The Hindu Business Line : India entering golden era, says Deutsche exec

"DISCOVER India. Not the India of yore known for its spiritual traditions but `India of the 21st century', a country on the move," said Mr Atal Bihari Vajpayee, Prime Minister, addressing a gathering of businessmen and State heads at the Asean Business and Investment Summit in Bali on Tuesday.

The Prime Minister's hardsell apart, India, till recently considered to be in the "bullock cart" age with a "Hindu growth rate", appears to be climbing the bestseller charts.

According to Mr James Goulding, CEO, Asia-Pacific Region of Deutsche Asset Management Group, "India is entering a golden era. It has set out on a path of fabulous economic growth and is way ahead in the game in comparison to other Asian countries." Mr Goulding, who oversees management of about 40 billion euro of institutional money invested across Asia-Pacific, says as far as equity investments are concerned, the fund is overweight on India.

The confidence is grounded in some impressive economic fundamentals. The country's near-$90 billion forex reserves is the third largest hoard of dollars in Asia. The monsoon, the single biggest driver of economic growth of the country, was exceptionally good this year. Last week, Government data showed GDP grew 5.7 per cent in the first quarter, much higher than widely expected. A global economic research report prepared by Goldman Sachs says that India has the potential to show fastest growth over the next 30 and 50 years.

"Growth could be higher than 5 per cent over the next 30 years and close to 5 per cent as late as 2050 if development proceeds successfully," said the report, which forecast that in the next 40 years in terms of GDP, Brazil, Russia, India and China together would be larger than the current top six economies of the world. It predicts India's GDP would overtake that of Italy by 2015, France by 2020, Germany by 2025 and Japan by 2035. A Deutsche Bank research report expects India's GDP to grow at 6.4 per cent in 2003 and at 7.4 per cent in 2004.

The stock markets tell the story. Since April, the benchmark index of the Bombay Stock Exchange, the 30-share Sensex has jumped 60 per cent or a whopping 10 per cent every month. Institutional investors have poured in more than $4 billion in the first half of the financial year. In the first seven days of this month, FII inflows into Indian equities crossed Rs 1,800 crore, unprecedented in the country's stock market history.

Many more are preparing for the party. According to Mr Russell Stepke, founder of Resource Financial Corporation, a Chicago investment bank and private fund manager, "India is a country with enormous economic future. We are very bullish on the potential of Indian companies. There are quite a few world-class companies here waiting for investments." Mr Stepke, whose clients expect returns in excess of 30-35 per cent, is putting together a $300 million, India-specific private equity fund with a Mumbai-based investment advisory firm Brescon.

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