What a decade it has been, both globally as well as for India. The world successfully pulled back from what could have been the Greater Depression due to unprecedented and coordinated government action, but the decade belonged to China. The world’s third-largest economy overtook the US in terms of carbon emissions in 2007, in broadband connections in 2008 and, in 2009, 12.7 mn cars/trucks were sold in China compared to 10.3 mn in the US.
India is way down at 12th position (4th in PPP terms), but the economy has changed beyond belief in the decade. The economy is three times larger and the middle class is up from 10.7 mn households to 28.4 mn; the number of billionaires is up from 129 to 382, and their combined wealth equals 13 per cent of GDP. Salaries shot through the roof and the highest for IIM-A graduates rose from Rs 13.5 lakh in 2002 to Rs 1 crore in 2007, before falling to Rs 70 lakh in 2008. At the CEO level, promoter-CEO salaries jumped from Rs 8.9 crore for Dhirubhai Ambani in 2001 to Rs 48 crore for younger son Anil in 2009 — as a proportion of sales, the amount is not large, speaking volumes for how far India Inc has progressed. India Inc’s sales rose 5-fold in the decade to equal 60 per cent of GDP, up from 32 in 2000. Profits equal 4 per cent of GDP and investments add up to over 10 per cent.
If the discussion in the 1990s centred around foreign investment coming in, it was about Indian investment going abroad in the decade gone by — in the year before the financial crisis, India Inc spent $26.4 bn on foreign acquisitions. Truly world- class now, 13 per cent of automobile production is slotted for exports, and it is 40 per cent for pharmaceuticals. Companies funded their expansion from the markets, both local as well as global ones and, if advance filings are anything to go by, 2010 will see firms raise 2.5 times what they did in 2009! India is more globalised than it has ever been, inflows and outflows add up to 125 per cent of GDP. The growth of the middle class and the rich, not surprisingly, has seen auto sales rise from 4.8 mn in 2000 to 11.3 mn in 2009, mobile phone subscribers from 2 mn to 500 mn; with the new middle class rushing to buy houses, home loans rose from a mere Rs 14,100 cr in 2000 to Rs 277,000 cr in 2009. There are several weak spots — infrastructure and politics — but the economy’s momentum offers its own solutions.