Piramal sees a 'U' shaped one, which is more gradual than a 'V' shaped recovery
Ajay Piramal, Chairman of Piramal Enterprises, on July 10 said the measures taken by the Reserve Bank of India (RBI) and banks have improved liquidity in system.
Speaking at 7th SBI Baking and Economic Conclave, he said it is only investment grade non-banking financial companies (NBFCs) under AAA and AA category that are getting funding, the other ones are still suffering.
"It's only the public sector banks that stood up to meet the funding requirements. Earlier mutual funds and private banks used to provide liquidity- now it is only public sector banks (PSBs)," he stated.
Piramal said more than solvency, it is liquidity that's critical at the moment.
Commenting on the real estate space, Piramal said the biggest challenge is generating demand. "Reducing prices are not going to make a difference. Demand has to be generated. People have to have confidence to invest. We have to ensure supportive measures like speeding up permissions for real estate projects and making liquidity available."
Piramal referred to China, where real estate sales rose post the lockdown.
In India, he sees some traction the affordable segment.
On an economic recovery, Piramal sees a 'U' shaped one, which is more gradual than a 'V' shaped recovery. "In every sector, strong companies will emerge even stronger and consolidation will intensify."
He added that the thrust should be given to micro, small and medium enterprises (MSMEs) who create most of the jobs in India, in line with Prime Minister Narendra Modi's Atmanirbhar initiative. "Around $5 billion worth of goods that we import from China can be easily made by our MSMEs."