1. Explain the features of business environment 1. Environment is inseparable part of business:
Environment is an integral part of any business. Business cannot work without environment. Business requires good framework of legal, political, social, cultural and economic factors. 2. Environment is Dynamic:
Business environment is dynamic in nature. The government may change certain policies; there may be changes in consumer tastes, preferences etc. 3. Business lacks control over environment:
Business environment is a constantly changing process. Business lacks control over external environment. 4. Internal an external factors:
The environment of business comprises of internal and external factors. nternal environment includes plans and policies, policies, employees, business ob!ectives ob!ectives etc.
2. Explain the concept of privati!ation The repurchasing of all of a company"s outstanding stock by stock by employees or a private a private investor investor . #s a result of result of such an initiative, the company stops being stops being publicly publicly traded. traded . $ometimes, the company might have to take on significant debt to debt to finance the change in own owner ershi ship pstructure structure.. %ompanies might %ompanies might want to go to go private in private in order to restructure their businesses They might also want to go private to avoid to avoid the the expense and expense and regulations regulations associated with remaining listed on listed on a stock exchange. &. The process of moving from a government'controlled government'controlled system to a privately run, for'profit system.
3. Explain the importance of small scale enterprises in inia n a developing country like ndia, the role and importance of small'scale industries is very significant towards poverty eradication, employment generation, rural development and creating regional balance in promotion and growth growth of various development development activities. t is estimated that this sector has been contributing about ()* of the gross value of output produced in the manufacturing sector and the generation of employment by the small'scale sector is more than five times to that of the large'scale sector.
The following are some of the important role played by small' scale industries in ndia. +. Employment generation &. -obiliation of resources and entrepreneurial skill /. Equitable distribution of income (. 0egional dispersal of industries 1. 2rovides opportunities for development of technology
4. Explain the fiscal policy of Inia The fiscal policy is concerned with the raising of government revenue and incurring of government expenditure. To generate revenue and to incur expenditure, the government frames a policy called budgetary policy or fiscal policy. $o, the fiscal policy is concerned with government expenditure and government revenue. The fiscal policy is designed to achieve certain ob!ectives as follows ' +. 3evelopment by effective -obiliation of 0esources &. Efficient allocation of 4inancial 0esources /. 0eduction in inequalities of ncome and 5ealth (. 2rice $tability and %ontrol of nflation 1. Employment 6eneration 7. Balanced 0egional 3evelopment 8. 0educing the 3eficit in the Balance of 2ayment
". #hat is balance of $ayment% Explain. the balance of payments 9B:2 is the method countries use to monitor all international monetary transactions at a specific period of time.
&.Explain the role of public sector in inia 2ublic sector is considered a powerful engine of economic development and an important instrument of self'reliance. The main contributions of public enterprises to the country"s economy maybe described as follows +. 4illings of 6aps &. Employment /. Balanced 0egional 3evelopment (. %ontribution to 2ublic Exchequer 1. 4oreign Exchange Earnings 7. 3evelopment of #ncillary industries 8. 0esearch and 3evelopment =. %ommunity 3evelopment >. $ocial ?ustice n addition to the foregoing, the public sector has played an important role in the achievement of constitutional goals like reducing concentration of economic power in private hands, increasing public control over the national economy, creating a socialistic pattern of society, etc. 5ith all its linkages the public sector has made solid contributions to national self'reliance.
'.4.Explain forei(n trae policy of inia. )ive recent trens of inias exports. Exim 2olicy or 4oreign Trade 2olicy is a set of guidelines and instructions established by the 364T in matters related to the import and export of goods in ndia. The 4oreign Trade 2olicy of ndia is guided by the Export mport in known as in short E@- 2olicy of the ndian 6overnment and is regulated by the 4oreign Trade 3evelopment and 0egulation #ct, +>>& . 364T 93irectorate 6eneral of 4oreign Trade is the main governing body in matters related to Exim 2olicy. The main ob!ective of the 4oreign Trade 93evelopment and 0egulation #ct is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from ndia. 4oreign Trade #ct has replaced the earlier law known as the imports and Exports 9%ontrol #ct +>(8. ndiaAs overall export trends
The table below reveals that the period between +>7+ and +>8) had higher imports 9as a share of 632, compared to exports which may have contributed to a growing foreign exchange shortage. #dditionally, high levels of inflation and budget deficits coupled with the ndia'2akistan war severely affected foreign aid and led to a foreign exchange crisis, which resulted in the devaluation of the rupee in +>77. =
Table + ndia Export and mport growth 9*
#verage annual
$hare of ndiaAs
growth rate
export in world
over period
2ercent of 632
2eriodExport
export 9*
mportExport
mport
+>1+'7)
).8
=.7
7./
=
+.(
+>7+'8)
(.7
)./
(.&
1.=
).>
+>8+'=)
7.=
=.8
1.=
7.8
).1
+>=+'>)
7.+
/.>
7.1
=.(
).1
+>>+'>8
++.(
+(.(
>.>
+).7
).7
ndia Exports Exports in ndia increased to &8>>=.1) <$3 -illion in -ay of &)+( from &17/(.)= <$3 -illion in #pril of &)+(. Exports in ndia averaged />81./7 <$3 -illion from +>18 until &)+(, reaching an all time high of /)1(+.(( <$3 -illion in -arch of &)+/ and a record low of 1>.)+ <$3 -illion in ?une of +>1=. Exports in ndia is reported by the -inistry of %ommerce and ndustry, ndia.
#ctual
2revious
ighest
Cowest
3ates
4requency
&8>>=.1)
&17/(.)=
/)1(+.((
1>.)+
+>18 ' &)+(
<$3 -illion
-onthly
ndiaAs main exports are engineering goods 9+> percent of total exports, gems and !ewelry 9+1 percent, chemicals 9+/ percent, agricultural products 9> percent and textiles 9> percent. ndia is also one of #siaAs largest refined product exporters with petroleum accounting for around += percent of total exports. ndiaAs main export partners are
'.2 . *o+ is internal environment of business ifferent from external environment The formula for business success requires two elements ' the individual and the environment. 0emove either value and success becomes impossible. Business environment consist of all those factors that have a bearing on the business. The term "business environmentA implies that those external forces, factors and institutions are beyond the control of individual businessA, organiations and their management and can affect the business enterprise as a whole. # businessA environment influences the functioning of the business system. Therefore, a business environment may be defined as all those conditions and forces which are external to the business and are beyond the individual business unit, but they all operate within it. These forces are customers, creditors,
competitors, government, socio'cultural organiations, political parties national and international organiations etc. $ome of these forces affect the business directly whilst some others have an indirect effect on the business. Business environments are the sum total of all things external to business firms and are aggregative in nature. The external environment covers parts of the organiation which are usually unable to be controlled within the organiation and include factors such as social, legal, technological and political factors. The external environment can also include the people outside your organiation who are also a part of it in some or the other way This can include society, government and stakeholders. The internal environment is the environment that has a direct impact on the business. ere there are some internal factors which are generally controllable because the company has power over these factors. t can alter or modify factors such as its personnel, physical facilities, and organiation and functional means, like marketing, to suit the current environment. The value system of the f ounders and those at the helm of affairs has an important bearing on the choice of the business, its mission and the ob!ectives of the organiation, including its business policies and practices.
'.&.Explain ,DI. Discuss the trens of inias ,DI after 1--/-1 ,orei(n irect investment 9,DI is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. 4oreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.
4oreign investment was introduced in +>>+ under 4oreign Exchange -anagement #ct 94E-# , driven by then finance minister -anmohan $ingh. #s $ingh subsequently became the prime minister, this has been one of his top political problems, even in the current times. F+&GF+/G ndia disallowed overseas corporate bodies 9:%B to invest in ndia. F+(G ndia imposes cap on equity holding by foreign investors in various sectors, current 43 limit in aviation sector is maximum (>*. F+1G $tarting from a baseline of less than H+ billion in +>>), a &)+& <%T#3 survey pro!ected ndia as the second most important 43 destination 9after %hina for transnational corporations during &)+)I&)+&. #s per the data, the sectors that attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. -auritius, $ingapore, <$ and
$ince independence, ndia"s balance of payments on its current account has been negative. $ince liberaliation in the +>>)s 9precipitated by a balance of payment crisis, ndia"s exports have been consistently rising, covering =)./* of its imports in &))&I)/, up from 77.&* in +>>)I>+. #lthough ndia is still a net importer, since +>>7I>8, its overall balance of payments 9i.e., including the capital account balance, has been positive, largely on account of increased foreign direct investment and deposits from non'resident ndians; until this time, the overall balance was only occasionally positive on account of external assistance and commercial borrowings. #s a result, ndia"s foreign currency reserves stood at H&=1 billion in &))=, which could be used in infrastructural development of the country if used effectively. ndia"s reliance on external assistance and commercial borrowings has decreased since +>>+I>&, and since &))&I)/, it has gradually been repaying these debts. 3eclining interest rates and reduced borrowings decreased ndia"s debt service ratio to (.1* in &))8. n ndia, External %ommercial Borrowings 9E%Bs are being permitted by the 6overnment for providing an additional source of funds to ndian corporates. The -inistry of 4inance monitors and regulates these borrowings 9E%Bs through E%B policy guidelines.
'.0. iscuss the problems of inian small scale inustries an incentives offere to small scale inustries in inia $mall'scale industries in ndia could not progress satisfactorily due to various problems that they are confronted with while running enterprises. n spite of having huge potentialities, the ma!or problems, small industries face are given below. 1. $roblem of skille manpo+er:
The success of a small enterprise revolves around the entrepreneur and its employees, provided the employees are skilled and efficient. Because inefficient human factor and unskilled manpower create innumerable problems for the survival of small industries. on'availability of adequate skilled manpower in the rural sector poses problem to small'scale industries. 2. Inaeuate creit assistance:
#dequate and timely supply of credit facilities is an important problem faced by small'scale industries. This is partly due to scarcity of capital and partly due to weak creditworthiness of the small units in the country. 3. Irre(ular supply of ra+ material:
$mall units face severe problems in procuring the raw materials whether they use locally available raw materials or imported raw materials. The problems arise due to faulty and irregular supply of raw materials. 4. bsence of or(ani!e marketin(:
#nother important problem faced by small'scale units is the absence of organied marketing system. n the absence of organied marketing, their products compare unfavorably with the quality of the product of large' scale units. ". ack of machinery an euipment:
$mall'scale units are striving hard to employ modern machineries and equipment in their process of production in order to compete with large industries. -ost of the small units employ outdated and traditional technology and equipment. &. bsence of aeuate infrastructure:
-ost of the small units and industrial estates found in towns and cities are having one or more problems like lack of of power supply, water and drainage problem, poor roads, raw materials and marketing problem. 0. ompetition from lar(e/scale units an importe articles:
$mall'scale units find it very difficult to compete with the product of large'scale units and imported articles which are comparatively very cheap and of better quality than small units product.
incentives offere to small scale inustries in inia i. give more power to branch manager of Banks to grant loan, ii. simplification of forms'strengthening of recovery mechanism iii. opening of more specialised $$ branch etc.
0efer #ttachement.
