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Sep 08, 2012, 06.36 PM IST
The theory of economic growth says that virtuous growth requires savings, investment, the employment thus generated creates consumption and savings and so on and so forth. And by that standard, India’s growing at far below its potential trajectory.
The theory of economic growth says that virtuous growth requires savings, investment, the employment thus generated creates consumption and savings and so on and so forth. And by that standard, India's growing at far below its potential trajectory.
Why we are growing slowly and what can be done? A panel comprising of Rajiv Kumar, Secreatry General, FICCI; KR Kamath, Chairman & MD, PNB; Naveen Jindal, MP & Chairman & MD, Jindal Steel and Power; Ashok Chawla, Chairman, Competition Commission of India; Rana Kapoor, Founder, MD & CEO, Yes Bank; Divakar Gupta, CFO & MD, State Bank of India; Prof. Bibek Debroy, Economist and C Rangarajan, Chairman, PMEAC discuss the issues most concerning the economy. Below is an excerpt of the discussion on CNBC-TV18. In India's banking sector is extremely fragmented and we need to therefore consolidate and rationalize that and that is what will help improve the credit to GDP ratio, believes Rajiv Kumar, Secreatry General of FICCI. "India's banking sector is also not innovative enough and therefore we need to innovate. There is talk about capital formation, both in terms of financial capital as well as human capital, and in both those cases the Indian banking sector could do much more to bring out or to raise the level of capital formation. But is India really growing slow today, asks KR Kamath, Chairman & MD of PNB. "If GDP growth means increase in the per capita income the way in which we should work is to see that more and more people contribute more and more to the GDP rather than very few contributing to the GDP and the others being the denominator," he explains. Naveen Jindal, MP & Chairman & MD, Jindal Steel and Power feels it is extremely challenging to work in India. The work environment needs to be lot more conducive to work but he sees there is no reason why we should not have double-digit growth rates. "We must achieve above 10% growth rates and who stops us? We lot of times say what's happening in Europe or this or that -- I think we are our own worst enemies. We need to work with a spirit of cooperative endeavor. We need to support each other. We need to have a more conducive environment for people, for entrepreneurs, for people to be able to be what they want to be."
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