Reports

A report by investment banker Goldman sachs says that India will have a rapid economic growth in the coming years and it is going to be much stronger than any other countries in its development. India needs to invest around 500billion US dollars in development of infrastructure over the next 5 years. At the heart of India's growth story is its population, the generators of wealth, both as producers and consumers. The country has more english speaking people than in the whole of Europe when taken together. Its 300 million middle class are the real consumers and they have attracted the attention of the world and as the economy grows, the middle class people will also grow simultaneously.

Entering the retail driveway

The auto sector needs to explore innovative collaborative opportunities with the retail sector to add value to the shopping experience of the passenger vehicles. So far they have operated through the dealership network with showrooms mostly in the not so happening premises, auto showrooms are now beginning to move to retail centres to grab attention of new generation mobile customers. With increasing income, easy credit facilities, the attitude has changed and people have started buying new mobile handsets. Indian consumers are more likely to make spontaneous decisions on automobile buys as well. Also modern retail in India is increasingly playing a larger role in the economy through increasing tax collection, spurring consumption and economic growth, creating public spaces in urban India and large scale employment generation among lesser educated youth.

Rewiring for growth

Although many challenges have been faced by the IT industry, they have to find out some solution to tackle the problem. They cannot leave the grip to go off. Some of the extreme measures taken by the IT industry are to reduce the dependence on the US economy. They have to familiarize their products in other European regions and increase the exposure to other countries. The focus has to be shifted on the domestic market. Mainly countries like Australia and Canada have to be targeted because their economies are improving gradually. They are concentrating on newer verticals like pharma, healthcare and other utilities. They are trying to expand service lines and also to move away from linear growth path. They need to set up offshore centres that will give a global presence of that company.

Market Imperfections

An important obstacle to economic development is market imperfection. They relate to immobility of factors, price rigidity, ignorance of market conditions, rigid social structure and lack of specialisation. These factors can act as frictions and impediments in the achievement of an optimum allocation of resources. Due to these market imperfections, the efficiency of production in the economy becomes very low and the country's natural resources may remain utilized or underutilized, the employment will get misdirected. The labour cant move freely in search of higher rewards but remain where they are, though their marginal productivity is even. Capital will not be utilized for remunerative purposes.

Challenges in IT industry

IT industry is experiencing a great downfall in the recent times. Companies have reduced their placements and they have started packing up employees in different places. The US market is very volatile and there is no stability in the economy as there is a slowdown in all the economic aspects of the country. There is a fallout of subprime and credit crisis on banking and retail services. Oil prices have continued to soar and it has caused a huge impact on the IT industry. The inflation rate has increased to a great extent and inflationary pressures are piling up day by day. A fall in the operating margins proved to be very tough for IT industry. Talents are in short as they require highly experienced people to tackle the current crisis. Adding fuel to the fire are the protectionism threats that exists ahead of the presidential elections in US.

India's story

India's story is very strong especially for players who have long term patience and tenacity to focus, concentrate, hold and pursue the course. Raising concern and challenges should not be seen as pessimism towards consumption or consumers or the future of retail industry. In fact facing such challenges and overcoming them at an early stage will make many retailers reach and achieve a high share of Indian retailer pie. Some of the recommendations are service tax that should be made VATable against sales tax till we have the GST regime introduced in 2010. Retail is a service industry like hospitality and BPO. Women employees should be allowed to work in any shift with the retailers taking up similar responsibilities like any other industry. Single window must be there for shops and establishments irrespective of number of stores.