Sunil Kant Munjal, Chairman, Hero Enterprise, on Saturday said that there is likely to be “some uptick” in consumption in the next two-to-three months, but full recovery of the economy is expected to happen in the next four-to-six quarters. However, coronavirus (Covid-19) may be “a joker in the pack”.
According to him, barring some marginal impact due to hail and rain in the past couple of days, India is likely to witness a good harvest this year. This will help boost consumption and the demand is likely to grow.
The regulatory environment in the country has also been improving and both regulators and government are stepping in to effectively handle issues in the financial sector. Once the financial system is “cleaned up” consumption will automatically improve.
“The financial system serves as the backbone for any high growth in the economy. We (government and regulators) have been cleaning our system, non-performing assets are being dealt with promptly……while we are going through the pain of transition, but at the end a lot of benefit will come to India,” he told newspersons on the sidelines of the launch of his book - The Making of Hero , here on Saturday.
When asked about the possible impact of the outbreak of Covid-19 on Indian economy, he said, while there was some “concern” but he was not too “worried”. Though the negative impact of the virus should start receding by month-end, however, it needs to be seen how it impacts, he added.
IBC to become a smoothly functioning system
Hailing IBC (Insolvency and Bankruptcy Code) as an effective mechanism to address the NPA issues plaguing the Indian banking system, he said, “A lot of questions on IBC were raised but the way it is functioning, in the next two-to-three years, it will be a smoothly functioning system.”
Though questions have been raised about the efficacy of IBC following prolonged delays with most cases landing up in various courts including the Supreme Court, he said, these should be ironed out going forward.
The country has also made significant strides in the last ten years by rationalizing a large number of laws and more such efforts are in the offing, he pointed out.
On RBI’s intervention in YES Bank and SBI's plan to pick up a 49 per cent stake in the beleaguered private lender, he said, “It sends a very mixed signal. It first shakes up the system on one hand but it also proves that the regulatory bodies are awake.”
When asked about the possibility of GST rationalisation, he said that though the initial concept of GST was simple, but owing to a “lot of political compromises”, it has turned out to be “complex” in its present form. However, the complications around the latest tax structure should be addressed soon and GST will eventually evolve into a simpler form in the days to come.