1. Management Practices for Sustainable Growth-Focus India as if People and Environment Matter Presentation by Prof.K.Prabhakar [email_address]

4. India: Among the Top-15 Countries in terms of GDP at constant prices The Indian economy has witnessed an unprecedented growth…. Booming Indian services and industry sector are providing the required impetus to the economic growth The sound performance of each industry segment is leading to the overall robust performance of the Indian economy Indian economy is the 4 th largest in terms of PPP – USD 4.1 trillion in 2006 India’s GDP witnessed high growth and was the second fastest growing GDP after China Growth in sectors (2006-07): Industry: 10.9% Services: 11% Agriculture: 2.7% Fastest GDP growth of 9.4 percent in 2006-07, since last 18 years Contribution of Services - increased from 49 percent to 55 percent 4% 8.5% 7.5% 8.4% 9.4%

5. India: Economic Platform India’s enhanced economic performance has been the major contributor towards increased Forex reserves Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability Falling Dollar inflates the India’s external debt Increased confidence of investors in Indian companies have led to a surge in cross border borrowing by the corporate houses Forex reserves witnessed an increase of 200 percent for the period 1990-2007 … at present level of Forex reserves, the country has adequate cover for 12 months of imports India’s Forex reserves are in excess of external debt… … t he decreasing external debt to GDP ratio indicates that India has a sound economic platform

6. India: Surging Exports Petroleum products are the major contributors towards India’s growing imports Quality and cost advantage are the two important parameters leveraged by the Indian producers to increasingly market their products and services Services sector has been a major contributor to increased exports from India Imports of products by India mainly includes petroleum products and minerals Indian companies have chalked out extensive plans to increase their presence abroad Acceptance of Indian products along with the cost advantage has provided an edge to Indian companies

7. India: Attractive Investment Destination India is ranked second in AT Kearney FDI confidence index Telecom and Electronics topped the list of inward FDI FDI inflow for the period 2006-07 witnessed a growth of 180 percent over the same period last year Mauritius has been the largest contributor towards FDI into India….. With improved performance on PE ratio and ROE, Indian markets have attracted large investments 180 percent Increase Return on the Investments in India (2006 Q1) 15 2.39 10.9 EM Europe 18 2.46 9.35 Latin America 15 2.12 11.19 EM Asia 9.84 12.17 13.21 9.85 10.26 10.62 16.1 PE Ratio Thailand Taiwan Malaysia Korea Indonesia China India Market 23 2.32 11 2 16 1.82 16 1.84 NA 3.09 17 2.06 22 4.53 RoE (%) P/B Ratio

8. India: Pacing Ahead to Emerge as a Major Economy in the World 2007 Global Retail Development Index (GRDI) India has been ranked superior to other major countries by many prominent surveys… AT Kearney placed India among the top three in its FDI confidence index… … the retail market along with the services sector has been attracting the interest of major players India is expected to outperform its rivals in the BRIC, in terms of GDP growth rates, from 2015 onwards…

9. India: Demographics 2 9 48 221 726 2001-02 2005-06 2009-10(E) Rich (Above 115,000) High Income (57,000 – 115,000) Consuming class (23,000 – 57,000) Working class (10,200 – 23,000) Needy (Below 10,200) Annual Household Income (in USD) * In PPP terms Population (million) Increasing per capita income coupled with an emerging middle class has provided the necessary impetus to consumerism in India Growth in the higher income categories of India’s population has created an affluent section of society, which has significant level of purchasing power Increasing per capita income and large population moving into middle class has led to high level of consumerism in India DEMOGRAPHIC TRANSFORMATION OF INDIA 9 17 74 285 710 20 33 120 404 613

10. Countries worldwide are anticipating a shortage of working population in the future. India is expected to emerge as a clear winner, and by 2050, it will have the largest working age population. India: Increasing Working Population Stock Position 2005 South East Asia 362 Southern Asia 132 India 691 Africa 500 China 934 Latin America 359 USA 200 Europe 497 Japan 85 World 4,168 In Million Addition to Working Age Population by 2010 Growth in Global Working Age Population (15-64)

12. India has among the highest returns on foreign investment. - Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 “ We came to India for the costs, stayed for the quality and are now investing for innovation”. A T Kearney FDI Confidence Index 2005 India is among the three most attractive FDI destinations in the world. Jack Welch “ India is a developed country as far as intellectual capital is concerned”. US Department of Commerce By 2032, India will be among the three largest economies in the world. BRIC Report, Goldman Sachs Why India? – Quote Unquote Travyn Rhall, ACNielsen “ The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”. Craig Barrett Intel Corporation “ India has evolved into one of the world's leading technology centers“.

13. Economic Growth

14. Benefits

16. Costs

19. Opportunity Cost of Growth Capital Goods Consumer Goods C1 C2 K1 K2 Production Possibility Frontier: Assume initial output levels of C1 consumer goods and K1 capital goods – where C1 barely represents the essentials of life in a developing country – clean water, food, shelter, etc. Any attempt to increase the basis for wealth generation – by producing more capital goods that need to be used for such wealth generation – will mean a reduction in the number of consumer goods available (the opportunity cost). Such a reduction can be very damaging to a country already suffering a lack of basic essentials. Opportunity cost of K2 – K1 capital goods is C1 – C2 consumer goods sacrificed. Sacrifice Gain

20. Growth and Production Possibility Frontiers C1 Capital Goods Consumer Goods A B Economic growth when a country is operating below capacity – more of both capital and consumer goods are made available as the economy moves from point A to point B K1 K2 C2

21. Growth and Production Possibility Frontiers C1 Consumer Goods A B K1 K2 C2 Country operating at full capacity but discovers new resources or find ways of improving the efficiency of existing resources, for example, education of the population to improve the quality of human capital. Improving health care of people Technological innovations Entrepreneurship Capital Goods

23. Indicators of Economic Development

27. Development

28. Levels of poverty, Absolute poverty, Relative poverty, Inequality-How to measure? Progress – what constitutes progress?

30. Other Measures?

31. What is said what we believe. Source: www.ibef.org

32. What is UNSAID

33. Listen to What Rachel Carson said in 1964

44. India

45. Owner driven

46. Global

48. What is your suggestions?

49. Thank you If you have any questions please do send you mail to [email_address]