Economic and Social-Cultural environment in India (Essay Sample)

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Economic and Social-cultural environment in India
Introduction
Economic reforms and government efforts have lead to the development of diversified and potential markets in India for both local people and foreign investors including western firms. In the past, establishing a business was a complex and hard thing to do especially for foreigners. With new changes enacted by Indian government, the business industry has all together changed. In detail, the paper observes India’s current situation with regard to economic and social-cultural matters (Kaushik 12). It is categorized into two prime sections; the first part analyzes economic situation and past crisis witnessed in India. The latter part goes on to discuss social-cultural environment and how this influences foreign investors venturing in this country.
Part 1: Economic environment in India
The term economic environment implies external factors in an economy or market that either affects the business negatively or positively (Dyson 06). It entails microeconomic environment (within a business) and macroeconomic environment which focuses on the entire India’s Economy. Macroeconomic environment involves factors such as currency exchange rates, saving rates, recession, depression, unemployment and consumer confidence levels. Under this, the paper touches on:
* India’s exchange rates
* Balance of payments
* Inflation
* Payment rates
* Sectors of economy
The current statistics from CSO (Central Statistics Office) indicate that GDP growth for the year 2014/2015 is most likely to grow at a low rate (5%) as compared to 6% GDP growth rate for the year 2013/2014. The drop is witnessed due to lowered allied activities, agricultural and manufacturing activities (Kaushik 26). The per capita income which determines the current living standards of India Citizens has slightly increased as compared to the last five years.
Balance of payments
Currently, trade deficit has been reduced by 6.7% due to the fact there is an increment in country’s exports (Dyson 17). The huge deficit witnessed last was as a result of importing a lot of oil (over 120 M tones). Currently, it is noted that general balance of payment is positive compared to the recent past.
The currency
The accepted legal tender in India, Nepal and Bhutan is Indian Rupee. Currently, in comparison with US dollar and UK pound as at now, 1$= 62.18 Indian Rupee and 1 UK pound is equal to 96.72 Indian Rupee. The highest rupee banknote is 1,000 Rupee and the lowest coin is 25 paise. The central and recognized bank of Indian is RBI (Reserved Bank of Indian). This bank is actually headed and controlled by central government.
Global trade relations
Indian to large extent relies on internal market. The global merchandise trade constitutes of 2.8% of India’s trade while most of products imported are equipment, machinery and raw materials. Prominent partners of India include UAE, UK, US, Japan, China and EU. India’s major exports include minerals, iron core, gems, jewelry and petroleum. Sectors of Economy of India rely of Agricultural activities, industrial services, natural resources and baking and finance.
The economic crisis and its implications
The report released by WESP in 2013 hopefully shows the positive changes in the economy after global crisis erupted after four years. In India, reports indicate that its economy weakened further due to decelerated exports. It faced a number of key challenges such as persistent inflationary pressures, fiscal deficits and irrelevant policies. The report seems to curse poor and irrelevant policies seem to deviate from the cores of economy development (Kaushik, 23). Slow global growth implies it will hinder India’s economic growth negatively. India majorly depends on inflows of capital; the Euro crisis will negatively affect its economy.
Part 2: Social-cultural environment in India
Social-cultural environment are factors like consumption habits of Indians, languages, customs, and tastes& preferences affect the country’s economy. Remember these are practices, customs, belief and behavior existing in a certain population (Dyson 14). Before venturing into business, foreign investors investigate the social-cultural conditions. In general, social-cultural aspects include technological factors, attitude, religion, social responsibility, family, education, natural factor and demographic factors.
India is defined as a country with diverse religions, e...