Kotak exhorted India Inc to cash in on the rally in the stock markets to raise capital and not be too fussed about the price.

CII president and banker Uday Kotak on Thursday said that while the downgrade of the Indian economy by Moody’s was a ‘warning shot’, the government had done well to spend to mitigate the stress in the economy and now it was the private sector’s turn to invest. Kotak exhorted India Inc to cash in on the rally in the stock markets to raise capital and not be too fussed about the price. However, he cautioned it would not be right to assume that the economy is fine simply because the markets were strong.

“We need changes in govt policy and we also need to change,” the CII chief said. Kotak asked industry to invest, adding that without investments we could not create enough sustainable jobs. He recommended that builders clear their inventory at lower prices and move on.

Kotak also defended Reserve Bank of India’s stance on interest waivers for loans under moratorium saying it could not be an ‘unequal game’ where depositors were paid interest by the banks but borrowers did not pay interest. Kotak was responding to a question on the ongoing case in the Supreme Court on waiver of interest during the moratorium period. “The depositor’s trust must be protected,” Kotak said. The new CII chief observed that loan growth was sluggish because customers that banks were willing to lend to were shy of borrowing and banks were hesitant to lend to borrowers with weak balance sheets.

Observing that this is the first time we have seen reverse migration, the new CII president said industry must make it attractive for labour to come back. He said the ‘short-term orientation’ of some parts of industry towards labour needed to change and that they needed to be provided with social security. Given there is broadband connectivity in rural India, Kotak said it was possible to set up businesses in the hinterland now that there was also trained manpower.

The MSME guarantee scheme, the CII President, said was likely to find its mark. “The Rs three lakh crore is likely to work and the money should be disbursed sooner than October,” Kotak said during a media interaction.

T V Narendran, MD and CEO, Tata Steel observed there was a need to reimagine India from the healthcare point of view with sustainable and qualified manpower. The timeline for the private investments would depend on how the pandemic played out over the next few months. He said normalcy would return by the fourth quarter of current financial year, if the lockdowns were not extended.

“Certainly in India we expect that by fourth quarter, things should start getting back to normal, he said. “Next year we may not be able to come back to pre-Covid levels, but we will certainly be back to positive growth and that should create positive sentiment,” he further said. Narendran also said that government is already spending on infrastructure which is a demand multiplier. Sanjiv Bajaj, chairman and managing director (MD), Bajaj Finserv, vice-president CII said that it was important to kick-start the economy in next few months.”We have seen that, if money is put too early in the hands of people where they are still not comfortable with their own safety and security, then that money gets saved rather than spent,” he said.