India is a safe harbour in crisis: K V Kamath

India has emerged as one of the few safe harbours globally after the recent global turmoil and overseas investors have started looking favourably at the country, Kamath told PTI in a telephonic interview from Kyoto, Japan.

“There is an admiration for the country that has grown respectably despite the global crisis ... there is a huge increase in confidence level ... global fund houses are seeing India as a safe harbour, a favoured destination,” he said.

Noteworthy achievment

Kamath noted that it was no mean feat as there were very few safe harbours across the world. “Brazil could be another and China may become the third ... there are no other major such economies,” he added.

“Top of it, it is across-the-board growth here and the investors are seeing India as a growth story — from financial services to infrastructure to manufacturing to knowledge industry to services space,” he said.

Kamath said that infrastructure alone would need $750 billion  (about Rs 3,75,000 crore) over the next three years, one-third of which would come from corporate India and the remaining from the local and overseas institutions through equity or debt.

Change in scenario

When pointed out that much progress could not be seen due to the global economic crisis on his earlier projection of an estimated investment of $750 billion in infrastructure, Kamath said the scenario has changed again. “I would say that the last number we had before the global situation, we were talking about an investment of $750 billion over the next three years. Our assessment now shows that number coming back on the table,” he said.

“It’s huge money for a period of three years ... six months ago, it looked like that the number has gone off, but that number is coming back,” he added.

Source of funds

When asked about the source of funds for such a massive investment, Kamath said: “I would say, corporate India would generate two-thirds of this and one-third will have to come from either domestic equity or global equity or debt.” “It’s confidence that matters ... Corporate India has now found that India is on a good footing and they have found that global investors are willing to support. I think that gives the confidence to move ahead.

“Global funds which actually were trying to find where they could invest across the world, now fund India as a safe harbour to come in now and invest.”

Asked if it could be another bubble in the confidence level that was seen a few years ago, Kamath said, “There are broadly two differences from the scenario seen two years or five years ago ... today, India is growing, but the value and price is also right and Indian economy has delivered and then fears have been removed.”

Optimistic about future

Kamath further noted that India has proved to the world that it can manage its economy well, in terms of factors like liquidity management.

On what was the message that has gone to the investors across the world from the formation of the new Government in the country, Kamath said, “There is a very clear message that says this is a five-year term, there is a Prime Minister in complete control of future of economic policies.”
Press Trust of India

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