Current Indian Business Environment
According to the latest FICCI Survey on Current State of Economy, business confidence has hit a new low with as many as 77 per cent of the respondents to the survey feeling that the current business environment in India is not favourable for capacity expansion.
A pall of gloom has enveloped India as the economy continues to be buffeted by negative global cues, flagging industrial and export growth coupled with sluggish investment sentiment.
The findings of the survey were unveiled by the FICCI President, Naina Lal Kidwai, while addressing a press conference. The survey reveals that investing outside India by Indian industry is easier and better than undertaking investments within the domestic economy. A whopping 62 per cent of the respondent companies share this perception.
Further, 90 per cent of the respondents believe that a cut in the interest rates is essential to give an impetus to investments. A similar sentiment was shared by the respondents of the recently released FICCI’s Economic Outlook Survey.
The FICCI Survey conducted on the eve the Union Budget FY14 elicited responses over the past one week from diverse sectors serviced by FICCI such as manufacturing, agriculture, health and education, chemical and chemical products, energy and power and medical devices, representing almost 60 per cent of FICCI’s Committees.
The key expectations of responding companies from the forthcoming budget are roll out the Goods and Services Tax at the earliest; giving a booster shot to infrastructure sector and capital spending; supporting manufacturing growth through incentives and providing for suitable fund allocation to the export sector; moving ahead on the path of fiscal consolidation through rationalizing subsides and bringing about some stability in direct and indirect tax (cut in excise and customs) structure; focus on the Agriculture and Rural sector and removing supply side bottlenecks in agriculture value chain; increase outlay to social sectors like health and education to take forward social inclusion agenda.
The survey reveals that the main impediments affecting business performance that cry out for urgent attention are land acquisition, power supply, contract labour and unavailability of skilled labour , regulatory uncertainty and constant intervention, excessive litigation, delay in getting environment clearances, lack of clarity and stability in taxation policies, weak demand and high cost of inputs.
Definitions of Business Environment:
Business Environment has been defined by Bayard O. Wheeler as “the total of all things external to firms and industries which affect their organization and operation”. •
According to Arthur M. Weimer, business environment encompasses the ‘climate’ or set of conditions, economic, social, political or institutional in which business operations are conducted. Concept of Business Environment
A business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external forces. External forces may be related to national level, regional level or international level. These environmental forces provide opportunities or threats to the business community. Every business organization tries to grasp the available opportunities and face the threats that emerge from the business environment. Business organizations cannot change the external environment but they just react. They change their internal business components (internal environment) to grasp the external opportunities and face the external environmental threats. It is, therefore, very important to analyze business environment to survive and to get success for a business in its industry. It is, therefore, a vital role of managers to analyze business environment so that they could pursue effective business strategy....
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