Briefly discuss the impact of Government policy changes on business and industry.

The impacts of government policy changes on Business and Industry in India are the following:

(i) Increasing Competition: Today, business is facing all round competition. The competition for Indian companies has increased especially in service industries like: Telecommunication, Airlines, Banking, insurance, etc. Competition has crossed the national boundaries and assumed a global shape. The following are the chief competitors: (a) New and old Indian companies, (b) Multinational Companies, (c) Import. Increasing competition has adversely affected many companies. For example, once a popular Western Coloured Television has lost much ground in the TV market and its contribution to the market is almost negligible.

(ii) More Demanding Customers: As a result of the economic reforms, the customers have complete information about the goods available in the market. Earlier, they used to purchase goods and services without much inquiry because of the lack of information. But these days because of the availability of enough information the area of customers’ demand has increased considerably. Now, they have started buying good quality goods and services.

(iii) Rapidly Changing Technological Environment: Rapid changes are taking place in the technological environment as compared to other factors in respect of business environment. The reason is increase in competition. These days only that particular company can remain steadfast in the market which markets, products of better convenience. This is possible only by using latest technology. Latest technology makes modern machinery and production process available. Big firms are grappling with this environment but for the smaller firms it is an alarm bell.

(iv) Necessity for Change: Before the implementation of economic reforms (before 1991) the businesses were more stable. Policies once laid down used to continue for a long time. However, these days because of the free economic environment the various factors of business environment are undergoing rapid changes. Consequently, the businesses have become unstable and the policies have to be changed quickly.

(v) Need for Developing Human Resource: It is a big challenge to achieve success in business these days. It is not easy for the ordinary employees to face this challenge. It needs a thoroughly accomplished human resource equipped with the latest information. There has been a shortage of trained human resource in India. That is the reason that their demand is now rapidly increasing.