INDIA

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INDIA

Question 1

The trade barriers present in India economic sector include

1). Tariff, import duties and taxes

The tariff barriers contribute largely to the reduced rate of trading. There is a great variation of tariffs in different sectors and product categories. India tariffs rates are quite high as compared to other countries (Kapila, Raj, and Uma 45). This is despite being reduced over the years. The import tariff consists of an additional duty totaling to 30%. The country still issues out substantial tariffs that hinder any trading transactions with the European Union. The tax imposed on foreign companies is approximately 30%; this hinders foreign investment by the foreign companies especially in retail trade thus an obstacle to the trading process.

2). Technical barriers to trade

These barriers arise from India’s restrictions on some foreign products for hygienic reasons and other products that require certification and thorough testing before importation is allowed. The standardization board of India demands that some of the imported products must meet the standards outlined by the Bureau of Standards that are quite similar to the ISO standards (Kumar, 34). The major restrictions are placed on imported foods that should meet the requirements in labeling which should be inclusive of the retailing price. The country still has restrictions on some products and has banned their importation unless under special circumstance which require federal authorization or licenses to import.

Question 2

The Gini Coefficient is a dispersive measure that describes the distribution of income among the citizens and households within a certain economy that deviates from the expected distribution (Parameswaran 65).

 Question 3

According to the standard set by Asian Development Bank, a quarter of Indian’s total population comprises of the middle class. This totals to 24.3% of the total population of India.

Question 4

Corruption index measure is a list that ranks countries using the criteria of the transparency in transactions and the levels of corruption present.

Question 5

Kenya ranks at position 136 out of a total number of 177 countries under survey with 27 points out of the possible 100, with 0 as very corrupt to 100 that is highly transparent.

Question 6

 It is a statistical measure that was jointly developed by the Wall Street Journal and the Heritage Foundation whose aim is to rank nations by their degree in economic freedom as compared to other nations. It comprises of a sequence of ten fiscal measurements with economical freedom being viewed as the right of every citizen to regulate his/her property and labor (Parameswaran 86).

Question 7

The factors of economic freedom include

            Business freedom: This is described as a quantitative measure on the capability to start up a business venture and manage it and the role played by the government in the regulatory process.

            Trade freedom: This is a measure of the freedom present in the cases where there are no tariffs and tariff barriers

            Monetary freedom: It is a combined measure that quantifies the price controls and stability. It reflects on the inflation rate as it affects the price controls.

            Government size: This measure shows the overall government expenditure that is denoted as GDP inclusive the cumulative score.

            Fiscal freedom: This is a measure financial independence in the banking sector free from government control.

            Property rights: This measure assesses the right of a citizen to own property under the protection of the government and the stated laws.

            Freedom from corruption: Corruption is viewed as a vice that corrode the economic freedom of a nation therefore the higher the level the lower the chances of economic advancement.

            Labor freedom: This measure scrutinizes the labor market of a country by evaluating its lawful and regulatory structure.

Question 8

Property rights -30.0

Freedom from corruption-21.0

Business freedom-55.8

Monetary freedom- 74.9

Labor freedom-64.0

Government spending-74.6

Fiscal freedom-78.0

Trade freedom-72.8

Investment freedom-50.0

Financial freedom-50.0

Kenya scores an average of 57.1 making it the 111^th freest economy according to the 2014 index. Question 9

The ease of dong business sin Kenya is ranked at 134 in 2014 ranking. A drop in the ranking compared to the 2013 ranking that was 128. Time taken to set up a business takes approximately 32 days with payment of KES 17,200. The procedure of starting up the business include

– Reserving a unique company name at the registrar

– Stamping the memorandum and articles of association, and a statement of the nominal capital

– Paying stamp duty at a designated bank

– Signing the Declaration Compliance before a commissioner of oaths or a notary public

– Registering with the National Social Security Fund

– Registration with the National Hospital Insurance Fund

–  Making a company seal

Question 10

Market potential index is aggregate value created by combing investment components together and expressing their total value (Szentes 53). It is a representation of the stock market in it entirety. The factors considered in describing the market potential index include

1. Market Size: It describes as the total of potential sales in a given market
2. Market Growth Rate: This comprises the analysis of the trend in the market and the sales of matching items.
3. Market Intensity: The rate of product by the private consumers,
4. Market Consumption:  This is a measure of the percentage share by the middle class in both consumption and income
5. Commercial Infrastructure: This is a measure of the overall infrastructure and the overall users.
6. Economic Freedom: It is the ability of a country to offer its citizens freedom in contributing to the economy through trading in the private sector.
7. Market Receptivity: This is a representation of the trade as a percentage. It is represented as GDP
8. Country Risk – This is a measure that asses of investing in a certain country that is reliant on the economic changes experienced thus in turn affecting the profits acquired from the trade (Szentes 62).
   Question 11

1. Market Size-73.1
2. Market Growth Rate- 6.0
3. Market Intensity- 5.8
4. Market Consumption-64.1
5. Commercial Infrastructure- 48.0
6. Economic Freedom- 50.0
7. Market Receptivity-62.0
8. Country Risk -20.2
   
   

Works cited:

Kumar, Arun. The Black Economy in India. New Delhi: Penguin Books, 1999. Print.

Kapila, Raj, and Uma Kapila. India‘s Economy in the 21st Century: Collection of Select Articles. New Delhi: Academic Foundation, 2002. Print

Parameswaran, Sunil K. Equity Shares, Preferred Shares and Stock Market Indices. New Delhi: Tata McGraw-Hill, 2007. Print.

Szentes, Tamás. World Economics. Budapest: Akadémiai Kiadó, 2002. Print