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Unit 2: Emergence of the Services Economy

important G-20 economies and this underscores Forum’s commitment to the country as a partner,” Notes
according to Mr Sushant Palakurthi Rao, Senior Director, WEF.

2.2.1 The Economic Scenario

Tata Consultancy Services (TCS) has been named as the world’s fourth most valuable Information
Technology (IT) services brand by leading global brand valuation company, Brand Finance.
“With a strong brand strategy and a refined sponsorship portfolio, TCS has been able to improve
both brand awareness and its profile globally,” as per David Haigh, Chief Executive Officer and
Founder, Brand Finance.
The Union Ministry of Science and Technology has selected three consortia that will receive a
grant of ` 125 crore (US$ 23.58 million) from the Centre. The funding will be over five years,
under the Indo-US Joint Clean Energy Research and Development Centre. The Joint Clean
Energy is part of the US-India Partnership to Advance Clean Energy, announced by the Indian
Prime Minister, Dr Manmohan Singh, and the US President, Mr Barack Obama, in November
2011, which aims to accelerate the transition to high performing, low emissions, and energy
secure economies.
Non-resident Indians (NRIs) deposited US$ 11 billion into bank deposits during 2011-12, three
times more than in the previous year, according to data released by the Reserve Bank of India
(RBI). The highest accretion was in the non-resident (external) rupee account, at US$ 7.46 billion,
against an outflow of US$ 280 million in 2010-11.
The Government of India has approved 14 Foreign Direct Investment (FDI) proposals amounting
to US$ 288.05 million, based on the recommendations of Foreign Investment Promotion Board
(FIPB). India’s foreign exchange (Forex) reserves increased by US$ 1.4 billion in the week ended
April 20, 2012, according to data released by the RBI. The reserves have increased US$ 205
million since the start of this financial year FDI inflows worth US$ 341.49 million were recorded
in the drugs and pharmaceuticals sector between April 2009 to February 2012. At present, the
Government of India allows 100 per cent FDI for both Greenfield and existing projects in the
sector, according to Mr Jyotiraditya Scindia, Minister of State for Commerce and Industry. India
is the global leader in the IT-business process outsourcing (BPO) industry with half of the
world’s back office being located here. Indian outsourcing revenue at US$ 59 billion for 2011,
accounts for 51 per cent of the global offshore market share, as per a report by Tholons Research.
The total direct employment by Indian IT-BPO sector (as of 2011) was 1.98 million and indirect
employment was 7.5 million.

2.2.2 Growth Potential Story

Consumer spending in India is likely to grow nearly four times to touch US$ 3.6 trillion by 2020,
driven by rising incomes and aspirations, widespread media proliferation and better physical
reach across the country, according to a joint report titled, ‘The Tiger Roars – How a billion plus
people consume and shop’ by Boston Consulting Group (BCG) and the Confederation of Indian
Industry (CII).

The Research and Development (R&D) talent pool is growing at the rate of 9 per cent every year
and expected to reach 250,000 by 2015, as per C S Chandramouli, Senior Director-Globalisation
Advisory, Zinnov. Indian Multinational Companies (MNC) are moving into tier-II cities,
highlighted the Zinnov study. Fresh talent pool in tier-II cities is estimated to form 35 per cent
of the Indian R&D workforce going ahead. In the tier-II cities, work such as testing, level 3
customer supports and bug fixing are being undertaken. Indian Space Research Organisation
(ISRO) plans to launch its biggest ever spacecraft, the 5,000 kg GSAT-11, by 2014. The advanced
communication satellite, GSAT-11, will be double the capacity and size of the present buses, and

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