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The Rediff Business Special/ India Economic Summit

India's own mini Davos

Suddenly, economics is back centre-stage as the last month of the year 1999 arrives.

The Lok Sabha session, which began today, will see a slew of economic bills introduced, including the much-awaited Insurance Regulatory Authority Bill and a bill on e-commerce.

Then, the World Trade Organisation meet in Seattle begins tomorrow, whose decisions on trade and labour standards, is awaited with bated breath by the Indian industry.

To match these governmental activities, on the corporate front the India Economic Summit, conducted by the World Economic Forum, Davos, and the Confederation of Indian Industry, will be held from December 5 to 7.

The CII has also organised a mammoth insurance summit, which is currently on in the capital.

The India Economic Summit is an annual feature of corporate India. It is held a month prior to the World Economic Forum that is next scheduled for January 2000, and is the place wherein corporate India prepares for the WEF.

The indefatigable Rahul Bajaj, CII president and Bajaj Auto chairman, said the latest round of the IES would see the participation of 30 countries and 500 participants.

Bajaj, who has been associated with both the WEF and the CII since the late 1960s, pointed out that India was the only country where the WEF actually held an economic summit, a fact which was a matter of pride for the country.

WEF director Colette Mathur, who has been associated with IES from the beginning, said unlike the IES summits in the last couple of years or so, this time the interest abroad for participation was very high.

"We did not have to try to hard to get investors to take part in this year's economic summit," she said. Both Bajaj and Mathur were addressing the press in New Delhi.

Giving reasons for the renewed global interest in India, Mathur said: "One reason is that the world economy is in much better shape than it was over the last three years. The East Asian crisis is almost behind us, and investors are looking for new markets to diversify. The second reason is the return of a stable government to the Lok Sabha, which has given would-be investors confidence. And last but not the least, the Indian economy has been picking up over the past year. All the macro indicators are positive - manufacturing output is up while inflation is down."

In the latest IES round, countries making their debut include China and Hong Kong, South Africa and Saudi Arabia. South African firms too have shown a great interest in the insurance sector and a large contingent was in attendance at the CII insurance summit.

Mathur said that there were three key aspects for the coming IES meet. "First, both the prime minister and the finance minister are to address the plenary sessions. Both have spoken on the second generation of reforms. People worldwide would like to know what reform policies the government is planning.'' she said.

Rahul Bajaj explained that Commerce and Industry Minister Murasoli Maran would not address the IES because he would still be in Seattle for some post-WTO discussions.

The second aspect, according to Mathur, were the interactive sessions being held between Indian and foreign businessmen. "We have found that Indian businessmen love interactive sessions so this time we have arranged for more such sessions so that there can be an exchange of views and deals," she added.

The last aspect, the WEF director stated, was to bring some of the Davos flavour to New Delhi. "We have brought experts from the WEF to look at the future of multinationals, to speak on Indian companies seeking a listing on the Nasdaq or the NYSE. This was in response to the demand by Indian participants for lectures from such experts," she said.

Mathur stressed the need for some positive signal that Indian reforms had not stopped, even if they were slightly stalled. "Global investors do not have infinite patience, and while one realises that much has been happening in India, the fact is that investors have other markets. Hence, it is imperative that we send out the right messages to draw the investors here," she said.

According to her, one such signal could the passing of the IRA bill that has been hanging fire for well over three years now. "India needs to show one major success. And a statement about meeting certain targets in a timeframe will send a very strong signal across," she said.

The WEF director also spoke about the need to ensure transparency and accountability. "When decisions are taken either way, people need to know how and why the government reached those specific conclusions. This creates confidence in the mind of the investors," she pointed out..

Mathur said the latest IES meet would have a big focus on certain issues such as corporate governance, infotech convergence, the need to benchmark Indian companies against the best in the world, and special sessions on infrastructure subjects of power, water and transport.

Colette Mathur, who is of Swiss origin, declared that though certain social issues - healthcare, primary education, etc - were very important, they would not be discussed at this year's summit. "This year we are focussing on business since the economy is recovering. Next year we will focus on the social infrastructure issues," she promised.

When it was pointed out that India was tall on promises made at summits and very short on implementation, Bajaj replied, "We at CII couldn't agree more and we wish that somehow we could be involved with implementation to ensure that promises made are kept. But on the other hand, always remember that promises made, even if finally they are not kept, at least show the intention and desire. And as such, they do serve a purpose."

Concluding the press meet, Bajaj pointed out that there have been a few positive signals. "The fact that the prime minister has, ever since winning the elections, spoken constantly about the second phase of reforms, that even as we are talking, certain economic legislation are slated for introduction in the Lok Sabha is most welcome. "And the best sign has been the recent meeting between the finance minister and the chief ministers that decided for a uniform sales tax and introduction of VAT (value added tax) across the country. Otherwise before, we were like 23 different countries within India since each state had its own taxes," said the articulate CII president.

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