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Archana Shukla

Rajeshwar Singh Sachin Singh Bhaveek Sonigra Krishnapriya Yadav

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INDIAN POLITICAL ENVIRONMENAL ANALYSIS

The political environment includes all laws and


government agencies that influence or restrict individuals or organization in the society.

The political environment in an economy is influence by:


O The ideology of the party in power O The political stability O The foreign policy

O Political factors are basically to what

degree the government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions,

tariffs, and political stability.

Income Tax Slabs for the Individual (Below 60 Years Age) for the Assessment Year 2013-2014
SI NO. 1. INCOME TAX SLAB Rs. 0 To 200,000 INCOME TAX RATE PAYABLE No Income Tax

2.
3. 4.

Rs. 200,001 to 500,000


Rs. 10,00,001

10%
30%

Rs. 500,001 to 1000,000 20%

Income Tax Slabs for the Individual (Above 60 Years Age) for the Assessment Year 2013-2014
SI NO. 1. 2. 3. 4. INCOME TAX SLAB Rs. 0 To 250,000 Rs. 250,001 to 500,000 Rs. 500,001 to 1000,000 Rs. 10,00,001 INCOME TAX RATE PAYABLE No Income Tax 10% 20% 30%

INDIAN LABOUR LAW


O Indian labour law refers to laws regulating employment in India.

There are over fifty national laws and many more state-level laws.
O Traditionally Indian governments at federal and state level have sought

to ensure a high degree of protection for workers. So for instance, a permanent worker can be terminated only for proven misconduct or for habitual absence. Collective labour laws
O The Industrial Disputes Act (1947) requires companies employing

more than 100 workers to seek government approval before they can fire employees or close down. In practice, permissions for firing employees are seldom granted.

O Trade Unions Act 1926


O Provisions of the Factories Act, 1948

Practise required by law


Minimum wage (US$/month) Standard work day Minimum rest while at work Maximum overtime limit premium time for overtime Dismissal due to redundancy allowed? Government approval required for 1 person dismissal Government approval required for 9 person dismissal Government approval for redundancy dismissal granted Dismissal priority rules regulated Severance pay for redundancy dismissal of employee with 1 year tenure Severance pay for redundancy dismissal of employee with 5 year tenure 75 5 hours

India
182.5 8 hours None

China

America
1242.6 8 hours None None 50%

30 minutes per 5 hour 200 hours per year 100% Yes, if approved by government Yes Yes Rarely Yes 2.1 week salary

1 hour per day 50%

Yes, without approval of Yes, without approval government of government No No No NA Yes 4.3 week salary NO NA NO None

10.7 week salary

21.7 Week Salary

None

CURRENT POLITICAL ENVIRONMENT


O 2 weeks before, One perspective was that the India government is

generally stable. Although corruption runs deep within the government and there is a stark diversity of politics, the government is generally stable

O If a week is a long time in politics, a year must be equivalent to

near-eternity and the next year may not be a good time for Indian investors.

O The Lanka resolution at the United Nations provoked the exit of the

Dravida Munnetra Kazhagam from the United Progressive Alliance (UPA) government.

O This signals the likelihood of recurring bouts of

political uncertainty until the next general elections at the very least

O Every sign of disagreement between the UPA's

coalition partners will now be seen as a possible trigger for a no-confidence motion.

Indian Economic Environment Analysis


Macroeconomic performance
Sectoral contribution to GDP and GDP growth

rate Pricing trends - inflation and interest rates Consumption, saving and investment Trends International trade and its contribution to GDP

Macroeconomic Performance

Sectoral contribution to GDP

GDP Growth

India's quarterly GDP at factor cost at constant (2004-05) prices for Q3 of 2012-13 is estimated at Rs. 14,11,594 crore, as against Rs. 13,51,252 crore in Q3 of 2011-12, showing a growth rate of 4.5 percent over the corresponding quarter of previous year.

Based on an assessment of the current macroeconomic situation, the Reserve Bank of India decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 percent to 7.5 percent with immediate effect.

Consumer Spending in India increased to 9298.39 INR Billion in the fourth quarter of 2012 from 8198.25 INR Billion in the third quarter of 2012. Consumer Spending in India is reported by the Central Statistical Organisation, India. Historically, from 2004 until 2012, India Consumer Spending averaged 6646.54 INR Billion reaching an all time high of 9298.39 INR Billion in November of 2012 and a record low of 4469.88 INR Billion in August of 2004.

Personal Savings in India increased to 20037.20 INR Billion in 2012 from 18329.01 INR Billion in 2011. Personal Savings in India is reported by the Central Statistical Organisation, India. Historically, from 1951 until 2012, India Households Savings averaged 2778.25 INR Billion reaching an all time high of 20037.20 INR Billion in June of 2012 and a record low of 6.34 INR Billion in June of 1952. In India, Households Savings correspond to the total income saved by households during a certain period of time.

The current account deficit widened to 4.6 percent of GDP in the first six months ending September 2012 as export growth slowed more sharply than imports and is expected to be at its highest at around 5 percent in 2012/13

Exports in India increased to 1412.06 INR Billion in February of 2013 from 1389.82 INR Billion in January of 2013. Exports in India is reported by the Directorate General of Commerce. Historically, from 1978 until 2013, India Exports averaged 235.01 INR Billion reaching an all time high of 1421.73 INR Billion in March of 2012 and a record low of 3.75 INR Billion in May of 1978. Indias main exports are engineering goods (19 percent of total exports), gems and jewelry (15 percent), chemicals (13 percent), agricultural products (9 percent) and textiles (9 percent). India is also one of Asias largest refined product exporters with petroleum accounting for around 18 percent of total exports. Indias main export partners are United Arab Emirates (12 percent of total exports) and United States (11 percent)

Imports in India decreased to 2214.49 INR Billion in February of 2013 from 2475.94 INR Billion in January of 2013. Imports in India is reported by the Directorate General of Commerce. Historically, from 1978 until 2013, India Imports averaged 350.87 INR Billion reaching an all time high of 2475.94 INR Billion in January of 2013 and a record low of 4.98 INR Billion in April of 1978. India is heavily dependent on coal and foreign oil imports for its energy needs. Other imported products include: machinery, gems, fertilizers and chemicals. Indias main import partners are China (12 percent of total imports), United Arab Emirates, Switzerland, Saudi Arabia, United States, Iraq and Kuwait.

Social Analysis

Demographic Dividend

Facts & Figures


O O O O O

Population:1,220,800,359 (2013 est.)(2nd) Growth rate:1.41% (2009 est.) (93rd) Birth rate:22.22 births/1,000 population (2009 est.) Death rate:1.4 deaths/1,000 population (2009 est.) Life expectancy:69.89 years (2009 est.) male:67.46 years (2009 est.) female:72.61 years (2009 est.) O Fertility rate:2.5 children born/woman (SRS 2010)(82nd) O Infant mortality rate:30.15 deaths/1,000 live births (2009 est.)

Age Structure & Sex Ratio


O Age structure

0-14 years:31.1% (male 190,075,426/female 172,799,553) (2009 est.) 15-64 years:63.6% (male 381,446,079/female 359,802,209) (2009 est.) 65-over:5.3% (male 29,364,920/female 32,591,030) (2009 est.) O Sex ratio At birth:1.12 male(s)/female (2009 est.) Under 15:1.10 male(s)/female (2009 est.) 15-64 years:1.06 male(s)/female (2009 est.) 65-over:0.90 male(s)/female (2009 est.)

Rural Snapshot
O Rural Population72.2%,

male: 381,668,992, female: 360,948,755 (2001 Census)


O Bottom Of Pyramid - $ 1.8 trillion
O Increasing standard of living O Schemes Like MNREGA

Human Development Index World

HDI Indian States

Income Distribution

Income Distribution
O How rich are the Indians today? What is the distribution of wealth in

India among its 1.2 billion citizens? What is considered rich? What is the income range of middle class households? O "Rich" households $35,000+ per year: 1.3% (16 million people)
O "Middle-class" households

$8,000 to $35,000 per year: 13% (160 million)


O "Aspiring middle-class" households

$3,500 to $8,000 per year: 30% (359 million)


O "Deprived" households

Below $3,500 per year: 57% (684 million)

O I wish there had been another category of "Severely

deprived" households comprising, say, the bottom 300 million people. I bet the household income there is below $800 per year (~$2/day).
O About 170,000 people, or 0.01%, have a net-worth over

$1 million. Of these, 25 are dollar billionaires. Read the rest of the report.

Income Distribution

Education

Education Facts & Figures


O As per Population Census of India 2011, the Literacy rate of

India has shown as improvement of almost 9%.


O It has gone up to 74.04% in 2011 from 65.38% in 2001, thus

showing an increase of 9% in the last 10 years.


O It consists of male literacy rate 82.14% and female literacy rate

is 65.46%. O Kerala with 93.9% literacy rate is the top state in India.
O Lakshadweep and Mizoram are at second and third position

with 92.3% and 91.06% literacy rate respectively.


O Bihar with 63.08% literacy rate is the last in terms of literacy

rate in India.

Education
O Government of India has taken several measures to

improve the literacy rate in villages and towns of India.


O State Governments has been directed to ensure and

improve literacy rate in districts and villages where people are very poor.
O There has been a good improvement in literacy

rate of India in last 10 years but there is still a long way to go.

Technological Analysis

R&D Spending World

R&D
O For instance, out of a total global R&D spend of $1143 billion,

the percentage claimed by the US is 33.6, Europe 24.5, and Japan and China 12.6 each, while Indias share is a meagre 2.1. O Government sources pick up 75-80 per cent of the R&D expenditure, and only 20-25 per cent spent by private sector and a mere three per cent by universities. Whereas the breakup of percentages for OECD countries is 69 by private enterprises, 18 by universities, 10 by government agencies and three by non-profit bodies. O The rates of super deductions go up to 200 per cent in India, being comparable with those across the globe and on par with countries such as Singapore, Malaysia and Hungary.

Outsourcing Hub
O Government supported policies like SEZ, STP
O Global Outsourcing Hub O Size - $100 billion

O Major IT & ITES


O Major Cities Bangalore , Hyderabad, Pune,

Chennai
O Total Direct Employment around 25 lakh

Communication
O Well Developed Network

O Second Largest and next to china


O More than 96 crore registered sims O Internet connectivity 3rd largest in the world

O More then 13 crore people connected


O Size of telecommunication US$ 59 billion O Size of online market US $ 12 billion

O Very fast growing market

LEGAL FACTOR
O Legal factors include discrimination law, consumer

law, antitrust law, employment law, and health and safety law. These factors can affect how a

company operates, its costs, and the demand for


its products.

LEGAL FACTOR
O Legal System is based on English Common Law

O Consumer goods need import license.

O Ban of Alcohol in 5 states

O Health warning on Alcohol Container.

Statistics
O Rank: 10th (nominal) / 3rd (PPP)

O Currency: 1 Indian Rupee (INR) ( ) = 100 Paise

O Fiscal year:1 April 31 March

O Trade organizations:WTO, SAFTA, G-20 and

others

Statistics
O GDP:

$ 1.946 trillion (nominal: 10th;


$4.710 trillion (PPP: 3rd; 2012

2012 IMF est.)[ IMF est.)[1 O GDP growth: O GDP per capita:

5.3% (2012-2013)[2] $1,455 (nominal: 139th; 2011) $3,944 (PPP: 125th; 2011)[1] O GDP by sector : agriculture: 17.2%, industry: 26.4%, services: 56.4% (2011 est.) O Inflation(CPI) : CPI: 10.56%, WPI: 7.18% (Dec 2012) O Population below poverty line: 29.8% (2010)
O Labour force:

487.6 million (2011 est.)

Cont.
O Labour force: O Labour force

487.6 million (2011 est.) Agriculture: 52%, industry: 14%, services: 34% (2009 est.)

by occupation:

O Unemployment:
O Average gross

9.4% (2011 est.)

salary :
O Main industries:

$1,410 yearly (2011)

Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals

O The economy of The Republic of India is

the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). Hence attractive destination for foreign investors.
O India is the nineteenth largest exporter hence

the Forex reserves are increasing.


-Tourism contributes 6.23% to the national GDP

English speaking &

analytical students
World class business-

social-spiritual political leader, Professor, scientist, ManagerDoctor-Engineer-Civil

servants etc

Very rich in Natural & Living

resources
Biodiversity & Traditional

knowledge base
Diversity vs. Ideas-Innovation-

Integration
Powerful spiritual strength

(yoga-Ayurveda-Healingtherapy services)

Geographical location

(whole markets are


shifting toward Asian nations)
-India Strategic position

at various platforms
Big democracy, Big

market & free media

O Highly educated , skilled ,young, capable & dynamic

human resources Literacy rate

74.04% (82.14% Male and 65.46% Female)


71.7% (Age 7 and above, as of 2001) 81.4% (Total population, Age 15-25, as of 2006)

As per CIA estimates

Range of emerging professional champions IT & Software superpower Stable economy does not get affected by external

changes
Extensive higher education system third largest

reservoir of engineers

Age structure 0-14 years: 31.1% (male 190,075,426/female 172,799,553) (2009 est.) 63.6% (male 381,446,079/female 359,802,209) (2009 est.) 5.3% (male 29,364,920/female 32,591,030) (2009 est.)
Huge pool of labour force Huge English speaking

population

15-64 years:

65-over:

O Lack of spirits of entrepreneurship, patriotisms

and leadership skill


O Lack of effective & execution framework
O Lack of Indian management models O Lack of transparency-Trust-Responsibility

O Lack of learning habits & Team work spirit O Fear of sharing knowledge & taking risk O Thinking win-lose lose-win look-outside O Slow absorption of Innovation & change O Rush of getting high marks not Development

O Lack of Indian management models


O Absence of greater technology impetus O Unawareness: Quality-Standardization O Lack of Emotional-Spiritual development

O Blindly respect anything taught by elders

- Social Evil such as child marriage, dowry, etc


O Heavy dependence on agriculture

- 15.7 % of GDP and 52.1% of total employment.


O Huge poverty

- 33% of the total population below poverty line


O High rate of unemployment

- 9.4% unemployed

O Stark inequality in prevailing socio-economic conditions O Poor infrastructural facilities O Low productivity O Huge population leading to scarcity of resources

- 1210 million is the population currently second most populated


country and the growth rate(decadal change 17.64%) is much higher then chinas growth rate (decadal change 5.43%)

O Low level of mechanization


O Red tapism, bureaucracy O Low literacy rates

O Unequal distribution of wealth


O Rural-urban divide leading to inequality in standard

of living

O Scope for entry of private firms in various sectors of

business.
O Inflow of FDI is likely to increase in many sectors.

- The third-largest economy in the world in PPP

terms
O Huge domestic market. Opportunity for MNCs for

sale.
- Population of 1210 million is a huge market

O Huge natural gas deposits found in India, natural gas as

a fuel has tremendous opportunities.


- India is the fourth largest producer of electricity

and oil products

O Vast agriculture resources, fishing, plantation crops and

live stock -India ranks second worldwide in farm output.

O Great foreign exchange earning prospects in IT

sector.(expected to grow at 12-14


O Tourism is a thriving industry in India and It will help

raise our foreign reserves and create employment

opportunities.($121billion revenue)
O Rural economic development. O Investment in research and development.

O Global economy recession/slowdown.


O High fiscal deficit.(5.2%) O Growing import bill.($140billion, increased by 40%)

O Agriculture excessively dependent on monsoons.

O Population explosion, rate of growth of

population still high.(1.4%)


O Volatility in crude oil prices across the globe. O Self centered political leadership.

- High corruption

O Continuous threat of terrorist attacks. In past decade

there were 41 terrorist attacks in India.


O Corruption in the country is a matter of concern. 141

cases of scams have been reported in last 10 years.