Modi discusses global economic turmoil with industry, economists

Prime Minister Narendra Modi on Tuesday met union ministers, corporate heads and economists to discuss global markets' turmoil sparked off by the Chinese economic slowdown and attendant opportunities for India.

"The general consensus (at the meeting) was that growth of emerging economies is all slowing down, except that we (India) are growing at 7 percent; so how can we take advantage of this opportunity (of the slowdown elsewhere)?" Confederation of Indian Industry president Sumit Mazumdar told reporters here after the meeting.

"Our economic foundations are strong; that is why we have not been affected by recent Chinese events. However, the prime minister told us that in this situation the industry also should show some risk-taking ability," he added.

Ministers present at the meeting were Arun Jaitley (finance), Suresh Prabhu (railways), Nitin Gadkari (road transport and shipping), Nirmala Sitharaman (commerce), Dharmendra Pradhan (petroleum) and Piyush Goyal (coal, power and renewable energy).

Reserve Bank of India Governor Raghuram Rajan, Niti Aayog Vice Chairman Arvind Panagariya, Chief Economic Advisor Arvind Subramanian and Aayog member Bibek Debroy also attended the meeting on 'Recent Global Events: Opportunities for India'.

At the meeting, industry chamber Assocham told the prime minister that policymakers needed to quickly "bullet proof" India from global economic volatility and called for interest rate cut by the Reserve Bank and duties to stop dumping of Chinese products such as steel.

"Economic uncertainty has risen against the backdrop of the slowdown in the global economy. Near-term risks have escalated due to China's growth transition, slump in commodities, capital flow reversals, disruptive asset price shifts and currency exposure risks related to volatility," Assocham said, making a set of 12 recommendations to Modi.

The chamber called on RBI governor Raghuram Rajan to cut interest rates by up to 1.25 percentage points by March to help revive investment and growth.

"Since industrial sector accounts for 45 percent of the outstanding bank credit while it has a lower share of 28 percent in GDP, there is an urgent need for investment revival through a strong dose of monetary easing," Assocham said.

Apart from heads of industry chambers, top industrialists such as Reliance Industries' Mukesh Ambani, Aditya Birla Group head Kumar Mangalam Birla, Adani group chairman Gautam Adani, Tata group chief Cyrus Mistry, Wipro chief Azim Premji, Sun Pharma CMD Dilip Sanghvi, ITC's Y.C. Deveshwar and Infrastructure Leasing and Financial Services Limited chairman Ravi Parthasarathy also attended.

Eight economists, 14 industry representatives and four from major financial institutions, including State Bank of India chief Arundhati Bhattacharya, ICICI Bank's Chanda Kochar, IDFC's Rajiv Lall and CEO of recently launched Bandhan Bank, Chandra Shekhar Ghosh, were also present.