PICTURE SPEAK

P. Chidambaram (left) and Manmohan Singh

Inaugurating the meeting, Prime Minister Manmohan Singh set the tone by suggesting that Pan-Asian free trade agreements (FTA) could be the future of Asia and could open up new growth avenues for India. India has concluded FTAs with the South Asian Association for Regional Cooperation, Singapore and Thailand, and is working towards similar arrangements with the Association of South East Asian Nations (ASEAN), as well as Japan, China and South Korea. "India is being linked in a web of partnerships with countries of the region through free trade and comprehensive economic cooperation agreements. This web of engagements may herald an eventful free trade area in Asia covering all major Asian economies and possibly extending to Australia and New Zealand," said Manmohan.

$50 Bn: For 40,000 km of highways including the six-lane Golden Quadrilateral and the four-lane east-west and north-south corridor $12 Bn: For adding 54 new berths to double the present traffic handling capacity of 400 million tonne at ports $5 Bn: For setting up freight corridors for container train movement by private players $20 Bn: For improving urban infrastructure and services in 60 cities $9 Bn: For building new airports in Hyderabad and Bangalore and upgrading the ones in Delhi and Mumbai

Others in the Singh parivar-Chidambaram and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia-did the rest. "It has taken India 14 years to evolve from a poor and perhaps forgotten country to a thriving and increasingly noticed emerging economy. It will take less time for the country to join the league of developed nations," declared the finance minister, likening the Indian growth process to the dance of an elephant. His optimism springs from factors like sustained high economic growth, external stability and the ongoing services boom. However, regarding infrastructure, he admitted India had just begun "to put the house in order".

PICTURE SPEAK

BY INVITATION: India wants investments of $150 billio

The average return on capital employed by multinational companies is 19 per cent and for five out of 10 companies, earnings from India are higher than the global average.

Every European and American bank earns higher profits than the global average through its India operations.

Several surveys have ranked India as the second-most attractive investment destination in the world for transnational corporations.

PICTURE SPEAK

TO PUT THE HOUSE IN ORDER: Infrastructure has to be spruced up

Y.S. Rajasekhara Reddy sought equity infusion into the Andhra Pradesh Industrial Infrastructure Corporation and suggested that the ADB establish a regional training and entrepreneur development centre in Hyderabad. While Goa Chief Minister Pratap Singh Rane pointed out that his state had much more to offer than tourism, Delhi's Sheila Dikshit explained how her state will see an infrastructure and construction boom in the next five years. West Bengal Finance Minister Asim Dasgupta appealed for greater international funding, while his communist comrades outside protested against the ADB meeting.

Clearly, the focus has shifted to showcasing India and its strengths since the "India Everywhere" campaign during the World Economic Forum meeting at Davos this year and the edge that India got at the Hannover Fair with Prime Minister Manmohan Singh at hand. The ADB event, usually a ho-hum affair, this time showed how India had learnt to convert events into opportunities. India has borrowed around $14 billion from the bank since 1986, and the ADB now plans to scale that up from an average of $1.24 billion to $2.65 billion by 2008. No big deal, as bankers would say. What was a big deal was the presence, at this meet, of finance ministers from member countries, like Japan, which are big-ticket investors. India used the event well to showcase its growth and to invite investors from these countries. The finishing touch came in the form of a virtual endorsement from Standard and Poor averring that India's improved fiscal situation was likely to raise the country's rating yet again.

If there was an embarrassing moment, it was the failure of ASEAN and three countries (China, Japan and South Korea) to invite India to discuss the Asian common currency initiative, despite the fact that Manmohan Singh openly endorsed it as the idea of the future. Chidambaram, though embarrassed, brushed it off with a cryptic "We are neither happy nor unhappy,"

Also, economists warn that India and fast-growing Asian economies should not get carried away by recent growth rates. Says ADB chief economist Ifzal Ali, "If a subsistence wage of $2 a day were to be taken as the poverty index, 42 per cent of the Chinese and 72 per cent of the Indian people would figure in the category of the unemployed or underemployed."

Even in sectors where India has innate strengths, there are challenges to overcome. NASSCOM has predicted a shortage of five lakh it professionals by 2010. "The industry is scaling up operations, but the supply is not matching demand and quality is a concern," says its president Kiran Karnik.

These were mild jarring notes. Within hours of the prime minister's speech, the big jolt arrived. Sonia Gandhi sprang a surprise, questioning the basis and advisability of signing FTAs. Clearly a reality check for Manmohan and his team. It is one thing to sell India to the world, but quite another to sell it to a vote-bank-obsessed Congress, which is missing the big picture.

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