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CEOs and economists suggest ways to revive India's economy
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CEOs and economists suggest ways to revive India's economy

CEOs and economists suggest ways to revive India's economy
  • 1/10
Esther Duflo
Winner of the 2019 Nobel Prize in Economics


India should not raise taxes as it could have a multiplier effect. Slashing taxes is risky because, if you do so, where will the money you need to spend on public expenditure come from? Cutting public expenditure in the middle of a crisis is not a good idea. I don't see any quick solution. The key is to manage, keep public expenditure right. It's not just about public expenditure but increasing effectiveness. Universal Basic Income could be tried out. It gives people assurance. That, I think, will give people confidence to do new things to improve their lives.
CEOs and economists suggest ways to revive India's economy
  • 2/10
Anil Agarwal
Chairman, Vedanta Resources

The divestment process should be top priority for the government. They must act as a facilitator and enabler of big-ticket projects to attract investment from private players. It is critical that a sector like mining is opened up for private investment so that India starts producing a lot of metals, minerals and oil, cut its import dependence, generate lakhs of jobs and create an ecosystem of ancillary industries. The sharp cut in corporate tax rates is expected to give impetus to investments and propel the economy to attain its true potential of 8-9 per cent growth. The sustained growth in the Indian economy, amid the sluggish global outlook, has made the country an ideal destination for copious investment flows.
CEOs and economists suggest ways to revive India's economy
  • 3/10
Kiran Mazumdar Shaw
Chairman and MD, Biocon

The economic slowdown in India has been driven by lack of demand and consumption. Until that is squarely addressed, any effort to revive market sentiment may not work. Investment and consumption sentiment took a beating at the time of the Union Budget as some expectations were not met. Since then, the government's efforts to course correct have been welcomed, but are yet to move the needle. Had these measures been embedded in the Budget, it would have created a feel-good factor. The middle class needs to be assured that their money will be safe when they invest in registered banks and the ecosystem will not be fraught with high risks which will wipe off their savings. As for the industry, measures should be taken to help create a more enabling atmosphere for investing. Right now, the economy needs mega sentiment boosters. We should seriously look at putting money in consumers' hands. For instance, the government can consider lowering personal income tax and ensure that people have more money to spend. This also calls for doing away with the 'rich tax'. A further reduction in GST is required. These measures cannot be incremental. So, the only challenge before the government is to do these while ensuring that tax revenues continue to support its social welfare schemes. The government should look at improving revenue collections and correct cost inefficiencies.
CEOs and economists suggest ways to revive India's economy
  • 4/10
Amitabh Chaudhry
MD & CEO, Axis Bank

Challenges in banking and non-banking finance companies require calming of markets to restore trust. The sharp cut in corporate tax rates has boosted sentiment. The Monetary Policy Committee has responded with large cuts in the repo rate, has kept system liquidity in surplus and shown readiness for further rate cuts. Any financial dislocation requires capital to come from 'strong' hands to give confidence to 'weak' entities. The key lies in firing all cylinders of growth: consumption, investment and exports. If tax cuts result in new investments and lowering of rates brings back consumer and business confidence, growth in jobs and consumer confidence is likely. India has a low share in global exports. It should identify industries that can benefit from global tradewars and aim to increase export market share.
CEOs and economists suggest ways to revive India's economy
  • 5/10
C.P. Gurnani
MD & CEO, Tech Mahindra

There is no 'one-stop' approach to reviving the current economic sentiment. Government and public sector spending has to increase. There is a need to define a big-bang approach to leverage new technologies like 5G, Network of the Future, Artificial Intelligence and Quantum Computing to accelerate growth. While the government has been focusing on the supply side (increased thrust on manufacturing), it needs to ensure there is enough demand to achieve the right economic balance. The government needs to devise an economic stimulus package for SMEs. It needs to continually invest in improving existing infrastructure to drive future growth. Additionally, social security schemes can increase the productive capacity of the economy and purchasing power of people. The recent cut in corporate tax is a welcome move. The government needs to address industry-specific issues on priority. Digital has the potential to transform India's economy. Digitalising sectors, including agriculture, education, energy, financial services, healthcare, logistics and retail, as well as government services and labour markets, could each create $10 billion to $150 billion of incremental economic value in 2025 as digital applications in these sectors will help raise output, save costs and time, reduce fraud, and improve matching of demand and supply.
CEOs and economists suggest ways to revive India's economy
  • 6/10
Mohandas Pai
Chairman, Aarin Capital and Manipal Global Education

The most important reason for the current crisis is the lack of liquidity in the system.  NBFCs used to raise funds through mutual funds or bonds. Banks also lent them money. But everything has stopped now. The government must make sure that good NBFCs are induced to lend and banks should refinance them. NBFCs know how to lend, they market credit, but most banks have lost their ability to lend to consumers. Some private banks have done well, but overall, the government is living under a delusion, thinking it can tell banks to lend, and that will solve the current crisis. Moreover, the RBI should reduce interest rates. The real interest rate is very high - MSMEs are paying 13-14 per cent. How can they compete when they pay such high real interest rates and that, too, without enough credit? The Prime Minister should meet industry leaders, listen to their concerns and help ease their burden. Stalled reforms such as coal linkages and power plants stuck due to approvals have to be restarted as well.
CEOs and economists suggest ways to revive India's economy
  • 7/10
Kris Gopalakrishnan
Chairman, Axilor Ventures, and Co-founder, Infosys

We need to move from a cash economy to a digital economy. Some companies have addressed it quickly - like those in the IT services. Even start-ups have managed the transition much better than other sectors. So, if you want good jobs to be created, new business creation must be the single focus in the medium term. New businesses are faster, better and cheaper and bring innovative products to the market. In addition, the government has to clean up the financial system so that credit flows are available, especially for the MSME sector. A deep dive into sectorspecific issues, with a focus on real estate, construction and automotive sectors, would also help.
CEOs and economists suggest ways to revive India's economy
  • 8/10
G.V. Prasad
Co-chairman and MD, Dr Reddy's Laboratories

If there is a slowdown, it is a global phenomenon. What is important is to recognise it and take some corrective action. While the government has rolled out some stimulus measures, the industry outlook could get vastly positive if these are followed up with steps to address some industry-specific pain points. In pharmaceuticals, the move towards price control and the uncertainty around it are hurting. What the industry needs today is a greater enabling environment with suitable policies to encourage investments in research and development. All these could go a long way to improve business sentiment. If the macro takes care of itself, consumption will also pick up because consumption is a function of confidence, and it grows when the economy is doing well.
CEOs and economists suggest ways to revive India's economy
  • 9/10
Ashu Suyash
MD & CEO, CRISIL

In such a milieu, the current crisis can be used to execute divestments and asset monetisation to relieve fiscal pressure. We see a gradual uptick in growth, and not a 'V' shaped one, given that a direct fiscal stimulus is unlikely and monetary easing will impact with a lag. Medium-term prospects are promising as strong consumption demand will play out because of demographics and technological facilitations. Deleveraging and the clean-up of the financial sector will support investment recovery over the medium term. Disruptive digitalisation, too, augurs well, as it promises benefits for the government, companies and citizens.
CEOs and economists suggest ways to revive India's economy
  • 10/10
Manish Sharma
President and CEO, Panasonic India and South Asia

The decision to continue funding sound NBFCs will create more liquidity. India is among the largest growing electronics market in the world. The government has been working towards reviving consumption and there have been some positive developments. There is an urgent need for the Appliance and Consumer Electronic (ACE) industry to minimise cost of operations, create local demand and increase economies of scale. A dedicated (government) department can help address these challenges. To improve India's export performance, it is essential to incentivise local firms and establish an ecosystem for domestic manufacturing while establishing beneficial trade agreements with consumption economies. It is essential for the government to reduce basic customs duty for essential components and strengthen a component-manufacturing ecosystem.