India gearing up to hit double-digit growth.

The Indian economy is revving up to hit a higher growth trajectory with a “consistent double-digit annual surge” over the next 10 years, said Salman Khurshid, Minister for Corporate and Minority Affairs.
Integral to this new vibrant era will be India’s corporate sector, which is on track to outpace the country’s economic growth, paving way to “an exponential” capital market upswing over next five years, Khurshid told Khaleej Times here on Saturday.
India’s gross domestic product is projected to return to a growth phase of nine per cent soon, and 10 per cent from next year onwards, as economists predict the corporate sector to accelerate at 20 per cent cumulative annual growth over the next 10 years.
“Over the next 10 years, India will see a big spurt in foreign direct investment, and our target is to achieve 10-11 per cent annual GDP growth consistently,” he said. The minister insisted that economic growth should go hand in hand with social sector growth. “We will ensure that the poor should not get marginalised in the growth process.”
“India will explode in terms of growth opportunities, going forward. We are creating a whole new paradigm in healthcare, rural empowerment and education. The country will continue to attract more foreign direct investments with the imminent opening up of higher education, healthcare and insurance sectors,” he said.
India needs huge investments not only in infrastructure developments but also to galvanise various other sectors including education as the country expects to open up to 4,000 universities in the next five years, he added.
In 2009, India received $17 billion in foreign institutional investment inflows. Of this $13 billion went into initial public offerings and qualified institutional placement (QIP), leaving the corporate sector well cushioned to fund its capital needs.
On Satyam scandal and its stormy aftermath, Khurshid, an avid advocate for higher corporate governance norms, said: “Satyam is a success story. Now, we know how to deal with a corporate crisis.” He said new regulations are in place to enforce enhanced corporate governance and social responsibility (CSR) norms.
Khurshid said companies should try to really perform on their governance as well as social responsibility without the need for governmental intervention. However, the government can act as a catalyst to the whole exercise, he said.
In an interactive session with Indian businessmen and professionals at a luncheon hosted by Bank of Baroda, the Minister said prospects were bright for more Indian companies getting listed on overseas bourses with India moving closer to full currency convertibility on capital account. “It was good that it (full currency convertibility) did not happen before the crisis.”
He said only a fraction of the household saving in India has so far got capital market access. So the potential for growth is huge with the opening of more stock exchanges to help larger number of people, especially from rural areas, to invest.
Stressing the need financial inclusion in India’s growth story, he said the country of 1.2 billion people required multiple exchanges to achieve penetration of 100 million investors from around 15 million investors at present.
On India’s banking sector growth, and how it could withstand the global financial turmoil, Khurshid said the country’s conservative approach helped avert a banking crisis. “We have been conservative to allow banking to grow slowly and steadily.