With Satyam, perfect storm hits once bullish India

By Alistair Scrutton - Analysis

NEW DELHI (Reuters) - A year ago a seemingly unstoppable global juggernaut, the once-confident India is now reeling from a perfect storm of a corporate IT scandal, the Mumbai attacks and economic slowdown.

Suddenly the talk is not of easy returns, unending high growth, or "India arrives." The chatter is increasingly of risk.

"All these events have added to a sense of more risk in India," said V. Ravichandar, managing director of Feedback Consulting in Bangalore, which advises multinationals on investments in India.

"There is a squirrel attitude. The winter could be long and cold."

Satyam Computer Chairman Ramalinga Raju quit on Wednesday in India's biggest corporate scandal in memory, after revealing profits had been falsely inflated for years. It has been called India's "Enron," raising suspicion there could be other skeletons in the closet of India's corporate boom. [nSP367210]

It all came at the wrong moment for India, a combination of problems that punched a hole in the self-confidence -- some say cockiness -- of executives, politicians and middle-classes.

Only in 2007, India wallowed in success. Tata Steel made a $13 billion bid for Corus, the country's biggest foreign buy. A trillion-dollar economy grew at nearly 9 percent. India won its first major international cricket cup in 25 years.

Many people are still bullish about India in the long term.