Limitation of Ratio Analysis

Limitation of Ratio Analysis Limitation of Ratio Analysis Learning Objective Explain to the participants on the limitation of ratio analysis. Important Terms Creative accounting. Accounting Policies. As we have alredy discussed, it is important to compare in order to be able to analyse and to be able to comment and subsequently recommend in order that a business is as efficient as possible. Limitations of Ratios Accounting Information Different Accounting PoliciesThe choices of accounting policies may distort inter company comparisons. Example IAS 16 allows valuation of assets to be based on either revalued amount or at depreciated historical cost. The business may opt not to revalue its asset because by doing so the depreciation charge is going to be high and will result in lower profit. Creative accounting The businesses apply creative accounting in trying to show the better financial performance or position which can be misleading to the users of financial accounting. Like the IAS 16 mentioned above, requires that if an asset is revalued and there is a revaluation deficit, it has to be charged as an expense in income statement, but if it results in revaluation surplus the surplus should be credited to revaluation reserve. So in order to improve on its profitability level the company may select in its revaluation programme to revalue only those assets which will result in revaluation surplus leaving those with revaluation deficits still at depreciated historical cost. Information problems Ratios are not definitive measuresRatios need to be interpreted carefully. They can provide clues to the companys performance or financial situation. But on their own, they cannot show whether performance is good or bad.Ratios require some quantitative information for an informed analysis to be made. Outdated information in financial statementThe figures in a set of accounts are likely to be at least several months out of date, and so might not give a proper indication of the companys current financial position. Historical costs not suitable for decision making IASB Conceptual framework recommends businesses to use historical cost of accounting. Where historical cost convention is used, asset valuations in the balance sheet could be misleading. Ratios based on this information will not be very useful for decision making. Financial statements certain summarised informationRatios are based on financial statements which are summaries of the accounting records. Through the summarisation some important information may be left out which could have been of relevance to the users of accounts. The ratios are based on the summarised year end information which may not be a true reflection of the overall years results. Interpretation of the ratioIt is difficult to generalise about whether a particular ratio is good or bad. For example a high current ratio may indicate a strong liquidity position, which is good or excessive cash which is bad. Similarly Non current assets turnover ratio may denote either a firm that uses its assets efficiently or one that is under capitalised and cannot afford to buy enough assets. Comparison of performance over time Price changesInflation renders comparisons of results over time misleading as financial figures will not be within the same levels of purchasing power. Changes in results over time may show as if the enterprise has improved its performance and position when in fact after adjusting for inflationary changes it will show the different picture. Technology changesWhen comparing performance over time, there is need to consider the changes in technology. The movement in performance should be in line with the changes in technology. For ratios to be more meaningful the enterprise should compare its results with another of the same level of technology as this will be a good basis measurement of efficiency. Changes in Accounting policyChanges in accounting policy may affect the comparison of results between different accounting years as misleading. The problem with this situation is that the directors may be able to manipulate the results through the changes in accounting policy. This would be done to avoid the effects of an old accounting policy or gain the effects of a new one. It is likely to be done in a sensitive period, perhaps when the businesss profits are low. Changes in Accounting standardAccounting standards offers standard ways of recognising, measuring and presenting financial transactions. Any change in standards will affect the reporting of an enterprise and its comparison of results over a number of years. Impact of seasons on tradingAs stated above, the financial statements are based on year end results which may not be true reflection of results year round. Businesses which are affected by seasons can choose the best time to produce financial statements so as to show better results. For example, a tobacco growing company will be able to show good results if accounts are produced in the selling season. This time the business will have good inventory levels, receivables and bank balances will be at its highest. While as in planting seasons the company will have a lot of liabilities through the purchase of farm inputs, low cash balances and even nil receivables. Inter-firm comparison Different financial and business risk profileNo two companies are the same, even when they are competitors in the same industry or market. Using ratios to compare one company with another could provide misleading information. Businesses may be within the same industry but having different financial and business risk. One company may be able to obtain bank loans at reduced rates and may show high gearing levels while as another may not be successful in obtaining cheap rates and it may show that it is operating at low gearing level. To un informed analyst he may feel like company two is better when in fact its low gearing level is because it can not be able to secure further funding. Different capital structures and sizeCompanies may have different capital structures and to make comparison of performance when one is all equity financed and another is a geared company it may not be a good analysis. Impact of Government influenceSelective application of government incentives to various companies may also distort intercompany comparison. One company may be given a tax holiday while the other within the same line of business not, comparing the performance of these two enterprises may be misleading. Window dressingThese are techniques applied by an entity in order to show a strong financial position. For example, MZ Trucking can borrow on a two year basis, K10 Million on 28th December 2003, holding the proceeds as cash, then pay off the loan ahead of time on 3rd January 2004. This can improve the current and quick ratios and make the 2003 balance sheet look good. However the improvement was strictly window dressing as a week later the balance sheet is at its old position. Ratio analysis is useful, but analysts should be aware of these problems and make adjustments as necessary. Ratios analysis conducted in a mechanical, unthinking manner is dangerous, but if used intelligently and with good judgement, it can provide useful insights into the firms operations.

Terrorism - Towards An Understanding :: essays research papers fc

I am in complete disagreement with Corrado and Cohen's theory of political terrorism. I believe that political terrorism is committed by dominant, aggressive males in positions of power, acting with other dominant, aggressive males for more power, money, or status, and without regard to the spiritual nature of human kind. I believe that dividing political terrorism into state or anti state terrorism, does not get to the root cause of terrorism. To uncover the true cause of terrorism, I believe involves identifying motive and personalities of those "terrorizing". In most cases it is dominant, aggressive males who hold positions of power in either the political, economic, or military arenas, and who manipulate events to suite themselves, e.g., Hitler, Stalin, Mussolini, and in more recent times, Slobodon Milosovic. Those that fight against dominance and aggression, I believe should be called revolutionaries. For example, the Irish Republican Army. The North of Ireland harboured a protestant streak of dominant, aggressive males, who in attempt to hang on to power, unleashed the horrific events of Bloody Sunday, and many other uncalled for acts of aggression. These acts where sanctioned by politicians, in both the North of Ireland and England, who acted in conjunction with both the Royal Ulster Constabulary, and the British Army. On Bloody Sunday, the British soldiers deliberately aimed and killed young men, they believed most likely to be members of the Irish Republican Army, at the peaceful, albeit illegal, demonstration. "...all the deceased where men, and nine of them were under the age of 25." It was an effort to stop what has almost come to pass. A fair assembly of politicians, who represent all layers and fabrics of the society. The event is still under review. The actions of the Irish Republican Army has eventually destroyed the positions of power that the dominant, aggressive males abused. But I do not be lieve that we should label those who fought for a better life as terrorists. People who put their lives on the line for true justice, I believe should be referred to as a Revolutionaries. We are exposed to new conflicts now, almost on a daily basis, and no two situations are ever identical. This makes the breakdown of a typology extremely difficult. The typology which defines "political terrorism", according to Corrado and Cohen, has eleven different categories, in order to encompass all of the different situations. These typologies may be useful in a security setting, but in order to get to the bottom of the problem, I believe that rather than complicating the issue with many meanings, it should instead be simplified and attributed to one of two choices.

The Jump :: First Person Narrative Examples

Anxiety took over my body as I prepared to jump. The 80 foot waterfall looming atop Turner Falls seemed to be challenging me, beckoning me to come and attempt to plunge from the rock into the waterfall to try to endure the pressure as the water knocked me straight down into the deep waters and jagged rocks which awaited below. I waited with an eager excitement thinking that if I could take this plunge, I would really be able to swim with those I saw as the "big fish." Waiting on that rock I had no idea that the events following my wait would change that jump from being something I so much desired into something I would be grateful to never personally experience. Ahead of me in line were two brothers, one 14 years old and the other 17. They were both tall and thin with caramel colored skin. They had wiry black hair and dark brown eyes and continually chattered back and forth to each other and their many other brothers and sisters in Spanish. With an inability to swim, the brothers jumped in with nothing to aid them but faith that the waters would push them out into shallow safety. The two went under and a fanatic frenzy broke out when random bystanders watching on the sides realized that the boys were not coming up. The lifeguards began frantically blowing their whistles and screaming at everyone, "Get out of the water! Everybody! Out! Now!" With no knowledge of the severity of what was going on, I was almost in a state of confusion as I looked to the side and saw my mother screaming at me to get off the rock. Needless to say, I went to my mother and within seconds the water was empty, except for the two boys who lay below the surface. One brother was retrieved from the water in only a few moments, not smooth and with ease, as I expected from what I'd seen on television, but with severe difficulty, as if he was 1000 pounds of dead weight. The other was nowhere to be found. In a desperate search, the breathless and scared lifeguards came over to the crowd, which had formed aside the water. "Do we have any divers in the crowd? Please? Anybody with any experience at all please we need your help." After over 15 minutes of searching and scrambling, finally the second brother was pulled from the water from a spot directly under the waterfall, 19 feet beneath the surface.

The Trip: Journey To The Center Of Terence Mckennas Inner Self. :: essays research papers

The Trip: Journey to The Center of Terence McKenna's Inner Self. Terence McKenna has become one of the most (in)famous figures in the exploration of psychedelia and its impact on society and technology. Here McKenna espouses his theories on psychedelic mushrooms, virtual reality, shamanism and evolution. This is definitely one of the strangest and most interesting articles I have ever read. At first it seems almost totally incomprehensible and inconceivable, but after reading it over a couple of times with a good dictionary and thesaurus it begins to make sense. In this article McKenna explains one of his trips on magic mushrooms. He describes this trip as â€Å"a virtual reality tour of God's cerebral cortex, hosted by the Lucky Charms leprechaun†. He then goes on to tell how this trip affected his life and how it was such a complete shock that it caused the literal turning inside-out of his intellectual universe. He was knocked off his feet and set himself the goal of understanding this. His quest led him all over the world, exploring traditions of magic-religious drug usage. In the years since his fateful encounter with the self-transforming machine elves of hyperspace, McKenna has fashioned his mental Merzbau on the New Age lecture circuit, where he has earned the benediction of the psychedelic High Priest himself, who dubbed him â€Å"the Timothy Leary of the 90's†. McKenna has written several books as well as having rave bands set his ruminations to billowing techno-trance music. The main focus of this article is on McKenna's theory, which is concocted from psychedelic Darwinism, fringe linguistics, and New Age eschatology. This theory is based on the notion that â€Å"Hallucinogenic plants may have been the catalysts

Confucius and Plato

Confucius and Plato Editor Ken Wolf, at the beginning of the essay Confucius and Plato: A Few Really Good People, poses the question: â€Å"What is the best way to create a strong society? † (Wolf 25) It was surprising to a novice student of philosophy how similar the ideas of the ancient Chinese sage Confucius and famous Greek philosopher Plato were. Although, Confucius and Plato both made major contributions to the development of society, they showed both similarities and differences in these three subjects: ruling class, education, and faith in humanity.Confucius and Plato both believed virtue and intelligence were key components to creating a strong society. Confucius thought anyone who has been educated had the capability to develop into a ruler. Whereas Plato assumed anyone could be educated, but only a few, those in the ruling class had the ability to reason and thus were qualified to rule. In addition, Plato gave credence to the idea of being born into the ruling class , that the quality to reason was an inherited quality. Confucius and Plato were both strong believers that order was another main factor in a strong society.Although they both had laws to maintain the order, Plato had less faith in people in general to behave in a civilized manner. Both Confucius and Plato were in favor of education and were teachers themselves. Confucius’s followers were the ones who wrote the Analects, which talked about how civilization depends on â€Å"humanity† and â€Å"propriety†. Plato actually wrote The Republic which talked about his ideal â€Å"philosopher-king†. Plato established the Academy, which taught principles of ethics and government, for 900 years. Confucius attempted to teach the ruler to become a better person, but failed.The concepts put forth by Confucius and Plato begin to differ more when faith in humanity comes into play. Confucius and Plato both wanted to think there was good in everyone, but Confucius believed more in a â€Å"†¦society in which human relationships—especially those within the family—were more important than laws. † (Wolf 27) Plato concluded that the people needed to be controlled for there to be order. That control was maintained through the law. They both sought out peace and harmony, although Confucius focused more on the behavior of individuals and Plato was interested in universal truth even though it probably would not be accepted,.Plato felt that if a person tried to bring enlightenment to the masses â€Å"†¦they would probably try to kill to him for telling such tall tales, disrupting their lives and challenging their accustomed beliefs. † (Wolf 31) Even today, most people would agree with Confucius and Plato about the importance of educating people in the development of a strong society. The idea of relationships as the basis of society may be summed up in: â€Å"Do unto others as you would have them do unto you. This Golden Rule seems to be as important to Western society as it was to Chinese society. However, the idea of a better quality of citizen that is better suited to lead society smacks of elitism and would definitely not be accepted in modern democracies. However, that does not mean that the elite educated class from Harvard and Yale has not been overrepresented in American leadership. So perhaps we have a ruling elite, but not as overt as Plato would like. A final thought from the essay would be: a harmonious and orderly existence is important to all societies.

The Role of Fdi in India

FDI Policy in India FDI as defined in Dictionary of Economics (Graham Bannock et. al) is investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy. [3] Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999.The Reserve Bank of India (‘RBI’) in this regard had issued a notification,[4] which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. This notification has been amended from time to time. The Ministry of Commerce and Industry, Government of India is the nodal agency for motoring and reviewing the FDI policy on continued basis and changes in sectoral policy/ sect oral equity cap. The FDI policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion (DIPP).The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (‘FIPB’) would be required. FDI Policy with Regard to Retailing in India It will be prudent to look into Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy issued in October 2010[5] which provide the sector specific guidelines for FDI with regard to the conduct of trading activities. a) FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route. ) FDI up to 51 % with prior Government approval (i. e. FIPB) for retail trade of ‘Single Brand’ products, subject to Press Note 3 (2006 Series)[6]. c) FDI is not permitted in Multi Brand Retailing in India. Entry Options For Foreign Players prior to FDI Policy Although prior to Jan 24, 2006, FDI was not authorised in retailing, most general players had been operating in the country. Some of entrance routes used by them have been discussed in sum as below:- 1. Franchise AgreementsIt is an easiest track to come in the Indian market. In franchising and commission agents’ services, FDI (unless otherwise prohibited) is allowed with the approval of the Reserve Bank of India (RBI) under the Foreign Exchange Management Act. This is a most usual mode for entrance of quick food bondage opposite a world. Apart from quick food bondage identical to Pizza Hut, players such as Lacoste, Mango, Nike as good as Marks as good as Spencer, have entered Indian marketplace by this route. 2. Cash And Carry Wholesale Trading 00% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers. [7] The wholesaler deals only with smaller retailers and not Consumers. Metro AG of Germany was the first significant global player to enter India through this route. 3. Strategic Licensing Agreements Some foreign brands give exclusive licences and distribution rights to Indian companies. Through these rights, Indian companies can either sell it through their own stores, or enter into shop-in-shop arrangements or distribute the brands to franchisees.Mango, the Spanish apparel brand has entered India through this route with an agreement with Piramyd, Mumbai, SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd 4. Manufacturing and Wholly Owned Subsidiaries. The foreign brands such as Nike, Reebok, Adidas, etc. that have wholly-owned subsidiaries in manufacturing are treated as Indian companies and are, therefore, allowed to do retail. These companies have been authorised to sell products to Indian consumers by franchising, internal distributors, existent Indian retailers, own outlets, etc.For instance, Nike entered through an exclusive licen sing agreement with Sierra Enterprises but now has a wholly owned subsidiary, Nike India Private Limited. FDI in Single Brand Retail The Government has not categorically defined the meaning of â€Å"Single Brand† anywhere neither in any of its circulars nor any notifications. In single-brand retail, FDI up to 51 per cent is allowed, subject to Foreign Investment Promotion Board (FIPB) approval and subject to the conditions mentioned in Press Note 3[8] that (a) only single brand products would be sold (i. . , retail of goods of multi-brand even if produced by the same manufacturer would not be allowed), (b) products should be sold under the same brand internationally, (c) single-brand product retail would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under â€Å"single-brand† would require fresh approval from the government. While the phrase ‘single brand’ has not been defined, it implies th at foreign companies would be allowed to sell goods sold internationally under a ‘single brand’, viz. Reebok, Nokia, Adidas. Retailing of goods of multiple brands, even if such products were produced by the same manufacturer, would not be allowed. Going a step further, we examine the concept of ‘single brand’ and the associated conditions: FDI in ‘Single brand’ retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship brand in India, those retail outlets could only sell products under the Adidas brand and not the Reebok brand, for which separate permission is required.If granted permission, Adidas could sell products under the Reebok brand in separate outlets. what is a ‘brand’? Brands could be classified as products and multiple products, or could be manufacturer brands and own-label brands. Assume that a company owns two leading inte rnational brands in the footwear industry – say ‘A’ and ‘R’. If the corporate were to obtain permission to retail its brand in India with a local partner, it would need to specify which of the brands it would sell.A reading of the government release indicates that A and R would need separate approvals, separate legal entities, and may be even separate stores in which to operate in India. However, it should be noted that the retailers would be able to sell multiple products under the same brand, e. g. , a product range under brand ‘A’ Further, it appears that the same joint venture partners could operate various brands, but under separate legal entities Now, taking an example of a large departmental grocery chain, prima facie it appears that it would not be able to enter India.These chains would, typically, source products and, thereafter, brand it under their private labels. Since the regulations require the products to be branded at the manufacturing stage, this model may not work. The regulations appear to discourage own-label products and appear to be tilted heavily towards the foreign manufacturer brands There is ambiguity in the interpretation of the term ‘single brand’. The existing policy does not clearly codify whether retailing of goods with sub-brands bunched under a major parent brand can be considered as single-brand retailing and, accordingly, eligible for 51 per cent FDI.Additionally, the question on whether co-branded goods (specifically branded as such at the time of manufacturing) would qualify as single brand retail trading remains unanswered. FDI in Multi Brand Retail The government has also not defined the term Multi Brand. FDI in Multi Brand retail implies that a retail store with a foreign investment can sell multiple brands under one roof. In July 2010, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce circulated a discussion paper[11] on allowing FDI in multi-brand retail.The paper doesn’t suggest any upper limit on FDI in multi-brand retail. If implemented, it would open the doors for global retail giants to enter and establish their footprints on the retail landscape of India. Opening up FDI in multi-brand retail will mean that global retailers including Wal-Mart, Carrefour and Tesco can open stores offering a range of household items and grocery directly to consumers in the same way as the ubiquitous ’kirana’ store. Foreign Investor’s Concern Regarding FDI Policy in IndiaFor those brands which adopt the franchising route as a matter of policy, the current FDI Policy will not make any difference. They would have preferred that the Government liberalize rules for maximizing their royalty and franchise fees. They must still rely on innovative structuring of franchise arrangements to maximize their returns. Consumer durable majors such as LG and Samsung, which have exclusive franchisee owned stores, are u nlikely to shift from the preferred route right away.For those companies which choose to adopt the route of 51% partnership, they must tie up with a local partner. The key is finding a partner which is reliable and who can also teach a trick or two about the domestic market and the Indian consumer. Currently, the organized retail sector is dominated by the likes of large business groups which decided to diversify into retail to cash in on the boom in the sector – corporates such as Tata through its brand Westside, RPG Group through Foodworld, Pantaloon of the Raheja Group and Shopper’s Stop.Do foreign investors look to tie up with an existing retailer or look to others not necessarily in the business but looking to diversify, as many business groups are doing? An arrangement in the short to medium term may work wonders but what happens if the Government decides to further liberalize the regulations as it is currently contemplating? Will the foreign investor terminate t he agreement with Indian partner and trade in market without him?Either way, the foreign investor must negotiate its joint venture agreements carefully, with an option for a buy-out of the Indian partner’s share if and when regulations so permit. They must also be aware of the regulation which states that once a foreign company enters into a technical or financial collaboration with an Indian partner, it cannot enter into another joint venture with another Indian company or set up its own subsidiary in the ‘same’ field’ without the first partner’s consent if the joint venture agreement does not provide for a ‘conflict of interest’ clause.In effect, it means that foreign brand owners must be extremely careful whom they choose as partners and the brand they introduce in India. The first brand could also be their last if they do not negotiate the strategic arrangement diligently. Concerns for the Government for only Partially Allowing FDI in Retail Sector A number of concerns were expressed with regard to partial opening of the retail sector for FDI.The Hon’ble Department Related Parliamentary Standing Committee on Commerce, in its 90th Report, on ‘Foreign and Domestic Investment in Retail Sector’, laid in the Lok Sabha and the Rajya Sabha on 8 June, 2009, had made an in-depth study on the subject and identified a number of issues related to FDI in the retail sector. These included: It would lead to unfair competition and ultimately result in large-scale exit of domestic retailers, especially the small family managed outlets, leading to large scale displacement of persons employed in the retail sector.Further, as the manufacturing sector has not been growing fast enough, the persons displaced from the retail sector would not be absorbed there. Another concern is that the Indian retail sector, particularly organized retail, is still under-developed and in a nascent stage and that, therefore, it is important that the domestic retail sector is allowed to grow and consolidate first, before opening this sector to foreign investors. Antagonists of FDI in retail sector oppose the same on various grounds, like, hat the entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs, since the unorganized retail sector employs an enormous percentage of Indian population after the agriculture sector; secondly that the global retailers would conspire and exercise monopolistic power to raise prices and monopolistic (big buying) power to reduce the prices received by the suppliers; thirdly, it would lead to asymmetrical growth in cities, causing discontent and social tension elsewhere.Hence, both the consumers and the suppliers would lose, while the profit margins of such retail chains would go up. LIMITATIONS OF   THE PRESENT SETUP Infrastructure There has been a lack of investment in the logistics of the retail chain, leading to an inefficient market mech anism. Though India is the second largest producer of fruits and vegetables (about 180 million MT), it has a very limited integrated cold-chain infrastructure, with only 5386 stand-alone cold storages, having a total capacity of 23. 6 million MT. , 80% of this is used only for potatoes.The chain is highly fragmented and hence, perishable horticultural commodities find it difficult to link to distant markets, including overseas markets, round the year. Storage infrastructure is necessary for carrying over the agricultural produce from production periods to the rest of the year and to prevent distress sales. Lack of adequate storage facilities cause heavy losses to farmers in terms of wastage in quality and quantity of produce in general. Though FDI is permitted in cold-chain to the extent of 100%, through the automatic route, in the absence of FDI in retailing; FDI flow to the sector has not been significant.Intermediaries dominate the value chain Intermediaries often flout mandi nor ms and their pricing lacks transparency. Wholesale regulated markets, governed by State APMC Acts, have developed a monopolistic and non-transparent character. According to some reports, Indian farmers realize only 1/3rd of the total price paid by the final consumer, as against 2/3rd by farmers in nations with a higher share of organized retail. Improper Public Distribution System (â€Å"PDS†) There is a big question mark on the efficacy of the public procurement and PDS set-up and the bill on food subsidies is rising.In spite of such heavy subsidies, overall food based inflation has been a matter of great concern. The absence of a ‘farm-to-fork’ retail supply system has led to the ultimate customers paying a premium for shortages and a charge for wastages. No Global Reach The Micro Small & Medium Enterprises (â€Å"MSME†) sector has also suffered due to lack of branding and lack of avenues to reach out to the vast world markets. While India has continued to provide emphasis on the development of MSME sector, the share of unorganised sector in overall manufacturing has declined from 34. % in 1999-2000 to 30. 3% in 2007-08[12]. This has largely been due to the inability of this sector to access latest technology and improve its marketing interface. Rationale behind Allowing FDI in Retail Sector FDI can be a powerful catalyst to spur competition in the retail industry, due to the current scenario of low competition and poor productivity. The policy of single-brand retail was adopted to allow Indian consumers access to foreign brands. Since Indians spend a lot of money shopping abroad, this policy enables them to spend the same money on the same goods in India.FDI in single-brand retailing was permitted in 2006, up to 51 per cent of ownership. Between then and May 2010, a total of 94 proposals have been received. Of these, 57 proposals have been approved. An FDI inflow of US$196. 46 million under the category of single brand retailing w as received between April 2006 and September 2010, comprising 0. 16 per cent of the total FDI inflows during the period. Retail stocks rose by as much as 5%. Shares of Pantaloon Retail (India) Ltd ended 4. 84% up at Rs 441 on the Bombay Stock Exchange.Shares of Shopper’s Stop Ltd rose 2. 02% and Trent Ltd, 3. 19%. The exchange’s key index rose 173. 04 points, or 0. 99%, to 17,614. 48. But this is very less as compared to what it would have been had FDI upto 100% been allowed in India for single brand. The policy of allowing 100% FDI in single brand retail can benefit both the foreign retailer and the Indian partner – foreign players get local market knowledge, while Indian companies can access global best management practices, designs and technological knowhow.By partially opening this sector, the government was able to reduce the pressure from its trading partners in bilateral/ multilateral negotiations and could demonstrate India’s intentions in liberal ising this sector in a phased manner. Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country & its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers.It would also help bring about improvements in farmer income & agricultural growth and assist in lowering consumer prices inflation. Apart from this, by allowing FDI in retail trade, India will significantly flourish in terms of quality standards and consumer expectations, since the inflow of FDI in retail sector is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments. It is therefore obvious that we should not only permit but encourage FDI in retail trade.Lastly, it is to be noted that the Indian Council of Research in International Economic Relations (ICRIER), a premier economic think tank of the country, which was appointed to look into the impact of BIG capital in the retail sector, has projected the worth of Indian retail sector to reach $496 billion by 2011-12 and ICRIER has also come to conclusion that investment of ‘big’ money (large corporates and FDI) in the retail sector would in the long run not harm interests of small, traditional, retailers.In light of the above, it can be safely concluded that allowing healthy FDI in the retail sector would not only lead to a substantial surge in the country’s GDP and overall economic development, but would inter alia also help in integrating the Indian retail market with that of the global retail market in addition to providing not just employment but a better paying employment, which the unorganized sector (kirana and other small time retailing shops) have undoubtedly failed to provide to the masses employed in them.Industrial organisations such as CII, FICCI, US-India Business Council (USIBC), the American Chamber of Commerce in India, The Retail Association of In dia (RAI) and Shopping Centers Association of India (a 44 member association of Indian multi-brand retailers and shopping malls) favour a phased approach toward liberalising FDI in multi-brand retailing, and most of them agree with considering a cap of 49-51 per cent to start with.The international retail players such as Walmart, Carrefour, Metro, IKEA, and TESCO share the same view and insist on a clear path towards 100 per cent opening up in near future. Large multinational retailers such as US-based Walmart, Germany’s Metro AG and Woolworths Ltd, the largest Australian retailer that operates in wholesale cash-and-carry ventures in India, have been demanding liberalisation of FDI rules on multi-brand retail for some time. Thus, as a matter of fact FDI in the buzzing Indian retail sector should not just be freely allowed but per contra should be significantly encouraged.Allowing FDI in multi brand retail can bring about Supply Chain Improvement, Investment in Technology, Man power and Skill development,Tourism Development, Greater Sourcing From India, Upgradation in Agriculture, Efficient Small and Medium Scale Industries, Growth in market size and Benefits to government through greater GDP, tax income and employment generation. Prerequisites before allowing FDI in Multi Brand Retail and Lifting Cap of Single Brand Retail FDI in multi-brand retailing must be dealt cautiously as it has direct impact on a large chunk of population.Left alone foreign capital will seek ways through which it can only multiply itself, and unthinking application of capital for profit, given our peculiar socio-economic conditions, may spell doom and deepen the gap between the rich and the poor. Thus the proliferation of foreign capital into multi-brand retailing needs to be anchored in such a way that it results in a win-win situation for India. This can be done by integrating into the rules and regulations for FDI in multi-brand retailing certain inbuilt safety valves.For exam ple FDI in multi –brand retailing can be allowed in a calibrated manner with social safeguards so that the effect of possible labour dislocation can be analyzed and policy fine tuned accordingly. To ensure that the foreign investors make a genuine contribution to the development of infrastructure and logistics, it can be stipulated that a percentage of FDI should be spent towards building up of back end infrastructure, logistics or agro processing units.Reconstituting the poverty stricken and stagnating rural sphere into a forward moving and prosperous rural sphere can be one of the justifications for introducing FDI in multi-brand retailing. To actualize this goal it can be stipulated that at least 50% of the jobs in the retail outlet should be reserved for rural youth and that a certain amount of farm produce be procured from the poor farmers. Similarly to develop our small and medium enterprise (SME), it can also be stipulated that a minimum percentage of manufactured prod ucts be sourced from the SME sector in India.PDS is still in many ways the life line of the people living below the poverty line. To ensure that the system is not weakened the government may reserve the right to procure a certain amount of food grains for replenishing the buffer. To protect the interest of small retailers the government may also put in place an exclusive regulatory framework. It will ensure that the retailing giants do resort to predatory pricing or acquire monopolistic tendencies. Besides, the government and RBI need to evolve suitable policies to enable the retailers in the unorganized sector to expand and improve their efficiencies.If Government is allowing FDI, it must do it in a calibrated fashion because it is politically sensitive and link it (with) up some caveat from creating some back-end infrastructure. Further, To take care of the concerns of the Government before allowing 100% FDI in Single Brand Retail and Multi- Brand Retail, the following recommendat ions are being proposed :- Preparation of a legal and regulatory framework and enforcement mechanism to ensure that large retailers are not able to dislocate small retailers by unfair means.Extension of institutional credit, at lower rates, by public sector banks, to help improve efficiencies of small retailers; undertaking of proactive programme for assisting small retailers to upgrade themselves. Enactment of a National Shopping Mall Regulation Act to regulate the fiscal and social aspects of the entire retail sector. Formulation of a Model Central Law regarding FDI of Retail Sector Important highlights of Economic Outlook 2011-12 Agriculture grew at 6. 6% in 2010-11. This year’s monsoon is projected to be in the range of 90 to 96 per cent, based on which Agriculture sector is pegged to grow at 3. % in 2011-12! Industry grew at 7. 9% in 2010-11. Projected to grow at 7. 1% in 2011-12 Services grew at 9. 4% in 2009-10. Projected to grow at 10. 0% in 2011-12 Investment rate pr ojected at 36. 4% in 2010-11 and 36. 7% in 2011-12 Domestic savings rate as ratio of GDP projected at 33. 8% in 2010-11 & 34. 0% in 2011-12 Current Account deficit is $44. 3 billion (2. 6% of GDP) in 2010-11 and projected at $54. 0 billion (2. 7% of GDP) in 2011-12 Merchandise trade deficit is $ 130. 5 billion or 7. 59% of the GDP in 2010-11 and projected at $154. 0 billion or 7. % of GDP in 2011-12 Invisibles trade surplus is $ 86. 2 billion or 5. 0% of the GDP in 2010-11 and projected at $100. 0 billion or 5. 0% in 2011-12 Capital flows at $61. 9 billion in 2010-11 and projected at $72. 0 billion in 2011-12 FDI inflows projected at $35 billion in 2011/12 against the level of $23. 4 billion in 2010-11 FII inflows projected to be $14 billion which is less than half that of the last year i. e $30. 3 billion Accretion to reserves was $15. 2 billion in 2010-11. Projected at $18. 0 billion in 2011-12 Inflation rate would continue to be at 9 per cent in the month of July-October 2011.The re will be some relief starting from November and will decline to 6. 5% in March 2012. Foreign direct investment; net (BoP; US dollar) in India The Foreign direct investment; net (BoP; US dollar) in India was last reported at 11008159606. 75 in 2010, according to a World Bank report released in 2011. The Foreign direct investment; net (BoP; US dollar) in India was 19668790288. 40 in 2009, according to a World Bank report, published in 2010. The Foreign direct investment; net (BoP; US dollar) in India was reported at 24149749829. 71 in 2008, according to the World Bank.Foreign direct investment is net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows total net, that is, net FDI in the reporting economy from foreign sources less net FDI by the reporting economy to the rest of the world. Data are in current U. S. dollars.This page includes a historical data chart, news and forecast for Foreign direct investment; net (BoP; US dollar) in India. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India's output with less than one third of its labour force. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. Total 933. 2 100 2705. 0 100 231530. 1 100

Developmental psychology Essay

Developmental psychology is a field that studies the different stages of development of human psychology. There are many different models of development – theory of cognitive development by Jean Piaget, psychosexual stages of Sigmund Freud, stages of ego development by Jane Loevinger, model of hierarchical complexity by Michael Commons, stages of faith development by James W. Fowler, stages of psychosocial development by Erik Erikson, stages of moral development by Lawrence Kohlberg, hierarchy of needs by Abraham Maslow, etc. Erik Erikson formulated the stages of psychosocial development as an extension of Freud’s stages of psychosexual development. Erikson proposed eight stages of normal human development: Infancy Toddler Pre-school School Adolescence Young adulthood Middle adulthood Late adulthood The primary conflict in infancy or oral sensory age (birth to 12-18 months) is between trust and mistrust. In the toddler or muscular anal age (18 months to 3 years) stage, there is a conflict between autonomy and shame; initiative and guilt in the pre-school or locomotor (3 to 6 years) stage; industry and inferiority in the school latency (6 to 12 years) age; identity and role confusion in the adolescence (12 to 18 years) stage; intimacy and isolation during young adulthood (19 to 40 years); generativity and stagnation in middle adulthood (40 to 65 years); and ego integrity and despair in late adulthood (65 to death). In the first stage a baby is totally dependent on its parents and it is up to the parents to develop a relationship of trust between the child and themselves. Such a child will grow up to be a more secure individual. During the second stage children grain more personal control over their lives such as fetching things for themselves, toilet training and asking for what they want. Play is an important component of the third stage. During the fourth stage children develop sense of accomplishment and pride. In the adolescent stage children are learning to be independent and they attempt to gain a sense of ‘self’. In the sixth and the seventh stages people explore relationships through family, friends and career. The last stage is one retrospection and contemplation. The central element of the psychosocial theory of Erik Erikson is that of ego identity. This identity develops gradually through social interactions. All the conflicts in the different stages of life lead to what is also known as ego quality or ego strength. While Erik Erikson developed the model of Sigmund Frued, Lawrence Kohlberg extended the theory of cognitive development of Jean Piaget. In Kohlberg’s model there are three levels of moral development – pre-conventional, conventional and post-conventional. Obedience, punishment and self-interest are the main preoccupations in the pre-conventional level. The central questions at this level are, â€Å"How to avoid punishment?† and â€Å"What do I get from this?† Social norms and conformation to authority are the main concerns of the conventional stage. At this level people aspire to fulfil social roles. People are driven by approval and/or disapproval of the group that belong to. It becomes important for them to follow rules and conform to dictums and laws. Being accepted by the group is the most important concern during this level. Universal laws and ethics are more important than group-based laws and ethics in the post-conventional stage. This stage is otherwise known as the principled level. At this stage laws are not considered to be rigid or irrevocable. They are thought to be social contracts that entail varied views and opinions. The keywords of Kohlberg’s theory of moral development are – obedience, self-interest, conformity, law and order, human rights and universal human ethics. The mental stages of Kohlberg’s theory of moral development are designed to meet certain criteria: On a qualitative level, they are different ways of thinking. They are structured wholes. The progress of the stages is an invariant sequence. They are hierarchical. They are universal across cultures. Kohlberg uses these stages to explain other cognitive forms, particularly the ability to take roles. In the pre-conventional stage children do not know that there are other viewpoints on every subject. They accept the viewpoint only of the authority figure. They recognize different opinions and viewpoints in the second stage but gravitate towards those views that they themselves hold. People become concerned with the feelings of others during the third and fourth stages.   During the last two stages their worldview expands to include people from other communities and groups. They can identify with the opinions and feelings of ‘other’ people because no law considered absolute and give. Law is a construct and a contract. Kohlberg’s theory has been used in education to help children become active participants in their own moral development. Children are encouraged to discuss and debate moral issues and reach to conclusions on their own. One of the major criticisms of this theory lies with post-conventional stage. Critics have felt that it would be dangerous for people to place their individual values over group values and would be disruptive to communities. Carol Gilligan criticises the theory on the basis that it is totally male oriented and the women have a different path of moral development. Male development emphasizes authority while women emphasize affiliation. Erikson and Kohlberg have both provided important theories that expand on the theories of their predecessors. Erikson’s theory emphasizes social interactions while Kohlberg’s theory emphasises individual ideas and rights. Erikson’s ego identity finds fruition in a life of social interactions while Kohlberg’s ego identity transcends itself and group identities. The latter attributes only normative value to laws and dictums. REFERENCES: Erikson, E.H. (1968). Identity: Youth and Crisis. New York: Norton. Erikson, E.H. (1963). Childhood and Society. (2nd ed.). New York: Norton. Carver, C.S. & Scheir, M.F. (2000). Perspectives on Personality. Needham Heights, MA: Allyn & Bacon. Kohlberg, Lawrence (1981). Essays on Moral Development, Vol. I: The Philosophy of Moral Development. San Francisco, CA: Harper & Row.