Describe some of the ways in which the town, where you live has changed during the last decade. State whether the changes are for the better or the worse
Answers
1) Emerging as one of the largest economies
India’s recent economic expansion has brought a record number of people out of poverty. A growing middle class has fueled impressive consumer growth. It is today the world’s third largest market for smart phones and the sixth largest for cars. India’s software industry employs more than 4 million people directly and more than 10 million indirectly. The breadth and depth of this growth is reflected in the extraordinary range of projects Control Risks has engaged in during this period.
2) Gaining diplomatic clout
Economic heft has brought with it a greater strategic sway. Gone are the Nehruvian years of the Cold War era, when India led the global Non-Aligned Movement. In 2008, the then government staked its parliamentary majority to ratify the US-India Civil Nuclear Treaty. It heralded India into the global nuclear elite. For the last three years, India has given more aid than it has received, with neighbors Bhutan, Afghanistan and Nepal topping the list of recipients. All of this has added up to give India much more power in diplomatic negotiations. Ministers from the largest economies can be routinely seen making a beeline for Raisina Hill, the seat of power in the nation’s capital – including those from the UK keen on agreeing a post-Brexit trade deal.
3) Evolving federalism
Ten years ago many of our multinational clients viewed India as a single, homogenous market, not the agglomeration of 29 states that it really is. Over this past decade, the federal structure has come into a sharper focus, with more policy-making powers and funds devolving to the states and village panchayats (local governments). The mantra of cooperative federalism has morphed into a competitive federalism in which states – many with the populations of large countries – vie with each other for investment. Our clients now need to assess the political and regulatory scenarios at both the federal and state levels and pay attention to the state-wise ease of doing business rankings that are published every year.
In the middle of 2017, India implemented perhaps the boldest tax reform in history. It replaced dozens of state and federal taxes with a national one, called the Goods and Services Tax or GST. The idea is to create a more unified national market and, despite its early teething troubles, we expect the new tax to lead to greater efficiencies and a more attractive business environment.
4) Fighting corruption and black money
Another unprecedented policy move was announced on 8 November 2016. As the world woke up to hear the news of Donald Trump’s election victory, Prime Minister Modi announced the immediate withdrawal of two high-value currency notes. In one stunning move, 86% of the currency was sucked out of circulation, to be gradually replaced by new bills. The declared aim of the move was to fight black money and counterfeiting. While its success is still being debated, it made one thing clear: this government – elected on an anti-corruption manifesto – was willing to rip up the rulebook in order to drive home its agenda.
5) Forging a stricter compliance regime
Control Risks has always worked with foreign and domestic Indian companies concerned about their exposure to extra-territorial anti-corruption legislation such as the US Foreign Corrupt Practices Act and the UK Bribery Act. However, today we are also seeing nervousness around the application of a more rigorous domestic compliance regime. The Companies Act of 2013 has brought clearer accountability to corporate anti-corruption and anti-fraud measures. The Reserve Bank of India, the country’s central bank, has been given more power in 2017 to act against loan defaulters. Our clients today do not just want to fix a problem; they are seeking to instill a preventive compliance culture right across their businesses.
6) Emergence of the modern Indian multinational
Those Indian groups that have extended their international footprint during the decade have changed in more significant ways. In January 2007, the salt-to-software conglomerate Tata Group bought Britain’s Corus Steel for $13 billion. The next month, Hindalco, the aluminium company of the Aditya Birla Group, announced the acquisition of Canada’s Novelis for $6 billion. The next year Tata Motors bought the Jaguar Land Rover car businesses from Ford Motor for $2.3 billion. Some of the global growth has been organic too: Tata Consultancy Services, a $17 billion software company that employs more than 370,000 people, operates in 46 countries now.
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James Owen is a Senior Partner at Control Risks, the specialist global risk consultancy. He heads the South Asia business and is based in Delhi
ANSWER:
In the modern world, urbanisation and changes of all kinds often occur in all cities, mostly to meet the demands of the city's expanding population. Unlike other cities, my city is also seeing some obvious changes.
Almost anywhere in the cities may see these changes, but the city centre is where most financial and commercial activity occurs. Thus, it is there where it is most obvious. But the issue is that walking through this crowded portion of the city's centre now seems a lot like wrestling because there are many structures, shops, and companies.
EXPLANATION:
1) Becoming one of the greatest economies in the world
A record number of individuals in India have just emerged from poverty thanks to recent economic growth. An expanding middle class has powered impressive consumer growth. Today, it is the third-largest smartphone market worldwide and the sixth-largest for automobiles. The software sector in India, directly and indirectly, employs more than 4 million people. The incredible range of projects Control Risks has worked on over this time reflects the breadth and depth of this expansion.
A record number of individuals must be lifted out of poverty. An expanding middle class has powered impressive consumer growth. It is currently the third largest in the world.
The sixth-largest market for autos and smartphones, respectively. The software sector in India, directly and indirectly, employs more than 4 million people. The incredible range of projects Control Risks has worked on over this time reflects the breadth and depth of this expansion.
2) Building diplomatic influence
Economic clout has resulted in more strategic influence. The days of Nehru, when India headed the world's Non-Aligned Movement, are long gone. To approve the US-India Civil Nuclear Treaty, the previous administration 2008 staked its legislative majority. It signalled India's entry into the nuclear elite of the world. India has sent more help than it has received for the past three years, with its neighbours Bhutan, Afghanistan, and Nepal receiving the most of it. This has resulted in a significant increase in India's negotiating leverage. The nation's capital, Raisina Hill, is frequently visited by ministers from the world's top economies, including those from the UK interested in approving a trade agreement after Brexit.
3)Changing federalism
Many of our international customers used to think of India as a single, homogenous market rather than the collection of 29 states that it is now. The federal structure has become clearer over the last ten years, with more policymaking authority and funding shifting to the states and village panchayats (local governments). The idea of cooperative federalism has changed into competitive federalism, in which states compete for investments, although many have populations comparable to whole nations. Now, our customers must evaluate the political and regulatory environments at the federal and state levels and pay attention to the annual rankings of the states' business friendliness.
4) Combating corruption and illicit financing
On November 8, 2016, a new policy change that was unprecedented was revealed. Prime Minister Modi announced the removal of two high-value currency notes as the globe awoke to the news of Donald Trump's electoral triumph. 86 per cent of the money was abruptly removed from circulation to be progressively replaced by fresh notes. The move's stated goal was to combat counterfeiting and illicit money. This administration, elected on an anti-corruption platform, was ready to rip up the rulebook to forward its goal, despite its success still being questioned.
5) The development of contemporary Indian multinational
The Indian groups that have expanded internationally during the past 10 years have undergone more profound changes. The salt to software giant Tata Group acquired the British company Corus Steel in January 2007 for $13 billion. The Aditya Birla Group's aluminium firm, Hindalco, announced the purchase of Novelis in Canada for $6 billion the following month. Tata Motors acquired the Jaguar Land Rover automobile operations for $2.3 billion the following year from Ford Motor. A portion of the worldwide expansion has also been organic: Tata Consultancy Services, a $17 billion software corporation with over 370,000 employees, presently operates in 46 nations.
James Owen is a Senior Partner of the specialised global risk consultancy Control Risks. He is headquartered in Delhi and oversees the South Asia business.