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Corporate leaders see private capex revival from H2

Press Trust of India  |  Mumbai 

The rollout and strong macro-economic fundamentals are likely to revive private from the second half of this year, industry stalwarts Deepak Parekh and Adi Godrej said today.

"I think it's round the corner, you will see it this year. Better days are coming because I have never seen such strong macro-economic fundamentals," chairman Deepak Parekh said at the Today Conclave here.


While noting that many stalled infrastructure projects and stressed balance sheets of corporates have been impeding private for the past many years, Parekh said he is "optimistic that private capex will pick up in the third and fourth quarters of 2017."

Echoing similar sentiment, Godrej group chairman Adi Godrej said that almost certain rollout of from July will be the key driver of private consumption considerably which should begin from the second half of the next fiscal.

Interestingly, Parekh noted that trade imbalance with is one of major factors for low private investment.

"has become India's largest trading partner. Our trade with is USD 70 billion, but we import USD 60 billion while export only USD 10 billion to There is a huge negative trade balance.

"is dumping anything and everything at very cheap prices because they want their factories to be running and yet want their employees get paid higher. So the factor is one of the reasons why our private are low," Parekh said, adding that there is an excess capacity In our manufacturing sectors.

According to Godrej, the lack of private investment is mostly due to deceleration in private consumption over the last few years.

While real GDP has accelerated, inflation has also risen dampening consumption. However, implementation is expected to boost growth as well as consumption, he observed.

When asked about the ongoing measures to curb black money, Godrej said the way to deal with the situation is not to crack down on black money hoarders but to incentivise businesses by lowering direct taxes.

Higher taxes are incentivising people and companies to hide their actual income, he said

Godrej said rollout would be good for companies as lowr prices will boost sales and consumption.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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