is a kind of business network. Its aim is to enhance the business interest of the members. The chambers could have a board of directors, who in turn would recruit a President, CEO and other required staff for the administration of the chamber. Chambers Of Commerce is formed with the purpose of

Strengthening Local economy. Creating business networking opportunities. Communicating with government for the business community. Addressing the grievances of members. Creating a strong local economy.

ASSOCHAM-organization representing Indian business in totality FICCI-Federation of Indian Chambers and Commerce and Industry Indian Merchants Chamber-an apex body of trade, commerce and industry The Associated Chambers of Commerce and Industry - an organization representing all sectors of the Indian industry EU Chambers Of Commerce-To facilitate greater business interaction between EU and India. Indian Chamber of Commerce-To accelerate agricultural growth in India Bombay Chamber Of Commerce-Associated with the economic growth of Mumbai city Governments policy with regard to Small Scale Industries After attaining independence in 1947 India adopted mixed economic planning as a method to achieve economic development. Along with the Large Scale sector the thrust was on Small Scale sector because of it decentralized, its small size, use mainly indigenous technology, employment intensity and its suitability for rural area with limited techno-economic structure.

Industrial policies over the year have focused to promote SSIs through various incentives related to financial, fiscal and infrastructure measure; along with a heavy industrial base. The various provisions under Industrial Policy Resolutions formulated by the government in assisting the small scale industries (SSI) The various fiscal incentives for SSIs 1. INDUSTRIAL POLICY RESOLUTION 1948 1.1 SSIs are particularly suited for the utilization of local resources and creation of employment opportunities. 1.2 The primary responsibility for developing small industries by creating infrastructure has been provided to state government. 1.3 Central government frame the broad policies and coordinates the efforts of State Government for development of SSIs. 2. INDUSTRIAL POLICY RESOLUTION 1956 2.1 It stated that besides continuing the policy support to cottage, village and small industries by differential taxation or direct-subsidies, the aim of state policy would be that the development of this sector is integrated with that of large scale industry. 2.2 The focus was to improve the competitive strength of SSIs. 2.2.1 To achieve these 128 items were exclusively reserved for production in SSIs, and 166 items were reserved for exclusive purchase by government from this sector. 3 INDUSTRIAL POLICY RESOLUTIONS 1977 The main thrust of policy was effective promotion of cottage ,village and small industries widely dispersed in rural area and small towns. This thinking specified the following things: 1. 504 items were reserved for exclusive production in the small scale industries. 2. The concept of District Industrial Centers (DICs) was introduced to that in each district a single agency could meet all the requirement of SSIs under one roof. 3. Technological up gradation was emphasized in traditional sector. 4. Special marketing arrangement through the provision of services, such as, production standardization, quality control, market survey, was laid down.

4. INDUSTRIAL POLICY RESOLUTION 1991 The basic thrust of this resolution was to simplify regulations and procedures by relicensing, deregulation. Their salient features are 1. SSIs were exempted from licensing for all articles of manufacture. 2. The investment limit for tiny enterprises was raised to Rs.5 lacs irrespective of location. 3. Equity participation by other industrial undertaking was permitted up to a limit of 24% of shareholding in SSIs. 4. Factoring services were to launch to solve the problem of delayed payment to SSIs. 5. Priority was accorded to small and tiny units in allocation of indigenous and raw materials. 6. Market promotion of products was emphasized through co-operatives, public institutions and other marketing agencies and corporations. 5 INDUSTRIAL POLICY PACKAGE FOR SSI 2001-02 This policy emphasizes the following: 1. The investment limit was enhanced from Rs 1crore for to Rs 5 crore for units in hosiery and hand tool sub sectors. 2. The corpus fund set up under the Credit Guarantee Fund Scheme was increased from 125 crore to 200 crore. 3. Credit Guarantee cover was provided against an aggregate credit of Rs 23 crore till December 2001. 4. 14 items were de-reserved in June 2001 related to leather goods, shoes and toys. 5. Market Development Assistant Scheme was launched exclusively for SSI sector. 6. Four UNIDO assisted project were commissioned during the year under the Cluster Development Programme. 6 POLICY PACKAGE FOR SME 2005-06 THIS POLICY PACKAGE CONTAINS THE FOLLOWING POINTS 1. 180 items were dereservation.

2. Small and Medium Enterprises were recognized in the services sector , and were treated on par with SSIs in the manufacturing sector. 3. The corpus of the Credit Guarantee Fund was raised from Rs 1132 crore in March 2006 to Rs 2500 crore in five years. 4. Credit Guarantee Trust for Small Industries (CGTSI) was advised to reduce the one time guarantee fee from 2.5% to 1.5% for all loans. 5. Insurance cover was extended to proximately 30,000 borrowers, identified as chief promoters, under the CGTSI. The sum assured would be Rs 200000 per beneficiary and the premium will be paid by CGTSI. 6. The emphasis was laid on Cluster Development model not only to promote manufacturing but also to renew industrial towns build new industrial township. The model is now being implemented, in nine sector including khadi and village industries, handlooms, textiles, agricultural products and medicinal plants. FISCAL INCENTIVES TO SSIs Fiscal incentives are provided through tax concessions granted in the form of exempted of direct or indirect taxes livable on production or profits, besides special tax concessions. These incentives have been provided to promote the SSIs and discussed in following: Tax Holiday With effect from financial year 2005-06, deduction in respect of profit and gains for small scale industrial undertaking is available under Section 80IB. Small scale industrial undertaking can claim deduction at the following rates: 1. If SSI unit is owned by a company , the deduction available is 30% for first 10 year,

2. If SSI unit is owned by a co-cooperative society, the deduction to be availed is 25% for first 10 years, and 3. If any other person owns SSI units ,the deduction to be claimed is 25% for first 10 years. TAX EXEMPTION CONDITIONS 1. No small scale or ancillary undertaking shall be subsidiary of, or owned or controlled by other industries undertaking. 2. The SSI unit should commence business between 1st April1991 and 31st March 2002. 3. SSI unit can manufacture any nature/type of goods /article to avail deduction.

4. They should employ at least 10 workers in manufacturing process carried out with aid of power or at least 20 workers in manufacturing process carried out without the aid of power. 5. This tax exemption from total income is allowed from the assessment year in which the unit being to manufacture or produce goods or articles. EXCISE CONCESSIONS Government of India has provided a major relief by grating full exemption from the payment of central excise duty on a specified output and thereafter slab-wise concessions. The following concessions are available to them in this regard 1. SSI units producing goods up to Rs.100 lakhs are exempted from payment of excise duties. 2. SSI units having turnover less than Rs.60 lakhs per annum need not have a separate storeroom for storing the finished products. 3.SSIs are also not required to maintain any statutory records such as daily stock account of production and clearance , raw material account ,personal ledger account etc. their own record are adequate for excise purpose. 4. There is no distinction between registered and unregistered units for SSI concessions for SSIs have been based on annual turnover rather than SSI registration. Duty liability is to be discharged by 15th of following month. 5. The SSI exemption is available for home consumption, as well as in respect of goods exported to Nepal & Bhutan. 6. Normally, excise officers are not expected to visit SSI units paying less than Rs.11lakhs duty annually. 7. With effect from 1-4-1994, Gate Pass System was replaced by manufacturer invoice to cover clearance of goods as the duty-paying document. General Information

What is a Micro, Small or Medium Enterprise? The earlier concept of Industries has been changed to Enterprises

Enterprises have been classified broadly into: (i) Enterprises engaged in the manufacture / production of goods pertaining to any

industry; & (ii) Enterprises engaged in providing / rendering of services. - Manufacturing enterprises have been defined in terms of investment in plant and machinery (excluding land & buildings) and further classified into: -Micro-Enterprises - investment up to Rs.25lakh. -Small-Enterprises - investment above Rs.25 lakh&uptoRs.5crore -Medium Enterprises- investment above Rs.5 crore & up to Rs.10 crore. Service enterprises have been defined in terms of their investment in equipment (excluding land & buildings) and further classified into -Micro-Enterprisesinvestment upto Rs.10 lakh. -Small-Enterprisesinvestment above Rs.10 lakh & up to Rs.2 crore. -Medium-Enterprisesinvestment above Rs.2 crore & up to Rs.5 crore It is not necessary to engage in manufacturing activity for self-employment. One can set up service enterprises as well.

Government clearances for establishing a new enterprise Siting Guidelines for Industries Industrial development significantly contributes towards economic growth. However, Industrial progress brings along with it a host of environmental problems. Many of them could be avoided if Industries are located on the basis of environmental considerations. Guidelines where and where not an Industry can be located in Punjab are as under: 1. An industrial unit shall be allowed only in the permissible industrial land use zone specified in the Master Plans of Cities/Towns in accordance with the zoning regulations. 2. No industry shall be located within Lal Lakir as notified in each village and in case the industry proposes to use solid fuel it should be located beyond 100m from Lal Lakir. The above is not applicable to all such category of industries for which, specified guidelines for siting have already been prescribed & may be prescribed subsequently. 3. Consent to establish shall not be granted to any industry, which proposes to establish in any approved residential areas/colonies developed by any Government Agency such as PUDA, Municipal Corporation/Council, Improvement Trust.

4. No construction of the Polluting Industry shall be undertaken before getting the clearance from the Environmental angle from the competent authority and the prior approval for the building plans from the competent authority. 5. Industries in Chandigarh periphery shall be permitted only in the permissible industrial land Zones of Master Plan of the identified ring town and in the Free Enterprise Zone. Change of Land Use Approval of Layout Plan Approval of Building Plan Sanction of Water and Sewerage Connection Requisition / Sanction / Release of Power Connection Consent to Establish(NOC)/ Operate/ Authorisation for Storage, Transport, Disposal of Hazardous Wastes Registration and Grant / Renewal of License Under Factories Act Approval for Use of Forest Land Registration Under VAT

Public distribution system (PDS) and Government control over price and distribution Public Distribution System (PDS) is an Indian food security system. Established by the Government of India under Ministry of Consumer Affairs, Food, and Public Distribution and managed jointly with state governments in India, it distributes subsidized food and non-food items to India's poor. Major commodities distributed include staple food grains, such as wheat, rice, sugar, and kerosene, through a network of Public distribution shops (PDS) established in several states across the country. Food Corporation of India, a Government-owned corporation, procures, maintain and issue food grains to the state. Distribution of food grains to poor people throughout the country is managed by state governments. As of date there are about 4.99 lakh Fair Price Shops (FPS) across India. PDS can be distinguished from private distribution in terms of control exercised by public authority and the motive predominantly being social welfare in contrast to private gain. Broadly, the system includes all the agencies that are involved from procurement stage to the final delivery of goods to the consumer. The agency that is involved in the process of procurement,

transportation, storage and distribution are Food Corporation of India (FCI). At the state level it is the civil supply departments/corporations and fair price shops, which are the agencies, involved in provision of PDS. The fair price shops (EPS) are the last link in this process, which are mostly owned by private individuals. Hence, the most important aspect that distinguishes PDS is the involvement of government agencies and government control over the entire distribution system. In terms of both coverage and public expenditure, it is considered to be the most important food security network. However, the food grains supplied by the ration shops are not enough to meet the consumption needs of the poor or are of inferior quality. The average level of consumption of PDS grains in India is only 1 kg per person / month. The PDS has been criticized for its urban bias and its failure to serve the poorer sections of the population effectively. The targeted PDS is costly and gives rise to much corruption in the process of extricating the poor from those who are less needy. Food stamps is an indirect financial support given to the needy and to the underprivileged by issue of coupons, vouchers, electronic card transfer etc. they can purchase commodities at any shop or outlet and would not have to purchase food from a particular shop as in the case of the PDS system in India Management of the PDS Both the central and state governments shared the responsibility of regulating the PDS. While the central government is responsible for procurement, storage, transportation, and bulk allocation of food grains, states governments hold the responsibility for distributing the same to the consumers through the established network of Fair Price Shops (FPSs). State governments are also responsible for operational responsibilities including allocation and identification of families below poverty line, issue of ration cards, supervision and monitoring the functioning of FPSs Under PDS scheme, each family below the poverty line is eligible for 35 kg of rice or wheat every month, while a household above the poverty line is entitled to 15 kg of food grain on a monthly basis Policy Formulation The basic approach to the PDS is decided by the Planning Commission, Government of India after detailed discussions by expert groups. Various plan documents contain the statement of objectives of the PDS as described earlier. The planning Commission, the main policy formulating body of the government decides about the objectives. The PDs has been assigned multiple objectives such as 1) Stabilizing prices of essential goods. 2) Aiming at an equitable distribution of essential goods.

3) Providing essential items to vulnerable sections of the population at reasonable prices. To achieve the above objectives of procurement and distribution of the PDS, the Department of Food Ministry of Food and Civil Supplies prepares the plans. Procurement The Food Corporation of India generally purchases food grains in the regulated markets and pays a commission to the agents for their services. The price paid is fixed by the government on the recommendations of the Commission for Agricultural Costs and prices. In order to facilitate procurement, the prices in surplus states are depressed by restricting movement of grains outside the zones so that the prices closely approximate the support prices. Presently zoning is officially banned. It has been commented that compared to the prices in the open market in consuming states, the price offered by the FCI is generally lower which does not justify its being called as 'incentive price'. Distribution While storage and transportation has been the responsibility of the FCI up to the regional depots, transportation is generally arranged through private contractors. Lifting of grain from the regional depot is the responsibility of the state governments. And it is the responsibility of the fair price shops from the depots, except in some states such as Andhra Pradesh where transportation is provided by the State government up to the Fair Price shops level. The fixation of the total quota to be supplied to each state is determined by the Central Government, keeping in view the production of food grains in the state and the off-take in the previous months, Prices for the consumer is determined by taking into consideration, marketing costs, open market prices, fiscal burden and the paying capacity of the consumer. If the prices are less than the cost of marketing and procurement, the FCI is reimbursed by the government from the general exchequer. A part of this reimbursement is the cost of administration, while part is subsidy to the consumer Consumer Protection Act (CPA) Consumer protection consists of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about productsparticularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of "consumer rights" (that consumers have various rights as consumers), and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints. In India, the relevant agency is the National Consumer Disputes Commission and the Ministry of Consumer Affairs. Also organizations like Akosha.com and Mouthshut.com play a vital role in

helping a consumer articulate their concerns and resolve their problems as well. In India the major law governing the consumer protection is Consumer Protection Act of 1986 -- Under this law Separate Consumer tribunals have been set up throughout India in each and every district in which a consumer [complaint can be filed by both the consumer of a goods as well as of the services] can file his complaint on a simple paper without paying any court-fees and his complaint will be decided by the Presiding Officer of the District Level. Appeal could be filed to the State Consumer Forum and after that to the national Consumer Forum. The procedures in these tribunals are relatively less formal and more people friendly and they also take less time to decide upon a legal [consumer] dispute when compared to the years long time taken by the traditional Indian judicial courts. IN recent years many effective judgment have been passed by some state and National Consumer Forums. Consumer Protection Councils Central Consumer Protection Council 1) - The Central Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council). 2) - The Central Council consists of the following members, namely: a) - the Minister in charge of the consumer affairs in the Central Government, who shall be its Chairman, and b) - such number of other official or non-official members representing such interests as may be prescribed. State Consumer Protection Council 1) - The State Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Consumer Protection Council for (hereinafter referred to as the State Council). 2) - The State Council shall consist of the following members, namely: a) - the Minister in charge of consumer affairs in the State Government who shall be its Chairman. b) - such number of other official or non-official members representing such interests as may be prescribed by the State Government. c) - such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.

3) - The State Council shall meet as and when necessary but not less than two meetings shall be held every year. 4) - The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government. Consumer Disputes Redressal Agencies There shall be established for the purposes of this Act, the following agencies, namely: (a) a Consumer Disputes Redressal Forum to be known as the "District Forum" established by the State Government in each district of the State by notification: Provided that the State Government may, if it deems fit, establish more than one District Forum in a district. (b) a Consumer Disputes Redressal Commission to be known as the "State Commission" established by the State Government in the State by notification; and (c) a National Consumer Disputes Redressal Commission established by the Central Government by notification. Objectives of Central Council and state council The objectives of the Central Council are to promote and protect the rights of the consumers such as:a) - the right to be protected against the marketing of goods and services which are hazardous to life and property. b) - the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices. c) - the right to be assured, wherever possible, access to a variety of goods and services at competitive prices. d) - the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums. e) - the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and f) - the right to consumer education. Jurisdiction of District Forum 1) - Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.

Jurisdiction of state council i) - complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees onecrore; and ii) - appeals against the orders of any District Forum within the State; and b) - to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State, where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. Jurisdiction of National Council i) Complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore; and ii) Appeals against the orders of any State Commission b) - to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. Limitation period 1) - The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. 2) - Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period: Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay. The Role of voluntary organizations in protecting consumers rights The role of voluntary organizations has become increasingly more significant over the last two decades. There are now more than 800 such Organizations in India. several functions, like:

(i) Create awareness about consumer rights and educate the general public about consumer problems and remedies through seminars, workshops and training programmes. (ii) Provide legal aid to consumers by way, of assistance in seeking legal remedy. (iii) Undertake advocacy of consumers point of view as representative members of consumer protection councils and others official boards (iv) Arrange comparative testing of consumer products through their own testing apparatus or accredited laboratories so as to evaluate the relative qualities of competing brands and publish the test results for the benefit of consumers to become informed buyers. (v) Publish periodicals and journals to disseminate information among readers about consumer problems, legal reporting and other emerging matters of interest. Most of these periodicals do not accept advertisements from business firms. (vi) Make suggestions and recommend steps which government authorities should consider in policy making and administrative measures adopted in the interest of consumers. (vii) Some voluntary organizations have successful used Public Interest Litigation (PIL) to enforce consumer rights in several cases. In other words, voluntary organizations have filed cases in law courtsin the interest of the general public, not for any individual LIST OF CUSTOMER ORGANIZATION CERC (Consumer Education and Research Centre) Organizations in TamilNadu) Consumer Voice

Research, Teaching,TrainingandTesting) LPG

Dr. Manmohan Singh, the present Prime Minister of India, was then the Finance Minister of the Government of India. He assisted P.V. Narasimha Rao and played a key role in implementing these reform policies. (Narsimha rao committee)