Question

Explain the three impacts of changes in government policy on Business and Industry.

Answer 1

Impacts of Government Policy The New Industrial Policy, 1991 brought reforms in terms of Liberalisation, Globalisation and Privatisation. These had a major impact on the working of enterprises in business and industry. These have posed several challenges to the Indian corporate sector. They are:

• Technological environment Increased competition force the firms to develop new ways to survive and grow in the market. Thus, there is a need to adopt the new technologies in order to survive in the long run.
  
• Need for developing human resources The new market conditions require people with higher competence and greater commitment. Hence, there is a need of developing human resources.
• Market-orientation The business enterprises start focusing on market-oriented techniques rather than production-oriented techniques.
• Necessity for change After 1991, the market forces have become turbulent. As a result, business enterprises have to continuously modify their operations.