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

1. INDIA
Emerging
Into
the
Light

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. India
An
Overview
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to
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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).
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Contents
4

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.
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5

6. India
From
the
Pages
of
History
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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.
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7

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.
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Contents
8

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. 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
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Contents
10

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
India's
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
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Contents
11

12. Post
Independence:
License
Raj
• One
of
the
important
observaBon
post
India’s
independence
in
1947
concern
the
country's
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
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Contents
12

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
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Contents
13

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
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Contents
14

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
India's
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
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Contents
15

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
Indian's
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
India's
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
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Contents
16

17. Liberaliza1on:
A
New
Era
India
Ascending
Back
to
Contents

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
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Contents
18

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. 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
country's
fiscal
deficit
and
ramping
up
the
financing
and
investment
in
the
country's
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
country's
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
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Contents
20

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. Indian
Economic
History:
Ups
&
Downs
Then...
• Before
and
during
the
period
leading
up
to
colonial
rule,
India's
contribuBon
to
the
world
economy
was
outstanding.
• India
accounted
for
a
nearly
40%
of
global
wealth,
the
largest
in
the
world.
• Under
Mughal
rule,
India's
share
was
$17.5
million,
$1.5
million
more
than
Britain's
$16
million.
• During
Aurangazeb’s
rule
(1700s),
the
Indian
economy
accounted
for
24.4%
of
the
world's
total.
Under
BriBsh
rule,
in
1820,
India's
share
in
the
world
economy
plummeted
to
16%;
in
1870,
it
fell
further
to
12.2%
and
by
1913,
India's
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,
India's
economy
totaled
nearly
$1,703
billion
and
its
contribuBon
to
global
economy
inched
up
to
5%.
In
2005,
India's
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. The
Catalyst
for
Change:
People
• India's
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
China's
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
India's
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. 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. Looking
Ahead
• India
harbors
the
world's
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. 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;
Aspira'on
Unleashed.
Back
to
Contents
26

27. The
Global
Power
Sector
Energizing
the
World
Back
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Contents

28. Top
Six
Power
Producers
&
Consumers
Back
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Contents

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. 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. 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. 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.
Projec'ons:
EIA,
World
Energy
ProjecCons
Plus
(2009)
Back
to
Contents

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.
Projec'ons:
EIA,
World
Energy
kilowan-­‐hours
in
2030
from
2006
levels.
ProjecCons
Plus
(2009)
Back
to
Contents

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
China's
and
71%
of
India's
8
total
electricity
generaBon
was
anributed
to
coal.
On
current
projecBons,
in
2030,
6
coal
will
account
for
56%
of
India's
and
75%
of
China's
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.
Projec'ons:
EIA,
World
Energy
ProjecCons
Plus
(2009)
Back
to
Contents

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. 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
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Contents

37. Country
Analysis:
USA
• Ranks
highest
on
the
world's
'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
world's
seventh
largest
per
capita
energy
Natural
Gas
consumer.
21.6%
• Forty
percent
of
the
country's
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”
world's
largest
solar
plant.
and
Form
EIA-­‐920.
“Combined
Heat
and
Power
Plant
Report.”
Back
to
Contents

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. 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
world's
renewable
energy
arena
with
a
152
GW
installed
capacity,
China
ranks
highest
among
the
global
wind
turbine
and
solar
panel
producing
countries.
• The
naBon's
consumpBon
of
renewables
for
electricity
generaBon
is
set
to
touch
10%
of
its
total
electricity
producBon
in
2010
and
16%
in
2020.
• With
the
world's
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. 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.
• Japan's
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
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Contents

41. Country
Analysis:
Russia
• One
of
the
world's
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
world's
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
world's
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
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Contents

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. Indian
Infrastructure
Sector
InviBng
Private
Investment
Back
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Contents

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. 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. 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. 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. 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. 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. Sector-­‐Specific
Outlook
The
Growth
Factor
Back
to
Contents

51. Ports
• The
coastline
in
India
is
7,517
kilometers,
Government
ini1a1ve
touching
13
states;
there
are
12
major
and
187
minor
ports
in
the
country
(Source:
The
The
Public
Private
Partnership
Appraisal
Comminee
(PPAC)
Economic
Survey,
2007–2008).
set-­‐up
to
evaluate
and
sancBon
JV
projects,
has
approved
4
PPP
projects
valued
over
$897.7
million.
• Indian
ports
are
not
compeBBve
enough:
average
turnaround
Bme
for
cargo
services
• Development
of
a
mega-­‐container
terminal
at
Chennai
is
3.5
days
as
compared
to
10
hours
in
Port.
Hong
Kong
ports.
• Developing
a
berth
to
serve
mulBple
purposes
at
Paradip
Port,
Orissa.
• Some
improvements
have
been
made
and
• Development
of
a
container
terminal
at
the
New
traffic
handling
has
grown
by
10.7%
(third
Mangalore
Port.
quarter
ended
December
2009)
over
the
corresponding
period
in
2008
(Indian
Ports
• Development
of
a
2nd
North
Cargo
Berth
at
TuBcorin
AssociaBon
(IPA)
figures).
Port
(Tamil
Nadu).
• Major
ports
registered
a
12.8%
year-­‐on-­‐
Future
projects
cleared
by
the
Cabinet
Commibee
year
(YOY)
growth
in
cargo
volumes,
due
to
increased
capaciBes.
on
Infrastructure
(CCI)
in
the
pipeline
• Total
investment
required
for
upgrading
• Development
of
a
$1.44
billion
container
terminal,
at
and
modernizing
ports
in
the
11th
Five
Year
the
busy
Jawaharlal
Nehru
Port.
Plan
(2007–2012)
is
around
$12
billion
• ConstrucBon
of
a
$129.6
million
standalone
container
(Economic
Survey,
2007–2008).
handling
facility
at
Mumbai
Port
(to
be
completed
within
2
years).
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to
Contents
51

52. Roads
I
• India
has
one
of
the
largest
road
networks
worldwide:
3.34
million
km.
• The
GOI
has
ambiBous
plans
for
private
sector
parBcipaBon
in
the
massive
investment
program
for
development
and
upgrade
projects
as
a
PPP
model.
• The
total
investment
Bll
the
end
of
the
11th
Five
Year
Plan
(2012)
is
approximately
$55
billion
(Source:
The
Economic
Survey,
2007–2008).
Upcoming
projects
• Road-­‐widening
project
(covering
445
km)
to
be
undertaken
by
the
NaBonal
Highways
Authority
of
India
(NHAI)
at
an
esBmated
cost
of
$950
million
in
a
design-­‐build-­‐finance-­‐operate-­‐transfer
(DBFOT)
model.
• Four
lane
road
(83.85
km)
at
the
Godhra-­‐Gujarat-­‐Madhya
Pradesh
border,
at
a
cost
of
$156.55
million.
The
government
will
meet
the
pre-­‐construcBon
cost
of
$24.5
million
for
land
acquisiBon.
• Four
lane
road
(13
km)
on
the
Coimbatore
bypass
at
$186.2
million.
• Six
lane
road
(54.83
km)
on
the
Chengalpanu
highway.
• Four
lane
road
(155.15
km)
connecBng
Indore
and
Jhabua
at
a
cost
of
$256.65
million
(DBFOT
model).
• Four
lane
road
connecBng
Haridwar
and
Dehra
Dun
on
a
DBFOT
basis
at
a
cost
of
$104.4
million.
• Four
lane
road
(80
km)
connecBng
Muzaffarnagar
and
Haridwar
at
a
cost
of
$164.6
million.
• Four
lane
road
(65.07
km)
on
Goa-­‐Karnataka
border
at
$102.8
million
under
DBFOT.
Back
to
Contents
52

53. Roads
II
Projects
funded
purely
by
the
private
sector
• Reliance
Infra:
$218.3
million
DBOFT
project
on
the
Pune
-­‐
Satara
Road,
with
four
lane
roads
connecBng
the
ports
at
Mundhra
and
Kandla,
to
be
completed
by
2012.
• Another
project
executed
at
a
cost
of
$165.5
million
by
a
consorBum
of
private
sector
companies
connects
Electronic
City
and
Silk
Board
juncBon
in
Bangalore,
Karnataka.
Based
on
a
Build-­‐Operate-­‐Transfer
(BOT)
model,
it
is
scheduled
for
transfer
to
the
NHAI
a_er
18
years.
The
boasts
of
innovaBve
features
such
as
CCTV
surveillance,
auto
rickshaw
traffic
counters,
emergency
call
boxes,
etc.
Back
to
Contents
53