INTERNATIONAL LECTURE SERIES

UNDERSTANDING INDIA Prof. Poonam Kumar Chairperson May 16, 2013

UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

AN IDEA CALLED INDIA!  India is a federal republic with a parliamentary system of government.  28 states [provinces] and 7 union territories.  18 Official Languages and 1,652 Dialects.  Vibrant democracy driven by a spirit of enterprise.  Relatively centralized where the federal government controls the most essential government functions including defence, foreign policy, taxation, public expenditures and economic (industrial) planning.  State governments formally control agriculture, education, law and order within states, however, extensively dependent on central government for funds. 2

UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

IDENTITY OF AN ANCIENT NATION  India’s history dates back to the Indus valley cultures of Mohenjodaro and Harappa that flourished over 3,500 years ago.  Mughals brought with them Persianized Islamic traditions to India.  Later the British brought English seen by many Indian intellectuals as a vehicle for liberation.  India today is diversely populated with religions like Hinduism, Islam, Christianity, Jainism, Buddhism, Sikhism, Zoroastrianism living in relative peace.

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

STATE OF THE INDIAN ECONOMY  Indian Economy grew at 5.0 per cent in 2012-13  Expected to grow at 6.1-6.7 per cent in next fiscal year  Overall industrial performance, as reflected by the index of industrial production (IIP) showcased growth of 2.1 per cent in Q3 of 2012-13  WPI inflation to decline to 6.2-6.6 per cent in March 2013  Cumulative exports recorded during 2012-13 (AprilDecember) stood at US$ 217.09 billion, registering a growth of 9.4 per cent  Imports in 2012-13 (April-December) at US$ 366.20 billion registered a growth of 29.4 per cent  FOREX reserves stood at US$ 295.6 billion at end of December 2012  Services sector grew by 6.6 per cent, its share in GDP goes up to 56.5 per cent  Manufacturing sector registered a growth rate of 1.9 per cent in 2012-13 Source: IBEF

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

INDIA : QUOTE UNQUOTE “India has evolved into one of the world's leading technology centers“.

India is among the three most attractive FDI destinations in the world.

A T Kearney FDI Confidence Index 2005

By 2032, India will be among the three largest economies in the world.

- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005

US Department of Commerce

“The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”.

BRIC Report, Goldman Sachs

“We came to India for the costs, stayed for the quality and are now investing for innovation”.

Craig Barrett Intel Corporation

India has among the highest returns on foreign investment.

“India is a developed country as far as intellectual capital is concerned”.

Jack Welch General Electric

Travyn Rhall, ACNielsen

Source: IBEF

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

INDIA’S KEY ADVANTAGES Liberalization has favoured FDI and industrial reforms have made the scenario more attractive and with the growing economy it look promising in terms of return

India is one of the leading service sector contributed 62.5% to the GDP and employ 34% of the work force.

Foreign Direct Investment

ServiceService providers and sector

Banking and Finance

Global Trade Relations

India has a robust banking economy which was proved by the fact that it remained largely unaffected by the global recession.

India’s contribution to global trade has increased to 5%.. Both imports and exports have taken a leap by 20% on an average. US, China, UK, Japan are the major trading partners. 5

UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

WHAT MAKES INDIA SURGE INDIA'S POPULATION IS 1.3 BILLION, of which 49% ARE BELOW THE AGE OF 25. This is a HUGE DEMOGRAPHIC ADVANTAGE OVER CHINA and the West, which are facing ageing populations. It could make India far more dynamic over the next couple of decades, with 178 million individuals joining the workforce, giving rise to additional domestic demand.

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

GOT THE BILLIONAIRES WHO MATTER India has the most billionaires in Asia according to the Forbes magazine annual list of richest people. With over 40 billionaires, India has overtaken Japan after two decades of Japan topping the Asian rich list.

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

INDIANS ON THE BILLIONAIRES CLUB!

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

…AND SOME OF THE MANY MORE

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

WHAT ABOUT INDIA’S SLUMS? • Slums…22% of Indian urban population lives in slums as against 32% for the whole world population; • In Mumbai, 55% of the total population of 11 million are slum dwellers occupying about 12.85% of the city’s total land area. • The poorest cities are Calcutta (89% below the poverty line), Bangalore (73%) and Indore (68%). BUT SLUM POCKETS LIKE DHARAVI ARE BRIMMING WITH ECONOMIC ACTIVITY WITH A TOTAL TURNOVER ESTIMATED TO BE BETWEEN 500 MN USD TO 650 MN USD PER YEAR

Source: National Institute of Urban Affairs (NIUA)

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

…AND THE BOOMING MIDDLE CLASS • As the Fastest Growing Free Market Democracy, India adds 40 mn people to its middle class every year. • It is estimated that 300 million Indians now belong to the middle class. • One-third of them have emerged from poverty in the last ten years. • They are a skilled, English speaking workforce • This middle class is driving a booming market with the young population taking the lead.

IT IS PREDICTED THAT BY 2025 MAJORITY OF INDIANS WILL BE MIDDLE CLASS. 12

UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

BUT THERE ARE CHALLENGES Population  Engaging the youth – creating employment (49% of India’s population below the age of 25 years)  Achieving inclusive growth  Meeting the health needs

 Literacy Building Infrastructure Governance Issues

Terrorism and separatist movements Religious conflicts despite traditional tolerance

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

MEETING THOSE CHALLENGES Centre for Business & Strategic Affairs is created with the mission to:  promote independent, non-partisan, customised thought  Undertake research, policy development and advocacy programmes  Address concerns in strategic affairs for promotion of international business, investment and trade linkages  Work alongside global enterprises interested in emerging and developing economies

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

BROADBASING THE DEBATE India’s economy continues to be attractive, but several issues recently weighed down India’s international appeal:  Corruption & need for clean government  Violence against women  Regionalism & separatism  Religious conflict  Infrastructure shortcomings Centre for Business & Strategic Affairs will broad base this debate and deliver an understanding on issues of global concern. 15

UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

KEY QUESTIONS ON INDIA? India grows at a sustained pace but faces a range of social, political, economic & cultural challenges:  Integrating socio-cultural fabric with economic development  Overcome policy paralysis impacting governance

 Maintain substantially autonomous foreign policy in the new world order  Define global strategic influence

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UNDERSTANDING INDIA: INTERNATIONAL LECTURE SERIES

NAMASTE!!! Poonam Kumar Chairperson 13, Consort Lodge, 34, Prince Albert Road London NW8 7LX 68-B, Mittal Tower, Nariman Point, Mumbai, 400021 Tel: +44 2074830687; Mobile +44 7793 097791 [email protected] [email protected]

www.cbsaworld.org 17