Sem-1, MBA, Business Society and Law, Unit 5, Policies and Business Laws, 03.06.2021

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2 Business, Society and Law www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

Unit V – Policies and Business Laws 3 ▪ Factors in Political Environment ▪ Constitutional Provisions Affecting Business ▪ Constitutional Provisions Regarding Trade, Commerce and Intercourse Within The Territory Of India 3 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

4 What is Political Environment? www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

5 ▪ Political system, the set of formal legal institutions that constitute a “government” or a “state.” ▪ The political system is seen as a set of “processes of interaction” or as a subsystem of the social system interacting with other nonpolitical subsystems, such as the economic system. 5 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

6 ▪ In this context, state means the political unit within which power and authority reside. ▪ Government means the group of persons who direct the political affairs of a state, but it can also mean the type of rule by which a state is run. 6 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

7 ▪ A political system has been defined by Dahl (1976) as a \"persistent pattern of human relationship that involves, to a significant extent, control, influence, power, or authority.\" ▪ There is different government approach followed in different countries one side is people elected government which is popularly known as Democratic form and other is Communism form where all form of economic activities is under the control of community. 7 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

8 ▪ There are different forms between these two main forms. ▪ Different forms of Political system. ▪ The political structure, its framework, regulation system followed and the formation of the government constitutes Political System which is composite and immense. 8 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

9 ▪ Political system administers whole set of directives, ordinance, governing bodies and perception. ▪ The difference of political forms lies in the way segregation of priorities are define like business, people, legal system, international treaties and trade and so on. 9 www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

10 ▪ On the one side of extremity is the political ideology of anarchism where whole control of economics and politics lies in the hand of individual and government is not at all necessary aspect for the country. ▪ On the other hand, extreme approach is totalitarianism where complete control is in the hand of central government. www.cuidol.in Unit-1(MAP-607) 10 All right are reserved with CU-IDOL

11 ▪ This blended form is termed as pluralism, where balance is strike between public and private sector for efficient working of such form. www.cuidol.in Unit-1(MAP-607) 11 All right are reserved with CU-IDOL

Political Stability and Change 12 ▪ The political forms lay down the scope of government and its functioning. ▪ The import-export policy, the encouragement of specific sector based on the circumstance (For instance, a special package of investment is allocated to pharmaceutical Industry during COVID-19 pandemic). www.cuidol.in Unit-1(MAP-607) 12 All right are reserved with CU-IDOL

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14 1. Taxation policy ▪ Direct and Indirect Tax system is the main source of income for our Government. Indian Government comprises of three different federal levels viz., Central Government, State Government and Local/Rural Government. www.cuidol.in Unit-1(MAP-607) 14 All right are reserved with CU-IDOL

15 ▪ The provisions of Constitution have given authority to three levels of Government to impose and collect the taxes. There are different types of taxes levied for different economical sector like there is Custom duties – for imported goods; www.cuidol.in Unit-1(MAP-607) 15 All right are reserved with CU-IDOL

16 ▪ Income Tax for people who are engaged and earning income, Central and State GST for availing the benefits of services, professional tax for offering professional services. www.cuidol.in Unit-1(MAP-607) 16 All right are reserved with CU-IDOL

17 ▪ Direct tax is imposed on individual and corporate bodies. Direct taxes are higher for high income individual. Income tax is based on the earning of an individual or business. ▪ Property Tax is charged on Individual or Corporate’s building, home and land. Capital Gain tax is collected when an individual earns income by selling stock, property or a business. www.cuidol.in Unit-1(MAP-607) 17 All right are reserved with CU-IDOL

18 ▪ Gift tax is the form of transfer tax which is collected when wealth is transferred from one individual or business to other in the form of gift or prize money for any event. ▪ www.cuidol.in Unit-1(MAP-607) 18 All right are reserved with CU-IDOL

19 ▪ The taxes which are imposed indirectly on the public for goods and services are termed as Indirect Taxes. Goods and services tax is a collective form of taxes, which is divided into different slabs by GST council. www.cuidol.in Unit-1(MAP-607) 19 All right are reserved with CU-IDOL

20 ▪ Service tax include taxes on using telephone, maintenance service, health centre, etc. When the goods are sold in the state, Value added tax is collected and the rates are decided by the government. www.cuidol.in Unit-1(MAP-607) 20 All right are reserved with CU-IDOL

21 ▪ Octroi tax are collected when goods are being transferred from one state to other and the rates are decided by the State Government. ▪ Custom Duty is collected for imported goods, the goods procure from other countries to India. www.cuidol.in Unit-1(MAP-607) 21 All right are reserved with CU-IDOL

22 1. Privatization ▪ When Government transfers the business ownership or rights to manage the public sector in the hands of private players is termed as ‘Privatization’. www.cuidol.in Unit-1(MAP-607) 22 All right are reserved with CU-IDOL

23 1. Deregulation ▪ The Industrial Development and Regulation Act (IDRA), 1951 has imposed strict restrictions on the Private Enterprises in forms of license, quota system, etc. The private players have never got proper opportunity to develop their business and as country, India suffered slow economic development and disorganized industry. Since, 1991 as per the New Economy Policy De-regulation was adopted as major economic reform. www.cuidol.in Unit-1(MAP-607) 23 All right are reserved with CU-IDOL

24 1. International trade regulations ▪ This regulation helps to administer the trade and business with foreign countries. ▪ It helps to build diplomatic relations with neighboring countries. It also provides motivation for improving industry competitiveness and innovation. www.cuidol.in Unit-1(MAP-607) 24 All right are reserved with CU-IDOL

25 ▪ Country gain global recognition in the international markets and during border unrest or war situations foreign trade buddies plays an important role. www.cuidol.in Unit-1(MAP-607) 25 All right are reserved with CU-IDOL

26 ▪ All countries have diverse resources and advantages so such trade is beneficial for whole World. Trade regulations helps to monitor such business activities which are carried out cross borders and maintain harmony. www.cuidol.in Unit-1(MAP-607) 26 All right are reserved with CU-IDOL

27 ▪ For formulating and implementing import – export policies, India has become member of International Trade Associated like WTO (World Trade Organization), the South Asian Association for Regional Cooperation (SAARC), etc. www.cuidol.in Unit-1(MAP-607) 27 All right are reserved with CU-IDOL

28 Constitutional Provisions Affecting Business www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL

29 ▪ CONSTITUTION OF INDIA ▪ Constitution means a set of fundamental principles, basic rules and established precedents (means standards/instances). It identifies, defines and regulates various aspects of the State and the structure, powers and functions of the major institutions under the three organs of the Government – the executive, the legislature and the judiciary. www.cuidol.in Unit-1(MAP-607) 29 All right are reserved with CU-IDOL

30 ▪ It also provides for rights and freedoms of citizens and spells out the relationships between individual citizen and the State and government. It is the supreme and ultimate authority. www.cuidol.in Unit-1(MAP-607) 30 All right are reserved with CU-IDOL

31 ▪ Any decision or action which is not in accordance with it will be unconstitutional and unlawful. A Constitution also lays down limits on the power of the government to avoid abuse of authority. www.cuidol.in Unit-1(MAP-607) 31 All right are reserved with CU-IDOL

32 ▪ Moreover, it is not a static but a living document, because it needs to be amended as and when required to keep it updated. ▪ Its flexibility enables it to change according to changing aspirations of the people, the needs of the time and the changes taking place in society. ▪ www.cuidol.in Unit-1(MAP-607) 32 All right are reserved with CU-IDOL

33 ▪ Fundamental Rights and Duties: You must be familiar with the term fundamental rights. We quite often find it in newspapers or while watching television. ▪ The Constitution of India includes these rights in a separate Chapter which has often been referred to as the ‘conscience’ of the Constitution. www.cuidol.in Unit-1(MAP-607) 33 All right are reserved with CU-IDOL

34 ▪ Fundamental Rights protect citizens against the arbitrary and absolute exercise of power by the State. The Constitution guarantees the rights to individuals against the State as well as against other individuals. 4. www.cuidol.in Unit-1(MAP-607) 34 All right are reserved with CU-IDOL

35 ▪ The Constitution also guarantees the rights of minorities against the majority. Besides these rights, the Constitution has provisions identifying fundamental duties, though these are not enforceable as the fundamental rights are. These duties reflect some of the basic values embodied in the Constitution. ▪ Unit-1(MAP-607) 35 www.cuidol.in All right are reserved with CU-IDOL

36 ▪ Directive Principles of State Policy: In addition to Fundamental Rights, the Constitution also has a section called Directive Principles of State Policy. It is a unique feature of the Constitution. www.cuidol.in Unit-1(MAP-607) 36 All right are reserved with CU-IDOL

37 ▪ It is aimed at ensuring greater social and economic reforms and serving as a guide to the State to institute laws and policies that help reduce the poverty of the masses and eliminate social discrimination. In fact, as you will study in the lesson on “India-A Welfare State”, these provisions are directed towards establishment of a welfare state. ▪ Unit-1(MAP-607) 37 www.cuidol.in All right are reserved with CU-IDOL

38 ▪ Right to Equality ▪ Right to equality is very important in a society like ours. The purpose of this right is to establish the rule of law where all the citizens should be treated equal before the law. It has five provisions (Articles 14-18) to provide for equality before law or for the protection of law to all the persons in India and also to prohibit discrimination on the grounds of religion, race, caste, sex or place of birth. www.cuidol.in Unit-1(MAP-607) 38 All right are reserved with CU-IDOL

39 ▪ (i) Equality before Law: The Constitution guarantees that all citizens will be equal before law. It means that everyone will be equally protected by the laws of the country. No person is above law. It means that if two persons commit the same crime, both of them will get the same punishment without any discrimination. www.cuidol.in Unit-1(MAP-607) 39 All right are reserved with CU-IDOL

40 ▪ (ii) No Discrimination on the basis of Religion, Race, Caste, Sex or Place of Birth: ▪ The State cannot discriminate against a citizen on the basis of religion, race, caste, sex or place of birth, as this is necessary to bring about social equality. ▪ Every citizen of India has equal access to shops, restaurants, and places of public entertainment or in the use of wells, tanks or roads without any discrimination. However, the State can make special provisions or concessions for women and children. www.cuidol.in Unit-1(MAP-607) 40 All right are reserved with CU-IDOL

41 ▪ (iii) Equality of Opportunity to all Citizens in matter of Public Employment: ▪ The State cannot discriminate against anyone in the matter of public employment. All citizens can apply and become employees of the State. Merits and qualifications will be the basis of employment. However, there are some exceptions to this right. There is a special provision for the reservation of posts for citizens belonging to Scheduled Castes, Scheduled Tribes and Other ▪ Backward Classes (OBCs) www.cuidol.in Unit-1(MAP-607) 41 All right are reserved with CU-IDOL

42 ▪ Right to Freedom ▪ You will agree that the freedom is the most cherished desire of every living being. Human beings definitely want and need freedom. You also want to have freedom. ▪ The Constitution of India provides Right to Freedom to all its citizens. This Right is stipulated under Articles 19-22. The following are the four categories of Rights to Freedom: www.cuidol.in Unit-1(MAP-607) 42 All right are reserved with CU-IDOL

43 I. Six Freedoms: ▪ Article 19 of the Constitution provides for the following six freedoms: ▪ (a) Freedom of speech and expression ▪ (b) Freedom to assemble peacefully and without arms www.cuidol.in Unit-1(MAP-607) 43 All right are reserved with CU-IDOL

44 ▪ (c) Freedom to form Associations and Unions ▪ (d) Freedom to move freely throughout the territory of India ▪ (e) Freedom to reside and settle in any part of India ▪ (f) Freedom to practice any profession or to carry on any occupation, trade or business www.cuidol.in Unit-1(MAP-607) 44 All right are reserved with CU-IDOL

45 THANK YOU www.cuidol.in Unit-1(MAP-607) All right are reserved with CU-IDOL