Davos Exclusive| India Inc not too concerned with IMF growth estimates, remain optimistic about country’s growth story
A day after the International Monetary Fund (IMF) slashed global growth forecasts due to the economic slowdown in India, India Inc said that the projections don’t really matter as the country is still on the path of growth.
India Today News Director Rahul Kanwal spoke to leading Indian industrialists about whether the world is still looking at India favourably or not. The industrialists, who were in Davos to attend the 50th annual meeting of the World Economic Forum (WEF), showed optimism about the India growth story.
The industrialists reacted to IMF chief economist Gita Gopinath saying India was the primary reason behind the trimming of global growth forecasts.
CP Gurnani the Managing Director of Tech Mahindra said, “I would not attribute too much to her statement. The fact is that India has started playing a very important role and it is very unusual that earlier growth rate was being projected at 8-10 per cent is now being estimated at 4-5 per cent and India obviously impacts global growth rates. The important part is not what we are doing now but what is our outlook in the median term and the long term.”
On the idea that instead of a combined India delegation, several states such as Telangana had sent separate delegations to the Davos Summit, Chandrajit Banerjee the Director General of CII said that the story of India lies in its states. He added, “It is not that we are falling off the world’s view. Gita Gopinath’s comment shows importance of India.”
Adar Poonawalla, CEO of Serum Institution of India said he doesn’t pay too much to economist projections. “I don’t know on what basis the comment was made. I don’t take economists seriously because I believe in solutions and actions. The forecasts don’t really help. I have always talked about the ease of doing business, permissions and licences being reduced and made easier as well as decongesting courts. I don”t think India has slowed down. We have just come down to a normal pace of growth.”
Vikram Kirloskar, the Chairman and MD of Kirloskar Systems Ltd said the government needs to reflect on what needs to be fixed. “At this point, we need to reflect on what is going wrong and take measures to fix it. It is easy to say increase demand but how do you do it? From what I see India is going through a structural change in terms of how the consumer is seeing the whole situation — people are looking for more competitive products.”
Gurnani added that investors are still looking at India positively but want support from the judicial structure. “India is still on top of the world’s mind. India is still giving a decent return on investment. Everyone wants to increase their footprint. If anything, global CEOs want judicial reforms.”
The IMF on Monday also lowered India’s economic growth estimate for the current fiscal to 4.8 per cent. When asked about the slashed projections, Gita Gopinath said, “The first two-quarters of India came in weaker than we projected. One sector where we are seeing the most stress is the financial sector — the non-bank financial corporations. We have seen a sharp decline in credit growth and a weakened business sentiment. All this led to the revised numbers.”
However, India’s growth (estimated at 4.8 per cent in 2019) is projected to improve to 5.8 per cent in 2020 and 6.5 per cent in 2021.
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