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December 2010, Volume: 9

     Sensex          20389.07   Nifty   6101.85   Dollar   44.95    Gold   20660   Silver   45900   Crude Oil $)   93.38

 Investeurs Chronicles


                                                                                                      INSIDE
                                                                                                      •    The Game Changer
                                                                                                           decade 2001-2010




                                                                                      Investeurs Consulting P. Limited
                                                            S-16, U.G.F, Green Park Ext. New Delhi-110016, www.investeurs.com
Time flies, but in human quest of capturing the impossible, we pursue capturing and bracketing this time. One such bracket is decade. It is a common
practice to get into a retrospective mode at end of such signposts to assess whether what has gone by was significant, & contributing to the arc of
history. By that measure the passing decade appears to be in possession of some of the defining and path breaking events of our times. Starting of the
decade had a different terrain: biggest concern was Y2K, America was still the undisputable super power, Euro zone was unheard of, the World Trade
Centre stood tall, & social networking didn’t figure in anyone’s mind. About 3650 days hence, look around, and you will feel as if living in a different
world!

Millennium bug or Y2K problem threatened to put world in to turmoil at start of the decade, but, financial markets turned out to be the bigger threat!

Having survived different crisis in 90’s & 9/11 shock, global markets were high at confidence. Common notion was that developed nations will go on
being richer, & developing ones would continue developing. But in this merry making, an important issue of worldwide low interest rates was
overlooked, which created bubbles in housing markets. As a result associated financial assets also expanded unsustainably. This coupled with Central
bank’s inflation only targeted approach, resulted in a credit crunch in 2007 and evolving in to a full-blown financial crisis in 2008. What followed were
fall of financial giants, & a hurricane of quantitative easing to arrest that fall.

World was recovering from aftermath of this crisis, when, Euro zone countries, member of world’s largest trade block, ran into a fresh crisis of
potentially disruptive sovereign debt levels. Some of the most affluent of the European Countries, PIGS, Portugal, Ireland, Greece & Spain have either
availed bailout packages or are trying hard to avert that. Nevertheless, the entire region, apart from Germany, still seems to be on a financial
pacemaker.
All in all, a high magnitude disaster has been averted, to a good extent, but     countries who managed to survive financial turmoil of 2008 without much

almost all major economies are on crutches, limping back to widening fiscal       impact. While most of the rich nations are still fighting with the stubborn

deficits, ageing population, & trade imbalances.                                  recession, India has got its momentum back, clocking GDP growth of
                                                                                  around 8%.
May be after few generations, happenings of this decade will pale out, but
for now, a host of momentous occurrences of last ten years make it one of          Living standards of Indians has improved in last decade
the more consequential passages of time. Momentous, it is, for the world,          •   Over 70m households (34% of total) earn Rs. 80,000 to Rs.
but for our country, India, it is perhaps more than that. A transformational           18,00,000 per annum
decade for India & the Indians!                                                    •   Six hundred thousand households earn more than Rs. 18, 00,000
                                                                                       per annum.
On the surface our economy has stepped on gas, markets are booming, our
                                                                                   •   Market researchers believe that household income is massively
stature as a race & as a country has risen, but, scratch this surface a little,
                                                                                       understated – baggage of the era of controls and usurious taxes
and you may end up discovering that these economic, political &
                                                                                   •   Independent studies suggest 1.6 million households earn over Rs
International milestones are merely manifestations of the transformation in
                                                                                       40 lakh per annum and about 100,000 people have more than Rs. 4
the psyche of Indians. Now, we are a nation of higher optimism, higher
                                                                                       crore in assets.
confidence, & greater enterprise!
                                                                                   •   Real Incomes increased by 12%; However, real GDP per capita has
The Galloping Elephant                                                                 grown at 10% over FY02-07.
So much so about yesteryears economy horses. But this decade, if it                •   50% of the people have seen incomes rise in the past 12 months; 9%
belongs to any one, goes to the dragon & the elephant. Much has been                   have seen their Incomes decline.
written about dragon powerhouse (China).So; let’s concentrate on our
indigenous elephant economy, India.

For long, India has been considered as a sluggish economy weighed down            No doubt that Indian outsourcing to big global corporations enabled the

by its own components, leave alone the global ones. This decade has broken        country to leap to 9% growth from decades of growing at 4%. It put Indian

that jinx, & shown that elephants can gallop! India became a part of the          executives & professionals at par with their global counterparts. But,

elite 12 countries trillion dollar economy club in 2007. Its economy stands       Outsourcing to India, now, is no longer only a cost cutting measure. In

at 1.367trillion US$ in 2009. Indian economy is the twelfth largest in the        fact, it is a quality conscious, value addition system to the parent

world, & in terms of purchasing power parity (PPP), India stands at number        company. Moreover, India’s abundant No doubt that Indian outsourcing to

four.                                                                             big global corporations enabled the country to leap to 9% growth from
                                                                                  decades of growing at 4%. It put Indian executives & professionals at par
While rich nations were growing at an average of 5% in initial three quarter
                                                                                  with their global counterparts. But, Outsourcing to India, now, is no longer
of the decade, India pitched a dazzling growth performance in the same
                                                                                  only a cost cutting measure. In fact, it is a quality conscious, value
time period. Highpoint of the growth story came in 2005-06 when GDP
                                                                                  addition system to the parent company. Moreover, India’s abundant
growth for the country stood at 9.5%. India is also one of those few time
Human capital is moving up the value chain in promising new areas of biotech            Decade of dazzling deals:
and pharmaceuticals, computer software and electronics, and the auto and                   Tata Steel acquired 100% stake in Corus Group on January 30, 2007 in
aerospace industries.                                                                       an all cash deal of $12.2 billion.
                                                                                           India Aluminum and copper giant Hindalco Industries purchased
Foreign exchange reserves, which forced India to open up in 1990, have been                 Canada-based firm Novelis Inc in February 2007. The total worth of
increasing to unprecedented levels. They were equivalent to a meager three week             the deal was $6-billion.
import cover in 1990, but in this decade they had touched a peak of 16.9 months            Vodafone purchased administering interest of 67% owned by Hutch-
in 2004, & currently are at about 12 months. In value terms, forex reserves are at          Essar for a total worth of $11.1 billion on February 11, 2007.

284.18bn US$ currently, & India has the sixth largest forex reserves in its kitty.         The acquisition of Japanese pharmaceutical company Daiichi Sankyo
                                                                                            by Indian major Ranbaxy for $4.5 billion in 2008.
Growth Curve                                                                               Tata Motors acquired Jaguar and Land Rover brands from Ford Motor
                                                                                            in March 2008. The deal amounted to $2.3 billion.
                                        1990-91     2005-06     2008-09      2009-10
                                                                                           In November 2008 NTT DoCoMo, the Japan based telecom firm
GDP Growth (%)                             5.0         9.5         6.7            7.4       acquired 26% stake in Tata Teleservices for USD 2.7 billion.
Exports (US$ bn)                          18.1        103.1       185.3       176.5        The Oil and Natural Gas Corp purchased Imperial Energy Plc in
                                                                                            January 2009. The deal amounted to $2.8 billion.
Imports (US$ bn)                          24.1        149.2       303.7        78.7
                                                                                           Bharti Airtel bought operations in 15 countries from Kuwait's Zain
Forex (US$ bn)                             2.2        145.1       241.4      279.10
                                                                                            telecom in a 10.7 billion dollar deal.
Output of Food grains ( mn tones)        176.4        217.3       233.9      216.85        The Piramal Healthcare sells its domestic formulations business to US

Crude Oil (mn tones)                      33.0        32.2        33.5        36.71         drug maker Abbott for a whopping Rs 17,000 crore in May 2010.
                                                                                           Sun Pharmaceutical Industries (Sun) completed the acquisition of a
Finished Steel (mn tones)                 13.5        46.5        57.2        65.46
                                                                                            controlling stake in Israel based, Taro Pharmaceutical Industries
                                                                                            (Taro) in September 2010.

With such shine & sound in the economy, confidence in the Indian market is                 Reckitt Benckiser to buy Paras Pharmaceuticals for Rs 3,260 crore.
                                                                                            (December 2010)
unmatched. Sensex attained its highest intraday level at 21,078 on 8.01.2008.It is
                                                                                           Tata Chemicals to buy British Salt for 93 mn pounds. (December 2010)
still hovering around level of 20,000, at times breaching it in last few weeks.
                                                                                           Welspun Corp bought 35 per cent of Australian Leighton Holdings for

The last year of the decade, 2010 has another feather to its cap. It has witnessed          around USD 104 million (December 2010)

maximum IPOs for the Indian stock market, 70 public issues, which comprises of             iGate Corporation to buy 60% stake in Patni Computer Systems
                                                                                            (December 2010)
62 IPOs and 8 FPOs. They resulted in companies raising a record            Rs 71,100
crore. Indian companies raised more money in share sales in the domestic market
in 2010 than they had ever done in the past. This reflects the confidence of global
& domestic investors in India when uncertainty in rest of the world is at historic
high.
The decade has been phenomenal for Indian Corporate in particular. No           say, Japan, China, South Korea, Taiwan, Singapore, and that of India is
longer are they a faint & distant image of their rich, foreign counterparts.    democracy. It has been a custom around the world for freedom to follow
Instead, they have transformed into a lot of soaring confidence, & towering     growth. But, in India, it is different. We started growing after having labor
vision companies. Nothing better than a string of merger & acquisitions, of     rights, free trade unions, free press, & universal adult franchise, all fruits of
which Indian companies have been recently a part of, highlights change of       democracy, in place.
sentiment.
                                                                                Our political system has functioned as a mechanism for redistribution,
Be it 12 billion US$ Tata Corus deal which made it fifth largest deal in the
                                                                                giving various groups a piece of the pie and even allowing intermediate
steel   industry globally, &   spear headed     Tata in to second      most
                                                                                castes to come to power. Many say that fast GDP growth has benefited only
geographically diversified steel producer in the world, or, Hindalco buying
                                                                                a few rich businessmen. However, the latest data and research show that
Novelis in 6 billion US$ deal, Indian Corporate have made their global
                                                                                record GDP growth has benefited the masses and the poorest states. Poverty
ambitions clear. This trend is not merely restricted to the metal sector. In
                                                                                has fallen sharply and the poorest states have increased growth amazingly.
automobile space, there were deals like Tata Motors clinching Jaguar Land
                                                                                That’s one reason so many incumbent governments in poor states have
Rover and Mahindra and Mahindra’s purchase of Ssangyong.
                                                                                been re-elected.
Indian pharma industry has been another dazzling sector of Indian               For decades, anti-incumbency dominated elections, and three-quarters of
industries of late. Whether it was Ranbaxy's sale to Daiichii, Ajay Piramal's   incumbent governments lost. But the trend has reversed in the last few
domestic formulations business to Abbott or Paras Pharma's sale to Reckitt      years: suddenly three-quarters of incumbents are winning. So will it be
Benckiser, deals have been a plenty, & each one of them outstanding in its      wrong to say that in the decade gone by Economic and Social empowerment
magnitude and efficacy.                                                         has taken over Caste and Religion-based identity politics? Today, after a
                                                                                period of rapid growth, politics is set to enter another phase, which is likely
Each one of them louder & more emphatic in announcing the arrival of
                                                                                to be defined by battles for a more equitable distribution of wealth and
Indian business to the global arena.
                                                                                resources.
Mergers & Acquisitions create a whole new world order, and it is projected
                                                                                The clearest evidence that the political paradigm is changing can be
to gain momentum in the coming years as well. At the same time, Indian
                                                                                observed by looking at the economic growth which skyrocketed between
corporate with their new found exuberance seem to be all set for creating a
                                                                                2000-04 and 2004-09:
niche for themselves in this new world order.

Changing face of Indian Politics
When we talk of India’s growth story, it seems imperative to compare it with
other high performing Asian economies of the past & the present. Apart
from the explicit differences between economies of other Asian economies,
Avg. % GSDP growth
                                                                            A decade which started with technological concerns, ended on financial, &
State                      2000-2004                     2004-2009
                                                                            spent intermittent period, partly in political misendeavors, & partly in
Bihar                          4.5                           12.4
                                                                            financial. One third of the world is on booster dose of quantitative easing,
Chhatisgarh                    6.1                           9.7            or if simply put, printing money, another one third is on massive fiscal
Jharkhand                      1.9                           8.5            cuts, & remaining one third is busy combating effects of combined action
                                                                            of the two third of the world. However, there is an unwavering optimism
Madhya Pradesh                 1.9                           6.6
                                                                            of getting back to normal, albeit a new normal (another contribution of
Orissa                         4.8                           19.2
                                                                            this decade.
Uttar Pradesh                  3.3                           6.7
                                                                            What & how this new normal turns out to be in the coming decade is
Gujarat                      12.0%                           15.9
                                                                            anybody’s guess!

                                                                              Technology’s tectonic shift
Though many other factors (alliances, caste, regional pride, inflation)
                                                                              The industry which spearheaded India’s growth story is IT-ITES. And it
remain highly relevant but fast growth matters as never before. When slow
                                                                              is still going strong as obvious by the way in which IT-ITeS exports
growing states accelerate to 6% or more, incumbents start winning. Why
                                                                              have been able to pick up even though recovery in the developed world
have fast growth and mass improvement gone together? Not because
                                                                              remains weak. It vindicates the fact that India is no longer America’s
some crumbs from fast growth were thrown to the poor. Rather, only
                                                                              back office. In fact, there is a competitive edge which Indian IT
when the vast majority of people improved their income did this add up
                                                                              companies provide to the businesses along with moving up in the
to record growth and poverty reduction.
                                                                              value chain.
With the economy projected to continue growing at between 7-9% annually
                                                                              Confidence in the domestic companies to be self sufficient in
over the next decade, there is every reason to believe that development
                                                                              technology is another highlight. Bajaj ventured out on its own, as also
and governance issues will increasingly dominate public discourse with
                                                                              Hero recently. Tata acquired Land rover-Jaguar to provide fillip to its
different social groups demanding their share of the GDP pie.
                                                                              technology. All these instances show that India is now focusing on its
Ode to the past, & prose for the new                                          own technology development rather than relying on others.
With unique growth model & new found trends, Indian Elephant is surely
                                                                               The other domestic technology revolution albeit with a hint of social
up, & dashing. What it now needs to overcome are road blocks inherent in
                                                                              welfare is the UID scheme. If successful, it would be a pioneer in low
the system; some & not all because some of the apparent road blocks are
                                                                              cost , technology oriented solution to inclusive growth in country.
in fact speed checks to ensure safety, and quality of the journey.

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Investeurs chronicles 9

  • 1. December 2010, Volume: 9 Sensex 20389.07 Nifty 6101.85 Dollar 44.95 Gold 20660 Silver 45900 Crude Oil $) 93.38 Investeurs Chronicles INSIDE • The Game Changer decade 2001-2010 Investeurs Consulting P. Limited S-16, U.G.F, Green Park Ext. New Delhi-110016, www.investeurs.com
  • 2. Time flies, but in human quest of capturing the impossible, we pursue capturing and bracketing this time. One such bracket is decade. It is a common practice to get into a retrospective mode at end of such signposts to assess whether what has gone by was significant, & contributing to the arc of history. By that measure the passing decade appears to be in possession of some of the defining and path breaking events of our times. Starting of the decade had a different terrain: biggest concern was Y2K, America was still the undisputable super power, Euro zone was unheard of, the World Trade Centre stood tall, & social networking didn’t figure in anyone’s mind. About 3650 days hence, look around, and you will feel as if living in a different world! Millennium bug or Y2K problem threatened to put world in to turmoil at start of the decade, but, financial markets turned out to be the bigger threat! Having survived different crisis in 90’s & 9/11 shock, global markets were high at confidence. Common notion was that developed nations will go on being richer, & developing ones would continue developing. But in this merry making, an important issue of worldwide low interest rates was overlooked, which created bubbles in housing markets. As a result associated financial assets also expanded unsustainably. This coupled with Central bank’s inflation only targeted approach, resulted in a credit crunch in 2007 and evolving in to a full-blown financial crisis in 2008. What followed were fall of financial giants, & a hurricane of quantitative easing to arrest that fall. World was recovering from aftermath of this crisis, when, Euro zone countries, member of world’s largest trade block, ran into a fresh crisis of potentially disruptive sovereign debt levels. Some of the most affluent of the European Countries, PIGS, Portugal, Ireland, Greece & Spain have either availed bailout packages or are trying hard to avert that. Nevertheless, the entire region, apart from Germany, still seems to be on a financial pacemaker.
  • 3. All in all, a high magnitude disaster has been averted, to a good extent, but countries who managed to survive financial turmoil of 2008 without much almost all major economies are on crutches, limping back to widening fiscal impact. While most of the rich nations are still fighting with the stubborn deficits, ageing population, & trade imbalances. recession, India has got its momentum back, clocking GDP growth of around 8%. May be after few generations, happenings of this decade will pale out, but for now, a host of momentous occurrences of last ten years make it one of Living standards of Indians has improved in last decade the more consequential passages of time. Momentous, it is, for the world, • Over 70m households (34% of total) earn Rs. 80,000 to Rs. but for our country, India, it is perhaps more than that. A transformational 18,00,000 per annum decade for India & the Indians! • Six hundred thousand households earn more than Rs. 18, 00,000 per annum. On the surface our economy has stepped on gas, markets are booming, our • Market researchers believe that household income is massively stature as a race & as a country has risen, but, scratch this surface a little, understated – baggage of the era of controls and usurious taxes and you may end up discovering that these economic, political & • Independent studies suggest 1.6 million households earn over Rs International milestones are merely manifestations of the transformation in 40 lakh per annum and about 100,000 people have more than Rs. 4 the psyche of Indians. Now, we are a nation of higher optimism, higher crore in assets. confidence, & greater enterprise! • Real Incomes increased by 12%; However, real GDP per capita has The Galloping Elephant grown at 10% over FY02-07. So much so about yesteryears economy horses. But this decade, if it • 50% of the people have seen incomes rise in the past 12 months; 9% belongs to any one, goes to the dragon & the elephant. Much has been have seen their Incomes decline. written about dragon powerhouse (China).So; let’s concentrate on our indigenous elephant economy, India. For long, India has been considered as a sluggish economy weighed down No doubt that Indian outsourcing to big global corporations enabled the by its own components, leave alone the global ones. This decade has broken country to leap to 9% growth from decades of growing at 4%. It put Indian that jinx, & shown that elephants can gallop! India became a part of the executives & professionals at par with their global counterparts. But, elite 12 countries trillion dollar economy club in 2007. Its economy stands Outsourcing to India, now, is no longer only a cost cutting measure. In at 1.367trillion US$ in 2009. Indian economy is the twelfth largest in the fact, it is a quality conscious, value addition system to the parent world, & in terms of purchasing power parity (PPP), India stands at number company. Moreover, India’s abundant No doubt that Indian outsourcing to four. big global corporations enabled the country to leap to 9% growth from decades of growing at 4%. It put Indian executives & professionals at par While rich nations were growing at an average of 5% in initial three quarter with their global counterparts. But, Outsourcing to India, now, is no longer of the decade, India pitched a dazzling growth performance in the same only a cost cutting measure. In fact, it is a quality conscious, value time period. Highpoint of the growth story came in 2005-06 when GDP addition system to the parent company. Moreover, India’s abundant growth for the country stood at 9.5%. India is also one of those few time
  • 4. Human capital is moving up the value chain in promising new areas of biotech Decade of dazzling deals: and pharmaceuticals, computer software and electronics, and the auto and  Tata Steel acquired 100% stake in Corus Group on January 30, 2007 in aerospace industries. an all cash deal of $12.2 billion.  India Aluminum and copper giant Hindalco Industries purchased Foreign exchange reserves, which forced India to open up in 1990, have been Canada-based firm Novelis Inc in February 2007. The total worth of increasing to unprecedented levels. They were equivalent to a meager three week the deal was $6-billion. import cover in 1990, but in this decade they had touched a peak of 16.9 months  Vodafone purchased administering interest of 67% owned by Hutch- in 2004, & currently are at about 12 months. In value terms, forex reserves are at Essar for a total worth of $11.1 billion on February 11, 2007. 284.18bn US$ currently, & India has the sixth largest forex reserves in its kitty.  The acquisition of Japanese pharmaceutical company Daiichi Sankyo by Indian major Ranbaxy for $4.5 billion in 2008. Growth Curve  Tata Motors acquired Jaguar and Land Rover brands from Ford Motor in March 2008. The deal amounted to $2.3 billion. 1990-91 2005-06 2008-09 2009-10  In November 2008 NTT DoCoMo, the Japan based telecom firm GDP Growth (%) 5.0 9.5 6.7 7.4 acquired 26% stake in Tata Teleservices for USD 2.7 billion. Exports (US$ bn) 18.1 103.1 185.3 176.5  The Oil and Natural Gas Corp purchased Imperial Energy Plc in January 2009. The deal amounted to $2.8 billion. Imports (US$ bn) 24.1 149.2 303.7 78.7  Bharti Airtel bought operations in 15 countries from Kuwait's Zain Forex (US$ bn) 2.2 145.1 241.4 279.10 telecom in a 10.7 billion dollar deal. Output of Food grains ( mn tones) 176.4 217.3 233.9 216.85  The Piramal Healthcare sells its domestic formulations business to US Crude Oil (mn tones) 33.0 32.2 33.5 36.71 drug maker Abbott for a whopping Rs 17,000 crore in May 2010.  Sun Pharmaceutical Industries (Sun) completed the acquisition of a Finished Steel (mn tones) 13.5 46.5 57.2 65.46 controlling stake in Israel based, Taro Pharmaceutical Industries (Taro) in September 2010. With such shine & sound in the economy, confidence in the Indian market is  Reckitt Benckiser to buy Paras Pharmaceuticals for Rs 3,260 crore. (December 2010) unmatched. Sensex attained its highest intraday level at 21,078 on 8.01.2008.It is  Tata Chemicals to buy British Salt for 93 mn pounds. (December 2010) still hovering around level of 20,000, at times breaching it in last few weeks.  Welspun Corp bought 35 per cent of Australian Leighton Holdings for The last year of the decade, 2010 has another feather to its cap. It has witnessed around USD 104 million (December 2010) maximum IPOs for the Indian stock market, 70 public issues, which comprises of  iGate Corporation to buy 60% stake in Patni Computer Systems (December 2010) 62 IPOs and 8 FPOs. They resulted in companies raising a record Rs 71,100 crore. Indian companies raised more money in share sales in the domestic market in 2010 than they had ever done in the past. This reflects the confidence of global & domestic investors in India when uncertainty in rest of the world is at historic high.
  • 5. The decade has been phenomenal for Indian Corporate in particular. No say, Japan, China, South Korea, Taiwan, Singapore, and that of India is longer are they a faint & distant image of their rich, foreign counterparts. democracy. It has been a custom around the world for freedom to follow Instead, they have transformed into a lot of soaring confidence, & towering growth. But, in India, it is different. We started growing after having labor vision companies. Nothing better than a string of merger & acquisitions, of rights, free trade unions, free press, & universal adult franchise, all fruits of which Indian companies have been recently a part of, highlights change of democracy, in place. sentiment. Our political system has functioned as a mechanism for redistribution, Be it 12 billion US$ Tata Corus deal which made it fifth largest deal in the giving various groups a piece of the pie and even allowing intermediate steel industry globally, & spear headed Tata in to second most castes to come to power. Many say that fast GDP growth has benefited only geographically diversified steel producer in the world, or, Hindalco buying a few rich businessmen. However, the latest data and research show that Novelis in 6 billion US$ deal, Indian Corporate have made their global record GDP growth has benefited the masses and the poorest states. Poverty ambitions clear. This trend is not merely restricted to the metal sector. In has fallen sharply and the poorest states have increased growth amazingly. automobile space, there were deals like Tata Motors clinching Jaguar Land That’s one reason so many incumbent governments in poor states have Rover and Mahindra and Mahindra’s purchase of Ssangyong. been re-elected. Indian pharma industry has been another dazzling sector of Indian For decades, anti-incumbency dominated elections, and three-quarters of industries of late. Whether it was Ranbaxy's sale to Daiichii, Ajay Piramal's incumbent governments lost. But the trend has reversed in the last few domestic formulations business to Abbott or Paras Pharma's sale to Reckitt years: suddenly three-quarters of incumbents are winning. So will it be Benckiser, deals have been a plenty, & each one of them outstanding in its wrong to say that in the decade gone by Economic and Social empowerment magnitude and efficacy. has taken over Caste and Religion-based identity politics? Today, after a period of rapid growth, politics is set to enter another phase, which is likely Each one of them louder & more emphatic in announcing the arrival of to be defined by battles for a more equitable distribution of wealth and Indian business to the global arena. resources. Mergers & Acquisitions create a whole new world order, and it is projected The clearest evidence that the political paradigm is changing can be to gain momentum in the coming years as well. At the same time, Indian observed by looking at the economic growth which skyrocketed between corporate with their new found exuberance seem to be all set for creating a 2000-04 and 2004-09: niche for themselves in this new world order. Changing face of Indian Politics When we talk of India’s growth story, it seems imperative to compare it with other high performing Asian economies of the past & the present. Apart from the explicit differences between economies of other Asian economies,
  • 6. Avg. % GSDP growth A decade which started with technological concerns, ended on financial, & State 2000-2004 2004-2009 spent intermittent period, partly in political misendeavors, & partly in Bihar 4.5 12.4 financial. One third of the world is on booster dose of quantitative easing, Chhatisgarh 6.1 9.7 or if simply put, printing money, another one third is on massive fiscal Jharkhand 1.9 8.5 cuts, & remaining one third is busy combating effects of combined action of the two third of the world. However, there is an unwavering optimism Madhya Pradesh 1.9 6.6 of getting back to normal, albeit a new normal (another contribution of Orissa 4.8 19.2 this decade. Uttar Pradesh 3.3 6.7 What & how this new normal turns out to be in the coming decade is Gujarat 12.0% 15.9 anybody’s guess! Technology’s tectonic shift Though many other factors (alliances, caste, regional pride, inflation) The industry which spearheaded India’s growth story is IT-ITES. And it remain highly relevant but fast growth matters as never before. When slow is still going strong as obvious by the way in which IT-ITeS exports growing states accelerate to 6% or more, incumbents start winning. Why have been able to pick up even though recovery in the developed world have fast growth and mass improvement gone together? Not because remains weak. It vindicates the fact that India is no longer America’s some crumbs from fast growth were thrown to the poor. Rather, only back office. In fact, there is a competitive edge which Indian IT when the vast majority of people improved their income did this add up companies provide to the businesses along with moving up in the to record growth and poverty reduction. value chain. With the economy projected to continue growing at between 7-9% annually Confidence in the domestic companies to be self sufficient in over the next decade, there is every reason to believe that development technology is another highlight. Bajaj ventured out on its own, as also and governance issues will increasingly dominate public discourse with Hero recently. Tata acquired Land rover-Jaguar to provide fillip to its different social groups demanding their share of the GDP pie. technology. All these instances show that India is now focusing on its Ode to the past, & prose for the new own technology development rather than relying on others. With unique growth model & new found trends, Indian Elephant is surely The other domestic technology revolution albeit with a hint of social up, & dashing. What it now needs to overcome are road blocks inherent in welfare is the UID scheme. If successful, it would be a pioneer in low the system; some & not all because some of the apparent road blocks are cost , technology oriented solution to inclusive growth in country. in fact speed checks to ensure safety, and quality of the journey.