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Back to school: To prepare workforce of the future, India must radically revise its education system | Scroll.in, 05 may 2019
Health, education sectors get new reality check | The Times of India, 05 may 2019
China's war on healthcare costs lures India's biggest drugmaker | The Economic Times, 05 may 2019
How significant are Insurance-Tech Start-Ups for healthcare in India? | Elets, 05 may 2019
The state of Indian agriculture under Modi regime | The New Indian Express, 05 may 2019
The power of informality | Business Standard, 04 may 2019
Now's an excellent learning opportunity for Indian credit markets | The Economic Times, 04 may 2019
India has gone truly global so why is its foreign policy so outdated | The Print, 04 may 2019
Turbocharging India's Digital Economy | Project Syndicate, 03 may 2019
Education and Technology Have Become Inseparable Twins | Entrepreneur, 02 may 2019
Mohammad Anas Wahaj | 09 apr 2019
According to the recent report 'India Digital Ad-fraud Market 2018' by techARC, the total size of digital ad-fraud in India stood at staggering US$ 1.63 Billion, which is 8.7% of the global size. The report projects 23% increase in digital ad-fraud in 2019. Digital Commerce contributed more than half 51% of the total ad-fraud in India. While, Leisure & Travel (26%), Entertainment & Gaming (13%), Banking & Finance (8%), Healthcare & Pharma (1%) and Others (1%). Although, App Fraud contributes to over 85% of the total digital ad-fraud, the organizations should not ignore the web platforms. Web platforms are more susceptible to frauds as in several organizations the digital teams are primarily focusing on the app, leaving the web space vulnerable. As video is increasingly becoming the preferred medium of content, it is also attracting fraudsters to exploit this advertising channel. The report finds that businesses who have an ad-fraud solution in place are better equipped to have higher levels of customer engagements. Faisal Kawoosa, Founder & Chief Analyst at techARC, says, 'Digital ad-fraud is getting increased attention from the C-level leadership of evolved organisations, where it is no longer an agenda of a CDO or CMO. The impact of digital ad-fraud now goes beyond diminishing the returns on marketing spends and can jeopardize the entire digital transformation journey hampering Brand Equity, Relevance and Positioning among other ramifications.' Read on...
Mohammad Anas Wahaj | 07 apr 2019
Biotechnology is expected to be the next big thing for the Indian economy, just like the IT industry has been, explains Amit Kapoor, President & CEO of India Council on Competitiveness and Honorary Chairman at Institute for Competitiveness. According to him, '...biotechnology industry seemed poised to take over the mantle. In the span of a decade beginning in 2007, the industry has grown exponentially in size from about US$ 2 billion to over US$ 11 billion in terms of revenue. By 2025, it is targeted to touch US$ 100 billion.' In the past, both Green Revolution (agricultural transformation) and White Revolution (dairy sector transformation) became successful because of the contributions from biotechnology. At present India's rising competitiveness in pharmaceuticals is also the result of biotechnological advancements and research. Moreover, energy needs of rural areas are also met by biomass fuel, produced through application of biotechnology. Mr. Kapoor explains evolution of biotechnology in India, 'As early as 1986, Rajiv Gandhi, recognising the potential of biotechnology in the country's development, set up the Department of Biotechnology...Department of Biotechnology has set up 17 Centres of Excellence at higher education institutions across the country and has supported the establishment of eight biotechnology parks across different cities...Biotechnology Industry Research Assistance Council (BIRAC) in 2012, which has successfully supported 316 start-ups in its six years of existence...As of 2016, India had over a thousand biotechnology start-ups.' According to Mr. Kapoor, the sector faces many challenges and they need to be addressed effectively and promptly - (1) India's research and development expenditure is quite low at 0.67% of GDP, not only compared to mature biotechnology economies such as Japan and the US (around 3%) but also in comparison to emerging economies like China (around 2%). (2) Specific to the biotech pharmaceutical sector, there are a few India-specific challenges with the country's IP regime. There are two main areas of contention for the industry in India's approach to intellectual property. The first issue lies in Section 3(d) of the Patents (Amendment) Act, 2005, which sets a higher standard for patentability than mandated by TRIPS. The industry argues that India's stricter standards for patents discourages innovation and dampens foreign investment. The second issue is that of compulsory licensing, which gives the government power to suspend a patent in times of health emergencies. Although India has used this option only once, the industry feels that such regulations keep investors clear of Indian markets. (3) Another challenge lies in the risk involved in the Valley of Death, that is, the risk of failure in the transition of innovative products and services from discovery to marketisation. Most of the early research funding, often provided by universities or the government, runs out before the marketisation phase, the funding for which is mostly provided by venture capitalists. It becomes difficult to attract further capital between these two stages because a developing technology may seem promising, but it is often too early to validate its commercial potential. This gap has a huge impact in commercialisation of innovative ideas. Read on...
The Economic Times:
Why biotechnology can be Indian economy's next success story
Author: Amit Kapoor
Mohammad Anas Wahaj | 06 apr 2019
India is a diverse economy with a large population size. The availability of correct data is a challenge. But there are reliable and free sources that contain datasets and data visualisations of the Indian economic scenario that can be utilized by data scientists - (1) NITI Aayog (Salary Expenditure): It is part of data.gov.in website. An expense or expenditure made to the employees for their work in terms of salary is known as Salary expenditure. It is an outflow of money from the Government for different services. The Data contains Actual, Pre-actual and Budgeted Expenditure for Salary expenditure, total expenditure, Revenue Expenditure, Salary expenditure as percentage of revenue expenditure (net of IP & Pension) and Salary expenditure as percentage of total expenditure of states & union territories. (2) Open Budgets India (openbudgetsindia.org): The portal provides budget information of different tiers of government in India (Union Budget, State Budgets, and Budgets of several Municipal Corporations across the country) in accessible and open (non-proprietary) formats. The four major features of the portal, as of now (in the beta version), are - Budget documents (i.e. the original PDF documents); Machine Readable Datasets (for those budget documents, where it was technically feasible to prepare machine readable datasets); Visualizations (or infographics) generated from the machine readable datasets; and Budget basics (for greater familiarity with budget concepts, processes and documents). The portal includes twelve broad sectors that represent Union and State Budget expenditure on both Economic Services and Social Services. It has 10.6k datasets from 509 budget sources. (3) Ministry Of Statistics (Indian Income Tax): It is part of data.gov.in website. The data refers to details on receipts under income tax from 2000-01 to 2011-12 in head of account such as Minor Head-Other Receipts, Minor Head-Surcharge, Penalties, Interest Recoveries, Primary Education Cess, Secondary and Higher Education Cess. (4) NITI Aayog (Manufacturing GDP): It is part of data.gov.in website. The data refers to information on contribution to manufacturing GDP in the 11th Five-Year Plan and employment in 2009-10 in different segments of the manufacturing sector. It projects employment in 2016-17 and 2024-25 in different segments of manufacturing in two different scenarios. (5) Ministry Of Finance (Statistical Appendix): It is part of the Economic Survey. Website is mofapp.nic.in:8080/economicsurvey. Includes Economic Survey 2017-18 and previous ones. The Statistical Appendix has following sections along with their sub-sections - National Income and Production; Budgetary Transactions; Employment; Monetary Trends; Prices; Balance of Payments; Foreign Trade; External Assistance; Human Development Indicators. Data files can be downloaded in Excel and PDF formats. (6) Ministry of Finance - Department Of Economic Affairs (Trade Balance Of India): It is part of data.gov.in website. The trade balance is the difference between the monetary value of exports and imports of output in an economy. It is one of the most important macroeconomic parameter. Data contains Exports, Imports and Trade Balance of India (in Rs Crore and US$ Million) from 1949-50. It also contains the percentage rate of change of exports as well as imports with respect to the previous year. The data has been provided by Department of Economic Affairs. (7) The World Bank (data.worldbank.org/country/india): Includes time series data on variety of topics like GDP, Population, School Enrolment, CO2 Emissions etc. DataBank is an analysis and visualization tool. (8) IMF DATA (data.imf.org): It provides access to macroeconomic and financial data. Asia and Pacific Regional Economic Outlook (APDREO) provides information on recent economic developments and prospects for countries in Asia and Pacific. India is included in this region. Read on...
Analytics India Magazine:
8 Free Resources On Indian Economy You Can Use For Your Data Science Projects
Author: Ram Sagar
Mohammad Anas Wahaj | 31 dec 2018
In India there are central government run healthcare institutions, public state run institutions and private medical colleges that provide modern healthcare education mainly the four year degree MBBS and after that post-graduate degrees of MS and MD. India also have a number of institutions that provide degrees in other healthcare systems like Ayurveda (BAMS), Unani-Greek (BUMS), Homoeopathy (BHMS), Naturopathy etc. Moreover, there are vocational training institutes that provide skills and courses to develop other medical staff like nurses, health assistants etc. There are also corporate run and other private medical colleges and universities and training institutes. India's healthcare facilities are generally concentrated in urban areas while rural areas are generally served by public hospitals and centers. Private clinics are also present in both rural and urban areas. They are generally run by a single doctor or doctor couple and provide basic healthcare. Diagnostic centers are spread all over due to technological advancements and compact and affordable equipments. Healthcare has major disparities between urban and rural areas when it comes to healthcare access. Healthcare has become one of India's largest sectors - both in terms of revenue and employment. The industry comprises public and private hospitals, pharmaceutical companies, pathology and diagnostics, medical devices industry, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The public sector constitutes primary health centers, central research centers and hospitals, state-run research institutes and hospitals etc. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier-I and tier-II cities. According to National Family Health Survey-3, the private medical sector remains the primary source of health care for 70% of households in urban areas and 63% of households in rural areas. Rise of technology is creating new business models in the healthcare industry. Healthcare through smart phones and fitness trackers is new trend. Information technology is automating and streamlining various healthcare processes. Big data is creating new ways of improving healthcare delivery. Startups in India are promising to provide best healthcare at affordable cost more effectively. Latest healthcare equipment is not only imported but also manufactured in India. Digital technologies are enhancing every aspect of healthcare. Technology solutions are able to modernise current medical practices, reduce costs, eliminate any duplication of tests as well as streamline processes and update medical records in real time. Modern technology has great potential to increase access of healthcare services in rural communities, especially the ones where there is serious shortage of doctors. India has demonstrated since long a commitment to offer comprehensive healthcare to all citizens. This has been reaffirmed in the 12th Five-year Plan, National Health Assurance Mission, and more recently through Ayushman Bharat Program. However, the challenges remain and this goal has not been achieved as of yet. There are two critical components of successful healthcare systems. One is the financial aspects whereby citizens are protected against any eventuality and don't get into penury due to health spending. Second is the provision and delivery of healthcare services. It is imperative to ensure that healthcare infrastructure is sufficiently equipped to provide effective healthcare when needed by its citizens. Technology, public-private partnerships, access and affordability are the critical component in the future of India's healthcare. Better healthcare with policy, financial and physical framework will bring long-term benefits to the nation. Develop effective mechanisms to improve general health, and disease prevention strategies through campaigns, advocacy etc. To make India's citizens more aware about their health, inculcate better sanitization and cleanliness habits will help to improve overall health of India. Prevention before cure becomes the key for the country with the size and demographic profile like India. Health aware citizens, trained, sensitive and caring medical staff, cutting edge technologies and modern infrastructure, are the golden elements for a healthy future of India. Read on...
Mohammad Anas Wahaj | 24 nov 2018
There are many sides to India's agriculture story. But, what we often hear is the sad one of farmer poverty and suicides. Although many challenges remain including that of humanitarian crises of farmer suicides, but Indian agriculture is going through many positive transformations. According to recent data, tractors sales ended the last fiscal year with a growth of 22% due to good monsoon and strong rural demand. Improvements in road connectivity has boosted tractor sales even in the remote parts of Jharkhand, Telangana, Haryana and other states. The Bloomberg Indian rural economy indices provide a steady upward movement in rural output growth. Two-wheeler sales, a positive indicator of rural growth, have also picked up in recent months. Moreover, there are other visible innovative aspects of Indian agriculture that are good news. India is one of the biggest agrarian economies and even though it lacks in productivity but with 30% of world's organic farmers it is the largest organic farming country. People like Subhash Palekar, who preaches 'zero budget spiritual farming', or farming using only natural and low-cost fertilisers and techniques, are bringing the much needed change. His work has had an impact on 400000 farmers in Maharashtra and adjoining states. Top Indian restaurants and chefs now promote black rice and brown rice grown in India. Customers are also willing to pay a premium for organic produce, thus encouraging cropping up of startups and entrepreneurial ventures in organic farming space. Sikkim has recetly won a prestigious United Nations award for its status as an organic food-only destination. There are also innovations happening in dairy sector with startups putting the certain regions into limelight. India remains as one of the top milk producing countries in the world. Indian agri-tech startups have grown to such an extent that they now have their own exlusive expo that promotes diverse innovations like new pumping techniques, soil testing and management systems, and raw food supply chain breakthroughs. Read on...
How to join the dots of growth in Indian agriculture
Author: Hindol Sengupta
Mohammad Anas Wahaj | 15 sep 2018
India's large size with huge population (1.25 billion), substantial part of which resides in rural and underdeveloped regions, brings both challenges and opportunities for implementing healthcare policies and initiatives, both public and private. Over the years ineffective implementation of such initiatives at various levels, has created lopsided infrastructure and uneven development in healthcare. Indian health system also lacks effective payment mechanism and has a high out-of-pocket expenditure (roughly 70%). Adverse health events (health shocks) have considerable impact on India's overall poverty figures, adding about seven percentage points. Health is associated with the overall wellness of the citizens. Good health reflects on the productivity and growth of the nation. More so in the case of India as substantial population is young. India has more than 50% (about 662 million) of its population below the age of 25 and more than 65% below the age of 35. By 2020, the average age of India's population is expected to be 29 years. Aging of this large population will happen at the same time. Having adequate infrastructure is key to avoid a massive health catastrophe for this elderly population in future. Health is also a key issue in the public policy sphere. In the public policy context healthcare issues are often related to accessibility, affordability, socio-economic disparities, healthcare delivery mechanisms, illness and diseases and their impact on society etc. India have a conceptual universal health care system run by the constituent states and union territories. The biggest challenge is to make it accessible and affordable for the overall population. Read on...
Mohammad Anas Wahaj | 26 aug 2018
According to meteorologists, the recent flooding in southwestern state of Kerala in India has occured due to two-and-a-half times the normal monsoon rains. Climate scientists caution that if the global warming continues unabated more unusual weather events will happen. Roxy Mathew Koll, a climate scientist at the Indian Institute of Tropical Meteorology, says, 'It is difficult to attribute any single extreme weather event - such as the Kerala flooding - to climate change. At the same time, our recent research shows a three-fold increase in widespread extreme rains during 1950-2017, leading to large-scale flooding.' According to the study published in Nature last year that Mr. Koll co-authored, flooding caused by heavy monsoons rainfall claimed 69000 lives and left 17 million people without homes over the same period across India. Kira Vinke, a scientist at the Potsdam Institute for Climate Impact Research (Germany), says, 'These floods that we are seeing in Kerala right now are basically in line with climate projections. If we continue with current levels of emissions - which is not unlikely - we will have unmanageable risks.' Mr. Koll explains the weather patterns behind the excessive rains, 'Rapid warming in the Arabian Sea and nearby landmass causes monsoon winds to fluctuate and intensify for short spans of three-to-four days. During those periods, moisture from the Arabian Sea is dumped inland.' Elena Surovyatkina, a professor at the Russian Academy of Sciences and monsoon expert, says, 'Over the last decade, due to climate change, the overheating of landmass leads to the intensification of monsoon rainfalls in central and southern India.' According to a World Bank report titled 'South Asia's Hotspots', 'On current trends, India's average annual temperatures are set to rise 1.5 degree Celsius to 3 degree Celsius compared to that benchmark by mid-century. If no corrective measures are taken, changing rainfall patterns and rising temperatures will cost India 2.8% of its GDP and will drag down living standards of half its population by 2050.' Ms. Vinke says, 'What we will see with climate change in India is that the wet season is going to be wetter and the dry season drier. Already we are observing that the monsoon is becoming harder to predict with traditional methods.' A recent research predicted, 'If man-made carbon emissions continue unabated, some regions in northeast India could literally become unlivable by the end of the century due to a deadly combination of heat and humidity during heatwaves.' Read on...
The Economic Times:
India's devastating rains match climate change forecasts
Mohammad Anas Wahaj | 28 jul 2018
India has to give special emphasis to agriculture to ensure food security for its large population. Recent report, 'Agricultural Policies in India' (Authors: Ashoka Gulati, Infosys chair professor for agriculture at ICRIER; Carmen Cahill, Deputy Director for trade and agriculture at OECD), jointly developed by Organisation for Economic Co-operation and Development (OECD) and Indian Council for Research on International Economic Relations (ICRIER), provides outcomes of the research conducted for over two years to map and measure the nature of agricultural policies in India and how they have impacted producers and consumers. The report includes key policy indicators like the producer support estimates (PSEs) and consumer support estimates (CSEs). According to the authors of the report, 'The methodology adopted is a standard one that OECD has applied to measure PSEs and CSEs for 51 countries over the last 30 years. In the case of PSEs, it basically captures the impact of various policies on two components: (a) the output prices that producers receive, benchmarked against global prices of comparable products; and (b) the various input subsidies that farmers receive through budgetary allocations by the Centre and states. The two are combined to see if farmers receive positive support (PSE), or negative, as a percentage of gross farm receipts. A positive PSE (%) means that policies have helped producers receive higher revenues than would have been the case otherwise, and a negative PSE (%) implies lower revenues for farmers (a sort of implicit tax) due to the set of policies adopted.' The report found India's PSE, on average, during 2014-15 to 2016-17 was -6% of farm receipts. Contrary to this most other countries have positive PSEs. Overall, PSE (%) was negative to the tune of 14%, on average, over the entire period from 2000-01 to 2016-17, indicating that, despite positive input subsidies, farmers in India received 14% less revenue due to restrictive trade and marketing policies. To incentivise farmers to raise productivity, build an efficient and sustainable agriculture that augments farmers' incomes and foster rural growth and jobs all along the value chain, authors suggest - (1) Change policies to 'get the markets right' by reforming domestic marketing regulations (ECA and APMC), promoting a competitive national market and upgrading marketing infrastructure. Also review restrictive export policies for agri-products. (2) The report recongnizes concerns of the policymakers to protect consumers from price rise. But, it argues for switching to an income policy approach through a direct benefit transfer (DBT) targeted to the vulnerable sections of the population. (3) Indian agriculture and farmers would be much better off if input subsidies are contained and gradually reduced, and the equivalent savings are channelled simultaneously towards higher investments in agri-R&D, extension, building rural infrastructure for better markets and agri-value chains, as also on better water management to deal with climate change. (4) A greater degree of coordination is required between the Centre and the States, and also across various ministries, for a more holistic approach towards reforming agriculture. Read on...
From plate to plough: India must get its agri-markets right
Authors: Ashoka Gulati, Carmel Cahill
Mohammad Anas Wahaj | 22 jun 2018
According to Korn Ferry's 'The Salary Surge' report, India would be the only economy that will not face an upward revision of wages by 2030, as it has a talent surplus, bucking the global trend of a talent crunch. For organizations around the world lack of highly skilled talent supply will drive up salaries for the most in-demand workers and is expected to add more than US$ 2.5 trillion in annual labour costs by 2030. The Global Talent Crunch analysed global demand for labour at three key milestones, 2020, 2025 and 2030, in 20 markets, including in India, across three sectors, financial and business services, technology, media and telecommunications (TMT) and manufacturing. Wage premiums by 2030 - US (US$ 531 billion); Germany (US$ 176 billion); Japan (US$ 468 billion); China (US$ 342 billion) Asia Pacific (US$ 1 trillion); Singapore and Hong Kong (10% of 2017 GDP). Wage premium per worker per year by 2030 - Asia Pacific (Average US$ 14710); Hong Kong (US$ 40539); Singapore (US$ 29065); Australia (US$ 28625). Dhritiman Chakrabarti, Head of rewards and benefits for the APAC region at Korn Ferry, says, 'The new era of work is one of scarcity in abundance, there are plenty of people, but not enough with the skills their organisations will need to survive. While overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone.' Manufacturing, one of the sector that is a critical driver of growth for emerging economies, may be stalled by the huge impact of the salary surge. Read on...
The Economic Times:
India to be lone economy facing suppressed wages by 2030: Study
Mohammad Anas Wahaj | 31 may 2018
According to British Council's 2016 report, 'The State of Social Enterprise in Bangladesh, Ghana, India and Pakistan', there are more than two million social enterprises in India with 24% of them led by women. India is one of the fastest growing economy and it needs more social entrepreneurs to tackle socio-economic problems. Women have to enhance their participation. But, existing stereotypes alongwith lack of investor confidence are major hurdles in the way. According to the World Bank, labour force participation rate for women in India has fallen from 37% in 2004-05 to 27.2% in 2017, which is quite low in comparison to developed nations. Increasing participation of women in workforce is vital for balanced growth of the country. Archana Raj, Team Leader at Save The Children, says 'Despite these low indicators, it is worth mentioning that there are new generation women who have broken the barriers of societal norms and regressive mindsets to pave way to the new world of entrepreneurship. Over the past few years, it has been observed that more women are choosing this as a career over other options, making a mark in the start-up ecosystem. Nonetheless, the aim must be to reach higher, which can help the rest of the women of our country to rise beyond the barriers and choose for themselves.' Jamie Cid, a social entrepreneur and founder of MobiHires, says, 'I think that there is a great opportunity for women social entrepreneurs in India, especially mothers returning to the workplace, who develop products and services based on their experience and solve problems in their community. With platforms like Sheroes, Reboot, SheThePeople and Lean In India initiatives that support and invest in women social entrepreneurs, this is the right time to be one.' In one of the blog posts of World Bank, Monique Villa, CEO of Thomson Reuters Foundation and founder of TrustLaw and Trust Women, gives the example of Ajaita Shah who works in rural regions of India. Shah's organisation, Frontier Markets, sells and distributes products to rural households. The organisation calls itself a 'for-profit business with a social mission'. According to the Thomson Reuters Foundation, India ranks 35th among countries that are the best for women social entrepreneurs, with the US, Canada and the UK occupying the top three positions. Manju Yagnik, vice chairperson of Nahar Group and member of Indian Merchant Chamber, says, 'I personally do not believe in male-female classifications. I do not think capabilities and talent can be differentiated as per gender. Today's women do not seek sympathy. They want equal opportunities when it comes to decision-making in financial capabilities, which is still male-dominant. Thankfully, with the modern society promoting and striving for gender equality, the position of women is improving year after year. Women entrepreneurs in India are bringing revolution and growth in the public and private sectors. With the help of government initiatives, they will grow further.' Manisha Gupta, founder and director of Start Up!, says, 'Regardless of whether a woman is a social or business entrepreneur, she has to negotiate through an ecosystem that has been structured for men to succeed. Not only do we need more women social entrepreneurs but also an ecosystem where there are more women leaders at every level. We need them as coaches, investors, in finance, as leading incubators, etc to break the template.' Citing challenges women face, Ms. Raj comments, 'Pressures of social norms and societal biases force women to give up the job while tough competitive market further make their work challenging.' Ms. Yagnik feels the need for more women entrepreneurs in India. She says, 'Social entrepreneurship might be a great opportunity for Indian women professionals to break through the glass ceiling that typically exists in traditional corporate life.' Ms. Cid suggests social entrepreneurs to stay positive and focus on the bigger purpose and stay passionate about their goal. Explaining capabilities of women entrepreneurs, Ms. Gupta says, 'I always say that women social entrepreneurs use the 3Rs - resilience, relationship and resistance – to build and grow their ventures. They are masters of resilience, I have seen many women without any resources, standing on their own and building a business in rural regions. They also demonstrate strong capabilities of building connections and meaningful relationships with stakeholders which takes them far.' Read on...
Mohammad Anas Wahaj | 29 apr 2018
According to the report by Indian Council for Research on International Economic Relations (ICRIER), 'Anatomy of an Internet Blackout: Measuring the Economic Impact of Internet Shutdowns in India', 12615 hours of mobile Internet shutdowns in India cost the economy approximately US$ 2.37 billion and 3700 hours of mobile and fixed line Internet shutdowns in India resulted in a loss of approximately US$ 678.4 million during the period 2012 to 2017. Most affected by the shutdowns were e-commerce businesses and online freelancers operating from small towns. Tourism is another sector affected. Rajat Kathuria, Director & CEO of ICRIER, says, 'The objective of the study is not to pronounce on the efficacy of a state decision on an Internet blackout, rather to estimate the economic costs associated with the event. However, policy makers would be well advised to consider these costs in the final decision on a shutdown. If digital use were to proliferate as envisaged under the Digital India programme, the magnitude of loss could increase in the future.' Read on...
Mohammad Anas Wahaj | 22 apr 2018
According to a report by The Times of India, engineers in India are now showing more interest in the automobile industry as compared to the usual IT industry, signalling a boom time for the more traditional manufacturing sector. Tightening of US visa rules, streamlining of staff by big IT companies and increasing importance of big data and artificial intelligence in automobile industry are some factors promoting this shift. NASSCOM says that IT sector will see single-digit growth for the third-consecutive year and jobless growth for the second year. Gopal Mahadevan, CFO of Ashok Leyland, says, 'Earlier mechanical engineers were going to the IT industry but now they're coming back. There appears a reverse brain drain happening and suddenly we're getting lots of applications from this segment, much more than in the last 3 years.' According to the Naukri Jobspeak data for March 2018, there has been significant hiring growth for the auto industry. The sector has witnessed a 33% growth in March 2018 compared to March 2017. Rajan Wadhera, President of Automotive Division at Mahindra & Mahindra, says, 'The IT allure is beginning to wear off as that segment has almost reached a saturation point. The pay growth is also not as good as it once was. So the attraction to join the auto industry is back.' Thammaiah B. N., MD of Kelly Services, says, 'Product specialists are in demand and their experience levels are in the tune of 8 to 10 years or higher. The auto industry itself has stepped up its hiring by 30% and IT has been a major contributor.' Read on...
The Economic Times:
Automobile industry is the new IT for India's engineers
Mohammad Anas Wahaj | 11 jan 2018
India's growth trajectory can slow down if firms are not able to grow and banks are not able to lend. Restructuring can be an immediate policy solution for the twin balance-sheet problem. But, for the long-term growth and job creation, the causes of financial misallocation have to be deeply considered and mitigated. Growth needs more efficient firms to produce more output and use more factors of production, which includes ease of access to bank loans. Contrary to this in India, a case of financial misallocation is a common phenonmenon, where less efficient firms get more bank loans reducing the ability of more efficient firms to grow and scale up. The cause for India's financial misallocation is distortion in the land market, as less efficient firms can access more land consequently enhancing their ability to get loans. Land provides strong collateral to access bank loans. Financial misallocation is a bigger problem in the manufacturing sector, that is more land intensive, as compared to services industry. World Bank lead economist, Ejaz Ghani, alongwith Gilles Duranton, Arti Goswami Grover and William Robert Kerr, examined plant-level data on millions of formal and informal enterprises, in both the manufacturing and services sectors, in more than 600 districts in India and provided important insights into the geographic and industry distributions of financial and land misallocation in their World Bank research report, 'Effects Of Land Misallocation On Capital Allocations In India'. According to Mr. Ghani, 'Most bank loans in the manufacturing sector are taken up by large firms in the organized sector. The small firms in the unorganized sector, which account for nearly 80% of jobs, and about half of the value of land and buildings held in the manufacturing sector, pull in a very small share of bank loans. The value of financial loans reported in the informal sector is barely 2-6% of the value of total bank loans reported in the manufacturing sector.' Mr. Ghani explains, 'We computed an index of misallocation in manufacturing and services, and the organized and unorganized sectors, in the districts. The indices of misallocation for output, value added, and factors of production were computed individually for financial loans, land and labour. India is one of the most land-scarce countries in the world. Land and financial misallocation trumps labour misallocation. The former appears to be at the root of much of the misallocation of output in the manufacturing sector...poorly functioning land and financial markets explain why India has so few start-ups; entrants are constrained by financial misallocation, and incumbents don't grow in the manufacturing sector.' Mr. Ghani recommends, 'Policy makers need to pay more attention to addressing the underlying causes of financial misallocation. This would involve removing land market distortions, better land-use regulations, and more efficient taxation of properties. Faster growth requires marching ahead with even stronger policy reforms to promote competition and innovation, and enabling more efficient firms to grow faster.' Read on...
Mohammad Anas Wahaj | 19 dec 2017
Family businesses are a substantial part of India's economic landscape with two-thirds of the listed corporates (with market cap above US$ 50 million) and contributing 79% to GDP. Presently, survival rate of family businesses from first to second generation is 30%, falling sharply to 12% and then just 3% after that. Family businesses have their own set of challenges and have to continuously evolve and stay competitive. According to Vishesh C. Chandiok of Grant Thornton India, 'Typically, family businesses go through three stages over the first three generations - entrepreneurship, sibling partnership and cousins confederation. Complexity of issues at each stage changes exponentially...Technology is disrupting old family business as also giving an opportunity to the family to rapidly build or own new-age business. It's more of an opportunity than a threat for Indian family business, if they can have a well organised family office that is separate from the main business.' Pranav Sayta of Ernst & Young says, 'Often, emotional ties come in the way of mature decision-making when handing over reins, and that impacts transition after the first generation is no more.' But it is not always the case as many owners have successfully diversified their businesses and others have brought in professional management to take them to further growth and progress. Nitin Atroley of KPMG says, 'A big challenge is maintaining the same momentum and scale.' Nikhil Prasad Ojha of Bain & Company says, 'It's important to imbibe the learnings of the founders' mentality to thrive.' While the nature of businesses is changing with more technology use, it's important for GeNext to know their 'roles and goals', says Mr. Chandiok. Mr. Atroley points out, 'This era calls for a higher risk-taking ability to deal with continuous disruption that industries are going through.' Mr. Ojha comments, 'The central challenge for the next generation is to become 'scale insurgent' in their industry. They must simultaneously capture the benefits of size and retain a strong sense of founders' mentality (that is, insurgency, frontline obsession and owner mindset).' Mr. Sayta believes family businesses have a much longer term vision compared to professionally-run businesses, which are under tremendous pressure to perform and deliver in the short term. He adds, 'There will definitely be room for family businesses, provided they adapt to changing times.' Read on...
The Economic Times:
How family-run businesses are evolving amid innovation and the startup invasion
Author: Shelley Singh
Mohammad Anas Wahaj | 12 nov 2017
Thriving entrepreneurial ecosystem drives business growth and economic development. India is steadily transforming itself into a major hub of tech entrepreneurship. According to Raman Roy, Chairman of NASSCOM and CEO of Quatro, 'About 1000 tech start-ups were registered this year (2017), taking their total to 5200 and making India the world's third largest start-up ecosystem.' The report 'Indian Start-up Ecosystem - Traversing the maturity cycle', compiled jointly by NASSCOM and Zinnov, was recently released. Major trends include - India is witnessing a rapid rise in the B2B tech start-up landscape, focused on verticals like healthtech, fintech, and ecommerce/aggregators; Bengaluru, Delhi/NCR and Mumbai retained their position as the key start-up hubs, with 20% of the start-ups emerging from tier-2 and tier-3 cities across the country. Some highlights of the report - 40% of the start-ups are in the B2B segment. Its share in tech start-up funding is 30%; Fin-tech start-up base is about 360, indicating 31% annual growth, with US$ 200 million funding in the first half of this year, recording a 135% annual growth; Health-based technology start-ups are 320, with 28% annual growth and attracted US$ 160 million funding in the April-September period, which is an increase of 129% in the same period of 2016. Mr. Roy says, 'With 60% start-ups, the B2C segment is focused on creating innovative business models and taking the vertical approach, securing about 70% funding in the year's first half.' R. Chandrashekhar, NASSCOM president and former Telecom Secretary, observing that the ecosystem is driven by young, diverse and inclusive entrepreneurs, says that the landscape is leading to focused domain solutions in verticals like healthcare, agriculture and education. He comments, 'We will continue its drive towards catalysing tech start-ups, build category leaders and support start-ups to create for India.' Read on...
Mohammad Anas Wahaj | 28 aug 2017
Industry experts are bullish on India's agriculture and suggest that it has potential to double farmer's income and grow exports to US$ 100 billion by 2022. Rajju Shroff, President of Crop Care Federation of India (CCFI) and MD of United Phosphorus Ltd, says, 'Globally, exports in agricultural products is over US$ 1500 billion annually as per the latest data from WTO and India's share is less than US$ 35 billion at present.' According to the latest report by Centre for Environment and Agriculture (Centegro) and Tata Strategic Management Group, released by Union Minister Nitin Gadkari, 'Agriculture's contribution to India's economy extends beyond the rural economy and encompasses many activities in manufacturing and services sector. Export surplus from the country's agricultural trade is higher than the corresponding figure achieved by the manufacturing sector.' Report urges the government to launch 'Grow In India' campaign to achieve gains in agri-exports with a single authority to monitor India's international agricultural trade. Report suggests that organic farming is not sustainable because of low yield and need for huge amount of unavailable manure. Mr. Shroff explains the dynamics of India's agricultural growth, 'This is all due to small and marginal farmers who deploy family labour and engage in intensive multi cropping all year round. They also manage livestock & poultry efficiently using agriculture waste as animal feed and to produce manure.' Read on...
The Economic Times:
Agriculture exports may grow to $100 billion by 2022 - Experts
Mohammad Anas Wahaj | 26 aug 2017
Agriculture is a critical component of the economy and farmers are the nation's backbone. India's 2017 food-grains production is around 273.83 million metric tonne. World Bank predicts Indian food-grain production to reach 280.6 million metric tonne by the year 2020-21. Following are key areas that India's agriculture should pursue for growth and development - (1) Demand Strength: Large population is key driver of agrarian demand growth; Rise in urban and rural income; Increase export demand particularly from Middle-East and Central Asia. (2) Attractive Opportunities: Hybrid seeds; Chemical Fertilizers; Organic Fertilizers. (3) Competitive Advantages: High proportion of over 157 million hectares of agrarian land; Leads in production of jute, pulses, milk, buffalo meat export; Second largest producer of wheat and paddy. (4) Government Policies: Paramparagat Krishi Vikas Yojana has led to development of various organic clusters with very low chemical dependency; Pradhan Mantri Gram Sinchai Yojana has also played a major role to irrigate the agrarian lands; Step towards unified agriculture market; 100% FDI under automatic route for development of seeds; Reduction in wheat import duty from 10% to almost zero and capping import limits to two lakh tonnes by importers in pulses. (5) Development Of Rabi And Kharif Seasons: Kharif season (Summer - April to September) mainly for paddy and Rabi season (Winter - October to March) for wheat production, have registered good growth. In March 2017, almost 64.5 million hectares of agricultural land were sown, out of which over 19 million hectares land was insured during Rabi season. More than 16.4 million farmers were benefitted by the Pradhan Mantri Fasal Bima Yojna. Read on...
Mohammad Anas Wahaj | 13 aug 2017
According to the Economic Survey 2016-17 (Vol. II), employment in India poses a great challenge in terms of its structure, with it being dominated by informal, unorganised and seasonal workers. It highlighted the deceleration in hiring being faced by the IT-BPM (Business Process Management) sector. It said, 'The IT-BPM industry is also feeling the pinch of the global slowdown and global political uncertainties as clients go slow on their decision-making and investment processes.' The survey cited McKinsey report, saying that nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years and the bigger challenge ahead for the industry will be to retrain 50-60% of the workforce with a significant shift in technologies. The survey also noted that the growth in digital tech like cloud-based services is happening at a much faster pace and the companies have to learn new technologies and reskill. It quotes 2016 World Bank report that said, automation threatens 69% of the jobs in India, while it threatens 77% in China. The survey added that skilled labour force is essential to meet diversified demands of a growing economy, to tap the benefit of demographic dividend. According to India Skill Report 2016, the present demographic advantage of India is predicted to last only till 2040. Read on...
Adoption of new technologies, reskilling key for job growth
Mohammad Anas Wahaj | 08 aug 2017
According to Prof. Pritam Singh, Oxford Brookes University (UK), BRICS nations will lead the global economy and play vital role in spatial shift of the global capitalist economy. While speaking at expert session on 'Global Economic and Environment Crisis Faced by BRICS Economies' at Chandigarh University, Prof. Singh said, '...By 2050, if the Indian economy continues to maintain the current growth pace (GDP growth 7%), it will be the dominant global supplier of services while China would dominate the global manufacturing industry...' Read on...
Mohammad Anas Wahaj | 04 may 2017
India's demographic dividend can only achieve full potential if its young population continues to update their skills, the private sector continues to upgrade its processes, technologies and management practices to remain profitable and growth oriented, and government continues to improve infrastructure, ease regulations to do business, and attract internal and foreign funds as investments in various industries and businesses. Approximately half of India's 1.2 billion people are under the age of 26. By 2020, around 64% of India's population will be in the working age group of 15-64 years, and it is forecast to be the youngest country in the world, with a median age of 29. Moreover, India is a US$ 2 trillion economy, growing at approximately 7% year on year. It has a strong domestic focus with approximately 75% of the GDP generated on domestic consumption. India's demographic dividend will work in favour of the Indian economy when its young, educated and healthy population, is trained, skilled and gainfully employed, giving rise to an upwardly mobile consumer class. Read on...
Mohammad Anas Wahaj | 10 mar 2017
According to the Organisation of Economic Cooperation and Development (OECD) report, 'India Economic Survey 2017', although India's economy continues to grow (7% in current fiscal year), but the rate of employment has declined and it lags most other countries in creating quality jobs. Over 30% of youth aged 15-29 in India are Not in Employment, Education or Training (NEETs). This is more than double the OECD average and almost three times that of China. Isabelle Joumard, senior economist at OECD, says, 'NEETs include all youth left outside paid employment and formal education and training systems. They are NEET because there are not enough quality jobs being created in the system and because they have little incentives or face too high constraints to be in the education and training systems.' OECD points out complexity and strictness of labor laws and restrictive employment protection legislation compared with other emerging economies, as some of the several factors responsible for India's poor performance. Ms. Joumard adds, 'Thus, corporates in India tend to rely more on temporary contract labour, stay small or substitute labour for capital to avoid strict labour laws. Apart from that, corporate income tax has created a giant bias against labour-intensive activities.' Read on...
Mohammad Anas Wahaj | 31 jan 2017
Economists from Deloitte, Richa Gupta and Rishi Shah, explain the emerging risks that India's economy faces - (1) Protectionist Trade Polices: G20s in 2016 took restrictive trade measures. Such policies create uncertainties as they are meant to provide immediate stimulus and therefore tend to be more variable and less consistent. In addition India, large importer of oil, also get affected by OPEC cuts and hardening prices. (2) Global Growth Faltering: Global growth is expected to pick up in current fiscal on a premise of US stability and higher growth, stable China and rebound in some emerging economies. China's policy of expected Yuan devaluation would affect India as it would mean depreciation of the domestic currency to maintain competitiveness. (3) Brexit and its Implications: Uncertainties and possibility of 'Hard Brexit' will impact India due to linkages in financial markets as adverse events would cause some outflow of funds. (4) Effect of Demonetisation: Expected 7.1% growth for FY17 would further get affected due to demonitisation that resulted in consumer's inability and hesitancy to spend. This will lead to short-term vicious cycle of lower expected consumption feeding into lower investment expectation. (5) Disruption on GST: Disruptions would emerge as the numerous small businesses learn to adapt to not only a new taxation system but also to an incremental digital framework for compliance with the new regime. Read on...
The Economic Times:
Five risks that may hamper India's economic growth
Authors: Richa Gupta, Rishi Shah
Mohammad Anas Wahaj | 04 jan 2017
Marc Faber, editor and publisher of 'The Gloom, Boom & Doom Report', while speaking on Indian economy, says, 'It does not matter whether India grows at 5% per annum or 7% per annum but if you look at the next 10 years or so, you could easily expect an economy that on an average grows anywhere between 4% and 7% per annum. That is a very high growth rate compared to practically no growth expected from the US or in Europe.' On sectors that would be attractive for investments, he comments, 'In 2017, some commodity related stocks including oil and gas will be reasonably attractive. What I have noticed to be the most attractive sectors are plantation companies, agricultural companies and fertiliser companies. They have significant potential on the upside because agricultural commodity prices have been very weak since 2011. These agricultural commodity prices will pace them out and start to increase. The agricultural sector, fertilisers are relatively attractive.' Read on...
The Economic Times:
Expect India to grow between 4%-7% in next 10 years: Marc Faber
Author: Tanvir Gill
Mohammad Anas Wahaj | 22 nov 2016
Opinions on India's demonetization policy vary from masterstroke to hasty and unplanned, and a lot of uncertainty in between. Some experts consider it as a 'short-term pain to long-term gain' scenario. Report from CRISIL, a credit rating agency, analyzes the impact of demonetization policy on the overall economy, both now and beyond - (1) Government revenues to increase, as people deposit more cash in banks and government gets opportunity to tax. (2) Fiscal deficit to narrow in medium to long-term. (3) Public investments to rise as a result of higher tax collection. More spending in infrastructure is expected. (4) Economy to grow in medium to long-term, while there is expected fall in GDP in short-term. In future, government spending will generate employment and income. (5) Inflation to fall near-term but in long-term minimal impact. (6) Increase in liquidity in banking system, an opportunity for banks to profit through lending. (7) Keeps the interest rates lower in long-term due to government's lower fiscal deficit. (8) Demand for gold will fall in short-term due to cash crunch. But in long-term gold hoarding will increase leading more gold imports and higher import bill which means a larger Current Account Deficit (CAD). (9) Digital payments will increase, enhancing the trend toward cashless economy. (10) Sectors affected include real estate, jewellery and cement, as most transactions are in cash. Luxury auto sector will also get impacted. Organized retail sector will benefit due to digital transations. Read on...
Mohammad Anas Wahaj | 29 aug 2016
Machine tools industry is critical for the success of 'Make in India' and 'Skill India' initiatives. V. Anbu, Director General of the Indian Machine Tool Manufacturers' Association (IMTMA), explains, 'Machine tools are considered a strategic industry segment. It is part and parcel of manufacturing, particularly discreet manufacturing segments such as automobiles, defence, railways, plastic machinery, medical electronics and white goods.' GLOBAL SCENARIO: 'Japan and Germany are strong in production and degree of sophistication/technology level. Global production of machine tools is worth around US$ 84 billion. In volume, China leads the pack; in technological maturity, Germany and Japan are at the same level. China's machine tool production is about US$ 24 billion.' INDIA'S MACHINE TOOL INDUSTRY: 'The Indian machine tool industry will touch US$ 1 billion in 2016. We are looking at getting into high-end manufacturing in sectors like railways, defence and aerospace. Automotive will become bigger, while medical electronics is also expected to grow...India is the 10th biggest market for machine tools. Of the market size of Rs 10,300 crore, domestic production is worth Rs 4,500 crore, which is about 42%. India has limited capability when it comes to high-accuracy machine tools.' INDIAN GOVERNMENT'S ROLE: 'We need much faster, single-window clearances. We are also looking forward to results on GST, policy on land acquisition, and ease of doing business...The government must create a financial mechanism to allow Indian companies to acquire firms abroad.' ISSUES WITH INDIA'S MACHINE TOOL INDUSTRY: 'Technology-gap is one major issue. To have an efficient model or mechanism for companies, they need to improve their own technology. Supply-chain is another issue. Payments and taxation and procurement are the other issues.' SKILL GAPS AND ROLE OF IMTMA: 'We are looking at bringing depth to manufacturing which will help the end-user. IMTMA conducts about 150 training programmes all year. Over 35 companies have lent their support to this initiative...Broad domains that are covered include productivity, design, maintenance, and automation. Most programmes are on metal cutting. We have deliberately added a few topics on metal forming too.' Read on...
Mohammad Anas Wahaj | 23 aug 2016
According to the latest OPPI-KPMG's 'Report on Healthcare Access Initiatives', India spends less on healthcare than most other middle income countries. It's total healthcare expenditure of about 4.1% of GDP is among the lowest in the world. The report highlights the following main gaps in India's healthcare - POOR HEALTHCARE INDICES: Life expectancy (68 years in 2015) one of the lowest among Brazil, Russia, India and China (BRIC); Infant Mortality Rate (IMR) of 38/1,000 live births and Maternal Mortality Rate (MMR) of 174/100,000 live births in 2015, highest among peer group. GROWING NON-COMMUNICABLE DISEASES (NCD) BURDEN: NCDs account for nearly 60% of deaths annually; Indian economy set to lose US$ 4.58 trillion by 2030 due to NCDs. INADEQUATE HEALTHCARE INFRASTRUCTURE: Number of hospital beds of 0.9 per 1,000 population is lowest among BRIC; 75% of dispensaries and 60% of hospitals are in the urban areas. NEED FOR MORE TRAINED HUMAN RESOURCES: Lowest number of physicians per 10,000 population among BRIC; 80% of doctors are in the urban areas serving only 28% of the population. POOR AVAILABILITY: In rural India, only 37% of people have access to In-Patient Department (IPD) facilities within a 5km distance, and only 68% have access to an Out-Patient Department (OPD). BURDENED CARE: Nearly 63 million people are in debt due to health expenditure; Nearly 1/3 of population is driven below the poverty line due to health expenses. INADEQUATE GOVERNMENT SUPPORT: The government funds only 1/3 of health expenditure; Gross Domestic Product (GDP) spend on healthcare (4.1%) lowest among BRIC. POOR INSURANCE COVERAGE: Nearly 75% of population uncovered. Out-of-pocket (OOP) contributes close to 86% of private and 60% of overall healthcare expenditure. Report suggests a patient-centric approach to tackle India's healthcare challenges and points out that awareness and education can strengthen the four pillars (4As) of healthcare - Availability; Affordability; Accessibility; Acceptability. Utkarsh Palnitkar, Partner at KPMG, says, '...Only a long-term, proactive strategy with education and awareness at its centre, involving all stakeholders, i.e., healthcare providers, insurance companies and healthcare and pharmaceutical companies, can achieve the desired vision of a healthy country.' Shailesh Ayyangar, President of Organisation of Pharmaceutical Producers of India (OPPI), says, 'Universal Healthcare is a social priority...India's healthcare strategy requires a holistic approach and a critical evaluation of our existing systems. We need sustainable policy solutions to address healthcare financing, infrastructure and human resource challenges.' Read on...
The Economic Times:
India's total healthcare expenditure at about 4.1% of GDP, among the lowest in the world - OPPI-KPMG report
Mohammad Anas Wahaj | 14 aug 2016
According to a research paper by McKinsey Global Institute titled, 'India's Ascent: Five Opportunities for Growth and Transformation' [Authors: Noshir Kaka; Anu Madgavkar; Rajat Gupta; Shirish Sankhe; Jonathan Woetzel; Jacques Bughin; Ashwin Hasyagar; Shishir Gupta], there are five areas that could have a substantial impact on India's economy - (1) From poverty to empowerment: Acceptable living standards for all (2) Sustainable urbanization: Building India's growth engines (3) Manufacturing for India, in India (4) Riding the digital wave: Harnessing technology for India's growth (5) Unlocking the potential of India's women. But the paper suggests that this will require leaders at all levels - local, state and national - to adopt new approaches to governance and provision of services. Moreover, the government agencies must ramp up their capabilities to meet the enormous challenge. It's been 25 years since the economic liberalization process got started and India has been able to improve living standards of its citizens, but there is lot more to be done. The report explains, 'It (India) offers attractive long-term potential, powered largely by a consuming class that we expect will more than triple, to 89 million households, by 2025. The challenge for Indian policy makers is to manage growth in such a way that it creates the basis for sustainable economic performance. India's transformation into a global economic force has yet to fully benefit all Indians.' It further says, 'To achieve its full potential, the country will need to address deprivation using a new set of parameters that address quality of life and access to basic services. This is certainly within India's capacity, but it will require policy makers to promote an agenda that emphasizes job creation, growth-oriented investment, farm-sector productivity, and innovative social programmes so that the benefits actually reach the people who need them.' Read on...
Five areas that could have an impact on India's economy
Author: Pretika Khanna
Mohammad Anas Wahaj | 18 jul 2016
According to the latest CII (Confederation of Indian Industry) survey of 200 Indian firms of varying sizes, the Business Confidence Index rose to 57.2 points in April-June of FY17, compared to 54.1 in the previous quarter. Indian companies are more confident in the first quarter of the current financial year about the macroeconomy and their own companies than any of the previous six quarters. But excess capacity is putting the brakes on these companies to increase their investments. Survey found the following key concerns of the Indian companies - Weak global recovery; Low consumption demand; High borrowing costs; Lack of political consensus on economic reforms. CII said, 'So far this year, price pressures have been on the rise due to increasing food and fuel costs and in expectation of the salary and wage increase of central government employees under the 7th Pay Commission. However, a normal monsoon may provide some relief from food inflation in the latter half of the year.' About 43% attributed the recovery in corporate sector to increased government spending, while 41% of the respondents attributed this recovery to increased consumption demand (private consumption expenditure). Read on...
Mohammad Anas Wahaj | 14 jun 2016
According to the Asian Development Bank (ADB) report, 'Scaling New Heights: Vizag-Chennai Industrial Corridor, India's First Coastal Corridor' (Authors - Sabyasachi Mitra, Rana Hasan, Manoj Sharma, Hoe Yun Jeong, Manish Sharma, Arindam Guha), the service sector has been a driver of the Indian economy but the country needs to expand its manufacturing base - through initiatives like Make in India and the development of economic corridors - if it hopes to reach the next level of growth. Here are 12 main things to know about Indian economy, manufacturing and 'Make in India' - (1) India is the world's third largest economy. (2) Service sector is main driver of economic growth and contribute substantially to GDP. (3) India major exporter of IT, BPO, & software expertise through skilled workers. (4) Service sector employs less than 1/3rd of labor force. (5) India's manufacturing has lagged. Only 17% of GDP, while Malaysia has 24% and Thailand has 33%. (6) Manufacturing sector lags due to bad infrastructure, complex regulations, limited finance and inadequate supply of skilled workers. (7) Indian government recognizes that to spread benefits of economic growth, manufacturing sector need to be strengthened. (8) India seeks to increase manufacturing's share to GDP to 25% and create 100 million jobs within a decade. (9) Indian government is promoting 'Make in India' initiative and trying to attract global firms for investments through tax incentives and simplified regulations. (10) India is promoting manufacturing through development of economic corridors, routes along which goods and people move. (11) Delhi-Mumbai Industrial Corridor is the India's first and most advanced econoic corridor. (12) In line with 'Make in India', Vizag-Chennai Industrial Corridor is being developed as the first coastal economic corridor. Read on...
Manufacturing and Make in India - 12 Things to Know
Mohammad Anas Wahaj | 04 jun 2016
The Nikkei Services Business Activity Index, which maps the services sector activity, fell from 53.7 in April to 51.0 in May, pointing to a slight expansion in business activity which has been the weakest since last November. A reading above 50 represents expansion, while one below 50 means contraction. While, the Nikkei India Composite PMI Output Index, which maps both manufacturing and services sectors, fell to a six-month low of 50.9 in May, from 52.8 in April. According to Pollyanna De Lima, economist at Markit, 'Latest PMI (Purchasing Managers Index) numbers raise doubts about the effectiveness of economic and monetary policies. The gloomy growth picture will be a concern to policymakers and will raise the chances of further cuts in interest rates by the Reserve Bank of India (RBI). This would be supported by subdued inflationary pressures, with May data pointing to weaker increases in both costs and charges.' Read on...
The Financial Express:
Services sector contracts for 2nd straight month in May
Mohammad Anas Wahaj | 30 apr 2016
India's demographic dividend will reap full benefit only when it successfully nurtures its young population through integrated actionable strategies related to skills development, job opportunities in diverse areas and creating entrepreneurship ecosystems. The latest Asia-Pacific Human Development Report points towards challenges that India faces regarding availability of employment to the increasing population. The report released by United Nations Development Programme (UNDP) said that between 1991 and 2013, the size of the 'working age' population increased by 300 million while only less than half (140 million) could get absorbed in the workforce, suggesting limited capacity of the Indian economy to generate jobs. The report estimated that by 2050, at least 280 million people will enter the job market in India. Moreover, according to India's Ministry of Labour & Employment data, an estimated 1 million people enter the workforce every month, while many others choose to study further. At any given point, around 30 million students are pursuing higher education in India. The UNDP report includes India into countries that have large low-income population, big agriculture sector and high rural-to-urban migration, and suggests that India can focus on specific industries, particularly in manufacturing, to create jobs considering that its manufacturing base is still small, contributing to only 15% of GDP and 11% of employment. According to Professor N. R. Bhanumurthy of National Institute of Public Finance and Policy, 'The creation of fewer jobs between 1991 and 2013 was largely because of the nature of growth the Indian economy experienced. It was mostly services-led growth with low employment intensity...The problem could be addressed if the government's effort to create more manufacturing jobs through programmes such as Make In India and Startup India fructifies.' India's large informal sector, which accounts for 84% of current jobs, adds to the workforce complexity and resulting challenges. The report suggests that measures need to be taken to tackle issues and concerns related to informal employment. The measures could include universal registration of workers; effective implementation of existing labour laws; formal binding guidelines for contracts between employers, recruiters and workers; reform and harmonization of major labour laws applicable to the industry; and reform of social security laws to allow more effective implementation. Read on...
India to see severe shortage of jobs in the next 35 years
Author: Asit Ranjan Mishra
Mohammad Anas Wahaj | 20 apr 2016
India's healthcare landscape is undergoing continuous transformation. Although there is substantial reduction in IMR (Infant Mortality Rate) and MMR (Maternal Mortality Ratio), but at the same time rising cost of healthcare for its citizens is a cause of concern. Public health spending has been reduced by government from 1.47% of GDP in 1986-87 to 1.05% in 2015-16. According to Vandana Prasad, national convener of Public Health Resource Network, '...We have made gains in maternal and child health by establishing public health systems in rural areas...' Health surveys by National Sample Survey Organization (NSSO) show that Indians are now more dependent on private healthcare and this trend is clearly visible if the figures of 42nd and 71st NSSO reports are compared - 60% availed public health services in 1986-87 and remaing went for private, while only 41% utilized public health system in 2015-16. Prof. Rajesh Kumar of Post Graduate Institute of Medical Education and Research (PGIMER) Chandigarh, says, 'Out-of-pocket expenditure is the main cause of worry for the patients. A number of people fall from above poverty line (APL) category to below poverty line (BPL) category because of this. Nearly 70% of out-of-pocket expenditure is due to medicines...' Ravi Duggal, health economist at International Budget Partnership, points out how reduction in budgetary allocation to health by government affects public health system. He says, 'What this under-financing did was to reduce the credibility of public health institutions among general people. And doctors and nurses left the public health system, creating huge vacancies in primary health centres and public hospitals.' Other health-based challenges that India faces include the increasing burden of both communicable and non-communicable diseases. According to a 2014 report by the World Economic Forum and Harvard School of Public Health, the economic burden of lifestyle diseases like heart diseases, stroke, pulmonary diseases and diabetes, account for about 40% of all hospital stays and roughly 35% of all recorded outpatient visits. Read on...
Mohammad Anas Wahaj | 05 apr 2016
Globally, women entrepreneurs are trying to find their place in the male dominated bastions of the private enterprises. In some societies they get equal opportunities to work their ways to succeed but in some others they have to continuously struggle to survive, as they are ignored and their quest is hindered and restricted. Even though India provides sufficient support for women to make their mark in entrepreneurship, but the recent numbers released by India's Ministry of Statistics and Programme Implementation (MOSPI), paint a different picture. It should be a cause of worry as gender equity in all spheres is on India's inclusive agenda. Following are some highlights from the 'All India Report of Sixth Economic Census' by MOSPI on the state of women entrepreneurs - Women constitute only 13.76% (8.05 million) of the total entrepreneurs (58.5 million); Out of these entrepreneurs, 2.76 million women (34.3% of the total entrepreneurs) work in agriculture sector whereas 5.29 million females (65.7% of the total entrepreneurs) work in non-agricultural sectors; Among the states, the largest share in number of establishments under women entrepreneurship is of Tamil Nadu (13.51%) followed by Kerala (11.35%), Andhra Pradesh (10.56%), West Bengal (10.33%) and Maharashtra (8.25%); Average employment per establishment for women owned establishments is 1.67. Read on...
Mohammad Anas Wahaj | 27 feb 2016
Government policies and budgetary allocations play an important role in building a business-friendly environment. Since startups are essential for growth of economic activity, they need to be nurtured during their early stages of development. Government has to provide facilitating ecosystem for entrepreneurial ventures and give special consideration in annual budgets. Indian government's campaigns like 'Make in India', 'Startup India', 'Digital India' and 'Skill India', are driven to stimulate economic activity and support local business development along with attracting global investments. To fulfil these ideas and particularly 'Startup India', Indian government's Budget'2016 should have specific allocations for startups. Following is the list of 19 entrepreneurs and their expectations from the budget - (1) K. Balakrishnan, MD & CEO, Servion Global Solutions: Provide necessary incentives, legal/tax framework and infrastructure support to IT and Electronics industry; Increase investments in broadband connectivity; Improved IT infrastructure and e-governance. (2) Saurabh Arora, Founder & CEO, Lybrate: Increase the tax holiday period from 3 years to at least 5 years; Profitable startups be charged less corporate tax; Benefit of tax rebate on healthcare expense should be for entire tax payer class and not just for salaried class. (3) Aloke Bajpai, CEO & Co-founder, ixigo: Tourism-friendly policies; Focus more on infrastructure and develop airports and provide better connectivity to smaller towns; Better definition for online aggregators and their taxation norms; Clearly define online marketplace. (4) Sobhan Babu, Professor at IIT Hyderabad and founder of Plianto Technologies: Support for startups in the tender bidding process with easy norms. (5) Ankur Bhatia, Executive Director of Bird Group and Member of CII National Committee on Civil Aviation: Draft aviation policy and development of airports in tier-I and tier-II cities is a positive step; Address challenges related to complex policies, aggressive price cuts, multi-tiered tax system and infrastructure deterring the true potential of the Indian aviation industry; Treat aviations sector as national priority. (6) Rohan Bhargava, Co-founder, CashKaro.com: Fund-of-funds and tax benefits for startups need to be implemented effectively; Set out clear and measurable timelines with minimal bureaucratic intervention; Provide clear tax policy that will address the complications of the current tax structure faced by ecommerce sites; Present GST roadmap. (7) Manish Kumar, CEO & Co-founder, GREX Alternative Investments Pvt Ltd: Fund-of-funds should invest directly in startups; Proposed US$ 1.5 billion in FoF is not enough to make impact; Remove 'angel tax'; Relaxation on capital gain tax; Explore alternative ways for raising funds like venture debt; Promote risk investing through proper framework for investor exit. (8) Geetha Kannan, Managing Director, The Anita Borg Institute (ABI) India: Expecting 'gender mainstreaming'; Integrate gender perspective to all relevant policies and initiatives; Special allocation for women entrepreneurs; Provide women-friendly facilities and infrastructure in '100 Smart City' initiative; Focus on women-safety; Get more aggressive on women-specific policies. (9) Ankita Tandon, Chief Operating Officer, CouponDunia: Minimal government or bureaucratic intervention in channeling startup funds; Further increase existing tax exemptions for startups; Better internet connectivity in tier-I and tier-II cities; Introduce tax incentives for startup employees to encourage youths to join startups. (10) Srikanth Reddy, Founder/Chairman, Palred Technologies & LatestOne.com: Encourage participation of Indian institutional investors in startups; ESOP/Sweat Equity shares should be taxed when they are actually sold. (11) Deepit Purkayastha, Co-founder & Chief Strategy Officer, Inshorts: 'Skill India' program should work with 'Startup India'; Maket investments to impart contemporary skills and entrepenerial education; Overhaul of university incubators; Exempt tax on angel investments and ESOPs and relaxed regime for startups to go public and launch IPOs. (12) Pushpinder Singh, CEO & Co-founder, Travelkhana: Announce separate railways startup policy; Include only the transportation cost on rail ticket with additional facilities like food, blankets etc kept as optional charges; Develop a system to utilize data generated by railways everyday. (13) Sanjay Sethi, CEO & Co-founder, Shopclues: GST should become a reality; Tax incentives for startup employees; Policy support for startups going for IPO. (14) Mohit Dubey, Co-founder & CEO, Carwale: Steps toward concrete vehicular pollution policy; Incentives and rebates for hybrids and less polluting vehicular technologies; Fuel policy towards global quality standards and encourage less polluting fuels. (15) Vipin Pathak, Co-founder & CEO, Care24: Easy FDI investment norms, licensing and startup support (tax, documentation, licensing, legal). (16) Manu Agarwal, Founder & CEO, Naaptol: Provide clarity to taxation laws relatd to online marketplaces; Better infrastructure and logistic systems like larger ports and transit systems are need to facilitate imports. (17) Hitesh Doshi, CMD, Waaree Energies: Push for solar manufacturing industry through fulfilling material's requirement locally; Encourage local production through incentives and implementation of anti-dumping policies; Investments in solar energy R&D and technology innovation; Policy reforms like that of depreciation benefits. (18) Amit Mishra, Co-founder & CEO, Quifers: Streamline tax on capital deducted at source like giving first year start-ups the benefit of tax exemption at source; Decreasing service tax by a certain percentage in the first year of operation; Giving out tax benefits and incentives to early stage investors. (19) Chirag Haria, CEO of Aarogyam Energy Jewellery: Utilization of India Post Rural Network with incentives on Cash on Delivery (COD) orders in Rural India, to help increase rural spending; Income tax benefits for individuals/trust investing in Gold Monetization Scheme to bring down gold imports; Increase Excise Duty exemptions from 1.5 crore to 5 crore to encourage small scale manufacturing and prevent black marketing. Read on...
Mohammad Anas Wahaj | 14 feb 2016
Make in India Week has now started in Mumbai and along with it India Design Forum (IDF) 2016 is developing strategies and advocating how a facilitating design environment and culture can be nurtured to enable growth of manufacturing. IDF is integrated into Make in India campaign's plan to demonstrate the potential of design, innovation and sustainability across India's manufacturing sector. Rajshree Pathy, founder of IDF, explains, 'Design is not merely about clothes, shoes, handbags and jewellery, as is commonly believed. Those are incidental. Design is, in fact, at the heart of the manufacturing process. It is not a 'thing', it is a way of thinking.' Satyendra Pakhale, an Amsterdam-based designer, citing Tata Nano's example says, 'It is a good example of Indian design, which combined engineering innovations with a careful consideration for the demands of the domestic market. In fact, one of India's most famous qualities - jugaad - is indicative of an innovative mindset.' According to Simran Lal, CEO of Good Earth, 'It's important that we bring rural design and India's rural design communities along on this journey.' Time is now ripe for India to upgrade to a design-driven manufacturing ecosystem, attract global investments, partner with global corporations and manufacture for the world, but without losing the focus on serving the needs of the large local market. Read on...
The Indian Express:
Make in India Week - Putting design at the heart of manufacturing
Author: Pooja Pillai
Mohammad Anas Wahaj | 30 jan 2016
According to the 2016 Best Countries Ranking of U.S. News, prepared in collaboration with Wharton School and BAV Consulting, India is included at top of the Movers ranking of countries with up-and-coming economies, and overall it is ranked 22nd. Prof. David J. Reibstein, who teaches marketing at the Wharton School of the University of Pennsylvania and participated in developing the rankings, says 'Nations should pay attention to how they are seen by others, since enhancing these perceptions could create a large economic benefit. The experience of tourists is just one of the factors that colour those impressions, along with the experiences of customers, investors, followers of global news and social media, and what people hear from others.' Read on...
Mohammad Anas Wahaj | 19 dec 2015
The PPP Knowledge Lab of the World Bank defines a PPP (Public-Private Partnerships) as, 'A long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.' Different countries are incorporating modified version of the definition in their laws depending upon their own legal and institutional framework. Siraj Chaudhry, Chairman of Cargill India, suggests a PPP framework for India's agriculture for sustainability and better rural development, in which the government provides and co-finance the back-end of the value chain, while the rest is done by the private sector and the farmers. Although India has made continued progress in food security, quadrupling its food grain production. But a lot more is desired as its crop yield still hovers between 30% to 60% of the best sustainable crop yields achievable in developed and some other developing countries. There is substantial room for increase in productivity and total output gains. Moreover India has some of the highest postharvest food losses due to poor infrastructure and unorganized retail. To overcome infrastructural and supply-chain inefficiencies, degrading of land and water, effects of climate change etc, India requires a collaborative multipronged strategy in the form of PPP to utilize technologically advance farming practices, build efficient supply chains and develop organized marketing and retailing. Mr. Chaudhry details the role of various PPP models that bring together all the stakeholders of the agricultural ecosystem for making India's agriculture as the engine of rural growth and development, to eradicate poverty, hunger and malnutrition, and in addition be a major source of food for the world - (1) Investing in smarter value chains: Develop food processing industry. Provide farm extension services. Enhance price realization. Cut out intermediaries. Improve supply chain through forward and backward linkages. (2) Improving access to credit, technology and markets: Utilize advance information technology and biotechnology. Provide farmers agricultural knowledge and guidance. Develop high-yield, pest resistant crops. Enable better management of natural resources. (3) Building farmer resilience to environmental shocks: Provide financial security to farmers. Enable them to de-risk through insurance etc. Develop integrated value chains. He cites the example of Maharashtra government's PPP for Integrated Agricultural Development (MPPIAD), that was catalyzed by World Economic Forum's New Vision for Agriculture (NVA), to develop integrated value chains. Read on...
Making India's agriculture sustainable through PPPs
Author: Siraj Chaudhry
Mohammad Anas Wahaj | 08 dec 2015
United Nation's '2015 Climate Change Conference' is being held in Paris (France) where 196 countries are on the table to reach consensus on tackling climate change and contain global temperature rise and keep it below 2°C. The recent study, 'Climate Change and India: Adaptation Gap (2015) - A Preliminary Assessment', conducted by Prof. Amit Garg of IIM Ahmedabad, Prof. Vimal Mishra of IIT Gandhinagar and Dr. Hem Dholakia of Council on Energy, Environment and Water (CEEW), found that India would need over US$1 trillion from now until 2030 to adapt to the adverse impacts of climate change. The study identifies India's preliminary financial, technology, and knowledge gaps in adaptation, as well as capacity building and institutional needs. The study also estimates that about 800 million people living across nearly 450 districts in India are already experiencing significant increases in annual mean temperature going above 2°C warming pathway. For the whole of India the estimated increase will be 1-1.5°C in the near term (2016-2045). The implications would be disastrous for agriculture and crop production, and the effects could be more pronounced due to estimated increase in extreme precipitation events, resulting in flooding and significant damage to infrastructure. While commenting on the importance of the findings, Mr. Ashok Lavasa (Secretary at the Ministry of Environment, Forest and Climate Change), said, 'Supporting and enhancing the sustainable development of 1.25 billion people is at the heart of India's adaptation gap filling strategy. The fruits of development should not be lost due to increasing adaptation gap in the future.' Read on...
Mohammad Anas Wahaj | 30 nov 2015
India's agriculture and farming products contribute to 15% of its exports (US$ 40 billion), 17% to its GDP, and employs nearly half of its total workforce. R. Gopalakrishnan, business leader and currently non-executive director at TATA Sons Ltd., suggests that policy makers should not ignore India's agriculture sector and bring it into the main policy agenda. The sector is in a great need for a business model innovation. Government programs like 'Digital India' can connect farmers through smart phones, 'Make in India' can work to enhance exports and 'National Skills Development Mission' can upgrade skills of the 260 million farming and agricultural workforce. Experts suggest that India has the potential to double its agricultural exports and increase its farm output by lesser but better trained workers. Senior scientist and director of the Indian Institute of Pulses Research, Narendra Pratap Singh, while explaining India's pulses crisis says, 'It is not lack of research as much as policy support that is currently missing in pulses.' Mr. Gopalakrishnan recommends innovative and intelligent approach to agriculture. Collaborative programs between the center and the states can bring the next green revolution. A research paper that Mr. Gopalakrishnan co-authored with Y.S.P. Thorat (former chairman and MD of National Bank for Agriculture and Rural Development), titled 'Sarthak Krishi Yojana', suggests a coherent framework to transform agriculture and is inspired by the national industrialisation experiences through five pillars - technology, risk, institutionalisation, policy and skills. Read on...
Mohammad Anas Wahaj | 27 oct 2015
In the recently published World Bank report, 'Ending Extreme Poverty and Sharing Prosperity: Progress and Policies' (Authored by Marcio Cruz, James Foster, Bryce Quillin, Philip Schellekens), it is estimated that the proportion of people living in extreme poverty in the world is expected to decline from 12.8% (902 million) in 2012 to 9.4% (702.1 million) in 2015. Although India had the largest number of poors in 2012, but its poverty rate estimate of 12.4% (Modified Mixed Reference Period or MMRP method) is one of the lowest among those countries with the largest number of poor. The report also mentioned that India might have been overestimating the number of its poors depending upon the method applied to collect data - 21.9% (Uniform Reference Period or URP method) for 2011-12 and 29.5% (Mixed Reference Period or MRP method). However the recent report, 'India Rural Development Report 2013-14' (Authored by Surinder S. Jodhka, P. S. Vijay Shankar, Himanshu Kulkarni, Siddharth Patil, Sanchita Bakshi, Mekhala Krishnamurthy, Kaushal K. Vidyarthee, Amita Baviskar), prepared by IDFC Rural Development Network and endorsed by the Ministry of Rural Development (Govt. of India), estimates that nearly 7% of India's rural population is still living in 'extreme poverty', an issue of great concern for the policy makers. But a good sign is that the number of 'very poor' in rural India came down much faster in the period 2004-12 as compared to the preceding decade - 16.3% in 2004-05 to 6.84% in 2011-12. Report mentions that Chhattisgarh (15.32%) has the highest percentage of 'very poor', followed by Madhya Pradesh (15.04%), Odisha (11.46%), Bihar (10.45%) and Jharkhand (9.23%). Moreover, poverty among marginalized groups like Scheduled Tribes (45%) and Scheduled Castes (31%) in rural areas remains high in 2011-12. When occupational groups are considered for poverty estimates in rural areas, agricultural laborers (40%) have the highest poors, followed by other laborers (33%), self-employed in agriculture (22%) and self-employed in non-agriculture (18.63%). Read on...
Mohammad Anas Wahaj | 06 oct 2015
Indian PM Narendra Modi's recent visit to Silicon Valley and meetings with the top executives of US technology giants, have possibilities and opportunities to build partnerships and collaborations for 'Digital India' concept. Moreover access to the attractive 1.25 billion people's market that India offers would be too hard to refuse for Silicon Valley companies. But what these companies also expect is the faster pace of economic reforms, ease of doing business and less bureaucratic hurdles and regulations. The recent exit of global commodities trader and hedge fund manager Jim Rogers from the Indian market gives a negative signal to the global investor community. India's digital upgrade holds a promise for educational and social modernization leading to advanced and skilled workforce, that are preconditions for a thriving economy along with sufficient consumption. Although India's literacy rate continues to rise since independence but it is still well short of projected world literacy of about 90% this year. A lot is still desired in educational infrastructure particularly in rural areas. Internet and latest educational technologies and platforms can help in this regard. India's internet penetration is only 20% of the population and the government's digital thrust can boost this number. Expertise from tech giants can be utilized to improve internet access. Moreover the digital strategy will also spur consumption through ecommerce. According to World Bank, at present consumption accounts for 60% of India's GDP, while Wall Street Journal mentioned that only 1% of India's population shops online. Also 80% of India's population lacks means to pay electronically for goods, says Morgan Stanley research report. The report also mentioned that India's internet market could rise to US$ 137 billion by 2020. All these statistics points towards a better scope and opportunities for businesses in a 'Digital India'. Read on...
How Silicon Valley can turn India's economy around
Author: S. Kumar
Mohammad Anas Wahaj | 30 sep 2015
India's Central Statistics Office (CSO) recently revised the methodology to calculate the Gross Domestic Product (GDP). The new growth numbers brought a bit of surprise, both in the local as well as the global economic circles, as they made India the fastest growing economy in the world, beating China to take the top spot. According to recent WSJ survey of US economists, China's GDP figures are often seen with skepticism. But when India Real Time asked about India's official GDP numbers to a group of international economists, they seem generally comfortable with its economic direction, even though they haven't fully figured out the official data. Following are the views of some global economists - (1) Shaily Mittal of MNI Indicators (London): 'Although reliability of data can be questioned to some extent, there is no denying the fact that India seems to be growing at a much healthier pace. Overall we remain positive on India.' (2) Chua Han Teng of BMI Research (Singapore): 'The repeated surprises under the new GDP series for the past two quarters and the subsequent revisions to previous data have given rise to more questions than answers regarding India's economy.' (3) Jeremy Schwartz of WisdomTree (New York): 'Overall there has been a big boost in investor attitudes towards India. Recent changes have helped steer India in the right direction.' (4) Kilbinder Dosanjh of Eurasia Group (London): 'Brazil, Russia and South Africa are virtually in recession. If you look at the components within BRICS, India is actually doing very well regardless of the methodology.' (5) Vishnu Varathan of Mizuho Bank (Singapore): 'GDP numbers probably leave unanswered questions about mis-stated growth. But the broader macro-stability objectives of the RBI dilute the direct risks.' Read on...
The Wall Street Journal:
What Do International Economists Really Think of India's Rosy GDP Readings?
Author: Anant Vijay Kala
Mohammad Anas Wahaj | 12 sep 2015
The recent press release of India's Ministry of Finance states that industrial production, Balance of Payment (BoP) and GDP numbers of Q1 of 2015-16 indicate that the economy is improving steadily and manufacturing sector is gradually emerging as leader of industrial growth. In July 2015 Index of Industrial Production (IIP) grew at 4.2% as compared to 0.9% last year. Manufacturing output in first four months of 2015-16 rose by 4% as compared to 2.8% in same period of 2014. According to Shaktikanta Das, Economic Affairs Secretary of Govt. of India, 'Improvement in IIP data for July is in line with steady improvement in the economic growth...The IIP data for capital goods and manufacturing sectors are noteworthy.' Moreover, the press release also mentions the impressive growth of capital goods (10.6%) and consumer durables (11.4%) sectors. Read on...
The Economic Times:
Economy improving & manufacturing sector slowly emerging leader of industrial growth - Finance Ministry
Mohammad Anas Wahaj | 22 aug 2015
India's agriculture sector becomes important to the economy due to the workforce employed, nearly half of the total, and contribution of 17% to the GDP (Gross Domestic Product). The sector has gone through many transformations - 'Green Revolution' of 1960s, improvement in the yield of wheat with introduction of high yielding varieties and establishment of research facilities and use of better fertilizers and irrigation in the early 1970s, and subsequent transformation in the output of rice due to large-scale use of tube wells, and post-1980s saw the shift in focus towards increasing yields and production of oilseed, fruits and vegetables. During 1960s and 1970s the growth of agriculture was 3-4% while during 1980s it became 5-6%. In 1990s it reached 6-7% but during later part of 1990s and post-2000 it declined to 1-2%. Amit Kapoor and Sankalp Sharma of Institute of Competitiveness in India, explain the various aspects of Indian agriculture and provide recommendations to improve and grow the agricultural economy. According to them government should focus on areas like rural infrastructure, better access to credit and enabling value addition by farmers. They highlight four aspects of Indian agriculture - (1) Overdependence on monsoon for irrigation: There is need for better irrigation policy, utilization of rivers, rural tourism and infrastructure development. (2) Inhibition to technology adoption: Research community has to play a better role in guiding farmers and learning about their challenges and advocate technological solutions. Agricultural policy should make farmers as the focus of every policy action. Farming in India has to move beyond 'subsistence' level. (3) Lack of availability of formal agricultural credit to farmers: Requires better insurance schemes, behavioral interventions to make farmers aware of their decisions, promotion of financial planning, and making farmers feel financially secure and independent. Venture finance can be considered for agricultural producers who want to do value addition for their agricultural produce. (4) Inefficient market conditions: Although government procurement at MSP (Minimum Support Price) is beneficial to farmers but they cannot command the price that they could in a free market. Moreover inefficient storage leads to wastage of produce. Farmers should have the flexibility to sell directly to interested foreign buyers. Read on...
Here's why we need to focus on agriculture in India!
Authors: Amit Kapoor, Sankalp Sharma
Mohammad Anas Wahaj | 13 mar 2015
'Make in India' concept has the potential to do for manufacturing sector what economic reforms of 1991 did to the information technology industry (IT services & BPO). Jugaad is an inherent Indian trait to find a fix or an instant solution by applying unconventional and non-standard processes. According to Banmali Agrawala, president & CEO of GE South-Asia, 'The Make in India campaign has been getting a lot of jugaad reaction, particularly in the case of capital goods, to raise import barriers and to go around World Trade Organization norms to impose forced localization. Jugaad is at best a stop-gap measure. To move forward, encouraging creativity and innovation at an affordable price point through serious research and development must become the cornerstone of this campaign.' He points out factors that drive global investments in manufacturing, namely domestic demand, skilled workforce and efficient governance. He further explains and analyzes these three factors in Indian context and concludes - India's domestic demand is modest, requires thrust from government spending, support through competitive financing for exports, production efficiencies and quality output at competitive prices; India have skilled workforce but to leverage its full potential needs focus on innovation, research, design, engineering and high end of value-added manufacturing. Indian companies have to invest more in such manufacturing related activities; Although India has strong institutions in place but there is room for improvement in achieving better and efficient governance with transparency and predicability. Read on...
Mohammad Anas Wahaj | 03 mar 2015
While speaking on 'democracy, inclusion and prosperity', Reserve Bank of India (RBI) governor Raghuram Rajan, said that reforms must focus on creating capacities to provide a strong government instead of creating 'layers' that become obstacles. Mentioning political scientist Francis Fukuyama and his analysis of the emergence of political systems, he said 'Countries would have to strengthen government and regulatory capabilities to remove barriers and push development.' Adding on to the definition of liberal democracies - that are best at fostering political freedoms and economic success and have three important pillars: a strong government, rule of law and democratic accountability - he talked of free markets as the fourth pillar that makes liberal democracies prosper. He also showed concern for the rising inequality of opportunity in industrial countries that threaten these pillars. According to him, India is strong in democratic accountability and somewhat better in terms of rule of law, but it has to go a long way to improve the capacity of the government to deliver governance and public services. Read on...
The Economic Times:
Reform to create capacities for strong governance- RBI's Raghuram Rajan
Mohammad Anas Wahaj | 29 jan 2015
According to World Bank, remittances to India i.e. money transfers by Non-Resident Indians (NRIs) employed outside India (about 14 million Indians) topped the chart and were US$ 71 billion in 2013-14. Promoth Manghat, vice president of global operations at UAE Exchange, says 'Remittances from the UAE to developing countries, including India, increased by 8 to 10 per cent between 2013 and 2014.' Transfer operators cite the stregthening of dollar against Asian currencies as one of the main driver for remittances. According to Sudhesh Giriyan, COO at Xpress Money, their top performing markets are India, Pakistan, Bangladesh and Philippines. Read on...
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