1 DEPARTMENT OF ECONOMICS WECOME TYBA STUDENTS (Sem …

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SHETH NKTT COLLEGE OF COMMERCE & SHETH JTT COLLEGE OF ARTS, THANE

DEPARTMENT OF ECONOMICS

WECOME TYBA STUDENTS (Sem-V) 2020-21

ONLINE LECTURE

INDUSTRIAL AND LABOUR ECONOMICS

DR DHANASHREE SAWANT,

ASSOCIATE PROFESSOR, DEPT OF ECONOMICS

As a Mentor of your class……..

New online teaching learning process

Attendance

Examination

Cyber discipline

Use of whatsapp group (Personal if necessary)

Time table of all papers

Participation in curricular & extra-curricular activities

Submission of record of certificates and awards from time to time

Project or Internal evaluation rules

7/19/2020prepared by Dr D P Sawant, Asso Prof, Dept of Economics, Sheth NKTT College

Syllabus of V-Sem (Industrial & Labour

Economics

Module 1: Introduction

Meaning and Scope of Industrial Economics, Industrial Profile :

Private sector

Performance and Problems of Private sector, Cooperatives -

features, types, merits and demerits

Public Sector - Role, Performance and Problems

Diversification and Industrial Combinations

Motives for Mergers and Acquisitions.

Module 2: Industrial Location and Problem of Regional Imbalance -

Determinants of Industrial Location,

Problem of Regional Imbalances

Theories of Industrial Location - Weber's theory

Sargent Florence's Theories, Dispersion of Industries and the

Problem of Regional Imbalance

Module 3: Industrial Productivity and Industrial Sickness

Concept and Measurement of Industrial Productivity, Factors

Affecting Industrial Productivity

Industrial Sickness - Causes, Effects and Remedial Measures,

Rationalisation - Concept, Aspects and Impact

Module 4: Industrial Development in India

New Industrial Policy, 1991; Disinvestment Policy; FIPB Revamp -2011

and Role of MNCs

Micro, Small and Medium Enterprises Development Act, 2006

National Manufacturing Policy

Recent Trends in India's Industrial Growth

Industrial Policy, 2012 in the Indian Economy - Merits and Demerits,

Issues in Industrial Proliferation

Environment Preservation; Pollution Control Policies.

Module 1: Introduction

Meaning and Scope of Industrial Economics, Industrial Profile : Private

sector

Public Sector - Role, Performance and Problems

Performance and Problems of Private sector, Cooperatives - features,

types, merits and demerits

Motives for Mergers and Acquisitions.

Meaning of Industrial Economics

Industrial economics deals with the organizations or institutions of production.

Andrews defines it as, “industrial economics will be interested in what actually

happens as distinct from what should happen in hypothetical or ideal

circumstances”.

Three main concepts of industrial economics

prepared by Dr D P Sawant, Asso Prof, Dept of Economics, Sheth NKTT College 7/19/2020

a. Market Structure- it is influenced by variables such as, technology, business expertise, input prices, demand and supply conditions

b. Market Conduct – it is influenced by factors like, price policy, product policy, financial policy, research and development policy, advertisement etc.

c. Market performance – the performance of market is influenced by the factors like, profitability, stability, growth rate, technological advancement etc.

True or False Questions

A. State whether following statements are True or False

1. Industrial economics deals with the organizations or institutions of consumptions.-False

2. It broadly describes matters, such as, Market structure, Pricing and material organization.-

3. Market Structure is not influenced by variables such as, technology, business expertise,

input prices, demand and supply conditions. False

4. Market Conduct is influenced by factors like, price policy, product policy, financial policy,

research and development policy, advertisement etc. True

5. Performance of market is influenced by the factors like, profitability, stability, growth rate,

technological advancement etc. – True

Role of Public sector

i. Public sector and capital formation - the contribution of Indian public sector was as high as 60% till third five-year plan, it fell thereafter.

Public sector plays important role in banking sector, which reflects in nationalized banks, SBI, IDBI, IFCI, SFC, LIC, UTI etc.

ii. Development of Infrastructure – such as irrigation, power supply, roadways, railways, communication facilities, basic and key industries

iii. Strong industrial base – this consists of construction, electricity, gas and water supply has been the strong base of industries in India.

Industries like, iron & steel, heavy engineering, coal, heavy electrical machinery, petroleum and natural gas, chemicals and pharmaceuticals.

iv. Economies of scale – for the development of basic and key industries, huge capital investment is necessary. Private sector cannot undertake

such huge investment, so public sector shoulders the responsibility

v. Removal of regional disparities – the government of India tries to set up big industries in backward or underdeveloped regions,

vi. Import substitution and export promotion – the problem of foreign exchange is a major constraint in the development of India.

vii. Check over the concentration of economic power – public sector helps in reducing the concentration of economic power by the use of

profits for the welfare of the people of country,

Performance of Public sector

One should not judge the performance of the public sector regarding the profits earned but by

the total addition it makes to the production of goods and services. Since independence of

India, there has been rapid increase in the public sector enterprises. The number of PSUs rose

from 5 in 1951 to 244 in 2015-16. The amount of investment was rs. 29 crore which rose to

19,38,795 crore in 2015-16. Similarly there has been sharp increase in the employment,

efficiency, CSR of the public sector.

Problems of Public sector

i. Low returns on the investment due to typical nature of the Price policy

ii. Underutilization of capacity due to lack of foresightedness, poor management and

inefficient operation.

iii. Problems relating to Planning and Construction of Projects

iv. Problems of Labour, Personnel and Management

Questions

1. Explain is the meaning and scope of Industrial Economics.

2. Discuss the problems of Public Sector.

3. Role and Performance of Public Sector.

Role and performance of Private Sector

i. Improvement in efficiency and performance

ii. More responsibility

iii. Market discipline

iv. No political interference

v. Quick decision making

vi. Better services

Problems of Private sector

i. Limited resources

ii. Burden of debt

iii. Less importance to public welfare

iv. Monopolistic tendencies

v. No interest in development of basic infrastructural facilities

vi. Less employment opportunities

vii.Use of capital-intensive techniques

viii.Profit oriented approach

Questions

1. State and explain the merits and demerits of Private Sector.

3. Explain the problems of Private sector.

4. Discuss the role of Private sector.

Features of Cooperative sector

i. Voluntary association

ii. Equality of vote

iii. Mutual cooperation

iv. Democratic set-up

v. Economic purpose

vi. Service motive

vii. Combined efforts

viii.Legal existence

Merits of Cooperatives

i. Easy formation of cooperative society

ii. Continuity of existence (not affected by death, insolvency etc.)

iii. Common pool of resources

iv. Self-governance

v. Spirit of cooperation

vi. Service oriented approach

vii. Economic use of resources

viii.Democratic approach

ix. Enjoys privileges, such as, exemption from income tax stamp duty etc.

Demerits of Cooperatives :

i. Disputes among members

ii. Problem of disloyalty of members

iii. Inadequate capital

iv. Limited business knowledge

v. Less managerial ability

vi. Cannot undertake large investment projects

vii. Insufficient motivation and inducement

viii.Lack of business secrecy

ix. Less public confidence

x. Government interference

Questions

Write note on:

Features of Cooperative Sector.

Role of cooperative sector in India.

Discuss the merits and demerits of Cooperative sector.

Home work

Sr No Group – A Sr. No. Group – B

1 Industrial Economics A State Bank of India

2 Public Sector enterprise B Reliance Industries

3 Private Sector enterprise C Indian Oil Corporation

4 Cooperative Sector D Varied level of growth

5 Regional Imbalances E Market structure, Pricing and material organization.

6 Import Substitution F Production for foreign exchange

7 Export Promotion G Production for saving foreign exchange

8 Concentration of economic power H Cost advantages of big firm

9 Economies of scale I Monopoly firm

10 Nationalized bank J Joint ownership of resources

•Match the Columns.

True & False questions

1. The contribution of Indian public sector was as high as 90% till third five-year plan.-False

2. Infrastructure such as irrigation, power supply, roadways, railways, communication

facilities, basic and key industries are provided by the private sector before reform period in India. – False.

3. Strong industrial base does not consist of construction, electricity, gas and water supply. –

False.

4. Before 1991 reforms, the private sector in India could not undertake huge investment, so public sector shouldered the responsibility. – True

5. To reduce regional imbalances, the government of India tries to set up big industries in

backward or underdeveloped regions. – True.

Diversification : It is the spreading of its

operation by a business unit over dissimilar

economic activities. (definition by L R Amey).

Robinson defines it as, the lateral expansion of

firms wither in the direction of their existing

main products, as with vertical integration, but in

the direction of other different or similar

activities.

Objectives of Diversification

i. Survival

ii. Stability

iii.Utilization of resources

iv. Growth

Reasons for Diversification

i. Development of technology

ii. Development of Market

iii. Goodwill of company

iv. Spare capacity

Determinants of Diversification

i. Profitability

ii. Stability

iii.Tax incentives

Merger

It refers to the amalgamation or integration of two or

more firms. The firms having different ownership,

come under unified system through merger. The terms

‘Acquisition’ and ‘Takeover’ are also used in place of

Merger.

Motives or objectives for Merger

i. For diversification

ii. For security of sources of supply

iii. For Economies of scale

iv. To face competition from rivals

v. For better Management

vi. To improve financial position

vii.To get benefits of Undervaluation

viii.For Monopoly position

ix. To spread the burden of taxes

Questions:

1. What is ‘Diversification’? Explain.

2. Write a note on - Diversification and Industrial Combinations

3. Discuss the Motives for Mergers and Acquisitions.

Multiple choice questions

a. Which one of the following is not the objective of Diversification?i. Survivalii. Stabilityiii. Utilization of mind poweriv. Growtha. Which one of the following is not the reasons for Diversification?i. Development of technologyii. Development of priceiii. Goodwill of companyiv. Spare capacitya. Which one of the following is not the determinant of Diversification?i. Profitabilityii. Stabilityiii. Tax incentivesiv. Welfare of people

Multiple choice questions

a. Which one of the following is not the motive for Merger?

i. Division of Labour

ii. Security of sources of supply

iii. Economies of scale

iv. To face competition from rivals

a. Which one of the following is not an objective for Merger?

i. To improve financial position

ii. To get benefits of Undervaluation

iii. For political position

iv. To spread the burden of taxes

References:

1. Agrawal A.N, Indian Economy, New Age International Publishers, New Delhi, 2011.

2. Barthwal R.R, Industrial Economics, New Age International Publishers, NewDelhi,

3. Cherunilam. F, Industrial Economics: Indian Perspective, Himalaya PublishingHouse,

Mumbai, 1994.

4. Datt R. and Sundaram K.P.M, Indian Economy, S.Chand& Co., New Delhi, 2009.

5. Desai S.S.M. and Bhalerao N, Industrial Economy of India, Himalaya Publishing

House, Mumbai, 2008.

6. Kuchhal S.C, Industrial Economy of India, Chaitanya Publishing House, Allahabad, 1980

Thank You all for joining the session

General Instructions:

1. Please join the session 5 minutes prior of the scheduled time

2. keep your mobile, tab, PC or laptop on MUTE mode

3. ask questions at the end of session or beginning of next session

4. write your doubts in chat box or write your doubts on a paper

5. your attendance will be recorded and maintained by the college

6. practice the questions given to you at home

7. periodic online tests will be taken for consistent evaluation

nktecodeptproject@gmail.com

Role and performance of Public sector – 700 words

1 DEPARTMENT OF ECONOMICS WECOME TYBA STUDENTS (Sem …

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