Indian Government Policies

INDIAN GOVERNMENT POLICIES 1
Indian government policies
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INDIAN GOVERNMENT POLICIES 2
The government is responsible for enacting policies that guide how business is conducted in the
country. The policies may encourage or discourage foreign investment such as investment by
multinational companies.in the past ten years, the Indian government has enacted policies that
have had an impact on many multinational companies operating in the country. The made
policies affect the relationship between the government and the multinational companies and a
lot of care should be taken so as not to negatively affect the economy of the country (Kothari, et
al.2013, p.286). Multinational companies are after making huge profits and if there are no
policies to regulate their operations, the company may exploit the economy of India as they may
use cheap labor or even child labor with poor working conditions to minimize costs and
maximize profit (Edwards, et al.2013, pp.547-587). The MNCs should bring benefits to the host
nation to establish strong connections for the continued support from the government such as
paying taxes and other obligations that help the government to raise revenue for supporting the
budget.
There various policies that have been put in place to manage the operations of MNCs in India
and they include regulatory reforms where the government of India has embarked on trying to
minimize the time taken for one to incorporate a company. This reform was initiated in 2014 to
ensure that starting a business was easier and this attracted MNCs in the country as the activities
of the company would commence in the shortest time possible. This move has seen the country
become the host of many international companies and this creates job opportunities for many
Indians. This strategy leads to improved standards of living as the employed Indians are able to
gain income.
The high taxation policies which have been enacted in the country have also scared away many
international companies and the existing ones are looking for an exit strategy to avoid the high
tax burden imposed by the Indian government. This policy will enable the economic
development of the local companies as they are given a chance to thrive and be able to compete
with giant companies (Singh, 2017, p.477). The 40% tax imposed on some goods such as coca-
cola is quite high and the company was forced to shut down some of its plants due to the high tax
proposed by the government and this affects the economic impact of the company as the
spending power has been affected by the high taxes.