DOING BUSINESS IN INDIA:

UNIT - 1
Key Sectors in India:
Indian Economy is categorized into three sectors namely:
1. Primary Sector
2. Secondary Sector
3. Tertiary Sector

Primary Sector:
• Primary Sector is directly dependent on environment for manufacture and production.
For example, agriculture, mining, farming etc.

Secondary Sector:
• Secondary Sector adds value to the product by transforming raw materials into valuable
products. For example, processing and construction industries.

Tertiary Sector:
• Tertiary Sector is involved in production and exchange of services. For example,
transportation, communication, and other services of such kind.
• Tertiary Sector is also known as Services Sector as it facilitates the production and
exchanges of services.
Differences between Primary, Secondary
and Tertiary Sector

Primary Sector Secondary Sector Tertiary Sector

It is known as the It is known as the It is known as the
agricultural and allied manufacturing sector service sector
sector services
This sector provides This sector transforms The tertiary sector
raw materials for one good into another provides useful
goods and services by creating more services for the
utility from it primary and secondary
sectors
The primary sector is The secondary sector This sector is well
unorganized and uses is organized and uses organized and uses
traditional techniques better methods of modern-day logistics
production techniques to perform
its functions
Contd..

Primary Sector Secondary Sector Tertiary Sector

Activities in this It includes Banking, insurance
sector consist of manufacturing units, trade nad
agriculture, forestry small scale units, communications come
and mining large firms and under this sector
multinational
corporations
In most developing The employment rate This sector’s
nations such as India, is in equilibrium as a employment share has
this sector is where a specialized set of increased in the
large section of the skills is required to ensuing years
workforce is find employment in
employed, in this sector
comparison to
developed nations
PESTLE Analysis:
• https://w ww.youtube.com/watch?v=DNPwVaVQUF4 (IPL
Bio Bubble)
• https://www.youtube.com/watch?v=Rn96cSKZarU
PEST Analysis:
POLITICAL:
1) Legislation such as the minimum wage or anti discrimination laws.
2) Market regulations
3) Trade agreements, tariffs or restrictions
4) Tax levies and tax breaks
5) Type of government regime e.g. communist, democratic, dictatorship

E.g. Donald Trump

Contd..
ECONOMICAL:
1) Home economy situation and trends
2) Overseas economies and trends
3) Market routes and distribution trends
4) Interest and exchange rates
5) International trade/monetary issues (anti dumping laws)

E.g. Fire works - Sivakasi

Contd..
SOCIAL:
1) Lifestyle trends
2) Demographics
3) Consumer attitudes and opinions
4) Brand, company image
5) Consumer buying patterns
6) Fashion and role models
7) Ethnic/religious factors
8) Advertising and publicity
9) Ethical issues

E.g. Corn Flakes

Contd..
TECHNOLOGICAL:
1) Competing technology development
2) Associated/dependent technologies
3) Replacement technology/solutions
4) Technology access, licencing, patents
5) Consumer buying mechanisms/technology

E.g. Nokia Phones

Contd..
LEGAL:
Legal factors have to do with all the legislative and procedural components in
an economy. Also, this takes into account certain standards that your business
might have to meet in order to start production/promotion.

1) Employment law
2) Consumer protection
3) Industry-specific regulations
4) Competitive regulations
5) Future legislation
6) Environmental regulations

E.g. Reliance Jamnagar Refinery - 1.24 million Barrels Stream Day

Contd..
ENVIRONMENTAL:
Environmental factors have to do with geographical locations and other
related environmental factors that may influence upon the nature of the
trade you’re in. For example, agri-businesses hugely depend on this form
of analysis.

1) Ecological
2) Environmental issues
3) Staff attitudes
4) Management style
5) Environmental regulations
6) Consumer values
E.g. Ultratech Cement
Importance and Necessity of Labour Laws
1) Improves industrial relation i.e. employee-employer
relations and minimizes industrial disputes.
2) Prospects workers form exploitation by the employers or
management
3) Helps workers in getting fair wages
4) Minimizes labour unrest
5) Reduces conflicts and strikes etc.
6) Ensures job security for workers
7) Fixed rest pauses and work hours etc.
8) Provides compensation to workers, who are victims of
accidents.
Objectives of Labour Laws:
1) Fair Wages
2) Equal Opportunity
3) Protecting Children
4) Protecting the Disabled
5) Working Hours

Principles of Labour Law:

6) Protection from Discrimination
7) Compensation
8) Labor Unions
9) Creating a Union
Employment Law Framework:
Important Labour Laws

1) The Apprentices Act - 1961

2) The Payment of Wages Act -1936
3) The Workmens’ Compensation Act -1923
4) The Factories Act -1948
5) The Industrial Disputes Act - 1947
6) The Employees PF Act - 1952
7) The Employees State Insurance Act - 1948
8) The Maternity Benefit Act - 1961
9) The Payment of Bonus Act - 1965
10) The Payment of Gratuity Act - 1972
Contd..
The Apprentices Act – 1961:
• The Main Objectives of Apprentices Act, 1961 is “Promotion of
New Manpower at skills”. Improvement / Refinement of Old Skills
through Theoretical & Practical Training in number of “Trades &
Occupation”. The Scheme is also extended to Engineers & Diploma
Holders.

The Payment of Wages Act -1936:

• The “Payment of Wages Act 1936” regulates payment of wages to
Employees (Direct & Indirect). The Act is intended to be a remedy
against unauthorized deductions made by the “Employer” or
unjustified delay in payment of wages. All Employees are covered
under the Act, those are drawing Average wages Rs:- 10000/- per
month.
Contd..

The Workmens’ Compensation Act -1923:

• This is an Act to provide for the payment by certain classes of
Employers to their workmen (Employee) of compensation for injury
by accident during the course of Employment. The Act is applicable
all over the India & came into force w.e.f. 01st July 1924.

The Factories Act -1948:

• This Act has been come into force to Consolidate and Amend the
Law Regulating the Workers working in the factories. To ensure the
Safeguard the interest of workers and Protect them from
exploitation, the Act prescribes certain standards with regard to
Safety, Welfare and Working Hours of workers, apart from other
provisions
Contd..
The Industrial Disputes Act – 1947:
• The Main Objective of the Act to make Provision for the
Investigation & Settlement of “Industrial Disputes” between
Employer & Employee, and for certain other purposes. This Act
extends to the whole of India, w.e.f. 01st April, 1947.

The Employees PF Act – 1952:

• The Mission of EPFO, is to Extend the Reach and quality of publicly
managed Old-age Income Security programs through consistent and
ever-improving standards of compliance and benefit delivery in a
manner that wins the approval and confidence of Indians. The EPF
Act, 1952 was enacted by Parliament and came into force w.e.f.
04th March, 1952.
Contd..

The Employees State Insurance Act – 1948:

• The ESI Scheme is an Integrated Measure of “Social Insurance” come to
the Life through the “Employees' State Insurance Act – 1948”, and is
Designed to complete the task of Protecting ‘Employees' as defined in
the ESI Act – 1948, against the Hazards of Sickness, Maternity,
Disablement or Death due to Employment Injury & to provide full
Medical Care to Insured Persons (IP) & their Families.

The Maternity Benefit Act – 1961:

• The Maternity Leave & Benefit Act is to Protect the Dignity of
Motherhood by providing the Complete & Healthy Care to the Women &
Her Child, when she is not able to perform her duty due to her health
condition. In the modern world, as the participation of Women
Employees is growing in Every Industry, so the need of the Maternity
Leave & other Benefits are becoming increasingly common.
Contd..
The Payment of Bonus Act – 1965:
• An Act to Provide for the “Payment of Bonus” to Persons employed
in certain Establishments on the basis of Profits or on the basis of
Production or Productivity & for matters connected therewith.

The Payment of Gratuity Act – 1972:

• An act to Provide for a Scheme for the Payment of Gratuity to
Employees engaged in “Factories, Mines, Oilfields, Plantations,
Ports, Railway Companies, Shops or Other Establishments” and for
matters connected therewith or incidental thereto, so far as it
Relates to “Ports & Plantations” it does not apply to the State of
Jammu and Kashmir.
Socio Cultural Factors affecting
Business:
https://www.youtube.com/watch?v=EncsM-rRg0Y (KFC Pulav
ad)
https://www.youtube.com/watch?v=OAVteJHRefE (5 rice bowl)
https://www.youtube.com/watch?v=CV4YzLSENXo (zingeratha)
https://www.youtube.com/watch?v=2i_OMjHR-DM (KFC Veg
Ad)
https://www.youtube.com/watch?v=pMLrVP_E-jA (MC Donalds
all countries)

• Oyo Hotels
Socio Cultural Factors affecting
Business:
1) Lifestyles
2) Buying habits
3) Education level
4) Emphasis on safety
5) Religion and beliefs
6) Health consciousness
7) Average disposable income level
8) Social classes
9) Family size and structure
Contd..
10)Minorities
11) Attitudes toward saving and investing
12) Attitudes toward green or ecological products
13) Population growth rate
14) Age distribution and life expectancy rates
15) Attitudes toward imported products and services
16) Attitudes toward work, career, leisure and retirement
17) Attitudes toward customer service and product quality
Other factors of Socio-cultural and
Institutional Context:
1) Shift from rural to urban life;
2) From agricultural to industrial economy;
3) The introduction of democratic pattern and their focus on
individual freedom and initiative;
4) Keen competition for economic survival so that both parents
are forced to work
5) Greater opportunities for personal and professional
enhancement;
6) Increased participation of women in activities outside the
house
Infrastructure:
• Infrastructure is the general term for the basic physical
systems of a business, region, or nation. Examples of
infrastructure include
1) transportation systems,
2) communication networks,
3) sewage,
4) water, and
5) electric systems.

• These systems tend to be capital intensive and high-cost

investments, and are vital to a country's economic
development and prosperity.
Types of Infrastructure:

Soft Infrastructure:
• These types of infrastructure make up institutions that help maintain the
economy. These usually require human capital and help deliver certain
services to the population. Examples include the healthcare system, financial
institutions, governmental systems, law enforcement, and education
systems. 

Hard Infrastructure:
• These make up the physical systems that make it necessary to run a modern,
industrialized nation. Examples include roads, highways, bridges, as well as
the capital/assets needed to make them operational (transit buses, vehicles,
oil rigs/refineries). 

Critical Infrastructure:
• These are assets defined by a government as being essential to the
functioning of a society and economy, such as facilities for shelter and
heating, telecommunication, public health, agriculture, etc
Objectives of Business Ethics:
1) A business should aim to have fair dealing with everyone dealing
with it.
2) Ethics should be fixed for everyone working in the organisation
at any level and their implementation should be linked with
reward- punishment system.
3) Any violation of ethics should be detected at the earliest and
remedial measures taken immediately.
4) Business ethics should be based on broad guidelines of what
should be done and what should be avoided.
5) The ethics should be based on the perception of what is right.

Sources of Business Ethics:

6) Religion
7) Culture
8) Law
Importance of Business Ethics:

1. Corresponds to Basic Human Needs:

• The basic need of every human being is that they want to be a part
of the organization which they can respect and be proud of, because
they perceive it to be ethical.

2. Credibility in the Public:

• Ethical values of an organization create credibility in the public eye.
People will like to buy the product of a company if they believe that
the company is honest and is offering value for money.

3. Credibility with the Employees:

• When employees are convinced of the ethical values of the
organisation they are working for, they hold the organization in high
esteem. It creates common goals, values and language.
Contd..
4. Better Decision Making:
• Respect for ethics will force a management to take various economic,
social and ethical aspects into consideration while taking the decisions.
Decision making will be better if the decisions are in the interest of the
public, employees and company’s own long term good.

5. Profitability:
• Being ethical does not mean not making any profits. Every organisation
has a responsibility towards itself also i.e., to earn profits. Ethical
companies are bound to be successful and more profitable in the long run
though in the short run they can lose money.

6. Protection of Society:
• Ethics can protect the society in a better way than even the legal system
of the country. Where law fails, ethics always succeed. The government
cannot regulate all the activities that are harmful to the society.