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Subject: Incredible Super Power, “India” hahahaha....
This is one of those emails that flood my Inbox every morning, but was different from the rest, it made me laugh aloud and ponder hard at the same time.
India is:
nation where Pizza reaches home faster than Ambulance, Fire brigade and Police!
nation where you get Car Loan @ 6% but Education Loan @ 12%!
nation where Rice is Rs.4 but Sim card is Rs.50!
and again ironically a nation where people standing at a tea stall reading an article in a newspaper about child labour can be heard saying, "Yaar, bacchho se kaam karwane walo ko tho faansi pe chadha dena chaahiye"and then suddenly they shout, "Oye, Chottu 3 chai la dae!"
This really sums up the pragmatic and entrepreneurial spirit of India that is being celebrated across the globe. Several books, case studies have been dedicated to this by business schools in the US and Europe.
What make the point perhaps even more forcefully blunt are the two news snippets below:
1. According to the World Economic Forum’s Business Competitiveness Report for year 2010-11 India has dropped two places to rank 59 because of lack of education, health and infrastructure. At the same time, China has overtaken two countries to rise to number 27 in the rankings. In stark contrast to its poor competitiveness, India is seen as an attractive destination for FDI. It is second only to China in terms of top destinations for foreign capital. Listen to any fund manager selling his unique product with a pick of diverse Indian companies; they make equities in India sound safer than my Fixed Deposits in the Reserve Band of India.
2. All these highlight the contradictions that somehow come together in India but elsewhere might lead to doom and failure. You might ask, “Do corrupt and ineffective governments or lack of infrastructure have no role to play in the growth of business?” I am told by corporate bigwigs that the government in India is entirely decoupled from business! So are we to forget that IT became the poster child of our economy because of the government’s economic liberal policy for that industry or that the auto industry in India was protected for years helping our domestic manufacturers to come up to speed with international brand quality?
What should one make of these paradoxes: would you bet your money on India?
With my very limited understanding of the ever dynamic financial world, I fear I will soon succumb to the seduction of the Indian markets. Endorsement comes from UK Prime Minister’s faith in India becoming one of the key powers of the world, and Nobel laureate Economist Thomas Friedman saying, “if India were a stock I would definitely buy it”. As time comes to decide whether to put my money on India, I must turn to hard data.
It comes from the Euromonitor report suggesting that consumption in Emerging markets, including India, is only going upwards and that number of households with an annual disposable income of $10,000 and over will more than double from now to 2020.
Now, concentrate and analyse:
Expenditure pattern across developing nations is predicted to look something like this; housing at 21%, and the same as food and beverages, transport at 12% and alcoholic drinks another 10%.
Interestingly, personal care, jewelery, watches, finance and “miscellaneous” goods and services show a healthy 10% share of spend. Leisure and recreation will grow by 100% and India will lead in communications with a 150% rise in sales in the next decade as mobile phones drive the industry.
As with everything in India, here is the caveat, with a slug fest among 16 telecom companies in India there is no money to be made in the sector.
Interestingly, despite dramatic shifts in consumption by 2020, average per capita expenditure in Emerging markets will only be around $6,000, compared with $20,000 in the US and the largest Western European markets.
But millions of Chottus will continue to oil the wheels of commerce in India and I am hoping my bet would have paid off.
India shining? yeah...yeah...!!
- Surya Kant Jena -
soorajkiran1@gmail.com
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