The year gone by may be best forgotten. The year we are in may be one of the toughest for the Indian economy. The infrastructure sector may see projects slowing down or worse, being cancelled. In this scenario, players like ABB India will have to work out their best strategies. In an interview with Business Standard, Biplab Majumder, managing director, ABB India, shares his perspectives on how the year will be.
How do you rate the growth prospects in 2009?
The economic scenario still remains uncertain. These are unchartered waters where all of us have come to. Almost no one knows what is going to happen next. If we knew how the situation is going to pan out — we would exactly know what to do.
My belief is — let us keep our predictions to ourselves. May be a crystal ball could have helped! The need of the hour is to become aware of the constraints that we will have to work with and subsequently gear up to meet the ongoing challenges. Indian economy is largely driven by self consumption. Is that enough? No. We can go from the same situation that is bad to worst if we toe this line.
To make things look better we will have to ensure intensive execution on ground of not only announced infrastructure and power projects but also add to this list many more. The answer is in action and not mere words and announcements. More importantly, the cloud of negative sentiment that looms over the general population has to be reversed. Once these focus points are given its due regard, the scenario is bound to get better.
What is the top constraint on growth?
There is no single factor that is constraining growth. The main elements would be cost of money, liquidity and demand. These three elements don’t just affect each other they also have a spiraling effect on the economy in general.
What could restart growth?
Appropriately addressing the three main factors mentioned earlier will help restart growth. The stimulus for growth can only come from a focussed impetus on increasing demand and that itself will need to be rekindled by public spending and a keen push for infrastructure projects.
Where do you see the rupee six months from now?
This is very uncertain but I believe the rupee will firm up against the dollar but this is largely dependent on rejuvenation of our exports.
Will you make new investments in 2009?
Capacity and range expansion programmes are underway across our locations and these will remain on track. However, based on business needs we can even invest more, as required, as long as the returns justify it. In a nutshell, ‘we don’t cap capex’!
Will you hire or lay off people?
We have a strong order book and so require adequate manpower to execute the work. We are not looking to lay off employees although new hiring will only be for strategic roles and positions.
Where do you see the capital markets in 2009?
We are not too impacted by the capital markets but it does impact the general market sentiment. Once demand picks up the stock markets will also start showing a positive trend.
