Budget Modernization Concept - Essay Example

BUDGETING PROCESS a) Some economic theories had greater impact in correcting the production in budget modernisation by working out on production-consumption cycles. Using the process of co-structuring a producer and consumer can exchange information that might help in increasing the production-consumption efficiency. The production remains out of problems as long as consumption is free of problems. The first is concerned with increasing industrialisation and consumption of the products. It also deals with the environmental problems such as pollution and waste generation caused by the industrialisation. Due to increasing industrialisation the environmental problems are also increasing, it is affecting the climate, bio-diversity and the ecosystem of the planet. Therefore there is an immediate need of budget modernisation for sustainable development. If it's not achieved then it might have adverse effects on shareholders values because firms neglecting the rules may be closed or fined severely. b) Feasibility study is an important phase in the development process. It enables the developer to have an assessment of the product being developed. It refers to the feasibility study of the product in terms of outcomes of the product, operational use and technical support required for implementing it. Feasibility study should be performed on the basis of various criteria and parameters. The various feasibility studies are: Economic Feasibility, Operational Feasibility and Technical Feasibility. c) According to consumer modernisation the solution to some sort of crisis can be found in more production, more modernity and more industrialisation. Rather than more production consumer modernization purports on different industrialisation and production. This is termed as more -as-different approach. In the present markets the production is more that result in the increase in economy and thus maintaining overall consumption low and sustainable. Thus we could say that consumption is dematerialised. Though the present world is turning towards e shopping still some of us like to prefer the old ways of purchasing things like jewellery, cars, etc. d) Let's take the case of United Kingdom and its policies towards foreign trade. At the time of Serbian war the country's economy was mediocre and accordingly the living standards of the people. Unemployment was on rise and there was no perfect system to maintain law and order between the EU countries. There was chaos all the time. The post war era was the beginning of expansion in the trade sector. The benefits do not come that easily. Treating those who hurt by trade, equitably a difficult public policy issue. The important issues that were to deal with are controlling the rapid growth of trade deficit, high inflation rate and soaring prices of crude oil. The post war era has seen a rapid expansion in trade and accordingly the economic and political structure has experienced steady and substantial growth. Gaining profits from trade depends on individual economic behaviour. Instead of building own automobiles, manufacturing own goods, producing own food, it is better to manufacture goods in which they have specialisation and trade them for other goods that are required. This thought made the UK a leading exporting country in international trade. The most surprising thing is that the total UK imports amount to only about 12 percent of the country's GDP. International trade brings rich dividends and imposing restrictions to such exchanges will hinder the further improvement and in realising the true gains from trade. Protectionism is the factor that's becoming hindrance to international trade. e) In the context of budget process jobs were created and destroyed as well. Creation and destruction of jobs depends on comparative advantages and disadvantages. Cutting of jobs does not have any net loss on the economy further more it improves the living standard and raises the economy. It is known truth that international trade has positive and negative effects. The wages of an average worker will be hit if there is an increase in imports. But it is also true that worker in export business are benefited by trade. f) There is a possibility of gaining profits by not following the rules and regulations. If an exporting industry has been given subsidy, though it benefits the domestic consumer it will badly hurt the domestic market. From standpoint of overall economic welfare domestic market should be provided with alternatives and should allow foreign goods into the domestic market and gain in real income. To protect the domestic market the governments of respective nations imply tariffs and quotas. Though this is the clear case of protectionism it is every government's duty to protect the domestic interests. Tariffs, quotas and other regulations differ in their impact on trade and also in static deadweight losses that they will cause. Under competitive conditions the losses due to the exit of consumers, unable to substitute the domestic product and rent seeking will be same if we keep the imports allowed into the country as a constant. Goods should be classified into categories to administer the quotas. g) Budget processing is of great significance for production as well as consumption of goods. It is through trade that goods produced at particular places are equitably distributed among users. With the help of trade goods are made available to consumers at the time of their need. It removes the hindrance of persons by bringing together producers and consumers who are widely scattered. h) Limited equity financing is used by most of the small or growth stage businesses. Whereas in debt financing, funds pour in from different quarters like from friends, relatives, etc. Venture capitalists are the most common source of equity funding. Venture capitalists may be institutional risk takers, financial institutions, wealthy persons, etc. and most of them specialize in industries. Venture capitalists are risk takers and show interest only in three to five year old companies that result in more than average profits. These venture capitalists are called as investment gurus whose interest lies in those companies that have major regional and national concerns. AT&T invested in e-commerce. Their strategies include low price and free shipment. This factor played an important role in the long-term development of the company. The cheaper prices of goods with high quality and further free shipment attracted many. Another factor is the customer service. Customer plays an important role in the development of the company because it is the customer who uses the product that was developed by the companies and Amazon's services were good at it. To stay and hold the position in the present competitive market Amazon has planned to expand its business outside US like Eastern Europe and Far East Asia. Amazon is encouraging other companies to advertise their product on their website. A study has shown that Amazon would make more profit in diversifying than expanding. References AT&T. (2006). AT&T Worldnet. Retrieved Jan. 15th 2006 from, http://www.att.net/ Wikipedia. (2006). Budget. Retrieved Jan. 15th 2006 from, http://en.wikipedia.org/wiki/Budget. Wikipedia. (2006). United States Budgeting Process. Retrieved Jan. 15th 2006 from, http://en.wikipedia.org/wiki/United_States_budget_process. Read More