India makes a big song and dance in Davos

It was perhaps in the fitness of things that the concluding dinner of Davos 2011 was hosted by the Indian government and the Confederation of Indian Industry.

The annual ball, renamed this year as 'India soiree', showcased the food, fashion and performing arts of the country.

And after four days of gruelling sessions, it was almost a comic relief to see foreigners (some of the biggest names in global corporations) dancing their way to glory to the beat of Indian music. The loudest cheer was of course reserved for actor Deepika Padukone who walked the ramp.

India clearly did not mind making a big song and dance about its emergence on the global stage. This year again, it was the rise of Asia and the broader apparent power shift away from the US and Europe to a fast expanding club of emerging economies that dominated discussions.

But what was different this time was the confidence with which the 130-strong Indian delegates (the largest ever) fielded questions about the new buzzwords back home -corruption, governance deficit etc.

Home Minister P Chidambaram summed it all up. Speaking at a session on the penultimate day of the World Economic Forum, the minister said it was true that corruption might have increased in India, but some aberrations were unavoidable when a country was growing so fast and the size of contracts increased manifold.

"While we will and are dealing with corruption with an iron hand, don't forget that India is not alone. Every single country, including the US, is grappling with the issue," he said.

Participants (largely Indians) in a session were highly critical of India's delivery systems and the fact that reforms were yet to trickle down to over 70 per cent of the population ("700 million Indians still defecate in public", said one of the speakers), but the audience gave all of them a standing ovation.

"I thought this will be a self-congratulatory session. But I appreciated the frankness; it shows the growing awareness of Indian civil society and the confidence of Indians in their future," said a Harvard University Economist who was part of the audience. Yet another Indian participant, who asked critical questions to the panelists, said it was a great feeling that he can still visit India. "I wouldn't have been that sure if I were a Chinese", he said, requesting anonymity as he has substantial business interests in that country.

Planning Commission Deputy Chairman Montek Singh Ahluwalia, said that precisely was India's strength. "The democratic process provides a lot of outlet and it does put pressure on the system. The government and policy makers treat them as valuable feedback," he said.

The confidence of Indian delegates was also visible when Ahluwalia didn't hesitate in saying that the International Monetary Fund (IMF) "may have erred on the side of optimism" when it projected India's gross domestic product (GDP) growth at 9.7 per cent. Ahluwalia said the country was well on course to achieve 8.5 per cent GDP growth in the current financial year and hoped to achieve 9 per cent next year, provided the uncertainties were taken care of.

Tata Consultancy Services MD & CEO N Chandrasekaran agrees with that view. "Not one of my clients thought that the issue of corruption, governance deficit, etc, are that big a problem. In fact, they didn't raise the issue at all. The best part of India is that gives your business a clear sense of certainty", he says.

You could also see a new swagger among the bosses of Indian companies who are emerging ace deal-makers. While Onkar Kanwar, chairman of Apollo Tyres, which bought businesses in the Netherlands and South Africa, said Indian companies were hungry and passionate to do things abroad, others said Indian companies clearly wanted to move beyond the advantage of cheap labour to create global organisations with the skill base found in Western companies.

According to Thomson Reuters data, last year emerging markets accounted for 33 per cent of the world's $2.4 trillion tally of all mergers and acquisitions. That was a 76 per cent increase over 2009, so it was not a surprise to see investment bankers, who crept back into Davos in greater force this year, swarming the 'meeting point' in the main Congress Centre to speak to Indian CEOs.

In any case, their best clients these days are from developing countries which sent the highest number of delegates to Davos this year.

Blackstone Chairman Steve Schwarzman, who attended many of the India-specific sessions this year, said while inflation was an issue in India, these were short-term glitches. "The longer-term India is a great, great value as the country has very strong fundamentals and the growth has been just terrific," he said.

Meanwhile, beyond whether the world is safe for business, a perennial anxiety of Davos-goers, the Alpine ski-resort also gave a platform to many global CEOs to do some serious introspection about what went wrong.

So while Nestle SA CEO Paul Bulcke said this was not a financial crisis, but a value crisis, where greed replaced ambition and confidence became arrogance, Pepsico Chairman Indra Nooyi said financial and trade analysts should be sent back to school to learn the basics of joint stock companies and what they were originally about.