India

Emerging Economy

By : Amit Rathod
Exec. PGDM
2010-11
 Geographic & climatic conditions

• Geographical
Location: 
Southern Asia, bordering the
Arabian Sea and the Bay of
Bengal, between Burma ,
Pakistan, china , Nepal.
• Land boundaries:
  Total: 14,103 km border
countries: Bangladesh 4,053
km, Bhutan 605 km, Burma
1,463 km, China 3,380 km,
Nepal 1,690 km, Pakistan
2,912 km
 Population
• Population: 1,191,000,000
(2010 estimated)

• Growth rate: 1.548% (2009

estimated)

• Age structure:
- 0-14 years: 31.1%
- 15-64 years: 63.6%
- 65-over: 5.3%

Source : http://en.wikipedia.org/wiki/Demographics_of_India
 Indian Flag
• The Indian flag is a horizontal tricolor in
equal proportion of deep saffron on the
top, white in the middle and dark green at
the bottom.
• The ratio of the width to the length of the
flag is two is to three.
• In the centre of the white band, there is a
wheel in navy blue to indicate the Ashok
Chakra, is a symbol dating back to 2nd
century BC.
• Its diameter approximates the width of
the white band and it has 24 spokes, which
intends to show that there is life in
movement and death in stagnation.
• The saffron stands for courage and
sacrifice; the white, for purity and truth;
the green for growth and auspiciousness
India 2nd in global competitiveness

Source -Press Trust Of India / Washington July 11, 2010, 0:38 IST

Firms in India Globally Competitive
 Constitution of India : Democratic system
• The Constitution of India (Hindi:
भारतीय संविधान) is the
supreme law of India.
• The framework defining fundamental
political principles, establishing the
structure, procedures, powers and
duties, of the government and spells
out the fundamental rights, directive
principles and duties of citizens.
• Passed by the Constituent Assembly
on 26 November 1949, it came into
effect on January 26, 1950. 
• Supervised by Dr. Rajendra Prasad &
B. R. Ambedkar, as chairman of the
Constitution Drafting Committee, was
the chief architect of the Indian
Constitution.
Institutions : Legal

The Indian Judicial System has the

Supreme Court of India is located only
in the capital city Delhi, without any
benches in any part of the nation, and
is presided by the Chief Justice of India
 Investor Friendly, Liberal open market
economy
• Government is focusing on business & investment environment

– No licensing required except in five sectors

– 100 % FDI permitted in manufacturing (except atomic energy)

– 100 % FDI permitted in most services sector

– Foreign investment allowed in capital market

• State Government compete for Investor friendly image

 Infrastructure :Finance
• Infrastructure funding has come a
long way to go in India.
• Foreign investors are
comfortable with the idea of
investing in Indian infrastructure 
• The average internal rate of
return (IRR) on infrastructure
projects in India is about 15-20
per cent.
• India needs US$320 billion in
infrastructure – 11th Plan(2007-
2012)
 Infrastructure : Indian Telecom Industry
• Average growth rate of over 40%
in respect of subscribers

• The tele-density of India at about

23 per cent coupled with its
billion-plus population offers
immense growth potential for the
telecom services sector
 Infrastructure : Civil Aviation

• Totally 125 civil airports in India

including the 11 designated
international airports. Of these
only 94 airports only are
presently operational.

• Economic survey report , there

had been record growth of over
25% in the air traffic in India in
the last three years
Infrastructure : Railways
•India has one of the largest railway networks in
the world (63,000 KMs route network)

• Accounts for 30% of total freight traffic

• Traffic volumes set to double by 2016

• Potential for rolling stock, passenger coaches,

track equipment, signaling equipment
 Infrastructure : Highways & Roads
• India has an extensive road network
of 3.3 million Kms – the second
largest in the world.

• Roads carry about 61% of the

freight and 85% of the passenger
traffic.

• Highways/Expressways constitute
about 66,000 Kms (2% of all roads)
and carry 40% of the road traffic.

• The Government of India spends

about Rs.18000 Crores (US $ 4
billion) annually on road
development.
 Infrastructure : Power
• Electricity is the most important
infrastructural input in the
development and growth of
economy.
• India,  which posted a 9.4% GDP
growth last fiscal, has an installed
capacity of 132,110 mw.
• India’s investment requirements
for power generation and
transmission will be tune of  $200
billion, to be able to fulfill
projected demand by 2012.
 Power Reach & Cost per Unit
• Per capita consumption – Around
606 units.
• Customers registered as being
from the agriculture sector, 85
paise/kWh (0.6 U.S. cents/kWh),
were far below the overall average
price (208 paise/kWh).
• This occurred at the expense of
commercial consumers (354
paise/kWh), industry (350
paise/kWh, 7.8 U.S. cents/kWh)
and railway hauling (411
paise/kWh).
 Infrastructure : Ports
• India has around 12 major ports
and 185 minor ports with a
coastline of 7517 Km.
• Twelve major ports – Kolkata,
Paradip , Visakhapatnam, Chennai,
Ennore, and Tuticorin on the east
coast and Cochin, new Mangalore,
Mormugao, Jawaharlal Nehru at
Nhava, Mumbai and Kandla on
west coast.
• India has the largest merchant
shipping fleet among the
developing countries and is
ranked 17th in the world

In Million tons
Indian macroeconomic Indicators : GDP Growth

10 • GDP - composition
9
8 by sector:
7
GDP Growth Rate (%)

6 Agriculture: 17.1%
5
4
3
2 Industry: 28.2%
1
0
Services: 54.6% (2009)

Source : CIA World Fact book

Macroeconomic environment
Macroeconomic environment…
 Higher education and Training
• India is the second largest Education market of the world & India spends
about 5% of its GDP in education.

• With more than 55 percent of its  110 million population is under the age of
25 by 2010, is the indicator of potential educational market in India.

• India has around  370 universities and 18000 colleges with 12 million
students on their rolls, and half a million teachers teaching in all disciplines. 

• India currently has around 115 universities and 2,100 colleges,  which teach
various engineering disciplines.

• Engineering colleges in the country have been growing at 20 per cent a

year, while business schools have grown at 60 per cent.
Goods market efficiency : Industrial production
• Industrial Production in India
expanded 1.6 percent in December
of 2010.

• Industrial production measures

changes in output for the industrial
sector of the economy which
includes manufacturing, mining, and
utilities.

• Industrial Production is an important

indicator for economic forecasting
and is often used to measure
inflation pressures as high levels of
industrial production can lead to
sudden changes in prices.

• From 1994 until 2010, India's

industrial production averaged 7.49
percent reaching an historical high
of 17.70 percent in December of
2009 and a record low of -0.20
percent in December of 2008
 Healthcare
• By the year 2010, India has the
best mass health care delivery
system in the world.

• Because our country produces the

largest number of doctors in the
world. India  also produce the
largest number of nurses and
technicians.

• The India is the only country in the

world which can provide quality
healthcare service to the patients
of developed countries at around
40 to 50% of the price charged for
treatment at developed countries. 
 Primary Education
• Primary education is the foundation on which the development of every
citizen and the nation as a whole built on.

• India has made a huge progress in terms of increasing primary education

enrolment, retention, regular attendance rate and expanding literacy to
approximately two thirds of the population.

• GOI and States increasingly recognize education as a critical input for

human capital development, employment/ jobs, and economic growth, and
are putting major financial and technical resources into this effort
Labor market efficiency
Unemployment Rate
 Financial market development : India Exports

• India exports were worth 22500

Millions USD in December of
2010.
• Exports amount to 22% of India’s
GDP.
• Gems and jewellery constitute
the single largest export item,
accounting for 16 percent of
exports.
• India is also leading exporter of
textile goods, engineering goods,
chemicals, leather manufactures
and services.
• India’s main export partners are
European Union, United States,
United Arab Emirates and China 
 Financial market development : India Imports
• India imports were worth
25100 Millions USD in
December, 2010.

• India is poor in oil resources

and is currently heavily
dependent on coal and
foreign oil imports for its
energy needs.

• Other imported products are:

machinery, gems, fertilizers
and chemicals.

• Main import partners are

European Union, Saudi Arabia
and United States.
 Science and Technology
• India’s science and technology, seems finally to find its feet.
• In January 2007, ISRO successfully recovered an orbiting
satellite.
• It is a technology that only China, the EU, Russia and the USA
possess.
• In April 2007 ISRO commercially launched and Italian scientific
satellite Agile into orbit and entered the international satellite
launch market.
• Successful launch of the Geosynchronous Satellite Launch
Vehicle, (GSLV-F04), which placed a 2-tonne communication
satellite, INSAT-4CR into orbit.
• Successfully tested an indigenously made cryogenic engine to
power GSLVs.
• Indian made super-computer ranked in the top-10 in the world
 What is e-commerce?
Includes:
• Online business to business transactions

• Online business to consumer transactions

• Digital delivery of products and services

• Online merchandising

• Automated telephone transactions eg phone banking

• E commerce in India is at low cost

 1 Consumer finds 6
something she wants Verification and
to buy at a “shop” on remittance of actual
the Net funds
Shop

2 Consumer sends on
enciphered request for
payment to her bank

The electronic bank Consumer’s

3 sends back a Bank Consumer
secure packet of e- Public Key
cash
Merchant The shop
Server 5 sends the
packet of
cash to its
bank
Consumer
sends the e-
4 cash to the
shop Shop Merchant Bank
Technological readiness:Exports of IT
Services
• India is home to large number of IT
professional, who have the necessary
skill and expertise to meet the
demands and expectations of the
global industry.

• The cost of skilled Indian work force

is reasonable low compared to the
developed nation.

• India has huge pool of English

speaking IT professional. This is why
IT speaking countries like US & UK
are depend upon India for IT Skill out
sourcing.
 Market size : Retail

• Retail Industry market size is

$650 billions by 2010.
• The high growth in the retail
sector in India is primarily driven
by the impact of rising incomes,
increasing urbanization, greater
brand competition, changing
lifestyles.
• India's vast middle class and its
almost untapped retail industry
are key attractions for global
retail giants wanting to enter
newer markets.  
 Business sophistication
• Business sophistication is conducive to higher
efficiency in the production of goods and services.

• It leads, inturn, to increased productivity, thus

enhancing a nation’s competitiveness.

• Process of continual improvement of quality &

quantity through value chain.
Business sophistication – Indian Top
companies in world
 Innovation : Policies
• The final pillar of competitiveness is technological innovation.
• Indian Pharama Industry expenditure in R & D – 8-9 %.
• Bio Technology - India is among the first few countries in
the developing world to have recognized the importance of
biotechnology as a tool for advancing growth in the
agriculture and health sectors .
• Department of Biotechnology (DBT)- The DBT has established a
huge infrastructure of 55 globally networked bio-informatics
centers and supports. Presently, 15,000 scientists are estimated to
be engaged in India’s biotechnology sector.
• India’s Information-Communications-Technology (ICT) sector : It
exports software to over 102 countries around the globe and one
out of every four global giants outsourced their software
requirements to India.
• E-Commerce - Electronic commerce means business conducted by
means of computer networks. online services such as banking,
ticketing (including airlines, bus, railways), bill payments, hotel
booking etc. have been of tremendous benefit for the customers.
 India-China Trade Relations
• India has emerged as the 7th
largest export market of China
and 10th largest trade partner.

 Handpicked three commodities

from the basket of
commodities that India exports
to China. These are
Iron & Steel
Cotton
Organic Chemicals
 India AND China: Engines of global growth
• 1/3 rd of humanity: Demanding goods and services
from the world 

• 1/4 th of high-skilled manpower: Providing goods

and services to the world
 
• In 2025, the combined GDP of India and China will be
roughly equal to that of G-7 minus US (i.e. Japan,
Germany, France, UK, Canada and Italy).

India and China cannot afford to ignore each other.

 Bibliography
• http://www.unicef.org/infobycountry/india_statistics.html
• http://www.indiastat.com
• http://www.worldbank.org.in/WBSITE/EXTERNAL/COUN
• http://www.rbi.org.in
• http://www.indiainfraguru.com/
• http://www.wto.com
• http://www.youthxchange.net/main/ff4b265_india-p.asp
• http://www.asiape.com/aper/aper_issues/aper1101.html
Thank you