Although a rebound in the Indian economy is encouraging, there is “still a long way to go”, says Gautam Hari Singhania, Chairman and Managing Director at Raymond Ltd.

Covid-19 vaccination rollout is positive, but the pace of the drive remains “slow”. Unless most of the workforce is vaccinated, it is not possible to get the economy back on track, he told BusinessLine , during an interview. Recovery in export markets – like the USA and Europe – is also crucial to India’s journey as a manufacturing hub.

Edited excerpts:

How do you see the economic recovery?

The recovery is in the right direction, but we still have a long way to go. There is some concern, but not an alarm, about a possible second wave (of the virus). But, I don’t feel that there would be a second wave, as we have got some herd immunity.

The pent-up demand is there, and it is being serviced at the moment. If you don’t sell anything for nine months, demand for at least six months is likely to be addressed or serviced in three months. This is the concept of pent-up demand that’s playing out now.

Are urban markets recovering?

It is picking up. But, different businesses are witnessing different levels of recovery. For instance, real estate is doing well. People have realized that if something like this (a pandemic and subsequent lockdown) plays out, then getting stuck in one house could be very different. So affordable housing seems to be doing well currently.

Retailing is picking up, but apparel selling continues to be a bit of a challenge. Also, work from home for a prolonged period has impacted apparel sales. As you know, it’s the fashion business and once the season passes by, then selling becomes a challenge.

Would it then be safe to conclude that the worst is over for businesses?

It’s a tough one to call at the moment still. As the vaccination drive gains momentum, the lost confidence will be restored. However, it will be premature to arrive at any conclusion of sorts.

Are you witnessing a revival in private investment cycles, for instance, store expansion for Raymond?

The first thing you need is some stability. Maybe once you see a couple of quarters of sustained strength, then we can talk about growth because I don’t think that the world is out of the pandemic yet.

Isn’t the vaccination drive going to boost confidence?

Yeah, the vaccination rollout is happening, but it has to speed-up. See India has vaccinated ten million-odd people in a month, but that is not even one per cent of the population. It is a small part of the workforce. If you vaccinate one per cent of the people in a month, it is still very low. You need to speed it up. I know they are gearing up. But still, we need to go a long way and pick up the pace. In Mumbai, trains have opened up, and there is fear that Covid cases may rise. So the key point I'm trying to make is uncertainty exists.

Are you of the opinion that the private sector is permitted to vaccinate employees or vaccines are available in retail pharmacies?

The faster you roll it out, the better it is for everybody. The more people get it, the better it is for the economy. Look at the UK. At least 600,000 – 700,000 are getting vaccine shots daily. There is a need to vaccinate at least 200-300 million people (in India) quickly for a sizable percentage of the economy to be back on track.

It is not that you will inoculate people, and antibodies develop overnight. You still need a second shot and wait for days after that for antibodies to develop.

The other way round is to allow the private sector to buy the vaccines and roll it out for their employees. If the government allows it, we at Raymond are open to it.

Are you happy with the benefits that the Centre is extending for manufacturing units or the supply-side reforms that are being pushed?

It is a positive move to set up textile parks, doubling of allocation for MSMEs, which will make the country globally competitive manufacturing and exporting hub. The first digital and post-pandemic annual budget exercise has attempted to boost growth, revive investment and give a fillip to ease of doing business. It is a forward-looking document aiming to restore demand and elevate economic growth.

India is not isolated from the world. Be it tourism, services, manufacturing and so on; we are interconnected with the global economy. Closing up may have done wonders in tackling Covid, but we need to integrate with the world. The world is still very closed; and fortunately, we are more open than anyone else.

If you see what you see in the UK, Germany, France and elsewhere, it’s a horrifying sight. Imagine the situation (where) people don’t have money to buy food or to pay rent. In California (USA), the homelessness in Beverly Hills is at an all-time high. These are real things that are happening across the world. Western economies or developed economies have a problem.

The USA and Europe are big export markets. If India has to be a manufacturing hub, these countries have to be back on track. Freight and container rates have shot through the roof, making exports practically unviable. So we are dealing with a full cycle of problems here.

Related Topics
comment COMMENT NOW