SUBJECT : ECONOMICS

SEMESTER : II

SUBMITTED TO: PROF. DHARMENDRA KHAIRAJANI

(FACULTY OF ECONOMICS)

SUBMITTED BY: RITIKA BHANSALI

ROLL NO. : 03 (B)

BATCH: 2018-2023

(B.B.A, L.L.B. HONS.)

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 CERTIFICATE OF DECLARATION

I hereby declare that the ECONOMICS PROJECT WORK entitled on the country
“HUNGARY” submitted to Unitedworld School Of Law (UWSL), Gandhinagar, is record of an
original work and not plagiarized except acknowledged in the text and clearly mentioned where I
have used the published work. I have provided the source of such work and project was done by
me under the supervision and under the able guidance of Prof. Dharmendra Khairajan, Faculty
Member, Uwsl, Gandhinagar.

Ritika Bhansali

Roll No. – 03

Semester – II

Section – “B”

Batch – 2018-2023

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 ACKNOWLEDGEMENTS

This is not just a customary acknowledgement of help that I received but a sincere expression of
gratitude to all those who have helped me to complete this project and made it seem apparently
more readable than otherwise it would have been.

I am in debt to my faculty advisor Prof. Dharmendra Khairajan, for giving such an interesting
topic and who has been extremely kind to make space for all my enthusiasm & endeavours and
making it seem easy by clearly explaining its various aspects.

I am also grateful to all my friends and seniors who have given their valuable suggestions
pertaining to the topic and have been a constant source of help and support.

Thanking Everyone

Ritika Bhansali

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 INTRODUCTION TO THE PROJECT

This project deals with the Introduction of two of the countries , i.e, India and Hungary with the
PESTEL Analysis and STEEPLED Analysis respectively. It also includes research on the
‘Education Sector and the Consultancy Sector ( Business, Placement and training sectors )’ of
both the countries. Moreover, the project deals with the comparison of both the countries based
on the Political, Economic, Social, Technologcal, Ecological , Legal factors and other factors as
well.

I have chosen to do this topic because the topic deals with a lot of in-depth research and gives us
a clear picture about both the countries’ important factors for economic growth. To know more
about the sectors of the countries and its education system, its growth and to gulp more
knowledge , I have chosen the topic.

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 INTRODUCTION OF INDIA

India, also known as the Republic of India is a country

in South Asia. The word ‘Indian’ comes from Sindhu, a
local name for the Indus River. Indians also call their
country ‘Bharat’, the name of a legendary emperor. It is
the seventh largest country by area and with more than
1.3 billion people, it is the second most populous country
as well as the most populous democracy in the world. Bounded by the Indian Ocean on the
south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast, it shares land
borders with Pakistan to the west; China, Nepal, and Bhutan to the northeast; and Bangladesh
and Myanmar to the east. In the Indian Ocean, India is in the vicinity of Sri Lanka and the
Maldives, while its Andaman and Nicobar Islands share a maritime border with Thailand and
Indonesia.

Jawaharlal Nehru became India's first prime minister in 1947 and Mahatma Gandhi led the
independence movement.

India remains one of the most ethnically diverse countries in the world. Apart from its many
religions and sects, India is home to innumerable castes and tribes. It is rich in cultural heritage
as well as art and literature, architecture, performing arts, motion pictures, television, cuisine,
society, clothing and sports. Earnest attempts have been made to instill a spirit of nationhood in
so varied a population, but tensions between neighbouring groups have remained and at times
have resulted in outbreaks of violence. Yet social legislation has done much to alleviate the
disabilities previously suffered by formerly “untouchable” castes, tribal populations, women, and
other traditionally disadvantaged segments of society. At independence, India was blessed with
several leaders of world stature, most notably Mohandas (Mahatma) Gandhi and Jawaharlal
Nehru, who were able to galvanize the masses at home and bring prestige to India abroad. The
country has played an increasing role in global affairs.

Vital to India's self-image as an independent nation was its constitution, completed in 1950,
which put in place a secular and democratic republic. It has remained a democracy with civil

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liberties, an active Supreme Court, and a largely independent press. Economic liberalisation,
which was begun in the 1990s, has created a large urban middle class, transformed India into one
of the fastest- growing economies and increased its geopolitical clout. Yet, India is also shaped
by seemingly unyielding poverty, both rural and urban by religious and caste issue related by
Maoist-inspired Naxalite insurgencies and separatism in Jammu & Kashmir and in North-eastern
areas. It has unresolved territorial disputes with China and Pakistan with The India–Pakistan
nuclear rivalry came to a head in 1998. India's sustained democratic freedoms are unique among
the world's newer nations; however, in spite of its recent economic successes, freedom from want
for its disadvantaged population remains a goal yet to be achieved.

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 WHAT IS PESTEL ANALYSIS?

A PESTEL analysis (formerly known as PEST analysis) is a framework or tool used to analyze
and monitor the macro-environmental factors that may have a profound impact on an
organization’s performance.

 This tool is especially useful when starting a new business or entering a foreign market.
 It is often used in collaboration with other analytical business tools such as the SWOT
analysis and Porter’s Five Forces to give a clear understanding of a situation and related
internal and external factors.
 PESTEL is an acronym that stand for Political, Economic, Social, Technological,
Environmental and Legal factors.
 However, throughout the years people have expanded the framework with factors such
as Demographics, Intercultural, Ethical and Ecological resulting in variants such as
STEEPLED, DESTEP and SLEPIT

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 PESTEL ANALYSIS OF INDIA

For the past decade or so, India has been experiencing a constant growth in its GDP, along with a
continuous growth of liberalization from 1991 till date. The country has also been opening its
doors to attract investors and foreign companies to further promote growth. To get a better
understanding of the business environment in India, we analyze it through the PESTEL
analysis of India.

1. POLITICAL FACTORS :

 Political factors refer to the governmental policy in terms of the economy, the goods and
services provided, political decisions made in vital areas of business, education and
workforce, as well as the decision made concerning infrastructure. These factors are all
about how and to what degree a government intervenes in the economy or a certain
industry. Basically all the influences that a government has on your business could be
classified here.
 This can include government policy, political stability or instability, corruption, foreign
trade policy, tax policy, labour law, environmental law and trade restrictions.
Furthermore, the government may have a profound impact on a nation’s education
system, infrastructure and health regulations. These are all factors that need to be taken
into account when assessing the attractiveness of a potential market.
 Political factors also relate to the policies made by the government for instance the extent
to which the government intervenes in the economy. It also relates to the goods or
services that a government is willing to provide in the country. In addition, political
factors involve the question of government’s view and attitude towards provision of
subsidies as well as government priorities towards support of business (Chakranarayan
2009).

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Political decisions have widespread implications on the business sector of a country. For
instance, they impact on workforce education, nation’s health as well as the
infrastructural quality of a nation. Being one of the world’s largest democracies, India has
a federal form of government. The Indian federal government is based on the Common
law of English, review of legislative acts by the judiciary, maintenance of reservations on
the acceptance of compulsory jurisdiction, application of different personal legal codes
on Christians, Hindus and Muslims. Indian’s political can be described as averaged
stable. From India’s history, Indian National Congress (INC) has steered the federal
government for a long time. However, several parties have dominated Indian state
politics.
The political environment of India is highly determined by diverse factors such as
political stability and government’s policies, the ideologies of various political parties,
politicians’ interests, as well as the influence political forums possess. Therefore,
multivariate political factors affect the Indian business environment (Chakranarayan
2009). They include taxation which is well developed due to its three-tier structure of
governments: Union, state and Urban as well as Rural bodies. The Union government
imposes income tax, custom duty as well as excise, sales and service tax. The state
government levies principal taxes including stamp duty, land revenue, state excise,
entertainment duty and professional and callings tax. Various taxes such as octroi
,properties, markets as well as utilities are charged by the local bodies. In addition, the
government encourages free business. There are flexible regulations on international
trade; the government has been stable for the past 10 years and India has not had external
wars.

The political system of the country is strong and different political parties take part in
active politics. In the political environment, there are various elements like ideologies of
different politics parties, policies of government, interest of politicians, and they take
action on different issues for the betterment of the people. The taxation system of the
government is well developed and people pay income tax, services tax, property taxes
and sale tax. The government has adopted its privatization policy to improve the
efficiency and productivity of the government. It has maintained he deregulation policy,

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 international trade regulations, general initiatives, government stability and the
international stability, which has created the economic development in the country. The
government pays attentions on different issues of the country and they are introducing
some reforms to make it economically strong and productive. The elections are
conducted at the end of the tenure of any government, so there is no political turmoil
among the political parties.

2. ECONOMIC FACTORS :

 Economic factors have a significant impact on how an organisation does business and
also how profitable they are. These factors are determinants of a certain economy’s
performance.

 Factors include economic growth, exchange rates, inflation rates, interest rates,
disposable income of consumers and unemployment rates. These factors may have a
direct or indirect long term impact on a company, since it affects the purchasing power of
consumers and could possibly change demand/supply models in the economy.
Consequently it also affects the way companies price their products and services.

 These factors can be further broken down into macro-economical and micro-economical
factors. Macro-economical  factors deal with the management of demand in any given
economy. Governments use interest rate control, taxation policy and government
expenditure as their main mechanisms they use for this.Micro-economic factors are all
about the way people spend their incomes. This has a large impact on B2C organisations
in particular.

The economic situation of the country, India, is strong and it includes taxation changes,
interest rates, inflation, economic growth, and exchange rates. The government
introduced the industrial reforms in 1991 and there is reduction in industrial licensing,
formation of FIBP, and liberalization of foreign capital, which has created the improved
with the growth rate of 5% in 2015 while 4.35% in 2013. The country has done

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 remarkable success in doing the business of General Motors, BMW, Toyota, Mercedes
Benz, Ford, Honda, Volkswagon and Hyundai. The country has encouraged the foreign
investment in the country and new industries are being set up in the country. The country
has enough foreign exchange reserves and it is paying attention on education, healthcare,
banking, financial sector, and residential housing. The government is making timely
decision for investment and business policies for the foreign product manufactures,
executives, investors and material suppliers.

Taxation Policy: India features a well structured tax system. There are several different
taxes or mandatory contributions that a business in India has to make. These include a
corporate income tax, Central sales tax, social security contributions, employee’s state
insurance contribution, dividend tax, property tax, fuel tax, tax on insurance contracts,
vehicle tax, state VAT, CENVAT, tax on interest, income surcharge, education and
secondary and higher education. Tax system in India is considered to be favorable for a
business expansion.On the other hand, a backward nation will still find economics a
challenge. Thus, it is not a surprise that developing nations are finding the most business
entrants nowadays. The single explanation for this phenomenon is economical factors
which are in favor of the company and hence show a positive signal during PESTEL
analysis.

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
and Qatar.

3. SOCIAL FACTORS :

 Also known as socio-cultural factors, are the areas that involve the shared belief and attitudes of
the population.
 This inlcudes population trends such as the population growth rate, age distribution,
income distribution, career attitudes, safety emphasis, health consciousness, lifestyle

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 attitudes and cultural barriers. This dimension of the general environment represents the
demographic characteristics, norms, customs and values of the population within which
the organization operates
 These factors are of particular interest as they have a direct effect on how marketers
understand customers and what drives them. Is is especially important for marketers when
targeting certain customers. In addition, it also says something about the local workforce
and its willingness to work under certain conditions.

The social factors of India comprise of various social trends and changes like values,
festivals, languages, traditions, belief, lifestyle, demographic features and customs. The
majority of population is Hindu but there are Muslims and Sikhs are also in great number.
There are different norms in the society, which are mobility of the population, income
distribution, demographics of population, attitude to work and leisure, working hours,
conditions and standard of education and skills. The labor market of India and the social
development index show the social factors of the country, which are in deplorable
conditions and they need to be addressed. Although there is religious freedom for the
people of all religions, but the Hindu extremists have create violence against the
followers of other religions and they take action against them from time to time. They
attack the people of other religion and government seems fail to control their
atrocities, which encourage them to expand it in various other regions. These activities
have suffered the reputation of India and people hesitate to come to India to invest their
amounts or visit the country as tourists. Various gang rape cases were also reported in
different parts of the country, which show the alarming situation of the country.
The social factors refer to any changes in trends which would impact a business
environment.
For instance, the rise in India’s ageing population is resulting in a considerable rise in
pension costs and increase in the employment of older workers. India has a population of
more than 1.2 billion people with about 70% between the ages of 15 and 65. Therefore,
there are structures with percentages according to age.

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4. Technological Factors :

 These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably. This refers to technology incentives,
the level of innovation, automation, research and development (R&D) activity,
technological change and the amount of technological awareness that a market possesses.

 These factors may influence decisions to enter or not enter certain industries, to launch or
not launch certain products or to outsource production activities abroad. By knowing
what is going on technology-wise, one may be able to prevent their company from
spending a lot of money on developing a technology that would become obsolete very
soon due to disruptive technological changes elsewhere.

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.
New technologies create new products and new processes. India is already a big market
in the mobile sector and new operators will launch there their services soon.
India has made significant advancement in technology and it has prepared new smart
phone with latest specification an also did a great deal in IT technology. It is focusing on
product development and now introduced fresh cost cutting process. It provided 3G and
4G technology to its users and also facilitates them. It has developed online gambling,
MP3 players, computer games and high definition TVs and they can also do online
shopping. The new technology has reduced cost, Improve the quality of the products and
lead to the innovation in their technology. The new operators are launching their services

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 including IT development, government technology funding, new materials and its
processes, software upgrades.

5. ENVIRONMENTAL FACTORS :

 They have become important due to the increasing scarcity of raw materials, pollution targets
and carbon footprint targets set by governments.
  These factors include ecological and environmental aspects such as weather, climate,
environmental offsets and climate change which may especially affect industries such as
tourism, farming, agriculture and insurance.
 Furthermore, growing awareness of the potential impacts of climate change is affecting how
companies operate and the products they offer. This has led to many companies getting more
and more involved in practices such as corprate social responsibility (CSR) and sustainability.

India has to face different environment factors and the change in climate or weather can
affect the business like tourism, farming and insurance. The global warming is becoming
major external factor and it is significant issue to grow desire to protect environment and
it has great impact on different industries. Pollution free industry is the primary necessity
for industrial organization. The industry and urbanization has damaged the environment
and most of the premature deaths are occurred in India. The air pollution has affected the
public health and their living conditions, and it caused air pollution, planning
permissions, waste disposal, environment pressure groups and noise control. The Indian
government is aware of these pollution problems and they are taking necessary steps to
control the air pollution and the growing number of traffic on the roads, which cause
noise pollutions. These issues are serious and they need immediate attention of
government and need to be addressed in short time.
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

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 environmental challenges. Environment factors include the weather and climate change.
Changes in temperature can impact or many industries including farming, tourism and
insurance. With major climate changes occurring due to global warming and with greater
environmental awareness this external factor is becoming a significant issue for firms to
consider. The growing desire to protect the environment is having an impact on many
industries such as the travel and transportation industries and the general move towards
more environmentally friendly products and processes is affecting demand patterns and
creating business opportunities.
Environmental Factors include the weather and climate change.
The general move towards more environmental friendly products and processes is
affecting demand patterns.
Climate: The climate in India with the long monsoons and the equally long dry periods
creates a challenge which needs to be met by the organizations such that can make
businesses viable in such diverse climate.
Air pollution: Of the 3 million premature deaths in the world Infrastructure has to be that
occur each year due to outdoor and indoor air pollution, the highest number are assessed
to occur in India. Organizations have to establish internal regulations and standards in
order to help in the decrease of this ratio.

6. LEGAL FACTORS :
 Legal factors include - health and safety, equal opportunities, advertising standards,
consumer rights and laws, product labelling and product safety.
 It is clear that companies need to know what is and what is not legal in order to trade
successfully. If an organisation trades globally this becomes a very tricky area to get right as
each country has its own set of rules and regulations.
 Although these factors may have some overlap with the political factors, they include more
specific laws such as discrimination laws, antitrust laws, employment laws, consumer
protection laws, copyright and patent laws, and health and safety laws. It is clear that
companies need to know what is and what is not legal in order to trade successfully and
ethically.

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 If an organisation trades globally this becomes especially tricky since each country has its
own set of rules and regulations. In addition, you want to be aware of any potential changes
in legislation and the impact it may have on your business in the future.

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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).

Indian government has made many legal changes and introduced disability discrimination
legislation and has increased the minimum wage. These latest legal changes can affect the costs
and demand of the firms and they will boost the production of these companies. They also
focused on business operations like Trade mark Act 1969, Standard of Weights and Measure Act
1969, Essential Commodities Act 1995 and Consumer Protection Act 1986. In order to expand
business and corporate sector, Indian government implements different legislations like
Employment Law, Health and Safety regulations, Monopolies Commission, Trade and product
restrictions and international laws.

The factors influence the legal environment in which a company usually operates. In recent years
significant changes have been made in the legal environment in India which influence the way in
which companies operate. Such changes include the disability discrimination legislation, an
increase in the minimum wage and greater requirements for firms to recycle. In general legal
changes can affect a firm’s costs and demand. International Trade regulations: After 1992 India
has started to implement regulations which strengthen imports and exports in the country.
Through the foreign trade act, provisions for further development are made, as well as routes of
collaboration between the central government and the foreign trade are established ( Indian
Government , 2012)

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 INTRODUCTION OF HUNGARY

Hungary is a country in Central Europe. Spanning 93,030

square kilometers (35,920 sq mi) in the Carpathian Basin, it
borders Slovakia to the north, Ukraine to the northeast,
Austria to the northwest, Romania to the east, Serbia to the
south, Croatia to the southwest, and Slovenia to the west.
With about 10 million inhabitants, Hungary is a medium-sized member state of the European
Union. The official language is Hungarian, which is the most widely spoken Uralic language in
the world. Hungary's capital and largest city is Budapest. Other major urban areas include
Debrecen, Szeged, Miskolc, Pécs and Győ.

The "H" in the name of Hungary (and Latin Hungaria) is most likely due to early founded
historical associations with the Huns, who had settled Hungary prior to the Avars. It is a
historically Christian country while Orthodox Christianity in Hungary is associated with the
country's ethnic minorities: Armenians, Bulgarians, Greeks, Romanians, Rusyns, Ukrainians, and
Serbs.

Hungary is a middle power and has the world's 57th largest economy by nominal GDP, as well as
the 58th largest by PPP. As a substantial actor in several industrial and technological sectors, it is
the world's 35th largest exporter and 34th largest importer of goods. It is an OECD high-income
economy and ranks 45th on the Human Development Index. The country keeps up a social
security, a universal health care system, and a tuition-free university education. It also ranks as
the 17th safest country in the world. With a rich cultural history, it has contributed significantly
to arts, music, literature, sports, science and technology. It is the 11th most popular country as a
tourist destination in Europe, attracting 14.3 million international tourists in 2015. It is home to
the largest thermal water cave system and the second largest thermal lake in the world, the
largest lake in Central Europe and the largest natural grasslands in Europe. It 's achievements in
science and technology have been significant, and research and development efforts form an
integral part of the country's economy. It spent 1.4% of its gross domestic product (GDP) on
civil research and development in 2015, which is the 25th highest ratio in the world.

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Education in Hungary is predominantly public, run by the Ministry of Education. Most of the
Hungarian universities are public institutions, and students traditionally study without fee
payment. The general requirement for university is the Matura. The Hungarian public higher
education system includes universities and other higher education institutes, that provide both
education curricula and related degrees up to doctoral degree and also contribute to research
activities. Health insurance for students is free until the end of their studies. English and German
language is important in Hungarian higher education , there are a number of degree programs
that are taught in these languages, which attracts thousands of exchange students every year.
Hungary's higher education and training has been ranked 44 out of 148 countries in the Global
competitiveness Report 2014.

Hungary is a unitary, parliamentary, representative democratic republic. The Hungarian political

system operates under a framework reformed in 2012; this constitutional document is the
Fundamental Law of Hungary. Amendments generally require a two-thirds majority of
parliament; the fundamental principles of the constitution are valid in perpetuity. 199 Members
of Parliament are elected to the highest organ of state authority, the unicameral National
Assembly, every four years in a single-round first-past-the-post election with an election
threshold of 5%.

The foreign policy of Hungary is based on four basic commitments: to Atlantic co-operation, to
European integration, to international development and to international law. The Hungarian
economy is fairly open and relies strongly on international trade. Since 1989, Hungary's top
foreign policy goal has been achieving integration into Western economic and security
organizations. It joined the Partnership for Peace program in 1994 and has actively supported
the IFOR and SFOR missions in Bosnia. Hungary since 1989 has also improved its often frosty
neighborly relations by signing basic treaties with Romania, Slovakia, and Ukraine. These
renounce all outstanding territorial claims and lay the foundation for constructive relations.

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 WHAT IS STEEPLED ANALYSIS?

STEEPLED analysis is one variant of the very popular and simple strategic management
method for analysis of external environment of the organization. It is based on PEST analysis
method, with addition of additional Environmental, Ethical, Demographic and Legal factors.

 This analysis is a framework for marketers.

 This tool helps to identify all of the various external factors that might affect a business.
 The goal is to figure out just how the different factors influence business performance.
 It helps in dealing with business competition or project planning.

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 STEEPLED ANALYSIS OF HUNGARY

The STEEPLED analysis of Hungary identifies issues that affect the country's performance using
the strengths, weaknesses, opportunities, and threats (SWOT) framework.
The political landscape section discusses the evolution of the political scenario in Hungary, as
well as the country's economic, social, foreign, and defense policies. It also discusses the
country's performance according to World Bank Governance Indicators.
The economic landscape section outlines the evolution of Hungary's economy, as well as the
country's performance in terms of GDP growth, composition by sector (agriculture, industry, and
services), fiscal situation, international investment position, monetary situation, credit
disbursement, banking sector, and employment.

1. SOCIAL FACTORS :

 Ethnic groups in Hungary comprise of Magyar, Romany, German, Serb, Slovak,

Romanian, whereas the ethnic Hungarians (Magyar) accounting for almost 90 % (USDS).

 There is a freedom of religion, whereby the Roman Catholics are the biggest group.
Other Religions, such as Calvinist, Lutheran, Greek Catholic, Jewish and others represent
just a small share (USDS).

 The literacy rate in Hungary is considered as one of the highest in the world, which is due
to several government initiatives to improve education .

 To retain market share in the face of competition from the Asian economies, which have
lower costs, the country needs to continue its shift towards a more skilled industry. Basic
skills alone are insufficient to remain competitive.

2. TECHNOLOGICAL FACTORS :

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 The country is an attractive destination for high technology industries. Over the last
decades, information technology sector grew into one of the most influential factors of a
country’s international competitiveness. Nowadays, best practices in the world economy
clearly demonstrate the salience of technological advancements in the catch-up process of
an economy, in contrast to old-line approaches which considered technological
innovation as an external factor of economic development, a factor that is hardly to be
influenced by state policies.

 However, from the 1980s on, not only new theoretical approaches (see new growth
theories) but practical experiences of several countries proved technological progress can
be cultivated effectively by the state. Obviously, there are many elements in this context
that matter: not only the innovation stage but the spread of the modern technology is very
important when it comes to economic success.

 Similarly, skills in the society to use these innovative technologies are of crucial nature as
well. This briefing looks at the question and the latest data how technology spreads
throughout the Hungarian economy and society and what are the human resources
necessary to achieve a fast catch-up with the advanced countries and how these
conditions can be improved in the Hungarian society.

 In Hungary, the information and communication branch rapidly expanded in 2017, the
extent of the expansion was 17 percent as for the branch turn-over, compared to the
previous year. At the same time, the number of employed persons grew by 2.5 percent to
76.212 persons during the same period. Looking at the four-subcategories within the
branch, almost half of the revenues comes from the information and technological
services, while telecommunication services, publishing and movie industry services,
broadcasting services (TV and radio) generate the rest. The most rapidly expanding sub-
category have been movie-industry services and services related to broadcasting where
revenues could grow by more than 60 percent in 2017. Productivity of the sector is
clearly above the national average, since the gross salaries in the branch were around 520
thousand HUF in 2017, while the national average is only circa 308 thousand HUF before
taxes.

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 Not only the innovation process, and the fact how much is spent on research and
development matters as for the economic development, but the spread of the modern
technologies and their regional distribution creates different growth opportunities in the
different social and regional clusters of the society. The European Commission launched
a series of reports on regional competitiveness a few years ago, in the last edition the
European Commission published an comprehensive evaluation and regional comparison
of three main indicators of regional competitiveness: (1) basic conditions of
competitiveness (institutions, macroeconomic stability, health, infrastructure basic
education), (2) efficiency dimension (market size, labor market, higher education, long
life learning); (3) and innovation dimension (technological readiness, business
sophistication, innovation).

 In the three sub-categories, innovation is the indicator where this region performs best in
a European comparison. Central-Hungary ranks 46th in this context, while business
sophistication (the 71st) and technological readiness (170th) However, other Hungarian
regions’ performance are well below the European average. Even in these cases, these
regions perform worse at the indicators: business sophistication and technological
readiness.

3. ECONOMIC FACTORS :

 Hungary is an OECD high-income mixed economy with a very high human development
index and a skilled labour force, with the 13th lowest income inequality in the world;

 It is the 14th most complex economy according to the Economic Complexity Index. The
Hungarian economy is the 57th-largest economy in the world (out of 188 countries
measured by IMF) with $265.037 billion annual output, and ranks 49th in the world in
terms of GDP per capita measured by purchasing power parity.

 It is an export-oriented market economy with a heavy emphasis on foreign trade; thus the
country is the 35th largest export economy in the world. The country had more than $100
billion of exports in 2015, with a high trade surplus of $9.003 billion, of which 79% went

23
 to the EU and 21% was extra-EU trade. Hungary's productive capacity is more than 80%
privately owned, with 39.1% overall taxation, which funds the country's welfare
economy. On the expenditure side, household consumption is the main component of
GDP and accounts for 50% of its total, followed by gross fixed capital formation with
22% and government expenditure with 20%.

 Hungary continues to be one of the leading nations in Central and Eastern Europe for
attracting foreign direct investment: the inward FDI in the country was $119.8 billion in
2015, while Hungary invests more than $50 billion abroad. As of 2015, the key trading
partners of Hungary were Germany, Austria, Romania, Slovakia, France, Italy, Poland
and the Czech.

 Large Hungarian companies are included in the BUX, the Hungarian stock market index
listed on Budapest Stock Exchange. Well-known companies include MOL Group, the
OTP Bank, Gedeon Richter Plc., Magyar Telekom, CIG Pannonia, FHB Bank, Zwack
Unicum; Hungary also has a large number of specialized small and medium enterprises,
for example many automotive industry suppliers and technology start ups, among others.

4. ENVIRONMENTAL FACTORS :

 The environmental issues in Hungary, including climate change and endangered species,
affect these large waters and are also affected by them. In Hungary’s history, rapid
industrialization beginning in the late 1800’s and into the turn of the century is what
scholars believe to be one of the main attributes to these environmental threats.
Unfortunately, factors such as poor industrial practices, poor agricultural practices, and
lack of an affective waste management system are said by environmentalists to be adding
to these serious issues, threatening the livelihood of the Hungarian people and those
surrounding them. Acid rain, run-off, soil erosion and desertification are but some
consequences of the growing concerns for the EU.

 Additionally, soil pollution is also a major issue. One contributor is hypothesized to be

poor agricultural techniques practiced by many farmers along with the obvious

24
 contributor, namely industrial waste. These chemicals which are applied to pure and
otherwise fertile soils seep into the earth and into the groundwater, also affecting the
water pollution. Run-off occurs as a result of acid rain and deforestation eroding the soils,
affecting the lands around the bodies of water the most. The polluted soil then runs into
the various water sources. The connection between air and soil pollution then contributes
to the very dangerous water pollution issue.

 Perhaps the most important environmental issue addressed by Hungarian officials and felt
across the country is water pollution. Water pollution is more difficult to fix because it
requires more time and proper care. Moreover, it cannot be fixed unless the soil is
cleansed and the air is detoxified. The Balatan Lake is the largest lake in the Eastern
European region and is a very popular tourist destination. But Lake Balatan is also very
heavily polluted. Because it is indirectly drained by the Danube River, which not only
crosses through Hungary but many other countries, the river flow brings in polluted soil
run-off and polluted water from those surrounding countries as well.

 As a result of widespread knowledge and outrage over the polluted waters, soils, and air,
the Hungarian government has taken steps to recover from these harmful environmental
issues. Funding for these experiments is undoubtedly expensive in itself, but to
implement regulations is arguably even more economically impactful. These experiment
and results are very costly and can make people stay away from living more eco-friendly
lives. However, living in such a chemically polluted area, one must consider if one could
really put a price on the health of their families and the health of their home.

5. POLITICAL FACTORS :

 Hungary’s political system is a multiparty parliamentary democracy. It emerged out of

the former Soviet bloc Communist nations; after the transition process in 1989 and 1990
into a more liberal country, Hungary is now a stable democratic country. Although there
are still serious problems, reforms continue to push the credibility of Hungary .

25
 In the current government, the so-called centre-right Fidesz-Hungarian Civic Union
(Fidesz) holds a two-third majority, which gives the party enough power to push through
changes in the constitution (EIU April 2011).

 The current president is Pal Schmitt; the prime minister is Viktor Orban (Fidesz) (EIU
June 2011). The administrative power is shared and consists of the executive, the
judiciary, and the legislature.

 The government’s main focuses are to maintain strong relations with neighboring
countries, to introduce reforms, and to strengthen the country’s integration into the
European Union (EU) . Structural reforms aim to enable the long-term fiscal
sustainability and to improve the country’s economy as a whole, as well as the external
trade . To manage the budget deficit, the government is concerned in increasing revenues
and cutting expenditures. However, Hungary’s entrance in the Eurozone is not likely to
happen before 2020.

 Hungary’s controversial policies such as the media law and the changes in the
constitution in terms of moral and ethical standards (e.g. its anti-gay and anti-abortion
stances) resulted in international criticism from other countries and might lead to a
further separation between the left- and right-winged parties in the country.

 Recently, the EU has started infringement proceedings over a number of laws, stating that
some of the constitutional changes are in noncompliance with EU law and that they are
incompatible with the democratic system (EIU 2012). Although the country is still facing
challenges, it is expected that the political risk will further decrease in the mid- and long-
term.

6. LEGAL FACTORS :

 Equal Treatment of Nationals and Foreigners

The Hungarian Republic assures all visiting foreigners the security of human and civil
rights without discrimination based on race, skin color, sex, language, religion, political

26
 opinion, national origin, fortune, or any other issue.
In 2001, Hungary implemented a legal rights protection network to provide legal aid to
the Romani community and passed an antidiscrimination law that was introduced in 2003
as a requirement of EU membership.

 The Language of Justice

Hungarian is the official language used in court procedures but the law forbids any
language based discrimination. Thus, in case of a penal procedure each person has the
right to use his or her first language both orally and in writing. Moreover, the use of a
defence attorney is compulsory if the defender has an insufficient level of Hungarian.

 Recourse to an Interpreter

Any person for whom Hungarian is not the first language must be supplied with a
translator paid for by the Hungarian State if asked to stand in court.

 Legal Similarities

The sources of Hungarian law are the Acts of Parliament, governmental and ministerial
decrees, which are valid only if published in the Official Gazette, and decrees of local
governments. The legal system of the Republic of Hungary accepts the universally
recognised rules and regulations of International Law, and will align the internal laws and
statutes of the country with any obligations assumed under International Law.

7. ETHICAL FACTORS :

 More and more thoughtful Hungarians are raising their voices, calling attention to a
moral and social crisis in their country. The deplorable state of Hungarian society has
been a phenomenon of long standing.

 Hungarian education is in serious crisis. The new centralized system created by the
second Orbán government barely functions, and student performance is
deteriorating. Segregation of schools has become a reality and, with it, social mobility has
been further stifled. The autonomy of the universities is long gone.

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   Healthcare is inadequate because, among other things, there are not enough doctors and
nurses. Hungarian bureaucracy has always been cumbersome and expensive, but by now
it is close to collapsing because political loyalty is more important to Fidesz and its leader
than professional competence.

 Corruption has been growing steadily, the contempt for others, racism, a lack of
solidarity, the widespread vulgarity, the churches’ total indifference to the sufferings of
the asylum seekers, the cowardice of individuals who don’t speak up against blatantly
illegal acts of the government.

8. DEMOGRAPHIC FACTORS :

 Hungary's population has been declining for the last 37 years.

Population 9 798 000 (2017 January)

Growth rate -3.5 births/1,000 population (2016)

Birth rate 9.5 births/1,000 population (2016)

Death rate 12.9 deaths/1,000 population (2016)

Life expectancy 74.79 years (2012)

 • male 72.43 years (2016)

 • female 79.21 years (2016)

Fertility rate 1.49 children born/woman (2016)

Infant mortality rate 4.0 / 1000 births (2016)

Age structure

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 0–14 years 14.8%

15–64 years 67.7%

65 and over 17.5%

Sex ratio

At birth 1.06 male(s)/female (2013 est.)

Under 15 1.06 male(s)/female

15–64 years 0.96 male(s)/female

65 and over 0.59 male(s)/female

Nationality

Major ethnic Hungarians

Language spoken Hungarian

EDUCATION IN INDIA

The essence of Human Resource Development is education, which plays a significant and
remedial role in balancing the socio-economic framework of the country. 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. The country has become the
second largest market for e-learning after the US. The education and training sector in India has
witnessed some major investments and developments in the recent past.

Some of them are:

29
 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 Skills Acquisition and Knowledge
Awareness for Livelihood Promotion 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 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.

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 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.

 In 2030, it is estimated that India’s higher education will: Adopt transformative and
innovative approaches in Higher education.

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 CONSULTANCY SECTORS OF INDIA

Consultancy sectors include –

Training , Placement, Business

TRAINING :
Training is a program that helps employees learn specific knowledge or skills to improve
performance in their current roles. Development is more expansive and focuses on employee
growth and future performance, rather than an immediate job role.Good training and
development programs help you retain the right people and grow profits. As the battle for top
talent becomes more competitive, employee training and development programs are more
important than ever. Hiring top talent takes time and money, and how you engage and develop
that talent from the time they are first on boarded impacts retention and business growth.
It’s not just about retention. Employee training and development programs directly impact
your bottom line.
Points for creating high-impact employee training:
1. Identify Business Impact
2. Analyze Skill Gaps
3. Layer Training Methods
4. Evaluate Effectiveness and Sustain Gains
Some India specific statistics are:
• India training and development spend is just under 1 Billion USD per year.
• India Skills sector is expected to become an over $20bn market opportunity yearly
• Currently, 90% of the jobs in India are skill-based, a sharp contradiction to the current figure
of only 6% trained workforce in India.
• Currently the system has the capacity to train only 3 million youth against 12 million
entering the labor force annually.
This comes from the fact that India is one of the fastest growing economies and such an
economy always demands highly skilled workforce. The back bone of the growth of any
economy is its learning and development mechanism. The current growth scenario in India is

32
bestowed with adequate schemes and funds. The most researched fact-finding in this space will
be – What is the ideal set of training. learning mechanisms to be in place. This point to
unprecedented demand of trainers and training infrastructure in coming years.
The biggest bottle neck in training industry is perceived as lack of enough skilled trainers in the
market. This is just an answer of convenience.
The real bottleneck is lack of solution which enables the reach out to the trainers already
available in market. Half the problem gets resolved if we find a structured easily accessible and
usable solution to connect the givers with takers.
The training fraternity system is crowded and entangled to such an extent that a trainer is unable
to reach out to and fix an issue next door, but is willing to travels miles away to experiment and
find their customer investing his precious time, money and effort. The result is; Loss of
efficiency, loss of productivity and deviation from core capability building related activities. In
advanced countries, people specialize their job at certain stage - the result is focused and
innovation in their area of expertise.
With India catching up with world technology leaders, a transition from generalist to a specialist
is inevitable. India is already witnessing a sea of change in young talent attitude and aptitude
towards start up and innovation.
India is already one of the world’s leading start-up eco-system. With 100 smart city project
initiated by the central government, the economy is already getting the push it needs from the
coveted and credible sources. The three pillars of any startup can be defined as –
1) The initiation by the young talents,
2) Disruption through innovation and
3) Sustenance by support systems like Government & Investment sources.
These 3 pillars are growing in a well-balanced trajectory signaling that the Indian growth story
might be well ahead of its own predictions.

PLACEMENT :
This industry includes companies which list employment vacancies, place applicant in
employment, supply temporary workforce and all other employment related services. Placement
industry is broadly classified as:
o Temporary/Flexi Placement

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 o Permanent recruitment
o Other Employment Services

The Placement Industry includes companies which list employment vacancies, place applicants
in employment, supply temporary workforce and all other employment related services. The
industry is broadly classified as:

 Temporary/Flexi Placement:

Firms which retain workers and supply temporary workforce to other companies for specific
assignments.

 Permanent recruitment:

Sourcing, screening, and on-boarding of candidates from junior level to positions to CXO-
level positions (CXO level hiring is called Search).

 Other Employment Services: Other categories primarily include

- Payroll administration

- Recruitment process outsourcing

- HR management and consulting

- Employment training

- Online job portals

India has one of the largest flexible staffing workforce numbers in the world, next only
to China and the US.

· The government employs a temporary workforce of about 12.3 million.

· Flexi staffing market is poised to grow 10% to 15% year-on-year.

34
 · The retail sector is expected to witness growth to the tune of 10% to 12% per annum,
making it the most lucrative option for a massive growth in flexible staffing.

· The penetration of contract staff in the IT and [IT-enabled-Services] industry is also

likely to increase from 10% to 20% in the next few years.

· According to the Indian Staffing Federation, there are at present 1.3 million temporary
workers in the organised sector, which is likely to increase to 9 million workers in the next
10 years.

Target industries for Placement Businesses:

The major industries being served by Staffing industry include:

· IT/ITES

· Retail Industry

· Public Administration; Education sector

BUSINESS :

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

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 institutions and laboratories supporting several domestic consultancy organizations

35
directly or indirectly at a reasonable cost, according to reports.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

36
 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.

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
client’s requirement by outsourcing their project to another firm while maintaining
responsibility for the overall project.

Management Consulting Industry– A Major Contributon :

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 Organizations

keeping in mind the differences of the domestic market in India with respect to the
Globalmarket, 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

37
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 IN HUNGARY :

Education in Hungary is predominantly public, run by the Ministry of Human Resources. The
system is partly flexible and bridges exist, graduates from a vocational school can achieve a two
years program to have access to vocational higher education for instance.The Trends in
International Mathematics and Science Study (TIMSS) rated 13–14-year-old pupils in Hungary
among the bests in the world for maths and science.

Most of the Hungarian universities are public institutions, and students traditionally study
without fee payment. The general requirement for university is the Matura. The Hungarian
public higher education system includes universities and other higher education institutes, that
provide both education curricula and related degrees up to doctoral degree and also contribute to
research activities. Health insurance for students is free until the end of their studies. English and
German language is important in Hungarian higher education, there are a number of degree
programs that are taught in these languages, which attracts thousands of exchange students every
year. Hungary's higher education and training has been ranked 44 out of 148 countries in the
Global competitiveness Report 2014.

Today there are 67 higher education institutions in Hungary, ranging from small colleges to top
research universities.

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Hungary has a long tradition of higher education reflecting the existence of established
knowledge economy. The established universities in Hungary include some of the oldest in the
world, the first was the University of Pécs founded in 1367 which is still functioning, although in
the year 1276, the university of Veszprém was destroyed by the troops of Peter Csák, but it was
never rebuilt. Sigismund established Óbuda University in 1395. The Budapest University of
Technology and Economics is considered the oldest institute of technology in the world with
university rank and structure, its legal predecessor the Institutum Geometrico-Hydrotechnicum
was founded in 1782 by Emperor Joseph II.

Social Enviroment of Education –

According to the 2001 census, the population of Hungary was 10,198,000, about half a million
less than the figure of twenty years earlier. By 2005 the population dropped to 10,077,000. On 1
January 2005, due to the extremely low number of live births in the preceding years the size of
the 0-4-year-old population was smaller than the next age groups of five-year increments up to
the age group 60-64. There are major differences in the size of the various generations.

The official language of instruction is Hungarian, but a number of ethnic and national minorities
(e.g. German, Romanian, Slovene, Serb and Croatian) have minority educational institutions
with their own languages as first or second language of instruction at primary and secondary
level of teaching. According to the 2003 survey, the rate of Romani children in the population
entering school education in 2008-2009 is expected to be around 15%.

Its education provides following benefits-

 Hungary offers affordable tuition fees and living costs within the European Union and
Schengen area;

 A number of Nobel Prize Winners and scientific inventors were educated there;

 There are easier admission procedures and fewer documents are needed for obtaining
admission;

 Hungary offers different types of scholarships for foreigners;

39
 The cost of student accommodation in Hungary is lower than in most Western European
Countries and Scandinavia.

 Many education programmes are offered in English and/or German;

 Hungarian embassies issue education visas more easily than other European Union and
Schengen Member States;

 Residence permits issued in Hungary for foreign students allow them to travel to other
Schengen countries without any further visa;

 A number of low cost flights connect Hungarian cities to other countries and popular travel
destinations;

 There are employment opportunities in the European Union during education years and after
graduation, etc

CONSULTANCY OF HUNGARY

Consultancy sectors include –

Training , Placement, Business

TRAINING :

Schools often provide only a weak simulation of real work environments, equipment in training
workshops can easily become obsolete, and trainers may be unfamiliar with the latest
technologies and techniques. A recent survey of employers (Andréné, 2006) reports
dissatisfaction with the quality of practical training at training workshops and a wish for more
up-to-date theoretical education and increased work-based practical training. Employers also like
to see an improvement in the generic skills of VET graduates, such as problem-solving and
communication skills and the ability to use ICTs and foreign languages. Many VET schools in
Hungary struggle to recruit and retain trainers with appropriate skills: today, many trainers are
close to retirement and there are few young trainers. Because their wages are low, some trainers
40
also work part-time at their occupation and thus dedicate less time to teaching although this is
also an opportunity to ensure that their knowledge is up-to-date. Interviews with researchers and
visits to some schools indicated that some trainers who were willing to work at schools had been
made redundant (often during the transition period) and have been out of the labour market for
years, so that their knowledge of current practices and needs may be limited.
According to the government, it is the intention of the recently introduced regional integrated
VET centres to address this challenge by creating a training environment similar to a workplace.
While these centres may provide a training environment with up-to-date equipment, they are
unlikely to offer some major advantages of workplaces and do not resolve some major
weaknesses of training workshops (e.g. the difficulty of recruiting good quality trainers).
Relatively little training in the workplace According to PISA 2006 data, relatively few
Hungarian 15-year-olds are in schools in which more than half of the students participate in
training with local businesses, even compared to countries in which 15-year-olds are in
comprehensive education
A relatively small number of hours is spent in practical training in the VET grades of vocational
secondary schools. work-based training has been increasing. The number of apprenticeship
contracts increased from 6 616 in 1998 to 39 000 in 2007 (Hungarian Ministry of Labour and
Social Affairs, 2008) . This increase mainly concerns apprenticeships linked to vocational
training schools; apprenticeship training remains weak in post-secondary VET programmes .
The review of vocational education and training (VET) in Hungary is part of “Learning for Jobs”,
an OECD programme of analytical work and individual country reviews designed to help
countries make their VET systems more responsive to labour market needs. It presents the
main challenges faced by the Hungarian VET system and proposes an interconnected package
of five policy recommendations. These are presented in terms of the challenge, the
recommendation, supporting arguments and suggestions for implementation. Better data on
programme outcomes facilitate public decisions about the provision of VET. Since these data

would indicate which VET graduates are in demand in the labour market, they would help
school maintainers and schools plan the provision of VET. Information on labour market
outcomes and the availability of work placements would help to adjust the provision of VET to
labour market needs. Currently, pedagogical services operating under the supervision of

41
municipal or county authorities offer career information and advice to primary and secondary
students. Employment information and counselling centres which operate under labour offices,
could also play an active role by reaching out to schools. A compulsory framework which
obliges schools and such independent, external institutions to co-operate might be helpful .

PLACEMENT :
Hungary maintains an open economy and its high-quality infrastructure and central location are
features that make it an attractive destination for investment. Despite the many challenges that
accompany the local business environment, Hungary remains an attractive market for U.S.
investment and exports.  Top reasons for doing business in Hungary include:
 One of the fastest growing economies in the European Union .

 Central location, considered to be the gateway to Central/Southeast Europe

 Well-educated and trained workforce
 Supply chain opportunities in automotive and electronics industries
 Government emphasis on innovation and knowledge-based technologies

EU funding through 2020 has driven Hungarian growth as it has been used for more than 60,000
projects to improve telecommunications, energy and highway infrastructure.   As part of the
National Development Plan (2014 - 2020), Hungary allocated approximately $33 billion to
projects ranging from tourism and infrastructure development to healthcare and environment
protection.  However, the EU will tighten rules on which development projects are eligible for
EU funding thereby creating a demand on Hungary’s national budget. The placement sector is
quite strong and feasible.
The Automotive Sector is a top industry of the nation even as it produces 21% of the overall net
exports. The current business scenario deals with 600 firms hiring a total of 100,000 persons at a
go. For example , Audi, Suzuki.
The pharmaceutical business is a top , well organized and flourishing division of the country’s
economy.

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Its presence is remarkable even in the food industry. It recruits a large part of share of people
from all over the globe having successful business with time. It is the sole net exporter of
agricultural & food goods in the entire area accounting to 6 % of the nation’s today exports.
The Hungarian ICT sector has also developed speedily recruiting about large amount of people
specializing in IT services, IT outsourcing, software development etc.

BUSINESS :
Hungary continues to be one of the leading nations for attracting foreign direct investment in
Central and Eastern Europe, the inward FDI in the country was $119.8 billion in 2015, while
Hungary invest more than $50 billion abroad. As of 2015, the key trading partners of Hungary
were Germany, Austria, Romania, Slovakia, France, Italy, Poland and Czech Republic. Major
industries include food processing, pharmaceuticals, motor vehicles, information technology,
chemicals, metallurgy, machinery, electrical goods, and tourism (in 2014 Hungary welcomed
12.1 million international tourists). Hungary is the largest electronics producer in Central and
Eastern Europe. Electronics manufacturing and research are among the main drivers of
innovation and economic growth in the country. In the past 20 years Hungary has also grown
into a major center for mobile technology, information security, and related hardware research.

Agriculture-
Agriculture accounted for 4.3% of GDP in 2008 and along with the food industry occupied
roughly 7.7% of the labour force. These two figures represent only the primary agricultural
production along with related businesses, agriculture makes up about 13% of the GDP.
Hungarian agriculture is virtually self-sufficient and due to traditional reasons export-oriented.
The most important crops are wheat, corn, sunflower, potato, sugar beet, canola and a wide
variety of fruits (notably apple, peach, pear, grape, watermelon, plum etc.).

Health care-
Hungary spent 7.4% of the GDP on health care in 2009 (it was 7.0% in 2000), lower than the
average of the OECD. Total health expenditure was 1,511 US$ per capita in 2009, 1,053 US$
governmental-fund (69.7%) and 458 US$ private-fund (30.3%).

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Industry-
The main sectors of Hungarian industry are heavy industry (mining, metallurgy, machine and
steel production), energy production, mechanical engineering, chemicals, food industry and
automobile production. The industry is leaning mainly on processing industry and (including
construction) accounted for 29, 32% of GDP in 2008. The leading industry is machinery,
followed by chemical industry (plastic production, pharmaceuticals), while mining, metallurgy
and textile industry seemed to be losing importance in the past two decades. In spite of the
significant drop in the last decade, food industry is still giving up to 14% of total industrial
production and amounts to 7-8% of the country's exports.

Automobile production-
Hungary is a favoured destination of foreign investors of automotive industry resulting in the
presence of General Motors, Magyar Suzuki, Mercedes-Benz, and Audi factory in Central
Europe.
17% of the total Hungarian exports comes from the exports of Audi, Opel and Suzuki. The sector
employs about 90.000 people in more than 350 car component manufacturing companies.

Services-
The tertiary sector accounted for 64% of GDP in 2007 and its role in the Hungarian economy is
steadily growing due to constant investments into transport and other services in the last 15
years.

Tourism-
Hungary was the world's 24th most visited country in 2011. The Hungarian spa culture is world-
famous, with thermal baths of all sorts and over 50 spa hotels located in many towns, each of
which offer the opportunity of a pleasant, relaxing holiday and a wide range of quality medical
and beauty treatments.

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 EDUCATION SYSYTEM – INDIA & HUNGARY

The first and foremost difference I find in India and Hungary Education Systems is the
inclusion of foreign universities culture. Several American and British Universities have
already come up with their campuses in Hungary for not only Hungarian but also
international students while at the other hand, the Indian education system is still
dominated by the major government giants like IITs, NITs, Central/State Universities and
after that many prominent private institutions i.e.BITS, Jaypee etc. According to All India
Council of Technical Education (AICTE), India has more than 10,000 engineering
institutions in 2016 which offer a wide variety of study options to students. In fact, these
institutions are not only catering Indian students but also thousands of students from
Nepal, Sri Lanka, Bhutan and many African countries also opt Indian universities and
colleges for higher education degrees.

The second difference is the opportunity of intake. In Hungary, students get the
opportunity of three intakes in a year. Moreover few institutions takes admission for four
times in a year which is double than India where maximum two intakes are allowed in a
year. Here Hungarian institutions have a competitive advantage.

Another difference in the higher education systems of Hungary and India which I could
personally seem is the difference between assessment methodologies. In India, AICTE
and other regulatory bodies are still struggling with finding the deciding line in many
areas like plagiarism, documentation methods and assessments of student evaluation.
Moreover, there are variations and discrepancies in policies related to higher education in
India. At the other side, hungary clarifies all qualifications and academicnachievements
in higher education and these qualifications are directly linked with attainment goals of
educational delivery.

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 COMPARISON BETWEEN INDIA AND HUNGARY

Factors comparing between India and Hungary:

Political

In India, The political environment is highly determined by diverse factors such as political
stability and government’s policies, the ideologies of various political parties, politicians’
interests, as well as the influence political forums possess and the political system of the country
is strong and different political parties take part in active politics. Whereas, Hungary’s political
system is a multiparty parliamentary democracy and stable democratic country. And the current
government, the so-called centre-right Fidesz- Hungarian Civic Union holds a majority, which
gives the party enough power to push through changes in the constitution.

2. Economic

In India the annual growth rate is 7.2 % , economic freedom score is 55.2 , 129th freest in the
2019 Index, 5th (nominal) rank and 3rd rank (PPP) .In Hungary the annual growth rate is 4.0% ,
economic freedom score is 65.0, 31st freest in the 2019 Index, 53th rank (nominal) , 57 th
(PPP).

3. Social

India, The social factors of India comprise of various social trends and changes like values,
festivals, languages, traditions, belief, lifestyle, demographic features and customs. Although
there is religious freedom for the people of all religions, but the Hindu extremists have create
violence against the followers of other religions and they take action against them from time to
time. India has a population of more than 1.2 billion people with about 70% between the ages of
15 and 65. Whereas, Hungary’s Ethnic groups in Hungary comprise of Magyar, Romany,
German, Serb, Slovak and there is freedom of religion, whereby the Roman Catholics are the
biggest group. Other Religions, such as Calvinist, Lutheran, Greek Catholic, Jewish and others.
And literacy rate in Hungary is considered as one of the highest in the world, which is due to
several government initiatives to improve education .

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4. Technological:

India is one of the most growing technologically advanced countries in the world. India is a key
destination for outsourcing work in IT and even growing with the social media. India is already a
big market in the mobile sector and new operators will launch there their services soon. India has
made significant advancement in technology and it has prepared new smart phone with latest
specification an also did a great deal in IT technology and even provides 3G and 4G technology.
Whereas, Hungary is an attractive destination for high technology industries. And to be grown in
IT sector. Technology spreads throughout the Hungarian economy and society and what are the
human resources necessary to achieve a fast catch-up with the advanced countries and how these
conditions can be improved in the Hungarian society. In the three sub-categories, innovation is
the indicator where this region performs best in a European comparison. Central-Hungary ranks
46 th in this context, while business sophistication (the 71 st ) and technological readiness (170
th ) However, other Hungarian regions’ performance are well below the European average.

5. Environmental:

In India, it has to face different environment factors and the change in climate or weather can
affect the business like tourism, farming and insurance. The global warming is becoming major
external factor and it is significant issue to grow desire to protect environment and it has great
impact on different industries. The industry and urbanization has damaged the. The air pollution
has affected the public health and their living conditions, and it caused air pollution, planning
permissions, waste disposal, environment pressure groups and noise control and government
after knowing this has started taking necessary steps to control such environment. In Hungary,
The environmental issues in Hungary, including climate change and endangered species, affect
these large waters and are also affected by them. In Hungary’s history, rapid industrialization
into the turn of the century is what scholars believe to be one of the main attributes to these
environmental threats. Perhaps the most important environmental issue addressed by Hungarian
officials and felt across the country is water pollution. As a result of widespread knowledge and
outrage over the polluted waters, soils, and air, the Hungarian government has taken steps to
recover from these harmful environmental issues. Funding for these experiments is undoubtedly
expensive in itself, but to implement regulations is arguably even more economically impactful.

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6. Legal:

In India, legal factors include - health and safety, equal opportunities, advertising standards,
consumer rights and laws, product labeling and product safety. Although legal factors may have
some overlap with the political factors, they include more specific laws such as discrimination
laws, antitrust laws etc. It is clear that companies need to know what is and what is not legal in
order to trade successfully and ethically. In Hungary’s legal concept, Republic assures all
visiting foreigners the security of human and civil rights without discrimination based on race,
skin color, sex, language, religion, political opinion, national origin, fortune, or any other issue
and official language used in court procedures but the law forbids any language based
discrimination. The legal system of the Republic of Hungary accepts the universally recognised
rules and regulations of International Law, and will align the internal laws and statutes of the
country with any obligations assumed under International Law.

7. Ethical

In India, ethics has its origin in its religious and philosophical thinking, various religious faiths
have flourished here .It is considered to be a perfect destination due to various factors like low
input costs, easy access to labor, low rate of wages and a massive consumer base. And in
Hungary, Hungarians are raising their voices, calling attention to a moral and social crisis in their
country. But their education is in crisis as new centralized system created by the second Orbán
government barely functions, and student performance is deteriorating and with this Corruption
has been growing steadily, the contempt for others, racism, a lack of solidarity, the widespread
vulgarity, the churches’ total indifference to the sufferings of the asylum seekers, the cowardice
of individuals who don’t speak up against blatantly illegal acts of the government.

8. Demographic:

In India, it has a good amount of population having birth and death rates around the global
average and effect of immigration from or immigration to India on the overall growth of
population has been negligible throughout modern history. But comparatively to Hungary, carry
a good demographic features. Whereas in Hungary, the population is declining from past 37
years. It is facing a demographic crisis with a population that is slowly contracting and

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considered to be second worst negative growth among EU countries and inhabited by many
people over its long history, including the Celts, Romans, Slavs, Huns, Avars, and Gepids.

CONCLUSION :

India and Hungary are one of the recognized nations all over the world in respect to its PESTEL
and STEEPLED factors. The education and consultancy sector , being a powerful ideology for a
nation’s success, leads to intensive growth , both positive as well as negative. Hungary , has a
remarkable growth in recent years based on all its factors . India , rich in inputs falls lack in
flashing outputs but considers labourforce and manmade sector powerful. Therefore, Hungary –
India economic cooperation is a good case study that strongly suggests that states will continue
to matter despite the seemingly unstoppable force of globalization. Nevertheless, the role of the
private sector is also important to augment the economic relations between both the countries.

THANK YOU

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 REFERENCES

 http://hungarianspectrum.org/2015/10/04/the-moral-health-of-hungarian-society/

 https://businessculture.org/eastern-europe/hungary/

 https://pestleanalysis.com/steep-and-steeple-analysis/

 https://www.britannica.com/place/India

 https://www.researchandmarkets.com/reports/3086368/country-analysis-report-hungary-
in-depth-pestle

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