The document discusses the relationship between government and business. It states that the two institutions determine domestic and foreign policy and influence each other. The government's policies and ideology shape the business system, while a stable political environment allows businesses to take risks and grow. The relationship is reciprocal, as businesses pay taxes, support social programs, and provide feedback to the government, while the government provides infrastructure, credit, and protects businesses.

16. Government-Business Relationship
 Government and businesses are the two most powerful institutions
in any society.
 The two together determine public policy, both domestic and
foreign, for a country.
 The policies, practices and regulations of the government influence
to a large extent the nature, growth and functioning of the business
system.
 In a situation of political stability business flourishes and
businessmen venture to take greater risks.
 In the same way the ideology of the ruling party determines the
nature and extent of economic development.
 If the ruling party believes in socialism, government control and
ownership of business will grow.
 For example, public sector dominated development strategy in India
until 1990. Major economic policies of a nation such as industrial
policy, fiscal policy, monetary policy, and foreign trade policy are
often based on political considerations. Several political decisions
have strategic implications for business and industry.

17. The political environment includes all laws, government agencies, and lobbying
groups that influence or restrict individuals or organizations in the society.

18. Responsibilities of Business Towards Government
 Regular payment of taxes
 Voluntary programmes
- Sponsoring social welfare programmes
- Environmental preservation
- Promoting education
- Assistance in drought, flood etc.
 Providing Feed back information
 Government contracts
 Providing service to the government through becoming
member in advisory board

19. Responsibilities of Government Towards Business
Provision of peaceful atmosphere
Provision of a system of money and credit
Balanced development and growth
Provision of basic infrastructure
Provision of information
To assist small scale industries
Licensing and inspection
Protection from foreign competition