GDIB AssignmentBy

Deepika Krishna
Use the terms below to argue in favor (or against) Airtel decision to go to Africa.
(If your University registration / roll number ends with an even number you will
argue for, if it ends in an odd number you will argue against)
a. GDP
b. GDP-P
c. PPP
d. Hoestede Dimensions of Culture e. High and Low Context Societies f. Don’t
limit your answers to only these terms, use all your Marketing learnings

On the morning of 30 June 2012, two years after the Airtel Zain deal was
announced, Mr Sunil Mittal, the Founder-Chairman Bharti Airtel, was looking
forward to the review meeting at their Vasant Kunj office in Delhi, India with Mr
Manoj Kohli, CEO (International) and Joint MD, Bharti Enterprises, who was in
charge of Airtel’s Africa operations.1 Mr Mittal’s long-held dream of foraying into
the emerging market of Africa had finally come true with the acquisition of Zain in
early 2010. A journey that began three years back, went through turbulences and
culminated into successful acquisition of Africa’s second largest telecom company
Zain Africa BV’s operations in 15 countries with an enterprise value of US$10.7
billion.2 The 15 countries that Bharti Airtel had acquired from Zain in Africa were:
Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo,
Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania,
Uganda and Zambia. Zain Africa in 2010 had 42 million subscribers and an annual
revenue of US$3.6 billion. Initially, hopes were high with the acquisition. With its
billion plus population, vast natural resources and a tele-density of less than 30
per cent, Africa was expected to be a market for the future and the next growth
engine of the global economy. All Airtel has to do was to establish its brand,
execute its business model and develop its cultural ethos in Africa. Sunil recalled
the long debates that had preceded the decision for acquiring Zain. Everyone
connected with the deal was quite sure that the acquisition would be an efficient
means of extending Airtel’s global footprint and would catapult the company to
the league of leading mobile operators in the world. With a total customer base of
more than 185 million, Airtel was within striking distance to be among the top

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three operators in the world within next five years’ time from the acquisition, that
is, 2015. However, even after more than two years of the acquisition, the
challenges were many and a decision needs to be taken on Airtel’s future
operations in Africa. Average revenue per user (ARPU) of African operations
decreased by 12 per cent to US$6.5 in June 2012 quarter compared to that two
years back. Per minute revenue also went down by 35 per cent in the same period
leading to 1.70 per cent reduction in operating margin, which was at 25.8 per cent
in the June 2012 quarter. Increasing tariffs were not an option in a highly
competitive market. Its upcoming 3G services was yet to contribute significantly to
profits and acquiring more 2G circles would lead to higher debt burden with no
promise of quick profitability. The debt to finance the deal was expected
to be serviced entirely by its African operations with principal payments also
starting to kick in within a short period of time. What should Airtel do? Was
investment in Africa a well-thought-out decision? Can Airtel compete in Africa in
the long term? These were some of the questions running through Sunil’s mind as
he stepped into the conference room. The Rise of Bharti Telecom (Mittal, 2008) In
1976, a young entrepreneur Sunil Mittal had graduated from college in an
industrial town called Ludhiana in India and just started to explore business
opportunities. He had a seed capital of `20,000 only. Acutely aware of his financial
limitations and, more importantly, the lack of any sort of experience, he started a
small-scale manufacturing and supplying unit for bicycle components. His clientele
included the Hero Group. Within a few years his venture Bharti Enterprises
diversified into production of yarn, stainless steel sheets for surgical utensils. It
also began importing and marketing stainless steel products, brass and plastic
products and zip fasteners. The desire to do something exceptional motivated
Sunil to make an attempt to get a Maruti Suzuki agency for Ludhiana. He failed but
managed to procure a contract from TVS Suzuki for retailing motorcycles in
Ludhiana. His early efforts failed as TVS Suzuki was the right product in the wrong
place. Ludhiana was Hero Honda territory. Next, he struck upon a novel idea of a
portable generator and landed with an agency of Suzuki motor company to sell
their generators in India. By 1984, Bharti was the largest importer of portable
generators in India. The Indian government enforced a ban on import of
generators, thereby killing the entire industry of imported generators. Following
this, Sunil went back to Japan where he had worked earlier. He used to travel

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widely searching for inspiration. His inspiration came from an electronics fair at
Taipei in Taiwan where he saw a push-button telephone for the first time. These
phones were manufactured by a small company called Kingtel. He tied up with
Kingtel for importing simpler version of those phones into India. That was how
India’s push-button phone industry was born. A tiny business was then
formulated, building and assembling these phones in a garage in Ludhiana. This
business was a reasonable success and Bharti started selling push-button phones
replacing the traditional old rotary phones. There were less than 1 million phones
in the entire country. Getting a phone connection was very tough. The sale
volumes were low, but each phone attracted very high margins. Such phones were
a new product in the Indian telecom market and, thus, could sell at a premium.
The phone business lasted for about two years, as the Indian government could
now allow a monopolistic player in the newly founded push-button phone
industry. The industry was opened up to other private sector players. About 57
large business groups, including large companies like the Tatas, the Birlas, the
Thapars, state government undertakings all applied for a licence for this business.
Finally, 20 such business were provided licence to start their phone business in
India. To survive competition, Bharti entered into a technical tie-up with Siemens
AG of Germany and became the first company in India to manufacture electronic
push-button telephones in Gurgaon in 1985. It was the Siemens technology based
Beetel phone. By 1985, the telecom industry in India had already started on the
growth curve. There were many other small businesses including TVS Suzuki and
other agencies.

Bharti Decides to Go Global

The telecom industry in India was displaying the typical characteristics of reaching
maturity by 2008. This was followed by price wars in the telecom sector with the
entry of many more private players like Idea, BPL Mobile, Spice, Aircel and state-
run public sector units (PSU) ramping up their capacities in the maturing telecom
market in India. The impact was clearly reflected on Airtel’s ARPU which registered
a decline from `505 in 2005 to `271 in 2010. The same was the trend in minutes of
usage (MOU). Sensing the changing dynamics in the domestic market, the
management at Airtel decided to establish operations abroad. In January 2009,

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Airtel launched Airtel Sri Lanka and followed it up by acquiring a 70 per cent stake
in Warid Telecom, Bangladesh.
Mittal built Bharti from a start-up cellular company in 1995 into a full service
provider with 25,000 employees and revenues of about US$7.25 billion in the
fiscal year of 2009 ended in March. Over the years, Bharti had attracted over
$1.67 billion in foreign equity, more than any other Indian telecom firm. Bharti’s
major partners were British firm, Vodafone, and Asia’s leading operator,
Singapore-based Singtel, making Bharti the largest telecom company listed on the
Bombay Stock Exchange. Bharti had achieved all this against tremendous odds.
Building the largest private sector telecom company in terms of number of
customers had pitted them against former state owned telecom providers and a
host of competitors backed by major Indian business groups. Mittal had relied on
speed and instinct to win the first round and achieve the largest market share in
India. However, during the past three quarters, the revenues had started to
plateau (Exhibit 1) with competitors undercutting each other in a price war.
Furthermore, the global economic environment had brought in offshore growth
opportunities at attractive valuations. Exhibit 2 shows select 2009 financial
statements for Bharti. The Indian promoter, Bharti Telecom Ltd, holds 45.3% of the
total shares of Bharti Airtel Ltd. (Exhibit 3). Foreign promoters, Pastel Ltd (a
holding of Singapore Telecom) and Indian Continent Investment Ltd, hold 15.6%
and 6.3%, respectively. Private corporations that hold more than 1% of the total
shares of Bharti Airtel include the Life Insurance Corporation of India (3.4%) and
the Euro Pacific Growth Fund (1.5%) of the American Funds family of the Capital
Group. “Speed is our greatest asset. We move like a bullet. The risks are high, but
then so are the returns.” – Sunil Bharti Mittal Bharti was known for successfully
acquiring and integrating new geographic circles to its operations, as and when it
gained cellular licenses, and this was a crucial driver to its fast organic growth. It
reorganized management on a regional basis to better capture synergies of the
combined operations and installed a new centralized billing system. Between April
and August 2002, Bharti acquired eight new circles and had them up and running
in 4 months. Mittal credited Bharti’s decentralized management structure in
facilitating efficient rollouts, a new Indian standard. Bharti considered transparent
disclosure to be of utmost importance in establishing its reputation in
international financial markets, while it tried to attract foreign equity. Over the

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years, Bharti had acquired a total of $1.2 billion in foreign equity, more than any
other Indian telecom firm. “Our quarterly report is, I believe, one of the most
transparent financial reports in the telecom sector in the world, and we put this
on our Web site each quarter followed by an international analyst call.” “Our
corporate governance standards are way above normal Indian standards. We are
determined to be on the same front as Infosys,” said Sanjay Gupta, head of
Bharti’s corporate communications, citing India’s Infosys Technologies, a global IT
services company, as the leader in corporate governance. Bharti benchmarked its
performance against India’s best in class, citing Wipro, another IT company with
global operations, as setting the standard in human resources, and industrial giant
Reliance as the best in finance. Within a year of Bharti’s public listing, Finance
Asia, a leading Asian business magazine, recognized Bharti as India’s second-best
company (after Infosys) in investor relations, third in corporate governance, fifth in
financial management (despite a net loss in income), and third among India’s best
managed companies.
India’s Mobile Industry The Indian economy has grown at an average rate of 7%
since 1997, and the cellular industry has experienced similar explosive growth. In
2005, there were approximately 51 million cellular subscribers, and, by early 2009,
nearly 400 million Indians had cellular subscriptions. 3 Furthermore, there was
little end to the growth in sight, and recent projections suggested that India could
overtake China as having the world’s largest number of subscribers by 2013.4 The
Indian cellular market differed from those in developed countries, most notably in
the lower per-user revenue that Indian operators could obtain. In spite of the fact
that Indian mobile operators have significantly lower Average Revenue per User
(ARPU) than European and US operators (Exhibit 4), they usually post higher
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margins
compared with their western peers. Indian operators have managed to boost
mobile penetration and usage without sacrificing margins through employing a
number of cost-optimization methods such as network and IT outsourcing and
maintaining low subscriber acquisition and retention costs. Additionally, large
operators have set up national backbones to avoid paying carriage charges for
long distance traffic. These initiatives have boosted the EBITDA margins of large
Indian mobile operators to 40%, which is respectable by international standards.
Indian operators also offer low-denomination, high-margin recharge vouchers and

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“lifetime validity” schemes to attract low income pre-paid subscribers and
increase overall mobile adoption and usage. Operators in emerging markets have
tried to replicate the Indian model to drive profitable growth, whereas operators
in developed markets are now looking to adopt some of the cost-optimization
initiatives of their Indian counterparts to reduce capital and operational
expenditures, and thus enhance margins. Despite the rapid growth of the Indian
market and the efforts to minimize costs to maintain profitability, there were
significant pressures on Indian cellular providers. First, an upcoming government
auction for licenses to bring data at third-generation speeds was to end within a
month. Bharti Airtel, among eleven players, would bid for the in-demand 3G
spectrum that would let it operate highspeed mobile data services in India.
Getting these licenses is crucial to any firm operating in India and a bidding war is
expected. The potential for a “winner’s curse” existed, however, and there was
concern in the investment community that winners of these licenses won’t be
able to recoup their investments. Additional internet usage revenue may not be
enough to offset the heavy cost of the licenses for providers including Bharti, in a
market where monthly phone bills average about $5 per user. Furthermore, voice
revenues have declined as price competition has pushed call rates to lower than a
penny per minute. Finally, Bharti recently disclosed that only 5 percent of their
subscribers currently use smartphones, which implied that while the company had
opportunity to expand this potentially lucrative market, it would need to make a
major investment in infrastructure to capture the smartphone business. In the
midst of these competitive changes in its home market, Bharti had turned to
international expansion as a means of growth. Its offer to acquire Africa’s Zain
Group had the potential to transform Bharti and create substantial growth, but
also offered numerous challenges. Zain Over a decade ago, Africa’s telephone lines
accounted for only 2% of the world’s telephone lines. In 2007, figures show that
Africa has the fastest growth of 38% in the mobile phone industry. Liberalization
of the telecommunication sector started in the late 1990s in Africa, but it was not
until 2004 that any of the African countries had reasonably competitive markets
for telecommunications. Now 41 African countries have opened up markets and
allowed mobile communications to flourish5 . Former telecom monopolies in
Kenya, Nigeria and Tanzania are under pressure to be profitable. Mobile markets
in Africa are turning into a battleground between operators based in Europe, the
Middle East, South Africa, and Asia. Zain is the pioneer of mobile
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telecommunications in the Middle East, one of the first to introduce Global
Systems for Mobile Communications (GSM) in the region, and now a major player
on the African continent. It is the dominant brand in African telecommunications
industry and is the world’s third largest telecom company in terms of geographic
coverage.
Zain is listed on the Kuwait Stock Exchange, with a market capitalization exceeding
US$20 billion as of March 30, 2010. It is the largest publicly traded company on
the exchange. The largest shareholder is the Kuwait Investment Authority (24.6%).
Exhibit 5 and Exhibit 6 show the 2009 financial statements for Zain. The firm
started off operations in Kuwait in 1983. Today it is the leading mobile and data
services operator with a commercial footprint in 23 Middle Eastern and African
countries with a workforce of over 13,000 providing a comprehensive range of
mobile voice and data services to over 72.5 million active individual and business
customers. It is the market leader in the Democratic Republic of Congo, Zambia,
Malawi, Niger, Congo, Chad and Gabon, and it has a leading presence in Kenya,
Tanzania, Madagascar and Burkina Faso, Sierra Leone, and Ghana. Zain's corporate
strategy can simply be summarized as "3 × 3 × 3", an ambitious expansion strategy
to enable Zain to become a leading mobile services provider globally by the end of
the year 2011.
Initiated in 2003, the strategy aims to make Zain a global player in three stages:
regional, international, and global, with each stage completed in three years. In
2007, Zain launched “ACE,” its so-called strategy to “accelerate” growth in Africa,
to “consolidate” existing assets and to “expand” into adjacent markets. In
November 2007, Zain subsidiary, Celtel, extended its “One Network” plan – the
world’s first borderless mobile network in Africa, offering the possibility of nearly
half of Africa’s population to make calls at local rates across 12 countries in Africa.
In the fiscal year 2007, Zain recorded the highest ever net profit in the history of
Kuwait’s private sector.
In May 2008, former CEO Saad Al Barrak told Arabian Business that Zain had plans
to enter each of the top 20 economies in Africa. By Q3 2009, Zain had obtained
market leadership in 15 of those countries (Exhibit 7). Bharti was not the first
company to view Zain as an acquisition target. In 2009, Vivendi, the French media
conglomerate and the joint owner of SFR (France’s second largest mobile

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operator) with Vodafone, put in an offer to acquire Zain’s African assets. Zain
Africa was valued at US$12 billion at the time of the offer.6 However, Vivendi
called off the negotiations saying that the deal did not meet its investment
criteria. Since then, Zain had been scouting for suitors for its African assets to
improve its cash liquidity.
The Deal
As Zain continued to seek an acquirer, and both firms’ strategic objectives aligned,
Zain’s African assets became an obvious target for Sunil Mittal. After a few
corporate releases (Exhibit 8), a definitive agreement was signed by both parties
on March 30, 2010 (Exhibit 9). Per the agreed upon terms, Bharti was to pay Zain
$10.7 billion, of which $1.7 billion were to go towards debt payment. Bharti will
be obligated to pay $10 billion upon closing and remaining $700 million one year
after the conclusion of the deal.
To fund the transaction, Bharti formed two special purpose vehicles (SPVs), one in
the Netherlands and one in Singapore. The SPVs incurred $8.3 billion in loans
provided in syndication by Standard Chartered, Barclays, State Bank of India,
Australia & New Zealand Banking Group Ltd., Bank of America Merrill Lynch, BNP
Paribas SA, Credit Agricole CIB, DBS Group Holdings Ltd, HSBC Holdings Plc, Bank
of Tokyo-Mitsubishi UFJ Ltd, and Sumitomo Mitsui Banking Corp. The U.S.
dollardenominated loan was priced at 174-176 bps above LIBOR. The total cost to
the company, including bankers’ fee came at a spread of 195 basis points. “With
this acquisition, Bharti Airtel will be transformed into a truly global telecom
company with operations across 18 countries fulfilling our vision of building a
world-class multinational” – Sunil Bharti Mittal
Once the deal is completed, Bharti will acquire subscribers of Zain across 15
regions in Africa, and increase its user base to 179 million. However, Zain's African
business is loss making at the profit
after tax level. Africa represents about 62% of Zain's 64.7 million customers,
55.7% of its revenues, but only 15% of the group's net profit. This puts the deal at
US$255 per subscriber. Turner realized that Bharti’s diversification strategy wasn’t
without risks. Most of the economies in Africa are still underdeveloped and prone
to regulatory risks, as the 15 countries have different regulators. Together with
uncertain valuations of 3G licenses, excess pricing, and the lack of clarity towards
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what tangible assets are being acquired, it made him uncomfortable. On a
comparable basis, the deal was priced at 3.6 times its 2009 revenue, and 11.6
times EBITDA, a large premium over Zain’s South African-based peer, the MTN
Group, which was trading at 4.38 times EV/EBITDA.8 Exhibit 10 provides some
multiples for select trading and transaction multiples. On the other hand, relative
to its peer companies, Bharti seemed to be under-levered, had a strong credit line,
had been through several successful mergers and had an entrepreneurial, proven
management team. Mittal said that he was looking for a long term play here.
Expansion into Africa appeared to offer significant opportunities for Bharti, albeit
with accompanying challenges. The most obvious opportunity lay in the potential
market size. Africa combined a large population and a significant growth in GDP,
with a relatively low (35%) mobile penetration. Within the 15 countries Zain
currently served, there still remained significant room for growth. Furthermore,
though Bharti would face competition in these markets, the company felt that it
could still enjoy first-mover advantage in replicating its “minute factory” business
model in Africa. It expected that networks would roll out faster in Africa than they
had in India, providing greater potential for rapid growth, but also increasing the
imperative to gain entry.
Further development in the African markets also offered potential for this
acquisition. The tariff levels in Africa were currently 10 times higher than those in
India, but average monthly usage per customer was only one-fourth of that in
India. Bharti expected tariffs to be reduced over time, and that the reduced tariffs
would increase usage among subscribers, which would then lead to strong
revenue growth after being combined with increased market share. Finally,
Bharti’s low-cost strategy, which had worked well in India, could also have
significant potential in Africa. Outsourcing of IT systems and realization of capital
efficiencies (through network
management outsourcing and passive infrastructure sharing) would potentially
allow Bharti to derive advantages over the incumbents in the African markets.
Despite management’s optimism over the deal, the reaction from outside was
decidedly mixed. Motilal Oswal of Motilal Oswal Securities Ltd., a leading financial
services firm in India, reported: “We believe that Zain's Africa unit is an attractive
acquisition candidate for Bharti, given relatively low penetration in its footprint

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and high ARPU, which could enable Bharti to export its 'minute factory'-based
business model…Only three out of 15 countries in the Zain Africa portfolio have a
mobile penetration in excess of 50%. Moreover, Zain is a market leader in most of
its operations, with 50%-75% market share in seven countries and 25%-50% share
in six countries…. The balance sheet position appears comfortable for funding the
deal." Business daily The Economic Times looked at the acquisition along another
dimension: “Bharti will be paying Zain US$252 per subscriber. In September 2009,
when Bharti was trying to strike a deal with MTN, the two sides had valued each
customer of the South African firm at US$394. Vodafone paid US$743 per user
when it acquired Hutchison's India operations in February 2007. Deals a few years
ago have attracted even higher valuations in the US$361 to US$1,050 range. What
needs to be noted is that these higher valuations of the past were out of
expectations of a stupendous growth in India's subscriber base." Turner decided
to consult some of his analyst friends at Karvy Brothers, India’s largest brokerage
house, to run some numbers of his own: Zain had 42 million subscribers in Africa
(September 2009) while Bharti had 121.7 million in India (December 2009).
Customer growth rates varied from as low as -14% in Kenya and -6% in Nigeria to
as high as 51% in Niger. Telephone penetration rates in African markets ranged
from 14% in the Democratic Republic of the Congo to 123% in Gabon, though
most are in the low double digits. The average revenue per user (ARPU) was US$3
in Ghana and US$25 in Gabon. The ARPU, a frequently used yardstick in the
telecom industry, was an average of US$6 for Zain's African operations against
US$5 for Bharti in India.
Turner thought one could paint an optimistic or a pessimistic picture with these
numbers. For instance, low mobile penetration rates could mean either a huge
upside opportunity or lack of demand requiring several years of expensive market
development. Similarly, low ARPUs could imply meager
revenue streams or future growth potential. But if Bharti can successfully
transpose its high minutes of use model – described as a "minute-factory" – to
Africa, it could be highly profitable even at these low ARPUs. Besides, some
operations are showing losses because of mismanagement. Bharti argues that it
would change all that. Is the acquisition of Zain really worth US$10.7 billion?

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With Zain currently losing money in several of the key markets, Turner believed
that the acquisition would reduce Bharti’s earnings in the short term. Moreover,
the all-debt deal would increase in Bharti’s leverage for funding the deal. Bharti
had agreed upon a price of $10.7 billion, of which $1.7 billion was debt that Bharti
would assume. In September 2009, Zain Africa collectively reported an annual net
loss of US$112 million against a profit of US$169 million in the corresponding
period of the previous year. Seven of the 15 countries reported losses. The highest
revenue earner, Nigeria, which was optimistically pushing the US$1 billion mark,
lost US$88 million. India’s complicated and opaque disclosure requirements
further complicated Turner’s decision. Indian requirements for formal submissions
of information in the case of acquisitions were limited, and
there were a variety of legislative actions involved in determining whether an
acquisition would be approved. Bharti, therefore, had yet to provide information
regarding the value of assets acquired or the quality of their earnings. Turner was
torn. Should Turner trust Sunil Mittal’s track record and hold or increase its
position in Bharti? Was the deal tantamount to empire building aspirations of an
aggressive entrepreneur or was it a bold strategic move that had potential to add
significant shareholder value?

INDIA DIALS AFRICA: BHARTI AIRTEL ACQUIRES ZAIN’S AFRICAN ASSETS

Bharti Telecom’s Annual Revenue growth (INR millions)

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INDIA DIALS AFRICA: BHARTI AIRTEL ACQUIRES ZAIN’S AFRICAN ASSETS

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India is transitioning from Hybrid Economy to Pure Economy. How does this
catalyze or hinder following sectors. At least one of the 4 below should be a
contrarian view of other 3
a. IT Sector
b. Primary Health Care
c. Agriculture Sector
d. FMCG

When India achieved its independence in 1947, it was 'the beginning - not the end
- of a period of nation-building'.1 India was determined to definitively break away
from the imperialist influences of its former coloniser, the United Kingdom. 1.3
Prime Minister Nehru, 'armed with socialist faith in an interventionist state and an
aristocratic disdain for consumerism, tried to transform India into a giant of heavy
industry'.2 India embarked on a program, combining a non-aligned movement
and a socialist, centrally planned economy. This program was seen as a
compromise between the extremes of capitalism and communism, combining the
better elements of the West's democratic framework with the economic planning
of China and the USSR. The resulting doctrine was broadly regarded as 'economic
socialism
Centrally Planned Economy
Under economic socialism, India (like China and the USSR) identified
industrialisation as the key to economic growth. The implementation of socialist-
styled five-year plans and the centralisation of industry began. India's first Five
Year Plan began in 1951; the eighth ran from 1992-1997.5 The early five year
plans followed policies of promoting import substitution, extensive state
ownership of production and complex controls and regulations governing the
private sector.6 The Department of Foreign Affairs and Trade (DFAT) commented
that: The size of the Indian economy, and the philosophical underpinnings of the
industrial policy that there was a significant role for State intervention in ensuring
a fair distribution of wealth, meant that the process was government-driven and

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controlled.7 1.8 Despite the regulatory constraints on local business, a negligible
level of foreign investment and lack of international competition, India managed
to sustain a growth rate of 4 percent per annum from 1960 to 1990. This may have
been due largely to industrialisation policies and the 'green revolution'.8 The
fundamental premise was that: ... growth should be accompanied by social justice
and this should be achieved in a way that made India self-sufficient... . [Eventually]
imports were severely controlled and were subject in many cases to quantitative
restrictions, and in all cases to very high tariffs, which, at their peak, had reached
a maximum level of 350%.9
Between 1951 and 1993, India’s share of world trade plunged from 2.4 to 0.5
percent owing to Nehru's reliance on central planning as an economic policy.10
This highly regulated, over-bureaucratised system severely inhibited competition,
innovation, efficiency and economic growth. Trade policies were designed to
protect local industries from external competition through high subsidies and
tariffs.
As well as decreasing levels of trade participation with countries other than the
USSR, India had become increasingly reliant on the USSR for technological and
capital inputs. Moreover, according to DFAT: investment in social infrastructure
(particularly education) suffered partly as a result of India's need, as ostensibly a
non-aligned state with hostile neighbours, to spend a considerable proportion of
its revenues on defence equipment.
Crisis for the Indian Economy
Heavier reliance by India on the economic health of the USSR meant that its
demise was disastrous for India. India had already begun the slow process of
implementing structural reform before the dismantling of the East European
socialist economies.12 The reform process had resulted from the recognition that
policies since Independence had become outmoded and the internal economy
needed intensive restructuring and a massive injection of capital. The bankruptcy
of the USSR, combined with other international economic and political crises such
as the Gulf Oil Shock and the increasing reliance of India on foreign borrowings
resulted in a major short term balance of payments crisis in 1990-1991

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Managing Change from a Closed to an Open Economy
The Indian economy has responded vigorously to a program of stabilisation and
reform measures started in 1992. The Indian Government took drastic action
including devaluation, the imposition of higher interest rates, fiscal and monetary
restraint and import
compression. In succeeding budgets long term measures were introduced which
removed the protection for Indian industry and commerce from international
competition. An indication of the success of these reforms is given by the change
in India's current account deficit. In 1991 it had risen to 3.3 percent of Gross
Domestic Product (GDP); by 1993 it had fallen to 1.8 percent, and by 1995 to 0.6
percent. The Committee heard from Professor Mayer that it was also important to
realise that economic reforms occur gradually; they are 'not always as speedy as
outsiders would wish and that is not unexpected'. Professor Mayer stated that the
trade and tariff frameworks that were set up to protect the Indian economy have
begun to be wound back, but that the process is occurring 'layer by layer, strand
by strand; it is not a big bang sort of thing'. The Committee understands that the
number of tariff bands is high, some 22 ranging from 0 to 260 percent.
From 1991 until it was voted out of power in May 1996, Prime Minister Narasimha
Rao's Congress Government developed and implemented a strategy which aimed
to transform India's economy from an inward-looking and protectionist one, to
one fully integrated in the world trading system.20 The process continued under
subsequent Prime Ministers Gowda and Gujral and there were concerns that the
recent election of the Bharatiya Janata Party (BJP) to power in India would
threaten the reform process.

IT Industry:
The Information Technology (IT) industry is an essential component of the
technology-driven knowledge economy of the 21st century. In fact, globally India
has been recognised as a knowledge economy due to its impressive IT industry.
The IT industry mainly encompasses IT services, IT-enabled services (ITES), e-
commerce (online business), Software and Hardware products. This industry is
also instrumental in creating infrastructure to store, process and exchange

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information for important business operations and other organisations. The IT-
based services and products have become indispensable for flourishing any
business enterprise and accomplishing success. This industry has a conspicuous
impact in improving the productivity of almost every other sector of the economy,
it also has huge potential for further accelerating the growth and economic
development. Information Technology not only contributed to the economic
development of the country but it has also made governance more efficient and
responsive. It has made access to government services and information easier and
inexpensive. Information technology has also made management and delivery of
government service ( such as health services, consumer rights, etc.) more
effective with enhancing transparency.

The growth of the IT industry in India is unprecedented across the economies of

the world. All the sub-sectors of this industry (hardware products have relatively
seen less progress) have made strides in revenue growth in the last two decades
and fueled the growth of the Indian economy. The rapid advancement within the
IT industry and liberalisation policies such as reducing trade barriers and
eliminating import duties on technology products by the Government of India are
instrumental in the growth of this industry. Also, various other government
initiatives like setting up Software Technology Parks (STP), Export Oriented Units
(EOU), Special Economic Zones (SEZ) and foreign direct investment (FDI) have
helped this industry in achieving a dominant position in the world IT industry.

In the present time, when the COVID-19 pandemic has grappled the whole world
and economies have been hard hit. Indian IT industry is still showing positive signs

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and has the resilience to overcome this unprecedented tragedy. It has emerged as
a global economic force and a major contributor to the Indian economy in
particular and the world in general. This article tries to outline how the Indian IT
industry has evolved over the years and its prominent role in boosting Indian’s
growth.

Evolution of Indian IT industry

After independence till 1970, India did not have any guiding policy or framework
for computer/software technology. However, the government had taken several
initiatives for starting the design and production of computers in educational
institutes during this period. In 1963, Bhabha Committee emphasised on the
importance of electronics and computers for the development of India. On the
recommendation of the Bhabha Committee, the Government of India established
the Department of Electronics (DoE) in 1970 for promoting the growth of
electronics and computers in India. In 1972, the government formulated a new
software scheme and allowed hardware import and export of software. This
scheme is considered the first breakpoint in the history of the Indian IT industry as
in 1974 Tata Consultancy Services (TCS) got its first foreign client Burroughs
Corporation from the United States.

For the next decade, though Indian companies viz. TCS, WIPRO, Infosys (1981)
were exporting the software products but trade was not very encouraging. In
1978, IBM was forced to close its operations in India as the government had
asked it to reduce its equity. However, in 1986 the government brought a
liberalisation policy for the IT industry which de-licensed hardware import and
encouraged duty-free export. Further, due to liberalisation in 1991 and opening of
the Indian economy for foreign investment, intensified competition in the IT
industry which resulted in standardisation and productivity improvement. The IT
industry has grown rapidly and earned large amounts of force exchange. The
Information Technology Act of 2000, National Broadband Policy of 2004 and
Special Economic Zone (SEZ) Act of 2005 gave a boost to the IT industry and

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resulted in an increase in the number of domestic and foreign software/IT
companies in the country.

In the last decade, India has emerged as an IT hub for the software companies of
the world and Indian software companies have taken prominent positions in the
global IT sector. India has become the world’s largest sourcing destination for the
IT industry. Online retailing, cloud computing and e-commerce are all contributing
to the speedy growth of the IT industry. The rate of growth in the IT sector for
2019-20 is approximately ten percent.

IT industry boosting India’s growth

Indian IT industry has grown rapidly with an exponential growth rate after the
economic reform of 1991-92. Indian IT companies have set up thousands of
centres within Indian and around 80 countries across the world. The majority of
global corporations are sourcing IT-ITES from the Indian IT industry, it accounts for
approximately 55 percent of the global service sourcing market (US$ 200-250
billion) in 2019-20. The market size (especially export) of the IT industry has grown
manifold from approx. 67 billion US dollars in 2008-09 to 191 billion US dollars in
2019-20 (Graph 1). The revenue is further expected to grow in the coming years
with an accelerating growth rate and expected to reach 350 billion US dollars by
2025.

The remarkable feature of India’s IT industry is that along with its expansion in
terms of market size it is also incrementally adding a significant share to India’s
gross domestic product (GDP) and consequently boosting the growth and
development of the country. From a minuscule 0.4 percent in 1991-92, the IT
industry contributed around eight percent in 2017-18 to the total GDP of India
(Graph 2). This share is expected to increase to ten percent by 2025.

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India’s digitally skilled pool has grown over the period and accounted for around
75 percent of global digital talent. India’s four large IT companies (TCS, Infosys,
Wipro, HCL Tech) have employed more than one million employees. New IT-based
technologies such as telemedicine, remote monitoring, etc. are expanding and
boosting the demand in the digital economy. The rollout of fifth-generation (5G)
communication technology, growing adoption of artificial intelligence, Big Data
analytics, cloud computing and the Internet of Things (IoT) will further expand the
size of the IT industry in India. As the size of India’s digital economy is increasing,
IT companies are establishing their centres in tier II and tier III cities which will
further enhance the growth and reduce the existing disparities.

Primary Health Care

One year after the World Health Assembly stated its “Health for All” goal, the
World Health Organization came up with the concept of primary health care at the
Alma-Ata Conference, USSR, in 1978. With the broad principles of social equity,
national coverage, self reliance and inter-sectoral coordination, and the aim to put
the people's health in the people's hand, it was defined as:
“essential health care based on practical, scientifically sound and socially
acceptable methods and technology made universally accessible to individuals
and families in the community through their full participation and at a cost that
the community and the country can afford to maintain at every stage of their
development in the spirit of self-reliance and self-determination”.
Primary health care is thus a broad concept within the realms of public health,
clinical services and health systems that requires optimal performance from

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various inter-related sectors acting in tandem to achieve the goal of providing
essential health care to all citizens.

Primary Health Care in India

The health care system is India is organized as shown in Chart 1, Primary Health
Care System in India. Staffing at all these centers is as per the Indian Public Health
Services (IPHS) standards.

The sub-center is thus the peripheral most and the first contact point between the
primary health care system and the community. However, the first contact point
between the community and a trained physician is the Primary Health Center,
which is supposed to provide an “integrated curative and preventive health care
to the rural population with emphasis on preventive and promotive aspects of
health care. However, specialist physicians are available only at the point of
Community Health Center, which caters to a population base of 120,000 in the
plains and 80,000 in hilly/tribal or difficult areas.
Emerging Challenges in the Primary Health Care Scenario in India
India is one of the fastest growing economies of the world, and is poised to
overtake China in terms of being the most populous nation of the world. However,
in spite of having a huge population, the government's investment to health in the
budget has been only been around 1% of the gross domestic product (GDP).[3]
The focus is largely on curative services and quick-fixes, rather than the long-term
investment on provision of preventive services, building healthy behavior or
quality medical infrastructure. The very essential components of primary health

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care — promotion of food supply, proper nutrition, safe water and basic sanitation
and provision for quality health information concerning the prevailing health
problems — is largely ignored. Access to healthcare services, provision of essential
medicines and scarcity of doctors are other bottlenecks in the primary health care
scenario. Complete absence of evidence-based guidelines on clinical scenarios
and treatment plans in the primary health care sector, together with
overburdening of the secondary and tertiary care sectors has substantially
lowered the quality of care in the nation. A few statistics on these aspects will
make the picture clearer:

Healthcare expenditure in India is mainly on curative services, and this is

increasing at an alarming rate of 12% per year. Of this, the primary health care
segment accounts for more than 60% of the health care delivery market.[4] More
than 70% of the health expenditure in India is “out-of-pocket,” meaning that these
are unplanned distress expenditures that contribute significantly to the poverty
levels.[4] The Indian government plans to roll out universal health coverage across
the nation. In spite of all this, the total expenditure on healthcare in the budget,
even in the financial years 2013-2014, is less than 2% of the GDP.[5]

Even the Prime Minister of the nation rues the fact that “Against a desirable rate
of 1 doctor per 1000 population, we have 1 doctor per 2000 people. Against a
norm of 3 nurses per doctor, we have 3 nurses for every 2 doctors.”[6] ; the
situation is worse in rural India.
Indians, particularly rural Indians, have to travel hundreds of kilometers to access
basic healthcare.
Primary healthcare is a default/"out of compulsion" career choice as more than
95% of young doctors want to pursue speciality training.
Three out of four doctors responsible for care of children in hospitals in seven
less-developed countries reported inadequate knowledge in managing common
childhood illnesses such as childhood pneumonia, severe malnutrition and sepsis.
Technology .Primary healthcare is largely seen by policy makers, and even by most
doctors, as a cheap, low-technology, nonprofessional care for the rural poor and
dealing with only few common diseases. Hence, adequate resources are not
assigned and investment is minimal. Some of the major lacking aspects in the

26
primary health care set up as discussed earlier can be sorted out if India
concentrates and merges its healthcare industry to the sector for which India is
renowned worldwide — information and technology. “Naysayers might argue
about the high costs involved with initially setting up the telemedicine network
but they overlook the fact that in the long run it actually does bring down the
health overheads. (cost of travel, number of workdays lost, the costs and
harassment associated, special incentives to be given to specialist doctors for
serving in the rural area etc.).
With increasing access to online information and services, it is only normal for
even rural citizens to expect that the health sector will provide them with similar
access, efficiencies and ease of information and connection as in other sectors and
in urban areas. Citizens not satisfied with the quality of care at the first level of
contact bypass one or two levels in the health system and seek care only in higher
systems, leading to overcrowding there and hampering quality of care in higher
centers too.
The pressures from the burgeoning but educated middle class in semi-urban and
ruralarears on the primary health care set up might be eased by making self-care
technologies available. Affordable technology-based diagnostics is another area
where efforts must be specifically directed.[9] The Indian pharmaceutical industry,
which is one of the prime movers in the generic medicine market, should heavily
focus on even more safer, effective and cheaper drugs and vaccines.
With limited health personnel and their unwillingness to move to rural areas, the
only viable option seems to be adopting telemedicine where the scarce resource
of physician specialists are made more accessible by use of affordable
technologies. Electronic information exchange, vide individual electronic health
records (IEHRs) (best if linked with the Aadhar Card numbers that give unique IDs
to every Indian citizen), will enable a strong support for multi-disciplinary primary
health care collaboration and enable efficient exchange of information between
the primary health care, community and specialist settings.
“The co-emergence of information technologies accessible to the mass population
and user-driven health care provide a potential catalyst or innovation”[10] for
transition to a better primary healthcare delivery system. Health care providers
vide such technology-enabled primary health care networks will thus be able to
set up a virtual, integrated health care team. Supported by on-ground staff, the
virtual team will be able to give accurate and timely information to provide

27
evidence-based treatment that can be individualized per the needs of the patient
by the ground staff.
Digital patient information will also immensely help by allowing access of primary
health care data by researchers and epidemiologists located in world class
facilities. They can analyze it and suggest suitable “fixes,” monitor them and even
generate guidelines for treatment in a primary healthcare set up, all with the click
of a mouse. Abundant use of appropriate technology can help improve the quality
of care too. Technology use will also allow development of the much-required
“primary care teams to deliver effective evidence based preventive and chronic
care outside hospital.”[10] Telemedicine has already been used in providing
home-based dialysis care in (end-stage renal disease [ESRD]) patients of
Hyderabad. It has brought down the costs of care to more than 90%.[11] “For a
global IT giant like India, which has already made wonders by making the worlds
cheapest tablet, Aakash, setting up a cheap yet robust Telemedicine network
should not be that difficult.”[8] Such a telemedicine network integrated into the
primary healthcare set up will be a major game changer in the health system
scenario in India.
Accountability
It is essential to provide and integrate public health services into the primary
healthcare set up model. The widely appreciated “Family Health Programme in
Brazil” can be adopted easily in India with minor modifications to improve on it.
Coupled with appropriate use of technology, it will radically reform the currently
rusted primary health care system.
The first point of care should have a primary physician to improve quality of care
and patient satisfaction. In order to achieve that, the primary health center is
merged together with the community healthcare staff. Here, a multidisciplinary
team is made consisting of all staff as entailed in the IPHS together with the
addition of the following members in the team — five preventive health workers,
one health educator, five health educators, one public health specialist, one
manager and one additional doctor per 1000 population (primary care physicians).

Thus, curative, preventive, promotive and public health in the well-defined

geographic area is the responsibility of one team. The Multidisciplinary Health
Team as mentioned above will man the particular primary healthcare set up for a

28
well-defined geographic area and be accountable and answerable for the “Health
for All” in that particular well-defined geographical area. The manager (preferably
an MBA) will be responsible for all administrative and liasoning work, together
with smoothening the workflow and removing bottlenecks in the system. All
logistics should be exclusively his domain. This would leave the doctor and the
public health specialist free to work on the skills they are trained for and not be
bogged down by administrative work. Additional health educators will free all the
other categories of workers from the job of providing health education and
information. These health educators together with the preventive health workers
will work under the direct supervision of the public health specialist. Additionally,
specialists might be inculcated to the team as per the requirement of the
particular community. For example, an infectious disease specialist might join the
team in a community suffering from spurts of dengue cases every year. Special
Sub Health Teams might also be created as per requirements. For example, a
community with a high number of cancer patients might have its Palliative Care
team that would provide home-based palliative facilities.
Monitoring will be performed regularly by the team itself and periodically by
external nongovernmental evaluators. Monitoring will be carried out regularly by
the team itself and periodically by external nongovernmental evaluators.
Performance-based incentives to the entire health team on an individual as well
as a collective basis based on verifiable results and predetermined performance
benchmarks should be the norm. These health teams must enjoy “substantial
organisational and professional freedom as long as the health outcomes meet
national standards” should be granted[12] as the “one size fits all” model
currently in vogue in India is besotted with problems. The public satisfaction to
the services provided should also be monitored on a regular basis so that the
provision of services and quality of care are driven by demand[12] and not on the
whims and fancies of policy makers and perceived requirements. Thus, a culture
of better services would be created where the health team would be continually
called upon to improve and performance-based pay provided to the team for all
improvements they make. Virtual health teams consisting of specialists would
support the health team 24*7 together with facilities of transport. This is
expected to prevent the “refer more, resolve less” approach currently in vogue in
primary health centers for fear of litigation and violence. Once unnecessary
referrals from health systems are prevented, the quality of care in the entire
health system will improve.

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Ink-Blot Strategy
The ink-blot strategy is a military maneuver whereby counter-insurgency and
reconstruction efforts spread outwards from secured key areas — as an ink spot
expands on paper.[13] The strategy is particularly useful where only a small
military force is available and the force gradually pushes out expanding its zone of
control, eventually joining together with other similar ink spots. The strategy has
been used in the Vietnam War and, more recently, in Iraq by the Americans and in
Afghanistan by the NATO.
This ink-blot strategy can be used to implement the model proposed above and
any variations in the above model. First, one has to identify a place where ideal
conditions of adopting such a model exist or where the existing infrastructure of
good practice can be easily modified to implement the concept plan. Various
variants of the model might be tested vide different ink blots with similar
epidemiological characteristics (for better comparison). Once it is known that the
desired changes have taken place and the desirable results have been achieved,
each multidisciplinary team is given greater resources at its disposal and the ink-
blot area is increased thus establishing a larger area of good practice and better
primary health services. Over the course of time, all these places would be
converted into a suitable ink color, i.e. better teams with good work practices will
be established uniformly in the system eliminating the ink-blots of inferior quality.
Discussion
The plan for including “Technology, Accountability, and an Ink Blot Strategy” as
outlined in the paper. The three-pronged strategy for primary healthcare would
need a revamp of the entire healthcare system together with broad changes in the
medical education sector — such that skill- and experience-oriented academic and
career progression is assured. Also, the huge initial investment and the reliance on
technology will need a massive commitment on the part of the government.
However, the suggested triad will help in solving various issues plaguing the
current health system. Technology will enable better outreach as well as increased
patient satisfaction and drive up compliance too. It will also prevent the need to
travel extensively on health grounds and will thus save expenses on account of
travelling as well as loss of “workdays.” In the long run, use of self-diagnostics as
well as getting treated in the community under care of a primary care physician,
but at the same time enabling access to specialist care, will lead to less burdening
of secondary and tertiary care units, thereby improving the quality of care there

30
as well. Infusing accountability will also infuse the sense of work culture and
provide better services. The ink-blot strategy, wherein a better team gets a larger
area (and hence more funds), will provide an incentive for innovation as well as
ensure career progression of all team members. This concept paper however only
takes a broad view of the state of primary health care in India, together with
problems in its health system and the perceived emerging need of quality medical
care. The concept paper recognizes and solves the very complex issue of primary
healthcare system reforms in India. This is a preliminary document on a suggested
model that needs to be worked out on a broader basis across all stakeholders.
Operational definitions, standards of procedure and protocols need to be
developed and integrated into the system.

Agriculture Sector:
Agricultural sector in India has moved from a traditional agriculture in the 1950s
to the modern technologically dynamic high capital-intensive agriculture, in which
along with food and non-food crops, horticulture and other allied activities have
also expanded.
A study of the economic framework within which traditionally low productivity
agriculture is transformed into high productivity modem agriculture is important
in policy-formulation and planning for growth. Productivity here refers to
productivity of agricultural land, labour and capital resources; and this involves
the larger use of scarce resources like capital, foreign exchange and expert
personnel.

An absolute criterion cannot be laid down about the content and chronological
order of such compositions, since agriculture varies vastly from area to area in
terms of physical conditions (i.e. soil moisture, cropping pattern, responses,
availability of labour, etc.), cultural factors (education, receptivity to innovations,
consumption pattern, etc.), economic factors (prices of input and outputs) and
institutional factors (nature of research, extension, marketing supply and other
institutions).

31
Nevertheless, in the context of Indian agriculture, three distinct phases of growth
can be distinguished as follows:

Phase I: Traditional Agriculture:

This is a technologically stagnant phase in which a larger farm production
becomes generally possible only through increased application of all three
traditional inputs, vis. land, labour and capital. The rate of increase of output is
normally smaller than the rate of increase in inputs-revealing diminishing
productivity of inputs, even at a low yield.

Even if some elements of dynamic agriculture like application of fertiliser,

improved seeds and land reform are introduced, the increase in productivity is
smaller.

Further, given their resources and knowledge, the traditional farmers cannot
become any more efficient as both these factors strongly limit their participating
actively in contributing to higher production. Till mid-1960s, the Indian agriculture
was typically embodied within the framework of traditional agriculture outlined
above.

The period 1950- 51 to 1966-67 can be easily divided into two sub-periods as
follows:
i. First sub-period (1951-61):

This period lasted over the first decade of economic planning spread over the
period covered by the first and second Five Year Plans. The primary characteristic
of this period was that production of agricultural crops consistently maintained an
upward trend, except for small dips in two years, 1957-58 and 1959-60. The index
number of production of all crops went up from 45.6 in 1950-51 to 66.8 in 1960-
61 (Base: 1981- 82=100).’

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ii. Second sub-period (1961-67):

During this period (i.e. 1960-61 to 1966-67) production either declined or

remained stagnant in the case of a number of major crops, especially food grains,
as can be seen from Table 13.1:

This led to a serious crisis in the Indian economy prompting a reappraisal of the
growth strategy pursued in the agricultural sector. This reappraisal of policies and
strategies brought about a transformation in Indian agriculture, leading to what
can be marked as phase II of Indian agriculture.

Phase II: Technologically Dynamic Agriculture with Low Capital Intensity:

The Indian agriculture entered the next phase after 1960s. This is described as
phase II marked for technologically dynamic agriculture with low capital intensity.
This is the beginning of the process of transformation from traditional agriculture
to modernisation. In this phase, agriculture still represents a large portion of the
total economy.

33
But population and incomes would be rising, increasing the demand for
agricultural products while the size of the average holding would be coming down.
There is scarcity of capital both in industry and agriculture. The farm sector tends
to use more labour than capital, since labour, owned or hired, would be still,
relatively cheaper than mechanisation.

The distinguishing feature of phase II is the application of science and technology,

evolved by research institutions, in a progressively large measure. This increases
the productivity of farms when small capital additions are made in the form of
improved seeds, fertilisers and pesticides. The profitable innovations are accepted
by the farmers despite imperfections in land tenure, marketing and input supply
system.
The stagnancy that had marked the agricultural sector during the early-1960s, had
largely been overcome around the end of the decade. In the wake of the new
agricultural strategy of growth (called the Borlaug seed-fertiliser-technology) that
had been adopted, agricultural production especially food grains, began to
increase sharply Table 13.2.

34
Increase in agricultural production can be attributed either:

(i) To increase in area under cultivation (i.e. horizontal expansion), or

(ii) To an improvement in yield per hectare (i.e. vertical expansion), or

(iii) To both an increase in area under cultivation and an improvement in yield per
hectare.

During this phase of transformation, significant contribution to improved

agricultural output was achieved by way of improvement in agricultural
productivity with little change in area under cultivation. Index number of area
under cultivation changed marginally from 96.3 in 1970-71 to 105.2 in 1990-91.

On the hand, the index number of agricultural production increased from 85.9 in
1970-71 to 148.4 in 1990-91 (Base: 1981-82 = 100). This phase of agriculture
transformation came to be known as the period of Green Revolution. The green
revolution was, however, confined to a few crops- wheat and rice, and to few
regions.

Phase III: Technologically Dynamic Agriculture with High Capital Intensity:

35
As phase 11 advances, more and more innovations giving small returns singly, but
large returns jointly would be accepted leading to higher productivity. In order to
expedite progress, there should be an extensive utilisation of available abundant
factors. At the same time, relatively scarce infrastructural facilities like research,
extension, marketing, etc. should be utilised optimally with efforts directed
towards expanding the infrastructural resources.

Indian agriculture entered the third phase of technologically dynamic agriculture

with high capital intensity towards the end of the decade of 1980s. This was
precisely the period when the non-agricultural sectors also began their march
towards modernisation.

Non-agricultural sectors were facilitated in their move towards aggressive

modernisation by the new policies of liberalisation, privatisation and globalisation.
This phase of agricultural transformation is thus characterised by the substitution
of labour by capital by way of large-scale farm machinery, and considerable
competition between the sectors for capital

FMCG:
India's economic resurgence, it is said, is driven by domestic consumption. Look at
the fast-moving consumer goods (FMCG) industry, which has more than trebled in
the last decade to Rs 1,300 billion, according to a study by the CII. The relative
underpenetration of FMCG products, though, shows that the Indian consumption
story is still in its early stages.
India's economic resurgence, it is said, is driven by domestic consumption. Look at
the fast-moving consumer goods (FMCG) industry, which has more than trebled in
the last decade to Rs 1,300 billion, according to a study by the CII. The relative
underpenetration of FMCG products, though, shows that the Indian consumption
story is still in its early stages.

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