Regional Economic Integration refers to agreements among countries in a geographic region to reduce and ultimately remove tariff and non tariff barriers to the free flow of goods, services and factors of production between each other. The various levels of REI are

1. Free Trade Area: All barriers to trade such as tariffs and quotas are removed among member countries t promote free trade. Example- NAFTA (North American Free Trade Agreement)

2. Customs Union: The next step in the integration process is the establishment of a common external trade policy with respect to the non member countries. Example- Andean Pact

3. Common Market: In addition to the above conditions it require free movement of factors of production such as  labour, capital and technology between countries. Example- European Community before 1994

4. Economic Union: It require a common currency, a common monetary and fiscal policy and harmonisation of member’s tax rates. Example- EU (European Union)

5. Political Union: This requires the establishment of a common parliament and other political institutions. Example- United States. However EU also has some elements of a political union.

The Economic Case for REI: REI can be seen as an attempt to achieve gains from the free flow of trade and investment countries beyond those attainable under international agreements such as the WTO. Also it is easier to establish a free trade and investment regime among a limited number of adjacent countries than among the world community. Coordination and policy harmonisation problems are largely a result of the number of countries that seek agreement. The greater the number of countries involved, the more perspectives that must be reconciled and the harder it will be to reach agreement.

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Organised retailers in the form of malls and hyper markets such as Big Bazaar, Pantaloon, More and Reliance Fresh have become household names among the urban masses. The organised retail market in India which represents just 10-15% of the total retail market of Rs 4,00,000 crore has a great scope for entry of new enterprises. The triggers for increasing popularity of organised retailing are as follows:

1.  Labour costs have risen and it has become uneconomical to employ staff in mom and pop stores i.e. the kirana shops.

2.  The changing family structure with double income families with fewer children  means less frequent grocery shopping with more purchase per visit.

3.  Increased disposable income with the people because of rapid growth of per capita income coupled with low interest rates.

4.  The formal financial system  facilitates interest  banking and inexpensive credit, which has boosted consumption.

5.  Changing real estate prices made people move to suburbs and the stores with parking facility and food stalls could open in modestly priced open spaces.

6.  With the development of infrastructure, new roads and better mobility has made shopping from organised retailer easier.

The traditional kirana stores find it difficult to compete with the big organised retailers because of the following reasons.

1.  Inadequate financial resources.

2.  Lack of sufficient space for expansion. Purchase of new space is not affordable.

3.  Lack of trained workers because of low wages.

4.  Poor window display at the retail store.

5.  Lack of facilities for consumer which are available at organised retail stores.

6.  Poor management of the retail store.

Despite all the above constraints, kirana stores continue to operate in India because of their proximity to the consumer and consumer trust in them. The reasons for the continuing popularity of kirana stores among Indian masses are

1.  The kirana stores are located in neighbourhood of consumers and hence are more convenient and time saving. One need not travel to the market place for shopping.

2.  Moreover being located in the neighbourhood they can meet the immediate needs of people. For items of small valueor for just one or two items one need not go to a mall or hyper market.

3.  The owners of kirana stores offer advice to consumers and help them in making the right choice.

4.  They offer goods on credit and also deliver goods at the residence of the buyer. They accepts orders over the phone and also ensure home delivery of low value items to customers.

5.  Such stores follow relationship marketing because of which many people patronise kirana stores.

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Rural markets are tomorrow’s markets in India. They are big attractions for producers and marketers. For instance, Hindustan Unilever Ltd. (HUL), ITC, Parley Foods, and many other companies are concentrating on the rural markets as the urban markets have become saturated. The scope of future expansion lies in the development of rural markets. In fact, rural marketing should be recognized as developmental marketing by big business firms.

In India it has gained greater significance these days as the overall growth of the economy has resulted in a substantial increase in the purchasing power of the rural communities. On account of the green revolution in India, the rural areas are consuming a large quantity of industrial and consumer products produced near the urban areas. In this context, a special marketing strategy, namely, rural marketing has replaced agricultural marketing which was confined merely to selling farm machines and other inputs.

Due to competition in the urban market, the market is more or less saturated as most of the capacity of the purchasers have been targeted by the marketers. So the marketers are looking for extending their product categories to an explored market, i.e., the rural market. This has also led to the CSR activities being done by corporates to help the poor people attain some wealth to spend on the product they want. For instance, HUL’s Project Shakti is not only helping the company earn some revenues but also helping the poor women of the village to earn some money which is surely going to increase their purchasing power. Similarly, ITC’s e-Chaupal is helping the poor farmers get all the information about the weather as well as the market price of the food grains they are producing and those of inputs (seeds, fertilizers, etc.) they want to buy.

The Indian rural economy has not been impacted by the global economic slowdown, according to a recent study by the Rural Marketing Association of India (RMAI). The study found that the rural and small-town economy which accounts for 60% of India’s income has remained insulated from the economic slowdown. Moreover, rural incomes are on the rise was driven largely due to continuous growth in agriculture over the years and increase in employment opportunities in the rural areas.

According to the Technopak study, rural demand for fast moving consumer goods (FMCG), pharma, auto, and consumer durables is estimated to match sales generated in urban areas soon. While durable’s market shrunk in urban India, rural market is seeing a 15% growth rate. FMCG sales are up 23% and telecom is growing at 13%.

40% of the revenue of Maruti Suzuki comes from rural India. That is why the company is opening new showrooms in rural and semi-urban areas. Mahindra & Mahindra is bullish on the rural and semi-urban markets, with its utility vehicle, Scorpio clocking over 60% sales in 2011-12 from the rural markets as against 20% earlier. TVS Motor also registered around 50% of its sales from the rural and semi-urban markets during 2011-12.

Many leading consumer durable companies are now increasing their presence in rural India. Recently, LG set up 45 area offices and 59 rural and remote offices. Moreover, it has outlined plans to invest around US$ 40 million towards the development of entry-level products targeted at rural markets.

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Workforce Diversity means the differences in gender, race, religion, culture, ethnicity, age, family or career status, religion and disability that exist among employees, customers, suppliers and other stakeholders. Managing and Valuing Diversity is a key component of effective people management. Managers are responsible for creating an environment which values diversity and for reinforcing equality principles through the day -to-day management of staff. Diversity has various aspects such as being impartial in the workplace, choosing people for the right reasons, fair and reasonable treatment for all and equal opportunities.

The main objectives of workforce diversity are:

1.To create an environment where employees understand the standards of ethical conduct and abide by those standards.

2.Develop and sustain a culture where diversity is valued and leveraged, all employees are treated with dignity and respect and everyone has equal access to opportunities.

3.Provide a mechanism for employees to confidentially communicate breaches in ethical behaviour without fear of retaliation or any action against them.

Now the question arises why at all should care about workforce diversity. Why is it important for them to focus on diversity. When people are treated with respect and dignity they perform better and stay longer. It enables the management to attract and retain the best talent whoever and wherever they may be. Diversity also provides different perspectives on the same problem and thereby improves the decision making process. Ignoring Diversity issues can cost the organisation in terms of time, money and efficiency.

1.Unhealthy relations between people may lead to conflicts and ultimately loss of productivity.

2.Inability to retain talented people of all kinds may lead to loss of investment in recruitment and training.

3.Some employees may take legal action in case of discrimination which could spoil the company’s public image.

Enterprises that don’t embrace diversity whole heartedly would perhaps be indulging in “organised abandonment”. Diversity is an economic imperative, not just a social cause and we must celebrate it, not just affirm it. It needs deep commitment and not just mere tokenism.

HOW TO MANAGE DIVERSITY

The key to managing diversity is to train and support managers within the organisation. Managers need to understand all the individuals within the team, balancing conflicting needs and opinions. They must also understand and deal constructively with their own bias and prejudice. By offering equal opportunity to each employee on the basis of their performance a company can increase their performance. Each employee must have the opportunity to be heard and feel that their opinions are respected. It is also important to ensure that Diversity and inclusion co-exist because when you integrate well you create magic. While diversity is the ‘mix’, inclusion is ensuring that the mix collaborates well to achieve organisational objectives. Inclusion is fostering an environment and culture which comprehends, respects, embraces and leverages the differences that each individual brings to the organisation. Thus Diversity is our need and Inclusion is our responsibility.

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According to Economic Survey 2010-11, Small Scale Industries (SSI’s) have played an important role in achieving the national objective of growth with equity and inclusion. SSI’s have been entrusted with multiplicity of objectives such as:

1.Employment Generation- They are more labour intensive in nature i-e they require more units of labour and less capital and are best suited for solving the problem of unemployment.

2.Self Employment- They provide immense opportunities for self employment as they can be started with very less capital and training.

3.Less Capital intensive– They require relatively small amount of capital to produce a commodity as compared to large scale industries and thus are ideal to bring about industrial development in a country like India which is capital scarce.

4.Import Light– Low import requirement in the capital structure of SSI’s reduces the need for foreign capital.

5.Export Promotion- The goods produced by them are in great demand in foreign countries, thus they offer vast opportunities for export promotion and earning valuable foreign exchange.

6.Equal Distribution of Income– They have a capacity to bring about more balanced distribution of income and wealth as they are generally set up in the backward areas.

7.Decentralisation of Industries– These are usually located in backward regions instead of already developed urban industrial hubs. Thus they promote the objective of regional development.

8.Support to Large Scale Industries- They are responsible for providing all the basic raw materials to the large scale industries which are the basis of their operations and development.

9.Agricultural Development- The development of SSI’s will divert labour from agriculture to industries which will bring about a more desirable occupational structure. SSI’s can bring about agricultural development through promotion of agro based industries like agricultural machinery, repairs and service workshops,etc.

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Human Development is the process of widening people’s choices as well as raising the level of well being achieved i-e it is the process of enlarging choices of people- whether economic, social, political or cultural. “People are the real wealth of a nation.” However the importance of GDP growth and economic stability can not be understated as both are essential for sustained human progress, as is clear in many countries that suffer from their absence. But the ultimate yardstick for measuring progress is people’s quality of life.

According to HDR (Human Development Report) 2013, India’s HDI value is 0.554 and India is in the medium human development category. India is positioned at a lowly 136 out of 187 countries. HDI is a summary measure of human development which takes into account three components- A long and healthy life, Knowledge and a decent standard of living. India’s HDI value is below the average of 0.630 of medium human development countries.

To improve human development efforts must be made in the following direction:

1. It is essential to extend basic public services such as health, education, clean drinking water, sanitation, etc., to those who are deprived of them.

2. It is time to bridge the large gaps in health status indicators which currently place India below some of the world’s poorest countries. Supply of safe drinking water and access to sanitation to all must be a top priority.

3. We must pay special attention to gender equity and help create an enabling environment for social, economic and political empowerment of women.

4. Focus must be on improving women’s socio-economic status by mainstreaming gender equity concerns in all sectoral policies and programmes.

To sum up, competing for human development is a healthy rivalry- more healthy it might be argued than competing on GDP. The two main challenges faced by India are to diminish the extreme inequalities and ensure that the rising tide of poverty brings opportunity for many and not just the select few.

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