Irrespective of the political conflict, a global rhetoric on having an alternative to China for manufacturing serves as a huge opportunity to India in particular, and Southeast Asia in general, Sanjiv Bajaj, Chairman and Managing Director of Bajaj Finserv, said during e-expressions. Bajaj said this could essentially be a multi –year effort and schemes like production-linked incentive were a step in the right direction.
“Nobody has the capacity and manpower like India and the government also seems to be keen on tapping this. But this requires a multi-year effort, and the execution has to be really good. During the pandemic, the significant fiscal stimulus that came multiple times is in fact a testament to the current government’s good intent,” Bajaj said.
Responding to a question on how to get the consumption back on track after the Covid induced slowdown, Bajaj said that the budget has rightly stressed on infrastructure, which will create employment and generate demand. “If you look at the early 2000s, we were infrastructure-focused, including development of airports and power generation, which in turn led to common man spending and helped economy grow by 9-9.5%. But then economic downturn happened followed by the pandemic. We really have to focus on it now,” he added.
While referring to the announcements made in the Budget related to divestments of two Public Sector Undertaking banks banks, LIC’s initial public offering, setting up of a development financial institution, as significant steps, Bajaj said that this will play a big role in supporting India’s economic growth. When asked about whether the Budget figures are really transparent, considering a huge borrowing of Rs 12 lakh crore, Bajaj said that the inclusion of expenditures on balance sheets of government does reflect transparency.
“We are at the better end of the pandemic now. As long as we can ensure quick vaccination in the country, it will help in building consumer confidence and subsequently spending. Private sector investments will follow. This cycle aims at building the economy and meeting the fiscal deficit target,” Bajaj said. He noted that unlike the western world, which is a working capital society, India is a capital-investment economy and the need is to invest in infrastructure. Hence, some deficit is understandable. It is quality of the spending that matters so that we have long-term returns, he said.