Consumer retail, Healthcare, Logistics and Infrastructure, Power and Mining, Automotive and Industrial products, Financial services, Technology and Education, Government, Agriculture and Micro, Small, and Medium Enterprises (MSMEs) segment, these nine sector will be the key to GDP growth revival, a report published by PwC said.
The report said the health situation continued to be dynamic with the continuing spread of coronavirus, creating a direct shock to the economy resulting in a recession.
“The consumer and retail, health and pharma, automotive and industrial products (IP) sectors will be influenced by similar themes in consumer demand shifts,” the report, titled Full Potential Revival & Growth – Charting India’s medium term journey, said.
New products and services that would be launched by a sector, require an understanding of increasing value consciousness, focus on wellness, safety and health. “For instance, one pharma company that produces generic medicine is looking at opportunities for wellness services,” the report said.
An additional growth vector would be the decentralisation of demand, as organisations are realizing that in the short to medium term, semi-urban and rural districts will require focus, the report said.
“On the supply side, digital operating models and shifts in global and local supply chains will influence these sectors. Both are needed to drive international connects and local resilience,” the report said.
The report said power and mining, infrastructure and logistics, information technology and education would provide the infrastructure for growth, and are dependent on natural and human resources use.
“By opening these sectors and improving data flows, demand and supply would be better coordinated. Power and Infrastructure sectors can benefit from data platforms on customer front end, and back ends,” the report said.
Infrastructure requires capital resources to be released and mitigate risks to bring private investments back with better data and physical flows. Capital sourcing requires careful coordination with financial services sector, the report said.
“IT, where India has become a global contender is now considering the domestic market where use of vernacular, growing national platforms and widespread digital education will drive adoption and growth,” the report said.
The report said financial services and government are drivers of employment, productivity and release resources, capital, land and labour , that are currently underutilised. A strong financial service sector is needed to ensure robust capital flows in the economy. “This sector was slowing down before the crisis with non-performing assets (NPAs) growing. By cleaning its books, implementing recently instituted bankruptcy proceedings, and recapitalizing, this flow can be revived,” the report said.
The report said the MSME segment was singled out for support by the government in the first stimulus package, as the largest employer after agriculture.
“This segment is largely unorganised with only 13m out of a total 63m MSMEs registered. They can benefit from data use to identify and create ecosystems to support them,” the report said.
The report also said there would be three phases of revival and growth “Reinvention has three broad phases – Repair, Rethink, Reconfigure and two vectors volume and productivity for implementation,” the report said.
It said many companies had already accomplished the immediate task of repair, stabilising their organisations in the immediate aftermath of the crisis. “Organisations now need to rethink to improve productivity, so that their revival is fast and their potential is enhanced. This can be driven by digitising and formalising, providing the organisation with higher output for the same volume of economic activity,” the report said.
Leaders will also be required to reconfigure their organisation to understand demand and supply, with full resources of the organisation as the economy recedes in FY21 and then starts to revive.