INDIA

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INDIA India's surging class of millionaires is
stocking up on posh pads, luxury cars, and
designer duds Even by the standards of Lonavala,
a mountainous outpost 70 miles from Mumbai where
India's nouveaux riches like to spend the
weekend, Rakesh Jhunjhunwala's country home is
extravagant. The 15,000-square-foot "bungalow"
features a swimming pool, jacuzzi, karaoke
studio, and gym, as well as party rooms and
terraces where Jhunjhunwala entertains family,
friends, and business associates. Meanwhile, back
home in Mumbai, the chain-smoking, 47-year-old
founder of investment house Rare Enterprises has
just bought a 5.4 million, six-bedroom duplex
apartment in the tony Malabar Hill neighborhood.
"I have far more wealth than I need," says
Jhunjhunwala, whose estimated net worth is just
shy of 1 billion. "But it gives me the freedom
to do what I enjoy and enjoy what I
do." Although hundreds of millions of Indians
still live in grinding poverty, the economy is
growing at an 8 annual clip, and the ranks of
the well-off and just plain loaded are
ballooning. Some 83,000 Indians today have liquid
assets greater than 1 million, up from 71,000
two years ago, American Express Co. estimates,
and their numbers are increasing by 13 a year.
By AmEx math, in 2009 there will be 1.1 million
individuals with 100,000 in assets, a princely
sum in India--up from 700,000 today. "I'm amazed
by the wealth in this country," says Sujay
Chauhan, who in April quit his job at technology
researcher Gartner Group to found Aquasale, a
boat dealer in Mumbai that already has seven
orders for yachts worth a total of 10 million.
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Estimated Indicators
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Source GS Economics Website
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1. Inflation. Fuelled by rising wages, property
prices and food prices inflation in India is an
increasing problem. Inflation is currently
between 6-7. A record 98 of Indian firms report
operating close to full capacity (2)With economic
growth of 9.2 per annum inflationary pressures
are likely to increase, especially with supply
side constraints such as infrastructure. The
wholesale-price index (WPI), rose to an
annualised 6.6 in Jan 2007 (1)
2. Poor educational standards. Although India has
benefited from a high of English speakers.
(important for call centre industry) there is
still high levels of illiteracy amongst the
population. It is worse in rural areas and
amongst women. Over 50 of Indian women are
illiterate
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3. Poor Infrastructure. Many Indians lack basic
amenities lack access to running water. Indian
public services are creaking under the strain of
bureaucracy and inefficiency. Over 40 of Indian
fruit rots before it reaches the market this is
one example of the supply constraints and
inefficiencys facing the Indian economy.
4. Inequality has risen rather than decreased. It
is hoped that economic growth would help drag the
Indian poor above the poverty line. However so
far economic growth has been highly uneven
benefiting the skilled and wealthy
disproportionately. Many of Indias rural poor
are yet to receive any tangible benefit from the
Indias economic growth. More than 78 million
homes do not have electricity. 33 (268million)
of the population live on less than 1 per day.
Furthermore with the spread of television in
Indian villages the poor are increasingly aware
of the disparity between rich and poor. (3)
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India faces major energy crisis due to Crude oil
refining capacity and compliance to environmental
clean up standardsHarish Baliga, Special
CorrespondentJanuary 17, 2005
India faces more problems that just need for
reliable energy supply. Even if the Government is
able to acquire rights to Natural gas and Crude
oil supplies all around the world, the problem
does not end there. India faces a major
shortage of refining capacity. As a result prices
of diesel, Petrol and Kerosene can go through the
roof even if the Crude oil price moves up slowly.