Let us all have a look on the inevitable questions of today’s country about the growth of the nation.
The new government has come in, the budget is also out of the way. Do you think that the government is making the right noises and could we clock in above 5.5% growth in this fiscal? Let’s have a look what is the pick now.
The worst is definitely behind us. There is a pick-up in consumer. You see it in industrial activity, you see it in IIP. They are unclogging the projects which had actually reduced our capital output ratio. Once that comes back, in the short run, 5.2 to 5.5 is almost a certainty.
At the same time, they are looking at various policy changes that are required to bring in FII and FDI, make manufacturing easier, bring in manufacturing trade employment. In our view, both in the short, medium term to long term, prospects are bright.
As far as inflation is concerned, it is still acting very stubborn and it has gone up in the month of July. So, do you think that the RBI should continue with this tightening stance because if we want sustainable long lasting growth, inflation has to be under control?
If we look at the positive side, the only real inflation that we have not been able to bring under control is the food inflation and that is a bit volatile. Even though I do not know what is causing it, but I think it will come under control. In the meantime, I do not think reducing interest rates is the major need of the hour because even when you need projects to come up, it is going to be 8 to 12 months.
