India is not decoupled from the world and will face some economic slowdown, HDFC Chairman Deepak Parekh said, adding that the country will continue to be among the fastest growing world economies even then.
"India is not decoupled from the world and India too will face some slowdown. But here is a consensus across the board that India will still remain amongst the fastest growing major economies in the world," Parekh said, while speaking at The Institute of Chartered Accountants of India 21St World Congress of Accountants on November 21.
According to Parekh, GDP growth for 2022 may be slightly lower than 7 per cent, but that is no reason for disappointment. "What is important to note is the inherent resilience that is now embedded in the Indian economy. I do believe India can grow from a $3.4 trillion economy to a $7.5 trillion economy within the next 5 years," Parekh said.
Citing a recent research report, Parekh said India's growing middle class, likely rise in per capita income, expected rise in services share in overall GDP and a booming stock market are seen as big positives for the country.
"I am never tired of telling people that in all my 50 odd years of my working life, I have never been as optimistic about India as I am today," said the HDFC veteran who grew the company to the biggest mortgage lending firm in the country in a span of three decades.
Parekh said India has "a lot going for it right now," giving examples of a constant drive to keep the reform momentum going, efforts towards job creation and continued digitalisation initiatives for financial inclusion and many more such initiatives.
"Today, India enjoys political stability, vaccine security and food security. It has maintained good relations with most countries and is increasingly holding its turf on the international arena," Parekh said.
While India still imports close to 85 per cent of its crude oil requirements, it has diversified the countries it imports oil from and looks to import oil at the lowest cost it can to minimise the impact on the trade deficit and its currency, the banker said.
Parekh's comments come at a time when the Indian central bank is struggling to control inflation and has hiked the key lending rate by nearly two percentage points in recent months. Inflation has emerged as the top policy priority for the Indian central bank at this point even as growth is recovering from the pandemic lows.
The veteran banker noted that India has made huge strides on digitalisation and financial inclusion. As a services-driven economy, we are known as the back office of the world and are now positioning ourselves as a high-end manufacturing hub as well, Parekh said."There has been a huge policy thrust to support India’s energy transition and there are large investments being made in renewable energy, green hydrogen, e-mobility, batteries, fuel cells, solar panels amongst several others," Parekh added.