India to strengthen its hydropower portfolio

India to strengthen its hydropower portfolio with 60,000 MW addition by 2025

India, with its enormous demand for power to serve its ever-growing economic expansion, is


planning to get an additional 60,000 MW of electricity from various hydro-power projects by the end of

2025, says India's Minister of State for Power, Jairam Ramesh. The Minister, during his recent visit to

Nepal, announced that the country seeks to generate 50,000 MW of hydro-power through its domestic

resources by 2025, while sourcing the rest of 10,000 MW from Bhutan.

River-intensive Indian state of Arunachal Pradesh alone would produce 25,000 MW of entire domestic

hydel power production, while the other 25,000 MW would be generated from new hydel power projects in

Jammu and Kashmir, Sikkim, Uttarakhand and Himachal Pradesh.

India is already into buying power from its neighbour, Bhutan, after it helped the latter develop new hydropower

projects, generating 1,400 MW of electricity, with another 1,100 MW of hydel power generation in

the pipeline.

India has also entered into a memorandum of understanding (MoU) with the Government of Myanmar to

develop hydro-power projects in the Chindwin basin, with the 1,200 MW Tamanthi project identified as the

first one to deliver. India is also engaged in two large transmission projects in Afghanistan and partnering

with Sri Lanka on setting up of a 500 MW thermal plant in Trincomalee as well as on grid-interconnection.

Power flow between India and Nepal is also expected to go up once the latter start to generate 10,000 MW

of hydel-power within the coming decade and trade it with India. India is also likely to raise the proportion of

hydel power in the hydel-thermal mix from the present 25:75 to a more desirable 40:60 over the coming 25

years
.

Global turmoil to have minimal impact on India

Despite financial crisis in the US market, India would continue to grow at high rate of 8% to 9%
in the next couple of years.
Chief economic advisor Arvind Virmani told  financial crisis will have a minimal direct impact on Indian
economy and it will grow at the projected rate of around 8% in 2008-09 and 9% in 2009-10.
The main reason behind the optimism is correction in the commodity prices in the international market,
because of the the slowdown in the global economy. The crude oil prices have already corrected to around
$ 100 per barrel from over $ 140 per barrel few weeks back. This will help bring down the inflation in the
country. Virmani said that by March 2009, inflation will be brought down to single digit from over 12% at
present.
However, the financial crisis will have some indirect effect on the Indian economy as it will lead to liqudity
tightening. This will lead to firming up of the interest rates, affect the inflow of foreign direct investment and
export of goods and services to an extent. But, Virmani said these will not have much effect on the growth,
as they can be addressed by tweaking the government policies.
Goldman Sachs also felt in the same manner. In a report, it said, "We believe the credit crisis, which
reversed the tidal wave of cheap foreign capital over the past few years, will have less of an impact on the
economy's fundamentals."
If the inflation is brought down to single digit, the government and the RBI can take measures to ensure
that liquidity crisis does not affect economy. Virmani said that India's financial system remained intact even
during the present crisis. This, he said would give confidence to the foreign investors, including the nonresident
Indians to invest in India.
Goldman Sachs pointed out India's external sector is holding well and various indicators suggest condition
is undercontrol. The financial sector, the report said, remained sound, mortgage are a fraction of total credit
and exposure to inflated real estate is small.

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India's mobile telephony segment to offer major scope for growth: ITU

According to the Geneva-based International Telecommunication Union (ITU), a leading UN
agency for information and communication technology issues, India's current mobile telephone
penetration rate of about 20 per cent and market liberalisation policies are some of the factors that may offer "great potential" for growth of telecom companies.
Further, according to ITU, while India had about 296 million mobile subscribers by end-July 2008, the world's second-most populous nation offers major scope for growth in terms of numbers. Also, market liberalisation in India has contributed majorly in spreading mobile telephony driven by increasing competitiveness and price reductions.
India's mobile telephony operators now compete for low-income customers and the Average-Revenue-Per-User in India has touched almost US$ 7, one of the lowest in the world, the data revealed.
The report also stated that developing countries like India and China are witnessing an upsurge in the number of mobile phone subscribers which may lead to growth in the numbers to four billion by the end of the year worldwide. The BRIC (Brazil, Russia, India and China – incidentally China, the world's largest mobile market, too has surpassed the 600 million subscriber mark by mid-2008) economies are expected to account for over 1.3 billion mobile subscribers by the end of 2008, owing to increasing impact in terms of population, resources and global gross domestic product (GDP) share.

A rich harvest from Kisaan Bazaars

Organised retail might be faltering in urban India, but is booming in rural India, going by the experience of DCM Shriram Consolidated Ltd’s Hariyali Kisaan Bazaar (HKB). Aimed exclusively at rural India, the company has seen sales from its 160 stores more than double in the last couple of years.

Average sales at an HKB store have gone up to Rs 5 lakh a day during the harvest seasons, while it is around a tenth of that during the lean season. That means the turnover of a single HBK store is over Rs 6 crore, annually, while the investment cost varies between Rs 2 crore and Rs 3 crore.

The growing popularity of HKB stores has also prompted banks and insurance companies to look at possible tie-ups to tap the rural customer. ICICI Lombard and HDFC Bank have already tied up with HKB for their products. Though he furnished few details, Ajay S Shriram, chairman & senior managing director, DCM Shriram Consolidated, said, “Banks and insurance companies get a ready customer base on a platter.”

Shriram said HKB’s retail model was developed exclusively for rural customers. “We have no intentions to bring it to urban areas; it has been designed for rural customers,” he said, adding that retail in rural India is commercially viable.

HKB not only sells products relating to agriculture like fertilisers and seeds, but also household items as 40% of rural India comprises those that are not engaged in farming, Shriram pointed out.

The success of HKB has also encouraged the company to launch pulses and masalas under its own Hariyali brand.

Tourism And Hospitality Industry in India

The Indian tourism and hospitality industry is on a roll, driven by a huge surge in both business and leisure
travel by domestic and foreign tourists. The year 2006 was not only a record year for India's inbound
tourism but was the fourth consecutive year showing a double-digit increase in foreign tourist arrivals.
Moreover, the growth of tourist inflows into India was well above world average, leading to a rise in India's
share in world arrivals from 0.37 per cent in 2001 to 0.53 per cent in 2006. Also, as noted by UN World
Tourism Organisation (UNWTO), the growth of the Indian tourism industry was instrumental in the
'emergence' of South Asia as a tourist destination.
Further, tourism is an important industry in the Indian economy contributing around 5.9 per cent of the
Gross Domestic Product (GDP) and providing employment to about 41.8 million.
Inbound Tourists
The flow of foreign tourist arrivals continues to grow in the current year. On the back of 14.3 per cent growth
in tourist arrivals in 2006 over 2005, foreign tourist arrivals grew by 12.4 per cent during the first ten months
of 2007 to reach 3.89 million as against 3.46 million during the corresponding period last year.
Along with the rise in foreign tourist arrivals, foreign exchange earnings showed a robust growth of 25.6 per
cent during January-October 2007 to touch US$ 6.32 billion as against US$ 5.03 billion during
January-October 2006. On the other hand, in the whole of 2006, earnings grew by 14.6 per cent over 2005
to total US$ 6.56 billion as against US$ 5.73 billion in 2005.
Outbound Tourists
With the economy growing consistently at over 9 per cent, increasing disposable incomes, a change in the
spending habits, liberalisation of exchange controls, increasing affordability due to numerous holiday
packages and cheaper air fares, outbound tourist traffic has been growing at a rapid pace.
The outbound travel market has been growing at an annual average growth rate of 25 per cent, with an
estimated 7 million people travelling abroad in 2006-07. Further, the United Nations World Tourism
Organisation (UNWTO) estimates this figure to reach 50 million by 2020.
Along with the rise in the number of Indians travelling abroad, both the total and per capita expenditure
spent abroad has been increasing. For example, according to the European Travel Commission, average
spend per trip of Indian outbound tourists has increased from US$ 611 in 2000 to US$ 822 in 2006.
Similarly, Euromonitor International estimates the outgoing tourism expenditure from India to grow to US$
21 million by 2011, representing a growth rate of over 25.7 per cent between 2006 and 2011.
Hospitality
The booming tourism industry has had a cascading effect on the hospitality sector with an increase in the
occupancy ratios and average room rates. While occupancy ratio is around 75-80 per cent, the average
increase in room rates hovered around 22-25 per cent (July-September 2007).
And with the continuing surge in demand, many global hospitality majors have evinced a keen interest in
the Indian hospitality sector. For example, over a dozen global hotel chains like the Hilton, Accor, Marriott
International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI) and InterContinental Hotels group
have announced major investment plans that would translate in to 65,000 additional rooms.
It is estimated that the hospitality sector is likely to see US$ 11.41 billion in the next two years. Also, India is
likely to have around 40 international hotel brands by 2011. Along with these large scale expansion plans,
international hotel asset management companies are also likely to enter India. Already, US-based HVS
International has firmed up plans to enter India, and industry players believe others like Ashford Hospitality
Trust and IFA Hotels & Resorts among others are likely to follow suit.
Online bookings
Travel portals are cashing in on the booming demand for hotel rooms. There has been a surge in hotel
booking on travel portals in the past 12 months. The online travel industry is a US$ 800-million industry in
India, that is, about 14 per cent of the entire travel industry.
According to Travel and Tourism research firm PhocusWright, the online travel market in India that is worth
US$ 1.3 billion in 2007, is likely to grow to US$ 2 billion by 2008.
Medical tourism
India is likely to become a major hub for medical tourism, with revenues from the industry estimated to grow
from US$ 333 million in 2007 to US$ 2.2 billion by 2012, says, a study by the Confederation of Indian
Industry (CII) and McKinsey.
The key "selling points" of the medical tourism industry are its "cost effectiveness" combined with the
attractions of tourism. Medical care, packaged with traditional therapies like yoga, meditation, ayurveda,
allopathy and other traditional systems of medicines, attract high-end tourists especially from European
countries and the Middle East.
Not only Medical Tourism, the scope for theme travel is vast in India with Adventure tourism, Heritage
tourism, Wellness tourism, Pilgrimage tourism, Golf tourism, Eco-tourism, Wildlife tourism all having
tremendous potential.
Government initiatives
To unlock the huge potential in this sector, the Government has taken various initiatives for the
development of this sector.
Launch of Incredible India campaign to promote tourism both in domestic and international markets.
Recognition of spare rooms available with various house owners by classifying these facilities as
"Incredible India Bed and Breakfast Establishments"', under 'Gold' or 'Silver' category.
A new category of visa, "Medical Visa" ('M'-Visa), has been introduced which can be given for
specific purpose to foreign tourists coming into India.
Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for
Ayurveda and Panchkarma Centres.
The Ministry of Tourism has tied up with the United Nations Development Programme (UNDP) to
promote rural tourism.
International Recognition
With the growth of this industry, international accolades have been flowing thick and fast.
India has been elected to represent South Asia on the Executive Council of UN World Tourism
Organisation (UNWTO), the highest policy making world tourism body represented by 150
countries. It is also set to head UNWTO.
The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50
places for 2006.
The Incredible India campaign has been ranked as the Highest Recall Advertisement worldwide by
Travel and Leisure. It has also bagged the coveted PATA (Pacific Asia Travel Association) Grand
Award for Marketing. India also bagged two PATA Gold Awards for Cultural Tourism (Aranmula)
and Marketing Brochure (Kumarkom) awarded to Kerala Tourism.
The world's leading travel and tourism journal, "Conde Nast Traveller", ranked India as the numero
uno travel destination in the world for 2007, from fourth position in 2006.
India was adjudged Asia's leading destination at the regional World Travel Awards (WTA).
Bangalore-based Leela Palace Kempinski has been rated as the favourite business hotel in the
world in a Readers' Choice Awards by Conde Nast Traveller.