I

INDIA
DANCING WITH DESTINY
A Globetrotters View To ride the roads, walk the malls, and witness the hubbub of 24/7 business activity, in any small or large city in India, is to dance with destiny and opportunity. From global professional, 1 to villagers in oxcarts, 36 languages and 350 dialects, India is a land of diversity and extremes. What was, a short 20 years ago the land of snake charmers, yoga hippies, and backwardness, is today the hottest economy on the planet growing at a stunning 9%. Economic liberalization beginning in 1991, has completely transformed the Indian economy into the fastest growing economy on the planet! Thanks largely to the current Prime Minister, (previously Finance Minister) Manmohan Singh who lifted the iron grip of the state on industry and liberalized trade policy,the private sector now contributes almost 80% to the countrys economy. The reduction in import tariffs from as high as 400%, reduction of business licensing permit application from several months to 10 days, and reduction of income tax from 97% to 30%, has come Issue No 10

a long way in attracting foreign investment, reducing capital ight, and encouraging small business. Foreign exchange reserves now stand at $400 Billion... (with a B) putting India among the top 10 countries holding such reserves. Further, the once competition-shy Indian corporate sector has come into its own and taken on global players. Indians who ed to Silicon Valley to fuel the venture capital boom, are now returning to India, bringing their investment capital and expertise back home

As a result, hordes of Indias 1.3 BILLION people

browse top global brands in upscale malls or places like the chaotic Nehru place (right)... where one can nd every major brand of computer, software, mobile device, ... or clothing. I didnt ask about copyrights for the vast list of so ftware I was given on the street, and I didnt see any tags on the clothing. If you want tags choose the fancy Megacity mall. Indoor food market or outdoor market (practice your bargaining power). Both are equally crowded and strong indicators of Indias newfound purchasing power with 400 million raised from poverty since 91 and 300 millionstrong middleclass, growing at 5-6% per annum.

T T L E N E C K S P R O G R E S S All of the above sounds great, but behind this glorious growth, lurks disruptive corruptive business practices, that are discussed openly at anti-corruption conferences like this (right) attended by top business leaders. Nowadays even political leaders, like Sonia Gandhi, leader of the largest Congress party in India, is adopting corruption as a new platform. Weve come to understand that EVERYTHING is commissionable in India, and when questioned about whether one can do business without it, the answer is Certainly Madame, but how long do you want to wait? Intelligent observers tell us if India could rid itself of its pandemic corruption it could become a far more developed economy within a few years. Yet, most of government has no interest in change, they have jobs for life and gain promotion based on tenure. Those who have power to give permits and licenses provide them to those who pay, some are deep in public scandal, yet none go to prison. Police ofcials cannot survive on their salary and bribes are considered as part of it. Businesses prefer cash dealings to avoid taxes. Thus, corruption works for India, but is a barrier to greater growth as capital ows to private interest vs. greater good. Add to this the lingering caste system that can put a glass ceiling on any career. Some claim it is gone, some have broken through it, largely with job opportunity via out-migration. Therefore, we witnessed it lingering. As bad as corruption is, the bigger problem is INFRASTRUCTURE, which will drive even the highest Hindu Priest to insanity. We struggled for 7 hours to travel 100 miles from rural India to Bhopal airport to meet our 20:30 ight. The farmers had successfully blocked every major road to protest lack of electricity ... and no wonder, their wives walk miles to gather rewood for cooking and light. Roads with potholes as big as volcanic craters are lled by barefoot women in saris carrying gravel on their heads. At this rate the road construction will take more than their lifetime. No bobcats or caterpillars here! Villages seem endless.... like going through small town rural North Dakota with the entire town population gathered on main street for the town parade every few miles. Similar but different, village parades are the stuff of life .... awash with shops selling everything from mobile phones, to tailoring, to car and bike repair, to haircut and shave ... all are out of doors beside the bustling markets, encroaching upon a onelane main street... with another main difference ... lending new meaning to the word Sacred Cow, COWS RULE the ROADS in India. Their staring glare dares all that want to share their path .... buses, bikes, baby carriages, semis, tractors, taxis, tuk-tuks, all-terrain vehicles .... to defy them... As if to say, Go ahead, hit me. Hit one and pay the farmer a handsome price, then return to the holy Ganges River to cleanse yourself/ gain repentance, in respect to Hindu law. One does not eat cows in India, they exist for milk, manure (fertilizer) dowry, and natural speed bumps.... thus I suspect their life expectancy is longer than mine and proliferation most probably surpasses prairie dogs. We long for I-94. (River Ganges Below)

Additionally, India may have 700 MILLION mobile phones --far more phones than toilets - but keeping your cell, camera, and computer powered is an absolute ordeal ... the power literally goes out every hour or several hours, and if youre staying in a high-end place you may be lucky enough to hear the whir of a back-up generator kicking in... its a wonder I have a hard disk left, its been shocked into servitude several times. As for the mobile phone service, the only way to get a signal in rural India is to climb to the top of the water tower. Our Guide was seen calling his faraway mother from this tower every few days as a dutiful son. When powered, cell services offer everything from latest produce prices for farmers, to INSTANT business process outsourcing, to bank transfers, (leapfrogging long lines at banks) Look for the ATM that resembles the lineup at Best Buy the day after Thanksgiving -you know that one has cash

INDIA

Another bottleneck to future growth is a CRITICAL LACK OF SKILLED LABOR,both management and workers, which impacts quality and productivity,and is a major roadblock to development. This was evident in a number of areas like construction and hotel/motel management. Essentially, you can take the boy out of the village, but taking the village out of the boy is not something that happens overnight. Plans for future development include higher ed enrollment expansion to 40 million by 2020, from present 14 million. This means India badly needs teachers and cannot import them because the infrastructure and salaries are rather poor vs. other countries. The construction industry is Indias biggest employer, after agriculture, with about 32 million workers --- 83% are unskilled. Construction is expected to employ 83 million people by 2022 representing a great opportunity for construction management training - particularly for masons, carpenters, and road construction. Construction companies are setting up their own training schools and one could consider tapping into this market. FMS, The prestigious Faculty of Management School at Delhi University is highly involved in the plan to get to 40 million, and plays an integral part in developing management talent. Meeting the demand is a huge challenge given the lack of skilled teachers, lack of professional managers to meet the need as part time teachers, and lack of infrastructure. Faculty at right all have overseas experience and we found graduate students (below) to be highly engaged, disciplined, and dedicated to improving future education as alumni. Today, India sends more students to U.S. colleges than any other country in the world. In 2008, over 94,563 Indian students ENROLLED IN U.S. COLLEGES and UNIVERSITIES. Given the above, it could be lots more.

Success Despite the Gods: Having said all this, Indias entrepreneurs can seemingly manage through any obstacle. They have the WORLDS LARGEST STOCK MARKET, second only to NYSE; the WORLDS LARGEST MILK PRODUCER, THE SECOND LARGEST PRODUCER OF FOOD, including fruits and vegetables. and the WORLDS SECOND LARGEST PHARMACEUTICAL INDUSTRY( after China).

BPO: Their services sector is STELLAR and going global at a rapid pace. As an example, needing nancials within 24 hours to show to investors, I called SSRA, a nancial and business process outsourcing rm on a Sunday morning. The Director answered on his mobile phone. He said , Sure. and handed me over to a 40 year banking and nance veteran who developed a beautiful set of nancials fo presentation purposes overnight. Turns out they hav many global clients and advised me on a number of tax holidays as well. I am forever grateful to Director Suresh Goyal (pictured on page 1 with Susan) Please use his company: SSRAONLINE.com .

In India, you will nd rich and poor, chaos and quiet upscale to lowscale, and everything in between ... with opportunity in every corner. You may not know it, but you are destined to dance with India . ADDING FUEL TO THE FIRE, over half the population is rural and relies largely on subsistence farming. There is no way to identify these individuals as part of the economy, which leads to a difcult phenomena ... only 20% of the population pays taxes of any kind. Of course, in a rapidly expanding economy, there is a huge migration from the rural areas into the cities. 300 million urban population going to 400 million or 50% of population. Consequently, infrastructure, pollution , trafc, housing are in a dire state and with 40% of the population under 25 there is a crying need for adequate k-12 education . School dropout rates remain high at 43%. In over -crowded places like Delhi, they continue to issue 1000 car licenses per day. Fuel to the re.

INFLATION: Indias banks are conservative and well managed, and coupled with the cash economy, the country barreled through the nancial crisis with 6% growth! Ination is thus inevitable given the growth in India. Salaries are not keeping up with ination and there are street protests about the price of onions and potatoes - a staple in the Indian diet. Onions on January 11, 2010 were 11 rupees per kilo, now, in December 2010 they are 60 to 70 rupees per kilo! Additionally, real estate is out of sight because land for apartments is scarce. The feeling is that investors buy up the real estate and ip it .... sound familiar? Central Bank of India has reversed its monetary policy to control ination - they are providing no stimulus package and interest rates are rising to control ination. Additionally, back to infrastructure, food is rotting in hot warehouses by the thousands of kilos, if rotting, people believe it is theirs to forcibly take, but law will interfere, only contributing to unrest, and underlining the infrastructure issue.