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India as a "Developed Nation"

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					Commercial prospects of the new
     Economic Landscape




                                  1
                           Meaning:


This Research Report focuses on the commercial possibilities that
  are thrown open to investors in the new economic landscape.


     New Economic landscape, not necessarily meaning the
opportunities in this buoyant and growing economy, but the one
  that is derived out of the process of simplifying conventional
                       Economic Jargons.


    What are these exactly and how do these put forth unique
                   opportunities for investors?




                                                                   2
                       Well,
This entire program revolves around the concept of a
           “Developed India” as a nation.




                                                       3
                          The Inception:


This so called Mission was floated during the tenure of our former
 President APJ Abdul Kalam. What inspired me therein was an
inert desire to know as to what this mission was all about and as to
                 how this could be accomplished?




With time, I started pondering into this subject. I wanted to know
as to where we were currently and what potentially had to be done
              to become a developed nation by 2020.


 My primary focus was economics. But as time passed, I started
         pondering into a number of other allied subjects


 Herein as well. I was keen to know that objective parameter that
    would be the defining line between the League of Nations.




                                                                     4
               Objective and Subjective Nature:


But to surprise, after extensive and in depth research, I found that
this entire matter was of subjective nature. In Actuality there was
  no said parameter in statistical terms to classify countries as
           developed, developing or underdeveloped.


            Let us get to understand this little better:


              What makes a Country Developed?


When you generally ponder over what makes a country developed
 and others not, some of the general agreed parameters would be
                               like:
                A country with very less poverty


              A country with high per capitai GDP


           A Country that is technologically advanced


           A Country with good Infrastructure etc etc.




                                                                       5
 In all these above terms, India seems to be lagging behind the so
called developed nations. But, there is a need to look in depth into
this matter. A need to analyze all the above said pointers and even
other such potential pointers that may be contributing to this entire
                              theory.


                       The Prime Aspects:


                           POVERTY:


             Let Us now look at the aspect of poverty:


                            Definition:


In India, Conventionally, People unable to afford the basics of life
such a food, clothing and shelter are considered as poor. What is to
               be noted here is that the definition of


Poverty greatly differs from country to country and as such there is
       no uniform definition as such for the same globally.




                                                                     6
 When we try to express the nutritional requirement in monetary
        terms, then according to the government of India:


                     Monetary Expression:


In the '70s, when our governments first began using this definition,
 the monthly cost of the "basket of food" required to supply these
nutritional levels was calculated to be Rs 62 in rural areas, and Rs
71 in urban areas. With inflation, those numbers rose to Rs 328 and
              Rs 454 respectively, by the year 2000.


                        Census Statistics:


  To add on as per the above definition based on the nutritional
requirement, our poverty level as on 1999-2000 was 26.1% which
               further declined to 20.8% in 2004-05


                               Link:
 http://www.expressindia.com/news/fullstory.php?newsid=83409




                                                                     7
 Some estimates all project that, with the current rate of economic
growth, India may well be able to completely eradicate poverty by
                               2020.




 However again, the definitions for poverty differ across nations.


                 Poverty Statistics in America:


In the USA, for example, the minimum parameter for poverty for
2011 was set at $17,761 (total yearly income) for a family of four.


 This roughly sums up 4440$ a year per individual and about 12$
                          on a daily basis.


   But there are certain interesting points to be noted over here.
According to some estimates the poverty rate was around 13.2% in
                               2008




Link: http://www.reuters.com/article/2009/09/10/us-usa-economy-
               poverty-idUSTRE58943C20090910


                                                                      8
But this does not mean that all those covered under this measure of
 poverty are necessarily only those who earn below the stipulated
                 17761$ a year for family of four.


                    Food Insecurity in USA:


 According to some estimates, close to 50 million Americans are
 food insecure. In other words, they don‟t find enough money to
               buy adequate food on a daily basis.




         Link: http://www.dailymail.co.uk/news/article-
 1330254/50MILLION-Americans-starve-Wall-Street-executive-
                         pay-rockets.html




 That translates to almost 16.66% of American population. Thus,
even though the definition might seem slightly skewed, the reality
                        is much different.




                                                                    9
                 Absolute Poverty Rates in UK:


The case seems pretty similar in case of other so called “developed
nations” too. The case of Food Insecure” Households is prevalent
                            even in UK.




                               Link:
http://www.alphagalileo.org/ViewItem.aspx?ItemId=80441&Cultu
                            reCode=en




Moreover according to one report five million people in UK were
 reported to be living in absolute poverty with inability to access
             basics of life like food, water and shelter




      Link: http://news.bbc.co.uk/2/hi/health/1207241.stm




                                                                      10
Hence, whether the poverty level is defined by nutritional intake,
  or annual earnings or by any other means, the actual state of
   poverty looks pretty much on similar lines across nations.


   And going by our annual growth rate, we may well be in a
comfortable situation by the end of this decade in the context of
poverty and on real terms, our society may be more prosperous if
                      not more than others.




                                                                    11
12
                       GDP per Capitai:


                      A Contentious Issue:


 The Topic of GDP seems very contentious. Not Because of any
inherent fault in the concept as such but in the manner and ease in
      which it is used and thrust upon other allied concepts.


        Let us look into the matter a little more in depth.


   GDP refers to the sum total value of all goods and services
   produced within the boundaries of a particular country in a
                     particular financial year.


  There are three different methods of calculating GDP as well:


                        Income Approach


                   Expenditure Approach and


                        Output Approach




                                                                  13
The values therein may differ only marginally. But the major glitch
              is with the aspect of GDP Per capitai.


In effect, when the GDP of a country is divided by its population,
                   we derive GDP per Capitai.


 If the GDP per Capitai of a country turns out to be 5000$, it does
   not necessarily mean that all the people in that country make
                    5000$ annually as income.




                                                                   14
                       Income Inequality:




Income Inequality is a bitter reality and is existence almost in all
       countries. In some countries it is larger than others.




                           GINI Index:




One of the credible measures to measure income inequality in the
  GINI Index. The Gini coefficient is a measure of statistical
 dispersion developed by the Italian statistician and sociologist
 Corrado Gini and published in his 1912 paper "Variability and
                           Mutability"


In simple words Gini coefficient is a measure of the inequality in
             the distribution of Income and Wealth.




                                                                    15
           Income and Wealth Distribution in USA:




                      Income Distribution:


The top 1% or the top 10% of the population often hold a
substantially large part of National income than the bottom 1% or
bottom 10%.


For example in USA top 0.01% -- that's one-hundredth of one
percent -- received 6% of all U.S. wages, the top 10% received
49.7% compared with the 3.4% earned by the roughly 15% of the
population living below the poverty line.


Link:
http://en.wikipedia.org/wiki/Income_inequality_in_the_United_Sta
tes
Link:
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html




                                                                    16
                      Wealth Distribution:




When it comes to the aspect of wealth distribution, its even worse.
  The Top 20% of Americans own roughly 85% of all Wealth.


   Link: http://articles.latimes.com/2010/nov/08/opinion/la-oe-
               norton-wealth-inequality-20101108


 And the bottoms 40% of Americans not only have no assets, but
                    also have negative wealth.


Thus clearly, the concept of dividing the entire national income or
 wealth by the population does not seem to aptly reflect upon the
                     actual ground scenario.




                                                                  17
      Markets for Business/ the Rich or the Upper Class:


 Why do all Top End Exclusive Brands and Luxury products find
 their Market in India too? For the very same Reason. Even here,
the concentration of wealth is in the hands of a chosen few who are
             willing to spend on these niche products.




 From a Business perspective, all these High End firms find India
and other such nations too as profitable destinations. At times they
find these locations even more profitable than the west itself. This
           is in relation to the top end of the population.


Even at the bottom end, when we compare poverty statistics across
  nations, the bottom rug of the population as mentioned above
  seems to be doing fairly well in comparison to other countries.




                                                                    18
                        The Middle Class:




Now the middle class. India has a huge and growing middle class
 population. Infact for a number of other Multi nationals, it is this
middle class that is their main revenue generating market. From a
   business perspective, the Rich and middle class of India is as
  comparable to any other country. But again, in terms of actual
numbers, incomes differ here as well. Those on USA or UK earn a
  lot more than those in India. The concept of purchasing power
                parity narrows this gap to an extent.




         Ascertaining Actual Well Being/Lower Class:




 But Beyond all this, one has to be clear that this concept of GDP
   per Capitai as such may not be very appropriate measure to
         ascertain the actual well being of the population.




                                                                    19
Even within these realms, if a country is able enough to ensure that
   its population is able to afford the basics like nutritious food,
clothing and good shelter, it can be considered to be a mature state
   from the aspect of handling the bottom rug of the population.


   The rest depends on how the middle class and the rich of the
 country aid in economic participation and growth and as to how
 Businesses view them from the context of its revenue generation
  ability. In any other context monetary numbers for comparison
may only throw vague upper limits and may not necessarily result
in any concrete solutions as a result of their own levels of income
                             and wealth.




                                                                       20
                   Wage Levels as a Measure:


In the final phase of this discussion, let us look into corporate wage
                        levels as a measure.


India has been witnessing an average annual salary hike to the tune
               of around 15% since many years now


Link: http://www.indianexpress.com/news/india-retains-top-spot-
                     in-salary-growth/274742/


What this means is that an employee earning an average of around
20000Rs a month say in 2008, may very well end up earning close
   to 5-6 times that amount by 2020 given the rate of salary hike
                   witnessed by corporate India.


And nowadays, for any average Engineer or MBA the salary levels
      are much higher than that 20000Rs a month amounting.




                                                                    21
                   The Return of the NRIs:




Thus in the coming years, we may well see a number of Expats and
                     NRIs to work in India.


  Moreover, according to studies, the Number of NRIs returning
back to India is gaining momentum. According to some estimates,
 in 2010 alone close to 60000 Indian Americans returned to India
                         from US alone.


 This Amount was much higher than the total H1B visas issued to
                     Indians the same year.


   Link: http://www.nriworld.in/nri/1707-over-60-000-indian-
               professionals-return-home-from-us


Link: http://in.finance.yahoo.com/news/Over-50-US-green-card-
            holders-yahoofinancein-3825469819.html




                                                                 22
                   Rise in Expat Population:


   Not Just this. Some Studies also claim that Europeans and
Americans will come to India in search of work in Future as well.


Link: http://in.finance.yahoo.com/news/Reverse-brain-drain-rule-
                      pti-3670049186.html




In sum, all the above mentioned parameters indicate the extent to
which the actual scenario of income on ground is going to have an
                        impact in future.




                                                                23
24
25
           TECHNOLOGICAL ADVANCEMENT:




         Current State of Technological Development:




              Scientific and Technical Manpower:




 When the topic comes to the aspect of technologically advanced
 nations, India already is not lagging far behind. India has a large
pool of scientific and technical manpower and is ranked among the
    top 5 nations in terms of its pool of qualified scientific and
                        technical manpower.




                                Link:
http://www.rxpgnews.com/worldnews/India_all_set_to_become_pl
            anet_s_knowledge_hub_3187_3187.shtml




                                                                     26
  Quick Statistics of State of Technological Development:


 Apart from this India has made tremendous strides in terms of
                  scientific achievements too.


                   Nuclear Weapon State:


  It‟s the sixth country in the world to test a Nuclear Weapon


                      Space Technology:


 It‟s the sixth country globally to fabricate and launch its own
                 satellites in geo-stationary orbit


                      Software Industry:


  The share of software sector as a percentage of India‟s total
 exports stands at 25% and is expected to nearly quadruple in the
                          next 10 years.


  Link: http://hello.news352.lu/edito-19457-india-s-software-
                exports-face-protectionism.html


                                                                   27
  Link: http://thetechjournal.com/internet/india-to-become-
             software-superpower-by-2020.xhtml




                      Super Computers:




  India is the third nation in the world to build its own super
                      computer Indigenously


 Link: http://articles.economictimes.indiatimes.com/2011-05-
02/news/29496178_1_fastest-supercomputer-petaflops-teraflops




                Indigenous Fighter Aircrafts:




 India is among the handful of nations to build an indigenous
             supersonic fighter aircraft named Tejas




                                                                   28
         Link: http://en.wikipedia.org/wiki/HAL_Tejas




                        GSLV Satellites:


 India is among the few countries of the world to have the ability
                      to launch GSLV Satellite


                  Ballistic Missile Technology:


 India is among the few countries which have developed Ballistic
                       Missiles Indigenously


Link: http://www.thecolorsofindia.com/interesting-facts/science-
                    and-technology/index.html




                                                                 29
                       Automobile Industry:




> India is the 7th largest country by Motor Vehicle Production.




                                Link:
http://en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_
                              production


                         Medical Tourism:




> India ranks 2nd in terms of medical tourist arrivals and with an
annual growth rate of around 30%, it may well be the top medical
tourist destination of the world in future.




                                                                     30
Link: http://www.merinews.com/article/medical-tourism-india-
                 ranks-second/15762192.shtml


                              Link:
http://www.medikonnect.in/%28S%28sonw2y55rchjde55j5cy3zm
               h%29%29/HTML/why-india.html


      Link: http://www.medicaltourismco.com/medical-
       tourism/medical-tourism-india-hospitals-in-india/




 The list for technological advancement may go on and on from
   here. The above list is just Illustrative and not Exhaustive.




                                                                   31
            WORLD CLASS INFRASTRUCTURE:




                         The Current State:




   Infrastructure is the other main pointer that I have stated as a
characteristic of a developed nation. Undoubtedly, India as on date
 is lagging way behind other nations on this parameter. And with
 the current state of Infrastructure, it will be fair to say that it will
take a long time before the country joins the league of developed
                               countries.




                   Planned Future Investments:




  But from a future standpoint, things may not really seem that
bleak. According to some reports, the planning commission has a
 target of $1 trillion in infrastructure investments in the 11th five
                      year plan beginning 2012.


                                                                        32
Link: http://www.deccanherald.com/content/132649/india-targets-
                    1-trillion-infrastructure.html


                               Ports:


    Let us look in depth into certain key infrastructure sectors:


Ports: The total Investment in ports is expected to be close to 2.77
lakh crore by 2020. This would be significant increase in the
handling capacity of ports therein.




   Link: http://www.indiareport.com/India-usa-uk-news/latest-
                  news/1032646/Madhya0/4/31/4




                             Airports:


Airports: There are plans to develop close to 500 airports by 2020.
This would make Air travel accessible to a number of remote
places of the country




                                                                    33
          Link: http://www.hindustantimes.com/News-
    Feed/sectorsaviation/India-plans-to-have-500-airports-by-
                   2020/Article1-273966.aspx




                              Link:
  http://www.flightglobal.com/articles/2009/12/14/336049/india-
       estimates-120-billion-in-aviation-investment-by.html




                           Roadways:


     Roadways: Roadways can be primarily categorized into:


                   The Golden Quadrilateral:


> The Golden Quadrilateral: As of 31st march 2011, of the total
highway length of 5846 km, a total of 5821 km i.e. 99.62% of the
highway work was completed.


     Link: http://en.wikipedia.org/wiki/Golden_Quadrilateral




                                                                   34
                North South East West Corridor:




North South East West Corridor: As of 31st March 2011, of the
7300 km highway network, a total of 5622 km i.e. 77.01% of the
work was completed.




                             Link:
http://en.wikipedia.org/wiki/North%E2%80%93South_and_East%
                   E2%80%93West_Corridor




    According to Mr. Kamal Nath, the union minister for Road
 Transport and highways from May 2009 till January 2011, India
would start building 20 km of road network a day from April 2010.




Link: http://www.zopag.com/news/india-to-start-building-20-km-
               roads-day-by-april-nath/12281.html




                                                                 35
  This kind of statistics should be sufficient enough to meet the
     National Highway development goals in timely manner




             Pradahn Mantri Gram Sadak Yojna:


PMGSY: The Pradahn Mantri Gram Sadak Yojna envisages
connecting every village and remote part of the country through all
wheather roads and is slated to be completed by 2017.




 Link: http://www.projectsmonitor.com/MISC/the-road-to-rural-
                               india




    Link: http://india.gov.in/sectors/rural/pradhan_mantri.php




                                                                    36
                            Railways:




    Indian Railways too has a vision for 2020. Announced in
    December, Vision 2020 is the blueprint for unprecedented
investment in the network over the next 10 years. In addition to the
  extra 25,000km of new lines that will take the network total to
 89,000km, the Vision calls for 12,000km of double and multiple
 track additions for a total of 30,000km nationwide, and an extra
 14,000km of lines to be electrified for a total of 33,000km by the
                        end of the decade.


Maximum speeds will also be increased from 110-130km/h to 160-
 200km/h for passenger trains, and from 60-70km/h to more than
100km/h for freight services. Double-deck trains and modern dmus
 and emus will be introduced on the network which will include
four new high-speed lines that will accommodate trains capable of
                 reaching speeds of 250-330km/h.




Link: http://www.railjournal.com/news-extra/vision-2020-a-new-
                  dawn-for-india-s-railways.html


                                                                    37
                    Clean Drinking Water:


Under Swajaldhara Scheme, the government envisages to provide
   clean drinking water to all villages in the country by 2009.


  Link: http://www.brijj.com/group/water-supply-sewerage-
  drainage-grou--discussionboard--Drinking-Water-Quality-In-
                    Rural-India?eid=403125




   Link: http://www.brijj.com/group/water-supply-sewerage-
  drainage-grou--discussionboard--Drinking-Water-Quality-In-
                    Rural-India?eid=403125




                                                                  38
                      Sanitation Facilities:


  Total sanitation campaign was launched in 1999 with the sole
objective of eradicating open defecation by 2010. As of 2008 590
              districts were covered by this scheme.


             Link: http://ddws.nic.in/tsc_index.htm


                              Link:
http://www.businessworld.in/bw/2010_05_29_Indias_Toilet_Revo
                           lution.html




                           Electricity:




In December 2010, the installed power generation capacity of India
 stood at 165,000 MW[9] and per capita energy consumption stood
                           at 612 kWh




                                                                 39
  According to a research report published by Citigroup Global
   Markets, India is expected to add up to 113 GW of installed
capacity by 2017. Further, renewable capacity might increase from
                      15.5 GW to 36.0 GW.




                              Link:
http://en.wikipedia.org/wiki/Electricity_sector_in_India#cite_note-
                                14




        Rajiv Gandhi Gramin Vidyutikaran Yojana:




Under this scheme, the government envisages to provide all
  the villages in the country access to Electricity by 2009.


    Link: http://pmindia.nic.in/speech/content.asp?id=92


                              Link:
http://www.powermin.nic.in/whats_new/pdf/Rajiv_gandhi.pdf




                                                                 40
The above list is all again Illustrative than being Exhaustive. The
 above list provides a jest about the infrastructure developments
that India is poised to experience in the coming years up to 2020.




                                                                    41
                 Defining a Developed Nation:


 While researching on the concept of a “Developed Country”, I
came across an interesting article that demonstrated the extent of
        subjectivity that surrounded this subject as such.




     Link: http://en.wikipedia.org/wiki/Developed_country




       Claim by the United Nation Statistics Division:




       The United Nation Statistics Division Claims that


   “There is no established convention for the designation of
 "developed" and "developing" countries or areas in the United
                        Nations system”


Link: http://unstats.un.org/unsd/methods/m49/m49regin.htm#ftnc




                                                                 42
                       It further notes that:




“The designations "developed" and "developing" are intended for
statistical convenience and do not necessarily express a judgment
   about the stage reached by a particular country or area in the
                      development process”


                    Statement in Wikipedia:


The Article Titles “Developed Country” in wikipedia denotes that:


 “The term developed country is used to describe countries that
  have a high level of development according to some criteria.
    Which criteria and which countries are classified as being
  developed, is a contentious issue and is surrounded by fierce
                              debate”




                                                                    43
               It also further went on to quote that:




“One such criterion is income per capita; countries with high gross
  domestic product (GDP) per capita would thus be described as
        developed countries. Another economic criterion is
  industrialization; countries in which the tertiary and quaternary
sectors of industry dominate would thus be described as developed.
 More recently another measure, the Human Development Index
 (HDI), which combines an economic measure, national income,
with other measures, indices for life expectancy and education has
    become prominent. This criterion would define developed
 countries as those with a very high (HDI) rating. However, many
     anomalies exist when determining "developed" status by
                   whichever measure is used.”




                                                                      44
                      Probable Parameters:


                        GDP Per Capitai:


 Now, the concept of GDP per Capitai has been discussed above
                            previously.




               Tertiary and Quaternary Sectors:


 When it comes to the aspect of tertiary and quaternary sectors of
industry, India‟s achievements in the software sector are evident to
its stature herein. India is considered as the future knowledge hub
      of the planet as well as the next software superpower.




 Link: http://nvonews.com/2010/09/08/india-marching-towards-
                      global-knowledge-hub/




    Link: http://www.rediff.com/money/2003/dec/06hub.htm


                                                                  45
  Link: http://articles.economictimes.indiatimes.com/2010-03-
14/news/27571830_1_software-market-superpower-infrastructure


                        Industrialization:


   When it comes to the aspect of industrialization too, India is
already considered to be among the top 10 industrialized nations of
                            the world.


Link: http://www.business-standard.com/india/news/india-in-top-
            10-industrial-nationsbehind-china/430282/




                  Human Development Index:




    Now what remains to be seen here is the aspect of Human
                       Development Index.


              What is Human Development Index?




                                                                    46
                           Definition:




The Human Development Index (HDI) is a composite statistic
  used to rank countries by level of "human development" and
     separate "very high human development", "high human
development", "medium human development", and "low human
development" countries. The Human Development Index (HDI) is
a comparative measure of life expectancy, literacy, education and
          standards of living for countries worldwide.


                             Origin:


  The origins of the HDI are to be found in the United Nations
Development Programme's Human Development Reports. These
 were devised and launched by Pakistani Economist Mahbub ul
 Haq in 1990 and had the explicit purpose „„to shift the focus of
  development economics from national income accounting to
                   people centered policies‟‟.




                                                                    47
    During the course of my research, I realized that out of the
 potential objective parameters, Human Development Index was
                  considered as one of the probable.


I conducted my own in depth Research on the same. In fact, all the
 three parameters considered within HDI were found questionable
                      at a personal level by me.


                        Let us look in Detail:


       Flaws in the Parameters considered within HDI:




     The three main parameters considered herein are mainly:


> Life Expectancy
> Literacy Rate
> Per Capitai Income (To Measure standard of living)




                                                                   48
Let us analyze each of these individual parameters one by one.




                          Life Expectancy:


Life expectancy is the expected (in the statistical sense) number of
years of life remaining at a given age


Link: http://en.wikipedia.org/wiki/Life_expectancy


Life expectancy is calculated considering a number of factors like
Background, Height and weight, Educating, Smoking habits etc.
There are some subtle factors too which at a personal level, I
believe contribute to life expectancy.


These are factors like Quality of life, Mental Health etc. These
subjective factors are often far more difficult to calculate than age,
height, weight or education.


Let us look at some of the statistics.




                                                                     49
45% of New Marriages are predicted to end in divorce as per the
Daily Mail of UK


  Link: http://www.dailymail.co.uk/news/article-547468/45-cent-
              new-marriages-doomed-end-divorce.html


   Divorse is more often than not likely to set in depression. And
     the result, it considerably affects the Mental Health. Studies
     have found that Mental Ill die 25 years earlier on Average.


     Link: http://www.usatoday.com/news/health/2007-05-03-
                        mental-illness_N.htm


      The above was an Illustration to prove how certain subtle
    factors can affect the aspect of life expectancy that are often
    hard to calculate and do not reflect the actual ground reality.




   Hence, Life expectancy can only be considered as an indicator
    whose accuracy remains to be subjected to further studies and
                               analysis.




                                                                      50
In the above case when we talk about a population of a large
proportion (45%), it is hard to ignore the impact that these subtle
activities have on the actual state of life expectancy.




     Other similar factors can be smoking, Excessive Alcohol
       Consumption, Substance Abuse like Drug usage etc.


                              Literacy:


By definition, an Individual who has the ability to read and write is
                         called as a literate.


   Link: http://wiki.answers.com/Q/Definition_of_literacy_rate




 By this definition, India‟s literacy rate as per the 2011 census is
                               74.04%


                                Link:
http://www.telegraphindia.com/1110331/jsp/frontpage/story_1379
                              03010.jsp




                                                                      51
     The reason why I find literacy rate flawed is because; the
    difference in literacy across nations is not really that huge.


   From a Human Development Perspective, it is imperative to
understand the actual benefits that an individual or society derives
                           out of the same.


   Firstly, the extent to which the literacy skills of an individual
enable him to improve his quality of life is questionable. Education
 is different from literacy. An individual who has attained certain
  degree of formal education like primary, secondary schooling,
degree or professional qualification stands a much better chance to
 improve his lifestyle than an individual with mere capabilities to
                           read and write.




Moreover, there is a concept of hidden literacy that persists in the
  west. Herein, people have some level exposure to reading and
            writing skills but are functionally illiterate.




                                                                       52
                       Functional illiteracy:


   Functional illiteracy is a term used to describe reading and
   writing skills that are inadequate "to manage daily living and
 employment tasks that require reading skills beyond a basic level


In the United States, according to Business magazine, an estimated
 15 million functionally illiterate adults held jobs at the beginning
                        of the 21st century.


     Link: http://en.wikipedia.org/wiki/Functional_illiteracy


                    Statistics for certain cities:


                           Philadelphia:




According to some reports the adult functional Illiteracy of the city
                               is 22%


Link: http://temple-news.com/2009/01/20/literacy-rates-challenge-
                            philadelphia/


                                                                    53
                          Los Angeles


Fifty-three percent of working-age Los Angeles County residents
have trouble reading street signs or bus schedules, filling out job
     applications in English or understanding a utility bill.


Link: http://articles.latimes.com/2004/sep/09/local/me-literacy9


                            Chicago:


       37% of Adults in Chicago have low literacy rates.


 Link: http://www.care2.com/causes/education/blog/fighting-
         chicagos-53-illiteracy-rate-what-does-it-take/


                             Detroit:


  47% of metro Detroiters are reportedly functional illiterate.


         Link: http://www.detroitliteracy.org/faq.htm




                                                                  54
                National Adult Literacy Survey:


In their 1993 report on the National Adult Literacy Survey, the US
Department of Education identified a class of adults who although
they do not meet criteria for functional illiteracy, nonetheless face
  reduced job opportunities and life prospects due to inadequate
literacy levels relative to the requirements of contemporary society


The study detailed the percentages of U.S. adults who worked full-
 time, part-time, were unemployed, or who had given up looking
  for a job and were no longer in the work force. The study also
reported the average hourly wages for those who were employed.
    These data were grouped by literacy level — how well the
   interviewees responded to material written in English — and
  indicated that 40 million to 44 million of the 191 million U.S.
 adults (21% to 23% of them) in the least literate group earned a
yearly average of $2,105 and about 50 million adults (25% to 28%
of them) in the next-least literate of the five literacy groups earned
a yearly average of $5,225 at a time when the U.S. Census Bureau
  considered the poverty level threshold for an individual to be
                          $7,363 per year.
 Link: http://en.wikipedia.org/wiki/Literacy_in_the_United_States


                                                                    55
                 Literacy and Income Inequality:




 This also states one more concept clearly. The Concept relating to

income inequality in the USA. The concept of GDP Per capitai could

  also well align with the same. The fundamental point here is, the

  correlation expressed above between Literacy and Income is an

indicator of the potential earnings of a last proportion of Americans

though the same may not be expressly accurate. Keeping the same in

   mind the case against the concept of GDP Per capitai could be

                        further strengthened.




                                                                      56
                    Functional Illiteracy in UK:

 According to an article carried by BBC almost 20% of UK‟s adult

                        population is Illiterate.

      Link: http://news.bbc.co.uk/2/hi/uk_news/811832.stm

  So, based on all the above mentioned, there is a serious need to:

 > First, Look into the need for considering exact level of literacy or

                   education rate of the population

 > Secondly, There is a need to Re-Assess the Human Development

   Index on the lines of the actual state of Functional and Hidden

                 Illiteracy rates of different countries

Thus, even Literacy cannot be considered as an accurate parameter in

                             this context.




                                                                      57
                    Obsolete Nature of HDI:




The Third Aspect of Human Development Index i.e. the per capitai

 income or the GDP Per capitai has already been mentioned earlier.




                   Need for Reassessing HDI:




  Thus, based on all the above stated, the need to reassess Human

 Development Index as a concept itself is a pressing issue and thus

   considering HDI as on of the probable parameters to classify

countries as Developed, Developing or Underdeveloped again seems

                     out of sync and obsolete.




                                                                      58
                    Perception Driven Statures:




To Summarize, Based on all of the above stated, it is clear that this

entire subject is of subjective nature and not of objective nature. The

  Concept of Developed or Developing Countries is based on the

perceptions of people or government as do not necessarily have any

                  statistical backing to their claims.




                  Case of USSR as an Example:




   Even the USSR might have once been perceived as developed

   country. But today, the Russian Federation is a member of the

   BRICS whose members in general are regarded as Developing

                               Nations.




                                                                     59
                          India by 2020:




 Going forward, let us say by the year 2020, with an average annual

 Economic growth rate of 8-10%, our position on the global stage is

 likely to get much stronger and we may well be perceived to be in

the league of front nations or “superpowers” along with other nations

       like Russia, China, USA, Brazil and European Union.




                                                                   60
                           Caution Notes:

                        Economic Reforms:




  Hence, over time with the current state of Economic Growth and

reforms, in this conventional Context, India can well be regarded as a

                    Developed Country by 2020.




               Differing Perceptions of Individuals:




But Perceptions differ. Thus, since this matter is of subjective nature,

 the perceptions of some or the other individuals on one or the other

count may differ about our country‟s stature and frankly, beyond an




                                                                      61
 Extent, no objective proof on ground would have the potential to

               address these subjective grievances.




                       Other Parameters:




                  Newly Industrial Countries:




   These are countries that are considered more advanced and

developed than those in the developing world, but at the same time

 are not considered as developed countries. In other words, these

 countries are considered to be in the intermediate group between

           Developed nations and Developing nations

Link: http://en.wikipedia.org/wiki/Newly_industrialized_country

     Link: http://en.wikipedia.org/wiki/Developing_country




                                                                    62
                     Potential Superpowers:

 India is also considered as a potential Superpower of the future by

                               many.




     Link: http://en.wikipedia.org/wiki/Potential_superpowers

                               G8+5:

India is also a member of the G8+5 groups consisting of the heads of

governments from the G8 countries and the heads of government of 5

                    leading emerging countries.




            Link: http://en.wikipedia.org/wiki/G8%2B5




                                                                   63
                               G20:




   India is also a part of the G20. Post the sub prime crisis, G20

           replaced the G8 as the main economic forum.




              Link: http://en.wikipedia.org/wiki/G20

Link: http://www.abc.net.au/news/stories/2009/09/25/2696795.htm

                          India in IMF:




India‟s quota share in IMF is about 2.75% and India ranks in the 8th

              position among IMF member countries.

   Link: http://articles.economictimes.indiatimes.com/2010-10-

24/news/27581312_1_quota-share-quota-reforms-dominique-strauss-

                                kahn




                                                                     64
            India as a permanent UNSC member:




India is considered as a strong candidate for a permanent seat in a

reformed UNSC. India candidature is backed by 4 of the 5 current

    permanent members in addition to many other countries.




       Link: http://en.wikipedia.org/wiki/UNSC_reform




                                                                      65
            Commercializing This Research Report:

How can an entity commercialize on these kinds of developments?

                        THE “BRIC” REPORT:




                        Remember BRIC?



BRIC or BRICS did not start up as a political movement. In fact the

term BRIC was coined by Jim O‟Neil, a global Economist working

              with the Goldman Sachs in 2001. The

 acronym that refers to the countries of Brazil, Russia, India and
  China, which are all deemed to be at a similar stage of newly
                advanced economic development.


But beyond the aspect of how BRIC Began to gain popularity in
    Geo Political Circles, the concept of BRIC was also used
  extensively by Goldman Sachs, other Investment Banks and
     Financial Firms Globally for commercial Purposes too.




                                                                     66
 BRIC was an indicator of the future potential that these four/five
 countries (now including South Africa) bore then. And to a large
extent, the projections of the study have proved to be in sync with
                      the actual reality today.


  It proved to be an indicator to major firms to start aggressively
    tracking the stocks of companies from these countries. For
   Investment Banks, there was a clear signal of the growth of
potential mergers, acquisitions, underwritings etc that was to come
   from these countries. Infact Investment Banking in India is
          projected to grow 10 fold in the next 10 years.


  The shares in Global Trade for these countries are also surely
               bound to multiply in the years ahead.


  Thus, Keeping the BRICS report as a base tool, a lot of further
      research, investment opportunities etc were explored.




                                                                      67
             Comparison to the India 2020 Report:


 To a Large extent this report on India 2020 falls in line with the
   same. But the one Unique Catch point herein is its ability in
  addressing the concept of a Developed India by 2020 in detail.


And further elaborating the objectivity and subjectivity involved in
                     this entire subject matter.


          A Potential Indicator for Commercial Uses:


 So, how can this report be used as a potential Commercial Tool
        and how will Companies benefit out of the same?


  The Idea that I state Below Would need further Research and
  Analysis and the same, for the point in time may act as an apt
            indicator for further Analysis of the same.




                                                                      68
                    The Primary Objective:


The Primary Objective herein is to market this report emphasizing
        the Subjective and Objective Issues of this Study.




         Objectivity and Subjectivity of this Concept:




The Objectivity and Subjectivity involved in this concept of the so
called "Developed Nation" should be stated clearly and marketed
well. The same would be the major USP of this entire project from
                    a commercial perspective.




                 Setting Realistic Parameters:


Further, We Need set parameters that are realistic and achievable
with an 8% odd average economic growth rate for future based on
                           our research.




                                                                 69
   Focusing on Sectors that are Beneficiaries of Growth:


By Elaborating on these parameters, we need to focus on typical
    Sectors that would be the beneficiaries of such a growth.




     Clubbing Research Sectors into Major Groupings:


The Idea Herein is to club the potential Research sectors under a
few Major Groupings that would enable mass scale research than
            individual stock or company researches.




                                                                70
                   Avenues:


The avenues here can be broadly categorized into:


                Equity Research


              Investment Banking


               Corporate Finance


         Working Capital Management


                Venture Capital


              Wealth Management


                Credit Appraisal


        Analysis of Commodity Market


       Analysis of Derivative Market etc


                                                    71
                        Equity Research:


 Equity Research is about the analysis of stock and its valuation.
   Based on fundamental and technical analysis, we determine
whether it is worth investing in the stock or should one go long or
 short on a particular equity and giving our suggestions therein.


  With respect to this report, we can focus on selected stocks of
specific industries and initiate regular tracking and analysis of the
same. Bulk research on a group of stocks would be beneficial for
  selling them to institutional investors whose corpus herein is
                          generally huge.




                                                                     72
                    Investment Banking:


    Investment Bankers help Individuals, Corporate and even
Governments to raise capital by underwriting and acting as the
         client's agent in the issuance of securities.




  From the above perspective, the likely future scenario
would surely throw open a plethora of opportunities for the
                          Industry.


 Our job herein would be to actively track such potential
 Industries and to access their needs in advance and to act
     accordingly in timely manner to tap the markets.


Having a Dedicated Team to actively pursue such sectors
would add on to our ability to pin pointedly track specific
                  industries in this regard.


                    Corporate Finance:


                                                              73
In a growth phase companies will compete with each other
 to maximize their value. There would be immense scope
for monetary decisions that would have to be made in that
                    sort of a scenario.


When we already track a host of industries in this regard,
our research and analysis would equip us in a much better
   position to advice these corporate about their major
                  monetary decisions.


Again, the key is on mass research and analysis of sectors
 based on the future scenario of emerging countries like
                          India.




                                                           74
              Working Capital Management:


 To Begin with Working Capital Management largely falls
under the purview of Corporate Finance and this topic here
      in can be considered as an extension of the same.


Working capital is the amount of capital that is readily available to
the management. Working Capital management also falls under the
preview of Corporate Finance, but its main aim is to ensure that the
firm is able to operate well and that it has sufficient cash flow
   to service long term debt, and to satisfy both maturing
    short-term debt and upcoming operational expenses.


Through this Research report, we can focus on the aspect of
corporate finance directly and through that working capital
management can be facilitated through analysis and further
                             research.




                                                                   75
                      Wealth Management:


  Surely, with an 8% average growth rate, our economy would
   enable a number of Individuals in becoming High Net worth
     Individuals. Many Studies already predict the number of
 Millionaire and even Billionaire population to rapidly Increase.
When there would be such a massive surge in their numbers, there
      would consequently also be a surge in the demand for
           professionals specializing in such activities.


The key to track such future HNIs should be to focus on Small and
growing enterprises apart from the Bigger Giants as the next pool
     of Millionaires can emerge mainly from these sources.


 Our Research and Analysis of various sectors should encompass
  such small and medium enterprises too and careful analysis of
 activities therein should be done to identify potential rich of the
                               future.




                                                                       76
                      Credit Appraisal:


Credit Appraisal is the process by which a lender appraises
the technical feasibility, economic viability and bank ability
  including creditworthiness of the prospective borrower.


 In a growing economy, there will be growth in the credit
market too. There will be a lot of people seeking loans and
         there would be a lot of them giving them.


These could include Banks, Financial Institutions and even
                        Individuals.


 Through mass scale research, we improve our chances of
 being better informed in terms of the needs from specific
 sectors and industries. Thus, we can liaison between two




                                                            77
Prospective parties and help them by analyzing the credit
worthiness of the borrower and the Viability, Feasibility
         and the expected returns for the lender.




                                                            78
                    Venture Capital:


The number of people wanted to start up their own ventures
increases in times of prosperity than other vice. A number
  of people may have the idea and willingness to initiate
 ventures, but not all would have the financial capacity to
                          start up.


  Venture Capitalists provide finance to such individuals
                after evaluating their ideas.


 Through our research, we can assess which sectors of the
 economy pose what kind of opportunities. Thus, based on
    the same we can evaluate the business proposals of


 Individuals and assist them through a mutually benefiting
                           deal.




                                                              79
            Analysis of Commodity Market:


  Mass scale research would also involve the analysis of
commodity markets. Each of their prices would be affected
either positively or negatively by the growth of economy as
    a whole and the growth in specific sectors therein.


  Again, when we analyze the situation of a country like
India by the year 2020, we may be thrown open to a lot of
          information about a number of sectors.


 The key would be to act on that information from time to
time in an appropriate manner to tap the potential that each
of these sectors including the commodity market may have
                         to offer.




                                                           80
             Analysis of Derivative Markets:


 Derivatives provide unique opportunities for investors to
 make money even in adverse situations. The analysis of
 derivative markets is very essential as in addition to our
basic analysis of stocks, industries and sectors, these would
provide investors varied levels of differentiated investment
                       opportunities.


Moreover, by analyzing the derivative market, our research
can further be strengthened and the investor‟s positions in
      the markets can be hedges against major risks.




                                                              81
 Focusing on Bulk Investments from Institutional Investors:




    The key is to Focus Research on Groupings of Sectors and
   Industries together. It may not prove as useful to research on
                 individual sectors or companies.


Mass Research through Grouping different sectors would provide
     us too room for further analysis to come up with varied
investment avenues to guarantee reasonable and realistic returns.


  Even through Sell Side research reports, Institutional Investors
          who look for bulk Investments can be tapped.


 So Presenting this idea and grouping large sectors therein under
  different groups based on our own initial Researches about the
potential of these sectors provide, might prove more appropriate to
 suit the investment needs or appetite of institutional investors as
                               well.




                                                                     82
We can further come up with investment options in Derivatives in
 addition to those in pure equities or bonds with further Analysis


This would also give the Investors a plethora of avenues to trade
                            and profit.




                                                                     83
                          Conclusion:


The Commercial aspect of this Research report is only indicative
          and need extensive analysis and further study.


The India 2020 report is self prepared and any questions or doubts
    therein can be fully thrown open for further clarification.


  Most of the additional Information in the report is drawn from
 various websites and the sources of these sites have been stated
                  clearly through links therein.




                                                                    84
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Description: This document is about India being a "developed Nation" in the near future and the commercial possibilities for businesses therein.