Global Business Environment

Assess the general direction of the political and economic policies being followed in order to develop the country

India sets its economic and social policies for a period of 5 years at the beginning of each term. These goals are created, executed and controlled by the Planning Commission which is an institution in the Government of India.

The 11th plan comes to an end in March and the commission has unveiled its new plan, the twelfth, for the next five years.

The main objective is for Indian to maintain growth high and the country hopes to achieve 10% annual growth for the next 5 years. In order to arrive at these goals, the country wants to focus on certain areas.

In agriculture, the growth target is at least 4% (against 3.3% during the last plan) and cereals are the main target, but the country also wants to develop other elements such as animal husbandry and fishing. However, the main constraints on agriculture remain land and water, which is why the country is going to be focus on technologies to improve the productivity of land and the efficiency of water use. Investments will be made by the state to improve the rural infrastructures in order to waste less harvests which are due to problems of storage.

Concerning industry, India wants to increase the manufacturing sector. They wish growth between 11 and 12% allowing the creation of more than 2 million jobs. During the previous plan, the growth was around 8%. The government also wants to improve its trade balance which nowadays is negative that is why indian industry must develop better domestic addition value and also their technologies in order to respond to growing domestic demands. The country wants to change its trade policies to allow more FDI to attract investment in its regions. Companies should be encouraged to innovate more that is why they have to give more importance to the research and development sector. Moreover, infrastructure and land constraints are a huge problem and that is the reason why special industry zones will be created so that the connectivity between businesses and infrastructure are improving. However, India will focus on certain industries that it believes will contribute to achieving the objectives set. Indeed, for the creation of employment, the state relies on the sectors like textiles and garments, leather and footwear, gems and jewelry and food processing industries. For the development of technologies, India will invest in machine tools, IT hardware and electronics. In order to ensure the safety strategy, sectors such as telecommunication, defense and aerospace will be preferred. For the improvement of infrastructure, the country will invest in heavy electrical equipment, heavy transport and each moving equipment. And finally, with regard to areas to rival companies exterior, automotive and pharmaceuticals equipment will be highlighted.

Another area that India wants to improve in its 12th plan concerns education. The country which now has about 86% of children receiving schooling in primary education and only near 55% in secondary, set a goal to increase those two rates. Indeed, they want to get close to the average of western countries which is largely superior to 90% ( UNESCO 2012 ). The gross enrollment ratio in superior education is around 10% of children nowadays (which is less than China with 23% than Brazil with 34% and Russia with 77%) They absolutely must increase, the state aims 20% in 2017 and 30% in 2022. Unlike the 11th plan where the emphasis was placed on the quantity, the government wants this time to focus on the quality of education, which is why the country will invest in order to that the training of teachers be a higher