The Next Hurdle For Indian IT

India is fast becoming a global hub for back-office services as U.S. and European companies increasingly shift their information technology services, call-center operations and other business processes to it, either by opening their own units there or by outsourcing processes to Indian service providers.

What's fueling the stampede, of course, is the desire to gain access to the country's lower-cost, high-quality labor--in some technology areas, higher-quality labor--as well as global technological changes that make it possible to offshore white-collar activities that once had to stay close to home.

Infosys Technologies (nasdaq: INFY -news - people ), one of India's premier technology services companies, is based in Bangalore, ground zero in the offshoring ferment. Founded in 1981, it helps Fortune 500 companies design, build and maintain very large business-software applications, such as an integrated merchandising solution and a Web-based broker trading platform, and also provides IT-consulting services.

Infosys grew modestly during its first decade, finishing 1991 with $3.89 million in revenue. The liberalization of the Indian economy in 1991 spurred the growth of the company, which took the opportunity to globalize its operations. Its revenue exploded, to about $121 million by fiscal year 1998-99. Application-development costs in India were one-fifth of U.S. levels, so Western customers continued to jump on the offshoring bandwagon. By fiscal year 2002-03, the company's revenue stood at $754 million.

Yet the Indian IT-outsourcing market is already changing, and analysts point to some dark clouds on the sector's horizon. Giant IT services firms, such as Accenture (nyse: ACN - news - people ) and Electronic Data Systems (nyse: EDS - news - people ), and many global IT-consulting firms, such as Computer Sciences (nyse: CSC - news -people ), are opening their own software-development centers in India. So are large Western software-product companies, such as Microsoft(nasdaq: MSFT - news - people ) and Oracle (nasdaq: ORCL - news -people ). All these will compete with Indian companies for local talent.

Global IT-services firms also compete for work against Infosys and its Indian peers. Eventually, the software-product companies may even encroach on some service areas. At the same time, customers are squeezing IT vendors--including Indian technology firms--for price cuts across the board. Margins have fallen.

Narayana Murthy, the co-founder and chairman of Infosys, believes that his company is well positioned to compete with both Indian and Western challengers in the fast-growing market for offshore IT outsourcing. Offshoring isn't solely a matter of arbitraging low-cost labor, he argues. Providing low-cost, high-quality software-development services remotely requires well-developed processes for managing large-scale projects in distributed locations--capabilities that Indian technology services companies have honed during the past two decades.

In a conversation at the company's Bangalore headquarters with Jayant Sinha and Gautam Kumra, both principals in McKinsey's Delhi office, Murthy discussed these capabilities, the economic differences between Indian and Western IT services firms and the challenges facing Infosys.

McKinsey Quarterly: Western companies have long had the opportunity to move IT services offshore, but until recently only a few pioneers did. Now the climate has changed dramatically. From your perspective, what has put the bloom in the offshoring rose?

Narayana Murthy: While the pressure on Western corporations to leverage the power of technology has been mounting for years, it became acute in the late '90s, and there was a tremendous shortage of trained manpower to do the application-development work involved. Infosys and other Indian companies have the trained manpower and can do the work while giving greater value for money. That, I would say, is what's driving this.

But we also have had to work hard to create awareness among Western companies that we could do the work. In the early '90s, when we went to the United States to sell our services, most chief information officers didn't believe that an Indian company could build the large applications they needed. The CIOs were very nice to us, of course. They offered us coffee or tea, listened to what we had to say and then said, "Look, don't call us--we'll call you." We realized that there was a huge gap between, on the one hand, how prospective Western clients perceived Indian companies and, on the other, our own perception of our strengths.

Thanks to a concerted effort by our industry association--the National Association of Software and Service Companies--by individual companies in our industry and by the government of India, we mounted a campaign to enhance awareness among prospective clients in Western countries of our sector's value proposition. Western companies had a tremendous shortage of trained manpower, and we made them aware that we had a solution. That was how it took off. By 1999, about 185 Fortune 500 companies had started sourcing software from Indian companies. The fact that the revenues of India's technology services sector grew from about $160 million or so in 1991 to about $10 billion last year is a very clear indication that there is greater acceptance of our sector's value proposition.

Still, I would say that awareness among Fortune 500 CEOs of what Indian companies can offer has become even sharper since 2001, when the technology bubble burst and companies started trimming their IT budgets and looking for better value for their money.

Ratan Tata reveals why he did not get married

Revealing one of the best kept secrets of his personal life, the bachelor industrialist Ratan Tata has said that he had fallen in love and had come seriously close to getting married as many as four times.

But in the hindsight, he thinks it was not a bad thing to remain unmarried and the situation would have been more complex had he got married, Tata said in an interview to CNN International's Talk Asia programme.

"When you asked whether I'd ever been in love, I came seriously close to getting married four times and each time it got close to there and I guess I backed off in fear of one reason or another," he said.

He replied in the affirmative when asked whether he had ever been in love. When asked how many times, he replied, "Seriously, four times."

Ratan Tata, 73, heads one of the country's biggest business empires which comprises nearly 100 firms with revenues totalling about $67 billion.

He is scheduled to retire in December, 2012 when he turns 75.

Asked to speak more about his love life, Tata said: "Well, you know one was probably the most serious was when I was working in the US and the only reason we didn't get married was that I came back to India and she was to follow me..."

"... and that was the year of the, if you like, the Indo-Chinese conflict and in true American fashion this conflict in the Himalayas, in the snowy, uninhabited part of the Himalayas was seen in the United States as a major war between India and China, and so she didn't come and finally got married in the US thereafter."

Asked why he never got married, Tata said: "Each of the occasions (the four times he was close to getting married, but did not) was different. But in hindsight, when I look at the people involved, it wasn't a bad thing what I did. I think it may have been more complex had the marriage taken place."

Asked whether any of the people he was in love with were still in the city, he replied in the affirmative, but declined to speak any further on the matter.

"Oh, well, because of the people that are here, and, of course, this may be aired in the US. . . So I'd be in trouble, whatever I do. So I think I'd better stop here," he added.

Speaking about the business environment in India, Tata said in the CNN International's Talk Asia interview that his group has succeeded in growing without indulging in things like kickbacks and bribes.

"I would say that we could have grown faster and could have prospered more as a group, but we have never, we have never in fact partaken in this kind of activity," he added.

Asked whether anyone in his company or any lobbyist did anything inappropriate or illegal, he added: "I can say with my hand to my heart that we have not in fact partaken in any clandestine activity. I am hopeful that the investigations that are underway will truthfully bring out the position and that the truth will be on the table before too long."

Speaking further about the corruption issue, he added: "I think what's happening now in terms of things being before the courts, I hope will put things in the right perspective. I hope that it doesn't become a nation of scandals and allegations as they are," he said.

"I think more importantly the media has to be more circumspect and be careful they don't malign or allege or convict people before they've had a fair trial," he added.

Asked whether it was hard to be an honest businessman in India, Tata said: "I think there are many honest businessmen, I think there are many that bend. I'm happy that I have not bent, not that I am dishonest, that I have not bent."

Besides the group's promoter company Tata Sons, Ratan Tata is chairman of major group companies like Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices.

During his tenure, the group's revenues have grown nearly 12-fold, totalling $67.4 billion in 2009-10.

He also serves on the boards of Fiat SpA and Alcoa and is also on the international advisory boards of Mitsubishi Corporation, the American International Group, JP Morgan Chase, Rolls Royce, Temasek Holdings and the Monetary Authority of Singapore.

Cost cutting: Obama to tax rich Americans

In a pathbreaking move, US President Barack Obama said he will not extend tax cuts for rich Americans.

Explaining that America cannot support the rich population with tax sops anymore, Obama said he would not renew the ten-year reduction for families make more than $250,000 a year and individuals making more than $200,000.

Middle class Americans will continue to enjoy tax benefits.

However, critics point out that rich Americans already pay a higher taxes when compared to rich citizens of other European nations.

Pointing to the huge deficit caused by the controversial policies, Obama said, "We are ready to give tax cuts to every American making $250,000 or less. For any income over this amount, the tax rates would go back to what they were under President Clinton."

"From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America's wealth and prosperity. More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government," he said.

Recounting America's downfall, Obama said the country's finances were in great shape till year 2000.

"We went from deficit to surplus. America was actually on track to becoming completely debt-free, and we were prepared for the retirement of the Baby Boomers. But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed," he said.

The increased spend on two wars and an expensive prescription drug program and tax cuts for millionaires and billionaires have wrecked the nation's fiscal status, Obama said.

Tax cuts will force the nation to borrow an average of $500 billion every year over the next decade.

"When I took office, our projected deficit was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more. In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pockets. It was the right thing to do, but these steps were expensive, and added to our deficits in the short term," Obama said.

Obama said by the end of this decade, the interest we owe on our debt could rise to a whopping $1 trillion.

"As the Baby Boomers start to retire and health care costs continue to rise, the situation will get even worse. By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs, Social security, and the interest we owe on our debt. That's it. Every other national priority - education, transportation, even national security will have to be paid for with borrowed money," Obama said.

Warning that rising debt will cost Americans their jobs and hit the economy, Obama said it will also prevent America from making the investments the nation needs to win the future.

"We won't be able to afford good schools, new research, or the repair of roads and bridges all the things that will create new jobs and businesses here in America. Businesses will be less likely to invest and open up shop in a country that seems unwilling or unable to balance its books. And if our creditors start worrying that we may be unable to pay back our debts, it could drive up interest rates for everyone who borrows money making it harder for businesses to expand and hire, or families to take out a mortgage,"

Obama announced a four-pronged strategy to put the nation on the growth path.

The first is to keep annual domestic spending low by building on the savings that both parties agreed to last week a step that will save America about $750 billion over twelve years, he said.

The second step is to find additional savings in the defence budget.

The third step is to further reduce health care spending in the budget.

And finally the fourth is to reduce spending in the tax code.

Taking the wealthiest Americans is the only way to prevent a tax hike on middle-class Americans, Obama said.

"My budget calls for limiting itemised deductions for the wealthiest 2 per cent of Americans a reform that would reduce the deficit by $320 billion over ten years," Obama said.

Obama said he is confident that these measure can reduce the deficit by $4 trillion over the next twelve years.

He explained that this cost cutting method would help save $2 trillion and will lower interest payments on the debt by $1 trillion.

"It calls for tax reform to cut about $1 trillion in spending from the tax code. And it achieves these goals while protecting the middle class, our commitment to seniors, and our investments in the future.

If the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress," Obama said optimistically.

Kotak MF launches 370 Days FMP

Kotak mutual fund launched a new scheme named as Kotak FMP Series 44. The scheme is a close ended debt scheme, having the time duration of 370 days from the date of allotment of units. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue will open for subscription on 15th April 2011 and will close on 18th April 2011.
Exit and entry load charge will be nil for the scheme. The schemes performance will be standardized against Crisil Short Term Bond Index. The scheme offers both growth as well as dividend payout option. The minimum application amount is Rs. 5,000 under the scheme and in multiples of Rs. 10 thereafter. Mr Deepak Agrawal and Mr Abhishek Bisen be the Fund Manager for the scheme The fund looks for a minimum subscription amount of Rs. 1 crore under the scheme as collection.

The asset allocation of scheme will be in such a way that the scheme’s objective of generating return will be meet but with a minimum exposure to risk, hence 100 per cent of assets will be allocated in debt, money market instruments and government securities with low to medium risk profile. Therefore, through investment in a portfolio of debt and money market instrument, the fund’s primary objective is to avoid interest rate volatility for generating the income.

The fund had also launched a similar scheme on 18th March 2011 named as Kotak FMP S – 42. The scheme is showing the positive return of 0.46 per cent during March 29, 2011 to April 13, 2011. The current NAV of the scheme is Rs. 10.0684 as on 13th April 2011 under dividend option of the scheme. Another scheme in same category, which commenced on 14th March 2011, named as Kotak FMP S – 40, is posting the positive return of 0.43 per cent during March 29, 2011 to April 13, 2011.

Proud to be an Indian - Business legends

1. Lakshmi N Mittal (Rank 6)

With a wealth of $31.1 billion, ArcelorMittal chairman and CEO, Lakshmi Mittal pipped Mukesh Ambani to become the richest Indian and the 6th richest man in the world.

Last year, his total wealth was $28.7 billion.

Mittal founded Mittal Steel Company (formerly the LNM Group) in 1976. In 2006, the company merged with Arcelor to become the world's largest steelmaker.

2. Mukesh Ambani (Rank 9)

Reliance chairman Mukesh Ambani is the second richest Indian with a wealth of $27 billion.

Mukesh Ambani's fortune stood at $29 billion last year and he was the 4th richest man in the world.

Mukesh Ambani had been the richest Indian for three years from 2007 to 2010.

(World ranking in brackets)

3. Azim Premji (Rank 36)

Software czar Azim Premji, with a fortune of $16.8 billion is the third richest Indian. Premji's wealth has slipped from $17 billion.

Premji plans to set up a new endowment trust with a Rs 8,846 crore ($2 billion) to fund various educational initiatives.

4. Shashi & Ravi Ruia (Rank 42)

Brothers Shashi & Ravi Ruia, who head the Essar group are the fourth richest businessmen in India. Their net worth has risen from $13 billion last year to $15.8 billion.

5.Savitri Jindal & family (Rank 56)

Savitri Jindal is the richest woman in India Inc. The non-executive chair of O P Jindal Group, she took over the steel and power conglomerate founded by her late husband Om Prakash in 1952.

Her net worth rose to $13.2 billion from $12.2 billion in 2010.

6. Gautam Adani (Rank 81)

Chairman of the Adani Group, Gautam Adani's net worth has jumped to $10 billion from $4.8 billion last year to become the 6th richest Indian.

7. Kumar Mangalam Birla (Rank 97)

With a net worth of $9.2 billion, chairman of the Aditya Birla Group, Kumar Birla is the 7th richest person in India. His fortune has risen from $7.9 bilion last year.

8. Anil Ambani (Rank 103)

It has been a downfall for the chief of Reliance Anil Dhirubhai Ambani Group, Anil Ambani. He has fallen 4 places in the richest list with a net worth of $8.8 billion. Last year, his fortune was $13.7 billion.

9. Sunil Mittal & family (Rank 110)

With a fortune of $8.3 billion, chairman of Indian telecom giant Bharti Airtel, Sunil Mittal and family maintained their position this year as well.

Last year also, they were ranked the ninth richest in the country with a wealth of $7.8 billion.

10. Adi Godrej & family (Rank 130)

Chairman of the Godrej group, Adi Godrej is the tenth richest Indian with a new worth of $7.3 billion, up from last year's $5.2 bilion.

11. Kushal Pal Singh (Rank 130)

Chairman of DLF, Kushal Pal Singh was pushed out of the top 10 list this year. His net worth fell from $9 billion in 2010 to $7.3 billion.

12. Anil Agarwal (Rank 154)

Agarwal is founder-director and executive chairman of the UK-based Vedanta Resources corporation. He is the 12th richest Indian with a fortune of $6.4 billion, and the 154th richest man in the world.

Agarwal is also chairman of Sterlite and is a director of BALCO, HZL, and Vedanta Alumina Ltd.

13. Dilip Shanghvi (Rank 159)

Dilip Shanghvi, chairman of Sun Pharmaceuticals saw a rise in fortune to $6.1 billion from $4.6 billion last year.

14. Shiv Nadar (Rank 182)

Shiv Nadar, founder of HCL, saw his fortune zoom to $5.6 billion from $4.2 billion last year. He is the 14th wealthiest Indian and the world's 182nd richest man.

15. Malvinder & Shivinder Singh (Rank 265)

Former Ranbaxy CEO Malvinder Singh and his brother Shivinder Singh saw a rise in wealth to $4.1 billion from $3.2 billion last year.

16. Kalanithi Maran (Rank 310)

Media tycoon Kalanithi Maran heads Sun TV, India's biggest regional broadcaster. From $2.9 billion last year, Maran's wealth has risen to $3.5 billion.

17. Uday Kotak (Rank 347)

Uday Kotak, founder of the Kotak Mahindra Bank is ranked at 17 among the richest Indians. His fortune stood at $3.2 billion.

18. Micky Jagtiani (Rank 376)

Micky Jagtiani, CEO of the Landmark Group has a fortune of $3 billion. He has moved 3 places ahead compared to last year in the rich list.

19. Subhash Chandra & family (Rank 393)

Media baron and Chairman of Essel Group, Subhash Chandra,with a fortune of $2.9 billion, has moved one place ahead in the list.

20. Pankaj Patel (Rank 440)

Pankaj Patel, chairman and managing director of Cadila Healthcare, the fifth largest pharmaceutical company in India has a net worth of $2.6 billion.

21. Indu Jain (Rank 440)

Indu Jain is the second richest woman in India. Chairperson of Bennett & Coleman Ltd and a spiritualist, her fortune stands at $2.6 billion, lower than $2.8 billion last year.

22. G M Rao (Rank 440)

Founder chairman of the GMR Group, G M Rao's wealth has fallen to $2.6 billion from $3.2 billion last year.

23. Cyrus Poonawalla (Rank 512)

Cyrus Poonawalla is the founder of Serum Institute of India, fifth biggest vaccinemaker by volume in India. His net worth is $2.3 billion.

24. Rajan Raheja & family (Rank 540)

Rajan Raheja started off his innings in the construction business. After establishing himself in the realty market, Rajan Raheja Group diversified into manufacturing, financial services and media. His net worth stands at $2.2 billion.

25. Desh Bandhu Gupta (Rank 564)

Desh Bandhu Gupta established Lupin in1968. Based in Mumbai, it is one of the world's largest manufacturers of the anti-TB drugs. Gupta's fortune is pegged at $2.1 billion.

26. N R Narayana Murthy & family (Rank 595)

Infosys co-founder and mentor Narayana Murthy is the 26th richest Indian with a net worth of $2 billion.

Murthy has established the Catamaran Venture Fund with a total of $130 million dollars to invest in early stage companies. Murthy plans to invest in startups focussing on healthcare, education and nutrition.

27. Gautam Thapar (Rank 595)

Chairman and the chief executive officer of the Avantha Group, Gautam Thapar's net worth is estimated to be $2 billion.

28. Sudhir & Samir Mehta (Rank 595)

Brothers Sudhir & Samir Mehta run the pharmaceuticals and power company, Torrent group. Their net worth is pegged at $2 billion.

29. Aloke Lohia (Rank 595)

Indorama Ventures listed on the Stock Exchange of Thailand in February 2010 was established in 1995 by Aloke Lohia. Lohia's net worth is pegged at $2 billion.

Indorama group of companies was established in Indonesia by group patriarch ML Lohia. Today, his sons have established leading companies that are among the world's largest manufacturers of polyester.

30. Venugopal Dhoot (Rank 651)

Venugopal Dhoot is chairman of Videocon Corporation, which makes a wide range of electronic consumer goods. Venugopal Dhoot was instrumental in expanding Videocon Industries into a multi-billion dollar business conglomerate. His net worth stands at $1.9 billion.

31. Chandru Raheja (Rank 651)

A low-profile real estate entrepreneur, Chandru Raheja scaled up his small scale property firm into a major real estate group K. Raheja group. Shoppers Stop, Hypercity and In Orbit Malls are a part of the K.Raheja group. His fortune stands at $1.9 billion.

32. Nandan Nilekani & family (Rank 692)

Infosys co-founder Nandan Nilekani with a net worth of $1.8 billion is a part of India's richest list. He left Infosys in July 2009 to head the Unique Identification Authority of India (UIDAI).

33. Ajay Kalsi (Rank 736)

Ajay Kalsi is the CEO of Indus Gas Ltd, an oil & gas exploration and development company. His net worth is pegged at $1.7 billion.

34. Rahul Bajaj (Rank 782)

Rahul Bajaj took over the Bajaj Group in 1965. Under his leadership, Bajaj Auto grew to become one of India's top automobile companies. His fortune stands at $1.6 billion.

35. S Gopalakrishnan & family (Rank 782)

Infosys co-founder and CEO, S Gopalakrishnan is among the richest Indians with a wealth of $1.6 billion.

36. Brijmohan Lall Munjal (Rank 833)

Founder of The Hero Group, Brijmohan Lall Munjal's fortune is pegged at $1.5 billion.

Founder-chairman of Dr Reddy's Labs, K. Anji Reddy's wealth stands at $1.5 billion.

38. Vijay Mallya (Rank 879)

Vijay Mallya, Mallya took over as Chairman of United Breweries Group in 1984 from his father Vittal Mallya. The group has grown into a multi-national conglomerate of over sixty companies. Mallya has a fortune of $1.4 billion.

39. Ajay Piramal (Rank 879)

Ajay Piramal is the chairman of Piramal Enterprises Limited. Piramal nows heads the Rs 4,000-crore (Rs 40 billion) group, comprising Nicholas Piramal, the fourth-largest pharmaceutical company in India. His net worth stands at $1.4 billion.

40. Vikas Oberoi (Rank 879)

Real estate king Vikas Oberoi, heads Oberoi Constructions. His net worth is $1.4 billion. Morgan Stanley bought 10 per cent in Oberoi Constructions for $152 million in 2007.

41. Baba Kalyani (Rank 938)

Baba Kalyani is chairman and managing director of Bharat Forge, the world's second-largest forgings manufacturer. His net worth is pegged at $1.3 billion.

42. Rama Prasad Goenka (Rank 938)

Rama Prasad Goenka is the Chairman Emeritus of the RPG Group, a multi-sector industrial conglomerate. His net worth is $1.3 billion.

43. Keshub Mahindra (Rank 993)

Keshub Mahindra, chairman of Mahindra & Mahindra is also a well-known philanthropist. His fortune is pegged at $1.2 billion.

44. K Dinesh & family (Rank 993)

K Dinesh is one of the Infosys co-founders. He is currently the head of Quality, Information Systems and the Communication Design Group at Infosys. Dinesh is also the Chairman of Infosys Australia. His net worth is estimated to be $1.2 billion.

45. Rakesh Jhunjhunwala (Rank 993)

A well known, famous equity investor in India, Jhunjhunwala manages his own portfolio as a partner in his asset management firm, Rare Enterprises. His fortune is estimated to be to the tune of $1.2 billion.

46. Brij Bhushan Singal (Rank 993)

Brij Bhushan Singal is the chairman of Bhushan Steel. The company is among the largest steel producers in India. BSL currently exports to Europe, USA, Canada, Africa, China and the Middle East, in addition to the Asian markets. His net worth is pegged at $1.2 billion.

47. Yusuf Hamied & family (Rank 1057)

Yusuf Khwaja Hamied is chairman of Cipla, a company founded by his father Khwaja Abdul Hamied. His net worth is $1.1 billion.

48. S.D. Shibulal & family (Rank 1,057)

Shibulal, Chief Operating Officer of Infosys, is one of the co-founders and member of the Board of Directors of Infosys Technologies Limited.

He has over three decades of IT leadership experience and has played a pivotal role in building Infosys. His net worth is pegged at $1.1 billion.

49. Bhupendra Kumar Modi (Rank 1,057)

Bhupendra Kumar Modi is the chairman of Spice group. Modi has set up joint ventures in partnership with global companies such as Xerox Ltd, Alcatel Network Systems Ltd, Telstra Corporation, Telekom Malaysia. His net worth is $1.1 billion.

50. Mangal Prabhat Lodha (Rank 1,057)

Realty baron Mangal Prabhat Lodha founded Lodha Developers in 1980. The company has scaled up in terms of profit and projects in the last three years. His net worth is estimated to be $1.1 billion.

51. Ramesh Chandra (Rank 1,140)

Ramesh Chandra is the founder of the multi-billion dollar realty company Unitech. His net worth is $1 billion.

52. Anu Aga (Rank 1,140)

Anu Aga led Thermax Ltd, the Rs 3,246-crore energy and environment engineering major, as its chairperson from 1996-2004. Now, she devotes her time to social work. Her net worth is pegged at $1 billion.

53. Ashwin Dani (Rank 1,140)

Ashwin Dani started his career as a development chemist with BASF, Detroit and joined Asian Paints in 1968 as a senior executive.

He is currently the vice-chairman and managing director of Asian Paints. He is also the Vice President of the Federation of Indian Chambers of Commerce and Industry (FICCI). His fortune is $1 billion.

54. Harindarpal Banga (Rank 1,140)

Harindarpal Singh Banga serves as Vice Chairman Emeritus of Noble Group Limited. A Master Mariner, Banga has years of experience in the maritime and logistics industry. His net worth is pegged at $1 billion.

55. Mofatraj Munot (Rank 1,140)

Founder, promoter and chairman of Kalpataru Group, Mofatraj Munot has over 45 years of experience in the real estate space and property development. His fortune stands at $1 billion.

India's economic boom creates 55 billionaires!

It is raining billionaires in India, despite the fact that a major chunk of the country's huge population still grapples with poverty. India now has a record number of 55 billionaires, according to the Forbes2011 world billionaires' list. India stands third after the United States and China in the number of billionaires.

The combined wealth of India's 55 richest is $246.5 billion, much higher than last year's total of $222.1 billion. It is also more than the combined GDPs of Pakistan and Sri Lanka!

For the first time in the Forbes list, there are more billionaires from the BRIC nations -- Brazil, Russia, India and China -- than from Europe. These nations together accounted for half of the world's 214 new billionaires, from 97 billionaires last year.

Eight Indians have dropped out of the list, including Shahid Balwa and Vinod Goenka, co-founders of DB Realty, linked in the 2G spectrum telecom scandal.

India has seven billionaires among the top 100 richest people in the world. There are 1,210 billionaires, in the Forbes' list with a combined wealth of $4.5 trillion, up from $3.6 trillion a year ago.

Warren Buffett in India - Proud to be an Indian

Indian hospitality received a strong endorsement from the world's third richest man, Warren Buffett, who said he was treated much better in India than back in the United States.

"I am just overwhelmed by the welcome I have received from the moment we got here. They treat me much better in India than they do in the United States," said the chairman and CEO of Berkshire Hathaway Inc at a brief meeting with Karnataka Chief Minister B S Yeddyurappa early Wednesday morning.

"I want to transport all this... I believe in free trade," he said in a lighter vein.

"We had a great dinner last night... I met some very interesting people, had a great conversation. I couldn't feel more welcome and more delighted to be here," said Buffet, who is staying at Taj West End during his visit to the country.

"Better late than never," is what Warren Edward Buffett, also known by investors worldwide as the Sage of Omaha, has to say about making his first visit to India at the age of 81.

"This is my first trip to India and the first foot I placed on Indian soil was in Bengaluru... and it won't be the last," said Buffett.

"When I come back, I will be 100 in 2030," he joked, but quickly added that he planned to come back much before that and was hopeful of seeing business expand here by then.

"I do hope that I spend some money here," he told journalists, kicking off his visit with a lively media discussion late Tuesday evening.

Arriving directly for the press conference hosted by TaeguTec India after landing in a private jet from South Korea, he held forth on a host of issues - from regulation in Indian insurance to how one should approach investments in equity markets.

Just days before his visit, Berkshire Hathaway, his company, signed up as a corporate agent for Bajaj Allianz General Insurance, marking its entry into the Indian insurance sector.

"We want to be where the action is and the action is here," Buffett said.

"We are looking at large investment destinations and India fits into our scheme of things. I do not consider India part of the emerging countries... it is a big market.

I do not have any particular sector focus or have set aside a corpus to invest in India. I go for investments in companies which have sound management and in those companies which I understand pretty well," he said.

Buffett, who viewed a short presentation on investment opportunities in Karnataka and the Global Investors meet held in 2010, on Wednesday said he was impressed by the speed of implementation of the MoUs signed during the Investors Meet.

"It is very impressive," he said, lauding the efforts of the Karnataka government in facilitating the establishment of a Nestle food processing plant in a short timeframe of barely 10 months.

Yeddyurappa extended an invitation to Buffett to be the chief guest at the Global Investors Meet in 2012 during the nearly half-hour-long meeting.

The chief minister, attired in a formal suit, briefed Buffett about the investment opportunities in Karnataka, the progressive policies of the state government, the close to 400 MoUs signed at the Global Investors Meet and the speedy implementation of several of the projects.

"I invite you to invest in Karnataka in different sectors and assure you all the support and coordination from our government," Yeddyurappa told the legendary investor.

To a question as to what Karnataka needs to be doing to woo more investors, Buffett said, "You are doing the right thing."

Asked what his own assessment was on the impact of the Japanese crisis on the re-insurance sector, he said, "It is very early to assess that. "

"Much of the loss is uninsured... It is a wild guess at this point, but I would say that it will be probably be between half-a-billion and a billion dollars. To put that in perspective, Katrina (hurricane) cost us $3 billion and we are much larger."

"It is a significant amount of money, but it is not what I call a super catastrophe from the financial standpoint," he said, but added that it was a great tragedy from the human loss point of view.

Buffett also said he does not envisage his company doing insurance underwriting in the near future in India and will continue to be a corporate agent until regulatory issues are allowed.

On the issue of Ajit Jain, a senior executive of Indian origin in Berkshire who is tipped to succeed him at Berkshire Hathaway, Buffett was non-committal.

"Ajit Jain is a great person and he has made more money for Berkshire than I have... We have become close friends and he is an extraordinary person," is all he would say.

Buffett's primary mission to India over the next three days will be to meet a host of wealthy Indians and impress upon them to donate a part of their wealth to philanthropy under 'The Giving Pledge' campaign. Buffett will be meeting a galaxy of top Indian businessmen here tomorrow morning, under the aegis of the Confederation of Indian Industry.

He then flies to New Delhi on Thursday to meet other honchos, as well as Prime Minister Manmohan Singh, among others.

"Philanthropy is much tougher than running a business. We do not get an instant feedback on how we are functioning and whether we are on the right track... unlike in a business... It is much harder..." he said, urging it is high time one went out and helped those in need.

Buffett had pledged more than 90 per cent of his $50 billion personal wealth to the Melinda & Bill Gates Foundation, for a host of causes across the globe.

"I have more than what I need and there are lot of people around the world who will benefit from that money," he said.

And, then, it was a question he had to face. Being in Bengaluru and not talk on the outsourcing debate?

"I am (a) strong believer in trade and the world will be a better place if there is more trade. In the long term, the United States will surely stand to benefit if India prospers... and if China prospers," he said.