- February 5, 2020
- Posted by: target
- Category: Blogs
All Business Owners Need to Have a Sound Understanding of the Government Policies
We need to understand the government policies and know the steps required to make necessary changes related to taxes, business costs, avail privileges and subsidies and watch on the liabilities.
There are mainly three types of Economic policies formed by the government
- Fiscal policy: It is about the revenue collection that government plans through taxation and makes changes in taxation slabs which affect the spending and saving capacity of citizens, impacting the income distribution and in general, the overall level of economic activities.
- Monetary policy: It takes care of the money supply by revising the interest rate which influences the degree of inflation as well as the total money supply in the market available for spending or short-term borrowing.
- Supply-side policy: These policies attempt to increase the production capacity of the economy.
The government uses the money collected from the public and business entities in the welfare of people; in areas like education, healthcare, military services and more.
In addition to these policies, there are a few more that will directly or indirectly affect the strategies and internal policy formation of a business. Those are as follows:
Public policies are mainly meant for public administration. It is important to learn about these policies as they describe broadly the laws, rules and regulations, the court decisions as well as the local ordinances which affect our lives.
It is a commercial policy for international trade including imports and exports. It is meant to promote exports and regulate imports.
The lobby tries to influence the government’s decision for the benefit of people with particular interests. Individuals, Associations, NGO’s, or groups of people who make attempts to challenge the decisions of government are known as lobbying. Such individuals approach the legislators and other government officials, bribe them for their personal benefits, corrupting the law using socioeconomic power.
The government keeps on launching new schemes and introducing new policies for the betterment of the nation as well as the commerce industry. A smart businessman always keeps himself updated with the latest government policies for smarter business decisions.