The Hindu Business Line : New CII chief’s ‘mood meter’ reads positive

New Delhi, May 1 Unfazed by the downturn in recent IIP numbers, Mr K.V. Kamath, Chairman and Managing Director, ICICI Bank, who took over the CII President’s chair on Thursday, brushed off apprehensions of an impending slowdown in the manufacturing sector.

Instead, for him, a definitive source of the situation on the ground were the quarterly results that companies put out and, what he terms, the “customer mood meter”.

“I have never gone wrong with the mood meter in my last 12 years. When you meet ten customers and gather their mood, it tells you where we are going. I knew when Indian industry was coming under pressure in the 90s and when they were in dire situation in 2000 and 2001.

“By 2002-03, I knew that they were coming out, though nobody believed me. The pipeline of investments started building by 2004-05, again I knew in advance from their mood and their competitive ability… Last two years, as they went global, I could understand from their mood… Today, there are certain sections that are hurting and we will have to recognise them and help them… but in a larger context I am not seeing pain… the mood is not negative,” he said.

On the macro perspective, he added that if we looked at the growth numbers of industry, it is at least on track for between 8 and 9 per cent profitability growth.

Responding to fears that Indian companies could face a cash crunch on the back of two CRR rate hikes and a subdued IPO market, Mr Kamath again wished to rely on arithmetic and said he saw corporate cash flows contributing something like $150-175 billion every year, a pointer to a robust investment climate.

On the Government’s message to the industry to abstain from short-term profiteering, Mr Kamath said, “We are in sync with what the Prime Minister said. One, the need to look at 10 per cent growth… that growth is something that we must not remove our focus on. And only this could bring inclusive growth.”

He also believed that the fiscal and monetary measures being taken by the Government to curb inflation were necessary and that industry’s role was on the supply side.

“The solution is to increase production and productivity through quick implementation of projects and increasing capacities and undertake the longer agenda of installing new capacities,” he said.

Mr Kamath also agreed with the Prime Minister that the industry needed to observe austerity in compensation.

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