Two corporate heads, Vikram Pandit and Mukesh Ambani, on Friday predicted great things about India's growth story. Particularly, the recent stress on inclusive growth.
“Whichever way you look — consumers, innovation, spending, globalisation — India is at the centre of the thing,” said Citigroup CEO Vikram Pandit at an interaction with ICICI Bank’s non-executive chairman, K V Kamath, at a meeting of the Instittute of International Finance.
At the same interaction, Reliance Industries’ chairman, Anil Ambani, said India would be a $5-trillion economy from the present $1.2 trillion. “You may debate whether it will be 2022 or 2025, but India will definitely be a $5-trillion economy," he said. Kamath said he’d bet it would happen by 2022.
Both Ambani and Pandit laid stress on an inclusive growth agenda for India. Ambani said India was going to surprise the world in the next five-seven years in digital distribution of funds. “India is creating unprecedented infrastructure for digital distribution,” he said, citing the government proposal on cash transfer of subsidies.
He said, however, that 15 million earning opportunties had to be generated in the next 15 years and it had to be mostly in agriculture. In manufacturing, India has to compete with automation, he added.
Pandit said much of the global system was migrating to emerging economies like India. Banks were adjusting to this new reality of the real economy. To a query on what would happen to New York and London if emerging market economies were to become the new financial centres, he said there’d be many new ones but New York and London would play their roles.
Pandit exuded confidence that the debt crisis in Europe would get resolved, but said there would be pain in the restructuring. In the US, the economy was starting to grow and momentum had to be maintained.
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He said banks will have to be become banks again, referring to the global financial crisis when banks burnt their assets in toxic deals. He predicted corporate banks would rise again. The crisis in advanced countries would have a soft landing and debt overhang will be worked out.
"Having come to Citi after the crisis, I will only look ahead," he said.
Ambani said there was realisation that one had to produce goods and services that people valued. “You cannot continue building market cap on thin air,” he said. He added a road map was needed for de-leveraging in advanced economies. “The excesses of 20 years cannot be solved in a few quarters,” he said.