The ‘Of growth & missed opportunity What 5% / 6.5% / 9% GDP growth will mean for India in the next 5 years’ report takes a close look at possible growth scenarios over the next five years, the how and the why of the economic slowdown, its implications on social objectives and the opportunity loss for India Inc.

1. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.

2. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Road Ahead (2014-15 to 2018-19)
2
Growth possibilities
 1 in 2 chance of 6.5% GDP growth during 2004-05 to 2018-19
 A decisive election mandate that speeds up the reform process and improves
business confidence
 Improvement in investment efficiency critical to drive growth up
 30% chance of growth being stuck at 5%
 20% chance of GDP growth above 6.5%
At 9% growth India would have seen
 Higher consumption demand
 Lower Poverty
 Higher Job creation
The report quantifies these gains due to higher growth

3. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Source: Crisil Research
3

4. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Why we expect growth to be at 6.5%?
Note: ICOR- Incremental Capital output ratio is calculated as the ratio of fixed investments to incremental GDP at factor cost,
F-Forecast
Source: Crisil Research
4
1995-2003 2004-11 2012-14 2015F-19F
Real GDP growth (y-o-y%) 6.0 8.5 5.3 6.5
TFP growth (y-o-y%) 2.4 4.0 0.4 2.1
ICOR 4.9 4.4 7.4 5.5
GFCF growth (y-o-y%) 7.6 12.9 4.4 5.5

5. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Productivity improvement to drive growth
Source: CSO, Crisil Research
5
Incremental Capital Output Ratio
4.9
4.4
7.4
5.5
1994-95 to 2002-03 High growth (2003-04 to
2010-11)
Slowdown (2011-12 to
2013-14)
Next 5 years (2014-15F to
2018-19F)
2.1
3.2 3.2 2.5
1.5
1.2 1.7
1.8
2.5
4.0
0.4 2.2
6.0
8.5
5.3
6.5
1994-95 to 2002-03 High growth (2003-04 to
2010-11)
Slowdown (2011-12 to
2013-14)
Next 5 years (2014-15F to
2018-19F)
Capital stock Labour Productivity GDP growth

6. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Gains with higher growth in Cement & Steel
Source: Crisil Research
6
479 437 414
9% 6.5% 5%
1467
1342 1309
9% 6.5% 5%

7. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Sales at alternative growth scenarios in Automobiles
Source: Crisil Research
7
18.5
16.5
14.5
9% 6.5% 5%

8. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Missed Opportunity in Poverty reduction
Source: Crisil Research
8

9. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
Gains in employment as growth increases
Source: Crisil Research, NSSO
9

10. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
10
About us
CRISIL Limited
CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are
also the foremost provider of high-end research to the world's largest banks and leading corporations.
CRISIL Research
CRISIL Research is India's largest independent and integrated research house. We provide insights, opinions, and analysis on the Indian economy,
industries, capital markets and companies. We are India's most credible provider of economy and industry research. Our industry research covers 70
sectors and is known for its rich insights and perspectives. Our analysis is supported by inputs from our network of more than 4,500 primary sources,
including industry experts, industry associations, and trade channels. We play a key role in India's fixed income markets. We are India's largest provider of
valuations of fixed income securities, serving the mutual fund, insurance, and banking industries. We are the sole provider of debt and hybrid indices to
India's mutual fund and life insurance industries. We pioneered independent equity research in India, and are today India's largest independent equity
research house. Our defining trait is the ability to convert information and data into expert judgements and forecasts with complete objectivity. We leverage
our deep understanding of the macroeconomy and our extensive sector coverage to provide unique insights on micro-macro and cross-sectoral linkages.
We deliver our research through an innovative web-based research platform. Our talent pool comprises economists, sector experts, company analysts,
and information management specialists.
CRISIL Privacy Notice
CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfill your request and service your account
and to provide you with additional information from CRISIL and other parts of The McGraw-Hill Companies, Inc. you may find of interest.
For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view
McGraw-Hill’s Customer Privacy Policy at http://www.mcgrawhill.com/site/tools/privacy/privacy_english.
Last updated: May, 2013
Disclaimer
CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this Report based on the information obtained by
CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data /
Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to
invest / disinvest in any company covered in the Report. CRISIL especially states that it has no financial liability whatsoever to the subscribers/ users/
transmitters/ distributors of this Report. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s
Ratings Division / CRISIL Risk and Infrastructure Solutions Limited (CRIS), which may, in their regular operations, obtain information of a confidential
nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be
published / reproduced in any form without CRISIL’s prior written approval.

11. ForInternalUseOnly–NotForExternalDistribution©2013CRISILLtd.Allrightsreserved.
CRISIL Limited
www.crisil.com
www.standardandpoors.com
CRISIL Limited
www.crisil.com