Educational system

It has been recently discovered that the position of Indian universities in global ranking has dropped. And one of the main reasons behind this is the lack of research and development on the subjects concerned. In recent years the South Asian countries have been contributing more to international magazines and papers with articles, research papers, analysis etc,  because along with mainstream academics they also lay a lot emphasis on research work. IIT for instance is very well known globally more so because of its successful students, rather than any particular contribution.

There are going to be some major changes in the educational system of India. The prime minister has appointed the National Knowledge commission (NKP), which has come up with a lot of suggestions and improvements. One of the major improvements will be that the syllabus will have more practical applicability and the gap between the classroom lessons and industrial requirements will be reduced. Also there will be more marks allocated for project work and internal assessments (earlier it was 25% now they want it to be 50%). So an increase in project work and general interaction between students and teachers and meaningful interaction between students, will make the classroom session more interesting. This method will also prevent students from “getting buried”, they will have time to time submissions which will keep them active and involved.

Microfranchising

I recently read an article on “Microfranchising” in the editorial section of the ‘Economic Times’.

We have all heard of the Grameen Bank in Bangladesh which is run entirely by women and Mr. Mohammad Younis came up with this concept. But, what many people don’t know is that a company called ‘Tenron’ which is based in Oslo has 62% stake in this bank. And the women who run this bank are all from the poor rural areas. This is what Microfranchising is all about, connecting giant multinational corporations with the poor people of the world.

In Uttar Pradesh and Madhya Pradesh and some other states, marriages happen at a very young age, at about 15 or 17. Marriages in this age group are a frequently occurring phenomena there, looking at this situation a company manufacturing camera’s came up with the same idea (AsTenron), they visited these villages and appointed some poor people as their agents, gave them the cameras and worked out a revenue model, wherein the agents will earn some money by clicking photographs at marriage functions and the company will do some business. Another great incentive for companies to do this is this is the kind of publicity they get. You can just imagine people at the marriage getting fascinated and coming up and having a look at the camera and asking questions about it!! After this Sony went one step ahead and decided to give Handy cams to the people as well as camera’s and give the option of video recording.

So to conclude Microfranchising does 3 good things: 1. creates employment opportunities among have-nots 2. Companies get publicity.3 Companies can reach out to poor people and at the same time do business.

Whether Nationalism has lost its significance

This was a debate organised, and I was speaking against

Nationalism the term can be explained from different perspectives. It can mean devotion towards the nation, people who are bound by cultural links or even promotion of national interests. So when nationalism is a wide ranging term by itself and can refer to so many different things, to say that it has completely lost its significance is a fallacious proposition.

The reason why people today take a cynical view of nationalism is because of the political parties and their flawed argument that singing national songs and symbolism is the badge of nationalism where as one can very well be a nationalist without shouting to the world that he is one. The other aspect is that in this era of globalization it is the western countries who think that the world has become one big market and that the concept of nationalism has become outdated. But on the contrary when it comes to measuring economic growth and welfare, it is always done country wise and not on a global scale. Now today WalMart has entered the Indian retail business, the exports of the country are on the rise, global players like Ford and GM have chosen India as their destination for production and marketing, from the economic point of view this is good stream of news, but how does a citizen react to this information?? The citizen doesn’t see just the economic aspect of this but also feels happy that the country is doing well and feels proud.

Even in Cricket, whenever India wins a match, how many of us watch extra innings after that where celebrities are analyzing the game. The fact that India won gives joy and a sense of satisfaction to the Indian viewer. And when a country does well one develops a sense of belongingness towards it.

Nationalism was and continues to be a powerful and vibrant force, and the success of films like Rang de Basanti and Swades show that people still respect and value the sentiment of nationalism.

Special Economic Zone (SEZ)

I did a presentation in my college on the Special economic zone also know as FTA (Free trade zones) in US.

What is SEZ?

A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. . The basic motto behind this is to increase foreign investment. The sez was first established by the PRC (Peoples republic of China) for a variety of reasons like, increase in investment and increase job opportunities and technical knowledge and bring about certain tax reforms.

Need for Sez and who can set up:

The policy of sez was introduced on 1/4/2000 (In India) with a view to provide an internationally competitive and hassle free environment for exports and make the domestic enterprises and manufacturers globally competitive. The units set up under sez can be for manufacturing or rendering service. The policy provides setting up the sez in the public sector or private sector or by joint sector or even by the state government. It was also decided that the current EPZ (Export processing zone) would be converted into the special economic zone. EPZ like SEZ also have less bureaucratic requirements and quotas are eliminated but there are certain barriers like tariff for import and export.

As I mentioned earlier sez are set up mainly to attract foreign investments and increase the exports, there are certain features that I would like to highlight from the SEZ act 2005 which will show what makes a unit under a special economic different from any other unit anywhere in the country

1) 100% FDI for the manufacturing sector, and no cap on foreign investments for Small scale industries (SSI) items. Foreign direct investment (FDI) is defined as a long term investment by a foreign investor in some other country’s economy. The FDI relationship consists of a parent enterprise and a foreign affiliate, the foreign affiliate will invest money in the parent company and together they will form the Trans national corporation (TNC)

2) Income Tax benefit under section 80 of the Income Tax Act, this implies that the profits earned by the unit is exempt from it for 3 years and 50% exemption for the next 2 years.

3) Duty free import of domestic goods required for the development and maintenance of the sez.

4) Exemption from Service tax and CST

5) Whatever investments that are made by individuals whether in mutual funds or properties or anywhere the interest that is earned is subject to income tax, but under sec88 of IT act investments made by the individual in the special economic zone is exempted from income tax.

6) There is an enhanced limit of 2.4 crore per annum allowed for managerial remuneration. This implies that units under sez’s can attract the best students from top business management schools, and a professional and well paid team will take charge of the management.

7) Normal labor laws are applicable which are enforced by the state, however state governments have been requested to simplify the procedures and for introduction of single window clearance mechanism by delegating appropriate powers to the development commissioner of SEZs.

Evaluation of Sez’s:

When evaluating the success of sez it is important to determine how the resources would have been utilized in the absence of the zones, would capital have remained in the country and would employment be created in more productive areas. When the regulatory framework legal framework and the administration of the sez fail then the cost of the sez’s outweighs the benefit.

Advantages of Sez:

Sez’s are good from the point of view of growth and development. It increases income level of citizens, encourages competition and lowers labor costs.

Attracts FDI and exchange earnings: FDI spells long term capital that can help sustain solvency. Also FDI will ensure meaningful ownership, in times of adverse claims pay put, it is only through the FDI route that foreign stake holders will infuse capital to come over the adverse situation

The state id well informed about the latest technology and also relevant information regarding the trade that goes on all over the world and how the domestic producers can penetrate into several markets. And private business’s can position themselves in the world market and boost the standard of living of citizen’s.

Sez’s also create a lot of job opportunities

Also when sez’s become a success it increases the GDP, and acts as a good economic model for the policy makers to mimic.

Disadvantages of Sez:

Employment: In the area of employment the disadvantage of SEZ is quite similar to the disadvantages of WalMart entering retail business. New jobs are created and working conditions improve, but for whom?? It is for the educated masses and the literate people and not for the laborers. Laborers suffer in the form of; forced overtime, exhausting work schedules; poverty pay, and unhealthy working conditions. The majority of workers in the Sez units are women who are exposed to the most humiliating sexual harassments. Free trade creates a “race to the bottom”, whereby developing countries lower their labor charges and environmental standards in an effort to attract foreign investment.

Secondly Companies would like to simply relocate to SEZ to take advantage of the tax concession’s being offered. This will bring about a significant revenue loss to the government. This will result in a kind of ‘disguised industry’ just as ‘disguised unemployment’.

And thirdly to set up an SEZ, large scale acquisition of land takes place which results in displacement of farmers and alternate means of livelihood are not available for them. But this issue has been taken up by the govt, and they will work out an appropriate compensation package before taking away land.

There is a possibility that Sez’s will be set up is states where there is already a strong tradition of manufacturing and exports. This in turn can aggravate regional disparities.

Conclusion:

Finally i would like to point out that SEZ can become a dangerous tool in the hands of power hungry politicians who want to show how much investment the country has attracted in their term, and so many jobs have been created. Sez’s appeal to almost all developing countries but they will not work if the country has no clear vision or strategy to move forward. They can perform even better than now if the public sector private sector and the government administration and the people, all work in coordination with each other and all work in harmony.


Should Advertisements targeting children be banned

It is difficult to classify whether an advertisement it is meant for children or adults. There are two principles in my opinion which determine whether an advertisement is meant for children or not. The first principle is whether the product being advertised is something meant for children like for e.g.: toys,chocolates,cycles etc. The second principle is whether the nature and making of the advertisement is such that it will catch the attention of a child. Now to ban the ads under the first principle would be unfair because we cannot restrict companies making children’s items from advertising their product. To say that chocolates can be bad for the teeth for children and hence their ads should be banned is based on fallacious reasoning. Excessive consumption of chocolate is bad no doubt, but here the parents have to play an influential role to decide whether to give chocolates and decide the quantity. The ads under the second principle are debatable, the nature of an advertisement can be such that it can catch the attention of a child and that can have a negative influence. But then again this argument can be applied to the whole concept of television, so many things on television can have a negative influence on a child, like steamy music videos, adult movies, certain tv shows etc.. Why only advertisements should be banned. To say that children are not mature enough to understand what is right and what is not and that’s why ban “advertisements” is a very loose statement. Children at a certain age are very vulnerable and can get influenced easily by almost everything like meeting new people, atmosphere at school, environment at home, peer group influence etc… SO In conclusion I would say that advertisements are not a major influencing factor in a child’s life and to ban them out of the fear that they may have a negative influence is wrong, and hence they (adds) can continue; subject to certain principles and rules of decency.