4. 1
POLITICS
1. POLI TICAL AS P ECTS
Independent since 1947, India is well known for its political stability. As the largest democracy in the
world, it is a federal republic with a parliamentary system based on universal suffrage and the existence of
special rights for certain castes. The federal Constitution was adopted in 1950, among the most detailed
constitution in the world, it proclaims the socialist and laic character of the State. Political life is
dominated by the Indian Congress Party (first minister: Nehru). The Parliament of the Union includes two
Chambers: the Chamber of States (Rajya Sabha, Upper House) and the Chamber of the People (Lok Sabha,
Lower House). The leader of the majority party in Lok Sabha is traditionally appointed Prime Minister. The
President of the Republic has a symbolic role. The States’ skills concern in particular the justice, the police,
the economy or the education. The priority of New Delhi’s foreign policy is the conservation of stability
and regional peace to insure its development’s conditions. For example, the Prime Minister Singh made a
commitment in favor of the improvement of the relations with Pakistan.
The main political issues in India are about tensions between centralization and separatist
tendencies, community tensions and inequalities of income. The asymmetric development of India also
generated a social climate potentially explosive which put political stability in danger.
The last two years (2011&2012) were marked by a vast movement of demonstrations against
corruption. The Lokpal Bill, a proposed anti-corruption law in India, "seeks to provide for the
establishment of the institution of Lokpal to inquire into allegations of corruption against certain public
functionaries and for matters connecting them".
2. M ON E TARY P OLICY
India set up an orthodox monetary policy, with the Indian Central Bank (Reserve Bank of India –
RBI) which is very watchful on its monetary policy. Its objectives are various : monetary stability,
economic growth and exchange rate control.
The rupee is in a system of fixed exchange rate with the US dollar. For several years, the rupee is in a band
of 7 % in + 7 % with regard to the exchange rate of the US dollar. The country generates an inflation rate
from 2 to 3 points superior to our economies.
6. 3
1. I N DU STRIAL TR EN D
Two steps in industrial trend of India can be identified:
1. In a first step, the low cost of labor attracts low-end production of foreign firms. The low cost
isgenerallyassociatedwithlowqualificationof the workforce.
2. In a second step, the adjustment of income permitted by the offshoring of foreign companies
leadsthe countryto lose thiscompetitive advantage inlaborcosts.
Unsophisticatedproductionstendtoleave the country.Sotheyhave togo upmarket
to remainattractive andcontinue itsdevelopment.Upmarketrequiresmore skilled
laborforce.
2. IND IA & IC T
According to the OECD, ICT industries include producers, distributors and ICT services.
The ICT promotion is a key challenge for India to attract companies, promote growth thanks to
exportation and develop territories.
Indian companies are known worldwide services like Wipro, Infosys, HCL Technology, TCS and Tata
Consulting. These companies are often reduced to outsourcing; it also represents 7% of India's GDP in
2011. However, they arelarge enough to not be redeemed or be likely to buy other companies.
Advantages of India are:
1. Specializedintopof the range IT production
2. Firstcountry inoffshore computerservices
3. Low wages
4. Good level of Englishandmathematics
0
10
20
30
40
50
60
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Share of ICT in exportations (%)
services exportations
goods exportations
8. 5
Positive externalitiesof national companies(InfosysandWipro) andforeignones(Capgemini)
SOCIAL
According to the social aspect, we will study the different points such as education, health, trends, work
and the mobility of people.
1. EDU CATI ON
Regarding education, India has a real lack of resources due to the different mentalities and the different
cultures. There is a high rate of illiteracy; the adult literacy rate in 2006 was 62.8%. There is a gap
between men and women, between urban and rural zones and also between casts. Few people are
registered in higher education schools. Though, in Pune, some Masters in ICT are offered to students.
ICTN are close to universities so it’s attractive. In India, English is the second official language spoken with
the Hindu. It is spoken by a minority of the population, between 8 and 11%. This is an opportunity for
India to be global. So to sum up, we are in a country with a lot of inequalities. This fact explains why they
exported their goods.
2. DE M OGRAP HY
Demography is a sensitive topic in India. In fact, India represents 17,5 % of the
global population. It might become the most populated country in 2025 and this
will trigger overpopulation problems. There is also a lack of women. India is a
young country (i.e. Population age structure). The life expectancy was 64,2 years,
in 2005.
3. H E ALTH
A decrease of Maternal mortality occurred between 1990−2010 which is positive. This is
part of the eight United Nations Millennium Development Goals that Nations agreed to
try to achieve by the year 2015. India has inequalities in health services, especially
between rural and urban population. People use improved water but are still lacking
access to improved sanitation. In Pune, there are some inequalities in drinkable water
with new infrastructures compared to unsanitary existing ones. It’s also unbreathable in
9. 6
Pune because of the traffic due to the organization of the city. The mobility of people in India appears
with rural to urban migration. In Maharashtra, there is a quick urbanization in a limited space, a lack of
traffic infrastructures in Pune so it’s hard to get about in the city and it’s very polluted. As a consequence,
the inhabitants have to wear a mask.
The living conditions in India and in Maharashtra are quite bad. Poverty and social division are present. In
India, 29,8% of the population lives below the national poverty line in 2010. In the State of Maharashtra,
40% of the population lives in slums. 57% of the population lives in rural zones and work in agriculture.
4. JOBS I N IN DIA
Looking at jobs in India, the employment rate in 2011 for the population aged 15 and above is 53.6%. The
unemployment rate of labor force is of 3.6%. There has been a decrease of development in agriculture
and an increase in industry and services. There is a low qualification of working labor and low wages.
Indian workers earn less than Chinese workers (three times less) minimum 81€/month. The income of the
Indian engineer is increasing but still lower than in other countries. To sum up, there is a gap between
high qualified workers and low qualified ones. Informal economy is also very present in India.
TECHNOLOGY
For the technological part, we will have a look at the patent issue in India, the power and communication
facilities issues in IT Parks.
1. PATE N TS
India is a developing country. This sentence is important to understand the patent issue in India. The
country is trying to host as many patent from non-resident applicants as it can, in order to make
technology transfer in the future.
10. 7
Since its independence, New Delhi has complied with international standards for industrial protection
adopted by developed countries, in order to facilitateFDI and technology transfer. The central power has
been facilitating the process for non-resident companies.
The number of non-resident patent has been increasing through the years. However, the long-term aim is
to increase the amount of resident patent, which is the proof that India is developing its own economy
(which is already an engagedprocess).
The indian government has devoted more than 34 Million dollar in the industrial protection
modernization. By protecting the resident patent, India takes careof its future.
2. POWE R I SSUE
Power supply is a major issue in India. In December 2011, over 300 million Indian citizens had no access to
electricity. The vast majority of the country suffers from power outage due to an inefficient power grid. In
2011, a major grid failure made nearly 500 Million people live in the dark for two days.
Electricity is vital for the IT sector. Thus, all IT Parks have fueled-powered backup generators.
3. COM M U NICATION S Y STEMS
The communication systems are the key to the settlement of an IT Park. Many Indian don’t have access to
the Internet, but in developed cities like Pune, it is vital for all the companies integrated in globalization.
Cities have been developing through a well-known scheme: industrial parks with all the necessarily
network facilities near slum without proper communication system.
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
1997
1999
2001
2003
2005
2007
2009
2011
patents New patentsin India, per year
Resident
Non resident
and abroad
11. 8
The challenge is the democratization of these communication systems through the whole city. This is the
new trend : ICT has become the first recruiter in the country. It is very attractivefor young people who
graduated from engineer schools in India. There are more and more internet users and connected people
(but as we saw, still less than in Asia-Pacific and the rest of the world).
(orange: India)
ENVIRONMENTAL
For the environmental part, we will have a look at the weather and climate, global warming, recycling,
green energies and technologies, traffic movements and the regulation in favor of the environment.
1. WE ATHE R & CLI M ATE
Weather and climate in India are composed of monsoon between June and September, rapid flood,
erosion, extreme and tropical temperatures. In the valleys, summer temperatures are between 32°C -
38°C. There are some unpredictable precipitations which have direct consequences in agriculture.
Nevertheless, Pune has not such a bad climate. It says that Inhabitants of Mumbai used to come to Pune
during the monsoon because there is less rain and it’s also less dry.
2. GLOBAL WAR M I NG
India is a vulnerable country regarding global warming. In fact, the consequences of this effect are already
showing up and will trigger an increase of diseases, droughts, floods and hurricanes (CARE international).
The sea level will rise and the littoral will be affected. Pune is not a sensitive city regarding that problem
but it might have to deal with migrations. Those movements of population and rural exodus, some cities
won’t be able to deal with. There will be an impact in food crops, with reductions of up to 40 per cent by
the 2080s. Priority should be given to help small farmers adjust to such conditions and to neglected areas
like coastal agriculture. Some NGO like Earth Day Network lead an action against it. For instance, they
12. 9
implemented a communication campaign about one million of sustainable gestures for the planet.
Nevertheless, there are no real climatic decisions for investors regarding energy consumption. They also
construct roads with no space for walkers and decide for the urban development without considering
sustainable development (long distance between work and home).
3. R E CY CLING
Recycling is an issue in India. In fact, since ages, recycling for Indian people is a lifestyle. They keep things,
reuse them, recycle them. One of the ancient Indian texts, called Isopanisad, says that: « As everything is
controlled by God in the universe, we should only take what is necessary and leave the rest for those for
who it is meant to be ». This describes preservation of the environment. So it’s in their culture, but this
lifestyle has been replaced by urban one and other materials like plastic. And so from one side, poor
people look for old materials in trash, they are like binners and sell what they find to recyclers, and on the
other side, nothing implemented by the government to deal with garbage in cities. In urban areas, they
just pile up trash instead of using it as an energy source in cities. There is nor global system for collecting
trash, neither transportation of garbage to final users or recycling firms. India recycles 200 000 tons of
trash a year but it’s not an example. It pollutes soils and is dangerous for health of the binners who
manipulate metals. India is the garbageof the world.
4. GR E E N TE CHNOLOGIES
According to green technologies, « India should retool its economy to run on renewable energy, creating
millions of jobs and raising the standard of living », says Anil K. Rajvanshi. There is a real opportunity here.
India has an energetic potential. Agriculture residue could be used for biomass and could produce energy.
India could produce its own energy and the shortfall could be made up through solar and wind energy.
India is the first Asiatic producer of wind energy. It has solar panels and millions of wind turbines.
Tata, the biggest Indian electrician is looking towards sustainable energies. India is the first country to
have a Ministry of new and sustainable energies since 1992. Moreover, the government announced that it
will help with measure in favor of sustainable development.
Household construction is part of the environment. The challenge for India will be to conciliate traditional
methods with technological innovations. In Pune, the glass towers constructed for ITC are putting a gap
with the slums close to them. There is also a sociospatial segregation as the new buildings have all
facilities. Those constructions are close to the roads going to ICT but farmers sell their arable lands to
promoters.
5. TR AFFI C M OVEM ENT
The traffic movement triggers polluted air, congestion, a long time to go from one place to another and
sound and olfactory pollution.
13. 10
6. EN VI R ONM ENTAL R EGULATION
There is a regulation in favor of the environment; the Indian Minister wants the electricity for everyone.
The government cooperated and participated to the Kyoto protocol. Nevertheless, there is no regulation
regarding recycling or a rule protecting human rights and environment rights in that topic or in the mines
one.
LEGISLATIVE
The Indian Parliament legislates for defense, Foreign Affairs, currency, tax revenue, railway, telephone,
etc. States make the laws on the police, public health, communications (with Control of the Union over
States in certain case), agriculture, lotteries, taxes on entertainment and wealth, the tax sale etc. They
legislate together on energy, press’ freedom, criminal law, family law, trade unions, price control, etc.
1. NOR M S
a. India:
National Telecom Policy 1994 & New Telecom Policy 1999
Broadband Policy 2004
Personal Data Protection Bill 2006 (lapsed)
Information Technology Act of 2008 (certain provisions since 2011)
The last data protection bill, The Personal Data Protection Bill 2006 , introduced in Parliament on 8
December 2006, has now lapsed. On 18 October 2010, the Department of Personnel and Training,
Government of India, published an approach paper for legislation on privacy. More recently, there have
been news reports suggesting that a 'Right to Privacy' Bill will be introduced in Parliament in the
upcoming monsoon session
On 11 April 2011, the Indian Ministry of Communications and Technology published rules implementing
certain provisions of the Information Technology Act of 2008 dealing with: (a) protection of sensitive
personal data: security practices and procedures that must be followed by organizations dealing with
sensitive personal data (Data Privacy Rules); (b) due diligence to be observed by intermediaries; and (c)
guidelines for cybercafés.
Sensitive Data is broadly defined to include data obtained by any method, including lawful contract.
Foreign corporations using computer equipment in India that collects, processes, stores or transfers
Sensitive Data must comply with the Data Privacy Rules.
b. Maharashtra:
14. 11
Laws : First IT Policy in 1998
IT and IT-Enabled Services (ITES) Policy in 2003
IT & ITES POLICY 2009 : includes Promotion of ‘Green IT’, Infrastructuraland fiscal benefits
& Human Resources development
Acts: Prevention of Ex-Communication Act, Bombay 1949
Rajiv Gandhi Science and Technology Commission Act, 2006
Maharashtra SEZ Act 2006
Maharashtra Right to Information (First & Second Amendment) Rules, 2012
c. SEZ :
Designed by the Ministry of Commerce, the law on Special Economic Zones was promulgated in 2005. It
goes further than the previous and aims to establish industrial zones on thousands of acres. These areas
should attract investment to the tune of one billion rupees (about 15 million Euros), including 250 million
in foreign direct investment. While in China the Government remains the owner of the SEZs, which are
developed by the private sector, in India the SEZS are developed and owned by the private partner. SEZs
enjoy many exemptions of taxes, at the State and central levels, and have access to energy and water free
of charge or at very low rates. The State supports the construction of the roads connecting the SEZs to
major cities nearby. The regulations are simplified for the establishment of production units and a large
number of financial services.
Special Economic Zones seriously undermine the sovereignty of local institutions because they work as an
autonomous authority. The SEZ’s Development Commissioner, appointed by the Government
Commissioner, has all the powers concerning the infrastructure and the rights of workers. The developer
of the SEZ may impose the population living inside for basic services. The SEZ is responsible for internal
security, high walls are erected around the site, and the entry is subject to authorization.
Govt. of Maharashtra SEZ Policy issues are:
● Environment: theMaharashtra Pollution Control Board issues the clearances and the no
objection certificates for the administrative authority supervising the SEZ. The projects and
activities within the scope of the Environmental Impact Assessment Notification, 1994 requires
must acquire environment clearance from the Central Government of India's, Ministry of
Environment and Forest. (IT is not one of them) The State Government of Maharashtra is
empowered with the allotment of environment clearance for the activities and projects in
agreement with the Department of Environment's Government Resolution of 1997.
● Water Supply: Theadministrative authority of the SEZ assures the provision of abundant water
supply in the special economic zone
● Power Supply: Theadministrative authority of the SEZ assures the uninterrupted power supply
for the manufacturing units in the special economic zones. The State Government of Maharashtra
has also put forward the provision of setting up of independent power production units within
the special economic zones by the joint venture organization and the public sector units for the
15. 12
purpose of generating power for the particular units. The administrative authority of the SEZ also
has stand by measures pertaining to the power supply in case of a shut down. The independent
power producers also have the access the grid to draw in power at stand by situations by a
special agreement with the Maharashtra StateElectricity Board (MSEB).
● Taxes, duties, local taxes levied by the StateGovernment of Maharashtra: The special economic
zone is exempted from all kind of taxes levied by the State Government of Maharashtra which
include Purchase Tax, Cess, Sales Tax, Octroi, etc. pertaining to the supply of services and goods.
They arealso exempted of local Taxes.
● Registration of SSI and IT Enabled Services: The administrative authorities are empowered to
grant permanent and provisional registration for the small-scale industry and information
technology enabled service units.
● Law and order: The State Government of Maharashtra would be taking appropriate and
undivided measures both for the proper maintenance of law and order within the special
economic zones.
Resistance movements against SEZs have arisen through the India:, as Raigadin Maharashtra.
SEZs in Pune : Rajiv Gandhi InfoTech Park, Magarpatta City, Eon Free Zone, Kharadi Knowledge Park)
2. CON TR ACTS R IGHTS
India has not signed the Vienna Convention for international contracts.
3. H E ALTH & SE CU RITY AT WOR K I N IN DIA :
India has no general legislation concerning the safety and health at work. Three main laws : the law of
1948 on factories, the law of 1952 on mines and the law of 1986 on the safety(security), the health and
State Basic and
VDA/Special
Allowance
No. of
Minimum
Wages
Lowest Minimum Wage
Rate(per day), occupation and
date With Effect From(wef)
Highest
Minimum Wage
Rate(per day)
Remarks
Maharasht
ra
(Special
Allowance)
485 103.67
(Un-skilled workers and
peon/watchmen in card-board
box industry)
478.57
(Manager in
Powerlooms)
Minimum wage/day
calculated by dividing
monthly Minimum
wage by 30 days
16. 13
the well-being of the dockers. A bill on the safety(security) of the workers of the construction is in the
course of elaboration. The law on factories, initially adopted in 1881, aims, today still, only at the workers
of the registered(recorded) factories. Consequently, a large number of workers and employees are not
admitted to the advantage of the services(performances) of safety(security) and health in the work by
virtue of the law. This gap in the law, combined(organized) to the mediocre application of the existing
laws, explains the little satisfactory situation of the health to the work in the country.
Maharashtra IT law 2009 → 50% of the expenditure incurred for certification of CMM Level 2 upwards,
IS0 27001 for security and COPC and eSCM certification (limited to a maximum of
Rs. 5 lakhs) will be reimbursed to micro and small-scale IT units under PSI.
4. LOCAL P OWE RS
Pune has been thriving for years, thanks to public investment and local entrepreneurs. These
entrepreneurs have made groups (such as the InfoTech sub-comittee ) in order to make lobbying. They
have great power over the city development. In addition to that, we can see national lobbies, like the
National Association of Software and Services COMpanies (NASSCOM).
The city governance seems to be under the rule of many different actors : the mayor, the regional
governments, the lobbies… which develop the city by investing in basic facilities (sewage,
electrification,…).
The Jawaharlal Nehru National Urban renewal Mission (JNNURM) is a national program, whose aim is to
change the urbanization of Indian cities into a new scheme, has been in negociation with these urban
local bodies. Developing basic facilities in the city is a priority for many areas to benefit from the booming
economy of ICT sector.
17. 14
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