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TOPIC

POLITICAL AND GOVERNMENTENVIRONMENT

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Institutions of Democracy

1. Legislative:- Policy making, low making, budget approving, executive

control, and a mirror of public opinion

2. Executive or Government:

- A centric political authority having the power to governthose it serves

- State and Central

3. Judiciary:

- Determines the manner which the work of Executive hasbeen fulfilled. It conforms the general rules laid down by the

legislatures

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ECONOMIC ROLES OF THE

GOVERNMENT

Basic Functions

Intermediate Functions

Activist Functions

Regulatory Role

Entrepreneurial Role

Planning Role

Promotional Roles

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Functions of Government

Basic Functions

- Provisions of

property rights- Macro economic

stability

- Protection of health

- Water availability

- Transportation and

communication

Intermediate

Functions

- Regulation ofmonopolies

- Provision of social

insurance

- Pensions,

unemployment

benefits

Activist Functions

-Use of various

measures to stabilizeand promote markets

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Economic Roles of Govt.

Regulatory Role:F

ormation of regulations for industry andbusiness for entry, conduct and exit.

Entrepreneurial Role: Direct participation of Govt. And

freedom and opportunities given to private entrepreneurship

Planning Role: Proper utilization of scarce resources and

prioritization of development objectives.

Promotional Role: Promotion of industry and commerce,

trade, infrastructure etc.

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Providing a pure public goods and Public Health

Defense

Law and Orders

Property RightsMacroeconomic Management

Protecting the poor

Antipoverty

Programmes,

Disaster relief

Addressing

externalities

Basic

EducationEnvironmenta

l Protection

Regulating

Monopoly

Utility

RegulationAntitrust

Policy

Overcoming Imperfect

Information

Insurance (Health, Life,

pension )

Financial Regulation,

Consumer Protection

Providing Social

Insurance

Redistributive

Pensions

Family Allowances

Unemployment Ins.

Coordinating Private Activity

Fostering Markets

Cluster Initiatives

Redistribution

Asset

Redistribution

Addressing

Market Failure

Improving

Equity

Minimal

Functions

Inter-

mediate

Functions

Activist

Functions

FUNCTIONS OF THE STATE

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Business and Government

Contracts

Laws & Orders

Voluntary Programs

Information

Political Activity

Government Services

B

U

S

I

N

E

S

S

B

U

S

I

N

E

S

S

G

O

V

E

R

N

M

E

NT

Taxes

Inception & Licenses

Money & Credit

Competition

Tariffand Quotas

SmallBusiness

Technology

Information

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Reasons for state intervention

Sponsor to the economic development

Planned economy

What people need only be understood and provided by

the state State participation to provide strong base for future

development

To correct the market failure

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Thank you