Government and Business Interface: Rationale
The government of any country can influence. Its international business significantly. Government intervention for the purpose of protecting domestic industries usually results in less movement of goods and services across borders.
In 1944, when the war was still in progress, the Department of planning and development was setup.
A new Industrial policy was announced by the government and the then viceroy, lord wavell, declared in 945, “Government has decided to take positive steps to encourage and promote industrialisation of the country to the fallent extent possible”.
Even after the war, distortions in the economy continued, some of them in new dimensions and many of the war-time regulation could not be removed or even relaxed. The concept of competitiveness does not completely disappear but it becomes more complex. Country specific variable will still have some impact income level’s, natural resources, infrastructure, educations, training, etc, but these are only one part of a complex picture of global interrelationship.
The government’s role in removing the poverty of millions of people and impraing their standards of living was realised by all concerned.
THE ROLES OF GOVERNMENT
The role of the government should be to facilitate the process of people’s involvement in development activities by creating the rights types of institutional infrastructure, particularly in rural areas. Without organised government, individual citizens and business would operate like beasts in jungle.
- The Government as Customer
As a customer, the government often causes business firms to set new purchasing procedures. The Government wants to encourage. Competition because it has established its own set of standards for projects and it makes purchases an the basis of performance, not in response to advertising.
- The Government as Competitor
Besides meeting government regulations concerning their activates, same business must complete with government owned operations. Deposit insurance home mortgaging insurance, bank loan guarantees, and medical insurance were, undertaken only because private companies would not or could not provide them. Today they have made the government a competitor against many private business firms.
- The Government as a tan collector
Most beginning workers are shocked when they look at their first paycheck and see how much of their earnings have been withheld by the government. For business students that experience is an introduction to how federal income tax are collected. This is an important and complex aspect of the relationship between government and business.
- Business Responsibilities to Government
Business firms have a umber of responsibilities to the government. Business firms must obey the laws of central, state and local governments. Business should look to the government for support, sustenance, encouragement and guidance. Business leaders must follow government as a big brother who is wiser, more matured, more mellowed and less impetous element in business.
A few important responsibilities of business towards the government are explained below:
(a) Tax Payment
Taxes paid by business enterprises constitute a major source of revenue to the government firms themselves pay regular taxes and their sales, input and income and also deduct, at source income taxes form salaries and wages at employees and remit the collection to the government.
(b) Voluntary programmes
In co-operation with the government, business firms train unemployed and support non-discriminative recruitment of personnel and workmen. Business extends these facilities under the name of social responsibilities.
(c) Providing Information
Political leaders, either because of inexperience or over enthusiasm, make certain decisions which may not be in the overall interest of business. Business leaders pocess the necessary knowledge and experience to place their points of view before the political leaders.
(d) Government Contracts
May business firms bid for government contacts and, if successful, carry out the resulting projects with the required specifications and standards. Housing projects, oil pipelines, turnkey projects and others are executed by private business house for the government.
(e) Government Service
Business offers services of its leaders to the government. It is not unusual for business executives to lead or accompany delegations to foreign countries for exploring trade and industry prospects, similarly, business leaders serve on various advisoy boards constituted by the government.
(f) Political Activity
Political participation is a much debated subject today. There are arguments for and against participation of business in political activities. Justifying business politics nexus G.D. Birla once said As the Bhagavad Gita says, every man must do his duty which means if you are a wealthy man, you must do your duty by your wealth and his dharma is to provide for general welfare.
(g) Government responsibilities to Business
Government responsibilities to business are much greater than the obligation of business to the government, Government has the power, will and resources to decide, shape, guide and control business activities. The government responsibilities towards business are as follows.
(h) Establishment and enforcement of laws
Government Establishment and enforces laws and regulations under which the business functions. Laws and regulations covering all aspects of the business enacted by the government. Government is responsible for providing the rules of the game, which make the business systems function smoothly. It is the responsibilities of government to enforce the laws and to provide a system of courts for adjudicating differences between business firms, individuals and government agencies.
Maintenance of order Government has the responsibility of maintaining order and protecting persons and property. It would be impossible to carry as business in the absence of a peaceful atmosphere.
- Money and credit: The govt. provides a system of money and credit by means of which transactions can be affected. It is also responsibility of the govt. to regulate money and credit and protect the integrity of the rupee, that is, to grand against rapid fall in its value.
- Orderly growth: Orderly growth implies balanced regional development, distributive justice, full employment and protecting the economy against ‘booms and bunts’ The Government has the resources and capabilities to ensure orderly growth.
Business needs for its effective functions such Infrastructural facilities as transportation, power, finance, trained persons and civic amenities. It is the responsibilities of the government to provide these facilities.
Government agencies publish and provide a large volume of information which is used extensively by business firms. Included are information services of the departments of commerce and industry, agriculture labours, health, education, banking, atomic energy and host of others. Many state and local governments also provide information highly useful for business leaders in conducting their activities.
(k) Government Competition
Government often competes with private business firms for the purpose of regulating competition, improving quantity or to supplement private activities with govt. programs. In same cases the govt. regulates the prices which may be charged for buyers.
- Inspections and licenses: Government agencies conduct inspection activities foods and drugs, for example assuring quality products to consumers. Government issues licenses to completed business establishment to carry as different activities.
- Tariffs and quotas: Tariffs and quotas used by the government to protect business from foreign completions. Incentives and subsidies are granted by the government to encourage the development of home industries.
(l) Transfer of Technology
Government owned research establishments transfer their discoveries to the private industry in order to put them to commercial production more striking success in the technology transfers is in the areas of instruments for processing remote sensing data.