PERSPECTIVE OF
BUSINESS AND INDUSTRY
MBA 1 ST SEMESTER
SYLLABUS
CHAPTER 1- AN OVERVIEW OF INDIAN ECONOMY
CHAPTER 2- ESSENTIALS OF BUSINESS AND INDUSTRY
CHAPTER 3- EVOLUTION OF BUSINESS AND INDUSTRY IN INDIA
CHAPTER-4-STRUCTURE AND STATUS OF BUSINESS AND INDUSTRY IN INDIA
CHAPTER 5 - GROWTH OF BUSINESS AND INDUSTRY
CHAPTER 6 - INTERFACE WITH VOLUNTARY ORGANISATIONS
MODULE 1
INTRODUCTION TO INDIAN ECONOMY
● It is the world's fifth-largest economy by nominal GDP and the
third-largest by purchasing power parity (PPP). According to the
International Monetary Fund (IMF), on a per capita income basis,
India ranked 142nd by GDP (nominal) and 125th by GDP
● India is likely to be the third largest economy with a GDP size of $15 trillion by
[Link] economy of India is currently the world’s fourth largest in terms of
real GDP (purchasing power parity) after the USA, China and Japan and the
second fastest growing major economy in the world after China.
INTRODUCTION TO INDIAN ECONOMY
"In the case of India, the upward revisions additionally incorporate the sharp increase
in capital expenditure budget allocation to Rs 10 trillion (3.3 per cent of GDP) for fiscal
year 2023-24, up from Rs 7.5 trillion for the fiscal year ending in March 2023,"
Moody's said while projecting a 70 basis points increase in 2023 real GDP growth at
5.5 per cent and 2024 growth at 6.5 per cent.
The growth rate has slowed down due to higher inflation and lower consumption,
NATURE OF INDIAN ECONOMY
● The Indian economy is known as an agro-based economy because 53% of its total
population is dependent on agriculture. This 53% population contributes to almost 14% of the
total GDP of the country.
● India, as a developing country, features a mixed economy in the world.
● low per capita income,
● overpopulation,
● maximum population below the poverty line,
● poor infrastructure,
● agro-based economy and
● a lower rate of capital formation.
● Poor technology
STRUCTURE OF INDIAN ECONOMY
PRIMARY SECTOR
SECONDARY SECTOR
TERTIARY /SERVICE SECTOR
CHALLENGES OF INDIAN ECONOMY
● Inflation
● Poor educational standards
● Poor infrastructure
● Balance of payment deterioration
● High levels of private debt
● Inequality has risen rather than decreased
● Large budget deficit
● Rigid labor laws
● In efficient agriculture
● Slow down n growth
PILLARS OF ECONOMY DEVELOPMENT
[Link] SECTOR
The history of agriculture in India dates back , India ranks second worldwide in
farm outputs. As per Indian economic survey 2018, agriculture employed more
than 50% of the Indian work force and contributed 17–18% to country's GDP.
FEATURES OF INDIA AGRICULTURE
● Stagnation and low productivity
● Uneconomic land holdings
● Subsistence nature of agriculture
● Gamble in monsoon
● Unemployment and poverty
PROBLEMS OF INDIAN AGRICULTURE
1. General problems
● Overcrowding in agriculture
● Discouraging rural atmosphere
● Inadequate in farm services
2. Institutional problems
● Defective tenancy reforms
● Lack of credit and marketing facilities
● Size of holding
3. Technical problem
● Absolute technique of production
● Lack of irrigation facilities
● Cropping pattern
Recent trends of Agriculture sector
Industry sector
● Increase in national income
● Higher standard of living
● Increased employment opportunities
● Raise in agricultural production
● Reduction in the rate of population growth
● Increased saving and investment
● Lesser pressure on land
● Increase in the government revenue industries
Problems in development of industrial
sector
● Under utilization of capacity
● Lack of infrastructure facilities
● Performance of the public sector
● Gaps between targets and achievement
● Growth of regional imbalances
● Industrial sickness
Recent trends in Industrial sector
SERVICE SECTOR
India's services sector covers a wide variety of activities such as trade, hotel
and restaurants, transport, storage and communication, financing, insurance,
real estate, business services, community, social and personal services, and
services associated with construction.
CONTRIBUTION OF SERVICE SECTOR IN
INDIAN ECONOMY
● Infrastructure services
● Business services
● Trade services
● Social/personal services
● Public administration
KEY SERVICE BUSINESS IN INDIA
Problems in service sector
● Marketing intangibles
● Maintaining quality
● Developing trust
● Extra competition
● Creating a need
● Passion
● Dedicated staff
Recent trends in Service sector in Indian
economy
IMP QUESTIONS
● Explain the structure of Indian economy
● Discuss the importance and challenges of Indian economy
● What is the role of Industrial sector , service sector and Agricultural sector in India
● Recent trends in 3 sectors
● Key service business in India
● Problems of Indian agriculture
MODULE 2
ESSENTIALS OF BUSINESS AND INDUSTRY
BUSINESS
Meaning of Business
Business is an economic activity which is related with continuous and regular production and distribution of
goods and services for satisfying human wants under uncertain market condition
Evolution of business
● Feudalism
● Mercantilism
● Capitalism
● Commerce
● Property rights
● Industrial revolution
Nature of business
Objectives of business
1. Economic objectives
● Earning of profit
● Creation of customers
● Innovation
● Best possible use of scarce resources
● Manufacturing of goods and generation of services
● Growth and expansion
● Productivity and cost efficiency
[Link] objectives
● Economic well being of the employees
● Social and psychological satisfaction of employees
● Development of human resources
● Well being of socially and economically backward
[Link] objectives
● Creation of employment
● Promotion of social justice
● Production according to national priority
● Contribute to the revenue of the country
● Self sufficiency and export promotion
[Link] objectives
● Raise general standard of living
● Reduce disparity is among Nations
● Make available globally competitive goods and services
5. Social objectives
● Production and supply of quality goods and services
● Adoption of fair trade practices
● Contribution in the general welfare of the society
Role and functions of business
Business processes
1. Core business processes
● Procurement
● Logistics
● Operations
● Marketing sales and customer Accounts
● Customer and after sale services
[Link] business processes
1. General management and firm infrastructure
2. Human resource management
3. Technology and process development
Importance of business
Industry
Meaning of industry
Industry refers to all business activities which are connected with raising producing and processing of goods
and services they convert raw materials into useful products by the application or use of human or mechanical
Power sometimes that term industry is used to represent a group of business enterprises engaged in producing
similar products or providing similar services.
For example, producing automobiles whether two wheelers three wheelers of four wheelers together constitute
automobile industry.
Evolution of industry
● Handicraft system
● Guilds
● Domestic system
Nature of Industry
Types of Industry
Role and functions of Industry
Importance of Industry
Structure of business environment
ROLE OF GOVERNMENT TOWARDS
BUSINESS
● To pass and excute proper laws
● Maintainance of law and order
● Providing money and credit
● Building infrastructure
● Research
● Providing information
● Controlling the growth of monopolies
● Awarding patents and copy rights
Role of society towards business
● Help in deploying solutions
● Provide information
● Build coalitions
● Aid in devicing policies
● Adding trustworthiness to business activities
● Act as defender
Business enterprises
A business enterprise is any type of operation that is involved in providing goods or services with the
anticipated outcome of earning a profit it's broad nature allows the term to be applied to any type of
company or firm that is gaird toward generating revenue by selling products of any type the terms company
firm and business enterprises are often used in the interchangeably
Forms of business enterprises
Sole proprietorship
Business that runs under the exclusive ownership and control of an individual is called as sole proprietorship
or single entrepreneurship it is started through the initiative of an individual and is run with capital supplied
by the proprietor from his resources or through borrowed means.
Sole proprietorship
Merits of Sole proprietorship
● Low cost of production
● Promptness in decisions.
● Personal contact
● Easy to start and wind up
● Business secrecy
● Flexibility in business
Demerits of sole proprietorship
● Limited means of production
● Limited skills
● No economies of large scale production
● Small income
● Instability
● Unlimited iability
Partnership firms
Partnership is a business relation between two or more persons who have agreed to share the profits of a
business carried out by all or anyone of them acting for all
Merits of partnership firms
● Easy to form
● Prompt and correct decisions
● Use of diverse skills and talents
● Business secrecy
● Personal contacts
● Personal interest and initiative
● Scope of large scale production
● Sharing of the risks
Demerits of partnership firms
● Uncertain existence
● Disharmony among partners
● Not suitable for very large scale business
● Weak management
● Non transferability of partnership shares
● Unlimited liability
Joint stock companies
The joint stock company is a legal business owned by shareholders having limited liability and managed by an
elected board of directors a company is an artificial person having an independent legal entity and a
perpetual succession with a distinctive name and a common seal having a common capital divided into shares
of fixed value which are transferable and carry limited liability
Merits of joint stock companies
● Perpetual existence
● Large funds
● Transferability of share
● Limiteded liability
● Spreading out of risk
● Efficient and economical management
● Suitable for large enterprise
Demerits of joint stock companies
● Compplication in formation
● Democratic only in theory
● Lack of motivation
● Delay in decision
● Lack of secrecy
● Station of wealth and power in few hands
Comparison of different forms of business
enterprises
Productive systems
Manorial or feudal system
1. It was land base production system
2. The manner consistered of a vast extension of arrable and ruled over by the feudal lord
3. Tenants were leading their livelihood by wages that lords given them due to cultivation of crops
4. The lord and cultivators were in a definite circle in the total economy was controlled by the feudal
lords
5. There were military force under feudal lord and it works to obey and save the lord the relationship
between the lord and tenants were not always cordial and they were cruelled by the lords due to this
causes feudal system was decade
Guild system
Types of guild
● Merchant guild
● Craft guild
Domestic/putting out/outsourcing system
Factory system
The term factor is combination of two economic phenomena one the concentration of former RT sons and
domestic workers and the second a radical change in the production methods hear the workers continued
with their earlier productive activities however not from home leading the leading to the term manufacturing
the productive techniques or substantial investment in fixed capital combined with strict supervision and
rigid discipline resulting in what was called Mills
Industrialisation
Industrialisation or industrial development is the process of social and economic change where by a human
group is transform from a pre Industrial society into an industrial one.
It is a part of wider modernization process where social change and economic development are closely
related with technology innovation particularly with the development of large scale energy and metallurgy
production
Need of industrialisation
● Utilisation of available resources
● Overcoming the problem of unemployment
● Modernisation of agriculture
● Self sufficiency
● Basis for economic development
Causes of industrialisation
● Industrial revolution
● Social religious reformation
● colonialism
● Research and development
Consequences of industrialisation
● Raising income
● Changing the structure of the economy
● Meeting high income demands
● Overcoming deterioration in the terms of trade
● Absorbing surplus labour
● Bringing technology progress
● Strengthening the economy
IT system of industrialisation
IT services
● Government
● Banking
● Financial services
● Retail and distribution
● Manufacturing
IT enabled services
● Customer interaction services including call centres
● Back office services
● Revenue accounting
● Data entry and data conversion
● HR services
● Transcription and translation services
● Content development and animation
● Remote education
● Work consultancy
Software
Hardware