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Political & LegalPolitical & LegalEnvironmentEnvironment

Presented By:

Santosh Ambwani

&

Prerna

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What is Political EnvironmentWhat is Political Environment

Political & Legal Environment of aPolitical & Legal Environment of a

Country consists of political & regulatoryCountry consists of political & regulatoryinvolvement & influence to promote, restrict, orinvolvement & influence to promote, restrict, or

handle corporate processes.handle corporate processes.

The tools are :The tools are :

Various Corporate Acts,Various Corporate Acts,

Annual Regulatory Decisions,Annual Regulatory Decisions,

Analysis of business projects by Govt. officialsAnalysis of business projects by Govt. officials

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Political Structure / SystemPolitical Structure / System

LEGISLATURELEGISLATURE

EXECUTIVE OR GOVERNMENTEXECUTIVE OR GOVERNMENT

JUDICIARYJUDICIARY

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LEGISLATURE :LEGISLATURE :Most powerful as it does,Most powerful as it does,

decision making, policy making, law making,decision making, policy making, law making,budget approving and above all mirror of publicbudget approving and above all mirror of publicopinion.opinion.

EXECUTIVE or GOVERNMENT :EXECUTIVE or GOVERNMENT :It is centreIt is centre

of political authority having the power to governof political authority having the power to governthose it serves. Functions & controls the society &those it serves. Functions & controls the society &business as well.business as well.

JUDICIARY :JUDICIARY :

It ensures legal execution of theIt ensures legal execution of the

work & projects according to the rules laid down bywork & projects according to the rules laid down by

legislation.legislation. ( K. G. basin dispute )( K. G. basin dispute )

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IMPORTANCE. .IMPORTANCE. .

PromotesPromotes Subsidiaries to industriesSubsidiaries to industries

EncouragesEncourages Govt. agencies toGovt. agencies to promotepromote

DirectsDirects

Controls Companies Act 1956Controls Companies Act 1956

Decision Making MRTP Act 1969, FEMADecision Making MRTP Act 1969, FEMA

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How should a political environment be:How should a political environment be:

Stable (Bengal v/s Gujarat)

Honest ( Bihar )

Efficient ( North-East India ) Ensuring Public

Participation

Ensuring Personal

Security

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If The System is Poor. .If The System is Poor. .

Foe Eg.From 1972 1976, J.R.D. Tata proposed

478 business proposals, While only 18 got theapproval.

Birla Group stopped their expansion inIndia after 1972, and shifted his 18 new projectsto Malaysia, Indonesia, Thailand. . .

Coca Cola left India in 1977, bcoz of a

provision of FERA. That none of foreigncompanies can have more than 51% stake inIndia.

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AFTER 1990sAFTER 1990s

All the tables turned around as LPG wasbrought into India in 1990. Suddenly there weredrastic changes in indian corporates as theconsequences of changes in political environment

Coca Cola came back in Indian market in 1993.

Birla group started their expansions again after1990.

Regulations for MNCs became too liberalisedcomparatively as it increased the flow of foreigninvestment in the country.

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Responsibilities. .Responsibilities. .

Taxes

Information

BUSINESS Contracts GOVT.

Political Activity

Voluntary Programmes

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Responsibilities. .Responsibilities. .

Law & Order

Competition

GOVT. Orderly Growth BUSINESS

Infrastructure

Technology

Small Industries

Tariffs & Quotas

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Conclusion. . .Conclusion. . .

After all the discussion over political

environment we can conclude that:

A healthy, efficient, comfortable &promoting political environment favours thesubstantial growth of business in any country,specially when we talk about the largest

democracy of the world.

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