SHETH NKTT COLLEGE OF COMMERCE & SHETH JTT COLLEGE OF ARTS, THANE
DEPARTMENT OF ECONOMICS
WECOME TYBA STUDENTS (Sem-V) 2020-21
AT
ONLINE LECTURE
ON
INDUSTRIAL AND LABOUR ECONOMICS
BY
DR DHANASHREE SAWANT,
ASSOCIATE PROFESSOR, DEPT OF ECONOMICS
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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
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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.
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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
Diversification and Industrial Combinations
Motives for Mergers and Acquisitions.
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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”.
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Three main concepts of industrial economics
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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
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b. Market Conduct – it is influenced by factors like, price policy, product policy, financial policy, research and development policy, advertisement etc.
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c. Market performance – the performance of market is influenced by the factors like, profitability, stability, growth rate, technological advancement etc.
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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.-
True
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
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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,
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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.
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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
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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.
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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
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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
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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.
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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
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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.
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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
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Questions
Write note on:
Features of Cooperative Sector.
Role of cooperative sector in India.
Discuss the merits and demerits of Cooperative sector.
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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
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•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.
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Diversification and Industrial Combinations
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.
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Objectives of Diversification
i. Survival
ii. Stability
iii.Utilization of resources
iv. Growth
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Reasons for Diversification
i. Development of technology
ii. Development of Market
iii. Goodwill of company
iv. Spare capacity
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Determinants of Diversification
i. Profitability
ii. Stability
iii.Tax incentives
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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.
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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
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Questions:
1. What is ‘Diversification’? Explain.
2. Write a note on - Diversification and Industrial Combinations
3. Discuss the Motives for Mergers and Acquisitions.
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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
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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
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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,
2007.
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
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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
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Role and performance of Public sector – 700 words
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