Arthneeti June 2011 SIMSREE

Sydenham Institute of Management Studies Research &

Entrepreneurship Education

A SIMSREE Finance Forum Initiative | June 2011

Arthneeti

Special Feature: Mr. Bharat

Sampat, CFO & EVP, DCB

Meeting Infrastructure Needs

of Indian Economy

Interview with Mr. Sujan Hajra,

Chief Economist, Anandrathi

2

SIMSREE Finance Forum Arthneeti 2011

eDITOR’S vIEW

The world economic outlook has been shadowed by rising debt problems in

Euro region with the contagion expected to affect the other European

economies. There are also concerns about United States’ unsustainable fiscal

deficits, which is one of the greatest challenges it faces. US’ problems have

been further aggravated with the unresolved debate on debt-ceiling creating

an impression of US’ default on public debt.

The Indian economy grew by 8.5 percent in FY2011, which is lower than

expected but better than the global growth standards. In the backdrop of

higher inflationary pressures in the system RBI continued its monetary

tightening measures because of the high domestic inflation which is much

above the comfort zone. It increased repo rate & reverse repo for the tenth

time by 25 bps to 7.5% & 6.5% respectively. Monsoons are expected to be

good which would taper down the food prices and moderate the inflation

within RBI limit. Other emerging economies such as China and Brazil have

also been battling inflation for the past one year.

The issue brings to you some interesting articles on Infrastructure

development in India, analysis on the much happening Pharma Sector and

the economic analysis of Brazil. We have also covered Interviews of

prominent personalities from the world of Banking & Finance. We do look

forward to views and suggestion from the readers to help us improvise the

content of the Newsletter and make it more relevant and informative.

Hope you enjoy reading.

Gopidalai Muralidhar Rao

(Editor-Arthneeti)

3


CONTENTS

Special Feature An Interview with Mr. Bharat Sampat CFO & EVP Development Credit Bank (DCB)

Expert Talk An Interview with Mr. Sujan Hajra Chief Economist & Co-Head-Research Anandrathi Financial Services

The SIMSREE Street

Economy Analysis

- Brazil

Meeting the Infrastructure Needs of

Indian Economy

Sectoral View: Pharmaceuticals

Macr-O-nomics

Lessons On Finance

Personality To Emulate

Finance-Q ?

4

8

13

17

20

23

25

30

31

32

4


Q: RBI for the tenth time has raised repo rates. To

what extent would this affect the liquidity in the

banking system?

A: The rate hike has increased the cost of funds but

liquidity continues to remain available. In other words,

sufficient liquidity is available in the system but at a higher

cost.

Q: There has been much debate over deregulation of

Savings Account rate by RBI. How would such

deregulation affect the margins of Banks?

A: Over a short period, Savings Account interest rate has

increased from 3.2% p.a. (effective rate when 3.5% p.a.

interest was paid on minimum balances between 10th and

last day of the month) to 3.5% p.a. (when paid on daily

balances) and further to 4.0% p.a. Banks have passed on

some of the cost increase through base rate increases.

However, net interest margins are expected to compress in

current quarter. If deregulation is implemented, the pace

and manner of implementation will have transitory impact.

Over the long run, this will provide greater room for

product innovation and will help customers obtain

products which suit their specific requirements.

Q: RBI has proposed to grant new licenses to new

players. What is your view on it?

A: In the past, new licenses have brought fresh players

with different approaches who have infused new

technology, deepened markets and created fresh business

segments. Over the long run it has had a positive impact

on banks in particular and economy in general. The new

round of licenses will have similar impact on the industry

and India’s economy. Having said that, the existing banks

will face number of challenges in terms of retaining good

talent and customers. Newer banks will seek to hire

industry experienced staff from existing banks, especially

in customer and regulator facing roles. They will also seek

to cherry pick from existing customer base of the banks.

Q: Whom do you think would be preferred to grant

licenses - NBFCs or well established Corporates?

A: RBI would take the final call, but if you see in the past

they have given licenses to Developmental Finance

Institutions (DFIs) like ICICI, Cooperative Banks that is

how DCB was issued license to operate as a commercial

bank and NBFCs that’s how Kotak was converted into

bank. So, I don’t think there is any bias towards any sort of

player coming in. I think RBI will be looking at corporate

governance standards and ability to support the bank in

the long run.

Q: When there is so much demand for capital from

telecommunication, infrastructure, power, why there

is need for them to go abroad and borrow? Is the

Indian Banking system not capable of providing the

money at same cost?

A: Indian banking sector is well equipped to support

capital demand from these sectors. Cost of domestic funds

is high due to prevailing high interest rates. However, in

long run, this cost is free of currency and sovereign risk.

Lower policy change risk and better management of

execution risks can result in better credit rating for firms in

these sectors and lower costs.

Q: What do you think about the possible

consolidation in the banking industry to firm balance

sheet size and increase size of assets?

A: Given the RBI requirement of dispersed shareholding

and limited voting rights, takeovers are not easy unless a

very compelling premium is offered over existing market

price. This makes consolidation a difficult proposition.

Regulator could force consolidation of banks which have

serious governance issues or have burnt away their capital

through losses. Another possible trigger is a minimum

capital requirement which is presently at Rs. 300 crores. As

A Chartered Accountant and Cost Accountant along with

a Post Graduate Degree in Law. Mr. Sampat has over 25

years of experience in senior positions with reputed

organizations such as ABN Amro Bank, ANZ Grindlays

Bank, Standard Chartered Bank, Hoechst India and Larsen

& Toubro.

Mr. Bharat Sampat CFO & EVP Development Credit Bank (DCB)

5


things now stand, most of the existing banks could meet

any reasonable increase in this hurdle without a stretch.

Q: There are quite a large number of Public Sector

banks (PSBs) with presence across India. Do you

think there is a need for consolidation in PSBs?

A: Firstly, each PSB has its own flavor and within State

Bank of India (SBI) group, subsidiaries have their own

flavor and focus areas. For example, Canara Bank is

different from SBI, which is again different from Punjab

National Bank (PNB). They have different targets and they

operate in different areas. They may be present across the

country but they have their own focus, but I do see a need

to consolidate in that sense. Government has significant

ownership but not complete ownership. Hence, it is not

like merging two wholly owned subsidiaries into one

company. Whether it would bring in economies of scale, I

think pursuit of balance sheet size is not something

absolutely a must. In fact banks which have become the

biggest banks have gone through stresses and strains. If

you look at Royal Bank of Scotland (RBS) or Citibank,

both had their own share of stresses and strains. In late

90s, some Japanese banks were used to be in top ten banks

in terms of size around the world, but today they don’t

exist on that list anymore. Now, China is reaching that

place, but where are Japanese banks now. So, it is not only

size which gives you advantage. Larger deals can be run by

Indian banks on a syndication basis with the exposure

shared. I don’t think mergers are necessary for that

purpose.

Q: Aftermath the financial crisis, risk management

has been a priority. Basel Committee on Banking &

Supervision (BCBS) has recently proposed the new

Basel III norms. How would this affect the Indian

banks?

A: In India the Capital Adequacy Rate (CAR) stands at a

strong 13.4%+ levels. There are also other risks which are

not measured by the balance sheet by Basel II norms. So,

Basel III norms would pave way for better risk

management. Banks, in general should be able to make the

transition given that our CAR stands well above the

requirement by Basel Committee. Capitalisation levels are

strong in Indian banking industry. We would have to

eventually move to Basel III, which is inevitable and I

don’t see any problem to it. You can’t play in an

international market unless you are also streamlined with

the regulatory regime over there. If you declare your

capital adequacy as per Basel II and if the world has

moved onto Basel III standards, then how will they value

your credit worthiness? So, yes Basel III will come in and

RBI has already been taking steps on that front.

Q: How can Banks play an active role in

strengthening the Bond market?

A: I think there has been intermediation of routing

wholesale bonds through mutual funds for example. That

route has been to some extent restricted and curtailed by

RBI. Traditionally banks have offered good fixed deposit

rates and vis-a-vis the riskiness of the bonds there was to

some extent an aversion to bonds in retail investor

community. However if you see recently, L&T Finance as

of this week and Sundaram Finance came out with some

Rs. 1000 crores bond issue. Sundaram issue has been

oversubscribed 8 times in the first day. There is a

significant appetite decent corporate bond. Price

differentiation will also then start emerging and yield curve

could be more effectively embedded into the banking

system if we have a deep corporate bond market. So yes, it

is required but it would take time before it develops. For

an emerging economy which aspires to be a developed

economy needs to have a deep corporate bond market in

place.

Q: What has been the significant change in the global

banking system post the financial crisis?

A: “Bigger Is Better” no more holds good. There is less

emphasis on pursuit of higher market share and bigger

balance sheet size. Bigger banks face continuous scrutiny

from regulators on their liquidity, capitalisation levels and

corporate governance practices. Proposed Basel III

implementation will further strengthen the bank balance

sheets. Emerging markets have become the new growth

engines of the world economy and this provides a unique

opportunity for banks of these countries to grow rapidly.

Q: How much would the depressed US economy &

Euro crisis affect the Indian growth story?

A: Muted US economy and Euro crisis would result in

greater capital flows into high growth emerging markets

like India – in terms of FIIs and FDIs. Economies of skill

and scale offered by Indian economy make India attractive

as a quality low cost production destination for many

6


sectors. Emerging middle class drives increasing demand

for goods and services in sectors like FMCG, Two-

wheelers, Consumer durables, etc. Similarly, expected

infrastructure spend would drive demand for commodities

and industrial goods. This makes India, an attractive

destination as manufacturing hub for all industries. Lastly,

this also results in reverse bran drain or at least diminished

outflow of talent from India. This provides a ready talent

pool for domestic and international investors.

Q: DCB has been present in some states and other

major cities in India. So, is this a strategic decision to

expand in selected regions across India?

A: As far as DCB is considered, we are majorly present

across 56 branches of the total branches in Gujarat,

Maharashtra & Andhra Pradesh. On the other hand we are

present in major cities such as Delhi (7 branches), Kolkata

(3 branches), Chennai (2 branches) and Bangalore (4). As

far as providing services to customers and reaching our

customers, we have tied up with couple of banks to enable

our customers get access to our services. For example we

have tied up with other institutions across 500 locations

for payment services. So, as far as services to customers

are concerned, those are equivalent to any bank with

national presence. As far as geographic presence is

concerned, we would prefer to work in clusters, deepen

our relations with customers in existing clusters and then

reach out to newer areas. Recently, we have received fresh

licenses in cities where we aren’t present. We got licenses

in Noida, Ludhiana, Lucknow, Jaipur, Vijayawada and

Kochi and also received four more licenses for operations

in the developmental areas (2 licenses in MP, 2 licenses in

Orissa), which is for financial inclusion purpose. We are

looking at expanding our presence across the country.

Q: Nowadays, we find large Universal Banks offering

all types of financial services. So, are there any plans

for DCB to expand its financial services offerings in

near future?

A: I think universal banking position is possible at a point

wherein you have achieved a critical size. At this size, DCB

would not be looking to offering those services as we do

not want to get into this area now and in future, we don’t

know. But what I would also like to say that, it is not

necessary that each bank has to be universal. One of the

most successful finance companies (HDFC) in India is not

a universal bank. It has its focus on housing mortgage.

Even Sriram Transport Finance Co. has emerged

successful by focusing on one segment. Each has its own

space and one has to play according to its strengths and

weaknesses.

Q: What are DCB’s growth strategies in the years

ahead?

A: DCB’s focus is on building low cost deposit franchise

with strong capital position. We have a strong focus on

retail CASA (Current & Savings Accounts) balances and

retail Term Deposits. On the asset side, we want a

balanced growth in advances which are secured and

repriceable. Our chosen areas of growth are Retail

Mortgages, Micro SME (businesses with turnover up to

Rs. 10 crores) and SME (businesses with turnover up to

Rs. 100 crores). We have a significant presence in Mid-

Corporate space. Agri & Inclusive Banking (AIB) helps us

achieve priority sector targets and promotes inclusive

banking.

Q: Is DCB looking forward to expansions through

M&As in India?

A: In near future, inorganic growth is not being pursued

by us.

Q: Do you think the Indian government is going slow

on financial reforms, critical to sustainability of

India’s growth?

A: I think a lot of work continues to happen at the

government’s end. It is just that these structural reforms

needs lot of doing before the reforms becomes visible. I

am sure at the government level; huge amount of work is

going on. We would see the results coming out in future

sooner or later.

Q: RBI & Indian government have been targeting to

reach out to the unbanked population across India.

How according to you can Banks play a more active

role in financial inclusion?

A: Banks have a vital role to play to achieve the financial

inclusion objective in the country. Through expansion of

rural network, extension of no frills banking, micro-credit,

extension of banking facility through business

correspondent (BCs) model etc, we can achieve further

development of banking services in the untapped regions.

7


Q: There has been a lot of interest being shown by

Banks & Telecom companies to enter into Mobile

Banking (SBI & Airtel JV, ICICI Bank & Vodafone

JV). Is DCB also looking into offering similar kind of

services through this platform?

A: Mobile banking has huge potential in India. We are

exploring that market and we have got some start towards

it and I think all banks will eventually enter into this space,

which is the future market for all banks. We already have a

product in Mobile Banking, but on a very small scale.

Q: Business Correspondents (BCs) Model is being

explored by various Banks. How do you view the

scope of such Model in bridging the gap between

banks and unbanked population?

A: We have seen several banks have launched it. People

have made a start and are offering the services. We also

had a look at some, but what we want is to work through

the entire model before we enter into it. But, this can be an

effective model to spread banking into the masses.

Q: Where is the next phase of growth expected for the

Indian banking sector?

A: Presently the economic growth is weighed down by

inflation and high interest rates. Both are expected to ease

up towards the end of this year with inflation falling to

6.5% p.a. Even 6.5% is a very high number in itself. Going

forward, key growth drivers would be economic reforms

and infrastructure. There is no alternative option to

reforms as this would remove obstacles. On supply side,

development of infrastructure is only way the friction in

mobility of goods, services and factors of production can

be reduced which in turn would help impact inflation in

long run. This should help return Indian economy to

higher growth trajectory. As a thumb rule, banking sector

expands at a rate three times the GDP growth rate.

Q: How do you view the present global economic

scenario with negative cues coming from US, Japan

and European economies?

A: US have been under stress for quite some time. Euro

region has been facing serious challenges due to what is

happening in Greece. Yes, Japan is facing a problem

because of the natural calamity. The global growth would

be slow for the next few years. But globally, capital is still

intact and it would seek returns and if these economies are

not prospering then it would seek returns where there is

growth. This is where emerging markets like India would

win. We should be ready to attract it. An economy would

never go on a linear path, it experiences Ups & Downs,

but what you got to look is the secular trend.

Q: How should students prepare to make a career in

the field of Banking & Finance? What according to

you are the attributes required to be a successful

banker?

A: It is essential to have a strong grounding in Financial

Management and Economics. Financial management for

taking micro decisions, where the decisions come to your

table and Economics to understand strategically where

things are moving towards - macro picture. The interplay

of the markets can be understood only when you

understand economics, which is very important. Financial

management helps you to assess what is working for you

and what isn’t working for you in the micro sense. It is

also very important to keep up with the events happening

in financial services world.

Reading of books like Liar’s Poker by Michael Lewis; Too

Big to Fail by Andrew Ross Sorkin; Barbarians at the Gate

by Bryan Burrough & John Helyar; One Up on Wall

Street’s by Peter Lynch; The Money Guide by Paul

Erdman, etc gives a good practical insight into the world

of Banking & Finance. The books which have been

mentioned have their own significance, because it gives

you an all-round view of the financial industry. Usually

what you study is theory but in practice various important

aspects needs to be considered. Liar’s Poker, very famous

book- gives you deep insights into the practical working of

the debt markets, Too Big to Fail would help you

understand what has changed post the Lehmann brothers

(crisis), Barbarians at the Gate would give you some

insights about how do the Mergers & Acquisitions market

work, Leveraged Buyouts (LBOs), Management Buyouts

(MBOs) and consolidation issues; One Upon Wall Street

would help you understand how does the mutual fund

industry works and the fifth book – The Money Guide

which is a non friction book helps you understand the

linkages between the markets - financial markets which

exists. I feel if you put all these as a sort of curriculum, you

would come up with more practical insights that would

help you develop an all round abilities in financial field.

By Gopidalai Muralidhar Rao, MMS 2010-2012

8

SIMSREE Finance Forum

Q: Economies especially emerging economies

have been facing Inflationary pressures. Is the

any global perspective or is it something

fundamentally wrong with inflation in India?

A: I think, it is a bit of this and bit of that. If you see

inflation dynamics in India, Wholesale Price Index (WPI)

is taken as the headline inflation which include

components. One is the food component, which is

predominantly domestic because India doesn’t either

export or import any major quantity. So, there the kind of

food inflation which we are expecting is basically

influenced by the domestic factors.

component is Non-Food Primary, which basically includes

cotton, jute, oil seeds etc. Here, the international

component exists. For example, if you look at the cotton

prices in India, today inflation is almost 100 %. So there is

an international component to that. The third segment is

Fuel, Electricity & all. The fuel prices, of course, a

significant amount has international linkage. All the

petroleum products are affected by the international

trends. Since, 1/3rd of the petroleum products are

decontrolled in India this directly passes through to end

users. Other things which are controlled in particular

Diesel, LPG and Kerosene there is some amount of lag

passthrough. So there the international impact is pretty

significant. The biggest segment with significant

international impact comes from the manufacturing

product prices. Almost 65% of India’s WPI weightage is

for manufacturing products especially the engineering

products and all. Manufacturing products are highly

internationally traded. The part of high inflation which is

taking place in India now is a domestic phenomenon. The

lack of investment in agriculture, high dependence on rains

is the major factors leading to the current inflationary

pressures. On the other hand, internationally transmi

component particularly fuel and manufacturing have also a

significant effect on prices and commodities are also being

affected from international prices.

Q: Economies especially emerging economies

have been facing Inflationary pressures. Is there

any global perspective or is it something

fundamentally wrong with inflation in India?

I think, it is a bit of this and bit of that. If you see

inflation dynamics in India, Wholesale Price Index (WPI)

is taken as the headline inflation which includes 4 major

components. One is the food component, which is

predominantly domestic because India doesn’t either

export or import any major quantity. So, there the kind of

food inflation which we are expecting is basically

influenced by the domestic factors. The second

Food Primary, which basically includes

cotton, jute, oil seeds etc. Here, the international

component exists. For example, if you look at the cotton

prices in India, today inflation is almost 100 %. So there is

component to that. The third segment is

Fuel, Electricity & all. The fuel prices, of course, a

significant amount has international linkage. All the

petroleum products are affected by the international

trends. Since, 1/3rd of the petroleum products are

controlled in India this directly passes through to end

users. Other things which are controlled in particular

Diesel, LPG and Kerosene there is some amount of lag

passthrough. So there the international impact is pretty

th significant

international impact comes from the manufacturing

product prices. Almost 65% of India’s WPI weightage is

for manufacturing products especially the engineering

products and all. Manufacturing products are highly

rt of high inflation which is

taking place in India now is a domestic phenomenon. The

lack of investment in agriculture, high dependence on rains

is the major factors leading to the current inflationary

pressures. On the other hand, internationally transmitted

component particularly fuel and manufacturing have also a

significant effect on prices and commodities are also being

Q: To what extent would RBI raise rates and

what is the comfort zone for RBI?

A: RBI in the medium term would expect to see inflation

at a range of 4 to 5 % and in the long term below 4 %.

That doesn’t necessarily mean that RBI would keep on

raising rates until inflation settles at the targeted levels. RBI

as you know is doing the tightening for m

months and the major impact of policy tightening and

inflation happens with a lag of almost 18 months. RBI

would now start expecting the impact of its past tightening

measures on the overall inflation situation. So my sense is

that, RBI is pretty close to the

cycle, though we would expect inflation to correct in the

second half of the current year.

Q: According to you, what measures can RBI

take to control inflation?

A: RBI’s control is only on monetary policy and to

extent on foreign exchange policies. RBI at this moment

has nothing more than monetary policy tools to control

inflation.

Q: How to manage the growth versus Inflation

scenario in India?

A: In the short term, there is always a trade

growth and inflation. Basically, you need to understand

how the monetary policy tightening impacts inflation.

Monetary tightening, if it is transmitted, increases the

market interest rate. If market interest rate increases, that

affects the interest sensitive part of the spending which

basically includes investments and leveraged consumption.

So, to bring down inflation through monetary policy, you

necessarily have to do demand compression which means

lower growth. But the fact of the matter is that over a

longer period of time, high inflation is amicable to growth.

In the short term, there may be tradeoff between inflation

and growth but in the long term moderate and stable

inflationary environment actually promotes higher growth.

Mr. Sujan HajraChief Economist & Co-Head-Anandrathi Financial Services

Arthneeti 2011

Q: To what extent would RBI raise rates and

what is the comfort zone for RBI?

edium term would expect to see inflation

at a range of 4 to 5 % and in the long term below 4 %.

That doesn’t necessarily mean that RBI would keep on

raising rates until inflation settles at the targeted levels. RBI

as you know is doing the tightening for more than 12

months and the major impact of policy tightening and

inflation happens with a lag of almost 18 months. RBI

would now start expecting the impact of its past tightening

measures on the overall inflation situation. So my sense is

ty close to the end of policy tightening

cycle, though we would expect inflation to correct in the

Q: According to you, what measures can RBI

RBI’s control is only on monetary policy and to some

extent on foreign exchange policies. RBI at this moment

has nothing more than monetary policy tools to control

Q: How to manage the growth versus Inflation

In the short term, there is always a trade-off between

th and inflation. Basically, you need to understand

how the monetary policy tightening impacts inflation.

Monetary tightening, if it is transmitted, increases the

market interest rate. If market interest rate increases, that

part of the spending which

basically includes investments and leveraged consumption.

So, to bring down inflation through monetary policy, you

necessarily have to do demand compression which means

lower growth. But the fact of the matter is that over a

er period of time, high inflation is amicable to growth.

In the short term, there may be tradeoff between inflation

and growth but in the long term moderate and stable

inflationary environment actually promotes higher growth.

Mr. Sujan Hajra Chief Economist &

-Research Anandrathi Financial

9


So, in the long term there is no trade off, but in the short

term there is tradeoff. And there is a literature on sacrifice

ratio-how much change or reduction in inflation rate

results in how much loss of growth. So basically in short

term you have to satisfy growth to controlling inflation,

but it is likely to be inducing long term higher growth.

Q: Our Finance Minister has projected that fiscal

deficit would come down to 4.6% in FY12. Do

you think this is achievable given the government

finances going haywire?

A: The funds available to the government last fiscal from

3G & BWA was close to 1.05 lakh crores, but a significant

part of the amount has been carried forward to this fiscal

year i.e..approx 30,000 crores. So actually there is a positive

externality in that way. We are talking about fiscal deficit as

a percentage of GDP and you basically need to understand

that the denominator is also increasing. So, if your real

growth assumed is 8 % and inflation is at about 8 % so

roughly speaking, you are talking about 16 % growth in the

denominator. So, that in itself brings down fiscal deficit. If

you look at the indicators as of now such as Tax

commission and everything, they are ahead of the budget

target. From that aspect, I don’t see any significant

slippage from the fiscal deficit perspective. Even if there is

a slippage, it won’t be significant. It would be well below

5%, may be something around 4.8% if there is any

slippage.

Q: The FY11 4th quarter GDP has declined to

7.8% and there are also signs of Industrial

slowdown by recent data. Do you see slowdown

in Indian economy?

A: To the contrary, I believe that from November 2010,

there has been significant buoyancy in the industrial

production. We need to understand the relation of FY11’s

data particularly IIP & GDP against the previous financial

year i.e...FY10 was an abnormal year. In the first half of

the financial year FY10, there was a subdued growth and

in the second half there has been significant buoyancy. The

base for last year (FY11) is FY10. So when you started in

the year FY11, your industrial production was in high

teens and in course of the year growth started faltering

mostly because of the asymmetrical base effect. What

happens is that actually, if you look at the IIP, the index

shows a no change between the periods April 2010 to

November 2010. It remained flat, while the growth rate

fluctuated between high teens and low single digit numbers

simply because of the asynchronized base. But

internationally you look at growth more as a seasonally

adjusted 3 months over 3 months moving average. If we

take this method, we see that after November, there has

been significant pick up in industrial growth from a (-) 8%,

the growth has become to (+) 8%, so there is a delta of

16% points. So, in that sense I don’t subscribe to the view

that there is any serious slowdown in industrial production

in the second half. Similarly, one can also look at the GDP

numbers. In the (1st Half) FY12, you would see subdued

numbers because of the high base of the (1st Half) FY11.

Similarly, in the (2nd Half) FY12 we would see a

significant pickup in growth. It is more of a base effect

rather than any slowdown or pickup.

Q: Standard & Poor (S&P) has recently warned

US about downgrading its economy ratings. Do

you think there are chances of US defaulting?

A: US technically can’t default because it has unlimited

power to print money. It’s like India has internal debt and

government can’t default on internal debt because at the

end of the day they have recourse to the printing press.

But yes, fiscal issue is a major problem not only in US, but

also in Europe particularly in PIIGS economies. So, this is

something that would dominate the economic

developments for the times to come. There is already a

school of thought which is predicting that the next crisis

would happen in government debt. This is a serious issue

and the international community has been looking at it,

otherwise this can result in a prolong period of low

growth.

Q: US have reached its debt ceiling. The

president and congress are at loggerheads to

raise the limit. So, how do you see these

developments?

A: As far as the fiscal reforms are considered, the congress

and president are at loggerheads. This in actually could be

a blessing in disguise because US economy has not

completely recovered from the global financial crisis,

which now you are calling as the great recession of 2008. It

may be too early for the government to take up further

fiscal reforms because the quantitative easing (QE2) has

just ended and if the government starts doing fiscal

10


consolidation than it could be negative for the economy.

Because of this reason, I don’t think any serious

consolidation will go through in the near future.

Q: There has been a decline in capital flows (FIIs

& FDIs) for the past one year. How will this

affect the investments in the country?

A: Firstly, we must understand that 94% of the investment

in India is domestically funded and the role of foreign

capital in funding investments in India is limited. Secondly,

when you are looking at foreign capital, you have to take a

holistic view rather than considering only equity capital.

FIIs are basically portfolio investments are mostly equity

capital. But if you look within FIIs, there is a component -

Portfolio Debt Inflow. Portfolio debt inflows have been

significantly increasing, because there is a significant

interest differential between India and the rest of the

world. Other forms of debt inflows-External Commercial

Borrowings (ECBs), Banking Capital and NRI Deposits

are also pretty robust. But having said that, deceleration in

FDI inflows is something to be looked at. See, it is more

to do with the procedural delays in India. If you look at the

last RBI’s monetary policy document i.e...Macro document

which is issued before the monetary policy, you would

notice that RBI has been extremely critical of the impact

of procedural delays on the investment climate. So, this is a

serious issue which needs to be looked upon.

Q: Euro zone especially the PIIGS economies

has been facing serious challenges to sustain.

What according to you is the major reason of

crisis in Euro zone?

A: The problem with Europe is that different nations are

at different phases of the economic cycle. The economies

are not synchronized. For example, if you are at the upper

part of the business cycle, you need higher interest rates,

exchange rate appreciation and things like that. But if you

are at the bottom of the business cycle, you need the other

way round. That’s what we are calling it as Two-Track

development in Euro region. Germany and France

obviously are going pretty well, while the PIIGS

economies are facing problems. If Greece could devalue its

currency, a major part of the problems could get resolved.

Obviously Greece can’t devalue its currency because it

doesn’t have its own currency as euro is the common

currency. So, there is a clear threat to the integrity of euro

as a currency. It is quite possible that some of the weaker

nations might leave the union. Some people like Mr. Soros

are talking about it to happen as early as January 2012. I

don’t have a definite view on whether European Union

(EU) will disintegrate, but yes it is increasingly under

pressure. Its members are at different stages of

development, so they need different kind of macro

policies.

Q: How do you view the role of IMF in handling

the crisis like situation?

A: IMF obviously doesn’t have adequate resources to

address the debt problems faced by developed nations and

from that perspective IMF’s role is pretty constrained.

Whenever, IMF comes with an adjustment program, they

generally address more domestic adjustments basically

because the debtors generally have less muscles than the

creditors. This is a clear criticism of IMF. Most of the

developing economies including India feel that IMF must

restructure itself hence providing more active role to the

emerging nations. India is a very good campaigner of such

reforms in IMF’s structure.

Q: An IMF Chief from an emerging economy

would be a positive development for the

emerging nations in international affairs. What’s

your view on this issue?

A: Not necessarily. Historically, if you see the World Bank

chief has been from United States and IMF chief from

European region. Obviously this cannot be a happy

situation and developing nations need much bigger voice.

But, I don’t think it really matters who is the chief of IMF.

What is more important is the issue of disproportionate

quota that exists between the developed and developing

nations. So, I think the reform of the basic structure of

IMF is far more important rather than who is heading

IMF.

Q: Do you think the current account deficit in

India is a worrying issue?

A: First and foremost, the nature of the current account

deficit in India is grossly misunderstood. One of the

reasons why India’s deficit is high is because India is the

biggest importer of gold. If you knock off gold from the

reported data and calculate the deficit, you will find that

11


each year between 2000 and 2008 India had a current

account surplus. Now, gold from where I see is an asset

rather than a good. So it should ideally be a capital account

entry rather than current account entry. But internationally

gold is not taken as an asset for balance of payments

calculation. It doesn’t impact other countries much

because the amount isn’t very large, but India being a

major importer it has a large impact. From this

perspective, I think the nature of CAD in India is grossly

misunderstood. Secondly, if you look at the funding of

India’s current account deficit, more often than not the

role of portfolio flows which is pretty volatile is not more

than 30% on an average. Other kind of flows which India

receives includes FDIs, ECBs, Banking capital, NRI

deposits and external assistance. All those aspects also play

an important role. So, I don’t think from the sustainability

of current account position, it is really an issue. Economic

theory suggests that if a country is in a growth phase, that

country should actually maintain a current account deficit.

Basically, at the end of the day return on capital in that

country is much higher than the rest of the world. So,

economic theory suggests India should have current

account deficit.

Q: Will the problems in Japan further increase

after the natural calamity and nuclear disaster?

Do you feel any positive signs from Japan’s

perspective?

A: Japan obviously, what we have seen is the “Lost

Decade” in the 90s for certain policy mistakes. Over and

above that what we have seen in Japan is that Japan is the

most negatively impacted nation by population ageing and

issues associated with that. Japan is technically into

recession. As per US definition, 2 quarters of negative

growth is recession and Japan obviously is under recession.

But, the immediate positive effect would be reconstruction

because of the destruction by a series of natural calamities

and nuclear disasters. This should actually push Japanese

economy upwards, but at any case the potential growth for

Japan is not high and Japan has to deal with public debt

problem. But since, most of the public debt in Japan is

domestically held; they have some amount of comfort

factor. But definitely Japan is withstanding problems since

90s and that is still persisting. Beyond the reconstruction

Japan has serious issues which have to be addressed.

Q: Indian government has been slow on reforms.

Do you think this would stifle growth in near

future?

A: If you look at corporate debt market, government has

actually increased the limit from USD 10 billion to USD

20 billion and now to USD 40 billion. Government is

actually bending backwards to attract fund flow

particularly for infrastructure funding. I think that’s one

area where government has done a lot. The issue here is

more of regulatory delays which are happening whether to

start a mine and land acquisition has become a serious

issue. All these challenges we have to address. Otherwise

we would stifle growth very significantly.

Q: What are the key Lessons learnt from the

financial crisis?

A: What you have seen in the last crisis, the central reasons

of the crisis has been the mispricing of risk. That has

happened because there wasn’t appropriate mechanism -

regulatory or supervisory mechanism. There was some

kind of regulatory arbitrage which has allowed this kind of

event to happen. We have seen that by nationalising the

private debt, we have come out of the crisis. So actually

the public sector has taken the burden on its balance sheet.

Every time we have seen that the resolution of one crisis

has actually set in the seeds for the next crisis starting from

the investment crisis in US or the dotcom bubble. All

these things increasingly have set up the seeds for the next

crisis. Public finance particularly in the developed nations

is a major risk area going forward. So in that sense there is

obviously large level of regulatory forbearance which has

led to the current crisis. Even now, we are mispricing risk

and aren’t properly pricing the sovereign risk, which is an

issue. We have of course learnt the price paid for allowing

an institution to be too big to fail. Bank for International

Settlements (BIS) recent initiative says that the systemically

important financial institutions must have a better capital

adequacy ratio. Those are the kind of steps taken to

safeguard as there is nothing called a full proof system and

mostly it is learning by doing. Prior to the crisis, many of

them knew that the housing sector in US had problems

and issues, but not much concern was raised then. So long

you are making money as a financial institution; you have

to go with the model. So, that’s the problem of capitalistic

system under which we work.

12


Q: What are the key challenges that India need to

address to achieve the double-digit growth?

A: India has always grown at a high pace and the growth in

investment has been high. For India to achieve double

digit growth, the investment rate should be significantly

high. If you take the incremental capital output ratio of

something around 3.5 to achieve 10% growth, you need a

30% investment, for a capital output ratio of 4, u need a

40% investment. From that perspective, high investment

requires high domestic savings. Otherwise you would be

overly dependent upon foreign capital. Basically

investment in infrastructure is critical for India to grow

going forward. For that we need lot of reforms across

various sectors. For example, the land acquisition reforms,

issues related to mining sector and procedural delays have

to be addressed. Apart from that for funding

infrastructure, you need a vibrant debt market. So the

reforms in the debt market are very important. In 1990s

when the government has initiated reforms, the

assumption was that the government should withdraw

from the productive activities and private sector would

play a major part instead of government. This has

happened in the manufacturing sector to some extent and

to some extent in infrastructure but this didn’t happen in

the context of agriculture. Now, it is clearly accepted that

private and public can be substitutes in industry and to

some extent in infrastructure, but they are complementary

in agriculture. If and only if government invests in a large

irrigation project, private investments would flow to

support the project. So my sense is that investment in

agriculture and improving productivity in agriculture is

very important. Otherwise you would face high food

inflation and thereby wage inflation. That’s another issue

government needs to address. Thirdly, government has to

take care of the financial position. We have to reduce the

fiscal deficit. Basically, today if we look at government

expenditure, 70% is committed expenditure. It either goes

for paying the salaries of the government servants, or it

goes into debt servicing or it goes into politically sensitive

subsisidies. So, if 70% expenditure is committed

expenditure then how much discretionary spending

amount is left with the government for vital investments?

This issue also needs to be addressed. So, these I would

say are the 3 major challenges for India – Sustaining high

investment growth in infrastructure including agriculture,

increasing agricultural productivity and reforms in public

finances.

Q: What are the key takeaways for a student from

the crisis?

A: It is very important to understand the business cycle

and phase of business cycle where you are. You are now

experiencing the crisis period as a student. You should

understand the logic of business cycle and you should not

interpret everything linearly. So if inflation is 5 %

yesterday, 6% the next day, 7 % the other day, then you

shouldn’t necessarily draw a line that it would go to 9%.

One needs to understand that it is also cyclical. You should

also understand that there is a non-linearity in it. It would

top up and it would go down. So understanding business

cycles is very important for you as students. One needs to

be aware of the events happening around and needs to

assess why things are changing. You shouldn’t try to be

conformist. Just because people are telling you that FY12

growth would be lower than FY11, you shouldn’t believe

that. At the end of the day you would be paid for your

logic no matter in which profession you are. So long you

have logic, it would be fine and logically you should try to

understand rather than following anybody. Economics and

finance are very innovative subjects; you try to understand

for yourselves.

By Gopidalai Muralidhar Rao, MMS 2010-2012 & Sangeet Srichandan, PGDBM 2010-2012

“It is very important to

understand the business

cycle and phase of

business cycle where you

are. Understanding the

business cycle is very

important for you as a

student”

13


Vodafone & Essar To End Their Partnership Vodafone, the world’s biggest

mobile phone company by

revenues and India’s No. 3 mobile

operator, agreed to end its

partnership with Essar. It has

offered $5 billion for buying 33%

stake of Ruias in the company. The

exit transaction will be in two part i.e... 22% Put or Sell

Option for Essar worth $3.8 billion and 11% Call or Buy

option for Vodafone worth $1.2 billion. The transaction is

assumed to be completed by November. After this

transaction Vodafone may launch its IPO.

India’s Largest Debt Raised By Hindalco Hindalco raised Rs 7875 crore

in debt for a greenfield smelter

plant at Mahan, Madhya

Pradesh. This is India’s largest

debt raising exercise till now.

Hindalco has raised the loan

from a syndicate of 31 banks on

a floating rate basis for a tenor

of 12.75 years. The Mahan project will have an annual

capacity of 3,59,000 tonnes of aluminium smelter and also

includes a 900 MW captive thermal power plant.

Relief For The Banks Banks will be exempted from paying service tax on foreign

exchange transactions entered into with other lenders. The

transaction with the customer will be charged a nominal sum

of 0.-0.5 % of the transaction amount.

Wipro Buys SAIC Unit In US Wipro technologies, India’s third largest exporter of software

services has acquired the oil and gas

IT practice of US headquartered

Science Applications International

Corp. (SAIC) for $150 million. The

acquisition is mainly done to bring

back the growth on track. Wipro

lagged in the previous quarter as compared to its competitors

because of wrong anticipation of recovery in US and Europe.

Wipro has done lot of changes in management to bring back

the growth in its favor.

Exports Cross $200 Billion Mark In the first 11

months of 2010-11

backed on the

demands from US

and other markets,

India’s export was

$208.2 billion. The

imports for the same

11 months grew 18% to $305.3 billion over the year ago for

the same period.

Rabobank Gets The Banking License RBI gives its green signal to

Rabobank, a bank based in

Netherland, for the full-fledged

banking operations in India.

Rabobank was a promoter in Yes

bank but it had sold its 11% stake 9

months ago. According to Indian

banking regulations, foreign bank holding more than 5%

equity in any Indian bank can not apply to open branches in

India. The bank also runs non-banking financial company

under the name of Rabo India Finance Ltd which lends to

food and agricultural businesses and renewable energy

companies.

Pratip Chaudhuri appointed SBI’s New Chairman State Bank of India, the country’s

biggest lender, got a new chairman.

Pratip Chaudhuri will take place of

O P Bhatt who retired on 31st

March after a five year stint with

SBI.

14


Unilever & P&G Fined By European Commission Unilever and Procter & Gamble have

to pay a fine of $457 million to

European commission as they were

indulged in illegal practice. Unilever,

P&G and Henkel were charged for

fixing up the prices of detergents in 8

countries over a period of 3 years. The price-fixing is illegal as

it kills the competition and considered as anti-competitive

strategy. Henkel was not fined because it was the first

company to provide evidence to regulators.

Aditya Birla Group Acquires Domsjo Fabriker Aditya Birla Group, a Mumbai based conglomerate acquired

Sweden based pulp maker Domsjo Fabriker for $340 million.

This acquisition shows the intent of Birla group to grow the

fibre business globally.

Muthoot Finance IPO Oversubscribed Muthoot Finance, India’s largest gold

loan company, has seen its 900 crore

IPO drew bids for at least 25 times

the share on offer. The offer was

oversubscribed because of investors

expectation which they saw during

Manappuram, rival of Muthoot

financé, IPO launch. Manappuram share price has doubled in

few months.

Johnson & Johnson To Acquire Synthes Johnson & Johnson, a

US based health group,

is all set to buy Swiss

medical device maker

Synthes Inc for $21.6

billion. This deal will be the largest buy ever by Johnson &

Johnson. The acquisition is done to boost its orthopaedic

business. The acquisition process is expected to be over in the

first half of 2012.

US Credit Rating Downgraded By Standard & Poor Standard & Poor’s

downgraded the outlook for

the United States’s AAA

credit rating to negative

because it believes there are

risk U.S. policymakers may

not reach agreement on

how to address the country’s long-term fiscal pressures.

K V Kamath To Be New Chairman Of Infosys Infosys appointed K V Kamath as the new chairman in place

of its founder N R Narayna Murthy. The job of new chairman

is to draw a succession plan for the exit of all founders and

appointment of young

professionals to run the

company. K V Kamath has the

expertise to perform this job as

he did the similar thing when

he was the chairman of India’s largest private bank ICICI. A

lot of restructuring at top management level is expected in the

tenure of new chairman.

Airtel To Raise $1 Billion Bharti Airtel is all set to raise $1

billion through a global bond

issue. The raised money will be

utilized to repay the debts which

were taken during the acquisition

of Zain telecom. The issue will be

in the form of debentures and will

have tenure of 10 years.

RBI Raises Repo Rates By 50 Basis Points RBI increased the repo rate by 50

basis points to 7.25% in an

aggressive move to tame inflation.

The move indicates RBI’s priority to

control inflation to comfortable

levels.

Apple Topples Google As Most Valued Brand Apple Inc maker of iPhone, iPad and

iMac overtook search engine giant

Google as world’s most valuable

brand. Apple is valued at $153.3

billion whereas Google is valued at

$111.5 billion. IBM, McDonanld’s Corp and Microsoft come

at 3rd, 4th and 5th most valued brands in the world.

Adani Group Buys Coal Port In Australia Adani Enterprises, a group that runs

the country’s biggest private port,

acquires the Abbot Point Coal terminal

in Australia for $2 billion. This

acquisition is group’s 3rd overseas

acquisition in last 9 months. With this

deal Adani Enterprise has become the largest Indian investor

in Australia.

15


FDI Dips By 9% In January To April According to the industry ministry data, Foreign Direct

Investment (FDI) has declined by 9% to $6.51 billion during

January-April 2011 over the same period last year. In January-

April 2010 country received $7.14 billion as FDI.

Microsoft To Acquire Skype For $8.5 Billion Microsoft to buy Internet

phone services Skype for $8.5

billion in cash. Microsoft buys

Skype has 663 million user

accounts, of which 9 million

are paid users. It gives

Microsoft a boost in the

enterprise collaboration

market, especially when competing with Cisco and Google.

Skype will become a new business division within Microsoft

and Skype chief executive Tony Bates will assume the title of

president of Microsoft Skype division.

Industry Grows At 7.3% In March India’s industrial output registered a sharp rise in March.

Factory output, as measured by the Index of Industrial

Production (IIP), rose 7.3% in March from a year earlier,

almost double the revised 3.7% expansion in February. The

expansion was driven by a 7.9% rise in manufacturing output.

Manufacturing contributes about 80% to the overall output.

Renault Makes A Re-Entry To Indian Market French car maker re-enters

Indian market after ending its

partnership with Mahindra and

Mahindra Ltd. Renault will

launch at least seven models,

including two Indian specific

small cars, in three to four

years. The re-entry of Renault

indicates the potential Indian market which has sustainable

growth over few years.

RBI Hikes Repo Rates By 25 Basis Points RBI raised key interest rates for the 10th time in the last

fifteen months to tame inflation. The central bank raised key

lending (repo rate) and borrowing (reverse repo rate) by 25

basis points each reflecting its stance of choosing price

stability in the growth-inflation trade off. Repo and reverse

repo rate after this increase stand at 7.5% and 6.5%

respectively.

Aditya Birla Group Acquires Columbian Chemicals Aditya Birla Group acquired

Columbian Chemicals Company for

$875 million. This acquisition has

placed the Indian group at the top in

the list of carbon black producers.

Kumar Mangalam Birla has been

appointed the chairman of the

newly constituted board of directors of Columbian Chemicals.

L&T Finance To Raise Rs. 1,750 Crore Through

IPO L&T Finance Holdings, an arm of

engineering and construction

company Larsen & Toubro, will

launch its Rs 1,750 crore initial

public offer (IPO) in June. The

issue consists of Rs 50 crore worth

of equity shares reserved for employees and Rs 125 crore for

L&T shareholders. The Company intends to use issue

proceeds for repayment of inter-corporate deposit issued by

promoter to company (worth Rs 345 crore); and augmenting

the capital base of L&T Finance (by infusing Rs 570 crore)

and L&T Infra (by investing Rs 535 crore), to meet the capital

adequacy requirements to support the future growth in their

business. JM Financial Consultants Private Limited, Citigroup

Global Markets India Private Limited, HSBC Securities and

Capital Markets (India) Private Limited, Barclays Securities

(India) Private Limited and Credit Suisse Securities (India)

Private Limited are the book running lead managers to the

issue. Equirus Capital Private Limited is the co-book running

lead manager.

BSE Sensex Excludes R-Infra & Rcom The Bombay Stock

Exchange (BSE)

excluded the two Anil

Dhirubhai Ambani

Group stocks-Reliance

Infrastructure (R-Infra)

and Reliance

Communications (RCOM) from the elite Sensex Index. The

index maintenance committee has decided to replace the R-

Infra and RCOM with Coal India and Sun Pharma, with

effect from August 8. Both the shares of the ADAG Group

were lost around 50 per cent of their value in last one year.

The second most valued company in India, Coal India has

market capitalization of Rs. 2.5 lakh crore and one of the

most valued PSUs in India. It had issued IPO in last

November. Now, the coal India is listed into the BSE Sensex.

16


Sun Pharma has market capitalization of 50 thousand crore

rupees and one of the reputed pharmacy companies in India.

NSE Found Guilty Of Unfair Trade PracticeIn its biggest verdict so far, the

Competition Commission of India

(CCI) has held the National Stock

Exchange guilty of indulging in

unfair market practices, which

were detrimental to

The country's largest stock exchange faces a penalty of Rs

55.5 crore – which is 5% of its average turnover during the

last three years. Additionally, NSE may also have to pay

damages to MCX Stock Exchange, its rival in the currency

futures business which had gone to CCI, if the Jignesh Shah

promoted entity makes a claim. NSE is expected to challenge

the CCI order in either the Competition Appellate Tribunal or

the High Court over the next few days.

SEBI Allows Bourses To Offer Sops To Broke

Raising Volumes In Illiquid Derivatives SEBI has allowed stock exchanges

to offer incentives to brokers for

generating volumes in illiquid

securities in equity derivatives

segment. Exchanges can reward

brokers dealing in derivatives of

scrips where average trading

volume for the past 60 trading days is less than 0.1% of

market capitalisation of the underlying stock. The regulator

has asked exchanges to keep liquidity enhancement schemes

(LES) transparent and measurable.

IL&FS Fin to Raise $5 B to Fund Infra Projects IL&FS Financial Services (IFIN)

is planning to raise $5 billion

through debt and equity in the

next one year to fund

infrastructure projects. The

investment banking subsidiary of

Infrastructure Leasing & Financial Services will raise

$1 billion from overseas market and the rest locally, according

to MD & CEO, Ramesh C Bawa. IFIN, one of the largest

infrastructure development and finance firms in India, will use

the money to finance infrastructure projects such as power

plants, roads, and ports.

Fitch affirms 'BBB' rating for India

Brushing aside apprehensions of slowdown, global rating

agency Fitch retained India's sovereign rating at investment

Sun Pharma has market capitalization of 50 thousand crore

armacy companies in India.

NSE Found Guilty Of Unfair Trade Practice In its biggest verdict so far, the

Competition Commission of India

(CCI) has held the National Stock

Exchange guilty of indulging in

unfair market practices, which

were detrimental to competition.

The country's largest stock exchange faces a penalty of Rs

which is 5% of its average turnover during the

last three years. Additionally, NSE may also have to pay

damages to MCX Stock Exchange, its rival in the currency

usiness which had gone to CCI, if the Jignesh Shah-

promoted entity makes a claim. NSE is expected to challenge

the CCI order in either the Competition Appellate Tribunal or

SEBI Allows Bourses To Offer Sops To Brokers For

Raising Volumes In Illiquid Derivatives SEBI has allowed stock exchanges

to offer incentives to brokers for

generating volumes in illiquid

securities in equity derivatives

segment. Exchanges can reward

brokers dealing in derivatives of

average trading

volume for the past 60 trading days is less than 0.1% of

market capitalisation of the underlying stock. The regulator

has asked exchanges to keep liquidity enhancement schemes

Fund Infra Projects IL&FS Financial Services (IFIN)

is planning to raise $5 billion

through debt and equity in the

next one year to fund

infrastructure projects. The

investment banking subsidiary of

Infrastructure Leasing & Financial Services will raise around

$1 billion from overseas market and the rest locally, according

to MD & CEO, Ramesh C Bawa. IFIN, one of the largest

infrastructure development and finance firms in India, will use

the money to finance infrastructure projects such as power

Brushing aside apprehensions of slowdown, global rating

agency Fitch retained India's sovereign rating at investment

grade, stating it has "robust growth prospect" and solid

external financial condition. The agency affirmed long term

'BBB-' rating for the country with stable outlook.

denotes a moderate default risk relative to other nations for

investors.

However, it cautions that changes in circumstances

or economic conditions are likely to affect the capacity for

timely repayment than in the case of higher rated category.

The foreign exchange reserves of the country stood at USD

313.5 billion at May-end. Besides, Fitch said that the current

account deficit estimated at 2.6 per c

not a significant risk in the current stage of economic

development. Indian economy witnessed a growth of 8.5 per

cent during the last fiscal.

Ratings Director Art Woo. Although the central government

fiscal deficit target of 4.6 per cent of GDP for 2011

not be met due to the rising cos

slippage is unlikely to be significant.

consolidation strategy is vital if the government want to

ensure that the sovereign's public debt dynamics stay on a

more sustainable path and are brought into line with o

'BBB'-range rated sovereigns, it said.

Fitch said, the economy is expected to expand at 7.7 per cent

during the current fiscal.

China Will Become Global Banking King By ’23:

PWC China could leapfrog the United States to become the

PricewaterhouseCoopers (PwC) on Friday,

to leapfrog Japan to rank three in terms of domestic banking

by 2035 and could pass China as its population rapidly ages.

By Alok Kumar, MMS 2010

Arthneeti 2011

grade, stating it has "robust growth prospect" and solid

The agency affirmed long term

' rating for the country with stable outlook. 'BBB'

denotes a moderate default risk relative to other nations for

However, it cautions that changes in circumstances

re likely to affect the capacity for

timely repayment than in the case of higher rated category.

The foreign exchange reserves of the country stood at USD

Besides, Fitch said that the current

account deficit estimated at 2.6 per cent of GDP in 2010-11 is

not a significant risk in the current stage of economic

Indian economy witnessed a growth of 8.5 per

In addition, India's

authorities look to be

tackling the challenges of

a continuously large

fiscal deficit and rising

inflation pressure with

greater vigor, according

to Fitch Asia Sovereign

Although the central government

fiscal deficit target of 4.6 per cent of GDP for 2011-12 may

not be met due to the rising cost of subsidies, the potential

is unlikely to be significant. The new fiscal

consolidation strategy is vital if the government want to

ensure that the sovereign's public debt dynamics stay on a

more sustainable path and are brought into line with other

range rated sovereigns, it said. On the GDP growth,

Fitch said, the economy is expected to expand at 7.7 per cent

China Will Become Global Banking King By ’23:

China could leapfrog the United States to become the world’s

largest banking economy

by 2023, 20 years earlier

than expected, raising

pressure on western

banks to brush off the

effects of the credit crisis

and head east. According

to a report published by

consultants

PricewaterhouseCoopers (PwC) on Friday, India is expected

to leapfrog Japan to rank three in terms of domestic banking

by 2035 and could pass China as its population rapidly ages.

, MMS 2010-2012

17


On a mundane Sunday morning, I could hear a raging

debate about Brazil on TV across the floor. I could not

have possibly missed it considering that the 5 time world

champions have some of the most scintillating footballers.

What I ended up watching was a debate about Brazil as an

economy. Brazil has truly undergone a dramatic change in

its image, from being a football crazy nation, known for its

samba dance, to now being reckoned by many as the next

big thing. I thought of answering, what this sudden

fascination with Brazilis; hence this article.

To analyze any country one needs to question certain

aspects, popularly known as the economic indicators of a

country. It would be no different in this case. The

economic indicators can be listed as follows:

The objective of fiscal policy of any government is to

strike a balance between its expenditures and the be

out of it both tangible and intangible. At a per capita GDP

of $10816, the seventh largest economy in the world,

Brazil is considered to be one of the worst examples of

wealth distribution and social exclusion, despite the huge

social spending by successive governments. Between 2001

and 2009 the income inequality measured by the Gini

index fell from .59 to .54, however the country is still

marred with widespread inequality and many believe that a

Gini index of .54 is still quite high for a middle inc

country. In 2010 the Brazilian government reported a

budget deficit of 14.4 billion Reais, well above the

forecasts of certain economists. The net debt to GDP ratio

stood at 40.3% and the nominal deficit at 2.3%. In 2010

Brazil struggled to achieve its budgeted targets. Even

though the Brazilian government did not have much

option in cutting the spending ahead of the 2014 World

Cup and 2016 Olympics, the Dilma government, in an

attempt towards fiscal consolidation, has gone for a

reduction in its social spending by as much as 50 billion

Reais in its current budget and would also cut loans it

provides to the Brazilian Development Bank. The move is

supposed to help the country reduce inflationary pressures

and avoid hard landing even though it might have

Fiscal Policy

n a mundane Sunday morning, I could hear a raging

debate about Brazil on TV across the floor. I could not

have possibly missed it considering that the 5 time world

champions have some of the most scintillating footballers.

What I ended up watching was a debate about Brazil as an

economy. Brazil has truly undergone a dramatic change in

football crazy nation, known for its

samba dance, to now being reckoned by many as the next

big thing. I thought of answering, what this sudden

To analyze any country one needs to question certain

opularly known as the economic indicators of a

country. It would be no different in this case. The

economic indicators can be listed as follows:

The objective of fiscal policy of any government is to

strike a balance between its expenditures and the benefits

out of it both tangible and intangible. At a per capita GDP

of $10816, the seventh largest economy in the world,

Brazil is considered to be one of the worst examples of

wealth distribution and social exclusion, despite the huge

ccessive governments. Between 2001

and 2009 the income inequality measured by the Gini

index fell from .59 to .54, however the country is still

marred with widespread inequality and many believe that a

Gini index of .54 is still quite high for a middle income

country. In 2010 the Brazilian government reported a

budget deficit of 14.4 billion Reais, well above the

forecasts of certain economists. The net debt to GDP ratio

stood at 40.3% and the nominal deficit at 2.3%. In 2010

budgeted targets. Even

though the Brazilian government did not have much

option in cutting the spending ahead of the 2014 World

Cup and 2016 Olympics, the Dilma government, in an

attempt towards fiscal consolidation, has gone for a

spending by as much as 50 billion

Reais in its current budget and would also cut loans it

provides to the Brazilian Development Bank. The move is

supposed to help the country reduce inflationary pressures

and avoid hard landing even though it might have a down

side effect on the GDP of the nation.(IMF has reduced the

GDP forecast of Brazil for 2011 to 4.1%). At the same

time with lower external debt metrics Brazil is considered

to be solvent by many economists. Having missed the

primary surplus target in 2010, Brazil has seen an

unprecedented growth in the primary surplus of the

country in the first quarter of 2011.

The primary surplus figure rose by 67.7% from the same

period last year to reach 57.3 billion Reais, nearing the

halfway mark towards its targeted 117.9 billion Reais.

Many believed this rise in surplus was due to an increase in

the net tax revenues rather than pure spending cuts. The

economic outlook of the country looks good, If only the

government could moderate the inflation figures which

stood at 6.55% in May.

In many ways the political stage of Brazil is a mirror image

of that of India, fractious to say the least. Together with

several smaller parties, four political parties stand out:

Workers' Party (PT), Brazilian Social Democrac

(PSDB), Brazilian Democratic Movement Party (PMDB),

and Democrats (DEM). Collation government is what

drives the political scenes of Brazil and as expected in any

collation government, changing party lines is too common.

So much so that the Supreme

party hopping to encourage party loyalty. Brazil has a fairly

strong legal set up whose commitment towards eliminating

corruption is well known. There are enough anti

corruption initiatives but what lacks is political support

Political & Socio Scenario

Brazilian Economy Analysis

Arthneeti 2011

side effect on the GDP of the nation.(IMF has reduced the

GDP forecast of Brazil for 2011 to 4.1%). At the same

time with lower external debt metrics Brazil is considered

to be solvent by many economists. Having missed the

2010, Brazil has seen an

unprecedented growth in the primary surplus of the

country in the first quarter of 2011.

The primary surplus figure rose by 67.7% from the same

period last year to reach 57.3 billion Reais, nearing the

rgeted 117.9 billion Reais.

Many believed this rise in surplus was due to an increase in

the net tax revenues rather than pure spending cuts. The

economic outlook of the country looks good, If only the

government could moderate the inflation figures which

In many ways the political stage of Brazil is a mirror image

of that of India, fractious to say the least. Together with

several smaller parties, four political parties stand out:

Workers' Party (PT), Brazilian Social Democracy Party

(PSDB), Brazilian Democratic Movement Party (PMDB),

and Democrats (DEM). Collation government is what

drives the political scenes of Brazil and as expected in any

collation government, changing party lines is too common.

Court in 2007 had barred

party hopping to encourage party loyalty. Brazil has a fairly

strong legal set up whose commitment towards eliminating

corruption is well known. There are enough anti-

corruption initiatives but what lacks is political support

Brazilian Economy Analysis

18


and effective implementation. The wide social inequalities

in Brazil have prompted the crime rate to move

northwards while land reforms policies are still to be

implemented. The newly elected government under the

presidency of Dilma Rousseff will have a tough time in

meeting the aspirations and demands of an overheated

economy, specially doing that with a ten party collation

government will be a tough task. The priorities of the

current leadership should be in bringing fiscal

consolidation and improving the social fabric of the

economy with introduction of pro-poor policies on the

lines of its existing bolsa familia program and national bio-

diesel program. It would be interesting to see how the

government reacts to the challenges, considering that both

the objectives are contrary to each other.

“It’s quite unlikely that if you had told me 10 years ago

that I would buy the Brazilian Real, I would have thought

you were crazy. In the last five years -the Brazilian

currency –in terms of the American currency, has

doubled”. This is what Warren Buffet had said, when he

was questioned about Brazil as an investment destination.

The South American power house was widely believed to

be the first country to come out of the economic

downturn. It was in 2008 that Fitch and S&P upgraded the

Brazilian economy from speculative to investment grade.

According to Baker and McKenzie Brazil will continue to

enjoy a steady FDI inflow, however, the government needs

to reconsider its taxation policy on FDIs and FIIs. In 2009

Brazil became oil self-sufficient and it does not need a

huge chunk of the oil it has (world’s largest oceanic oil

fields is in Brazil), the government can attract loads of

foreign currency by exporting this oil. With the world cup

and Olympics not far away the Brazilian government is

expected to invest nearly USD 93 billion. This investment

will certainly give a boost to the economy in terms of

employment and infrastructure development. PWC, in its

report on emerging economies, has predicted that Brazil

by 2050 would be as large an economy as Japan. Having a

look at the different sectors of the economy gives us an

idea as to why people expect Brazil to be the next big

thing. The major ongoing steel projects and the new

mining code and the government’s plan of investing USD

40billion to reduce the housing deficit, would certainly

foster the economy. In 2010 itself Brazil saw a spike of

23% in assets under management, the private-equity firms

controlled had business worth $36 billion, the primary

reason behind these developments is a maturing capital

market, several IPOs and the support of the government.

Despite all these in 2010 the World Bank’s “Doing

Business Survey” had stated that it took 120 days to start a

business in Brazil, far above the regional average of 45.5

days. The challenge for the newly elected government

would be to curb the rising inflation without adversely

affecting the investment scenario of the country.

Drafting an effective monetary policy is the tricky answer

to most critical question for developing economies, how to

maintain a sustainable growth keeping inflation under

control? Current ICPA inflation index of 6.77% (May

2011) has crossed the upper limit of the target range (4.5%

+/-2%) estimated by the Brazilian Central Bank (BCB) for

H2 2011.

Inflation & Unemployment Rate

Year Inflation Unemployment

2003 10.4% 12.3%

2004 6.2% 11.5%

2005 5.1% 9.8%

2006 4.2% 9.3%

2007 3.6% 8.7%

2008 5.7% 7.9%

2009 4.3% 8.1%

2010 5.9% 7.4%

2011 *5.7% *7.2%

So far in current fiscal year policy makers have raised

benchmark interest rates twice but the lagged effect of this

is expected in third and fourth quarters. Current lending

rate (Selic) of 12.25% (as revised on June 8, 2011) vis-à-vis

10.75 % (January, 2011) shows the urgency of the issue.

This has got clear response from the market as Bovespa

(Sao Paulo exchange) has dropped by 12% since January,

2011.The confliction and dilemma of fiscal and monetary

policies will keep Banco Central Do Brazil (Brazil’s central

bank) and government under continuous watch. Though,

announcement of a 50 billion Reais ($30 billion) cut in

spending and increase in interest rate, similar steps are

expected in near terms. Finally the pressing question for

Brazil is; how long can it restrict spending when large

international events like the FIFA World cup (2014) and

the Summer Olympic Games (2016) are around the

corner?

Investment

Outlook

Monetary Policy

19


“Not again!!!” shouted a passenger in anger since he

couldn’t manage to get inside the train. The situation at Se

metro subway station in downtown Sao Paulo is getting

worse day by day. Brazil’s infrastructure is already buckled

under pressure due to handling of over capacity. The

situation is no different at the international air terminals. If

INFRAERO (Brazil’s state run airport administrator)

report is believed, air passengers in Brazil have grown by

118% since 2003 but infrastructure has not improved over

time.

According to the scale of global competitiveness index of

infrastructure developed by World Economic Forum,

Brazil ranked at 74th Position out of 133 countries which

is slightly better than India but far behind compared to

Chile (30), South Africa (45) and China (46). With focus

on ports and transportation as the priority sectors,

improvement in these segments can boost Brazil’s GDP

growth to around 6-7% in coming years. Brazil must

double its infrastructure investment rate to live up to the

expectations for a BRIC member. Overall investment-to-

GDP ratio averaged 17% in the past 5 years, vs. China’s

44%, India’s 38%, and Russia’s 24%. To grow at 5% per

year in the next decade, infrastructure investment must

double from the 2.1% of GDP average in recent years.

There are four key known drivers of higher infrastructure

spending in the near future: the 2014 World Cup, the 2016

Olympics, the development of the pre-salt oil reserves, and

the government-sponsored Growth Acceleration Program

(PAC).

Although too many restrictions and barriers are imposing

challenges to Brazil, in a medium term perspective the

Brazilian economy is expected to remain positive.

Sustaining the growth by means of maintaining the control

over the above mentioned factors will prove critical in time

to come. More structured and long term investment plan

should be drafted to cater to the increasing domestic

demand with increased market confidence and more

foreign investments. Currently, inflation is the major issue

and needs to be addressed with utmost priority. This will

ensure a favourable environment for the sustainable long

term growth and this would be possible only when the

government will have a perfect blend of fiscal and

monetary policy in place. Brazil is amongst the leading

exporter of commodities like coffee, orange juice, sugar,

beef and soy. Other positive factor is the increasing trade

between BRIC nations which has opened up new fronts

for trading. In addition to these events, the FIFA World

Cup and the Olympics will provide a perfect foundation

for the anticipated growth in coming years. All that Brazil

needs to do is, to capitalize on these opportunities of

international events to direct the incremental investments

in the primary sectors which will form the base of future

growth. The world is keeping a close look at Brazil as an

emerging economy. It’s just a matter of time to see when

Brazil is going to score winning goal? Till that we bid adios

and keep watching…

Economy Scorecard: Brazil

GDP 7.5%(2010)

4.1%(Q1 2011)

GDP (sector wise)

Agriculture 6%

Industry 26.40%

Services 67.60% Budget Balance -2.30% Inflation 6.77%(May,2011)

Unemployment 7.4%(2010) Exports USD 201.9 BILLION Imports USD 187.7 billion(2010)

Gross External Debt USD 310.8 billion(2010)

S&P Credit Ratings BBB+(Domestic) BBB-(Foreign)

Foreign Reserves USD328 billion Public Debt Investment Grade

Infrastructure

Outlook

By Sangeet Srichandan, PGDBM 2010-12 & Vishal Bhanushali, MMS 2010-2012

20


Despite bright economic prospects, most emerging Asian

countries such as China, India, Indonesia and other

Association of Southeast Asian Nations (ASEAN) continue

to suffer from underdeveloped infrastructure.

emphasis is being laid on infrastructure investment and

development to stabilize a shaky platform of growth. Of

these countries, the two that are projected to domina

sector are China and India. Indian economy has undergone

fundamental changes over the last decade. Growth in

investor interest is driven by strong economic growth,

low interest rates, rising foreign exchange reserves,

quality and cost competitiveness and encouraging

Government policy-making. The strong levels of economic

growth achieved in India in recent years have

expansion of industry, commerce and per-

This in turn has fuelled demand for infrastructure

utilities including energy, transportation, telecom, water

supply and other urban infrastructure. In comparison to

emerging markets, India’s investment expenditure

infrastructure over the next decade will account for 28%

the total planned investment expenditure by emerging

markets. So, this makes India, the second biggest

destination after China for infrastructure spend in the

emerging markets, making it an attractive venue for private

sector investments.

(Source: Mckinsey)

The Planning Commission estimates investments in

infrastructure projects in India will be more than $1100

billion over 2010-11 to 2016-17, an amount higher than its

28%

7%

2%

2% 2%

10%

100 Percent=INR 220 Lakh Crores

China

India

Russia

Mexico

Brazil

Indonesia

Other

Meeting Indian

Infrastructure Ne

Infrastructure Spending In Emerging Markets

(2008-2017)

Despite bright economic prospects, most emerging Asian

countries such as China, India, Indonesia and other

ast Asian Nations (ASEAN) continue

to suffer from underdeveloped infrastructure. Increased

mphasis is being laid on infrastructure investment and

development to stabilize a shaky platform of growth. Of

these countries, the two that are projected to dominate this

Indian economy has undergone

fundamental changes over the last decade. Growth in

investor interest is driven by strong economic growth,

low interest rates, rising foreign exchange reserves,

competitiveness and encouraging

levels of economic

growth achieved in India in recent years have led to an

-capita income.

This in turn has fuelled demand for infrastructure and

including energy, transportation, telecom, water

In comparison to

emerging markets, India’s investment expenditure in

ext decade will account for 28% of

xpenditure by emerging

So, this makes India, the second biggest

China for infrastructure spend in the

emerging markets, making it an attractive venue for private

n estimates investments in

infrastructure projects in India will be more than $1100

17, an amount higher than its

real GDP in 2009-10. The investment in infrastructure in

India has increased from 4.9% of the gross domestic

product (GDP) in 2002-03 to 7.18% in 2008

expected to increase to 8.37% in the final year of the 11th

Plan and likely to touch 10% of GDP in the 12th Five

Year Plan (2012-2017). With the increasing investment,

the share of private sector in the total investment on

infrastructure has increased rapidly. The contribution of

private sector in total infrastructure investment in each of

the first two years of 11th Plan (2007

34%. This is higher than the 11th Plan

25% achieved in 10th Plan period. It is expected to rise to

36% by end of 11th Plan and 50% during the 12th Plan

(2012-2017).

A comparison between India and China shows that the

Gross Capital Formation as a percentage of GDP is only

32 percent in the case of India compared to 42 percent for

china, with a greater part of the differential arising in the

infrastructure and real estate sector. Further, total funds

available for the 12th Plan are expected to be

approximately 31 percent short of the INR 4,100,000 Crore

targets, translating into a funding gap of almost INR 1,

273,000 Crores for the Plan period.

infrastructure is costing India between 1.5

GDP growth every year. This shows the tremendous

opportunity that India provides in terms of Infrastructure

for both domestic as well as International financiers.

Source: Planning Commission [1: Anticipated Spend, 2: Projected Spend]

49%

Meeting Indian

Infrastructure Needs

Infrastructure Spending In Emerging Markets

Infrastructure Plan for XIth & XIIth Plan

Arthneeti 2011

The investment in infrastructure in

India has increased from 4.9% of the gross domestic

03 to 7.18% in 2008-09. It is

expected to increase to 8.37% in the final year of the 11th

Plan and likely to touch 10% of GDP in the 12th Five

2017). With the increasing investment,

ector in the total investment on

infrastructure has increased rapidly. The contribution of

private sector in total infrastructure investment in each of

the first two years of 11th Plan (2007-2012) was around

34%. This is higher than the 11th Plan target of 30%, and

25% achieved in 10th Plan period. It is expected to rise to

36% by end of 11th Plan and 50% during the 12th Plan

A comparison between India and China shows that the

Gross Capital Formation as a percentage of GDP is only

percent in the case of India compared to 42 percent for

china, with a greater part of the differential arising in the

infrastructure and real estate sector. Further, total funds

available for the 12th Plan are expected to be

of the INR 4,100,000 Crore

targets, translating into a funding gap of almost INR 1,

273,000 Crores for the Plan period. The gap in

infrastructure is costing India between 1.5-2 per cent of

This shows the tremendous

ndia provides in terms of Infrastructure

for both domestic as well as International financiers.

Planning Commission [1: Anticipated Spend, 2: Projected Spend]

Infrastructure Plan for XIth & XIIth Plan

21


PPPs is the way forward and

government is increasingly looking at

using the public private partnership

(PPP) model to fund infrastructure

projects. PPPs are essentially win-win

solutions that seek to draw on the strengths of both

sectors. Thus, the efficiencies of the private sector can

ensure better deliveries of public infrastructure like roads,

bridges, water supply and sewerage projects, ports and

airports, etc. The presence of the public sector ensures

certain concessions, and mitigation of some of the risks.

Thus, the combined capital and intellectual resources of the

public and private sectors can result in better, more

efficient services, without raising taxes for the public.

Indian Government has taken

several steps to spur growth in the

infrastructure sector following the

economic reforms.

A specialized financial intermediary

for infrastructure was incorporated in 1997 called IDFC

(Infrastructure Development Financial Corporation).

Following the conversion of the erstwhile development

financial institutions (DFIs) into commercial banks –

namely, IDBI Bank and ICICI Bank – infrastructure

projects faced the problem of securing long term debt.

In order to mitigate this problem of long term borrowings,

the Indian government has set up Indian Infrastructure

Finance Corporation Ltd (IIFCL), to secure long term debt

for infrastructure projects. IIFCL has the ability to borrow

up to $2.32 billion that will be guaranteed by the

government.

The Union Budget 2010 has allowed tax deduction on

investment in Infrastructure bonds till Rs, 20,000 for

individual investors. This move had increased the

attractiveness of infrastructure bonds for individuals and

would help raise debt capital required for infrastructure

investments.

Over the past few years various investment funds have

committed themselves towards the infrastructure sector in

India, but still there is a huge gap of funding which can be

met by proper and timely implementation of policies by the

Indian government to facilitate the flow of investments

towards this direction.

The government should consider a series of policy

measures to remove these barriers and steer more capital

into India’s infrastructure sector by ensuring flows from

existing sources of capital and allow new investor groups to

enter infrastructure sector.

The presence of a strong debt market

leads to development of an alternative

source of funding and reduces the

pressure on banking sector for credit

growth. Developing a robust bond

market will help channel more funds

into infrastructure.

From examples seen in the United States with Municipal

bonds and Malaysia with infrastructure bonds, bond

markets have played an important role in channeling capital

into infrastructure. Unfortunately, the bond market

penetration in India is currently only 2 percent of the GDP

significantly lower than other developing countries like

China (8 percent) and Malaysia (15 percent).

The government should make continued efforts to grant

further access to the bond market for FIIs on an ongoing

basis. The present limit of $10 billion for government

securities, $15 billion for corporate bonds and $25 billion

for long-term corporate bonds (for infrastructure) should

be enhanced in order to ensure adequate liquidity is

available in the debt markets. Efforts should be made allow

institutions (including banks) to offer credit enhancement/

guarantees to bond issuances in the onshore market by

companies engaged in infrastructure projects/

infrastructure finance companies. Interest rate futures

markets should be developed. Poor and lengthy

enforcement laws relating to default proceedings, and

limited participation by domestic institutional investors

should be removed. Besides, the regulations regarding

securitization also need to be changed to make it more

attractive to the players. Therefore, it’s high time the

appropriate measures to provide thrust to the debt market,

which would be a significant step to boost infrastructure

investments in future.

Public-Private Partnerships (PPPs)

Indian Government’s Approach

Fostering Infrastructure Development

Develop Robust Debt Market

22


International experience suggests that domestic

institutional investors play a key role in making the markets

more resilient, while participation by foreign players makes

the market more liquid. In several Latin American

countries- Chile and Mexico, the growth of domestic

pension funds and insurance companies played an

important role. There is a need to liberalise investment

guidelines for insurance companies and provident and

pension funds, as well as the sectoral, single party and

group exposure limits of banks and insurance companies so

they can invest in or lend to high quality infrastructure

Special Purpose Vehicles (SPVs).

The New Pension System (NPS), which was expanded to

include unorganized sector workers in 2009 has enormous

potential to mobilize long-term savings, but is still in its

infancy. The proposed Insurance Bill amendment, which

proposes raising foreign ownership limit in insurance

companies from 26 to 49 per cent, should help attract large

foreign players into the market. Also further flexibility in

investment norms could help in enlargement of the

support base for equity and bond market. While the

Government has recognized the importance of the issue,

the pace of reforms and establishment of an institutional

framework has been slow in comparison to what has been

achieved by competing economies. India’s savings rate

stands at around 36 percent and in order to meet huge

magnum of investments, efficient channelizing of the

relatively high domestic savings would be required.

Apart from institutional funds,

infrastructure projects today

also use external commercial

borrowings (ECBs) to raise

resources. But there is a cap on

the amount of ECBs that can be

raised currently. In a recent move, the government of India

(GoI) has raised the cumulative ECB cap by $ 10 billion to

$ 30 billion. With demand for funds far exceeding supply,

there needs to be further hike in the limits of borrowing.

Hybrid funding instruments such as Convertible

Debentures, FCCBs, warrants etc, have recently witnessed

a number of regulatory changes. There is a need to widen

the net further and look for more creative solutions for

funding.

Government should encourage Banks and specialised

Infrastructure NBFCs to raise long-term infrastructure

bonds free of Statutory Liquidity ratio (SLR) and Cash

Reserve Ratio (CRR) requirements for a longer term period

(10 to 20 years), specifically for infrastructure.

Although it will be important to resolve financial issues,

there is a need to attend to non-financial concerns as well,

in order to encourage timely and long-term investments in

infrastructure. The most pressing non-financial concerns

include - simplifying project clearance mechanisms,

implementing projects on time, and strengthening the

contractual framework. Allaying these concerns will reduce

the risk and increase the comfort level of financers.

With a $ 1 trillion investments expected over the XIIth

Plan period, there is a need for a Regulator. The

government could establish a distinct regulator to address

the concerns of the infrastructure industry.

India has a long way to

go given the lack of

adequate infrastructure

across cities, towns and

rural areas. The

potential solutions

would help enhance

timely flow of funds to support the debt requirements of

infrastructure projects. Lot of opportunities exists for both

domestic and international players to tap. The policy

actions taken by the government towards infrastructure

sector would determine the fate of India’s growth over the

next few decades.

Liberalise Investment Guidelines for

Domestic Institutional Investors (DIIs)

Regulator for Infrastructure Sector

ECB Source of Financing

Infrastructure Focus Bonds

Simplifying Project Clearance Mechanism

Conclusion

By Smruti Ashar, MMS 2010-2012

23


Base Rate (9.25% - 10%)

Savings Bank Rate (4%)

Deposit Rate (8.25% - 9.10%)

Bank Rate (6%)

Repo Rate (7.50%)

Reverse Repo Rate (6.50%)

Lending / Deposit Rates

Policy Rates

Macr - O - nomics Category/ Index Open High Low

Current Value

Previous Close

Broad

SENSEX 18,694.19 18,936.43 18,513.22 18,561.92 18,618.20

MIDCAP 7,014.77 7,053.88 6,995.45 7,006.75 7,014.58

SMLCAP 8,359.93 8,403.04 8,354.11 8,363.22 8,356.39

BSE-100 9,803.17 9,877.10 9,718.41 9,740.64 9,767.42

BSE-200 2,318.19 2,336.40 2,302.55 2,307.37 2,313.23

BSE-500 7,303.53 7,345.21 7,247.69 7,261.52 7,277.46

Sectoral

IT 5,867.22 5,924.55 5,837.91 5,856.64 5,835.19

POWER 2,599.58 2,616.37 2,586.33 2,597.20 2,596.17

TECk 3,587.93 3,615.64 3,563.33 3,570.90 3,570.11

CG 13,778.50 13,843.26 13,674.49 13,739.69 13,738.37

OIL&GAS 9,211.39 9,211.39 9,097.19 9,121.12 9,130.46

HC 6,550.79 6,566.20 6,503.56 6,518.25 6,532.54

CD 6,902.34 6,946.38 6,869.35 6,886.48 6,902.34

BANKEX 12,910.58 13,465.21 12,699.61 12,846.94 12,879.34

FMCG 4,068.40 4,079.99 4,034.79 4,039.31 4,056.41

PSU 8,644.81 8,658.03 8,530.51 8,541.96 8,587.43

REALTY 2,208.93 2,239.44 2,174.64 2,186.65 2,198.46

AUTO 9,034.39 9,064.82 8,949.56 8,993.51 9,047.06

METAL 14,733.00 14,885.81 14,574.29 14,610.04 14,735.26 (Source: Reuters & ET as on 17th July 2011)

Currency

Commodities

US Markets European Markets Asian Markets

24


-30

-20

-10

0

10

20

30

40

50G

row

th R

ate

Export Growth

Import Growth

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Growth (%) 10.30 9.70 12.20 9.70 4.40 8.00 8.10

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

External Balances Indicators (1991-2011)

Index of Industrial Production (IIP) (2004-2011)

GDP Calculations on Purchasing Power Parity Basis International Monetary Fund (IMF) (In USD Billions)

25


The global pharmaceutical market is undergoing rapid

transformation. As blockbuster drugs come off patent, there

are fewer new products in the pipeline to replace them. This is

due to declining R&D productivity and rising regulatory costs.

Global Pharma multinational corporations are looking at new

growth drivers such as the Indian domestic market to

capitalise on the growing opportunity. Emerging markets will

be the next major growth drivers for the global Pharma

industry, with more than 40% of incremental growth in the

industry coming from emerging economies in the next

decade.

India’s domestic Pharma market valued at approximately

US$12 billion in 2010 showed a strong growth of 21.

the twelve months ending September 2010.

market is estimated to touch US$20 billion by 2015, making

India an attractive destination for clinical trials for global

giants.

(Source: McKinsey)

Sectoral View

Indian Pharma Sector

Overview

Top 15 Pharmaceuticals Markets, 2015 (US$ Billions)

The global pharmaceutical market is undergoing rapid

transformation. As blockbuster drugs come off patent, there

are fewer new products in the pipeline to replace them. This is

o declining R&D productivity and rising regulatory costs.

Global Pharma multinational corporations are looking at new

growth drivers such as the Indian domestic market to

Emerging markets will

drivers for the global Pharma

industry, with more than 40% of incremental growth in the

industry coming from emerging economies in the next

valued at approximately

showed a strong growth of 21.3% for

the twelve months ending September 2010. The domestic

20 billion by 2015, making

India an attractive destination for clinical trials for global

One of the reasons behind this expected

India’s pharmaceutical industry has a favorable macro

environment.

The Indian economy has rebounded from the global

economic downturn, with real gross domestic product (GDP)

growth reaching 9.66% in 2010.

The Indian middle class is also expanding rapidly, with

affordability of medicines increasing, and an increased

percentage of disposable income being spent on healthcare.

The government has made public healthcare one of its top

priorities by launching policies and programmes that are

aimed at making healthcare more affordable and accessible,

especially in rural markets.

The industry is witnessing trends such as acquisitions,

increased investments, deeper penetration into tier I to tier VI

and rural markets, growth in insurance coverage and

innovation in healthcare delivery. Taken together, these trends

are leading to increased affordability of services to patients

and access to quality medical care.

(US$ Billions) Indian Pharma Sector’s SWOT Analysis

Arthneeti 2011

One of the reasons behind this expected growth rate is that

India’s pharmaceutical industry has a favorable macro

The Indian economy has rebounded from the global

economic downturn, with real gross domestic product (GDP)

e class is also expanding rapidly, with

affordability of medicines increasing, and an increased

percentage of disposable income being spent on healthcare.

The government has made public healthcare one of its top

es and programmes that are

aimed at making healthcare more affordable and accessible,

The industry is witnessing trends such as acquisitions,

increased investments, deeper penetration into tier I to tier VI

rowth in insurance coverage and

innovation in healthcare delivery. Taken together, these trends

are leading to increased affordability of services to patients

and access to quality medical care.

Indian Pharma Sector’s SWOT Analysis

26


At the moment, approximately 90% of India’s pharmaceutical

market is made up of branded generics. This segment will

grow at a CAGR of 15% - 20% for the next five years.

Generic generics’ and patented products’ contributions to the

market as a whole is currently very low. By 2020 though,

patented drug sales are expected to increase, owing to an

improvement in the implementation of patent laws and

spread of health insurance. The OTC segment is expected to

be a strong growth driver for the industry.

The Indian Pharma market is largely dominated by branded

generics. This segment contributes around 90% of total sales,

and represents one of the key strengths of the market,

encompassing the OTC segment as well. Only about 10% of

the market constitutes commodity generics sold through

institutional sales and innovator products. The branded

generics segment is expected to grow at a CAGR of 15% -

20% for the next decade.

“The prescription products that are either novel dosage forms

of off-patent products produced by a manufacturer that is not

the originator of the molecule or a molecule copy of an off-

patent product with a trade name” .In India, any non-

patented molecule with a brand name other than the

innovator’s name is termed as a branded generic. In the

global context, substitution – when an innovator product goes

off-patent - is the key driver for generics. In India, it’s about

driving a difference using the core equity of a brand, over a

competitor’s product.

A generic drug is the bio-equivalent version of a brand name

drug. Currently, the market share of generic generics is very

low. The reasons being:

1. Lack of generic generics regulations and guidelines for the

establishment of bio-equivalence, for example the

Abbreviated New Drug Application (ANDA) guidelines

that exist in the U.S.

2. Doctor comfort derived from prescribing medications on

the basis of brand name.

Generic programme in India is the government run ‘Jan

Aushadi’. This programme provides no-name generic drugs at

subsidized prices in 24-hour pharmacies that are located all

over the country.

‘OTC Drugs’ means drugs legally allowed to be sold ‘Over the

Counter’ by pharmacists, i.e. without the prescription of a

Registered Medical Practitioner. Although the phrase ‘OTC’

has no legal recognition in India, all the drugs not included in

the list of ‘prescription-only drugs’ are considered to be

nonprescription drugs (or OTC drugs).

The OTC segment has been identified as one of the potential

growth drivers for the Indian Pharma industry, as the sale of

OTC drugs in India has been increasing over the years.

Key Growth Drivers For OTC Segment

� Wider Distribution Channel: Companies can sell their

products outside of pharmacies, for example in post-offices

and department stores.

� Direct To Customer Advertisements: The government

allows public advertising of these products, giving drug

makers greater freedom to use more creative methods while

marketing their products.

� Increased Consumer Awareness: There is an increased

reliance on self-medication as public awareness of common

ailments goes up.

� Low Price Controls: Other than acetylsalicylic acid and

ephedrine and its salts, very few of the OTC active ingredients

fall under the current DPCO price controls.

The market size for patented drugs as of today is very small.

Only about 1-2% of the market is made up of patented drugs,

which are being sold by multinational innovators. There are

multiple Indian companies that have drugs in the pipeline,

with a greater focus on R&D, but estimates suggest that it

would be at least 7 to 10 years before these begin to have a

serious impact on the industry. Industry experts believe that

the current size of the patented drug market is estimated at

US$120-130 million. Due to weak patent laws in the past, and

multiple, cheap generic versions of drugs present in the

market, multinational players were hesitant to introduce their

patented products. In the future, with growing affordability,

Indian Pharma Market Segmentation

Branded Generics

Over The Counter (OTC) Products

Generic Generics

Patented Products

27


The global pharmaceutical industry is changing. The

pharmaceutical business model is witnessing a paradigm shift

from a fully integrated company structure towards a future

where companies use a wide range of outsourcing,

partnership initiatives and other contractual and relationship

arrangements to create networks of collaboration and

discovery. This evolution in Pharma business models has

enormous repercussions for the Indian pharmaceutical sector,

and related sectors like biotechnology. Indian companies now

have an unprecedented opportunity to partner with global

players across a wide range of activities, from contract

manufacturing and

licensing arrangements,

to franchising and

Joint venture

opportunities.

Export-oriented

business CRAMS:

Outsourcing has been

the traditional method

of doing business with

Indian companies.

Historically, the focus

for the pharmaceutical

industry has been on

lower value adds

manufacturing activities

such as APIs and

generics, and India

continues to play an

important role in these

segments. In recent

years, India’s Pharma

companies have also

begun to move up the value chain. Foreign companies are

now increasingly tapping India’s growing research skills in

addition to its manufacturing skills.

Licensing: Multinationals are also striking licensing

agreements to get a share of the Indian pie. Most

developmental costs are borne by the licensor in licensing

arrangements, resulting in the licensee paying a high unit cost

and having little control over manufacture. However,

licensing can be effectively used to establish a common

platform in order to gain rapid in-market acceptance and

create a complete therapy range through arrangements such as

cross-licensing.

Franchising: India’s retailing industry also offers huge

opportunities for foreign companies to either set up their own

retail franchisee or enter into collaboration with existing

players. Franchising arrangements can leverage on purchasing

power from the franchisor buying in large quantities and

passing down savings to franchisees. Continued business

support from the franchisor such as technology, products,

training and marketing is an added advantage.

Joint Ventures: Joint ventures (JVs) are becoming a more

prevalent option for companies looking to capitalise on the

opportunities presented

in India. Foreign

companies are

increasingly looking at

local partners to work

with in order to increase

their presence in India.

Domestic partners bring

together extensive local

expertise due to their

familiarity with the

business environment,

knowledge support and

the networked

capabilities of other

local pharmaceutical

companies. These

advantages, along with

low production costs,

skilled labor and faster

drug development can

be productively utilised

by western

pharmaceutical

companies coming into India.

Partially or Wholly owned subsidiaries: Some

multinational companies have also increased their stake in

their Indian subsidiaries to take advantage of the India

opportunity. Unlike in some other sectors, fully owned

subsidiaries in the pharmaceutical industry offer little risk in

terms of sharing critical data and competitive advantage, as

most are subject to strong control by the parent company.

Pharmaceutical companies willing to have wholly owned

operations in India can gain value from being present across

the value chain, from drug discovery to clinical trials through

to manufacturing. Other benefits may include tax advantages.

Business Models

28


� The Central Drug Standard Control Organisation

(CDSCO), which falls under the purview of the Ministry

of Health and Family Welfare, is the primary regulatory

body in India.

� The Drug Controller General of India (DCGI) presides

over the CDSCO and is in charge of the approval of

licenses for drugs at both the central and state levels.

� In January 2005, India introduced the product patent

regime in accordance with the TRIPS agreement with an

amendment to the Indian Patents Act. Further, in 2008,

the introduction of the Drugs and Cosmetics

(Amendment) Act 2008 put forth stringent penalties and

imprisonment

� Intellectual Property Rights (IPR), patented product

launches should increase 2008, the introduction of the

Drugs and Cosmetics (Amendment) Act 2008 put forth

stringent penalties and imprisonment.

� FDI of up to 100 per cent in drugs and pharmaceuticals is

permitted through the automatic route. For licensable

drugs and pharmaceuticals manufactured by recombinant

DNA technology and specific cell/tissue-targeted

formulations, FDI requires prior government approval.

� The GoI plans to set up a pharmacopeia commission to

support ayurveda, yoga and naturopathy, unani,

siddhaand homoeopathy (AYUSH) through guidelines

laid down in the review of the Eleventh Plan.

� As stated on the National Pharmaceutical Pricing Authority

(NPPA) website, the NPPA is responsible for fixing and

controlling the prices of 76 bulk drugs under the Essential

Commodities Act.

� The Department of Pharmaceuticals was formed on July 2,

2008, under the Ministry of Chemicals and Fertilisers with

the objective of focusing on the development of the

pharmaceutical sector in the country and to regulate

various activities related to the pricing and availability of

medicines at affordable prices, R&D, the protection of

intellectual property (IP) rights and international

commitments related to the pharmaceutical sector.

� The GoI has been actively supporting the industry with

various measures. It is embarking on a major multi-billion

dollar initiative, with 50 per cent public funding through a

PPP model, to harness India’s innovation capability.

Policy & Regulatory Framework

29


With the new patent regulations the industry expects to see a

major structural shift with the entry of foreign

pharmaceutical manufacturers. There is a high level of market

fragmentation. As per ORG IMS Rankings, the top 4

companies Cipla, GSK Pharma, Abbott Healthcare (erstwhile

division of Piramal Healthcare) and Sun Pharma have

maintained their respective positions over the last four years.

Unlisted players like Mankind Pharma and Alkem have

consolidated their last year's positions at No 5 and No. 6,

respectively. Lupin, which is at No. 7 for the second

consecutive year, was earlier at 6th and 5th positions in 2008

and 2009, respectively. Abbott and Zydus Cadila are again

shuttling between 8th and 9th positions. Ahmedabad-based

Intas, another unlisted company, has made its entry into the

league of top ten companies.

Rank Company Year ended May 2011

Rank Company Year ended May 2011

1 Cipla 11.3 6 Alkem 17.6

2 GSK Pharma

10 7 Lupin 12.5

3 Abbott Healthcare

7.4 8 Abbott 24.6

4 Sun Pharma

15.5 9 Zydus Cadila

15.3

5 Mankind 27.2 10 Intas 30.2

Industry Consolidation

Merger activity has been intense within the industry in the

last decade. Analysts believe that three firms;

GlaxoSmithKline, Bristol-Myers Squibb and Merck are likely

candidates to be directly involved in the next round of

industry consolidation.

Science and Innovation

Over the last decade the knowledge base of the

pharmaceutical sciences has changed dramatically and

continues to change rapidly. As new technologies and bodies

of scientific knowledge emerge, whole new set of

opportunities and threats are being introduced. Over the last

decade, we have seen this happen as companies that were not

very effective in research and new product development were

acquired.

Increased Competition

The industry has seen a legion of new market entrants,

increased competition among key players and industry

consolidation. Competitive advantage within the industry is

being constantly redefined and to maintain their presence,

key industry players are being forced to revamp their

organisational structure, overcome huge barriers in R&D and

clinical trials.

Changing Consumer Profile

Consumers are now better informed and there are

expectations on the industry to show that their products

deliver better health and greater economic value. In the past

decades governments were either the sole or major

purchasers but the current trend shows that healthcare

industry is now driven by insurance companies and

individuals. The increasing price sensitivity of the consumer

and financial muscle of health insurance companies is forcing

firms in the industry to cut product prices thereby reducing

margins.

Ageing Populations

Due to ageing global populations there has been a rise in the

demand for medicines all over the world and because of

increased investment in research and development cure for

diseases which were considered non curable earlier have been

invented. This, in addition to the market requirement for the

industry to improve current medicines and lower product

cost

Changing Geo-political Environment

The pharmaceutical industry is facing increasing political

pressure to reduce prices and control costs, particularly in

developing economies, government are increasing pressure

on pharmaceutical firms to act on social interest and this is

likely to intensify in the future.

Decreasing Consumer Influence

Medical doctors, general practitioners and pharmacists usually

act as agents of the final consumer and they are largely

responsible for the consumer’s purchasing decisions. As a

result of this pharmaceutical companies’ direct a sizeable

proportion of their marketing efforts at these agents. But

with the advent of internet consumers have easier access to

medical information and treatments, which is changing the

scenario for Branded drugs.

Key Players In Indian Market

Strategic Issues Facing The Industry

Rahul Mahajan, PGDBM 2010-2012 Pratik Mittal, PGDBM 2010-2012

30


Solvency Margin is the extra capital that an insurance company is required to hold. It is the minimum excess on an

insurer’s assets over its liabilities. Like capital adequacy ratio

in banks, solvency margin is a part of the prudential norms

and indicates how solvent the company is.

Reduce the risk that an insurer would be unable to meet

claims & reduce the losses suffered by policyholders in the

event that a firm is unable to meet all claims fully and

promote confidence in the financial stability of the insurance

sector

Solvency margin requirements have been in place since the

1970s and it was acknowledged in the third generation

Insurance Directives adopted in the 1990s. The Directives

required the Commission to conduct a review of the

solvency requirements and following this review, a limited

reform was agreed by the European Parliament and the

Council in 2002. This reform is known as Solvency I.

For better regulation and reporting, Solvency II was

proposed. The proposed Solvency II framework has 3 main

pillars.

Pillar 1 consists of the quantitative requirements (for

example, the amount of capital an insurer should hold).

Pillar 2 sets out requirements for the governance and risk

management of insurers, as well as for the effective

supervision of insurers.

Pillar 3 focuses on disclosure and transparency

requirements.

Solvency II is the new regime for all insurers and reinsurers

in the European Union. It will come into effect from

December 31, 2012. Solvency II aims to implement solvency

requirements that they feel will better reflect all kinds of risks

that companies face. It aims to ensure understanding by

insurers of the inherent

business risks in the industry

and the allocation of sufficient

capital to cover them.

Globally “Solvency II” is

replacing the minimum

requirement, which is similar to the Basel II capital adequacy

requirements for banks. It is often called shareholders’ funds

[in the UK] or policyholders’ surplus [in the USA].

A parameter called the “Solvency Ratios” means the ratio of

the amount of Available Solvency Margin to the amount of

Required Solvency Margin.

Available Solvency Margin: Denotes the items such as

capital/funds, various reserves (Includes price fluctuation

reserves and catastrophe reserves) and a portion of

unrealized profits obtained from real estate and stocks.

Required Solvency Margin: Refers to the risks like

Underwriting Risks (Risk of miscalculating premiums and

miscalculate technical provisions), Risks on the expected

interest rates (It is considered to be an important factor

contributing to the insolvency of an insurance company) and

Risks related to asset management (Growth risk arising out

of exercise growth not matched by sufficient resources or

due to wrong selections or wrong pricing of products).

Indian insurers are following solvency I norms. As per

Insurance Regulatory and Development Authority (IRDA)

norms, both Life and Non-Life insurance companies are

required to maintain 150% solvency margin.

The IRDA is not too keen on introducing solvency II norms

for covering companies in India although insurers the world

over are moving over to the new regime. One of the major

reasons cited is the absence of required statistical database to

adopt solvency II norms that have been devised by the

European community.

Every insurer shall determine the required solvency margin,

the available solvency margin, and the solvency ratio in Form

K as specified under Insurance Regulatory and Development

Authority (Actuarial Report and Abstract), Regulations,

2000.

Lessons On Finance

Solvency Solvency Solvency Solvency NormsNormsNormsNorms

Major Purpose

Solvency Ratios

Solvency II

Solvency I

Solvency Norms & India

31


Mr. Kamath has a degree in mechanical engineering and

did his management studies at the Indian Institute of

Management, Ahmedabad.

Mr. Kamath started his career with ICICI (Industrial

Credit and Investment Corporation of India). He has

generally been credited with expanding ICICI's

businesses to evolve it into a technology-enabled

financial organisation catering to the financial needs of

corporate and retail customers.

In 1988, he moved to the Asian Development Bank and

spent several years in South-East Asia. He was the ADB

representative on the Boards of several companies.

In May 1996, Kamath joined ICICI as its Managing

Director and Chief Executive Officer.

Mr. Kamath initiated a process of a series of acquisitions

of non-banking finance companies in 1996-98, and led

the way to the formation of ICICI Bank.

Under his leadership, the ICICI Group transformed itself

into a diversified, technology-driven financial services

group that has leadership positions across banking,

insurance and asset management in India, and an

international presence. He retired as Managing Director

& CEO in April 2009, and since then has been the Non-

Executive Chairman.

Mr. Kamath is a Member of the Governing Board on

various educational institutions including the Indian

Institute of Management Ahmedabad & Indian School

of Business. Mr. Kamath is also a Member of the

National Council of

Confederation of Indian Industry (CII).

He is an independent Director on the Board of Directors

of Infosys Technologies Limited, Lupin Limited, The

Great Eastern Shipping Company Limited and

Schlumberger Limited. He has been a co-chair of the

World Economic Forum's Annual Meeting in Davos and

is a member of the Board of the Institute of

International Finance.

Mr. Kamath was announced as the next Chairman of

Infosys Limited from 21st August 2011 onwards.

Most e-savvy CEO amongst Asian banks - The Asian

Banker Journal of Singapore

Finance Man of the Year award - The Mumbai

Management Association

Best CEO for Innovative HR practices - World HRD

Congress

Asian Business Leader of the Year - Asian Business

Leader Award 2001 (CNBC Asia)

Outstanding Business Leader of the Year - CNBC-TV18,

2006

Businessman of the Year - Business India, 2005

Business Leader Award of the Year - The Economic

Times, 2007

Businessman of the Year - Forbes Asia

Padma Bhushan award from the Indian government -

2008

One of the most successful & admired

bankers in India. He is the Non-Executive

Chairman of ICICI Bank, the largest

private bank in India.

Mr. Kundapur Vaman Kamath

Award & Accolades

32


Who coined the word blue chip and where does the

word originate from?

What is underwear indicator and name the person

associated with it?

Connect the following:

Which is the only state which has three stock

exchanges?

The Company’s stock exchange ticker symbol is

PKX and it has signed a pact with an Indian state,

which makes the deal the single largest FDI in India.

Name the state and the company and its origin?

What are Max Keiser and Michael Burns known for?

(Think about Hollywood)

Connect the following:

Who is a Dellionaire?

Which company is he associated with?

Connect the following personalities:

Identify the person and the company he is associated

with?

Finance - Q ?

Mail answers @ [email protected]

&

Win attractive prizes worth Rs. 1000

33


aBOUT uS

Sydenham Institute of Management Studies research & Entrepreneurship

Education (SIMSREE) was founded in the year 1983 by Government of

Maharashtra. Since then, SIMSREE has been continuously ranked as one of the

Premier Institutes of our country, and it attracts the finest management minds

from India. SIMSREE has been consistently being ranked among Top 20

Business Schools in India. CRISIL has recently rated SIMSREE with A*** at state

level (Maharashtra) and A** at National level.

SFF is a student body that strives to assist the students in the development of

financial acumen through collective effort. The Forum aims to bridge the gap

between students and corporate leaders through various Interactive Sessions on a

regular basis. Various Programs & Events form part of our Forums initiatives to

provide the students with a multitude of opportunities.

1. Muralidhar Rao Gopidalai 2. Rahul Mahajan 3. Sangeet Srichandan 4. Vishal Bhanushali 5. Alok Kumar 6. Pratik Mittal

SIMSREE

B Road, Churchgate

Mumbai 400 020, India

[email protected]

Contact Us

Our Team

SIMSREE Finance Forum (SFF)

SIMSREE

Sources: McKinsey Quarterly, McKinsey Report (Infrastructure), Ernst

& Young Reports, PWC Report (Indian

Pharma Sector), RBI, FICCI, The

Economic Times, Reuters & Wikipedia

Date post:	22-Mar-2016
Category:	Documents
Upload:	zigu-mba
View:	213 times
Download:	0 times

Arthneeti June 2011 SIMSREE

Documents