 "Despite moderation, India will be fastest growing economy: N Chandrasekaran")
Tata Group Chairman N Chandrasekaran on Saturday said that despite a moderation in growth this year, India will continue to be the fastest growing economy in the world.
He added that three major transitions happening in the world, including shift to renewable energy, change in global supply chain dynamics, and artificial intelligence (AI), are moving in line with India’s strengths.
Addressing the global alumni meet of NIT Trichy in Chennai, Chandrasekaran said that the slowdown in Indian growth is temporary and it will pick up.
“Indian economy is very strong. Even with a moderation in growth this year, we will still continue to be growing better than any other country. We will be the fastest growing,” he said, indicating that the country can still grow faster.
He also believes that 2025 is going to be a ‘phenomenal year for AI’, with huge investments expected to happen in small language models (SLMs) during the year, while large language models (LLMs) will also be playing its role. “Small language models will have a deeper role to play because they will consume less energy, lower cost and give faster results. I feel this is going to be a phenomenal year for AI,” he added.
The decline in the Chinese economy is also expected to play a major role in India’s global role going ahead. China used to nearly contribute to 30 per cent of the global growth, which has now fallen to below 25 per cent. “The estimation is that in the next three to four years it will fall below 20 per cent or less. They have issues. They have a huge dependency on the real estate sector, that is going down and it is going to take a while. In this context, with all the other business opportunities going for us, we have a tremendous opportunity. I don’t think our growth slowdown will continue, it will pick up,” he added, indicating that the dip in growth during the second quarter was owing to a reduction in public spending. “This will be corrected."
The Tata Sons chairman also highlighted that the country will have issues like inequality, access (health, education, etc), elderly care, labour productivity, and job creation among its challenges going ahead.
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“The digital infrastructure created in this country is ahead of anything that has happened anywhere else. We have our problems, we don’t always execute well. But we have some phenomenal digital systems, whether it is our payment system, Aadhar, healthcare, settlement systems, and retail banking systems. We have some of the finest digital systems. We have the talent too. To mind, all the major transitions which the world has to go through are playing to India’s strengths,” Chandrasekaran said.
He highlighted that India is taking giant strides in another global transition sector – renewable energy. “In India, our renewable-based electricity has reached 45 per cent, which was around 30 per cent last decade. The reason it is not enough is because if you have to achieve the 1.5 degree target that was set in Paris, the global carbon emission has to reduce by 43 per cent this decade. Instead, between 2019 and 2024, we have gone in the other direction, it has increased by 3.3 per cent,” he said. This comes at a time when countries like Germany, Italy, Poland, and France have started refocusing on coal-based power units, to reduce gas dependence on Russia.
He said that there is huge scope for an ‘India Plus Model’ in the global supply chain. “The world geopolitics is thriving for an alternative supply chain. The scale, balance, entrepreneurial spirit, demography, the government support, we have it all. We will be playing a significant role, what I call India Plus Model, in the global supply chain,” he said. After the attack on cargo ships in the Red Sea, a large share of global container traffic started taking the Africa route, significantly increasing the cost and time.