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PESTLE analysis India

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Julie McIntosh

on 17 April 2013

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Transcript of PESTLE analysis India

INDIA ROLE OF POLITICAL PARTIES President has no legislative power in India, he is a figurehead
Prime Minister is head of the government, current Prime Minister is the leader of the INC
The Indian government is a Federal Republic
Government follows the Westminster style of government (Saran, Guo, Pg137), the electoral system is based on the American college system Two parties dominate Indian politics: INC and BJP
The college system in India means there is more emphasis placed on winning those states by the parties than on winning others
The map shows the current dominant parties in each state of India. The Congress Alliance is led by the INC
The map demonstrates the dominance of the INC and BJP
Smaller states are key to economic growth and development P E S T L E analysis Indian President: Pranab Mukherjee ECONOMICAL POLITICAL PARTIES Many of those in smaller states have become disillusioned with the bigger parties in India, this has led to the emergence of many splinter parties represents a fraction of the parties who participated in the 2009 General Election
In total 364 parties ran in the election
Splinter parties cannot represent those in the smallest of states who feel under-represented and under-valued by their leaders. From education to political representation, smaller states are overlooked in every possible way in India (Komarov, 2004) CORRUPTION CORRUPTION In the last 5 years in state and general elections 89 candidates facing corruption charges were given ‘tickets’ to go forward as candidates despite these changes
With corruption in government how this will be stamped out in Industry?
GARR set up by the government to stamp out corruption in Industry, in particular tax evasion. India loses $314 billion annually through evasion Indian Prime Minister: Manmohan Singh Indian President: Pranab Mukherjee Indian Prime Minister: Manmohan Singh INFRASTRUCTURE India at the moment holds both a current account and trade deficit (BBC News, 2012) Government debt of GDP is currently 68.05% with a real growth rate of 5.90%
This government debt is leading to issues such as encouraging inflation and pushing out private productive investment (BBC News, 2012) The Indian Rupee has fallen by more than 27% against the dollar since last July (BBC News,2012)
Due to the deficits foreign investors have become anxious about entering into the Indian market (BBC Business News, 2012) FOREIGN DIRECT INVESTMENT FDI has contributed greatly to the Indian Economy by aiding stability, growth and development (Economy Watch, 2010) however there are many issues affecting FDI at the moment
Issues include lack of accessibility, difficulty acquiring land, an inefficient system which lacks transparency and is constrained by red tape and delay in reforms (Economy Watch, 2010) CORRUPTION Transportation includes 352 airports 251 paved , 101 unpaved , 41 heliports, 3,320,410 km roadways , waterways 14,500 , railways 63,974km (CIA World Factbook, 2013)
Infrastructural issues include transaction costs of cross border trading, inefficient EDI, lack of seamless land transport and restriction of FDI to specific regions (ICRIER, 2013)
These issues have various implications (ICRIER, 2013) Corruption, greed and incompetence were displayed during the construction of the Delhi Metro (Economy Watch, 2009) Senior Indian Minister Sharad Pawar Accused of acquiring land illegally in a privately built hill station city in Maharashtra (BBC News India, 2012)
India received a poor rating in a recent report by The Political and Economic Risk Consultancy due to corruption and greed (BBC News, 2012) INTRODUCTION SOCIAL TECHNOLOGICAL LEGAL Predominantly based on Common Law (CIA World Factbook, 2013)
Legal pluralism, respecting high diversity that defines India as a society (Balakrishnan, 2008)
Weak law enforcement (UK Trade & Invest, 2012)
Due to: Lack of clarity, communication and cooperation between the several government bodies, agencies and executive bodies (The Siasat Daily, 2010) LABOUR LAWS Over 50 national and more than 200 regional regulations in the individual states (Asien Kurier, 2008)
Poor fit to modern international business life
Current Issue: Increasing demand for stronger Trade Unions (BBC News, 2011) Capital gains won from deals carried out overseas, but with assets mainly situated in India, tax is now due in India (Economy Watch, 2012)
Backdated and valid since 1962
Aim: strengthening inland revenue against background of deficit ENVIRONMENTAL List of environmental issues is extensive (CIA World Factbook, 2013)
Rapid industrialisation and a growing population are straining natural resources and environment (Saksena, 2007) IMPACT OF CLIMATE CHANGE Massive disproportion in vulnerability between developed and currently emerging countries (The Economist, 2013)
Example: temperature rise 2.5° will lead to decrease in agricultural outcome by 38% for India
In comparison to only 6% for US agriculture (The Economist, 2013) RENEWABLE ENERGIES India sourced 34% of its energy from renewable sources (NRDC, 2009)
In contrast: U.S. only 7%
Lack of transparency and many barriers for foreign investors, mostly put up from the financial sector Indian society is influenced by the 2000 year old caste system
82% of the population is Hindu
Family Structure is still very important to Indians INDIA'S BUSINESS CULTURE Indian business culture is influenced by their religious heritage
Business is operated in a far different way compared to western businesses India’s first technology evolution came in the shape of the service sector
In the last 10 years India has been falling behind in terms of their technology infrastructure
Only 10% of Indians have access to the internet INTERNET USAGE FIGURES India’s new innovation is mobile phone technology
Over 200 billion mobile phones were sold in India last year
India is expected to have a social media audience of 88 million this year
This technology needs investment though TAXATION LAWS Area: 1/3 of the U.S.
Location: Asia, bordering the Arabian Sea and the Bay of Bengal between Burma and Pakistan
Population: 2nd largest of the world with 1.2 billion
Median age: 26.5 years

(Taken from CIA World Factbook, 2013) "It is impossible not to be astonished by India. Nowhere on Earth does humanity present itself in such a dizzying, creative burst of cultures and religions, races and tongues."

(Taken from "A rough guide to India") CONCLUSION POLITICAL Reference List: Images India Map Highway: http://www.mapsofindia.com/maps/india/national-highway.htmd (Accessed 12 April 2013)
India public debt and deficit: https://learning.ulster.ac.uk/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_50636_1%26url%3D (Accessed 12 April 2013)
Rate Table: http://www.x-rates.com/table/?from=USD&amount=1 (Accessed 12 April 2013)
Image Train: http://www.urbanrail.net/as/delh/delhi-metro1.jpg (Accessed 12 April 2013)
Delhi Metro Map: http://www.aonestudy.com/images/metro_map.jpg (Accessed 12 April 2013)
Sharad Pawar: http://www.google.co.uk/imgres?imgurl=http://cdn1.beeffco.com/files/poll-images/normal/sharad-pawar_2218.jpg&imgrefurl=http://electionsmeter.com/polls/sharad-pawar
President and Prime Minister: www.dawn.com; www.bloomberg.com (Accessed 13 April 2013)
Map political parties: http://mapsofindia.com/maps/india/states-political-parties.html
Corruption Charts: http://adrindia.org/ (Accessed 13 April 2013)
Judicial Framework: http://www.gyancentral.com/images/law2.pn (Accessed 13 April 2013)
Image Vodafone: http://i.telegraph.co.uk/multimedia/archive/02214/vodafone_2214328b.jpg (Accessed 13 April 2013)
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