8. When middle class is 50% then the politics will also change
(m)
400
22%
32%
8%
368
300
200
220
100
0
65
1980
2000
Source: The Consuming Class, National Council of Applied Economic Research, 2002
2010
9. Poverty is declining
(%)
50
40
1% of the people have
been crossing poverty
line each year for 25
years
46
30
26
20
16
10
0
Equals ~ 200m
1980
2000
2010
10. Per capita income gains
US$ ppp
1,178
1980
3,051
Source: World Bank
2005
11. India is now the 4th largest economy
It will overtake Japan
between 2012 and 2014
to become the 3rd largest
15. Drivers of growth
India
East and S.E. Asia
■ Domestic
■ Exports
■ Services
■ Manufacturing
■ Consumption
■ Investment
16. Drivers of growth
India
East and S.E. Asia
■ Domestic
■ Exports
■ Services
■ Manufacturing
■ Consumption
■ Investment
■ High tech, capital
intensive industry
■ Low tech, labour
intensive industry
17. Implications of India model
‘Domestically led’ means:
■ Insulation from global downturns
■ Less volatility
■ We will come out of the global crisis
faster
18. Implication of India model
‘Services led’ raises
uncomfortable questions:
■ Have we skipped the industrial
revolution?
■ How do we take people from farms to
cities?
■ Will SEZ’s be our tipping point?
19. Implication of India model – Consumption led
People Friendly:
Consumption as % of GDP
42%
64%
People Friendly, Less inequality:
Gini Index
India
59%
China
58%
33%
India
41%
Europe
45%
China
U.S.
Brazil
Will India become the next big consuming economy after the U.S.?
20. Reasons for success
India’s success is market-led
whereas China’s is state induced
The entrepreneur is at the
centre of the Indian model
22. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
23. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
■ 1,000 Indian Companies have received foreign
institutional investment
24. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
■ 1,000 Indian Companies have received foreign
institutional investment
■ 125 Fortune 500 companies have R&D bases in India
25. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
■ 1,000 Indian Companies have received foreign
institutional investment
■ 125 Fortune 500 companies have R&D bases in India
■ 390 Fortune 500 companies have outsourced software
development to India
26. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
■ 1,000 Indian Companies have received foreign
institutional investment
■ 125 Fortune 500 companies have R&D bases in India
■ 390 Fortune 500 companies have outsourced software
development to India
■ 2% bad loans in Indian banks (v~20% in China)
27. India has a vibrant private space
■ 100 Indian Companies have market cap of US$ 1bn
■ 1,000 Indian Companies have received foreign
institutional investment
■ 125 Fortune 500 companies have R&D bases in India
■ 390 Fortune 500 companies have outsourced software
development to India
■ 2% bad loans in Indian banks (v~20% in China)
■ 80% credit goes to private sector (v~10% in China)
28. Public space is a problem
We have
■ Dynamic democracy with
honest elections
■ Free, lively media and press
But we also have
Poor governance!
29. Governance Failures
Corrupt system
1 out of 4 school teachers absent in
government schools
2 out of 5 doctors absent in primary health
centers
Delhi’s water
Land titles
Etc
30. Ironically, we used to have world class institutions from
1950-1980, but our problem was growth.
Now we have growth, but our institutions are failing
■ Bureaucracy
■ Judiciary
■ Police
33. Key reforms
■ Opened economy to trade and investment
■ Dismantled controls
■ Lowered tariffs
■ Dropped tax rates
■ Broke public sector monopolies
34. Understanding India’s economic success
Remarkable --every government has reformed (slowly)
since 1991
Even slow reforms add up
65 countries have done the same reforms – why did India
become the second fastest in the world?
Unappreciated fact – rule of law
35. “By 2010 India will have world’s largest
number of English speakers”
“When 300 million Indians speak a word in a
certain way, that will be the way to speak it.”
Professor David Crystal
Cambridge Encyclopedia of the English Language
36. Understanding India’s economic success
■ Mental revolution among the young
■ ‘I want to be Bilgay’
■ Raju’s secret of success
■ Banianisation of society
■ 180 TV channels; 65 news channels
■ The rise of Hinglish
37. Where are we today?
Growth fell to 6.7% in 08-09; 7% in 09-10
Pain has been less than in China
Competitive companies have recovered faster.
Risk of protectionism has receded
Recovery has been ahead of the world
38. Where are we going?
■ Base case post recovery is 7.5 % – 8.5 % GDP growth
■ Democracy will not permit more than 8% unless you have a Thatcher
■ 1.5% population growth
■ Demographic dividend – growth will continue beyond China’s
39. Per capita income
On a ppp basis
($000)
37,000
40
30
20
16,800
5,800
10
2,100
3,050
0
2000
2005
2020
2040
2066
40. Convergence in the 21st century
■ Why convergence is intuitive?
■ Convergence didn’t happen in the 20th century
because the world was closed
■ Returning to a world of equality prior to 1750
■ When China and India accounted for 45% of world GDP
41. India will gradually turn middle-class
West of the
KanpurChennai line
East of the
KanpurChennai line
50%
50%
Kanpur-
32%
22%
Chennai
8%
1980
2000
2010
2020
2040
42. What could stop the show?
- Infrastructure
- Improving via public-private parterships
- Fiscal Deficit
- Governance
None of these stopped the show in the past 25 years
- Nuclear War?
43. Education System
Is reasonably good for the top 20%
But it is abysmal for the rest
■ 1 in 4 teachers is absent in government
primary schools
■ Hence, 54% of children in urban India are in
private schools
Solution: Education Vouchers
44. Caste system
■ Origin of India’s caste system
■ Classical four castes vs 3000 jatis
■ Hostage to competitive politics
■ Source of competitive advantage
■ Affirmative action
45. Role of Religion
India’s pluralism, diversity
and tolerance
2% 1%
Hinduism
■ Spiritual entrepreneurialism: Gurus
■ No hierarchy:
Every Brahmin thinks he is the Pope
12%
■ 300 million gods:
Lack of theological narcissism
■ Nasadiya Temper
85%
Hindu
Muslim
Sikh
Christian
46. Elephant and not Tiger
■ India got democracy before capitalism and this has made
all the difference
■ It is slower than China but its path is surer
■ However, an elephant at 8% growth is a formidable beast
■ We have waited 3000 years for this moment
■ India is more likely to preserve its way of life
Please centre and cut the word old and put It has been onto a new line- could we make a consistent style for statements- maybe always in yellow, centred and growing?
Please could we have some kind of outline of India in the background to make the slide prettier
Could we use the script- does that fit with template?
Could we have a line for the y axis as well as numbers
Please animate all graphs so lines/bars and pie charts grow
Again y axis
Again line for y axis- is there a reason that the line is on green rather than orange?
Line for y axis
Y axis line
Could we put text in white in a box of It– put Equals …..on its own line in yellow to make it more impactful
Could we centre up the chart?
Cut the word and and centre up. Could we either make the statement grow and/or make it into a different colour to make it more impactful?
Or could we add an image – we have loads of India images
Is it on brand to use script here?
Could we add India image from file?
Make yellow title bullet and white sub bullets
Again could we add India image from file
Same with bullets and sub bullets
animate
Centre up and change colour
Grow as two separate statements
Centre these up – maybe make a little bigger?
These should be bullet points- image search Indian Policeman?
Image of Delhi at night from Google or istock?
Make bullets consistent
Y axis as a line
Please cut This means
Make bullets consistent
Animate graph
Pic of Indian school kids?
Consistent bullet points
Please make a pie chart out of religious percentages
Make bullet points out of last 3 points