Global deleveraging remains a challenge as economies are still recovering from the financial crisis, the chiefs of Citigroup and Reliance Industries said on Friday, agreeing that emerging markets will drive growth.

"The imbalances that caused the financial crisis still need to be worked out," Citigroup CEO Vikram Pandit said at a panel discussion at a meeting of the Institute of International Finance in New Delhi.

"There is high debt in developed markets, high deficit, trade imbalances. And the migration towards emerging markets is clear," he said.

Pandit, who was named CEO in late 2007, presided over two full years of losses before the bank reported its fourth consecutive quarterly profit in January.

Billionaire Mukesh Ambani, chairman of India's largest listed firm Reliance Industries, said he would not celebrate a recovery yet.

"We still have to see a roadmap to deleveraging," said Ambani, ranked Asia's richest man by Forbes with a net worth of $29 billion. He was speaking on the same panel as Pandit.

"The debt has not gone away, we have got some breathing time. We have to have a path and it has to be transparent to all of us," Ambani said. "That is still not seen and that is why the lack of confidence and the high amount of money on corporate balance sheets."

Ambani said India and other emerging markets were insulated from the global financial crisis that started in the United States and sent rippling effects through the world in 2008.

Last year, India rolled back about $10 billion of a $40 billion stimulus package implemented during the financial crisis. India has been growing at nearly 9% a year but stubbornly sticky inflation in Asia's third largest economy, driven by food and other commodity prices, and a high fiscal deficit has prompted repeated calls from the central bank for fiscal consolidation.

Ambani said he expected India's economy to reach $5 trillion by 2022 or 2025, from its current level of $1.3 trillion. In comparison, China's economy has already hit $5 trillion.

Ambani last week struck a deal with BP that will have the British energy giant pump at least $7.2 billion into gas projects, bringing in one of the largest foreign investments into India.

"The emerging market story is only going to become stronger, and I clearly see India leading the way," Ambani said. He also predicted that India will be the fastest growing economy in the world in five years.

"Our challenge within India is this growth has to be inclusive. It is very important that benefits of growth go to all sections of society," he said.

In the annual budget announced this week, India's government boosted spending on its poor, gambling on brisk economic growth to cover the cost of appeasing voters angered by corruption scandals and high inflation.

Sharing The Pain
Pandit was cautious about Europe, where a debt crisis has reduced confidence in many economies, particularly Greece, Ireland, Spain and Portugal, widening deficits and increasing public debt. He said the euro is crucial to European countries, who engage in substantial trade among themselves.

"There is some amount of pain that has to be shared in the restructuring," Pandit said. "I am very confident that the euro debt situation will get resolved in due course."

In 2009, Pandit pledged to receive an annual salary of $1 until Citigroup returned to sustained profitability. The company in January said Pandit would receive a base salary of $1.75 million in 2011, after the bank reported its first full-year profit since 2007.

The U.S. economy has been slowly recovering. Chairman of the U.S. Federal Reserve Ben Bernanke this week told the U.S. Senate Banking Committee he saw increasing evidence that the economic recovery has enough momentum to become self-supporting.

But job growth remains far too anemic, he said, indicating the Fed was unlikely to cut short its $600 billion bond-buying stimulus.

"The U.S. economy is starting to grow. They cannot cut back on spending," Pandit said.