The world economic crisis will not affect the Indian economy in a large way but can rather emerge as an opportunity for the country. The country’s growth being “domestic-driven”,India will be able to sail through the economic crisis engulfing the world fairly well.
These views were expressed by financial leaders and economists who had come for the annual leadership summit ‘Samvit 2011’ organised by the Indian Institute of Management,Lucknow,on Saturday.
Presenting his views on ‘The Sinking World Economy and its implication for Indian Businesses,” Aditya Puri,Managing Director of HDFC Bank,India,said that the Indian banks are perfectly “safe,secure,profitable and well governed”,even amidst the worst recession of the world. He further said that 50 per cent of India’s GDP is from domestic consumption and Indian economy is structurally in the right direction. “We do not need to get overly concerned about it (economic situation in India),” he said.
Talking about the foreign direct investment (FDI) in retail sector in India,Puri said that FDI investment is not the solution to all problems of Indian economy. He said that it will not be long before — following Wal-mart’s examples — hundreds of Indians will come up with similar chains of retail at lower price and outdo Wal-mart. “Change that will come with FDI will not come with Wal-mart,it will come with Indians doing it,” he said.
KR Kamath,CMD of Punjab National Bank,said that Indian economy,unlike the western countries,is of a different nature — it first saves and then invests. The growth rate of the country had in the last decade reached 8 per cent and just because the rate has gone down to 7.5 per cent as of now,does not mean that everything in the country is bad,he said.
Taking a dig at the Indian media,Kamath said that it is “very active” and went on to say that in India,global recession are for those who watch business news channels and read “pink” business papers. “There is nothing wrong with our economy and though we need to be conscious of what is around us,we need not spend good time worrying what is going to happen due to this crisis,” he said.
Roopen Roy,country leader and MD of Deloitte Consulting,said that policy paralysis and political deadlock are one of the major problems for Indian economy today. In order to prevent the “Occupy Wall Street” movement happening in India — which has a vast majority of people poor or in agriculture sector — the focus should not only be on GDP growth but efforts should also be made on eradication of povery and dealing with corruption,he said.
Dharmakirti Joshi,chief economist at CRISIL,said that Europe’seconomic crisis will have its ripples in India and stressed that the Indian government needs to take proactive action and sort out reform issues pertaining to land aquisition for ensuring financial growth of the country.
Srinivasan Iyengar,MD-Strategy,Standard Chartered,said that after the economic crisis,there will be a shift of power from west to east and the sinking world economy is an opportunity for India. Sonjoy Mohanti,CEO of Educomp,said that India has the largest social security schemes in the world — in the form of Mahatma Gandhi National Rural Employment Guarantee. Even in the economic crisis,Indian consumers are willing to pay more for better quality. He encouraged people to venture for entreprenuership and innovations.
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