'India in much better position to weather the slowdown compared to other countries'
The Financial Express, April 2, 2009, Page 4
The new president of Confederation of Indian Industry (CII) Venu Srinivasan, the chairman and managing director TVS Motor feels that economy, infrastructure and governance are the three areas that need immediate focus to bring the economy back to shape. He is optimistic about the recovery of Indian economy and believes that the economy should start picking up by October this year. With FE’s Neha Pal and Yogima Seth, the CII chief shares his thoughts on the automobile sector and the impact of the Supreme Court’s order on the repossession of vehicles
What are your expectations from G-20 summit?
I am not sure of the outcome of G-20 but the discussion will hover around protectionism, sinking world trade and developing countries like China disbursing funds for the developed countries.
My expectation from G-20 is that the summit zeroes down on steps to stabilise the economies so that the international trade gets back to normal health. Controlling protectionism is also important as it is one of the biggest hindrance in the growth and development of the overall economy.
Will the government’s stimulus package prove effective in bringing the economy back to shape?
In December and January, the stimulus packages were announced and the economy has already started showing signs of improvement in February. These packages will have a positive impact on the Indian economy because India is still in a much better position compared to other countries and we expect around 5% growth this year.
How long do you think the economy would take to recover from the financial slowdown?
We are expecting the recovery process to start in 6 months. The period of October 2009 to March 2010 should witness a higher growth rate viz a viz the first half of this year.
The ministry of corporate affairs has issued its notification on ‘relief from the provisions of AS-11’? What is your take on this?
We are happy on the AS 11 issue getting resolved and welcome this decision taken by the government. Being an industry body, we had earlier stated that AS 11 issue needs to be resolved because the industry was facing a tough time in terms of the losses incurred on the foreign exchange transactions and with this new move, India Inc will definitely get a respite.
Being an auto player what do you want do you have to say on the Supreme Court’s recent ruling on the repossession of vehicles?
In this context, there is a need to define the concept of ‘default’ and there is a need to involve a legal authority in the process of ‘repossessing’. For instance, in some other countries, the police is the concerned authority to execute the task of repossession. The consumers should also realize that if an efficient system is not put in place, the banks may stop lending.
What is CII’s agenda for the year 2008-09?
We have three focus areas this year—stabilizing the economy, infrastructure and governance.
Our concern is on capital formation this year. While agriculture is continuing to grow, the recent figures of the index of industrial production (IIP) have not been encouraging. For the Indian industry to grow, the government should take certain steps like issuing less bonds to ensure greater liquidity in market, monetization of fiscal deficit among others. We also feel that the repo and reverse repo rate should be cut by another 50 basis points. The cost of land and building is 15% higher in India than in our neighbouring country China. We cannot be competitive as an economy unless we don’t improve our infrastructure.
Do you have any plan in mind to improve the condition of job-loss in the country?
It is unfortunate but true that in India, there are no accurate figures about the job-loss but we can definitely work with the government in giving a boost to the economy because employment generation is a direct byproduct of economic-growth. We need to focus on the skill-development programmes and we are working with the policy-makers on this area.
What measures would you prescribe to get the economy back into the growth gear?
While IT, telecom, hotels have immensely contributed to the growth process but the fact remains that if one aims for real growth, then inclusive growth is a must. In China, the government gives land to the industry. Our government should also give industrial parks at much affordable rates. China in the last few years has built several new cities and even in our country, there needs to be a proper planning in infrastructure. Without this we cannot aspire to be a strong economy. The construction process of national highways has slowed down and even the airports and sea ports are important investments that are required to push-up the growth in the country .
The Financial Express, April 2, 2009, Page 4
The new president of Confederation of Indian Industry (CII) Venu Srinivasan, the chairman and managing director TVS Motor feels that economy, infrastructure and governance are the three areas that need immediate focus to bring the economy back to shape. He is optimistic about the recovery of Indian economy and believes that the economy should start picking up by October this year. With FE’s Neha Pal and Yogima Seth, the CII chief shares his thoughts on the automobile sector and the impact of the Supreme Court’s order on the repossession of vehicles
What are your expectations from G-20 summit?
I am not sure of the outcome of G-20 but the discussion will hover around protectionism, sinking world trade and developing countries like China disbursing funds for the developed countries.
My expectation from G-20 is that the summit zeroes down on steps to stabilise the economies so that the international trade gets back to normal health. Controlling protectionism is also important as it is one of the biggest hindrance in the growth and development of the overall economy.
Will the government’s stimulus package prove effective in bringing the economy back to shape?
In December and January, the stimulus packages were announced and the economy has already started showing signs of improvement in February. These packages will have a positive impact on the Indian economy because India is still in a much better position compared to other countries and we expect around 5% growth this year.
How long do you think the economy would take to recover from the financial slowdown?
We are expecting the recovery process to start in 6 months. The period of October 2009 to March 2010 should witness a higher growth rate viz a viz the first half of this year.
The ministry of corporate affairs has issued its notification on ‘relief from the provisions of AS-11’? What is your take on this?
We are happy on the AS 11 issue getting resolved and welcome this decision taken by the government. Being an industry body, we had earlier stated that AS 11 issue needs to be resolved because the industry was facing a tough time in terms of the losses incurred on the foreign exchange transactions and with this new move, India Inc will definitely get a respite.
Being an auto player what do you want do you have to say on the Supreme Court’s recent ruling on the repossession of vehicles?
In this context, there is a need to define the concept of ‘default’ and there is a need to involve a legal authority in the process of ‘repossessing’. For instance, in some other countries, the police is the concerned authority to execute the task of repossession. The consumers should also realize that if an efficient system is not put in place, the banks may stop lending.
What is CII’s agenda for the year 2008-09?
We have three focus areas this year—stabilizing the economy, infrastructure and governance.
Our concern is on capital formation this year. While agriculture is continuing to grow, the recent figures of the index of industrial production (IIP) have not been encouraging. For the Indian industry to grow, the government should take certain steps like issuing less bonds to ensure greater liquidity in market, monetization of fiscal deficit among others. We also feel that the repo and reverse repo rate should be cut by another 50 basis points. The cost of land and building is 15% higher in India than in our neighbouring country China. We cannot be competitive as an economy unless we don’t improve our infrastructure.
Do you have any plan in mind to improve the condition of job-loss in the country?
It is unfortunate but true that in India, there are no accurate figures about the job-loss but we can definitely work with the government in giving a boost to the economy because employment generation is a direct byproduct of economic-growth. We need to focus on the skill-development programmes and we are working with the policy-makers on this area.
What measures would you prescribe to get the economy back into the growth gear?
While IT, telecom, hotels have immensely contributed to the growth process but the fact remains that if one aims for real growth, then inclusive growth is a must. In China, the government gives land to the industry. Our government should also give industrial parks at much affordable rates. China in the last few years has built several new cities and even in our country, there needs to be a proper planning in infrastructure. Without this we cannot aspire to be a strong economy. The construction process of national highways has slowed down and even the airports and sea ports are important investments that are required to push-up the growth in the country .
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