Govt moves not strong: K V Kamath

K V Kamath, who chairs top blue chips ICICI Bank and Infosys, has said recent moves by the government have built expectations, but the signals are not clear and strong enough to give Corporate India the courage to make investments.

"I think the feelgood is still not there. I think probably (we're) losing on clarification in policies... land and environment. What's the policy that's holding up growth? I don't find anything. But clarification in policy, yes," Kamath told The Indian Express in an interview. However, he added that the equation is set for a change.

According to Kamath, the first steps addressed worries such as General Anti Avoidance Rules and fiscal deficit. "The fruit of that is the market steadying itself," he said.

What seems to be Kamath's biggest worry is the "dramatic" slowdown in the infrastructure sector. "If you take first quarter of this year, the lending portfolio is barely one-fourth of what it was a year ago," he said. Land and environment issues plague all infrastructure areas but for roads. "This needs to be addressed if the investment has to come back," he said.

The life-time banker also felt that high interest rates are not working , differing with the RBI and monetary policy hawks who suggest the prevalent policy is the "best". Inflation has been high partly because people's aspirations are being met through wage increases, he said.

While interest rates do not quite affect corporate investment, these have hit the common man. "On the retail side, (these have). Affordability is under pressure. EMIs have gone up," he noted.

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