DAVOS, Switzerland, (AFP) - India has a huge presence at this year’s Davos meeting, with bullish bosses hailing a booming economy but warning that creaking infrastructure and wealth gaps could yet stifle its stellar rise.
A massive poster trumpeting investment in “Inclusive India” greeted the 2,500 members of the global business, political and media elite at the annual meeting of the World Economic Forum at this Swiss ski resort.
India’s own power elite is out in force too, with dozens of chief executives making the trip to the snowy peaks, including Sunil Mittal, head of Bharti Enterprises and Azim Premji, chairman of Indian software major Wipro.
Speaking at the forum’s opening panel, Premji hailed a “complete shift in the balance of power” from the traditionally advanced economies in Europe and the United States to the new powerhouses in China, India and Latin America.
“In 10 years, the economy of the emerging world will be ... equal to or slightly larger than the US economy,” he said.
Mittal crowed: “In the past few months, India has had visits from all the leading lights of the world, the top five countries have visited India in the past months. 20 billion dollars in deals have been signed.”Despite the worldwide slowdown, India has continued to surprise.
The economy grew a forecast-breaking 8.9 percent year-on-year in the July-September 2010 quarter and the Delhi government forecasts an expansion of 9.0 percent in the current fiscal year to March 2011.
This rapid growth has forced the central bank to hike interest rates to their highest levels since early 2008 amid concerns about spiralling food prices fuelling inflation, a worry evoked by several Davos analysts.
Another persistent threat to India’s rise to global economic powerhouse status is the challenge of modernising its creaking infrastructure.
According to a survey of some 1,200 business leaders conducted by financial services firm PricewaterhouseCoopers, nearly nine in 10 said the inadequacy of India’s infrastructure was a threat to growth.
“You must remember that you are operating in an extremely diverse democracy, a successful democracy,” B.G.Srinivas, European head of Indian tech giant Infosys told AFP in an interview.
“Things do not necessarily go at the pace you might wish for.”India’s biggest challenge, according to many Davos participants, is bridging a growing gap between the haves and the have-nots, as it struggles with the world’s second-largest population and crippling rural and urban poverty.
While acknowledging the challenges, the president of the Confederation of Indian Industry, Hari Bhartia, said that wealth was beginning to trickle down to the less fortunate in society.
“With growth of nine percent you have a huge amount of resources available which were not available in the early nineties. That is starting to get through into the social sector, education, health care, food security,” he said.
“All the investment is starting to have an effect, in terms of money in the hands of the bottom third, which also gets spent creating demand for products and services. It’s creating a virtuous circle.””1.2 billion people make India a continent of consumers,” said Mittal.
And -- while one-upmanship among one’s peers in Davos is part of the fun of the show -- Srinivas said that, away from the promotional events, India has nothing to fear from competition from other emerging giants.
“It’s not about beating China and Brazil because in my view, all of these can co-exist. There is no need for one to beat each other,” he said. “As long as all these economies grow, it provides the world with opportunities.”