The Role of Indian Government in Business Environment
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1.Government: Regulator of Business
The entire regulatory legislations and policies stand covered under this segment
On the one hand, there is a very large indirect area of government control over the functioning of private sector business through budgetary and monetary policies.
Government’s regulatory functions with regard to trade, business and industry aim at laying down the limits for the private enterprise. The regulatory functions of the Government include
restraints on private activities,
control of monopoly and big business,
development of public enterprises as an alternative to private enterprises to ensure competitive dualism,
maintenance of a proper socioeconomic infrastructure.
2. Government: Promoter of Business:
Promotional role is a very important role and positive role played by the Government in the developed countries as well as the developing countries.
Promotional role includes the following activities: To build up the necessary development infrastructure e.g. finance, transport, power, marketing and other promotional activities.
Revival of sick units
Encouragement to small scale units
Removal or regional imbalances
Provision of incentives and subsidies and export promotion
3. Government as an Entrepreneur:
In many countries, the government also plays the role of an entrepreneur. It means that the business houses are established and operated by the government and the risk is also born by the government.
The reasons for the growth of state owned Enterprises are as follows:
Absence or dearth of private entrepreneurship
Neglect of certain non-profitable sectors by the private entrepreneurs
Monopolies in certain sectors and the resultant exploitation of consumers
Social political idealogies
The true entrepreneurial role of the government is when the government decides to take a lead in starting a major new industry in the absence of private entrepreneur.