GAMMON INDIA LIMITED

INDUSTRY OVERVIEW
The information in this section is derived from various government publications, publicly available
information and industry sources. Neither we nor any other person connected with the Placement have
verified this information. Industry sources and publications generally state that the information contained
therein has been obtained from sources generally believed to be reliable, but that their accuracy,
completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and,
accordingly, investment decisions should not be based on such information.
Overview of the Indian Economy
India is the world’s largest democracy by population size, and one of the fastest growing economies in the
world and has grown at an average rate of 8.20% per annum during the last three years. According to CIA
World Factbook, India’s estimated population was 1.16 billion people as of July 2009. India had a GDP on
a purchasing power parity basis estimated at approximately US$3,267.00 billion in 2008, which makes it
the fourth largest economy in the world after the United States of America, China and Japan in purchasing
power parity terms. Per capita GDP in current prices in India has grown from Rs.7,170.00 for the 1991
calendar year at the time of liberalization to Rs.44,231.00 for the 2008 calendar year. The following table
presents a comparison of India's real GDP growth rate with the real GDP growth rate of certain other
countries.
Countries* 2006 2007 2008
Australia ........................... 2.90% 4.00% 2.20%
Brazil ................................ 4.00% 5.40% 5.20%
China ................................ 11.60% 13.00% 9.80%
India................................. 9.60% 9.00% 6.60%
Japan................................. 2.40% 1.50% -0.40%
South Korea...................... 5.10% 5.00% 2.50%
Malaysia ........................... 5.80% 6.30% 5.10%
Russia ............................... 7.70% 8.10% 6.00%
Thailand............................ 5.20% 4.90% 3.60%
United Kingdom ............... 2.80% 3.00% 0.70%
United States..................... 2.80% 2.00% 1.30%
* Represents calendar year growth rates
Source: CIA World Factbook
Indian Infrastructure : Government Initiatives
The Central and State Governments of lndia are focusing on establishing an appropriate policy framework
for the infrastructure sector which provides the private sector with incentives to make large-scale
investments, at the same time preserving adequate checks and balances through transparency, competition
and regulation. There has been a shift towards financing of infrastructure development to the private sector,
primarily through Public Private Partnerships (“PPPs”), which are based on a partnership between the
public and the private sectors for the purpose of delivering a project or service traditionally provided by the
public sector. PPPs are designed to mobilise financial resources and realise benefits from private sector
efficiencies to meet the growing demand for infrastructure services. The formation of a stable government
in the centre is expected to result in a boost to the infrastructure sector in India. The initiatives undertaken in
the Union Budget for fiscal 2010 as regards infrastructure sector is a positive step in that direction. Recently
in order to give a push to economic activity, the government constituted the Cabinet Committee on
Infrastructure (CCI) to fast-track the implementation of the infrastructure sector projects and monitor their
performance. The 12-member committee will be headed by the Prime Minister. The functions of the
Cabinet Committee on Infrastructure will be to consider and take decisions in respect of all infrastructure
related proposals costing over Rs 150 crore specifically those concerning Energy, Railways, Roads and
National Highways, Ports, Airports, Telecommunications, Information Technology, Irrigation, Housing and
Urban Development with particular emphasis on rural housing and urban slum clearance.
The government agencies with responsibilities for different infrastructure sectors include the National
Highways Authority of lndia (“NHAI”), National Thermal Power Corporation, the National Hydro Power
Corporation and the Power Grid Corporation of India Limited (“PGCIL”), ONGC, GAIL, Port Authorities,
Central Water Commission, Indian Railways, IOL/ HPCL/ BPCL, NPCIL/ BARC, State Level Urban
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