Kamal Nath at Davos: India story is intact
The Financial Express, January 29, 2009, Page 1
Economy Bureau
New Delhi, Jan 28
On Day One at Davos, CEOs quizzed Indian policymakers on Satyam, exchanged notes on the impact of the global economic downturn summed up by a report released by PricewaterhouseCoopers, while the consulting firm’s global CEO winged his way to India to assess the fallout from the IT firm’s case on its operations in the country.
The head of the Indian delegation, commerce & industry minister Kamal Nath, said the India story was far more broad-based than evident from the Satyam affair. He recalled the performance of the economy over the past decade to point out the huge investments from the US and Europe. Parrying questions on the Satyam scam, Nath said investors were not looking at the episode as a red flag. He said some 60% of Fortune 500 companies are invested in India due to the confidence they have in the country.
Nath also fielded queries about the World Bank ban on Wipro, the weakening of the country’s GDP growth and a possible pullout by FIIs. He said the ban was the outcome of a World Bank employee buying Wipro shares and not any wrongdoing by the IT firm. The minister insisted that India would not be hit as badly as other nations by the financial crisis.
In an interview with BBC Hardtalk, he said, “India’s growth story is based on domestic demand. It is not based on the export market entirely. We can continue to keep our domestic demand-driven growth.” On FIIs pulling out $13.5 billion from Indian stocks in 2008, Nath said it was “not because of India’s fundamentals or because India was no more attractive”.
“(The pullout) is a tribute to the Indian financial governance sector that when they needed cash, the best way they could raise that cash was by selling Indian securities, not with a hit, but with a profit,” he said. Nath said the UPA government would, in the next couple of months, kick-start a $4-billion stimulus package for the infrastructure sector.
Meanwhile, to tackle the crisis at audit arm Price Waterhouse, whose India assurance leader Thoma Mathew stepped down and two of its partners were suspended in connection with the Rs 7,800-crore fraud, PricewaterhouseCoopers global CEO Samuel DiPiazza flew to India from Davos, where he was to attend the World Economic Forum.
The overall mood at the Swiss ski resort was one of gloom. Of the 1,100 CEOs polled by the PwC annual survey, only a fifth were confident that their firm’s revenue would show a growth in the next 12 months. This confidence level was the lowest in the seven-year-old survey. In a similar poll a year ago, half the polled CEOs were confident of revenue growth. A majority of CEOs this year said they expect some recovery only over the next three years.
The Financial Express, January 29, 2009, Page 1
Economy Bureau
New Delhi, Jan 28
On Day One at Davos, CEOs quizzed Indian policymakers on Satyam, exchanged notes on the impact of the global economic downturn summed up by a report released by PricewaterhouseCoopers, while the consulting firm’s global CEO winged his way to India to assess the fallout from the IT firm’s case on its operations in the country.
The head of the Indian delegation, commerce & industry minister Kamal Nath, said the India story was far more broad-based than evident from the Satyam affair. He recalled the performance of the economy over the past decade to point out the huge investments from the US and Europe. Parrying questions on the Satyam scam, Nath said investors were not looking at the episode as a red flag. He said some 60% of Fortune 500 companies are invested in India due to the confidence they have in the country.
Nath also fielded queries about the World Bank ban on Wipro, the weakening of the country’s GDP growth and a possible pullout by FIIs. He said the ban was the outcome of a World Bank employee buying Wipro shares and not any wrongdoing by the IT firm. The minister insisted that India would not be hit as badly as other nations by the financial crisis.
In an interview with BBC Hardtalk, he said, “India’s growth story is based on domestic demand. It is not based on the export market entirely. We can continue to keep our domestic demand-driven growth.” On FIIs pulling out $13.5 billion from Indian stocks in 2008, Nath said it was “not because of India’s fundamentals or because India was no more attractive”.
“(The pullout) is a tribute to the Indian financial governance sector that when they needed cash, the best way they could raise that cash was by selling Indian securities, not with a hit, but with a profit,” he said. Nath said the UPA government would, in the next couple of months, kick-start a $4-billion stimulus package for the infrastructure sector.
Meanwhile, to tackle the crisis at audit arm Price Waterhouse, whose India assurance leader Thoma Mathew stepped down and two of its partners were suspended in connection with the Rs 7,800-crore fraud, PricewaterhouseCoopers global CEO Samuel DiPiazza flew to India from Davos, where he was to attend the World Economic Forum.
The overall mood at the Swiss ski resort was one of gloom. Of the 1,100 CEOs polled by the PwC annual survey, only a fifth were confident that their firm’s revenue would show a growth in the next 12 months. This confidence level was the lowest in the seven-year-old survey. In a similar poll a year ago, half the polled CEOs were confident of revenue growth. A majority of CEOs this year said they expect some recovery only over the next three years.
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