News: 'India Inc investment pipeline at $ 500 bn'

(BL 18/02/2007) Chennai - The investment pipeline of corporate India is of the order of $400 to 500 billion (or about Rs 20, 00,000 crore), according to K.V.Kamath, Managing Director, ICICI Bank.

Based on internal estimates, he said, corporate India was now sitting on a free cash flow (profits plus depreciation) of about $ 75 billion (equivalent to about Rs 3,37,500 crore).

Delivering the valedictory address at the annual convention of the Madras Management Association (MMA), Kamath said this investment pipeline was spread over a three year horizon and included all industries, both public and private sector.

Sounding a very optimistic note, he said that 10 per cent GDP growth was on a sound footing as Indian industry had become quite competitive. It was possible to grow at these rates on a sustained basis, he said. He drew a parallel in the way Japan, China and the tiger economies of South East Asia had registered double-digit growth rates for two decades and more at a stretch.

Alluding to concerns about growth being slowed down by inflation, he said that course corrections may happen and would be part of the growth cycle. But they wouldn't slow down the growth rate. He said China had faced inflation levels of over 20 per cent but had made adjustments and good progress in spite of it.

While acknowledging the role of the knowledge sector in kick starting the growth process in India, Kamath said that the dramatic speed with which Indian manufacturing sector became competitive and reinvented itself between 1999 (when things looked very bleak) and 2002 (when the first signs of hope emerged) was very commendable. No nation has achieved this in a span of three years, he said.