10Apr2016

Is the 7+% Indian GDP Growth in a sluggish economy real?

Let me start with the global economic growth at 2.4% in 2015 with the mature economies contributing 1.9% and the emerging market economies contributing 2.9%. The current forecast for 2006 is 2.5% (Global) with 1.9% from mature economies and 3.0% from the emerging market economies. The US economy may surely experience a slight surge in the growth with the increase in defence manufacturing. But for a slight improvement in Africa all the other countries seem to be the same as 2015. Therefore, it is hard to expect any major change in 2016 from what had been happening for a couple of years now.

Now on the domestic front 2015 the GDP growth rate has been at ~7.3%, while almost all my clients from manufacturing, machine tools, real estate, horticulture, etc. and the other major companies I know of haven’t had such a great year as compared to for example the years 2005 to 2007 for example with the GDP growing at around 9.4%. Now the stock markets have been more or less stagnant. Whereas during 2005 and 2007 there was a at least a two-fold increase. Last year both the exports and the imports have declined too. The overall index for the core sector has been at ~2%. I then became curious to analyse the cause and effect from my perspective.

We have seen in the last couple of years an intensified effort to computerise a lot of government processes. At the same time the e-commerce Industry has been continuously maturing since maybe last two years. The tax collection too has significantly increased in the recent years. Therefore, I believe the 7+% GDP growth we see could be mainly due to the following reasons.

  • Robust accounting of revenue due to automatic online transactions with e-commerce and aggregators – UNACCOUNTED REVENUE NOW ACCOUNTED!
  • Expansion to the rural markets with improved infrastructure, again mainly with a robust accounting of revenue –INITIAL SURGE IN NEW MARKET WILL DIE DOWN WITH NO ROBUST WEALTH CREATION MODEL IN RURAL AREAS!

Additionally, the “Make in India” initiative and FDI relaxation will further encourage foreign brands to manufacture in India. Like the ones already present they too will start-up with an exceptionally high efficiency levels.

But for a very limited handful of Indian companies with own brands as well as contract R&D | Engineering | Manufacturing, most of the Indian companies have a phenomenal potential to surpass the global standards of consistent operational efficiency. The main deterring factor is the lack of consistently practicing the basics at all levels, while mediocre superficial practices are in abundance.

Now, combining these hypotheses on the domestic front and assuming that the global economy will continue to be sluggish for a couple of more years, the India industry on the whole must become exponentially more efficient on the one hand and at the same time value innovate products/services for the global market on the other, to compete with the existing and new foreign companies not only on the domestic but also on the global front. This transformation can become a thrilling journey, since it is just about regularly practicing the basics across all levels. Furthermore, the insights leading to insecurity and jitters can become the drivers to excellence through Coaching.

I have listed 10 key questions to be asked:

  1. Everyone in our organisation proactively looks for new insights and regularly challenge themselves to continuously enhance their skills?
  2. Everyone is recognised as an EXPERT and as highly PASSIONATE | RELIABLE | ACCOUNTABLE for completing the tasks?
  3. All the key players have access to all the data | information | facts and proactively engage with others for evolving a common perception of their respective current reality?
  4. Is everyone in the organisation inspired with the organisation’s MISSION | VISION | VALUES and have defined intermediate GOALS?
  5. Gaps to Goal & Measures identified/monitored by everyone in the organisation?
  6. Both the won and lost orders/customers are analysed and the learning deployed through updating of guidelines and checklists for practicing farming?
  7. Are all the process variables being controlled for zero defects?
  8. Good quality Products/Services are being delivered on time (100% On time in full)?
  9. Both the TOP LINE and BOTTOM LINE are improving significantly with the identified approaches and all the PEOPLE involved are INSPIRED?
  10. Every employee proactively seeks feedback (mostly informal) from Subordinates |Peers | Superiors on the decisions and behaviours for self-reflection and calibration.

This is really a great God given opportunity to get us all upto speed in the global market!

Happy Reading, Thinking and Doing!