Explain the Government policies towards joint ventures.
A group of business entities formed jointly under the ownership and management of public and private is called a joint venture. The joint venture is the result of India’s mixed economy. Government policies for joint ventures are:
1. Permission:
Permission from the Central Government is required to set up a joint venture.
2. Priority of government policies:
It is necessary to build joint ventures in line with the socio-economic policy of the government.
3. Capital Investment:
Public and private capital can be semi-invested in a joint venture. In other words, 50 percent of the total capital can be invested by the government and the remaining 50 percent by the private sector. Again, 50 percent of the total capital can be invested by the government, 25 percent by the private sector, and the remaining 25 percent can be raised from the public.
4. Management and control:
The joint venture combines government oversight with improved management skills in the private sector. The day-to-day management is usually in the hands of a private partner but is controlled and supervised by a board of directors. The government will nominate a special few members of the board of directors.
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