BUSINESS ENVIRONMENT

1. Economic Environment
• The term economic environment refers to all the
external economic factors that influence
buying habits of consumers and businesses and
therefore affect the performance of a company.
These factors are often beyond a company's
control, and may be either large-scale (macro) or
small-scale (micro).

2. • The economic environment consists of different
things for different people. For example, for a
farmer, the weather and price of fertilizers are
important factors. For a TV channel on the other
hand, the growth in Internet advertising matters a
great deal, but not the weather.
• Several external factors have a significant
influence on a country's economy. These factors
play a huge role in deciding consumer
behaviour and financial flow of a country,
thereby affecting its economic activities. All these
elements together constitute the economic
environment definition.

3. CHARACTERISTICS OF ECONOMIC
ENVIRONMENT
• The characteristic of economic environment are:the totality of
economic factors such as employment, income,
inflation,internet Rates,productivity and
wealth,thatinfluence,the buying behaviour of consumer and
institution.
• Wealth Producing Activities:
• Satisfying Human Wants:
• Money Income:
• Developmental Activities:
• Proper Allocation of Resources:
• Optimum Use of Resources:

4. Importance of Economic Environment
• The economic environment is perhaps the most
important aspect of a remote environment. In
fact, economic environment is the potential
for the success of the international trade. By
economic environment, we mean domestic or
national and international or global.

5. Salient features of various economic system
• (1) Mixed Economy. ...
• (2) Low per Capita Income. ...
• (3) Dominance of Agriculture and Heavy
Population Pressure on Agriculture. ...
• (4) Over-Population. ...
• (5) Unbalanced Economic Development. ...
• (6) Low rate of capital formation. ...
• (7) Lack of Infrastructure Facility.

6. New Industrial policy and industrial licensing
• Abolition of licensing: New Industrial
Policy'1991 abolished licensing for most
industries except 6 industries of strategic
significance. They include alcohol, cigarettes,
industrial explosives, defence products, drugs and
pharmaceuticals, hazardous chemicals and certain
others reserved for the public sector.
• Under this provision, industries located within
25 kilometers of the periphery of cities having
a population of at least one million, must obtain
an industrial license from the federal government.

7.  The New Industrial Policy' 1991, the Indian
Government intended to integrate the country's
economy with the world economy, improving the
efficiency and productivity of the public sector. To
accomplish this objective, existing government
regulations and restrictions on industry were
removed.
 In 2021-30, India's new industrial policy opens
Jammu and Kashmir
 It has opened Jammu and Kashmir to the world after
the abrogation of the special status of the state and its
division into two union territories - Jammu and
Kashmir and Ladakh on.

8. NEW ECONOMIC POLICIES
• New Economic Policy (NEP), the economic policy of
the government of the Soviet Union from 1921 to
1928, representing a temporary retreat from its
previous policy of extreme centralization and
doctrinaire socialism. ... Money was reintroduced into
the economy in 1922 (it had been abolished under War
Communism). the seven important features of new
economic policies under economic reforms, i.e.,
(1) Liberalisation, (2) Privatisation, (3) Globalisation
of the Economy, (4) New Public Sector Policy, (5)
Modernisation, (6) Financial Reforms, and (7) Fiscal
Reforms.

9. economic reforms and its effects on business
• Reforms led to increased competition in the sectors
like banking, leading to more customer choice and
increased efficiency. It has also led to increased
investment and growth of private players in these
sectors.
• The major elements of economic reform
are liberalization, improved resource allocation ,
tax reform, privatization and macroeconomic
adjustment

10. Emerging Economies.
• The 10 Big Emerging Markets (BEM) economies are
(alphabetically ordered): Argentina, Brazil, China, India,
Indonesia, Mexico, Poland, South Africa, South Korea and
Turkey. Egypt, Iran, Nigeria, Pakistan, Russia, Saudi Arabia,
Taiwan, and Thailand are other major emerging markets.
Characteristics of an Emerging Market Economy
• Rapid growth. ...
• High productivity levels. ...
• Increase in the middle class. ...
• Transition from a closed economy to an open economy. ...
• Instability and volatility. ...
• Attraction of foreign and local investments.