The government must provide strong leadership and ensure consistency in regulations to save the economy from disaster , India's top corporate leaders said on Friday.
In a free-flowing discussion at the Business Today CEOs At Lunch held in Mumbai, the executives also emphasised the need to step up investments in the country .
The topic of the discussion was 'Reviving Animal Instincts: The How-To Prescription From India's Business Capital'.
"We need to trigger investments to grow," said Puneet Chaddha, CEO, HSBC Asset Management India.
"During the financial crisis in 2008/09, our fiscal deficit was just 3.5 per cent, but the world was in a crisis. We could have used it as an opportunity to step up manufacturing and increase investment, but we lost that opportunity."
The CEOs said foreign investors are shying away from India with regulations becoming increasingly difficult and inconsistent.
"Investors are shying away from India as they feel survival in this market is tough," said Sanjay Sinha, CEO, Citrus Advisors.
Nilesh Shah, Managing Director and CEO of Axis Capital, said Indian companies are over-leveraged and there is no room left to borrow. "Equity has to come in," he said.
To make things worse, said Abheek Singhi, Partner and Director at The Boston Consulting Group, the constant India bashing by the media and a number of iconic global Indians has led to further despair.
"When I talk to foreign investors, most of them have told me that they don't mind investing in India despite the stringent regulations. All that they want is consistency."
Ranu Vohra, CEO, Avendus, emphasised that India needs to get investment friendly.
"We need people to see money being made."
However, for all this to see the light of the day, it is important to have a stable government leadership, which would be able to take decisions.
"Strong leadership is what is needed," pointed out Vikram Limaye, Managing Director and CEO, IDFC.
Limaye also talked about a tactical fix to get the confidence back in an election year.
In the longer run, he stressed the need to have an institutional architecture to support high growth in the economy.
While none of the CEOs expect any dramatic changes to happen till the general elections next year, will the Congress or the BJP bring about the desired changes if they are voted to power? The jury here was divided. While a section of CEOs felt that change will come if either party is voted to power, there were some like Somasekhar Sundaresan, Head - Securities Law Practice*, JSA Associates, who felt that neither party would be able to bring in the desired changes.
"We need a third front khichdi coalition to trigger any form of change," said Sundaresan.
"Even if the Congress or BJP come to power, what we need is a new set of leaders who can take decisions," said Deepak Kapoor, CEO, PwC India.
India's macroeconomic problems are galore and definitely need to change. But Devendra Chawla, CEO of Future Group's Food Bazaar, felt that consumers don't understand macroeconomics. A consumer will not downgrade to a smaller pack of shampoo because the economy isn't doing well.
"Indians are aspiring and the consumption climate is not so bad. As corporates we need to build a perception of optimism," said Chawla.
The Business Today CEOs At Lunch was sponsored by The Wave Group.
(*The story has been updated to reflect the correct destination of Mr Sundaresan.)