Indian Economy and Policy

Which according to the passage is/are the indicator(s) of an incredible transformation for which there is no parallel in the country?

1. While deposits, assets, income interest and net worth of banks have grown manifold, there has been no significant increase in the number of employees, a feat not achieved by any other industry in the country.
2. During 2000-2009, the gross domestic product (GDP) nearly trebled from Rs. 1925,000 crore to Rs. 5475,000 crore. Return on assets (ROA) which varies between 0.25% and 1.5% worldwide has risen from 0.87% to 1.0% in 2009 in the country.
3. The transformation is remarkable as this transformation has been largely enabled by indigenously developed information technology tools and this helped create a world leading banking industry in India.
4. There has been an incredible growth in young customers who have forced banking industry to work out new products to meet the growing requirements of the new and burgeoning client base in India.

   Directions: Answer the given question based on the following passage:

   Indian banking has undergone a total transformation over the last decade. Moving seamlessly from a manual, scale-constrained environment to a technology-lending tradition, it has been a miracle. Nowhere in the world has such a transformation taken place in such a short span of time at such a low cost. The process began in 1999-2000, when a couple of banks signed their first core-banking transformation deal with Infosys. By 2009, about 50 banks with about 55,000 branches had completed the migration, offering their customers anywhere, anytime banking through various channels. Today, a consumer can go to an ATM across more than 44,000 locations, operate the bank account through the web, with instant reconciliation facility and all information available in a single database to help the decision makers.
   Banking industry has grown at a compounded annual growth rate (CAGR) of 20% during the last decade. It has grown by a factor of five times. Total deposits have grown by 4.8 times, assets by 6.6 times, income interest by 9.5 times and net-worth by 4.5 times. Employee strength has grown by a mere 5%. This is an incredible transformation of an industry with no parallel in country. During 2000-2009, the gross domestic product (GDP) nearly trebled from Rs. 19,25,000 crore to Rs. 54,75,000 crore. Return on assets (ROA) which varies between 0.25% and 1.5% worldwide has risen from 0.87% to 1.0% in 2009 in the country.
   In contrast to most countries, in India retail deposit forms a sizeable chunk of gross domestic savings, creating a large potential for investment. The ratio of the total deposit to GDP, which stood at 44% in 2000, has now climbed to 74%. However, the credit to GDP ratio presents an opposite picture and at 55% India lags behind many countries whose banks lend more than the size of their economies. We also have to catch up with the world’s best run banks in the area of cost management. India’s cost-income ratio lies anywhere between 37% and 66% and it is no match for international benchmark of 30-35%.
   But the transformation is remarkable and this transformation has largely been enabled by indigenously developed information technology tools. Looking forward, the journey becomes even more remarkable, possibly because of the technology transformation that the banking sector has undergone. Although impressive, these numbers pale into insignificance when compared to the projected growth in the customer base. As per an estimate, Indian banks will add another 400 million customer accounts in the next decade. The focus on financial inclusion will deepen with the government and the industry working together. This has enormous implications for the industry, which must scale up systems, processes and infrastructure as well as boost the employee productivity to manage such growth. Likewise, the industry must change its mindset and innovate to cater to the unique needs of the next generation consumers when, according to a demographic projection for 2019, 450 million Indians will be below the age of 20.
   The emergence of the new class of customers is the result of this transformation process of the last decade. The emerging challenges call for a new, more dynamic, and aggressive and challenging banking culture which meets the demands of customer relationships, product differentiation, brand values, reputation, corporate governance and regulatory prescriptions. Every bank, depending on its strategy, will have to migrate to its best position in this new structure from the branch level itself. The basic aim of the above strategies will have to be to improve the business performance of the banks. The size of ubiquitous and mass market retail banking and entry of non-traditional players will result in both seeking to collaborate more. And banking will wear a totally new look as urban consumers use their hand-held devices in lieu of cash and their rural counterparts discover the benefits of smart cards and other plastic technologies.

Directions: In the following question, four statements are provided between an opening statement 1 and a closing statement 6. The four statements form a coherent paragraph when properly arranged. Select the alternative representing the proper and logical sequencing of these six taken together.

1. India's experience of industrialisation is characteristic of the difficulties faced by a newly independent developing country. A. In 1947, India was undoubtedly an under-developed country with one of the lowest per capita incomes in the world. B. Indian industrialisation was the result of a conscious deliberate policy of growth by an indigenous political elite. C. Today, India ranks fifth in the international community of nations if measured in terms of purchasing power. D. Even today, however, the benefits of Indian industrialisation since independence have not reached the masses.
2. Industrialisation in India has thus been a limited success, one more example of growth without development.