India needs to move toward becoming a middle-income country and needs to decouple growth from its environmental footprint, Sanjiv Mehta, CMD and MD of Hindustan Unilever and FICCI President, said on Tuesday while also citing continued inflation concerns for businesses.
Mehta noted that India might have become the fifth largest economy, but per capita GDP is still at $2,000. India needs to ensure 8-9 percent growth while taking care of the environment as well, he said at the FICCI LEADS 2022 event.
The FICCI present acknowledged that the country saw unprecedented inflation, with wholesale inflation rising to double digits. He advised businesses to be prepared for the possibilities of continued or higher inflation and deflation of commodity prices over the next two to three years.
“The unprecedented inflation is not homegrown but has been caused by several global factors, including supply chain disruption due to the pandemic and Ukraine-Russia war,” he said.
He explained that the massive rise in energy prices led to increased food prices and unlike previously, this time, not few but many commodities witnessed inflation.
Mehta asserted that many factors shall result in inflation coming down, citing the example of dropping fossil fuel inflation. Every nation is ramping up renewables, and if war settles down, there will be a good impact on energy prices, he said at the event.
"It is very difficult to predict, but I think where we have to be ready with is possible three scenarios in the world today…One possibility is inflation, or a slight deflation will continue at a moderated pace from today's elevated base. The second is it could go up even further, and the third is there could be deflation in commodity prices," he said.
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