indian alum
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8/7/2019 Indian Alum
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India's role in the Aluminium World of tomorrowIndia's role in the Aluminium World of tomorrow
D.Bhattacharya
President, AAI
MD, Hindalco IndustriesVice Chairman, Novelis
INCAL 2007INCAL 2007
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India as a Desired DestinationIndia as a Desired Destination
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Emerging Market Growth : 1980 – 2005Emerging Market Growth : 1980 – 2005
PPP adjusted GDP ($ bn)PPP adjusted GDP ($ bn)
Emerging economies amongst the fastest growing
China
India
Japan
Korea
Taiwan
United States
Euro Area
-
300
600
900
1,200
1,500
1,800
2,100
2,400
2,700
1 9 8 0
1 9 8 2
1 9 8 4
1 9 8 6
1 9 8 8
1 9 9 0
1 9 9 2
1 9 9 4
1 9 9 6
1 9 9 8
2 0 0 0
2 0 0 2
2 0 0 4
2 0 0 6
(1980 = 100)
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Global growth driven by developing nationsGlobal growth driven by developing nations
Source: IMF World Economic Outlook 2006 - GDP Growth (Constant Prices, Local Currency)
G7 Countries
Asian Countries
Former USSR Countries
Average GDP Annual GrowthAverage GDP Annual Growth ––2000-20072000-2007
World GDP growth to remain ~5% over next 5 years, ~4% to 2030
9.5
6.6
5.45.0
5.4
2.7 2.8
1.2
3.0
2.0
1.21.9
6.7
14.714.3
9.7
C h i n a
I n d i a
M a l a y s i a
I n d o n e s i a
P a k i s t a n
U n i t e d K i n g d o m
U n i t e d S t a t e s
G e r m a n y
C a n a d a
F r a n c e I t a
l y
J a p a n
R u s s i a
A z e r b a i j a n
T u r k m
e n i s t a n
K a z a k h s t a n
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Phases of economic growthPhases of economic growth
GDP at Factor CostGDP at Factor Cost
India: Accelerating growth over the years
-
5,000
10,000
15,000
20,000
1 9 5 0 - 5 1
1 9 5 7 - 5 8
1 9 6 4 - 6 5
1 9 7 1 - 7 2
1 9 7 8 - 7 9
1 9 8 5 - 8 6
1 9 9 2 - 9 3
1 9 9 9 - 0 0
2 0 0 6 - 0 7
CAGR = 3.4%
CAGR = 5.5%
CAGR = 6.9%
Rs. Bn
CAGR = 4.5%
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India Reforms: Slow but a steady progressIndia Reforms: Slow but a steady progress
Industrial licensing systems
Distribution Controls
Restrictions on Foreign investments
Fiscal controls
Financial market Controls
Stringent labor laws
Industrial licensing systems
Distribution Controls
Restrictions on Foreign investments
Fiscal controls
Financial market Controls
Stringent labor laws
1950 – 1985
License Raj
1950 – 1985
License Raj
Easing of administrative and fiscal controls
Access to global technology
Pricing and distribution controls eased in some sectors Taxes reduced but still higher than global levels
However:
Industrial licensing systems persisted
Restrictions on Foreign investments continued
Easing of administrative and fiscal controls
Access to global technology
Pricing and distribution controls eased in some sectors Taxes reduced but still higher than global levels
However:
Industrial licensing systems persisted
Restrictions on Foreign investments continued
1985 – 1991Piecemeal
Deregulation
1985 – 1991
PiecemealDeregulation
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India Reforms: Accelerating the pace of reformsIndia Reforms: Accelerating the pace of reforms
Industrial licensing abolished FDI policy introduced
Trade liberalization commenced
Capital Market Reforms, FII investments allowed, access to
global capital permitted, SEBI instituted.
Currency convertibility on current account
Industrial licensing abolished
FDI policy introduced
Trade liberalization commenced
Capital Market Reforms, FII investments allowed, access to
global capital permitted, SEBI instituted.
Currency convertibility on current account
1991 – 19951991 – 1995
Introduction of CENVAT in lieu of Excise Duty
Income Tax rates reduced
Introduction of CENVAT in lieu of Excise Duty
Income Tax rates reduced1995 – 20001995 – 2000
Privatization of state owned enterprises
Equity derivatives introduced
Lowering customs duty
Autonomous market regulators – TRAI, IRDA, CERC etc.
Introduction of VAT in lieu of State Sales Tax
Privatization of state owned enterprises
Equity derivatives introduced
Lowering customs duty
Autonomous market regulators – TRAI, IRDA, CERC etc.
Introduction of VAT in lieu of State Sales Tax
2000 – 20072000 – 2007
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Net Result: Rising savings and investments (bothNet Result: Rising savings and investments (bothdomestic and foreign)domestic and foreign)
Savings and InvestmentsSavings and Investments(As % of GDP)(As % of GDP) FDI (US$ bn)FDI (US$ bn)
$ 19.5 bn
10%
15%
20%
25%
30%
35%
1 9 7 0 - 7 1
1 9 7 5 - 7 6
1 9 8 0 - 8 1
1 9 8 5 - 8 6
1 9 9 0 - 9 1
1 9 9 5 - 9 6
2 0 0 0 - 0 1
-
GDS GCF
0
4
8
12
16
20
1 9 9 0 - 9 1
1 9 9 2 - 9 3
1 9 9 4 - 9 5
1 9 9 6 - 9 7
1 9 9 8 - 9 9
2 0 0 0 - 0 1
2 0 0 2 - 0 3
2 0 0 4 - 0 5
2 0 0 6 - 0 7
34%
32%
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Net Result: Rising trade volumes with reducingNet Result: Rising trade volumes with reducingbarriersbarriers
Trade volumes (US$ bn)Trade volumes (US$ bn)Customs collectionsCustoms collections
(As % of Imports)(As % of Imports)
-
50
100
150
200
250
1 9 7 0 - 7 1
1 9 7 3 - 7 4
1 9 7 6 - 7 7
1 9 7 9 - 8 0
1 9 8 2 - 8 3
1 9 8 5 - 8 6
1 9 8 8 - 8 9
1 9 9 1 - 9 2
1 9 9 4 - 9 5
1 9 9 7 - 9 8
2 0 0 0 - 0 1
2 0 0 3 - 0 4
2 0 0 6
- 0 7 P
Exports Imports
5%
15%
25%
35%
1 9
9 5 - 9 6
1 9
9 6 - 9 7
1 9
9 7 - 9 8
1 9
9 8 - 9 9
1 9
9 9 - 0 0
2 0
0 0 - 0 1
2 0
0 1 - 0 2
2 0
0 2 - 0 3
2 0
0 3 - 0 4
2 0
0 4 - 0 5
2 0
0 5 - 0 6
2 0
0 6 - 0 7
190.6
126.3
29%
10%
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Net Result: Increasing bank lending withNet Result: Increasing bank lending withreducing interest ratesreducing interest rates
Banking Non Food Credit (Rs. Crs)Banking Non Food Credit (Rs. Crs)Interest ratesInterest rates
(10 year G-Sec yield)(10 year G-Sec yield)
One of the finest banking systems in the world
1882
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1 9 7 0 - 7 1
1 9 7 3 - 7 4
1 9 7 6 - 7 7
1 9 7 9 - 8 0
1 9 8 2 - 8 3
1 9 8 5 - 8 6
1 9 8 8 - 8 9
1 9 9 1 - 9 2
1 9 9 4 - 9 5
1 9 9 7 - 9 8
2 0 0 0 - 0 1
2 0 0 3 - 0 4
-
-
2
4
6
8
10
12
14
1 9 9 8 - 9 9
1 9 9 9 - 0 0
2 0 0 0 - 0 1
2 0 0 1 - 0 2
2 0 0 2 - 0 3
2 0 0 3 - 0 4
2 0 0 4 - 0 5
2 0 0 5 - 0 6
2 0 0 6 - 0 7
12.18%
7.78%
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Significant improvement in social normsSignificant improvement in social norms
Poverty Rates*Poverty Rates* Infant mortality ratesInfant mortality rates
Literacy ratesLiteracy rates
____________ hreshold as defined by the Government: Income of Rs.296 per month in Urban areas and Rs.276 per month in Rural ar rld Bank Reports
(%)
(%)
(Per ‘000 births)
Urban PopulationUrban Population
20
30
40
50
60
1 9 5 0
1 9 6 0
1 9 7 0
1 9 8 0
1 9 9 0
2 0 0 0
50
75
100
125
150
1 9 5 0
1 9 6 0
1 9 7 0
1 9 8 0
1 9 9 0
2 0 0 0
0
15
30
45
60
75
1 9 1 9 1 9 1 9 1 9 2 0
10%
15%
20%
25%
30%
1 9 7 0
1 9 8 0
1 9 9 0
2 0 0 0
2 0 0 5
45.31%
26%
146
63
18.33
64.84
20%
29%
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India and China: Can India match the pace of India and China: Can India match the pace of China?China?
?
_____________________
India: 1990-2005
China: 1980-2005
GDP per capita at PPP (US$)GDP per capita at PPP (US$) GDP per capita at PPP (US$)GDP per capita at PPP (US$)
(India with a time lag)(India with a time lag)
No, of Years
India: lagging China by 10 years
-
2,000
4,000
6,000
8,000
1 9 8 0
1 9 8 5
1 9 9 0
1 9 9 5
2 0 0 0
2 0 0 5
China
India
-
2,000
4,000
6,000
8,000
1 6 11 16 21 26
China
India
7204
3344
7204
3344
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India and AluminiumIndia and Aluminium
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