Young CEOs and executives must help to take the country to the next level, says P Chidambaram
Having shrugged off the impact of the global economic crisis, India appears poised to overtake China’s high growth rate in the next ten years, said home minister P Chidambaram.
“While the last decade was remarkable and exciting, this decade will be more exciting for India. There is more possibility that India could overtake China's growth rates,” the minister said at a function last night.
China, the world’s sixth largest economy, has recorded an average 9% growth over the last two decades, while India has seen growth touch 9% only in the three years till 2007-08. But the global financial crisis ate into this progress and growth slipped to 6.7% in 2008-09.
The Planning Commission, at its meeting chaired by prime minister Manmohan Singh earlier this month, scaled down India’s growth target for the 11th Five-Year Plan period (2007-12) to 8.1% from the previously estimated 9%.
“We are young and will continue to grow. Corporate India will continue to grow in the current decade. The young CEOs and executives must help to take India to the next level,” said Mr Chidambaram.
The minister’s confidence also stems from the fact that Foreign Direct Investment inflows— key to growth—have been increasing rapidly, although they slowed down during 2008-09 at the height of the financial crisis.
Mr Chidambaram also said that India will “become a part of the United Nations Security Council in this decade” and added that there was a need to make India a secure place so that the country's economic growth remained unblocked.
“There was a fear, but it is over. We are marching ahead to compete with others in every aspect,” he said.
Mr Chidambaram said that human resources will not be a burden for India in this decade—they rather prove to be an asset.
The foreign entity had spent Rs213 crore in June 2006 for a 37.5% stake in the Murugappa Group’s non-banking finance company
Development Bank of Singapore (DBS) had spent Rs213 crore to buy 37.5% stake in the Murugappa Group’s non-banking finance company, Cholamandalam Investment and Finance Company Ltd, in 2005-06. Yesterday it exited from the joint venture at Rs129 crore, making a straight loss of Rs83 crore.
This is not the first time when a foreign company which has jumped into the Indian financial sector has burnt its fingers. Earlier, mutual funds companies (like Threadneedle), broking companies (James Capel, Peregrine) and banks (BNP Paribas) have entered into India and exited at a loss. Some of them like BNP Paribas find India irresistible and have come back again.
According to a news report in 2005, DBS announced that it would spend about Rs228 crore to acquire 37.5% stake in the company. It actually acquired 142,21,985 shares at Rs150 in June 2006 as per its filing to the Bombay Stock Exchange. It was a strategic stake sale for Cholamandalam as well. The Murugappa Group was planning to gradually exit the financial services business and focus on fertilisers and other manufacturing activities.
A few months ago, both DBS and Cholamandalam sold their stakes in DBS Cholamandalam Asset Management to L&T Finance for Rs45 crore. It remains to be seen whether the Murugappa Group would like to invite another foreign company into Cholamandalam Finance for another round of musical chairs.
The music starts during a market boom when foreign companies suddenly focus on India as the next hot destination. DBS partnered with Cholamandalam to grow the personal finance business, asset management business and also the banking business for which it launched 10 branches. After the collaboration, the foreign partner was expected to grow the financial services business by using its expertise in retail loans. But in a script that plays again and again, DBS on Tuesday announced that it is exiting from the joint venture with Murugappa in Cholamandalam. The reason was major delinquencies in the personal loan portfolio. In September 2008, after a huge hit to its portfolio, it had decided to stick to vehicle financing and loans against shares. In May 2009, the company was forced to create a provision of Rs200 crore against bad loans. Almost 75 branches across India were closed down and 200 employees were laid off.
State-run oil companies are scouting for partners for technology and marketing support, and are seeking fresh sources for supply of crude oil
Moving beyond the supplier-buyer relationship, India has offered Kuwait a stake in Oil and Natural Gas Corp’s Rs12,440-crore petrochemical plant at Dahej in Gujarat and Indian Oil Corp’s (IOC) proposed chemical unit at Paradip, reports PTI.
The oil-rich nation's national oil firm Kuwait Petroleum Corp (KPC) has time and again spurned offers for stakes in Indian refinery projects as it, like its Saudi counterpart Saudi Aramco, wanted auto fuel distribution rights—a proposition not possible considering only State-owned firms qualify for government subsidies.
Petroleum minister Murli Deora met his Kuwati counterpart Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah on the sidelines of the XII International Energy Forum here yesterday and offered a stake in the mega-petrochemical plants being built on the west and east coasts, said Sunil Jain, joint secretary in the petroleum ministry.
ONGC is keen to get an overseas major who can either bring technology or marketing support for its Dahej plant that will be built by February 2012.
IOC has been for long looking at equity partners in companies like Saudi Aramco and KPC, who can supply crude oil to the Paradip refinery project in Orissa.
New Delhi is looking at Kuwait and other oil-rich nations in the Gulf region for meeting crude oil demand from India’s new refinery plants. India's refining capacity is to increase from 180 million tonnes (MT) to 250MT by 2012.
Prime minister Manmohan Singh’s recent visit to Saudi Arabia had yielded an assurance from the world’s largest oil exporter for increasing crude supplies from 25.5MT to 40MT a year by 2012.