Q3) ADVANTAGES OF BUDGET :-

 Management and control: A budget provides a strategic plan of action. It

creates a caution over the expenses that can be borne by the institution or an
individual. It, therefore, helps to check and make decisions on the basis of their
capacity.
 Evaluation of policies: A budget allows an evaluation of the goals and policies
which are set as guidelines for taking further decisions over the spending.
 Capital reinforcement: With a good budget a company or an individual can
make the best use of their available resources and capital wherever they can
be applied for more productivity and profit.
 Promotes competition: A budget can help in effective competition between
organizations and individuals if they are well aware of their financial status as
well as are able to make an adequate estimation on their activities and
operations to earn profits.
 Systematic and organized: The approach of a budget is very systematic and
disciplined which ensures a successful study and implementation of the plans
and actions of the company or individual.
 Constructive: A budget does not allow any of the resources or money to go
wasted as it provides a guideline to follow to make use of them constructively.

DISADVANTAGES OF BUDGET :-

 Inaccurate and unrealistic: A budget is based on assumptions and judgments.

If there is any change in the business plan or implementation the whole
prediction over the budget plan will get affected. The results of a budget plan,
therefore, are always unpredictable and can be inaccurate sometimes.
 Inflexible: A budget is formed depending on certain policies of an institution or
goals of an individual that leads to decision-making. However, if there is any
need to review the financial status considering any change in the market there
is no way the budget can be altered.
 Finance oriented: The budget does not support the interests and requirements
of the people. It is more profit-oriented which is more quantitative while the
needs of the people are more qualitative in nature.
 Time-consuming: The process of planning a budget Or budgeting is a time-
consuming affair. It needs to consider all possible aspects of an organization or
an individual before ensuring any expenditure or spending towards a particular
goal.
 Conflicts: The failure of a budget plan can result in a lot of arising tensions and
rifts within the company that ultimately get reflected by the inefficient running of
the organization

Q4) MONETARY POLICY (GOOD OR BAD):-

• Monetary Policy refers to the measures pertaining to policy undertaken by the

Central

Bank (RBI) to influence the availability; determine the size and rate of growth of the
money supply in the economy.

• In other words, monetary policy can be defined as a process of managing a

nation’s

money supply to contain/control the inflation, achieving higher growth rates and

achieving full employment.

• Generally, all across the globe, monetary policy is announced by the central
banking

body of the country, for example the RBI announces it in India.

• The Monetary and Fiscal Policies had to be adjusted to the requirements of the
planned

development in the country and accordingly, the economic policy of the Reserve
Bank

was emphasized on two objectives:

o To speed up the economic development of the nation and raise the national

income and standard of living of the people.

o Control and reduce the “Inflationary” pressure on the economy.

Monetary policy is of two kinds:

• Expansionary Monetary Policy: It increases the supply of money in an economy by

making credit supply easily available. Money produced through such a policy is
called as cheap money. An expansionary monetary policy is required when an
economy goes through a phase of recession accompanied by lower levels of
growth/high levels of unemployment. But risk associated with EMP is inflation.

• Contractionary Monetary Policy: It decreases the supply of money in the economy.

Contractionary monetary is used to tackle the menace of inflation in the economy by
raising the interest rates.

Objectives of Monetary Policy

• In India the broad objectives of monetary policy are:

  To regulate monetary expansion so as to maintain a reasonable degree of
price stability; and To ensure adequate expansion in credit to assist economic
growth

• Further the objectives of Monetary Policy are:

 It leads to economic growth: The monetary policy can influence economic

growth by controlling real interest rates and its resultant impact on the
investment. If the RBI opts for a cheap credit policy by reducing interest rates,
the investment level in the economy can be encouraged. This increased
investment can speed up economic growth.

 Price Stability: Inflation and deflation both are not suitable for an economy.
Price stability is defined as a low and stable order of inflation. Thus, the
monetary policy having an objective of price stability tries to keep the value of
money stable.

 Exchange Rate Stability: If exchange rate of an economy is stable it shows

that economic condition of the country is stable. Monetary policy aims at
maintaining the relative stability in the exchange rate. The RBI by altering the
foreign exchange reserves tries to influence the demand for foreign exchange
and tries to maintain the exchange rate stability.

 It generates employment: Monetary policy can be used for generating

employment. If the monetary policy is expansionary then credit supply can be
encouraged. It would thus help in creating more jobs in different sector of the
economy.

 Equitable distribution of income: Earlier many economists used to justify the

role of the fiscal policy in maintaining economic equality. However, in recent
years economists have given the opinion that the monetary policy can play a
supplementary role in attainting economic equality.

Q5) Good or bad things about Unicorns?

The term unicorn is used to describe startup companies that have achieved a
valuation of $1 billion or more. This is because companies that command a
massive valuation of close to $1 billion are generally expected to be publically listed
companies that have been in business for a long time. Startup companies backed by
investors which achieve such a high valuation in a short period of time were thought
of as being elusive in 2013. Hence, the term “unicorn” was used.

However, of late, a lot of startup companies have been reaching this milestone.
There are literally hundreds of unicorns in the global economy today. This has led
investors to believe that companies with a $1 billion valuation are not elusive at all!
Instead, they want the classification parameters to be changed. Instead of classifying
a firm that has a $1 billion valuation as a unicorn, investors want companies that
have raised $1 billion in funding to be classified as unicorns since these are the
types of firms that can be considered to be truly elusive.

There are some investors who believe that the existence and proliferation of
unicorns is a sign of the increased technological prowess which has been achieved
over the past few years. However, there are others who believe that more and more
unicorns are coming into existence because of a financial bubble.

The valuation of unicorns is quite subjective. This is because unicorns are

companies in the very early stage of their growth. Hence, these companies do not
have the financial records or performance which could support a billion-dollar
valuation. Instead, many of these companies are not even making a profit and have
a negative cash flow.

Their valuation is totally based on the investor perception that these companies have
a strong value proposition that their competitors may not be able to imitate. However,
this is just perception-based and has no financial backing.

Also, there have been instances where investors have created hype about the
startup company, increased its valuation, and perceived brand value only to list it at
a high price and exit the investment. There have been cases where individual
investors who purchased these stocks on the market have lost a lot of money.

Since the valuation of unicorns is a sophisticated process that is beyond the realm of
average investors, the average investors would be better off if they stayed away from
these investments until there were enough cash flows and financial data available to
conduct a proper valuation.

Compared to a regular startup company, the valuation of unicorns tends to be

absurdly high. There are certain reasons behind this valuation. These reasons have
been listed below:

1. Fast Growth Strategy: Unicorns are companies that have a technological edge

over their peers. However, these companies also want to capture the market
share as soon as possible since that will help them obtain the first mover’s
advantage and also create a brand value. In order to capture market share
quickly, these start ups need aggressive funding.
Many venture capital firms are willing to provide this aggressive funding since
they believe that the start up will be able to capture a significant portion of the
market share. They also believe that high valuations are the only viable method
because if they take a slower and more cautious approach, then they may lose
market share to the competition.
2. Buyouts: Many times start ups have ideas that can potentially disrupt the
business of a very large enterprise. The case of Instagram and WhatsApp can
be used as cases in point. Both these companies were acquired for a
multibillion-dollar valuation by Facebook which saw them as a potential
disruption to its business model. Larger companies are willing to pay a premium
 to wipe out the competition and to acquire disruptive technology. Hence, start
ups that have such technology can command a premium.
3. Scalability: Unicorn companies are much more scalable as compared to their
counterparts. This is because the entire business model is based on using
massive funding to rapidly scale up the business and obtain market share. The
high scalability is often used to justify the high valuation that is attributed to the
firm.

Q6) K Shape recovery of the economy, what it mean for us going ahead?

A K-shaped recovery occurs when, following a recession, different parts of the

economy recover at different rates, times, or magnitudes. This is in contrast to an
even, uniform recovery across sectors, industries, or groups of people. A K-shaped
recovery leads to changes in the structure of the economy or the broader society as
economic outcomes and relations are fundamentally changed before and after the
recession. This type of recovery is called K-shaped because the path of different
parts of the economy when charted together may diverge, resembling the two arms
of the Roman letter "K."

The term "K-shaped" recovery gained prominence in 2020 and 2021 in the wake of
the sharp recession in the U.S. that accompanied the COVID-19 pandemic, and
was used to describe the uneven economic recovery across different sectors,
industries, and groups of people in the economy.

Causes of a K-Shaped Recovery

Several different economic phenomena may be at work in driving a K-shaped

recovery. First, a K-shaped recovery can reflect creative destruction in an economy
as described by economist Josef Schumpeter, which occurs when new technologies
and industries replace older technologies and industries over the course of a
recession.3 Second, it can reflect the public policy response to a recession in terms
of monetary and fiscal policy, which can benefit some segments of the economy
more than others.

Alternatively, it can simply reflect the differential impact that the initial recession had
on different parts of the economy in the first place, especially when the recession
coincides with or is triggered by negative real economic shocks that affect specific
parts of the economy and can have more lasting effects on them than on others.
Note that these three conditions may not be mutually exclusive; all three may be at
play in a given K-shaped recovery, along with other factors.

How Can Fiscal Policy Work During a K-Shaped Recovery?

Fiscal policy is applied when the government changes its taxation and spending to
help steer the economy. During a K-shaped recovery, governments can selectively
implement tax breaks and other incentives that target certain industries, leading
those sectors to recover at a faster pace than those left unaffected by the policy
measures. The government also can choose to spend on infrastructure or other
projects that benefit a certain industry.

Was There a K-Shaped Recovery Following the COVID-19 Outbreak?

Some economists have pointed to the aftermath of the economic fallout due to the
pandemic as resulting in a K-shaped recovery. For instance, the technology sector
remained fairly robust amid work-at-home measures, teleconferencing, and
lockdowns that kept people online and streaming. Likewise, parts of the health-care
sector that worked on vaccines and treatments saw a boost. Meanwhile, service-
based industries such as restaurants, travel, and hospitality took an outsized hit.

How Long Do Recessions Last on Average?

The U.S. has experienced 34 recessions since 1857, according to the National
Bureau of Economic Research (NBER). They have varied in length from two months
(February to April 2020) to more than five years (October 1873 to March 1879). The
average recession has lasted 17 months, while the six recessions since 1980 have
lasted less than 10 months, on average.4

The Bottom Line

A "K" shaped economic recovery is one in which the performance across different
sectors, industries, and groups within an economy varies considerably after a
recession. This can happen for a number of reasons related to technological and
structural change within an economy as well as responses to a recession by
policymakers.

To fully characterize the dimensions of a "K"-shaped economic recovery requires

using data to break down the economy into different sectors to better understand
what has happened to individual segments and whether their fortunes have been
improving since the recession began.

Q7) PLI Scheme.

The PLI scheme or Production Linked Incentive scheme was launched in March
2020 to boost the domestic manufacturing sector. As a part of the Make in India
initiative, this scheme offers an incentive to eligible firms on incremental sales for five
years.
The Government introduced this scheme to reduce India’s dependence on China
and other foreign countries. It supports the labour-intensive sectors and aims to
increase the employment ratio in India.
This scheme works to reduce down the import bills and boost up domestic
production. However, PLI Yojana invites foreign companies to set up their units in
India and encourages domestic enterprises to expand their production units.
The IT Ministry has informed the PLI scheme, which would offer 4%-6% incentives to
electronics companies that manufacture mobile phones and electronic components.
 Now, let's check which sectors fall under this scheme.This will help understand how
the scheme works.
10 Sectors Covered Under Production Linked Incentive Scheme
 Pharmaceutical and medical devices manufacturing
 Mobile and allied equipment
 Automobiles and auto components
 It Hardware and laptop production
 Food processing
 White goods
 Aviation
 Textile and apparel
 Renewable energy
 Metal and mining

BENEFITS -
Individuals should know that managing sustainable development and investments in
labour-intensive sectors is demanding for the Government. The extended gestation
period makes it quite challenging.
 The PLI scheme depends on total output. This makes it an effective scheme when
compared with grants like Mega Food Parks. The easy accessibility adds to the
advantage list.
 It supports the anchor investors capable of managing the Greenfield or brownfield
projects and other investments.
 This scheme aids beneficiaries in concessions on import and export duty, tax
rebates, affordable land acquisition, etc.
 Affordable product pricing is also a benefit of PLI.
Let’s check how to make an application and fill PLI forms.

CHALLENGES –

As per a report, out of the 14 eligible sectors, only two or three were likely to meet
their first-year targets under the PLI scheme.

There is no common set of parameters to understand the value added by companies

that have received or are likely to receive incentives under the scheme.

According to the research, the industries think that further incentives are required to
make India more appealing than China and Vietnam.
The companies are in need of more incentives to run the scheme properly and boost
exports.

Country lack in creating a centralized database to monitor progress. The NITI

Aayog plans to rope in an external agency – state-owned IFCI Ltd or Sidbi – to
design and prepare the database.

Q8) BUSINESS PORTERS 5 FORCES-

1. Competition in the Industry

The first of the Five Forces refers to the number of competitors and their ability to
undercut a company. The larger the number of competitors, along with the number
of equivalent products and services they offer, the lesser the power of a company.

Suppliers and buyers seek out a company's competition if they are able to offer a
better deal or lower prices. Conversely, when competitive rivalry is low, a company
has greater power to charge higher prices and set the terms of deals to achieve
higher sales and profits.

2. Potential of New Entrants Into an Industry

A company's power is also affected by the force of new entrants into its market. The
less time and money it costs for a competitor to enter a company's market and be
an effective competitor, the more an established company's position could be
significantly weakened.

An industry with strong barriers to entry is ideal for existing companies within that
industry since the company would be able to charge higher prices and negotiate
better terms.

3. Power of Suppliers

The next factor in the Porter model addresses how easily suppliers can drive up the
cost of inputs. It is affected by the number of suppliers of key inputs of a good or
service, how unique these inputs are, and how much it would cost a company to
switch to another supplier. The fewer suppliers to an industry, the more a company
would depend on a supplier.

As a result, the supplier has more power and can drive up input costs and push for
other advantages in trade. On the other hand, when there are many suppliers or low
switching costs between rival suppliers, a company can keep its input costs lower
and enhance its profits.
4. Power of Customers

The ability that customers have to drive prices lower or their level of power is one of
the Five Forces. It is affected by how many buyers or customers a company has,
how significant each customer is, and how much it would cost a company to find
new customers or markets for its output.

A smaller and more powerful client base means that each customer has more
power to negotiate for lower prices and better deals. A company that has many,
smaller, independent customers will have an easier time charging higher prices to
increase profitability.

5. Threat of Substitutes

The last of the Five Forces focuses on substitutes. Substitute goods or services that
can be used in place of a company's products or services pose a threat. Companies
that produce goods or services for which there are no close substitutes will have
more power to increase prices and lock in favourable terms. When close substitutes
are available, customers will have the option to forgo buying a company's product,
and a company's power can be weakened.

Understanding Porter's Five Forces and how they apply to an industry, can enable a
company to adjust its business strategy to better use its resources to generate
higher earnings for its investors.

The Five Forces model can help businesses boost profits, but they must
continuously monitor any changes in the Five Forces and adjust their business
strategy.

Q9) PLC FUTURE-

Almost every building and facility relies on the automation of their mechanical and electrical
systems, or the use of PLCs. In fact, PLCs are used across industries and are found in countless
applications within factories, labs, and plants. Their use is only going to increase as more
complex facilities undergo construction and factory floors expand. You might think that PLCs are
an aging technology due to the fact that they’ve been around for close to 50 years, but innovation
is on the horizon. 

New and Improved PLCs

Processors, circuit boards and other components are growing smaller across industries. This
trend is making its way to PLCs. Current enhancements include faster processors for improved
cycle time, added memory capacity, and new communication features. We can expect to see
small PLCs evolve to include many of the features of higher level PLCs, with high-level PLCs
becoming smaller and more compact. A huge advantage to PLCs is the fact that solid state
memory drives are reducing in size, and their costs are declining .This allows for local data
storage and permits the use of a PLC in many applications formerly requiring expensive data
acquisition systems. Another example of a feature from the consumer electronics world that’s
becoming more common is nonvolatile portable memory devices. These offer great benefits to
the PLC customer by providing a large amount of additional memory within a small device.

PLCs Merge with PACs

PACs and PLCs will continue to merge overtime, as automation engineers focus more on the
evolution of the performance and features of the machines rather than the vocabulary
surrounding these devices. Higher-speed processors and more memory will make more
advanced features common, such as motion control, vision system integration, and simultaneous
support for multiple communication protocols. But the machines will still maintain the simplicity
that makes the PLC so attractive to many users.

The growing demand for these systems have challenged designers to build systems that last and
can withstand an industrial environment. There could be challenges in the future to maintain a
level of quality (connectivity, memory expansion, and processing power improvements required
to handle ever more complicated applications) while keeping cost low. With this, PLCs may see
an increase in price in the future. 

Increased Communication
Currently, a high-end PLC includes many communication ports to support multiple protocols.

This will change in the future as users demand more standardized options, possibly just Ethernet
and wireless, with industrial Bluetooth a possible option. The industry does need a more robust
wireless technology with improved range and the preservation of data integrity before we see a
large convergence of commercial and industrial wireless communication protocols.

We have seen advancements in this field with Wi-Fi, ZigBee and the rise of Bluetooth, but none
have been a solution for plant floor applications. The future will encompass wider adoption of
wireless, as it works well for applications like remote terminal units (RTUs) where line-of-sight is
available, and also in many less critical monitoring applications where real-time control isn’t
required.

Dramatic Advancements
The boldest change in the PLC’s future will be the integration of enterprise resource planning
(ERP) and other higher level computing systems to the factory floor. Controller manufacturers
need to consider the user’s needs and provide a solution where the PLC is not only controlling
the application, but also providing the tools to seamlessly manipulate and present process data
to the users who need it.

That’s where ERPs fit in. PLCs can’t convert data into reports, which is a major detriment to
management and their ability to plan or make decisions. For example, a PLC can detect when a
machine or piece of equipment needs to be fixed. However, it doesn’t store crucial information
about specific pieces of equipment, which is needed in order for staff to make decisions on next
steps. If an ERP is in the picture, workers then have access to this information which facilitates a
more efficient response. The combination of historical data paired with real-time data allows
employees to make more informed and efficient decisions on the factor floor. This also means a
reduction in operational costs and an increase in performance across the board.

A Bright Future for PLCs

PLCs will continue to evolve, so it’s worth looking at new versions of these controllers as the
technology becomes more streamlined and effective and continue to be the best option for a
variety of industrial automation applications. Evolving features such as wireless capabilities,
more compact sizes and flexibility will be its staying power. 

Our Programmable Logic Controller Technician Program  provides the  technical skills and
knowledge necessary to work with programmable logic control systems. Learn more about how
you can apply for PLC training online.