Emerging Patterns of the Indian Economy

Introduction
While the Indian Economy has been on a fast track of revolutionary changes over the past
decade, Indians have experienced a super fast change in almost every sphere of their life. People
have been exposed to such changes all of a sudden. While these economic changes turned into
blessings for some, they turned a curse for a few and from an economic front, these were
blessings in disguise. The world sees India with a new eye now. From being seen as a pain in the
world economy due to huge population, lack of education, facilities & infrastructure, India is
now seen as an opportunity and a harbinger of a new age revolution in many spheres of activities
to such an extent that Indians are now acquiring companies overseas and turning them around.
There have been numerous instances of foreigners coming to India to learn on how such a
turnaround happened. Dr APJ Abdul Kalam, former President of India, once quoted, Dreams,
Dreams, Dreams. Dreams turn into Thoughts. Thoughts turn into Actions. While we all have
the results of the actions before us in black and blue, we ought to understand how the thoughts
have changed over a period of time and brought in these actions to life. On a deeper note, what
dreams propelled these thoughts that transpired on to the minds to bring us where we are today. It
is also interesting to note that not everyone is a part of this rally.
A significant portion of India remains where it was a decade ago. In the coming decades, it will
be possible for us to grow only if this significant portion decides to take a part in the race. While
so much has been written, spoken and discussed about this revolution, there are ample proofs
that say that nothing has changed. This study will go further to find out whether we live in a new
world or whether we are just the same old wine in a refurbished bottle. At this juncture, its quite
interesting to note that old wine is far more valuable than the new one. India is a land of culture,
traditions, customs and strong foundations that has quickly adapted to the revolutionary changes
that the western world has brought into our lives. However, till now, we have sustained and been
going strong because of the strong foundations that we have been built upon. Days are not far
when the new blood will be born without these foundations but some other foundations and
principles of life. In such a scenario, how does an economy adapt to deal with this new lot of
people that have a totally different approach to life?
These are perhaps reasons why the strong western economies collapsed. What does a nation do
when most of its population is on the internet 24x7 browsing websites like Facebook? How does
the nation bring about productivity? What happens when the nation has to promise a minimum
wage irrespective of the type of work? What happens when promises overtake logic on the
macroeconomic front? A few such examples of results are before us - Greece, Italy, Germany,
Portugal, etc. Time is not very far when India will be featured in this list if we continue to follow
the progress of the western world. In such a scenario, how do our economic policies need to be
shaped? Is it good for us to continue being the same old wine or should be bring in something
new and risk losing the value of the old wine? The study will work on these areas to find out the
deeply hidden implications of the changes that the Indian economy is witnessing and will attempt
to point out what change will have what impact on the growth of the economy.
Review of Literature

A large number of international institutions like PWC, KPMG, McKinsey, etc. have written about
the dynamics of the Indian economy. To mention a few, India from Midnight to Millenium by
Shashi Tharoor, The Idea of India by Sunil Khilnani, In spite of the Gods by Edward Luce,
India Unbound by Gurucharan Das, The Algebra of Infinite Justice by Arundhati Roy. Some
works like those by PWC, World Bank, Central Asia Caucasus Institute not only mention about
the pace of growth but also offer solutions to sustain growth as anything that goes up faces a
great risk of crashing. Growth bubbles created must be filled by the necessary stuff to energize
them into power generating resources lest they burst creating an economic depression like some
of the greatest economies of the world have landed into. We have a huge volume of information,
advanced analytic highly processed statistics and highest levels of science & technology
research studies but none of these over the decades have been able to alleviate the basic problems
of human life like poverty, unemployment, etc.
Rationale & Background
While nations like ours, China, Brazil, US and the UK are registering growth numbers, its
nations like Bhutan that have been hitting highs on the Happiness Index. Details like this go to
prove that there is a missing link despite all the monetary planning, budgetary allocations,
programs and plans to develop the economy. This study aims to discover such links that motivate
the actions, the thoughts behind them and the dreams that instigate these thoughts on to the
minds of the people. After all, its the people who ultimately move the economy. The
Government policies and economy do play a role but the supremacy of the players will rule all
the time. The study will do a level deeper into analyzing the growth numbers. It will not be
restricted to patterns of growth but will go into finding the reasons for such patterns of growth.
What will be the result of an economy where everyone is a millionaire? What happens to the
construction industry after all the roads are built and everyone has a house to live? Who will
work as a plumber / cobbler / farmer if everyone is educated and wishes to run a business or be
employed in a Fortune 500 company? Though there has to be equality of labor, what will be the
situation if we practically treat all labor equally? What will motivate people to become an
engineer or a doctor or a scientist if a sweeper has the same value as them? Such are the
questions that the study plans to address.
As a part of my job as a banker over the years, I have been going through a lot of data and
research activities. There have been many instances where some of most advanced indices and
numbers appear quite meaningless considering the economic scenario at those times. The stock
markets react differently to the same set of numbers at different times. This behavior evidences
that there are logical gaps in the systems and processes that we follow. To eliminate such gaps,
we have to look into the roots from where these fruits (numbers) originate. The study aims to
accumulate knowledge through research on people, their lives, aims, aspirations, growth plans
and their thoughts on different instruments, financial and non financial, that play a vital role in
decision making process of the individuals and thereby define the nations economy. To quote an
example, there has been a varied pattern in the retail mutual fund investments in India. While the
data might signify that people have lost interest in mutual funds and thereby, the capital markets,
the fact may be that people might not be finding a right way to invest into mutual funds as
SEBI/AMFI have put a tight cap on agent commissions and a large number of agents have quite

from the mutual fund sales business. Banks might have seen this as an opportunity to sell
insurance products to the customers who look for mutual funds. Later, we saw SEBI/IRDA
putting a cap in agent commissions for ULIP products and banks found it more profitable to sell
endowment plans, thereby leading to an increased investment in debt instruments. However, the
data, when solely seen, indicates that individual interest in stock market related products (first
MFs and then ULIPs) has declined. The research plans to look beyond what is available before
the eyes. Further, the study also plans to go deeper into the individual level and understand what
made people to take decisions to bring about such changes in their life, be it a change in their
home, a change of a car, a change in their spending approaches, a change in their contention with
their job and so on.
Indian economy is robust and in such a gigantic place, one can find every kind of happening.
Reliability is one very important factor for anything that comes into our lives. The study shall
aim to get into reality of individual lives and through their voices, express thoughts and actions
to bring out the steps that we ought to take if we have to realize the dream of being the crown of
the world in the coming decades.
Aims & Objectives
Lets consider this. Smoking has been consistently projected as an evil that only harms the
smoker but also the people around him. In India, smoking has been banned in public places.
Later on, the Government even decided to mention on all the cigarette packs in bold letters,
Smoking Kills. Further, it was proved that smokers are prone to cancer. Smoking on screen
(movies, TV, etc) was also banned. However, with each step to curb this evil, the Indian Tobacco
Company and all its competitors have only been seeing rising number of cigarette sales. Whats
more, we even have a new class of active smokers forming a mass percentage of the smokers
community, the Urban Women. What went wrong? Why did not of such steps bring down
smoking numbers in India. The study aims to find solutions to such problems that appear to only
increase with each solution that has been tried to solve them. Some of the very specific aims of
objectives of the study will be to explore the following fields and learn the underlying elements.

The changing trends in lives of such part of population that has been supplied with more
money than it actually requires to lead a comfortable life and thereby, their considerations
for luxury.

Drastic changes in the thoughts of urban youth. While till 2000, we had a generation
change every 15-20 years, we can now see a generation change every 3-5 years.

Peoples opinion on the meaning of various points of life like education, job, work,
marriage, love, children, etc that have been changing over the years and how such a
change will impact the nations GDP.

What do people do now to spend their free time or whether they even get any free time?
What is the peoples idea of quality time? Do people still consider visiting a temple?
What age category thinks what about God, Religion, Caste, etc?

What are the peoples thoughts on owning a house? How do they plan to work on their
dreams?

What people think about money, banks, finances, investments, etc?

Who are the most important people in current days peoples lives? How significant are
parents in the relationship chain? How such chains affect the national growth?

Is there a line drawn to define freedom? How much freedom is free?

What do parents tell their children now? What do they expect from their children? What
do current generation of children expects from their children and what did the current
generation of parents expected, when they were children, from their parents?

Changes in peoples tastes, eating habits, cooking habits, etc.

Changes in peoples approach to topics like health, fitness, communication, shopping,

technology, sports, defense, national issues, politics, etc.

How do people decipher words like infrastructure, environment, agriculture, trade,

finances, credit policy, inflation, university, governance, poverty, etc. and how such
definitions varying define the quality of life, standards of living, efforts of individuals,
decision making abilities and thereby, undoubtedly, the national growth.

Further, the most important objective of the study will be to ascertain how these changes will
affect the nations growth in the long run. After all, changes in thoughts are ones that drive the
nation over the long run. In one of the most advanced cities of the world, London, we have seen
instances of the citizens stealing, looting and resorting to illicit methods to meet their basic needs
for life as they were unemployed. The study will be aimed, as already mentioned, to get deep
into the subject, go beyond the causes and reasons, and establish the points that drove these
causes and reasons into our lives.
Hypothesis
The study will apply important economic theories into analyzing the data in an all new approach.
For example, the law of diminishing marginal utility may even be applied to education and not
just water & food. When we do so, we come out of the box of thinking that education, no matter
how much, is always useful. When we come out of this thought & apply the law of diminishing
marginal utility, one will realize that too much of information serves no purpose. We live in a
world that is overloaded with information. Something that comes today becomes outdated
tomorrow. In the process, our brains have been losing their memory retention capacities. We
might use a calculator to find out what is 2 + 2.

The study aims to apply these laws to such fields to which they have never been applied before.
The study will also make use of the basic laws of economics like Supply & Demand theories,
Capitalism & Socialism theories, Efficient Markets hypothesis, Life Cycle hypothesis, Game
Theory and other laws to find the hidden meanings of the data available. Further, the study shall
aim to analyze what effect these have been having on the progress of Indian economy and how
we should deal with these to ensure our economy moves on a right as well as a righteous path.
Methodology
The first step of the research methodology will be to define the requirements of the data that the
study will require. As per the preliminary plan, most of the economic data is available from the
CSO, budgetary documents, Planning Commission, Trade Bodies, Organizations like BSE, NSE,
AMFI, SEBI and various other institutions.
The next step will be to meet people to find out their views. This would involve meeting
economists, government officials, teachers, trade bodies, etc. who will provide a general view of
the trends. Further, to strengthen the understanding, the next step will be to meet people from
different walks of life, viz. students, engineers, farmers, politicians, housewives, auto drivers,
etc., who will provide an insight into the topics of discussions and their views on the changing
economy and how it impacted their thoughts and actions. A lot of emphasis will be laid on how
their aims, goals and dreams have been changing over the years due to the changing world. Who
of them saw this as an opportunity and who of them saw this as a killer coming their way and
how did these thoughts impact their lives?
Both qualitative as well as quantitative research will be undertaken in the study. Efforts will
primarily be done to understand reasons that govern human behavior and not just the behavior.
Questions shall be broad based to learn more about the topic of discussion and will further focus
to greater details to narrow down on a theme. A systematic empirical investigation of numbers
will be done at different places to gather data that will be used for statistical analysis. Sampling
& Derivative Research will also play an important role in the process of establishing
relationships between the variables.
Significance of the Study
Mumbai is one the worlds most posh city where some of the worlds richest people live and
large volumes of business happen. Yet, why does near to half of the population in Mumbai live in
slums? In India, minimum food requirement for a person in rural areas (2400 calories) is more
than the person living in urban (2100 calories) areas and how do we plan to meet this
requirement considering that the production as well as the land under production is reducing
drastically every year? Several schemes like Swarnajayanti Gram Swarojgar Yojana, Jawahar
Gram Samridhi Yojana, Prime Minister Rozgar Yojana, etc. have been sanctioned by the
Government but these have not been able to do much about the unemployment situation in the
areas that these schemes target. Unemployment of different types like - Disguised
unemployment, Seasonal unemployment, Structural unemployment, Cyclical unemployment,
Technical unemployment, etc. continue to haunt the Indian economy. A new scheme titled The
Rural Landless Employment Guarantee Programme, aiming at generating gainful employment,

creating productive assets in rural areas and improving the overall quality of rural life, could not
do much to solve these issues.
This is just one case scenario to understand how important is this study that plans to go deeper
into the reasons behind such issues. For example, one reason might be that the farmers are lured
to sell their lands to the industries and housing societies who offer them a mouth watering deal.
Though we say, farmers are the backbone of the nation, the quote is not as attractive enough
compared to the quote (price) that the builders give the farmer to sell his land. What needs to be
done to motivate the farmers to continue their work? Such are the questions that the study plans
to address.
Thus, the study is very significant as it will help in understanding the underlying elements. As
already mentioned, India is on a super fast road of growth and there are a lot of potholes &
speed-breakers on the way. While making effort to remove all hurdles to make a smooth sailing
is the motto of the world and thereby, countries are called developed economies, the study will
rather do deep and might find out that it is wise to cover all the potholes but we need to have the
speed-breakers on the road to monitor the economic progress and be in a position to exercise
control over the nation. A lot will depend on the thoughts, actions and dreams of Indians in
deciding how far India will go.
Bibliography

Websites
o Wikipedia
o Planning Commission
o India Budget
o SEBI
o National Portal of India

Reports
o PWC report on Indian Economy
o India report by Cushman & Wakefield
o The India Opportunity by KPMG
o Janagraha Urban Governance in India by Planning Commission

Others

o Times of India
o Economic Times
o Business Standard