Can India set a scorching pace of growth

India’s Growth Potential – A macroeconomic perspective

If there is one word the world can’t get enough of – it is Growth! Growth is the amazing factor in financial equations which makes companies stocks go crazy and countries future look crazy. Ofcourse this is particularly true for India which along with China has led the world growth in the past few years.

Can India set a scorching pace of growth

Can India set a scorching pace of growth

India is such a big and massive country that dividing its growth into sectors is not an easy task. Still the Ministry of External Affairs has given us numbers for various sectors (

India grew by 6.9% during 2011-12, which is lower compared to 8.4% growth achieved during 2010-11 but is still pretty good (Data from GoI). The chart from World Bank shows slightly different figures but the theme is still the same. Indian population is growing by 1.4% during the same period. To keep things simple I would adjust the growth down by 1.4% to account for this population growth.

Its also interesting to note from the website that “growth rates of over 8 per cent in the sectors of electricity, gas and water supply, trade , hotels , transport and communication, and financing, insurance, real estate and business services. MOSPI expects slow growth in the sectors of agriculture, forestry and fishing (2.5 per cent) , manufacturing (3.9 per cent) and construction (4.8 per cent). The growth in the mining and quarrying sector is estimated to be negative (-2.2 per cent).” And here lies the reason why the world is betting on India for the next growth wave for the world! Over 8% growth rate in the sectors where consumers are in the driving seat! Indian consumer is coming out and demanding there share from the world and that is going to have a multiplying effect on the economy.

What is needed right now?

Good policies to help manufacturing compete with the rest of the world and be able to provide the goods to the Indian consumer. India does not want to become just an importer of goods but wants to make goods for their own consumers.

Emphasis on Construction and Infrastructure: The growth rate of construction and infrastructure need to rapidly increase in India to make up for the past decades and provide way forward. This will not be easy but its success is going to determine the next few decades for India. India has an advantage here but is not realising it. Many countries in EU and China have already developed their infrastructure, driven their growth numbers by infrastructure spending and are now trying to push their consumers to use this infrastructure and consumer to lead the next cycle of growth in the economy. In India we are seeing the opposite trend where the consumer wants to consume but is hampered by the infrastructure and here lies the opportunity. As we get the infrastructure ready it will contribute to the GDP numbers but the consumption it leads to will create a multiplicative effect on GDP.

Will it happen or not? We will see in 10 years! If you have any comments then do share below.

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Business, Technology

Five ideas to grow revenues on the Internet

Recently, the Gulf Maharashtra Business Forum ( GMBF ) organised a fantastic conference cum exhibition at the DWTC – World Trade Center in Dubai. The conference was an avenue for Small businesses from Dubai and India to know more about the markets from a market entry and business expansion perspective. This was of particular interest for small businesses from India. I was invited there to talk about Case studies of Startups and Small Businesses which are using Internet as an effective marketing medium. Here is the presentation I made there.

A quick jist –

1. Internet can change lives – Who in India knew of Psy before Gangnam Style went viral? Today, the video has more than 50 Crore views online, and thats a huge achievement. Psy has become a world figure because of Internet. A similar story with Kolaveri Di.

2. Don’t go by the buzzwords – All the high flying buzzwords should make little difference to startups. Don’t go by the hype. Just do one thing, but do that one thing really well.

3. Email Marketing – Groupon and Snapdeal did one thing perfectly, that was Email Marketing. Just use Email marketing to tell your customers that you care about them, that you are doing something new and you will be rewarded.

4. Facebook marketing – Quite a lot of innovative companies are investing heavily into Facebook marketing very intelligently. Facebook builds engagement, which is vital for startups. Check out Chumbak, Mirraw and Bewakoof for knowing what these companies are doing.

5. SMS and Mobile Marketing – Building a connect via SMSes is something the Banks and Mcdonalds have done well. No reason why startups cannot replicate that aspect.

As said in the last part – its all about dangling the right carrot!

To know more about how these ideas can be implemented for your startup – please write to us at siddhesh AT strat DOT in

Here are some pictures of the convention – Mahabiz 2012 –

Chief Guest Jayantrao Patil

Mahabiz conference

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Business, Planning, Strategy

Middle of the diamond

diamondKnowledge and Growth

Are these the best of times or the worst? Does the rise in the Sensex recently tell us that we are getting out of the depression or should the drought like situation tell us that we are getting into a worse one? Paradoxically – given the fact that almost 400 Mn people live on less than Rs. 50 a day, while another 250 Mn odd are over Rs. 200 a day – they have different perspectives. The top layer thinks about the sensex, the bottom about the drought. Dangerous situation to be in, where the wheels are turning inherently against each other. So what makes us believe that “India is on a growth path”? The media? Yes. Your friend the broker? Yes. The fact that more housing projects are still coming up? Maybe. The fact that India is held together by a glue that has been written about, experimented on and continues to lubricate the engine – the 500 Mn strong Great Indian Middle class. Definitely!

Shashank Tripathi, Chairman of Jagriti Yatra, a train trip all across India that focuses on encouraging the idea of Enterprise lead Development, is quite a thinker and to Prahlad’s ‘Bottom of the pyramid’ – his counter is that it’s actually the ‘Middle of the Diamond’ that really counts for India. The more I think about it – the more I realise the truth behind it. With 500 Mn people sitting firmly in the middle, India is today a diamond. We were a pyramid, are currently a diamond and should aim at becoming an inverted pyramid to attain true global stature. Easy! Or is it? There are projections galore that over the next two decades India’s middle will grow to 50% of the country’s population and create the world’s fifth largest consumer market. The purchasing power of the nation is estimated to quadruple from 17 trillion INR to 70 Trillion INR by 2025 and Middle India is supposed to power this surge. Spending patterns have and will shift dramatically while the incumbents have been trying to retain the pappu’s of the world. Great projections from the great banks – and thanks for making them universally unrealistic.
What is real growth to a middle Indian? When the next generation has the same opportunities as you and I do. When the farmers son can compete for the same job as you and I. Growth is when he has a shot at a life he can only dream of! In the current scenario – I just don’t see that happening. We believe some government will deliver the INR 70 trillion joy ride by 2025.

Historically, we know that our government alone cant do it – and has failed at many things (the commonwealth games are one such event) . It seems a bit of a stretch to me. So is there really any solution?

Converting a diamond into an inverted pyramid

We had a discussion on nation building the other day at the Voicetap office and it set in motion a lot of thoughts. Let me put forward the key points here:
One thing is for sure (geometrically, theoretically and practically) that for India to prosper – the middle of the diamond needs to move up. With that as the backdrop – we believe that the answers to 3 critical questions could drive the solution home

1. Who can contribute to make India great?

Anyone. Clichéd though it may sound but yes everybody from the grass route level till the corridors of Lok Sabha needs to be involved. Its’ time for you, me, BJP, Congress and for that matter everyone to end the blame games and start visualising things. To drive a population that would be soon over 50% of India, is a task never taken before and would require involvement at every level!

2. How can they contribute?

The consensus was that everyone has something or the other to contribute. While the involvement level may vary from an individual to individual it is the quality and not the quantity of involvement that would push the diamond northwards. Constructive contribution coming in whichever format and length will be appreciated. The biggest element that will impact India that came our was knowledge – both gained and imparted that will change the direction of India and add fresh wind to its sails. We hear so much about ‘social networking’ – so can the guy who considers himself an ace at cracking interviews help the farmer’s son crack a sales interview? Life changing for the farmer. 30 mins of your time. Difficult? Operationally – extremely. Idealistically – no.

3. If there were a way to connect the two – why will the average Indian contribute?

While I am aware that 75% of the results from surveys are skewed by ‘mental biases’ of people – perceptions of what they believe should be done. Not necessarily what they will actually do. Knowing all that – we took out a survey where the essence of the question was: What would get someone to spend 3 hours a week to help others with your area of expertise? And the answers (from ~100 respondents) are encouraging:

1. The highest was ‘I just want to share knowledge’
2. Second was: Get me to network with other experts
3. Third was: Sponsor a girl child’s education in return for me sharing my knowledge
4. Fourth came: Give me recognition as an expert
5. Money / Gift Vouchers etc
6. Mobile recharges

These are encouraging results, and we think there might be something here. Can it really be that simple? Can you sit at home and help change the lives of people? Can you talk to someone for half an hour a day, share your relevant knowledge and help enhance the trajectory of India’s growth?
I personally think so. Your thoughts are welcome.

(This post is written by Vivek Khandelwal, our newest strater! We welcome him on ! Vivek is a 4th Year Student at the Dept of Chemistry. IIT Bombay. He is also  Co-Founder and Head Content and Programming at Voicetap Technologies. )

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Finance, Technology

How Technology is changing the Wealth Management/Personal Finance industry

We all know about the sophisticated wealth management services provided to HNIs (High Net-Worth Individuals) by big banks. Advertisements for these services can be seen at places like airports, swanky hotels, galleries, golf courses etc. Have you ever wondered how it works and what services are provided to these wealthy people?

This business has 3 elements

a. Products (read exotic financial products designed by investment banks)

b. Relationship Managers and

c. Customers

A relationship manager (typically a guy in a suit from a premier B-school) solicits the client and explains how he can multiply his wealth by entrusting the responsibilities to his particular bank which essentially means investing in a plethora of financial products. For doing this the bank takes a substantial management fee (x% of wealth managed) out of which a hefty commission is paid to the RM.

This model makes Wealth Management and financial advisory expensive. So what do the middle class and upper middle class do if we want to invest effectively and grow our investments while ensuring that the downside is limited. There is an ever increasing list of asset classes like gold, commodities, Mutual Funds, Insurance, Real Estate, Pension Funds, Equity and debt etc. Add to this the increasing number of insurance policies, Mutual Funds, and debt products. This is making an average consumer confused and vulnerable to wrong/ sub-optimal decisions.

In India we are not used to looking at investments along with goal based financial planning and retirement planning. We rely on friends, colleagues, words of wisdom from parents, uncles and random websites/blogs.

Enter technology

The solution lies in technology. How about building a sophisticated online self-service platform where users can manage their financial portfolio themselves for little and no cost. Technology can provide advisory to a user based on his financial profile about how much to invest and where. Add web 2.0 to this and you can create a social network where people can share feedback and help each other avoid making mistakes. There can be a limited offline support if someone wants additional help. How does it sound? This, I believe, is the future of Personal Finance. An internet based technology can create an integrated financial solution with a strong advisory component.
Last 1-2 years have seen a number of ventures coming up and notable among them are investmentyogi, Rupeetimes, personalfn, Apnaloan (only for loans), Arthamoney, iTrust, various finance journals and personal finance sections in Business portals. Each of them is trying a different model to cater to the market.

The new generation platforms have following key capabilities:

• 360 view of assets and liabilities
• Transaction initiation capabilities
• Custom reporting
• Communities

For example investmentyogi provides a complete financial dashboard to an individual. You can get your customized Financial Planning done and track all your investments and liabilities at the click of a button. It also tells you how to invest, where to invest and how to plan your taxes in advance apart from online tax filing features. There is a vibrant community which helps in sharing of information. The focus here is on sound unbiased advisory delivered through the internet.

Arthamoney is trying to build a superstore where all kinds of products in different asset classes can be compared and bought.

Apnaloan provides a platform to compare different loans from different banks and apply. You don’t have to spend valuable time getting quotations from different banks.

Even large Wealth Management companies are waking up to this reality and realizing the business potential in “mass affluent” class which is defined as a class having lower asset size than HNIs and UHNIs (Ultra High Net worth Individuals) but having much larger volumes. Many companies are trying to build self service platforms to cater to this class using internet as the delivery channel. One of the biggest advantages of this medium is the potential to acquire the most relevant information for decision making.
Where will this industry be 5 years down the line?

It’s always a very difficult question especially in these fluid and volatile times. But at this point of time it’s easy to draw an analogy with retail industry. Till about 4-5 years back we had mom and pop stores selling FMCG and other stuff while the FMCG companies were directly reaching out to the customers through advertisements in different media channels. An average customer would go to a store and ask for his favorite product or brand. But enter organized retail and the balance of power seems to be changing (except for this blip due to recession). A large retail chain can literally dictate prices to a FMCG company and it can influence customers to buy a particular brand, such is the power of organized retail.

Now think about how Mutual Funds, Insurance, Loans and Credit Cards (all personal Finance products) are sold as of today. Typically a MF is launched and huge hoardings come up overnight. A 15-20 day campaign is done on TV, Radio and Print. Consumers go to the distributor they know and buy it. But as the number of MFs , insurance policies, Banks providing different kind of loans and kind of cards is increasing the consumers are getting confused and taken for a ride by making wrong decisions. There is too much of information asymmetry in this distribution model.

Solution to this problem is organized retail but this time it’s going to be online as the products are not tangible. The industry is going to move away from mom and pop distributors and FMCG model to online super stores where you can compare every product, get advisory, manage all investments and have complete peace of mind. Investmentyogi and many others are trying to do just that. Providing seamless and rich customer experience with a focus on quality and reliability will be the key differentiator among the new age personal finance companies. It will be interesting to see the action unfold.

The author, Suryadeep Agarwal is a management graduate from IIM Calcutta from the batch of 2008 and is currently involved in a startup called InvestmentYogi. If you want to feature your startup on, please write to us on contribute at .

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