Thursday, March 11, 2010


I read this article in TOI-crest and wanted to share it on my blog. Read what this article contains:

The numbers are impressive - per capita GDP has more than doubled from Rs 15,625 in 2000 to Rs 37,490 in 2009, foreign exchange reserves have risen nine-fold from $34 billion to $286 billion in the same period, and the Bombay Stock Exchange's market capitalisation has soared from $184 billion to over $1.2 trillion. But the figures still don't truly reflect the Indian economy's triumphant march through this decade, or the intimidating aura that Indian business is increasingly acquiring in western eyes. To get a sense of that, rewind to a recent interview which appeared in TOI-Crest , in which trendspotter Malcolm Gladwell was asked if he had a message for Indians. His response: "One day, all of us in the US will be working for you. Be kind to us." (Actually his answer was the reason for which I liked this article, such a simple answer but means a lot).

Sure, it was a joke. But it also contained a kernel of truth. Thousands of Americans and foreigners of other nationalities already work in companies owned by Indians. If the 1990s was when India let in the world, the Noughties is when it went out to the world - and increasingly did so as a conquering force.

Big-ticket acquisitions made headlines - the Tatas acquiring Corus and Jaguar Land Rover, the Aditya Birla Group buying Novelis, ONGC Videsh taking over Imperial Energy, Videocon picking up Daewoo Electronics. But away from the spotlight, many smaller companies too were planting the tricolour on corporate headquarters around the globe, with Indian companies acquiring 828 foreign firms between 2005 and 2009 alone. The term 'Indian multinational' is no longer an oxymoron, and Tata Group chairman Ratan Tata recently said his successor could well be an expatriate - after all, 65 per cent of the group's $71 billion revenue now comes from overseas operations.

While India Inc was going global, the domestic economy was going from strength to strength. After growing a strong 6.4 per cent in 1999-2000 , it weathered a rough couple of years, but picked up pace from 2003-04 (8.5 per cent) and really accelerated from 2005-06 , posting 9.5 per cent, 9.7 per cent and 9 per cent in three straight years of China-like growth. The global recession slowed down GDP growth in 2008-09 to an estimated 6.7 per cent, and there was talk of it slipping below 6 per cent this year, but an eye-popping 7.9 per cent spurt in the July-September quarter has led the finance ministry to estimate 7.75 per cent growth for this fiscal - a figure the developed world can only sigh about wistfully.

Once, India feared globalisation . Today, World Bank president Robert Zoellick, among others, describes India as a crucial pillar in an interconnected world. The future seems bright - according to several projections, India will overtake China as the world's fastest-growing economy by 2020, and be the world's third largest economy by 2025. But as the rising Naxal menace shows, aspiration from rising growth can easily turn into frustration at exclusion from it. India has done a good job of wealth creation in this decade. It needs to get better at wealth distribution in the coming one.