Captains of Indian industry confident that economy will pick up

New Delhi, Sept.1 (ANI): Three leading figures of the Indian business world have expressed optimism that some of India's current economic woes can be resolved.

"I think that the Indian economy although down today, will again go up," said Venugopal Dhoot, the Chairman of Videocon Industries Limited.

He also said that he is optimistic about domestic demand for consumer electronics and home appliances growing, which will in turn help fuel economic recovery in the country.

"India is a market for consumption. There is a large consumer base here, everybody wants everything, everybody wants a colour TV, a washing machine, a refrigerator and an air conditioner, and they will have it," Dhoot said.

"So, even if the prices go up by five to ten percent, they will have to have it. Nobody can live without a color TV or a refrigerator etc. So, even though prices are going up, there will be a demand, a huge demand, and after some time, indigenisation is going to take place, and prices will come down also."

He said that he is also upbeat about the performance of the services sector, which contributes to national and state incomes, adds to trade flows and foreign direct investment inflows, and provides jobs.

"In the service industry, always you can go on putting in India and it will pay," Dhoot said.

Adi Godrej, the Chairman of the Godrej Group, shared Dhoot's optimism, but to a degree.

"Right now, we are in a situation which we could control very easily and we could get back to a high growth rate pretty easily," said Godrej.

"We have 250 billion dollars of reserves right now. In fact, our reserves have not gone down over the last year or so."

But he noted that more needs to be done to bolster the Indian rupee, which has fallen continuously against the US dollar for several months.

"Rupee protection is extremely important, because if we don't, then it'll cause inflation, it'll affect the fiscal deficit, economic growth rate will be affected and various negative effects on the economy will be felt," he said.

"To my mind, the Reserve Bank should intervene very strongly in maintaining the strength of the rupee, not allow speculators, both within India and outside, to get the rupee to weaken so much. It is clearly speculative action which is doing it," Godrej said.

Industry umbrella groups are also in agreement about the need for more concrete steps to be taken to pick the Indian economy up.

"The government has made a very significant move, through the Cabinet Committee on Investment, in clearing a huge number of projects which were stuck," said Naina Lal Kidwai, the president of the Federation of Indian Chambers of Commerce and Industry (FICCI).

"And, it's now up to government to ensure that those clearances find their way out of the ministries and find resolution on the ground, that these projects actually get kick-started. That they begin to generate power, that the roads begin to get built, that the actionable at the bottom, which is the outcome, begins to happen."

Kidwai noted that even in the medium term, action in sectors such as energy will bring confidence back to the Indian market.

"Gas finds have happened, it's now a case of just making sure that we can get the pricing to a level where the gas actually emerges out of the ground, and becomes a productive asset," she pointed out.

She further said: "We have the ability to actually substitute what are large imports of coal with domestic coal - India has the third largest deposits of coal anywhere in the world; why can't we use this to advantage when we need it, when in fact maybe we're even desperate for it? And renewables, in terms of wind, and solar, there's no reason why it shouldn't be thirty to forty percent of our total energy bill, which would reduce the need for imported oil."

She also felt that further confidence-boosting measures are needed to pull India out of the "bottom of the pile" of emerging markets facing similar economic problems.

"The biggest worry really, and I think what the markets are reacting to in the Indian case, is the fact that India's going into election mode and nothing's going to happen. And, that would be a shame at a time when we need to have action, that we are being seen as not being able to act." (ANI)Contributed by Anjali Mathai, Avneet Arora, Madeeha Mujawar.


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