What economic changes were initiated by | Class 12 Business Studies Chapter Business Environment, Business Environment NCERT Solutions

Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Business Environment. This page offers a step-by-step solution to the specific question from Exercise 3, Question 5: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.

Question 5:

What economic changes were initiated by the Government under the Industrial Policy, 1991? What impact have these changes made on business and industry?

Answer:

The government of India announced a new industrial policy in july1991. Highlights of the policy are as follow:

1. The Government reduced the number of industries under compulsory licensing to six and that industries are liquor, cigarette, defence equipment, dangerous chemicals, industrial explosives, and drugs and pharmaceuticals.
2. It provided a greater role to the private sector and reduced the role of the public sector. The role of the public sector was limited to only industries of strategic importance.
3. Disinvestment was carried out in case of many public sector industrial enterprises.
4. Policy towards foreign capital was liberalized. The share of foreign equity participation was increased and in many activities 100 percent foreign direct investment (FDI) was permitted.
5. Automatic permission was now granted for technology agreements with foreign companies.
6. Foreign investment promotion board (FIPB) was set up to promote and channelize foreign investment in India.

The impact have these changes made on business and industry are:

1. Increasing competition: Changes in the rules of industrial licensing and entry of foreign firms, has increased the competition for Indian firms especially in service industries such as banking, communication, health, etc.

2. More demanding customers: Due to increase in competition, wider choices of products are available in the market. As a result, customers are becoming more chossy.

3. Rapidly changing technological Environment: The increased competition in the market forces the firms to develop new ways to survive and grow in the market. And due to this the small firms’ faces face tough challenges for transformations in processes, technology, machines and products.

4. Necessity for change: Frequent changes in the market, forces the enterprises to continuously modify their operations.

5. Need for developing human resources: The new market conditions need people with required skills and greater commitment. So, the need for developing human resources is increasing.

6. Market orientation: Earlier firms were production oriented; they produce first and then sell goods in the market. But now in the changing world production oriented technique is changed to market oriented where firms study and analyse the market first and produce goods accordingly.

7. Loss of budgetary support to the public sector: The budgetary support for financing the public sector has declined over the years. So the public sector undertakings have to realize that in order to survive, they will have to develop their own resources and be more efficient.

Other Questions of Chapter Business Environment

Why is understanding the business environment crucial for managers?

Explain the following terms:
a. Liberalisation
b. Privatization
c. Globalisation

The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India after the announcement.

This step resulted in a substantial increase in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.

a. Enumerate the dimensions of the business environment highlighted above.
b. State the features of Demonetization.

What is the impact of legal changes on the business environment?

Explain, with examples, the various dimensions of the business environment.

What is the meaning of 'Business Environment'?

National Digital Library of India (NDL India) is a pilot project initiated by the HRD ministry. It works towards developing a framework of virtual repository of learning resources with a single-window search facility. It provides support to all academic levels including researchers, life-long learners and differently-abled learners free of cost. State the dimensions of business environment highlighted above.

State the impact of demonetization on interest rates, private wealth and real estate.

Discuss the impact of globalization on the business environment.

Explain the significance of technological advancements in shaping the business environment.

Popular questions of class 12 Business Studies

What are the steps taken by management in the planning process?

Why is management considered to be a multi-dimensional concept?

Explain the procedure for selection of employees.

Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure a cost saving of Rs 12, 00,000 per year. Name the objectives of management achieved by Indian Railways in the above case.

Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.

Define scientific management. State any three of its principles.

Explain the qualities of a good leader? Do the qualities alone ensure leadership success?

Management is a series of continuous interrelated functions. Comment.

Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Suggest whether issue of debenture would be considered a rational decision by the company. Give reason to justify your answer. (Ans. No, Cost of Debt (10%) is more than ROI which is 8%).

Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume jewellery. The firm secured an urgent order for 1,000 bracelets that were to be delivered within 4 days. They were assigned the responsibility of producing 500 bracelets each at a cost of Rs 100 per bracelet. Ashita was able to produce the required number within the stipulated time at the cost of Rs 55,000 whereas, Lakshita was able to produce only 450 units at a cost of Rs 90 per unit. State whether Ashita and Lakshita are efficient and effective. Give reasons to justify your answer.

Recently Viewed Questions of Class 12 Business Studies

What is the role of NGOs in Consumer Protection?

Discuss the role of SEBI in regulating the financial markets in India.

What is the role of the Central Consumer Protection Authority (CCPA)?

A company manufacturing sewing machines set up in 1945 by the British promoters follows formal organisation culture in totality. It is facing lot of problems in delays in decision making. As the result it is not able to adapt to changing business environment. The work force is also not motivated since they cannot vent their grievances except through formal channels, which involve red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment. You are to advise the company with regard to change it should bring about in its organisation structure to overcome the problems faced by it. Give reasons in terms of benefits it will derive from the changes suggested by you.

State the different networks of grapevine communications.

Kaul Consultants have launched www.naukaripao.com exclusively for senior management professionals. The portal lists out senior level jobs and ensures that the job is genuine through rigorous screening process.

a. State the source of recruitment highlighted in the case above.
b. State four benefits of the above identified source of recruitment.

Why are rules considered to be plans?

Can a large sized organisation be totally centralised of decentralised? Give your opinion.

Explain how management is both an art and a science.

What is the meaning of organizing in management?

Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

Read the question carefully and focus on the core concept being asked.
Reference examples and data from the chapter when answering questions about Business Environment.
Review previous year question papers to get an idea of how such questions may be framed in exams.
Practice answering questions within the time limit to improve your speed and accuracy.
Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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