NEW YORK: An impressive 75 percent of foreign corporations with investments in India are making profits, according to 'The India Factor', a report released by Societe Generale Bank, one of the largest financial services group in Europe.

The report, which gives a comparative analysis of the opportunities and risks in China and India, was released at a well attended luncheon on June 4, in New York City, in the presence of India's Minister of State for Industries, Ashwani Kumar and a host of senior corporate executives.Detailing the strengths of the Indian economy, the Societe Generale report mentions the four straight years of 8 percent GDP growth that crossed the 9 percent barrier for the current financial year.

The report also talks about the solid macro fundamentals in high savings rate, diversified economy, FDI and portfolio investments; the purchasing power parity that reached $3,942 in 2006 (expected to go up to $4282 in 2007); and growth across the socio-economic spectrum with a nearly 300 million strong middle class and fastest growing number of High Net Worth Individuals in the world. India today has over 700,000 consumers with more than $100,000 in liquid wealth. The Report also showed how India was becoming globally competitive in many sectors: Auto components; Chemicals; IT services; Manufacturing; Pharma and Oil Refining etc. It also noted that with its expanding middle class and rising incomes, India was a consumption driven economy experiencing an infrastructural investment boom. Further, the report found that European corporations were strong in the construction, telecommunications, banking and consumer goods sectors. Keynote speaker on the occasion, Kumar drew attention to the strength of Indian democracy, which afforded political stability to the decision making process. He described the egalitarian philosophy which animates the economic reform program so that all stakeholders feel a sense of participation.

The minister particularly noted that in the last 22 years, the Indian economy has succeeded in pulling up 1 percent of the population, previously below the poverty line, every year. Describing the factors which led to 9.2 percent growth of the economy and more than 11 percent growth in the manufacturing sector last year and the potential for continued high rates of economic growth, the minister also spoke about the policies intended to address the infrastructure challenge, including the power sector.Institutional Investors meet.

The following day, Ashwani Kumar addressed a group of Institutional Investors at an interactive breakfast meeting, where he gave a presentation on the state of the Indian economy, highlighting its phenomenal growth cutting across various sectors.While outlining major policy initiatives such as the recently announced policy on Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR's), he emphasized the Indian government's commitment to continuing the process of economic reform.Kumar said that the resilience of India's democratic institutions had contributed to the economic growth of the country consistent with equality and freedom of its people.

Highlighting some of the success stories in India in fields such as real estate and manufacturing, he stressed that the qualitative distinction of India's success story was defined by the state's commitment to proactively intervene with a view to impacting positively on the living standards of the poor. The Minister's presentation was followed by a discussion with the bankers, fund managers and CEOs on the future growth potential of the Indian economy and the vast opportunities available to foreign investors.

The Minister informed that nearly 98 percent of the Indian economy was now open to foreign direct investment through the automatic route. He encouraged US companies to invest in major growth sectors such as infrastructure -- both physical and social -- which hold significant promise. He said that at least one-third of the estimated US$ 550 billion required to be invested in the infrastructure sector alone could come by way of Foreign Direct Investment & Foreign Institutional Investment. Speaking about the Indo-US Agreement on Civil Nuclear Cooperation, Kumar said that the Agreement was dictated by the need to access clean sources of energy for India's industrialization and economic growth. He felt that there was a need for deepening Indo-US economic engagement further. Business women's meetAt a breakfast meeting, June 7, with a group of leading American business women, the Minister for Industries emphasized the extraordinary growth of the Indian economy in the last few years.

He, however, admitted the country was facing challenges of both physical and social infrastructure. Underlining the government's efforts to improve both, he stated that there was a need for roughly $550 million to be pumped into physical infrastructure of which 1/3rd will come from foreign direct investments.Kumar said that India has been frequently accused of delayed decision making or "democracy deficit". However, this impression was not correct, he said. Various studies done in this regard have concluded that there is direct correlation between economic growth and democracy. Touching upon the on-going debate on climate change, Kumar pointed out that China and India should not be asked to assume responsibilities disproportionate to the damages done to the climate. He also emphasized the need to harmonize economic growth with the climate improvement. He urged entrepreneurs to look to India's strengths such as democracy, liberty, freedom, secularism and pluralism.

He also referred to the major policy initiatives such as the recently announced policy on Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR's). Responding to a question, Kumar said that the government was not going to artificially control the value of the rupee, though some steps would be taken to help exporters.

Touching briefly on the US-India agreement on civil nuclear cooperation, Kumar said that India was in dire need of power. Owing to this agreement, approximately 3500 mega watts of nuclear power would be generated by the year 2030 as against only 3000 mega watts generated in the last 60 years. He said that the increase in power would exponentially increase the GDP enabling India to surpass China and become the third largest economic power.

Comments (0)

Print

Tell friend

Top

---