Rakesh Mohan, Secretary, Department of Economic Affairs, on Tuesday pointed out that the Indian economy was on the move with the gross domestic product growing at about 7 per cent last year and investment levels in the country also going up.
In New York, addressing a conference, on 'India's Financial Markets, organised jointly by the Confederation of Indian Industry and the Asia Society, Mohan said that there was new confidence in the air, a direct result of the consistent and continuous reforms that have been undertaken by successive Indian governments.
Speaking at the conference, marking the conclusion of CII's India-Connect USA roadshows, Mohan, a former Reserve Bank of India deputy governor, highlighted the changes that are taking place in the Indian financial markets.
He pointed out that while many Asian economies burnt themselves during the Asian crisis, India remained insulated mainly owing to its financial stability.
According to Mohan, the slower pace of reforms being undertaken by India had helped the country build a financial system that can mitigate all risks, promote stability and become globally competitive.
The government, he said, had undertaken several reforms over the years which include the opening up of the banking sector to private parties, reduction of the statutory liquidity ratio (SLR), reduction of non-performing assets over advances, and also moving from a fixed to a floating exchange rate regime.
On monetary reforms, Mohan mentioned that India's monetary policy, like that of the United States, has multiple objectives including controlling inflation, ensuring price stability and financial stability. But according to him a lot more needs to be accomplished, including convincing banks to develop higher levels of risk appetite, moving towards capital account convertibility for the Indian rupee, ensuring better credit delivery mechanisms by banks, and improving corporate governance and transparency levels of commercial banks.
In his remarks, Sunil Kant Munjal, President CII and CEO, Hero Corporate Services, said that over the last few years, as the Indian economy has opened up and government control decreased, Indian entrepreneurs have became more confident.
In his introductory remarks, Scott Bayman, President GE India, also hailed the reforms process in India and pointed out to the emergence of a new class of Indian consumer who had a high propensity to consume.
Bayman said that even as manufacturing in India was world class the financial reforms. Banking reforms and the recent open skies agreement between India and the US provided enough opportunities to the US companies to invest in India.
Addressing a session on 'India's Capital Markets: Sustaining Reforms and Moving Into the Next Level,' Timothy Massad, Partner, Cravath, Swain & Moore, mentioned that the size of the domestic public offerings in India increased from $139 billion during the period 1997-2003 to $178 billion during 2004.
At a panel on 'Investing in India: New Players, Expanding Focus,' Rajiv Lall, CEO, IDFC, highlighted infrastructure and real estate as the new opportunities existing for investment in India.
L Brooks Entwistle, Managing Director, Goldman Sachs; Henry Sender, staff writer, Wall Street Journal; and Chip Kaye, Co-President, Warburg Pincus agreed that the Indian companies had grown at a rapid pace and had attained the confidence and the creditability to go global. According to Kaye, tourism was also another potential sector for investment.