Goafest 09:"India's high saving ratio an advantage":McKinsey's Tamhane

Goafest 2009 formally began with the Media Conclave held at the venue on Thursday afternoon. The theme for this year's conclave was 'Making the Best of the Slowdown," which saw large attendance from marketers who participated as speakers.

Toshan Tamhane, principal consultant, McKinsey & Co. spoke about how India's economy is safeguarded to an extent from the global meltdown.

Comparing India to the rest of the world, Tamhane with the help of detailed graphs and charts, painted a rosy picture. According to him, the recession in India was much lesser in severity mainly due to three reasons. “The high savings ratio in our country is ensuring creation of future purchasing power and will help us come out of the recession much stronger.”

One of the main reasons why the global economy crashed drastically is the dependence of various economies on the US. India in some ways have much lesser dependence with the external debt/GDP ratio standing at 19% and has thus far managed to escape the harshness of the ongoing recession.

Another aspect going in India’s favour is its burgeoning middle class. “India’s working population has been growing at a healthy 2.1% against the US with a 1.1% growth and UK clocking a 0.5% growth.”

The strategies that he prescribed during a slow-down included burning fat and building muscle; innovations without taking one’s foot off the pedal; focus on portfolio and strategic direction; building talent and acquire what one requires through M&A.

Finally, a panel moderated by R Sridharan, on ‘The Fight Back’ attended by industry stalwarts like Rajesh Kamat, CEO, Colors; Shantanu Khosla, MD, P&G India; Sanjay Tripathi, executive VP and head marketing, HDFC; Neeraj Roy, MD and CEO, Hungama Mobile and Sanjeev Agarwal, CEO, Pantaloon.

Khosla best summarized the entire day’s proceeding with a few bullet points:

a) Cash is King
b) Stay close to the consumer
c) Ruthlessly eliminate waste
d) Focus, focus, focus
e) Get clear what works and invest in it
f) Innovate, innovate, innovate
g) Manage today but don’t mortgage the future
h) Build capacity

He also stressed the importance of doing exactly the same things during the good times. “And if you gentleman have not been following these golden rules till now, I am scared it is too late.”