Economic Reforms 1991

Devalue the Rupee Take steps to liberalize economy, free private sector from onerous controls Initiate Privatization to raise funds and cut government commitments Permit more Foreign Direct Investment and Foreign Indirect Investment Remove Import Restrictions Released Entrepreneurial Energy!

Achievements
Significant and sustained improvement in growth rates. (now 6-8% sustained) Service sector booming. Reduced dependence on agriculture and fickle monsoon FDI inflows build-up reaching over 17-18 bn Forex. reserves climb to over $ 300 bn Select sectors become globally competitive and leaders

Advantages
Over 5 decades of freedom, power of ballot-box understood Economically weak / backward individuals enter political mainstream Vote banks" elect leaders to represent poorer / weaker segments Political parties respond to new realities

Advantages
Increasing longevity High % of young education investment employment creation managing expectations Dependency Ratio Insights young as % of working age old as % of working age Gender Politics high female illiteracy and impact skewing of male-female mix by choice; sex determination and selective abortion of female fetus affirmative action and greater involvement of women in workforce, local government and legislature

Strengths
20 million strong worldwide, over 2 million in US High skill levels and high wealth ($ 300 bn. estimate) Emotional identification with India - patient capital and know-how providers (reverse "Brain Drain) Multicultural fit - at home in India and abroad

Opportunities
Globalization Hyper Competition De-regulation and coordination of regulation globally Free trade" philosophy dominates Technological Innovation accelerated pace

Opportunities
India has matured Institutional Intermediation has given way to greater reliance on Capital Markets as financing mechanisms Trading Volumes, Number of Listed Firms, Age of Equity Exchanges and Technology are all at or exceeding world standards Capacity of promoters to tap capital markets improved dramatically

Future Developments
Unintended Consequences of De-Regulation Pharmaceuticals - Recognition of Product Patent v/s. Process Patent of Old Dr. Reddy Labs Ranbaxy Laboratories Ltd. Aurobindo Pharma: UK Patent last week Others .. Open Skies Agreement Chinese Saying - Problems are Opportunities in Disguise!

Advantages
OECD study of increased R&D investment in developing countries Indian Engineering Talent Indian Biotech Talent Lower Cost Research Scientists fundamental research affordable High and Growing Supply of Science and Technology Graduates

New Economy
Global reputation for quality and dependability: More CCM certified Software Firms Than US, Europe, Japan Rest of World Combined! Call centers and service support to business process outsourcing (BPO) Knowledge process outsourcing (KPO). The quality and scaling up aspects of India.

New Economy
Other IT enabled Services Pharmaceutical Manufacturing Outsourcing Unintended effect of "process to product patent" recognition by India high quality process know-how and manufacturing abilities IT expertise facilitates bio-tech and medical research

Manpower
Bottom of Pyramid Half the world's poor Huge Illiteracy Beyond Social Infrastructure - education, health care, job training etc. Rural and remote & urban poor and homeless though not hopeless! Politically "empowered" - power of the ballot-box in a functioning democracy! Motivated, inspired and street smart

Manpower
Top of Pyramid Middle and upper class bigger than the population of the US Relatively high level of education - ticket to future Confident, Articulate, large % English speaking Money to spend and spare (Hi savings rate) Big Consumer Market - segment demanding quality Multicultural and comfortable with diversity

Threats
Not everything is rosy and failed promises are not unknown! Poor Infrastructure and Impact on Manufacturing Illiteracy and how to mitigate it Sectarian Violence Potential Terrorism - Cross-border instability AIDS - other Pandemic Potential Sheer Scope of Demands - jobs creation estimate need minimum 145 minimum jobs needed. Corruption and corrosive impacts