Reliance tops Forbes India 40 list

Forbes magazine has come out with a new list of 40 largest Indian companies. The list was prepared by using the same methodology to draw up the Forbes Global 2000 list. Companies have been ranked on the basis of sales, profits, assets and market capitalisation, with equal weight for all parameters.

Reliance Industries tops the list for this year, followed by ONGC and SBI. Indian Oil, NTPC, ICICI Bank and SAIL occupy positions 4 to 7 and three Tata group companies — Tata Steel, TCS and Tata Motors — complete the top 10.

The magazine said Indian companies have benefited from "the gradual reform of an overprotected and quasi-socialist domestic economy into one that is more welcoming of foreign investment and that is increasingly engaged with the global economy".

However, the Indian economy faces significant threats like weak monsoons, rising government deficits and jobless growth — according to the magazine.

"A growing budget deficit is likely to reign in the government spending, which helped boost growth earlier this year (9.3 per cent year on year in the first quarter). That could be exacerbated if the 117 special export zones hollow out the country's tax revenue as big companies move in domestic-production operations to take advantage of tax exemptions", Forbes said.

"The greater danger is that the will to reform the economy gets weaker the further down the bureaucracy one gets from central government. And as always, there is the question of the country's infrastructure, often woefully antiquated or inadequate".

Forbes also cautions about the low rate of job creation, despite impressive economic growth rates. "India also faces a risk of "jobless growth" if the economy cannot grow fast enough to generate new jobs for a labour force that is both getting more productive and growing in size by 4 per cent a year. In that regard, it is energy and manufacturing industries that will have to be the engines of job growth, as IT services companies are just too small", the magazine added.