Tag Archives: Business Studies

Adapting marketing to the new economy

Companies in 21st century have to adapt to ever changing environment. At present, companies represent a curious mix of old as well as the new economy. A great deal of research has already been done with respect to the old economy, but for the new economy, companies are learning it rather hard way. Companies have to choose elements from old and new economy wisely as to build a business model which would bring value to the company.

Technology revolution, globalization and market deregulation factors are among many sculpting the new economy. These 3 factors interact with each other at different levels creating the driving force for the new economy. The old economy was full of analog devices, which were running on a continuous signal wave, for example, gramophone records. In today’s world systems and devices are running on digital technology where information is carried in ones and zeroes. However, this digital information cannot be exchanged between devices without connectivity through wire or wireless networks. This connectivity is achieved through intranet, extranet and internet.

Internet allowed players like Yahoo, Amazon, ebay to offer products like music, books, apparel, etc. directly to customers. This move de-stabilized the traditional distributors and retailers causing some to shut down their business. However, some of the players developed online portals to offer their products and services which in turn de-stabilized new online players. Some of the old players were successful with help of their brand strength and poor business models of pure online players.

In the old economy focus was only on standardization, mass production and singular marketing policy. However, with the amount of information available in the new economy, companies are best at understanding consumers. This better understanding has led to customized products, a shift from standardization. However, this customization has its drawbacks not only for companies but also for customer. Companies find it difficult to maintain the cost level for customized products to register profit. Customization is impossible for products, which require complex industrial engineering. Customer does not know real product appearance until it fully completed and also return policy is not there in customization.

The new functioning of economy has changed the way companies approach their business. Companies are looking forward to expanding across market segments to get maximum market share while keeping focus strictly on customer needs. For these companies are making organizational changes where departments are developed to manage a segment rather than a product. Companies are looking forward to developing consumer based brand equity to foster long term relation. Companies are coming up with products, which perform superior than consumer expectation there by creating a strong brand while the earlier branding task was accomplished through advertising. Companies are treating employees, distribution channel, and suppliers as their business partner and not customer.

Since companies have changed the way they function in the new economy, it is imperative that marketing practices also adapt. As consumers are looking forward going online for major of their purchase, businesses are looking towards electronic commerce (e-commerce) as a way forward. Research has shown online users usually buy music, software, books, apparel, etc. rather than goods like automobiles, house, etc. Business buyers are also coming online as well as suppliers, thereby substantially reducing the establishment cost. E-Commerce has also open doors for customer to customer relation through social networking and community forums, in which experience and discussion are done with respect to products. Through internet consumers are able to provide faster feedback to companies with respect to products and services.

As businesses are moving online, the focus shifts to developing of web sites to provide reliable and correct experience to consumers. Web site design, maintenance and security are of paramount importance for creating a favorable impression on consumer. Online marketing and advertisement have got prominence in this internet age.

The new economy had brought forward challenges and opportunities not only for companies but also for consumer.

8 Online Business Ideas That Generate Sustainable Revenue

With more people trying to make money online, thousands of articles give advice on how you can generate some cash in the digital world. No wonder there are so many online business ideas out there!

1. Self-publish Books  

No one cares whether your book is self-published or published by a traditional publisher. The quality of your book is what matters. One of the most successful books in recent years is Can’t Hurt Me by David Goggins. He received some offers from publishers but decided to publish the book by himself. That way he owns all the rights.

And today, everyone can do that too. You can do the whole process yourself, or you can hire people to do it for you like David Goggins. You can even hire a ghost-writer.

2. Create An App  

Until just a few years ago, it would’ve been unimaginable to sleep in other people’s homes on a regular basis for cheaper accommodation. Yet, as Airbnb has shown in the travel and hospitality market, this concept has now become the norm. All these transactions are done with the app. 

But that doesn’t mean you need to create the next big-time app like Airbnb or Uber. Even without knowing how to code, anyone can build an app. There’s a list of no-code app-makers you can use online to do this.

The most important part of an app is your business model. Too often, we see apps that are great but don’t have a business plan.

3. Sell Other People’s Products  

Don’t want to build your own products? Then sell existing products, also known as affiliate marketing. It sometimes gets a bad rep but it’s a solid business model.

The best platform for this strategy is a website (or multiple sites). 

Once you have a website, you can start creating content that attracts people who are interested in the products you’re offering.

4. Create An Online Course  

I’m a big fan of Peter Drucker’s advice of focusing on your strengths so you can provide more value. This is about leveraging your knowledge, experience, and expertise for the benefit of other people. Maybe you’ve been training for a long time and you’re ready to become a fitness coach. Or you’ve been teaching history, and now can teach people how to adapt well to changes based on historical lessons.

We always want to learn. The popularity of online courses shows that there is great demand. And it’s easier than ever to sell a course. With the right tools, you are able to save time, maximize your efforts, and create courses that students can easily consume.

5. Start A Paid Newsletter  

One of the leading examples of a paid newsletter is Ben Thompson’s “Stratechery.” He popularized this digital product and he’s now generating millions of dollars. 

But you and I don’t need to become the next Ben Thompson. If you can generate a small but loyal following that’s willing to pay, you can make a good living with a newsletter.

In terms of technology, there are many solutions you can use. I’ve seen people using Substack.

6. Build An Online Community  

Most digital entrepreneurs work from home, so they barely interact with new people (often, just clients) on a daily basis. It can be a lonely pursuit.

The Sounding Board—a facilitated community where like-minded people can join, share their goals, insights, and even test their business ideas before implementing them. It’s a safe space for anyone in need of motivation and honest insights. But you can create a community around any topic.

7. Start A Coaching Program  

With the recent global crisis, more people are switching their offline activities (like being coached by a trainer in a gym) into digital programs. Now, you can have your trainer right there with you at home through your smartphone or laptop. 

This isn’t limited to fitness coaches. You can do nearly every type of 1-on-1 coaching over Zoom or Skype. Again, it’s all about what you’re good at. People want to pay for expertise. With enough experience, you can gradually expand to group coaching and booking multiple sessions. 

8. Build A Freelance Practice  

Yes, it’s easy to get on those freelancing sites, but you’re not building anything for yourself. Plus, you’ll be pitching to prospects all the time. You might as well use that time to build your own site, with your own rules.

The problem with freelance sites is that they lock you into a cycle of looking for clients and pitching to them. Many of the jobs offered are also one-time projects that pay lesser. These tactics may get you a handful of small clients at first, but you won’t build a loyal customer-base doing that. 

Building your own site, publishing your own content, and attracting high quality, well-paying clients take much more time. But the pay-off is so much more rewarding and sustainable. 

The Changes After 1991 In India

Today India is one of the most powerful nations in the world. Our progress in education, science-technology, business, economy, the defense system is really noticeable. India is always a unique country but India also passed many tough situations, this achievement comes after so many hardships, struggles, and fights.before 1991 the political situation in India is unstable, after 1991 certain changes in the Indian economy, science-technology held to be very important In the history of India.

Indian Economy: we wanted to establish an Economy based on social justice through planning for a National planning commission was established that would coordinate development through the policy of the Five Year Plan. The government started Economic Reforms are called as Economic Liberalisation. The foreign Invest In India increased, the field of information technology opened several avenues of employment in the country . Liberalization, Privatizati, and Globalization, India under its New Economic Policy approached International Banks for development of the country. These agencies asked Indian Government to open its restrictions on trade done by the private sector and between India and other countries.

Science and Technology: The experiment in the co-operative dairy movement By Dr.Verghese Kurien led to increase in milk production in India. This is called as White Revolution. Dr.Homi J.bhaba laid the foundation of the Indian atomic Power Programme. India insisted on using atomic energy for peaceful purposes like generation of electricity, pharmaceuticals and defense.

Change In Social Field: changes related to the women empowerment movement and other related to the policies regarding the uplift of deprived sections of the society

GST DAY

Approx most of the day we heard about this Term GST, if we Recharge mobile current postpaid bill is Rs 500, we will have to shell out Rs 590. It is Rs 15 more than what you are currently paying. Food, electricity, gold, land, loans in these services GST is applicable

GST, Goods and Service Tax Act passed in the parliament of India on 27th March 2017 and came into effect on 1st July 2017.

The day was celebrated on 1st July 2018 to mark the first anniversary of the new indirect tax regime.GST is a single indirect tax on the supply of goods and services right from manufacturers to consumers. It’s replaced a number of taxes such As excise duty, service tax, central sales Tax, Value-added Tax(VAT), and Octroi.

Excise duty is an indirect tax that levies on the goods which, are produced within the country. This tax is not related to the Customs Duty. Excise Duty is also known as Central Value Added Tax. value-added Tax is collected by the state government. For example, if we purchase a good then we must pay an additional tax as Value Added Tax to the government. The VAT rate is decided based on the nature of the item and state.Custom duty and OctoroiThis tax is levied on those goods that are imported into India from outside. The Custom Duty tax is paid at the port of entry in the country as the airport. This tax rate also varies over the nature of goods. While the Octroi tax is charged on the goods entering the municipality.

GST was First coneceptual by Former Indian Prime Minister Atal Bihari Vajpayee,1999.

In an official message on the occasion of GST Day, Finance Minister Nirmala Sitharaman on Wednesday said that more efforts are required to ease tax compliance further for the taxpayers, especially the micro, small and medium enterprises (MSMEs). Wednesday marked the third anniversary of the launch of the Goods and Services Tax (GST) regime.In message, Ms Sitharaman herhighlighted the steps taken towards easing the return filing process, including the recently introduced feature of SMS-based filing for nil return

Taylor’s Scientific Management

Taylor’s Historical Background

Scientific Management concept was developed by Fredrick Winslow Taylor. He was born in 1856. He was an American and began his career as a mechanist. He became popular through his theory of management and therefore also known as ‘Father of Scientific Management’.

While he was working in factories and mechanical shops he observed that owners and managers knew very little about what actually took place in the workshops. Taylor soon realized and believed that the system could be improved, and he looked around for an incentive. He settled on money. He believed a worker should get “a fair day’s pay for a fair days work” – no more, no less. If the person is unable to complete the target then he should not be paid. He also believed that both management and labour should cooperate and work together to achieve organisational goals. He was the first to suggest that primary functions of managers should be planning and training.

Taylor’s Scientific Management

Scientific Management means applying the scientific methods and tools to increase the output its quality and reduce costs and wastage. It is a systematic and thoughtful approach.

In words of Taylor, “Scientific Management means knowing exactly what you want from men to do and seeing that they do it in the best and the cheapest way”.

The concept of scientific management was given to improve the productivity, efficiency and effectiveness in the organization through the application of the proposed scientific principles and techniques.

Principles of Scientific Management

The philosophy of scientific management is based upon the following principles.

1. Science, not Rule of Thumb –

According to Taylor, each job should be performed in an organisation as per the scientific approach as these were developed after proper analysis and research. It should not follow rule of thumb which was based on trial and error method and approaches were based on intuition which was not suitable for modern business. When science is applied instead of the rule of thumb, to any job, it standatdizes work and help workers get a specialised way of performing task by avoiding wastage of time, cost and other valuable resources.

2. Harmony, not Discord –

Taylor emphasised on maintaining harmony between the management and workers in the workplace. This will avoid conflict and will promote friendly relationship among them which can result in improvement and growth in productivity of both labour and managers. He also said that there should be a transformation in thinking of both parties, which implies that management should share the gains with workers and workers should work hard for the betterment of business.

3. Cooperation, not Individualism-

This principle is an extension of principle of harmony. Competition should be replaced by cooperation. Management and workers both should Realise that they need each other. For this, management should entertain the constructive suggestions of employees and at the same time, workers should also cooperate with management. According to Taylor, there must be an equal division of work and responsibility between workers and management.

4. Development of each and every person to his/her greatest efficiency –

As per this principle, Taylor had the view that due concern should be given to increase efficiency. It could be built right from process of employee selection. Each person should be scientifically selected and then assigned work as per their specialization. He believed that employees should be give proper training of the task they need to perform because no human being is perfect, and there is always a scope of improvement. Hence training and development improve competency, skills and learning of the workforce. It is beneficial for both the organisation and the workers.

Techniques of Scientific Management

Following techniques were deployed by FW Taylor for manufacturing and production units:

1. Functional Foremanship –

Taylor developed the technique of functional foremanship. Under this technique, planning and execution are separated from each other. According to Taylor, single worker or supervisor cannot be expected to be an expert in all aspects. Thus, he advocated the appointment of eight firemen, out of which four will be responsible for planning and the rest four will be concerned with the execution of work.

Let us see the hierarchy under the functional foremanship –

Factory Manager

A factory manager is a person who holds the highest managerial position in the unit and is responsible for the proper functioning of the organisation.

Planning Incharge-

A planning incharge is responsible for the formulation of policies, strategies and procedures of the operational activities. To simplify the work, following four clerks are appointed under the planning incharge.

a. Instruction Card Clerk:

The instruction card clerk will determine and direct how the work has to be performed.

b. Route Clerk:

A route clerk will decide what all is to be done and the steps which are to be taken to perform a particular task.

c. Time and Cost Clerk:

The person who determines the time limit in which the work is to be completed and the cost involved in carrying out each task is known as a time and cost clerk.

d. Disciplinarian :

A disciplinarian is a clerk who ensures discipline, follows rules and regulations and code of conduct in the organisation.

Production Incharge :

A production incharge needs to take care of all the operational and production activities. The four clerks assigned under a production incharge are as follows :

a. Speed Boss :

The speed boss is responsible for getting the work done on time.

b. Gang Boss :

The person w looks after the availability of all the equipment, tools and accessories is a gang boss.

c. Repair Boss :

The repairs boss has to take care of the repairs, maintenance and overhauling of the tools and machinery used for production.

d. Inspector :

The inspector is responsible for ensuring that all activities are being carried out in a planned manner. He/she also checks whether the quality of the products are as per standards or not.

Workman : He is a labour or worker at the operational level of the organisation who is responsible for actually performing the given task. Each worker is supervised and monitored by the eight different clerks, as mentioned above.

2. Standardisation and Simplification of Work :

Standardisation is the process of fixing well thought and tested norms with a view to maximize efficiency of work. Standardisation of product implies that the size, design, quality, shape etc of the product should meet the requirements and tastes of consumers.

Simplification means eliminating superfluous sizes, varieties and dimensions. It’s aim is to eliminate unnecessary diversity of products and thereby reduce costs. It will also help in achieving economy in the use of required machines and tools.

3. Work Study :

Taylor emphasised on examining and analyzing the working at the operational level of the organisation. It develops a systematic course of action and resolves the problems faced by labours and workers who are responsible for accomplishing the given task and duties.

Under this technique there are following four significant concerns of the organisation :

a. Method Study :

The managers come across numerous ways of performing a particular task or carrying out the production of goods or services. Out of all these possible methods, selection of the most appropriate way, which is cost effective and also increases the production is considered a method study.

b. Motion Study :

The motive behind conducting this study was to determine the movement of workers while performing a job. According to Taylor, it is necessary to analyze the movements of workers like how many times he lifts the objects, puts the objects because all these movements sometimes delay the work. Thus this study helps in knowing the productive and unproductive motions.

c. Time Study :

Analysing the time consumed for carrying out the given task in a specified manner is Taylor’s another scientific management technique which is called a time study. If an activity takes more time than the defined standard, it may lead to delay and decline in productivity. And if a task is accomplished much before the given time, it may lack efficiency.

d. Fatigue Study :

If an individual keeps on working without rest or pauses, it affects their health and efficiency. Therefore, fatigue study originated. This study seeks to find out the amount and frequency of rest intervals in completing a task. The objective of study is to find out how long a person can perform the standard task without any adverse effects on his health.

4. Differential Piece Wage System :

Taylor strong advocated piece wage system. He wanted to differentiate between efficient and inefficient workers. Under this system of wage payment, wages are paid on the basis of work done. According to him, higher rates were given to the workers who are producing standard products or more and lower rates were given to those who are producing less. Hence he talked about performance based remuneration and incentive based motivation.

5. Mental Revolution :

Taylor gave a powerful concept on changing the perception and attitude of both the employees and the management. They should both work together considering each other as family. There must be proper coordination and understanding among workers and the management in order to achieve organizational goals. Both of them must value efforts of each other and work together, creating a positive environment to achieve common organisational goals and objectives.

Affect Theory

Locke’s “Affect Theory (1976)” is probably the best known job delight model. The principle premise of this idea is that pleasure is determined via a mismatch amongst “what one wants in a process” and “what one has currently”. Further, the idea states that “how a great deal one values a given side of labour (e.g. the degree of autonomy in a feature) moderates how satisfied/disillusioned one will become even as expectancies are/aren’t met”. While a person values a particular side of a procedure, his pleasure is extra considerably impacted every in reality (at the same time as expectations are met) and negatively (while expectancies aren’t met), in comparison to new how doesn’t cost that aspect. to demonstrate, if worker appreciates freedom in the work area and worker is detached approximately freedom, then worker A would be extra glad in a function that offers more freedom and much less satisfied in a function with little or no autonomy in comparison to worker B. This concept additionally states that “an excessive amount of a specific aspect will produce more potent emotions of dissatisfaction the more a worker values that facet”.

BANK FRAUD – TYPES AND PREVENTION

CHANCHAL SHARMA

M.COM, NET (COMMERCE)

SAPNA YADAV

ASSISTANT PROFESSOR

MONIKA RANI

ASSISTANT PROFESSOR IN COMMERCE

INTRODUCTION : – Banks are considered as necessary equipment for the Indian economy. This particular sector has been tremendously growing in the recent years after the nationalisation of banks in 1969 and the loberalisation of economy in 1991. Due to the nature of their daily activities of dealing with money, even after having such a supervised and well regulated system it is very tempting for those who are either associated the system or outside to find faults in the system and to make personal gains by fraud.These frauds, unlike ordinary crimes, the amount misappropriated in these crimes runs into lakhs and crores of rupees. Bank fraud is a federal crime in many countries, defined as planning to obtain property or money from any federally insured financial institution . It is something considered a white collar crime.BANK FRAUDS PHISHING

To understand the concept of Bank Fraud, we need to understand the concept of fraud and the various types of frauds and the ways to detect the same and the prevention of the same.

WHAT IS FRAUD : – Generally, A dishonest act or behaviour through which one person gains or tries to gain advantage over another which results in the loss victim, directly or indirectly is called fraud.

Under the IPC, fraud has not been defined directly under any particular section, but it provides for punishments for various acts which leads to commission of fraud. However the section is dealing with cheating, forgery, counterfeiting,misappropriation and breach of trust cover the same adequatly.

as outcome of fraud exceeds the losses due any other crime put together. With the rising bank business, cheating in the bank additionally expanding and the fraudsters are turning out to be increasingly complex and shrewd.

The four most important elements for constituting fraud are : – the active involvement of the staff, failure to follow the instructions and guidelinesof the bank by the staff, collusion between businessman,executives and politicians to bend the rules and regulations and any external factors.

LEGAL REGIME TO CONTROL BANK FRAUDS : –

  • The Indian penal code,1860
  • Criminal procedure code,1973
  • The Negotiable Instruments Act,1881
  • The Reserve Bank of India Act,1934
  • SARFAESI Act,2002
  • The Banking Regulation Act,1949

IMPACT OF FRAUD IN INDIA : – Many recent fraud incidents reported are related to fix deposites,loan disbursments, and credit and debit card frauds and ATM based frauds.All these frauds show that not only they undermine the profits, reliability of services and operating efficiencies but also have an impact on the society and the oragnisation itself.

This rise in the NPA is a serious threat to the Indian Banking industry as the sturdiness of a countrys banking and financial sectors deetermines the qualities of the product and services. it is also a direct indication of the living standards and well being of people.

Frauds has also hampered the growth of this establishment/industry. it is a huge killer for the business sector and underlying factor to all human endeavours. it is also increase the corruption level of the country.

CLASSIFICATION OF FRAUD AND PERVENTION:

To maintain uniformity in fraud reporting, frauds have been classified on the basis of types and provisions of the Indian Penal Code, and the and the reporting guildelines for the same has been prescribed by RBI The Reserve Bank of India classifies Bank frauds in the following catgories: –

  1. Misappropriation and criminal breach of trust.
  2. Negligence and cash shortages.
  3. cheating and forgery.
  4. Any other types of fraud not coming under the specific heads as above.
  5. Irregularities in foreign exchange transations.

MECHANICS OF BANK FRAUDS

DEPOSIT ACCOUNT FRAUDS:

The following types of frauds are generally commited;

  1. value inflation of cheques deposited
  2. changing the nature of the cheques(crossed to bearer)
  3. operating a dormant account fraudulently

Prevention Measures:

  1. carefully and systematic examination procedures of cheques and other trasactions.
  2. seperation of book keeping and cash handling operations.

PURCHADED BILL FRAUDS:

These are generally expensive and can take the following forms: –

  1. Discount on stolen or fake Railways Recipts and motor recipts along with other necessary bills.
  2. fake/forged bills for valueless goods are discounted.

Prevention Measures:

  1. Strict examination before discounting the bills.
  2. Establishing a better connection between the purchaser and the seller in the caes of dispatch of proceeds.
  3. Examining the recipts properly and strictly by conferming from the connected authorities.

HYPOTHICATION FRAUDS:

Cash advances,against pledged goods as securities are fertile field for frauds.

  1. Inflation of stock statements.
  2. Some of the stocked goods in the large quantity may have been less value.
  3. hypothicating some goods in the favour of different banks.

Prevention Measure:

  1. Only marketable goods to be acceptd as security
  2. Strict examination of the banks representatives and borrowers credential
  3. proper evaluation of stocks
  4. Verification of statements of stocks.

LOAN FRAUDS:

The following types of fraud are generally commited: –

  1. Two diferent person taking loans on the same item or product
  2. Borrowing is denied when the particular person is alleged of non payment
  3. Loan taken from one purpose but used for a different purpose i.e loan taken for agriculture but used for personal purposes.

Prevention Measures:

  1. Proper verification of documents and the purpose for taking the loan
  2. Incase of a substantial amount of loan taken, it should be checked by the competent authority

COMPUTER RELATED FRAUDS:

To provide efficient and fast service, most of the branches of the bank except the ones in the rural and remote areas have been computerized.

Not many frauds related to computers have yet been reported so far as computerization in the Indian banks is of recent origin. There is a need to anaysisthe nature of such crimes so that appropriate preventive measures may be devised.

CHEQUE FRAUDS:

This constitutes the biggest volume of bank frauds. This crime is done in the following forms:

  1. Cheques are stolen, filled and signed spuriosly and encashed.
  2. The signed cheques are stloen and are encashed with alterations, if needed
  3. Cheques issued by organistions for employees are duplicated.

Prevention Measures:

  1. The instruments must contain a proper date
  2. Checking cheque kitting
  3. The amount should be checked that it should be written in both numerical and words.

DISHONOUR OF CHEQUES:

Dishonour of cheque or cheque bounces are very serious problems and it is becoming even bigger. To cope with this issue which was affecting the smooth business tracsactions, the Government of India has introduced the Negotiable Instruments Act,1881 which provides for provisions to deal with cases of cheque bounce under section 138 to 142.

The Superme court of India in a landmark judgement has also provided with new guidelines to deal with cheque bounce cases.

CONCLUSION:

These frauds are a creation of the experienced criminals, frantic customers or someone associated with the banking system or a bunco bankster or their collusion. Most of time with a strict vigilance and examination of various documents, their work can easily be detected.

These frauds are now becoming more and more frequent and can be considered as one of the main reasons for damaging the economy of the country and with such high profile frauds happening all over the country, it has become necessary to put a check to these activites and if possible to create a more stringent legislation to deal with these issues.

“Sticking to the rules and eternal vigilance is the basic prevention measure.”

Impact of Goods and Service Tax (GST) in Indian economy

Saakshi singhal

 Ph.D, Research scholar, Department of commerce, MDU, Rohtak

gst in India

Abstract

GST (Goods and Services Tax) is defined as a uniform indirect tax levied on goods and services across a country. More than 160 countries have implemented GST. The GST rolled out from July 1, 2017. GST, as an umbrella tax has replaced central taxes such as Central Excise Duty, Service Tax, Additional Duties of Excise & Customs, Special Additional Duty of Customs, and cesses and surcharges on supply of goods and services. There was a huge hue and cry against its implementation. In present paper it has been shown that which sectors are positively or negatively affected by GST.

Keywords

Goods and service tax, Indian economy, GST

Introduction

The Rajyasabha unanimously passed the constitution (22nd amendment) bill 2014, on 3rd August 2016 with 203 votes in this bill’s favour. All parties, except the AIADMK, backed the bill. GST is an indirect tax on the consumption and production of sales of goods and services throughout India, to replace taxes levied by central Govt. and state Govt. GST is levied and collected at each stage of sale or purchase of goods and services. It has a system of Input Tax Credit which will allow sellers to claim the prepaid tax so that the final liability on the end consumer is reduced. It is the biggest tax reform in 70 years after independence of India, the Goods and Services Tax (GST) was finally launched on the midnight of 30 June 2017, though the process of forming the legislation took 17 years (since 2000 when it was first proposed). It was launched at midnight 30 June – 1 July 2017 session in both the houses of parliament convoked at the Hall of the Parliament, but which was immediately boycotted by the opposition by staging a walk out to show their disapproval of the same.

Before 1st July 2017, some taxes were levied by the state Govt. and some were levied by central Govt. Govt. levied only one unified tax rate instead of all different types of taxes, GST is applied on goods and services at the place where actual consumption happens. It is based on the Destination Principle. GST levied and collected at each stage of sale or purchase of goods and services. Goods and services are not distinguished and are taxed at single rate in supply chain till the goods and services reach consumer. It is the consumer of goods and services who bears the tax. The manufacture/wholesaler/retailer pays the applicable GST rate but can claim back through tax credit mechanism.

The current taxes like excise duties, service tax, custom duty etc. have been merged under GST. The taxes like sales tax, entertainment tax, VAT, and other state taxes will be included in GST.

How GST is levied

GST is levied on the place of consumption of goods and services. It can be levied on following states:

  • Intra-state supply and consumption of goods and services.
  • Inter-state movement of goods.
  • Import of goods and services.

 Impact of GST on Prices of Goods and Services

Tax experts claimed that the previous practice of tax on tax – for example, VAT was being charged on not just cost of production but also on the excise duty that was added at the factory gate leading to production cost building up but now all had been gone when GST is rolled out. The prices of consumer durables, electronic products and ready-made garments will be available at low price after rolled out GST. In other aspects, for goods which were taxed at low rate, the impact of GST brings price increment. Services bearing essential ones like ambulance, cultural activities, pilgrimages etc. were exempted from levy are same. India has seen the strongest tax reform that aims to do away with various – tax system on goods and services and bring them under one rate. We can draw the following impact of GST on prices:

 The government rolled out the much talked about Goods and Services Tax (GST) on the midnight of June 30. The GST Council has fixed the tax rates, keeping a view on all goods and services; they are classified under tax slabs 0 % (exempted ones), 5%, 12%, 18% & 28%.

Here is a list of some items which are completely exempt from the GST regime:

  • The unprocessed cereals, rice & wheat etc.
  • The unprocessed milk, vegetables (fresh), fish, meat, etc.
  • Unbranded Atta, Besan or Maida.
  • Kid’s colouring book/drawing books.
  • Sindoor/Bindis, bangles, etc
  • Below is a list of the sectors which are negatively or positively affected by GST.

Sector wise positively impact of GST

Sectors Tax Implications under GST
Auto Commercial Vehicle (CV)/Two wheelers (2W) To marginally reduce by 1% compared to the existing tax structure.  Positive
Auto – Small cars Small cars which less than 4 meter length and more than 1500 cc engine tax rates to reduce by 2-2.5% compared to the existing tax structure.  Positive
Auto – Midsized cars and SUV Midsized cars <1500 cc &<4 meters in length and SUV rates would come down by 8% and12% respectively.  Positive
Consumer goods – essential items Effective tax rate in essential goods (soaps, toothpaste, edible oil and hair oils) under various tax slabs – Positive
Consumer goods – Footwear Footwear tax rates (<Rs 500) to reduce to 5% from 9.5% and <Rs500 to reduce to 18% from 24-30%– Positive
Consumer goods – Cigarettes Effective tax under GST would be 28% along with additional Cess and other taxes. GST rate in cigarettes according to the current rate will gradually increase over the next 5-6 years – Positive
Building Materials Organised players to benefit from higher tax rate in the long term, as they gain market share on reduced pricing spread between organised and unorganised players. However, higher tax rate may lead to tax evasion through loopholes, which is a concern from organised players.
Logistics In Consolidation of warehouses across the country with free movement of goods will lead to higher volumes for logistic companies. Execution of the same, however, might take some time as unorganised players will have to adapt to new systems under GST.

Sectors negatively effected by GST

Sectors Tax Implications under GST
Hotel more than Rs 5000 room rental Tax rate on fine dining restaurants increased to 28% from 15%. This will result in room rentals hikes, with consequent impact on hotel occupancies.- Negative
Restaurants & fine dinning Tax increased to 18% from 15%. This tax revision will affect the fine dining restaurant industry which has already seen significant pressure on its sales due to macro environment slowdown. – Negative
Branded Apparels Garments >Rs 1000 will be taxed at 12% instead of 7%. This will adversely impact business as price hikes would lead to late recovery in sales.

 

Conclusion

At the end we can say clearly with no doubt that it is the biggest ever change in tax structure of India. There is a fall in prices of Auto Commercial Vehicle, Two wheelers, Small cars, Midsized cars and SUV, essential items, Footwear, Building Materials etc. and education, healthcare are going to be exempted from GST but on the other hand, price of some other goods and services increased after GST like Hotel room rental, Restaurants & fine dining and Branded Apparels. There was threat of inflation before GST rolled out.  It can be concluded that GST has been going to be an historical record for its full fledge implementation and hopefully this biggest historical reform will result in ease of doing business in India.

References

  1. http://economictimes.indiatimes.com
  2. The Tribune, 2016.
  3. ey.com>Home>Service>Tax
  4. http://www.quora.com
  5. com>business>Economy.
  6. economics.com
  7. http//hindustantimes.com
  8. http://M.rediff.com
  9. relakhs.com
  10. mapsofindia.com
  11. gstindia.com
  12. http://en.m.wikipedia.org.

Assessing the Prospects of Green Marketing in India

Dr. Rouf Ahmad Rather

Lecturer

Department of Commerce and Management

Gandhi Memorial College  Srinagar , J & K

Abstract 

The word “eco-friendly” has become a slogan of today’s marketing practices of different companies throughout the world. Green marketing is gaining noteworthy attention from both marketers and consumers. Given that a cautiously crafted green marketing strategy can earn trustworthiness with customers and provide a stage for revenue growth, it’s an area worthy of additional reflection. This paper is an effort to present a picture of green marketing prospects in India.

Key words: Green marketing, Environmentally friendly product, Awareness, India

 

Introduction

Green marketing generally aims to promote eco-friendly products and a safe environment where people could stay. Right now green marketing is widely becoming a phenomenon throughout the world as concerns on our environment have begun to escalate in the past few decades. Every year, the population of people who are turning towards green brands or environmental friendly products are increasing, so, magnifying the phenomenon exponentially. Thus, businesses in almost every industry nowadays are flaunting the “green” features of their products and services in every chance they get. The success, however, of any green marketing strategy is heavily reliant on the consumers it would like to target.

 According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a wide range of activities, including product modification, changes to the production process, packaging modifications, as well as changing advertising. Still defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and retail definitions attached to this term. Other similar terms used are Environmental Marketing and Ecological Marketing.

 According  to Polonsky (1995)’s definition, “Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occur, with minimal detrimental impact on the natural environment”. Thus “Green Marketing” refers to holistic marketing concept wherein the production, marketing consumption an disposal of products and services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are becoming increasingly sensitive to the need for switch in to green products and services. While the shift to “green” may appear to be expensive in the short term, it will definitely prove to be indispensable and advantageous, cost-wise too, in the long run.

Green Marketing Practices in India

Nike is the first among the shoe companies to market itself as green. It is marketing its Air Jordan shoes as environment-friendly, as it has significantly reduced the usage of harmful glue adhesives. Kansai Nerolac Paints has been at the forefront of paint manufacturing for more than 88 years pioneering a wide spectrum of quality paints. Kansai Nerolac has worked on removing hazardous heavy metals from their paints – among this lead being the most prominent metal. Kansai Nerolac does not add any lead or other such heavy metals in its manufacturing process.

Dell has been one of the vendors who focus on producing green IT products. They have a strategy called “Go green with Dell” to sell these products in the market. It also comes in an eco-friendly packaging with a system recycling kit bundled along. Talking about the green commitments of the company, Sameer Garde, Country GM, Dell India, says, “Dell is also actively pursuing green innovations that will be of value in 2009 from data-center efficiency to the use of eco-friendly materials for everything from chassis design to product packaging.

Eco Hotels (Ecotels) is a certification system promoted by Hospitality Valuation Services (HVS) International. This system is based on 5 main criteria: environmental commitment, solid waste management, energy efficiency, water conservation, and employee education/community involvement. In India we have Eco-hotels like Orchid, Rodas, Raintree etc. believing and practicing green marketing. According to Harish Tiwari of Infinity Infomatic Pvt Ltd, a well known distributor, who says, “We don’t find any difficulty in selling green products because the knowledge for these products has increased in us as well in customer. They are ready to pay higher for these products once they convinced.” In May 2007, IBM launched Project Big Green to help clients around the world improve the efficiency of IT and better optimize their data center resources. IBM has software and services technologies to help businesses reduce data center energy consumption and cut energy costs by more than 40 percent.

The Introduction of CNG in New Delhi, the Capital of India, as it was being polluted at a very fast pace until Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public transport systems to curb pollution. The Gas Tech Electronic Products (Pvt) Ltd. has invented LPG Kit for motorcycles/scooters (4 stroke and 2 stroke).Can be fitted in 50 cc to 375 cc air cooled , single cylinder 2 stroke as well 4 stroke vehicles with cent % fuel efficiency, with clean exhaust and zero pollution.

Significance of Awareness in purchasing of green products

Generally speaking awareness comprises a human’s perception and cognitive reaction to a condition or event. Awareness does not necessarily imply understanding, just an ability to be conscious of, feel or perceive. To create more awareness for the consumers, many companies can be involved in programmes that support the environmentally friendly products. The consumers with respect to high to average level of green product awareness show high to medium level of green buying behavior and consumers having awareness to small degree and not at all show low green buying behavior. Hence there is an urgent need to make consumers aware about green products in order to speed up the green buying behavior among all consumers. (Rouf & Rajendran 2014)

The media are playing a significant role in creating awareness and educating people about the benefits of environment conservation to the society (Lalit & Kanokthip, 1998). In developing awareness of a green product, companies attempt to augment consumer knowledge of the product and its environmental attributes in the hope of bringing about purchase behaviour. But still now the exact nature of the relationship between environmental knowledge and environmentally sensitive behaviour is still to be established (Arbuthnott & Lingg, 1975). Consumer awareness might be useful when the manufacturer’s objective is to overcome resistance to new environmentally safe packages. Advertising of the new advantages and benefits of such products helps its consumers become more aware of the damage to the environment and they tend to change their buying habits. Unless consumers are aware of the advantages of green products, manufacturers‟ effort to introduce this product to the market will be wasted efforts (Kassaye & Dharmeda 1992).

Challenges in adopting Green Marketing 

Implementing Green marketing is not going to be an easy job. The firm has to face many problems while treading the way of Green marketing. Challenges which have to be faced are listed as under:

  • Green marketing encourages green products/services, green technology, green power/energy; a lot of money has to be spent on R&D programmes. So practicing green marketing initially will be a difficult and costly affair.
  • The customers may not believe in the firm’s strategy of Green marketing, the firm therefore should ensure that they convince the customer about their green product, this can be done by implementing Eco-labeling schemes. Eco-labeling schemes offer its “approval” to “environmentally less harmless” products have been very popular in Japan and Europe. In fact the first eco-label programme was initiated by Germany in 1978.
    • in the beginning the profits will be very low since renewable and recyclable products and green technologies are more expensive. So Green marketing will prosperous only in long run.
    • Many customers may not be willing to pay a higher price for green products which may affect the sales of the company.
    • The firms practicing Green marketing have to strive hard in convincing the stakeholders and many a times there may be some who simply may not believe and co-operate.

The Future of Green Marketing

There are many things to be learned to avoid green marketing myopia, the short version of all this is that effective green marketing requires applying good marketing principles to make green products desirable for consumers. The question that remains, however, is, what is green marketing’s future? Business scholars have viewed it as a “fringe” topic, given that environmentalism’s acceptance of limits and conservation does not mesh well with marketing’s traditional axioms of “give customer what they want” and “sell as much as you can”.  Evidence indicates that successful green products have avoided green marketing myopia by following three important principles:

Consumer Value Positioning

  • Design environmental products to perform as well as (or better than) alternatives.
  • Promote and deliver the consumer desired value of environmental products and target relevant consumer market segments.
  • Broaden mainstream appeal by bundling consumer desired value into environmental products.

Calibration of Consumer Knowledge

  • Educate consumers with marketing messages that connect environmental attributes with desired consumer value.
  • Frame environmental product attributes as “solutions” for consumer needs.
  • Create engaging and educational internet sites about environmental products desired consumer value.

Credibility of Product Claim

  • Employ environmental product and consumer benefit claims that are specific and meaningful.
  • Procure product endorsements or eco-certifications from trustworthy third parties and educate consumers about the meaning behind those endorsements and eco-certifications.
  • Encourage consumer evangelism via consumers social and internet communication network with compelling, interesting and entertaining information about environmental products.

Conclusion

 Green marketing covers more than a firm’s marketing claims. While firms must bear much of the responsibility for environmental degradation, the responsibility should not be theirs single-handedly.  Green marketing requires that consumers want a cleaner environment and are willing to “pay” for it, possibly through higher priced goods, modified individual lifestyles, or even governmental involvement. Until this occurs it will be difficult for firms alone to lead the green marketing revolution. It must not be forgotten that the industrial buyer also has the ability to pressure suppliers to modify their activities. Thus an environmental committed organization may not only produce goods that have reduced their harmful impact on the environment, they may also be able to pressure their suppliers to behave in a more environmentally “responsible” fashion.

Green marketing should not be considered as just one more approach to marketing, but has to be pursued with much greater vigour, as it has an environmental and social dimension to it.  And thus green marketing assumes even more prospects and relevance in developing countries like India.

References

Arbuthnott, J. and Lingg, S. (1975). A comparison of French and American environmental behaviours, knowledge and attitudes. International Journal of Psychology, 4(10), 275-

Kassaye. W. Wassen and Dharmeda V.(1992). Balancing Traditional Packaging Functions with the New Green Packaging Concerns. Advanced Management Journal, 57 (4), 15.

Polonsky, M.J. (1995). A stakeholder theory approach to designing environmental marketing

strategy. Journal of Business and Industrial Marketing.10 (3), 29‐46.

Lalit M. Johri and Kanokthip S. (1998). Green marketing of cosmetics and toiletries in       Thailand. Journal of Consumer Marketing, 15(3), 265 – 281.

Rouf Ahmad Rather and R Rajendran (2014). A Study on Consumer Awareness of green products and its Impact on Green Buying Behavior, International Journal of Research (IJR), 1 (8), 1483-1493