BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, Pilani

Pilani Campus
AUGS/ AGSR Division

FIRST SEMESTER 2023-24

COURSE HANDOUT
Date: 10.08.2023

In addition to part I (General Handout for all courses appended to the Time table), this portion gives further
specific details regarding the course.
Course No : ECON F214
Course Title : ECONOMIC ENVIRONMENT OF BUSINESS
Instructor-in-Charge : DR. BALAKRUSHNA PADHI
Tutorial/Practical Instructor: Ishawar Choudhary (RS)

1. Course Description:

Business drives a nation's economic life; they provide the means by which its citizens achieve a better standard
of living. It is essential to understand that a business firm does not operate in a vacuum but in a given
environment and has to interact and transact its business within this environment. Business environment refers
to the totality of all individuals, institutions, and other forces external to a business unit but potentially
affecting its performance. Business enterprises are micro units within an economic environment that
represents the macro. The economic environment is essentially the “given” within which firms and their
managements must operate. So, the business environment and the manner and effectiveness of the interaction
of an enterprise with its environment would generally determine its success or failure. The objective of this
course is to unravel all those economic factors which are external to and beyond the control of individual
business enterprises and their management, with a particular focus on the Indian context.

2. Scope and Objective of the Course:

The course aims to (1) Create familiarity with economic environment concepts and indicators, economic
policies, and economic regulation (2) Develop the ability to analyze and anticipate changes in the economic
environment and, (3) Enable students to take more effective business decisions by being responsive to the
changing external economic environment.

3. Text Books:

1. Pailwar, Veena Keshav., “Business Environment”, PHI Learning Private Limited (2014).

4. Reference Books:

1. Shaikh, Saleem., “Business Environment”, Pearson Publishers (India), 4th Edition (2020).
2. Paul, Justin., “Business Environment: Text and Cases”, Tata McGraw Hill, New Delhi, 3rd Edition
(2010).
3. Fernando, A.C., “Business Environment”, Pearson Publishers (India) (2011).

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 BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, Pilani
Pilani Campus
AUGS/ AGSR Division

5. Course Plan:
Module No. No. of Lecture Session Reference Learning outcomes
Lect. (Topics)
Understanding Course introduction; Understanding the
of the concept Introducing the concept of Business Environment and its
of Business concept of the components; Constituents of Macro and
L. Ch. 1, R1.
Environment Economic Micro business environment;
1-3 Ch.1
Environment of Understanding the economic system and
Business economic structure; Ease of Doing
Business analysis
Analysis and Calculation of
measurement various growth Concept of Level Value and Various
of National L. rates and their Types of Growth Rates: PoP, AG, YoY,
Notes
Income, 4-5 implications for and AAG for the evaluation of business
Business cycle, the Business performance
& Economic Environment
Structure & National income: Economic system and
computation of National Income: generation of output and income;
Ch.5, R1.
growth rates L. Measurement and measurement of GDP in India; Different
Ch. 7 and
and their 6-9 Environment concepts of national income and their
notes
implications for Scanning equivalence; Implications of National
the Business Income for Business Environment
Environment Factors leading to Business Fluctuations
and Cycles, Approaches to Business
L. Business Cycles Cycle Analysis, Identification of the
Ch. 4
10-12 and Fluctuations business cycle using economic indicators,
Insinuations of the business cycle on
Business Managers
Economic Structure: Its Determinants,
Economic
Constituents and Structural Shifts in
L. Structure and
Ch. 3 India; Analyzing the economic structure
13-14 Stages of
and its implications for Business
Development
Managers
Demography and its characteristics;
Demographic
Determinants of Demography; Uses of
L. 15 Environment of Ch. 17
Demographic Profile by Business
Business
Organizations
Concept and Measurement of Inflation; Measures,
Measurement Inflation and Causes, Types and Calculation of
L. Ch.7,
of Inflation in Business inflation in India; Effect and control of
16-18 R1.Ch. 10
India Environment inflation; Implication of inflation on
Business Environment
Analysis & Objectives of fiscal policy; India's Fiscal
Implications of India's Fiscal Policy and its Various Techniques, and
L. Ch.8, 10,
the Fiscal Policy and its instruments of fiscal policy;
19-22 R1. Ch. 4
Policy, Environment Understanding the concept of budget;
Monetary Measurement of Government deficit;

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 BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, Pilani
Pilani Campus
AUGS/ AGSR Division

Policy & Institutional reforms for fiscal

Industrial consolidation; Fiscal policy implication
Policy for the on Business Environment
Business Objectives of Monetary Policy: Measures
Environment of the Money Stock in India, Instruments
of monetary policy; Monetary policy-
L. India’s Monetary Ch.8, 10, making process and dissemination in
23-25 Policy R1. Ch. 4 India; Monetary policy transmission
mechanism; Changing the structure and
evolving monetary transmission
mechanism in India
Industry: Classification and identification
of Industry, Factors Affecting Location
Industrial Ch. 11 &
of Industries; Industrial Policy and its
L. Structure, Policy, notes,
performance in the pre and post-
26-28 and Business R1.Ch. 2,
liberalization period in India;
Environment 3, 8
Implications of Industrial policy for
Business Managers
Economic Liberalization and Policy
L. Three Decades of R1. 18,
Changes, India’s Economic Reforms:
29-30 LPG Policy 20, Notes
Achievements and Next Steps
Analysis of the Meaning of BOP-Accounting of foreign
Foreign Trade
International transactions; Constituents of Balance of
L. Policy and Ch. 12,
Business Payment Statement; Implications of
31-33 Balance of R1. Ch. 9
Environment Current Account Deficit; The Role of
Payments (BOP)
India’s Foreign Trade Policy
Foreign Exchange market and exchange
rate; Do movements in exchange rates
Exchange rate
affect the Indian Economy; Bretton
L. regimes and
R1.Ch.15 Woods system and exchange rate
34-35 Currency
analysis; Currency convertibility;
Convertibility
Implications of exchange rate analysis for
Business Managers
India's Export-
L. R1.Ch. 23 India's Trade Environment and Related
Import Policies,
36-37 and 24 Issues
SEZs in India
International
Business International Organizations; GATT,
L. R1.Ch. 25
Organization, GATS, IMF, World Bank, WTO, ADB,
38-39 and 26
World Trade UNCTAD, and Business Environment
Organization
Understanding the
concept of Basic understanding of the externality
Class
L.40 Externality and concept and its linkages to the Business
notes
Business Environment.
Environment

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 BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, Pilani
Pilani Campus
AUGS/ AGSR Division

6. Evaluation Scheme:
Component Duration Weightage Date Nature of component
(%-200 Marks ) (Closed Book/Open
Book)
Quiz-1 30 Min 10 Will be announced CB
Mid-Semester 1.5 H 30 13-10-2023 CB
Examination
Quiz-2 30 Min 10 Will be announced CB
Quiz-3 30 Min 10 Will be announced CB
Comprehensive Examination 3H 37.5 18-12-2023 CB/OB
Other evaluative components 12.5 30-11-2023
(Assignments/Presentation)
(#Best of two quizzes out of three would be considered for final evaluation. All quizzes will be announced.)

7. Makeup Policy: Makeup for the Mid-Sem and Comprehensive examinations shall be granted only in
genuine cases (such as hospitalization) after a thorough examination of the application. The conduct of make-
up is to be decided by the instructor-In-Charge/instructors only. No make-up shall be granted for the tutorial
tests; out of three tutorial tests, the best 2 will be considered for the final evaluation.

8. Consultation Hour:
Students can approach to the Instructor In-Charge any time via email ([email protected]
). Their queries will be answered through email/online meetings/offline/phone calls as per the level of the
query. Consultation hours: Tuesday, 04.00 PM-5.00 PM (Chamber no-6165O)

9. Notices: For course-related announcements, Students must regularly check their BITS e-mail
account/Nalanda for course-related announcements/notices. All the information will also be communicated
during the class. Notices, if any, will be displayed on the Economics and Finance Group Notice Board.

10. Note
Evaluative components will be conducted during scheduled hours as specified. Changes, if any, will be
communicated well in advance. Please note your ID number and name before requesting anything related to
the course. Students must write correct ID numbers, in all the evaluative components, failing which their
answer sheets will not be evaluated.

Dr. Balakrushna Padhi

Instructor-in-charge
ECON F214