With 2012 gone, will 2013 be better?

There is hardly any doubt in the minds of businessmen and corporate alike that the Indian economy with its GDP growth rate falling to just 5.30 per cent in the year 2012 (lower than the average 8.20 per cent recorded in the last 8 years), suffered one of its worst slowdowns in recent memories. Populist & coalition politics not only led to government inertia and delay in key reforms but also public money was wasted on dead Parliament sessions. What compounded the problems in the eyes of domestic as well as international investors and perhaps proved to be the last nail in the coffin was the ratings downgrade by Standard’s & Poor, to just about being unstable.

Further in a bid to cut spending on petroleum subsidies, the government announced the steepest ever hike in diesel prices and put a cap on the supply of subsidised cooking gas for domestic use at six cylinders per annum. . High cost of capital, poor infrastructure and policy inaction for a fair part of the year severely affected the performance of different sectors of the economy.
The Indian economy was also affected by global factors as well. A slowdown in growth in the global economy, especially in Europe and North America, also affected India.

In an exclusive feature, Adgully spoke to a cross section of industry stalwarts to find out their views about the year 2012 and their expectation about the year 2013.

So what were the findings?  At best we can say it has been a mixed reaction, some felt the heat, and others were unaffected. So also are the expectations about 2013. Present here are brief views of what each one felt.

Agreed Shubhradeep Guha, Global Capability Lead and Country Manager, SapientNitro (India), “it was tough in terms of growth and we could have done better if we would have kind of grown but we did register quite a net growth over and above than in 2011, which was not huge but modest one.” According to Srinivasan Swamy, an advertising industry veteran and CMD of leading advertising firm in India, RK Swamy, “weaker companies struggled more than stronger ones.”

Says Jaideep Shergill, Jaideep Shergill, CEO, Hanmer MSL, “for us the year 2012 was not as bad as 2009-10 in terms of slowdown due to global financial crisis. Yes but overall 2012 could have been better but we have ourselves (read domestic conditions) to blame.

While some agreed for others the slowdown had little impact going by their views. Says Ms. Radhika Shapoorjee,  President, IPAN Hill+Knowlton Strategies about 2012, “Public Relations is even more relevant and efficient during slowdowns. Clients are finding PR to be a very powerful communication discipline to build credibility and trust in an environment which has been turbulent. We have grown in strength across sectors – technology, media & entertainment, corporate and issue management have been the drivers of growth. We have significant wins across these sectors.”

Ankur Warikoo, CEO, Groupon India also did not feel much impact and says, “we are too young in the system, just a year old to feel that the year was tough. Though we saw the entire industry going through a slump, our entire focus has been to strengthen our presence amongst merchants and consumers.”

Speaking in an optimistic tone, Prateek Mittal, founder Torrp- it –Up, a Quick Service Restaurant felt that for them 2012 was a good year. He says, “we have proudly achieved the targets we had aimed for at the beginning of this year. Product standardization, a stronger backend, streamlined operations have all led to rapid expansión this year. With expansion, our brand value increased thus helping us to sustain ourselves through the rough economic slow-down.”

We are on the cusp of year 2013 and most have visions for their organization and plans to look forward to. However it is doubtful that the situation will drastically alter in the new year. Having a bull run and FII inflows in the stock market is good but it does not lead to any asset creation and generation of employment opportunities in the Indian economy. Besides we will continue to grapple with problems of poverty, illiteracy, the various social ills that afflict the society and economic scams.

Adds Srinivasan Swamy, “2013 is expected to be difficult as well. A double digit growth appears to be a mirage at this stage. Yes some companies may do better because of the product cycle of their innovation, but with general elections in the horizon in 2014, we can expect many 'populists' schemes which will put the economic growth on the sluggish path.” Says Jaideep Shergill, “we hope 2013 is better.”

For Ms. Radhika Shapoorjee the year 2013 is going to be an important year as she says, “we plan to have more investment in training & development opportunities for our people. Beyond this I am expecting the action quotient in the government to significantly go up in the New Year. We can look forward to moving into a more optimistic sentiment across publics in India and internationally. I hope to see more business coming into India as well as Indian businesses making their mark internationally.” She sees IPAN Hill + Knowlton Strategies as the leading shaper of Public Opinion in India, for corporations, institutions and brands.

On their plans for 2013, Ankur Warikoo said, “ we are looking at sustainable growth and at a rate that is higher than what has been achieved so far. We want to grow incredibly fast. The coming year is going to be very interesting for Groupon in that sense as it aims to reach out to larger strata of the population and more merchants than in 2012.”

Adds Prateek Mittal, “we plan to build a franchise model and expand to Tier 1 & 2 cities with a roll-out of about 300 stores. However adapting to new territories and lack of infrastructure would be the major challenges that we would be facing due to expansion.”

As for Shubhradeep Guha, he is planning to welcome 2013 and says, ‘we would have to keep our portfolio really strong in the Indian market as it is kind of seeing a rapid growth in terms of e-commerce and would allow our team to win more awards and thirdly we would want to see how mobile space grows in 2013 and then we would plan our strategies in that direction.

Thankfully for the industry, the government has woken up but a tad too late, with just about less than 20 months to go before the 2014 General Elections. The perception of policy paralysis is sought to be changed with the government pursuing a series of reforms like announcing spending cuts, liberalisation of foreign investment policy norms and easing corporate rules.  Foreign investment policies for the sectors like retail, banking, broadcasting and aviation have been liberalised to attract more overseas funds. The multi-brand retail sector has also been opened despite huge political opposition. As if feeling the opportunities and the seat of power slipping away from its hands, some policy action has at last been visible. Although it remains to be seen how much this would translate into ground action.