Economy

Investments in healthcare, education are topmost priorities: CII President Uday Kotak

K. R. Srivats | | Updated on: Jun 04, 2020
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Outlines 10-point action plan to revive economic growth

Redefining investment priorities for India, the new Confederation of Indian Industry (CII) President Uday Kotak on Thursday made a case for significant increase in ‘healthcare’ and ‘education’ spends to help the country navigate the post-Covid-19 world better.

“We need to reimagine India from the lens of healthcare and put it on the top of our investment charts. We need to look at health and healthcare just like how we focus on defence. One of the things we realise in the middle of Covid-19 is that our investments in healthcare have to be significantly stepped up from the current 1.3 per cent of GDP,” Kotak said in his first press conference — held on a virtual platform — after assuming charge at the helm of the apex industry body.

Building India

Kotak said the CII’s new theme for 2020-21 would be ‘Building India for a New World: Lives, Livelihoods and Growth’. He however said the CII has, in a departure from the past, decided not to provide an economic growth forecast for the country.

“We have decided not to predict GDP. Frankly no one knows. It is all guesstimates. We are now going beyond numbers and focusing on issues that are at the heart of building India for a truly new world. You should look at growth far more modularly and stay away from a growth average for the year. I do see trend growth returning by the end of the year,” he said.

Kotak said the CII is committed to an Atmanirbhar Bharat that is competitive and engaged with the rest of the world. For India to be Atmanirbhar, there has to be big focus on exports and the country has to compete with best quality nations, he added.

Animal spirits

Kotak said India in recent years has been “disproportionately dependent” on Government spending followed by consumption as core drivers of growth. “Two areas which we need to buck up are private investments and exports. Entrepreneurs need to get that animal spirits up. Private investments are going to be key for sustainable growth. In the short run, we do need steps for getting demand back. Getting demand back without dramatically increasing supply over a period of time is not a sustainable strategy,” Kotak said.

TV Narendran, Managing Director & CEO, Tata Steel and President-Designate of CII for 2020-21, told BusinessLine that private investments have been weak over the last few years and lot of capital invested has been from the Government and public sector. To get private investments back, there has to be demand growth, he said. Both demand and profitability of industry are required for private investments to come back, he added.

“I think private investments will be back as fundamentally India is macro economically in a good place and is a consumption-led economy which is shifting to be investment-led. I am positive over the medium and long-term,” Narendran said.

One-time restructuring

To a question on whether the Reserve Bank of India should allow one-time restructuring of loans by banks without it being considered as non-performing loans, Sanjiv Bajaj, CMD of Bajaj Finserv and CII Vice-President for 2020-21, said the industry body has suggested to the RBI to evaluate it.

“We believe that on certain type of loans like short tenor small value loans, one-time restructuring may not be required. But for loans to MSMEs and mid-sized corporates, one-time restructuring can make a positive difference if banks and NBFCs are allowed to provide it wherever there is merit. We are hoping the RBI would take this into account,” Bajaj said.

Ten-point agenda

The CII’s 10-point strategic agenda includes protecting lives and livelihoods; prioritisation of healthcare and education; Mother Nature; fiscal deficit and financial stability; distribution of economic pain; role of digital and physical; future of jobs and social security; rural-urban re-balance; four levers of growth and getting growth back.

Published on June 04, 2020

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