Huge debt in corporate balance sheets reason for stunted job growth: Birla

Billionaire Kumar Mangalam Birla Tuesday said high debt pile among corporates has "stunted" job growth and also disclosed that his diversified conglomerate is looking at domestic acquisition opportunities.

He hoped once the troubles with banking non-performing assets (NPAs) are resolved, which will lead to more credit growth and investments for banks, there will be a pick up in job creation in the economy.

"Unfortunately, we haven't seen too much of new investment happening on the ground in the past few years. I would attribute it to the fact that when this government came, most companies and groups, with the exception of a few like ours, had huge debt on their balance sheet," Birla said speaking at the third Bloomberg India Economic Forum.

This lack of ability to invest, coupled with change in banking norms to being more stricter, is "one reason why the employment generation has been stunted", said Birla.

The chairman of the Aditya Birla group, however, sounded very optimistic about the economic growth prospects in the country, saying the elephant is running.

His group, which has completed 35 acquisitions in the last two decades that he has been heading it, is looking for more merger and acquisitions in the US, Europe and also India.

"We are constantly looking for M&A in the US, Europe and also in India," he said, adding that the group looks at opportunities which are value accretive while making its inorganic play.

Every acquisition has to either expand the presence for a company or help it integrate either backward or forward, Birla said, making it clear that it will not acquire an asset overseas in a sector in which it has no presence.

He said the NPA resolutions through the NCLT process are "low hanging fruits" when it comes to acquisition opportunities domestically, but added that his group has restricted to bidding for only one cement asset as it is the one aligned to its strategies.

Birla, whose group also has a financial services arm, also pitched for allowing newer, innovative fintechs to flourish first before the regulation sets in on those.

On the telecom sector, where his company Idea Cellular recently merged with British telco Vodafone's local operations to form the country's largest telco with 410 million subscribers, Birla said he does not expect price wars to end anytime soon.

Birla said the merged company, which is headed by him, will announce its detailed strategy to be a market leader in November.

The industrialist also said that like any other corporate, he would like to see a lower tax regime but also acknowledged that the government has its own fiscal compulsions.