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GOVERNMENT INTERVENTION & PRICING

GOVERNMENT INTERVENTION & PRICING

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GOVERNMENT INTERVENTION & PRICING

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  1. GOVERNMENT INTERVENTION & PRICING

  2. Introduction • Govt. in most countries today play an important role in product pricing. • Indian Government like most other government is itself an entrepreneur • Engaged in production of many goods & services • Govt. has from time to time introduced price control for certain commodities.

  3. TYPES OF GOVT INTERVENTION GOVERNMENT INTERVENTION DIRECT INDIRECT SUBSIDIES PRICE PEGGING PRICE FLOOR/ CEILING TAXES SALES PROFIT REALESTATE ALL OUTPUT PARTIAL OUTPUT

  4. DIRECT • DIRECT – Govt by being the monopoly or as controlling authority controls price directly.Railway, postal, Telegraph network, telephone company, road transport, nationalized banks etc (All output) • Price Pegging – Major drugs, cement, fertilizer, sugar, coal, college & school fees. • Dual Pricing – Fixed part of a total amount for government. Ex: Some educational inst., Cements.

  5. INDIRECT • Govt. controls the prices for various kinds of commodity through taxes, tax on profit, excess duties, tax on real estate, subsidies. • A large number of commodities fall under one or more kinds of taxes & also subsidies are available for production of some goods if they are manufactured in backward areas.

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