BT Markets Today summit: Which way will wind blow for Indian economy? Here’s what experts say

India is at a sweet spot and the only way it can go is higher, said industry veterans Niranjan Hiranandani, Co-founder & MD Hiranandani Group and Dilip G Piramal, Chairman, VIP Industries, who shared their views during BT Market Today summit held in Mumbai on Tuesday, January 24.

The session titled ‘India Inc: Expectations 2023 and Beyond’ was moderated by Sourav Majumdar, Editor at Business Today and the industry stalwart discussed their detailed opinion on India Inc’s growth story, challenges and opportunities for future.

Hiranandani Group’s Niranjan Hiranandani said that India is poised to grow at 6.2 per cent, which is better than western world, which is suffering from the aftershocks of war crisis between Russia and Ukraine, coupled with layoff of more than 1,00,000 people. Despite these international challenges, India has several wins, thanks to its demographics, he said.

Throwing more light on the same, Hiranandani said that India has saved about Rs 35,000 crore by buying oil and gas from Russia and Indian markets have outperformed the global peers. Even the real estate volumes have grown amid the rising interest rate environment, which is a headwind for the industry.

He said that Covid-19 was anticipated as negative to home-buying but it was proven contrary to it. “Housing Finance grew 20 per cent and interestingly, luxury homes grown faster than affordable housing space. India is resilient to international space,” he said.

Hiranandani said that infrastructure sector in India is growing leaps and bounce and budget will be critical ahead of next general elections in 2024. However, he said that divestment has been slow but India needs to ramp up this speed to spend more on infra development- airports, roads, ports, waterways.

Hiranandani gave a mantra to boost India’s GDP by 2 per cent, if the cost of logistics in pulled down lower. “Cost of logistics in India is high at 13 per cent whereas China as 7 per cent. China has better arbitrage but this can be pushed on infra expenses below 10 per cent, India can add a substantial increase in its GDP.”

Dilip G Piramal, Chairman of VIP Industries said that he has never seen India in this light, saying: “China is declining and it is a big advantage for India. India has advantage as it can buy goods cheaply from China as demand in world’s second largest economy has taken a hit.” Outlook for India is very good after Covid-19, some problems are there, but not too many, he further added.

He said that India is not very much competitive in labor intensive and cheaper capital goods space, even Bangladesh, due to its high minimum wages. Such competitive disadvantage leads to problems for manufacturers.

Piramal said that PLI-scheme is a good initiative and the government has its own vision and trajectory to generate revenue from it. A number of countries had taken similar expenditure to support the manufacturing at home.

Contrary to this, Hiranandani said the PLI investments are not necessary for employment. “PLI should be there were employment generation will be more, say real estate or tourism sector, but it was need amid the rising competition and next stage is more interesting to see,” he said.

Commenting on Budget expectations, Hiranandani said that taxation needs to be rationalized on individuals as 42 per cent taxation is very high. “Home loan deduction limit should be increased to Rs 5 lakh from existing Rs 2 lakh, whereas loan to value should be revised. These steps will have a huge multiplier impact on the economy,” he said.

Piramal is not much hopeful from the budget as he believes that budget is getting a non-event. “There cannot be reforms every year and budget has become a routing thing,” he said, while expecting no major changes in the tax rates.
 

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