Planning Commission, Planning Process & The Big Picture: Presentation To Intel Capital Ceos' Summit 24 May 2006
Planning Commission, Planning Process & The Big Picture: Presentation To Intel Capital Ceos' Summit 24 May 2006
Planning Commission, Planning Process & The Big Picture: Presentation To Intel Capital Ceos' Summit 24 May 2006
8.5
8.5
7 6 5 4 3 2 1 0
1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
151.6 56
46.64 42.5 43.6 48.8 47.5
141.5
45.35 43.5 49 44 42 35
120
113
100 80 60 40 20 0
28 21 14 7 0
17
22
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
2005-06
(Percentage Variation)
26.15 24.98
Exports
Total Merchandize
78,149 1,06,451 1,40,225 36.21 31.72
Imports
Foreign Exchange Reserves Less than $ 1 billion in 1991 $54.7 billion in April 2002 $151.6 billion in April, 2006
Economic Liberalization
Fiscal Policy Reforms : Stable tax regime with just 3 rates for both Excise as well as Customs duties Full National treatment for foreign Cos. incorporated in India Industrial Policy Reforms : Capacity licensing dispensed with Compulsory licensing only in 6 sectors: restrictions on grounds of national security, public health, public safety FDI policy being progressively liberalized Trade policy Reforms : Most items on Open General License, Quantitative Restrictions lifted; Monetary Policy and Financial Sector Reforms : Interest rates brought down Bank rate/Prime lending rate lowered Banking Sector reforms prudential norms stiffened Securatization Act for better security for creditors Competition law enacted. Competition Commission constituted Independent regulators in place for Insurance sector (IRA) and Capital Markets (SEBI) Exchange Controls relaxed; Profits and dividends can be freely repatriated;
New
Worlds
Coal $ 26 bn
Cross-Country Pipelines $ 10 bn
Refineries $ 22 bn
Ports $ 20 Billion
LNG Terminals $ 10 bn
Railways $ 15 Billion
9
National Highways
Model Concession Framework for National Highways Restructuring of NHAI to make it multi-disciplinary National Highways Financing Plan (Rs.224 crore or $50 bn) approved by Committee on Infrastructure (CoI) Private participation to be encouraged for operation, maintenance and tolling of National Highways
10
Railways
Largest passenger carrying network of the world (carrying 5.6 bn nearly the world population/year. Growth rate (freight 11%; passenger 7% and earnings 16%) Operating ratio 83.8% - comparable with American railroads A rapidly liberalising government monopoly having various sub-sectors viz. Container movement Wagon manufacture Multimodal logistic parts Passenger amenities & services Locomotives manufacture Hire axle load wagon design (32.5 tons/axle) Electronic instrumentation for control and safety
11
PPPs in
12
Airports
Liberalized Civil Aviation Regime conducive for PPPs and FDI both Statutory Economic Regulator Model Concession Agreement On the anvil Civil Aviation Policy Signing of Concession Agreements for Delhi and Mumbai as PPPs. Bangalore & Hyderabad as Greenfield 100% Private Airports. Modernization of 35 non-metro Airports in Tier-II cities (Total programme Rs.40,000 crore or $9.0 billion) Opening up of Air Space
(i) Open Skies Agreement with USA. (ii) 23 Bilateral Agreements with countries of Europe, Africa and Asia Pacific Region
13
Ports
Model concession framework All new berths to be constructed through PPPs International experts to prepare Master Plans for Major Ports National Plan for Maritime Development of the Major Ports (Target 2016) : Raise capacity from 600 million tons to 2000 m. tons; Rs.55,000 cr Ports; Rs.45,000 cr. Shipping Phased transfer of present container berths to PPPs Plan for dredging of Major Ports COI report on rail-road connectivity Greater autonomy to Port Trusts Rationalization of customs procedures and CFS
14
Independent economic regulator for airports Scheme for financing viable infrastructure
projects through SPV
15
Competitive Entrepreneurship
Prevalence of foreign technology licensing Availability of scientist and engineers Quality of management schools Firm level innovation Firm level technology absorption Company spending on R&D Rank 1 Rank 2 Rank 9 Rank 12 Rank 16 Rank 32
India amongst the leading entrepreneurial hotbeds globally (Red Herring Clubs India with Israel)
16
Tribunal
Item (a) Direct Investment Equity Reinvested Earnings Other Capital (b) Portfolio Investment Total (a) + (b)
Source : RBI May, 2006
2003-04
2004-05 2005-06 (P) (Apr-Feb) (P) 4,322 5,653 5,970 3,778 1,508 367 9,313 14,966 4,510 1,257 203 11,526 17,496 1,460 633
2,229
11,377 15,699
External Debt $ 119.8 billion at end March 2005 Debt:GDP ratio declined from 28.7% in 1990-91 to 17.3% in 2005
18
Policy on FDI
FDI up to 100% allowed under the automatic route in development of townships, housing, built up infrastructure and construction development projects except: Sectors attracting compulsory licensing Equity limits under sectoral policies Transfer of shares to non-residents under certain circumstances Investor having existing venture in same field under certain circumstances FDI in domestic airlines increased to 49% FDI in Telecom services increased to 74% Fresh guidelines for investment with previous joint ventures issued Transfer of shares from residents shareholders put on automatic route National Treatment to investment Bilateral Investment Protection Agreement with 57 countries 19
Transfer of goods from DTA to SEZ treated as exports. Units to be net foreign exchange earner within 5 years. No export commitments. No limits on DTA sales Can be set up in the public, private or joint sector Single window Clearance System
20
21
Investment Facilitation
Foreign Investment Implementation Authority (FIIA) - to sort out any operational difficulty and facilitate implementation;
FDI In India - Policies and Procedures
Also available in Spanish, German, French & Italian.
An Empowered Sub-Committee of the National Development Council set up on Creating an investorfriendly climate;
To focus on removing regulatory barriers to investments.
23
- UNCTADs Global
Rated among the most favourite investment destinations (UNCTAD, JETRO, JBIC, Deutsche Bank, EIU, etc.) Major destination for foreign venture capital funds (Far Eastern Economic Review)
KEARNEY Business Confidence Index, 2003
Sixth most attractive investment destination Also among the top 10 Tourist Destinations
AT
24
35 30
(U $/hour W S orked)
2003
25 20 15 10 5 0
Indonesia
2009
Average of the eleven studied LCC countries: * 2003: ~$2.10/hr * 2009: ~$3.00/hr * +6.5% p.a.
U K
C hina
India
H ungary
Italy
Thailand
C anada
P oland
S pain
C zech. R ep.
M alaysia
Taiwan
France
Japan
B razil
K orea
U S
$/hour: CAGR(%):
0.30 0.47 0.56 0.88 0.82 0.71 0.83 1.13 1.15 1.77 1.82 1.73 3.02 1.97 2.64 2.24 2.27 2.94 1.93 3.48 3.86 10 8 7 8 6 5 5 6 6 7 7 4.5 4.5 2.5 2.5 2 2 2.5 1.5 2.5 2
Source: EIU; Euromonitor; S&P DRI; U.S. Deptt. of labour; BCG analysis
Germ any
R ussia
M exico
25
-60
-40
-20
20
40
60
-3
-2
-1
Mn people
20-35 age group: 308 mn people (~21%)
Mn people
20-35 age group: 11 mn people (~17%)
26
27
Knowledge workers in software and service industry increased from 6,800 in 1985-86 to 650,000 in 2003
28
ICT Opportunities
Multi purpose smart cards with PKI protection Health informatics and telemedicine network Setting up a submicron fab facility Collaborative ICT research in language technologies / next generation communication/ Internet technologies Joint Software development in super computing applications in fluid dynamics, structural mechanics, bioinformatics, nanoinformatics, etc
29
30
100%
4% 7% 8% 10% 11%
727 654 514 427
4%
232
5%
293
4%
285
242
6,386
28 %
1,773
India***
China
Russia
Philippines
Turkey**
Thailand** Poland
Brazil
Mexico
Indonesia
* Graduates with skills to be directly employed (does not consider willingness and accessibility of talent) ** Number derived via extrapolation *** As of 2003 Source: HR interviews; country labour and graduation statistics; McKinsey Global Institute
31
Telecom
Automotive Airlines
Claims processing Servicing Call centre operations Call centre operations Loan processing (consumer, corporate, mortgage) Research and development Call centre operations Billing Engineering and design Accounts payable/ receivable Revenue accounting Call centre operations Frequent flyer programmes
32
5-7
3-5
15
30-35
Economies of scale
Task migration
Opportunities
Joint Ventures in Biotech based new drugs / pharmaceuticals
34
50
China
40 30 20 10 0
U K
Thailand
Present 2017
India
Philippines
Indonesia Israel
M alaysia
Source: 2003 Report on Indicators of Technology Based Competitiveness of 33 nations, Technology Policy and Assessment Center, Georgia Institute of Technology
35
Thank You