It all started with the BRICs report. It predicted that India and three others -China, Russia and Brazil – would be giant economic forces in the coming century. Surprisingly, the Indian economy is moving much faster than the BRICs assumed GDP growth figure of 6.5 per cent. India is growing at more than 8% and may soon get into a growth rate of double digit. Even the conservative NCAER agrees for 8.5%(?), though it fears that the Planning Commission’s ambitious nine per cent growth target for the 11th plan may not be achievable.
What will be scenario of the Indian economy by 2010, the year India will hold Commonwealth Games, barely 39 months away?
GDP: GDP climbed to about $690 billion in 2005 up from about $600 billion in 2003. With the current rate of 8 per cent of growth, GDP will touch $1 trillion slightly before 2010. But with the higher growth rate expected, the GDP may be better.
Passenger cars: India is expected to produce 1.1 million cars this year, and over 2 million by 2010.
Two-wheelers that keep middle-class Indians on the roads: India’s two-wheeler industry is the world’s second largest and will turn out 7 million vehicles this year. That can easily go up to about 12 million by 2010.
Colour televisions, usually one of the first electronic purchases that every Indian household makes: India will make about 11 million television sets this year and the production is likely to climb to about 20 million by 2010.
Hi-tech outsourcing, the sector that has built India a brand: Outsourcing is climbing at a steady 30 per cent annually and exports are slated to hit $60 billion by 2010. Some say it to grow to $100 billion.
Steel: Ram Vilas Paswan says that production of steel is set to overtake all the earlier targets and will touch 80 million tonnes (mt) by 2011-12, a 23 per cent jump over the earlier projection of 65 mt.
Tata Motors plans to roll out its small car by early 2008, perhaps from its Singur, West Bengal plant. And Tata Motors expects to reach a production figure of 5,00,000, or may be million. Tata Motors is building another Rs 2,500-crore plant for its super-hit mini-truck, the Ace that created a history of a sort. Tata Motors began rather modestly in mid-2005 with plans to produce 30,000 of these ‘last mile’ vehicles at its Pune factory. It ended up selling about 60,000 in the first year. The Uttaranchal factory is expected to turn out about 250,000 vehicles once it is ready in less than a year.
Maruti Udyog is investing almost $2 billion (Rs 9,000 crore) in the next five years, pushing up production from 600,000 to 900,000 in about three years. Maruti has many plans such as diesel engine manufacturing as well as contract manufacturing up to 4,00,000 cars annually for export. Auto sector has reasons for this optimism- very low auto penetration of huge market of India and low cost (at least 35% cheaper than US) quality manufacturing in India. Auto sector is over-enthusiastic, as India’s per capita income will reach about $1,000 roughly around 2010. As established, the number of people buying cars jumps dramatically when per capita income touches about $1,000.
Hyundai Motors and M&M are other companies that are having big plans in auto sectors.
By 2010, the Indian auto industry may actually become a hub for sourcing components and for the manufacture of small cars for export. Estimates indicate that the four-wheeler auto industry is projected to grow at a CAGR of 9% between 2005-2014 and the two-wheeler industry at 16% in the same period. Auto component export may reach about 20 billion by 2010.
Retail: Kishore Biyani’s recently re-named company Future Group is shopping to push up store space in malls and plazas across India from 4 million sq. ft to about 8 million sq. ft this year; and aims to touch about 30 million sq. ft by 2010. Biyani hopes that his group will grow from its current $1 billion turnover to anywhere between $6 billion and $7 billion by 2010. The Retailers Association of India (RAI) expects that organised retail will climb from about 18 million sq. ft currently to almost 60 million sq. ft by 2010. Reliance Industries’ Mukesh Ambani plans to spend about Rs 25,000 crore (that’s roughly $5 billion if that helps to bring all those zeroes into perspective) over the next five years. The Aditya Birla group has readied a blueprint for India’s second-largest retail rollout with Rs 15,000-crore investment in over 6,000 stores in three years.
Telecom: Ambitious Maran, the young minister is now talking about having 500 million phones by 2010. India has become world-beaters in telecom with about 170 million phones ringing already. After clocking a world record by adding over 6 million subscribers in September, surpassing China, India is expected to have added another 7 million in October. India is claiming the ‘fastest growth’ crown from the Chinese. Some Other market research companies have estimated that India will, in fact, overtake China when it comes to selling mobile instruments by around 2009. Nokia, LG and Motorola have put up factories to manufacture mobile phones after years of saying that the Indian market was better supplied from abroad.
By 2010, India, once being hopelessly outclassed by China, will be the second largest manufacturing nation of the world. Engineering outsourcing is another potentially great sector that can suck all the technically competent Indians.
Both high-tech sector as well as manufacturing will require huge lot of skilled technocrats. This year IT sector plans to employ 1,00,000 freshers (expected shortage 5,00,000 by 2010). The main challenge will be for the educational institutes. While Maruti’s Jagdish Khattar demands a port tailored specially for car exports, Karnik requires the creation of six ‘knowledge cities’ from where InfoTech giants can reach out to the world.
And may be we can sort out our ways to reach bilateral trade target of US$ 50 billion by 2010 between Chindia.