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POLITICALENVIRONMENT
By: Sayad Rashid
By: Sayad Rashid
Business PoliticalEnvironment
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Political Structure in India
The country attained freedom on 15 August
1947. The Constitution of the Republic came
into effect on 26 January 1950.
Free India's first Prime Minister, Pandit
Jawaharlal Nehru .
The Constitution was made flexible enough to
adjust to the demands of social and economicchanges within a democratic framework.
Adopting the path of democracy, the country
held its first general elections in 1952.By: Sayad RashidBusiness Political
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Parallel state structure
Formal political structure of thestates parallels that of the national
governmentNational state
President Governor
Prime Minister Chief Minister
Parliament Assembly
Supreme Court High CourtBy: Sayad RashidBusiness PoliticalEnvironment 3
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Political system and business
The political system prevailing in acountry decides, promotes, fosters,encourages, shelters, directs andcontrols the business activities ofthat country.
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Basic Political philosophiesTwo basic political philosophies
exist all over the world:
Democracy (refers to a politicalsystem in which the supreme power is inthe hands of the people. )
Totalitarianism(also calledauthoritarianism, refers to a politicalsystem in which individual freedom iscompletely subordinated to the authority
of the state.) By: Sayad RashidBusiness PoliticalEnvironment 5
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Basic Political philosophiesCont
Democracy comprises two types:oPure Democracy (Requires every
citizen to take part ingovernance.)
o
Republican (exists when leaders,elected by people, do the ruling.)
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Basic Political philosophies(Cont)Totalitarianism, in itself, is of four
types: o Theocratic (When the religious leadersof a country also act as political leaders.)
oSecular (When political leaders are guidedby military and bureaucratic power)
oRight-wing (private ownership isendorsed by government, market forces arealso allowed a free play, but politicalfreedoms are rarely granted)
oTribal (Exists when a political party thatBy: Sayad RashidBusiness PoliticalEnvironment 7
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THREE INSTITUTIONS
The political system underdemocratic dispensation comprisesthree vital institutions:
Legislature
Executive or Government
Judiciary
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THREE INSTITUTIONS (Continue)Legislature is the most powerful
institution vested with such powers like
policy making, law-making, budgetapproving, executive control and actingas a mirror of public opinion.
It decide such vital aspects as the type
of business activities the country shouldhave, who should have, who should ownthem, what should be their size ofoperations, what should happen to their
earnings and other related factors.By: Sayad RashidBusiness PoliticalEnvironment 9
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THREE INSTITUTIONS (Continue)
Parliamentary system ofgovernment
the executive authority is responsibleto the Parliament.
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THREE INSTITUTIONS (Continue)
Executive or Government the centreof political authority having the power
to govern those it serves.The founder of our constitution provided for
a federal set-up ,with powers being dividedbetween the national and the state
governments. The power of central andstate governments is described in thisconstitution.
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THREE INSTITUTIONS (Continue)
Business Responsibilities toGovernment:a) Tax Payment
b) Voluntary Programmes
c) Providing Information
d) Government Contracts
e) Government Services
f) Political ActivityBy: Sayad RashidBusiness Political
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THREE INSTITUTIONS (Continue) Government Responsibilities to
Business:
a) Establishment and Enforcement of Lawsb) Maintenance of Order
c) Money and Credit
d) Orderly Growth
e) Infrastructuref) Information
g) Assistance to small industries
h) Transfer of Technology
i) Government Competition
j) Inspection and LicencesBy: Sayad RashidBusiness PoliticalEnvironment 13
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THREE INSTITUTIONS (Continue)
Judiciary determines the manner inwhich the work of the executive has
been fulfilled. It sees to it that theexercise of executive authorityconforms to the general rules laid downby the legislature.
It also settles the relationship betweenprivate citizens, on the one hand, andbetween citizens and government onthe other.
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System of LawsThere are four basic legal systems
prevailing around the world:
Islamic law (derived from the interpretation of the holyQuran and is found in the countries where Muslims are inmajority.)
Socialist law (Comes from the Marxist socialistsystems and continues to influence regulations in formerand present communist countries.)
Common law (derived from English law and found incountries which are under British influence.)
Civil or Code law (is based on a detailed set of lawsthat make u a code.
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Judicial Powers
The judiciary in a country is influencedby the political system. The government
of a country defines the legalframework within which firms dobusiness and often the laws thatregulate business reflect the rulers
political ideology.The power of the judiciary are of the
dual type:
iii.The authority of the courts to settle legaldisputes; andBy: Sayad RashidBusiness Political
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Judicial Activism
In a real sense, judicial activism refersto the review power vested with the
courts and its scope varies with thewidth of power conferred on courts. Thescope is wider where the power of
judicial review extends not only over
executive action, as in the UK, but alsoother legislative action.
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CONSTITUTION
judiciary Executive legislature
CentralList
ConcurrentList
State List
CentralGovt.
State Govt. Local Govt.
udgetDirect
involvementin business
PoliciesGuidelines
Codeslaws
Development/promotional
Organization(e.g.: development banks
ExportsDevelopment authorities)
RegulatoryOrganizations(SEBI, TRAI)
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THE CONSTITUTION OF INDIA
The constitution of India is the most significantdocument which is fundamental to the
governance of the state. It is the product notof political revolution but of the research anddeliberations of a body of eminentrepresentatives of people who sought to
improve upon the then existing system.The historic Objectives Resolution which was
moved by Pandit Jawaharlal Nehru on 9December 1946 and which was subsequentlyadopted by the Constitution Assembly on 22
January 1947, inspired the shaping of theBy: Sayad RashidBusiness Political
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Parts of Constitution
The Indian Constitution has threeparts, viz:
The PreambleThe Fundamental Rights and
Fundamental Duties
The Directive Principles of theState Policy.
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THE PREAMBLE
The Preamble is an introduction to theConstitution and contains its basic philosophy.
The Preamble to the Indian Constitution statesthat
We the people of India having solemnlyresolved to constitute ourselves into aSovereign, Socialist, Secular, Democratic,Republic and to secure to all citizens: justice,
social, economic and political; Liberty ofthought, expression, belief, faith, and worship;Equality of status and opportunity; and topromote among them all fraternity assuringthe dignity of the individual and the unity andthe integrity of the Nation.By: Sayad RashidBusiness PoliticalEnvironment 21
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THE PREAMBLE (Key Words)
o Sovereign(With the writing of the constitution,India became Sovereign Republic like USA or the SwissRepublic.)
o
Socialist (Added to the Preamble by the 42nd
Amendment of the Constitution in 1976. Socialismimplies State ownership of tools of production with thebenefits to inure to the public. It also advocatesagrarian reforms, a strong public sector, control overprivate investment and wealth and national self-reliance.)
o Secular (Was inserted in the Preamble by the 42ndAmendment of the Constitution in 1976. The real spiritof secularism is to make religion purely a private affair
and to manage the affairs of the State free from anyreligious influence.)
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THE PREAMBLE (Key Words)
o Republic (Implies an elected head of State. Underthe republican form of Govt., on the other hand, thehead of State is always elected for a fixed term. Ours is
a Republican form of Govt. and for every 5 year period,we elect our President who is head of State.)
o Liberty (Signifies the absence of any arbitraryrestraint on the freedom of individual action and thecreation of conditions conducive to the fullest
development of the personality of the individual.)
o Fraternity (Demands the spirit of brotherhood. Thisspirit is essential in our society known for its diversity.)
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THE FUNDAMENTAL RIGHTS
The Fundamental rights are defined asthe basic human rights of all citizens.
These rights, defined in Part III of theConstitution, apply irrespective of race,
place of birth, religion , caste , creed orgender. They are enforceable by thecourts, subject to specific restrictions.
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THE FUNDAMENTAL RIGHTS
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THE FUNDAMENTAL DUTIES
According to the 42nd Amendment passed in 1976 aset of Ten Fundamental Duties of citizens was includedin the Constitution of India. They are :
2. To abide by the Constitution and respect the ideals andInstitutions.
3. To respect National Flag and National Anthem.
4. To realise and follow the essential ideals of Non-violence, Democracy and Secularism.5. It is the duty of every citizen to preserve the rich
heritage of our Culture.6. To protect the Sovereignty, Unity and Integrity of our
Nation.7. To safeguard public property.8. To defend our Country even at the cost of our life.9. To protect Natural Resources.10.To avoid Dowry, Gambling and other Social evils.11.To strive towards excellence in their respectiveBy: Sayad RashidBusiness PoliticalEnvironment 26
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DIRECTIVE PRINCIPLES OF STATE POLICY
The Directive Principles of State Policy
(sometimes called national objectives),embodied in Part IV of the constitution, are aunique feature of our Constitution. TheDirective Principles are the directives to the
various governments and govt. agencies andare fundamental in the governance of thecountry.
There are 17 Directive Principles and they may
be classified, for convenience, under fourheads viz; Provisions dealing with Welfare (Art. 38, 42, 45,
47).
Provisions dealing with Social Justice (Art. 39, 41,
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DIRECTIVE PRINCIPLES OF STATE POLICY
Article 38(1) lays down that the State shall promote the
welfare of the people by securing a social order in whichjustice- social, economic and political- shall inform all theinstitutions of national life.
Article 38(2) lays down that the State shall strive tominimise the inequalities in income, and eliminate
inequalities in status, facilities and opportunities, not onlyamong individuals but also among groups of people.
Article 39 emphasizes that the State shall direct its policytowards securing: (a) adequate means of livelihood to allcitizens; (b) a proper distribution of the material resourcesof the community to the common good; (c) the preventionof concentration of wealth to the common detriment; (d)equal pay for equal work for both men and women; (e) theprotection of strength and health of workers and avoiding
circumstances which force citizens to enter avocationsunsuited to their a e or stren th; and (f) the rotection ofBy: Sayad RashidBusiness Political
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Article 41 lays down that the State shall within the limits of
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Article 41 lays down that the State shall, within the limits ofits economic capacity and development, make provisions forsecuring the right to work, to education and to publicassistance in cases of unemployment, old age, sickness and
disablement. Article 42 states that the State shall make provision for
securing just and humane conditions of work and formaternity relief.
Article 43 emphasis the necessity of an adequate or livingwage in all sectors of economic activity. The Article enjoinsthat healthy conditions of work should be provided and adecent standard of living should be provided.
Article 43(A) states that the State shall take steps to secure
the participation of workers in the management ofundertakings, establishments or other organisationsengaged in any industry.
Article 46, The state shall promote with special care theeducational and economic interests of the weaker sections of
the people, and, in particular, of the scheduled castes andBy: Sayad RashidBusiness PoliticalEnvironment 29
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Distinction between Fundamental Rights
and Directive Principles
Fundamental Rights Directive Principles
Even the Government cannot takeaway or abridge these rights.
These rights are negative i.e.,contain donts.
These are enforceable in lawcourts.
The Government cannot takepolicy decisions on these rights.
These rights strengthen politicaldemocracy.
These are natural rights.
These right are justifiable.
These are mere instructionsto the Government.
These are positive andcontain dos.
These are not enforceable inany court.
The Government has powersto make policy decisions onthese principles
The implementation of theseprinciples ensures social andeconomic democracy.
These lead to protect humanrights.
These rights are notjustifiable.By: Sayad RashidBusiness Political
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Separation of power
The separation of powers contemplates the idea thatthe governmental functions must be based on atripartite division of legislature, executive and
judiciary.
Each organ should be separate, distinct andsovereign in its own allocated sphere and it shouldnot exercise the functions assigned to another.
They should function with in the spheres allotted tothem. No authority created under the Constitution issupreme; the Constitution is supreme and all theauthorities function under the supreme law of the
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Division of power
Indians Constitution distributes the itemsfor legislation among 3 lists: -
Union List (Union has exclusive power to
make laws on all matters in the Union list.) State List (state has exclusive powers to
make laws in the State List. Except for theUnion Territories, the centre cannot normallylegislate on any matter included in the State
List.) Concurrent List (both the Union and the
State can legislate on matters in theconcurrent List.)
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Thank U
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