managerial economics vtu chapter 5 contents

India's business environment is dynamic and evolving, with many factors that can impact businesses:
Economic growth: India is the world's fastest growing major economy, with a strong manufacturing sector and resilient services.
Demographic trends: India's young population, with around half under 25, is driving demand for products and services.
Sustainability and social responsibility: Businesses are increasingly expected to consider the environmental and social impacts of their operations.
Regulatory environment: India's regulatory environment is complex and varies by state, which can make it difficult for businesses to navigate.
Natural disasters: India's vast size makes it vulnerable to natural disasters that can disrupt the economy.
Cultural differences: India's states have different cultures, languages, and infrastructure, which can create variance in business landscapes.
Political interference: Firms worry about political interference and whether the rule of law is reliable.
Legal disputes: There are many backlogged legal disputes in India's courts.
Land availability: It can be hard to obtain usable land.
Hiring: It can be hard to hire on the basis of merit.
Permits: New projects can require many permits.
Some things that could help improve India's business environment include:
Strengthening public-private partnerships
Amending the Companies Act to improve the ease of doing business
Digitizing processes
Updating the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act
Passing the Arbitration Bill
Business Environment in Present India - LinkedIn
The business environment in India is also being shaped by several social and demographic trends. For example, the countr...


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Department of Foreign Affairs and Trade
Show all ultural differences: India's states have different cultures, languages, and infrastructure, which can create variance in business landscapes.
Political interference: Firms worry about political interference and whether the rule of law is reliable.
Legal disputes: There are many backlogged legal disputes in India's courts.
Land availability: It can be hard to obtain usable land.
Hiring: It can be hard to hire on the basis of merit.
Permits: New projects can require many permits. Some things that could help improve India's business environment include:
Strengthening public-private partnerships
Amending the Companies Act to improve the ease of doing business
Digitizing processes
Updating the Securitisation and Reconstruction of

1. UNIT 5 INDIAN BUSINESS ENVIRONMENT MITE MBA

2. What is business Nature of modern business Large size Oligopolistic character Diversification Global reach Technology orientation Change Government control MITE MBA

3. Business environment All external factors which have a direct or indirect bearing on the activities of business The aggregate total of all people, organizations and other forces that are outside the power of industry but that may affect its business. MITE MBA

4. Nature of Business Environment The totality of external forces Specific and General forces Interrelatedness Dynamic nature Uncertainty Complexity Region specific MITE MBA

5. Nature of Indian Business Environment MITE MBA 1.Co – Existence of private and public sector 2. Low income level

6. 3. Poor rate of capital formation MITE MBA

7. 4. Low level of technology MITE MBA

8. 5. Under – utilization of capacity MITE MBA

9. 6. Lack of diversification MITE MBA

10. 7. Under developed financial markets 8. Industrial disputes and slow pace of labour reforms 9. Government interference 10. Transportation bottleneck MITE MBA

11. Scope of the Business Environment MITE MBA

12. MICRO ENVIRONMENT MITE MBA

13. MACRO ENVIRONMENT MITE MBA

14. ECONOMIC ENVIRONMENT Economic condition Economic policy Economic system MITE MBA

15. NON ECONOMIC FACTORS Demographic Technological Cultural Political Natural Legal MITE MBA

16. Closed economy A closed economy is one that has no trading activity with outside economies. The closed economy is therefore entirely self-sufficient, which means no imports come into the country and no exports leave the country. The goal of a closed economy is to provide domestic consumers with everything they need from within the country's borders. MITE MBA

17. Closed economy A closed economy is completely self-sufficient, with no imports or exports from international trade. The need for raw materials produced elsewhere that play a vital role as inputs to final goods makes closed economies inefficient. A government may close off a specific industry from international competition through the use of quotas, subsidies, and tariffs. In reality, there are no nations that have economies that are completely closed. MITE MBA

18. Features of closed economy It neither exports nor imports No FDI No FPI No gift transactions GNP and GDP are same. MITE MBA

19. Open economy An open market is an economic system with little to no barriers to free-market activity. An open market is characterized by the absence of tariffs, taxes, licensing requirements, subsidies unionization, and any other regulations or practices that interfere with free-market activity. Open markets may have competitive barrier to entry, but never any regulatory barriers to entry MITE MBA

20. What is quazi open & quazi closed economy? What is Primary, Secondary and Tertiary sector ? MITE MBA

21. Strengths of Indian Economy Projected growth of 11% for the year 2020-2021 Decreasing inflation rate .. 5.03% Current account balance is taking U turn from deficit to surplus Largest inflow of FDI The external debt condition is within safe The forex reserve have registered a grown of $360 billion. Demonetization MITE MBA

22. India's share in the manufacturing export is increasing Implementation of GST Inclusion Programmes of the Government MITE MBA

23. Measuring the National Income National income is the total value a country’s final output of all new goods and services produced in one year. Any transaction which adds value involves three elements – expenditure by purchasers, income received by sellers, and the value of the goods traded. All of the transactions in an economy can be looked at in this way, giving us three ways to measure national income. MITE MBA

24. The income method : Which adds up all incomes received by the factors of production generated in the economy during a year. This includes wages from employment and self-employment, profits to firms, interest to lenders of capital and rents to owners of land. The output method: Which is the combined value of the new and final output produced in all sectors of the economy, including manufacturing, financial services, transport, leisure and agriculture. The expenditure method: Which adds up all spending in the economy by households and firms on new and final goods and services by households and firms. MITE MBA Methods of Measuring the National Income

25. Product/Output Method The money value of goods and services produced in an economy in an accounting year is called Gross National Product (GNP). All types of activities are covered—the primary sector, e.g., agriculture, forestry and fishing; secondary sector, e.g., manufacturing and construction; and tertiary sector, e.g., distribution, transport, banking and insurance. MITE MBA

26. Problems with output method Unpaid Services Double Counting Stock Appreciation Services of Housewives Second hand dealings Capital gain exclusion GNP – Imports = GDP MITE MBA

27. Income method The people of a country who produce GDP during a year receive incomes from their work. Thus GDP by income method is the sum of all factor incomes. (Wage + salaries + Rent + Interest + Profit) MITE MBA

28. Problems in Income Method Owner occupied houses Self employed Houses Goods meant for Self consumption Wage & salaries paid in kind MITE MBA

29. Expenditure Method Total expenditure incurred by the society in a particular year is added together and includes personal consumption expenditure, net domestic investment, government expenditure on goods & services and net foreign investment. This concept is based on the assumption that national income equals national expenditure. MITE MBA

30. Government services Transfer payments Durable use of consumer goods Public expenditure MITE MBA Problems in Expenditure Method

31. Fiscal Policy Fiscal Policy deals with the revenue and expenditure policy of the Govt. The word fiscal has been derived from the word ‘ fisk ’ which means public treasury or Government funds . Objectives Higher Economic Growth Price stability Reduction in economic Inequality MITE MBA

32. Importance Consumption Control – This way, the ratio of savings to income is raised. Raising the rate of investment. Taxation, infrastructure development. Imposition of progressive taxes. Exemption from the taxes provided to the vulnerable classes. Heavy taxation on luxury goods. Discouraging unearned income. MITE MBA

33. Components of fiscal policy 1. Government Receipts Revenue Receipt Tax Revenue Direct Tax Indirect Tax Non tax reciepts Fees License and Permits Fines and Penalties, etc Capital Receipt Loans Recovery Disinvestments Borrowing and other liabilities MITE MBA

34. 2. Government Expenditure Revenue Expenditure – It is a recurring expenditure: Interest Payments Defence Expenses Salaries to Central Government employees, etc are examples of  revenue expenditure Capital Expenditure – It is a non-recurring expenditure Loans repayments Loans to public enterprises, etc. MITE MBA Components of fiscal policy

35. Public debt The total amount of money that is owed to the public by the government to meet the development funds. In public finance, it is also known as public interest, government debt, national debt and sovereign debt. MITE MBA

36. Types in fiscal policy 1. Fiscal policy is also considered to be neutral  when the ratio of government expenditure to tax collection remains consistent over time . MITE MBA

37. 2. Expansionary fiscal policy necessitates a higher level of expenditure than tax revenue. It focuses on initiatives that serve to increase employment (such as new building projects) and tax cuts . By pumping money into the economy, the primary purpose is to stimulate consumer demand. During recessions, governments are required to provide greater unemployment as well as other welfare benefits, resulting in increased government spending. MITE MBA Types in fiscal policy

38. 3. Governments may pursue a contractionary fiscal strategy if an economy achieves particularly strong growth rates and full employment. This entails a decrease in government spending as well as the imposition of greater taxes. Consumers have less discretionary money when governments tax them more. This, in turn, decreases aggregate demand, which may appear to be a bad thing, but actually aids in the reduction of inflation. MITE MBA Types in fiscal policy

39. Monetary policy Instruments used by central banks, which are centralised financial companies of nations or regional organizations, to control the money supply, or the quantity of money in a country. Central banks utilise these powers to create inflation rising prices in an economy—under line while also maximizing employment. MITE MBA