The State of the Recovery

PTI/Economic Times: November 20
A new OECD report projects over 7 percent growth this year and next in India, significantly above the Asia average. It says that this will be driven by private consumption, citing wage increases for the public sector, but downplays mitigating factors like high NPA rates among banks, and the negative offset to investment activity that the salary hike produces.

Business Standard: November 22
According to Credit Suisse, the recovery in India is signaled by demand pickups in oil, power, and automobiles. The government, they say, is committed to a bottom-up approach to growth. An analyst says that the increase in oil demand is about more than price, with industry requirements for plastics on the rise. The likes of Ola and Uber, offering subsidies to car buyers, are helping the increase in automobile demand.

Looking at the data: Manufacturing output, measured by IIP, hit a four-month low, with slowdowns significant in the manufacturing and consumer non-durable sectors. Nikkei’s manufacturing PMI hit a 22-month low in October, indicating slowing order and output growth, services PMI was conversely at an 8-month high, driven by a slew of new orders. (Indian Express, Business Standard, FirstPost)

Business Standard: November 22
In step with its “Act East” strategy, India is pushing for more members of the Association of Southeast Asian Nations (ASEAN) to ratify a free trade agreement in services and investment. Next up, the foreign ministry hopes to have Indonesia, the Philippines, and Cambodia on board by the end of the year, and is targeting $100 billion in trade with ASEAN nations.

Businesstoday: November 24
Sumant Banerji
Indian steel grew 3.3% ytd, the largest rate of any steel producer this year, as other major producers declined as a result of falling demand and overcapacity. But Businesstoday’s Assistant Editor Sumant Banerji warns that this has led and will lead to dumping — Japan, China and others are targeting Indian steel and the domestic price is dropping, meaning steel majors are losing out.

Innovation and Industry Magnified

YourStory: November 12
Sanjay Bansal
Private equity fund manager Sanjay Bansal sees a multi-channel future for Indian retail in the wake of its e-commerce boom. At the moment, e-retailers and brick-and-mortar counterparts appear to operate competitively, each trying to prove its essential relevance, but it need not be siloed. People will research online and buy in store, and the physical spaces will have to include functionality that as of now is online-only. This won’t be restricted to affluent areas – as rural consumers grow accustomed to the e-retail model, they will demand a more comprehensive solution as well.

YourStory: November 20
Aparna Ghosh
India’s massive skills gap could be closed with the help of ingenuous startups. DeZyre, an Indian company, launched with offerings in big data certification in 2012 and has since tied up with analytics majors like IBM, and plans to move further toward industry orientation. Online skills training companies, in a $107 billion market, include billion-dollar Lynda and Udacity, as well as massive open online course (MOOC) companies like Coursera and EdX. User participation and the effects of these new tools have not been analyzed yet, but one can imagine the potential.

Reuters/Financial Express: November 24
US-based SunEdison, which currently supervises upwards of 1700 MW of solar power development in India, is looking to sell 400 MW of capacity for $350 million. SunEdison grew by acquisition too quickly, but its loss could easily be a boon for the solar industry in India, should it find an enthusiastic and innovative buyer. November 7
IKEA is that rare company that has braved the rigors of the regulatory landscape in many different states and is poised to reap the immense rewards. Find out from an IKEA executive about the mindset and strategy for expanding into India as the company gears up to open its first store. The company plans to open 25 new stores in the next 10 years.

Livemint: November 25
Moulishree Srivastava
The Taiwanese “Make in India” offensive continues. Following the pledges made by Foxconn and other Taiwanese manufacturers a few months ago to build factories in India for consumer electronics such as mobile phones, two Taiwanese companies announced plans to build a telecom manufacturing plant in the next five years that will create over 15,000 jobs. A Gartner analyst wisely advises that this does not speak to the condition of the investment environment, merely to positive sentiment about the future.

Read an excerpt from Arun Maira’s An Upstart In Government, via Geoskope friend Indrajit Gupta’s FoundingFuel. Maira, a former member of the Planning Commission, discusses small enterprise’s particular vulnerability to heavy regulation and trouble accessing the appropriate financial instruments, as well as its larger problem interacting with the corporate-federal bureaucrat nexus. See also Maira’s three scenarios on India’s future.

Rahul Sachitanand and Indulekha Aravind
Economic Times: November 15
A long, hearty exposé describes how the force of a few entrepreneurs and the buy-in of e-commerce majors such as Flipkart and Snapdeal has changed the received wisdom about the gender of the online consumer in India, and now companies are tailoring their strategies to target women more aggressively, seeing huge and growing returns.

Politics: Parliament Winter Session To Begin

The government conceded its legislative reform of land acquisition and GST—among other bills—was stonewalled in the last session. The Winter Session begins on November 26, and many hope, and only hope, that work can get done.

The Mint opinion calls for responsibility among the government and opposition this time around, saying, “Undoubtedly, the government will have to improve its floor management and reach out to the opposition in order to ensure smooth functioning of both houses of Parliament. The government must realize that despite a comfortable majority in one house, it still needs cooperation from other parties to improve the ease of doing parliamentary business. Similarly, the opposition, especially the Congress party, must appreciate that disputation is not an end in itself. Obstruction has diminishing returns and, if used too often, it can backfire.”

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