Recent development in indian Capital Market by milanpadariya21

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									                               BUSINESS ENVIRONMENT


  The Indian capital market has witnessed major reforms in the decade of 1990s and thereafter. It
  is on the verge of the growth.
  Thus, the Government of India and SEBI has taken a number of measures in order to improve the
  working of the Indian stock exchanges and to make it more progressive and vibrant.

  Reforms in Capital Market of India

  The major reforms undertaken in capital market of India includes:-

       1. Establishment of SEBI

The Securities and Exchange Board of India (SEBI) was established in 1988. It got a legal status
in 1992. SEBI was primarily set up to regulate the activities of the merchant banks, to control the
operations of mutual funds, to work as a promoter of the stock exchange activities and to act as a
regulatory authority of new issue activities of companies. The SEBI was set up with the
fundamental objective, "to protect the interest of investors in securities market and for matters
connected therewith or incidental thereto."

  The main functions of SEBI are:-

  i.     To regulate the business of the stock market and other securities market.
 ii.     To promote and regulate the self-regulatory organizations.
iii.     To prohibit fraudulent and unfair trade practices in securities market.
iv.      To promote awareness among investors and training of intermediaries about safety of
 v.      To prohibit insider trading in securities market.
vi.      To regulate huge acquisition of shares and takeover of companies.

        2. Establishment of Creditors Rating Agencies

Three creditors rating agencies viz. The Credit Rating Information Services of India Limited
(CRISIL - 1988), the Investment Information and Credit Rating Agency of India Limited (ICRA -
1991) and Credit Analysis and Research Limited (CARE) were set up in order to assess the
financial health of different financial institutions and agencies related to the stock market
activities. It is a guide for the investors also in evaluating the risk of their investments.

        3. Increasing of Merchant Banking Activities

  BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                              Page 1
                                BUSINESS ENVIRONMENT

Many Indian and foreigncommercial banks have set up their merchant banking divisions in the last
few years. These divisions provide financial services such as underwriting facilities,
issue organising, consultancy services, etc. It has proved as a helping hand to factors related to the
capital market.

     4. Candid Performance of Indian Economy

In the last few years, Indian economy is growing at a good speed. It has attracted a huge inflow of
Foreign Institutional Investments (FII). The massive entry of FIIs in the Indian capital market has
given good appreciation for the Indian investors in recent times. Similarly many new companies
are emerging on the horizon of the Indian capital market to raise capital for their expansions.

     5. Rising Electronic Transactions

Due to technological development in the last few years. The physical transaction with more paper
work is reduced. Now paperless transactions are increasing at a rapid rate. It saves money, time
and energy of investors. Thus it has made investing safer and hassle free encouraging more people
to join the capital market.

     6. Growing Mutual Fund Industry

 The growing of mutual funds in India has certainly helped the capital market to grow. Public
sector banks, foreign banks, financial institutions and joint mutual funds between the Indian and
foreign firms have launched many new funds. A big diversification in terms of schemes, maturity,
etc. has taken place in mutual funds in India. It has given a wide choice for the common investors
to enter the capital market.

     7. Growing Stock Exchanges

The numbers of various Stock Exchanges in India are increasing. Initially the BSE was the main
exchange, but now after the setting up of the NSE and the OTCEI, stock exchanges have spread
across the country. Recently a new Inter-connected Stock Exchange of India has joined the
existing stock exchanges.

     8. Investor's Protection

Under the purview of the SEBI the Central Government of India has set up the Investors
Education and Protection Fund (IEPF) in 2001. It works in educating and guiding investors. It
tries to protect the interest of the small investors from frauds and malpractices in the capital

 BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                  Page 2
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     9. Growth of Derivative Transactions

Since June 2000, the NSE has introduced the derivatives trading in the equities. In November
2001 it also introduced the future and options transactions. These innovative products have given
variety for the investment leading to the expansion of the capital market.

     10. Insurance Sector Reforms

Indian insurance sector has also witnessed massive reforms in last few years. The Insurance
Regulatory and Development Authority (IRDA) was set up in 2000. It paved the entry of the
private insurance firms in India. As many insurance companies invest their money in the capital
market, it has expanded.

     11. Commodity Trading

Along with the trading of ordinary securities, the trading in commodities is also recently
encouraged. The Multi Commodity Exchange (MCX) is set up. The volume of such transactions is
growing at a splendid rate.

Apart from these reforms the setting up of Clearing Corporation of India Limited (CCIL), Venture
Funds, etc., have resulted into the tremendous growth of Indian capital market.

SEBI vide its press release PR No.59/2010 dated March 6, 2010 has announced the decisions of
the board meeting of SEBI held on the same day. The following is an analysis of the above said


 BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 3
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The term ‗social audit‘ may be interpreted in several ways. As far as common understanding
goes, it is an essential assessment of how well a company has discharged its social obligations.
However experts see it as a systematic and comprehensive evaluation of an organization‘s ‗social
performance‘ which is interpreted as organizational efforts in enriching the general welfare of
the whole community and the whole society. The need for social audit arises because of various
reasons. In order to reach the objective of enriching economic wealth for the shareholders, the
firm do it at the cost of social and environmental disorder. And since many would not take into
account the social costs of such negative implications, their prices do not reflect the real cost.
The organizations do it more because of competitive reasons. However if the larger interest of
society is to be preserved, there has to be some consideration for social good.

The company is expected to behave and function as a socially responsible member of the society
like any other individual. It cannot shun moral values nor can it ignore actual compulsions. There
is a need for some form of accountability on part of the management which is not only limited to
shareholder alone. In modern times, the objective of business has to be the proper utilization of
resources for the benefit of others. A profit may still be a necessary part of the total picture but it
sould not be the only purpose. The company must accept its obligation to be socially responsible
and to work for the larger benefit of the community.


Social audit tries to make the traditional economic and technical values as two subsystems
within the larger social system. Social audit primarily tries to cover the

following areas:

   1. Ethical Issues:

   They offer a basis for determining what is right and what is wrong in terms of a given
   situation. Ethics is best understood when we cite examples relating to unethical conduct.
   Few such examples can be price discrimination, unfair trade practices, cheating customers,
   pirating employees‘ ideas, leaving the job without observing job contract.

   2. Equal opportunity:

   A second relevant social issue which comes under social audit is the equity of treatment in
   employment and a fair justice system in the organization. Employment decisions in an
   organization should be based on merit and ability and not on the basis of arbitrary quotas
   based on gender, race or religion.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                    Page 4
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   3. Quality of Work Life:

   Besides demands for safe, healthy and human work environment people are seeking greater
   meaning in their lives. Greater responsibility, growth, freedom and flexibility, fair reward
   system are few things which employees have preference for. There is also a growing demand
   for employee assistance programmes keeping in mind the present day stressful situations they
   are exposed to.

   4. Consumerism:

   Business has a special obligation towards the consumer as the business exists to serve and
   satisfy the needs of the consumers. It is the principal duty of business to make available to
   the consumer items of daily needs in the right quantity at a right time, price and of the right
   quality. However many Indian products are not safe at all and the consumers suffer at hands
   of corrupt, and dishonest corporate houses.

   5. Environmental Protection:

   Growing water, air and environmental pollution by various industries in recent times has led
   to a public outcry demanding ‗environmental protection‘ at any cost.

                                     SOCIAL AUDIT CYCLE


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 5
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The various types of social audit may be listed as below:

Social Process Audit

It tries to measure the effectiveness of those activities of the organization which are largely taken
up to meet certain social objectives. Corporate executives in this case try to examine what they
are doing and how they are doing. The method involves four steps:

i) Find circumstances leading to the starting of the social audit programme

ii) List out goals of the social programme

iii) State how the organization is going to meet such goals

iv) Qualitatively evaluate what is actually done as against what has been planned

Financial Statements Format Social Audit

In this type, financial statements show conventional financial information plus information
regarding social activities. About associates a management consultancy firm proposed that the
balance sheet should show a list of social assets on one side and social commitments, liabilities
and equity on other side. The income statement should reveal social benefits , social costs and
the net social income provided by the company operations to the staff community, general
public and clients. This approach has been criticized as many feel that it may create confusion of
complicating issues further and defying easy understanding.

Macro-Micro Social Indicator Audit

This type of audit requires evaluation of a company‘s performance in terms of social measures (
micro indicators) against macro social measures. The macro social factors include the social
goals expected by society in terms of health, safety, education, housing, accidents, pollution
control measures, etc. The micro social indicators are measures of the performance of the
company in those areas measured by macro social indicators.

One of the important problems with this approach is the non-availability of reliable macro social
indicators. Does an increase in family planning clinics indicate better medical facilities? Further
it is not easy to specify whether the individual actions initiated by a company have actually
improved the quality of life of a community, such individual actions may ultimately be labeled as
irrelevant , insignificant and sometimes , even unnecessary. In any case this approach helps all
companies to evaluate their contributions in improving social life on a rational basis.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                  Page 6
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Social Performance Audit

In developed countries, several interests groups including church groups, universities, mutual
funds, consumer activists regularly measure, evaluate and rank socially responsive companies on
the basis of their social performance. Regular opinion polls are carried out to find companies
that initiate social efforts in a proactive manner and earn the goodwill of the general public.

Partial Social Audit

In this case, the company undertakes to measure a specific aspect of its social performance ( e.g.
environment, energy, human resources) because it considers that aspect to be very important or
because its social efforts for the time being are confined to the area:

Environmental Audit

In developed countries people protest violently if the companies try to pollute the environment
and the companies not only comply with regulations but also proactively explore opportunities
to recycle wastes into\ useful products. An internal group constituted by the unit concerned
prepares a report about the way the environmental issues of importance are being taken care of.
This report is generally re-examined by an outside auditor to see whether air/ water pollution
measures, release of toxic wastes, safety regulations have been complied with or not.

Energy Audit

To conserve energy sources, energy audits are undertaken to investigate how energy is obtained,
consumed and preserved.

Human Resource Accounting (HRA)

The basic philosophy of HRA is that human resources are assets and that the investment in
acquiring, training, and\ developing these resources should be accounted for as an asset.
Conventional accounting methods write off investments in human capabilities and values as
operating expenses and thereby understate the profit. The current value of a company‘s human
assets is not considered while computing expenses/revenues and, as a result, the balance sheet
does not portray the true and fair picture of the company‘s state of affairs.

Comprehensive Audit

It tries to measure, verify and evaluate the total performance of the organization including its
social responsibility activities. It focuses mainly on management systems rather than on the
actions or events which are not so important. It aims at evaluating the quality of processes and
the information on which organizational decisions are taken.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 7
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Social audit presents numerous problems; its scope cannot be determined precisely. If we go for
listing all activities undertaken by an organization, say in an accounting year it may be difficult
to find out which activities are to be treated as ‗ social‘ and which not. After all most of the
activities of a company may have some sort of social relevance somewhere or the other. To
avoid this if we take only those activities that have tangible social advantage, the ‗scope of social
audit‘ is severely constrained. The requirements of various groups such as employees,
customers, shareholders, general public, government, etc. may not be accurately and readily
convertible into ‗social rhetoric‘ always. Another serious problem as explained previously is
with regard to the ‗determination of yardsticks‘ for measuring the cost and accomplishment of
activities shown in the social audit.


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                  Page 8
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Consumerism is a social and economic order that encourages the purchase of goods and services
in ever-greater amounts. The term is often associated with criticisms of consumption starting
with Thorstein Veblen. Veblen's subject of examination, the newly emergent middle class arising
at the turn of the twentieth century, comes to full fruition by the end of the twentieth century
through the process of globalization.


India's large youth population is driving the consumerism trend in the country. For the youth
shopping is just not a necessity but a leisure activity. Also more disposable income and more
number of persons working in families have also contributed to this trend. The good news is that
Indian consumerism is yet to attain maturity. But the catch here is society has a whole believes in
saving rather than spending.

 A liberalized economy has open doors to MNCs, and all the companies have successfully
adapted their products or their marketing communication or in some cases both to the local
conditions and preferences. Like Mac-Donalds, Pizza- Hut, Maggi - the noodles tastes different
in every country. I had the pleasure to have Maggi noodles of different regions; I must tell you it
does taste different.

 Organized retail formats have also contributed to the spending spree in the country. One myth is
that Indian consumers are price sensitive. It is partly true, yet it is fast changing. FMCGs or
fashion brands have all above average pricing, but in spite of this, these companies have gained
profit from operations in the sub-continent. We need value for money and this is misinterpreted
quite a few times. But certain conditions such as high inflation which is prevalent here right
now, hinders the new found consumerism confidence.

Well thinking global and acting locally works very well here. The Bharatiya or the Indianness is
crucial to the people and this is precisely what companies are cashing in on. One needs to see
how this strategy would work in the future as the socio- economic scenario is fast changing here
in India.

Changing Lifestyles – Consumerism in India

Twenty years ago, urban India‘s lifestyles and buying trends were a far cry from what we see
today. With limited choices, consumers purchased commodities from the few brands available.
In 1991 India threw her doors open to international trade, and the situation changed dramatically

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                 Page 9
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and so did consumerism in India. Today, consumers are spoilt for choice and fully acknowledge
that they rule the market. Manufacturers cater to their whims and give the consumer complete
control of market trends.

Despite India having a low per capita income, it still remains a lucrative market, even for costly
products. One reason is India‘s large population. A sizable section of the country‘s citizens forms
the working population. As foreign trade grew, it opened up numerous jobs opportunities and
gave the bulk of the working population significant spending power. This group generally
believe in working hard and spending luxuriously, and are responsible for the current boom in

In general, Indian consumers have a high degree of value orientation and thus brands need to
strategically price their products to gain a foothold in India. Also the Indian consumer tends to
associate himself with products that communicate the message of family values, traditions, care
and affection. These nuances set India apart from other developing nations. Companies are
forced to considerably tailor their products to suit the local market and meet the requirements of
consumerism in India.


First, consumer luxuries have got democratised during this decade. Products that were
considered for a few started to reach larger and larger masses of consumers — from colas to
shampoos to readywear to mobile to airlines. Categories that started in the 90s began to expand
their footprint and became a part of mass life. Consumption and consumerism reached more
people than it did in the 90s. Social inequity continues to be part of India‘s economic, but the

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 10
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capitalistic principle that ―open up from the top to a few, and the benefits will flow down to
many‖ has come true. Consumerism is truly mass!

Along with this, has come a culture of upgrade and step movement rather than lifetime
ownership and gradual movement. I think technology, mobile handsets in particular, made
consumers get used to constant change — buying a new product even when the old one was
―functional‖, thus breaking the barrier of the ―replace when it‘s broke‖ mindset. And then this
extended to other categories in life — from clothes to televisions to homes. Every Indian market
presents an opportunity to marketers to get consumers to move up. As technology improves and
consumers‘ disposable income increases, the willingness and propensity of consumers to make
leaps from unbranded to branded and pay significant premia is also increasing. There is no
longer “lifetime ownership”, but “lifetime consumer value’!

Third, there has been a shift from product to services and experiences. And this is taking
place across categories. Coffee has become Cafes, beauty products are transiting into Parlours
and this is going into small towns too with local ―aunties‖ sensing business opportunities
opening parlours and beauty counselling centres at home — and home videos have become
multiplexes. And in every case, it provides marketers an opportunity to extract more value.


It is convenient, people can get what they need without any hassle

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                            Page 11
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It boosts non- service based economies greatly

It creates jobs It promotes innovation

Consumerism makes aware to the society regarding rights and responsibilities of consumers

Consumers protection acts and can regulate consumption in a proper way, can control economy
for the consumers' welfare.


People become overly dependent on it

The manufacturing of consumer goods is a strain on the environment


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                          Page 12
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It is a pattern of growth in which resource use aims to meet human needs while preserving
the environment so that these needs can be met not only in the present, but also for generations to
come (sometimes taught as ELF-Environment, Local people, Future). The term sustainable
development was used by the Brundtland Commission which coined what has become the most
often-quoted definition of sustainable development as development that "meets the needs of the
present without compromising the ability of future generations to meet their own needs."[1][2]

Sustainable development ties together concern for the carrying capacity of natural systems with
the social challenges facing humanity. As early as the 1970s "sustainability" was employed to
describe an economy "in equilibrium with basic ecological support systems."[3] Ecologists have
pointed to The Limits to Growth,[4] and presented the alternative of a "steady state economy"[5] in
order to address environmental concerns.

The field of sustainable development can be conceptually broken into three constituent
parts: environmental sustainability, economic sustainability and sociopolitical sustainability.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 13
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In 1987, the United Nations released the Brundtland Report, which included what is now one of
the most widely recognised definitions:

"Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs."

It contains within it two key concepts:

   the concept of 'needs', in particular the essential needs of the world's poor, to which
    overriding priority should be given; and
   the idea of limitations imposed by the state of technology and social organization on the
    environment's ability to meet present and future needs."

‗Sustainability‘ is a semantic modification, extension and transfer of the term ‗sustained yield‘.
This had been the doctrine and, indeed, the ‗holy grail‘ of foresters all over the world for more or
less two centuries. The essence of ‗sustained yield forestry‘ was described for example by
William A. Duerr, a leading American expert on forestry: ―To fulfill our obligations to our
descendents and to stabilize our communities, each generation should sustain its resources at a
high level and hand them along undiminished. The sustained yield of timber is an aspect of
man‘s most fundamental need: to sustain life itself.‖

Environmental Sustainability
Environmental sustainability is the process of making sure current processes of interaction with
the environment are pursued with the idea of keeping the environment as pristine as naturally
possible based on ideal-seeking behavior.

An "unsustainable situation" occurs when natural capital (the sum total of nature's resources) is
used up faster than it can be replenished. Sustainabilityrequires that human activity only uses
nature's resources at a rate at which they can be replenished naturally. Inherently the concept of
sustainable development is intertwined with the concept of carrying capacity. Theoretically, the
long-term result of environmental degradation is the inability to sustain human life. Such
degradation on a global scale could imply extinction for humanity.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 14
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Consumption of renewable resources          State of environment             Sustainability

More than nature's ability to replenish   Environmental degradation Not sustainable

Equal to nature's ability to replenish    Environmental equilibrium Steady state economy

Less than nature's ability to replenish   Environmental renewal       Environmentally sustainable

Sustainable Development in India - How and Why?

After independence several development efforts in India created a lot of mess with misguided
policies. The immediate task in front of us is it to clean up this mess. We have 50 crores of
people living in rural areas excluding rich-to do households. These people live in mainly rain-fed
areas. The resources are limited for these people. From a population of 100 crores 70% of are
poor. Majority of the lands owned by them are categorized as wastelands where yields are about
0.5 to 1 ton of grain per hectare Forests and pastures have been highly degraded, and the top soil
has been eroded or deprived of nutrients. Usually one crop per year (with poor yield) is
cultivated in these areas due to inadequate irrigation facilities. On the whole, the present natural
resource endowment in this region appears quite bleak. Even though we talk about privatization,
there is no real investment in agriculture, especially in these rain-fed areas that are outside the
much hyped "Green Revolution" areas. That is why the theme of this talk is "turning the present
crisis to an opportunity." In fact, by the combination of a scientific and participatory approach to
land improvement and micro-watershed management a sufficiently large bio-mass surplus can be
achieved in these areas. In fact it is possible to generate bio-mass surplus in the form of wood
and process-able material of 2 T/Household/Year.

The basis of industrialization is energy. We need to identify the energy needs based on "end-
use." This is the departure from Western calculations of energy needs. The main departure is we
must look at energy in the following areas:

      Materials: Steel, metals etc.
      Synthetic Polymers: PVC, polyethylene, adhesives etc.
      Liquid fuels
      Cement

In developed countries, energy needs are looked as the availability of "gas and/or gasoline" and

There can be a major leap in rural infrastructure (villages & small towns), economy and
livelihoods if 5T of coal-equivalent energy supply is available per family per year. We currently

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 15
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make available only 0.5-1 ton. However, there is capacity to provide this level of energy with
50% from solar and other 50% from materials such as bamboo, small timber chemical
intermediates from plants (such as non-edible oils, phenols, starch, ethanol) etc. So far we have
been neglecting solar energy. Currently, from the point of end-use, 40% of energy from coal is in
the form of steam (or heat). Steam can also be produced at low-cost by solar-thermal systems.

An overhead of a low-cost, high-performance solar thermal equipment, fabricated at Bhusawal
(Maharashtra) was shown.

The 10 square-meter concentrator has a modular design with regular-size flat glass mirrors,
supported by a steel truss to give the overall shape of a paraboloid concentrator. The receiver,
located at the focus of the concentrator, is an aluminum cage (about the size of a trashcan) with
tubes running around it (for transferring heat to the working medium----oil or steam). The entire
structure has been designed to withstand very high gusts of winds. The present cost of the system
(including the tracking drive) is Rs. 7500 per square meter. The amount of heat delivered by the
unit over a period of 8 hours is roughly 1 kg coal-equivalent (about 3500 kcal in the case of high-
ash content coal) per square-meter of the concentrator. If the size of the concentrator is
increased, engineered wood-bamboo composites can replace the steel frame with a drastic
reduction in the cost.

We now have the capability to train an engineering diploma holder to fabricate these units in a
small garage with no expensive equipment.

Note: To increase the capacity of process-able materials for energy to 2.5 tons per household,
we need to shift the use of glass in Indian situations from conspicuous use to regenerate-able
form of energy. Maybe we need to have a policy of taxing the consumptive/conspicuous users.

Bamboo as a material for infrastructure

In Andhra Pradesh a large arched-roof community-hall type structure using engineered bamboo
elements was built three years ago taking the local conditions as part of the design (overhead
shown with the structure). In fact this structure, while built as a cyclone resistant structure,
turned out to be the optimal design after exhaustive CAD studies.

Another example is in the case of village/small-town roads, where bamboo-grid reinforcement of
the road base, (along with natural or synthetic fabric under layer for preventing water entry from
below & sides) has enabled the construction of very durable roads (overhead shown).

A side note: There are instances in China, where bamboo used for some applications have
survived 2000 years. The point is that preservation treatment of bamboo is not a major issue,
particularly so with modern techniques. We glorify traditional knowledge only because time
tested lessons are the only ones remain for us to glorify from traditions and they deserve to be
studied as sources of knowledge.

Using modern knowledge of structural engineering, and the inherently superior properties of
bamboo, engineered wood-bamboo composite structural members with innovative joining

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 16
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techniques have been designed which are as strong and durable as reinforced cement columns
and beams (overhead shown). Of course, these do need skilled labor. But, then local artisans can
be trained in rural areas, leading to rapid increase in livelihood opportunities and the capacity to
build excellent rural infrastructure at very low cost.

The main point is that we need to look at the approaches of using traditional resources to meet
our energy needs. Fortunately, there is a small but important segment of people who do want to
look at eco-friendly resources for alternate energy needs. The question to ask is "if we can not
provide something do we have the right to use it?" The science has given us the ability to make
otherwise worthless material into valuable products. (e.g. silicon for computer chips, optical
cables in stead of copper as medium). After all, all mining activity basically involves converting
mud or rocks into materials to which we attach greater value. If we can use modern knowledge
properly, half of the energy needs of deprived rural areas and small towns can come from solar-
thermal energy, while the other half can come from in the form of high-value materials and
chemical intermediates from biomass. But to achieve this we need a different world-view. We
need to look at the concept of producers & users (or consumers). These are all part of the same
global system. Ultimately, economics is all about value-addition, whether the value-addition is in
the form of primary production (agriculture, fishery, forestry), manufacturing, services or the
arts. However,

"ADDING VALUE WITHOUT A VALUE SYSTEM                                IS   NOT     SOCIALLY       OR

How do you plan to reform current education system in India with alternate energy

We need to have programs such as "education at work place" and options such as Open
University. In fact if we have a life-time partnership between producers and students with real
world experience, we can hope to train students better equipped to handle these activities.

Are there structural studies done for bamboo?

Yes. In fact there are many studies including computations of Young's Modulus, specific gravity
etc. done and classification and categorization work is also being done. It is indeed possible and
being done in terms of modeling and analyzing bamboo as a building material. We are rapidly
moving towards development of quality standards for engineered bamboo at levels required for
ISO certification.

Consider the following scenario being looked at currently:

Suppose we have 20 students per teacher, with 10 teachers helping out 20 days per year. They
are given 1000 Rs.. Then there will be a post graduate student working in one village first year
and expand to three villages next year. In one district we want to select two areas of 5000
hectares each and create a network of the above mentioned set up and encourage the concept of
open learning. A possible scenario is a practicing ITI student with real world experience can

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 17
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challenge an academic IITian equipped with no practical knowledge. That will be the ultimate
achievement of bringing users and producers together in the education system.


   1. Forest Village: Produce primary products i.e. bio-mass, wind and hydro energy, avoid
      unproductive water losses and erosion.
   2. Forest fringe settlement: Processing of bio-mass & local mineral to produce intermediate
   3. Village Producers: Grain pulses etc. for food security.
   4. Small Town & Rural neighbors: Fabricate equipment & produce material required for
      infrastructure and energy sector to serve entire population.
   5. Urban fringe settlement: With Internet connectivity & market opportunity, we can
      convert intermediate products according to consumer demand.
   6. Metropolitan cities & large energy intensive industry: These can become major demand

The consequences of this activity are:

   1. Reducing distance between produce and consumers, thereby reducing prices, creating
      more livelihood opportunities in rural areas, and enabling better governance & conflict
      resolution through convergent community action.
   2. Income generation in dispersed town so that common people benefit from reduced cost of
      land and infrastructure.
   3. Overall reduction in transmission and transport cost as well as associated losses.
   4. Reduction in transactional cost (removing middlemen from the picture).

System Management and Policy

System management can be improved by setting up service enterprises for energy generation and
distribution. A joint sector leasing and financing company with participation of the state
renewable energy development agencies, private enterprises, professionals, user groups and
cooperatives of artisans is an attractive prospect. This will help to separate the ownership and
service functions. A pre-requisite of success is social acceptability of a two part tariff system
where basic service will be provided at affordable price by availing of existing generation of
distribution facilities and concession for development of renewable energy sources.

Changes are necessary in the land and water use and allocation policy. A bio-mass strategy must
be implemented to raise the bio-mass production by use of funds currently available for
wasteland development with a condition to create and sustain bio-mass pools. Entitlement of the
bio-mass to the poor from the local and regional bio-mass pools would make it possible to
recover the cost of energy services in the form of bio-mass.

High value bio-mass products, inputs for liquid fuel and chemical intermediate production:

   1. Starch from various tubers including tapioca (or cassava), sweet potato

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 18
                             BUSINESS ENVIRONMENT

   2. Sugary juices from sweet sorghum, sugarcane and palms
   3. Various non-edible oils essentially as energy or chemical intermediates from Jatropha
   4. Valuable non-edible oils with preservative and pesticides value such as neem, Karanj
   5. Latex including Jatropha
   6. Acrylic resins from latex yielding dryland species
   7. Phenols (for making phenolic resins used as adhesives in various industries) including
      cashew nut shell and Bhilava nut (Bibba).
   8. Tannin from bark of Harda etc.

The above list does not include items which have very specific uses and therefore difficult to
market such as medicinal herbs, and consumer products such as perfumes, essential oils, flowers
with hazard of market saturation.

Note: A hand out distributed includes tables for Ethanol yields of various crops based on average
yields in Brazil, Types of raw materials potentially useful for microbial conversion to fuels,
Energy analysis of ethanol production from various crop substrates.

Sustainable development in India encompasses a variety of development schemes in social,
cleantech (clean energy, clean water and sustainable agriculture) and human resources segments,
having caught the attention of both Central and State governments and also public and private

In fact, India is expected to begin the greening of its national income accounting, making
depletion in natural resources wealth a key component in its measurement of gross domestic
product (GDP).

India's sustained efforts towards reducing greenhouse gases (GHG) will ensure that the country's
per capita emission of GHG will continue to be low until 2030-31, and it is estimated that the per
capita emission in 2031 will be lower than per capita global emission of GHG in 2005, according
to a new study. Even in 2031, India's per capita GHG emissions would stay under four tonnes of
CO2, which is lower than the global per capita emission of 4.22 tonnes of CO2 in 2005.

Major Achievements

   1. The number of carbon credits issued for emission reduction projects in India is set to
      triple to 246 million by December 2012 from 72 million in November 2009, according to
      a CRISIL Research study.

   2. This will cement India's second position in the global carbon credits market (technically
      called Certified Emission Reduction units or CERs). The growth in CER issuance will be
      driven by capacity additions in the renewable energy sector and by the eligibility of more
      renewable energy projects to issue CERs. Consequently, the share of renewable energy
      projects in Indian CERs will increase to 31 per cent.

   3. CRISIL Research expects India's renewable energy capacity to increase to 20,000
      megawatt (MW) by December 2012, from the current 15,542 MW.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                              Page 19
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   4. The contribution of renewable energy to the power business in India has now reached 70
      per cent, compared to 10 per cent in 2000, in terms of project numbers and dollar value,
      according to Anita George, Regional Industry Director, Asia Infrastructure and Natural
      Resources, International Finance Corporation (IFC).

   5. Growth in use of green technologies has put India on the green-building leader board
      with countries such as the US. "About 2-3 per cent of all construction in India is green, as
      good as (in) the US. In the next two or three years, we want to bring it up to 10 per cent,
      which will put us on top," as per the Indian Green Building Council (IGBC).

   6. The US$ 1.79 billion Indian lighting market is estimated to be growing at 18 per cent
      annually and switching rapidly to energy-efficient systems. In value terms, about US$
      425.58 million of the current market size belongs to the compact fluorescent lamp (CFL),
      according to Electrical Lamp and Component Manufacturers' Association of India
      (ELCOMA) statistics.
   7. On the back of the incentive package for electric vehicles announced by the Ministry of
      New and Renewable Energy, average monthly sales of electric two-wheelers has risen 20
      per cent, according to Sohinder Gill, Director, Society of Manufacturers of Electric

   8. Backing the ‗polluter must pay‘ principle to deal with the issue of residual pollution,
      Prime Minister Dr Manmohan Singh has endorsed proper enforcement of regulatory
      standards to prevent green damage. He also inaugurated the 'Delhi Sustainable
      Development Summit' (DSDS), organised by The Energy and Resource Institute (TERI),
      on February 3, 2011.

   9. National Aluminium Company Limited (NALCO), the Navratna PSU, under the Union
      Ministry of Mines, Govt. of India, has become the first PSU in the country by
      implementing a pilot-cum-demonstration project on Carbon Sequestration in its captive
      power plant at Angul. The project is expected to go a long way towards addressing the
      issue of bringing down GHG, a NALCO spokesperson said.

   10. Currently, India has 18,655 MW of installed renewable energy, accounting for a total of
       11 per cent of the total capacity of 168,954 MW. The target includes adding 20,000 MW
       of solar energy by 2022, which would take the share of renewable energy in the total
       electricity generation capacity of the country to 15 per cent, said Dr Arun Tripathi, a
       director and a scientist at the ministry. He added that the Indian government's goal is that
       renewable energy should account for 30 per cent share of the total electricity capacity by


   -   India expects investments to the tune of US$ 55 billion by 2015 in the renewable energy
       sector which is expected to produce 35 giga watt (GW) of power, according to Mr

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 20
                              BUSINESS ENVIRONMENT

       Debashish Majumdar, Chairman and Managing Director, Indian Renewable Energy
       Development Agency Ltd (IREDA).

   -   According to a recent study on India attractiveness survey by Ernst & Young, Foreign
       Direct Investment (FDI) in Renewable Energy in India witnessed a 105 per cent rise.
       Wind energy is the fastest growing renewable energy sector and the FDI inflow in the
       sector has been increasing over the years.

   -   Private equity investment in renewable energy sector picked up pace in the country from
       2004. According to a report by 3i Network – IDFC, from a private equity investment of
       US$ 851 million in 2005, inflows into the renewable sector in India soared to US$ 2,136
       million in 2008. Separately, a study by the Word Resources Institute recently estimated a
       renewable energy market of over US$ 2 billion a year in India.

   -   Independent Power Producers (IPPs) in this sector appear to provide attractive investment
       opportunity for private equity funds as a result of policy and regulatory developments
       such as generation-based tariffs, renewable energy tariffs and the national solar mission.
       Companies such as Auro Mira Energy, Greenko, Orient Green Power and Green Infra
       have been cited in the report as some of the IPPs which received funding from investors
       such as IDFC PE, Axis PE, Baring PE and Global Environment Fund.

   -   With the proposed commissioning of a 50 MW tidal power project off the coast of
       Gujarat in 2013, India is ready to place its first ―seamark‖ that will be a first for Asia as
       well. London-based marine energy developer Atlantis Resources Corporation, along with
       Gujarat Power Corporation Ltd, has signed a memorandum of understanding (MoU) with
       the Gujarat government to start this project.

Corporate Investments

      State-owned Gujarat Alkalies and Chemicals Limited (GACL) has entered into an
       agreement with a Germany-based specialty chemicals maker, Evonik Industries for
       setting up a multi-million Hydrogen Peroxide and Propylene Oxide (HPPO) project at
       Dahej in Gujarat. This project would be based on an innovative, environment friendly
       HPPO technology.
      Overseas Private Investment Corporation (OPIC), an agency of the US Government, has
       signed an agreement with Azure Power to fund its 15 MW solar photovoltaic (PV)
       project in Gujarat. The investment in the US$ 40 million project will be led by OPIC.
      Toshiba JSW Turbine & Generator Pvt Ltd said its manufacturing facility for super-
       critical steam turbines and generators would go on stream in the second half of 2011.

Corporate Initiatives

      The world‘s first facility to manufacture carbon foam batteries will be set up at Bavla
       near Ahmedabad. Firefly Energy India is planning to build a plant to produce carbon
       foam batteries at an investment of US$ 28 million, the company‘s chairman Mukesh
       Bhandari said.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 21
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      State Bank of India (SBI), the country‘s largest lender, has become a signatory investor in
       the Carbon Disclosure Project (CDP), a collaboration of over 550 global institutional
       investors with assets under management of US$ 71 trillion.

CDP is an independent not-for-profit organisation, holding the largest database of primary
corporate climate change information in the world. Over 3,000 organsations across the world‘s
largest economies measure and disclose their greenhouse gas emissions and climate change
strategies through CDP. These disclosures aid them in setting reduction targets and make
performance improvements.

      Switzerland-based Satarem AG has signed an agreement for joint venture with SA India,
       erstwhile promoters of Crocodile brand in India, to enter the waste management and
       renewable energy business along with consultancy services for cement manufacturers in
       the country.
      State-run power company NTPC has set up a joint venture with the Asian Development
       Bank and Japan‘s Kyuden International Corporation to develop renewable energy
       projects with a capacity of 500 MW over the next three years.
      Hyderabad based Premier Solar has signed a contract for import of 200,000 thin film
       modules — which can provide for generation of 20 MW — from German manufacturer
       Schott Solar. Of these, Premier would receive 10 MW worth modules in August 2011,
       with the rest to be taken in 2012.
      Wind turbine manufacturer KENERSYS, a part of the Kalyani Group, has set up a new
       facility at Baramati near Pune with an investment of US$ 11.18 million. The new plant
       will manufacture large multi-megawatt turbines, with 2 MW rated power. The company
       will manufacture 250 turbines every year, with a total power generation capacity of 500
      IFC has announced corporate equity financing up to US$15 million to Andhra Pradesh-
       based Shalivahana Green Energy Limited (SGEL), a privately owned entity producing
       power based on biomass, to fund the latter's pipeline projects.

National Solar Mission

The Ministry of New and Renewable Energy (MNRE) has informed that the progress in
implementing the Jawaharlal Nehru National Solar Mission is satisfactory and according to
schedule. The Ministry has sanctioned 802 MW capacities of grid-connected solar projects and
36 MW of off-grid solar projects. In addition, six major research projects include setting up of
National Centre for Photovoltaic Research and Education at IIT-Bombay were also approved.

Clean Energy and Technology

      Recently, Cerebra Integrated Technologies has announced the launch of India's largest e-
       waste recycling facility in Bangalore. With this, Cerebra has begun the first phase of its
       e-waste management initiative that is separation of metals, non-metals, and processing
       (crushing) of PCB in the Mobile Shredder. Cerebra plans to send the crushed PCBs to
       Singapore for further processing and raw material extraction.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                              Page 22
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      The Bureau of Energy Efficiency (BEE) is looking to create a demand for energy
       efficient, products, goods and services awareness. The Bureau has set up an energy
       efficiency financing platform (EEFP), which aims at ensuring availability of finance at
       reasonable rates for energy efficiency project implementation and its expansion.
      Finnish clean technology companies, which have joined forces within a common
       CleanTech Finland brand, see significant opportunities for Indian companies to help the
       country achieve its target of producing 38 per cent of energy through renewable sources
       by 2020.

Government Initiatives

The Union Budget of 2011-12 announcements clearly indicate Indian government‘s decisive
plans to promote and develop clean energy and technologies, which will advance India‘s Clean
Revolution. Key points from the Finance Minister‘s speech included:

      Planned launch of National Mission in hybrid and electric vehicles
      Allocations of US$ 89.41 million from National Clean Energy fund for speeding up The
       National Mission for a Green India.
      The budget of the Environment Ministry increased by around US$ 67.1 million.
      Extension of Tax holiday for the power sector by one year
      A budgetary provision (2011-12) of US$ 56.6 million has been made for research and
       development in new and renewable energy for the first four years of the 11th Five Year
       Plan of the MNRE.
      The government would dole out US$ 335 million over the next two years to banks and
       finance companies to lend money to solar energy projects at a generous 5 per cent interest
       rate, top government official said. The money would be lent to small solar projects
       adding up to 200 MW by companies like Sidbi, Nabard and National Housing Bank.
       These lenders would be provided interest-free loans by IREDA.
      IFC will provide up to US$ 15 million in corporate equity financing to Simran Wind
       Project Private Limited (Simran), a privately-owned entity which is into wind-based
       power production. The company will use the money to finance its pipeline projects worth
       US$ 40 million in Tamil Nadu.
      Punjab government has initiated an ambitious clean energy project to generate 1,500 MW
       power from the ‗run of the canal turbines‘. The Punjab Energy Development Agency
       (Peda) has already developed an indigenous prototype of the turbines.
      To facilitate fast track exploration of shale gas, the Ministry for Petroleum and Natural
       Gas expects the process of carving out suitable blocks to be completed by April 2011,
       which would allow floating of the first round of auctions of shale gas blocks in August
      Solairedirect Energy India is in talks with the Gujarat government to set up a 20 MW
       plant at the Solar Energy Park in Kutch at an estimated cost of US$ 67.1 million.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 23
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After a decade of efforts, China has achieved remarkable progress in sustainable development.

- Economic development. China has maintained sustained, rapid and healthy growth of its
economy. As a result, the country's overall national strength has built up considerably, with its
GDP topping 1 trillion Yuan(RMB). China today is the largest recipient of direct foreign
investment in the developing world and the sixth largest trading power in the world. People's
livelihood and quality of life have witnessed significant improvement. Furthermore, economic
growth is increasingly based on more sustainable ways, relying on enhanced efficiency rather
than heavy input of resources. The economic structure is being gradually optimized.

- Social development. The trend of excessive population growth has been checked; science,
technology and education have made positive headway; and remarkable progress has also been
made in social security, poverty eradication, disaster relief and prevention, medical care, and
narrowing the regional gap in development.
- Ecological conservation, environmental protection and rational exploitation of resources. The
central government has greatly increased spending in ecological conservation and environmental
protection; the pattern of energy consumption is being gradually optimized; measures for
controlling water pollution have been stepped up for key water systems; breakthrough progress
has been made in curbing air pollution; comprehensive use of resources has significantly
improved; and the ecological environment has improved to some extend thanks to retiring fragile
farmlands and switching them to conservation purposes, such as planting trees and grass, and
expanding floodwater storage.

- Capacity-building for sustainable development. The strategy of sustainable development has
been incorporated into various programs and plans by central government ministries and local
governments. Public awareness of sustainable development has markedly increased, and relevant
laws and regulations have been enacted and enforced.
However, China still faces quite a few challenges in implementing sustainable development.

- The greatest challenges are: a conflict between rapid economic growth and voluminous
consumption of resources and ecological deterioration; social development lagging behind
economic development; widening disparities between different regions in social and economic
development; constraints posed by a large population and scarce resources; and inconsistencies

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 24
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between some existing laws, regulations and policies and actual needs for sustainable

- Major problems urgently needed to be resolved include: the comprehensive quality of the
population needs improvement; aging of the population is accelerating; the social security system
is inadequate; the pressure on employment is heavy; the economic structure is less than rational;
the operation system of the market economy needs to be improved; clean energy has a low share
in the total energy consumption; infrastructure is underdeveloped; the information infrastructure
for the national economy is of a low level; a serious waste exists in the exploitation of natural
resources; environmental pollution is serious; ecological deterioration is still not curbed;
legislation on resources management and environmental protection needs improvement.
With increasing globalization of the world economy, the international community is enhancing
its understanding of and stepping up its efforts for sustainable development and common
development. China should, after its accession to the WTO, give full play to the advantage of its
system of socialist market economy. In particular, China should give full play to the role of
government in organizing and coordinating the implementation of the sustainable development
strategy and properly handle the relationship of economic globalization and sustainable
development. China should also, based on the achievements of the Johannesburg world summit
on sustainable development, actively participate in international cooperation, and safeguard the
country's fundamental interests, including its economic and ecological security.


Background Information

Since the United Nations Conference on Environment and Development in Rio (1992),
sustainable development has remained elusive for many African countries. Poverty is still a
major challenge, as 41% of the Sub-Sahara African population (or roughly 300 million people)
were living on one dollar a day or less in 2004. Most countries on the continent have not
managed to reap fully the benefits of globalization. Besides, multiple armed conflicts,
insufficient access to education and widespread pandemics, such as HIV and malaria, have
undermined Africa's efforts to achieve sustainable development. The region is also challenged
by serious environmental threats, including desertification, deforestation and climate change.

The New Partnership for Africa's Development

Over the last years, African countries have been strongly committed to mounting an effective
response to these threats and challenges. The New Partnership for Africa's Development
(NEPAD), which was launched by African heads of state in 2001, provides a framework for

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 25
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sustainable development to be shared by all Africa's people. It emphasizes the role of
partnerships among African countries themselves and between them and the international
community, and proposes a shared and common vision to eradicate poverty through sustained
economic growth and sustainable development.

African Governments

African governments have also reinforced the pace of regional integration through the
rationalization of existing regional economic communities. They have increased the power of
theAfrican Union, especially in the field of security and peace management.

Support by the International Community

These efforts have been supported by the international community, with financial and technical
contributions to regional communities and specific initiatives to foster African development.
Thus, the Heavily Indebted and Poor Countries (HIPC) program was initiated by
the International Monetary Fund and the World Bank in 1996, providing debt relief and low-
interest loans to reduce external debt repayments to sustainable levels. Nominal debt service
relief under HIPC to the 29 countries that have reached their decision points has been estimated
to amount to about US$62 billion, a significant share of which benefited Sub-Saharan African
countries. In 2001, the World Trade Organization member states launched the Development
Round of negotiations which, if concluded with decisive measures to liberalize agricultural
trade, could provide significant benefits to some African countries. The 2008 Qatar meeting to
review progress with the 2002 Monterrey Consensus on Financing for Development will provide
an opportunity for the international community to refocus on the financing needs of African
countries if they are to make significant progress towards meeting the Millennium Development

Africa: A Priority Area for United Nations’ Activities

Africa is a priority area for United Nations‘ activities, as illustrated by the establishment of
the Office of the Special Adviser on Africa (OSAA) by the Secretary-General on 1 May 2003
and the reference to Africa‘s sustainable development as a cross-cutting issue in the
Johannesburg Plan of Implementation (see chapter VIII) which emerged from the World Summit
on Sustainable Development in 2002. The special needs of the African continent have been
systematically identified there.

The strategic importance of international and regional cooperation has been stressed, especially
in integrating markets for goods and services, building cross-border infrastructure, developing
new crop varieties and other agricultural technologies for African growing conditions, managing
shared water and other natural resources, tackling trans boundary pollution, and addressing
climate change, including through adaptation.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                            Page 26
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    Australia made a constructive contribution to the negotiations, achieving positive outcomes in
    our particular interest areas of oceans, trade, governance and energy. Aiming for practical
    solutions rather than just words, our delegation worked closely with both developed countries
    and developing countries through the Group of 77 and China, to address these issues in a way
    that would achieve real results.
    The national statements of heads of state and government and ministers focussed on poverty,
    food, water, sanitation, affordable energy, climate change, HIV/AIDS, and the importance of
    trade liberalization, especially subsidy reform, as a means of generating the resource flows
    needed for sustainable development.
    Australia was very pleased with the success of our neighbours, the Pacific Island Countries
    (PICs), in focussing world attention on issues of concern to them, particularly the issue of
    sustainable oceans management. The inclusion of a chapter in the Plan of Implementation on
    small island developing states was a significant outcome for the PICs and was strongly endorsed
    by Australia.
    Significant outcomes for Australia included:
   Inclusion in the plan of implementation of a section that recognises oceans as an essential
    component of the Earth's ecosystem and sets an ambitious forward agenda for conserving marine
    biodiversity, protecting vulnerable areas such as coral reefs and wetlands, reducing marine
    pollution and eliminating illegal fishing;
   A hard-fought section on energy that achieves a balance between issues of access to energy for
    the poor and encouragement for greater use of renewables; and
   Reinforcement of outcomes from the international meetings on trade and finance at Doha and
    Monterrey, and strong support for the contribution of trade liberalization to sustainable
    development and poverty alleviation (with agricultural and environmentally damaging subsidies
    gaining their share of attention in that context).
    On globalization, Australia fought hard and largely successfully to gain recognition that greater
    openness and integration of trade and investment is fundamental to generating the resources
    necessary to achieve poverty reduction and the internationally agreed development goals. Good
    national level governance is also endorsed in the plan as an essential underpinning for
    sustainable development.

    BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 27
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BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                   Page 28
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Conformity is the act of matching attitudes, beliefs, and behaviours to group norms.Norms are
implicit rules shared by a group of individuals, that guide their interactions with others and
among society or social group. This tendency to conform occurs in small groups and/or society
as a whole, and may result from subtle unconscious influences, or direct and overt social
pressure. Conformity can occur in the presence of others, or when an individual is alone. For
example, people tend to follow social norms when eating or watching television, even when

People often conform from a desire for security within a group—typically a group of a similar
age, culture, religion, or educational status. This is often referred to as group think: a particular
way of thinking individuals engage in that succeeds realistic appraisal of other courses of action.
Unwillingness to conform carries the risk of social rejection. Conformity is often associated with
adolescence and youth culture, but strongly affects humans of all ages.

Although peer pressure may manifest negatively, conformity can have good or bad effects
depending on the situation. Driving on the correct side of the road could be seen as beneficial
conformity. Conformity influences formation and maintenance of social norms, and helps
societies function smoothly and predictably via the self-elimination of behaviors seen as contrary
to unwritten rules. In this sense it can be perceived as (though not proven to be) a positive force
that prevents acts that are perceptually disruptive or dangerous.

As conformity is a group phenomenon, factors such as group size, unanimity, cohesion, status,
prior commitment, and public opinion help determine the level of conformity an individual
Berry studied two different populations: the Temne (collectivists) and the Inuits (individualists)
and found that the Temne conformed more than the Inuits when exposed to a conformity task.

Bond and Smith compared, (1996) 134 studies in a meta-analysis and found that Japan and
Brazil were two nations that conformed a lot whereas Europe and the United States of America
did not as much.
Societal norms often establish gender differences. There are differences in the way men and
women conform to social influence. Social psychologists, Alice Eagly and Linda Carli

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                 Page 29
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performed a meta-analysis of 148 studies of influenceability. They found that women are more
persuadable and more conforming than men in group pressure situations that involve
surveillance. In situations not involving surveillance, women are less likely to conform. Eagly
has proposed that this sex difference may be due to different sex roles in society. Women are
generally taught to be more agreeable whereas men are taught to be more independent.

The composition of the group plays a role in conformity as well. In a study by Reitan and Shaw,
it was found that men and women conformed more when there were participants of both sexes
involved versus participants of the same sex. Subjects in the groups with both sexes were more
apprehensive when there was a discrepancy amongst group members, and thus the subjects
reported that they doubted their own judgments. Sistrunk and McDavid made the hypothesis
that women conformed more because of a methodological bias. They argued that because
stereotypes used in studies are generally male ones (sports, cars..) more than female ones
(cooking, fashion..), women are feeling uncertain and conformed more, which was confirmed by
their results.
Size of the group
Milgram and his colleagues found that if one individual stops and stares at the sky, only 4% of
the people would stop as well and 40% would look at the sky, whereas if fifteen confederates do
it, those numbers become respectively 40% and 90%.

While conformity is a fundamental human practice, perceptions and levels of conformity differ
between cultures. In the
western world, particularly in the United States, we
lionize the importance of independence and
individualism. Our country began as a rebellion, and the
American frontier kept the dream alive. It was said to
create freedom by "breaking the bonds of custom,
offering new experiences, and calling out new
institutions and activities." (Turner) Now we
adore Lady Gaga and her peers for their nonconformist
attitudes. But are we truly more nonconformists than other cultures? On one hand, we are the
culture that produces large amounts of popular music and movies consumed by other countries,
but on the other hand, these songs and movies tend to all seem to follow the same formula. Our
culture is full of these contradictions. We must look to research for the truth.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                           Page 30
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Resistance to Cultural Conformity
The United States has been dubbed the ―melting pot‖ because it has been associated with the
assimilation of many cultures to that of a homogenized, American culture. Groups that initially
regarded themselves as independent entities have found it increasingly difficult to practice their
beliefs, especially when cross-cultural interactions precipitate conflict. However, despite
pressures to conform, the Ojibwe and Hmong cultures have been remarkably resilient. Their
refusal to conform to the melting pot metaphor can be attributed to conflicts with the state and its
inability to incorporate their cultural belief systems. Therefore, for the Hmong and Ojibwe, as
presented in Larry Nesper‘s The Walleye War and Anne Fadiman‘s The Spirit Catches You and
You Fall Down, conflict becomes a culturally constructive expression.

Violating was an integral aspect of Ojibwe culture, and has also played a very important role in
the Ojibwe‘s refusal to conform to the melting pot metaphor. Violating was regarded as an
integral element to Ojibwe identity, and its practice was a significant transition to manhood for
Indian boys. Therefore, threats of forcing conformity onto the Ojibwe people were opposed and
this opposition actually facilitated stronger cultural distinctness. Nesper related how Ojibwe men
exhibited defiance towards the wardens by hiding on the seat floors of non-Indian friends so that
they could continue to hunt during the offseason, or how they led wardens astray so Ojibwe
fishermen could escape with a bounty of fish.1Furthermore, expressions of conflict were
employed to coincide with Ojibwe cultural belief systems. Whereas monotheistic cultures view
nature as a domain that reproduces in spite of human appropriation, the Ojibwe belief
emphasizes the reciprocal exchange with the spirit world.

Why does indian culture encourage so much conformity?
Because parents and stuff were born in the days where poverty is nearly everywhere, they want
their children to succeed. Doctors and engineers in those days are considered to be GOOD jobs,
prestige, wealth etc, even now it still is. But now in the 21st century India is a booming country,
more and more people are joining the middle class rank and are now afford to even have
luxuries, but to the older generations they will stick to their ancient way of thinking. It will be the
same for most of us as well, our way of thinking will be completely different to our future


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                  Page 31
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Culture shock is the personal disorientation a person may feel when experiencing an unfamiliar
way of life due to immigration or a visit to a new country, or to a move between social

One of the most common causes of culture shock involves individuals in a foreign country.
Culture shock can be described as consisting of at least one of four distinct phases: Honeymoon,
Negotiation, Adjustment, and Mastery. There is no true way to entirely prevent culture shock, as
individuals in any society are personally affected by cultural contrasts differently.

Honeymoon phase
During this period, the differences between the old and new culture are seen in a romantic light.
For example, in moving to a new country, an individual might love the new food, the pace of
life, and the locals' habits. During the first few weeks, most people are fascinated by the new
culture. They associate with nationals who speak their language, and who are polite to the

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 32
                              BUSINESS ENVIRONMENT

foreigners. This period is full of observations and new discoveries. Like most honeymoon
periods, this stage eventually ends.

Negotiation phase
After some time (usually around three months, depending on the individual), differences between
the old and new culture become apparent and may create anxiety. Excitement may eventually
give way to unpleasant feelings of frustration and anger as one continues to experience
unfavorable events that may be perceived as strange and offensive to one's cultural attitude.
Language barriers, stark differences in public hygiene, traffic safety, food accessibility and
quality may heighten the sense of disconnection from the surroundings.

While being transferred into a different environment puts special pressure on communication
skills, there are practical difficulties to overcome, such as circadian rhythm disruption that often
leads toinsomnia and daylight drowsiness; adaptation of gut flora to different bacteria levels and
concentrations in food and water; difficulty in seeking treatment for illness, as medicines may
have different names from the native country's and the same active ingredients might be hard to

Still, the most important change in the period is communication: People adjusting to a new
culture often feel lonely and homesick because they are not yet used to the new environment and
meet people with whom they are not familiar every day. The language barrier may become a
major obstacle in creating new relationships: special attention must be paid to one's and others'

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 33
                             BUSINESS ENVIRONMENT

culture-specificbody language signs, linguistic faux pas, conversation tone, linguistic nuances
and customs, and false friends.

In the case of students studying abroad, some develop additional symptoms of loneliness that
ultimately affect their lifestyles as a whole. Due to the strain of living in a different country
without parental support, international students often feel anxious and feel more pressure while
adjusting to new cultures—even more so when the cultural distances are wide, as patterns
of logic and speech are different and a special emphasis is put on rhetoric.
Adjustment phase
Again, after some time (usually 6 to 12 months), one grows accustomed to the new culture and
develops routines. One knows what to expect in most situations and the host country no longer
feels all that new. One becomes concerned with basic living again, and things become more
"normal". One starts to develop problem-solving skills for dealing with the culture and begins to
accept the culture's ways with a positive attitude. The culture begins to make sense, and negative
reactions and responses to the culture are reduced.
Mastery phase
In the mastery stage assignees are able to participate fully and comfortably in the host culture.
Mastery does not mean total conversion; people often keep many traits from their earlier culture,
such as accents and languages. It is often referred to as the biculturalism stage.

Reverse Culture Shock

Reverse Culture Shock (―Re-entry Shock‖ or ―own culture shock‖ may take place — returning
to one's home culture after growing accustomed to a new one can produce the same effects as
described above. This results from the psychosomatic and psychological consequences of the
readjustment process to the primary culture.The affected person often finds this more surprising
and difficult to deal with than the original culture shock. This phenomenon, the reactions that
members of the re-entered culture exhibit toward the re-entrant, and the inevitability of the two
are encapsulated in the saying "you can't go home again‖

There are three basic outcomes of the Adjustment Phase:

   Some people find it impossible to accept the foreign culture and integrate. They isolate
    themselves from the host country's environment, which they come to perceive as hostile,
BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                              Page 34
                               BUSINESS ENVIRONMENT

    withdraw into a "ghetto" and see return to their own culture as the only way out. These
    "Rejectors" also have the greatest problems re-integrating back home after return.
   Some people integrate fully and take on all parts of the host culture while losing their
    original identity. They normally remain in the host country forever. This group is sometimes
    known as "Adopters".
   Some people manage to adapt to the aspects of the host culture they see as positive, while
    keeping some of their own and creating their unique blend. They have no major problems
    returning home or relocating elsewhere. This group can be thought to be
    somewhat cosmopolitan.
Culture shock has many different effects, time spans, and degrees of severity. Many people are
handicapped by its presence and do not recognize what is bothering them.

Culture shock is a subcategory of a more universal construct called transition shock. Transition
shock is a state of loss and disorientation predicated by a change in one's familiar environment
which requires adjustment. There are many symptoms of transition shock, some which include:

   Excessive concern over cleanliness and health
   Feelings of helplessness and withdrawal
   Irritability
   Anger
   Glazed stare
   Desire for home and old friends
   Physiological stress reactions
   Homesickness
   Boredom
   Withdrawal
   Getting "stuck" on one thing
   Suicidal or fatalistic thoughts
   Excessive sleep
   Compulsive eating/drinking/weight gain
   Stereotyping host nationals
   Hostility towards host nationals

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                            Page 35
                              BUSINESS ENVIRONMENT


    1. Macionis, John, and Linda Gerber. "Chapter 3 - Culture." Sociology. 7th edition ed.
       Toronto, ON: Pearson Canada Inc., 2010. 54. Print.
    2. ^ Pedersen, Paul. The Five Stages of Culture Shock: Critical Incidents Around the
       Worldd. Contributions in psychology, no. 25. Westport, Conn: Greenwood Press, 1995.
       Communication 5.1 (n.d.): 1-18. SocINDEX with Full Text. EBSCO.29 Sept.2009.web.
    4. ^ Oberg, Dr. Lalervo. "Culture Shock and the problem of Adjustment to the new cultural
       environments". World Wide Classroom Consortium for International Education &
       Multicultural studies. 29 Sept 2009.
    5. ^ Mavrides, Gregory PhD ―Culture Shock and Clinical Depression.‖ Foreign Teachers
       Guide to Living and Working in China. Middle Kingdom Life, 2009. Web. 29 Sept.
    6. ^ Martin Woesler, A new model of intercultural communication – critically reviewing,
       combining and further developing the basic models of Permutter, Yoshikawa, Hall,
       Hofstede, Thomas, Hallpike, and the social-constructivism, Bochum/Berlin 2009, book
       series Comparative Cultural Sciences vol. 1

Recent developments and events point to the problem of social and cultural integration in
changing societies: The emergence of fundamentalist groups and transnational or rather regional
movements, the riots in Paris and Sydney, the overwhelming rejection of the European
constitution, or ethnic and regional conflicts such as in Sri Lanka or Sudan. They lead to
discussions about (national) identity, about shared standards and values, and about cultural
backgrounds. This illustrates the urgency of wide-ranging scientific research into cultural
dynamics. Knowledge about the processes of cultural change is the key to solving a number of
urgent social problems.
The focus of Cultural Dynamics lies in the formation of cultural identity as a dynamic social
process which is crucial for the (re)definition of the identities of individuals, groups and nations.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                 Page 36
                               BUSINESS ENVIRONMENT

Insights into the complex process of forming cultural identity in the Western and non-Western
world will make a significant contribution to the cohesion of society. Principal research lines in
the intended programme are citizenship and identity; creative design and innovation;
intermediality; popular culture; and canon formation. Cultural Dynamics is a new theme that is
being developed by the NWO research divisions for the Humanities and Social Sciences and the
Netherlands Foundation for the Advancement of Tropical Research (WOTRO). This programme
links up with the themes of TNO and the GTIs as well as the strategic agenda of the government
Elements of Culture
International marketers must design products, distribution systems, and promotional programs
with due consideration to culture, which was defined as including five elements:
1.       Cultural values
2.       Rituals
3.       Symbols
4.       Beliefs, and
5.       Thought processes

Factual versus Interpretive Cultural Knowledge
There are two kinds of knowledge about cultures both of which are necessary
Factual knowledge is usually obvious and must be learned, e.g., different meanings of colors,
and different tastes; it deals with a facts about a culture
Interpretive knowledge is the ability to understand and appreciate the nuances of different
cultural traits and patterns, e.g., the meaning of time, and attitudes toward people
Interpretive knowledge requires a degree of insight It is dependent on past experience for
interpretation It is prone to misinterpretation if one‘s SRC is used

Cultural Factors of various countries
    Never touch the head of a Thai or pass an object over it
      The head is considered sacred in Thailand.
         Avoid using triangular shapes in Hong Kong, Korea and Taiwan. It is considered a
          negative shape.
         The number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has
          a magical connotation in Benin.
         The number 10 is bad luck in Korea.
          The number 4 means death in Japan.
         Red represents witchcraft and death in many African countries.
         Red is a positive color in Denmark.

Innovations: functional or dysfunctional.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                              Page 37
                              BUSINESS ENVIRONMENT

The consequences of diffusion of an innovation may be functional or dysfunctional depending on
whether the effects of the social system are desirable.
 A dysfunctional innovation is one where the effects within the social system are undesirable.
A functional innovation is one where the effects within the social system are desirable (ie. there
would be no dysfunctional consequences).
Eg. The introduction of condensed milk to the diet of babies in underdeveloped countries where
protein deficiency is a health problem. On the surface it would appear that the consequences of
the addition of condensed milk to the diet would result in better nutrition and health, stronger and
faster growth, etc. However, evidence tends to indicate that in at least one situation there were
dysfunctional consequences of the innovation. Instead of health benefits, a substantial increase in
dysentery, diarrhea, and a high infant mortality rate resulted.

Cultural Dynamics and Emotions Network

CDEN - The Cultural Dynamics and Emotions Network
CDEN was set up in March 2007 with the aim to stimulate international and interdisciplinary
research on cultural dynamics and emotions. The Network intends to build on recent debates in
the fields of globalisation and emotion studies that investigate emotional processes in a world of

Objectives of the CDEN Website
 to offer up-to-date information about the activities of CDEN,
 to serve as a platform for global interdisciplinary debate about cultural production and
 to be a point of contact for lecturers in the School of History and Anthropology (Queens
   University Belfast), MOP Vaishnav College for women and other universities to exchange
   lecture material and facilitate interaction and cooperation between students
   in Belfast, Chennai and other places,
 to be a point of contact for lecturers and students in universities elsewhere,
 to create a bibliography with relevant references that can be used for teaching and research
 to create a virtual visual library with images and film footage that can be used for teaching
   and research purposes,
 to stimulate communication between students who are involved in the production of text,
   image, and sound, and/or interested in academic debates about cultural processes and
   emotional dynamics.

Further objectives of CDEN
 to explore funding possibilities for teaching exchanges
 to explore funding possibilities for student exchanges
 to explore funding possibilities for postgraduate and postdoctoral research
 to explore funding possibilities for talks and conferences
 to explore funding possibilities for exhibitions, performances and events

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 38
                             BUSINESS ENVIRONMENT


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                           Page 39
                              BUSINESS ENVIRONMENT

Different organisations have different cultures. Organisations build up their own cultures
through a mixture of history and structure. A culture can help to build up a sense of identity e.g.
who we are, what we stand for and what we do, the way we do things around here. A company
that is based on family values may have the following impacts:

      Feel valued
      Feel respected
      Views listened too
      Fun
      Interesting
      Good working conditions

      Loyal employees
      Happy employees
      Better production
      Less employee sick time
      More customers
      Liked in the community

Ben and Jerry‘s culture and values are very much focused around its responsibility to the
environment. They believe that it is important to lead with their ideals about sourcing their
ingredients, supporting other organisations, and helping the environment. Their mission
statement is divided into three sections as shown below:

Product Mission
To make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a
continued commitment to incorporating wholesome, natural ingredients and promoting business
practices that respect the Earth and the Environment.

Economic Mission
To operate the Company on a sustainable financial basis of profitable growth, increasing value
for our stakeholders & expanding opportunities for development and career growth for our

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                                Page 40
                             BUSINESS ENVIRONMENT

Social Mission
To operate the company in a way that actively recognizes the central role that business plays in
society by initiating innovative ways to improve the quality of life locally, nationally &

Culture is about how the organisation organises itself, its rules, procedures and beliefs make up
the culture of the company. I have found out abut six types of organisational cultures.

Power Culture
Control is the key element in a power culture. These are normally found in small or medium
sized organisations. Decisions are usually taken by one key person in the organisation who likes
the control and power. This is important as you need someone to take overall control but they
may not listen to staff and the staff may become de-motivated and not feel valued. This in turn
can lead to high turn over of staff.

Role Culture
This is where organisations are slit up into different functions and each person has a particular
role. This means that those people can specialise in their role. This means that productivity
should increase. It is a very logical way to organise a large organisation.

Task Culture
This is where teams within an organisation complete given tasks. Staff can feel motivated
because they are in charge of that task which can make them feel valued. NASA has teams
which oversee particular missions based on this concept.

Person culture
The focus of this culture is the person or individual aim of the organisation. This is commonly
found in charities or non profit organisations. Forward and backward looking cultures These are
found in organisation where they listen to staff and customer‘s ideas and that have an
entrepreneurial spirit. They are continually looking forward and can be risk takers. Dyson could
be said to have this type of culture. In contrast Marks and Spencers could be thought of
backward thinking as they are slow to change, they do not take risks as they could be worried
about their business not doing well.
At Schindler, we are convinced that staying successful in the international business environment
requires more than just striving for economic success.

BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                             Page 41
                              BUSINESS ENVIRONMENT

We must also accept social responsibility and demonstrate environmental awareness. We at
Schindler live and practice our company values. They serve as the basis for our management
style and business practices.

More than 40,000 Schindler employees work around the clock to serve 900 million people using
our elevators and escalators every day. Safety for each one of our customers and employees is
first and foremost.

Create Value for the Customer
As a service company, a strong customer orientation must be the basis for design and delivery of
all products and service offerings.

Commitment to the People Development
Only the right people can create exceptional value for our customers. We develop our employees'
skills to effectively work with our customers in understanding their needs and how they can get
the most value from our products and services.
Schindler strives to be the preferred employer in its industry and all countries of the world where
it does business.
We promote diversity and equal opportunity in hiring and developing our people.

Visible Leadership
Schindler empowers its people at all levels to make decisions and develop skills necessary to be
leaders who can shape the course of the company's direction.

All our employees, regardless of position, function or location adhere to the Schindler Code of


BY: MILAN C. PADARIYA, CMS-GANPAT UNIVERSITY                                               Page 42

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