Consumer Market: Scaling New Heights

Scaling New Heights

With rapid socio-economic changes taking place in India, the country is witnessing the creation of many new markets and a further expansion of the existing ones. With above 300 million people moving up from the category of rural poor to rural lower middle class between 2005 and 2025, rural consumption levels are expected to rise to current urban levels by 2017. Such developments in India’s markets are expected to create major opportunities for Indian companies and MNCs alike and further fuel consumer demand in India.

According to a study by the McKinsey Global Institute (MGI), Indian incomes are likely to grow three-fold over the next two decades and India will become the world's fifth-largest consumer market by 2025, moving up from its position in 2007 as the 12th-largest consumer market. Further, according to data released by Visa, (the world's largest retail electronic payments network), annual commercial spending in India was estimated at US$ 2.3 trillion in 2007, an increase of 23 per cent from 2006. According to Visa's Commercial Consumption Expenditure (CCE) index, India was ranked in terms of the size of total business and government expenditure as the fourth fastest growing market in the Asia Pacific (APAC) region.

In spite of the rising inflation and fears about a slowdown, consumer demand in India is still upbeat. In an analysis (carried out by Economic Times) of the top 50 consumer goods and services firms, it was seen that the June quarter saw a sales growth of 24 per cent (year-on-year) compared to last year. The firms included in the analysis were from sectors like automobiles, textiles, fast moving consumer goods (FMCG), consumer durables, liquor, airlines, telecom services, footwear, and retail among others. Sales of daily consumption items went up by 5-10 per cent and the FMCG business increased by 18.8 per cent, while the consumer durable segment also recorded strong volume growth in the second quarter of the 2008-09 fiscal.

Moreover, approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities across India by the end of 2011, riding on the boom in organised retail sector, says a joint study by consultancy firm KPMG and industry body, ASSOCHAM. The study states that 212 Indian towns are capable of sustaining the development of such hypermarkets in 2008.

FMCG

The FMCG sector has been registering double-digit growth in sales since the last couple of years. Currently, with annual revenues of US$ 14. 74 billion, it is the one of the most promising sectors.

Interestingly, the FMCG sector is witnessing rapid growth in rural areas and is estimated to grow by 40 per cent compared to the growth of 25 per cent in urban areas. Companies like ITC, Godrej Agrovet, DCM Shriram among others are growing rapidly in rural areas and in fact they may outdo their urban counterparts like Reliance Fresh and the Future Group-owned Food Bazaar chain.

Tremendous growth is being recorded by the value added and aspirational products. These products are estimated to propel the FMCG industry to grow by 16 per cent (in sales) during 2008-09, compared to 14.5 per cent during 2007-08.

Another promising trend is the growth of ‘out-of-home consumption’, which is emerging as a new section in the FMCG sector. With changing lifestyles, the concept of three core meals fast vanishing, companies like Coke, ITC, and Dabur are venturing into this market and are bringing out new product packaging for the segment.

The segment is likely to see a lot of fresh investment in the days to come. PepsiCo has announced a US$ 500 million investment in India over the next three years. Having already invested US$ 700 million in the country, the new investment would push the company’s investments above the US$ 1 billion mark. PepsiCo is also working on developing a nutritious product targeted at young women.

Significantly, several Indian FMCG companies have also been aggressively exploring global markets through both acquisitions and alliances. In the past three years, they have acquired about 15 companies and have spread their presence in more than a dozen countries.


Luxury Products

With the rapidly increasing number of millionaires in India, the market for luxury brands is growing annually at a compound average growth rate (CAGR) of about 35 per cent.

According to a FICCI-Yes Bank report, India is set to become a manufacturing hub for global luxury brands over the next four to five years. The report stated that with the core strengths in India's manufacturing sector, the manufacture of luxury items in India can grow to US$ 500 million. The luxury products market in India was estimated in excess of US$ 500 million and is likely to grow at a CAGR of 28 per cent to reach US$ 1.2 billion by 2010. The market is expected to double by 2015, touching US$ 2.5 billion.

Global brands like Louis Vuitton and Frette are planning to set up their manufacturing base in India. In the luxury automobile segment, BMW has also seen a good run in 2008, having revised their sales target for the year to 2,800 cars from 2,000. Audi registered a 123 per cent rise in sales in the first quarter of 2008, while Mercedes-Benz has set a target of 3,000 cars for 2008.

Industry experts believe that the top-end consumer electronics segment in India is growing by 8-10 per cent annually.

Consumer Durables

A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing have been instrumental in changing the pattern and amount of consumer expenditure leading to robust growth of consumer durables industry.

According to a snap poll carried out by the Confederation of Indian Industry (CII), 92 per cent the CEOs surveyed were expecting sales to increase by 10 per cent during the current financial year

According to ORG-GfK data, the combined size of five big-ticket product categories-colour television, refrigerators, washing machines, air conditioners and microwave oven-rose from US$ 4.1 billion in 2006 to US$ 5.1 billion in 2007.

The higher growth in the sales value compared to volume growth rates can be explained by the surge in the sales of high-end consumer durable goods. Products like split air-conditioners (60 per cent), frost-free refrigerators (54 per cent), fully automatic washing machines (35 per cent), microwave ovens (35 per cent), high-end flat panel TV (100 per cent) recorded impressive growth rates in 2007-08.

Despite the global slowdown, Indian consumer goods companies have decided to augment manpower, and also increase their research and development (R&D) expenditure. LG Electronics plans to invest US$ 50 million to increase its manpower and R&D in India by 2009, whereas Samsung plans double its R&D team in India to 4,000 by 2010. According to ITC's sustainability report, ITC's payroll spend increased from US$ 110.52 million in fiscal year 2006 to US$ 149. 75 million in fiscal year 2008 and the company remains upbeat on hiring.

Consumer Electronics

According to the Consumer Electronics Association, the global consumer electronics revenue is estimated to grow by nearly 10 per cent in 2008 to reach US$ 700 billion.

In fact the rapidly growing consumer electronics market in India has spurred many leading manufacturers of the world to get into partnerships with local companies to set up shop in the country. Companies planning to enter India include Japanese testing firm Saki, Hong Kong’s surface mount technology (SMT) company WKK, Singapore’s Mydata (SMT) and USA’s Indium (solder paste).

iSuppli, an electronics market research firm, has projected that the Indian audio/video consumer electronics industry will grow to US$ 6.59 billion by 2011, growing at a compound annual growth rate CAGR of around 10 per cent.


E-commerce

Thanks to the broadband revolution, an increasing number of Indians are spending more on the web.

According to the Telecom Regulatory Authority of India, Broadband Internet connections touched 4.73 million at the end of August 2008. The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping.

According to a global online survey by A C Nielsen, a staggering 78 per cent of Indians (who access internet) make purchases online, with credit cards being the preferred mode of payment. In fact, Indians have emerged as the third biggest credit card users globally for online purchases.

A new niche segment has emerged in this sector-on-demand personalisation of products. Online start-ups like Myntra, Dilsebol and Pringoo are some of the first movers in this area, which provide products, which are customised according to the client’s demand.

Automobiles

The Indian auto industry has grown at a CAGR of 14 per cent over the last five years with domestic sales of vehicles touching around 10.1 million vehicles in 2006-07. During April 2008, sales rose by more than 17 per cent in the car segment, while sales in the utility vehicle segment rose by 31 per cent, compared to the corresponding month last year. Presently, India is the second largest two-wheeler market in the world, the fourth largest commercial vehicle market, the 11th largest passenger car market and is expected to be the third largest automobile market by 2030.

Maruti Suzuki, India’s leading automaker registered a 20 per cent net sales growth for the June 2008 quarter and it also posted 12 per cent growth in volume terms. Even Hero Honda registered double digit growth in its volume shipment.

Consumer Confidence

The Indian consumer remains one of the most upbeat globally. According to the AC Nielson Consumer Confidence and Opinion Survey, India is placed second in the 51-nation global survey. Also Indians are the most optimistic people regarding their personal finances (79 per cent) and second most optimistic people with respect to job prospects (86 per cent)-which opens attractive avenues for industries planning to tap the Indian consumer market.

Furthermore, Indian consumers are also more becoming more aware about the finer nuances of nutritional panels and labels. According to the study, around 59 per cent Indians said that they noticed packaged goods' labels containing nutritional information. With 59 per cent, India tops in the Asia-Pacific region in its understanding of nutritional labels. The Nielsen global online consumer survey was carried out by Nielsen in April 2008, in 51 markets from Europe, Asia-Pacific, North America and West Asia.





Copyright © 2004-2008 India Brand Equity Foundation

Not Above Us All

Public anger — against the perceived ineptitude, pettiness, and failure of our political class — brimmed over when Mumbai was savagely attacked last week. The outpouring of angry messages and public demonstrations suggest that the citizens of this country might finally be fed up of just picking up the pieces and moving on, till the next bout of terrorist brutality rips apart their homes and lives all over again. The vociferous demands for accountability being made by citizens from the political class are understandable, given the circumstances. 

The attacks only ignited a long-simmering resentment among the citizenry about the deportment of its elected representatives and public officials. It is the attitude of the ruling class — bureaucracy and judiciary included — that gets to our people. The attitude that somehow — by virtue of being elected to Parliament, promoted to the top of the bureaucratic heap or elevated to the highest benches of the judiciary — they are above the rest. It betrays a colonial hangover and has no place in a democratic republic. 

The power play manifests itself most visibly in the security arrangements provided to the so-called VIPs. An unjustifiable number of people are designated as VIPs and VVIPs in this country, and are provided with an army of security personnel to protect them round the clock. For instance, in Delhi alone, about 14,000 police personnel are assigned to VIP duty, apart from special security forces like the National Security Guard (NSG) and Special Protection Group (SPG). The problem is acute in Delhi because it is the national capital, but this is a pan-Indian phenomenon. This, when police forces in many states are understaffed. 

Precious resources — of men and money — are spent on protecting those who face no reasonable threat, at the cost of stretching out security apparatus, putting the nation’s safety at risk. For instance, the ‘rangers’ arm of the NSG is mainly devoted to VIP duty. Our elite forces must have a single brief so that their efficiency is maximised. Instead, we have a ludicrous situation where ex-PMs and other no-so-vulnerable individuals — for instance, Amar Singh and Murli Manohar Joshi — are protected by the NSG. There are a few public officials — like the PM, president, home and defence ministers and the chief justice — who need solid security cover. The rest must promptly be stripped of their VIP status and accompanying security paraphernalia. If their safety is at stake, let them — not the taxpayers — pick up the tab.

TIMES OF INDIA

5th DEc, 2008

Case for a bold fiscal stimulus

IT HAS now become clear that Indian economic growth has slowed down considerably in the current year after recording a robust rate of nearly 9% average over the past five years. While the global financial crisis, the most severe since the 1930s, has done much of the damage, the growth momentum was also affected adversely in first half of 2008-09 by the tight money policy of the RBI to contain inflation. 

Growth is flagging in many sectors especially the labour-intensive, export-oriented ones. With exports shrinking, vulnerable sectors such as SMEs (like those making handicrafts or apparel) feeding export markets are finding it hard to survive. Larger companies are cutting production and postponing capital investments, in turn adversely affecting the jobs. The stock markets have crashed because of foreign institutional investors (FIIs) pulling out from India, which has also exerted pressure on the rupee. It has become difficult for enterprises to raise capital in India and in international markets. 

Although the Indian economy may still manage to grow at 7%, one has to be prepared for further downside risks associated with deepening of recession in the west. The IMF is projecting the G-3 economies, viz., the US, EU and Japan, will actually be shrinking in the next few quarters. Hence, emerging economies like India will have to look inwards for the growth stimuli. 

The policy response of the government has so far been limited to easing liquidity by reducing CRR and repo rates. A Rs 50,000 crore fund is also being contemplated to lend to infrastructure projects. Some more initiatives to subsidise home loans and provide incentives to exporters of labour-intensive goods, among others, are under consideration. While all these steps are in the right direction and should be expeditiously taken, there is need for propping up the growth momentum. 

What is needed is a fiscal stimulus of the order of $50 billion (or roughly Rs 250,000 crore). Such a package of additional spending over the next twelve months will go a long way in reviving the demand and restoring the growth sentiment. The package should target the weaker sections of society to make the growth process more inclusive by paying special emphasis, for instance, on the development of rural infrastructure — rural roads and housing, primary and secondary education, health and sanitation — which would have high pay-offs in terms of growth and inclusiveness while having low import content. 

A part of the package could be an adjustment fund for assisting the affected SMEs and workers. The expansion of NREG schemes could be another priority. Spread over two financial years, viz., 2008-09 and 2009-10, in a ratio of 40% and 60%, this package would entail stimulus of $20 billion and $30 billion respectively (i.e., 2-3% of GDP) in the two years and could be monetised rather than funded by public borrowings. The public investments tend to crowd in private investments and foster growth. Hence, the package may expedite the revival of the economy. 

Sceptics would be concerned about the effects of such a package on fiscal balance and hence on inflation, keeping in mind the already stretched fiscal deficit in the current year after including off-budget expenditure. There are two redeeming features to these concerns. Firstly, the more than 50% decline in crude oil prices in international markets since the onset of the crisis has provided the much-needed fiscal space to the government by reducing the cost of oil and fertiliser subsidies. Secondly, there is little risk of inflationary expectations in the present scenario of declining demand and depression around the world. The commodity prices have already come down by more than 50% on the back of poor demand. 

The policy response in different countries has included large fiscal stimulus packages ranging from the government distributing vouchers for promoting spending as in Japan to an ambitious $580-billion fiscal stimulus package announced by China. 

Another lesson that needs to be learnt from the trends of the past year includes the need for moderation of FII inflows. Volatility of FII inflows over the past year has caused wide variations in the exchange rate of rupee creating hardships for exporters besides bringing wild fluctuations in the stock market indices. These flows are also very expensive in terms of their servicing burden vis-àvis other capital flows such as FDI, NRI deposits and external commercial borrowings. 

To sum up, the time has come for taking bold steps to revive the growth momentum of the economy in the wake of the worst crisis of the world economy. India should seize the moment before it is too late, to inject a stimulus by building an all-party consensus in national interest while enhancing the inclusiveness of the growth process.

ET: 5th Dec, 2008

SEZs and rational expectations

The debate on the losses or gains in revenue due to the special economic zone (SEZ) policy is tantamount to missing the wood for the trees. In any event, the debate on numbers is by itself subject to assumption-based opinions across a spectrum of economists, who may not always agree. Besides, it is too early to generate data to enable anyone to speak with conviction. Let us not fall into the trap of numbers, but look at the larger picture. The fact remains that nobody has ever questioned the merits of SEZs or its economic potential. And there is a broad political consensus in the country that the SEZ policy is here to stay for good.

Cuts, too, has done a study recently for the ministry of commerce, but we did not toe their line blindly. We undertook an extensive field survey to see what is happening on the ground. Fourteen SEZs across the country were visited to look into the larger impact (both upstream and downstream) of the functioning of SEZs. We found that SEZs, in addition to export and investment growth, have had a very profound impact on the surroundings, signalling a positive trend, and a significant change in the mindset of the local people.

The new generation SEZs, such as at Chennai, Sriperumbudur, Hassan, Bangalore, Manikanchan etcetera, have created a tremendous local area impact in terms of direct employment, formal and informal activities, consumption pattern and social life in and around SEZs. They are creating jobs for a large number of semi-skilled workers. Wage rates are rising and are higher in SEZs than those outside.

The HSL SEZ at Hassan, Karnataka, has recruited mostly women who have graduated from one of the 80 odd schools in the district. It has, so far, employed approximately 1,700 women from nearby villages. Prior to the establishment of the gems & jewellery SEZ in Manikanchan, artisans used to migrate to Gujarat and its neighbouring states in search of employment, but now with the establishment of the Manikanchan SEZ, they are going back to West Bengal. One has to visit these SEZs to see the energy and vibrancy in the productive environment.

Turning to the question of land acquisition, which has, alas, been skewed by the debate on the Nandigram and Singur episodes, one can strongly argue that land has to be acquired for setting up industries, and land-use change does happen. Recently, in...an interview to The Telegraph, Kolkata, the Nobel Laureate Amartya Sen emphatically said, “Prohibiting the use of agricultural land for industries is ultimately self-defeating”.

Land acquisition is a state subject in India. Unfortunately, the liberalisation process in the country has not been matched by reform in the rent-seeking patwari system of the states. Girish Sanghi, MP and industrialist, argued at a Cuts’ parliamentarians meeting at New Delhi on May 3, 2007, that once the SEZ application is approved by the Board of Approval, on the basis of a State Government recommendation, there should be no need for any administrative/legal requirements for land conversion.

According to the commerce department, only 0.000012% of India’s cultivable land will be used for establishing SEZs. Following the land-acquisition related controversies, an eGoM has decided that state governments would not buy land for private entrepreneurs and that only barren/wastelands or single croplands would be acquired for SEZs by them directly. There is now a consensus across political parties and CSO/NGOs, against the acquisition of agricultural land by private SEZ developers even at market prices. On the crucial issue of rehabilitation of landowners, another government policy is in the making to ensure that the dispossessed are suitably compensated.

Demolishing the romantic argument of farmers in love with their land, Sharad Joshi, MP, observed at a May 2007 meeting that in today’s changed circumstances, they are ready to sell it for their own betterment. If given the option to sell their land (obviously at ruling market prices), which amounts to voluntary retirement from farming, and gain employment in industrial activities, they will opt for it. This has been corroborated by many, including Cuts staff via personal interviews with farmers.

One innovative model to deal with rehabilitation came up in the case of the JSW Steel plant in Salboni, West Bengal, where farmers were compensated with cash, shares in the company taking over the land and also an assured job to each family. Even if the land-owning company fails, the landowner gets the market price for his land.

In conclusion, the imperatives of SEZs in the present context are clear, but some caveats should be recognised. There may be a potential threat of land being diverted to the real estate business, as opined by Rahul Bajaj, MP and business tycoon. At the same meeting, he said that the larger non-processing area will attract developers for the development of shopping malls, recreational facilities and...
even golf courses. These are some of the concerns which need to be tackled head on before the country can realise the benefits of the SEZ policy.

—The author is with Cuts international, an advocacy group. These are his personal views....

Pradeep S Mehta
Posted: 2007-09-12 00:00:00+05:30 IST
Updated: Sep 11, 2007 at 2345 hrs IST
Financial Express

One billion Indians, one billion ideas

A nation, at best, is an imagined community. At worst, it’s an idea whose time has not come or has become stale. The idea of India falls between two stools — living and dying, rising and falling every minute. And yet, there are more ideas mushrooming every day, helping, conflicting and destroying each other, and becoming new again. The idea of India, with its ancient traditions and young energy, is never a dull thought.
In a nation where the word for yesterday and tomorrow is the same — kal — future passes into the past in a jiffy and an idea can have only a few moments of glory. Jawaharlal Nehru, sitting in dank prison cell, tried to connect the past with the present with a panorama through ages in his The Discovery of India, creating an idea of India as a “unified whole” on the threshold of a giant leap forward. The idea was born a few months before the ancient civilization turned into a nation state amid bloody chaos at the stroke of midnight. Even as the world saw us as a horror of squalor, Nehru’s idea gave hope of a New India.
As the nation broke free from Gandhi’s idea of India as a loose confederation of self-sufficient villages and began setting up ‘modern temples’, it kept experiencing the rituals of making and unmaking as different forces pulled it in opposite directions. V S Naipaul captured India’s many struggles in A Million Mutinies Now, an acidic attack on the idea of “unity in diversity”.
The revolutions that Naipaul saw in 1962 failed to destroy the idea as India’s democracy remained defiantly anomalous. In the Nineties, Sunil Khilnani’s The Idea of India underscored the strength of Indian democracy — the result of a long struggle by the silent majority against the despots and colonialists; democracy was also the glue that kept India together.
By this time, the country’s success was being measured in terms of GDP and its collective happiness fluctuated with the sensex. And New India began to dominate the national discourse, giving birth to a host of new writers with a vision for the future. The most prolific among them was former President A P J Abdul Kalam, who churned out four populist books, all dealing with a single theme: how to make
India a developed country. In his
2020 — A Vision for the New Millennium, the rocket scientist presented a few action plans for the country’s young people; in Envisioning an Empowered Nation, he talked of networking the thoughts of one billion people towards a common goal; and in Ignited Minds, he addressed the young directly: surge ahead as a developed nation or perish in perpetual poverty.
Since living in a developed nation is still a fantasy in India, Gurcharan Das’s India Unbound, which argued that India’s new economy was unleashing the country’s “animal spirits” and will make the “giant elephant” into a truly global power, became a bestseller. The middle class lapped up Das’s ideas on why “India needs to embrace capitalism more wholeheartedly, for all the costs and risks.”
With capitalism itself under scrutiny, Shashi Tharoor’s idea of post-colonial India —The Elephant, the Tiger and the Cellphone — in which he analyzes the changing nation, makes more sense, with the writer saying the road ahead may be a bit bumpy for its one billion people.
One billion people means one billion argumentative minds,
and maybe one billion ideas of India. Maybe there are many Indias, living in different time zones, hopping back and forth between reality and mythology, slipping in and out of consciousness. Maybe Nehru was wrong in trying to “discover” the nation. Maybe, we needed to invent it. Maybe, Gandhi’s experiment with rural swaraj was not such a bad idea. Maybe Ambedkar’s idea of democracy — one man, one vote and one vote, one value — was an idea we should have pursued with greater care. The possibilities are immense. We can all keep trying to invent India. After all, it’s just an idea.

India on SEZ HIgh

SEZ : special economic zone

The craze for industrialization has swept India. The central and state governments are all following this trend, throwing caution to air. Prime agricultural lands are being offered for Special Economic Zones (SEZ) leaving the farmers working on these lands with nowhere to go. This SEZing of lands reached its maximum when the West Bengal government allotted fertile agricultural land to Tata Motors for its small car unit to be set up in Singur.

The Union Government’s policy on SEZ came into effect on 1st April 2000. It represents the latest and most planned thinking so far on India’s export policy and may even determine the future of India’s industrial development strategy. SEZs need to be seen in the context of the Indian Government’s attempts to launch second-generation reforms and as a continuation of earlier initiatives to boost exports, namely setting up of export processing zones, export oriented units, software technology parks, export oriented hardware technology parks, export promotion capital goods policy, advance licensing and deemed exports policy and free trade zone policy.

SEZs allow the government to experiment with radical (in the Indian context) economic reform in a sufficiently large geographical area (minimum size 1,000 hectares) but on a localized basis, thus averting the difficulties posed by introducing such reforms at the national level.To instill confidence in investors and signal the Government’s commitment to a stable SEZ policy regime and with a view to impart stability to the SEZ regime thereby generating greater economic activity and employment through the establishment of SEZs, a comprehensive draft SEZ Bill was prepared after extensive discussions with the stakeholders. The Special Economic Zones Act, 2005, was passed by the Parliament in May 2005, which received Presidential assent on the 23rd of June, 2005. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.

The main objectives of the SEZ Act are generation of additional of economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, development of infrastructure facilities. It is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities. The SEZ Act 2005 envisages key role for the State Governments in Export Promotion and creation of related infrastructure. A Single Window SEZ approval mechanism has been provided through a 19 member inter-ministerial SEZ Board of Approval. The total land requirement for the 341 formal approvals granted till date is approximately 44268 hectares out of which about 87 approvals are for State Industrial Development Corporations/State Government Ventures, which account for over 21169 hectares. In these cases, the land already available with the State Governments or SIDCs or with private companies has been utilized for setting up SEZ. The land for the 130 notified SEZs where operations have since commenced involved is approximately 17663 hectares only. Out of the total land area of 2973190 sq km in India, total agricultural land is of the order of 1620388 sq km (54.5%). It is interesting to note that out of this total land area, the land in possession of the 130 SEZs notified amounts to approximately 117 sq km only. The 341 formal approvals granted also works out to only around 443 sq km. The SEZ policy has met with stiff resistance from the farming community, though it has the broad support of industry. The farmer’s agitation has also resulted in violence and deaths in some parts of the country.

The Parliamentary Standing Committee of Commerce (Murli Manohar Joshi) today called for sweeping changes in the SEZ policy being pursued by the UPA government to make it farmerfriendly. The Committee is also of the view that a level playing field should be provided to the domestic industry. The Committee recommended that the fiscal exemptions, which are unrelated to exports, should not be granted. The provisions regarding direct and indirect taxes in this regard should be corrected and loopholes plugged. Tax benefits should be granted only for export activities and infrastructuredevelopment.It has also recommended that the entire gamut of fiscal incentives given to SEZ Developers and Entrepreneurs need to be reviewed and so revised that the purpose for which these concessions were granted would be fully achieved.

At present, 1087 units are in operation in the SEZs established prior to the Act coming into force, providing direct employment to over 1.85 lakh persons; about 40% of who are women. Private investment by entrepreneurs in these SEZs established prior to the SEZ Act is of the order of over Rs. 5661 crore. The overwhelming response to the SEZ scheme is evident from the flow of investment and creation of additional employment in the country. The SEZ scheme has generated tremendous response amongst the investors, both in India and abroad.

India ranks 77th in Economic Freedom Index: Report

NEW DELHI: India's ranking in the index, which scales prosperity of the whole society, is down by 8 notches to 77th position among 141 countries in 2006, with uneven pattern of economic reforms widening gap between the rich and the poor, a latest report says. 

However, India fared better among the BRIC countries where China was ranked at 93, Brazil (96) and Russia (101). 

Hong Kong bagged the first position scoring 8.94, followed by Singapore (8.57), New Zealand (8.28), Switzerland (8.20) and UK (8.07). 

The annual report called Economic Freedom of the World (EFW) released by Centre for Civil Society (CCS), compares the level of accesses to sound money in 141 countries. It measures the money growth in the country, the rate of inflation and freedom to own foreign currency. 

Although, India is better post 1991 economic liberalisation when it was ranked 80, India's position is continuously sliding from 69 in 2005 and 60 in 2004 to the 77 in 2006. 

"Rich are getting richer and poor are becoming poorer! is now a common refrain in India in any discussion on economic reforms. Since 1991, India has undergone a great deal of liberalisation internally and externally. Many feel that the gains of this liberalisation and globalisation have not accrued to the poor," CCS said in its release. 

"Unequal distribution of Economic Freedom is at the basis of India's uneven development. The reason is simple, the areas in which the middle and upper classes make their living have seen the highest degree of liberalisation, while the areas in which the poor earn their livelihood have seen the fewest reforms," it said. The rating on a scale of 10 declined from 6.6 to 6.59. 

As a global index, it measures the degree to which policies and institutions of these countries are supportive of economic freedom, which includes elements like personal choice, voluntary exchange, freedom to compete and security of privately-owned property. 

Among the five components of the EFW index, the largest decline for India is in 'Sound Money' where its score decreased to 6.70 in 2006, with the country ranking at the 113th position, from 7.0 in 2005. 

The other four criteria for measuring the degree to which the policies and institutions of countries are supportive of economic freedom are size of the government, legal structures, freedom of trade internationally and regulation of credit. 

"Countries with high levels of economic freedom enjoy higher levels of prosperity and greater individual freedoms. Countries at the bottom of the index are often mired in poverty, and governed by totalitarian regimes and have few individual rights or freedoms," the report stated. 

It further shows that 8 of the 11 worst performers in economic freedom are African countries, where people continue to suffer from poverty. 

The report indicates that there is a strong connection between economic freedom and common well-being. Countries with higher economic freedom have higher average per-capita GDP and average per-capita economic growth. 

"As the higher level of economic freedom is sustained and the more rapid growth persists, poverty rates will fall ...," the report added. 

TOI 21'st Sept 2008

Growth and inflation in the time of elections

THE consensus view is that the Reserve Bank of India is likely to persist with its hawkish monetary stance by tightening the rates further, as the Union government would like to keep a lid on inflation ahead of the general elections next year. However, data suggests that other than in 1996, inflation has never fallen in the year preceding a general election in India. 

Analysts question the need of further monetary tightening and its ability to have a meaningful anti-inflationary impact in the run-up to the election. "The most decisive factors in determining election outcomes have been on issues of rather immediate relevance than economic issues of a more enduring nature," says Saurabh Mukherjea, head of Indian equities, Noble. 

He says the reduction in FII inflows (net outflows YTD stand at about $7bn+) has reduced the need for punitive monetary measures. Also, there is not enough time left before the election for further monetary tightening now to have a bearing on the pre-election inflation rate. 

"Contrary to conventional wisdom, economic issues have never been at the heart of any successful general election campaign in India. Even if they were, it was not clear that sacrificing growth at the alter of inflation has ever won votes. In short, consensus 'election economics' and repo rate forecasts are misguided," adds Mr Mukherjea. 

According to a study by UK-based investment bank, Noble, economics was highlighted in the election campaigns only on two occasions — one was the 1971 general election when Indira Gandhi spearheaded the 'Garibi Hatao' (remove poverty) campaign, and the 1980 election which Indira Gandhi won highlighting spiralling prices under the post-Emergency Janata Party regime. 

Sachidanand Shukla, chief economist, Enam Securities, says that the tolerance for high inflation has come down. "But what we have seen so far are only seen knee jerk reaction from the government like banning exports, controlling cement prices, hike in interest rates. At the same time, government spending in the year before the election shoots up, making it difficult to cool inflation. For example, take the case of I-T exemption, farm loan waiver among others," he said. 

A paper by Stuti Khemani of the World Bank in 2001 offers more systematic evidence on this subject. A glance at national elections between 1960 and 1992 shows that price rises are politically damaging. For instance, a 1% increase in inflation in the year before a national election cuts the incumbent's share of the vote by 0.6 percentage points. 

But it turns out growth matters more: A 1% rise in growth just before an election adds 1.66 percentage points to the incumbent's vote. So a determined fight against inflation in a pre-election year may be counter-productive from an electoral perspective. The increase in inflation before the election year is also due to rise in populist spending. 

"There are some instances like onion crisis etc, where it shows that there is not a very good statistical relation between inflation and election but more of perception. However, if we talk about this particular year, purely due to base year effects from early next year, inflation should moderate closer to the elections. So there might not be much need for tightening monetary policy further and risk destabilising Indian growth," says the chief economist of a bank, who does not wish to be quoted. 

Analysts say that focussing on a single economic objective is unlikely to yield the desired electoral gains to the government. The 2004 election, where the ruling party sought to highlight its economic achievements through the 'India Shining' campaign and lost the election to rural India (which could not see anything shining), serves to illustrate the point. To sum up, there is no example of ruling party winning elections in India on the back of a good economic performance.

ET AHD 21st Sept 2008

SHORT DESCRIPTION OF MY LIFE TILL NOW...

I don Know why i thought to enter this world but then anyhow managed to create one blog for myself.

I thought of postings some good poems and quotes that inspired me a lot and are still doing but then realized the actual meaning of this place...

This spot is to unveil my thoughts, my aspirations, my likes and dislikes unconditionally, here there is no one to guide my actions nor there is one to stop my actions... i m a free bird who can express anything and everything over here.

I would like you to know something about my life till 18th September 2008.

I was born on 9th July 1987, in Bombay (MUmbai), i spent my life's seven years in that city, still i feel MUMBai is a place that can replicate hell on earth... Without any biases i do believe the fact that all the people living in this city are like machines working all day, getting frustrated and then turning back to their place in jammed local trains for getting back to same routine the next day... but i always cherished what the city has given me... i Got my lessons of life in the city which is  valuable asset to me... Believe me if i wasn't there for my first 7 years of life i would have also got the same GUjju accent in my speech. When i was in my 3rd std i along with my mother came to the textile hub of India Surat also known as Diamond City, my brother and sister choose to complete thier studies in Mumbai itself.

When i came to Surat, Getting admission in a good school was that easy, moreover giving interviews to get admission for a boy who just cleared 2nd std was alltogether more difficult... i still remember my experience when i went to a school called Lancers Army where i was asked to give exam of nearly 2 hrs in a classrrom full of students making a huge noise, and beleive me Nainish Jhaveri failed the written test, i was not able to answer correctly even to one question... man that time was awful as Maths the strength of mine turned out to be my biggest weakness, but then it came to the interview with out principal Colonel Manjeet Singh, and when it came to English i actually flatered my principal with some fluency and command over the language as MUMBAI helped to create one.  I got admission in that school, and things started taking shape, but still was not that easy...

One more language proved to be a big headache for me, and this time it was out rashtriya language HINDI, in Gujarat the subject called HIndi begins when a child is in 1st Std, and in Maharashtra the subject is taught in 3rd std, so it states that i was completely new to the subject, but then there is always a way out, my teachers understood this and i became the 1st student who cleared the three years course in my 3rd std, and irony to this situation was that 1 scored max marks in sub HIndi in the entire class, and i think from there i started believing in the quote "When i decide something firmly, and you intend to get something desperately, that thing will always comes to you if provided some extra efforts over 100%".

Life went on from there, i got involved in studies, was considered as one of the obedient students of entire school, participated in all the events that came my way... Was considered as one the most popular boy of school, all  teachers were liking me as a student... There were some special things about my school, they provided us all the training that a person in Army gets, and believe me all the activities were included in our daily schedule of school and which was the main reason of our school timings from 7.30 am to 3.15 pm. This became the main reason why i always try to be more disciplined in my work and i always long for more appropriate approach to handle situations analyzing every situation. 

The best time of my school days came when i was in my 9th std, but the main reason was not the school, it was because of my, Tution for the first time in my life i was going to group tutions in one out teachers place instead of private tution that i used to take at my residence, moreover i learnt to drive a vehicle in the same year and i got my first mobilke phone in the same year, ghosh i also started to go to parties of friends birthday all alone in the same year... that year was actually the one where i started growing at full pace mentally getting aware of most of the things...

My Tenth board was also the same the only change was i again got back to my private tutions as my parents did not want to take chances with my studies, but this was again like hell for me, got passed anyhow with 78%.

Then came the turning point of my life, i was asked to choose between Science and Commerce, as i was considered a good student, people always expected me to choose Science but i made a drastic decision of taking commerce and all hopes shatered down, i confess that i also wanted to take science as a stream but you wont believe me it only came to my thought to change the stream overnight in a dream... i took commerce and also decided to stay with the same school

Then came the golden period of eleventh where i was completely changed person, got completely new approach to life, started giving more emphasis to know people then to subjects, and I made some good friends which became an integral part of my life then.

Then came my 12th, in this year i lost complete contact of most of my old friends, i don know why? but it just  happened, i made new friends like NUPUR, POOJA, AVNI, MEHUL, MANSI, PRIYANKA. This was the year where i witnessed actual formation of our group where along with the people mentioned above there were DISHANK, NIKHIL, RAHUL, myself, we had fun in Satish SIrs New Heights Classes. In the same year i got the actual meaning of a person ditching someone... i broke my friendship with a person to whom i considered as a the closest of all. BUt still life kept on moving and so did I...

Then came the second turnaround of my life where i chose to do BBA in Finance... but this time i was completely aware why i wanted to do that, all credits goes to a seminar which i accidently attended and which changed my life completely, b'Coz i havent attended that seminar i wont have choosen to take BBA neither wud i droped down to a place called Ahmedbad to join the best institute Giving that provided the course... i landed up in BKMIBA-HLBBA and next three years were most memorable years of my life till date and i think they will remain in future also...

My first year in college, i was not alone i had a friend who was my classmate who was studying with me since fourth grade, but i never considered as my closest friend, we stayed together in my Flat, Our first day in college, we were all prepared to face the ragging sessions, but things went other way instead of ragging we received warm welcome from our seniors and this made me started loving the college, 

My First lecture was taken by Prof. Chirag Trivedi in which both of us me and Kunal were asked to button up the the shirt till 2nd and the got the clue that i have to change my wardrobe as it had all sleeveless t-shirts. Then the next Lecture was of Prof BHavin Shah, believe looking at him the orientation session i thought he was not less then a hitler, but when he came in class and started teaching he was just like a student giving lecture... he passed jokes and commented on rational and irrational behavior, the hot topic that he always raised was of Marraige and Marwadis.  

We had wonderful seniors who always guided us in all aspects an one of them was BHUSHIR i thank him b'coz he was the one who guided us to join the volunteers committee and from where we both me and Knual Started out journey of organizing events, it was not that that we never organized  the events in past, we have organized one day navratri festival in our school all by ourself and then the farewell of out seniors in school and then again i played a major role to organize navratri festival again in my twelfth, moreover we also contributed during our annual functions in school as i was the headboy for both the year after tenth and Kunal was house leader...but this time in college it was more of professional touch to organize events, everything was alloted to proper person and were given responsibilities.

We had COncourse as our first event and Sayan Sir was the vent incharge, Chirag Sir informed us previously before going for the workshop that we the entire volunteer group were on our own b'coz Sayan Sir was a perfectionist and will not move to next step unless the first is done rightly... But then we had our seniors all trained and brilliant in thier work, I remember Sneha MUKIM the GS all clear abt what is to be done, Nirav, JASLEEN, NEHA, AANCHAL all of them working hard and guiding us. and yes how can i forget our Immediate Seniors Nikunj the poet, Nitesh the Bachha, MIken the person with huge abilities and aspiration with full dedication, Anvesh The dependable and Hitesh the unbeatable, Bharat the thinking machine Rutvee Miss Melodious, Parth Organizer, Bithika the creative head...  I mean we had a perfect brigade to fight any battle...

Concourse proved to be a great stepping stone for me and kunal to prove our credentials and abilities and for the first time students from 1st Year i.e. me and kunal were given direct responsibilities to handle specific duties during ANTARNAAD. Our work in the vent was appreciated a lot and as it is said the time u r appreciated a lot u tend to be more focussed on it, then came the farewell Of Sneha, BHushir and Nirav's Batch .

The second Year came where we became seniors and this time we delivered the same what we received. We had some good juniors like VIDHI, KHUSH, SALIL, KINJAL, KRATI who filled up the place that remained vacant as there were only two of us in our time...

Again we began the year with concourse, found some gr8 talents in the college... 

The year was a bit special in  way that we never had enough sponsors to sponsor our events, and one day during our vacations of diwali Nikunj, Me, Kunal, MIken and Nitesh were thinking on ways of getting sponsors where by NIkunj came up with an idea to organize a rock band competition, we all agreed to it... then we called Nitin out senior and also lead singer of rock band Called VISH to see to the feasibility of idea, then we went to CHirag Sir the cultural head of out college he also agreed to the same... then we involved more people like Anvesh, Hitesh started preparing budgets, expected revenues, Sponsorship Proposals. It all worked as a in we were about to open up a new business, but the major hurdle was waiting for us as in to get approval from out dear Director Prof. Mrs H D Trivedi, out college was expecting a NAAC visit in the same year and she was more of conservative in terms of College' name and its image but like shroud managers we somehow managed to get her approval and then came the golden period... we gave our hearts out make the event successful getting full sponsorships and by selling majority of the tickets that helped a lot get BKMIBA HLBBA in news and which also contributed entirely to support our culfest. this way colege was left with funds to invest in NAAC VISIT. the job was half done by this time, we also gave full efforts to organize all things during NAAC visit and this was the first time when i was appointed as Logistics head all alone without MIken, Previosuly Miken a dearest friend and immediate senior and i shared the duty of Logistics management during any event, but this time it was me and beleive me it was like a nightmare to keep all things intact at right time, right place, but managed somehow... the last event of the year was farewell to our closest friends and then our immediate seniors the name which i mentioned above, believe me this was the toughest time of all in my life... 

The year was also wonderfull b'coz i made friends like NIkunj JAIN, Malav Choksi and Kunal Shah, we were not from the same college but still spent long hours of day together and best time pass was playing cards and winning and loosing day in day out.

The came my third year of college the senior most batch of college, things were a bit different in the year as we enjoyed last days of my life in BKMIBA HLBBA , started to jell with the classmates, took maximum out of all the events participated in all won in some surprisingly. Brought in a new concept of RAZZMATAZZ a fashion show to sponsor the events, it was like we masters in evolving new concepts and implementing them to perfection. THen came the final days of college, we got our farewell. THIRD YEAR WAS THE YEAR WHERE I MADE TWO NEW CLOSEST FRIENDS VARUN AHUJA and AVNISH KOTHARI...

There was one major evnt happened in the same year it was CHIRU BHAI's wedding finally our dearest sir got married.

THEn the dreadfull time came when we all  parted from the college in hopes of making good future

Rajesh BHootra a friend of mine University Raker went to Pune, Kriti Bhatnagar a wonderfull friend joined IBS Bangalore...we all got scattered across the country

I joined IIPM AHmedabad, I confess this was not the place i wanted to be, but as we all know u don get what u like but there is something always there that fate wants to gift u and u have to just accept it, so did i...

Initial days was tough for me but then started making friends like AMEE, YASH, JINAL, RUSHIKA, KINSHUK, GAURAV, EKTA,  AMIT, KUNTAL and many more... 

Time has passed we got involved in studies exams knocked our doors and it went through us, then came 11th Sept when Varun went UK...

Today is 18th Sept i m still in Ahmedabad Pursuing MBA from IIPM ahmedbad in my second trisem hoping that tomorrow is always going to be better for me and people around me...

This was a short description of my life till now and will soon try to update when some new incidents occurs in my life. 

till then chao......

NAINISH JHAVERI...

Some MOtivational Quotes to INspire

You have within you right now, everything you need to deal with whatever the world can throw at you.

An arrow can be shot by dragging the bow back; similarly, if life is dragging back with obstacles, be patient. It is getting ready to launch you to greater heights.

When you fail do not take two steps back, because you may just be one step behind success.

Looking back has a history to reveal and looking forward has a future to unveil.

There are choices aplenty, you have free will to choose the path, though the destination is simply one.

What you think you are, you are. Dare to be what you think you want to be.

Life is a story about accepting challenges and taking responsibilities.

Never say quit, no matter how tough it may get; for the tougher the journey the more enjoyable the destination.

When 2morrow Starts Without Me

When tomorrow starts without me, and I'm not there to see,

If the sun should rise and find your eyes,

All filled with tears for me,

I wish so much you wouldn't cry, the way you did today,

While thinking of the many things we didn't get to say.

I know how much you love me, as much as I love you,

And each time that you think of me,

I know you'll miss me too.

But when tomorrow starts without me, please try to understand,

That an angel came and called my name and

Took me by the hand.

And said my place was ready in Heaven far above,

And that I'd have to leave behind, all those

Things I dearly love.

But as I turned to walk away, a tear fell from my eye,

For all my life, I'd always thought, I didn't want to die.

I had so much to live for, so much yet to do,

It seemed almost impossible, that I was leaving you.

I thought of all the yesterdays, the good ones and the bad,

I thought of all the love we shared, and all the fun we had.

If I could relive yesterday, just even for a while,

I'd say goodbye and kiss you, and maybe

See you smile.

But then I fully realized, that could never be,

For emptiness and memories, would take

The place of me.

And when I thought of worldly things, I might

Miss come tomorrow,

I thought of you, and when I did, my heart was

Filled with sorrow.

But when I walked through Heaven's gates,

I felt so much at home.

When God looked down and smiled at me,

From his great golden throne.

He said, "This is eternity, and all I've

Promised you.

Today your life on Earth is past, and

Here it starts anew".

"I promise no tomorrow, but today will always last,

And since each day's the same day, there's

No longing for the past".

"But you have been so faithful, so trusting and so true,

Though there were times you did some things,

You know you shouldn't do".

"But you have been forgiven, and now at

Last you're free,

So won't you take my hand now and share

My life with Me".

So when tomorrow starts without me, don't

Think we're far apart,

For every time you think of me, I'm right here

In your heart.