Top 6 Pricing Policies 

➤ 1. Penetration Pricing

Definition: A low price is set for a new product to quickly attract buyers and gain market share.

Example: Jio launched with free data and very cheap plans.

➤ 2. Skimming Pricing

Definition: A high price is charged first, especially for new or unique products, and lowered later.

Example: New smartphones or TVs often launch at high prices and drop later.

➤ 3. Psychological Pricing

Definition: Setting prices like ₹99 or ₹199 to make the customer feel it’s cheaper.

Example: A product priced at ₹99 instead of ₹100.

➤ 4. Bundle Pricing

Definition: Offering multiple products together at a lower price than if bought separately.

Example: Combo meals in restaurants or software packages.

➤ 5. Competitive Pricing

Definition: Prices are set based on what competitors are charging.

Example: Cola companies like Pepsi and Coca-Cola keep prices similar.

➤ 6. Cost-Plus Pricing

Definition: Final price = Cost of production + a fixed profit.

Example: If cost is ₹100 and profit margin is ₹20 → price = ₹120.

✅ Introduction

To boost India’s economic growth and create employment opportunities, the Government of India launched two major initiatives: Make in India and Start-up India. These flagship schemes aim to transform India into a manufacturing hub and promote a culture of entrepreneurship.

🏭 What is Make in India?

Launched: 25th September 2014

Launched by: Prime Minister Narendra Modi

🎯 Objective:

To encourage companies to manufacture their products in India and boost domestic manufacturing and exports.

📌 Key Features:

• Identified 25 priority sectors (like Automobiles, Electronics, Textiles, Aviation, etc.)

• Ease of Doing Business reforms (single-window clearance, fewer regulations)

• 100% FDI (Foreign Direct Investment) in many sectors

• Skill development and job creation

💡 Example:

Mobile companies like Samsung and Apple started assembling their devices in India.

🚀 What is Start-up India?

Launched: 16th January 2016

Launched by: PM Narendra Modi at Vigyan Bhawan, New Delhi

🎯 Objective:

To promote entrepreneurship, innovation, and help start-ups grow in India.

📌 Key Features:

• Start-up recognition portal launched (via DPIIT)

• Tax exemption for 3 years

• Easy company registration

• Funding support via ₹10,000 crore Fund of Funds

• Incubation centers in colleges and universities

💡 Example:

Indian unicorns like Zomato, BYJU’S, OYO, Nykaa, and Paytm are beneficiaries of this ecosystem.

🔍 Differences between Make in India and Start-up India

📈 Importance for India’s Economy

• ✅ Boosts employment

• ✅ Reduces import dependency

• ✅ Increases exports

• ✅ Fosters innovation

• ✅ Enhances India’s global competitiveness

🌍 Real-World Impact

• Make in India helped India become the 2nd largest mobile manufacturer.

• Start-up India made India the 3rd largest start-up ecosystem in the world.

📝 Conclusion

Both Make in India and Start-up India are visionary initiatives that aim to transform India into a self-reliant and innovation-driven economy. Together, they support the goals of economic development, job creation, and Atmanirbhar Bharat (Self-reliant India).

🔖 Keywords for SEO: Make in India, Start-up India, Government Initiatives for Entrepreneurs, BBA Notes, Lucknow University, Economic Development Schemes, Indian Start-ups, Modi Government Schemes

What is Foreign Direct Investment (FDI)?

FDI refers to a long-term investment made by an individual, company, or government from one country into a business or project in another country, aiming for significant influence or control.

🔑 Key Points:

• Involves ownership/control (often 10% or more).

• Not the same as just buying shares (that’s portfolio investment).

• Helps with economic integration between countries.

📈 FDI Includes:

• Capital investment.

• Transfer of technology, management, and equipment.

• Building subsidiaries, acquisitions, joint ventures.

📊 Why FDI Happens

• Countries with skilled labor, growth potential, and light regulations attract FDI.

• Investors aim for market access, raw materials, or global presence.

📉 Global Trends

• Global FDI fell during COVID-19 (2020): $859 billion vs $1.5 trillion (2019).

• Bounced back 88% in 2021.

• In 2020, China overtook the U.S. in total FDI received.

📘 Types of FDI

🌏 Examples

• Nvidia–ARM Deal: Blocked due to competition concerns.

• India: Allows 100% FDI in single-brand retail.

• China: FDI focuses on high-tech and services.

🏢 What are MNCs?

Multinational Corporations are companies that operate in more than one country.

Features:

• Own/Control production in multiple countries.

• Use FDI to expand abroad.

• Examples: Apple, Toyota, Coca-Cola.

🔁 FDI & MNCs – The Link

• MNCs use FDI to expand globally.

• FDI is the main tool through which MNCs enter new markets.

• Most FDI comes from MNCs, though governments and individuals can also invest.

1. Industrial Policy

• Definition: Govt. strategy to promote growth in specific industries.

• Objectives: Boost growth, create jobs, improve competitiveness, encourage innovation.

• Tools: Subsidies, tax breaks, infrastructure support, R&D aid.

2. Fiscal Policy

• Definition: Govt. decisions on spending and taxation.

• Objectives: Stabilize economy, manage demand, ensure full employment & price stability.

• Tools:

  • Spending (e.g., public projects, welfare)

  • Taxation (e.g., tax hikes or cuts)

Types:

• Expansionary Fiscal Policy:

  • ↑ Spending / ↓ Taxes → Used during recessions.

• Contractionary Fiscal Policy:

  • ↓ Spending / ↑ Taxes → Used during high inflation.

3. Monetary Policy

• Definition: Central bank control over money supply and interest rates.

• Goal: Regulate inflation, control growth, and ensure financial stability.

• Managed by: Central banks (e.g., RBI, Federal Reserve)

Tools:

• Open Market Operations: Buy/sell govt. bonds to control liquidity.

• Reserve Requirement: Set % of deposits banks must keep → affects lending.

• Discount Rate: Interest rate for loans to banks → affects borrowing costs.

Types:

• Expansionary Monetary Policy:

  • ↓ Interest rates → Encourages borrowing and spending.

• Contractionary Monetary Policy:

  • ↑ Interest rates → Controls inflation by reducing spending.

4. Monetary vs. Fiscal Policy – Key Differences