PremiumThanks to supportive fiscal and monetary policies and a widespread vaccination programme, Indian economy had recovered from the pandemic shock in 2022, as per Kumar Mangalam Birla.
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Despite global obstacles, India is positioned to be the world's fastest-growing major economy and a driver of global growth, according to Aditya Birla Group Chairman Kumar Mangalam Birla. On the strength of a swift and comprehensive implementation of the vaccination programme, the economic activity in India has seen a quick comeback to pre-pandemic levels, Birla stated in the most recent annual report of UltraTech Cement Ltd.
"A strong digital ecosystem, fiscal and monetary policy and various government schemes helped small and medium enterprises and the worst affected sections of the population to survive while reviving demand and bringing the economy back on track," said Birla while addressing UltraTech's shareholders.
Regarding the global economy, Birla claimed that - thanks to supportive fiscal and monetary policies, as well as a widespread vaccination programme - Indian economy had recovered from the pandemic shock in 2022. However, the conflict in Ukraine and the ensuing economic sanctions against Russia presented a major shock at the end of FY22. He continued by saying that these events on a global scale have not spared the Indian economy.
"It disrupted energy markets and supply chains and added to the already evolving inflationary pressures and concerns over consumer demand," said Birla.
Partly on account of the elevated commodity prices in global markets, India’s inflation pushed higher than the target of the Reserve Bank of India (RBI). To control inflationary risks, and reduce the pressure on the rupee, RBI has been selling reserves and unwinding the extraordinary liquidity support provided by it during the pandemic.
"On the positive side, economic activity in India has witnessed a sharp recovery to pre-pandemic levels on the back of a rapid and widespread rollout of the vaccination programme," he said.
India's recovery from the effects of the global downturn is going well, and most forecasts place economic growth there at about 7% in FY23, according to Birla.
"India, therefore, is poised to be the fastest-growing major economy in the world and an engine of global growth," he added.
India's exports are showing significant growth, and the country's economy is doing well thanks to a healthy backlog of infrastructure projects and the government's practical policies, such the production-linked incentive programmes, said the official.
"Many industries have witnessed fresh project investment announcements. Foreign direct investment flows have remained strong. The burden of non-performing assets in the banking sector seems to have peaked out and is easing," Birla added.
Besides, dynamism in India’s digital ecosystem, diversification of global supply chains away from China and the greater emphasis of investors on sustainable finance offer new opportunities for India.
These "trends lend confidence to a robust economic narrative" for India in the medium term, which augurs well for the corporate sector as well, Birla added.
On the world economy, Birla said growth forecasts have been slashed.
"The International Monetary Fund (IMF) now expects the world economy to grow by 3.6 per cent in CY22, which is 0.8 percentage points lower than its pre-war projections," he added.
Many economies have experienced a sharp surge in inflation recently, particularly in food and fuel prices, taking their inflation rates to multi-decade highs. Central banks have been forced to respond to surging prices with aggressive rate hikes.
"As the stance of monetary policy shifts, there is greater turbulence in currency markets. The dollar has strengthened, while emerging economies have witnessed downward pressure on their currencies," he said.
Global supply chain disruptions due to pandemic-induced lockdowns have been replaced by new disruptions caused by the war in Ukraine and the economic sanctions.
While talking about UltraTech, Birla said in FY22, it recorded net revenues of ₹52,599 crore ($7.1 billion).
He further said the Indian cement industry will add 80-100 million tonne capacity by FY25, driven by increased spending on housing and infrastructure.
On expansion plans of UltraTech, Birla said it is investing ₹12,886 crore towards increasing capacity by 22.6 MTPA (million tonne per annum).
"Upon completion of the latest round of expansion, your company’s capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China," he said.
(With PTI inputs)