Introduction

 Business is an economic activity

 It’s a set of all economic conditions, policies, business
cycles, economic resources, level of income and
wealth etc.
 Change in the government / system can change the
fate of an organisation
 Economic environment represents the economic
conditions in the country where international
organisation operates.
Types of economic system
 Features
 Right to private property
 Freedom of enterprise
 Freedom of choice by consumer
 Profit motive
 Competition
 Importance of price system
Examples of Capitalist Economies
1. Hong Kong
2. United Arab Emirates
3. Singapore
4. New Zealand
5. Australia
6. Canada
7. Switzerland
8. United Kingdom
9. United States
10.Ireland
Socialism
Features
 Public ownership
 Central planning
 Define objectives
 Freedom of consumption
 Equality of income distribution
 Pricing decisions
Examples
 Norway
 Sweden
 Denmark
 Iceland
 and Finland
 Features

 Co existence of private and public property.

 Price system
 Government regulates and controls the private sector
 Consumer’s sovereignty is protected
 Government protects labor interest
 Advantages

 Equal Distribution of Control

 More Efficiency for Private Firms
 Freedom for Private Enterprise to Thrive On Their
Own
 A Defined Role for the Government as Referee
 Safe Haven from Poverty
 More Job Investments Coming In
 Disadvantage

 Challenge of Finding a Balance

 Higher Taxes
 Economic policies

 The economic policy of governments covers the

systems for setting levels of taxation, government
budgets, the money supply and interest rates as well
as the labour market, national ownership, and many
other areas of government interventions into the
economy.
 Types of economic policies

Fiscal policy
Monetary policy
Industrial policy
Exim policy
 Fiscal policy

 Fiscal word derived from the word “ fisc’

 It involves the decision that a government makes
regarding collection of revenue, through taxation and
about spending that revenue
 Objectives

 To manage full employment

 To reduce economic inequality
 Monetary policy

 Monetary policy refers to the actions undertaken by a

nation's central bank to control money supply and
achieve sustainable economic growth.
 Monetary policy can be broadly classified as either
expansionary or contractionary.
 objectives

 To manage inflation
 Unemployment
 Currency exchange rate
 Tools

 Interest rate adjustment

 Change reserve requirements
 Open market operations
 Introduction

 It’s a policy document has lasting impact on a

country’s industry.
 At the time of independence India had an extremely
underdeveloped and unbalanced industry structure.
 Initially industries were focused in few areas such as
Bombay, surat, ahmedbad, calcutta, dehi etc.
 Formulated industrial policies to correct imbalance in
industrial development.
Industrial Policies Prior to 1991

 Industrial Policy Resolution of 1948

 Industrial Policy Resolution of 1956
 Industrial Policy Resolution of 1973
 Industrial Policy Resolution of 1977
 Industrial Policy Resolution of 1980
 The New Industrial Policy of 1991
 New industrial policy 1991

 In order to accelerate Industrial Development in India, and in

accordance with the changing circumstances, various industrial
policies were declared in the years 1948, 1956, 1977, 1980 and
1985, but in spite of all efforts, the pace and as well as the level
of Industrial Development in India, could not reached according
to its need. Therefore, in order to lift unnecessary restrictions on
Industries, under the licensing policy, and to increase their
efficiency, development and technological level, in order to
make Indian goods usable in the competitive global market, on
24th July, 1991, in Lok-Sabha the Minister of States for industries,
Mr. P. J. Kurian declared the Industrial Policy, 1991.
 Objectives

 To liberalise the economy

 To increase employment opportunities
 To encourage foreign assistance and co-partnership
 To make the Public Sector more competitive
 To increase the production and productivity, give
encouragement to industries
 To give liberty to private sector to work independently
 To make development for modem competitive economy
 To give encouragement for expansion of production capacity
 To increase exports and liberalize (facilitate) imports.
 features

 Industrial delicensing
 Deregulation of the industrial sector
 Public sector policy (dereservation and reform of
PSEs)
 Abolition of MRTP Act
 Foreign investment policy and foreign technology
policy.
FOREIGN TRADE POLICY
 introduction

 India is known as one of the most important and

emerging player in the global economy.
 Foreign trade has been changing for decades and
since independence
 Firstly enacted Import and export act 1947.
 Import substitution and protection of domestic
industrywere the thirst of policy during 1950 to 1991(
classified under Open General License)
 New industrial policy 1991 resulted on Foreign trade
act 1992.
 Policy has been revised every five year under the
DGFT.
 At present Foreign trade policy 2021 to 26.
 Objectives of the Foreign Trade
Policy in India

 To enable substantial growth in exports from India and import to

India to boost the economy.
 To at least double the percentage share of global merchandise trade
conducted within the next five years.
 To improve the balance of payment and trade.
 To act as an effective instrument of economic growth by creating
employment opportunities for the citizens; the larger the expansion
of trade activities, the more the workforce required.
 To provide for sustainable growth by giving access to essential raw
materials for production and other components, consumables, and
capital goods required for increasing production and providing
efficient services.
 To raise the technological capacity for production and cost-
effectiveness of industry and services, thereby improving
their competitive strength in comparison to other
countries, and to encourage the accomplishment of
internationally accepted standards of quality.
 To provide buyers or clients with high-quality goods and
services at globally competitive rates and quality. ‘.
 Creation of opportunities by engaging in good and ethical
practices.
 Accelerating the economy from low-level economic
activities to high-level economic activities by making it a
globally oriented and vibrant economy
 To derive maximum benefits from expanding the global
market and seizing the best opportunities available.
 Making policies that favor ease of doing business and e-
governance.
 To allow for hassle-free transactions for both import and
export.
 .
 Reducing the interference between the exporters and Directorate
General of Foreign Trade by reducing the number of export
documents.
 To allow the import of technology and equipment’s which may help
in achieving better international standards of quality and reduce the
cost of production.
 Establishing the Advance Licensing System for imported goods
needed for manufacturing various goods for export. An Advance
License is issued by the Directorate General of Foreign Trade to
allow duty-free import of inputs, which are physically integrated
with the export product (making normal allowance for wastage).
 To allow the import of certain goods as listed in the Open General
License; a kind of export license which is issued by the Government
to domestic suppliers
 Economic Planning

 Economic planning is used to describe the long term

plans of the government of india to develop and
coordinate the economy with effective utilisation of
resources.
 Economic planning in India started in the year 1950
and with reference of soviet union’s Five year plan.
 Planning commission was set up in 1950 by starting
five year plan in the country(1951 to 56)
 In 2015 Planning commission was replaced by NITI
ayog.( National Institute for Transforming India)
 Objectives

 To evolve a shared vision of national development

priorities, sectors and strategies with the active
involvement of States.
 To foster cooperative federalism through structured
support initiatives and mechanisms with the States on a
continuous basis, recognizing that strong States make a
strong nation.
 To develop mechanisms to formulate credible plans at the
village level and aggregate these progressively at higher
levels of government.
 To ensure, on areas that are specifically referred to it, that
the interests of national security are incorporated in
economic strategy and policy.
 To pay special attention to the sections of our society
that may be at risk of not benefiting adequately from
economic progress.
 To design strategic and long term policy and
programme frameworks and initiatives, and monitor
their progress and their efficacy.
 To provide advice and encourage partnerships
between key stakeholders and national and
international like-minded Think tanks, as well as
educational and policy research institutions.
 To create a knowledge, innovation and entrepreneurial support
system through a collaborative community of national and
international experts, practitioners and other partners.
 To offer a platform for resolution of inter-sectoral and inter
departmental issues in order to accelerate the implementation
of the development agenda..
 To actively monitor and evaluate the implementation of
programmes and initiatives, including the identification of the
needed resources so as to strengthen the probability of success
and scope of delivery.
 To focus on technology upgradation and capacity building for
implementation of programmes and initiatives.