Two corporate heads, Vikram Pandit and Mukesh Ambani, on Friday predicted great things about India's growth story. Particularly, the recent stress on inclusive growth.
“Whichever way you look — consumers, innovation, spending, globalisation — India is at the centre of the thing,” said Citigroup CEO Vikram Pandit at an interaction with ICICI Bank’s non-executive chairman, K V Kamath, at a meeting of the Instittute of International Finance.
At the same interaction, Reliance Industries’ chairman, Anil Ambani, said India would be a $5-trillion economy from the present $1.2 trillion. “You may debate whether it will be 2022 or 2025, but India will definitely be a $5-trillion economy," he said. Kamath said he’d bet it would happen by 2022.
Both Ambani and Pandit laid stress on an inclusive growth agenda for India. Ambani said India was going to surprise the world in the next five-seven years in digital distribution of funds. “India is creating unprecedented infrastructure for digital distribution,” he said, citing the government proposal on cash transfer of subsidies.
He said, however, that 15 million earning opportunties had to be generated in the next 15 years and it had to be mostly in agriculture. In manufacturing, India has to compete with automation, he added.
Pandit said much of the global system was migrating to emerging economies like India. Banks were adjusting to this new reality of the real economy. To a query on what would happen to New York and London if emerging market economies were to become the new financial centres, he said there’d be many new ones but New York and London would play their roles.
Pandit exuded confidence that the debt crisis in Europe would get resolved, but said there would be pain in the restructuring. In the US, the economy was starting to grow and momentum had to be maintained.
He said banks will have to be become banks again, referring to the global financial crisis when banks burnt their assets in toxic deals. He predicted corporate banks would rise again. The crisis in advanced countries would have a soft landing and debt overhang will be worked out.
"Having come to Citi after the crisis, I will only look ahead," he said.
Ambani said there was realisation that one had to produce goods and services that people valued. “You cannot continue building market cap on thin air,” he said. He added a road map was needed for de-leveraging in advanced economies. “The excesses of 20 years cannot be solved in a few quarters,” he said.
I want to know that Pandit exuded confidence that the debt crisis in Europe would get resolved, Pandit exuded confidence that the debt crisis in Europe would get resolved within few days. Is it possible?
Going from 1.2 trillion dollars of GDP now to 5 trillion dollars in real terms by 2022 would require a real growth in GDP in dollar terms of 13.85 per cent per annum year after year starting now. The asking rate drops to 10.73 per cent per annum if the horizon shifts to 2025.Therefore by 2022 it does not look quite possible, but may come about by 2025 with 9-10 per cent growth rate in GDP and some appreciation in the rupee.
Vikram Pandit, Mukesh Ambani and K V Kamath, all these three Indians must be high on India''s superpower syndrome. Vikram could not rescue citi after American recession. ICICI bank also suffered from many ups and downs in the past three years. Mukesh Ambani appears to be smoking something that brings his euphoria. Come on guys with all that buzz about widespread corruption, mismanagement, lack of moral governance we are witnessing in India of 2009 to 2011, do you think anyone in their right mind would jump on their huffing and puffing hallucinogenic bandwagon? If they do, for heaven''s sake, let them keep their sanity. Nobody is asking at what time in future India would become a superpower. They are worried sick at India''s moral degradation and the price of onions.
...and I am Sid Harth
India\''s future growth story as told by these among our industry captains reads okay on the surface. But let us not forget that it is a shame if such forecast growth has to come only at the huge cost in the form of routine scams involving politicians, officials, businessmen, etc. Sections of people who are denied, because of ubiquitous corruption in anti poverty schemes of govt., even basic needs like water, minimum shelter and clothing, are rising far more than any of us imagines, not looking at false statistics created by officials to please the governments. In such a scene of colossal poverty amidst plenty, with no parallel anywhere else, in which the govt. machinery eats most of the funds allotted for poverty removal, and in which the private sector still keeps fooling around with ridiculous token involvement, any talk of great economic prosperity in future India must be taken with a very big pinch of salt.
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