www.businessworld.in RNI NO. 39847/81 I 13 JANUARY 2024 YEAR AHEAD SPECIAL Rs 200 MODERATING INFLATION, PROSPECTS OF LIMITED MONETARY POLICY EASING AND POST-ELECTION REFORMS ARE EXPECTED TO ACCELERATE THE INDIAN ECONOMY IN THE NEW YEAR WHAT TO EXPECT IN 2024
4 | BW BUSINESSWORLD | 13 January 2024 AT THE END OF A YEAR described as one of the bleakest in recent history, an outlook report of the International Monetary Fund had stated, “The worst is yet to come, and for many people, 2023 will feel like a recession.” A consensus emerges that 2023 has been able to overcome the financial challenges on its path. The global economy has shown resilience, notwithstanding geopolitical tensions, as has India’s domestic economy. The new year begins with euphoria over the inauguration of the longawaited Ram Mandir at Ayodhya, a majestic architectural showpiece that has spawned state-of-the-art infrastructure around it. Just the first phase of the Ayodhya airport sprawls across 6,500 square metres of terminal space and the upgraded three-storey railway station is equipped with lifts, escalators and food plazas. Obviously, this technologically embellished pilgrimage of the Hindus is looking beyond the 6,000 celebrities, sages and monks who will congregate there on 22 January. Ayodhya is attired to host Hindu pilgrims for years to come. On 1 February Union Finance Minister Nirmala Sitharaman will present a vote-on-account of a year of happy macroeconomic indicators. The GDP numbers of the first half of FY2024 have prompted the Reserve Bank of India (RBI) to exult that the Indian economy had “left sceptics gasping and woefully behind the curve.” The central bank expects the growth momentum to be sustained. Once the inflationary spiral is checked, the RBI will have room to ease its monetary policy. The year ahead will witness 70 elections worldwide, including the national general elections in India. If the outcome of the polls in the three Hindi heartland states are an indicator, Prime Minister Narendra Modi will be able to fulfil his vow to make India the third-largest economy in his third term. Key reforms are anticipated in labour, land, agriculture and energy policies beginning perhaps, with the first Union Budget in July. Our cover feature looks ahead at this year of transformation and brings in ground reports and analyses from sectors like real estate, auto, IT, FMCG, MSMEs and others. Do read our interview with someone I see as a global leader, Mr Piyush Pandey. His work across the last four decades have impacted advertising, influenced public opinion and made a difference. Piyush transitions into an advisory role at Ogilvy but we expect more from this super leader in the times ahead. The marketing and advertising sector per se is gearing up for a busy 2024 as we see home-grown agency RK Swamy prepare for its IPO. This issue also features the next generation of marketing leaders in one of our special initiatives. Of course, we also bring to you all our regular columns and features that you look forward to. We wish you a Happy New Year! ANNURAG BATRA [email protected] LOOKING AHEAD TO A BETTER MORROW EDITOR-IN-CHIEF’S NOTE
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13 January 2024 | B W BUSINESSWORLD | 7 MAILBOX YOUR COMMENTS TALK BACK THE BIG CLIMATE FINANCE QUESTION The UAE Consensus falls short of real action on funding for vulnerable countries including India that carry the unjust burden of climate change EXCLUSIVE INTERVIEWS VIVEK NARAIN FOUNDER & CEO, THE QUORUM ABHAY SOI CHAIRMAN & MD, MAX HEALTHCARE www.businessworld.in RNI NO. 39847/81 I 30 DECEMBER 2023 Rs 200 CLIMATE TOOK A BACKSEAT? This refers to the editorial (“ Promises Taking Back Seat,” BW, December 30) . In a world hurtling towards an environmental catastrophe, it’s disheartening to see nations continuously failing to take substantial action on the climate crisis despite their lofty promises. The prioritisation of money, greed and power over the environment’s well-being overshadows the urgent need for green initiatives. The repeated shortcomings of international climate summits have led to scepticism about their impact and it’s clear that holding nations accountable for their commitments is crucial. Leaders must navigate the complex interplay between global responsibilities and domestic pressures, but it’s evident that a shift to green industrialisation is imperative for sustainable economic growth. Collaboration and knowledgesharing on a global scale are key to making green technologies accessible to all and adequate funding is crucial to drive meaningful climate action. ALARMING CALL This refers to the editorial (“ Wake-up Call,” BW, December 30). As the world focuses on the impact of climate change on the economy, India stands at a critical juncture. By taking proactive measures to reduce carbon emissions, India could potentially gain $11 trillion by 2070. While cleaner energy is often discussed as a solution, the role of innovative technologies cannot be overlooked. However, it’s important to note that while technology can benefit the environment, it also presents challenges, such as the increasing electronic waste. Despite this, emerging technologies like artificial intelligence, the Internet of Things and blockchain offer promising ways to promote sustainability. As the article highlighted, Indian experts emphasise the urgency of transitioning to cleaner energy sources, given the country’s heavy reliance on traditional energy. This debate underlines the complex interplay between technology, economic growth and environmental sustainability. ABHINAV VERMA, EMAIL BLIPP THIS PAGE TO GIVE US YOUR FEEDBACK INSTANTLY Submissions to BW |Businessworld should include the writer’s name and address and be sent by email to the editor at [email protected] or by mail to 74-75, Scindia House, Connaught Place, New Delhi-110001 DIVYA KONARK, EMAIL
8 | BW BUSINESSWORLD | 13 January 2024 CONTENTS VOLUME 43, ISSUE 06 13 JANUARY 2024 Cover design by DINESH S. BANDUNI Great Expectations There are strong indications that India is heading for a protracted phase of accelerated urbanisation, industrialisation, rising household incomes, and heightened energy consumption 34 12 Jottings What does 2024 portend for the Indian economy? The 2024 Indian woman; Year of valuation markdowns? In Vogue in 2024, and more 14Columns Minhaz Merchant (p. 14); Vikas Singh (p. 16); Srinath Sridharan & Shailesh Haribhakti (p. 18); Krishan Kalra (p. 24); Prakash Iyer (p. 30);Kiran Karnik (p. 31) 2024: THE OUTLOOK 38 Macroeconomy 50 Real Estate 54 Telecommunications 56 IT & IT Services 60 Automobiles 66 Startups 68 FMCG 70 MSME 2024: COLUMNS 40 DK Srivastava, EY India 42Pradeep Gupta, Anand Rathi Group 44Pratik Agarwal, Sterlite Power 46 Srivatsan Iyer, Hero Future Energies 48 Sandeep Gulati,Egis 52 Shishir Baijal, Knight Frank India 63 Sohinder Gill, SMEV 64 Ayush Lohia, Lohia Auto 74 In Conversation Padma Shree awardee and long-time boss of Ogilvy India on how life will change for him as well as the agency, tech enablement , and much more Photograph by Unsplash WHAT IN TO EXPECT 2024
9 | B W BUSINESSWORLD | 13 January 2024 The pages in BW Businessworld that are labelled BWi or Promotions contain sponsored content. They are entirely generated by an advertiser or the marketing department of BW Businessworld. Also, the inserts being distributed along with some copies of the magazine are advertorials /advertisements. These pages should not be confused with BW Businessworld’s editorial content. TOTAL NO. OF PAGES INCLUDING COVER 116 76 Tribute To An Adman Chintamani Rao, Strategic Marketing and Media Consultant tells the story of Piyush Pandey, the outgoing boss of Ogilvy India, who from being an account supervisor rose to creative superstardom 80 In Conversation Sundar Swamy, CMD, and Shekar Swamy, Group CEO and Whole Time Director of RK Swamy, on the company’s evolution, challenges faced and much more 82 Spotlight Harsha Razdan, CEO, Dentsu South Asia on the company’s strategic vision for 2024, marketing and tech transformation 30 UNDER 30 MARKETERS 86 Abhishek Kumar, 4700BC 86 Akshat Kumar, Narayana Health 87 Aman Grover, Blackberrys 87 Ankita Bakshi, BBC Studios 88 Ashish Dubey, Innovaccer Analytics 88 Chintan Buddhadev, CoinDCX 89 Deepak Pandey, MIVI 89 Hiya Arora, Turtle Wax India 90 Jayanth Jonathan, Social Beat 90 Jinal Dave, BC Web Wise 95 Sakshi Vishwa, boAt 95 Sanchit Mittal, Britannia Industries 96 Shalini Jha, Groupo Bimbo 96 Shiva Sharan, Strobe Works 97 Swetha R. Nair, Tata Power Company 97 Tanya Jakhar, Britannia Industries 98 Tarun Makhija, TarunSpeaks 98 Tom Stany, Boult 99 Udit Narayan Singh, mjunction Services 99 Utkarsh Srivastava, WinZO Games 100 Vaishnav Shetty, Allcargo Group 100 Vidit Sidana, ITC 113 Bookmark A review of Floor Coverings from Kashmir – Kaleen Carpets, Namdah, Gabba, Air Rugs and Wagon Mats by Prakash Panda 91 Meghana Chandani, Social Beat 91 Namrita Khurana, ITC 92 Prashant Dalwani, Blinkit 92 Pritish Mahadik, Traya 93 Pulkit More, ITC 93 Reshmi Menon, Manetain 94 Ronak Sharma, Google India 94 Ruhani Singh Mann, Brand Talk 84 YOUNG GUNS Thirty future marketing masters, under the age of 30 years, whose strategies are making a notable difference to their businesses 114 Last Word Dipali Goenka, CEO & MD, Welspun Living on the outlook for the Indian textile industry
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12 | BW BUSINESSWORLD | 13 January 2024 JOTTINGS Photograph by bbk22 THE INDIAN ECONOMY IN 2024 AS INDIA STEPS INTO 2024, the economic picture demands a careful look. While Manufacturing PMI (Purchasing Managers Index) suggests some growth, Services PMI’s moderation adds a cautious note. The small improvement in the total unemployment rate to 9.2 per cent in November needs a closer look. It’s not a big shift, especially in the context of the prevailing challenges, particularly in rural unemployment. The expected recovery, especially in rural demand, seems uncertain. The second quarter of FY2024 shows GDP growth from investments and government spending, but private consumption remains weak. Manufacturing and construction look promising, but the services sector is losing steam owing to changing spending patterns. CareEdge – a knowledge-based analytical group offering services in Credit Ratings – predicts a 6.8 per cent GDP growth in FY2024, but doubts linger, given the fragile state of the economy. The CPI inflation, at a threemonth high, reflects some concerns with rising vegetable prices and stubborn inflation in non-perishable food items. Core inflation seems to be going down, but CareEdge forecasts CPI inflation of 5.8-6 per cent in December. Experts expect an average of 5.4 per cent inflation for the entire fiscal, but risks are leaning towards higher inflation, especially with uncertainties in food production. In trade, a temporary relief comes from lower oil and nonoil imports in November. India’s merchandise trade deficit is expected to be $166 billion for FY2024, a bit better than the previous year’s $189 billion. However, challenges remain, and the economic outlook for 2024 calls for careful management and intervention. — Ashish Sinha The 2024 Indian Woman “I QUIT WRESTLING,” said a teary-eyed Olympic medallist Sakshi Malik after Sanjay Singh was elected president of the Wrestling Federation of India (WFI). Singh is a close aide of former WFI head Brij Bhushan Sharan Singh, who has been accused of sexual harassment. Soon after, the sports ministry suspended the newly-elected body amidst a nationwide uproar. A controversy erupted after several high-profile sportspersons levelled allegations against Singh, a Bharatiya Janata Party MP. Olympic medallist Bajrang Punia returned his Padma Shri award as a mark of protest. Now, Vinesh Phogat has decided to give back her Khel Ratna and Arjuna awards to Prime Minister Modi. These protests come at a point in history when India has a woman President and many women in leadership roles in spheres as diverse as politics, the corporate sector and academia. Yet many others falter in an unjust world. But can we afford to let them quit? In his post-budget webinar on ‘Economic Empowerment of Women’ in March 2023, PM Modi said, “The results of efforts for women empowerment are visible and we are feeling a revolutionary change in the social life of the country.” True though that statement is, as Malik and her peers found, victims do not always find sympathy. Many bridges still need to be crossed if women are truly to become equal partners in India’s growth story. — Abhishek Sharma Photograph by Tarun Gupta
13 January 2024 | B W BUSINESSWORLD | 13 YEAR OF VALUATION MARKDOWNS? SOME INDUSTRY LEADERS predict that 2024 could be worse than 2023 in terms of capital allocation to new-age companies. The focus for Indian startups is turning profitable in anticipation of business restructuring, layoffs and possible bankruptcy in 2024. Founders and investors believe that valuations in India have adjusted, similar to markets like the United States. Companies with enough cash are avoiding new fund raising to protect their valuations. However, the true assessment of corrections in valuations will unfold when the investment cycle resumes. On the other hand, startups running out of THE YEAR 2023 saw global economic uncertainty, geopolitical tensions and the climate crisis impact the fashion industry. The impact of these will continue in 2024. Industry pundits feel that fashion markets in China, the United States and Europe will likely face headwinds. Some of the trends we will see in 2024 are the increased use of Generative AI across processes in the fashion industry. And of course, sustainability will rule. Another interesting trend that is coming up is the increase in demand for ‘Gorpcore’. What is Gorpcore you ask? The consumer mindset has seen a shift towards health and wellness, so we are seeing Gorpcore in vogue. The Gorp bit in the term is a reference to hiking – good ol’ raisins and peanuts – trail mix that hikers carry. Anyhow, coming back to the fashion trend, it is essentially comfy and highly functional clothing that is slowly being considered high fashion. What’s the appeal? The association that these clothes ha ve w ith expensive outdoor activities like skiing, sky diving, hiking and the like. Also, they are comfy, practical and chic. It is a recent phenomenon that people wear these outfits as street wear and combine them with designer items. McKinsey’s latest report says that the industry will have to strike a balance between managing uncertainties and making the most of opportunities. — Jyotsna Sharma In Vogue in 2024 cash are likely to start fundraising next year. The year 2023 was challenging for startup funding, and only two new unicorns emerged – Zepto and Incred. In 2021, the ecosystem had seen 40 new unicorns. The focus has shifted towards profitability and more efficient cost structures. Most industry stakeholders expect market sentiments to improve for new-age companies and some companies like FirstCry, Ola Electric and Awfis have filed for IPOs. In terms of funding, 2023 saw record low funding in seven years. Startups that fail to sustain a healthy cash-flow will be forced to raise fresh funds at lower valuations. To maintain the current valuation, it is expected that startups would have to wait for the market to normalise. Hence, keeping a tab on cash-burning verticals in 2024 is crucial. — Nitesh Kumar Photograph by Sonulkaster Photograph by Karrastock Photograph by Rolphus/Canva
14 | B W BUSINESSWORLD | 13 January 2024 ITH INDIA’S GDP in the July-September 2023 quarter beating all estimates to record growth of 7.6 per cent, is India’s economic engine now firing on all cylinders? Other data points are positive as well. Goods and Services Tax (GST) collections in November 2023 were 15 per cent up year-on-year at Rs 1.68 lakh crore despite fewer working days in the month due to Diwali. The S&P Global India manufacturing purchasing managers’ index (PMI), a bellwether for economic activity, rose from 55.5 for October to 56 for November. Following the surge in the BSE Sensex, the market cap of stocks listed on the BSE rose above $4 trillion for the first time. Only four countries (the United States, China, Japan and Hong Kong) have higher market caps. The BJP’s victory in three assembly elections – Rajasthan, Madhya Pradesh and Chhattisgarh – has added momentum to Indian stocks ahead of the 2024 Lok Sabha poll. With GDP growth for the first half of 2023-24 averaging 7.7 per cent, global and Indian financial institutions have upgraded their forecasts for India’s full-year GDP growth. State Bank of India now projects India will grow at seven per cent this fiscal. Morgan Stanley projects 6.9 per cent growth in 2023-24. Barclays, Citigroup and Bank of Baroda forecast full-year growth at 6.7 per cent. The Reserve Bank of India (RBI) has cautiously stuck to its prediction of 6.5 per cent growth in 2023-24. But for that to happen, growth in the second half of this fiscal – October 2023 to March 2024 – would need to fall to 5.3 per cent. That is unlikely to happen, even assuming the most pessimistic scenario of a spike in crude oil prices to $100 a barrel and further trade disruption due to the Russia-Ukraine war which, as sub-zero winter temperatures set in, is likely to remain stalemated. What are the factors driving sustained Indian economic activity even as other large global economies slow down? Manufacturing, construction, electricity, mining, gas, water and other utilities are boosting growth. Services continue their upward trajectory. As AI-focused solutions gain traction in the West, Indian IT companies expect a better second half this fiscal after a tepid first half. Third quarter results from TCS, Infosys and HCL Tech, India’s three largest IT services companies, will be announced in the second week of January 2024. They will be closely watched. Banking on Growth The banking, financial services and insurance (BFSI) sector has been an outstanding performer. It accounted for nearly 35 per cent of total corporate profits in the July-September 2023 quarter. A key factor is the years-long clean-up of banks’ nonperforming assets (NPAs). As Roshan Kishore, data editor of Hindustan Times, wrote: “At the peak of the bad loan crisis in 2017-18, gross NPAs accounted for 11.2 per cent of total loans and Growth Engine Revs Up W COLUMN Minhaz Merchant MINHAZ MERCHANT The writer is the biographer of Rajiv Gandhi and Aditya Birla and author of The New Clash of Civilizations (Rupa 2014). He is founder of Sterling Newspapers Pvt Ltd., which was acquired by the Indian Express Group
13 January 2024 | B W BUSINESSWORLD | 15 cent and 79.2 per cent in 2010- 11 and 2014-15. This number has fallen almost consistently in the period after that and it was around one-third in 2020-21 and 2021-22.” The reason for this fall in NPAs? Chronic bad loans incurred during the infamous “phone-banking” era of 2004- 14 were written off. The government had to recapitalise public sector banks to ensure they met statutory capital adequacy ratios. Since most of the decadal phone-banking liabilities were borne by PSBs, private banks like ICICI Bank and HDFC Bank escaped largely unscathed. It’s important for the Indian economy’s sustainable growth that banks have the liquidity to spur credit offtake by the corporate sector. So far investment, especially in infrastructure, has been boosted by government-financed capex. The private sector had long complained of credit availability in banks. That no longer holds good. If the private sector now joins the government to invest in manufacturing and infrastructure, India’s economy can once again beat economists’ forecasts of muted growth in 2024-25. Other data metrics meanwhile are improving as well. Inflation has moderated. The wholesale price index (WPI) has been negative for months. The Consumer Price Index (CPI) has dipped to 4.87 per cent, well within the RBI’s comfort range of 2-6 per cent. Turbocharged India continues to be the world’s fastest growing large economy. China’s economic growth is unlikely to breach four per cent this fiscal while growth in most of Europe is set to stagnate on either side of one per cent. The United States is among the few Western economies displaying resilience. Its full-year GDP growth could spurt to three per cent. The US, unlike Europe, is an oil exporter and pumps as much crude, 10 million barrels per day, as Saudi Arabia. Its military-industrial complex (MIC) is busy supplying weapons to Ukraine. Protected on both sides by the Atlantic and Pacific Oceans, the US does not fear attacks on its energy infrastructure as Europe does. Around 1.5 million legal immigrants enter the US every year. They add talent, energy and enterprise to the US economy. Like heterogenous India, diversity is the secret sauce underlying America’s economy. advances of all Scheduled Commercial Banks (SCBs). This number was 14.6 per cent for Public Sector Banks (PSBs). This has fallen consistently since then and was 3.9 per cent and 5.2 per cent for SCBs and PSBs according to RBI’s June 2023 Financial Stability Report. “An analysis of RBI data on movement on NPAs for SCBs shows that the biggest reason for the fall in NPAs in absolute terms has been a decline in creation of new NPAs. This becomes clear if one looks at addition of new NPAs as the share of opening balance of NPAs in that year. Between 2009-10 and 2015-16 the addition to NPAs in each year was higher than the opening balance in three years (2009-10, 2011-12 and 2015-16), at least 90 per cent of the opening balance in 2012-13 and 2013-14, and 83.9 per The private sector had long complained of credit availability in banks. That no longer holds good. If the private sector now joins the government to invest in manufacturing and infrastructure, India’s economy can once again beat economists’ forecasts of muted growth in 2024-25 Photograph by MaxGoth
16 | B W BUSINESSWORLD | 13 January 2024 I NDIA IS AT A CRUCIAL JUNCTURE and on the brink of piercing the Rs 2 lakh per capita income threshold. This is more than a numerical milestone. The surge in individual income can become the cornerstone of India’s enduring economic ascent, fostering ecological vibrancy, social mobility, and widespread prosperity. The key question is whether this can act as a catalytic force, reshaping India’s economic narrative. To do so, India needs to be a maestro, skilfully manoeuvring the challenges and harnessing the potential of the intertwined waltz. It is a moment that beckons prudent policies, strategic investments, and a collective determination to navigate the labyrinth of complexities accompanying growth. It is a juncture that holds the promise of steering India towards a future marked by economic vibrancy, human flourishing, and lasting prosperity. Differences in the Rhythm: Surpassing the $2,500 GDP per capita threshold is a crucial factor in discretionary spending and rapid and sustainable GDP expansion. A Crux study highlights that ‘piercing’ the inflection point can propel India into a realm of expansive growth similar to China’s trajectory. A comparative analysis with other economies reveals both similarities and differences in the By Vikas Singh The author is an economist and columnist dance toward prosperity. Export-oriented growth, urbanisation and consumerism, and public investment in infrastructure have been common threads. However, the economic structures, demographic dynamics, and governance approaches differ. India’s unique steps, including the digital revolution, the potential of the services sector, and a focus on renewable energy, set it apart. While both rely on manufacturing, China’s economy was more heavy industry focused, driven by steel, coal, and construction materials. In contrast, India’s manufacturing is more diverse, encompassing pharmaceuticals, textiles, and increasingly, electronics and technology. While China’s centralised, state-driven approach to economic development facilitated rapid growth it equally raised concerns about freedom and human rights, (state driven and sponsored narrative), income inequality and environmental impact. China is a generation ahead, but India will catch up. Intricate Waltz: The narrative of economic progress often hinges on two crucial variables: per capita income and economic growth and underscores the interconnection of economic progress. But the relationship is not a simplistic cause-and-effect chain. The conduits through which this relationship manifests are multifaceted and manifold. This intertwining of per capita income and economic growth is a captivating tango, where each step propels the other in a mesmerising interplay and resembles a grand stage performance. The Crux study shows that rising per capita income fuels demand, attracts business expansion, and elevates GDP, unfolding a virtuous cycle of prosperity. This dynamic cycle amplifies, creating more jobs, generating wealth, and leading to higher incomes. However, pitfalls like income inequality, infrastructure bottlenecks, and policy missteps can disrupt this dance. The Crux study cites several macro indicators, provides examples, and highlights the interplay between these factors. The strategic investment in ECONOMY AT INFLECTION POINT. ORCHESTRATING PROSPERITY COLUMN
13 January 2024 | B W BUSINESSWORLD | 17 siderations. Achieving long-term GDP growth and per capita income increase requires a holistic commitment to human capital investment, infrastructure fortification, inclusivity, innovation, and sustainable growth. Sustainable Prosperity: Human capital emerges as the engine of India’s inflection point, requiring increased allocation for education, vocational training, and healthcare. Quality education, upskilling initiatives, and healthcare improvements are essential components of this human capital development. However, challenges persist in ensuring quality education, addressing the evolving job market’s skill demands, and enhancing healthcare infrastructure, especially in rural areas. The narrative of India’s economic success hinges on transformational reforms. Policy framework and inclusive economic measures that empower marginalised communities, targeted social safety net specifically for the women and small farmers can address income inequality. Similarly policy remedies, including progressive taxation, inclusive agricultural measures, labour reforms citizen-centric administrative and comprehensive changes to the judicial system will catalyse growth. Additionally, prioritising sustainable development practices, investing in renewable energy, and protecting natural resources are essential for sustainable development. Inflection Point Not the Destination: India’s inflection point presents a unique opportunity to build a future that is not only prosperous but also equitable and sustainable. It will be critical for India to write its own compelling chapter in the global economic story. The inflection point is not the destination, but a crucial step on the dance floor of sustainable prosperity that benefits all its citizens, and leaves a lasting legacy for generations to come. And only with the right moves and a clear vision can India truly waltz into a future of shared well-being. It is a moment that beckons prudent policies, strategic investments, and a collective determination to navigate the labyrinth of complexities accompanying growth infrastructure is the bedrock for progress. Similarly, the impetus of economic reforms will drive transformative change; and are important value drivers. Equally the steady ascent of both the manufacturing and services sectors, and the cultivation of innovation and entrepreneurship as vehicles for enhanced competitiveness will power the growth engine for decades. India needs a holistic and deliberate focus on social multipliers, particularly education and skill augmentation to empower the workforce. Similarly financial inclusion empowers the marginalised segments to enhance consumption and catalyse and sustain the virtuous growth cycle. The export-oriented policies, in tandem with soft diplomacy will propel India onto the global economic stage. The stability of macroeconomic policies, healthy democracy and demography provides the solid framework. Navigating Complex Labyrinth of Obstacles: However, challenges such as income inequality, infrastructure deficits, bureaucratic hurdles, and environmental concerns shadow this inflection point. The Crux study highlights that India may continue to underperform to its potential. Significantly prosperity and development may come at the cost of the 25 per cent ‘excluded’, and those at the bottom of the socio-economic pyramid. These challenges provide a roadmap for proactive measures and necessitates a multifaceted approach. India must navigate obstacles like income disparities, population pressures, education gaps, bureaucratic complexities, and environmental conPhotograph by Surangastock
18 | B W BUSINESSWORLD | 13 January 2024 N TODAY’S DYNAMIC corporate landscape, the role of independent directors cannot be overstated. Boards require truly competent, knowledgeable, and unbiased individuals to navigate complex scenarios and safeguard the interests of stakeholders. In Boards led by promoters, the appointment of an independent director as chairperson is essential for upholding principles of transparency, accountability, and effective governance. This strategic move acts as a strong defence against potential conflicts of interest and ensures a fair decision-making environment. Enlightened promoters play a pivotal role by willingly relinquishing implicit rights and endorsing the appointment of an Independent Chairperson, underscoring their commitment to robust corporate governance. With an independent director in the role of a chairperson, the Board gains a valuable perspective that goes beyond the promoter’s interests, fostering a culture of checks and balances. This independent oversight helps manage risks, boosts the Board’s credibility, and builds confidence among stakeholders. By placing an impartial figure at the helm, promoter-led Boards not only adhere to corporate governance standards but also showcase a commitment to cultivating a governance structure that is fair, responsible, and conducive to sustainable longterm growth. The transition to having an independent chairperson can encounter resistance from promoters, as it may be perceived as encroaching on their traditional role within the corporate structure. For many promoters, the chairperson’s position symbolises a central authority and a direct link to the strategic direction of the company. The resistance is often grounded in concerns that separating the chairperson and managing director’s roles diminish their influence and control. We saw the industry lobby that derailed the regulatory deadline mandating the segregation of the roles of chairperson and managing director. Promoters may argue that their close involvement is vital for swift decision-making and maintaining the vision that led to the company’s inception. However, proponents of independent chairpersons assert that this separation is a cornerstone of good governance, promoting transparency, accountability, and mitigating potential conflicts of interest. The tension between these perspectives underscores the ongoing debate on corporate governance practices in dynamic business environments. The sustenance and growth of enterprise value stand as paramount objectives for any organisation, requiring astute governance and strategic foresight. Independent directors play a crucial role in this pursuit, contributing their impartiality, expertise, and unbiased judgment to critical decision-making processes. Recognising the significance of this responsibility, many Boards appoint an independent director as the chairperson of the Nominations and Remuneration Committee (NRC). This deliberate choice ensures that the selection of executive roles is guided I Curious Case of Independent Chairpersons (A)muse & Musings By Srinath Sridharan & Shailesh Haribhakti
13 January 2024 | B W BUSINESSWORLD | 19 necessitates additional directors with a global background. Independent directors versed in international business intricacies can provide invaluable insights, mitigating risks associated with unfamiliar territories. Their expertise ensures that the Board remains well-informed and capable of making informed decisions in the pursuit of global opportunities. Sudden Death of Iconic Promoter: The sudden demise of an iconic promoter without a pre-planned succession creates a monumental leadership void. An independent chairman, guided by impartiality and expertise, can lead the Board through the challenging task of identifying and appointing a suitable successor. Their role is crucial in maintaining stability and assuring stakeholders during this period of uncertainty. Top Team Vacating Office due to Fraud or Transgression: The abrupt departure of the top team following the discovery of fraud or transgression leaves a leadership vacuum. An independent chairman, unencumbered by internal alliances, can objectively investigate the matter, institute necessary reforms, and guide the organisation towards a path of ethical governance. Their impartiality is key in restoring trust and confidence in the company’s leadership. The appointment of truly competent, knowledgeable, and unbiased independent directors is imperative for Boards to navigate the complexities of corporate scenarios effectively. Their role goes beyond oversight, extending to strategic guidance and crisis management, ensuring the long-term sustainability and success of the organisation. The concept of a ‘Team - Board’ is integral, emphasising the need for a Board with a strong DNA, fostering fearless discussions among diverse individuals to safeguard the interests of all stakeholders effectively. Moreover, implementing a sharp and objective appraisal and feedback loop within the Board is crucial. This process ensures that directors receive constructive feedback, promoting excellence in performance and output, ultimately contributing to the overall success and sustainability of the organisation. Given the dynamic nature of the business environment, continuous education is paramount for directors to stay informed about industry dynamics, emerging risks, and evolving governance standards. A structured approach to director education is crucial, ensuring that these professionals are equipped with the necessary knowledge and skills. This proactive stance toward competence reinforces the understanding that staying abreast of developments is an ongoing commitment for effective corporate governance. With an independent director in the role of a chairperson, the Board gains a valuable perspective that goes beyond the promoter’s interests, fostering a culture of checks and balances by an independent mind, free from internal biases or conflicts of interest. By placing an independent director at the helm of the committee, Boards seek to secure the best-suited individuals for executive positions, fostering leadership that aligns with the organisation’s values, goals, and the imperative of enhancing enterprise value over the long term. The presence of an adept independent director becomes paramount in scenarios demanding strategic acumen and impartial decision-making. Entry of PE Investors: The influx of Board seat-seeking private equity investors can introduce diverse perspectives and demands. To manage these disparate conversations effectively, the immediate appointment of a powerful independent Chairman is crucial. Such a figure can act as a unifying force, ensuring that the interests of all stakeholders are considered while maintaining the integrity and strategic direction of the organisation. Exit of Promoter and Foreign CEO Entry: The departure of a long-standing promoter coupled with the entry of a foreign CEO poses a potential cultural shakeup within the organisation. An independent chairman, wellversed in navigating cultural nuances, can play a pivotal role in fostering cohesion. Their unbiased stance can bridge the gap, ensuring a smooth transition and aligning the organisation towards a unified vision despite the significant changes in leadership. Foray into International Markets: Expanding into international markets Photograph by Artisticco Srinath Sridharan is a policy researcher & corporate advisor Shailesh Haribhakti is an independent director on corporate boards
20 | B W BUSINESSWORLD | 13 January 2024 FEATURE JHARKHAND’S EVOLUTION A DEEP DIVE INTO FOUR YEARS OF TRANSFORMATIVE GOVERNANCE The in-depth analysis on 4 years of Jharkhand government, under the dynamic leadership of Chief Minister Hemant Soren, meticulously delves into the intricate details of the significant initiatives undertaken, the formidable challenges confronted, and the overarching impact discerned from the Jharkhand government’s governance model throughout this critical four-year period Nestled in the heart of India, the state of Jharkhand has undergone a profound and transformative journey over the course of the past four years, guided by the astute leadership of its chief minister Hemant Soren. This temporal expanse has been distinctly characterised by the implementation of dynamic policies, remarkable socio-economic advancements, and an unwavering commitment to fostering inclusive development. The in-depth analysis on 4 years of Jharkhand government, under the dynamic leadership of Chief Minister Hemant Soren, meticulously delves into the intricate details of the significant initiatives undertaken, the formidable challenges confronted, and the overarching impact discerned from the Jharkhand
13 January 2024 | B W BUSINESSWORLD | 21 government’s governance model throughout this critical fouryear period. This comprehensive exploration aims to provide a nuanced understanding of the multifaceted strategies employed, the adaptive measures taken in the face of challenges, and the farreaching influence of the government’s governance approach on the state’s developmental landscape Economic Development and Industrial Growth At the forefront of the Jharkhand government’s accomplishments lies a noteworthy achievement — its steadfast dedication to economic development and the promotion of industrial growth. Over the years, the state has proactively embarked on a strategic journey, implementing policies designed to allure investments spanning diverse sectors, thus cultivating a highly conducive environment for businesses to thrive. A case in point is the instrumental Jharkhand Industrial and Investment Promotion Policy (JIIPP), which has played an unequivocal role in not only streamlining the processes for conducting business but also in attracting a substantial influx of both domestic and international investments. Beyond policy frameworks, the establishment of strategically positioned industrial hubs and the facilitation of infrastructure development projects stand out as tangible contributors to the state’s robust economic resurgence, fortifying its position as a magnet for investment and a crucible for sustained industrial progress. Empowering Agriculture and Rural Development Acknowledging the fundamental importance of agriculture as the backbone of its state, the Jharkhand government has made a deliberate and strategic commitment to prioritise comprehensive agricultural reforms and foster rural development. In tandem with this overarching goal, the government has introduced impactful schemes such as the Mukhyamantri Krishi Ashirwad Yojana and Mukhyamantri Dal Bhat Yojana. These initiatives operate with a multifaceted approach, aiming not only to augment farmers’ income but also to bolster food security and advocate for sustainable agricultural practices. Through the careful implementation of innovative farming techniques, the government has sought to revolutionise traditional agricultural practices, introducing efficiency and resilience to the sector. Simultaneously, significant investments have been injected into rural infrastructure, creating an ecosystem that not only amplifies agricultural productivity but also catalyses an improvement in the overall socio-economic landscape of rural Jharkhand. This dual-pronged strategy not only uplifts the farming community but also contributes significantly to the holistic development and prosperity of rural regions in the state. Social Welfare and Inclusive Development Determined to foster inclusive growth and ensure the wellbeing of all its citizens, the Jharkhand government has strategically emphasised the implementation of robust social
22 | B W BUSINESSWORLD | 13 January 2024 welfare programmes. At the forefront of these initiatives is the Mukhyamantri Sukanya Yojana, a visionary scheme designed to empower and uplift the girl child, thereby addressing gender disparities and promoting equality. This programme not only underscores the government’s commitment to gender inclusivity but also serves as a catalyst for creating opportunities and a secure future for young girls. Complementing this, Mukhyamantri Gambhir Bimari Yojanahas been a cornerstone in extending healthcare services to vulnerable sections of society, ensuring that quality medical assistance is accessible to those who need it the most. These programmes collectively epitomise the government’s unwavering dedication to cultivating a socially just society that prioritises the well-being of its diverse populace. Furthermore, in the realm of education, the Mukhyamantri Sukanya Yojana extends its influence by focusing on bolstering educational infrastructure and accessibility. Through targeted efforts, the government aims not only to enhance the overall quality of education but also to ensure that educational opportunities are accessible to all, irrespective of socio-economic backgrounds. This comprehensive approach underscores the Jharkhand government’s commitment to fostering a society that is not only economically prosperous but also socially equitable and inclusive. Environmental Sustainability and Natural Resource Management The Jharkhand government stands unwavering in its dedication to fostering sustainable development, and this commitment is prominently manifested in its holistic approach towards environmental conservation and the effective management of natural resources. Recognizing the delicate balance required between industrial growth and environmental protection, the state has implemented a series of impactful measures. Notable among these are extensive afforestation drives, which aim to replenish green cover and mitigate the environmental impact of developmental activities. Simultaneously, the government has undertaken rigorous initiatives for the conservation of water bodies, acknowledging their critical role in maintaining ecological equilibrium. To further ensure responsible industrial practices, stringent regulations have been imposed on mining activities, reflecting a proactive stance in safeguarding the environment. A landmark initiative in this regard is the Jharkhand Forest Rights Act, a legislation crafted with the objective of empowering tribal communities and acknowledging their pivotal role in environmental conservation. This act not only seeks to recognize and protect the rights of tribal communities over forest resources but also highlights the government’s commitment to incorporating sustainable practices into its policy framework. In essence, the Jharkhand government’s approach exemplifies a harmonious integration of economic progress with ecological preservation, setting a commendable standard for sustainable development practices across the nation. Challenges and Resilience Undoubtedly, the transformative journey of the Jharkhand government over the past four years has been marked by numerous accomplishments, but it has not been devoid of challenges. The administration has been diligently addressing multifaceted issues, such as unemployment, infrastructural gaps, and socio-economic disparities, acknowledging that these challenges are integral components of the developmental The last four years of governance in Jharkhand stand as a compelling testament to the state’s unwavering commitment to transformative and inclusive development. The multifaceted strides made across economic resurgence, social welfare, and environmental sustainability underscore the government’s comprehensive approach to fostering holistic progress. FEATURE
13 January 2024 | B W BUSINESSWORLD | 23 landscape. The ongoing endeavour to grapple with these challenges has demanded strategic planning and persistent efforts. T h e e f f e c t i v e implementation of certain schemes has posed a notable challenge, requiring the government to navigate complexities and devise innovative solutions. Additionally, balancing the diverse needs and aspirations of a heterogeneous population has presented an intricate task, demanding a nuanced and inclusive approach. However, the government’s commendable resilience and adaptability in the face of these challenges have been instrumental in sustaining its momentum. The willingness to learn from setbacks, recalibrate strategies, and actively engage with stakeholders reflects the administration’s proactive and responsive approach. These challenges, rather than acting as deterrents, have been instrumental in shaping the government’s capacity to evolve, ensuring that it remains dynamic and responsive to the evolving needs of the people it serves. In essence, the government’s ability to confront challenges head-on and its commitment to continuous improvement exemplify its unwavering dedication to the holistic development of Jharkhand.. Future Outlook and Way Forward As the Jharkhand government takes stock of its notable achievements and confronts the challenges encountered over the past four years, it charts a course for a future characterised by sustainable growth, social justice, and inclusive development. The steadfast commitment to cultivating a businessfriendly environment, empowering rural communities, and safeguarding the state’s invaluable natural resources establishes a robust foundation for the envisioned prosperous future. Embracing the lessons learned from past experiences, the government’s forward-looking approach emphasises the importance of navigating complexities with strategic precision. The ability to proactively engage with its diverse citizenry becomes paramount, recognizing that effective governance hinges on inclusive participation and feedback. In shaping the trajectory of Jharkhand’s development in the years to come, the government’s commitment to continuous learning, adaptability, and responsive governance will play a pivotal role. By prioritising sustainable practices, ensuring social equity, and fostering an environment conducive to innovation and business growth, the Jharkhand government aspires to create a future that reflects the aspirations and wellbeing of its residents while contributing meaningfully to the broader national development landscape. The last four years of governance in Jharkhand stand as a compelling testament to the state’s unwavering commitment to transformative and inclusive development. The multifaceted strides made across economic resurgence, social welfare, and environmental sustainability underscore the government’s comprehensive approach to fostering holistic progress. In the realm of economic development, the state has witnessed a remarkable resurgence, with strategic policies and initiatives attracting investments, promoting business growth, and creating avenues for employment. Concurrently, the government’s dedication to social welfare is exemplified through visionary schemes and programmes that aim to uplift marginalised sections of society, empower the youth, and ensure the well-being of all citizens. Moreover, the commitment to environmental sustainability is evident in conscientious efforts to balance industrial growth with ecological conservation, affirming Jharkhand’s commitment to a green and sustainable future. While challenges persist, the Jharkhand government’s resilience, adaptability, and the implementation of progressive policies serve as a beacon of hope and inspiration not only for the state’s residents but for other states across the nation. The ability to confront challenges head-on, learn from experiences, and proactively adjust strategies demonstrates a governance model that is dynamic and responsive to the evolving needs of its diverse population. As Jharkhand continues to navigate the path ahead, the invaluable lessons learned and the successes achieved will undoubtedly contribute to the state’s evolution into a more vibrant, inclusive, and resilient entity, setting a positive example for the entire nation.
24 | B W BUSINESSWORLD | 13 January 2024 FTER I WROTE my column titled India Continues to March Ahead for the 19 November 2022 issue of BW Businessworld (my first column for this magazine), much has happened on the economic front and technological growth, as well as our climb up the political and diplomatic ladder as we make subtle progress in almost all walks of life. Now I plan to focus on the ‘softer aspects’ like sports – including for persons with disabilities – that reflect on a holistic growth of Indian Society which is equally important for any nation with ambitions to move up to being a superpower by around 2050. Sports excite nationalism and, unlike politics, everyone respects rules on the field. No matter how nationalist the home crowds may be, if their team loses, it loses in the open and if it wins that too is in the open. Sportsmanship Above All Sports are transparent from start to finish. If you don’t agree with the rules, you are not allowed to play. There is that historic example of the WW2 time Olympics, when Hitler offered the great Indian hockey player Dhyan Chand a switch to the German team. Chand politely refused and even the Fuhrer respected this decision. Violence on the sports arena is simply not allowed. Sportsmanship is above all and is a test of how a society and the country are evolving. India is witnessing an era of transformation in sports and that should rub off on everything else. Let me start with our most popular sport – cricket. Notwithstanding the fact that we lost the final of the World Cup to Australia – that broke a billion hearts – watching the matches every day – with India’s unprecedented record of winning all nine matches and also the grueling semi-final with New Zealand – filled every citizen’s heart with pride. Hundreds of millions were glued to the TV screen hoping and praying for yet another win for the country. Virat or Rohit figuring among the ‘top run-getters’ or Shami’s name on top of the world’s ‘best wicket-takers’ is always a matter of national pride. Values of Life These things don’t happen just by luck – such performance needs consistent attention to work ethics, fitness, sustained practice, strength of character, regular introspection ... in short values of life. Comparisons inevitably go to our first World Cup victory in 1983 when Kapil Dev had almost single handedly saved the disastrous situation (17 for 5) by scoring an unbeaten 175 and India lifted the cup. A SOFT SHEEN TO INDIA SHINING Inclusivity By Krishan Kalra Column
13 January 2024 | B W BUSINESSWORLD | 25 (China) during the 2023 Asian Games? Finally, India could claim that it’s athletes were measuring up to ‘world standards’. Our medals tally ‘70’ at the last edition of the games – at Jakarta – was expected to improve but no one was sure that we will cross the magic figure of 100. The fact that our 655-strong contingent came home with a whopping 107 was a dream come true. The 28 gold, 38 silver and 41 bronze medals put us in the fourth rank after China (383 medals), Japan (188) and Korea (190). Big Leap Across the Board Considering that we ranked 48 at the 2020 Olympic games in Tokyo (where China and Japan were ranked second and third) we can claim that our boys and girls punched above their weight at Hangzhou. We succeeded in athletics, javelin throw (where the gold and silver both went to Indians), shooting, archery, badminton, wrestling, boxing and hockey. The ‘Hockey Gold’ is a fine example of the strides that India is making. No one has forgotten the 7-1 humiliation that we suffered against our old rivals Pakistan in the 1982 Asian Games final in Delhi. Our success in squash and badminton too were great examples of revival. It was the tremendous mental strength of our men’s dou- By far the most soul stirring for me is our team’s success at the ‘Paralympics’ that followed at Hangzhou. No one can forget the video of 16-year-old Sheetal Devi – born without arms – from a village in J & K, drawing the bow with her toes and going on to win three golds in mixed archery Again, that knock wasn’t merely luck – it was the man’s resolve, determination, superb fitness, and character that brought great honour to India. World Cup, IPL or any series is not just hoopla and big money; it means much more. It is a test of the discipline and rigorous training of the players, unquestionable umpiring, diligent work to prepare pitches and planning and execution capabilities of the administrators. It involves many life lessons that reflect on character building of a team, society, really an entire nation! Measuring up to World Standards That the PM went to congratulate the winning team shows great courtesy and sportsmanship. We didn’t cancel any of the elaborate performances, awards to previous WC winning captains and other razzmatazz; our players were sad but they didn’t sulk. And, what happened at Hangzhou Photograph courtesy: PIB
26 | B W BUSINESSWORLD | 13 January 2024 By Krishan Kalra Column bles pair in Badminton to win the gold against South Korea despite injuries. All this shows huge strides by way of improved coaching facilities, selections from a wider set of youngsters, sponsorships for training, grit, hard work and ‘fire in the belly’ traits that are developed by a lot of societal backing, things that point to big leaps in games across the board. Let me also add that our 107 medals came despite setbacks like delayed visas and other associated hurdles that didn’t allow our players to get acclimatised to the venue before their matches. Sheetal Devi By far the most soul stirring for me is our team’s success at the ‘Paralympics’ that followed at Hangzhou. No one can forget the video of 16-year-old Sheetal Devi – born without arms – from a village in J & K, drawing the bow with her toes and going on to win three golds in mixed archery. It was an NGO volunteer who saw her a few years ago, while she was undergoing some treatment in Bengaluru, and felt that she could take up archery and introduced her to coaches at Shri Mata Vaishno Devi Sports Academy in Jammu. Senior coaches felt that indeed archery would be a good fit for her indomitable grit and power of concentration. They modified equipment for her to learn with her legs and the rest, as they say, is golden history! Similar great sense of purpose and nationalist fervour was displayed by other para-athletes like Adil Ansari in Archery (bronze), Praveen Kumar in High Jump (gold), Ankur Dhama (golds in 1,500 and 5,000 metres). Most inspirational here is that all of them are from poor families and hail from different parts of Inclusivity Photograph by Indiapicturebudget
13 January 2024 | B W BUSINESSWORLD | 27 ther worked as a watchman in Jamnagar, Siraj’s father drove an auto-rickshaw in Hyderabad. Bridging Gaps in Inclusivity As more people get a chance to hone their skills and excel, the more our country will shine in other areas too. Matches were held all over the country. Lot is indeed happening to bridge the yawning gaps in inclusivity which will add to give us an even greater soft sheen. Proportion of the poor has dipped to about 15 per cent from about 25 per cent in 2015-16. Aspirants for the IAS and other civil services are coming from poor families in tier- 2, tier-3 and tier- 4 towns; daughters of farmers, mechanics and daily wage earners from Maharashtra villages are making it to the national hockey team. As a recent issue of BW Health brought out – bright young achievers are getting involved with public healthcare in an effort to make it affordable, pioneering efforts are on for ‘special needs education’ and healthcare for the disabled, support is emerging for the elderly by way of ‘companionship good-fellows’ like in Sweden. A successful ophthalmologist has opened five schools in the slums of the millennium city and now an IAS aspirant has changed tracks and is also taking classrooms to the slums in Gurugram. There’s a Social Exchange which should help NGOs raise funds. Even the apex court has made space in the hallowed SC complex for a café run by the disabled and, as the Chief Justice of India said, “inclusiveness is not a mere aspiration, it is the key to unlocking full potential of our society”. Yet Challenges Remain On the flipside, there are huge challenges too. Incidents of killings by drunken drivers and road rage murders are increasing at an alarming rate; so are tragic cases of rapes; ragging at universities at times leads to suicides; stalkers turn to injuring and even killing girls if they resist their advances; child marriages continue to happen; air quality in the metros is worsening year after year, so is the quality of water, both leading to severe impact on life expectancy. There are ever increasing cases of Diabetes and Cancer. No one paid heed to the SC orders and burst crackers with abandon on Diwali. Communal intolerance peaks at times – we saw a horrible case of a religious ‘yatra’ turning into riots. Workers trapped for almost two weeks in the tunnel in Uttarakhand – which is obviously a case of criminal lack of adherence to quality norms in public works construction. Improving excellence in Sports and steps towards Inclusivity add lustre to Holistic growth of the country – as important as the economic indicators the country – great for inclusivity! Strength from Diversity The record haul of 111 medals, including 29 gold, is the country’s biggest ever tally in any major multisport event. No wonder we are now aspiring to host the Summer Olympics in 2036. It may be our need to make a statement because we have now reached a respectable per capita GDP milestone. The recent cricket tournament also brought out the fact that ‘India derives its strength from its diversity’, more excellence leads to more social mobility; our players came from varied backgrounds – Gill from a Punjab village near the Pakistan border, Jadeja’s faThe author is member, Managing Committee, Indian Cancer Society Delhi and former member, Governing Council, Rajiv Gandhi Cancer Institute & Research Centre. He is past president of the All India Management Association
20 Years of Vibrant Gujarat: Why Gujarat Continues to Attract Prominent Industrialists and Investors Vibrant Gujarat. Success and honour resonate with every Gujarati when they hear these two words. The Vibrant Gujarat Global Summit has showcased the limitless potential of Gujarat to the global business community. Businessmen and investors from around the world eagerly await this extraordinary event held biennially in Gujarat. Going beyond boundaries, the Summit has become a global platform, not just for the state but for all of India, offering a myriad of opportunities in industry and investment. September 28, 2003, saw the first edition of this summit marking the beginning of a transformational journey. Over two decades, the glorious legacy continued to succeed through nine editions of the Vibrant Gujarat Summit. During this, Gujarat incredibly rose to prominence across diverse industrial benchmarks. Today the state is the 'Growth Engine' of India, an honour rightfully attributed to this summit. The substantial investments made in the state and the industries that have prospered in the wake of the Vibrant Gujarat Summit have not only boosted employment but have also catalyzed a profound transformation in Gujarat's social and economic fabric—a saga welcomed and witnessed by countless Gujaratis. Aiming for inclusive development, attracting substantial investment, creating abundant employment opportunities for the people of the state, and positioning Gujarat at the forefront of the industrial landscape, Hon'ble PM Shri Narendra Modi, then Chief Minister of the State, embarked on a visionary journey by inaugurating the Vibrant Gujarat Global Summit in 2003. The first summit in 2003, though modest in scale with 125 foreign delegates and 200 NRI participants, laid the foundation for a series of triumphant editions. After three successful summits, the fourth edition in 2009 achieved a historic milestone with Japan as a partner country, marking a major milestone in the summit's evolution. Its growth trajectory persisted, reaching its peak in the 2019 summit, the ninth edition, featuring the enthusiastic participation of 15 partner countries. The event witnessed the presence of five heads of state, along with distinguished industrialists spanning diverse fields, drawing an impressive assembly of over 42,000 delegates from across 135 nations. What are the driving forces that attract a multitude of national and international representatives, businessmen, and investors to Gujarat? Let's dive into the factors propelling industrialization and economic growth in this vibrant state. Gujarat: Ever-evolving economic landscape In India, Gujarat occupies a mere 6% of the land and houses 5% of its total population. Despite that, the state stands as a towering testament to industrial prowess. Known as the 'Growth Engine of India,' Gujarat boasts a robust economic foundation that has propelled it to the forefront of the country's most industrially developed states. In terms of economic growth, the state boasts of a remarkable Compound Annual Growth Rate (CAGR) of 15% from 2002-03 to 2022-23—a rate surpassing the national average. Gujarat also has continually upheld its position as one of the rapidly advancing states, in terms of Gross State Domestic Product (GSDP). Over the past two decades, Gujarat has climbed to a position of economic and industrial eminence, emerging as a powerful state. As of financial year 2022-23, Gujarat contributes a substantial 8.3% to India's Gross Domestic Product (GDP). The steady trajectory of Gujarat's economy over the past two decades has created a suitable landscape for domestic and global entrepreneurs. Robust Infrastructure Over the past two decades, Gujarat has committed to developing a future-ready infrastructure landscape. Today, the state has robust connectivity through well-developed roadways, railways, airports, and ports. Initiatives such as Pragatipath, Vikaspath, Pravasipath, and Kisanpath have woven a network of excellent road links, reaching tribal areas, rural landscapes, bustling urban centres, and picturesque tourist destinations across the state. In the cities of Gujarat, a transformation is underway as roads broaden and fortify into four-lane and six-lane routes, completed by a network of underpasses and overpasses. Notably, the majority of the Delhi-Mumbai Industrial Corridor (DMIC) passes through Gujarat. Policy Driven State Key policies, such as the Industrial Policy 2020, Gujarat Integrated Logistics and Logistics Park Policy 2021, Gujarat Solar Power Policy 2021, Gujarat State Electric Vehicle Policy
Vibrant Gujarat Global Summit, from just 125 foreign delegates in its 1st edition to 42,000 delegates, in its 9th edition 2021, Gujarat IT/ITeS Policy 2022-27, Gujarat Semiconductor Policy 2022-27, and Gujarat State Biotechnology (BT) Policy 2022-27, highlight the state's comprehensive and forwardlooking approach to industrial development. Under the leadership of Chief Minister Shri Bhupendra Patel, Gujarat has witnessed remarkable strides in policymaking, with the announcement of about seven new policies in just two years. A noteworthy achievement for the state is its pioneering status as the first in the country to launch a semiconductor policy. These visionary policies collectively contribute towards creating an enabling environment for establishment of new industries in Gujarat. A Peaceful and a Safe State Globally, Gujarat is known for being a peaceful & safe state. The state's unwavering commitment to maintaining law and order creates an environment where every citizen, especially women, feels secure. There is a common belief that, even during the late hours of the night in Gujarat, women can move freely without fear. Political Stability For over 25 years, Gujarat has witnessed a consistent and stable government, fostering an environment of good governance. This prolonged political stability has ensured a favourable atmosphere for business. Gujarat's commitment to political stability has emerged as a key catalyst for industrial growth. Additionally, the state's political will has played an equally crucial role in propelling the success of its industries. Health and Education Education not only enriches lives but also unlocks pathways to progress and opportunity. Over the past two decades, Gujarat has meticulously strengthened the foundation of education, organising transformative initiatives and schemes. The state's unwavering commitment is evident in the remarkable reduction of the primary school dropout ratio, declining from 22.30% in 1999-2000 to a mere 1.32% in 2020-21. Today, Gujarat has India's first eminent Vidhya Samiksha Kendra (education review centre), recognized as a global benchmark by the World Bank. The state is home to eminent educational institutions across diverse fields, from management and technology to design and fashion. Numerous government and private establishments established over the past two decades have played a pivotal role in transforming the state into a knowledge-based society. Gujarat is experiencing a notable enhancement in both education and healthcare infrastructure. The state has not only cultivated but sustained robust healthcare facilities at various levels, ushering in a significant increase in opportunities for medical and paramedic study and training over the past two decades. Today, Gujarat boasts over 30 functioning medical colleges, a significant leap from the 9 in 2001. In a groundbreaking move, the world's first and only 'WHO-Global Center for Traditional Medicine' was inaugurated in Jamnagar in 2022. Also, the establishment of a major institution like AIIMS in Rajkot highlights the state's commitment to holistic development, ensuring the Ease of Living for its citizens through advancements in healthcare and education. Access to Skilled Manpower The then Chief Minister of Gujarat and current Prime Minister of India Shri Narendra Modi has always prioritized empowering youth through skill development. In the past two decades, the Gujarat government has been dedicated to cultivating skilled manpower aligned with industrial needs. To bridge the gap in skilled industrial workforce demand and provide training to the youth in industrial environments, the state has implemented the Apprenticeship Training Scheme. This program has been instrumental in providing training to over 2.46 lakh youth. The Gujarat Skill Development Mission has further trained countless youths.
30 | B W BUSINESSWORLD | 13 January 2024 EMEMBER THE 10,000-HOUR RULE? It essentially says the key to becoming an expert in any field is to spend 10,000 hours practicing it. The rule was made popular by Malcolm Gladwell in his book Outliers. But opinion was divided. There were those who quoted it often to their kids and colleagues, reinforcing the importance of practice and hard work. And there were those who pointed to the flaws and the exceptions to say there was more to becoming an expert – like talent, and opportunity – than just practicing for a magical number of hours. No matter how you view the rule, the fact remains that practice makes a difference. It paves the way for greatness. Here then are three thoughts on practice. Why it matters. What to practice. And how. u Practice reduces pressure. Nervous about the presentation you need to make at the meeting next month? Well, worry not. There’s an easy fix. Practice. If you’ve seen a great TED talk and marvelled at the speaker’s eloquence, and how relaxed they appeared, you should hear this. Many of those speakers were nervous wrecks like you. But the folks at TED get you to practice, practice, practice. That emphatic pause, the off-the-cuff remark, the repetition of that catch phrase – they are all rehearsed. Rehearsed so well in fact that it looks extempore. Don’t let pressure impact your performance on the big day. Just practice. v Play to your strengths, practice for your weaknesses. You’ve probably been told this before. Play to your strength, don’t worry about your weaknesses. Turns out the advice is only partially right. Paul Assaiante, the celebrated squash coach at Trinity College in Connecticut tells his students this: “When it’s game time, play to your strengths. And outside of that, practice for your weaknesses.” If you have a strong forehand, your best chance of winning a match is to get as many of those forehand smashes into play. But if you want to improve, get better as a squash player, good idea to spend time practicing and strengthening that backhand. Our preoccupation with playing to our strengths can mean we get reduced to becoming one-trick ponies. We stop growing. We confine ourselves to the comfort zone of our limited expertise. Don’t let that happen to you. Your best chance of sustained success is to “Play to your strengths, practice for your weaknesses”. w Don’t practice till you get it right. Practice till you can’t get it wrong. Ever wondered what separates the champions from the rest of us? It’s this one habit. Most of us practice, make mistakes, struggle a bit, and then when we get it right, we celebrate. And we stop practicing, because, after all, we have finally got it right. Champions do it differently. They practice till they can’t get it wrong. Champion golfers for instance set themselves a target of sinking ten consecutive putts from say four feet. If eight putts go in and they miss the ninth, the counter gets reset – and they will start again at one and aim to put ten putts into the hole. It’s boring, sure. Tiring too. But that’s what goes into the making of a champion. That’s it then. Now that you know the secret to unleashing your greatness, you only need to do one more thing. Yup, you guessed it right. Practice! The Power of Practice R COLUMN Prakash Iyer : The author is a speaker and leadership coach and former MD of Kimberly Clark Lever PI TALKIES BY PRAK A SH IYER PRACTICE TILL YOU CAN’T GET IT WRONG. EVER WONDERED WHAT SEPARATES THE CHAMPIONS FROM THE REST OF US? IT’S THIS ONE HABIT
31 | B W BUSINESSWORLD | 13 January 2024 HE LAST MONTH of last year saw another major international jamboree, with over 70,000 visitors descending on Dubai only for COP 28. For the uninitiated, the acronym is not part of some OTT series on cops and robbers, though many may draw an analogy – with some countries being the plunderers and the international community in the role of bungling policemen, unable to stop them. Here, it is the acronym for the 28th meeting of Conference of Parties, the apex body of the UN Framework Convention on Climate Change (UNFCC). Apart from good intentions, declarations of undying care for the environment, and a torrent of words, the only real benefit may be that which the visiting hordes brought to Dubai’s economy. CONFERENCE OF PARTIES Previous COPs – unlike many such global meets – did actually result in global agreements, like the Loss and Damage fund, to compensate countries for the ravages of extreme weather events, and Nationally Determined Contributions (NDC), a T non-binding national plan which includes targets for greenhouse gas emission reductions. Climate change and global warming are now no longer confined to research papers, but are visible on the ground. Limiting the rise in global temperature to 1.5 degrees Celsius (compared to the mean in pre-industrial years) is now an acknowledged necessity. It seems there is now an alternative to degrading and decimating ourselves through war and civil strife. It is easy, because there is nothing we need to do: just going down the present path will ensure continuing global warming, leading ultimately to run-away temperature rise and the possible demise of life on earth. Far-fetched, yes; but a scientifically plausible scenario. Meanwhile, extreme weather events have become common round the world (we have experienced numerous instances in India), even as global records are set year after year for hottest months, maximum rainfall, unprecedented droughts, etc. Also becoming visible are the effects of melting glaciers and rising seas. Apocalypse may be round the corner. COPING WITH COPS & CULPRITS Yet, countries continue to argue about who is responsible, who should foot the bill, making technology freely available, limiting use of fossil fuel, and many other issues. Progress has been so slow, that it seems the main contribution of COPs is to the English language! To establish consensus, new phrases have been coined like “common but differentiated responsibility” or “transitioning away” (as, apparently, different from “phasing out”, just as some at the UN found “humanitarian pause” acceptable, but not “ceasefire”). Though a cliché, nowhere is “think global, act local” more appropriate than for the environment. Sadly, though a global champion of sustainability, our local actions are quite contrary. Even as droughts and intense rains continue to plague us, deforestation goes on. Landslides result, as does worsening air pollution. Delhi/NCR is a much-publicised sufferer, yet permission is given for construction in the Ridge area in Delhi, and for farmhouses and a film studio in the Aravallis in Haryana. Tunnelling and mountain-cutting for road-broadening goes on in sensitive geologies, with “security” overriding all environmental considerations, endangering the lives of those whom “security” seeks to protect. Accidents like the one in Uttarakhand are an inevitable outcome. We continue our dismal track record: vanity projects and politics trumps scientists. Sadly, it seems in many cases the cop is the culprit. COP and Coping The author loves to think in tongue-in-cheek ways, with no maliciousness or offence intended. At other times, he is a public policy analyst and author. His latest book is Decisive Decade: India 2030 Gazelle or Hippo (Rupa, 2021) COLUMN n By KIRAN’S KONTRARIAN KORNER n
32 | B W BUSINESSWORLD | 13 January 2024 I N the realm of pharmaceuticals, Akums Drugs and Pharmaceuticals Limited (“Akums”) distinguishes itself by exemplifying steady dedication to crafting pharmaceuticals while remaining agile in response to the dynamic industry landscape. Guided by a realistic approach and expertise, the company propels itself to new summits and excels with solutions and advancements that contribute to global healthcare improvements. Driving Progress through Solutions at Akums Akums’ dedication to innovation serves as a driving force behind the development of pharmaceuticals that directly address healthcare needs. The company’s commitment to making a positive impact in the healthcare sector is demonstrated through the launch of new products. At the heart of Akums’ prowess are its proprietary [Novel Drug Delivery Systems (NDDS) technologies] . These technologies provide ways to administer medications, ensuring efficacy and patient convenience. Akums’ diverse range of dosage forms, including [Tablet In Tablet, Bi-layered, SR Tablet-in-Tablet, Inlay Tablet, Multiple Tablets in Capsule, and Mouth-Melt Powders in Sachet], showcases the company’s dedication to pushing the boundaries of pharmaceutical innovation. Each of these formulations is designed to meet specific therapeutic needs and patient compliance. Additionally, Akums boasts stateof-the-art manufacturing plants, serving as the crucible for innovation, and ensuring the quality and safety of every pharmaceutical product manufactured. A noteworthy addition to its portfolio is the Doxylamine + Pyridoxine extended-release tablets, specifically crafted to empower mothers dealing with severe morning sickness. Adding to this, Akums has also launched the Lasmiditan Tablet, marking a strategic move to confront the complexities associated with migraines. Dedication to Ensuring Quality Akums’ dedication to maintaining high-quality standards is deeply rooted in its pharmaceutical manufacturing process. The company invests resources to establish and uphold quality control measures at every stage, from raw material selection to final packaging. This meticulous attention to detail is aimed at ensuring strict adherence to regulatory standards. This commitment has cultivated strong relationships with both domestic and international partners. Whether it’s the production of essential recovery medications or over-the-counter pharmaceuticals, every product leaving Akums’ facilities is aimed to uphold the promise of efficacy, safety, and a dedication to enhance the well-being of those who rely on pharmaceuticals. Akums Drugs & Pharmaceuticals: Shaping Healthcare with Excellence (Left to Right) SANJEEV JAIN - Promoter and Managing Director SANDEEP JAIN - Promoter and Managing Director key out he gn, to ate ent ect ass ver a's y a big ore for out to ure d a as of nd ese ies in ent an nd
13 January 2024 | B W BUSINESSWORLD | 33 Infrastructure and Regulatory Approvals Akums is driven by its infrastructure and regulatory approvals. The company’s manufacturing plants not only adhere to the industry standards but also underscore its commitment to ensuring quality and safety in every pharmaceutical product. We have approvals from the Food Safety and Standards Authority of India (FSSAI) and first-time approvals from the Drug Controller General of India (DCGI). The recent [EU GMP approvals for two manufacturing units in Haridwar] further solidifies Akums’ industry position. One plant manufactures solid oral dosage forms such as tablets, hard gelatin capsules, powders in sachets, etc. belonging to the general category, and the other manufactures the large-volume and small-volume parenterals range including vials, ampoules, eyedrops, as well as dry powder injections belonging to the penicillin line. Acquisitions and Initiatives In a strategic move aimed at enhancing its manufacturing capabilities, Pure and Cure Healthcare Private Limited (“Pure and Cure”), a wholly owned subsidiary of Akums, has recently announced the acquisition of a new formulation facility located in Baddi, Himachal Pradesh. This marks the 12th formulation facility under Akums, and the second in Baddi, showcasing a strategic approach to strengthening its foothold in key locations. The newly acquired facility, sprawling across approximately 6 acres, is currently undergoing upgrades and is slated to become operational in the year 2024. Once operational, this facility will serve as an oral solid dosage (OSD) pharmaceutical formulation facility, boosting Akums’ tablet manufacturing capacity. The acquisition aligns with Akums’ vision to better serve clients and cater to the burgeoning Indian pharmaceutical market. This move positions Akums as a player in the industry, ready to meet the growing demands of the pharmaceutical market. Additionally, Pure and Cure acquired Ankur Drugs and Pharma Limited, Baddi plant in April 2022. The facility is operational for liquids manufacturing, contributing to Akums’ mission to enhance production capacities for oral tablets and liquids. This acquisition emphasizes upon Akums’ dedication to become a trusted partner in the pharmaceutical industry. Academic-Industry Synergy: Akums Collaborations for Pharma Prowess Akums’ commitment to bridging the gap between academia and industry is evident in its collaborations with educational institutions. One notable collaboration is with the Delhi Pharmaceutical Sciences and Research University (DPSRU). Together, they are engaged in researching and introducing products that cater specifically to Indian patients. This collaborative effort highlights Akums’ commitment to advancing pharmaceutical research and development, ultimately benefiting healthcare outcomes in the country. Another significant collaboration is with SGT University, Gurugram, where Akums has entered into a partnership. This collaboration aims to provide students with experiential learning, hands-on training, and opportunities to engage in live research projects within the pharmaceutical industry. The collaborative effort strives to make the next generation of pharmacy students futureready by equipping them with practical industry knowledge and skills. Beyond academic collaborations, Akums has partnered with industry leaders such as Leiutis Pharmaceuticals LLP, Biophore India Pharmaceuticals, Lyrus Life Sciences, and others. These collaborations aims to leverage collective research expertise and manufacturing capacities to introduce products in India across multiple therapeutic areas. As a Contract Development and Manufacturing Organization (CDMO), Akums aims to contribute to the research and development of a diverse range of pharmaceutical products, further solidifying its position as a player in shaping the future of the pharmaceutical sector in India. Shaping Healthcare with Excellence Akums Drugs & Pharmaceuticals emerges as a player in the pharmaceutical industry, driven by a commitment to ensure quality, innovation, and strategic collaborations. From technologies to strategic acquisitions and educational partnerships, Akums continues to evolve. Pure and Cure Healthcare Private Limited (“Pure and Cure”), a wholly owned subsidiary of Akums, Baddi
34 | B W BUSINESSWORLD | 13 January 2024 I N 2024, INDIA STANDS AT THE CROSSROADS of significant transformation, both domestically and on the global stage. The achievements of the previous year underscore the nation’s prowess in areas ranging from space exploration to digital infrastructure development, solidifying its leadership position globally. As we approach the upcoming national elections, the anticipation of heightened social media activity and political discourse is inevitable. The intersection of the elections with the nation’s economic outlook emphasises the critical importance of policy consistency and sustained socioeconomic growth. The post-election period is expected to usher in key reforms in labour, land, agriculture, and energy policies. The speed and cohesiveness with which these reforms unfold could be pivotal, shaping India’s economic trajectory for the next five years. A consistent policy approach is vital for providing a stable environment for businesses and investors, fostering confidence and sustained growth. Structurally, India appears well-positioned to maintain its status as the world’s fastestgrowing economy, but this trajectory requires careful policy navigation to avoid potential setbacks. The economy’s resilience is evident, yet challenges persist, particularly in areas like food inflation and rural sector growth. A surge in government spending post-elections, coupled with geopolitical uncertainties subsiding, sets the stage for a robust economic expansion in 2024. However, vigilance is needed, espeWHAT TO EXPECT IN 2024 ESSAY India is embarking on the central take-off phase of the S-curve, marking a period of accelerated urbanisation, industrialisation, rising household incomes, and heightened energy consumption. This juncture typically spans several decades By Srinath Sridharan 2024 & AHEAD INDIAN ECONOMIC OUTLOOK Photograph by Sabrimallick
13 January 2024 | B W BUSINESSWORLD | 35 cially regarding the impact of global oil prices and the nuances of geopolitical narratives and global protectionism. Furthermore, scaling up socio-economic improvements is imperative to address persistent challenges, including inequalities, unemployment, and rural development. A cohesive and forward-looking strategy, guided by the election outcomes, is vital to ensure that the positive socio-economic trends witnessed in recent years are not only sustained but expanded upon, fostering inclusive growth and long-term economic resilience. Despite persistent challenges posed by food and oil supply shocks, projections indicate that economic growth will sustain stability and resilience. In response to a deficient monsoon causing spikes in food inflation last year, the government implemented measures to mitigate the impact of supply shocks, including the suspension of rice exports and extensions of subsidies on cooking gas and food. However, unless substantial positive changes occur in the supply chain, the expectation is that food inflation will persist at elevated levels in the first half of 2024. This, in turn, influences the central bank’s perspective on repo rates. While maintaining a firm grip on interest rates may prove beneficial for longterm economic growth, it concurrently keeps credit costs elevated, posing challenges for companies in raising capital. The potential conclusion of the rate cycle adds an intriguing dimension, as it could unlock opportunities for increased investments. Moreover, the impact of global oil prices assumes significance, with fluctuations in the energy market influencing operational costs and economic stability. Geopolitical narratives and global protectionism also cast their shadows, contributing to the complex landscape that India Inc navigates. Anticipated is a revival in rural consumption propelled by the positive trajectory of real rural wages. This resurgence is further fortified by a noteworthy double-digit growth in public sector capital expenditure, stemming from both central and state government investments. The synergistic effect of robust public sector spending, coupled with an anticipated upswing in private investment, positions these factors as integral building blocks in India’s growth narrative for the year 2024. A pivotal development poised to shape the fiscal relations between the Centre and states for the next five years, starting from 2026, is the anticipated initiation of consultations by the Sixteenth Finance Commission. The challenges of fiscal federalism persist in India, marking an ongoing dynamic between the central government and the diverse states. This relationship revolves around the allocation of financial resources, taxation policies, and the distribution of responsibilities. The disparities in economic capacities among states, coupled with differing regional priorities, contribute to the complexity of fiscal federalism. Striking a balance between centralised fiscal control and granting states autonomy remains a perennial challenge. India is presently embarking on the cenAnticipated is a revival in rural consumption propelled by the POSITIVE TRAJECTORY of real rural wages. This resurgence is further fortified by a noteworthy DOUBLE-DIGIT growth in public sector capital expenditure, stemming from both central and STATE GOVERNMENT investments. The synergistic effect of robust public sector spending, coupled with an ANTICIPATED upswing in private investment, positions these FACTORS as integral building blocks in India's growth narrative for the YEAR 2024 Photograph by Indiapicturebudget
36 | B W BUSINESSWORLD | 13 January 2024 WHAT TO EXPECT IN 2024 ESSAY tral take-off phase of the S-curve, marking a period of accelerated urbanisation, industrialisation, rising household incomes, and heightened energy consumption. This juncture typically spans several decades, signifying a crucial stage in the country’s socio-economic evolution. The implications of this phase are profound, as it signifies a transformative era where urban centres expand, industries flourish, and the economic landscape undergoes substantial shifts. The simultaneous rise in household incomes not only reflects improved living standards but also fuels increased consumer spending, contributing to overall economic growth. As India continues its urbanisation trajectory, significant challenges loom on the socioeconomic horizon. The burgeoning urbanisation presents a dual imperative – to address the pressing socio-economic issues while ensuring inclusive economic growth across diverse consumer segments. Challenges include equitable access to resources and opportunities, adequate infrastructure development to sustain urban populations, and the need for skill development programmes to align the workforce with evolving urban demands. Achieving a balance in inclusive economic growth demands policies that not only spur economic activities but also address socioeconomic disparities, providing avenues for marginalised communities to participate in and benefit from the urbanisation process. Striking this delicate balance is pivotal for fostering sustainable and harmonised urban development that uplifts all segments of society. The urgent need for expanding healthcare facilities across India is underscored by the imperative to avoid another health crisis akin to the recent pandemic, which brought to light the inadequacies of the current medical system. The existing healthcare infrastructure is marred by a combination of broken systems and exorbitant costs, leaving many segments of the population vulnerable and underserved. Notably, public healthcare facilities, despite the widespread Swacch Bharat campaign, often suffer from physical neglect, evident when one ventures into government hospitals or observes the surroundings outside these institutions. Building more healthcare facilities is essential not only for addressing immediate health concerns but also for establishing a robust and accessible healthcare system that can effectively cater to the diverse healthcare needs of the population, ensuring a healthier and more resilient society. India’s imperative to build social infrastructure alongside civic infrastructure is paramount for cultivating liveable cities. While the focus on civic infrastructure is crucial for the physical well-being of urban areas, the vitality and sustainability of cities hinge equally on robust social infrastructure. This encompasses the development of schools, healthcare facilities, community centres, and cultural spaces that contribute to the overall quality of life for residents. A city’s liveability is not solely determined by its physical structures but also by the social fabric that fosters education, healthcare access, community engagement, and cultural expression. Integrating social infrastructure into urban planning ensures that cities become not just functional spaces but vibrant, inclusive communities where people can thrive holistically, marking a pivotal step towards creating truly liveable urban environments in India. India is at the cusp of potential geopolitical uncertainties and foreign policy challenges, coinciding with its growing stature as an economic powerhouse. This juncture may witness historic and unprecedented political changes and policy shifts aimed at addressing segments that have been historically overlooked. The writer is a policy researcher & corporate advisor Photograph by Indiapicturebudget
I NDIA HAS BEEN A picture of resilience when it comes to its economy. No matter how vicious the headwinds, the engines of the economy keep chugging along. Take, for instance, exports, both of merchandise and services. The country clocked an impressive $499.46 billion in exports during April-November 2023, demonstrating remarkable stability and only a slight dip from the $506.52 billion recorded in the same period in 2022. Or take the case of direct tax collections for the financial year 2023-24. Provisional figures as of December 17, 2023, stand at Rs 13,70,388 crore, which is 20.66 per cent higher compared to Rs 11,35,754 crore collected during the corresponding period of FY2022-23. The net direct tax collection of Rs 13,70,388 crore includes Corporation Tax (CIT) of Rs 6,94,798 crore (net of refund) and Personal Income Tax (PIT) including Securities Transaction Tax (STT) of Rs 6,72,962 crore (net of refund). The provisional figure for gross collection of direct taxes (before adjusting for refunds) for FY 2023-24 is equally impressive at Rs 15,95,639 crore. This marks a significant growth of 17 per cent over the collections of FY23. This Rs 15,95,639 crore includes Corporation Tax (CIT) of Rs 7,90,049 crore and Personal Income Tax (PIT) including Securities Transaction Tax (STT) of Rs 8,02,902 crore. Among the various collections, Advance Tax for FY 2023-24 reached Rs 6,25,249 crore as of 17.12.2023, reflecting the nation’s strong economic activity. This is 19.94 per cent higher compared to the corresponding period in FY 2022-23, underlining the positive momentum in the Indian economy. It comprises Corporation Tax (CIT) of Rs 4,81,840 crore and Personal Income Tax (PIT) of Rs 1,43,404 crore, reflecting a diverse and flourishing economic landscape. Refunds amounting to Rs 2,25,251 crore have also been issued in FY 2023-24 till 17.12.2023. Decoding the numbers, D.K. Srivastava, Chief Policy Advisor, EY India says: “On the fiscal side, direct tax revenues have performed exceptionally well so far in FY24 with a growth of 24.1 per cent during AprilOctober 2023. Central government’s decision to frontload capital spending in this year, which grew 33.7 per cent during the first seven months and is budgeted to grow 37.4 per cent for FY24, has served as a prime driver of growth.” WHAT TO EXPECT IN 2024 ECONOMY The economy, as per the latest projections of the central bank, is expected to grow at 7 per cent in FY24 in spite of the global geopolitical uncertainties The central bank had earlier forecast a growth of 6.5 per cent FIRING ON ALL CYLINDERS Robust exports and direct tax collections demonstrate a resilient economy going into 2024 By Ashish Sinha 38 | B W BUSINESSWORLD | 13 January 2024 Photograph by Best3d
Growth Optimism The economy, as per the latest projections of the central bank, is expected to grow at 7 per cent in FY24 in spite of the ongoing global geopolitical uncertainties. The central bank had earlier forecast a growth of 6.5 per cent. The ADB, in its December 2023 release of the Asian Development Outlook has projected India’s growth at 6.7 per cent for FY24. Some of the high frequency indicators confirm this growth optimism. In November 2023, both manufacturing and services PMI remained at high levels of 56 and 56.9 respectively. Robust sales of automobiles are yet another strong indicator that bodes well for 2024. As per the Federation of Automobile Dealers Association (FADA), during the 42-day festive period of CY2023, the domestic automotive sector reached a new milestone with vehicle sales climbing to 37.93 lakh, a 19 per cent increase over 31.95 lakh units sold during the same period last year. “Significant growth was observed in the two-wheeler, three-wheeler, commercial vehicles and passenger vehicles. Rural areas contributed to the surge in two-wheeler purchases. Despite initial underperformance during Navratri, particularly in the passenger vehicle sector, the situation improved by Deepawali, ending with a 10 per cent growth rate,” says Manish Raj Singhania, President, FADA. The foreign direct investment (FDI) inflows registered its highest ever annual inflow of $85 billion in FY22. During FY23, provisional estimates have reported FDI inflows of $71 billion. During the current financial year (up-to September 2023) FDI worth $33 billion has been reported. The government expects substantial increase in FDI inflows in 2024. PLI Booster The recently introduced Production Linked Incentive (PLI) schemes for 14 key sectors have seen 746 approved applications and PLI units in 150+ districts across 24 states, with a total investment of more than Rs 95,000 crore reported till September 2023. This has resulted in Rs 7.80 lakh crore production/sales, employment generation for over 6.4 lakh people, and a boost in exports by Rs 3.20 lakh crore. The government anticipates further growth in these figures in 2024. Open Network for Digital Commerce (ONDC) is another mega initiative that is likely to flourish next year and beyond. Latest data shows ONDC recorded more than 6.3 million transactions in November 2023 across more than 600 cities over 2.3 lakh sellers and service providers were active on the ONDC network. The Index of Eight Core Industries (ICI) gauges eight sectors like cement, coal, crude oil, electricity, fertilisers, natural gas, petroleum refinery products, and steel, collectively constituting 40.27 per cent of the Index of Industrial Production. In FY23, the ICI showed a 7.8 per cent annual growth, surpassing the 1.5 per cent average from FY20 to FY22. [email protected] NUMBERS OF NOTE n India's exports resilient at $499.46 billion n Direct tax collections soar 20.66% n Gross direct tax collections up 17% n Advance Tax up 20% 13 January 2024 | B W BUSINESSWORLD | 39
40 | B W BUSINESSWORLD | 13 January 2024 ITH THE GENERAL elections scheduled for May 2024, the Government of India (GoI) will present an Interim Budget in February 2024 and the main budget possibly in July 2024. The economy, as per RBI’s projections, is expected to show a growth of 7 per cent in FY24 in spite of the ongoing global geopolitical uncertainties, increasing its earlier forecast of 6.5 per cent. The ADB, in its December 2023 release of the Asian Development Outlook has projected India’s growth at 6.7 per cent for FY24. Some of the high frequency indicators confirm this growth optimism. In November 2023, both manufacturing and services PMI remained at high levels of 56 and 56.9 respectively. Gross GST collections remained high at Rs1.67 lakh crore in November 2023 as compared to Rs1.72 lakh crore in October 2023. Continuing Global Drag T h e g l o b a l s i t u a t i o n c o n t i n u e s to cause concern. The Organisation for Economic Co-operation a n d D e v e l o p m e n t ( O E C D ) , i n its November 2023 issue of the Economic Outlook has projected global growth to fall from 3.3 per cent in 2022 to 2.9 per cent in 2023 and further to 2.7 per cent in 2024, the lowest annual rate since the global financial crisis other than the first year of the pandemic. Earlier, the IMF had projected a medium-term global growth in the range of 2.9 per cent to 3.2 per cent during 2023 to 2028. We expect some of the ongoing global conflicts to ease even if final resolutions may not be achieved. This would improve the supply side situation including that for global crude. India may however continue to expect subdued demand for its exports and the contribution of net exports to real GDP growth is likely to remain negative although it may be lower than the recent peak of (-)4.1 per cent points in the first half of FY24. Fiscal Support to Growth On the fiscal side, direct tax revenues have performed exceptionally well so far WHAT TO EXPECT IN 2024 By D.K. SRIVASTAVA, Chief Policy Advisor, EY India CONTINUE PRIORITISATION OF CAPITAL EXPENDITURE The government’s decision to frontload capital spending this year, which is budgeted to grow 37.4 per cent in FY24, has been the main growth driver W ECONOMY
13 January 2024 | B W BUSINESSWORLD | 41 in FY24 with a growth of 24.1 per cent during April-October 2023. GoI’s decision to frontload capital spending in this year which grew by 33.7 per cent during the first seven months and is budgeted to grow by 37.4 per cent for FY24 has served as a prime driver of growth. This thrust towards building infrastructure which is being supported by state governments as well has led to strong and positive multiplier effects, leading to a broad-based recovery of the Indian economy. In fact, sectors such as manufacturing, construction, financial, real estate et al., and public administration, defence etc. have shown a robust growth in the first half of FY24. The manufacturing capacity utilisation has also improved in recent quarters. We expect government’s prioritisation of capital expenditure to continue in the medium term for supporting growth. Restoring Fiscal Consolidation Growth is critically dependent on India’s saving and investment ratios. In nominal terms, the saving rate has progressively come down to 29.2 per cent in FY23 from its peak of 36.9 per cent in FY11. The nominal investment rate measured in terms of gross fixed capital formation to GDP ratio has also fallen to 29.2 per cent in FY23 from its recent peak of 34.3 per cent in FY12. The real saving and investment rates are higher because of lower implicit price deflator (IPD)-based inflation of capital goods as compared to consumption goods. It is important to further increase the saving and investment rates for India’s mediumterm growth. We may achieve the budgeted fiscal deficit target of 5.9 per cent of GDP or miss it only by a small margin. This would facilitate achieving a fiscal deficit of 5.2 per cent and 4.5 per cent of GDP in the next two years. Even so, the debt-GDP ratio and the fiscal deficit-GDP ratio will remain well above their Fiscal Responsibility and Budget Management (FRBM) benchmarks of 40 per cent and 3 per cent respectively. The sectoral saving and investment profiles are such that it is the surplus of the household sector savings over its investment reflected in household sector financial savings which becomes available for investment by the public and the private corporate sectors. The level of household financial savings has come down in recent years. It was at its lowest at 5.1 per cent of GDP in FY23, falling from an average of 7.8 per cent during FY16 to FY20. This has implied that the government had accessed all of these surplus savings, leaving little for private corporate investment. This situation should revert to its more normal balance consistent with central and state governments together accessing about 6 per cent of GDP for their fiscal deficit. The combined fiscal deficit of central and state governments which peaked in the Covid-affected year at 12.9 per cent has to be reduced sharply in the next few years to sustain India’s growth momentum. GoI’s decision to frontload capital spending in this year which grew by 33.7 per cent during the first seven months and is budgeted to grow by 37.4 per cent for FY24 has served as a prime driver of growth Photograph by Mustahtar
42 | B W BUSINESSWORLD | 13 January 2024 T HAS BEEN A great year for stock markets around the world, with the S&P 500 delivering 20 per cent returns, Dow Jones at an all-time high, and even Japan touching its highest levels since 1989. The benchmark Sensex surged past 70,000 levels for the first time in early trade on December 11, with 70 per cent of the last 10,000 points taking just 31 days to reach. On December 10, the Nifty 50 tested the 21,000-mark. As per data by the International Monetary Fund (IMF), the global inflation levels are expected to cool down to 6.9 per cent from 8.7 per cent in the previous year. This cooling of inflation has raised expectations about a pause in rate hikes followed by rate cuts by 2024 end. While central banks across the world may consider pausing rate hikes and even resort to rate cuts in the latter part of 2024, there is certainly no going back to the lows that followed 2008-2009. A recent report by Vanguard stated that for the next decade, the US sock markets could return to their 4.2 per cent - 6.2 per cent range and they are forecasting stronger potential returns from the emerging markets. The Indian economy has been very resilient in the last couple of years despite the growing challenges faced by the world. The 7.6 per cent print for GDP growth reported for the last quarter has only reinforced the fact that India should be the fastest-growing large economy in the world for the next few years. The strong win for the ruling party in the just-concluded state elections has also added to the growing positive sentiments which further caused the spurt in the markets. We began 2023 with apprehensions including the possibility of continued rise in inflation, rising risk aversion and a recession in developed economies. But in most of the cases we witnessed, it transpired favourably than anticipated. The Indian equity market rebounded strongly in 2023, reaching several new highs, including one in the recent past, following a lacklustre initial quarter. The midcap and small cap indiWHAT TO EXPECT IN 2024 By PRADEEP GUPTA, Co-founder & Vice-chairman, Anand Rathi Group WAVE OF POSITIVITY AHEAD India maintains the highest macroeconomic performance among its peers and continues to be one of the most captivating nations in the emerging market space I MARKETS
13 January 2024 | B W BUSINESSWORLD | 43 ces exhibited exceptional performance throughout 2023. In contrast, market sentiments are considerably more optimistic as we enter 2024. The consensus anticipates a continuation of softer inflation, a gradual but early cuts in monetary policy rates in the major industrialised countries, and the absence of at least an annual recession in both the US and euro area. A number of these may not materialise in practise. Rapid monetary tightening initiated in 2022 may have a significantly greater adverse effect on growth than is presently estimated. As a result of the inflationary surge that occurred in 2022, the major central banks might be considerably more reticent about reducing interest rates during the current cycle. Recessions in the euro area and the US continue to be distinct possibilities. These setbacks, in conjunction with the current overvalued state of the US equity market, indicate that a significant market correction in the United States is probable in 2024. Historically, Indian equity markets have outperformed their counterparts across all medium to longterm investment time periods. Risks & Challenges One of the key risks that we are looking at is exposure to significant global risks, such as recession in developed nations, a more gradual relaxation of monetary policy rates than anticipated, and the potential for corrections in the US equity market. Moreover, the Indian equity market is confronted with substantial risks due to excessive fiscal deficits and public debt levels in the US, higher-than-anticipated unemployment rates in developed nations, ongoing geopolitical uncertainties, and US elections. Key risk factors for the Indian equity market on the domestic front include a deceleration in corporate investment and populist declarations by political parties in anticipation of the upcoming general elections, as well as a deceleration in private consumption as indicated by recently released GDP data. The sustained substantial inflows into the Indian equity market, particularly from domestic investors, and the public’s interest in primary equity capital raises (especially IPOs) by companies appear to indicate that investors maintain a positive outlook regarding the Indian equity markets. We do not observe any substantial overvaluation of mid-cap or small cap equities relative to their historical averages, at least at the index level. On the contrary, over the last two years, the performance of large cap indices has been lacklustre, yielding returns in the single digits, which are below historical averages. India maintains the highest macroeconomic performance among its peers and continues to be one of the most captivating nations in the emerging market space. Despite concerns regarding a deceleration in consumer demand and a lacklustre demand for India’s exports of goods, we anticipate India’s GDP to expand by approximately 6.5 per cent in the current and following fiscal years, we expect Indian equities to maintain the upward journey in the near term and are positive on the long term. While central banks across the world may consider pausing rate hikes and even resort to rate cuts in the latter part of 2024, there is certainly no going back to the lows that followed 2008-2009 Photograph by Coffeekai
44 | B W BUSINESSWORLD | 13 January 2024 NDIA’S ENERGY AMBITIONS are as vast as its landscape. Prime Minister Modi’s bold 500 GW renewable energy target by 2030, nearly threefold the 175 GW installed today, signals a dramatic shift from coalfuelled growth to a future powered by sunshine. But this renewable revolution won’t be driven by wind farms and solar panels alone. Three critical trends are reshaping the energy landscape, promising to ensure reliable, equitable, and sustainable power for the world’s second-most populous nation. The Rise of RTC (Round-the-Clock) Power IRENA’s Renewable Capacity Statistics 2023 report revealed a remarkable shift. An impressive 83 per cent of all new power capacity added last year was from renewable sources. WHAT TO EXPECT IN 2024 By Pratik Agarwal Achieving consistent 24x7 green power requires integration of an array of technological solutions, including multi-location, wind, solar, hydro, pump hydro, batteries, and even a modest utilisation of gas I ENERGY CHASING THE SUN: TRENDS POWERING INDIA’S GREEN TRANSITION Evacuation of this copious amount of green power, however, involves two fundamental aspects. Firstly, it involves the physical transfer of green electrons originating from renewable rich locations like Bikaner (Rajasthan), Khavda (Gujarat) and Gadag (Karnataka) into the grid so that it can be consumed in load centres like Maharashtra, UP, West Bengal. This process primarily revolves around the building of large cross-country transmission lines. If we go by the IEA report, the world will need more than 80 million km of grids by 2040, equivalent of the entire existing global grid, to achieve climate goals. The second piece is how do you actually integrate that power? Because green power is intermittent. And yet renewable energy ambitions, like that of India’s, are no longer content with intermittency. The days of solar sunsets and wind lulls have been replaced with a sense of urgency for RTC. Roundthe-Clock, however, necessitates the implementation of smart grids as well as storage technologies. Achieving a consistent 24x7 green power requires an integration of an array of technological solutions, including multi-location, wind, solar as well as other technologies like hydro, pump hydro, batteries, and even a modest utilisation of gas. The About the Author: Pratik Agarwal is MD, Sterlite Power and Chairman, Serentica Renewables
45 | B W BUSINESSWORLD | 13 January 2024 convergence of all these solutions will help deliver 24x7 power. To some extent developers are attempting to enhance green energy availability for longer duration by combining wind and solar in multiple locations. From Discoms to decarbonising giants, RTC green power is in demand. The appetite of the Distribution companies, for firm, predictable renewable power, “load-matched” to demand, is growing. Nor are they alone. The C&I segment too, which consumes 70GW, out of the total 220 GW energy consumption in the country, is going full throttle on decarbonisation. Their furnaces, smelters, and glass factories, once fuelled by fossil fuel, is now looking towards flat renewable energy to keep their vital operations running. That is also probably the reason why experts predict that by 2030, RTC projects will make up nearly a quarter of India’s renewable capacity, a stark contrast to the traditional single-source wind and solar farms. The Storage Angle Now that we have established the need for RTC, it brings us to our next piece – storage. India’s energy storage boom is being fuelled by two powerful engines: declining battery prices and the rise of pumped hydro projects. Battery costs, which have long been a challenge for clean energy, are on a downward spiral. Rising production capacity across the globe, coupled with falling raw material prices, is making these energy sponges increasingly affordable. Take the case of lithium-ion batteries, the workhorses of electric vehicles. In just five years, their price has halved. BloombergNEF’s annual battery price survey finds a 14 per cent drop from 2022 to 2023, to a record low of $139/kWh. This freefall is projected to continue, with estimates suggesting a further 40 per cents drop by 2025. While batteries can sprint, for longer-duration storage, India is turning to pumped hydro, a proven technology. Imagine two reservoirs at different elevations, connected by a tunnel and turbines. Surplus energy pumps water uphill, storing it as potential energy. When needed, the turbines spin into action, generating electricity. The draft National Electricity Plan (NEP) published by the Central Electricity Authority indicates that 18.8 GW of Pumped Storage Projects (PSPs) and 51.5 GW of five-hour Battery Energy Storage Systems (BESS) are required to integrate the planned renewable energy capacity addition till 2032. Pumped Storage Projects provide the necessary scale of storage and have a long service life of more than 40-50 years. This also results in a low cost of delivered energy over the life of the projects. They are non-polluting and are more environmentally friendly and speak volumes about its commitment to reliable clean energy. Keeping the Human Quotient Strong India’s renewable sprint must not leave communities behind. As vast solar, wind farms and transmission towers come up, it is evident that all this development will require large areas of land. But land is scarce and precious, and for the clean power infrastructure developers they are forever encountering NIMBY (Not in My Back Yard) – a term that got coined to refer to opposition from communities, Indigenous groups, conservation groups and even local public and regulatory authorities. It is here that the importance of stakeholder management comes into play. Consider the story of the Sarna community in Jharkhand. Our transmission line passed through the indigenous Sarna community, which has worked tirelessly to preserve their small tracts of land. The oldest tree in the village was considered divine and came in the way of the project route. Responsible development needed a collaborative approach. After working with the community leaders for alternative solutions, rituals were carried out to ensure that their tradition got the deserved respect. This greatly addressed their concerns; the entire process was transparent and the community ownership model helped turn the tide. The Sarna community were not just the landowners, but active participants in the project. PUMPED STORAGE PROJECTS PROVIDE THE NECESSARY SCALE OF STORAGE AND HAVE A LONG SERVICE LIFE OF MORE THAN 40-50 YEARS. THIS ALSO RESULTS IN A LOW COST OF DELIVERED ENERGY OVER THE LIFE OF THE PROJECTS Photograph: Artjazz
46 | B W BUSINESSWORLD | 13 January 2024 S WE LOOK BACK on 2023, there have been several positive developments in growing India’s renewable energy (RE) capacity, encouraging the development of local supply chain for key components of RE, and finally, spurring growth of new technologies, like BESS and green hydrogen. The year witnessed the rollout of key initiatives, such as the commitment from the central government to bid out 50 GW of renewable energy capacity annually until FY2028, including a minimum of 10 GW of wind power, approval of Rs 3,670 crore for the development of 4,000 MWh of battery energy storage systems (BESS) to further strengthen the integration of renewables into the power infrastructure, allocation of total capacity of 39.6 GW for domestic solar PV module manufacturing, and rollout of the National Green Hydrogen Mission with a budget of ₹19,744 crore, aimed at producing 5 million metric tonne of green hydrogen annually by 2030. As we move into 2024, India is gearing up to accelerate its renewable energy capacity, with a target of surpassing 500 GW by 2030. This stated commitment is aligned with the ambitious targets set at COP28 by 118 countries to triple their renewable energy capacity over the same time period. The current financial year saw a surge in project tendering, with over 16 GW of renewable energy projects bid out and another 17 GW in progress. The installed renewable energy capacity is expected to increase to ~170 GW by March 2025, up from 132 GW as of October 2023. Drop In Cell, Module Prices A critical factor supporting this expansion is the substantial drop in solar cell and module prices, which have fallen by ~65 per cent and ~50 per cent, respectively, over the past 12 months. The general trend of falling solar module prices reversed in the last quarter of FY ’21 due to higher costs of raw materials like polysilicon and aluminum. This had a negative impact WHAT TO EXPECT IN 2024 By Srivatsan Iyer, Global CEO, Hero Future Energies RESURGENCE FOR RENEWABLE ENERGY MIX In line with the targets set at COP28, India is gearing up to accelerate its renewable energy capacity with a goal to surpass 500 GW by 2030 A ENERGY
47 | B W BUSINESSWORLD | 13 January 2024 on ~20 GW of projects auctioned across FY2021 and FY2022, as developers had factored in the falling price trend while bidding. The current decline is driving a healthy improvement in the project economics and viability for upcoming solar power projects. The government’s suspension of the Approved List of Models and Manufacturers (ALMM) order until March 31, 2024, has also provided a temporary window of respite for developers, allowing them to utilize cost-effective Chinese modules. The lower prices across the value chain will also provide a cushioning effect to developers who were expecting to pay higher prices for domestic modules once the ALMM comes back into effect. Furthermore, the government’s policy to promote round-the-clock (RTC) power with solar, wind and storage is expected to catalyse the development of projects requiring the integration of multiple technologies. The aforementioned 50 GW of tendering annually is expected to have a strong bias towards dispatchable power as opposed to plain vanilla solar and wind projects. India has also set a target of achieving 140 GW of installed wind energy capacity by 2030, including 30 GW of offshore wind (primarily focused on Tamil Nadu and Gujarat). Promoting Technologies The government is also actively promoting new technology developments in areas such as battery storage manufacturing through initiatives like the Production Linked Incentive (PLI) scheme for battery chemistry. The rise in renewable energy capacity over the next six years is projected to increase the share of renewable energy plus large hydro in India’s electricity generation from 23 per cent in FY 2023 to around 40 per cent by FY 2030. Advances in battery chemistries and domestic manufacturing will help accelerate the adoption of renewable energy while ensuring stability of the grid. Despite the positive outlook, challenges persist, particularly in acquisition of land for project development and the rate of addition of infrastructure relating to transmission and distribution, which could impede or derail the rate of capacity additions. The continued dependency on imported solar PV cells and wafers also remains a concern until fully integrated module manufacturing units are developed in India, to support the domestic growth ambitions. To summarise, 2024 is poised to be an interesting year for India’s renewable energy sector. With substantial government support, reduced costs of solar modules, and a strong focus on hybrid projects, India is steadily advancing towards its ambitious renewable energy targets. While challenges in execution and infrastructure development remain, the country’s commitment to a sustainable energy future remains firm and is expected to drive significant growth in the renewable energy sector over the coming years. A critical factor supporting the expansion of renewable energy capacity is the substantial drop in solar cell and module prices, which have fallen by ~65 per cent and ~50 %, respectively, over the past 12 months Photograph: Malpetr
48 | B W BUSINESSWORLD | 13 January 2024 NE OF THE key verticals fuelling India’s ambitious growth story is infrastructure. India’s population growth and economic development requires robust infrastructure in roads, railways, aviation and ports. Infrastructure development is important to achieve India’s 2047 vision for a $ 40 trillion economy and move from a developing economy to a developed economy. India’s infrastructure sector comprises of transport, power, bridges, dams, roads, smart cities development, water, and other public utilities and various key projects worth around Rs 108 trillion are at different stages of implementation under the National Infrastructure Pipeline (NIP). Government’s focus on building infrastructure of the future has been evident given the various initiatives launched recently. Gati Shakti has been a forerunner to bring systemic & effective reforms in the infrastructure sector. Government has allocated Rs 111 crore under the National Infrastructure Pipeline (NIP) for FY2019-25, with sectors such as energy, roads, urban and railways amounting to a whopping 71 per cent of the projected infrastructure investment. The online “holistic governance” system — PM Gati Shakti connects 16 ministries — such as Roads and Highways, Railways, Shipping, Petroleum and Gas, Power, Telecom, Shipping, and Aviation — with the objective smooth planning and execution of infrastructure projects. PM Gati Shakti will enable multiple government departments to synchronise their efforts into a multi-modal network. Several other Government initiatives like Asset Monetisation Scheme and New Guidelines on Procurement, etc. are pushing the Indian infrastructure sector in the right direction. With government’s focus on building robust infrastructure, Engineering Consultancy Services, one of the many consultancy domains, will also be witnessing massive demand especially in developing countries like India. The need for specialists with experience and expertise are required to offer sustainable solutions to Indian infrastructure needs. While ‘innovation’ translates to letting go of conventional approaches and replacing those with modern solutions that are more viable and effective, many practicing professionals, including consultants need to be upskilled to cater to the evolving demands. Rising Demand for ECS Engineering and technical consultancy services, include a wide bouquet of premium services which starts from pre-project, project execution and post-project, broadly coveting functions such as project identification and valuation; environmental impact assessment, development and sourcing of technologies; preparation of feasibility reports, market studies; designing of projects; engineering design services, project management services, architectural/construction engineering services; and project commissioning, operations and maintenance. The infrastructure industry must put innovation at the heart of its future developmental goals to address many of the current and impending domestic and global challenges such as climate change, energy intensity of the economy, effective and efficient infrastructure, in line with the increased pace of urbanisation in the developing countries. As the infrastructure sector continues to grow in India, there are rising demands for many new technologies in the ever-growing construction industry. . WHAT TO EXPECT IN 2024 By SANDEEP GULATI, MD, India and South Asia, Egis ECS TO WITNESS DEMAND GROWTH Engineering Consultancy Services (ECS), one of the many consultancy domains, will be witnessing massive demand due to robust infra-development O INFRASTRUCTURE
50 | B W BUSINESSWORLD | 13 January 2024 WHAT A YEAR it has been for India’s housing sector! Projections are suggesting a remarkable ten-year high in terms of both sales and new launches, and potentially surpassing the 300,000-unit milestone. What’s even more thrilling is that this trend is expected to persist in 2024. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa - CBRE, attributes this shift to evolving homebuyer preferences. “Affordability will no longer be the sole decisive factor for homebuyers as health and safety, community living, sustainability, and integration of smart home technologies have also started to emerge as key factors in home purchase decisions,” says Magazine. He states that the demand for projects in the mid and budget/affordable category (Rs 45 lakh to Rs 1 crore) is projected to remain strong, aligning with the trends of the past couple of years. “We also expect projects in the premium and luxury segments (Rs 2-4 crore and above) to continue experiencing healthy growth,” he adds. As per ANAROCK Property Consultants, the residential sector surpassed all previous highs in 2023 with sales creating a new peak every quarter. Even before Q4 2023 sales numbers are collated, the strong sales momentum indicates that the total value of homes sold in 2023 will cross the Rs 4.5 lakh croremark, which will be 38 per cent more than the total sales value of Rs 3.27 lakh crore clocked in 2022, it says. Sample this: In the first nine months of 2023, the total residential property sales value is already 7 per cent higher compared to last year, with the top seven cities seeing sale of inventory worth Rs 3,48,776 crore, whereas the corresponding figure for the entire 2022 stood at Rs 3,26,877 crore. Between January and September 2023, around 3.49 lakh units were sold in the top seven cities, against around 3.65 lakh units in whole of 2022. Anuj Puri, Chairman - ANAROCK Group, says, “The fact that the housing sales value in 9M 2023 exceeded that of the whole of entire 2022 reflects the increased demand for premium luxury homes this year. If we look at the quarter-on-quarter sales values in 2023, each quarter saw consistent growth and overall sales value has already breached the Rs 1 lakh crore mark.” However, the housing sector, particularly the ‘affordable housing’ segment did not see any growth. On the contrary, there was a shrinkage. Shishir Baijal, Chairman and MD, Knight Frank India explains, “The shrinkage in sales of affordable housing may be influenced by various factors, including economic considerations, relatively greater shrinkage in affordability, changing demographic profiles, or shifts in the overall housing demand.” Developers, keen on maximising their market responsiveness, have adjusted their product offerings to align with the prevailing demand for premium residences, he adds. Expectations in 2024 Experts says the metros and Tier 1 cities are expected to continue being the major recipients of equity inflows. Tier 2 cities are also WHAT TO EXPECT IN 2024 HOUSING HOUSING HIGH HOPES The trend of homebuyers favouring projects with better access to infrastructure, amenities and well-designed indoor and outdoor spaces is set to continue in the new year By Ashish Sinha ROARING SALES n Record homes sold in 2023 n 2024 to see same trend continue n Home sales value seen in 2024: over Rs 5 lakh cr n 44% jump in total sales value of homes sold in 9M 23 vs 9M22 n Tier-II cities to see more investments