Theyear gone by has seen several developments in the economic landscape
 in India and globally.  The United States has shown signs of recovery,
 and global financial markets have been relatively stable. At the same
 time, continuing concerns over the fiscal position of countries in
 Europe, events in the middle-east and north Africa, rising oil prices
 and emerging inflationary trends in many countries have emerged as
 challenges impacting the global growth outlook.
 
 India continues to be well-placed to achieve robust economic growth, in
 a challenging environment. Investment in infrastructure, urban
 development & rejuvenation, the growth of the rural economy and
 financial inclusion will be the key factors that will shape India in
 the coming decade.
 
 Investment in infrastructure will be a key driver of Indias growth in
 the coming years. The Government of India is targeting infrastructure
 investment of USD 1 trillion between 2012 and 2017. This will cover the
 whole gamut of infrastructure that forms the backbone of an economy:
 power, communications, transport, water resources management and so on.
 An investment of this magnitude will have significant positive
 implications for the economy, in terms of improvement in productivity,
 demand for various input goods and services, job creation and income
 growth.
 
 Economic growth and investment in infrastructure will drive urban
 development and urban rejuvenation. This will take many forms -
 modernisation and redevelopment of existing large cities; expansion and
 upgradation of existing second-tier cities that are emerging as
 important engines of growth; and the creation of new towns in corridors
 of infrastructure development and industrial investment. Growing
 urbanisation will spur demand for a range of services and sectors and
 improve standards of living.
 
 Rural India has over the years emerged as an important driver of
 Indias growth. The rural economy has become diversified, and rural
 India is now estimated to account for close to half the countrys GDR
 Thus, rural India contributes significantly to the industrial and
 services sectors, in addition to the agriculture sector. It also
 represents a large and fast-growing market for many goods and services.
 Government policies and schemes introduced over the last few years have
 enhanced the resilience of the rural economy.  The growth in per capita
 incomes in rural India will lead to accelerated reduction in poverty
 and socio- economic inclusion, and have significant positive outcomes
 for the economy as a whole.
 
 The engagement of a much larger section of our population in the
 economic mainstream through financial inclusion will be a key feature
 of our growth going forward. Developments in low-cost information and
 communications technology and the unique identity initiative have the
 potential to rapidly accelerate financial inclusion by reducing the
 costs of providing access to basic financial services, both in terms of
 initial enrolment and ongoing servicing. Banks are already working on
 business models to serve the un-banked segment through deployment of
 innovative solutions, and this will gain momentum in the coming years.
 
 Investment in social infrastructure - healthcare and education &
 training - is key to realising the benefits of our demographic dividend
 and spreading the benefits of growth. Here too, a range of initiatives
 are being taken by both the government and the private sector. There is
 recognition that building capacity among the poor to lead healthy and
 productive lives through access to basic healthcare and relevant
 primary and vocational education is essential for long-term,
 sustainable growth. It is essential for Indian business to be
 competitive and maintain healthy growth; and it is essential to the
 larger national goal of inclusive growth and prosperity.
 
 There will no doubt be challenges along the way.  The most immediate
 issue that policymakers are concerned with is inflation. This is in
 some ways a global phenomenon that is accentuated in India by our high
 economic growth and consequent increase in demand. Various measures are
 being put in place to address this, including monetary measures to
 contain demand side pressures. The results of these will be witnessed
 over time.
 
 The ICICI Group is a key player in Indias economic landscape. The
 management has in place a well thought out strategy for each segment of
 the financial services sector, catering to the diverse needs of
 customers across the spectrum.  This strategy is being executed within
 a sound governance framework that seeks to balance the interests of all
 stakeholders to ensure sustainable value creation.
 
 Let me end by saying that India is a land of great opportunity. The
 rapid changes of the last decade are only a precursor to the much
 greater growth and prosperity that we can achieve in the coming years.
 The ICICI Group is well placed to benefit from these opportunities.
 
 With best wishes, 
 K. V Kamath