Global Marketing of Services-

Model Questions
for End-Term Examination
Prof. Tarun Das, IILM, New India.
Formerly, Economic Adviser, Ministry of Finance

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 Notes

1. The end-term question paper will have two parts-

Part-A (objective type) which is compulsory and
Part-B with essay-type questions.
2. Part-A will have subparts for filling in blanks, and
a set of statements, which need to be identified
as TRUE OR FALSE (without any economic
reasoning or explanations).
3. You are required to provide answers to FOUR
questions out of seven questions in Part-B.
 

 
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 1.1 Part-A- Fill in the blanks
1.1  The cash reserve ratio (CRR) for commercial banks
had been reduced from 25% in 1991 to 5% in
December 2006.
1.2 The statutory liquidity ratio (SLR) for commercial banks
had been reduced from 38.5% in 1991 to 25% in
December 2006.
1.3  The Prime Lending Rate (PLR) of commercial banks
declined from 21% in 1991 to around 11% in
December 2006.
1.4  Foreign Institutional Investors (FIIs), NRIs and
Overseas Corporate Bodies (OCBs) are allowed to buy
stocks in Indian markets subject to individual limits of
5% for NRIs, 5% for OCBs, 10% for FIIs and overall
limit of 49% of total equity in a firm.

 
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 1.2 Part-A – Fill in the blanks
1.5  Foreign investment up to 74% of total equity
is permitted in private banks. Foreign equity in
insurance/ banks doing only insurance services
remains at 26%.
1.6 New banks are allowed to open 25% of their
branches in rural/semi urban areas.
1.7 FDI is allowed up to 100% of equity in 22
activities of the Non-Banking Financial
Corporations (NBFCs) subject to minimum
capital requirements.
1.8 Number of foreign banks operating in India
increased to 42 in March 1998 but declined to
29 in March 2006.
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 1.3 Part-A – Fill in the blanks
1.9 Number of commercial banks (both domestic
and foreign) operating in India increased to 93
in March 1998 but declined to 85 in March 2006.
1.10 Number of new private sector banks declined
from 9 in March 1996 to 8 in March 2006.
1.11 Gross NPA ratio (i.e. ratio of gross non-
performing assets to total assets) declined from
24.8 percent in March 1996 to 3.2 percent in
March 2006.
1.12 Net NPA ratio (i.e. ratio of net non-
performing assets to total assets) declined from
10.7 percent in March 1996 to 1.0 percent in
March 2006.
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 1.4 Part-A : Fill in the blanks
1.13 Operating profits ratio (i.e. ratio of
operating profits to total assets) improved from
1.6 percent in March 1996 to 2.1 percent n
March 2006.
 1.14 Net profits ratio (i.e. ratio of net profits to
total assets) improved from 0.2 percent in
March 1996 to 0.9 percent n March 2006.
1.15 Number of commercial banks having capital
adequacy ratio of more than 10 percent
increased from 43 in March 1996 to 79 in March
2006.
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 Part-A : True Statements
2.1  Foreign banks are allowed to establish
branches and 100% subsidiaries in India.
2.2  Government has allowed overseas banking
units to operate in Special Economic Zones
(SEZs); these banks are exempted from
prudential requirements.
2.3  Rupee is fully convertible on current account.
2.4  Rupee is almost fully convertible on capital
account for non-residents.
2.5  Rupee is not fully convertible on capital
account for the residents.
2.6  Foreign investment is allowed almost in all
sectors with caps on foreign equity.
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 Part-A : True Statements
2.7  Foreign companies can now operate like Indian
companies in India and can use their trade marks
and brand names.
2.8 India is now a member of the Multi­lateral
Investment Guarantee Agency (MIGA).
2.9 India has signed treaties for avoidance of double
taxation with 66 countries.
2.10 Bank deposit rates and interest rates are now
liberalized and determined by the banks.
2.11 India now allows foreign banks to set up 20
new branches per annum in India.
2.12 Entry of foreign banks in India is not allowed if
its total assets exceeds 15 per cent of total assets
of all domestic banks in India.
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 Part-A : True Statements
2.13 India does not allow FDI in retail trading
(except for singe brand name), atomic energy,
lottery business, gambling and betting, housing
and real estate (except for development of
townships and technology and software parks).
2.14 India does not allow FDI in agriculture
(except floriculture, development of seeds,
animal husbandry, pisiculture and cultivation of
vegetables and mushrooms etc.) and
plantations (except tea plantations).
2.15 Fourth largest economy in terms of PPP
adjusted GDP after USA, China and Japan

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 Part-A : True Statements
2.16  India is one of ten fastest economies of
the world, and it is the second fastest large
economy after China in the world.
2.17 India has the largest pool of technical
manpower in the world.
2.18 India has the largest percentage of
working population in the world.
2.19 Indian firms are now allowed to raise
foreign funds by GDR, ADR, FCCBs & offshore
funds.
2.20 FIIs/ NRIs/ OCBs are allowed to buy
government securities (G-secs).
  
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 Part-B : Model Questions
1. What do you mean by globalisation? What has
been the impact of WTO-GATS on globalisation
and global trade of goods and services?
2. (a) What is the assessment of developing
countries on the impact of WTO-GATS on
services trade?
(b) What has been the assessment of WTO
Secretariat on the impact of WTO-GATS on
services trade?
(c) Which opinion would you agree and why?
 

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 Part-B : Model Questions
 3. (a) Discuss positive and negative impact of
services production and trade on overall economic
growth.
(b) Would you agree with the view that
globalisation of trade in services has led to
significant increase in growth of developing
countries?
(c) What could be the adverse impact of services
trade on the developing economies?
 4. (a) Indicate different forms of capital flows from
one country to another.
(b) What are the special advantages of FDI over
other forms of external capital flows?
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 Part-B : Model Questions
 5. (a) Discuss broad types of FDI.
(b) Which one is the dominant type of FDI flows to
India and what are main reasons for that?
(c) Indicate the major home countries of FDI
inflows to India.
(d) Which are the major sectors attracting FDI to
India?
6. (a) Discuss the general host country and home
country policies attracting foreign investment.
(b) Discuss relative merits and demerits of fiscal
incentives for attracting FDI.
 
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 Part-B : Model Questions
 7. (a) Indicate the sectors where FDI is not
allowed in India.
(b) Discuss policies, strategy and regulatory
regime for foreign investment of India.
(c) What has been their impact on the Indian
economy?
8. (a) Discuss the strengths and weaknesses of
the Indian economy for attracting FDI.
(b) Discuss special problems for attracting FDI
in agriculture and plantation, minerals including
oil and gas, power generation, water supply and
sanitation  
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 Part-B : Model Questions
 9. (a) Discuss different modes for outward
investment. (b) Which one is the dominant mode for
Indian overseas investment, and what are the main
reasons for that?
(c) Indicate the major destinations for Indian
overseas investment.
10. (a) Indicate the major sectors for Indian
overseas investment.
(b) Indicate the names of top Indian companies in
terms of cross-border M&As.
(c) Indicate some of the crucial cross-border M&As
made by Indian companies since 2000.

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 Part-B : Model Questions
 11. (a)  Discuss the general host country policies
encouraging Indian outward investment.
(b)  Discuss the important home country policies
encouraging Indian outward investment.
12 (a) Discuss policies, strategy and regulatory
regime for Indian overseas investment.
(b) What has been their impact on the Indian
overseas investment?

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 Part-B : Model Questions
  13. (a)  Discuss the status of negotiations on
services trade under WTO-GATS. (b) Discuss the
functions of the Committee on Trade in Financial
Services, and arrangements for disputes
settlements. (c)  Discuss the GATS views on
recognition of prudential norms by member
countries.
14. (a) Discuss the scope and definitions of
financial services under WTO-GATS. (b) Discuss
the GATS views on domestic regulations on
financial services. (c) Discuss the commitments
of India for financial services under WTO-GATS.

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 Thank you
Have a Good Day

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