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Full Potential Revival & Growth

Charting India’s medium-term journey

The disruption caused by the COVID-19 pandemic is an exogenous shock for the Indian economy. But this can also be a transformative moment for India as it presents the opportunity to redefine our business ecosystem, rethink our approach to growth, and reconfigure our economy.

Our report, ‘Full Potential Revival & Growth - Charting India’s medium-term journey’ outlines key themes and an execution approach in nine core sectors that can revive and grow the economy in the medium term. The report is based on interviews with business, public sector and citizen leaders, sectoral analysis, and a country-wide survey. It concludes that by removing frictions that have hampered growth historically, through joint action, convergence between sectors and institutions, creation of enabling platforms, a fast revival and subsequent higher growth is possible. This requires a Full Potential Mindset in organisations, citizens and leaders.

Decoding the impact of Covid-19 on India Inc and understanding the new emerging paradigm - PwC India

Full Potential Mindset

"Hidden possibilities in an individual, organisation or a country not understood before. Potential brought to light through a new event, shock or sudden change in circumstances".

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Executive summary

Sectors

Consumer & Retail

Healthcare and Pharmaceuticals

Logistics & Infrastructure

Power and Mining

Automotive and Industrial Products

Financial Services

Technology and Education

Government

Agriculture

MSME

Consumer & Retail

Five key themes driving revival and growth in the Consumer and Retail sector in the medium term are:

Shift in consumer behaviour in the new normal
Decentralisation of demand with higher contribution from semi-urban and rural centres
Digital front-ends for interacting and servicing customers
Accelerated adoption of digital technologies across the value chain
Re-evaluation of retail portfolio and consumer experience

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Healthcare and Pharmaceuticals

Five key themes driving revival and growth in the Healthcare and Pharmaceuticals sector in the medium term are:

Increase in adoption of virtual care
Health expense coverage for the missing middle class
Self-reliance in Active Pharmaceutical Ingredient (API) manufacturing
Increase in data collaboration and analytics
Creation of a pharma innovation ecosystem in India

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Logistics & Infrastructure

Five key themes driving revival and growth in the Logistics & Infrastructure sector in the medium term are:

Shift to multi-modal transport to reduce logistics costs and dependencies
Increased private-sector investment in infrastructure by overhauling risk management
Data collaboration and protection efforts to reduce information asymmetry and inefficiencies in logistics
Accelerated adoption of digital technologies across an integrated logistics value chain
Institutional and governance reforms in factors of production critical to drive and sustain growth

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Power and Mining

Five key themes driving revival and growth in the Power & Mining sector in the medium term are:

Shift in consumer behaviour (Prosumers) and increased empowerment due to front-end digitalisation
Increased power demand due to decentralisation, stimulus and flagship government programmes
Need for power procurement strategy to be in sync with demand requirements across regions
Self-sufficiency to enhanced focus on effective utilisation of India’s natural resources
Improved revenue assurance and operational efficiencies to overhaul distribution companies (DISCOMs)

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Automotive and Industrial Products

Five key themes driving revival and growth in the Automotive and Industrial Products sector in the medium term are:

Opportunities in global supply chain rearrangement driven by risk diversification
Shift in consumer behaviour in medium-term due to health and economic reasons
Accelerated adoption of digital front-ends for interacting with and servicing customers
Decentralisation of demand in hinterland driven by migration, stimulus and relative insulation
Data as a critical asset to drive growth by improving customer and process levers

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Financial Services

Five key themes driving revival and growth in the Financial Services sector in the medium term are:

Catering to the ‘needs’ of the lower class and MSME sector through formal credit
Easy access to ‘credit’ for the middle class through incentives, regulatory and new products to cater to their ‘wants’
Shift from risk-averse mindset by tackling regulatory and psychological barriers across Financial Services
Data interoperability, transparency and reliability to simplify risk and process agility
Drive long-term finance market by easing regulations and managing project risks

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Technology and Education

Five key themes driving revival and growth in the Technology and Education sector in the medium term are:

Demand acceleration due to high digital adoption across sectors and their value chains
Decentralisation of adoption as demand deepens in the hinterlands
Increasing penetration of infrastructure to boost demand for ed-tech
Reforms and regulations to enable accelerated growth
Acceptance of work-from-anywhere (WFA) model enabled by structural changes

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Government

Seven key themes driving revival and growth in the Government in the medium term are:

Accelerated digitalisation of government services
Infrastructure to meet decentralised demand
Focus on mobilising land as an asset for capital generation
Adoption of data cooperatives for unlocking data potential
Shift focus on hotspots of reverse migration for employment
Fast track land, labour and infrastructure reforms
Reforms to improve ease of doing business

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Agriculture

Six key themes driving revival and growth in the Agriculture sector in the medium term are:

Growing market demand for better traceability
Increase in labour productivity in agriculture sector
Predictive models and technology to improve crop yield
More collaboration b/w government and enterprises to increase spend on R&D
More efficiency in extension mechanism for dissemination of information to farmers
Effective water management by use of technology for driving sustainability

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MSME

Five key themes driving revival and growth in the MSME sector in the medium term are:

Increased adoption of digital channels to enable formalisation
Removing frictions in the last-mile credit delivery
Potential of data to ease current MSME-related frictions – access of credit, growth
Focus on creation of localised employment
Fostering a business-friendly environment

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Client
speak

“Governments need to find ways to improve their asset utilisation; municipalities, for example, need to improve utilisation of empty schools and idle real estate during and beyond this crisis period.”

- Amit Chandra, Chairman, Bain Capital India Office

Full-potential-revival and growth

Our research has found that given the chance to do the deal over again, two-thirds of dealmakers admit that, more than anything else, value creation would be a priority right from the start.

30% of organisations say they prioritised rebranding on Day One – something that all but 2% later admit should not have been a priority. Of course, branding is important, but it is more important that the business behind the brand is built on a sound, strategic plan.

What were your priorities on Day One and what should they have been?

Reinventing the future

This is a transformative moment for India. Returning to USD2.9 Tn, the annual base economic capacity of India at the beginning of the crisis, is just a first goal. The more important ambition is to unlock the country’s full potential so that its post-revival growth is faster. By removing frictions exposed by the COVID-19 crisis, and deepening, widening and heightening the economy, India can get back on an even keel faster. By further digitalising and formalising the economy, the country can make the economy more productive. Holding a mindset of ‘full potential’ will spur leaders to use this crisis to remove frictions, at speed, in any organisation or institution for greater overall economic output thereafter.

Full Potential Revival & Growth