Tourism | Value Added Tax | Tourism

About Indian Tourism
 As per the Travel and Tourism Competitiveness Report 2009 by

the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd  overall, moving up three places on the list of the world's attractive destinations.  It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country.  India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10year) growth and is expected to be the second largest employer in the world by 2019.  India has been ranked the “best country brand for value-formoney” in the Country Brand Index (CBI) survey conducted by Future Brand, a leading global brand consultancy.  India also claimed the second place in CBI’s “best country brand for history”, as well as appears among the top 5 in the best

Contribution to the economy
 According to the Travel & Tourism Competitiveness Report 2009

brought out by the World Economic Forum, the contribution of travel and tourism to gross domestic product (GDP) is expected to be at 6.0 per cent (US$ 67.3 billion) in 2009 rising to US$ 187.3 billion by 2019.  The report also states that real GDP growth for travel and tourism economy is expected to be 0.2 per cent in 2009 and to an average 7.7 per cent per annum over the coming 10 years. Export earnings from international visitors and tourism goods are expected to generate 6.0 per cent of total exports (almost US$ 16.9 billion) in 2009, growing (nominal terms) to US$ 51.4 billion in 2019.  The travel and tourism sector which accounts for 6.4 per cent of total employment or 1 in every 15.6 jobs in 2009 is expected to generate 40,037,000 jobs i.e. 7.2 per cent of total employment or 1 in every 13.8 jobs by 2019. Real GDP growth for Travel & Tourism economy is expected to be 0.2 per cent in 2009 and to average 7.7 per cent per annum over the coming 10 years.

Connecting flights to the departing airports are included in the final travel costs.  Euromonitor International's Travel And Tourism in India report states that the Government of India increased spend on advertising campaigns (including for the campaigns ‘Incredible India’ and ‘Ahithi Devo Bhava’ Visitors are like God) to reinforce the rich variety of tourism in India. holiday resorts and tour operators.  The airlines participating in the campaign.  The Ministry promoted India as a safe tourist destination and has undertaken various measures. . It also deployed increased manpower and resources for improving security checks at key airports and railway stations. aimed to project India as an attractive destination for holidaymakers. The government joined hands with leading airlines. offering them a wide range of incentives and bonuses during the period between April and December. Jet Airways and Kingfisher Airlines are offering a “companion free ticket” for every ticket purchased for international and domestic flights. 2009. The Indian Travel Agents’ Association (IATO) is offering holiday-makers a free sightseeing tour in a city of their choice. Air India. hoteliers. such as stepping up vigilance in key cities and at historically important tourist sites.Government Initiative  The campaign ‘Visit India Year 2009’ was launched at the International Tourism Exchange in Berlin.

The Himachal govt has introduced a scheme – Himachal Pradesh Home Stay Scheme 2008 under which tourists are given the opportunity see the rural areas. The concept is based on ‘Ocean Dome’ artificial beach in Japan.Initiatives at State-level with involvement of Locals: States are taking initiatives in teaming with locals to provide a flavor of their culture and traditions. Some of the initiatives are mentioned below: HIMACHAL PRADESH . MP – The govt of MP is keen to initiate the development of an artificial beach in the state. KERALA .000 hotel rooms spread over more than 150 hotels. AP – AP has about 18 projects lined up under various categories such as temple circuit development and eco-tourism projects. Aranmula and Kumbalangi.Rajasthan has a developed tourism infrastructure. RAJASTHAN . . with close to 6.Kerala has introduced innovative tourism initiatives. GUJARAT – Through the ‘Vibrant Gujarat’ programme plans to actively market the tourism sector. are being promoted as tourist destinations in a big way as part of the ‘Endogenous Tourism Project’ of United Nations Development Programme and Govt of India. Two of its villages.

Tourist Circuits in India  CULTURE. . amongst other states has identified and is developing ethnic villages. para-sailing and bungee-jumping are popular with the younger travelers and working executives. HERITAGE AND ETHNO :TOURISM – Chattisgarh. rockclimbing. trekking. ADVENTURE TOURISM – Adventure sports such as water sports. The private sector is also being encouragement for proper maintenance.

MEDICAL TOURISM AND SPAS – India has originated as one of the most important hubs for medical tourism. CARAVAN TOURISM – A new policy guideline to promote ‘Caravan Tourism’ in India and facilitate the infrastructure required for the same would be announced. which will find scope to grow in the vicinity of such highway tourist complexes. exclusive steam and hill charters. The policy would aim to leverage India’s potential in traditional systems of wellness and medicines like . ECO – TOURISM – India’s forest. Many people from the developed countries come to India for the rejuvenation promised by yoga and ayurvedic message therapy as well as for high-end surgeries like cardiac bypass surgery or knee/hip replacement. RAIL TOURISM – The Indian Railways has introduces several new services to promote rail tourism – luxury tourist trains.A new policy guideline for promoting ‘Wellness Tourism’ in India would be announced. HIGHWAY TOURISM . AVIAN TOURISM – Adding another dimension to the Kerala's backwater and health tourism is the avian tourism to attract birdwatchers from all over the world. planned development of highway tourism opens opportunities for enhancing local employment and uplifting rural economy through local feeder enterprises. national parks and wildlife sanctuaries are major attraction for a whole lot of tourist from around the world. tour packages.Besides catalyzing diversification of tourist traffic and revenue from the urban centers. WELLNESS TOURISM .

Travelers analysis
2 % 2 % 2 % 2 % 2 % 2 % 2 2 % SE Asia W Asia W Europe Africa Australia C & S America E Asia E Europe N America S Asia
2 2 2 2 2 2 2 2 Num ber of Travellers (Mn)

Share of Outbound Travelers, 2006-2008

2 2 % 22%

Number of Outbound Indian Travelers 2 2
2 2 2222 22 22 2222 2 2 2 2 2 2 2 2

Foreign Tourist Arrivals

Estimates of foreign tourist arrivals (FTAs) and

foreign exchange earnings (FEE) are important indicators of the tourism sector. FEE in US$ terms during the month of November 2009 were US$ 1.2 billion as compared to US$ 1 billion in November 2008.

Tourist Visits in India

The number of domestic and foreign tourists has almost doubled in 2003 and 2008.

Indian Tourism Industry-Market Size 2 2 2 Market Size in Bn 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 E 2 2 % 2 2 % 22 2 2% 22% 11 International Tourist Spends Domestic Tourist Spends 2 2 2 2 2 2 2 2 F 111 2 2 2 2 F .

India’s GDP has been growing at the rate of 6% since the liberalization of economy in 1991 and has grown over 8% in the past few years.India GDP Growth The most important growth is the robust economic growth that has been witnessed in the country. At 8% CAGR. India’s GDP would almost triple from US$ 1200 Bn to US$ 3500 Bn by 2023 .

Growth in GDP per Capita India’s strong economic growth has caused the GDP per Capita to increase rapidly over the past 5 to 10 years. the GDP per capita in 2013 would be double of what it was in 2003 . At current rate.

By 2025. discretionary spends would be going up and this bodes . the Indian middle class is expected to constitute 46% of the Indian population. Subsequently.Distribution of Households Across Income Brackets More and more families are expected to leave the deprived or aspirers category and join India’s burgeoning middle class.

The advent of LCC has spurred domestic air travel to grow from 11 Mn travelers to 36 Mn travels in the last decade. . Operational airports in the country have gone up from close to 40 airports in 2004 to 81 airports at present.Share of LCCs In Airlines 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 % 2 2 % % n i e r a h S Fsc: Full Service Carriers LCC : Low Cost Carriers The above graphs indicates the increasing share of LCC from 33% to 47% between 2006 and 2008.

2 2 % T otal Domestic International 2 2 2 2 2 11 11 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 -2 2 2 2 11 11 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 .2 2 % 2 .Air Travel in India 2 2 2 2 2 2 e l t T s i x A 2 2 .2 2 % 2 2 .

 Airport Charges to be cut for a limited period by 50%.  Airline tickets.Steps taken by Government to Promote Tourism in Country. . the 11th reduction since September last year.  Removal of 8% excise duty on ATF.  Reduce the charges which airport operator charges from the oil companies. leading to enhanced performance. tour package are all set to go cheaper with 2% reduction in service tax  State-run oil companies have slashed Aviation Turbine Fuel (ATF) prices by 7%.

4% to the GDP. 35 Mn people apart from the indirect employment in allied sectors.  Today the industry contributes around 14% to industrial production in the country. government policies as well as market events have begun to converge. an important economic engine for the nation. providing several growth opportunities for the sector . is estimated to directly employ apprx.  Apart from China.  In the past 10 years. depth and competitiveness of the Indian textile and apparel industry. the industry’s actions.Indian Textile and Apparel Industry  Indian textile and apparel industry is one of the oldest and most significant industries in the country and one of the largest in the world. spread. in sum.  It accounts for about 15% to the country’s exports and is. thus making it the second largest employer after agriculture. no other country can match the size.

The Indian domestic textiles and apparel market is one of the fastest growing market in the world. 15% of .Current Size : Indian Textile and Apparel Indian Textile and Market Apparel Market US $ 62 Bn Domestic Market US$ 40 Bn Exports US$ 22 Bn Textiles US$ 12 Bn Clothing US$ 10 Bn The present size of the Indian textile and apparel market is US$ 62 Bn of which 22 US$ Bn is exports while rest US$ 40 Bn is the domestic market. It is expected to become one of the major consumption bases in near future. The textile industry plays a significant role in getting the foreign exchange reserves into the country as it contributes approx.

India’s Special Economic Zones (SEZs) attract foreign investment by providing tax incentives.FDI in India : Current Scenario  Due      to India’s recent liberalization of its foreign investment regulations. assistance with bureaucratic and administrative problems and access to reliable infrastructure. the country has become one of the fastest growing destinations for FDI inflows. and an educated work force. From August 1991 to March 2009. India offers many advantages to foreign investors like strong economic growth leading to increased buying power by the middle class. low wages. 100% FDI allowed under the automatic route. FDI sectors to the extent permitted under automatic route does not require approval either by Government of India or Reserve . India has attracted a total of US$ 106 Bn. Even in times of recession / slowdown in most of the developed economies. In textile and apparel sector. of which approx. India is expected to maintain this level of growth. US$ 90 Bn was invested during Apr ‘00 to March ’09. Indian economy is growing 6 % per annum since last 10 years.

9 Mn in 2007 to 38. polypropylene etc. Broad range of Products Indian Industry has over the years steadily diversified its raw material base t include man made fibers such as polyester. acrylic. Production Capacity : The capacity in spindles in the mill sector increased from 35. ( from fiber to retail). viscose.Foreign Investment in Textile and Apparel Industry Vertically Integrated : Cotton Other Natural Fibres MMF Ginning Small Players Spinning Extrusion Small Players Garment Weaving / Knitting Processing Domestic Retail / Exports Buyers Distribution Channel Big players constitute mainly the composite units or garment exporters Indian industry is amongst the very few in the world that is vertically integrated from raw material to finished products.4 Mn in 2008. Fabrics: The Indian weaving and knitting has today includes products as .

) Chelsea Premium Outlets Atrium Furniture Mall Sungei Wang Plaza Bicester Village US US Kuala Lumpur UK 0. This sort of concept. furnishings and electronics.2 - An outlet Center offers discounted merchandise for slow moving items and non seasonal merchandise for various categories. furniture. consumer durable.mover advantage. . leveraging first.2 0. does not exist in India.International Outlet Centers Outlet Center Country Mall Size ( Mn Sq Ft. Dominating categories include apparel & footwear.3 1.

7 A lifestyle center is essentially a premium shopping destination designed for the entire family.0 1.2 2.5 0.International Lifestyle Centers Outlet Center Country Mall Size ( Mn Sq Ft. .) Deira City Center Ngee Ann City Suria KLCC Times Square Pacific Place Dubai Singapore Kuala Lumpur Kuala Lumpur Hong Kong 1.4 3. Lifestyle centers have emerged as the most successful way to differentiate and create space in the already established retail malls.

infrastructure and out outlook to management more lean and specific. such dynamism and corporatization has completely changed the face of the healthcare industry. . there is a growing need to come up with newer models to improve operational efficiency and make processes.Healthcare Industry  The wave of change has swept across every industry.  Due to increased competition Healthcare Providers are unable to pass the burden onto patients in the same proportion.  Since there is a rising demand and unprecedented growth of the sector.

The Ongoing Transformation in Hospitals Documentati on Mode of Payment Public Relations Quality Hospital Financial Operations Human Customization Resources Electronic Medical Records Third Party Marketing / CRM Accreditat ion Revenue Cycle Managem ent Active Employee engagem ent Personali zed Care .

hospitals have improvised and developed their own USP models. While there is no standard formula to do the same.Changing Healthcare The Toyota Way Changing market dynamics and customer attitudes are forcing companies to redefine their business models. . They have been able to increase patient volumes by differential pricing. use of “Case Process Map” wherein the activities of all the staff involved in a procedure are mapped and time plotted allowing the variation to be studied and corrected. Some innovative practices adopted by hospitals to reduce the costs and improve on the throughput: A popular ‘for-masses’ Indian hospital charges different fees for diagnostic services at different times of the day. To streamline operations.

Case Process Maps Start Patient Entry Surgeon Assistant Machine Support OT Nurse     Patient Prep   Incisio Procedur End Closur Patient n e e Exit       Room Cleaning                                                 Anesthesiologi   st               .

value mapping and best practices are designed to help implement these principles . Activities such as reorganization.Japanese Process Improvement Traid. Eliminate ‘Muda’ : Waste Reduction Avoid ‘Muri’: Standardization Minimize ‘Mura’: Promote Consistency Muda: Waste Mura: Inconsistency Muri: Randomness Many hospitals are adopting the classic Japanese Process Improvement Traid as Shown.

 In today’s changing environment. they should take into account various design parameters that can result in direct or indirect economic benefits.  Some of the parameters that can lead to operational efficiencies and thereby.Facility Planning: Role in Performance enhancement  In recent times patient expectations and demand for quality healthcare facilities in India have undergone a transformational shift. cost savings are: Patient monitoring.  .  Standardization.  Nurse travel distances .  Patient flow. as hospitals look to improve their performance.

Facility Planning Patient Monitoring Ideal Unit Configuration for Critical Care Patient Arrival Registration Waiting Nurse Travel Distances Layout of a Typical Patient Care Unit Nurse Travel Distances Patient Flow Typical Patient Flow for Outpatient Services OPD Consultation Billing Pharmacy Diagnostics .

. maintain and organize a database of its current and prospective customers.  Hence there is a series of relationships that need to be nurtured and managed to enhance patient retention. Hence customer service is one of the major drivers of repeat business. there is a wide difference between the customer and consumer. It plays important role in retaining the patient.Customer Relationship Management  Customer Relationship Management (CRM) is a method for an organization to track.  The cost of efforts undertaken to retain a customer is ten times lesser than that of acquiring a new one.  In the healthcare sector.  In a active CRM programme it is necessary to train every member of the hospital in providing quality care and service to the patient .  CRM is increasingly applied in the healthcare industry in the following way:  CRM goes long way in building patient confidence and goodwill. and hence it becomes a deciding factor for patient while choosing a hospital again.

Propensity to busy. Insurance Schemes Customer Analysis Customer Delight & Retention Customer profitability. Attrition behaviors Analysis & Application Of this date to provide quality Service to customers Customer Care . Collection & Integration of Customer data Multi-channel Integration Customer Marketing Credit Cards.Application of CRM Application of CRM CRM has now evolved into a science which has been used very effectively and productively to enhance the efficiency of various sectors such as the banking industry.

Today in most hospitals in metro cities.end Appointments Scheduling •Registration •Patient information collection •Information verification •Insurance validation Registration •Computing the deductibles and co-payments •Public health insurance program counselling •Clinical documentation (used in the billing process and Communicated to third-party Payer) •Collection and recording of cash received •Contractual allowances Back-end •Follow up for outstanding payments/accounts receivable •Denial management •Billing and collection •Claims review. Most patients pay for their hospital expenses directly. approval and denial along with insurance company Core •Charge capture into Hospital information System (HIS) •Diagnosis and procedure coding Less than 10% of the Indians are estimated to be covered under some sort of health insurance. Failure to realise this could seriously affect the working capital of a hospital.  Core : Provision of actual healthcare services.Hospital Revenue Cycle Management Standard Revenue Cycle with Activity Analysis Front . . over 50% of patients have some form of third-party reimbursement plan. The hospital revenue cycle has 3 major components :  Front-end: From the time the patient comes in first contact with the hospital to registration.

all record are maintained in physical form. Continually upgraded Safe with Authorised viewership Cost efficient Vital information At vital times Search and sorting Made easy In India. Hospitals. EMR serves as comprehensive database of the patient’s entire history. but they are also very userfriendly as they help to locate relevant data instantly when needed across multiple locations and point of times. . For cross referral check or an opinion at second hospital. the patient has to go through the entire process of documentation and resting again adding to his financial distress.Electronic Medical Records Advantages of EMR Continuity in treatment Accessible at all times. barring a few Pvt. Electronic Media Records (EMRs) eliminate the burden of tedious paperwork occupying much of the physician’s quality time.

Better inventory and medical package control.. Improved continuity of medical records Automated patient billing With over 400. Customisation Pharmaceutical substitution Flexibility Speed Security assurance Scalability and with control interoperability . the hospital reduced its outpatient processing time by 40% to increase patient throughoput.Case Study: An Indian 650-bed multi-specialty state-of-the-art hospital deployed an advanced web-based HIS.000 outpatient visits per year. Rapid access to laboratory result.

Innovation @ Google Google Maps Earth Medical Consultation online Google Health Manage Health records GH on iPhone Mobile phone health access Google flu trends Digital Outbreak detection Many companies like Google. have innovated and taken technology a step further by coming up with a whole range of medical technological applications such as predicting epidemic trends and also making healthcare advice available on cell phones .

Increasing scarcity of skilled labor and real estate requiring vertical and mechanized warehouse. Thus. Increasing level and variety of service required by customers. 6-8 locations will have mega warehouses with complex operations in the near future. . modernization of key warehouses is strongly recommended on account of: Large sizes.Impact of Warehousing Technopak estimates that for most organisation’s. especially organised retailers. high through outputs and more complex operations.

after the introduction of GST. The freight distance saving translates directly . In Case2. the customer can only be served from a warehouse in State B but by backtracking in the direction of the source. the network linkage is re-defined and the back tracking is saved substantially by serving the customer directly from the factory. the source is State A (left) and the customer is in State B(right).Freight Savings Due to Case 1 : CST at 2% State Border Old Warehouse GST 1000 Kms Plant Illustrative freight distance (and hence cost0 saving of 400 Kms for Cutomers1 Case 2 : GST State Border Old Warehouse Customer 1 Customer 2 Plant 200 Kms Customer 1 New Warehouse Customer 2 In Case I. or a warehouse “on the way” in State A itself. Due to CST barriers.

Improved Assortment : Often SKUs needed by customers are not available at the ware house meant to serve them although they may be idling at another warehouse.Impact on Service Level The key fallout of GST aligned networks is fewer warehouses but this also has two implications on customer service:   Longer Lead-times to Customers: This would not be an issue as long as the network redesign exercise puts a minimum lead time/distance constraint while serving customers in the new network. The Key to improve service to customers is to undertake a professional scientific exercise as opposed to manual experience based methods that many firms have used for designing their .

•Employees. •Modernisation •Change Management Distribution Setup Design •Network modeling based on MILP Programming.Our Methodology for GST Implementation Solutions Impact Analysis Model Warehouse •New Network rollout •Audit of Current Setup. •Vendors. •Future Scenario impact Engineering •Design & Layout. Systems & Processes . •Minimise cost subject to service level & other constraints Change Management Planning •CST transition planning.

companies would no longer be required to have a warehouses in every state just . one could expect uncertainty and panic regarding pre-GST inventory as was seen during VAT introduction Subsuming Octroi & Entry Tax ● Octroi and entry tax are not in line with the spirit Organizations will be encouraged of GST although in some cases entry taxes are to locate warehouses and hubs in VATable entry tax and Octroi zones and ● Once these taxes are paid reverse flow of goods stock more inventory there becomes chains and provide greater settable against CENVAT impetus to 3PL's ● Extended Central GST chain will allow the offset in post manufacturing networks ● This will lower the cost of logistics outsourcing as the 10. the tax rates may also final mechanisms and plan get changed for many products inventory transition very carefully for themselves.3% service tax charged by logistics companies can be largely offset against the Central GST liability Affected Inventory ● Post GST. the customers firms would be encouraged to minimise pre-GST inventory which has less input credits ● As the GST implementation date approaches closer. hence companies prefer postponed and uni-directional flow of goods across entry tax and Octroi borders Organisations will be encouraged to locate ● There are two possible scenarios through which Organizations can and should warehouses and hubs in entry tax and Octroi zones tax barriers would be removed: design their networks purely and stock more inventory there supply chain considerations and ›› Scenario 1: CST rates would reduce to zero not tax considerations with no carry-over of input credit across states ›› Scenario 2: Stock-Transfers are disallowed/taxed and inter-state sales are taxed with carry-over allowed ● In both cases. service tax on logistics services This will boost outsourcing in consumed during distribution and retail are not off. inventory will also carry Central GST & Organisations need to study GST's inter-state GST input credit. suppliers and ● Unless the GST rates go up for its product.Impact of GST on the Supply Chain GST Characteristic Extended Central GST Chain Impact on Supply Chain Implication ● At present.

50 per unit and incurs local VAT only when it sells in State B to its distributor through its depot. the firm incurs US$ 0.14 per unit and charges the final price by adjusting the input credit ( Which is available since the sale from depot was intra-Stat). If it were to do a cross-border sale to the distributor. the distributor or the retailer and yet charge the same MRP to the consumer. In this case. before selling in State B to avoid paying CST .Details of the Tables mentioned in next slide  Table 1 : Suppose a firm currently does a stock transfer from State A to State B.  Table 2 : In today’s 2% CST scenario.  Table 4: If CST is abolished and inter state sales or stock transfers are . It thus gets a margin to US$0. The calculations are based on the premise that the US$/unit retailer margin. distributor and MRP are maintained at the same level. Price to Retailer = (Distributor landed cost + Distributor Margin – Distributor Input Credit)* (1+VAT Rate).08/unit loss in margin. without going through transfer at the depot. The distributor charges a margin of US$ 0.  Table 3: If CST rates were to become zero then the firm can do cross border sale (at 0% rate) directly to the distributor without any loss of margin to itself.

2 144.5 5.2 124.2 129.7 12.0 24.8 124.2 6.2 124.2 124.2 135.6 135.3 7.2 124.2 135.8 121.4 129.Detailed Impact of Removed Tax Barriers on Cross-border Sales Table1: Current .9.0 21.0 5.8 5.0   Table2: Current -2% CST Sale Stock Transfer Sale Source Depot Distributor Retail   Landed Margin Input VAT Price Cost Credit Before Tax 100.5 5.9   .4 129.0 130.2 12.2 6.8 (All figures except VAT and CST are in US$/unit) Net Tax Final Price 12.0 130.0 0.5 5.2           VAT CST Tax 0% 12% 12% 12%   0% 4% 4% 4%   5.4 5.Stock Transfer Sale Stock Transfer Sale Source Depot Distributor Retail   Landed Margin Input VAT Price Cost Credit Before Tax 100.9 150.6           VAT CST Tax Net Tax Final Price 0% 4% 4%   2% 0% 0%   2.2 2.4 5.9 13.2 5.0 5.0 0.6 5.3 0.

2 5.Inter State Sale Taxed with Offset Allowed Stock Transfer Sale Source Depot Distributor Retail   Landed Margin Input VAT Price VAT Cost Credit Before Tax 100.2 124.8 5.6 4% 135.0   .8 129.2 4%           CST Tax Net Tax Final Price     5.9 13.9 13.2 4%           CST Tax Net Tax Final Price 0% 0% 0%     5.0   Table4: GST .6 5.5 5.2 4% 129.0 24.2 0% 124.5 5.2 6.Commercial Impact of GST Table3: GST-Zero CST Sale Stock Transfer Sale Source Depot Distributor Retail   Landed Margin Input VAT Price VAT Cost Credit Before Tax 100.9 150.2 144.5 5.2 135.5 130.2 5.8 124.0 24.3 0.2 124.6 4% 135.0 0.2 135.6 5.2 0.8 5.0 130.2 6.9 150.2 144.

Impact of GST on the Supply Chain Evolution of Key Indirect Tax Reforms GST GST Introduction 2nd Level Reforms CST Reduction CENVAT MODVAT Introductory Reforms Sales VAT .

Thus. < 600 24 – 28 20 -24  Required capacity of many warehouses will 600 – 1500 22 – 26 18 .22 undergo changes.20 fewer warehouses. impacted by CST considerations. With > 1500 20 – 24 16 . Delivery Lead Time for 80% Urban Customers . However.  The linkages between factories-hubs-warehouses-customers for various products will get re-aligned. Hubs are not directly fewer & larger warehouses may make throughputs. close and relocate. the average size of the  warehouse will go up. the size and number of hubs could get affected.Network Re-engineering for GST  The move towards fewer warehouses would require many Annual Turnover 24 Hrs 48 Hrs warehouses to (US$ Mn) combine.

xed ts ced fi Redu using cos o h e W ar ry vento oot n i d r ce Redu e Square s r e ( inv ing law) plann d ie f i l Simp duced e and r use and nt e ho ware managem C&FA times r lead e h ig H s tomer to Cus er ly high ib s s o P t cost freigh lly ia espec ry freight da secon *Safety Inventory α 1/Sqrt ( Number of Stocking Points) The root that law states This inverse also means the safety stock requirement would also go down. that : Prime-facie.Pros & Cons of Network Reengineering for GST Clearly. the benefits outweigh the disadvantages. Technopak estimates between 5% to 10% net savings in logistics _ inventory carrying costs of an organisation through this exercise. . Fewer warehouses would mean a straight saving on warehousing costs. Besides providing a simpler and more manageable network. it would appear that some of these savings would be offset by the increased cost of freight.

especially in the developed economies have recognized the value of consumer generated content and built their presence on social media.  People are now spending significant part of their internet time on social networking/ blogging sites.Transforming the Business Landscape.Social Media Sites  The increase in penetration and usage of internet in developing countries has led to the emergence of a new trend – the growth of social media.  The balance power is shifting towards the consumer with their voice becoming more powerful than marketers. the nature of consumerbusiness relationship is getting redefined.  Many companies . .  As the popularity of the medium. where the consumer is more active.

 In India around 82% of the top 500 marketers in India spend close to 5% of their total advertising budget online. 26% of this online spend is targeted towards development and maintenance of brand specific websites and another 13% goes . In USA alone the social media spend is expected to increase from US$ 716 Mn to US$ 3113 Mn in 2013.The Multiplier effect – Usage Across Business Areas Brand Awareness Product & Service Promotion Customer Service People Customer Understanding Promotion of Social Causes Product Development Knowledge Sharing Employment Brand Building According to Aberdeen Group 63% of the best-in-class companies surveyed across the world plan to increase their social media marketing budgets in 2009.

Obama – Success through social media Twitter 291000 followers My space page 1.26 Mn friends Facebook page 32000 active application users You Tube 100m+ Vedio view. 164K Subscribers .

Infosys. . Cleartrip. Leading companies are leapfrogging in the social media space with their own social networking sites and spreading multiple legs across various social media platforms.Indian Co’s on Social Media Seeking Feedback . Rediff. Fritolay and Naukri and India arms of MNCs like Microsoft. and Hindustan Unilever are few names that launched their social media presence with corporate blogging. IBM. PVR Cinemas Brand Awareness Apollo Hospitals Brand Promotion – Tata’s Nano Brand Promotion . TCS. HCL.Titan Hiring New Talent – E & Y Customers Support Kingfisher Airlines.MTV India The use of social media is now gaining popularity in India.

with 86255 comments. alumni. Rise in page view by over 48. 1 Mn page views per day on internal wikis.  .creation of an online and highly interactive model of the real game show Partnering with customers  to contribute to.Successful Use of Social Media Area Company Activity Undertaken Activity holding consumer interest through engagement ads on social networks .0 with the intention of brining employees. 366 ideas implemented leading to launch of ‘Latitute’ Laptop 60000 blog users.000 a week Increasing Brand Adobe Awareness  Product promotion MTV Capitalizing on social media Over 40000 fans on facebook India to keep the show buzz alive . and integrated into.000 times during the 1 month campaign. Dell's  product development 12511 ideas contributed to community. Product Dell Development Employee IBM Engagement Multiple in-house versions of web 2. 17000 different blogs.set up of an online game Impact  The game was played more than 14.

Social Media Maturity Spectrum Type of social media Initative Customer Reach Customer Engagement Customer Empowerment Customer Involvement Low Medium High Impact Establishing Presence Building Connections Building Relationship Value Generated Consideration Sales Loyalty Maturity Index Identify the Target Consumer : Examine the ‘sociotechnographic’ profile of target customer. Set Objectives: Decide what the company wants to accomplish with social media and how the results would be measured. Make a Plan: Plan for how relationships with customers will change and build a strategy around changing relationship with customers. Adopt Technology: Pick the appropriate platforms. tools and .

the mantra is – Listen. Even before embarking on a social media journey.  They should identify and segment the consumers as shown in social . it is important for companies to explore the medium and listen to the company or brand specific ‘conversations’ on the web – understand what consumers are thinking and saying about their brand. Understand and Engage.The Social Media Influencer Model Its essential for a company to adopt a systematic approach towards social media.

Evolution of shopping centers in the US Phase 1 (1920-1950) Development Of shopping center Garden City Shopping Center Retail Development Development of Operational process Regional Center Phase 2 (1950-2000) Era of modern shopping mall Customer Dissonance Theme / Festival Centers Cost Focus on Entertainment Differentiation Factory Outlets Bigger Malls Competition from discounters & super centers Lifestyle Centers Community Participation .

. The retail center of the future-whether it is enclosed or open-air. themed or general – would also be designed to resemble a community. costs Largely due to high rentals Poor Mall Management Commoditization of Mall space Shortfall in supply of mall Correction in rentals Unsatisfactory performance of mall space Growing trend towards revenue sharing Retailer’s vacancy Retailer’s lowering profitablity Careful planning.Changing dynamics of retail Real-Estate business Liquidity Crunch Organised retail’s Lower than Anticipated growth Uneven distribution Of mall space Showdown in consumer spending High Opr. big or small. Position & management of mall space – yet to happen ! The Outlook for Indian retail looks quite promising in the near future and the current turmoil should be over in 2 to 3 quarters. not just a place to shop and entertainment would emerged as vital component in the development of new malls.

Therefore.Education Industry The enrollment in higher education is currently at 17 Mn at a Gross Enrollment Ratio (GER) of 13%.6%. As per these estimates. the total investment that India required for higher education alone would be US$100 Bn. reaching 22 Mn by the year 2013 and 29 Mn by the year 2018. 12 Mn additional seats in the higher education would need to be created by the year 2018 as shown in the Exhibit 2. Enrollment are projected to grow at a CAGR of 5. . Total Current and Projected Growth in Higher Education Enrollment (Mn) GER 21% GER 17% GER 13% 17 22 22 29 Enrollment in Higher Education The cost per seat in a regular higher education institution is UD%$ 8300.

22 72 Clearly. The cost per additional seat. 222 222 97 Total Current and Projected Growth in K-12 Enrollment (Mn) 97 10 0 80 Age Group 22 .22 74 22 . at a conservative estimate is US$ 2400 (cost of land included at US$ 1 Mn per acre). 222 .22 222 14 15 17 in K-12 segment in the next 10 7 8 1 years to cater to the education 2 needs of its continuously 1111 2222 2222 growing population.Total Current and Projected Growth in K-12 Enrollment Currently. the total number of students enrolled in K-12 schools in the country is 317 Mn and expected to grow to 328 Mn by 2013 and further to 351 Mn by year 2018. India will need to add at least 34 Mn additional seats 2 . This translates into a minimum investment requirement of US$ 80 Bn of investment over the nest 10 years to establish these 34 Mn seats. as shown in the Exhibit 1.

of Students Capex. Clearly there is a pronounced skill gap in terms of both quality and quality in the country.8% from the service sector. positioning of training service and investment by private players .500 industrial training institutes and 1.000 similar institutes in China. the split of people intake sector-wise over the next 5 years will be 44. This infrastructure cater to only 2.333 240 Counseling English Speaking 1180 100.000 84 Cost per Seat Estimation in Few Vocational Streams of Education The vocational education and training landscape of India is extremely underdeveloped.800 145 560 133. 31.6% from manufacturing. India currently has 5. As estimated 85-90 Mn people with vocational skills would be requited in various sectors between 2008-2013.5 Mn people annually.2% from agriculture and 12.Vocational Streams of Education Parameters Health & Beauty No.745 polytechnics as compared to 500.1 Centre (US$) Cost Per Seat (US$) 1380 195. scale. There are 175 trade training programs in India as compared to 1.500 in the USA.  Cost per seat will very vary significantly in this segment depending on the location. According to industry sources.

.Ayurveda Marvel The world today has come to understand Ayurveda as a wonderful system of herbal healing. prompting studies and scientific research to assess its worth. During the last 3 decades. there has been a worldwide ‘back to nature’ trend. There is a great interest in Ayurveda in many countries.

as well as Ayurvedic Spas due canto be to attract tourism the growing worldwide interest in these treatments. India is one of the largest markets in the world for personal-care The growth of the Ayurvedic products service industries. The growth rate of herbal beauty care business is at around 40%. . .Global and Domestic Market for There is an increasing demand for alternative medicines and herbal Ayurveda products. like Ayurvedic center for Panchkarma. Dhara and Kairali massage. Ayurvedic skin and hair care. developed Both Ayurvedic products and services can enter the international market through the franchise system.

 Today Ayurvedic beauty treatments have become an important component of cosmeseuticals.Coming of Spas  With concept of “total well being” gaining ground spa treatment are becoming popular. . Nowadays salons are being converted in today spas and offering both saloon and spa treatments. Extension of our franchise ventures branding are very much a part of our future plans. off the pacific coast.  Ayurvedic treatment are ideal for Spa treatments. on the US island of Saipan.  Shahnaz Husain group has tied up with the Hyakumata group of Japan and setup the world’s largest Ayurvedic health resort. based on the franchisee system.

8 per cent between 2010 and 2019.6 per cent.  India’s travel and tourism sector is expected to be the second largest employer in the world.  Preparing for the 2010 Commonwealth Games in Delhi. released by the World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in March 2009:  The demand for travel and tourism in India is expected to grow by 8.  India is projected to become the fifth fastest growing business travel destination from 2010-2019 with an estimated real growth rate of 7. employing 40. the Tourism Ministry is exploring the provision of tented accommodation to tourists in Faridabad and Suraj kund in nearby Haryana. .  The report forecasts India to get capital investment worth US$ 94.037.2 per cent between 2010 and 2019 and will place India at the third position in the world.5 billion in the travel and tourism sector in 2019.The Road Ahead According to the latest Tourism Satellite Accounting (TSA) research.000 by 2019.  Capital investment in India's travel and tourism sector is expected to grow at 8.


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