DOMESTIC COs NEED CENTRE’S PROTECTION India Inc eyes private capex revival from H2

GST rollout will be the key driver, says Godrej

Mumbai, March 17: The GST rollout and strong macro-economic fundamentals are likely to revive private investments from the second half of this year, industry stalwarts Deepak Parekh and Adi Godrej said on Friday.

“I think it's round the corner, you will see it this year. Better days are coming because I have never seen such strong macro-economic fundamentals,” HDFC chairman Deepak Parekh said at an event.

While noting that many stalled infrastructure projects and stressed balance sheets of corporates have been impeding private investments for the past many years, Parekh said he is “optimistic that private capex will pick up in the third and fourth quarters of 2017.”

Echoing similar sentiment, Godrej group chairman Adi Godrej said that almost certain rollout of GST from July will be the key driver of private consumption considerably which should begin from the second half of the next fiscal.

Interestingly, Parekh noted that trade imbalance with China is one of major factors for low private investment.

“China has become India’s largest trading partner. Our trade with China is $70 billion, but

China is dumping anything and everything at very cheap prices because they want their factories to be running and yet want their employees get paid higher. So the China factor is one of the reasons why our private investments are low

— DEEPAK PAREKH,

MR PAREKH SAID WHILE COMPETITION IS GOOD, THERE IS A NEED TO LOOK AT THE QUALITY OF THE PRODUCTS WHICH THE COMPETITION BRINGS IN

we import $60 billion while export only $10 billion to China. There is a huge negative trade balance. China is dumping anything and everything at very cheap prices because they want their factories to be running and yet want their employees get paid higher. So the China factor is one of the reasons why our private investments are low,” Mr Parekh said.

According to Mr Godrej, the lack of private investment is mostly due to deceleration in private consumption over the last few years.

While real GDP has accelerated, inflation has also risen dampening consumption.

However, GST implementation is expected to boost growth as well as consumption, he observed.

When asked about the ongoing measures to curb black money, Mr Godrej said the way to deal with the situation is not to crack down on black money hoarders but to incentivise businesses by lowering direct taxes. Higher taxes are incentivising people and companies to hide their actual income, he said.

Mr Godrej also said GST rollout would be good for companies as lower prices will boost sales and consumption. Mumbai, March 17: Encouraging the ‘Be Indian, Buy Indian’ slogan, HDFC chairman Deepak Parekh on Friday said there is a need for the government to be ‘protectionist’ to safeguard the interests of the domestic firms.

“We also have to be protectionist. If large countries like the US and Britain are turning protectionists, why not we become protectionist?” Mr Parekh said.

“We are a large country, we have a large market. We also have to protect our industry,” he said.

Recently, SBI chief had also called for some protections to the domestic industry.

Mr Parekh gave the example of the steel industry which was reeling under immense pressure due to cheap Chinese imports, but is now working on higher capacity after the government introduced minimum import price.

“Our steel industry was bleeding because we were getting all steel products from China at ridiculously low prices till the government intervened,” he said.

— PTI

Chairman, HDFC