India Shining Bright
Posted : November 20, 2005 at 10:29 pm [IST]
Presently, the Indian economy appears picture perfect. Today as it seems the growth is as good in spread as it is in speed. Consumers are buying spree. Prices are going down and becoming affordable. As an example, prices of high-end products like plasma TV have gone down by as much as 30 per cent in the last year alone. Credit is easily and abundantly available. Companies are investing for global scale and latest globally competitive technology for global markets as target. Profits are better, and interest rate is low. Corporate India is bursting with in confidence.
It is no more a growth without new job creation. According to studies, new job creation in urban areas this year has been the highest since 2000, as has been the rate of increase in salaries. Some figures are fantastic:
7%: GDP growth for four consecutive years; 20% rise in exports for three years in a row; over 30% increase in corporate loans-a record.
40%: increase in investment; new projects spread across sectors. Spending on infrastructure to double to Rs 95,000 crore in 2006. Even the quality of proposed investments is better, as projects taken up now are by big companies and are being largely funded by internally generated funds showing the sincerity of intent.
14%: rise in salaries in 2005-one of the highest in five years and the biggest job growth in 2005/2006 bring back employment and financial security for urban households.
56%: growth in home loans, 40% rise in consumer credit, wealth creation in stock market and real estate boom power the current spending spree.
53%: growth in mobile phones to make India the second largest global market. Booming airline and auto industries and the world’s youngest workforce help the good times roll.
Investors are putting in their money in equity market and mutual funds. Share markets indices have already reached all time high. India tops the NRI remittances at $21.7 billion of forex.
Indians will buy over a million cars in 2005. With an average price of Rs 4 lakh a car, it means Indians will spend a total of Rs 40,000 crore for the year for cars. Spending on mobile phone handsets will be more than Rs 13,000 crore during the year. And every thing is being done to reach the bottom of the pyramid. And product innovations are making the difference. Shampoo sachets for Re 1, chhota recharge (for cell phones) for Rs 10, personal computers for less than Rs 10,000. 30 per cent sales of two-wheelers are going to non-metros. Private substitutes fro even some of the public or government-aided private services-water, roads, education, health and even law and order have already begun. People have started to employ security guards and buy packaged water. Private nursing homes, hospitals, and schools are becoming pretty popular.
Interestingly, a large proportion of new projects is from the manufacturing sector unlike in the past when services companies were the only ones investing. Typically, manufacturing investment creates bigger demand for cement and steel and generates good quality white-collar and blue-collar jobs. Current investments are also global in scale and size. Companies setting up projects are now looking at globally competitive cost of production. Big projects in sectors ranging from steel, alumina, textile and auto ancillaries coupled with various infrastructure sectors are taking shape.
And this growth is sustainable. Even a minor increase in interest rate will not affect demand because of innovation in financing and products.
Are these not exciting? Let us be part of it.
- Indra
Category: Industry/Management |
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