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Kumar Managalam Birla of Aditya Birla Group says the government expediting project clearances can give a huge impetus to the slowdown seen in the Indian economy.
I am feeling less gloomy than I was even three months ago and I am hoping that initiatives like the CCI see the light of the day.
Kumar Mangalam Birla
"I am feeling less gloomy than I was even three months ago and I am hoping that initiatives like the CCI see the light of the day," says Kumar Mangalam Birla, chairman of the Aditya Birla Group.
The government has come out all guns blazing in its efforts to revive the economy. It has recently set up the cabinet committee for investments (CCI) which is looking at large projects, identifying the bottlenecks in each one of those and trying to resolve issues across ministries, he says. And if the CCI manages to clear the bottlenecks plaguing some of the largest projects in the country, it would be a huge positive, he adds.
The company has had a tough year and a half, but with initiatives like this, it would be able to see better times in the next two quarters, says KM Birla.
According to him, the group has about USD 3 billion worth of projects that are held up because of various clearances that are pending.
He feels once the project clearances start coming, it will be enough of an impetus for people to start investing again.
Below is the verbatim transcript of Kumar Mangalam Birla's interview on CNBC-TV18.
Q: Let me start by asking you what you make of the current macro environment in the country given all the trouble we have seen over the course of the last few years which you don’t really need me to elaborate on and given the fact that you yourself have been fairly bearish in your outlook for the last year, atleast in your public commentary?
A: We have had a tough year and a half. However, I see the first glimmer of hope. For example, I think that the government has recently setup the cabinet committee for investments (CCI) which is looking at large projects, identifying the bottlenecks in each one of those and trying to resolve issues across ministries. I think that is a great initiative and if that was to take off a lot of the bottlenecks facing some of the largest projects in the country would actually get cleared. I see that as a huge positive.
Q: You have projects waiting in line for clearance?
A: We have projects waiting inline.
Q: Which ones specifically?
A: We have our aluminum projects for example. However, I haven’t seen this sort of an initiative ever before and I think this is in many ways path breaking. So, I wouldn’t hesitate to say that it has been a very tough year and a half but with initiatives like this I think that we should start to see better times in the next two quarters that is my estimate. If things start to roll then I think it is just the positivity that starts to happen in a sort of a circular kind of a way.
I think that it wouldn’t take more than two quarters for us to actually feel the impact.
Q: When can we start seeing investments by large corporate groups like yours come back online because we have seen that go away in the last year and a half, two years may be even longer and that is the most worrying factor?
A: Once we see that the investments that are currently stuck come unstuck because of measures that the government is taking to help industry in a legitimate way by expediting clearances essentially I think that will be a huge confidence booster for industry and I think that if that was to come about that is enough of an impetus for people to want to invest again.
Q: So, you are not feeling as gloomy as you were may be a year ago?
A: I am feeling less gloomy than I was even three months ago and I am hoping that initiatives like the CCI see the light of the day.
Q: Given what we have seen on the rupee in the last couple of months, given the fact that our twin deficits continue to pose a fairly substantial problem to us given that the external global environment is very volatile and hence there is no investments certainty, would you hold on to this less gloomy outlook if things change externally as well?
A: This is a relative view. It is relative to what it was like three months ago. I think that we have got to start looking at some of the positive things that are happening around us. I think the fact that the government recognizes the issues and that is something to feel happy about. Like I said we need to look at some of the positive things that are happening and let us hope that they will start off a virtuous cycle.
Q: What more would you like to see happen despite the limitations of the fact that next year is an election year. What more would you like to see happen?
A: A stable rupee would definitely help.
Q: That is a tough one right. It is not entirely within the control of government or the Reserve Bank of India?
A: It isn't and I think that the fact that we are so integrated with the rest of the world is a reason for that and rightly so. So, I think that is still something that is on the wish list.
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