The candidate was very bright (alum of IIT + IIM) and had a wealth of consulting experience (mostly in the US). He was planning to settle in Bangalore after having stayed for around 6 years in Silicon Valley, and it was an obvious interview question to ask what made him decide on Bangalore over the valley. He felt that Bangalore was where all the action was. It was in Bangalore that the new, the next and the greatest would be created in the near future. He felt that in the next few years (maybe 10-15), India will be the place and he wanted to be there at the start. I would not go further into the questions and answers as it is not fair to reveal more on this blog.
You can see many people sold on to the India story. Oft quoted example is the number of cellphone connections where India is adding 3.5 connections per second. People feel that Indian middle class holds a lot of consumption promise. A lot of big names like GM, Microsoft and Google are in India doing RnD. I just wonder aloud:
- Most (if not all) of the end consumers for MNCs operating in India are in the US or Europe. The are just leveraging the costs from India, not serving the Indian middle class (yet).
- India has just 30 million Income Tax payers. Even if you magnify this number by 5 to include all the people who do not declare their income, this is abysmally low in a population of 1.1 billion. Considering even 150 million people with incomes above Rs. 150000 (US$ 4250) a year, I would guess a maximum of 20% or 30 million will have incomes in the above Rs. 900,000 (US$22500) a year. Contrast this with 300 million people in the US, out of which at least 60% make more than US$24000 a year. It is simply no comparison. [Update1: Omkar Goswami confirms that the number of income tax returns over INR 10 lakhs for 2005-2006 was 5.62 lakhs. This makes around (only!) 5.5 million people with incomes above 10 laks or US$25000 per annum, even assuming that only 10% people declare their incomes]
[Update2: Assuming only 10% of the people earning over INR 10 lakhs declare their incomes, it makes 5.5 million such people]
- People who talk of the number of mobile phones in India should also talk of the number of opportunities for Banks operating in India. Why is India not such a hot Banking destination with a population of 1.1 billion - why are Bank accounts not multiplying at even half the rate of mobile phones? Why are the Citibanks and BoAs not scampering to expand their network, reach and business in India? Or what about Credit Cards? Cars? Talking of Indian population is not the same as talking of business opportunities.