+

Unit-V
The Consumer Protection Act, 1986 (COPRA) is an Act of the Parliament of India enacted
in 1986 to protect the interests of consumers in India. It is made for the establishment of
consumer councils and other authorities for the settlement of consumer's grievances and for
matters connected there with it. The act was passed in Assembly in October 1986 and came
into force on December 24, 1986. The statute on the right was made before this act.
SIGNIFICANCE
This statute is regarded as the 'Magna Carta' in the field of consumer protection for checking
unfair trade practices, ‘defects in goods’ and ‘deficiencies in services’ as far as India is
concerned. It has led to the establishment of a widespread network of consumer forums and
appellate courts all over India. It has significantly impacted how businesses approach consumer
complaints and has empowered consumers to a great extent.
Consumer Protection Councils
Consumer Protection Councils are established at the national, state and district level to increase
consumer awareness.
Various Consumer Organisations
To increase the awareness of consumers, there are many consumer organisations and NGOs
that have been established.
CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI) was THE FIRST CONSUMER
ORGANISATION ESTABLISHED IN INDIA IN 1966.
It was followed by many others such as
(1) Consumer Education And Research Centre (Gujarat)
(2) Bureau Of Indian Standards
(3) Federation Of Consumer Organisation In Tamil Nadu
(4) Mumbai Grahak Panchayat
(5) Consumer Voice (New Delhi)
(6) Legal Aid Society (Kolkata)
(7) Akhil Bhartiya Grahak Panchayat
(8) The Consumers Eye India.
(9)United India Consumer's Association.

CONSUMER DISPUTE REDRESSAL AGENCIES

 Revised Pecuniary Jurisdiction(2021 Amendment):

o 50 lakh (earlier less than 1 crore) for District Commissions,
o More than Rs. 50 lakh to Rs. 2 Crore (earlier 1 crore to 10
crore) for State Commissions,
o More than Rs. 2 Crore (earlier more than 10 crore) for the
National Commission.
• District Consumer Disputes Redressal Forum (DCDRF): Also known as the "District
Forum" established by the State Government in each district of the State. The State
Governments may establish more than one District Forum in a district. It is a district level
court that deals with cases valuing up to ₹2 million (US$29,000).
• State Consumer Disputes Redressal Commission (SCDRC): Also known as the "State
Commission" established by the State Government in the State. It is a state level court that
takes up cases valuing less than ₹10 million (US$140,000)
• National Consumer Disputes Redressal Commission (NCDRC): Established by the Central
Government. It deals with matters of more than 10 million.
Objectives of Central Council
The objectives of the Central Council is to promote and to protect the rights of the consumers
such as:-

1. The right to be protected against the marketing of goods and services which are
hazardous to life and property.
2. The right to be informed about the quality, quantity, potency, purity, standard and price
of goods or services, as the case may be so as to protect the consumer against unfair
trade practices;
3. The right to be assured, wherever possible, access to a variety of goods and services at
competitive prices ;
4. The right to be heard and to be assured that consumer's interest will receive due
consideration at appropriate forums;
5. The right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers
6. The right to consumer education. Jurisdiction of District Forum

1. Subject to the other provisions of this Act, the District Forum shall have jurisdiction to
entertain complaints where the value of the goods or services and the compensation, if
any, claimed does not exceed rupees twenty lakhs.
2. A complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction:-
a) – the opposite party or each of the opposite parties, where there are more than one,
at the time of the institution of the complaint, actually and voluntarily resides or
carries on business or has a branch office or personally works for gain, or
b) – any of the opposite parties, where there are more than one, at the time of the
institution of the complaint, actually and voluntarily resides, or carries on business
or has a branch office, or personally works for gain, provided that in such case either
the permission of the District Forum is given, or the opposite parties who do not
reside, or carry on business or have a branch office, or personally work for gain, as
the case may be, acquiesce in such institution; or
c) – the cause of action, wholly or in part, arises.
Consumer courts do not have jurisdiction over matters where services or goods were bought
for a commercial purpose. Jurisdiction of State Commission
Subject to the other provisions of this Act, the State Commission shall have jurisdiction:-
a) to entertain
 i) complaints where the value of the goods or services and compensation, if any, claimed
exceeds rupees twenty lakhs but does not exceed rupees one crore (R10 million); and
ii) appeals against the orders of any District Forum within the State; and
b) to call for the records and pass appropriate orders in any consumer dispute
Jurisdiction of National Commission
(a) to entertain—
(i) complaints where the value of the goods or services and compensation, if any,
claimed exceeds rupees one crore; and
(ii) appeals against the orders of any State mayor; and
(b) to call for the records and pass appropriate orders in any consumer dispute which is
pending before or has been decided by any State Commission. However, the Supreme
Court of India has held that the jurisdiction of National Commission under Revision
Jurisdiction is very limited and can only be exercised when State Commission exceeds
its jurisdiction, fails to exercise its jurisdiction or there is material illegality in the order
passed by State Commission.

Consumer Protection Act 2019

The Digital Age has ushered in a new era of commerce and digital branding, as well as a new
set of customer expectations. Digitisation has provided easy access, a large variety of choice,
convenient payment mechanisms, improved services and shopping as per convenience.
However, along the growth path it also brought in challenges related to consumer protection.

Keeping this in mind and to address the new set of challenges faced by consumers in the digital
age, the Indian Parliament, on 6 August 2019, passed the landmark Consumer Protection Bill,
2019 which aims to provide the timely and effective administration and settlement of consumer
disputes. The Consumer Protection Act, 2019 (New Act) received the assent of the President
of India and was published in the official gazette on 9 August 2019. The New Act will come
into force on such date as the Central Government may so notify. The New Act seeks to replace
the more than 3 (three) decades old Consumer Protection Act, 1986 (Act).

Set out below are some of the Key Highlights of the New Act:

- Covers E-Commerce Transactions: The New Act has widened the definition of
'consumer'. The definition now includes any person who buys any goods, whether through
offline or online transactions, electronic means, teleshopping, direct selling or multi-level
marketing. The earlier Act did not specifically include e-commerce transactions, and this
lacuna has been addressed by the New Act.

- Enhancement of Pecuniary Jurisdiction: Revised pecuniary limits have been fixed

under the New Act. Accordingly, the district forum can now entertain consumer complaints
where the value of goods or services paid does not exceed INR 10,000,000 (Indian Rupees Ten
Million). The State Commission can entertain disputes where such value exceeds INR
10,000,000 (Indian Rupees Ten Million) but does not exceed INR 100,000,000 (Indian Rupees
One Hundred Million), and the National Commission can exercise jurisdiction where such
value exceeds INR 100,000,000 (INR One Hundred Million).
- E-Filing of Complaints: The New Act provides flexibility to the consumer to file
complaints with the jurisdictional consumer forum located at the place of residence or work of
the consumer. This is unlike the current practice of filing it at the place of purchase or where
the seller has its registered office address. The New Act also contains enabling provisions for
consumers to file complaints electronically and for hearing and/or examining parties through
video-conferencing. This is aimed to provide procedural ease and reduce inconvenience and
harassment for the consumers.

- Establishment of Central Consumer Protection Authority: The New Act proposes

the establishment of a regulatory authority known as the Central Consumer Protection
Authority (CCPA), with wide powers of enforcement. The CCPA will have an investigation
wing, headed by a Director-General, which may conduct inquiry or investigation into consumer
law violations.

- The CCPA has been granted wide powers to take suo-moto actions, recall products,
order reimbursement of the price of goods/services, cancel licenses and file class action suits,
if a consumer complaint affects more than 1 (one) individual.

- Product Liability & Penal Consequences: The New Act has introduced the concept
of product liability and brings within its scope, the product manufacturer, product service
provider and product seller, for any claim for compensation. The term 'product seller' is defined
to include a person who is involved in placing the product for a commercial purpose and as
such would include e-commerce platforms as well. The defense that e-commerce platforms
merely act as 'platforms' or 'aggregators' will not be accepted. There are increased liability risks
for manufacturers as compared to product service providers and product sellers, considering
that under the New Act, manufacturers will be liable in product liability action even where he
proves that he was not negligent or fraudulent in making the express warranty of a product.
Certain exceptions have been provided under the New Act from liability claims, such as, that
the product seller will not be liable where the product has been misused, altered or modified.

- Unfair Trade Practices: The New Act introduces a specific broad definition of Unfair
Trade Practices, which also includes sharing of personal information given by the consumer in
confidence, unless such disclosure is made in accordance with the provisions of any other law.

- Penalties for Misleading Advertisement: The CCPA may impose a penalty of up to

INR 1,000,000 (Indian Rupees One Million) on a manufacturer or an endorser, for a false or
misleading advertisement. The CCPA may also sentence them to imprisonment for up to 2
(two) years for the same. In case of a subsequent offence, the fine may extend to INR 5,000,000
(Indian Rupees Five Million) and imprisonment of up to 5 (five) years. The CCPA can also
prohibit the endorser of a misleading advertisement from endorsing that particular product or
service for a period of up to 1 (one) year. For every subsequent offence, the period of
prohibition may extend to 3 (three) years.

- The New Act fixes liability on endorsers considering that there have been numerous
instances in the recent past where consumers have fallen prey to unfair trade practices under
the influence of celebrities acting as brand ambassadors. In such cases, it becomes important
for the endorser to take the onus and exercise due diligence to verify the veracity of the claims
made in the advertisement to refute liability claims.
- Provision for Alternate Dispute Resolution: The New Act provides for mediation as
an Alternate Dispute Resolution mechanism, making the process of dispute adjudication
simpler and quicker. This will help with the speedier resolution of disputes and reduce pressure
on consumer courts, who already have numerous cases pending before them.
With the New Act all set to become the law, gone are the days, where the 'consumer was asked
to beware'. A consumer is now the one who assumes to be treated like a King. Hence, it is
important for consumer driven businesses (such as, retail, e-commerce) to be mindful of the
changes in the legal landscape and have robust policies dealing with consumer redressal in
place. Consumer driven businesses must also strive to take extra precautions against unfair
trade practices and unethical business practices.

 Regulatory Bodies Set Up for Consumer Welfare:

 TRAI: Telecom Regulatory Authority of India
 SERC: State Electricity Regulatory Authority
 IRDA: Insurance Regulatory and Development Authority
 FSSAI: food Safety and Standards Authority of India
 SEBI: Securities and Exchange Board of India
 RBI: Customer Services Division Created
 DGCA: Strengthened to handle complaints against Airlines
 RERA: to handle companies against Real Estate Companies

Role of voluntary consumer organisations

A wide network of Voluntary Consumer Organisations (VCO's) is doing commendable work

to raise awareness amongst consumers, strengthen consumer protection and welfare and to
provide counselling, guidance and mediation services.

The Department of Consumer Affairs operates the Consumer Welfare Fund (CWF). The
primary objective of the CWF is to strengthen the Consumer Advocacy Movement in India.

These VCO’s are supported through CWF grants for diverse projects including comparative
testing of products and services and dissemination of the findings. Steps have been taken to
enhance transparency and to digitise the government’s interface with its citizens.

The role of Voluntary Organizations has become increasingly more significant over the last two
decades. There are now more than 800 such organisations in India. They have undertaken
various activities as part of the consumer movement. They perform several functions, like:

(i) Create awareness about consumer rights and educate the general public about Consumer
problems and remedies through seminars, workshops and training programmes.

(ii) Provide legal aid to consumers by way, of assistance in seeking legal remedy.

(iii) Undertake advocacy of consumers’ point of view as representative members of

consumer protection councils and others official boards.

iv)Arrange comparative testing of consumer products through theirown testing apparatus or

accredited laboratories so as to evaluate the relative qualities of competing brands and publish
the test results for the benefit of consumers to become informed buyers.
(v) Publish periodicals and journals to disseminate information among readers about
Consumer problems, legal reporting and other emerging matters of interest. Most of these
periodicals do not accept advertisements from business firms.

(vi) Make suggestions and recommend steps which government authorities should consider
in policy making and administrative measures adopted in the interest of consumers.

(vii) Some voluntary organizations have successful used Public Interest Litigation (PIL) to
enforce consumer rights in several cases. In other words, voluntary organizations have filed
cases in law courts in the interest of the general public, not for any individual

Consumer Coordination Council (CCC) is the national level apex body for all consumer
organisations in India. It has 2,500 members spread all over India and 56 member
organisations. CCC provides information and analysis of consumer related laws and
judgements. It seeks to enforce Citizen Charters and focus its advocacy on policymakers, legal
professionals, consumer activists and manufacturing companies. It has developed national
information gathering mechanisms on consumer related issues including an online redress
system using online database/portal and providing online support to consumers. CCC is a
member of several policy-making bodies and law-making organisations. It also sits on various
advisory committees of the Indian government.

The Consumer Protection Council is the apex consumer protection agency of the Federal
Government of Nigeria established to promote and protect consumers’ interests. According to
the CPC, it would achieve success ‘when Nigerian consumers can be described as well
protected, getting their money’s worth, knowledgeable about the market place and its
mechanisms, vigilant about what takes place in it, assertive about their rights and conscious of
their responsibilities’. Its core activities are: to inform consumers; to eliminate hazardous
products from the market and ensure that products and services comply with required standards
and to receive, mediate and provide redress to consumer complaints.

Consumers Association of India (CAI) is a membership-based organisation with 8,000

registered members all over India. Its main objectives are: spreading consumer awareness;
empowering consumers and teaching them their responsibilities and rights as consumers. CAI
regularly conducts seminars, workshops and training programmes and publishes various
consumer guides on a variety of topics, which are of interest to consumers.
A new division of CAI was established in March 2007 to help consumers affected by
cybercrimes in collaboration with Cyber Society of India.
Consumer Education and Research Centre CERC
CERC is a recognised consumer organisation by the Government of India and Government of
Gujarat. It is dedicated to the cause of consumer protection, environment protection, investor
protection and public health and safety issues. It works towards these objectives through
education, media, research, effective uses of law, advocacy, lobbying and in-house comparative
consumer product testing. The CERC mandate also permits the expansion of its activities to
make it topical, and to deal with emergent issues of consumer and public health and safety and
protection.

VOICE is an acronym for Voluntary Organisation in Interest of Consumer Education which

has pioneered the protection of consumers in India. Based in New Delhi, the organisation has
championed consumer education in the country since 1983. Over the years, VOICE has been
representing consumers and protecting their interests with policy-makers, the judiciary and
statutory regulatory bodies. From 1991 onwards, VOICE has been spearheading an
independent and non-partisan programme on “comparative testing of products” with the
technical support of Stiftung Warentest of Germany. Its activities have been supported by the
government of India’s Ministry of Consumer Affairs besides other ministries and departments.
VOICE has among its stakeholders many reputed Indian and international organisations
supporting social causes over and above individuals, academicians, professionals and
volunteers who work relentlessly to educate consumers and make them aware of their rights.
VOICE provides independent and unbiased reviews of food products, consumer durables,
financial and banking services and much more. It also runs a legal helpdesk for consumers.

Mumbai Grahak Panchayat (MGP) is perhaps the largest voluntary consumer organisation
in India with a membership of 24,500 families. It has been engaged in activities of consumer
protection and education for the last 33 years. Its unique collective group buying system
provides a best practice model for sustainable consumption.

The Consumer Guidance Society of India (CGSI) is a Non-Profit consumer organization

established in India in 1966 to protect and educate the Indian consumer about sub-standard
products and services, adulterated foods, short weights and measures, spurious and hazardous
drugs, exorbitant prices, endemic shortages leading to black marketing and profiteering,
unfulfilled manufacture guarantees, and a host of other problems.

CGSI's important activities include: (1) consumer education (2) holding talks and exhibitions
to spread consumer rights awareness among urban poor and rural areas (3) consumer
complaints redressal (4) testing of consumer products (5) publication of KEEMAT a bimonthly
news magazine now published for over 20 years having articles of general consumer
awareness, for CGSI members and general public.

CUTS: Established in 1983, as a rural development communication initiative, Consumer Unity

& Trust Society is currently at the cutting edge of consumer movement in India as well as
across the globe, and has become a leading Southern voice on RuleBased Trade, Effective
Regulation and Good Governance. CUTS Mission is “Consumer Sovereignty in the
Framework of Social Justice, Economic Equality and Environmental Balance, Within and
Across Borders”. In all its endeavours, CUTS follows the method of researchbased advocacy
and connects the grassroots with national and international policymaking processes. Over the
last three decades, CUTS has experienced an organic and evolutionary growth – marked by a
refreshing spontaneity in responding to the need of the hour, particularly those of the
developing world, by addressing contemporary and emerging economic governance issues at
national, regional and international-level through exchange of ideas, evidences and experiences
of state and non-state actors. At present, CUTS operates out of: Ÿ Three
Programme Centres in Jaipur and one in Chittorgarh, India Ÿ A Public Policy Centre in
Jaipur Ÿ An Advocacy Centre in New Delhi and a Resource Centre in Kolkata, India Ÿ Six Af
liated Centres in Lusaka, Nairobi and Accra (Africa), Hanoi (Vietnam), Geneva (Switzerland)
and Washington DC (USA).

Consumer Protection Consumer Protection

[Link]. Basis
Act, 1986 Act, 2019
 All goods and services for All goods and services,
1 Ambit of law
consideration, including telecom and

while free and personal housing construction,

services are excluded and all modes of
transactions (online,
teleshopping, etc.) for
consideration. Free and
personal services are
excluded

The new Act adds three

types of practices to the
Unfair list, namely: failure to
trade issue a bill or receipt;
practices refusal to accept a good
(Defined as Includes six types of returned within 30 days;
deceptive such practices, like and disclosure of
2 practices to false representation, personal information
promote misleading given in confidence,
the sale, advertisements unless required by law
use or supply of or in public interest.
a good or Contests/ lotteries may
service) be notified as not falling
under the ambit of unfair
trade practices.

Claim for product

liability can be made
against manufacturer,
service provider, and
Product
3 No Provision seller. Compensation
liability
can be obtained by
proving one of the
several specified
conditions in the Act.

Defined as contracts that

cause significant change
Unfair
4 No Provision in consumer rights. Lists
contracts
six contract terms which
may be held as unfair.
 CPCs promote
The new Act makes
and protect the
Central CPCs advisory bodies
rights of consumers.
Protection for promotion and
5 They are established at
Councils protection of consumer
the district,
(CPCs) rights. Establishes CPCs
state, and
at the District,
national level.

State and National

Level.
Establishes the Central
Consumer Protection
Authority (CCPA) to
promote, protect, and
enforce the rights of
consumers as a class.
CCPA may: issue safety
6 Regulator No Provision notices; pass orders to
recall goods, prevent
unfair practices, and
reimburse purchase
price paid; and impose
penalties for false and
misleading
advertisements.
District: Up to Rs 20 District: Up to Rs one
lakh; State: Between crore; State: Between
Pecuniary
Rs 20 lakh and up to Rs
7 jurisdiction of Rs one crore and up to
one crore;
Commissions Rs 10 crore; National:
National:
Above Rs one crore. above Rs 10 crore.

District: Headed by
current or
former District District: Headed by a
Judge and two members. president and at least
State: Headed by a two members. State:
current or former Headed by a president
Composition of
8 High Court and at least four
Commissions
Judge and at least two members. National:
members. National: Headed by a president
Headed by a current or and at least four
former Supreme Court members
Judge and at least four
members.
 Selection Committee
No provision for
(comprising a judicial
Selection Committee.
member and other
9 Appointment Central Government
officials) will
will appoint through
recommend members
notification.
on the Commissions.

Alternate Mediation cells will be

10 No Provision
dispute attached to the District,

redressal State, and National

mechanism Commissions

If a person does not

If a person does not
comply with orders of
comply with orders of
the Commissions, he
the Commissions, he
may face
may face imprisonment
11 Penalties imprisonment between
up to three years, or a
one month and three
fine not less than Rs
years or fine between Rs
25,000 extendable to Rs
2,000 to Rs 10,000, or
one lakh, or both.
both.

Defines direct selling, e-

commerce and
electronic service
provider. The central
government may
12 E-commerce No Provision prescribe rules for
preventing unfair trade
practices in e-
commerce and direct
selling.
Business process outsourcing

Business process outsourcing, or BPO, is a business practice in which one organization hires
another company to perform a task (i.e., process) that the hiring organization requires for its
own business to successfully operate.

BPO has its roots in the manufacturing industry, with manufacturers hiring other companies to
handle specific processes, such as parts of their supply chains, that were unrelated to the core
competencies required to make their end products.

Business process outsourcing (BPO) is the contracting of non-primary business activities and
functions to a third-party provider. BPO services include payroll, human resources (HR),
accounting and customer/call center relations.

BPO is also known as information technology enabled services (ITES).

IT Enabled Services

IT enabled Services (ITES), also called web enabled services or remote services or
Teleworking, covers the entire gamut of operations which exploit information technology for
improving efficiency of an organization. These services provide a wide range of career options
that include opportunities in call Centre, medical transcription, medical billing and coding,
back office operations, revenue claims processing, legal databases, content development,
payrolls, logistics management, GIS (Geographical Information System), HR services, web
services etc.

Information Technology that enables the business by improving the quality of service is IT
enabled services. The most important aspect is the Value addition of IT enabled service. The
value addition could be in the form of - Customer relationship management, improverd
database, improved look and feel, etc. The outcome of an IT enabled service is in the two
forms:

• Direct Improved Service

• Indirect Benefits.
Whereas direct benefits can be realized immediately, indirect benefits can accrue over a period
of time, and can be harnessed very effectively, if planned well upfront.

Information Technology Enabled Services (ITES) Processes and Services

ITeS provide a range of IT-intensive processes and services, which includes business process
outsourcing (BPO) and knowledge process outsourcing (KPO), provided from a distant
location and delivered over telecom networks. ITES focus on verticals such as content
management, finance and accounts, research and analytics segment. ITeS includes:

• Customer Interaction services -including call center facilities with adequate telecom
infrastructure, trained consultants, access to requisite databases, Internet and other online
information infrastructure to provide information and support to customers
• Back office operations -data entry, data conversion including finance and accounting and
HR services.
• Transcription/Translation services
• Content development/animation/engineering/design and GIS
• Other services including remote education, data search, market research, network
consultancy and management
The favoured application areas are areas where there is huge amount of data that needs to be
processed and utilised for delivering the results, or the data is the outcome of the service. In all
cases, without use օf IT the task would otherwise be unmanagable. Some of the most important
areas where IT enabled services can be deployed are:
 • Telemarketing
• Helpdesk
• Customer Support Centres
• Data Ware House
• Transcription Centres
• GIS Mapping for Transport tracking
• Electronic Distribution.

Opportunities and Challenges of Information Technology Enabled Services (ITES) The

changing economic and business conditions, rapid technological innovation, proliferation of
the internet and globalization are creating an increasingly competitive environment. The role
of technology has evolved from supporting corporations to transforming them. Global
companies are increasingly turning to offshore technology service providers in order to meet
their need for high quality and cost competitive technology solutions. As such a company can
encounter a wide variety of risks and challenges in their endeavour to create and maintain a
seamless, successful, sustainable and scalable business. Some of the challenges faced include:

• Ability to create and maintain a truly world class proven global delivery model which
would allow your organization to provide services to customers on a best shore basis. This
would require round the clock execution capabilities across multiple time zones, access to
a large pool of highly skilled technology professionals and a knowledge management
system to reuse solutions where appropriate
• Develop and expand a strong, comprehensive, best in class end to end solutions and
service offerings in order help your clients gain market differentiation or competitive
advantage and thus capture a greater share of your client’s technology budgets
• Ability to scale when the opportunity arises. This would require constant investment in
infrastructure and rapidly recruit, train and deploy new professionals
• Manage revenue and expenses during economic downturn, enhance your organization’s
capacity to withstand pricing pressures, commoditization of services and decreased
utilization rates
• Manage exchange rate volatility and counter party risk in treasury operations
• Expand your client list across business verticals to reduce over dependency and risk of
losing substantial market share
• Maintain superior and sophisticated project management methodology in line with global
quality standards and ensure timely, consistent and accurate execution to achieve highest
client satisfaction
• Ensuring successful integration of inorganic growth opportunities that your organization
may undertake from time to time across geographies

12 Factors Which Have Propelled the Growth of the Indian ITES Sector
India is regarded as the back office of the world owing mainly to its IT and ITES industry. The
sector in India grew at a Compound Annual Growth rate (CAGR) of 15 per cent over 2010-15,
which is 3-4 times higher than the global IT-ITES spend, and is estimated to expand at a CAGR
of 9.5 per cent to US$ 300 bn by 2020. India is also the world's largest sourcing destination for
the information technology (IT) industry, accounting for approximately 67 per cent of the US$
124-130 bn market. With the rising influence of online shopping, social media and cloud
computing, this trend will only further increase. Some of the most important factors behind
India's rise as an IT information technology services giant include -

• Newly emerging verticals, such as retail, healthcare, utilities, etc.

 • A revival in the demand for IT services from both US and Europe
• Focused government initiatives leading to an increased adoption of technology and
telecom, eventually leading to increased ICT adoption
• Growth in the number of high-value clients (> $1million)
• A spurt in the SMAC market (social, mobility, analytics, cloud) to support ITES services
• Growing R&D expenditure across the globe
• Rising costs to train new workforce ($1.6 billion in 2016)
• Plan of the Indian government to lay down a large-scale optical fiber network connecting
the whole country
• Partial privatization of telecommunication
• Low operating costs as compared to most other developed and developing nations
• Tax breaks and SOPs offered by the government
• Development of multiple SEZs in tier-2 cities across the country

Benefits and Threats of ITES

• BENEFITS: Increases company’s flexibility: Through Business Process Outsourcing

(BPO) which is a part of ITES the companies will increase their flexibility. Most services
provided by ITES vendors are offered on a fee for-service basis. This helps the company
to change their structure of cost from Fixed to Variable cost. A variable cost helps a
company to respond to changes very quickly and make the firm more flexible through
outsourcing. One more way in which ITES contributes to a company’s flexibility is that a
company focuses on its core competencies, without any burdens from bureaucratic
restraints. With this main employees are released from performing non-core operations or
administrative processes and can spend more time and energy in building the firm’s main
businesses. Another way in which ITES increases organizational flexibility is by
increasing the speed of business processes. Using techniques such as linear programming
we can decrease the production time and inventory levels, which can increase
effectiveness and controls or decreases cost. Supply chain management (SCM) with the
effective use of chain partners and business process outsourcing increases the speed of
several business processes. Lastly, flexibility is one of the stages of organizational life
cycle. ITES helped to convert Nortel from a bureaucratic organization to a very reliable
competitor. ITES therefore helps the firms to retain their speed and ability, which they
have to otherwise sacrifice in order to become efficient. A company grows at a faster rate
as it will be less constrained by large capital expenditures for people or equipment which
may take years together to gradually write-off the cost. Though the above-mentioned
arguments are in favor of ITES and increases the flexibility of organizations, management
needs to be very careful with the implementation of it. The company has to look into the
challenges before it decides to engage in business process outsourcing. Another issue is
that in many cases there is less scope to differentiate BPO from other with size. They
provide same services, have same geographic footprints, same technology stacks, and
have same Quality Improvement approaches.
• THREATS: Risk is the major threat with ITES. Outsourcing an Information system, can
cause security risks both from part of communication and from privacy. The Security of
North American or European company data is very difficult when accessed or controlled
in the Sub-Continent. From the perspective of knowledge, a change in attitude in
employees, underestimation of present costs and the major risk of losing independence,
outsourcing leads to a different relationship between organizations. Risks and threats of
outsourcing can be managed, to achieve any benefits. If we are able to manage outsourcing
 in a structured way, maximizing positive outcome, minimizing risks and avoiding any
threats, a Business Continuity Management (BCM) model arises.

Call Centre
A call centre is a centralised office used for receiving or transmitting a large volume of
enquiries by telephone. An inbound call center is operated by a company to administer
incoming product or service support or information enquiries from consumers.
Outbound call centers are operated for telemarketing, for solicitation of charitable or
political donations, debt collection, market research, emergency notifications, and
urgent/critical needs blood banks. A contact center, further extension to call centers
administers centralized handling of individual communications, including letters, faxes,
live support software, social media, instant message, and e-mail.
A call center has an open workspace for call centre agents, with work stations that include a
computer and display for each agent, a telephone set/headset connected to a telecom switch or
to an inbound/outbound call management system, and one or more supervisor stations. It can
be independently operated or networked with additional centres, often linked to a corporate
computer network, including mainframes, microcomputer/servers and LANs. Increasingly, the
voice and data pathways into the centre are linked through a set of new technologies called
computer telephony integration.
The contact centre is a central point from which all customer contacts are managed. Through
contact centres, valuable information about company are routed to appropriate people, contacts
to be tracked and data to be gathered. It is generally a part of company's customer relationship
management infrastructure. The majority of large companies use contact centres as a means of
managing their customer interactions. These centres can be operated by either an in house
department responsible or outsourcing customer interaction to a third party agency (known as
Outsourcing Call Centres). Employment opportunities in IT sector

Information Technology & Employment

The potential contribution of information technology to employment generation is both direct

and indirect. Directly, the growths of the computer hardware and software industries are
generating new job opportunities in India. Indirectly, the adoption of computer technology by
other industries expands the range of services they provide and can stimulate more rapid growth
of these sectors. The indirect impact of IT is far larger than the direct impact. In the USA, it is
estimated that for every direct job created in the IT industry, a minimum of ten additional IT-
related jobs have been created in other industries in which IT is applied. This does not include
the non-IT jobs created by the growth of other sectors of the economy under the stimulus of
information technology.

IT is both a labor-creating and labor-saving technology. As the introduction of automated

machines replaced manual labour in factories and on fields, it was once believed that the spread
of computer technology would result in massive job destruction. However, two decades of
experience has demonstrated that the reverse is actually the case. Surely specific types of jobs
are eliminated, but overall computerization creates far more jobs than it destroys. The spread
of computerization acts as a catalyst for the growth of many types of businesses. This is not
only true of businesses directly related to the computer industry, such as research and
development, computer education, computer repair and maintenance. In fact, every sector of
the economy is being energized by the adaptation of computer technology. Studies by the
National Research Council in the USA have found that IT has a stimulating affect on the growth
of a wide range of service industries. The fastest growing sectors of the global service
economy—education, financial services, insurance and health services—have all expanded by
adapting IT technologies. IT has demonstrable benefits for employment and skill levels.
Evidence indicates that IT contributes to growth in demand for labor, as well as an overall skill
upgrading in the workplace.

For the purposes of this exercise, the IT sector will be defined in a narrower sense as those
businesses that are directly related to the manufacture of computer hardware and software, the
training of personnel for the manufacture and operation of computer equipment, use of
computers in education and the utilization of computer technology for IT-enabled services such
as call centers, medical transcription services, etc.

Jobs in IT Infrastructure

These range from technical support to help desk and service desk worker. The technical support
role is described under IT Service Manager (ITSM). His job role has moved beyond ‘break fix’
support—it has evolved from PC support to network troubleshooting, mobile phone device
support, login and authentication support, and sophisticated troubleshooting. This is a fast-
growing job role, and is more vital to companies than ever before. It can be fulfilled by internal
IT workers, or by workers who are part of a managed service provider. More jobs are in the
areas of cloud, because there is a chronic shortage of cloud-savvy workers. Surveys show that
even as companies wish to move to the cloud, they are hindered by the lack of skilled workers.
Additional job roles in the sphere of infrastructure include systems engineer or cloud
virtualisation engineer, Linux administrator and cloud architect.

Jobs in IT development

These range from data programmer to automation developer and from artificial intelligence
(AI) developer to cloud developer.
i. Role of data programmer is analysing data, considering business problems, interpreting data
and turning it into information. ii. Automation developer is expected to automate repetitive
skills in the workplace. This job role will become important in the future. iii. AI developer will
either help create the AI of tomorrow, or leverage AI services for business purposes. The
languages will include Python, C++, Java, Prolog and LISP. iv. Cloud developer will use
existing cloud tech (Amazon Web Services, Azure, Software as a Service) to create new
solutions.

Jobs in IT security

i. Security analyst: A ‘blue team’ worker who protects systems from hackers. ii. Vulnerability
assessor: Also known as penetration tester, these assessors are the ‘red team’ who help do test
incursions into systems to see where defences have failed.
iii. Business continuity or disaster recovery: This job is vital to help firms plan against
manmade or natural disasters and events.

Jobs in the sphere of data

These roles range from jobs in the fields of Analytics, Big Data jobs and Small Data jobs.
Lastly, there are essential job roles, regardless of IT function, such as project manager.
Tomorrow’s project manager would apply ever-more refined ways to initiate, track and
evaluate projects. This is because companies are applying project management concepts to help
speed time-to-market.

BPO is used for

Organizations engage in business process outsourcing for two main areas of work:

1) Back-office functions and 2)

front-office functions.

 Organizations can outsource a range of back-office functions (also referred to as

internal business functions) including accounting, IT services, human resources (HR),
quality assurance (QA) and payment processing.
 Similarly, they can outsource various front-office functions, such as customer relation
services, marketing and sales.

Types of BPO

 Offshore outsourcing, or just offshoring, occurs when an organization contracts

for services provided with a company in a foreign country.
 Onshore outsourcing, or domestic outsourcing, happens when an organization
contracts for services provided by a company that operates in the same country as
the hiring organization.
 Near shore outsourcing is when an organization contracts for services provided by
companies based in neighboring countries.

BPO can handle below activities

 Human Resources – Training, recruitment, payroll processing.

 Customer care – Call centre, help desk. ❖ Technical support.
 Technical solutions
 Finance and accounting services.
 Website services – Website maintenance, updating etc

Advantages of BPO

1) Concentration on core areas of business increases for executives 2) Resources are

utilized to the fullest 3) Costs reduce to a big margin 4) Human Resources are
improved for the betterment 5) Customization according to customer's demands is
done 6) Technology cost reduces as well 7) Priority goes to the business core areas 8)
Beneficial for both the client and organisation 9) Productivity increases 10) Products
are improvised and improved both

Disadvantages of BPO
 Lack of Control  There are Hidden Costs  There are Security Risks  Reduce
Quality Control  Share Financial Burdens  Risk Public Backlash  Shift Time
Frames  Lack of Focus
Types of Services

Business process outsourcing is also sometimes categorized by the types of services being
provided. The three prevalent categories are:

 Knowledge process outsourcing, or KPO, in which the outsource service provider is

hired not only for its capacity to perform a particular business process or function, but
also to provide expertise around it.

Knowledge process outsourcing (KPO) is the outsourcing of core, informationrelated

business activities. KPO involves contracting out work to individuals that typically
have advanced degrees and expertise in a specialized area.

The information-related work can be carried out by workers in a different

company or by a subsidiary of the same organization. The subsidiary may
be in the same country or in an offshore location to save costs or other
resources.

Advantages of KPO

1. Cost-effectiveness: One of the biggest advantages of a KPO is obviously the cost

advantage. The company does not have to set up any infrastructure or bear any
operational or running costs. And it gets effective, expertizes services at a fraction
of the cost.

2. Access to the best talent: KPO’s provide the company with the best, most
knowledgeable and skilled professionals available in the global talent pool. And if
the KPO is in a developing country like India or Philippines then the cost of such
talent is also relatively low.

3. Focus: Outsourcing some of the processes, allows the company to focus on its core
functions. The KPO handles the peripheral functions, and the company can better
focus on its core functions and improve their efficiency and results.

4. Better Utilization of Resources: If the company outsources the process that is not
at the core of their business strategy, it can use the resources it saves in better
places. Say a company outsources its supply chain management. Then the
resources it saves on this can be utilized to streamline the manufacturing process,
R&D activities, better marketing etc.

DISADVANTAGES OF KPO

High Attrition Rate

The major problem which a KPO is facing is the high attrition rate i.e gradual reduction
in the number of people working in a company due to retirement, resignation or death.
The rate of attrition in the KPO industry in India is currently nearly 50%. Attrition in
individual firms varies from 15% in the larger firms to up to 40% in the smaller ones
Analysts believed that if this left unchecked, there would be a shortage of professionals.
Therefore, it is the most severe problem faced by Indian KPO industry.
 Feeble Infrastructure

Despite of more than six decades of independence, India’s reliability is at stake

especially in segments like power and telecom.

Information Technology

India has proved its supremacy to the rest of the world in having a rich reservoir of IT
companies. These IT companies are providing solutions to a majority of KPO. This is
evident from existing client base of IT companies in India. Now the same or existing
client base is outsourcing their processes. Here, India could further strengthen its
position by capitalizing on this phenomenon and creating more opportunities

 Legal process outsourcing, or LPO, is a type of KPO that as the name states is
specific to legal services, ranging from drafting legal documents and performing
legal research to offering advice.
 Research process outsourcing, or RPO, another type of KPO, refers to research
and analysis functions; biotech companies, investment firms and marketing
agencies are among the types of organizations that would engage in RPO for
services.

Advantages of Research Process Outsourcing

Outsourcing was not identified as a business strategy until 1989 and since then it has become
a very common practice in many businesses. Typically, companies consider an outsourcing
strategy for their support functions that are out of the company’s areas of expertise.

Many of prospective clients that require ongoing access to research come to us asking about
the cost-benefit of outsourcing their research to a specialized research provider versus
developing or growing their in-house research capability. And while the answer usually
depends on a specific business and their needs, below is a list of the top seven benefits that one
gets when outsourcing their research function.

Access to Talent and Capabilities

Getting access to talent and research capabilities without needing to recruit or train individuals
for the role is the most important driver for outsourcing research. In fact, relying on research
providers gives access to new talent pools with local expertise such as language, technical
know-how, and culture, as well as new resources.
Strategic Benefit
Business flexibility is a factor that is commonly taken into consideration as well. Outsourcing
research enables companies to focus on core activities while they farm out non-core services
that specialist companies can do better, allowing them to be all in on their competitive
advantages.

Risk-sharing
Another benefit of outsourcing research is risk-sharing. Since both the company and the
research provider will be accountable for the output delivered to the final client, it’s in the
research provider’s best interest to deliver the highest level of research quality.

Running Business 24X7

Offshore outsourcing to a country with a different time zone, gives the added advantage of
making full use of a 24-hour day. Outsourcing partners can take over and continue work even
after in-house employees go home. They can complete critical tasks and send it back for review
the next morning.

Staffing Flexibility
Hiring full-time researchers can be very costly, especially if research needs are fluctuating. In
this case, it is best to have a contract with a research provider, where the company can add and
reduce research capacity according to its needs in different periods.

Saving on Infrastructure and Technology

Investing in infrastructure and subscribing to premium databases is very expensive, partnering
with research provider divides these costs over several clients, giving each client exactly what
they need at the fraction of the cost.

Cost Savings
Cutting down on costs is one of the major drivers behind companies leaning towards
outsourcing research. By using lower cost platforms and leveraging their scale, outsourcers can
generate savings while still making a margin.

Recruitment process outsourcing (RPO) is a form of business process outsourcing (BPO)

where an employer transfers all or part of its recruitment processes to an external service
provider, according to the Recruitment Process Outsourcing Association (RPOA). An RPO
provider can provide its own or may assume the company’s staff, technology, methodologies,
and reporting. In all cases, RPO differs greatly from providers such as staffing companies and
contingent/ retained search providers in that it assumes ownership of the design and
management of the recruitment process and the responsibility of results.

RPO services, otherwise known as Recruitment Process Outsourcing, can solve many hiring
challenges for the enterprise.
Companies often engage RPO services to deepen or enrich their candidate pools, implement
proven recruitment processes, or augment the client’s internal hiring teams. By implementing
talent acquisition strategies focused on short and long-term goals, clients often see
improvements in candidate quality, time to fill, and recruitment costs.

Because talent continues to be a company’s biggest competitive advantage, there are many
reasons to consider a strategic partner, like an RPO firm, focused on talent acquisition. While
the benefits far outweigh the drawbacks, some HR leaders still hesitate to engage RPO services
for their firm—mostly due to a lack of information.

If you are an HR or talent acquisition professional who falls under the “hesitant” category, this
post is for you. At ACA Talent, we know that the more informed our customers are, the better
the relationship will be. As such, here is an honest look at the pros and cons of RPO services.

Pros and Cons of Recruitment Process Outsourcing Services:

Pros of RPO Services

Scalable, adaptable resources

Recruitment Process Outsourcing allows you to scale your talent acquisition function
according to hiring volumes without disrupting your operations and infrastructure. Because
your RPO partner builds recruitment teams exclusively for your account, you don’t have to
source and train a team of recruiters from scratch or provide them with office space, support
staff, computers, phones, and expense accounts. Your RPO services provider handles all of that
for you and manages the performance of its staff

With scalable recruitment resources and dedicated account management in place, your HR
team is free to work more strategically, whether on specialized searches or overseeing how the
RPO partnership impacts and shapes the business. You can focus on what matters most while
your RPO provider focuses on building pipelines, interviewing candidates, and improving your
headcount.

No more posting and hoping

Corporate talent acquisition specialists often play the role of brand ambassador to candidates,
which means posting open positions to the company’s career site and job board accounts. Much
of a corporate recruiter’s efforts are focused on attracting and qualifying candidates that have
expressed an interest in the company. Particularly in large companies with hundreds of
requisitions, recruiters may spend most of their time qualifying applicants who apply to
postings. With thousands of candidates to review, you can see why this doesn’t leave much
time for outreach to passive talent.

To supplement a client’s recruitment efforts, RPO companies offer localized sourcing strategies
focused on developing passive talent pools. This sourcing strategy may include interest-based
landing pages, artificial intelligence, talent communities, and outreach via email, social media,
and SMS—all focused on uncovering talent you may not be able to find on your own. RPO
services therefore actively create hiring opportunities with exceptional candidates who aren’t
actively applying to job postings—a meaningful advantage.

Positive candidate experiences

While cost savings and greater efficiency are among the main drivers for companies employing
Recruitment Process Outsourcing solutions, you shouldn’t discount the human element.
With unemployment reaching historic lows, candidate engagement is more important than ever.
A positive candidate experience helps build your brand and establishes you as an attractive
employer in the job market.

By optimizing your recruitment process so candidates aren’t left waiting too long or jumping
through unnecessary hoops, while ensuring candidates are a good fit for your culture before
inviting them to interview, your RPO services partner can help build a strong candidate
experience.

Regardless of whether a candidate gets the job or not, leaving a good impression encourages
favorable word-of-mouth and makes future recruiting easier.

Leading edge innovation

The latest recruiting technology can be time-consuming and expensive for you to adopt.
Another pro of RPO services is that we invest, test, and deploy new apps continuously in order
to maintain a competitive edge. As a recruitment partner, you get to leverage best-inclass
software and processes without a huge upfront investment. This includes cutting-edge
technology like artificial intelligence for sourcing, chatbots, CRMs, texting technology, and
social media outreach tools, to name a few.

New technology creates greater opportunities through larger candidate pools, greater
prominence in the job market, and a well-organized hiring process which fosters goodwill and
referrals.

Meaningful insights
Recruitment Process Outsourcing equips you with rich insights into your recruitment operation
through clear, robust reporting. You gain a bird’s eye view of what is happening across the
enterprise on a regular basis and can focus on being proactive instead of reactive.
Your RPO partner can help you understand whether you’re achieving the necessary conversions
from interviews to hires, how many candidates you need to source to keep your funnel full,
and where the process may be adjusted in order to achieve optimal results.

Cons of Recruitment Process Outsourcing Cultural clashes

Your RPO services provider should share your company’s goals and basic values. Because
RPO companies work with clients on a long-term basis, cultural fit is essential to a smooth
rollout and continuous success. Even little things, like whether you prefer to receive emails or
phone calls or in-person visits, can affect the overall relationship.

Ramp-up time

While your RPO partner excels at recruiting, they might not have extensive experience with
your industry. In this case, there is a necessary ramp-up process where the partner becomes
educated in the nuances which will make the partnership successful. To accelerate the process,
share all the essentials of your recruitment focus, including in-depth candidate profiles, and
expected metrics and conversion rates. Even blocking off times to interview on hiring
managers’ calendars can go a long way to ramping up quickly.
Long-term buy-in
You cannot build a successful RPO program overnight. Recruitment optimization has many
moving parts, so a long-term commitment is necessary in order to work out kinks and refine
the process. There may be steps backward before there are steps forward, so a minimum of one
year is recommended for each engagement. The average contract term for an RPO company
and client is three years.

Executives must also buy in and push the message from the top down to faciliate change
management. Without establishing expectations, others at varying management levels who are
involved in the hiring process may not embrace the RPO partnership or fail to hire
recommended candidates, resulting in wasted resources and limited success in the program.

Giving up (some) control

The idea of relinquishing control of such a crucial element in your business as recruiting to a
third party might provoke anxiety. Your RPO services provider should demonstrate
transparency throughout the process. Many RPO providers offer pilot programs, smaller
engagements which offer proof-of-concept and helps build trust with your organization. Once
you reap some of the benefits of RPO and realize positive impacts on your business, you can
turn over more of the process to the service provider.

Recruitment Process Outsourcing requires detailed communication between the client and the
provider to set expectations and foster success. With these crucial elements in place, you can
solve most of the cons and build a fruitful business partnership.

Special Economic Zone:

A special economic zone (SEZ) is an area in which the business and trade laws are different
from the rest of the country. SEZs are located within a country's national borders, and their
aims include increased trade balance, employment, increased investment, job creation and
effective administration. To encourage businesses to set up in the zone, financial policies are
introduced. These policies typically encompass investing, taxation, trading, quotas, customs
and labour regulations. Additionally, companies may be offered tax holidays, where upon
establishing themselves in a zone, they are granted a period of lower taxation.
The creation of special economic zones by the host country may be motivated by the desire to
attract foreign direct investment (FDI).The benefits a company gains by being in a special
economic zone may mean that it can produce and trade goods at a lower price, aimed at being
globally competitive. In some countries, the zones have been criticized for being little more
than labor camps, with workers denied fundamental labor rights.
The salient features of the SEZ scheme are:-

• A designated duty free enclave to be treated as a territory outside the customs territory
of India for the purpose of authorised operations in the SEZ;
• No licence required for import;
• Manufacturing or service activities allowed;
• The Units are only required to achieve Positive Net Foreign Exchange to be calculated
cumulatively for a period of five years from the commencement of production;
• Domestic sales subject to full customs duty and import policy in force;
• Full freedom for subcontracting;
• No routine examination by customs authorities of export/import cargo;
 • SEZ Developers /Co-Developers and Units enjoy Direct Tax and Indirect Tax benefits
as prescribed in the SEZs Act, 2005.

The major incentives and facilities available to SEZ developers are as under:

• Exemption from customs/excise duties for development of SEZs for authorized

operations approved by the BOA.
• Income Tax exemption on income derived from the business of development of the SEZ
in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
(Sunset Clause for Developers has become effective from 01.04.2017)
• Exemption from Central Sales Tax (CST).
• Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
• Supplies to SEZ are zero rated under IGST Act, 2017.

The incentives and facilities offered to the units in SEZs for attracting investments into the
SEZs, including foreign investment include:

• Duty free import/domestic procurement of goods for development, operation and

maintenance of SEZ units
• 100% Income Tax exemption on export income for SEZ units under Section 10AA of
the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the
ploughed back export profit for next 5 years. (Sunset Clause for Units will become
effective from 01.04.2020)
• Exemption from Central Sales Tax, Exemption from Service Tax and Exemption from
State sales tax. These have now subsumed into GST and supplies to SEZs are zero rated
under IGST Act, 2017.
• Other levies as imposed by the respective State Governments.
• Single window clearance for Central and State level approvals.
• Supplies to SEZ are zero rated under IGST Act, 2017.
• After making a shortlist of SEZs for further examination, investors may find that
specific SEZs offer other advantages that complement their business plans in India. •
Ultimately, however, the benefits of India’s SEZ policy have been substantial and have
already served to exponentially increase the amount of foreign firms operating in India.

• Since 2005, exports from the country have increased substantially, largely due to the
rise in sourcing and manufacturing platforms.

• Special economic zones (SEZs) in India are areas that offer incentives to resident
businesses. SEZs typically offer competitive infrastructure, duty free exports, tax
incentives, and other measures designed to make it easier to conduct business.
Accordingly, SEZs in India are a popular investment destination for many
multinationals, particularly exporters.

The development of SEZs in India

The Indian government had long used export processing zones (EPZs) to promote exports. In
fact, Asia’s first EPZ was established in 1965 at Kandla, Gujarat state. While these EPZs had
a similar structure to SEZs, the government began to establish SEZs in 2000 under the Foreign
Trade Policy.
The government sought to use SEZs to redress the infrastructural and bureaucratic challenges
that were seen to have limited the success EPZs. The government’s SEZs are structured closely
on China’s successful model. They are designed to encourage domestic and foreign investment,
boost India’s exports, and create new employment opportunities.

The Special Economic Zone Act, 2005 further amended the country’s SEZ policy. Many EPZs
were converted to SEZs, with notable zones in Noida (Uttar Pradesh state), Falta (West Bengal
state), Visakhapatnam (Andhra Pradesh state), Chennai (Tamil Nadu state), Cochin (Kerala
state), Santa Cruz (Maharashtra state), Indore (Madhya Pradesh), as well as Kandla and Surat
(Gujarat),
Since the Act’s promulgation, the Indian government has also accepted proposals for
additional, far smaller SEZs, which must be proposed by developers to the Indian Board of
Approval. The SEZ Rules, 2006 lay down the complete procedure to develop a proposed SEZ
or establish a unit in an SEZ.

Impact of Globalisation on India

Globalization has been defined as the process of rapid integration of countries and happenings
through greater foreign trade and foreign investment. It is the process of international
integration arising from the interchange of world views, products, ideas and other aspects of
culture.

What are the factors aiding globalisation?

1) Technology: has reduced the speed of communication manifolds. The phenomenon of
social media in the recent world has made distance insignificant.

The integration of technology in India has transformed jobs which required specialized skills
and lacked decision-making skills to extensively-defined jobs with higher accountability that
require new skills, such as numerical, analytical, communication and interactive skills. As a
result of this, more job opportunities are created for people.

2) LPG Reforms: The 1991 reforms in India have led to greater economic liberalisation
which has in turn increased India’s interaction with the rest of the world.

3) Faster Transportation: Improved transport, making global travel easier. For example,
there has been a rapid growth in air-travel, enabling greater movement of people and goods
across the globe.

4) Rise of WTO: The formation of WTO in 1994 led to reduction in tariffs and non-tariff
barriers across the world. It also led to the increase in the free trade agreements among various
countries.

5) Improved mobility of capital: In the past few decades there has been a general
reduction in capital barriers, making it easier for capital to flow between different economies.
This has increased the ability for firms to receive finance. It has also increased the global
interconnectedness of global financial markets.

6) Rise of MNCs: Multinational corporations operating in different geographies have led

to a diffusion of best practices. MNCs source resources from around the globe and sell their
products in global markets leading to greater local interaction.
These factors have helped in economic liberalization and globalization and have facilitated the
world in becoming a “global village”. Increasing interaction between people of different
countries has led to internationalization of food habits, dress habits, lifestyle and views.

Globalization and India:

Developed countries have been trying to pursue developing countries to liberalize the trade and
allow more flexibility in business policies to provide equal opportunities to multinational firms
in their domestic market. International Monetary Fund (IMF) and World Bank helped them
in this endeavour. Liberalization began to hold its foot on barren lands of developing countries
like India by means of reduction in excise duties on electronic goods in a fixed time frame.

Indian government did the same and liberalized the trade and investment due to the pressure
from World Trade Organization. Import duties were cut down phase-wise to allow MNC’s
operate in India on equality basis. As a result globalization has brought to India new
technologies, new products and also the economic opportunities.

Despite bureaucracy, lack of infrastructure, and an ambiguous policy framework that adversely
impact MNCs operating in India, MNCs are looking at India in a big way, and are making huge
investments to set up R&D centers in the country. India has made a lead over other growing
economies for IT, business processing, and R&D investments. There have been both positive
and negative impacts of globalization on social and cultural values in India.

IMPACTS OF GLOBALISATION IN INDIA

Economic Impact:

1. Greater Number of Jobs: The advent of foreign companies and growth in economy
has led to job creation. However, these jobs are concentrated more in the services sector
and this has led to rapid growth of service sector creating problems for individuals with
low level of education. The last decade came to be known for its jobless growth as job
creation was not proportionate to the level of economic growth.
2. More choice to consumers: Globalisation has led to a boom in consumer products
market. We have a range of choice in selecting goods unlike the times where there were
just a couple of manufacturers.
3. Higher Disposable Incomes: People in cities working in high paying jobs have greater
income to spend on lifestyle goods. There has been an increase in the demand of
products like meat, egg, pulses, organic food as a result. It has also led to protein
inflation.

Protein food inflation contributes a large part to the food inflation in India. It is evident from
the rising prices of pulses and animal proteins in the form of eggs, milk and meat.

With an improvement in standard of living and rising income level, the food habits of people
change. People tend toward taking more protein intensive foods. This shift in dietary pattern,
along with rising population results in an overwhelming demand for protein rich food, which
the supply side could not meet. Thus resulting in a demand supply mismatch thereby, causing
inflation.
In India, the Green Revolution and other technological advancements have primarily focused
on enhancing cereals productivity and pulses and oilseeds have traditionally been neglected.

• Shrinking Agricultural Sector: Agriculture now contributes only about 15% to GDP.
The international norms imposed by WTO and other multilateral organizations have
reduced government support to agriculture. Greater integration of global commodities
markets leads to constant fluctuation in prices.

This has increased the vulnerability of Indian farmers. Farmers are also increasingly
dependent on seeds and fertilizers sold by the MNCs.

Globalization does not have any positive impact on agriculture. On the contrary, it has
few detrimental effects as government is always willing to import food grains, sugar
etc. Whenever there is a price increase of these commodities.

Government never thinks to pay more to farmers so that they produce more food grains
but resorts to imports. On the other hand, subsidies are declining so cost of production
is increasing. Even farms producing fertilizers have to suffer due to imports. There are
also threats like introduction of GM crops, herbicide resistant crops etc.
• Increasing Health-Care costs: Greater interconnections of the world has also led to
the increasing susceptibility to diseases. Whether it is the bird-flu virus or Ebola,Covid-
19 the diseases have taken a global turn, spreading far and wide. This results in greater
investment in healthcare system to fight such diseases.
• Child Labour: Despite prohibition of child labor by the Indian constitution, over 60 to
a 115 million children in India work. While most rural child workers are agricultural
laborers, urban children work in manufacturing, processing, servicing and repairs.
Globalization most directly exploits an estimated 300,000 Indian children who work in
India’s hand-knotted carpet industry, which exports over $300 million worth of goods
a year.

Socio-Cultural Impact on Indian Society

Nuclear families are emerging. Divorce rates are rising day by day. Men and women are gaining
equal right to education, to earn, and to speak. ‘Hi’, ‘Hello’ is used to greet people in spite of
Namaskar and Namaste. American festivals like Valentines’ day, Friendship day etc. are
spreading across India.

• Access to education: On one hand globalisation has aided in the explosion of

information on the web that has helped in greater awareness among people. It has also
led to greater need for specialisation and promotion of higher education in the country.
• On the flip side the advent of private education, coaching classes and paid study
material has created a gap between the haves and have-nots. It has become increasingly
difficult for an individual to obtain higher education.
• Growth of cities: It has been estimated that by 2050 more than 50% of India’s
population will live in cities. The boom of services sector and city centric job creation
has led to increasing rural to urban migration.
• Indian cuisine: is one of the most popular cuisines across the globe. Historically, Indian
spices and herbs were one of the most sought after trade commodities. Pizzas, burgers,
Chinese foods and other Western foods have become quite popular.
 • Clothing: Traditional Indian clothes for women are the saris, suits, etc. and for men,
traditional clothes are the dhoti, kurta. Hindu married women also adorned the red bindi
and sindhur, but now, it is no more a compulsion. Rather, Indo-western clothing, the
fusion of Western and Sub continental fashion is in trend. Wearing jeans, t-shirts, mini
skirts have become common among Indian girls.
• Indian Performing Arts: The music of India includes multiples varieties of religious,
folk, popular, pop, and classical music. India’s classical music includes two distinct
styles: Carnatic and Hindustani music. It remains instrumental to the religious
inspiration, cultural expression and pure entertainment. Indian dance too has diverse
folk and classical forms.
• Bharatanatyam, Kathak, Kathakali, Mohiniattam, Kuchipudi, Odissi are popular dance
forms in India. Kalarippayattu or Kalari for short is considered one of the world’s oldest
martial art. There have been many great practitioners of Indian Martial Arts including
Bodhidharma who supposedly brought Indian martial arts to China.
• The Indian Classical music has gained worldwide recognition but recently, western
music is too becoming very popular in our country. Fusing Indian music along with
western music is encouraged among musicians. More Indian dance shows are held
globally. The number of foreigners who are eager to learn Bharatanatyam is rising.
Western dance forms such as Jazz, Hip hop, Salsa, Ballet have become common among
Indian youngsters.
• Nuclear Families: The increasing migration coupled with financial independence has
led to the breaking of joint families into nuclear ones. The western influence of
individualism has led to an aspirational generation of youth. Concepts of national
identity, family, job and tradition are changing rapidly and significantly.
• Old Age Vulnerability: The rise of nuclear families has reduced the social security that
the joint family provided. This has led to greater economic, health and emotional
vulnerability of old age individuals.
• Pervasive Media: There is greater access to news, music, movies, videos from around
the world. Foreign media houses have increased their presence in India. India is part of
the global launch of Hollywood movies which is very well received here. It has a
psychological, social and cultural influence on our society.
• McDonaldization: A term denoting the increasing rationalization of the routine tasks
of everyday life. It becomes manifested when a culture adopts the characteristics of a
fast-food restaurant. McDonaldization is a reconceptualization of rationalization, or
moving from traditional to rational modes of thought, and scientific management.
• Walmartization: A term referring to profound transformations in regional and global
economies through the sheer size, influence, and power of the big-box department store
WalMart. It can be seen with the rise of big businesses which have nearly killed the
small traditional businesses in our society.

Psychological Impact on Indian Society

• Development of Bicultural Identity: The first is the development of a bicultural

identity or perhaps a hybrid identity, which means that part of one’s identity is rooted
in the local culture while another part stems from an awareness of one’s relation to the
global world.
• The development of global identities is no longer just a part of immigrants and ethnic
minorities. People today especially the young develop an identity that gives them a
sense of belonging to a worldwide culture, which includes an awareness of events,
practices, styles and information that are a part of the global culture. Media such as
 television and especially the Internet, which allows for instant communication with any
place in the world, play an important part in developing a global identity.

A good example of bicultural identity is among the educated youth in India who despite being
integrated into the global fast paced technological world, may continue to have deep rooted
traditional Indian values with respect to their personal lives and choices such as preference for
an arranged marriage, caring for parents in their old age.

1. Growth of Self-Selected Culture: means people choose to form groups with

likeminded persons who wish to have an identity that is untainted by the global culture
and its values. The values of the global culture, which are based on individualism, free
market economics, and democracy and include freedom, of choice, individual rights,
openness to change, and tolerance of differences are part of western values. For most
people worldwide, what the global culture has to offer is appealing. One of the most
vehement criticisms of globalization is that it threatens to create one homogeneous
worldwide culture in which all children grow up wanting to be like the latest pop music
star, eat Big Macs, vacation at Disney World, and wear blue jeans, and Nikes.
2. Emerging Adulthood: The timing of transitions to adult roles such as work, marriage
and parenthood are occurring at later stages in most parts of the world as the need for
preparing for jobs in an economy that is highly technological and information based is
slowly extending from the late teens to the mid-twenties. Additionally, as the traditional
hierarchies of authority weaken and break down under the pressure of globalization, the
youth are forced to develop control over their own lives including marriage and
parenthood. The spread of emerging adulthood is related to issues of identity.
3. Consumerism: Consumerism has permeated and changed the fabric of contemporary
Indian society. Western fashions are coming to India: the traditional Indian dress is
increasingly being displaced by western dresses especially in urban areas. Media-
movies and serials- set a stage for patterns of behavior, dress codes and jargon. There
is a changing need to consume more and more of everything.

Globalisation is an age old phenomenon which has been taking place for centuries now. We
can experience it so profoundly these days because of its increased pace. The penetration of
technology and new economic structures are leading to an increased interaction between
people. As with other things there have been both positive and negative impacts on India due
to it.

Conclusion: We cannot say that the impact of globalization has been totally positive or totally
negative. It has been both. Each impact mentioned above can be seen as both positive as well
as negative. However, it becomes a point of concern when, an overwhelming impact of
globalization can be observed on the Indian culture.