Business Environment and Value-Based Management is an educational PowerPoint presentation designed to teach students and professionals about how businesses operate and how they can be managed more effectively. It explains various factors that influence businesses, such as money, laws, and technology, in simple terms that are easy to understand. The presentation also introduces the concept of Value-Based Management, which focuses on making decisions that add value to a company. Through real-life examples and practical advice, learners gain insights into setting goals, making smart choices, and measuring success in the business world. This presentation serves as a valuable educational resource for anyone looking to improve their understanding of business management principles and practices.

1. BUSINESS
ENVIRONMET AND
VALUE BASED
MANAGEMENT
MODULE 2

2. TOPICS
• Economic Environment
• Fiscal Management
• Budget and Economic Survey
• Direct Taxes vs Indirect Taxes
• Goods and Services Tax (GST) Concepts and Features
• Customs duty
• Monetary Policy and Tools
• Sectors of economy and their relative changing importance
• Post Liberalization Developments

3. • Economic System
– A nation’s system for allocating its resources among
its citizens, both individuals and organizations
• Factors of Production
– Labor: Human resources
– Capital: Financial resources
– Entrepreneurs: Persons who risk starting a business
– Physical resources: Tangible things used to conduct
business
– Information resources: Data and other information
used by businesses
Economic Systems

4. Economic environment definition
The economic environment relates to all the economic determinants that influence commercial and consumer compliance. The
term economic environment indicates all the external economic circumstances that affect the purchasing practices of customers
and markets. Hence, it influences the production of the business.
As a component of economic reformations, the government of India declared a new industrial system in July 1991. The extensive
characteristics of this system were as follows:
•The government decreased the number of enterprises below mandatory licensing to six.
•Many of the businesses held for the public sector under the initial policy were justified. The purpose of the public sector was
defined only to four industries of vital importance.

5. •Disinvestment was conducted in case of many public sector industrial companies.
•The policies towards foreign funds were expanded. The percentage of foreign equity partnerships was extended. In many ventures,
100 percent of foreign direct investment (FDI) was allowed.
•The automatic approval was now given for technology transactions with foreign firms.
•Foreign investment promotion board (FIPB) was established to support and channelise the foreign financing in India.

6. Types of Economic Systems
• Planned Economy
– A centralized government controls all or most factors
of production and makes all or most production and
allocation decisions for the economy.
• Market Economy
– Individual producers and consumers control
production and allocation by creating combinations of
supply and demand.
• Market
– A mechanism of exchange between buyers and
sellers of a good or service.

7. Liberalisation
The economic reforms that were presented were directed at liberalising the Indian business and trade from all the redundant
restrictions and limitations. They indicated the end of the licence-permit-quota raj. The liberalisation of the Indian business has taken
place with respect to the following:
•By eliminating the licensing terms in most of the industries, excluding a shortlist
•By providing freedom in determining the range of marketing activities, i.e., no constraints on the development or consolidation of
business pursuits
•By dismissing the restraints on the transportation of commodities and services
•By providing freedom in deciding the cost prices of commodities and services

8. Privatisation
• The new set of economic changes intended at proffering a prominent position to the private sector in the nation-building rule and a
diminished role to the public sector.
• This was a withdrawal of the growth policy attempted so far by the Indian directors.
• To accomplish this, the administration redefined the role of the public sector in the new industrial policy of 1991, approved the
policy of proposed disinvestments of the public sector, and determined the loss-making and weak industries to the Board of
Industrial and Financial Reconstruction (BIFR).

9. Globalisation
Globalisation implies the combination of different economies of the world heading towards the development of a united (closely-
knitted) global marketplace.
Till 1991, the government of India had followed a course of stringently controlling imports in terms of price and quantity. These laws
were with respect to the following:
•Licensing of imports
•Tariff limitations
•Quantitative constraints

10. https://youtu.be/X4iDSvUrDwM ECONOMIC
ENVIRONMENT VS ENVIRONMENT CHALLENGES IN
INDIA
https://youtu.be/oNFeOl7pW9s SUSTAINABLE
DEVELOPMENT IN SINGAPORE

11. What is Fiscal Management?
• Fiscal management is the process of keeping an organization running efficiently within its
allotted budget.
• Though the word "fiscal" can be used interchangeably with the word financial, in most cases, fiscal
management refers to money management within a government entity.
• Overall, its goal is to improve the way the department operates by properly planning, recording,
and performing procedures that relate to the budget.
• This involves a variety of tools, including budget spreadsheets, accounting software, and guides
outlining.
• Poor fiscal management is indicated by a lack of record-keeping and unnecessary or unplanned
expenditures that can cause a department to go over budget or fail to meet its objectives.
• Generally, fiscal planning is done yearly, often coinciding with the fiscal year under which the
department operates. A fiscal year is typically a 12-month period, but it is not always the same as a
calendar year.

16. https://youtu.be/V7uEKN7lhw8 GREEN FISCAL POLICY

17. Economic Survey Union Budget
The First Economic Survey was
submitted and presented in Lok
Sabha in the year 1950-51.
The First Union Budget of India was
presented on November 26, 1947. It
was presented by RK Shanmukham
Chetty. In this budget, the economy
was reviewed and no new taxes
were imposed.
From 1964, the Economic Survey is
presented a day before Budget
The Union Budget is presented a
day after the Economic Survey is
presented.
The Economic Survey reviews the
developments in the Indian
economy over the past financial
year, highlights the policy initiatives
of the government and economic
prospects in the short and medium-
term
In the Union Budget, the central
government makes an estimate of
revenue and expenses for the
forthcoming financial year.
The Major difference Between Economic Survey vs Union Budget are:

19. https://www.indiabudget.gov.in/economicsurvey
https://www.indiabudget.gov.in/

22. GST
https://www.incometax.gov.in/iec/foportal/help/individual/re
turn-applicable-1 Income tax recent rates

28. HSN stands for Harmonized System of Nomenclature code. This is a 6-digit code that classifies various products. Manufacturers, importers
and exporters have been using HSN codes for a long time now.
SAC (Services and Accounting Code) codes are based on the Harmonized System of Nomenclature which is an internationally recognized
system for classifying and codifying all the products in the world. This system enables the compliance of GST based on international

29. https://youtu.be/JK8CzkQh1FY GST APPLICATION
https://cbic-gst.gov.in/gst-goods-services-rates.html 2022 GST RATES OFFICIAL PAGE

33. •The rate of Customs duty varies depending on where the goods were made and what they were made of.
•Custom duty in India is defined under the Customs Act, 1962, and all matters related to it fall under the
Central Board of Excise & Customs (CBEC).
•The Budget estimate of the government's customs revenue for the year 2020-21 was Rs 1,38,000 crore.
The revised estimates of customs for the 2019-20 Budget came at Rs 1,25,000 crore, while the actuals for
the 2018-19 Budget stood at Rs 1,17,812.85 crore.
Types of custom duty
Basic Customs Duty (BCD)
Countervailing Duty (CVD)
Additional Customs Duty or Special CVD
Protective Duty,
Anti-dumping Duty

34. Basic Customs Duty
Basic custom duty is the duty imposed on the value of the goods at a specific rate. The duty is fixed at a
specified rate of ad-valorem basis. This duty has been imposed from 1962 and was amended from time to
time and today is regulated by the Customs Tariff Act of 1975. The Central Government has the right to
exempt any goods from the tax.
Countervailing Duty (CVD)
This duty is imposed by the Central Government when a country is paying the subsidy to the exporters who
are exporting goods to India. This amount of duty is equivalent to the subsidy paid by them. This duty is
applicable under Sec 9 of the Customs Tariff Act.
Additional Customs Duty or Special CVD
In order to equalize imports with locals taxes like service tax, VAT and other domestic taxes which are
imposed from time to time, a special countervailing duty is imposed on imported goods. Hence, is imposed to
bring imports on an equal track with the goods produced or manufactured in India. This is to promote fair
trade & competition practices in our country.
Safeguard Duty
In order to make sure that no harm is caused to the domestic industries of India, a safeguard duty is imposed
to safeguard the interest of our local domestic industries. It is calculated on the basis of loss suffered by our
local industries.

35. Anti Dumping Duty
Often, large manufacturer from abroad may export goods at very low prices compared to prices in the domestic
market. Such dumping may be with intention to cripple domestic industry or to dispose of their excess stock. This
is called ‘dumping’. In order to avoid such dumping, Central Government can impose, under section 9A of
Customs Tariff Act, anti-dumping duty up to margin of dumping on such articles, if the goods are being sold at less
than its normal value. Levy of such anti dumping duty is permissible as per WTO agreement. Anti dumping action
can be taken only when there is an Indian industry producing ‘like articles’.
National Calamity Contingent Duty
This duty is imposed by Sec 129 of the Finance Act. The duty is levied on goods like tobacco, pan masala or any
items that are harmful for health. The rate of the tax varies from 10% to 45% and different rates are applied for
different reasons.
Education Cess on Customs Duty
At the prescribed rate is levied as a percentage of aggregate duties of customs. If goods are fully exempted from
duty or are chargeable to nil duty or are cleared without payment of duty under prescribed procedure such as
clearance under bond, no cess would be levied.
Protective Duties
Tariff Commission has been established under Tariff Commission Act, 1951. If the Tariff Commission recommends
and Central Government is satisfied that immediate action is necessary to protect interests of Indian industry,
protective customs duty at the rate recommended may be imposed under section 6 of Customs Tariff Act. The
protective duty will be valid till the date prescribed in the notification.

45. Tertiary Sector/Service Sector
•This sector’s activities help in the development of the primary and secondary sectors.
•By itself, economic activities in tertiary sector do not produce a goods but they are an aid or a support
for the production.
•Goods transported by trucks or trains, banking, insurance, finance etc. come under the sector. It
provides the value addition to a product same as secondary sector.
•This sector jobs are called white collar jobs.

46. Organised Sector
•In this sector, employment terms are fixed and regular, and the employees get assured work and social
security.
•It can also be defined as a sector, which is registered with the government and a number of acts apply to the
enterprises.
•Schools and hospitals are covered under the organised sector.
•Workers in the organised sector enjoy security of employment.
•They are expected to work only a fixed number of hours. If they work more, they have to be paid overtime by
the employer.

47. Unorganised Sector
•An unorganised worker is a home-based worker or a self-employed worker or a wage worker in the
unorganized sector and includes a worker in the organized sector who is not covered by any of the Acts
pertaining to welfare Schemes as mentioned in Schedule-II of Unorganized Workers Social Security
Act, 2008.
•In this sector wage-paid labour is largely non-unionised due to casual and seasonal nature of employment and
scattered location of enterprises.
•The sector is marked by low incomes, unstable and irregular employment, and lack of protection either from
legislation or trade unions.
•The unorganised sector uses mainly labour intensive and indigenous technology. The workers in unorganised
sector, are so scattered that the implementation of the Legislation is very inadequate and ineffective. There are
hardly any unions in this sector to act as watch-dogs.
•But the contributions made by the unorganised sector to the national income, is very substantial as compared
to that of the organised sector. It adds more than 60% to the national income while the contribution of the
organised sector is almost half of that depending on the industry.

48. The Public Sector
•In the sector, government owns most of the assets and it is the part of the economy concerned with providing
various governmental services.
•The purpose of the public sector is not just to earn profits. Governments raise money through taxes and other
ways to meet expenses on the services rendered by it.
The Private Sector
•In the private sector, ownership of assets and delivery of services is in the hands of private individuals or
companies.
It is sometimes referred as the citizen sector, which is run by private individuals or groups, usually as a means of
enterprise for profit, and is not controlled but regulate by the State.
•Activities in the private sector are guided by the motive to earn profits. To get such services we have to pay
money to these individuals and companies.

49. What is post liberalization?
•Economic Growth : Post -LiberaliSation Era(after 1991)
•Economic reforms brought foreign competition, led to privatisation of certain public sector
industries, opened up sectors hitherto reserved for the public sector and led to an expansion in
the production of fast-moving consumer goods.

51. Post Liberalisation change in Automobile industry