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INDIAS GROWTH
STORY AND ITSDRIVERS
BY:Bhola Singh(2011054)
Dushyant Chaturvedi(201170)Esheeta Ghosh (201171)Gavaksh Mangla(2011080)Anurag Vinayak(2011092)
Abdullah(2011244)
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The Indian
Economy
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India has a very mixed economy, ranging very old-
fashioned agricultural techniques to the state-of-the-art Information Technology Industry that hastransformed Bangalore into the IT capital of Asia.
Recently India has enjoyed massive economic
growth, people are flocking to invest in India andour people are growing steadily richer.
India is the second fastest growing major economy
with a 7% to 9% increase in GDP per year. India isalready the fourth largest economy in the world.
India has seen a huge amount of foreign directinvestment in the country, totaling 178 billion
dollars in 2010 and is said to be one of the
THE GROWTH STORY
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Contd..
Indian companies have gone on a buyingrampage, with Tata Steel acquiring Corus, Mittalbuying Arcelor and Tata buying Jaguar and LandRover from Ford.
Every year Indias middle class is increased by40,000,000 new members which shows that thewealth is truly entering society
The Bombay Stock Exchanges value has beenconsistently rising, currently worth 54 lakhcrore, the largest in South East Asia.
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INDIAS GDP GROWTH
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INDIAS GDP GROWTH
RATE
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GDP GROWTH RATE
SINCE 2004
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INDIAS PER-CAPITA
INCOME
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GROWTH
manufacturing
16%
trade
14%
communication
11%
agriculture(crop)
10%
construction
10%
real
estate,ownershipof
dwellings &business
services
8%
banking&insurance
8%
other services
7%
transport byother
means
6%
Rest
10%
ContributiontoGrowth(2002 -3to2007 -8)
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GROWTH DRIVERS
Agriculture
Manufacturing
Communication
Trade
Banking and Insurance
TransportConstruction
Real Estate
Other Services
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RETAIL AND SUPPLY
CHAIN
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RETAIL GROWTH IN INDIA
India is fifth most attractive emerging retailmarket: a potential goldmine.
Indian retail is largest among all
industries(450 billion $).10% - Indias GDP.
Growth rate 20-25%
8% - employment
Potentiality to grow 637 billion $ by 2015.
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RETAIL FORMATS IN INDIA
Malls
Specialty stores
Discount storesDepartment stores
Hypermarts / Supermarts
Convenience storesMulti brand outlets
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RETAIL FORMATS CONTD.
Types of Retailers
Small/
Medium
SizeRetailer
LargescaleRetailers
Consumer Co-opStores
DirectMktg/Channel lessRetailing
1.MobileRetailers,Hawkers.
2.Convenience
stores.
3.Specialty Stores
1.Super Market.
2.Departmental Stores.
3.Discount stores.
4.ManufacturersShowroom
5.Super stores.
(CombinationStores,Hypermarkets)
1.Co-op stores.
2 .Sahakari Bhandars.
1.In home Selling.
2.Telemarketing.
3.Mail Order sale.
4.VendingMachine
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GROWTH OF RETAIL IN INDIA
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INDUSTRY REVOLUTION
Retailing in India can be traced toemergence of the neighborhood "Kirana "stores catering to the convenience of the
consumers.Era of government support for rural retail:
Indigenous franchise model of store chainsrun by Khadi & Village Industries
Commission1980s experienced slow change as India
began to open up economy.
Textiles sector with companies like
Bombay Dyeing, Raymond's, S Kumar'sand Grasim first saw the emer ence of
GROWTH OF RETAIL IN INDIACONTD
GROWTH OF RETAIL IN INDIA
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1990s saw a fresh wave of entrants with a shiftfrom Manufactures to Pure Retailers.
For e.g. Food World, Subhiksha and Nilgiris in
food and FMCG; Planet M and Music World inmusic; Crossword and Fountainhead in books.
Post 1995 onwards saw an emergence ofshopping centers.
Targeted to provide a complete destinationexperience for all segments of society
Emergence of hyper and super markets tryingto provide customer with 3 Vs - Value, Variety
and Volume.
GROWTH OF RETAIL IN INDIA
CONTD
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GROWTH OF RETAIL IN INDIA CONTD
FACTORS FOR GROWTH OF ORGANISED RETAIL
SECTOR
q Growth of Indian Economy: Second fastest
q Emerging opportunities in service sector
Capital no longer a constraint easy loans
Increase in the young working population
qIncreasing working women population
q Hefty pay pockets
q Nuclear families in urban areas
Changing Cultural Habits
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CONTD ..,
Multiple drivers leading to a consumption boom:
Favorable demographics
Growth in income
Increasing population of working women
Raising aspirations: Value added goods sales
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CONTD..,
Rural markets emerging as a hugeopportunity for retailersreflected in theshare of the rural market across most
categories of consumption
ITC is experimenting with retailing through its e-
Choupal and Choupal Sagar rural hypermarkets.
HLL is using its Project Shakti initiativeleveraging women self-help groups to explore
the rural market.
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CHANGING SCENERIO OF SUPPLYCHAIN
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AGRICULTURE
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Agriculture (also called farming or husbandry) is the cultivation ofanimals, plants, fungi and other life forms for food, fiber, and otherproducts used to sustain life.
Share in GDP2007-08 was 16.4%2008-09 was 15.7%2009-10 was 14.6%
http://en.wikipedia.org/wiki/Animalshttp://en.wikipedia.org/wiki/Planthttp://en.wikipedia.org/wiki/Fungihttp://en.wikipedia.org/wiki/Foodhttp://en.wikipedia.org/wiki/Fiberhttp://en.wikipedia.org/wiki/Fiberhttp://en.wikipedia.org/wiki/Foodhttp://en.wikipedia.org/wiki/Fungihttp://en.wikipedia.org/wiki/Planthttp://en.wikipedia.org/wiki/Animals8/2/2019 INDIAS GROWTH STORY AND ITS DRIVERS
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Factors Affecting the AgriculturalGrowth
GROWTH OF RETAIL IN INDIA
IMPACT OF RETAIL ON AGRICULTURE &AGRICULTURE.
CHANGES IN TECHNOLOGY.
India produces 235 million tones f food grain fr m 170 million hectares.
Monsoon dependent
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Agricultural front , the organisedretailers are providing farmers withinputs.
Has increased the net realisations offarmers with disintermediation formiddlemen.
IMPACTS ON AGRICULTURE AND
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To provide the cheapest & best produce,organised retail could help the Indian
farmers directly & banks indirectly in agri.Lending .
Investment into cold storage chain willresult in significant efficiency on supplychain.
IMPACTS ON AGRICULTURE ANDAGRICULTURE LENDING CONTD
IMPACTS ON AGRICULTURE AND
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Entry of retail giants leads to
-greater investment in farm technology(Bharti, Pepsi,Reliance)
-Aggregate demand for bank credit-Help bankers in credit expansion &
monitoring
Contract farming spreads very fast- Farmers to get better price
- Improves farm production through
modern techniques
IMPACTS ON AGRICULTURE ANDAGRICULTURE LENDING CONTD
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FARMER
CONSUMER
DEALERS OFSEEDS,
FERTILISERS,PESTICIDES, ETC.
Backward linkages
WHOLESALERRETAILER
Forward linkages
BANK
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STRATEGIES TO TAP THE GROWTH
OPPORTUNITIESEffective deployment of agriculture officers
with special target .
Finance entire commodity chain from farmersto retailers.
Targeting standard accounts of other banks.
Taking partnership route to drive growth inagriculture.
Thrust on investment credit.
STRATEGIES TO TAP THE GROWTH
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STRATEGIES TO TAP THE GROWTH
OPPORTUNITIES CONTD
n Innovative & need based products
n Banks need to prepare big ticket loan
n Linkage on the lines of farm to fork
n Promotion of channel credit throughcorporate customers .
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IN A NUTSHELL
qThe huge potential in Agriculture sector & lackof sufficient rural & semi urban branches inprivate sector banks, the Nationalised Banks
has huge scopes..q It is certain that the competitive battlefield of
bankers will shift in the near future.
q Let us take AGRI. LENDINGS to a higher
growth trajectory through new strategies andAfter all, the colour of money has always beengreen in India.
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MANUFACTURINGIndustry accounts for 28% of the GDP and
employ 14% of the total workforce.
The Indian industrial sector underwent
significant changes as a result of the economicreforms of 1991, which removed importrestrictions, brought in foreign competition, ledto privatization of certain public sector
industries, liberalized the FDI regime, improvedinfrastructure and led to an expansion in theproduction of fast moving consumer goods.
Textile manufacturing is the second largest
source of employment after agriculture and
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Manufacturing contributes to
79% of FDI investment27-29% of India GDP53% of Indian exportsWorld's second largest small car market
One of only three countries that makes its
own supercomputersWorld's largest producer of milk, tea and
pulses and the worlds largest livestockpopulation
Second largest producer of food includingfruits and vegetables.
Worlds largest diamond cutting and polishing
centre and the second largest jewellerymarket.
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KEY SECTORS:
Auto Industry: The Indian auto industry is aUSD 44 bn industry (Automotives
is USD 34 bn and Auto components is
USD 10 bn)
Chemicals: The size of chemical industry in
India (Petrochemicals to Paints) is USD30 bn
Electronics:The electronics industry is USD
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Food Processing: A USD 70 bn industry
growing at 9% to 12%
Gems & Jewellery: A USD 13 bn industry
(Gold growing at 15% p.a andDiamond growing at 27% p.a)
Leather: Industry size is USD 4 bn
Machine Tools: Industry Size is USD 225 mn
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Indian manufacturingis forecasted to growat 12%-14% over the
next decade andsectors like
Automotive, FoodProcessing and
Pharmaceuticals areexpected to be thegrowth drivers
Leather Jewellery
TextilesChemicals
75% ofmfg
exports
EnggGoods
Gems
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India's manufacturing output is
USD 450 bn
Indias liberalization, key policyinterventions, competition andinfrastructure build up have been keydrivers
Indias manpower advantage,indigenous technology advantagehave played a leading role inachieving domestic competitiveness
Many Indian sectors (e.g. Textiles,Glass, Automotive, Jewellery, Leather,
Agro based, Pharmaceuticals, etc)have achieved export competitiveness
Regional FTAs, FDI in select sectors,stable currency, stable economicregime have been key drivers
This interplay has
enhanced Indias
competitiveness
Indian manufacturing exports havebeen growing at a CAGR of 14% forthe last five years
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Some other growth drivers for manufacturing
Joint ventures of Indian companies withforeign companies (Maruti-Suzuki).
Education sector is growing, so it providesskilled workforce for the industry(4 to 5 lac
engineers per year)
Increased competition.
Tax break provided by the govt. in certain
areas and setting up of SEZ.Growth of banking sector has led to easy
availability of
funds.
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Telecom Sector Growth
TELECOM SECTOR
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TELECOM SECTORGROWTH DRIVERS
Growth Drivers of the Indian Telecom Market:
High Disposable Income: The growth in GDP hasresulted in increasing disposable income among theindividual population. Therefore the young Indianpopulation is increasingly investing more money invarious entertainment and communication servicesthus fuelling growth of the telecom sector.
Mobility and Connectivity: The growing need of
high mobility and staying connected is the primedriver for the entire category. This is true for peoplefrom different age groups and occupation. Thisinnate need coupled with availability of handsets
and connectivity at affordable price points hastri ered the rowth of telecom in India.
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Operators are tailoring service packages
for low-end users making mobile servicemore affordable like:
Micro Prepaid Cards: Recharge options as low as
INR 10 (USD 0.25)
Life Time Validity: All operators offer a lifetimeprepaid plan which maintains the phone numberfor life for free incoming calls if recharged every 3or 6 months
Full Value Recharge: Talk time of value equal to therecharge amount
Free In-Network Calls: Some operators have startedfree unlimited local in-network calls
Group Calls: Unlimited calls among a limited set of
people at a particular cost.
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Exponential Growth
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YearAnnual
Additions(inmillions)
Average MonthlyAdditions(in
millions)
2002 5.23 0.44
2003 17.49 1.46
2004 19.49 1.62
2005 27.86 2.32
2006 64.14 5.35
2007 85.27 7.11
2008 113.26 9.44
2009 178.25 14.85
2010 227.12 18.93
Monthly Mobile SubscriberAdditions
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Long Distance Peak TariffRates (Rs/min)
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Local Calls Tariffs (Rs/min)
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Export Trade
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Exports over the
years
LIST OF EXPORT PROMOTION
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Duty drawback scheme
Under Duty Drawback Scheme relief ofCustoms and Central Excise Duties suffered onthe inputs used in the manufacture of exportproduct is allowed to Exporters. The admissibleduty drawback amount is paid to exporters bydepositing it into their nominated bank account. Duty exemption scheme
Duty Exemption Scheme is an exportpromotion scheme and it enables import of inputsrequired for export production free of Customsduty. Advance Licences are issued under Duty
Exemption Scheme to allow import of inputs,
LIST OF EXPORT PROMOTIONSCHEMES
(GROWTH DRIVERS)
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INDUSTRYThe Indian Banking sector has been successful in
maintaining its growth trajectory due followingfactors:
low defaulter ratio
least complicated financial products regular intervention by central bank
proactive adjustment of monetary policy and socalled conventional banking culture, which helpedthe industry survive through global financialturmoil.
Macro-level drivers
favourable demographics
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INITIATIVESThe Indian government is contemplating on
enabling public sector banks to raise lots ofadditional capital without the central authoritylosing control over them. For the purpose, thegovernment is considering forming a single holding
company to unite 21 state-run banks as it wouldprovide room for innovation in capital infusion.
Moreover, to keep a check on home loan andcorporate defaulters, the Government would
introduce the Enforcement of Security Interest andRecovery of Debts Laws (Amendment) Bill, 2001,during the Winter Session of Parliament. The newBill, that could curtail lending rates for retail as well
as corporate loans, proposes amendments for nine
R d Ah d
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Annual expenditure on information technology(IT) will increase by over 50 per cent fromcurrent Rs 6,500 crore (US$ 1.33 billion) per yearto Rs 10,000 crore (US$ 2.04 billion) per annum
by Indian Banks in next couple of years. Thisinvestment would come as a part of the secondphase of technological up-gradation by bankswherein they want to deploy technologiespertaining to customer relationship management(CRM), analytics and mobility.
Indian banking industry would stand as the thirdlargest in the world by 2025 wherein its assets
size is poised to mark US$ 28,500 billion by 2025
Road Ahead
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Transport Sector
TRANSPORT SECTOR
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TRANSPORT SECTOR
ROADS: India has one of the largest road networks in the world,
aggregating to about 33 lakh kilometers at present. Though the NationalHighways, which is the responsibility of Central Government, has length ofroads, carries over 40 percent of the total traffic across the length andbreadth of the country.
Pradhan Mantri Gram Sadak Yojana boosted rural economy bylinking villages to cities.
RAILWAYS: Indian Railways has grown into a vast network of 6,909stations spread over a route length of 63,327 kilometers with a
fleet of 8,153 locomotives, 45,350 passengers service vehicles,
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Shipping: Shipping plays an important role inthe transport sector of India's economy.Approximately, 90 per cent of the country'strade by volume (70 per cent in terms ofvalue) is moved by sea. India has the largestmerchant shipping fleet among thedeveloping countries and ranks 20th amongst
the countries with the largest cargo carryingfleet with 8.83 million GT as on 01.06.2008and the average of the fleet being 18 years.
Civil Aviation: Under the ministry of civilaviation. The number of airports in India is124.There is tough competition among thedomestic airlines and number of international
players running the flights to major business
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R EA L
E STAT E
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Growth DriversThe Indian real estate industry is expected to be valued at US$ 180 billion (INR
8,640 billion) by 2020.
The real estate sector inIndia is on arapid growth trajectory. In ashort span
of time, the industry hasevolved from a highlyfragmented andunorganised market into a
semi-organised market, witha large number of listedcompanies.
India has a youngpopulation.
Urbanisation isincreasingsteadily.
Growth in theservices sector
telecom, financialservices and IT &ITeS has beensignificant.
Household income isrising.
Highgrowthprojections
Multiplegrowth
drivers
Rapidevolution
of thesectorAdvantageIndia
There is a significantshortage of low-
cost and affordable housingin the country. TheGovernment of India (GoI)has announced low interest
rates for home loans up toINR 2 million. Meanwhile,several developers,attracted by the opportunityin this segment, havelaunched affordable housingprojects.
Demand for
affordablehousi
ng
Increased
foreign
investments
FDI of up to 100 percent is
allowed under theautomatic route inmost asset classes.
Well-
definedregulatory
framework
The GoI has well-drafted national- and state-level regulations for theIndian real estate sector.Some old laws are either being amended or repealed to introducereforms to the industry.
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Marketoverview
The real estate sector is a key growth driver of the countrys economy.Thecontribution of the residential segment alone to Indias GDP is around 5 to 6 per cent.
The real estate sector is one of the highest FDI-attracting sectors in India, withrecorded FDI inflow of more than US$ 8.9 billion (INR 403 billion) between April2000 and September 2010.
Favourable demographics (a young population and increasing urbanisation)and growth in the services
sector, especially the IT & ITeS sector, have primarily driven growth in the realestate industry.
DLF, Unitech, Ansal Properties, K. Raheja Corporation and Parsvnath Developersare among the major
Indian players in the sector.
In the last decade, FDI in real estate has increased due to the growing interest offoreign players in theIndian market. Over the last decade, many international players, including
developers such as Emaar,Ascendas, Keppel Land,Tishman Speyer and Nakheel Group, and investors suchas Morgan Stanley, Och-Ziff Capital, Citigroup, Goldman Sachs, JP Morgan,Warburg Pincus and DeutscheBank, have entered theIndian real estate market.
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Market
segments
In recent years, the industry has evolved from a highly fragmented andunorganised market into a semi- organised market.
The sector can be divided into residential, commercial, retail andhospitality asset classes.
Residentialspace Commercial(office)space
Specialeconomiczones(SEZs)
HospitalityspaceRetailspace
Realestatesector
row r vers n ar ous
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row r vers n ar ousSegmentsResidential Space
Commercial Space
Rapid urbanisation the urban population is estimated to reach 590 million by2030.
Decreasing household size growth in the number of nuclear families is leading toan
to be home to 91 million middle-class households by 2030.
The growing working age population in the 1560 age group is expected to reach
918 The demand for affordable housing is growing, which is a priority segment for boththe
Rapid urbanisation the urban population is estimated to reach 590 million by2030.
Decreasing household size growth in the number of nuclear families is leading toan
to be home to 91 million middle-class households by 2030. The growing working age population in the 1560 age group is expected to reach918
The demand for affordable housing is growing, which is a priority segment for boththe
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Various Segments
Contd..Retail Space
Hospitality Space
Consumerism is increasing on the back of rising disposable income.
Organised retailing has grown.
The entry of international retailers has boosted industry growth.
Expansion by domestic retailers has also given impetus to the industry.
The hospitality segment has witnessed robust demand growth, primarily due tostrong growth in
India is becoming increasingly popular as a medical tourism destination.
International sporting events such as the Cricket World Cup and Formula 1 in 2011
are expected to According to a research by the World Travel & Tourism Council, travel and tourismdemand in India is
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GrowthdriversDemand pullfactors Supply pushfactors
GrowingIndian real
estate
Impact
Impact
Increasing occupier base.
Significant rise indemand for
office/industrialspace.Demand for new avenuesfor
entertainment, leisure andshopping.Creation of demand for newhousing.
Entry of several domestic andforeign players;
increasing competition andconsumer
affordability.Easy access to project-financingoptions.Increased developers risk appetiteand large-
scale development.Improved quality of real estateassets.Development of new urban areasand effective
utilisation of prime land parcels inlarge cities.
Policy and regulatory reforms (100per cent
FDI relaxation).
Positive outlook of global investors.
Fiscal incentives to developers.
Simplification of urban developmentguidelines.
Infrastructure support anddevelopment
initiatives from the GoI.
Robust and sustainedmacroeconomic
growth.Upsurge in industrial andbusiness
activity, especially in new
economysectors.Favourable demographicparameters.Significant rise inconsumerism.Rapid urbanisation.
Availability of a range offinancing
options at affordableinterest rates.
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OpportunitiesThe long-term view on the Indian real estate industry is positive, as fundamentaldemand drivers such as
increasing urbanisation, favourable demographics, growth of the services sectorand rising incomes are still
intact.Major
housingshortage
Retail space
expected toincreasein ruralmarkets
Growth of the services sector and organised retail, increasing urbanisation,rising income levels, contracting household sizes and the easy availabilityof home loans are key growth drivers of the industry.
India has one of the largest number of retail outlets in the world. In the pastfew years, retail development has been taking place not only in major citiesand metros, but also in tier-II and tier-III cities.
Going forward, companies are expected to tap rural markets as their keygrowth drivers. This is expected to increase the demand for retail outlets inrural areas.
According to the Eleventh Five Year Plan (20072012), the housing shortagein urban areas was estimated at 24.7 million units in 2007, of which morethan 88 per cent was in the economically weaker section (EWS). Meanwhile,the housing shortage in rural areas was estimated at 47.4 million units in
2007. For the Plan period, the total housing requirement (including backlog)is estimated at
26.5 million units.
This provides real estate developers with ample growth opportunities, asunmet demand remains significant.
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DRIVERS
Schemes like MNREGA which created lots ofjobs for rural people.
Then huge growth in BPO & IT industrybecause of outsourcing from west.
Setting up of SEZ
Large growth in education (MBA &
engineering colleges)
Indian economy is driven by consumption andis less dependent on exports like that of china.
BIBLIOGRAPHY
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BIBLIOGRAPHYwww.indiastats.com
www.wikipedia.com
Economic Growth by Pulapre Balakrishnan
Indian Retail Industry-Its Growth, Challenges And
Opportunities- An Article by Dr. M. Dhanabhakyam.
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