This is an informative and impressive interview given by A M Naik,Chairman of Larsen & Toubro in today’s edition of Economic Times expressing his anguish on the mistakes made and how to address challenges to bring India’s Economy back to a sustainable 9% to 10% GDP Growth Rate with financial inclusion
Some thought provoking bytes…..
On reviving GDP Growth Rate….“has to retrace itself to 9-10% and be sustainable for many years without stoking inflationWhen we grow at 10% the rich get wealthier,and therefore,it is important that it should be inclusive growth “
On Freebies….“I am not in favour of Freebies as it takes away the Dignity of Labour”
On Narendra Modi as PM…..” He is going to make a difference,that too a big difference”
On Driving Growth….” Look at our Trade Imbalance with other countries.It has grown in the last 15 years.If you import raw materials,it adds value to the nation.But if you bring ready-made TV,ready-made cars,then what jobs are you creating here?”
On Free Trade Agreements….“….thing that has damaged India is the indiscreet signing of free-trade agreements (FTAs)…the very word is free trade but where the trade traffic is one way you are exporting jobs and not creating jobs within the country.The Prime Minister in the BRIC Summit ais India has to create 10-15 million jobs.Yes we did.But we created them in foreign lands….We export iron ore to China which means we take it out from Mother Earth and the Chinese add value by making steel and export.That’s why manufacturing which was 22% of the Indian GDP went down to 17% and from a growth of 12% at one time it is registering negative growth.It was directly created by government policies…take a relook at all FTAs….We (Indians) are not bonded labour for life.”
On what should be the three Priorities of the Government…“First,and foremost create jobs…restore the manufacturing’s contribution to GDP from 17% to 22%.China has 46%,Malaysia 40%,Indonesia 46%….Do you expect India’s population to daily wake up every morning and worry from where they get their lunch?”…Second,a country can be said to be powerful not just by it’s economic wealth but if it has it’s own independent and powerful defence sector …The government is willing to import and become the largest importer.But you are not willing to give the indian private sector it’s rightful opportunity…India’s defence is in a real bad shape…..We should agree to 49%,subject to genuine transfer of technology.But nowhere in the world,even in the most advanced nations like the US,which has a high-tech defence sector,do they allow foreign companies to hold a majority stake….Forget about sharing technology,it’s not going to happen…..create a strong defence equipment manufacturing base….third is to attract large FDI in Infrastructure….We are talking about a trillion-dollar investment in India and we haven’t even spend one-third of it in infrastructure…The Indian private sector no longer has the appetite for public-private partnership(PPP).The previous government used to talk that half the amount would come from PPP-$100 billion a year.Today,through PPP even $ 5 billion cannot be raised….The private sector has no money…The route to invest in PPP does not exist anymore…Even the Centre’s own ability to spend so much money is limited because of the fiscal deficit,freebies and waiver of loans.The government has a plan to set up 100 cities and high-speed express rail…the quadrilateral is 6000 kms…Rs 100 crore/km…That is about Rs 6 lakh Crores…when you put your hand in the tijori,the money doesn’t exist….The only answer is large foreign direct investment”