ECONOMICS PROJECT

MADE BY: DIVYAE PATEL

SEMESTER: II (A)
ROLL NO.: 4
 INTRODUCTION TO INDIAN ECONOMY
The economy of India is a developing mixed economy. India has emerged as the fastest
growing major economy in the world and is expected to be one of the top three economic
powers of the world over the next 10-15 years, backed by its strong democracy and
partnerships.

Market size
India’s GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19.
India has retained its position as the third largest startup base in the world with over 4,750
technology start-ups.
India's labour force is expected to touch 160-170 million by 2020, based on rate of population
growth, increased labour force participation, and higher education enrolment, among other
factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.
India's foreign exchange reserves were US$ 405.64 billion in the week up to March 15, 2019,
according to data from the RBI.
Recent Developments
With the improvement in the economic scenario, there have been various investments in
various sectors of the economy. The M&A activity in India reached record US$ 129.4 billion
in 2018 while private equity (PE) and venture capital (VC) investments reached US$ 20.5
billion. Some of the important recent developments in Indian economy are as follows:

 During 2018-19 (up to February 2019), merchandise exports from India have
increased 8.85 per cent year-on-year to US$ 298.47 billion, while services exports
have grown 8.54 per cent year-on-year to US$ 185.51 billion.
 Nikkei India Manufacturing Purchasing Managers’ Index (PMI) reached a 14-month
high in February 2019 and stood at 54.3.
 Net direct tax collection for 2018-19 had crossed Rs 10 trillion (US$ 144.57 billion)
by March 16, 2019, while goods and services tax (GST) collection stood at Rs 10.70
trillion (US$ 154.69 billion) as of February 2019.
 Proceeds through Initial Public Offers (IPO) in India reached US$ 5.5 billion in 2018
and US$ 0.9 billion in Q1 2018-19.
 India's Foreign Direct Investment (FDI) equity inflows reached US$ 409.15 billion
between April 2000 and December 2018, with maximum contribution from services,
computer software and hardware, telecommunications, construction, trading and
automobiles.
 India's Index of Industrial Production (IIP) rose 4.4 per cent year-on-year in 2018-19
(up to January 2019).
 Consumer Price Index (CPI) inflation stood at 2.57 per cent in February 2019.
 Net employment generation in the country reached a 17-month high in January 2019.

Government Initiatives
The interim Union Budget for 2019-20 was announced by Mr Piyush Goyal, Union Minister
for Finance, Corporate Affairs, Railways and Coal, Government of India, in Parliament on
February 01, 2019. It focuses on supporting the needy farmers, economically less privileged,
workers in the unorganised sector and salaried employees, while continuing the Government
of India’s push towards better physical and social infrastructure.
Total expenditure for 2019-20 is budgeted at Rs 2,784,200 crore (US$ 391.53 billion), an
increase of 13.30 per cent from 2018-19 (revised estimates).
Numerous foreign companies are setting up their facilities in India on account of various
government initiatives like Make in India and Digital India. Mr. Narendra Modi, Prime
Minister of India, has launched the Make in India initiative with an aim to boost the
manufacturing sector of Indian economy, to increase the purchasing power of an average
Indian consumer, which would further boost demand, and hence spur development, in
addition to benefiting investors. The Government of India, under the Make in India initiative,
is trying to give boost to the contribution made by the manufacturing sector and aims to take
it up to 25 per cent of the GDP from the current 17 per cent. Besides, the Government has
also come up with Digital India initiative, which focuses on three core components: creation
of digital infrastructure, delivering services digitally and to increase the digital literacy.
Some of the recent initiatives and developments undertaken by the government are listed
below:

 In February 2019, the Government of India approved the National Policy on Software
Products – 2019, to develop the country as a software hub.
 The National Mineral Policy 2019, National Electronics Policy 2019 and Faster
Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME II) have also
been approved by the Government of India in 2019.
 Village electrification in India was completed in April 2018. Universal household
electrification is expected to be achieved by March 2019 end.
 The Government of India released the maiden Agriculture Export Policy, 2018 which
seeks to double agricultural exports from the country to US$ 60 billion by 2022.
 Around 1.29 million houses have been constructed up to December 24, 2018, under
Government of India’s housing scheme named Pradhan Mantri Awas Yojana (Urban).
 Prime Minister's Employment Generation Programme (PMEGP) will be continued
with an outlay of Rs 5,500 crore (US$ 755.36 million) for three years from 2017-18 to
2019-20, according to the Cabinet Committee on Economic Affairs (CCEA).
 PESTEL ANALYSIS OF INDIA
This PESTEL analysis of India aims to address some of the political, economic, social,
technological, environmental, and legal issues concerning the country.
Political environment of India
India is one of the most powerful countries in the world. It is the largest democracy in the
world and enjoys a relatively stable political environment. New Delhi is the capital of India.
India neighbours two powerful countries i.e. China and Pakistan. Other neighbouring
countries are Bangladesh, Myanmar, Nepal, Bhutan, & Sri Lanka.
Democratic will of the people reflected in the local and national elections is mostly respected
and accepted by the political parties and people in general. This political culture of tolerance
contributes immensely to maintain a stable political climate which is in fact a very important
factor to attract foreign direct investment (FDI). However, sporadic political unrest is not
very uncommon in India.
A major area of concern in India is corruption. It badly affects the country’s business and
political environment, posing a challenge to the country’s economic growth. Corruption
increases the cost of business operations and often affects foreign direct investment.
However, a growing public awareness and government initiatives are combating the
challenges of corruption.
Economic environment of India
According to the IMF 2017 economic forecast, India’s GDP is worth $2.4 trillion making it
the 7thlargest economy in the world by nominal GDP. The GDP will grow by 7.0% in FY18
which is expected to increase to 7.4% by FY20 (The World Bank Group, 2018).
The current corporate tax rate in India is 30% (as of February 2018). It is worth noting that
the country witnessed frequent corporate tax rate changes over the years. For example, the tax
rate in 2010 was 33.99%, while it reached an all time high of 38.95% in 2001 (Trading
Economics, 2018).
India is one of the top countries in many industries. For example, it is the 7th largest coffee
producing countries in the world (International Coffee Organisation, 2017). It is also one of
the top agriculture producing countries in the world.
India’s key exports are petroleum products, jewellery, pharmaceutical products, transport
equipment, machinery and readymade garments to name but a few. On the other hand, India
imports crude petroleum, gold and silver, electronic good, pearls and precious stones and
many other things. Some of the top trading partners of India are China, UAE, Switzerland,
Saudi Arabia, USA, and Qatar (Guardian News and Media Limited, 2016).
Social environment of India
India has a gigantic consumer market with a total population of approximately 1.2 billion.
Such a huge market is a great opportunity for multinational companies. No wonder why so
many multinationals are operating in India! India offers cheap labour and the labour force is
expected to reach 160-170 million by 2020 (IBEF, 2018). Accessible and affordable labour
force has encouraged many multinational companies to outsource some of their business
operations to India.
India is a multi-ethnic, multi-lingual, and multi-religious country. Communal harmony is a
great strength; however, the country sometimes witnesses tensions in ethnic lines. India has a
world-renowned film industry. It is also world renowned for some of the sports e.g. Cricket
and Hockey. IPL (Indian Premier League) attracts cricket legends and talents to India.
India is one of the most attractive markets in the world in many sectors. Standard of living is
gradually improving and the country has a growing middle class with good disposable
income. However, it is worth noting that India still suffers from poverty and according to the
World Bank, 1 in 5 people in India are still poor.
Technological environment of India
India is one of the most technologically advanced countries in the world. In fact, according to
some sources, it is the 3rd most technologically advanced country in the world. No wonder
why more and more tech giants including but not limited to Facebook, Microsoft, and Apple
are investing in the country! India is a key destination for outsourcing work in IT. With an
advanced IT infrastructure and highly skilled IT work force, India offer enormous
opportunities for entrepreneurs to embark upon technological projects such as software
development and upgrades, e-commerce, mobile apps, business solutions, and many more.
Environmental issues of India
While India has made a lot of progress over the years, the country still faces a number of
environmental challenges e.g. air pollution, water pollution, floods, resource depletion such
as water and forest, loss of biodiversity, and diversion of consumer waste into rivers.
Expatriates may sometimes find it difficult to live under some of these environmental
challenges.
Legal environment of India
The last element to address in the PESTEL analysis of India is the legal landscape. As
mentioned above, India is a famous destination for foreign direct investment. Depending on
the scope and the business needs, foreign investors can set up a company, branch, or a limited
liability partnership in India. Indian companies are governed by the Companies Act, 2013.
There are a number of labour laws that regulate employment relations in India e.g.
Employees’ State Insurance Act 1948 (ESI Act), Industrial Disputes Act 1947 (ID Act),
Maternity Benefit Act 1961 (MBA) and the Payment of Bonus Act 1965 (PBA).
 INTRODUCTION TO SPANISH ECONOMY
The economy of Spain is the world's thirteenth-largest by nominal GDP, and it is also one of
the largest in the world by purchasing power parity. The country is a member of the European
Union, the Organization for Economic Co-operation and Development, and the World Trade
Organization. Spain has a capitalist mixed economy.
The Spanish economy is the fifth-largest in Europe behind Germany, United Kingdom, Italy
and France; and the fourth-largest in the Euro Zone, based on nominal GDP statistics. In
2012, Spain was the twelfth-largest exporter in the world and the sixteenth-largest importer.
Spain is listed 25th in UN Human Development Index and 28th in GDP per capita by the
World Bank, thus it is classified as a high income economy and among the countries of very
high human development. According to The Economist, Spain has the world's 10th
highest quality of life.
Following the financial crisis of 2007–08, the Spanish economy plunged into recession,
entering a cycle of negative macroeconomic performance. Compared to the EU's and US.
average, the Spanish economy entered recession later (the economy was still growing by
2008), but stayed there for longer. The economic boom of the 2000s was reversed, leaving
over a quarter of Spain's workforce unemployed by 2012. In aggregated terms, the Spanish
GDP contracted by almost 9% during the 2009-2013 period.
The economic situation started improving by 2013-2014. By then the country managed to
reverse the record trade deficit which had built up during the boom years attaining a trade
surplus in 2013 after three decades of running a trade deficit. The surplus kept strengthening
during 2014 and 2015.
In 2015 the Spanish GDP grew by 3.2%, a rate not seen since 2007, before the crisis
struck; such growth rate was the highest among larger EU economies that year. In just two
years (2014-2015) the Spanish economy had recovered 85% of the GDP lost during the 2009-
2013 recession, which got some international analysts to refer to Spain's current recovery as
"the showcase for structural reform efforts.
Strong GDP growth was registered also in 2016, with the country growing twice as fast as the
Euro zone average. In this regard, the Spanish economy is forecast to remain the best-
performing major economy in the Euro zone also in 2017. Spain's unemployment rate heavily
decreased from 2013 to 2017, although the real unemployment rate is much lower, as there is
an estimation of millions of people working in the grey market, people who count as
unemployed or inactive but still perform jobs. The real Spanish GDP is as well about 20%
bigger, as the underground economy moves annually 190.000 million Euros (224.200 million
USD). From any high income European country, just Italy and Greece have more
underground economy than Spain has, so Spain has as well a bigger purchasing power and a
smaller GINI coefficient. Spain because of financial crisis asked for help like other troubled
countries like Greece to EU by the European Stability Mechanism. Because of last year
financial crisis 10.2 million people in Spain live below the absolute poverty line, equivalent
to a poverty rate of 22.3 percent. This makes Spain the third country in the European Union
with the highest levels of inequality
 PESTEL ANALYSIS OF SPAIN
Political Factors Affecting Spain
As far as the political landscape is concerned, the most notable factor is that Spain is a
member of the European Union. However, Spain has had a high fiscal deficit for the best part
of ten years, meaning that the government spends more than it earns, which has led to a
growing sovereign debt. Unfortunately, corruption is ripe in the country: several high profile
examples of corruption have been identified in the last five years alone.

Economic Factors Affecting Spain

Spain has suffered from an economic recession for more than 10 years; only recently has it
begun showing signs of life. With high unemployment rates and unfavorable loan conditions,
Spain isn’t the best candidate for starting a new business. What’s more, the growing number
of part-time workers has given Spanish businesses a large amount of leverage over potential
workers. As a result, the economic situation in Spain is unpleasant even on the household
level.

Despite all of this, Spain is still a popular destination for tourists and expatriates alike, thanks
to its climate and convenient geographical location within Europe. This has allowed certain
areas of Spain, such as Barcelona or the Costa del Sol, to perform much better than others.

Socio-cultural Factors Affecting Spain

As far as society and culture are concerned, Spain is extremely unique. Many of the countries
inhabitants follow a workday schedule like no other — with long, lunchtime siesta breaks and
late bedtime. With regard to demographics, Spain has almost a 50:50 split between biological
males and biological females, while the vast majority of individuals are Spanish-born
Caucasians. There is also a small number of immigrants from Northern Areas of Africa,
while the proportion of Asian individuals is much lower than in some other European
countries (most notably, the United Kingdom).
The most prominent religion in the country is Catholicism. In addition to the more common
Catholic holidays, such as Christmas and Easter, Spaniards also celebrate Three Kings in the
month of January.

Technological Factors Affecting Spain

Technologically, Spain is on par with much of the rest of Europe. Advanced computers and
mobile phones are widespread, with powerful cellular networks working across the country.
Spain even has its own high-speed train system, although the list of destinations is fairly
limited. The level of healthcare is acceptable but not as impressive as in other Central
European countries.

Spain is no particular technological behemoth within the European continent. There are few
technological startups, while government interest in the technology sector is also relatively
lackluster.

Legal Factors Affecting Spain

The legal environment in Spain is what you would expect of any European country. With
strict copyright and data protection laws, the country has laws in place for the digital era.
Notably, Spain is a highly bureaucratic country, which means there are a fair number of legal
hoops to jump through when investing in the country or opening a local business.

Environmental Factors Affecting Spain

The environmental category in PESTLE analysis can refer to the environment itself — in
terms of natural resources, pollution, and climate change — but also to the consequences of
awareness for the environment. In the latter sense, the environment is a serious topic within
Spain, as within other European countries. This means companies and individuals alike are
subject to various regulations in the amount of pollution they create, the resources they use,
or even the segregation of their rubbish.

More than 70% of Spain’s energy comes from fossil fuel. However, the use of renewable
energy sources is growing. Currently, 12% of Spain’s energy is nuclear energy — the leading
renewable energy source in the country. This means that Spain has been slow to adopt
renewable, in comparison to, say, many Scandinavian countries, but there is consciousness of
the need to do so.
 EDUCATION SECTOR OF INDIA
Introduction
India holds an important place in the global education industry. India has one of the largest
networks of higher education institutions in the world. However, there is still a lot of
potential for further development in the education system.
Moreover, the aim of the government to raise its current gross enrolment ratio to 30 per cent
by 2020 will also boost the growth of the distance education in India.

Market Size
India has the world’s largest population of about 500 million in the age bracket of 5-24 years
and this provides a great opportunity for the education sector. The education sector in India is
estimated at US$ 91.7 billion in FY18 and is expected to reach US$ 101.1 billion in FY19.
Number of colleges and universities in India reached 39,050 and 903, respectively in 2017-
18. India had 36.64 million students enrolled in higher education in 2017-18. Gross
Enrolment Ratio in higher education reached 25.8 per cent in 2017-18.
The country has become the second largest market for e-learning after the US. The sector is
expected to reach US$ 1.96 billion by 2021 with around 9.5 million users.

Investments/Recent developments.
The total amount of Foreign Direct Investments (FDI) inflow into the education sector in
India stood at US$ 1.75 billion from April 2000 to June 2018, according to data released by
Department of Industrial Policy and Promotion (DIPP).
The education and training sector in India has witnessed some major investments and
developments in the recent past. Some of them are:

 Indian education sector witnessed 18 merger and acquisition deals worth US$ 49
million in 2017.
 The Ministry of Human Resource Development, Government of India is also planning
to raise around Rs 1 lakh crore (US$ 15.52 billion) from private companies and high
net worth individuals to finance improvement of education infrastructure in the
country.
  India has signed a loan agreement with World Bank under 'Skills Acquisition and
Knowledge Awareness for Livelihood Promotion' (SANKALP) Project to enhance
institutional mechanisms for skills development.
 Singapore is going to open its first skill development centre in Assam, which will
provide vocational training to youth in the region.

Government Initiatives
Some of the other major initiatives taken by the Government of India are:

 In August 2018, Innovation Cell and Atal Ranking of Institutions on Innovation

Achievements (ARIIA) were launched to assess innovation efforts and encourage a
healthy competition among higher educational institutions in the country.
 In August 2018, Government of India launched the second phase of ‘Unnat Bharat
Abhiyan’ which aims to link higher educational institutions in the country with at
least five villages. The scheme covers 750 such institutions.
 The allocation for school education under the Union Budget 2018-19 is expected to
increase by 14 per cent, to focus on accelerating existing schemes and quality
improvement.
 In order to boost the Skill India Mission, two new schemes, Skills Acquisition and
Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill
Strengthening for Industrial Value Enhancement (STRIVE), have been approved by
the Cabinet Committee on Economic Affairs (CCEA), Government of India, with an
outlay of Rs 6,655 crore (US$ 1.02 billion) and will be supported by the World Bank.
 The Ek Bharat Shreshtha Bharat (EBSB) campaign is undertaken by Ministry of
Human Resource Development to increase engagement between states, union
territories, central ministries, educational institutions and general public.
 Prime Minister Mr Narendra Modi launched the Skill India initiative – ‘Kaushal
Bharat, Kushal Bharat’. Under this initiative, the government has set itself a target of
training 400 million citizens by 2022 that would enable them to find jobs. The
initiatives launched include various programmes like: Pradhan Mantri Kaushal Vikas
Yojana (PMKVY), National Policy for Skill Development and Entrepreneurship
2015, Skill Loan scheme, and the National Skill Development Mission.

Government Achievements
Following are the achievements of the government in the past four years:

 Under the mid-day meal scheme initiated by the Government of India, about 95
million students of around 1.14 million schools enjoy fresh meal every day.
 The Government has laid foundation of 141 universities and 7 IITs in the past four
years.
 With an aim of promoting innovation and entreprenuership among secondary school
students in the country NITI Aayog, Government of India has launched the Atal
Innovation Mission (AIM)In June 2018, 3,000 additional Atal Tinkering Labs were
approved, taking the total number of labs to 5,441.

Road Ahead
In 2030, it is estimated that India’s higher education will:

 Adopt transformative and innovative approaches in Higher education.

 Have an augmented Gross Enrolment Ratio (GER) of 50 per cent
 Reduce state-wise, gender based and social disparity in GER to 5 per cent.
 Emerge as a single largest provider of global talent, with one in four graduates in the
world being a product of the Indian higher education system.
 Be among the top five countries in the world in terms of research output with an
annual R&D spent of US$ 140 billion.
 Have more than 20 universities among the global top 200.

Various government initiatives are being adopted to boost the growth of distance education
market, besides focusing on new education techniques, such as E-learning and M-learning.
Education sector has seen a host of reforms and improved financial outlays in recent years
that could possibly transform the country into a knowledge haven. With human resource
increasingly gaining significance in the overall development of the country, development of
education infrastructure is expected to remain the key focus in the current decade. In this
scenario, infrastructure investment in the education sector is likely to see a considerable
increase in the current decade
Moreover, availability of English speaking tech-educated talent, democratic governance and a
strong legal and intellectual property protection framework are enablers for world class
product development, as per Mr Amit Phadnis, President-Engineering and Site Leader for
Cisco (India).
The Government of India has taken several steps including opening of IIT’s and IIM’s in new
locations as well as allocating educational grants for research scholars in most government
institutions. Furthermore, with online modes of education being used by several educational
organizations, the higher education sector in India is set for some major changes and
developments in the years to come.

CONSULTANCY SECTOR OF INDIA

Over the Years, the Indian consulting industry has seen a substantial growth, not only in
terms of size, but also in terms of the service offerings. In recent years, the demand of
specialist consulting services is being immensely sought by customers in India, which has
eventually opened the opportunity for a large number of consultants to help businesses with
expert knowledge base and resources. Due to constantly increasing demand, the industry is
estimated to grow at a compounded annual growth rate of 30 percent to become a Rs 27,000
crores industry by 2020, as per the reports of The Associated Chambers of Commerce and
Industry of India (Assocham).
As of now, there are about 6000 consultancy firms in metropolitan cities including Delhi
(25.7 percent) followed by, Mumbai (25.5 percent), Chennai (12.1 percent) and Kolkata (9.1
percent). Moreover, service sector contributes more than 50 percent to nation’s GDP.
Besides, there are around 2000 R&D institutions and laboratories supporting several domestic
consultancy organizations directly or indirectly at a reasonable cost.
This fast growth of this sector in India is largely attributable to improved investment
activities because of low-cost structure, entry of many big players into the Indian market,
relaxation of previous FDI restrictions, and strong capabilities in areas like IT, management,
civil engineering, telecommunication, petrochemicals, power and metallurgy. The steady
growth will ultimately lead to expected rise in hiring activities.
The president of Assocham, Venugopal Dhoot, said that the countries worldwide including
the United States of America, the United Kingdom, China, Japan, Saudi Arabia, and Gulf
nations acknowledge the competency of Indian consultancy firms, with their ever growing
demand in the EU as well. He further mentioned the demand growth of Indian consultancy
firms in view of their competitive edge over their counterparts in the ASEAN countries that
include Germany, Italy and France.
The Demand of Consulting Services in India
Due to the involuntary reduction in workforce, many organizations lack the technological,
strategic and project management abilities to handle market and technical changes in the ever
growing market. Therefore, currently, the business world desperately needs consulting
assistance. It is projected that by the next three years, there would be more than 2.2 lakh
people getting employment in almost 10,000 consultancy firms across the nation.
Owing to the shortage of enough qualified people, some consulting firms have already
devised creative solutions by launching their own accredited MBA programs. Many people
are inclined towards this profession because of its heightened demand and visibility, along
with enticing salary packages.
The Major Strengths of the Industry
The major strengths that set Indian consultancy firm above the consultancy organizations of
developed economies are professional competence, low-cost structure, high acceptability,
flexible thinking, high learning agility, strong interpersonal skills, focused approach and
overall business understanding. Moreover, their expertise in diverse areas and familiarity
with the local conditions are a few other reasons that help them to score over the global
players. However, the Indian consulting sector has some shortcomings, which have been
hindering the export growth such as limited local presence in a foreign country due to lack of
intensified market expertise, low quality assurance, low brand equity, lack of strategic tie-
ups, insufficient international experience of Indian Consultants working overseas, and low
level of R&D. Despite these limitations, the consulting sector in India is responding
creatively to the changing needs of the clients and seeking innovations to meet their future
needs.
The adoption of best practices data warehousing, knowledge management tools and internet
ensures the faster growth of this industry in near future. Despite the expansion of the
consulting organizations, the size of individual firms is growing in response to another
industry trend. Consulting firms that are unable to compete on size are trying to fulfill the
clients requirements by outsourcing their project to another firm while maintaining
responsibility for the overall project.
Management Consulting Industry– A Major Contributor
Indian management consulting industry is one of the fastest-growing industries, fuelled by
the advancement in technology and rapid adoption of mobile devices. This sector includes
areas like telecommunications, e-commerce, software designs, hardware systems design and
implementation, intranet and internet schemes and functionality, and website development
and operation. The multiple layers of management consulting sector cater to a distinct set of
needs. TCS, Wipro, Infosys, are a few major IT industries in India competing with major
contenders in the global IT sector.
Challenges For Indian Consulting Organisations
Keeping in mind the differences of the domestic market in India with respect to the Global
market, the major challenges Indian Consultants usually face in India are:
Competition and differentiation: The biggest challenge for the Indian consulting firms is to
compete with the global players in the market. There is need for Indian consultancy sectors to
define their specializations and differentiate themselves from their competitors.
Adoption of New Organizational design: With increasing globalization of consulting firms,
Indian consultancy sectors need to adopt new organizational design that best suit their
contexts and identities.
Outsourcing to India acts as a challenge as well as driver: Though outsourcing assists
development and globalization, many Indian consulting firms find that it restrains their
growth in the outsourced regions.
Managing the Knowledge Flows: The firms have a challenge to leverage the organizational
knowledge efficiently so that there would be a proper balance between utilization of existing
knowledge and creating new knowledge
 EDUCATION SECTOR IN SPAIN
INTRODUCTION

In Spain, elementary school and middle school are considered basic (obligatory) education.
These are Primaria (6-12 years old), which is the Spanish equivalent of elementary/primary
school, and Secundaria (12-16 years old), which would be a mixture of middle school and the
first two years of High school in the United States/secondary school in England and many
other countries.

Spain is working towards reforming vocational education and modernizing education to halt
and reverse the rising unemployment rates.

The Public Instruction Act of 1857 (which came to be known as the Moyano Act, BOE-A-
1857-9551) was the first comprehensive regulation of the Spanish educational system. It
introduced obligatory schooling for children between the ages of six and nine, tried to reduce
the Catholic Church’s influence on schools, and provided a legal framework for private
education. From 1857 to 1970 the duration of compulsory education changed several times,
with various laws either extending or reducing the number of years. In 1970, the General Law
of Education (BOE-A-1970-852) established mandatory general basic education (EGB) for
children between the ages of six and 13, and introduced high school (Bachillerato) for older
children preparing for university, as well as vocational training. Because the educational
sector remained under-funded, the reform did not apply to all sectors of society. Currently,
education is compulsory for 10 years for children ages 6-16 (see compulsory education).

Since the re-establishment of democratic rule in 1977, educational policy has been directly
regulated under article 27 of the Spanish constitution (1978), which asserts the basic right to a
free education. However, the distribution of powers between the central state and the
Autonomous Communities is not directly defined in the constitution. Indeed, according to
article 149.3 most powers in the field of education can eventually be transferred to the
Autonomous Communities, but they can only legislate on those issues which the framework
legislation has left open, or on which the state has not yet passed framework laws, or could
find no reason for doing so. Paradoxically, the Autonomous Communities have a wide range
of responsibilities in the area of education: namely, the administrative tenure of educational
institutions; the founding, the construction, and the management of educational institutions;
the supervision of teachers and other staff; and the organisation of daily life in schools.

However, the rights of the Autonomous Communities are changing. According to article 6a
of the Organic Law for Quality Improvement of Education (aka LOMCE), the central
government is responsible for “the design of the core curriculum in relation to the objectives,
skills, content, evaluation criteria, standards and measurable learning outcomes”; while the
Autonomous Communities are responsible for 1) complementing the contents of the block
core subjects, and 2) establishing the contents of the subjects considered important by a
specific Autonomous Community.
The municipal and local governments have very few opportunities to influence education
policy: education laws simply recognise the ability of local bodies to assist the state and the
Autonomous Communities in the field of education. Nevertheless, the municipalities are
responsible for obtaining the land for building schools, as well as for the conservation, the
maintenance, and the security of the state kindergartens and primary schools; and for the
enforcement of compulsory education laws, if necessary through social services or the local
police.

The Spanish state education sector is financed with public funds through public educational
institutions. They also fund a portion of the costs (the salaries of teachers) of “state-
sanctioned” private schools, most of which are operated by the Catholic Church. Finally,
there are private schools at all levels of education which are owned by private individuals or
legal entities. Parents who send their children to these schools must pay fees that completely
cover the educational costs. Most of these schools are also run by religious orders, and
include single-sex schools.

Organisation of the educational system

The Spanish education system is relatively decentralised. The Ministry of Education of the
central government designs the legal framework regulating the principles, the objectives, and
the organisation of the different school levels, as well as some of the contents and subjects
studied. Departments in the regions develop and manage their educational systems based on
these guidelines. In fact, areas of exclusive legislation from these departments are rare in
Spain.

The current system for schools below the level of higher education is organised into four
levels: pre-primary school, primary school, compulsory secondary education, and post-
compulsory education. Pre-primary education is still voluntary and consists of two levels:
pre-school for children ages 0-3 years and pre-primary school for children ages 3-6 years
(pre-primary school is free). Primary education (ages 6-12) and compulsory secondary
education (Educación Secundaria Obligatoria, aka ESO) for students at the lower secondary
level (ages 12-16) are compulsory and free in state schools. The main forms of free post-
compulsory education are two years of upper secondary academic education (Bachillerato)
and vocational training (Formación Profesional) programmes at either the beginning or the
intermediate levels, the duration of which vary between one and a half or two years. Tertiary
education includes university education and advanced vocational training.

In 1990, the Law of General Ordering of the Educational System (LOGSE, BOE-A-1990-
24172) represented a turning point in the regulation of educational services and childcare. It
introduced “infant education” composed of two voluntary cycles. The first cycle for children
ages 0-2was provided through agreements with municipalities, other public administrative
bodies, and private non-profit entities. The second cycle for children ages 3-5 was provided
by schools. In 2002, the Organic Law on Quality in Education (LOCE, BOE-A-2002-25037)
continued to define infant education as voluntary and free, consisting of a cycle of three
academic years for children ages 3-6, but which was based on attendance by children ages 0-
3. Under the Organic Law of Education (LOE,BOE-A-2006-7899) of 2006, which replaced
the two aforementioned laws, infant education was defined as a single stage from birth to age
five (Jimenez, 2010). In practice, the Royal Decree-Law on the Curriculum of the Second
Cycle of Infant Education (1630/2006) of 2006 called for the provision of cost-free state
school programmes for children ages 3-5 (though attendance was not made compulsory).
These cycles offer educational services within the framework of the complete school day
(mornings from 9 am to 12:30 pm, and afternoons from 3 pm to 4:30 pm) in schools with
other educational levels (usually the primary level for children ages 6-12). They are offered
by the state in either state schools or through a grant-assisted scheme (infant education
centre). Other schools can also be made available by the private sector, though they are
controlled by the authorities responsible for education, including the Ministry of Education
and the Department of Education of the Autonomous Community governments. We should
note that according to official registers, enrolment rates for three-, four-, and five-year-olds
are among the highest in the European Union; thus, schooling for children in this age range
(the second cycle of infant education) is almost universal.

Compulsory education
The Law on the General Ordering of the Education System (BOE-A-1990-24172), aka
LOGSE, established in 1990 the main curricular changes that are still in place today. First, it
extended compulsory education up to 16 years of age, which is also the minimum age for
entering the labour market. Compulsory education is cost-free in state and state-sanctioned
schools, and encompasses a period of 10 years for children ages 6-16. Pre-primary education
(ages 0-6) is still voluntary. However, since 2006 (Royal Decree-Law on the Curriculum of
the Second Cycle of Infant Education, 1630/2006) the second level of pre-school (ages 3-6)
has been cost-free, and the state is supposed to offer the necessary number of pre-school
places. Primary education (ages 6-12) and compulsory secondary education (Educación
Secundaria Obligatoria, aka ESO) for students at the lower secondary level (ages 12-16) are
compulsory and free in state schools. Further regulations implemented curricular changes
made by alternating conservative and socialist party governments, but did not affect
compulsory education, with the exception of the latest reform undertaken in 2013. The
Organic Law for Quality Improvement of Education (BOE-A-2013-12886), known as the ley
Wert, for the name of the minister of education) gave students the option of devoting their
last year of compulsory education (at age 16) to vocational training, instead of following the
regular pathway of compulsory secondary education (ESO).
 CONSULTANCY SECTOR IN SPAIN
The Spanish economy has been recovering during recent years, with a positive GDP growth
in 2014 (+1.4%), in 2015 (+3.2%), and in 2016 (+3.6%). This positive trend is also expected
to continue in 2017 (+3.1%). Low borrowing rates, low oil prices, and a positive scale
stimulus, have been boosting consumption. Labour market conditions are improving but the
unemployment rate is still high (18.6% in 2016) and only structural reforms will be able to
reduce it to a significant extent. In 2016 the MC industry has increased by roughly 12% and
the forecasts for 2017 highlight an increasing growth (+10%). The recovery of the MC
market has been made mainly by projects related to the digital transformation of companies’
business models. More in general, consulting on digital transformation and big data have
been strongly required both by private sector and public administration. MC employment is
following the changes in turnover without fully matching its trend: in 2016 it increased by
4% and a further 5% growth is expected in 2017. In 2016 the main MC services lines were
related to Technology and Strategy, with quite stable shares. The major client industries were
Financial Services, Public Administration and Telecom & Media. The market structure in
2017 is forecasted to be roughly the same. The domestic market, representing 73.4% of the
overall turnover, has been the main driver of the turnover growth in 2016. For 2017 it is
estimated that turnover will increase. Latin America represents the main export market for
Spanish consulting rms. The main areas in which Spanish MC rms are growing are: Risk
Management: the present competitive environment introduces increased uncertainty and
emerging risk. MC rms help companies to develop and implement a formal risk management
strategy and framework to promote and govern erective risk management practices across the
System. This task requires development of an appropriate risk appetite statement, with
denned risk tolerances; formation of an overarching risk management strategy; and creation
of an overarching risk management policy. Customer Experience: today, enterprises are
focused on the customer like never before. In our rapidly changing, increasingly digital
world, building a strong customer relationship is the most important part of building a great
business. Customers have become harder to denned, understand and please than ever before.
Traditional approaches to creating customer-first experiences are just one step down the road
to excellence. A great experience in today’s digital world is most often denned by how
unique it can be made to each individual. MC rms support their clients to completely reinvent
how customer experience is designed and delivered, moving from a subjective and largely
intuitive process to a data-driven decision, highly engineered process that delivers continuous
measurable improvement in business outcomes and customer satisfaction. Analytics: in the
era of big data, companies across a range of industries are recognizing the need for better
intelligence and insight about their business. They want to work out how to make the best
decisions, by drawing on the right information, at the right time. MC rms are supporting their
clients as to SPAIN Spanish Association of Consulting Companies www.consultoras.org
National Association predictive analytics, allowing them to uncover and exploit patterns in
their historical data as well as to identify both risk and opportunities ahead. Supply chain
optimization: the traditional business model is under increasing challenges, with many
disruptive forces at work. Against these new challenges, the traditional supply chain approach
is struggling to make the necessary breakthrough in performance whilst disruptive supply
chain forces are increasing. To make this performance breakthrough, the supply chain needs
to be fundamentally reinvented, moving from a simplistic one-size-to-all to a more modular
and synchronized end-to-end approach. MC rms help companies transform in a digital
environment across critical capability areas, covering strategic architecture, integrated
operational excellence, supply chain risk and resilience, and operational talent and capability
enablement. This report has been provided by AEC – Asociación Española de Empresas de
Consultoría AEC, the Spanish Association of Consulting Companies is a national, non-
commercial organisation, which represents the major IT Consulting companies (whose main
activities are outsourcing, IT development and integration) as well as major Management
Consulting companies in Spain (representing roughly 16% of the turnover of AEC
associates). Its 23 members represent more than 70% of the Management & Technology
sector.
 COMPARISION BETWEEN INDIAN AND SPAINISH
“PESTEL MODEL”

SPANISH ECONOMY OVERVIEW:

Spain is currently political unstable and has been without a proper government since
December 2015, because the parliament could not choose a prime minister and was therefore
dissolved. According to PESTLE analysis, Political parties are working to resolve their
differences and to place a proper government to put an end to political unrest.

PESTLE analysis informs Spain has a two track labor market and increased number of
temporary workers. The popularity of temporary workers has reduced firing costs and
employers have more bargaining power as compared to workers. Furthermore, it is clear from
the PESTLE analysis that government encourages entrepreneurship and thus it has created a
contract that allows the entrepreneurial entity to hire a worker on one-year probation. The
drawback of this contract is lack of trained young professionals. Spain’s tax burden is
moderate to high, but provides good incentive to companies specially those involved in R&D
and technological innovation.

Even after suffering a massive setback to its economy due the burst of the housing bubble it
has made a remarkable comeback as 4th largest economy in the Eurozone IT and
telecommunication industry have potential growth prospects. Currently the political unrest
has halted its GDP growth. If the political unrest continues to prevail then Spain might face
some GDP contraction in 2017. However, unemployment rates have come down from a high
of 27% to 20% whereas youth unemployment has rose to 45.8%. Spain’s economy has both
negative and positive aspects.

Social factor of PESTLE informs that Spanish population is ageing while birth rates have
been declining and consequently it means a shrinking workforce and less demand for
consumer products. Work conditions are stricter and tighter because of increased
competition. Furthermore, personal interaction and relationships are held in high stead which
means attention needs to be paid in developing long lasting relationships with clients. In
terms of education, the Spanish population is highly educated with the majority possessing
advance college degrees. Unemployment within youth segment is high so younger skilled
force looks for better options outside the country. The Spanish society is increasingly being
divided along communal lines, two regions namely Basque and Catalonia (which includes the
industrial city of Barcelona) have called for full provincial autonomy and may even break off
in the near future.

As Tech study carried out during PESTLE analysis informs, Spain spends about $19.2 billion
on Research and Development and comes 16th among top spenders on research. Due to
recession there has been cuts in research expenditure but Spain has pledged to increase its
budget for research purposes to at least 2% of the country’s GDP. The Spanish population is
technologically savvy with internet usage rates of 65%. Furthermore, ports and railways are
fully developed therefore making movement of heavy industrial machinery very easy across
the country. Legislation is also being made freer and policies have become more liberal in
nature. Spain, emphasis is on environment friendly ways of generating energy hence recent
technological innovations in renewable energy have made Spain popular throughout the
world. However a drawback in technology sector can be gauged through the number of
patents from Spain which are far below European counterparts.

INDIAN ECONOMY OVERVIEW:

India, officially the Republic of India, is a country in South Asia. It is the seventh-largest
country by area, the second-most populous country with over 1.3 billion people, and the most
populous democracy in the world. Bounded by the Indian Ocean on the south, the Arabian
Sea on the south-west, and the Bay of Bengal on the south-east, it shares land borders with
Pakistan to the west; China, Nepal, and Bhutan to the north-east; and Burma and Bangladesh
to the east. In the Indian Ocean, India is in the vicinity of Sri Lanka and the Maldives, and in
addition, India's Andaman and Nicobar Islands share a maritime border with Thailand and
Indonesia.

India had estimated population of 1309.35 billion in the year 2016 and expected to reach
1416.16 million by 2022.India's unemployment rate was 4.7% in 2012-13, which increased to
4.9% in 2013-14.

India's real gross domestic product (GDP) was around INR 121330.48 billion in 2016
whereas the nominal GDP was INR 151904.81 billions. This resulted in GDP deflator
125.199. Per capita GDP was estimated at USD 1723.30 whereas purchasing power parity
(PPP) based per capita GDP was estimated to be at USD 6615.78.

In 2016, Indian government's revenue was INR 32399.13 billion whereas the expenditure was
INR 42380.04 billions. This resulted Indian government's net lending / borrowing negative at
INR 9980.90 billion in 2016 indicating that enough financial resources were not made
available by the government to boost economic growth.

The current account balance for India was negative and estimated to be at USD 20.858 billion
for the year 2016 and is expected to grow at a CAGR of 20.38% and reach USD 80.901 by
2022. This negative current account balance indicates the India is net borrower from the
whole world.
 COMPARISON BETWEEN INDIAN AND SPANISH
EDUCATION SECTOR
Education in Spain is regulated by the Ley Orgánica 8/2013, de 9 de diciembre, para la
mejora de la calidad educativa (LOMCE, Organic Law for the improvement of educational
quality) that expands upon Article 27 of the Spanish Constitution of 1978. Education is
compulsory and free for all children aged between 6 and 16 years and is supported by the
national government together with the governments of each of the country's 17 autonomous
communities.

Whereas Education in India is provided by public schools (controlled and funded by three
levels: central, state and local and private schools. Under various articles of the Indian
Constitution, free and compulsory education is provided as a fundamental right to children
between the ages of 6 and 14. The approximate ratio of public schools to private schools in
India is 7:5.

The Indian Government spends 4.18% of its total GDP in the Education Sector, whereas the
Spanish Government spends around 5% of its total GDP in the Education Sector.

Spain aims to promote education improvement, mainly through a new law, the Organic Law
for the Improvement of Educational Quality (Ley Orgánica para la Mejora de la Calidad
Educativa, LOMCE, 2013). Among its main measures are greater autonomy for schools, new
preventive diagnostic testing in primary education, more vocational pathways starting in the
final years of lower secondary education, and exit exams in lower and upper secondary
education.

To reduce dropout, a range of targeted programmes is available, and a new dual VET system
(2012) combines training with employment in companies.

India aims to promote education by using various schemes such as Pradhan Mantri Kaushal
Vikas Yojana (PMKVY), mid day meal scheme, skill loan scheme to attract youth to pursue
higher education.

India mainly aims to adopt transformative and innovative approaches in Higher education
whereas Spain mainly aims to modernize its education system.
 COMPARISON BETWEEN INDIAN AND SPANISH
CONSULTANCY SECTOR

Doing Business 2019 30º 77º 2019 Doing Business

[+] [+]

IPI Year on January 2019 2.9%

Year [+]

Passengers March 2019 1,295,391 3,227,701 December 2017 Passengers

vehicles Year vehicles Year
[+] [+]

Annual March 2019 32.94 3.00 December 2017 Annual

Vehicles/ 1,000 Vehicles/ 1,000
p. [+] p. [+]

Motor vehicle 2018 2,764,067 4,727,967 2018 Motor vehicle

production [+] production [+]

Vehicles / 2015 591.36 22.05 2015 Vehicles /

1,000 people 1,000 people
[+] [+]

Taxes

Standard VAT 09/01/2012 21.00% 18.00% 01/01/2018 Standard VAT

[+] [+]

Top tax rate + 2017 43.5% 35.9% 2018 Top tax rate +
SSC [+] SSC [+]

Trade

Exports [+] 2017 320,063.0 M.$ 299,163.0 M.$ 2017 Exports [+]

Exports % GDP 2018 24.17% 11.61% 2017 Exports % GDP

[+] [+]
 Imports [+] 2017 352,188.0 M.$ 447,003.0 M.$ 2017 Imports [+]

Imports % GDP 2018 27.19% 17.35% 2017 Imports % GDP

[+] [+]

Trade balance 2017 -32,125.0 M.$ -147,840.0 M.$ 2017 Trade balance
[+] [+]

Trade balance 2018 -3.01% -5.74% 2017 Trade balance

% GDP [+] % GDP [+]

Retail Sales February 2019 1.2%

YoY [+]
 SOURCES
1) https://www.ibef.org/
2) http://www.oecd.org/india/
3) https://www.nationmaster.com/
4) https://countryeconomy.com/indicators