MUMBAI, INDIA: Union Minister for Commerce and Industries, Kamal Nath put the focus on lending and domestic industry at the backdrop of the current economic slowdown.

“What a change when I was here last time at NASSCOM to this time! Who would have thought of the present global situation which is in a completely different shape from the hype it was in!” he said at the inaugural session of NASSCOM Leadership Forum in Mumbai today.

Kamal Nath remarked in a lighter vein that unlike foreign governments that bailed out banks, in India we do'nt give packages but we borrow form banks. He stressed that unless we look towards lending and not just liquidity in the current global financial crisis, no package will solve the problem.

“US and Europe have problems with their financial system. The banking system needs to get back to lending and not governments lending to banks. If the government has to lend to the banks, it is better to shut them down and make restaurants and hotels out of them,” he added sarcastically.

He also asked the IT industry about its future now, in view of just two per cent of the population using computer.

Kamal Nath said that though the top end of Indian IT companies had taken to IT in a big way and implementing projects around the same, the middle and lower segments of market are still not targeted by the Indian IT vendors.

“Indian IT industry has shown the India flag high but what now? We have for long looked outward, its time to look inward. May be the current global crisis will trigger some inward looking.”

In a confident note he said citing the Davos visit that India doesn't just look best practices but, look at next practices.

“Domestic market in India is huge and Indian IT industry needs to accept the challenge to focus on this market,” added Nath while also arguing that policy of looking inwards should not be done only because companies are facing heat because of global recession.

The minister also added that the recent statements emanating from US reading outsourcing need not to be taken too seriously by the Indian IT industry.

“The process of globalisation is irreversible and cannot be stopped. Protectionism will not be threat and calls against outsourcing will soon fade way,” the minister added. “Advanced countries are looking at developing countries as engines that will be driving the growth”

The minister predicted a solid 2009 for Indian IT industry and argued that industry will continue to post positive growth this year.

For more NASSCOM Special stories click here