0 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

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1 0 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

2 PREFACE WELCOME TO SERVICE INDUSTRY LION CONTRIBUTOR TO INDIAN GDP In 2010, the share of services in the US$63 trillion world gross domestic product (GDP) was nearly 68 per cent, as in India s performance in terms of this indicator is not only above that of other emerging developing economies, but also very close to that of the top developed countries. Among the top 12 countries with highest overall GDP in 2010, India ranks 8 and 11 in overall GDP and services GDP respectively. While countries like the UK, USA, and France have the highest share of services in GDP at above 78 per cent, India s share of 57 per cent is much above that of China at 41.8 per cent. In 2010 compared to 2001, India is the topmost country in terms of increase in its services share in GDP (7 percentage points) followed by Spain and Canada (5.3 percentage points each), the UK (4.5 percentage points), and Italy (3.2 percentage points). In terms of compound annual growth rate (CAGR) for the period , China at 11.3 per cent and India at 9.4 per cent show very high services sector growth. Russia at 5.5 per cent and Brazil at 4.0 per cent are a distant third and fourth respectively. While India s growth rate of the services sector at 10.1 per cent in 2009 was higher than that of China at 9.6 per cent, in 2010 it has decelerated to 7.7 per cent while China s has remained constant (Table 10.1). All this highlights the prominence of the services sector for India. Despite the higher share of services in India s GDP and China s dominance in manufacturing over services, the hard fact, however, is that in terms of absolute value of services GDP and also in terms of growth of services, China is still ahead of India in 2010 In 2005, we had brought out our first text book on Service Industry Management, which was meant to serve as a transcript for students; corporate, academicians and policy makers who recognize the vital role that services play in the economy and its future. The advanced economies of the world are now dominated by Services, and virtually all companies view service as critical to retaining their customers today and in the future. The book is inscribed in recognition of the ever- growing importance of services and the unique challenges faced by mangers of services. The content focuses on knowledge needed to implement quality services and service strategies for competitive advantage across various service sectors. Service industry contributes about 52% to India's GDP growth. The share of Gross Domestic Product ( GDP) percentage has undergone a considerable change. Contribution of agriculture to India s GDP has reduced from 39% to 22%, during the period of 1979 to In 2005, GDP composition is estimated to be agriculture (19.9 % ) industry (19.3 %) and services (60.7%) ( publications/factbook/geos/in.html). Driven by robust performance in manufacturing and financial services, India s GDP growth is projected at 9.2 per cent during , against 9 per cent in the previous year. ( PTI, February 7, 2007). AVIATION Latest Statistics The aviation industry is changing rapidly and we believe this pace will accelerate over the next two decades. The Airports Council International (ACI) predicts that the number of global passengers will rise from 4.3 billion in 2006 to more than 5 billion by 2010 and more than 9 billion by Much of this growth will take place in Africa and Asia Pacific, where passenger traffic is forecast to increase by at least 7 percent and 6.8 percent a year, respectively, over the next three years. By 2025, Asia will be the world s largest aviation market up from third place today as a result of fastgrowing economies like China and India. TOURISM Latest Statistics The UNWTO World Tourism Barometer suggests that the decline in international tourism may have started to bottom out. International tourist arrivals declined by 7% between January and August 2009, but the rate of decline has eased in the past few months. This confirms UNWTO's initial forecast of a 5% decline in international tourist arrivals for the full year 2009.International tourist arrivals worldwide are estimated to have declined by 7% between January and August Destinations worldwide recorded a total of 600 million arrivals, down from 643 million in the same period of But the downward trend that started in September last year may have begun to bottom out. Arrivals in the two high-season months of July and August declined by 3% compared with a decrease of 8% in the first half of the year, and data available for September points to a continuation of this upward trend. Tourism earnings, with a 10% drop, have suffered more than arrivals as consumers tend to trade down, stay closer to home and travel for shorter periods of time. 1 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

3 For 2010, UNWTO expects a moderate growth of up to 5%. Asia will show the strongest rebound, while Europe and the Americas will probably take longer to recover. By 2020, international arrivals are expected to reach nearly 1.6 billion. 1.2 billion of these arrivals will be intra regional and 378 million of them will be long haul travellers. HOSPITALITY STATISTICS The Indian hotel industry is adding over 90,000 more rooms across the country in the next five years to meet the demand. The contribution of the hotel industry to the country s GDP was 6.1 per cent in * Carlson Group, the global hospitality chain, is bringing its luxury hotel brand Regent to India and has signed an agreement with real estate firm, Pioneer Urban Land and Infrastructure, which will invest US$ million for building the first Regent hotel in Gurgaon that will open in * The Leela plans to open six more properties by 2013, taking the total number of hotels to 12. * ITC Ltd expects to add 8-10 hotels in India in the next 3-5 years to the existing 110 that it currently operates. * The Thailand-based hospitality major, Amari, plans to foray into the Indian market by setting up seven fourstar hotels near major airports in the country. According to the tourism ministry, 4.4 million tourists visited India last year and at current trend, demand will soar to 10 million in to accommodate 350 million domestic travelers. 'Hotels in India' has a shortage of 150,000 rooms fueling hotel room rates across India. Hotel India' room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India' is eroding its competitiveness as a cost effective destination. However, the rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by Government has approved 300 hotel projects, nearly half of which are in the luxury range. Sources said, the manpower requirements of the hotel industry will increase from 7 million in 2002 to 15 million by The Road Ahead According to the latest Tourism Satellite Accounting (TSA) research, released by the World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in March 2009: * The demand for travel and tourism in India is expected to grow by 8.2 per cent between 2010 and 2019 and will place India at the third position in the world. * India's travel and tourism sector is expected to be the second largest employer in the world, employing 40,037,000 by * Capital investment in India's travel and tourism sector is expected to grow at 8.8 per cent between 2010 and * The report forecasts India to get capital investment worth US$ 94.5 billion in the travel and tourism sector in * India is projected to become the fifth fastest growing business travel destination from with an estimated real growth rate of 7.6 per cent. * Preparing for the 2010 Commonwealth Games in Delhi, the Tourism Ministry is exploring the provision of tented accommodation to tourists in Faridabad and Surajkund in nearby Haryana. The trend to continue with service jobs is accounting for approximately 20.8 million of the 21.6 million new jobs from 2002 to In particular, jobs in the education and health services areas are expected to grow the fastest, adding more jobs than any other area of this sector at an estimated 31.8 percent Additionally, professional and businesses services (e.g., employment services; professional, scientific, and technical services; computer systems design; management jobs) will grow at a high rate (30.4 percent). 2 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

4 Service Sector in India today accounts for more than half of India's GDP. According to data for the financial year , the share of services, industry, and agriculture in India's GDP is 55.1 per cent, 26.4 per cent, and 18.5 per cent respectively. There was marked acceleration in services sector growth in the eighties and nineties, especially in the nineties. While the share of services in India's GDP increased by 21 per cent points in the 50 years between 1950 and 2000, nearly 40 per cent of that increase was concentrated in the nineties. Most areas of the services division are cyclical, which means that they are likely to experience slow growth or may even lose jobs during a recession. The 11 th Five Year Plan has envisaged that the health services sector growth at around 9 per cent per annum since the mid- 1990s, is expected to have potential for creating 40 million jobs and an additional US $ 200 billion annual income by Even the Planning Commission Report India Vision 2020 states that the country will soon get the opportunity to skip the long slow phase of industrialization that the most developed nations have passed through, and transit rapidly into a predominantly service economy by 2020, creating services that meet human needs, generate employment covering the large unorganized segment of the economy, raise incomes and increase purchasing power. The Report further envisages the creation of 200 million jobs by 2020 out of which 120 million jobs will alone be in the service sector. The sector has the unique opportunity to grow due to its labour cost advantage reflecting one of the lowest salary and wage levels in the world, coupled with rising share of working age population.. The Plan has identified some key- sectors with special focus, which are expected to exploit this potential. These include: professional services like IT services, customer relations management, health and educational services, accountancy and legal services, constructions & engendering, housing and real estate. During the 11 th Plan, tourism has the potential to generate 27 million additional jobs. Retail trade and organised retail and entertainment and media services, civil aviation, transport, communication, banking and finance are some others sectors which are poised further growth in future. While retaining much of the material which is descriptive in nature, effort has been made to bring certain chapters which are heavily laced with data and statistics. In fact, some chapters had to be replaced with new chapters on account of change in parameters with up to data, as far as possible. The chapters which have gone through radical changes are : 1 st, 2 nd, 7 th, 8 th 10 th with minor changes here and there. In the 7 th chapter, sub chapters on airlines, ITES/BPO/ Event Services, Travel & Tourism Services, Retail Services, Hospitality and Health Services, Insurance Sector, Entertainment Sector, and Telecommunication sector have been replaced with entirely new material. In chapter 8, state profiles of Punjab, Haryana, Himachal Pradesh and Chandigarh were replaced with new and enlarged information. Similarly, in chapter 10, matter relating to IPCSI ( International Punjabi Chamber for Service Industry ) has been updated. While appreciating the efforts put in by many of our faculty, in preparing this manuscript, I would like to record my deep appreciation to Ms Ravneet Jatana, Priyanka Vyas, senior faculty at ITFT Group, for carrying out intensive research and in making it relevant for the book. My thanks are also due to Ms Priyanka Vyas, Sandeep Guleria, Nayna Tuli, Damini Sharma, Ruby Kapoor, Prof Narinder Kumar and Bistriti Poddar for their valuable inputs. Although, we have made efforts to provide up to date data, wherever, it was needed, there could be some minor variation, here and there. As we have tried to improve upon the text material of the first edition of the book, suggestions and comments of the readers are solicited, which would be very useful for our next edition. I deeply apologize if we have failed to recognize or quote someone whose references we have quoted. Wish you a happy reading! Dr. Gulshan Sharma President-NIMA 3 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

5 CONTENTS CHAPTER NO NAME OF CHAPTER PAGE NO 1 Global Asian and Indian Scenario of Service Industry 5 2 Major Service Sectors In Asia 34 3 Strategic Human Resources Planning and Development: 50 4 Management Parameters in Service Industry 65 5 Extrepreneurship in Service Industry 85 6 Community Approach To Tourism industry Development Service Industry- A Case Study Approach Rural Services Human Resource Development Be A Winner- How to Succeed in Service Sector Global National Regional Employability Skills a Comparative Study The Indian Diaspora-Harnessing NRI Resources Pre- Departure Training Recession Futurelogy of Service Based Iindustry Teacher s Role as a Motivator An Overview of Spa,Health and Wellness Industry I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

6 CHAPTER 1 GLOBAL ASIAN AND INDIAN SCENARIO OF SERVICE INDUSTRY Introduction: Service industries can be defined as "those organizations and businesses which (regardless of ownership, profit or non-profit orientation) produce, deliver and are inextricably bound up with the consumption process of generally intangible products; where the consumer (whether individual or business) is a central and fundamental part of the whole transfer and exchange process. Service industries can, in this way, be defined both in supply terms and in demand terms." According to Philip Kotler "A service is any act or performance that one party offers to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to the physical product. - Knowledge has replaced capital as the most important determinant of development. The Services Sector, which has a great potential for creating new employment opportunities and economic growth in the world economy, is essentially knowledge-based. Even our notion of services may need to evolve further to recognize the importance of the emerging knowledge-intensive services. Hence, it becomes all the more important to study service industry because: Services dominate the Economy in most of the Nations. Most of the new jobs are generated by services only. The fastest growth is expected in the knowledge based industries. Many manufacturing firms moved to marketing stand- alone services. The service industry has been experiencing rapid economic growth over the past few decades. So much so that services account for a significant share of gross domestic product in nearly all industrialized and developing countries, as well as being an increasingly important source of employment in these economies. Further, the Service Industry has been attracting an ever-expanding share of world foreign Direct Investment and has become increasingly internationalized. Yet, despite their importance to the global economy, services have only recently been drawing the attention of researchers and policy-makers. Some examples of Services are: Financial Services: Banking, Investment advising, Insurance. Professional Services: Accounting, Legal, Architectural Health Care: Hospitals, medical practice, eye care, dentistry Travel- airlines, travel agencies, theme park. 5 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

7 The defining characteristics of a service are: Intangibility Services cannot be seen, tasted, felt, heard or smelled before purchase. Services Inseparability Services cannot be separated from their providers Variability Quality of services depends on who provides then and when, where and how. Perish ability Services cannot be stored for later sale or use. 1. Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering.e.g: Hospitality as an industry can only be felt, but cannot be physically touched. 2. Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. e.g.: All burgers of a particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers. 3. Perishability: Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. e.g.: A customer dissatisfied with the services of a tailor cannot return the service of the stitched dress that was rendered to him. At the most he may decide not to visit that particular tailor in the future. 4. Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. E.g.: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. E.g.: the barber is necessarily a part of the service of a haircut that he is delivering to his customer. Classification of Services It is required to design & apply marketing techniques to completely satisfy the customer & increase profits & identify new emerging services. Classifications can be done on following basis: Classification by Industry Classification by Target Effect Skill level of service provider (Professional/ Nonprofessional) Labor intensiveness (People-based/Equipment-based) Degree of customer contact (High / Low) Goal of the service provider (Profit /Nonprofit) 1. Classification by Industry Industry classify services according to the sectors, likea. Entertainment industry b. Education c. Telecommunications d. Finance & Insurance 6 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

8 e. Transportation f. Public utilities g. Government services h. Health i. Hospitability Industry j. Business services k. Telecommunications l. Trading 2. Classification by Target Effect Based on Degree of Customer Involvement: (Lovelock) a. People Processing: Services aimed at physical care e.g. Healthcare, clinics, restaurant, hospitals, hair stylists, fitness centers b. Mental Stimulus Processing: Services aimed at mind of customer e.g. Education, information, entertainment, consulting, psychotherapy c. Possession Processing: Services aimed at physical possession & tangible assets e.g. repair & maintenance, laundry, repair services, landscaping, house cleaning services d. Information Processing: Services for intangible assets e.g. banking, legal consultation, brokerage, financial services. 3. Based on Skill level of service provider a. Professional: E.g Doctor, Advocate, Engineer. b. Non-Professional: Housekeeping, Baby Sitting. 4. Based on Goal and business orientation of the service provider a. Profit- Commercial Organisations b. Nonprofit Trusts and NGO s. 5. Based on the type of End User a. Customer Services b. Organizational Services Reasons for Growth of Service Sector : As the physiological needs of the people get fulfilled, there was a demand for more satisfaction. The changing lifestyles, changing world, changes economies, technological advances, modernization, liberalization, privatization and globalization policies, exponential growth in several economic areas, advent of electronic data interchange (EDI) and computer explosion are some of the factors for stimulating the dramatic growth in services. High complexity of products requiring skilled specialists, business internationalization, de-regulation policies, need for use of expert knowledge to outsmart competition created a need for specialist services like consultants and professionals. Urbanization, cost effectiveness drives, optimum use of resources, resulted in security services, private detective agencies, janitorial services, sub-contracting services, etc. Multimedia, advertising, data processing, internet, E-business services are consequences of information technology explosion. Overall affluence, shift toward leisure and pleasure created recreational and entertainment services, travel related services. Desire to live long have resulted in special healthcare services like nursing homes, private hospitals, health and fitness clubs. There is an endless list, but a general categorization of factors contributing towards the growth of services and some important reasons are discussed here: I. Demographic factors 1) High life Expectancy: The economic growth and increasing standard of living have also resulted in the greater life expectancy and there by an expanding old age population. Thus there is an increased need for services like old age homes, nursing homes, healthcare centers, insurance, etc. 2) Structural shifts in Communities/ development of new towns: have affected where and how people live. The development of new towns and villages has led to the need for infrastructural and support facilities. 7 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

9 II. Economic factors 1) Globalization: has increased the demand for courier, forwarding and shipping services as well as travel and information services. This has been fuelled by the rapid changes brought about by the new information technology. India today is looked upon as a great location to setup both outbound and inbound call centers due to globalization. 2) Specialization: within the economy has led to greater reliance on specialist service providers, for example, advertising and market research have become specialist functions supporting all sectors of the economy. Other examples include education and specialist financial planners. III. Political factors 1) Huge Infrastructure of Government Department: leads to development of most sectors specially the sectors completely under government control. For example Railways in India. 2) Internationalization: has made increased and new demands on legal and other professional services. 3) Privatization/ deregulation: has today increased the demand for sectors such as telecom, airline, and cellular service providers. IV. Social changes 1) Increase in number of working women: As more and more women have started working, the time has become most scarce commodity in family life. This has led to previously domestic functions performed outside the home. It promoted the growth of fast food industry and other personal services such as crèches, baby sitting, household domestic help, packaged food, etc. 2) Dual income households: and working women has created a demand in retailing, real estate and personal finance planning. Also the chances of needing divorce lawyers have gone up! 3) High quality of life: is now prevalent, since smaller families with two incomes now have more disposable income to spend on leisure, entertainment, education, travel and hospitality services. 4) More international travel and communication: have produced more sophisticated consumer tastes and preferences. Consumers compare services both nationally and internationally and demands quality and variety improvement. The sectors most benefited are hotel and travel. 5) Greater complexity of life: The greater complexity of life has created demand for a wide range of services, especially legal and financial advice. The number of specialists in income tax, labor laws, legal affairs, marriage counseling, employment services etc. has been increasing. 6) Higher aspiration levels: are developed due to increased income, travel and communication. As a result of this both children and adults are making new demands on learning establishments, in order to develop the skills needed to compete in our complex and fast changing environment. V. Technological factors 1) Innovations in various fields: have paved avenues for a qualitative transformation in all areas. Below is a list of innovations in various sectors: ATM Automated airline check-in Automated hotel check-in & check-out Electronic blood pressure machine Tax preparation software Internet banking Buying online Automated investment transactions 8 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

10 Internet shopping Phone banking Also, with rapid development in technology, the consumer today uses a lot of complex products in his day to day life. Thus there is a greater demand for specialists who provide maintenance and upkeep of such products like cars, home computers, household appliances etc. 2) Computer explosion: has helped solve various problems and enhance service sector. Earlier a person wanting to transfer money from one bank account to another needed to travel to the bank branch. Today the same can be done sitting in the luxury of his home or anywhere else with the help of a computer. VI. Others 1) Manufacturing became expensive: Among the sectors, agriculture was already being utilized to the brim and industry did not grow too much due to manufacturing being very expensive. Services required very less or sometimes no initial investment, due to which they were preferred over manufacturing. 2) Increase in competition: Manufacturing had large investments and large names in business. Therefore the best option was for newer companies to come up with services since due to fewer players in services, the competition levels too were low. 3) Availability of trained manpower: More and more people were getting trained in services so as to be hired by service sectors. 4) Outsourcing of functions: Specialized functions were being extensively outsourced. More and more companies found outsourcing of smaller functions more profitable than actually undertaking the same by themselves. Hence more companies got into functions like janitorial or cleaning, repairing, etc. 5) New Inventions: Services were attracting more and more people worldwide due to the new inventions and innovations in the service sector. Each company wanted to outperform the other in terms of newer features in services. GROWTH OF SERVICE INDUSTRIES: CAUSE AND EFFECT The below mentioned table reflects the causes that have enabled the growth of services and alongside also reflects the effects on certain sectors. CAUSE EFFECT ILLUSTRATIONS 1) Technological Advances Higher complexity of products requiring skilled specialists Design service- engineering consultancy Maintenance service computers Auto service- cars 2) Globalization More business internationalization Multinational courier companies International forwarding and shipping companies 3) Deregulation Policies 4) Competition and need for higher Privatization of regulated sectors Telecom services Internet services Private airline- Sahara, Jet Kingfisher Specialization/ expert knowledge Market research Business process engineering productivity 9 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

11 5) Cost effectiveness Drives Optimum man power use and subcontracting less critical functions Security service Janitorial services (hospital/ office cleaning) Electronic data processing (pay roll processing) 6) Computer Explosion Speed of work performance and availability of sound, motion and Multimedia Advertising Data processing picture at an affordable cost 7) Overall increase in affluence Increased spending power and wish for comforts resulting in Carpet cleaning Laundry Ticketing, travel agents demand for those services which consumer himself does not want to perform anymore 8) Increasing percentage of Work performed earlier when at home now being done by Crèches Baby-sitting working women somebody else 9) More leisure time Shift towards pleasure/ Entertainment Travel resorts Recreation Entertainment 10) Greater life expectancy Desire to live long has resulted in special care facilities Nursing homes Private hospitals Apollo health clubs 11) Increased complexity of life Need for services of specialist because of complex issues Recruitment services Labor law consultants Income tax consultants required to be handled 12) Scarcity of resources and Need for services which can supplement and meet resource Car rentals Time sharing at internet cafes concern about crunch ecology 13) Demographic Dual career families where parents Senior citizen homes changes have less time to prepare meals and do house keeping 14) Urbanization Fast mechanical and self centered life and deterioration in law and order Security services Private detective services 10 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

12 Global Scenario of Service Industry: The tertiary sector of the economy (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately the same as manufacturing) and the primary sector (agriculture, fishing, and extraction such as mining). The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. The basic characteristic of this sector is the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, experience, and discussion. The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods. For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation. The tertiary sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector. In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that: "In the United States 70 percent of the workforce works in the service sector; in Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many of them are in the professional category. They are earning as much as manufacturing workers, and often more. The services sector covers a wide range of activities from the most sophisticated information technology (IT) to simple services provided by the unorganized sector, such as the services of the barber and plumber. National Accounts classification of the services sector incorporates trade, hotels, and restaurants; transport, storage, and communication; financing, insurance, real estate, and business services; and community, social, and personal services. In World Trade Organization (WTO) and Reserve Bank of India (RBI) classifications, construction is also included. Service Industry: Global Scenario Conventional wisdom suggests that during the early development phase of any country, expansion of output in manufactured goods precedes growth in the services sector. As a country progresses further manufacturing often takes a back seat, giving way to the services sector in terms of both output and employment, and manufacturing firms themselves become increasingly service centric in order to remain competitive. Some have argued that the decline in manufacturing and corresponding shift to services is unsupportable in the long run as services depend critically on manufacturing for their demand. Although this argument may be applicable for certain services such as retailing and transportation, it does not entirely hold for many other services. IT in particular has been a major force behind recent expansion in manufacturing rather than the other way round. While internationally, the conventional wisdom of development holds good, in the case of the Indian economy, it seems to have been turned upside down, with the services sector taking a substantial lead over manufacturing. In India s case, there are positive spillovers from services growth to manufacturing, through income, demand, technology, and organizational learning. Services GDP: International Comparison In 2010, the share of services in the US$63 trillion world gross domestic product (GDP) was nearly 68 per cent. India s performance in terms of this indicator is not only above that of other emerging developing economies, but also very close to that of the top developed countries. Among the top 12 countries with highest overall GDP in 2010, India ranks 8 and 11 in overall GDP and services GDP respectively. While countries like the UK, 11 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

13 USA, and France have the highest share of services in GDP at above 78 per cent, India s share of 57 per cent is much above that of China at 41.8 per cent. In 2010 compared to 2001, India is the topmost country in terms of increase in its services share in GDP (7 percentage points) followed by Spain and Canada (5.3 percentage points each), the UK (4.5 percentage points), and Italy (3.2 percentage points). In terms of compound annual growth rate (CAGR) for the period , China at 11.3 per cent and India at 9.4 per cent show very high services sector growth. Russia at 5.5 per cent and Brazil at 4.0 per cent are a distant third and fourth respectively. While India s growth rate of the services sector at 10.1 per cent in 2009 was higher than that of China at 9.6 per cent, in 2010 it has decelerated to 7.7 per cent while China s has remained constant. All this highlights the prominence of the services sector for India. Performance in Services: International Comparison 12 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

14 Developed Country (USA): Sector Wise GDP in 2011 Agriculture 1.2 % Industry 22.1% Services 76.7 % (est.) [Source: ] USA: Sector Wise GDP Share in 2011 Agriculture Industry Service 1% 22% 77% Developing Country (Malaysia) Sector Wise GDP in 2011 Agriculture 12% Industry 40% Services 48 % (est.) [Source: ] 13 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

15 Malaysia: Sector Wise GDP share in 2011 Agriculture Industry Service 12% 48% 40% Wealth Rich Country (Saudi Arabia): Sector Wise GDP in 2011 Agriculture 2.1% Industry 67.7% Services 30.4% (est.) [Source: ] Saudi Arabia: Sector Wise GDP share in 2011 Agriculture Industry Service 2% 30% 68% Least Developed Country (South Africa): Sector Wise GDP in 2011 Agriculture 2.5% Industry 31.6% Services 65.9% (est.) [Source: ] 14 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

16 South Africa: Sector Wise Share in 2011 Agriculture Industry Service 2% 32% 66% SAARC Country (India) Sector Wise GDP in 2011 Agriculture 18.1% Industry 26.3% Services 55.6% (est.) [Source: ] India: Sector Wise GDP Share in 2011 Agriculture Industry Service 18% 56% 26% China Sector Wise GDP in 2011 Agriculture 10.1% Industry 46.8% Services 43.1% (est.) [Source: ] 15 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

17 China : Sector Wise GDP Share in 2011 Agriculture Industry Service 43% 10% 47% Below is a list of countries by service output in List of countries by service output Rank Country Output of tertiary sector in 2011 Output in billions of US$ Composition of GDP (%) % of Global Tertiary Sector World 43, % 100.0% European Union 13, % 29.9% 1 United States 11, % 26.3% 2 Japan 4, % 9.9% 3 China 3, % 6.9% 4 Germany 2, % 5.9% 5 France 2, % 5.1% 6 United Kingdom 1, % 4.4% 7 Brazil 1, % 3.9% 8 Italy 1, % 3.7% 9 Canada 1, % 2.8% 10 Russia 1, % 2.5% 11 Spain 1, % 2.5% 12 Australia 1, % 2.4% 13 India 1, % 2.3% 14 Mexico % 1.7% 15 South Korea % 1.5% 16 Netherlands % 1.4% 17 Turkey % 1.1% 18 Switzerland % 1.1% 19 Belgium % 0.9% 16 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

18 Rank Country Output of tertiary sector in 2011 Output in billions of US$ Composition of GDP (%) % of Global Tertiary Sector 20 Sweden % 0.9% - Remaining Countries 5, % International Trade in Services Global trade in services has more or less mirrored the trend in merchandise trade, and, by corollary, international demand. World exports of services have shown consistent rise in the 2000s decade with a healthy average annual growth of around 9.5 per cent, except in 2001 and 2009 periods of global slowdown and economic crisis. After having increased by 13 per cent in 2008 (as per WTO data), world exports of services fell sharply with negative growth of 12 per cent in 2009, only to bounce back in 2010 with 9 per cent growth. In 2010 the value of services exports was US$3,695 billion, slightly below the 2008 pre-crisis peak of US$ 3,842 billion. While world trade in services is dominated by the developed countries, emerging economies like China and India are now playing an increasing role. India is the most dynamic exporter of services and ranked seventh in the world in both exports and imports of services in Foreign Direct Investment (FDI) in the Services Sector The global economic and financial crisis had a dampening effect on overall FDI flows. FDI in services, which accounted for the bulk of the decline in FDI flows due to the crisis, continued on its downward path in FDI in all main service industries (business services, finance, transport and communications, and utilities) fell, although at different rates. Overall, FDI projects in the services sector declined from US$ 392 billion in 2009 to US$ 338 billion in 2010, resulting in its share in sectoral FDI declining from 33 per cent to 30 per cent in this period. Business services declined by 8 per cent compared to pre-crisis levels as multinational companies, who are outsourcing a growing share of their business support functions to external providers, downsized their operations due to economic slowdown. Transportation and telecommunication services also suffered equally in 2010 as the industry s restructuring was more or less complete after the round of large mergers and acquisition deals before the crisis, particularly in developed countries. FDI in the financial industry experienced the sharpest decline and is expected to remain sluggish in the medium term. Over the past decade, its expansion was instrumental in integrating emerging economies into the global financial system, bringing substantial benefits to host countries financial systems in terms of efficiency and stability. Utilities were also strongly affected by the crisis as some investors were forced to reduce investment or even divest due to lower demand and accumulated losses. Some Facts and Figures: WORLD SCENARIO As economy shifts from developing to developed stage, they will show more and more shift toward services Today, the fastest growing segments of the US economy are services. The US balance of trade in goods has remained in the red for many years, but here has been a trade surplus in services Today service sector dominates the economics of many developed nations. As countries develop the role of agriculture in the economy declines and that of services increase.(china has 50% GDP from service, 35% from industry, and 15%from agriculture) During recession it has been seen that service output declines less than industrial output the service employment is less sensitive to business cycle fluctuation Globalization as strategy for service firm is becoming more important Service Industry: Asian Scenario The external environment for Asia has worsened given Europe s continuing sovereign debt and banking crisis, and the weak United States (US) economic recovery. The weak external environment plus slower growth in the People s Republic of China (PRC) and India have lowered growth projections for developing Asia; GDP growth now forecast at 6.6% in 2012 and 7.1% in The economic outlook for developing Asia is subject to three major risks: (i) a deepening euro zone recession and slower growth in the US; (ii) destabilizing capital flows; and (iii) a larger-than expected slowdown in the PRC. 17 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

19 Asian countries should stand ready to take fiscal and monetary measures in case the eurozone financial crisis spreads more globally. Asia needs to continue its economic transformation in a new normal environment where advanced economies are undergoing long-term restructuring and thus slower growth. Regional GDP Growth Asian Development Bank Survey The services sector is a substantial and growing component of the South Asia economies. In this respect, South Asia contrasts with the high-growth developing economies of East Asia where industry has played a more dominant role in the early stages of economic development. The shares of agriculture, industry and services in East Asia are 13, 46, and 41 percent respectively. South Asia has a larger services sector despite being at a substantially earlier stage of its economic development. The eight countries that comprise the South Asia region vary enormously in the size of their populations and economies. India, with a population of 1.1 billion, accounts for 75 percent of the region s population and 77 percent of GDP. In contrast, both Bhutan and the Maldives have populations of only 600 and 300 thousand respectively. 18 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

20 Asian Countries by GDP Northeast Asia Includes Japan, Korea, North Korea, Taiwan, Mongolia, and, for association purposes, China. Rank NE Asia Ra nk Asi a Ran k Wor ld Country 2011 GDP (PPP) billions of USD 2012 GDP (PPP) billions of USD Forecas t 2013 GDP (PPP) billions of USD Forecas t 2014 GDP (PPP) billions of USD Forecas t 2015 GDP (PPP) billions of USD Forecas t 2016 GDP (PPP) billions of USD Forecas t People's Republic of China $11, $12, $13, $14, $15, $16, Japan $4, $4, $4, $4, $4, $4, South Korea Republic of China (Taiwan) North Korea Mongolia $1, $1, $1, $1, $1, $2, $ $ $ $ $1, $1, $ $ $ $ $ $ $ Total $18, Southeast Asia Includes member states of ASEAN, Hong Kong, Macau and East Timor Rank SE Asia Rank Asia Rank World Country 2011 GDP (PPP) billions of USD Indonesia $1, Thailand $ Malaysia $ Philippines $ Hong Kong, China $ Singapore $ Vietnam $ Myanmar $ Cambodia $ Brunei $ Macau, China $ Laos $ East Timor $3.355 Total $3, I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

21 The Subcontinent Rank Subcontinent Rank Asia Rank World Country 2011 GDP (PPP) billions of USD India $4, Pakistan $ Bangladesh $ Sri Lanka $ Nepal $ Afghanistan $ Bhutan $ Maldives $2.735 Middle East Rank MidEast Rank Asia Rank World Country Total $6, GDP (PPP) billions of USD Iran $ Saudi Arabia $ United Arab Emirates $ Israel $ Qatar $ Kuwait $ Iraq $ Syria $ Oman $ Yemen $ Lebanon $ Jordan $ Bahrain $ Total $2, Central Asia Rank CentAsia Rank Asia Rank World Country 2011 GDP (PPP) billions of USD 1 20 Kazakhstan $ Uzbekistan $ Turkmenistan $ Tajikistan $ Kyrgyzstan $ Total $ I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

22 In the aftermath of the 2008/09 global financial crisis, foreign direct investment globally has fallen sharply, including flows to Asia. While global foreign direct investment (FDI) grew an average of 5% annually from 2000 to 2007, it fell an average of 22% a year from 2007 to The fall is even sharper for EU-15, where FDI inflows contracted an average 37% a year during the same period. For 15 East Asian and Southeast Asian economies, FDI fell a mere 8% per year. As a result, while their FDI was only about 23% of the EU-15 level in 2000, they are now equal in size. FDI inflows within the 13 East Asian and Southeast Asian economies are up despite the global decline in FDI inflows. The share of intraregional FDI inflows to total inflows increased from 44.6% in 2007 to 60.0% in However, these figures should be treated with caution as some FDI are coursed through third countries. For example, FDI from the PRC mostly flow via the British Virgin Islands; Cayman Islands; and Hong Kong, China. It is possible that some of this FDI returns as FDI to other Asian economies. On the other hand, other Asian countries FDI in Hong Kong, China, are actually destined for countries outside the region. Intraregional Foreign Direct Investment Share 21 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

23 FDI Net Inflows to ASEAN members Highlights of Asian Service Industry The opportunities for growth for Service industry in Asia are tremendous. It is estimated that there are currently 4.8 million high-income Asian households outside Japan with an annual income above US $ 50,000. With a projected medium-term economic growth outlook of 3-5 % p.a. for Southeast Asia and 5-7 % for China and India, this number is set to rise steadily. The growing affluence will translate into huge demand for services, especially higher end and better quality services. E.g. Quality Health care Services and education services. According to the "Foresight 2020" study conducted by the Economist Intelligence Unit (EIU) and sponsored by NASDAQ-listed Cisco Systems China and India also offer huge promise in tourism. The next 15 years will see a significant outpacing by Asia, and particularly the powerhouses of China and India, of the rest of the developing world in gross domestic product (GDP), wages and consumption power. Also, China and India will contribute 65 million and 142 million new workers to the global workforce respectively by Key Findings Economic growth is expected to remain robust over the next 15 years. 22 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

24 Overall, both China's and India's GDP will grow at an annualized rate of 6%. By 2020, China's economy measured at PPP exchange rates will be on par with the United States. China s share of global consumer spending will nearly triple in the next 15 years. Asia overall will be the largest consumer region. Some 471 million net new workers will enter the global workforce, with China alone accounting for 65 million of these. India will account for a remarkable 142 million, with the United States the thirdlargest contributor with 12.5 million new workers. Importance of the personalization of services will increase dramatically. Customers and suppliers will become more involved in product development and cross-functional and cross-border teams will work together more frequently. Asian Scenario forecasts: Developing Asia s growth is projected to expand by 6.1% in 2012 and by 6.7% in 2013, down significantly from 7.2% in 2011; The PRC is forecast to grow by 7.7% this year and by 8.1% in 2013, considerably more slowly than the robust 9.3% growth of 2011; India will see GDP growth slow to 5.6% in 2012 and bounce back to 6.7% in 2013; Weakening growth momentum will temper price pressures, pushing inflation in the region down from 5.9% in 2011 to 4.2% in both 2012 and 2013; The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the United States (US) pose major risks to the outlook; Developing Asia has no widespread, urgent need at the moment for countercyclical policy intervention; Countries will have to rely more on enhancing productivity and efficiency to secure future prosperity; Developing Asia s service sector is to play a growing role as economies that graduated from agriculture to industry evolve further into service economies; A key challenge is to raise service sector dynamism by moving toward high-value modern services, such as information and communication technology, finance, and professional business services; A vibrant service sector would have broad economic benefits, including the creation of jobs for women in particular, thus supporting inclusive growth; Lack of human capital, inadequate infrastructure and restrictive regulations are major bottlenecks for developing a modern service sector. Service Industry: Indian Scenario The service industry forms the backbone of social and economic development of a country. It has emerged as the largest and fastest-growing sectors in the world economy. The service sector has shown a growth rate higher than that of agriculture and manufacturing sectors. This sector covers a wide range of activities, such as trading, transportation, communication, financial, real estate and business services The most important services in the Indian economy have been in the health and education sectors. These are one of the largest and most challenging sectors and hold a key to the country s overall progress. A strong and welldefined health care sector helps to build a healthy and productive workforce. The era of economic liberalization has ushered in a rapid change in the service industry. As a result, over the years, India has been witnessing a transition from agriculture-based economy to a knowledge based economy. The knowledge economy creates, disseminates, and uses knowledge to enhance its growth and development. One of the major functional pillars of this economy is Information Technology (IT) and IT-enabled services (ITeS) industry. IT continues to be a dominating sector in the overall growth of the Indian industry. 23 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

25 Another major and upcoming sector is Retail. It has been one of the fastest growing sectors both in terms of turnover and employment. Many national and global players have been investing in the retail segment and making all out efforts to further expand the sector. The service sector holds immense potential to accelerate the growth of the economy and promote general wellbeing of the people. They offer innumerable business opportunities to the investors. They have the capacity to generate substantial employment opportunities in the economy as well as increase its per capita income. Without them the Indian economy would not have acquired a strong and dominating place on the world platform. Different indicators like share in national and states GDP, FDI, employment, and exports indicate the importance of the services sector for the Indian economy. Composition of Service Sector in India In India, the national income classification given by Central Statistical Organization is followed. In the National Income Accounting in India, service sector includes the following: 1. Trade, hotels and restaurants (THR) 1.1 Trade 1.2 Hotels and restaurants 2. Transport, storage and communication 2.1 Railways 2.2 Transport by other means 2.3 Storage 2.4 Communication 3. Financing, Insurance, Real Estate and Business Services 3.1 Banking and Insurance 3.2 Real Estate, Ownership of Dwellings and Business Services 4. Community, Social and Personal services 4.1 Public Administration and defense (PA & D) 4.2 Other services Services GDP The share of services in India s GDP at factor cost (at current prices) increased from 33.5 per cent in to 55.1 per cent in and to 57 per cent in as per Advance Estimates (AE). If construction is also included, the service sector s share increases to 63.3 per cent in and 64.4 per cent in With a 16.9 per cent share, trade, hotels, and restaurants as a group is the largest contributor to GDP among the various services subsectors, followed by financing, insurance, real estate, and business services with a 16.4 per cent share. Community, social, and personal services with a share of 14.3 per cent is in third place. Construction, a borderline service inclusion, is at fourth place with an 8.2 per cent share. Services Sector contribution to the Indian Economy in 2012 Agriculture 17% Services 57% Industry 26% 24 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

26 Share of different services categories in GDP at factor cost (current prices) The CAGR of the services sector at 10.2 per cent for the period to has been higher than the 8.6 per cent CAGR of GDP during the same period, clearly indicating that the services sector has outgrown both the industry and agriculture sectors. In the years and , the services sector has grown at 10.5 per cent and 9.3 per cent respectively. In , the growth rate of services is 9.4 per cent (AE). 25 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

27 Growth rate of GDP & Service sector GDP State-wise Comparison of Services A comparison of the share of services in the gross state domestic product (GSDP) of different states and union territories (UTs) in shows that the services sector is the dominant sector in most states of India.States and UTs such as Tripura, Nagaland, West Bengal, Mizoram, Maharashtra, Bihar, Tamil Nadu, Kerala, Delhi, and Chandigarh have higher than all-india shares. Chandigarh with an 86 per cent share and Delhi with 81.8 per cent top the list. Other than Chhattisgarh (34.8 per cent) and Himachal Pradesh (39.6 per cent), services in all other states individually hold a share of more than 40 per cent in the GSDP. Thus the services revolution in India seems to be becoming more broad-based, with even the hitherto backward states piggy-backing on the good performance of this sector to go up the escalator of progress. The highest growth rates of the services sector are in the north-eastern states of Arunachal Pradesh (34.9 per cent) and Sikkim (30.1 per cent). Among the other states, Goa with 20.1 per cent and Bihar with 16.6 per cent growth top the list. This is over and above their very high growth rates in Other states with higher than national average growth in the sector are Kerala, Tamil Nadu, Maharashtra, and Mizoram. Share & growth of service sector in PERFORMANCE OF SERVICES SUB-SECTORS India s services sector excluding construction and including construction grew by 9.3 and 9.2 per cent respectively in and by 9.4 and 8.8 per cent respectively in , as per the CSO s AE. This is nearly 2 percentage points higher than the overall growth rate in Broad category-wise, the trade, hotels & restaurants, transport, storage and communications category had the highest growth at 11.2 per cent, followed by financing, insurance, real estate, and business services at 9.1 per cent in Trade and Real estate, ownership of dwellings, and business services are two major sub-sectors with shares of 15.4 per cent and 10.6 per cent of GDP respectively in The shares of the two sectors have been more or less stable over the years. In , the growth of the former has been good at 9.1 per cent and the latter moderate at 6.9 per cent. 26 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

28 Communications followed by banking and insurance are the fastest growing sub-sectors over the years with 27.2 per cent and 14.5 per cent growth respectively in (Table 10.5). Among other services which have a share of around 8 per cent in India s GDP, education, medical and health, and personal services are the major items. Interestingly some items have high growth rates with small shares which are rising. These include coaching center s with above 18 per cent growth in the last five years and share in other services rising from 4.9 per cent in to 8.4 per cent in ; recreation and entertainment services with a steady 9 per cent growth in the last five years and share in other services increasing from 5.4 per cent in to 6.1 per cent in ; and custom tailoring with a steady 13 per cent growth in the last five years and share in others services increasing from 3 per cent in to 4.1 per cent in Annual Growth in India s Services GDP at Factor Cost (in constant prices) Performance of Services Firms: A Sectoral Analysis The Centre for Monitoring Indian Economy s (CMIE) analysis of the sector-wise performance of services activities based on firm-level data is given here. The data for and are based on estimates and forecasts. Transport logistics: The sales of the transport logistics services industry are estimated to have grown by a healthy 17.5 per cent during This growth is likely to have been achieved by a combination of higher 27 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

29 cargo volumes and better realizations. In as a whole, the sales of this sector are expected to grow by 9.6 per cent and profit after tax (PAT) at 17.8 per cent. In sales are expected to grow at 9.9 per cent and PAT 11.1 per cent. Shipping: The shipping sector s sales had fallen by 4.8 per cent in In the year as a whole, the shipping sector is likely to grow at a modest 2.9 per cent. Exchange rate fluctuations and port and offshore operations are expected to contribute substantially and provide a support level for the sector s total sales during the year. However, the industry s PAT is likely to decline by a phenomenal 75.7 per cent, mainly due to a sharp surge in interest expenses in the light of a weaker Indian rupee. During , sales are expected to grow by 5.7 per cent and PAT by 49.2 per cent. Aviation: During , sales had grown by 24.2 per cent. In the year as a whole, the aviation sector s sales are expected to grow by 10.5 per cent, driven by higher passenger volumes. However, a weaker rupee is likely to result in a rise in operating expenses. Fuel expenses are expected to rise by 40.2 per cent. Wages and other operating expenses are expected to rise by per cent each. During sales are expected to grow by 13.5 per cent. Retail sector: Retail trading companies have witnessed a decline in sales growth in by 12 per cent and so far in by 9.4 per cent. A sharp rise in prices of branded apparels, due to the imposition of 10.3 per cent excise duty as well as a rise in prices of yarn and fabrics, led to lower consumer spending and this has hit the sales volumes of garment retailing companies. However, during sales are expected to grow by 15.7 per cent. PAT during is expected to show an impressive growth of 53.1 per cent and during is expected to grow by 34.4 per cent. Health Services: During , sales of the industry had grown by 25.4 per cent. During and , sales are expected to grow by a healthy 18.6 per cent and 20.5 per cent respectively on the back of higher occupancy levels in hospitals and revenues per occupied bed. However, major cost components like salaries and wages and other operating expenses are expected to grow at a faster rate of 21.7 per cent and 21.1 per cent respectively. The PAT of the sector is expected to fall by 24 per cent in and grow by17 per cent in Hotel: The hotel industry had reported sales growth of 14.3 per cent during and is expected to maintain this level in and PAT is expected to grow at 36.2 per cent in and 26.4 per cent by The growth in tourist inflows in and is likely to be driven by tourists from regions other than North America and Western Europe. This includes Asian regions like South Asia, East Asia, and South East Asia. The shares of tourists from these countries have been rising in recent years, as per the data released by the Ministry of Tourism, and are expected to rise in the coming years as well. Telecom: After rising to 10.5 per cent during , sales growth of the telecom industry is expected to be 8.7 per cent in and 10.6 per cent in PAT during is expected to fall by 84.7 per cent, mainly on account of the sharp rise in the industry s interest outgo and higher depreciation charges due to the heavy borrowings for acquiring 3G licenses and rolling out 3G services. Software: During , sales had increased by 17.1 per cent and PAT by 15 per cent. For the year ending March 2012, the industry s sales are expected to grow by 20.5 per cent and further to increase by 18.5 per cent during Growth in sales will be mainly driven by an increase in volumes of IT companies. PAT is expected to grow by 13.1 per cent in and 14.2 per cent in In spite of a healthy growth in sales, the industry s margins are expected to remain under pressure due to higher wage bill and increased tax provisioning. Construction and allied activities: After a 14.2 per cent growth in , the industry s sales are expected to grow by 16.1 per cent during However, the same cannot be said about the industry s profit performance. PAT had declined by 9.1 per cent during and is expected to decline by 10.4 per cent during This will be on account of rising construction costs and higher interest outgo. Prices of key inputs like steel and cement are expected to rise by 7.2 per cent and 5.5 per cent respectively during the year. Interest expenses are also likely to rise by a sharp 46.7 per cent in due to rise in interest rates and 28 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

30 higher borrowings. During , sales and PAT are expected to grow by 18.6 per cent and 17.4 per cent respectively. Indian Scenario of Service Industry An integral part of India s structural reform program and liberalization, the services sector is one of the fastest growing sectors in the country. Service sector or tertiary sector accounts for about 59 per cent of India s gross domestic product (GDP) and forms the backbone for social and economic development. The sector entails industries like banking & financial services, education, healthcare, information technology (IT), telecom, media & entertainment, management, security, transportation and many more. The HSBC Market Business Activity Index which measures service sector activity rose to 58.2 in July 2011 from 56.1 in June 2011, supported by confidence among service providers regarding future business prospects. Indicators/ Industry Dynamics The lead indicators, discussed as following, suggest that the progress made by the service sector in India is here to stay. As per the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation: Trade, hotels, transport and communication grew 12.8 per cent in first quarter (April-June) of over the corresponding quarter of Similarly, financing, insurance, real estate and business services grew at 9.1 per cent in the first quarter of Community, social & personal services is estimated at 5.6 per cent for the reported period. Moreover, Number of foreign tourist arrivals (FTAs) grew 10.8 per cent at 3.42 million for the period January-July 2011 over the corresponding period in There has been a growth of 10.1 per cent in FTAs in July 2011 (0.49 million) over July 2010 (0.45 million). There was an addition of 11.3 million telecom subscribers in the month of June 2011, increasing the total telecom subscriber base by 1.29 per cent to million, stated Telecom Regulatory Authority of India (TRAI) in its report. Cargo handled at major ports registered growth rate of 5.2 per cent while cargo handled by the civil aviation grew by 4.9 per cent for the first quarter of FY12. The key indicators of railways, namely, the net tonne kilometers and passenger kilometers grew by 6.3 per cent and 6.1 per cent, respectively in the first quarter of The key indicators of banking, namely, aggregate bank deposits and bank credits have expanded by 18.7 per cent and 21 per cent, respectively during the first quarter of over the first quarter of Exports India emerged as the 10th biggest exporter of services worldwide for the year 2010, up from 12th position in 2009, according to recently released World Trade Report In terms of value in 2010, India exported services worth US$ 110 billion. India's service exports stood at US$ billion for April-June The service exports receipts for the month of June 2011 were US$ billion. Major Investments The services sector (financial and non-financial) attracted cumulative foreign direct investments (FDI) worth US$ 27,807 million between April 2000 and May 2011, accounting for 20 per cent of the total FDI inflows, according to data released by the Department of Industrial Policy and Promotion (DIPP). Some of the investment commitments made by Indian service providers are discussed below: Indian telecom service provider Aircel has partnered with cloud services facilitator Virtela to offer India s first global cloud-based application acceleration service for the enterprise space. Infosys business process outsourcing (BPO), has renewed its service contract with Alcoa Global Business Services (GBS) - the world's leading producer of aluminium and alumina. India s second largest public sector lender Punjab National Bank (PNB) is set to form a strategic alliance with insurance firm Metlife for its proposed life insurance business, wherein the bank would buy 30 per cent stake for an undisclosed amount. PNB also agreed to enter into a 10-year distribution tie-up with Metlife India. The deal is expected to close by the end I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

31 Government Initiatives The Government has taken incredible steps in several aspects of service industry to give an impetus to the economy as a whole. Some of the initiatives taken by the government in service sub-segments are enlisted below- In a bid to connect Indian villages and classrooms across the country with knowledge centres, the government has taken up a task of providing broadband connectivity to all the village panchayats by Sufficient funds have been allocated for the same. Insurance Regulatory and Development Authority (IRDA) has recently hinted at mandatory listing of insurance companies. Though the insurance Act doesn t stipulate companies to go public, the regulator might make amendments to it to facilitate capital raising by the players. Initial Public Offer (IPO) guidelines for the insurance sector are also being worked upon. References: Press releases, media reports, Indian-commodity online, Statistics from Department of Industrial Policy and Promotion (DIPP), Ministry of Statistics and Program me Implementation (MOSPI), HSBC Market Index The Road Ahead The global recession only partially succeeded in slowing the Indian economy thanks to the continual offsetting growth of service sector to nearly 10% in the year The Economic Survey suggested that the Services Sector continues to remain growth engine for Indian Economy. The Economic Survey points out that the Services Sector grew by 9.4% which was little higher than 9.3% in the previous year. The dampening effect of international investment into industry sector slowed the GDP growth rate to 6.9% unleashing a flurry of worries for the Government. The industry sector contributes nearly 26% to the GDP. However, maintaining the growth momentum the Service Sector recorded expected growth rate to bottom out the industrial slow down across the globe. The Sector along with the agricultural sector placed India in the top fastest growing economies of the world despite Euro zone crisis and North American economic instabilities. The Survey clearly says that the economy has successfully navigated the turbulent years of the recent global economic crisis because of the vitality of this Sector in the domestic economy and its prominent role in India s external economic interactions. The Survey reveals that the share of services in India s GDP at factor cost (at current prices) increased from 33.5 per cent in to 55.1 per cent in and to 56.3 per cent in as per Advance Estimates (AE). If construction is also included, the Service Sector s share increased to 63.3 per cent in and 64.4 per cent in Projecting the employment figures the Survey says that while agriculture continues to be the primary employment-providing sector, the Services Sector (including construction) is in second place. The combined FDI share of financial and non-financial services, computer hardware and software, telecommunications and housing and real estate is 41.9 per cent of the cumulative FDI equity inflows during the period April 2000-December With the inclusion of the construction sector (6.5 per cent), the share of services in FDI inflows increases to 48.4 per cent. Following the general trend in FDI inflows, FDI inflows to the Services Sector (top five sectors including construction) have also slowed down in and , with negative growths of -7.5 per cent and per cent respectively in rupee terms. In (April to December), again following the trend of overall FDI inflows, which increased by 50.8 per cent to reach US$ billion, FDI inflows to the top five Service Sectors (including construction) also increased by 36.8 per cent to US$ 9.3 billion to the Services Sector in (April-December). Analyzing the States performance in the Service Sector the Economic Survey notes that the highest growth rates of the Services Sector are in the north-eastern States of Arunachal Pradesh (34.9 per cent) and Sikkim (30.1 per cent). Among the other States, Goa with 20.1 per cent and Bihar with 16.6 per cent growth top the list. This is over and above their very high growth rates in Other States with higher than national average growth in the sector are Kerala, Tamil Nadu, Maharashtra and Mizoram. The Survey, while outlining the performance of major services like Tourism including hotels and restaurants, Shipping, IT and ITeS and Construction Services expresses no cause for worry despite a slight moderation in services growth to 9.4 per cent (as also in ). It says this moderation is due to the steep fall in growth of 30 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

32 public administration and defense services reflecting fiscal consolidation. In fact growth in trade, hotels and restaurants is more robust at 11.2 per cent and retail-sector growth is expected to be more robust in Source: RBI Annual Report 2012 Construction activity slowed down as housing inventories rose with price rigidities observed in the industry to protect high profit margins. With record road tendering in , construction activity could receive support in the coming years. However, newer constraints for road projects have emerged lately, reflected in sharp drop in tendering during Q1 of In , trade, hotels, transport and communication also slowed given its strong linkage with industrial activity. Slowdown in transportation is also mirrored in deceleration in production of commercial motor vehicles. Telecom industry slowed down along with moderation in the number of new cell phone connections, reflecting in part imposition of regulatory penalties and in part plateauing of penetration levels after a period of extra-ordinary growth. The outlook for the services sector depends to a large extent on the revival of industrial growth given the dependence of sub-sectors such as trade and transport on industrial production. Prospects of the sector also depend on the developments in the global economic situation Continued fragility in economic conditions in the advanced economies may have adverse impact on Indian services exports. Structural shift in employment evident in recent years In general, as economies grow there is a shift in employment pattern away from agriculture into manufacturing and then into service sector. In India, the pace of transformation in the structure of employment has been slow. Agriculture employed 53.2 per cent of the total work force in , while contributing around 14.7 per cent of GDP. On the other hand, industry and services sector contributed 20.2 per cent and 65.1 per cent, respectively of GDP while employing only 11.9 per cent and 35.0 per cent, respectively, of the work force. In recent years, there has been a shift in employment away from agriculture and manufacturing in favor of construction, transport and communication.employment in the construction sector increased by 62 per cent between and , accounting for most of the employment generated during the period. As regards 31 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

33 the nature of employment, casual labor accounted for most of the increase in overall employment during this period, suggesting that the employment generated may not be permanent. During the period to , decline in employment is observed with respect to youth and women. Employment among young males in the age group of years declined by 12 per cent during this period. This was mainly due to increased enrolment rate in educational institutions. Males in the age-groups who reported attending educational institutions as their primary activity increased from 51 per cent in to 63 per cent during As regards women, there was a withdrawal from the labor force reflected in the decline in the work participation rate (WPR) among women across all age groups. As a consequence, the proportion of women engaged in domestic duties increased from 31.6 per cent in to 37.8 per cent in The Economic Scenario India is expected to be the second largest manufacturing country in the next five years, followed by Brazil as the third ranked country, as per Deloitte Touché Tohmatsu Ltd (Deloitte). Some of the other important economic developments in the country are as follows: The cumulative amount of foreign direct investments (FDI) equity inflows into India were worth US$ 179,025 million between April 2000 to August 2012, of which US$ 8,166 million was recorded during the April 2012 to August 2012 period, according to the latest data published by Department of Industrial Policy and Promotion (DIPP) Total exports from the Indian services sector stood at US$ billion in September 2012, up 6.3 per cent from US$ billion in September 2011, as per data released by the Reserve Bank of India (RBI) Foreign institutional investors (FIIs) remain substantially bullish on Indian markets and have invested over US$ 13 billion into Indian stocks so far in 2012 Mergers & acquisitions (M&A) and private equity (PE) deal activities witnessed an increase in October 2012 with cumulative value worth US$ 3.1 billion from 90 transactions PE firms have invested US$ 2.5 billion in India across 97 deals in the third quarter (Q3) of 2012, registering four per cent increase in terms of value, as compared to US$ 2.4 billion in Q3 of 2011, according to a study by PricewaterhouseCoopers (PwC) Foreign institutional investors (FIIs) made a net investment of Rs 11,364 crore (US$ 2.05 billion) in the equity market and of Rs 7, crore (US$ 1.41 billion) in the debt market upto October 12, 2012 in the current year, according to data released by the Securities and Exchange Board of India (SEBI) Foreign investments in Indian markets through Participatory Notes (P-Notes) peaked to a seven month high of Rs 1,46,600 crore (US$ billion) in September 2012, sustained by expectations of fresh initiatives by the Government on policy reforms as well as the QE3 in the US boosting investor sentiment India is expected to receive remittances worth US$ 70 billion in 2012, emerging on top of the list of developing countries which are expected to receive a total of US$ 406 billion remittances in 2012, according to the World Bank The Indian pharmaceutical industry is expected to be amongst the top 10 global markets in value terms by 2020, according to a joint report prepared by Confederation of Indian Industry (CII) and PricewaterhouseCoopers (PwC). The Indian pharma industry has been growing at a compound annual growth rate (CAGR) of more than 15 per cent over the last five years and has significant growth opportunities India is one of the leading offshore destinations in delivering engineering research and development (ER&D) services with a market share of 22 per cent. The market in India is expected to grow to US$ 42 billion by 2020, as per a Zinnov study titled, 'Engineering R&D: Advantage India' India would take its new and renewable energy capacity to 54,000 megawatt (MW) by 2017, as per Mr Gireesh B Pardhan, Secretary, Ministry of New and Renewable Energy (MNRE). Currently, the country has a renewable energy capacity of around 27,000 MW 32 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

34 The information technology (IT) and business process outsourcing (BPO) sector of India is expected to register a growth of 11 per cent and revenue of US$ 75 billion-us$ 77 billion during , according to National Association of Software and Services Companies (Nasscom) The public cloud services market in India is projected to grow to US$ million, registering 32.4 per cent growth in 2012, highlighted a report by Gartner As per Venture Intelligence data, the healthcare and life sciences sector has received the maximum investment from private equity (PE) and venture capital (VC) players, attracting US$ 817 million across 29 investments till August 2012, as compared to US$ 421 million worth 38 deals in 2011 The specialty chemicals industry of India is estimated to grow from US$ 22 billion to US$ 80-US$ 100 billion by 2020, as per a McKinsey study The entertainment and media industry in India is expected to reach Rs 1,750 billion (US$ billion) by 2016, according to a joint study by CII and PwC. In India, internet access and gaming segments have also emerged as the fastest-growing at 57 per cent and 33 per cent CAGR, respectively The Indian food services industry is worth nearly Rs 75,000 crore (US$ billion) and is growing at a healthy CAGR of 17 per cent. It is expected to reach Rs 137,000 crore (US$ billion) by 2015, according to a report released at the Indian Restaurant Congress 33 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

35 CHAPTER 2 MAJOR SERVICE SECTORS IN ASIA The tertiary sector of the economy (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately the same as manufacturing) and the primary sector (agriculture, fishing, and extraction such as mining). The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. The basic characteristic of this sector is the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, experience, and discussion. The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods. SERVICES GDP: INTERNATIONAL COMPARISON In 2010, the share of services in the US$63 trillion world gross domestic product (GDP) was nearly 68 per cent, as in India s performance in terms of this indicator is not only above that of other emerging developing economies, but also very close to that of the top developed countries. Among the top 12 countries with highest overall GDP in 2010, India ranks 8 and 11 in overall GDP and services GDP respectively. While countries like the UK, USA, and France have the highest share of services in GDP at above 78 per cent, India s share of 57 per cent is much above that of China at 41.8 per cent. In 2010 compared to 2001, India is the topmost country in terms of increase in its services share in GDP (7 percentage points) followed by Spain and Canada (5.3 percentage points each), the UK (4.5 percentage points), and Italy (3.2 percentage points). In terms of compound annual growth rate (CAGR) for the period , China at 11.3 per cent and India at 9.4 per cent show very high services sector growth. Russia at 5.5 per cent and Brazil at 4.0 per cent are a distant third and fourth respectively. While India s growth rate of the services sector at 10.1 per cent in 2009 was higher than that of China at 9.6 per cent, in 2010 it has decelerated to 7.7 per cent while China s has remained constant (Table 10.1). All this highlights the prominence of the services sector for India. Despite the higher share of services in India s GDP and China s dominance in manufacturing over services, the hard fact, however, is that in terms of absolute value of services GDP and also in terms of growth of services, China is still ahead of India in I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

36 MAJOR SECTORS IN SERVICE INDUSTRY Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. AVIATION INDUSTRY Aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, footlaunched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting. Each country regulates aviation differently, but general aviation usually falls under different regulations depending on whether it is private or commercial and on the type of equipment involved. 35 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

37 Many small aircraft manufacturers serve the general aviation market, with a focus on private aviation and flight training. The most important recent developments for small aircraft (which form the bulk of the GA fleet) have been the introduction of advanced avionics (including GPS) that were formerly found only in large airliners, and the introduction of composite materials to make small aircraft lighter and faster. Ultra light and homebuilt aircraft have also become increasingly popular for recreational use, since in most countries that allow private aviation, they are much less expensive and less heavily regulated than certified aircraft. This sector has been going through a turbulent phase over the past several years facing multiple headwinds high oil prices and limited pricing power contributed by industry wide over capacity and periods of subdued demand growth. Over the near term the challenges facing the airline operators are related to high debt burden and liquidity constraints - most operators need significant equity infusion to effect a meaningful improvement in balance sheet. Improved financial profile would also allow these players to focus on steps to improve long term viability and brand building through differentiated customer service. Over the long term the operators need to focus on improving cost structure, through rationalization at all levels including mix of fleet and routes, aimed at cost efficiency. At the industry level, long term viability also requires return of pricing power through better alignment of capacity to the underlying demand growth. Presenting Boeing s first quarter 2011 results, the company s chairman, Jim McNerney, underscored the fact that the aviation industry saw global air traffic return to peak levels in 2010, though demand has since softened slightly, along with some softening in the European and US economies. Utilization rates continued to improve across both single and dual-aisle aircraft. The strong fundamentals, made up of continued global economic growth, firm demand for air travel, and good aircraft utilization rates, are driving high demand for aircraft, with Boeing recording 46 forward sales of its 777 airplane. McNerney told analysts that Boeing planned to increase its production capacity of commercial aircraft by some 40% during the next three years. Unlike the auto industry, which was significantly impacted by supply-chain disruption following the Japanese earthquake and tsunami, Boeing saw little significant impact on its operations, with no meaningful delays in parts deliveries. Boeing s 787 Dream liner is coming to the end of its flight testing phase and, when it enters service, the is expected to carry between 210 and 250 passengers, depending on seat configuration options, on routes of 14,200 to 15,200 km. The can carry up to 290 passengers a further 550 km. The significance of the Dream liner is that it brings big-jet distance ranges to mid-size airplanes, combined with much better fuel efficiencies and exceptional environmental performance by comparison with prior generations of airplane. Every year, Airbus produces a forecast ( Global market forecast, see More Info) for aircraft orders over the next 20 years. Trends noted in its latest forecast include: the rapid growth of emerging markets, where economies and demographic developments are both being driven by, and benefiting from air travel; the liberalization of aviation markets around the world, which is giving greater market access to airlines, and wider choice for passengers; the continuing growth of low-cost carriers across the planet, but particularly in Asia; the emergence of megacities, and increasing congestion at airports. In its report, Airbus predicts a demand for 26,921 new passenger jetliners over the period to 2030, together with 927 new freight aircraft deliveries, making a grand total of some 27,848 new jetliners being delivered to airlines over the next 20 years. The market value of this addition to the global airline fleet is worth some US$3.5 trillion. The Airbus report also makes the interesting point that air travel demand is actually extremely resilient in the face of major global shocks. A graph of demand over time creates a pretty steady bottom-left-to-top-right chart, with short pauses after major oil crises, the Gulf crisis, the World Trade Center attacks, SARS, and the global financial crisis. Boeing too, publishes an annual report, Current market outlook, which sets out the prospects for the aviation industry over the following 20 years. In its latest review, covering the period , Boeing remains optimistic about long-term trends. The company sees passenger traffic growing at an annualized rate of 5.1% over the next 20 years, almost tripling over the period. This is back in line with the long-term growth trend for the aviation industry. Cargo growth will be slightly faster, at 5.6% per year. On the basis of its figures, Boeing puts total demand for aircraft at a slightly higher level than Airbus, at 30,000 new deliveries with a market value of US$4 trillion. The twin-aisle market alone will require 7,000 new aircraft like the 787. The company puts freighter demand at 970 new deliveries, with most of these being big freighters, such as Boeing s new 747, due to come into service shortly. From 2010 to 2011 demand for single-aisle aircraft, much used by low-cost carriers, has increased sharply, causing Boeing to raise its estimate for the period by between 8% and 9%. In all, Boeing is forecasting demand for some 23,000 new single-aisle airplanes between now and Demand for large intercontinental aircraft is much smaller, at no more than 820 airplanes such as the Intercontinental. However, this is a big-ticket market with a total value of US$270 billion. 36 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

38 Sales Growth: After a strong rebound in 2010, the pax growth has been moderating over the last few quarters due to moderating economic growth and weak industrial activity. Besides, severe competitive pressure from domestic LCC players (rapidly gaining market share) and Air India (trying to maintain market share) have resulted in price wars (at times below cost pricing), lowered yields and moderated sales growth for the airlines. Even on international routes, the yields have remained weak due to weaker economic conditions and severe competition from global airlines. Rising ATF Prices & Steep Rupee Depreciation: The airlines industry had been severely impacted by the significant increase in ATF prices (up 57% in last 18 months) as Indian Carriers do not hedge fuel prices and have exhibited limited ability to charge fuel surcharges due to irrational and undisciplined pricing dictated by competition rather than costs / demand. Besides, the steep rupee depreciation (~18.7% depreciation in CY11, although partly reversed through 7.3% YTD appreciation in CY12) acts double whammy as apart from fuel costs, substantial portion of other operating costs like lease rentals, maintenance, expat salaries and a portion of sales commissions are USD-linked or USD denominated. Profit Margins: With combined impact of 1) moderating pax growth 2) lower yields due to excessive competitive 3) rising ATF prices 4) steep rupee depreciation and 5) rising debt levels and interest costs, the profitability margins of the airlines industry have been severely impacted. As per Centre for Asia Pacific Aviation (CAPA), Indian carriers could be posting staggering losses of $2.5 billion (~Rs 12,500 crores) in , worse than the losses of when traffic was declining and crude oil prices spiked to $150 per barrel. Overall, the industry has been marred by cost inefficiencies and is bearing the brunt of aggressive price cuts, rising costs, expensive jet fuel, a weaker rupee, high interest payments and hence mounting losses. The government support required to bailout the loss making Air India has increased substantially; while the leading private players like Kingfisher Airlines, Jet Airways and Spice Jet are making significant losses. With Banks unwilling to enhance their exposure to the industry, recast their loans or pick up equity stakes without viable business plans, industry needs to come out with strong equity infusion plans. Hence, the government is mulling allowing foreign carriers to pick strategic stakes in domestic airlines to help them stay afloat in these difficult times, besides bringing global expertise and best industry practices over the medium term. 37 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

39 Technological Developments: Aircraft makers are focused on reducing fuel consumption, and operating costs in general, in the battle to win orders from airlines. Fuel costs, which can account for 50% of an airline s operating costs, can make or break an airline. Boeing says that its 787 Dreamliner will cut fuel use by 20% thanks to new engines and the use of lightweight, composite materials. Meanwhile, EADS says that the A380 is the first long-haul aircraft to consume less than three liters of fuel per passenger over 100 km, a rate comparable to an economical family car. It claims that the A380 s efficiency and advanced technology result in 15 20% lower seat-mile costs than those of competitor aircraft. Fuel-efficient engines and the use of advanced composite materials have played a vital role in reducing the A380 s operating costs. The airframe is made up of some 25% composite material by weight, while the Airbus A350XWB, which entered production in 2010, utilizes around 50% composite material. Boeing and Airbus are also engaged in developing alternative fuels. The engine makers Pratt & Whitney, Rolls-Royce, and General Electric are all involved, and the momentum is being maintained, even though oil prices have fallen considerably from their mid-2008 peaks. In January 2009, Alan Epstein, vice-president of technology and environment at Pratt & Whitney, said, It s the first time in the history of jet aviation that the world is seriously considering going to a totally new fuel. IATA has a goal of 10% alternative fuels by 2017, while in the United States, the Federal Aviation Administration is encouraging the use of new fuels. Several flights have already taken place using biofuels. In April 2010, for example, a Boeing F/A-18 Green Hornet carried out a biofuel-powered flight and became the first US Navy fighter to be powered by a biofuel blend. The Navy noted that the F414 engine performed as expected during the 45-minute flight and indicated the aircraft did not know the difference between the bioblend and its traditional fuel source. BUSINESS PROCESS OUTSOURCING (BPO) INDUSTRY Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain. BPO is typically categorized into back office outsourcing - which includes internal business functions such as human resources or finance and accounting, and front office outsourcing - which includes customer-related services such as contact centre services. BPO that is contracted outside a company's country is called offshore outsourcing. BPO that is contracted to a company's neighboring (or nearby) country is called near shore outsourcing. Often the business processes are information technology-based, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled Service. Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry. In 2010, the Philippines have surpassed India as the largest business process outsourcing industry in the world. Present Scenario: There is no doubt that the outsourcing business has come to stay in India. The advantage that India provides the foreign clients is the availability of a good English speaking population, who are well educated and ambitious, coupled with the savings that foreign clients make with respect to salaries and infrastructure. Another unmatched advantage is the average age of the work force in India, which is just 30 years, as compared with any other country in the world, where the average age varies between 45 and 50 years. Since the B.P.O industry requires a very young crowd this huge advantage cannot be matched by any country in the world. Earlier only routine jobs were outsourced to India. This scenario has totally changed. Apart from routine jobs, high end jobs are also outsourced, which has paved the way for functions like KPO, RPO, Technical writing and so on. Over the last few years there have been a few stray cases of frauds taking place within the BPO industry. This is not a serious problem as portrayed by the fourth estate. Such frauds are very common in countries like US and UK, where BPO employ lakhs of people. But in India, the kind of hype the media generates, show these happenings to have damaging consequences on the BPO industry. To tackle the problem of frauds, NASSCOM has taken the initiative to come up with a cyber law which punishes any employee who resorts to unethical practices. As part of the ongoing process, NASSCOM is taking it on priority to make the security systems as fool proof as possible. Another initiative is the appointment of verification agencies to ensure that the information given by the candidate in his resume is authentic. 38 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

40 An All India Ranking System known as NAC (Nasscom Assessment of Competence) is on the cards for all candidates who want to be a part of this industry, thereby ensuring quality manpower and reducing the recruitment time of HR personnel and thereby help them focus on critical issues. The NAC test is online and tests the candidate on all skills required for a call centre executive, which is an entry level position. The NAC test will be mandatory for all BPO aspirants in the near future. Though countries like China, Vietnam and Philippines are gearing up to get a chunk of the business, there is absolutely no doubt whatsoever, that India will continue to be the most preferred destination. Even though the wages in countries like China and Philippines are low as compared with India, still the availability of a young work force makes India the preferred choice. Initially the B.P.O. industry was looked down upon by people from other industries. But gradually with the passage of time and the emergence of new areas like K.P.O, R.P.O, E.P.O, Content Writing, Technical Writing and so on, which requires highly qualified and experienced personnel with professional qualifications and specialized skill, professionals have started looking at the B.P.O. industry seriously, as a long term career option. Trends: The Asia/Pacific (excluding Japan) business process outsourcing (BPO) market is forecast to reach $9.5 billion in 2016, up from $5.9 billion in 2011, according to Gartner, Inc..In 2012, BPO in Asia/Pacific is on pace to total $6.45 billion. The Asia/Pacific BPO market is still relatively underdeveloped and underexploited (with the exception of Australia and New Zealand) when compared with other markets or regions, said T.J. Singh, research director at Gartner. This presents opportunities to BPO service providers that are willing to invest in the region. Key drivers for BPO buyers in Asia/Pacific are scalability, quality, best-of-breed process and technology infusion, and improved service levels. Cost continues to be a consideration in all deals. Asia/Pacific is an immature market for BPO services. No one provider dominates every type of BPO service, and very few BPO providers can successfully demonstrate true regional or Pan- Asia/Pacific BPO capabilities for multiple processes. The largest BPO market in Asia/Pacific in 2011 was Australia, with a market size of more than $4.63 billion, over 3.5 times larger than India ($1.26 billion), the second-largest consumer of BPO services. The fastest-growing BPO markets within Asia/Pacific will continue to be led by China and India. By vertical industry, banking and financial services, communications, government (both local and federal), technology, retail, and travel and transportation continue to be the largest consumers of BPO services in the region. Asia/Pacific continues to present service providers with lucrative high-growth and profitable markets that are still relatively underdeveloped and untapped. Even during these trying economic times the U.S. and European economic malaise buyers in Asia/Pacific are still grappling with issues such as revenue growth, market share gains, scalability, quality of service and better cost management. Some negative impacts may surface as BPO grows across the region, including higher wage inflation and attrition, as demand for talent in the domestic market competes with offshore demand from the U.S. and Europe. The BPO market consists of four segments that break down into many distinct submarkets. These four segments include: Customer management (sales, marketing and customer care) Enterprise services (HR, finance and accounting [F&A], operations and payment services) Vertical services (vertical-industry-focused processes, such as mortgage services and credit card services for the banking sector, claims processing for insurance, and billing services for telecommunications) Supply management services (logistics, procurement and warehousing The BPO service market in Asia/Pacific (excluding Japan) consists of a wide range of local, regional and multinational (including India-based) service providers. Although the market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers, said Mr. Singh. EVENT MANAGEMENT Event management is the application of project management to the creation and development of festivals, events and conferences. Event management involves studying the intricacies of the brand, identifying the target audience, devising the event concept, planning the logistics and coordinating the technical aspects before actually executing the modalities of the proposed event. Post-event analysis and ensuring a return on investment have become significant drivers for the event industry. [1] The recent growth of festivals and events as an industry around the world means that the management can no longer be ad hoc. Events and festivals, such as the Asian Games, have a large impact on their communities and, in some cases, the whole country. 39 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

41 The industry now includes events of all sizes from the Olympics down to a breakfast meeting for ten business people. Many industries, charitable organizations, and interest groups will hold events of some size in order to market themselves, build business relationships, raise money or celebrate. It is encouraging therefore that predicted growth in GDP for China & Asia for 2011 and 2012 remains very positive as shown in the table below. Although China has high inflation to deal with, these growth rates far exceed those predicted for the advanced economies, which will struggle to achieve 2% for 2011 and 2.6% for Growth in the meetings market tends to follow that of the economy overall, so these growth rates bode well for the meetings industry in China & Asia. The research results outlined in this report predict growth not only for the meetings market within China, but also for the volume of meetings and events inbound to China internationally, and particularly noticeable this year is the growth in meetings and events going outbound from China. 74% of buyer respondents and 52% of suppliers forecast an increase in the volume of events they will organise over the next twelve months. Despite these levels of growth in volume being very positive, cost pressures and trends in the meetings and events market globally are likely to impact the market in China in future. Pressure to reduce costs was the issue most buyers and suppliers mentioned as likely to influence events in the next twelve months. Only 34% of buyers and 27% of suppliers predicted budgets for individual events will increase in the year ahead. The global trends that will impact the market include: 1. Pressures on budgets worldwide are creating a market situation where buyers want 'more for less', looking for added value within the rates paid. This requires creative packaging from suppliers, strong negotiation skills and business planning which aims to keep prices as low as possible, while not compromising service quality and standards. 2. An increasingly competitive market worldwide demands high standards of facilities, service, technology and innovation, placing strains on countries that have recently entered the market and are still developing the required skills and professionalism. 3. At the same time price fluctuations are being caused by the worldwide economic situation, currency changes and rising food and fuel prices. Fuel prices will impact distances travelled making short haul destinations more attractive than long haul. Rising food prices are making it difficult for suppliers to maintain costs within acceptable budget ranges. TOURISM INDUSTRY Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Hotel and Tourism sector is declared as high priority sector and Foreign Direct Investment (FDI) upto 100 per cent, under the automatic route is permitted in Hotels Tourism Sector, subject to applicable laws/regulations, security and other conditional ties. Tourism has become a popular global leisure activity. In 2011, there were over 983 million international tourist arrivals worldwide, representing a growth of 4.6% when compared to 940 million in International tourism receipts (the travel item of the balance of payments) grew to US$1.03 trillion ( 740 billion) in 2011, corresponding to an increase in real terms of 3.8% from In 2011, international travel demand continued to recover from the losses resulting from the late-2000s recession, where tourism suffered a strong slowdown from the second half of 2008 through the end of After a 5% increase in the first half of 2008, growth in international tourist arrivals moved into negative territory in the second half of 2008, and ended up only 2% for the year, compared to a 7% increase in The negative trend intensified during 2009, exacerbated in some countries due to the outbreak of the H1N1 influenza virus, resulting in a worldwide decline of 4.2% in 2009 to 880 million international tourists arrivals, and a 5.7% decline in international tourism receipts. 40 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

42 In India, the tourism sector has witnessed significant growth in recent years. During the period 2006 to 2011, the CAGRs of foreign tourist arrivals (FTA) and foreign exchange earnings (FEE) from tourism (in rupee terms) were 7.2 per cent and 14.7 per cent respectively. FTAs in India during 2010 were 5.78 million compared to 5.17 million during 2009, posting a growth of 11.8 per cent, much higher than the growth of 6.5 per cent for the world in FEEs from tourism in rupee terms during 2010 were` 64,889 crore compared to ` 54,960 crore during 2009 with a growth rate of 18.1 per cent. Despite the slowdown and recessionary trends in the economies of Europe and America, FTAs during 2011 were 6.29 million with a growth of 8.9 per cent over 2010 and FEEs in 2011 were 77,591 crore with a growth of 19.6 per cent. In the case of outbound tourism, the number of Indian nationals departures from India during 2010 was million with a growth of 17.4 per cent for the year. Domestic tourism has also emerged as an important contributor to the sector providing much needed resilience. Domestic tourist visits during 2010 are estimated at million, with a growth of 10.7 per cent. Tourism is not only a growth engine but also an export growth engine and employment generator. The sector has capacity to create large-scale employment both direct and indirect, for diverse sections in society, from the most specialized to unskilled workforce. It provides 6-7 per cent of the world s total jobs directly and millions more indirectly Tourism services are services where you give it to a tourist or a customer. Tourism services give some good advice to their customers to show how their company functions correctly and to show how nice their service is. Tourism is not only a growth engine but also an export growth engine and employment generator. According to the Economic Survey , the sector has capacity to create large-scale employment both direct and indirect, for diverse sections in society, from the most specialized to unskilled workforce. RETAIL INDUSTRY Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers or directly through a wholesaler, and then sells smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations or online. Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Classification of Retail Industry: Department stores: These are very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service. Discount stores: These stores tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. Warehouses: Warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee. Variety stores: These offer extremely low-cost goods, with limited selection. Mom-and-Pop: It is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. The square feet area of the store depends on the store holder. Specialty stores: A typical specialty store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores. General store: It is type of a rural store that supplies the main needs for the local community. Convenience stores: Such stores are essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases. Hypermarkets: It provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. 41 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

43 Supermarkets: This is a self service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000 and 40,000 square feet (3,700 m 2 ). Malls: It has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Category killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon, ebay etc. Vending Machines: This is an automated piece of equipment wherein customers can drop the money in the machine and acquire the products. Trends: Despite global economic uncertainty and slowing GDP growth, annual packaged grocery sales in Asia Pacific increased 13 percent in the past year while volume sales increased by six percent, according to Nielsen s 2012 Retail and Shopper Trends Report. The latest installment of the annual Nielsen report, which identifies key trends and market shifts in the grocery sector in Asia Pacific, reveals that grocery prices remain a point of contention for consumers across Asia Pacific, ranking in their top-five concerns. In response to rising grocery prices, many consumers are adopting a cautious approach to spending, which has led to smaller, but more frequent trips to the grocery store. Shoppers continue to steadily shift their grocery shopping to modern trade channels (up approximately one percent per annum for the past decade), as they embrace the wider range, better shopping environment and lower prices these channels offer. Modern-trade-store numbers increased by 11 percent in the past year, to over 270,000. And investments in new, modern trade stores were the strongest in Vietnam, the Philippines and Thailand. Convenience-store numbers also experienced strong growth in the past year, up 10,000 to over 81,000, with the fastest expansion in convenience stores seen in South Korea. Consequently, the convenience channel saw the fastest growth of any store format in the region, up 15 percent. The Nielsen report found that private-label brands remain relatively undeveloped in Asia and contribute less than eight percent of sales in modern trade outlets. Growth of private label brands was highest in Taiwan, Korea and Indonesia, with sales increasing by over 20 percent. Sales of private-label products are beginning to gain traction in basic grocery categories such as paper products, plastic wraps and water and staples, like rice, and cooking products, where a low price is more important to shoppers. Private-label growth in Asia is hindered by low levels of consumer trust in categories where there is strong brand loyalty. 42 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

44 Analysis by Nielsen s Retailer Services and Shopper Insights teams has identified five key trends influencing the grocery retail sector in Asia Pacific, including: Economizing Asia Pacific economies have been relatively insulated from the wider global economic situation; however, shoppers across the region are looking to economize in order to reduce their grocery bills. In developed countries, this is primarily evidenced through heavier reliance on promotional offers, while in developing nations shoppers are focusing on buying only essential items. The new value equation Although shoppers are focusing on reducing their overall grocery expenditure, premium product offerings that provide a clear and tangible benefit are experiencing strong growth, particularly in categories such as specialty eggs and premium coffee mixes. Everyday shopping With grocery expenditure a key factor in grocery shopping habits, shoppers across Asia Pacific are increasing the frequency with which they shop for groceries, and in many markets grocery shopping has become a daily occurrence. Convenience in proximity In response to the increased frequency in grocery shopping trips, retailers are increasing their store numbers across all formats, with smaller formats in particular experiencing strong growth. Digital grocery shopping 2.0 Despite strong growth in internet penetration and usage across Asia Pacific, online sales of grocery products continues to lag behind other categories. Less than ten percent of urban shoppers in most Asian markets (with the exception of South Korea) visit grocery retailers websites regularly. Of those who do visit grocery websites, online purchasing is low, with obtaining information, viewing promotional leaflets and checking store locations being the primary motivators for visiting grocery websites. Markets where online retailing has gained traction, such as South Korea, provide valuable insight into the likely direction other Asia Pacific nations will take in the coming years as retailers invest in online infrastructure and develop models for profitable delivery of products. HOSPITALITY SERVICES Global Hospitality is a leading executive search firm serving the hotel, restaurant, and hospitality industries exclusively. With international offices and a professional staff having well over a century of accrued experience in the hospitality and recruiting industry, Global provides worldwide, industry-wide reach in finding and recruiting "star" candidates for all key positions. The company has earned an extraordinary reputation for successful recruitment and placement of talented hospitality executives in a broad range of senior-level and management roles in hotels, resorts, spas, clubs, casinos, restaurants, convention facilities, campus/university dining services, food service companies, and other areas of the hospitality industry. Hospitality Sector includes: Restaurant Management (Examples: Management of Food and Beverage Operations, Food Selection and Preparation, Food and Beverage Cost Control) Lodging Operations (Examples: Lodging Management, Hotel Operations, Resort Timeshare Management, Reservation Sales and Marketing, Hospitality Physical Plant) Global Tourism (Examples: Tourism Management, Airline Industry, Sustainable Tourism, Hospitality and Research Methods) Attractions Management (Examples: Theme Park Management, Entertainment Arts) Event Management (Examples: Event Industry, Catering Management, Hospitality Marketing Management) 43 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

45 Trends: The hotel industry will continue to benefit from the rapid growth in international travelers from emerging economies such as Eastern Europe, China, India, Asia-Pacific, Africa, and South America. Hotel and resort investment will also accelerate in emerging countries, due to more robust economic growth, a rising middle class, low density of hotels in metropolitan regions, and lower labour costs. These factors are critical going forward, as profitability is dependent on economic prosperity and the operator s ability to reduce costs a task more difficult to accomplish in the developed markets of Western Europe and North America and enhance labour productivity. As of June 2012, the development pipeline included 1,625 hotels with 374, 604 rooms in the Asia Pacific region, and 506 hotels with 129,077 rooms in the Middle East and Africa. Key growth markets are Dubai and Abu Dhabi in the UAE, Riyadh in Saudi Arabia and Cairo in Egypt. Hotel performance has been best in the Middle East and Africa this year, but worst in Europe, depressed by flat occupancies. Hotel operators in the emerging markets of Central and Eastern Europe have however, benefitted by being an attractive substitute destination relative to their peers in the South and West battling high levels of sovereign debt and civil demonstrations against austerity with foreign travel to the region advancing by almost 8% year-to-date and hotel occupancies increasing by 4.5%. In addition to the emerging market expansion strategy, in order to boost profitability, major hotel companies will continue to shift from direct ownership towards management and franchise agreements, and invest in proprietary online reservation systems to compete with web-based competitors, whom historically, have constrained revenue by undercutting room rates. FINANCIAL & BANKING SERVICES Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. The primary operations of banks include: Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business) Issuance of credit cards and processing of credit card transactions and billing Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using ATMs) Provide wire transfers of funds and Electronic fund transfers between banks Facilitation of standing orders and direct debits so payments for bills can be made automatically Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account Provide internet banking system to facilitate the customers to view and operate their respective accounts through internet Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly Provide a check guaranteed by the Bank itself and prepaid by the customer, such as a cashier's check or certified check Notary service for financial and other documents Accepting the deposits from customer and provide the credit facilities to them Trends: The banking industry in the Asia/Pacific region will show good growth, despite a potentially turbulent year for the financial services industry worldwide. More insights will be revealed in a forthcoming IDC Financial Insights report, Asia/Pacific Banking Top 10 Predictions, which sheds light on the top 10 trends expected to impact business and technology decisions in the Asia/Pacific banking sector in the upcoming year. Michael Araneta, Research Director for IDC Financial Insights Asia/Pacific says, "There are several mistaken generalizations about what will happen in Asia/Pacific banking in We correct the notion that many institutions will either fold up or exit the industry, leaving fewer players across the sub-regions, including Asia/Pacific. Instead, we expect that even more institutions will compete in our region and drive yet more ferocious market competition, even in already mature banking segments." Araneta continues, "We expect a 5.8% growth in the number of banking institutions from 2010 to We anticipate about the same growth in 2012." Several trends from the list of IDC Financial Insights' top ten predictions point towards a dynamic market in the region in the year ahead. The top ten predictions for 2012 are: The number of banks will grow even further. 44 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

46 IT spending growth will decelerate as banks drive down cost ratios to unprecedented levels. Spend on risk management will account for 15% of IT budgets. Longer core banking project implementations will become more acceptable. Asia/Pacific banks won't be hit hard by Basel III-related provisions, but can still stumble on the indirect burden of compliance. The ASEAN Economic Community (AEC) makes banks think "super-regional. Banks will become more willing to allocate considerable IT dollars to innovation programs. Big Data will find its first successful use cases in risk management and fraud management. The benefits of private and hybrid clouds will gradually relax anti-cloud Computing positions. Speed and real-time capabilities are the competitive differentiators to watch out for in In the area of IT spending, IDC Financial Insights expects banks' external IT budgets to expand by an average of 7% in 2012 over The growth rate is lower than what the industry has been accustomed to in the past years, reflecting a wait-and-see mindset taking hold in the industry at large. However, Araneta adds, "There are also some industry segments and functional IT areas that will see robust IT spending growth. In general, we see healthy IT spending from banks in large, geographically dispersed markets, as well as mid-sized banks that are attempting to be tier 1 players." Other areas of high spending growth include phased investments in new core banking systems, and their follow-on projects in channels, business process management, and product management systems. Araneta highlights plans of banks to further invest in risk management and compliance, representing a second round of spending on critical systems and process standardization activities that allow banks to cope with adverse economic conditions. INSURANCE Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses. Trends: Asia experienced an unprecedented year in terms of natural catastrophe events in 2011, and the impacts are being felt in pockets with increasing rates and capacity issues. But it is nearly impossible to call an absolute end to the soft market that Asia has enjoyed for so many years. At best, rates are stabilising, with some areas such as natural catastrophe insurance increasing significantly while others are still enjoying capacity and competition. This fragmented and choppy market is likely to continue throughout the first six months of 2012, as underwriters take different approaches to their portfolio. With this in mind, it s important for businesses to work with their risk advisors to adopt a best in front approach with underwriters and provide as much information as possible to get the most comprehensive terms and competitive rates. MEDIA AND ENTERTAINMENT Media & Entertainment (M&E) sector is a sunrise industry. The momentum of spends on leisure and entertainment is higher than the economic growth, owing to favourable demographics and rising disposable incomes. With new media, or rather digital media, making a rage, the Indian M&E industry is standing at a new inflection point. Rise in digital content consumption, launch of innovative content delivery platforms, higher penetration in tier II and tier III cities, enhancing reach of regional media and regulatory shifts are major factors that are driving the growth of the sector. The entire M&E landscape is witnessing a shift; thanks to cable digitisation, wireless broadband penetration, increasing direct-to-home (DTH) penetration, digitisation of film distribution and growing internet usage. Trends: Until recently, there was a clear recipe for success in media and entertainment: multiple revenue streams, scarce distribution outlets, and distinct exploitation windows. To thrive in today s (and tomorrow s) environment, however, companies need to drive both innovation and efficiency, embracing new approaches to content development, distribution, 45 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

47 operations, technology, and monetization. In short, they need to adapt their strategies, capabilities, and operating models to address several key imperatives: Cost structures for content need to be significantly reduced. Consumer time and spending are shifting to digital, but media companies ability to monetize consumer engagement in the digital arena is well below what it is in analog media. As a result, media companies need to fundamentally reduce the cost of their content. Key levers include introducing more variable cost by maintaining fewer staff editors and content producers and instead managing networks of external contributors; developing greater scale and consistency in approaches to content production and technology; and attacking fixed costs through centralization, outsourcing, off shoring, and portfolio rationalization. Advertisers are demanding more accountability, relevance and interactivity. Spending on traditional paid media is coming under growing pressure as advertisers devote more resources to digital, database marketing, event marketing, place-based media and even loyalty programs. This shift requires media companies to increase their focus on innovation and ROI as they craft advertising solutions. It is also creating opportunities to build new businesses around lead generation, custom media, and marketing services. Technology shifts are affecting the value of content and distribution. Consumers are no longer satisfied just to enjoy print, video, or other forms of entertainment and information passively. In today s search-driven world, consumers are actively looking for control, community, and interactivity. Ad-supported media companies, therefore, need to develop a robust digital toolkit to build premium inventory, whether in targeted and tagged site areas, interest-specific e-newsletters, or registration-required applications. The goal for media companies: move from creating impressions to building relationships with consumers, both directly and on behalf of marketers. New strategies combining content and applications can offer significant value to media and entertainment companies across both traditional and digital media. For example, companies can use relationship marketing strategies to drive consumers to stores, theaters, and other screens as well as to activate other desirable actions. Online video, social media and mobile media are expanding rapidly. Media and entertainment companies need to ensure they participate actively in the growth platforms of the future. Making this happen will require mastering a new set of skills and strategies involving portfolio and business development, software, and technology. Creating a successful culture of innovation will also be a key element of the path forward. For many media companies, this will require greater openness in innovation processes, and the need to embrace more systematic test and learn approaches trying many things, but scaling up only those that work. Positions in emerging markets have become key to long-term growth. Global media and entertainment industry growth will be fed primarily from the emerging markets of Latin America, Asia, Russia and the Middle East. Across these regions, the multimedia landscape is developing rapidly; and, in many cases, traditional barriers associated with distribution and regulation are no longer those significant. Companies looking for growth need to be evaluating partnerships and acquisitions that result in a greater exposure to these geographies. TELECOMMUNICATIONS Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages such as coded drumbeats, lung-blown horns, and loud whistles. In modern times, telecommunications involves the use of electrical devices such as the telegraph, telephone, and teleprinter, as well as the use of radio and microwave communications, as well as fiber optics and their associated electronics, plus the use of the orbiting satellites and the Internet. A revolution in wireless telecommunications began in the 1900s (decade) with pioneering developments in wireless radio communications by Nikola Tesla and Guglielmo Marconi. Marconi won the Nobel Prize in Physics in 1909 for his efforts. Other highly notable pioneering inventors and developers in the field of electrical and electronic telecommunications include Charles Wheatstone and Samuel Morse (Telegraph), Alexander Graham Bell (Telephone), Edwin Armstrong, and Lee de Forest (Radio), as well as John Logie Baird and Philo Farnsworth (Television). Trends: In 2011, the telecom industry finally managed to come to terms with two major global shocks that have threatened it lately. The first, of course, was the global economic downturn that continues to adversely affect the performance of operators in markets around the world. Growth naturally slowed, abetted by constrained credit markets, and thus accelerated the commoditization of traditional telecom services, while reducing the valuations of operators large and small. As a result, operators focused on cutting costs and increasing operational efficiency to protect profitability. The increase in caution has also led to a significant slowdown in mergers and acquisitions. 46 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

48 The second shock has been the disruption caused by mass digitization. Customers both consumers and businesses are becoming more demanding, expecting always-on service everywhere, and forcing operators to boost network capacity and connectivity. All manner of industries are also becoming increasingly digitized and demanding a variety of new services like mobile payment platforms and cloud computing. The market for mobile applications continues to grow rapidly, creating yet another disruptive force that operators must learn to benefit from. At the same time, the integrated technology value chains on which operators have long depended, including critical applications and service platforms, are growing increasingly modular and open. As a result, the telecom ecosystem is becoming much more competitive, as new entrants from adjacent industries look to exploit both new customer expectations and technological openness.. Yet despite or perhaps because of all these challenges, much of the telecom industry has finally reached a consensus on how to move forward to transform itself. That transformation will take the form of a fundamental shift among operators from the integrated business models that dominated the industry for most of the past century to four distinct, though by no means mutually exclusive, open business models designed to take full advantage of the opportunities now opening up: the reliable, cost-efficient network guarantor; the flexible, integrated business enabler; the innovative, customer-facing experience creator; and the wide-ranging, synergistic global multimarket.the effort to create and perfect these models will also require an ongoing process of cost restructuring to align costs more tightly with business goals. Nascent versions of each of the four models are already beginning to bring benefits. Early implementers of the network guarantor model are benefiting from the accelerated deployment of broadband networks and better monetizing their network investments. Business enablers are generating revenues by offering services such as virtual networks, machine-tomachine and cloud computing platforms, and platforms for specific verticals, including financial services, healthcare, and retail. In turn, new experience creators are capitalizing on such services to provide attractive user experiences, while generating revenues by selling applications and content. And several large operators are working hard to build the scale and synergies needed by true global multimarketers. But much work remains to be done. In the coming year, operators must begin making the strategic choices necessary to determine their future direction, deciding which of the four models or combination of models works for them. This decision should depend both on whether they can effectively leverage the capabilities they already possess and on careful consideration of their ability to build new ones. REAL ESTATE AND INFRASTRUCTURE Real estate is "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing. Trends: In the last decade, the Asian economy is characterized by continuous economic growth. This has fueled the strong and steady demand underlying the Asian commercial property market. Case in point: a considerable portion of China s excess savings in its outperforming economy finds its way into the property market of the region. However, in view of the ongoing European crisis and the slow recovery of the United States, property investors and developers proceeded with an outlook of cautious optimism at the beginning of The cautious outlook only befits the current uncertain global economic climate. As a region which heavily relies on export, Asia is hit by the slowdown of export demand from Europe. From 20% y-o-y in June 2011, regional export growth declined to a mere 4.5% y-o-y in March Consequently, real GDP growth in the region fell to 5.7% y-o-y in 1Q 2012 compared to 6.1% in 4Q Now with the property market data in from 1Q 2012, slower GDP growth is reflected in the general state of the region s property market. Office Market Demand for office space has slowed down in 1Q 2012 and rental growth has remained generally flat across the region due to the following reasons: (1) corporate occupiers have become cautious towards expansion and are now focused on cost reduction, either through consolidation or relocation, (2) contraction in the financial sector, (3) slower additions to supply. On the positive side, decentralized districts benefit from the present trend of relocation among corporate occupiers. This leads to the development of more emerging urban districts, which can only expand the property market in the future. In Hong Kong and Singapore, ongoing contraction in the financial sector occupiers keeps the rentals down, with leasing activity dominated by relocation. Although multinational corporations in China withhold expansion plans, steady demand 47 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

49 from domestic firms as well as lack of new supply supports the rental growth that Beijing enjoys. Flat performance of the office market is registered across the region in Tokyo, Seoul, Taipei, Kuala Lumpur, Ho Chi Minh City, and Mumbai due to downward pressure on rentals and weak demand. On the other hand, steady demand from domestic and international firms drove the rent increase in Manila and strong rental growth continues in Beijing and Jakarta CBDs. Overall, from 0.9% in the previous quarter, aggregate rental growth across the region fell to 0.2% q-o-q. Residential Market The same cautious outlook weighs on the sentiment of investors and buyers, contributing to the sluggish sales and price declines in the luxury residential market for 1Q Due to the current global economy, multinational companies remain cost-conscious and tighten their budgets for expatriate housing allowance. Buying activity is even further limited by the tight property lending policies of the central banks across the region. Furthermore, leasing demand for luxury homes is expected to weaken further as the completion of the new supply will keep the rentals down. Hong Kong registers the largest drop in rent, along with rent declines in Singapore and Kuala Lumpur while Beijing, Shanghai, Bangkok, and Ho Chi Minh City recorded marginal growth. In the developing South East Asian market, prices and rentals in Manila s high end residential market are steady while Jakarta continues to be the region s brightest spot as it continues to deliver the strongest sales and price performance in the region. Although prime retail rental growth weakened over the last few quarters, the retail sector is still generally performing well. Retail sales growth moderated over 2012 as consumers became more careful in their spending habits. Across the region, retailers continue to expand in core markets, though the rate of expansion has slowed down. Despite the weak property market performance for the first half of the year, industry experts remain optimistic. This can be attributed to: (1) the region s rising income levels, (2) growing middle class who wish to buy properties, (3) continuous urbanization, and (4) the expanding outsourcing & off-shoring industry in the region all of which serve to drive the steady demand behind Asia s property market. Moreover, although the region s economic growth slowed down in step to the dominant global economic climate, it still outperforms the rest of the world. Declines in rental and prices are viewed as temporary and property market activity is expected to pick up next year, reinforcing the perspective that 2012 is one more step towards the strong growth of the real estate markets of Asia. EDUCATION AND COUNSELLING Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts. In its narrow, technical sense, education is the formal process by which society deliberately transmits its accumulated knowledge, skills, customs and values from one generation to another, e.g., instruction in schools. Education is merely the delivery of knowledge, skills and information from teachers to students, is inadequate to capture what is really important about being and becoming educated. Being an educated person means you have access to optimal states of mind regardless of the situation you are in. You are able to perceive accurately, think clearly and act effectively to achieve self-selected goals and aspirations. Education, therefore, is more properly defined as a process of cognitive cartography, mapping your experiences and finding a variety of reliable routes to optimal states of mind when you find yourself in non-optimal states. A right to education has been created and recognized by some jurisdictions: Since 1952, Article 2 of the first Protocol to the European Convention on Human Rights obliges all signatory parties to guarantee the right to education. At the global level, the United Nations' International Covenant on Economic, Social and Cultural Rights of 1966 guarantees this right under its Article. Counseling psychology is a psychological specialty that encompasses research and applied work in several broad domains: counseling process and outcome; supervision and training; career development and counseling; and prevention and health. Some unifying themes among counseling psychologists include a focus on assets and strengths, person environment interactions, educational and career development, brief interactions, and a focus on intact personalities. Counseling is a process that enables a person to sort out issues and reach decisions affecting their life. Often counseling is sought out at times of change or crisis, it need not be so, however, as counseling can also help us at any time of our life. Counseling involves talking with a person in a way that helps that person solve a problem or helps to create conditions that will cause the person to understand and/or improve his behaviour, character, values or life circumstances. 48 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

50 Counseling is often performed face-to-face in confidential sessions between the counselor and client(s). However, counseling can also be undertaken by telephone, in writing and, in these days of the Internet, by or video conferencing. Counseling can and may take many different formats to bring a person to a better understanding of them self and others. It can therefore be seen that counseling can be of benefit to a person experiencing problems in finding, forming, and maintaining relationships. Many people seeking counseling have problems or past experiences in their life, which they find difficult to overcome. These experiences and problems prevent the person moving forward in their life. Counseling helps the person face the effects of past experiences and seek ways to overcome them. KEY AREAS OF CONCERN Developing Asia s growth is projected to expand by 6.1% in 2012 and by 6.7% in 2013, down significantly from 7.2% in 2011; The PRC is forecast to grow by 7.7% this year and by 8.1% in 2013, considerably more slowly than the robust 9.3% growth of 2011; India will see GDP growth slow to 5.6% in 2012 and bounce back to 6.7% in 2013; Weakening growth momentum will temper price pressures, pushing inflation in the region down from 5.9% in 2011 to 4.2% in both 2012 and 2013; The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the United States (US) pose major risks to the outlook; Developing Asia has no widespread, urgent need at the moment for countercyclical policy intervention; Countries will have to rely more on enhancing productivity and efficiency to secure future prosperity; Developing Asia s service sector is to play a growing role as economies that graduated from agriculture to industry evolve further into service economies; A key challenge is to raise service sector dynamism by moving toward high-value modern services, such as information and communication technology, finance, and professional business services; A vibrant service sector would have broad economic benefits, including the creation of jobs for women in particular, thus supporting inclusive growth; Lack of human capital, inadequate infrastructure and restrictive regulations are major bottlenecks for developing a modern service sector 49 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

51 CHAPTER 3: HR PLANNING AND DEVELOPMENT FOR SERVICE INDUSTRY Strategic Human Resources Planning and Development: INTRODUCTION The economy of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity. The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140 th by nominal GDP and 127 th by GDP in 2012, according to the IMF. The independence-era Indian economy (from 1947 to 1991) was based on a mixed economy combining features of capitalism and socialism, resulting in an inward-looking, interventionist policies and import-substituting economy that failed to take advantage of the post-war expansion of trade. This model contributed to widespread inefficiencies and corruption, and the failings of this system were due largely to its poor implementation. In 1991, India adopted liberal and free-market oriented principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V. Narasimha Rao the then Prime Minister who eliminated License Raj a pre- and post-british Era mechanism of strict government control on setting up new industry. Following these strong economic reforms, and a strong focus on developing national infrastructure such as the Golden Quadrilateral project by Atal Bihari Vajpayee, the then Prime Minister, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people. India recorded the highest growth rates in the mid-2000s, and is one of the fastest-growing economies in the world. India has recorded a growth of over 200 times in per capita income in a period from 1947 (251 rupees 7 annas 4 paise) to The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labour force, growth in the manufacturing sector due to rising education levels and engineering skills and considerable foreign investments. India is the nineteenth largest exporter and tenth largest importer in the world. Economic growth rate stood at around 6.5% for the fiscal years. India is 13th in services output. The services sector provides employment to 23% of the work force and is growing quickly, with a growth rate of 7.5% in , up from 4.5% in It has the largest share in the GDP, accounting for 55% in 2011, up from 15% in Information technology and business process outsourcing are among the fastest growing sectors, having a cumulative growth rate of revenue 33.6% between and The growth in the IT sector is attributed to increased specialisation, and an availability of a large pool of low cost, highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of the Indian IT industry in the country's GDP increased from 4.8% in to 7% in In 2010, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. The ongoing process of systematic planning to achieve optimum use of an organization's most valuable asset - its human resources. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labor demand, analyzing present labor supply, and balancing projected labor demand and supply. After an extended period of neglect because of its focus on the Goods Sector of the economy, the attention of the academic community is making a recognizable shift to analysis of the Services Sector, which has unique and definable characteristics. It is the largest segment of the United States economy, representing more than 80% of both the Gross Domestic Product (GDP) and employment. For other industrialized nations, the percentages are somewhat lower, but they are also approaching 80%. Service is also the fastest growing sector. It is important to note that the Services Sector comprises more than eighty percent of domestic employment and the Goods Sector represents the remaining twenty percent, with manufacturing being the largest component of Goods at approximately thirteen percent of the total domestic employment. Data Surface Mining (DSM) in conducting their studies, which relate to identifying similarities and differences between the Goods Sector and 50 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

52 the Services Sector. In order to position the organization for success, Departments have been engaged in workforce planning. Corporately, three key directions have been identified to assist government in managing the workforce changes. They include: 1. Building Our Potential 2. Strengthening Our Competitiveness 3. Renewing Our Workplace The purpose of this exercise was to ensure that our workforce and strategic objectives were aligned to guarantee the delivery of quality programs and services to the public, and that the planning would assist in positioning the public service for the future. Through a collaborative process, each department developed their own workforce plan, which outlined their critical strategic issues for the next 3 5 years as well as proposed strategies to address those issues. They can also help ensure that departments have what they need to get the job done, and that there is efficient matching of skills and competencies to departmental tasks, requirements and outcomes. To better compete in the global market, government will need to create and implement corporate strategies to promote itself as a preferred employer investing in progressive HR policies and programs with the goal of building a high-performing organization of engaged people, and fostering and creating a work environment where people want to work, not where they have to work. In Service sector HR managers have to manage all the challenges that they would face from recruiting employees, to training them, and then developing strategies for retaining them and building up an effective career management system for them. The management has to recognize the important role of Human Resource Department in order to successfully steer organizations towards profitability. It is necessary for the management to invest considerable time and amount, to learn the changing scenario of the HR department in the 21st century. In order to survive the competition and be in the race, HR department should consciously update itself with the transformation in HR and be aware of the HR issues cropping up. With high attrition rates, poaching strategies of competitors, there is a huge roar. HUMAN RESOURCE PLANNING FOR SERVICE INDUSTRY Retention and attraction in today s changing labour market requires government to look at the key drivers that are important to employers and potential employees. Examples of these include offering employees: Diversified and Challenging Work An Attractive Compensation Package (not just salary) Advancement Opportunities Access to Continuous Learning Opportunities for Personal and Professional Growth An Inclusive Workplace Work-Life Balance Effective alignment of human resources / workforce planning and departmental goals is critical in achieving both government priorities, departmental goals and objectives, as well as sustaining business continuity. To determine current and future human resource (HR) needs, a five step approach can be employed. Such steps include the following: AN INTEGRATED PLANNING PROCESS STEP 1: Determine your Business Goals STEP 2: Scan the Environment STEP 3: Conduct a Gap Analysis STEP 4: Set HR Priorities to Help Achieve Departmental Goals STEP 5: Measure, Monitor and Report on Progress Step 1 Determine Your Business Goals An understanding of government and ongoing departmental business and HR priorities, emerging changes and trends, and the impact of legislative reforms are needed to determine business goals. This step should also consider whether or not strategic partnerships (to facilitate business and HR planning / workforce planning 51 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

53 efforts) should be established and ensure that accountability requirements are met. Government priorities are articulated in documents such as the Speech from the Throne, Budget Speeches and other applicable government documents, including departmental Strategic and Business Plans. This information is likely already available in existing departmental strategic business plans. Step 2 Scan the Environment Workforce Analysis Once business goals are understood, an understanding of the workforce, as well as planning for projected shortages and surpluses in specific occupations and skill sets, will be required. Key demographic employment data and characteristics (e.g. sex, average age, occupational groups, skills/competency profiles, etc.), as well as internal workforce trends (e.g. retirement eligibility, vacancy rates, turnover, etc.), are important factors to consider when conducting a comprehensive workforce analysis. This information is likely already available in existing departmental workforce plans, though it may require updating. Internal Scan The internal scan is primarily focused on identifying the factors within the department that might affect the HR capacity to meet departmental goals. Each department will be able to identify internal opportunities and challenges. It will be important for the organization to build on its strengths and to minimize challenges and risks. External Scan The external scan focuses on identifying those external factors that may affect workforce capacity, given known operational needs and emerging issues. An external scan should consider the opportunities that exist which can be advantageous to the department. It will also enable the department to identify risks or potential risks in the external environment so that the department can identify specific strategies to manage those risks. Step 3 Conduct a Gap Analysis Current and future HR requirements need to be projected based on an analysis of departmental goals and priorities, and environmental scanning. Questions that are helpful in determining HR needs, identifying gaps, and projecting future HR requirements include the following: Do you foresee a skill shortage in a specific occupational group? Will changes in program delivery require the acquisition of new skills? Do you have succession plans for critical positions? Have you conducted a risk analysis of the elements of the scan critical to the success of your organization? Step 4 Set HR Priorities to Help Achieve Departmental Goals Subsequent to an examination of the gap analysis outcomes, HR priorities should be determined and the strategies needed to achieve desired outcomes must be identified by departments. Strategies might address the following issues: Step 5 Monitor, Evaluate, and Report on Progress Monitoring, evaluating, and reporting on HR performance outcomes is key to assessing progress in target areas, organizational learning and improvement, and to determining future priorities. Consider the following questions: Have clear and measurable HR goals been identified? Are the HR performance measures aligned with other existing accountability measures? Are systems in place to track performance indicators and analyze any cost benefit? Do results from performance indicators inform priority setting for the next fiscal year? What is the degree of success that has been achieved? TYPES OF HR PLANS Human resource planning uses several initiatives to satisfy future workforce demands. Recruiting describes how the organization plans to attract quality workers and add them to its employee base. Job fairs, seminars, fundraisers and other social events are ways that employers advertise and promote themselves to potential job 52 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

54 candidates. Existing employee testimonies, including word of mouth and holding company activities that promote a fun workplace, can attract job candidates. Training and development describes how the organization plans to maintain and improve its workforce. New workers may be assimilated into the culture through orientations and specific training classes designed to educate and develop. Existing employees can be introduced to retraining programs that ensure their skills are up to date. Employee retention programs are designed to keep quality employees from leaving the organization. They focus on employee compensation, benefits, rewards, a work-life balance, advancement or growth and recognition. By planning ways to keep its future workforce from leaving, the organization has less turnover expense (hiring and training costs) and does not have any related productivity losses. SIGNIFICANCE The strategic objectives of an organization can hardly be realized without human resource planning and development. This is because those objectives typically require an adjustment to the current workforce. If an organization decides to increase its productivity by 30 percent next year, it may need to grow its workforce to support that goal. A company wanting to expand its service offering into new areas will need to hire employees with the appropriate training and background. BENEFITS To reduce future employee jeopardy, human resource planning and development focuses on safety programs and protocols. These measures help to ensure worker safety and can reduce job-related costs due to absenteeism, worker's compensation claims and lawsuits. They can also prevent losses in productivity. Safety programs should focus on workplace hazards, safety practices and procedures, safety equipment like hard hats and gloves. FOUR KEYS TO A WELL-DESIGNED PLAN Instead of being solely the results produced from the execution of the plan, the real power lies in the planning process itself. To be most effective, the planning process for an HR team must be broadly inclusive of internal customers and stakeholders. A well-designed inclusive planning process can accomplish several things. Alignment- This is the commonly understood value of strategic planning. The plan articulates how the work HR does aligns to support the organization s strategy and goals. The plan also ensures that the people and functions within human resources are aligned with each other towards achieving the same objectives. Buy-in- One of the struggles of HR teams is that many of our customers think they could do our jobs better than we do. They have a lot of opinions about HR, some good and some ill-informed. By executing a broad, inclusive process of strategic planning, you can solicit your customer s opinions in the process so that they feel like you ve heard their ideas and considered them in creating the plan. If they feel included, they are far more likely to be supportive. Education- Let s face it, most of our customers don t really understand what we do in HR. And, if we are honest, we ve probably worked to keep it that way in order to preserve the value of our expertise. But to enhance our credibility organizationally, we need to invite the business into our work instead of keeping them out. An inclusive planning process that involves our customers will help them get better educated about what we do and how we do it. They will, without question, come away with a better appreciation for how hard our job is in HR. Control- We are not talking about control over others, but rather a control of how HR should be evaluated and understood. One of the principles I live by is that we teach people how to treat us. Put another way, if you aren t being treated the way you think you should be, it s because you are allowing it to happen. When we don t manage the organization s expectations of human resources, we leave our destiny in other s hands. We know they don t really understand how we add value, so why would we allow them to determine how we should be evaluated? A well-designed strategic plan enhances your control of how others will interpret your results. 53 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

55 If you currently have a strategic planning process within HR, but you aren t seeing these results, it s likely because you aren t making it inclusive enough of the business. Being inclusive takes time so it can be a tempting step to minimize or skip. There are many correct ways to do strategic planning and you will have to choose which approach is best for your organization. Regardless of the specific approach you choose, to achieve the results outlined above, your process must include the following components. Extensive input from your internal customers on the current state of HR. This process can be painful because if done correctly, you will get some feedback that isn t flattering or easy to hear. How you gather this information can range from surveys to focus groups to one-on-one discussion. Depending on your organization, you may need an external consultant to assist with this part of the process in order to get honest feedback. Feedback from your HR staff on the strengths and weaknesses of the team. Again, this process can be handled in a variety of ways. The critical element is to ensure that the HR staff has input and feels heard, particularly those who work on the front lines with employees every day. Strategic information from each business unit or department/division about their future plans, and the major challenges they anticipate for their business, both in general and regarding their talent. It s important to spend time on in-person discussions in addition to gaining copies of written strategic plans. The conversations are another way to make them feel included in the process and to ensure that your plan reflects the critical needs of their business. Broad communication of the plan back to those who participated in the processand other key stakeholders. Depending on the audience, the amount of detail to share will vary, but it s critical that once the plan is completed, you take the time to sell it back to the organization. In the communication, you must remind them of how the plan reflects their input and is designed to support their success. This process is time consuming to complete and it can feel tedious at times, but it might also be the best time you ever invest in your HR team. When executed correctly, an inclusive strategic planning process can take your HR team from being perceived as a necessary evil to emerging as a strategic leader within the organization. HUMAN RESOURCES DEVELOPMENT (HRD) FOR SERVICE INDUSTRY As a theory is a framework for the expansion of human capital within an organization through the development of both the organization and the individual to achieve performance improvement, the capacities of individuals depended on their access to education. The same statement applies to organizations themselves, but it requires a much broader field to cover both areas. Human Resource Development is the integrated use of training, organization, and career development efforts to improve individual, group and organizational effectiveness. HRD develops the key competencies that enable individuals in organizations to perform current and future jobs through planned learning activities. Groups within organizations use HRD to initiate and manage change. Also, HRD ensures a match between individual and organizational needs. Following Diagram Shows all the possible functions of an HR manager in respect to his development function. 54 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

56 Unlike goods manufactured in the agricultural and industrial sectors, a service is intangible and perishable in the sense that it cannot be stored for future consumption. This implies that the service organisations are responsible not only for producing products but also for immediately transmitting, i.e., providing these to the consumer. In other words, in the service sector the production and delivery of goods are carried out simultaneously. The consumer, therefore, is an integral part of the whole service delivery system. The services of a doctor or teacher involve the patient or student as a consumer. The services of a tourist guide will require a tourist, the consumer. Unlike a product there is no lead time in the production and consumption of services. The customer does not possess any tangible product while buying the services and value received may also vary from customer to customer. Unlike a bad product a bad service cannot be replaced at best one can be sensitive to customer dissatisfaction and recover the situation with such remarkably good service that the customer may both forgive and forget the bad service just received. In fact all these characteristics of the service industry have important implications for the kind of human resources and human competencies required for the service sector. When compared with the secondary or industrial sector, the service sector may be less labour intensive but probably requires more human related skills and competencies. While technology has advanced considerably, the technical and operational skills which characterised earlier agrarian or industrial societies, have given way to an emphasis on human and managerial competencies at the macroeconomic level as well as at the organisational level. The service sector organisations also play a very important social role. By extending benefits to people of all social and economic segments, provide opportunities for development and for reduction of socio-economic disparities. They enable the weaker sections have access to the benefits of modernisation. By providing common service to all sectors they reduce social and psychological distances. For instances, government services, such as, administration and judicial services are available to all without discrimination. The professionalisation of the service industry has made services, such as, hospital, travel agent, hotel, legal aid, rehabilitation, etc., available to all those who can pay the prescribed fee regardless of social background. Thus, as M.B. Athreya points out, the services themselves have an HRD effect first by developing individuals and deprived groups, and secondly by gradually changing societal culture towards a more egalitarian, democratic direction. 55 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

57 HRD has aspects which are universal to all organisations as well as some which are specific to the nature of the service industry. As far as the universal aspects are concerned we can say that HRD is relevant to all sectors as it is at the base of all development. Other resources, like physical and financial resources, can only be activated through the agency of human resources. Whatever you have read in this course till now must have made it clear that HRD aims at developing the individual, matching the individual to roles, both by developing individual and the role, and catalysing individual and organisational self-renewal. A generalised model of HRD will include the following sub-systems: role analysis, selection and placement, transfer and rotation, reward and punishment, i.e., disciplinary action, performance and potential appraisal, feedback and counselling, training and development, career planning, succession planning, participative devices, and HRD data bank. Of these systems, some are essential to all organisations in any sector: selection and placement, transfer, rotation, and reward and punishment. At least these sub-systems need to be designed well. If one wants to go beyond a status-quo bureaucracy, at which stage many service institutions get stuck up, performance appraisal, potential appraisal and training and development are particularly relevant. If high levels of performance is a goal, then the relevant additional sub-systems are feedback and counselling, and of participative devices. Finally, if one is concerned about the long-term vitality of any institution including a service institution, the remaining subsystems become essential, namely role analysis, career planning, succession planning, and development of an HRD database. We have mentioned earlier customer care and service quality as two unique aspects. These along with some other special features call for particular emphasis in the design and implementation of HRD systems. These are: i) Intangibility of product: Service is the provision of value to a customer, without a physical product. This could create lack of clarity about the tasks and erosion of self-confidence. So HRD has to create appreciation of client needs, and pride in the potency of the service to meet those needs. ii) High public exposure: The service industry is much more exposed to its clientele. Even if the industry does not proactively promote its service, the clients may take the initiative and beat at its doors. The staff needs relationship skills and tolerance of customer reactions. In the case of subsidised on free services, some customers may be arrogant in their demands and misuse the service, while some others may be less literate, gullible and timid. iii) Size constraints: To be effective, the service industry should not be perceived as a huge, slow, monolith, in the face of which the customer is anonymous and insignificant. Conceptualisation of roles is especially important. The roles at the environment/customer interference need to be so designed, as to enhance service. Examples are the bank teller and the single window clearance concept used by some organisations recently or the concept of Front Office staff and Guest Relation Executives (GREs) in the hotels. iv) Back-room technology: At the customer end, a service has to be simple to understand. For example, air travel should be made easy, but behind it may be complex aeronautics and computerised, real-time reservation systems. HRD has to ensure that those at the delivery end of a service industry understand the power and limitations of this back-up technology, while at the same time the technicians understand customer needs, abilities and limitations. v) Specialised knowledge: The level of general and specialised education tends to be relatively high in a service industry. Infact, a service industry like a consultancy, has to be intellectually a few steps ahead of its clients to be of real value to them. So, a research and learning orientation is needed. The service industry tends to have a preponderance of white collar workers and executive manpower. Their motivation is more complex. Besides monetary rewards, they, many a times, also look for ego satisfaction, quality of work and also glamour and fame. vi) Propensity for disintegration: Service industry seems to have a higher tendency to disintegrate. Depending upon personal ambitions, bruised egos, inequity, etc., rebel groups break away from the mother organisation and form new ones. For example, many smaller tour companies are opening up from a mother tour organisation leading to a dent in the mother organisation s clientele. This may be partly due to low capital cost, low barrier to entry and the preference of the customer for specific resource persons. Therefore, HRD needs to provide for more participation in planning and control of the projects, as well as sharing of rewards, whether psychic satisfaction, fame, visibility; profits or upward mobility. 56 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

58 Human Resource Planning and Development in Public Sector Banks Planning and Human Resources Development assumes great significance in a labour intensive industry, like, banking. Public sector banks in our country have shown a good deal of interest in designing and using HRD systems and mechanisms for improving effectiveness of their employees. In public sector banks, the focus of Human Resources Development (HRD) effort is to develop versatility and ensure flowering of potential of the individuals through innovations. In realisation of these objectives, these banks introduced Quality Circles for team building and work life improvement, Circle Management and Branch Management Boards as a training ground for developing analytical and decision-making skills for all levels of personnel, involvement of cross section of people in decision-making process for wider participation in policy formulation, Mediation Room for creative thinking and organisational renewal. Public sector banks have given continued emphasis to capability development through study circles, brainstorming sessions purposeful staff meetings at their branches, effective job rotation by formal one year advance planning, encouragement to self-development through incentives and bringing out knowledge booklets, like, Counselling Techniques, HRD compendium, etc. The institution of welfare office adopted branches for all around development. The welfare offices set up by these banks at various centres attended to aspects relating to employee grievances and also assisted in focusing faster attention to customer services. Human Resource Planning and Development in LIC The Life Insurance Corporation of India (LIC) was set up in 1956 by the Government of India, on the nationalisation of life insurance business. It took over the entire life insurance business which had been transacted in India by private companies till then. The fund (assets and liabilities) and employees pertaining to this business were automatically transferred to the LIC. Since 1956, LIC alone has the authority to transact life insurance business in India, subject to special authorisations for some government schemes, which are allowed to operate outside the purview of the LIC. Apart from the Central Office, the LIC has five Zonal Offices, sixty four Divisional Offices and Branches in over eight hundred centres. In 1980, the LIC launched on a major exercise to organisational restructuring which led to major decentralisation of responsibilities to the branches. Each branch was recognised as a profit and growth centre. The number of positions in the branches as well as the level of responsibility in these positions were considerably enhanced. Microprocessors were made available to branches. The new structure provided for consultation processes and joint decision-making in planning and other operations. The new systems included data being generated about the socio-economic conditions of the area under the Branch jurisdiction for planning purposes and developing strategies for operations on the basis of such data. Consequent to the restructure of work, there was need to enhance the skills of the personnel to operate the new systems. It was recognised that the organisation to successfully adapt to the serious challenges from the complex turbulent environment, needed long-term strategies with regard to the social systems. Aware that bureaucratic procedures, narrowly defined jobs and tight supervision can wreak havoc on human motivation and that excellent performance comes when individuals are committed to using full capacities to solve problems, the need was felt to develop strategies that would meet the needs for learning, development, belongingness, variety and creativity. Human Resource Planning and Development in Health Sector All efforts in human resource development (HRD) have to culminate in ensuring the health of the individual, the family and the society. Health, family and social welfare are systematically interdependent, for, growth and development of an individual is dependent not only on his health, but the health of his family and the society. Similarly, societies and families do not develop without the healthy development of their individual members. HRD programmes ensuring health and family welfare should result in social welfare. They must provide not only social services to ensure physical health of the citizens but also to ensure their psychological development whereby they learn to appreciate their relationship with the society. i) Philosophy for HRD Programmes 57 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

59 HRD action programmes in the health sector assume that a human being is more than just a bundle of physical and psychological needs. He or she is a spiritual force. As a resource, a human being is not an end in himself or herself. Since there is a limit to physical needs, growth of the human being lies mainly in his or her psychospiritual development towards self actualisation. Development in terms of needs means unfolding. It, therefore, refers to growth from within. Development means self direction, becoming aware of one s different resources, and utilising these resources. Growth and development should generally result in the needs to share. ii) Strategy Parametres for HRD Programmes The acceptance of the concept of social welfare, discussed earlier presumes that the functions of social welfare have been well defined. In order to ensure the success of the programmes to be carried out, it will, in addition, be necessary to: (1) locate the responsibility for specifying the goals to be achieved, (2) identify the authorities who will be responsible for devising and harmonising the optimum use of resources of achieving these goals, (3) identifying agencies who will assess the feasibility of proposed programmes within the context of national development, and (4) who will evaluate the results in terms of the objectives. Human Resource Planning and Development in Tourism Sector Tourism is a sector requiring a lot of HRPD (Human Resource Planning and Development). In Unit 01, you have read about the need for human resource planning in tourism. This can give you an idea of the importance of human resource development. In India, tourism sector has both Government of India and private sector looking in the development of human resources according to the needs of the sector. Over the years Government has introduced many ambitions projects for tourism industry like introducing Visit India Year and giving Tourism the status of Industry. Efforts are on for HRP and HRD in all the constituents of the tourism industry. Examples: 1) Transport Sector Airlines : pilots, cabin crew, ground operations, front office, etc. Road Transport : drivers, supervisors, workshop mechanics Rail : customer care orientation programmes for railway personnel. Water : regional requirements for training for water cruises, etc. 2) Accommodation House Keepers, Waiters, Front Office Staff, etc. Finance, Public Relations, Marketing, etc. 3) Tour Operations Escorts, Guides, Tour Planners, etc. (on the job training and retraining) IMPACT OF HUMAN RESORCE PLANNING AND DEVELOPMENT ON EMPLOYMENT GENERATION Case Study: Power of On-Line Recruitment Like most of the progressive public sector companies, the assigned company has well developed HR systems comprising of comprehensive manpower planning, well defined roles and job descriptions, scientific recruitment procedure, precise career and succession plans, effective performance appraisals, etc. The company has a full fledged training department, which includes a management development centre at corporate office and technical training institute at its locations. As a part of social obligation and also as required under the Apprentices Act the company imparts training to engineering diploma holders, aid craftsmen in various technical and non-technical disciplines. This normally 58 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

60 results in the biennial recruitment spree of about eighty candidates. The screening is done through the process of written test, group discussion and personal interview. The recruitment process was both time-consuming and expensive. The erstwhile process was based on newspaper advertisements followed by thousands of applications which needed to be manually processed. At least attributes had to be recovered from the applications and entered by the data entry operators. All these activities required on an average four hundred man-days for data entry and its screening resulting in at least two months of application and date of the written test The fully re-engineered online recruitments developed in-house avoided all these delays. The company merely inserted a small ad indicating the online recruitment through its website. The detailed advertisement was displayed on the website. The on-line recruitment system had an In-built feature of immediately assessing the application and providing feedback to the candidate. Relevant feedback was instant provided to the candidate if he was not meeting the advertised criteria such as age percentage of marks, etc. Candidates meeting the requirement were provided promptly an on-screen Registration Slip indicating the Registration Number allotted to them which included the key data such as date of birth, address, telephone number, address, details of the demand draft; etc. The candidate was instructed to take a printout of this registration slip and send it to the company along with the demand draft. In case of candidates belonging to reserved category, they were required to send the registration slip along with a copy of their caste certificate. The response was overwhelming. The company could receive as many as 5,300 applications of which the system identified 3,700 valid applications and screened out the balance 16,000 applications considered ineligible. The analysis and toning up of the data received from the server did not take more than seven working days and the company was successful in dispatching the call letters for the written test by post as well as through the e- mail, to all the candidates within two weeks of the last date of applying online. The Benefits 1. Reduction in Clerical Work: Around one hundred and fifty bits of information was obtained from each candidate. This amounted to bits of information In aggregate of all the 5,300 candidates put together. Since each individual application had to be punched in by the data operators in traditional setting. It would have been a marathon task for them. 2. Relevant data in prescribed form: The information required from the candidates regarding their profile was obtained from them in a pre-determined format. Certain key Fields were made mandatory. Pull down options, etc., was provided wherever possible. As a result exhaustive data of all the applicants was made available In an uniform format. 3. Meaningful data: The data so obtained was very much useful in making various kinds of analysis such as state-wise/category wise/gender wise profile of the candidates. 4. Instant feedback: The candidates could get an instant feedback about the fait accompli of their application. In case the application was positively considered by the system based on a programmed logic, a registration number was provided to the candidate or else they were apprised of the reason as to why their application was not considered. 5. Multiple utility: The data served as a base for generating various voluminous reports/documents. 6. Correspondence through The short-listed candidates were intimated about the schedule of their written test through also in addition to the snail mail. This resulted in Quicker communication and made more time available to them for railway reservation etc. There were a few cases wherein the candidates could not get the call letter in time due to postal delay s but the intimation through alerted them and as a result they could make themselves available for the written Lest. 7. Feel good image: The online recruitment system reflected the progressive outlook of the company by reinforcing the positive image of the company in the minds of the prospective candidates. 59 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

61 8. More recall value and wider reach: The recruitment advertisement in the newspapers does not have a life for more than one day. On the contrary, the advertisement on the web can be made available all the time during its currency, i.e. From the day of its release till the last day of the application. However, unless certain precautionary steps are taken, any system, howsoever sophisticated it may be is likely Logo haywire and produce disastrous results. The basic premise that though computers do tend to think like humans, humans should not think mechanically like computers needs to be kept In mind all the time. From the data of online applications received from the server, It was found that there were cases wherein: Some applicants had entered their data on more than one occasion. Some impish respondents had entered junk data. Some applicants had filled up certain parts of the online form incorrectly and hence were getting rejected. The data furnished by the candidates was accepted on outright basis i.e. without any documents in order to reduce the paper work. This involved a small risk of a few candidates punching In Incorrect information in their favor for seizing the opportunity for appearing at the written test. A thorough analysis of all such cases was made and necessary corrective action was taken to ensure that only the eligible candidates were getting through in the recruitment process. This exercise provided a challenging assignment to the executives of the HR and EDP departments. The successful Implementation of this work boosted their confidence and provided them a lot of intrinsic satisfaction. Case Study: 360-Degree Feedback On The Internet Performance appraisal systems serve many purposes such as providing formal feedback to employees on how they stack up with respect to the organization s performance standards serving as Input for compensation decisions identifying areas in which future development Is needed reinforcing good performance providing input for promotional decisions and establishing the documentation needed to justify termination of employment Nonetheless while performance appraisal is one of the fundamental activities in human resources it has always been a lightning rod for criticism and has recently come under renewed attack. Sonic criticisms of traditional performance appraisal systems, in which supervisors appraise subordinates, are that they frequently do not provide good assessments of managers. More specifically traditional performance appraisal systems often do not provide accurate evaluations of opportunistic managers who take advantage of their own subordinates in order to enhance their superiors perceptions of their own performance. For example such managers may not give credit where credit is due such as to employees lo may have created an innovative process that helped improve the in its productivity instead they may attribute improved performance to their managerial skills and take the credit or themselves. With this background in mind, there is much to be learned from the experiences of the Otis Elevator Company. The company had concerns that its old paper- based performance appraisal system was too slow and cumbersome. There were also concerns about whether the raters could be assured of the confidentiality of their ratings. Because of these problems the company wanted a better system for appraising and developing the performance of its engineering managers. Specifically the company was interested in enhancing these managers' project management and project team leadership skills. The engineering managers needed substantial improvement In their skills, and the company wanted a performance appraisal system that would provide feedback from the managers subordinates peers and customers as well as their direct superiors. Given these concern it is not surprising that Otis Elevator decided to develop a 360 degree feedback system With 360 degree feedback systems superiors peers and subordinates evaluate managers The innovative aspect of the company's approach top the 360-degree system is that the company decided to base the system on the Internet and its own intranet. An independent contractor E- Group developed and handles the collation and analysis of the feedback information. 60 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

62 E-Group chose a 75-item survey called LEAPS which measures seven dimensions of leadership for the 360 degree Instrument. The instrument was loaded on a web site so that all raters can pull up the Information and complete the appraisal in approximately 20 minutes. After completing the appraisal they simply submit the results via- to E-Group to process. Because the system is encrypted the company is able to provide greater confidentiality and anonymity for the raters than with the previous paper-and-pencil system. In addition the LEAPS Items, the company included a fairly large set of other Items to assess managers technical competency and their contributions to the business E-Group was able to province appraisal profiles for the managers within three days after the last of evaluators e mailed their Input for the manager In addition the profile of actual ratings for each manager from E Group also includes an ideal leadership profile developed by Otis executives By comparison of his or her actual ratings with the ideal profile managers can identity areas for future development Otis Elevator chose to use the system only for developmental purposes although recently it began to consider other purposes for the system. HUMAN RESOURCE PLANNING AND DEVELOPMENT IN NORTH EAST INDIA The global recession only partially succeeded in slowing the Indian economy thanks to the robust growth in services at nearly 10 per cent in and 9.4 per cent this fiscal, says the latest Economic Survey. This apart, the northeastern states have powered the service sector growth, it adds. The survey says that the service sector has continued to remain the driving force for the Indian economy with growth higher by 10 basis points this fiscal over the previous year. "The industry sector contributes nearly 26 percent to India's gross domestic product (GDP). However, maintaining the growth momentum, the service sector recorded expected growth rate to bottom out the industrial slow down across the globe," the survey says."the service sector along with the agricultural sector, placed India in the top fastest growing economies of the world despite the Eurozone crisis and North American economic instabilities." The survey clearly says the economy has successfully navigated the turbulent years of recent global economic crisis because of the vitality of the service sector and its prominent role in India's external economic interactions. The survey says the share of services in India's GDP has increased from 33.5 per cent in to 55.1 per cent in and to 56.3 per cent in If construction is included, the share increased to 64.4 per cent in Already, the North East region has suffered for want of skilled manpower for efficient use of its vast natural resources. With globalization, knowledge is rapidly supplanting physical resources as the principal source of wealth. Ignoring the benefits of human resource development in an era of globalization will not only be unjust and undemocratic but it will also reinforce and widen existing inequalities between NER and the rest of the country. All the Employment Exchanges combined in the region show an estimated 3 million unemployed registered in various categories. This number could be double, i.e. as much as 6 million since not all unemployed get their names registered with the Employment Exchanges. These Exchanges unfortunately, fulfill just 5% of the demand and that too involves many hurdles to be crossed by the aspirants. The unemployment problem has further reached frustration level in extreme cases because of absence of alternative employment outside the Government sector partly due to absence of industries and income generating activities. At the same time one cannot blame the Employment Exchanges because the amount of employment generated by the Government and the Public Sector now a day is substantially reduced compared to the earlier days. Due to backward economy, the region is reeling under the problem of unemployment. As the government fails to provide enough jobs a large number of youth remain outside the mainstream of national development exercise. 61 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

63 Problem of unemployment has taken a serious turn and there is apprehension of its becoming still more grim in the future if timely remedy and pragmatic decisions are not implemented. The rising level of unemployment among disgruntled educated youth, if not checked, would have serious repercussions in many facets, including their falling prey to insurgency and violence besides creating a sense of alienation among the youth. According to Mizoram Governor, AR Kohl, there is an urgent need to match economic expectations of people with positive capacity building. The vast potential of the region can only be harnessed by an extremely scientific approach towards human resource development linked with identification of potential areas of growth. Insurgency in the North East was fallout of unemployment among the youth and would take years to completely bring them back to the social mainstream. According to him job scenario in the region is not inspiring as there is little scope in Central jobs, while the State governments are mostly fund starved. Despite the creation of a dedicated Department of Development of North Eastern Region (DONER) and the North East Council (NEC) and their commitment to accelerating the pace of socio-economic development of the Region, high degree of unemployment, especially of the educated youth, still remains one of the major issues, all over the North East. Channelising the energies of youth, therefore into purposeful activities would have an extremely salutary impact on the society as it would instill pride in the youth and send positive signals to others looking for direction in the North- East Region. Creation of direct employment in the mainstream of India and simultaneously entrepreneurship ventures within North- East related to Service Industry would facilitate establishment of various business ventures for which vast potential exists in the region. HUMAN RESOURCE PLANNING AND DEVELOPMENT IN NORTH INDIA AN INTRODUCTION TO THE STATES IN NORTH INDIA PUNJAB Punjab or 'the land of five rivers' is one of India's richest and most colourful states. Punjab is one of the only two states in the country, which share a capital city (the other is Haryana). The city of Chandigarh was designed by the French architect Le Corbusier and built in Historically, Punjab lay at the crossroads of the great empires of the world. Many great religions like Budhism, Sikhism, and many schools of Sufi thought in Islam movements found world-wide, grew in the fertile plains of Punjab. Punjabi civilization is one of the oldest on earth, with its distinguished language, culture, food, attire, script, folklore, people, etc. Punjab has always been land of great saints and fighters. The present day Punjab is situated in the northwest of India. It is bordered by Pakistan on the west, the Indian states of Jammu and Kashmir on the north, Himachal Pradesh on its northeast and Haryana and Rajasthan to its south. Most of Punjab is a fertile plain; toward the southeast one finds semi-arid and desert landscape; a belt of undulating hills extends along the northeast at the foot of the Himalayas. Four rivers, the Ravi, Beas, Satluj and Ghaggar flow across the state in a southwesterly direction. HARYANA Haryana is described as the Land of Mahabharata,came into being on November 1st Haryana can be divided into two natural area sub-himalayan Terai and Indo-Gangetic plain. The plain is fertile and slopes from north to south with a height above the sea level, averaging between 700 and 900 ft. South-west of Haryana is dry, sandy and barren. CHANDIGARH Chandigarh was constituted as a Union Territory on 1st November It is bounded on the north and west by Punjab and on the east and south by Haryana. Even though the city serves as the capital of both these states, it is itself administered by the Union Government. The birth of this modern, happening city was an act of anguish and drama that took place at the time of partition of India and Pakistan. Lahore, the earlier capital of Punjab merged with Pakistan and Chandigarh was conceived to be a symbol of India s freedom. The task of designing the city fell on the shoulders of renowned French architect Edouard Le Corbusier Jeanneret who created Chandigarh as a city of Sun, Space and 62 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

64 Verdure to fulfill basic functions of working, living, and care of body and spirit. Today, the city is home to more than half a million people living in harmonious conditions that are considered to be the best in the country. UTTARANCHAL Uttaranchal became the 26th state of India on 1 November After being carved out of Uttar Pradesh. Uttaranchal is also known as Dev Bhoomi (Land of Gods and Goddesses) because of the many sacred Hindu sites situated here. Prominent among these are Badrinath, Kedarnath, Gangotri (the place where the holiest river of the Hindus originates) and Yamnotri. Religious significance apart, Uttaranchal is also a major tourist destination having some of the most visited hill stations of the country. Uttaranchal shares international borders with Nepal to the east, while the lower Himalayas separate China in the north. The states of Haryana and Himachal Pradesh border it in the west and northwest respectively. The hilly regions of Kumaon and Garhwal have been known as Uttarakhand since the time of the Puranas (ancient Hindu scriptures). HIMACHAL PRADESH Himachal Pradesh is named after the Himalayas that rise in the state. Himachal literally means "snowy mountain" (hima - 'snow', acal - 'mountain'). The beautiful terrain of this region offers many pleasant sites of lofty mountains, hills, green valleys and flowing rivers. Himachal is one of the least urbanized places in India and about 80 percent of the people are engaged in agriculture. Himachal Pradesh, located in Northern India, share its border with Jammu and Kashmir in North, Punjab in West and South West, Uttar Pradesh in South east, Tibet in east, and in the South by Haryana. JAMMU & KASHMIR The state of Jammu & Kashmir is the northern most state of India. The state is broadly divided into three main regions i.e. Arctic Gold Region, Salubrious Kashmir Valley Region and Sub-Tropical Jammu Region. Jammu & Kashmir is vested with a good mineral base, substantial water resources, and is famous world-over of its handicrafts, handloom products, tourism, horticulture produce and cottage industry. Jammu and Kashmir is known as one of the most beautiful places in the world. Indeed this land of soaring snowclad mountains, sparkling waterfalls with their beautiful shikaras (water taxis), tall chinar trees and beautiful gardens has an almost picture postcard beauty. The state is also known for its handicrafts production with its beautiful carpets, shawls and other woollen items. J&K has always maintained its position in producing excellence in tradition and culture. Besides the natural beauty and rich tradition, it has the wealth of most valuable agriculture and horticultural products. RAJASTHAN Rajasthan is one of the most fascinating regions of the world, one of the oldest civilizations with an extremely rich cultural heritage. Today, it is one of India's top performing regional economies. Rajasthan is bounded by Pakistan in the west and north-west; by the State of Punjab in the north; by Haryana in the north-east; by Uttar Pradesh in the east, by Madhya Pradesh in the south-east and Gujarat in the south-west. Its north-western and western regions, comprising 11 districts covering 61 per cent of the total area and 40 per cent population of the State, form the "Great Indian Thar Desert". The Aravali mountain ranges that run from Delhi to Gujarat cut through the State almost vertically. The Aravali ranges divide the State through south-east and north-west. The north-west region covering two-thirds of the State consists mostly of a series of sand dunes. The eastern region has large fertile tracts. STRATEGIES FOR HRPD IN NORTH INDIA Providing quality basic education, with a focus on increasing access by all groups to basic education and increasing levels of educational attainment for the population as a whole Enhancing the skills of managers, entrepreneurs, and educators/trainers in key sectors; Supporting the training needs of small and medium-sized enterprises (SMEs) and the management of sustainable growth and development 63 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

65 Promoting and developing lifelong learning as a means to both meet rapidly changing skill needs in the economy as well as individual needs for adjustment and upgrading of education, vocational training, professional and technical skills, and management development Increasing quality of curricula, teaching methods, and instructional materials in education, training, and skills development at all levels, with a particular focus on preparing for the transition to the 21st century (i.e. from basic education, through vocational and technical skills training, to professional and executive development for management of change) Facilitating mobility of qualified persons to help meet skill shortages by developing means for mutual recognition of skills and qualifications, and to increase opportunities for people to gain the skills required for the economic growth and development of member economies and the region as a whole Enhancing the quality, productivity, efficiency, and equitable development of the labour forces and work places in member economies Strengthening co-operative action by public, and business/private sectors, educational and training institutions. Paying attention to the diversity of experiences and situations in the region in designing approaches to human resources development. Training the youth for taking up placements in the emerging outsourcing businesses. The Government should provide incentives to the major hotel chains to set up their properties in the region, thus providing employment and training to the youth. Insurance companies can be invited to cater to the vast populace of Punjab and also provide employment to the people. Setting up vocational training centres with the help of service industry corporates and entrepreneurs for providing training to the youth of Punjab Whichever way it may be defined, ultimately, a strategic approach to human resource management must culminate in the implementation of policies and practices designed to enable, support and engender behaviours consistent with organisation's strategic intent. This demands achievement of a good fit between HR and the business strategy. References growth_ html I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

66 CHAPTER 4: MANAGEMENT PARAMETERS IN SERVICE INDUSTRY INTRODUCTION A Service is a valuable action, deed, or effort performed to satisfy a need or to fulfill a demand. It is largely intangible (i.e. not material). You cannot touch it. You cannot see it. You cannot taste it. You cannot hear it. You cannot feel it. So a service context creates its own series of challenges for the marketing manager since he or she must communicate the benefits of a service by drawing parallels with imagery and ideas that are more tangible. A product is tangible (i.e. material) since you can touch it or own it. A service tends to be an experience that is consumed at the point where it is purchased and cannot be owned since it quickly perishes. A person could go to a café one day and enjoy excellent service, and then return the next day and have a poor experience. Marketers talk about the nature of a service as being inseparable, intangible, perishable, heterogeneous and variable. Inseparable from the point where it is consumed, and from the provider of the service. For example, you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product, not a service). The consumer is actually involved in the production process that they are buying at the same time as it is being produced, for example an eye test or a makeover. One benefit would be that if you are unhappy with your makeover you can tell the beautician and that instant feedback means that the service quality is improved. You can't do that with a product. Another attribute is that services have to be close to the person consuming them, i.e. goods can be made in a central factory location which has the benefits of mass production. This localization means that consumption is inseparable from production. Intangible cannot have a real, physical presence as does a product. For example, motor insurance may have a certificate, but the financial service itself cannot be touched, i.e. it is intangible. This makes it tricky to evaluate the quality of service prior to consuming it since there are fewer attributes of quality in comparison to a product. One way is to consider quality in terms of search, experience and credence. Search quality is the perception in the mind of the consumer of the quality of the product prior to purchase through making a series of searches. So this is simple in relation to a tangible product because you might look at size or colour for example. Therefore, search quality relates more to products and services. Experience quality is easier to assess. In terms of service, you need to taste the food or experience the service level. Therefore, your experiences allow you to evaluate the level and nature of the service. You remember a great vacation because of the food or service, but by the same token you remember an awful vacation because of the hopeless food or poor service. Credence quality is based upon the credibility of the service that you undertake. This is down to the reputation of a dentist or of a decorator. Credence is used where you have little knowledge of the topic and where you rely upon the professionalism of the expert. Perishable is that once it has occurred it cannot be repeated in exactly the same way. For example, once a 100 meters Olympic final has been run, there will not be another for 4 more years, and even then it will be staged in a different place with many different finalists. You cannot put service in the warehouse, or store in your inventory. An interesting argument about perishability goes like this, once a flight has taken off you cannot sell that seat again, hence the airline makes no profit on that seat. Therefore, the airline has no choice but to price at peak when it sells a seat at busy times in order to make a profit. That's why restaurants offer vouchers to compensate for quieter times, and it is the same for railway tickets and matinees in Broadway during the middle of the week. Heterogeneity is where services are largely the same (the opposite of variability above). We considered McDonald's above which is a largely heterogeneous service, so now let's look at KFC and Pizza Hut. Both of these businesses provide a heterogeneous service experience whether you are in New York, or Alaska, or even Adelaide. Consumers expect the same level of service and would not anticipate any huge deviation in their 65 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

67 experience. Outside of the main brands you might expect a less heterogeneous experience. If you visit your doctor he or she might give one interpretation, whereas another doctor might offer a different view. Your regular hairdresser will deliver a style whereas a hairdresser in the next town could potentially style your hair differently. Therefore, standardization is largely embodied by the large global brands which produce services. Variability, since the human involvement in service provision means that no two services will be completely identical, they are variable. For example, returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction, or speediness of work. If you watch your favorite music group on DVD the experience will be the same every time you play it, although if you go to see them on tour when they are live no two performances will be identical for a whole variety of reasons. Even with the greatly standardized McDonalds experience, there are slight changes in service, often through no fault of the business itself. Sometimes Saturday lunchtime will be extremely busy, on other days you may have to wait to go via the drive through. So, services tend to vary from one user experience to another. Right of ownership is not taken to the service, since you merely experience it. For example, an engineer may service your air-conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take ownership of it. Western economies have seen deterioration in their traditional manufacturing industries, and a growth in their service economies. Therefore, the marketing mix has seen extended and adapted to create the services marketing mix, also known as the 7P's or the extended marketing mix - physical evidence, process and people. To make the definition of services more clear following are a few examples of financial services: 66 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

68 CONTRIBUTION OF SERVICE INDUSTRY 60% of India s GDP and growth depends on service sector. It is also a significant employment generator. Service sector encompasses a variety like tourism, rail freight, logistics, hotel industry; healthcare, financial services like insurance and banking. These sectors have been growing at 28% over the last 5 years, which is remarkably higher than the GDP growth of 7%. Further, service sector will not be dampened much by the gloom, as healthcare, financial services, tourism has not shown any slackness recently. Prospects over the next few years are robust and industry confidence is high. Exports of goods and services (% of GDP) in India: The Exports of goods and services (% of GDP) in India was last reported at in 2012, according to a World Bank report. Exports of goods and services represent the value of all goods and other market services provided to the rest of the world. They include the value of merchandise, freight, insurance, transport, travel, royalties, license fees, and other services, such as communication, construction, financial, information, business, personal, and government services. They exclude compensation of employees and investment income (formerly called factor services) and transfer payments. Exports as %ge of GDP Jan-08 Jan-09 Jan-10 Jan-11 Jan I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

69 Foreign Direct Investments: India s foreign direct investment (FDI) inflows into the services sector increased by a mere 5 per cent to USD 3.6 billion during the April-October period of 2012, according to the latest data of industry ministry. The financial and non-financial services sector had attracted FDI worth USD 3.42 billion during the same period last year. As far as overall FDI inflows are concerned, they declined by about 27 per cent points during the first seven months of to USD billion, from USD billion in the previous year. In , foreign investment in the services sector, which contributes over 50 per cent in India's GDP, rose to USD 5.21 billion from USD 3.29 billion in The other sectors which have received high level of FDI during the first seven months of current fiscal include hotel and tourism (USD 3.11 billion), metallurgy (USD 1.21 billion), construction (USD 691 million) and automobile (USD 743 million). Country wise, high levels of FDI came during the period from Mauritius (USD 6.75 billion), Japan (USD 1.52 billion), Singapore (USD 1.24 billion) the Netherlands (USD 1.05 billion) and the UK (USD 611 million), as per the Department of Industrial Policy & Promotion (DIPP) data. The government is making sustained efforts, including involving stakeholders in policy formation, to make the investment regime more attractive and investor friendly, it said. It has already allowed FDI in multi-brand retail sector besides hiking the cap to 100 per cent in the single brand retailing. Foreign investments are considered crucial for India, which needs around USD 1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Decline in foreign investments could affect the country's balance of payments (BoP) situation and also impact the rupee. Services Sector Growth Rate in India GDP has been very rapid in the last few years. The Services Sector contributes the most to the Indian GDP. The Growth Rate of the Services Sector in India GDP has risen due to several reasons and it has also given a major boost to the Indian economy. India s gross domestic product (GDP) means the total value of all the services and goods that are manufactured within the territory of the nation during the specified period of time. The Indian economy is the second fastest major growing economy in the whole world with the growth rate of the GDP at an average of 9.4% for the last four years. India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country. The various sectors under the Services Sector in India are construction, trade, hotels, transport, restaurant, communication and storage, social and personal services, community, insurance, financing, business services, and real estate. The Services Sector contributes the most to the Indian GDP. The Sector of Services in India has the biggest share in the country's GDP, for it accounts for around 57.6% in The contribution of the Services Sector in India GDP has increased a lot in the last few years. The Services Sector contributed only 15% to the Indian GDP in This shows that the Services Sector in India accounts for over half of the country's GDP. The Reasons for the growth of the Services Sector contribution to the India GDP The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India especially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP. Services Sector Growth Rate in India GDP registered a significant growth over the past few years. The Indian government must take steps in order to ensure that Services Sector Growth Rate in India GDP continues to rise, for this will ensure the growth and prosperity of the country's economy. Comparison of Service Sector with other Sector Latest GDP numbers indicate a growth of 5.5% in Q1 of This growth rate is slightly higher than the 5.3% growth registered in Q4 of FY12, a consecutive decline for five quarters. Agriculture expanded by 2.9% (vis-à-vis 3.7% of Q1 FY 12 and 1.7% of Q4 FY 12). This growth in agriculture vis-à-vis last quarter is a pleasant surprise. However, in spite of the agricultural sector clocking close to 3% growth. Prices of vegetables and food grains would remain elevated owing to the ripple effect of the lower productivity in the months of June & July due to deficient monsoon 68 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

70 Fertilizer sales during the first quarter of FY13 indicate a decline Area sown for all major crops witnessed a decline between the years 2011 and 2012 (in the first 4 months) The industry sector recorded a growth of 3.6%, which is substantially higher than the 1.9%, & 2.5% growth recorded in Q4 & Q3 FY12 respectively. However, this figure is not in line with the growth figures achieved in FY 10 & FY 11. The growth in the mining & quarrying sector has been a meager 0.1% as compared to 4.3% in the last quarter. The trend in FY12 has been negative with the numbers drastically going up in the fourth quarter. However, it seems that the negative trend has once again caught up with this sector. The performance of the manufacturing sector was also far from being buoyant. The manufacturing sector reported a growth of 0.2% in Q1FY13, vis-à-vis (-) 0.3% growth in Q4 FY12. The construction sector recorded a whopping growth of 10.9% in the first quarter as compared to 4.8% in Q4 FY 12. The sector has not recorded such a high growth ever since Q2 FY08. This year s good performance could be due to delayed monsoon which otherwise affects construction activity. Cement dispatch numbers for the quarter have been fairly decent and may be the delay in the monsoons this year has lent some support to the cement companies. Trend GDP growth rates in India (%) Industry Q1 Q2 Q3 Q4 Q1 Agriculture Industry Mining & quarrying Manufacturing Electricity, gas & water supply Construction Services Trade, hotels, transport & communication Financing, insurance, real estate & business services Community, social & personal services GDP at factor cost Source: CSO & FICCI Research However, the worrying point was the growth rate in service sector at a low of 6.9% as compared to 10.2% in Q1 FY 12. At a disaggregated level, it was the trade, hotels & restaurants sector which dragged the services growth down. The trade, hotels & restaurants sector recorded an all-time low growth of 4% in Q1FY12 as compared to 7% in the last quarter and close to 14% in Q1 FY I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

71 The services sector covers a wide range of activities from the most sophisticated information technology (IT) to simple services provided by the unorganized sector, such as the services of the barber and plumber. National Accounts classification of the services sector incorporates trade, hotels, and restaurants; transport, storage, and communication; financing, insurance, real estate, and business services; and community, social, and personal services. MANAGEMENT Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources. Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others. In for-profit work, management has as its primary function the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued services at a reasonable cost (for customers) and providing rewarding employment opportunities (for employees). In nonprofit management, add the importance of keeping the faith of donors. In most models of management/governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers; but this occurs only very rarely. Following are the basic challenges faced by any service provider nowadays: Limited time and cost so cannot afford to take risks in implementing changes Finding it difficult to keep up with customer expectations and facilitate new services Implement changes through standardization of processes Difficulty in getting your team to understand and drive innovation effectively Difficulty in getting your people to embrace change instead of resist it Reduce time to market of new service processes and IT applications Manage cost and profits of services Manage service transformation Despite the above challenges every organization has the following objectives: Accelerate your level of service innovation Save time and reduce risks by using proven best practices and service industry standards Find out which best practices and service industry standards serve your specific needs Maintain flexibility in your service organization Improve your adaptability to ever fasting changing customer requirements Improve speed of adoption of organizational changes Hence to achieve such objectives the organization should use certain parameters to keep a check on its management practices. Parameter (from Ancient Greek also para meaning beside, subsidiary and also metron meaning measure ) can be interpreted in mathematics, logic, linguistics, environmental science, management and other disciplines. In its common meaning, the term is used to identify a characteristic, a feature, a measurable factor that can help in defining a particular system. A Parameter is an important element to take into consideration for the evaluation or for the comprehension of an event, a project or any situation. Management Parameters: In management there are various parameters for measuring the outcomes of business decisions. You can measure the business performance through financial ratios. You can measure the individual through KRAs. KRA means key results area. KRAs are yearly and review is done twice in a year, i.e. once in 6 months. KRAs used mainly for HoDs mainly for their job roles which they are give out put in their certain departments, 70 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

72 which they have to implement. Mostly this type of work is related to the concerned department. Their HoDs will check whether the concerned department HoD was reached or completed for his i.e. 6 months their review of KRAs will be checked by the unit head. Both the performances, business or individual can be measured through KPI also. A performance indicator or Key Performance Indicator (KPI) is industry jargon for a type of performance measurement. KPIs are commonly used by an organization to evaluate its success or the success of a particular activity in which it is engaged. Sometimes success is defined in terms of making progress toward strategic goals, but often success is simply the repeated achievement of some level of operational goal (for example, zero defects, 10/10 customer satisfaction, etc.). Accordingly, choosing the right KPIs is reliant upon having a good understanding of what is important to the organization. 'What is important' often depends on the department measuring the performance - the KPIs useful to finance will be quite different than the KPIs assigned to sales, for example. Because of the need to develop a good understanding of what is important, performance indicator selection is often closely associated with the use of various techniques to assess the present state of the business, and its key activities. These assessments often lead to the identification of potential improvements; and as a consequence, performance indicators are routinely associated with 'performance improvement' initiatives. A very common way for choosing KPIs is to apply a management framework such as the balanced scorecard. Performance of an employee has been observed by various parameters like time management, leadership qualities, communication, external people from the industry, maturity, willingness, patience, domain knowledge, situation handling, stress management, sensitivity, grooming and so on. Apart from these parameters your personal observation is also a scale to measure an employee s performance. MANAGEMENT CONSISTS OF THE FOLLOWING KEY DECISION MAKING AREAS: a) Policies - A policy is a principle or rule to guide decisions and achieve rational outcomes. A policy is an intent, and is implemented as a procedure or protocol. Policies are generally adopted by the Board or senior governance body within an organization whereas procedures or protocols would be developed and adopted by senior executive officers. Policies can assist in both subjective and objective decision making. Policies to assist in subjective decision making would usually assist senior management with decisions that must consider the relative merits of a number of factors before making decisions and as a result are often hard to objectively test e.g. work-life balance policy. In contrast, policies to assist in objective decision making are usually operational in nature. b) Planning - Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal. Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of intelligent behavior. This thought process is essential to the creation and refinement of a plan, or integration of it with other plans; that is, it combines forecasting of developments with the preparation of scenarios of how to react to them. An important, albeit often ignored aspect of planning, is the relationship it holds with forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like. The counterpart to planning is spontaneous order. c) Development Strategies - The word "strategy" comes from the Greek word for "generalship". Like a good general, strategies give overall direction for an initiative. A strategy is a way of describing how you are going to get things done. It is less specific than an action plan (which tells the who-what-when); instead, it tries to broadly answer the question, "How do we get there from here?" (Do we want to take the train? Fly? Walk?) A good strategy will take into account existing barriers and resources (people, money, power, materials, etc.). It will also stay with the overall vision, mission, and objectives of the initiative. Often, an initiative will use many different strategies - providing information, enhancing support, removing barriers, providing resources etc. to achieve its goals. Objectives outline the aims of an initiative - what success would look like in achieving the vision and mission. By contrast, strategies suggest paths to take (and how to move along) on the road to success. That is, strategies help you determine how you will realize your vision and objectives through the nittygritty world of action. d) Marketing Marketing is the process of communicating the value of a product or service to customers. Marketing might sometimes be interpreted as the art of selling services, but selling is only a small fraction of marketing. As the term "Marketing" may replace "Advertising" it is the overall strategy and function of 71 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

73 promoting a product or service to the customer. The American Marketing Association defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." From a societal point of view, marketing is the link between a society s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. Marketing is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. e) Finances Managing Finances is the task of providing the funds for a corporation's activities (for small business, this is referred to as SME finance). Corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock, and generically entails three interrelated decisions. In the first, "the investment decision", management must decide which "projects" (if any) to undertake. The discipline of capital budgeting is devoted to this question, and may employ standard business valuation techniques or even extend to real options valuation. The second, "the financing decision" relates to how these investments are to be funded: capital here is provided by shareholders, in the form of equity (privately or via an initial public offering), creditors, often in the form of bonds, and the firm's operations (cash flow). Short-term funding or working capital is mostly provided by banks extending a line of credit. The balance between these elements forms the company's capital structure. The third, "the dividend decision", requires management to determine whether any inappropriate profit is to be retained for future investment / operational requirements, or instead to be distributed to shareholders, and if so in what form. Short term financial management is often termed "working capital management", and relates to cash-, inventory- and debtors management. These areas often overlap with the firm's accounting function; however, financial accounting is more concerned with the reporting of historical financial information, while these financial decisions are directed toward the future of the firm. Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value. In investment management in choosing a portfolio one has to decide what, how much and when to invest. To do this, a company must identify relevant objectives and constraints, identify the appropriate strategy and measure the portfolio performance f) Human Resource - Human resources is the set of individuals who make up the workforce of an organization, business sector or an economy. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view; i.e. the knowledge the individuals embody and can contribute to an organization. Likewise, other terms sometimes used include "manpower", "talent", "labor" or simply "people". GUIDELINES FOR MANAGING THE KEY AREAS IN A SERVICE INDUSTRY A) Finances in the service industry In some organizations, managers and leaders fall into the trap of believing that financial management is something that the accounts team is fully responsible for. While there will be areas like cash management, payroll, paying suppliers and collecting payments from customers that are likely to be handled by the accounts team, financial management falls into the remit of all managers and leaders. Mangers often have concerns about this area, often believing that it is difficult and complex. The truth is that if you are an expert in your area of the business, you can excel in financial management. Tip 1: Be actively involved in setting a budget Most businesses now devolve budget responsibility as much as they possibly can. Don't miss out on your chance to determine your budget. As a result, managers have a chance to be actively involved in determining things like: Sales volumes Temporary staffing cover for vacancies 72 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

74 Staffing levels to deliver the sales Buying preferences in terms of services that will be used in delivering agreed volumes Investment in new equipment or facilities Tip 2: Be clear on your assumptions A budget is a plan for the future based on the best evidence you have at the time you prepare it. You will have to make assumptions about things like sales growth, staff turnover, sickness, price inflation, etc. Make sure that when presenting your budgets the assumptions are clearly stated. Tip 3: Work with your accountant Your accountant who works with you in the business is essentially your personal business advisor. Use your accountant in this way and you will reap numerous benefits. Your accountant gets a better understanding of your area of the business and what the key drivers of revenues and costs are, which will be immensely helpful when it comes to reviewing performance throughout the year. In addition, your accountant can model results for you based on different assumptions and help you to get a much clearer picture of the risks that might need to be managed. Tip 4: Share the budget with your team As a manager and leader, your success depends on the results of the team. Take the time to share your budget with your team, including the key assumptions on which it is based. If the team knows what they are aiming for in terms of financial results, they will look to do the right things operationally to get the best result. Tip 5: Take responsibility When the going gets tough it is so easy to start to look elsewhere for excuses. If you have been involved in setting a budget which you have signed up to, focus your energies on getting results rather than the injustice of the current situation. Tip 6: Monitor performance and take action Make sure that you have a process in place to carefully monitor your actual performance against the budget. If things are going well, see if there is more you can do to boost performance even further. If on the other hand things are not going as well as expected, focus on the changes you need to make or action you need to take to get back on track. Tip 7: Focus on the most important numbers When it comes to financial management, managers can sometimes get lost in lots of detail and trivia. Be clear on what are the 2-3 big numbers that you need to pay attention to, as they will more than likely constitute about 90% of your budget. In most businesses this will be: Income from sales or services Salary costs of employees Major non salary cost such as materials Make sure that you have as good an understanding of what impacts on these numbers at the business unit level so that you can keep things on track. At the end of the day, internal financial statements such as budgets merely reflect what is happening operationally in a common currency called money. The first step in positive financial management is an effective strategic and corporate focus. The Board plays a fundamental role in determining the strategic direction of an organization and points out where the goal posts are so as to facilitate an organizations planned arrival at its strategic goal The who, what, where, when, how and why of an organization. The strategic decision making process should then flow through to every aspect of the business, informing the structure of the organization and impacting on the way the work is performed at every level. In the case of financial management systems these goal posts can be expressed in terms of clear financial measures and ratios, including profit expectations (e.g. 10%), reserve requirements (e.g. >1.5), Working Capital Ratio (e.g. 1.5 times) etc. Adopting a strategy that measures performance in a financial format and incorporating it into regular reporting requirements adds a dimension of strategic rigor to the organization s systems and provides Management and Board with indicators around which to measure performance and make recommendations about future action. 73 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

75 B) Marketing in service industry Adapting to your situation can help you to avoid the wasted effort of techniques that may not bear fruit and to swiftly implement solutions that have a high probability of success. 74 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

76 Following are the five basic ideas which can be applied for best marketing practices especially in service industry: 1) Applying Product Marketing Techniques to Services This is a very important trend that we sincerely hope continues. It is not necessarily something that marketers set out to do specifically, but is a byproduct of using good marketing practices and trying to use better marketing communications to coworkers and customers alike. Probably none of the companies we spoke with said to themselves, "Let's use product marketing techniques to market services." They just did it in response to their needs Things like branded product lines, packaging, good data sheets and brochures, articulate 75 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

77 presentations, simple and consistent pricing, and good competitive positioning and information. As mentioned, these are all just good marketing practice. So what's the big deal? Well, we have discovered an amazing result when such techniques are used. The product sales force responds enthusiastically. They are used to product information flowing to them in certain ways and having some consistency in approach. When services are marketed like products, sales people understand them better and are more comfortable with them. 2) Branding Services One of the techniques mentioned above is branding. This has become such a hot topic among service marketers that it merits its own special section. While there is still more talk in the industry than action, we are seeing companies brand their services with exciting results. The best programs we have seen have established an umbrella identity and name for their entire service product line. When used most effectively, the company announces the services product line by name (Sony Electronics uses Support Net, Waters Corporation uses Connections) right along with its branded product family names. This gives equal weight to services as to products. It also helps to make services more tangible to salespeople and customers. We have heard compelling testimony from salespeople who have related that service organizations are finally making their programs lucid and understandable to the sales channel. 3) Internal Marketing of Services and Service Organizations The need for better positioning of services within companies is well established. What has been lacking is some good ideas on how to accomplish this. Service organizations and our leaders are part of the problem. Those of us who have risen from the ranks tend to be conservative, solid and process-oriented. When we reach the executive level, we tend to be regarded the same way as accounting executives. Solid and reliable, but not noted for our strategic leadership. Working with one of our clients to develop a strategic plan for their services organization recently, we came to the conclusion that we had no hope of achieving the plan without repositioning the whole services organization within the company. We would never get the resources we needed, nor the cooperation of different departments. What we needed, we decided, was an internal marketing plan. 4) Niche Service Niche marketing has been around for a while. Recently we have seen it applied well to service providers, especially in professional services. The key element has been in deciding what not to do. It is easy for some manufacturers' service organizations: they just service what the company sells. For others, there has been a confusing array of opportunities including multivendor service, asset management, systems integration, consulting and a slew of others. The temptation is to go after too much. This is one reason that many service providers have failed to successfully launch professional service programs. It is also one of the reasons that professional services, on average, are about half as profitable as traditional services. 5) Direct Sales of Services Internationally As services have gotten more challenging to sell, we have seen many companies responding by adding both telesales groups and field located service sales specialists. At first, this was just a U.S.-based phenomenon. Lately we have found some spectacular successes in other geographies. Despite local objections that "it will never work in France (or Germany, Japan, Taiwan, etc.)," telesales of service and support contracts is working just about everywhere that it is being seriously tried. One company convinced their dubious French counterparts to try it in just one small product area for one month December, no less. The results were absolutely convincing on the order of a 40 percent increase in this admittedly small market. The same company convinced their German peers to try a more expansive six-month test, with similar results across a much broader front. Oracle has used telesales very aggressively to sell support contracts, to the tune of millions of dollars per year per person. C) Human Resource in service industry Some of the major challenges which HR faces in India today are discussed hereunder. Managing globalization: It is important for an HR Manager to study people management practices before implementing new practices which are global in nature. Developing leadership skills: It is not just about knowledge, experience and expertise it is also about developing the right soft skills to give shape to the future leaders. 76 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

78 Managing change: Change management is the call of the day with big organizations integrating Six Sigma methodologies in their businesses. Change management defines the response of the business to the changing external and internal environment. Developing work ethics: With back to back slumps in the global economy, India has not remained unscathed. Employee morals and loyalty are being tested in a business s day to the day functioning. Retaining Talent: Yes, this is one of the major challenges which HRM faces today. Poaching and cutthroat competition has given an impetus to high remuneration to the deserving. Managing fast changing technological trends: Most large and medium scale organizations today prefer to be technologically oriented. The technological trends in today s global scenario are fast changing. Developing Accountability: With the advent of Six Sigma methodologies, organizations have lowered their tolerance levels for mistakes, errors and delays. It is a challenge which HRM in India is facing like its global counterparts. Managing workforce stress and employment relations: HR is the face of an organization. It hires and fires employees and if the HR of an organization is not emphatic towards its workforce it does not help in employment relations. Managing inter-functional conflict: Earlier it was the friction between different levels of an organization and now the new emerging challenge for the HR is to manage inter-functional conflict within an organization. Managing workplace diversity: With globalization and India s economy changing gears to accelerate growth, organizations hire as well depend on a people from different countries, cultures and ethnicity. Keeping in view the above mentioned challenges faced by the Service providers in today competitive world the following guidelines are suggested to make their HR practices more effective: 1. Developing advanced workforce planning capabilities High-impact HR organizations incorporate sophisticated forecasting and workforce analytics into their processes. This enables them to translate company-wide talent, business data and external workforce segment data into workable insights that they can use and share with business leaders. 2. Implementing the right HR philosophies High-impact HR organizations tend to commit themselves to creating work environments that enable employees to thrive both as individuals and as contributors to business success. They strive to create positive employee environments, and clearly communicate these expectations in the HR philosophy and mission. The most effective philosophies focus on fostering innovation and collaboration, or creating the best place to work, while the least effective philosophies focus narrowly on efficiency or costcutting efforts. 3. Reducing administrative work for HR business partners Many HR functions have a role that is a liaison between the HR function and business leaders. The specifics of this role vary widely. High-impact HR organizations use it to advise senior business leaders, focusing on decision support, workforce planning, leadership development and executive coaching. By enlisting the right person, HR can improve its credibility across the enterprise, improve working relationships with business leaders, cultivate mutual understanding and gain influence. When this role is implemented poorly, with more focus on administrative duties and taking orders, our research found that it can actually reduce an HR function s ability to work effectively and efficiently. 4. Implementing flexible HR organization design High-impact HR organizations are flexible and agile. Like earthquake- proof buildings, they are structured to allow adaptive movement if the ground shifts. No overall HR structural model (centralized, decentralized or a combination of the two) in itself emerged as a predictor of HR success. But certain structural features do lend themselves to areas of excellence. One feature that we found to be universally valuable was flexibility. Fancy organization charts and designs are fine provided that you also have a culture which recognizes the need to adapt structurally when business needs and challenges change, as well as an HR staff that is capable of making those changes. 5. Measuring both HR operational and business metrics Measurement strategies in high-impact HR organizations have evolved to ensure efficiency, effectiveness and business alignment. Such strategies incorporate both operational measures by which to manage the HR function and strategic people measures to support crucial business decisions. 6. Developing internal HR skills 77 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

79 As they focus on programs to develop employees company-wide, HR organizations often neglect the development of their own team members. This is a mistake. The world of HR solutions is constantly changing. High-impact HR organizations must invest the time and money needed to ensure team members competence grows in such disciplines as change management and relationship management. Efforts must also focus on developing team members business acumen, industry knowledge and command of current best practices in all areas of talent management, as well as the use of social networking tools and other HR technology. 7. Outsourcing HR services strategically High-impact HR organizations use outsourcing to enable their internal teams to focus on things that cannot be outsourced, such as building business relationships and developing custom solutions for business managers. These organizations outsource areas that can be improved through economies of scale, or which require global coordination and expertise. What an organization outsources often depends on its level of maturity. D) Planning for service industries Here are ten steps to ensure that your strategic planning initiative is straightforward enough to incorporate into the day-to-day management of your company. 1. Assess the Current Business Environment: Prior to the meeting, examine the factors outside the company that can affect its performance. This analysis should cover economic forecasts, industry developments and marketplace trends, as well as a review of the competition. Formulate assumptions about the future and the impact of these assumptions on your business. 2. Focus on Important Strengths, Weaknesses, Opportunities and Threats: Strategic planners use this technique to help organizations assess their external environments and internal capacity. In order to plan for the future, ask yourself these questions: Strengths: What are the advantages of your company and services? What do you do well? What do you have that your competitors don t? What is it about your relationship with your customers that you can use to your advantage? Weaknesses: Where is there room for improvement? Where does your company trip up? How would the marketplace describe your weaknesses? What does the competition have that you don t? Opportunities: What s happening out there that you can capitalize on? What new, useful technologies are coming? What changes in buying or usage habits can be exploited? Threats: What outside events or competitors are waiting to hit you when you re not looking? What potentially harmful regulations are on the horizon? 3. Define (or Redefine) the Company s Mission: An organization's mission statement (usually no more than one or two sentences) describes the purpose of the organization. It enables all members to share the same view of the company's goals, philosophy and future direction. It should include the: Reason the organization exists (management's mission) Products and services offered Customer segments served Nature and location of the business's marketing territory Areas of specialization Future direction of the company 4. Build Consensus: A management team with a clear and consistent vision of where the company is headed is likely to be operating in concert to reach their destination regardless of whatever situation is encountered. Getting buy-in from all the players will go a long way toward ensuring the strategic plan s success. 5. Map Out an Action Plan: Organize the company's objectives and tactics into key areas. This makes it easier to process and prioritize them, to allocate resources and to coordinate with other areas. Develop objectives that describe the conditions the organization wishes to achieve, taking care to 78 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

80 make them as quantifiable as possible. Then, elucidate and quantify the tactics needed to accomplish these objectives. 6. Budget for the Strategic Plan: The strategies and tactics that you choose will affect revenues and expenses to differing degrees. You need to consider the potential impact of each objective on both, so you can prioritize them and reflect them in future budgets. 7. Target Completion Dates: Be realistic in setting target dates. It s important that you resist the temptation to set extremely ambitious timelines. In most cases, the tactics you ve agreed on will be accomplished by people who already have a full day's work. Each employee must be given sufficient time to achieve the specific objectives assigned to him or her, or the plan will quickly be viewed as impossible to accomplish. E) Making policies in service industries 1) Management Policies can emerge in four very different ways. First, and most commonly, they may be originated by management. Managers originate policies to ensure that decisions within the organization will be in line with its objectives. Generally, they are written and embodied in the company's policy manual, if it has one. 2) Appeal Process The second way policies come about is through appeal. The appeal process typically works something like this. A situation develops where an executive is uncertain whether he or she has the authority to make a decision. Consequently, he or she appeals to higher-level management for the decision. Once the decision is made, it becomes precedent for similar decisions in the future. The process is analogous to the way common law develops in the Anglo-American judicial system. There is a danger, however, of allowing too many policies to be made through appeal. A set of unwritten, incomplete, and uncoordinated policies may emerge because the various appealed decisions will, in all likelihood, be made on the basis of the individual merits of the particular situations without regard for their broader implications. 3) Real Policies Third, policies may be implied from the decisions and actions of the company's executives. In fact, it is not uncommon to find that some of the "real" policies of a company differ from its stated policies. For example, a company may have a stated policy of promoting strictly on the basis of merit whereas in reality, relatives and personal friends of top management are given priority. 4) Externally Imposed Finally, policies can be externally imposed. Not infrequently, outside institutions, such as various departments of government, trade unions, and trade associations, impose requirements on organizations. Labor contracts and federal regulations are familiar examples. Consider how the equal opportunity employment laws have led to major modifications in the personnel policies of many firms. F) Development strategies for service industry 1. Identify the appropriate market and target the appropriate segments within the market -- Deep pockets; ability to leverage core service from one segment to another without major design/development changes. 2. Make sure there exists a market problem that currently demands a solution. Is the problem large 79 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

81 enough to justify the price of your solution? Is someone with P/L responsibility willing to pay for the solution? Test: Are you able to clearly delineate a value proposition that gets a customer s attention? 3. Understand where you are in the market cycle, from a timing perspective: new technology, competitors entering, segmentation, consolidation, solutions offering, commoditized, etc. 4. Price based on value of solution, not to undercut competitors. Compete first on functionality, not price. If you truly are the only one solving the customer s problem, you should be able to price your offering based on value of your service/solution to the customer. You compete on price only after the service/solution has become a commodity end of the life cycle. 5. Techies should never hire sales people; they don t know what skill-sets and personality traits to look for. Test: If it's someone who is too aggressive and a person techies don't want to hang out with, it's probably a good sales guy. 6. Identify the end user of your product or service before you start thinking about Business Development. Even if you do not sell directly to the end users, you should know as much as possible about them. Don't be fooled by the misconception that your target market is "everybody". 7. Write a detailed plan of action. Prioritize your opportunities and consider partnering with proven and profitable businesses first. It is very common to see announcements of strategic alliances between companies with so-called "ideas" and not solid business models. Don't invest much time talking to your suppliers or companies you have to pay money to. It is their job to give you the best deal. Always assign a monetary value to the deal before exploring it. Form alliances with companies that will bring you revenue first. 8. Learn as much as you can about the potential partner and their competitors before you contact them. Determine how your deal can make your partner's company more profitable. That is, list all the ways in which your proposed joint agreement adds value your partner's business. What holes does it fill in your partner's product/service line? How does the deal enhance your partner company's core business? How will your service attract more customers to your partner company's business? How does "doing the deal" brace your partner against the trends of the industry, for which they might otherwise be unprepared? 9. Identify the personal issues. What are the personalities of the people who will be influential in the decision to sign the agreement? What are their personal motivations? Growth/expansion? Hot buttons? Family? Loyalty and commitment to the company they represent? Business process simplification? Eventual merger/acquisition? MANAGEMENT PARAMETERS FOR KEY AREAS IN SERVICE INDUSTRY A) Financial Management Corresponding to figures from your financial statements, ratios make relationships in your business more understandable. A ratio is only a shorthand note: It shows you what's going on according to your books. If your books are accurate portrayals of your business, here are 10 checkpoints to think about. Acid Test = Cash and Near Cash Current Liabilities Measures ability to meet current debt, a stringent test since it discounts the value of inventories. The rule of thumb is 1-to-1. A lower ratio indicates illiquidity. A higher ratio may imply unused funds. Current Ratio = Current Assets Current Liabilities Another measure of ability to meet current obligations. Less accurate than the acid test for very near term, but probably a better measure for six months to a year out, since it contains receivables and inventories as well as cash and near cash. The rule of thumb is 2-to-1, though this will be affected by seasonality. Receivables Turnover = Sales Receivables Measures the effectiveness of credit and collection policies. If your ratio is going down, collection efforts may be improving, sales may be rising, or receivables are being reduced. If your ratio is going up, sales credit policies may be changing, collection efforts may be flagging, or sales may have taken a nosedive. 80 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

82 Caution: This ratio depends on when receivables are measured and the seasonality of the business. Careful bookkeeping is also essential. The same applies to inventory turnover: Make sure that the measures are comparable from month to month. Use average receivables (inventories) if you can. Days Receivables = 30 Receivables Turnover Another way of looking at receivables. Particularly useful in explaining graphically what changes in credit and collection operations do to a business. Inventory Turnover = Cost of Goods Sold Average Inventory A measure of how well inventory is managed. Most businesses have a steady inventory turn. Compare your figures from year to year; asking yourself what causes the inevitable fluctuations. Small fluctuations are probably due to the flow of work. If you produce one jumbo jet a year, your inventory picture will be very different from that of a dealer of ripe tomatoes. Days Inventory = 30 Inventory Turnover Another way of monitoring inventory. This is controlled by your inventory ordering patterns (among other considerations), so be careful how you interpret it. Gross Margin Rate = Gross Margin Sales Permits comparison of margins over months with dissimilar sales. Ideally, this holds pretty steady in good months and bad -- but it depends on your business. It can distort fluctuations if sales are erratic. Net Profit Rate = Net Profit Sales An overall batting average: The aim is consistency over the long haul, not just short-term stardom. Return on Investment (ROI) = Net Profit Net Worth (Note: Net worth might show up on your financial statements as shareholder's equity). Another profitability ratio, best looked at occasionally, because it tends to magnify short-term shifts in thinly capitalized companies. Return on Assets (ROA) = Net Profit Total Assets A better profitability measure than ROI. ROA shows how well you're using your assets. However, since profits are a volatile short-term measure, this should also be taken with a grain of salt. The long-term trend is what matters. A large investment in fixed assets to handle growth will seriously alter this ratio. All ratios must be taken in context. The reason to look at them on a monthly basis is to make sure that you spot trends as they develop, not afterward. If you are doing something exceedingly well, you need to know it. And if something is wrong, it's better to find out sooner than later. B) Human Resources Management The objective of Human resources audit is to check the compliance of the obligations by the firm but also the degree of adequacy of commands in order to ensure, for example, a continuous and effective development and the improvement of the individual s knowledge, a fact leading to the employer s profit, first and foremost. Human resources audit could be seen from the technical and organizational point of view, socio-psychologically and economically. From the technical and organizational point of view human resources audit is a means of verifying the documentation and an indicators analysis, which demonstrates the efficiency of the activities in an organization. In the western practice, human resources audit consists in the analysis of data and staff turnover indicators, the human resources attitude towards job and the degree of personnel satisfaction. Socio-psychologically, human resources audit represents an assessment of work relationships in the company in order to outline the essential factors of motivation and to identify the resources of maximizing the activity of the firm from the subjective point of view of personnel. The economic side of human resources audit consists of: 81 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

83 1. Establishing the competitiveness of the company in human resources area, which can be done by comparing the social and economical indicators of company activity to the work regulations mentioned in the laws or to the best results from other companies in the same line of business; 2. Settling the functioning effectiveness of the Human Resources Department, ascertaining the role it has in increasing the competitive power; 3. Establishing the economic effectiveness of audit itself by comparing the audit costs to the effects of auditing. The Functions of Human Resources Subsystem The Functions of Human Resources Subsystem Formation of personnel policy The assessment of the current situation of personnel policies, the degree of compliance to the development strategy of the firm; the evaluation of relationships among the personnel policy, the features of the organization and the internal conditions Planning the human resources The assessment of existing resources, targets and development prospects, future personnel request; analysis of planning plan and staff turnover planning analysis Utilization of human resources Degree of personnel occupation analysis; personnel stability analysis. Recruitment and selection Assessment of methods and procedures used in recruiting personnel; recruitment costs; recruitment efficiency in filling in the vacant positions; filling in possible positions in the future; efficiency of selection procedures. Professional assessment The analysis of methods used in the personnel assessment, their effectiveness; assessment of results and effects of the personnel evaluation process. Human resources adaptation Analysis of the methods used for personnel adaptation, their efficiency, identification and diagnose of issues which appeared in the adaptation process. Human resources training Analysis of targets and forms of training, their compliance to the purposes of the organization; study of the training program; assessment of personnel after completing training, the efficiency and results of the training program. 82 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

84 Professional career development Analysis of development system of personnel in the organization; job analysis, analysis of the plan for personnel development, the efficiency of methods used. Progress of the working process Analysis of work environment, security techniques; analysis of work standardization process; evaluation of work productivity; analysis of investments in this area and results. Motivation and stimulation Analysis of motivation forms, their relationship with personnel motivation; analysis of the level and structure of payment forms; assessment of compliance between the motivation forms and the targets of the organization. Development of teamwork spirit Diagnose of socio-psychological climate, assessment of the relationship strains between employees, hostility towards changes; organizational culture diagnoses; the type of leadership practiced. C) Parameters for Marketing Management Measuring marketing plays a role beyond making organizations more accountable. Effective marketing measurement initiatives enable organizations to use marketing metrics to guide scenario modeling, planning and investments. An integral part of such an initiative is establishing key performance indicators (KPIS). KPIS should indicate a change in performance and provide you with insight in how to influence success. All marketing metrics should help marketers assess their performance but it is the KPIs we deploy that should provide us with leading insight into the future impact of marketing efforts on the business outcomes. As you think about your KPIs, select those that will help you understand the market causes that will influence or effect change in the business outcomes you are trying to drive. Before you can determine your KPIs you must first know how the organization is going to measure success. This information is the foundation for establishing your organization's business outcomes. Once you have identified the business outcomes, the metrics to measure success, whether that's market share gains, improvements in customer value, etc. will become clear. Armed with how success will be measured each part of the organization can define appropriate KPIs, that is measures that marketing can use to help determine whether an initiative is/will have an impact on the success of the outcome. You want to select indicators that have the most influence on the outcome. Following are some other parameters which can be used to see the effectiveness of the marketing efforts of a service providing Company: Sales (and its Growth) Return on investment Market share Return on assets / Profitability Service quality feedback from customers Satisfaction (customer and company) New service success rate 83 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

85 Overall performance Customer retention/loyalty Overall performance relative to competitors Return on equity Satisfaction with overall performance Return on sales Brand awareness Gross operating profit Dollar share of the served market Occupancy rate at hotels Customer complaints Expectations achieved by organization Number of visitor to website Attracting new customers Return on capital References : I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

86 CHAPTER 5 ENTREPRENEURSHIP IN SERVICE INDUSTRY According to ILO (International Labour Organisation), entrepreneurs are people who have the ability to see and evaluate business opportunities; gather the necessary resources and to take advantage of them; and to initiate appropriate action to ensure success. The entrepreneur is a highly motivated person who acts as a dynamo in the process of development, and the enterprise is his/her representative on the stage of global business. Being entrepreneurial means combining personal characteristics, financial resources and the environment. Both the entrepreneur and enterprise are dynamic elements and action-oriented. An entrepreneur is a person who has organized knowledge and implements this in practice. Introduction to Entrepreneurship Entrepreneurship comes from the French verb 'entreprendre' which means 'To Undertake, is the act and art of being an entrepreneur or one who undertakes innovations or introducing new things, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations. Entrepreneurial activities are substantially different depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in order to raise capital to build the business. Angel investors generally seek annualized returns of 20-30% and more, as well as extensive involvement in the business. Many kinds of organizations now exist to support would-be entrepreneurs including specialized government agencies, business incubators, science parks, and some NGOs. In more recent times, the term entrepreneurship has been extended to include elements not related necessarily to business formation activity such as conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship have emerged. Defining the Concept of Entrepreneurship Entrepreneurship emerged as a concept with the industrial revolution, when there was increasing opportunity to create wealth through ideas and new enterprises. It is one of the four mainstreams of economic factors: land, labour, capital, and entrepreneurship. Entrepreneurship Creates awareness among people about economic activity & generates self-employment and additional employment. Entrepreneurs are always small business people and small business people are entrepreneurs Beyond business management and planning, entrepreneur skills cannot be developed The entrepreneurship is a risk-taking factor, which is responsible for the end result in the form of profit or loss. The emergence of entrepreneurship took place after the Second World War. Entrepreneurship received new meaning for attaining economic development within the shortest possible time. But in the process they were 85 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

87 seriously handicapped by the rigid institutional setup, political instability, marketing imperfection and traditional value system. The entrepreneurial motivation is one of the most important factors which accelerate the pace of economic development by bringing the people to undertake risk bearing activities. In many of the developing countries a lot of attention is being paid to the development of entrepreneurship because it is not the proprietary quality of any caste and community. The entrepreneurship is usually understood with reference to individual business. Entrepreneurship has rightly been identified with the individual, as success of enterprise depends upon imagination, vision, innovativeness and risk taking. The production is possible due to the cooperation of the various factors of production, popularly known as land, labour, capital, market, management and of course entrepreneurship. The young entrepreneur should be motivated to come out with determination to do something of their own and also to contribute to the national income and wealth in the economy. If the country wants to achieve the growth at the grass root level, through social justice and the crimination of poverty, it will have to provide institutional support and structural changes in organization of financial institutions to promote entrepreneurship development. Industrial development in any region is the outcome of purposeful human activity and entrepreneurial thrust. The entrepreneurship is essentially a creative activity or it is an innovative function. According to the Merriam-Webster Dictionary, An entrepreneur is one who manages and assumes the risks of a business or enterprise. From the Business Dictionary online - Capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward. In economics, entrepreneurship is regarded as a factor of production together with land, labor, natural resources, and capital. Entrepreneurial spirit is characterized by innovation and risk-taking, and an essential component of a nation's ability to succeed in an ever changing and more competitive global marketplace. Entrepreneurship is neither a science nor an art. It is a practice. Peter Drucker Business opportunities are like buses, there s always another one coming. R. Branson Classification of Entrepreneurs A. Based on functional characteristics 1. Innovative entrepreneur: Such entrepreneurs introduce new goods or new methods of production or discover new markets or reorganize the enterprise. E.G.: new product, new ways of product, new markets and reorganize the enterprise. 2. Imitative or adoptive entrepreneur: Such entrepreneurs don t innovate; they copy technology or technique of others. E.G.: Chinese mobiles. 3. Fabian entrepreneur: Such entrepreneur display grates situation and scepticism in experimenting with any change in their enterprise. They change only when there is a serious threat to the very Existence of the enterprise. 4. Drone entrepreneurs: Such entrepreneurs are characterized by a diehard conservatism and may even be prepared to suffer the losses. 86 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

88 E.G.: Acc. To MC Kinsey in 2015, million people will be unemployed out of which million people will be Fresher. B. Based on development angle 1. Prime mover: This entrepreneur sets in motion a powerful sequence of development Expansion and diversification of business. E.g.: Ambani 2. Manager: such an entrepreneur doesn t initiate Expansion and its content in just staying in business. 3. Minor innovator: This entrepreneur contributes to economic progress by finding better use for Existing resources. E.g.: minimum wastage maximum production. 4. Satellite: This entrepreneur assumes a suppliers role and slowly move towards a productive enterprise. 5. Local trading: such entrepreneur limits his enterprise to the local market. C. Based on entrepreneurs business 1. Manufacturing 2. Wholesaling 3. Retailing 4. Service D.Based on personality traits 1. The improver: They have unwavering to run these businesses with high integrity and ethics. 2. The advisor: Customer is right and we must do everything to please him because company is built by advisors and advisors become customer focused. 3. The superstar: All depends upon the charisma and on the high energy of the superstar CEO. E.g.: Richard Branson (400 co s/virgin coin), Larry Page (Google), Lt. Steve Jobs (Apple), Ratan Tata (Tata sons). 4. The artists: Are highly creative type, very conscious about business. E.g.: Aamir Khan, Michael Dell (Dell), MC Cormich (EMI). 5. The visionary: Too focused on dreams with little focused on reality. E.g.: Jack Welch (GE), Bill Gates (Microsoft), Kishore Biyani (Future Group), Warren Buffet (Berkshire Hathaway), Sam Walton (Wall Mart). 6. The analyst: More focused on fixing problems in a systematic way. E.g.: Gordon Hore (Intel), Rana Kapur (Yes Bank), Gautam Adani (Adani Groups) 7. The fireball: A business owned and operated by a fireball is full of life, energy and optimism. They have A get it done attitude in a playful manner. E.g.: Malcolm Forbes Forbes magazine 8. The hero: Have an incredible will and ability to lead the world and your business through challenges. 87 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

89 9. The healer: They provide nurturing harmony to their business, they have uncanny abilities to survive and persists inner calm. E.g.: Dr. Bindeshwar Pathak (Sulabh International), Kumar Manglam Birla (Son of L.M Birla). Who is an entrepreneur? He is a person who develops and owns his own enterprise He is a moderate risk taker and works under uncertainty for achieving the goal. He is innovative Convert a situation into opportunity. Exhibits sense of leadership Also exhibits sense of competitiveness Entrepreneurship & Small Business Not every cafe owner/manager or any small business owner is entrepreneurial. However because of the nature of small business the slim margins, the risk of failure, the need for agility it is assumed that successful small business owners have applied some level of entrepreneurship. However, a small cafe which is stable, routine and not growing would not be described as entrepreneurial, even though it may be described as successful. On the other hand a person working in a large organization, for Example, the head office of a chain of cafes may well be entrepreneurial in seeing the opportunity for and implementing a new venture, taking the risks and creating value. An Entrepreneurial Career Entrepreneurship plays an important role in the economic growth and development of nation. It is a purposeful activity includes in initiation, promotion and distribution of wealth and service. An entrepreneur is a critical factor in economic development and an integral part of the socio-economic transformation. It is a risk taking activity and challenging tasks, needs utmost devotion, total commitment and greater sincerity with fullest involvement for his personal growth and personality. The entrepreneurial career is not a one day job nor is it bed of roses. Prosperity and success never come easily. It takes time and needs hard work. Systematic planning and business acumen are required to be a successful entrepreneur. Therefore, before choosing this path one should be very careful in knowing about his own self. This introspection process helps him in knowing about himself. Every person has his own potentiality and resource. How he looks in to this aspect. If the person can understand or identify his inner traits then it helps him choosing the right path for which he should look into his beliefs, faith values etc. For an entrepreneur it is of great importance to know about him on the basis of above mentioned individual consideration. These consideration give him ample scope to face his own self by asking the question Who I am? If he can give meaning answer to this complex question with exemplary courage and utter personal disregard to being exposed, then it helps him in getting a fair idea about himself. On the whole it helps him to making the right decision in choosing the right path for getting involved for deciding the future course of action. This is nothing but a self-identification process. After having being proper identified his strength, weakness and ability, he can make a decision of his choice, whether he will take up entrepreneurship as a career or not. If yes, then in which entrepreneurial area Behaviours and Attitudes Behavioural Characteristics of a Unique Entrepreneur: Drive and energy Self-confidence High initiative and personal responsibility Internal locus of control 88 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

90 Tolerance of ambiguity Low fear of failure Moderate risk taking Long-term involvement Money as a measure not merely an end Use of feedback Continuous pragmatic problem solving Use of resources Self-imposed standards Clear goal setting. The following might be added, which are at least desirable in an entrepreneur: Openness to others and ideas Trustworthiness Ethical practice Personable Reasonable Inspirational Enthusiastic and energetic Able to reflect and learn Self efficacy, a belief in one self and a sense of personal power Flexible behavioral changes in response to learning (as entrepreneurs are, in general, fast learners). Skills/knowledge Entrepreneurship learning can be defined as providing individuals with the knowledge, skills and self-esteem to recognize opportunities overlooked by others and act where others have hesitated. In general, this covers opportunity recognition, marshalling the resources in the face of risk, and initiating a business venture. It also includes instruction in business management processes. Importantly, entrepreneurship is a learning experience that develops or utilizes at least some of the behaviours identified above. Therefore, an entrepreneur potentially needs competencies in the following areas: Innovative thinking or design thinking skills Identify an opportunity Observe and interpret customer needs, desires and preferences Challenge the status quo Research the opportunity Generate ideas relevant to the opportunity Solve problems Integrative thinking skills Collaboration skills Collaborate Build trusting relationships Seek partnerships Look for external opportunities Attract talent Learning skills Learn new knowledge and skills needed to progress idea Reflect to improve idea Reflect to learn from others and self Communication skills Articulate/represent ideas so others see it 89 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

91 Develop and implement a marketing strategy Negotiate Share ideas and information with others Research skills Evaluate idea to test feasibility Test market Gather market data Interpret data People Management skills Develop and maintain team commitment Plan and manage projects Organise others Delegate Lead and manage to allow for entrepreneurial, innovative and flexible behavior. Business management skills Develop implementation plans Market interpretation and knowledge Develop business plans Develop budgets Develop business models Develop pricing structures Monitor business Manage risk Teaching and learning strategies Action learning, simulated project learning and work-based learning are proven strategies for developing an integration of skills, behaviours and attitudes. This is an important aspect of training for entrepreneurialism as such a strategy will inevitably encourage action, self-reliance and build confidence. It is also evident that entrepreneurial skills are not linear they are iterative. As the individual faces a problem, they may need specific skills and knowledge to solve it. Therefore, strategies which permit just-in-time learning are recommended. This might include: Online learning Short courses/seminars On-the-job coaching Two significant attributes of entrepreneurs are their ability to collaborate and communicate in order to make things happen as well as to draw on the skills and talents of others. Therefore, group-based learning strategies are important and specifically develop the underpinning skills of collaboration. This can be through project working in the classroom, on the job or through web-based collaboration. Since the skills people need will be dependent on the context, then a just in time strategy is needed so that skill gaps can be filled quickly as they emerge. For skills and knowledge such as budgeting, business planning, market interpretation and so on, an online learning program may be the most appropriate. As discussed earlier, entrepreneurs often occur within family groups. It may be partly a matter of genetics; however, evidence suggests that there is also a strong element of role modeling. If it is true that the behaviours and skills can be learned by observing others (through experience), then this suggests that practical learning supported by mentors and coaches may be an effective strategy. Fundamentals to Have an Entrepreneurship An entrepreneur baffled with too many questions to starting new venture which are discussed below:- 90 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

92 WHY? - Are you prepared to accept it? Are you prepared to put in hard work for achieving your goal? Do you possess a strong will power to face and overcome the difficulties and setbacks and make the enterprise successful? WHAT Information Needed Prospect & scope of a particular industry or business Technical details Quantum of investment etc. Information about different field about the particular trade Purpose of being the business Responsibilities towards customers, employees, society etc. For marketing of your product be aware of strength and weakness of your product. Factors offering market demand Cost and model of distribution etc. Manufacturing process Plant and machinery Availability of new materials Production costs Manpower Fund requirement of working capital HOW - Implementation Plan Final selection of product Prepare project report Registration Apply to Financial Institutions Provisional Registration Obtain Licenses Apply for shed, Land and Power etc. Arrange your capital Plant Layout Construct shed Obtain utilities Order for NOC Order for raw materials supply etc. Recruitment and training of manpower Arrangements of sales network Trail run/sales promotion technique Introduction of product Some Entrepreneurial Opening in the Service Industry 1. Hospitality Services a) Hotels & Restaurant b) Resort c) Tourist Complex d) Home Delivery 2. Transportation Services a) Water Transportation b) Helicopter Service c) Private Aircraft Service 3. Communication a) Telephone Services 91 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

93 b) Mobile Phone Services c) Postal & Courier Services d) Radio & TV Broadcasting e) Std Booths f) Business Centers 4. Call Centers/BPO s /ITES/MNC s 5. Head Hunting/Placement Services 6. Travel Agencies 7. Beauty, Healthcare & Fitness Establishment 8. Tour Operations 9. Consultancy Services 10. Old Age Homes 11. Photography Services 12. Packaging Services 13. Counseling Services 14. Recreational, Cultural & Sporting Services 15. Social Services 16. Media & Entertainment Services a) Theme Parks b) Video Parlors c) Club/Health Resort/Event Venues d) Pool Parlors 17. Taxation Services 18. Health Related Services 19. Medical & dental Services 20. Real Estate Services a) Renting b) Investment Consultants c) Property Consultant 21. Computer Services: a) Software Implementation Services b) Data Processing Services c) Database Services 22. Market Related Services a) Marketing Consultancy b) Tele Marketing c) Sales Promotion d) New Product Development e) Market Research etc. 23. Distribution Services a) Commission Agent s Services b) Trader Services 92 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

94 c) Retailing Services d) Franchising. 24. Business & Professional Services a) Record Management b) Management Consultancy c) Meeting Facilities d) Office Management e) Fashion Designing 25. Construction Services: a) General Construction Work b) Installation & Assembly Work c) Building completion & Finishing Work Contributions of Entrepreneurs in Service Industry 1) Develop New Markets. Under the modern concept of marketing, markets are people who are willing and able to satisfy their needs. In Economics, this is called effective demand. Entrepreneurs are resourceful and creative. They can create customers or buyers. This makes entrepreneurs different from ordinary businessmen who only perform traditional functions of management like planning, organization, and coordination. 2) Discover New Sources Of Materials. Entrepreneurs are never satisfied with traditional or existing sources of materials. Due to their innovative nature, they persist on discovering new sources of materials to improve their enterprises. In business, those who can develop new sources of materials enjoy a comparative advantage in terms of supply, cost and quality. 3) Mobilize Capital Resources. Entrepreneurs are the organizers and coordinators of the major factors of production, such as land labor and capital. They properly mix these factors of production to create goods and service. Capital resources, from a layman's view, refer to money. However, in economics, capital resources represent machines, buildings, and other physical productive resources. Entrepreneurs have initiative and self-confidence in accumulating and mobilizing capital resources for new business or business expansion. 4) Introduce New Technologies. Aside from being innovators and reasonable risk-takers, entrepreneurs take advantage of business opportunities, and transform these into profits. So, they introduce something new or something different. Such entrepreneurial spirit has greatly contributed to the modernization of economies. Every year, there are new technologies and new products. All of these are intended to satisfy human needs in a more convenient and pleasant way. 5) Create Employment. The biggest employer is the private business sector. Millions of jobs are provided by the factories, service industries, agricultural enterprises, and the numerous small-scale businesses. Number of Establishments by Entrepreneurs in Service Industry With regard to the breakdown of the number of establishments (2,126 thousands) by classification of medium industry, the highest figure is 420 thousand (19.7% of the whole service industry), held by "General Eating and Drinking Places", followed by 398 thousand (18.7% of the whole service industry) held by "Laundry, beauty and bath services", and 254 thousand (12.0% of the whole service industry) held by "Real estate lessors and managers". The 3 largest industries make up 50.4% of the whole service industry. 93 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

95 Compared to the composition ratio of 1999, "Social insurance and social welfare" rose 0.9 points. In contrast, "General eating and drinking places" decreased 0.9 points etc. The Importance of Entrepreneurship to Hospitality, Leisure, Sport and Tourism An entrepreneurial approach is just as relevant and important in hospitality, leisure, sport and tourism as in other sectors, if not more so. The hospitality, leisure, sports and tourism industries can be regarded as archetypal entrepreneurial industries employing approximately 10% of UK employment in 2010 in over 160,000 food service outlets, 26,000 guest houses, 3,000 health and fitness clubs, 15,000 hotels, 3,000 health and fitness clubs, 6,800 visitor attractions, ranging from gardens to local museums and many other types of outlet, according to Mintel. The vast majority of these are small independent owner-managed businesses with outlets which opened having taken advantage of low barriers to entry. They tend to be highly flexible to changing customer demands and offer personal and localised service. This is typified in the sports and exercise industry where many small businesses offer coaching and fitness services. These small businesses are the fabric of local society. The hospitality, leisure, sports and tourism industries are areas where discussions related to change, development, innovation and management are increasingly being couched in terms of entrepreneurship. Entrepreneurship is a driver of change, innovation and employment in these industries and is crucial to meeting the rapidly changing demands of hospitality, leisure, sports and tourism consumers. Within established businesses the concept of intra preneurship is key to enabling new markets to be developed for these changing consumer demands and to facilitate new concept development. Rob Bailey (Senior Manager, KPMG - Tourism and Leisure Advisory Services) supports this view stating that: Entrepreneurship is critical to the hospitality, leisure, sports and tourism sectors, as with rapidly changing consumer demands and expectations, constant innovation by businesses is vital to meet and, hopefully, exceed these evolving demands and expectations. Entrepreneurship is an important force behind success in any service industry. This is particularly so in the dynamic and rapidly evolving hospitality, leisure, sport and tourism industries throughout the world. These entrepreneurial industries are major contributors to national economies and their growth, and are guaranteed to grow both in terms of their quantity and quality. There are challenges though related to reaching growth targets and these relate to capacity, availability and skills of the workforce, Entrepreneurial activities generally develop newly combined means of production, new products, new markets, new methods of manufacturing or distribution, new sources of material, or new forms of organization (Schumpeter). Hence, entrepreneurship is necessary for overcoming these challenges in these industries and in achieving this; the outcomes are the various forms of innovation. For businesses innovation has the potential to boost productivity and increase the ability to price discriminate and enhance profits. Entrepreneurship then, is key to gaining competitive advantage and, as a result, greater financial rewards. Entrepreneurship and innovation in these industries would therefore seem key contributors to economic development, not only in the UK but elsewhere, as the following quotes demonstrate: The role of entrepreneurship plays in African economies and society particularly in the hospitality, tourism, sport and leisure industries, is enormous and cannot be over-emphasized in the provision of employment, wealth creation and in terms of innovation. The primary goal of entrepreneurship is profitability and growth... Unique touches and experiences that wow is becoming tomorrow s expectations in the hospitality industry. Marriott and other leading brands are competing in a global market. Entrepreneurship in the development of new concepts and initiatives to gain a competitive edge is a key strategy as companies realign their brand vision and identity. Whether it is Marriott with their new bedding package, high speed wireless internet packages, new pre-arrival concierge service, or simply state of the art design at entrepreneur Ian Schrager s hotels, providing a unique experience will set the company apart from the rest. 94 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

96 Often, external consultants are employed to advise businesses on entrepreneurial ideas and activities: In many cases, our tourism and leisure sector clients engage us to provide innovation, creative thinking and problem-solving to assist them in optimizing the financial performance of their businesses. We are also engaged by clients to provide a 'sense check' of their entrepreneurial ideas, some of which may at first glance appear 'risky' commercially, but upon closer examination have significant potential. While having its economic benefits, entrepreneurship in the hospitality, leisure, sport and tourism industries can also prove hugely beneficial in social terms, as the following indicates: Much in the same way that men of science have pushed back the boundaries of our physical world, entrepreneurs, in the hospitality and leisure industries, have influenced and pushed back the boundaries of our social world; for example, imagine not being able to take a low cost flight, stay in a budget hotel, or eat a cheap meal. Entrepreneurs are the life blood of the hospitality and leisure industries, trail blazers who take calculated risks, not unnecessary ones, to bring to the masses something new and unique, adding interest and colour to our lives. As an entrepreneur, there is a need to be aware of your environment, and above all, you must have strength in your convictions and the courage to follow them through. You need to be pragmatic; willing to lead by example, and able to recognise in others, traits that complement your own weaknesses. Essentially an entrepreneur is an individual with vision, someone who works hard and has the courage to try something new - even if it means failing Social entrepreneurship is an important aspect of entrepreneurship in the hospitality and related industries. Catering and tourist attractions are often important elements of economic development and regeneration initiatives. The revitalisation of inner cities is often linked with, and heavily reliant upon, ethnic minority entrepreneurship which has traditionally been concentrated in the catering, retailing and clothing industries, but is increasingly associated with the emergent industrial sectors. There are also many unrecognized social entrepreneurs delivering public services through an enterprise expansionary lunch clubs and fitness and wellbeing classes. In conclusion, an awareness of the importance of entrepreneurship in hospitality, leisure, sport and tourism is not new, with evidence of entrepreneurial activity in these industries centuries ago. However, interest in entrepreneurship has heightened more recently as its importance has become increasingly recognized. Entrepreneurship has become the battle-cry of recent UK and other governments in their pursuit of a variety of economic, social and other objectives. Thus, entrepreneurship is often seen as an economic function. But as Ball suggests, it is also viewed as a way of explaining business ownership and organizational structure, a means of improving social and individual well-being, a means of analysis of industry structure, a rationale for government policy, and an approach to education. Recent emphasis on entrepreneurship has been coupled with developments in education and teaching. The growth and diversity of the hospitality, leisure, tourism and sports industries along with increases in consumer expectations of their leisure time and experiences has placed greater demands on providers. How to Become a Service Industry Leader Here are five steps that can allow anyone to develop a reputation as a Service industry leader: 1) Think like a leader For entrepreneurs, this might go without saying, but your life and business will change the moment you begin to think like a leader. Leaders aren't focused on trying to maintain the status quo. They're focused on doing what must be done to ensure growth and profitability in the future, which is not an easy road to take. 95 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

97 2) Innovate New things get noticed. This means you can't be afraid to present something new to your market, even if it's just a variation or an addition to an already-existing product or service. Simply innovating doesn't guarantee success, but you'll learn far more from the risks you take than by maintaining the status quo. 3) Respect your time Being an authority doesn't mean you must solve everyone's problems. Your main responsibility is to continue growing, innovating and sharing your knowledge. Don't allow people to suck up all your time with their questions or problems. Learn to say "no" more often. Yes, you want to assist people, but not at the expense of losing your edge or slowing down your innovation. 4) Develop your intuition The most successful leaders I know have learned to "trust their gut." But this doesn't happen overnight. It takes practice to learn when it's your gut talking or when it's just fear or pride. Your business life requires you to make difficult decision and sacrifices. Just remember that your intuition should get a vote, too. It's not always about numbers and statistics. 5) Keep learning Industry leaders are students of their craft. Study the great success and failures of your industry. Also learn from people outside of your industry to see which principles are transferable to what you're doing. The phrase "never stop learning" is nothing new, but are you really practicing it? Indian Service Industry in Present Scenario The service industry forms the backbone of social and economic development of a country. It has emerged as the largest and fastest-growing sectors in the world economy. The service sector has shown a growth rate higher than that of agriculture and manufacturing sectors. This sector covers a wide range of activities, such as trading, transportation, communication, financial, real estate and business services. In India, the services sector, as a whole, contributed as much as 68.6 per cent of the overall average growth in gross domestic product (GDP) in the year 2010.The most important services in the Indian economy have been in the health and education sectors. These are one of the largest and most challenging sectors and hold a key to the country s overall progress. A strong and well-defined health care sector helps to build a healthy and productive workforce. The era of economic liberalization has ushered in a rapid change in the service industry. As a result, over the years, India has been witnessing a transition from agriculture-based economy to a knowledge-based economy. The knowledge economy creates, disseminates, and uses knowledge to enhance its growth and development. One of the major functional pillars of this economy is Information Technology (IT) and IT-enabled services (ITES) industry. IT continues to be a dominating sector in the overall growth of the Indian industry. Another major and upcoming sector is retail. It has been one of the fastest growing sectors both in terms of turnover and employment. Many national and global players have been investing in the retail segment and making all out efforts to further expand the sector. The service sector holds immense potential to accelerate the growth of the economy and promote general well-being of the people. Role of Entrepreneurs in the Service Industries Entrepreneurial activity and innovation in the service industries may take many forms. It typically involves any of the following: Starting a new enterprise in a new context; Creating a new business model for an enterprise; Creating new services, products to be offered to customers; Creating a new customer Experience; 96 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

98 Creating new workplace strategies; Hotels introducing quicker check-in and check-out technologies; Creating new marketing strategies, and so on. Increasingly service industry innovation is not just about more effective and productive products, processes and services it is also about ways to create competitive advantage through enhancing the whole customer experience. For instance, a hairdresser salon may offer foot massages and pizza, or a fitness studio may team up with a health food shop to create cross-patronage. Therefore, an entrepreneur in the service industries not only needs skills and behaviours to help think through ideas, but most particularly needs to be externally focused to look for collaborative opportunities as well as internal innovations. Successful Entrepreneurs in the Service Industry I. REAL ESTATE INDUSTRY Real Estate is mainly concerned with landed properties with or without building or is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location. Industry Overview According to economist, developed economies asset at the end of 2011 totaled $ 112 trillion of which real estate comprised of 60% Types of Entrepreneurial Opportunities in Real Estate There are many types of entrepreneurial opportunities. While the most visible and the most glamorous is definitely the Developer stream where one actually constructs an apartment complex, a high-rise or a township or even bungalows; real estate entrepreneurship in India has many other aspects too. There is definitely another opportunity as a Real Estate Consultant whereby one helps customers find the best properties in a particular area. Then, there are great opportunities in the construction line - as an expert, as a contractor as a service provider. There is also scope for a Quality Materials Provider - such as raw materials required for building construction. Other entrepreneurial opportunities exist in the Allied Industries such as furniture, utilities, maintenance business, security etc. Clearly there are loads of opportunities. No wonder Real Estate in India contributes more than 12% to the GDP as per the 2010 data. 97 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

99 Post Scenario - Implications on Real Estate Industry In Post Scenario it is truly a turning point in Real Estate industry. In 1991, the Indian government liberalized the economy, thus changing the competitive landscape of real estate industry. Family businesses in the traditional real e, which dominated Indian markets, now faced competition from multinationals that had modern techniques, superior technology, financial strength and deeper managerial resources. Thus, Real estate Indian businesses had to change their approach and rethink their outlook outward. A few existing Indian business families adapted to the new economic policy while others struggled. However, there emerged a new and savvy generation who thought very big and had big dreams. This generation transformed the industry like never before and has led to growth of huge new cities like Gurgaon, Navi Mumbai, New Pune, Bengaluru, Chennai etc Huge Opportunities Even today, with the growth of the Indian Middle class and the rise in surplus incomes, there are huge opportunities in the Real Estate Industry. In our opinion, Real Estate sector and its financing will keep growing overall and will try newer and modern ways to make a sale to buyers. A good number of entrepreneurs can seize them and grow from small-scale contractors to large real estate developers and from distributors to manufacturers. Success will come as a result of efficient capital allocation, strong execution and a customer orientation. The key will be to persevere with ideals and overcome the present day challenges in a moral manner within the confines of the law. II. TRAVEL & TOURISM INDUSTRY The UNWTO (United Nations World Tourism Organization) defines the Travel and Tourism (T&T) Sector as the activities of persons traveling to and staying in places outside their usual environment at least for twenty four hours or for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited (Ankur Bhatia- Executive Director, Bird Group) Company Profile The Bird Group was founded in 1971 with the incorporation of Bird Travels. Today, with over 40 years of experience and more than 40 offices supported by over 5000 well trained staff and an impressive clientele of over 500 top corporate, Bird Group can claim to be one of the largest and most diversified entities within the 98 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

100 industry in the Indian subcontinent. Today Bird Group s core business includes Travel Technology, Aviation Services, Hospitality, Retail and Education. Together, the various companies within these verticals generate direct revenue in excess of USD 150 Million. The heart of the Bird Group s phenomenal success story lies the flagship vertical of the Group, Bird Travels Pvt. Ltd that represents airlines and other travel and tourism partners as GSA operations, aviation management arm for airlines, travel and tourism advisors and much more. Achievements Ankur Bhatia honoured as Leading Entrepreneur of Travel & Tourism Industry by Amity Institute New Delhi, September 30, 2011: Ankur Bhatia, Executive Director, Bird Group was recently honoured as the Leading Entrepreneur of Travel & Tourism Industry by Amity Institute of Travel and Tourism, during an award ceremony held as a part of their World Tourism Day celebrations, at their campus in Noida. On receiving the honor Ankur Bhatia said, I am extremely grateful to have received this honour. I thank Amity Institute for this gesture and their constant effort in generating a huge interest for travel and tourism, amongst their students. We at Bird Group believe that Indian travel and tourism industry has a huge potential to meet global standards of excellence. We therefore work towards being responsive to the needs of our customers and partners to change the face of the Indian tourism industry. We always encourage and nurture young talent who wish to serve this industry and earnestly hope that we will be successful in our mission someday. General Service for Airlines Bird Travel the founder company of The Bird Group is a pioneer in Travel Industry. Bird Travel represents the world s renowned international Airlines like Air China, Brussels Airlines, Finnair, Hahn Air, Hong Kong Airlines, Hong Kong Express, Iceland air, Oman Air, Safi Airways, Regent Airways to name a few. Bird Group provides the most comprehensive portfolio of aviation services comprising aircraft navigation, ground handling, customer management, logistics, ticketing, cargo management and baggage handling at India's three busiest airports New Delhi (state-of-the-art Terminal 3), Bengaluru and Kochi General Service for Cruises Bird Travel is present from skies to sea they bring a revolution in cruise line also. They bring luxury and style together. They are proud to represent Silversea and Tallink Silja line. III. HOSPITALITY INDUSTRY The hospitality industry is a broad category of fields within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, housekeepers, porters, kitchen workers, bartenders, etc.), management, marketing, and human resources. 99 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

101 (Priya Paul - Chairperson of Apeejay Surrendra Park Hotels) Company Profile Priya Paul (born 1967), is a prominent woman entrepreneur of India, and currently the Chairperson of Apeejay Surrendra Park Hotels. Presently, the Park Hotel is located in New Delhi, Kolkata, Chennai, Bangalore, Navi Mumbai, Visakhapatnam and Kerala. Career She joined the company, after finishing her studies in Bihar public school at the Wellesley College (US) working under her father, as Marketing Manager at the Park Hotel, Delhi, at the age of 22. After the death of Surrendra Paul, she succeeded him in 1990 as the Chairperson of the Hospitality Division of the Apeejay Surendra Group.. The Apeejay Surrendra Group has many different subsidiaries such as hotel, tea, retail, shipping, financial services and real estate. Priya is also Vice-President, the Hotel Association of India, and a founder member of World Travel Tourism Council (Asia chapter). Then, she's a member of the Young Presidents Organization, a member of the PATA Environment and Eco-tourism Committee and a trustee of India Foundation of the Arts. Contributions in the Field of Hospitality Industry The Federation of Hotels and Restaurants Association of India conferred on her Young Entrepreneur of the Year award She was nominated for The Economic Times Awards as the Businessperson of the year Tatler magazine rated The Park (Bangalore, India), a part of her Group, as one of the 101 best Hotels worldwide. Priya Paul has been conferred with Padma Sri Award by Govt of India on eve of the Republic Day, January I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

102 IV.MEDIA & ENTERTAINMENT SERVICES (Ekta Kapoor- Joint Managing Director and Creative Director of Balaji Telefilms) Company Profile Ekta Kapoor is an Indian TV and film producer. She is the Joint Managing Director and Creative Director of Balaji Telefilms, her production company. Balaji Telefilms has produced a number of famous serials in India and has become the largest television production house in South Asia, Southeast Asia and the Middle East. Career Ekta Kapoor is the woman who single-handedly founded and made Balaji Telefilms the household name it is today. This baby-faced teenager, who once dreamed of marrying and settling down just like any other woman in India, is the creative head of Balaji Telefilms and counted as one of the top 10 women entrepreneurs of today. Her production house has many hit serials to its credit Kyunki Saas Bhi Kabhi Bahu Thi, Kahani Ghar Ghar Ki and many others, making her the Queen Bee of the Indian soap opera scene. She has won the Hall of Fame award at the 6th Indian Telly Awards during 2006 for her contribution to the Indian television industry. Known to be fiercely protective of her company and brand, Ekta is also very professional and has strong business acumen. Ekta Kapoor has produced several TV serials, most of which aired on her first network STAR Plus. Some of her other productions air on Zee TV, Sony Entertainment Television and Colors TV. Awards and Honors Indian Television Academy Awards Indian Television Academy Awards Indian Telly Awards 101 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

103 2010 3rd Boroplus Gold Awards New Talent Awards Apsara Awards BIG Star Entertainment Awards 2012 GR8! Women Awards (Most Successful Woman Entrepreneur) V. BEAUTY & HEALTH CARE SERVICE INDUSTRY (Shahnaz Husain - CEO of Shahnaz Herbals Inc.) Company Profile The Shahnaz Husain Group is India's leading company in the field of natural beauty and anti-aging treatments. Started in the 1970s by Shahnaz Husain in New Delhi, the group has over time vertically integrated to encompass every aspect of Ayurvedic care and cure. The group has activities as diverse as beauty training institutes, growing of its own herbs to manufacturing of its cosmetics line to retail to specialized treatments through its chain of over 200 beauty centers worldwide. The group has received many an accolade, the most recent of which was when it's Chairperson, Shahnaz Husain, won India's highest honor, the Padma Shree, in the field of Industry and trade for bringing Ayurveda to the West. In 1996 Success Magazine, one of the world s most well-respected business publications, named Shahnaz Husain the Woman of the Year and estimated the brand's worth at over $100 million. This number has grown many times since then. The Shahnaz Husain Group has over 400 franchise clinics across the world covering over 138 countries. Shahnaz Husain Group of Companies was founded in 1970 and is based in New Delhi, India 102 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

104 The company also operates a chain saloons, training institutes, and spas products for skin, hair, and body care. The company s training institutes provide courses in skin and beauty therapy, and short-term vocational courses. It offers its products through its stores, and international distributors. Awards and Honors Success Magazine's "World's Greatest Woman Entrepreneur" award She was awarded the Padma Shri as well A civilian award by the Government of India (1) Problem of raw materials: Barriers to Entrepreneurship A major problem that the small entrepreneurs face is the procurement of raw materials. They have to confront with numerous problems like; i. Availability of inadequate quantity ii. Poor quality of materials iii. High cost of raw materials etc All these factors adversely affect the proper functioning of small units. (2) Problem of finance: Finance is one of the most important problems faced by small entrepreneurs. As finance is the life blood of a business organization and no business organization can function properly in the absence of adequate funds. The problem of finance in small sector is mainly due to two reasons i.e. (i) Scarcity of capital in the country as a whole. (ii) Weal credit-worthiness of small units in the country. Due to their weak economic base, they find it difficult to take financial assistance from the commercial banks and financial institutions. Therefore, small entrepreneurs have to obtain credit from the money lenders on a very high rate of interest. (3) Problem of marketing: One of the major problems faced by small entrepreneurs is in the field of marketing. They are not in a position to get first hand information about the market i.e. information about completion, taste, liking disliking of consumers. Therefore, they are not able to upgrade their products according to the changing business environment. These small units often do not process any marketing organization. As a consequence, their product quality compares unfavourably with the quality of the products of the large scale industries. Therefore, these industries suffer from a comparative disadvantage as compared to large scale industries. (4) Problem of under utilization of capacity: Most of the small entrepreneurs are suffering from the problem of under utilization of capacity. Small scale units are making only 40 to 50 percent use of their installed capacities due to various reasons such as shortage of finance, raw-materials, power and under-developed markets for their products. 103 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

105 (5) Outdated technology: Most of the small entrepreneurs depend upon old techniques and equipment. These units find it very difficult to modernize their plant and machinery due to limited capacity and capital. He quality of products and productivity tend be low in the absence of modern technology and that too at higher cost. They are in no position to complete with their better equipped rivals operating modern large scale units. For example, Khaki products even after government subsidy seem to be costlier. (6) Poor project planning: Poor project planning is another problem faced by small entrepreneurs. In the absence of education and experience, these entrepreneurs do not attach much significance to viability studies. They do not bother to study the demand aspect, marketing problems, sources of raw materials. Inexperienced and incompetent entrepreneurs often submit unrealistic feasibility reports and incomplete documents which invariably result in delays in completing promotional formalities. They cannot afford to avail services of project consultants due to limited financial resources. (7) Inadequate infrastructure: Insufficient quality and quantity of transportation, communication and other basic services particularly in backward areas is another problem. Inadequate infrastructure results in under utilization of capacity and wastages. Inadequate infrastructures also adversely affect the quality, quantity and production schedule of the enterprises operating in these areas. Therefore, their functioning will become uneconomical and unviable. (8) Problem of skilled manpower: A small entrepreneur located in backward area may not have problem of unskilled workers but it may be exposed to the problem of non-availability of skilled workers. Skilled workers may be reluctant to work in their areas and small scale enterprise may not afford to pay the wages and other facilities demanded by these persons. Unavailability of skilled manpower result in lower productivity, deterioration of quality, increase in wastages, rise in other overhead costs and finally adverse impact on the profitability of these small scale units. (9) Managerial problem: Another serious problem for small scale units is managerial inadequacies. Modern business demands vision, knowledge, skill, aptitude and whole hearted devotion. The managerial competence of the entrepreneur is very important for the success of any venture. An entrepreneur is required to undergo training and counselling for developing his organization revolves. Therefore, he must be fully conversant with all aspects of management. Lack of proper commitment and managerial skill will add to the problems of entrepreneurs. (10) Other problems: In addition to above discussed problems, the small scale industries have been constrained by a number of other problems such as trained technicians, technological obsolescence, unorganized The Role of Government in Supporting Entrepreneurship Small and Medium-sized Enterprises (SMEs) in market economies are the engine of economic development. Owing to their private ownership, entrepreneurial spirit, their flexibility and adaptability as well as their potential to react to challenges and changing environments, SMEs contribute to sustainable growth and employment generation in a significant manner. 104 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

106 SMEs have strategic importance for each national economy due a wide range of reasons. Logically, the government shows such an interest in supporting entrepreneurship and SMEs. There is no simpler way to create new job positions, increasing GDP and rising standard of population than supporting entrepreneurship and encouraging and supporting people who dare to start their own business. Every surviving and successful business means new jobs and growth of GDP. Therefore, designing a comprehensive, coherent and consistent approach of Council of Ministers and entity governments to entrepreneurship and SMEs in the form of government support strategy to entrepreneurship and SMEs is an absolute priority. A comprehensive government approach to entrepreneurship and SMEs would provide for a full coordination of activities of numerous governmental institutions (chambers of commerce, employment bureaus, etc.) and NGOs dealing with entrepreneurship and SMEs. With no pretension of defining the role of government in supporting entrepreneurship and SMEs, we believe that apart from designing a comprehensive entrepreneurship and SMEs strategy, the development of national SME support institutions and networks is one of key condition for success. There are no doubts that governments should create different types of support institutions: i) To provide information on regulations, standards, taxation, customs duties, marketing issues; ii) To advise on business planning, marketing and accountancy, quality control and assurance; iii) To create incubator units providing the space and infrastructure for business beginners and innovative companies, and helping them to solve technological problems, and to search for know-how and promote innovation; and iv) To help in looking for partners in order to stimulate entrepreneurship and improve the business environment for small enterprises. Training Basic training differs from product to product but will necessary involve sharpening of entrepreneurial skills. Need based technical training is provided by the Govt. & State Govt. technical Institutions. Marketing Assistance There are Governmental and non-governmental specialized agencies which provide marketing assistance. Besides promotion of MSME products through exhibitions, NSIC directly market the MSME produce in the domestic and overseas market. NSIC also manages a single point registration scheme for manufacturers for Govt. purchase. Units registered under this scheme get the benefits of free tender documents and exemption from earnest money deposit and performance guarantee. Promotional Schemes Government accords the highest preference to development of MSME by framing and implementing suitable policies and promotional schemes. Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate infrastructure, special schemes have been designed for specific purposes like quality up - gradation, common facilities, entrepreneurship development and consultancy services at nominal charges. Government of India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO 9000 certification to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in each case. ISO 9000 is a mechanism to facilitate adoption of consistent management practices and production technique as decided by the entrepreneur himself. This facilitates achievement of desired level of quality while keeping check on production process and management of the enterprise. 105 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

107 Concession on Excise Duty MSME units with a turnover of Rs. 1 crore or less per year have been exempted from payment of excise Duty. Moreover there is a general scheme of excise exemption for MSME brought out by the Ministry of Finance which covers most of the items. Under this, units having turnover of less than Rs. 3 crores are eligible for concessional rate of excise Duty. Moreover, there is an exemption from excise Duty for MSME units producing branded goods in rural areas Credit Facility to MSME Credit to micro, small and medium scale sector has been covered under priority sector lending by banks. Small Industries Development Bank of India (SIDBI) has been established as the apex institution for financing the MSME. Specific schemes have been designed for implementation through SIDBI, SFCs, Scheduled Banks, SIDCs and NSIC etc. Policies and Schemes for Promotion of MSME Implemented By State Governments All the State Governments provide technical and other support services to small units through their Directorates of Industries, and District Industries Centres. Although the details of the scheme vary from state to state, the following are the common areas of support. 1. Development and management of industrial estates 2. Suspension/deferment of Sales Tax 3. Power subsidies 4. Capital investment subsidies for new units set up in a particular district 5. Seed Capital/Margin Money Assistance Scheme 6. Priority in allotment of power connection, water connection. 7. Consultancy and technical support Government of India runs a scheme for giving National Awards to micro, small and medium scale entrepreneurs providing quality products in 11 selected industry groups of consumer interest. The winners are given trophy, certificate and a cash price of Rs /- each. Conclusion Thus, at the end it is concluded that an entrepreneur is the backbone of service industry. Beyond business management and planning, entrepreneur skills cannot be developed. The young entrepreneur should be motivated to come out with determination to do something of their own and also to contribute to the national income and wealth in the economy. The renewed interest in the development of entrepreneurship to take up new venture should emphasize on the integrated approach. The developments of entrepreneurship will optimize the use of the unexploited resources; generate self-employment and a self sufficient economy. Government accords the highest preference to development of MSME by framing and implementing suitable policies and promotional schemes like policies and promotional schemes, providing incentives for quality up gradation, concession on excise duty and provides technical supportive services. Thus Government play supportive role in developing entrepreneurs. In addition, a workforce development program may be required which provides the support, network, technical skills, market information, opportunities for innovation and collaboration to entrepreneurs in the service industries. Thus, entrepreneurs are not born, they are created. 106 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

108 Bibliography: V.K Puri, JBA Publishers Service Industry Management by ITFT, I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

109 CHAPTER 6 COMMUNITY APPROACH TO TOURISM INDUSTRY DEVELOPMENT Introduction India is believed to be one of the top most tourism spot from , having the highest ten year growth potential, according to the World Travel and Tourism Council (WTTC). The country's travel and tourism industry is one of the most profitable industries in the country, and is credited with contributing a substantial amount of foreign exchange. Indian tourism offers a potpourri of different cultures, traditions, festivals, and places of interest. India was ranked fifth in the world for hotels with the best business outlook, according to a report by Trip Advisor. The country showed optimism with the highest proportion of businesses in Asia-Pacific (APAC) region. It displayed unbridled optimism with the highest proportion of businesses in APAC that expect the economy to improve in the second half of India was also ranked highest globally, among all countries surveyed for staff turnover, based on increased staff levels. Moreover, India has also emerged as one of the world's most cost-efficient medical tourism destinations. Medical tourism in the country is a sunrise sector valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year. It is expected that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during , according to a RNCOS report titled 'Booming Medical Tourism in India'. Hotels are an important component of the tourism product. They contribute in the overall tourism experience through the standards of facilities and services offered by them. Market Size Foreign Exchange Earnings (FEEs) from Tourism during the year 2012 showed an increase of 21.8% as compared to FEEs of Foreign Tourist Arrivals ( FTAs) in the country also registered an increase of 5.4% during the year 2012 as compared to FTAs of FEEs from tourism in rupee terms during 2012 were Rs.94,487 crore with a growth of 21.8% as compared to the FEEs of Rs.77,591 crore with a growth of 19.6% during the year 2011 over FTAs in India during 2012 were lakh with a growth of 5.4% as compared to the FTAs of lakh during the year The overall hotel rates in India registered an increase of 12 per cent during the first six months of the year. This was due to a surge in demand from domestic travellers, as per the latest Hotels Price Index (HPI) study conducted by Hotels.com. The index looks at prices that people paid for their hotel rooms around the world. India's rich cultural heritage and history, food, friendly people, architectural monuments, hospitality and services are positive strengths for its tourism sector, which make it ahead of many of the emerging markets. Today, tourism is the most vibrant tertiary sectors and has a strong hold on the economy. Tourism contributes 6.23 percent to the national gross domestic product (GDP) and 8.78 per cent of the total employment in India. The World Travel and Tourism Council (WTTC) named India along with China as one of the fastest growing tourism industries for the next 10 to 15 years. On the other front, India has potential to develop the rural tourism industry. This can benefit the local community economically and socially, and enable interaction between tourists and locals for a mutually enriching experience. Community based Tourism A community by definition implies individuals with some kind of collective responsibility, and the ability to make decisions by representative bodies. 108 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

110 Community Based Approach in Tourism: Community based tourism is tourism in which local residents (often rural, poor and economically marginalized) invite tourists to visit their communities with the provision of overnight accommodation. The residents earn income as land managers, entrepreneurs, service and produce providers, and employees. At least part of the tourist income is set aside for projects which provide benefits to the community as a whole. "CBT is tourism that takes environmental, social, and cultural sustainability into account. It is managed and owned by the community, for the community, with the purpose of enabling visitors to increase their awareness and learn about the community and local ways of life". Community based tourism enables tourists to discover local habitats and wildlife, and celebrates and respects traditional cultures, rituals and wisdom. The community will be aware of the commercial and social value placed on their natural and cultural heritage through tourism, and this will foster community based conservation of these resources. Nature lovers can visit wild areas accompanied by a local guide who explains the traditional uses of the plants and local forest lore, transmitting experience rather than mere information. Community-based tourism affords travelers with rare opportunities to experience local communities first hand. It's distinctive in that it provides an alternative to development that's not sustainable, giving rural and poor communities an additional source of income. In supporting community-based tourism, you can immerse yourself in the day-to-day lives of local and indigenous people while helping them to preserve their environment and cultural heritage. The residents earn income as land managers, entrepreneurs, service and produce providers, and employees. At least part of the tourist income is set aside for projects which provide benefits to the community as a whole. Tourists will spend time near areas that are rich in culture and biodiversity, and, at the same time, will get to know the locals at the grassroots level. Many successful experiences in development countries prove that tourism can become a leading sector for the people who conserve natural resources and live on it. Local people of these countries jointly cooperate in Community Based Tourism and this gives not only economic benefits for them but also becomes an example of community involved decision making. A community by definition implies individuals with some kind of collective responsibility, and the ability to make decisions by representative bodies. Locals participation, traditional culture, cross-cultural issues and raise of local income are basic principles of tourism and it is fundamental to get more in depth for development countries where tourism is dominantly operate by great foreign companies. Usually families interviews make obvious that locals are interested to take part in tourism activities but they don t know how. Often the creation of Community Based Tourism is the best solution for local people or at least a great help for them for example in these countries where the main income is from livestock and the desertification, the spread of unproductive land deprived of vegetation, is one of the main concerns (like in Mongolia). Community Based Tourism is the jointly planned and managed tourism activities of local group: this new business never can be the main or only income source of the communities and cooperatives but can be additional income possibility. Issues like generating additional incomes for locals and reducing impacts on environment are included in the government policy about tourism, but there has been little implementation and no integrated policy at the national level. Objective: Develop tourism as a stimulus of the economy to generate income through sustainable use of natural resources by organizing local people and joint implementation; Develop new travel products that are efficient for locals and friendly for the environment, society and civilization; 109 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

111 Develop an integrated network of local cooperatives that act independently to preserve geographic and cultural features of various ethnicity Outputs: Local would be able to generate additional income other than animal husbandry through participating in the travel activities Locals interests to conserve their living environment will be increased; A system to sell geographically and culturally different groups and cooperatives products as one integrated product will be established Cooperation of rural development and sustainable natural resource management projects of the international organizations and donors countries can provide these travel products future stability The six characteristics that define rural community tourism are that it: 1- Integrates natural beauty and the daily life of rural communities 2- Promotes productive sustainable practices within its tourism offerings 3- Adapts itself to the dynamics of rural life and preserves the welcoming, relaxed, rustic atmosphere that characterizes the rural areas of the country. 4- Is maintained by local initiative and participation, and strengthens local organizations, which are made up of various families or of the community as a whole. 5- Integrates the locals in this economic activity, distributes the benefits evenhandedly, and supplements farming income. 6- Promotes land ownership by the local population. Principles of CBT:- The principles listed below present the concept of CBT, and the way the host Community can use tourism as a tool for community development. CBT should: 1. Recognize, support and promote community ownership of tourism; 2. Involve community members from the start in every aspect; 3. Promote community pride; 4. Improve the quality of life; 5. Ensure environmental sustainability; 6. Preserve the unique character and culture of the local area; 7. Foster cross-cultural learning; 8. Respect cultural differences and human dignity; 9. Distribute benefits fairly among community members; 10. Contribute a fixed percentage of income to community projects; Before developing CBT in line with these principles, it is necessary to prepare and build the capacity of the host community to manage tourism. CBT marketing should also promote public awareness of the differences between CBT and mass tourism, educating people to realize the importance of CBT as a community tool for resource conservation and cultural preservation. This will attract appropriate tourists for CBT. Tourism in which the community plays a role goes by a great variety of names: 'Community Based Tourism' (CBT), 'Community Based Ecotourism'(CBET), 'Agro tourism', 'Eco' and 'Adventure Tourism' and 'Home stay' are a few of the prominent terms. Among academics worldwide, there is not yetany consensus on terms for various types of tourism. In recent years, Ecotourism has become popular worldwide. Meanwhile, the principle of active community participation in tourism has gained wider acceptance. The United Nations declared 2002 the "International Year ofecotourism". This fortunate and opportune rise in the international profile of Ecotourism nevertheless gave rise to yet another new term: Community Based Ecotourism (CBET)! 110 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

112 The following are the key elements of CBT: Natural and Cultural Resources Natural resources are well preserved Local economy and modes of production depend on the sustainable use of natural resources Customs and culture are unique to the destination Community Organizations The Community shares consciousness, norms and ideology The Community has elders who hold local traditional knowledge and wisdom. The Community has a sense of ownership and wants to participate in its own development Management The Community has rules and regulations for environmental, cultural,and tourism management. A local organization or mechanism exists to manage tourism with the ability to link tourism and community development. Benefits are fairly distributed to all. A percentage of profits from tourism is contributed to a community fund for economic and social development of the community. Learning Tourism activities and services aim at: Fostering a shared learning process between hosts and guests. Educating and building understanding of diverse cultures and ways of life. Raising awareness of natural and cultural conservation among tourists and the local community. Terms and Definitions for Types of Tourism Similar to CBT :- Ecotourism:- 'Ecotourism' is 'Responsible Travel' in areas containing natural resources that possess endemic characteristics and cultural or historical resources that are integrated into the area's ecological system. Its purpose is to create awareness among all concerned parties of the need for and the measures used to conserve ecosystems and as such are oriented towards community participation as well as the provision of a joint learning experience in sustainable tourism and environmental management." Elements of Ecotourism: Ecotourism considers the following key elements: Site The destination has natural attractions and unique qualities Management Tourism is sustainably managed. Environmental responsibility is promoted. Negative environmental impacts are minimized. Process and Activities Visitors are educated about the environment and ecology of the site. Environmental awareness is raised among tourists and stakeholders. Participation The local community participates in the process. Income is distributed fairly to raise the quality of life. 111 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

113 Profits from tourism contribute to the development of the destination. Table 1-1. Ecotourism v. CBT:- Ecotourism CBT 1. Objective: Responsible management of natural attractions, local culture and the unique qualities of the destination. 2. Ownership Unspecified 3. Tourism Management Unspecified 4. Tourism Linkages Responsible management of the environment, natural resources, social system and culture in response to the needs of the community. Community Community Emphasizes holistic development Emphasizes tourism and the environment The clearest difference between CBT and Ecotourism is the issue of ownership Short Visits :- Mass tour programs have featured short visits of a few hours to local communities for quite some time. A typical visit is a couple of hours in an'exotic' hill tribe village in Northern Thailand or a brief look around in a community of semi-nomadic fisherfolk in the South. Another example of a short visit is "agrotourism" that emerged after the crisis of Thai economy in1997. The government promoted short visits that would take tourists to successful and unique farms, for tourists to sample and buy farm produce.some agrotourism destinations later became a part of the "One Tambon (subdistrict)one Product" scheme. Within this situation, short visits are often simply 'arts and crafts' shopping trips that some incorrectly label as "CBT." Table 1-2 CBT v. Short Visits CBT 1. Duration of visit Adequate time for understanding, through observation, activities, and discussion. Short Visits Short time for observation; Little or no time for visitors to participate in local activities. Little or no exchange with the local people to increase cross-cultural understanding. 2. Participation in Community Low Activities High 3. Learning and Cultural Exchange Low High 112 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

114 4. Pricing & Income Set by the community 5. Tourist Understanding of the Community Possible through meaningful observation, The community has little control except in the case of tours that come for the purpose of purchasing local products from the "One Tambon One Product" scheme. Only possible through an outside resource person who has knowledge of the local community and acts as an 'expert' intermediary. conversation and interaction with the community members as the result Of the program design. Homestay Homestay is one type of tourism that promotes interaction between host families and tourists. One of the many accommodation options available to CBT, homestays are able to act as a development tool to raise awareness of cleanliness and hygiene issues within the destination community. The somewhat 'rough and ready' prospect of a homestay also helps to ensure that tourists who visit the community are appropriate for CBT. Organizing a homestay requires minimal investment besides a mattress a pillow, and a mosquito net: items that most rural village homes already have set aside for close friends and family members that come to visit. CBT Homestay 1. Definition Learning comes mostly from the host family Learning comes from the whole community 2. Accommodation Accommodation in the home of a host family. Many types can be arranged including tents, cabins, homestays or guesthouses. 3. Learning Process Possible through interaction with many Depends on the enthusiasm of both visitors and the host family. types of people including host families, local guides and groups that organize activities in the community. 4. Community Benefits Community members of different status can benefit by taking various Often only wealthier households have a chance to provide accommodation and will collect benefits for themselves, except in the 113 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

115 roles in tourism management such as resource persons, guides, hosts. Part case that there are rules ensuring part of the profits are contributed to community projects. of the profits is contributed to community projects. CBT and Community Development CBT is intended as a tool for community development and environmental conservation. For this reason, you should apply a "holistic" view, (i.e., one that encompasses a complete range of social, cultural, economic, environmental and political development factors), to your analysis of the community context. Understanding the community situation will help you maximize the capacity of CBT to act as an effective and sustainable community development strategy. Figure 1.1 Five Principle Aspects of Community Development:- Social Peoplecentered ë Self-relianc Economic Income from local product ion Diversi fied local econom y COMMUNITY Development Social justice Satisfying quality of life Active community organization s Political Community participation Development in response to the community needs Democratization Environmental Natural resource management rights Environmental responsibility Natural resource conservation Cultural Formal and informal education Local culture passed on to the next generation Cultural preservation 114 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

116 Holistic Community Development Rural communities in Thailand have faced many changes since the Thai central government began implementing social and economic development plans in 1961, directing the country towards export oriented production. The impacts of globalized trade and investment on local community development since that time deserve concern and contemplation. Before setting tourism objectives, you should consider the conditions of the relationship between the community and its: natural resources (e.g., rights, conflicts); cultural heritage (e.g., continuity); modernization (e.g., quality of life, consumerism); economic development (e.g., employment and income stability) rights to self-governance (e.g., role of local government, degree of local participation) CBT and community development are inherently connected, because they share the same natural and cultural resource. Culture and social norms determine not only resource use but also structure internal and external relationships. Ideally, the value of fostering the relationship between Local Cultural Wisdom and Local Environmental Resources should be internalized by the community members and integrated into all aspects of CBT management. Figure 1.2 shows how CBT can be used as a tool for community development:- Economic Raise funds for community developme nt Create jobs in tourism Raise the income of local people COMMUNITY Social Raise the quality of life Promote community pride Divide roles fairly between women/me n, elder/youth Build community managemen Local culture passed on Political Enable the particip ation of local people Increas e the power of the commu nity Environmental Study the carrying capacity of the area Manage waste disposal Raise awareness of the need for conservation Cultural Encourage respect for different cultures Foster cultural exchange Embed development in local culture Tourism can be a powerful tool for community development, especially if you view tourism and community development as necessarily connected. The following table suggests the ways that the principles of sustainable development can be put into practice to make tourism sustainable. 115 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

117 Tourism v. Holistic Community Development Table 1-4 Tourism v. Holistic Development Dimension Sustainable Development Sustainable Tourism Economic Income from local production Diversified local economy Self-reliance Social People-centered development Social justice Satisfying quality of life Active community organizations Cultural Formal and informal education Local culture passed on to the next generation Cultural preservation Environmental Natural resources management rights Environmental responsibility Natural resources conservation Political Community participation Development in response to community needs Democratization Raise funds for community development Create jobs in tourism Raise the income of local people Raise the quality of life Promote community pride Divide roles fairly between women/men, elder/youth Build community management organizations Encourage respect for different cultures Foster cultural exchange Embed development in local culture Study the carrying capacity of the area Manage waste disposal Raise awareness of the need for conservation Enable the participation of local people Increase the power of the community over the outside Ensure rights in natural resources management The Process of Facilitating the Development of CBT In preparing the community for CBT, you should consider the establishment of a Contract or Commitment among the stakeholders. This can be done through the process of settling on mutual goals and participating in the ten steps below. Steps 1 and 2 are particularly important before determining to begin CBT. Step 9 is a way to evaluate the readiness of the community to manage tourism. Although it is important to build the confidence of the community, we did not include this as a specific step. The facilitating organization should rather integrate 'community confidence building' throughout the developmental process. Measuring Community Confidence is also an informal way for the facilitating organization to evaluate community capacity to manage CBT.The steps of building community capacity to manage tourism is as follows. 116 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

118 Detail is presented in chapters 2 to Choose a destination. 2. Complete a feasibility study in cooperation with the community 3. Set vision and objectives with the community 4. Develop a plan to prepare the community to manage tourism 5. Set direction for organizational management 6. Design tour programs 7. Train interpretive guides 8. Develop a marketing plan 9. Launch a pilot tour program 10. Monitor and evaluate the process Some best practiced ecotourism sites in world Ecotourism and the Noosa Biosphere Striving for Sustainability Ecotourism destinations are often fragile and pristine areas where tourism activities are intended as low impact alternatives to standard commercial tourism. Types of ecotourism activities can include visitor education programs, fundraising for ecological conservation via tourism activity and awareness rising for cultural diversity and historic preservation. An example of a successful ecotourism activity in the Noosa biosphere reserve is the regular visits by students from the University of Georgia (USA) under their Global sustainability study abroad program. Groups of students visit here with their teachers to learn about best practice approaches to sustainability. 117 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

119 Noosa in Australia,Queensland was designated a biosphere reserve under the UNESCO Man and the Biosphere Reserve program, joining over 580 other biosphere reserves from around the world. Biosphere reserves are areas where humans strive to live sustainably within their environment, share best practice approaches to sustainability and work in partnership with like-minded communities. The Noosa Tourism Industry In the Noosa biosphere, Council s jurisdiction over land and waterway usage as well as building development has long supported conditions that foster ecotourism activity. This has aimed to minimize the impact tourism has had upon the natural environment. The local tourism industry is financed by industry levies and managed by Tourism Noosa. Ecotourism Strategies So that future generations may benefit from experiencing natural environments some best practice approaches to ecotourism include: Developing sustainable best-practice standards for the local industry to adopt; Increasing the level of environmental knowledge and affirmative of tourism industry workers, especially in sensitive areas; Improving the quality of interpretation and the experience offered in and around ecological tourism sites; Improving viability for operators who adopt sustainable practices through marketing endorsement and affirmative communitysupport; Industry contributions to conservation and preservation projects to provide benefits to local communities through sustainable practices and economic value; and Marketing sustainability to increase awareness of the value of our biodiversity and its ability to attract visitors valuing it as an economic asset owned by all. Ecotourism in the Noosa Biosphere The Noosa biosphere reserve is unique and a natural place for both ecotourism and sustainable tourism practices. There are not many places you will find a protected ground-dwelling bush turkey roaming free in a multi-million dollar commercial zone such as Hastings Street for example. Ecotourism can typically involve travel to places where flora and fauna are the focus while enhancing the cultural and historic integrity of the local people. Therefore when educating tourists about the impact of humans upon the environment, an integral role of ecotourism includes the promotion of recycling, energy efficiency, water conservation, and creation of economic opportunities for local communities. These values and goals are central to the Noosa biosphere. Some good examples of ecotourism and sustainable tourism practices in the Noosa biosphere are: An award-winning Youth Hostel which reduces its resources usage and environmental impact by installing multi-dimensional eco-efficient technologies across the site cutting down energy consumption and water consumption while increasing recycling rates by installing new recycling bins with enhanced signage, and processing organic waste via a worm farm. A five star resort which reduces its commercial kitchen and restaurant waste to landfill via an innovative, odour controlled composting system called a Biobin. The Biobin stores up to two tones of waste, removes unwanted pathogens, and filters clean air out into the environment. The resort also installed rainwater tanks in its car park to reduce water usage and has reduced its use of plastic and glass to further minimise land fill, while training staff in environmental practices. Passionate tour operators who incorporate ecological education into their tour programs to rainforests, Fraser Island and the Noosa Everglades, while following waste reducing measures, taking waste away with them and recycling it where possible. Some of these operators carry the Ecotourism accreditation logo, ECO, as well as employ ECO certified tour guides. Tourism Noosa s Information Centre on Hastings Street is made from 100% recycled steel and hardwood and is designed to maximise sea breezes, relinquishing the need for air-conditioning, while housing rainwater tanks which feed the building and surrounding public facilities. II. Sinharaja Ecolodge,SriLanka The Model Ecolodge Initiative remains central to the strategy to build sustainable tourism based on Sri Lanka s unique biodiversity richness. The Sinharaja Ecolodge will be benchmarked for ecotourism by: 118 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

120 Environmental best practice in design and management, following international ecotourism guidelines in Sri Lanka for the first time Community Outreach Programmes for resident-community integration in the sustainable development process of the area in which they live To support conservation activity in the forest buffer of the threatened Sinharaja Rainforest a UNESCO World Heritage Site An awareness campaign building strategic alliances with academic professionals, cultural institutions, conservationists and media and the garnering of an international eco-cultural market share boosting Sri Lanka s ecotourism potential Independent evaluation of environmental and socio-economic sustainability with the intention of formulating an international standard for ecotourism in Sri Lanka III. Destination Røros Winner, Destination Stewardship Award (By WTTC Tourism for Tomorrow Awards) The old mining town of Røros,Norway a UNESCO World Heritage Site, was originally built in 1646, and now hosts over 1 million visitors annually. With the end of mining in the late 1970's, Destination Røros, in operation for over 80 years, has been instrumental in facilitating a multi-stakeholder approach to reversing the area's environmental degradation and economic decline and creating a thriving, sustainable tourism destination. In addition to cultural heritage, efforts have resulted in the rebounding of nature, including the southern-most population of wild reindeer in Scandinavia. Destination Røros has launched initiatives to develop, support, and promote the local culture and indigenous Sámi heritage. Since 2007, they have also been a pilot project for Norway's country-wide 'Sustainable Tourism 2015' initiative. Destination Røros currently has nearly 200 members, including municipalities, businesses, private individuals, organizations, among others, all of whom pay annual dues to help ensure the organizations sustainability, as well as provide a network of diverse stakeholders who can be called upon to work together on various initiatives. Destination Røros focuses on ensuring both direct and indirect benefits to its members and the community, and actively encouraging teamwork, cooperation, and innovation, as well as respecting and enhancing the area s cultural and natural heritage. Destination Røros action plan is based on six key areas of activity including: maintenance and development of the World Heritage Site; introducing hospitality and local knowledge programmes to its members; encouraging environmental certification among its members; developing an integrated sustainability policy to be adopted by all Destination Røros partners; supporting a sustainable business development program; and positioning the region as a health village in the Norwegian mountains. They are guided by a management plan that engages and builds cooperation among stakeholders. Since 2007, Destination Røros has also been a pilot project for Norway s country-wide Sustainable Tourism 2015 initiative, following and implementing its guidelines for destinations, which focus on preservation of nature, strengthening of social values, and economic viability. Emphasis is placed on showing good examples of how cultural and natural heritage sites as well as historical settings can be put to use in new contexts, thereby bringing tangible economic benefits to the local community. The organization approaches Røros as a living cultural landscape, and has developed regulations that ensure that the old town, constructed entirely of wood, is inhabited year-round, with support given to private owners for maintenance, restoration and other projects thus avoiding an empty museum town for tourists but rather, creating a living town that welcomes tourists. A successful artisan community has developed in the old town, ensuring that skilled craftsmen are available to assist with any maintenance and restoration projects. Local traditions in dance, music and cooking are taught in all schools, and each high school class adopts and cares for a World Heritage site building through their World Heritage in Young Hands and Adopt a House projects, 119 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

121 ensuring that the next generation will continue to support this thriving community that flourishes in the context of its customs and history. All of the municipalities in the Destination Røros area have adopted a common sustainability policy that supports the importance of promoting environmental best practices as a cost-effective strategy for businesses, while preserving heritage for future generations. The policy includes strict environmental regulations for any industries operating within the destination, monitored by environmental auditors. A culinary heritage brand has also been developed which supports locally-sourced produce from area farms through the Rørosmat collective, which currently works with more than two dozen different food producers and has developed a local food distribution system. The availability of locally-produced food products has attracted renowned chefs to the area, and with patrons from the year-round community as well as visitors, the food culture in Røros is thriving. An innovative programme of Local Food Safaris has been created, which provides training to Røros residents in traditional local foods, and encourages visitors to also visit food producers and try different traditional culinary offerings from the region. With the on-going celebration of festivals such as the Winter Market that date back more than one hundred years, Destination Røros encourages cooperation, integration, and on-going commitment to exemplary destination stewardship. Destination Røros has also launched initiatives to develop, support, and promote the local culture and indigenous heritage of the Sámi people, and to restore habitats that were affected by the mining and forest industries of the past, which had a particular impact on the traditional Sámi way of life. Røros destination stewardship efforts have resulted in enhancing the natural environment, including an increase in the southernmost population of wild reindeer in Scandinavia, as well as in protecting the lifestyle and livelihoods of inhabitants in the more remote areas of the destination. Destination Røros has received significant recognition both nationally and internationally for its destination management efforts. With its strong focus on the importance of multi-stakeholder engagement, teamwork, and uniting everyone to support a common goal of the long-term vibrancy and sustainability of their area, other tourism planners and managers are also frequent visitors to learn about Norway s best practice example of destination stewardship. Top Five Green Destination according to National Geographic study: Brazil Unpasturized The world's largest wetlands were rapidly becoming grazing ground for the beef industry until Caiman Ecological Refuge, a working cattle station on 132,000 acres (53,419 hectares) of forest, fields, and meandering waterways, took a novel tack: protecting the Pantanal region with a sustainable approach to ranching. Dubai Desert Oasis Eco-Dubai? The Middle East tourist haven, where downhill skiing is an indoor sport and streets are literally paved with gold, now boasts one of the world's best ecotourism models: Al Maha Desert Resort and Spa Its Dubai Desert Conservation Reserve home to the Arabian oryx, one of the rarest animals on the planet has put almost 5 percent of the emirate under official eco-protection and created the first national park. The 40-room ultra-luxe resort draws heavily on Bedouin heritage, recycles 100 percent of its water, and grows a seed bank of 6,000 indigenous trees, shrubs, and grasses. Canada Mine Shafted When the largest copper mine in history was given a green light to develop the Tatshenshini-Alsek River watershed back in 1987, rafters reached for their paddles and fought back. "Our goal was to bring people down the river to be touched by its magic," says adventurer Richard Bangs, who made the first rafting descent of the Tatshenshini and helped lead the campaign to protect it. The Canadian government rescinded 120 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

122 the mine permit and created a 2.5-million-acre (1-million-hectare) protected area connected to Alaska's Glacier Bay. It now forms one of the largest transborder national parks in the world. Belize (Located in North Eastern Coast of central America) Reef Revival The Mesoamerican Reef, the largest barrier reef in the Western Hemisphere, bends an aquamarine elbow at Gladden Spit, 26 miles (42 kilometers) off Placencia, Belize, creating an underwater Serengeti.This is also one of the few places on Earth where divers and snorkelers can predictably swim with whale sharks; the elusive giants arrive like clockwork during full moons from April to June. Kenya Hope in the Heartland When third generation Kenyan Ian Craig took over his family's ranch, located where Mount Kenya's fertile escarpment falls into the dust of the northern frontier, nearby Samburu and Maasai pastoralists were eking out a living on drought-ravaged and overgrazed land. A decade on, more than a million acres (more than 40,469 hectares) of Samburu communal territory have been transformed into a biodiversity conservation zone a haven for 20 percent of the world's endangered Grevy's zebras, along with other rare animals, all protected by tribal warriors who guide visitors on their land. National Organizations for Environment and Conservation There are around 1400 Non Governmental Organizations working through out India in the field of Environment and Conservation. A list of few important NGO s in India are as follows: World Wide Fund for Nature India. Bombay Natural History Society. Salim Ali Centre for Ornithology and Natural History. Wild Life Trust of India. Centre for Environment Management & Research Centre for Environmental Education Gujarat Ecological education and Research Foundation ATREE ( Ashoka Trust for Research and Environment.) International Organizations for Environment and Conservation Alaska Wilderness Recreation and Tourism Assn. (AWRTA) Green Tourism Association Toronto, Ontario, Canada. The International Ecotourism Society (TIES), Washington, DC COMECO New Mexican non-profit focusing on ecotourism.. Rain Forest Alliance is an international organization developing a sustainable tourism program. South American Explorers (SAE). Toledo Ecotourism Association (TEA), United Nations Environmental Programme (UNEP) The Global Sustainable Tourism Council (GSTC) 121 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

123 UNF United Nation Foundation ETS Eco Tourism Society World Tourism Organization (WTO) A CASE STUDY ON SUSTAINABLE TOURISM ANDHRA PRADESH About Andhra Pradesh Andhra Pradesh is a southern state of India that has been bountifully endowed by nature in the form of hills and valleys of the Eastern Ghats. The state has a population of about 80 million, of which 7% population is of tribes who live in forest tracts. The state has a long coastline of close to 1,000 kilometers. It has immense natural resources in the form of five major rivers and dense tracts of forests. The economy is primarily agrarian, with more than 65% of people living in villages. Nevertheless, the cities are also vibrant, and the capital city of Hyderabad is an international hub for IT, biotech, manufacturing and knowledge-based activities. The state has rich cultural and religious traditions, and also a strong Buddhist heritage. Because of the presence of some of the holiest shrines, the state receives the largest number of domestic tourists in the state. Eco-tourism Initiatives in Andhra Pradesh Andhra Pradesh Tourism Development Corporation took the initiative of identifying potential eco-tourism spots in the state. It has successfully implemented a number of popular eco-tourism projects by involving the local community, at Belum caves, revamping of Borra caves, and an exotic jungle destination (Jungle Bells at Tyda invisakhapatnam District). The above initiatives have yielded excellent results, as the above projects support rural livelihoods and provide opportunity to the tourist for interacting with the local communities in sharing the local knowledge about primitive culture and traditions and bio-diversity in the area. The projects also have thrown open opportunities to the local tribal youth, ethnic minorities and women who participate in operating the eco-tourism projects on a community basis and sharing the benefits. Community-based Eco-tourism Basically all eco-tourism projects are rural based and provide opportunity to the tourist to know about the environmental assets of the rural communities, local traditions, art forms and ethnic cuisine. Conscious efforts have been made to preserve the natural beauty and environment while creating infrastructure and facilities for tourists that fit in with the natural surroundings. Andhra Pradesh is encouraging community based eco-tourism in convergence with various stakeholders from the government departments and the community. The Forest Department under their Community Forest Management Program supports the initiative by providing opportunities for jungle walks, forest retreats, wildlife tourism, bird watching and trekking. New Eco-tourism Initiatives Andhra Pradesh Tourism Development Corporation (APTDC), in coordination with the AP Forest Department, has identified eight new eco-tourism destinations, namely at Maredumilli (East Godavari District), Nelapattu (Nellore District), Mamandur, Talakona, Nanniyal (Chittoor District), Balapalli (Kadapa District), Ettipotala (Guntur District) and Kambala Konda (Visakhapatnam District). The operation model followed in these projects is as follows: Eco-tourism projects, generally would involve nature treks, wildlife tourism and jungle stays. Local Forest Protection Committees will provide accommodation, guide services, security and food. The AP Forest Department will provide infrastructure under Community Forest Management (CFM) and also help in management of eco-camps through local forest officials. Transport to and from the destination will be provided by APTDC/tourists. All eight new initiatives have been made operational within a period of the last five years, and among them, the Maredumilli.Eco-tourism Project has shown the most encouraging results. 122 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

124 About the Community-based Eco-tourism Center at Maredumilli The Maredumilli Forests of East Godavari District, which form one of the less disturbed forest tracts of Eastern Ghats, are endowed with rich biodiversity of flora and fauna and are home to important wildlife like the tiger, bison, panther, varieties of deer, birds and butterflies. This forest forms catchments for River Godavari and River Shabari." It is also home to a number of primitive tribes like Konda Reddy, Konda Koyas, Valmikies, Gonds, Nayaka Podus, etc. The Maredumilli Community Conservation and Ecotourism Area is situated on Maredumilli- Bhadrachalam Road, nearly four kilometers away from Maredumilli Village, in the midst of undisturbed Eastern Ghats, which are home to rich flora and fauna. The area has many streams flowing over the undulating rocks in the deep woods and any visitor can feel the thrilling experience by living in nature and visiting the primitive tribal habitations of Konda Reddys and knowing their wayof life. Management Structure The eco-tourism project is managed by the local, indigenous tribal community (Konda Reddy) of Valamuru Somireddypalem and Addaraveedhi Forest Protection Committees, with the active support of the Forest Department. The project was successfully completed in a short span of time due to the commitment of the highly motivated community coupled with the timely financial assistance from the Andhra Pradesh Community Forest Management Project. This also provided a unique opportunity for the native ethnic community to spread the message of conservation to the masses and provide opportunity to enjoy the nature in its pristine glory. Community-based Eco-tourism Center infrastructure was created by the Forest Department under the Community Forest Management Project. The operations at this center are totally managed by local community members comprising of tribal community of Konda Reddys. Andhra Pradesh Tourism Development Corporation provides marketing support and training of the tribes in hospitality-related activities like food and beverage service, housekeeping, guide services, etc. Revenue Sharing The Forest Department under the Community Forest Management Program has arrived at a revenue-sharing mechanism with the local tribal community. Guide service, food and beverage, housekeeping and security are undertaken by the community members. The above activities are packaged in such a way that the total revenue derived is apportioned between the maintenance of infrastructure and services rendered by the community. The amount for the services rendered is shared equally between the 30 tribal families of Valamuru Somireddypalem and Addaraveedhi Villages. The members from the 30 families divide the various activities by turns and manage the center, thereby providing a wholesome experience of living with nature to the tourist. The highlight of this rural tourism center, located in the heart of Eastern Ghat forests, is the incident-free operations within the last four and a half years in the extremist-infested forest tracts of Andhra Pradesh. The convergence of the activities by different departments and total involvement of community has paved the way for successful operation of the rural ecotourism center. Enhancement of Sustainable Livelihood The focus of this tourism project is in sustainable livelihoods and addressing issues of poverty eradication through community mobilization around income and employment generation activities related to tourism. It combines the cultural, craft and ecological dimensions of rural life and holds tremendous potential for income generation and enhancement of the basic quality of life in the rural areas. This innovative concept of tourism is targeted at two distinct segments: firstly, to create interest among the host communities who are an integral part of the society so that they learn to take pride in their own identity and in their environment, culture and ecology; and secondly, to attract visitors who are interested in and fascinated by the nature, history, culture, artistic skills and lives of tribal societies, and who wish to enjoy and appreciate nature in all its forms without abusing, manipulating or destroying it, thereby ensuring its preservation for future generations. The main objectives of this innovative tourism project are: to distribute the benefits of tourism; reduce poverty; provide for sustainable development; encourage gender equity; and minimize adverse ecological impacts. It also aims at development of the local economy, revival and regeneration of tribal arts and crafts, preservation of culture and bringing awareness on how tourism benefits the local communities. Local communities are involved in infrastructure development by using local skills and vernacular architecture; governance and management; setting up and strengthening traditional economic activities and tourism-related enterprises, including host stays, hospitality services, and guiding; and familiarizing tourists with indigenous flora, fauna and medicinal herbal plants. The 123 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

125 transformative tourism project also aims at a complete and authentic tourist experience for the visitor managed by the local community from local cuisine to traditional activities (such as archery). Tourists return with a better understanding of the tribal society living in forest areas as well as the culture and biodiversity of Eastern Ghats. Economic Benefits The local tribal communities derive many economic and social benefits from this innovative project both directly and indirectly. These benefits can be listed as: i) Revenue to the 30 local families involved in the tourism project that is additional to their routine earnings. ii) Direct employment for 30 families, including women, in one way or the other through the project. iii) Sale of tribal handicrafts made of bamboo. iv) Income from sales of forest products such as Honey, Gooseberry, Jackfruits and Toddy. v) Tips from visitors while performing tribal folk dances. Forest Department Benefits 1) Effective protection of forest and wildlife with involvement of tribal communities through Forest Protection Committees. 2) Weaning away the tribal community from practicing shifting cultivation that is unsustainable and harmful to the environment. Social Benefits The local communities also get social benefits out of interaction with the visitors. As tourism activity increases in the area, the local people exhibit their indigenous traditional skills and disseminate these traditional knowledge systems to the visitors. The local tribes also get trained in interpreting the flora, especially the medicinal plants, as well as the habits and habitat of the wild fauna, traditional therapies and healing systems. Social Change The most significant development in the area is a total return to peace. This area was till recently a stronghold of left-wing guerilla extremists operating in Eastern Ghats forest tracts. People used to get scared even to drive through the forest, let alone stay there. Now, with the tribal community taking up the full responsibility of running the ecotourism center, there is an unbelievable change in the safety and security perspective of the tourists. The tourists have the opportunity to stay in the jungle that was once considered not safe. Jungle Star Eco-camp is now a sought-after destination for birdwatchers, trekkers, butterfly lovers, wildlife enthusiasts and people interested in jungle stays. Marketing Initiatives The Forest Department directly markets this rural tourism initiative through their state and district hierarchy. APTDC has developed extensive marketing initiatives through its Information and Reservation Centers. The destination is also marketed through the APTDC website and several other supporting materials, such as brochures, handouts, etc. Jungle Star Eco-camp The highlight of the eco-tourism project is the Jungle Star campsite, which is located adjoining the Pamuleru River with the stream flowing on three sides overlooking the Vali-Sugriva hill that is believed to be the battleground during the epic Ramayana period. The camp is managed by the local Konda Reddy tribal community, which has been trained in housekeeping, food and beverage production and servicing, guiding and security. The tribal community takes up the whole responsibility of the safety and security of the tourists of the camp. The community also organizes tribal folk dances in the evening and traditional archery for the tourists.the tourists will get the experience of staying in the deep jungles with basic facilities without disturbing nature. The camp will be managed with a concept of take only memories and leave only footprints. Other Places Around Center 124 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

126 1. Medicinal Plants Conservation Area: One gets the opportunity to explore nature and learn about the biodiversity of Eastern Ghats with special emphasis on the medicinal plant wealth of this area. Local tribes have been trained by the Forest Department in the identification of the medicinal plants and their use. Guided treks are organized for the tourists in an area of 260 hectares of undisturbed semi-evergreen forest. About 203 plant species, including medicinal and rare plants, have been identified in this area. Tourists can have an insight into coffee cultivation through a visit to the luxuriant coffee estates managed by the Forest Department. 2. Jalatarangini: The area is rich in springs and rivulets with cascading waterfalls giving an enchanting experience totourists. One such waterfall, called Jalatarangini, which is very close to the campsite, is often the favorite spot of tourists. 3. Madanikunj: The Forest Department has also developed a wildlife-viewing place called Madanikunj with tropical plants and bamboo grooves abutting the Pamuleru River. The place is frequented by wild animals like tigers, panthers, bison, peacocks, red jungle fowl and other birdlife in addition to varieties of butterflies. Conclusion:- The potential of rural communities to embrace these changes and use the opportunity presented by thousands of visitors who want to 'experience' rural life was highlighted. Rural tourism, predicated on the notion that it is in the citizen's interest to put their 'best face forward', and developed through community-based participatory planning, can begin to allow rural residents to determine for themselves what that face looks like and how it will be put forward. If community-based tourism planning is participatory and organized in such a way as to facilitate the development of skills, self-esteem, social capital and community power, there is potential for links to be made with other communities to create what Campfens calls the 'Worldwide Civil Society' (1997: ). Strategies to link communities and progressive development organizations can help to create a local/global partnership to enhance and create power to develop in a sustainable manner and to circumvent those global forces which seek to undermine solidarity. This is the very essence of agency. ADOPTING COMMUNITY APPROACH IN NORTHERN INDIA In view of the importance of tourism, the Governments of Northern Indian states should adopt communitybased practices. Among all the places in Punjab, Amritsar is undoubtedly the most important city, which attracts lakhs of tourists and pilgrims every year. Being a big educational center its residents are fairly enlightened and also enjoy a good standard of living. They are deeply attached to the history, culture, traditions, and the places of interest such as the Golden Temple, Durgiana Temple, Jallianawala Bagh, Ram Tirath, and other places of historical and religious interest. Individually, they are conscious to keep the city clean, tourist-friendly, and to help in the preservation of its rich cultural heritage. But collectively, an effort now seemed to have been made to involve the local residents for the promotion of tourism including pilgrimage and to preserve its art and architecture, history and culture. An Amritsar Tourism & Heritage Foundation Society has been recently set up in this direction. The Foundation need to be made broad based and provided liberal funding by the local Municipal Corporation and the State Government for carrying out measures for making the city tourist friendly. The Municipal Corporation being the apex body should take effective measures such as enlightening the local population about the economic benefits of tourism as also the intangible gains from it. The Municipal Corporation should put up big hoardings at different points in the city welcoming the visitors, and create voluntary organizations for interaction with the visitors. There should be tourist guides and tourist police also. A list of families could also be prepared where the visiting tourists could stay with them. Tourism & Heritage Foundation Society, Amritsar must organise some activities from time to time to involve the Community which can lead to overall development of the city, region & society in all respects. 125 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

127 CHAPTER 7 SERVICE INDUSTRY-CASE STUDY APPROACH Airline industry Few inventions have changed how people live and experience the world as much as the invention of the airplane. Over time, air travel has become so common place that it would be hard to imagine life without it. The airline industry, therefore, certainly has progressed. It has also altered the way in which people live and conduct business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote. The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry's trend towards expanding domestic and international services. The airline industry can be separated into four categories by the U.S. Department of Transportation (DOT): International seat planes that have the ability to take passengers just about anywhere in the world. Companies in this category typically have annual revenue of $1 billion or more. National - Usually these airlines seat people and have revenues between $100 million and $1 billion. Regional - Companies with revenues less than $100 million that focus on short-haul flights. Cargo - These are airlines generally transport goods. India is the ninth largest aviation market in the world, according to RNCOS research report, it led "Indian Aerospace Industry Analysis". It is anticipated that the civil aviation market will register more than 16 per cent compound annual growth rate (CAGR) during on back of strong market fundamentals. The rapidly expanding aviation sector in India handles about 2.5 billion passengers across the world in a year; moves 45 million tonnes (MT) of cargo through 920 airlines, using 4,200 airports and deploying 27,000 aircraft. Currently, 87 foreign airlines fly to and from India and five Indian carriers fly to and fro from 40 countries. India is expected to be amongst the top five nations in the world in the next 10 years. An efficient civil aviation sector is important for India as it is inter-linked with other sectors in the economy and generates income and employment through global commerce and tourism, as per a National Council of Applied Economic Research (NCAER) study titled 'Emirates in India - Assessment of Economic Impact and Regional Benefits'. Airport infrastructure in India is witnessing improvisation and expansion on a massive scale, with the Government avidly supporting private participants. The need for airport infrastructure in India has increased considerably. In order to ramp up airport infrastructure, the Government has unveiled reforms to facilitate investment in this segment. The investment in Indian airport infrastructure market, especially in the greenfield projects is expected to increase. IATA forecasts of Airline Industry For 2011, profitability remains weak but unchanged at $6.9 billion for a net margin of 1.2%. However looking ahead to 2012, IATA had downgraded its central forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6%. The Eurozone crisis put severe downside risk on the 2012 outlook as illustrated by the recently published OECD economic outlook. In a worst case scenario, should the Eurozone crisis evolve into a full-blown banking crises and European recession, IATA estimates that the global aviation industry could suffer losses exceeding $8 billion in The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion the largest since the 2008 financial crisis, said Tony Tyler, IATA s Director General and CEO The global forecast for 2011 is unchanged at $6.9 billion. But regional differences have widened, reflecting the very different economic environments facing airlines in different parts of the world. And the overall margin of 1.2% tells you just how difficult the battle for profitability in this business is, said Tyler. 126 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

128 Highlights of regional performance: European carriers are by far in the most challenging position. Higher passenger taxes and weak home market economies have limited profitability in Europe. The region s carriers are forecast to generate a collective profit of just $1.0 billion, down from the previously forecast $1.4 billion, and an EBIT margin of 1.2%. Low profitability has been despite European airlines being one of the fastest growing regions in terms of traffic this year. Yields have suffered and the base of strong demand grows more fragile as the sovereign debt crisis escalates. North American carriers are in a much more benign environment. They have seen yield and load factor improvements as a result of tight capacity management, which has improved profitability to $2.0 billion (up from the previously forecast $1.5 billion). The US economy has also grown at a faster pace than Europe. This gives the region the strongest EBIT margin of 3.2%. None-the-less, the bankruptcy filing of American Airlines indicates that the region faces intense competitive challenges as well. Asia Pacific carriers also saw stronger though varied trading conditions. Japan s domestic market still has not fully recovered from the March earthquake and tsunami, and load factors remain under pressure. By contrast airlines have improved load factors and profitability on China s expanding domestic market. We have upgraded our forecast for the region by $800 million to a $3.3 billion profit. This is the largest absolute profit among the regions. Middle East carriers are expected to see profits of $400 million (down from the previously forecast $800 million) as high fuel costs squeezed profit margins on the more price sensitive long-haul traffic connecting over Middle Eastern hubs. In a similar pattern Latin American profits will see a downgrade to $200 million (from the previously forecast $600 million). Performance has been mixed across the region with much of the downgrade due to the impact of intense competition and falling load factors on Brazil s domestic market. African carriers are still expected to break-even. New trade lanes with Asia are developing and markets within the continent are reflecting the improvement in economic development in many African economies. However, competition has been fierce and the region s airlines have struggled to keep load factors at profitable levels. At the global level, passenger demand is expected to expand by 6.1% which is stronger than the 5.9% forecast in September. Air travel growth has persisted at a stronger pace than we had expected. This travel strength, along with tight capacity management, particularly in North America, has kept load factors high and is supporting a 4.0% increase in yields. This has helped a modest increase in forecast revenues, which we expect to total $596 billion this year. This slightly stronger-than-expected passenger performance is offsetting (a) worse-than-expected cargo performance and (b) somewhat higher-than-anticipated oil prices. At an average oil price of $112 per barrel, the industry s 2011 fuel bill is expected to be $178 billion (up $2 billion from previous expectations). A downward trend in cargo since mid-year means that cargo likely will finish the year with a 0.5% contraction in volumes and flat yields Central Forecast Even if government intervention averts a banking crisis, it is unlikely that Europe will avoid a brief recession. Business and consumer confidence has already fallen too far. Global GDP growth forecasts for 2012 have been revised downwards to 2.1%. Historically the airline industry has seen profit turn into loss whenever global GDP growth falls below 2%. This is driving the downgrade in the 2012 outlook. Key variables driving this downgrade: Demand: Passenger demand is expected to grow by 4.0% (down from previously forecast 4.6%), while cargo is expected to show flat growth (down from the previously forecast 4.2% expansion). Yields: Passenger and cargo yields are expected to remain flat in While this is unchanged for cargo, passenger yields were previously forecast to grow by 1.7%. Fuel: Fuel costs are relatively unchanged from the previous forecast at $198 billion. That is based on oil at $99 per barrel (against a previous forecast of $100 per barrel). Revenues and Costs: Industry revenues are expected to grow by 3.7% to $618 billion. This will be outstripped by cost increases of 4.5% to $609 billion. All regions are expected to show profit deterioration from However, the regional differences in 2012 are stark: European carriers are expected to fall into losses of $600 million, hit by the weakness of their home market economies and further increases in passenger taxes. North American carriers are expected to generate profits of $1.7 billion, maintaining the strongest EBIT margin of 2.4%, as limited capacity growth is providing some protection against the downward pressure on profits. 127 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

129 Asia Pacific carriers are expected to deliver the largest absolute profit at $2.1 billion. This is weaker than 2011 s performance but the deterioration is limited by high load factors on markets such as China, where the increases in demand are structural and to some extent shielded from the cycle. Middle East carriers are expected to post a $300 million profit, less than half the previously forecast $700 million profit, as long-haul market conditions deteriorate, in particular those linked to the weak European economies. Latin American carriers will see profits decline to $100 million a $400 million negative swing from the previous forecast, partly a carry-over from the recent weakness of profitability in the large Brazil market. African carriers will fall into losses of $100 million, unchanged from the previous forecast. Economies and air transport markets continue to grow in the region, but load factors are not expected to be strong enough to offset the impact of weaker yields on profitability. Even our best case scenario for 2012 is for a net margin of just 0.6% on revenues of $618 billion. But the industry is really moving at two speeds with highly taxed European carriers headed into the red, Tyler said The Threat of a Banking Crisis The OECD s last economic outlook carried a risk assessment on the European sovereign debt crisis, which caused IATA to develop a second scenario for 2012 taking into account the possibility of the Eurozone crisis deteriorating into a renewed banking crisis. Based on the OECD s view that this scenario would cut global GDP growth to 0.8%, IATA estimates that this has the potential to cause global industry losses of $8.3 billion. In this scenario, all regions would fall into losses. Europe would be expected to post the deepest losses at $4.4 billion, followed by North America at $1.8 billion and Asia Pacific at $1.1 billion. The Middle East and Latin America would both be expected to post $400 million losses, while Africa would be $200 million in the red. Tyler said, This admittedly worst-case - but by no means unimaginable - scenario should serve as a wake-up call to governments around the world. In a good year, the airline industry does not cover its cost of capital, much less in a bad one. But in a bad year, aviation s ability to deliver connectivity and keep the heart of the global economy pumping becomes even more vital to initiating a recovery. Government policies need to recognize aviation s vital contribution to the health of the economy. This scenario is based on global GDP growth falling to 0.8% in 2012 driven by Europe descending into deep recession. Historically, GDP growth rates below 2.0% have resulted in the airline industry producing a net global loss. In this scenario, airlines would see growth in passenger demand grind to a halt and a 4.7% contraction in cargo markets. Both passenger and cargo yields would fall by 1.5%. Some relief in the fuel price would be expected. Based on oil at $85 per barrel, the fuel bill would be $183 billion and consume 31% of costs. However, overall expenses would be expected to grow by 1.9% (compared to 2011) to $592 billion. Revenues would see a fall of 1.3% (compared to 2011) to $589 billion. The net result would be an $8.3 billion loss and net margin of minus 1.4%. Indian aviation industry and FDI The Indian Aviation Industry has been going through a turbulent phase over the past several years facing multiple headwinds high oil prices and limited pricing power contributed by industry wide over capacity and periods of subdued demand growth. Over the near term the challenges facing the airline operators are related to high debt burden and liquidity constraints most operators need significant equity infusion to effect a meaningful improvement in balance sheet. Improved financial profile would also allow these players to focus on steps to improve long term viability and brand building through differentiated customer service. Over the long term the operators need to focus on improving cost structure, through rationalization at all levels including mix of fleet and routes, aimed at cost efficiency. At the industry level, long term viability also requires return of pricing power through better alignment of capacity to the underlying demand growth. While in the beginning of , the sector was impacted by sharp rise in crude oil prices, it was the decline in passenger traffic growth which led to severe underperformance during H2, to H The operating environment improved for a brief period in on back of recovery in passenger traffic, industry-wide capacity discipline and relatively stable fuel prices. However, elevated fuel prices over the last three quarters coupled with intense competition and unfavorable foreign exchange environment has again deteriorated the financial performance of airlines. During this period, while the passenger traffic growth has been steady (averaging 14% in 9m ), intense competition has impacted yields and forced airlines back into losses in an inflated cost base scenario. To address the concerns surrounding the operating viability of Indian carriers, the Government on its part has recently initiated a series of measures including (a) proposal to allow foreign carriers to make strategic investments (up to 128 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

130 49% stake) in Indian Carriers (b) proposal to allow airlines to directly import ATF (c) lifting the freeze on international expansions of private airlines and (d) financial assistance to the national carrier. However, these steps alone may not be adequate to address the fundamental problems affecting the industry. While the domestic airlines have not been able to attract foreign investors (up to 49% FDI is allowed, though foreign airlines are currently not allowed any stake), foreign airlines may be interested in taking strategic stakes due to their deeper business understanding, longer investment horizons and overall longer term commitment towards the global aviation industry. Healthy passenger traffic growth on account of favorable demographics, rising disposable incomes and low air travel penetration could attract long-term strategic investments in the sector. However, in our opinion, there are two key challenges: i) aviation economics is currently not favorable in India resulting in weak financial performance of airlines and ii) Internationally, too airlines are going through period of stress which could possibly dissuade their investment plans in newer markets. Besides, foreign carriers already enjoy significant market share of profitable international routes and have wide access to Indian market through code-sharing arrangements with domestic players. Given these considerations, we believe, foreign airlines are likely to be more cautious in their investment decisions and strategies are likely to be long drawn rather than focused on short-term valuations. On the proposal to allow import of ATF, we feel that the duty differential between sales tax (averaging around 22-26% for domestic fuel uplifts) being currently paid by airlines on domestic routes and import duty (8.5% %) is an attractive proposition for airlines. However the challenges in importing, storing and transporting jet fuel will be a considerable roadblock for airlines due to OMCs monopoly on infrastructure at most Indian airports. From the working capital standpoint too, airlines will need to deploy significant amount of resources in sourcing fuel which may not be easy given the stretched balance sheets and tight liquidity profile of most airlines. Strong passenger traffic growth aided by buoyant economy, favorable demographics, rising disposable incomes and low penetration levels India aviation industry promises huge growth potential due to large and growing middle class population, favorable demographics, rapid economic growth, higher disposable incomes, rising aspirations of the middle class, and overall low penetration levels (less than 3%). The industry has grown at a 16% CAGR in passenger traffic terms over the past decade. With advent of LCCs and resultant decline in yields, passenger traffic growth which averaged 13% in the first half has increased substantially to 19% CAGR during Despite strong growth, air travel penetration in India remains among the lowest in the world. In fact, air travel penetration in India is less than half of that in China where people take 0.2 trips per person per year; indicating strong long term growth potential. A comparative statistic in United States, the world s largest domestic aviation market stands at 2 trips per person per year. We expect passenger demand to remain stable and grow between 12-15% in the medium term, assuming a no major weakness in GDP growth going forward. However domestic airlines operate under high cost environment; intense competition has constrained yields; aggressive fleet expansions have impacted profitability and capital structures Despite reforms, the domestic aviation sector continues to operate under high cost environment due to high taxes on Aviation Turbine Fuel (ATF), high airport charges, significant congestion at major airports, dearth of experienced commercial pilots, inflexible labor laws and overall higher cost of capital. While most of these factors are not under direct control of airline operators, the problems have compounded due to industry-wide capacity additions, much in excess of actual demand. Intense competitive pressure from Low cost carriers (focusing on maximizing load factors) and national carrier (looking to regain lost market share) have constrained yields from rising in-sync with the elevated cost base. Besides, aggressive fleet expansions (LCCs have added aircrafts mainly on long-term operating leases; FSC s have purchased aircrafts debt financed, most often backed by guarantees from the US EXIM Bank or Europe s ECA) to leverage upon the anticipated robust growth and to support international operations have significantly impacted the capital structure and weakened the credit profile of most domestic airlines. 129 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

131 FDI Regulations Low-cost model now dominating the skies; viability remains to be seen Internationally the LCC model came into existence when the US Congress passed the Airline Deregulation Act in 1978 easing the entry of new companies into the business and giving them freedom to set their own fares and choose routes (Prior to this routes and fares were fixed by a Government Agency). This was followed by entry of carriers like Southwest, which pioneered the LCC concept. Majority (~60-65%) of an airline cost are dependent on external factors, which can t be managed by an LCC. This includes the fuel cost (~40%), maintenance cost (~12%) and ownership cost (~12-15%). LCCs try to achieve a cost advantage in other ways by avoiding the in-flight services, operating from secondary airports, selling tickets through the internet, higher number of seats in the aircraft, inventory reduction through use of similar aircraft and lower employees per aircraft. The Indian aviation sector was exposed to intense competition with the advent of a low-cost airline - Air Deccan back in The success of Air Deccan spurred the entry of other LCCs like SpiceJet, Indigo, Go Air and subsequently low fare offerings from Jet airways and Kingfisher airlines. As a result, the sector which was completely dominated by full-service airlines till a decade ago is now dominated by low-cost airlines. However, longer term viability of LCCs models in India remains to be seen (Kingfisher exited the segment recently) as airport charges are same for FSCs and LCCs in India. Besides, the fuel costs forms a larger proportion of overall costs as compared to international standards due to higher central and state government levies (viability of direct ATF imports remains to be seen due to lack of supporting infrastructure) and high congestion at major airports (half an hour hovering at major airport could increase fuel costs by Rs.60,000 to Rs. 115,000 depending on aircraft, besides impacting aircraft utilizations). These constraint can be resolved only if there significant improvement in infrastructure such that LCCs could operate on secondary airports. Growing LCC Market Share OPERATING PERFORMANCE OF INDUSTRY The domestic airlines industry is facing significant operating (slowing growth, rising fuel costs) and nonoperating (interest costs, rupee depreciation) challenges as evident in the quarterly performance trends of listed airline companies. Sales Growth: After a strong rebound in 2010, the pax growth has been moderating over the last few quarters due to moderating economic growth and weak industrial activity. Besides, severe competitive pressure from 130 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

132 domestic LCC players (rapidly gaining market share) and Air India (trying to maintain market share) have resulted in price wars (at times below cost pricing), lowered yields and moderated sales growth for the airlines. Even on international routes, the yields have remained weak due to weaker economic conditions and severe competition from global airlines. Domestic Airlines - Gross Sales Growth (%, YoY) Rising ATF Prices & Steep Rupee Depreciation: The airlines industry had been severely impacted by the significant increase in ATF prices (up 57% in last 18 months) as Indian Carriers do not hedge fuel prices and have exhibited limited ability to charge fuel surcharges due to irrational and undisciplined pricing dictated by competition rather than costs / demand. Besides, the steep rupee depreciation (~18.7% depreciation in CY11, although partly reversed through 7.3% YTD appreciation in CY12) acts double whammy as apart from fuel costs, substantial portion of other operating costs like lease rentals, maintenance, expat salaries and a portion of sales commissions are USD-linked or USD denominated. Profit Margins: With combined impact of 1) moderating pax growth 2) lower yields due to excessive competitive 3) rising ATF prices 4) steep rupee depreciation and 5) rising debt levels and interest costs, the profitability margins of the airlines industry have been severely impacted. As per Centre for Asia Pacific Aviation (CAPA), Indian carriers could be posting staggering losses of $2.5 billion (~Rs 12,500 crore) in , worse than the losses of when traffic was declining and crude oil prices spiked to $150 per barrel. Domestic Airlines Fuel Costs (% of Gross Sales) Domestic Airlines Reported PAT (% of Gross Sales) Overall, the industry has been marred by cost inefficiencies and is bearing the brunt of aggressive price cuts, rising costs, expensive jet fuel, a weaker rupee, high interest payments and hence mounting losses. The government support required to bailout the loss making Air India has increased substantially; while the leading private players like Kingfisher Airlines, Jet Airways and Spice Jet are making significant losses. With Banks 131 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

133 unwilling to enhance their exposure to the industry, recast their loans or pick up equity stakes without viable business plans, industry needs to come out with strong equity infusion plans. Hence, the government is mulling allowing foreign carriers to pick strategic stakes in domestic airlines to help them stay afloat in these difficult times, besides bringing global expertise and best industry practices over the medium term. FDI in Aviation: Feasibility and Impact Analysis for various stakeholders FDI Proposal: The Civil Aviation Ministry is expected to soon circulate a proposal before the union cabinet to consider allowing up to 49% equity investment by foreign carriers in domestic airlines. In case of listed airlines, if the proposal does not get a waiver from SEBI s Takeover Code, foreign carriers may have to first make an open offer of 26% stake to public shareholders and later acquire up to 23% stake (from promoters or fresh equity), such that their stake remains within the 49 % cap. Indian Carriers: The FDI proposal, if approved, would certainly be an important milestone in the aviation sector and may provide much-needed relief to the domestic aviation industry reeling under the pressure of mounting losses and rising debt burden. Besides, the move will help bring global expertise and best industry practices over the medium term. Foreign Carriers: It will not just provide entry into one of the fastest growing aviation market globally but also an opportunity to establish India as their hub for connections between US/Europe and South-East Asian countries. While full-service airlines could help them further consolidate their market position on international routes (and improve connectivity within India), acquisition of low cost airlines could help them compete in a market where travelers are highly price sensitive. Consumers: New players could enter the market as they could now have a strategic foreign player with deep pockets to support the airline in difficult times. Besides, it would provide more flexibility in international travels when one travels through the same airline domestically as well as internationally. Overall, this could increase competition, offer more alternatives, reduce tariffs and improve customer service standards over the medium term. However, the Global Airline industry is itself currently going through a tough phase (Bloomberg World Airline index down 22%, Asia-Pacific Airline index down 25% in last one year), due to below trend economic growth across advanced economies and high crude oil prices ($ /Barrel). Besides, aviation economics currently remain unfavorable in India due to intense competition, mandatory route dispersal guidelines, higher taxes on ATF, airport related charges and inadequate airport infrastructure. For example, airlines like Air Asia (citing high infrastructure costs) & American Airlines (parent facing financial stress) have recently withdrawn from India. Lastly, foreign carriers already enjoy significant market share of profitable international routes and have wide domestic access through code sharing agreements. Given these considerations, we believe, attracting investments from foreign airlines may not be easy. Foreign carriers already enjoy significant share of international traffic; domestic access through code sharing agreements As per DGCA data, foreign carriers already enjoy ~65% market share in international traffic and hence ~27% of total passenger traffic (Domestic + International). For Jet Airways, due to longer haulage (~4.6 hrs avg block hours in international routes as compared to ~1.6 hrs avg block hours in domestic routes), revenue per passenger carried on international route has been 2.5x to 3.0x revenue per passenger carried on domestic route. We expect this ratio to be higher on an industry wide basis as foreign carriers dominate longer haulage routes, full service offerings and business traffic as compared to shorter haulage, low fare offerings & VFR (visiting friends and relatives) traffic prominence of Indian carriers. As a result, we estimate that the foreign carriers have already garnered 42-48% of total airline revenues (inbound, outbound & within India). Besides, the stark difference between Jet Airways domestic and International EBITDAR margins indicates that the foreign airlines could be already enjoying majority of the industry profits, with the domestic carriers left with price conscious no-frills pax traffic, less viable routes and hence saddled with high operating losses. Besides, due to number of code sharing agreements, foreign carriers can offer enhanced connectivity into Indian cities without acquiring stakes in Indian carriers. Role of Air Transport in the Economy Role of Air Transport 1. In an increasingly globalised economy, air transport is a vital element of the country s transport infrastructure. The impact of civil aviation as a sector on the general economic activity has been studied systematically and documented for some of the Western developed countries. By itself, the Civil 132 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

134 Aviation Sector contributes significantly to the process of development by generating employment opportunities directly and indirectly besides facilitating enhancement of productivity and efficiency in the movement of goods and services. Civil Aviation is a key infrastructure sector that facilitates the growth of business, trade and tourism, with significant multiplier effects across the economy. 2. Doubtlessly, air transport has contributed to the rapid growth in India s international trade in recent decades by offering a reliable and faster mode of transport services to move products and personnel across long distances. Therefore, sustaining a viable aviation industry is vital if the economy is to reap the full benefits of the future growth in foreign trade and investment. Industries that rely most heavily on air transport for their international freight shipments include high growth sectors such as pharmaceuticals, office equipment and electronic equipment sectors besides those that have high value to weight products. 3. Thus, it has been observed that high growth sectors in emerging markets are heavily dependent on the services of the aviation industry. Increased air connectivity enables manufacturing enterprises to exploit the speed and reliability of air transport to ship components across firms that are based in different and distant locations thereby minimizing the inventory cost. Countries with higher connectivity in general are stated to be more successful at attracting Foreign Direct Investment. Role of air transport is crucial for the development of Tourism industry. Tourism makes a large and growing contribution to the Indian economy. 4. The Tourism Satellite Account developed for India for the year confirms tourism as one of the largest sectors in the economy. Tourism value added accounts for 2.78 percent of the GDP in terms the direct contribution; when indirect effects are also accounted for, the share of tourism in the GDP is 5.83 percent. 5. In absolute terms, tourism related jobs are estimated to be in the region of about 21 million. Employment in the Indian tourism industry is dependent on the aviation industry since 90% of foreign visitors out of 5.11 Million arrived by air in the year Global evidences suggest that in U.S.A. civil aviation activity within the overall economy was responsible for generating 12 million jobs, USD 1.3 trillion in total economic activity and 5.6 percent of GDP in In UK, the contribution of aviation sector to its GDP is said to be to the tune of 53.3 billion (3.8%) to its GDP. The most important contribution aviation makes to the economy is through its catalytic impact on the performance of other industries and as a facilitator of their growth. 6. Recent research by Oxford Economics reveals that the direct contribution of aviation sector in India to its GDP is 0.5% for the year If the Catalytic impact of Civil Aviation is included, the contribution to GDP is 1.5%. Total number persons employed in Civil Aviation sector is estimated to be 1.5 Million and if we include the catalytic impact then it is 10 million persons. Globally for every $ 100 of output produced and every 100 jobs generated by air transport in the economy trigger additional demand of approximately $325 worth of output and 610 jobs in other industries. During the year , air transport carried 54 Million domestic passengers and 37 Million International passengers besides transporting 1.7 Million Metric tonnes of domestic and international cargo. Air transport is crucial for the distribution of high value to weight products and also for goods that are to be transported speedily. 7. Civil Aviation sector makes a substantial contribution to public finances. These include, the Service tax paid by air passengers, corporation tax paid by airline companies, airport operators and other ground support service enterprises, MRO firms and income tax paid by their respective employees, besides the revenue collected through taxes on fuel and equipments. 8. Thus, the economic foot-print of the Civil Aviation sector which reflects the value addition and the direct and indirect employment created by activities of the sector appear to be much deeper and wider in terms of its multiplier effect. Snapshot of the Indian Civil Aviation Sector 1. The size of a particular industry in a given year is assessed by the total income generated by enterprises in that industry and the employment generated by the said industry. These are generally reckoned to be the key parameters to evaluate the relative importance of a sector in an economy. It is with this objective, an attempt has been made to estimate the size of the civil aviation sector in India based on available information as given in Table. From the table it is evident that scheduled airlines in India contribute to over 50% of the gross income of the Civil Aviation sector in India. While income of the scheduled carriers operating in India does include income from their global operations, income of the international airlines having operations in India is not part of the income 133 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

135 shown under scheduled air lines, which according to industry sources would be in the region of about Rs.20,000 crores for If this is taken into account then the size of airline industry alone would exceed Rs.60,000 crores. Estimated Gross revenue earned by sub-sectors of Indian Civil Aviation sector It is evident from the table that contribution of Airline industry to the total sector revenue is over 50%. Since, the airlines are the largest contributor to the sector in terms of revenue, their viability is of paramount importance for the growth of the sector. Indian Aviation Market Performance of Scheduled Passenger Traffic in India 1. In the last two decades, the fastest growth in overall air traffic in India was witnessed during to at the rate of 16.5% with domestic traffic clocking a CAGR of 18.5% and International traffic at 14%. This growth is much higher than the growth witnessed during the period to Also, it is evident that the domestic traffic grew more than three times and the international traffic to and from India more than doubled in the last 7 years. 2. Performance of domestic air traffic evaluated for a longer time frame of twenty years (from to ) suggests that it grew at an annual average rate of 10.4%. During the same period, international passenger traffic grew at 9.4% and total passenger traffic at 9.9%. Available Seat Kilometer & Revenue Passenger Kilometer 134 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

136 Available Seat Kilometer (ASK) refers to available capacity deployed by scheduled carriers on all its routes whereas Revenue Passenger Kilometer (RPK) performed refers to number of seats for which the carrier has earned revenue, in relation to the distance travelled. ASK is normally the supply side parameter used to assess the capacity growth in the market whereas RPK is the demand side parameter used to assess the revenue generated by airlines from passenger traffic. Healthcare Industry Brief Overview The healthcare industry forms the backbone of any nation's well being and can be broadly divided into five segments namely hospitals, pharmaceuticals, diagnostics, medical equipment & supplies and medical insurance. Global scenario Health Expenditures Globally and in OECD Developed Nations: A comprehensive study published by the OECD (Organization for Economic Cooperation & Development) covering more than 30 nations including the majority of the world s most developed economies (but not Brazil, Russia, India or China), found stark contrasts between health costs in the United States and those of other nations. In 2010 (the latest complete data available), the average of a list that includes, for example, the UK, France, Germany, Mexico, Canada, South Korea, Japan, Australia and the U.S., spent 9.5% of GDP on health care. The highest figures were in America at 17.6% of GDP, The Netherlands at 12.0%, France at 11.6%, Germany at 11.6%, Denmark at 11.1% and both Canada and Switzerland at 11.4%. Total health care expenditures around the world are difficult to determine, but $6 trillion would be a fair estimate for That would place health care at about 8.7% of global GDP, with expenditures per capita about $850. This $6 trillion breaks down to approximately $2.8 trillion in the U.S., $2.6 trillion in non-u.s. OECD nations and $0.6 trillion elsewhere around the world. Outside the U.S. and the rest of the OECD, that would allow roughly $90 per capita per year. Clearly, there is vast disparity in the availability and cost of care among nations, as there is with personal income and GDP. Health care spending per capita in the U.S. was equal to about $9,000 in 2012, while spending in the world s remotest villages was next to nothing. The trend over the near future is for the modest amount now spent on health care in emerging nations to rise dramatically, while OECD nations like America struggle to contain their own mountainous costs. Globally, the total prescription drug market was estimated to be as high as $950 billion in Indian scenario The Indian healthcare sector is expected to reach US$ 100 billion by 2015 from the current US$ 65 billion, growing 20 per cent year-on-year (y-o-y), as per rating agency Fitch. The industry aims to touch US$ 79 billion in 2012 and US$ 280 billion by 2020, on back of increasing demand for specialised and quality healthcare facilities. In order to strengthen bilateral cooperation, India and Netherlands have signed a memorandum of understanding (MoU) in health and medicine. The Pharmaceuticals Export Promotion Council of India (Pharmexcil) is promoting 'iphex 2013' to showcase country's pharmaceutical products. Medicine exports from India are pegged at about Rs 64,000 crore (US$ billion), and about 50 per cent goes to the emerging markets, as per Dr P V Appaji, Director-General, Pharmexcil. Market Size The hospital services market, which represents one of the most important segments of the Indian healthcare industry, is expected to be worth US$ 81.2 billion by Further, the healthcare segment offers an attractive growth opportunity for the information technology (IT) and business processing outsourcing (BPO) industry. The market for outsourced services to healthcare payers is expected to increase from US$ 9 billion in 2011 to US$ 15 billion in 2016, according to research firm NelsonHall. 135 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

137 In addition, the Indian pharmaceutical market is also expected to grow at a compound annual growth rate (CAGR) of 15.3 per cent during to , as per Barclays Capital Equity Research report on India Healthcare & Pharmaceuticals. Trends and Investments The healthcare and life sciences sector has received the maximum investment from private equity (PE) and venture capital (VC) players, attracting US$ 817 million across 29 investments till August 2012, according to data from Venture Intelligence. Last year, 38 deals were recorded in the sector worth US$ 421 million. The hospital and diagnostic centre in India has attracted foreign direct investment (FDI) worth US$ 1.48 billion, while drugs & pharmaceutical and medical & surgical appliances industry registered FDI worth US$ 9.78 billion and US$ million, respectively during April 2000 to October 2012, according to data provided by Department of Industrial Policy and Promotion (DIPP). The private sector has emerged as a vibrant force in India's healthcare industry, lending it both national and international repute. Some of the major investments in the sector include: ExlService Holdings has announced the acquisition of US-based Landacorp Inc. The acquisition will provide Exl with an end-to-end solution for the healthcare industry. Trivitron Healthcare has formed a joint venture (JV) with Italy-based Diasorin Group to enter the immunodiagnostics market. The JV company will be called DiaSorin Trivitron Healthcare Pvt Ltd with Trivitron holding 49 per cent stake Fidelity Growth Partners India (FGPI) has invested Rs 400 crore (US$ million) in medical technology firm Trivitron Healthcare. The company has also set up centres of innovation for biomedical equipment in collaboration with the Indian Institute of Technology (IIT), Chennai Thyrocare Technologies, a Mumbai-based medical diagnostics services provider, has raised about Rs 120 crore (US$ million) from private equity (PE) firm Norwest Venture Partners (NVP) Apollo Group of Hospitals has launched its telemedicine service in Yangoon, Myanmar. The facility will allow Myanmar to consult Indian doctors and have accessibility to quality treatment and latest medical technology. As per company's press statement, the network will primarily provide infrastructure supports like Tele-Education, Tele-Medicine, Internet, videoconferencing and VOIP services via satellite and fibre optic network ehealth Access Pvt Ltd has launched 'Virtual Medical Kiosk', which enables patient-doctor consultation in a secure environment. The medical kiosk will bring the medical practitioner closer to the people in need of medical consultation, as per Mr Ramprabhu T K, Co-founder and Technology Director, ehealth Access. This facilitates on-demand, real-time consultations with medical professionals any time of the day," said Mr Ramprabhu The Council of Scientific & Industrial Research (CSIR) and Hewlett-Packard (HP) have launched a cloudenabled ehealth centre, a move to bring diagnostic services to the doorsteps of people living in remote areas Medical Tourism Presence of world-class hospitals and skilled medical professionals has strengthened India's position as a preferred destination for medical tourism. Medical tourism market is expected to expand from US$ 1.9 billion in 2011 to reach US$ 3.9 billion in 2014, at a CAGR of 27 per cent. India is the most competitive destination with advantages of lower cost and sophisticated treatments, highlighted the RNCOS report titled 'Indian Healthcare - New Avenues for Growth'. The report further highlights that several key trends are backing the growth of India's healthcare sector. Of these, medical city is relatively a new concept that offers immense growth opportunities. The major service offerings that attract medical tourists to India include yoga, meditation, ayurveda, allopathy, and other traditional systems of medicines. 136 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

138 Government Initiatives The Government of India has decided to increase health expenditure to 2.5 per cent of gross domestic product (GDP) by the end of the Twelfth Five Year Plan ( ), from the existing 1.4 per cent. Dr Manmohan Singh, the Prime Minister of India, also emphasised the need for increased outlay to health sector during the Twelfth Five Year Plan. Furthermore, a number of initiatives that have been proposed and taken up by the Government of India (GoI) for enhancement of the healthcare sector are: 100 per cent FDI is permitted for health and medical services under the automatic route Allocation for National Rural Health Mission (NRHM) has been proposed to be increased from Rs 18,115 crore (US$ 3.32 billion) in to Rs 20,822 crore (US$ 3.82 billion) in National Urban Health Mission is being launched Pradhan Mantri Swasthya Suraksha Yojana being expanded to cover upgradation of seven more Government medical colleges Proposal to extend concessional basic customs duty of 5 per cent with full exemption from excise duty/cvd to six specified life saving drugs/vaccines Basic customs duty and excise duty reduced on soya products, iodine and probiotics Road Ahead "There is a huge opportunity here for any country, including India, to maximise the use of diagnostics within the healthcare environment. We have got very good high-end labs, which are equivalent to any country around the world," said Mr Lance Little, Chairman and Managing Director, Roche Diagnostics India and South Asia. In addition, there is substantial demand for high-quality and specialty healthcare services in tier-ii and tier-iii cities. All these factors are creating huge demand for healthcare services in the country. CASE STUDY Indian Healthcare Sector: A Galore of Scope and Opportunity The Indian Healthcare sector is at a vital juncture, perched for assured growth till Healthcare expenditure in India being among the lowest globally, offers tremendous scope and opportunity to the industry stakeholders, especially in the private sector. 137 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

139 However, considerable challenges exist in terms of service accessibility and patient care quality. As such, Government support would inherently play a significant role in the overall development and growth of the sector. Robust Demand A Galore of Opportunities Healthcare expenditure in India is projected to increase by 12% per annum from Increasing incomes, greater health awareness, shift to lifestyle diseases and increasing insurance penetration to drive growth of the sector Greater investment is required in healthcare infrastructure to increase the number of doctors and hospital beds to bridge the demand gap The Union Government allocated USD5.6 billion in for the sector, an increase of 11% from the previous fiscal year Quality and Affordability Levels There is a large pool of well-trained medical professionals in the country Compared to countries in the West and Asia, India has a comparative cost advantage Regulatory Support Government of India aspires to develop India as a global healthcare hub High level of effective policy support in the form of reduction in exercise duties and higher budget allocation for the healthcare sector Hospitals and Pharmaceuticals are the top revenue generating subsectors in the Indian Healthcare industry, accounting for 71% and 13% of industry revenues respectively. Other subsectors including Medical Equipments & Supplies, Insurance and Diagnostics share a smaller part of the pie; however, play a key role in the overall development of the sector. 138 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

140 Market Breakup by Revenue Pharmaceuticals Medical equipments & suppliers Medical insurance Dignostics Hospitals The Indian healthcare industry, valued to be worth USD 40.0 Billion in 2011, is highly fragmented and dominated by private players. The industry is rapidly developing and is being fueled by large investments from existing corporate hospital chains and new entrants backed by private equity investors. A growing old age population with rising incidence of lifestyle diseases, combined with rising incomes & affordability and increased penetration of health insurance are fuelling growth of the industry. Government-run facilities have inadequate equipment and low quality. A chronic shortage of healthcare infrastructure exists, especially in rural areas and tier II & III cities, with potential requirement of 1.75 million new beds by the end of Most hospital chains have aggressive expansion plans to scale up their activities and establish a pan India presence. Various innovative models are being explored to improve their performance and profitability, viz. getting into telemedicine, and increasingly focusing on specialty centers and day care centers. High upfront investments, long gestation periods, and rising real estate costs are compelling private players to innovate with business models and expand into under-penetrated tier II & III cities. As a result, these private players can capitalize on the opportunity to expand. The private sector is likely to contribute 80.0% % of the USD 86.0 billion healthcare investment required till The sector is expected to grow at 24.1% p.a. till 2020, witnessing significant interest from private equity players, who would play an integral role in the strategies employed by Indian hospitals, such as organic & inorganic growth, and making hospitals asset-light enterprises. India s healthcare spend is significantly lower when compared to the global, developed and other similar emerging economies. In 2008, the healthcare spend in India was close to half the global average in percentage terms, when evaluated on a percentage of GDP basis. 139 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

141 Global Comparison of Healthcare Spend The healthcare spend, when compared on public-private contribution basis, exhibits a skewed scenario. The Private Sector contribution to the healthcare sector at ~68% is amongst the highest in the world in percentage terms. Public spending, however, is amongst the lowest in the world and is ~29 percentage points lower than the global average. The Indian healthcare spends, on a per capita basis, both in terms of USD (at average exchange rate conversion) and in terms of Purchasing Power Parity (PPP), is amongst the lowest globally. When compared to the global average, the per capita Indian healthcare spend is ~95% lower on an average exchange rate basis and ~86% lower on a PPP basis. Key Trends & Growth Drivers 140 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

142 Population growth India s population has grown from 1,024 million in 2000 to 1,191 million in 2010 and is expected to reach 1,272 million by 2015, at a CAGR of 1.3% over Increasing population will impose pressure on the already inadequate healthcare infrastructure, creating a severe need for more hospital beds India s average life expectancy has increased from 57.0 in 1990 to 65.0 in This, coupled with a declining population growth rate, implies that the number of people in old age groups (>60 years) is likely to increase Population above the age of 60 is likely to double from 96.4 million in 2010 to million in 2030 Population Increase in Lifestyle Diseases Accelerating Incidence of Lifestyle Diseases India is experiencing fast growth in number of people suffering from lifestyle related diseases Percentage of population suffering from cardiac diseases, diabetes, obesity and cancer are expected to rise from 7.7% in 2005 to 11.6% in 2015 As of 2008, lifestyle related diseases comprised 13% of total ailments in India, which is expected to increase to 20% by 2018 This increase is likely to trigger additional demand for specialized treatment, which can be provided better in specialty or super-specialty hospitals This will also lead to increasing margins for hospitals, since these are the high margin end of disease spectrum 141 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

143 Health Insurance & Medical Tourism Rising Health Insurance Health insurance is gaining high momentum in India Gross health insurance premiums have increased at a CAGR of 30%, from USD million in to USD 2,095.3 million in Penetration as % of GDP has risen from 0.08% in to 0.12% in Reduction in out-of-pocket expenses on health from 92.2% of total private expenditure in 2000 to 74.4% in 2008 clearly indicates the increase in health insurance Penetration of health insurance will significantly increase the affordability of healthcare services for the population, while improving the quality of healthcare 142 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

144 Medical Tourism: Lower Costs enable Growth Treatment for major surgeries in India cost ~10.0% of that in developed countries; further, the Indian tertiary and specialty hospitals boast of a high level of quality Medical tourism is attractive for patients from developed countries (due to the cost advantage) as well as emerging countries (due to better quality). India s huge expat population itself is a large target market The medical tourism industry is expected to increase from USD million in 2010 to USD 2.2 billion in 2015; Specialty care and tertiary hospitals are estimated to account for USD billion of the total potential revenue 143 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

145 Market Trends Higher Profitability in Hospitals in Tier II & III Cities The healthcare market in tier II & III cities is expected to grow at a CAGR of 17.9% till 2023, ~5.0% higher than a CAGR of 13.2% for healthcare market in metropolitans Hospitals in tier III cities require Capex of USD 113,600 per bed, as compared to the Capex requirement of USD 454,500 per bed in metropolitans Operating costs in tier II & III cities are ~30.0% lower than metropolitans & tier I cities The IRR in hospitals in tier III cities is double of that of the ones in tier I cities A tier II & III city hospital attains operating profitability in the 1st or 2nd year of operations, as compared to a tier I city hospital that reaches this stage around the 5th year 144 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

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149 Opportunities India has a competitive advantage in healthcare over peers, owing to its large skilled manpower, low cost of surgeries, vast opportunity in Research & Development and medical tourism. Opportunities for investments in Healthcare 148 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

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151 Growth Strategies Greenfield projects Organic growth Increase in ARPOB & occupancy Reduction in average length of stay Growth strategies Inorganic expansion Acquisition of existing hospitals Hiring off non-core assets Hive-off real estate assets to make operations asset-light Diversification across the value chain Build/ acquire businesses such as pharmacies, & diagnostics labs Buiding Functional Approach Apart from infrastructure improvement, capacity addition and development of manpower being critical for the Indian healthcare sector, it is also necessary that the existing facilities are operated in an efficient manner. This can be ensured through various measures such as Accreditation, adoption of Cost Accounting Procedures and increased penetration of Healthcare Insurance. Accreditation Accreditation is one of several models of external evaluation used by healthcare entities throughout the world to regulate, improve and promote health care services. Domestically, accreditation is sought from the National Accreditation Board for Hospitals and Healthcare Providers (NABH), an entity under the control of the Quality Council of India. JCI, an international accreditation arm of the US joint commission also provides accreditation. Few hospitals in India like Moolchand Hospital and Fortis hospitals, have already been accredited by this body. Trends of Accreditation To date, only 17 Indian hospitals are JCI-accredited and all are large corporate entities, including hospitals in the Apollo, Fortis, and Wockhardt Hospital systems. As of March 2007, over 700 Indian hospitals had applied for NABH accreditation. NABH is involved in the accreditation of blood banks, diagnostic centres, nursing homes, dental clinics and Ayurvedic centres in addition to private hospitals, nursing homes. As of January 1, 2008, only 12 medical facilities were accredited by NABH. Advantages of Accreditation Patients benefit in terms of high quality of care and patient safety. They are serviced by credible medical staff and their rights are respected and protected. Accreditation results in continuous improvement of the overall services of the hospital in order to provide high quality care with least possible risks. Accreditation provides an objective system of empanelment by insurance and other third parties. It provides access to reliable and certified information on facilities, infrastructure and level of care with education on good practices to improve business operations. 150 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

152 Risk Factors & Mitigation Risk Factors Mitigation Long gestation periods Hospitals require significant upfront investments and have a long payback period. This makes investments in the sector less attractive Increasing number of hospital acquisitions are happening through operating & maintenance contracts which have short gestation periods and faster revenue ramp up. Lack of qualified staff Finding qualified staff & specialized doctors is a major challenge for hospitals in India, especially for new start ups, leading to wage inflation and inadequate quality Stringent license requirements abroad and improving health infrastructure in India is encouraging doctors to return to India. Medical education & training is seeing growing investments, especially by healthcare companies such as Manipal. Rising real estate prices Increasing real estate prices lead to higher initial outlay or higher lease payments, resulting in decreasing profitability Substantial amount of growth in the industry is driven from tier II & III cities, mainly because of lower real estate cost. Some have adopted the leased model to offset high real estate prices. Lack of capital Huge capital will be required to meet the growing demand of healthcare. However, long gestation periods make the sector unattractive The growth prospects of the industry have led to a rapid increase in investments in hospitals. Private equity players have invested USD million in the sector since 2010, and existing players are rapidly deploying capital for expansion. Increasing operating cost Increasing costs of equipment and labor lead to margin pressure and lower profitability Equipment manufacturers like GE and Philips are increasingly focusing on India to sell healthcare products, resulting in favorable terms of supply. The Way Forward Public Sector and Government Interventions Current and Going Forward Improving the Reach and Quality: 1. The government plans to build 6 super speciality tertiary care hospitals with research and education centres across the country. These would cater to the weaker sections making high end clinical care available to the masses. 2. Encouraging current initiatives on PPP s in the sector should continue. 3. The government should continue flagship programmes such as Rashtriya Swastha Bima Yojana (RSBY) and State level Insurance schemes like the Arogyashri and Chiranjeevi 4. To improve availability of medical staff in rural and far-flung and inaccessible areas, doctors, specialists and para-medicals are given monetary benefits such as 25% hike to those posted in rural and distant areas and 50% hike for those in areas that are almost unreachable by road. 151 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

153 5. A truncated medical course designed by the Central Government from the Chinese barefoot doctors model that is assumed to produce 145,000 rural doctors every year, would cover most primary level needs. The existing health sub-centres, the first point of care for villagers, are now being manned by Auxiliary Nurse Midwives (ANM). 6. Through NHSRC, the NRHM (National Rural Health Mission) is encouraging almost 200 hospitals to go for a sustained Quality Accreditation program and this is sought to extend to 400 hospitals. 7. CGHS (Central Government Health Services) has made it mandatory for all healthcare institutions and diagnostic centres providing care to have either NABH / NABL certification. Healthcare Education: 1. To meet the demand for more human resources, especially the doctors and nurses, the government has reduced land requirements from 25 acres for medical colleges to 10 acres in urban areas. The INC norm of 4 acres for nursing colleges has also been relaxed. 2. Private medical colleges are allowed to conduct their own CET and the reservation criteria for government seats and management quota have been relaxed with a uniform pre-decided fee. Only the NRI reservation is maintained at 15%. 3. Private medical colleges are now allowed to register under Section 25 Act, unlike earlier when they had to be under the Charitable Trust banner. Public Sector Action Items: 1. Special benefits, Viability Gap Funding, and subsidies on cost of care for PPP initiatives would make it more attractive for the private sector to participate. 2. Awareness drives, IEC for Health Insurance schemes covering both the rural and urban poor to be initiated through collaborative approaches. 3. Incentivize corporate sector to take up healthcare initiatives for CSR activities. 4. The current compulsory rural stint for medical professionals should be continued; however, it needs to be augmented with better facilities and support systems. Import Duty Concessions: 1. Reduction in Import duty on equipment from 25%to 5%. 2. Customs Duty reduced from 16% to 8% for medical and veterinary furniture. 3. Custom s duty on 24 medical equipment like X-ray, tele-therapy stimulator equipment, goniometer have been reduced to 5%. 4. Depreciation on medical equipment raised from 25% to 40%. Medical Device Interventions: 1. The government announced a USD 69 million in October 2009 to promote domestic device/ manufacture to enable price control of critical equipment including stents, catheters and heart valves, among others. 2. Central government to set up the first specialised device centre National Centre for Medical Devices in Gujarat to promote indigenous R&D efforts. 3. Medical Devices Regulation Bill has been tabled and is under consideration. 4. Enabling IT driven healthcare to improve the reach and costs. Tele-medicine, as a branch of diagnosis and treatment, should be encouraged and widely implemented to help ensure availability and accessibility of care to all areas in spite of infrastructural inefficiencies I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

154 Tourism Industry There are various definitions of tourism. Theobald (1994) suggested that etymologically, the word "tour" is derived from the Latin 'tornare' and the Greek 'tornos, 'meaning 'a lathe or circle; the movement around a central point or axis.' This meaning changed in modern English to represent 'one's turn.' The suffix -ism is defined as 'an action or process; typical behavior or quality' whereas the suffix -ist denotes one that performs a given action. When the word tour and the suffixes -ism and -ist are combined, they suggest the action of movement around a circle. One can argue that a circle represents a starting point, which ultimately returns back to its beginning. Therefore, like a circle, a tour represents a journey that is a round trip, i.e., the act of leaving and then returning to the original starting point, and therefore, one who takes such a journey can be called a tourist. [en.wikipedia.org/wiki/tourism] The Macmillan Dictionary defines tourism as the business of providing services for people who are travelling for their holiday. Wikipedia defines it as travel for recreational, leisure or business purposes. The OECD (organization of economic cooperation and development) glossary of statistical terms defined tourism as the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. Travel and Tourism is the world's largest industry in terms of employment and second only to oil industry as for turnover is concerned. It is a service-based industry and requires professionals and specialists skilled in various disciplines. The industry broadly covers the following areas: Hotels, restaurants and tourist complexes; Travel agencies and tour operators; Transport facilities; Amusement, entertainment and sports facilities; Units providing cultural, adventure and wildlife experiences; Airlines and related services; and Banking services. Global Scenario Over the decades, tourism has experienced continued growth and deepening, diversification to become one of the fastest growing economic sectors in the world. Tourism has become a thriving global industry with the power to shape developing countries in both positive and negative ways. No doubt it has become the fourth largest industry in the global economy. Similarly, in developing countries like India tourism has become one of the major sectors of the economy, contributing to a large proportion of the National Income and generating huge employment opportunities. It has become the fastest growing service industry in the country with great potentials for its further expansion and diversification. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Tourism has become a popular global leisure activity. In 2011, there were over 983 million international tourist arrivals worldwide, representing a growth of 4.6% when compared to US$ 940 billion in International tourism receipts (the travel item of the balance of payments) grew to US$1.03 trillion ( 740 billion) in 2011, corresponding to an increase in real terms of 3.8% from In 2011, international travel demand continued to recover from the losses resulting from the late-2000s recession, where tourism suffered a strong slowdown from the second half of 2008 through the end of After a 5% increase in the first half of 2008, growth in international tourist arrivals moved into negative territory in the second half of 2008, and ended up only 2% for the year, compared to a 7% increase in The negative trend intensified during 2009, exacerbated in some countries due to the outbreak of the H1N1 influenza virus, resulting in a worldwide decline of 4.2% in 2009 to 880 million international tourists arrivals, and a 5.7% decline in international tourism receipts. The contribution of Travel & Tourism to Gross Domestic Product (GDP) is expected to rise 9.5% (US$10,478 bn) by I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

155 Tourism is important, and in some cases, vital for many countries. It was recognized in the Manila Declaration on World Tourism of 1980 as "an activity essential to the life of nations because of its direct effects on the social, cultural, educational, and economic sectors of national societies and on their international relations." Tourism brings in large amounts of income in payment for goods and services available, accounting for 30% of the world's exports of services, and 6% of overall exports of goods and services. It also creates opportunities for employment in the service sector of the economy, associated with tourism. These service industries include transportation services, such as airlines, cruise ships, and taxicabs; hospitality services, such as accommodations, including hotels and resorts; and entertainment venues, such as amusement parks, casinos, shopping malls, music venues, and theatres. World tourism Statistics and Ranking The World Tourism rankings are compiled by the United Nations World Tourism Organization (UNWTO) as part of their World Tourism Barometer publication, which is released three times throughout the year. In the publication, UN regions and sub regions are ranked by the number of international visitor arrivals, by the revenue generated by inbound tourism, and by the expenditures of outbound travelers. The World Tourism Organization reports the following ten countries as the most visited in terms of the number of international travelers. In 2011, Turkey overtook the United Kingdom to become the sixth most visited country. Rank Country UNWTO Region International tourist arrivals (2011) International tourist arrivals (2010) Change 2010 to France Europe 79.5 million 77.1 million +3.0% 2 United States North America 62.3 million 59.8 million +4.2% 3 China Asia 57.6 million 55.7 million +3.4% 4 Spain Europe 56.7 million 52.7 million +7.6% 5 Italy Europe 46.1 million 43.6 million +5.7% 6 Turkey Europe 29.3 million 27.0 million +8.7% 7 United Kingdom Europe 29.2 million 28.3 million +3.2% 8 Germany Europe 28.4 million 26.9 million +5.5% 9 Malaysia Asia 24.7 million 24.6 million +0.6% 10 Mexico North America 23.4 million 23.3 million +0.5% 154 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

156 International tourism receipts International tourism receipts grew to US$1.03 trillion ( 740 billion) in 2011, corresponding to an increase in real terms of 3.8% from The World Tourism Organization reports the following countries as the top ten tourism earners for the year 2011, with the United States by far the top earner. Rank Country UNWTO Region International tourism receipts (2011) 1 United States North America $116.3 billion 2 Spain Europe $59.9 billion 3 France Europe $53.8 billion 4 China Asia $48.5 billion 5 Italy Europe $43.0 billion 6 Germany Europe $38.8 billion 7 United Kingdom Europe $35.9 billion 8 Australia Oceania $31.4 billion 9 India Asia $27.8 billion 10 Hong Kong (China) Asia $27.2 billion International tourism expenditure The World Tourism Organization reports the following countries as the top ten biggest spenders on international tourism for the year I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

157 Rank Country UNWTO Region International tourism expenditure (2011) 1 Germany Europe $84.3 billion 2 United States North America $79.1 billion 3 China Asia $72.6 billion 4 United Kingdom Europe $50.6 billion 5 France Europe $41.7 billion 6 Canada North America $33.0 billion 7 Russia Europe $32.5 billion 8 Italy Europe $28.7 billion 9 Japan Asia $27.2 billion 10 Australia Oceania $26.9 billion Most-visited cities by international tourist arrivals Top 20 most visited cities by estimated number of international visitors in 2012 by Forbes Rank City Country Region Visitors (millions) 1 London United Kingdom Europe Paris France Europe I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

158 3 Bangkok Thailand Asia Singapore Singapore Asia Istanbul Turkey Europe Hong Kong Hong Kong (China) Asia Madrid Spain Europe Dubai United Arab Emirates Middle East Frankfurt Germany Europe Kuala Lumpur Malaysia Asia Seoul South Korea Asia Rome Italy Europe New York United States North America Shanghai China Asia Barcelona Spain Europe Milan Italy Europe Amsterdam Netherlands Europe Vienna Austria Europe I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

159 19 Beijing China Asia Taipei Taiwan Asia 5.4 Top 10 most visited cities by estimated number of international visitors by selected year Ran k City Country UNWTO Region International visitors (millions) Year Notes 1 Paris France Europe Extrapolation, excluding outer suburbs visitors 2 London United Kingdom Europe Antalya Turkey Europe May include same-day visitors 4 New York City United States North America Projection, may include same-day visitors 5 Singapore Singapore Asia Excluding Malaysian citizens arriving by land 6 Kuala Lumpur Malaysia Asia Only hotel guests 7 Hong Kong Hong Kong (China) Asia Excluding Mainland Chinese visitors 8 Dubai United Arab Emirates Middle East Only hotel and hotel apartment guests 9 Istanbul Turkey Europe May include same-day visitors 158 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

160 10 Bangkok Thailand Asia Indian Scenario Introduction India is believed to be one of the top most tourism spot from , having the highest ten year growth potential, according to the World Travel and Tourism Council (WTTC). The country's travel and tourism industry is one of the most profitable industries in the country, and is credited with contributing a substantial amount of foreign exchange. Indian tourism offers a potpourri of different cultures, traditions, festivals, and places of interest. India was ranked fifth in the world for hotels with the best business outlook, according to a report by Trip Advisor. The country showed optimism with the highest proportion of businesses in Asia-Pacific (APAC) region. India was also ranked highest globally, among all countries surveyed for staff turnover, based on increased staff levels. Moreover, India has also emerged as one of the world's most cost-efficient medical tourism destinations. Medical tourism in the country is a sunrise sector valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year. It is expected that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during , according to a RNCOS report titled 'Booming Medical Tourism in India'. Market Size The foreign tourist arrivals (FTAs) during September 2012 were registered at 415,000 as compared to FTAs of 402,000 during September A growth of 3.2 per cent was registered in September 2012 over September The foreign exchange earnings (FEE) during September 2012 were worth Rs 6,652 crore (US$ 1.26 billion) as compared to Rs 5,748 crore (US$ 1.09 billion) in September The growth rate of FEE in rupee terms was 15.7 per cent in September 2012 over the corresponding month a year ago. The FEE through tourism in India was recorded at Rs 77,591 crore (US$ billion) during The amount of FDI inflow into the hotel and tourism sector during April 2000 to July 2012 was worth US$ 3, million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce. The overall hotel rates in India registered an increase of 12 per cent during the first six months of the year. This was due to a surge in demand from domestic travellers, as per the latest Hotels Price Index (HPI) study conducted by Hotels.com. The index looks at prices that people paid for their hotel rooms around the world. Investments India and Bulgaria plan to explore the possibilities of cooperation in the tourism sector. The two countries emphasized upon the need to start exchanges of visits of tour operators and opinion makers to promote tourism between the two countries Federation of Hotel & Restaurant Associations of India (FHRAI) has signed four memorandum of understanding (MoUs) with its international counterparts, spanning in USA, Europe, Middle East, UK, China and United Nations World Tourism Organisation (UNWTO) to exchange expertise and fraternity strategy evolution US-based Wyndham Hotel Group is set to expand to 70 properties in India by "India is a key market for us and we have nearly doubled our presence in the past two years," as per Mr Frank Trampert, Managing Director (APAC), Wyndham 159 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

161 The Government of Maharashtra plan to set up an international cruise terminal at Mumbai port to attract international cruise tourists from Europe and the US KEF Company plans to invest Rs 1,600 crore (US$ million) in Kerala. The project includes a luxury hotel, integrated manufacturing facilities and a super specialty hospital in Kozhikode Toyota Enterprises has entered into a joint venture (JV) with the Bengaluru-based Hyagreev Hotels, which runs The Chancery Hotel in Bengaluru. The project is Toyota Enterprises' first, outside Japan Daiwik Hotels Pvt Ltd that debuted with a four-star property at Rameswaram in Tamil Nadu, plans to have a chain of properties at various pilgrimage centres in the country ITC has launched the world's largest LEED Platinum green hotel (an eco certificate), Grand Chola, in Chennai, Tamil Nadu, with an investment of over Rs 1,200 crore (US$ million) Government Initiatives The Ministry of Tourism, Government of India, endeavours to position India as a preferred tourism destination to promote various Indian tourism products vis-à-vis competition faced from various destinations and to increase India's share of the global tourism market. The Government of India allows 100 per cent foreign direct investment (FDI) in the hotel sector on automated basis. Some of the major initiatives taken by the Government of India to promote tourism and hospitality sector in the country are: The Union Government has decided to provide jobs to 100,000 youths in the tourism industry during the current financial year to cater to the millions of foreign tourists visiting the country annually. In 2011, a total of 6.29 million foreign tourists visited India. The Government plans to double the figure within five years Maharashtra has topped the list in number of foreign tourist visits (FTVs), followed by Tamil Nadu and New Delhi. The State received nearly 4.8 million tourists, according to the latest report from the Ministry of Tourism. The contribution of top 10 States was about 90.1 per cent to the total number of foreign tourists visits in the country for 2011 Gujarat has allocated Rs 400 crore (US$ million) for tourism promotion in the State during the current fiscal. The amount includes Rs 120 crore (US$ million) as grant which has been approved by the Planning Commission for The Planning Commission has approved Rs 1,200 crore (US$ million) to promote coastal tourism in Gujarat, as per Mr Sanjay Kaul, Commissioner and Managing Director, Tourism Corporation of Gujarat Ltd In an endeavour to give a stimulus to the 'Incredible India' campaign and cinema as a sub-brand of Incredible India, at various international film festivals abroad, the Ministry of Information and Broadcasting (I&B) and Ministry of Tourism have signed a memorandum of understanding (MoU) to provide support for film tourism The Ministry of Tourism has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The Indian tourism industry has been witnessing an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to increase up to US$ billion by the end of Road Ahead India's rich cultural heritage and history, food, friendly people, architectural monuments, hospitality and services are positive strengths for its tourism sector, which make it ahead of many of the emerging markets. Today, tourism is the most vibrant tertiary sectors and has a strong hold on the economy. Tourism contributes 6.23 percent to the national gross domestic product (GDP) and 8.78 per cent of the total employment in India. The World Travel and Tourism Council (WTTC) named India along with China as one of the fastest growing tourism industries for the next 10 to 15 years. 160 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

162 The presence of world-class hospitals and skilled medical professionals make India a preferred destination for medical tourism. The segment could earn India US$ 2.2 billion per year by Tour operators are teaming up with hospitals to tap this market. Cruise shipping is one of the most dynamic and fastest growing components of the global leisure industry. India with a vast and beautiful coastline, virgin forests, and undisturbed idyllic islands can be a fabulous tourist destination for cruise tourists. On the other front, India has potential to develop the rural tourism industry. This can benefit the local community economically and socially, and enable interaction between tourists and locals f or a mutually enriching experience. Development and impact of tourism industry in India Present Situation and Features of Tourism in India Today tourism is the largest service industry in India, with a contribution of 6.23% to the national GDP and providing 8.78% of the total employment. Indiawitnesses more than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate. The Ministry of Tourism is the nodal agency for the development and promotion of tourism in India and maintains the "Incredible India" campaign. According to World Travel and Tourism Council, India will be a tourism hotspot from , having the highest 10-year growth potential. As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage Sites, both natural and cultural, rich fauna, and strong creative industries in the country. India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by The 2010 Commonwealth Games in Delhi are expected to significantly boost tourism in India further. [ Moreover, India has been ranked the "best country brand for value-for-money" in the Country Brand Index (CBI) survey conducted by Future Brand, a leading global brand consultancy. India also claimed the second place in CBI's "best country brand for history", as well as appears among the top 5 in the best country brand for authenticity and art & culture, and the fourth best new country for business. India made it to the list of "rising stars" or the countries that are likely to become major tourist destinations in the next five years, led by the United Arab Emirates, China, and Vietnam. [ Tourist Attractions in India: India is a country known for its lavish treatment to all visitors, no matter where they come from. Its visitor-friendly traditions, varied life styles and cultural heritage and colourful fairs and festivals held abiding attractions for the tourists. The other attractions include beautiful beaches, forests and wild life and landscapes for eco-tourism; snow, river and mountain peaks for adventure tourism; technological parks and science museums for science tourism; centres of pilgrimage for spiritual tourism; heritage, trains and hotels for heritage tourism. Yoga, ayurveda and natural health resorts and hill stations also attract tourists. The Indian handicrafts particularly, jewellery, carpets, leather goods, ivory and brass work are the main shopping items of foreign tourists. It is estimated through survey that nearly forty per cent of the tourist expenditure on shopping is spent on such items. Despite the economic slowdown, medical tourism in India is the fastest growing segment of tourism industry, according to the market research report Booming Medical Tourism in India. The report adds that India offers a great potential in the medical tourism industry. Factors such as low cost, scale and range of treatments provided in the country add to its attractiveness as a medical tourism destination. Future Prospects: According to the latest Tourism Satellite Accounting (TSA) research, released by the World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in March 2009: The demand for travel and tourism in India is expected to grow by 8.2 per cent between 2010 and 2019 and will place India at the third position in the world. India's travel and tourism sector is expected to be the second largest employer in the world, employing 40,037,000 by I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

163 Capital investment in India's travel and tourism sector is expected to grow at 8.8 per cent between 2010 and The report forecasts India to get capital investment worth US$ 94.5 billion in the travel and tourism sector in India is projected to become the fifth fastest growing business travel destination from with an estimated real growth rate of 7.6 per cent. Constraints: The major constraint in the development of tourism in India is the non-availability of adequate infrastructure including adequate air seat capacity, accessibility to tourist destinations, accommodation and trained manpower in sufficient number. Poor visitor experience, particularly, due to inadequate infrastructural facilities, poor hygienic conditions and incidents of touting and harassment of tourists in some places are factors that contribute to poor visitor experience. Impact of tourism in india Tourism industry in India has several positive and negative impacts on the economy and society. These impacts are highlighted below. Positive impacts 1. Generating Income and Employment: Tourism in India has emerged as an instrument of income and employment generation, poverty alleviation and sustainable human development. It contributes 6.23% to the national GDP and 8.78% of the total employment in India. Almost 20 million people are now working in the India s tourism industry. 2. Source of Foreign Exchange Earnings: Tourism is an important source of foreign exchange earnings in India. This has favourable impact on the balance of payment of the country. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate. 3. Preservation of National Heritage and Environment: Tourism helps preserve several places which are of historical importance by declaring them as heritage sites. For instance, the Taj Mahal, the Qutab Minar, Ajanta and Ellora temples, etc, would have been decayed and destroyed had it not been for the efforts taken by Tourism Department to preserve them. Likewise, tourism also helps in conserving the natural habitats of many endangered species. 4. Developing Infrastructure: Tourism tends to encourage the development of multiple-use infrastructure that benefits the host community, including various means of transports, health care facilities, and sports centers, in addition to the hotels and high-end restaurants that cater to foreign visitors. The development of infrastructure has in turn induced the development of other directly productive activities. 5. Promoting Peace and Stability: Honey and Gilpin (2009) suggests that the tourism industry can also help promote peace and stability in developing country like India by providing jobs, generating income, diversifying the economy, protecting the environment, and promoting cross-cultural awareness. However, key challenges like adoption of regulatory frameworks, mechanisms to reduce crime and corruption, etc, must be addressed if peace-enhancing benefits from this industry are to be realized. Negative impacts 1. Undesirable Social and Cultural Change: Tourism sometimes led to the destruction of the social fabric of a community. The more tourists coming into a place, the more the perceived risk of that place losing its identity. A good example is Goa. From the late 60's to the early 80's when the Hippy culture was at its height, Goa was a haven for such hippies. Here they came in thousands and changed the whole culture of the state leading to a rise in the use of drugs, prostitution and human trafficking. This had a ripple effect on the country. 2. Increase Tension and Hostility: Tourism can increase tension, hostility, and suspicion between the tourists and the local communities when there is no respect and understanding for each other s culture and way of life. This may further lead to violence and other crimes committed against the tourists. The recent crime committed against Russian tourist in Goa is a case in point. 3. Creating a Sense of Antipathy: Tourism brought little benefit to the local community. In most all-inclusive package tours more than 80% of travelers fees go to the airlines, hotels and other international companies, not to local businessmen and workers. Moreover, large hotel chain restaurants often import food to satisfy foreign visitors and rarely employ local staff for senior management positions, preventing local farmers and workers from reaping the benefit of their presence. This has often created a sense of antipathy towards the tourists and the government. 162 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

164 4. Adverse Effects on Environment and Ecology: One of the most important adverse effects of tourism on the environment is increased pressure on the carrying capacity of the ecosystem in each tourist locality. Increased transport and construction activities led to large scale deforestation and destabilisation of natural landforms, while increased tourist flow led to increase in solid waste dumping as well as depletion of water and fuel resources. Flow of tourists to ecologically sensitive areas resulted in destruction of rare and endangered species due to trampling, killing, disturbance of breeding habitats. Noise pollution from vehicles and public address systems, water pollution, vehicular emissions, untreated sewage, etc. also have direct effects on bio-diversity, ambient environment and general profile of tourist spots. Environmental impact of tourism in India The tourism industry in India can have several positive and negative impacts on the environment which are discuss below. Positive impacts 1. Direct Financial Contributions: Tourism can contribute directly to the conservation of sensitive areas and habitat. Revenue from park-entrance fees and similar sources can be allocated specifically to pay for the protection and management of environmentally sensitive areas. Special fees for park operations or conservation activities can be collected from tourists or tour operators. 2. Contributions to Government Revenues: The Indian government through the tourism department also collect money in more far-reaching and indirect ways that are not linked to specific parks or conservation areas. User fees, income taxes, taxes on sales or rental of recreation equipment, and license fees for activities such as rafting and fishing can provide governments with the funds needed to manage natural resources. Such funds can be used for overall conservation programs and activities, such as park ranger salaries and park maintenance. 3. Improved Environmental Management and Planning: Sound environmental management of tourism facilities and especially hotels can increase the benefits to natural environment. By planning early for tourism development, damaging and expensive mistakes can be prevented, avoiding the gradual deterioration of environmental assets significant to tourism. The development of tourism has moved the Indian government towards this direction leading to improved environmental management. 4. Raising Environmental Awareness: Tourism has the potential to increase public appreciation of the environment and to spread awareness of environmental problems when it brings people into closer contact with nature and the environment. This confrontation heightens awareness of the value of nature among the community and lead to environmentally conscious behavior and activities to preserve the environment. 5. Protection and Preservation of Environment: Tourism can significantly contribute to environmental protection, conservation and restoration of biological diversity and sustainable use of natural resources. Because of their attractiveness, pristine sites and natural areas are identified as valuable and the need to keep the attraction alive can lead to creation of national parks and wildlife parks. In India, new laws and regulations have been enacted to preserve the forest and to protect native species. The coral reefs around the coastal areas and the marine life that depend on them for survival are also protected. Negative Impacts 1. Depletion of Natural Resources: Tourism development can put pressure on natural resources when it increases consumption in areas where resources are already scarce. (i) Water resources: Water, especially fresh water, is one of the most critical natural resources. The tourism industry generally overuses water resources for hotels, swimming pools, golf courses and personal use of water by tourists. This can result in water shortages and degradation of water supplies, as well as generating a greater volume of waste water. ( In dryer regions like Rajasthan, the issue of water scarcity is of particular concern. (ii) Local resources: Tourism can create great pressure on local resources like energy, food, and other raw materials that may already be in short supply. Greater extraction and transport of these resources exacerbates the physical impacts associated with their exploitation. Because of the seasonal character of the industry, many destinations have ten times more inhabitants in the high season as in the low season. A high demand is placed upon these resources to meet the high expectations tourists often have (proper heating, hot water, etc.). (iii) Land degradation: Important land resources include minerals, fossil fuels, fertile soil, forests, wetland and wildlife. Increased construction of tourism and recreational facilities has increased the pressure on these resources and on scenic landscapes. Direct impact on natural resources, both renewable and nonrenewable, in the provision of tourist facilities is caused by the use of land for accommodation and other infrastructure provision, and the use of building materials ( 163 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

165 Forests often suffer negative impacts of tourism in the form of deforestation caused by fuel wood collection and land clearing e.g. the trekking in the Himalayan region, Sikkim and Assam. 2. Pollution Tourism can cause the same forms of pollution as any other industry: air emissions, noise, solid waste and littering, releases of sewage, oil and chemicals, even architectural/visual pollution ( (i) Air and Noise Pollution: Transport by air, road, and rail is continuously increasing in response to the rising number of tourist activities in India. Transport emissions and emissions from energy production and use are linked to acid rain, global warming and photochemical pollution. Air pollution from tourist transportation has impacts on the global level, especially from carbon dioxide (CO2) emissions related to transportation energy use. And it can contribute to severe local air pollution. Some of these impacts are quite specific to tourist activities where the sites are in remote areas like Ajanta and Ellora temples. For example, tour buses often leave their motors running for hours while the tourists go out for an excursion because they want to return to a comfortably air-conditioned bus. Noise pollution from airplanes, cars, and buses, as well as recreational vehicles is an ever-growing problem of modern life. In addition to causing annoyance, stress, and even hearing loss for humans, it causes distress to wildlife, especially in sensitive areas ( (ii) Solid waste and littering: In areas with high concentrations of tourist activities and appealing natural attractions, waste disposal is a serious problem and improper disposal can be a major despoiler of the natural environment - rivers, scenic areas, and roadsides. In mountain areas of the Himalayas and Darjeeling, trekking tourists generate a great deal of waste. Tourists on expedition leave behind their garbage, oxygen cylinders and even camping equipment. Such practices degrade the environment particularly in remote areas because they have few garbage collection or disposal facilities ( (iii) Sewage: Construction of hotels, recreation and other facilities often leads to increased sewage pollution. Wastewater has polluted seas and lakes surrounding tourist attractions, damaging the flora and fauna. Sewage runoff causes serious damage to coral reefs because it stimulates the growth of algae, which cover the filterfeeding corals, hindering their ability to survive. Changes in salinity and siltation can have wide-ranging impacts on coastal environments. And sewage pollution can threaten the health of humans and animals. Examples of such pollution can be seen in the coastal states of Goa, Kerela, Maharashtra, Tamil Nadu, etc. 3. Destruction and Alteration of Ecosystem An ecosystem is a geographic area including all the living organisms (people, plants, animals, and microorganisms), their physical surroundings (such as soil, water, and air), and the natural cycles that sustain them. Attractive landscape sites, such as sandy beaches in Goa, Maharashtra, Kerela, Tamil Nadu; lakes, riversides, and mountain tops and slopes, are often transitional zones, characterized by species-rich ecosystems. The threats to and pressures on these ecosystems are often severe because such places are very attractive to both tourists and developers. Examples may be cited from Krushedei Island near Rameswaram. What was once called paradise for marine biologists has been abandoned due to massive destruction of coral and other marine life. Another area of concern which emerged at Jaisalmer is regarding the deterioration of the desert ecology due to increased tourist activities in the desert. Moreover, habitat can be degraded by tourism leisure activities. For example, wildlife viewing can bring about stress for the animals and alter their natural behavior when tourists come too close. Safaris and wildlife watching activities have a degrading effect on habitat as they often are accompanied by the noise and commotion created by tourists. Conclusion Tourism industry in India is growing and it has vast potential for generating employment and earning large amount of foreign exchange besides giving a fillip to the country s overall economic and social development. But much more remains to be done. Eco-tourism needs to be promoted so that tourism in India helps in preserving and sustaining the diversity of the India's natural and cultural environments. Tourism in India should be developed in such a way that it accommodates and entertains visitors in a way that is minimally intrusive or destructive to the environment and sustains & supports the native cultures in the locations it is operating in. Moreover, since tourism is a multi-dimensional activity, and basically a service industry, it would be necessary that all wings of the Central and State governments, private sector and voluntary organisations become active partners in the endeavour to attain sustainable growth in tourism if India is to become a world player in the tourism industry. 164 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

166 CASE STUDY Adventure Tourism Market Development in North-East India Situation The Tourism Department, Government of Assam in NE India, recognizing the value of tourism as an economic development tool, wanted support in developing adventure tourism responsibly and sustainably. With tourism to India growing at 13.5% per year, state policymakers saw the opportunity to draw more visitors to Assam, but were concerned about preserving important cultural and natural resources. They chose an adventure tourism development route, defined according to a consumer-based understanding of adventure, which called for the development of products and itineraries that would include: Nature and wildlife exploration Cultural interactions and learning which may include regionally unique spiritual and religious experiences, and exposure to defining cultural aspects such as the production of tea in Assam Rural experiences Active, physical sports whether strenuous or easy including but not limited to cycling, trekking and hiking, kayaking and other river exploration, hang-gliding, and horseback riding Challenge This beautiful NE Indian state, bounded by Himalayan foothills and cut through by the powerful currents of the Brahmaputra River, has little existing tourism infrastructure and low market awareness. The state s tourism department leaders requested not only recommendations for product development, but also wanted to ensure that new products would reach an audience of tour operators and travelers to begin operating trips in the region. In addition, the state s leaders were very concerned that any new market development initiatives encourage sustainable, responsible tourism. Solution Assam s tourism officials selected Xola as its partner in this important initiative because of its specialization in adventure tourism, the linkages to industry its approach brings, and its overriding emphasis on sustainable tourism development for the benefit of communities and the environment. Xola completed a Feature Adventure Destination analysis for Assam using the Adventure Tourism Development Index approach developed by the Adventure Travel Trade Association (ATTA), The George Washington University (GW), and Xola Consulting, Inc. Specifically, the goal of the project was two-fold: To support Assam in developing its adventure tourism market by providing specific market development guidance; and To provide access to markets and media through the consulting partners (ATTA, GW). Results As a result of this study: A responsible tourism development philosophy for the state was recommended Seven adventure tourism zones or Hotspots were defined A structure for organizing specific activities relative to product development, human resources development, infrastructure improvement, marketing, and impact monitoring was created Highlights of the research showcasing Assam s unique assets will be revealed to more than 450 international adventure tour operators & adventure and mainstream travel media in a special report released through the Adventure Travel Trade Association ( the largest trade organization for adventure tourism companies. 165 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

167 CASE STUDY Sustainable tourism a case study of Nainital, Uttarakhand Tourists definitely play an important role in a region s economy as they bring a net inflow of money. There are examples of regions which are dependent solely on tourists for driving their economy. To minimize the negative impacts and pollution that results due to rigorous tourism activities, concepts of eco tourism and environmental tourism came into place. Sustainable tourism goes one step further and makes tourism ecologically sustainable over a long run. It focuses on but not limited to conservation of natural resources and to conserve and cherish the value of local traditions, customs and cultural heritage. According to the World Tourism Organization, Sustainable Tourism is: envisaged as leading to management of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity, and life support systems. While both eco-tourism and sustainable tourism may seem concurrent terms, Eco Tourism aims at tourism targeted at nature with the objective to bring about improvement in lives of people and not causing any harm to the environment whereas sustainable tourism is much broader in scope and encompasses many aspects of tourism in itself. The functions of both are largely the same. The tourist is as good as a local person when he visits a place. If a local flouts the rule of the law, the immediate reaction of the tourist is to follow him because he thinks that if the local can do it, so can I. In other words, the actions of the local people are imitated by tourists, if a place is such that nobody follows traffic rules, will a tourist follow them? He realizes that the rules are not stringent in that particular place and starts flouting the rules himself. Take the case of Nainital, a popular tourist destination of Uttarakhand that was being affected by pollution as a result of the negative impacts of the Tourism industry. Nainital is entirely dependent on the tourism industry with little production happening in the town. It is the main livelihood of the people. The people of Nainital realized the ill effects of pollution which would one day threaten the very existence of the town itself. A petition was filed. Following are the excerpts of the Court order: Nainital, a beautiful butterfly, is said to be turning into an ugly caterpillar.the growing traffic, with the growth of the town and big turnout of tourists, has contributed much to the environmental pollution. The increased traffic has in its wake brought noise pollution. The Court setup an enquiry committee, whose findings were as given below: Heavy vehicles like buses on the Mall Road and the bridle paths. They also enter Malli Tal and Talli Tal Bazars. I myself have seen it happening in Nainital, when I used to board a bus for Delhi, it used to be invariably from the Mall Road although the road was not meant to face such heavy traffic as it was already crowded by the tourists taking a stroll in the evening. The lake water was found full of human waste and horse dung and other wastes, as already noted. The horse stand having been allowed to be erected near the lake and trotting around the lake being permissible, the report states that horse dung in abundance enters and reaches the lake. The tourists who enjoy boating in the lake throw felt over edibles and polythene-bags in the lake. Hill cutting and destruction of forests was confirmed. Construction of buildings is going on unauthorised and in a big way. The Commissioner has mentioned about illegal construction of office even by Kuman Mandal Vikas Nigam of the State Government and Lake Development Authority, which constructed several triplestoreyed flats which have been declared as dangerous. Following the petition, an order was passed by the Bench stating that heavy vehicular movement be banned on the Mall Road, care to be taken that horse dung should not reach the lake, the Horse Stand was subsequently 166 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

168 shifted far away from the main town to its present location at Land s End. I was a student in Nainital when this shifting took place. Horse riding was very popular amongst the tourists in Nainital and much hue and cry was raised; the horse owners pelted stones at the police. It is sad that the Horse owners lost their income but sometimes decisions need to be taken keeping in mind the larger interests of public. I myself have witnessed less dirtiness on the roads, earlier the roads were covered with horse dung which not only spreads pollution but is a primary source of disease too. A movement called the MISSION BUTTERFLY was launched calling for action from the local community of Nainital. It is an integrated solid waste management program (ISWM) promoting the whole-of-life (cradle to grave) management of solid material wastes with strategies for recycling and minimisation and is owned and managed by the community notionally divided into clusters (Swacchtha Samiti) of about one thousand persons (say 250 families). The key features of the scheme are the well connected Women s Health Workers (ASHAs) who already operate in the community; the use of dedicated Jumbo Bins (green for bio-degradable, ie. composting and blue coloured for recycling and disposal); garbage collectors; the provision of services for support and training; and various systems for waste management. It requires the collection, segregation and management of waste; the use of composting and recycling facilities including privately maintained dry-storage facilities. Income is generated from the collection fees, fees for consultants and service providers, the sale of resultant compost and the recyclables such as plastic, metals and glass. To encourage wider participation and the evolution of community spirit membership signs (Green Home logo) are provided to signal household and institutional support. The Mission Butterfly integrated solid waste management (ISWM) program is managed by the Lok Chetna Manch as the executing agency for a two year transition period before assumption by the Nainital Nagar Palika Parishad (Municipal Board). Income generation occurs from fees collected from households, hotels and restaurants, institutions and other waste generators; sales of compost, shredded paper and recyclable waste (eg plastics, glass and metals). The tourists were checked to see if they were carrying any plastic or polythene with them and requested to part with it before entering the town. It is hoped that slowly they would become responsible tourists and while visiting the town again, they would not bring any plastic with them. Outside vehicles were refused entry and a new taxi stand was constructed outside the town to reduce the traffic pressure inside the town. A Tourist is as good as the town that he goes to. If you give him clean facilities, a clean town, he will keep it clean. A dirty town polluted by the inhabitants themselves will only invite more pollution from the visiting tourists. Responsible tourism did start in Nainital but the first step was taken by the society of Nainital. We have examples such as the Delhi Metro which is kept spic and span in spite of being used by thousands of locals and tourists. They never throw any litter and follow queues and these are the same tourists who throw waste in other areas of Delhi. Tourism is a wonderful way of earning income and for a town like Nainital which is dependent on the Tourism industry, it is pertinent to make the tourist- a model tourist so that he also enjoys visiting the town and the town also derives benefits from his visit. Retail Sector Retail Industry is one of the oldest industries from the past many centuries. Retailers perform the task of middleman and have been serving the ultimate consumer from the early barter economy to the new technological economy. Their primary function is to sell goods and services at a markup that allows them to earn a profit and attract repeat business. They have however, undergone great deal of change. There has never been so much competition for the retail dollar. Likewise, there has never been so much change in grocery retailing. 167 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

169 The process of Retailing involves selling products and services to consumers for their personal or family use. Service providers, like dentists, hotels and hair salons, and on-line stores, like Amazon.com, are also retailers. Regardless of other functions these businesses perform, they are still retailers when they interact with the final user of the product or service. Why is Retailing Important? Retailing acts as the final link between consumers and manufacturers, and is a vital part of the business world. A retailer, typically, is someone who does not effect any significant change in the product except breaking the bulk. Whether a retailer is selling laundry detergent or automotive services, customer loyalty is often the key to longterm profits and growth. Many retailers focus on building lasting relationships with customers by placing strong emphasis on customer service and creating an appealing shopping experience, whether it be online, over the phone, or in a showroom. Broadly the organised retail sector can be divided into two segments, In-Store Retailers, who operate fixed point-of-sale locations, located and designed to attract a high volume of walk-in customers, and the non-store retailers, who reach out to the customers at their homes or offices. Apart from using the internet for communication (commonly called e-tailing), non-store retailers did business by broadcasting of infomercials, broadcasting and publishing of direct-response advertising publishing of traditional and electronic catalogues, door-to-door solicitation and temporary displaying of merchandise (stalls). The most common types of In-store retailers include department, discount, and specialty stores, superstores and wholesale clubs, factory outlets, and catalog companies. Technology and the Internet have had a tremendous impact on the retail industry, automating operations such as inventory control, sales tracking, and shipping, and changing the way many retailers transact with customers, from marketing to e-commerce. But while the logistics of retail may be changing, retailers' mission remains the same: to entice consumers to buy their products and to get them to come back again and again. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. It would be very costly and time consuming for you to locate, contact and make a purchase from the manufacturer every time you wanted to buy a candy bar, a sweater or a bar of soap. Similarly, it would be very costly for the manufacturers of these products to locate and distribute them to consumers individually. By bringing multitudes of manufacturers and consumers together at a single point, retailers make it possible for products to be sold, and, consequently, business to be done. Retailers also provide services that make it less risky and more fun to buy products. They have salespeople on hand who can answer questions, may offer credit, and display products so that consumers know what is available and can see it before buying. In addition, retailers may provide many extra services, from personal shopping to gift wrapping to delivery, that increase the value of products and services to consumers. In today's customer driven economy the power has shifted from the manufacturer to the retailer. He has gained prominence and the entire economy is becoming retailer-driven. Global retail market At the beginning of 2009, consumer demand in many countries primarily the Western but also some of the emerging economies in Europe began to fall, resulting in a significant decline in retail spending that many feared would prove lasting. However, by the end of 2009, sentiment had improved, and consumers bar some exceptions proved more resilient than was expected. In 2010, many markets saw some growth and emerging markets even saw strong growth. Most of the big global (food) retailers continued to post relatively strong sales throughout the crisis, although grocery retailers with high proportion of non-food were hit harder. More stable market conditions are encouraging strong retailers to continue with their expansion plans albeit more slowly and less aggressively than in the earlier part of the decade. 168 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

170 The global retail market has changed over past decades, as the enlargement of the EU, globalization, the emergence of China and India as powerhouses of the world economy and the rise of the Middle East have all impacted on retailers expansion and location decisions. The economic crisis of 2008/09 is likely to cause a further shift in the global pattern of consumer spending. There has been a marked shift in the distribution of global wealth. The emerging markets have seen their share of global output and wealth rise significantly, driven by rising incomes, higher savings ratios, strong investment and export growth. The much stronger performance of key emerging economies through the crisis and stronger growth prospects are likely to accelerate the recent shift in global economic dynamics. In the Western countries, even when economies start to recover, consumer spending growth will be limited. The destruction of housing wealth over past years and fiscal austerity will weaken consumer spending and retail sales growth. With consumers focusing on value/ price, discount store growth is strengthening in key markets of Europe and North America last year. This trend is set to continue, with discount retailers set for the strongest growth in the years ahead. Hypermarkets will see relatively low growth due to saturated markets, the high cost of investment per store and growing pressure on non-food sales. The recovery in retail development activity in Western Europe and the US is very cautious, with owners looking at refurbishments and extensions. In these mature shopping centre markets, the emphasis is shifting towards more proactive asset management initiatives. The shift in global wealth creation has major consequences for global retailers. Consequently, leading (grocery) retailers are increasingly focused on emerging markets to drive growth. Asia looks to have the best growth prospects, with both China and India continuing to expand firmly. Brazil is also doing well, on the back of significant investment and rising consumer incomes. A number of countries in the Middle East and North Africa are also on the target lists of international retailers, due to investment in infrastructure, growing tourism, an increasing middle class and rising disposable incomes. A.T. Kearney s Global Retail Development Index ranks countries according to their retail market attractiveness. A market is attractive for retailers if it has high retail sales per capita, (urban) population, and business efficiency. Market saturation is reached if there is a high share of modern retailing, number of international retailers, modern retail sales area per urban inhabitant, and market share of leasing retailers. A window of opportunity is identified when retail expansion is attractive, in particular for first movers. According to the research, currently the markets offering the best opportunities for retailers are in: Asia: China, India, Vietnam, Indonesia and Malaysia Middle East/ North Africa: Kuwait, Saudi Arabia, the UAE, Tunisia, Egypt, Morocco Europe: Russia, Turkey, Albania, Bulgaria, Macedonia America: Brazil, Chile, Uruguay, and Peru Nov10.pdf Introduction 169 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

171 India is one of the most desirable retail destinations in the world. India has emerged as the fifth most favorable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia, according to A T Kearney's Global Retail Development Index (GRDI) "India remains a high potential market with accelerated retail growth of per cent expected over the next five years," highlighted the report. Reforms in the Indian retail sector announced recently could provide an opportunity for Dutch companies in supply chain management, as per Mr Alphonsus Stoelinga, Netherlands Ambassador to India. Market Size India's retail sector is worth US$ 350 billion and has a low organized retail penetration (ORP) of 5 per cent to 8 per cent and is now growing at a compound annual growth rate (CAGR) of 15 per cent to 20 per cent, according to a PricewaterhouseCoopers (PwC) research report titled 'Winning in India's retail sector: Factors for success'. The foreign direct investment (FDI) inflows in single-brand retail trading during April 2000 to September 2012 stood at US$ million, as per the latest data released by Department of Industrial Policy and Promotion (DIPP). E-tailing Retailers are using a mix of formats of which a relatively new but rapidly growing retail format is the online channel, which offers consumers convenience, price benefits and the ability to shop 24 hours a day. Though nascent, India's online retail market is growing at double-digit rates and is likely to be the next format that retailers will incorporate into their array of channels. As the world's 11th largest economy (and fourth-largest emerging economy after BRIC peers China, Brazil, and Russia), India has started to appear on ebusiness organizations' lists of key international markets. The e- commerce revenues in India is expected to increase more than five times, from US$ 1.6 billion in 2012 to US$ 8.8 billion in 2016, as per a Forrester report titled 'Trends in India's ecommerce Market'. In 2011, venture capitalists invested US$ 177 million in e-commerce in India. The Indian digital consumer industry, e-tailing is set to become a Rs 53,000 crore (US$ 9.76 billion) market by 2015 from the current Rs 3,600 crore (US$ million), as per a November report by Avendus Capital Pvt Ltd. Retail in Rural India Rural chains in India are focusing on hinterlands in a big way. For many companies, a large portion of their revenues comes from rural sales. This fact is further making marketers focus their strategies according to customers in rural areas. Videocon Industries promoted Next Retail plans to move out of the metros and re-locate its stores in tier 2 and 3 cities. "Consumers in smaller towns have an emotional connect with indigenous brands such as Videocon and there is a demand for home-grown brands and we would be pushing such brands in these markets," as per K S Raman, Director, Next Retail. FDI in Retail Growing urban Indian population has been driving organized retail in India. In addition, shift in the preference for branded products; convenient spending through debit/credit cards; and greater propensity to spend act as drivers for the sector. However, investors confidence was dampened because of the GOI s decision to put FDI in multi-brand retail policy on hold. Investors, in 2011, were anxiously waiting for the liberalization of the Indian retail sector, allowing big box retailers to come in and set up shop. Not only did this plan portend the creation of 10 million jobs in India, it also offered a way to alleviate supply bottlenecks and food price inflation. But only days after introducing the plan, political squabbles forced its retraction. This has damaged the GOI s credibility to foreign investors to a certain extent, who may decide to look elsewhere in the coming year. The 170 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

172 decision is a big disappointment for players such as Wal-Mart Stores Inc. and Tesco plc, which were planning to make major investments in the country. 30.9% Number of FDI projects: 68 in 2010 and 89 in % Number of jobs created by FDI in the sector: 30,561 in 2010 and 28,478 in % Value of FDI (US$ million): 4,197.7 in 2010 and 2,149.7 in CASE STUDY Foreign Direct Investment in Indian Retail Industry Abstract: India is one of the largest budding markets, with a population of over one billion. India is one of the biggest economies in the world in terms of purchasing power. The market size of Indian retail industry is about US $312 billion Foreign direct investment has boomed in post-reform India. Moreover, the composition and type of Foreign direct investment has changed considerably since India has opened up to world markets. This has fuelled high expectations that foreign direct investment may serve as a channel to the higher economic growth of India. Foreign direct investment in trade has developed into the fresh theatre of war flank by the pro-reform and anti-reform lobbies. Foreign investors are extremely eager on charisma in Indian retail sector. Incontrovertibly, foreign direct investment in retail is budding as a sort of litmus trial to the government's pledge to liberalization. This paper is going to try to give a better view of what is the Retailing, what are the types of retailing, Retail trade in India also explains different polices of FDI in India, and role of FDI in Indian retail industry, benefits of FDI. This paper also tries to outline impact on country and State-wise Number of Workers Engaged in Retail Trade by Type of Enterprises in India. Introduction Retailing is one of the most important sectors of India economy. It provides 9% employment to the total workforce and contributes around 15% to the Indian GDP. It could have been a welcome step in strengthening India s FDI regime with making it in tune with country s needs. The FDI policy has been moving away from the license mentality of protection against imagined foreign dictators towards a more open, healthy and competitive environment. This policy would have provided a window for the world class retailer Hermes, Tiffany & Co and Wal- Mart, etc. to set their foot in the booming Indian retail sector. The Indian Government believe that the opportunity of FDI in multibrand retail and further liberalization of single-brand retail trade will facilitate greater FDI inflows providing new opportunities and benefits besides quality improvement. At a time when declining investments have led to slower GDP growth, however, a healthy competition, between the large domestic retailers and those with FDI, should be maintained. Imposing socially desirable constraints on FDI funded retailers would lead into unfair competition. In spite of the recent developments in retailing and its immense contribution to the economy, retailing continues to be the least evolved industries and the growth of organized retailing in India has been much slower as compared to rest of the world. One main cause for this is that retailing is one of the few sectors where foreign direct investment is not allowed. Within the country, there have been protests by trading associations and other stakeholders against allowing FDI in retailing. In 2004, The High Court of Delhi referred to Black s Law Dictionary to define the term retail. The term retail is defined as a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale). Thus, retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. Retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. A retailer is involved in the act of selling goods to the individual consumer at a margin of profit. Retail trade in India After globalization our economies have moved from social sector to capital sector and there is a great need of foreign capital or investment in our country. As our economy is growing and targeting 10%development rate, 171 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

173 there is a great need of concentration on underdeveloped and potentially viable sector i.e. retail sector agriculture etc. Retailing in India is the largest private sector and second to agriculture in employment. India has highest retail outlet density Around 1.5 retail crore retail outlets. The retail sector contributes about 10-11%to Indian GDP and it is valued at an estimated Rs crore out of which organized retailing industry around Rs crore. All major players such as Wal-Mart, Tesco, Sainbury and others are keen to enter the retail market. "A.K.Kearney" ranked India 5th out of 30 most attractive retail markets in terms of investment. Recently government has taken certain action to liberalize the retail market in India. FDI Policy in India FDI as defined in Dictionary of Economics (Graham Bannock et.al) is investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy. In spite of the recent developments in retailing and its immense contribution to the economy, retailing continues to be the least evolved industries and the growth of organized retailing in India has been much slower as compared to rest of the world. One important reason for this is that retailing is one of the few sectors where foreign direct investment is not allowed. Within the country, there have been protests by trading associations and other stakeholders against allowing FDI in retailing. Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) The Reserve Bank of India ( RBI ) in this regard had issued a notification, which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, This notification has been amended from time to time. FDI Policy with Regard to Retailing in India It will be prudent to look into Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy issued in October 2010 which provide the sector specific guidelines for FDI with regard to the conduct of trading activities. a) FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route. b) FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of Single Brand products, subject to Press Note 3 (2006 Series). c) FDI is not permitted in Multi Brand Retailing in India. Role of FDI in Indian retail trade In January 2006, the Government relaxed FDI (foreign direct investment) controls on retailing to allow foreign retailers to participate directly in the Indian market for the first time by allowing equity ownership in `single brand' retailing. Thus, foreign entities are now allowed to operate their stores, but only if they are single-brand stores and only up to 51 per cent ownership. The impact of the consequent increase in FDI, in Indian retail, is expected to not just develop strong backward linkages but also create a domestic supply chain of international standards. What is encouraging now for these global majors is the new policy thrust, which intends to further liberalize the FDI regime in Indian retail. Though FDI in retail trade is as yet restricted, the Government of 172 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

174 India has a more liberal policy towards wholesale trade, franchising, and commission agents services, thus preparing the ground for FDI in retail as well. Foreign retailers have already started operations in India through various routes: 1. Joint ventures where the Indian firm is an export house. 2. Franchising (eg. Kentucky Fried Chicken, Nike). 3. Sourcing of supplies from smallscale sector; 4. Cash and carry operations (Giant in Hyderabad, Metro in Bangalore). 5. Non-store formats direct marketing (Amway). Large international retailers of home furnishing and apparels such as Pottery Barn, The Gap and Ralph Lauren have made India one of their major sourcing hubs. Up to 100 per cent FDI is allowed in cash and carry operations. The Great Wholesaling Club Ltd is one such example. In February 2002, the world s largest retailer, Wal-Mart, opened a global sourcing office in Bangalore. In November 2006, it announced its entry under a joint venture with the Indian corporation Bharti. For the time being, Bharti is to own the chain of frontend retail stores, while the two firms will have an equal share in a firm that will engage in wholesale, logistics, supply chain and sourcing activities. This is seen as a preliminary step by Wal-Mart pending the removal of all restrictions on FDI in retail trade. India as a Rising Destination for FDI India today represents the most compelling investment opportunity for mass merchant and food retailers looking to expand overseas. According to A.T. Kearney's annual global retail development index for 2005, India retail market totaling $300 billion is vastly undeserved and has grown at an average rate of 10% in the last five years. Present Government policy on FDI allows to have a presence of international brands through different routes i.e. Franchise, Joint venture, Manufacturing, Distribution, Cash and carry. For Indian Consumers the gradual and phase wise entry of foreign companies in retail involves three pivotal changes 1) New Technology 2) Improved Transparency in trade 3) sharing best practice. Foreign Players would displace the unorganized retailers because of their superior financial strengths Induce Unfair trade practices like predatory pricing, in the absence of proper regulatory guidelines. Create monopoly and promote cartels Give rise to cut throat competition rather than promoting incremental business. Increase in real estate prices and marginalize domestic entrepreneurs. Hence checks are to be injected to ensure the overall growth of small and big retailers and to create a level playing field for all. 173 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

175 The source of the pressure for allowing FDI in retail Why is the government so keen in inviting FDI in the retail sector? Let us look at some arguments made by the proponents of FDI: 1. Only a few global firms possess proprietary expertise in retail trade. They would not transfer their expertise to local firms unless they were allowed to operate in the domestic market. Reality: In the literature on retail, we could not trace the existence of any cutting edge proprietary expertise either technical or managerial. 2. The government needs FDI to meet its foreign exchange requirements. Reality: Because of large capital inflows, the Government of India is today burdened with huge and growing foreign exchange reserves. By April 13, 2007, the foreign exchange reserves had swollen to $203 billion. The argument for FDI in retail to attract foreign exchange is not tenable. 3. Only global retailers can satisfy the rising and varied demands of Indian consumers. Reality: It has yet to be shown which product or service is being offered by foreign retail firms is unavailable at present to Indian 174 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

176 consumers, or cannot be provided without FDI. Moreover, the alleged benefits of consumer choice are being inflated. Indeed, the availability of excessively wide choice makes it so complex and time-consuming for the consumer to decide that it leads to stronger loyalty to particular brands! Research reveals that an average grocery store in USA, offers 35,000 to 40,000 stock keeping units versus 12,000 to 15,000 thirty years ago. The suppliers offer about 20,000 new items each year; of which 1,000 are new efforts and the rest are line extensions. However, the top 5,000 items still account for about 90 percent of sales, as they did thirty years ago As per the National accounts, private final consumption expenditure, increased from Rs 19,26,858 crore in to Rs 32,26,826 crore in , at an average rate of 13.8 per cent per annum-. However, expenditure on some items like transport and communication; expenditure on food in hotels and restaurants; expenditure on rent, fuel and power; and expenditure on education and recreation are distinct from trade. Private consumption expenditure adjusted for items which could be considered a. close approximation to trade, increased from Rs 11,92,405 crore in to Rs 19,93,380 crore in , at an average rate of 13.7 per cent 3.Rate of growth of GDP at current market prices during this period at 14.5 per cent, was higher than this growth. Impact and Benefits to the Country Growth of Infrastructure Franchising Opportunity for local Entrepreneurs Inflow of funds and investments Implementation of IT in Retail Investment in Supply Chain, cold Chain and warehousing Increase number and Improve Quality of Employment Reduced cost and Increased Efficiency Provide better value to end Customer Hence it will lead to overall economic growth and create Benchmark. Conclusion Inward FDI has boomed in post reform India. At the same time, the symphony and type of FDI has changed considerably. The above analysis shows that FDI has positive and negative effects on India economy. It can be concluded that to keep pace with the forecast of Indian GDP, government should encourage foreign investment. To avoid its negative impact on local player s regulatory framework should be redesigned. Government should encourage FDI on gradual basis like currently it is allowed for single brand. India s retail sector remains offlimits to large international chains especially in multi-brand retailing. A number of concerns have been raised about opening up the retail sector to FDI in India. In this paper we quarrel that the potential benefits from allowing large retailers to enter the Indian retail market may balance the costs. Proof from the US suggests that FDI in organized retail could help begin inflation, particularly with wholesale prices. It is also expected that technical know-how from foreign firms, such as warehousing technologies and distribution systems, for example, will lend itself to improving the supply chain in India, especially for agricultural produce. India s experience between , particularly in the telecommunications and IT industries, showcases the various benefits of opening the door to large-scale investments in these sectors. Arguably, it is now the turn of retail. Insurance Industry The global insurance industry The global insurance industry is one of the largest sectors of finance. It ranges from consumer to corporate and industrial insurance, and even reinsurance, or insurance of insurance. The major insurance markets of the world are US, Europe, Japan, and South Korea. Emerging markets are found throughout Asia, specifically in India and China, and are also in Latin America. With the internet and other forms of high-speed communication, companies and individuals are now able to purchase insurance and related financial products from almost anywhere in the world. Increasing affluence, especially in developing countries, and a rising understanding of the need to protect wealth and human capital has led to significant growth in the insurance industry. Given the evolving and growing socio-economic conditions worldwide, insurance companies are increasingly reaching out across borders and are offering more competitive and customized products than ever before. 175 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

177 Global insurance platform has witnessed a phenomenal change over the past decade. The forces of globalization and liberalization have brought the insurance companies across the world closer to each other than ever before. The insurance landscape has changed significantly over the years due to many unforeseen incidents around the world like 9/11, SARS, derailment of corporate governance, natural disasters like Tsunami, Hurricane Katrina etc. Outsourcing is another major development in the insurance sector. Waning margins, massive claims disbursement and increasing competition in recent years, especially post 9/11, have compelled insurance companies to opt for outsourcing, to improve efficiency and channelize resources towards the core functions like product development and innovation. Over the past ten years, global insurance premiums have risen by more than 50%, with annual growth rates ranging between 2 and 10%. In 2004, global insurance premiums amounted to $3.3 trillion. The global insurance market grew by 7.6% in 2007 to reach a value of $3,688.9 billion. In 2012, the global insurance market is forecast to have a value of $4,608.5 billion, an increase of 24.9% since Life insurance dominates the global insurance market, accounting for 59.7% of the market s value. Europe accounts for 39.3% of the global insurance market s value. AXA generates 4.4% of the global insurance market s value. Top ten global insurance companies are american intl group(usa), AXA group (france), allianz worldwide(germany), Manulife financial (Japan),General group (italy), prudential financial (united states), met life (united states), Aviva(united kingdom) and Aegon(Netherland). Indian insurance sector A robust insurance sector stabilises any country s economy as it facilitates long-term funds for infrastructural development by strengthening the overall risk-taking ability. India s Rs. 221, 400 crore (US$ billion) insurance industry is at a stage of consolidation wherein many foreign players are eyeing the immense potential of the fast-growing economy. Relatively lower insurance penetration, rising income levels of the middle-class population and increasing awareness about the concept of insurance are certain factors that promise bright future for the Indian insurance segment. Life insurance products penetration in India is around 4.5 per cent while that of general insurance products is around 1 per cent. Indian insurance industry is rapidly opening up to foreign players. Currently, 22 out of 24 life insurance players and 18 out of 27 non-life insurers have foreign partners, and many more are vying to enter the Indian landscape. Booming insurance industry in India With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information. The strong growth potential of the country has also made international players to look at the Indian insurance market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance player. Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by Total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from to With the entry of several low-cost airlines, along with fleet expansion by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to boom in a big way in coming years. Home insurance segment is set to achieve a 100% growth as financial institutions have made home insurance obligatory for housing loan approvals. Health insurance is poised to become the second largest business for non-life insurers after motor insurance in next three years. 176 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

178 A booming life insurance market has propelled the Indian life insurance agents into the top 10 country list in terms of membership to the Million Dollar Round Table (MDRT) an exclusive club for the highest performing life insurance agents. India Insurance: History The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of The Indian Insurance Companies Act was passed in This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of India insurance. Indian Insurance: Sector Reform The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance sector. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad. Key Statistics Premium collection by general insurance companies increased by 24.7 per cent year-on-year (y-o-y) in September 2012 at Rs 6, crore (US$ 1.1 billion), according to the data compiled by the sector regulator Insurance Regulatory and Development Authority (IRDA). The total premium stood at Rs 34, crore (US$ 6.18 billion) for April-September In terms of premium collections for life insurance segment, private players collected Rs 7,095 crore (US$ 1.29 billion) in April-September 2012 period while state-owned Life Insurance Corp of India (LIC) recorded a remarkable 24 per cent y-o-y growth in premium collections at Rs 15, crore (US$ 2.82 billion) during the period. LIC s support helped the industry post a 15 per cent y-o-y growth in premium collected in the first half of New Developments/ Product Launches World Economic Forum s latest report Financial Development Report 2012 has named India as the world's top-ranked country in terms of life insurance density. Life insurance density is the ratio of direct domestic premiums for life insurance to per capita gross domestic product (GDP) of a country. India has been ranked 177 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

179 40th in terms of overall financial development of a country, but is much ahead of larger economies like the US, the UK, Japan and China for life insurance density. Cabinet s approval to raise foreign direct investment (FDI) limit in the insurance sector from 26 per cent to 49 per cent has opened gateways for foreign insurers. While Magma HDI General Insurance and Liberty Videocon General Insurance have initiated operations, Avantha group has entered into an alliance with Germany s Ergo Insurance Group to form Avantha Ergo Life Insurance Magma HDI General Insurance is a joint venture (JV) between Kolkata-based Magma Fincorp and Germany-based HDI-Gerling International Holding while Liberty Videocon General Insurance is a JV between US' Liberty Mutual Insurance and Videocon Group The Ergo Insurance Group (part of world s leading reinsurer Munich Re) and the Avantha Group, India's leading business conglomerate, have entered into a JV agreement in the space of life insurance. The new company, to be named Avantha Ergo Life Insurance Company Ltd, is expected to commence operations at the beginning of 2014, subject to regulatory approval Mahindra Finance s subsidiary Mahindra Insurance Brokers (MIBL) has inked a strategic partnership agreement with LeapFrog Investments, one of the world s largest investors in insurance to under-served consumers. LeapFrog s subsidiary, Inclusion Resources Singapore, would invest Rs crore (US$ million) for a 15 per cent stake in MIBL as per the agreement. The alliance would focus on introducing new range of products to the people who haven t got access to insurance services. Their first launch would contain health insurance products and services Religare Health Insurance and Magma Fincorp are two new entrants on the insurance block. Religare Health Insurance has taken off as a standalone health insurance company while non-banking financial company (NBFC) Magma Fincorp has ventured into the general insurance business through a JV with HDI Gerling, a leading German insurer. Magma HDI General Insurance (MHDI) will be the new entity Government Initiatives The Government of India has re-affirmed its efforts to push economic growth by increasing the FDI limit from 26 per cent to 49 per cent in insurance. Further, IRDA s final nod to insurance repositories will now facilitate demat policies in the insurance industry. The regulator has also introduced major relaxations in investment guidelines for life insurance companies wherein they would be allowed to buy credit protection through derivatives, lend up to 10 per cent of their shares and conduct short-term repo transactions in bonds. The six companies that have received IRDA approval for setting up insurance repositories are NSDL, CDSL, Karvy, CAMS and STCI. IRDA has also been making efforts to boost insurance companies to invest in infrastructure funds. It has come up with an exposure draft on investment norms wherein the regulator has mandated that total investment in housing and infrastructure should not be less than 15 per cent of the fund for life insurers and 5 per cent for general insurers. Road Ahead Industry experts believe that capital infusion through FDI will not only attract additional foreign funds to the sector, but will also increase the access of insurance and improve penetration. Foreign players would bring in the much needed technical aspects of insurance business, including product innovation, streamlining the claims settlement processes and introducing technological best practices which would eventually lead to innovative products and focus towards the large uninsured and rural population. The reform will introduce an entirely new phase of development to the Indian insurance sector. On account of increase in FDI limit, the Indian insurance broking industry is also anticipated to witness a rise in mergers and acquisition (M&A) activities. A World Bank study named 'Government-Sponsored Health Insurance in India: Are You Covered?' has stated that India would have more than 630 million people covered under health insurance by Over last five years, the Government-sponsored programs and schemes have significantly expanded the population covered by 178 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

180 health insurance in India and the newly launched schemes are introducing explicit entitlements, improving accountability and leveraging private capacity, particularly with an aim of reaching the poor. The study anticipates that by 2015, almost half of the country s population can be covered with some form of health insurance wherein spending through health insurance is likely to reach 8.4 per cent of total health spending, higher from 6.4 percent in CASE STUDY The Indian Insurance Industry Introduction ABC is foreign company having diverse business interests, including the marketing and selling of insurance products in the United States of America (USA). It has a strong infrastructure, good customer base and brand equity. ABC has heard that the Indian insurance market has opened up and seeks some information about opportunities there. ABC wants to tie-up with an Indian company ("XYZ") by forming a joint venture and wants to know the amount of equity it can hold in an Indian joint venture company and the insurance products it can sell in India. The company has distributable profits in three (3) preceding financial years, prior to the year in which shares with differential rights are to be issued; Further, ABC has a subsidiary in India (the "ABC Sub"), which is engaged in manufacturing car tyres. ABC wants to know whether ABC Sub can enter into a joint venture with XYZ. ABC also wants to know about the new regulatory regime, capitalization and related issues. Observations and Comments The Indian government has recently passed the Insurance Regulatory Development Authority Act, 1999 (the "IRDA") whereby amendments have been made to the existing insurance laws prevailing in the country, namely, the Insurance Act, 1938 (the "Ins Act"), the Life Insurance Corporation Act, 1956 (the "Life Act"), and the General Insurance Business (Nationalisation) Act, 1972 (the "GIB Act"). An authority called the Insurance Regulatory Development Authority (the "Authority") has been established to regulate the insurance sector. (Section 3 of the IRDA) The Authority, inter alia, will have the power to: Issue to applicants a certificate of registration; renew, modify, withdraw, suspend or cancel such registration. (Section 14(2)(a) of the IRDA) A certificate of registration will have to be renewed annually. (Section 3A of the Ins Act r/w the First Schedule of the IRDA) prescribe prudential norms such as solvency margins and investment guidelines for insurance companies (Section 14(2)(k) and (l) of the IRDA) Protect interests of policyholders in matters concerning assignments of policies, nominations by policyholders, insurable interest, settlement of insurance claims, surrender value of policies, and other terms and conditions of contracts of insurance. (Section 14(2)(b) of the IRDA) However, the Indian Government has retained with itself the power to issue directions on questions of policy. (Section 14(2)(b) of the IRDA) The definition of an "Indian insurance company" has been amended to include "any insurer being a company- 1. which is formed and registered under the Companies Act, 1956; 2. in which the aggregate holding of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees does not exceed twenty-six per cent (26%) of the paid-up capital; and 3. whose sole purpose is to carry on life insurance business or general insurance business or reinsurance business." (Section 2(7A) of the Ins Act r/w the First Schedule of the IRDA) The explanation to this section provides that a "foreign company" is a company that is not a domestic company. (Section 2(23A) of the Income-tax Act, 1961 r/w section 2(7A) of the Ins Act r/w the First Schedule of the IRDA) The IRDA by amending the Ins Act clearly provides that the aggregate holding of equity shares by a foreign company, either by itself or through its subsidiary companies or nominees should not exceed 26% of the paid-up capital of the insurance company. It has been clarified that the twenty-six per cent (26%) cap applicable to foreign companies will also apply to foreign institutional investors, non-resident Indians and overseas corporate bodies. (Section 2(7A)(b) of the Ins Act r/w the First Schedule of the IRDA) Thus, a foreign company is now permitted to own upto 26% of the equity in an Indian joint venture company. Therefore, if ABC proposes to form a joint venture with XYZ, ABC's shareholding will be restricted to a minority shareholding of 26% in the joint venture company. It must be noted that the Indian insurance company must be a public limited company. (Section 2C of the Ins Act). 179 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

181 Now, let us assume that ABC has a subsidiary company in India (the "ABC Sub") in which it owns a fifty-one per cent (51%) equity and decides that ABC Sub should enter into the insurance joint venture with XYZ. This will not be permissible. According to recent informal pronouncements of the Authority, Indian companies that are subsidiaries of overseas companies will not be allowed to tie-up with other Indian companies to do insurance business. The Authority perceives this as violation of the twenty-six per cent (26%) equity cap by foreing insurance companies. ABC can, however, along with several other foreign companies have a stake in an insurance company operating in India as long as the combined equity stake of all foreign companies does not exceed twenty-six per cent (26%). The Authority will not register any new insurance company carrying on the business of life or general insurance unless it has a minimum paid-up capital of Rs. 100 crores (approx. US$ 23,255,800). No composite license for life and non-life business will be granted. For companies in the reinsurance sector, a minimum paid-up capital of Rs. 200 crores (approx. US$ 46,510,000) is required. (Section 6 of the Ins Act) The foregoing paid-up share capital must be brought into the new company within six (6) months of issue of the license. (Section 6 of the Ins Act r/w the First Schedule of the IRDA) In addition, every insurer will be required to undertake such percentages of life insurance or general insurance business in the rural or social sector, as specified in the Official Gazette by the Authority in this behalf. (Section 27D of the Ins Act r/w the First Schedule of the IRDA) Furthermore, a new insurance company will be permitted to invest policyholders' funds only in India. (Section 27C of the Ins Act r/w the First Schedule of the IRDA) Every insurer shall, in respect of its life insurance business, be required to deposit with the Reserve Bank of India, either in cash or in approved securities, a sum equal to one per cent (1%) of its total gross premium written in India, not, however, exceeding Rs. 10 crores (approx. US$ 2,325,580). In respect of the general insurance business, this sum will equal three per cent (3%) of its total gross premium written in India, not, however, exceeding Rs. 10 crores (approx. US$ 2,325,580). In respect of re-insurance business, this sum will equal Rs. 20 crores (approx. US$ 4,651,160). (Section 7(i) of the Ins Act r/w the First Schedule of the IRDA) There appears to be a grey area in the IRDA. It has been provided that an Indian promoter holding more than twenty-six per cent (26%) of the paid-up equity capital of an Indian insurance company will have to divest in a phased manner the share capital in excess of twenty-six per cent (26%), after a period of ten (10) years from the date of commencement of business by the Indian insurance company. (Proviso to section 6AA of the Ins Act r/w the First Schedule of the IRDA) On the one hand, the Indian government seeks to restrict foreign equity ownership in Indian insurance companies to twenty-six per cent (26%) whereas on the other hand, it wants Indian partners to divest their equity holdings to twenty-six per cent (26%) after ten (10) years. It is unclear whether the foreign partner will be permitted to purchase the equity to be divested. Additionally, what if there are no takers of the equity required to be divested! All these points will have to be adequately considered when formulating the regulations in respect of divestment. The IRDA proposes to allow three kinds of insurance brokerage firms to operate in the country, namely, insurance, re-insurance, and composite brokerage firms. The twenty-six per cent (26%) equity cap will apply to such firms too, except that, composite brokers may enjoy a higher equity cap of forty-nine per cent (49%). Company formation consideration 1. On complying with the registration formalities, ABC and XYZ will have to enter into a shareholders agreement. The main issue that arises here is exercise of control in the functioning of the joint venture company. Generally, exercise of control can be at two levels Board of Directors; and 1. Shareholders Under the Companies Act, 1956 (the "Cos. Act") a company can carry on activities by passing either of two resolutions, special resolutions and ordinary resolutions. Ordinary resolutions can be passed by shareholders having 50% plus one shares with voting rights in the company, whereas special resolutions can be passed only by shareholders having 75% shares with voting rights in the company. A special resolution is, inter alia, required to amend the Memorandum and Articles of Association of a company, to issue further shares through a rights issue, to give loans or guarantees to other companies, etc. With a twenty-six per cent (26%) equity stake, 180 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

182 ABC will only be in a position to block special resolutions. It will not be able to control the day-to-day functioning of the joint venture company. Additionally, the Authority has prescribed that foreign insurance companies cannot retain Board control in Indian insurance joint venture companies. Therefore, ABC will not be able to appoint majority directors on the joint venture company's Board. Another pertinent point that arises is infusion of funds to the extent of seventyfour per cent (74%) of the equity of the joint venture company by the Indian partner, namely, XYZ. XYZ will have to bring in a minimum amount of US$ 17,209,292, if the joint venture company seeks to enter into the business of life or general insurance. Further, in the event of increase of share capital, XYZ will have to pump in an amount equal to its seventy-four per cent (74%) equity stake. This can cause some problems. It should be noted that preference shares cannot be issued by companies carrying on life insurance business (Section 6A(1)(i) of the Ins Act). As such, the joint venture company carrying on life insurance business cannot comply with the capitalization stipulations by issuing preference shares to ABC. In such circumstances, the parties can consider entering into a three-way joint venture either with another Indian company or with a bank. The Reserve Bank of India ("RBI") has permitted banks to enter into the insurance sector and to invest up to fifty per cent (50%) of their paid-up capital in insurance joint ventures. Share transfer issues Various issues arise if one of the shareholders in the joint venture company decides to transfer its shareholding. The transfer conditions depend upon the shareholders agreement. As per the guidelines stipulated under the IRDA, where the nominal value of the shares intended to be transferred by any individual, firm, group, constituents of a group, or body corporate under the same management, jointly or severally, exceeds one per cent (1%) of the paid-up capital of the insurer, previous approval of the Authority must be obtained to effect such a transfer. (Section 6A(4)(b)(iii) r/w the First Schedule of the IRDA) Further, where, after the transfer of shares, the total paid-up holding of the transferee in the shares of the company is likely to exceed five per cent (5%) of its paid-up capital, or where the transferee is a banking or an investment company, is likely to exceed two and a half per cent (2 ½ %) of such paid-up capital, prior approval of the Authority must be obtained in respect of the transfer. (Section 6A(4)(b)(ii) r/w the First Schedule of the IRDA) The aforesaid regulations will have to be complied with by ABC and XYZ in case of transfer of shares in the joint venture company Conclusion The liberalization of the Indian insurance sector has been the subject of much debate for some years now. Despite innumerable delays, the insurance sector is all set to open up to private competition. If ABC and XYZ can establish the right amount of trust and take a long-term perspective on the Indian market, their joint venture can be a major success. Real Estate Introduction Real estate can be land, buildings, and things permanently attached to land and buildings, Also called realty and real property. Real estate is the modern term for land and anything that is permanently affixed to it. Fixtures include buildings, fences, and things attached to buildings, such as plumbing, heating, and light fixtures. Property that is not affixed is regarded as Personal Property. For example, furniture and draperies are items of personal property. The sale and lease of real estate in the United States are major economic activities and are regulated by state and federal laws. The two major types of real estate are commercial and residential real estate. Commercial real estate involves the sale and lease of property for business purposes. Residential real estate involves the sale and rental of land and houses to individuals and families for daily living. The sale of residential property is heavily regulated. All states require real estate agents and brokers, who earn a commission from the owner of real estate for selling the property, to be licensed. To get a license, a person must have a high school diploma, be at least eighteen years old, and pass a written test on real estate principles and law. 181 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

183 The federal government enacted the Real Estate Settlement Procedure Act of 1974 (RESPA) (12 U.S.C.A et seq.) to ensure that the buyer of residential real estate is made aware of the many costs associated with the sale. RESPA mandates that a federally insured lending institution give the buyer advance notice of all the costs to be paid on the date of closing the transactions. These costs typically include the cost of property surveys, appraisals, title searches, brokers' fees, and administrative and processing charges. Global Perspective The downward pressure on pricing in a number of national housing markets appears to have eased over the summer and early fall. In the majority of advanced and emerging nation property markets we track, average inflation-adjusted house prices were negative on a year-over-year (y/y) basis in the third quarter. However, many are showing some tentative signs of stabilization, including the U.S., the U.K., Australia and China, supported in part by highly accommodative monetary policy. At the same time, there is little evidence of significantly improved momentum. Outside of the continuing deep property slumps in Spain and Ireland, pricing in most national housing markets appears range-bound for the time being. In 12 of the 17 (71%) countries reporting Q3 data, average prices were in a +/- 3% y/y range. In 14 (82%), they were within +/- 4% y/y. This relatively flat global performance suggests an ongoing high degree of caution among households and investors unwilling to make big residential property bets at this juncture. Lower home prices and historically low interest rates are supporting affordability, but in many countries mortgage lending conditions remain tight. Housing oversupply also continues to pressure prices in some markets. Housing markets remain weakest in Europe, not unexpectedly given ongoing recessionary conditions, fragile consumer confidence and high joblessness. The euro zone wide unemployment rate rose to a record 11.7% in October, while for young workers under 25 it has soared to almost 24%. Wage compression and emigration are further reducing the pool of potential homebuyers. These markets are expected to remain under pressure through Conditions are relatively stable in most other advanced nations. Cyclical and fundamental factors favour the United States over the overvalued housing markets in Canada, Australia and Sweden, where years of rising prices have eroded affordability. Even so, the still sluggish pace of U.S. job growth will moderate the recovery. Among emerging nations, Latin American housing markets are generally outperforming those in Asia, supported by solid domestic activity and labour markets. Europe Ireland s deep property slump is unrelenting. Average inflation-adjusted home prices fell 14% y/y in Q3, bringing the cumulative decline from their 2007 peak to 52%. There also is no let-up in the downward pressure on Spanish property values. Real prices were down 12% y/y in Q3 and 33% from their peak. With almost onequarter of the nation s workforce out of work, and youth unemployment approaching a staggering 54%, prices likely have further to fall. In France, average prices fell 3% y/y in Q3, the third consecutive quarter of decline. Italian house price fell 5% y/y through mid-year. At the same time, there are some tentative signs of stabilization in other less battered European nations. Piggybacking on a modest improvement in labour market conditions and lower mortgage rates, average real home prices in the U.K. were down less than 1% y/y in Q3, the smallest decline since late Interest rate cuts also appear to be contributing to steadier housing conditions in Sweden, with price declines slowing to 3% y/y in Q3. Switzerland remains one of the most consistently strong national housing markets in our sample, with steady real price growth of 4% y/y in Q3. The combination of low unemployment and even lower interest rates are supporting retail and housing activity, though tighter mortgage lending rules in effect since mid-2012, aimed at slowing the rise in household debt accumulation, are expected to temper sales and price gains in the year ahead. North America Housing activity in the United States is gearing up. Real home prices rose 5% y/y in Q3, an acceleration from the 3% advance recorded in the prior quarter. Despite the uptick, average prices are still down roughly 30% 182 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

184 from their 2005 peak, underscoring the long road to recovery ahead for the U.S. housing market. The improvement is being supported by moderate job growth, record housing affordability and fewer distressed property sales. At the same time, Canadian housing activity has geared down. Average inflation-adjusted home prices were moderately below year-ago levels (-1.5% y/y) for a third consecutive quarter in Q3. Exhausted pent-up demand and reduced housing affordability in high-cost urban centres have dampened sales, while the return of balanced conditions in the majority of local markets has cooled pricing. Asia-Pacific Australia s housing market is stabilizing following a moderate price correction last year, with average real prices down just 2% y/y in Q3. Sales and pricing are being supported by reasonably good domestic economic conditions and accommodative monetary policy. In the face of slowing global growth, the Reserve Bank of Australia has cut its benchmark interest rate by 125 basis points since the spring. Meanwhile, Korea s housing market has stalled. Recent interest rate cuts in response to slowing growth have yet to revive housing demand. Property prices continue to decline in Japan amid weak growth and unfavourable demographics. Real home prices in the majority of major cities in China were modestly below year-ago levels in Q3, though conditions appear to be steadying. Official efforts in recent years to rein in soaring property values, including limits on homeownership, appear to have succeeded, allowing for some easing in monetary policy. A muted economic performance, weak consumer confidence and high inflation and interest rates are weighing on India s housing market. Real house prices declined y/y in the majority of major cities for a second consecutive quarter in Q3. Average home prices in Thailand (Greater Bangkok) were essentially unchanged y/y in Q3, notwithstanding a relatively favourable domestic outlook, supportive labour markets and accommodative monetary policy. Prices are also relatively flat in Indonesia. New macro prudential rules introduced in the spring aimed at cooling credit growth, including tighter loan-to value ratios on mortgages, have dampened housing demand. Latin America Average real house prices were down 1% y/y in Q3 in Mexico, where persistent inflationary pressure are keeping policy interest rates relatively elevated. Chile is reporting moderate residential property price gains averaging 2% y/y, supported by relatively strong domestic activity and a tight labour market. Colombia continued to record strong house price growth through Q2, though slowing consumer spending and credit demand point to some deceleration since mid-year. International Residential Markets International House Prices (Inflation-adjusted*, y/y % change) Q4 12Q1 12Q2 12Q3 Australia Canada France Germany Ireland Italy Japan I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

185 Spain Sweden Switzerland United Kingdom United States Chile Colombia Mexico China India Indonesia South Korea Thailand * Nominal house prices deflated by national consumer price indices Indian Perspective Overview While India continues to be one of the fastest growing economies, this pace of growth is unlikely to sustain unless it is supported by an equally robust development of its infrastructure. Key requirements in order to achieve a GDP growth rate exceeding 8-9% include roads, power, ports as well as urban infrastructure. The last couple of budgets have taken steps in the right direction for growth of the sector. An allocation of Rs. 200 billion towards infrastructure projects under the 2011 budget is an attempt to achieve the Governments target for growth of Infrastructure under the Eleventh Plan. India will have around 27 to 30 million shortage of housing units by 2013 and for this; huge amount is required to carry on the development. Slowdown in the global economy along with consistent increase in policy rates by the Reserve Bank of India (RBI) finally seems to be impacting the domestic economy with the GDP growth cooling down since past few quarters. The GDP growth recorded during first quarter of financial year 2012 has slowed down to 7.7 per cent as against 9.3 per cent during first quarter of financial year 2011.Even the projected GDP growth for financial year 2012 has been revised downward to 7.9 per cent from 8.2 per cent by the RBI. The real estate sector in India is being recognized as an infrastructure service that is driving the economic growth engine of the country. In fact, Foreign Direct Investment (FDI) in the sector is expected to increase to US$ 25 billion in the next 10 years, from present US$ 4 billion. The country's urban population will soar to 590 million by 2030, from 340 million in India's cities could generate 70 percent of the net new jobs created by 2030, produce more than 70 percent of the country's Gross Domestic Product (GDP), and stimulate a near four-fold increase in per capita income. It also says that India needs to invest US$ 1.2 trillion over next 20 years to modernize urban infrastructure and keep pace with the growing urbanization. Non-resident Indians and foreign citizens who are Persons of Indian Origin (PIO) are allowed to purchase immoveable property in India. Residential property prices have stabilized now and are deemed attractive for the NRI home buyer. Industry experts feel that with attractive pricing and innovation in construction technology and variety of designs, NRIs are taking a fresh look at India as a unique market in which they can invest. 184 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

186 Introduction Real Estate business was one of the key drivers of growth before we witnessed the present economic slowdown. Now, with companies trying to consolidate their positions and finding effective means of sustaining growth, the management of real estate has emerged as one of the key challenges for the corporate sector. The largest occupier of office space in the country has been the Information Technology/ Information Technology enabled Services (IT/ ITeS) segment, which primarily serves the US and European markets. The economic slowdown in these markets have resulted in increasing pressures on the margins of companies operating out of India, which in turn has led to the companies looking to cut costs through reducing expenditure on the real estate segment. The real estate sector in India assumed greater prominence with the liberalization of the economy, as the consequent increase in business opportunities and labour migration led to rising demand for commercial and housing space. At present, the real estate and construction sectors are playing a crucial role in the overall development of India s core infrastructure. The real estate industry s growth is linked to developments in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries, economic services (hospitals, schools) and information technology (IT)-enabled services (like call centres) etc and vice versa. The Indian real estate sector has traditionally been dominated by a number of small regional players with relatively low levels of expertise and/or financial resources. Historically, the sector has not benefited from institutional capital; instead, it has traditionally tapped high net-worth individuals and other informal sources of financing, which has led to low levels of transparency. This scenario underwent a change with in line with the sector s growth, and as of today, the real estate industry s dynamics reflect consumers expectations of higher quality with India s increasing integration with the global economy. Present Scenario of Real Estate Currently, about 5 per cent of India s GDP is contributed by the housing sector. The GDP share of the real estate sector (including ownership of dwellings) along with business services was 10.6 per cent in After growing at 10.4 per cent in , the rate of growth of this sector has decelerated to 7.8 per cent in and further to 6.9 per cent in Estimates show that for every rupee that is invested in housing and construction, 0.78 paisa gets added to GDP. Housing ranks fourth in terms of the multiplier effect on the economy and third amongst 14 major industries in terms of total linkage effect according to Economic Survey Demand for real estate is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014 Tier 1 metropolitan cities are projected to account for about 40 per cent of this. Growing requirements of space from sectors such as education, healthcare and tourism provide opportunities in the real estate sector. With institutional credit for housing investment growing at a CAGR of about 18 to 20 per cent per annum in the next three-five years, the housing sector s contribution to GDP is likely to increase to 6 per cent. While India is among the top countries in terms of housing and work space needs, it ranks 181st in construction permission processes according to the World Bank s Doing Business 2012 report. REAL ESTATE MARKET Real Estate Market Size Activities in the real estate sector may broadly be classified into residential, commercial and the retail segment and hotels. The size in terms of total economic value of real estate development activity of the Indian real estate market is currently US$40-45bn (5-6% of GDP) of which residential forms the major chunk with 90-95% of the market, commercial segment is distant second with 4-5% of the market and organized retail with 1% of the market. Over next 5 years, Indian real estate market is expected to grow at a CAGR of 20%, driven by 18-19% growth in residential real estate, 55-60% in retail real estate, and 20-22% in commercial real estate. 185 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

187 Market Segment In recent years, the Industry has evolved from a highly fragmented and unorganized Market into a Semiorganized Market. Real Sector Estate The sector can be divided into residential, commercial, retail and hospitality asset classes. Real Estate Commercial Sector Residential Space Retail Space Hospitality Space Special Economic Commercial Sector The commercial office space in India has evolved significantly in the past 10 years due to change in business environment. The growth of commercial real estate has been driven largely by service sectors, especially IT- ITeS. However, with the emergence of IT-ITeS, which had huge office space requirement, commercial development started moving towards city suburbs. It resulted in multifold development of city outskirts and suburbs like Gurgaon near New Delhi, Bandra and Malad in Mumbai, and the Electronic city in Bangaluru. In addition, over the last 10 years, locations such as Bengaluru, Gurgaon, Hyderabad, Chennai, Kolkata and Pune have established themselves as emerging destinations for commercial development, which are competing with traditional business destinations such as Mumbai and Delhi. Tax sops on the profits of IT-ITeS companies also led to stupendous development of IT Parks and SEZs. However, the demand for office space is directly linked to addition in number of employees, which in turn is dependent on economic growth. When economy slows down, companies hold their expansion plans leading to lower demand for office space. Downturn in the commercial real estate market in India, which had commenced during the second half of 2008, continued during the second half of The sustained decline was largely the result of postponement of expansion plans by corporate, which adversely impacted demand for office space. IT/ITeS, which had been a major demand driver for the sector in the last 2 years, increased utilization rates of existing commercial space by increasing the number of shifts. Residential Sector in Real Estate Residential demand is the mainstay of the Indian real estate sector. The major demand drivers for the residential market include increasing disposable income levels, increase in the number of nuclear families / households, tax savings on home mortgage products as well as real estate being considered a necessary investment. Demand for houses increased considerably whilst supply of houses could not keep pace with demand thereby leading to a steep rise in residential capital values especially in urban areas. 186 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

188 Broadly, residential real estate industry can be divided into four growth phases Phase I ( ) was an initial growth phase with stabilizing residential real estate prices following the global recovery post the dot com bust and 9/11 terrorist attacks in New York. At the same time, there was steady growth in Indian economic activity, noteworthy recovery in IT/ITES industry, growing urbanization and a rising trend towards nuclear families. Phase II ( ) was a high growth phase where high demand for residential real estate led to doubling of housing prices. Demand rapidly increased due to India s growing population, accentuated urbanization, rising disposable incomes, rapidly growing middle class and youth population, low interest rates, fiscal incentives on interest and principal payments for housing loans and heightened customer expectations. Phase III ( ) witnessed substantial slowdown and part recovery in demand because of the global economic downturn, which led to a decline in affordability and tight liquidity. The retreat of various real estate investors, accompanied by slowdown in the capital markets, has resulted in oversupply and falling prices. Phase IV ( ) is expected to remain a consolidation phase after slowdown. Demand is expected to remain strong with capital values witnessing modest rise. This period is expected to witness substantial supply of housing especially in urban areas. In spite of the stupendous growth witnessed in the past 10 years, substantial housing shortage is still prevalent in India. The housing shortage in India is estimated at 78.7 million units at the end of Phase II. The overall housing shortage in India is likely to decline to 75.5 million units by the end of Phase IV. However, housing shortage in urban areas will continue to rise owing to migration towards urban areas and increasing trend of nuclear families. Housing shortage in urban areas is estimated at 19.3 million units at the end of 2008, up from 15.1 million units at the start of Housing shortage in urban areas is likely to touch a walloping 21.7 million units by the end of Rural areas, on the other hand, will witness a reduction in housing shortage due to migration and conversion of kutcha houses into pucca houses. The government s continuous focus on improving the housing situation, especially for population below poverty line, under schemes like Indira Awaas Yojna, Rajeev Gandhi Aawaas Yojna, Two Million Housing Programme, is expected to reduce housing shortage in rural areas. Rural housing shortage is expected to decline to 53.8 million units by from 59.4 million units at the end of Retail Real Estate In 2010, India witnessed the addition of more than 5 million sq ft of organized retail mall space across various primary and secondary locations. This was concentrated largely in NCR, Mumbai, Bangalore and Chennai and was a consequence of the positive sentiments amongst retailers on spatial expansion and enhancing their footprints across the country. The growth of malls in India has increased to about 59 which comprises of the retail stock. The retail stock share will increase to 36 per cent in the coming years. Results found out through a survey state that the retail market is expected to grow in the coming years. There is an increased development of retail malls which are primarily dominated by the local developers. All the 59 malls in the southern & Northern 187 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

189 states are either in the stages of construction or are already established. Few of the active project developers in the Southern & Northern region are the Mantri Developers, The Prestige Group, DLF, RMZ Corp and so on. Indian retailers are seeking to implement their expansion plans in the prime cities as well as select Tier II and Tier III cities. FDI in multi brand real estate, when finally permitted, is expected to catalyze a lot of demand from international retailers. That said, international luxury brands will restrict their growth plans to Mumbai, Delhi and Bangalore. Hospitality Real Estate India s hospitality industry has enjoyed robust growth over the past few years buoyed by a benign economic and political environment. Increase in domestic, business and leisure travel has benefited hotels in India. Rising incomes, higher weekend trips and increased access to travel-related information over the Internet have propelled growth in hospitality. Premium segment hotels are more prominent in major business destinations in India and are dominant in popular tourist destinations like Goa, which attracts a lot of foreign clientele. In 2010, the industry saw only five private equity deals with a cumulative value of $ 1 56 million. By 2011, the amount grew to $299 million and during the first five months of 2012, hospitality industry has raised $121 million from private equity. A few years back the industry was polarized between large five star hotels and small lodges. Now, both domestic hotel chains and international brands are queuing up with several categories of hotels to cater to different travelers in the value chain and that is why the demand for real estate properties in India are increasing. Private equity players are also keen on budget, mid-sized hotels that work on an asset light model than the asset heavy models that take longer time to become profitable. The entry of several global brands to fill the demand-supply gap has triggered private equity interest in the industry. Special Economic Zone (SEZ) The Government of India introduced the SEZ Act, 2005, to generate additional economic activity, promote exports and create employment opportunities in the country. Developing an SEZ is approximately 15 to 20 percent cheaper than developing non-sez commercial space; given the various fiscal benefits available to SEZ developers several real estate developers have been attracted to these projects. Under the new SEZ Policy, formal approvals have been granted to 574 SEZ proposals as of March, 2010.As of March 2010, there were 350 notified SEZs and 146 have received in-principle approval. The SEZ Policy allows usage of as high as 50 percent of the SEZ area as non-processing zone, offering significant potential for residential and support infrastructure. Growth Drivers in Real Estate Demand Pull Factor Supply Pull Factor Robust and sustained macro-economic growth. Upsurge in industrial and business activities, especially new economy sectors. Policy and regulatory reforms (100 per cent FDI relaxation). Positive outlook of global investors. Fiscal incentives to developers. 188 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

190 Favorable demographic parameters. Significant rise in consumerism Rapid urbanization. Availability of a range of financing options at affordable interest rates. Simplification of urban development guidelines. Infrastructure support and development initiatives by the government. Impacts Impacts Increasing occupier base. Significant rise in demand for office/industrial space. Demand for newer avenues for entertainment, leisure and shopping. Creation of demand for new housing. Entry of a number of domestic and foreign players; increasing competition and consumer affordability. Easy access to project financing options. Increases developers risk appetite and allows large scale development. Improved quality of real estate assets. Development of new urban areas and effective utilization of prime land parcels in large cities. MARKET PLAYERS India s real estate market is on a high growth curve. The industry is projected to grow to US$50 billion by the end of 2010 at an average rate of 20%. Looking at the bigger picture, the recession seems like a hiccup. Despite talks of price correction, the worse is definitely behind us. In this features, there are list of market leaders. Many are national players but some are purely regional players and hence it would be unfair to compare them. The idea was to identify national as well as local leaders. Of course, all such lists are subject to market dynamics. 1. DLF Ltd With a track record of 64 years, DLF is India s largest real estate company in terms of revenues, earnings, market capitalization and developable area. It currently has pan India presence across 30 cities with approximately 238 million sq ft of completed development and 413 million sq ft of planned projects, of which 56 million sq ft of projects are under construction during FY10. Project Spectrum: Residential, townships, commercial complexes, IT Parks, hotels, multiplexes, etc. Quick fact: Only listed real estate Company included in the BSE Sensex, NSE Nifty, MSCI India Index and MSCI Emerging Markets Asia Index. Latest: It will take its luxury mall DLF Emporio (already operational in New Delhi) to other big cities such as Hyderabad and Chennai. 2. UNITECH Established in 1972, Unitech is India s leading real estate developer in India. It is the first developer to have been certified ISO 9001:2000 in North India. Project Spectrum: Unitech offers diversified projects across residential, commercial/it parks, retail, hotels, amusement parks and SEZs segments. Unitech was the first real estate company to be part of the National Stock Exchange s NIFTY 50 Index. The company has over 600,000 shareholders. Unitech and Norway based Telenor Group came together to build Uninor - a telecommunication services company providing GSM services across India. Latest: Has ventured into the infrastructure business by launching Unitech Infra. 189 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

191 3. Ansal API Established in 1967 as a family business, Ansal API today is clearly amongst the real estate leaders of India. Having established itself very strongly in the NCR region, Ansal API is now focusing on ventures in cities like Bhatinda, Mohali, Amritsar, Ludhiana, Jalandhar, Jaipur, Jodhpur, Ajmer, Sonepat, Panipat, Karnal, Kurukshetra, Faridabad, Gurgaon, Greater Noida, and Ghaziabad, Meerut, Agra, Lucknow, to name a few. Ansal API has till date, developed and delivered more than 190 million sq ft. The company currently has a land reserve of about 9,335 acres. Project Spectrum: Integrated Townships, Condominiums, Group Housing, Malls, Shopping Complex, Hotels, SEZs, IT Parks and Infrastructure and Utility Services Latest: Raised Rs231.4 crore through private placement of shares with institutional investors for reducing its debt and execute ongoing projects. 4. Sobha Developers Ltd The Company was founded in 1995 by PNC Menon after he returned home from the Middle East where he was acclaimed for quality interiors and construction since Today, this Rs10 billion plus company is one of the largest and only backward integrated company in the construction arena. Its IPO in 2006 was oversubscribed by 126 times that created history, being the first event of its kind in Indian capital markets. Till date, Sobha has completed 47 residential projects, 13 commercial projects and 166 contractual projects covering about 36 million sq ft area in 18 cities across India (as of 31 March 2010). The company currently has 21 ongoing residential projects aggregating to 8.5 million sq ft, while 4.24 million sq ft of contractual projects are under various stages of construction. 5. Parsvnath Developers Ltd Incorporated in July 1990 by Mr Jain in New Delhi, Parsvnath today has a substantial pan India presence in over 45 cities across 16 states. The company has emerged as one of the most progressive and multi-faceted real estate and construction entities in India. Project spectrum: Housing (premium, mid-market as well as affordable), office complexes, shopping malls & hypermarkets, hotels, multiplexes, IT Parks and SEZs. Quick fact: First real estate Company to have integrated with ISO 9001, and OHSAS Latest update: Has partnered with Red Fort Capital to execute a Concession Agreement with DMRC for development of a prime Grade A office project in New Delhi s Connaught Place. MARKET SIZE The Indian real estate market size is expected to touch US$ 180 billion by Demand for residential, commercial and retail real estate is rising throughout India, accompanied by increased demand for hotel accommodation and improved infrastructure. Growth prospects and price stability of smaller cities are attracting large real estate developers in such cities in the recent past, according to a report titled 'Real(i)ty Next: Beyond the Top 10 Cities of India', released by Crisil. The report estimates that the sale of new residential apartments in 10 such smaller cities are at around US$ 4 billion in INVESTMENTS Non-resident Indians (NRIs) are looking forward for investment in Indian real estate with the dollar appreciating in value compared to the rupee in the recent times. Foreign direct investment (FDI) inflows in real estate in (April-January) stood at Rs 2,750 crore (US$ million). In fact, FDI in the sector is expected to increase to US$ 25 billion in the next 10 years, as per a latest industry body report. Construction development sector (including townships, housing, built-up infrastructure) has attracted a cumulative FDI worth US$ 21.1 billion from April 2000 to June FDI flows into the sector for the period 190 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

192 April-June stood at US$ 348 million, according to the Department of Industrial Policy and Promotion (DIPP). India needs to invest US$ 1.2 trillion over next 20 years to modernise urban infrastructure and keep pace with the growing urbanisation, as per a report released by McKinsey Global Institute (MGI)-India's urban awakening. Indian real estate emerged as the popular sector for private equity (PE) funds, investing around US$ 1,700 million in this sector during PE in real estate projects will fetch considerable returns by next year (2013), according to Vikram Hosangady, Partner, KPMG Some of the major investments in the Indian real estate sector (as on November 29, 2012) are: Realty firm Avalon Group to invest Rs 200 crore (US$ million) to develop a group housing project at Bhiwadi in Rajasthan. The company would develop 800 housing units in the 12-acre project 'Avalon Regal Court'. Canada-based NRI billionaire Bob Dhillon is considering investing up to US$ 100 million (about Rs 540 crore) in the Indian real estate market and is planning to approach the Haryana Government for developing a township near Chandigarh Sahara India has set up a construction joint venture with 110-year-old American real estate company Turner Construction Co, a subsidiary of German construction group Hochtief, and the Acropolis Capital Group, a special situation investment and development firm. The JV Company will build integrated townships called Sahara City Homes and other Sahara India projects in India worth US$ 25 billion over the next 20 years Berggruen Hotels, a mid-market business hotel chain funded by US-based Berggruen Holdings, plans to double its room inventory and invest at least Rs 450 crore (US$ million) in new projects across the country. The company operates under the brand Keys Hotels and aims to add 2,300 rooms over the next months Kotak Realty Fund, the real estate private equity fund of Kotak Mahindra Group, has entered into a joint venture with Chennai-based Akshaya Homes for construction of residential units on a 20-acre plot of Chennai's Old Mahabalipuram road GOVERNMENT INITIATIVES The Government of India has allowed FDI up to 100 per cent under the automatic route in townships, housing, built-up infrastructure and construction development projects to increase investment, generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure. The Union Budget gives major thrust on accelerating the pace of investment in infrastructure, as this is critical for sustaining and accelerating an overall growth. Efforts to attract private investment into infrastructure through the Public-Private Partnership (PPP) route have met with considerable success at both Central Government and State Government levels. In the Union Budget , Rs 10,000 crore (US$ 1.82 billion) is allocated for the development of National Highways. In the next five years, the total investments in the real estate will be US$ 1 trillion. Government of Gujarat plans to build a 600-hectare township near the proposed Maruti Suzuki India Ltd.'s (MSIL) manufacturing factory in Hansalpur near Mehsana. The cost of development is estimated to be about Rs 80 lakh (US$ ) to Rs 1 crore (US$ ) per hectare. ROAD AHEAD Real estate plays an important role in the Indian economy. This sector happens to be the second largest employer after agriculture and is expected to grow at the rate of 30 per cent over the next decade. The real estate sector in India is ready to take a big leap in the coming years. Since 2010, the residential sector has been on a strong growth trajectory and with increasing urbanisation the momentum is expected to continue. 191 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

193 Strong demographic mix and increasing salary levels will be the key triggers for growth of the residential market in Emergence of nuclear families and growing urbanisation has given rise to several townships that are developed to take care of the elderly. With a number of senior citizen housing projects been planned, the segment is expected to grow significantly in the future. Increase in the number of tourists has resulted in demand for service apartments. This demand is likely to be on uptrend and presents opportunities for the unorganised sector. The number of hotel beds in the country is expected to increase to 461,000 by 2015 from the current capacity of 235,000. Exchange Rate Used: INR 1 = US$ as on November 29, 2012 (References: Ministry of Finance, Press Information Bureau (PIB), Media Report, Department of Industrial Policy and Promotion (DIPP), CREDAI) Case Studies:- Commercial Real Estate Vacancies Slowly Declining, Rents Rising Media Contact: Walter Molony / WASHINGTON (November 26, 2012) - Most of the major commercial real estate sectors show gradually improving fundamentals and are easily absorbing the relatively small amount of new space that is coming online, with a full recovery already in the multifamily market, according to the National Association of Realtors quarterly commercial real estate forecast. Lawrence Yun, NAR chief economist, said the market has been slowly building momentum. "Job creation is the key to increasing demand in the commercial real estate sectors," he said. "The economy is expected to grow 2.5 percent next year, and with modest job creation, assuming there is no fiscal cliff, the demand for commercial space will gradually rise. The greatest friction that remains is a tight credit environment, notably for smaller properties." Vacancy rates over the next four quarters are forecast to decline 1.0 percentage point in the office market, 0.6 point in industrial, 0.2 point for retail and 0.1 point in multifamily; however, multifamily has the tightest availability and is experiencing the strongest rent increases, well above the rate of inflation. "The primary factor holding back greater job creation has been uncertainty over regulations and associated costs," Yun said. "With the elections behind us and Washington apparently resolved to prevent a fiscal cliff, it's hoped that ambiguity over regulatory issues will clear relatively soon so employers can understand the rules of the game and the layout of the field." NAR's latest Commercial Real Estate Outlook 1 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc., 2 a source of commercial real estate performance information. Office Markets Vacancy rates in the office sector are projected to fall from an estimated 16.7 percent in the fourth quarter to 15.7 percent in the fourth quarter of The markets with the lowest office vacancy rates presently (in the fourth quarter) are Washington, D.C., with a vacancy rate of 9.6 percent; New York City, at 10.1 percent; and New Orleans, 12.9 percent. Office rent is expected to increase 2.0 percent this year and 2.5 percent in Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 21.7 million square feet in 2012 and 49.0 million next year. Industrial Markets Industrial vacancy rates should decline from 10.1 percent in the fourth quarter of this year to 9.5 percent in the fourth quarter of The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.3 percent; Los Angeles, 4.4 percent; and Miami at 6.5 percent. 192 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

194 Annual industrial rent is forecast to rise 1.7 percent in 2012 and 2.2 percent next year. Net absorption of industrial space nationally will probably total 93.4 million square feet this year and 89.6 million in Retail Markets Retail vacancy rates are expected to ease from 10.8 percent in the fourth quarter to 10.6 percent in the fourth quarter of Presently, markets with the lowest retail vacancy rates include San Francisco and Fairfield County, Conn., both at 3.9 percent; Long Island, N.Y., 5.1 percent; and Orange County, Calif., 5.4 percent. Average retail rent should increase 0.8 percent this year and 1.4 percent in Net absorption of retail space is estimated to be 9.1 million square feet this year and 19.8 million in Multifamily Markets The apartment rental market - multifamily housing - is projected to see vacancy rates decline from 4.0 percent in the fourth quarter to 3.9 percent in the fourth quarter of 2013; vacancy rates below 5 percent are considered a landlord's market with demand justifying higher rents. Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.1 percent; New York City, 2.2 percent; and Minneapolis, 2.3 percent. Average apartment rent should increase 4.1 percent in 2012 and another 4.6 percent next year. Multifamily net absorption is likely to be 219,700 units this year and 234,600 in The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community. NAR's Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations - CCIM Institute, Institute of Real Estate Management, Realtors Land Institute, Society of Industrial and Office Realtors, and Counselors of Real Estate. Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business. The National Association of Realtors, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. Miami s Newest Class-A Office Space Offers Technology Advantages 600 Brickell offers global tenants unprecedented connectivity, scalability, and opportunity. EXECUTIVE SUMMARY CUSTOMER Foram Group INDUSTRY Real Estate Asset Management LOCATION Brickell Business District, Miami, Florida CHALLENGE Create building with technology advantage over any other building Develop highly available network to support smooth scalability and high bandwidth Combine with highest levels of security SOLUTIONS Implement Cisco Connected Real Estate framework Combine private network, designed to meet future needs of tenants, and critical enterprise technologies Improve data flow, and enhance 193 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

195 business value Challenge RESULTS Unprecedented connectivity Operational efficiency Security and compliance Established in 1978, Foram Group is a leading real estate asset management company, specializing in property acquisition, development, management, and leasing. The company provides hands-on asset management services for a diversified portfolio of rural and commercial properties. Slated to open in August and located in the heart of Miami s financial district, 600 Brickell is Foram s most significant Class-A office building to date and the first U.S.- based office building of this magnitude that approaches information and communication technology (ICT) as a fourth utility. Early in the planning phase, the developers took a fresh look at everything to enhance business value to tenants. Standard building practices were redefined as architects and engineers used the latest and most advanced techniques to design a property that exceeds anything that exists, or is under construction, throughout the Southeast region. The 600,000-square-foot, 40-story project features connectivity as a core asset of the building, enabling direct access to the Internet backbone, connecting clients to the world in less than a millisecond. This feature was further enhanced through the addition of smooth scalability to meet tenant demands for future growth, 24-hour monitoring and support, redundancy, security, and other core critical technologies to advance business capabilities. Our goal for 600 Brickell was to create a benchmark for Miami s future and a new international standard for technology in office development, says Loretta Cockrum, CEO of Foram Group. This is a building of the future more than a building of the present. Our goal is to leave a legacy by creating the most innovative and forward-thinking office building in Miami. Loretta Cockrum, founder and CEO of Foram Group. The building s target market consists of clients that require a full convergence of global connectivity, security, and efficiency. To meet the demands of global tenants today and well into the future, Foram envisioned a collaborative environment in which connectivity is treated as not just an option, but also as an essential tool for today s business. This utility approach means connectivity that is fast, scalable, secure, and fully redundant. 600 Brickell will provide tenants with additional 21st-century advantages such as co-location services with an onsite data center, and campuswide public and private Wi-Fi: strategic services that promote business capabilities. Our goal is to leave a legacy by creating the most innovative and forward-thinking office building in Miami, adds Cockrum. To achieve the vision, Foram engaged Venturian Group, a leading provider of solutions architecture and technology consultative services, to plan and implement the building s ICT. Venturian designed and executed the solution using Cisco products, implementing a highly robust and secure infrastructure. Solutions The biggest challenge for the technology team was creating a network design that would position 600 Brickell as the premier address for global business today and provide long-term relevancy for the project. Office buildings tend to follow a typical cookie-cutter approach when it comes to technology. We knew we wanted something outside the box, says Paris Del Rio, project manager of Foram Group. We wanted a design solution that would give our tenants cutting-edge technology for years to come. We needed products that were flexible and robust. The fact that Cisco is behind the technology in this building proves to us that this property will be a market leader, says Paris Del Rio, project manager of Foram Group. 194 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

196 We needed products that were flexible and robust. The fact that Cisco is behind the technology in this building proves to us that this property will be a market-leader. Paris Del Rio, project manager of Foram Group Foram Group and Venturian created what is the most connected building in the Southeast, using a Cisco infrastructure designed to stay ahead of global tenants most demanding technological applications and a myriad of critical technologies. The team analyzed speed, scalability, and availability to allow for the most advanced business capabilities. 600 Brickell is blazing a new trail in the real estate industry, says Joe O Connor, senior executive director for Cisco Connected Real Estate. By positioning tenants to take advantage of technology s exponential gains in power and speed, companies at 600 Brickell can be ready for the future from day one. We know this ability can be critical for business, and we are proud to be partners with this unique property. From opening day, tenants can enjoy a technology wish list designed to support the flow of their businesses: Connectivity: The redundant fiber optic infrastructure between 600 Brickell and the NAP (network access point) of the Americas in Miami gives tenants fast and cost-effective access. This direct connection puts companies less than one millisecond away from the world. Scalability: Planned scalability from the start is paramount to allowing growth to happen in a way that saves considerable time and money. At 600 Brickell, there is no waiting for an outside vendor, and there are no expensive construction costs. Scalability up to 400 Gbps is just a phone call away. Fully Redundant Data Center: The building s fully redundant data center offers virtually unlimited connectivity, typically seen only in leading data center facilities, and over 160 worldwide carrier options, in the most cost-effective manner possible. 24-Hour Access to an On-site ICT Organization: Providing tenants with on-site, instant support and services for high-quality connectivity, 600 Brickell s Peer-Point ICT experts will be based on the 14 th floor and easily accessible to deliver fast, efficient service. Additionally, as a Cisco Connected Commercial Office Building, 600 Brickell will offer a growing suite of data, voice, and security solutions for tenants: Campuswide Wi-Fi: 600 Brickell delivers free wireless access for anyone visiting the building or the plaza, as well as secure network access for tenants and their guests with few, if any, blackout zones. Digital Antenna System (DAS): With the rise of mobile technology, smart phones and tablets are vital tools for conducting day-to-day business. To avoid low signal strength or dropped calls, 600 Brickell has installed a DAS to carry signals through the campus, even in the elevators. ISO 27001:2005 Certification: Taking a broad and specific view of security is the fundamental rule in helping ensure the highest level of safety for any network. This is the first building to be ISO certified,which is the most comprehensive security standard in the world, providing safety from every angle. 195 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

197 PRODUCT LIST Routing and Switching Cisco ASR 1004 Series Aggregation Services Routers Cisco Catalyst 3560-X Series Switches Cisco Nexus 7000 Series Datacenter Series Switches Security Cisco ASA 5585-X Series Adaptive Security Results Connectivity and Communication Just as business is dependent on technology, technology is dependent on communication and connectivity. For this reason, high availability was a key element in the design of 600 Brickell s ICT infrastructure. The first building in Florida to qualify as a Cisco Connected Real Estate property, it provides a convergence of connectivity, security, and communication. 600 Brickell provides high availability connectivity through a fully redundant technical infrastructure exclusively for tenants, guaranteeing the highest possible availability so businesses stay connected. Appliance Cisco ASA 5520 Series Adaptive Security Appliance Optical Cisco ONS Optical Multiservice Transport Platform Wireless LAN Cisco Aironet 3500 Series Access Points with Operational Efficiency 600 Brickell will be one of only three Leadership in Energy and Environmental Design (LEED) Platinum-Certified high-rise buildings on the eastern seaboard, and one of only 14 of its size in the entire world. This is the highest level of certification given out by the U.S. Green Building Council. The operational efficiency benefits for those leasing in a LEED-certified building are numerous, from the health and productivity of employees to significant financial advantages. From on-site ICT experts to scalability, 600 Brickell offers unique tenant advantages that are delivered in a single, integrated, cost-effective, sustainable package Safety, Security, and Availability CleanAir Technology Helping ensure information technology security, 600 Brickell is currently the only building of this magnitude to have earned ISO Cisco 5500 Series Wireless Controllers certification. 600 Brickell is designed to provide tenants with the highest levels of personal, business, and data security. State-of-the-art systems provide access control, closed-circuit TV monitoring, and amenities management technology, rivaling any Class-A office tower in the United States and setting new standards for the Miami market. This ongoing certification provides the highest international standard for information security. The infrastructure is designed to support the uninterrupted flow of business, even in emergency situations. For More Information To find out more about Cisco Connected Real Estate Solutions, visit: To find out more about 600 Brickell, visit: To find out more about Venturian Group, visit: JW Marriott Marquis Miami and Hotel Beaux Arts Miami offer pervasive video and wireless for business and leisure guests. Challenge Opened in November 2010, JW Marriott Marquis Miami is the first hotel to combine the JW and Marquis brand of Marriott hotels, which represents a new benchmark for luxury and technology. The 313-room hotel includes another embedded hotel on the 39th floor, the Hotel Beaux Arts Miami. "Our goal for the JW Marriott Marquis Miami and Hotel Beaux Arts Miami is to create hotels for the 21st century, giving guests the benefit of advanced technology in a luxury setting, in an urban environment," says Florencia Tabeni, general manager of JW Marriott Marquis Miami. "We wanted to provide every technology amenity 196 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

198 available to travelers, whether they joined us for business or pleasure." The hotels' target market consists of highly accomplished, technology-savvy guests who expect the world's best business tools, room amenities, and business services. To appeal to these discriminating travelers, the property developers, MDM Development Group and MetLife, wanted to transform hotel service delivery. They envisioned using advanced video, collaboration, and networking technologies to create a unique and exciting experience throughout the property, delighting leisure travelers and providing world-class collaboration capabilities for business travelers. In the vision, business guests would be able to interact with coworkers, customers, or hotel concierges in other locations with ultra-high-quality video and audio rivaling the in-person experience. Visitors to the 10,000-square-foot NBA-approved basketball arena, convertible to a tennis court or ballroom, could augment their enjoyment of the live event with dynamic video content displayed on a gigantic video wall. Even the mundane aspects of hotel stays, such as arrival and wakeup calls, would be delivered in memorable and exciting ways. "Using video to this extent had never been done in the hospitality industry," says Nicolas Corrochano, vice president of IT for MDM Group. "We needed to find the right technology and the right partners to pioneer a new type of hotel experience." The venture would require exquisitely coordinated interactions between highbandwidth wired and wireless networks, multiple business video and collaboration applications, and endpoints such as video displays and IP phones. And yet, the hotel's technology had to be easy to manage so that the small IT staff could focus on guest needs. Solution The property developers engaged Modcomp, a Cisco Certified Silver Partner, to plan, design, and implement the technology to make the guest stay luxurious, exciting, and unique. Modcomp achieved the goal using the Cisco Connected Hotels framework, making JW Marriott Marquis Miami and Hotel Beaux Arts the first organization of any type to combine a dozen Cisco technologies for business video, unified communications and collaboration, physical security, and data center under one roof. "In Cisco we found a single, trusted vendor for all of our video and collaboration needs: for business, entertainment, and physical safety," says Corrochano. "The result is a stay that's memorable for all guests and highly productive for business guests." The distinctive JW Marriott Marquis Miami experience begins the moment that a guest enters the property. In the lobby, a concierge greets guests from a video Virtual Concierge unit, based on a Cisco TelePresence system that provides in-person-quality video and audio. "Guests love talking with the virtual concierge about the hotel, and this initial unusual encounter sets the expectation that the experience at the JW 197 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

199 Marriott Marquis Miami will be out of the ordinary," says Paul Pebley, director of sales and marketing for the hotel. During their stay, business guests can enjoy a myriad of video and collaboration tools to make their conferences productive and exciting: Virtual Meetings by Marriott: JW Marriott Marquis Miami has joined other Marriott hotels worldwide in offering the Virtual Meetings by Marriott service, based on Public Cisco TelePresence technology. Up to six people in a room can interact face-to-face with coworkers or customers in other participating Marriott locations worldwide, or in any privately owned Cisco TelePresence room. Joining a scheduled meeting is as simple as pressing a button on the room's Cisco Unified IP Phone. Mobile Video Concierge: Meeting planners can request a mobile Video Concierge unit. Attendees who need reservations or other services can interact with a concierge face to face from the meeting area, without having to go to the lobby. World's largest video wall powered by Cisco: In the arena, one wall is dominated by a 450-square-foot video wall built from 52-inch Cisco LCD Professional Series displays powered by Cisco Digital Media Players. The wall can display 25 separate images, one colossal image, or anything in between. Sports teams can display their logos and player action shots, and wedding guests using Cisco Flip Video Camcorders or other devices can capture video that is streamed live or shown later. Digital signage: Cisco Digital Signs on each of the five public floors provide eye-catching, up-to-the-minute information about meeting locations, hotel attractions, and special offers. Staff can easily upload and schedule content using a cloud service from Industry Weapon, a Cisco Developer Network partner. The system is integrated with the hotel reservation system, so that meeting room information automatically appears on the signs, with no effort from staff. Wireless IP phones for guest use: In guest suites, two Cisco Unified IP Phones 7975G provide highfidelity audio and a large touchscreen color display. Guests can simply touch the screen to order room service, check the weather, browse special offers, and more, a capability of VIP/Suite software from Nevotek, a member of the Cisco Developer Network Program. "A guest who uses the phone to request an automated wake-up call is invited to order breakfast by touching an interactive menu on the phone," Pebley says. Guests who prefer to talk to an associate just press a button, and Cisco Unified Contact Center Express routes the call to the first available associate. Each room also has a Cisco Unified Wireless 7921G IP Phone that guests can bring with them to use anywhere on the property. 198 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

200 Results One-of-a-Kind Guest Experience, Transforming the Hotel Industry Pervasive video and wireless differentiate the hotel for even the most seasoned global travelers, enabling the transformation of a hotel experience that has until now changed only incrementally. "Technology enhances the experience at the JW Marriott Marquis Miami, and the goal is that guests will return often and tell their friends," Pebley says. "Business guests can collaborate in new ways, and leisure guests can have more fun." Even before opening, the hotel began receiving inquiries from conference planners interested in streaming live video into conference rooms, for surgical conventions, for example. Exciting, Effective Marketing of Hotel Services Hotel restaurants, retail stores, and spas advertise their services in an attention-getting format, using Cisco Digital Signs. "Guests appreciate finding out about hotel offers, and the hotel maximizes revenue potential from its services," says Pebley. Modcomp integrated Cisco Digital Signs with other hotel systems to automatically display special offers based on specified conditions. A spa discount is advertised when a certain number of appointments are available, for example, and is automatically removed from the content playlist when the appointments are filled. Operational Efficiency Collaborating with a single vendor for the underlying media-optimized network (medianet), telepresence, digital signage, video wall, video surveillance, and voice and voic is very convenient, according to Corrochano. "We need far less staff time to manage a converged network than hotels with multiple networks," he says. "That gives our IT team more time for guests who need assistance with their own technology." Support is simplified, as well, because the hotel does not have to wait while multiple vendors determine whose technology is the source of the issue. Guest Safety JW Marriott Marquis Miami also offers its guests the latest in physical security technology, using Cisco IP Video Surveillance and Cisco Physical Access Control. Approximately 70 Cisco IP Video Surveillance cameras are deployed throughout the property's public areas and valet parking lot, managed centrally with Cisco Video Surveillance Manager software. And if a guest has a health emergency and calls 9-1-1, Cisco Emergency Responder simultaneously notifies designated hotel personnel so they are prepared to respond appropriately. Next Steps With the Cisco network in place, the hotel has the foundation to add future video and collaboration tools, remaining at the vanguard of the hospitality industry. One plan is to provide Cisco TelePresence 500 systems in certain suites, enabling executives to meet face to face with coworkers and customers without leaving the property. The MDM Development Group also expects to increase return on investment by delivering the Virtual Concierge and IP video surveillance services over the WAN to other Marriott hotels in the area. The other hotels would only need to invest in the Cisco TelePresence displays or IP video surveillance cameras, not the underlying applications. Technology Implementation The unique JW Marriott Marquis Miami experience begins with the network. At the core of their data center, a Cisco Nexus 7000 Switch provides 10 Gigabit Ethernet connectivity throughout the entire property to support highbandwidth video traffic. Each group of three floors has a Cisco Catalyst 4510R-E Switch that connects to the core over dual 10 Gigabit Ethernet links and delivers Gigabit Ethernet to each guest room. Each room has six Ethernet connections, for three Cisco Unified IP phones, an IP-enabled television, a thin client device for Internet access, and a minibar that senses when guests remove food and beverage items and centrally records the information. 199 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

201 Guests and staff can also connect wirelessly from their laptop, Apple ipad, smartphone, and Cisco Unified Wireless IP Phone from anywhere on the property, thanks to a Cisco Unified Wireless Network based on Cisco Aironet 1200 Series Access Points. In the hotel data center, a Cisco Unified Computing System (UCS) C-Series 200 hosts all the applications that the hotel uses for collaboration, business video, physical safety and security, and network management. "Cisco UCS Extended Memory Technology will allow the hotel to host more applications in the same space, scaling cost-effectively and without increasing energy consumption," says Carlos Marchini, director of advanced technologies for Modcomp. Applications housed on the Cisco UCS include Cisco Unified Communications Manager, Cisco Unity voic , Cisco Unified Contact Center, Cisco TelePresence software, Cisco Digital Media Manager, Cisco Video Surveillance, Cisco Physical Access Control, Cisco Data Center Network Manager, and Cisco Wireless Control System. Third-party applications include Microsoft Exchange, terminal services for the inroom thin clients, the Nevotek V/IP Suite application that delivers services to the Cisco Unified IP phone in guest rooms, and push-to-talk software from Singlewire that makes Cisco Unified Wireless IP phones act like walkie-talkies for the housekeeping, janitorial, and engineering staff. "Altogether, we incorporated 12 advanced technologies, all of them from Cisco, greatly reducing the complexity and cost of this ambitious project both before and after the hotel opens," says Tony Silva, senior vice president of strategy for Modcomp. Hospitality industry The hospitality industry is a broad category of fields within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a several billion dollar industry that mostly depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, housekeepers, porters, kitchen workers, bartenders, etc.), management, marketing, and human resources. India is believed to be one of the top most tourism spot from , having the highest ten year growth potential, according to the World Travel and Tourism Council (WTTC). The country's travel and tourism industry is one of the most profitable industries in the country, and is credited with contributing a substantial amount of foreign exchange. Indian tourism offers a potpourri of different cultures, traditions, festivals, and places of interest. Sector Overview: The Indian tourism and hospitality industry experienced a growth of 24.6% during timeframe. The industry is the third-largest foreign exchange earner, accounting for 6.2% of India s GDP and 8.8% of India s total employment, according to a report by the Planning Commission. It has significant linkages with other sectors such as agriculture, horticulture, transportation, handicrafts and construction. The tourism industry includes travel agencies, tour operating agencies and tourist transport operating agencies; units providing facilities for cultural, adventure and wildlife tourism; surface, air and water transport facilities for tourists; and convention/seminar units and organizations. According to the Planning Commission, the sector creates more jobs per million rupees of investment than any other sector of the economy and is capable of providing employment to a wide spectrum of job seekers, from the unskilled to the specialized, even in the remote parts of the country. The sector s employment-generation potential has also been highlighted by the World Travel & Tourism Council (WTTC), which says India s travel and tourism sector is expected to be the second-largest employer in the world, employing 40,37,000 people, directly or indirectly, by Travel and tourism is a USD 32 billion business in India, according to industry estimates; in addition, the hospitality sector is sized at USD 23 billion and it is expected that this sector will witness an inflow of USD billion in investments over the next two years, according to market research company Technopak Advisors. It is expected that the hospitality sector is expected to see an additional US$12.17 billion in inbound investments over the next two years, based on their estimates. 200 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

202 The size of the Indian hospitality industry is estimated as a sum of revenues of two segments revenues generated from travel (business, leisure, visiting friends and relatives, religious, meetings and conferences) and revenue generated by consumers eating out at any form of outlet (restaurants, fine dining, quick service restaurants (QSRs), takeaways, or any other form of unorganized eateries). The Indian tourism sector includes medical and healthcare tourism, adventure tourism, heritage tourism, ecotourism, rural tourism and pilgrimage tourism. Medical tourism also known as health tourism has emerged as an important segment, owing to India s skilled healthcare professionals and the lower cost of healthcare facilities in the country. Wellness tourism is regarded as a sub-segment of medical tourism and it involves the promotion and maintenance of good health and well being. India, with its widespread use of Ayurveda, Yoga, Siddha and Naturopathy, complemented by its spiritual philosophy, is a well-known wellness destination. Heritage tourism is oriented towards exploring the cultural heritage of a tourist location. India is well known for its rich heritage and ancient culture. The country s rich heritage is amply reflected in the various temples, majestic forts, gardens, religious monuments, museums, art galleries and urban and rural sites. Due to its varied topography and distinctive climatic conditions, India is endowed with various forms of flora and fauna, and it has numerous species of birds, mammals, reptiles, amphibians and plants life on offer for tourism. Wildlife tourism includes wildlife photography, bird watching, jungle safari, elephant safari, jeep safari, jungle camping, ecotourism, etc. MICE (meetings, incentives, conferences and exhibitions) tourism is also one of the fastest-growing in the global tourism industry. It caters largely to business travelers, mostly corporates. It caters to various forms of business meetings, international conferences and conventions, events and exhibitions. The Ashok, New Delhi; Hyderabad International Convention Centre, Hyderabad; and Le Meridian, Cochin, are forerunners in the Indian MICE tourism industry, facilitating domestic and international business meetings and conferences. Policy and Promotion: Cumulative foreign direct investment (FDI) inflows into the tourism and hospitality sector have been estimated at USD 2.37 billion between April 2000 and March According to the Ministry of Tourism, foreign exchange earnings from tourism during 2010 were estimated at USD billion. The government has permitted 100% FDI in the sector under the automatic route, FDI into all construction and development projects including construction of hotels and resorts, recreational facilities, and city and regional-level infrastructure. In terms of incentives, a five-year tax holiday is extended to organizations that set up hotels, resorts and convention centers at specific destinations. Besides this, the government has initiated measures to bolster the sector, such as provision of visa on arrival for tourists from Finland, Japan, Luxembourg, New Zealand and Singapore, and launch of several schemes that promote rural tourism and infrastructure related with the sector. The government has also launched campaigns such as Incredible India!, Colors of India, Atithi Devo Bhavah and the Wellness Campaign to promote the Indian tourism and hospitality industry. For instance, the government has introduced a new category of visa, medical visa ( M -Visa), to promote medical tourism. Further, it has tied up with the United Nations Development Program (UNDP) to promote rural tourism. The ministry has sanctioned 102 rural tourism infrastructure projects to spread tourism and socioeconomic benefits to identified rural sites with tourism potential. During the 11th Five-Year Plan, the tourism ministry had sanctioned an amount of Rs billion for 991 tourism infrastructure projects, including rural tourism and human resource development projects. Some other schemes introduced by the Government of India include: Scheme for product/infrastructure and destination development Scheme for integrated development of tourist circuits Scheme of assistance for large revenue generation projects Scheme of capacity building for rural tourism 201 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

203 Several other initiatives undertaken to promote different tourism products include the following: Rural tourism: Rural tourism showcases rural life, art, culture and heritage at rural locations. The existing scheme for destination development supports the development of infrastructure in rural areas. Under this scheme, the thrust is on promotion of village tourism as a primary product to spread tourism and its socio-economic benefits to rural and new geographic regions. The Ministry of Tourism has joined hands with the UNDP for capacity building around 153 rural tourism projects have been sanctioned in 28 states/union Territories including 36 rural sites where UNDP offers support in capacity building. Under the Visit India 2009 scheme, around 15 rural tourism sites were selected as rural eco-holiday sites. Adventure tourism: Measures to promote adventure tourism include financial assistance to state governments/union Territory administrations for development of adventure tourism destinations and granting of exemption from customs duty on inflatable rafts, snow-skis sail boards and other water sports equipment. Adventure tourism activities in India include mountaineering, trekking, mountain biking, river rafting and rock climbing. In July 2009, the Ministry of Defence gave permission for opening of 104 additional peaks in Leh area of Jammu & Kashmir for adventure tourists. India was ranked fifth in the world for hotels with the best business outlook, according to a report by Trip Advisor. The country showed optimism with the highest proportion of businesses in Asia-Pacific (APAC) region. It displayed unbridled optimism with the highest proportion of businesses in APAC that expect the economy to improve in the second half of India was also ranked highest globally, among all countries surveyed for staff turnover, based on increased staff levels. Moreover, India has also emerged as one of the world's most cost-efficient medical tourism destinations. Medical tourism in the country is a sunrise sector valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year. It is expected that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during , according to a RNCOS report titled 'Booming Medical Tourism in India'. Hotels are an important component of the tourism product. They contribute in the overall tourism experience through the standards of facilities and services offered by them. Market Size The foreign tourist arrivals (FTAs) during September 2012 were registered at 415,000 as compared to FTAs of 402,000 during September A growth of 3.2 per cent was registered in September 2012 over September The foreign exchange earnings (FEE) during September 2012 were worth Rs 6,652 crore (US$ 1.26 billion) as compared to Rs 5,748 crore (US$ 1.09 billion) in September The growth rate of FEE in rupee terms was 15.7 per cent in September 2012 over the corresponding month a year ago. The FEE through tourism in India was recorded at Rs 77,591 crore (US$ billion) during The amount of FDI inflow into the hotel and tourism sector during April 2000 to July 2012 was worth US$ 3, million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce. The overall hotel rates in India registered an increase of 12 per cent during the first six months of the year. This was due to a surge in demand from domestic travellers, as per the latest Hotels Price Index (HPI) study conducted by Hotels.com. The index looks at prices that people paid for their hotel rooms around the world. Investments India and Bulgaria plan to explore the possibilities of cooperation in the tourism sector. The two countries emphasised upon the need to start exchanges of visits of tour operators and opinion makers to promote tourism between the two countries Federation of Hotel & Restaurant Associations of India (FHRAI) has signed four memorandum of understanding (MoUs) with its international counterparts, spanning in USA, Europe, Middle East, UK, China and United Nations World Tourism Organisation (UNWTO) to exchange expertise and fraternity strategy evolution US-based Wyndham Hotel Group is set to expand to 70 properties in India by "India is a key market for us and we have nearly doubled our presence in the past two years," as per Mr Frank Trampert, Managing Director (APAC), Wyndham 202 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

204 The Government of Maharashtra plan to set up an international cruise terminal at Mumbai port to attract international cruise tourists from Europe and the US KEF Company plans to invest Rs 1,600 crore (US$ million) in Kerala. The project includes a luxury hotel, integrated manufacturing facilities and a super specialty hospital in Kozhikode Toyota Enterprises has entered into a joint venture (JV) with the Bengaluru-based Hyagreev Hotels, which runs The Chancery Hotel in Bengaluru. The project is Toyota Enterprises' first, outside Japan Daiwik Hotels Pvt Ltd that debuted with a four-star property at Rameswaram in Tamil Nadu, plans to have a chain of properties at various pilgrimage centres in the country ITC has launched the world's largest LEED Platinum green hotel (an eco certificate), Grand Chola, in Chennai, Tamil Nadu, with an investment of over Rs 1,200 crore (US$ million) Government Initiatives The Ministry of Tourism, Government of India, endeavours to position India as a preferred tourism destination to promote various Indian tourism products vis-à-vis competition faced from various destinations and to increase India's share of the global tourism market. The Government of India allows 100 per cent foreign direct investment (FDI) in the hotel sector on automated basis. Some of the major initiatives taken by the Government of India to promote tourism and hospitality sector in the country are: The Union Government has decided to provide jobs to 100,000 youths in the tourism industry during the current financial year to cater to the millions of foreign tourists visiting the country annually. In 2011, a total of 6.29 million foreign tourists visited India. The Government plans to double the figure within five years Maharashtra has topped the list in number of foreign tourist visits (FTVs), followed by Tamil Nadu and New Delhi. The State received nearly 4.8 million tourists, according to the latest report from the Ministry of Tourism. The contribution of top 10 States was about 90.1 per cent to the total number of foreign tourists visits in the country for 2011 Gujarat has allocated Rs 400 crore (US$ million) for tourism promotion in the State during the current fiscal. The amount includes Rs 120 crore (US$ million) as grant which has been approved by the Planning Commission for The Planning Commission has approved Rs 1,200 crore (US$ million) to promote coastal tourism in Gujarat, as per Mr Sanjay Kaul, Commissioner and Managing Director, Tourism Corporation of Gujarat Ltd In an endeavour to give a stimulus to the 'Incredible India' campaign and cinema as a sub-brand of Incredible India, at various international film festivals abroad, the Ministry of Information and Broadcasting (I&B) and Ministry of Tourism have signed a memorandum of understanding (MoU) to provide support for film tourism The Ministry of Tourism has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The Indian tourism industry has been witnessing an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to increase up to US$ billion by the end of The road ahead The Indian hospitality sector is certainly the most apt replication of the belief 'Atithi devo bhava' touch of tenderness, a helping hand and a welcoming visage. According to the World Travel and Tourism Council (WTTC), the growth in the hospitality industry is pegged at 15 per cent every year, with 200,000 rooms needed, the hotel segment of India is on the brink of an astounding growth. According to the Tourism Satellite Accounting (TSA) research, released by WTTC and its strategic partner Oxford Economics in March The demand for travel and tourism in India is expected to grow by 8.2 per cent between 2010 and 2019 and will place India at the third position in the world. 203 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

205 India's travel and tourism sector is expected to be the second largest employer in the world, employing 40,037,000 persons by Capital investment in India's travel and tourism sector is expected to grow at 8.8 per cent between 2010 and The report forecasts India to get capital investment worth US$ 94.5 billion in the travel and tourism sector in India is projected to become the fifth fastest growing business travel destination from with an estimated real growth rate of 7.6 per cent. Global Hospitality Scenario The hospitality industry being highly sensitive to economic and competitive market conditions will need to address six important issues in couple of years, cost controlling, branding, new expansion strategies, head count management, eco-friendly initiatives and technological innovations / adaptations. Travel and tourism is the largest service industry globally in terms of gross revenue and foreign exchange earnings. It is also one of the largest employment generators in the world. It has been a major social phenomenon and is driven by social, religious, recreational, knowledge seeking and business interests and motivated by the human urge for new experience, adventure, education, and entertainment. Tourism is both cause and consequence of economic development. It has the potential to stimulate other sectors in the economy owing to cross-synergistic benefits and its backward and forward linkages. 58% of global hotel accommodation owners and managers worldwide believe their business will be either a lot more profitable (13%) or a little more profitable (45%) this year, according to results from a survey released in February By contrast, just 12% say they will be less profitable. Business outlook appears to be tied to predictions of direct bookings: 62% believe their direct bookings will increase a lot (15%) or a little (47%), compared to 7% who forecast them decreasing. US respondents appear the most optimistic when it comes to business performance: 76% believe their business will be more profitable this year. This optimism may be tied to their outlook on the economy: American respondents (65%) are far and away the most likely to believe the economy will improve this year, ahead of their gloomier German and Italian counterparts (both at 30%). According to Economic Survey of the average annual growth rate of hotel and restaurant sector has been 8.8 per cent for the period during and However, last two years have not been quite 204 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

206 pleasant for the sector as growth faltered badly. Till five years ago, the sector was registering a growth of around 15 per cent but slowdown in the economy has affected the growth prospects of the sector badly and the growth rate has dropped into single digit level. The sector registered negative growth (-3.41 per cent) in over the year , which was due to the adverse global economic conditions in this year. But, the sector is back in the positive growth territory and clocked a growth of 2.2 per cent in International Tourist Arrivals and growth rate Source: UNWTO and ICRA Estimates Foreign Tourist Arrivals into India 205 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

207 Source: Ministry of Tourism, Government of India, and ICRA Estimates CASE STUDY Leading Hotel & Resort Brand Harnesses the Voice of the Customer to Improve the Guest Experience About the Brand One of the leading hotel and leisure companies in the world has over 1,000 properties spanning eight different brands in 100 countries and approximately 145,000 employees at its owned and managed properties. The company is also one of the premier developers and operators of high quality vacation interval ownership resorts. Challenge: With a reputation for driving ever-higher levels of guest loyalty, satisfaction and brand advocacy, the hospitality company strives to continually improve its guest experiences. And what better way to accomplish that goal than by gaining a deep understanding of the wants, needs, and preferences of its guests? Indeed, collecting and analyzing customer feedback on an ongoing basis lies at the heart of the company s day-to-day operations and overall growth strategy. Each of the hotels across the hospitality company s entire portfolio of renowned brands automatically invites guests to complete a brief online satisfaction survey following their stay. The survey consists of standard questions with answer choices for rating different aspects of the guest experience, from the cleanliness of the room to the friendliness of the staff. The survey also contains questions with comment boxes for soliciting open-ended feedback. Tabulating the quantitative response information was easy enough. But compiling and interpreting the openended feedback was a different story altogether. These freeform answers to open-ended questions in the surveys put the onus on each hotel s property manager to manually sort, review, and prioritize the seemingly endless flow of guest comments. It was a cumbersome and time-consuming process. Yet buried in this unstructured feedback were valuable insights that property managers needed to know. For example, the managers needed to understand the drivers of guest satisfaction and to communicate positive feedback to hotel staff. More importantly, they needed to identify issues that negatively impacted the customer experience issues that, if left unresolved, could eventually erode customer loyalty and damage brand reputation. The property managers had no easy way to consistently flag and categorize recurring issues, identify emerging trends or disseminate the key findings to their teams. It was simply impossible for all the managers to go in and try to read through all the comments and conduct the analyses manually, recalls the project manager, a senior manager in the company s global brand compliance group responsible for implementing it s customer feedback program. In addition to maximizing the value of the survey data, the company sought to keep closer tabs on what its millions of guests were saying about the brand in peer-to-peer social networks. TripAdvisor was the obvious place to start. The popular travel web site serves as the primary source of online guest ratings and reviews, and contains the highest volume of comments for all of the hotel properties.ultimately, the goal was to generate customer insights from both solicited (survey) and unsolicited (social media) comments through a unified platform. Data integration was important as was the ability to easily access, prioritize, and share the key 206 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

208 findings. We were specifically looking for a tool that would provide the managers with a quick snapshot of the top ten guest compliments and top ten guest complaints each month, says the project manager. We also wanted to allow them to be able to drill down to look at the actual comments. Solution Having evaluated a number of technologies for implementing voice of the customer programs, the company selected Attensity, a leading provider of social analytics and engagement applications, for its ease of use and ability to handle high volumes of customer feedback data across multiple channels, including social media and survey responses. The Attensity Analyze solution is extremely easy to use, says the project manager. On the reporting side, it allows the hotel to edit and synthesize reports very quickly and very easily. Attensity s out of the box Hospitality Industry Solution, which includes predefined categories, topics and analytics designed to meet the needs of the travel and hospitality industry, greatly reduced the company s implementation time. The Attensity industry solution was then further refined based on the categories that the company considered most important to improving the customer experience, such as those related to room service, hallway noise, Internet access and bed comfort. The hospitality company put the new system to the test in the summer of 2010, selecting two hotels from each of its divisions to participate in the pilot program. A third-party solution provider delivers the survey response data on a weekly basis. Meanwhile, Attensity s natively integrated social media monitoring component mines guest feedback from Trip Advisor, mining all relevant comments for analysis alongside the survey data. Based on this combined feedback, a customized report is distributed monthly to the managers of each of the 1,000-plus hotel properties. The first page provides a summary of the key customer insights both positive and negative. The reports are interactive, making it possible to drill down and read any of the individual compliments or complaints in their entirety as well as gain information about the author, including their likelihood to recommend the hotel. Results Following the pilot, the company rolled out the new system to all of its divisions. The customer insights derived from the guest satisfaction surveys and TripAdvisor user comments have already made a strong impact. Most property managers now rely on the monthly reports to prioritize activities and identify new opportunities, and the top ten complaints and compliments section have become the focus of virtually every staff meeting. The reports really help the manager drive teams and operations to see where they have to improve in order to raise the guest satisfaction index, says the project manager. In the near future, the company plans to expand its use of Attensity to take advantage of a number of capabilities in Attensity Analyze. Foremost among these is the ability to access the information through an interactive digital dashboard, allowing users to drill into the data at a granular level and analyze comments by narrowly-defined customer segments for example, Gold or Platinum level members of the hotel s customer loyalty program. Visualization tools will provide a better understanding of how satisfaction is increasing or decreasing over time. Property managers will also be able to perform analysis on a number of different levels. For example, a property manager can compare his or her hotel versus the brand as a whole, or see how their property stacks up against another property in the same locale. Using Attensity Analyze, the company can also perform competitive analysis. There are about 46 other competitive brands that we care about that we ll be bringing into the analysis, says the project manager. Attensity will allow us to see at a glance how guests rate a specific hotel versus our competitors in that same location. With Attensity Analyze, hotel property managers will be able to more effectively infuse customer feedback into their day-to-day operations. At the same time, analysts can slice and dice the data in a variety of ways to guide decision-making at the corporate level. We recognize that we have to earn our guests business one experience at a time, says the project manager. 207 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

209 The Attensity Analyze solution will give our property managers the ability to better understand their needs at a very detailed level, and use that feedback to respond faster and in a more targeted way than our competitors. Guest promoter scores What are the complaints by promoter, passives and detractors? 208 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

210 About Attensity Attensity helps the world s leading brands leverage customer conversations as a business asset. Media and Entertainment Industry The media and entertainment industry consists of many different segments under its folds such as television, print, and films. It also includes smaller segments like radio, music, OOH, animation, gaming and visual effects (VFX) and Internet advertising. Entertainment Industry in India has registered an explosive growth in last two decades making it one of the fastest growing industries in India. From a single state owned channel, Doordarshan in the 1990s there are more than 400 active channels in the country. Worldwide, 2010 saw the global economy begin to recover from a steep decline in Improved economic conditions in 2010 played a major role in a rebound in customer spend. Since the world economy begin to recover from the global financial crisis of 2008, improved economic conditions played a major role in rebound in consumer spend. While India was not critically impacted by the downturn in 2008 and 2009, it demonstrated one of the highest growth rates this year and continued to at a healthy pace. The rising rate of investments by the private sector and foreign media and entertainment (M&E) majors have improved India's entertainment infrastructure to a great extent. Rising disposable incomes, coupled with macro-economic stability, have brought a paradigm shift in Indian consumers' lifestyles wherein they have started giving huge importance to the 'entertainment' quotient in their lives. India's media and entertainment (M&E) industry, which was pegged at Rs 80, 000 crore (US$ billion) in 2011, is largely driven by this new trend. The Indian M&E industry is the fastest growing industry followed by China (14 per cent), Russia (12 per cent) and Brazil (11 per cent) as it is projected to grow at 17 per cent compounded annual growth rate (CAGR) between 2012 and 2016, according to the 'Indian Entertainment & Media Outlook 2012' report prepared by industry body Confederation of Indian Industry (CII) and consulting firm PricewaterhouseCoopers (PwC). The report identifies rising advertising and consumer spends, infrastructure and policy support, as the major game-changers for the industry. The industry growth will be further propelled by technological innovation, leading to better quality of media content being consumed wherein internet access will be the key enabler. Market Dynamics in India The advertising segment, which contributes about 35 per cent of revenue in the M&E industry in India, is dominated by television (TV) and print that constitute about 80 per cent of the pie, according to the PwC-CII study. The report further pointed out that both the segments will continue to dominate the industry over the next five years. It also estimated that the Indian M&E sector's boom is largely attributed by burgeoning internet segment, which has the potential to outshine the print sector by I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

211 Achieving the target to cross US$ 100 billion-mark will not only benefit the industry, but will also create largescale employment, and help achieve India's goal of being a knowledge-driven economy through effective media. Moreover, internet and gaming segments have emerged as the fastest-growing sub-segments at 57 per cent and 33 per cent CAGR, respectively. Gaming segment has been recording substantial growth owing to the rising popularity of mobile and online and social media gaming. Television and Print Media Television still dominates as the most effective medium for video and content consumption followed by the internet, according to Deloitte's State of the Media Democracy Survey - India TV, along with newspapers has been rated as the most influential way for advertising while almost 72 per cent of the consumers use the web on daily basis. Moreover, accessibility to social networking sites has increased tremendously as 2009 survey indicated much lower figures at 3-4 per cent as against current statistics of per cent. Radio India's radio industry expanded by 15 per cent in 2011 to Rs.1, 150 crore (US$ million) in revenue from Rs.1, 000 crore (US$ million) in 2010, according to an M&E industry report by an industry lobby and consulting firm KPMG. The radio broadcasting sector is projected to grow at a CAGR of 16 per cent till phase-three stations commence operations by mid-2013, pointed the report, adding that the Government is expected to earn revenues worth around Rs.1,500-1,700 crore (US$ million) from the third auction of FM radio spectrum. The Government might hold the third auction for FM radio spectrum by March Phase three is expected to cover 227 new cities, in addition to the current 86, while 245 FM channels are operational in 86 cities under phase two. Online and Mobile Entertainment TV and mobile devices are being used increasingly for watching online content, according to a latest survey by market researcher NPD DisplaySearch. The study indicates that even though consumers view online content majorly from desktop computers and laptops, mobile devices such as tablets and smart-phones, and television sets are becoming popular medium for the purpose. The study found that 18 per cent of consumers access online content on their television on daily basis. Another survey conducted by Nielson on behalf of Google India indicated that 7 out of 10 of the buyers know the exact brand and model they want to buy with the help of online research before entering the store. This shift in consumer behaviour is attributed to easy access to information on the Internet - which has immensely boosted the concept of 'research online and shop offline'. Films The Indian film fraternity will complete its century in The industry is anticipated to grow by 9 per cent per annum till 2015 to mark US$ 2.8 billion as its value, according to Deloitte. Anticipating major cost benefits and effective synergies, PVR Cinemas has decided to acquire per cent stake in Cinemax India for Rs 395 crore (US$ million). PVR would become the largest movie exhibition chain in the country post this deal, as the strategic move will take its total screens to 351 across 85 locations giving the company access to eight new markets. However, Cinemax will continue to operate as a separate entity and its cinemas will not be re-branded. 210 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

212 Government Initiatives In a bid to establish a stronger bi-lateral people-to-people and media partnership, the Australian Broadcasting Corporation (ABC) and Prasar Bharati have signed a memorandum of understanding (MoU), wherein the two entities will share program content by utilising the extensive Doordarshan and ABC networks, allowing audiences in both the countries develop a more accurate and up-to-date appreciation of contemporary developments in the other nation. The ABC-Prasar Bharati MoU endorses co-production (with both parties to explore the possibility of executing television co-productions), programming exchange (to make content available on each other's network), the supply of English language learning programs by the ABC to Doordarshan, and the possible co-production and sharing of digital content. Moreover, the Indian Government intends to make India a teleport hub, enabling it to become an uplinking/down-linking centre, just like Hong Kong and Singapore. The Ministry of Information and Broadcasting (I&B), in consultation with the industry, will explore modalities, challenges and finalise the road map for the same. The initiative is expected to facilitate foreign investments, better technology and sustainable employment opportunities in the country. The Government has recently given its nod to 74 per cent of foreign direct investment (FDI) in direct-to-home (DTH), IPTV, and mobile TV. Road Ahead India's M&E industry is expected to grow at a compounded annual growth rate (CAGR) of 17 per cent between 2012 and 2016 to touch Rs.1.75 trillion (US$ billion), according to the CII-PwC report. Print and television will continue to be the leaders in the advertising industry, wherein TV would have a 43 per cent share of total advertising in 2016, compared with print's 41 per cent. Global scenario After weathering the storm brought on by the worldwide financial crisis, the global media and entertainment industry is poised to take center stage again. The global M&E industry is highly fragmented, with North America dominating the market. Asia Pacific (APAC), Latin America, and the Middle East are anticipated to develop rapidly, with APAC expected to witness the highest growth during the next five years, i.e Internet-based entertainment is gaining importance quite rapidly. It is projected to grow in double digits, and account for 10 percent of overall global industry growth in the next six years. Concisely, the market holds significant opportunities and it is expected to reach approximately US$1,289 Billion in 2017 with a CAGR of 5 percent during I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

213 CASE STUDY Indian Media & Entertainment Industry to touch INR 1,457 billion By 2016: FICCI-KPMG report Industry achieves 12 percent Growth in 2011; is projected to grow at CAGR of 15 percent over next five years Mumbai, March 10, 2012: In 2011, the Indian Media & Entertainment (M&E) Industry registered a growth of 12 percent over 2010, to reach INR 728 billon, says the FICCI-KPMG report. The growth trajectory is backed by strong consumption in Tier 2 and 3 cities, continued growth of regional media, and fast increasing new media business. Overall, the industry is expected to register a CAGR of 15 percent to touch INR 1,457 billion by The report will be formally released at the inaugural session of FICCI FRAMES 2012 on March 14, has been a challenging year not just for the Indian M&E industry, or even the Indian economy, but for the larger world economy. While India is still expected to grow at a healthy pace, growth is projected to be lower than earlier expectations. While television continues to be the dominant medium, sectors such as animation & VFX, digital advertising, and gaming are fast increasing their share in the overall pie. Radio is expected to display a healthy growth rate after the advent of Phase 3. Print, while witnessing a decline in growth rate, will continue to be the second largest medium in the Indian M&E industry. Also, the film industry had a reason to cheer, with multiple movies crossing the INR 100 crore mark in domestic theatrical collections, and INR 30 crore mark in C&S rights. Advertising spends across all media accounted for INR 300 billion in 2011, contributing to 41 percent of the overall M&E industry s revenues. Advertising revenues witnessed a growth of 13 percent in 2011, as against 17 percent observed in In terms of performance, 2011 proved to be a year with mixed results in terms of growth across different sub sectors. The traditional media businesses experienced a slow down compared to last year, especially in the second half of the year. However, the new media segments like Animation and VFX, Online and Gaming businesses witnessed phenomenal growth rates. Says Dr. Rajiv Kumar, Secretary General, FICCI The key highlights are rise in digital content consumption, launch of diverse content delivery platforms, strong consumption in Tier 2 and 3 cities, rising footprint of the players in the regional media, rapidly increasing new media business and regulatory shifts. According to Mr. Jehil Thakkar, Head of Media and Entertainment, KPMG in India The Media & Entertainment industry landscape is undergoing a significant shift. Cable digitization, the promise of wireless broadband, increasing DTH penetration, digitization of film distribution, growing internet use are all prompting 212 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

214 strategic shifts in the way companies work. Traditional business models are evolving for the better as a host of new opportunities emerge. The Media & Entertainment landscape is beginning to change with national cross media conglomerates emerging and consolidation and deal making finally picking up the pace, says Rajesh Jain, Head of Markets, KPMG in India. Key trends and industry drivers: Growth in digital content consumption across media Digital technology continues to revolutionize media distribution be it the rapid growth of DTH and the promise of digital cable, or increased digitization of film exhibition - and has enabled wider and cost effective reach across diverse and regional markets, and the development of targeted media content. There has been increased proliferation and consumption of digital media content be it newspapers and magazines, digital film prints, and online video and music or entirely new categories such as social media. Accordingly, online advertising spends have seen a spurt in growth viz-a-viz spends on traditional media. Rise of new age user devices Smart phones, tablets, PCs, gaming devices, etc. all form the foundation of a new wave in media usage. This is gradually impacting the way content is being created and distributed as well. Multiple media including TV, films, news, radio, music etc are being impacted with this change. New age consumers adapting themselves to the newer technologies As Indian consumers evolve, there is a heightened need to engage them across platforms and experiences. There is a greater need for integration and innovation across traditional and new media, with changing media consumption habits and preferences for niche content. Media companies today have no choice but to provide more touch points to engage with audiences. Regionalization Regional television and print continued its strong growth trajectory owing to growth in incomes and consumption in the regional markets. National advertisers are looking at these markets as the next consumption hubs and the local advertisers are learning the benefits of marketing their products aggressively. An advertising revenue dependant industry The ARPU (Average Revenue Per User) for television, average newspaper cost for print and average ticket price for films continue to be low on account of hyper competition in these industries. Segments like radio and a significant portion of online content are available free of cost to consumers. Owing to this, the Indian consumer is still not used to paying for content and hence the industry players are sensitive to the impact of the slowdown which affects the budgets of advertisers. Awaited regulatory shifts Lastly, apart from the shifts in consumer preferences, company strategies and business models, one big change awaited for the next growth wave is the implementation of recently enacted and regulations on digitisation for cable, implementation of Phase 3 and copyright for Radio and the roll out of 4G. These shifts are expected to be game changers in terms of how business is being done currently and what could be the path going forward. Key highlights Print: The print industry grew by 8.3 percent from INR 193 billion in 2010 to INR 209 billion in The growth was slightly lower than our expectation of 9.5 percent last year due to the challenging macroeconomic environmement and reduced advertising spends. Television: The over-all television industry is estimated to be INR 329 billion in 2011, and is expected to grow at a CAGR of 17 percent over , to reach INR 735 billion in The share of subscription to the total industry revenue is expected to increase from 65 percent in 2011 to 69 percent in The TV industry 213 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

215 continues to have headroom for further growth as television penetration in India is still at approximately 60 percent of total households. Films: With several high budget Hindi releases lined up across the year, 2012 is expected to sustain the growth momentum witnessed in The Indian film industry is projected to grow at a CAGR of 10.1 percent to touch INR 150 Billion in The industry is estimated to be INR 93 billion in 2011 indicating a growth of 11.5 percent vis-à-vis Music: While 2010 was the year of structural shift from physical formats to digital ones, 2011 provided users viable options of music consumption through different digital platforms. The Indian music industry achieved revenues of INR 9 billion in 2011, registering a growth of 5 percent over IT enabled services Introduction IT Enabled services (ITES), also called web enabled services or remote services or Tele-working, covers the entire gamut of operations which exploit information technology for improving efficiency of an organization. These services provide a wide range of career options that include opportunities in call Centres, medical transcription, medical billing and coding, back office operations, revenue claims processing, legal databases, content development, payrolls, logistics management, GIS (Geographical Information System), HR services, web services etc. IT-enabled services are broader than IT services. "IT-enabled services" are those services that have been transformed by information and communications technology, enabling them to be digitized, codified, and fragmented and therefore able to be undertaken at any distance from the core business and final customer. These services include those often associated with offshoring, including accounting, financial analysis, callcenter services, architectural drafting, and health-record transcription, among other services activities. This radically reduces costs and improve service standards. In short, this Internet service provider aims in providing B2B e-commerce solutions. ITES Services ITES offers different services integrated in a single delivery mechanism to end users. Some of the services offered include : Medical Transcription Document Processing Data Entry and Processing Data Warehousing IT Help Desk Services Application Development Enterprise Resource Planning Telecommunication Services Objectives of ITES ITES was formerly known as IndoNet. The main objectives of ITES are : Enabling business strategy Achieving an organization's business goals Global Perspective Indian Perspective 214 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

216 OVERVIEW In recent times, Software development and technical competence, domain knowledge, information technology enabled services experience and expertise for offering quality IT (ITeS) including business process outsourcing services, and their exposure to working on (BPO)/ knowledge process outsourcing various platforms and systems services (KPO) industry in India has emerged as one of the most dynamic and vibrant sectors in India's economy. The government of India has announced promotion of IT as one of the top priorities of the country. India has embarked on a policy agenda, which aims to restructure its economy with enhanced global participation. The foreign Director Investment (FDI) to supplement domestic investment for achieving a quantum jump in growth rate is now an integral part of Government of India policy initiatives imparting greater transparency to business procedures and integration with the global market place are seen as the hallmark of new industrial, trade and fiscal policies. Today, India's competence in IT, more significantly in computer software and information technology enabled services recognized globally. However, Indian IT firms and IT professionals have won world-wide recognition in terms of their technical competence, domain knowledge, experience, and expertise for offering quality IT services, and their exposure to working on various platforms and systems. Introduction India's Information technology (IT) and information technology enabled services (ITeS) segments are aligned in a way that the growth in one avenue has ripple effects on another. The IT & ITeS industry, as a whole, is the mainstay of Indian technology sector as it has driven growth of the economy in terms of employment, revenue generation, standards of living etc and has played a major part in placing the country on the global canvas. India has already established her brand equity in the global IT market. Indian IT software and services firms offer software product/packages; a wide spectrum of IT services including system management and maintenance, consultancy services, system integration, chip design, E-Governance, E-Commerce, IT enabled services covering banking/financial /insurance sector. Their IT enabled services also include CAD/CAM Multimedia, animation work, BPO (Business Process Outsourcing) assignments, Call centre related assignments, as well as Knowledge Process Outsourcing (KPO) / Legal process Outsourcing (LPO), medical lab, diagnostic and dental services, medical transcription services, e-publishing data conversion or digitization, type-setting, copy editing, content and design, graphics etc. The software industry is not only growing exponentially, it is moving up the value chain. It is evolving, from the initial staffing to software development - where it is currently the world's major supplier of engineers to integration and IT business consulting. Present Scenario The information technology (IT) and information technology enabled services (ITeS) industry has been one of the key driving forces fuelling India's economic growth. IT and ITeS sector's contribution to the national GDP has increased from 1.2 per cent in to an estimated 7.5 per cent in IT has evolved as a major contributor to India's GDP and plays a vital role in driving growth of the economy in terms of employment, export promotion, and revenue generation. The IT-BPO sector is responsible for creating significant employment opportunities in the economy. Direct employment within the IT-BPO sector is expected to grow by over 9 per cent to reach 2.77 million, with over 230,000 jobs being added in IT services exports (including Engineering Research and Design (ER&D) and software products) continue to be the largest employer within the industry with nearly 47 per cent share of total direct employment, BPO exports generate about 32 per cent of the total industry employment, and the remaining 22 per cent is accounted for by the domestic IT-BPO sector. The sector is responsible for enabling employment to an additional 8.9 million people in various associated sectors - catering, security, transportation, housekeeping, etc. 215 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

217 The information technology (IT) and IT-enabled services (ITeS) sectors in India have become crucial growth catalysts for the Indian economy. The Indian IT-BPO sector is expected to grow up to US$ 100 billion during IT-BPO sector's revenue as a proportion of India's gross domestic product (GDP) has expanded from 1.2 per cent in 1998 to an estimated 7.5 per cent in As per NASSCOM, within the global sourcing industry, the country has been able to augment its market share from 51 per cent in 2009, to 58 per cent in Further, export revenues (including Hardware) are estimated to reach US$ 69.1 billion in 2012 growing by over 16 per cent, while domestic revenues (including Hardware) would reach around US$ 31.7 billion, growing by over 9 per cent. Also, software and services revenues (excluding Hardware), comprising nearly 87 per cent of the total industry revenues, are expected to reach US$ 87.6 billion in However, in India's domestic computer software / services market is estimated to be Rs crore (US$ million) registering a growth of percent (23.79 percent in US$ terms) over the year when the domestic software services industry was estimated at Rs crore (US$ million). Share of Export & Domestic Segments in Computer Software / Service Segment Segment Export Export US$(MLN) RS. (CR) Growth in over (%) US$(MLN) RS. (CR) US$(MLN) RS. (CR) Software for Export Production Domestic Total US$ = Rs MARKET OVERVIEW Production During the year , the Production of Computer Software and Services is estimated to be Rs crore (US$ billion) registering a growth of 11 percent (15 percent in US$ terms) over the year when the total production of Computer software / Services was estimated to be Rs crore (US$64.95 billion). Production of Computer Software / Services has been growing at an annual average growth rate of percent (19.75 percent in US$ terms) during the past five years. 216 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

218 Export of software services Export of IT Software / Services estimated at Rs crore (US$ billion) during registered a growth of 7.75 percent (12.2 percent in US$ terms) over the year when the export of IT software and services was estimated at Rs crore (US$ billion). Today, India with its English speaking skilled manpower, high quality of services, very high productivity and a conducive policy environment with strong government support is the most preferred destination for ITES. India is a popular choice for customers seeking outsourced services because it is able to offer a 24X7 services and reduction in turnaround times by leveraging time zone differences. While customers are initially attracted by low costs, they stay on and expand because of the quality and productivity that India offers. India will remain a popular offshore Country. However, outsourcing to India is turning out to be a blessing for the top companies. India's edge in quality and cost benefit is what is drawing organizations towards her. The level of excellence India has attained in this field has not come overnight. Government policies, infrastructure, large number of people who can speak fluent English, who can adapt to western accents, have all played a pivotal role in India's success. During the year , export of ITES/BPO registered a growth of percent (14.93 percent in US$ terms) over the year In value terms, export of ITES/BPO is estimated to be Rs crore (US$ billion) up from Rs crore (US$ billion) estimated in the year Business Trends in IT/ITES India as an emerging market offers a large pool of IT savvy resources. It has been predicted that the Indian Domestic IT/ITES industry will grow from 99,254INRcrores in 2008 to 2, 06,398 INR corers in 2013 which constitutes 39% of total revenue. The IT/ITES Exports Revenue constitutes remaining 61% of revenue share by As of today, in India IT/ITE S industries are highly localized and clustered in seven Indian cities. These places include Bangalore, Hyderabad, Chennai, Gurgaon/Noida/New Delhi, Kolkata, Mumbai, and Pune. Due to infrastructure limits and scarcity of land the geographical spread is gradually expanding to cover Ahmedabad, Bhubaneshwar, Chandigarh, Coimbatore, Jaipur, Kochi, Madurai, Mangalore, Mysore, and Trivandrum. It is estimated that over 80% of IT units in India are SMEs and they constitute only 30% of the entire IT exports from India. Access to high quality education has created a growing pool of resources. Further economic liberalization and initiatives at central and state levels to improve the ease of doing businesses have catalyzed Entrepreneurship. The spread of e-governance and improvement in infrastructural capabilities has resulted insignificant growth in entrepreneurial activities. The IT/ ITES industry has a major impact on the labor market in India. It is estimated that nearly 8 to 10million employees directly or indirectly support the 217 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

219 IT/ITES industry in India. In contrast to this, India saw the highest attrition rate of 23% in first quarter of in IT industry. Some of the challenges faced by mid-sized companies in current market scenario include competition from low cost countries, growing attrition rates along with employ ability issues, increasing cost of operations, high client concentration to deliver services (52%), higher cost of acquiring new clients and changes in structure of demand. Growth in IT/ITES Sector Despite challenging global environment, Indian IT-ITeS industry grows by a 19.5% during In term of Revenue growth of Indian IT-ITeS industry, it is expected to have regained momentum with an estimated 19.2% growth, aggregating to USD 76.1 billion during This was largely on the back of revival in exports during the year. Exports, which account for almost 67.3%, grew at 18.7%, aggregating to approximately USD 59.5 billion in IT services contributed more than half of export revenue (56.4%) whereas ITeS -BPO services were the second largest contributor (23.8%) to export revenue during the year. The domestic market continued with its growth momentum, recording 21% rise to reach at USD 28.8 billion during the year. The growth Indian ITES market has shown that it has immense potential for sustained employment generation. The ITES segment, which employed about 40,000 people in late 1990s, presently employs more than 25,00,000 people. Job creation in the ITES sector has a multiplier effect on employment generation in the economy. Since a single job created directly in ITES segment results in additional three jobs indirectly in the related services such as security, transport and catering etc, the ITES segment has the potential to create at least 3.1 million jobs by Many big IT-BPO companies in India are getting attracted towards hinterlands due to availability of immense untapped talent and lower costs. Attrition rates in rural areas are just about 3-5 per cent as against a high of 50 per cent in urban BPOs. Employee costs in rural BPOs is almost half as against that of urban BPOs which bring overall operational costs down by almost per cent for IT companies. Also, the employee base in these areas would expand by over 10 times by from 5000 in Wipro BPO, the BPO arm of Wipro Technologies had launched its first rural BPO centre at Manjakkudi Village in Tamil Nadu in August In October 2011, Infosys BPO had inked an agreement with the Government of Andhra Pradesh to open rural BPO centers in 22 districts. Rural Shores is another firm that had opened a BPO centre in Bagepalli district of Karnataka and serves over 20 clients including HDFC, Infosys, Wipro Technologies, and Genpact. It aims to recruit more than 10, 000 youth by MARKET PLAYERS Presence of Global IT/ ITES Players in India There are a large number of multi-national IT enterprises operating in India in sectors such as: Integrated Chip Design, System software, communication software, R&D Centers, Technology Support sector, captive support sector, BPO Sector etc reaping the cost and quality advantages. 1. HCL Technologies HCL Technologies is one of those seven companies. Of more than 3,000 technology companies in the Bloomberg database, there are only seven with revenue of more than $2.5 billion, a market capitalization of more than $5 billion, and a compounded annual growth rate greater than 25 percent during the past five years. As a $4 billion global company, HCL Technologies brings IT and engineering services expertise under one roof to solve complex business problems for its clients. HCL Technologies roots in India go back to the year 1993 when its wholly owned subsidiary HCL Comnet (The Infrastructure Services Division of HCL Technologies) was instituted to focus on the domestic communication and connectivity services market. One of the early entrants in India market its first assignment was to partner with a leading Financial Institution to establish the world s first floorless stock exchange. Over the years, HCL diversified its portfolio to provide end-to-end enterprise IT infrastructure solutions and went on to pioneer the Offshore Remote Infrastructure Management Industry in In year 2007, the company took over a larger role within the HCL Technologies group to 218 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

220 front-end HCL Technologies complete portfolio in the India market. Today this team, known as HCL Technologies India, is delivering end to end IT solutions across Service Line Business Services Custom Application Services Engineering and R&D Services Enterprise Application Services Enterprise Transformation Services IT Infrastructure Management 2. Wipro Technologies In the year of 1945, in pre independent India, a vision was born, which would eventually stand out as a brand name synonymous with innovation and integrity. Starting off with consumer products business, Wipro then diversified into newer areas including IT hardware and IT services. Such has been the dynamic power of the organization that over the past 50 years, Wipro has evolved into a leading global IT company, a company which has pioneered many an innovation in the IT services, BPO and R&D services space. Services Analytics & Information Management Business Process Outsourcing Consulting Services Product Engineering Services Mobility Business Application Services Cloud Services Eco Energy Infrastructure Management Services 3. Tata Consultancy Services Tata Consultancy Services (TCS) provides information technology and management consulting services to organizations in more than 53 countries. The company offers e-business, application development and maintenance, architecture and technology consulting, engineering, security, infrastructure development and management, and quality consulting services. In addition, TCS offers software packages for business functions such as applications for electronic banking, insurance billing, customer relationship management, and hospital management. It caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, and utility industries. The company was founded in 1968 and is based in Mumbai, India. It has more than 150 offices worldwide. TCS operates as a subsidiary of Tata Sons Ltd. Services Assurance Services BI & Performance Management Business Process Outsourcing Cloud Services Connected Marketing Solutions Consulting Engineering & Industrial Services Enterprise Solutions ion Small and Medium Business IT Infrastructure Services 219 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

221 IT Services Mobility Solutions and Services Platform BPO Solutions 4. Infosys Technologies Infosys Limited was started in 1981 by seven people with US$ 250. Today, we are a global leader in consulting, technology and outsourcing with revenues of US$ billion (2012). Many of the world s most successful organizations rely on Infosys to deliver measurable business value. Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries build tomorrow s enterprise. Services Management Consulting Services BPO Services Business Application Services Business IT Services Engineering Services Cloud Mobility Sustainability GOVERNMENT INITIATIVES An increase in Government spends over e-governance projects would be a major driver of growth for Indian IT/ITeS space. Nasscom has stated that infrastructure for spends is ready and now is time when National e- Governance Plan (NeGP) should be executed in full force. NeGP aims to create the right governance and institutional mechanisms, set up the core infrastructure and policies and implement various Mission Mode Projects across the Centre, state and integrated service levels to create a citizen-oriented and business-centric environment for governance. Meanwhile, the Government has recently announced that it would buy some 100,000 low-cost Aakash tablets from Datawind (the Canadian company that has developed this device) and would distribute them to students in schools and colleges for free. The move comes as an effort to facilitate e-learning. In another similar effort, IT major Intel India had joined hands with the Karnataka Government's Sarva Shiksha Abhiyan in 2011 and had launched Computers on Wheels'. It was a pilot e-learning program that entailed digital instruction materials from reputed education solutions provider 'Educomp'. The program focused to equip teachers with learning techniques and tools and deliver diverse learning styles and abilities to students, making education more participative rather than passive. The Government of India has also undertaken a project that aims to provide high quality broadband access to village Panchayats through National Optical fibre network by The process is in progress and is projected to be very beneficial, especially for the SMEs. Software giant Infosys is planning to expand its footprint in India with focus on Tier-II cities. The company has recently inked an agreement with Government of Madhya Pradesh for setting up a development centre in Indore and is awaiting response from Government of West Bengal for setting up a centre in Kolkata as well. All such developments and initiatives on part of the Government of India reflect the fact that the supreme administration is making all the possible efforts to boost the country's IT and ITeS industries. FUTURE PROSPECT IT & ITeS in India Road Ahead There are many predictions and forecasts pertaining to IT & ITeS in India across various segments. IT adoption in Indian SME segment is growing at a rate of 15 per cent and would touch US$ 15 billion by The study 220 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

222 noted that as of now, only 20 per cent of the total 50 million SMEs in India are technology-ready today which poses an immense scope for further growth. Also, the PC market in India would have witnessed sales of million units in the 2011 calendar year which would further accelerate by 14 per cent to million units in Internet retailing is also emerging as an entirely new avenue to be explored. It has also been estimated that the India's online retail industry is anticipated to surge to Rs 70 billion (US$ 1.43 billion) by 2015 from Rs 20 billion (US$ million) as broadband is becoming increasingly accessible and internet penetration is increasing. Another report by Avendus Capital Pvt. Ltd states that etailing would become a Rs 53,000 crore (US$ billion) market by 2015 from the current Rs 3,600 crore (US$ 731 million). Market Size As per NASSCOM estimates, IT and ITeS sector (excluding hardware) revenues are estimated at US$ 87.6 billion in FY The industry is expected to grow by 19 per cent during FY Additionally, the market size of the industry is expected to rise to US$ 225 billion by 2020 considering India's competitive position, growing demand for exports, Government policy support, and increasing global footprint. According to a study by management advisory firm Zinnov, adoption of IT services in the Indian SME segment is growing at 15 per cent and is expected to reach US$ 15 billion by The public cloud services market in India is projected to grow to US$ million, registering 32.4 per cent growth in 2012, according to a report by Gartner. The Indian software and services exports including BPO exports is estimated at US$ 68.7 billion in , as compared to US$ 59 billion in , an increase of 16.4 per cent. The IT services exports is estimated to be US$ 39.8 billion in as compared to US$ 33.5 billion in , showing a growth of 18.8 per cent. BPO exports is estimated to grow from US $ 14.2 billion in to US$ 15.9 billion in , a year-onyear (Y-o-Y) growth of about 12 per cent. IT services contributed 58 per cent of total IT-BPO exports in , followed by BPO at 23 per cent and software products / engineering at 19 per cent. Indian Perspective (as on November, 2012) Investment Indian IT's core competencies and strengths have placed it on the international canvas, attracting investments from major countries. Between April 2000 and May 2012, the computer software and hardware sector attracted cumulative foreign direct investment (FDI) of US$ 11,262 million, according to the Department of Industrial Policy and Promotion (DIPP). More recently, online retailing, cloud computing and e-commerce are the major driving forces behind the rapidly increasing growth in the IT industry. Online shopping has increased with the emergence of internet retailing and e-commerce. India's IT-BPO revenues are also driven by a rapid increase in rural BPO units, which accounted for more than US$ 10 million in the total sector revenues. Some of the major initiatives in Indian IT and ITeS sector are: Intel Capital, Intel Corporation's global investment and M&A organisation, plans to invest up to US$ 40 million in ten innovative Indian technology companies 221 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

223 Kakinada Special Economic Zone (SEZ), being developed by GMR Group, has entered into a partnership agreement with Bengaluru-based RuralShores Business Services Pvt Ltd for setting up a BPO centre Tata Consultancy Services (TCS) plans to set up operations in Madhya Pradesh (MP) by building a new integrated campus in Indore, with an initial investment of Rs 550 crore (US$ million) in the first phase MindTree Ltd has opened its first delivery centre outside India in Gainesville, Florida. The company plans to invest US$ 2.93 million and create 400 new jobs over the next five years BPO firm ExlService Holdings has announced the acquisition of US-based Landacorp Inc. The acquisition will provide Exl with an end-to-end solution for the healthcare industry Government Initiatives The 51 software technology parks of India (STPI) centres that have been set up since inception of the programme have given a major boost to IT and ITeS exports. Apart from exemption from customs duty available for capital goods there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. FDI upto 100 per cent under the automatic route is allowed in Data processing, software development and computer consultancy services; Software supply services; Business and management consultancy services, Market Research Services, Technical testing & Analysis services. Some of the major initiatives taken by Government of India to promote IT and ITeS sector in India are: The Cabinet has recently approved the National Policy on Information Technology The policy aims to increase revenues of IT and ITeS industry from US$ 100 billion to US$ 300 billion by 2020 and expand exports from US$ 69 billion to US$ 200 billion by 2020 The Government of India plans to set up 15 new laboratories for testing hardware and software products under public-private partnership (PPP) model The Ministry of Finance has issued a circular to chairmen of public sector banks and regional rural banks, that all payments to customers, staff, vendors and suppliers as well as disbursement of loans and payments towards investments should be made only through the electronic mode The Government of India plans to announce incentives to promote IT related export hubs in small towns to attract investors towards SEZs. The Government may also allow broad banding of sectors, which will allow ancillary units to come up in sector-specific SEZs Road Ahead According to 'India Information Technology Report Q1 2011', released by Research and Markets, Indian market for IT services and products is expected to grow from US$ 18.6 billion in 2011 to US$ 40.5 billion in During the year 2011, government procurement is expected to grow substantially while opportunities in healthcare, education, telecom and financial services would broaden further. Further, NASSCOM expects software and services exports growth at per cent, clocking US$ billion of revenues in FY2012 whereas, domestic market is expected to grow by per cent with revenues of US$ billion. Newer phenomenon like cloud, analytical services, advanced mobile applications, healthy environment for start-ups and SaaS will drive the industry growth. According to latest projections released by Cyber media Research, the aggregate market size of domestic IT products and ITeS would reach US$ 52.3 billion crore by 2014, growing 17.3 per cent between 2010 and Exchange Rate Used: INR 1 = US$ as on November 28, 2012 References: Media Reports, Press Releases, Department of Industrial Policy and Promotion (DIPP) statistics, Department of Information and Technology 222 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

224 References Telecom Industry Telecommunication is the transmission of messages over significant distances for the purpose of communication. In the modern age of electricity, telecommunications has involved the use of electric means such as the telegraph and telephone, the use of microwave communications and the use of fiber optics. The telecom industry plays an important role in the world economy and global revenues in 2008 were ~USD 4 trillion, expected to grow at a steep 11% p.a. CAGR over the next 2 years. Almost half (~USD 1.7 trillion) of telecom revenues accrue from service revenue, and analysts believe this is expected to grow significantly to ~USD 2.7 trillion by Approximately 20% of the world population has access to the Internet. The telecom industry is vast and offers a wide range of career opportunities on both the hardware and software fronts. These prospects include functional jobs in mobile telephony, internet protocol media systems, wireless communications, GSM, GPRS and CDMA technology, VoIP, data networks and optical networks amongst others. The global leaders in the field are companies like AT&T, Vodafone, Verizon, SBC Communications and Qwest Communications, who are all trying to take the advantage of the industry s spiraling growth. The focus of telecom companies going forward is likely to be on leveraging more sophisticated telecommunication platforms like broadband technologies, LAN-WAN inter networking, optical networking, voice over Internet protocol and wireless data service etc. India's telecommunication network is the second largest in the world based on the total number of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world enabled by the mega telephone networks and hyper-competition among them. It has the world's third-largest Internet user-base with over 137 million as of June Major sectors of the Indian telecommunication industry are telephony, internet and television broadcasting. Telephone Industry in the country which is in an ongoing process of transforming into next generation network, employs an extensive system of modern network elements such as digital telephone exchanges, mobile switching centers, media gateways and signaling gateways at the core, interconnected by a wide variety of transmission systems using optical fiber or Microwave radio relay networks. The access network, which connects the subscriber to the core, is highly diversified with different copper-pair, optic-fiber and wireless technologies. DTH, a relatively new broadcasting technology has attained significant popularity in the Television segment. The introduction of private FM has given a fillip to the radio broadcasting in India. Telecommunication in India has greatly been supported by the INSAT system of the country, one of the largest domestic satellite systems in the world. India possesses a diversified communications system, which links all parts of the country by telephone, Internet, radio, television and satellite. Indian telecom industry underwent a high pace of market liberalization and growth since 1990s and now has become the world's most competitive and one of the fastest growing telecom markets. The Industry has grown over twenty times in just ten years, from under 37 million subscribers in the year 2001 to over 846 million subscribers in the year India has the world's second-largest mobile phone user base with over million users as of May It has the world's third-largest Internet user-base with over 137 million as of June The total revenue of the Indian telecom sector grew by 7% to 283,207 crore (US$51.54 billion) for financial year, while revenues from telecom equipment segment stood at 117,039 crore (US$21.3 billion). 223 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

225 Telecommunication has supported the socioeconomic development of India and has played a significant role to narrow down the rural-urban digital divide to some extent. It also has helped to increase the transparency of governance with the introduction of e-governance in India. The government has pragmatically used modern telecommunication facilities to deliver mass education programmes for the rural folk of India. The progress and the changes in telecom have been astronomical, with new and cheaper technologies taking birth almost each year. With an addition of 18 million subscribers every month and contributing to nearly 2% of the Indian GDP, Indian telecom industry is considered to be the largest telecom markets of the world. Driven by wireless communication, the telecommunications industry is recognized as a key to the rapid growth and modernization of the economy and an important tool for socio-economic development for a nation Most of the telecommunications forms in India are as prevalent or as advanced as those in modern Western countries, and the system includes some of the most sophisticated technology in the world and constitutes a foundation for further development of a modern network. Telecom Regularity Authority of India (TRAI) is the sole authority empowered to take binding decisions on fixation of tariffs for provision of telecommunication services. India has the world's second largest mobile phone users with over 903 million as of January It has the world's third largest Internet users with over 121 million as of December India has become the world's most competitive and one of the fastest growing telecom markets. Key developments Telecom Regulatory Authority of India (TRAI) has revealed that the country's mobile subscriber base has increased from million in December 2011 to million in January Telecom operators added 9.88 million mobile subscribers in January The overall tele-density reached per cent. Broadband subscriber base increased from million at the end of December 2011 to million at the end of January Telecom users in rural areas have grown at a faster pace compared to their urban counterparts in the last five years, a CAG report said. India added around 20 million subscriptions of the estimated 140 million net additions in mobile subscriptions across the world during the April-June quarter in 2012, said a report by Ericsson. The telecom sector is a very capital intensive sector and involves high value investments. Correspondingly, the mobile phone industry is also experiencing a parallel upward surge, and a parallel enhancement in technologies used. With the liberalization of the Indian economy, the telecom sector has become very attractive for mergers and acquisitions latest being SingTel increasing its stake in Bharti telecom. Value addition by VAS Some of the recent developments in this area are M-Commerce, focus on localization, availability of content in vernacular languages and availability of mobile TV. The expected revenue from VAS will be around US$ 4.0 billion by With over 900 million wireless subscribers, India is one of the biggest markets in the telecom industry globally. From GSM, CDMA and even broadband subscribers, the overall penetration in India is nearly 75 percent. Here is a list of the top 10 Indian telecom companies based on their market share. 224 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

226 TOP TELECOM COMPANIES IN INDIA MTNL 2. Videocon 3. Uninor 4. Aircel 5. TATA Teleservices 6. BSNL 7. Idea Cellular 8. Vodafone 9. Reliance Communications 10. Bharti Airtel Global Scenario of Telecom Industry Telecommunication in the modern era is the science and practice of transmitting information by electromagnetic means. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages such as coded drumbeats, lung-blown horns, and loud whistles. In modern times, telecommunications involves the use of electrical devices such as the telegraph, telephone, and tele printer, as well as the use of radio, microwave transmission towers, fiber optics, orbiting satellites and the Internet, which is a vast world-wide computer network. A revolution in wireless telecommunications began in the first decade of the 1900s with pioneering developments in radio communications by Nikola Tesla and Guglielmo Marconi. Marconi won the Nobel Prize in Physics in 1909 for his efforts. Other highly notable pioneering inventors and developers in the field of electrical and electronic telecommunications include Charles Wheatstone and Samuel Morse (telegraph), Alexander Graham Bell (telephone), Edwin Armstrong, and Lee de Forest (radio), as well as John Logie Baird and Philo Farnsworth (television). The world's effective capacity to exchange information through two-way telecommunication networks grew from 281 petabytes of (optimally compressed) information in 1986, to 471 petabytes in 1993, to 2.2 (optimally compressed) exabytes in 2000, and to 65 (optimally compressed) exabytes in This is the informational equivalent of 2 newspaper pages per person per day in 1986, and 6 entire newspapers per person per day by Given this growth, telecommunications play an increasingly important role in the world economy and the global telecommunications industry was about a $4.7 trillion sector in The service revenue of the global telecommunications industry was estimated to be $1.5 trillion in 2010, corresponding to 2.4% of the world s gross domestic product (GDP). Mobile VAS in India to cross $6B by 2013 Management consulting firm, Zinnov, released a study on Tuesday that evaluates the Indian telecom market for Titled "Indian Telecom Market Overview 2012", the study covers the overall industry growth, key technology trends, and government regulations that have shaped the growth of the Indian telecom sector. According to the study, the Indian mobile value-added services (MVAS) market is expected to move from the traditional SMS-based services to Internet-based and application-based services. Currently valued at over US$5 billion, Indian MVAS industry is expected to reach well over US$6 billion by The Indian telecom industry has witnessed a three-fold increase in subscribers since The wireless subscriber market stands at million subscribers, with Bharti Airtel as the market leader, while the wireline segment stands at 31.4 million connections, with state-run BSNL dominating the market. Although the Indian market is characterized by a large subscriber base and substantial tele-density, the average revenue per user (ARPU) is quite low. The report then goes on to highlight new avenues for revenue generation for the telecom companies, like mobile VAS (MVAS), cloud and datacenter services, which in turn are providing ample opportunities to IT companies. 225 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

227 At present, the data center market and capacity in India is valued at over US$4 billion and is expected to reach around US$6 billion by Nearly a fifth of this segment is governed by third-party service providers while the rest is captive. Captive data centers in India face challenges like a lack of in-house skills, high investments, and long gestation periods. The declining share of voice in ARPUs has necessitated a focus on MVAS opportunities. The report highlights the following MVAS categories: M- health: Leading telecoms such as Vodafone, Airtel and Aircel are partnering healthcare companies to deliver m-health services. Typical m-health services include provision of locating hospitals, fixing appointments, registration of patients, getting medical advice, facilitating treatment, and seeking blood donation. M- governance: Many Indian states such as Kerala, Gujarat, Bihar, Goa and Andhra Pradesh have initiated m- governance practices primarily through SMS-based platform. M-education: Major telecom players are enabling mobile as a platform for imparting education. For instance, Aircel and MTS are partnering NGOs for educational initiatives aimed at underprivileged children. Reliance Communications is delivering interactive, real-time courses across 105 cities. Airtel is imparting education through IVR (interactive voice responde) which includes English-speaking courses at basic level. M-commerce: Telecom carriers are increasingly taking interest in m-commerce services. Reforms are encouraging telcos to offer services such as m-microfinance, m-retailing, and mobile-wallet services. Some of the recent government initiatives include increasing mobile payment limit to INR 50,000 (US$901.8) by RBI, and the creation of Interbank Mobile Payment Service (IMPS). M- agriculture: These services bridge the information gap between farmers and market conditions. Key services include commodity prices, local info, weather updates, multiple language support, and so on. Reliance communication provides its service, called Grameen VAS, while Airtel has a service it named, Bahtar Zindagi, for the rural farmer. M-infotainment: Almost all leading telecom companies provide information and entertainment-related services. Infotainment is the largest contributor to overall MVAS revenue. This segment covers categories such as sports, travel, news, ringtones, music, and videos. Vodafone Group Public Limited Company Published on 19 th Mar 2012 Vodafone Group (Vodafone or "the group") is one of the world's leading providers of mobile telecom services. The group provides mobile voice and data communication services to consumers and enterprise customers. The group has global operations spanning Europe, the Middle East, Africa, Asia Pacific, and the US. It is headquartered in Berkshire, the UK and employs 83,862 people. The group recorded revenues of 45,884 million (approximately $71,372.6 million) during the fiscal year ended March 2011 (FY2011), an increase of 3.2% over FY2010. The revenues increased due to strong result from emerging markets and renewed growth in some parts of Europe. The operating profit of the group was 5,596 million (approximately $8,704.6 million) during FY2011, a decrease of 41% compared to FY2010. The net profit was 7,968 million (approximately $12,394.2 million) in fiscal year FY2011, a decrease of 7.8% compared to FY2010 Ecuador - Telecoms, Mobile, Broadband and Forecasts Strong expansion expected in Ecuador s mobile and fixed broadband markets Ecuador has the lowest fixed telephone prices in the region, mainly because tariffs are set by the government. Nonetheless, in line with the global trend, Ecuadorians have been turning to mobile handsets in preference to the traditional fixed-line phone. 226 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

228 Ecuador is one of the poorer countries in Latin America, yet its mobile penetration is higher than the regional average. Indeed, the country s telecom market is heavily skewed towards mobility, with seven mobile phones for every fixed line in service. During the second half of 2011 and first months of 2012, the mobile market appeared to stall, as the compulsory registration of SIM cards, which started in July 2011, removed inactive accounts. The slowdown, however, should only be temporary, particularly in the case of mobile broadband, which operators have been promoting as an alternative to fixed broadband. Considering the country s low teledensity and fixed broadband penetration, the mobile broadband market is expected to grow strongly in the coming years. Fixed broadband, however, is also growing strongly, with state-owned CNT capitalising on its relatively new ADSL service. The government is keen to advance universalisation and improve teledensity, and we can expect CNT to continue its efforts to expand the country s infrastructure. Besides CNT, there are another eight fixed-line companies and a large number of broadband providers. In the mobile market, Ecuador has three operators: Claro the market leader, controlled by América Móvil; Movistar controlled by Telefónica; CNT the smallest operator, with only 2% of the market. Market highlights: Ecuador has adopted anti-trust regulations for the first time, including a controversial article that limits private ownership in the broadcasting market. A new telecom bill has been in the pipeline since 2009, but parliamentary approval has been repeatedly postponed. Claro, Ecuador s leading mobile operator, gains from mobile portability. The pay TV market receives a boost from CNT s launch of satellite TV services. The government s National Broadband Plan aims to triple broadband connections by As a measure to reduce the theft of mobile devices, SIM card owners are required to register their details or be disconnected. Companies covered in this report: Fixed line operators include CNT, Etapa, TVCable (Suratel), Claro (Ecuadortelecom/Telmex), Linkotel, Etapatelecom, Global Crossing, Grupo Coripar, and Starsat. Mobile operators include Claro, Movistar, and CNT. Fixed broadband providers include CNT, TVCable, Claro, PuntoNet, Ecuanet/Megadatos. Easynet, Transtelco, Empresa Eléctrica Azogues, Empresa Eléctrica Regional Centrosur, Transelectric, and Telconet. Pay TV providers include TVCable, DirecTV, Univisa, Claro, and CNT TV. 227 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

229 Ecuador s fixed-line, broadband, and mobile statistics Sector (e) Fixed-lines in service Total subscribers (million) Broadband Total subscribers 458, , ,000 Mobile telephony subscribers Total subscribers (million) Event management Industry Overview Event management is a type of project management that involves the creation, development, and execution of processes for the promotion of different types of events. It helps create and develop events such as fairs, conferences, festivals, seminars, trade exhibitions, business meetings, and conventions events. The Event Management industry covers a wide range of occasions various ceremonies, conferences, events, trade shows, sporting events, etc. Events are usually categorized into several groups based on their objectives and goals. Some of these categories are briefly discussed below: Award functions films, music, art, science, etc. Leisure events leisure sport, music, fine art, beauty pageants, fashion shows Cultural events ceremonial and religious festivals, heritage, and folklore-related events Organizational events trade exhibitions, business meetings, seminars, conferences, product launches, expos, etc. Trends One of the major trends witnessed in the Event Management industry is the advertisement of events on the internet. Businesses and event managers are using internet for event announcement to attract large audiences. The use of social media for marketing and advertising is another popular trend among event planners. The steadily growing popularity of Tweet discussion boards offering live updates of events is an example of the widespread adoption of social networking. Currently, many planners use social media to offer immediate, "face to face" customer support, thus increasing customer satisfaction. Technical developments are another trend noticed in the Event Management industry. The use of advanced equipment has taken event management several steps further, resulting in greater interaction within the events. The role of technology in event management is increasing at a rapid pace, boosting the growth of the industry in all its segments. Moreover, mobile applications are being increasingly used for the marketing and promotion of events. Smartphones, with their advanced inbuilt features and applications, help promote target audience engagement, interaction, and networking. They also help planners communicate quickly with their guests and provide them with live updates of the events. 228 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

230 The green concept is another popular trend in the Event Management industry. Event planners are nowadays including environment-friendly components in the course of their work. These include biodegradable components, regionally found food items, and reusable plants and flowers. Several event planners are also working with recyclable label badges to decrease onsite wastage. Re-fillable drinking water channels are also being introduced in an effort to substitute bottled water. Event Management Process Each player in the Event Management industry follows a typical process to assure consistent performance and success. The first step of the event management process is research, which is fundamentally the process of collecting information. Research is among the most vital steps of managing an event as a thorough research carried out before the event lowers several risks, allowing planners to achieve results that are as close to the planned results as possible. Research allows planners to concentrate on fulfilling and meeting the demands, preferences, needs, and goals of potential customers. As soon as the research stage is over, the event manager gains a complete understanding about the event to be planned. This helps the event manager design the event, which constitutes the next step of the event management process. This is another significant step in the process as it is during this phase that event organizers have to contemplate and plan out every minute detail of the event, thus laying out the blueprint for the final event. The tradition/culture of any business plays an important part in designing of event. Once the designing is over, the planning and preparation for the event begins. This is among the lengthiest stages of the event management process. The next step is event coordination, which is the execution phase of the event management process. It is during this stage that the actual event takes place. The final step in the process is evaluation. An event can be analyzed in different ways, such as through written surveys, phone or e- mail-based surveys, etc. Evaluation can be carried out before as well as after an event. These evaluations help event managers understand participants opinions as well as collect other information and facts that can be used to analyze the success/ failure of events. Top Exhibition Markets & Industry Some of the top exhibition markets in world are Top Exhibition Markets the US, Germany, France, the UK, China, Italy, and Russia. Business Services, Industrial Services, Automotive, Food & Beverage, Medical & Pharmaceutical, Building Construction, Agriculture & Forestry, and Electronics and Electrical goods are some of the top industry events happening across the globe. 229 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

231 Indian Scenario: Market overview India being a country rich in heritage and culture holds numerous events throughout the year due to this factor there are huge opportunities for growth in this sector. Event management industry in India is approximately 15 to 20 years old and is gaining momentum. During the early part of the 1990 s the industry had spend upto 20 crore per annum on events. Year over 1000 events were managed out of which 20 were large scale international quality events. Indian event management industry is poised to clock a 25 % growth rate, the market is increasing from INR 15 billion in 2010 to 24 billion in It was primarily an unorganized market which is slowly transitioning into an organized sector. Increase in corporate and personal occasions needing professionals to manage them has led to a major demand for event organizers. The organised events industry where we are and where we will be (in Rs. Crore) 4,375 3,500 1,850 1, ,267 1,570 1,050 2,800 1,840 1,240 2,061 1,500 2,308 1, Organized Events (E) OOH (E) Radio (E) CASE STUDY Event Marketing: Stunt combined with social media draws 2,500 to Dreamforce booth SUMMARY: When marketing at large conferences, it can be a challenge to stand out from the crowd. Buying a booth at a major event can be an effective means for lead generation, but the entire effort requires a substantial budget. SiSense, a business intelligence software company, decided to purchase a booth at the highly attended Dreamforce This case study looks at the marketing decisions and steps the SiSense team took to grab the attention of 90,000 attendees, and drive 2,500 visits to its booth. by David Kirkpatrick, Senior Reporter CHALLENGE A major challenge with in-event marketing is creating visibility for your event presence, particularly for the larger shows. SiSense, a business intelligence analytics company, faced that issue at this year s Dreamforce, with its more than 90,000 attendees. 230 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

232 Bruno Aziza, VP of Marketing, SiSense, said Dreamforce provided two problems to overcome -- first was the sheer size of the event, and second was that the theme of the show is so wide that it s not easy to get noticed for a particular business area, such as business intelligence in SiSense s case. On top of those two issues, as a startup company, Dreamforce was SiSense s first stab at event marketing. Aziza said, "When you think about these three things, how do you get out above the noise?" This case study will cover SiSense s event marketing strategy, such as booth placement, where it spent budget dollars, and the rationale for what might be considered a fairly outrageous stunt to gain attention at a very large conference that drew more than 2,500 visitors to the booth over three days. CAMPAIGN Aziza summed up the challenge of marketing at a large event, "How do you make it clear what your message is about, and how are you able to make the message in a way that is impactful? If the message is unheard, there is no point." Step #1. Choose the event for the marketing effort Aziza stated one thing SiSense understood about its target audience was many businesses did not understand the basic concept behind its software offering. "People don t know what business analytics, or BI (business intelligence), is, so we really want to be strong in selling into that audience," he said. Taking that into account, when choosing a conference to launch its event marketing, the SiSense team considered business intelligence and business analytics shows, but chose Dreamforce for a reason. Aziza explained, "We chose, on purpose, to go after the one (conference) that is not a BI conference because the BI expert is not who we were selling to." Step #2. Plan the initial event marketing strategy The pre-event strategy planning covered two main areas: the theme of the marketing effort, and how to best invest the budget spend. The spend was broken down into two options: invest in a large booth, and invest in a big presence in ways beyond expo floor real estate. The decision was made to buy what Aziza described as a "reasonable-sized booth" and really put an emphasis on creating visibility for SiSense through a big "presence" at the show. The team accomplished this through gadget giveaways, such as iphone 5s, and special guests to draw attention to SiSense s booth. The second stage of pre-event planning involved understanding the overall feel of the show. In the case of Dreamforce, Aziza said celebrity was a major hallmark of the conference. "It was very clear that Marc Benioff, the CEO of the company (Salesforce.com), loves celebrity. He had General (Colin) Powell. He had Richard Branson (CEO of Virgin). He had all these celebrities on stage," said Aziza. Understanding the emphasis on celebrity at Dreamforce influenced Aziza s selection of the booth guest in SiSense s marketing effort. 231 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

233 Booth placement The placement of SiSense s booth also became part of the pre-event strategy. Before the conference, Aziza consulted an expo floor map, and deliberately chose a booth directly across the aisle from a more established competitor. The idea was the competitor would draw in people interested in the business intelligence area who might not have heard of the startup, SiSense. Step #3. Determine promotion to maximize event visibility To take advantage of the celebrity culture at Dreamforce, Aziza decided to have a celebrity look-alike in the SiSense booth. He said he interviewed Ray Charles, Marilyn Monroe and Mitt Romney look-alikes. But, he ended up choosing a look-alike for President Obama. Aziza added, "I didn t want to make a political statement. I am a vendor. I have nothing to do with politics." The idea of choosing an Obama look-alike was the fact having the "president" in the booth would create buzz and visibility for SiSense. The event ran Tuesday through Thursday, and the Obama look-alike was scheduled to appear in the booth on Wednesday. Aziza used Tuesday to promote the visit with an air of mystery, coupled with some hints. He told booth visitors they could return the next day to have their picture taken with the celebrity guest. He also engaged in updating social media channels to promote the celebrity visit to take advantage of the high social media interaction nature of the Dreamforce event. Tweets included hints, such as, "Every vote for SiSense is a vote for America." One in-booth promotion designed to hint at the profile of the celebrity guest was a toy helicopter giveaway. An important aspect of having an Obama look-alike as the in-booth "celebrity" was a connection with SiSense s overarching marketing message. Aziza explained, "The tie is not a political statement, but rather is a statement in favor of 'data democracy.' Today, most of the big data talk is about big data for the biggest companies. Our vision is 'big data for all.'" Step #4. Execute the high visibility stage of the event strategy When the day and time for the Obama look-alike arrived, Aziza met him at the entrance of the building where the vendor booths were located with a large American flag and made a production of walking the look-alike through the crowd to the SiSense booth. Aziza said event attendees were taking photographs of the procession, and some even joined the line to reach the booth. Aziza said the "stunt" was surprisingly successful in grabbing the attention of event attendees and driving additional traffic to the SiSense booth. Once in the booth, the Obama look-alike greeted and took photos with booth visitors. More than 1,000 attendees waited in line for a picture with the look-alike. Aziza said the in-booth appearance was so successful, the Obama look-alike stayed longer than his contracted time because he was promoting his own business and passing out business cards. 232 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

234 Step #5. Leverage the high visibility promotion after the event "There is no reason this needs to stay locked at the event," said Aziza. To take advantage of the successful event strategy, and the popularity of having an Obama look-alike in the booth, the team videoed Aziza interviewing the look-alike on his thoughts about business analytics. SiSense published the video after the event and let it run until November, gaining the benefit of interest in the actual Obama with election-year media coverage. "(People) are going to be searching on YouTube for Obama, and there will be our video," Aziza stated. RESULTS About making the event marketing successful, Aziza said, "First, you have to know yourself. Secondly, it s about timing -- where are you going to be? And, you lose sight of the top message. Your top message has to work with the stunt; otherwise, it s a memorable thing, but it goes nowhere." For SiSense, the top message was "big data for all," and not just for large companies. He said the main key performance indicators for the campaign were recognition at the event, and lead generation: On recognition -- beyond the Obama look-alike strategy, one magazine named SiSense as the number one analytics product at Dreamforce The overall event marketing strategy brought more than 2,500 people to the SiSense booth over the three days Aziza stated that the key to a creative event, such as this campaign, is making sure the idea ends up creating business for the company. "Think about the impact to revenue, and think about the long term, because the risk with a stunt like this is that it might be forgotten a week from now," explained Aziza. He continued, "You want something that is going to keep on giving. That is why we did (the look-alike) at the event. That is why I did the video." COUCH & ASSOCIATES Chamberlain College of Nursing: A CASE STUDY Chamberlain College of Nursing Streamlines Event Management & Automates Prospect Follow Up Via Program Overhaul SUMMARY Chamberlain College of Nursing Chamberlain College of Nursing offers bachelor s and master s degree programs in nursing. Chamberlain is currently located in Phoenix, Arizona; Jacksonville and Miramar, Florida; Atlanta, Georgia; Addison and Chicago, Illinois; Indianapolis, Indiana; St. Louis, Missouri; Columbus, Ohio; Houston, Texas; and Arlington, Virginia. ABOUT COUCH & ASSOCIATES Couch & Associates Inc. is a professional services marketing organization that specializes in adding value to marketing processes through automation, effectiveness and sales enablement. Couch & Associates consultancy consists of lead consultants, account & project managers that drive initiatives to their 200+ clients ranging from SMB to Fortune 500. The Couch & Associates design and technical teams add value through their knowledge of best practices and experience with marketing technologies and surrounding infrastructures. The team is certified with a variety of software platforms including Eloqua, Salesforce, Netsuite, SLX and Microsoft Dynamics. 233 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

235 CUSTOMER OVERVIEW Chamberlain College of Nursing Chamberlain College of Nursing, LLC is a part of DeVry Inc., a global provider of educational services. For more than 120 years, Chamberlain has been at the forefront of quality nursing education. Chamberlain is increasing access to nursing education nationwide with campuses offering the three-year Bachelor of Science in Nursing (BSN) degree program and flexible online degree programs like the RN to BSN option and the Master of Science in Nursing degree program. Chamberlain is advancing healthcare by preparing nurses, nurse leaders and nurse educators of tomorrow. BUSINESS CHALLENGE Chamberlain College of Nursing is focused on providing superior customer service and targeted, relevant content to their prospective students. Chamberlain did not have a standardized process for promoting open house events on campus. With more than 100 open house events in a year, Chamberlain needed to streamline the event management process. Some key areas were identified for optimization including automating the messages that were sent manually, developing new confirmation and reminder s, bringing the paper based event sign-in form online, and the need to segment the contacts that had RSVP d or attended an event from those that had not. The goal was to integrate the invitation and RSVP process with the event registration and sign-in process to create a single automated, unified process. Chamberlain needed a more efficient way to develop processes and practices for long-term success, as well as a solution that would enable the company to: More efficiently manage the RSVP and attendee list; Effectively integrate the event management process; Develop targeted messaging to reflect the individual interest level of prospects; Eliminate redundant messages for those who have already attended an event; Speed up the check-in process at the event; and Implement formal processes for reporting, tracking and follow up. BUSINESS CHALLENGE Already an Eloqua marketing automation customer, Chamberlain selected Couch & Associates in A customer audit by Couch & Associates identified the most effective methods for automating and systematizing its processes. Chamberlain was manually sending a high volume of open house s. It was difficult to track RSVPs, report on attendance and respond appropriately. Zach Monroe, Marketing Specialist, Chamberlain College of Nursing SOLUTION To create a more efficient management process, Couch & Associates worked with Chamberlain to assemble a program for each campus and segment groups of contacts. The program provides relevant and tailored messaging based on prospective student responsiveness or level of interest. The organization also utilizes the Eloqua system to follow up with individuals that RSVP d. Those segmented responders are sent reminder messages in a more streamlined fashion once weekly for three weeks leading up to the event. This enabled Chamberlain to automate the RSVP process and create a reminder process, and to report on the RSVP data as it is being tracked in the Eloqua system. 234 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

236 SOLUTION Chamberlain also implemented an electronic sign-in method, enabling them to: 1. Capture complete and accurate information 2. Segment attendees from those that did not attend to provide relevant messaging following the event 3. Provide a higher level of customer service for individuals registering for the event by expediting the sign-in process The new sign-in form offered a digital way to sign prospects into the open house. The organization captures addresses first and either validates it against the information already on file, or enters missing information to complete the profile. This information is directly integrated with Eloqua so the organization can send follow up s shortly after the open house has completed. This also allows Chamberlain to pre-populate forms moving forward, without having to collect the information again. The digital check-in process has helped improve our open house events in a number of ways. We ve now streamlined the check-in process to eliminate long lines and provide better customer service. We can also send thank you s to attendees and give them an opportunity to provide feedback on the event, which we use to make our open houses even better. Following the event, automated reports are now generated on open house performance and attendee satisfaction. Zach Monroe, Marketing Specialist, Chamberlain College of Nursing SOLUTION Chamberlain submits the information back into Eloqua s Event and Survey Management Module to develop a list of captured and confirmed attendees. This helped the organization develop a more efficient and effective follow up with appropriate messaging. Those who did not attend received an inviting them to the next open house event. Conversely, those who did attend received a thank you that included a link to a survey about the open house, which provided valuable attendee feedback following an event. As part of the survey, respondents are asked what their next step is after attending the open house. The first option is talk to an advisor. If selected, the system triggers an automated message to the specific admissions advisor that the respondent has been working with, informing the admissions advisor that the respondent has requested to speak with him or her. With the second option, respondents can request more information about Chamberlain, receiving the requested information on the thank you page, as well as in an automated message. The last option, complete an application, redirects individuals to Chamberlain s online application. Integrating our ideas with Couch & Associates recommendations helped create a robust automated process tailored to Chamberlain s needs. Couch & Associates has the ability to simplify a complicated idea and will work step-by-step to implement it successfully. Zach Monroe, Marketing Specialist, Chamberlain College of Nursing RESULTS Empowered with scalable, easy-to-repeat processes for program and follow-up management, Chamberlain is now planning more intensive, targeted programs to kick up its communication initiatives and streamline segmenting.previously, the process to move through sign-in forms at an open house event could take up to 1 to 1.5 hour. Now, the process is streamlined using an online form. During the first campus test, the Chamberlain 235 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

237 team registered 150 people in less than 30 minutes; a process that potentially would have taken twice as long using the paper form. This has helped the organization increase the effectiveness of open house events and provides more efficient service. Working closely with Couch & Associates, Chamberlain easily transitioned its team to the new system and also developed a greater understanding of how to maximize event production and follow up. With enhanced visibility into market opportunities and foundational processes in place for success, Chamberlain more efficiently manages its automation system and optimizes its functionality across the organization. The new and efficient organizational process has been rolled out to every campus and will support nearly 120 events over the course of a year. From a man-power perspective, the organization significantly reduced the amount of hours previously spent creating messaging and segmenting lists and contact groups tasks that are required for up to 11 campuses. The new system has made Chamberlain s open house event processing more streamlined and efficient. Each campus is now able to organize its open house sign-in process. You don t need to have 10 people sitting at a long table signing in all the attendees, trying to get them through a line. You can have two to four- people with a laptop signing in people in a half hour. Now staff can get out from behind the table to engage prospective students and provide better service during the event. Zach Monroe, Marketing Specialist, Chamberlain College of Nursing REFRENCES Krishna, A.G., 1993 Case study on the effects of tourism on culture and the environment: India; Jaisalmer, Khajuraho and Goa Honey, Martha and Gilpin, Raymond, Special Report, 2009, Tourism in the Developing World - Promoting Peace and Reducing Poverty Market Research Division, Ministry of tourism, GOI, 2009 Tourism Statistics I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

238 CHAPTER 8 Rural Services Towards Rural Prosperity The rural market in India, comprising of 854 million people (World Bank, 2010) is the largest prospective market in the world. Rural economy is worth half a trillion and accounts for fifty percent of the total country s income where 55% of India s GDP from manufacturing comes from rural India ( In rural, 2012). Sale of fast moving consumer goods and consumer durables has already found a good place in the rural markets. But, service is the sector which is still in the nascent stage. Insurance sector, education sector, health sector, telecom sector and others are few of the service sectors that have promising perspectives in the rural markets which can be seen from the point of view of developing rural markets as well. Insurance Company s in spite of great prospects in the rural areas do not target them well. Insurance companies consider rural markets as too expensive to do business and are governed by lack of awareness and non willingness among rural people. It results in meeting only regulatory requirements on the part of insurance companies in the rural areas. Insurance companies still considers rural markets as a challenge. Health sector indeed is very important sector especially when rural areas in India are concerned. Inspite of various health facilities provided by government such as sub centers (148124), primary health centers (23887) and community health centers (4809) which has seen a significant rise in last few years), there is still a need on the part of private as well as public companies to serve rural areas that lacks in basic health facilities irrespective of availability of huge potential. Narayana Hrudalaya and Shankara Netralaya are the two of the private initiatives whose initial most objectives is to serve rural people with profitability as secondary motive. Telecom industry has already tasted the fruits of rural markets as 54.3% rural people owns a telephone or a mobile (Census, 2011) but there is lot to be done because changing rural aspirations in consumption patterns and lifestyles opens up tremendous opportunities for rural marketing. But, public administration and political status of our country affects the offering of services in rural areas. To profitably serve the rural markets with the perspective of long term sustenance, market development shall be seen as a prerequisite. To bring out this market development, modification in the value chain activities of the firm is one alternative that if adopted might lead to building the participatory work culture and simultaneously will develop the willingness amongst the marketers to serve these markets. Since time immemorial Indian companies have exemplified the examples of making modifications in the value chain activities and hence developing and enhancing the willingness to serve the rural markets. Presence of LIC, postal services, Narayan Hrudalaya, Shankara Netralaya are few examples that strengthens the public spiritual partnership and motivation and willingness to serve the base of the population and rural markets. Public administration and political status of our country affects the offering of services in rural areas. To profitably serve the rural markets with the perspective of long term sustenance, market development shall be seen as a pre-requisite. However, to bring out this market development, modification in the value chain activities of the firm is one alternative that if adopted might lead to building the participatory work culture and simultaneously will develop the willingness amongst the marketers to serve these markets. This paper deals with marketing aspects of rural marketing wherein the role of public spiritual partnership (PSP) is important for the socio-economic development of rural areas. Since time immemorial Indian companies have exemplified the examples of making modifications in the value chain activities and hence developing and enhancing the willingness to serve the rural markets. Presence of LIC, postal services, Narayan Hrudalaya, Shankara Netralaya are few examples that strengthens the above stated thought of public spiritual partnership and motivation and willingness to serve the base of the population and rural markets. To truly understand rural India, one needs to go beyond the census yardsticks and take note of the changes that have occurred in the last ten years. The developing world has carried the burden of colonization and slavery for a long time that resulted in a lack of confidence among developing economies and the belief that they are not at par with the rest of the world. The lack of access has curtailed their ability to compete. Ingenuity and hard work has not been adequate for one to enjoy economic and social benefit. In order to acquire these benefits, access to resources like education, health and employment become critical. Internet has been a boon in this regard. Today, one can be in the remotest corner of the world and as long as there is access to Internet enjoy access to education, health and resources. This allows them to compete and use their ingenuity and hard work to bring 237 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

239 about a significant difference to their lives. Notable amongst these have been increased connectivity, higher enrolment in and completion of school education and the spread of cell phones across rural India. These have to some extent changed the face of rural India, taking it beyond the commonly-held definitions. There are three factors that are mandatory to build a scalable and successful business in rural areas. These are: Technology that is cost effective, affordable, robust, scalable and capable of delivering the relevant applications. A clear business model that addresses all market, stakeholder and operational needs An organisation that is exclusively focused on the rural market, which thinks and acts rural The rural market in India is a huge unorganized market as well as much of it is still untapped in various domains. A huge scope for services exists in these markets where still major companies have directed their focus on. Since major of Indian population exists in rural segment, prospects of huge demand exists for the products offered by various companies or service providers. But the demand and supply pattern in the rural segment is majorly different than those in the urban segment. This difference is due to vast difference in: Income level Expenditure capacity Taste and preferences Educational level Social, Cultural and environmental These differences results in Gaps between Service provider and the consumers/customers in both the market segments. Hence a service provider clearly needs to understand these gaps and the strategies to fill these gaps effectively. Therefore the mantra for successful strategy implementation in rural markets for service delivery is Think Global Act Local Analysis of Services Requirements in Rural Markets: The following Service areas have great potential in rural markets: Agricultural consultancy Rural customers require proper consultancy services about the best methods, timings and seasons, technology, tools, prices and best markets for selling their farming products. Banking, microfinance and loan facilities The rural market has huge potential for banking services for providing following facilities at affordable prices: Agricultural loans, Educational loans, Housing loans, Savings accounts and safe deposits, Automobile loans, Personal loans Healthcare There is a huge demand for medical and health facilities in rural markets as there is large population in India that resides in rural areas and lack proper facilities for proper health care. The availability and location of these services is of great concern as most of the areas either do not have any or many rural and remote areas needs to be dependent on very few and distantly located Hospitals. Telecomm services 238 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

240 Due to increased awareness and improved telecomm infrastructure across India, the demand for telecomm (Fixed and wireless) and internet services have increased drastically. Even the government s policies for reduced tariffs, call rates, lesser mobile handset prices and private participation involvement has helped in increasing the level of competition, continuous improvement in technology and thus has resulted in the growth of the rural telecomm market. The rural market has now become attractive and lucrative for many National and Global telecomm companies, who now are focusing more on this huge untapped market. Automobiles Services There has been a huge increase in the number of two wheeler, four wheeler and agricultural tools and vehicles in past few decades because of reduction in prices and government support to the rural population. This has given rise to a new business for providing maintenance and repair services to these vehicles with more attractive service quality, location and availability. This segment has huge potential in the upcoming trends of services to the rural markets. Travel and reservation Services The travel and reservation booking and organizing services for booking train, busses, taxies and tour consultancy has also been observed to create a huge demand in last few decades as more and more rural population need to mobilize for business and personal needs. Hence these services hold a huge potential for service providers. Low Cost Hotels Due to increased mobilization because of business and personal needs, there is also increased demand for hotel and lodging services to the travelers but majorly driven by the pricing of such services and facilities. Hence provide a great platform for the service providers to focus on these demands to capture a big untapped market. Event Managements The rural population are majorly involved in celebrating and organizing festivals, which require lightning arrangements, venue decoration, food, lodging, transportation, catering and event planning etc. for: i. Family gatherings, Marriages, engagements, birthday parties,etc.ii. Festivals like Diwali, Onam,Christmas, lorhi, Eid, Dushera, Kannada Rajamahotsava, Navratri, Garba and Dandia mahotsava etc. iii. Religious/Caste based events like poojas, various ceremonies, etc. Hence these services also have great potential to meet the rural customer s demand for event management. Beauty & Health: As there has been major improvement in the quality of life style and increased awareness among the rural customers (especially females), there has been great demand observed for beauty products and services. A huge increase in the demand for FMCG products like shampoos, beauty soaps, beauty creams, cosmetics, etc. has also been observed lately in rural India. This market is still dominated by unorganized and local players who lack adequate tools, methods, skills, process, technology and beauty products to meet the demand of rural population. A focus on this segment would be a profitable business for any company. Entertainment & Leisure Due to the increased awareness, arenas of interest, leisure requirements, and number of entertainment options like televisions and computers due to reduced & affordable prices, the demand for entertainment services like T.V. entertainment channels have increased. This provides a huge potential for cable and Direct to Home services providers to tap the rural markets to meet their demands. Many companies have already gained profits by targeting rural markets which include Airtel (DISH TV), Reliance (BIG TV), and Tata (SKY). 239 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

241 Till now the entertainment service providers for movie theatres at affordable prices in rural markets are dominated by local and unorganized players who lack proper facilities and infrastructure as well as quality delivered. Focusing on this market is a good profitable business Educational and Career consultancy The rural markets lack adequate and quality educational services which are majorly catered by government agencies and bodies. But due to lack of proper infrastructure, expertise, knowledge, talent, funds and participation of the service provider, this sector is unable to meet the desired level of service expectation of the rural customer for career building. With all the above mentioned arenas for Services in rural markets, there is a huge demand and growth opportunities that exists to be exploited by the companies which can make best market expansion and profitability by investing in Rural India. Connectivity swhile telephony is a technology most people comprehend, and video mail are being offered by the kiosks as additional means of communication, primarily for the purpose of being in constant touch with relatives/friends living abroad or in faraway places. Video mail is more popular in the rural areas since the villagers feel more comfortable with a face-to-face dialogue. Internet in India has crossed the tipping point of 100 Mn users in Even though 69% of Indian population resides in the rural areas, most of the internet users in India hail from the urban parts of the country. This presents a huge opportunity for growth in internet usage. According to the latest IMRB survey, there are 38 Mn users in Rural India who have accessed internet which is 4.6% of the rural population at least once in their lives, although an encouraging growth, the penetration is still very low considering the huge population of 833 Mn. Of these Internet users, there are 31 Mn users who have accessed the internet at least once in the past one month. The mobile revolution has been an accelerator for bringing the rural user online. As of June 2012, there are 3.6 Mn Mobile Internet users. This has grown 7.2 times in the past 2 years. 240 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

242 Some of the important trends in rural internet usage are: 1.Commnity Service Centers (CSCs) play an important role in providing internet access to the majority. Of the Internet users, 57.7% have used the facilities at a CSC. Most of the internet users access internet at CSCs for getting information on Education. 2. The CSCs have become more accessible with the average distance a person has to cover to reach a CSC coming down to 6.6 Km. The average amount spent per hour for internet access has come down to Rs. 12 which enables more and more users to access the internet. 3. Mobile phones have come up as an important point of internet access after CSCs, Public access centers and Homes. 12% of the internet users access internet on their mobile phones. 4. Entertainment is by far the most important reason for internet access with 90% users aware of it and 75% using it. 65% - 80% of users are aware of other services like communication and e-commerce and are willing to use it in the future. Innovative and user friendly content will be the enabler for the rural folk to use these services. 5. Usage of vernacular language is on the rise and availability of content in local language encourages the rural user to go online. Although 79% of the users access content in English, 32% of the users access content in Hindi as well % of the non users have said that they are not aware of the internet and 59% have stated that they can't access the internet as they do not have an internet connection. Lack of awareness and infrastructure are the primary reasons for not accessing the internet. There are 70 Mn Computer literates in rural India. Of these users, 38 Mn users are claimed Internet users who have used internet at least once in their lives. 31 Mn users are Active Internet users who have accessed internet at least once in the past one month. The mobile phone is also emerging as an important point of internet access in India. As of June 2012, there are 3.6 Mn Mobile Internet Users in India. Thanks to the falling prices of mobile phones, the penetration of mobile devices in Rural India is increasing tremendously. Also, the falling rates of mobile subscription have encouraged more and more user to subscribe to data plans on their mobile phones. In fact, most of the new internet users have started their internet journey on mobile phones. The penetration of the computer literates among the Rural population is 8.4%. The penetration of claimed internet users in rural India has grown from 2.68% in 2010 to 4.6% in The penetration of active internet users has grown from 2.13% in 2010 to 3.7% in There has been an increase in this number over 2010 thanks to the increased impetus towards basic computer training in schools in the rural areas. Mobile usage and hence, mobile internet usage has seen huge jump from the 2010 penetration levels. 241 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

243 The Growth of Internet in Rural India According to the IMRB estimates, the number of Claimed internet users in Rural India is slated to reach 45 Mn by December The number of claimed internet users has seen a CAGR of 73% since December I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

244 Usage Behaviour of Internet Users In Rural India, the Community Service Centres and Cyber Cafes are the point of access used by the majority primarily because of the availability of infrastructure. 29% of the Internet users have to travel more than 10 Km to access internet. Also, internet access at homes has emerged as one of the top access points. This clearly means a deeper penetration of PCs in the homes in Rural India. But the shining star in the Rural Internet blockbuster is Mobile Phones. These are truly the enablers of internet for Rural India. A huge 7.2 times growth in 2012 over 2010 was witnessed Most of the users now are starting their Internet journey on Mobile Phones. We hope to see more vigorous growth in the coming years as the telecom infrastructure connects more and more villages in India. For the Rural Claimed Internet user, Internet is mainly a source of entertainment and communication and a huge majority of the users have used it primarily for entertainment. Although the awareness of online services and e- commerce is high, we do not see much usage primarily because of lack of knowledge. Although, many of the users have stated that they would like to use online services and e-commerce in the future. Thus, even though there is awareness, there is a pressing need to educate and inform the user of the benefits of the internet services to drive growth in internet usage. Users mostly like to access Music, Videos and Photos for entertainment. s are mainly used for communication. Awareness is high, but usage is low. And the intention to use these services in the future is high. This means that the users are aware and willing to use these, but due to limitations regarding infrastructure / knowledge, they have not been able to. Users are also aware that there are services catering to the specific rural requirements viz. information search related to address, phone numbers etc, latest farming techniques, weather forecasts, information on agricultural products and are willing to use these services in the future, current usage is low. 243 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

245 CHAPTER 9 HUMAN RESOURCE DVELOPMENT FOR SERVICE INDUSTRY AN EMPLOYMENT GENERATION APPROACH HUMAN RESOURCE POLICIES IN INDIA The Planning Commission Report mentions, Our vision of India for 2020 is predicted on the belief that human resource is the most important determinant of overall development. A more than doubling of investment in education from the current level of % of GNP is the soundest policy for quadrupling the country s GNP per capita. It is therefore imperative that planners, policy makers and administrators, both in the government and outside, focus on this area. Emphasis should be on skill development and training of the highly amenable human resource of the region in a scientific manner, without further delay. Employment Scenario in India: In simple words, employment could be defined as a living by which a individual earns his own living. Therefore, employment is becoming the major challenge for a country like India, it taken into consideration the current economy. Therefore, for now much of the emphasis is given on providing more and more service opportunities, which will automatically reflect on the economic growth of the country. Majority of Indian population mainly depends on the agricultural occupation, which is much subjected to the seasonal changes. This is one of the main reasons of the economical downtrodden condition. To deal with this problem, there are circumstances where the farmers and agricultural related people are repeatedly engaged in additional industries like manufacturing and exports. Rapid growth in the population and short of private investment promoters is one of the key factors that has a foremost impact on the stabilization and growth of Indian economy. The Indian government should provide the literates with better job opportunities, which can help them to acquire good careers and jobs. And should also introduce some kind of comprehensive educational programs that are in pace with many other developing countries. Agricultural labor force contributes to the major employees in an unorganized or in the informal sectors. Therefore the percentage of population those working for the formal organizations should be increased to a larger extent to achieve fast and speedy growth in economical condition of the country. This basically depends on factors like increased rate of literacy, widespread educational programs to educate the younger generation according to the newest technology and thus providing improved techniques in the agricultural field. And also educate them on the modern techniques and methods for farming to gain more and more benefits and profits as well. The current day recession has turned into one of the new threats and has provoked the crisis of employment worldwide and India is not an exception for this. Major work is outsourced from different countries like UK, USA and many other European countries to India and this is one of the real-time solutions for the unemployment problem today. The recession has left the entire world in very depressing and embarrassing state as most of the people have lost their present jobs. No one is certain with their jobs as the employers are also in an awfully bad condition. This condition of recession will now won t last for a much longer time and thus all the industrial sectors will pick up speed in a very short period of time. 244 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

246 As population growth slows to replacement levels over the next two decades, India s greatest challenge will be to expand opportunities for the growing labour force, to enrich their knowledge and skills through education, raise their living standards through gainful employment and make provisions to ensure a good life for the aged. India's labour force is growing at a rate of 2.5 per cent annually, but employment is growing at only 2.3 per cent. Thus, the country is faced with the challenge of not only absorbing new entrants to the job market (estimated at seven million people every year), but also clearing the backlog. Open unemployment is not a true indicator of the gravity of the unemployment problem in an economy such as India, characterised by large-scale underemployment and poor employment quality in the unorganised sector, which accounts for over 90 per cent of the total employment. The organised sector contributes only about 9 per cent to the total employment. According to the Report INDIA VISION 2020 of the Planning Commission, Government of India, puts Employment and Education as the two most important issues. The report states that India faces the challenge of generating 200 million new employment opportunities over the next two decades out of which 120 million jobs will be in the Service Sector. The Report calls for rising employment generation of the nation s development agenda and marshalling all available resources to create employment opportunities for all job seekers. It also mentions that major changes in economic policy and strategy will be needed to eliminate the current backlog of more than 35 million unemployed job-seekers and assure employment opportunities for all additions to the labour force. 245 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

247 Employment 2012: Hiring trends of 2012 Engineering services, automobile, education, healthcare, pharmaceuticals and FMCG will witness robust hiring and salary hikes in the range of 10-15%, depending on the management level. For the rest however, caution will be the key word. Economic uncertainties in the European economies will force those operating in sectors such as banking-related IT hiring and retail, to play the hiring and hikes game with caution. Attrition levels too may come down, with companies going out of their way to retain employees, who themselves will be reluctant to switch jobs due to the global economic scenario and inflationary trends in India. Salary hikes will be in the range of 10% at the low and middle level while top talent may get a 15% raise Kamal Karanth, Managing Director, Kelly Services India According to Kamal Karanth, managing director, Kelly Services India, 2012 will be a year of caution. Not every sector will hire. Only big players, leaders in their sectors, will go ahead with big hiring plans during uncertain times. Big firms will continue to hire even in uncertain times but the overall hiring scenario will depend on the growth story and how each of these companies perform in the long run. For many foreign firms, hiring plans may depend on their performance in India. Companies that have a long-term horizon such as engineering services, power firms, automobile and healthcare companies may continue to hire. Good talent will continue to be in demand, especially at the top level and companies will continue to poach the best talent at the top. There will be some amount of movement in the top segment, but one will see a 10-20% drop in overall hiring in 2012, Karanth says. Despite the global economic uncertainty, the fundamentals of the Indian IT industry are strong. I think that the Indian industry is mature and can deal with the current macroeconomic conditions. Our conviction and practice has always been to grow people from within and our target is to fill 80% of the leadership positions by growing people internally, points out Ramesh Kannan, director-hr, Virtusa Corporation. Attrition levels too will decline to 12%. It s also not because of attractive retention packages but because employees themselves will be cautious about changing jobs, says Karanth. Moderate salary hikes are expected. Salary hikes will be in the range of 10% at the low and middle level while top talent may get a 15% raise, he adds. We anticipate salary hikes in the region of 10-15% in 2012 and we ve already opened new positions for January 2012, says Anil Warrier, director - India Staffing, SAP, a product engineering company. In terms of hiring plans, India will continue to be SAP s focus country. Another interesting trend predicted is that no new employer will be willing to take on board a new employer at a high premium. The salary hike offered will not be more than 10-20%. One will see an increase in temporary hiring, too, as some organisations will be looking at flexibility during an uncertain period. We anticipate the temp industry to grow by at least 15% in the next six months, says Rituparna Chakraborty of Teamlease Services. 246 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

248 This is owing to the apprehension in some sectors over the potential business outlook. Most organisations will be hesitant to invest in long-term hiring owing to the uncertain future. They would want to wait and watch. Hiring temporary staff to get a large volume of the work done will seem to be a more viable option, Chakraborti says, adding that one anticipates this trend in more manpower-intensive industries like FMCG, retail, BFSI, telecom etc. Highlights of 2012 Engineering services, automobile, education, healthcare, pharmaceuticals and FMCG witnessed robust hiring and salary hikes in the range of 10-15% Economic uncertainties in the European economies forced those operating in sectors such as bankingrelated IT hiring and retail, to play the hiring and hikes game with caution Attrition levels came down, with companies going out of their way to retain employees Only big players, leaders in their sectors, went ahead with big hiring plans There was some movement in the top segment, with a10-20% drop in overall hiring India's services sector growth rises 7-month high in Sept,2012. New Delhi: India's services sector expanded further in September,2012 registering the fastest pace of growth in seven months, driven by firm demand and "resilience" of the sector, an HSBC survey said. The HSBC's Services Purchasing Managers Index (PMI) for September inched upwards to 55.8 from 55 in August. Since November 2011, the index has kept above the 50-mark which indicates expansion. "Services sector activity grew at a faster clip in September led by firm demand, underscoring the resilience of the service sector," HSBC Chief Economist for India and ASEAN Leif Eskesen said. During the month, the service sector saw new orders expanding at a sharp rate -- fastest in seven months. Moreover services companies also remained optimistic on the short-term business outlook. Earlier, an HSBC survey had shown that India's manufacturing sector "held steady" in September supported by faster output growth and rising export orders. Accordingly, the HSBC India Composite Output Index, which maps both services and manufacturing activity, stood at 55 during the month, up from August's reading of 54.3, signaling further improvement in the private sector activity. On inflation, HSBC said the pressures have "firmed" again on the back of rising costs and the Central bank has limited room for policy rate cuts given the "persistence" in the rate of price rise. Both service providers and manufacturers witnessed rise in input costs in September. But manufacturers registered the fastest increase in input prices since June due to rising raw material and diesel prices. Retail inflation in August stood at percent, according to official data. "The RBI has limited room for policy rate cuts given the persistence of inflation, although further progress on fiscal consolidation and structural reforms may eventually pave the way for some easing," Eskesen said. The government has recently taken a number of reform initiatives such as opening the multi-brand retail and aviation sectors to FDI, hiking diesel prices and capping the number of subsidised LPG cylinders. In another round of big-ticket reforms, the Union Cabinet today is widely expected to consider raising the FDI cap in the insurance sector to 49 percent and opening up the pension sector to foreign investment. On the employment front, HSBC said more jobs were recorded in the private sector during September, marking a seven-month sequence of expanding workforce. 247 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

249 Services Sector Growth Rate in India GDP Services Sector Growth Rate in India GDP has been very rapid in the last few years. The Services Sector contributes the most to the Indian GDP. The Growth Rate of the Services Sector in India GDP has risen due to several reasons and it has also given a major boost to the Indian economy. Indian Economy India gross domestic product (GDP) means the total value of all the services and goods that are manufactured within the territory of the nation during the specified period of time. Services Sector in India India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country. The various sectors under the Services Sector in India are construction, trade, hotels, transport, restaurant, communication and storage, social and personal services, community, insurance, financing, business services, and real estate. The Reasons for the growth of the Services Sector contribution to the India GDP The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India especially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP. The Services Sector in India must be given boost Services Sector Growth Rate in India GDP registered a significant growth over the past few years. The Indian government must take steps in order to ensure that Services Sector Growth Rate in India GDP continues to rise. For this will ensure the growth and prosperity of the country's economy. 248 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

250 SOME OF THE SERVICE INDUSTRY BUSINESSES 1. Hospitality Services: a) Hotels & Restaurants b) Resorts c) Tourist Complexes d) Catering Outside / Corporate / Events e) Home Delivery 2. Transportation Services: a) Railway b) Airlines c) Local Passenger Transportation d) Water Transportation/ Cruise Lines e) Helicopter Services f) Private Aircraft Services g) Car Rentals 3. Communications: a) Telephone Services b) Mobile Phone Services c) Postal & Courier Services d) Radio & TV Broadcasting e) Telex Services f) STD Booths g) Business Centres 4. Call Centers/ BPO s/ ITES/ MNCs 5. Head Hunting / Placement Services 6. Travel Agencies 249 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

251 7. Tour Operations 8. Beauty, Health Care & Fitness Centres 9. Education / Training Services 10. Hospitals / Nursing Homes / Medical Establishments 11. Old Age Homes 12. Banking Services 13. Insurance Services 14. Consultancy Services 15. Counseling Services 16. Planning, Organizing, & Coordinating Events 17. Recreational, Cultural, & Sporting Services 18. Architectural Services 19. Photography Services 20. Packaging Services 21. Printing & Publishing Services 22. Media & Entertainment Services: a) Theme Parks b) Motion Pictures c) Video Parlors d) Discotheques e) Clubs / Health Resorts / Event Venues f) Bowling Alleys g) Pool Parlors etc. 23. Computer Services: a) Consultancy Services related to Installation of Computer Hardware b) Software Implementation Services c) Data Processing Services d) Web Designing and Hosting Services e) Database Services etc. 24. Accounting, Auditing, & Book-keeping Services 25. Taxation Services 26. Engineering Services 27. Medical & Dental Services 28. Legal Services 29. Research & Development Related Services 30. Real Estate Services: a) Renting b) Investment Consultants c) Property Consultants d) Building & Real Estate Management 31. Investigation & Security Services 32. Marketing Related Services: a) Marketing Consultancy 250 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

252 b) Tele-Marketing c) Sales Promotions d) New Product Development e) Market Research etc. 33. Advertising 34. Public Relations 35. Tourist Guide Services 36. Utility Services (Electricity, Gas, Water, Appliance Repair) 37. Interior Designing 38. Fashion Designing 39. Business & Professional Services: a) Records Management b) Management Consultancy c) Meeting Facilities d) Office Management e) Secretarial etc. 40. Construction Services: a) General Construction Work b) Installation & Assembly Work c) Building Completion & Finishing Work 41. Distribution Services: a) Commission Agent s Services b) Wholesale Trader Services c) Retailing Services d) Franchising 42. Translation Services 43. Social Services 44. Media Services 45. Health Related Services 46. NRI Related Services Human Resources Development (HRD) as a theory is a framework for the expansion of human capital within an organization through the development of both the organization and the individual to achieve performance improvement. Adam Smith states, The capacities of individuals depended on their access to education. The same statement applies to organizations themselves, but it requires a much broader field to cover both areas. 251 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

253 Human Resource Development is the integrated use of training, organization, and career development efforts to improve individual, group and organizational effectiveness. HRD develops the key competencies that enable individuals in organizations to perform current and future jobs through planned learning activities. Groups within organizations use HRD to initiate and manage change. Also, HRD ensures a match between individual and organizational needs. Notably, HRD is not only a field of study but also a profession.hrd practitioners and academia focus on HRD as a process. HRD as a process occurs within organizations and encapsulates: 1) Training and Development (TD), that is, the development of human expertise for the purpose of improving performance, and 2) Organization Development (OD), that is, empowering the organization to take advantage of its human resource capital TD alone can leave an organization unable to tap into the increase in human, knowledge or talent capital. OD alone can result in an oppressed, under-realized workforce. HRD practicitioners find the interstices of win/win solutions that develop the employee and the organization in a mutually beneficial manner. HRD does not occur without the organization, so the practice of HRD within an organization is inhibited or promoted upon the platform of the organization's mission, vision and values. Other typical HRD practices include: Executive and supervisory/management development, new employee orientation, professional skills training, technical/job training, customer service training, sales and marketing training, and health and safety training. HRD positions in businesses, health care, non-profit, and other field include: HRD manager, vice president of organizational effectiveness, training manager or director, management development specialist, blended learning designer, training needs analyst, chief learning officer, and individual career development advisor. We plan a series of articles to address the broad scope of HRD, to introduce methods to address the development of individuals and organizations. Here's what we will discuss in future issues: ASSESSMENT OF NEEDS -- the first step. This sounds simple, but we are often in too much of a hurry. We implement a solution, sometimes the correct intervention but not always. But we plan, very carefully and cautiously, before making most other investments in process changes and in capital and operating expenditures. We need to do the same for HRD -- implement the appropriate planning. This needs assessment and planning will lead to several possible ways to improve performance. (Of course, one of these is to do nothing! -- we may decide to focus on other activities with greater impact and greater value.) PROGRAM DESIGN, DEVELOPMENT & EVALUATION. We need to consider the benefits of any HRD intervention before we just go and do it: What learning will be accomplished? What changes in behavior and performance are expected? Will we get them? And of prime importance -- what is the expected economic cost/benefit of any projected solutions? TRAINING & DEVELOPMENT -- acquiring knowledge, developing competencies and skills, and adopting behaviors that improve performance in current jobs, including: adult learning theory and applications, instructional systems design, train-the-trainer programs, and instructional strategies and methods. ORGANIZATION DEVELOPMENT -- the diagnosis and design of systems to assist an organization with planning change. OD activities include: change management, team building, learning organizations, management development, quality of work life, management by objectives, strategic planning, participative management. organizational restructuring, job redesign, job enrichment, centralization vs. decentralization, changes in the organization's reward structure, process consultation, executive development, action research, third party interventions, and more. We will discuss these in future articles. CAREER DEVELOPMENT -- activities and processes for mutual career planning and management between employees and organizations. Changes in our organizations (including downsizing, restructuring, and outsourcing) are resulting in more empowerment for employees. The responsibility for our own career development is downloaded to us. (Translation: career ladders are gone; career development is now the responsibility of the individual.) Later in this series we will explore strategies and tactics to survive and prosper in this new workplace environment. ORGANIZATION RESEARCH & PROGRAM EVALUATION -- an exploration of methods to evaluate, justify, and improve on HRD offerings. 252 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

254 THE HRD PROFESSION(S) AND PROFESSIONAL ORGANIZATIONS -- we plan to list and briefly describe the principal HRD organizations, their missions and goals, and their addresses and contacts. HRD can give you the tools you need to manage and operate your organizations. Everything -- production, management, marketing, sales, research & development, you-name-it -- everything may be more productive IF your people are sufficiently motivated, trained, informed, managed, utilized and empowered. In future articles in this series, we're going to tell you how to do it. Stay tuned. Human resources Development (HRD) plays significant role in market economies and more so in an economy tending towards mar4ket conditions like India. Global competitiveness has created customers diagonally opposite to what we have today this is the problem, challenge and opportunity.response to global competitiveness involves new Customers. Meeting the requirements and desires off new customers. Demands for competent.developed human resources with human approach towards customers.thus,liberalization has positive impact on HRD. HRD strategies of industries of liberalized India would be: Delarging/downsizing of organization structure. Building organization structure based on the characteristics o9f organic structure Providing the scope for internal customers approach in structuring organization. Enriching the jobs at all levels. Creating autonomous jobs. Performance planning and development. Preferring empowerment rather than supervision. Providing conducive climate for team work. Creating the value towards new customer orientation. Encouraging innovative and creative ideas. Providing conceptual and informing role to all employees. Developing anticipatory and participatory approach. Culture building Competence building. Motivation building Confidence building Commitment building Structuring business groups. Creating learning organizations. Developing participative approach and automatic learning. Providing training and retraining. Developing managers continuously. Introducing the techniques of organization development. Developing reward system contributing to automatic human resource development. Providing the challenge and scope for proactive learning. Developing the skill of adoptability. Developing the aptitude towards different jobs and encouraging job rotation. Developing the value system centre around competition. Providing health care facilities to arrest the erosion in the existing skills, knowledge and abilities. Providing social and culture programs to satisfy the social needs of employees. In addition to increasing the international competitiveness of Indian Industry for export of goods manufactured in India, a lot of international companies are outsourcing many services from India. What is now known as Business Process Outsourcing or in short BPO. This is in addition creating many jobs for Indians without going abroad. Importance of HRD in service sector Unlike goods manufactured in the agricultural and industrial sectors, a service is intangible and perishable in the sense that it cannot be stored for future consumption. This implies that the service organisations are responsible not only for producing products but also for immediately transmitting, i.e., providing these to the consumer. In 253 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

255 other words, in the service sector the production and delivery of goods are carried out simultaneously. The consumer, therefore, is an integral part of the whole service delivery system. The services of a doctor or teacher involve the patient or student as a consumer. The services of a tourist guide will require a tourist, the consumer. Unlike a product there is no lead time in the production and consumption of services. The customer does not possess any tangible product while buying the services and value received may also vary from customer to customer. V.S. Mahesh has mentioned that unlike a bad product a bad service cannot be replaced at best one can be sensitive to customer dissatisfaction and recover the situation with such remarkably good service that the customer may both forgive and forget the bad service just received. In fact all these characteristics of the service industry have important implications for the kind of human resources and human competencies required for the service sector. When compared with the secondary or industrial sector, the service sector may be less labour intensive but probably requires more human related skills and competencies. While technology has advanced considerably, the technical and operational skills which characterised earlier agrarian or industrial societies, have given way to an emphasis on human and managerial competencies at the macro economic level as well as at the organisational level. The service sector organisations also play a very important social role. By extending benefits to people of all social and economic segments, provide opportunities for development and for reduction of socio-economic disparities. They enable the weaker sections have access to the benefits of modernisation. By providing common service to all sectors they reduce social and psychological distances. For instances, government services, such as, administration and judicial services are available to all without discrimination. The professionalisation of the service industry has made services, such as, hospital, travel agent, hotel, legal aid, rehabilitation, etc., available to all those who can pay the prescribed fee regardless of social background. Thus, as M.B. Athreya points out, the services themselves have an HRD effect first by developing individuals and deprived groups, and secondly by gradually changing societal culture towards a more egalitarian, democratic direction. HRD has aspects which are universal to all organisations as well as some which are specific to the nature of the service industry. As far as the universal aspects are concerned we can say that HRD is relevant to all sectors as it is at the base of all development. Other resources, like physical and financial resources, can only be activated through the agency of human resources. Whatever you have read in this course till now must have made it clear that HRD aims at developing the individual, matching the individual to roles, both by developing individual and the role, and catalysing individual and organisational self-renewal. A generalised model of HRD will include the following sub-systems: role analysis, selection and placement, transfer and rotation, reward and punishment, i.e., disciplinary action, performance and potential appraisal, feedback and counselling, training and development, career planning, succession planning, participative devices, and HRD data bank. Of these systems, some are essential to all organisations in any sector: selection and placement, transfer, rotation, and reward and punishment. At least these sub-systems need to be designed well. If one wants to go beyond a status-quo bureaucracy, at which stage many service institutions get stuck up, performance appraisal, potential appraisal and training and development are particularly relevant. If high levels of performance is a goal, then the relevant additional sub-systems are feedback and counselling, and of participative devices. Finally, if one is concerned about the long-term vitality of any institution including a service institution, the remaining subsystems become essential, namely role analysis, career planning, succession planning, and development of an HRD database. We have mentioned earlier customer care and service quality as two unique aspects. These along with some other special features call for particular emphasis in the design and implementation of HRD systems. These are: i) Intangibility of product: Service is the provision of value to a customer, without a physical product. This could create lack of clarity about the tasks and erosion of self-confidence. So HRD has to create appreciation of client needs, and pride in the potency of the service to meet those needs. ii) High public exposure: The service industry is much more exposed to its clientele. Even if the industry does not proactively promote its service, the clients may take the initiative and beat at its doors. The staff need relationship skills and tolerance of customer reactions. In the case of subsidised on free services, some customers may be arrogant in their demands and misuse the service, while some others may be less literate, gullible and timid. 254 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

256 iii) Size constraints: To be effective, the service industry should not be perceived as a huge, slow, monolith, in the face of which the customer is anonymous and insignificant. Conceptualisation of roles is especially important. The roles at the environment/customer interference need to be so designed, as to enhance service. Examples are, the bank teller and the single window clearance concept used by some organisations recently or the concept of Front Office staff and Guest Relation Executives (GREs) in the hotels. iv) Back-room technology: At the customer end, a service has to be simple to understand. For example, air travel should be made easy, but behind it may be complex aeronautics and computerised, real-time reservation systems. HRD has to ensure that those at the delivery end of a service industry understand the power and limitations of this back-up technology, while at the same time the technicians understand customer needs, abilities and limitations. v) Specialised knowledge: The level of general and specialised education tends to be relatively high in a service industry. Infact, a service industry like a consultancy, has to be intellectually a few steps ahead of its clients to be of real value to them. So, a research and learning orientation is needed. The service industry tends to have a preponderance of white collar workers and executive manpower. Their motivation is more complex. Besides monetary rewards, they, many a times, also look for ego satisfaction, quality of work and also glamour and fame. vi) Propensity for disintegration: Service industry seems to have a higher tendency to disintegrate. Depending upon personal ambitions, bruised egos, inequity, etc., rebel groups break away from the mother organisation and form new ones. For example, many smaller tour companies are opening up from a mother tour organisation leading to a dent in the mother organisation s clientele. This may be partly due to low capital cost, low barrier to entry and the preference of the customer for specific resource persons. Therefore, HRD needs to provide for more participation in planning and control of the projects, as well as sharing of rewards, whether psychic satisfaction, fame, visibility; profits or upward mobility. HRD in hospitality and tourism sector Human resource development (HRD) can be described as a continuous process or virtuous cycle which uses investment in human capital in order to improve productive output, enhance the quality of that output, provide increased benefits for those employed and contribute to an improved quality of life for those involved and their dependants. At the same time, HRD is a process which is at the core of an organisation's investment in its human capital and, as such, can make a significant contribution to improved performance, productivity and profitability. HRD is a key functional aspect of human resource management (HRM) and, in its broadest sense, encompasses the complementary process of ecotourists, training and developing personnel for or in an organisation. HRD is a term which is of relatively recent currency and has evolved as an umbrella term to assist in overcoming social, cultural and practical difficulties which can exist in defining its component areas of education and training and development. 255 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

257 The HRD process may be formal in its organisation, consisting of publicly accredited education courses or training modules but also includes a wide range of informal learning situations including those which may not be actually recognised as such. Formal HRD includes the general educational investment which the state and individuals make in preparing young people from pre-school age for their role in society and the workplace. It includes both general and vocational education in schools, colleges and universities. The inclusion of reference to tourism and the development of awareness about the industry and its generic skills needs (customer care, quality) is growing internationally, in both the elementary and secondary school curriculum, and thus is the starting point for HRD in tourism. The macro socioeconomic perspective on HRD is one often neglected in HRM texts. In the context of tourism, the true vocational focus may come early in the process, as within the German dual system or may take place at undergraduate or postgraduate level in universities. Formal HRD also includes programmes in which employees of organisations participate, leading to publicly accredited trade, academic or professional qualifications. Informal HRD is that which takes place within and external to the organisation but which has no formally accredited outcomes. HRD may be located within the organisation and include activities such as on-the-job training (OJT), incompany training and the workplace classroom. In larger tourism organisations, HRD is the responsibility of a specialist department or a specific unit within human resource management. This allows HRD to be planned and organised in a strategic manner, based on identified training and educational needs within the organisation and designed to balance individual development aspirations with the wider requirements of the company. In small organisations, a dedicated training or HRD section is less common and the function may be one that is shared along with wider HRM responsibilities. In many smaller tourism organisations, HRD is likely to be a responsibility subsumed within the role of a member of the senior management team, and may not receive the attention or priority it requires. Formal HRD within tourism's micro-organisations is frequently neglected and may be one contributing cause to the declining competitiveness of the small tourism business sector in some countries. HRD may also take place external to the organisation, through programmes in colleges and training centres which are company specific or of a more general nature. An HRD programme operates at a variety of levels and stages within an individual's career in a company. It has an important role to play at point of entry into a company (or even prior to it) through induction training, which can relate to technical preparation for the workplace but generally also has a strong organisation cultural focus. It is a training process which has equal applicability (with different focus) for junior, entry-level positions and senior managers. Further, HRD is at the core of individual and organisational development. Companies frequently recruit on the basis of the potential contribution which an individual can make, but achieving that potential requires significant, structured investment in the skills and wider development of that individual. To optimise individual potential, the programme can be through specific courses or qualifications. However, this may take the form of an extended option of exposure to and experience in various departments of the organisation over an (extended) period of time. Individuals may also be targeted for promotion within an 256 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

258 organisation's succession planning system, and HRD initiatives are used to prepare them for their intended responsibilities. At an organisational level, HRD plays a key role in supporting or planning for change which, in this context, may relate to new technical demands on the workforce (for example, the introduction of new types of aircraft into the fleet). It may reflect new communication systems such as the introduction of for all staff. Marketing and market changes can necessitate organisational HRD efforts in order to prepare employees for such change. For example, this may include a focus on language skills to meet new route intentions in an airline, or to reflect promotional investment by a destination in specific new tourism markets. The traditional model of HRD in tourism is based on the 'front-loading' of skills principle in the sense that skills development is concentrated prior to entry into the industry or during the early stages of employment. This model assumes that once skills are honed, the working environment remains largely unchanging so that the qualified pilot, chef or tour guide has the capability to undertake tasks associated with the job with little modification throughout their career. This mediaeval apprenticeship model of training has little relevance to the demands of contemporary tourism employment where the role of HRD is to equip staff for constant change in the workplace, supporting the concept of 'lifelong learning' for all those active within the economy. It is difficult to generalise about principles of HRD in the context of the international tourism sector. The limitations are imposed as a consequence of a number of factors which include the supply-side diversity within the various sectors of tourism which necessitate differing technical and service skills. Supply-side operations across the transportation, accommodation, food service, attractions and other sectors have limited skills requirements in common, beyond generic customer handling, communications, finance and related areas. The context in which HRD takes place in these sectors also varies to a considerable degree. A further factor is diversity in business structure, size and ownership, varying from the micro family operation to the mega multinational firm. Tourism, as an industry, remains dominated in most countries by small family-run businesses within which the capacity to effectively deliver HRD is often limited. While the focus in these operations tends towards the informal, such investment may be insufficient in a rapidly changing business environment and a volatile labour market. Limitations to generalisation are also the result of different traditions and philosophies of education and training between countries and regions. Tourism is generally 'locked into' the structures and philosophies of public sector education and training settings in which it operates. These approaches may not be fully sensitive to the vocational HRD needs of tourism. In a few countries, the private sector, in partnership with public institutions, has been able to participate in HRD programmes. 257 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

259 Finally, the varying levels and forms of public sector support for HRD within the tourism sector also cause diversity. This action has generally been justified on the grounds of the fragmented and diverse nature of supply-side business. In particular, the need to ensure minimum operating and service standards throughout a destination's supply chain is at the centre of justification for financial and practical measures in support of tourism HRD. Examples of how the public sector provides incentives to companies to invest in HRD include payroll levy schemes (Malaysia and Singapore), subsidised training provision (Ireland and Scotland) and tax exemption (a widely employed mechanism). In some respects, tourism as a sector exhibits features of immaturity when compared to other industrial sectors in terms of its HRD policies and practices. This may be a consequence of the environmental considerations discussed here. It is also a reflection of wider weaknesses which exist in relation to the image which tourism, as an industry, has for sustained employment. Investment in HRD is constrained by labour market challenges which parts of the sector face, including high labour turnover, inability to recruit top quality entrants at all levels, and a poor career image. The issues facing HRD in tourism are further compounded by a lack of planning at a macro level. This means that there are few established links at a strategic policy level between the tourism sector, its development, and the provision of HRD in schools, colleges and universities. HRD has the potential to play an important role in the sustainable development of tourism, but unfortunately this role is widely neglected. Tourism is fast expanding. For many nations it provides the main source of GDP. Tourism depends more on the HR capabilities of the service providers. This paper examines tourism from the perspective of business. It considers that the success of tourism will depend upon the business approach of facility planning, marketing and promotion, transportation, efficient supply chain of food and beverages, ensuring quality in delivery and aiming at customer satisfaction. The central focus, the paper investigates is HRM, which is present in all of its activities. The success of tourism depends on training, development and knowledge of the service providers and operators who will run transportation, hotels, and accompany tourists as guides. Finally the papers highlights the importance of culture of the people at large in the society who can convert customer satisfaction into customer delight through their conduct where, as per an old Sanskrit saying, athithi devo bhava, that is the guest is god. Tourism Simply defined tourism is the business of travel. Expanded it means anything we do to serve the needs and demands of travellers. More elaborately tourism is referred to, the temporary movement of people to destinations outside their normal places of work and residence, the activities undertaken during their stay in those destinations, and the facilities created to cater to their needs ( Hunt and Layne 1991). Tourism is diverse; tourism is dynamic; tourism is all inclusive of many facets of activities and is therefore difficult to bound it by a formal definition. Cook,Yale,and Marqua(2007) refer that tourism includes a wide array of people, activities and facilities. Therefore, tourism is normally considered to comprise of provisions and services of transportation, accommodation, food and beverages, attractions and destinations for visits, entertainment and information. All of these components have one predominant feature, that is customer service. It is basically the service which determines the satisfaction of the traveller who can be more appropriately referred to as the customer of tourism. Customer contact model and tourism The service element is unique in this sector of industry. Services in general follow the customer contact model. The degree of contact between the customer and the service provider often determines the customer satisfaction. Higher the contact, higher the degree of satisfaction. Conversely, low and indifferent contact can spoil the satisfaction and in some areas creates a negative state. The degree of contact is also differently described as service encounter. 258 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

260 The encounter Every interaction between a service provider and the tourist becomes a service encounter. Both a tourist and the tourism service provider carry their expectations when they meet and interact. A tourist has built up his expectations from several sources of information. It comes largely from his friends, relatives who have visited the destination before and have spoken of their experiences. I t can be a personal experience of the tourist who this time once again desires to visit the place possibly with his grown up family or new friends. His past experience has been in a state of delight and the destination is exercising a great pull. The tourist in these days of website revolution is also greatly influenced by the promotion publicity provided by tourism promoters over the internet through glossy photographs and a superlative language. As a matter of fact, tourism promotion through internet is emerging one of the major influencing components in enhancing tourism. In a similar context the tourism service provider has great expectations from the tourist. No doubt, tourism is business and every business has to finally result in a good bottom line for the service provider. The service provider therefore carries expectations that the deal of a tourist visiting the destination will go through. The service provider has to equip himself with all the knowledge, information, props to win the customer. An encounter is often compared to a theatrical play, where everyone has to put up a performance as per the role demanded. In an encounter it is essentially the performance of the service provider to bring the encounter to a successful conclusion. Unlike the arena of a Spanish bullfight where it is the bull who stands always vanquished, in a service encounter it is a win-win situation. The service provider wins his bottom line of business transaction; the tourist his level of satisfaction. The front office and the back office The success of the performance depends on the personal attributes of the service provider to create confidence, acceptability, the trust and a show when the interaction takes place. All the service providers are not equipped with these qualities, Therefore, service operations are designed to create front office and the back office. There are two categories of service providers: one who work back stage and are happy to work as support functions to ensure smooth running of the theatre. The back stage work is also responsible for efficiency, in cutting down of costs and achieving high utilization of facilities. The front office employees then take the responsibilities of winning over the customer through direct interaction with the customers. It is not to belittle the role of the back stage. The two roles supplement each other. This integration is vital to reach success in tourism. An Integration model of Tourism Cook et al ( 2007) present an integrated model of tourism. It is explained that a traveller as a tourist is the focal point for all tourism activities and forms the centre in this model. The authors explain that radiating from this focal point are three large bands. Each band has several interdependent groups of tourism participants and organizations. These three bands have been titled as :Tourism promoters, Service providers, and External environment. The band of tourism promoters has professional services such as tourism agencies, tourist boards, travel agents, and tour operators. The band of Service providers caters to provision of services of accommodation, food and beverages, transportation. The last band represents the External environment with components of economy, political environment, technology, and society/culture. A change in these dimensions can make a vital change in forcing the status of tourism in a geographic region/ a country. The model stresses on integration, working together of various components to enhance tourism. Systems Approach to Tourism This paper considers that tourism can be visualized to operate following a systems approach. In systems theory of management, a system has several components, called as sub-systems and sub-sub-systems in case the systems are large. These sub-systems interact with each other, impinge and influence each other and are interdependent. It is the holistic performance that counts. The performance of the silos carries a little significance as no subsystem is responsible in entirety for its performance. In this context the tourism as a system operates as an open system, where there are no boundaries creating isolation of each of the subsystems. The influence permeates across the sub systems. 259 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

261 The following sub-systems are proposed: Tourism Strategy Sub-system This sub-system is a management sub-system, is central to the organization and provides support in policy matters to all other sub-systems concerning tourism in the country. The main objectives of this sub-system are to lay down policy directions for establishing, expansion and growth of tourism. How a nation views tourism as an engine of economic growth, as an opportunity to generate employment and conceives innovative programmes to encourage tourism is a subject which is the focus of this sub-system. Most importantly, this subsystem determines a nations attitude to the growth of tourism and this is reflected in allocation of funds, taxation policy, incentives to open new areas, new capacities, and permission to new initiatives. Simultaneously, the policy decisions take care of conservation of natural and cultural heritage from exploitation to the extent of decimation, ethical issues, and permission to enter some certain tourism pursuits. The state regulators have a major role to play and develop a strategy of tourism for the country. There are visible different policy directives and these vary from one country to another. India, for example does not permit casinos on Indian soil, whereas in some of the destinations, Macau for example Casinos play a major role to attract tourism. HRD and Tourism Strategy Sub-system: Gupta(2003) mentions that tourism is a major social phenomenon of the modern society with enormous consequences. Promotion of the tourism generates a plethora of both economic and social benefits, infrastructure development, and social integration. Tourism as an economic sector has challenges to meet the needs of trained and educated manpower for various facets of tourism management. Ashraf and Pooja Mathur ( 2003) point out that there is an increasing demand of human resources who can plan, design, develop, manage, promote tourism or even train manpower to run agencies, to operate tours or even to act guides. The customers are increasingly becoming more discriminatory and look for more quality services. Globalization has added a further dimension of awareness amongst the tourists. There is increased competition from all areas. A tourist expects to be guided on convenient travel, places of destinations to be visited, comforts, care, social customs practiced to avoid annoyance to the local population, availability of preferred food, use of scarce funds. HRD has emerged as a major factor to determine competitive advantage for tourism industry. A trained right human resource enables to provide the right context to a tourist. The sub-system has a role to create a resource of skilled, trained personnel for the range of tourism activity. Tourism requires trained human resource as managers on one side, and staff to carry out both front office and back office operations. Leaving aside some large organizations such as chains of hotels which can afford to set up their own training schools, It becomes the responsibility of the central regulators to create an infrastructure of training schools and provide a choice of professional courses to create trained manpower. New demands have emerged on tourism in this age of international traveller and internet. The trained manpower needs to be exposed and educated in understanding 260 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

262 the management function, behavioural aspects of conduct and encounter, relationship management, comprehensive understanding of the human nature, knowledge about the unique demands of a customer coming from a foreign country, knowledge of IT, exposure to money transactions, handling of grievances and professionalism. A capable HR manager in tourism is instrumental to implement the central policy, create a climate of trust, and openness through his professional conduct. Apparently when such trained manpower is available, there is also going to be an impact on policy making. Professional advice would now improve the quality of such policies. Tourism Facilities Sub-system This sub-system concerns tourism facilities and these include destinations, accommodations, food and beverages, transportation, sports and entertainment. Destinations cover a wide spectrum. On one side there are holiday homes, resorts, golf resorts, health rejuvenating centres which should not be seen as temporary accommodation to spend a night or so but rather a restful place for away from the maddening crowd. The other destinations include experiencing a past glory in the form of heritage cottages, havelis, old forts, palaces, memorials, city sights to make the dreams come true. New forms of destinations are getting invented. These include visits to places of spiritual experience, watching ceremonies such as change of guards at international borders( a big daily draw at Indo-Pak border), worship rituals at major temples, sites of worship, sound and light shows etc. The traditional destinations such as museums, shows, displays of antiquity, zoos, botanical gardens wild life sanctuaries, night safaris, jungle travels continue to be popular. Accommodations in the form of hotels, pensions, economy hostels are the sources of major income and generate a good degree of employment. These are made available for different classes of customers depending upon their capacity to pay. Besides, the demand can vary in a substantial manner from season to season. Use and availability of technology is increasingly playing an important role. Transportation is another major facility which can make or mar a travel and customer satisfaction. Tourism in recent times has got a major boost because of innovatory schemes such as creation of old charm trains dedicated to tourists, linkages to important centres of destinations creating tourist-sectors, designing the travel schedules to the convenience of the tourists (Delhi offers convenient connection to the Taj Mahal so that a tourist comes back same day without having to spend a night at Agra). Hospitality is incomplete without mention of food and beverages. Globalization has created a major impact on this sector. People coming from various backgrounds demand their preferred food. It is very common to see tourism promotion advertisements in Indian media offering Indian vegetarian food to group tourists planning a trip to Europe. Offer of vegetarian food to air travellers by any carrier is now a no more a novelty the way it was perceived a decade earlier. Sports and Entertainment is a fast emerging a major tourism interest sector. There are amusement parks offering various types of shows as folk dances, rock music, magic, animal performances, tricks; theme parks, wax museums, ocean parks, Disneylands, planetariums, sound and light shows etc. Then there are water games, skating, rafting encouraging tourists to participate. Most of these are manmade creations and are innovations. Organising sports events is yet another form. The world cups with lavish start and closing ceremonies, the presence of the cheer leaders, the league matches in cricket, soccer, baseball have created another category of tourists who would travel from far and near to be a part of the excitement. HRM and Facilities Sub-System HRM is needed in all of these areas. There is both diversity and complexity in these facilities. One cannot have an expert in travel arrangements to take care of hospitality in a hotel or be knowledgeable about various cuisines. The operational demands of these facilities require skills, trade knowledge and core strengths of subjects. There is thus a need for professional schools for each of these areas. These are to be supplemented with communication and other behavioral skills. These facilities are integrated. A tourist desiring to be present at a sports event needs travel arrangements, transportation to reach the destination, accommodation, food, beverages, health care and other needs. These are vital as otherwise his visit is meaningless and cannot take place. There is therefore not only a need to run these facilities in a professional manner but even to create a coordination and a holistic performance. The coordination of such a complexity calls for the use of manpower with high analytical skills and knowledge of IT. 261 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

263 Tourism Marketing Sub-system Tourism is to be seen as any other business (Burns et al.2005). The fundamentals of marketing as are followed in any business segment are also applicable here with only minor changes. The foundations of marketing tourism are built around understanding the needs of the tourists and making an offer of tourism attractions fulfilling the needs of the tourist customers. The approach follows the classical steps of carrying out marketing Information The process starts from seeking information about the travellers. This may cover their personal profile including the age groups, education, exposure to external surroundings, their life-style, attitudes to communities at destinations, their reservations on food, leisure pursuits, levels of trust in fellow travellers, tour agencies, attitude to move together, exposure to adventures etc. Another area of interest to any business, including tourism would be understand the affordability of the tourist to spend. The human nature changes. There are also changes necessitated because of globalization of the society. The tourist gets exposed to new standards of comfort and enjoyment. Information therefore needs to be collected frequently and updated on a continuous basis (Cohen 1972). Motivation to travel Together with information about the tourist, it is necessary to find out and understand the motivations of a traveller to embark on travel or plan a tour. Cook ( 2007) describe that there exist two theories: the push and pull motivations. The travellers are pushed to travel by personality traits or individual needs and wants. These refer to inherent desire of a human being for travel, to go for adventure, to enjoy life after a hard work and success. Students, executives, businessmen are seen to reward themselves of travel to in the name of holiday after a success in their studies, business pursuits, or projects. The traveller wants to escape the mundane routine and seeks a destination away from the stress and worries for a while. He looks for getting pampered and an award of treatment reserved for the kings. The pull theory refers the attractions and compelling desires or appeals or attractions of a destination to a tourist. He is attracted for example to see the Taj Mahal in India, because he has heard about it as one of the Seven Wonders of the World right from his childhood. The recent royal wedding in England attracted millions. Segmentation: In marketing of products or commodities, it is well known that one cannot satisfy all the customers all the time. This is truer in case of services such as tourism. The tourist has his own inclinations and needs. Successful marketing strategy segments the customers and then targets them to attract following the pull or the push motivations. Both Singapore and Malaysia have understood the psyche of an Indian tourist seeking a clean conservative family entertainment and have designed the tourism around these tourists. Both the countries have claimed a big success. Nepal on the other hand targeted inner urge of a male Indian to go for casino, banned in India. It is no wonder that Nepal casinos are crowded by Indian males sans families. You find Hindi as the lingua franca in these casinos. Segmentation of tourism market is a complex issue. It follows several approaches. The segmentation can be demographic, geographic, and psychographic. This could also follow segmenting on interests such as historical sites, spiritual tourism, wild life, heritage oriented. Promotion: Marketing and promotion go together. Promotion actually highlights the destinations suited the needs of the customer. The promotion can take place different routes: facilities, easy travel, amenities, promise of experience and fantasy. The vehicles used for promotion are several and change with technologies of the time. Internet and websites have emerged as the main vehicles. Word of mouth publicity continues to tower. HRM and Marketing sub-system The sub-system has the highest need of trained human resources. Tourism service supplier caters to a number of services related to tourism. The tourism promoters can be found as tour operators, travel agents, tourist boards 262 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

264 and as tour guides. It covers provisions of transportation, accommodation suiting the pocket of tourists, serving food and beverages, entertainment, and as tour guides at destinations. The last mentioned in it is a high variety occupation. It covers historical places, safaris to wild life, visits to religious places, attractions, places of cultural impacts and several more. The tour operation and the occupation of tour guides need training, exposure to history, knowledge about the sites, habits of the wild life and more. A specialization is now emerging in this profession. A successful tourism operator is one who has knowledge of consumer characteristics or what can be called as consumer behaviour. This calls for grounding in basic aspects of human psychology Quality Sub-system The objectives of providing tourism service are to generate customer satisfaction. Services in tourism are essentially intangible in character. These also cannot be inventoried and preserved for future usage. Besides satisfaction of a customer implies fulfillment of his specific needs, which may vary from person to person. Unlike physical products, it is therefore difficult to define quality in the context of tourism. Cook et al ( 2007) refer that additionally hospitality, an essential component of tourism cannot be separated from Quality of tourism. The two factors are once again linked to perceptions of customers; actual service received as against expectations carried by the customers. The comparison or the gap between the two determines the level of customer s satisfaction. A delighted customer is a valuable customer who passes on the word of praise to other customers indecisive to take to travel. Recourse is often taken to PZB Model or the instrument of zones of tolerance to carry out evaluation. H RM and Quality Sub-system HR is once again the focus to deliver quality and customer satisfaction. A professionally qualified and trained service provider becomes a change agent and creates learning organization dedicated to continuous improvement. A tourism organization achieves excellence through encouraging its employees to achieve organizational excellence. It selects right type of people with positive attitude and service attitude, teamworkmanship, flexible approach, willingness to help people in need, trains and develops them imparting soft skills. It encourages them to actively participate, support and work in teams, empowers the teams to make decisions and carry on improvements. It is a committed employee which can generate customer satisfaction. External Environment Sub-System External Environment as a sub-system envelops the other sub-systems. In other words the external environment (EE) sub-system creates an overall boundary under which the sub-systems operate. EE is referred to in terms of applicable political environment, economy, technology, and general cultural aspects of the society it envelops. The political environment determines the law and order situation, the respect for authority and trust for the visitors. Economy refers to the state of prices, availability of products and indirectly affordable travel friendly environment. The cultural aspects of the people refer to attitude of the people at large, adjustability to diversity of social practices and behaviour. The level of education, exposure to technology and belief in rationality and scientific practices is another dimension of the culture 263 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

265 HRM and External Environment Labor market changes Technology Society Examples of the Dynamic External Environment of HRM Economic Customers Shareholders E E as represented through culture of its people has a profound impact on tourism. It can transform tourist satisfaction to delight. Another culture can convert satisfaction to disastrous dissatisfaction with tourist taking a pledge never to return. Two examples from the authors personal experience are worth narrating (given below) Back in early seventies it was my first visit outside my homeland India. As a young employee of ABB, I was deputed to ABB s then headquarters at Baden-Swirtzerland for a training of three months. It was the first day. As I waited at the bus stand to catch a local bus to ABB s office, a young student of age 5-7 came up to the busstand apparently to catch his school bus. He wished me a polite Gutes Morgan. Nothing unusual! Followed more students possibly 20 of them who came in singles, twos or threes. And individually one by one each wished me Gutes Morgan. I was amused, surprised and confused. I looked at my dress. Did I look some prince from India or a dignitary or a celebrity? I could not discover any answer. As I reached office I narrated this episode to a friend of mine, an Indian married to a Swiss girl and settled since long in Switzerland. I confronted him, Look I did not know any one of those young scholars. Neither had they known me. Why were they so courteous to me? My friend looked at me amusingly and explained, Yes it is true you did not know any one of them. But you are wrong in your second observation. Every one of the school kids knew you. I looked at him quizzically. He went on, Every single of them knew that you were a tourist in Switzerland and it meant that you were their bread and butter. You were precious for them and most welcome. You would continue to get this welcome of politeness, courtesy as long as you would be here. It is a part of Swiss culture towards the tourists. 264 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

266 That is the impression I carry about Switzerland and should have spoken in superlative terms hundreds of times. In late nineties I had to visit Singapore with my wife and daughter, then studying medicine, as tourists. That evening we took a trip of night safari, Singapore s absolutely marvelous, well planned unique offer to see the nocturnal animals in their original habitat. It was past midnight when were returning to our hotel. We were gaga over the safari s silent train and muted commentary telling the tourists about the nocturnal habits of various animals. Tired as we were, we quickly walked out of the cab after settling the bill. Once at the hotel counter to claim our room key we realized that our costly camera was missing. Our faces went pale. From our hushed conversations in Hindi and English, the reception desk hostess realized that something was amiss. She came up, Sir you do not have to worry. You are in Singapore. In half an hour maximum, when the cab driver discovers your camera in his cab, he would be here. Needless to point out that we got our camera in less than fifteen minutes. The cab driver declined to accept any reward /or tip in return. That is the power of attraction Switzerland and Singapore exercise on tourists to come again and again. Government of India has opened up few vocational colleges and institutes to cater to the development of human resources specifically for the tourism sector. For example, the National Council of Hotel Management and Catering Technology runs institutes for hotel management and food craft training. The HRD planner of an organisation in tourism should always remember that: 1) Tourism is the service industry sector which has maximum human interaction. The skills taught should be more to do with the dealing of human nature and behaviour and less of the technical type for those who are directly dealing with the clients. Even the technical staff should have some knowledge of dealing with the clients, 2) The subordinates of today are the managers of tomorrow. Some autonomy has to be accorded to them to handle the day to day working. The decision making capabilities have to be developed so that they are more decisive and confident, 3) The managers are not only to look at the profit making of the company but also to check the working of the subordinates. The work atmosphere has to be handled accordingly so that a congenial atmosphere exists and the employees work productively, 4) The supervisors and managers also have to check the career development, counselling, performance monitoring and appraisal of the subordinates (you will read about these topics in course MTM-3). The regular update of employees are required so as to decipher their work pattern and productivity. A supervisor should be adept to handle all these and more. 5) That all the employees are human beings and concern should be shown to their well beings both psychological and physical. CASE STUDY 360-DEGREE FEEDBACK ON THE INTERNET Performance appraisal systems serve many purposes such as providing formal feedback to employees on how they stack up with respect to the organization s performance standards serving as Input for compensation decisions identifying areas in which future development Is needed reinforcing good performance providing input for promotional decisions and establishing the documentation needed to justify termination of employment Nonetheless while performance appraisal is one of the fundamental activities in human resources it has always been a lightning rod for criticism and has recently come under renewed attack. Sonic criticisms of traditional performance appraisal systems, in which supervisors appraise subordinates, are that they frequently do not provide good assessments of managers. More specifically traditional performance appraisal systems often do not provide accurate evaluations of opportunistic managers who take advantage of their own subordinates in order to enhance their superiors perceptions of their own performance. For example 265 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

267 such managers may not give credit where credit is due such as to employees lo may have created an innovative process that helped improve the in its productivity instead they may attribute improved performance to their managerial skills and take the credit or themselves. With this background in mind, there is much to be learned from the experiences of the Otis Elevator Company. The company had concerns that its old paper- based performance appraisal system was too slow and cumbersome. There were also concerns about whether the raters could be assured of the confidentiality of their ratings. Because of these problems the company wanted a better system for appraising and developing the performance of its engineering managers. Specifically the company was interested in enhancing these managers' project management and project team leadership skills. The engineering managers needed substantial improvement In their skills, and the company wanted a performance appraisal system that would provide feedback from the managers subordinates peers and customers as well as their direct superiors. Given these concern it is not surprising that Otis Elevator decided to develop a 360 degree feedback system With 360 degree feedback systems superiors peers and subordinates evaluate managers The innovative aspect of the company's approach top the 360-degree system is that the company decided to base the system on the Internet and its own intranet. An independent contractor E- Group developed and handles the collation and analysis of the feedback information. E-Group chose a 75-item survey called LEAPS which measures seven dimensions of leadership for the 360 degree Instrument. The instrument was loaded on a web site so that all raters can pull up the Information and complete the appraisal in approximately 20 minutes. After completing the appraisal they simply submit the results via- to E-Group to process. Because the system is encrypted the company is able to provide greater confidentiality and anonymity for the raters than with the previous paper-and-pencil system. In addition the LEAPS Items, the company included a fairly large set of other Items to assess managers technical competency and their contributions to the business E-Group was able to province appraisal profiles for the managers within three days after the last of evaluators e mailed their Input for the manager In addition the profile of actual ratings for each manager from E Group also includes an ideal leadership profile developed by Otis executives By comparison of his or her actual ratings with the ideal profile managers can identify areas for future development Otis Elevator chose to use the system only for developmental purposes although recently it began to consider other purposes for the system. BENEFITS OF SERVICE INDUSTRY TO A REGION EMPLOYMENT GENERATION As Service industry is labour intensive, the focus on the development of this industry would be a successful effort to generate direct, indirect and induced employment opportunities as well as equipping the youth for entrepreneurship activities and encourage them to set up their own ventures. This would also spur the growth of the private enterprise in the region. PROMOTION OF SERVICE INDUSTRY IN THE REGION Development of a region starts from the development of the human resource; their training and attitude would make a key difference in planning, developing, promoting and marketing of the region. At present, the service sector has not made any significant contribution to the region. SOCIO-ECONOMIC DEVELOPMENT The training for and development of the Service Industry would be an innovative beginning to reduce unemployment, especially of the educated youth in the region. This industry is capable of being primarily focused on rural areas with appropriate low-cost programs having extensive forward and backward linkages. INTEGRATION OF ECONOMIC DEVELOPMENT Various sectors (primary, secondary, & tertiary) of the economy such as agriculture and vegetation production, dairy and poultry farming, industrial development and manufacturing of products required in hotels, resorts, clubs, health and herbal resorts, cottage and handicraft industry, adventure sports, entertainment and recreation and for other activities will also get a boost. Bamboo and forest based products will also get a further advancement. 266 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

268 CONTRIBUTION TOWARDS INFRASTRUCTURE DEVELOPMENT The growth of the Service Industry especially the tourism sector, would act as a catalyst for developing new tourist destinations and help in revamping existing destinations, with the provision of infrastructure facilities such as airports, roads and rail network, bridges, waer and electricity supply, sewerage, ropeways and other such amenities. COMMUNITY INVOLVEMENT The Service industry to a large extent depends on local resources and support from the local communities leading to all round development of the area infrastructure and prosperity of people residing there. REMOVAL OF REGIONAL IMBALANCES Development of Service industry also helps in reducing regional disparities as the local rural population finds jobs like the manufacturing of products and Service from basic amenities to arts, crafts and entertainment. This also helps in effectively retarding the exodus of the rural workforce to urban areas. OVERALL MULTIPLIER EFFECTS TO REGIONAL ECONOMY The Service industry related ventures have a very high multiplier effect in employment and income generation in terms of remittances, local capital generation, demonstration effect on other youth, besides integrative benefits. One direct job creates 11 indirect jobs in Service industry. This amount would be further multiplied generating a large number of indirect and induced job opportunities giving a boost to the local economies. Applying HRD Policies to North East Region: The North East is a true frontier region. It has over 2000 km of border with Bhutan, China, Myanmar and Bangladesh and is connected to the rest of India by a narrow 20 km wide corridor of land. One of the most ethically and linguistically diverse regions in Asia, each state has its distinct cultures and traditions. The lushness of its landscape, the range of communities and geographical and ecological diversity makes the North East quite different from other parts of the subcontinent. In winters, mist carpets the valleys but swirls around the traveller in hills during summer rains, thus creating an enchanting and romantic atmosphere. The region has borders with Myanmar Bhutan and Bangladesh. North East India comprises of eight states commonly known as the Eight Sisters (Earlier called as Seven Sister state). They are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,Tripura and Sikkim. 267 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

269 Northeast India is the eastern-most region of India connected to East India via a narrow corridor squeezed between Nepal and Bangladesh. It comprises the contiguous Seven Sister States Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura and the Himalayan state of Sikkim. These states are grouped under the MDONER ministry of the Government of India. Except for the Goalpara region of Assam, the rest were late entrants to political India the Brahmaputra valley of Assam became a part of British India 1824, and the hilly regions even later. Due to cultural and historical reasons parts of North Bengal (districts of Darjeeling, Jalpaiguri, and Koch Bihar) are often included in Northeast India. Sikkim was recognized as a part of North-East states in the 1990s. The Siliguri Corridor in West Bengal, with an average width of 21 km to 40 km, connects the North Eastern region with the mainland Indian sub-continent. The region shares more than 4500 kilometres of international border (about 90 per cent of its entire border area) with China (South Tibet) in the North, Mayanmar in the East, Bangladesh in the South-West, and Bhutan to the North-West. The North East of India constitutes the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. Flanked by hills and with the mighty Brahmaputra river slashing a central path between its north and south, the North East is bounded by the States of Manipur, Meghalaya, Mizoram, Nagaland, Tripura with Assam comprising the heart. Arunachal Pradesh lies to its north and Sikkim a little away in the North West bordering China and Bhutan. Bangladesh and Myanmar lie to its southwest and east. The torrential Brahmaputra deposits its rich alluvial silt along the banks of the plains of Assam. Tropical rain forest, rich in flora and fauna, spread their arms across Arunachal Pradesh into Assam. It is a land where tea is an industry, handicrafts a major occupation and martial arts a favoured sport. The western side of the North East is connected to the eastern part of the Indian subcontinent by a narrow land corridor, sometimes referred to as the Siliguri Neck or "Chicken's Neck". The eight states that comprise the region reflect ecological and cultural contrasts between the hills and the plains; there are also significant elements of continuity. Available medieval and modern records indicate interdependence and interaction between the hills and plains. The North East is one of the most biodiverse regions in the world. The forest cover varies but average 65 per cent is government owned. Village communities, individuals and chiefs own the rest. The area can be divided into three geographical divisions-the Shillong Plateau, the North Eastern hill Basin and the Brahmaputra Valley. The economy of Northeast India has got its definite identity due to its peculiar physical, economic and sociocultural characteristics. This region consists of eight states viz., Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim. The NER of India covers an area of 2.62 lakh sq. km. It accounts for 7.9% of total geographical area of the country. With a total population of 44 million (Census 2011), it accounts for 3.65% of total population of India. International Boundaries: North South West North West East China Bangladesh Bhutan Myanmar The Macmahon line separates North East India from Tibet. This region is connected with the rest of India only through a narrow corridor in North Bengal, having an approximate width of 33 km on the eastern side and 21 km on the western side. This narrow corridor is popularly known as the "Siliguri neck" or the "Chicken's neck". Latitude : N N Area covered : Sq. Km Longitude : 88 E E 268 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

270 North East India is mostly hilly; it has plains on both sides of the river Brahmaputra and the Himalayan range around it. The flora and fauna of this region is numerous and varied. ECONOMY OF NORTH EAST REGION NE is predominantly an agrarian region with more than 70% of its population engaged in agriculture. The region has a very weak industrial sector since basic facilities, which would help in setting up heavy industries, or manufacturing units are inadequate. Although much is being done to improve the same, it may still take some time to catch up with the rest of the country on account of its topographical constraints, which inhibit rapid industrialization. AGRICULTURE Agriculture and its allied activities is the main stay of the North East Economy. Despite a large geographical area, the land available for cultivation is limited. The percentage of cultivable area over the geographical area in most of the NE State (24.69 %) is less than the national average (59.22 %). The percentage of cultivable area over the geographical area is highest in Meghalaya (47.88 %) and lowest in Arunachal Pradesh (3.50 %). Except Arunachal Pradesh, no other state in the region is self-sufficient in food grains. INDUSTRY: The region is industrially backward and petroleum, coal, electricity, is the only large-scale productive industries here. Oil and electricity industries are highly capital intensive. The principal manufacturing industries are a few: plywood, cement and match factories and all over are classed small scale and cottage industries. INFRASTRUCTURE The region has a mixed level of infrastructure. Assam, the biggest economy of the region is not very far behind the national average. The CMIE index of infrastructure gives it 93 points compared to the national average of 100. However, the other states are far behind, except Tripura. The region has about 6% of the national roads and about 13% of the National Highway. Except for Assam, the railway is almost non-existent in other parts of the region. Infrastructure like telecommunications, power, have a long way to go yet. Human Resource Development Projects of North East Council Backgrounder The North Eastern Council (NEC) is the nodal agency for the economic and social development of the North Eastern Region (NER). The Council s Secretariat had been functioning to bring expediate socio-economic development of the Region including Sikkim. Consisting of many Sectors such as Planning, Transport and Communication, Agriculture and Allied, Medical and Health, Power, Human Resource Development & Employment, Evaluation and Monitoring, Banking, Industries and Tourism, Information and Public Relations, Science and Technology and Irrigation and Flood Control, the NEC has taken up many developmental projects for overall development of the Region. In order to implement and complete the projects and programmes sanctioned by the North Eastern Council on time, without delay and cost overrun, the Council has taken concerte effort in monitoring and evaluation of the projects being implemented in different states and as a result of which more than 82 projects were inspected and assessed. The Ministry of Tribal Affairs, jointly with the Ministry of Development of North Eastern Region (DONER)/NEC, have initiated the works on construction of a 500 seats capacity girls hostel in Delhi University for girl students from the NER and other tribal girl students studying in Delhi University. Total cost of the project amounting to Rs crores is being shared between the NEC and the Ministry of Tribal Affairs on 60:40 basis, i.e., the NEC shares an amount of Rs Crores (60%) towards the project. Out of this amount, the NEC has so far released an amount of Rs crores. A 500-seater Working Women s Hostel in Jasola Delhi was constructed in association with the Ministry of Women and Child Development. Accommodation will be provided for the working women hailing from North 269 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

271 Eastern States. Total cost of the project is Rs crores, wherein the NEC s share is 25%. Land cost for the hostel is being shared in 50:50 ratio. NEC has released Rs.4.36 crores for construction and Rs.0.42 Lakhs for Furniture, Electricity, Water Supply etc. Pilot Project of sponsoring students in school has been taken up and accordingly 23 students each for all 7 North Eastern States and two for Sikkim are being sponsored at Assam Rifles Public School, Laitkor, Shillong for Financial Year in class VI. Selection/Examination conducted by Assam Rifles in all the States after proper advertisement. Besides that, brilliant students and girl children and students from economically backward classes also need to be supported in schools and colleges. About 5,500 students have so far been benefited under this scheme during the last Financial year and equal number, if not more, are to benefit this Financial year also. The Youth to the Edge programme was taken up to promote integration and a sense of brotherhood in the country. This programme will help mitigate to some extend the notion of North East being a foreign country. More than thousand youth from rest of India will be visiting the North Eastern Region where combined adventure activities are being conducted to promote the spirit of brotherhood, adventure, environmental awareness, national integration, disaster management, promotion of adventure tourism, channelizing youth in a positive direction, sense of self-employment and self-recognition, etc. The programme will expose the youth to the Flora, Fauna, culture, livelihood, practices and to the people in general of the North Eastern State. It is to promote general understanding of the region and promote integration. To start with, three trails namely; Dzukou Velley in Nagaland, Roing and Hayuliang in Arunachal Pradesh are identified and more than nine hundred youth are already exposed under this programme. To encourage and develop sport talent in the region, the NEC had constituted the Chairman s Sport Award for Excellence on International and National Sport where Cash Awards are given to Medal Winners of Olympic, Asian Games, Common Wealth Games and National Games. This is a popular scheme amongst the Achievers and also act as an encouraging factor for the sport persons to perform better in the sport events. More than Rs crores were distributed to the medal winners of the recently held National Games at Jharkhand. It may be mentioned that the Manipur Stated had bagged 2nd highest medals next only to the services. To encourage football skills and inculcate the sense of competitiveness amongst the players, the Dr. T. A Football Tournament was constituted for the NE States to be held annually in the states on rotation. The tournament is aptly named after the legendary Barefoot Indian Football Captain and is a great morale booster for the players. In line with the skill development mission of the Union government, the NEC has sponsored many job Oriented Training programmes to cater to the need of unemployed youth in the field of computer hardware and software, BPO, Hair Style and Beauty Care, Banana Fiber Extraction, Ayurveda Therapist, Hearing Disability sector, adventure sports, CNC technology and Machinery Operation, Plastic Processing and Recycle, Retail Management, Automobile Repairs etc. These programmes are conducted for various levels of educational background including school drop outs who forms majority of the unemployed youths and who needs this value addition the most. More than 6000 youth have been trained with good placement report. These training programmes help develop their personalities and confidence of the trainees and also supplement the family income. To increase competitiveness among NER students for preparation in entrance examinations and Government job opportunities, the NEC has for the first time sponsored coaching programmes for various examinations. NEED FOR HUMAN RESOURCE DEVELOPMENT IN THE N.E REGION & ITS ADVANTAGE TO THE REGION Despite the fact that a Roadmap for Development of the NER has lately been prepared on the basis of the thrust areas identified along with policies and activities to be pursued by the North East Council, the fact remains that the overall economic growth in the region has been tardy on account of various historical and geographical factors such as its remoteness, insufficient infrastructure, poor connectivity with mainland, and the lack of peaceful environment. Regardless of the fact that the region is abundant in scenic beauty, bio-diversity, 270 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

272 cultural heritage, hydro- potential, oil and gas, coal, limestone and forest wealth the economy has remained stagnant. Major HRD initiatives in North Eastern Region Backgrounder 1. Government Policy for the North East 1.1 North Eastern Region (NER) comprising of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura are all special category States and the national planning and resource allocations impart a special emphasis on the economic and social development of the region. The development plans in the North East are centrally financed on the basis of 90% grant and 10% loan. 1.2 The Department of Higher Education has launched a number of schemes for the educational development in the region to be implemented through State Governments and through the agencies other than State Governments viz. autonomous bodies/ngos, etc. As per the instant Government orders, Department of Higher Education earmark about 10% of its Gross Budgetary Support (GBS) for implementing these schemes in the region. 1.3 The Planning Commission has approved the Plan outlay of Rs crore for for the Department of Higher Education. Out of this, an outlay of Rs crore has been earmarked for the North East. Setting up of Engineering and Management faculties in the North Eastern States: In order to tackle the problem of regional imbalances in access to higher education, wherever engineering and / or management faculty are not available, and such faculty has been sanctioned in one Central University in each State of the North East. Such faculty has also been sanctioned to one State University in those States of the North East, where there is no Central University. The Ministry has allocated over Rs crore for the universities of the NE region from the additional Rs crore provided by the Planning Commission under the National Common Minimum Programme (NCMP). II. LANGUAGE DIVISION. 1. DEVELOPMENT OF HINDI LANGUAGE: Development of Hindi language is undertaken in the North East Region through Central Hindi Directorate (CHD) and Kendriya Hindi Sansthan (KHS), Agra. The Central Hindi Directorate is a subordinate office of Ministry of Human Resources Development. The objective of the Directorate is propagation and development of Hindi as a link language. The Directorate has its centre at Guwahati. The Kendriya Hindi Sansthan is an autonomous organization of the Ministry of HRD. The objectives of the Sansthan is to improve the standards of teaching of Hindi at various levels. The Sansthan conducts Hindi Language Teaching and Training Programmes by applying the latest methodologies of language learning and teaching. It has centers at Guwahati, Shillong and Dimapur. Guwahati Centre covers the states of Assam, Manipur, Arunachal Pradesh, Tripura and Sikkim states. Shillong Centre covers Meghalaya, Tripura and Mizoram states. Dimapur Center covers Nagaland and Manipur states. Short terms courses for imparting knowledge of Modem Methodologies of Language Teaching to the in-service Hindi teachers and workers of Voluntary organizations engaged in Propagation of Hindi and Hindi Teaching and Training are regularly conducted by these centers. 271 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

273 2. CENTRAL INSTITUTE OF INDIAN LANGUAGES (CIIL), MYSORE: The Central Institute of Indian Languages was established to help evolve/implement the Language Policy of the Government of India and coordinate the development of Indian languages by conducting research in the areas of language analysis, language pedagogy, language technique and language use in society. It has a Regional Centre at Guwahati. The following are the other NER programmes: Two workshops on revision of Mother tongue text books in 17 tribal languages recognized in schools were organized at Kohima, Nagaland. In Assam, one workshop on teaching tribal mother tongues was organized at Guwahati, one at Kokrajhar and two in Silchar. The other activities included preparation of a Pictorial Glossary of Kok Borok (Tripura), Monpa (Arunachal Pradesh) and Kuki Chin Languages (Manipur). Over 30 resource persons of Northeast region were trained in the 40-day Summer School of Linguistics organized in May-June at Mysore. In addition, the institute, in collaboration with the North-Eastern Hill University (NEHU), is organizing a programme called NEWSOL-North East Winter School of Linguistics to train 150 Resource persons in language analysis and language documentation. Seminars on issues related to development of script and understanding the linguistic scene in Northeast India were conducted at Shillong, and Workshops on preparation of multilingual dictionary viz-bodo, Brishnupnya Manipuri, Tiwa, Rabha, Deori, and Misin were also held. 3. PROMOTION OF URDU LANGUAGE: The National Council for Promotion of Urdu Language is an autonomous organization for promotion of Urdu Language through various schemes such as those of Calligraphy Training Centres, production and publication of books and schemes for correspondence courses in Urdu. The various activities have been undertaken for development and promotion of Urdu Language in the North East Region under the approved scheme. One Year Diploma in Computer Application and Multilingual DTP to give technical education to Urdu speaking boys and girls for getting employment in IT field. To promote classical languages Arabic and Persian and to preserve cultural heritage of India, 10 Arabic Study Centres were established NER to impact Two year Diploma and One-year Certificate course in functional Arabic. 4. SCHEME OF APPOINTMENT OF LANGUAGE TEACHERS: The scheme has three component:- 100% financial assistance to State/UT Government for salary of Appointment of Hindi Teachers in the Non- Hindi speaking States. 100% financial assistance to the State/UT Government for Appointment of Urdu Teachers and Grant of Honorarium for teaching Urdu. 100% financial assistance for appointment of Teachers in other languages. OVERVIEW OF EDUCATIONAL INFRASTRUCTURE IN NORTH EAST Unemployment problem is to be viewed both for educated unemployed youth and the unemployable educated youth. All our efforts will have to be geared towards developing quality human resource who in fact, is the real wealth to the region as well as of a nation. In this regard following could be the parameters: 272 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

274 Linking training with employment generation Initiating career counseling and guidance for the masses and not for classes so that a wide awareness could be created as far as possible. Grass root awareness Using all types of resource material such as a high tech gadgets and multimedia equipment. Launching of Pilot Projects in each NE State for creating an awareness of the vast potential the burgeoning Service Sector offers and grooming and educating the youth, especially the graduate youth for avenues in this sector. Preparing the youth for jobs, which the prospective opening of the region to the east through Myanamar and Thailand has to offer. One point on which the region scores over most other states of India is relatively high literacy rates. The State of Mizoram is next only to Kerala. Although no one can deny that the region has done well in education because of many socio-historical factors, the importance of literacy factor should not be overemphasized. CASE: Analysing a recent study on Kerala s unemployment scene, its rate at 20.77% continues to be among the highest in the country. This problem is aggravated by the widening gap between the skill-sets available in Kerala and those required by the market. Taking in consideration the above case, the high literacy rate in most states of northeast does not ensure adequate employment opportunities. Some states like Mizoram, Nagaland, Sikkim and Manipur have very high literacy rates but the largest State i.e. Assam is only at the average national level. Arunachal Pradesh has the lowest literacy rate in the region. As a result, the combined literacy rate of the region is 68.75%, which is above the all India figure of 65.38%. However, although the literacy rate of most states of the north east are averagely higher that the average literacy rate of India, the youth in these states are either involved in jobs requiring unskilled labour or semi skilled labour. EDUCATIONAL INSTITUTES IN NORTH EAST STATES The table below shows a summary of the educational facilities available in the North East region. TYPE TRIPURA MEGHALAYA MANIPUR MIZORAM NAGALAND ARUNACHAL PRADESH ASSAM UNIVERSITY IIT 1 ENGINEERING COLLEGE MEDICAL COLLEGE GENERAL COLLEGE JUNIOR COLLEGE AGRICULTURE COLLEGE LAW COLLEGE 9 VETERINARY COLLEGE I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

275 HIGHER SECONDARY SCHOOL HIGH SCHOOL MIDDLE SCHOOL PRIMARY SCHOOL PRE-PRIMARY SCHOOL INDUSTRIAL &TECHNICAL SCHOOL POLYTECHNIC TEACHER TRAINING COLLEGE SCHOOL FOR HANDICAPPED CURBING THE UNEMPLOYMENT PROBLEM IN NORTH EAST REGION By the beginning of 1990 s, most of the states in the region had reached a level of development, which required total reorientation both in terms of the structural management and dependence on public investment. It required injection of newer policies for the growth of tertiary sector both state and private owned; and rejuvenation of the secondary sector particularly in the industrial activities based on indigenous resources. All these if thought out, floated and implemented in time the employment situation would be much better in the late 2000 s. The employment crunch has now gradually gripped the entire North East and has started showing its social, economical and political fangs. The hope lies in developing the service sector Below is a tabular depiction of the existing scenario in North East India, with an understanding of its strengths and weaknesses, and a conclusion on the action plan through which NE region can be brought at par with 274 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

276 mainstream India and also develop the region providing employment opportunities for the large number of unemployed youth in the region. EXISTING SCENARIO IN THE NORTH EAST SWOT Analysis STRENGTHS WEAKNESSES AN AGRARIAN ECONOMY STRONG EDUCATIONAL INFRASTRUCTURE HIGH LITERACY RATE RICH IN NATURAL RESOURCES RICH IN CULTURAL HERITAGE LOW POPULATION DENSITY INADEQUATE INFRASTRUCTURE & COMMUNICATION SERVICES FEEBLE INDUSTRIAL SECTOR POOR CONNECTIVITY WITH MAINLAND LACK OF ENTREPRENEURSHIP LACK OF EXPOSURE TO YOUTH LACK OF SKILLED MANPOWER OVERDEPENDENCE ON GOVERNMENT INSURGENCY - IMAGE PREDICAMENT NEED OF THE HOUR TO CREATE IMMENSE AWARENESS ABOUT EXISTING SERVICE RELATED CAREER AVENUES TO OFFER NEED BASED HUMAN RESOURCE TRAINING MATCHING PRESENT SERVICE INDUSTRY REQUIREMENTS TO GENERATE EMPLOYMENT OPPORTUNITIES FOR EVER GROWING NUMBER OF EDUCATED UNEMPLOYED YOUTH TO ENCOURAGE YOUTH FOR ENTREPRENEURAL VENTURES BENEFITS TO NE REGION DIRECT EMPLOYMENT OF UNEMPLOYED, EDUCATED YOUTH DEVELOPMENT OF ENTREPRENEURSHIP VENTURES INDIRECT EMPLOYMENT IN THE REGION PROMOTION OF SERVICE INDUSTRY IN THE REGION SOCIO-ECONOMIC DEVELOPMENT IN THE REGION OVERALL MULTIPLIER EFFECT TO REGIONAL ECONOMY COMMUNITY INVOLVEMENT REMOVAL OF REGIONAL IMBALANCES IMAGE BUILDING OF THE REGION THIS ALL WOULD CONTRIBUTE SUBSTANTIALLY TO OVERALL DEVELOPMENT OF SERVICE AND TOURISM INDUSTRY IN THE REGION 275 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

277 After identifying the possible sectors and the skills required for employment herewith, a set of the following skills have been identified which are already a hallmark of the youth of the North East: Assertive Adaptable Positive Outlook Cheerful demeanour Willing to relocate Flexible Extrovert Confident Eager to learn and adopt new technology Knowledge of English language. Along with these traits, there is need to develop some skills which would enable the youth to carve a niche in the Service Sector. These are: Communication skills Organisational skills Interpersonal skills Selling skills Computer Literacy Applying HRD Policies to North Indian Region PUNJAB Punjab or 'the land of five rivers' is one of India's richest and most colourful states. Punjab is one of the only two states in the country, which share a capital city (the other is Haryana). The city of Chandigarh was designed by the French architect Le Corbusier and built in Historically, Punjab lay at the crossroads of the great empires of the world. Many great religions like Budhism, Sikhism, and many schools of Sufi thought in Islam movements found world-wide, grew in the fertile plains of Punjab. Punjabi civilization is one of the oldest on earth, with its distinguished language, culture, food, attire, script, folklore, people, etc. Punjab has always been land of great saints and fighters. The present day Punjab is situated in the northwest of India. It is bordered by Pakistan on the west, the Indian states of Jammu and Kashmir on the north, Himachal Pradesh on its northeast and Haryana and Rajasthan to its south. Most of Punjab is a fertile plain; toward the southeast one finds semi-arid and desert landscape; a belt of undulating hills extends along the northeast at the foot of the Himalayas. Four rivers, the Ravi, Beas, Satluj and Ghaggar flow across the state in a southwesterly direction. HARYANA Haryana is described as the Land of Mahabharata,came into being on November 1st Haryana can be divided into two natural area sub-himalayan Terai and Indo-Gangetic plain. The plain is fertile and slopes from north to south with a height above the sea level, averaging between 700 and 900 ft. South-west of Haryana is dry, sandy and barren. 276 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

278 CHANDIGARH Chandigarh was constituted as a Union Territory on 1st November It is bounded on the north and west by Punjab and on the east and south by Haryana. Even though the city serves as the capital of both these states, it is itself administered by the Union Government. The birth of this modern, happening city was an act of anguish and drama that took place at the time of partition of India and Pakistan. Lahore, the earlier capital of Punjab merged with Pakistan and Chandigarh was conceived to be a symbol of India s freedom. The task of designing the city fell on the shoulders of renowned French architect Edouard Le Corbusier Jeanneret who created Chandigarh as a city of Sun, Space and Verdure to fulfill basic functions of working, living, and care of body and spirit. Today, the city is home to more than half a million people living in harmonious conditions that are considered to be the best in the country. UTTARANCHAL Uttaranchal became the 26th state of India on 1 November After being carved out of Uttar Pradesh. Uttaranchal is also known as Dev Bhoomi (Land of Gods and Goddesses) because of the many sacred Hindu sites situated here. Prominent among these are Badrinath, Kedarnath, Gangotri (the place where the holiest river of the Hindus originates) and Yamnotri. Religious significance apart, Uttaranchal is also a major tourist destination having some of the most visited hill stations of the country. Uttaranchal shares international borders with Nepal to the east, while the lower Himalayas separate China in the north. The states of Haryana and Himachal Pradesh border it in the west and northwest respectively. The hilly regions of Kumaon and Garhwal have been known as Uttarakhand since the time of the Puranas (ancient Hindu scriptures). HIMACHAL PRADESH Himachal Pradesh is named after the Himalayas that rise in the state. Himachal literally means "snowy mountain" (hima - 'snow', acal - 'mountain'). The beautiful terrain of this region offers many pleasant sites of lofty mountains, hills, green valleys and flowing rivers. Himachal is one of the least urbanized places in India and about 80 percent of the people are engaged in agriculture. Himachal Pradesh, located in Northern India, share its border with Jammu and Kashmir in North, Punjab in West and South West, Uttar Pradesh in South east, Tibet in east, and in the South by Haryana. JAMMU & KASHMIR The state of Jammu & Kashmir is the northern most state of India. The state is broadly divided into three main regions i.e. Arctic Gold Region, Salubrious Kashmir Valley Region and Sub-Tropical Jammu Region. Jammu & Kashmir is vested with a good mineral base, substantial water resources, and is famous world-over of its handicrafts, handloom products, tourism, horticulture produce and cottage industry. Jammu and Kashmir is known as one of the most beautiful places in the world. Indeed this land of soaring snow-clad mountains, sparkling waterfalls with their beautiful shikaras (water taxis), tall chinar trees and beautiful gardens has an almost picture postcard beauty. The state is also known for its handicrafts production with its beautiful carpets, shawls and other woollen items. J&K has always maintained its position in producing excellence in tradition and culture. Besides the natural beauty and rich tradition, it has the wealth of most valuable agriculture and horticultural products. RAJASTHAN Rajasthan is one of the most fascinating regions of the world, one of the oldest civilizations with an extremely rich cultural heritage. Today, it is one of India's top performing regional economies. Rajasthan is bounded by Pakistan in the west and north-west; by the State of Punjab in the north; by Haryana in the north-east; by Uttar Pradesh in the east, by Madhya Pradesh in the south-east and Gujarat in the south-west. Its north-western and western regions, comprising 11 districts covering 61 per cent of the total area and 40 per cent population of the State, form the "Great Indian Thar Desert". 277 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

279 The Aravali mountain ranges that run from Delhi to Gujarat cut through the State almost vertically. The Aravali ranges divide the State through south-east and north-west. The north-west region covering two-thirds of the State consists mostly of a series of sand dunes. The eastern region has large fertile tracts. A VIEW OF FACTS OF THE NORTH INDIAN STATES: * Chandigarh stands 1 ST among the U.T. in terms of the Per Capita Income ECONOMY OF THE NORTH INDIAN STATES AN OVERVIEW: The states in the northern region vary in topography and economic development. Whereas Punjab, Rajasthan and Haryana are progressive states prospering in agriculture and industrial development. The Himalayan states of Himachal Pradesh, Uttaranchal and Jammu and Kashmir have not been able to develop themselves industrially on account of topographical constraints and having dependent agrarian population. However, these states are endowed with natural and cultural resources, which these states have been harnessing for socioeconomic development of the people. Although Haryana s contribution of Service Sector to the GDP is 42% and Chandigarh s more than 80%, other states in this region have not been able to tap the potential of the Services Industry in creating employment and income opportunities and consequently to their GDP. PUNJAB Punjab is the cradle of the Indus Valley Civilization, more than 4000 years old. Area: 50,362 square kilometers (Punjab occupies 1.54 % of the country s total geographical area.) Location: Punjab is situated in the northwest of India, bordered by Pakistan on the west, the Indian states of Jammu and Kashmir on the north, Himachal Pradesh on its northeast and Haryana and Rajasthan to its south. Capital: Chandigarh Major Land Features Most of Punjab is a fertile plain; toward the southeast one finds semi-arid and desert landscape; a belt of undulating hills extends along the northeast at the foot of the Himalayas. Four rivers, the Ravi, Beas, Satluj and Ghaggar flow across the state in a southwesterly direction. Supported by seasonal tributaries. In addition, Punjab is watered by an extensive canal system. Education: The state has approximately 41 engineering colleges, 15 pharmacy colleges, 46 management and computer science institutes and over 170 industrial training institutes, including those in the private sector. Every year about 17,640 engineers and close to 3 1,689 technically qualified individuals graduate from Punjab s industrial training institutes. Punjab A gearing hub for biotechnology. Punjab has five leading biotech institutions that produce 200 graduates and 100 postgraduates and doctorates in the field of biotechnology/ bioengineering. These institutes are: The Punjab State Council for Science & Technology (PSCST) Punjab Agriculture University (PAU), Thapar Institute of Engineering & Technology (TIET), Institute of Microbial Technology (IMTECH) Postgraduate Institute of Medical Education & Research (PGIMER). The state also has a network of 205 hospitals and 2,037 health centres. 278 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

280 Agriculture Agriculture is the mainstay of Punjab s economy and 97 per cent of the total cultivable area is under the plough. Main crops: wheat, rice and cotton. Priority is being given to sugarcane, oil seeds, horticulture and forestry. Percentage contribution to Central Pool Wheat: 64.1 % Rice: 42 % Cotton: 20%. Per capita milk and egg production is highest in the country. Road Network: Total Road network 47,605 km All cities connected by National Highways. All major towns of adjoining states connected by National Highways. Percentage of villages connected by metalled roads 97% National Highways: 1000 km State Highways: 2166 km Major Distt. Roads: 1799 km Other District Roads: 3340 km Link Roads: km Airports: Punjab has an international airport at Amritsar and domestic airports at Chandigarh and Ludhiana.The airport at Amritsar has an air cargo complex, while Ludhiana has an inland container depot. Container freight stations are also planned at Jalandhar, Ludhiana, Power: Power is pivotal to Punjab s industrial and agriculture sectors and the state has been working towards expanding and strengthening its power infrastructure to meet the increasing consumer demand in various sectors of the economy. The State Government has signed Power Purchase Agreements with a number of power generating agencies through Power Trading Corporation, National Thermal Power Corporation (NTPC) and National Hydroelectric Power Corporation (NHPC). Punjab has an installed electricity generation capacity of 4,452 MW (2004). Over the last decade electricity consumption has increased 5 per cent per annum on an average Composition of Electricity Consumption in Punjab 279 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

281 Punjab State Electricity Board (PSEB) has planned an additional capacity of 2,277 MW during the Eleventh Five-Year Plan period. Two major electricity generation projects under implementation are GHTP Lehra Mohabbat and the Bharat Heavy Electricals Ltd (BHEL). Hydro Project. Together these will generate 518 MW of power. PSEB intends to enter into a joint venture with the Gas Authority of India Ltd (GAIL) to set up a 1,000 MW gas plant near Doraha at a cost of over US$ 851 million. A Memorandum of Understanding (MoU) with NHPC is also on the anvil to initiate the process of implementing the 168 MW Shahpur Kandi Hydel Project. Industrial infrastructure Average growth rate - 10% (highest in the country), Punjab also boasts a 58% literacy rate and the highest per capita income in India. Small and medium industries lakhs Large-scale industries It leads in the manufacture of machine and hand tools; printing and paper cutting machinery; auto parts and electrical switchgear. The state also provides more than 75% of the country s requirement for bicycles, sewing machines, hosiery and sports goods The Punjab State Industrial Development Corporation (PSIDC) has developed over 80 industrial estates, growth centres and industrial focal points in the state. These estates provide the units with basic infrastructure, which include uninterrupted electricity and water supply, sewerage and common roads. Punjab s key business and commercial centres are: Chandigarh - Mohali Chandigarh is the capital city of Punjab and the administrative headquarters of the Government of Punjab. Mohali is a twin township of Chandigarh and the hub for Information Technology/Information Technology Enabled Services (ITES), electronics and pharmaceutical industries. The State Government is actively pursuing proposals to set up an IT-based Special Economic Zone at Mohali. Ludhiana - Jalandhar Spread over 6,400 sq km Ludhiana - Jalandhar are two of Punjab s largest cities with a population of over five million. They also form Punjab s principal industrial hubs, dominated by textiles and light engineering goods industries. Ludhiana is the domestic leader in acrylic yarn and woollens and is gearing up for growth in knitwear exports in the post quota regime, especially as the Indian textile industry enjoys a zero excise status. Amritsar Under the Government of India s Industrial Infrastructure Upgradation Scheme, the state is developing two industrial clusters, at Ludhiana and Amritsar, to promote cotton and woollen textile exports respectively. These clusters involve an investment of US$ 11 million each. The State Government is also working out the modalities of setting up a General Product Zone in Amritsar. Punjab Apparel Park To offer superior infrastructure support to apparel export units, the State Government is developing the Punjab Apparel Park at Ludhiana. The park to be set up at the cost of US$ 75 million will be developed by the Apparel Exporters Association of Ludhiana (APPEAL) in collaboration with the Punjab Small Industries and Export Corporation (PSIEC). Spread over 100 acres, the park will be self sufficient in terms of infrastructure, with an effluent treatment plant and a 5-10 MW captive power plant. Pushpa Gujral Science City The State Government along with the Central Government is setting up the Pushpa Gujral Science City (PGSC), an international level science centre to encourage R&D in agriculture and promote agro-based industry. The institute will be spread over 71 acres and will be located on the Jalandhar - Kapurthala state highway. 280 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

282 Focal Points i.e. Industrial Park Punjab has set up 24 industrial estates at 18 locations provided with all the infrastructural facilities. The nodal agency for industrial park is Punjab Small Industries and Export Corporation Ltd, Udyog Bhawan, Sector 17,Chandigarh. Best Infrastructure in India: Punjab leads the nation in infrastructure. The Centre for Monitoring Indian Economy (CMIE) infrastructure index gives Punjab a rating of 191 highest in the country. Even the most industrially developed State of Maharashtra figures at a low level of 111 only, against the national average of 100. Infrastructure rating by Centre for Monitoring Indian Economy of Punjab is against the national average of 100 Highest per capita consumption of power in India kwh, About 2 times the national average. Even then the State Government is not complacent and keeping the expected increase in demand in view has taken major decision to expedite the new power projects. 500 MW Power Plant has been awarded to a private company, which will operate it on BOO basis. Two units of Guru Hargobind Thermal Plant of 210 MW each have been commissioned and it has been banned to further expand this thermal plant with two more units and MW will be available from Ranjit Sagar Dam & 168 MW has been planned from it in Shahpur Kandi. Besides that State Government is encouraging captive power generation by industry Excellent network of 1000 Km of National highways, out of which around 200 km of best 6 lane road with grade separation, and 95 km road length per sq km of area is highest in India. roads A big network of State highways and rural link roads making all villages approachable by all weather Well connected to all parts of India by fast speed trains Connected to New Delhi by 4 pairs of high speed Shatabdi trains (3 hours from Chandigarh. 4 hours from Ludhiana) Dense telecommunications network: even small villages have ISD connections Airports at Chandigarh, Amritsar and Ludhiana Cities of Punjab provides best of big and small cities. All facilities of metro available without congestion and pollution, small and well planned residential colonies of Amritsar, Jalandhar, Ludhiana, and Mohali and, Patiala can match best in India. Inland Container Depots or, Container Freight Station near all major industrial clusters Excellent educational and health facility available all over state Highest number of banks per capita 15 banks for every 10,000 people Excellent Financial Infrastructure available in Public and Private Sector. STRATEGIES FOR HRD IN NORTH INDIA Providing quality basic education, with a focus on increasing access by all groups to basic education and increasing levels of educational attainment for the population as a whole Enhancing the skills of managers, entrepreneurs, and educators/trainers in key sectors; Supporting the training needs of small and medium-sized enterprises (SMEs) and the management of sustainable growth and development Promoting and developing lifelong learning as a means to both meet rapidly changing skill needs in the economy as well as individual needs for adjustment and upgrading of education, vocational training, professional and technical skills, and management development Increasing quality of curricula, teaching methods, and instructional materials in education, training, and skills development at all levels, with a particular focus on preparing for the transition to the 21st 281 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

283 century (i.e. from basic education, through vocational and technical skills training, to professional and executive development for management of change) Facilitating mobility of qualified persons to help meet skill shortages by developing means for mutual recognition of skills and qualifications, and to increase opportunities for people to gain the skills required for the economic growth and development of member economies and the region as a whole Enhancing the quality, productivity, efficiency, and equitable development of the labour forces and work places in member economies Strengthening co-operative action by public, and business/private sectors, educational and training institutions. Paying attention to the diversity of experiences and situations in the region in designing approaches to human resources development. Training the youth for taking up placements in the emerging outsourcing businesses. The Government should provide incentives to the major hotel chains to set up their properties in the region, thus providing employment and training to the youth. Insurance companies can be invited to cater to the vast populace of Punjab and also provide employment to the people. Setting up vocational training centres with the help of service industry corporates and entrepreneurs for providing training to the youth of Punjab Whichever way it may be defined, ultimately, a strategic approach to human resource management must culminate in the implementation of policies and practices designed to enable, support and engender behaviours consistent with organisation's strategic intent. This demands achievement of a good fit between HR and the business strategy. References: 1) 2) 3) 4) 5) 6) 7) alumnus.caltech.edu/~rouda/t1_hrd.html 8) 9) 10) 11) 12) I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

284 CHAPTER 10 BE A WINNER HOW TO SUCEED IN THE SERVICE INDUSTRY IN SEARCH OF A JOB?!! If the Answer is yes! Then it would be important to understand what one wants to achieve through the job. Would it be? Growth Opportunity Job Security Salary Company Reputation.. Or other factors like location, work culture etc. Actually, each one of these is important and according to the recent survey done by ITFT - Chandigarh Research Cell, - Job Security and growth opportunities clubbed with handsome salary is the dream of an ideal job for the youth of today. HOW TO SEARCH FOR JOBS A good job doesn t fall in one s lap just like that; one has to hunt for that one which would give maximum satisfaction. To make the right decision, research and for that matter thorough research of the market, the opportunities it has to offer, and what one gains from and is looking for in the job is required. This research would be the guide to make or break one s career. Job search and company research was not as easy earlier, but today with the facility of the internet and worldwide web, along with media contribution to information on company profiles and growth trends, job search has got a new dimension altogether. After zeroing down on the area of interest, research should involve the preparation of the interview, which should include acquiring of adequate information on the company and its work culture. The process of research has been broken down into the following steps: STEP ONE: THE RIGHT MATERIAL While gathering information about the company, two sets of information are required: Type of Job / Position and the Overview of the organization: This deals with employment issues, career path and advancement opportunities, benefits, and diversity initiatives. Sufficient understanding about the organization as a whole: This includes general information about the company products and services, history and corporate culture, organizational mission and goals, key financial statistics, organizational structure (divisions, subsidiaries, etc.), and locations (main and branch). You may also research the industry, key competitors, and countries where the company has offices. STEP TWO: THE RIGHT WAY While seeking the right kind of information, internet and publications are an important source. For information from the worldwide web, search engines like and may be used if company websites are not known. CONDUCTING RESEARCH THROUGH A SEARCH ENGINE: Use of Keywords: A combination and permutation of Keywords play a vital role in researching on the web. For example, to conduct a search of Airline companies in India, type the keyword Airlines in India in the search box in inverted commas. This makes the search filtered and irrelevant results can be avoided. To make the search more specific the plus mark + may be used to specify the company name or a specific service of interest in the airline. However, to search for all airlines other than those in India, the minus mark - may be used. HOW TO MAKE ONESELF WANTED IN THE JOB MARKET The two greatest concerns of employers today are finding good workers and training them. The difference between the skills needed on the job and those possessed by applicants, sometimes called the skills-gap, is of real concern to human resource managers and business owners looking to hire competent employees. While employers would prefer to hire people who are trained and ready to go to work, they are usually willing to provide the specialized, job-specific training necessary for those lacking such skills. 283 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

285 Today, in the era for Survival of the fittest, the corporate world practices the formula of Perform or Perish. To match industry expectations one needs to expand the base of knowledge in order to win the Corporate Olympiad. EMPLOYABILITY SKILLS Employability skills are those basic skills necessary for getting, keeping, and doing well on a job. These are the skills, attitudes and actions that enable workers to get along with their fellow workers and supervisors and to make sound, critical decisions. Unlike occupational or technical skills, employability skills are generic in nature rather than job specific and cut across all industry types, business sizes, and job levels from the entry-level worker to the senior-most position. Employability skills, while being categorized in many different ways, are generally divided into three skill sets: Basic academic skills, Higher-order thinking skills and Affective skills and traits. Although the academic skill level required by some entry-level jobs may be low, basic academic skills are still essential for high job performance. Ideally, new hires will have the ability and will want to learn. Perhaps even more important to job success are having good higher-order thinking skills. The ability to think, reason, and make sound decisions is crucial for employees desiring to do well and advance. A person who can think critically, act logically, and evaluate situations to make decisions and solve problems, is a valuable asset. Application of higher order thinking skills in the use of technology, instruments, tools and information systems takes these higher order skills to a new level making the employee even more valuable. Employers will usually try to help valued employees seek and get more advanced training, thus widening the gap between those with higher order skills and those possessing basic academic skills alone. However, it is not possible to totally overlook the basic traits in an individual since these traits cannot be inculcated through training in an employee. Employers need reliable, responsible workers who can solve problems and who have the social skills and attitudes to work together with other workers. The three skill sets are typically broken down into more detailed skill sets as below: BASIC SKILLS: Oral Communication skills (Listening, Reading, Speaking) Especially understanding and following instructions HIGHER ORDER THINKING SKILLS: Problem solving, Learning skills, Formulating strategies, Creative, Innovative thinking, Decision making AFFECTIVE SKILLS AND TRAITS: Dependability\Responsibility, Positive attitude towards work, Punctuality and Efficiency, Interpersonal skills, Team worker Corporate Give Weightage to TRANSFERABLE OR SOFT SKILLS Unlike job-related skills, which tend to be used in only one line of work, transferable skills are skills that can be used in every occupation, regardless of the type of work. They are universal skills -- you can transfer them from one type of work to another without much effort on your part or training from the employer. While making changes in one s career, or making a transition from school to work, one needs to identify his/her transferable skills. These should include those skills gained from everyday life as well. Below are some sample statements about transferable skills. Each statement is followed by an example and a connection to a specific job. Transferable skill statement: "I can meet deadlines." Example: "While in school, I rarely missed a due date on an assignment." 284 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

286 Connection: "If I was able to meet deadlines in school, I will also be able to meet your work deadlines and quotas." Transferable skill statement: "I am a well-organized person." Example: "At my last job I had six bosses. I had to organize my time and set priorities to get the job done to everyone's satisfaction." Connection: "If I could handle that confusion, 'I am sure I'll be able to deal with organizational demands of this job." SELF-ASSESSMENT A successful job search starts with thorough preparation and planning. This is true whether you are beginning your career, seeking re-employment or considering a more satisfying occupation. Anybody can find a job. But finding the right job, the kind that builds on one s strengths while stretching the talents, takes more thinking. It is critical to any job-search that one knows what there is to offer, to sell; and that what one offers is also what someone else needs and is willing to pay for. In the world of work, one s technical or functional skills; and the personal strengths or abilities are important ingredients for marketability. Also important is the determination of those skills and strengths that one enjoys using most, because these should define the next job. A thorough self-assessment is therefore the initial step in career planning. It gives an honest introspection of what one has and what one needs to improve in which particular manner. The information one gains from self-assessment is crucial to the development of cover letters, resume and interview preparation and ultimately in finding a job with an employer who values these skills. Self-assessment requires one to identify the abilities, interests, attitudes, values, accomplishments, strengths and weaknesses in one s personality. This can be done by answering questions that relate to primary education, part-time and full-time jobs, volunteer and leisure time activities. The honesty and quality of work that is put in while carrying out the self-assessment will predict the level of success in getting the right job. If you are not sure what kind of job or career you want, "You" are the place to start. What do you do well and enjoy doing? What are your past patterns of success? How do you find the most rewarding career field for yourself? Answers to such questions would help in understanding one s personality and help in deciding the contributions that one can make in the marketplace. Many people try to fit into any job advertised in newspapers or other sources. However, the employer today has many qualified candidates from which to choose and he would seriously consider anyone for a position only if he is determined that one fits into the organization whether you can do the job and whether you will do the job. If one understands him/herself, it would be easier to convince the employer and cash in on the opportunity. Identifying one s strengths should give a clear picture not only of what one can do but what one enjoys and likes to do most. Sometimes it is difficult to examine what may be a weakness. Everyone is not equally good at everything. To improve an area, one should take steps to work on it, e.g., a writing course to enhance written communication skills. Alternatively, friends and family may assist in identifying a deficiency or weakness in one s personality. Weaknesses can also be turned into strengths in the right job, e.g., lack of empathy may seem like hard-heartedness, but to a person who repossesses furniture and cars, it can be an advantage. Accomplishments are those activities that, upon recollection, give you a sense of fulfillment or success. They can be large or small in scope; routine or extraordinary; frequent or something you have done only once; work related or personal. Below is a breakup of the fundamental questions that one would require to look into to reach a true and honest assessment of one-self. Objective: To confirm your values, interests, skills, achievements, and goals. Go through the following questions to evaluate different aspects of your personality and find out more about yourself and your aspirations. For each question or series of questions on the left-hand side, we give several possible hints to help you 285 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

287 formulate your own answers. Remember that the best answer is often the first thought that crosses your mind. What Are Your Values? What matters most to you? What is it that makes you feel happy and fulfilled? Self-esteem, professional recognition, fairness, independence, responsibility, helping others, space for creativity, a stable family life, time for your children, physical fitness, job security, opportunities for promotion, a secure income... How would you define success? Values feed interests. What Interests You? What is it that arouses your curiosity and triggers your enthusiasm? A specific industry or product, the big picture or the fine print, creating something from scratch, solving problems for others, managing people, travelling, meeting new people, playing with your children, cooking, sailing... That energizes you? What do you enjoy doing most? Interests help the development of skills. What Are You Good At? What is it that you do well? How good are you at it? Analyzing data and drawing conclusions; dealing with materials, equipment, machinery; managing a team, persuading others When trying to identify one's own skills, "how much" is more significant than "what": How creative are you in finding sources of information for your research? How comfortable are you with computers? How effective are you in managing a group of people, in communicating with them? Skills allow achievements. What Have You Achieved? What is it that makes you feel proud, satisfied with yourself? Where do you feel you have used your skills best, met your interests, turned your values into concrete results? Think of your achievements and determine which specific skills you used in each case, which particular interests you satisfied and which values you fulfilled. Among these, identify recurring skills, interests and values. Analyzing your achievements in this way will help you define your long-term objectives. An achievement isn't necessarily something that others notice or show appreciation of: it can be a personal, intimate feeling. 286 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

288 Past achievements can help you set targets. What Are Your Goals? What are your long-term objectives? What do you want from your career? Where do you see yourself in five or ten years? Once you have identified your main values, interests and skills, as well as your greatest achievements, you are well-positioned to draw a clearer picture of your goals. Use your answers to the questions above to define objectives that match your personality and character. Once you have done that, think of how you can harness your most important values, interests, skills, and achievements in order to fulfill your goals. What is the ideal job title or job content you are aiming for? To determine the industry / function that suits you best, ask yourself the following questions: Which work environment and corporate culture meet my values best? Where can I fulfill my interests? Where can I excel with my skills? In what domain are my achievements significant? How can I reach my long-term objectives? To which industry/company can I contribute the most? Why would such an industry/company be a plus for my career? How do I envision the industry/company's future, and do I want to be part of it? Ask friends, family, professors, where they see you fit in best. Then ask them why. There is no "right" answer to these questions this is why you should probe deeper and deeper. Ask friends, family, professors, former and current colleagues and employers for objective advice on where they think you would fit in best, and in what role. Then ask them why. Their answers could either point to a specific job, or give you a more general idea. IMPORTANCE OF SELF-ASSESSMENT Self-assessment provides information about three important areas for career satisfaction: personality, work values and culture. PERSONALITY This entails assessing the Big Five dimensions of personality: Emotional Stability, Extraversion, Openness, Agreeableness and Conscientiousness. People who love their work often say, "I can't imagine doing anything else. I get to express so much of my personality at work." Understanding and expressing one s personality traits to the maximum and knowing how to translate them into enjoyable work is a wonderful opportunity to showcase one s strengths and minimize the weaknesses. WORK VALUES Values, such as achievement, independence, recognition and support are key triggers when searching for a dream job. CULTURE : The characteristics of culture that appeal to one need to be considered. Does the culture fit my personality style? 287 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

289 Examples of values are individual expressiveness, the ability to exchange information, a high salary or a casual atmosphere. The beauty of assessment really shines when you start recognizing patterns in your results. If you're extroverted and individual expressiveness is important to you, you'd better escape that bean counter position. Consider this permission to express yourself to the fullest in your dream job. Be outrageous and ask, "Where could I be most wildly myself and get paid to talk about something I value?" LOOKING FOR A CAREER Careers highlighted by an assessment provide start points in seeking new possibilities and in them the available positions. Keeping one s view open to researching offers relatively higher likelihood that there would arise a connection between personality style, work values and culture. Studying the fields and their outlook to the economy would give greater career satisfaction, while building toward what might become the dream career one is looking for. GROW AND DEVELOP IN YOUR CURRENT POSITION One of the most immediate applications of self-assessment results is managing one s career by making the most of the current situation. For example PERSONALITY What can I do to build more relaxation into my work schedule? If recognition is an important value, "Where does that recognition need to come from?" We all come in different SHAPES and SIZES. We all have STRENGTHS and weaknesses. What's right for ME may not be right for YOU. There are things that are important to me BUT YOU don't care about them at all! And sometimes your behavior doesn't make any sense to me!!! In a day, one has to perform a hundred chores right from talking, to eating, meeting friends, strangers, working with people at work place, being in solitude and so on. The way one thinks, reacts, speaks, behaves and copes up is the real YOU. This may be identified as one s personality. The word personality comes from the Latin root persona, meaning "mask." According to this root, personality is the impression we make on others; the mask we present to the world. Some accepted definitions of personality are: A person s distinguishing character traits, attitudes, or habits. The distinctive patterns of behavior, including thoughts and emotions, that Characterize each individual's adaptation to the situations of his or her life. Every individual today is believed to have a primary mode of operation within four categories: 1. Extrovert Vs Introvert: This scale explains where people tend to focus their attention and get their energy from. Is it from within (Introverted) or from external sources (Extroverted)? 2. Intuitive Vs Sensing: This scale suggests how people take in information and ways that they become aware of things, people, events, or ideas. It has the biggest impact on how people learn. It may be based on the trust of the five senses (Sensing), or on one s instincts (Intuitive)? 288 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

290 3. Thinking Vs Feeling: This scale explains the ways people make decisions, evaluate and come to conclusions about information and how they make decisions. They may tend to decide things based on logic and objective consideration (Thinking), or based on personal, subjective value systems (Feeling). 4. Judging Vs Perceiving: This scale explains the type of life style and work habits people prefer. Is one organized and purposeful, and more comfortable with scheduled, structured environments (Judging), or is he/she flexible and diverse, and more comfortable with open, casual environments (Perceiving)? Although everybody functions across the entire spectrum of the preferences, each individual has a natural preference which leans in one direction or the other within the four categories. The combination of those four "preferences" defines one s personality type. A POSITIVE PERSONALITY A positive attitude, or outlook on life, can lead to positive behavior and create success. An upbeat, positive person draws other people like a magnet. Maintaining a positive attitude to one s work and enjoying the work environment and culture can lead to improved output and performance. Although, many people may feel it hard to be positive in the real world with so many external pressures, it is NOT impossible and can be achieved with a little practice and commitment. While it may not be possible to change some things, one may work on improving any negative qualities that exist. QUALITIES OF PERSON WITH POSITIVE PERSONALITY: Positive attitude and optimistic towards life. Self- Motivated Taking initiative and shouldering Responsibility Being Considerate Being a Good Listener Minimizing Criticism, maximizing Appreciation Resolving Conflict with Win-Win-situation Self Esteem Reflecting your Honesty and sincerity in whatever you do Being Kind and always Smiling Correct posture Sociable Good Communication Skills Avoiding Negative People and thoughts Being Enthusiastic and positive towards life and people ATTITUDE MATTERS A LOT Your THOUGHTS, becomes your WORDS Your WORDS becomes your ACTION Your ACTION becomes your HABIT Your HABIT becomes your CHARACTER..so watch-out and make sure that you think POSITIVE and have a POSITIVE ATTITUDE, because that will be finally your CHARACTER. 55% body language and appearance, 38% verbal tone, 7% verbal content forms the first impression about a person. Personality plays most important role when it comes of interacting with people and being successful in the corporate world. 289 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

291 CAREER PLANNING Career Planning is a Four Step Process: SELF Self: Conducting introspection and looking into one s Strengths, and weaknesses. Understand the need of the market and work towards developing and polishing those skills which make one more employable in the market. Options: Surfing for opportunities existing in the Job Market. These opportunities exist in newspapers, magazines, career and placement service offices, employment exchange offices and information through networking. Match: Matching one s skills with the existing opportunities in the job market. One should not apply for any and every job in the options available but work towards those which one feels capable of handling and which offer maximum satisfaction to the values and skills in him/her. Action: Do not delay! Go for it!! Approach the HR department of the companies that have been identified, fix up interview appointments, meet the concerned people, and leave a mark on the potential employer..this would definitely lead to a WIN, WIN situation!! To present oneself, one should focus on his/her selling points. Selling points can be drawn from one s performance (proven track record), experience, and training as well as personal preferences What do I LIKE to do? What do I do WELL? What do I want to LEARN and keep on learning? The resume must spell out clearly the selling points so the employer doesn't have to "read between the lines" or assume and guess. Assessing oneself and understanding the strengths and weaknesses within has been discussed in detail in the previous chapter of SELF ASSESSMENT. OPTIONS Looking for a job today demands going through a plethora of resources which have to be carefully sorted out with clear judgment the best options picked. The existing options can be searched through the World wide web, Networking, the Yellow Pages, etc. THE WORLDWIDE WEB: As compared to the pre-internet days when one had to search for information on paper, the internet provides access to a vast amount of information 24/7 without having to leave your chair. However, job hunting on-line is not about instantly finding one s dream job with a mouse click. For on-line job hunting, you, the consumer has to look through many sites and decide which ones meet your interests and needs. Supply and demand of jobs and job seekers determines whether jobs are advertised on-line. The World Wide Web makes it easy to keep up with business news and informed about what's happening in the job market. The use of the internet in searching for a job is advantageous since one may refer to and apply for these vacancies at any time of the day. The three largest sites in India which offer links to job opportunities in terms of the number of visitors are Monster.com, naurki.com and jobkhoj.com. Industry-specific sites, such as the Institute of Electrical and Electronics Engineers Inc. for engineers, and ChemistryJobs.com for chemists, are valuable resources for professionals in these fields. Local community-focused job-search sites which feature job listings by region are dependable sources since they provide information about jobs closer home and with more adjustable conditions. 290 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

292 A job site may provide information about a vacancy as well as links for candidates to e-post resumes to the companies directly. Optionally, if one registers with these websites, they would send regular intimation through the address supplied. The candidates may then send their resumes if the profiles suit them. *NOTE: Unless a job posting specifically asks for resume to be sent as an attachment, it's best to paste the information into the body of the . Sometimes, attachments may contain viruses and company managers may hesitate to open them. Unfortunately, not ALL jobs are advertised on the Internet. Not all career fields are represented fully on-line and those which are may not have all the jobs available. NETWORKING Only 5 to 25 percent of jobs are advertised, and the remaining are filled through word-of-mouth, networking or what is generally referred to as hidden-job-market. The art of networking enables one to build up a strong contact-list of important people who one may have met through various social and business functions -- and using them to one s advantage when looking for a job. These are potential networks who can provide substantial job leads, offer advice and information about a particular company or industry, and introduce you to others adding new links to your network. The technique of networking remains a highly effective job-search and self-marketing tool. It is an age-old and incredibly powerful instrument which simply means "talking to people." People can and are ready to help others if they can. However, one must understand HOW to get help and WHERE to get help from. In the job-search sense, it's using systematic gossip to build informal, low-stakes relationships that improve one's market visibility about what's happening and identify still more potential contacts. To benefit to the maximum from the process of networking, firstly, one should make a list of all the people to whom one can talk to. These people do NOT need to be friends, or even acquaintances, just any and all people with whom one has enough of a common thread to initiate a conversation. Using this loose definition, most people have hundreds, perhaps even a thousand contacts. One should not overlook any contact as a network since EVERYONE has a network. Make the best use of one s network: Rather than saying, "I am looking for a job. Do you know of any jobs?" One should instead ask for tips, leads and suggestions. One must specify his/her interests and skills (identified earlier) and clearly state the kind of help one would expect from the person approached. The dialogue below is one way to handle a conversation with a person who could assist through networking: "I'm looking for an entry level job in events management. Do you know anyone who is working as a convention planner or events manager? Do you know anyone who works for X company or Y company? Can you give me their name and telephone number? May I say that you asked me to call?" Good networking (the kind that works) and bad networking (the kind that annoys.): Good networking involves empathy, individualizing the process and understanding basic rules of human interaction. A networking meeting should not be made into a sales transaction; it's about exchanging information, building trust, being seen, gathering anecdotal information and creating a positive foundation for future 291 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

293 Do s Don ts interaction. Individuals one meets in a networking context needs to feel respected, heard and given value. Think creatively about where to find network contacts. You can find people to add to your network almost anywhere. Join professional organizations and associations for better networking opportunities. Come up with a system for organizing your network contacts, whether a spreadsheet on your computer, a file box of index cards, a three-ring binder, or whatever works for you. Maintain networking links even after you ve found a job. You never know when you might need your network contacts again. Don t go anywhere without copies of your resume and business card. Be sure you can access it easily if you meet someone who could pass your resume further to an HR manager. Don t be afraid to ask for help. Most people are flattered to be asked for assistance and advice with your job search. It makes them feel important. Don t forget to thank everyone in your network that has been helpful to you, preferably with a nice thank-you note. It s just common courtesy to show your appreciation for peoples time and assistance, and your contacts will remember your good manners. WHO CAN BE A POTENTIAL NETWORK LINK Personal Contacts: Friends, acquaintances, neighbors, relatives, church members, classmates, teachers, and club members. Professional Contacts: Employers, supervisors, colleagues, subordinates, clients, customers, and fellow association members. Internet Contacts: Subscribers to mailing lists that one participates in, any personal or professional contact that may be communicated via . YELLOW PAGES AND PUBLIC LIBRARIES Yellow Pages or an online source like Yellow Pages is a foundation to begin a search for the target category of companies which one would be interested in. Although the profile or details of the company are not given in the yellow pages, with a little research and networking, one can locate the right person to contact in the company. Public Libraries are a good source of basic business tools, directories, periodicals, newspapers that can help one create a list of target employers. The BEST business collections are often found in a special Business Section. Business and market information, directories and rankings of local companies, guides to associations in a specific field and much more can be easily accessed through resources in the library. Now YOU are ready to show HOW hiring YOU are the smart move. It's also an EASY move for the employer because you've done all the work tracking them down. 292 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

294 MATCH : FOCUS ON ONE POSITION AND ONE TARGET INDUSTRY. One must clearly track down those companies and employers who best match one s selling points. To develop the reliable list of target employers, one must limit the search and focus on the target industries only. However, limiting the search would not mean totally overlooking the other opportunities that may also be possibilities to the job search. These positions and industries which seem to offer some additional scope should be noted down on the sidelines and the process started again focusing on these industries now. DEVELOP A CUSTOM LIST OF TARGETED EMPLOYERS List the employers that match one s focus: name, location, any other information available on the person to be contacted. In case of search for a change in job, identify the competitors of the previous employer also as target employers. For Example, for a student having completed a Hospitality course would identify the following industries as major target employers: A. Restaurants B. Family Dining Establishments C. Resorts D. Retail Food Service and Fast Food Outlets. E. Truck Stops and Catering Outlets Under these major categories, one would identify those companies which would satisfy his/her skills and attributes. As far as possible one should try to grow the list by learning more about the target industries. With further research, one may discover that the scope of the industry is also growing; new start-ups, suppliers, allied businesses and the list of potential employers would increase. Considering the same example situation as taken above, the following could be some of the additional companies that may be discovered and contacted: Airline food service production Corporate food services Hotel food services College and university food services Large catering companies And the whole world of commercial baking, if one has interest/skills in that area. COMPANY RESEARCH: ACTION To have an understanding of a target company, a thorough research should be conducted. In addition to identifying the company, one gradually comes to learn about their products, services, customers, competitors, technologies used and the challenges the company faces. Reading between the lines will also offer a clue into the company's "style" or approach to its market thus assisting you in answering these questions: Is this company a good fit for me? What are the employer's needs and how can I present myself to meet those needs? Am I interested in and qualified for any of these positions? Now its time for action! 293 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

295 When one has gathered sufficient information, the next step is to contact the person concern or the decision maker for HR related issues in the organization and fix up an appointment with him/her to convert job leads into job interviews. This may be done in many optional ways. However the most preferable one is to use the CALL- WRITE-CALL model. The main goal of this activity is to get an interview. Although it may be too soon to think about recruitment and hiring, one just needs quality face-to-face time with the person hiring. While doing that, remember this is very similar to doing a sales pitch, in which the product / services are own professional skills. Be sure that no stone is left unturned in making this career pitch as penetrating as possible. To get an interview, one must convey just one message: I'll work hard and you can trust me. Therefore every-time you make contact with the employer either through mail or personally, the following points should be kept in mind: professional look neat, clean and well-organized; Communication - communicate using simple, direct, standard English; be thorough reflecting effort, thought and preparation; Personality - Demonstrate a humble, confident and helpful attitude. Be calm- Showing panic and desperation during the job hunt turns people away. Above all, the focus should be on what the employer needs and how one can help in achieving that. CALL UP THE EMPLOYER Following are suggestions for telephone contact with potential employers: Research about the company before calling. Make notes about key points you wish to make and be prepared to communicate the benefits you can bring to an employer. Know the name and title of the person you wish to reach. State that you are calling to see if they have any immediate openings in your field for a specified period of time. Try to arrange a meeting and propose a time to discuss possible job opportunities. Offer to send a copy of your resume for the employer s scrutiny. If there are no openings, inquire if they have any suggestions of other organizations you might contact. Before you call any employer, prepare a script of what you will say: Hello, I m... I got your name from/by... I'm interested in... It is not necessary that this call will definitely get one through to the right man and even if does, he may not show any interest in your call. Some ways of handling these objections can be: They say: "I'm too busy." You say: "Sir, this'll only take a moment." They say: "We're not hiring." You say: "That's OK, Sir. I know you know a lot of people in this field, and I just wanted to know what ideas, leads, or referrals you might have for me. This'll only take a moment." 294 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

296 They say: "Send me a resume and I'll think about it." You say: "Let me tell you what's on it..." or "I'll fax it to you right now and call you right back." WRITING TO EMPLOYERS - COVER LETTER AND RESUME Writing to potential employers is a method most frequently used by job seekers. In order to write to employers, one of the first steps is to compose a cover letter. A cover letter gives one s introduction to a potential employer. It points out the position being applied for, most relevant aspects about one s background and indicates where the lead came from (if applicable e.g. advertisement, referral etc). A cover letter should accompany each resume send out. It should compliment, and not duplicate the resume. Its purpose is to interpret the data-oriented, factual resume and add a personal touch. A cover letter is often the earliest written contact with a potential employer, creating a critical first impression. A strong resume and cover letter combination is a valuable tool to get into an interview room. A resume is a promotional brochure helps you to: SELL YOURSELF through pertinent, unique details that STAND OUT RELATE YOUR SKILLS and achievements to the job FOCUS ON the organization itself GET YOUR FOOT IN THE DOOR! WHY YOUR RESUME IS IMPORTANT: It's the first meeting between you and a prospective employer... this sets the first impression in the mind of the employer about the candidate either Wrinkled and unorganized or Neat and structured, long and boring or precise and interesting. Resume tells the employer a great deal about the candidate Where you have been, where you are and where you are headed. However, the story must be told quickly and clearly. They tell you a great deal about yourself... analyzing yourself while writing a resume allows you to learn more about yourself, your strengths and achievements. This information comes in handy when you appear for the interview. Its purpose is to get the interview... You have complete control over what ever the employer knows about you. To get an interview call, you must present yourself as the employer expects his future employee to be. Make sure your lasting impression is a profound and positive one. (Writing a cover letter and designing the resume have been discussed in detail in the section: Doing some Paperwork) THE FINAL CALL While making the final call, the intention is to get an interview call TAKING UP INTERVIEW APPOINTMENTS Try to reach out to the person concerned directly over the phone rather than being entangled between assistant and secretaries. Once you have thrown your interest in the job and a reference of the resume, request for an appropriate time for an appointment with the person. Confirm once again the date and time of interview before closing the conversation. Ask for suggestions from where you can gather research material about the company, this will leave an impression on the potential 295 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

297 employer about your seriousness for the task. Mark in your appointment diary-the date-time and the organisation for which the interview appointment has been finalized. MAKING THAT FIRST IMPRESSION PERSONAL GROOMING AND HYGIENE Good grooming starts before one puts on his /her clothing. Here are some tips: Be Neat. Appearance is important. A conservative, modest suit is a good choice when going for an interview. Take care of your body: hair, skin, face, and hands. One should always give a clean and tidy look. This boosts one s morale and self-esteem leading to confidence - the most important asset to face an interview. HYGIENE AND SKIN CARE For both - Ladies & Gentlemen: Bathe or shower daily. Rinse or wash your face at least twice a day. Brush and floss daily. Use mouthwash or rinse with diluted baking soda if mouthwash is not available. Drink plenty of water to keep your system clean. This will also help to give your skin a fresh and healthy look. Wear very little or no perfume / deodorant. Hands and Nails: Your hands talk for you! They should be clean and smooth. Keep a small bottle of lotion to keep your hands moisturized. Keep nails short and clean. They may have a light nail-polish (for ladies). Make sure your hair is well groomed and neat. For Ladies only: Remove underarm and leg hair regularly. Also, remove any facial hairs as they appear. A depilatory or bleaching cream may be needed if you have heavy facial growth. A word about tattoos: tattoos should NOT be visible at all. DRESS TO SUCCESS: DRESSING SENSE FOR INTERVIEW With care and attention toward your personal grooming and hygiene, one can be the center of attraction during the interview. The point to remember is that you should be the center of attraction and NOT your clothes. For this, be conscious of the overall appearance. You MUST determine whether your appearance is suitable for you and appropriate for getting the job that you want or not. The first 15 seconds of one s appearance are needed to make an impression on people. That s why what you wear to a job interview is important: paying attention to every little detail - from head to toe - is important. Dress your best for all interviews, regardless of the dress code of the organization. Potential employers size you up based on how you look and how you carry yourself. For this it is always suggested to try on the outfit before the interview especially if it is one, which one does not wear regularly. It would help one to be accustomed to the feel and avoid any embarrassing situations on the day of the interview as well. Wear a plain color conservative suit with a coordinated shirt (for gentlemen) or blouse (for Ladies). Wear smart, closed, and finely polished shoes (for gentlemen). Ladies should match the pair of shoes to their suit. They should be preferably closed and of a basic design. Don t overdo the perfume and makeup (for ladies), or aftershave (for gentlemen). Ladies should limit their jewelry to just earrings, preferably studs, a fine bracelet and chain ensuring that they complement well with the outfit (and only if absolutely necessary). Gentlemen should avoid jewelry of any kind. In case of religious threads and chains, these should be well tucked under the outfit and not visible during the interview. Bring a portfolio, or briefcase carrying all your educational proofs and certificates of any experience and exposure to a work environment., One must also always have a writing pad and pen. Tips: Your clothes are your image, check the mirror and see what others see. 296 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

298 It is better to be overdressed than underdressed. If it s too tight or too loose - don t wear it! THE RIGHT TYPE OF CLOTHING TO FIT ONE S QUALITIES AND VALUES Here are some tips on how to look your best, without necessarily spending a lot of money. COMPLEMENT YOUR BODY TYPE The clothing that you wear should flatter your form. Know and understand your body type and choose the shape or combinations of shapes that best fit and compliment your body. BODY TYPE A Body is straight up and down without a defined waistline. The upper portion and lower portion of the body are almost the same girth with no prominent curves. In this case it would be necessary to create a gently indented waist. Wear belts to entail your waist, but not too tightly. Avoid three-quarter length sleeves; they call attention to a lack of waist. Keep your neckline interesting but never too low; draw attention to your face. Keep clothing loose, not tight-fitting BODY TYPE B You carry your weight in the middle, a fuller waistline. This body type needs to create length and hide the midsection. Keep the following points in mind: Wear clothes with shoulder pads. Show your legs to visually add height. Wear all over prints or patterns or have them on the bottom only. Use thin, draped belts to imply a waist. Use long accessories to add long vertical lines to the overall look. BODY TYPE C This body type has broader shoulders and/or larger bust than hips, with often thin legs. It would be necessary to create balance between top and bottom. Do not wear shoulder pads. Wear darker colors on top and have brighter colors and patterns for the lower garments. Avoid tight fitting belts. Avoid frills, ruffles and pockets on tops. Accessories should be simple. BODY TYPE D This body type is more pears shaped and has broader hips than shoulders. Again, it would be necessary to create a balance between the upper and lower halves of the body. Use shoulder pads to balance hips with shoulders. Wear tops drawing lots of interest; having patterns and bright colors. 297 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

299 Wear soft, flowing, non-clinging material on bottom Bottom pockets should be either angled or sewn flat. BODY TYPE E This body type has an even width of shoulders and hips with a defined waistline. IN this case, the proportions should appear as balanced as they are. Emphasize your waist. Wear any color combination, print or pattern. Prints or patterns should be on top and bottom to keep balance. If very curvy, lessen by using soft blouses and long tops to create a straight look. COLOR CHOICES Grey or navy: An excellent color especially for conservative organizations. Blue: A favored color especially if being interviewed by a male. Black: Can be perceived as being too strong for an interview. If black is worn, soften the color by using white or pastel accents. Accent colors: White, cream, light grey or blue. Good neutral colors for blouse or shirt. Yellow: Gives the impression of a productive and creative person. Red: A powerful color for small accents such as a scarf. Orange: A good accent color which encourages conversation. CLOTHING DO S AND DON TS The following are general guidelines for successful interview dressing: Do wear clean, ironed clothes. Do empty pockets and beware of bulging keys and tinkling change. Do wear buttoned shirts, leaving only one or two buttons open at most, not showing chest. Do wear a tie. Make certain that it is knotted firmly and not loosely around the shirt collar. Do wear traditional daytime fabrics. Avoid wearing satins or leather. Don t wear jeans or t-shirts (anything giving a casual o informal look). Don t wear loud, bright colors such as greens, reds or purples. These colors should be used sparingly as accents or accessories only. Don t put on sports wear with loud emblems or clothing with large designer labels. ACCESSORIES DO S AND DON TS Do wear clean, conservative, and polished, rather sparkling formal shoes. Do wear complimentary and stylish tie or scarf. This is one piece of garment that can be eye-catching. Don t wear more than two rings. Don t wear any body piercing paraphernalia (Specially in case of ladies; earrings, nose rings danglers, or eyebrow rings are not allowed) Don t wear baseball caps or sunglasses. Don t wear athletic shoes, no matter how clean and new. They are considered inappropriate for an interview. Don t wear chains or necklaces, if you have to wear one, make sure that it is not visible. Ladies! Please don t wear sandals, rather opt for closed shoes. Ideally, your toes should not be visible in a formal dressing. So next time when you go shopping, do remember these points to get a perfect formal wardrobe. 298 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

300 MAKE-UP (FOR LADIES) HAIR This would make you look prettier; but just highlight your best features. Match foundation to skin tone for a natural look, apply lightly. Blend into neck area so that there is no visible line. Smoothen the skin and eliminate facial shine, face powder can also be worn with or without foundation. Eye makeup applied to the natural brow line is the most attractive. If you do wear eye make up, matching or blending with your natural color will be the most appropriate option. The highest part of your cheeks deserve the blush, apply softly and then blended in. Wear lipstick to compliment the color of your outfit. But do stay away from extremely dark or bright colors. Do not wear highly decorated and long nails on a job interview. If you have nails professionally manicured, request a natural look that has a clean and conservative length (about 1/2 inch) and natural color. Avoid wearing red nail polish; it can be sexually intimidating. Wear a conservative yet attractive style for the interview Style hair so that it is away and out of your face. Hair color should not be more than one or two shades darker or lighter than your natural hair color. Unnatural colors (burgundy, green, etc.) must be avoided. No gels or wet looks please! Gels look good in evening parties and casual get-togethers but are absolute no-nos at work place. Formal Business: Informal Business: A clean, pressed suit is the best way to go. If this is not available, a suit jacket with coordinated trousers to match is the second choice. Tie with white, blue, beige or other light colored shirt that compliments the suit. Dress shoes, black or brown only. Dark socks. A sport coat with coordinating trousers is the first choice. If this is not available, trousers with shirt and tie are the next choice. Retail sales financial manager Teacher Medical assistant Office clerk Counselors Physical therapist Security guard Artist INTERVIEW BODY LANGUAGE Personal image is more than just clothes. Warmth, openness and self-confidence will also influence the way prospective employers judge you. Having a positive body language will give the interviewer positive cues. Facial expression: Have a pleasant smile. Maintain comfortable eye contact with all interviewers and...smile...smiles...smile. Hands: Keep your hands still, relaxed, and place them above or on the table or desk. Meet the interviewer with a firm, friendly handshake. Handshake: One should practice a good handshake. This is especially important for the ladies. A good handshake is firm but should not be tight and grasping the person s whole hand. Smile and look at the person while you shake hands. Ladies may have to make the first gesture toward a handshake, because some individuals feel uncertain about shaking a woman s hand. Eyes: There should be steady, observant frequent eye contact. 299 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

301 Head: Keep it still and straight. Posture: Have a straight but relaxed spine. Seating: Symmetrical, sometimes leaning in a relaxed way but straight. Arms: Avoid crossing arms, this gives a closed out feeling. INTERVIEW ETIQUETTE Be Punctual: Punctuality demonstrates courtesy to the interviewer. It also reflects your professional character. Arriving five minutes early is recommended so as to avoid rushing and getting in a fluster. If there is a valid reason for being late, call and let the interviewer know your situation. Be Courteous & Polite: Always be polite and friendly to everybody especially the receptionist and secretary - they may well be consulted in the selection process. Pronunciation of Names: Pronounce the interviewer s name correctly. Ask to have it repeated if you re not certain. Eye Contact. Maintain eye contact when speaking to or being spoken to. Eye contact is reflective of being assertive and self-confident. This is particularly important while discussing your personal attributes, skills, interests, and abilities. Be assertive, but not aggressive. When asked a general question, be prepared to take the lead and highlight specific attributes which would speak of a positive personality. Hands. Feel free to gesture with your hands. You may fold them on the table or in your lap. Do not use them to prop your chin. This often applies pressure to the jaw and inhibits lucid enunciation. Relax, try and let your confidence show. Don t forget your place. Do not be overly personal with the interviewer and do not discuss issues unrelated to the job at hand. It is not necessary to compliment the interviewer s appearance, name or ask them personal questions about him or herself. Be precise and to-the-point: Answer questions that you have been asked in a brief but concise manner avoiding any unnecessary information. Don t state any conditions: It is very unwise to express your terms in a first interview, that is, telling an interviewer you will not work after 5:00pm or specifying about leaves etc. Save these discussions for final round of interview. Be prepared. Eat something before you go so that a rumbling stomach does not interrupt you. Make sure you have a pen, an extra copy of your resume and quick access to updated reference information. Don t tell jokes or overhand remarks about any situation or person (although a limited amount of humor is alright). Don t talk ill or criticize past employers, or tell obvious lies about your work experience, achievements, and salary. Don t smoke; chew supari, tobacco or gum. SOME PAPER WORK FOR THE INTERVIEW Some of the important documents that need to be designed and carried along while going for an interview are: A Winning Resume Cover Letter Portfolio Thank You Letter Acceptance/ Joining Letter WRITING WINNING RESUMES Before you send your resume, please consider the following tips: 300 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

302 Let your name be HUGE (legible from at least eight feet away) so that it really stands out, and use only a single line (in 10-point type) for your address information. The first item on the resume should be the Highlights or Summary of Key Strengths -- title it as you see fit - section to orient employers about the four or five essential things they should know about you. In paragraph or bullet form, answer the questions: What skills, characteristics, and abilities would be KEY contributions to your organisation? The highlights section is intended to give the reader an impression of YOU as a person. The features you bring forward may be professional ( in case the professional experience counts in the present situation e.g. research professional with 15 years experience in a financial services setting ) or talent related (highlighting those talents which speak of a professional personality suitable for the job profile e.g. ability to manage multiple concurrent projects or ability to develop and maintain excellent client relationships through outstanding customer service ). Educational Qualifications and special features such as unusual languages or an MBA should be brought out if they have a bearing on the setting where you wish to work. The highlights should characterize you in such a way that would make the interviewer feel that the individual would be an asset to the organisation. It may take time and a little experience to write out the Highlights section. At first it may be difficult to see one s own strengths, and may require the guidance of friends and close family members who know you well to make suggestions. Note: General computer and online research skills are taken for granted; it is superfluous to mention that you know how to use Windows unless the position described emphasizes this requirement. Familiar with a wide range of standard desktop tools and commercial databases is sufficient if you prefer to include a comment. However, if you have an unusually wide range of computer skills or are familiar with unique systems, that fact should probably appear in the highlights section. Webmaster skills are definitely worth highlighting! Secondly, explain where you have been active professionally and how. These should be in the format that focuses on the impact and results generated and how the exposure helped you in terms of professional growth; in other words, what are the benefits that the previous employer accrued from you, and what expertise did you develop or enhance there? Avoid terms like duties or responsibilities and instead explain your accomplishments. Next, provide information relating to your educational background. Relevant additional professional development courses can be listed here. If you have attended many short seminars, you may simply indicate that you regularly seek to enhance your skills by attending relevant seminars and give a few key examples (as opposed to a long list of seminar titles). In general, names of courses taken in library school should not be included. However, an exception might be made if; an award was won in the course of the activity undertaken. If your volunteer activities or hobbies are relevant in demonstrating, for example, leadership or fund raising skills, by all means show that you are a Red Cross coordinator or a soccer coach. Conversely, few employers are interested in knowing, that you enjoy crafts. References: References should be mentioned only if asked specifically or if they are individuals who enjoy a strong professional reputation. In most other cases, they may be stated as available on request Show your resume to colleagues and friends and ask their opinion in terms of whether the resume clearly and accurately represents YOU. Get their advice on how it may be improved. Experiment with layouts, spacing, placement of headers, horizontal or vertical lines, key items set off in frames, and the like. Have others comment on different layouts so as to get a sense of what others find appealing. Be prepared to give up a particular format! There is a natural tendency to tinker with an existing version rather than begin afresh. Before sending a resume to anyone, ask yourself if it speaks about the needs of the intended reader and whether you could make adjustments that would make more clear the fit between you and the reader s organization. 301 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

303 Remember that all the hours you put into working on your resume are investment in your professional future -- and that no resume is ever final. OUTLINE FOR A RESUME FORMAT This is no fixed format. One should alter it to the level of experience and educational qualifications or skills that need to be highlighted. Full Name (no nick names please!) Contact Details: Should include the following: Correspondence Address Telephone (with STD code) Permanent Address Telephone (with STD code) Cellular No (if any) Objective Your career objective is a reflection of your enthusiasm and commitment towards your profession and the job being applied for. Objectives should be altered for every new job. It should be translation of the Job requirement. Your objective should carry a flexible approach. Work Experience Should be updated and in descending order i.e. showing the latest first and then followed by the rest. The following should be mentioned under this head: Designation Responsibilities Duration/tenure Milestones (if any) Educational Qualification Should be in descending order again. Mention the following: Degree Institution Year Major Subjects Division When the person applying would be doing so more on the basis of his experience rather than educational qualification, details like the major subjects and division may be left out. Transferable / Soft Skills Define those skills, which make you different, and unique. They should be true to a great extent. (Refer to the section on What makes you wanted in the Job Market for details on how to judge your soft skills) Computer/ IT Skills Software as well as hardware knowledge should be highlighted here. Maintenance skills may prove to be an added advantage for you. Mention any knowledge of the internet and typing speed. (Only if it is more than 30wpm). Training & Assignments Achievements/ Awards & Recognitions Those achievements may be cited which project you as a winner, or portray a positive being in you. This could be anything from debate competitions to sports and cultural activities, etc. Being House Captain, Head Girl/Boy, and 302 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

304 Captain of your team conveys that you have leadership qualities and you are a person who can be comfortably worked in a team. Assets These are the personal qualities that make you a better and efficient human being and a successful professional. Languages Known Specify the languages that you are comfortable with, in reading, writing, or speaking. Do not exaggerate on the knowledge of foreign languages if not comfortably known; the interviewer may be an expert in the language! Volunteer Services If you have offered any services towards a social cause, these may be mentioned here. This conveys that you are a peoples person and think about others also. Interests / Hobbies Mention the hobbies that make you a better human being for e.g. a person taking interest in gardening conveys that he/she is compassionate. Hobbies like Bird watching, chatting, watching TV or gossiping do not carry much weight in understanding you as a personality. Personal Details: The following details may be given under this head: Date of Birth Gender Nationality (only if applying to an international organization) Father s Name & Occupation (Optional) Mother s Name & Occupation (Optional) Passport and Driving License details. FOR POSITIONS WHERE PHYSICAL STATUS PLAYS A VITAL ROLE Physical Status Height Weight Eye Sight Complexion Colour of Eye Colour of Hair Close with the Date and Signature of the Person applying. Date Signature WRITING A COVER LETTER A cover letter may make the difference between obtaining a job interview and having the resume ignored and dumped in the bin. So, it makes good sense to devote the necessary time and effort to writing an effective cover letter. An effective cover letter explains the reasons for one s interest in any specific organization and identifies the most relevant skills or experiences (remember, relevance is determined by the employer s self-interest). It should express a high level of interest and knowledge about the position. 303 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

305 One should avoid repetition of information the reader will find in the resume. There should be use of only those key points, which help to demonstrate why the candidate would be most suitable person for the position. As a rule the cover letter should elaborate on the primary features of one s background, but should not exceed one page. Address the letter to a specific person and title. If not possible, the salutation should read "Dear Madam / Sir" Tailor the letter to fit each specific employer. It is important to take a personal approach to the development of the letter. To stand out among the many resumes received by an employer it is necessary to first research the company, then provide within the content of the letter a justification for targeting that employer. Typically, such a statement would be in the second paragraph. A cover letter assists in including additional information not already covered in the resume, perhaps additional soft skills. When writing to prospective employers always send a copy of the resume along with the cover letter. Most employers expect a cover letter as part of the "resume" package that is sent to them when applying for a position. OUTLINE FOR A COVER LETTER FORMAT First Paragraph Why are you writing this letter? What position are you applying for? Where did the lead come from? Second Paragraph Why you are interested in the position, the company and its product and/or services. How can you meet the company s needs? What skills and qualifications do you have to offer? (In a response to an advertisement letter address items mentioned in the ad) Third Paragraph Talk about yourself. Stress what you can do for the employer. What soft skills do you possess? Highlight academic background, work experience, unique qualifications or some specific achievement. Specify if you are enclosing your resume (advised) Final Paragraph Indicate your desire for a personal interview at their earliest convenience. Let the company know that you would be happy to send additional information or references, if desired. Close your letter with a statement or question, which will encourage a response. THE ART OF DEVELOPING YOUR PORTFOLIO A well-prepared portfolio provides evidence to an employer of your accomplishments, skills, abilities and it documents the scope and quality of your experience and training. SOME FINE TIPS FOR DEVELOPING YOUR PORTFOLIO: It is an organized collection of documentation that presents both your personal and professional achievements in a concrete way. Portfolios can range from something as simple as an online version of your resume to a web site full of materials. A portfolio can include word processing files of your resume and writing samples, digital images of your graphic 304 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

306 and artwork, and video and audio files. Designing your web site well can significantly alter your user s reaction to your work. Your goal in creating a portfolio is to present your credentials and personal information in a manner that is functional, user friendly, and aesthetically pleasing. Your portfolio is a work in a process. Take cautious effort to create a professional, polished portfolio. Keep your portfolio updated with no broken images or broken links to other sites or outdated information. If you have a link to your address tests it to make sure it works. Add a link of your portfolio to your resume and mention it in your cover letters, so that employers may access the information quickly and easily. WRITING THANK YOU LETTERS Business etiquette says that you should send thank you letters, but many people overlook this matter of courtesy. A thank you letter can make you stand out from the other candidates competing for jobs, and in this tight job market, it is wise to consider every tool that will give you an advantage. To be effective, a thank you note should be sent before the hiring decision has been made. Is should be ideally sent as soon as possible after the interview, ideally not exceeding 48 hours. When you send a thank you letter, you give the interviewer a chance to remember you (imagine having interviewed candidates for a position, and then trying to distinguish each one after the interviews and trying to remember the specifics about each person). It gives you one more opportunity to mention any important information you forgot to discuss during the interview. With the thank you letter, you can redirect your marketing campaign by focusing on something you learned during the interview and re-emphasizing your strengths, accomplishments and skills. Sending a thank you letter shows the interviewer that you are a professional who is concerned about details. The thank you letter is of course also your added chance to leave a good impression! TRY TO FOLLOW THESE HINTS WHEN WRITING THANK YOU LETTERS Keep your letters short and simple - usually one page is enough. Help the interviewer remember you by referring to specific points discussed in your interview. Show that you were listening and mention something that will refresh the Interviewer s memory of you. Be sure that your letter is professionally designed, well typed and without any errors Send your letter as soon as possible - do not put it off! Emphasize your qualifications, especially those that are most relevant to the position. Provide any information that was overlooked during the interview or that which was specifically requested by the interviewer. Express your continued interest and enthusiasm for the position. Remember, very few people bother to send thank you letters - this can be your edge! Generally, thank you letters should include the following information structure: First paragraph Thank the interviewer for taking time out to meet you (mention the date). Remind him/her of the position for which you interviewed. Second paragraph Reinstate your interest in the position. Mention something you learned from the interview or comment on something of importance that you discussed. Once again, emphasize your strengths, experiences, skills, and accomplishments and direct them towards the points that the interviewer considered the most important for the position. Third paragraph 305 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

307 Once again, thank the interviewer for his/her time and consideration. If appropriate, close with a suggestion for further action (if a second interview is a possibility), or mention that you will follow up with a phone call in a few days. Provide your phone number and the hours you can best be reached. ACCEPTANCE/ JOINING LETTER You got it!! This is written when you agree to accept a particular position. This should include the following information: Answer to the offer immediately. Be direct about accepting. Restate the specific position you have accepted, the starting date and the terms stated in the offer Express your appreciation and gratitude on being offered the position. Offer to provide additional information if needed. SITTING FOR INTERVIEWS An interview is a discussion between two equals. Remember, be it any type of interview - you need to be yourself. Broadly speaking, interviews fall into two major categories: Screening interviews and Decision interviews. Screening interviews are usually a meeting designed to weed out applicants and shortlist a lot who may be taken into the company. Hiring decisions are rarely made during this first interview. Decision interviews have more detailed questions relating to the actual job description, analyzing how you would perform these duties and whether your personality matches the work environment. Interviews may alternatively be classified into any of the following categories: SCREENING OR PATTERNED INTERVIEW Identical questions are generally asked to all applicants and the individual responses are compared. This interview round is basically to weed out candidates out of the first short-listing round and identify the most qualifying candidates. NON-DIRECTIVE OR FREE ASSOCIATION INTERVIEW Open-ended questions such as Tell me about you, are asked in this type of interview. These allow the applicant to express himself/herself in his/her own unique way and offers greater exposure to an applicant s personality and attitudes. STRESS INTERVIEW The purpose of these interviews is to test the candidate on the ability to handle stressful situations. TELEPHONIC INTERVIEW This type is used quite often these days in the recruitment process for the initial screening process. The interview is held after a prior intimation to the candidate and fixing up an appropriate time to suit both parties. SOME TIPS ON HOW TO SIT FOR TELEPHONIC INTERVIEWS: o o o o o o o Create a confident impression on the telephone, because first impressions count! Ensure that your language reveal clear and correct pronunciations and correct accent. Be aware of how you sound. Practice on the telephone with a friend, or record practice answers on a tape recorder. Make sure you have enough time. Interviews can take up to an hour. Keep a copy of your CV, pen and paper, and diary in case you need to note down something or refer to anything from your CV. Carefully jot down details that the employer shares with you over the phone e.g. the company details, any timings given for a next meeting etc. Set up the interview when you know there will be no distractions. Write down any questions you need to ask. 306 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

308 o o o o o Maintain a professional demeanor. Make sure you are self disciplined and motivated. Speak slowly and clearly and do not use any slang language or short forms. Don t fiddle or doodle. Do your homework before the interview and know your information. VIDEO CONFERENCING INTERVIEW This Interview process uses the video-conferencing technology to allow people from different locations to attend the interview without traveling to the venue of the interview. To be successful in this interview, the candidate may practice in front of a mirror or have oneself videotaped to help ensure that the communication is effective via camera. GROUP, PANEL AND/OR AREA INTERVIEW This interview style consists of a panel of three or more people; all firing questions at the candidate. Group interviews are often used for higher-level business and academic positions. Psychologists are generally a part of the panel. They silently observe the candidate and would judge the real personality of the candidate. Each interviewer would be assigned a particular area of the applicant s background to hone in on, e.g. experience, education, work style, etc. This approach can be exhausting for the applicant, especially when the interviewing is structured on a one-on-one basis, since it may take several hours or days. BEHAVIORAL INTERVIEW: These are designed to bring forth actual information from candidates to reveal their effectiveness as long-term employees, and facilitate the matching of organizational and applicant needs. This process would require the candidate to recall and describe situations where critical thinking and success factors were demonstrated. E.g. questions like Describe the situation which best demonstrates your ability to get things done through others would be shot at the candidate during this interview. The bottom line is that the candidate should be thorough with the profile of the company, the kind of job being applied for, and your skills that matches with the company s requirements. After the interviewing panel has finished asking their round of questions, you may also ask any question you feel relevant to the situation. Remain professional throughout the interview process and do not panic if you are not able to answer any question as satisfactorily as it may be expected. On completion of the interview process, thank everyone for listening and leave the room as professionally as you walked in. Remember, your body language says more than words can say. This is the only success mantra for winning job interviews! Evaluate your time management skills Determine if you are capable of multi-tasking Decide if you have the ability to troubleshoot basic problems Decide if you can quickly adapt to changing scenarios and demands Know if you are a quick learner and can apply what you have learned Know that you can meet deadlines and work well under pressure Know that you have confidence in your ability to make independent decisions Be honest with yourself! Prepare a written proposal. Good Luck!! SITTING FOR A GROUP DISCUSSION 307 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

309 Group discussions are a part of the screening process, which may be used by the interviewing panel to select a few candidates judging them on some necessary attributes, required for the organisation. The interactive session the candidates have, portray a lot about their inner self and highlight the team working, assertive or aggressive attitude of the candidate. The Panel presents a topic to a group of candidates appearing for the interview and are themselves a silent observer to the discussion, which follows henceforth. One has to make his/her presence felt in the GD and try to make a mark in the short time available. Many candidates may mess by either not participating or by indulging in humor, which is irrelevant to the discussion. There are a few who are unable to put across their views because of their inability to communicate effectively and there are still others who buckle in pressure situations or loose their cool during the discussion. Remember.. You are the decision maker as to whether you want to be the winner or Loser of this round. HANDLING THE GD THE TOPIC: It is generally a simple discussion topic relating to presently occurring situations, or some major event, which may have created waves in the news. PURPOSE OF GROUP DISCUSSION: A GD round is conducted to assess the following qualities in the employee / candidate: o Team Spirit o Attitude o Interpersonal Skills o Communication Skills o General Awareness o Ability to tackle people o Reaction time o Behavioral Patterns o Ability to Come up with a solution: Team Decision o Confidence level and ability to take initiative. TAKING THE LEAD: Seize the chance to enter the discussion. MAKING A POINT: Hammer your points forcefully and tactfully. BODY LANGUAGE: Exude confidence in your gesture, postures and voice. COMMUNICATION ABILITIES: Articulate well and modulate your voice. LISTENING ABILITIES: Be a good listener as well POSITIVE ATTITUDE: Assert positively ( not aggressively) VOICE: Have a commanding (but not rude) voice. MANITAIN YOUR COMPOSURE: Stay cool and calm and request other participants also to do so incase there are situations in which the group turns rowdy or disorganized. SUMARISE THE GROUP DISCUSION: Seize the opportunity to summarize the GD. In your concluding remarks, make your points view again, the dissenting views of other candidates and the consensus reached. If the group did not reach a consensus, say so. Thank the participants for their fruitful discussion. 308 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

310 AN INTERVIEW QUESTION BANK ICE BREAKERS TELL ME ABOUT YOU/ YOURSELF? Keep your answer to one or two minutes; don t ramble. Cover four segments - early years, education, and work experience, recent times - with an accent on the later. The introduction may be practices by answering the following questions o o o o o o o Salutation (Good Morning!/ Good Afternoon!/Good Evening!) Name, Age, Status (First and last name- no nick names please) Where you come from? What you do for living & your previous experience? Brief about your family background. Your hobbies & Interests. Your success & Ambitions. WHY YOU WISH TO JOIN A PARTICULAR PROFESSION? Because I am: o o o o o o o o o o o o o o Caring Adaptable A Team Worker Experienced in working in unsocial hours Diplomatic A Hard Worker Can easily cope with Stress Can Work under pressure Have experience of customer service Quick to learn Show professionalism, patience & extreme politeness Enthusiastic & Cheerful Can meet targets & are proud to represent a particular organisation. FREQUENTLY ASKED QUESTIONS IN JOB INTERVIEWS WHAT ARE YOU STRENGTHS? Be Honest. This is the time when you can sell yourself. Generally Speaking, academic achievement, career experience, communication skills, problem-solving, analytical reasoning, interpersonal skills, leadership, flexibility, and computer or technical skills, Team Spirit, Motivation skills, Organising skills, Presentation skills, are some of the skills any organization would be looking in their employees. When stating such qualities during the interview, be very clear and if possible (in case asked to elaborate) illustrate your qualities with your past experience where you have distinctively shown these qualities during work. WHAT ARE YOUR WEAK POINTS? Don t say you have none. Turn a negative into a positive answer: I am sometimes impatient and I get too deeply involved when we are late. WHAT DO YOU KNOW ABOUT OUR COMPANY? Know products, size, income, growth projections, reputation, image, goals, awards and achievements, management talent, management style, people skills, history and philosophy. Don t say you do not know much... you should state that you would like to know more. WHY DO YOU WANT TO WORK FOR US? 309 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

311 Specify that you wish to be part of a company project; you would like to solve a company problem or because you can make a definite contribution to specific company goals. WHAT CAN YOU DO FOR US THAT SOMEONE ELSE CANNOT? Relate you re past experience, which represents success in solving previous employer problems that may be similar to those of the prospective employer. Mention the unique qualities in you, which make you, stand out from the crowd. These qualities should be such that would be an asset to the organisation. WHAT DO YOU LOOK FOR IN A JOB? Keep your answer opportunity-oriented. Talk about the opportunity to perform and be recognized. WHAT CAN YOU BRING TO THE JOB? Emphasis on the skills and qualities you have, and those that the organization is looking forward for in the prospective employee. WHY ARE YOUR LEAVING YOUR PRESENT JOB? Stick to one response. Don t change answers during the interview. Give a group answer if possible - Our office is closing. Another possible answer is We agreed to disagree. WHERE DO YOU SEE YOURSELF IN FIVE YEARS TIME? State your professional objectives. Be practical and honest. Do not give replies, which May not sound honest or realistic like I want to live and die for this organisation. Always answer in a way those talks about your progressive attitude. You may say I want to expertise on my skill during my association with this organization and after working for say 2-3 years in this organization, I would be looking forward for a position at Middle Management / top management. This would be widening my horizons of experience and knowledge. DESCRIBE WHAT AN IDEAL WORKING ENVIRONMENT IS ACCORDING TO YOU? Where people are treated as fairly as possible. WHAT ACCOMPLISHMENTS HAVE GIVEN YOU THE MAXIMUM SATISFACTION? Name the projects/tasks, which you have successfully completed, and refer to the new skills that you learned out of it. You may also mention the extent to which you enjoyed yourself while you were associated with the project. IF I SPOKE TO YOUR PREVIOUS BOSS, WHAT WOULD SHE/HE SAY ABOUT YOUR GREATEST STRENGTHS AND WEAKNESSES? This threat of reference check question almost always produces honesty and perspiration too. It is important, in your response, to be honest but not too negative. HOW MUCH DO YOU EXPECT IF WE OFFER YOU THIS POSITION? Be careful; the market value of the job may be the key answer - My understanding is that a job like the one you are describing may be in the range of... WHAT WAS THE LAST BOOK YOU READ? MOVIE YOU SAW? Talk about leisure books to represent balance in your life. 310 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

312 HOW WOULD YOU DESCRIBE THE ESSENCE OF SUCCESS? ACCORDING TO YOUR DEFINITION, HOW SUCCESSFUL HAVE YOU BEEN SO FAR? A sense of well-being... Pretty successful with the usual ups and downs. At some point in every interview, the interviewer would ask the applicant if she/he has any questions. It is important that the applicant has some questions - and some good ones - because questions can reveal as much about the applicant as answers. BEHAVIORAL-BASED QUESTIONS Questions in behavioral-based interviews focus on past experiences to assess specific skills required for the job. The interviewer is looking for detailed answers regarding a situation, your actions/behaviors, and the results/outcomes of a time you demonstrated the specific skills the employer is seeking. Some sample questions may include: Describe an accomplishment. What did you do to make that happen? Describe a time when you worked on a team. What was your contribution? Describe a time you managed to accomplish multiple tasks. Tell me about a situation where you demonstrated your leadership ability. Describe a specific occasion when you conformed to a policy you did not agree with. Describe a problem you ve had on the job. Tell us how you solved it. Describe a significant written document or report that you had to complete. Give an example of how you handled a conflict with a co-worker. Describe a time where you had to complete a task that you truly disliked. Tell me about a weakness you have that you are trying to improve. Describe your experience with speaking to large groups. Tell me about a time when you performed well in a stressful situation or crisis. Describe a time when you had to think on your feet to solve a difficult problem. ANSWERING QUESTIONS RELATING TO THE PAY PACKAGE Discussing salary can be challenging. As a general rule, a candidate should not bring up the topic of compensation and benefits until the employer extends an offer or brings the topic into the interview conversation. Know your worth based on your current level of skills and experience. If asked about salary expectations, you can respond in a variety of ways: Give a broad range (e.g. With my background and qualifications I hope to be making somewhere in the range of Lakh per annum. ). The range should be realistic and based upon prior research of starting salaries in the industry, for the position being discussed and the location. Sidestep the question politely e.g. I m sure that if you make me an offer it will be commensurate with my qualifications and the current salary structure of your industry. Once you receive a job offer, asking about salary and benefits can be tricky. Ideally, the company will broach these subjects. If you can ask specific questions about the medical/dental insurance, life/disability insurance, retirement, and vacation/sick leave, stock options, start dates, signing bonuses, moving expenses and additional benefits, the company may define the salary package to you. The time to negotiate salary is only after a job offer has been extended, but before you accept. 311 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

313 INTERVIEW FOLLOW UPS: DO S AND DON TS Like any other marketing strategy personal selling and follow-up also matter a lot, so consider these key rules and strategies for following-up your job interviews. Be proactive and consider follow-up a strategic part of your job search process. Follow-up can give you just the edge you need to get the job offer over others who interviewed for the position. At the end of the interview, ask the employer about the hiring decision. Rigorous follow-ups may show your enthusiasm and desire for the position, but to some extent only. It should not look as though you are desperate. Obtain the correct titles and names of all the people who interviewed you. (Ideally, get each person s business card.) Write individual thank you notes or letters after the interview to each person who interviewed you. Show appreciation for the employer s interest in you and do remind the employer about why you are the perfect person for the position. Don t send it through the a medium buy which it may not reach the targeted persons; make sure you know the best method of reaching the employer, whether by regular mail, , or fax. In your thank you letter, avoid any errors (mis-spellings or typos). Follow-up with a telephone call. Talk to the employer within a week to ten days (or sooner, if the employer had a shorter timetable) to ask about the status of the position. Continue to build rapport and sell your strengths during the phone call. Alert your references that they may be getting a phone call from the employer. Be patient. The hiring process often takes longer than the employee expects. Continue the follow-up, especially if the employer has asked you to do so. Remember the adage about the squeaky wheel getting the oil! However, make sure that you don t go overboard and annoy or bother the employer. Continue job-hunting, even if you feel confident that you will get a job offer. Go on appearing for other interview opportunities that are available. Don t place too much importance on one job or one interview; the right opportunity may still be awaiting you. Do use other job offers as leverage in your follow-up -- to get the offer you really want. Maintain good networking with interviewers; don t burn any bridges if you do not get a job offer. Try and turn the situation into a positive by bringing the interviewer(s) into your network, possibly even asking them for referrals to other contacts. EVALUATION SESSION: WHERE YOU NEED TO IMPROVE FOR FUTURE? REFLECT & EVALUATE YOURSELF After each interview, evaluate how you did, and determine how you might improve in future interviews. Evaluate your interviewing strengths and weaknesses. Make each interview a learning opportunity and continuously improve your interviewing skills. Evaluate yourself by asking these questions. Did I Prepare for the interview. Assess my skills and qualifications well. Research about the employer and the specific position requirements. Practice answering typical questions. Prepare questions to ask. Arrive early. Dress professionally. Answer all questions effectively. Shake hands and smile. Support my skills and accomplishments with specific examples. State my career goals and motivation for this type of career. 312 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

314 Ask good questions to indicate knowledge of and interest in the employer. Maintain good posture, eye contact, and a positive attitude. Ask about follow-up and the next step in the interview/hiring process. Close the interview with summary of skills, state my interest, and say thanks Make detailed notes about questions asked and topics discussed. Mail a thank-you letter within 24 to 48 hours to the interviewer. JOB INTERVIEWS: REJECTION FACTORS Low grades and low level of accomplishment. Unimpressive personality, negative attitude, lack of self-confidence, timid, hesitant-shy or too introverted. Lack of goals/objectives/ vision in life, poorly motivated, unaware of his/her own interests, indecisiveness, poor planning. Lack of interest in the type of business for which they are applying for, lack of interest in the company, not interested in the type of job the company has to offer. Poor expression, poor speech, inability to sell one s professional qualities. Unrealistic salary demands, more interested in salary than in opportunity, unrealistic expectations, over emphasis on management positions, unwilling to start at the bottom. Poor personal appearance, lack of neatness, careless dress, casual approach. Lack of maturity, missing leadership traits. Failure to get information about the company, lack of preparation for the interview, did not read the literature/go through the website of the company. Objection in traveling, rigid geographical preference, unwilling to relocate or move to new place. Excessive interest in security and benefits. WHEN YOU RECEIVE A JOB OFFER If you want the position, you may accept immediately. If you want to think about the offer, you may ask for some time to consider the offer (ask for a few days to a few weeks). This implies that you are treating the offer quite seriously. ( I am interested in your offer. When can I get back to you about my final decision? ). Stalling to reply to an offer in hopes of receiving a different offer from another employer, however, is inappropriate. In this case, you should contact the other company and let them know you have another offer in hand and want to know when they would be making their hiring decision. If you have not heard from a company by the indicated date, contact the company representative ( I m calling to inquire as to my status in your hiring process. When do you expect to make your hiring decision? ) You can then make the most informed decisions for your future. Accepting a job offer should be done in good faith. Once you have accepted an offer, professional ethics suggest that you withdraw from further interviews with other employers. With a letter or phone call, politely inform any other employers, who have offered you positions, of your decision to accept employment with another organization. If you accept an offer in person or on the telephone, write an acceptance letter also. Congratulations! ZEROING DOWN: WHAT IT REQUIRES TO BE PART OF THE SERVICE INDUSTRY Below is a table describing the various positions open to graduate youth in the Service industry. An approximate average 313 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

315 of salary packages and industry specific work environment that may be expected are also given. INDUSTRY POSITION APPROX. SALARY SLAB PER MONTH (Rs) INDUSTRY ADVANTAGES AIRLINES Cabin Crew 15,000 onwards Excellent exposure Airport Ground Staff 5,000 onwards -do- Airline City Office Staff 5,000 onwards ---do--- MEDIA Radio Jockey 15,000 onwards Quick Recognition ITES/BPO BPO Executive 4,000-12,000-30,000 High pay package, freedom ITES/BPO Call Centre Executive 7,000-12,000-35,000 High pay package, freedom ENTERTAINMENT Event Manager 6,000-25,000-1 Lac Fun & Creative INSURANCE Back Office Executive 7,500-12,000 Flexible work hours HEALTHCARE Nurses 6,000 onwards Opportunity for International Exposure TELECOMMUNICATIONS Sales Executive 5,000-6,500 Very young Industry, quick growth potential RETAILING LEISURE LEISURE Customer Service Associate Customer Relationship Executive Sales & Marketing Executive 5,000-6,500 Wonderful work environment 6,000 onwards Fun, innovative 6,000-8,000-15,000 Dealing with elite class, networking opportunity DESIGN Fashion designer 10,000-15,000-30,000 Creative, glamorous DESIGN Industrial / Product Designer 10,000 Highly creative and rewarding FMCG Sales Executive 7,000 onwards Networking Opportunities AIRLINES: Getting into the Airline industry, which is considered as one of the most glamorous industry, is possible through any of the following positions: Cabin Crew / In-flight crew Ground Staff/ Customer care staff at the airport Reservations staff / City office staff Security staff 314 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

316 These positions have different requirements, which have been briefly described below: CABIN CREW: Cabin crew is the front face of an airline and is supposed to carry the service spirit of the airline right to the customer. There is great importance for specific physical attributes in this job position. The prerequisites for this post vary from domestic airlines and international airlines. For domestic Airlines, the following are taken into consideration: Educational Qualification : +2 (Higher Secondary Education) Height for Girls : Minimum 5ft 2 inches Height for Boys : 5ft 7 inches Weight : proportionate to height Eye Sight : Normal 6X6 vision (without glasses) Skin : Clear skin with no scars or blemishes Health : Sound health and free from any chronic disease Other attributes : Team Worker, Pleasing personality, Outgoing, Enthusiastic, Punctual and Efficient, Caring, Ability to handle difficult situations, Crisis management skills, Communication skills These are the exceptions in case of International Airlines: Educational Qualification : Graduation Height for Girls : 5ft 3 inches Height for Boys : 5ft 8 inches Hospitality Industry looks for the following qualities in their employees: Self Motivation Self Management Well Groomed Cooperative Punctual and Efficient Self Directed Good Work Attitude Team Spirit Problem Solving Empathetic Sympathetic Adaptable Knowledge about Hospitality Industry Travel & Tourism industry seeks candidates with following soft skills and assets : 315 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

317 Friendly Self-Motivated Well Groomed Cooperative Punctual and Efficient Self-Directed Good Work Attitude Team Spirit Problem Solving Empathetic Adaptable Knowledge about Travel Trade BPOs & ITES sectors hunt for people who have subsequent dexterities: Good communication skills Fluent English speaking and writing skills Neutral accent (no heavy regional touch-for voice operations) Non-MTI (Mother Tongue Influence) Good Listening Skills Flexible Can work under stress Good team player Positive attitude and value based outlook Patience, Perseverance and Adaptability Desire to learn and grow with the organization Proactive approach and an ability to take initiative Fluent with PC, good typing speed and Internet usage Work Areas in BPO sectors are as follows: Customer Service Technical Support Human Resource (Payroll processing, employee records maintenance) Finance & Accounting Transaction Processing Engineering Design Remote Education Market Research Data Search Network Consultancy Services provided by BPOs: Tele-ordering Logging Complaints Credit Card Activation Selling Inquiring Collections Job Locations of BPOs: Gurgaon Bangalore Mumbai Delhi 316 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

318 Chennai Hyderabad Followings are the proficiencies to be part of fast growing Retail Industry: Exceptional Selling Skill: Direct Selling Enthusiastic and Chirpy Friendly, talkative and bright Team Spirit Customer Care & Guest Handling Organizing Skills Communication Skills: good command over local as well as English language Pleasing Personality Work Areas in Retailing: Customer Sales Representative Logistics Management Visual Merchandising Job Locations for Retailing: Delhi Mumbai Kolkata Chennai Bangalore Event Industry is looking for youngsters with following qualities: Creative Mind Attention to detail Scheduling Ability Presentation Skills Client Management Good Communication Skills Energetic & Enthusiastic Dynamism Networking Skills Organisaning Skills Crisis & Situational Management People Management Sales Finer understanding of the customer psyche Knowledge of the market Excellent communication skills Patience Negotiation Skills Interpersonal Skills To be part of Insurance Industry one needs to have : Graduate with Commerce, Science or Statistics background Attention to detail Good Analytical Skills Perseverance Pleasant Disposition Dedication Hardworking Smart Health Care Service are looking for professionals with certain skills like: Graduate with diploma in Nursing Attention to detail 317 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

319 Caring disposition Quick thinking The fast Growing Telecom Sector is looking for youngsters with : Good Communication Skills Pleasant Personality Selling Skills Situational Management Handling Human Relationships Quick Thinking Multi lingual Skills Tact 318 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

320 CHAPTER 11 GLOBAL, NATIONAL, REGIONAL EMPLOYABILITY SKILLS COMPARATIVE ANALYSIS Let us begin by enumerating the important types of skills required by modern corporations. Corporate Give Weightage to: 1. Communication Skills 2. Interpersonal Skills 3. Problem Solving Skills 4. Thinking Skills 5. Analytical Skills 6. Leadership Skill 7. Business Skills 8. Job Knowledge 9. Academic Performance 10. Contacts, Networking, References- 11. Family Background 12. Commercial Basic Orientation 13. Extra Curricular Activities Leading to Over all Impressive Personality (Source: ITFT-Chandigarh Research Center) Top 60 Soft Skills The Workforce Profile defined about 60 "soft skills", which employers seek. They are applicable to any field of work, according to the study, and are the "personal traits and skills that employers state are the most important when selecting employees for jobs of any type." Top 60 required Soft Skills 1. Ambition 2. Vision 3. Common sense 4. Positive attitude 5. Decision Making 6. Self motivated 7. Good personal appearance 8. Communication Skills: Grammar, Pronunciation, Clarity of content,tone and Audibility 9. IT Skills 319 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

321 10. Creativity 11. Handling Pressure 12. Multi tasking 13. Etiquettes and mannerism 14. Working with deadlines 15. Ability to take challenges 16. Adaptability 17. Confidence 18. Resilience 19. High self esteem 20. Cooperation 21. Reliability 22. Personal energy 23. Honesty 24. Team skills 25. Rule abatement 26. Dependability 27. Personal integrity 28. Positive work ethic 29. Assertiveness 30. Receptive 31. Critical thinking skills 32. Interpersonal skills 33. Motivational skills 34. Punctuality 35. Ability to maintain balance between personal and professional life 36. Caring about company's success 37. Awareness about business working 38. Commitment to job 39. Appropriate body language 40. Making an appropriate eye contact 41. Willingness to work beyond traditional eight hour system 42. Ability to comprehend and document whatever heard 43. Ability to relate to co-workers 44. Willingness to take responsibility 45. Understanding of basic concepts 46. Leadership Quality 47. Public Relation Skills 48. Ability to take initiative 49. Risk taking ability 50. Good references 51. Work experience 52. Regularity 53. Desire for career growth 54. Awareness about current events 55. Spontaneity 56. Emotional Stability 57. Valuing education 58. Resume writing 59. Empathy 60. Basic Maths Corporate Skills These are generally CEO level skills, but if you are familiar with them you will be in a position to guide your boss towards success i.e. working together for a common goal as a team. You can become a courageous follower as mentioned by Ira Chaleff in his award-winning book Courageous Follower: Standing Up To and For Our Leaders. 320 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

322 These skills include: Political sensitivity. Business and commercial awareness. Strategic awareness. Understanding funding streams and mechanisms. Information management. Organisation and control. Team building. Communication and persuasion. Networking and public relations. Leading change Employability Skills These have to be mastered by employable graduates and fresher s include communication, team working, leadership, initiative, problem solving, flexibility and enthusiasm. Every skill helps us to learn one more as they overlap each other. To quote an example, leadership encompasses a number of other skills including cooperating with others, planning and organizing, making decisions and verbal communication. Verbal communication itself involves various means of communication, some of which you may find easier than others -- talking over the phone, making a presentation to a group, explaining something to a person with a more limited understanding of the topic for example. By improving one skill, you may also improve a number of others. In the context of your career planning and development, they are called career management skills Life Skills These skills are related to the head, heart, hands and health i.e. highly personal and behavioral skills which reflects our personality and naturally helps in personality development. We manage and think with our head. Resilience, keeping records, making wise use of resources, planning/organizing and goal setting is 'head' related managerial functions. Service learning, Critical thinking, problem solving, decision making and learning to learn were related to our thinking processes, which we manage with our head. Functions of the heart are relating to people and caring. How do we relate to people? We relate to people by accepting differences, conflict resolutions, social skills, cooperation and communication. The second function we do through our heart is caring. We care through nurturing relationships, sharing, empathy and concern for others. We give and work through our hands. Community service, volunteering, leadership, responsible citizenship and contributions to group effort -- are our way giving back to society. We work through our marketable skills, teamwork and self-motivation to get the things done. Living and being comes under the functions of health. Healthy lifestyle choices, stress management, disease prevention and personal safety are our prime concerns for better living. Self-esteem, self-responsibility, character, managing feelings and self-discipline must be practiced without fail for our well-being. In a nutshell, the essence of life skills is share well, care well and fare well. 321 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

323 Life skill model: Corporate Habits We think of structure, systems, and values as characteristics of organizations. We usually think of skills as characteristics of individuals. It is true that a company's skills are expressed through its people, but companies do acquire characteristic skills of their own, which are not merely the sum total of skills possessed by their employees. Different companies acquire a high level of skill in certain areas, which they come to possess independently of the particular people who presently happen to be working for them. These corporate skills characterize a company's behavior and distinguish it from other companies. The courtesy and efficiency of a Marriott hotel receptionist are not just qualities of an individual. They reflect attitudes and skills that are imparted by the company to receptionists in all its hotels. The selling skills and service orientation of IBM representatives have become something of a legend in the marketplace. A combination of careful recruitment and comprehensive training is required to create such a consistently high level of behavior by thousands of employees. Even if most of the present employees at Disneyland left the company, next year you would find the new staff behaving in the same cheerful, friendly manner as the old, because at Disneyland pleasant, courteous behavior is a corporate skill. 322 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

324 Skills are corporate habits. They are the instruments through which an organization expresses its personality. No matter how high a company's values, how strong its character, how coordinated and integrated its systems, the practical results of corporate action depend to a very great extent on the quality of the skills it possesses. Skills are the final link in the chain connecting intentions with actions. The decisions of top management determine a company's direction; the will of the organization determines its strength; systems determine its efficiency; and skills determine the quality of its performance. Physical Skills A physical skill is one that involves fine control and coordination of physical movements. Typing neatly without errors, balancing dishes on your arm, flipping pancakes without dropping them, counting dollar bills quickly, serving drinks on a bouncing airplane, cleaning glass without leaving streaks on it, packing a suitcase so that clothes do not get wrinkled, keeping one's desk and drawers clean and orderly are basic physical skills required in business. How many companies actually enumerate all of the physical skills required to do each job perfectly and recruit or train people accordingly? When hiring a typist, companies usually look for one or two skills and very often get only what they looked for. At least one middle-sized company we know did not even do that. It hired several secretaries who did not know how to type! Typing quickly without errors is only part of the job. There are secretaries who can do that but cannot fold a letter into three equal parts or file papers systematically or answer the telephone in a friendly manner or report a message accurately to the boss or remember the work that has been assigned to them. Has your secretary ever come in with a letter you drafted three weeks ago and gave for typing but that was misplaced and never went out? These are not all physical skills, but they are all essential skills for doing the job well. How sweet and easy life becomes when you have a secretary who places papers on your desk in a neat and orderly fashion with each sheet in its right, logical sequence and nothing missing. But for many executives, that is just a dream. Technical Skills A technical skill is one that requires mental knowledge of a mechanical apparatus or process. Technical skills have been an essential part of production, maintenance, research, and product development for a long time. But with the extension of sophisticated automated equipment to the office, the need for technical skills has dramatically increased, even for non production jobs. Many people are struggling to cope with all these newfangled gadgets. Have you ever noticed cashiers taking longer to ring up a sale on an electronic register than on the old manual machines? Probably the staff received a half-hour demonstration and a few minutes of training. They learn the skill while the customer waits. Most companies certainly do acquire technical skills in many, if not all, of the areas where they are required. Our point is that very often the level of competence attained is barely the minimum that is necessary to function and only rarely the maximum that is required for high performance. Frequently, complete training is given to only one or two persons in a department, and the others are expected to pick it up from them. IBM learned the value of maximum-level technical skills 40 years ago. Semiskilled machine operators used to sit idle for several hours a week waiting for the set-up person to come around. Then Tom Watson suggested that the operators be taught to set the machines themselves. All that was needed was a few days of additional training. As a result, output and quality of production both increased, and so did job satisfaction. When the company made the jobs bigger, workers were more interested and more enthused about their work. Enlarging the scope of each job and expanding the skills of each worker became corporate policy at IBM. Organizational Skills As an engineer must have the ability to make machines work properly, an executive must be skilled in making systems run smoothly. Organizational skill is the ability to execute work in a methodical and systematic manner. Orderliness and punctuality the capacity to arrange tasks in the most efficient sequence and to execute them at the appropriate time is the hallmark of organizational skill. Of this capacity Lawrence Appley, former president of the American Management Association, said: 323 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

325 Human beings are, by nature, unorganized and they resist orderliness. Organizing one's work is a matter of discipline and concentration. If you want to know what to expect to see in a plant, in the way of maintenance and house-keeping, visit first the superintendent's office. The chances are pretty good that if he and his work are orderly and neat, the plant will reflect it. If he is sloppy and disorganized himself, you are quite likely to find that reflected also. Organizing one's own work is a management skill, and when it is exercised to a high degree, it is reflected throughout an entire organization. It is easy to recognize the presence or absence of organizational skills in a company as a whole. Long lines at the service counters, late departure of shipments, sending the wrong product to the wrong customer or the right product at the wrong time, delays of all types, waste of every description and variety, disorderly stockrooms and missing inventory, misplaced correspondence, lost orders or money, and general confusion are a few of the symptoms that organizational skills are lacking. Some companies excel in the strength of their organizational skills. Marriott's capacity to open up 15 to 20 major hotels a year while maintaining high-quality service in all its older ones is a premier example of corporate organizational skills. Social Skill A social, or interpersonal, skill is the capacity to carry out a task involving other people effectively in a socially acceptable or pleasing manner. Giving a helpful suggestion to a colleague, correcting the errors of a subordinate, revealing a fatal flaw in the boss's pet scheme, selling anything, replying to a letter politely, displaying tact in handling problems and complaints, negotiating a contract, motivating others to work harder, and clearly communicating your ideas and intentions are just a few of the areas in which social skills become important. John Huck, of Merck, says: "Most very good people, who don't succeed, don't succeed because they do not relate well with people. Interpersonal skill [when it is absent] is the skill that most frequently is the reason for failure." Social skills are required at every level and in every department of a company, because interpersonal relationships are an activity in which every employee are engaged almost all of the time. Some companies have recognized the importance of these skills and actively recruit or train for them, particularly in the areas of customer service, negotiations, communications, and sales. Teamwork and cooperation are near to the heart of Northwestern Mutual's personality, and the company recognizes that interpersonal skills are essential for fostering these values. At Northwestern Mutual, as in many companies we visited, the most common reason for a manager's not getting along is lack of skill in working as part of a team rather than lack of technical competence. Communication skills are required at the lowest as well as the highest levels of a company. Anyone can answer a telephone, but not everyone can handle a call from an irate customer who just spent five days trying to make a new computer work properly, only to discover that the machine is defective. That requires calm nerves, a soft voice, plenty of patience and humility, and a genuine capacity to please other people. Coca-Cola's recent negotiations with 250 independent bottlers illustrate the importance of social skills for negotiating. Under the perpetual-franchise contract Coca-Cola signed in 1899, its U.S. bottlers have a fair amount of leverage over the company. Yet Coca-Cola succeeded in reorganizing and revitalizing the entire distribution system through the negotiation process. As one executive expressed it: "This is a company that has to use persuasion almost above every other business ability. Every ounce that we can pull out of this bottler system is done to a great degree by persuasion." Social skills are indispensable for IBM to fulfill its mission of being the best sales organization and giving the best customer service of any company in the world. IBM was not the first to market a commercial computer. Remington Rand did that in 1951 with its Univac computer. Although Univac was considered technically superior as a product, IBM was far more successful in dispelling customer resistance to the new technology. By 1956 the race was over. When the dust cleared, IBM had won 85 percent of the U.S. computer market, and it has never looked back since. As Time put it, IBM's "salesmen were so knowledgeable and thoroughly trained 324 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

326 that their very presence inspired confidence. More than anything else, it was IBM's awesome sales skills that enabled the company to capture the computer market. Managerial Skills Physical, technical, organizational, and social skills are capacities that can be possessed by an individual and expressed in his or her work without reference to the work of other people or an organization. But there are also higher-order skills that are broader in their scope and that influence a wider field of activity. These are managerial skills. An organization consists of many individual resources people, ideas, time, energy, money, materials, and so forth. It also consists of many physical, technical, social, and organizational skills orderliness, punctuality, technical know-how, social poise, the ability to communicate, the capacity to organize, and so on. Managerial skills have the ability to combine, coordinate, and integrate the utilization of all these resources and the expression of all these skills in order to accomplish the goals of the organization. Managerial skills have the power to unite all these things for a common purpose. Managerial skills involve the capacity to conceive of a work in its entirety, seeing all the relationships between its component parts, to plan out all the necessary steps for its accomplishment, and to direct execution in order to complete the task with the resources available for the purpose. Managerial skills are possessed not only by individuals. They can become institutionalized by a company as part of its capacity to execute work. In other words, companies as well as individuals can be characterized by their managerial skills. These skills are of several types. 1. Conceptual skills. Managers should have the ability to understand their work in its totality and conceive of its place in the wider organizational framework. In the absence of this skill, each person, activity, or department functions in isolation or opposition to others. The organization is fragmented, inefficient, and chaotic. You have a situation like Geneen described everyone "thinking of his own terrain, his own people, his own duties and responsibilities, and no one thinking of the company as a whole." 7 General Mills tries to actively foster this wider perspective among its managers in order to preserve the integrity of a highly decentralized organization of semiautonomous divisions. 2. Planning and decision-making skills. Thinking work out in advance, planning, and making decisions are crucial management skills. Planning identifies objectives. Decision making provides the will to achieve them. Unfortunately, these two skills are often exercised in isolation from each other. Planning without deciding is like a Barmecide feast sheer speculation. Deciding before planning is to act before you think impulsiveness. Many companies draw up estimates of future performance over a quarter, a year, or a decade based on current trends and then watch to see how close their projections were to their actual performance. They use planning as a tool for prediction, like the weather forecaster, without ever linking it to the decision-making process. These companies possess only half of the skill. Planning becomes a meaningful management skill only when it forms the basis for decisions. Companies that decide what their performance should be and set the plan projection as a goal to be realized combine the conceptual powers of the mind with the executive powers of the will. ITT under Geneen was a classic example of this type. Geneen understood the power of an idea, a goal, when it is supported by a decision. "Decide what it is you want to do and then start doing it," he said. Planning supported by a commitment to act links the objective of the psychic center to the will of the organization. The decision is critical. As Iacocca said, "If I had to sum up in one word the qualities that make a good manager, I'd say it all comes down to decisiveness." 9 3. Skill in exercising authority. The exercise of authority involves controlling people through discipline and motivating them positively through freedom and delegation of responsibility. The strength for exercising authority comes from the will, but the expression is basically a skill. A great deal of skill is required by a manager or an organization to exercise authority in the right form and measure to suit every situation. When the skill is absent, the organization is either threatened by anarchy as Chrysler was before Iacocca or stifled by authoritarianism as Ford was during the 1930s. 325 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

327 The manager's authority is derived from functional position and role within the organization, not from personality. Yet many managers behave as though the power they wield is their very own and they should be implicitly obeyed, just because they demand it. When authority is exercised as a form of personal power, it rubs people the wrong way and offends them. They become aggressive, defensive, resistant, or resentful. It requires skill to exercise authority as the job requires it in order to get work done properly without asserting one's ego. It requires skill to know when to explain and when to instruct. Often an instruction cannot be executed properly unless it is preceded by a lengthy explanation to clarify the intention. But when a lengthy explanation is given to justify a disagreeable decision, it erodes the manager's authority. It requires skill to correct the shortcomings of subordinates without creating offense or bitterness. Perhaps the greatest skill of all is required for a manager to relate to subordinates in a friendly manner without undermining his or her authority or relinquishing power by becoming one of the groups. 4. Time-management skills. Management of time is a complex skill that involves planning, decision making, organization, and delegation of work. Most managers are continuously involved in work, but that does not mean they maximize the utilization of time. Managing time effectively means to always be doing the most important work to be done and delegating other responsibilities to subordinates. Most managers plan out their schedule for the week or the month. How about planning for tomorrow morning? The clearer the mind and the more detailed the planning, the better the management of time. But time management also depends on strength of will. The stronger the will, the faster the work is accomplished. When we are tired or indecisive or weak, discussions drag on, decisions get postponed, and work gets delayed. Utilizing time to the maximum requires quickness but not hurrying. Hurrying is a nervous trait connoting agitation, stress, impatience, and anxiety. An efficient manager or company learns to think, decide, and act at high speed without agitation or disturbance. For Tomas Bata, "If anything had to be done, it had to be done on time All the planning techniques and administrative organization were nothing but instruments helping the human will and resolution to do things on time." Skill in developing people. The most important managerial skill for the long-term growth of the organization is the ability to identify and develop human potentials, to recognize unexpressed talents in individuals, to help them acquire new or greater skills, and to delegate responsibilities that will bring out and fully utilize all their latent capacities. The greatest power a manager or an organization can wield is not the power of money or technology. It is the power of people. The ultimate art of management is to foster the growth of the organization by fostering the personal growth of the individuals within it. When a corporation has as its highest value the development and fulfillment of the individual, and when it possesses the knowledge and the will to strive toward this goal, it releases power for endless expansion and a self-generating momentum for enduring success. Psychological Skills Finally, there is a whole range of abilities that are basic psychological skills of living. They are extremely useful for managing a wide range of situations in life and become more and more indispensable as one rises to higher levels of human interaction. 1. Factual reporting. Learning to distinguish a factual from a false report is not easy. People tend to report their thoughts, opinions, and interpretations instead of the facts. Managers who fall prey to inaccuracies, exaggerations, rumors, gossip, and unfounded criticism of other staff members invariably land in trouble. "The highest art of professional management," according to Geneen, "requires the literal ability to 'smell' a 'real fact' from all others." A manager must become "a connoisseur of unshakeable facts." Listening. Listening is a skill and an art. Most people are anxious to talk and express their ideas. The person who knows how to let the other person speak has the skill and self-control needed for growth. As Delta's Hollis Harris said: "The most important skill for a manager is being able to deal with people. A good people person knows how to listen, has to train himself how to listen. You have to work on it. You have to have the capacity to relate to people at their level." Bill Marriott, Jr., remarked: "Managers get in trouble when they stop listening to their staff. If you stop listening to your people, you're in big trouble." 326 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

328 3. Empathy. Once when Churchill visited the United States to meet President Roosevelt, FDR gave instructions that no one in his party should mention the name of Jawaharlal Nehru, who was then leading India's campaign for total independence from Britain. At the mention of Nehru's name, Churchill had been known to fly into a rage, and FDR wanted to avoid any embarrassing situation. Despite the president's instructions, while he and Churchill were chatting at a reception, one of the guests asked Churchill a question about Nehru. FDR quickly intervened with a blank expression on his face, "Which Nehru?" Churchill was pleased beyond measure by Roosevelt's feigned ignorance and kept his composure. The capacity to know how another person thinks and feels and to honor his or her thoughts and sentiments is a consummate skill in human relations. One of the keys to Delta's high quality of service is C. E. Woolman's constant admonition to his employees that they "put themselves on the other side of the counter," identify with the needs of the customer. This skill is central to Coca-Cola's management philosophy, too. "You have to be able to see things from the other person's point of view," one executive explained. 4. Judging people. Perhaps the greatest skill a manager can possess is the capacity to judge people's character, motives, and abilities objectively and perceptively. Contrary to common belief, it is a capacity that can be acquired through training. Woodruff, who was notable for his lack of other talents, possessed this one in good measure. "He has ability for finding good men," as one Coca-Cola executive said. Iacocca acquired this skill from the psychology courses he took during college. He says, "As a result of this training I learned to figure people out pretty quickly. That's an important skill to have." 5. Self-awareness. Have you ever seen someone repeating the same old folly for the umpteenth time as if it were the very first and being shocked or outraged when it once again leads to trouble? Just about everyone does it. Our lives consist of many patterns that tend to repeat over and over. The capacity to observe these patterns in the lives of other people and of organizations gives a great and very useful knowledge. Observe, for instance, the recurring pattern of crisis that overtakes Chrysler once every decade, getting a little worse each time. The capacity to observe the same patterns in our own lives brings wisdom and power for enduring success. 6. Silent will. Speaking pleasantly carries a power. "There is a force hidden in a sweet command," so goes the proverb. Speaking sparingly carries an even greater power. "A great man is sparing in words but prodigal in deeds," said Confucius. 13 and silence creates the greatest power of all. "Nothing," wrote de Gaulle, "more enhances authority than silence." 14 The English writer Thomas Carlyle once commented that "silence is the element in which great things fashion themselves together; that at length they may emerge, full formed and majestic, into the daylight of Life, which they are thenceforth to rule." 15 The two types of speakers that are most effective are the ones who speak in a loud voice, projecting their energies into the audience, and the ones who speak very softly, so that the audience must strain to hear. Of the two, the first is more dramatic but the second can be infinitely more powerful. Controlling the volume and intensity of speech to a soft or moderate level is far more difficult than it sounds. It requires self-restraint. When an idea or question enters the mind, it creates a powerful urge for expression that can be hard to contain. When you are able to master that urge by postponing expression until the proper moment and then speaking in a soft tone, using only the minimum number of words necessary, your words carry a far greater power for effecting results. One of the most important applications of this skill is in meetings. Each person present in a group has his or her own ideas, opinions, preferences, and suggestions about what should or should not be done. The moment you express your idea, there is a good chance of raising opposition and counterarguments from others, which neutralize or cancel your suggestion, no matter how good the idea may be. But if you restrain the urge for expression, very often the same idea will be expressed by others or your very silence will evoke a more favorable atmosphere and an invitation to speak. When people speak softly, they think more clearly, work more efficiently, and feel calmer and fresher than otherwise. When an organization practices soft speech, it becomes charged with a tremendous power. If the effort starts with top management and works its way down, two things will become apparent. Speaking softly is one of the most effective means of improving performance, and it is also one of the most difficult! All right, if you cannot follow it completely, at least reduce the volume of voice by 10 percent. Efficiency will double. 327 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

329 The Ultimate Skill Each person develops one or two skills to a higher level than the average. This is the individual's strong point, which he or she likes to display as often as possible. If the person is a good mechanic, she takes every opportunity to inspect or comment on the operation of a machine. If the person is a good communicator, he is always looking for somebody to communicate something to. Whether the person's skill is in settling quarrels, judging people, making people happy, designing systems, or cutting costs, he or she constantly seeks opportunities to express it. So far, so good. The problem comes when someone insists on extending a skill to areas where it is ineffective or inappropriate. "To a hammer," says an old proverb, "everything looks like a nail." The car mechanic starts tinkering with a computer. The communicator communicates confidential information. The cost cutter tries to hold down expenditure in a new experimental R&D project. The manager who makes people happy tries to please customers by reducing prices to below cost or tries to please his or her staff when they disobey legitimate authority. The skill of skills is to know what is the proper time and place for exercising and refraining from exercising each skill. The ultimate skill is the capacity to organize all our other skills, coordinate their expression, and rightly choose which one to express in each particular circumstance. Value Implementation through Skills The role of skills is so ubiquitous and so vital to the success of a company that it has led many to believe that skills alone are the key to excellence and that high values and organizational structures are only window dressing. There is truth in this observation, but it is a partial truth. A well-developed individual skill is a very powerful tool. A well-coordinated assortment of skills is a formidable weapon. But for enduring achievement, skill must be inspired by the vision of a goal and commanded by the determination of an inner will. The Taj Mahal is a work of awesome beauty and perfect skill, but its graceful lines and fine details were inspired by an emperor's love for his deceased wife and his desire to immortalize that love in white marble. Vision and will as much as skill are needed to build a Taj Mahal, a Great Pyramid, a great nation, or a great corporation. Nevertheless, the contribution of skill to any high accomplishment is truly enormous and all-pervasive. Whatever a company's values and goals, ultimately they must be expressed in a thousand small details of life through a vast array of well-developed skills. If skills are lacking, the whole process of value implementation comes to naught. It is like building an atomic power plant, sending out electricity through wires across the country, carrying those wires to millions of houses, and then discovering that all your light bulbs have defective filaments. The result no light! It is not enough that the company accepts certain values, establishes standards of performance, and creates systems for achieving them. Every employee must possess all the skills required to make that high ideal a living reality. The figure illustrates the role of skills in the corporate personality 328 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

330 Employability Skills The following table contains the employability skills facets identified in the report Employability Skills for the Future. Skill Communication that contributes to productive and harmonious relations across employees and customers Teamwork that contributes to productive working relationships and outcomes Facets listening and understanding speaking clearly and directly writing to the needs of the audience negotiating responsively reading independently empathizing using numeracy effectively understanding the needs of internal and external customers persuading effectively establishing and using networks being assertive sharing information speaking and writing in languages other than English working across different ages irrespective of gender, race, religion or political persuasion working as an individual and as a member of a team knowing how to define a role as part of the team applying teamwork to a range of situations e.g. futures planning and crisis problem solving identifying the strengths of team members coaching and mentoring skills, including giving feedback Problem solving that contributes to developing creative, innovative and practical solutions showing independence and initiative in identifying and 329 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

331 productive outcomes solving problems solving problems in teams applying a range of strategies to problem solving using mathematics, including budgeting and financial management to solve problems applying problem-solving strategies across a range of areas testing assumptions, taking into account the context of data and circumstances resolving customer concerns in relation to complex project issues Initiative and enterprise that contribute to innovative outcomes adapting to new situations developing a strategic, creative and long-term vision being creative identifying opportunities not obvious to others translating ideas into action generating a range of options initiating innovative solutions Planning and organising that contribute to long and short-term strategic planning managing time and priorities - setting time lines, coordinating tasks for self and with others being resourceful taking initiative and making decisions adapting resource allocations to cope with contingencies establishing clear project goals and deliverables allocating people and other resources to tasks planning the use of resources, including time management participating in continuous improvement and planning processes developing a vision and a proactive plan to accompany it predicting - weighing up risk, evaluating alternatives and applying evaluation criteria collecting, analyzing and organizing information understanding basic business systems and their relationships Self-management that contributes to employee satisfaction and growth visions having a personal vision and goals evaluating and monitoring own performance having knowledge and confidence in own ideas and articulating own ideas and visions taking responsibility Learning that contributes to ongoing improvement and expansion in employee and company operations and outcomes managing own learning contributing to the learning community at the workplace using a range of mediums to learn - mentoring, peer support and networking, IT and courses applying learning to technical issues (e.g. learning about products) and people issues (e.g. interpersonal and cultural aspects of work) 330 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

332 having enthusiasm for ongoing learning being willing to learn in any setting - on and off the job being open to new ideas and techniques being prepared to invest time and effort in learning new skills acknowledging the need to learn in order to accommodate change Technology that contributes to the effective carrying out of tasks having a range of basic IT skills applying IT as a management tool using IT to organize data being willing to learn new IT skills having the OHS knowledge to apply technology having the appropriate physical capacity Skills Up-gradation through Technology Skills such as integrity, leadership, time management, stress management, and communication cannot be imparted through any method of learning conventional or modern it is imperative that skills and behavior are a result of environment, available information and knowledge gained. If a real-life environment can be simulated to familiarize learners with behavioral concepts and decisiontriggering scenarios, training methods can help individuals in acquiring soft skills. E-learning is a preferred method of learning in organizations these days as it is cost-effective and self-paced and allows them to save money and time. With visible advantages, e-learning is fast replacing conventional learning mechanisms in corporate training. However, it is crucial for organizations to understand that individuals still relate better to conventional training. Moreover, a facilitated training is more dynamic than a web-based or computer-based training program. Thus, the most effective way of training should be the blended approach mixing e-learning technology with conventional instructor-led classes. Punjab pioneers satellite education as Badal launches EDUSAT programme Express news service Posted: Jan 03, 2008 at 0000 hrs Chandigarh, January 2 Punjab has become the first state in the country to start education through Satellite Interactive Terminals (SITs) with the launch of a Rs12-crore Educational Satellite Network (EDUSAT). Chief Minister Parkash Singh Badal launched the programme at the headquarters of Punjab School Education Board (PSEB). EDUSAT has been installed under the first phase of the programme, providing the facility of two-way audiovideo interaction with 300 institutions governed by the department of school education, higher education, technical education, medical education and research across the state. The institutions are connected online with the teaching and co-existing classroom ending at the EDUSAT Hub. Speaking on the occasion, Badal said this unique ultra modern project would prove to be a milestone in the advanced education, as it would enable students to interact with the best teachers to meet their educational requirements and fulfill the government s commitment to provide quality education to them. Interacting with students and teachers of District in Service Elementary Training (DIET) Centres of Bathinda, Muktsar, Block Primary Education Office, Lambi and Government Girls Senior Secondary School, Ramgarh in 331 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

333 Ludhiana district through satellite, Badal emphasized the need to revolutionize the educational scenario in the state. He said that conventional education would not help the youth alone in securing better job prospects because vocationalisation of the education was the need of the hour. He said the government has embarked upon an ambitious programme to open skill development centers across the state to impart technical training to improve the chances of employment. The Chief Minister assured that the government would extend full support and cooperation to the EDUSAT programme and for its expansion in coalition with Indian Space Research Organization (ISRO). ISRO supports the EDUSAT programme through a nodal agency Punjab EDUSAT Society for execution of EDUSAT utilization programme in Punjab. Later, Badal told reporters that 14,000 new teachers, including 1000 exclusively for English, would be recruited soon to ensure congenial academic atmosphere for rural students. He said that British Council had agreed to conduct a joint programme with the government for improving the teaching skill of English language teachers in the state. 20 Technology Skills Every Educator Should Have By Laura Turner06/01/05 During the last 15 years, we in education have moved at light speed in the area of educational technology. Whether you are involved in higher ed, secondary ed, elementary ed, or special ed, all of us find it difficult to catch up, keep up, and put up with fast-moving computer-based technology. Not since the introduction of the blackboard have we seen a piece of equipment make such a difference in how we teach. Today, not only do we use computers, but we also have laptops, wireless laptops, and tablet PCs. In addition, we have the World Wide Web, scanners, CD burners, USB drives, digital cameras and digital video cameras, PDAs, as well as video and DVD players. And most educators use a variety of tools-including video, , desktop conferencing, online programs such as WebCT and Blackboard, as well as video conferencing-to teach. Thus, it is no longer acceptable for educators to be technology illiterate. With that in mind, here is a comprehensive listing of the technology skills that every educator should have. Because as computer and associated technologies continue to change and evolve, educators must continue to strive for excellence in their work. Today that includes continued time and effort to maintain and improve their technology skills (as much as some educators do not want to admit). Here are 20 basic technology skills that all educators should now have: 1. Word Processing Skills 2. Spreadsheets Skills 3. Database Skills 4. Electronic Presentation Skills 5. Web Navigation Skills 6. Web Site Design Skills 7. Management Skills 8. Digital Cameras 9. Computer Network Knowledge Applicable to your School System 10. File Management & Windows Explorer Skills 11. Downloading Software From the Web (Knowledge including ebooks) 12. Installing Computer Software onto a Computer System 13. WebCT or Blackboard Teaching Skills 14. Videoconferencing skills 332 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

334 15. Computer-Related Storage Devices (Knowledge: disks, CDs, USB drives, zip disks, DVDs, etc.) 16. Scanner Knowledge 17. Knowledge of PDAs 18. Deep Web Knowledge 19. Educational Copyright Knowledge 20. Computer Security Knowledge E-learning (or electronic learning or elearning) is a term that encompasses all forms of Technology-Enhanced Learning (TEL) or very specific types of TEL such as online or Web-based learning. Nevertheless, the term does not have a universally accepted definition and there are divides in the e-learning industry about whether a technology-enhanced system can be called e-learning if there is no set pedagogy as some argue e-learning is: "pedagogy empowered by digital technology". The term e-learning is ambiguous to those outside the e-learning industry, and even within its diverse disciplines it has different meanings to different people. For instance in companies, it often refers to the strategies that use the company network to deliver training courses to employees and lately in most Universities, e-learning is used to define a specific mode to attend a course or program of study where the students rarely or never meet face-to-face, nor access on-campus educational facilities, because they study online. E-Learning can provide benefits for the organizations and individuals involved. Improved performance: A 12-year meta-analysis of research by the U.S. Department of Education found that higher education students in online learning generally performed better than those in face-to-face courses. Increased access: Instructors of the highest caliber can share their knowledge across borders, allowing students to attend courses across physical, political, and economic boundaries. Recognized experts have the opportunity of making information available internationally, to anyone interested at minimum costs. For example, the MIT Open Courseware program has made substantial portions of that university's curriculum and lectures available for free online. Convenience and flexibility to learners: in many contexts, elearning is self-paced and the learning sessions are available 24x7. Learners are not bound to a specific day/time to physically attend classes. They can also pause learning sessions at their convenience. The High technology is not necessary for all online courses. Basic internet access, audio, and video capabilities are common requirements. Depending on the technology used, students can begin their courses while at work and finish them at home on a different computer. To develop the skills and competencies needed in the 21st century, in particular to ensure that learners have the digital literacy skills required in their discipline, profession or career Bates (2009) states that a major argument for e-learning is that it enables learners to develop essential skills for knowledge-based workers by embedding the use of information and communications technologies within the curriculum. He also argues that using e-learning in this way has major implications for course design and the assessment of learners. Additional advantages of computer-based training over traditional classroom training include the ability to: Pay less per credit hour Reduce overall training time Spread training out over extended periods of time (even months) Bookmark progress (computer remembering where the student left off so they can resume the courses from there) Remain in one location (e.g., home, office, airport, coffee shop, etc.) with no need to travel Receive quality training that bolsters job performance Strategic Planning for Enhancing Employment Opportunities for Punjab Youth If Punjab could impart Vocational Education & Training, rather than only the conventional college education, it would benefit all and have the following additional advantages for the Nation: 333 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

335 Prepare the youth for a vocation of their choice. Build up a formidable Work-Force of International Quality, which would have demand not only in India but in all countries of our Planet. In India only IT training is world class. See how it has and will transform India in the future. (We also produce World Class Engineers, Doctors, Accountants, etc.) In the manufacturing and service sectors there are hundreds of skills and vocations for which there is a worldwide shortage. For example, TV, electrical appliance repair & service, Automobile & Motorcycle repair & service, foreign language skills, Medical and Health services, Hospitality, Tourism, Retailing, Construction, Telecommunications, Electronics, Agriculture, General Engineering, Teaching, etc. The list is very large. For Punjab we need millions of trained people in the area of services for Agriculture, Flori culture, Horticulture, Sericulture, Fishery, Health Care, Tourism, Trading, Services, Business and hundreds of skills for the Manufacturing Sector. We do not see World Class Vocational Education & Training infrastructure, even after 55 years of India's independence. Reduce Unemployment by supplying world-class skilled people required by the Nation and for rest of the World! Reduce Cost & Improve Productivity of Trading, Services and Manufacture by providing skilled Man Power. Run the country with a higher efficiency, lesser wastage and lower cost of operation. Strategies to implement: Public Private partnership scheme to revamp ITI s should start at the earliest, removing all glitches, including finalization of MOU s. The State Government should inform the partner industry about the ITI s allocated at the earliest possible. In this context, we have heard only from the Government of Maharashtra. Skill- Building initiative to be given industry status. NCVT (National Council for Vocational Training) to be restructured with setting up State arms. Industry s role as short term or long term skill provider needs to be recognized and the process should be incentivised. Skill certification should be broad based, identifying the role of the private sector. Short term or modular skill courses to be given priority keeping in view the size of the country and the number of people working in the informal sector. Recommendations for Strengthening Basic Skills To improve basic skills in the formal and informal sectors, the government should undertake the following two reforms: Use innovative approaches to improve the quality of primary and secondary education. The government should revamp the primary and secondary education systems by modernizing curricula and creating a more flexible, responsive education system. Efforts should also be made to introduce television campaigns, national competitions, and summer schools to promote project activities and excellence in public secondary schools. ICT literacy must be given greater prominence in the early years of education to sufficiently prepare students for an increasingly ICT dominated world. To contend with high drop-out rates, programs such as the Mid-Day Meal Scheme, which can increase student attendance in school, must be strengthened. Teachers must be trained adequately and given sufficient incentives so that teacher vacancies decrease and accountability and motivation increase. The quality of education at primary and secondary schools must be regularly monitored by independent testing bodies (Planning Commission 2006). New approaches also must be experimented with to address existing problems. 334 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

336 Strengthen basic skills for the informal sector, including functional literacy. The government should continue to invest in programs that combat illiteracy and help transfer skills to the informal sector by supporting local nongovernmental organizations (NGOs) that provide adequate training to meet the needs of the informal economy. Efforts should include training instructors, developing curricula, and providing financial incentives to encourage external financing of informal-sector training programs. In addition, the government should provide regulatory and financial support for informal education through focused, shortterm courses and programs such as training in information technology (IT) literacy. Innovative ideas should also be considered: for instance, paying workers to attend classes, to compensate for lost wages. Doing so could provide sufficient incentives for workers to attend training programs. The nature of action required by Government of Punjab would involve: Investment in education infrastructure and faculty to increase supply of skilled professionals with relevant skills Investment in training institutions to upgrade skill sets required for remote services o Vocational skills o Communication (written and spoken) o Etiquette Strengthening of the education curriculum to include o Practical knowledge o Know-how and understanding of other countries cultures o Foreign language skills o Compulsory English language skills Creative funding mechanisms so that quality education is widely available Standards and bodies to certify skills to ensure employability by WTO members What are the Required Building Blocks Vocational Skills o Skills required to supplement academics. Occupational Skills o Job Specific Skills required to perform Work. Employability Skills o Generic and portable skills applicable for all industries Psycho-social skills Skills required to maintain psychological sanctity to adapt to social environment Strengthening Skills and Education for Innovation The multidimensional skill set required by the informal sector, encompassing both technical and business management skills, is not adequately provided for by most formal training programs for the sector. Even apprenticeships, the predominant training program for the informal sector, while flexible and self-regulating, are limited in exposing trainees to modern technology and innovative practices. Recommendations for Building Worker and Manager Skills There are three important recommendations for building worker and management skills. They are the following: Improve vocational training. Punjab s vocational education and training systems have thus far been unsuccessful in preparing graduates to meet market needs, particularly because of a lack of interaction with industry. Aligning these systems with market needs requires restructuring including private participation in the management of institutions, curriculum development, and system financing; upgrading infrastructure and instructor capabilities; stronger performance incentives for vocational education and training institutions; and regulatory reform to give training institutions greater autonomy to respond to market skill needs and incentives, to change course offerings, and both charge and retain fees. The abilities of public and private vocational education and training providers should be strengthened to make them more responsive to demand in their offerings. Curricula should be 335 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

337 updated to reflect modern technologies and improve flexibility by mapping the supply of and demand for skills and by ensuring that the private sector is involved in curriculum design (Dar 2006). Punjab Should Establish Human Resource Development Fund (HRDF): Punjab Should Establish Human Resource Development Fund (HRDF) like Malaysia established the Human Resource Development Fund (HRDF) in 1993 to promote enterprise-based training among firms first in manufacturing and more recently in services. HRDF schemes are administered by a council, with representatives from the private sector and various government agencies, and a secretariat. Eligible employers with 50 or more employees are required to contribute 1 percent of payroll to the fund, making them eligible to claim training funding up to the limit of their levy payments in any given year. The HRDF council sets rates of reimbursement, varying by type of training and size of firm (rates are higher for smaller firms). The HRDF also requires firms to spend a minimum amount on training or lose their levy contributions, creating incentives for firms to train rather than poach skilled workers from other employers. The HRDF offers different schemes that give employers flexibility in training in-house or using public and private providers, including second-tier public-private intermediaries such as state-level skill development centers. HRDF funding has created a vibrant training market, with public and private providers competing for resources. It addresses information constraints through public information campaigns, subsidized delivery of training need assessments for SMEs, certification of training providers and wide dissemination of their offerings, and electronic billing to keep employers informed of their levy use status. Recognizing the funding constraints of SMEs, the HRDF council enlists certified providers to act as its agents, collecting from users the fees for which firms are responsible and claiming the reimbursable balance from the HRDF, thus reducing up-front cash outlays for SMEs. Why Talk of Skills? Our reasons are twofold. First, there are many types of skills, and traditionally companies recruit and train only for some of them. Every company recognizes the productive value of physical and technical skills. But there are others that are even more essential to corporate success interpersonal, organizational, and managerial skills that get much less attention than they deserve. And there are still others what might be termed psychological skills those possess an enormous productive power yet are almost completely neglected. Second, there is wide variation in the level or quality of skills companies possess. When we say that an individual is skilled, we imply that the individual possesses both the necessary types of skills for his or her work and a high level of competence in them. The phrase skilled driver does not distinguish the housewife who has been driving her children to school safely for ten years from the professional test-car driver who has survived ten years of high-speed competition without a major accident. The difference is in the level of skill. Here, too, there is an enormous scope for improvement. The role of skills in the corporate personality It is not just managerial and psychological skills at the top and physical and technical skills at the bottom that are needed, but all types of skills at all levels of the organization. The highest psychological skills and the simplest physical ones are necessary for the smooth running of a board meeting. A spilled pot of coffee, wrongly typed numbers, a malfunctioning projector, mixed-up papers, a missing chart, an ill-planned agenda, a poorly chosen word or phrase can all interfere with a billion-dollar decision. So, too, the highest psychological and managerial abilities are necessary for perfect functioning on the factory floor or out in the field. A supervisor who acts on a false piece of information, a manager who moves too closely with his or her team to command their obedience, a sales rep who is late for an appointment, a mishandled machine, a wrongly typed price list, a telephone operator who is cold or rude to an important customer all can have a serious impact on overall corporate performance. And they do have a serious impact on every company every day. As the organization develops, each individual and collective skill has to become more and more smoothly coordinated and fully integrated with other skills at the same level and at other levels of the organization. Factual reporting by top executives is fruitless if the same habit is not acquired at all the levels of management below, from which data are constantly being received. The same is true of every other skill. For an organization to become a single, unified, living whole, all these separate strands of skill have to be carefully woven together. This can be done only when top management recognizes the multiplicity of skills it 336 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

338 requires for high performance and methodically cultivates them at all levels of the organization by education, training, and proper recruitment. This knowledge has to be translated into precise performance standards for each skill at each level, and these standards must be supported by systems for imparting, monitoring, and evaluating levels of skill. Strengthening Engineer and Researcher Skills: Transferring Market-Relevant Skills in Higher Education Recommendations for Making Higher Education More Relevant to Market Needs There are two recommendations for promoting the relevance of higher education to market needs. They are the following: Increase private participation in higher education. To address the growing supply constraint of high-quality education institutions, India s higher education system needs stronger incentives to attract domestic and foreign private participation in higher education and it s financing. Private institutions must be able to charge reasonable fees if they are to be encouraged to invest in education. The November 2006 government agreement to allow both FDI in higher education and foreign universities to set up campuses in India is an appropriate step in this direction. Stronger incentives are also needed for private provision and financing of formal and informal education in particular, encouraging large corporations to establish new universities through public-private partnerships. Increase fiscal and managerial autonomy of universities and colleges. An increase in joint training programs with industry including courses such as small business administration programs for SMEs would help ensure that university curricula reflect market needs. Joint in-service training programs with university participation should be promoted, possibly through matching grants (to strengthen links with industry). Competitive grant programs for academic innovations and performance-based incentives for professors would also foster a more vibrant academic environment better aligned with the dynamic growth in India s knowledge-intensive sectors. Selected higher education institutions should be upgraded to the highest levels, coupled with the provision of competitive grant programs for academic innovations and the introduction of joint training programs with industry and with top foreign universities and multinational corporations. Systematic analysis of qualification exams should be conducted to review the performance of higher education institutions. In addition, the quality of higher education faculty should be improved by using leading institutions as training centers for other faculty, introducing more performance-based incentives for professors, and expanding grant programs for mobility between professors and industry. Efforts should also be made to move to system wide quality improvement, with a goal of two or three leading universities in each state. Placement toolkit For youth employability programme leaders, placement is one of the most difficult things to implement. The difficulty stems largely from the fact that placement systems rely on the contributions, commitment and resources of other people and organizations, external to the programme. A well-functioning placement system needs contact and partnerships with external players and stakeholders as placement is often not the core competence of youth development organizations. Given that there is a high dependency on external players, it is critical to design a placement system appropriate to your programme and context. A placement system is therefore the operationalisation of the exit strategy for the youth participating in your training and development activities. The employers forum. In this model, the youth organisation contacts and persuades representatives of major employers to participate in an employers forum. Regular forum meetings are held to collect information about employer needs and to profile trained youth looking for employment. The youth organisation can negotiate agreements with employers regarding the numbers of trained youth which they will hire or support, but placement remains the responsibility of the youth organisation. These models need strong, established relationships with the private sector, especially, before it can be implemented. The outsourced placement partner. In this model, the youth organisation forms a partnership with a recruitment and / or employment agency. In this model, partners respect and rely on one s another core competencies without trying to replicate them. In this regard, it is possible for the youth organisation to become a shareholder in the recruitment / employment agency. However, as a shareholder, it leaves the issue of find placement for trained youth to the employees of the agency. Placement is therefore completely outsourced to an organisation with proven competence in that area. The entrepreneur incubator. In this model, trained youth are not channelled into employment but rather into entrepreneurial activities. Those activities are supported by a business or entrepreneur incubator either internal or external to the organisation depending on its level of competence in that area. The government must develop Industrial Training Institutes (ITIs) through the private-public partnership (PPP)model 337 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

339 The proportion of Indians who received formal vocational training was the highest among the unemployed, says the report on the status of education and vocational training in India for The findings were recorded for the age group of years. The proportion of those who received formal vocational training was around 3% for the employed, 11% for the unemployed and 2% for those not in the labour forces. The most-demanded field of training was computer trades and around 31% received such training References: National University of Educational Planning and Administration. 3. indiaimage.nic.in/pmcouncils/reports/education/edu-chp6.html - 44k 4. planningcommission.nic.in/aboutus/committee/strgrp/stgp_elmedu.pdf 5. VISION PUNJAB: A CASE STUDY APPROACH BY ITFT CHANDIGARH 6. Opportunities a Year in the Tenth Plan period, chaired by Dr. S.P. Gupta, 7. Member; Planning Commission, Government of India (2002) 8. Ninth Five Year Plan; Planning Commission, Government of India (1999) 9. Task Force on Employment Opportunities, Planning Commission, 10. Government of India (2001) 11. Approach Paper to the Tenth Five Year Plan, Planning Commission/, 12. Government of India (2001) 13. *NSSO: NATIONAL SAMPLE SURVEY ORGANISATION s-new-opportunity / By All India Management Association, The Boston Consulting Group, All rights reserved. Published February Report of Special Group on Targeting Ten Million Employments dated 26 Dec The Economist, "A Survey of Business in India"; June da652571e20036aba1/$FILE/fai_may06.pdf Opportunities a Year in the Tenth Plan period, chaired by Dr. S.P. Gupta, 38. Member; Planning Commission, Government of India (2002) 39. Ninth Five Year Plan; Planning Commission, Government of India (1999) 40. Task Force on Employment Opportunities, Planning Commission, Government of India (2001) 41. Approach Paper to the Tenth Five Year Plan, Planning Commission, Government of India (2001) 42. *NSSO: NATIONAL SAMPLE SURVEY ORGANISATION 43. FICCI Survey on Emerging Skill Shortages in the Indian Industry 338 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

340 CHAPTER 12 THE INDIAN DIASPORA - HARNESSING NRI RESOURCES The word has come to refer to historical mass-dispersions of people with common roots, particularly movements of an involuntary nature, such as the expulsion of Jews from the Middle East, the African Trans- Atlantic slave trade, the southern Chinese during the coolie slave trade, or the century-long exile of the Messenians under Spartan rule. The Indian Diaspora is a generic term to describe the people who migrated from territories that are currently within the borders of the Republic of India. It also refers to their descendants. The Diaspora is currently estimated to number over twenty million composed of "NRIs" (Indian citizens not residing in India) and "PIOs" (Persons of Indian Origin who have acquired the citizenship of some other country). The Diaspora covers practically every part of the world. It numbers more than a million each in eleven countries, while as many as twenty-two countries have concentrations of at least a hundred thousand ethnic Indians. The NRI and PIO population across the world is estimated at over 30 million. As per a UNDP's 2010 report, after Overseas Chinese, India has the largest diaspora in the world, estimated at 25 million, besides being one of the largest "sending" nations in Asia, with an emigration rate of 0.8% out of which 72% work in other Asian countries. The Indian Diaspora falls into three categories. The first category is composed of the indentured labour voluntarily or forcefully taken during the early British era as estate labour to faraway colonies. Many perished on the overcrowded and under-stored ships to Fiji, Trinidad, Singapore, Malaysia, Mauritius, Sri Lanka etc. Those who survived in the colonies and stayed back, became a part of the host country, and in the absence of communication lost much of their cultural traits. They had to struggle hard to reach the top. The early Canadian emigrants had a similar arduous life. What, however, differentiated them was their enlightened nationalism and their resultant role in India's Freedom Struggle. In the second category, are those who had settled in British colonies, mostly the third world, as professionals or to do petty business. The third category of immigrants is made up of the third generation migration simultaneously to the petro-rich Gulf and prosperous states like the USA and Canada. Rapid globalisation and ever increasing sophistication of production process and technology have created a significant wave of movement to the developed west. What began as trickling in the mid sixties have now taken the form of an out-pour. The information technology explosion that began in the last decade has made the real breakthrough for India's teeming computer wiz kids. Migration to these countries was strictly on the basis of time bound work permits. Thus, remittances from the gulf area are substantial and more or less constant. Meanwhile, in countries such as the United States, Canada, and Australia, Indians have made their presence visibly felt through their professions. The Indian Diaspora has received universal recognition for its intellectual contributions, entrepreneurial acumen and enterprise. For example, in the US of America, the Indian Diaspora comprises less than 0.5 % of the population but accounts for well over 5% of the scientists, engineers and software specialists. The wealth generated by the Indian entrepreneurs in Silicon Valley is around $ 250 billion, more than half of India s GDP. In fact, their astounding creativity and entrepreneurial spirit, especially in the knowledge-based industry, has brought them wealth dwarfing the American dream. Today, the 20-million strong Diaspora is looked upon as the vibrant, new face of India that could leverage the country's economic and social growth. 339 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

341 As per the estimates of the Ministry of External Affairs, Government of India, the number of NRI s is now 22 million, of which 50% constitutes the first generation immigrants from India and their immediate families. According to another estimate, there are 25 million NRI s and their number is growing rapidly. (NRI s need for a pro-active policy, The Tribune, Chandigarh). NRI s comprise of just 2 per cent of India s population but their annual income of $160 billion ( Rs 7,84, 000 crore) is comparative to one third of India's national income and 35 per cent of the country's GDP. Amazingly, however, we are still far behind China, whose 50 million Chinese Diaspora has an annual income of $ 700 billion equivalent to 68 per cent to the country s GDP. The per capita income of a Chinese overseas is $14,000. An overseas Chinese has a PCI (Per Capita Income) which is 17 times higher than the PCI of a Chinese while an NRI s per capita income is 18 times higher than the PCI of an Indian. India could well learn a lesson from China where over 70 per cent of the total FDI (Foreign Direct Investment) comes from the non-resident Chinese.(Source: India Today, January 13, 2003) India and its Diaspora In the theatre of development, the competitiveness and growth of an economy is determined by its capacity to acquire and apply new knowledge. In a rapidly globalizing world, learning new ways of doing things depends in no small measure on the ability to integrate with the larger world outside. We live in a world in which the free movement of goods and capital across borders is seen as a virtue. Arguably, it is seen to reinforce the principle of competitive advantage and help spur savings, investment and demand. What is less recognized is that International migration of human capital: the movement of knowledge, talent and skills across borders is central to learning and development. The emergence of significant Diasporas has in recent years brought into sharp focus two key facts. First, there is a large expatriate population of skilled people from emerging economies in the developed world. Second, overseas communities can constitute a significant resource for the development of the countries of origin. The movement of the high skilled and low skilled workers from less to more developed economies and back opens several new opportunities for development. To view the Diaspora only through the looking glass of remittances and financial flows is to take a myopic view. Not all expatriates need to be investors and their development impact measured only in terms of financial contributions to the home country. An overseas community can and does serve as an important 'bridge' to access knowledge, expertise, resources and markets for the development of the country of origin. The success of this bridge is often predicated upon two conditions: the ability of the Diaspora to develop and project a coherent, intrinsically motivated and progressive identity and the capacity of the home country to establish conditions and institutions for sustainable, symbiotic and mutually rewarding engagement. Home countries are now beginning to recognize the need to pursue and promote the dynamic of the Diaspora and development. India has the second largest Diaspora in the world. The overseas Indian community estimated at over 25 million is spread across every major region in the world. Yet, it is difficult to speak of one great Indian Diaspora. The overseas Indian community is the result of different waves of migration over hundreds of years driven by a variety of reasons-mercantilism, colonialism and globalisation. Its early experiences make up a saga of trials, tribulations and the eventual triumph of determination and hard work. In the last three decades of the 20th century the character of migration began to change and a 'new Diaspora' led by high skilled professionals moving to the western world and semi-skilled contract workers moving to the Gulf, West and South East Asia emerged. The overseas Indian community thus constitutes a diverse, heterogeneous and eclectic global community representing different regions, languages, cultures and faiths. The common thread that binds them together is the idea of India and its intrinsic values. Overseas Indians comprise People of Indian Origin and Non Resident Indians and today are amongst the best educated and successful communities in the world. In every part of the world the overseas Indian community is recognised and respected for its hard work, discipline, non-interference and for successfully integrating with the local community. Overseas Indians have made significant contributions to the economy of the country of residence and have added in considerable measure to knowledge and innovation. 340 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

342 Overseas Indians share a strong bond with their country of origin. This is reflected in their language, cultures and traditions that have been maintained, often over centuries, and continue to be vibrant and unique. It is now being witnessed in the growing popularity of Indian films, dance, music, arts and culture on foreign shores, the strong surge in remittances back home, and the return of many to live and work in India and in their increasing engagement with India's development. The relationship between India and its overseas community is growing, new partnerships evolving and newer multi-faceted dimensions being explored. India's engagement with its Diaspora is symbiotic, the strands of both sides of the relationship equally important to create a resilient and robust bond. To engage with the Diaspora in a sustainable and mutually rewarding manner across the economic, social and cultural space is at the heart of the policy of the Ministry. To create conditions, partnerships and institutions that will best enable India to connect with its Diaspora comprehensively is central to all our programmes and activities. As a new India seeks to become a global player of significance, the time has come for a strong and sustained engagement between India and overseas Indians. The time has also come for overseas Indians to benefit from the exciting opportunities that India provides. The History of the Indian Diaspora The history of the Indian Diaspora, which numbers an impressive 20 million or more, has been encapsulated in The Encyclopedia of the Indian Diaspora. This premier compilation is a substantive account of the Persons of Indian Origin (PIOs) who have made a home in practically every corner of the world. It traces their history from the time they first left Indian shores to their growth and assimilation into their adopted countries, and highlights their contributions, listing many who have made a global mark. The first of its kind, this keepsake tome offers information and valuable insights into the history, expansion and progress of the Indian diaspora. The Encyclopedia of the Indian Diaspora attempts to capture in a single volume the varied nature of the Indian diaspora with its cultural and linguistic diversity, a feature resulting from the many different locations where Indians have settled; the careers of professionals in which Indian have excelled; and the many other ways in which Indians have flourished in over 60 communities worldwide. General Editor, Professor Brij Lal of the Australian National University, says in his introduction: Like other movements and displacements of people, the Indian diaspora grew out of many causes and several crossings. Due to its varied origins, divergent patterns of migration and settlement and different degrees of absorption or integration into the culture of their new homeland, the Indian diaspora defies easy categorisation. It is a complex confluence of many discreet cultures, languages and histories. He points out India s courting of the Indian diaspora has been encouraged, even promoted, by the emergence of global organisations based in western countries. The editor further credits Indian writers of international distinction, the Internet and of course, the ubiquitous Bollywood for further narrowing the gap between India and its diaspora. Prof. Lal sums up the rapidly growing, powerful and highly visible diaspora succinctly: There are points of convergence and divergence which influence relationships among members of the diaspora. Certain things bring us together food faith, fashion, art and music and then it does not matter whether you have recently arrived from Surat or are a long-term resident of Surrey or Sydney. An overarching sense of shared culture forges bonds that transcend time and space. It is the common interest that matters. At other times, our Indianness takes second place to our local or national identities. Facts on Indian Diaspora Huge surge in NRI deposits in Kerala banks 10 th December 2012 According to the Kerala Finance Minister K M Mani there has been a staggering rise of over Rs.17,000 crore in NRI deposits in the state's banks in the past year. Speaking at an event in the UAE Mani said 1 in 10 Keralites are abroad and the much-talked about Kerala model of growth was made possible by the Kerala diaspora. The state government deeply values the yeoman 341 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

343 services of the Kerala diaspora and will look up to them in high esteem. The government is working on schemes for the diaspora as well as those who returned for good. A health scheme is on the drawing board. Strong laws are being instituted to make sure that land and properties owned by the diaspora do not come under duress as has been the case recently. Per the latest statistics on the Kerala diaspora, the UAE leads with the largest number, 8.83 lakhs. Indian diaspora conference in St. Vincent and Caribbean a grand success! 27 th December 2012 The Indian Diaspora Conference in the Caribbean region, with the theme "The Indian Diaspora in St. Vincent and the Wider Caribbean", held in St. Vincent on the weekend of June 1 - June 3 was a grand success with participants and delegates from 14 countries. It coincided with the June 1 Indian Arrival Day in St. Vincent and the Grenadines (SVG). The event was organized by the St. Vincent and the Grenadines Chapter of the Global Organization of People of Indian Origin International (GOPIO SVG) in collaboration with the SVG Indian Heritage Foundation, and support from the St. Vincent and the Grenadines Ministry of Tourism and Culture. The primary organizers, Dr Arnold Thomas - GOPIO Regional Coordinator, Caribbean and Dr Kumar Mahabir - Co-Chair, GOPIO Academic Council & Professor at University of Trinidad & Tobago, are to be commended for their efforts in making the conference a huge success The 3-day event included the Indian Arrival Day Commemoration and arrival re-enactment at the Argyle beach with participation by SVG Indian Heritage Foundation, GOPIO's SVG Chapter, Indian High Commissioner K J Sodhi, visiting delegates and PIOs from St. Vincent and the Grenadines. This was followed by a well attended inaugural event on the evening of June 1st. with SVG Prime Minister, Dr. Ralph Gonsalves, as the chief guest. There were cultural performances by local SVG artistes and visiting troupe from Trinidad and Tobago. June 2nd was a full day of Indian Diaspora conference including presentations by SVG scholars and experts on regional and international Diaspora history, experiences and issues. June 3rd, allocated for an all-day island guided tour for visiting delegates turned out to be a rewarding experience for everyone. Prime Minister Gonsalves also visited the delegation and participated in some of the events on that day. Details of each day's festivities of this year's event are highlighted below. June 1: Indian Arrival Day Commemoration and Conference Inaugural The Inaugural Ceremony was held at Peace Memorial Hall on Friday, June 1 starting at 7:00pm with St. Vincent and the Grenadines (SVG) Prime Minister Hon Dr Ralph Gonsalves as the chief guest. Junior Bacchus and Dr. St. Clair Thomas were masters of ceremonies. Following an opening prayer by Glenda Joyette, there was a beautiful steel pan rendition of SVG National Anthem. Hansby Lewis - President of SVG Indian Heritage Foundation made the welcome remarks, followed by greetings by GOPIO International President Ashook Ramsaran who expressed "thanks to the Hon. Prime Minister and the people of SVG for being so supportive of GOPIO's efforts in SVG since we initiated the GOPIO chapter in 2007". Vibert Bailey - President of GOPIO SVG followed with remarks on GOPIO SVG and progress since the chapter was formally initiated. Dr Arnold Thomas - GOPIO Regional Coordinator Caribbean, gave an overview of the upcoming conference and was pleased to "welcome all attendees and delegates from SVG and abroad". Lucienne Sacarabany - President of GOPIO Martinique, brought greetings from the PIOs of the French speaking Caribbean. There were greetings from individuals and organizations in St. Vincent and the Grenadines: People of African descent; the Garifuna Heritage Organization; Mr. Frederick Stephenson - MP for South Windward Constituency & Ministry of National Mobilization; Hon. K J S Sodhi - Ambassador of India to Suriname and SVG, remarked how "GOPIO and this upcoming conference have put SVG on the map, and to become known to the Indian Diaspora". This was followed by cultural performances by local SVG artistes and visiting troupe from Trinidad and Tobago: singer Aykeel Ali and dancer Shenade Ganase; two SVG children gave a piano recital. Dr. St. Clair Thomas - Chief Medical Officer of SVG, introduced the Prime Minister Gonsalves who thanked "GOPIO for bringing awareness to the Indians in St Vincent and the Grenadines" and being "proud to host this conference organized by two young organizations" (GOPIO SVG chapter and SVG Indian Heritage Foundation). He re-iterated, "SVG holds dearly its rich history of diversity" and "there is a special place for the 342 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

344 Indian community as a vital part of SVG with shared values, even with differences due to heritage and origin". The recently published GOPIO Book was presented by Ashook Ramsaran to PM Dr, Gonsalves who plans "to read and add to his library and knowledge of the Indian Diaspora". The Inaugural Ceremony concluded with thanks by Dr. Kumar Mahabir - Co-Chair, GOPIO Academic Council & Assistant Professor at University of Trinidad & Tobago. June 2: Indian Diaspora Conference The Conference Program held at Murray Heights Hotel, McKie's Hill, Kingstown started with registration at 8:30am and concluding at 5:30pm. The full day conference was followed documentary presentation on films and the Indian Diaspora in the Caribbean. The specific conference sessions included: Session I (9:00am - 10:00am: Diaspora and Arrival) Moderated by Dr Victor Ramraj (University of Calgary, Canada) with an "Overview of Indian Indentureship in St. Vincent" by Dr Arnold Thomas. Other speakers included: Mansraj Ramphal (University of Trinidad and Tobago, UTT) on Indian Arrivals in St. Vincent and Trinidad during the Indentureship Period: Names, Numbers, Death, Disease, Ships and Shared Experiences; Dr Kumar Mahabir (University of Trinidad and Tobago, UTT) on Narratives of Recent Vincentian Indian Migrants in Trinidad. Session II (10:30am - 11:30am): Diaspora: Adapting and Transforming Moderated by Dr Maurits Hassankhan (University of Suriname). Speakers included: Professor Lisa Lopez (University of Puerto Rico at Río Piedras) on A Look into the Indentured System of Indian Workers in St. Vincent, Trinidad and Guyana; Jai Sears (Grenada Indian Cultural Organization, Grenada) on The Contribution of Indians to the Economy and Polity of St. Vincent and the Wider Caribbean. Session III (12:30pm - 1:30pm): Celebration and Speculation Speakers included: Prof Lindsey Harlan (Connecticut College, USA) on Indian Arrival in St. Vincent and Trinidad: Fluid Discourses in the Celebration of a National Holiday; John Mair (London Metropolitan University, UK ) on Cricket in the Indo-Caribbean Imagination: The View from Two Sides of the Wicket; Dr Vijay Ramraj (University of West Indies, TnT) on Nebulous and Intangible but Real: Speculations about the Meaning of Pt. Samsundar Parasram's 'punditaye' experiences in St Vincent. Session IV (2:30pm - 3:30pm): Diaspora, Religion and Culture Moderated by Dr St Clair Thomas (Chief Medical Officer of SVG). Speakers included: Sylvia Gilharry Perez (Corozal Organization of East Indian Cultural Heritage, COEICH & GOPIO Belize) onthe History of East Indian Seventh Day Adventists in Belize (with reference to St. Vincent); Dr Victor Ramraj (University of Calgary, Canada) on Early Diaspora Indian Pragmatic Religious Conversion. Session V (4:00pm - 4:30pm): Diaspora, Religion and Culture (Cont'd) Speaker: Primnath Gooptar (University of Trinidad and Tobago, UTT) on Indian Movies as a Medium for Continuity of Indian Culture in the Caribbean. Session VI (5:00pm - 5:30pm): Panel Presentation, Discussion & Wrap-up Moderated by Ashook Ramsaran (President, GOPIO International - USA). Panelists: Dr Gideon Lewis (SVG Indian Heritage Foundation); Jai Sears (Grenada Indian Cultural Organization, Grenada); Vibert Lewis (President, GOPIO of SVG chapter). 343 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

345 Session VII (6:00pm - 8:00pm): Film Screening Caribbean Interpretations of Bollywood Films (dir: Primnath Goptar); The Madonna Murti (dir: Sharon Syriac); Hosay Cedros (dir: Ann Marie Samsoondar). June 3: Island Tour On Sunday June 3, there was an all-day island guided tour from 10:00am to 8:00pm that included visits to various natural heritage and historical sites such as monuments, museums, beaches, events with ceremonies, picnic and activities. Prime Minister Dr Ralph E. Gonsalves visited with the delegates and attendees, and shared in a portion of the events of the day. It was a fun filled day and gave the visiting delegates a first-hand view of major points of interest, including the areas that are considered PIO communities. Indian Diaspora Highlighted By Gopio At Oas Conference in El Salvador June 27, 2012 At a June 27, 2012 conference in San Salvador on "Education in Central America: Engaging Diasporas, Governments and the Private Sector in Education for Development", the Indian Diaspora and GOPIO's role were highlighted by a notable presentation by GOPIO International President Ashook Ramsaran who was invited by the Organization of American States (OAS), the government of El Salvador and the Pan-American Development Foundation (PADF) "to share the best practices, lessons learned and the impressive work of GOPIO". It was an impressive gathering of government officials, members of private and public sectors, and several prominent civic organizations, and it was a tremendous opportunity to learn from the experience of the Indian Diaspora and the successes of private, public and NGO partnerships. "There is a lot of awareness of the Indian Diaspora and GOPIO's significant role in shaping it while working in close collaboration and partnership with the Government of India, in particular the Ministry of Overseas Indian Affairs", said Ramsaran. Recently published GOPIO book (containing a lot of information about Indian Diaspora and GOPIO) were presented to: Organization of American States; Pan-American Development Foundation; Hon Hugo Martinez, Min of Foreign Affairs, El Salvador; Hon Erlinda Hanal Vega, Vice Minister of Science & Technology, El Salvador; Hon Juan Hose Garcia, Vice Minister, Min of Foreign Affairs, El Salvador. Indian diaspora by Richa Jha (PaperTigers Global Voices) In many ways, it is first India s boldly written brutally honest crossover fiction. Set against the prominent backdrop of the Sikh militancy in the 1980s, it is a gritty account of a troubled adolescence and split loyalties at a military boarding school. A couple of years ago, I read Siddharth Sarma s The Grasshopper s Run in five straight hours, transfixed, glued to the pages. It s an outstanding read (little surprise that it was picked up by Bloomsbury for international publication), with all the elements of good YA read: it s fast paced, there s friendship, deceit, loyalties, war, trauma, revenge, retribution. The depth and detailing geographical, political and emotional (like in Roll of Honour) is of an exceptionally high order. Books like these get noticed and talked about in India, for sure; they get rave reviews. And they win awards. But the copies don t sell; not the way they should, not to the readers they ought to. The young adults don t go looking for these titles. So, what s up with the reading habits of teenagers in India? The good news: Indian urban children are reading for pleasure, and reading more than ever before. There are dedicated book festivals for children s books, schools hold their own book weeks with the primary intent of getting kids to develop a lifelong affair with reading, the libraries at schools look well stocked where reading is encouraged as part of the school curriculum even outside those designated book weeks, and parents don t mind spending on books. Head to any large bookstore in a metro, and you ll find children s books and teen fiction occupying a substantial (and impressive) shelf space. Families walk in, browse at leisure over coffee and brownies in the store café and walk out with big shopping bags. And now, we look inside those shopping bags for the bad news. If you re lucky, you may find a book by an Indian author among a bunch of Gerenimo Stiltons, Wimpy Kids, Percy Jacksons or the Twilights. If this is 344 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

346 your day like it s never been before, you ll hear that the Indian book is meant for personal consumption, and not as a birthday gift for a friend. Third time lucky? The child grabbed the copy himself and not upon his parents insistence. That, in a nutshell, is what happens with most of our own books. So, our kids are devouring books, but the bulk of it is pretty much the reigning fads from the West. Much as I would love to be proved wrong, I ll be surprised if we find our teenagers buying and reading a brilliant book like Roll of Honour. Migration and money: The shifting patterns of the Indian diaspora 29 th March 2012 This house, Australia. This house, Australia. This house, Australia, says Mohinder (a pseudonym) 29, pointing out that young men from six of the 13 houses in his alley in TarnTaran have migrated. That house, Germany. That shop also Australia, he adds. Mohinder himself migrated to Australia nine years ago with his family, leaving TarnTaran, a city of 1.1 million in Punjab, a northern state of India. Back in TarnTaran for a visit, he says, We have to go out of Punjab to get a job, go to Delhi, to Bangalore. If we have to leave Punjab, we might as well go to Sydney. You lose your sense of place anyway. This migration from Punjab particularly over the last ten years to Australia is a vote of no-confidence in the state by its middle and lower middle class families. It is also a continuation of a history of migration from the state, where people have gambled on migration to provide a better future for themselves and their families. There is however, one significant change that relates to migration to Australia. During the 1970s, 80s and the 90s, money after a few years of arrival, flowed from Australia to India in family and community remittances. But in the 2000s, Australian education became a recognised pathway to migration. Families of the nearly 100,000 Indian students in 2010 paid A$ 2.9 billion, as a deposit on the possibility of migration and a better future. This is a remarkable shift in the story of money and migration, as traditionally money was seen to flow from the destination country to the source country. The World Bank defines remittances as money sent by migrant workers to their source countries. Remittances to developing countries are one of the largest global flows of money and are expected to be US$374 billion worldwide in 2012, with informal remittances to add another 50 per cent. Remittances overall can be greater than foreign direct investment and estimated to be three times official foreign aid. India in 2010 received the largest amount, at US$55 billion, followed closely by China at US$51 billion. The RMIT University study on the Money in the Indian Diaspora documents this change to a two way flow of money, based on interviews with 86 migrants and community leaders in Australia between 2005 and 2010 and the ongoing multi-sited study in Australia and India which will cover 40 families with migrants to Australia. The life stories of these families show it is not unusual for upper middle class families to help their children buy houses and start businesses, after they gain permanent residence in Australia. This two-way flow of money results from the cultural value of seeing money as a medium of caring in the family. In Indian families as in other parts of Asia, the Pacific and Africa money flows two ways between parents and children. There are important gaps in our knowledge of money flows between Australia and India. But available data show that three times more money comes from India to Australia, compared to money going from Australia to India. We know from the World Bank that A$3 billion went in outward remittances from Australia in We do not know how much goes from Australia to India in family and community remittances. Our interviews show that sending money home is one of the important ways sons show filial respect and caring for their families. 345 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

347 This has continued. One of our participants revealed that A$5,000 a day is remitted to India from one grocery shop in a south eastern suburb in Melbourne. It is divided across some 20 transactions, and is now going mainly to villages in India. This amounts to A$1.8 million a year just from one grocery shop for Money Gram and Western Union. We do know however that in 2010, families remitted $2.9 billion to Australia for the education of their children. This $2.9 billion is seen traditionally as part of Australia s service exports, classified under trade rather than family remittances coming from India. We have inadequate information on the public record about investment flows between the two countries. Our interviews show there is significant investment from India in housing and businesses and from Australia in housing, equities and non-resident Indian deposits. Families in India speak of paying A$450,000 for a house in outer Melbourne and report others who have sent up to $A1 million to help their children in business. The Department of Foreign Affairs and Trade, Australia, notes that A$ 6.88 billion went from Australia to India in A$4.8 billion in investment and $2.08 billion in merchandise trade. We know that A$20.4 billion came from India to Australia. This takes into account the A$2.9 billion in education; A$1.6 billion documented as foreign direct investment by Austrade; and A$15.74 billion in merchandise trade. The biography of money flows is important for connecting global money and personal lives. It makes clear that what is seen as trade money is also family money. It also shows that behind the investment figures may lie issues of family and belonging. Equally important is the enumeration of money flows. The dominance of money coming from India to Australia is changing the narrative of migration from that of settlement and subordination to one of mobility and interdependence. Indian workers, lost in a gulf of despair August 7, 2012 The high suicide rate, especially among blue-collar workers, in West Asia must push the government to explore labour-friendly solutions The West Asia or the popular Gulf region is bestowed with a wealth of resources (predominantly oil & gas), that translates to a significant amount of deployable capital for economic and industrial activity, but the region is heavily dependent on imported labour to develop and sustain its economic activities. According to a 2010 World Bank Report, the Gulf nations Qatar, the United Arab Emirates (UAE), Bahrain and Saudi Arabia featured in the top 10 immigration countries with immigrants as a percentage of the total population at 86.5 per cent, 70 per cent, 39.1 per cent and 27.8 per cent respectively. Indian nationals form a significant part of the Gulf workforce and India and the subcontinent remain suppliers of huge labour pools both blue- and whitecollar workers. The Gulf country where I live and work has registered its 31st case of suicide a few days ago, by an Indian national (by far the highest suicide rate among immigrant foreign nationals). Most of them are blue-collar workers who venture out to this part of the world for better wages. We are halfway through the year and this is a shocking and a deeply worrying statistic, and for just one country in the Gulf region. It s a rather well-known fact that most of these workers beg, borrow and sell all they have to make their way to these countries of promised prosperity (mostly by fly-by-night bogus recruiting agencies). More often than not, the reality is a lot different from what they were told or picture it to be. REMITTANCES According to World Bank estimates, in 2011, Indians working abroad would have remitted about $58 billion, topping the list for the second time in a row. Of the total remittances, Indians working in Gulf nations that include Saudi Arabia, Oman, the UAE, Bahrain and Qatar would have contributed a third of the total remittances. Non-resident Indian (NRI) workers send home precious foreign exchange to financially support their families and establish economic interests in India (by buying hard assets, investing in businesses, etc) in the fond hope that they can secure their financial future and one day return to their home country to join their loved ones. They deserve a support system that understands their needs, protects their interests and well-being. 346 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

348 Random thoughts and facts about the Indian diaspora 29 th Sep 2012 Those of us who live outside of India occasionally express amazement because one can go to relatively remote locations around the world and one still finds Indians who reside in those countries. In fact and I don t know for sure if this is accurate I read that Indians are to be found residing, either permanently or temporarily, in just about every country in the world with the exception of North Korea! But although Indians have emigrated and have settled in so many diverse countries what is surprising is that as a percentage of India s population the Indian diaspora is actually relatively small. It is estimated that there are approximately 25 million Indians who live outside of India! The country with the largest diaspora spread around the world is.. Ireland! Someone commented on the now defunct Sepia Mutiny: If you really want a people who are freakin everywhere, the world leaders, by far, are the Irish. They are a nation of 4 million and an estimated diaspora of million encompassing 160 nations. The Irish diaspora research, aired sometime back on the BBC, corroborates this. They called it the Irish Empire a people who conquered by the world as boat people! The Irish have a joke, and very true, that if just 5% of Irish return back to their island, the whole of Ireland would look like a Tokyo subway train at rush hour. And If 10% come back, Ireland would be sunk 200 feet beneath the sea. In fact, the Chinese, Japanese, Spanish, Portuguese, French, and even Germans are all WAY ahead of desis in this regard. And I am only talking on absolute terms, let alone relative terms. One could write a book about how Indians ended up in so many countries. the stories are fascinating. For example, Abhay Singh offered the following explanation elsewhere on the web: I am a 4th generation Indo-Fijian, The British took our ancestors from India to Fiji Islands some 3 hundred years ago. The first ship sailed from Calcutta to Fiji in 1776.I believe our ancestors are from Bihar. We speak a dialect close to Bhojpoori. We still and will continue to hold strong Indian values. Our women adore Indian Fashion. We are devout Hindus and great devotees of Lord Rama. Practically shun inter-race marriage, hence kept our pure blood line. Our major food is Indian food but have also fused Island food in our Diet.We enjoy Indian Music and look forward to Diwali. Most of us never been to India but we know we belong to the 2 worlds (3 for me as I have migrated to U.S). So to recap We are all Indian but with a evolved Indian lifestyle due to mingling with other races. Some parts of Fiji have heavy Napalese. We have Muslims, Gujratis, Punjabis, Madrasis, Nepalese Handful of Malayalams and some I cannot recall now. Caste system is pretty much absent. We still maintain a wonderful Gurudwara and we have plenty of Mandirs and Masjids. We are proud to be of Indian decent. Indians have done exceptionally well in the US by almost any definition. According to Wikipedia: Indian Americans continuously outpace most ethnic groups socioeconomically to reach the summit of the U.S. Census charts. Indian Americans, along with other Asian Americans, have one of the highest educational levels of all ethnic groups in the U.S. Almost 67% of all Indians have a bachelor s or high degree (compared to 28% nationally and 44% average for all Asian American groups). Almost 40% of all Indians in the United States have a master s, doctorate or other professional degree, which is five times the national average. Over 71% of Indians in the US have a Bachelors degree or higher compared to 28% in the US as a whole. The Chinese are the next highest group in terms of educational attainment with over 51% having a Bachelors degree or higher. In terms of median household income, Indians are far and away the highest with an annual income of over $88,500 compared to a median household income of approximately $50,000 for all Americans. The next highest ethnic group in terms of annual median income are the Filipinos with an income of approximately $75,000 annually. Although Indians in the US have done exceptionally well, the diaspora have a similar record of accomplishment in many of the countries to which they have emigrated. It will be interesting to see what happens to future generations and whether they will gradually fall in line with the population as a whole. 347 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

349 Scholarship programme for Diaspora Children The Ministry of Overseas Indian Affairs (MOIA), Government of India, launched a scheme called Scholarship Programme for Diaspora Children (SPDC), in the academic year , for the wards of Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs) to assist them in pursuing Under Graduate University Education in India. EdCIL (India) Limited, a Government of India Enterprise, has been designated as the Nodal Agency for implementation of the SPDC. The SPDC is open for applicants in the age group of 17 to 21 years as on 1st October Following are the highlights of the SPDC scholarships are being offered for undergraduate courses in several disciplines including Engineering/Architecture/Technology, Humanities/Liberal Arts, Commerce, Management BBA/BBM, Journalism, Hotel Management, Agriculture/Animal Husbandry, Science, Law etc. The programme is open only to PIOs/NRIs from the specified 40 countries having a larger concentration of Indian Diaspora. 50 % of the scholarship slots would be reserved of PIOs. However, in the event of the non-availability of suitable PIO candidates, the unfilled slots could be assigned to NRI candidates. NRI candidates would be eligible for the grant of the scholarship only if their total family income per month does not exceed an amount equivalent to US $ 2,250 (US dollars two thousand two hundred and fifty only) Children of NRIs should have pursued at least three years of education, inclusive of 11th & 12th or equivalent (not beyond), in a foreign country during the last six years, and should have passed the qualifying examination abroad. The last date for receipt of duly filled-in application forms in the prescribed format by Ed.CIL is 10th June PIO/NRI Students already studying in India on a self-financing basis or under any other arrangement will not be eligible under this scheme, which is open only for fresh admissions in the first semester/year of undergraduate courses. Candidates would be selected on the basis of their performance in the qualifying examination (equivalent to plus 2 stage in India) which decides the eligibility to apply for the scholarship scheme. The candidates would also have to fulfill all the criteria prescribed for the purpose. The amount of scholarship admissible would be 75 % of the total Institutional Economic Cost (IEC) or US $ 4,000 (US dollars four thousand only) per annum, whichever is less. IEC includes Tuition fee, Hostel fee & other institutional charges.. India Conquers the World July 25, 2011 After a long eclipse, an ancient country finally returns as a force in global business and culture. From the exclusive Club Lounge on the 19th floor of Singapore s Mandarin Oriental, Anish Lalvani gazes out at the city s skyline, a dazzling array of glass and steel and vertical ambition. The Lalvani family has come a long way since the days when Anish s paternal grandfather, Tirath Singh Lalvani, got his start in business by retailing medicines to King George VI s soldiers in Karachi. Back then the city was a part of British colonial India until independence arrived in 1947, and its inhabitants suddenly found themselves amid the bloody turmoil of the newborn Pakistan. The Lalvanis, like millions of others on both sides of the border, fled for their lives. But instead of making new homes in present-day India, the Lalvanis sought their fortunes abroad. Today 348 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

350 the family s Hong Kong based Binatone Group employs some 400 people on four continents. We couldn t break the old boys network, says Anish. But overseas we created our own. The Lalvanis voyage from refugees to moguls embodies a worldwide phenomenon: the growing size and sway of the Indian diaspora. The exile population now numbers some 40 million people, spread across West Africa, the Americas, and East Asia. And in many of those countries including the United States, Britain, Canada, Singapore, and Australia Indian immigrants and their offspring have both higher incomes and higher education levels than the general population. The international importance of India itself is rising to an extent unmatched since the onset of the Europeandominated global economy in the 17th century. And with the country s economy growing at roughly 8 percent a year for the past decade more than double the rate of the United States India s influence can only continue to strengthen. Most economists predict that by 2025 the country will outstrip Japan to become the world s thirdlargest economy. India is more dynamic than any other major country in dem-o-graph-ic terms as well. Its population today is 1.21 billion, second only to China s 1.3 billion, and thanks to the latter s one-child policy, India s numbers are expected to surpass those of China by the late 20s, when India will have an estimated 1.4 billion people versus China s 1.39 billion. Currently home to the world s second-largest contingent of English speakers, India seems destined to step into first place, ahead of the United States, by But the mother country s rise has been more than equaled by that of India s émigrés. In fact, the diaspora remains one of India s most important sources of foreign capital. According to the most recent available figures, workers from India in 2009 sent $49 billion in remittances to relatives back home, outpacing China by $2 billion and Mexico by $4 billion. Four percent of India s gross domestic product comes from North American remittances alone. In fact, India s business community tends to be family--centered, both at home and abroad. Chinese entrepreneurs are more than twice as likely to be financed through banks, most of them state-owned. In contrast, Indian firms and business networks tend to be essentially familial and tribal, extending in networks across the world. Much of the Indian middle class has ties outside India, notes researcher Vastala Pant, formerly with the Nielsen office in Mumbai. Our ties around the world are also family ties. The importance of such familial links can be seen in the close relationship between diaspora settlement and commerce. The top five areas for Indian investment Mauritius, the Americas, Singapore, the United Arab Emirates, and the U.K. have large, established Indian communities and -Indian-run companies that are particularly active in electronics and software. Today, even the largest Indian firms, such as Tata and the Reliance Group, are controlled by groups of relatives whose power is enhanced by their wide geographic reach. We re very flexible about doing business, notes Lalvani, who was raised in Britain, is a permanent resident of Hong Kong, and is married to an Indian- American. We re global and cosmopolitan ethnically Indian but also tied to the U.S., U.K., and Hong Kong. They re all things that make me who I am, and make our business work. That business illustrates nicely the worldwide extent of India s entrepreneurship. In 1958 Anish s father, Partap Lalvani, and his uncle Gulu teamed up in London to launch Binatone as a supplier of Asian-built consumer electronics and electrical goods. Its range of products grew to include domestic appliances like kettles, toasters, and irons, and today its employees are active in otherwise neglected markets, such as the former Soviet republics of Central Asia and off-the-grid corners of Africa. Diaspora & Cultural Development of India December 2nd, 2011 In the theater of development, the competitiveness and growth of an economy is determined by its capacity to acquire and apply new knowledge. In a rapidly globalizing world, learning new ways of doing things depends in no small measure on the ability to integrate with the larger world outside. 349 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

351 First, there is a large expatriate population of skilled people from emerging economies in the developed world. Second, overseas communities can constitute a significant resource for the development of the countries of origin. An overseas community can and does serve as an important 'bridge' to access knowledge, expertise, resources and markets for the development of the country of origin. India has the second largest Diaspora in the world. The overseas Indian community estimated at over 25 million is spread across every major region in the world. Yet, it is difficult to speak of one great Indian Diaspora. The overseas Indian community is the result of different waves of migration over hundreds of years driven by a variety of reasons-mercantilism, colonialism and globalization. Its early experiences make up a saga of trials, tribulations and the eventual triumph of determination and hard work. In the last three decades of the 20th century the character of migration began to change and a 'New Diaspora' led by high skilled professionals moving to the western world and semi-skilled contract workers moving to the Gulf, West and South East Asia emerged. Overseas Indians share a strong bond with their country of origin. This is reflected in their language, cultures and traditions that have been maintained, often over centuries, and continue to be vibrant and unique. It is now being witnessed in the growing popularity of Indian films, dance, music, arts and culture on foreign shores, the strong surge in remittances back home, and the return of many to live and to work in India and in their increasing engagement with India's development. This exhibits its great unity in the most diversified country in the world. There is an unbreakable cord which is not present physically yet it keeps us together. Indian-Americans Say Obama's Victory Good for India, Diaspora Thursday, 08 November 2012 Washington: Indian Americans have welcomed the re-election of President Barack Obama saying his administration has delivered and victory is good for the community and India both. "Obama's victory is very good for the Indian American community and India," Thomas Abraham, founder president of Global organisation of People of Indian Origin (GOPIO) told IANS. "The Asian American community, and in particular Indian Americans, has a high presence in his administration as political appointees and this trend will continue," he said. "When Obama went to India, he gave a surprise by endorsing India as a permanent member of the UN Security Council," Abraham said. "So the Democratic administration has delivered and we will see increasing cooperation in defence, science and technology, trade and fighting terrorism," he added. Welcoming Obama's re-election, Milpitas, California, based North American Punjabi Association (NAPA) said the Punjabi community is celebrating his victory because of his several initiatives including the Dream Act for the immigrant children and Obama healthcare law. On top of this "Obama rose above politics and felt concerned, taking appreciable steps to garner sense of safety and security amongst community members" when six Sikh worshippers were killed in a shootout at Oak Creek Gurdwara in Wisconsin in August, said association's president Satnam Singh Chahal. New York's noted Indian-American attorney Ravi Batra said, "Barack Obama proved that the hard road is the sure road for resuscitating the American Dream." Republican challenger "Mitt Romney forced Barack Obama to be at his best so that American exceptionalism continues to provide solace and support for all who love freedom and want a better tomorrow for their kids the world over," he said. 350 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

352 India Diaspora Fundraiser - 12 November 2012 Habitat for Humanity International (HFHI) is seeking an India Diaspora Fundraiser who, reporting to the Sr. Director of Individual Giving, will work to implement and grow a new fund development niche within resource development for HFHI. The desired outcome of the Diaspora giving program is to engage diaspora communities living in North America to financially support Habitat's efforts in their "home country". This position will work specifically with the US India Diaspora community. The India Diaspora Fundraiser will use phone calls, face to face visits, direct marketing and other creative cultivation techniques to close and six figure gifts. This position will be based in a U.S. city with high concentrations of India diaspora. Indo-Canada Chamber wins Pravasi award January 12, 2012 President of India Pratibha Devisingh Patil this week conferred the Pravasi Bharatiya Samman Award (PBSA) on the Indo-Canada Chamber of Commerce (ICCC) at a glittering ceremony held at Birla House in Jaipur. The PBSA is the highest honour conferred by the Government of India on overseas Indians or an institution run by overseas Indians. Accepting the award on behalf of the ICCC, Satish Thakkar, ICCC president, said: This is an extraordinary honour being bestowed on the ICCC. This singular recognition by the Government of India of the ICCC s many contributions over the last 35 years is a tribute to the successive leadership of past presidents and in particular to our vibrant members across Canada. Thakkar is at present in India leading an ICCC-Town of Markham business delegation to India and the UAE. The delegation, comprising over 60 small and medium business entrepreneurs from diverse sectors, is also participating in the Pravasi Bharatiya Divas convention of the Indian Diaspora in Jaipur, besides visiting Delhi, Mumbai, Pune and Dubai. Markham Mayor Frank Scarpitti is co-leader of the delegation. India s High Commissioner in Ottawa, S.M. Gavai, said: This is in recognition of ICCC s contribution towards the promotion of India-Canada friendship. In commenting on what he described as a well-deserved award, High Commissioner for Canada to India, Stewart Beck, said: Over the years, the ICCC has done an excellent job in strengthening the people-to-people and business-to-business relations that are so important in strengthening our bilateral relationship. Preeti Saran, India s Consul General in Toronto, added: This award is a wonderful recognition of this pioneering organization s splendid work on so many fronts. I want to congratulate Satish Thakkar, President, ICCC and his team on this milestone achievement. Celebrating Indian culture with reception December 15, 2011 Understanding other cultures is just one of the goals the Newcomers Reception series plans to achieve, and Monday, members of the community gathered in city hall to celebrate Indian culture in the capital city. Manisha Varma, social secretary of the Indo-Canadian Association of Fredericton, performs a folk dance from Northern India in the city hall council chambers Monday as part of a newcomers reception celebrating Indian culture. Education in understanding of different peoples is key to success, said Coun. Eric Megarity, who heads the ad hoc committee on immigration. When you sit down and understand somebody, you get to know people better and you can make decisions on our community where you get that understanding. A Newcomers Reception, which takes place in the fall and the spring, is a chance for a local cultural association to present their culture and have the community take part in celebrations and indulge in their cooking. Fredericton has developed a strong connection with one particular aspect of Indian cuisine, a cultural connection that wasn t lost on those at the reception. Since the samosa s arrival at the Boyce Farmers Market decades ago, the deep-fried, triangular snippets of Indian cuisine have become a permanent staple in many Fredericton residents diets. 351 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

353 Throngs of people brave the elements in seemingly endless lines at the market Saturday mornings. The popularity of the item has garnered so much attention a film, A Saturday Affair, was released in 2009 to tell the tale of the Fredericton samosa wars. It s a simple delight that speaks volumes of the economic and cultural impact the Indo-Canadian relationship has had on the New Brunswick capital. When you get people in conversation with food, great things happen, said Megarity. You sit down and you eat other peoples food and you have a conversation You re on the road to success and understanding. The crowd of about 100 at Monday s event was also treated to a traditional dance and a presentation on Indo- Canadian history by Madhu Verma, chairwoman of the Asian Heritage Society of New Brunswick. Verma, an outspoken member of the community on supporting newcomers, can speak from experience, having moved to Fredericton from India in However, the welcome upon her arrival was less friendly than Monday s reception. She said Canada had discriminatory immigration laws based on ethnicity and race until amendments were made in 1962, which signalled a push for immigrants. She and her husband Ram Verma, a physics professor at the University of the New Brunswick were among the few Indian citizens in the area at the time. However, they persevered and became valuable members of the community. Verma said it wasn t easy to adjust to their new home, but living in Fredericton helped their transition along. It s a beautiful place, she said. It s a great place to raise a family and a great community. The next step, however, was keeping their tradition alive a difficult task considering how outnumbered they were when they first arrived. For Verma, assimilation was out of the question. It had to be an integration of cultures. With assimilation we forget about our own culture and makes it a kind of a melting pot. We don t believe in a melting pot, she said. We are carrying our Indian heritage, and we want to keep it. All of our culture and our values We want to preserve and share with others. And that s why it s important to hold receptions such as these, for any cultural association, she said. Canada is a diverse country, Canada is a multicultural country and we re keeping up with those traditions, Verma said. When we came, somebody helped us. So, now we re giving back. She has been involved in the community, especially in the promotion of cultural associations, for decades and praises the work of groups such as the Association of Indo-Canadians. Verma is dedicated to improving the transition process for newcomers and marvelled at the success she has seen already from her people. I think once you are determined to succeed, the door will always open for you, she said, adding she s excited to see what the next generation has to offer. Mayor Brad Woodside said encouraging integration of cultures is paramount in building a more inclusive and engaged city. He was proud to see such a stark change in the people he would meet on the street today from He said seeing someone from India would be like seeing a person from another planet. These last few years when I walked downtown in the evening and across the bridge, it s just the opposite, said Woodside. They are people here raising their families and enjoying this garden that we live in from all over the world. At the end of the presentations, the crowd of many different ethnic and cultural backgrounds made their way over to the food table to grab a samosa and have a conversation. Economic Engagement of Overseas Indians with India: Trends February 2012 During the past month, banks have witnessed a steady growth in deposits from Non-Resident Indians (NRIs). In fact, the aggregate inflows under various NRI deposits schemes (Outstanding and Inflows/Outflows) touched US$ 52.4 billion as at end-december (Provisional), according to the figures released by the Reserve Bank of India (RBI) in February NRIs have brought in a total of US$ 7.2 billion so far this fiscal between April and December. NRI deposits in India inflows are under three categories, Foreign Currency Non-Resident (Banks) or FCNR(B), Non-Resident Ordinary Rupee Account or NRO Accounts and Non-Resident (External) Rupee Accounts or NR(E)RA. FCNR(B) deposits reached US$ 15.4 billion as at end of December 2011, while NR(E)RA for the period stood at US$ 25.4 billion. Further, deposits through NRO Accounts reached US$ 11.6 billion as at end of December I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

354 NRI Deposits in India: Outstanding and Inflows/Outflows (US$ Billion) Source: Reserve Bank of India India s total private transfer receipts, comprising mainly remittances from Overseas Indians, have also grown in the recent years. According to the RBI data, remittances have increased substantially from US$ 43.5 billion in (Revised) to US$ 55.6 billion in (Partially Revised). During the current financial year, the total private transfer receipts stood at US$ 32.3 billion so far (April-September (Preliminary)). Private Transfer Receipts (US$ Billion) Source: Reserve Bank of India Foreign Exchange Earnings Foreign Exchange Earnings (FEE) during the month of January 2012 were INR 86.2 billion (US$ 1.7 billion) as compared to INR 57.8 billion (US$ 1.3 billion) in January 2011 and INR 55.9 billion (US$ 1.2 billion) in January The growth rate in FEE in INR terms in January 2012 over January 2011 was 49.3 per cent as compared to 3.3 per cent in January 2011 over January The growth rate in FEE in US$ terms in January 2012 over January 2011 was 32.1 per cent as compared to the growth of 4.8 per cent in January 2011 over January Canada and India pursue a natural bond June 10, I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

355 The Indian diaspora in Canada is about one million strong, including second- and third-generation Indo- Canadians, as well as those of Indian origin from East Africa and the Caribbean. Its per-capita concentration is several times greater than in the United States. But relations between India and Canada have historically been cool. Only recently has that relationship begun to warm up. A new push to establish Canada as a global player in the Indian firmament begins Thursday with a major gathering of Indian and Indo-Canadian business leaders in Toronto. The Day for Overseas Indians, a conference that brings more than 500 high-level business and government delegates together, is being held in Canada for the first time. It comes just a few weeks before the Bollywood Oscars in Toronto, whose TV audience of 700 million will put Canada, however briefly, at the centre of Indian cultural consciousness. It s going to be huge, said Rana Sarkar, president of the Canada-India Business Council. It brands Toronto as a city on the broader Indian global circuit. There s Kuala Lumpur, London, Hong Kong, New York, Dubai, and to put Toronto alongside is an important framing for how a lot of trade and commerce will work in the 21st century. Asha Luthra, a conference convener and past-president of the Indo-Canada Chamber of Commerce, said the focus of the two-day event is on building bridges between the two countries. The relationship suffered for many years, particularly following India s use of Canadian technology to build a nuclear weapon, the bombing of an Air India flight originating in Canada and a sense among Indian politicians that Canada s interest in the country was more about domestic politics than genuine engagement. The relationship between India and Canada was kind of cool, Ms. Luthra said. Over the last couple of years it has gradually warmed up. It s really growing now with both prime ministers talking about trade going from $4.5-billion to $15-billion over the next five years. This is absolutely the right moment for Indo-Canadians to recreate the linkages with India. For the India watchers to know what India has to offer today and for Canada itself to realize what India has to offer. The ideal outcome for conference organizers would be to help give birth to more enterprises like Sigma Systems, an IT company that works with cable providers. Sigma s founder and CEO Andy Jasuja, who was born in India and came to Canada to study engineering, was an early convert to the potential of India. He established an Indian branch of his company in Today roughly half of his 400 or so employees are in India, the other half at his Canadian headquarters. I can t think of this organization as being purely in India or purely in Canada, Mr. Jasuja said. His Indian operations are essential because the lower labour costs that India offers make it possible to compete, he said. But he also needs a Canadian headquarters to be able to meet and work with his North American clients. As we have evolved, India and Canada have become integral partners in this equation, Mr. Jasuja said. No country can survive on its own any more. India holds some aces and Canada holds some aces. Put them together and we can win at poker. Kasi Rao, a consultant and member of the conference organizing committee, said the conference will bring Canada s relationship with India into focus. What you re now seeing is that the India file has moved to a level of strategic engagement that was not there in the past, Mr. Rao said. Estimated Number of Overseas Indians The number of Overseas Indians has steadily grown over the past decade. Non Resident Indians (NRI) / Persons of Indian Origin (PIO) constitute a significant economic, social and cultural force around the globe. As per estimates, over twenty million Overseas Indians are spread across 110 countries. To know about the estimated number of Overseas Indians in various countries, read the information provided by the Ministry of Overseas Indian Affairs (MOIA). Strong bond prevails between India the Indian Diaspora There has been structural change in India which is allowing it to grow at a healthy rate. Non Resident Indians have played a major part in foreign investment but its contribution to the Indian economy has only lately been recognized. When India faced its worst balance of payments crisis in the early nineties, its foreign exchange reserves were dwindling and it was coming perilously close to defaulting on meeting its international payments obligation, India turned to its National Reserve Indians and it was NRI deposits that helped India to come out of this crisis. In India s 55 years of history this was the first imprint of the important role the Indian Diaspora 354 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

356 can play in building Indian economy. When India conducted nuclear tests in 1998, the Indian Diaspora stood by India. Taking a cue from Chinese Diaspora There would have been no Chinese economic miracle without the help of the overseas Chinese. The Chinese Diaspora which numbers 55 million contributes almost 60 per cent of China s total foreign direct investment, while Indians with 20 million contribute less than 10 per cent. But the cultural-economic gap between India and the Indian Diaspora is narrowing. Although one would have welcomed faster economic policy changes, however, the Indian government is on the right track with all economic parameter in right place. The economic hope generated during the PBD will further get a boost when the next PBD takes place in January; before which the government is likely to come up with more initiatives to strengthen the Diaspora connection. India respects democracy and human values India may well have paid an economic price for democracy and may do so for some time, but that is the only political system that can define this Republic and our nation. India is India because it is a pluralistic, secular democracy. It can not be denied that China is making far more economic progress than India but India s democratic rule of laws and human values are bigger and stronger component that will drive India towards marching ahead. China is a pure authoritarian regime where methods do not matter and where a man is dispensable if the state so desires. Neither its judiciary is free nor the press. Labour laws are not affected through methods and Parliament approved laws. China is not trusted by peace loving countries. It has violated its own promises and exported technology to unsettle peace in the Indian sub-continent. Not a long way to catch the dragon In spite of these facts India has certain strength which China will require another revolution of the short to attain. China will not be able to sustain economic growth if it insists on delaying political reform. China is using authoritarianism as its strength where as India s strength lies with democracy. The greatest asset India has among the Indian Diaspora is not their capital but the abundant reservoir of scientist, professionals and intellectual talent. India can compete with China and even overtake it, provided the Indian government has appropriate policies for the NRIs/PIOs. Can India catch up with China? In terms of purchasing power parity, India is the fourth largest economy, after the US, China and Japan, in that order; it recently overtook Germany. By 2010, India is projected to overtake Japan. Many economic observers believe that in the next 20 years India's real GDP can potentially grow at 10 per cent if it pursues reforms vigorously. This should reduce the percentage of the population below the poverty line to less than 15 per cent. If India concentrates on producing a significantly accelerated growth in agriculture, information technology, and exports in these 20 years, it may get closer to China. Many Indian companies are setting up shops in China to take advantage of the growth. China and India have pursued radically different development strategies. India is not outperforming China overall, but it is doing better in certain key areas. That success may enable it to catch up with and perhaps even overtake China. Should that prove to be the case, it will not only demonstrate the importance of homegrown entrepreneurship to long-term economic development; but it will show the limits of the foreign direct investment (FDI) dependent approach China is pursuing. Diaspora makes India proud India receives almost $14 billion a year in official remittances and this money has played a significant role in- India s $80 billion foreign reserve. Seven Indians made it to the global billionaires list while India emerged third among the Asian countries, whose people found a place in the elite club. Most of them have made their fortunes through India's booming information technology sector. Increasing number of Indian companies is being listed in the New York Stock Exchange. 355 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

357 There are 200,000 Indian millionaires in the US (Merrill Lynch figures). The world is aware of India s telecom revolution and its ongoing world s largest highway project. India s image has changed because of success of Indians. India has a distinct advantage over technology and more particularly in the information technology field. Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition. To-day the overseas Indians particularly from developed countries are seen as potential resources of the country owing to their success and achievements in the countries of their adoption. With 20 million persons of Indian Origin in 110 countries, India is no longer restricted to the sub-continent, it straddles the world. They may be just over 2 per cent of India s population but their estimated collective income is at about $160 billion, almost one third of India s gross domestic product. The Indian Diaspora particularly the Non Resident Indians would appreciate the Indian government to fasten the economic reforms and allow the participation of private sector in the development process. To achieve the desired pace of reforms, the government needs a strong political conviction and a firm economic policy, and the Diaspora is prepared to give its input. Indian diaspora in Africa The Indian diaspora in Africa consists of approximately 1.5 million people of Indian origin living in Africa. Most of this diaspora arrived in the 19th century as British indentured labourers, many of them to work on the Kenya-Uganda railway, while others had arrived earlier by sea as traders. In the British Empire, the labourers, originally referred to as "coolies", were indentured labourers who lived under conditions often resembling slavery. The agents imported indentured labour to replace the slaves. The labourers were however only slightly better off than the slaves had been. They were supposed to receive either minimal wages or some small form of payout (such as a small parcel of land, or the money for their return passage) upon completion of their indentures. Employers did not have the right to buy or sell indentured labourers as they did slaves. Indian Diaspora Engagement Meet in East Africa Nairobi, Kenya, April 15, 2012: The Indian Diaspora Engagement Meet for Overseas Indians, held on April 13, 2012, in Nairobi, Kenya for the East African region, was inaugurated by Mr Parvez Dewan, Secretary, Ministry of Overseas Indian Affairs (MOIA), Government of India, and Chairman, Overseas Indian Facilitation Centre (OIFC). The Meet was organised by the Ministry of Overseas Indian Affairs (MOIA) through Overseas Indian Facilitation Centre (OIFC), in association with the High Commission of India, Kenya and the Confederation of Indian Industry (CII) and was supported by the Global Organisation for People of Indian Origin (GOPIO), Africa Chapter. India was keen to connect with its diaspora in Kenya and other East African countries, economically, both within Kenya and in India. The meet was aimed at providing a platform to the diaspora to share their ideas, suggestions and concerns. India- Africa Strategic Dialogue - Session VI: Bilateral Issues - Diaspora The session was chaired by Mr. J.C. Sharma, Former Secretary, Ministry of External Affairs, Government of India; and the Speakers were Prof. Philip O Nyinguro, University Of Nairobi, Kenya and Prof. Sanjukta Bhattacharya, Jadavpur University, Kolkata, India. The Chair opened the session by stating that diaspora as a discipline is a comparatively new phenomenon. Primarily it was looked at by the social anthropologists and was of not much interest for the foreign policy makers in different parts of the world. However, with the coming of globalisation, the term has gained much 356 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

358 consideration and is influencing the bilateral relations and notions of national security. Contemporary examples could be the LTTE and the Operation Blue Star. It has also impacted on the India-Australia relations in recent years. The presence of Indian diasporas in Africa can have both negative and positive impact. While the positives can be witnessed in the development of African continent and its negative impact can be seen in countries like Tanzania and Kenya. The importance of the diaspora gained momentum as the regime in Uganda got its diaspora back to their homeland. It was said to be a benchmark decision. The diaspora develop contacts and linkages in foreign lands and this gives leverage to capacity building through education, health, business and other expertise. Hence, diasporas can contribute majorly in strengthening bilateral ties. During the NDA regime in India, change in policies with regard to India s diaspora brought in historical changes and the way they were looked upon. Philip O. Nyinguro stated that the relations between India and Africa have been close since the time of Mahatma Gandhi, and has since been consistent. Indian diaspora has been an integral part of Kenya; it is divided into several communities like the Punjabi, Gujarati and others. However, the role of diaspora cannot be overemphasised as it depends on the depth of the linkages they have to their country of origin. The question of Indian diaspora can thus be answered only if the depth of their linkages in their country of origin is known. So far, the Indian diaspora has not gained much of attention from their homeland government; hence, Indian leaders must pay attention to it. The diaspora can also help in times of frosty relations between the two nations. But the idea of sons of soil soon began to float among the African communities due to the failure of the indigenous people and this created problems for the Indian diaspora which is regarded as hardworking and competent. The example of US policy in the Pacific region is based on the diaspora, which could be a lesson for India as well. The advantage can be retained only if they are well-organised. Indian Government is sitting on a Goldmine in terms of its foreign relations. In order to gain its rightful place in the world, India should focus on its diaspora across the continent not only in economic but also in terms of culture. The Indian diaspora is fabricated in different parts of Africa, like Mauritius (60.35 per cent), Reunion (31 per cent), Tanzania, and Uganda. However, not many Indians are residing in the north and west of Africa, which is not a good sign. Nyinguro was of the view that South Africa can be very important from the point of view of India s interests in Africa. It can work as a diplomatic and economic guarantor for India in Africa. He emphasised on the idea of India s greater involvement in Africa through various means to strengthen its relations as well as to have claims over its diaspora in foreign lands. India needs theoretical framework to study its diaspora and implement it in its international relations. It needs to identify its areas of cooperation to make it a mechanism to reach out to Africa. It needs to encourage people-to-people contact, especially in east Africa. The Indian embassies thus need to revive its relations and interactions with the Indian diaspora in Africa. Sanjukta Bhattacharya in her presentation discussed the Indian attitude towards its diaspora. Her presentation was critical of the government s approach and general ignorance about the Indians living outside the country. Also, she brought in the numerical facts about the Indian diaspora in Africa in comparison with those in other parts of the world. The total number of Indians in Africa sums up to a total of 2.5 million, which is less than in West Asia, US etc. In Africa, the Indians are highly concentrated only in three countries- Mauritius, South Africa, and Reunion. These people of Indian origin were taken to Africa as poor labourers during the British colonial rule, Through hard work and enterprise they soon took charge of retail and other sectors of local economies. The colonial strategy of creating a wedge between the diaspora and the natives by giving constant attention to diaspora to some extent was responsible for anti-diaspora sentiments in Africa. Subsequently post independence certain countries within Africa adopted discriminatory policies against Indian diaspora. However, the Indian government s policy towards the diaspora formulated by former Indian Prime Minister Jawaharlal Nehru did not encourage return of people of Indian origin. Therefore, Indians in African countries, such as, Uganda, Kenya had to move to other nations like the US, UK and Europe in the face of increased discrimination. However, Indian attitude towards the diaspora has changed in recent years due to its rising power and global status. Recognising the contribution and potential benefits from the Indian diaspora, Ministry of Overseas Indian Affairs was created in 2003 by the NDA Government. The ministry soon began granting dual citizenship to the Indian diaspora. The honouring of the Indian diaspora (Pravasi Bharatiya Samman Award) for their achievements with regard to their contribution in improving the bilateral relations with India was also initiated. Bhattacharya concluded by stating that the Indian diaspora s response to the recent government initiatives has been mixed. 357 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

359 International Punjabi Chamber for Service Industry The Indian Diaspora, estimated over 25 million including approximately 8 million of Punjabi origin, is the largest in the world today and has its roots in almost every country across the globe. The West today has started viewing Indians with their rich cultural heritage, art forms, traditions and cuisine, as a very hardworking and intelligent lot due to their remarkable contribution in professional, entrepreneurial as well as in business fields. NRIs, in fact, are India's ambassadors at large, who serve as a bridge to reach out to the best of the corporate world over. They can help catapult India to higher growth by supporting and promoting environmental, economic, social, and educational causes by bringing in technical and scientific know-how, financial resources, entrepreneurial spirit and proven ideas. Their relationship with their motherland is more than monetary. They are keen to set up foundations/ endowments, trusts to help promote environmental, social and educational causes in India leading to Human Capital Management. Then there are some who are eager to start, strengthen or diversify business ventures or enter into collaborations/partnerships with Indian corporate. Furthermore, they wish to visit places of religious importance in their motherland, each of which is replete with history and antiquity. International Punjabi Chamber for Service Industry (IPCSI) represents a cross section of NRI professionals, experts, entrepreneurs, visionaries, businessmen, scholars, educationists, writers, authors, besides trade commercial, educational and cultural organizations in countries where they are settled and the domestic corporate to serve as conduit between them for promoting the Service Industry and the overall cross- cultural relations. Our Mission & Objectives Serving as Asia's first Centre for Research and Consultancy for Service Industry Promotion. To work for establishing a Deemed University of Service Industry. To work as NRI Club for bringing NRIs, Domestic Corporate and others on a common platform for sharing their views, expertise and resources. To act as Facilitation Centre for NRIs. To link Non-Resident Indians, particularly of Punjabi origin with their motherland culturally and emotionally. To harness the rich financial, scientific, technical and entrepreneurial resources of the NRIs for developing Service Industry related projects and infrastructure in Northern India for employment generation, having a multiplier effect on the economy. To help Indian Corporate set up Service Industry related projects overseas. To assist/encourage joint research in Service Industry segments by scholars, academicians, HR practitioners and others in India and overseas. To provide consultancy and also prepare Project/Feasibility Reports for setting up Service Industry related ventures in Northern India. To organise annual Conventions/Conferences/Conclaves of NRIs and Domestic Corporate for promoting mutual business & social interests. To promote NRI visits to Northern India and help offer customized packages especially for religious and pilgrimage sites. IPCSI has made its main aim to promote infrastructure development and service industry in North India, which has immense potential for the same on account of the availability of skilled human resources and conducive environment for investment in the region. To achieve this aim, IPCSI had organized its 3 rd Parvasi Punjabi Divas and an international convention of the NRIs and corporate with focus on business opportunities in the service industry on January 14-15, 2006 at Chandigarh. Subsequently, to keep up the momentum generated at the 3 rd Parvasi Punjabi Divas for investment inflows in the region, especially in Punjab, IPCSI with 358 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

360 Punjab government had organized a series of international level summits and conferences both in the country and overseas under Think India- Think Punjab Agenda These summits covered a wide range of sectors of the service industry such as, infrastructure, housing and real estate, media- entertainment and film industry, banking, insurance and financial services, and on many other topics. Outcome of these summits and conferences has bee a greater awareness of the plans and policies of the state government for attracting more investment and greater involvement of the NRIs especially of the North Indian origin for synergizing their resources with efforts of the state governments for taking the region on a higher economic trajectory. Keeping in view that prosperity and development could only come when overall infrastructure consisting of roads, highways, rail, airports, power generation, SEZs, retail, real estate, housing, aviation, hospitality, travel and tourism, healthcare, schools, colleges, media-entertainment and other sectors of the service industry are developed in a cohesive and planned manner, IPCSI organized a global investors conference for infrastructure development in north India on the occasion of its 4 th Parvasi Punjabi Divas on January 11, 2007 at Chandigarh. The conference was inaugurated by Governor Haryana, Dr. A. R. Kidwai, who delivered the inaugural address. He pointed out that whether it was infrastructure, scientific or social development, one has to think together, beyond the limits of political boundaries He called upon NRIs, especially belonging to the North India to invest in power generation, enhancing rail and road transport, software production, and in bio-technology related projects and in taming the rivers for power generation. Dr. Kidwai said that India s Planning Commission had estimated that $US 320 billion ( Rs would be required for developing infrastructure, such as rail and road, water transport, electric power, telecommunications, water supply and irrigation during the Eleventh Five Year Plan. He said that this requirement was of immense magnitude and both public and private sectors would have to come together to finance infrastructure related projects. He said that average GDP of three states of Punjab, Haryana and Himachal Pradesh was greater that any other state of India. At the special ssession on Himachal Pradesh, Governor Himachal Pradesh, Mr V. S. Kokje highlighted the industrial potential of the state and cited the potential in sectors like biotechnology, floriculture and agroprojects. He said that there was vast scope for developing tourism related projects such as golf courses, convention centers, pilgrimage and heritage centers, rural tourism, health and medical tourism, especially adventure sports. He said diaspora could help in a big way with their financial resources, technical knowhow and entrepreneurial skills. He said that all this would create a large number of employment opportunities for the youth. He said that north region with its common boundaries could jointly development infrastructure in the entire region. Himachal s Industries Minister, Kuldip Kumar emphasized upon the advantages of tax holidays and enumerated various projects which could be undertaken both by the Non resident Indians and the Indian corporate. These projects included building of world trade centre at Baddi, special economic zones in Kangra, and Solan districts and setting up of integrated textile park, hydro power, software, pharmaceuticals and tourism. Along with these, trade, education, video conferencing and hotel facilities could also be developed. He also disclosed that an Inland Container Depot was being setup at Baddi for benefit of exporters by Container Corporation of India Limited. Land has already been identified for the purpose, he said. On this occasion, north Indian states of Punjab, Haryana, and Himachal Pradesh made presentations on investment opportunities for infrastructure development and service industry related projects, with focus on attracting investments from the Indian Diaspora, which has more than 8 million NRIs of north Indian origin with their enormous wealth and knowledge, who could be a potential source for catalyzing the economic growth of the region. Many Indian corporates also highlighted opportunities for investment. The thrust of the conference was on Public-Private Partnership (PPP) which was now being considered best suited for the infrastructure sector. Private sector, with its professional maturity and resources was expected to play a more active role in developing public infrastructure and other facilities and to make service industry a vital segment of the region s economy. The event provided an opportunity to the corportaes for smooth interface with the state governments officials for investment. 359 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

361 Mr A. R. Kohli, Patron of IPCSI and former governor, Mizoram, said 21 st century was the age of interdependence and political boundaries did not matter. He said that India had great advantage of skilled and educated power. More than 300 delegates attended the conference including a galaxy of 140 non residents from the USA, UK, Canada, Germany, Singapore, Thailand, Australia, Malaysia, New Zealand, and other countries attended the conference., besides more than 150 corporate associated with infrastructure development. Mr Karan Singh Thakral, an eminent NRI from Singapore, took over as IPCSI president from Dr. A.R. Marwah who became Lifetime President of Honour. Dr. Marwah said that the Non- resident Indians were ever eager to contribute their resources towards building a prosperous and a progressive India especially north India with they had strong cultural and traditional roots. In order to boost infrastructure growth and allow free flow of foreign investments in the region, especially to the rural areas NRIs mooted a plan to promote Northern India Infrastructure Development Board. The newly - elected President of the Chamber suggested that a board consisting of officials of all North Indian states such as Punjab, Haryana, Himachal Pradesh, J&K, Uttrakhand and Union Territory of Chandigarh need to be constituted. In the initial stages, it could consist of Punjab, Haryana, Himchal Pradesh and the Union Territory of Chandigarh and private sector stakeholders Mr Thakral also suggested that the proposed Board could be headed by a Chief Minister of a State for a year by rotation, including infrastructure developers, architects, town planners, landscapers, manufacturers of element, steel and other construction companies, consulting engineers, power, IT & telecom, aviation, hotels and hospitality companies, media- entertainment, transport, rural and community developers, educational institutes, banks and other financial institutions and others relevant for the subject. The Board should work out an Action Plan for the entire region and formulate a strategy for investment. The conference also came out with a suggestion that that all north Indian states should give due importance to development of developing human resources, with education infrastructure given top priority. Mr Thakral said that in view of contiguity of all North Indian states, priority should be given to roads, aviation, tourism & hospitality including health tourism related projects. In fact, North India should be developed as an aviation hub by improving and upgrading existing airports, helipads, air strips and developing new airports with greater connectivity of pilgrimage, religious and tourist interest places. The conference also suggested that all state governments should bring out compendiums, which provide detailed information about infrastructure and service industry related projects and their latest industrial policies, in regard to the making availability of land, water and electricity supply and other facilities. In addition to the states compendiums, a compendium for the entire North region need also be brought out, copies of which should be made available in India and overseas. Some NRIs suggested that the government should focus more on rural development which at present was in a state of neglect and whatever development one could see, is only confined to urban areas. Ramesh Yadav, TiE Member, California, US, said focus on the region should be GDP growth of extra 2 pc over and above the all India average, if it wanted a quantum change in infrastructure development. Inder Singh, president GOPIO ( Global Organization of Persons of Indian Origin) opined that the Central and state governments should not expect only investments from NRIs; rather they should try to make use of the expertise that the Indian Diaspora has achieved in different fields, including, science, technology, healthcare, education and other streams. Barjinder Sodhi, Germany based- president of GOPIO, Dr Pawan K Rattan, founder of the 360 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

362 Indo- US Chamber of Commerce of Tampa Bay, Florida, were of the view that the prime responsibility of the government was to ensure investment friendly environment. Jatinder Virk from California, Bobby Rekhi of Principal Cornerstone Venture Partners, California, also expressed their views. Among those honoured for their contribution towards promoting India s image or socio-economic betterment of their motherland included Bobby Rekhi, J.S. Chawla of Thailand, Surjeet Paul Singh, a realtor from Brampton, Canada, Barjinder Singh Sodhi, Mukesh Lal, Germany, Dr. P.R. Kalia from Edmonton, Canada and Giani Resham Singh, President, NRI Sabha Punjab, Participants hoped that the conference would prove a catalyst in attracting more investments in the region and in building bridges between NRIs and India for bringing prosperity and employment. The conference made a number of far reaching recommendations for infrastrucre development in North India. These are reproduced below : A Northern India Infrastructure Development Board be constituted. It should consist of officials of all the North Indian states such as Punjab, Haryana, Himachal Pradesh, J&K, Uttrakhand and Union Territory of Chandigarh. In the initial stages, it should consist of Punjab, Haryana, Himachal Pradesh and the Union Territory of Chandigarh. A Chief Minister of a State should head the proposed Board for a year by rotation. It should consist of both government and private sector stakeholders including infrastructure developers, architects, town planners, landscapers, manufacturers of element, steel and other construction companies, consulting engineers, power, IT & telecom, aviation, hotels and hospitality companies, media- entertainment, transport, rural and community developers, educational institutes, banks and other financial institutions and others relevant for the subject. Some NRI investors and entrepreneurs will also be co-opted as members of the Board. The Board will have sub- committees of each state, which will evaluate the critical needs for infrastructure development of each of the member states of the Board. These sub- committees will also work out strategies for infrastructure development. The Board will work out an Action Plan for the entire region and take investment decisions. All northern Indian states to raise GDP percentage of infrastructure financing. A Mechanism needs to be worked out for smooth investment of the Private Sector for infrastructure related projects, which all ensures removal of all obstacles and transparency. Focus on functioning of the mechanism should be on Public- Private Partnership. A separate North India Infrastructure Finance Company may be constituted for infrastructure and service industry related projects. All North Indian states to develop social infrastructure for developing human resources Education infrastructures should be given top priority. In view of the contiguity of all North Indian states, priority should be given to roads, aviation, tourism & hospitality including health tourism related projects. In fact, North India should be developed as Aviation Hub by improving and upgrading existing airports, helipads, and airstrips and developing new airports with greater connectivity of pilgrimage, religious and tourist interest places. States to offer more attractive investment packages to both domestic and NRIs with least hassles and single window clearance of the projects in a time- bound manner. Allow commercial exploitation of land other than along the right of way Identify projects that could be taken up on Built- Operate- Transfer (BOT) basis Priority should be given to and upgrading and developing infrastructure in rural areas of the region where more than 70 per cent of population live. Existing toll systems need to be rationalized. Draw up a state water account All state governments to bring out compendiums, which provide detailed information about the infrastructure and service industry related projects and their latest industrial policies, in regard to the making availability of land, water and electricity supply and other facilities. In addition to the state compendium, a compendium for the entire North region need also be brought out, copies of which should be made available in India and overseas. 361 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

363 A key role of the IPCSI (Infrastructure Division) is to identify infrastructure related projects and facilitate the timely delivery of the region s priority infrastructure projects. This is achieved by working closely with State Governments agencies, other spheres of government, NRI investors and the corporate houses. For 2007, IPCSI has chalked out an ambitions agenda including setting up its chapters in Singapore and Thailand. It plans to organize bankers and insurers meets for financing infrastructure projects in North India, role of ICT (Information, Communication, and Technology in service industry, media- entertainment and cinematic tourism, urban development, housing and real estate. Some of these conferences would be planned in Thailand, Malaysia, Singapore and UK. The objective of these summits and conferences is to bring NRIs resources, expertise and entrepreneurial acumen, FDI, FII, Venture Capital to North India to bring development and prosperity to the region besides to strengthen the cultural and emotional bond of the NRIs with the land of their forefathers. Bibliography: cid-49.html I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

364 CHAPTER 13 PRE-DEPARTURE TRAINING A Pre-departure training program helps to ensure fewer difficulties when abroad. To be able to stay competitive in the global and aggressive market environment of today, organizations have to consider the importance of International Human Resource Management (IHRM). One of the most important fields within IHRM is the management of expatriate employees. Pre-departure training can be useful in order to improve the success of the employee. Pre-Departure Training includes briefings on insurance, medical information, security and emergency, media and community engagement and cross cultural training. The pre-departure stage is usually a very stressful stage. There are two important things to realize. Firstly, lots of paperwork needs to be taken care of before you leave. Secondly, high expectations might not always match with the reality. The workers are briefed about their duties and responsibilities while abroad and first hand information on the religions and cultural values in the host country, weather, language and workenvironment there. It is advised that the training contents should be generally concentrated to cultural issues and practical arrangements related to moving abroad. Topics such as: customs and norms of the country; working visas; risks and responsibilities of travel; health issues; emergency procedures; day-to-day living; strategies for adapting to an international environment; and ongoing communication with the program. As part of the training, it is also important to provide participants with the tools necessary to recognize and to effectively deal with difficulties or traumatic events. During the course of the training, they should be encouraged to take responsibility for their health and well being abroad. ESSENTIALS Institutions/organizations need to ensure that their overseas program(s) have effective policies and documentation in place to cover health and safety issues. Participants should be well prepared and informed of the risks involved in living and traveling abroad. Sound management practices can help to decrease the likelihood of an incident occurring. Of course, no matter how many policies there are in place or how prepared the participants are, advance preparation will not reduce the risks completely. Incidents do happen; institutions/organizations need to be prepared. Pre-departure training is most beneficial when it includes the cultural and political situation, and not just project activities. The organization should provide some language training for those with no knowledge of the local language. Main purpose of the session: To identify the main challenges in the design and delivery of adequate, gender sensitive, pre-departure training. To provide participants with concrete examples and tools for improvement of pre-departure training and to encourage them to identify what steps different actors could take in this direction. The objective of pre-departure training is to assist the expatriate to adjust to the demands of living and working in a foreign location Pre-departure training should also be provided for employees on short-term assignment and on nonstandarized assignments. 363 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

365 Components of Pre-Departure training 1. Cultural Awareness Training and Assignment Performance 2. Preliminary Visits A well-planned overseas trip for the candidate and spouse provides a preview that allows them to: a. assess their suitability for and interest in the assignment b. introduce expatriate candidates to the business context in the host location c. Adjust easier to the host location. 3. Language Training Language training is a desired component of a pre-departure program. There are three interrelated aspects related to language ability that need to be recognized. The Role of English as the Language of World Business Host-Country Language Skills and Adjustment Knowledge of the Corporate Language The Role of English as the Language of World Business Exclusive reliance on English diminishes the multinational s linguistic capacity. The resultant lack of language competence has strategic and operational implications as it limits the multinational s ability to monitor competitors and process important information. Consider including language training as a means of better communication and the avoidance of ethnocentrism. Host-Country Language Skills and Adjustment The ability to speak a foreign language can improve the expatriate s effectiveness and negotiating ability. Language skills are important in terms of task performance and cultural adjustment. Hiring language competent staff to enlarge the language pool from which potential expatriates may be drawn is one answer and language training is another. Knowledge of the Corporate Language When communicating with non-english speaking segments of the corporation, the multinational adopts a common company language to facilitate reporting standardization and other control mechanisms, 364 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

366 particularly normative control. Pre-departure training programs may need to include both language of the host country and the corporate language. 4. Practical Assistance Pre-departure training program should provide information that assists in relocation. HRM staff can liaise with the sending line manager as well as the HR department in the foreign location to assist the family relocate. 5. Job-Related Factors There are differences in the way people approach tasks and problems across different cultures, and this can have an impact on the learning process. The ability to transfer knowledge and skills in a culturallysensitive manner perhaps should be an integral part of pre-departure training programs. Lack of, incomplete or inaccurate pre-departure information might have an impact: On the migrant s decision to migrate On the migrant s expectations about the work abroad (often unrealistic) On the migrant s performance at the workplace On the length of the stay at destination (run-away phenomenon) On the situation upon return (debts, difficult reintegration, remigration,etc) Eventually, on the degree of satisfaction of employers and Ultimately, on the attractiveness of formal recruitment to potential migrants and on the effectiveness and viability of the recruitment business. Some reasons for its inadequacy: Lack of human and financial resources of recruitment agencies Insufficient knowledge and understanding of training needs of the target beneficiaries, including the specific needs of women and men, Inadequacy of public support to definition and design of specific training curricula Scarce efficiency of the supervisory mechanisms. Outline for a possible pre-departure training curriculum, including: Identified training needs Objectives of the training Proposed contents of the training (be sector specific Proposed training format and materials Necessary resources (financial and human resources) Identified challenges and possible solutions SUGGESTED PRE DEPARTURE PREPERATIONS Apart from the basic arrangements of traveling abroad, such as passport, visa, travel formalities, traveler s cheque etc, following are the suggested preparations to be made: Know and cope with the difficulties frequently encountered during exchange Know more about the host city and country by meeting other existing workers. Tap experience from returned workers Know the adjustment and coping cycle while away from home Improve inter-cultural communication 365 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

367 Enhance self-understanding Enhance learning WORK PERMIT Work permit is a generic term for a legal authorization which allows a person to take employment. It is most often used in reference to instances where a person is given permission to work in a country where one does not hold citizenship, but is also used in reference to minors, who in some jurisdictions require a permit in order to work. A work permit is required before anyone under the age of 18 is allowed to work in any job with the exception of agriculture or domestic service work. Employers should have a work permit on file for the minor being employed before they may allow the minor to begin work. Work permits are issued at various locations throughout the state. The permit will not be issued if the work is prohibited by law. To obtain a work permit, the minor or parent must visit the permit officer, taking with them the minor's birth certificate or other proof of age, social security card, hiring statement from the employer, explaining job duties, hours of work, written parents consent and a particular fee. WORK PERMITS FOR EUROPEAN UNION Currently, every EU country has a different process for granting work permits to nationals of non-eu countries. To address this issue, the European Commission began work in 1999 on developing an EU-wide process for the entry of non-eu nationals into the work force. In October 2007, they adopted a proposal to introduce a work permit similar to the United States' "Green Card" program, called the "Blue Card". It is similar to the UK's Highly Skilled Migrant Programme, with the exception that it will require an employment contract in place prior to migration. After two years in the first country, the migrant will be allowed to move and work in another EU country, and can sum the number of years spent in the EU for purposes of residency. This new card will abolish work permits across the EU and centralize the issuing from Brussels. WORK PERMITS FOR UNITED KINGDOM There are six standard ways to apply for a work permit in the United Kingdom: the Business and Commercial Arrangements, the Training and Work Experience Arrangements, the Sports people and Entertainers Arrangements, Student Internships, GATS, and the Sectors Based Scheme. Each of these involves its own application process, and generally requires a job offer from a UK employer. The UK has stopped accepting work permits in many other categories. There is also a scheme for nationals of select countries to work in the UK as Au Pairs. (An au pair is a domestic assistant from a foreign country working for, and living as part of, a host family. Typically, au pairs take on a share of the family's responsibility for childcare as well as some housework, and receive a small monetary allowance for personal use.) This scheme is only for nationals of European Economic Area countries don't need a permit to au pair in the UK. The UK work permit system is currently being replaced by a new points-based immigration system. 366 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

368 WORK PERMIT FOR USA There are two major ways to get a work permit in USA, (i) the H1B visa and (ii) L1 visa. For migrating to USA, one needs to apply for the H1B visa. The employer and not the employee apply for this visa, for a period of up to six years. The employer then invites the employee based on the H1B visa issued to them. These visas have limitation of per-year number of staff that can be invited for work by the host company. In other words, the H1B visa is an occupation-specialized visa that is issued for the host company with a yearly limitation on the number of staff that can be invited. Usually the minimum educational qualification should be graduation (Bachelor of Arts/ Science/Commerce and so on); however, professionals like doctors, accountants, lawyers, etc will need to have a license to practice in the US State. For this purpose the professional would have to clear the bar exam of that profession before he/she could be permitted to practice their profession. The H1B covers the following professions until date: Doctors Surgeons Nurses Health care workers IT/ Computer professionals Engineers Architects Financial analysts Physicians Lawyers University professors and teachers There are three main qualifying requirements Pre-Departure General Checklist For Students University Paper Work Ensure that you have university admit card that specifies the joining date, student roll number, etc. Maintain hard copies of fees receipt and other pay slips if any. Read the joining instructions of the university carefully. This may contain some important instructions and list of documents to be produced. Take the copies of all your academic certificates along with you. Some universities provide their ID cards much before the date of joining. Check whether it is issued and if so, don't forget to take that. This is really as important as anything can get. Travel Documents Check the expiry date of your passport and renew it if necessary. Carry a photo copy of the passport with you. Your visa should be ready and so should be the photocopy of this document as well. Ensure that you have taken a medical fitness certificate to prove that you are free from communicable diseases. Carry the details of your travel insurance along with a photo copy. This is necessary to make use of insurance benefits without any delay. International travel rules will not allow you to carry luggage that weighs more than a specified weight. This may vary from one country to another. So, weigh your baggage to ensure that it weighs just as much as it should. 367 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

369 Take your driver's license or any other valid document that helps identify you. These documents may be needed to prove your identity. Label your luggage with complete contact details name, address and phone number. Health Documents Ensure that you have taken all necessary vaccinations. Get a vaccination certificate and carry it with you, along with the photo copy of the same. Take your medical history along with you. This will be of great use in case, if the need to visit a doctor abroad arises. Also try taking along prescriptions and other medical test results if any. Identify your blood group and try carrying the blood group id with you. It is better to take health insurance policies and if you have a policy remember to carry the details along with you. Documents Related To Money and Banking It would pay to always have a personal bank statement with you to make use of information on funds available. Remember to carry your credit cards with you. Always try using traveler's cheques, rather than carrying liquid money with you. Remember to keep the details of personal and baggage insurance policies with you. Other Documents Keep the contact address of your accommodation arranged at the destined county to avoid any confusion. Have a copy of the rent agreement and other valid documents on you. Keep an international call card along with you to make cheaper options to keep in touch with your family. All possible details of contacts are needed. Ensure that you have plenty of alternatives. Carry along with you copies of passport size photographs; you may need the same for legal and admission procedures. General Luggage Ensure that you have the right clothes to battle the change of seasons. Remember to carry your medicine; that is if you have been asked to do so by a doctor. There is no need to carry toiletries since the same is available everywhere, but if you are so particular about your brands, you can pack a few soaps, deodorants, lotions, etc. Bath towels, skin lotions, sunglasses, laptop, mobile chargers, etc. make for items that you can carry with you. CULTURE SHOCK Culture shock refers to the anxiety and feelings (of surprise, disorientation, uncertainty, confusion, etc.) felt when people have to operate within a different and unknown cultural or social environment, such as a foreign country. It grows out of the difficulties in assimilating the new culture, causing difficulty in knowing what is appropriate and what is not. This is often combined with a dislike for or even disgust (moral or aesthetical) with certain aspects of the new or different culture. 368 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

370 Basically, culture shock is feeling lost or uncomfortable in new surroundings. Symptoms can include homesickness, feeling anti-social or disorientated, boredom or even physical pain. It'll probably hit you hardest if you're going to a third world country, like Africa or South America, but can affect you just as readily in developed countries. Symptoms of culture shock: Unwarranted criticism of the culture and people Heightened irritability Constant complaints about the climate Continual offering of excuses for staying indoors Utopian ideas concerning one's previous culture Continuous concern about the purity of water and food Fear of touching local people Refusal to learn the language Preoccupation about being robbed or cheated Pressing desire to talk with people who "really make sense." Preoccupation with returning home COPING WITH CULTURE SHOCK Experience makes it easier to cope with the difficulties of relocation. Some common strategies used to make the transition easier are: Remain active. Do social things you enjoy that aren't related to your studies, for example, taking walks, swimming, going to concerts or movies, eating meals with some friends. Have some fun! Get a routine and stick with it! This creates a new daily life that begins to feel familiar or "normal." It's important to have regular routine same times every day for meals, going to bed, and getting up. Stay healthy. Get plenty of sleep. You may find at first you need more sleep than you did at home. Eat well. Get exercise several times a week. A healthy, well-rested body is better able to handle things like loneliness or confusion. When headaches and stomachaches become a constant problem, realize that these may be signs of emotional problems, not just physical problems. Visit a doctor or counselor at CAPS (KU Counseling and Psychological Services). Work on your communication skills. Listen carefully to what other people are saying. Be realistic in your expectations. When you begin to feel depressed, ask yourself, "What did I expect? Why? Was my expectation reasonable?" Learn the culture and customs of the country you are in and respect them. Examine your assumptions and expectations. Be open to learning new things. Explore new ways of living and compare these new ways to your own. Become more aware of both your values and attitudes and those of the host country. Be you and only you: Being in a different country doesn't mean you have to take on a different personality. If you're naturally shy at first, don't beat yourself up about it. Be friendly, and people will respond. Respect your feelings, too. CROSS-CULTURE MANAGEMENT When person from one cultural background, meet, interact with, understand and deal with person from other cultural background. That is cross-cultural management. Going overseas or trading with foreigners is becoming more common in the 21st century. Information technology (IT) has allowed companies to sell internationally. Trading internationally has given western and eastern businesses chances to compete at a higher 369 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

371 level. Prices shrink to parity and although technology is still proceeding, new competitive advantages are essential to gain sustainability and momentum in the global market. Therefore, the ability to negotiate with international partners is enormously important, not only to widen the personal cultural horizon but mainly to accomplish a successful negotiation. Trading with foreigners not solely relies on the prospective outcomes for both counterparts, but can also depend on the effects of powerful Cross Cultural Management. Culture can be analyzed from a country, language, religion, value, ethical and/or many other areas of study as a frame of reference. Cross Cultural Management includes: Managing People in Organizations Diversity Work Values Comparative Accounting Structures HRM Policies International Abstracts of Human Resources Management Theory Entrepreneurial Business Cross Cultural Venturing and Alliances Teamwork Organizational Life Cross-cultural communication (also frequently referred to as intercultural communication) is a field of study that looks at how people from differing cultural backgrounds endeavor to communicate. Cross-cultural communication tries to bring together such a relatively unrelated areas as cultural anthropology and established areas of communication. Its core is to establish and understand how people from different cultures communicate with each other. Its charge is to also produce some guidelines with which people from different cultures can better communicate with each other. International Business Etiquette and Manners Gender - Neutral Etiquette Shake hands with everyone -men and women - the same way. The one hand, up-and down handshake is the most effective and professional. Women must always stand when introduced, as men do, in a one-on-one encounter or meeting environment. Use your full name when introducing yourself, don't say, I m Monica from Marketing." Using your full name gives you more credibility and identity. It is proper and legal to address women as Ms. in a spoken or written communication. Avoid touching people, beyond the one-hand professional handshake. People open doors for people, not necessarily men opening doors for women. If someone opens the door for you, convey you re "Thanks". Lastly, in business lunch, the host pays for lunch regardless of gender. Cross Cultural Etiquette and Manners: UK British people are bit on more formal side. Firm shake hand, irrespective of gender, is good. Do it while meeting and leaving. Address with Mr., Mrs. or Miss followed by the surname. Do not start using the first name until invited to do so. Exchange the business cards at the beginning of meeting without much of ceremony. Do not stare into the eyes of English people. Introduction protocol should be followed. Introduce younger person to an older person. Introduce lower rank person to higher rank person. Introduce gentleman to lady. Business meetings are generally formal with clear objectives and agenda. 370 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

372 If you plan on an agenda, forward it to your British colleague(s) in advance for reviewing it and recommending any changes. The business proceedings normally start after a brief small talk. In your presentation do not claim more than what are facts. Support your presentation with facts and figures. Follow up the meeting with a letter summarizing the decisions arrived at and the future steps to be taken. Do not probe people with personal questions. When invited for dinner at a restaurant, be punctual. If invited at home, you may be late by 10 minutes or so, it's OK. If invited at home, present a gift to your host. It can be a box of good chocolates, a bottle of good wine or bouquet of flowers etc. Follow the dining table manners. Follow the continental manners. Do not sit down unless requested. The host may indicate the place where to sit. Communicate at a bit formal level unless you are close to the person or have developed personal friendship. Do not lean on table or do not rest your elbows on the table while dining. If invited to a meal at a restaurant, the person extending the invitation usually pays. Do not argue about paying it yourself; you may reciprocate at a later day. Discipline is important. If you happen to see a queue, always go to the end of it and wait for your turn. Do not use or chew on a toothpick in public. Do not spit any where. Cross Cultural Etiquette and Manners: USA In USA, East Coast is more conservative and formal in their dress and manners than the West Coast. For business meetings, in general, dark colored business suit with white shirt (for less formal meetings light blue shirt) and tie are appropriate. For ladies too, formal attire is recommended. Women should wear a classic suit or dress with jacket. Err on conservative appearance. Wear casual clothes when not attending a business meeting or dinner. Dress should be neat and clean in look. Men may put on comfortably fitting trousers with casual shirts. Wearing jeans or shorts, even in a casual business environment, may be inappropriate. Women may wear comfortably fitting shirts with casual shirts or tops. Again, err on conservative appearance. Wearing jeans or khaki pants or shorts is quite in place outside the business related environment, like visiting malls etc. Punctuality is very important due to the work ethic of USA In USA, generally, honest hard work is valued Business meetings may be over breakfast, lunch or dinner based on appropriateness. Business dinner is also treated as social and rapport building meal Business conversation usually takes place during meals. You may also find good degree of social conversation taking place during the meals. Gifts are discouraged or limited by many US companies. If you wish to give a gift, it should be modest and should never be seen as a bribe. you can send a gracious written note. Discipline is important. If you happen to see a line or queue, always go to the end of line and wait for your turn. Do not use or chew on a toothpick in public. Do not spit any where Public places and private homes do not allow smoking, most times because of laws preventing smoking. In case you desire to smoke, ask permission. If permission is not given, do not feel offended. On meeting people or on departing, offer a firm handshake, lasting few seconds maintaining eye contact with the person. Good eye contact shows interest, sincerity and confidence. Good friends may briefly embrace. Err on more formal behavior. Introduce as Mr., Ms, Mrs. followed by full name. Business cards are generally exchanged during introductions. However, they may be exchanged while leaving. A smile is a sign of friendliness. 371 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

373 At times, Americans to ask people as to the nature of their profession. In many countries, may be considered an offensive question- but In USA, it could be a typical starter for conversation. For Americans a way to establish a connection with people, some times, may be, is to cut jokes, especially about work-related issues. However, do not joke about gender, religion or politics. In USA, it is better not to speak about or show any ethnic inclinations. Follow the road, parking and social hygiene disciplines strictly as per country's requirements. Cross Cultural Etiquette and Manners: CANADA Canadian businesspeople often begin relationships in a reserved manner; once people get to know one another are becomes friendly and informal. Canadians appreciate politeness and expect others to adhere to the proper protocol for any given situation. Shake hands with everyone at the meeting upon arrival and departure. Maintain eye contact while shaking hands. Men may offer their hand to a woman without waiting for her to extend hers first. Honorific titles and surnames are usually not used. However, academic titles are important in Quebec and are used with the honorific Monsieur or Madame. Business cards are exchanged after the initial introduction. In Quebec, have one side of your business card translated into French. Hand the card so the French side faces the recipient. Examine any card you receive before putting it in your card case. Be punctual for meetings and appointments, as promptness is valued. In French areas, time is more relaxed. However, you will be expected to arrive at the appointed time, even if the French attending the meeting don't. Always maintain a reserved demeanor, and follow good rules of etiquette. Traditions and gracious manners are part of the culture, even in more rural areas. If you travel to different cities or areas, pay attention to local customs. By being observant, you will respect the pace and nuances of each area. Do not eat while walking in public. Plan your time so you can stop in a café or restaurant to enjoy your snack. Gifts are not routinely given. If you do give a gift when you arrive or when you are leaving, make it a modest one. A lavish gift, though accepted, would be frowned upon. Gifts are given to celebrate finalizing a negotiation, a contract, or a project. Gifts for the office, a nice bottle of wine or liquor would be appropriate. Taking a business associate to a nice meal or an evening sporting event, play, or symphony is always a nice gesture. Invitations to private homes are rare. Occasionally, in the western provinces, you may be invited to someone's home. If you are invited, you may take candy, flowers, or liquor to the host or hostess. Wait for your host to start a business conversation during or following a meal. Traditionally, business is not discussed during dinner; however, this is slowly changing. Personal space and body movement or gestures differ between the English and the French provinces and cities. In English areas, body movement is minimal, there is rarely touching other than handshakes, and personal space - how close someone stands - is about two feet. In French areas, people stand closer together, people will frequently touch, and gestures are more expressive. Use a firm handshake with good eye contact when meeting and leaving. Both French and English areas use and expect a firm handshake. Men will wait for a woman to extend her hand for a handshake. French Canadians will shake hands more frequently, even with a subsequent encounter the same day. Others may just nod or smile at a subsequent encounter on the same day. Use a person's title if he or she has one. Otherwise, use Mr., Mrs., Miss and the surname. English is spoken in most of Canada. French is spoken in Quebec, and some area of Nova Scotia and New Brunswick. French Canadians may use their first name when talking to you on the telephone, but will generally use their full name when meeting you in person. Be open and friendly in your conversation. If you are naturally reserved in your behavior, you will 372 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

374 appear confident and credible. If your natural tendency is large sweeping arm gestures, restrain yourself when meeting and talking with Canadians - other than with French Canadians. French Canadians stand closer and are more demonstrative when talking. For French Canadians, print all material in French and English. Don't be boastful, and don't overstate your product or service's capabilities. You could implicate your company in a legal situation. If you are from the U. S., don't say, "We Americans", inferring you are including your Canadian hosts or guests in your reference. Canada is a distinct country with its own wonderful history and culture. 373 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

375 Cross Cultural Etiquette and Manners: AUSTRALIA Men wear a conservative dark business suit and tie. Women may wear a dress, or skirt and blouse, for business. Informal clothing is appropriate when not attending business functions. Casual pants are fine for both men and women. Men should not become physically demonstrative with another man, or wink at a woman. Being punctual is critical. Maintain good eye contact during meetings and conversations. A single, male passenger using a taxi should sit in the front seat. Gift giving is not a common practice in business. You may bring a small gift of chocolate, wine or flowers if invited to someone's home. When paying for a round of drinks, do not pick up the tab out of turn, and make sure to pay when it is your turn. Should you approach a line/queue, go to the end/back and wait your turn. English is the spoken language Shake hands when meeting and when leaving. Although uncommon, some women may greet each other with a kiss on the cheek. Exchanging business cards is common among professional workers. Australians are friendly and open, but directness and brevity are valued. Opinions are respected, and opinionated discussions are entertaining. Be an active listener, and ask if you do not understand something in the conversation. Do not hype yourself, your company or your information. Sightseeing and sports are good conversational topics Afternoon tea is about 4:00pm Tea is between 6:00-8:00pm and is an evening meal Supper is a late night light meal or snack. Cross Cultural Etiquette and Manners: NEW ZEALAND Appointments are usually necessary and should be made at least one week in advance by telephone, fax or . It is generally easy to schedule meetings with senior level managers if you are coming from another country if the meeting is planned well in advance. It can be difficult to schedule meetings in December and January since these are the prime months for summer vacation. Arrive at meetings on time or even a few minutes early. If you do not arrive on time, your behavior may be interpreted as indicating that you are unreliable or that you think your time is more important than the person with whom you are meeting. Meetings are generally relaxed; however, they are serious events. Expect a brief amount of small talk before getting down to the matter at hand. If you make a presentation, avoid hype, exaggerated claims, hyperbole, and bells and whistles. New Zealanders are interested in what people 'can do' not what they say they can do. Present your business case with facts and figures. Emotions and feelings are not important in the New Zealand business climate. Maintain eye contact and a few feet of personal space. Always be on time or early for all appointments. Punctuality is part of the culture. "Fashionably late" is not an option in this country as most social events start on time. Maintain a reserved, formal demeanor, especially when first meeting someone. Take your lead to become more relaxed by following the behavior of your New Zealand hosts. Normal business hours are Monday Friday 8:30am-5:00pm and Saturday 9:00am-12:30pm. Talking is minimal while you are eating a meal. The conversation will occur before and after your meal. Dinners are reserved for social interactions only, therefore not business is discussed at these occasions. Lunch is used for business conversations. Boisterous behavior is always inappropriate, even when you are drinking. Pace yourself to maintain the proper reserved and polite behavior. Afternoon tea is between 3:00-4:00pm. 374 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

376 Tea is between 6:00-8:00pm, and an evening meal is served. Supper is a snack served much later in the evening, A tip may be refused, as tipping is rare. Entertaining is frequently done in a person's home. A small thank you gift of flowers, chocolate, or whiskey may be taken to the host and/or hostess. Cover your mouth if you must yawn, and do not chew gum or toothpicks in public. Ask permission before you attempt to photograph someone. When meeting someone, and when leaving, use a firm handshake with good eye contact. Good eye contact means looking into the other person's eyes when shaking hands, not looking down at your hand. The eye contact is maintained during the handshake. You are not staring at the other person, but showing genuine interest in meeting or seeing the person. Men generally wait for a woman to be the first to extend her hand for a handshake. Women do shake other women's hands. Use your same firm handshake with good eye contact. When your are meeting someone, say "How do you do?" A more relaxed greeting, such as "Hello", is reserved for the meetings after you've had the opportunity to get to know the person. The people are reserved, but always very warm and polite when you meet them. Address a person using his/her title, or Mr., Mrs., Miss plus the full name. Honesty is the best policy. Don't hype your product or service, and don't be a braggart. Do not allow your voice to get loud. Maintain a reserved manner. Politics, sports, and weather are good conversational topics, and may be hotly debated. In order to be a good conversationalist, stay current and informed on critical topics. One in particular is New Zealand's "nuclear free" zone. Avoid confusing or comparing New Zealand with Australia, as they are two distinct countries. If you are not familiar with New Zealand, spend time before your trip to learn about the history and culture. TIPS ON CROSS-CULTURAL ADJUSTMENT 1. Listen and observe. Since there are new rules, norms, and cues that may be unfamiliar to you, you need to listen to verbal communication and observe non-verbal communication carefully and try to put them in the proper context. 2. Ask questions. You cannot assume that you always know what is going on or that you always understand some communication. Most Americans will be very helpful to you if you need an explanation of something. You may need to rephrase a question, check the meaning of something, or repeat what you have said. 3. Try not to evaluate or judge. You will see many things that are different from your own culture. It is important not to label everything as good or bad in comparison with your own culture; most customs, habits, and ideas, are simply different from what you have known before. You may also misunderstand something and thus put the wrong interpretation on it until you have more information. 4. Try to emphasize. Try to put yourself in the other person's place and look at the situation from that person's perspective. There are very different cultural perspectives of the same situation. 5. Openness and curiosity. To experience a new culture and to learn from it, it is important to be open to new experiences, to try new things, to be curious about the way things are done in a new place. The more you explore, the more you learn. 6. Sense of humor. It is very likely that you will make mistakes as you explore a new culture, and if you can laugh at them yourself, it will help you learn, and other people will respond with friendliness. 7. Anxiety and frustration. Learning to function in a new culture is not easy, and it is natural to feel anxiety and frustration. If you recognize that these are a normal part of the experience, you may be able to deal with them more effectively. Your sense of humor and openness will also help. 8. Become involved. The more you put into the experience, the more you will learn from it. You should make an effort to meet people, form friendships, get involved in activities, and learn about the people and their culture. 375 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

377 CROSS CULTURAL CHALLENGES Some interesting statistics captured in the report, Language and culture in business, highlight some of the main countries with which one can face cross cultural challenges. From the results it was discovered that companies felt the major cross cultural challenges were with Japan, France, the Middle East, China and Germany. The graph below illustrates the complete results. Results: Japan 12%, France 12%, Middle East 12%, China 11%, Germany 9%, Other 20%, USA 2%, Korea 3%, S.E. Asia 4%, Spain 5%, Italy 6% It is interesting to note that over 30% of respondents claim that there are cross cultural issues with European countries. It is usually felt within business circles that cross cultural training is only necessary for countries in Asia and Africa and not Europe because they are "so like us". The statistics clearly show that despite our European commonality we still have major differences in the way we do business. Even more, of the European countries, France (closest neighbor) also provides the greatest cross cultural challenge. Why? Firstly, UK businesses are a lot more likely to deal with France rather than say Poland or Slovakia. Secondly, there is a major gap in terms of language. Both English and French compete on the international stage as world languages. The French very much like to conduct business in French and the English in English. Thirdly, there are clear cross cultural differences in ways of approaching business such as in communication, meetings, establishing trust and making agreements. Many of the other countries cited as posing particular cross cultural challenges, namely the Middle East, China and Japan have long been identified as regions where not only the business culture significantly changes but that there is a fundamental difference in ways of life. For example in the Middle East, Islam is very much an underlying current behind most social and business behavior. Similarly in China, Confucianism dictates many of their behavioral patterns. Japan poses many intricacies in terms of etiquette and protocol developed out of their uniquely hierarchical society. Overall the statistics point to recognition among British business that cross cultural awareness is a necessity when dealing internationally. It will be interesting to note how these statistics change over time as shifts in economic and political spheres influence who is doing business with whom. HURDLES TO CROSS CULTURAL BUSINESS COMMUNICATION International businesses are facing new challenges to their internal communication structures due to major reforms brought about through internationalization, downsizing, mergers, acquisitions and joint ventures. 376 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

378 Lack of investment in cross cultural training and language tuition often leads to deficient internal cohesion. The loss of clients/customers, poor staff retention, lack of competitive edge, internal conflicts/power struggles, poor working relations, misunderstandings, stress, poor productivity and lack of co-operation are all by-products of poor cross cultural communication. Here we outline a few examples of these obstacles to cross cultural co-operation: Lack of Communication It may seem obvious to state that non-communication is probably the biggest contributor to poor communication. Yet it continues to prove itself as the major problem within most companies. Lack of communication with staff is not solely due to lack of spoken dialogue. Rather it relates to access to information. For example, not giving feedback (negative or positive), informing staff of decisions and actions that will affect their roles or failure to properly communicate expectations are all ways in which information can be withheld from staff. This will eventually result in an alienated staff base that feels divided from management and superiors. If managers are too selective in providing information, this can cause suspicion and jealousy among staff and will eventually result in internal strife instead of cohesion. A management which does not and will not communicate and interact physically with staff demonstrates a lack of interest, trust and respect. In the West it is often the case that communication lines are vertical. Staff report up to managers and managers up to senior levels and so on. Ideally lines of communication should run both ways. Those with a subordinate place in the communication process tend to feel estranged, indifferent and possibly even belligerent. Lack of communication in all its forms is unhealthy. Companies and managers must be aware of how, what and to whom they are communicating. Language Communication difficulties through language come in two forms: a) Use of inappropriate language Language carries with it subliminal meanings and messages transmitted through vocabulary, stress and tone. The wrong use of words or emotions hidden behind phrases can send messages that affect staff self-perception, confidence and attitude. Critical language causes poor interpersonal relationships and low self-confidence whereas supportive language and tones has the opposite effect. b) Foreign Languages These days, offices may have native speakers of over 50 languages all under one roof. It is important that the main language of the office is established, whether it be English, French or Spanish. Once this is constituted all employees should only converse in the main language. This avoids exclusion of staff who can not understand other languages. In addition, a company should ensure that all its employees are fully conversant in the main language. Language tuition should be seen as a necessity not a luxury. Culture International businesses with a highly diverse workforce in terms of nationality and cultural background face challenges from the differences in language, values, belief systems, business ethics, business practices, behavior, etiquette and expectations. 377 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

379 Cross cultural differences can negatively impact a business in a variety of ways, whether in team cohesion or in staff productivity. As we have seen above, different methods of communication are just one area in which cross cultural differences are manifested. In such multicultural companies, objective help may be needed through a cross cultural consultant who will show teams and individuals how to manage communication and work together more cohesively and productively. Company Culture Company culture pertains to the internal culture of a company in terms of how it is managed. For example, does the company view its different departments such as sales, production, administration and HR as closed or open systems? A closed system is one in which a total lack of synergy exists between a sales and production department due to the structure and communication lines between the two. A consequence of such compartmentalization is that managers of departments have a tendency to become territorial. It is vital that team work, team building and team spirit are encouraged in order to create open systems. Such measures are especially valid in joint ventures and mergers whereby co-operation between two or more companies requires their total commitment to an open system. WHO CAN BENEFIT FROM INTERCULTURAL TRAINING? We believe intercultural training is necessary on three interconnected levels. 1) The Organizational Level: With unprecedented numbers of mergers, acquisitions and joint ventures alongside the increasing number of international organizations such as NGO's and political institutions there now exists a need to bring together people from different cultures under the umbrella of one organizational structure. This can only be realized effectively through highlighting differences in each others' interpretations of the organisation, corporate and management cultures, planning and decision making processes, leadership and team work styles. The objective is not to create a homogenous, one dimensional workforce but to simply reduce the impact of poor communication and misunderstanding. Intercultural training is the solution. 2) The Managerial/Staff Level: Effective man management now demands intercultural awareness. Offices from New York to London to Paris are now teeming with staff from the four corners of the globe. It is essential that today's manager knows how to handle their staff and how culture impacts their team. Intercultural training that focuses on management equips the learner with the relevant knowledge in areas such as leadership, hierarchy, delegation, team-building, conflict resolution and motivation. For mangers or staff going on assignments abroad, expatriate training is important to reduce the impact of culture shock and as preparation for effective integration into their future role. 3) The Societal Level: For those that deal with the public in multi-cultural societies, knowledge of different ethnicities, religions and cultures is important in breaking down barriers. As Martin Luther King once said, "Men hate each other because they fear each other, and they fear each other because they don't know each other... Emigration Check Not Required (ECNR) The following persons are not required to obtain Emigration Check Stamp at the time of going abroad: Persons going abroad in managerial capacity in: a. Hotels; b. Restaurants; c. Tea-Houses; or d. other places of public resort, possessing specialized degrees in these fields. All Gazetted Government servants. All income-tax payers in their individual capacity. These include agricultural income-tax payees. All professional degree holders like : Doctors holding MBBS Degree in Ayurved or Homeopathy; 378 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

380 Accredited Journalists; Engineers; Chartered Accountants; Cost Accountants; Lecturers; Teachers; Scientists and Advocates, etc. Spouses and dependent children (up to the age of 24 years) of all the above categories of Persons. All persons who have been staying abroad for more than three years, (the period of three years could be either at a stretch or broken) and spouses and children (upto the age of 24) of such persons. Seamen who are in possession of CDC and Sea Cadets. All holders of Diplomatic / Official Passports. Dependent children of parents whose passports are classified as ECNR. Persons holding permanent Immigration visas, such as the visas of UK, USA and Australia. Persons holding graduate or higher degrees. Persons holding 3 years diploma equivalent to degree from recognized Institutions like polytechnics. Nurses possessing qualifications recognized under the Indian Nursing Council Act, All persons above the age of 60 years Emigration Check Required Workers / Employees going abroad for employment are required to obtain Emigration Check Stamp before leaving India. The following points should be noted in this regard : Specially printed adhesive stamp will be pasted in the passport of workers going out for employment. Entries necessary for grant of emigration clearance will be made in these adhesive stamps. This will be signed by Protector of Emigrants. Emigration clearance to individuals shall be granted on the same day on which the application is made. Even where the clearance is required for groups, it is given on the same day. Emigration clearance will be granted to certain categories of skilled / semi-skilled workers for period of 6 months when they apply through authorized recruiting agents with passport containing valid employment visa. No emigration clearance is required for visiting Bangladesh, Pakistan and all countries in Europe and North America. Final Word: Confidence is key to success. Stress is a part of professional life more so when you are living in a foreign country. Your personal and professional life may undergo different stages of emotional and psychological adjustments to a new environment. It's not easy to change the basic components of one's life overnight, especially changes relating to food habits or understanding the differences in cultural and social environments. REFERENCES vbm1&id=ccm I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

381 CHAPTER 14 RECESSION Recession is a significant decline in activity across the economy, lasting for more than a few months. It is evident through fall in industrial production, employment, real income and wholesale-retail trade. The practical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession. Recession is a normal (albeit unpleasant) part of the business cycle; however, one-time crisis events can often trigger the onset of a recession. A recession is a contraction phase of the business cycle. Business cycles differ in vital respects from these daily, weekly, and annual cycles. First, the recurring sequence of changes that constitutes a business cycle expansion, downturn, contraction, and upturn is not periodic. In other words, the phases of business cycles repeat themselves, but their duration varies considerably and so too does their intensity and scope. Second, since business cycles last from about two to ten years, they are considerably longer than the other cycles. Third, business cycles have a more powerful tendency to synchronize industrial, commercial, and financial processes than do the shorter cycles. Fourth, although custom has left its imprint on the daily and annual cycles, they are part of the natural environment of man. Business cycles, on the other hand, are a product of culture. They are found only in modem nations where economic activities are organized mainly through business enterprises and where individuals enjoy considerable freedom in producing, pricing, trading, and saving or investing. When economic plans and decisions are made independently by millions of business firms and households, some imbalance is frequently bound to occur between output and sales, or between output and the stock of equipment, or between inventories and outstanding orders, or between costs of production and prices. However, the locus of the imbalance, its timing and magnitude, and the adjustments to which it leads can rarely, if ever, be foreseen with precision. In short, the business cycle lacks the brevity, the simplicity, the regularity, and dependability, or the predictability of its cousins 1. Main Causes of Recession 1. Demand Side Shock: Factors that can cause a fall in aggregate demand: Higher interest rates which reduce borrowing and investment Falling real wages Falling consumer confidence Credit crunch which causes a decline in bank lending and therefore lower investment. A period of deflation. Falling prices often encourage people to delay spending. Also deflation increases the real value of debt causing debtors to be worse off. Appreciation in exchange rate which makes exports expensive and reduces demand for exports. 380 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

382 2. Supply Side Shock Higher oil prices would increase the cost of production and causes the short run aggregate supply curve to shift to the left. This supply side shock causes lower real GDP and higher inflation. This is difficult to solve with monetary policy - because we have both inflation and lower output to try and solve. (Changing interest rates can't do both at once.) 2 High Interest Rates Usually Cause Recession: That's because it limits liquidity, or the amount of money available to invest. Indian Scenario: Although the Indian economy hasn t entered a recession since the 90s there have been four distinct slowdowns March 2000 to July 2001, April 2004 to October 2004, October 2005 to March 2006 and January 2007 to January 2009 according to Pami Dua s research. There are a number of reasons that have 381 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

383 resulted in the recent trend of declining growth including a negative attitude toward foreign retail investment, a persistent budget deficit, poor energy infrastructure and continued price controls on natural gas and coal 3. Managing growth and price stability are the major challenges of macroeconomic policymaking. In , India found itself in the heart of these conflicting demands. The Indian economy is estimated to grow by 6.9 per cent in , after having grown at the rate of 8.4 per cent in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except ). At the same time, sight must not be lost of the fact that, by any cross-country comparison, India remains among the front-runners. With agriculture and services continuing to perform well, India s slowdown can be attributed almost entirely to weakening industrial growth. The manufacturing sector grew by 2.7 per cent and 0.4 per cent in the second and third quarters of Inflation as measured by the wholesale price index (WPI) was high during most of the current fiscal year, though by the year s end there was a clear slowdown. Food inflation, in particular, has come down to around zero, with most of the remaining WPI inflation being driven by non-food manufacturing products. There was a reduction in investment rates, both in the public and private sectors, particularly the corporate sector, in Reduction in corporate investment could be attributed to global factors, with the global economy exhibiting signs of slowing down in the second half of 2010 as well as to domestic factors, namely increased cost of borrowing following the raising of interest rates in order to control inflation. Fixed investment as a ratio of GDP has fallen from 31.6 per cent in to 30.4 per cent in Industrial growth, measured in terms of the index of industrial production (IIP), shows fluctuating trends. Initial deceleration in industrial growth was largely on account of the global economic meltdown. There was, however, a recovery from 5.3 per cent in to 8.2 per cent in Fragile economic recovery in the US and Europe and moderately subdued expectations at home affected the growth of the industrial sector in the current year. Headline WPI inflation remained persistently high and relatively sticky at around 9 per cent during Though inflation remained high throughout the year, it has shown signs of moderation lately. The major contributory factors to headline inflation during the current financial year include (a) higher primary articles prices driven by vegetables, eggs, meat, and fish due to changing dietary pattern of consumers; (b) increasing global commodity prices especially metal and chemical prices which ultimately led to higher domestic manufactured prices; and (c) persistently high international (Brent) crude petroleum prices in the last two years averaging around Rs per barrel (/bbl) in 2011 (January- December) as compared to Rs in 2010 (January- December). Among individual product groups, inflation in food products, beverages, textiles, chemicals, and basic metals remained elevated mainly on account of high global commodity prices. Monetary policy was tightened by the Reserve Bank of India (RBI) during the year to control inflation and curb inflationary expectations. The slowing inflation reflects the lagged impact of actions taken by the RBI and the government. Reflecting the weak manufacturing activity and rising costs, revenues of the centre have remained less than anticipated; and, with higher than-budgeted expenditure outgo, a slippage is expected on the fiscal side. The global economic environment, which has been tenuous at best throughout the year, turned sharply adverse in September 2011 owing to the turmoil in the eurozone, and questions about the outlook on the US economy provoked by rating agencies. However, for the Indian economy, the outlook for growth and price stability at this juncture looks more promising. There are signs from some high frequency indicators that the weakness in economic activity has bottomed out and a gradual upswing is imminent. World Scenario: Strong exports limited the euro zone's economic contraction in the second quarter of this year despite falling investment, inventories and private consumption that point to output shrinking overall in The debt crisis that began in Greece nearly three years ago has crushed Europe's efforts at recovery from the global financial crisis, probably sending the bloc into recession for the second time in just three years. The euro zone would already be in a technical recession, were it not for flat output in the first three months of the year, after a 0.3% quarterly contraction in the last quarter of I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

384 Eurostat said a fall in household consumption subtracted 0.1 percentage point from the final quarterly GDP figure and shrinking investment and inventories took away 0.2 percentage points each, compared with the previous three months. Strong exports, however, added 0.6 percentage point which, after the negative contribution of imports, left the net result from trade at a positive 0.2 percentage point. The euro zone's biggest hurdle is that Europeans' ability to spend and drive a recovery has been devastated by government lay offs, budget cuts, record joblessness and stubbornly high inflation pushed up by world oil prices. With the Chinese economy slowing and the U.S. economy struggling to build a solid recovery, the euro zone cannot rely on exports to pull it out of the downturn, however. Recession is already a reality for much of southern Europe while Germany and France, the bloc's two largest economies, are starting to feel the malaise as Spaniards and Italians buy fewer of their products5. Revised figures from Japan's Cabinet Office show the economy contracted at an annual rate of 3.5% from July to September GDP for April to June, previously rated as a small expansion, was revised lower to an annual contraction of 0.1%. Economists are increasingly pessimistic about Japan's economy, and many expect GDP to contract in the current quarter as well. The third-largest economy in the world, Japan has suffered from weak exports, a trade spat with China and continued fallout from last year's nuclear disaster and tsunami 6. Impact of Recession: 1) Savings: In recession, private sector savings tend to rise. This is because people become more nervous to spend. The specter of unemployment encourages people to save more and spend less. However, the rise in private sector saving may be offset by a fall in public sector saving i.e. government borrowing increases to try and stimulate the economy. 2) Consumption: It will tend to fall because people are worse off. 3) Investment: Investment will fall. Usually investment is highly cyclical. Therefore, a recession causes a bigger % fall in investment than consumption. Confidence is very important to investment so in a recession, investment tends to dry up. 4) Government spending: Automatic fiscal stabilizers will cause government spending to rise. e.g. in recession, government have to spend more on unemployment benefits. Also the government may pursue expansionary fiscal policy to try and increase aggregate demand e.g. spending on infrastructure projects. 5) Aggregate demand: It shows fall during recession time. Impact on Indian Economy In India, the impact of the crisis has been deeper than what was estimated by our policy makers although it is less severe than in other emerging market economies. The extent of impact has been restricted due to several reasons such as- Indian financial sector particularly our banks have no direct exposure to tainted assets and its off-balance sheet activities have been limited. India s growth process has been largely domestic demand driven and its reliance on foreign savings has remained around 1.5 per cent in recent period. India s merchandise exports are around 15 per cent of GDP I. Stock Market The economy and the stock market are closely related as the buoyancy of the economy gets reflected in the stock market. Due to the impact of global economic recession, Indian stock market crashed from the high of to a low of around 8000 points (currently in 2012 stock market trading at 19, yet not stable but continuously going up). Corporate performance of most of the companies remained subdued, and the impact 383 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

385 of moderation in demand was visible in the substantial deceleration. Corporate profitability also exhibited negative growth in Corporate performance in fiscal in India has been better. The corporate sector has performed creditably in a difficult environment and this performance is not reflected in the markets as markets are grappling with a below par performance of the macro economy. II. Forex Market In India, the current economic crisis was largely insulated by the reversal of foreign institutional investment (FII), external commercial borrowings (ECB) and trade credit. Its spillovers became visible in September- October 2008 with overseas investors pulling out a record INR billion and fall in the nominal value of the rupee from Rs per USD in March 2009, to per USD in 2012.Hence, sharp fluctuation in the overnight forex rates and the depreciation of the rupee reflects the combined impact of the global credit crunch and the deleveraging process underway in Indian forex market. FIIs had pulled out Rs 2,714 crore in FIIs have been betting high on the Indian equities in the last few months this year on the back of a slew of reforms initiated by the government, pushing up the broader market Sensex by about 25 per cent so far in However, the pace of investment has been slowed. In September, overseas investors had infused Rs 19,261 crore in the stock market, followed by Rs 11,364 crore in October and Rs 9,577 crore in November. Apart from investing in equities, overseas investors have made a net investment of Rs 33,284 crore (USD 6.32 billion) in the debt market so far this year. However, the number of registered FIIs in the country declined to 1,752 as of November 30, from 1,767 at the end of III. Money Market The money market consists of credit market, debt market and government securities market. All these markets are in some or other way related to the soundness of banking system as they are regulated by the Reserve Bank of India. According to the Report submitted by the Committee for Financial Sector Assessment (CFSA), set up jointly by the Government and the RBI, our financial system is essentially sound and resilient, and that systemic stability is by and large robust and there are no significant vulnerabilities in the banking system. Yet, NPAs of banks may indeed rise due to slowdown as Reserve Bank has pointed out. But given the strength of the banks balance sheets, that rise is not likely to pose any systemic risks, as it might in many advanced countries. IV. Slowing GDP In the past 5 years, the economy has grown at an average rate of 8-9 per cent. Services which contribute more than half of GDP have grown fastest along with manufacturing which has also done well. But this impressive run of GDP ended in the first quarter of 2008 and is gradually reduced. The Indian economy s score card is not reading so well for fiscal with GDP growth down to 6.9% from 8.6% levels seen in , fiscal deficit up by 1.3% from budgeted levels and Current Account deficit higher by 1%. Trend GDP growth rates in India (%) Industry Q1 Q2 Q3 Q4 Q1 Agriculture Industry Mining & quarrying Manufacturing Electricity, gas & water supply Construction Services I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

386 Trade, hotels, transport & communication Financing, insurance, real estate & business services Community, social & personal services GDP at factor cost Source: CSO & FICCI Research V Reduction in Import-Export Although India's exports surpassed the INR billion mark and reached INR billion during , the country's trade deficit also touched an all-time high of INR billion in the period. During January- November 2012, the trade gap has widened to INR 9597 billion compared to INR 8038 billion in the comparable period last year. For government, it is a major cause of concern, as widening trade gap directly impacts current account deficit (CAD) and domestic currency. CAD stood at 3.9 per cent of GDP in the April- June quarter. Due to the global demand slowdown, India's exports during the current fiscal are likely to barely cross INR billion against the ambitious target of INR billion for the current fiscal. The government's effort to diversify from the traditional markets of the US and Europe yielded positive results but dependence on the western economies have led to decline in the country's overall merchandise shipments. These two market accounts for about one-third of India's exports. VI. Reduction in Employment Employment is worst affected during any financial crisis. So is true with the current global meltdown. This recession has adversely affected the service industry of India mainly the BPO, KPO, IT companies etc. According to a sample survey by the commerce ministry 109, 513 people lost their jobs between August and October 2008, in export related companies in several sectors, primarily textiles, leather, engineering, gems and jewelry, handicraft and food processing. Unemployment rate (%) Country India VIII. Taxation The economic slowdown has severely dented the Centre s tax collections with indirect taxes bearing the brunt. Under these constraints, general government revenues have relied on manufactured goods (consumption and trade) and corporate profit taxes, which at the end of March 2011, accounted for 35 percent and 22 percent of general government revenues, respectively. Both taxes are highly sensitive to growth trends. In , corporate profits were hit by multiple shocks, including slowing domestic demand, heightened input costs domestic interest rates, and risk aversion limiting international capital availability. In 2012, Moody s expects India s tax-to-gdp ratio to recover from its current level of under 15 percent to 17 percent when GDP growth recovers and sustains at levels higher than 8 percent. According to Moody s the tax net has been progressively expanded to include a greater number of services each year, and service tax revenue has grown the fastest of all revenue sources. Yet, service taxes constitute merely 5 percent of total general government revenues, although they comprise about 60 percent of GDP. 385 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

387 Impact on World Economy The outlook for the global economy in 2012 is clear, but it isn't pretty: recession in Europe, anemic growth at best in the United States, and a sharp slowdown in China and in most emerging-market economies. Asian economies are exposed to China. Latin America is exposed to lower commodity prices (as both China and the advanced economies slow). Central and Eastern Europe are exposed to the euro zone. And turmoil in the Middle East is causing serious economic risks both there and elsewhere as geopolitical risk remains high and thus high oil prices will constrain global growth. At this point, a euro zone recession is certain. While its depth and length cannot be predicted, a continued credit crunch, sovereign-debt problems, lack of competitiveness, and fiscal austerity imply a serious downturn. Seen individually, the German economy is expected to contract at an annualized rate of 0.5 % in the third quarter and at 0.8 % in the fourth. The French outlook is slightly better, with contraction at an annualized rate of 0.4 % in the third quarter followed by a slight pick up in growth at 0.2 % in the fourth. In Italy, the deep recession will continue with contraction at an annualized rate of 2.9 % in the third quarter and 1.4 % in the fourth. The weak growth outlook is expected to push unemployment beyond today s already high levels. The US growing at a snail's pace since 2010 faces considerable downside risks from the euro zone crisis. It must also contend with significant fiscal drag, ongoing deleveraging in the household sector (amid weak job creation, stagnant incomes, and persistent downward pressure on real estate and financial wealth), rising inequality, and political gridlock. Elsewhere among the major advanced economies, the United Kingdom is double dipping, as front-loaded fiscal consolidation and euro zone exposure undermine growth. In Japan, the post-earthquake recovery will fizzle out as weak governments fail to implement structural reforms. Meanwhile, flaws in China's growth model are becoming obvious. Falling property prices are starting a chain reaction that will have a negative effect on developers, investment, and government revenue. The construction boom is starting to stall, just as net exports have become a drag on growth, owing to weakening US and 386 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

388 especially euro zone demand. Having sought to cool the property market by reining in runaway prices, Chinese leaders will be hard put to restart growth. They are not alone. On the policy side, the US, Europe, and Japan, too, have been postponing the serious economic, fiscal, and financial reforms that are needed to restore sustainable and balanced growth. Private- and public-sector deleveraging in the advanced economies has barely begun, with balance sheets of households, banks and financial institutions, and local and central governments still strained. Only the highgrade corporate sector has improved. But, with so many persistent tail risks and global uncertainties weighing on final demand, and with excess capacity remaining high, owing to past over-investment in real estate in many countries and China's surge in manufacturing investment in recent years, these companies' capital spending and hiring have remained muted. Rising inequality owing partly to job-slashing corporate restructuring is reducing aggregate demand further, because households, poorer individuals, and labor-income earners have a higher marginal propensity to spend than corporations, richer households, and capital-income earners. Moreover, as inequality fuels popular protest around the world, social and political instability could pose an additional risk to economic performance. At the same time, key current-account imbalances between the US and China (and other emerging-market economies), and within the eurozone between the core and the periphery remain large. Orderly adjustment requires lower domestic demand in over-spending countries with large current-account deficits and lower trade surpluses in over-saving countries via nominal and real currency appreciation. To maintain growth, overspending countries need nominal and real depreciation to improve trade balances, while surplus countries need to boost domestic demand, especially consumption. But this adjustment of relative prices via currency movements is stalled, because surplus countries are resisting exchange-rate appreciation in favour of imposing recessionary deflation on deficit countries. The ensuing currency battles are being fought on several fronts: foreign-exchange intervention, quantitative easing, and capital controls on inflows. And, with global growth weakening further in 2012, those battles could escalate into trade wars. Finally, policymakers are running out of options. Currency devaluation is a zero-sum game, because not all countries can depreciate and improve net exports at the same time. Monetary policy will be eased as inflation becomes a non-issue in advanced economies (and a lesser issue in emerging markets). But monetary policy is increasingly ineffective in advanced economies, where the problems stem from insolvency and thus creditworthiness rather than liquidity. Meanwhile, fiscal policy is constrained by the rise of deficits and debts, bond vigilantes, and new fiscal rules in Europe. Backstopping and bailing out financial institutions is politically unpopular, while near-insolvent governments don't have the money to do so. As a result, dealing with stock imbalances the large debts of households, financial institutions, and governments by papering over solvency problems with financing and liquidity may eventually give way to painful and possibly disorderly restructurings. Likewise, addressing weak competitiveness and current-account imbalances requires currency adjustments that may eventually lead some members to exit the eurozone. Restoring robust growth is difficult enough without the ever-present spectre of deleveraging and a severe shortage of policy ammunition. But that is the challenge that a fragile and unbalanced global economy faces in How the Indian Government and RBI Responded? The contagion from the global financial crisis required appropriate monetary and fiscal policy responses to ensure enough liquidity in the economy, the orderly functioning of markets, and the financial stability. The government of India and RBI responded to the challenge strongly through its fiscal and monetary policies. 387 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

389 The government has introduced three fiscal stimulus packages. These are expanded safety- net programme for the rural poor, the farm loan waiver package and payout following the Sixth Pay Commission report for stimulating demand in the economy. On the other hand in aftermath of the turmoil caused by bankruptcy, the Reserve Bank has announced a series of measures to facilitate orderly operation of financial markets and to ensure financial stability, which predominantly includes extension of additional liquidity support to banks. The RBI has been effectively able to manage domestic liquidity and monetary conditions consistent with its monetary policy. This has been enabled by the appropriate use of a range of instruments available for liquidity management with the Reserve Bank such as the Cash Reserve Ratio (CRR), which was reduced to 5% in July 2009 from 9% in August 2008 and Statutory Liquidity Ratio (SLR) stipulation and Open Market Operations (OMO) including the Market Stabilization Scheme (MSS) and Liquidity Adjustment Facility (LAF). Reduction in the repo rate (the rate at which RBI lends to the banks) from 9% as on October 2008 to 4.75% in July 2009 and the reverse repo-rate (RBI s borrowing rate) reduced to 3.25% in July 2009 in order to improve the flow of credit to productive sectors at viable costs so as to sustain the growth. Further-more, money market liquidity is also impacted by our operation in the foreign exchange market, which in turn, reflects the evolving capital flows. The existing set of monetary instruments has thus, provided adequate flexibility to manage the evolving situation. So the financial sector has emerged without much damage thanks in part of our strong regulatory framework and in part on account of most of the nationalized banking sector. Impact on Indian Service Industry The services sector covers a wide range of activities from the most sophisticated information technology (IT) to simple services provided by the unorganized sector, such as the services of the barber and plumber. National Accounts classification of the services sector incorporates trade, hotels, and restaurants; transport, storage, and communication; financing, insurance, real estate, and business services; and community, social, and personal services. In World Trade Organization (WTO) and Reserve Bank of India (RBI) classifications, construction is also included. Conventional wisdom suggests that during the early development phase of any country, expansion of output in manufactured goods precedes growth in the services sector. As a country progresses further manufacturing often takes a back seat, giving way to the services sector in terms of both output and employment, and manufacturing firms themselves become increasingly service centric in order to remain competitive. In 2010, the share of services in the INR 3445 trillion world gross domestic product (GDP) was nearly 68 per cent, as in India s performance in terms of this indicator is not only above that of other emerging developing economies, but also very close to that of the top developed countries. Among the top 12 countries with highest overall GDP in 2010, India ranks 8 and 11 in overall GDP and services GDP respectively. While countries like the UK, USA, and France have the highest share of services in GDP at above 78 per cent, India s share of 57 per cent is much above that of China at 41.8 per cent. In 2010 compared to 2001, India is the topmost country in terms of increase in its services share in GDP (7 percentage points) followed by Spain and Canada (5.3 percentage points each), the UK (4.5 percentage points), and Italy (3.2 percentage points). In terms of compound annual growth rate (CAGR) for the period , China at 11.3 per cent and India at 9.4 per cent show very high services sector growth. The share of services in India s GDP at factor cost (at current prices) increased from 55.1 per cent in and to 56.3 per cent in as per Advance Estimates (AE). With a 16.9 per cent share, trade, hotels, and restaurants as a group is the largest contributor to GDP among the various services subsectors, followed by financing, insurance, real estate, and business services with a 16.4 per cent share. In the years and , the services sector has grown at 10.5 per cent and 9.3 per cent respectively. In , the growth rate of services was 9.4 per cent. FDI plays a major role in the dynamic growth of the services sector though the ambiguity in classifying various activities under the services sector poses difficulty in the measurement of FDI inflows into this sector. The combined FDI share of financial and non-financial services, computer hardware and software, telecommunications, and housing and real estate can be taken as a rough estimate of FDI share of services, though it could include some non-service elements. This share is 41.9 per cent of the cumulative FDI equity 388 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

390 inflows during the period April 2000-December If the shares of some other services or service-related sectors like hotels and tourism, trading, information and broadcasting, consultancy services, ports, agriculture services, hospital and diagnostic centers, education, air transport including air freight, and retail trading are included then the total share of cumulative FDI inflows to the services sector would be 58.4 per cent. Following the general trend in FDI inflows, FDI inflows to the services sector (top five sectors including construction) have also slowed down in and , with negative growths of -7.5 per cent and per cent respectively in rupee terms. In (April-December), again following the trend of overall FDI inflows, which increased by 50.8 per cent to reach INR 1323 billion, FDI inflows to the top five service sectors (including construction) also increased by 36.8 per cent to INR 509 billion Services (financial and nonfinancial), telecommunications, and construction, are the leading sectors in FDI inflows to the services sector in (April-December). The inflows to the other two service sectors are comparatively low. While agriculture continues to be the primary employment-providing sector, the services sector (including construction) is in second place. As per the National Sample Survey Organization s (NSSO) report on Employment and Unemployment Situation in India , on the basis of usually working persons in the principal status and subsidiary status, for every 1000 people employed in rural and urban India, 679 and 75 people are employed in the agriculture sector, 241 and 683 in services sector (including construction), and 80 and 242 in the industrial sector, respectively. Trade: Trade is an important activity providing interface between the producer and consumer. The value of trade (inclusive of wholesale and retail in the organized and unorganized sectors) in India s GDP at constant prices has grown from ` 433,967 crore in to ` 742,621 crore in , at a CAGR of 9.4 per cent. As per the CSO s QE, the growth rate in was 9.1 per cent. The share of trade in GDP has been slightly above 15 per cent in the last six years (15.4 per cent in ). With a high GDP growth in the last five years, and high growth in consuming population, the retail business is of late being hailed as one of the sunrise sectors in the economy. A. T. Kearney, an international management consultancy firm, has identified India as one of the topmost retail destinations. Since 2006, India has been allowing FDI in single brand retail to the extent of 51 per cent. In January 2012, the government removed restrictions on FDI in the single brand retail sector, allowing 100 per cent FDI. Allowing FDI in multi-brand retail is one of the major issues in this sector. This could begin in a phased manner in the metros, with the cap at a lower level coupled with incentivizing the existing mom and pop stores (kirana shops) to modernize and compete effectively with the retail shops, foreign or domestic. While agricultural marketing could improve immensely with the growth of modern retail trade, the revenue to the government could also increase, as at present the retail sector is largely unorganized and has low tax compliance. The Inter-Ministerial Group (IMG) on Inflation of the Government of India has also recommended leveraging FDI in multi-brand retail as one of the means for addressing issues relating to high rates of food inflation and low prices realized by Indian farmers, developing a farm-to-fork retail supply system, and addressing the investment gaps in post harvest infrastructure for agricultural produce. Financial Sector India s financial markets equity markets, money markets, forex markets and credit markets had all come under pressure from a number of directions. Indian equity market will continue to track global developments in The financial sector bore the brunt of the global economic crisis between October 2008 and March That period was the first time post-liberalisation that white collar workers were laid off in large numbers as banks and insurance companies, particularly those with foreign equity and those in the private sector, were squeezed. 389 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

391 First, the Indian stock markets, both BSE as well as NSE, fell dramatically over 2008 India s main index Sensex plunged nearly 50% during the year from a high of 19,080 in January 2008 to 8,674 in January The NSE also fell by a similar percentage. Foreign institutional investors pulled out close to Rs 50,000 crore (Rs 500 billion) from the domestic stock market in , almost equaling the inflow in the previous fiscal. As per the latest information on the Securities and Exchange Board of India website, FIIs net outflows have been Rs 47,706 crore (Rs billion) till March 30 in the financial year as against huge inflows of Rs 53,000 crore (Rs 530 billion) in the previous fiscal. However, it is believed that FIIs may resume investments in Indian equities later in FY , as the country still remains an attractive investment destination with sound fundamentals. As a consequence of the global liquidity squeeze, Indian banks and corporates found their overseas financing drying up, forcing corporates to shift their credit demand to the domestic banking sector. Also, in their frantic search for substitute financing, corporates withdrew their investments from domestic money market mutual funds putting redemption pressure on the mutual funds and down the line on Non-Banking Financial Companies (NBFCs) where the MFs had invested a significant portion of their funds. This substitution of overseas financing by domestic financing brought both money markets and credit markets under pressure. In the foreign exchange market, although there has been some flight of foreign capital from the Indian capital markets, the current level of reserves is reasonably healthy. In fact, the extent of inward remittances during 2008 was a record INR 2187 billion. The forex market came under pressure because of reversal of capital flows as part of the global deleveraging process. Simultaneously, corporates were converting the funds raised locally into foreign currency to meet their external obligations. Both these factors put downward pressure on the rupee. Third, the Reserve Bank s intervention in the forex market to manage the volatility in the rupee further added to liquidity tightening. The financial sector is the second largest white collar employer after it services. The Assocham survey shows a decline in the hiring trend between the January to March quarter and the April to June quarter from over 20,000 jobs to over 17,000. The steepest decline of over 20 per cent is in the insurance segment. It is also the segment which the Government could boost with reformist legislation, but has made little progress in doing so. The scenario for may not be as dire as in , but it isn't even half as good as in the post-crisis year of when the sector grew by 31.6 per cent. A forecast by Kotak Institutional Equities says the sector is expected to grow per cent in Foreign banks have already begun adjusting their workforce. Indian banks were relatively immune from the global financial crisis of In , they are more vulnerable because of a significant rise in non-performing assets. A slowdown in economic growth coupled with high interest rates is a nightmare scenario for repayment of loans. The infrastructure sector, particularly coal and power, could cause serious problems for banks. Several projects are held up because of environmental problems and problems in the supply of inputs like gas and coal. The probability of default on debt is high. Drawing a parallel with the US banking crisis of 2008, a senior industry representative says "the power sector could be the subprime crisis of India". The Government could help boost the financial sector. A long pending bill to raise the FDI limit in insurance from 26 per cent to 49 per cent would give a fillip to the sub-sector of financial services which is showing the greatest decline in employment prospects. However, with Parliament stalled and Government in paralysis, the light for reform is very dim. Tourism, including hotels and restaurants Tourism is not only a growth engine but also an export growth engine and employment generator. In India, the tourism sector has witnessed significant growth in recent years. During the period 2006 to 2011, the CAGRs of foreign tourist arrivals (FTA) and foreign exchange earnings (FEE) from tourism (in rupee terms) were 7.2 per cent and 14.7 per cent respectively. FTAs in India during 2010 were 5.78 million compared to 5.17 million during 2009, posting a growth of 11.8 per cent, much higher than the growth of 6.5 per cent for the world in FEEs from tourism in rupee terms during 2010 were ` 64,889 crore compared to ` 54,960 crore during 2009 with a growth rate of 18.1 per cent. Despite the slowdown and recessionary trends in the economies of Europe and America, FTAs during 2011 were 6.29 million with a growth of 8.9 per cent over 2010 and FEEs in 2011 were ` 77,591 crore with a growth of 19.6 per cent. In the case of outbound tourism, the number of Indian nationals departures from India during 2010 was million with a growth of 17.4 per cent for the year. 390 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

392 Domestic tourism has also emerged as an important contributor to the sector providing much needed resilience. Domestic tourist visits during 2010 are estimated at million, with a growth of 10.7 per cent. Hotels and restaurants is an important component of the tourism sector. As on 31 December 2011, there were 2,895 classified hotels having a capacity of 1,29,606 rooms in the country. Availability of good quality and affordable hotel rooms plays an important role in boosting the growth of tourism in the country. The share of the hotel and restaurant sector in overall economy increased from 1.46 per cent in to 1.53 per cent in and then decreased to 1.46 per cent in However, if the contribution of this sector only in the service sector is considered, its share decreased to 2.64 per cent in as other service sectors grew faster than this sector. Its CAGR was 8.44 per cent during and the growth rate in was 7.7 per cent. Health tourism, the new entrant in the sector, is a niche area where India has good potential. As is natural, with the growth of this sector, components like air travel and hotel stay have been included under service tax. Some of the problem areas in this sector include the following. States impose luxury tax ranging from 5 per cent to 12.5 per cent. In some cases, the luxury tax is applicable on printed room rates whereas actual hotel rates offered to guests are much lower. With a view to rationalizing luxury tax on hotels, the Government of India has requested the states to work towards rationality and uniformity of taxes so as to make their destinations more competitive. They have been also requested to exempt room tariff below ` 2,500 from luxury tax and charge luxury tax at a uniform rate of 4 per cent on actual tariff. Construction of hotels is primarily a private-sector activity which is capital intensive and has a long gestation period. A major constraint being faced by the hotel industry in addition to the high cost and limited availability of land is the procurement of multiple clearances / approvals required from central and state government agencies for hotel projects. Other measures in this sector could include rationalizing the fees for entry to monuments and using the fees for their maintenance; focusing on safety of tourists; and promoting wellness tourism. Some Transport Related Services Shipping Shipping is an important indicator of both commodity and services trade of any country. It plays an important role in the Indian economy with around 95 per cent of the country s trade by volume and 68 per cent in terms of value being transported by sea. As on 1 January 2012, India had a fleet strength of 1,122 ships with Gross Tonnage (GT) of million, the public-sector Shipping Corporation of India having the largest share of per cent. Of this, 372 ships with10.01 million GT cater to India s overseas trade and the rest to coastal trade. The gross foreign exchange earnings/savings of Indian ships in were ` 10, crore. Though India has one of the largest merchant shipping fleets among developing countries, it is ranked eighteenth in the world in terms of DWT with a share of only 1.09 per cent as on 1 January In comparison, China is ranked ninth with a share of 3.78 per cent Indian vessels are also relatively older than the international average. India is also one of the major nations undertaking ship-breaking service. In 2010, with a world share of per cent, it topped the list of ship-scrapping nations, scrapping 451 ships with 9.28 million DWT. India is also one of the major countries supplying seafarers. At third rank and with a 7.5 per cent share in 2010, it supplied 46,497 officers to the global shipping industry. However, India is ranked 22nd in 2011 according to the UNCTAD liner shipping index, down from 21st position in The global shipping industry has been experiencing turbulent waters in the year 2011 due to the economic slowdown. Indian shipping companies faced problems of restricted cash inflows in due to very low charter hire and freight rates in all segments of shipping. Most Indian shipping companies that have been able to better manage their businesses have been those with a diversified presence across shipping segments or businesses. While the bulkers and tankers segments have seen a downturn, the offshore segment with jack ups and sub-sea vessels has ensured cash visibility for companies. 391 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

393 While India s overseas seaborne trade has been growing substantially over the years, to 570 million tonnes in , there has been sharp decline in the share of Indian ships in the carriage of India s overseas trade. It has declined to 9 per cent in with an 18 per cent share in India s oil imports in Given the relatively low participation of Indian ships in India s trade and given the fact that Indian ships are ageing, with the average age of the Indian fleet increasing to years in 2012, there is urgent need to increase the shipping fleet so that it is at least enough to meet India s trade volumes. The estimated freight bill of India in , based on 7.5 per cent of the value of seaborne trade, total INR 3117 billion and estimates show that a 5 per cent increase in tonnage could lead to a INR 345 billion saving/earning of foreign exchange. Strengthening the Indian fleets with adequate and cheap finance is important, rationalizing the multiple levies in the shipping sector could also help. Port Services Ports are the vital link in the trade between nations. Continuous modernization of ports and upgradation of port infrastructure are important to increase the productivity and efficiency of ports. The total capacity of Indian ports has reached approximately 1,160 million tonnes as on 1 January During , traffic at major ports attained a growth of 1.59 per cent over the previous year. The American Association of Port Authorities, ranks Shanghai at the top with regard to total cargo volume handled in 2009, Madras Port and the Jawaharlal Nehru Port Trust (JNPT) are ranked 55th and 56th in 2009 in terms of total cargo volume. With the average turnaround time in India already relatively high by international standards, the turnaround time of Singapore port being less than a day, what is cause for worry is the further rise in average turnaround time and average pre-berthing time though average output per ship-berth-day has increased in and April-September 2011 The government is also making all round efforts to increase port capacity in the country through the development of additional berths at the major ports, mechanization, deepening of channels and harbors to receive bigger vessels, improved rail and road connectivity and by facilitating similar development at the nonmajor ports promoted by state governments. However, there is need to further strengthen this major artery of Indian trade. Better infrastructure is needed particularly for handling crude oil. Other issues include upgrading the facilities at existing ports with regard to cargo handling, stevedoring, pilotage services, bunker services, and warehousing facilities; increasing the drafts to facilitate transshipment of Indian cargo which otherwise takes place outside the country; and rationalizing the different port charges to make them comparable with best practice levels. Storage Services Warehousing services are an integral part of both inbound and outbound logistics, as goods produced have to be stored in different geographical locations before shipping/dispatch as per demand/ order flows. In India, the most important component of warehousing is agricultural storage for agriproduce, foodgrains, fertilizers, manure, etc. Other components include industrial warehousing for industrial goods, import cargo, and excisable cargo; inland container depots (ICDs)/container freight stations (CFSs) for facilitating import/export trade; and special warehouses for cold and temperature controlled storage. The warehousing sector also provides many ancillary services. The Central Warehousing Corporation (CWC) along with 17 State Warehousing Corporations (SWCs) provides scientific storage facilities for agricultural produce and implements and other notified commodities. Its commercial outreach coupled with social objectives has resulted in the CWC operating a large warehousing network across the country. As on 31 December 2011, it was operating 469 warehouses, with total storage capacity of lakh MT and warehouses are lower than the 479 as on 31 March, 2011 due to de-hiring of capacity. Major policy initiatives taken recently by the government include construction of godowns under the seven-year/10-year guarantee scheme of the Government of India; permission of up to 100 per cent FDI in the construction of warehousing infrastructure; construction of warehouses under the Grameen Bhandaran Yojana of the National Bank for Agriculture and Rural Development (NABARD) and the Rastriya Krishi Vikas Yojana; making the warehouse receipt fully negotiable; and construction of godowns under its Private Entrepreneurs Godown (PEG) scheme. The CWC has planned to construct additional capacity of 2.09 lakh MT during There is, however, need to further increase high quality storage capacity and the number of trained samplers/graders. 392 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

394 Communication Services Telecom and Related Services Indian telecom has proved to be an international success story with the sector witnessing commendable growth over the past few years. The Indian telecom network is ranked as the second largest in the world, next only to China. The total number of telephones has increased million as on 31 December The growth in wireless connections has been phenomenal, reaching million connections at the end of December 2011, taking their share to over 96 per cent of total telephones in the country. Tele-density, which is an important indicator of telecom penetration, has increased to per cent in December The liberal policy regime facilitated the growth of the sector and lowered the costs for consumers, though the recent court cases related to the telecom sector have dampened the mood. Since the announcement of the Broadband Policy in 2004, several measures have been taken to promote broadband penetration in the country. As a result, there are million broadband subscribers as on 31 December 2011 and million internet subscribers at the end of March However, broadband has lagged behind the growth of telephones in India. Special efforts are being made to increase the penetration of broadband, especially in rural and remote areas. The upcoming decade is likely to usher in an information era through Mobile Value Added Services (MVAS) and Broadband for All. The successfully concluded auction of the Broadband Wireless Access (BWA) / 3G spectrum and National Optical Fiber Network will enhance wireless broadband penetration and help connect the remotest locations across India. Posts India Post has the largest postal network in the world with 154,866 post offices across the length and breadth of the country as of 31 March On an average, each post office serves 7,814 persons with coverage of approximately sq. km. As many as 139,040 post offices are in rural areas, while 15,826 are in urban areas. Government has launched Project Arrow in 2008 to transform the existing India Post infrastructure across the country by upgrading key postal operations such as mail delivery, remittance, and banking services. India Post is emerging as a one-stop shop for retail products and offers a single window facility for banking, money remittances, and other financial products. The postal network is also being used by other government departments/agencies to collect data like the rural consumer price index. The postal sector needs to keep pace with changing times as many of its services have become redundant with growth in technology and takeover by other players. Quick decisions and actions to stay abreast of the times including switching over to new activities and downsizing could release a lot of resources from this sector for use elsewhere. Real Estate Services Housing is a basic need and provides economic and social security to the people. It is also an asset that can have significant leveraging effect to support and supplement other means of income generation and poverty alleviation. It is an important employment-intensive sector. A host of vocations and professions like construction workers, builders, developers, engineers, valuers, property consultants, interior decorators, consultants, and plumbers derive their livelihood from housing either directly or indirectly. The real estate industry has significant linkages (both direct and indirect) with nearly 300 sectors like cement, steel, paints, and building hardware which not only contribute to capital formation and generation of employment and income opportunities, but also catalyse and stimulate economic growth. Therefore, investment in housing and real estate activities can be considered a barometer of growth of the entire economy. The GDP share of the real estate sector (including ownership of dwellings) along with business services was 10.6 per cent in The rate of growth of this sector has decelerated to 7.8 per cent in and further to 6.9 per cent in Currently, about 5 per cent of India s GDP is contributed by the housing sector. With institutional credit for housing investment growing at a CAGR of about 18 to 20 per cent per annum in the next three-five years, the housing sector s contribution to GDP is likely to increase to 6 per cent. 393 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

395 Some of the issues related to this sector include the hardening of interest rates and possible defaults; challenges associated with land acquisitions; high stamp duty; formalities and costs related to registration and mutation, some of which are unnecessary and superfluous; the Urban Land Ceiling Regulations Act (ULCRA) and existing lower floor area ratio in cities; and absence of a single window clearance system with standardization of bye-laws and processes. Some Business Services IT and ITeS The IT and IT enabled services (ITeS) sector are giving India the image of a young and resilient global knowledge power. The IT-ITeS industry has four major sub-components: IT services, business process outsourcing (BPO), engineering services and research and development (R&D), and software products. As per the estimates of NASSCOM, India s IT and BPO sector (excluding hardware) revenues were INR 4790 billion in , generating direct employment for nearly 2.8 million persons and indirect employment of around 8.9 million. Software exports in are estimated at INR 3773 billion. While exports continue to dominate the IT-ITeS industry and constitute about 78.4 per cent of total industry revenue, the CAGR of the domestic sector has also been high at 12.8 per cent compared to the 14.2 per cent for exports during the Eleventh Five Year Plan period. The growth rate of the domestic sector in was 20.6 per cent as compared to 18.8 per cent for the export sector; in it was 9.7 per cent for domestic sector and 16.4 per cent for export sector. In , as per NASSCOM estimates, export revenues are expected to grow by per cent and domestic revenues by per cent. These estimates are a pointer to the possibilities of making further forays into the untapped domestic sector for IT and ITeS. The fate of India's IT is closely tied to growth prospects in advanced economies. More than 60 per cent of the it industry's revenues come from the US and Europe. Europe is still caught in a serious debt trap-growth is unlikely to be in positive territory for the next six months. The US is doing marginally better, growing at just over 1.5 per cent. But with presidential elections imminent, there is pressure on American companies to go slow on outsourcing. Its share in total exports of India's IT and ITeS services grew from 61.5 per cent to 62 per cent, characterized Emerging markets of Asia Pacific and the rest of the world also contributed to overall growth. Sub-sector-wise in , as per the provisional estimates of NASSCOM, in the export sector, IT services were the major component with a 58 per cent share and CAGR of 15.7 per cent for the Eleventh Plan period; followed by BPO with a 23.1 per cent share and 12.5 per cent CAGR; and software products / engineering with a 18.9 per cent share and 11.8 per cent CAGR. More trouble seems to be in store for this sector. This time the news is that the relatively liberal visa regime in the US that enabled IT services companies to send employees on client work is under review following the job losses in the US. The United States Citizenship and Immigration Services (USCIS), the visa controlling agency, is tightening the screw on screening and issuing L1 visas and L1 extensions. L1s are three-year visas meant for intra-company transfers, with some 50,000 Indians estimated to be currently in the US on these visas. About a third of them are coming up for renewal this year for a further two-year extension. Nasscom has said that the proposed legislation by the US House of Representatives to restrict the use of L1 visas by Indian companies will affect the Indian IT industry in the long term, as about 10 per cent of Indian software professionals in the US avail themselves of L1 visas. The year also witnessed the next phase of BPO-sector evolution, characterized by greater breadth and depth of services, process re-engineering across the value chain, increased delivery of analytics and knowledge based services through platforms, strong domestic market focus, and Small and Medium-sized Business (SMB) centric delivery models. In the engineering design and products development segments, there was increasing use of electronics, adoption of fuel efficiency norms, convergence of local markets, and use of localized products. Increasing confidence between customers and service providers successfully executing a variety of activities across low-medium-high complexity projects has led to increasingly larger sizes of projects being sourced from India. In the domestic sector, the major component is IT services with 64.2 per cent share, followed by software products/ engineering with 19.6 per cent share and BPO with 16.2 per cent share. The 394 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

396 CAGRs of these sectors were 11.5 per cent, 13.6 per cent, and 18.1 per cent respectively. Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organizations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are the key drivers for increased technology adoption in India. The IT and ITeS sector is also a generator of skilled employment with direct employment expected to reach 2.8 million in Some of the challenges faced by the IT and ITeS sector include increasing competition from other countries with incentivized low costs, rising costs in India with wage-push inflation, increasing costs of relevant talent and skilled personnel, infrastructure constraints with over 90 per cent of total revenue generated from seven Tier-1 locations, risks like currency fluctuations and security, both physical and data related, and rising protectionist sentiments in key markets. Government has taken various initiatives to promote the growth of the IT & ITeS industry and has been a key catalyst for increased IT adoption--through sectors reforms that encourage IT acceptance, National e-governance Plan (NeGP), and the Unique Identification Development Authority of India (UIDAI) programme that creates large-scale IT infrastructure and promotes corporate participation. The Draft National Policy on Information Technology 2011 focuses on deployment of information communication technology (ICT) in all sectors of the economy and providing IT solutions to the world. The NeGP was approved by the Government of India in May 2006 to make all government services accessible to the common man in his locality, through common service delivery outlets at affordable costs. The NeGP comprises mission mode projects (MMPs) and core e-infrastructure. Significant progress has been made in lying down core e-infrastructure and in most of the MMPs. More than 97,000 common service centres (CSCs) have been established across the country as web enabled service access points for making public services available to citizens on anytime, anywhere basis. The government has also initiated new e-governance projects for education, health, public distribution system and postal services. In order to leverage the rapid growth in penetration of mobile technology and connectivity and also to ensure accessibility to all services to the common man, public services under all e- Governance projects will be delivered through mobile devices like mobile phones and Aakash tablets. Accounting and Auditing Services As per the WTO data, in the INR 1558 billion other business services exports by India in 2009, the share of legal, accounting, management, and public relations services was 16.2 per cent and in the INR 1150 billion imports, their share was 26.2 per cent. Indian accounting firms are increasingly getting integrated and are providing associated services such as management consultancy, corporate finance, and advisory services in addition to their core business of accounting, auditing, and tax services. The accounting profession is structured in India as partnership with few partners or proprietorship concerns and mainly comprises small and medium enterprises (SMEs). The existing regulations require firms practising chartered accountancy to be registered with the Institute of Chartered Accountants of India (ICAI). Out of 48,000 chartered accountancy firms in India, there are only 2,043 that have five or more partners. The remaining are practicing as proprietary firms or in their individual names. The chartered accountancy profession in India has globally benchmarked its qualification and training standards and has entered into qualificationrecognition arrangements with accounting bodies in the UK, Australia, Canada, and Ireland. The export potential of India in accounting services could be tapped by such mutual recognition of qualifications. Tie-ups to overcome the weakness of small size of domestic accountancy firms could also help India s accountancy sector grow manifold. R&D Services According to Battelle R&D magazine, gross expenditure on R&D (GERD) by India for 2012 was projected to be INR 2242 billion in purchasing power parity terms, which works out to 0.8 per cent of GDP. This is low both in absolute terms and as a proportion of GDP compared to other countries. This is partly because the size of the R&D base and absorption capacity are not commensurate with requirements. 395 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

397 As per estimates in , the sectors which attracted largest R&D expenditures were pharmaceuticals, electrical and non-electrical machinery, transport equipment, electronics, and plastics. R&D intensity for the pharmaceuticals sector was much higher than that for other sectors. Although there have been substantial increases in growth rates of patents filed in India during the last decade, the share of patents filed for work in India through indigenous research is less than 20 per cent of the total. Policy readjustments to increase the number of full time equivalents (FTE) of R&D personnel are a key requirement for growth in R&D intensity. The FTE of R&D manpower is estimated at lakh for China and 2.29 lakh for South Korea, as compared to 1.54 lakh for India. Expansion of FTEs to at least 2.50 lakh by the end of the Twelfth Plan could enable the country to reach the top six ranks in the global R&D landscape. Though developed nations remain the leaders in innovation, there has been an increasing shift in R&D activities from developed to developing nations. Developing Asian nations, particularly China and India, are driving the growth of global R&D. Factors such as low cost, access to new markets, availability of knowledge-oriented manpower, favorable regulatory environment, and fiscal benefits play a major role in driving R&D investments towards these countries. MNCs from developed nations look to expanding their R&D activities in these countries. A White Paper on R&D prepared by consultancy firm Deloitte in July 2011 estimates that more than 300 MNCs have set up R&D centres in India. As per the Global Competitiveness Report of the World Economic Forum, among BRICS nations India is ranked below China and Brazil in terms of capacity for innovation but above China in terms of the quality of scientific and research institutions and availability of scientists and engineers. But India lags China in terms of company spending in R&D, university industry collaboration on R&D, and utility patents granted per million population. This is because the share of the private sector in R&D is still low at 0.25 per cent of GDP compared to 1.2 to 2 per cent in many developed and emerging economies. Legal Services India has an estimated 600,000 legal practitioners and is next only to the USA in terms of numbers. The service providers are individual lawyers and small or family-based firms. In India, the practice of law is governed by the Advocates Act of Under this Act, foreign law firms are not allowed to engage in practice of law in India. Many foreign legal firms have set up liaison offices (currently permitted under the law), while a few have established referral relationships with Indian firms. India is ranked 51, with a score of 4.3, in terms of judicial independence by the Global Competitiveness Report As regards efficiency of the legal framework in settling disputes, India is ranked 64, with a score of 3.7. This shows that India needs to improve its ranking through legal and judicial reforms and speed up disposal of cases. Global recession has been putting pressure on companies to reduce costs and they are trying out various methods of outsourcing their non-core functions to low cost destinations. Outsourcing of legal services to low cost destinations like India is one such measure being taken by legal firms in developed countries, especially the USA and UK. The legal systems in India, the USA, and UK are rooted in British common law, thus making Indian lawyers competent, without much additional training, to undertake standard legal work such as vetting of contracts, patent registrations, or reviewing of documents. The National Legal Services Authority (NALSA) has been constituted under the Legal Services Authorities Act 1987 to monitor and evaluate implementation of legal aid programmes and lay down policies and principles for making legal services available under the Act. In every state, a State Legal Services Authority, and in every High Court, a High Court Legal Services Committee, have been constituted. District Legal Services Authorities and Taluk Legal Services Committees have been constituted in 596 Districts and 2,037 taluks in order to give effect to the policies and directions of NALSA, provide free legal services to the people, and conduct lok adalats in the states. These lok adalats settled more than 13,75,000 cases. In about 39,900 motor vehicle claim cases, compensation to the tune of ` crore has been awarded. There is need to quickly implement proposals related to commercial disputes and amendments in the Arbitration and Conciliation Act 1996 to make India a favourable destination for international arbitration. Union Budget has expanded the scope of legal services for service tax to include services provided by business entities to individuals as well as representational and arbitration services by individuals to business entities. However, no tax is levied on services provided by individuals to other individuals. 396 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

398 Consultancy Services Consultancy services are emerging as one of the main business areas in India. The volume of revenue in the Indian consulting industry on conservative basis has been estimated at around INR 450 billion in Presently, it contributes to about 0.47 per cent of the GDP. The growth rates of the industry over the last few years have been extremely promising and revenue is projected to increase to INR 541 billion by 2012 at a growth rate of 20 per cent. Consulting service providers in India may be classified into five categories: individual consultants, consulting firms, R&D organizations, academic institutes, and professional bodies. The client sectors to which consulting services are provided at present include agriculture and rural development, banking and financial services, construction, education, energy, environment, governance and public administration, health and demography, infrastructure, information technology, law and regulation, life sciences, manufacturing, management, science and technology, telecommunications, tourism, transport, urban development, and water management. The consultancy services market can be broadly categorized into engineering and management consultancy. The Indian management consultancy market is still in its nascent stage, with high growth and large entry of players. The revenue size of the Indian management consultancy market on conservative basis was estimated at around INR 137 billion in Although it is still relatively small in revenue size as compared to the global management consultancy market, the Indian management consultancy industry has witnessed high growth partly due to the low base from which it picked up. As per the estimates available for , it comprised around 2,500 individuals and 22,300 firms. The Indian engineering consultancy market which is a more developed market as compared to the management consultancy market is experiencing a boom, with many large scale development projects driving its growth. The revenue size of the Indian engineering consultancy market on conservative basis was estimated to be around INR 328 billion in Although it is still relatively small as compared to the global engineering consultancy market, the Indian engineering consultancy industry has shown steady growth over the last few years. India s emergence as one of the fastest growing consultancy markets in the world has been facilitated by the liberalization of FDI policy, entry of many new players, high growth in most key sectors, and India being a low cost sourcing destination. Though the growth of the Indian consulting industry has been robust in the last few years, there is need to address certain issues to position it on the world map as well as to increase its global market share. These include availability of experienced consulting professionals, improvement in quality, proper training and development, international experience for Indian consultants on consulting assignments, and market intelligence on consulting opportunities abroad. Construction Services The construction industry in India is an important indicator of growth and development as it creates investment opportunities and increases production capacity across various related sectors. With a share of around 8.2 per cent, the construction industry has contributed an estimated ` 670,778 crore (at current prices) to national GDP at factor cost in While its growth rate (at constant prices) in was 8.0 per cent, in it decelerated to 4.8 per cent due to both external and domestic factors like the imminent recession in Europe, hardening of interest rates in India, and challenges associated with land acquisition in some places. The sector is labour intensive and, including indirect jobs, provides employment to around 33 million people. It is estimated that about 70 per cent of these are employed in the infrastructure segment and the remaining 30 per cent in the real estate segment. According to industry estimates, the industry is expected to generate additional employment of 47 million, with the total number of persons employed in the sector reaching 83 million persons by The sector is critical for enhancing the productive capacity of the overall economy as on average it accounts for more than half the investment required for setting up critical infrastructure like power projects, ports, railways, roads, and bridges. FDI up to 100 per cent under the automatic route is allowed in townships, housing, built-up infrastructure, and construction of development projects (which include housing, commercial premises, educational institutions, and recreational facilities). The construction sector is not handled by a single nodal government department. By their very nature, infrastructure construction projects are supervised by respective ministries at union and state 397 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

399 levels while the real estate sector comes under not only the Ministry of Urban Development but also by urban development departments at state level and municipal authorities further down. To augment flow of funds into this sector, the government has also increased the FII limit for investment in corporate long-term infra bonds, created Infrastructure Debt Funds (IDFs), and introduced a take-out financing and credit enhancement scheme by the India Infrastructure Finance Company Limited (IIFCL). Recently the Government of India has decided to fast track clearances for eight mega infrastructure projects, including some in the crucial power sector, to arrest slowdown in growth and uplift business sentiment. The construction sector is fragmented, with a handful of major companies involved in construction activities across all segments; medium-sized companies specializing in niche activities; and small and medium contractors who actually work on subcontract basis and carry out the work in the field. The sector has major linkages with the building materials industry since they account for sizeable share of construction costs (approximately 40 per cent to 50 per cent). With plans to enhance infrastructure investment to INR 54 trillion in the Twelfth Plan, the construction sector is all set to become one of the growth engines of the Indian economy in the foreseeable future. Government s initiative to develop mass rapid transport systems (MRTS) in cities with 20 lakh population will also boost the demand for construction activities. Some other issues in this sector that need to be resolved include the need for setting up consortiums to bid effectively for international projects, credit- related issues, and the issue of precondition in most of the overseas tenders floated by clients wherein equipment to be supplied by the contracting company has necessarily to be sourced from an approved list of suppliers from developed countries. Cultural services This section includes recreation and entertainment and radio and TV broadcasting (National Accounts classification) besides other related cultural services. Cultural activities are becoming increasingly important in the modern postindustrial knowledge-based economy. World over, they have been recognized as an important component of growth and job creation as well as a vehicle of cultural identity. A large number of people are getting viable employment by engaging in cultural activities as writers, publishers, librarians, photographers, sculptors, painters, musicians, singers, choreographers, dancers, and actors. Cultural activities also support other economic activities, cultural tourism being one such example. A major chunk of tourism in India, national and international, can be classified as cultural tourism because it is geared to monuments, museums, archaeological sites, and cultural heritage including traditional fairs and festivals. To meet the objective of preserving and promoting all forms of art and culture, a variety of activities are being undertaken by the Government of India, ranging from protecting and encouraging cultural endeavors at grassroots level to promoting cultural exchanges internationally; from programs to preserve India s ancient heritage to encouraging an array of contemporary creative arts. A network of 41 organizations is functioning under the Ministry of Culture, for protection, development, and promotion of tangible heritage, intangible heritage, and knowledge heritage. Creative industry includes cultural heritage; printed matter and literature; music and performing arts; visual arts; audio-visual media including cinema, television, radio and photography, and socio-cultural activities; museum and archives. Trade in creative industry can be broadly classified into goods and services. According to UNCTAD (UNCTADSTAT on Creative Economy web-based browser), world exports of creative industry goods in 2010 are estimated at INR billion, growing at a CAGR of 8.6 per cent since India is ranked eighth largest exporter of creative goods, with a 3.6 per cent share of world creative goods exports. In absolute terms, India exported INR 755 billion worth of creative goods in 2010, with a CAGR of 17.7 per cent, much higher than the world average. India is ranked 13th with a 2.3 per cent share in world exports of creative services. According to a report by Ernst & Young, the Indian media and entertainment industry is valued at INR 891 billion in 2010 and is projected to grow at a CAGR of 12 per cent in the next four years ( ) to reach a value of INR 1422 billion. The Indian media and entertainment services industry comprises visual entertainment services (broadcasting and cable television, films) printing (newspapers, books, periodicals), and audio entertainment services (radio, music). In addition, internet services also deliver such content through 398 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

400 networks. The rapid convergence of networks, devices, and content is expected to dramatically alter the dynamics of the Indian media and entertainment industry. India is estimated to have more than 700 television channels and 100 million pay-tv households. The television distribution sub-segment is dominated by highly fragmented analog cable which includes about 60,000 local cable operators and 100 multi-system operators. The Cable Television Networks (Regulation) Amendment Act 2011 has put in place a legal framework to facilitate digitalization. There are 245 private FM radio stations, along with the government controlled All India Radio, operating in 237 radio stations. FM Radio was opened to private sector in 1999, with the announcement of FM Phase-I policy. Phase-II was announced in So far 86 cities of India are covered under private FM stations. In the third phase, the Government has taken a decision to e-auction 839 FM channels spread over 245 cities across the country. This would usher in a new era of infotainment for people besides introducing new vistas of opportunities for employment and income for the people. With the production of over 1,000 films a year, in over 20 languages, the Indian film industry is the largest in the world. The film industry is also contributing to outsourcing of services such as animation, visual effects, conversion of 3D, and postproduction services, to the ICT sector, thus contributing to its growth. The Indian film industry is also generating additional revenue through collaboration with the ICT sector, such as DVDs, music CDs, mobile downloads, and online gaming. High rates of entertainment tax and lack of uniformity in tax structure across states are major factors inhibiting growth of the film industry. Adoption of the goods and services tax (GST), subsuming service tax and entertainment tax, could promote growth of the film industry. Piracy is another challenge for the Indian film sector. To make it relevant to present day requirements and to check piracy, the Ministry of Information and Broadcasting is in the process of amending the Cinematograph Act India has also signed co-production agreements with six countries with a view to pooling their creative, artistic, technical, financial, and marketing resources for coproduction of films and television programs. Efforts are needed to relocate the business of the Indian film Industry from foreign countries to India by addressing issues like tax credit which can increase activities in India and also generate employment. In the publishing sub-segment, India has about 77,384 newspapers/magazines (registered) in circulation in 23 scheduled languages (including English) and several other non scheduled languages. The low readership penetration (around 30 per cent) as compared to a literacy level of over 75 per cent underscores the potential for growth. In the print media sector, foreign investment up to 100 per cent is allowed in the non news, i.e. the specialty/ technical / scientific sector of the print media, whereas up to 26 per cent is allowed in the Indian entities publishing newspapers and periodicals dealing with news and current affairs. Foreign investment up to 100 per cent is allowed in case of foreign publishing houses bringing out facsimile editions of their own newspapers through wholly owned subsidiary. Future outlook India s services sector has been resilient even during the tumultuous years of the global economic crisis maintaining a steady growth of around 10 per cent. This happened even when overall GDP growth dipped sharply to 6.7 per cent in A dissection of the growth rates of different services shows that this resilience was, to some degree, due to the government s policies of higher social expenditure and commitments for pay arrears under the new revised scale for government employees resulting in very high growth rates of 12.5 per cent and 12.0 per cent in community, social, and personal services in and Public administration and defence grew at a spectacular 19.8 per cent and 18.2 per cent in these two years. The impact of the global crisis was, however, evident in the trade, hotels, and restaurants and construction categories and with lagged effect in real estate / ownership of dwellings and business services in and ; and to some extent in banking and insurance in Moving forward in , though there is slight moderation in services growth to 9.4 per cent (as also in ), there is no cause for worry, as it is due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation of the government. In fact growth in trade, hotels & restaurants, transport, storage and communication is more robust at 11.2 per cent and retail-sector growth is expected to be more robust in With hardening of interest rates, the real worry would be with the real estate/ ownership of dwellings and business services segment, the growth of which has started decelerating and construction services with growth falling by nearly half. The outlook of the services sector in the domestic 399 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

401 economy is linked to the prospects of the sector externally. While software service exports have continued to be steady, the unfolding events in the euro area could lead to some sluggishness in this sector. While the net effect of the trade sector on GDP has always been negative for India, it could go down further if fewer cushions are provided by net services trade to GDP. However, the domestic economy is more dominant in the case of services and any changes in government spending in community, social, and personal services within the fiscal space available or newly created fiscal space could strengthen the growth prospects of the services sector with ripple effects in related sectors References: 1. Arthur F. Burns (1969), Title: The Business Cycle in a Changing World, p roubini lakh-crore-mark-in-2012/articleshow/ cms Muthe P R, May 2010, global recession : challenges and opportunities for Indian Tourism and hotel industry, International Referred Research Journal I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

402 CHAPTER 15 FUTUROLOGY FOR THE SERVICES BASED ECONOMY Strategic Approaches in Service Industry The service sector has been mounting radically for more than fifty years, to the extent that in the developed world, more people make their living from producing services than making manufactured goods. In fact around three-quarters of the population in the US and the EU are employed in service industries. Services therefore have a key impact on national economies. The subject of Services Marketing has grown in response to this. Of late however, manufacturing and Technology industries have also identified the need to provide services not only as a means of adding worth to the physical products which they market but also as the basis for a different orientation to the management of their businesses. Three major types of attributes are helpful in understanding the difference between products and services. Search attributes: aspects which can be assessed prior to purchase or consumption. Clothing is an example, as with clothes you are able feel them, examine the colors and styles, and to try them on before buying them to see if they fit. Experience attributes: aspects that can only be assessed after consumption. For example, it is hard to tell if you will like a song before you hear it. Even if it is described for you as to which style, how many musicians, and what types of instruments they play, it is still difficult to predict if you will really like the song before hearing it. For experience goods people will often seek "surrogate experience" - the experience of others - to understand the quality. This is why we have movie reviews in just about every major newspaper. Credence attributes: consumers lack the information necessary to make evaluations even after consumption. This is because the customer lacks the expertise to judge the quality of the outcomes. For example, if you see a doctor for an affliction it is hard to know, without medical expertise, how good the doctor's diagnosis and treatment actually is. In general there is a tendency for service goods to be more on the credence end of the spectrum than tangible goods. Noting this categorization of various offers, experience effects on brand choice are most important for experience goods. 401 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

403 Services should be Tangibilized. Why? Services are intangible by nature. You can't see, touch, smell, or taste them before you buy them. This intangibility often makes services difficult to depict in clear and meaningful ways. Many companies' inability to depict their services tangibly leads to the following symptoms and conditions: Difficult to conceptualize Difficult to evaluate Uncertainty and perceived risk Difficult to promote the offering Difficult to control service quality Difficult to set prices PROFITING FROM THE CHARACTERISTIC OF INTANGIBILITY The major characteristic of a service being intangibility is marked by the absence of physical properties, shapes or face. Even where services have a physical face, the core benefit still remains intangible. Services are largely intangible and experiential. The recipient may come away empty-handed and have nothing to show for the purchase. Because they lack physical substance, services cannot be owned and resold by distributors. Neither can they be returned or repossessed. Due to their lack of tangibility, services are difficult to describe, demonstrate, differentiate, test, and evaluate. To reduce uncertainty, the buyers look for signs or evidence of the service quality. Therefore the service provider s challenge is to manage the evidence and to tangibilise the intangible Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of three key questions: 1. "What do we do?" 2. "For whom do we do it?" 3. "How do we excel?" In many organizations, this is viewed as a process for determining where an organization is going over the next year or more typically 3 to 5 years (long term), although some extend their vision to 20 years. Key components The key components of 'strategic planning' include an understanding of the firm's vision, mission, values and strategies. The vision and mission are often captured in a Vision Statement and Mission Statement. Vision: outlines what the organization wants to be, or how it wants the world in which it operates to be (an "idealised" view of the world). It is a long-term view and concentrates on the future. It can be emotive and is a source of inspiration. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty." 402 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

404 Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its vision. For example, the charity above might have a mission statement as "providing jobs for the homeless and unemployed". Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities and provide a framework in which decisions are made. For example, "Knowledge and skills are the keys to success" or "give a man bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter. Strategy: Strategy, narrowly defined, means "the art of the general." A combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there. A strategy is sometimes called a roadmap which is the path chosen to plow towards the end vision. The most important part of implementing the strategy is ensuring the company is going in the right direction which is towards the end vision. Approaches There are many approaches to strategic planning but typically one of the following approaches is used: Situation-Target-Proposal Situation - evaluate the current situation and how it came about. Target - define goals and/or objectives (sometimes called ideal state) Path / Proposal - map a possible route to the goals/objectives Draw-See-Think-Plan Draw - what is the ideal image or the desired end state? See - what is today's situation? What is the gap from ideal and why? Think - what specific actions must be taken to close the gap between today's situation and the ideal state? Plan - what resources are required to execute the activities? The Strategic Approach The strategic approach or mentality consists of four main elements: First, the strategic approach is oriented toward the future. It recognizes that the environment will change. It is a long range orientation, one that tries to anticipate events rather than simply react as they occur. The approach leads the manager to ask where his/her organization wants to be after a certain period, what it will need to get to where it wants, and how to develop strategies and the means to get there, and finally, how to manage those strategies to achieve the organization s goals and objectives. It is recognized that the future cannot be controlled, but the argument can be made that by anticipating the future, organizations can help to shape and modify the impact of environmental change. Second, the strategic approach has an external emphasis. It takes into account several components of the external environment, including technology, politics, economics and the social dimension. Strategic thinking recognizes that each of these can either constrain or facilitate an organization as it seeks to implement policy. Politics will determine the policies that are to be implemented, economics will determine the organization s level of resources, and social factors might well determine who the organization s beneficiaries will be. In particular, strategic thinking recognizes and emphatically takes into account politics and the exercise of political authority. Managers are not free to do anything they decide. Managers must be sensitive to the needs and respond to 403 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

405 demands of constituents over whom they have little or no control. Among those constituents, political actors are perhaps the most important. Third, the strategic approach concentrates on assuring a good fit between the environment and the organization (including its mission and objectives, strategies, structures, and resources) and attempts to anticipate what will be required to assure continued fit. Under conditions of rapid political, economic and social change, strategies can quickly become outmoded or no longer serve useful purposes; or the resources traditionally required by the organization to produce its goods and services may suddenly become unavailable. The strategic approach recognizes that to maintain a close fit with the environment, the different elements of the organization will need to be continuously re-assessed and modified as the environment evolves. Finally, the strategic approach is a process. It is continuous and recognizes the need to be open to changing goals and activities in light of shifting circumstances within the environment. It is a process that requires monitoring and review mechanisms capable of feeding information to managers continuously. Strategic management or planning are not one-shot approaches, they are ongoing. When all taken together, these attitudes and behaviors are really a way of approaching or thinking about how to manage or how to implement policy change. Strategic management (or Planning) is not something that can be applied only once and then forgotten about or ignored. In that sense it is more than a tool; it is a mental framework. 404 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

406 The economic shape of the world is rapidly changing. The world as a whole is getting richer, but the proportion of wealth created and spent by the west will decrease markedly in the next few decades. This will alter the relationship between the west and the rest of the world especially Asia and will change the economic attractiveness of the West. Based on economic, technological, and demographic evidence, one can safely construe that the world has now entered a period of unprecedented and far-reaching change, which will transform societies and reshape the traditional relations of economic, cultural, and political power between the West and 'the rest' that have led world events for several hundred years. These are the key global trends, each of which is now helping to transform the need for communication globally. Economic globalisation, invention of the Internet and the restructuring of social inequality are some of the outcomes of improved communication systems. It is these trends that will shape the future, but they interact in complex ways and may produce unexpected cultural and political consequences. Technological advances, privatisation and liberalisation have seen global trade in services rise to an estimated US$ 2.1 trillion annually. Even business services have spread their wings across borders, thanks to modern telecommunications. In addition, the break-up of former state monopolies has created new cross-border opportunities for areas like telecommunications and energy. This trade is not simply for and among developed countries: the share of services in total trade has also increased in developing countries, with services accounting for approximately 30% of all world trade.the services industry, a diverse group of businesses ranging from retail and transportation to information technology services and healthcare, has provided the fuel that has kept the global economy running relatively strong for the past several years. The industry is credited with driving the technology progress that reshaped the world economy, creating new, higher-paying jobs in the wake of significant job losses in manufacturing, and most recently leading the global economy into its current recovery. Economists and services industry specialists agree that the world has shifted to a services-oriented economy and the trend will continue well into this new century. Services are a key indicator of economic development, accounting for 50-70% of economic activity, more than half of all civilian employment in most OECD countries, and underpinning many other sectors, including manufacturing. Countries at all levels of development have recognised that an inefficient services infrastructure can tax the entire economy, affecting efficiency and competitiveness, as well as physical trade. Services are relatively new to the multilateral trading system. One reason that these intangibles were long ignored in the international trade context is that many types of service, such as business advice, financial services, communications, consultancy and media services were not easily exported, being rather local or national in reach. Although globalisation is not new to the world, the qualitative nature of the recent big wave that began in the 1990s, signifies a new stage in the evolution of the global economy. The new technological revolution resulted in the unprecedented ease with which information can now be standardised, exchanged and processed. It also led to constantly expanding the range and quality of goods and services that could be traded, and greatly facilitating the movement of capital across countries. The implications for public policy and thus international institutions are immense. Indeed, countries, more than ever, need to work together in supranational efforts to successfully navigate the challenges of an increasingly globalised world. Countries need to focus on sectors with high value-added growth potential. Hence, creating competitive advantage in growth sectors like service industry should be one of the overriding concerns not only of companies but also of governments. It requires a strong publicprivate partnership. The forces of globalization and technological advancement that are shaping the financial landscape are having a profound influence on the long-term development of most countries in the world. The dismantling of entry barriers to markets, the availability of low-cost, high-speed transport, and the dramatic impact of advances in information and communications technology (ICT) have challenged the effectiveness of domestic market regulations. 405 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

407 New forms of global tele-working are emerging and a proportion of the value of most goods is produced through knowledge and language-related activity. The expansion of the services industry also will directly impact supply management as it meets the challenges of global sourcing, cost control and outsourcing. Supply management professionals agree that in today's growing services industry, they need to think globally and have strong relationship skills. TREND 1: CHANGING INFORMATION AND TELECOMMUNICATION TECHNOLOGIES The rapid development of the "information highway" most especially the World Wide Web has been likened by many to a new industrial revolution. In addition to the Web, the proliferation of several other information and telecommunications technologies is re-shaping the way business is transacted. These include fax machines, , overnight mail, and cellular phones. These new technologies connect producers and consumers in a more timely and efficient manner. Some of the benefits of technological advancements have been seen in: Input supply. Business owners can easily access information about input sources for use in their production and service activities. This can translate into lower costs for the inputs purchased, as well as less time spent searching for low-cost input suppliers. Advertising and promotion. In effect, the new information and telecommunications technologies have reduced the cost of distance by enabling business owners to promote their products and services via Web- and -based advertising. These forms of advertising are both economical and extensive. Sales and marketing. The new technologies expedite the market research necessary for business success, allowing entrepreneurs to investigate how other competing businesses are positioning their products. They also facilitate sales and customer service activities. Recent advances in security technologies allow customers to order products safely over the internet, while follow-up activities (such as product support) are expedited by fax and capabilities. TREND 2: GLOBALIZATION OF THE MARKET PLACE The globalization of the economy has led to improvements in transportation and marketing capability. The reduced physical distance encourages suppliers and service providers to sell goods and services to more distant customers. More than any other time in history, entrepreneurs can seek out niche markets and target customers outside of traditional market areas. However, globalisation means that the services providers now have to operate on an expanding economic playing field which means more competition for them. This intensifies the need for new information and telecommunications technologies, which can help a service provider to fulfill the basic requirements for business success: efficiency in production, responsiveness to the tastes and needs of customers, and effective marketing. Finally, the world has become more like economics textbooks always made it out to be. Globalization means that local monopolies have been broken up, and people in one country no longer meekly accept paying more for groceries, books, or automobiles than people in other countries pay. This heightened ordinary competition has paved the way for heightened competition to innovate and be creative. CASE STUDY: OUTSOURCING OF SERVICES Industry has experienced rapid change in the last 10 years. The growth in the last five years within the outsourcing industry has equaled the growth during the previous 15 years. Outsourcing -- the practice of using outside firms to handle work normally performed within a company -- is a familiar concept to many entrepreneurs. Small companies routinely outsource their payroll processing, accounting, distribution and many other important functions -- often because they have no other choice. Many large 406 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

408 companies turn to outsourcing to cut costs. In response, entire industries have evolved to serve companies outsourcing needs. Emerging global delivery models mean that enterprises can use IT resources from anywhere in the world to ensure that they have the right skills at the right price at the right time, with managed risk THE BENEFITS OF OUTSOURCING Control capital costs. Cost cutting may not be the only reason to outsource, but it s certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make a firm more attractive to investors, since capital can be directly pumped into revenue-producing activities. Increase efficiency. Companies that do everything themselves have much higher research, development, marketing and distribution expenses, all of which must be passed on to customers. By outsourcing to an economical department to handle some of the processes, one can give the firm an important competitive advantage. Reduce labor costs. Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees may not always live up to the expectations of the company. Outsourcing allows the organisation to focus the human resources where it is needed most. Start new projects quickly. A good outsourcing firm has the resources to start a project right away. Handling the same project in house might involve taking weeks or months to hire the right people, train them and provide the support they need. And if a project requires major capital investments (such as building a series of distribution centers), the startup process can be even more difficult. Focus on the core business. Every business has limited resources, and every manager has limited time and attention. Outsourcing can help the business shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly. Level the playing field. Most small firms simply can t afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act "big" by giving them access to the same economies of scale, efficiency and expertise that large companies enjoy. Reduce risk. Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions and technologies all change very quickly. Outsourcing providers assume and manage this risk, and generally are much better at deciding how to avoid risk in their areas of expertise. GLOBAL IMPACTS OF OUTSOURCING The United States is the highest business outsourcing country and although there have been arguments that outsourcing of some services to developing countries is leading to high unemployment rates in the country. White-collar off shoring or the movement of well-paying U.S. jobs to low-wage countries overseas has become a significant issue facing the information technology services, financial services and professional services industries. However, the United Nations has stated that companies shifting their businesses offshore to cut costs was actually beneficial not only for that business and for the country that receives new investments, but also for the country that is exporting business overseas as consumers at home benefit from cheaper, high-quality goods and services. In its annual report on world investment, UNCTAD found that Ireland, India, Canada, and Israel in that order, accounted for over 70 percent of overall outsourced service, mostly in software development and other information technology-related services. This sector is expected to expand to $24 billion by 2007, 407 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

409 up from $1.3 billion posted in 2002, increasing the industry's total share of global trade to 14 percent from 1 percent, UNCTAD said. The total market for all offshore service exports was estimated at $32 billion, of which Ireland accounted for fully 25 percent, the agency added. The global outsourcing spend is estimated to be $320 billion, which should go up to $585 billion by next year and $827 billion by India accounts for three per cent of the global IT spend. Moreover, UNCTAD reported that the United States was the fourth most popular recipient of foreign direct investments in 2003, having attracted $29 billion in FDI, after Luxembourg, China and France at $87 billion, $53 billion, and $46 billion, respectively. He argued that when companies decide to outsource their service jobs, they not only looked at how to cut costs, but also had to ensure that they could guarantee a continuation of high quality and reliability as they did at home. Countries like India, Brazil, the Philippines, Dominica, Israel, China, Romania and the Russian Federation have witnessed a surge of BPO provider companies catering for the needs of companies of the developed world and creating many employment opportunities in the process. FDI from developed countries in the BPO sectors of these countries is also growing rapidly. Cheaper labour cost, higher efficiency and better quality are the main driving forces of these BPO providers. As a consequence of this, the debate about job loss versus productivity gain has been geared up in the developed world. As such, countries such as Ireland and Canada were particularly attractive as they not only offered services for a cheaper price, but at a high standard in addition to protecting the privacy of their corporate clients and individuals doing business with them. Offshoring is still in its infancy. It represents the cutting edge of a global shift in production activity that is creating a new international division of labor in the production services," UNCTAD reported. Indeed, the agency's economist Sauvant pointed out that in the 1970s, the service sector only accounted for 25 percent of overall foreign direct investment, but the sector made up 60 percent of total FDI in This includes everything from financial services, telecommunications, business, etc and reflects the internationalization of services. Outsourcing continues to be the main source of growth in IT services and will account for over half of the worldwide market by the end of That is according to research firm Gartner, which claimed that the subcontracting of selected services to an outside company will grow from 53 percent of the total worldwide IT services market to 56 percent by Investment consultancy firm McKinsey & Co. predicted that global outsourcing industry would be worth more than $180 billion by As of , Indian outsourcing industry is estimated to be worth nearly $52 billion. Whether or not outsourcing will help or hinder an exporting country's growth prospects remains to be seen, but it is already clear that countries that can successfully lure foreign investors are those that can offer a skilled workforce that has the professional knowledge and language skills to meet the needs of multinational companies. TREND 3: CHANGING PURCHASING HABITS OF CONSUMERS The ways in which consumers buy products and services is evolving in ways that favor the services providers especially those operating from rural areas. Mail order and electronic shopping are increasing decentralization of purchasing. This means that businesses no longer need a physical facility, such as a showroom or store, to connect them with their customers. Our world has become richer. As people get richer, they seek more sophisticated goods and services - even if these are more costly. To satisfy these more sophisticated demands, suppliers need knowledge. The preference for more sophisticated cars and household appliances is satisfied through search and comparison of models on the Internet before visiting the retail outlets. However, despite these changes in purchasing habits, consumers still demand quick and reliable service and good product selection. And there is still a premium placed on a "personal touch" in the sales process. Producers and service providers at some distance from their customer base must be sensitive to these desires on the part of their clientele. 408 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

410 A strong service organization in any business is an important factor in the purchasing decision. People make purchasing decisions based on the quality of service. It is a general assumption that the product would work. Customer loyalty is stronger in service performance than with a product. Customers aren't loyal to a product because products change. They are more attracted to the service than the product offered. TREND 4: TOWARDS A KNOWLEDGE BASED SERVICES ECONOMY The world certainly has changed. A vast amount of knowledge is embedded in everyday goods and services. This embedded knowledge raises their value to consumers. It is a crucial input in virtually every business. Knowledge has become the primary weapon in competition for profits and corporate survival. The global economy is moving away from a manufacturing, hard goods based economy toward a knowledge based, service economy. Innovation and creativity are now leading to nations, which are more economically and technologically advanced. Today the shift is towards a primary knowledge based economy with a secondary, supporting service-based economy. This shift is taking place in the e-arena where the electronic transfer of information is rapidly and dramatically changing the rules of engagement in the global economy. Today, the accumulated knowledge embedded in everyday goods and services is extra-ordinary. To deal with this, successful companies must make the gathering, filtering, and processing of new information a regular event to keep up with the changing demands of customers. Technological change is today blurring the difference between goods and services. Any product is complete and up to the desired mark with the combined efforts of tangible products, technical knowledge and soft knowledge. Car manufacturers like General Motors regularly link engineers, material scientists, service mechanics, advertising agents, car dealers, market analysts, and accountants together in designing new car models. The launch of a new model draws on much wider and deeper knowledge than that of engineers and computer scientists alone. Information sharing and simultaneous information processing are stages in the production of the knowledge that gets embedded in each new car model. Services groups are playing increasingly critical roles. Not only is manufacturing of any product undergoing a change due to technological advancements, but the marketing and sales of any product is also based on thorough study of the market and conversion of this information about consumers demands, manufacturers capabilities, raw material supplies, and delivery systems, to produce products which are profitable and have more customer satisfaction. Distribution in a knowledge-based economy is much more complicated than ordering, stocking, and selling. The success of distributors like Walmart, a Retail Chain in the US, is based on sophisticated logistic management systems. This firm collects detailed information about changes in their inventories, customers purchase patterns, suppliers prices and capabilities, and their own transportation capabilities. They use this to know what stocks are just right to satisfy customers. The result is convenient shopping and lower prices for consumers, leading to a massive customer base and thus the distributor s bargaining power to bid manufacturers prices yet further down. Financial services businesses like investment, consulting, and accounting firms are serving their customers using the knowledge they build company-wide and globally. Firms that are leaders in these areas, like the Bank of Montreal with its Mbanx computer banking system, and the Toronto Dominion Bank with its computerised discount brokerage business are industry leaders. 409 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

411 McDonald s is an example of growth in scale. McDonald s proprietary knowledge is its marketing skills and its ability to manage franchising operations so that every McDonald s, whether in North America or in Korea, offers identical standards of cleanliness, food preparation, and so on. These advantages would have been valuable applied to a small chain of hamburger stands, but their full value came from applying them worldwide. McDonald s and other similarly skillfully managed chains essentially wiped out other hamburger stands, not just in the US and Canada, but almost anywhere that they set up their branches. In the same way, business school professors with new unique knowledge no longer confine their teaching to localized classrooms. They can earn a higher return on their knowledge by reaching out to global audiences via teleconferencing, videotapes, Internet-based courses, and international book launches. STRATEGIES TO MAXIMIZE SERVICE INDUSTRY BENEFITS ON AN ECONOMY As a major economic driver, the services industry touches all businesses. That's one reason it's important to understand the impact the diverse industry has on the overall economy, employment, supply chain and sourcing. An examination of the industry, its challenges and trends will give supply management professionals a better understanding of what is happening now and what's ahead for the services industry. Within a few decades, many more people will be employed in service industries that are rapidly globalising. Strategies therefore need to focus on crosscutting or 'horizontal' initiatives in areas such as trade finance, customs, logistics and information technology infrastructure. But the specific requirements of key growth sectors, client priorities (e.g. small and medium-sized enterprises and foreign direct investors) and target markets should determine the priorities among these initiatives. Services might not drop at our feet, but failing to achieve progress multilaterally could leave some service-starved countries limping on the sidelines of regional and bilateral deals and struggling in the global economy. The task facing the authorities is to strengthen the effectiveness of the regulatory framework as traditional boundaries melt away and to improve efficiency and innovation through a more open environment conducive to competition with safeguards to ensure continued stability of the financial sector. In banking, the authorities have developed policies to remove unnecessary market entry restrictions, improve transparency, and deregulate the rules for setting interest rates. A three-pronged reform to enhance competitiveness and strengthen risk-based supervisory regime in securities and futures markets includes (i) enhancing market infrastructure, (ii) modernizing the market structure through demutualizations and mergers. (iii) modernizing and rationalizing the legal framework for the regulatory regime. To harness the benefits of globalisation to the maxim, the nation needs to invest in education, fostering technology research and development, practicing greater transparency, working for adherence to universal standards and codes of good practice in economic and financial policy, and promoting effective social policies. Measuring the economic growth of the services industry is just one way to determine the industry's impact. Another key indicator is employment, where the services industry also contributes significantly. The overall economic statistics bear that the services industry is responsible for the "productivity miracle" in the economy. Even sectors such as tourism and travel that were dealt a devastating blow after the September 11 terrorism attacks are making a comeback. It is believed that services will 410 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

412 continue to dominate the economy and although there are as many reasons as there are industry sectors, one key reason is that the world is turning towards a knowledge based economy, with open and free trade which invites all to be a part of it. ARTICLE- Adopt a Strategic Approach to Customer Service By Patrick O'Brien (Patrick O Brien is managing director of the Amanuenses Network Pte Ltd, a company that views training as an enabler of organisational change.) A strategic approach to service, suggesting six important areas for management to pay attention. Most organisations that regularly deliver great customer service understand one fundamental truth: Customer service contains two inseparable parts, service delivery and service recovery. Most organisations that regularly deliver great customer service understand one fundamental truth: Customer service contains two inseparable parts, service delivery and service recovery, which go hand-in-hand. Companies that deliver services or products are aware that sometimes issues will arise, and that these have to be dealt with. Service recovery is therefore an integral part of a greater service delivery whole. Recovery needs to be designed into the service, as customer service processes lack integrity without its design, and failure to recognise this can lead to a couple of key issues. One, some organisations focus only on the service delivery part, acting as if in denial when issues arise. Rather than dealing with complaints as a new, rich, source of information, they resist. Service delivery is perfect; issues arising are not perceived as strategic, but as tactical, random glitches that can be worked through. These organisations deny themselves important areas of potential knowledge for beneficial organisational change, service improvement, and cost reduction. Some organisations downplay service delivery, positioning it as a tactical tool, rather than a strategic weapon. When challenges arise, these organisations only focus on service recovery, with no relationship to the broader picture. The management mantra is one of "Hear them out, fix the mistakes, and get the business back on track." Organisations that provide great service, typically take a strategic approach to service delivery. This means that great service mostly arises from Gestalt not serendipity, and what is so must be designed to be so; delivery and recovery must cohere with integrity. In keeping with this approach, there are set out six important areas of reflection, for organisations looking to improve customer service. The Six S s for Service are: Set the strategy. Design for service delivery and recovery Start from the outside-in. See life through the customer s eyes Sacrifice complexity for simplicity. A solutions focus makes the customer s life easier Select staff with a positive service attitude. Not everybody has the service passion Synchronise rewards with goals. Measure what you want to reward Strengthen service and soft skills. Training is a strategic investment. Set the strategy. Design for service delivery and recovery Services are one of the key sectors in business today, and service delivery is increasingly a key competitive differentiator. For instance, the "Community Bank Competitiveness Survey" 411 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

413 ( ABA Banking Journal, March 2005) researched the banking sector, to identify the 10 most important factors for customers in Attraction and Retention. Service quality topped the list in both categories, measuring in at 81 per cent and 95 per cent respectively on the importance scale. Yes, execution of great service is delivered through operational and tactical ranks. However, ownership and creation of the customer service strategy require passionate and unswerving attention from the top of the organisation. A "chief envisioning officer" can drive a service ethic through a company much more effectively than can a "chief enforcement officer". Ask yourself why service is important to your company; does it grow revenue, does it reduce cost, does it improve customer satisfaction? Clear objectives are important to justify change, execute change, motivate and guide staff through change, by providing tangible service goals for delivery. Start from the outside-in. See life through the customer s eyes Great service is needs based, which means understanding those of your customers. You have to talk, yet you also have to listen to what they say. Never defend, never filter, never rebut. Instead, listen actively, listen continuously, and listen with an intensity as if each word is the last word that you will ever hear. As you listen, step into the shoes of your customers, and see life through their eyes. This is less difficult than it first sounds, if we choose to try. To help, think about those times when we are customers: on public transport, at the shopping centre, or in a restaurant. Knowing the likes and expectations of customers enables us to view their conversations through a different lens. Why is your service important to your customer? Why do they go to your company? What do they want to achieve? How do you help them achieve that? Questions that help you step out of your shoes ensure that you empathise, help you experience your company as they do, and place you in a better position to better service those needs. Sacrifice Complexity for Simplicity. A solutions focus makes the customer s life easier Though the concept of process is central to any organisation, not all processes are equal. The challenge facing organisations is in understanding who the true customer of any process is. Sadly, many companies place themselves as the customer of their own processes, and hold a supplier-centric design. Placing your organisation at the centre of its own universe may seem operationally efficient; an insideout approach is not a solution. Instead, companies that place the needs of their end customer as the real customer of their processes, give themselves the best chance to deliver great service. One way to help achieve this is to talk to frontline staff who deliver service daily. These people are both beneficiaries, and victims, of process. Moreover, they are the ever-present buffer between the process and the customer. What aspects of the process are important to service delivery; why do you do those things, why do you do them in that way, how could you simplify them for your customer? Many customers value time more than they do cost, so challenging the historical, legacy approach may help to improve service by building speed and convenience into the processes. Select Staff with a Positive Service Attitude. Not everybody has the service passion Jim Collins in Good to be Great encourages companies to "get the right people on the bus". Playing staff to their strengths is an organisational imperative; placing service-oriented people into serviceoriented positions makes sense. Some people aren t excited by service, they may not have the passion for it, and may lack the attributes for it. Organisations undergoing change to service orientation need to be mindful of this. It is vital when recruiting for service positions that criteria are used to ensure posts are filled on the basis of service-oriented attributes. 412 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

414 Ask yourself what personal attributes are important in service; what level of contact is desired, how important is personal presence, what benefit is an ability to connect? In a competitive landscape, building relationships and fostering loyalty are key cornerstones of growth. In service, these qualities are important, so select, and promote service positions around these attributes. Synchronise Rewards with Goals. Measure what you want to reward They say that if you cannot measure it, you cannot manage it. Think about the "it" that is being measured, as that "it" must be aligned to, and cascade out from, strategic service goals. Organisations often measure what is easy to measure, not what is strategically relevant. More often, measurements lag need; legacy dictates that companies continue to measure what they used to measure, even when strategy suggests otherwise. Keep in mind the purposes and people who use measures internally, especially when measures are used as a basis for reward. People will be motivated in the direction that rewards dictate, so fairness and equity in rewards are important. Ask yourself whether your current reward system is strategically aligned to your service strategy; what service goals have you set out, how have targets been constructed, in what ways do you measure progress and achievement to goals, and how do you equitably deliver rewards? Differentiate between actions and behaviour; are you interested only in achieving a specific outcome, or, is it important how that outcome is achieved? Strengthen Service and Soft Skills. Training is a strategic investment As a business that delivers corporate training, training is typically the topic on which we first talk to our clients. We purposefully place it last as the first question we get is: "I think I need some service training, how much does it cost?" To derive maximum benefit, we see training more of a strategic investment. It is a strategic means to help your organisation achieve its strategic ends. Training organisations deliver a broad range of relevant customer service skills, such as connecting, relationship building, listening, change, customer service, influencing, difficult customers, teamwork, coaching, and leadership. Strategic alignment of training to the organisational need is therefore critical. It should drive selection of the precise programme relevant to meet those needs. It is normally easier to learn new skills, than to embed them into the business once a training programme is completed. Application is tough, yet unless skills are applied, strategic benefits are not realised, and the value of that investment will likely diminish. The management and supervisory climate that new learners face upon return from training is thus a key determinant to their ability to apply new learning. An environment where they can put new skills into practice, with positive support and encouragement from management and their peers, is vital to achieve this. FUTURE TRENDS IN TRAVEL INDUSTRY Business Travel: Firms are Zapping Costs A glass case, the size of a grain of rice, injected into the arm. The tiny object would contain a chip and a power generator activated by radio-waves outside the body. It would store passport, ticket and credit card information that is automatically recognised as you walk through airport controls. No need to carry any sort of card or paper. Such technology may take a while to catch on. 413 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

415 Travel industry in the 21 st century Forget about traditional travel organisations: in the twentieth century they will disintegrate, as there will be a massive move to economical direct Internet-booked travel. An office in the air :Airlines will hlave to supply power sockets under every seat because businessmen cannot afford to stop working in the era of cyberspace where a one-hour delay can mean the loss of a billion-dollar deal. In the 21st century women will account for around 50% of travelling executives - with consequences for the travel industry. It means for example that hotels will have to provide adequate light and large make-up mirrors in bathrooms; replace male waiters with females if a woman objects to a man coming to her room as is the case in some countries. Hotels will instantly recognise the needs of customers. After one stay at a hotel, personal idiosyncrasies will be recognized throughout the global chain. Ex. If a guest orders a marmalade sandwich before going to bed. Whatever country he is in the marmalade sandwich will be supplied without him asking. When he walks into the bathroom, a voice will ask if he wants his bath run; and the water will flow at the temperature he wants. He likes the smell of toast: a toaster will be waiting. Hotels will have total knowledge of their client. Searching for Future? Don t believe market research it cannot predict the future. Market research only tells us about today. It tells us nothing about tomorrow. Customers usually know even less about the future than the executives who have paid to ask them. Many companies will not survive in the new millennium because they are relying on late 1990s surveys to plan third millennial products and services. They will land up with the wrong products, designed for consumers who no longer exist. Most people see the future as more of the same: faster computers, better cars, more TV channels. They can't see the big picture - how life will change itself A classic example is aircraft design. In the mid 1990s airlines such as British Airways asked business fliers what they wanted and they said good food and wine, comfortable seats, more video choices and personal screens. Hardly anyone mentioned data sockets on satellite phones, and even fewer asked for power supplies in arm rests so they could use PCs without clusters of spare batteries. Now these things are regarded as number one essentials for any world class airline - but it's too late. They won't be widely available on BA flights until well into the next millennium. This was a hugely expensive mistake. Today British Airways has business seats offering data phone sockets to frustrated and angry executives with dead portables. Those with longer range vision have won a competitive advantage. Over 1,700 aircraft world-wide already have in-seat power, not one owned by BA. Delta introduced it in 1996 and is rapidly extending this across its fleet. Lufthansa has power in all new first class seats and is upgrading business class. But American Airlines is leading them all after a delayed start. Retrofitting is complete on all its Airbus aircraft. Power will soon be available on all business class and half their economy seats. Code-sharing airlines are now under pressure to make sure travellers stepping out of a powered seat with one partner airline can continue their journey with the same facilities. So what went wrong? Airline chiefs trusted market research and lost sight of the future. Fundamental changes were taking place in three areas. replaced fax and people began to expect near-instant answers. Last minute interactive presentations on PowerPoint replaced dusty overheads. Heavier flying schedules meant that many executives were forced to give up in-flight leisure time to catch up on work. Laptops appeared everywhere in departure lounges and during flights. Instant access to is absolutely essential in a world where responding in an hour can make all the difference between signing or losing a multimillion pound deal 414 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

416 Market research is vital to fine-tune existing services, but over-reliance is deadly.marketing of airline products and services is also undergoing a sea change. 1. New forms of distribution are emerging in which the airline company, instead of using a specialized intermediary such as a travel agent, uses a partner which controls the telecom or banking infrastructure e.g. American Airlines and Continental, in combination with American Express, have introduced "smart cards" combining membership and credit functions and permitting the electronic delivery of tickets, seat reservations, boarding cards, mail tags and so on. At present these services are available only at interactive terminals in airports, but such terminals will soon be widely distributed. This "E-ticketing" is likely to grow in particular on heavily used domestic routes (shuttle services) because it reduces waiting time and personnel costs. The airline company alone can also manage the terminals. 2. Computer Reservation Services (CRS) is another technological advancement in which services are provided by computerized systems that contain information about carriers' schedules, availability, fares and fare rules, for which reservations can be made or tickets may be issued. 3. Franchising is of growing importance in air transport because it complements the development of regional companies and of "hub" strategies. It also reduces the risks of operating in areas where direct operations might not necessarily be profitable. A typical example is the franchised partners of British Airways: British Mediterranean Airways in the Middle East and Central Asia and GB Airways in the Iberian Peninsula, Malta and the Middle East. 4. Catering services are economically important, because hundreds of thousands of meals are served every day on board an aircraft. The size of the market is estimated at between $10 and $13 billion annually. Airline companies have often created specialised subsidiaries in this field (Servair for Air France, Sky Chefs for Lufthansa, SAIR Relations for Swissair), which may sometime also work for other airlines. Cargo Other than the movement of passengers by air, the transportation of cargo has also gained importance in the recent past. There are about 70 companies that operate pure cargo services, 50 of which operate internationally. This market is estimated to be worth US$ 20 billion annually and could triple in size by The sector is characterised by competition between traditional suppliers (forwarding agents and airline companies) and the express delivery companies, known as "integrators". The development of code barring, which allows on-line tracing of cargo, is an important technological advancement in this field. 5. Ground services bring together all services provided within or around an airport. This covers a range of very different services from air traffic control, which is normally a service provided by government on a non-commercial basis, to such services as franchising of shops and car rentals. Based on a study by the Airport Council International (ACI), the economic importance of non-aviation related ground services comes up to 46% of the airport revenues. The figure is higher in some cases, such as the British Airports Authority, which was the pioneer in privatization and the development of commercial activities. ACI's estimates for employment and turnover are also impressive: there are approximately 200,000 people directly employed by the airports worldwide, 1.6 million other employees on airports and 4 million indirectly employed on business arising from the airports. Turnover at airports is estimated at US$ 25 billion of which only half is derived from aviation business in the strict sense. The indirect economic impact is estimated at US$ 122 billion. 6. Aviation services: These are services involving the use of aircraft not for "air transport" of passengers and freight but for "speciality air services" including aerial mapping, surveying, construction, advertising and photography, forest fire management, fire fighting, glider towing, parachute jumping, heli-logging, aerial sightseeing, flight training, aerial inspection and surveillance and aerial spraying services. 415 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

417 THE FUTURE OF BANKING The coming convergence of computing and communications will redefine the financial services industry like no phenomenon before it. It will create a new world of banking, a world in which the walls between financial institutions and retailing will tumble, a world in which technology will transform the marketplace, a world where consumers may one day conduct business through their microwave ovens. The future is not in information technology - or technology that only facilitates transactions - but in relationship technology. The Internet, and the endless reach of its global network, is transforming life as we know it. Already on the horizon are ATMs that deliver value-added services such as tickets for sporting events, a new generation of electronic money and an e-soap opera of interactive characters designed to make banking and shopping more pleasurable. A Demanding Revolution Two crucial factors face the financial services industry as it enters the Third Millennium. First, consumers continue to demand individualized goods and services, and to demand them faster than ever; second, the world is undergoing a "Knowledge Revolution" whose consequences will dwarf even those of the Industrial Revolution. Together, these two trends converge in the new digital media that will allow everyone to interact and transact with their banks from virtually anywhere: at home, work, school or public spaces. The means and devices available to banks to conduct these transactions will be just as varied. People will choose whatever means is most convenient for any occasion. That could mean face-to-face at a branch, over the telephone, using a self-service device such as an ATM, or through a personal computer or television at home. Business, especially banking, will continue to be people-led, if increasingly technology-enabled. But one emerging benefit of the new revolution will be the recreation of the intimacy of small-town banking that existed when banks and businesses knew each other personally. These new electronic "communities" will not be based on geography, but on need and interest. The Brand of Change What will financial services companies have to do to keep pace with this changing world? For starters, they must realize that brands will no longer be able to rely on well-crafted slogans. To survive, let alone thrive, they will have to deliver consistent, proactive services day-in and day-out. In addition, they must understand that mass marketing will have to be replaced by one-to-one marketing. This doesn't necessarily mean tailoring a complete program to a single individual, but rather personalizing a program or product, even if the same offer is made to millions of other people. To meet this demand, successful organizations will be information-based, taking full advantage of data warehousing and data modeling. They will use data warehousing to distill thousands of transactions down to the relevant facts and clear patterns of behavior. New products and services will then be based on those patterns to better find a unique space in the minds of consumers. Super ATMs at Hand In the public relationship technology arena, the automated teller machine is the one device that computer-phobic consumers will happily use. But it remains one of the most under-used examples of computer technology. That's about to change dramatically. 416 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

418 Over the next few years, ATMs will offer consumers an increasingly wide range of services. In fact, while cash may be the ATMs' currency of today, personal information and communication may become their most valuable offering of tomorrow. These new solutions include ATMs that understand speech, recognize their customers by the patterns in their eyes, and dispense e-cards, theatre tickets and stamps as well as cash. There's even a Creative ATM which enables banks to develop a closer affinity with an audience who will become primary customers in the years ahead - children ages nine to 12. The Creative ATM includes an individual personal software agent character that gets to know the user, personal services from horoscopes to pen pals, a music corner for listening and recording, and banking and financial information. In the home of the future, electronic home banking will not be limited to personal computers or television sets. Research looks beyond these traditional outlets to new sources of connectivity that will link a networked banking world to household electronics. And on a more personal level, relationship technologies will emerge that will create new devices to encourage a closer electronic-based relationship between a bank and its customers. Tomorrow's financial consumers will be as different as the technology they use. Today's seven- to 15-year-olds - the Wired Generation - will have no concept of a bank branch. Instead, banks will have to adjust to changing lifestyles and deliver solutions wherever and whenever they're required, or risk complete erosion of the traditional roles of financial institutions. The Soap Opera Strategy : The financial services industry is looking for new ways to make banking more pleasurable and convenient, the lure of the Internet is too powerful to ignore. But the "virtual branch" won't be enough to excite new consumers. Instead, there is a need for developing a new online solution for banking where Consumers will more likely accept advice from a recognizable character than from a stark printed screen. An intelligent software agent can be developed that can provide information on financial issues ranging from buying a loan, to budgeting. Token Change Electronic money currently takes the form of a smart card. But the next generation of e-money will move to a contact-less technology making card-based e-money redundant. The new e-money could be held in any form of token capable of holding stored value and transactions, as well as communicating. Finally, researchers have turned a common kitchen appliance into an online banking connection. The Microwave Bank as the name implies, a microwave oven that can perform electronic banking functions and access account information - while it cooks a meal. Users will have the ability to surf the web for recipes, send and receive and watch a television screen. The Microwave Bank takes advantage of the trend by consumer electronics manufacturers to embed intelligence into a range of everyday appliances.we live in a rapidly changing world but the challenge of how we adapt to that world still remains. The evolving nature of the services industry will continue to redefine the roles of service providers. And only those service providers who understand their new roles - who can mesh advancing technology with the needs and lifestyles of tomorrow's consumers - will be able to grow and prosper in the decades ahead. 417 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

419 REFERENCES I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

420 Chapter-16 Teacher s Role as a Motivator Introduction Motivation is a vital factor in the teacher's management of learning and behaviour in the classroom. Motivation signifies the causes or 'why' of behaviour; it is concerned with questions of the energising of behaviour and the direction given to behaviour. In the classroom, motivation is observed as students show interest and enthusiasm, and give attention and concentration to learning tasks. Conversely, low levels of motivation are observed in student apathy and misbehavior. Teacher gives motivation and spirit to their students that can build the confidence from the students. A teacher as did not give a punishment if their student made a mistake in answering or doing exercise. But the teacher will continue to support and motivate students to repair the mistake. Teachers must be able to build the character their students through a variety of activities that can enhance student creativity in building self-motivation in students. Teachers should always be constructive to adopt innovative new methods to motivate students to learn the students by placing their students as a center of learning, meaning the extent to which the material presented is not depends on the teachers and the curriculum but it depends on the students. Many teachers feel honestly that they motivate pupils through tests, revision tests and grades to get rid of the fear of failure. No doubt, tests can be valuable tools for self-evaluation. But tests are not the only means, which are used for self-evaluation, and the results are not always precisely the ones desired and authentic. Some pupils work hard burning their mid-night oil to achieve what is expected of them; others become disillusioned and give up; many more develop vengeance and look for ways to retaliate against a system that makes them irritable and uncomfortable. When competition is insisted upon, cooperation and mutual agreement among pupils are not likely to develop. Many teachers inform that they try to motivate the pupils by encouraging the results that are satisfying and pleasurable. Teachers, who try to make learning satisfying, use a wide range of tools for recognition and appreciation of work well done. Praise is their main forte. Sometimes they shower with more concrete rewards. Marks are treated as symbols of rewards rather than as producers of fear. However, praise from an unpopular teacher may have a negative and undesired result. Praise perceived as insincere or unearned is also ineffective. 419 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

421 At times students are forced to sit and listen for period after period, except for the teacher's voice, peace and tranquility reigns. Teachers often deliver words at the speed of a bullet train, talk endlessly and listen little. Classrooms are always dominated by this kind of teacher talk. Teachers, who try to motivate by applying either carrot or stick policy, are largely engrossed with their own goals. But child exerts himself only as he sees some concrete gain extracting from the enterprise. Trying to motivate by pressures or pleasures is an attempt to short cut this process. But the learner must see a goal ahead if he is to put forth. A teacher, who mechanically assigns each hour's work without guiding learners to see the larger sequence of which it is a part, can serve dooms and will usually have little intrinsic appeal. This is the teacher who then feels a need for the carrot or the stick. He deprives students of opportunity to carry their existing motivations into the classroom in ways that could help their learning. Teachers can help students in shaping their beliefs about success and failure by teaching them how to respond to frustration and how to approach problems instead of becoming distracted by fear of failure and resigning. Maintaining the attitude that mistakes are a natural part of learning may be one of the ways of creating a supportive environment 1 Asian Motivator forum is a distinct platform in itself. It is a wave of courage to develop among the young minds to make them think positive, live positive and work to attain positive results.it is to develop skills of healthy living,healthy thinking and becoming an assest for personal and professional belongers. Not just the youth that this forum is looking upto this forum extends a helping hand for all those who requires guidance and a positive spirit to move forward, irrespective of the age group and caste.we are here to motivate to educate to recharge the soul with energy of prosperous living that most of us have forgotten now a days. A life begins at home. A child carries the value and virtues given by parents when he steps in the outer world.thus parents are the first educators. Then the child holds the hand of a teacher who teaches him and gives him knowledge about the theories and concepts.but is that subjective knowledge be enough to develop the future of a nation. How many of us have actually remembered the teaching of our subject teachers. But we surely do remember the extra touch that one of our teacher has given to take us from dark to light to transform our self into a better human being. That one teacher who has motivated us,understands our hidden potential and has inspired us always stays in a student s memories as a BEST EDUCATOR. Yes educator this is the right word for a person who actually gives a lot more to life of a student than what he himself get back. He is the ideal figure for the people in their formative year. A true inspiration, motivator and a positive molder of young growing minds who helps the student find himself. A student spend 1/3 of his day hours in an institute and 2/3 of the time he carries that 1/3 Impression with him.it is very easy to teach but it is very difficult to educate, to motivate,to add that extra pinch of wowness in life. They are one of the strong pillar of human existence. In this competitive world all are struggling for the space they need, want to earn money by all means. People have forgotten their values,faith,love, respect and care for each other.an educator plays an important role in searching that lost civilization of real values. A successful teacher initially establishes respect by being knowledgeable and helpful, the two essential components in a positive personal relationship with students. What really matters is the effect you have on students and their career competence. Related to respect is trust, a deeper personal relationship between student and teacher. Trust is so important that it exists at various levels in all organizations and strengthens over time through meaningful experiences. It is never quickly gained I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

422 Measuring motivation, or discovering what motivates an individual is far from straightforward. It is possible to observe or interview an individual and from this deduce their motivations, but one can never be sure. Moreover, in an increasingly diverse student population, we might expect to find increasingly diverse motivations. Much has been written about the factors that might make a learner value a learning opportunity : extrinsic the motivation comes from some external source, probably an expected future reward (usually financial). intrinsic the key is an interest in the subject itself. social the main motivator is a desire to please some third party whose opinion is valid (family, sponsor, teacher). achievement the motivation comes from the sense of "doing well" academically, and possibly the satisfaction of doing better than peers (this is sometimes called "competitive" motivation). null there is no clear motivation (the student may have simply "drifted into" a programme of study, and may have no clear idea of why they did this). It is clear that an accurate understanding of the main motivators of a class could inform the way in which a teacher approaches a subject. A student with extrinsic motivation, for example, will be keen to hear about lucrative careers in programming and will want to learn the very latest "in demand" skills. On the other hand, achievement motivation would lead a student to concentrate solely on those activities that were perceived to lead to high marks, and a desire that the teacher would dwell on these. Such a student would not necessarily want to "learn". A level 1 teacher would assume that most students taking computing degrees are extrinsically motivated, with the main aim of securing financial rewards in a good job while eventual employment is indeed the most important factor for many, almost half our students remain committed to learning for its own sake, and profess an interest in the subject. While understanding how a student is motivated is useful, we would also like to have some measure, no matter how crude, of the extent to which a student is motivated. This is, of course, impossible there is no scale of motivation. What we can have, though, is an understanding of the factors that control the extent of motivation. The extent of motivation can be seen as a function of two factors, expectancy and value Motivation = Expectancy x Value It is important that these two factors are seen to multiply rather than add. If either factor falls to zero there will be no motivation, no matter how high the other factor becomes. The second factor is closely related to those already identified; it is the reason why a student values success. In a programming context this might be future employment, high marks, and so on it matters not why a student values success as long as they do. In this context it is important that a teacher also appreciates that different students will have different views of what constitutes success; some may be content to pass, some may demand first class results. A teacher s job should be to ensure that each student can achieve success, defined in the student s own terms. It follows that a student must expect to succeed. If a student does not expect to pass a programming module then, no matter how much they value success, they will not be motivated, and will not engage in the tasks the teacher devises. There is a huge implication here for the way in which we teach, and in particular assess, programming. As a motivator rather than just a teacher, he must understand why the students are taking a particular course, and I must exploit this to make them value the outcome. Teachers are figures of authority. Motivators are rather different, and are more like trusted friends. If I am to successfully motivate students, they must, in some sense at least, trust me and I must trust them. 421 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

423 McGregor describes two climates that may be found in an organisation, and these can be readily applied to the teaching relationship. The two climates, Theory X and Theory Y are based on different levels of trust. In a theory X climate, the student is not trusted. The teacher makes the assumption that the students are taking the module simply to pass (level 1 thinking again), do not want to learn and will cheat if they believe they will not be caught. This leads to an environment where assessments are rigorously defined, deadlines ruthlessly enforced, and plagiarism zealously detected. It is hard to see how many students could like, let alone trust, their teacher in this climate. Theory Y is the opposite. Here, the teacher believes the students want to learn, and trusts them. Assessments are devised to be loosely defined and interesting, a certain flexibility with deadlines may be allowed (after all, is it important that a student does a task or that they do it before some deadline?), and it will be assumed that students will not cheat. Theory Y also satisfies personal causality the students are much more in control of their own destinies than they would be under theory X. The teacher trusts them to take this control, and effectively delegates it. Admittedly, it is unlikely that a strictly theory Y environment could ever be introduced. Academic standards demand attention to plagiarism and enforcement of deadlines. At the same time, students finding themselves in a world that is more theory Y than theory X are much more likely to trust their teacher. It follows that they are much more likely to be easily motivated. 2 Motivation is a vital factor in the teacher's management of learning and behaviour in the classroom. Motivation signifies the causes or 'why' of behaviour; it is concerned with questions of the energising of behaviour and the direction given to behaviour. In the classroom, motivation is observed as students show interest and enthusiasm, and give attention and concentration to learning tasks. Conversely, low levels of motivation are observed in student apathy and misbehaviour. Motivation is closely related to self-concept and to personal needs. Maslow (1970) has described a hierarchy of needs extending in pyramid fashion from basic physiological and safety needs to needs for belongingness and love, to self-esteem needs, and to the highest level need for self-actualisation. Self-actualisation involves striving for the full realisation of a person's potential. The motivating role of teachers encompasses attempts to create conditions within a classroom which will energise, direct and sustain students' performance. This role is important for promoting morale and climate, and involves the sustaining of enthusiasm and positive attitudes towards school goals and learning tasks, both those assigned and those self-generated by the students. Aims As mentioned previously, the motivating role is primarily concerned with energising behaviour by tapping internal forces which will initiate and sustain the work of students for whom classroom teachers are responsible. Classroom teachers will seek to achieve the following: Ensure commitment of all students to the school's mission. Create conditions which will energise and direct the efforts of students towards achieving learning goals. Sustain levels of motivation which will keep the students persevering with their assigned tasks. Provide an appropriate model of enthusiasm and diligence, displaying warmth and a high level of effective interpersonal relationships and communication. Foster classroom climate through a proper sense of student achievement which comes from felt success in achieving school and personal goals. Categories of Motivation I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

424 There are two broad categories of motivation - intrinsic and extrinsic. Intrinsic motivation is a response to needs within the student, such as curiosity, the need to know, or feelings of competence and growth. Internal satisfaction a student feels about a particular task is another aspect of intrinsic motivation. For example, some students might find activities involving movement to be intrinsically satisfying. Extrinsic motivation is motivation from outside the learner and has to do with external rewards for completion of a task. Words of praise from the teacher, a higher grade, or a privilege are examples. The reinforcement of extrinsic motivation can be effective; but be aware that excessive use of rewards may be decreasingly successful in new situations, foster dependence on the teacher, and undermine intrinsic motivation. For studies on intrinsic and extrinsic motivation see Lepper, Greene, & Nisbett, 1973; Lepper & Greene. 1975; Morgan, 1984; Pittman, Emery, & Boggiano, A number of educators have proposed strategies to motivate students to learn. Keller (1983), for example, suggests that teachers consider four dimensions of motivation: (a) interest, the extent to which the learner's curiosity is aroused and sustained over time; (b) relevance, the learner's perception that instruction is related to personal needs or goals; (c) expectancy, the learner's perceived likelihood of success through personal control; and (d) satisfaction, the learner's intrinsic motivations and responses to extrinsic rewards. Some educators have organised their recommendations around intrinsic and extrinsic motivation (e.g., Good & Brophy, 1995). Others have provided recommendations based on a synthesis of the issues (e.g., Gage & Berliner, 1991). Full-length books are devoted to motivating students (e.g., Spaulding, 1992; Stipek, 1993). A summary of the six categories of actions has been included below. Six strategies for motivating students to learn: The six strategies for motivating students to learn was adapted from 'Burden. P. R., 1995, Classroom Management and Discipline, Longman, New York'. 1. Capture Student Interest in the Subject Matter. Take student interest into account Capitalise on the arousal value of suspense, discovery, curiosity, exploration, and fantasy. Try to make study of the subject matter as active, investigative, adventurous, and social as possible. Use questions and activities to capture student interest in the subject matter. Use games, simulations, or other fun features. 2. Highlight the Relevance of the Subject Matter. Select meaningful learning objectives and activities. Relate the subject matter to students' everyday experiences and backgrounds. Call attention to the usefulness of the subject matter. Have students use what they previously learned. 3. Help Students Maintain Expectations for Success. Have students set short-term goals. Help students assess their progress toward their goals. Allow students a degree of control over their learning. Draw attention to the successes students have achieved. 4. Design the Lesson to Maintain Interest and Promote Student Success State learning objectives and expectations, and provide advance organisers. Vary instructional approaches and present the subject matter in interesting, novel ways. 423 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

425 Plan active student involvement. Select stimulating, appropriate tasks. Occasionally do the unexpected. Use familiar material for initial examples, but provide unique and unexpected contexts when applying concepts and principles. Design activities that lead to student success. Provide an appropriate level of challenge and support. Plan for individual, cooperative, and competitive activities. Adapt tasks to match motivational needs. Promote feelings of control by giving students a voice in decision making. Communicate desirable expectations and attributes. Minimise performance anxiety. Establish a supportive environment. 5. Express Interest in the Content and Project Enthusiasm. Model interest in learning and motivation to learn. Model task-related thinking and problem solving. Project enthusiasm. 6. Provide Feedback and Rewards for Performance. Provide frequent opportunities for students to respond and to receive feedback about their academic work. Offer rewards as incentives. Give some rewards early in the learning experiences. Help students attribute achievement to effort. Help students recognise that knowledge and skill development are incremental. Provide remedial socialisation for discouraged students. While there is no real formula for getting students motivated, there are some approaches that work (for different children of course). Usefulness: How many times have you heard a child say, "What purpose does this have in my life?" Subjects need to be applied for a student to open their minds to learning them. Geometry for example is important to architecture, carpentry, decorating, robotics, art, assembly, computer aided design, video game programming, building models, technology, biology, astronomy, telecommunication, and more. Students need to find something they are interested in to help them learn a subject they are not excited about. Self Esteem: A child with a good amount of self-esteem will be less inclined to look at his peers for approval and so will be less likely to be distracted from learning by outside influences. Persistence: Sometimes you just have to stay on a child to get keep them motivated. I am not talking about begging or cajoling. Parents and teachers however need to continuously observe and encourage a student through a subject until they can find a something about that subject that will allow them to be self-motivated. Instructors have a great deal of power in the motivation of students. They can also unmotivated an otherwise motivated student if they are not careful. In order to motivate their students, they themselves must be motivated to teach beyond the monetary reward. Enthusiasm: Kids know when a teacher is motivated to teach and when they are doing it as a job. I think my least motivated teacher was my typing teacher. She made a subject that one would think students would enjoy, pure hell. It was clear that she did not want to be there, and so none of us wanted to be there either. She spent more time ridiculing students for reasons that had nothing to do with typing than encouraging them. 424 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

426 Relevant material: Teachers need to be up with the times in their subject matter. They need to know the modern teen culture and be able to pull things that kids can relate to into the curriculum. Appropriate difficulty levels: While asking hard questions make students think, teachers must be careful to lower the bar when appropriate so that students can feel accomplished and then slowly, but surely raise that bar. Student Involvement: When a student feels ownership they become more enthusiastic. This is why science labs are such an important part of teaching science. Teachers should find ways to help children apply what they learned in a way that is meaningful to them. This may mean presenting the material back in the form of a song, poem, or even a website. Rapport: Personality is everything. How many times have you heard a parent complain, my child just does not get along with the teacher as the reason the child is not doing well. Once a certain amount of animosity is built up between a student and teacher, the student will begin to mentally shut the teacher out. At this point, they will cease to learn even the simplest concept. While teachers should not be pushovers, and everyone's best friend, they must try to be fun, fair, and approachable. Planning a Lesson As you plan a lesson, also plan for motivation, and plan that each time phase of the learning sequence includes positive motivational influences. There are three critical periods in a learning event during which particular motivational strategies will have a maximum impact on motivation. These are: 1. Beginning a lesson - when the student enters and begins the learning process. 2. During a lesson - when the student is involved in the body or main content of the learning process. 3. Ending a lesson - when the student is completing the learning process. Beginning a Lesson At the beginning of a learning activity, you need to consider two motivational factors when selecting motivational strategies: attitude and needs. Attitude deals with the student's view of the subject matter, the general learning environment, and other factors. Needs deal with the students' basic needs at the time of learning. As you plan for the beginning of a learning event, ask yourself two questions: What can I do to establish a positive learning attitude for this learning sequence? How do I best meet the needs of my learners through this learning sequence? Attitude is the student's stance toward the learning environment, teacher, subject matter, and self. When planning to incorporate motivational factors at the beginning of a lesson, you need to select strategies that positively affect the student's attitude about themselves, yourself as the teacher, the subject, and the learning situation, while also establishing learner expectations for success. To positively affect attitude about yourself as a teacher, you might plan to establish a relationship with the students by sharing something of value with them. Listening to them with empathy, treating them with warmth and acceptance, and using class or individual meetings to establish relationships. To positively affect attitude toward the subject and learning situation, plan to make conditions surrounding the subject positive, model enthusiasm for the subject, associate the student with other students who are enthusiastic about the subject, positively confront the student about erroneous beliefs, and make the first experience with the subject matter as positive as possible. You can positively affect the students' attitude toward themselves by promoting success, giving encouragement, emphasizing students' personal causation in their learning, and using group process methods to enhance a positive self-concept. Finally, when trying to establish learner expectancy for success, you could interview students and help them set goals or contracts for their learning. A need is a condition experienced by the individual as a force that leads the person to move in the direction of a goal. Maslow's hierarchy of needs provides a framework to examine strategies that teachers could select in addressing students' needs at the beginning of a lesson. When planning for meeting psychological needs, you 425 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

427 could select content, examples, and projects that relate to students' psychological needs, and could be alert to restlessness so you can relieve the causes producing it. For example, students may not be physically comfortable after sitting for long periods of time, or after being asked to do one task for a long time. Instead, have a change of activities or break the tasks up into shorter segments. During a Lesson During a learning activity, two motivational factors need to be considered stimulation and affect. Stimulation deals with attention and involvement during the learning process. Affect deals with the affective or emotional experience of the student while learning. As you plan for this part of the learning activity, ask yourself two questions: What about this learning sequence will continuously stimulate my learners? In what way is the affective experience and emotional climate for this sequence positive for learners? Stimulation has to do with holding attention and building involvement. When you introduce or connect learning activities, draw attention to the new learning activity or topic. Use movement, voice, body language, and props to vitalize and accentuate classroom presentations. To promote interest and involvement, relate learning to student interest, and use humor, examples, analogies, stories, and questions. When asking questions, limit informational questions and selectively increase questions that require comprehension, application, analysis, synthesis, and evaluation. To create disequilibrium, introduce contrasting information, play the devil's advocate, and be unpredictable to the degree that students enjoy the spontaneity. To be unpredictable, for example, you could alter your conduct of each review session before a test. Affect pertains to the feelings, concerns, values, and passions of the students while learning. When planning lessons, try to encourage and integrate learner emotions, and maintain an optimal climate within the learning group. Feelings are the emotions that accompany the how and what a student is learning. Awareness and communication allow feelings to become a vital influential aspect of motivation. Integrate what is being taught with how the student feels now about the content and then establish a relationship between this content and the student's life. You can also take steps to establish a climate that promotes a positive interrelationships among class members. Ending a Lesson At the end of a learning activity, two motivational factors are considered: competence and reinforcement. Competence deals with the degree of progress the students feel they have made. Reinforcement deals with feedback on their progress. When you plan for the ending of a learning activity, ask yourself two questions; 'How does this learning sequence increase or affirm the learner's feelings of competence?' and 'What reinforcement does this learning sequence provide?' Competence refers to the sense of growth and content mastery that a person recognizes. As you plan for the end of a learning activity, take into account at least two aspects of competence. First, make sure students have opportunities to become aware of their progress and mastery. You can do this by providing feedback on mastery of learning, offering constructive criticism, and facilitating successful completion of the learning task. Second, students need to be aware at the end of the activity that theory 'personally caused' their own learning. This can be done by acknowledging and affirming the student's responsibility in completing the task, using a competence checklist for students self-rating, and acknowledging the risk taking and challenge involved in the learning accomplishment. Reinforcement is an event of a state of affairs that changes subsequent behavior. For example, a student who is given praise for efforts made in studying for a test will tend to continue these efforts after the praise is given. Reinforcement can be in the form of artificial reinforces such as tangible or concrete materials, or extrinsic symbols for learning behavior. Gold stars, prizes, trinkets, certificates, and points are examples. When natural consequences (e.g., reading can produce new insights and expand awareness) of student learning are evident, emphasis the result of the learning 426 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

428 behavior. and highlight it as a part of the learning process. You can take steps to enhance the intrinsic value of traditional grading and limit its negative intrinsic value. Provide alternative forms of feedback to students about their performance, clearly explaining the grading policy to students, and perhaps using student self-evaluation as part of the grading decision. Strategies For Enhancing Motivation 3 1. Challenge Them Offer student opportunities to undertake real challenges. Encourage them to take intellectual risks. This gives students an opportunity to discover the relationship between effort and success; between success and motivation, and to develop higher self-concept. If the students do not see the need to make an effort they sometimes will not bother to make one. Even brilliant students are not motivated to achieve if the work is too easy 2. Build on Strengths First Building on strengths first give students an opportunity to use their talents to achieve success by developing their strengths. While they are engaged in these successful tasks we can help them to learn how to improve other skills (teach to specific needs) in an environment where the child cares about doing a good job. When the primary focus is on student weaknesses students are spending much of their time being unsuccessful, practicing what they do badly. This lowers self esteem and lowers motivation. Failure is unmotivating. Success is motivating when students understand why they are succeeding and are able to develop their confidence and competence. 3. Offer Choices Offering choices develops ownership. When the child makes decisions he or she is more likely to accept ownership & control of the results. This sense of control fosters responsibility. When the control belongs to the teacher so does the ownership. However, always offer choices that are equally acceptable in your eyes. Negotiate-How can students have input in order to reach the required goals? Can they reach necessary goals their way? When they achieve a non-negotiable goal perhaps they may have input on the follow-up activity. Remember it is not realistic for students of differing abilities to be expected to aim for the same goal using the same method. When students are offered opportunities to make decisions they learn a great deal about the consequences of their choices. They also learn to value themselves and their own decision-making ability. Where ever it is appropriate, take advantage of the student's talents and interests to motivate them. Learning processes can be varied and students can be encouraged to find alternative strategies for solving problems & then they can discuss the merits and disadvantages of each. Permit student the choice of product. 4. Provide a Secure Environment Permit students to fail without penalty. Learning how to deal with failure is critical for developing motivation and successful learning. Students should learn that they can and must learn from their mistakes. Fear of failure sometimes causes students to deliberately sabotage their own efforts because deliberate failure is easier to accept than the failures to which they fall victim. (No control is equated with being powerless.) I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

429 5. Teach Them How to Make Their Tasks More Manageable Narrowing or broadening the topic to a challenging but manageable size is very important for developing motivation. However, it is not just sufficient for us to just give them manageable activities. Not only is this is an essential problem solving strategy, but it is also an essential life skill. Students need to know how they can make their own activities more manageable. Even the most challenging tasks can be made more manageable by breaking them down into smaller parts and then prioritizing the steps. As each small part is achieved a measure of success is attained. As the successes mount up students begin to recognize their own enthusiasm for learning. (Effort and Struggle during skill development results in Success and Motivation) 6. Use Rewards & Punishment with caution Although there are appropriate places in education for both rewards and punishment, they are both external factors that can rob students of personal control. Obviously there must be consequences for different kinds of behaviors, and real success needs some kind of recognition or attention. However, both rewards and punishment can be negative factors in developing intrinsic motivation. Rewards cause students to work for the wrong reasons. Punishment often fosters resentment and lack of co-operation. When rewards are external factors, motivation is also external and it will only apply when monitored externally. Rewards are most effective when used with lower ability or unmotivated students when the rewards is used for a short time only. Never use rewards over a long period. Never increase the reward for increased expectations. Decrease the rewards as soon as they begin to become effective. Long use only reinforces the external control. The real reward for good work must eventually become the satisfaction derived from effort and success. 7. Help Students Develop An Internal Locus Of Control Locus of control is closely related to motivation. Students who feel they have the power to control some events in their lives are more likely to become self motivated than students who see themselves as powerless. If they don't believe they have any power/control over the events in their lives... then everything that goes wrong is someone else's fault, not theirs. The child who perceives that he or she has no power will either see himself as a victim of chance (and/or other people's power) or as a warrior who needs to gain power to control or manipulate other people in order to avoid being helpless. Students who have been loved too much, controlled too much, given too much power too early, rescued and/or blamed too often tend to be manipulative. Almost all unmotivated underachieving students manipulative adults by either active or passive behaviors. 8. Avoid Power Struggles Poorly motivated students are often very manipulative. Avoid power struggles whenever possible, and never get into a power struggle unless you have the means to win. Choose your battles. Students who engage in power struggles also need to be offered choices, but the choices must always be limited to the ones that you find acceptable. 428 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

430 9. Use Ambiguity Occasionally Give students opportunities to learn strategies for dealing with ambiguity and or frustration. Some students are convinced that every question has only one right answer. Help them realize that there is often more than one right method or answer. If they see all questions as being either right or wrong they will probably see themselves as being good when they are right and bad when they are wrong. This doesn't leave much room for motivation. Brainstorming with someone else is an excellent strategy for looking for alternative interpretations of and solutions to the problem of ambiguity. Frustration can be motivating when you have problem solving strategies and you see problems as something to be solved rather than to be avoided. Unmotivated underachieving students frequently use avoidance rather than an effective strategy when frustrated. 10. Offer Open-ended Activities to Develop Creativity Give them opportunities and strategies to develop their creativity. Students perform with higher motivation when their creativity is engaged. Challenge students to construct original & creative products to support their written reports. 11. Teach Students to Evaluate Themselves Self-evaluation needs to address the questions: "What was done well?" & "How can it be improved?" It is far more powerful for students to recognize the answers to these questions than it is for them to be told the answers. Student self-evaluation is often difficult for the first few attempts. Students want to achieve a high evaluation but are reluctant to "brag" about their success. It has been my experience that the majority of students lean towards being too hard on themselves, but some students can be unrealistically generous initially. The ability to realistically evaluate ones own performance improves with practice and is both empowering and highly motivating. 12. Attention Seeking Behaviors Unmotivated students frequently seek adult attention. They can actively demand attention or passively demand attention, and the attention they seek can be either negative or positive attention. Positive adult attention can be a highly motivating factor but only if it is earned by reasonable effort. It can reinforce poor motivation if it is overdone or given for the wrong reasons. Too much praise makes "no praise" look like an invitation for attention seeking behaviors. The child who is motivated by excessive praise may do very little when the praise is absent. Negative attention for some students is just as satisfying as positive attention and in fact if they are used to a great deal of negative attention it may be more comfortable because it is so familiar. Difficult as it is, ignoring demanding attention seeking behaviors is sometimes more effective than giving negative attention. However, positive attention should be used to reinforce acceptable behaviors. Passive students are the most difficult to motivate because they tend to waste their energy trying to get others to feel sorry for them. They refuse to take risks, sometimes sabotaging their own efforts to prove they deserve our pity. It is important to recognize these behaviors and guard against compounding the problem by being too sympathetic. Sympathy only convinces these students that they really do have a problem. It is important to 429 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

431 recognize the moment when these students actually make some progress and to give the appropriate attention at that moment. They should receive a positive attention response any time they take a risk or make an effort. 13 Competition Competition can enhance or reduce motivation depending on how it is used. It is good for some, but it may result in a few winners and many losers. Unmotivated and or underachieving students often have difficulty dealing with defeat. Until they are ready to cope with defeat it is more productive to encourage students to compete against their own performance rather than with someone else's. Competing against oneself under controlled conditions means that everyone wins. Use the clock. Time their performance for 1 minute, estimate what can be accomplished in 5 minutes. And challenge them to beat their own record over a longer time span. Gradually increase the time factor and expectations. You can challenge students to compete against their own performance in the quantity and quality of their productivity, within a specific time frame or it can be used to increase on-task behavior or decrease inappropriate behavior. In fact most criteria which can be used to evaluate progress can be used for a student to compete against his/her own previous performance. The long term goal is to teach students to loose gracefully and use defeat as motivation to improve. (See selfevaluation.) Eventually students must be encouraged to see "failure" as a positive experience. Every loss in competition and every failed attempt is an opportunity to learn what can be improved. 14. Students Need To Understand The Relevance Of All Their School Activities Students who do not understand the relevance of a school activity are not usually motivated to accomplish it unless they are motivated to please the teacher. (External motivation.) Clearly establish the expected goal and required method. Let the students know the benefits that will be realized. This is especially important when no choices are being offered. 15. Perfectionism - Is It Good or Bad? Perfectionism goes beyond trying to do ones best. Perfectionism is getting hung-up on being perfect. Students need to take pride in their work but perfectionists allow their fear of making a mistake to inhibit progress. It can be seen in the child who keeps erasing everything, or keeps starting over making slow progress or not finishing. It can sometimes be seen in the child who procrastinates too much, forgets homework or loses work rather than admit it is not perfect. These students need to learn that completing work on time is more important than being perfect, attempting is more important than succeeding, and failure is an opportunity to learn. Students need to see us (teachers and parents) making mistakes occasionally. We need to model and demonstrate the process of learning and recovering from our mistakes. And we, as teachers need to remember that if it can be done perfectly, it is probably too easy. If it is perfect they are probably practicing (rehearsing) previously acquired knowledge or skills and may be learning nothing new at all. 16. Reinforce Required Strategies One reason students have difficulty sustaining their motivation when working independently is because they either don't understand or don't remember the required strategies. Never assume a student knows how to do something independently unless you see it demonstrated. 430 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

432 Also students can sometimes remember all of the steps within a required strategy and still not understand why they are doing them. Conversely they can understand the strategy but forget the steps or the sequence involved. As Graham Foster has often said: "Just because it's been taught, doesn't mean it's been caught." The strategy therefore is to make sure that the skills required for an independent task are readily available when a student is expected to apply them. This can be done by oral review, by have students keep a note book on skills and strategies, or by using posters and skill charts on the walls. When a student appears unmotivated to work independently have him/her demonstrate that he knows what to do. Don't be unduly influenced by their ability to verbalize instructions. Verbalizing instructions means they remember the steps, it does not necessarily mean they know how to do them. 17. Teach A Variety Of Organizational Strategies Students need to know that there are countless numbers of effective organizational strategies. Initially it may be sufficient to have at least one effective method. However, as teachers we need to remember that non-sequential organization is not necessarily disorganized. Some students are very organized but they may be non-sequential or non- linear in their thought patterns. For these students a linear sequence of steps 1-10 may be inhibiting. They may be confused by what seems to be a logical sequence for a sequential thinker. A variety of organizational strategies encourages students to build on the strength of their own thinking style, and they will develop an arsenal of strategies to chose from. Eventually they will learn to vary the strategy to suit the requirements of the task. 18. Role Models Some apparently unmotivated student are not really unmotivated but are motivated to follow an inappropriate model. For example a significant person in their life might be demonstrating the role of "drop-out", "nonacademic", "unsuccessful" or the "I didn't need to work because I was so clever or because it is boring " type. These students need a positive role model. Parents should be encouraged to fill this role, or an uncle, aunt, brother sister or even... the teacher. Teachers can become role models for students. We can demonstrate being an effective writer, an independent learner, a good loser etc. When time permits it is highly effective to model quality work by rewriting a few of their sentences or brief note facts (jot-notes) and ask them to decide which is better and why. Peer editing or self evaluation where rubrics and/or specific criteria is applied to the self-evaluation process can also serve to illustrate good work habits and quality work. 19. Differentiate Instruction with Tiered Assignments or Layered Curriculum techniques Differentiated Instruction is another good way to empower and motivate students. Students are very much aware how ability levels differ in the average classroom. Ask any student who in their class required enrichment or who reeds extra help and they can tell you. In my experience they can also easily identify other students performing at the same ability level as themselves. With this awareness comes an understanding that a single classroom activity can simultaneously be too difficult for some students and too easy for others. Once the issue of "what is fair" has been clarified students comfortably adapt to the idea of tiered assignments or Layered curriculum activities. However, it is necessary to make it clear that treating all students the same is not 20. Scaffolding : Scaffolding relates to the supportive role that a teacher undertakes to ensure success in activities where a student is being challenged. By consistent evaluation of student work teachers can provide just-in-time small group instruction to facilitate students being able to perform effectively at a level above that which they handle independently. It is important to remember that if a student can succeed thoroughly independently then he/she is only practicing something that has already been learned and the student is not being challenged to construct new meaning in the learning process. When encouraging students to stretch and take on greater challenges it is important the the teacher provide the structure and guidance to make the learning successful. 431 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

433 CHAPTER 17 AN OVERVIEW OF SPA,HEALTH AND WELLNESS INDUSTRY The word SPA in Latin is acronym of Salus Per Aquam or health from water. Spa is also the name of a small Belgium village where hot mineral springs were used by Roman soldiers to treat aching muscles and wounds from a battle. Spas began when people started soaking themselves in hot springs thousands of years ago. But the spa world has changed since then. Spas are tremendously becoming popular in today's life where people are in search of some place to go and relax. This industry has recently emerged as a global phenomenon through a convergence of industries, traditions and therapeutic practices. Globally the wellness industry is estimated at over $250 billion.75,000 standard spas world over that provide direct employment to about 1.5 million people. The term wellness encompasses a wide range of parameters by today s standards. It applies to your mental, physical and emotional wellbeing. In other words, there is more to good health than just basic mind and body care. You need to feel well in every aspect of your life. This involves monitoring and changing your lifestyle in terms of diet, exercise and an environment that is conducive to peace of mind, which you can learn by acknowledging yourself with spa. Spa and Spa therapies have been around ancient times in many different forms that reflect the cultural, social and political view in which they all are embedded. These practices are now being rediscovered, integrated and branded to create a new global industry that draws from a range of aligned industries. These include beauty, massage, hospitality, tourism, fashion, food, beverage, health, fitness as well as complementary, conventional and traditional medicine I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

434 Spa Treatment has two main objectives: 1) to create treatments that would offer clients real results while providing a pleasurable and relaxing sensory experience, and 2) to introduce clients to a holistic approach to health and beauty, one that would address the inner and outer needs of the body, and that would ultimately ensure the most rewarding spa experience. Basically spa has four main pillars: 1. Massage 2. Steam 3. Sauna 4. Jacuzzi Massage therapy is a practice of thousands of years. A massage can be defined as a skilful application of manual manipulation on the soft body tissues such as muscle, connective tissue, tendons, and ligaments to improve health and enhance well-being. However a spa massage is a combination of a massage, acupressure, reflexology etc...etc... it is more of a therapy to contribute to better health parameters, different kinds of massages have different health goals and techniques like kneading and passive stretching of muscles in the neck and back, as well as gliding strokes on both the front and back of legs and arms. ; for example. A spa massage therapy can be used to treat pain; it is very effective against muscle pains and even other forms of pain. A spa massage also improves blood circulation in the body. A steambath is an ancient type of bath, first made popular by the ancient Greeks and Romans. The origins of the steam bath come from the Roman bath, which began during the height of the Roman Empire. Ancient Roman baths served many community and social functions within Roman society. Everyone in Rome used Roman public baths, regardless of socioeconomic status. These Roman baths were supplied by natural hot springs from beneath the ground A sauna is a small room or house designed as a place to experience dry or wet heat sessions, or an establishment with one or more of these and auxiliary facilities. A sauna session can be a social affair in which the participants disrobe and sit or recline in temperatures typically between 70 C (158 F) and 100 C (212 F). This induces relaxation and promotes sweating. Jacuzzi is a italian multinational corporation that produces whirlpool bathtubs and spas. Its first product was a bath with massaging jets. Importance of Spa 1. It helps to relief body pain 2. It helps in proper blood circulation 3. Enhances body energy 4. Helps in better body movement 5. Relaxes the body muscles 6. Detoxifies the body 7. Reduces stress 8. Helps to lower body fat 9. Helps to prevent hypertension and blood pressure Based on the requirement and purpose there are different types of spa available nowadays which are as follows 433 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

435 Types of Spa 1. Home Spas: The latest in spa technology is a single portable home spa machine which uses involves ultrasonic waves, ozone negative ions and far infrared rays. The machine is designed to cause physical relief that are the effects of stress and strain. This is the latest breakthrough in home spa technology and is The ultrasonic home spa system. Ultrasonic bubble treatment renders the same body response in equilibrium to a one hour massage session, as it applies direct pressure to the body tissues akin to a massage, therefore the ultrasonic bubble treatment applies direct pressure to the body by dilating the cells and penetrating the skin, it also provides provides internal warming and deep cleansing. To enjoy the bath of a hot spring one can also add essential oils for a healthier feel to the body. Another home spa trend is encouraged by the availability of essential oils to facilitate aromatherapy at home, all one needs to do is drop in small beads of essential oil in a a large or small container of hot water such as lavender oil, citrus oil or even sandalwood oil. A home spa is popular because it is reasonable, and one can indulge in a spa experience in an inexpensive manner, and all one requires is a bathroom at home with a some extra equipments that are good investments like the hydro therapeutic showers, tubs and glass tiles, of course one can visit a day spa to feel pampered as well; however a home spa a convenient way to relax after a hard day's work. 2. Medical Spas / Hospital Spa: People in metropolitan cities are becoming more health conscious and health has become their priority, there are a number ailing people who receive treatment from medical spas treated with medication as well as alternative medication ;which is a particular health regimen that is served as a part of the medication practice where a new level of healthcare is adopted; such as massage, reflexology, water therapies, and even body wraps and facials are at par for the course. The idea is about look good and feel good factor or vice versa. complementary therapies are offered along with medical practice combined to define a comprehensive, well-rounded approach to healthcare delivery. 3. Theme Spas: The idea behind a theme spa is to add a touch of personality and create a unique brand identity for a competitive advantage. The theme trend is based on a particular concept with specializes in specific treatments of course. The theme of the spa should reflect in the atmosphere, decor, products and programmes offered in the spa. 4. Resort Spas or Retreat Spas: A resort spa can be found in Popular hotels in the major tourists destinations such as Paris or Phuket etc. However a resort spa is not a destination spa because a destination spa is a place exclusively meant for fitness whereas a resort spa is an establishment for tourist lodging with features of a spa environment to enhance the level of pleasure and satisfaction at the spa resort. Guests who need a getaway or a short break form everyday life can visit a resort spa for a weekend or a vacation. Resort spas encourage other activities such as swimming, golfing or even cycling to nurture your mind with pleasure. A huge plus point with a resort spa is that children are welcome and activities are also catered to clients keeping children in mind; whereas most destination spas do not cater to children's activities. You should not visit a resort spa if you have certain health issues that you need to tackle, the right place for you will be a destination spa. 5. Fusion Spas: A fusion spa is a spa that offers fashionable treatments like watsu (a blend of water and shiatsu) or yogalates which is a blend of yoga and pilates and of course the very famous Thai Massage which is a blend of yoga and massage. There are many more designer programmes that are a concoction of several treatments in a single package to help clients enjoy a mixed gamut of therapies for their pleasure. 6. Genuine Spas: Genuine spas offer authentic alternative medicine practised in the particular region or area with traditional therapies right from using essential oils to conventional methods of rehabilitation processes like Chinese medicine offers alternatives like Acupressure and Acupuncture, comprehensive, well-rounded approach to healthcare delivery. 7. Naturopathic Wellness Treatments: Naturopathic medicine is important for its ability to effectively treat the underlying causes of pain or disease, but at the same time people want to adopt a natural way of beautifying themselves. The use of herbs, healthy food or clinically enhanced products, are the main goal of acquiring inner beauty, and beauty treatments. Some people opt to avoid chemical and synthetic cosmetic products and focus on naturally found ingredients on various treatments. 8. Spa Cuisine: The main focus of spas is the nutritional value of food they offer in spa cuisine. A good diet will help you to be productive, and will enable you to deliver better results in any field of productivity, be it 434 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

436 professional or personal. The human body needs to be constantly nourished, even more so in times of stress, which most people are experience with a hectic lifestyle. This trend of spa cuisine encourages people to eat healthy offering innovative recipes including foods that deal with stress, the texture of your skin, dark shadows or puffiness under your eyes, the extra weight on your stomach etc. can be tackled with changing your dietary habits. 9. Detox spa: Getting rid of all the toxins inside the body through treatments, ie. getting rid of dietary toxins from the body. These toxins accumulate in the body through bad eating habits, irregular sleep and deteriorating environment and stress induced by unhealthy lifestyle. Therefore a detox spa helps the function parameters of the body to improve by supporting the body's own detoxification system. The treatments include colon hydrotherapy and herbal enemas, which cleanse the colon, and detoxifying spa treatments like lymphatic drainage massage, and body wraps. 10. Spas for teenagers and kids: Not every spa caters to a child and teenage clientele, however there are some spas that do. These growing children are encouraged to eat healthy foods and practice a healthy lifestyle and cultivate one at an early stage in life. A spa for teenagers and children not only educates them with good health facts but it is good way for parents pampering to their kids. 11. Relaxation Spas: Sleep deprivation is a major health issue which means little or no sleep. The main cause for sleep deprivation is stress, however lifestyle, health complications, medication side effects and clinical disorders are some of the other causes that contribute to the growing number of sleep deprived patients. Tiredness affects our daily activities on a regular basis. Today there are many spas that are offering treatments and programmes to actively promote sleep health for their clients. These programmes not only help the clients to get sleep during their stay at the spa but it helps them to develop healthy sleep habits even when they return home. Certain spas also offer post treatment relaxation rooms where clients are encouraged to have a twenty minute nap after a massage therapy. There are other sleep programmes that are guided by physicians along with Cognitive Behavioral Therapy. Some spas try to induce sleep in their clients with aromatherapy, feather beds, meditation / breathing CDs etc. 12. Organic Spa: There are many spa that are planting their own organic gardens, such as the likes of local farms in the front yard, it also helps the spa clients to enjoy, meditate, and relax in the natural atmosphere of the garden. Eating healthy a trend, but moreover a lifestyle change as well. Spas offer a new genre of recipes focusing on fresh, local, and organic ingredients. 13. Green spa: A green spa is a systematic planning of business keeping the safety the environment in mind. The main focus of a green spa is to educate the people about the direct impact of the environment on health. Spas are a leading industry today. The green environment thought is very conducive to the spa environment because of the utilization environmental resources, such as water, essential oils. healthy seasonal foods etc. A green spa is place where people go to detoxify, relax and of course reduce stress. a green spa also takes the opportunity to advise people on how to recycle water, paper, plastic, aluminum and glass along with many other environment related issues. Do keep mind that natural treatments are gentler and help ensure long-term health and beauty Major trends in the world of spas Spa Finder has compiled a listing of the top ten spa trends, covering everything from detoxing at spas to the rise of green spas. 1) Healthy Sleep At The Spa Healthy sleep joins exercise, nutrition and stress management at the spa. Hotels and resorts will put greater emphasis on creating ideal sleep environments through minimal light and sound, aromatherapy, and ultra-relaxing spa treatments. At destination spas, sleep specialists will help educate, diagnose and treat sleep apnea, insomnia and other disorders. 2) Detox At The Spa As the culture continues to identify more "toxins" - such as dietary no-no's, stress, and environmental pollution - look for more people to turn to spas for a range of detox solutions, including relaxation, all-organic diets, sweating (exercise, steams and saunas), and the purging of emotional baggage through one-on-one or group therapy work. 435 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

437 3) Spa Retreats At Resort Spas For years destination spas have offered "specialty weeks" in yoga, sexual health, or medical concerns such as arthritis or quitting smoking. Now resorts and hotels are getting into the retreat business, adding specialty programs or special accommodations that appeal to their past guests. 4) Medical Tourism - In Search of Affordable Health Americans are going online and discovering global destinations that offer cutting-edge medical procedures for a fraction of the cost... often in beautiful, culturally rich locales like Bangkok, South Africa and India. Many hotel and resort spas recognize the new opportunity that medical tourism presents and market themselves as ideal pre- and post-operation stays. 5) Move into a Spa Lifestyle Community...and Bring the Kids Recognizing the growing priority among parents on raising their children in an active, healthful, communal environment (and avoiding the growing problems of childhood obesity and diabetes), more spa lifestyle communities will offer structured outdoor/exercise activities and healthy eating options just for children. 6) The Bottom Line Becomes a Top-Line Consideration More spa trends in the New Year will be driven by the bottom line. Look for more destaffed spa treatments or experiences like the Kuyum at Ojai Valley Inn & Spa, where same-sex groups of eight slather themselves with mud in a heated room and experience a guided meditation with a pre-recorded voice. 7) Social Spa-ing For hundreds of years, "taking the waters" had been a social event, but more recently hydrotherapy have become solo undertakings. Spa Finder predicts the search for spa solitude will be trumped by the natural desire for community and a growing awareness that social interaction is an important aspect of health. 8) How Green Is My Spa? Consumers are now factoring in a spa's green commitment when they choose a spa, and they're looking for a spa that does more than just recycle and offer organic food. Both spas and spa consumers are getting serious about terms like "natural," "organic," "holistic," "green," "eco-friendly," and "sustainable." 9) Beauty Inside-Out and Outside-In The spa industry will continue to lead innovation in skincare with new technologies and programs that recognize that beauty is much more than skin deep. Consumers will become more aware of anti-aging foods rich in antioxidants - such as berries, dark green leafy vegetables, salmon, and nuts - as well as a new generation of clinically enhanced skincare products. 10) Spa Fusion Look for more combined modalities that are even more beneficial than the sum of their parts, such as Thai massage (a fusion of yoga stretches and massage), Watsu (water and shiatsu) and yogalates (yoga and Pilates). Based on our body requirement you can choose from the variety of spa available in the market nowadays. This is the best way to rejuvenate your body and mind to face the hurdles in your everyday life easily. Our health is our wealth so it is important to adopt appropriate measures to maintain it. Benefits: A career in this emerging industry has many advantages to offer like good pay packages, quick career growth, opportunities for working abroad and a pleasant, stress free work environment. A course in spa therapy will familiarize you with the basic physiology and anatomy of the human body. It will help you understand different body forms and identify imperfections. Moreover, you will learn about the various types of massage and spa therapies as well as about the specific health conditions that can be rectified or healed through massage etc. Besides learning how to treat cellulite you will learn how to administer heat therapy, body wraps, mud wraps, body polishes and salt exfoliation. You ll gain expertise in trigger movements, pettissage, effleurage, tapping and sensory massage hydro and stone therapy, Swedish massage techniques, reflexology, muscle stimulation, remedial exercises and different techniques of massage, aromatherapy. The basics of sanitation and sterilization are also covered in these programmes. Moreover you will learn about Spa Cuisines, latest trends, spa menu and will definitely be get known to hotel and resort industry. 436 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

438 A Wellness concerned person should have Professional Attitude Calm under Pressure Personal Hygiene/Grooming Warm & Open Personality Time Management Desire to serve. Career Opportunities Individuals with specialized training and education in Health, Spa & Resort Management can expect a variety of career options and levels of leadership available to them in the industry, either directly working in a spa or working for an industry vendor or support service company. Typically, graduates of the Spa Manager/Director program move into roles in the industry such as: Assistant Team Leader Assistant Spa Manager Spa Coordinator Spa Software Trainer Spa Manager Spa Director Assistant General Manager Spa Manager Fitness manager Yoga Instructor Resort Manager Resort Supervisor Hotel or Resort operations director Event Planner Housekeeping manager According to various reports, the industry stands at around INR 1,500crores and is fast growing at around percent annually. And definitely will have bright future ahead as wellness industry in growing in every sector whether its education, health, spa, hospitality etc. Asia spa India Awards 2011 Best Day Spa Sohum Spa & Wellness Sanctuary, Mumbai Best Spalon Crème Spa & Salon, Delhi Best Hotel Spa The Oberoi Spa, The Oberai, Mumbai Best Destination Spa Ananda in the Himalayas Best Resort Spa Park Hyatt Goa Resort & Spa Best Eco Spa Rejuve the Spa, The Lalit Resort & Spa, Bekal Best New Spa (Hotel) Jiva Spa, Taj Falaknuma Palace, Hyderabad, The Imperial Spa & Salon, New Delhi Best New Spa (Day) Ora Regenesis Spa, Pune Best New Spa (Resort) Emerge Spa, The Windflower Resort & Spa, Pondicherry Best Ayurvedic Spa Birla Kerala Vaidyashala, Andheri, Mumbai Best Medi Spa Leo Juventa Centre for Integrated Medicine, Hyderabad Most Luxurious Spa (Hotel) - Kaya Kalp The Royal Spa, ITC Mughal, Agra Most Luxurious Spa (Day) - Amatrra Spa, Ashoka Hotel, Delhi Best Spa Product Soundarya Age Defying Facial Serum by Forest Essentials Best Spa Product (Men) Manspace by Comfort Zone Best Spa Interiors (Hotel & Resort) Aura Spa, The Park, Hyderabad Best Spa Interiors (Day) Amohaa Spa & Salon, Mumbai 437 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

439 Most Innovative Spa Treatment Soul Balancing, Aura Spa, The Park, New Delhi Most Luxurious Spa (Resort) The Oberoi Spa, Udaivilas, Udaipur Spa Manager of the Year Ms. Puja Bhasin, The Leela Kempinski, Gurgaon Spa Therapist Of Year Ms. Dewi Suparwati, Asian Roots Best Marketing (Hotel & Day) Three Graces, Delhi Most Luxurious Spa Treatment The Surajkund Ritual, The Claridges Surajkund, Mumtaz s Journey, ITC Mughal, Agra Spa Diva 2011 Sonakshi Sinha Spa Personality 2011 Dr. Jyotsana Suri Wellness Icon 2011 Abhinav Bindra Asia Spa India is India's only wellness & lifestyle magazines that caters to the urban professional prolific spender who is a global traveler and likes to be updated on latest luxury and wellness lifestyle trends. Wellness today is the fastest growing industry segment and asiaspa India has found a very high level of acceptability with the affluent Indian. 438 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

440 PRESENT SCENARIO OF MEDICAL TOURISM IN INDIA Medical tourism (also called medical travel, health tourism or global healthcare) is a term used to describe the rapidly-growing practice of travelling across international borders to seek healthcare services. Services typically sought by travelers include elective procedures as well as complex surgeries, etc. In India, medical tourism is a new untapped growing sector in India, valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year. The number of medical tourists is anticipated to grow at a CAGR of over 19 per cent to reach 1.3 million by India s medical tourism sector is expected to experience an annual growth rate of 30%, making it a $2 billion industry by As medical treatment costs in the developed world balloon - with the United States leading the way - more and more Westerners are finding the prospect of international travel for medical care increasingly appealing. An estimated 150,000 of these travel to India for low-priced healthcare procedures every year. According to estimates, India s share in the global medical tourism industry will reach around 3 per cent by the end of The growth of medical tourism industry is marked globally, encompassing around 50 countries in all continents. Asia itself generates revenues in billions and consists of 12.7 per cent of the global market. The major healthcare players in India such as Apollo and Fortis have reported 10 per cent of their revenue coming from the medical tourism segment. Advantages for medical tourists include reduced costs, the availability of latest medical technologies, and a growing compliance on international quality standards, as well as the fact that foreigners are less likely to face a language barrier in India. The Indian government is taking steps to address infrastructure issues that hinder the country's growth in medical tourism. Indian nurses are among the best in the world. Nearly 1000 recognized nurses-training centers in India, mostly attached to teaching hospitals, graduate nearly 10,000 nurses annually. Most estimates claim treatment costs in India start at around a tenth of the price of comparable treatment in America or Britain. The most popular treatments sought in India by medical tourists are alternative medicine, bone-marrow transplant, cardiac bypass, eye surgery and hip replacement. India is known in particular for heart surgery, hip resurfacing and other areas of advanced medicine. A rate chart comparing costs of different procedures could make it clear as to why India could utilise its edge in weaning away a large share of tourists from other destinations. A coronary artery bypass graft that could cost $70, ,000 in the US and between $16,000-22,000 in other medical tourism hotspots like Thailand and Singapore, costs about $7,000 in India, according to Indian Medical Value Travel Association. A bypass surgery with heart valve replacement that costs $75, ,000 in the US and between $ in Thailand and Singapore is done in India at $9,500. Similarly, a hip or knee replacement that can set you back in the US by $30,000 to $55,000 and can cost between $9000 to $12,700 in Thailand and Singapore would only cost $7200 in India. Even cosmetic surgeries, such as a facelift, for which customers have to shell out anywhere between $10,000 to $16,000 in the US, $7500 in Singapore and $5000 in Thailand, costs just $4800 in India. Even then compared to the Southeast Asian countries, India has not been a runaway success in medical tourism yet. Head of a corporate hospital explains that value is just one variable a medical tourist considers while firming up a decision. The entire infrastructure in these (Southeast Asian) economies is customised to give a pleasant experience to the medical tourist, from the point he lands till he leaves. They have also been marketed for very long as medical and wellness tourism destinations. That is not the case in India, where hospitals are operating as 'islands of excellence' and the supporting infrastructure around it is often poor, he said. Also India hopped into the race to lure in medical tourists very late and the segment is still picking up. Contemporary and state of the art infrastructure, high end technological support, and excellent quality of health care, make India, an alluring Medical Trip destination, chiefly for patients in the U.K., and U.S., where health care costs are exceedingly steep. Coming to India for a Medical Trip helps save a significant amount of money, sometimes to the tune of 50 % to 70 %. Importantly, low cost of medical care, in no way indicates substandard or poor quality. Indian hospitals provide first-class services and facilities. Also, Medical Travel to India, helps to do away with the long waiting lines that patients experience in their home country, and thus, assists them in gaining easy access to timely medical care. 439 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

441 India could be hosting 24 lakh medical tourists by 2020, almost four times the number it catered to in And that s not all. The figure is projected to rise to 49 lakh tourists by 2025, according to an estimate by Technopak. (Technopak has been a trusted advisor for over two decades and the segments served encompass a broad range of business organizations which belong to diverse sectors such as Retail & Consumer Products, Healthcare, Fashion (Textile & Apparel), Food and Agriculture and Education. This rich experience in varied fields has rewarded Technopak with 70% projects involving our former clientele. ) In the national capital region (NCR) alone, the three largest hospital chains, Apollo Hospitals, Fortis Healthcare and Max Healthcare attended to 15,500 foreign patients in Of this, a quarter or more of the tourists who visited Fortis and Max came from West Asia while Apollo derived one-fifth of the traffic from this region. Africa accounts for 32% of Max s medical tourists, 15% of Fortis and a fifth of Apollo s share of medical tourists. Neighbouring Saarc countries account for 40% of Fortis, 25% of Apollo s and 18% of Max s traffic of medical tourists. The United States, Europe and other countries accounts for only one fifth of the total patient pool for all the three hospital groups. Acknowledging Asia as the biggest gainer of global medical value travel, Technopak analysts identify two large drivers that could spur the projected growth. The presence and expansion of multiple well-established corporate organisations (hospital groups), and India's unique position to embrace Ayurveda and alternative medicine as it adopts a more holistic approach towards healthcare delivery could attract more wellness tourists, different from those who come here for core surgeries mainly in the areas of cardiac or other general procedures. The medical tourism industry in India has a potential to contribute around 25 per cent in the country's GDP (gross domestic product) over the next five years if the potential will be fully-tapped, according to Varsha Lafargue, founder and chairperson of Indian Medical Tourism Conference and Alliance (IMTCA). "Currently, the medical tourism sector is highly unorganised, where only a handful of hospitals and doctors are reaping benefits. Given the existing infrastructure, highly skilled doctors and medical professionals and lowcost health services, if the potential will be fully tapped, the sector may see a five-fold increase in its contribution to GDP from the current less than five per cent contribution," she said. Medical tourism boom is happening in other Asian countries including Malaysia, Singapore and Thailand, whereas India is losing out to its competitors due to many factors. The sector faces with shortcomings such as - no transparency in billing system, low patient flow, no common platform available to promote country's medical tourism as a whole, inadequate and limited patient documentation, etc, she said. She pointed out that medical tourism has become a major source of national income in many countries such as Israel and Jordan, where Jordan gets 5 per cent of its GDP from medical tourism and Israel gets in a doubledigit number. Ministry of Tourism has initiated several measures to promote Medical Tourism. This includes promotion and overseas markets and production of publicity materials like brochure, CD and films etc. and their distribution in target markets. Under the Market Development Scheme of Ministry of Tourism financial support is provided only to approved Medical Tourism Service Providers, i.e. representatives of hospitals accredited by Joint Commission International (JCI) and National Accreditation Board for Hospitals and Healthcare Providers (NABH) and Medical Tourism facilitators (Travel Agents/Tour Operators) approved by Ministry of Tourism, Government of India and engaged in Medical Tourism subject to adherence to scheme guidelines and availability of funds. The Medical Tourism activity is mainly driven by private sector. The Ministry of Tourism only plays the role of facilitator in terms of marketing and promoting this in key markets. 440 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

442 References: Source: 441 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H

443 442 I T F T E D U C A T I I O N G R O U P - C H A N D I G A R H