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Aug
27

THE IMPACT OF POLITICS ON BUSINESS

The impact of politics on business environment roots to way back to 1880’s. Began in 1881, when British government brought its 1st factory act as an attempt to control day to day business in India. Later, 2nd factory act which came in 1891 shows the attitude of British government to centralize the Indian businesses. During 1914-47, the capitalist class grew rapidly increasing its strength and self-confidence. Since the earlier 1920’s, efforts were being made by various capitalist like G.D. Birla and Purshottam Das Thakurdas who establish national level organization of Indian commercial for industrial and financial interest led to the foundation of FICCI (Federation of Indian Chambers of Commerce and Industry) in 1927. Then during the 2nd session of FICCI in 1928, Sir Purshottam Das president of FICCI declared,” We can no more separate politics from economics”.

After 1947, a new era in the light of Nehru came up. In 2nd Five-year plan maholnobis model came up, which is an attempt by Jawaharlal Nehru to boost heavy industry in order to attain sell sufficiency and strength in business environment. Up till 1991, the government had the policies to control the business at center level; it was a licensed Raj where majority of business was control by the government. But the impact of global business was being felt by the Indian market and they needed a reform which came during the government of P.V. Narsimha Rao and Manmohan Singh. They opened the gates of trade and now the business was seen more into Liberalization, Privatization and Globalization.
Now the business was much rapid and challenging the government sector to push through the limits. Business was booming with the political action that took place in 1990’s and private player came up in huge numbers for investment and India experienced sudden growth in its economy which was earlier on a slower side. With this change in center, at certain time there was change in the political atmosphere during the reign of NDA (National Democratic Alliance). The nuclear test had its own consequences as many developed countries put up restriction on trade and commerce, but the huge potential market of India with more than a billion consumer which cannot not be ignored for upcoming time and India smoothly passed through the situation and its business was not effected to larger extent.
Business do see changes with change in policies as currently the F.D.I brought up in retail, banking, insurance, airline and many such do bring up vital change in the execution of business. The free trade agreement to reduce the tariff barrier further has its own implication on the import-export business module. Different government at center and at state level does have its own dimension related to business. The co-existence or the symbiotic relationship of politics and business could not be separated out.

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