Image: Republic TV
During the 'Building Momentum For India’s Century’ session at Republic’s ‘India Economic Summit 2021’ on Friday, experts discussed the country's economic prospects for the future. Finance Ministry's Principal Economic Advisor Sanjeev Sanyal, Ambuja Neotia Group chairman Harshvardhan Neotia, ex-SBI chairman and BharatPe chairman Rajnish Kumar and Department for Promotion of Industry and Internal Trade (DPIIT) secretary Anurag Jain participated in this panel discussion. At the outset, Sanyal predicted that India will witness double-digit growth for two years in a row owing to supply-side reforms and a prudent approach.
Sanjeev Sanyal remarked, "There is an extraordinary momentum, enthusiasm in the Indian economy. One couldn't even have imagined that 6 months back. We had the second wave and there was a lot of doom and gloom. But I think we have demonstrated a few things that probably people don't give us credit for. In the last two years, we demonstrated the social capital and administrative capacity which people usually do not give us credit for."
"The economic response to COVID that India did was very different from what other countries did and from what experts from around the world wanted us to do. We did do a significant amount of demand management whether it is monetary or fiscal. But we didn't go overboard as many other countries went and experts wanted us to do. As a result, we were restrained and consequently, our macro stability indicators are very well positioned even if there are some shocks from inflation and so on," he added.
#RepublicSummit | We are capable of charting our own course - India's economic response to COVID was different from what other did and what many experts wanted us to do: Sanjeev Sanyal, Principal Economic Advisor of the Govt of India https://t.co/Q8MLShSYo4 pic.twitter.com/RteD86G9wm— Republic (@republic) November 26, 2021
Giving a perspective on the evolved approach of the government, Anurag Jain explained, "On the supply side, we came up National Infrastructure Pipeline. The basic change in functioning that has come around is that these things are taken up as a project and you end. It is not that you continue forever. There are monitoring mechanisms".
#RepublicSummit | Production-Linked Incentive (PLI) is going to be the gamechanger, says Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade, Ministry of Commerce, GoI https://t.co/Q8MLShSYo4 pic.twitter.com/7MBhsbDDNH— Republic (@republic) November 26, 2021
Weighing in on the industry's sentiment about the future economic prospects, Harshvardhan Neotia opined, "The organized industry is feeling very upbeat. It is on various counts besides the host of reform measures that have happened in the last few years. Also, the fact that we are now seeing that we are hopefully behind the COVID challenge, the huge vaccination. It may very bad to say- but the fact that we went through a very devastating second wave also created huge antibodies."
The Ambuja Neotia Group chairperson elaborated, "If we talk about the huge response to the tax collections recently which all indicates a huge formalization of the economy which is definitely good news. Having said that, I will like to address a faultline which I also see. The unorganized sector particularly the urban poor has been feeling the heat quite strongly. The rural economy has withstood the COVID challenge."
While acknowledging that the opportunities are huge, ex-SBI chairman Rajnish Kumar weighed in on the lack of investment by the corporate sector. He said, "When IBC was introduced and we had the huge problem of NPAs in the systemn, some course correction has happened and the corporates have deleveraged in a big way. So they are sitting on cash. In COVID, it is some sort of a paradoxical situation. The corporates had the best period as far as profits are concerned. So they are sitting on the cash. The banks are sitting on the cash. There is ample liquidity in the system."
Commenting on the cleaning up of the banking sector, Sanyal mentioned, "The fact that we attempted to clean the banking system up which came at some cost of growth in 2017,2018,2019 that we entered this crisis very underleveraged. If we had the banking system of 2015 and then had the COVID-19 crisis, we would have been in a very different place than now."
#RepublicSummit | Conducive environment is very much there, but why is the corporate sector not coming in to invest? That's a question we need to answer. Opportunities are huge: Rajnish Kumar - Chairman, BharatPe & former Chairman, SBI— Republic (@republic) November 26, 2021
Watch here - https://t.co/Q8MLShSYo4 pic.twitter.com/WAA7iGD5em
"If we want to see high levels of sustained growth in the next decade or two, we cannot do so purely only on the basis of capital market. No country in the world has ever been able to industrailize and sustain high growth rate without requiring the banking system to grow very rapidly," the Finance Ministry's Principal Economic Advisor contended.
The ‘India Economic Summit 2021’ will provide answers to pressing questions in the post-COVID world by delving into the dynamics of the Indian economy and engaging in gainful dialogue on the macro and microeconomic picture with some of India's brightest minds. At a time when a new world order has been set in motion and new economic and global partnerships are being formed, the much-awaited Summit will be a breakthrough platform to ideate on the state of the Indian Economy. Some of the themes of the event include 'The Future is Digital', 'Unicorn Race' and 'The Green Mobility Shift'.