India Inc is well poised with continued growth momentum and armed with robust balance sheets, it can go out and play offense across the world, Federation of Indian Chambers of Commerce & Industry (Ficci) president Anish Shah said on Monday.
“Sitting on funds and not investing is not necessarily bad because it’s also about investing in the right manner. With the balance sheets that companies have here, an economic downturn would be the best time for us to go out and play offense across the world,” Shah told ET.
The Ficci president also noted that the domestic demand is likely to drive investments and make them more broad-based.”We’ve doubled capacity in the auto business. We’ve increased the capacity in tractors significantly. And we see companies around us increasing capacity as well,” Shah, who is also group chief executive of the Mahindra Group, said.
Urban demand has been the primary driver of consumption over the last year, with rural demand lagging, but Shah noted that a rural recovery was within sight. “It’s just a function of inflation coming down a little bit and growth continuing. The trickle-down effect will lead to all sectors of the economy stepping up,” he said.
Shah noted that while the government had done well to ramp up infrastructure, there was a need for the momentum to continue.
“If the momentum continues, we can bring down logistics costs. We’ve had large reforms, like GST, that have made it much easier from a logistics standpoint and are essential for manufacturing to thrive in India,” he noted. India plans to increase the share of manufacturing in GDP to 25% from 15% at present.
Shah lauded the government’s efforts on digital infrastructure and pointed out that they could generate more efficiency for the country.
“India’s physical and digital infrastructure is among the best in the world. And that is creating several efficiencies across companies in terms of how we do KYC, and I don’t think we’ve tapped that as yet,” he said, pointing out that Ficci could help educate its members and create those efficiencies.
The Ficci president also argued for higher research and development spending. “We need companies to do a lot more and be able to lead the world with R&D. But, at the same time, I think we do have an advantage as we are a lot more frugal,” Shah said, highlighting the space agency, Indian Space Research Organisation, as an example of Indian R&D’s higher productivity.
Holistic agenda
The Ficci president also laid down his agenda for the industry chamber, noting that he would like to focus on Make in India, women-led development, farm prosperity and sustainability as key pillars to achieve “Viksit Bharat”.
Shah said the goal was not to look at sustainability as an expense. “If renewable energy is cheaper, we should move much faster. We need to start identifying some of these best practices where you’re better off by being more sustainable,” he added.
Shah also pointed out that states had a much more significant role to play in driving consensus on issues like land and labour reforms.
On the issue of competitive populism in the run-up to elections, Shah noted that the Centre had put economics ahead of politics, which was visible in the last budget.
“One hope that we (industry) have is that all political parties would put economics at the forefront for the benefit of all,” the Ficci president said.
