India’s GDP likely to grow double digit this fiscal despite Covid-19 second wave: Rakesh Jhunjhunwala

KR Srivats New Delhi | Updated on April 21, 2021

He highlighted the Government’s commitment to reform and pointed out how the insurance Bill raising FDI limit to 74% got approved in no time

Ace investor Rakesh Jhunjhunwala — who is popularly known as India’s Warren Buffet — has expressed confidence that the country would record double digit growth in GDP this fiscal despite the second wave of Covid-19 wreaking havoc on lives and livelihoods.

India has till date recorded 1.83 lakh deaths since the pandemics’ beginning, 2020, and the daily new cases have been over 2 lakh in the past six days.

“We have to take precautions. Lockdowns may be needed. But it is not the end of the world. We are in the midst of a big bull run that started the day market made a bottom of 7500 in March 2020. What is happening now is just a diversion from what is going to be a long ..long ..long bull market that we will have,” he said at AIMA’s 6th National Leadership Conclave, which was held as an online event this year.

Jhunjhunwala, who is the CEO of RARE Enterprises, felt that Covid-19 is largely an urban phenomena and that by June this year a good part of urban India would have been vaccinated. This pandemic is not going to affect rural India.

He said that markets are reading this (surge in Covid-19 cases in second wave) as a “blip” and once the country’s vaccination drive gets further steam, the worry is going to come down. While the human aspect of Covid-19 is tragic, there is also a business aspect, he added.

“I would have definitely liked that Covid had not come. But I am not going to change anything in my investing horizon just because of this Covid. Americans had the best decade after the Spanish flu. We in India are going to have roaring 20s this decade,” he said.

Jhunjhunwala highlighted the Government’s commitment to reform and pointed out how the insurance Bill raising FDI limit to 74 per cent got approved in no time.

“We Indians are underestimating the determination of Prime Minister Narendra Modi to reform. I thought the insurance Bill will get passed in six months. It has never happened that a reform is suggested in a budget and insurance Bill is passed in same session,” he said.

He also saw ample scope for Indian stock markets to rise and noted that India still had low corporate profitability to GDP ratio — mere 1.5 per cent compared to 9 per cent in the US. He highlighted the health forex reserves, low national and consumer debt compared to other large economies.

Jhunjhunwala expressed confidence that one day India’s per capita income will exceed that of China, although it may take 30-40 years.

Published on April 21, 2021

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