There has been a change of guard at the Confederation of Indian Industry (CII) with TV Narendran taking over as the President of CII. CNBC-TV18’s Shereen Bhan spoke to Narendra on challenges faced by Indian companies.
Narendran said, “It has been challenging few months, but I think over the past few weeks we are starting to see things improving. We were concerned, maybe 3-4 weeks back whether rural India is being impacted more than we realised because we had visibility on what was happening in urban India."
"But some indicators tell us that it may not be as badly impacted as we fear, so we think that we could have a good recovery.”
He added, “Agriculture grew at 3.5 percent last year, we are expecting it to grow at a similar level this year and that boards well because we have a good monsoon ahead of us as well. We are cautiously optimistic with things opening up.”
On utilisation, Narendran said, “Utilisation is improving, again if I compare to last year where we had gone into hard lockdown for 2-3 months the disruption was far more significant to the supply chains. This time it has not been as acute as that."
"Secondly, what has also helping the situation is global markets have been strong so export markets have been strong and that has reflected in the exports number as well. We are seeing utilisation levels starting to pick-up, I think we are waiting to see the June numbers but certainly most companies have announced more production in June than they had in May.”
On fiscal support, he said, “The point we are making as CII is that given that most families and most people had to spend more on the medical expenditure than they had plan to over the last 12 months given that many have been impacted by either stagnant salaries or lower salaries or even job losses."
"There is a need to get the consumption sentiment back into positive terrain. Investment story from a government expenditure point of view is strong."
"Private sector investments will also start coming in some sectors, particularly sectors like steel, but if you look at consumption what we are seeing as CII could be looking at a GST cut of 2-3 percent for consumer goods for a limited period, just to get a sentiment back. Could be look at some support for high contact sectors like travel and tourism, some support for MSME sector who has been significantly impacted.”
For full interview, watch accompanying video...
(Edited by : Bivekananda Biswas)
First Published: IST