Infosys Technologies founder N R Narayana Murthy has said he feels sad about the state of the Indian economy. He said that based on his interactions with global CEOs, he could see that India’s image had suffered internationally in the past 3-4 months. In an interview to Morgan Stanley Research, published in a report dated May, Murthy said between 2004 and 2011, the country had not introduced many reforms. “There was huge expectation. There was a lot of confidence that India would indeed do whatever was necessary because the person who was the face of economic reforms in 1991 is our current Prime Minister. In the opinion of foreign well wishers of India, we have reached our nadir since 1991,” he said.
Murthy said that for the country to get a growth rate of 8-9%, it needed to build very heavy infrastructure. This build, he said, would need investments of $1–1.5 trillion. “Such a large pool of capital cannot come from India alone. So we need participation from outside and, for the foreigners to come to India, we have to be seen as a proactive, investor-friendly, and stable governance model. This is where the government should not send the kind of signals that that it has recently sent by introducing tax laws on a retrospective basis. It does not matter what the intentions are. Nobody can understand intentions; people can only read the laws and then act,” he said.
He said the government would now have take steps to do something positive – “do something that says that we mean business; that means we want to welcome foreign investors. This has to happen particularly in the area of FDI because portfolio investments are fickle.”
He said outsourcing had been a great success story for India, but even that had been achieved by enormous investments by companies on training employees. He said India’s outsourcing advantage was facing a threat from China. “China is improving its English skills. Unfortunately, our political leaders are opposed to English. This will cause software development business to move to China,” he said.