On the 76th Independence Day, Prime Minister Narendra Modi had stated that the country's goal is to work towards a ‘Viksit Bharat’, which in literal terms means ‘Advanced India’, an ideal embraced by the titans of India Inc. However, some teething troubles have added an element of caution.
This was brought out during a panel discussion on ‘Economic Policy for a Viksit Bharat by 2047’, moderated by Shereen Bhan, managing director, CNBC-TV18. It was one of the sessions of the second edition of the Confederation of Indian Industry Global Economic Policy Summit, which is being organised with the overarching theme of ‘Economic Policy for a Future Ready Economy’.
Viksit Bharat Abhiyan (Developed India Mission) was ideated by Prof. Rajendra Pratap Gupta, a policymaker, in the book ‘Rebuilding India in the Next 25 years – Tough Choices & Hard Decisions’. The term gained prominence when the PM outlined a new ambition to make India a developed country -“Viksit Bharat”- by 2047 by making some radical changes in its domestic policy as well as by addressing foreign policy challenges.
On other aspects of the economy, Uday Kotak, chief executive of Kotak Mahindra Bank and one of the panellists, spoke about the impending interest rate hikes in February. “We have to wait and watch as to what happens to the (US) Fed (rates) in December. That is going to be a very crucial signal about what is going to be the trajectory in the US. At the same time, we have to watch the Indian situation. The target for the RBI (Reserve Bank of India) is 4% (inflation). My sense is that there could be a 1% hike (by RBI) and that may be a time for thinking about a pivot at 6.5%.”
During the same session, Sanjiv Bajaj, chairman and managing director, Bajaj Finserv, and current CII president, spoke about the consumer sentiments which were upbeat only for some strata of society.
In his words, “There has been a two-legged recovery, the middle class and upper middle consumer side have saved a lot of money. And we are seeing an increase in spends, while more expensive products like televisions and refrigerators are recovering more. If you look at the lower middle class, that is where we see a bigger stress and a big drop in consumption. Also, we can see some slowdown in the rural market.”
Seconding his thoughts, ITC Chairman and Managing Director Sanjiv Puri, also the CII vice-president, said, “We are seeing both the trends of premiumisation and at the same time there is a lot of-seeking behaviour. There is a stress at the lower price points. We are seeing India do much better than what the rest of the world is witnessing. FMCG growth in the rural market is a lot more muted because of inflation. However, my sense is that in the rural segment it is going to get better because realisations have been better.”
Baba Kalyani, CMD of Bharat Forge, while shedding some light on the government’s move towards indigenisation amidst global uncertainty, reckoned that the way the Indian Railways is creating large industrialisation capabilities, they will have a game-changing situation in manufacturing for the domestic market. However, he maintained that ‘Atmanirbhar Bharat’ would be beneficial if some company can produce its own intellectual property and sell in any part of the world without any restrictions.
“In the manufacturing world, everyone is talking about a resilient supply chain, which opens up huge opportunities for India, including defence (sector). If I may cite the example of railway manufacturing systems, which was somehow embedded in the last century for many decades... What took America and Europe 50 years to achieve (modernise their railways), India will do in 10 years. This is going to create a huge manufacturing ecosystem, especially in the area of electrical equipment.”
During the same session, Janmejaya Sinha, chairman for India, Boston Consulting Group, said that India has a “beacon of stability” which has a fiscal balance.
The second edition of the CII Global Economic Policy Summit is on from December 8-9 in New Delhi. The deliberations will focus on five key tracks: Growth, resilience, inclusion, and technology and sustainability, bringing together thought leaders from the government, industry, academia and think tanks. The discussions will focus on finding solutions to global economic challenges from a future readiness perspective.
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