Transcript Growth Parameters – Rating of Cities

“Japan-India Public Private Partnership Seminar”
-- Towards New Economic Partnership –
Session 3
“Promising India”
14 February 2008
India International Centre Annex, Delhi
1
Contents of Presentation
Issue 1:
Economic Growth Potential of India:
Present & Future
Issue 2:
Economic Partnership and
“Complementarity” of Japan and India
Issue 3:
National Development Structure of India
Issue 4:
PPP and Directions of Japanese ODA
India-Japan PPP Forum
2
Issue 1:
Economic Growth Potential of
India: Present & Future
India-Japan PPP Forum
3
Regional Economic Linkages:
The Chain of Sub-regional Economic Circles in Asia
JAPAN
East Asia Economy
INDIA
India is one of the
most potential Asian
growth centers.
ASEAN Economy
The Bengal Bay Economy
India-Japan PPP Forum
4
GDP Growth
in Comparison with
BRICs
Changes in GDP (at Current Prices)
China
Brazil
China
India
Russia
Brazil
India
Russia
India-Japan PPP Forum
5
GDP Growth in Future
1990-2000
2000-2010
2010-2020
2020-2030
World Total
3.2
4.3
3.7
3.2
India
5.6
7.2
7.2
5.4
USA
3.3
2.4
2.6
2.4
Japan
1.3
1.7
1.0
1.1
EU
2.4
2.3
2.1
1.9
ASEAN
4.5
5.3
4.9
4.6
China
10.4
9.6
4.5
3.0
Source: IMF
India is projected to achieve a long-term economic growth at higher rates than
the world average by IMF.
India-Japan PPP Forum
6
A Long-term Perspective on
Per Capita GDP in BRICs
Per Capita GDP, Market Exchange Rates
Population and Growth Rates Stabilise
$US (000s)
120
An Institute made a super longterm projection of GDP Per
Capita of BRICs up to 2064.
100
USA
China
80
Russia
INDIA
India
60
40
Brazil
20
2008
2016
2024
2032
2040
India-Japan PPP Forum
2048
2056
0
2064
Source:
Open Cities
(Spring 2008)
7
Energy Resource Extraction
Natural Gas at Eastern Off-shore
Dhirubhai NG Field
• NG Deposit: 35 tcf = sufficient enough to
substitute the imported volume
• Production: to be commenced from 2008
India-Japan PPP Forum
8
Indian Students Abroad
Ranking of Source Markets in Major English-speaking Countries
India-Japan PPP Forum
9
Summary: Indian Economic Outlook


India is one of the most potential Asian growth centers.
High economic growth expanding domestic and
international markets.




Such a high economic growth momentum is projected to
last in the long-term.
Service sector and ICT business have been long leading
such a high growth.



GDP growth: 9.4% in 2005~6
GDP per capita: US$ 737 in 2006
Supported by higher educated human resource
Producing human resource with international manner and
technologies in English-speaking countries.
Energy resources are sufficiently available to support a
sustainable economic growth.

Shifting to Natural Gas
India-Japan PPP Forum
10
Issue 2:
Economic Partnership and
Complementarity of India-Japan
India-Japan PPP Forum
11
Changes in Trading Partners of India
Mill. US$
Import + Export Amount
80,000
70,000
60,000
1) Europe
50,000
2) The Bengal Bay Economy
3) Other ASEAN Countries
40,000
4) WANA (West Asia/North Africa)
5) Japan
30,000
6) Korea
7) China (inc.Taiwan)
20,000
10,000
0
2003
2004
2005
2006
2007
Trades with countries facing the
Bengal Bay are notably
increasing at the same rate as
that of “China.”
N.B. The Bengal Bay = Sri Lanka, Bangladesh, Myanmar, Thailand, Malaysia, Singapore & Indonesia
India-Japan PPP Forum
12
Shares of Trading Partners
Import + Export Amount
1.4%
2001
26.8%
8.5%
9.2%
7.1%
3. 8%
2. 3% 2.3%
2007
23.3%
0%
10.4%
20%
40%
23.4%
11.2%
60%
80%
Europe
The Bengal Bay Economy
Other ASEAN Countries
WANA (West Asia/North Africa)
Japan
Korea
100%
China (inc.Taiwan)
The share of “Europe” decreased, while the share of “WANA”
significantly increased, followed by China and the countries facing the
Bengal Bay. Japan’s share is comparatively low.
India-Japan PPP Forum
13
Sector-wise FDI Inflows
(Top 12 from 2000~2007)
Sector
The three share
44% of the total
Amount in Rupee
(Million)
Amount in
US$ (Million)
% of Total
Inflows
1
Service (Financial & Non-financial)
378,297
8,571
20.4
2
Computer Software & Hardware
281,621
6,263
15.2
3
Telecommunications
155,455
3,539
8.4
4
Construction Activities
94,474
2,171
5.1
5
Automobile Industry
82,398
1,830
4.5
6
Housing & Real Estate
61,533
1,451
3.3
7
Power
59,487
1,285
3.2
8
Chemicals (other than Fertilizer)
59,477
1,336
3.2
9
Metallurgical Industry
45,714
1,066
2.5
10
Drugs & Pharmaceuticals
45,507
1,009
2.5
11
Electrical Equipment
45,420
1,048
2.5
12
Cement and Gypsum Products
41,666
941
2.3
India-Japan PPP Forum
14
Top Investing Countries:
FDI Equity Inflows
Cumulative FDI Equity Inflows (US$) between 2000 -2007
Mauritius
USA
25.5%
Japan is ranked at
6th place, sharing
only 4.0%.
1.2%
1.3%
1.4%
2.7%
4.0%
UK
Cumulative
Inflows
Total:
US$ 47,205 mill.
4.7%
4.7%
39.1%
Netherland
Singapore
Japan
Germany
France
Switzerland
7.2%
India-Japan PPP Forum
8.1%
Cyprus
Others
15
Tourism Development
India
World
Average
Contribution
of Tourism to
GDP (2005)
6.1%
10.4%
Employments
of Tourism
(% of TL)
42 million
(8.8%)
(7.6 %)
Tourism sector provides a
greater amount of
employments
Source: “Incredible India” Sep. 2007 Ministry of Tourism
India-Japan PPP Forum
16
Tourism Partners
Japan is ranked at
7th place with 120
thousand tourist
arrivals
Source: “Incredible India” Sep. 2007 Ministry of Tourism
India-Japan PPP Forum
17
FDI Flows vs. Int’l Tourist Arrivals
Money (FDI) and human
(Tourist) transactions are
mutually correlated.
The elasticity in recent
years is extremely high.
18,000
FDI (US$ Million)
16,000
14,000
2007
12,000
10,000
8,000
6,000
4,000
2002
2005
2001
2006
2,000
0
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Int'l Tourist Arrival ('000)
India-Japan PPP Forum
18
India-Japan Trading and FDIs



Trading:

The shares of “WANA” , “China” and “the Bengal Bay Economy” are
significantly increasing, while Japan decreases its comparative share.

Trading volume with Japan is increasing at 17.5% p.a., but Japan is still a
minor partner, sharing only 2.3% of the total.
FDIs:

India is attracting FDIs in three (3) strategic sectors, namely, “Services
(financial and non-financial)”, “Computer Software & Hardware” and
“Telecommunication”. These three share 44% of the total FDIs.

FDI inflow form Japan is still weak, compared to USA, UK and Singapore,
being ranked at 6th place.
Tourism

A robust growth in Tourism Sector is the result of successful
internationalization in the economy. This is correlated with money flows,
namely, tourists come and/then money comes.
A substantial potential for further expansion of Trade/FDI between India
and Japan exists, noting the complementarity of Japanese endowments in
ICT sector, automobile and other high value-added industries.
India-Japan PPP Forum
19
Issue 3:
National Development
Structure of India
India-Japan PPP Forum
20
Regional Economic Linkages:
Importance of being linked with Asian economies
East Asia Economy
JAPAN
INDIA
ASEAN Economy
Technology and capital shift
The Bengal Bay Economy
India-Japan PPP Forum
21
The Bengal Bay Economy
BANGLADESH
MYANMAR
INDIA
THAILAND
SRI LANKA
MALAYSIA
The Eastern India is encompassed in
the Bengal Bay Economy that stands
for a sub-regional industrial and
capital linkage with supply chain.
India-Japan PPP Forum
SINGAPORE
INDONESIA
22
National Development Structure
- Golden Quadrangle Delhi
Kolkata
Mumbai
Hyderabad
Chennai
Bangalore
India-Japan PPP Forum
The national economic structure
shall be formulated with four (4)
major metropolises and two (2)
strategic growth centers such as
Bangalore and Hyderabad…
23
Co-Developmental Triangles of Eastern Corridors
&
Balanced Growth of Indian Nation
Delhi
Kolkata
Mumbai
Co-Developmental
Triangles of Eastern
Corridors
Hyderabad
Chennai / Ennore
Bangalore
India-Japan PPP Forum
Connection to
ASEAN Industrial
Clusters and EastAsian Countries
24
Five (5) IT Centers in India
India’s IT and BPO exports from STPIs, FY 2004 (US$ billion)
NCR
2.2
IT Industries are likely
located in Southern three
major centers: Bangalore,
Chennai and Hyderabad.
Mumbai
1.0
Hyderabad
1.1
Bangalore
Chennai
4.1
1.7
India-Japan PPP Forum
Source: Press articles;
web searches;
NASSCOM
25
FDI Equity Inflows in Major Cities
RGI’s Regional Office-wise:
NCR
Apr. 2000 to Oct. 2007 (US$ Billion)
9.5
Kolkata
0.7
Mumbai
10.8
Hyderabad
2.0
Bangalore
Chennai
2.9
2.9
India-Japan PPP Forum
Southern three major
centers have attracted
FDI equivalent to that
into NCR.
26
International Gateways for Market Linkages
Delhi
Western Market
Oriented Economy
Kolkata
Hyderabad
Mumbai
Bangalore
Chennai
India-Japan PPP Forum
Eastern Market
Oriented Economy
27
Growth Parameters – Rating of Cities
Parameter
Delhi
Mumbai
Bangalore
Kolkata
Hyderabad
Telecom Connectivity
4
4
4
4
5
Power Supply
2
4
3
5
4
Airports & Hotels
4
5
3.5
3
3
Public Transport
1.5
3
1
2.5
3
Roads
4
1.5
1
1
3.5
Housing
4
3.5
3
3.5
3
Cost of Living
2
1
2.5
4
4
Talent Pool
4
4
4
4
4
25.5
26.0
22.0
27.0
29.5
Total Score
(Source: The Times of India, Dt.3rd August, 04, Page10.)

Ranking for 5 to 1 indicate vary good to very poor

Cost of living indicates low to high from 5 to 1

Rating in the form of 4/3 indicate preference for the first figure, in this case 4
India-Japan PPP Forum
Road development is
urgent
28
Strategic Industrial Corridor:
Chennai - Bangalore
Hyderabad
From Ennore Port
Bangalore
From Chennai Port
Chennai
Ennore Port
India-Japan PPP Forum
29
Spatial Concepts on the National
Development Structure

Sub-regional Economic Chain


The Bengal Bay Economy


Four (4) Major Cities + Two (2) Strategic growth Centers
The Delhi – Mumbai Industrial Corridor


Economic integration with potential markets
Golden Quadrangle Structure


Importance to link India with ASEAN and East Asia
Economies
The Western Market-oriented Gateway
The Chennai – Bangalore Growth Corridor

The Eastern Market-oriented Gateway
India-Japan PPP Forum
30
Recommendation:
For Balanced Development Scenario
Recognize three metropolises as
strategic growth centers :Chennai,
Bangalore and Hyderabad
The southern and eastern part of
India be a strategic development
region towards the balanced
national economy
Needs / Requirements of
the Society and Private
Sector
Further strengthen the international
transport gateway functions at Chennai:

Fully mobilize Public and
Private resources and
knowledge in both
countries, India and
Japan


Functionalize and enlarge Chennai and
Ennore Ports;
Improve the Logistic and Inter-modal
Systems with hinterland economies in
Bangalore, Hyderabad and rest of India.
Formulate the Chennai-Bangalore
Corridor as a strategic Industrial zone
with improved roads
India-Japan PPP Forum
31
Issue 4:
PPP and
Direction of Japanese ODA
India-Japan PPP Forum
32
PPP and Bilateral Partnership
How to promote it ?
India
Public
Common Policy
Agreement
Public
Partnership
Private
Deregulation
Investment,
Technology,
Human Resource
Partnership
Private
Japan
33
Outcomes of the India-Japan Joint
Study Group (June 2006)



Bilateral inter-governmental negotiation to develop a Comprehensive
Economic Partnership Agreement (EPA/CEPA), consistent with WTO:

Trade in goods and services; measures for trade promotion

Promotion and liberalization of investment flows

A Joint Task Force to be organized with representatives of business community to
seek for an agreeable scheme of CEPA.
Japanese ODA:

To support PPP-based projects (economic and social infrastructure), involving the
“Viability Gap Funding System”

To encourage FDI through improvement of infrastructures

To promote best-practice projects in terms of transfer of management skills and
technology (like Delhi Metro)

To expand human exchanges

To promote projects to bear a synergy of financial and technical cooperation.
Special Economic Cooperation

To promote a synergy between Japanese manufacturing technique and Indian
software in ICT, Energy, Logistic and Automobile Sectors
India-Japan PPP Forum
34
A Public-Private Partnership Model
Needs of the Society
and Business Sector
Facility Development &
Procurements
Government
Public Facilities:
- Civil Structure
-Related Infrastructure
Subsidy or Viability
Gap Fund
Management Unit (PMU)
Management
- Government
Staff
Advisor (Consultants)
Service Charges
on PFI-contract Basis
Performance Monitoring
Procurements:
- Operation systems;
- Software and Knowhow
- Maintenance tools
- Others
Lease & Maintenance
Contract (TAC-TMC)
Private Operator
(Special-Purpose
Company-SPC)
-Project Finance
-Design
-Construction
-Operation
-Maintenance
Investment
35
A Model of Players’ Demarcations:
for Development of the Chennai–Bangalore Growth Corridor
Public
PPP
Private
Expansion of
Port Facilities &
Equipment
Operation &
Management
Container
terminals
Roads & Highways
National and
Local Roads
Expressway
Maintenance &
Management
Logistic System
Inter-modal
System
Inter-modal
Logistic Center
Inland Depot
Strengthening of Gateway Functions (Hardware)
Chennai Port
Ennore Port
Improvement of Social and Managerial Systems (Software)
Improvement of Custom System
(ICEGATE)
Legal
Arrangement
System
Integration
BPO; Technical
Supports
Deregulation & Reform of Legislative
& Institutional Systems
Primary Task
-
Consultation
Incentives
Provision
Partners
Projects
Formulation
Promotion of DFIs
India-Japan PPP Forum
36

India-Japan PPP Forum
Thank you …..
37