SECTOR: FMCG

INTRODUCTION

Fast-moving consumer goods (FMCG) sector is India’s fourth largest sector with household
and personal care accounting for 50 per cent of FMCG sales in India. However, in the last few
years, the FMCG market has grown at a faster pace in rural India compared to urban India.
Semi-urban and rural segments are growing at a rapid pace and FMCG products account for
50 per cent of the total rural spending.

Some of the recent developments in the FMCG sector are as follows:

 In March 2020, Venture Catalysts made an investment in OM Bhakti, an organised brand in the puja
cotton-wicks market during its seed-funding round.

 In November 2019, ITC Ltd acquired 33.42 per cent stake in Delectable Technologies, which is a
vending machine start-up.

 Nestle plans to invest Rs 700 crore (US$ 100.16 million) to open a new plant in Sanand for Maggi.

 ITC to invest Rs 700 crore (US$ 100 million) in food park in Madhya Pradesh.

 Patanjali will spend US$743.72 million in various food parks in Maharashtra, Madhya Pradesh, Assam,
Andhra Pradesh and Uttar Pradesh.

Government Initiatives

 The Government has drafted a new Consumer Protection Bill with special emphasis on setting up an
extensive mechanism to ensure simple, speedy, accessible, affordable and timely delivery of justice to
consumers.
 The Goods and Services Tax (GST) is beneficial for the FMCG industry as many of the FMCG products
such as soap, toothpaste and hair oil now come under the 18 per cent tax bracket against the
previous rate of 23-24 per cent. Also, GST on food products and hygiene products have been reduced
to 0-5 per cent and 12-18 per cent respectively.
 GST is expected to transform logistics in the FMCG sector into a modern and efficient model as all
major corporations are remodelling their operations into larger logistics and warehousing.

Road Ahead

 Rural consumption has increased, led by a combination of increasing income and higher aspiration
levels. There is an increased demand for branded products in rural India. The rural FMCG market in
India is expected to grow to US$ 220 billion by 2025 from US$ 23.6 billion in FY18.
 On the other hand, with the share of unorganised market in the FMCG sector falling, the organised
sector growth is expected to rise with increased level of brand consciousness, augmented by the
growth in modern retail.

 The online FMCG market is forecast to reach US$ 45 billion in 2020 from US$ 20 billion in [Link] is
estimated that India will gain US$ 15 billion a year by implementing GST. GST and demonetisation are
expected to drive demand, both in the rural and urban areas, and economic growth in a structured
manner in the long term and improved performance of companies within the sector.
Growing awareness, easier access, and changing lifestyle are the key growth drivers for the consumer market.
The focus on agriculture, MSMEs, education, healthcare, infrastructure and tax rebate under Union Budget
2019-20 was expected to directly impact the FMCG sector. Initiatives undertaken to increase the disposable
income in the hands of common man, especially from rural areas, will be beneficial for the sector.

Overview as per the mission on FMCG Sector:-

AtmaNirbhar Bharat has been called by some as a re-packaged version of the Make in India movement using
new taglines such as 'Vocal for Local’. Other opposition members spoke about how India had enacted policies
and built companies since its creation to make India self-reliant - SAIL for steel production, IITs for domestic
engineers, AIIMS for medical science, DRDO for Defence research, HAL for aviation, ISRO for space, CCL NTPC
and GAIL in the area of energy; criticizing the advertising tactics. Some have re-phrased it to "Fend for
Yourself" Campaign. Also, the calls for India to boycott Chinese products (and promote an AtmaNirbhar Bharat
instead), are practically difficult in the short term for India as India imports $75 billion worth of goods every
year from China, to the extent that parts of Indian industry are dependent on China. Following the Galwan
Valley skirmish on 15 June 2020 in which 20 Indian soldiers died, Swedish Jagran Manch said that if the
government was serious about making India self-reliant, Chinese companies should not be given projects such
as the Delhi-Meerut RRTS.

Measures for Businesses

Financial Highlights

Collateral free loans for businesses: 

All businesses (including MSMEs) will be provided with collateral free automatic loans of up to three lakh crore
rupees.  MSMEs can borrow up to 20% of their entire outstanding credit as on February 29, 2020 from banks
and Non-Banking Financial Companies (NBFCs).  Borrowers with up to Rs 25 crore outstanding and Rs 100
crore turnover will be eligible for such loans and can avail the scheme till October 31, 2020.   Interest on the
loan will be capped and 100% credit guarantee on principal and interest will be given to banks and NBFCs.

Corpus for MSMEs: 

A fund of funds with a corpus of Rs 10,000 crore will be set up for MSMEs.   This will provide equity funding for
MSMEs with growth potential and viability.  Rs 50,000 crore is expected to be leveraged through this fund
structure.

This scheme aims to support to stress MSMEs which have Non-Performing Assets (NPAs).   Under the scheme,
promoters of MSMEs will be given debt from banks, which will be infused into the MSMEs as equity.   The
government will facilitate Rs 20,000 crore of subordinate debt to MSMEs.  For this purpose, it will provide Rs
4,000 crore to the Credit Guarantee Fund Trust for Micro and Small Enterprises, which will provide partial
credit guarantee support to banks providing credit under the scheme.

AtmaNirbhar Bharat Abhiyan: Challenges/ Impact of this Stimulus Package

Primary Sector: 

The measures (reforms to amend ECA, APMC, Contract framing, etc.) announced for the agricultural and allied
sectors are particularly transformative.
These reforms are steps towards the One Nation One Market objective and help India become the food factory
of the world.
These would finally help in achieving the goal of a self-sustainable rural economy.
Also, the MGNREGA infusion of Rs 40,000 crore may help in alleviating the distress of migrants when they
return to their villages.
Secondary Sector: 

Given the importance of MSMEs for Indian economy, the Rs 3 lakh crore collateral-free loan facility for MSMEs
under the package will help this finance-starved sector and thereby provide a kick start to the dismal state of
the economy.
Also, as the MSME sector is the second largest employment generating sector in India, this step will help to
sustain the labourintensive industries and thereby help in leveraging India’s comparative advantage.
Additionally, limiting imports of weapons and increasing the limit of foreign direct investment in Defence from
49% to 74% will give a much-needed boost to the production in the Ordnance Factory Board, while reducing
India’s huge Defence import bill.

Tertiary Sector: 

The government has adopted a balanced approach in addressing concerns across sectors. For example: The
newly launched PM e-Vidya programme for multi-mode access to digital online education provides a uniform
learning platform for the whole nation, which shall enable schools and universities to stream courses online

without further loss of teaching hours. Public expenditure on health will be increased by investing in grass root
health institutions and ramping up health and wellness centers in rural and urban areas.

MICROECONOMIC TOOLS BENEFICIAL IN FMCG SECTOR FOR SELF-RELIANT INDIA

 Rising income and growing youth population have been key growth drivers of the sector. Brand
consciousness has also aided demand.
 India’s contribution to global consumption is expected to more than double to 5.8 per cent by 2020.
 Rural India is witnessing increased demand for quality goods and services driven by upgraded
distribution channels of FMCG companies.
 Rural segment is growing at a rapid pace and accounted for a revenue share of 45 per cent in the
overall revenues recorded by FMCG sector in India.
 FMCG products account for 50 per cent of total rural spending.
 Demand for quality goods and services is on an upward trajectory in rural areas on the back of
improved distribution channels of manufacturing and FMCG companies.
 Availability of products has become way easier as internet and different channels of sales has made
the accessibility of desired product to customers more convenient at required time and place.
 Online grocery stores and online retail stores like Grofers, Flipkart, and Amazon are making FMCG
products more readily available.
 Rural consumption has increased, led by a combination of increase in income and higher aspiration
levels. There is an increased demand for branded products in rural India.
 Agriculture Sector

Overview:
The task of achieving self-reliance and self-sustainability in agriculture is easier and more cost-efficient
compared with other sectors of the economy. The first set of measures rely on branding of local farm products
to be sold globally, the branding helping to tide over price spirals and making farmers quality-conscious.

A branded quality product has the potential to increase India’s post Covid global export share beyond 2%, and
aid rural prosperity. This Mission Swadeshi 2.0 must include standardisation and promotion of indigenous
technology knowledge (ITK) in agriculture, where techniques are dependent on local resources in dealing with
nutrition, disease and pests. These are the sort of rural innovations that need to be registered at a national-
level innovation registry, which, in turn, can help in the filing of patents and get micro-venture capital support
for enterprises.

Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added
(GVA) by agriculture, forestry and fishing was estimated at Rs 19.48 lakh crore (US$ 276.37 billion) in FY20(PE).
Growth in GVA in agriculture and allied sectors stood at 4 per cent in FY20.
 The Indian food industry is poised for huge growth, increasing its contribution to world food trade
every year due to its immense potential for value addition, particularly within the food processing
industry. Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per
cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total
food market, one of the largest industries in India and is ranked fifth in terms of production,
consumption, export and expected growth.

Opportunities:

1. It is the right time to establish an Agricultural Development Council (ADC) on the lines of the GST
Council so as to accelerate the pace of reforms to enhance land leasing, private investment,
agricultural R&D, etc. With more than 50% population directly or indirectly dependent on agriculture
and allied industries, it is essential that big ticket reforms reach these people as we head into a period
where we run a vibrant economy adapting to Covid-19 conditions.
2. Primary Sector: The measures (reforms to amend ECA, APMC, Contract framing, etc) announced for
the agricultural and allied sectors are particularly transformative.
These reforms are steps towards the One Nation One Market objective and help India become
the food factory of the world. These would finally help in achieving the goal of a self-sustainable rural
economy. Also, the MGNREGA infusion of Rs 40,000 crore may help in alleviating the distress of
migrants when they return to their villages.

Investments
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian food processing
industry has cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 9.98 billion
between April 2000 and March 2020.
Some major investments and developments in agriculture are as follows:

 In March 2020, Fact, the oldest large-scale fertiliser manufacturer in the country, crossed one million
production and sales mark.
 Nestle India will invest Rs 700 crore (US$ 100.16 million) in construction of its ninth factory in Gujarat.
 In November 2019, Haldiram entered into an agreement for Amazon's global selling program to E-tail
its delicacies in the United States.
  In November 2019, Coca-Cola launched ‘Rani Float’ fruit juices to step out of its trademark fizzy
drinks.
 Two diagnostic kits developed by Indian Council of Agricultural Research (ICAR) - Indian Veterinary
Research Institute (IVRI) and the Japanese Encephalitis lgM ELISA were launched in October 2019.
 Investment worth Rs 8,500 crore (US$ 1.19 billion) have been announced in India for ethanol
production.

 
Government Initiatives
Some of the recent major Government initiatives in the sector are as follows:
 In May 2020, Government announced the launch of animal husbandry infrastructure development
fund of Rs 15,000 crore (US$ 2.13 billion).
 In September 2019, Prime Minister, Mr NarendraModi launched National Animal Disease Control
Programme (NADCP), expected to eradicate foot and mouth disease (FMD) and brucellosis in
livestock. In May 2020, Rs 13,343 crore (US$ 1.89 billion) was allocated to the scheme.
 In May 2019, NABARD announced an investment of Rs 700 crore (US$ 100 million) venture capital
fund for equity investment in agriculture and rural-focused start-ups
 Under Union Budget 2019-20, Pradhan MantriSammanNidhiYojana was introduced where a minimum
fixed pension of Rs 3000 (US$ 42.92) was to be provided to the eligible small and marginal farmers,
subject to certain exclusion clauses, on attaining the age of 60 years.
 The Government of India came out with Transport and Marketing Assistance (TMA) scheme to
provide financial assistance for transport and marketing of agriculture products in order to boost
agriculture exports.
 The Agriculture Export Policy, 2018 was approved by the Government of India in December 2018. The
new policy aimed to increase India’s agricultural export to US$ 60 billion by 2022 and US$ 100 billion
in the next few years with a stable trade policy regime.
 The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for computerization
of Primary Agricultural Credit Society (PACS) to ensure cooperatives are benefitted through digital
technology.
 The Government of India launched the Pradhan MantriKrishiSinchaiYojana (PMKSY) with an
investment of Rs 50,000 crore (US$ 7.7 billion) aimed at development of irrigation sources for
providing a permanent solution from drought.
 Government plans to triple the capacity of food processing sector in India from the current 10 per
cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38 billion) as investments
for mega food parks in the country, as a part of the Scheme for Agro-Marine Processing and
Development of Agro-Processing Clusters (SAMPADA).
 The Government of India has allowed 100 per cent FDI in marketing of food products and in food
product E-commerce under the automatic route.

Achievements in the sector

 The Electronic National Agriculture Market (e-NAM) was launched in April 2016 to create a unified
national market for agricultural commodities by networking existing APMCs.
 It had 16.6 million farmers and 131,000 traders registered on its platform until May 2020.
 Over 1,000 mandis in India are already linked to e-NAM and 22,000 additional mandis are expected to
be linked by 2021-22.
 Sale of tractors in the country stood at 804,000 units in 2019 with export of 80,475 units.
 During FY20 (till February 2020), tea export stood at US$ 709.28 million.
 Coffee export stood at US$ 742.05 million in FY20.

Market Size
During 2019-20* crop year, food grain production was estimated to reach a record 295.67 million tonnes (MT).
In 2020-21, Government of India is targeting food grain production of 298 MT.
Production of horticulture crops in India was estimated at a record 320.48 million metric tonnes (MMT) in FY20
as per second advance estimates. India has the largest livestock population of around 535.78 million, which
translates to around 31 per cent of the world population. Milk production in the country is expected to
increase to 208 MT in FY21 from 198 MT in FY20, registering a growth of 10 per cent y-o-y.
Sugar production in India reached 26.46 MT between October 2019 and May 2020 sugar season according to
Indian Sugar Mills Association (ISMA).
India is among the 15 leading exporters of agricultural products in the world. Agricultural export from India
reached US$ 38.54 billion in FY19 and US$ 28.93 billion in FY20 (till January 2020).
The organic food segment in India is expected to grow at a CAGR of 10 per cent during 2015-25 and is
estimated to reach Rs 75,000 crore (US$ 10.73 billion) by 2025 from Rs 2,700 crore (US$ 386.32 million) in
2015.

Road Ahead

India is expected to achieve the ambitious goal of doubling farm income by 2022. The agriculture sector in
India is expected to generate better momentum in the next few years due to increased investment in
agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Furthermore, the growing
use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-
sufficient in pulses in the coming few years due to concerted effort of scientists to get early maturing varieties
of pulses and the increase in minimum support price.

Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality
Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good
Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing
industry will offer several benefits. The agri export from India is likely to reach the target of US$ 60 billion by
the year 2022.
MSMEs Sector

Introduction
The global pandemic shows us the benefits of ‘Be Indian and Buy Indian’. We have now become critically
aware of our own supply chain. We know that relying on other countries for critical items will ultimately put
you at their mercy. To avoid
such adversity for ourselves, it is more important than ever that we become self-reliant and reduce our
dependence on other countries. The pandemic has taught the importance of local manufacturing, local market
and local supply chain. Emphasis of ‘vocal for local’ asserts that it is all about ‘made in India’ and is to increase
to push Indian products to become large enough to become international [Link] plans to convert COVID
crisis into an opportunity and strengthen its fight by becoming [Link] is time to become vocal for local
products and make them global.
Under this campaign, a special economic package worth 20 Lakh cr. has been released by the government,
which will benefit cottage industry, Micro, Small and Medium Enterprises (MSMEs), labourers, middle class,
and industries. To strengthen the self-reliant India campaign Land, Labour, Liquidity and Laws have all been
emphasized in this package.
The MSME (micro, small and medium enterprise) sector in India can play a significant role in achieving the
vision of self-reliant India supported by a three-pronged strategy.
The outbreak of the pandemic will make countries do a rethink on strengthening their local supply chains.
India has already stated a vision of ‘Atmanirbhar Bharat’ or a self-reliant India, which will need strengthening
of the local industries and their standing on a global stage.

Three key parameters that are vital for the success of MSMEs include financial stability, availability of skilled

labour in MSME clusters, and market competitiveness of their products to achieve import substitution as

well as exports.
More than 99% of the MSMEs are Micro Enterprises 
As per the estimates of National Sample Survey, there are a total of 6.33 crore MSMEs in India as of 2015-16. 
Of these, 3.24 crores are in Rural areas and 3.09 crores in urban areas.  More than 99 % i.e. around 6.31 crores
of MSMEs are Micro Enterprises. There are estimated to be around 3.31 lakh Small scale enterprises and 0.05
lakh medium scale enterprises. 

The highest number of MSMEs were engaged in Trade related activities with 235.3 lakh of which 121.64 lakhs
are in Urban areas and the rest in Rural. A total of 206.85 lakh MSMEs are engaged in ‘Other Services’ while
196.65 lakh enterprises are engaged in Manufacturing activity. Among the MSMEs in Manufacturing sector,
majority of them are in Rural areas with 114.14 lakh MSMESs and 82.5 lakh in Urban areas. 
  79.63% of the MSMEs are under Male ownership. 
 Rural MSMEs have a better ratio of Female ownership with 22.24% while it is 18.42% among Urban
MSMEs. 
 Micro Enterprises have 20.44% female ownership while it is comparatively  lower in the case of Small
and Medium enterprises with 5.26% and 2.67% respectively. 

Further, in the earlier definition, only the investment was considered as a criterion. As per the new definition,
even turnover is included for classification of MSMEs. This is based on an Expert committee report of RBI,
which recommended the use of turnover as criteria instead of investment. 
The 294th Report of the Parliamentary Standing Committee on Industry, on MSME Development Bill, 2018
suggested the inclusion of ‘Number of employees’ also for the classification, which was not considered. In
many of the developed economies, the classification of MSMEs is made on the basis of number of employees
as one of the criteria. 

Change in definition could result in inclusion of many enterprises under MSMEs 

The change in definition of MSMEs will have an impact on the enterprises currently classified under different
categories of MSMEs as well result in inclusion of new enterprises. 

 Many of the enterprises which are currently classified as Small would now be categorized as Micro as
per new definition. This could further increase the number of Micro enterprises, which already account
for more than 99% of the current MSMEs. The programs and schemes related to MSMEs need to be
allocated more funds in line with the increase in numbers. 
 As per the existing definition, there are many enterprises which are not included under the gambit of
MSMEs. With the upper limit of Medium scale enterprises raised to ₹ 50 crores, there would be many
enterprises that will be included under MSMEs. As in the case of increase in Micro enterprises, this
would entail increase in the budgetary allocation of various schemes in place for MSMEs. 
Therefore, the re-classification as per the new definition could substantially increase the number of MSMEs
and budgetary allocation under various schemes related to MSMEs.

Relief measures announced to support MSME in wake of COVID-19 lockdown

As highlighted earlier in the story, MSMEs account for nearly 31.8% of the total GVA and nearly 29% of the
total GDP in 2016-17. As per National Sample Survey, it provides employment for more than 11 crores
people.  

The numbers indicate their influential role in the functioning of the economy. However, the lockdown due to
COVID-19 had a severe effect on MSMEs. Recognizing this, the Government of India announced several
measures for MSMEs in the package announced recently.

The summary of the announcements made by government in relation to MSMEs are,

As highlighted earlier in the story, change of definition for classification of MSMEs is also part of the measures
announced by Government of India. 

Implementation remains the key

Aatma Nirbharata or self-reliance aims at building a self-sufficient economy across different sectors. This can
also refer to import substitution, wherein India can reduce the volume of imports and substitute with domestic
products & services. MSMEs can play a key role towards achieving these goals. Various input credit initiatives
are an announcement in the right direction. However, previous experiences show that small businesses
continue to face challenges in securing bank loans, especially with provision of collateral. There are reports,
stating that banks are reluctant to issues collateral free loans, despite guarantees from the government. 
Another challenge for MSMEs is delay in payments. Government itself is a culprit with long standing dues to be
paid out to MSMEs. While one of the recent measures announced is to clear all pending dues within 45 days, it
is still a one-time measure, assuming that the government does clear all pending dues till date.  There aren’t
any policy changes announced which would safe-guard MSMEs against any future payment delays from
government. 
It has to be noted that these payments are pending despite the presence of MSME Samadhan initiative for
delayed payments. The report of Parliament Standing Committee on Commerce and Industry- 2018 also
reveals that the actual expenditure by Government of India has been consistently less than the allocated
budgetary allocation for MSMEs. 
While the measures announced recently are in the right direction, previous experiences indicate that
implementation has been tardy and there are many gaps in execution.  Correcting these would be the key if
the intended results are to be achieved. 

Telecommunication Sector

Introducti on
India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion
and has registered strong growth in the last decade and half. The Indian mobile economy is growing rapidly
and will contribute substantially to India’s Gross Domestic Product (GDP) according to a report prepared by
GSM Association (GSMA) in collaboration with Boston Consulting Group (BCG). In 2019, India surpassed the US
to become the second largest market in terms of number of app downloads.

The liberal and reformist policies of the Government of India have been instrumental along with strong
consumer demand in the rapid growth in the Indian telecom sector. The Government has enabled easy market
access to telecom equipment and a fair and proactive regulatory framework, that has ensured availability of
telecom services to consumer at affordable prices. The deregulation of Foreign Direct Investment (FDI) norms
have made the sector one of the fastest growing and the top five employment opportunity generator in the
country.

Market Size
India ranks as the world’s second largest market in terms of total internet users. The number of internet
subscribers in the country increased at a CAGR of 45.74 per cent during FY06-FY19 to reach 636.73 million in
FY19. The internet subscribers reached 687.62 million by September 2019. Total wireless data usage in India
grew 10.58 per cent y-o-y to 19,838,886 terabytes between July-September 2019.
India is also the world’s second largest telecommunications market. It’s total telephone subscriber base and
tele-density reached 1,177.02 million and 87.45 per cent, respectively, as of January 2020.
Gross revenue of the telecom sector stood at Rs 121,527 crore (US$ 17.39 billion) in FY20 (April-September
2019).
Over the next five years, rise in mobile-phone penetration and decline in data costs will add 500 million new
internet users in India, creating opportunities for new businesses.

Investment/Major Development
With daily increasing subscriber base, there have been a lot of investment and development in the sector. FDI
inflow into the telecom sector during April 2000 – March 2020 totalled US$ 37.27 billion according to the data
released by Department for Promotion of Industry and Internal Trade (DPIIT).
Some of the developments in the recent past are:

India had over 500 million active internet users (accessed Internet in the last one month) as of May 2020.
In June 2020, Jio Platforms Ltd. sold 22.38 per cent stake worth Rs 1.04 trillion (US$ 14.75 billion) to ten global
investors in a span of eight weeks under separate deals, involving Facebook, Silver Lake, Vista, General
Atlantic, Mubadala, Abu Dhabi Investment Authority (ADIA), TPG Capital and L. Catterton. This is the largest
continuous fundraise by any company in the world.
In April 2020, Vodafone Group Plc infused Rs 1,530 crore (US$ 217.05 million) in Vodafone Idea as accelerated
payment to help the company manage its operations.
 As of January 2020, more than 542 banks were permitted to provide mobile banking services in India.
 In December 2019, Airtel disclosed its plans to invest US$ 2.86 billion in its business as part of
company’s annual target.
 As per a report by Ericsson, India has the world’s highest data usage per smartphone at an average of
9.8 GB per month.
 As of August 2019, Jio'sIoT platform was ready to be commercially available from January 2020.
 In August 2019, Reliance commercially launched JioGigaFiber as a wired broadband service.
 During Q12018, India became the world’s fastest-growing market for mobile applications.
 The country remained as the world’s fastest growing market for Google Play downloads in Q2 and Q3
of 2018.
 Bharti Airtel had plans to launch 6,000 new sites and 2,000 kms of optical fiber in Gujarat in 2018-19.
 Vodafone India and Idea Cellular merged into ‘Vodafone Idea’ to become India’s largest telecom
company in September 2018.
Government Initiatives

The Government has fast-tracked reforms in the telecom sector and continues to be proactive in providing
room for growth for telecom companies. Some of the key initiatives taken by the Government are as follows:

 In January 2020, Government of India allowed 100 per cent FDI in Bharti Airtel.
 The Government of India planned to roll out a new National Telecom Policy 2018 in lieu of rapid
technological advancement in the sector over the past few years. The policy intended to attract
investments worth US$ 100 billion in the sector by 2022.
 The Department of Information Technology intends to set up over 1 million internet-enabled common
service centres across India as per the National e-Governance Plan.
 FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per
cent, 49 per cent will be done through the automatic route and the rest will be done through the FIPB
approval route.
 FDI of up to 100 per cent is permitted for infrastructure providers offering dark fibre, electronic mail
and voice mail.
 The Government of India has introduced Digital India programme under which all the sectors such as
healthcare, retail, etc. will be connected through internet
 Education Sector

Introduction

. India holds an important place in the global education industry. India has one of the largest networks of
higher education institutions in the world. However, there is still a lot of potential for further development in
the education system.

Moreover, the aim of the Government to raise its current gross enrolment ratio to 30 per cent by 2020 will
also boost the growth of distance education in India

Market Size
India has the world’s largest population of about 500 million in the age bracket of 5-24 years, which provides a
great opportunity for the education sector. The education sector in India was estimated at US$ 91.7 billion in
FY18 and is expected to reach US$ 101.1 billion in FY19.
Number of colleges and universities in India reached 39,931 and 993, respectively, in FY19. India had 37.4
million students enrolled in higher education in FY19. Gross Enrolment Ratio in higher education reached 26.3
per cent in FY19.
The country has become the second largest market for E-learning after the US. The sector is expected to reach
US$ 1.96 billion by 2021 with around 9.5 million users.

Investments/ Recent Developments

The total amount of Foreign Direct Investment (FDI) inflow into the education sector in India stood at US$ 3.24
billion from April 2000 to March 2020 according to the data released by Department for Promotion of Industry
and Internal Trade (DPIIT).
The education and training sector in India witnessed some major investments and developments in the recent
past. Some of them are:
 In January 2020, Harappa Education raised an undisclosed amount from James Murdoch-led Lupa
Systems in a funding round.
 In February 2020, Unacademy raised US$ 110 million in Series E round from Facebook and General
Atlantic.
 In March 2020, EdTech platform Univariety raised US$ 1.1 million from Info Edge.
 In April 2020, Class Central (a free online course aka Massive Open Online Courses (MOOC)
aggregator from top universities like Stanford, MIT, Harvard, etc.) released the list of 30 best online
courses of 2019, out of which, six courses were from SWAYAM.
 In May 2020, a new mobile app called ‘National Test Abhyas’ was launched to enable candidates to
take mock tests for upcoming exams such as JEE Main and NEET under NTA’s purview.
 In May 2020, Classplus, a business-to-business (B2B) EdTech start-up, raised US$ 9 million in Series A
funding round led by early stage tech investor RTP Global.
 In August 2019, Maharashtra International Education Board (MIEB) signed a collaboration agreement
with Google for Education in India.
 In October 2019, IIT Madras reached agreement with ExxonMobil Research and Engineering Company
(EMRE) for research on Energy and Biofuels.
Government Initiatives
Some of the other major initiatives taken by the Government are:

 In May 2020, Government launched PM eVIDYA, a programme for multi-mode access to

digital/online education. Other initiatives to be launched include Manodarpan, New National
Curriculum and Pedagogical framework, National Foundational Literacy and Numeracy
Mission.
 According to Union Budget 2020-21, Government allocated Rs 59,845 crore (US$ 8.56
billion) for Department of School Education and Literacy.
 Revitalising Infrastructure and Systems in Education (RISE) by 2022 was announced in Union
Budget 2020-21 with a proposed outlay of Rs 3,000 crore (US$ 429.55 million).
 Under Union Budget 2020-21, Government proposed apprenticeship embedded
degree/diploma courses by March 2021 in about 150 higher educational institutions.
 As on February 2020, 254,897 training centers were registered in India and around 2 crore
candidates completed training under the Pradhan Mantri Gramin Digital Saksharta Abhiyan
(PMGDISHA).
 Government promoted new scheme ‘Study in India’ to bring foreign students to higher
educational institutions.
 In order to boost the Skill India Mission, two new schemes, Skills Acquisition and Knowledge
Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value
Enhancement (STRIVE), have been approved by the Cabinet Committee on Economic Affairs
(CCEA), Government of India, with an outlay of Rs 6,655 crore (US$ 1.02 billion) and will be
supported by the World Bank.
 The Ek Bharat Shreshtha Bharat (EBSB) campaign is undertaken by the Ministry of Human
Resource Development to increase engagement between states, union territories, central
ministries, educational institutions and general public.

Government Achievements
Following are the achievements of the Government
 In private equity (PE) and venture capital (VC) funding, companies in the education sector
attracted US$ 500 million by end of 2019.
 In February 2020, Indian Institute of Technology, Delhi signed a memorandum of
understanding (MoU) with New Zealand universities to establish a New Zealand Centre at
the institute with an investment of US$ 50,000 each from both parties.
 Central Board of Secondary Education (CBSE) introduced artificial intelligence as a subject in
class ninth from the session 2019-20.
 In August 2019, Maharashtra International Education Board (MIEB) signed a collaboration
agreement with Google for Education in India.
 Under the mid-day meal scheme initiated by the Government of India, about 95 million
students of around 1.14 million schools enjoy fresh meal every day.
 
Road Ahead

In 2030, it is estimated that India’s higher education will:

 combine training methods that involve online learning and games, and is expected to grow 38 per
cent in the next 2-4 years
 adopt transformative and innovative approaches in Higher education
 have an augmented Gross Enrolment Ratio (GER) of 50 per cent
 reduce state-wise, gender based and social disparity in GER to 5 per cent
 emerge as the single largest provider of global talent with one in four graduates in the world being a
product of the Indian higher education system
 be among the top five countries in the world in terms of research output with an annual R&D spend
of US$ 140 billion
 have more than 20 universities among the global top 200 universities
Various Government initiatives are being adopted to boost the growth of distance education market besides
focusing on new education techniques, such as E-learning and M-learning.
Education sector has seen a host of reform and improved financial outlays in recent years that could possibly
transform the country into a knowledge haven. With human resource increasingly gaining significance in the
overall development of the country, development of education infrastructure is expected to remain the key
focus in the current decade. In this scenario, infrastructure investment in the education sector is likely to see a
considerable increase in the current decade
The Government of India has taken several steps including opening of IIT’s and IIM’s in new locations as well as
allocating educational grant for research scholars in most Government institutions. Furthermore, with online
mode of education being used by several educational organisations, the higher education sector in India is set
for major change and development in the years to come.
 Health & Pharma Sector

INTRODUCTION

India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of
scientists and engineers with a potential to steer the industry ahead to greater heights. India is the largest
provider of generic drugs globally. Pharmaceutical include bulk drugs, intermediates, drug formulations,
biologicals, Ayush and herbal products and surgical. Indian pharmaceutical sector supplies over 50 per cent of
global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in
the UK.

 India’s domestic pharmaceutical market turnover reached Rs 1.4 lakh crore (US$ 20.03 billion) in
2019, growing 9.8 per cent year-on-year (in Rs) from Rs 129,015 crore (US$ 18.12 billion) in 2018.
 Medicine spending in India is projected to grow 9-12 per cent over the next five years, leading India to
become one of the top 10 countries in terms of medicine spending.
 India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It
gives a competitive edge to India over others.
 The Ayurveda sector in India reached US$ 4.4 billion by 2018 end and grow at 16 per cent CAGR till
2025.
  In May 2020, the Indian pharmaceutical sales grew 9 per cent y-o-y to Rs 10,342 crore (US$ 1.47
billion)

Government Initiatives

Pharma Vision 2020 - Pharma Vision 2020 by the Government’s Department of Pharmaceuticals aims to make
India a major hub for end-to-end drug discovery

Pharmaceutical Park - Government of India is planning to set up mega bulk drug parks in order to reduce
industry’s dependency on raw material imports.

As of October 2018, the Uttar Pradesh Government will set up six pharma parks in the state and has received
investment commitments of more than Rs 5,000-6,000 crore (US$ 712-855 million) for the same.

In October 2019, Telangana Government proposed Hyderabad Pharma City with financial assistance from
Central Government of Rs 3,418 crore (US$ 489 million)

Union Budget 2020-21

The allocation to the Ministry of Health and Family Welfare has increased to Rs 65,012 crore (US$ 9.30 billion).

The National Health Mission Scheme is the largest Government funded healthcare programme, which is
expected to benefit 7.31 million poor families in the country by providing a cover of up to Rs 5 lakh (US$
7,314.22) per family per year on floater basis in the impaneled hospitals across India.

The Government has allocated Rs 34,115 crore (US$ 4.88 billion) towards the National Health Mission under
which rural and urban people will get benefited.

Rs 6,400 crore (US$ 915.72 million) has been allocated to health insurance scheme Ayushman Bharat –
Pradhan Mantri Jan Arogya Yojana (AB-PMJAY).

GOVERNMENT EXPENDITURE IN THE PHARMA SECTOR ON AN UPTREND

Government expenditure on health increased to Rs 3.24 lakh crore (US$ 45.96 billion) in FY20, implying a CAGR
of 18 per cent from FY16.

Medical technology park in Vishakhapatnam, Andhra Pradesh has already been set up with an investment of
US$ 183.31 million. States like Himachal Pradesh, Gujarat, Telangana and Maharashtra are showing interest for
making investments in these parks.

German technical services provider TUV Rheinland’s Indian subsidiary has partnered with Andhra Pradesh
MedTech Zone (AMTZ) to create an infrastructure for Electro-Magnetic Interference (EMI/EMC) at an
investment of US$ 12.64 million over a course of four to five years.

As per Economic Survey 2019-20, Government expenditure (as a percentage of GDP) increased to 1.6 per cent
in FY20 from 1.2 per cent in FY15 for health
Opportunities

Clinical trials market- India is among the leaders in the clinical trial market. Due to a genetically diverse
population and availability of skilled doctors, India has the potential to attract huge investments to its clinical
trial market. As of February 2019, India was engaged in 3,618 trials in last one year

High-end drugs- Due to increasing population and income levels, demand for high-end drugs is expected to
rise. Growing demand could open up the market for production of high-end drugs in India.

Penetration in rural market- With 70 per cent of India’s population residing in rural areas, pharma companies
have immense opportunities to tap this market. Demand for generic medicines in rural markets has seen a
sharp growth. Various companies are investing in the distribution network in rural areas.

CRAMS- The Contract Research and Manufacturing Services industry (CRAMS) – estimated at US$17.27 billion
in 2017-18, is expected to reach US$ 20 billion by 2020. The market has more than 1,000 players.

The industry can hire a team from academic institutions to participate in healthcare activities across the
country for their promotional activities.
Industry can get support from academic institutions to serve the society in healthcare activities. They can
provide financial expenses done by the institutions. It should be a routine activity that will connect the
students to the industry.

Challenges

Lack of research- The Indian pharma industry faces lack of research components and real time good
manufacturing practices. This has always been a difficulty for the pharma industry. Pharma companies should
built in such a way that they are equipped with better operational facilities and abilities

Less Earnings- Indian pharma companies are not getting proper profits, their earnings are basically very low as
compared to their counterparts in other countries such as the US. Their income is not sufficient enough to
invest money on research component

More laboratory needed- There is a need for a functional testing laboratory in every state to fasten the work of
specification of raw materials
Better education programme- Skilled manpower from academic institutions can be achieved through
continuing education programmes

The way forward

Looking at the urgent need of the nation for quality healthcare, the pharma industry has to develop strategies
for raw material producing units with user friendly government policy for the small scale industry. The industry
will have to identify researchers / teaching faculty beyond metro cities to get good ideas and skilled workers
from across the country