At CO there is a demand to end carbon-based fuels.How prepared is the Indian industry?
We should go back to what we have done. The government has volunteered upfront to say when we will get to net zero. We are almost three years ahead of the curve. Let others say what they want, we should do what we have set ourselves to do. We need to be very clear that we can’t let the population suffer or the country suffer for trying to fulfil somebody else’s climate sins. We are suggesting the possibility of a green transition fund. It may need some government funding, which will be like a seed capital, and then the support can come from the private sector and other global investors. Two, large corporates can work with their MSME partners to support this transition. If we do these two, I think we have more than fulfilled our responsibility of supporting the transition.
Private investment is picking up. Is it time for government to take the foot off the pedal on capex?
You need both. I don’t think our recommendation will be to lift the foot off the pedal.
From a macro economy point of view, what are the pressure points?
It’s mostly external. Volatility is the biggest challenge, every month it is changing, nobody anticipated a Hamas Israeli issue. Second, commodity prices may have softened but there is a lot of uncertainty. For instance, after the spike, freight rates just crashed. So, where is the investment going to take place? I don’t see any issue with current focus in India, whether it is infrastructure or digitisation. One uncertainty that we are facing is from natural calamities, where we need to be careful.
Large investments were expected as part of the China Plus One strategy, but that has not materialised. Has India missed the bus?
I have a very different view. Fundamentally, I’m saying this is not China plus one. In a way, I’m happy if you have missed the bus because they were the wrong knee-jerk reaction moves because you cannot build a supply chain for the short term. People are making a bet on three things – is there a domestic economy, is the cost of doing business reasonable, and, in the long-term, will there be a sustainable rate of return from investment. Expectations from India are high, globally. The people, who are coming to India, are coming for the long-term, they are coming for the Indian market, because our cost of doing business is better, because we have done the infrastructure, digitalisation, where we are the best in the world.
Do you see demand sustaining given that interest rates have gone up, and agriculture growth has slowed down, according to the latest GDP estimates?
Earlier, we were projecting 6.5% growth for the current fiscal year. Today, we are saying it’ll be 6.8%. The feedback from our members is very positive. Anecdotally, the majority of our members are saying rural demand is coming back and the second half will be better than the first half of the year. In pockets there may be some effect because of the monsoon or other factors, but as we speak, FMCG has grown, two-wheelers have grown. It’s a matter of time before you will actually see that coming back.