Post on 19-Jul-2020
FINOMETRICS DEPARTMENT OF
MANAGEMENT STUDIES
VOL: (4) 26 November 2014
INDEX
Goods & Services Tax– The shaping of ‘Place of supply’ rules 1
An Expected End to the Tyrannical Monetary System 3
G-20 Summit 5
Indian Aviation Sector to revive its flying spirit again 7
Investment in Gold, currently on hold! 9
India’s city of dreams- Aamchi Mumbai 11
Green Banking for High Ranking 13
Giant of E-Shopping: FLIPKART 15
We have been hearing about the Goods & Services Tax (GST) taking shape at its own pace. It is one of most the important
shift in the legislation that is pending till date. The need to introduce GST into our tax system is to eliminate the cascading
effect of taxes in India and also to bring about better transparency into the system.
The Government places importance on its implementation at the earliest along with the involvement of state finance
ministers. The ‘Place of Supply’ Rules will act as a backbone of this new indirect tax system and is more likely to remove the
complications of the old system. It is also expected to give a boost to the country’s GDP by two per cent.
The place of supply rules talks about intricacies involved in deciding as to where the goods and services will be taxed,
focusing on the importance of levy due to upward movement in the e-commerce and delivery of services through electronic
means. The GST will absorb the excise duty and service tax at the central level and VAT at the state level, the place of supply
and consumption of them will ascertain the tax recipient state and consuming state thereby impacting the revenue. Shaping
the final form of these rules is a very crucial key to GST.
The Government is preparing a common platform through GST that will eliminate barriers to trade between the states. The
Centre is also making an attempt to induce the reluctant states by offering a reward mechanism. The states are being
assured that they will not suffer any downward trend in their income generation due to inclusion of petroleum product and
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Goods & Services Tax– The shaping of ‘Place of supply’ rules
entry level taxes within scope of GST.
The Modi sarkar has indicated its implementation as crucial on the agenda and the developments are monitored closely. The
government will shortly finalize the draft of the Bill required for the amendment. The states show a positive response towards
GST being ready to be implemented by 1st April 2016.
NITESH G
II MBA (Financial Management)
2
To emancipate from the satanic global economic system, the Islamic state has started producing their currency in areas
under its control. The organization has started minting gold, silver and copper of its own currency to change the tyrannical
monetary system which was modelled on the western economies that had enslaved Muslims. There have been large swaths
of Iraqi and Syrian territory this year as Islamic state of Iraq and Syria has proclaimed a caliphate or Islamic empire on lands
under its control. The state already issued a statement which explains the new currency’s exchange rate and where to find it.
The new currencies will be based on the original dinars that are used during the caliphate of Uthman in 634 CE which
includes two gold, three silver and two copper. As the dinar is made with the gold and silver, the purchasing power of money
will be entirely depend on the purchasing power of gold and silver. ISIS doesn’t have the gold reserves that are required for
them to produce the currency and if they have to buy it from the others then it would be burden on the people to buy the
currency. Their main strength in generating revenues is oil production which is helping them to become a complete
self-sufficient state.
The biggest challenge for the Islamic state is how the group will be able to resource enough of the precious metals that are
required to distribute the coins to the people. As their major revenues are from the oil revenues which help them make up to
2 million a day, they also earn by extortion of local businesses, hostage ransoming and selling off looted artefacts. The Islamic
proclamation is that, their currency would be unaffected by movements in the dollar and other prevailing world currencies.
The gold is non-interest bearing investment and strict interpretations that charging interest is forbidden which could be an
ideal way for stricter Muslim’s to transact business wealth and amass wealth. It seems to be venue for smuggling and thievery
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An Expected End to the Tyrannical Monetary System
as aspiration to use gold for money. So it would be the most important for the finance ministry to take this challenge of
introducing Islamic dinar as they have to generate revenues to issue coins.
SAI KRISHNA
II MBA (Financial Management)
4
G-20 SUMMIT 2014 was held in Australia at Brisbane the capital city of Queensland on 15th and 16th November 2014. It was the
ninth meeting held by the G-20 heads of the government. The venue which hosted the event was Brisbane Convention
Centre at South Brisbane .This event was the largest ever peacetime police operation held in Australia. Around 2500 media
representatives attended this event and leaders from various countries also were invited to attend this event.
Proper preparations were made for summit by the Australian government by providing a wonderful hospitality for the world
leaders and delegates. Around 6000 policeman were deployed to oversee the security, and around 600 volunteers also
provided assistance for the summit and about $800 million were spent on the summit.
The agenda for this event was to support the recovery as the global economy moves beyond the global financial crisis. Many
European leaders expressed their opinions to support the cause and President Barroso and European Council President Van
Rompuy expressed their desire for the importance of coordinated growth strategies as well as finalizing agreements on core
financial reforms, actions on tax and anti-corruption. The main objective of summit meeting was all about strategic priority for
growth, financial rebalancing and emerging economies, investment and infrastructure etc. But the climate change was not
included in the discussion as the Prime Minister Tony Abbot did not wanted the agenda to be cluttered by subjects which
could distract the discussion from the primary objective that was economic growth. Due to this decision many European
leaders were unhappy about the decision. As the climate change was always included in every other agenda of previous
summits.
5
G-20 Summit
The other main issue in the summit was focused on was about Russia acquiring Ukraine and other neighboring countries.
Many European delegates expressed their views against Russian President Vladimir Putin role for acquiring other countries. The
stage was therefore set for some serious posturing and chest-beating in Brisbane, sparing hacks the humiliating task of
tracking down some odd looking anti-globalists for an interview or filming stern-faced cops, looking into the distance
purposefully, representing the "unprecedented levels of security”. Even United States President Barak Obama also lashed on
Putin to change his ways or face the risk of further isolation. By then even German president Joachim Gauck also joined in
support to criticize Putin. The climax of the summit came when the Russian president left the summit early leaving everyone
guessing what the real game of Putin was and even the Canadian President Graham Arthur Charlton Bell further snubbed
him that he had only one thing to say to him that was to get out of Ukraine.
It was also a productive summit meeting for the United States as the trade deals and new climate change initiatives flowed
from the United States camp, with the president clearly enjoying his trip, not to mention his rock-star treatment by students in
Queensland and in Myanmar and it was same for the Chinese President Xi Jinping as he stressed about his country’s climate
change and also had a trade deals with Japanese.
So overall the summit was filled with drama, tension which was displayed in the summit, and the outcome of this summit
meeting was to reduce taxes, poverty and ensure economic growth and economic development, and also reduce risk in
financial systems by improving the stability of banks, and others topics like Ebola virus epidemic in Africa and climate change
was also discussed in the summit by the world leaders.
KAUSHIK RAO
II MBA (Financial Management)
6
Aviation sector is perceived to have been performing well recently after the downfall. Referring to the reports of second
quarter of major airlines like Jet airlines and Spice Jet, we can generalize that the sector is reviving currently. The rise in profits
can be attributed to their innovative strategies like discounts being offered and improved sentiments of the customers. During
the second quarter, both the airlines have reported approximate growth of 15% in revenues compared to the second quarter
last year. Considering the growth itself, from last year, these two companies have increased their revenues by about 500
percent. This is a clear indication that airlines industry is hoping brighter days.
The reasons sorted by the analysts as mentioned above are improved investor sentiments and discounts being offered
corresponding to various reasons and occasions. It is evident that more people are thriving towards commutation via air
which wasn’t the case earlier. Strengthening of economy and its revival from the last recession are also among the reasons
for betterment of airlines industry. However, the role of Spice Jet is considered prominent recently as its strategy has been
able to produce effective results. Advance purchase sales and promos have led to filling up of seats which would otherwise
go empty. The result is the incremental revenue. During the quarter, a consistent growth was observed with growth in
September.
Despite all the efforts, analysts say that the chances of revival as of now are meagre though the falling price of crude is
helping the sector to reduce the costs. Though the challenges are significant, the chances of improvement are higher as per
the airlines executives. Investors perceive that from the next fiscal year, there will be economic growth in our country creating
7
Indian Aviation Sector to revive its flying spirit again
positive investing environment which will improve aviation sector all the more.
Since the decline is macroeconomic, handful of airlines cannot create an overall growth in the industry, but they certainly
have created hope for the future improvement of the sector. Thus the change that is occurring in the market is highly
appreciable which shows the hopes for betterment of aviation sector in future. The situation as of now is to stabilize in the
current scenario and strategize for the coming period.
DINESH SINGH MAHAT
II MBA (Financial Management)
8
Recently we have seen a fall in gold prices globally by nearly 40% since the last three years. Gold prices in India are also
down by over 20% from their peak over a year ago. The fall in gold prices has brought us to think whether we should consider
buying gold at the moment. But global investors are not in favour of buying gold as they neither see returns nor safety by
parking money in gold. Investors also feel that gold is not a good risk bearing tool against inflation as falling crude oil prices
and overall drop in prices of commodities seem to have given investors some relief on the inflation front. However in the case
of Indian investors, gold does provide protection from imported inflation as the rupee is weaker against the dollar, thus gold
will become costlier and protect prices from falling. Buying gold in India is like buying a US Dollar asset as gold is denominated
in US dollars.
The fall in prices has resulted in the public favouring gold. Most of the general public are tempted to buy gold now, but is
important for them to keep in mind the purpose for which they want to buy. If it is for use, perhaps this may be the time to
accumulate with purchase advisable at every fall. However investors globally are consistently selling gold. Holdings in the
largest US gold ETF has fallen by 45% from its peak two years ago.
Large investment banks have also predicted a further fall in gold prices. Indian investors should, however, keep in mind risks in
the exchange rate movement. If the rupee doesn’t weaken, then gold prices in India will also fall along with global trends.
During the last 40 years, gold has hardly given a negative return which was not the case for gold globally.
Another likely risk could be import duty cut as 10% custom duty was levied on import of gold. This has resulted in rise of
9
Investment in Gold, currently on hold!
smuggling gold because of which the industry has been asking for lower duty. If duty is cut by 2%, gold prices will fall to that
extent. Although how and when this will happen is an issue. Gold has been quoted at a premium for physical delivery, due to
several restrictions on import of gold over the last one year. The high premium as a result of lower supply could support gold
prices.
High premiums, duty cuts and fall in exchange rate of rupee would not let price of gold fall freely in India. Even globally, the
gold mines output growth has been slowing down causing restrictions in supply. Thus in the current scenario, Indian investors
need not be in a hurry to buy gold and should gradually make any future purchases at every fall.
MICHAEL ANTONY COLACO
II MBA (Financial Management)
10
Mumbai is undoubtedly India’s financial powerhouse. It contributes a major chunk to the GDP of India. Lying along the coast
of the Arabian Sea, it has a deep natural harbour which has aided a lot in India’s marine time trade. Popularly known as the
city that never sleeps, it is vibrant, fun and has something for everyone. It houses the major financial institutions of India i.e. the
Reserve Bank of India (RBI), National stock Exchange (NSE) and the Bombay Stock exchange (BSE). It is one among the
world’s top 10 centres of commerce in terms of global financial flow. It also houses India’s premier scientific and nuclear
institutes and furthermore, it also houses Bollywood and Marathi film industry along with the television industry. Mumbai,
formerly known as Bombay is the economic powerhouse of India. Its contribution to India’s economic development is
immense. Anything that impacts Mumbai impacts India as well. It is the nerve center of India’s economy just like New York is
to the United States of America.
It constitutes 70% of India’s maritime trade contains Asia’s oldest stock exchange that is the BSE. Mumbai has also benefitted
from the IT boom that has taken place in India. Until the 1970s, Mumbai owed its prosperity largely to textile mills and the
seaport, but the local economy has since been diversified to include engineering, diamond-polishing, healthcare and
information technology. The key sectors contributing to the city's economy are: gems and jewelry, leather, IT and ITES,
textiles, and entertainment. Nariman Point and Bandra-Kurla Complex (BKC) are Mumbai's major financial centers. Mumbai
provided the initial lead in the IT industry. Despite competition from Bangalore, Mumbai has created a niche in the IT industry
scenario of India. The SantaCruz Electronic Export Processing Zone (SEEPZ) and the International Infotech Park (Navi Mumbai)
offer excellent facilities to IT companies.
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India’s city of dreams- Aamchi Mumbai
It has the highest GDP in South Asia and in India. It contributes up to six per cent of India’s GDP and has the highest number of
billionaires and high net worth individuals in India.
It has always attracted people from all over India and it is also the gateway to India and has one of Asia’s busiest airports, the
Chhatrapati Shivaji International Airport. It has the largest consumer market in India and also the largest internet and telecom
users. Mumbai’s railways carry the most number of passengers in the world as per the recent findings. Thus with so many
institutes and businesses of national and international importance, it is little wonder about how much it contributes to the
Indian economy and this is only expected to grow in the coming years.
Thus no doubt Mumbai is India’s economic powerhouse and the pride of India and its importance in the development of the
Indian economy cannot be denied. It is the pride of us Indians and is poised to become one of the major cities of global
importance. Mumbai has always and will always continue to be the pride of India. True, it faces a lot of challenges ahead
but there is no doubt that it will stand and stick to it’s never say die attitude that keeps the city moving towards its prosperity.
PRITESH D’SOUZA
II MBA (Financial Management)
12
The concept of Corporate Social Responsibility refers to business decision making process which is linked to ethical values,
compliance with legal requirements and respect for people, communities and the environment. In other words the concept
of green marketing refers to the development of the products that consume low energy and the pricing policies associated
with it. All the four P's of the traditional marketing mix should be ‘green’, only then the concept of green marketing is
completed. In bank marketing literature, green marketing refers to the development of new ‘green’ financial products, such
as loans that finance cleaner technology and environmental strategies (such as energy efficiency and waste management
programmes) that improve bank’s environmental performance and reputation.
Environmental marketing planning should be based on social and environmental responsibility. In relation to the banking
sector, there are three dimensions of green marketing. The first refers to bank lending decisions based on environmental
criteria, the second dimension deals with bank’s environmental management strategies and the third is about developing
environment friendly financial products. According to one of the survey that was conducted on consumers who had the
experience of purchasing green or environmental products in Taiwan, a green corporate image exerts a positive effect on
customer satisfaction and customer loyalty. According to Chen, the companies should develop green marketing in order to
comply with environmental pressures, to have competitive advantages, to improve corporate image and to seek new
market opportunities.
A well-implemented green positioning strategy can lead to more favourable perceptions of the brand, indicating a positive
13
Green Banking for High Ranking
relationship between green and green image. (Hartmann et al, 2005).
Green product development (GPD) includes the development of business loans offered at beneficial terms to the companies
which are into sectors of green development. It also includes business loans offered at favorable terms to companies that
produce environmental friendly products along with the development of home improvement loans to individuals for the
improvement of house energy consumption and to development of consumer loans to individuals for the purchase of green
products. According to the bank manager green corporate social responsibility (GCSR) includes indicators like sponsorships
of projects, organisations and institutions that contribute to the protection of the environment and special programmes for
training customers as how to protect the environment green internal processing (GIP) could be also expressed by using
appropriate tactics for maximising the utilisation of the bank's resources and saving energy, special programmes for
personnel training in how to protect the environment
A green marketing strategy could make the difference for banks wishing to regain their lost pride and recapture their
customers, through an enhanced green image. The qualitative results confirmed that GPD and green processing are
important dimensions of green bank marketing. Even though green bank marketing is complex and multidimensional,
qualitative research showed that green marketing results in a favourable, green bank image. So the bank marketers should
pay special attention to their internal processes, aiming at continuous improvement and eco-friendly system solutions.
BABIL JOSE THOMAS
II MBA (Financial Management)
14
Flipkart, an E-commerce giant established its business in a remarkable way. Flipkart was started by Sachin Bansal and Binny
Bansal in Bangalore, Karnataka. It is registered in Singapore and has millions of customer in India. It specializes in online retail
in fashion, sportswear and other accessories. Initially, the founders had spent just rupees four lakhs for making website to set
up the business. Now having more market share in India it is trying to expand its business for which it had raised funding from
venture capital funds Accel India (US$1 million in 2009) and Tiger Global (US$10 million in 2010 and US$20 million in June
2011). On 24 August 2012 Flipkart had announced the completion of its 4th round of $150 million funding from MIH (part
of Naspers Group) and ICONIQ Capital. The company also announced on 10 July 2013, that it had raised an additional $200
million from existing investors including Tiger Global, Naspers, Accel Partners and Iconiq Capital. Even when there is
competition from Amazon, Snapdeal, Myntra and other retailers it has sustained to become number one in Indian Market
When Flipkart entered Indian market it adopted various strategies to attract its customer thus increasing the number of online
shoppers drastically. The Indian retail shops are under threat because of online retailers playing major role in distribution of
various products. They are running under loss because of lack of customers. Spiraling inflation and economic slowdown have
failed to impact shoppers who are visiting the retail shops more, but also at the same time are increasingly giving preference
to buying stuff online. Shopkeepers and mall owners are feeling the heat as they scramble to stand up to increasing
competition from online retailers. A recent Associated Chambers of Commerce and Industry of India (Assocham) paper for
2013 said that regular trade (when people buy goods from shops) had increased by 65% but online trade registered an
impressive growth of 85%, a good 20% more. Hottest products online are in the tech and fashion categories, according to
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Giant of E-Shopping: FLIPKART
Assocham. India's e-commerce market was worth about $2.5 billion in 2009, and it went up to $6.3 billion in 2011 it also went
up to $16 billion in 2013 and is expected to touch a whopping $56 billion by 2023 which will be 6.5% of the total retail market.
It will overtake the show room retailers. While customers eschew the many advantages of online shopping, small businesses
are hit hard by the trend. Many sites today offer huge discounts on products. There is no overhead cost incurred by online
stores like other retail stores. The retail stores have to rent store space, hire manpower, pay electricity and after all that to offer
discounts to customers is not possible. The conflict between the offline retailers and their online counterparts has really come
to a head, and for the traders at least, the situation has started to look desperate. Their continued survival could depend on
the brands' support at this stage but not every brand is giving the support. The fact that online discounts and sales have
come to dictate pricing in India. While customers benefit from reduced pricing and increased convenience, the extent of the
impact that online retailers like Flipkart and Amazon are having on the day-to-day operations of brick-and-mortar stores is
something very few have paused to think about. Thus it can be concluded that the offline retailers will surely have a tough
time in future
GIRISH PATEL
II MBA(Finanncial Management)
16
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EDITORIAL TEAM
CHIEF EDITOR
Dr JAIN MATHEW
HEAD OF DEPARTMENT
MANAGEMENT STUDIES
ACADEMIC CO-ORDINATOR
PROF SURESHA B
FACULTY CO-ORDINATOR
Dr SUNITA PANICKER
EDITORS ANKITA BHATTACHARYA
ANUPAMA SAPRU
ERICA NIKHITA D’SOUZA
NIVYA DEVRAJ
SAI KRISHNA
CREATIVE TEAM UMME SALMA
18
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