This introduction highlights three things: background information on India; recent developments in the Indian economy; and a review of Indian human resource management (HRM) literature. The latter part of the chapter presents results from a large-scale HRM survey. Finally, the main conclusions and future challenges facing Indian HR managers are highlighted.
India is a democratic republic, comprising twenty-five states and seven union territories. It borders Bangladesh, Bhutan and Burma in the east, China in the north and north-east, Pakistan in the west and north-west and Sri Lanka in the south. It occupies a strategic location in South Asia for international trade. With an area of 3.3 million square km, India is the second largest country in Asia and the seventh largest in the world. A former British colony, India has emerged as the largest democracy in the world since independence in 1947.
India is the birthplace of three of the world’s main religions: Hinduism (about 7000 years BC), Buddhism (487 BC) and Sikhism (1699 AD). Indian society comprises six main religious groups: Hindus (83.2 per cent), Muslims (11 per cent), Sikhs (2 per cent), Christians (2 per cent), Jains and Buddhists (less than 1 per cent). There are over three thousand castes.
India has 179 languages and 544 dialects. The Constitution recognises sixteen languages, Hindi and English being the two official languages. India has one of the largest English-speaking populations in the Asia-Pacific region. The literacy rate for those over 15 years of age is 51 per cent, but literacy is unevenly distributed (Budhwar, 2000a). These facts show the diverse nature of the Indian workforce.
Though rich in culture and natural resources, India currently faces a number of problems: political and religious instability; ever-increasing levels of population; unemployment and poverty; corruption in government offices; castism; a low per capita income; instability of output in agriculture and related sectors; slow privatisation of the bloated public sector; lack of adequate intellectual property protection; excessive bureaucracy; and an increasing gap between rich and poor. The level of corruption in politics is rapidly rising.
After independence, the government set up a ‘Planning Commission’ in 1950 to formulate national plans. Since then (till early 1990s) a ‘mixed economy’