Commerce Optional (UPSC-IAS)

A financial system is a network of financial institutions, financial markets, financial instruments and financial services to facilitate the transfer of funds. The system consists of savers, intermediaries, instruments and the ultimate user of funds. The level of economic growth largely depends upon and is facilitated by the state of financial system prevailing in the economy. Efficient financial system and sustainable economic growth are corollary. The financial system mobilizes the savings and channelizes them into the productive activity and thus influences the pace of economic development. Economic growth is hampered for want of effective financial system. Broadly speaking, financial system deals with three inter-related and interdependent variables, i.e., money, credit and finance. For Commerce Optional :- Join 🔜@commerceoptional

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Industrial Relations in India Industrial relations are concerned with the relationships between management and workers and in this context the role of regulatory mechanism comes into sharper focus in resolving any industrial dispute. The relations between workers and management have undergone massive changes in our country. There had been a system of king and his subjects, all should work to improve the coffers of the king. Later Zamindars came and workers were bonded labourers and were at their mercy at all respect. Soon after the formation of East India Company and British Rule, a heart less hires and fire system was established. Industrial workers were no man’s child. Neither the employers nor the government cared for them. There were no union, also. India saw the awakening of the working class t the end of British period. The World War II, particularly, forced the employers to become friendlier with the workers. Out of their self interest to see uninterrupted production during war time, they became benevolent.

Suggestions for Improvements of IR Few suggestions are given below that come with the promises of improving the industrial relations and reducing the disputes between the parties 1. Trade unions should be strengthened democratically so that they can be a potent part of the industrial relations system. 2. Employers should be more transparent in their dealings with the workers which in other way will help to build respective confidences and progressive outlooks of the workers. 3. They should have open minded flexible collective Bargaining. 4. Workers should be allowed to participate in the management through forums, committees and councils. 5. Sound labour policy, planning and articulation of the action plans should get extreme priorities. 6. Proper leadership and communication are the essential requirements of good industrial relations. 7. Enforcement of discipline is another prerequisite of good industrial relations. 8. Trade unions activities should be controlled by the workers themselves and not by the outside leadership. 9. Equity in distribution of wealth by acknowledging workers as team members

Features of TQM 1. TQM is a pragmatic long-term systems approach: TQM is not a randomized approach. It is not a buzzword. It is a concept, which can be adopted and practised through proper planning, systematic evaluation and allocating responsibilities and resources. It is also not a onetime strategy but a long-term continuous approach. 2. TQM is initiated and driven by top management: TQM is a strategic direction and only the top management can trigger such a direction. Developing organisational vision, mission, philosophy, strategies, objectives and plans is the responsibility of the top management Top management, therefore, needs to be involved in TQM and the quality improvement process and should lead the new way of thinking to bring innovations. 3. TQM aims at bringing about a total cultural change in every facet of the organisation: TQM creates an organisational culture, which is conducive to continuous improvement. Treating every other person receiving help as a customer and directing all efforts to satisfy his needs is the primary purpose of every person in the organisation. 4. TQM interlinks and integrates the various subsystems of the organisation: Each department in the organisation strives for excellence and tries to achieve its set objectives. However, in most cases these departments conflict either in their objectives or approaches. TQM tries to break down the barriers between the departments and integrates the objectives of various departments with the main objective of the organisation so as to follow the same common, unified approach for meeting the customer requirements.

• Workers’ participation may foster a more cooperative attitude amongst workers and management, thus, raising the efficiency by improving team spirit and reducing the loss of efficiency arising from industrial disputes. • Workers’ participation may act as a spur to managerial efficiency. Conversely, it has been pointed out that the absence of participation results in misunderstanding, resistance, low morale and suspicion. • generate commitment of all employees to the success of the organization; • enable the organization better to meet the needs of its customers and adapt to changing market requirements and hence to maximize its future prospects and the prospects of those who work in it; • help the organization to improve performance and productivity and adopt new methods of working to match new technology, drawing on the resources of knowledge and practical skills of all its employees; • improve the satisfaction the employees get from their work; and • provide all employees with the opportunity to influence and be involved in decisions, which are likely to affect their interests.

Objectives and Aims of WPM It would be more appropriate to classify the objectives of Workers Participation in Management in the following broad categories: Ethical or Moral Objectives In an ethical or moral context, participation in decision making is designed to promote individual development or fulfilment in accordance with the conception of human rights and dignity to which the Universal Declaration of Human Rights (1948) probably gives the most widely published expression. The declaration reads-“All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood. Further, everyone, as a member of society… is entitled to realization…of the economic, social and cultural rights indispensable for his dignity and the free development of his personality”. The Special Advisory Committee, set up by the Government of Jamaica, defined “Workers’ Participation” as “the extension of the individual’s human rights at the work place” and stressed that “the procedures, institutions, rules and styles of management should bring the worker’s recognition, treatment and attention as a human being rather than as a mere statistical unit of production” Socio-Political Objectives Political democracy ceases to have much significance in the absence of democracy in economic life. A citizen cannot be regarded as sufficiently mature for political democracy if he is denied democratic rights in his economic life. The industrial democracy programme adopted by the Swadeshi Trade Union Confederation in 1971 emphasised: “Industrial democracy is part of the effort made by the labour movement to extend democracy throughout society…Life away from the workplace has developed in one way and life at the workplace in another. The difference constantly grows and is at the root of the increasing need which employees feel to exert an influence on conditions of work and on management…If arbitrary situations are allowed to persist in one sector of society, they are an obstacle to the progress of democracy in the other sectors…Industrial democracy should be regarded as part of the general process of democratization.” In our own country, the Second Five Year Plan, which was directed to the establishment of a socialist society, stated that a socialist society was based not only on cash incentives but also on the idea of serving the community and its willingness to recognize such service. So, individual workers must be induced to feel that in their own way they were helping to build a state directed towards progress. Consequently, the introduction of industrial democracy was a prerequisite for the establishment of a socialist society. Economic Objectives Economic objectives relate directly or indirectly to increasing the efficiency of the undertaking. By associating the workers with the decisions taken, it is hoped to improve the quantity and quality of output and the utilisation of labour, raw materials, equipment and introduction of new techniques. There is growing awareness of the fact that the knowledge, experience and intelligence of those who actually do the work are not sufficiently used for improving industrial organisation and methods. Through participation, it is also hoped to reduce the areas of conflict of interest between management and labour and to improve labour relations. The implications of workers’ participation in management is summarised as follows; • Workers have ideas, which can be useful. • Effective upward communication facilitates sound decision-making at the top. • Workers may accept decisions better if they participate in them. • Workers may work harder if they share in decisions that affect them. • Workers may work more intelligently if, through participation in decision-making, they are better informed about the reasons for and the intention of decisions

Workers’ Participation in Management The concept of workers’ participation in management is a broad and complex one. Depending on the socio-political environment and cultural conditions, the scope and content of participation may change. Various terms have come to be used to denote different forms and degree of participation. For example, joint consultation, labour-management cooperation, codetermination, joint decision making, workers’ participation in industry and workers’ participation in management. These terms or their variants have been interpreted and explained differently. In any case, a common thread running through all interpretations is the idea of associating employees in managerial decision- making. The International Institute for Labour Studies defined WPM as “the participation resulting from practices which increase the scope for employee’s share of influence in decisionmaking at different tiers of organizational hierarchy with concomitant assumption of responsibility”.

Measures to improve the Trade Unions 1) There should be a strong base to develop the Trade Union by safeguarding the interest of the members and by achieving the target of production. 2) To make effective unionism there should be one union in one industry. JOIN SOON @COMMERCEOPTIONAL 3) As most of the unions are influences by political parties. Hence, there interference should be eliminated. 4) There should be training programmes to develop the internal leadership. 5) It will be more effective if office bearers of the Trade Unions are well paid. JOIN SOON @COMMERCEOPTIONAL 6) As most of the Trade Unions in India are financially weak. This problem can be solved by raising the membership and collecting more funds for unions. 7) Most of the unions are engaged in industrial disputes they do not undertake economic, social and cultural activities which are equally important for raising welfare of the working class. As a considerable number of Trade Unions are not recognized. Hence, the proper recognition of unions will make them more effective.

Obstacles in the future growth of trade unions Our trade unions are not so developed as in the western countries due to following reasons:- 1) Outside Leadership: In India Trade unions have been dominated by outside leadership. It is a notable feature of Trade Union in India. Now a- days these leaders are professional political Leaders. Hence, they exploit the sentiments of people for their political purpose. 2) Low membership: Though the number of Trade Unions in India has considerably increased but membership per union has declined. With the help of these data it can be proved. That in 1927-28 the average number of members per union was near about 3500. it was reduced to about 1400 in 1946-47 and further it decreased to 675 in 1985. The union having low membership would not be more effective. 3) Uneven growth of Trade Unions:- The degrees of unionization varies from Industry to industry in coal industry it is 6.1%, cotton textile 56%, tobacco manufacturing 70%, Electricity and gas it is 39% , hence, it can be said that In India Trade Unison activities are concentrated in large scale Industries but in small scale industries it is nominal. 4) Multiplicity of Trade Unions: It is also a major problem of Trade Union in India. It has been generally seen that there are many Trade Union in the same Industry. There are sometime as many as 20 unions in the same plant. As the Trade Union act, 1926 permits that any association of seven workers can be registered as unions. Multiplicity of unions instead solving the problems of workers is fighting among themselves. So, the purpose of Trade Unions Fails. 5) Absence of paid office Bearers: In India, majority of Trade Unions do not have whole time paid office bearers. Many of them work on honorary basis. Since, they are not paid. They devote only limited time and energy to Trade Union activities. JOIN SOON @COMMERCEOPTIONAL 6) Weak financial position: In India, most of the Trade Union’s financial positions is very weak because their average yearly income is inadequate, as subscription rates are very low. The reason for weak financial position is also multiplicity of unions

The Characteristics of trade unions 1. Trade unions have a statement specifying that organization is a trade union. 2. Trade unions have a statement of its principle objectives. 3. Registration with Registrar of Trade Union. 4. Independence from employer, which may be evident from the certificate issued by the Registrar of Trade Union. 5. Affiliation with central trade union organization. JOIN SOON @COMMERCEOPTIONAL

Determining factors of industrial relations Good industrial relations depend on a great variety of factors. Some of the more obvious ones are listed below: 1. History of industrial relations – No enterprise can escape its good and bad history of industrial relations. A good history is marked by harmonious relationship between management and workers. A bad history by contrast is characterized by militant strikes and lockouts. Both types of history have a tendency to perpetuate themselves. Once militancy is established as a mode of operations there is a tendency for militancy to continue. Or once harmonious relationship is established there is a tendency for harmony to continue. 2. Economic satisfaction of workers – Psychologists recognize that human needs have a certain priority. Need number one is the basic survival need. Much of men conducted are dominated by this need. Man works because he wants to survive. This is all the more for underdeveloped countries where workers are still living under subsistence conditions. Hence economic satisfaction of workers is another important prerequisite for good industrial relations. 3. Social and Psychological satisfaction – Identifying the social and psychological urges of workers is a very important step in the direction of building good industrial relations. A man does not live by bread alone. He has several other needs besides his physical needs which should also be given due attention by the employer. An organization is a joint venture involving a climate of human and social relationships wherein each participant feels that he is fulfilling his needs and contributing to the needs of others. This supportive climate requires economic rewards as well as social and psychological rewards such as workers’ participation in management, job enrichment, suggestion schemes, redressal of grievances etc