Some of the country's biggest business leaders - from Kumar Mangalam Birla to Adi Godrej, N R Narayana Murthy and Malvinder Singh - have called for urgent corrective action and stepping up the next generation of economic reform if India is to get itself back on the fast track to growth.
India Inc's leaders have said there is an urgent need to focus on capacity creation and a strong fiscal balance and discipline. India can clock a 6-8 percent growth rate if the government focuses on reform and encourages investment.
In signed articles for the 3rd anniversary issue of Entrepreneur magazine, a part of Network18, 12 of the top leaders of Indian business have made it clear that a lot will depend on what the government does from here on.
Kumar Mangalam Birla believes India can get back to a 7.5 percent growth rate next year "with reorientation of fiscal spending from subsidies to more productive infrastructure spending." Says Birla: "India has withstood multiple macro shocks in recent years without a catastrophic drop in growth. This resilience is largely due to the accumulated impact of reforms in the country."
NR Narayana Murthy feels a 6-8 percent growth rate is eminently possible if the government is proactive in bringing about reform and encouraging domestic and foreign investment. "However, if these things don't happen, I think we will grow at 6 percent," says Murthy. "What was known as the Hindu rate of growth or 3 percent in the 70s is now 6 percent," he adds.
Confederation of Indian Industry (CII) president and chairman of the Godrej Group, Adi Godrej makes it clear that it is the government's job to address its political compulsions and create a smooth path for economic reform. "It is their duty to do what is right for the economy," says Godrej, underscoring the need for political parties to come together on the Goods and Services Tax (GST) issue, a critical reform.
K Anji Reddy of pharma major Dr Reddy's Laboratories exhorts the business community saying there is enough money still chasing entrepreneurs, but is often not able to find a match. "We definitely need to bridge this gap," he says. "The beneficiaries of the liberalised regime should now take centrestage and lead."
"The need of the hour is swift decision-making and a flurry of actions by the government such as key reform and policy announcements," says Sulajja Firodia Motwani, vice-chairman, Kinetic Engineering. Saying it was time to fix the problems, she adds: "We have to go from a vicious cycle to a virtuous cycle of growth."
"To make the Indian success story more substantial, we need to address problems like high borrowing costs, inflation, liquidity in the market and also work on reforms in economic policies," says Malvinder Mohan Singh, executive chairman of Fortis Healthcare, adding that the slow growth in Europe and the US is bound to affect India. "We can safely say that businesses with large capital requirements and long gestation projects will probably slow down a little bit."
Pointing out that the financial system will play a key role going forward, YES Bank chairman Rana Kapoor says: "With demand side drivers largely in place, policy focus on supply side drivers (through the National Manufacturing Policy and Foreign Trade Policy) and structural fiscal policy changes will create immense opportunities for the Indian banking and financial system."
RPG Enterprises chairman Harsh Goenka believes with global inflationary pressures building up, central banks worldwide will maintain "highly self-serving policies" owing to many other government entities "doing too little." The next milestone, he says is to look out for election results in the US and then in India.
"Business confidence, based on positive sentiments and the sure knowledge of clear policy guidelines, can help recharge the entrepreneurial spirit that has always served our country," says Meher Pudumjee, chairperson of Thermax. Arguing that business cannot succeed in a society that fails, she emphasizes the need for quality education, along with the focus on manufacturing and infrastructure development.