CII President unveils vision for India's economic future with insights on resilience, investment trends, and budget expectations

The CII President highlighted the importance of India's Gati Shakti initiative and said CII endorses for equitable growth and fiscal consolidation

President of the Confederation of Indian Industry (CII), R Dinesh, provided exclusive insights into diverse sectors, investment trends, and expectations for the forthcoming budget during an interview with CNBC-TV18.

He underscored sector resilience after COVID-19, a substantial rise in private capital expenditure, the potential for heightened investment in infrastructure, and the crucial need for reform continuity.

The CII president highlighted the importance of India's Gati Shakti initiative and said that CII endorses equitable growth and fiscal consolidation.

Sectoral resilience post-COVID

The CII president highlighted the strength exhibited by sectors such as construction, cement, and infrastructure, even in the aftermath of the COVID-19 pandemic. He pointed out a notable revival in hotels and transport, signalling a resurgence in investment despite prevailing negative headwinds.

R Dinesh said, "Whether it is the construction sector, cement sector, or any sector related to infrastructure, all have shown strength. Post covid, we saw a revival in hotels and transport, signifying a revival of investment. Despite this, negative headwinds dominate."

Investment cycle and private capex deployment

Discussing the investment cycle, Dinesh noted a substantial increase in private capital expenditure deployment. Over the last three quarters, capex levels ranged from 75-95 percent, indicating a strong inclination toward future investments, he said. The CII President expressed confidence in the upward trajectory of investments, with a survey indicating a significant boost in the second half of the fiscal year.

"Capex in the last three quarters reached from 75-95 percent. This augurs very clearly that people are going to invest going forward. Our survey indicates, that in the H2 investments will increase compared with H1. This will increase further significantly going ahead," Dinesh said, speaking on the investment cycle within the industry, and deployment of private capex..

Potential sectors for increased investment

Dinesh observed strong balance sheets across most corporates due to a rebound in demand. He identified continued infrastructure focus as a key factor making India competitive and attractive for investments.

The CII president said, "Seeing strong balance sheets across most corporates. Demand has come back. This continued focus on infrastructure makes India competitive. It will not only attract investments but also give growth. I see that we have made a very sustainable platform for ourselves. Out companies have the strength of balance sheets also. and this keeps us in the ease of investments and growth."

Expectations from the upcoming Budget

Regarding the upcoming budget, Dinesh expressed the desire for continuity in the government's focus areas. He commended the government's commitment to fiscal consolidation, infrastructure development, and employment generation. Dinesh indicated that as long as this focus continues, the industry will be content.

Dinesh said, "We don't see any change in the focus areas laid down in the past. The government has walked the talk until now. As long as this continues, we will be happy. Our overall approach to fiscal consolidation, infrastructure focus, to employment generation is not going to be any different."

Infrastructure as a key differentiator

Dinesh emphasised the importance of maintaining a focus on infrastructure. He applauded India's Gati Shakti initiative and expressed hope for its continuous emphasis on government policies.

"Infrastructure. This had made India more propelled and more competitive. It created a significant impression for others outside India to look at India. India's Gati Shakti is a differentiator and hope the government will continue," he said.

Unfinished reforms

Addressing pending reforms, Dinesh urged the utilisation of the country's federal structure to create better opportunities and build consensus. He expressed anticipation for reforms when a new government takes charge.

He said, "We have to use our federal structure to create even better opportunities and build consensus on reforms that are still pending. We are waiting for this when the new government comes in."

Industry's message on state assembly election results

For the industry, Dinesh emphasised the importance of policy continuity, irrespective of the government in power. He viewed policy stability as a positive sign for the business community.

"For the industry, continuity of policies is most important. Whichever government is in place, the agenda of industry should be fulfilled. Continuity of policies is a positive sign," the CII president said.

Equitable growth and support for the common man

Dinesh conveyed CII's support for equitable growth and emphasised the importance of fiscal consolidation. He called for expenditures aimed at supporting the common man, as it would contribute to long-term benefits for India.

Industry perspective on investigations and raids

Regarding ED investigations, raids against companies and GST notices, Dinesh stated that as long as issues are handled fairly, there is no cause for concern. He reiterated CII's support for companies making positive contributions to the economy.

Cyclone impact on Chennai and Tamil Nadu

While acknowledging the severe impact on human lives due to the recent cyclone, Dinesh downplayed a significant business impact. He noted that most companies had been affected for less than 36 hours and the majority had already resumed production.

Challenges ahead

Dinesh identified potential external challenges and global economic volatility as areas of concern. He stressed the need for corporates to focus on resilient growth and expressed confidence in the absence of short-term issues.