A buoyant and well-branded India is the flavour of the season, but there is more to the Indian economy than the health of business.
AdAsia, the biggest jamboree of the advertisement industry in Asia is on in Jaipur, and the big question confronting it today is: how to brand India' From Kumar Mangalam Birla to Mukesh Ambani, everyone who took the podium announced the coming of India’s moment in the global stage of industry and economic power.
This is an economy cruising at 6.5-7 per cent growth, benign inflation, sustained foreign institutional investments, a soaring share index, booming pharmaceutical, biotechnology and information technology sectors and most important, a huge outsourcing hub of global business. And these impressions have been capped by the Goldman Sachs report announcing the emergence of the Indian economy as the third largest economy in the world after China and the United States of America, by 2050. The Indian economy will also dwarf Germany and Japan.
Twelve years ago, when India had embarked on the path of liberalization, it was characterized by a sense of doom that the economy would collapse under its own weight. All those fears proved to be misplaced. The economy did not collapse, nor did the country end up being colonized all over again. Instead, a large number of companies emerged from their shells, to become global players.
Some bright spots...
Today, Telco supplies cars to Rover for their European market, Ford started sourcing for its manufacturing bases from its Chennai plant, and a large number of top-notch multinational companies are getting research done from their Indian bases. The most conspicuous sign of a booming economy is the rupee’s refusal to confirm to the law of gravitation.
This may have prompted many to think that India has arrived. This is where all the wonderful statistics suddenly look uninspiring when looked at from the per capita perspective. Even while the size of the economy is one of the largest according to the purchasing power calculation method, we are still in the company of the drought-and famine-infested sub-Saharan nations when it comes to the human development index. Right now, India’s closest competitors in this are Bangladesh and Pakistan, while Sri Lanka ranks much higher in the indices.
India’s dismal performance in infrastructure, health, primary education, sanitation, law and enforcement are all too familiar. The performance of India Inc. has little to do with active governmental intervention, or rather the lack of it. In the long run, it will not be possible for India Inc. to grow in isolation. Indeed, one reason behind China’s inimitable growth today is the wide social base of growth, compared to India’s narrow and exclusivist development.
...And problem areas
This is not to evince a socialist snigger at India’s surging economy. But from the market perspective itself, a large and buoyant market can only be ensured through a wide consumer base. Even with its limited investment in education, India has shown the power it can unleash in the global job market. But according to the Boston Consulting Group, the paltry investment will also result in about 50 million Indians being not simply unemployed but unemployable by 2020.
But branding is not always about what you do or what you produce, branding is about perception and positioning. The world has moved quite some distance in its perception of India — from a nation of snake-charmers to one of brilliant technology professionals powering one of the fastest-growing economies. But for those closely following the day-to-day action, it is clear that while we have arrived at a milestone, the destination is still quite far.
The Indian economy is doing well, and the proverbial Hindu rate of growth is hopefully history now. So, there is reason to celebrate. But let there be no mistake, India is up against a tall order and while celebrating the positive indices, keeping one’s feet on the ground might just keep Indians from being overwhelmed by their own brand image.