Question

Giving any four points, explain the impact of government policy changes on Business and Industry.

Answer 1

Policies of liberalisation, privatisation and globalisation by the government affect the functioning of business enterprises. The impact of government policy changes on the business and industry:

1) Increased competition: The policy allowed easy entry of foreign firms and abolition of licensing. Domestic companies thus have to compete with international firms in the market which is a serious challenge and threat to them.

2) Increased demand: Because of the fierce competition from the foreign market and new businessmen joining the production line, there has been a tremendous increase in customer demands for a better choice of goods and services.

3) Change in business policies: Business enterprises had to alter their policies and operations from time to time following government policies under the new industrial policy.

4) Technological changes: The competitive spirit has led new firms to fund new and innovative ways to outperform each other in the market. They increasingly adopt new technology and engage and invest further research and development.