Delhi No. 1 and chennai no 3 india's investment destination

In a survey of 27 cities, the competitiveness factors evaluated were: people, catalysts, infrastructure and financials.The 2010 ADB report says that location precedes supplier selection in globalisation initiatives: “Earlier, countries competed for location but now competition is often at a granular level between various cities. Lately, we are more likely to observe competition between Bangalore and Manila than between a generic India and the Philippines.”Against this backdrop, Delhi’s high quality of life, transportation infrastructure and cost-effective labour both skilled and unskilled — have “contributed in a big way to the city’s economic growth, pitchforking it to the top in overall rankings,” says the ADB report.he Commonwealth Games and the infrastructure development as a result of this such as the international airport and the Metro rail network are among the major factors contributing to Delhi’s rise to the No.1 position.“Furthermore, the city is extremely well-connected to suburban cities along its periphery such as Gurgaon, Faridabad and Noida, making it the largest economic agglomeration in India,” says ADB.

“Though Greater Mumbai’s position remains unchallenged, its infrastructure lags far behind the pace of economic growth witnessed by the city. Several major infrastructure projects such as the Mumbai Urban Transport project and the Bandra Worli sealink are yet to show its effects on potential economic growth,” the report says.The ADB report says that quality of infrastructure such as water and power supply, roads, public transport, crime and safety, environmental pollution and recreation and leisure options also influence investment options.

Chennai’s No. 3 ranking as a potential hub for future investments couple traditional reasons such as it being a major seaport known for its manufacturing industry and recent developments such as an exceptionally high investment of Rs 34,000 crore for upgrading its urban infrastructure.According to the report, Bangalore is a major economic hub in the country with major IT, biotech and FMCG companies but its infrastructure has not been able to keep pace with its rapid economic growth.Hyderabad, meanwhile, is fast emerging as a top slot city in India. It is currently witnessing an unprecedented growth and is set to become the fourth largest urban agglomeration by 2011, overtaking Bangalore. The city also has the highest number of formally approved IT SEZs in the country.

Ras Al Khaimah wants investment from India

India may takeover the US in terms of households savings by 2020, touching the USD 5 trillion mark, as the growing economy would boost incomes of people, a study has said. "The household savings rate of 33.4 per cent would translate into incremental savings of USD 5 trillion over the next decade with growing incomes of Indian households," Assocham President Swati A Piramal said in a statement.

Currently, the size of Indian household savings is over USD 330 billion, according to a study jointly done by Assocham and PricehWaterhouse Coopers. Indian households have traditionally preferred safety of bank deposits and government saving schemes.

Less than 10 per cent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies, Piramal said. "Given the quantum of savings, the need to mobilise savings into productive channels and the opportunity for financial intermediation, the next decade will be an opportunity of a lifetime for Indian capital markets," the study said.

It said, currently, Indian economy''s size is about USD 1 trillion with the savings rate of Indian households of 33.4 per cent, which is expected to grow further at an average rate of 8 per cent annually. Concerted efforts of the government and the regulators supported by a long-term vision and a clarity in action can significantly help in fostering a climate that is conducive to growth and investments, Piramal said.

Global economy faces higher capital costs

A new investment boom in emerging Economy as India and China coupled with a decline in saving rate in China is set to end the low interest rate environment in the coming years, McKinney Global Institute has cautioned. In its latest report — Farewell to cheap capital? The implications of long-term shifts in global investment and saving — the global consulting firm has said that nominal and real interest rates that are currently at 30-year lows are likely to rise in coming years.

“If real long-term interest rates were to return to their 40-year average, they would rise by about 150 basis points from the level seen in the fall of 2010. And they may start moving up within five years,” the report said.

The rise in interest rates, translating into higher cost of capital for businesses, investors and governments, would however be slower if the saving rate were to keep pace with the rise in demand for capital. That seems unlikely even though households in the US and UK have started saving a lot more in the aftermath of the financial crisis.

However, the increase in global saving rate is unlikely to match the rise in demand for capital when the Chinese government is encouraging its citizens to increase their consumption. The country needs to bring down its saving rate from 53% of GDP (in 2008) to sustain its high growth rate. If the Chinese government’s policies indeed succeed, global saving would decline by at least 1.8 percentage points of the global GDP by 2030. Increased saving by households in the US and UK, if it continues to persist, can at best offset this decline in global saving rate by just one percentage point in 2030. The global saving rate would also be depressed by the increased age-related spending in many countries. Spending for the retired could increase by 3-3.5% of the global GDP by 2030, according to some estimates.

The McKinsey report noted that developing economies are embarking on one of the biggest building booms in history. “The world is now at the start of another potentially enormous wave of capital investment, this time driven primarily by emerging markets. By 2020, global investment demand could reach levels not seen since the postwar rebuilding of Europe and Japan and the era of high growth in mature economies,” it said.
The investment boom is already being experienced across Asia, Latin America and Africa, where the demand for new homes, transport systems, factories, offices, skyscrapers, hospitals and shopping centers has already caused a jump in investment. The global investment rate had increased from a low of 20.8% of the GDP in 2002 to 23.7% in 2008, and then dipped again during the global recession of 2009.
The authors of the report noted that given the emerging nations led by China and India have low levels of capital, high investment rates are likely to continue for decades, exceeding 25% of global GDP by 2030. If consensus forecasts of global growth are realised, global investment will amount to $24 trillion in 2030, compared with $11 trillion currently (in constant 2005 prices and exchange rates).