India Inc. Wants Focus On Long-Term Growth 'Ramped Up', Says FICCI Chief Anish Shah
Focus on capex—which has a greater multiplier effect—has started to bear fruit, says FICCI President Anish Shah
India Inc. wants the recently re-elected government to maintain focus on capital expenditure as it did in its last two terms, according to Anish Shah, FICCI president and chief executive at Mahindra & Mahindra Group.
The focus on long-term growth over the past 10 years, and in turn on capex, has finally started to bear fruit, Shah told NDTV Profit's Niraj Shah in a televised interview. Now, the industry wants "more of the same, maybe ramped up a little more". Capex has a greater multiplier effect, Shah said.
The industry doyen's comments came on the day the newly sworn-in ministers took charge of their respective portfolios. Analysts have hailed the expected policy continuity in the third term of the Narendra Modi government to bode well with stakeholders.
"It's not about a short-term stimulus. It's about having the right building blocks in place and the right investments in place to be able to create long-term growth," the FICCI chief said.
Good Monsoon To Nurture Green Shoots In Rural Economy
On the rural side of the economy, Shah said industry is looking forward to farmer prosperity, increasing agricultural efficiency, and enhancing farm productivity instead of dramatic interventions.
"It's easier to have incentives and sops, but from an economic standpoint, the multiplier effect is a lot lower there (in the rural economy). We should really look for longer-term growth and invest in areas that will create that multiplier for that long-term growth," he said.
There are signs of recovery in the rural economy, Shah said, exuding optimism that the picture can further improve with a good spell of monsoon.
"We will see how rainfall comes up. That will give a better sense of whether there should be a greater stimulus, which is more short-term, versus measures the government should take to really transform certain aspects of farm productivity... which will have a much longer-term effect," he said.
Rate Cuts Will Paint A Positive Picture
Keeping inflation in control is key; an out-of-control price rise is in many ways "much worse than having a slightly higher cost of funds", Shah said.
It will only be a more positive picture for us if rates go down, he said in response to a question on expectations of the cost of capital cooling down.
