Stephen S Roach, chief economist at the US-based Morgan Stanley, returning from his fourth trip to India in three years, said the South Asian country has achieved breakthroughs in savings and foreign direct investments that would script one of the world's most exceptional economic development stories over the next three-five years.
"I am returning from India with great enthusiasm. India has made solid progress on two counts -- savings and FDI -- and infrastructure development seems set to follow. These are breakthroughs that can unshackle India's greatest strengths -- a high-quality stock of human capital and the magic of its entrepreneurial spirit.
India's national saving at 32.4 per cent in the 12 months ending March 2006 is up significantly from the 25 per cent average of the 1990 to 2004 period.
At the same time, the aggregate investment ratio has moved up to 33.4 per cent as of March 2006, a major breakout from the 26 per cent average of the preceding 15 years. And foreign direct investment is on target to hit $13 billion in the 12 months ending March 2007, more than double India's previous best of $5.5 billion hit in the previous year.
Roach said the entrepreneurs are making great progress in three of India's most important areas - rural reforms, retail, and infrastructure.
"What blew me away were the corporate and entrepreneurial stories. For all the buzz over China, one of the great paradoxes of the world's greatest development story is that it only has a handful of truly world-class companies. By contrast, India has a much deeper and broader stable of very powerful businesses. Moreover, it's not just IT services - it's also telecom, pharmaceuticals, energy, steel, and auto components," the renowned economist said.
The just-announced Tata-Corus steel merger could well be a harbinger of the next wave of India's already impressive industrial prowess, he said.
"I would compare India's corporate leaders favourably with their counterparts in any other country in the world. Not only is this a huge advantage when compared with China, but it is likely to be a major plus for India as it fights for market share in the global competitive sweepstakes in the years ahead," Roach said.
