That's the bottomline at Wharton School's 'mini-Davos' on India
VOTED the best business school in the country by USA Today, the Wharton School in Philadelphia probably has more business graduates of Indian origin than any other topnotch school in the US. These young Indians recently put together the Wharton India Economic Forum—an annual event that is aimed at being a "sort of mini-Davos".
Given the school's reputation, the forum titled 'India, Investing in a New Era' attracted prominent names in the business and financial world, both in India and the US. The seminar, sponsored by investment bank Lehman Brothers, made a strong pitch for US investment. The message went out loud and clear to the 450 participants—US and Indian corporate executives, Indian Government representatives, students, and faculty—that, despite its many challenges, India offers the best business opportunities. Three different perspectives were focused on: Investing in Infrastructure for Growth, Attracting Investment Capital and Investing in India's Consumer Industries.
Via live video-conferencing link from New Delhi, Finance Minister P. Chidambaram told the seminar that India was a better bet for US businessmen than China. He spelt out India's advantages: "Our system is open and transparent, we guarantee investments, there are attractive returns, and the size of the middle class in India is larger than the size of the middle class in China."
But what about the Enron controversy? "Enron is an aberration," said Chidambaram, but acknowledged that it has also been "a learning process for us...we do not believe there will be another case of Enron in India." He pointed out that "the project is now up and running, and will produce the first unit of power in 12-15 months." Dabhol Power Company CEO Sanjay Bhatnagar agreed: "What happened to us was unique...people shouldn't worry about other projects being caught up in a similar way." He added: "The Indian Government needs to define a comprehensive energy policy for the country...now is the time to consolidate and not keep reviewing policy."
Chidambaram then walked the participants through Budget '97 and explained how it would promote investments in India from foreign and domestic entities, and accelerate the privatisation process. Both Chidambaram and Reserve Bank Governor C. Rangarajan, who was the closing keynote speaker, spoke of the steps taken by the Government to achieve fiscal and monetary stability to attract foreign investment.
Raymond Vickery, US assistant secretary for trade development, praised the Indian budget but said the proof of the pudding would be in the eating—in this case, implementation and staying on course on economic reforms. How India tackles investment in infrastructure and consumer industries, and the issue of attracting investment capital would be crucial, he pointed out.
"No consumer product company with a global presence or ambition can really afford not to be in India," said Adi Godrej, managing director, Godrej Soaps, speaking on the fast moving consumer goods sector and its marketing and distribution challenges. However, he added, it would be to the advantage of US investors to take into account cultural differences and to appoint Indian representatives.
Microsoft's Sanjay Parthasarathy predicted that personal computers were "two years away from being the next hot consumer product in India". He pointed out that India must quickly improve its infrastructure to remain competitive in areas like access to the Internet and telecom costs. Parthasarathy admitted that piracy at 70 per cent (as compared to 40 per cent in the US) was an "important issue" for Microsoft in India.
Other speakers included Indian Ambassador Naresh Chandra; the Dabhol Power Company's Sanjay Bhatnagar; Benjamin Redd, president, Raytheon Infrastructure Services; S. Sunder, secretary, Indian Ministry of Surface Transport; Hubert Neiss, director, IMF; Thomas Gerrity, dean, The Wharton School; Edward Walsh, Stone & Webster; M.V. Subbiah, CEO, Murugappa Group; and Dr Parvinder Singh, chairman and managing director, Ranbaxy Laboratories.
Two of the best presentations came from panelists Purnendu Chatterjee, managing director, The Chatterjee Group, and Uday Kotak, vice-chairman, Kotak Mahindra Finance. The former spoke about the recent growth of private equity capital and the challenges that firms face in finding good value investments. Kotak addressed the developments needed in the financial markets to provide necessary capital and liquidity. The bottomline of the conclave appeared to be cautious optimism.
As Parvinder Singh of Ranbaxy pointed out: "It would be naive to miss the importance of India in the emerging global economy...we have plenty of the stuff it takes to build under difficult circumstances and the tenacity to hang in there till it happens."