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We Are Cautiously Optimistic - Gdp To Grow At 9.5 Percent In Fy22: Narendran, CII
T. V. Narendran, President, CII in an exclusive conversation with BW Businessworld, speaks about economic recovery after the impact of the second wave and highlights key aspects that we need to focus on to be prepared for the third wave of Covid-19.
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Covid-19 has ravaged the economy, businesses – medium and small have suffered, jobs have been lost. What is the forecast for the next few months? How will the recovery be and how will businesses fare?
The way we are looking at it from an economic point of view is that, last year the economic impact was more sever because the lockdown was sudden, the lockdown was complete, and globally also, all countries were not sure about when they would come out of their crisis because no vaccine was in sight. This year, we are looking at a situation where globally things are much better. There are vaccines in place, many countries have vaccinated a large part of their population, the developed world is putting in a lot of money into recovery and the growth forecast in the US has been upgraded. US is expected to be back to pre-pandemic levels in 18 months while China is already back- globally things are much better now.
In India, we are prepared, we have not seen a migration of workers that we saw last year, the economic impact so far is expected to be a bit less. I think what we are a bit watchful of is the rural economy, last year the recovery was led by the rural economy. Last year, in July- August it was the rural markets that picked up, we have been a bit concerned about that part this year, because the visibility of what was really happening in rural markets was not as much as what was happening in urban markets. The stats we are getting from last couple of weeks is that the rural markets are not as bad as we feared. The rural economy is on a comeback, India is forecasting growth, agricultural growth of 3.5 - 3.6 per cent which it was last year. Our members who are in the tractor business are starting to see some signs of recovery in the rural market. I would say we are cautiously optimistic, we are forecasting 9.5 per cent growth for the year. However, we must keep in mind that 9.5 percent will only get us back to where we were two years back.
Let’s talk about job losses. Covid-19 also saw mammoth job losses - what do you see happening on this front in the next few months?
I will say different sectors have been impacted differently. If you look at the commodities sector or the metal sector for instance, you know here post pandemic recovery has been strong, and as a consequence most metals companies have announced expansion plans, which means they will be creating more jobs. However, if you look at the high contact sectors like hospitality, retail, aviation, travel, they have all suffered hugely - the MSME sector has suffered hugely. So that is why when we talk about support, we need to have very specific support, and not ‘one size fits all’ kind of an approach. This year's budget had a huge amount of money planned for infrastructure spending and that is to me very important because construction is a big employer. It is important for us to make sure that money, which is being planned for expenditure is spent, and construction activities happen across the country in building infrastructure, which not only helps industry from a competitiveness point of view but also helps in terms of demand growth and creates jobs.
Vaccination they say is a key driver to get through this pandemic , what are your views on improving the vaccination drive?
At the moment, there are more people who want to be vaccinated than there are vaccines, and just now the focus is on making sure these supplies increase month on month. The vaccination level has comes back to what it was before the second wave, which was 3 million a day (we had hit 3 million a day in March and this went down 1.5 million in April -May) and now we are back to 3 million a day. But as CII is saying, we need to get it to a level of 7 million a day if we want to come close to vaccinating a major part of the country. For this we need to take the vaccine production up - we believe, that over the next three months the production can go up to 17 million a day. Secondly, what we are recommending is to allow and encourage vaccine manufacturers and IP owners to license the technology, have technology arrangements, license capacity etc so that we can get the capacity increased.
Do you think better public private partnership would help us when we need to tackle the third wave?
Certainly. I think the last couple of months have also demonstrated that the government and industries can work closely together during the crisis. Oxygen shortage was tackled together by the industry and government together. This is where CII comes in - working closely with the government for the last six months. A lot of our members are also in the healthcare space, including vaccine manufacturers and hospital chains - this is too big a problem for one stake holder to solve.