Indian Economy is moving in right direction: Rakesh Bharti Mittal
Look towards India's economic growth projection, which was 6.6 percent in March 2018. IMF's projection says that India will see a growth of 7.4 percent in the running fiscal 2018-19. CII's projection is that India's economy will see a growth of 7.3-7.7 percent for FY 2018-19. IMF's projects that India will grow at +8 percent in 2020. These projections in itself say that India's economic growth is moving in the right direction", said Rakesh Bharti Mittal, President, CII.
Rakesh Bharti Mittal, President, CII in an exclusive talk with Zee Business said, Indian economy is moving in the right direction and the impact of reforms like goods and services tax (GST) and demonetisation have started showing positive signs. Mittal added that it is unfortunate to say that we consider employment in the formal or organised sectors as jobs, but fail to recognise the jobs in informal sector as employment too. Here are edited excerpts from the Interview:
Q: What is your take on the economy? Secondly, as an industrialist, do you think the government should carry on with the reforms process or not?
A: First of all, I would like to say that the economy is heading in a positive direction, within the country. Even, the global economy is moving in the same direction. In fact, this is the first time, since 2008 economic crisis that shook the world, we are witnessing a synchronised global growth.
Look towards India's economic growth projection, which was 6.6 percent in March 2018. IMF's projection says that India will see a growth of 7.4 percent in the running fiscal 2018-19. CII's projection is that India's economy will see a growth of 7.3-7.7 percent for FY 2018-19. IMF's projects that India will grow at +8 percent in 2020. These projections in itself say that India's economic growth is moving in the right direction.
When it comes to reforms, then I will say that the big-bang reforms, like demonetisation and GST, announced by the government have started having their impact and it is positive. All issues related to those reforms are behind us and is visible in few sectors like in commercial vehicle and two-wheelers segment, agri-sector where sales of tractors and farm equipment are moving in right direction, cement and steel sales is growing due to increase in infrastructure spending.
Q: After the recent frauds in banks, do you think bank lending to Industry has been impacted? We are getting complaints from many industries that banks are not lending.
A: See, there will be an impact in the short-term but good projects and sectors, which are doing well will not face the problems related to funds. Maximum problems will be visible in MSME sector. I feel before funding, the banks should look forward towards the economic viability of new projects as well as those who are expanding.
Q: Do you agree with RBI circular of February 12 that is tightening the lending norms, like one day default should also be reported, changing NPA norms etc.
A: I feel, the matter should be reviewed as the step is too regressive in nature. I can say that there should be a differentiation between a wilful default or a fraud and situations that make someone to be a defaulter and take immediate actions on it. But there are defaulters, who are not able to pay due to certain reasons like sectoral disturbance, fall of the global economy or something else, but can pay if time is given to them or wait for the revival of the sector.
Q: One of the major challenges before the government is job creation? Do you think our Industry is creating enough jobs?
A: It is very unfortunate that in our case, employment in the organised sector is only considered as employment. EPFO has said that about 3.1 million new employees have joined the provident fund. This means the creation of about 3 million jobs in past 6 months.
In addition, the fixed-term contract which was cleared by the finance ministry in recent past will also help in creating jobs in different sectors in informal and unorganised sectors. But, the positive side of this contract system is that the contracts will be renewed till the employee is fit to work and perform. This fixed-term contract, which is a good policy decision of the government, was along waiting demand of the industry.
Secondly, why don't we look forward towards employment opportunities being provided in informal sectors like security guards, drivers, domestic help, maids among others. These too are jobs.
Apart from that what about the 3.5 lakh crore loans that were provided to some 12 crore people under Mudra scheme which was offered over past 3 years. Consider, if they gave employment to at least 2 people then at least 24 crore jobs have been created in past 3 years.