IDG Connect – Dan Swinhoe (Asia) - Is India Really Failing_
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16/10/2012 IDG Connect – Dan Swinhoe (Asia) - Is India Really Failing? 1/2www.idgconnect.com/blog-abstract/649/dan-swinhoe-asia-is-india-really-failing?region=africa Home > Blog Ab strac tTweet Tweet 1 0Posted by Dan Swinhoe Company IDG Connect10/16/2012Dan Swinhoe (Asia) - Is India Re ally Fail ing? When asked to write a piece on "Why is India failing?" I was surprised; IhadassumedIndia was stillboomingamid slowdow n in other BRICS countries. After doing a little research, the claim seemed to rin g true: the IMF recently lowered the coun try's growth projection to its lowest point in 10years and global agency Standard & Poor's thre atened to downgrade India's sovereign credit rating from the already low BBB- to junk grade within 24 months, while on the IT front India's net software exports have slid to a 10-year low and IT revenues for Q3 rose by just2%. So why the decline? Gover nment regulation seems to b e a m ajor issue. For example, S&P said that it couldimprove its outlook on the country if "the government im plements initiatives to reduce fiscal deficit, improves its investment climate, and increases growth prospects". In its World Economic Outlook released this month, the IMFsaid, "India's activity suffered from waning business confidence amid slow approvals for new projects, sluggish struc tural reforms, policy rate hikes designed to rein in inflation, and flagging external demand."Employment also seems to b e hitting a wall. Acc ording to Naukri's Job SpeakIndex, he job market has sloweddown and seen three months of decreasing recruitment rates. While lower hiring levels don't mean crisis, it does indicate a lack of growth or ambition from com panies. The f act that Indian IT companies are one of the 10worstaying employers in the wor ld is no doubt also hampering growth. Even in certain areas of business still enjoying rapid growt h, there are deep-seat ed probl ems. India alreadyenjoys 900 milli on mob ile phone sub scribers, and penetr ation is expect ed to rise from its current 51% t o 72% b y2016, but chronic overcrow ding of providers is causing troubles - while the average num ber of mob ile providers er country is four, India has 12. The lowest average revenue per user per month in the world, various corruption roblems around 2G licences, and a low uptake of 3G means the industry has failed to reach its potential - when the country 's biggest m obile phone operator, Bhart i Airtel, posts 10straight quarters of decline, something has to be wrong. While India's top spot for outsourcing may be safe for now, times are changing. The Indian BPO sector is still verystrong, w orth around $63.2 billi on in 2012, but competition from Chi na, the Philippines, South Af rica, and a backlash against outsourcing have all eaten away at the sector's growth. India's growth for the last few years reads 25.4%, 23.6%, and 15.7%, compared to China's 43.5%, 63.6%, and 33%, topping revenues of $53.8 billion this year. As with other areas, new ideas and avenues have to be brought to the table as other countries start to move into ground tradit ionally held b y India. It's not all b ad b y any means. Despite the employm ent slowdo wn, t he numb er of employers who say they intend to hire in the fourth quarter, outnumber those who report they will reduce payrolls, by almost20 to 1, and various India com panies saw decentQ2growth, and spending on smartphones and tablets continue to rise. And despite low levels of growth for software exports, 4% is still a decent number in a slow economy, and with Gartnerredicting Indian IT spending to rise next year by more than 7% to $72 b illion, the future st ill seems positive. With India b ecoming a b igger player on the G20 sta ge, accordingto US Federal Reserve chairman Ben Bernanke, it sounds promising that expert s feel confident investing in the I ndian economy after gover nmentreforms: "It is highly encouraging to see the current wave of economic reforms b eing initiated b y the Indian Connect with us: Search blog October 2012Editorial CalendarPresident "You didn't build that" is the tech industry's choice? Really? Way to kill the theoryof the rational actor. GamerFromJump 10-16-2012Dan Swinhoe (US) - US Elections pt. II: Tech Companies Funding the RomneyMachine I've done some variation of PR / Satisfaction type work for 2 decades now. This one rule works in an amazing array of circumst ances: If you have to say... G Wiz10-15-2012Kathryn Cave (Global) – “Awful” Leadership: A Crusade Against “Nice”? 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IDG Connect – Dan Swinhoe (Asia) - Is India Really Failing_