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LOVELY PROFESTIONAL

UNIVERSITY
Lovely school of management

TERM PAPER

MGT-511 Business Environment

PESTLE Analysis of India

Submitted To: - Submitted


By:-
Mr. Vishwas Chakranarayan Ashish
Suman

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Roll No.
RS1904A10
Reg. No. –
10905868

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Acknowledgment

My sincere thanks and gratitude to my faculty who


inspired me by his able guidance and was a constant
guiding light during the course.
The support and knowledge provided by him has been
a great value addition for me and will go a long way in
building a promising career.
Last but not least, I am also thankful to all the
respondents of my survey without whom the Term
Paper would not have been completed successfully.

(Ashish
Suman)

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Contents
Page No.
1. Abstract : 4
2. Methodology : 5
4. About India : 6
4. Introduction : 9
5. PESTLE Analysis 7
Political : 10
Economical : 13
Social : 16
Technological : 17
Legal : 18
Environmental : 19
6. Conclusion : 20
8. References : 21

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Abstract

In this term paper Pestle analysis of India. How


Organization take the analysis for setup the offices or
industry in India. In this analysis tell the environment of
India. Factors of India. Government policy, literacy,
privatisation, legal problem, technology use India, any
many factors given below.

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Methodology

For This term Paper I search articles on Websites,


Journals, Newspaper, and Magazines. I study books for
these topics. I also take help of faculty for preparing
Term paper. I go thoroughly websites data. I also take
help my friends and colgues. I study on proquest
website article, journal. I read some other essays
regarding this.

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India
India, officially the Republic of India is a country in
South Asia. It is the seventh-largest country by
geographical area, the 2 most populous countries, and
the most populous democracy in the world. The Indian
Ocean on the south, the Arabian Sea on the west, and
the Bay of Bengal on the east, India has a coastline of
7,517 kilometres .It is bordered by Pakistan to the west,
People's Republic of China, Nepal, and Bhutan to the
north, and Bangladesh and Myanmar to the east. India
in the vicinity of Sri Lanka, Maldives, and Indonesia in
the Indian Ocean.
Home to the Indus Valley Civilisation and a region of
historic trade area and vast empires, Indian
subcontinent was identified with its commercial &
cultural wealth for much of its long history. Four major
religions, Hinduism, Buddhism, Jainism and Sikhism
originated country, while the Zoroastrianism, Judaism,
Christianity and Islam arrived in the first millennium of
CE and shaped the region's diverse culture. The British
East India Company from the early eighteenth century
and colonised by the United Kingdom from the mid-19
century, India became an independent nation in 1947
after a struggle for independence that was marked by
widespread non-violent resistance.
India is a republic consisting of 28 states and 7 union
territories with a parliamentary system of democracy. It
has the world's 12th largest economy at market
exchange rates and the fourth largest in purchasing
power. Economic reforms since 1991 have transformed
it into one of the fastest growing economies; however it
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still suffers from high levels of poverty, illiteracy,
disease, & malnutrition. A pluralistic, multilingual, and
multiethnic society.

India at Glance
1. Population : 1,150,000,000 (1.15 billion)

2. Area : 3.3 million square kilometres

3. Geographical location : Lies between latitudes 8 °


4'
& 37 ° 6 ' north and longitudes
68 ° 7 ' and 97° 25' east
4. Coastline length : 7600 km

5. Languages : 17 major languages, 844 dialects

6. Major religions : Hinduism, Islam,


Christianity, Buddhism,
Sikhism, Jainism

7. National anthem : Jan gana mana written by


Rabindranath Tagore

8.National Song : Vande Mataram, composed


in Sanskrit by
Bankimchandra Chatterji
9.National emblem : Replica of the Lion Capital of
Sarnath

10.National flag : Horizontal tricolour in equal


proportion of deep saffron on
the top, white in the middle and
dark green at the bottom. In the
centre of the white band is a wheel.

11. National animal : Tiger (Panthera Tigris)

12. National bird : Peacock

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13. National flower : Lotus

14. National tree : Banyan

15. National fruit : Mango

16. National currency : Rupee (One Rupee=100


paisa)

17. National Sport : Hockey

Introduction
PESTLE Analysis in Business Environment
In business PESTLE analysis role is very important.
Originally designed as a business environmental scan,
the PESTLE analysis is an analysis of the external macro
environment in which a business operates. These are
factors which are beyond the control or influence of a
business, however are important to be aware of when
doing product development, business or strategy
planning.
PESTLE means:
P- Political
E- Economical
S- Social
T- Technological
L- Legal
E-Environmental

The PESTLE subject should be a clear definition of the


market being addressed, this is the followings:-

 A company looking at its market

 A product looking at its market

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 A brand in relation to its market

 A local business unit or function in a business


 A strategic option, such as entering a new market

 A potential acquisition

 A potential partnership

 An investment opportunity
Now we see in details of PESTLE factors/Impact in India
In next following pages:

POLTICAL
These refer to government policy such as the degree of
intervention in the economy. What goods and services
does a government want to provide? To what extent
does it believe in subsidising firms? What are its
priorities in terms of business support? Political
decisions can impact on many vital areas for business
such as the education of the workforce, the health of
the nation and the quality of the infrastructure of the
economy such as the road and rail system.
India is the biggest democracy in the World. The
government type is federal republic. Based on English
common law, judicial review of legislative acts, accepts
compulsory ICJ jurisdiction with reservations, separate
personal law codes apply to Muslims, Christians, and
Hindus. The political Situation in the India is more or
less stable. Most of its democratic history, the federal
Government of India has been led by the (INC) Indian

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National Congress. State politics dominated by several
national parties including the INC. The Bharatiya Janata
Party (BJP), the Communist Party of India (CPI), and
various regional parties. In the 2009 Indian elections,
the INC won the biggest number of Lok Sabha seats
and formed a government with a alliance called the
United Progressive Alliance (UPA), supported by various
left-leaning parties and members opposed to the BJP.
Overall India currently has a coalition led government
and both major political parties the UPA and BJP,
whichever comes in power.
It comprises political stability and the policies of the
government. Ideological inclination of political parties,
personal interest on politicians, influence of party
forums etc. create political environment. For example,
Bangalore established itself as the most important IT
centre of India mainly because of political support.
In India many poltical factors those effect in business
environment. Political pressures in ruling government
and vote bank problems. These are the major factors
those affect on political environment:-
(i) Taxation policy
India has a well developed tax structure with a three-
tier federal structure, comprising the Union
Government, the State Governments and the Urban &
Rural Local Bodies. The power to levy taxes and duties
are distributed among the three tiers of Governments,
in accordance with the provisions of the Indian
Constitution. The main taxes/duties that the Union
Government is empowered to levy are Income Tax

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income, Customs duties, Central Excise and Sales Tax
and Service Tax. The principal taxes levied by the State
Governments are Sales, Stamp Duty, State Excise, Land
Revenue, and Duty on Entertainment and Tax on
Professions & Callings. The Local Bodies are
empowered to levy tax on properties, Octroi Tax on
Markets and Tax/User Charges for utilities like water
supply, drainage, etc.

(ii) Privatisation
Reduce the political interface in the management of
enterprises, leading to improved efficiency and
productivity. In India this time do many govt company
Good performance but some time later there are facing
many problems so the go for privatisation.

(iii) Deregulation
India Govt makes some Act to freely do business in
India.
(iv) International trade regulations
International trade regulation day by day India makes
it flexi able for foreign trade.
(v)General initiatives
Some policy to first Political initiates for the business
environment in In India.
(vi) Government stability
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In India past 10 years govt is stable. Before 10 years
India facing govt stability. If govt stability not market is
not improve and no one come here for investment.
(vii)International stability
No wars, no any country home problems, and no any
type of war like Iraq they make uncertainty in market.

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ECONOMICAL
It includes interest rates, taxation changes, economic
growth, inflation and exchange rates. As you will see
throughout the "Foundations of Economics" book
economic change can have a major impact on a firm's
behaviour. For example:

• higher interest rates may deter investment


because it costs more to borrow

• a strong currency may make exporting more


difficult because it may raise the price in terms of
foreign currency

• inflation may provoke higher wage demands from


employees and raise costs

• higher national income growth may boost demand


for a firm's products
In order to solve economic problems of our country, the
government took several steps including control by the
State of certain industries, central planning and
reduced importance of the private sector. The main
objectives of India’s development plans were:

• Initiate rapid economic growth to raise the


standard of living, reduce unemployment and
poverty,

• Become self-reliant and set up a strong industrial


base with emphasis on heavy and basic industries,

• Reduce inequalities of income and wealth,

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• Adopt a socialist pattern of development — based
on equality and prevent exploitation of man by
man,

As a part of economic reforms, the Government of India


announced a new industrial policy in July 1991,
The broad features of this policy as follows:

• The Government reduced the number of industries


under compulsory licensing to six.

• Disinvestment was carried out in case of many


public sector industrial enterprises.

• Policy towards foreign capital was liberalized. The


share of foreign equity participation was increased
and in many activities 100 per cent Foreign Direct
Investment (FDI) was permitted.

• Automatic permission was now granted for


technology agreements with foreign companies.

• Foreign Investment Promotion Board (FIPB) was set


up to promote and channelise foreign investment
in India.
The economic factors in India are improving
continuously. The GDP (Purchasing Power Parity) is
estimated at about 3.965 trillion U.S. dollars in the year
2009. The GDP- real growth rate in 2009 was 6%. India
has the third highest GDP in terms of purchasing power
parity just ahead Japan and behind U.S. and China.
Foreign direct investment rose in the fiscal year ended
September 2009 to about US$ 10.532 billion. There is a
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continuous growth in per capita income; India’s per
capita income is expected to reach Rs. 33283 by the
end of 2009-2010. This will lead to higher buying power
in the Hands of the Indian consumers. India GDP is now
6.5. Today India reserve Us dollor in Good condition.
In Indian economy is strong. We see in recession our
economy is less affect from recession compression to
western countries. These following factors:
(i) Interest rates
(ii) Money supply
(iii) Credit control
(iv) Financial markets
(v) Inflation
(vi) Competitors pricing
(vii) Globalization

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SOCIAL
Changes in social trends can impact on the demand for
a firm's products and the availability and willingness of
individuals to work. In the India, for example, the
population has been ageing. This has increased the
costs for firms who are committed to pension payments
for their employees because their staff are living
longer. It also means some firms have started to
recruit older employees to tap into this growing labour
pool.
It describes the characteristics of the society in which
the organization exists. Literacy rate, customs, values,
beliefs, lifestyle, demographic features and mobility of
population are part o the social environment. It is
important for managers to notice the direction in which
the society is moving and formulate progressive
policies according to the changing social scenario
India is the second most populous nation in the world
with an approximate population of over 1.1billion
people. This population is divided in the following age
structure: 0-14 years – 31.8%, 15-64 years – 63.1% and
65 years and above – 5.1%. There has a
(i)Mobility
(ii)Income distribution
(iii)Population demographics
(iv)Attitude to work and leisure
(v)Standard of education and skills
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(vi)Working conditions

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TECHNOLOGICAL
New technologies create new products and new
processes. MP3 players, computer games, online
gambling and high definition TVs are all new markets
created by technological advances. Online shopping,
bar coding and computer aided design are all
improvements to the way we do business as a result of
better technology. Technology can reduce costs,
improve quality and lead to innovation. These
developments can benefit consumers as well as the
organisations providing the products. Today in India 3G
technology starts. A heavy infrastructure for bandwidth.
BSNL and Reliance have more covered city by optical
fibre. India have many Technological Projects. Good
Service provider in IT sector ex TCS, Infosys and many
more.Today India is a big market in mobile sector here
5-6 player operataors and new operators launch their
services soon.
(i) IT Development
(ii)New Materials and processes
(iii)Government technology funding
(iv)Speed of technology transfer
(v)Software upgrades

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LEGAL
These are related to the legal environment in which
firms operate. In recent years in the India There have
been many significant legal changes that have affected
firms' behaviour. The introduction of discrimination and
disability discrimination legislation, an increase in the
minimum wage and greater requirements for firms to
recycle are examples of relatively recent laws that
affect an organisation's actions. Legal changes can
affect a firm's costs and demand.
This consists of legislation that is passed by the
parliament and state legislatures. Examples of such
legislation specifically aimed at business operations
include the Trade mark Act 1969, Essential
Commodities Act 1955, Standards of Weights and
Measures Act 1969 and Consumer Protection Act 196.
In India take many type of permission to the sate govt
or central govt.
In India many type of act like license permission,
copyright permission, and many types of other
permission.
(i)Employment law
(ii)Trade and product restrictions
(iii)Health and safety regulations
(iv)EU and international laws
(v)Monopolies commission

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ENVIORNMENTAL
Environmental factors include the weather and climate
change. Changes in temperature can impact on many
industries including farming, tourism and insurance.
With major climate changes occurring due to global
warming and with greater environmental awareness
this external factor is becoming a significant issue for
firms to consider. The growing desire to protect the
environment is having an impact on many industries
such as the travel and transportation industries (for
example, more taxes being placed on air travel and the
success of hybrid cars) and the general move towards
more environmentally friendly products and processes
is affecting demand patterns and creating business
opportunities.
In India we know that many types of enviormental
problems this are basic things but more important for
our enviorment. also biotic factors ,abiotic factors and
their interaction with one another. pollution free
industrial activity i.e is nessary condition of industrial
organization.
Industrialization and urbanization have resulted in a
profound deterioration of India's air quality. Of the 3
million premature deaths in the world that occur each
year due to outdoor and indoor air pollution, the
highest number are assessed to occur in India.

(i)Pollution problems
(ii)Planning permissions

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(iii)Waste disposal
(iv)Noise controls
(v)Environmental pressure groups

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CONCLUSTION

The PESTLE analysis here shows what is a factor in


India who relates to the Business. This study is more
and more beneficial for any business organization. In
the report given detail of our India political, social
economical, legal, environmental and technological.
This all the issue of India market stability, government
politic. Political stability in India. And many other
things show this. We say that PESTlE analysis role is in
today scenario in business very important. We see here
India PESTLE analysis. In India many opportunity to
open a business. Some problems in India But we Know
every where every things is not available.

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References
1. Salem sheikh Text Book
2. www.economicstimes.com
3. http://economictimes.indiatimes.com/
4 http://proquest.umi.com/
5. http://rapidbi.com/pestle/Introduction-to-the-PESTLE-
analysis-tool.html#political
6. http://www.english-
test.net/gre/vocabulary/meanings/349/gre-words.php
7. http://en.wikipedia.org/wiki/Abstract_%28summary
%29
8. http://en.wikipedia.org/w/index.php?title=Special
%3ASearch&search=pestle&go=Go
9. http://www.english-
test.net/gre/vocabulary/meanings/349/gre-words.php
10. http://www.teesmaarkhan.com/2008/07/pest-
analysis-india.html
11. http://www.financialexpress.com/gsearch.php?
cx=partner-pub-9517772455344405:6tybby-
db0c&cof=FORID%3A10&ie=ISO-8859-1&q=Poltical
%20Impact%20in%20buisness
%20enviornment&sa=Search#1268
12.http://books.google.co.in/books?
spell=1&q=salim+sheikh+buisness+enviornment&btn
G=Search+Books

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