To assist businesses in complying with legal requirements, governments are;
Show answer & explanation
Correct answer: B
Explanation
Answer: (B) Aligns its laws with international standards.
Explanation:
In the current era of globalization, businesses are no longer confined solely within local borders. To assist businesses in complying with legal requirements, governments harmonize their domestic laws with international standards. The primary objective of this process is to promote "Ease of Doing Business." When laws are aligned with international benchmarks, Foreign Direct Investment (FDI) increases, and domestic companies face fewer legal hurdles when conducting business in foreign markets. For instance, the implementation of GST (Goods and Services Tax) in India, along with reforms such as the Insolvency and Bankruptcy Code (IBC), have been undertaken to align with global financial norms.
Additional Points:
Option (A): Creating unique or idiosyncratic rules often increases business complexities, which can discourage foreign investors.
Option (C): Completely eliminating regulations is not feasible, as they are essential for safeguarding safety, the environment, and consumer rights (while this process is referred to as 'deregulation,' it does not constitute a complete abolition).
Option (D): Disregarding the implementation of regulations leads to corruption and legal uncertainty, both of which are detrimental to any healthy business environment.
Potential Exam Questions and Answers:
Question: Which organization used to publish the 'Ease of Doing Business' index (currently discontinued)?
Answer: The World Bank.
Question: What is the primary function of the Ministry of Corporate Affairs in India?
Answer: To oversee corporate governance and ensure compliance with the Companies Act, 2013.