Recent favourable and unfavourable changes in the government policies have prompted many corporations to review their corporate strategies. This has pointed to the need for monitoring the government policy environment formally and systematically. This paper discusses the types of influences the government policies can have on the corporate strategy of a corporation and the various steps in developing an in house system for monitoring the government policy environment. It presents the findings of a study aimed at understanding the monitoring practice of large corporations and illustrates how a large diversified company monitors the evens centering around the announcement of the annual budget of the Central Government.