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The Threat of Social Explosion in India

The Threat of Social Explosion in India . Presented by, Nithin Seenivasan (859867). Introduction – The ugly Rich India. House of Mr Ambani , 53, with a $27bn (€20bn) fortune. Cost more than $1.8bn = €1.35bn ( Milliarden ) 600 Staff working in the building

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The Threat of Social Explosion in India

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  1. The Threat of Social Explosion in India Presented by, Nithin Seenivasan (859867)

  2. Introduction – The ugly Rich India • House of MrAmbani, 53, with a $27bn (€20bn) fortune. • Cost more than $1.8bn = €1.35bn (Milliarden) • 600 Staff working in the building • 3 Helicopter Pads, Parking for 160 cars, Gym, Swimming Pool, Theater etc. • Electricity Bill - €104655/Month • Equivalent to monthly power consumption of 7,000 homes in India • 27 floors for a massive family of…. 6 people. Antilia – The house of the Ambani’s

  3. A 3D model of Antilia- One of the most expensive, ugliest houses ever built by mankind

  4. 4 Major slums near Antilia

  5. A few pictures of the Slums

  6. The Social Divide • 38% of India’s population (380 million) live Below Poverty Line (BPL) • International poverty line- US$ 1.25, which is INR 21.6 (0.31 EUR) a day in urban areas and INR 14.3 (0.21 EUR) in rural areas (after PPP) • Six low-income states – Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Uttar Pradesh – are home to more than one third of India's population – Have severe poverty, unemployment and a general lack of development. PPP link

  7. The Vicious Circle

  8. Overpopulation

  9. Comparison of Population with GDP, Energy Prices and Inflation Source: CIA World Factbook

  10. Population vs GDP

  11. Population vs. Electricity Production

  12. Population vs. Inflation

  13. Impending Energy Crisis • Installed Electricity capacity - 185.5 GW • Available peak load supply is 118.7 GW, but demand is 136 GW • Even major cities suffer from 1-2 hours of electricity blackouts occasionally • Electricity absolutely critical for EVERY sphere of development- Education, Manufacturing, Agriculture, etc. • 300 million Indian citizens have no access to electricity. (One third of rural population, and 6% of the urban population) • A huge sense of Social Inequality arises when deprived of this basic “necessity”

  14. Impending Energy Crisis • India’s primary energy consumption is 524.2 MTOE. (Coal 52.9% , Oil 29.6% and natural gas 10.6%) • Huge dependency on oil exporting countries- 73% of the oil consumed is imported • Important to remember that there are only 13 million cars currently on the Indian streets. This amount is rising almost in accordance with the population rise. • With respect to Oil, Two scenarios feared- Disruption and Price rise. • No Strategic Oil Reserves at all. If supply is disrupted, 13 million vehicles come to a stop.

  15. Impending Energy Crisis • According to Goldman Sachs, the increase in oil price by $10 per barrel could potentially slow India’s GDP growth by 0.2%. • Increase in Oil prices will also cause Exchange rates to fluctuate, potentially causing inflation rates to increase • Current fuel prices are INR 73 (1.07 Eur) per liter of Petrol and INR 45 (0.66 Eur) per liter of Diesel, which is still too high for most of the population • More people are unable to afford to own a vehicle and travel • Still many depend on wood and coal for domestic energy requirements

  16. Risk of a Social Explosion • Growing Energy prices, overpopulation and poverty is increasing the Social Divide between the rich and poor every single day • Will result in a “hopeless” generation, who will never have the chance to prosper even if they possess all the necessary talent to succeed • Will lead to a social unrest, leading to a full scale explosion of society • Public flaunting of wealth by the rich makes the problem worse

  17. Why should International Managers know this? • More sensitive towards local customs, traditions • Understand employees from such regions better • To be aware of the situation in the country and to behave appropriately and ethically, to avoid exploitation

  18. Final Thoughts • Queen Marie Antoinette - "Qu'ils mangent de la brioche” (English- “Let them eat Cake”), when they were starving due to severe drought, causing unrest among the French peasants and ultimately causing the French Revolution • Ratan Tata (2011) - "It makes me wonder why someone would do that. That's what revolutions are made of.” , commenting about Ambani’s huge and ugly $1.8 Bn house • Hopefully, Ratan Tata’s words are not prophetic

  19. Thank you!

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