India's rise would depend on absolute GDP, per capita income: Uday Kotak
Dec 08, 2022
New Delhi [India], December 8 : Highlighting the country's potential to further strengthen its economy, Kotak Mahindra Bank MD and CEO Uday Kotak on Thursday said India's rise would depend on its performance in absolute GDP and absolute per capita income, current account and fiscal management.
Speaking at the Confederation of Indian Industry (CII) Global Economic Policy Summit 2022, Kotak said, "The Indian economy today, with a size of about USD 3.2 trillion and the fifth largest in the world, presents significant potential and opportunities to move up the ladder to be top among three in the world. Its realisation would depend essentially on four metrics - our economic performance in terms of absolute GDP, absolute per capita income instead of the PPP comparison, getting better on the two profit and loss accounts namely current account and fiscal management."
To develop world-class Indian companies, Kotak stressed the need to build scale in manufacturing based on cutting-edge product innovation and developing IP rights rather than depending on arbitrage alone to secure an advantage.
During the discussion, Kotak also mentioned, as an aside, that the interest rate trajectory in India would depend more on the signals provided by the US Fed.
While articulating his views, Sanjiv Bajaj, President, CII said that "Credit needs to be given to the government for continuous and consistent investment from their side in public infrastructure, which has really helped us over the last few years."
While the aspect of developing new manufacturing capacities holds promise, its realisation would depend on the execution of policies, stated Bajaj. He further eluded to four broad areas--namely aligning industry and trade policies, building a strong financial sector to support the real economy, augmenting education and healthcare expenditure to build people capacity, and expanding the share of manufacturing by expanding the PLI in labour-intensive areas which would accelerate our journey towards a USD 40 trillion economies. He also referred to coordination between the Centre and States for building a consensus on policies.
Sanjiv Puri, Vice President, CII and Chairman and MD, ITC Ltd lauded the transformative policy initiatives such as Gatishakti and infrastructure investment to transform the economy. The policy initiatives, going forward, should play to India's strengths in human resources for growth to be resilient, sustainable, and inclusive. For example, services have the potential to lead our development journey. Similarly, raising agriculture incomes, and adapting agriculture value chains to extreme climate conditions needs a priority.
Baba Kalyani, Chairman and MD, Bharat Forge Ltd, mentioned that India must move fast to emerge from a factor-driven economy to an innovation-led economy. Stressing the primacy of innovation in manufacturing, he said that there are pockets of opportunities in select areas such as railways which India is leveraging to move ahead. We should change from traditionally being a country of traders to that of manufacturers like in China for which we require investment and capital.
Janmejaya Sinha, Chairman India, the Boston Consulting Group India Pvt Ltd spoke extensively on addressing problems such as fixing the flawed water systems- which would double agriculture productivity, doing away with free water and power, fixing the technology stack to address health and education problems, fixing the financial sector, especially addressing the inconsistency in policies by regulators, among others.
There is a huge potential for the care economy, he said. We should seize the opportunity to emerge as the caretakers of the world, according to Sinha.
On climate change and sustainability, all the panellists were unanimous on the primacy of place given to renewable energy and sustainability. The same was also the case with the issue of diversity. However, the focus should also shift on domestic problems such as addressing pollution in cities, diversity at the top end of the pyramid, legal/policy issues which come in the way of employing women, and addressing extreme weather conditions, among others.
