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INDIA	  Emerging	  Into	  the	  Light	  
Contents  1.	  India	  :	  An	  Overview	                                                                                 ...
India	  An	  Overview	                       Back	  to	  Contents	  
India:	  An	  Overview	  •  Geographically,	  the	  seventh	  largest	  country	  in	  the	  world	  (3.3	  million	     s...
India:	  Drama1c	  Diversity,	  Amazing	  Unity	  •  LogisBcally	  ideal	  for	  trade,	  with	  a	  coastline	  extending...
India	  From	  the	  Pages	  of	  History	                                              Back	  to	  Contents	  
India:	  A	  Chronological	  History	                India	  is	  the	  cradle	  of	  the	  human	  race,	  the	  birthpla...
India:	  History	  (contd.)	  	  •    600–400	  B.C:	  The	  seeds	  of	  Jainism	  and	  Buddhism	  are	  sown	  with	  t...
India:	  History	  (contd.)	  •    1000–1800	  A.D:	  The	  earliest	  of	  Muslim	  invasions	  begin	  with	  Mahmud	  G...
India:	  The	  Glorious	  Past	               We	  owe	  a	  lot	  to	  the	  Indians,	  who	  taught	  us	  how	  to	  co...
India:	  Colonial	  Rule	  •    The	  East	  India	  Company,	  iniBally	  called	  the	  East	  India	  Trading	  Company...
Post	  Independence:	  License	  Raj	  •    One	  of	  the	  important	  observaBon	  post	  India’s	  independence	  in	 ...
Post	  Independence:	  License	  Raj	  (contd.)	         	  An	  excerpt	  from	  a	  1998	  report	  by	  BBC,	  India:	 ...
Post	  Independence:	  License	  Raj	  (contd.)	  •    The	  License	  regime	  had	  far-­‐reaching	  and	  devastaBng	  ...
The	  Hindu/Socialist	  Growth	  Rate	  •             The	  term	  ‘Hindu	  Growth	  Rate’	  (also	  referred	  to	  as	  ...
The	  Hindu/Socialist	  Growth	  Rate	  (contd.)	  •    Well-­‐known	  Indian	  journalist	  Arun	  Shourie	  pointed	  ou...
Liberaliza1on:	  A	  New	  Era	             India	  Ascending	                                      Back	  to	  Contents	  
Liberaliza1on:	  Background	  •    Before	  1990,	  the	  government	  viewed	  the	  BriBsh	  colonial	  era	  as	  explo...
Liberaliza1on:	  Background	  (contd.)	  By	  1991,	  the	  economy	  was	  at	  a	  breaking	  point,	  nearing	  bankrup...
The	  New	  Policy	   in	  India	  under	  the	  leadership	  of	  the	  Prime	  Minister	  P.V.	  •  In	  1991,	  breakth...
The	  New	  Policy	  (contd.)	  •     The	  Vajpayee	  government	  conBnued	  with	  privaBzaBon	  procedures,	  reducBon...
Indian	  Economic	  History:	  Ups	  &	  Downs	  Then...	   •     Before	  and	  during	  the	  period	  leading	  up	  to...
The	  Catalyst	  for	  Change:	  People	  •    Indias	  burgeoning	  populaBon	  was	  cited	  as	  the	  primary	  reason...
The	  Catalyst	  for	  Change:	  People	  (contd.)	                                                                       ...
Looking	  Ahead	  •    India	  harbors	  the	  worlds	  second	  largest	  English-­‐speaking	  populaBon,	  both	  in	   ...
Looking	  Ahead	  (contd.)	         What	  makes	  India	  an	  abrac1ve	  economy	  to	  invest	  and	  par1cipate	  in?	...
The	  Global	  Power	  Sector	          Energizing	  the	  World	                                           Back	  to	  Co...
Top	  Six	  Power	  Producers	  &	  Consumers	                                                  Back	  to	  Contents	  
Power	  Genera1on	  &	  Consump1on	  Facts	  •    USA	  accounts	  for	  25%	  of	  total	  energy	  consumpBon	  in	  the...
New	  Areas	  of	  Focus	  •        India,	  China	  and	  the	  United	  Kingdom	  are	  anracBng	  huge	  interest	  wit...
Cumula1ve	  Investment	  in	  the	  Power	  Sector	  	  by	  Region	  •       China	  leads	  with	  respect	  to	  invest...
Future	  Outlook	    •       According	  to	  staBsBcs	  released	  by	  the	  U.S.	  Energy	  InformaBon	  AdministraBon	...
Future	  Outlook	  (contd.)	  •    Coal-­‐fired	  power	  generaBon	  was	  responsible	  for	       41%	  of	  the	  globa...
Future	  Outlook	  (contd.)	  •    Non-­‐OECD	  Asia,	  led	  by	  China	  and	  India,	  has	       the	  potenBal	  to	 ...
Country	  Analysis:	  India	  •       Currently,	  of	  the	  total	  electricity	  consumed	  in	  India,	  75%	  is	  ge...
Country	  Analysis:	  India	  (contd.)	  •    India’s	  current	  electricity	  consumpBon	  of	  600	  TWH	  is	  set	  t...
Country	  Analysis:	  USA	  •    Ranks	  highest	  on	  the	  worlds	  energy	       consumer	  list	  with	  a	  total	  ...
Country	  Analysis:	  China	  	  China’s	  electricity	  generaBng	  capacity	                            YEARLY	  INCREAS...
Country	  Analysis:	  China	  (contd.)	  •  Total	  electricity	  generaBon	  was	  3.71	  trillion	  kWh	  in	  2009,	  w...
Country	  Analysis:	  Japan	  •  Imports	  significant	  quanBBes	  of	  crude	  oil,	  natural	  gas	  and	  rare	  fuels	...
Country	  Analysis:	  Russia	  •    One	  of	  the	  worlds	  two	  energy	  super	  powers	       (the	  other	  being	  ...
Country	  Analysis:	  Brazil	  •    Total	  consumpBon	  of	  410	  TWH	  in	  2007.	  •    Heavily	  reliant	  on	  hydro...
Indian	  Infrastructure	  Sector	         InviBng	  Private	  Investment	                                                B...
Infrastructure:	  An	  Overview	  •    Building	  world-­‐class	  infrastructure	  in	  developing	  countries	  like	  In...
Government	  Ini1a1ves	  in	  Infrastructure	  I	   A	  radical	  change	  in	  strategy	  by	  the	  Government	  of	  In...
Government	  Ini1a1ves	  in	  Infrastructure	  II	  •    Tax	  breaks,	  annuity	  payments	  and	  capital	  grants	  for...
Private	  Sector	  Investment	  Ini1a1ves	  Radical	  reforms	  in	  government	  policies	  on	  infrastructure	  have	  ...
FDI	  in	  India	  I	  •    India	  ranks	  third	  today	  in	  anracBng	  total	  FDI	  and	  is	  expected	  to	  conBn...
FDI	  in	  India	  II	  •    French	  power	  equipment	  manufacturer	  Alstom	  has	  partnered	  with	  Bharat	  Forge	...
Sector-­‐Specific	  Outlook	         The	  Growth	  Factor	                                       Back	  to	  Contents	  
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
Imagineering India   India Power Sector 2010
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Imagineering India India Power Sector 2010

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India - 1.3+ Billion citizens on the move to realise their potential - How would you act?

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  • Hello Satya,

    Great to know about your company and work, want to get introduced if you can spare some time I am based in Melb

    regards clement lobo 0424782890
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  • Hello Sir, I would request you to send ppt to my email id mr.shubhendra@gmail.com I am also working on Power Sector this would of useful for me ,,,,,,,I hop you will send this.
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  • This is really nice PPT .... But disabling from download not a good work. kindly mail this srikrishna17@gmail.com
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  • Hello,I wud appreciate your efforts done,its just an excellent presentation,I am researching on power sector in India,this ppt would be really useful to me,if you can mail me this,i would be greatfully thankful to you.
    My email Id is msddeepali@gmail.com

    Thank you..
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  • Hello ,

    Since we are planning to intorduce our new solutions for Power sector in india , request e-mail this presentnation to us .

    thanks
    arvind_ts83019@yahoo.com
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Transcript of "Imagineering India India Power Sector 2010"

  1. 1. INDIA  Emerging  Into  the  Light  
  2. 2. Contents 1.  India  :  An  Overview   3   2.  India  :  From  the  Pages  of  History   6   3.  LiberalizaBon  :  A  New  Era  :  India  Ascending   17   4.  Global  Power  Sector  :  Energizing  the  World   27   5.  Indian  Infrastructure  Sector  :  InviBng  Private  Investment   43   6.  Sector  Specific  Outlook  :  The  Growth  Factor   50   7.  The  Power  Sector  in  India  :  Let  there  be  Light   57   8.  Indian  Power  Sector  :  An  Overview   60   9.  Opening  up  of  the  Power    Sector  :  The  New  Era  Begins   66   10.  Emerging  OpportuniBes  :  Rewards  of    Bringing  in  Ingenuousness   73   11.  Outlook  for  Power  Sectors  :  Indicators  &  Forecast   85   12.  Government  IniBaBves  for  Private  Sector  Involvement  :  Opening  up  Private  Capital  Inflow   97   13.  The  Indian  Power  Sector  :  OpportuniBes,  Risks  &  Rewards   102   14.  Summing  Up  :  Power  Sector  Investment  :  Why  India?   115  
  3. 3. India  An  Overview   Back  to  Contents  
  4. 4. India:  An  Overview  •  Geographically,  the  seventh  largest  country  in  the  world  (3.3  million   square  kilometers).  •  Second  most  populous  country  a_er  China  with  a  populaBon  of     1.18  billion,  expected  to  be  the  most  populous  country  by  2020.  •  ~  65%  of  the  demography  is  less  than  25  years  of  age.  •  The  world’s  largest  democracy.  •  GDP  growth  of  7.2%  in  2009-­‐2010.  •  11th  largest  economy  in  terms  of  nominal  GDP  ($  1.2  trillion  in  2009).  •  4th  largest  economy  in  terms  of  Purchasing  Power  Parity  GDP  ($3.5  trillion   in  2009).  •  Total  exports  of  $155  billion  in  2009  (free-­‐on-­‐board  basis).  •  Total  imports  of  $232  billion  in  2009  (free-­‐on-­‐board  basis),  remains  a  net   importer.  •  Foreign  reserves  of  $287  billion  (as  of  31  December,  2009).   Back  to  Contents   4  
  5. 5. India:  Drama1c  Diversity,  Amazing  Unity  •  LogisBcally  ideal  for  trade,  with  a  coastline  extending  on  three  sides  of  the   peninsula,  facilitaBng  passage  of  freight  –  Indian  Ocean  to  the  South,   Arabian  Sea  to  the  West,  and  the  Bay  of  Bengal  to  the  East.  •  Comprised  of  28  states  and  7  Union  Territories.  •  Boasts  vast  variety  and  diversity  of  people  and  culture,  coexist  in  relaBve   harmony  and  unity.  •  A  pluralisBc,  mulB-­‐ethnic,  mulB-­‐lingual  and  mulB-­‐cultural  society  –  the   Indian  ConsBtuBon  recognizes  22  main  and  21  scheduled  languages.  •  Diversity  in  religion  –  Hinduism,  Islam,  ChrisBanity,  Buddhism,  Jainism,   Zoroastrianism,  Judaism  and  B’ahai  pracBced  across  the  country,  with  a   strong  sense  of  religious  tolerance  being  the  accepted  as  way  of  life  for  a   majority  of  Indians,  both  by  law  and  tradiBon.  •  An  amazing  ‘melBng  pot’  of  mulBple  philosophies,  languages,  fesBvals,   cuisine,  clothing,  literature,  music,  dance,  fine  arts  and  cra_s.   Back  to  Contents   5  
  6. 6. India  From  the  Pages  of  History   Back  to  Contents  
  7. 7. India:  A  Chronological  History   India  is  the  cradle  of  the  human  race,  the  birthplace  of  human   speech,  the  mother  of  history,  the  grandmother  of  legend,  and   the  great  grand  mother  of  tradiBon…   –  Mark  Twain  •  2500–1500  B.C:  The  Indus  Valley    CivilizaBon  flourishes  in  the  western  part  of  the  Indian  sub-­‐ conBnent,  arrayed  around  the  Indus  (Sindhu)  River.  Archaeological  finds  of  the  main  ciBes  –   Harappa  and  Mohenjodaro  –  reveal  traces  of  a  sophisBcated  culture,  with  trading  Bes  to   Mesopotamia  and  other  civilizaBons  flourishing  around  the  same  Bme  in  other  parts  of  the   known  world.  •  A  well-­‐planned  civic  and  sanitary  system,  trading  posts,  a  measuring  system,  weapons  and   tools,  etc.  are  believed  to  have  been  used  by  the  people.  •  From  1500  B.C:  Aryan  tribes  from  the  north-­‐western  regions  of  Asia  begin  to  enter  India  and   senle  down  in  various  parts  of  the  country  covering  the  north,  east  and  west,  up  to  the   Vindhya  mountains  in  central  India.  In  the  south,  a  vibrant  Dravidian  culture  flourishes.  •  The  Vedas  and  epics  such  as  the  Mahabharata  are  composed,  the  geography  is  divided  into   poliBcally-­‐organized  territories  called  ‘Mahajanapadas’  and  the  caste  system  is  created.   Back  to  Contents   7  
  8. 8. India:  History  (contd.)    •  600–400  B.C:  The  seeds  of  Jainism  and  Buddhism  are  sown  with  the  birth  of  Mahaveera     (599  B.C)  and  Gautama  Buddha  (563  B.C).  •  400  B.C–0  A.D:  Invasions  from  the  north  and  west  conBnue,  including  assaults  by  Alexander   the  Great,  whose  ambiBon  of  world  conquest  is  stopped  at  the  northwest  fronBer  (326  B.C).  •  Chandragupta  Maurya  establishes  the  Mauryan  Empire  and  for  the  first  Bme  a  large  part  of   the  country  is  unified  under  the  rule  of  one  dynasty.  The  Mauryan  empire  lasts  Bll  2  B.C,  with   great  rulers  such  as  Ashoka  and  Chandragupta  II.  Ashoka  is  responsible  for  the  spread  of   Buddhism  across  the  country.  •  0–1000  A.D:  Many  prominent  dynasBes  –  the  Pallavas,  Hoysalas  and  the  Chalukyas  –  rule   over  central  and  southern  regions,  while  the  Gupta  dynasty  comes  into  being  around     326  A.D.  •  This  was  the  Golden  Age  in  Indian  history,  when  culture  and  arts  flourished,  with  significant   work  in  literature,  science,  mathemaBcs  and  astronomy.  •  Many  famous  temples,  which  are  great  anracBons  even  today,  were  built  during  this  Bme  –   Khajuraho,  Belur,  Halebeid,  etc.  •  This  is  also  the  period  during  which  noted  scholars  from  other  parts  of  the  world  –  Fa-­‐Hein,   Hiuen-­‐Tsang,  Alberuni  –  visited  India  to  learn  about  culture  and  religion.   Back  to  Contents   8  
  9. 9. India:  History  (contd.)  •  1000–1800  A.D:  The  earliest  of  Muslim  invasions  begin  with  Mahmud  Ghazni  in  1026;   explorers  such  as  Marco  Polo  (1288  A.D)  and  Vasco  da  Gama  (first  voyage  in  1498)  make   their  way  to  India  –  the  objecBve  is  to  check  out  the  fabulous  wealth,  culture,  arts  and  trade   for  which  the  country  is  famous  throughout  the  world.  •  Columbus  set  out  on  a  voyage  from  Spain  to  visit  India,  but  ends  up  discovering  a  new   conBnent  –  America  –  instead!  •  Babur  establishes  the  Mughal  Empire  in  the  1500s  and  the  Mughals  rule  India  unBl  1857,   albeit  in  a  diminished  form.  Babur,  Humayun,  Akbar  and  Aurangazeb  are  among  the  more   well-­‐known  Mughal  emperors.  •  Between  1500  and  1800,  many  European  traders  –  Portuguese,  Spanish,  French,  the  Dutch   and  the  English  –  set  up  trading  posts  in  various  parts  of  the  country,  to  export  spices,   texBles,  precious  stones  and  other  goods,  for  which  India  is  widely  known.  •  The  trading  companies  gradually  take  poliBcal  control,  due  to  the  weak  and  fragmented  reign   of  Indian  rulers  around  this  Bme.  The  Portuguese  take  over  Goa,  the  French  and  Dutch  over   the  Malabar  and  Coromandel  coasts  and  finally,  the  BriBsh  East  India  Company,  annexes   most  of  the  country  in  1757.  •  Official  BriBsh  rule,  i.e.  the  takeover  by  the  BriBsh  monarchy,  begins  at  the  end  of  the  failed   First  War  of  Independence  in  1857.  The  BriBsh  rule  India  Bll  1947.   Back  to  Contents   9  
  10. 10. India:  The  Glorious  Past   We  owe  a  lot  to  the  Indians,  who  taught  us  how  to  count,   without  which  no  worthwhile  scienBfic  discovery  could     have  been  made   –    Albert  Einstein  •  The  richest  country  in  the  world  Bll  the  17th  century.  •  The  number  system,  the  zero,  the  decimal  system,  algebra,  trigonometry,  calculus  and  chess   were  all  invented  in  India.  •  India  was  the  only  source  of  diamonds  unBl  1896.  •  The  earliest  system  of  medicine  –  Ayurveda  –  was  established  by  Charaka  2500  years  ago.  •  In  the  5th  century,  Bhaskaracharya  calculated  the  Bme  earth  took  to  orbit  the  sun.  •  Spices,  texBles,  gems,  indigo,  muslin,  conon,  etc  are  just  some  of  the  goods  which  originated   in  India  and  were  famed  throughout  the  world.  •  The  concepts  of  irrigaBon  and  reservoir  systems,  urban  planning,  sewage  systems,  weights   and  measures,  coinage,  etc  were  first  introduced  in  ancient  India.   Back  to  Contents   10  
  11. 11. India:  Colonial  Rule  •  The  East  India  Company,  iniBally  called  the  East  India  Trading  Company,  and  later  the  BriBsh   East  India  Company,  was  the  oldest  among  the  other  European  East  India  Companies.  •  Focused  earlier  on  the  trade  of  commodiBes  such  as  conon,  silk,  indigo  and  opium,  it  later   went  on  to  gain  administraBve  control  of  large  porBons  of  the  Indian  subconBnent.  •  The  Company  Rule  in  India  commenced  in  1757,  lasted  Bll  the  Indian  Rebellion  of  1857,   following  which,  administraBon  of  the  Indian  Colony  was  taken  over  directly  by  the  BriBsh   Monarchy.  •  Thus  ended  the  rule  of  the  East  India  Company  and  thereby  began  the  dramaBc  era  of  the   BriBsh  Raj.  India  was  the  ‘jewel  in  the  Crown’  for  the  vast  BriBsh  Empire.  •  In  the  Indian  subconBnent,  the  purview  of  the  BriBsh  Raj  extended  across  present  day   Pakistan,  India  and  Bangladesh.    •  Many  people  believe  that  the  Raj  had  adverse  effects  on  the  economy  of  India  as  a  whole.   BriBsh  poliBcian  Edmund  Burke  pointed  out  in  the  late  18th  century  that  the  East  India   Company  had  ruined  the  Indian  economy  with  their  trading  and  administraBve  pracBces.  •  Noted  Indian  historian  Rajat  Kanta  Ray  accused  the  BriBsh  Raj  of  eaBng  into  Indias  food  and   financial  stocks  and  implemenBng  such  high  duty  structure  that  it  ulBmately  led  to  the   horrific  Bengal  famine  of  1770,  which  was  responsible  for  the  deaths  of  one-­‐third  of  the   populace  of  Bengal.   Back  to  Contents   11  
  12. 12. Post  Independence:  License  Raj  •  One  of  the  important  observaBon  post  India’s  independence  in  1947  concern  the  countrys   economy,  which  conBnued  to  remain  in  a  state  of  stagnaBon  Bll  1990,  this  period  was   dubbed  the  ‘License  Raj’  or  ‘Permit  Raj’,  a  cynical  wordplay  on  the  previous  200  years  of   BriBsh  ‘Colonial  Raj’.  •  The  terms  referred  to  extensive  licensing,  regulaBons  and  bureaucraBc  red  tape  which   governed  and  strangled  the  Indian  economy  from     1947–1990.  •  Any  economic  acBvity  –  starBng  a  business,  expanding  or  any  significant  changes  –  required   obtaining  regulatory  approvals  from  nearly  80  government  agencies.  Even  then,  the   government  would  regulate  all  operaBonal  working,  for  the  enBty  to  remain  in  business.  •  The  economy  was  administered  centrally  and  modeled  as  a  ‘socialist’  or  ‘mixed’  economy  –   a  mix  of  western  capitalism  and  Soviet  communism.   Back  to  Contents   12  
  13. 13. Post  Independence:  License  Raj  (contd.)    An  excerpt  from  a  1998  report  by  BBC,  India:  The  Economy   “Before  the  process  of  reform  began  in  1991,  the  government  anempted  to   close  the  Indian  economy  to  the  outside  world.  The  Indian  currency,  the   Rupee,  was  inconverBble  and  high  tariffs  and  import  licensing  prevented   foreign  goods  reaching  the  market.  The  central  pillar  of  the  policy  was  import   subsBtuBon,  the  belief  that  India  needed  to  rely  on  internal  markets  for   development,  not  internaBonal  trade  -­‐  a  belief  generated  by  a  mixture  of   socialism  and  the  experience  of  colonial  exploitaBon.  Planning  and  the  state,   rather  than  markets,  would  determine  how  much  investment  was  needed  in   which  sectors.  The  energies  of  investors  were  directed  towards  winning   licenses,  rather  than  capturing  markets  or  producing  superior  goods,  and   profits  tended  to  be  guaranteed  irrespecBve  of  quality  or  efficiency.  External   regulaBon,  major  controls  on  foreign  direct  investment  and  a  high  tariff  wall   then  protected  companies  from  foreign  compeBBon.  RestricBons  on   consumer  goods  were  the  Bghtest,  thanks  to  the  belief  that  precious  foreign   exchange  should  not  be  wasted  on  consumer  goods.”     Back  to  Contents   13  
  14. 14. Post  Independence:  License  Raj  (contd.)  •  The  License  regime  had  far-­‐reaching  and  devastaBng  effects.  •  The  newly  independent  Republic  of  India  began  with  high  growth  rates,  an  open   environment  conducive  to  trade,  foreign  and  domesBc  investment  and  overall  stability.  •  However,  by  1980,  the  Indian  economy  was  in  a  stagnant    and  suspended  state  with   extremely  low  growth  rates,  a  hosBle  atmosphere  totally  closed  to  outside  investment  and   inter-­‐country  trade,  a  restricBve  regime  obsessed  with  licenses  and  central  economy  control,   a  total  failure  to  deal  with  spiraling  social  expenditure  and  an  apatheBc  bureaucraBc  system   with  a  stranglehold  on  governance  in  all  spheres.   Back  to  Contents   14  
  15. 15. The  Hindu/Socialist  Growth  Rate  •  The  term  ‘Hindu  Growth  Rate’  (also  referred  to  as  ‘Socialist  growth  rate’),  coined  by   economist  K.N.  Raj,  suggested  that  India,  with  its  majority  Hindu  populaBon,  had  a   significantly  low  growth  rate  in  comparison  with  its  Asian  counterparts  (specifically,   Singapore,  Hong  Kong,  South  Korea  and  Taiwan),  whose  economies  also  started  out  at  the   same  level  as  Indias  in  the  early  1950s.  •  The  Indian  economy  had  literally  stalled  at  3.5%  in  the  period  between  1950–1980.  In  this   Bme,  the  per  capita  income  of  India  hovered  at  1.3%.   Per  capita  GDP  of  South  Asian  economies  &  South  Korea  (1950-­‐1995)   45   42.4   40   35   30   24.8   25   20   15   11.4   11.8   11.8   12   7.1   9   7.6   8.3   7.5   7.8   10.2   7   6.5   8.4   9.4   6.5   5.7   7.6   9.4   8.3   10   5.1   5.2   5   0   1950   1960   1970   1980   1995   Bangladesh   India   Pakistan   Sri  Lanka   South  Korea  Source:  Eldis  &  Wikipedia   Back  to  Contents   15  
  16. 16. The  Hindu/Socialist  Growth  Rate  (contd.)  •  Well-­‐known  Indian  journalist  Arun  Shourie  pointed  out  that  the  Socialist  Rate  of  Growth  was   a  direct  consequence  of  the  various  socialist  policies  which  prevailing  rigid  governments  had   implemented.  He  firmly  stressed  that  it  had  nothing  to  do  with  Hinduism,  whatsoever.  •  In  comparison  with  other  countries,  an  Indians  average  yearly  income  stood  at  $439  in  1947,   while  this  was  $619,  $770  and  $936  for  China,  South  Korea  and  Taiwan,  respecBvely.    •  By  1999,  these  numbers  had  touched  $1,818,  $3,259,  $13,317  and  $15,720  for  the  four   countries,  respecBvely.  •  The  difference  between  India  and  South  Korea  stood  out  the  most.  In  1947,  the  per  capita   income  of  South  Korea  was  twice  that  of  India.  •  By  1960,  it  grew  to  four  Bmes  the  size  of  Indias  per  capita  income.  •  By  1990,  the  South  Korean  per  capita  income  was  a  whopping  20  Bmes  that  of  India.   Countries  above  and   below  world  per     capita  income  of  USD   10,500   Above   Below   Back  to  Contents   16  
  17. 17. Liberaliza1on:  A  New  Era   India  Ascending   Back  to  Contents  
  18. 18. Liberaliza1on:  Background  •  Before  1990,  the  government  viewed  the  BriBsh  colonial  era  as  exploitaBve;   encouraged  by  the  reformaBve  views  of  BriBsh  Fabian  Socialists,  all  policies   designed  and  implemented  were  biased  towards  a  protecBonist  and  restricBve   environment.    •  The  policies  favored  import-­‐subsBtuBng  industrializaBon,  control  and  intervenBon   of  the  government  in  all  aspects  of  labor  issues  and  financial  sectors,  a   comprehensive  public  sector,  regulaBon  of  all  businesses  and  Central  Planning.  •  In  the  mid  1950s  many  industrial  sectors  including  steel,  water,  mining,  tools,   telecommunicaBon  and  insurance  were  effecBvely  transformed  into  state-­‐owned   enterprises.    •  Consequently,  only  few  licenses  for  steel,  power  and  telecommunicaBons  were   issued  to  private  players  and  these  select  few  managed  to  establish  giganBc   empires,  the  country  witnessed  the  emergence  of  a  very  extensive  public  sector,   many  of  these  government  enterprises  stockpiled  huge  losses  and  monopolized   the  economy.  •  This  resulted  in  severely  lagging  infrastructure,  with  insignificant  investments.   Back  to  Contents   18  
  19. 19. Liberaliza1on:  Background  (contd.)  By  1991,  the  economy  was  at  a  breaking  point,  nearing  bankruptcy  and  unable  to  pay  internaBonal  creditors.   According  to  the  Astaire  Report   “In  return  for  an  IMF  bailout,  gold  was  transferred  to  London  as   collateral,  the  Rupee  devalued  and  economic  reforms  were  forced   upon  India.  That  low  point  was  the  catalyst  required  to  transform  the   economy  through  badly  needed  reforms  to  unshackle  the  economy.   Controls  started  to  be  dismantled,  tariffs,  duBes  and  taxes   progressively  lowered,  state  monopolies  broken,  the  economy  was   opened  to  trade  and  investment,  private  sector  enterprise  and   compeBBon  were  encouraged  and  globalizaBon  was  slowly   embraced.  The  reforms  process  conBnues  today  and  is  accepted  by   all  poliBcal  parBes.”   Back  to  Contents   19  
  20. 20. The  New  Policy   in  India  under  the  leadership  of  the  Prime  Minister  P.V.  •  In  1991,  breakthrough  reforms  began   Narasimha  Rao  and  Finance  Minister  Manmohan  Singh.  •  First  and  foremost,  the  new  policy  dispensed  with  the  License  Raj.  •  The  government  concentrated  on  increasing  foreign  investment  ,  increased  parBcipaBon  and   investment  by  enthusiasBc  private  sector,  deregulaBng  Indian  business  ventures,  reducing  the   countrys  fiscal  deficit  and  ramping  up  the  financing  and  investment  in  the  countrys  sagging   infrastructure.  •  Some  notable  reforms:   –  Industrial  licensing  was  removed,  while  norms  regulaBng  industrial  growth  were  raBonalized.   –  The  SEBI  Act  was  introduced  in  1992  along  with  amended  Security  Laws.   –  The  NaBonal  Stock  Exchange  was  established  in  1994  as  a  trading  system  based  on   computers.  It  became  the  countrys  largest  exchange  by  1996;  with  T+2  senlement  &   clearance.     –  Tariffs  were  slashed  from  the  previous  85%  to  a  significantly  lower  25%.     –  The  government  increased  the  cap  on  foreign  investment  from  40%  to  51%  and  allowed   100%  foreign  equity  in  certain  priority  sectors  for  the  first  Bme.  The  procedures  for   obtaining  FDI  approvals  were  significantly  raBonalized  and  consolidated.   –  The  government  also  iniBated  the  privaBzaBon  process  of  several  large  and  inefficient  public   sector  companies.   Back  to  Contents   20  
  21. 21. The  New  Policy  (contd.)  •  The  Vajpayee  government  conBnued  with  privaBzaBon  procedures,  reducBon  of  taxes  and  duBes   and  a  stable  fiscal  policy  which  aimed  primarily  at  reducBon  of  debt  and  deficit.  •  Disclosure  of  informaBon  was  earlier  limited  and  restricted  by  the  Indian  government.  On  June  15,   2005,  the  government  passed  a  new  law  in  Parliament  –  the  Right  to  InformaBon  (RTI)  act.    •  The  enforcement  of  the  RTI  was  a  landslide  victory  for  the  Indian  people,  who  now  had   unprecedented  access  to  government  informaBon,  unlike  the  restricBve  past.  •  In  2008,  India  signed  a  bilateral  agreement  with  the  US  on  civil  nuclear  cooperaBon  between  the  two   countries.    •  This  was  one  of  the  biggest  internaBonal  agreements  made  by  India,  by  virtue  of  which  India   promised  to  disjoin  its  civil  and  nuclear  units,  thereby  placing  its  nuclear  faciliBes  under  the  purview   of  safeguards  of  the  InternaBonal  Atomic  Energy  Agency  (IAEA).  •  In  return,  U.S.A.  agreed  to  work  towards  complete  nuclear  cooperaBon  with  India.  •  Indian  media,  primarily  television,  was  one  of  the  biggest  beneficiaries  of  the  economic  liberalizaBon   era.    •  Before  liberalizaBon,  television  was  state-­‐owned  with  only  one  channel:  Doordarshan.    •  A_er  liberalizaBon,  the  government  not  only  permined,  but  encouraged  foreign  investors  to  engage   in  Indian  media  operaBons.    •  Satellite  broadcasts  began  with  companies  such  as  CNN  and  Zee  TV  among  others.    •  Today  television  caters  to  more  than  400  million  people  in  70  million  homes,  via  more  than  100   diversified  channels.   Back  to  Contents   21  
  22. 22. Indian  Economic  History:  Ups  &  Downs  Then...   •  Before  and  during  the  period  leading  up  to  colonial  rule,  Indias  contribuBon  to  the   world  economy  was  outstanding.   •  India  accounted  for  a  nearly  40%  of  global  wealth,  the  largest  in  the  world.   •  Under  Mughal  rule,  Indias  share  was  $17.5  million,  $1.5  million  more  than  Britains   $16  million.   •  During  Aurangazeb’s  rule  (1700s),  the  Indian  economy  accounted  for  24.4%  of  the   worlds  total.  Under  BriBsh  rule,  in  1820,  Indias  share  in  the  world  economy   plummeted  to  16%;  in  1870,  it  fell  further  to  12.2%  and  by  1913,  Indias  share  was  a   miniscule  7.6%.   •  In  1952,  the  Indian  economy’s  share  was  only  3.8%  in  world  income;  in  1973,  it  was   around  $495  billion  or  just  3.1%.  A`er  liberaliza1on...   •  In  1998,  Indias  economy  totaled  nearly  $1,703  billion  and  its  contribuBon  to  global   economy  inched  up  to  5%.  In  2005,  Indias  economic  contribuBon  to  world  income   edged  up  further  to  6.3%  and  totaled  $3,816  billion  on  Purchasing  Power  Parity  basis.   Back  to  Contents   22  
  23. 23. The  Catalyst  for  Change:  People  •  Indias  burgeoning  populaBon  was  cited  as  the  primary  reason  for  all  economic   and  social  issues  and  was  considered  a  hindrance  to  development.  •  However,  it  is  the  progressive  populaBon  which  has  been  crucial  in  India’s  dynamic   resurgence  in  the  last  2  decades.  Out  of  every  10  Indians,  seven  are  below  25  years   of  age.  Prime  Minister  Dr  Manmohan  Singh  commented  that  India  is  forecasted  to   produce  500  million  workers  by  2020.    •  This  would  account  for  a  quarter  of  the  global  work  force.  Within  the  next  ten   years,  the  average  working  age  of  an  Indian  is  pegged  to  be  29.  This  contrasts  with   the  average  working  age  of  60  in  the  US  and  Europe,  and  45  in  China.  •  According  to  the  InternaBonal  Labor  OrganizaBon  (ILO),  India  will  not  surpass   Chinas  populaBon  Bll  2030,  but  will  have  more  youngsters  (aged  20–24)  by  2013.   India  will  have  116  million  workers  in  this  age  limit,  in  contrast  to  94  million     in  China.  •  The  downside  to  Indias  exponenBal  economic  growth  is  that  the  demand  for   educated  graduates  is  increasing  every  day  from  all  sectors  ranging  from  IT  to   retail  to  professional  services.   Back  to  Contents   23  
  24. 24. The  Catalyst  for  Change:  People  (contd.)   Popula1on  Median  Age  (in  years)  in  2006   50   43.0   36.0   37.0   40   33.0   30   24.0   20   10   0   India   China   US   Russia   Japan   Growth  in  Working  Age  Popula1on  (15-­‐64  years)  by  2010  (in  million)   Stock  Posi1on   Addi1ons  to  Working  Age  Popula1on   2005   by  2010   World   4,168   314   India   691   71   Africa   500   64   China   934   44  South  East  Asia   362   33   LaBn  America   359   31   Southern  Asia   132   17   US   200   10   Europe   497   0   Japan   85   -­‐3   -­‐5   40   85   130   175   220   265   310   355   In  million   Back  to  Contents   24  
  25. 25. Looking  Ahead  •  India  harbors  the  worlds  second  largest  English-­‐speaking  populaBon,  both  in   absolute  and  GDP  terms.  •  This  is  one  of  the  main  reasons  why  Indian  employees  are  in  high  demand.  Apart   from  the  indigenous  growth  in  human  resources  and  domesBc  employment,   various  internaBonal  companies  outsource  their  operaBons  to  India.  Outsourcing   has  become  a  lucraBve  employment  opportunity  for  young  Indians,  whose  lifestyle   changes  are  spurring  domesBc    demand  for  many  goods  and  services.  •  Apart  from  people,  a  vast  and  humming  democracy,  the  mix  of  industries  and   services  which  make  up  the  Indian  economy,  play  an  important  role  in  ever   increasing  interest  from  the  global  community.  •  India  focuses  on  manufacturing  high  quality  precision  products,  mainly  in  the   so_ware  and  design  industry  and  is  a  world  leader  in  the  IT  sector,  not  to  forget   Cricket  and  Bollywood  –  India’s  mesmerizing  passion  for  sports  and  creaBve   media.  •  India  is  focused  on  manufacturing  goods  such  as  industrial  grade  steel,  tanks,   ships,  etc.  The  automoBve  industry  has  witnessed  an  unprecedented  growth  in   recent  Bmes.     Back  to  Contents   25  
  26. 26. Looking  Ahead  (contd.)   What  makes  India  an  abrac1ve  economy  to  invest  and  par1cipate  in?  •  Poli1cal:  The  world’s  largest  democracy  conBnues  to  endure  63  years  a_er  independence   from  colonial  rule.  •  Social:  A  relaBvely  stable  society  which  acBvely  pracBces  social,  cultural  and  religious   tolerance,  is  open  to  new  experiences  and  cultures,  and  openly  welcomes  diverse  people  from   all  walks  of  life.  •  Economic:  Indigenous  industry  and  innovaBon  are  acBvely  encouraged  since  liberalizaBon.   Witness  the  progress  made  by  companies  such  as  Wipro,  Infosys,  the  Tata  Group,  Reliance  and   many  more.  •  Interna1onal:  India  is  a  respected  member  of  the  internaBonal  community  –  poliBcally,   economically,  socially  and  culturally.  At  the  same  Bme,  a  lot  of  progress  is  sBll  needed  to  ensure  the  arrival  of  sustainable  and  fully    developed  India;  a  valuable  member  of  Global  CiBzenship.  Regional  poliBcs,  poverty,  illiteracy,  weak  infrastructure,  corrupBon  and  lack  of  accountability,  lax  laws  and  public  apathy  are  the  major  reasons  for  the  slow  progress  .  But  the  situaBon  is  infinitely  brighter  than  it  was  20  to  30  years  ago  as  India  conBnues  to  grow  steadily,  now  powered  by  People  and  facilitated  by  the  Government;  Aspiraon  Unleashed.   Back  to  Contents   26  
  27. 27. The  Global  Power  Sector   Energizing  the  World   Back  to  Contents  
  28. 28. Top  Six  Power  Producers  &  Consumers   Back  to  Contents  
  29. 29. Power  Genera1on  &  Consump1on  Facts  •  USA  accounts  for  25%  of  total  energy  consumpBon  in  the  world,  with  only  5%  of   the  total  global  populaBon.  •  Energy  consumpBon  per  person:     ‒  USA  (11  kW  per  person)   ‒  Germany  &  Japan  (6  kW  per  person)   ‒  China  (1.6  kW  per  person)     ‒  India  (0.7  kW  per  person)     ‒  Bangladesh  (0.2  kW  per  person)  •  China’s  energy  consumpBon  has  increased  by  almost  6%  every  year  in  the  last  25   years.  •  Coal-­‐fired  thermal  power  plants  sBll  conBnue  to  be  the  major  source  of  power  in   most  countries.  •  Hydroelectric  power  is  the  largest  source  of  power  in  Brazil,  Norway,  Paraguay,   Canada,  Venezuela  and  Switzerland.  •  Norway  &  Paraguay:  Hydroelectric  projects  contribute  100%  to  total  power   generated;  Paraguay  exports  90%  of  this  power  to  ArgenBna  &  Brazil.     Back  to  Contents  
  30. 30. New  Areas  of  Focus  •  India,  China  and  the  United  Kingdom  are  anracBng  huge  interest  with  respect  to   increased  investment  acBvity  in  power  sector.   350   312   304   300   288   289   245   211   2006   2007   2008   2009  Source:  China  Electricity  Council   Government  spending  on  electricity  generaBon   Government  spending  on  grid  capacity   Back  to  Contents  
  31. 31. Cumula1ve  Investment  in  the  Power  Sector    by  Region  •  China  leads  with  respect  to  investments  in  the  power  sector,  in  comparison  with   other  global  economies,  with  India  in  the  fourth  posiBon  a_er  OrganisaBon  for   Economic  Co-­‐operaBon  and  Development  (OECD)  regions  such  as  North  America   and  Europe.   OECD  Pacific   OECD  North  America   China   GeneraBon   Rest  of  Developing  Asia   Transmission   Other  LaBn  America   DistribuBon   Middle  East   0   500   1000   1500   2000   2500   3000   3500   Billion  Dollars  (2005)  Source:  IEA,  World  Energy  Outlook,  2006   Back  to  Contents  
  32. 32. Future  Outlook   •  According  to  staBsBcs  released  by  the  U.S.  Energy  InformaBon  AdministraBon  (EIA)  in   its  InternaBonal  Energy  Outlook  2009,  global  electricity  generaBon  is  set  to  rise  by  a   whopping  77%  from  2006-­‐2030,  with  an  average  growth  of  2.4%  per  year!   •   By  2030,  non-­‐OECD  countries  (including  India)  are  expected  to  account  for  nearly  60%   of  the  global  electricity  consumpBon.   Trillion  Kilowanhours   Index,  1990  =  1   History   ProjecBons   History   ProjecBons   Total   Net  Electricity   GeneraBon   Total  Energy   OECD   ConsumpBon   Non-­‐OECD  Source:  History:  Energy  InformaCon  AdministraCon  (EIA),  InternaConal  Energy  Annual  2006  (June-­‐December  2008),  web  site  www.eia.doe.gov/iea.  Projecons:  EIA,  World  Energy  ProjecCons  Plus  (2009)   Back  to  Contents  
  33. 33. Future  Outlook  (contd.)  •  Coal-­‐fired  power  generaBon  was  responsible  for   41%  of  the  global  electricity  producBon  in  2006.     Trillion  •  With  an  esBmated  global  share  of  43%  in  2030,  it   15   Kilowanhours   is  expected  to  maintain  its  number  one  posiBon   as  the  most  coveted  fuel  for  electricity   generaBon.   10  •  Natural  gas-­‐based  power  generaBon,  will  follow   renewable  energy  as  the  fastest  growing  power   source,  with  a  growth  rate  of  2.7%  every  year   through  2030.   5  •  Global  oil  prices,  which  are  already  skyrockeBng,   are  expected  to  touch  $130/barrel  in  2020.    •  Even  though  it  is  forecasted  to  rise  0.7%  from   2006  to  2015,  oil-­‐based  power  generaBon  will   0   2006   2010   2015   2020   2025   2030   drop  0.5%  on  average  every  year  a_er  that  Bll   2030.   Liquid   Nuclear   Renewables   Natural  Gas   Coal  •  Nuclear  power-­‐based  electricity  producBon  is   Source:  2006:  Derived  from  Energy  InformaCon  AdministraCon   (EIA),  InternaConal  Energy  Annual  2006  (June-­‐December  2008),   forecasted  to  rise  nearly  41%  to  3.8  trillion   web  site  www.eia.doe.gov/iea.  Projecons:  EIA,  World  Energy   kilowan-­‐hours  in  2030  from  2006  levels.   ProjecCons  Plus  (2009)   Back  to  Contents  
  34. 34. Future  Outlook  (contd.)  •  Non-­‐OECD  Asia,  led  by  China  and  India,  has   the  potenBal  to  become  the  fastest   growing  economy  (at  a  rate  of  4.4%)  in  the   Trillion  Kilowanhours   global  power  generaBon  sector  in  the   10   period  spanning  2006–2030.  •  In  2006,  79%  of  Chinas  and  71%  of  Indias   8   total  electricity  generaBon  was  anributed   to  coal.  On  current  projecBons,  in  2030,   6   coal  will  account  for  56%  of  Indias  and   75%  of  Chinas  power  producBon.   4  •  As  with  the  other  countries,  non-­‐OECD  Asia   will  witness  a  drop  in  the  demand  for  liquid   2   fuels  to  power  electricity  producBon.  •  India  has  laid  out  plans  to  increase  nuclear   0   2006   2010   2015   2020   2025   2030   power  generaBon  capacity  from  the   Liquid   Renewables   Natural  Gas   Nuclear   Coal   currently  operaBonal  3  gigawans  (GW)  to   20  GW  by  2020  and  to  40  GW  by  the  end  of   Source:  2006:  Derived  from  Energy  InformaCon  AdministraCon   (EIA),  InternaConal  Energy  Annual  2006  (June-­‐December  2008),   2030.   web  site  www.eia.doe.gov/iea.  Projecons:  EIA,  World  Energy   ProjecCons  Plus  (2009)   Back  to  Contents  
  35. 35. Country  Analysis:  India  •  Currently,  of  the  total  electricity  consumed  in  India,  75%  is  generated  by  thermal  power   plants,  21%  by  hydroelectric  plants  and  4%  by  nuclear  power  plants.  •  India  had  an  installed  electricity  capacity  of  144  GW  in  2006,  generated  703  billion  KWh  of   power.  •  In  2006,  thermal  sources  accounted  for  ~71%  of  the  electricity  producBon,  hydel  power  for   16%,  nuclear  energy  for  2%,  and  renewable  energy  sources  accounBng  for  the  rest.   800   ConvenBonal  Thermal   Hydroeletric   Nuclear   Geothermal,  Solar,  Wind,  and  Water   700   600   500   400   300   200   100   0   1986   1991   1996   2001   2006  Source:  Country  Analysis  Briefs,  EIA   Back  to  Contents  
  36. 36. Country  Analysis:  India  (contd.)  •  India’s  current  electricity  consumpBon  of  600  TWH  is  set  to  double  within  the  next  ten  years.  •  GeneraBng  capacity  needs  to  increase  from  150  GW  in  2006  to  241  GW  in  2020  to  meet   increased  demand.  •  GeneraBon  capacity  increased  by  40  %  in  2006  over  2000,  on  account  of  reforms  in  2003   which  iniBated  much-­‐needed  restructuring  of  the  power  sector.  Yet,  it  is  esBmated  that  at   least  500  million  Indians  sBll  have  no  access  to  electricity.  •  This  effecBvely  points  to  the    HUGE  potenBal  in  the  Indian  power  generaBon  arena.  •  India’s  peak  power  deficit  is  expected  to  hover  at  12.6%  of  total  capacity  this  year  –  up  from   11.9%  in  2009.  •  The  lucraBve  nature  of  this  sector  is  spurring  private  investors  to  begin  building  power  plants   in  the  country.  •  Private  investment  share  in  power  generaBon  currently  stands  at  13%,  and  is  expected  to   grow  with  numerous  foreign  and  domesBc  investments  planned.  •  Although  India’s  growth  rate  in  the  period  between  2000–2008  was  the  second  highest   among  BRIC  countries  at  5.7%,  its  per  capita  consumpBon  of  electricity  was  the  lowest.  •  India  is  indeed  an  ATTRACTIVE  DESTINATION  FOR  FOREIGN  CAPITAL  INVESTMENT.’    (Source:  KPMG  Survey)   Back  to  Contents  
  37. 37. Country  Analysis:  USA  •  Ranks  highest  on  the  worlds  energy   consumer  list  with  a  total  usage  of  100   quadrillion  BTU/105  exajoules  (EJ)  in  2005  –   thrice  the  amount  consumed  55  years  ago.  It  is   the  worlds  seventh  largest  per  capita  energy   Natural   Gas   consumer.   21.6%  •  Forty  percent  of  the  countrys  energy  was   Coal   sourced  from  petroleum,  23%  from  thermal   48.5%   coal  and  similar  amounts  from  natural  gas  in   Nuclear   2005.  Nuclear  power  accounted  for  8.4%,   19.4%   while  renewable  energy    represented  7.3%.  •  In  the  period  of  1992–2005,  270,000  MWE  of   gas  based  power  was  added.  Only  14,000   MWE  of  fresh  nuclear  and  coal-­‐fired  capacity   Hydroeletric,   5.8%   came  on  stream,  of  this  2,315  MWE  was   Other   Renewable nuclear.   Gases   s  2.5%   Other   0.3%   0.3%   Petroleum  •  In  2008,  US  wind  power  capacity  was  at   16,818  MW.   1.6%  •  The  SEGS  group  of  solar  plants  in  the  Mojave   Sources:  EIA,  Form  EIA-­‐923,  “Power  Plant  OperaCons  Report”  and   Desert  has  a  capacity  of    354  MW.  It  is  the   predecessor  form(s)  including  Form  EIA-­‐906  “Power  Plant  Report”     worlds  largest  solar  plant.   and  Form  EIA-­‐920.  “Combined  Heat  and  Power  Plant  Report.”   Back  to  Contents  
  38. 38. Country  Analysis:  China    China’s  electricity  generaBng  capacity   YEARLY  INCREASE    has  surged  over  the  last  four  years   IN  MEGAWATTS  because  of  a  boom  in  the  construcBon  of   120000  new  power  plants.  China  has  emerged  in  the  past  two  years  as  the  world’s  leading  builder  of  so-­‐called  clean  coal  power   100000  plants.   80000   60000  Yearly  increase  in  power  genera1ng  capacity   40000   20000   0  97   98   99   00   01   02   03   04   05   06   07   08   Thermal  power  (virtually  all  coal)   All  power  sources  Source:  China  NaConal  Bureau  of  StaCsCcs,  via  CEIC  data   Sources:  Energy  InternaConal  Annual   Back  to  Contents  
  39. 39. Country  Analysis:  China  (contd.)  •  Total  electricity  generaBon  was  3.71  trillion  kWh  in  2009,  while  consumpBon  was  almost  on  par  at  3.64   trillion  kWh.  •  Total  installed  capacity  for  electricity  producBon  is  874  GW  –  a  10%  increase  year-­‐on-­‐year.  •  The  naBon  plans  to  establish  a  grid  spanning  the  enBre  country  in  the  period  between  2015–2020.  •  TradiBonally  generaBng  most  of  its  electricity  from  coal,  China  is  in  the  process  of  se~ng  up  more  than  550   greenfield  coal-­‐fired  thermal  power  plants  over  the  coming  years.  •  Leading  the  worlds  renewable  energy  arena  with  a  152  GW  installed  capacity,  China  ranks  highest  among   the  global  wind  turbine  and  solar  panel  producing  countries.  •  The  naBons  consumpBon  of  renewables  for  electricity  generaBon  is  set  to  touch  10%  of  its  total  electricity   producBon  in  2010  and  16%  in  2020.  •  With  the  worlds  largest  hydel  power  capacity,  China  generated  616  billion  kWh  of  electricity  in  2009  from   hydel  power  -­‐  nearly  17%  of  its  total  electricity  producBon.  •  China  aims  for  a  70  GW  nuclear  power  capacity  by  2020  and  160  GW  by  2030.  Source:  NaConal  Bureau  of  StaCsCcs  of  China   Back  to  Contents  
  40. 40. Country  Analysis:  Japan  •  Imports  significant  quanBBes  of  crude  oil,  natural  gas  and  rare  fuels  such  as  uranium,  due  to  a  severe  dearth   of  fossil  fuels  barring  coal.  •  Dependent  on  imported  primary  energy  fuels  for  over  84%  in  1990.  •  In  2008,  Japan  took  third  spot  in  global  electricity  generaBon  values,  following  USA  and  China.  Japan   generated  a  linle  more  than  1  trillion  kWh  that  year.  •  Japans  per  capita  electricity  consumpBon  was  nearly  8,500  kWh  in  2004  –  21.8%  higher  than  levels  in  1990,   but  68%  lower  than  the  average  per  capita  electricity  consumed  by  Americans  in  2004.  •  More  acBve  in  nuclear  power  generaBon  with  53  acBve  nuclear  power  plants  in  2009,  third  only  to  USA   which  had  104  reactors  and  France  with  59.  Source:  U.S.  Energy  InformaCon  AdministraCon   Back  to  Contents  
  41. 41. Country  Analysis:  Russia  •  One  of  the  worlds  two  energy  super  powers   (the  other  being  Saudi  Arabia).  •  Russia    harbors  the  largest  known  reserves  of   natural  gas,  second  largest  reserves  of  coal   and  eighth  largest  oil  reserves  in  the  world.  •  Follows  USA,  China  and  Japan  as  the  fourth   Hydro   largest  electricity  generaBng  economy  in  the   21%   world,  Russia  is  also  the  worlds  largest  net   energy  exporter  &  supplier  to  the  European   Union.    •  In  2005,  the  country  exported  23  TWH  of  the   Nuclear   Thermal   total  951  TWH  that  it  generated.   63%   16%  •  It  produced  175  TWH  of  hydro  electricity  in   2005  –  nearly  6%  of  the  worlds  total  hydel   power  generaBon.  •  Total  installed  nuclear  capacity:21,244  MW.  •  In  2005,  Russia  generated  149  TWH  nuclear   energy  –  >5%  of  global  generaBon.   Sources:  EIA  (www.eia.doe.gov)   Back  to  Contents  
  42. 42. Country  Analysis:  Brazil  •  Total  consumpBon  of  410  TWH  in  2007.  •  Heavily  reliant  on  hydroelectric  power   generaBon.  •  Total  of  633  hydel  plants  with  installed   capacity  of  73,678  MW  as  of  2007.  •  10%  of  total  power  generaBon  is  from   natural  gas,  to  be  increased  to  12%  by   2010.  •  Remains  a  net  importer  of  electricity,   mainly  from  ArgenBna,  yet  striving  for  self-­‐ sufficiency.   Sources:  EIA  InternaConal  Energy  Annual   Back  to  Contents  
  43. 43. Indian  Infrastructure  Sector   InviBng  Private  Investment   Back  to  Contents  
  44. 44. Infrastructure:  An  Overview  •  Building  world-­‐class  infrastructure  in  developing  countries  like  India  is  a  greater  imperaBve  than  it  is  in   developed  economies,  many  of  which  have  reached  saturaBon  point.  •  Total  investment  requirement  in  India’s  infrastructure  sector  is  esBmated  to  be  $445  billion  in  2012   (beginning  of  the  12th  Five  Year  Plan),  of  which  power  sector  requirements  are  the  highest,  at  $143  billion.  •  Investment  of  $1.7  trillion  over  the  next  ten  years  (2010–2020)  is  required  in  the  infrastructure  sector   (Source:  Goldman  Sachs).  •  Reasons:     –  Explosive  growth  in  populaBon;     –  Infrastructure  for  rapid  industrial  growth  to  sustain  itself;  and     –  Increase  in  passenger  and  commercial  traffic.    •  In  the  four  years  preceding  the  global  recession,  the  economy  grew  consistently     by  8.5-­‐9%,  increasing  the  need  for  higher  infrastructure  spending.  •  FDI  inflows:     –  $7.8  billion  in  2005–2006,     –  $19.5  billion  in  2006–2007  and     –  $24  billion  in  2007–2008  –  are  inadequate  for  infrastructure  growth.  •  A  Compounded  Annual  Growth  Rate  (CAGR)  of  15%  over  the  next  5  years  is  required  to  sustain  industrial   growth.  •  In  India,  much  of  funding  in  infrastructure  has  been  in  the  form  of  loans  and  government  funding,   increased  FDI  parBcipaBon  is  essenBal  and  acBvely  encouraged.   Back  to  Contents   44  
  45. 45. Government  Ini1a1ves  in  Infrastructure  I   A  radical  change  in  strategy  by  the  Government  of  India  –  Abrac1ng  private  sector   investments,  both  foreign  and  domes1c,  in  infrastructure  which  requires  a   massive  infusion  of  funds  as  well  as  mul1-­‐disciplinary  know-­‐how.  •  Priority-­‐Sector  status  for  construcBon  of  roads  and  highways.  •  Cess  levied  on  petrol  and  diesel  to  fund  road  projects.  •  Venture  Capitalists  invesBng  in  power  or  telecom  exempted  from  paying  taxes  on   dividend  income  and  long  term  capital  gains.  •  Tax  exempBon  for  40%  of  profits  from  long-­‐term  financing  of  infrastructure   projects,  subject  to  certain  condiBons.  •  Tax  exempBon  in  income  from  dividends  and  interest,  and  long-­‐term  capital  gains   for  Infrastructure  Capital  Funds.  •  Five-­‐year  tax  holiday  for  Build-­‐Operate-­‐Transfer  (BOT)  and  Build-­‐Own-­‐Operate-­‐ Transfer  (BOOT)  projects  in  all  crucial  infrastructure  segments  –  roads,  power,   airports,  ports,  bridges,  railways,  etc.   Back  to  Contents   45  
  46. 46. Government  Ini1a1ves  in  Infrastructure  II  •  Tax  breaks,  annuity  payments  and  capital  grants  for  road  project  funding.  •  Foreign  InsBtuBonal  Investors  (FIIs)  now  allowed  to  invest  in  unlisted   infrastructure  companies  (considerable  delays  in  lisBng  infrastructure  companies   due  to  long  gestaBon  periods).  •  Delinking  of  PSUs  so  that  power  equipment  manufacturers  can  sell  equipment  in   the  merchant  market.  •  Projects  to  be  reserved  for  the  private  sector  and  awarded  through  compeBBve   bidding.  •  Open  access  to  Transmission  &  DistribuBon  (T&D)  network;  enhanced  regulaBon   of  T&D  to  cut  losses.  •  Proximity  advantage  of  coal  and  other  fuel  linkages  and  “Zero”  import  duty  for   capital  goods  import  for  plants  being  set  up  with  iniBal  installed  capacity  of  1000   MW  or  more.  •  100%  FDI  allowed  in  all  energy  sectors  except  Atomic  Energy  •  PPPs  are  favored  model  where  public  and  private  sectors  bring  their  respecBve   strengths  to  the  table.   Back  to  Contents   46  
  47. 47. Private  Sector  Investment  Ini1a1ves  Radical  reforms  in  government  policies  on  infrastructure  have  galvanized  the  private  sector  to  increase  investments  in  infrastructure.   To  invest  $5.48  billion  in  its  thermal  power  business  to  realize  its  hydro  generaBon  capacity   target  of  5500  MW  by  2015.   Invested  $10  million  in  a  container  freight  staBon  at  Ponneri  in  Tamil  Nadu.   Plans  to  invest  50.36  million  pounds  at  its  railway  producBon  facility  in  Hayange,  France.   Firmed-­‐up  plans  for  invesBng  $5.19  billion  for  its  upcoming  power  plants  at  Mundra,  Maithon   and  Jojobera  over  a  period  of  three  years.   Plans  to  invest  $1  billion  in  se~ng  up  2  to  3  greenfield  plants  in  the  country.   Se~ng  up  Ultra-­‐Mega  Power  Plants  (UMPPs)  with  a  combined  generaBon  capacity  of  nearly   16000  MW.   Plans  to  add  another  4380  MW  thermal  and  6100  MW  hydro-­‐power  capacity  in  the  next  5   years  (exisBng  capacity  of  1000  MW).  Three  joint  ventures  between  Toshiba  CorporaBon  (Japan)  &  JSW  Group,  Ansaldo  Caldalo  SpA  (Italy)  and  GB  Engineering  Enterprises,  and  Alstom  SA  (France)  and  Bharat  Forge  planning  to  launch  power  equipment  manufacturing  faciliBes.   Back  to  Contents   47  
  48. 48. FDI  in  India  I  •  India  ranks  third  today  in  anracBng  total  FDI  and  is  expected  to  conBnue  within  the  first  five   (Source:  UNCTAD  Report  “World  Investment  Prospects  Survey”).  •  India  is  ranked  the  second-­‐most  promising  investment  desBnaBon,  a  sign  of  how  far  India  has   come  since  its  days  of  closed  door  policy  in  the  1980s,  when  FDI  was  allowed  only  in  cases   where  technical  knowhow  was  required  (Investor  Survey  conducted  in  Japan  in  2009).  •  Improved  investor  confidence  resulted  in  India  anracBng  $1.74  billion  of  FDI  in  Nov  2009,   61.1%  higher  than  the  FDI  inflow  of  $1.08  billion  in  the  corresponding  period  of  2008.    •  Investment  in  the  infrastructure  sector  has  doubled  from  4%  of  GDP  in  2004–2005  to  8%  of   GDP  in  2007–2008  (Source  Data  from  Planning  Commission).  •  Comparisons  between  FDI  inflows  to  India  and  China  are  very  common.  While  China  adopted   the  Top-­‐Down  model,  se~ng  up  its  physical  infrastructure  first,  India  adopted  the  Bonom-­‐Up   model,  pu~ng  a  policy  framework  in  place  first  before  emphasizing  focus  on  infrastructure.  •  Net  FDI  inflows  to  China  increased  from  $0.4  billion  in  1990  to  $52.7  billion  in  2002,  while   inflows  to  India  went  up  from  $0.07  billion  to  a  meager  $2.6  billion  in  the  same  period.  •  India’s  FDI  as  a  share  of  GDP  was  1.7%,  while  China’s  was  2.8%  in  2007,  considering  much   larger  GDP  base  of  China.  •  China  ranked  1st  in  the  FDI  Confidence  Index  (2002  and  2003),  while  India  ranked  15th  in   2002  and  6th  in  2003  (Source:  AT  Kearney  report).   Back  to  Contents   48  
  49. 49. FDI  in  India  II  •  French  power  equipment  manufacturer  Alstom  has  partnered  with  Bharat  Forge  to  invest   $105.6  million  in  a  power  equipment  plant.  •  Federal  Agency  for  State  Property  Management  of  Russian  FederaBon  will  buy  a  20%  stake  in   telecom  company  Sistema  Shyam.  •  ADB  has  approved  financial  assistance  of  $200  million  for  investment  in  the  power  sector  in   Assam  for  a  project  with  innovaBve  features  such  as  off-­‐grid  renewable  energy-­‐based   electricity,  reducBon  in  CHG  emissions  and  distribuBon  through  franchisees.  •  The  Unar  Pradesh  government,  which  is  targeBng  total  power  generaBon  of  25,000  MW  by   the  end  of  the  12th  Five  Year  Plan  (2017),  has  signed  a  MoU  with  Lanco  Infratech  for  se~ng   up  plants  to  generate  1320  and  660  MW  at  Fatehpur  and  Anpara,  and  with  Bajaj  Hindustan   for  400  MW  at  five  of  its  sugar  mills.  •  CumulaBve  FDI  inflows  into  India  between  1990  and  2007  were  $160  billion.  •  The  majority  of  FDI  inflows  were  from  USA,  UK,  Japan,  MauriBus,  Netherlands,  Singapore,   South  Korea  and  France.   Back  to  Contents   49  
  50. 50. Sector-­‐Specific  Outlook   The  Growth  Factor   Back  to  Contents  

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