Scope of Indian Industries in the post globalization

Is India really benefiting from globalization, liberalization and market reforms post 1991? Yes in a big way says the Bombay Stock Exchange, yes of course say big motor companies like Maruti, Toyota, Ford and General Motors who have seen business boom like there is no tomorrow. Yes say white collared employees of BPOs, IT Service Companies, Pharmaceutical giants, and Manufacturing industries. Wait a minute don't you see a chord here...the only ones saying yes seem to be people from the middle and upper middle class families with college degrees and good jobs. No say farmers who continue to commit suicide and for whom the tomorrow holds a bleak future as the events in Nandigram and Singur show, no say unskilled labourers who continue to toil in poor conditions with very little pay, no say semi-skilled labourers for whom no reforms in archaic labour laws mean that manufacturing and engineering industries continue to limit hiring. Reforms and the Corporate Sector The corporate sector constitutes a dominant part of industry. Financial sector reforms along with the development of the capital market are changing the structure of corporate financing. This has led to a separation of ownership and the management and has given rise to the issue of corporate governance, among others. Corporate governance essentially deals with the ways of governing the corporations so as to improve their financial performance. The need for governance arises mainly due to the divergence of interests of different constituents of corporations like shareholders and managers, which offers scope for mismanagement and misappropriation of funds. This is important because poor performance may lead to corporate bankruptcy. Mismanagement leading to corporate bankruptcy has become an important issue in many economies including the developed ones. In this context, it is proposed to carry out a study on the issues of corporate financing, corporate governance, and corporate performance/ bankruptcy using firm-level data. Openness, Wages and Employment in India in the 1980s and 1990s Using a multi-sector simultaneous equations framework, the relationships between employment and wages to growth of productivity and output will be studied. For the study, the contribution of exports and imports/import substitution to growth of output will be estimated for different industries. This will make it possible to derive the effects of India's openness to trade and technology imports to growth of employment and wages in different sectors of the economy. A related question proposed to be taken up for analysis is how economic and trade liberalization affects the income of primary factors of production, particularly through its effect on economic rents. How the elimination of rents shows up in the estimates of total factor productivity is

another question to be pursued in this context. Disinvestments and Industrial Performance in India It is proposed to examine the process and extent of disinvestments in India in the 1990s. A particular question of interest is whether or not there is a better performance in the divested Public Enterprises (PEs) in India and the extent of such betterment in performance. Performance is to be considered with regard to profit margin, growth of investment and output, technological development and growth of productivity, employment and the inverse of debt-equity ratio. It has to be further examined whether higher profitability, if any, is because of greater monopoly power after disinvestments. Mergers and Takeovers Mergers and takeovers have become an important phenomenon of Indian industry after the reforms. There has, however, been very little research on this topic in the Indian context. A study of mergers and takeovers among Indian industrial firms is therefore proposed to be undertaken, with a particular focus on how the merger /takeover affected the performance of industrial firms. Industry-Urban Nexus Studies will be undertaken on industry-urban nexus exploring the possibilities of productivityaugmenting effects of urbanization on industries, and thus enhancing the competitiveness of firms located in large urban settlements relative to their counterparts in medium sized and small towns. Besides, the associationsbetween infrastructure investment and industrial concentration, and the possibilities of convergence are to be looked into. Research in this field would constitute questions relating to methodology as well as analysis. Impact of Technological Progress Economic reforms have created a condition in which firms are under great pressure to improve their technology. In this context, studies are proposed to be undertaken on the impact technological changes have on industrial firms in India. Particular issues to be examined are: the effect of technological change on labour market, and the contribution of technological change to growth of firms. A major focus of research will be on the effect of adoption of information technology on productivity, competitiveness and employment generation in Indian industries. An overview of Indian business sector: India has adopted domestic policies and institutions that have enabled people to take advantage

of global markets and have thus sharply increased the share of trade in their GDP. India has been catching up with the rich ones our annual growth rates increased from 1 percent in the 1960s to 5 percent in the 1990s. Now it is above 8%. Indians saw their wages rise, and the number of people in poverty declined. Industry wise, the software and services sector lead the mergers and acquisitions charge overseas but now this list includes both old and new economy industries like auto ancillaries, pharmaceuticals, telecom, agro-chemicals and steel. There are thus no stereotypes that only new economy companies are invited to themergers and acquisitions ball or that only the blue chip companies are partaking of the action. It is more democratic as smaller auto ancillary companies are also in the fray. Thanks to the easier external profile, at this time, India clearly tastes the fruits of globalization and the current liberal overseas investment regime will take the process forward. However, a far more important use of our reserves is for higher domestic investments. There are no prizes for guessing that it is only with higher investments that there can be faster GDP growth. In next twothree years, India must also work on improving delivery of education and health services. Indian government must provide social protection to a changing labor market. In addition, that the changes in climate due to industrializations will be especially burdensome for developing countries and poor people. There is broad agreement among scientists that human activity is leading to potentially disastrous global warming. India must demand effective international cooperation to address this problem. Strategies to incorporate competitiveness in Indian business In order to impute competitiveness in the Indian business domain following strategies can be adopted: * Infrastructure improvement up to global standard * Development of transportation facilities so that least time is required to move from one place to another; it also reduces the carrying cost * Government initiatives to advertise opportunities in different field to attract both Foreign Direct Investment (FDI) and Foreign Portfolio Investment(FPI) * Linkage effect-adaptation of backward integration for saving cost and time with a look to improve supply chain * Unbalanced growth strategy to facilitate growth * Making direct link among educational institutes and business firms to provide direct industry interference in large scale with practical approach to students * Guild formation by the firms of specific industries to discuss, analyze about advantages, disadvantages, opportunities etc. different dimensions of that particular sector standing on a

common platform * Co operation among domestic and foreign companies to explore new opportunities in several fields of operations * Technological up gradation in industries * Application of Just In Time(JIT) technique in business Government initiatives to support competitiveness Government of India is playing a very pivotal role to support competitiveness in Indian business. It is working and there exists room for many things to do like the followings: * Renew and modification of ex-im policy * A more comprehensive competitive policy * Removal of red-tape barriers * Increasing facilities in Special Economic Zones (SEZ) and also increasing numbers of SEZ giving ultimate priority * Inauguration of free information bureau to provide important up to date information regarding different fields of operations in all the states * Advertising opportunities (e.g.- tourism) in different sectors * Free riders prohibition * Facilitating mergers and acquisitions * Subsidizing areas of scarcity and finding alternative strategies for further development.