Page 81 - DMGT401Business Environment

Business Environment

Notes Industrial licensing is governed by Industries (Development and Regulation) Act, 1951. It
is a very effective tool used by the government to regulate the private sector. Over the
years it has become a tool for exploitation. The NIP did away with licensing in a big
manner.
The New Industrial Policy was a new experience for India. On the one hand it provided a
conducive environment to the industry, allowing it to spread it wings and on the other
hand, it opened the doors for MNCs and sent a clear message to Indian firms to either
perform or perish.
The emergence of Capital Markets can be traced back to the second half of the eighteenth
century when the transactions were limited to loan stock transactions of the East India
Company.
Under the SCR Act, an exchange is defined as any body of individuals, whether incorporated
or not, constituted for the purpose of assisting, regulating or controlling the business of
buying, selling or dealing in securities.

The Bombay Stock Exchange is one of the oldest stock exchanges of India and Asia and it
is also one of the biggest stock exchanges of the world. It is said to be the nerve of the
Indian economy which reveals the health of economy.
The NSE was incorporated in November 1992 with an equity capital of 25 crores. It is
sponsored by IDBI and co-sponsored by other term-lending institutions, LIC, GIC, other
insurance companies, banks and financial institutions.
The OTCEI is primarily meant for small sized companies and small investors. This exchange
has the advantages of transparency, fast settlements and potential to reach the nooks and
corners of the country.
The Securities and Exchange Board Act of 1992 provides for the establishment of a board to
protect the interest of investors and to promote the development and regulation of the
securities market.

Underwriters make a commitment to get the underwritten issue subscribed either by
others or by themselves. They agree to take unsubscribed portions of the issue. They
render this service for a commission agreed upon between the issuing company and the
underwriter subject to the ceiling under the Companies Act.
The ongoing reforms in India are referred to as economic liberalisation of India.

Privatisation is the process of involving the private sector in the ownership or operation
of a state-owned or public sector undertaking. In a broader sense, it connotes private
ownership (or even without change of ownership) the induction of private control and
management in the PSUs.
The formation of systems of interaction between the global and the local has been a
central driving force in world history and has led to the phenomenon called globalisation.

2.7 Keywords

Bear: A seller of securities
BIFR: Board of Industrial and Financial Reconstruction

Bull: A buyer in the stock market
District Industries Centres: Centres for the development of small scale and cottage industries

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