There is a demand to eliminate carbon based fuels on CO. How prepared is Indian industry?
We should go back to what we have done. The government has already expressed its willingness to say when we will reach net zero. We are about three years ahead of this target. Let others say what they want, we must do what we set ourselves to do. We need to be clear that we cannot let a population or a country suffer for trying to make up for someone else’s climate sins. We are suggesting the possibility of a Green Transition Fund. This may require some government funding, which would be seed capital, and then support from the private sector and other global investors. Two, large corporates can work with their MSME partners to support this transformation. If we do both of these, I think we have more than fulfilled our responsibility to support change.
Private investment is increasing. Is it time for the government to shift focus from capital expenditure?
You need both. I don’t think our recommendation would be to take your feet off the pedals.
From a macroeconomic perspective, what are the pressure points?
This is mostly external. Instability is the biggest challenge, it is changing every month, no one expected the Hamas-Israel issue. Second, even though commodity prices have softened, there is a lot of uncertainty. For example, after the hike, freight rates have declined. So, where is the investment going to happen? I don’t see any current focus issue in India, be it infrastructure or digitalization. One uncertainty that we are facing is from natural disasters, where we need to be careful.
Big investments were expected under the China Plus One strategy, but it could not happen. Have you missed the bus to India?
My approach is very different. Fundamentally, I am saying this is not China plus one. In a way, I’m glad if you missed the bus because those were the wrong reactive moves because you can’t build a supply chain in the short term. People are betting on three things – whether the domestic economy holds up, whether the cost of doing business is reasonable, and, in the long term, whether the investment will have a sustainable rate of return. Expectations from India are very high globally. People who are coming to India, they are coming for the long term, they are coming for the Indian market, because our cost of doing business is better, because we have done infrastructure, digitalization, where we are the best in the world.
Do you think that as interest rates have risen and agricultural growth has slowed down, as per the latest GDP estimates, demand will be sustained?
Earlier, we were estimating 6.5% growth for the current financial year. Today, we are saying it will be 6.8%. The feedback from our members is very positive. In fact, most of our members are saying that rural demand is coming back and the second half will be better than the first half of the year. There may be some impact on pockets due to monsoon or other factors, but as we speak, FMCG has increased, two-wheelers have increased. It’s just a matter of time before you actually see him come back.
(TagstoTranslate)Rural demand(T)Public spending(T)Overall economy(T)Green transition fund(T)CII Chairman R Dinesh