POLITICAL ENVIRONMENT

ECONOMIC & LEGAL

ENVIRONMENT
 Political and Legal environment
Political Institutions- Legislature, Executive, Judiciary,

Role of government in Business, Legal framework in India.

Economic environment- economic system and economic policies.

Concept of Capitalism, Socialism and Mixed Economy
Impact of business on Private sector, Public sector and Joint sector

Sun-rise sectors of India Economy. Challenges of Indian economy.

 INTRODUCTION
A countrys political system refers to the structural dimensions, power
and dynamics of its government that specify institutions, organizations,
and interest groups, and define the norms that govern political activities.
It includes complete set of institutions, political organizations, and
interest groups as well as the relationship among institutions and political
norms and values
A Political system must integrate different groups into a functioning self-
sustaining, self-governing society
It ensures level of stability in social relations and unites a society in the
face of diverse viewpoints
An essential task of a political system is to integrate the different
elements into a functioning unit
It is effective when supported by legitimate consensus of people who live
under it.
 The political system of India is made up of three institutions: Legislature
Executive Judiciary
In a constitutional democracy, the power of government is divided so
that the legislature makes the laws, the executive authority carries them
out, and the judiciary operates quasi-independently.
These divisions are sometimes described as a "separation of powers.
LEGISLATIVE POWER
A legislature is the law-making body of a political unit, usually a national
government, that has power to enact, amend, and repeal public policy.
Laws enacted by legislatures are known as legislation. Legislatures
observe and steer governing actions and usually have exclusive authority
to amend the budget or budgets involved in the process.
The most common names for national legislatures are "parliament" and
"congress
Legislative power in India is exercised by the Parliament, consisting of the
President of India, the Rajya Sabha and Lok Sabha.
The Rajya Sabha is considered to be the upper house or the Council of
States and consists of members appointed by the President and elected by
the state and territorial legislatures. Lok Sabha is considered the lower
house or the House of the people.
The Parliament does not enjoy complete sovereignty, as its laws are
subject to judicial review by the Supreme Court of India.
 However, it does exercise some control over the executive branch.
The members of the cabinet, including the prime minister and the
Council of Ministers, are either chosen from parliament or elected there
to within six months of assuming office.
The cabinet as a whole is responsible to the Lok Sabha. The Lok Sabha is
a temporary house and can be dissolved at any time. But the Rajya Sabha
is a permanent house which can never be dissolved.
EXECUTIVE
The executive branch of government is the one that has sole authority
and responsibility for the daily administration of the state bureaucracy.
The executive branch executes, or enforces the law

The executive power is vested mainly in the President of India

The Vice-President of India is the second-highest ranked

government official.
The Prime Minister of India, as addressed to in the Constitution of
India, is the chief of government, chief adviser to the President of India,
head of the Council of Ministers and the leader of the majority party in
the parliament. The prime minister leads the executive branch of the
Government of India.
The Cabinet of India includes the Prime Minister and his Cabinet
Ministers. Each Minister must be a member of one of the houses of
India's Parliament.
 Other Ministers are either as Union Cabinet Ministers, who are
heads of the various Ministries; Ministers of State, who are junior
members who report directly to one of the Cabinet Ministers,
The Civil Services of India is the civil service and the
permanent bureaucracy of the Government of India. The Cabinet
Secretary of India is the senior most civil servant in the country. The
Cabinet Secretary is the ex-officio Chairman of the Civil Services Board
of the Republic of India; generally the senior most officer of the Indian
Administrative Service
JUDICIAL BRANCH
India's independent union judicial system began under the British.
the Indian justice system consists of a unitary system at both state and
federal(national) level. The judiciary consists of the Supreme Court of
India, High Courts of India at the state level, and District Courts and
Sessions Courts at the district level.
The judiciary (also known as the judicial system or court system) is the
system of courts that interprets and applies the law in the name of the state.
The judiciary also provides a mechanism for the resolution of disputes.
Under the doctrine of the separation of powers, the judiciary generally
does not make law (that is, in a plenary fashion, which is the responsibility
of the legislature) or enforce law (which is the responsibility of the
executive), but rather interprets law and applies it to the facts of each case.
This branch of the state is often tasked with ensuring equal justice under
law. It usually consists of a court of final appeal (called the "Supreme court"
or "Constitutional court"), together with lower courts.
ROLE OF GOVERNMENT IN BUSINESS
Government is a very powerful institution which can create a favourable
business environment.
Government rules promote and regulate the actions of business. The
laws influence the production, selling, and pricing of goods and services
The government will rationalise its role in business with three key
objectives:
to avoid crowding out the private sector,
to increase liquidity in capital markets, and
to improve the governments fiscal position.
GOVERNMENTS ROLE IN INFLUENCING BUSINESS
1. Prescribes the rules of the game for business.
2. Purchases business products and services.
3. Uses it contracting power to get business to do things it wants.
4. Is a major promoter and subsidizer of business.
5. Is the owner of vast quantities of productive equipment and wealth.
6. Is an architect of economic growth.
7. Is a financier.
8. Is the protector of various interests in society against business
exploitation.
9. Directly manages large areas of private business.
10. Is the repository of the social conscience and redistributes resources to
meet social objectives
1. GOVERNMENT: REGULATOR OF BUSINESS
Ensure the private investment and production in the industry meets the
socio-economic objectives of the government.
Ensure the efficient use of resources and prevent exploitation.

Restraints on private activities. Control of monopoly & big business.

Development of public enterprises as an alternative to private

enterprises to ensure competitive dualism.
Maintenance of a proper socio-economic infrastructure.

Ensure the private investment and production in the industry meets the
socio-economic objectives of the government.
Ensure the efficient use of resources and prevent exploitation.

Control of monopoly & big business.

Development of public enterprises as an alternative to private

enterprises to ensure competitive dualism.
2. GOVERNMENTS AS PROMOTER OF BUSINESS

Providing finance to the industry.(through developmental banks etc.)

Granting incentives. Creating infrastructural facilities for industrial
growth & investment.
Promoting development in No Industry Districts Establishing District
Industrial Centres for assisting the development of small industries.
Providing finance to the industry.(through developmental banks etc.)

Granting incentives.

Creating infrastructural facilities for industrial growth & investment.

Promoting development in No Industry Districts Establishing District
Industrial Centres for assisting the development of small industries.
4. GOVERNMENT AS THE PLANNER
Indicating priorities through the Five Year Plans for the sectoral
allocation of resources.
Ensuring the equal distribution of scare resources to all the sectors
in order to avoid clashes.
Indicating priorities through the Five Year Plans for the sectoral
allocation of resources.
Ensuring the equal distribution of scare resources to all the sectors
in order to avoid clashes.
GOVERNMENT AS AN ENTREPRENEUR
In many countries, the government also plays the role of an
entrepreneur.
It means that the business houses are established and operated by the
government and the risk is also born by the government.
The reasons for the growth of state owned Enterprises are as follows:

Absence or dearth of private entrepreneurship

Neglect of certain non-profitable sectors by the private
entrepreneurs
Monopolies in certain sectors and the resultant exploitation of
consumers
Social political idealogies
The true entrepreneurial role of the government is when the
government decides to take a lead in starting a major new industry
in the absence of private entrepreneur.
LEGAL FRAMEWORK FOR BUSINESS IN INDIA
In India the framework for governance of business environment flow
from enactments passed by the legislature/assembly under the federal
structure under whose domain it entails.
The union and the states, both legislate on subjects as laid out in the
Indian Constitution.
This legal framework created through Indian Constitution play a very
important role in the country's overall progress and economic
development
These enactments form the backbone of the administrative executive.

With the changing circumstances and environment these enactments are

amended from time to time.
To appreciate navigation of the nuances of a business legal environment
its understanding is mandated.
 BUSINESS REGULATION IN INDIA
I) Economic Regulations:
Economic laws of the country may be mapped broadly into:
Corporate Laws: Primarily the Companies Act, 2013 ("Companies Act")
and the regulations laid down by the Securities and Exchanges Board of
India ("SEBI");
Operational and contract laws as Industries (Development and
Regulation) Act, 1951; Indian Contract Act, 1872, Sale of Goods Act,
1930, Specific Relief Act, 1963, Competition Act, 2002.
Exchange Control Laws: Primarily the Foreign Exchange Management
Act, 1999 ("FEMA") and numerous circulars, notifications and press
notes issued under the same;
Sector Specific Laws: Specific Laws relating to Financial Services
(banking, non-banking financial services), Infrastructure (highways,
airports) and other sectors:
Intellectual property laws; and, Tax framework;
II) LABOUR REGULATIONS
General: Another important aspect of legislations is the industrial relations,
which involves various aspects of interactions between the employer and
the employees; among the employees as well as between the employers.
In such relations whenever there is a clash of interest, it may result in
dissatisfaction for either of the parties involved and hence lead to industrial
disputes or conflicts.
Wages and fringe benefits vary considerably by industry, company size and
region. Wages have two components: the basic salary and the dearness
allowance, linked to the cost-of-living index. A mandatory bonus
supplements wages.
The GoI sets the national floor minimum wage and different industries-
specific higher minimum wages. By law, women are entitled to
remuneration equal to men for performing equivalent work.
Further, fringe benefits are provided by an employer to his employees
(including former employees) for their employment such as inter alia any
privilege, service, facility or amenity directly or indirectly.
 Share options are also offered to employees especially in the information
technology sector.
Retrenchments and lay-offs of workmen require full explanation to and
prior approval from state governments.
There are several legislations which regulate the conditions of
employment, work environment and other welfare requirements of
certain specific industries. These enactments deal with factories and
workshops; mines and minerals; plantations; shops and establishments as
well as transportation.
Some of the major legislations are:-
The Industrial Disputes Act, 1947 is the main legislation for investigation
and settlement of all industrial disputes.
The Factories Act, 1948 is the umbrella legislation enacted to regulate the
working conditions in factories including the working time of workers.
The Shops and Establishments Act, 1953 was enacted to provide statutory
obligation and rights to employees and employers in the unorganised
sector of employment, i.e. shops and establishments
 Bombay Shops and Establishments Act, 1948 regulates within its
jurisdiction conditions of work and employment in shops, commercial
establishments, residential hotels, restaurants, eating houses, theatres,
other places of public entertainment and other establishments. Provisions
include Regulation of Establishments, Employment of Children,Young
Persons and Women, Leave and Payment of Wages, Health and Safety etc.
The Trade Unions Act, 1926, Indian law recognizes the existence of trade
unions.
The Employees' State Insurance Act, 1948 (hereinafter "ESI Act") deals
with insurance of employees in India.
Minimum Wages Act, 1948 provides for minimum statutory wages for
scheduled employment.
Workmen's Compensation Act, 1923; provides for the payment of
compensation by certain classes of employers to their workmen for injury
by accident.
The Payment of Gratuity Act, 1972 provides for payment of gratuity to an
employee who has rendered continuous service for five (5) years or more.
 The Payment of Bonus Act, 1965 provides that every employee shall be
entitled to be paid a bonus by his employer in an accounting year in
accordance with the provisions contained in it, provided that such
employee has worked in the concerned establishment for not less than
thirty (30) working days during the course of that year.
Employees Provident Fund: India has a specific legislation dealing with the
provident fund. Under the Employees Provident Funds and
Miscellaneous Provisions Act, 1952 ("PF" Act), the employer has to set up
a compulsory contributory fund for the future of the employee, which has
to be paid to him following his retirement, or is paid to his dependents in
the case of employee's premature death.
The Maternity Benefits Act, 1961 provides for maternity benefits to
women working in any establishment for the period of her actual absence,
that is the period immediately preceding the day of her delivery, the actual
day of her delivery and for a period of six weeks immediately following
the day of her delivery, miscarriage or medical termination of pregnancy.
The Equal Remuneration Act, 1976 provides for equal remuneration to
men and women and prevents discrimination.
 The Plantation Labour Act, 1951 provides for the welfare of plantation
labour and regulates the conditions of work in plantations.
The Mines Act, 1952 contains provisions for measures relating to the
health, safety and welfare of workers in the coal, metalliferous and oil
mines.
The Contract Labour (Regulation & Abolition) Act, 1970 was enacted to
regulate employment of contract labour
The Motor Transport Workers Act, 1961 was enacted to provide for the
welfare of motor transport workers and to regulate the conditions of
their work
Child Labour (Prohibition And Regulation) Act, 1986

The Apprentices Act,1961

III) TAX FRAMEWORK
Taxation Structure and Incentives

India has a federal structure and a well-developed three-tier tax

framework, comprising of taxes levied by the Central
Government, the State Governments and the Local Authorities. Power
to levy taxes and duties is distributed among the aforesaid three tiers, in
accordance with the provisions of the Constitution of India
1. DIRECT TAXES 2. INDIRECT TAXES
Corporate Taxation Excise duty
Capital Gains on share transfer Customs Duty
Dividend Distribution Tax Service Tax
Fringe Benefits Tax VAT or CST
Loss relief
IV)ENVIRONMENT
The Indian Fisheries Act, 1897

The Merchant Shipping Act, 1970

The Air (Prevention and Control of Pollution) Act, 1981

The Water (Prevention and Control of Pollution) Act, 1974

The Indian Forest Act, 1927 - and Amendment, 1984: It was enacted to
consolidate the law related to forest, the transit of forest produce, and
the duty leviable on timber and other forest produce.
The Wildlife Protection Act, Rules 1973 and Amendment 1991

The Environment (Protection) Act, 1986

The Biological Diversity Act, 2002

V) CONSUMER LAWS
The central consumer legislation is the Consumer Protection Act, 1986
(hereinafter "CPA").
The CPA is a comprehensive piece of consumer legislation enacted for
the better protection of the interests of consumers by providing for the
establishment of consumer councils and other forums for the settlement
of consumer disputes.
VI) CORPORATE BANKRUPTCY LAW AND WINDING UP OF
COMPANIES
In order to wind up or close a business organisation, an entrepreneur
must take into account the interests of its employees, creditors,
shareholders, etc.
Hence he/she must follow the basic regulatory requirements of the
country. In India the revival of Industrial companies is governed under
Sick Industrial Companies (Special Provisions) Act, 1985
VII) INTELLECTUAL PROPERTY LAWS
Intellectual property rights as a collective term includes the following
independent IP rights which can be collectively used for protecting
different aspects of an inventive work for multiple protection
i) Patents - Patent Act, 1970
ii) Trademarks-Trademarks Act, 1999
iii) Copyright- Copyright Act, 1957
vi) Information Technology Act, 2000
v) Designs Act, 2000
ECONOMIC ENVIRONMENT
Economic Environment refers to all those economic factors, which have a
bearing on the functioning of a business.
Business depends on the economic environment for all the needed inputs.
It also depends on the economic environment to sell the finished goods.
Naturally, the dependence of business on the economic environment is
total and is not surprising because, as it is rightly said, business is one unit
of the total economy.
The economic structure and rates of growth across the states in India are
markedly different, with significant disparities in income per capita
growth as well as sector-specific performance.
The high-income states have typically led the Indian growth story with
their high growth rates, while regional inequality continues to increase.
This paper surveys the literature and offers its own assessment of the
drivers of change.
 The Economy of India is the seventh-largest in the world by nominal
GDP and the third-largest by purchasing power parity
The following factors constitute economic environment of business:

(a) Economic system (b) Economic planning

(c) Industry (d) Agriculture
(e) Infrastructure (f) Financial & fiscal sectors
(g) Removal of regional imbalances (h) Price & distribution controls
(i) Economic reforms (j) Human resource
(k) Per capita income and national income
An economy of a country consists of three sectors: Primary sector
includes agriculture, mining, fishing etc., and it is generally called
agricultural sector. Secondary sector includes all kinds of industries both
large as well as small and it is generally called industrial sector. Tertiary
sector includes services like transport, banking, insurance Public
administration, defense etc., It is also called as service sector.
ECONOMIC POLICY: APPROACH
Since independence (1947) till almost late eighties followed a socialist
inspired approach- strict govt. control over -private sector participation,
foreign trade and FDI (Approach-import substituting rather than export
promoting)
Indias low average growth rate ( 3%) from 1947-80 was referred as
Hindu rate of growth, because of the unfavorable comparison with the
other Asia countries, especially the East Asian Tigers.
A period of import tariff, export taxes, quantitative restrictions,
approvals needed for 60% of new FDI in the industrial sector.
FDI averaged only $200M between 1985-1991.
In 2004, net FDI inflow was about 7-8 USD bn. (China, 52 USD bn)
A large percentage of the capital flows consisted of foreign aid,
commercial borrowing and deposits of non resident Indians.
Largely and intentionally isolated from world markets.

Late 80s: the govt. led by Rajiv Gandhi eased restrictions on capacity
expansion for incumbents, removed price control and reduced corporate
 Phase of high growth with high fiscal deficit and worsening current
account
Collapse of soviet union a major trading partner, first Gulf war causing
spike in oil prices led to major balance of payment crisis with the prospects
of defaulting on its loan.
Prime Minister Narasimha Rao with Finance Minister Manmohan Singh
initiated the economic liberalization of 1991.
Reforms did away with license Raj in investment, industrial and import
licensing-ended many public monopolies, introduced automatic approvals
of FDI in many sectors.
Existence of Dualistic or Dual sector: In India both ancient and modern
sectors exist side by side. We find ancient wooden ploughs as well as the
modern tractors. Similarly in industries old and obsolete machines and
modern sophisticated machines.
Under utilization of resources: though India is rich in natural resources like
land, minerals, forests, wild life, power, fisheries etc., but they are not
properly utilized due to shortage of capital, low level of technology and
technological skill.
ECONOMIC CONCEPTS
SOCIALISM
Socialism is a type of economic system in which the state totally owns or
controls the resources and means of production.
The means of production refers to the tools, technology, buildings, and
other materials used to make the goods or services in an economy.
The basic stress is on the use of these resources for the overall welfare of
all members of the society.
Socialism is an economic system in which the means of production are
socially owned and used to meet human needs, not to create profits.
Under the socialistic system the workers in sectors like industry,
agriculture and transport become the joint owners of the means and
results of production.
As the non-human resources of production are mainly owned by the state
or the society it ensures better allocation and utilization of these resources,
elimination of unemployment and class struggle.
 It also reduces the inequality in income. A primary goal of socialism is
social equality and a distribution of wealth based on one's contribution to
society
The decisions as to how much to produce, which methods of production
to employ and for whom to produce are taken by the planning authority.
That is why a socialist economy is also called a planned economy. Such
economies are China, Cuba, Vietnam, and North Korea.
Features of Socialism:

(1) Public Ownership: There is collective ownership whereby all mines,

farms, factories, financial institutions, distributing agencies (internal and
external trade, shops, stores, etc.),means of transport communications,
are owned, controlled, and regulated by government departments and
state corporations. A small private sector also exists which are carried on
in the villages by local artisans for local consumption.
(2) Central Planning: A socialist economy is centrally planned which functions
under the direction of a central planning authority. It lays down the
various objectives and targets to be achieved during the plan period.
3. Definite Objectives: A socialist economy operates within definite
socio-economic objectives. These objectives may concern aggregate
demand, full employment, satisfaction of communal demand, allocation of
factors of production, distribution of the national income, etc.
4. Freedom of Consumption: Under socialism, consumers sovereignty
implies that production in state- owned industries is generally governed
by the preferences of consumers, and the available commodities are
distributed to the consumers at fixed prices through the state-run
department stores.
5. Equality of Income Distribution: In a socialist economy, there is
great equality of income distribution as compared with a free market
economy. The elimination of private ownership in the means of
production, private capital accumulation, and profit motive under
socialism prevent the amassing of large wealth in the hands of a few rich
persons.
6. Planning and the Pricing Process: The pricing process under
socialism does not operate freely but works under the control and
regulation of the central planning authority
CAPITALISM
Capitalism is an economic system in which each individual in his capacity
as a consumer, producer, and resource owner is engaged in economic
activity with a large measure of economic freedom.
Individual economic actions conform to the existing legal and institutional
framework of the society which is governed by the institution of private
property, profit motive, freedom of enterprise, and consumers
sovereignty.
All factors of production are privately owned and managed by individuals.

The raw materials, the machines, the firms, and the factories are owned
and managed by individuals who are at liberty to dispose of them within
the prevalent laws of the country.
Individuals have the freedom to choose any occupation, and to buy and
sell any number of goods and services.
Features of Capitalism:
1. Private Property: Capitalism thrives on the institution of private property.
It means that the owner of a firm or factory or mine may use it in any
manner he likes. He may hire it to anybody, sell it, or lease it at will in
accordance with the prevalent laws of the country
2. Profit Motive: The main motive behind the working of the capitalist
system is the profit motive. The decisions of businessmen, farmers,
producers, including that of wage-earners are based on the profit motive.
3. Consumers Sovereignty: Under capitalism, the consumer is the king. It
means freedom of choice by consumers. The consumers are free to buy any
number of goods they want. Producers try to produce variety of goods to
meet the tastes and preferences of consumers.
4. Freedom of Enterprise: Freedom of enterprise means that there is free
choice of occupation for an entrepreneur, a capitalist, and a labourer. But this
freedom is subject to their ability and training, legal restrictions, and existing
market conditions.
5. Competition: It implies the existence of large number of buyers and sellers
in the market who are motivated by self-interest but cannot influence market
decisions by their individual actions.
MIXED ECONOMY
In a mixed economy there exist a mixture of government control and free
enterprise. It can also be defined as a form of economy where the elements
of capitalist economy as well as the social economy can be found.
Most developed countries of the world have mixed economy. Mixed
economy is also known as dual economy.
In some areas of a mixed economy the government can even have a
monopoly. Typically in mixed economies, the government runs things like
postal services, railways and health care services.
The influence of the government is considerable even on the industries
that are not owned or run by the government, in the form of regulations
and taxes. It is very difficult to define the economy of a country as socialist,
capitalists or a mixed one.
In a mixed economy we see the presence of the private economy freedom
along with the centralized planning having a common goal of avoiding the
problems that are linked with socialism as well as the capitalist system of
 In the system of a mixed economy, freedom in economic activities is
influenced by the licensing policies and regulations of the government.
Mixed economy allows the participation of private entrepreneurs in the
field of production and in a competitive environment with the objective of
making profit. As against some of the features of socialism, mixed
economy includes both public and private ownership in production with a
view to maximize the welfare of the society.
There is mixture of private and public ownership of the means of
production and distribution. Some decisions are taken by households and
firms and some by the planning authority. All developing countries like
India are mixed economies.

Features of Mixed Economy:

Public Sector: The public sector is under the control and direction of
the state. All decisions regarding what, how and for whom to produce are
taken by the state. Public utilities, such as rail construction, road building,
canals, power supply, means of communication, etc., are included in the
public sector. They are operated for public welfare and not for profit
motive.
 Private Sector: There is a private sector in which production and
distribution of goods and services are done by private enterprises. This
sector operates in farming, plantations, mines, internal and external trade,
and in the manufacture of consumer goods and some capital goods. This
sector operates under state regulations in the interest of public welfare
Joint Sector: A mixed economy also has a joint sector which is run jointly
by the state and private enterprises. It is organised on the basis of a joint
stock company where the majority shares are held by the state.
Cooperative Sector: Under a mixed economy, a sector is formed on
cooperative principles. The state provides financial assistance to the people
for organising cooperative societies, usually in dairying, storage, processing,
farming, and purchase of consumer goods.
Freedom and Control: A mixed economy possesses the freedom to hold
private property, to earn profit, to consume, produce and distribute, and to
have any occupation. But if these freedoms adversely affect public welfare,
they are regulated and controlled by the state.
 SUNRISE SECTORS OF INDIA
1. INFORMATION TECHNOLOGY
The IT sector has been India's sunshine sector for quite some time now.
The industry has contributed considerably to changing India's image from a
slow developing economy to a global player in providing world class
technology solutions.
According to the Economic Survey 2014-2015, IT and TeS make up the
single largest contributor to India's Services exports.
The Economic Survey 2014-15 says the IT and ITeS sector including
Business Process Management (BPM), continues to be one of the largest
employers in the country, directly employing nearly 35 lakh people.
Recognizing the need for greater penetration of IT Services domestically,
the Survey notes that the government's "Make in India" mission has
included IT and BPM among the 25 focus sectors.
Recognizing the need for greater penetration of IT Services domestically,
the Survey notes that the government's "Make in India" mission has
included IT and BPM among the 25 focus sectors.
2. TELECOM
India's telecom story is only getting better.
India is currently the worlds second-largest telecommunications market
and has registered strong growth in the past decade and half.
The Indian mobile economy is growing rapidly and will contribute
substantially to Indias gross domestic product
India already has nearly 850 million mobile phone subscribers, with a 15%
smart phone penetration.
The Telecom Regulatory Authority of India (TRAI) too is targeting a 10-
fold increase in broadband subscribers to100 million.
The liberal and reformist policies of the Government of India have been
instrumental along with strong consumer demand in the rapid growth in
the Indian telecom sector.
The government has enabled easy market access to telecom equipment
and a fair and proactive regulatory framework that has ensured availability
of telecom services to consumer at affordable prices.
The deregulation of FDI norms has made the sector one of the fastest
growing and a top five employment opportunity generator in the country.
3. HEALTHCARE
The Indian healthcare sector is expected to register a compound annual
growth rate (CAGR) of 22.9% during 2015-20
Rising income level, greater health awareness, increased precedence of
lifestyle diseases and improved access to insurance would be the key
contributors to growth.
The private sector has emerged as a vibrant force in India's healthcare
industry, lending it both national and international repute. It accounts for
almost 74% of the countrys total healthcare expenditure.
Telemedicine is a fast-emerging trend in India; major hospitals (Apollo,
AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and
entered into a number of public-private partnerships.
Presence of world-class hospitals and skilled medical professionals has
strengthened Indias position as a preferred destination for medical tourism.
The GOI is also providing policy support in the form of reduced excise
customs duty, exemption in service tax, to support growth in healthcare.
Investment in healthcare infrastructure is set to rise, benefiting both 'hard'
(hospitals) and 'soft' (R&D, education) infrastructure.
4. INFRASTRUCTURE
India's infrastructure growth has been exponential over the past decade.
Today, we are the fourth largest and probably the second-fastest growing
economy, with infrastructure being one of the cornerstones.
The infrastructure industry in India is highly fragmented and hence difficult
to judge its exact size and the jobs it generates each year in absolute terms.
However, be it roads and highways, railways, aviation, shipping, energy,
power or oil & gas, the Indian government and the various state
governments seem to making rapid progress resulting in significant
employment generation.
India is witnessing significant interest from international investors in the
infrastructure space. Many Spanish companies are keen on collaborating
with India on infrastructure, high speed trains, renewable energy and
developing smart cities
Indian aviation market is expected to become the third largest across the
globe by 2020, according to industry estimates. Indian Aviation Industry,
which currently accounts for 1.5 per cent of the gross domestic product
(GDP), has been instrumental in the overall economic development of the
5.RETAIL
The Indian retail industry has emerged as one of the most dynamic and fast-
paced industries due to the entry of several new players. It accounts for over
10% of the countrys GDP and around 8% of the employment.
India is the worlds fifth-largest global destination in the retail space.
Driven by income growth, urbanisation and attitudinal shifts Indias retail
market is expected to nearly double by 2020.
India is expected to become the worlds fastest growing e-commerce
market, driven by robust investment in the sector and rapid increase in the
number of internet users.
With the rising need for consumer goods in different sectors including
consumer electronics and home appliances, many companies have invested
in the Indian retail space in the past few months.
Amazon, Wal-Mart India, Lulu Group, Sbarro to name a few have initiated
huge investment in 2016. Adidas AG, has become the first foreign sports
company to get an approval to open 100% foreign-owned stores
The long-term outlook for the industry is positive, supported by rising
incomes, favourable demographics, entry of foreign players, and increasing