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A Paper on Apprenticeship in Chemical Industries Essay

I would like to acknowledge and extend my heartfelt gratitude to the following persons who have made the completion of this summer project: Our college, METAS ADVENTIST COLLEGE, for giving this opportunity. My college mentor Mr. D. Mukherjee Sir for his vital encouragement and support. Reliance industries ltd. , India’s world renowned corporate house for giving me a wonderful platform to undergo this summer project. Mr. Himanshu Bhatt (HOD), for his good leadership and leading me to the right places. Mr. Suresh Lachhwani, HR Manager for his understanding and assistance.

Mr. Geyal Bhatt,HR manager for his constant reminders and much needed motivation. Mr. Vijay Shethna, HR Manager for his guidance. Mr. Naman Buch & Mr. Giriraj Mistry for their valuable support and help throughout my project. Most especially to my family and friends. And to God who made all things possible COMPANY PROFILE The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India’s largest private sector enterprise, with businesses in the energy and materials value chain. Group’s annual revenues are in excess of USD 27 billion.

The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration – in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production – to be fully integrated along the materials and energy value chain.

The Group’s activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. The Group exports products in excess of USD 15 billion to more than 100 countries in the world. There are more than 25,000 employees on the rolls of Group Companies.

Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited) and Reliance Industrial infrastructure Limited. RELIANCE AT A GLANCE This is the story of a company with a vision of how it grew from being a small trading unit to be ranked among the top 50 emerging market companies in the world. It is the story of how a company helped place India firmly on the world industrial scenario. Taking with a family, a growing family that includes collaborators, suppliers, customers, employees and the largest based in the country.

It is the story of how company’s vision has extended to include newer challenges, new goals and most of all it is a story of a company where the “Growth is Life”. He (Mr. Dhirubhai Ambani) made a beginning by setting up a company viz. Reliance Commercial Corporation. “Reliance” means reliability, which is the main principle of any business and we believe that this success in business lies in the principle. He created an empire of Reliance in the various fields such as PETROCHEMICALS, POLYMERS, TEXTILES AND PETROLEUM.

The expert team of the technocrats of the World Bank has come to conclusions that reliance textile unit is the top most quality conscious textile unit among the developed countries. Reliance Commercial Corporation went public in the year 1971. In the next few years the company made a massive investment exceeding 40,000 cores of rupees in the industrial areas of petroleum, Gas, Chemicals, Textile, Special Economic Zones and life sciences and established supremacy in diverse industrial areas which took the Reliance group to the peak of Industrial areas.

History of Reliance – Hazira Reliance Industries Ltd, Hazira started in 1988. RIL, Hazira is one of the flagship companies of reliance group. It is largest integrated Petrochemicals and polyester complex of India. It dealt with various commodities including Nylon and Rayon. Eight years later it started the manufacturing of synthetic fabrics in February 1996. Eight years later it is started with the manufacturing of synthetic fabrics under the brand name of “Vimal” in textile mills at Naroda. In three years Reliance establish itself as the largest textile group in the country.

The Reliance Industries Ltd, Hazira Manufacturing Division at Hazira near Surat in Gujarat is situated in 750 acres land on the banks of river Tapti. The land when procured was very low and marshy and required extensive site development including 7 million cubic meter of soil filling to raise the ground level upto 6ft. In order to protect the environment and avoid ecological disaster, conventional methods were employed to pump out the river sand for hydraulic filling. The marshy soil with load bearing capacity called for extensive pilling work to be carried out.

In an unprecedented construction activity around 18,000 piles were driven for the first phase in about 6 months time. Reliance adopted the unique concept of implementing the Phase 1 down stream plants at Hazira with imported raw material (Ethylene) and intermediates (Ethylene Dichloride, EDC) to ensure completion and commissioning of the plants in 24 months time. Reliance is the first complex in the world to starts operations based on imported Ethylene, British Petroleum followed then. Ethylene unloading terminal is built in collaboration with L&T and LGA of Germany.

Ethylene storage is one of the largest in the world. It has 2 tanks with uble wall protection and concrete wall outside as an advance safety feature Contribution to the economy Reliance Group revenue is equivalent to about 3. 5% of India’s GDP. The Group contributes nearly 10% of the country’s indirect tax revenue and over 6% of India’s export. Reliance is trusted by an investor family of over 3. 1% million-India largest. Abbreviations and acronyms AITT All-India Trade Test AOCP attendant operator (chemical plant) API active pharmaceutical ingredient ATI advanced training institutes.

ATS Apprenticeship Training Scheme BTC basic training centre cGMP current good manufacturing practices CTS Craftsmen Training Scheme DCS distributed control system DGE&T Directorate General of Employment and Training GDP gross domestic product HOCL Hindustan Organic Chemicals Limited HRD human resources development HRM human resources management ITC industrial training centre ITI industrial training institute MITI model industrial training institute NAC National Apprenticeship Certificate NSCI National Safety Council of India NCVT National Council of Vocational Training.

PLC programmable logic controller R&D research and development RIC related instruction centre RIL Reliance Industries Limited SCVT State Council for Vocational Training SHE safety, health and environment SOP standard operating procedures SSI mall-scale industry VET vocational education and training INTRODUCTION OF CHEMICAL INDUSTRIES The chemical industry is a base of modern society. It is huge, one of the largest industries in the world. As societies and economies grow, so does the chemical industry. It is of strategic importance to the sustainable development of national economies.

The world chemical industry employs an estimated 14 million workers and accounts for about 10 percent of national GDP in developed countries. World trade in chemicals reached a record US$700 billion, and the industry is still growing. The chemical industry in Western Europe shows steady growth, with annual averaged growth of over 4 per cent. The Asian chemical industry shows an increase reaching almost two-digit growth every year. The chemical industry keeps improving our standard of living and provides many of the essentials that our society needs.

The chemical industry produces more than 70,000 products. It is a highly capitalized industry. Much of the manual work has been replaced by automation, but significant parts of the operation still rely on human input. Workers’ skills are therefore crucial to the stable production and growth of the industry. The aim of this study is to explore in depth some practices of vocational education and training (VET) in the chemical industry in India, which is one of the leading chemical producers in Asia. Overview of the Chemical Industry in India The chemical industry is one of the oldest industries in India.

It not only plays a crucial role in meeting people’s daily needs but also significantly contributes to the industrial and economic growth of the country. In 2004, the total sales of the Indian chemical industry were about US$28 billion, or about 2 per cent of global chemical sales, which stand at about US$1. 7 trillion. It is the third largest in Asia and ranks at 12th in world chemical production. Some statistics on the contribution of the Indian chemical industry to the national economy are given below: The Indian chemical industry at a glance in 2005 Total sales: US$32 billion.

The chemical industry constitutes: – 7. 5 per cent of India’s total GDP; – 10 per cent of India’s total exports; and – 12 per cent of industrial production in India. Unionized chemical workers account for 17 per cent of the total unionized workforce (or about 1 million unionized workers in the chemical industry). 20 per cent of excise and import duty collection The Indian chemical industry is highly fragmented. The primary cause of the fragmentation is due to the Government’s corporate licensing policies, allowing various sizes of chemical firms in order to address the supply and demand gap of chemical products.

The sectoral classification of the Indian chemical industry in 2004 is given in figure 1. The dyestuff sector is one of the important segments in the chemical industry in India, which is closely related with other chemical sectors. The textile industry is the largest consumer of dyestuffs, nearly 80 per cent of total dyestuff production. While in the 1950s, India imported dyestuff, the country’s dyestuff sector has grown into a very strong industry and has become a major foreign currency earner. India has emerged as a global supplier of dyestuff and dye intermediates, in particular reactive, acid, vat and direct dyes.

Fertilizers and pesticides played an important role in the “Green Revolution” of the 1960s and 1970s. But the consumption of pesticides in India has been decreasing, and is now lower than any other developing country. India now turns to be an exporter of agrochemicals, showing an impressive growth in the last five years. In 2004, fertilizers accounted for about 18 per cent of India’s total chemical production. Indian chemical industry: Sectoral classification, 2005 Fertilizers; 18% Man-made fibres; 16% Pharmaceuticals; 15% Organic chemicals; 15% Soap & toiletries; 11% Polymers; 6% Inorganic chemicals; 8% Paints & dyes; 5%.

Pesticides; 3% Other chemicals; 3% National framework of vocational education and training (VET) Introduction In 1947 India was independent. In the early 1950s, India launched a five-year plan with massive industrializing drives to stimulate workers to acquire high skills. To meet this end, the Directorate General of Employment and Training (DGE&T) in the Union Ministry of Labour initiated the Craftsmen Training Scheme (CTS) by establishing about 50 ITIs for imparting skills in various vocational trades to meet the increasing skilled workforce requirements for the advancement of technologies and the industrial growth of the country.

VET is a concurrent subject of both central and state Governments in India. VET-related matters, such as the development of training schemes, training policies, training standards, training procedures, organization of trade tests and issuance of certifications, are the responsibility of the central Government, whereas the implementation of training schemes largely rests with state Governments. The central Government created the National Council of Vocational Training (NCVT), a tripartite body representing central Government, employers and trade unions.

Similarly, the State Council for Vocational Training (SCVT) was established at the state level, with the same purposes as the NCVT. At the national level, at present there are two main vocational training initiatives, which are the CTS and the ATS. 1 The Government and chemical companies have dual responsibility for providing workers with training under the Apprentices Act, 1961. Craftsmen Training Scheme (CTS) Objectives The objectives of the CTS are: 1. To ensure steady flow of skilled workers in all industrial/service sectors; 2.

To raise the quality and quantity of industrial production by systematic training of workers; and 3. To reduce unemployment among the youth by equipping them with suitable skills for industrial workers. Salient features of the CTS Training is imparted in 50 engineering and 48 non-engineering trades through the industrial training institutes (ITIs) and the industrial training centres (ITCs) located throughout the country. The period of training varies from one to three years. The entry qualification varies from 8th to 12th class completed students, depending on the requirements of trade.

The training institutes have necessary infrastructural facilities. These institutes are required to conduct training courses as per the training curriculum decided by the NCVT. All-India Trade Tests (AITTs) are conducted in January and July every year by the DGE&T. After the completion of the training at the ITIs and ITCs, trainees must appear in the All India Trade Tests. National Trade Certificates will be awarded to those who pass the tests. The Certificates are recognized by the central Government for the purpose of recruitment at the central Government and the state-owned corporations.

About 70 per cent of the training period is allotted to practical training and the rest to theoretical training relating to trade theory, calculation and science, engineering, social studies including environmental science and family welfare. Broad-based modular training is offered in four central model industrial training institutes (MITIs). This training offers an advantage of re-orienting the training modules as per the changing skill requirements in the industry. Trades related to the chemical plant operators.

The trades related to chemical plant operators, the period of training and their entry qualifications under the CTS are summarized in table 1. Table 1. Trade, period of training and entry qualifications for chemical plant operators under the CTS Trade Period of training Entry qualifications Maintenance mechanic(chemical plant) 2 years Passed 10th class examination with physics, chemistry and mathematics under 10+2 system of education or its equivalent. Instrument mechanic (chemical plant) (a) 2 years (b) 6 months.

Passed 10th class examination under 10+2 system of education with physics, chemistry and mathematics as one of the subjects or its equivalent. Passed B. Sc. with physics and chemistry. Attendant operator (chemical plant) (a) 2 years (b) 6 months Apprenticeship Training Scheme (ATS) With the growing tempo of planned economy giving rise to increased industrial activity both in the public and the private sectors. Systematic trained manpower is vital for Industrial development and productivity. Apprenticeship training is the most important programme for training skilled workers for these industries.

India is one among the very few countries having a comprehensive and systematic Apprenticeship Training Scheme. In order to regulate and control of training the Apprenticeship Act of 1850 was enacted. Later on Parliament considered it necessary to enact a more comprehensive Act as the old Act if 1850 was found quite inadequate and so instead of just amending it, the new Act containing more detailed provision was enacted on the unanimous acceptance of recommendations of Shiva Rao Committee in 1961.

Subsequently Apprenticeship Rules were framed for smooth implementation of the Act in 1962 and it was enforced with effect from 1963. Its scope was extended in 1973 to cover Engineering Graduates and Diploma holders. At present 254 specified groups of Industries are brought under the purview of Act 137 trades are designed under the apprenticeship Act. The ATS is operated under the Apprentices Act, 1961. The law requires all companies to provide apprentice training to entry-level workers. Firstly, we will briefly discuss the aims and the background of the Act, followed by the discussion concerning the ATS.

BRIEF OBJECTIVES OF THE APPRENTICESHIP ACT 1961 ARE : (i)To regulate the programme of training of apprentices in the industry so as to confirm to the prescribed syllabi, period of training etc prescribed by the Central Apprenticeship Council, and (ii)To utilize fully the facilities available in the industry for imparting practical training with a view of meeting the requirements of skilled workers in the Industries. TRAINING OF TRADE APPRENTICES CONSISTS OF : 1. Basic Training 2. On the job training or Shop floor Training.

3. Related Instructions. INTRODUCTION. The Apprenticeship Act, 1961, come into force with effect from Ist March, Craftsman Training was proposed to be imparted under the Industrial Conditions on the shop floor. PURPOSE OF THE APPRENTICESHIP ACT, 1961. The Apprenticeship Act, 1961provides for the regulation and control of training for Apprentices in the country. This Act has been enacted in order to regularise the programme of their practical training and to ensure fully utilisation of the available training facilities.

The Apprenticeship Training Scheme has two fold objectives namely :- ( a )Maximum utilisation of training potential to relieve unemployment and ( b )To give more intensive training to the Apprentices so as to bring their level of skill to entertain specified standards. Evolution of the Apprentices Act, 1961 The National Apprenticeship Scheme started in 1959 on a voluntary basis. The Apprentices Act was enacted in 1961 and promulgated on 1 March 1962. Initially, the Act envisaged training of trade apprentices.

The Act was amended in 1973 to include training of graduates and diploma engineers as “graduate” and “technician” apprentices, respectively. The Act was further amended in 1986 to bring it within its purview the training of the 10 + 2 vocational training system as “technician (vocational)” apprentices. Administration of the Apprentices Act, 1961 The responsibility of administering the Apprentices Act, 1961, lies in the DGE&T. The DGE&T is also responsible for implementation of the Act with respect to trade apprentices in the central Government through the undertakings and departments.

This is done through six regional directorates of apprenticeship training located at Kolkata, Mumbai, Chennai, Hyderabad, Kanpur and Faridabad. State apprenticeship advisers are responsible for the implementation of the Act at the state level. In addition, the Department of Education in the Union Ministry of Human Resources Development (HRD) is responsible for the implementation of the Act with respect to graduate, technician and technician (vocational) apprentices.

This is done through four boards of apprenticeship training located at Kanpur, Kolkata, Mumbai and Chennai. Under the Act, the chemical industry is included in the categories of manufacture of basic chemicals and chemical products and manufacture of rubber, plastic, petroleum and coal products. APPRENTICESHIP TRAINING SCHEME (ATS) The Central Apprenticeship Council is a responsible organ to the ATS. The Council advises the central Government on designing the policies and prescribing the standards and principles in respect of the ATS.

It is a tripartite organ. The Union Minister of Labour is the Chairperson of the Council and the Minister of State for Education is the Vice-Chairperson. COVERAGE The apprenticeship training is obligatory on the part of employers in public and private establishments; they must have the requisite training infrastructures, as laid down in the Act. In 2005 nearly 18,000 establishments engaged in the apprentice training, of which 254 companies or groups of companies in the chemical industry were covered by The Apprentices Act.

For the attendant operators in the chemical plant, chemical companies must hire one apprentice trainee for every ten workers, excluding non-skilled workers. QUALIFICATIONS AND RECRUITMENT OF TRADE APPRENTICES. A person male or female not less than 14 years of age is qualified for being engaged as Apprentices. The entry educational qualifications for the Apprentice vary from 8th class or equivalent matric with mathematics and Ph/Chem/Biology/ English as prescribed by CAC.

The apprentice before engagement should also satisfy such standards of physical fitness as prescribed. The recruitment of apprentices is the responsibility of the employers . Employers can seek the assistance of Employment exchanges, Industrial Training Institutes, Directorate of Technical Education and Industrial Training, Apprenticeship section, Placement section or advertisement through press can be recruited in the month of Feb/Mar or Aug/Sept of every year against the assessed vacant seats.

The apprentices recruited during March/September shall complete their apprenticeship training during either of these two months and this subsequently helps them to appear in the All India Trade Tests of Apprentices held in the months of April and October every year without any idol period between the completion date of training and the dates of All India Trade Tests. The establishment can recruit trade apprentices from either of the following categories 1. Passed out trainees of Industrial Training Institutes. 2. Freshers possessing minimum educational qualifications.

BENEFITS TO WEAKER SECTIONS While recruiting apprentice employer has to ensure that scheduled castes/ scheduled tribes, minorities, physically handicapped and other weaker sections of the society get fair deal and are engaged as prescribed. CONTRACT OF APPRENTICESHIP Every person or if he/she is a minor his Guardian shall have to execute a contract of apprenticeship with employer in the prescribed form, which has to be registered with the concerned Apprenticeship Advisor. The Apprenticeship training will be imparted in pursuance of this contract.

The employer and the apprentices shall carry out their obligations under this contract. If where the contract of apprentice is terminated through failure on the part of the employer to carry out the term of contract and condition ( as notified under apprenticeship rules 6), he shall pay to apprentice compensation as prescribed. In the event of premature termination of contract of apprentice for failure on the part of apprentice to carry out the term and condition of contract ( as notified under Apprenticeship Rule 1991 ).

The surety at the request of apprentices hereby guarantor to the employer the payment of such amount as determined by the State Apprenticeship Advisor and towards the cost of training. The liability of surety is limited to amount equal to the three month stipend last drawn and with interest at 12% per annum. BASIC TRAINING AND RELATED INSTRUCTION The period of basic training is most of the cases is either one year or two years. Apprentices who have undergone institutional training of one or two years in I. T. Is are not required to under go basic training.

The time to be spent on related instructions during this period is 7 hours/ week i.e. one day per week. Where an employer employs in his establishment to 250 or more workers the entire responsibility for imparting basic training to apprentices is the responsibility of the employer himself. In case an employer in his establishment less than 250 workers, he shall have to bear only 50 percent of the cost of the basic training, the other 50 percent is borne by the Government.

As regards Related Instructions, it is imparted at the cost of Government. Employer is re-imbrued related instruction charges at the rate of Rs. 50 per apprentices per month, when he arranges to impart related instructions.

SHOP FLOOR OR ON THE JOB TRAINING & RELATED INSTRUCTIONS. The remaining period of Apprenticeship which in most of cases is one year or two years is on the job/shop floor training and it will be the entire responsibility of the responsibility of the employer whether he employs less than 250 workers in his establishment. Several employers may join together to form training-co-operatives for the purposes of providing on the job (practical) Training & related instructions. Related Instructions will be imparted during this period also at the cost of the Government.

The training will be according o the standards prescribed by the Government in consultation with the Central Apprenticeship Council or as laid down in the prescribed syllabi. OBILIGATION OF EMPLOYERS. The employer shall provide the apprentice with the training in the trade in accordance with the provisions of the Apprentices Act and the Rules made thereunder and in terms of the contract of Apprenticeship. If he is not himself qualified in the trade, he shall ensure that a duly qualified is placed in charge of the training of Apprentices. He shall look after the health, safety and welfare of Apprentices.

If personal injury is caused to an apprentice by an accident arising out of in course of his training as an apprentices, his employer shall be liable to pay compensation in accordance with the provisions of the workmen’s compensation Act. An employer shall pay stipend to every apprentice during the entire period of apprenticeship training. The minimum rates of stipend are as follows :- First Year Rs. 820/- per month Second Year Rs 940/- per month Third Year Rs 1090/- per month Fourth Year Rs 1230/- per month Employer can pay any higher rates of stipend to attract better candidates . Apprentices shall not receive any Bonus or incentive money.

Hostel accommodation if available may be provided to the Apprentices but this not obligatory under the Act. OBLIGATION OF APPRENTICE Every apprentice shall learn his trade conscientiously and diligently. He shall attend practical and related instruction classes regularly and shall carry out all lawful orders of his employers and superiors in the establishment. In the matter of conduct and discipline the apprentice shall be governed by the rules and regulations applicable to workers in the trade in the establishment. He will be a trainee and not a worker and shall not take part in any strike etc.

He shall also carry out his obligations under the contract of Apprenticeship. HOURS OF WORK,LEAVE ETC. The weekly and daily hours of work of an apprenticeship shall not exceed the following:- Daily: Not more than 8 hours (includes the time spent on related instructions). Weekly : Total number of hours per week shall be 42 to 48 (including the time spent on related instructions. )

Trade apprentices during the third & subsequent years of apprenticeship shall work for the same number of hours per week as the workers in the trade in the establishment in which the trade apprentice is undergoing apprenticeship training.

No apprentice shall be engaged on training between the hours of 10 P. M and 6 A. M. or required to work overtime except with the prior approval of the Apprenticeship Advisor. An apprentice shall be entitled to have casual,/medical and extra-ordinary leave as per leave rules of the establishment. If no proper leave rules exist in the establishment the apprentice shall be entitled to total 37 days leave of different types i. e. casual 12 days, medical 15 days & extra-ordinary 10 days. Grant of such leave shall be subject to the following conditions:-

a)That every apprentice engaged in an establishment which works for 5 days in a week(with a total of 45 hours per week) shall put in minimum attendance of 200 days in a year out of which one sixth namely 33 days shall be devoted to related instructions and 167 days to practical training. b) That every apprentice engaged in an establishment which works for 5 1/2 days or 6 days in a week shall put in minimum attendance of 240 days in a year out of which one sixth namely 40 days shall be devoted to related instructions and 200 days to practical training.

In case an apprentice could not put in minimum period of attendance or could not complete his essential part of training for circumstances beyond his control, his period of training could be extended for a period of up to six months under Apprenticeship Act rule 5(2). Employer has to continue to pay the stipend for the extended period of training. FINAL TRADE TEST At the end of their training the apprentices are trade tested by the National Council Of Vocational Training . These All India Trade Tests under the Apprentices Act 1961are held twice a year some time in April and October.

Every apprentice who passes this test is awarded National Apprenticeship Certificate which has been recognized by the Central and State Governments for the purposes of appointments in subordinate posts and services. EMPLOYMENT ON COMPLETION OF APPRENTICESHIP TRAINING. It shall not be obligatory on the part of the employer to offer any employment to an apprentice nor shall it be obligatory on the part of the apprentice to accept an employment under the employer on successful completion of training unless it is specifically provided in the contract of Apprenticeship.

SEAT ASSESD/ SEAT UTILISED AS ON 31. 12 . 2005 |S. NO. |SEAT ASSESD |SEAT UTILISED | | |PUBLIC SECTOR |PRIVATE SECTOR |TOTAL |PUBLIC SECTOR |PRIVATE SECTOR |TOTAL | |1. |2541 |2821 |5362 |1779 |1330 |3109 | The role of the chemical industry in the national VET framework Chemical companies take the following roles and initiatives as their commitments to the national vocational education system: a) To deliver basic and practical training for apprentices in the industry by the enterprise, with the whole cost borne by the enterprise; b).

To appoint the experts from these training centres as members of the curriculum committee at the national level to draft the curricula for the Craftsmen and Apprenticeship Training Programme; c) To appoint the experts from these training centres as examiners and paper setters for the Craftsmen, Apprenticeship and Instructor Training Programmes; and d) To appoint the experts from the training centres as members of advisory committees, such as the Central Apprenticeship Council, the NCVT, the State Apprenticeship e) Council and the SCVT, as well as advisory committees of ITIs and ATIs.

The companies on their own fund their in-house and external training programmes for their employees. Liberalization of the Indian chemical market and VET When liberalization hit the Indian chemical industry in the early 1990s, most of the chemical companies – regardless of the number of employees – were affected by a massive drive of cost reduction due to increased competition stemming from globalization.

Before liberalization arrived in the chemical industry, the Government of India devised protective schemes to protect its industry and domestic market. In fact, the chemical industry was one of the major forces urging the Government to take protective measures. The rationale was that if the industry were not protected, it would have been wiped out, causing a loss to India’s exchequer. Under the protected market, chemical companies produced only enough to make minimum profits.

The Government restricted the production capacity through corporate licensing. Hence, there was no incentive for chemical companies to improve the quality of product, reduce production cost or replace outdated machines and equipment with state-of the- art high-tech production systems. Improving workers’ skills in order to increase productivity had been barely considered. Once workers were employed by chemical companies, they received initial training but nothing further.

Liberalization and the substantial reduction of customs tariffs in 1991 due to globalization shocked the manufacturing sector, in particular the chemical industry. Globalization resulted in the closing down of many small and medium-sized chemical firms in India. To cope with emerging globalization, chemical companies needed to change their business manners and business practices. Cost-cutting was the only way for them to survive in a keenly competitive globalized market. Chemical companies also took drastic measures to reduce workers as an inst.

 


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