A trillion reasons to find Indian partners
Matt Wade
October 25, 2011
IF YOU reckon five-year plans went out with the Soviet Union, think again. They're still surprisingly popular in Asia's fastest-growing major economies. Ambitious new five-year plans have come into force in one-party states, China and Vietnam, this year. Even in democratic India, the country's powerful Planning Commission is busy crafting its 12th five-year plan to replace the 11th, which finishes next year.
India has moved away from the highly centralised and regulated economic model that held sway for decades following its independence in 1947. The government admits its central five-year plans are now more ''indicative'' than in the past. But they're still taken very seriously and the commission that prepares them has great influence over economic policy.
A paper by Commonwealth Treasury officials Ben Ralston, Wilson Au-Yeung and Bill Brummitt has drawn attention to the huge investments foreshadowed in India's next five-year plan and the opportunities they present for Australia.
The new plan will highlight the country's overwhelming need for infrastructure, including roads, railways, ports, airports, electricity, telecommunications, oil and gas pipelines, and irrigation.
It anticipates that $US200 billion ($A192 billion) each year needs to be spent on infrastructure to sustain India's growth - double the average of the current plan. That means $US1 trillion in public investment and private initiatives over five years.
The Planning Commission says a large number of public-private partnerships (PPPs) will be essential if this is to be achieved. So far, most PPPs in India have been for transport infrastructure, especially roads. They also have been used successfully to build major new airport facilities in Delhi, Mumbai, Hyderabad and Bangalore.
But the Planning Commission says ''efforts are needed'' to mainstream PPPs in power transmission and distribution, water supply and sewerage and railways, as well as in social sectors such as health and education. It wants to modernise India's PPP frameworks and attract more foreign capital and know-how.
Australian businesses and governments have had a lot of experience in the financing and construction of PPPs and the opportunities for collaborations are huge.
India's Planning Commission also has an ambitious training agenda.
Just 11 per cent of the nation's 17 to 23-year-olds are pursuing higher education and the level of unmet demand for university places runs at about 4.7 million places each year. To supply the necessary places, India plans to set up about 1500 new institutions of higher education.
''The opportunities for Australian universities, whether in terms of partnering with Indian institutions during this growth phase or attracting more Indian international students to Australia are clear,'' write Ralston, Au-Yeung and Brummitt.
The needs are even bigger in vocational training, says Chandrajit Banerjee, director-general of the Confederation of Indian Industry, who is visiting Australia with a business delegation.
''India requires something like 500 million people to be trained in vocational skills by 2022,''
Mr Banerjee said. ''It's a huge investment opportunity for Australia
we are looking at a phenomenal potential for a win-win type of collaboration.''
Mr Banerjee says this will require Australian education providers to get involved in delivering training in India rather than students moving here for their studies.
Ralston, Au-Yeung and Brummitt also point out that India's demand for agricultural commodities and processed food is ''generally outstripping its domestic productive capacity''.
India's agricultural sector is likely to remain heavily protected because of the political influence and poverty of many agricultural workers. But changing patterns of food and beverage consumption among India's middle class is expected to translate into growing markets for Australian agricultural produce such as processed foods and wine.
Australia's merchandise trade exports to India rose by nearly 800 per cent between 2000 and 2010, driven by minerals and energy, especially coal and gold. 
The analysis by Ralston, Au-Yeung and Brummitt puts some numbers on just how lucrative markets in other Indian sectors could be for Australia.
Last month Prime Minister Julia Gillard announced that former Treasury boss Ken Henry would prepare a white paper on how Australia could make the most of Asia's economic transformation. But she said the report would not be made public before the middle of next year.
The numbers being mooted for India's next five-year plan suggest Henry's advice cannot come quickly enough.
Read more: A trillion reasons to find Indian partners
Matt Wade
October 25, 2011
IF YOU reckon five-year plans went out with the Soviet Union, think again. They're still surprisingly popular in Asia's fastest-growing major economies. Ambitious new five-year plans have come into force in one-party states, China and Vietnam, this year. Even in democratic India, the country's powerful Planning Commission is busy crafting its 12th five-year plan to replace the 11th, which finishes next year.
India has moved away from the highly centralised and regulated economic model that held sway for decades following its independence in 1947. The government admits its central five-year plans are now more ''indicative'' than in the past. But they're still taken very seriously and the commission that prepares them has great influence over economic policy.
A paper by Commonwealth Treasury officials Ben Ralston, Wilson Au-Yeung and Bill Brummitt has drawn attention to the huge investments foreshadowed in India's next five-year plan and the opportunities they present for Australia.
The new plan will highlight the country's overwhelming need for infrastructure, including roads, railways, ports, airports, electricity, telecommunications, oil and gas pipelines, and irrigation.
It anticipates that $US200 billion ($A192 billion) each year needs to be spent on infrastructure to sustain India's growth - double the average of the current plan. That means $US1 trillion in public investment and private initiatives over five years.
The Planning Commission says a large number of public-private partnerships (PPPs) will be essential if this is to be achieved. So far, most PPPs in India have been for transport infrastructure, especially roads. They also have been used successfully to build major new airport facilities in Delhi, Mumbai, Hyderabad and Bangalore.
But the Planning Commission says ''efforts are needed'' to mainstream PPPs in power transmission and distribution, water supply and sewerage and railways, as well as in social sectors such as health and education. It wants to modernise India's PPP frameworks and attract more foreign capital and know-how.
Australian businesses and governments have had a lot of experience in the financing and construction of PPPs and the opportunities for collaborations are huge.
India's Planning Commission also has an ambitious training agenda.
Just 11 per cent of the nation's 17 to 23-year-olds are pursuing higher education and the level of unmet demand for university places runs at about 4.7 million places each year. To supply the necessary places, India plans to set up about 1500 new institutions of higher education.
''The opportunities for Australian universities, whether in terms of partnering with Indian institutions during this growth phase or attracting more Indian international students to Australia are clear,'' write Ralston, Au-Yeung and Brummitt.
The needs are even bigger in vocational training, says Chandrajit Banerjee, director-general of the Confederation of Indian Industry, who is visiting Australia with a business delegation.
''India requires something like 500 million people to be trained in vocational skills by 2022,''
Mr Banerjee said. ''It's a huge investment opportunity for Australia
we are looking at a phenomenal potential for a win-win type of collaboration.''Mr Banerjee says this will require Australian education providers to get involved in delivering training in India rather than students moving here for their studies.
Ralston, Au-Yeung and Brummitt also point out that India's demand for agricultural commodities and processed food is ''generally outstripping its domestic productive capacity''.
India's agricultural sector is likely to remain heavily protected because of the political influence and poverty of many agricultural workers. But changing patterns of food and beverage consumption among India's middle class is expected to translate into growing markets for Australian agricultural produce such as processed foods and wine.
Australia's merchandise trade exports to India rose by nearly 800 per cent between 2000 and 2010,
driven by minerals and energy, especially coal and gold. The analysis by Ralston, Au-Yeung and Brummitt puts some numbers on just how lucrative markets in other Indian sectors could be for Australia.Last month Prime Minister Julia Gillard announced that former Treasury boss Ken Henry would prepare a white paper on how Australia could make the most of Asia's economic transformation. But she said the report would not be made public before the middle of next year.
The numbers being mooted for India's next five-year plan suggest Henry's advice cannot come quickly enough.
Read more: A trillion reasons to find Indian partners
