Mr. Ritesh Gupta, Director, Corporate Banking for ANZ Capital, had a very interactive session about the importance of globalization of financial loan markets for the further growth of the Indian economy. He placed special emphasis on external commercial borrowings (ECB), foreign institutional investors (FII) and foreign direct investments (FDI).

    Mr. Gupta started off with a statistical comparison of the economic developments and scopes of India and China. Indian companies had raised a total of 25 billion USD from ECBs last year; while China has been steadily raising 8.1 billion USD each month for the last one year. There has also been a steady increase in the amount raised by Indian companies through FDI in the last decade. 21% of FDIs in India are targeted towards the services sector, especially the IT and Hardware/Software companies. The post-liberalization era of the Indian economy, which started two decades ago, has seen us grow throughout at a steady pace. China had liberalized its economy in 1978, thirteen years before India did. Since their liberalization, both economies have grown quite rapidly. Still, India’s growth rate is still not as high as that of China. Our capital requirement is so huge especially in infrastructure and basic industries, that if we want the optimum utilization of our resources, we need a lot more capital investments.

    He then delved into the impediments faced by Indian companies in drawing more capital, and Mr. Gupta attributed this to the government’s tax laws and policies, presence of red tape and the lack of opportunities. He also blamed the fuzzy and frequently changing environmental laws of the government, citing the recent Vedanta and Posco issues, which raised the philosophical “man-versus-environment” topic. He also drew a comparison with the economy of Indonesia, a country which has 60% of our population, as well as the same fraction of our GDP. He spoke about the presence of a lot of opportunities in Indonesia, and even though the country has a very poor corporate bond market, it still attracts a lot of capital investment from overseas.

    Mr. Gupta then ended the session saying that even though our growth pace may not be as great as China’s; we still have a very dependable financial authority in the form of RBI. RBI is well known for its highly effective policies, and has set a benchmark worth emulation for many other economies. He said that as long as our economy is controlled by the RBI, there is a little chance of economic slowdown in the country, and we shall grow at this steady rate, and perhaps one day it will reach great heights and then finally stabilize itself.