Edited by Robert M. Morgan, Janet Turner Parish and George Deitz
Chapter 8: Self-service technologies: building relationships with Indian consumers
India’s journey to a leadership position in the world began with the unleashing of its economy in 1991. In the years before liberalization India typically posted 2.5 percent growth rates and the economy was constrained by a vicious cycle of low investments and a punishing regulatory regime. Post-liberalization, India’s growth rate increased from 5.9 percent in 1994 to about 9 percent in 2008 (Tata Services 2009). At a time when major developed economies registered negative growth, India was expected to grow at about 6.2 percent in 2009–10 (Warrier 2009). By the 1980s, India had gradually transformed from an agrarian to a manufacturing economy. In the 1990s, however, it rapidly turned into a services economy. This was accompanied by three major changes: liberalization of the Indian economy, adoption of technology by firms and consumers, and changing consumer demographics. For India, as an emerging economy, the banking industry played an important role in propelling the economy forward. It was also instrumental in meeting national goals for poverty reduction and thus was being urged to expand coverage, drive financial inclusion, and bridge the rural–urban divide. Many opportunities for growth in banking remained untapped given that just 44.9 percent of Indian earners had bank accounts (62 percent in urban areas and 38 percent in villages) (Naik 2008). Though income levels continued to rise and 81 percent of households saved, about 36 percent kept their savings at home as cash (Marketing Whitebook 2009–2010).
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