Doing Business in India For Dummies®

The Nuts and Bolts of the World’s Largest Democracy

In what can only be described as a modern political miracle, the seventh largest and second most populous country in the world (with over a billion people), a land that features countless languages and religions, is actually a working democracy. In terms of population size, India is the largest democracy in the world. The framework and fundamental workings of India’s government are essential knowledge for anyone interested in doing business in the country, and I cover those basics for you in this section.

The levels of government

India’s federal government is known as the central or union government. The central governing system is based on a bicameral or double-house system of parliament made up of two houses:

✓	The lower house: Known as the Lok Sabha, this house is made up of elected representatives of the people sent from every part of the country, each one representing one constituency. The Council of Ministers is collectively responsible to the Lok Sabha.
✓	The upper house: Known as the House of Elders or the Rajya Sabha, this house is made up of members either elected by State Assemblies—the counterparts of the Lok Sabha at the state level in the federal system, or nominated by the President.

The Prime Minister, himself a member of the Lok Sabha, draws his council of Ministers from the same lower house, though sometimes even a Rajya Sabha member gets a Ministerial berth, on condition that he stands for election and wins a ...