GE to boost IT, finance services

Diversified firm General Electric is looking to expand its software and financial services business in India to take advantage of a vast pool of domestic talent, its chairman John F Welch said on Saturday.

"We are in less capital intensive businesses (in India), we are expanding our laboratories, expanding our software businesses....the dream of intellectual capital in India is coming through faster and bigger than we ever thought," Welch told reporters after a meeting with leading Indian businessmen.

The firm was also planning to expand its financial services business in the country and was looking at the recent opening of India's insurance sector as an avenue of growth, he said. India allowed private companies to enter the life and non-life insurance businesses in August. It also allowed foreign firms to enter the sector through joint ventures with private Indian firms subject to a foreign equity cap of 26 per cent.

GE Capital, the world's largest non bank finance company, is already a large player in India's financial markets and operates an offshore call-centre outside Delhi.

Welch will inaugurate GE's largest research and development facility outside the United States on Sunday, The GE India Technology Centre in Bangalore. The facility is expected to be the company's largest R&D centre by 2001.

GE is a diversified conglomerate with interests in power generation, financial services, aircraft engines, transport, medical systems, plastics, lighting and appliances and had revenues of $112 billion in 1999, a company statement said.

Welch, however, warned that India could fail to exploit its intellectual capital and fall behind in the digital age if it failed to reform its cash-strapped and creaking power sector.

"When you talk about digitising India, the massive amounts of power that you will require...is beyond belief...we made more gas turbines in the third quarter of this year than in any single year in our entire history but the US was short of power," he said.

Small computers and server farms that drive digitisation are extremely power hungry, he said.

India needed to push harder for private investments in the power sector, he said.

GE's current combined sales in India were worth about $1 billion, he said. Welch added that the rate of growth had been below expectations but India remained a market with great potential.

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