Process of Business Research Methods

The steps of basic and applied research are the following: 1. OBSERVATION (Broad Area of Research Interest Identified) – Identification of broad problem area through the process of observing and focusing on the situation. Any area/situation that has got identified for improvement can be classified as a broad problem area. 2. PRELIMINARY DATA GATHERING (Interviewing Literature Survey)- Once the broad problem area has got identified, the same can be narrowed down to specific issues for investigation through preliminary data gathering. . PROBLEM DEFINATION (Research Problem Delineated)- It is clear , precise and succinct statement of the question or issue that is to be investigated with the goal of finding an answer or solution. 4. THEORETICAL FRAMEWORK (Variables clearly identified and labeled)- A theoretical framework is a conceptual model of how one theorizes or makes logical sense of the relationships among the several factors that have been identified as important to the pro blem. It is a logically developed, described and elaborated network of associations among the variables( dependent/criterion , independent/predictor, moderating , intervening) deemed relevant to problem definition. 5. GENERATION OF HYPOTHESIS- After identification of important variables and establishing the relationships amongst them, formulating of testable statements (to test the relationships) is called hypothesis development. The null hypothesis states a definitive, exact relationship between two variables. The hypothesis is tested scientifically through appropriate statistical analyses. 6. SCIENTIFIC RESEARCH DESIGN – Design of the research in a way that requisite data can be gathered and analyzed to arrive at a solution. Experimental designs need to be done to examine the possible cause and effects on the various variables. 7. DATA COLLECTION, ANALYSIS AND INTERPRETATION: For data collection, sources of data (primary or secondary) need to be identified first. If secondary sources, then data is already available for analysis. If primary data is required, sources of data can be focus groups, panels and unobtrusive sources. Next will be the data collection methods, which can be through interviewing, questionnaires, observational studies, projective tests. Various sampling techniques can be used in structuring the samples for example simple random sampling, Stratified random sampling , systematic sampling etc. After the data is gathered, then the data is made ready for analysis by editing, coding, categorizing data and entering data in computer system for further analysis. . Data Analysis – Basic objectives of data analysis is getting the feel of the data, testing the goodness of data for reliability, validity and for hypothesis testing. Once the various statistical tests like t-test, Pearson correlations matrix etc. are done on the data, interpretations are being drawn from the respective tests. Sometimes software like SAS , SPSS are getting used worldwide to do the data analysis. 8. DEDUCTION (Hypothesis substantiated? research questions answered? ) – It is a process of arriving at conclusions by interpreting the meaning of the results of the data analysis. It validates the hypothesis or research questions. 9. REPORT WRITING – After the deduction a detailed report is written with the definite title , table of contents and the various steps with acknowledgements , summary etc. 10. REPORT PRESENTATION:- After the preparation of the report , main summary along with the findings is sometimes required to be presented to some authorized committee. 11. MANAGERIAL DECISION MAKING: After the written and oral presentation, managers required to take decisions based on the reports. Though this particular step is not strictly part of the BRM process , however this step is important to complete the cycle which started with the observation of the problem and the problem getting addressed to by the managerial decision.

High School Cliques Essay

The school environment causes natural polarization of peoples with similar backgrounds, attitudes, or any other factors that would form certain peer groups, or ‘cliques’. This is particularly observable in the High School setting, as the predominant social groups are composed of adolescents who are beginning their socialization process. This socialization forms various groupings or factions that are highly noticeable in High School. The modern media, who continually builds on and establish the perceived cliques and groups in movies, shows, and other media venues, is repeatedly echoing the reality. This has created stereotypes of High School cliques, such as: (1) the popular group, (2) athletes, (3) nerds, (4) racial segregation, (5) pop-culture groups like rockers and hip-hop, (6) outcasts, and (7) other groups. The converging elements of a particular faction can be varied and numerous. These cliques can be students who eat together, or hang out with each other after class. Racial profile can also be a strong factor, as with the social class and background. Even personal preference and culture can bring together different kinds of peoples. High school youth converge because of the reason that they find something in common with the group that they are with. The first clique in High School is the popular student. Usually they are the student leaders or even cheerleaders and well-known members of the student body. They can be socially advantaged as they are driving newer cars or organizing fancier parties. They can be part of the group on the merit that they are simply popular in the batch. These students are usually the first ones remembered and recalled in reunions or gatherings. They are seen as role models, or at the other extreme, a source of jealousy and hatred. The second group, the athletes, can overlap with this first group, because basketball and football players can be highly popular in High School. Another High School clique are the nerds, who are the most participative in class or gets the highest grades in any subject. They would congregate in the canteen and converse about math or politics or any other academic topic. They are stereotyped as being shy and wearing big glasses, and are very grade conscious and studious. Apart from this group, other cliques can be divided according to culture lines, like rockers or hip-hops. They are usually secluded and non-conventionalists, and would gather on their own parties and gatherings. Another notable group are outcasts, who are usually the but of jokes, and would have severe emotional and psychological problems. Some would also note that racial background would be a strong determinant in formation of cliques. Asians or African Americans or Caucasians would most likely hang-out with each other, which does not imply discrimination, but merely cultural identification. They also form different and very distinguishable cliques in High School. High School is the stage of life wherein social interaction is at its most dynamic, as young adolescents are placed in a social environment outside their homes, and forced to polarize into different groups. Although these High School cliques can be regarded as mere stereotypes that may not always necessary be apparent in a social context, there is a ring of truth in the observations. Since the school is a hodgepodge of different backgrounds and cultures, it is natural for the youth to find people they are familiar and comfortable with. This reality, coupled with media hype, reinforces the perception that different High School cliques do exist.

Cfa Study Outlines Essay Example for Free

Cfa Study Outlines Essay   CFA Curriculum/Blue box examples/EOC problems Month 5: Schweser Slides=>Take practice exam (8X) BOOT CAMP strongly recommended (Creighton University provides an exceptional LIII Boot Camp—Marc Lefebvre teaches the course and has put together an impressive strategic outline) Question Format – Morning: Essay ? Focus on writing key words (study previous actual CFA exam answers and learn what these key words are—just remember that the CFA guideline answers are also considered â€Å"perfect† so don’t think you must include everything stated) ? The morning essay questions are the least correlated with questions from the actual CFA curriculum; therefore, it is absolutely necessary to study past actual CFA Level III exams and familiarize yourself with how they’ll ask questions—you’ll be surprised at how well you may know the material but not quite understand what the questions are asking for – Afternoon: Item Set Multiple Choice ? READ THE QUESTION FIRST! 90% of all questions asked follow the item set chronologically (first portion of item set relates to 1st question, 2nd portion relates to 2nd question, etc. First paragraph is usually an introduction that can be skipped to save time) Special emphasis on essay format (master your timing—Individual Investor IPS/Return Calculation should take < 10 min). DO NOT rely on year to year correlations in question types—expect ANYTHING to be tested – Prior exams are published and are a necessary resource CFA Practice Exam only includes the afternoon item set section; you must take Schweser practice tests/actual prior CFA Level III exams to incorporate the morning session – One of your top goals should be to finish the morning session; many candidates have failed due to the inability to finish—you’ll be surprised at how many extra points you can earn just for taking educated guesses – CFA Level III exam is by far the most difficult although the material is a breeze. Therefore, you must conceptualize the material rather than rely on pure memorization. Special Note: For Level I candidates, place special emphasis on ethics and portfolio management concepts. An in-depth understanding of both saves time from LII and LIII down the road. Memorize Code & Standards and read ALL ethics examples! Portfolio management concepts such as portfolio standard deviation and portfolio variance are recurring concepts that are extremely important for LIII. Taken Directly from the CFA Institute Website Cfa Study Outlines. (2018, Oct 14).

NIMBY phenomenon + Home Rule + flexible zoning Research Paper

NIMBY phenomenon + Home Rule + flexible zoning - Research Paper Example Their point of argument is that such projects ruin the image of that particular place. They are also concerned that this would lead immense pollution of their environment. Pollution in this case refers to the noise, dust, fumes and odor that would come with these projects. This phenomenon has applied in many cases since time in memorial. For instance, in 1970, a proposal to build a mega railway connecting five cities in Texas was terminated due to residents’ defiance against it. The people near the tracks had a preformed mentality that building the rail would affect their tranquility due to noise. Despite the explanation by the proponent that good technology would be applied to ensure minimal noise, the residents were not ready to change their minds. Another example is the proposal to construct a metro system In Washington. This was in 1960s, whereby the Georgetown victoriously defeated this proposal. As much as many people would like to support the NIMBY phenomena, it is important to note that this phenomenon does not hold water. In most cases, the residents fail to be open minded, and are under the influence of their peers. The developments come along with their own benefits. Failure to embrace that opportunity leads to an immense loss. A good example is the two towns we have mentioned above. While Georgetown lost an opportunity for better transport system and metro stops, Texas lost an opportunity for drawing investors into their city. In my opinion, the NIMBY groups were better of supporting the projects rather than defying them. Home rule has its roots in Missouri, where it was authorized in their constitution. This was back in the year 1875. Is a scheme that deals with the relation of the municipal and the state? It gives the city dwellers a mandate to generate a charter for their particular government. Before the introduction of this

Nurses Using Critical Thinking to Implement Patient Care Essay

Nurses Using Critical Thinking to Implement Patient Care - Essay Example As the patient is acutely ill, assessment and interventions should proceed simultaneously. Assessment is done by history taking, physical examination and investigations. History taking should include the duration for which the symptoms have been present, the course of illness, associate symptoms such as cough, any obvious or clear triggering event, history of smoking and drug abuse in the recent past, history of significant weight loss and any significant past medical or surgical history. As the patient is having difficulty in speaking due to shortness of breath, history should be taken from the accompanying family member .The clinical record of the previous day should be reviewed which may contain the history given by the patient. Obtaining the history is important to arrive at the etiology. So far as physical examination is concerned, patient’s vital parameters are recorded and continuously monitored. As patient is hyperpyrexic, hourly temperature recording should be done. S igns of respiratory distress namely tachypnea, use of accessory muscles of respiration, wheezing and findings on chest auscultation are documented (Prigmore 50). General physical examination includes examination for skin rash and color, needle marks, lymphadenopathy, icterus and diaphoresis. Cardiovascular assessment evaluates blood pressure, heart rate, rhythm, pulse volume status and cardiac murmur, if any. The rationale behind all these assessments is to localize the site of infection, determine the cause of fever and to monitor the respiratory function and progress of the disease. Hydration status of patient should be assessed as fever can lead to significant evaporative losses and dehydration. Consciousness level and status of the pupils is assessed. Any tests and investigations that have been done till now are reviewed. Patient’s socioeconomic, professional and family background should be briefly appraised. Nursing diagnosis Fever is generally indicative of an infective pathology. Also, the patient has coexisting respiratory distress with diaphoresis. Thus, differentials of the nursing diagnosis in this patient are an acute respiratory infection like community acquired pneumonia of bacterial, viral or fungal etiology (Prigmore 50). Sudden deterioration with fever, tachycardia and tachypnea suggest acute lung injury. A young patient having a severe illness should prompt a diagnosis of immunosuppresion such as AIDS. Thus, the patient may have HIV related pneumonia and septicemia (Kalikiri, Kandala, and Sachan). Patient’s occupation where he may have been acutely exposed to large amount of dust or noxious fumes could have caused pulmonary inflammation. Construction workers may be predisposed to fungal infections. Fever with sudden onset respiratory distress and diaphoresis can also be a feature of acute infective endocarditis leading to heart failure as a result of intra venous drug abuse (Cabell, Abrutyn, and Karchmer 185-187). Some drug over dosages can also cause hyperpyrexia with shortness of breath. Non cardiogenic pulmonary edema and pulmonary hemorrhage are known complications of heroine abuse (Gotway et al 120-122; Dettmeyer et al 87). Patient’s lifestyle warrants an evaluation for substance abuse. An unhealthy lifestyle in a young patient can also cause accelerated atherosclerosis and myocardial infarction which is however, unlikely in the absence

Corporate Social Responsibility Term Paper Example | Topics and Well Written Essays - 1250 words

Corporate Social Responsibility - Term Paper Example The concept of corporate social responsibility is underpinned by the specific idea or principle that the organizations around the globe cannot act as the isolated economic units operating in the detachment from the broader society. Traditional and old views about survival, profitability, and competitiveness have been swept away through the concept of CSR (Fukukawa, 2011, p.121). In the past, the governments of the developed and developing countries strongly relied on the regulation and legislation to deliver environmental and social objectives in the competitive business sector. Recoiling government resources, integrated with the regulation’s distrust has guided to the exploration of non-regulatory and voluntary initiatives. Growing demand for the corporate disclosure from the stakeholders including suppliers, employees, investors, communities, activist organizations, and customers are pushing business towards the CSR initiatives. Recently several investors are changing the wa y of the performance assessment of the organizations. Investors are making their investment decisions based on various criterions that include ethical concerns. According to the report of social investment forum, more than 2 trillion US dollars valued assets invested in the portfolio linked to the social and environmental responsibility. The organizations are trying to maintain proper business ethics in their business practices in order to motivate and attract shareholders and investors. In addition, employees within the organization are increasingly looking beyond several employment benefits. Effective and skilled employees are the strongest asset of an organization. Therefore, it is important for the organization to retain skilled, experienced and effective employees. The organizations are trying to motivate their employees by providing employment benefits and taking care of their professional and personal needs. In this competitive business environment, it is important for the or ganization to retain skilled employees. Moreover, the organizations are trying to maintain an effective relationship with the suppliers.  

Mytholgy discussion questions Assignment Example | Topics and Well Written Essays - 250 words

Mytholgy discussion questions - Assignment Example However, few people understand its importance in life. The essence of myth in humans includes defining our existence for differentiating individuals from other species. They are created from collective imagination as metaphorical projections of the way things tend to be in life. Myths represent our experiences where they emerge and provide factual knowledge that can be used to understand human existence. It provides humans with the sense of creativity and artistry through developing ideas on selected concepts such as life and creation (Parker and Julie, 2006, 17). I believe the myth is an essential part of human life, and its presence is significant in helping human beings develop an understanding of their identity. Myths help in solving eternal questions such as the origin of existence. In addition, they are important since they provide guidance to all generations. As a result, individuals have better understanding of their lives by attaching to the myth developed. I believe mankind cannot fully understand why humans look to myths as an explanation to things that happen in the natural world. Tales include faith to something greater than our existence. Therefore, myths fill the gap in knowledge, and it’s the only chance of providing an explanation where no concept can expound the issues. Psychology cannot provide the required explanation since myths are deep rooted in humanity and exist in all

Porter's Model of National Competitive Advantage Essay - 1

Porter's Model of National Competitive Advantage - Essay Example Porter's Diamond of National Advantage Corporate strategies are ever increasing and thus have to be observed from a global context. This is because, even when an organization has no plans to import or to export commodities directly, the management staff has to gaze at the international business environment, where the actions of buyers, sellers, competitors, and new entrants of providers of alternatives may have an impact on the domestic market. Through this trend, information technology can be reinforced. Michael Porter’s model that allows for the analyzing of why some countries are more aggressive than others are, and the reason why some industries within countries are more aggressive than the way others are. All this is written in the book he published titled â€Å"The Competitive Advantage of Nations†. From the insight revealed in his writings, his representation of determining factors in national advantage has come to be known as Porters Diamond. This model proposes that the nationalized home base of a business plays a considerable role in determining the scope to which it is expected to achieve a competitive advantage on an international level. This home base presents basic factors that may support or hinder businesses from creating advantages in international competition (Held and McGrew 2001). ... Michael Porter makes out four determinants. These are: Factor Conditions When it comes to factor conditions, a country can create its own essential factors such as skilled labour and a strong technological base. It should be noted that the reserve of these features at a given time is not as much important than the degree that they are improved and implemented. Local demerits in features of production drive better innovation. Unfavorable circumstances such as labor shortages or inadequate raw materials may force organizations to come up with new methods, and this originality often goes ahead to a national comparative advantage. Demand Conditions There are situations when the market for a certain product is bigger locally when compared to foreign markets. In this situation, the local organizations give more attention to that commodity than foreign organizations do, thus leading to the element of competitive advantage as soon as the local organizations start exporting the commodity in q uestion. From this understanding, it becomes clear that when there is a high demand in the local market for a particular commodity, a national advantage results. In the spirit of good business, a strong, trendsetting local market can help local organizations look forward to global trends (Salvatore, 2002). Related and Supporting Industries In every industrial process there are always supporting and related industries. This leads to the element of competition between these industries. In the local setting, supporting industries are sometimes competitive, and thus organizations enjoy additional innovative and cost effective inputs. The suppliers get an additional advantage if their businesses are set up in a global

Commercial uses of GPS Assignment Example | Topics and Well Written Essays - 500 words - 7

Commercial uses of GPS - Assignment Example GPS-enabled transporters can be activated when removed from selected machines and provide location updates for recovery. Apart from machines, humans can insert GPS devices in their body for tracking, in case they operate in insecure areas, or are wealthy enough to afford one. A satellite-linked GPS receiver can provide accurate navigational data on the location of a victim and aid in a rescue mission. In shipping, GPS has diverse valuable applications in navigation and service delivery. It is applicable if a company pairs a GPS tracker with a radio transponder for tracking purposes. It can ease their operations significantly, for instance, identification of problems in the course of transportation. The resultant up-to-the-minute update on a movement of products is helpful for companies, as it can help transportation trucks avoid traffic or accident routes. In addition, it is useful in commercial transportation, for instance, one can determine the distance and time a bus or train takes to arrive at its destination. In the contemporary society, companies use GPS in their advertisement and marketing strategies. GPS receivers in portable services such as cell phones enable location-based service delivery in terms of marketing. The GPS device offers estimated geographical location when one connects to a network using a GPS enabled device. In addition, social networking companies such as Twitter have taken up the trend, and offer services to ‘nearby’ consumers. Personalization of service delivery promotes efficiency because it connects virtual presence to real-world nearness. In addition, GPS is widely applicable in survey work and real estate processes. It saves hours of survey work because it enables verification of property location and property size online.  

606 week 1 Assignment Example | Topics and Well Written Essays - 250 words

606 week 1 - Assignment Example For example, if someone is involved in criminal operations and security agents feel that getting into his system without his permission maybe the way to get evidence against him then that will be ethical. Also, if a company suspects something wrong is going on with its network then it maybe ethical to investigate the network connected to its network ( Bejtlich, 2003) . Ethical hacking is a good practice as it helps companies to enhance security of their computer system. Without proper audit of the computer system no real computer security exist. However, the certificate must be issued with a lot of caution and the authorized hackers should testify up on oaths. A Defensive Network Architecture is an information planning for the network security system which is well maintained and controlled and very closely monitored to identify weaknesses in the system (McClure et al., 1999). This architecture must be up to date to resist current forms of attack. Defensive network architect is important mostly for large organization since it helps to monitor their networks. Network monitoring also assist in evaluating environmental changes (McClure et al., 1999). For example, when there is an increase or decrease in traffic and assets which are currently maintained and secured. Our organization have an architecture in place which they use to control and monitor their security system. Since it is an organization which deals with confidential documents, this helps to secure their data. In conclusion, defensible network has become so important that on 14th March, 2014, Scott Air Force Base III marked a major progression when they signed a department of Defenses Joint Information Environment (Shelly, 2014). Shell, Petruske (2014) Cyberspace milestone reached for Air Force Network. Retrieved on 8th April, 2014

Cover Letter Essay Example for Free

Cover Letter Essay I would like to apply for the role of Intermediate Support Developer in your organization as the details of the job role and company itself are very appealing to me. I have enclosed my resume for your consideration. I am an enthusiastic and high-achieving IT professional with a Masters of Computer Science. I have exceptional technical and analytical skills, with over 3 years’ experience in providing application support at level 1 and 2 for critical business applications with additional duties of unit and integration testing, technical documentation and prioritising and allocation of user tickets. I possess the ability to take initiative with a positive and friendly attitude. My excellent communication skill helps me understand user’s requirements to provide them with an excellent customer service. Working in a highly dynamic work environment, has given me the sound knowledge of interacting with business users and external stake holders, finding technical solutions, answering questions quickly, and leaving a mark of satisfaction in customer’s mind. You will find me to be positive, ready to learn and hardworking who has ability to multitask and communicate effectively with non-technical users. I believe my attitude, expertise, skills, and excellent time management skills will prove to be an asset to the organization. Thank you for your time and I look forward to hearing from you.

The Foreign Exchange Market

The Foreign Exchange Market The foreign exchange market is the market where one currency is traded for another. This market is somewhat similar to the over the counter market in securities. The trading in currencies is usually accomplished over the telephone or through the telex. With direct dialing telephone service anywhere in the word, foreign exchange markets have become truly global in the sense that currency transactions now require only a single telephone call and take place twenty four hours per day. The different monetary centers are connected by a telephone network and video screens and are in constant contact with one another, thus forming a single international foreign exchange market. However, the currencies and the extent of the participation of each currency in this market depend on local regulations, which vary form country to country. Chapter 1 deals with the introduction and conceptual framework of foreign exchange market in India. It also deals with the structure of Indian Forex Market. Chapter 2 deals with the literature review of organization and regulation of forex market as well as management of exchange risk, exchange rate mechanism. Chapter 3 deals with the methodology adopted in the research process outlining the objectives of the study, methods of data collection and limitations faced while conducting the study. Chapter 4 deals with the data analysis of the foreign exchange market in India. It covers the long term and short term factors which account to the problems. Chapter 5 deals with the conclusion, recommendations and future prospects of forex market in India. Chapter1 Conceptual Framework of forex Market Theory of Foreign exchange The term foreign exchange is normally used to denote foreign currency surrendered or asked for in any of its current forms, i.e. a currency note or a negotiable instrument or transfer of funds through cable or mail transfer or a letter of credit transaction requiring sale and purchase of foreign exchange or conversion of one currency into another, either at the local center or an overseas center. The banks, dealing in for exchange and providing facilities for conversion of one currency into another or vice versa are known as Authorized Dealers or Dealers in Foreign Exchange. A bank is said to buy or sell foreign exchange when it handles the claims drawn in foreign currency or the actual legal tender money, i.e., foreign currency notes and coins of other countries. The theory of Foreign exchange covers different means and methods by which the claims expressed in terms of one currency are converted into another currency and specifically deal with the rates at which such conversion takes place. With partial or complete exchange control, as exercised by countries since World War II exchange markets are no longer free. Exchange rates today are not entirely determined by market forces but are officially fixed and maintained by Central Monetary Authorities. Fluctuations in exchange rates are permitted by authorities only within narrow limits,. And official rates often very different to what they would be if natural forces were allowed to operate. Forex Markets The foreign exchange market, like the market for any other commodity, comprises of buyers and sellers of foreign currencies. The operations in the foreign exchange market originate in the requirements of customers for making remittances to and receiving them from other countries. But the bulk of transactions take place among banks dealing in foreign exchange for their own requirements as they do cover operations. Banks undertake large and frequent deals with other banks through the agency of Exchange Brokers, and it is these deals which give the market its significance. In addition, there are other transactions which take place in the foreign exchange market. All transactions of the exchange market may be divided into five categories: Transactions between banks and their customers. Transactions between different banks in the same centre. Dealings between banks in a country and their correspondents, and overseas branches. The purchase and sale of currencies between the central bank of a country and the commercial banks. The transactions of the central banks of one country, with central banks of other countries. There is not much difference between one market and another as far as the international transaction between markets at different centres is concerned. But local dealings, among members of the same market are organized in two different forms. One of them is the pattern adopted in Great Britain, U.S. A. and some other countries, where foreign exchange dealers never meet each other but transact business through a network of telephone lines linking the banks, with exchange brokers who act as intermediaries. In India also the foreign exchange market is organized on these lines. The other type is the markets in countries of Western Europe, where the dealers in Foreign exchange meet on every working day at a meeting place for business proposals-They fix the exchange rates for certain kind of business particularly with-customers. The foreign exchange markets in these countries are like commodity exchange or stock exchange. However, the global important of these markets, is comparatively smal l. Indian Foreign Exchange Market The Indian foreign exchange market, broadly concentrated in big cities, is a three-tier market. The first tier covers the transactions between the Reserve Bank and Authorized Dealers (Ads). As per the Foreign Regulation Act, the responsibility and authority of foreign exchange administration is vested with the RBI. It is the apex body in this area and for its own convenience, has delegated its responsibility of foreign exchange transaction functions to Ads, primarily the scheduled commercial banks. They have formed the Foreign Exchange Dealers Association of India which framers rules regarding the conduct of business, coordinates with the RBI in the proper administration of foreign exchange control and acts as a clearing house for information among Ads. Besides the commercial banks, there are money- changers operating on the periphery. They are well-established firms and hotels doing this business under license from the RBI. In the first tier of the market, the RBI buys and sells for eign currency from and to Ads according to the exchange control regulations in force from time to time. Prior to the introduction of the Liberalized Exchange Management System, Ads had to sell foreign currency acquired by them from the primary market at rates administered by the RBI. The latter too sold pounds sterling or US dollars, spot as well as forward, to Ads to cover the latters primary market requirements. But with the unified exchange rate system, the RBI now intervenes in the market to stabilize the value of the rupee. The second of the market is the inter-bank market where Ads transaction business among themselves. They normally do their business within the country, but they can transact business also with overseas bank in order to cover their own position. Through they can do it independently, they do it normally through a recognized broker. The brokers are not allowed to execute any deals on their own account or for the purpose of jobbing. Within the country, the inter-bank transactions can be both sport and forwards. These may be swap transactions. Any permitted currency can be sued. But while dealing with the overseas Ads, because the Indian market lacks depth in other currencies; the Indian banks can deal mainly in two currencies, viz, the US branches must cover only genuine transactions relating to a customer in India or for the purpose of adjusting or squaring the banks own position. Forward trading with overseas banks is also allowed if it is done for the above two purpose, that is for cov ering genuine transactions or for squaring the currency position, and does not exceed a period of six months. In case the import is made on deferred payment terms and the period exceeds six months, permission has to be obtained from the RBI. Cancellation of forward contracts is allowed in India, although it has to be referred to the RBI. Previously, the banks used to get the forward transactions covered with the RBI, but since 1994-95 the RBI has stopped giving this cover and has permitted the banks to trade freely in the forward market. Cancellation of a forward contract involves entering into a reverse transaction at the going rate. Suppose US $1,000 was bough forward on 1 February for three months at Rs. 40/US $. On 1 March, it is cancelled involving selling the US dollar at the rate prevalent on this day. If the exchange rate on 1 March is Rs. 39.50/US $ there will be a loss of Rs. 500 (the dollar sold for Rs. 39.5 minus dollar bought at Rs. 40.00). The loss is borne by the customer. If the value of the US dollar is greater on the cancellation day, the customer shall reap the profit. The third tier of the foreign exchange market is represented by the primary market where Ads transact in foreign currency with the customers. The very existence of this tier is the outcome of the legal provision that all foreign exchange transactions of the Indian residents must take place through Ads. The tourists exchange currency, exporters and importers exchange currency, and all these transactions come under the primary market Chapter 2 LITERATURE REVIEW Organization And Regulation of Forex Market The Foreign Exchange department, which is also being called as the International Banking Division, is one of the important departments of the banks operating in international market. In India also all scheduled commercial banks, both in the nationalized or non-nationalized sectors, do have Foreign Exchange departments, both at their principal offices as well as offices, in metropolitan centers. This department functions independently under the overall change of some senior executive or a senior officer well-versed in foreign exchange operations as well as in the rules and regulations in force from time to time pertaining to foreign exchange transactions advised by various government agencies. The principal function of a Foreign exchange department is to handle foreign inward remittances as well as outward remittances; buying and selling of foreign currencies, handling and forwarding of import and export documents and giving the consultancy services to the exporters and importers. Besides this, the department also gives the financial assistance in relation to the foreign trade, i.e., it gives assistance to the exporters by way of financing the exports and imports by giving them the financial assistance to clear the consignments or open a letter of credit. The department issues letters of credit for their importer clients and handles letters of credit received from overseas correspondents in favour of exporters from India. Issuance of Performance and the Bid Bond guarantees and tender document is also one of the important functions of the banks that are dealing I foreign exchange. In India, the banks doing foreign exchange business are issued a license to this effect by the Reserve Bank of India under Foreign Exchange Regulation Act, 1973. No bank, not having such license to deal in foreign exchange, can handle foreign exchange operations. Besides Authorized Dealers, licenses are also issued to the Dealers with limited powers to change foreign currency notes, coins and travellers cheques. Such licensees are known as Authorized Money Changers. 2.1 Organisation of A Foreign Exchange Department The foreign exchange department of a medium or large sized-bank can be divided into various department and sections such department are locked after by a senior person not lower than the category of a branch manager having both administrative and operational know-how as well as discretionary powers for advances required from time to time by the clients. The in charge of the department functions independently within the overall framework laid down by the Management of the bank. The in charge is assisted in hid day-to-day work by a team of officers, and workmen. One of the important functions of the Foreign exchange department, beside banking operations, is to maintain liaison and correspondence relations with overseas banks who may be their correspondents. SECTION OF THE FOREIGN EXCHANGE DEPARTMENT The Foreign exchange department is divided into number of sections, each one equally important and looked after by one officer or a department head. A particular section can be sub-divided into sub-section with specific duties allotted. The sections in Foreign exchange department can be broadly stated as under: 1. Dealers Section This section is the nerve of the foreign exchange department as the exchange rates are computed and advised by this section. The exchange rates are the on a foreign exchange and so any incorrect fixation of rates (price) will turn the profits of the bank into losses and instead of earning from the foreign exchange transactions, the bank may keep on losing. This section is headed by an officer who is called a Dealer. In the morning, before the banking hours begin, the exchange rates of various currencies are computed. The rates are computed on the basis of certain fixed principles which may by either market quotations or any such approved channel. In India, the Dealer works out the exchange rates on cross rate method based on the sterling rate schedule fixed and advised by FEDAI vis-à  -vis the previous days closing rates in London market. This department calculates and advised both the ready rates as well as forward rates as and when requested. Besides rate computation, it also look s after the foreign currency accounts of the bank and supervises the balancing position in foreign currency accounts maintained abroad. It also controls the exchange position of the department and reconciles the various entries put forth by other sections both for buying as well as selling of foreign exchange. In addition, the section also calculates and tabulates the statistical data required by the principal office of the bank concerned, as well as the Exchange Control Department of the Reserve Bank of India. Such statistics prepared by the bank are to be reported to the authorities on the prescribed forms at the prescribed intervals. This data is very essential and of prime important as the Balance of Trade and Balance of Payments position is arrived at only from the statistics provided by the banks. From the data available from the banks even the import policy is formed and other fiscal measure adopted by the monetary authorities from time to time depend. This section can be further sub-divided into following subsections: Rate calculation and advising Forward Exchange contracts Foreign currency Accounts Exchange position and control, and Reconciliation of Foreign Currency Accounts. 2. Foreign Remittances Section This section deals with the inward and outward remittances received in the country and sent outside, both on behalf of the transactions taken up by residents and non-residents. Foreign remittances are carried out in the form of cable transfers, mail transfers, demand drafts, travelers cheques and payment instructions by letters. All these forms are widely used both for inward remittances as well as outward remittances. The officer of this particular department has to be quite well-versed with various regulations in force from time to time and the amendments thereto as strict exchange control regulations are prevailing specially in case of outward remittances in developing and underdeveloped countries, due to the adverse balance of payments position, depleting foreign exchange reserves, and available resources required to meet with development programmes and national exigencies. This department also keeps Test Key arrangements used for transmitting the instructions by cable, as in cab le transfers no signature of the remitting bank is possible. So messages are computed with a particular number known as code or cipher. This code or cipher is recomputed at the other centre on the basis of the test arrangements exchanged between the two banks. In foreign exchange, whatever the reason may be irrespective of the amount, the entire gamut is focused around the inward and outward remittances and so this section is of prime importance. The remittances are converted into local currency in case of inward remittances and in foreign currency in case of outward remittances at the prevailing rate of exchange on the date of each transaction or a forward exchange rate if exchange rate if exchange is already booked earlier. So, the remittance department has to keep a close contact with Dealers section, both for getting the rates and also advising them the funds position which changes from time to time due to the remittances flowing in either direction. 3. Import Section Import section can be sub-divided into import letters of credit both opening and payment thereof, issue of Bid guarantees, performance guarantees and guarantees to Government agencies for release of import consignment, import documents received on collection basis and imports on consignment basis. Import section has to keep in touch with latest developments in international markets as well as the rules and regulations in force in various centres to take up the import business at right earnest without violating the rules and regulations. Both in developing and developed countries, there are Import and Export Trade Control Regulations and such regulations are enforced through a licensing procedure. Hence the Import section has to take care of the Import Trade Control Regulations as well as Exchange Control Regulations before allowing import transactions to be put through. 4. Export Section The section deals with various exchange operations arising out of export trade. The principal functions of this sub-section are: Advising and confirming letters of credit received from abroad: Extending financial assistance to exporters as and when required. Acting as an agent for collection on behalf of the clients; Negotiation of export bills drawn under letters of Credit whereby the dealer acts as an agent of overseas bank and facilitates smooth function/operation of international trade; and Acting as an authorized channel appointed by Central Banking Authority to receive the export proceeds. 5. Statistics Section This section collects the sales and purchase figures from various departments along with necessary exchange control forms, tabulates then and submits a periodical report by way of statements and returns to the Exchange Control Department of the Reserve Bank of India under whose authority it operates. This reports is also being submitted from time to time in one form or the other to the head office of the concerned bank to enable it to compile the overall position of the foreign exchange preferably of the bank as a whole. 2.2 Exchange Regulation in India Exchange Control Regulations were first introduced in our country on 3rd September, 1939 at the outbreak of World War II. The control was introduced under the guidelines of Bank of England and also as a measure under the Defence of India rules to conserve and augment the foreign exchange resources of India to meet the defence requirements for Britishers. It primary objective was to conserve the foreign exchange resources, which needed to be diversified due to changed circumstances. It was initially introduced as a temporary device to meet the emergency situation arisen due to Second World War. In May, 1944 the Defence of India Rules were lifted and all emergency provisions promulgated during the Defence of India Rules were ineffective. But the Government of India was not in a position to lift the Exchange Control Regulations due to the strain on the sterling balances; The Exchange Control Regulations were kept alive under a new law named as Emergency Provisions Continuance Act of 1994. The Exchange Control was put on a permanent Statute and the First Foreign Exchange Regulations Act came into existence on 25th March, 1947 as a full fledged foreign Exchange Regulations Act. The system of control adopted in 1947 was structurally identical to provisions laid down in 1939 at the inception of the control, but important changes in detail were introduced in FERA 1947 to meet the specific requirements of the situation and to protect the interests of independent India. The Foreign Exchange Regulations Act (FERA) of 1947 has now been replaced by the FERA, 1973. Basic structure of the Exchange Control Regulations is till not very much divergent that the earlier ones, but keeping in view the economic conditions and balance of payments positions, certain new provisions have been included and the control has been made more comprehensive. Under the Act of 1973, the Authorized Dealers have been given wider powers for releasing foreign exchange to the residents in India and a strict view has been taken of the non-resident interests. I) BROAD FEATURES OF EXCHANGE CONTROL There is an elaborate machinery to enforce Exchange Control Regulations in our country. The machinery comprises of the controller of the Exchange Control department of the Reserve Bank of India at the helm of affairs, which in turn has empowered the Banks dealing in foreign exchange to deal with general public for their foreign exchange requirements. This authority enforces the provisions of the Foreign Exchange Regulations Act and has the powers to deal with any infringement or violation of the provisions of the Act. II) THE FERA AND THE EXCHANGE CONTROL MANUAL All the provisions of the FERA have been transcribed in the banking terminology by the Reserve Bank of India to facilitate the day to day transactions between Reserve Bank, between the various dealers and the general public. Exchange control in India is administered by the Reserve Bank of India in accordance with the general policy laid down by the Union Government in consultation with the Reserve Bank. The Bank has an Exchange Control Department which is entrusted with this functions. Under the system, the Reserve Bank is authorized to license export of gold, silver, currency notes, securities, and a variety of other transactions involving the sue of foreign exchange. For foreign exchange transactions, which the general public conducts with the authorized dealers in foreign exchange, the Reserve Bank of India has laid down general instructions for the guidance of the latter. The directions cover all transactions relating to imports and exports, foreign travel payments, family maintenance remittances by foreign nationals, transfers of investment income, capital transfers by foreign and Indian Nationals and other invisible items. Some of these transactions particularly those pertaining to capital transfers, have to be referred by the authorized dealers to the Reserve Bank for its prior approval. Some remittances may, however, be made by the authorized dealers without prior approval of the Reserve Bank, such as those for foreign Nationals seeking to remit a part of their, earnings for the maintenance of their families abroad, provided the amounts are within limits specified by the Reserve Bank. The institutional framework of the exchange control system also compromised of a special machinery for enforcement and for dealing with any infringements of the provisions of the Act. The function is entrusted to the Directorate of Enforcement attached to the Union Ministry of Finance. The directorate deals with offenders who violate the control provisions and is authorized to take punitive action. It is also empowered to adjudicate in certain cases of infringement. III) Purchases and Sales by Authorized Dealers Authorized dealers purchase and sell foreign currencies in accordance with the regulations. Purchase: They purchase T.Ts., M.Ts., drafts, bill etc., freely from banks and the general public. The receipt of remittances from any country is free and banks are, therefore allowed to purchase freely. Purchase of foreign currencies is also done from their overseas branches and correspondents for the purpose of making rupee payments into non-resident accounts in India and also for making payments to residents. The authorized dealers and authorized moneychangers purchase foreign currency notes, coins, and travellers, cheques from travellers coming from abroad. The amounts purchased are endorsed on the reverse of the customs stamped currency declaration forms of the travellers. Foreign currency notes and coins are also purchased from other authorized dealers and money changers. Sales; Sales of foreign currency are made by authorized dealers subject to control regulations. No remittances may be made to countries advised from time to time and no transactions may be carried out with persons, firms or banks residents in those countries. For the purpose of sales persons, firms, and banks residents in Nepal are treated as non- residents. 2.3 Exchange Rate Mechanism in India India is a founder member of the IMF. It followed the fixed parity system till the early 1970s as a result which the value of the rupee in terms of gold was originally fixed as the equivalent of 0.268601 gram of fine gold. In view of Indias long economic and political relations with England and membership of the sterling area from September 1939 to June 1972, the rupee was pegged to the pound sterling. The exchange rate was thus remained unchanged but the gold content of the rupee fell to 0.186621 gram. Again, with the devaluation of the Indian rupee in June 1996 the gold content fell further to 0.118489 gram. The following year, the pound was also devalued. This devaluation did have an impact on the rupee pound link, but the rupee was kept stable in terms of the pound. The latter continued as an intervention currency. In August 1971 when the system of fixed parity was under a cloud, the rupee was briefly pegged to the US dollar at Rs. 7.50/US $ and this continued till December 1971. The peg to the dollar was not very effective as the pound sterling remained to continue as the intervention currency. In December 1971, the rupee returned to the sterling peg at a parity of Rs. 18.9677/ £ with of course , a margin of  ±2.2 S percent. After the Smithsonian arrangement had failed and the pound had began to float, the rupee tended to depreciate. The reserve Bank then had to delink it from the pound sterling in September 1975 and link it with a basket of five currencies; but the pound sterling was retained as the intervention currency for fixing the external value of the rupee. The weight of different currencies forming the basket remained confidential and the exchange rate continued to be administered. The administered rate did not keep pace with the growing rate of inflation and this resulted in a widening gap between the real and the nominal exchange rates that was more evident during the late 1980s and early 1990s. Thus, when economic reforms were initiated in the country, the rupee was depreciated by around 20 percent in two successive instalments in the first weeks of July 1991. In absolute terms, depreciation occurred from Rs. 21.201/US $ to Rs. 25.80 /US $ From March 1992 a dual exchange rate system was introduced, in terms of which 40 percent of export earnings were to be converted at the official exchange rate prescribed by the Reserve Bank and the remaining 60 percent were to be converted at market determined rates. The US dollar was he intervention currency. From March 1993 the receipts on merchandise trade account and some of the items of invisible trade account came to be convertible entirely at the market determined rates on all items of current account. The adoption of the unified exchange rate system form March 1993 means adoption of a floating-rate regime, but it is a managed floating and the reserve Bank of India intervenes in the foreign exchange market in order to influence the value of the rupee. In the first two years, the value of the rupee remained stable but the onward, it has been depreciating despite RBIs intervention. 2.4 Management of Exchange Risk Risk Hedging tools in Forex Market In recent years financial markets have developed many new products whose popularity has become phenomenal. Measured in terms of trading volume, the growth of these products principally futures and options has confused traditional investors. Although active markets in futures and options contracts for physicals commodities have only recently attracted Internet. Multinational Companies normally use the spot and forward markets for international transactions. They also use currency futures, currency options, and currency futures options for various corporate functions. While speculators trade currencies in these three markets for profit, multilingual companies use them to cover open positions in foreign currencies. 2.4 (a) Forward contract Forward Exchange Forward exchange is a device to protect traders against risk arising out of fluctuations in exchange rates. A trader, who has to make or receive payment in foreign currency at the end of a given period, may find at the time of payment or receipt that the foreign currency has appreciated or depreciated. Ifthe currency moves down or gets depreciated the trader will be att a loss as he will get lesser units of home currency for a given amount of foreign currency, which he was holding. Similarly, an importer, who was contracted to make payment of a given amount in pound sterling at the end of a given period, may find that at the time of payment, the rupee sterling rate is higher. He would then have to pay more in rupees than what it would have been at the time when the contract was made. To protect traders against such risks of appreciation and getting lesser amount of home currency, there is a device in exchange market of booking forward exchange contracts. The emergence of forward exchange contracts has been due to the rate fluctuations and possible losses that the traders might have to suffer in their foreign exchange business. The forward exchange transaction is an umbrella which gives protection to the dealers against the adverse movement of exchange rates. The forward exchange market in fact came into existence when the exchange rates were highly unstable following the abandonment of the gold standard by most of the countries at the end of first and Second World Wars. There are other means of taking care of the risks of the adverse effects of the exchange rate fluctuations such as including the Escalation Clause in the sale and purchase contracts entered between the buyers and sellers or fixing a parity rate between the home currency and foreign currency and an y variation in the fixed parity entered into between the importers and exporters, the exchange risks will be passed on as per the terms of the contract. Escalation clause is more adaptable in contracts amounting to a very large volume,. especially in contracts entered into on deferred payment terms. Forward Exchange Contracts Under option forward exchange contracts, the customers has an option to receive or deliver the contract

The Green Party | Political Analysis

The Green Party | Political Analysis The emergence of the green movements was related to a shift to post-materialist values in advanced industrial societies, especially in Europe (Muller-Rommel, 2002). Aiming for better quality of life and self-fulfilment, the green agenda was originally focused on single issues like provision of park tracks, urban renewal, high-way construction, nuclear energy and cruise missiles in the 1980s. During the period of 1980 to 1984 there were Green Parties in twelve Western European countries with which started to successfully perform in the parliamentary system, including national government (Muller-Rommel, 2002). During the 1970s, Green Parties were founded in more countries like Europe, Australia, Brazil, the USA and Ukraine (Doherty, 2002). Although the first Green Parties were established in Tasmania (1972), New Zealand (1972) and Britain (1973), they were not considered as successful and remained small and weak in their political performance. Although the different green parties were all based on the same basic principles, their evolution, progress and electoral success vary widely between different countries. As table 1.1 shows, Austria, Belgium Finland, Germany, Italy, Luxembourg, Netherland, Sweden and Switzerland identified as the countries with more successful Green Parties. Green party success is a multi-variable phenomena (Richard). Existence, electoral and parliamentary power of green parties , their electoral success and environmental consciousness are vary widely between countries (Rich). Factors behind the differential success Although many theories have been put forward to discuss this variation of success, most of them consider electoral success rather than the success as a whole. New social movements, new class accounts and post materialism (Carter, 2007: 88) are the three major theoretical attempts to explain the green party development but failed in explaining the differential success (Carter, 2007). New social movements are students, peace , antinuclear, feminist and environmental movements that are responsible for protest campaigns that swept Western Europe from 1960s (Carter, 2007). New class accounts justify the new politics targeting basic changes in economic and social structures of capitalists society in post war era (Carter, 2007: 88). Democrats in industrial countries shift away from material concerns for economy and security to post-material concerns such as a concern for liberty or for the environment is explained by the post materialism. However, the Political Opportunity Structure (POS) t he dimensions of the political environment that either encourages people to use collective action or discourage them from doing so, and which shape the development of movement explains the variation in success in aspects of structure, culture, electoral system and party competition. (Carter, 2007:88) Rich () identified the environmental consciousness with an identified political action which is appropriate to the individual state agenda, as the fundamental factor of the development of a green party is success. He further explains that the progress of green parties from 1970s 1980s was based on their understanding, that pressure group activity and personal spirituality are not substitutes for political actions. In Harmel and Robertson (1984); Hauss and Rayside (1978) Cleavages or strains; institutional factors, such as characteristics of the electoral system and centralization of the government; and more directly political factors, such as the position of trade unions and the configuration of existing party competition were identified as factors behind differential success. As a main dependent variable in green party success electoral success is determined by their capability of reaching a given vote or a seat threshold (MÃ ¼ller-Rommel,1994: Kitschelt 1988). In a successful party it should not be limited to a particular election but stable and consistent over a considerable period (Bomberg, 2002). However the recent attention of this analysis is more towards the party behaviour within the government (MÃ ¼ller-Rommel, 1994). It was argued that, as existing parties fail to meet new requirements of material wealth, considerable changes in the industrial formation, modifying living standards, and the increase of postmaterialist values, Green Parties gain a better opportunity to establish their selves in political and social arena (Inglehart 1990). Analysing the green party evolution of Germany, Britain and France is critical to clear understanding of this differential success due to their contrasting behaviour. German Greens The German Greens were neither the first green party nor the first greens that entered a parliament (Redding and Viterna,1999). However, it is highlighted in the literature on green party evolution due to the early success which inspired the rise and spread of green parties globally and due to the formation of a red-green coalition (Muller Rommel and Poguntike, 2002). The four pillars of Green parties Ecological wisdom, Social justice, Grassroots democracy and Nonviolence introduced by German green party in 1979 to 1980, are fundamental to the world wide green parties. Unquestionably, Die Grunen in the Federal Republic of Germany was the most successful green party in Europe (Oneill, 1997; Muller Rommel and Poguntike, 2002). The German Green Party Die Gruenen was established in 1980. It emerged from the new social movements of the 1960s and 1970s. It was mainly the peace movement, the womens movement, the anti-nuclear movement and the ecology movement that contributed to the foundation of the party. The early Greens focused on protest campaigns regarding issues like nuclear power, Pershing and Cruise missiles and acid rain (Carter, 2007).. Proportional representation of electoral system and open POS of Germany helped German greens to enter the political system (X). As it refunds the cost of election campaign for parties who earn more than 0.5 % votes, the electoral system of the Germany encouraged the arrival of greens into politics. Consequently, green party was able to work on election campaign without drawing a rich sponsor (carter, 2007). Although Germany was governed by the SPD from 1969 to 1982, the social-democrats failed to resolve the conflict between environment and economic interest groups and respond to new political demands raised by the green movement. This failure was one factor of the electoral success and establishment of Die Gruene in the German political arena (X). . In the 1983 federal elections, Die Gruenen gained 5.6% of the votes and won 27 seats in the national parliament. Though the 5% threshold value of electoral system makes harder to small parties to entering the parliament, German Greens were able to be the first Green party entering European national legislature achieving that barrier (X). This experience enabled Die Grunen to gain national media attention and build up financial resources, parliamentary skills and political credibility, as well as to expand their popular support (Frankland 1995: 27). With all the publicity and their strategies, German greens managed to increase their votes in the 1987 federal election and was able to won 8.3% of the votes (X). The federal election of 1998 was an important milestone in their history as they participated in a new federal government in an unprecedented coalition with the social-democratic party (Rommel and Poguntke, 2002). To analyse if the greens were successful in this coalition, it is crucial to assess their negotiation with the coalition partner, the strategies they applied to influence government policies and their conflict resolution strategies (Rommel and Poguntke, 2002). In contrast to countries like Denmark, Sweden and the Netherlands, the absence of a communist party after 1956 facilitated the establishment of greens in Germany. The Greens filled up the gap of a left political party (Richard) and X. With this progress western Germany could win 8.8% in 2005 and more success than 5% of East Germany (Carter, 2007). Another challenge the Greens were confronted are the internal conflicts between two opposed internal factions. Fundis members adhere to green principles without any compromise while Realos are more pragmatic and willing to adopt party strategies to be more successful X). However, wise conflict resolution and proper leadership could drive the party success (Carter, 2007). British Greens Britain Green party People was the first European Green party established in 1973 (Carter, 2007). This party was based on the Blueprint for Survival which consists of four principles; human survival with minimum disruption of ecological process, the maximum conservation of materials and energy, a population in which recruitment balanced loss, and social system which the individual citizen was content with (Oneill, 1997). Despite that attempt of demonstrating their environmental consciousness they could obtain only 1.8% votes in 1974 general election and among five constituencies North West recorded with the highest of 3.9%. In 1975 as a pure green approach among other parties with dark green and red green fractions they have changed their name as Ecology party (Oneill, 1997). However, British Green party is considered to be having an unsuccessful fortune, compare to most of other greens with national government success (Carter, 2007; Oneill,1997). The major reason behind this regression is the British electoral system and its poor recognition of small political parties (Carter, 2007). A rather closed Political Opportunity Structure in Britain focuses more on major parties and their success and its opportunity for a smaller party is negligible (Carter). Since the British Plurality electoral system focuses on individual constituency contests between major parties, prospects for small parties to enter the parliament are rare, unless they represent a Welsh or Scottish Nationality based on geography. The financial barrier created by the British electoral system discourages small parties from contesting in elections as they need to deposit 500 pounds per candidate before election, which is only refundable if a minimum of 5% of the vote is won. The Green party faced a significant economic crisis after the general election of 1992, as they lost their deposits for all 253 candidates and did not receive any government funding (Carter, 2007). The competition by other political parties trying to draw environmentalists votes, such as Liberal Democratic, Scottish and Welsh nationalists party also created a hard time for greens in establishing their political stability. However, as an important miles stone they were able to win 15% of the votes in 1989 election (Carter, 2007). Growing public environmental consciousness, protests against the Conservative Government and fragile nature of new Liberal Democratic party are considered to be the major reasons behind this success. However, as the Liberal Democrats got more successful and materialism grew again, the Green party was confronted with a lot of obstacles and their popularity decreased (Redding and Viterna, 1999: Carter, 2007). However recent positive trend of British Green party is more likely to be satisfactory as they could secure the European parliament election and Scottish election in1999 and Greater London Assembly in 2000. Successes of 2003 and 2004 could win the seven seats of Scottish Parliament. These achievements triggered their performance in national election and won 3.37 contested seats in 2005 while saving 24 deposits. Reformation of Political Opportunity Structure of European parliament through introduction of proportional representation opened up the way for this positive trend in greens fortune in Britain (Carter, 2007). French Greens The establishment of the French greens was triggered by the anit-nuclear movement and its opposition the construction of a powerful nuclear plant under a right-wing government in 1974. The first French Green party Les Verts was formed in 1984. It won eight seats in European election in 1989. The French Greens were first elected to the French National Assembly in1997. After Francois Mitterant, was elected president in 1981, broke his promise of submitting a moratorium on the construction of a nuclear power plant, environmentalists realized the importance of forming a unique party to raise their voice on environmental problems. Generation Ecologie was the second French Green party. It was formed in1990 by Brice Lalonde, former Environmental Minister. Even though both parties were successful in the 1992 regional elections, they were unsuccessful in the 1993 national election and failed to win even a single seat. One of the major reasons why the green parties had trouble to develop stability is the Political Opportunity Structure in France. In contrast to Germany or the UK, the electoral system of France is based on two rounds of elections. There is a legislative and a two-round presidential election. 12.5% vote winners of first round can proceed with the second round. Hence passing this threshold values alone was again a major challenge for minor parties. As a mutual effort socialists and greens had to reach the target together to keep their political stability and survival in the parliament. Les Verts could again establish in 1997 through a coalition with Dominique Voyer the national speaker of the socialist government and secure the status even in 2002. In contrast to Germany, left -right cleavage of the French political system is basically a static system which constrains the establishment of a new party in the political arena. However, the decline of political stability of major parties in 1980s facilitated the entering of greens into the political arena. Although coalition used as a strategy for entering the political system it was the beginning of decline of party structural integrity. Diverse political views between members was fundermental to lots of internal conflicts and some of the main green activists left the party due to the inconsistency of the political vision. With the changes of POS under plural left alliance green party was exhausted with organizational structure, leadership and financial stability (Carter, 2007). Conclusion Evolution of green parties and the rationale behind their rise and fall vary widely between countries. However, German, France and Britain examples which have different fortunes for green parties reflect that they all bear a common pool of facts behind the differential success. National constraints that green parties confronted with vary widely between countries. Firstly the institutional structure of the state, where countries with closed system of government have more space for ideas and establishment of green parties. However openness of the bureaucracy marginalizes the green parties as in Britain. Political tradition of a country and nature of the electoral system also can obstruct or facilitate the development of green party. However, no single factor can determine the success and development of a green party or the potential of its establishment (challenge Richard). The essay supports the (X)s argument of existence, electoral and parliamentary power of green parties is proportional to the performance of green parties in national government coalitions. The actions of a green party especially ideological development, internal struggles and performance in the government, influenced on its electoral success (Redding and Viterna, 1999). The literature figure out that electoral system of the country, environmental consciousness, institutional structure of the party, financial stability and party behaviour (internal conflicts and conflict resolution) as the major factors behind the differential success of Green parties as a whole. According to Skocpol (1992) being successful as a party is lie in how social demands well within the institutional structure, especially in opportunities and obstacles. Foreign Direct Investment: Comparison of India and China Foreign Direct Investment: Comparison of India and China Foreign Direct Investment is a hot topic in most policy circles as it is associated in many instances with significant macroeconomic changes and improvements in the range of goods and services produced in recipient countries. Furthermore growth in recipient countries is often ascribed to these inflows and so competition for higher inflows of FDI has become competitive. Most of the developing and developed countries increase their economy by enhancing their share in the global market through FDI inflows. As FDI shows more impact on the countrys economy, most of the foreigners are investing their amount in other countries for improving their profits with less manpower and minimum initial cost. These inflows were easily achieved by the investors by just fulfilling their basic requirements and maintaining their policies. FDI can be used by the countries only when they meet some of the major requirements like transfer of capital, a source of funds for foreign operations, Control investmen t and a balance of payments flow (Nicolas, B., 2010). Even though the FDI inflows in developing countries are low that is nearly 5%, this shows more impact on the economy in terms of the development programs by introducing new technologies. This change will be occurred only in the surroundings of investment areas. Here, in this research the FDI inflows between India and China are studied by comparing both the countries. Further of this study clearly explains the various aspects that are considered by the India and China for increasing the FDI inflows in the global market and also illustrates the policies that are followed by China as most of the investors prefer China when compare to the India. Finally, it recommends some of the policies and the changes that need to be made by the Indian Government for improving its FDI inflows. 1.2. Aim and Objectives Aim: To study the variations between the FDI policies of Indian and China based on their inflows and overall performance of the economy. Objectives: To study the importance of FDI and the required fundamental policies for acquiring the FDI. To research on the impact of FDI inflows in India and China based on their overall performance. Identifying the possible steps for Indian policy makers for improving their FDI inflows. Statistically evaluating the comparison between India and China in terms of FDI inflows. 1.3. Purpose of Study This study mainly focuses on the Foreign Direct Investment, the role of FDI in India and China and also illustrates the comparison between these two countries in terms of FDI. This research is selected in order to know more about the investments made by the developing countries and the involvement in international financial banking markets to influence the global and political aspects. This study is mostly useful for the people who are willing to know about the role played by FDI in the fast growing countries like India and China where these two countries differs in their environmental conditions. While researching about the FDI in both countries, one can easily analyze that China is showing more interest in attracting the FDI and is leading their economy when compare to India. So in order to clearly investigate on this point, this study also focuses on the aspects and the policies that need to be designed by the Indian country for attracting the investors and also to increase the ov erall performance of the economy by raising the inflows when compared to China. 1.4. Research Context In this study the researcher is focused on the worlds largest two most populated countries: India and China with a greatest history background. These two countries are known to be fast growing countries in the world and are known for their ample facilities and environmental conditions. These two countries are economically improving their standards in terms of technology and infrastructural growth. However, China is considered to be more positive in terms of attracting FDIs and are almost leading the comparison with India. In this research the time is a biggest constrain and to understand the research physically is really a tough target for the researcher by visiting both countries to meet and interview/ survey the financial organizations experts from various locations. However it is also noticed that in India only the FDI policies are changing from place to place based on the local governments rules and regulations. All the major rules and regulations governed by RBI and Government o f India are applicable, addition to that the investing company also needs to ensure that the environmental and ethical issues are not disturbed by the foreign investors in local and urban areas of various parts of India. As an example, there are some pilgrim places of India which does not allow non vegetarian food or related items so in that circumstance neither Government of India or RBI cannot allow the foreigners to invest their amount for a restaurant or bar and etc. Similarly in China it is one of the largest countries in the world and is having different cultures and backgrounds with in the country. Hence from the above context it is understood that this research will mainly focus on the secondary data available and in some areas it can get into the help of people related to the financial and banking industry. 1.5. Research Methodology For conducting any type of research, the data needs to be gathered by the researcher where this collected information should be in such a way that it is valid and accurate. Researcher need to choose a suitable method from various research methods, by which the researcher can successfully finish the research. Generally there exist two different types, primary data and secondary data. Primary data mainly focus on the aim of the research where the researcher can easily collects the information from various methods like surveys, interviews, etc. Where as in the secondary data, the researcher can collect the data only from the sources like journals, books, magazines, online articles, etc. where the researcher need to collect the accurate data as these recourses will not focus on the aim of research (Kumar, R., 2005). Here in this research, researcher collects the information through secondary data as the main aim of this research is to compare the FDI inflows in both India and China. As t he time is the biggest constrain, it will be really tough target for the researcher to select the primary data as the researcher either need to do interview /survey with the concern persons by visiting two countries where it cannot be possible with the period of time. So, its better to prefer secondary data for gathering accurate information for the research by referring various resources. Hence, the research can be successfully completed by analyzing the collected information and drawing the conclusion from this data. Chapter 2: Literature review 2.1. Overview This chapter will provide the suitable information and required material for completing research successfully with no issues during the research process. At the same time the literature review gives a basic idea about the research problem solving background with additional material from their related background history. The growth of multinational enterprise (MNE) activity in foreign direct investment (FDI) has grown at a faster rate than most other international transactions as well as the trade flows between countries. The research literature review covers the objects related to foreign direct investment, detailed introduction and description of FDI and impacts of FDI. International Monetary Fund (IMF) has defined the FDI as an international investment of one company with the target of enduring relationship i.e. Investments made by company must exceed the equity of Target Company by 10%. The major requirements of the investors will help in faster growth of their organization which is explained by Nicolas, B. (2010) in terms of Control investments, supply of funds for foreign operations, a balance of payments flow and Capital transfers. 2.2. Brief History and background of Foreign Direct Investment In the present world, there exist various investment techniques for the corporations for increasing their growth. If these industries lacks in making right decisions in their investment then it may lead to reduce their growth and their level in the global market. So, many of the countries prefer Foreign Direct Investment (FDI) compare to other techniques because most of the corporations get affected financially due to their investment decisions. Mostly FDI is preferred as it is considered as an integral part of an open and effective international economic system and also referred as the major catalyst to development (OECD, 2002). In the present market, USA stood a number one position in FDI flows. According to Nicolas Breitfeld (2010, p.1), Foreign Direct Investment (FDI) is defined by the IMF as an international investment of one company with the intention of lasting relationship. Foreign Direct Investment (FDI) plays an important role in the financial sector. Generally most of the countries believe that increasing the international linkages through FDI is an important feature of financial globalization and elevates the major challenges for statistics and policymakers in industrial and developing countries (Neil, K. P., 2004). Further of this section, it clearly discusses the views of authors on FDI, the importance of FDI and mainly focuses on the issues that are being faced by the countries while introducing the FDI. Even-though authors define Foreign Direct Investment (FDI) in different ways based on their research it is mainly mend to development on countrys and globalization. Some of the authors views on FDI are discussed below: According to Organization for Economic Co-Operation and development (OECD) (2008, p.62), Foreign Direct Investment (FDI) occurs when a business located in one country (the direct investor) invests in a business located in another country (the direct investment enterprise) with the objective of creating a strategic and a lasting relationship. Here, the author suggests that occurrence of FDI exists only when the business persons invests their money in another country. They invest their income in another country by making some rules and regulations in their relationship. But according to Alexander, L. and IMFD, (2002), foreign direct investment defined as the integration of three components which are illustrated below: The branch profits need to be distributed and divided in equity without any holding withholding taxes. Accrued interest need to be paid to the direct investor by the direct investment enterprise, this can also be referred as income on debt. Earnings are reinvested in proportion with the direct investment stake. In this context, author says that the investment and the interest benefited by the business people need to be redistributed in an equal proportion among the investor and the direct investment enterprise. At the same time, Neil, K. P. (2004, p.3), discusses that according to BPM5 (Balance of Payments Manual) FDI defined as a category of international investment that reflects the objective of a resident in one economy (the direct investor) obtaining a lasting interest in an enterprise resident in another economy (the direct investment enterprise). ÂÂ  Here, the author discuss that FDI indirectly affects the economy of another country as the other country invest their income on another country for gaining interest on their investment. Even though the opinions and views of the authors differs in defining the FDI but all the authors focus on only one point that is the benefit dragged by the investor and the direct investment enterprise. These investors of get benefited globally with FDI on the interest on their investment and also increases their international linkages with the industries established in another country. ÂÂ   2.3. Impacts of FDI Foreign Direct Investment is considered as a driver of economic growth and development for developing countries which often lack the technology or capital to promote sustained economic growth and development. Mostly, FDI is considered as one of the major drivers of globalization as it continuously raises with the high growth rates before the financial crisis hit the world economy. The way through which FDI promotes economic growth and development to the countries is contentious because there is no definitive evidence and lags in supporting the literature. Even though there is no empirical evidence in representing the impact of FDI on the countries there are some theoretical explanations from which one can easily analyse the impacts of FDI on developed and developing countries. According to Bora, B. (2002, p.168), FDI flows were increasing rapidly much more quickly than international trade flows, which in turn were increasing faster than world GDP. Laura Alfaro (2003) says that FDI of fers great advantages to host countries because many of the academics and policy makers argue that there exists a most important positive effect on the development of host countries. FDI not only acts as the source of the valuable technology but also helps the countries in developing the linkages with the local firms that indirectly helps the country in raising the economy. Due to these reasons, most of the developing and industrialized countries offer incentive for encouraging the FDI in their economies. The environmental impacts of foreign direct investment may be positive, negative or neutral based on the institutional and industrial context. Gorg and Greenwood (2002) comes under a conclusion that the effect due to FDI is negative by reviewing the information from the foreign-owned to domestically owned firms. But Lipsey (2002) supports the positive benefits in preferring FDI. FDI flows attained a new record level right from the year 1990 to 2000. Then, from the year 2001 the gro wth in the investment failed and the later years it saw a steady and steep decline in global FDI flows. , Figure: Shows trends in global FDI flows during the year 1991 to 2003 (FDI, 2007, p.7). FDI affects the economic growth of the country in various aspects like it raises the formation of human capital, provides a facility to transfer the technology between the host countries and also stimulates the domestic investment. The relationship between the impact of FDI and economic growth can be easily analyzed with the help of production function and also with the other variables that affect economic growth such as domestic, trade, labour and capital (Falki, N. 2009). Production function was done based on the endogenous growth. According to Kumar, N. (1998, p.112), Direct investment was thought of mainly as a flow of capital, possibly replacing local capital or possibly representing marginal additions to the host countrys capital stock, followed by the necessity of financing dividends and interest, and possibly repatriation of capital. Some of the authors studied on the impact of FDI on economic growth in developing countries where those opinions are illustrated below: Authors views on Does FDI promote Economic Growth in developing countries S.No. Authors name Researched during the year Does FDI promote Economic Growth in developing countries (Yes/No/May be) Explanation 1. Balasubramanyam 1996, 1999 May be Requires open or neutral trade regime 2. Borensztein 1998 May be Depends on education level of workforce 3. De Mello 1999 May be Depends on degree of complementarily and substitution between FDI and domestic investment 4. Graham and Wada 2001 Yes Raised per capita GDP in Chinese provinces with FDI concentration 5. Graham 1995 May be TNCs market power can generate negative impacts 6. Loungani and Razin 2001 May be Risks 7. Lim 2001 May be Depends on tax incentives, regulatory and legal impediments, macroeconomic instability 8. Marino 2000 May be Requires open trade and investment policies 9. Mallampallyand Sauvant 1999 May be Requires human resource development, information and other infrastructure 10. Markusen and Venables 1999 Yes Raises productivity and exports of domestic firms, generates spillovers 11. Rodrik 1999 No Reverse causality: TNCs locate, rather than drive growth, in more productive and faster growing countries Table: Shows the authors explanation on Does FDI Promote Economic Growth in developing Countriesthis is a question? (LyubaZarsky, 2005, p.25) From the above table, it can be understood that out of 11 authors, only 2 authors support that FDI promotes economic growth in the developing countries as they explain that it raises the productivity, exports of domestic firms and stated a practical example that it raised the percapita GDP of china government with the help of FDI. Rodrik, opposed the views of the other authors on supporting the FDI as based on their research. From Rodrik research, it has been stated that it doesnt shown impact rather it was derived as a reverse causality. Apart from these three authors, the remaining 8 authors were in a dynamo whether to support the FDI or not because all these authors states that the impact on FDI on economic growth depends only on the circumstances that the author considers but not on any other aspects. For example: FDI shows more impact on economic growth only when the government fulfil some basic needs such as require open trade, investment policies, human resource development, i nformation, other infrastructure, etc. If these requirements are fulfilled by the government then automatically it get benefited with the FDI but if it fails in reaching those needs then it may face some risks due to the policies and the agreement between the countries. Hence, it can be stated that impacts of FDI directly depends on the situations and circumstances that are being considered by the government. By tightening of international financial conditions will have as awful effect on inflows of FDI. In the recent years, this has been main source of assets for many countries (U. N. Staff. 2009).FDI shows more effect on the economic growth of the countries as it provides various benefits to the countries that acquire FDI are illustrated below (Khan Arshad, 2007): Introduces the latest techniques and technologies of marketing and management with the help of FDI, the developing countries can know more about the latest techniques and the technologies that are being used by the developed countries. By acquiring and implementing these latest technologies in the developing countries, to some extent it can increase its growth in terms of economy. Exploitation and utilization of local raw materials usage of raw materials in the countries will be increased by exporting these excess materials to other countries and get benefited with them by importing other raw materials from other country which are shortage in their countries. Can be easily access to the new technologies as there will be a rapid flow between the countries, each of the country can know more easily about the other country and their religion. Based on this analysis, it can assess and access the technologies in their own region by making contract with the other countries. Financial flows between the countries Foreign inflows between the countries are used for financing current account deficits. The finance flows between the countries are transferred in the form of FDI where it doesnt generate interests and repayment of principal but internally raises the human capital stock through job training. Chapter 3: Empirical Literature on FDI based on INDIA and CHINA 3.1. Effects of FDI on all other countries when compared with India and china The existence of a strong negative relationship between trade share and country size was supported by the literature on trade and development. Country size and trade ratio are inversely proportional in size (larger the size of the country smaller is the trade ratio), the foreign trade, investment, and technology transfer between countries will directly affect the degree of sincerity and competitive pressures emanating from abroad (Pieter, B. 2007). Thus, the impact of these competitive pressures would be much less in a large country such as China and India than that among other East Asian NICs. In recent years china had recognized its need towards foreign trade, investment and technology with the aim of modernization, nothing like the Third World developing countries (India) that impoverished foreign capital. 1984-85 1994-95 1999-2000 2004-05 2006 2007 World 2.2 4.8 18.3 9.0 12.9 14.8 Developed economies 2.1 3.9 19.1 7.7 12.80 15.6 Developing economies 2.8 8.1 15.8 11.9 12.5 12.6 Developing Asia 2.3 7.9 12.1 9.9 11.0 10.6 East Asia 1.9 9.0 14.8 9.3 8.7 8.6 China 1.8 15.9 10.4 7.7 6.4 5.9 South Asia 0.2 1.7 2.4 3.3 6.2 5.7 India 0.1 1.7 2.7 3.1 6.6 5.8 Table 2: shows FDI inflow as percentage of gross domestic fixed capital formation (GDFCF), 1944 -2007. (Source: Prema, C. A. 2009, p.379) The average annual level of FDI inflow for developing Asia had raced sharply from US$ 19 billion during 1984 1985 to US$ 500 billion till 2007, at the same time share to developing countries have raised from 15.1 to 17.4 percent which is shown in the above table. The gross domestic fixed capital (GDFCF) as a share of FDI inflow is higher for all the developing countries in the period 1984 1996 and reversal due to the Asian financial crisis during 1997 98. FDI inflow for developing Asia with the average FDI/GDFCF ratio during entire period 1984 2007 is approximately 9 percent and 7.1 per cent when compared with all the developing countries at the same time the global average is 7.4 per cent. China is the recipient country of inward flow and the largest developing country from past two decades where it has been investigated a theoretical increase in inflow with in developing Asia. Among all the countries china was in the second position for total FDI flow as per the ASEAN countries , with increased average annual level of US$ 3 billion during 2000-2007, and from the year 1980 to 1997 almost before six years china was in the second half with US$ 30 billion which was the onset effect of financial crises from 1997-98, due to decline and with determination from about US$ 35 billion per annum before the year 1997 to an annual average of about US$ 24 billion between 1997-79. Establishment of export-oriented industries is heavily concentrated by chinas FDI, there observation on the share of FIEs for total exports in transition economies of china is two percent of expended persistently before 1980 and approximately 60 percent by the year 2006. India process to increases FDI participation in export- oriented activities which had remained at a outlier region of FDI whose one/third FDI during the independence in 1947 was a major amount of stock as a primary sector with plantation, mining and oil at the same time one/forth was the manufacturing and all the remaining stock s are in services, mostly trade, construction, transportation and utilities. The inflow started increasing in manufacturing from 1960s although with a divestment from this sector of FDI, since, low-wages, low skilled manpower are the Indias huge supply it can attract garments and other simple assembly activities which would indirectly favor the heavy foreign investment industry thus primarily focusing towards domestic market. From mid 1990s a slight increase in software is observed as well as significant competition with the world market at industrial production was not notable (Park, J. H. 2002).some of the difficulties which are to be faced and over come for fast development of the country . India faced many difficulties to attract foreign investors in both products and services market now it is only success to service industry of IT mainly. In order to overcome these difficulties to stimulate domestic demand this is given in three steps: The interest rates should be competitive in RBI. Value added tax (VAT) are to be implemented. Reduce the budget deficit through government. Figure: shows the financial states of India and china GDP the total chinas financial assets is approximately 220 per cent of GDP at the same time Indias financial assets is 160 per cent, countries savings and investment is the great strength for chinas financial system and Indias financial system is outside occur in savings and investments (Sources: Slide share 2008, slide No:18). 3.2. Fundamental policies of FDI India followed market-distorting policies on both foreign and private investments thus with this estimation about barriers for imports and exports are analyzed. Thus it become necessary to control the production and distribution as well as administered price controls etc. The impacts of opening up policies are likely to open up with foreign trade, investment and technology transfer, which would be much less in large countries of china and India when compared with all other East Asian NICs. Chinas opening policies in recent years is the success story with the favorable impact is not only for small economies but also for all large continental economies. China and India may not suffer from a large country constriction for adopting the export-oriented, outward-looking development strategy considerably (Park, J. H. 2002). The reformist policy is to fill the domestic savings gap which is necessary for economic development with foreign capital inflows, along with other goals in advanced for eign technology and managerial skills, and to promote exports to increase the foreign exchange earnings of the country. Due to open-door policy Chinas trade and inflow of foreign direct investment and loans are impressive, thus within a very short time china became a major exporting country, and an export competitor with the East Asian NICs (Newly Industrializing Countries) and ASEAN (Association of Southeast Asian Nations) countries in the Asia Pacific region. The opening policies in china have contributed to the countrys economic growth and development considering all domestic economic events. The Indias economic reforms undertaken in 1991 in light of Chinas experience with the export-oriented, foreign direct investment strategy for economic growth and development which has been examined with superiority of export-oriented, outward-looking development strategies. Thus China can provide important lessons and policy implications in economic development for all Third World developing countries like India. The success story of china open to worlds economy made it ideal for studying the relationship between trade and development as well as for testing the validity of export-promoting development strategy. 3.3. Historical Background and National Goals 3.3.1. History of FDI in India The generational explanation of history is given as follows after Indias independence: during 1947 to 48 there was the British owned the private foreign capital through the national policies resolution which is Swadeshi movement Industrial policy. In the next generation i.e. from 1949 to 1953 foreign investments where far away from trio of domestic business house with foreign capital as well as with the government nationalist sentiments. The second Economic plan was launched in 1957 as industrialization through import substitution and encouraging private investment. Some of the selected industries got foreign collaboration and JV mostly manufacturing companies which are retained participation in India FDI since 1960s, the devaluation of rupee encouraged the socialist idealism banks and foreign oil majors nationalized after late 1960s. After almost 8 years in 1968 the foreign investment board had encouraging investments on there own terms and conduction. In the year 1973as per the F oreign Exchange Act (FERA) which launched a new article that all firms should come together for their foreign equity, holding 40% of foreign equity to be considered as Indian companies due to which IBM as well as coca cola is exited. After seven years of strict vigilance on FDI, from the year 1980 licensing procedures were liberalized to softened, technology transfer and royalty payments relaxed, foreign investment was encouraged wherever possible. During 1900-s rupee value got down, withdrawal of NRI money, India turned to IMF; there was liberalization on trade regime and regulatory frame work. Many of the industries were invited by FDI and in some cases limit was increased from 51% to 100%. The service sector was again opened for FDI. The political instability after 1995 had started but a perception towards FDI had changed due to changes in government kept focus on FDI. 3.3.2. History of FDI in China China has joined the joint venture with other countries in the year1979, and by the year 1986 china became fully foreign owned enterprise. It was divided into four zones namely Shantou, Shenzhen, and Xiamen in the year 1980. After four years in 1984 it was found that chinas economic zone has fourteen cities and whole china combined by late 1900s. There was a rapid economic growth in reform period due to profusion of labour and its low costs, Rapid expansion of Chinas domestic market at the same time plays important role of overseas Chinese for increasing integration with world economy. The marketing effects are generally obtained by imports and exports in both bilateral countries. FDI is very essential for developing countries for Off setting the capital deficiency, Acquiring advanced technology, Gaining production know-how, Promoting exports as well as to Table 2: shows FDI in India-China products Trade (in million US Dollars). (Source: Prema, C. A. 2009, p.379) The two highest population countries of the world are India and China which together contain approximately 40 per cent of the worlds humidity on an adjacent landmass in Asia. Both countries are pride in birthplace of civilization entering the era of sharing worlds greatest development problem. The underdeveloped areas of these two countries is due to huge population relative to land and other resources, around 1950s there was no commitment to national planning for economic modernization as there was new governments of China and India, led by Mao Zedong and Jawaharlal Nehru so as to eliminate poverty and raise the standard of living (Park, J. H. 2002). Approaches to Development: Some of the important characteristics shared within India and China as the wealth of people relative to other rare resources such as arable land, natural resources, and capital suggesting the appropriate strategies for development would have involved production of labor-intensive goods. Among these some are exchanged for imports of capital goods and technology as per the necessity for development. For economic development and modernization India