The Flamboyant Economy of India

The boosting economy of India is offering great potentials for doing business in India for the overseas investors to make investment in India and is encouraging them to consider India as one of the best place for their business development. The most in focus sector being the real estate. Inflation rate is coming down and increased market demand for goods and services are good signs which attract foreigners to do business in India.

There are various factors like quality, availability and reliability of infrastructure services, state or central governments efforts, good power supply, transportation facilities connecting important nodal points, relaxed tax regulations, efficient banking systems and relatively cheaper availability of labour and raw material, export and import options etc. Doing Business in India is the most attractive destinations for the investments. Even the World Bank analysis has indicated that the infrastructural development and institutions remain the main factors in the development of Indias private sector. The real estate sector is one of the most booming sections in India.

The economy of India is one of the fastest growing economies of the world with good population base. The growth rate of gross domestic product (GDP) is reviewed around 8.75 per cent plus against 7.4 per cent in the previous year. The International Monetary Fund (IMF) indication of Indias GDP is much higher at a growth rate of as high as 9.7 per cent. The economy of India is one of the most favorable economies in the world as of now. This higher growth trends are creating good opportunities to do business in India.

The Banking system of India has survived well to the global economic crisis. In India, nationalized banks play an important role in banking sector (50.5 per cent of the aggregate deposits and hold the highest share of 50.5 per cent in the total bank credit. Banking facilities both through the foreign banks and regional rural banks had a share of 5.5 per cent and 2.5 per cent respectively in the total bank credit.

The economy of India is one of the most robustly growing economies in the world with a huge population base. The recent trends show that the growth rate of Economy of India will grow at around 8.75 per cent for current year. The Indian economy is performing well as the purchasing power parity has increased in the last six months.

Economy of India is ranked the fifth largest economy in the world and third largest GDP in the entire continent of Asia. The world's popular brands have started seeing the economy of India as the potential market for their business expansion.

Conclusively, it is no surprise for India being chosen as one of the most favoured foreign direct investments (FDI) destinations as the economy of India grows in leaps and bounds. The strong banking system proved a blessing during the financial meltdown, even opening the opportunities for doing business in India. Besides, the real estate and infrastructure management turned out to top the private equity (PE) investment sector at 23 per cent of the total with US$ 99.36 million, according to Deal tracker October 2010, Grant Thornton.

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The Six Minute Book Summary of Tyler Cowen?s Create Your Own Economy

Executive Summary

Create Your Own Economy was a very interesting book to say the least. In this era of our lives we are in very bad economic times, which are getting better, but at a slow pace. We all need ways to find a path to a better life in these hard economic times, and it is especially important today to stay sane as human beings. When the economy is doing badly, people turn to less expensive pleasures. How we learn to do more things with less shape American lives and teach us not to be so materialistic. In down times today people tend to go to the gym more, eat at fast food restaurants less, and do more things to self-improve themselves and their education. The whole point of the book is this; rather than bowing down to a recession, there are many things we can do to empower ourselves and create a better environment. We can use Facebook, twitter, and even our iPhones and iPods to organize our lives. We can turn to old heroes such as Sherlock Holmes to help us through these hard time s. We can see the world and the people in it for which they are the beauty they possess, and therefore reorganize our thoughts to make a better like in this ever so changing world. This book gives us all the options and opportunities to change the world around us. It is also about the power of us as individuals to change our cognitive thoughts and ways to make the world a better place for us and the people in it. Whether or not we have the ways of the economy on our side, we can still strive to change it and make it better. This is what is meant by creating your own economy. Any way that we can change or reorganize the world around us and our inner thoughts and emotions to make it a better place for us to live.

The Ten Things Managers Need to Know fromCreate Your Own Economy: The Path to Prosperity in a Disordered World

1. Our own economy is a regulated and ordered list of the wide deep information flows that are increasingly important to the economy.

2. If more people in the world would adopt more ways of autistic thinking, we would all have a more prosperous life.

3 Organizing information is a path to many of the best reward in life and the path to creating your own economy.

4. Having an autistic mind set is a powerful way to understand the whole world around us in a not so biased way.

5. Because of the internet and different sources of information, mental ordering has become very cheap and effective and thus has become a very powerful social force.

6. In todays world, people do not care about large amount of information. Instead we like to consume large amounts of small bits of information so we can get more things at once. As managers we need to pay close attention to this fact when it comes to marketing your business or new products.

7. If we as human beings can come to terms with creating our own economy, we will be better suited to appreciating the world around us and creating beauty in this rapidly changing culture.

8. The cost of access tends to influence our interior lives. As managers we need to make things easier for people to consume in order to be successful in the business world.

9. As managers, we need to realize the power of the web and the importance of social networking and see it as ways to get our products out there in short bits of information. Our attention is held more today by the web than any other aspect of advertising.

10. Media has become a big part of mixing our personal cultural blends. This helps us to experience and express ourselves and builds the richness of our lives. As managers we need to use media more than ever these days to make our products and business seen and available.

Full Summary of Create your own Economy

The notion of ordering information is something that is a joy to many people in their everyday lives.(Cowen) Whether it be organizing books on a shelf or situating the ways our spoons are organized in the utensil drawer of our kitchen. We all have ways that we organize our lives. Many people my age use Facebook, MySpace, twitter, and even blogs to organize their ideals and stay connected with friends on an everyday basis. We organize our friends, events, and even photos in any manner that we wish. This is a huge part of society today. We are all in favor about organizing our information.(Cowen) It is what makes our everyday lives click. Every day more fun and enjoyment and contemplation is produced out of the ways we organize our information.(Cowen) The web and its programs are changing society and the economy around us today.

By this is ever changing technological world around us, we can learn ways of hidden creativity by comparing the ways that autistic people function. Much of the same ways that autistic people perform their everyday functions is much of the same ways we go about organizing our everyday lives. In order to understand what we can learn from autistics, we must first clear our minds of the biases that the world has on autistics. Autism is often connected to human tragedy, but as a world we are ignorant to the significant cognitive strengths that they are born with. All of society sees autistics as having a series of handicaps and disorders.(Cowen) We are letting our understanding of some very real human beings be determined by scientific studies and research.(Cowen) Most of our biases also come from the news and stories we see on YouTube and CNN of autistic kids in society. We see ourselves as owing them some privilege to be in a spotlight that many non-autistics get to be in in t heir everyday lives. Whether it may stem from competing in certain sports, or being the center of attention in anything, we see it as a handicap and feel we have to give them some part of life that allows them to be in the center of attention. On the other side of the spectrum, autistics are striving people who learn all sorts of things in better ways that many normal human beings do. They know many joys, and experience tragedys large and small(Cowen) as we do on an everyday basis. Autistics have many great cognitive strengths and thoughts and can remember certain things about a person that we would never dream of remembering. It is almost like they have their own library in their minds to store certain things that they are infatuated with and like to organize. They are very good at perceiving, processing, and ordering information, especially in specialized or preferred areas of interest. Some of the most important and influential people of todays time and in history are aut istic or self-described Aspergers. Each one of these individuals have the same dignity and skills as do non-autistics, but different ways of perceiving the small bits of information they take in. If we could all drop our wall of ignorance and see autistic people as successful human beings, we could all have a better outlook on life. An even more important fact is this; if we, human beings, in this ever so damaged world, could adopt some of the same cognitive strengths and features that autistics have, we would all have a more sustainable life.

We dont always appreciate or recognize intelligence when it appears in unusual or non-traditional ways.(Cowen) If we understand the fact of creating our own economy, we will better appreciate the beauty in todays rapidly changing culture. Modern culture today, and even in the olden days is somewhat like marriage. It always has its ups and downs. As decades go by and times change, so does culture. What was socially acceptable attire in the seventies is looked at as odd today. Even when we see someone dressed in some way other than ourselves we frown at the fact. Music that was accepted by many people and a whole culture, much like our parents, is accepted by a select few today. Contemporary styles have changed and so have our ways of viewing things. Culture today is becoming more and more like a marriage. We are trading in peak experiences of our lives for a better daily state of mind.(Cowen) We organize our music in short bits, and everything we do in our everyday lives int o short bits of information instead of a large story. Our culture today is a self-assembly of small bits.(Cowen) This change is a broader trend of production and value and how it is becoming increasingly interior to our minds. If we can come to understand the beauty of our ever changing culture, our lives will surely change. We will all be better as individuals. If we accept this culture change and see the beauty of it, we will all live healthier lives.

How we decide to communicate is a fundamental choice in the creation of the most prosperous economy that our lives can provide.(Cowen) Our new cultural lives arent just about TV, music, websites, and text messages and how it is changing our lives. We also have new media for expressing ourselves and building the rich culture of our lives. New communications media such as instant messaging, cell phone texting, Facebook, and blogging is for the emotional part of our culture. These things help us to create a better inner economy by allowing us to relate to each other and bond with each other in ways that werent prevalent in earlier cultures. Our intense ordering of information, no matter in what way we decide to do it, is about human communication. This reflects the autistic insight that most of us have, but fail to realize. As a culture, we are now turning away from sending e-mails or long memos to co-workers. We are using IM and Facebook to send our messages in small bits. No t that it is so hard to send an e-mail, or maybe we think that it is. Our rich culture today prefers small bits of information. Whether it be sending and IM instead of an e-mail to a co-worker or organizing our favorite friends on Facebook in ways that we can view then in the easiest way possible. Our culture of small bits makes us happier in tough economic times and allows us to get more information at once, leading to a happier and proficient life.

We also create our own economy from our education and how we strive to become higher educated. Not saying that you need a higher education to enjoy your inner life, but it may help. Most people, who have higher educations typically make more money, therefore have more ways to create a better inner economy. For most people a large part of your cultural identity and world view is shaped by what you are doing, the identity of your peers, and your external atmosphere.(Cowen) So if you are educated to a higher degree, it is in part a self-commitment to being a more productive person. It provides you with a peer group, image, and more skills than the average person. By being part of a higher education, you are putting yourself on the other side of the social divide, therefore creating a greater inner economy. Our education also leads us to be more autistic in terms of the ways we learn. Most of us need the influence of a leader and a classroom of more intelligent people than ours elves to enforce a better focus of academics.

Now that we are becoming smarter and more educated, we are seeing a shift between the balance of power between the consumer and salesperson.(Cowen) The quality of our interior pleasures does not need expensive and radical things to satisfy us, so majority of us are turning toward cheap entertainments for our pleasures. Because of the high rise of interiority, we are saving more money and turning to more stories to help us mold our own inner economics. We do not buy shoes or music just to say we have them, we are buying them as an image and an associated story about ourselves. It is our culture, our way of life, and our economies related to the stories that make us who we are. We also read stories to help us find heroes that we can relate to in this disordered world. We read books to relate to people have the same cognitive thoughts and struggles as we do. We look toward fictional and non-fictional heroes to give us important and revolutionary cultural ideas to help us get t hrough our un prosperous world.

Understanding the beauty of objects is something valuable that we all want in our economies. We often achieve new insights into beauty by trying on the perspectives of other people.(Cowen) If we can bring ourselves to see the difference in taste we should wonder where it comes from and try to see the other side of the spectrum, not see it was weird or uncommon. Individuals can learn cognitive skills and perspectives of others, but we also need to see that there is something of beauty and appreciation. If I listen to rap on a daily basis, I am most likely going to look at Mozart and boring and unusual. But, if I can take the time to appreciate the beauty and skill that has been put into the creation of the composition, I can see it in a whole new perspective. This makes the world all the more beautiful. We can open our minds and create a richer inner economy of appreciating things of more than an unusual composition for say.

On the other side of the spectrum, our view of politics can help to damage our inner economies. A lot of problems in politics stem from human cognition. As a whole we all tend to think we are good instead of bad, we fight when we should just shake hands, and do not realize that we are part of a problem rather than a possible solution.(Cowen) As a world, once again, we need to adopt the thought practices of autistics as a whole. They have cognitive advantages in understanding the benefits of abstract ordered systems. For the most part, what has gone wrong with the world today and politics is our lack of adherence to abstract rules of behavior.(Cowen) A country where people do not want to follow common rules is a country with serious economic and political problems.(Cowen) Autistic insight and cognitive strengths will not solve many political problems, but when combined with other values and judgments, will help influence many political conclusions.(Cowen) Adopting these ways may help us be more willing to cooperate, more willing to admit that we are not always right, and we may be able to stop viewing the world as us versus them. These changes will help dissolve political problems and help us to better create our own richer inner economy.

To conclude, as our interiority becomes richer and more prevalent, the notion of creating our own economy is becoming more obvious to most of us. We are learning to use sources such as the web, books, and news to get the small bits of information that sparks our personalities. By trying to copy the traits of autism, we can ultimately become better human beings. We see the world as filled with beauty and that everyones neurodiversity is unique in some way. Whether we listen to Mozart or nelly, there is a beauty behind the reason we enjoy it and why it was created. As we become more understanding and more open minded to the weird things, we can create a better world around us. When we create an understanding to these things, we get much better at entertaining and educating ourselves. We create our own world and our own economy. We can understand how a different mind can be an interesting one (Cowen) and make our understanding for culture richer and more profound. By opening o ur minds to politics and not always seeing ourselves as right and the other person wrong, we can better appreciate the benefits of law and how it molds our nation as a whole. Interiority is the best road to prosperity, and the way of creating your own economy.(Cowen)

The Video Lounge

The video is basically explaining the whole purpose behind his book. We are in an economy of attention and not money. Also, the need to earn money is not so prevalent because we have everything we need at our disposal.

/watch?v=lyxLlaVQB7I

Personal Insights

Why I think:

I believe the author is pretty brilliant and what he says is completely true. We all have to find ways to make our lives better in down times of the world. We can create our own personal economy in our minds and atmosphere that satisfies our inner being. The part about the author that I do not like is; in these times we find ways to satisfy our inner beings without the importance of money, but our own personal economies in our heads will not put food on the table or provide us a place to sleep at night. This is a big point that I think is missed in this book. He is a professor of economics and I am sure he understands this, but it is almost like he is telling us to live in some fantasy world of cognitive organization and the world will suddenly be a better place.

1. I would have organized my thoughts in a better manner. The book is so scatter brained that I have a hard time understanding what is going on and where it is going as well.

2. I would not have put so much emphasis on autism. It seems like he is infatuated with the cognitive thoughts of autistics. The book needed more recognition on the actual economy itself, not just how adopting the thought processes of autistics could give us a better life.

3. The book never really stated how to survive in the actual economy itself. He basically wants us to live in our own heads and ways of organization to make us happier. I would have tied the two thoughts in together to show how doing one thing could lead to another in the real world economy.

1. Reading this book made me realize the beauty of the world around me. It made me realize that there is a hidden beauty in everything we do as well as other people do. It helps to kind of ease some of the biases I have in my life and have a better outlook.

2. This book made me realize that the simpler things in life can send us on our way to a more prosperous life. It also made me realize that everything we do that brings us joy doesnt have to involve money.

3. One of the most far-fetched things that this book made me realize is that autistic people can be great people to. Also, that more people should adapt their ways of organizing and thinking into some of the same ways that autistic people do.

1. Organizing my thoughts and ways that I do things in a better manner, in ways that suit me better as a person I could be.

2. Opening my mind to new things. Seeing culture and others peoples enjoyment as a beauty for what it is rather than an odd way of doing things.

3. Not relying so much on materialistic things and appreciating the smaller things in my life that can make me happier and more prosperous.

Create Your Own Economyis the Freakonomics of epistemology. Instead of unearthing unusual findings using statistics, Tyler Cowen, a George Mason University economist and blogger at marginalrevolution.com, overturns common conceptions about learning and information-processing by examining the ongoing experiment of the Internet.~ Joseph Lawler

"Only a mind like Tyler Cowen's could weave Facebook, Zen Buddhism, Sherlock Holmes, and so much more into a coherent and compelling argument. Create Your Own Economy will change the way you think about thinking."

-Daniel H. Pink, author of A Whole New Mind

"Create Your Own Economy will open your mind to thinking differently. The unique thought processes of individuals on the autism spectrum provide a great value to our world. This book will help you to be smart and successful in your own way."

-Temple Grandin, author of Thinking in Pictures

"The modern world bombards us with data just begging to be organized, from iPod playlists to digital vacation photos. Tyler Cowen offers an entertaining tour of our information age, pondering implications for how creative we are, how long our attention span is, how our politics work, and the future of our economy."

-Samuel R. Sommers, Assistant Professor of Psychology, Tufts University

Bibliography

Cowen, Tyler (2009) Create your own Economy. The path to prosperity in a disordered world. Penguin Group (USA) Inc.

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Contact Info: To contact the author of this Summary and Review of Create Your Own Economy, please email

Biography

David C. Wyld () is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at /. He also serves as the Director of the Reverse Auction Research Center (/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:

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Top Ten Management on The Free Market Economy: An Overview of The Underpinnings of Our Economic System?and What It Means to You

Introduction

This article is an explanation of what a free market economy is and the advantages and disadvantages of a free market economy. Everyday people are hammering down companies to get their demands met of different products. Companies want to meet these demands and get products out to gain the advantage of customers. In this article, I will explain some of the advantages and disadvantages of trying to meet those demands of customers through a free market economy.

The Idea in a Nutshell

A free market economy is a type of economy where all the goods and services are controlled by a private sector without any government intervention. The only intervention the government has is to enforce ownership and contracts. The resources of the economy are usually determined by the supply and demand for those resources. Companies try to meet these demands the best way possible to gain control of the customers appreciation and beat out the competition. There are many consequences that come with the free market economy and it can hurt you or help you in the long run with your business.

The Top Ten Things You Need to Know About a Free Market Economy

1. A company can set their own prices to win over customers and beat out the competition. The government has no control over how these companies set their prices which can work for or against the customer.

2. The demand of products will be met more quickly to please customers. Sometimes these demands can be met with the best quality available, but at times the worst product can be put out that can be harmful to the customers because of no government regulation.

3. A wide variety of goods and services can be produced to meet the needs of customers. The greater the need of a product, the more a company will focus on that need, but the least demanding products wont be focused on as much.

4. Different companies can provide the same goods and services to bring competition to the economy, but a company can gain control of a product or service and putting the competition out of business and later becoming a monopoly of the product.

5. Customers have a say in how they want the products and services to be and companies listen to those suggestions to meet those demands. If a company cant meet those demands, they will lose out on the business of those customers to other competition.

6. New companies can jump in at any time and sell a product a company may have been selling for years. Low barriers to enter a free market economy make this possible without government control.

7. If a demand for a product is extremely high, a company can easily switch to that demand to meet the needs of that product or service. Companies do not have to undergo government protocols in order to service the product to the customer.

8. Innovation is one important aspect of a company to keep business booming. This helps increase efficiency of products to help meet the demands of customers.

9. Resources can become a huge waste of money when it comes to a free market economy. You can waste money from over advertising to losing out on products that are not demanded highly by your customers.

10. A free market economy can either make your business or break your business. Good management and meeting demands will make your business, but poor management and greed can break your business.

The Video Lounge

/watch?v=yAa6dYBwy7M

In this video, the narrator explains the basic of what the free market economy is and how it works. He also explains what a free market economy is not.

My Take

A free market economy is a good way to go if you have what it takes to be a competitor. Yes, there will be sacrifices you have to make but to win over a customers approval is a win in itself. If you provide great management and are able to provide what the customer wants, in its best quality and at a great price, you will have what it takes to survive in a free market economy.

References

Rothbard, Murray N. Free Market. econlib.org.

Free Market. wikipedia.com

Mickelson, Brady. Advantages of a Free Market Economy in America. associatedcontent.com. 26 Feb. 2009

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Contact Info: To contact the author of Top Ten Management on Free Trade Economy, please email Joshua Smith at

Biography

David C. Wyld () is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at /. He also serves as the Director of the Reverse Auction Research Center (/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:

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Agriculture in Indian Economy

Indian economy is dependent mainly on agriculture to flourish. The first five year plan was all about agriculture, the green revolution. In order to make Indian economy independent from the very basic level, government has put more emphasis on agriculture. However, in Indian economy, two factors, agriculture and industry, seem to have a conflict with each other. Excessive inclination to agriculture is one of the many features of an underdeveloped country. To understand the reason behind such a proposition one doesnt need to be a scholar in Economics. Lets imagine that after graduating some student can choose his career either in agriculture or in software. In order to make the model simplistic we will ignore all other choices that a student might have in real world. Also we will assume that the student is only concerned about the financial prospect. Which one between software and agriculture will he choose? In order to make the decision we have to undertake some comparative study here. We assume that if you choose a career in computing you may write software to earn $13 per day. With this amount you can buy nearly 50 breads per day. Now as a farmer he can produce 10 breads a day, which means, his earning reduces to $2.6. The same thing happens to a country with excessive dependence on agriculture.

India economy has more than 57% of its national income contributed directly or indirectly by agriculture. We assume that there is a definite and limited amount of labor at a given time. This corresponds to the limited human resource in Indian economy at a given time. Lets assume that for every 3 such workers Indian economy, we can employ none in software and 3 in agriculture, 1 in software and 2 in agriculture, or, 2 in software and 1 in agriculture. Like any other major economies of the world, Indian economy cant entirely do away with at least some form of farming so we can do away with the combination of 3 software engineers and no farmers. Now lets inspect in details the financial outcome of each of these combinations. If you have your entire workforce employed in agriculture then your income will totally depend on farming and of course, the income will be minimal. As the number of software personnel increases your income increases. The gross income reaches its maximum wh en you employ 2 software engineers and only 1 farmer.

In Indian economy for the citizens to accept this crude reality they should have a minimum level of education and awareness. No matter how we deny, but its the basic education that holds the staff of Indian economy. All the policy makings should be directed primarily to this field. Indian economy is self reliant in a sense that it has a large area under cultivation. But that doesnt mean that we have enough food to feed ourselves. Some politicians are extremely sentimental about importing food from other countries. In democratic structure there is a presence of opposition party and the ruler. The resistance offered to the West Bengal government while giving away land to Tata motors to set up automobile farm is an example of how, in democratic system, even a foresighted resolution taken by the ruling party can face mindless opposition. When you are in opposition it doesnt mean that all you have to do is to oppose. The opposition argued that industrialization shouldnt be achiev ed by sacrificing farming. But in reality you have to give up something in order to achieve something. This theory absolutely holds in the present scenario of limited resources. Policy made in order to improve Indian economy shouldnt revolve around elections. The people to whom all these policies are directed to are not getting the entire benefit. The primary cause of this chaos is of course a disbelief in the then government and partly, the lack of political and economical awareness among the villagers. Thus an approach of mass education is what we urgently need in those areas. This is necessary in order to assist the villagers in general and the farmers in particular, to take political decisions independently. If we can make education our backbone the path of healthy industrialization will only get widened and Indian economy will flourish.

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In What Ways Can The Air Pollution in Beijing be Related to The Market Economy?

This essay will explain how air pollution in Beijing relates to the market economy by looking at how one operates. Because modern neoclassical economists form the dominant mainstream school in economics (Himmelweit and Simonetti, 2004, p.86), discussion will be based on the neoclassical model with externalities providing the main focus. Two solutions will then be considered; private or social ownership, and taxation and compensation. It will show how these solutions must operate within the dominant structure that is the neoclassical model of a market. Concluding that for environmental degradation to end, this model needs to change.

A market economy is an economy which has its main way of allocating resources through a market (Himmelweit and Simonetti, 2004, p.82). These resources can be anything with financial value. The neoclassical economic model sees markets operating based on the self-interested choices of individual agents (Himmelweit and Simonetti, 2004, p.86). These agents are generally suppliers or consumers with a self-interest of achieving maximum savings or profits (Himmelweit and Simonetti, 2004, p.91). This extra money is called surplus. In a market economy the most efficient producers offer the best price, thus squeezing out less efficient competitors. Consumers then buy at the cheapest rate. These market forces create a pricing mechanism that regulates the economy. Adam Smith referred to this automatic regulator as the invisible hand (Himmelweit and Simonetti, 2004, p.86). The efficiency of markets can be seen as environmentally positive because cutting costs could mean cutting waste. Ho wever, savings can also be made by having less consideration for social costs like air pollution. These bi-products are called externalities (Himmelweit and Simonetti, 2004, p.98). Externalities are generally overlooked by a neoclassical model that only considers financial issues. One of the externalities of Beijings market economy is air pollution.

In recent years, China has seen spectacular economic growth (Watts, 2005). It has entered the market offering services at cheap prices. This has enticed both consumers and producers. But what are the costs of Chinas efficiency? Economic growth allows more Chinese citizens to own cars. In five years the number of cars in Beijing has more than doubled. This has been blamed for the rapid increase in emissions that contribute to air pollution (Watts, 2005). The externality of more cars is higher air pollution. The Guardian article goes on to claim that pollutants in the sky over China have increased by about 50% during the last 10 years (Watts, 2005). There are fears that air pollution could quadruple within fifteen years unless the rise in energy consumption and automobile use can be slowed (Watts, 2005). Another sign of economic growth is energy consumption. Energy has a value which is regulated by the market economy however, its externality, air pollution, is not. So how do w e force the market economy to take responsibility for its externalities? One option is private or social ownership.

Because markets are structured and run by money, some believe that ownership of vulnerable resources will fix the problem (Himmelweit and Simonetti, 2004, p.101). This may work if the resource is something that can be privatised and controlled. In theory, an owner would have an interest in keeping their resource sustainable. There are many reasons as to why this may or may not work, but the main issue, for the purpose of this essay, is that air is a shared resource, its a public good and no one can be excluded from its consumption (Himmelweit and Simonetti, 2004, p.103). Therefore, there is no control or financial incentive to maintain or improve it. Because the market economy is governed by economic agents, it seems that the best form of regulation would be attaching financial value to the externalities. If ownership isnt the answer then maybe taxation and compensation is.

Taxation could be used against polluters (Himmelweit and Simonetti, 2004, p.103) by attaching a penalty to externalities, thus giving them status in the market. The main problem is how much to charge. This uncertainty is created by the financially diverse world we live in. As Himmelweit and Simonetti point out, richer people may chose higher taxes and still pollute, or not need compensation to live with pollution (2004, p.107). This can be seen with the statement that China is home to 16 of the planets 20 most air-polluted cities (Watts, 2004). China, being a poor country, tolerates such pollution for their economys sake, whereas richer nations, such as England, choose not to. This can be seen in Table 1 that shows water quality considered either good or fair in Englands estuaries in 2005 was roughly 93% of the water tested (The Open University, 2009, p.16). On the other hand, 70% of Chinas rivers and lakes are so toxic that they cannot be used for drinking water (Watts, 200 4). A Marxist would consider this to demonstrate a clear class divide.

From exploring these options, it would appear that the problem is the neoclassical market economy. The economy is governed by economic agents. Our financially diverse world has particular agents that are more sovereign than others (Himmelweit and Simonetti, 2004, p106). Therefore, the more money you have in a market economy, the louder your voice is, the more choice you have over your life, and the more you have to lose should it fail. It seems that for as long as the neoclassical markets dominate our world that agency over air pollution and other externalities will always be restricted. Hinchliffe and Woodward highlight this by saying; economists need to be wary of those economic models (like the dominant neo-classical model) that tend to ignore environmental degradation (2004, p.157). Until we change this and other flaws in the neoclassical model, such as its belief that a market is able to satisfy all important wants (Himmelweit and Simonetti, 2004, p.86), then suffering and environmental degradation will continue. After all, a market cannot revive someone who has died a premature death from breathing poisonous air.

This essay has explored the neoclassical model of a market economy. It has highlighted its positives and negatives showing how it is related to air pollution in Beijing by defining externalities. Two solutions have been presented to control these externalities; private and social ownership, and taxation and compensation. However, both solutions have flaws, the main one being the overriding structure that they have to operate within; the neoclassical model of a market economy. This model, although positive in some aspects, can be shown to perpetuate the Marxist polarised view of class. As long as it exists there will always be a power imbalance. The end result is human suffering for the less sovereign on a tragic scale.

References

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Himmelweit, S. and Simonetti, R. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

Hinchliffe, S. and Woodward, K. (2004), DD121, the natural and the social: uncertainty, risk, change, Milton Keynes, The Open University.

The Open University (2009) Assignments Booklet 2009E, DD121, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

Watts, J. (2005) Satellite data reveal Beijing as air pollution capital of the world, The Guardian, Monday October 31 2005. Reprinted in The Open University, 2009, DD121, Assignments Booklet 2009E, Milton Keynes, The Open University.

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What is The Difference Between The Knowledge Economy And The Traditional Economy?

Within the societal context, the term knowledge economy refers to the effective integration of knowledge aiming to produce economic benefits. Through a proficient and incessant exchange of knowledge, countries are able to realize better economic results. With a finer exploitation of their readily available resources they craft their way towards the improvement of living standards in terms of health, affluence and future progress.

Within the corporate context, knowledge economy emphasizes on the effective generation and leverage of knowledge within the organization as a source of enhanced organizational performance, competitiveness and sustainable competitive advantage. Being a source of innovation and creativity, it attains organizational competence producing agile organizations and contributing to socio-economic growth.

KNOWLEDGE ECONOMY CHALLENGES

Globalization

Effective integration of knowledge necessitates the leverage of rapid technological changes and excessive information, calling for heavy investments in information technology. Gathering, processing and evaluating information in the first instance, and converting it into knowledge in the second instance is a strategic goal for organizations. By bringing down interdepartmental barriers and facilitating company-wide availability and distribution of information, knowledge is disseminated throughout the organization. Consequently, the discovery of new corporate opportunities is facilitated resulting in the formation of entrepreneurship-oriented societies.

Information Paradox

Misuse of information or suboptimal investment decisions in information technology produce information overload. The information paradox - investing heavily in information technology and derive ambiguous results and/or inflexible organizational processes - is a strategic risk for organizations. Misconceived decisions taken by overburdened individuals, who spend enormous time on gathering information, rather than processing and evaluating it, lead to organizational ambiguity and uncertainty.

Human Capital

Human capital is a key strategic asset for organizational performance. Knowledge management, being the fundamental activity for obtaining, growing and sustaining intellectual capital becomes critical for organizational competitiveness. Consequently, knowledge economy requires skilled and knowledgeable individuals, who incessantly use and generate knowledge.

Organizational Alignment

Organizations operating in knowledge economy should emphasize on the alignment of organizational culture, structure and management processes. Managers should employ a stronger understanding of group and individual psychology and eliminate fear and uncertainty from the workplace. Then, strategic consensus will follow turning the organization into a socially responsible entity and a global player.

KNOWLEDGE ECONOMY vs TRADITIONAL ECONOMY

Knowledge Economy favours intellectual capital, while traditional economy favours financial capital. Moreover, knowledge economy focuses on rapid evolution, innovation, and global scope, while traditional economy is slow moving, favours rigid industrial organizations and focuses locally. Within this context, knowledge economy favours opportunity-driven strategies as opposed to the objective-driven strategies favoured by traditional economy. Finally, knowledge economy emphasizes on change management rather than on stability and automation and focuses on market differentiation instead of mass marketing.

The fundamental differences between the traditional and the knowledge economy enable the latter to exploit the full benefit of organizational intellectual capital. In today's competitive marketplace, successful corporations realize that human capital is their greatest competitive advantage. Dependence exclusively on innovation and product superiority to achieve sustainable competitive edge is not enough. Additionally, becoming enthusiastically integrated into global markets on the grounds of enhanced competitiveness requires also social skills from workforce and not only technical expertise.

In conclusion, to meet the social challenges of knowledge economy organizations need to implement customer-oriented strategies and to create and sustain long-term profitable customer relationships. Within this context, organizational intellectual capital is at the core of effective organizational learning.

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Investing in a Slow Economy

Investing in a Slow Economy

Economy's rise and fall. Countries have times of prosperity and times of financial disorder. The economy in America is no different from any other country on the planet. There are times when the US is a financial leader and from time to time, we also fall victim to a bad economy. Does this mean it becomes more difficult to be prosperous in the land of opportunity? Absolutely not! In fact, it is in times of trouble when citizens can begin to invest in companies and properties while the prices are low. Over time these companies and properties will increase in value and show a great return on the investments made during a slow economy.

One option to invest in, especially in a slow economy, is in debt consolidation firms. In a country that has more debt than any other, and where the credit card debt in the United States had risen to a record $790 billion in 2008, people will eventually be paying off those debts when the economy gets better. Right now, we have more pressing matters such as groceries and gas to pay for now. Expect a good return on investing (ROI) in debt consolidation and in banks when the economy gets better.

The Stock Market is an investing market almost everyone is familiar with. A little less known market to invest in is the money market, or the Foreign Exchange Market. In a slow economy, the currency becomes less and less valuable. How can you benefit from a worthless dollar? Buying it might seem like the opposite direction you'd want to be heading. But just like what was stated above, economies fall only to rise again. You just need to remember business basics, buy something cheap and sell it for more than you bought it. Currencies will fall and they will rise. You should always buy at the end of a depression just before the currency becomes more valuable. Then as the worth increases, sell and receive a much higher profit.

A great optimistic view of bad economies is to remember that it just means everything is cheaper. Buy it all up before it becomes more expensive and you can't buy it. Even if you aren't going to resell, you at least bought it at a steal. There is no reason why you can't make money from investing in a bad economy. If more people invested in a bad economy, it would actually help pull it out to rise again. Just keep this key in mind, buy cheap and sell high.

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Special & Differential Treatment in World Trade Organization

The provisions include, things like, longer time periods for implementing Agreements, commitments or measures to increase trading opportunities for developing countries.[1] Such provisions are referred to as special and differential treatment provisions.

The special provisions of the WTO include: Relaxation of time periods for implementing Agreements and commitments, Specific measures to increase and promote the trade of developing countries, provisions making it mandatory for all the WTO members to safeguard the trade interests of developing countries, possible support to help the developing countries in building the infrastructure for WTO work, handling disputes, and implementing technical standards, and provisions related to Least-Developed country (LDC) Members.[2]

While there are 6 billion people in this world today, the wealthy part of the world, the developed world, contains no more than 15% of the worlds population. The rest of the world which falls under brackets such as less developed countries or least developed countries or alternatively, developing countries or under-developed countries, and comprises of 85% of the worlds population, existing in a state of near minimum subsistence. The world therefore faces a divide known as the developmental gap which refers to the discrepancy between the living standards of these wealthy and developed countries on one hand, and less developed countries with relatively poorer economies on the other hand. Interestingly, it has been observed in the recent past that the standards of living in the developed world keep getting better while the poorest of countries struggle to make any progress; further widening this development gap.)[3] This results in an even more unequal world with unequal means of livelihood.

However, while there are developed economies which include some of the wealthiest countries of the world and other economies which have struggled to grow, most countries fall in the category of the developing world with economies in constant growth, at however differential rates, yet full of promise to grow further. It has been observed by economists that the reason behind the success of under-developed economies robust growth has been their success in implementing outward-oriented reforms that have enabled them to integrate rapidly into the global economic and financial system.[4]

It is an acceptable fact that today no developing country can play a significant role in the global trading system without the presence of trans-national countries within its borders. It has also been observed that the model that promises maximum returns to these developing economies is not one of extreme protectionism but a model that balances protection and liberalization. This does not mean that protectionism as a policy has failed miserably, but in turn highlights the importance of liberalization with planned discrimination and safeguards to ensure the development of local industries. The basic intention is to help the developing country in question to integrate with the global economy and let it benefit from whatever it is that is a distinctive characteristic of that country vis--vis its competitors. Once the country has a firm footing in the international market, the country is able to make use of such stability and guide itself to a future of growth and let its econom y flourish.

Approximately two-thirds of the 150 member states that constitute the World Trade Organization (WTO) are developing countries. The number of developing countries in the WTO is ever increasing and so is their participation. Considering the vast majority, it comes as no surprise that the interests of these developing countries lie at the core of the organizations policies. [5]

Now the question arises, what exactly are developing countries, and who makes the distinction between a developed and a developing country? Moreover, what purpose does this distinction serve? While there is no universally accepted definition of a developing country, the World Bank, the International Monetary Fund and the United Nations use different yardsticks to determine the development status of a country. There is, however, no official list of developing countries. The practice has been that such status is self determined.[6] The member countries of the WTO announce their own status at the WTO as either developing or developed. However, this status can be challenged by other member countries as there are several benefits and rights that are reserved at the WTO for developing countries. These benefits may include longer transitional periods before a developing country may be expected to comply with global norms, or the provision of technical assistance to developing count ries which may not be provided to developed nations. [7]

Such are the needs of a developing country; leniency and planned protection in order to ensure that the developing economy can compete internationally with other countries, some of them developed economies, and establish a firm foundation in this global economy and as a result tread the path of growth and economic success.

Without special provisions for such economies the developed world, which already dominates international trade, can easily exploit a poorer nation owing to a better bargaining position and better sustainability of economy. Keeping this mind, the researcher thus concludes that special provisions have to be made for the developing countries and the least developed countries to enable them to a platform which gives them better access to international markets while protecting their own interests. This also safeguards them from harsh policies and treaties with better off nations which might favor the rich countries who dominate world trade and its governing organizations and are able to heavily influence policy decisions at international forums. Such policies or treaties might otherwise have the tendency to significantly deter economic growth of developing countries due to the sensitive nature of their economies. Moreover, incentives and benefits provided to these countries can i n fact boost this economic growth further.

The standard development arguments for special and differential treatment are two fold. First , it is argued, it is developmentally undesirable for some countries to follow policies that are sensible for others. The agreement on agriculture for example, has a core objective the removal of the substantial OECD distortions that have led to higher agricultural output that can be justified economically.[8]

The other argument is that parts of the new trade agenda are developmentally desirable, but the opportunity cost of implementation at this stage is too high.[9]This is because it is expensive in terms of finance, human resources, or governmental/judicial attention. At the same time, the cost to the world trade system of non implementation is trivial (because the countrys share of relevant trade is so miniscule.[10]

To grasp the need for special and differential treatment , the researcher has taken into consideration the need for such treatment with respect to international trade. International trade plays a significant role in the development of a countrys economy and engines its economic growth. It is this international trade that has led to major economic advancement over the past five decades or so, and the process of globalization and the increased accessibility of markets have only aided this process. We live in a world of specialization and inter-dependence. Every country seeks to maximize their profits by playing to their strengths and marketing their products and services in which they hold an edge over their competitors. International trade has therefore become an/ indisputable fact and the dilemma today is not whether to trade or not, but instead how to trade. [11]

As a consequence of a liberal outlook and ready access to global markets, nations are able to compete and market their products globally by increasing their economic efficiency to meet their aim of accumulation of wealth. It cannot be denied that there exists an underlying link between trade and development. It is widely believed that while trade may cause increased inequalities, in the long run trade forms an important source of income and is useful in reducing poverty. [12] Therefore, it has been globally understood that trade is an essential part of a wider process of a countrys development.

It has been recognized worldwide that trade is an essential contributor to a countrys national income and has a major role to play in its development. This is the reason why developing countries are offered better trading opportunities to help them integrate with the international trade.

While discussing the special and differential treatment of third world countries , it becomes quintessential to mention the india-ec case. In april 2004, the wto appellate body issued a report which allowed a developed country to apply different tariffs to products originating in different generalized system of preferences (GSP) beneficiaries, it was subject to the said requirement that identical tariff is applied to the products of all similarly situated developing country members with the development, financial and trade needs to which the differential tariff treatment is intended to respond. India brought forward this case against the European Communities challenging their discriminatory tariff preferences.[13]

Research Questions. What are the various provisions for special and differential treatment in the WTO? 2. What are the reasons for special and differential treatment in the WTO? 3. What does the India-EC case deal with?

Various Provisions for Special & Differential Treatment in the WTO. The WTO Secretariat has made several compilations of the special and differential provisions and their use.

The ambit of special and differential treatment consists of 145 specific provisions spread across the different Multilateral Agreements on Trade in Goods; the General Agreement on Trade in Services; The Agreement on Trade-Related Aspects of Intellectual Property; the Understanding on Rules and Procedures Governing the Settlement of Disputes; and various Ministerial Decisions. Of the 145 provisions, 107 were adopted at the conclusion of the Uruguay Round, and 22 apply to leastdeveloped country Members only. [14] The said provisions referred to : actions developing countries might undertake via exemptions from disciplines otherwise applying to the membership generally; exemptions from commitments otherwise applying to Members in general; a comparatively low level of commitment for the developing countries as compared to the developed countries and membership in general.

The phases of development of the special treatment of the third world countries can be studied in the form of four phases. The first phase starts from the forming of the GATT in 1948 till the beginning of the Tokyo Round in 1973. The second phase refers to the Tokyo Round itself, from 1973 to 1979. The third phase dates from the end of the Tokyo Round to the end of the Uruguay Round, that is from 1979 to 1995. The fourth phase starts from the end of the Uruguay Round until the present.[15] The analysis that follows distinguishes five arguments that have been advanced for Special &Differential treatment. The five categories are stated as follows: 1. Special and differential treatment is an acquired political right. 2. Developing countries ought to enjoy privileged access to the markets of their trading partners, particularly the developed countries. 3. Developing countries ought to have the right to restrict imports to a greater degree than developed countries 4. Developing countries ought to be allowed additional freedom in order to subsidize exports. 5. Developing countries ought to be allowed flexibility in lieu of the application of certain WTO rules, or in order to postpone the application of rules as stated by WTO.[16]

Chapter-2Reasons For Special And Differential Treatment In The WTO The concept of this differential treatment stems from the understanding that many policies that may be implemented with the focus on a developed economy could possibly have ill effects on a poorer economy. Policies which might make sense for one nation might not have the same consequences in another economy. Or in other words, different economies may have different characteristics and needs. For example, a policy which might be initiated to counter the excessive subsidies in rich countries, say in the agriculture sector, can easily restrict the support that could be provided to a poor country for its agriculture and thereby have unwanted results. To elaborate the example, the Agreement on Agriculture has provisions for the removal of certain subsidies which had led to higher agricultural output that that could be justified economically and therefore the agreement focused, as one of its core objectives, on the removal of these subsidies. But the case with developing and least developed countries is such that they suffer from neglect and have been unable to benefit as much from these subsidies. These poor economies still have lower agricultural production than it should be[17] If instruments to remove the subsidies were to be introduced, their economies would further suffer.

Therefore, such policies must bear in mind the sensitive nature of the economies that the policy is likely to affect. This can be done by categorizing the countries, as done under the WTO, into developed and developing economies and implementing these policies according to the needs of the country and the expected consequences of the policy.

But the concept of such special and differential treatment has faced certain criticism as well. This is predominantly based on the root of this concept. Such leniency is justified on the basis that certain laws applicable to all nations may have an element of exploitation and anti-development. By relaxing such laws when the country under question is a developing country, unfair treatment is doled out to other countries which do not have the privileged tag of being developing. There also exists a lapse in the system vis--vis the criteria that a country must meet in order to be eligible for privileges. As per the current system, a country may decide its own status as either developing or developed. This may lead to paradoxical situations where a country which may not require certain privileges may be put at a discriminatory advantage over other countries by the grant of these privileges. Moreover, if there are laws which have the tendency of being exploitive or harsh, they sho uld be removed as a whole. Furthermore, there needs to be a clear understanding of the distinction between laws which may be negotiable and those which must be binding on all the countries[18]

While the weaknesses in the capacities of developing countries forms the basic reason for the continuous of such differential treatment, such benefits should only be made available to the countries which are low income countries and those which may need help to become integrated into the international trade system, or in other words, which are in dire need for trade opportunities. [19]

This results in a paradoxical situation. What about those nations which may fall under the tag of developing countries, but in effect be high-income nations? Unless some differentiation is made between these countries, it is not possible to frame an efficient and fair system of special and differential treatment.

Although the introduction of special provisions for developing countries in the WTO policies would benefit the developing countries without affecting the developed countries too much, the counter argument to this lenient treatment is that the opportunity cost that the implementation of these provisions pose to other nations. Many countries are of the opinion that while developmentally these might be desirable, but the opportunity cost to the trade system is massive as compared to the insignificant contribution some of these least developed and developing countries would make to the international trading system. If one was to subscribe to this view, then it would be of more desirable outcome to introduce these provisions at a later stage when the country is in a position to contribute to the international trade system more significantly in return and in the meantime find better avenues which promise greater returns with regard to the attention, finance and human resources tha t are required for implementation of the special benefits. [20]

Chapter-3India EC Case Since the inception of the WTO in 1995, India has been involved in 33 disputes at the WTO. It has initiated cased against other countries 16 times and has faced complaints against itself 17 times. India is amongst the most frequent users of the WTO dispute resolution system from among the developing country members. Amongst the more recent disputes, India was involved in a dispute with the EU where it contested the tariff concessions granted by the members of the European Communities (EC) to twelve developing countries under its Generalized System of Preferences (GSP). The ground for this dispute was Indias belief that under the WTO structure, discrimination could only be made in favor of least developed and developing countries. Contrary to this, in December 2001, the EC had launched its GSP scheme which had provisions for five different preferential tariff preferences. The effect of this arrangement was that twelve countries received greater tariff reductions as compared t o countries like India which created undue difficulties for Indias exports to the EC and took away the benefits given to India under the most favored nation policy. [21]

Conclusion Special and Differential Treatment at the WTO: It is the privileged treatment offered to developing nations at the WTO based on the understanding that needs of these countries are substantially different from those of developed nations. This principle allows a certain degree of discrimination in favor of developing countries.

The India-EU Dispute: In India contested the European Communities Generalized System of Preferences wherein distinction was made between beneficiary countries and twelve countries were granted greater tariff concessions owing to the five different preferential tariff preferences.

The researcher concludes the draft with the mentioning of the relevance of the special and differential treatment for developing and least developed countries. It is essential for these countries to receive such benefits as their resources and services are not comparable to developed countries and such treatment provides an impetus to such countries to produce and prosper.

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Special Economic Zone: A Boon For Indian Economy

It is a trade capacity development tool, with a goal to promote rapid economic growth by using tax and business incentives to attract foreign investment and technology. By offering privileged terms, Special Economic Zones attract investment and foreign exchange, spur employment and boost the development of improved technologies and infrastructure.

In India, Special Economic Zones are being established in an attempt to deal with infrastructural deficiencies, procedural complexities, bureaucratic hassles and barriers raised by monetary, trade, fiscal, taxation, tariff and labour policies. Since country-wide development of the infrastructure is expensive and implementation of structural reforms would require time, ( Special Economic Zones/Export Processing Zones) are being established as industrial enclaves for expediting the process of industrialization.

One of the earliest and most famous Special Economic Zone was founded by the government of the People's Republic of China under Deng Xiaoping in the early 1980s.

Government of India in April 2000 announced the introduction of Special Economic Zones policy in the country. As of 2007, more than 500 Special Economic Zones have been proposed, 220 of which have already been created. This has raised the concern of the World Bank, which questions the sustainability of such a large number of Special Economic Zones.

Tracing Indian economic reforms In India several attempts have been made to liberalize the system of economic management. In 1980s, the Indian Government focused on reorganizing low-efficient state-run enterprises and partial disinvestment, relaxing the control on private enterprises and foreign capital, introducing competitive mechanisms, reducing protection for domestic industries, promoting and importing advanced technological equipment from abroad etc.

In 1991, the reformed trade and industrial policy eliminated licensing requirements for private domestic and foreign investment in certain industries and relaxed the restrictions under the Monopolies and Restrictive Trade Practices Act on expansion, diversification, mergers and acquisitions by large firms and industrial houses. Special Economic Zones came in pursuance of this export led growth strategy.

Special Economic Zones were announced by the Government of India in April 2000 as a part of the Export-Import policy of India. The government realized the need to enhance foreign investment, promote exports from the country and at the same time provide a level playing to the domestic enterprises, while ensuring manufacturers to be competitive globally.

The Special Economic Zones as announced by the Government of India in 2000 were deemed to be foreign territory for the purposes of trade operations, duties and tariffs. These zones were to provide an internationally competitive and hassle free environment for exports. Units were allowed be set up in Special Economic Zone for manufacture of goods and rendering of services. All import/export operations of the Special Economic Zone units were on self-certification basis. Anything could be imported duty free but sales in the Domestic Tariff Area by Special Economic Zone units were subject to payment of full Custom Duty and as per import policy in force. Further Offshore banking units were being allowed to be set up in the Special Economic Zones. The policy provided for setting up of Special Economic Zones in the public, private, joint sector or by State Governments.

On 31st August 2004 the Department of Commerce announced the Foreign Trade Policy 2004-2009 to create an appropriate institutional framework and policy environment for facilitation and growth of external trade. The basic objective of this policy was to double India's share of global merchandise trade by 2009 and make exports an effective instrument of economic growth and employment generation. The Special Economic Zone Act, 2005 and the Special Economic Zone Rules, 2006 were introduced under this policy, to regulate and promote the development of these industrial enclaves.

The Act designated the Special Economic Zones a duty free enclave to be treated as foreign territory only for trade operations and duties and tariffs. Under the Act, no license is required for import and no routine examination is to be conducted by the custom authorities of the export/import cargo. To aid backward and forward integration of the economy, the Act provides exemptions to Special Economic Zone units and Special Economic Zone developers from all indirect taxes, including basic customs duty, countervailing duty, education cess, and direct taxes while at the same time domestic sales are subject to full customs duty and import policy in force. The Act provided the freedom to subcontract. It also permitted manufacturing, trading and service activities in the Special Economic Zones.

India and China : Whether on a Level Platform Success stories of large and small developing countries can be explained by the growth of world trade and opening up of these economies with market based deregulation. But from any in-depth scrutiny one finds that the reform package under the broad heading of "liberalization" is very different from country to country. There is no standard recipe of a "reform package". A lot of factors influence the performance of Special Economic Zones in a country e.g. economic history, location, industries, state policy etc. Since India has adopted the idea of the special economic zones from China it becomes pertinent to study the history of economic development in India and China.

China's success can be ascribed largely because of its effective population control. In the pre-reform days, both in China and India top priority was given to equity, removing poverty and increasing the social aspects of standards of living. This, however, was attempted in China under a total state-controlled economy and in India with the public sector playing a dominant role along with the market forces. Both the economies adopted a strategy of import substitution and heavy industry growth. China over time, realized that maintaining high standards of living becomes difficult unless efficiency in the use of resources is increased. Its attempt to maintain equity through forced saving and administered directives resulted in social unrest, which came to a breaking point after the controversial Cultural Revolution. The key objective of present reform in China is to bring incentives back in the economy by increasing the role of the market with minimum changes in their political i nstitutions. This is defined in China as an experiment in a socialistic market economy.

In India, heavy import substitution lead to increased inefficiency in production and generation of surplus for maintaining the tempo of equity measures as a result social development became impossible. This led to heavy borrowing, culminating in a balance of payments crisis. To meet the crisis, this new economic policy in India was initiated.

China's success in attracting foreign direct investment and becoming one of the top exporting countries of the world hinged on the careful implementation of its Special Economic Zone policy. Size, location, flexible labour laws and stable policies were the factors primarily responsible for making Chinese Special Economic Zones attractive to foreign investors. In India, the fiscal concessions being offered to developers and units are the primary driving force.

Chinese government started building Special Economic Zones way back in 1979. The idea behind the Special Economic Zones was to experiment with liberal policies in certain ear-marked regions while insulating the rest of the economy from their influence. The government identified huge tracts of land, near the coastal region, and started building mega cities with all required infrastructure. Stringent labour laws applicable in China were relaxed in these regions and foreign investment was encouraged by offering concessions and promising of stability.

In 1980 four Special Economic Zones namely, Shenzhen, Zhuhai, Shantou and Xiamen were opened up. In 1984, fourteen coastal cities were opened up as a further step. In 1985, three delta areas along the Yangtze River and Pearl River and in the southern part of Fujian province as well as several other places were opened up. In the following years, Hainan Island, Pudong New Area in Shanghai, five big cities along the Yangtze River, eighteen provincial capitals and a part of inland and border cities were opened up. These zones were created initially as experimental stations to adjust and watch their operations vis--vis open market interactions.

Though India had a head-start in the direction by building its first export processing zone in 1969 with certain minimum infrastructure and fiscal sops, it could not muster enough political will to build full-fledged Special Economic Zones with foreign territory status in the matters of international trade till the turn of the century. As opposed to five mega Special Economic Zones built by the Chinese government (the largest being Shenzhen built over 49,500 hectares), India opened its doors to private players and allowed sector-specific Special Economic Zones to develop on just 10 hectares of land. As a result, more than 500 Special Economic Zones have been proposed, 220 of which have already been created. The economies of scale, which seems to have worked so well in China by reducing production costs, may not have the same effect in the Indian Special Economic Zone s.

In China, the government chose the location for Special Economic Zone s with a lot of thought with all five located near the coastal region. This made it easier for the Special Economic Zone units to export their products and import inputs. In India, Special Economic Zones are being built all over the country, wherever land can be acquired by the developers. This has also led to allegations of land-grabbing and conversion of productive agricultural land by developers. As a result, Centre has made it mandatory that all proposals should have a certificate from the state governments notifying that the land being used is non-agricultural for at least 90%.

Flexibility in labour laws, which played an important role in attracting foreign investors, is absent in the Indian Special Economic Zones. This is one of the prices India has to pay for the advantages of a federal democratic government. India has, however, tried to make up for all the disadvantages by offering attractive fiscal sops. Tax holidays for Special Economic Zones in India are longer and steeper than those given by China. This had given rise to some dissent from the finance ministry which had complained that the fiscal loss would be immense. In fact the scheme has generated a difference of opinion between the Finance and Commerce Ministries. While the former is voicing its concerns about possible revenue loss from the tax privileges for the Special Economic Zones, the latter is stoutly defending the policy with statistics suggesting minimal losses and highlighting eventual gains in terms of employment and revenues

Reserve Bank of India has also expressed its concerns about the revenue losses and the uneven pattern of development. Reserve Bank of India insisted on factoring the revenue implications of the taxation benefits. The revenue loss for the Government in providing incentives may be justified only if the Special Economic Zone units ensure forward and backward linkages with the domestic economy. Also, as resources are being diverted from the less developed, growth will not be uniform.

One of the most basic difference between the Special Economic Zone model adopted in China and India is that the Chinese Special Economic Zone initiative is government driven, whereas Indian Special Economic Zones are driven by private sector . In China , the State acquires the land and develops the required infrastructure, while private enterprises are invited to set up units. Under such a system, land continues to be under the ownership of the State. In India, however, private entities are being involved in developing the Special Economic Zone infrastructure. As a result, Land is being acquired by the State and handed over to private developers.

Current Controversy The Economic Survey of 2006-07 highlighted the fact that Special Economic Zone s are testing grounds for the implementation of liberal market economy principles. At the same the survey emphasized on some apprehensions against the Special Economic Zones: Generation of little new activity as there may be relocation of industries to take advantage of tax concessions, Revenue loss, Large-scale land acquisition by the developers, may lead to displacement of farmers with meager compensation, Acquisition of prime agricultural land, having serious implications for food security, Misuse of land by the developers for real estate and Uneven growth aggravating regional inequalities.

The Survey also mentioned that many of these apprehensions, however, could be addressed through appropriate policies and safeguards. A major controversy surrounding the implementation of the Special Economic Zone scheme has been the ruthless manner adopted for acquiring land. News reports highlighted protests across the country against acquisition of lands for the purpose of establishing Special Economic Zones. The "SEZ No More" campaign gained momentum after the bloody chapter in Nandigram.

Since, developing Special Economic Zones involves massive displacement of farmers, it is essential that a systematic approach should be followed for ensuring balance of interests. Consequently, state governments have been advised that in land acquisition for Special Economic Zones, first priority should be for acquisition of waste and barren land and if necessary single crop agricultural land. If perforce a portion of double-cropped agricultural land has to be acquired to meet the minimum area requirements, especially for multi-product Special Economic Zone, the same should not exceed 10 % of the total land required for the Special Economic Zone

The government has also announced the new National Policy on Rehabilitation and Resettlement 2007. This policy would provide land-for-land compensation for acquisition of land for development purposes, including Special Economic Zones, and employment to at least one person from each affected family. A National Rehabilitation Commission would be set up by the Central Government, which would be duly empowered to exercise independent oversight over the rehabilitation and resettlement of the affected families. Further, wage employment would be provided to the willing affected persons in the construction work in the project. The policy also ensures housing benefits including houses to the landless affected families in both rural and urban areas.

Adequate provisions have been made for financial support to the affected families for construction of cattle sheds, shops, working sheds; transportation costs, temporary and transitional accommodation, comprehensive infrastructural facilities and amenities in the resettlement area including education, health care, drinking water, roads, electricity, sanitation, religious activities, cattle grazing, and other community resources.

The benefits expressed in monetary terms have been linked to the Consumer Price Index, and the same shall also be revised suitably at appropriate intervals. Special provision has been made for providing life-time monthly pension to the vulnerable persons, such as the disabled, destitute, orphans, widows, unmarried girls, abandoned women, or persons above 50 years of age (who are not provided or cannot immediately be provided with alternative livelihood).

A strong grievance redressal mechanism has been prescribed, which includes standing R&R Committees at the district level, R&R Committees at the project level, and an Ombudsman duly empowered in this regard. The R&R Committees shall have representatives from the affected families including women, voluntary organizations, Panchayats, local elected representatives, etc. Provision has also been made for post-implementation social audits of the rehabilitation and resettlement schemes and plans.

For effective monitoring of the progress of implementation of R&R plans, provisions have been made for a National Monitoring Committee, a National Monitoring Cell, mandatory information sharing by the States and Union Territories with the National Monitoring Cell, and Oversight Committees in the Ministries/Departments concerned for each major project.

For ensuring transparency, provision has been made for mandatory dissemination of information on displacement, rehabilitation and resettlement, with names of the affected persons and details of the rehabilitation packages. Such information shall be placed in the public domain on the Internet as well as shared with the concerned Gram Sabhas and Panchayats by the project authorities. This policy aims at striking a balance between the need for land for development purposes and protecting the interests of land owners and other displaced people.

Conclusion A study conducted by Aradhna Aggarwal on the Impact of Special Economic Zones on Employment, Poverty and Human Development indicated, that Employment generation, both direct and indirect, has thus far been the most important channel, through which Special Economic Zones have impacted on human development and poverty reduction in India. However, the role of Special Economic Zone s in human capital formation and as an engine for promoting new knowledge, technologies and innovations through technology transfers and technology creation appears to be relatively limited. With new generation Special Economic Zones emerging, the scope of human capital formation and technology upgrading effects will widen. It is therefore important for the government to play a pro active role in strengthening these effects.

For the contribution of Special Economic Zones to various aspects of human development to be realized, it is important to forge linkages between the domestic economy and Special Economic Zones. Systematic efforts need to be made to help zone units forge links with the outside units. Also, the effects of Special Economic Zones are contingent upon the success of these zones in attracting investment, in particular, Foreign Direct Investment. A comprehensive policy framework is required to attain this. The government has to ensure that strategies are developed in a timely manner to strengthen the opportunities that are likely to emerge, protect interests of the Special Economic Zones workers, and forge linkages between Special Economic Zones and the domestic economy. Such a regulated and monitored approach is the only means of attaining the actual potential of these Special Economic Zones.

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Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment. Any kind of object or secure verifiable record that fulfills these functions can serve as money.Money originated as commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money usually forms by far the la rgest part of the money supply. money is everything in this world right now.with money want we want buy, we can easygoing buy what we want.In the past, money was generally considered to have the following four main functions, which are summed up in a rhyme found in older economics textbooks: "Money is a matter of functions four, a medium, a measure, a standard, a store." That is, money functions as a medium of exchange, a unit of account, a standard of deferred payment, and a store of value.However, modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium o f exchange is in conflict with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[5] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term 'financial capital' is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.

n economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the amount of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate.Modern monetary theory distinguishes among different ways to measure the money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2 and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; and M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments.Another measure of money, M0, is also used; unlike the other measures, it does not represent actual purchasing power by firms and households in the economy. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks.

Currently, most modern monetary systems are based on fiat money. However, for most of history, almost all money was commodity money, such as gold and silver coins. As economies developed, commodity money was eventually replaced by representative money, such as the gold standard, as traders found the physical transportation of gold and silver burdensome. Fiat currencies gradually took over in the last hundred years, especially since the breakup of the Bretton Woods system in the early 1970s.

Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.Commercial bank money is created through fractional-reserve banking, the banking practice where banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand.Commercial bank money differs from commodity and fiat money in two ways, firstly it is non-physical , as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The process of fractional-reserve banking has a cumulative effect of money creation by commercial banks, as it expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators.The money supply of a country is usually held to be the total amount of currency in circulation plus the total amount of checking and savings deposits in the commercial banks in the country. In modern economies, relative ly little of the money supply is in physical currency. For example, in December 2010 in the U.S., of the $8853.4 billion in broad money supply (M2), only $915.7 billion (about 10%) consisted of physical coins and paper money.

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When gold and silver are used as money, the money supply can grow only if the supply of these metals is increased by mining. This rate of increase will accelerate during periods of gold rushes and discoveries, such as when Columbus discovered the new world and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This causes inflation, as the value of gold goes down. However, if the rate of gold mining cannot keep up with the growth of the economy, gold becomes relatively more valuable, and prices (denominated in gold) will drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries.Modern day monetary systems are based on fiat money and are no longer tied to the value of gold. The control of the amount of money in the economy is known as monetary policy. Monetary policy is the process by which a government, central bank, o r monetary authority manages the money supply to achieve specific goals. Usually the goal of monetary policy is to accommodate economic growth in an environment of stable prices. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[34]A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union.

In the US, the Federal Reserve is responsible for controlling the money supply, while in the Euro area the respective institution is the European Central Bank. Other central banks with significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England.For many years much of monetary policy was influenced by an economic theory known as monetarism. Monetarism is an economic theory which argues that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[35] supported by the work of David Laidler,[36] and many others. The nature of the demand for money changed during the 1980s owing to technical, institutional, and legal factors[clarification needed] and the influence of monetarism has since decreased.See also

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