Monetary and fiscal policies are the two different tools taken by the authorities. Monetary policy is taken by the central bank of any country. And fiscal policy is taken by the government By nature two policies have different effect and implication. The economic condition, government vision etc influence in selecting what policy should be taken.
Basically the aim of those two policies is to promote and foster economic growth, increase the GDP, creating employment and over all make positive impact on the economy.Those policies are very much important and concerning matter for the business community. Business firms would be interested to expand their business and making larger investment if monetary and fiscal policy are in favor and keep interest of them.
The business firm can influence the government in the following ways to make favorable monetary and fiscal policy:
1. Collective bargaining:
Business communities sometimes arrange different trade shows, seminars and discussions where top government officials like finance minister, governor of the central bank are invited. On that meeting business communities can express their concern and try to convince in making certain policies. Sometime, delegates from the business community meet with prime minister, finance minister on this issue. This can be one way from which business can influence government
2. Private public partnership:
Business firms can offer government private public ownership in some industries. In doing this, government can save some capital that is shared by the private community. And another benefit of this, if government become partner then the policy will be in favor of the business sector. This concept is very much helpful if governmental policy is to boost up the economic growth and rapid industrialization.
3. Privately owned country service:
If the business sector (i.e. private firms) take initiative to do some country service like environmental clean up, waste management, and in return want some favor such as tax reduction on some specific business, it’s become another way to influence government in making favorable monetary and fiscal policy.
4. Creation of certain jobs and get privilege on any industry:
Creation of employment is another concern for the government. Government always tries to provide new job opportunities for the unemployed people and try to achieve higher employment in the country. Business firms also do business for profit motive. In doing this they need employees. If business firms assure the government that they will create certain new job opening in the market and wants to get some facilities for their business, then monetary and fiscal policy can go in favor of the business.
5. Assurance of incremental social responsibility:
Corporate social responsibility is another issue that business firms have to do in the global business world. Some issues like acid violence, dowry, tree plantation, awareness against some fatal disease etc. here business can help. In return they can demand government giving some facilities. Government thus makes some favorable monetary and fiscal policy.
Apart from the above issues there are something that business can influence government in making favorable monetary and fiscal policy. Those are quite unethical but it has existence in the modern world.
6. Bribe to the government officials:
Sometimes this unethical practice can be seen in some third world countries and even in some developed countries. Bribing the government officials business sometimes make favorable policies.
7. Forcing government by stop production, chaos:
Some times business firms can take negative actions like work stoppage, stop export etc to create government to give some facilities and make favorable monetary and fiscal policy.
Actually all the policies of the government trigger the benefit for the business sector. Business firm can influence the government in making those policies using the above discussed ways.