Post poll policy changes key to salvage economy: StanChart

Doshi: Can you give us a sense of where you see Asia and the recovery cycle and ofcourse where you see India?

Bindra: Asia is following the global trend and has moderated over the last couple of years or so, but is still way above the peak performance of developed nations. So, it is clearly there, the fundamentals are intact, the future is bright.

For India I would say it is a similar situation but there is a lot to be done in the short-term for India to achieve its minimum potential of 7 percent growth which it deserves to have. Unless we see some immediate changes post election that might be further than we would like it to be.

Doshi: Would you say that of all the countries you have heard of here in Davos whether it is the return of growth to America or to Europe or despite the concerns about China, the fact that it will exceed 7 percent, India is somewhere at the bottom of the list?

Nayar: We have no reason to be here. I would say whether it is bottom or second bottom , it doesn’t matter. We are running with twin deficits and have less flexibility than ever before. I think it has been a pretty under par performance.

Doshi: Baba Kalyani few days ago was talking to us about how manufacturing has declined though the intention of this government was to increase its share in GDP growth. Talk to me about what you would like to see the government do in the near term? The reason also why I am asking this is we have a vote on account that is coming up on February 17 and while they don’t have much flexibility – like the finance minister told me, we cannot change a word in the Income Tax Act, they do seem to be poised to make a few announcements. What would you like to hear?

Goenka: As far as manufacturing is concerned, the intent is very clearly defined - 25 percent GDP contribution by 2020. However, I don’t see enough action to make that happen. It just won't happen by wishing it.

If one looks at the woes of manufacturing today, it is in all areas – infrastructure, the cost of power, energy, the logistics, the raw material, the labour cost, the inflexibility of labour. We have to attack these fundamentally.

There is no reason why we cannot grow to 25 percent. It won't happen between now and February 17 but somewhere, it has to get started. It won't happen overnight either, no matter who the government is but somewhere it has to get started. One by one we have to look at the real problems and not something that looks nice in a report.