New Delhi: Painting an optimistic picture, Tata Sons Chairman N Chandrasekaran has said the Indian economy is likely to grow at over 11 percent in the 2021-22 financial year.
The economy has rebounded spectacularly after the initial loss of production due to the global pandemic of Covid-19 this year, he said at the FICCI’s annual convention.
“While this rebound looks spectacular, this is coming on the back of the loss of real output. This means we should not only recover but also accelerate,” Chandrasekaran said.
India’s Gross Domestic Product (GDP) contracted by 7.5 percent in the second quarter (July-September 2020), a significant improvement from the unprecedented 23.9 percent fall in the first quarter (April-June). Due to the pandemic, India had slipped into an unprecedented nationwide lockdown by the end of March and began to ease restrictions only in May.
Belying doomsayers’ pessimism, some recent economic numbers have demonstrated early green shoots. India’s index of industrial output in October was 3.6 percent, against 0.5 percent in September, according to the Index of Industrial Production (IIP) data released by the government on December 11. The IIP growth was an eight-month high.
“In the near term, there are reasons for optimism. Several indicators have rebounded faster than expected. GDP growth may accelerate by over 11 percent in 2022 after a significant contraction,” Chandrasekaran said.
About the pandemic and its impact on India, he said some of these could be positive.
Some trends were already visible: unprecedented expansion and usage of digital technology by different sections of the society, and the culture of work-from-home making think companies the future of work; climate-change and shift towards renewable energy; decoupling of the US and China. Countries and companies will need to de-risk and balance their supply chains for the future.
“In all of these trends, I see a tremendous and limitless opportunity for India,” Chandrasekaran said.
It is time to put behind issues such as power, logistics and labor, high interests rate, and regulatory over-reach and interference, which limited the country’s growth.
“If you have to realize the ideas that 2020s belong to India, then we need to focus on talent, data, and bandwidth and we need to be part of new regulatory standards,” he said, adding that while companies have to think of projects in a bigger scale, the government needs to enable this by ensuring every village has sufficient data and bandwidth.
It should establish a regulatory framework for data privacy, residence localization, and taxation in general, he said.
“At the Tata Group, we are not only strengthening and digitizing our existing businesses, but we are also spearheading new platforms in tech for future mobility, renewables, health and also working with the SMEs to unlock their potential,” said the Tata Sons chairman.
(VP)