GOVERNMENT INFLUENCING BUSINESS

INTRODUCTION

• The government influences businesses through its control of fiscal and monetary policy as well as its ability to establish and abolish laws and regulations concerning how businesses can operate.

FISCAL POLICY

•Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. •It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.

TOOLS OF FISCAL POLICY

Fiscal policy has three important tools 1.Taxation2.Public expenditure 3.Public debt management

TAX REFORMS

• Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits.

PUBLIC EXPENDITURE

Public Service Reform was a central element of the response to the crisis of recent years and remains an essential part of building for the future.  Since the first Public Service Reform Plan was published in November 2011, a comprehensive programme of reform has been implemented

PUBLIC DEBT MANAGMENT

• Public debt management is the process of establishing and executing a strategy for managing a governments' debt in order to raise the required amount of funding, achieve its risk and cost objectives, and to meet any other debt management goals that a government may have set

MONETARY POLICY

• Monetary policy is the process by which the fiscal authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency

MONETARY POLICY

GOVERNMENT AFFECTS BUSINESS• Over time economies grow

but the pattern of growth is not even – it goes up and down.

• This can be illustrated in this business cycle diagram.

• There are two main phases when government will intervene which will have an effect on business.

GOVERNMENT AFFECTS BUSINESS• Boom is when national

income is growing fast – this will be a good time for a business because demand will be high

• Recession is when national income is falling- the business confidence will be low and they will not want to invest in growth

MORE EXAMPLES OF GOVT. INFLUENCE OF BUSINESS ACTIVITY

• Subsidies may be given to businesses that make ‘green products’ such as solar heating systems. This should encourage businesses to produce ‘green products’.

• Employment subsidies may be given to firms that create jobs in a depressed area. This would influence business decisions relating to recruitment and location

• Free government advice and training may be given to businesses that launch product overseas.

MAKE IN INDIA

MAKE IN INDIA • Launched by Prime Minister on 25 September 2014.• Make in India is an initiative launched by the Government of India to encourage multi-national, as well as national companies to manufacture their products in India.•India emerged as the top destination globally for foreign direct investment surpassing many developed nations.

MAKE IN INDIA• Ultimate objective is to make India a renowned

manufacturing hub for key sectors. • Companies across the globe would be invited to make

investment and set up factories and expand their facilities in India.

• Using India’s highly talented and skilled manpower to create world class zero defect products.

• The purpose of Make in India Campaign-– Job Creation– Economic Development– Global Recognition– Mission

MAKE IN INDIA

• Let’s move on to Major sectors

SKILL INDIA

SKILL INDIA• Skill India campaign was launched by Prime Minister

Narendra Modi on 15 July 2015 to train over 40 crore people in India in different skills by 2022.

• Various initiatives under this campaign are:1.National Skill Development Mission2.National Policy for Skill Development and

Entrepreneurship, 20153.Pradhan Mantri Kaushal Vikas Yojana (PMKVY)4.Skill Loan scheme5.Rural India Skill

THANK YOUROLL NO NAME28 RICI N SOHANI