Abheek Singhi of Boston Consulting Group Addresses IIM-K Students at Horizons 2007

Abheek Singhi of Boston Consulting Group Addresses IIM-K Students at Horizons 2007

In 1820, China was the biggest economy in the world and accounted for 30% of the worlds GDP. India was second with 16%. Interestingly, USA accounted for only 2% of global GDP. The predicted economic scenario for 2050 is uncannily similar to what it was almost 200 years ago.

This was just the beginning of an hour of mind-boggling insights into the past present and future of India Inc. delivered with utmost flair by Mr. Abheek Singhi, Partner & Director, Boston Consulting Group, at Horizons 2007, the Annual Management Conclave of IIM Kozhikode. He set the context for the talk by talking about the general trends in the Indian economy and said India presently is seeing the third wave of growth. The first occurred during the de-licensing of the 90s, the second during the dotcom boom. The present wave of growth is unique in that, the unpredictability of the Indian economy seems to have given way to rapid acceleration of economic progress year on year, something that is unprecedented in recent history. The world now sees India as a strong, confident and dependable young nation which knows its strengths and isn’t afraid to claim its place. This recent surge of seemingly unstoppable growth has unleashed India Inc.

Foreign Investments are not Neo-Colonialism

Mr. Singhi said that the performance of Indian stock markets, which is used as a yard-stick to measure the growth of the economy, isn’t totally accurate. The rise in the SENSEX from 12000 to almost 18000 is mostly due to a few companies like Reliance, Bharti Telecom, and ICICI, etc. However, we can’t take away the great achievement of such companies because of which the total shareholder returns in Indian Stock Market is at a 15 year high of 40% which is way above the global average of 2%. There are countries like Serbia where the returns are staggeringly high at over 100% but have very low market capitalization. It is the high market capitalization of the Indian Stock Markets coupled with 40% returns, which make India a favourite destination of investors across the globe. Many people have the notion that this wave of foreign investments in India is sort of a neo-colonialism as the profits go abroad. However, it is the Indian private companies, growing at 42%, the Public Sector Units at 37%, in comparison with the MNCs in India growing at 18%, showing that the growth is not entirely driven by MNCs but mostly by Indian private and public sector companies.

Increasing Confidence

One thing commonly noticed about Indian MBAs is that they undersell themselves, Mr. Singhi said. Compared to their counterparts from B-schools like Harvard and Stanford, Indians have always been way better at analytical skills but were lower on confidence. He illustrated this with his encounter with a foreign investor who invested in India and China. Discussions with Indians centred on the possible problems which could prevent them from meeting their targets and discussions with the Chinese always centred on how things are going to get only better. This in spite of the fact that the Indians always delivered results and met their targets whereas the Chinese investments had been making losses! This is now changing rapidly, Mr. Singhi said, quoting the recent marketing pitch by the CII in New York 'India Unleashed'. Even magazines like The Economist which used to see India on the lighter side of the balance with China now see us as equals in terms of growth even while quoting the same figures as before.

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Contributed by -
Ashish Thakur,
Media Cell,
IIM Kozhikode.

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