As Indian growth slows down, Industry urged to focus on future

Chennai:

As Indian economy growth is projected to slowdown to five per cent, industry experts are stressing on the need to invest in future rather than focusing on cost cutting initiatives.

Speaking during the India Finance Forum’s ‘Addressing Growth in Uncertain Economic Environment’ organized by Confederation of Indian Industry here on Friday, S Mahalingam, former chief financial officer of Tata Consultancy Services said businesses have to create more efficient economy that adheres to the requirement of the future.

He also said that there is also need for businesses to adapt to technology. In 2006, there were no social networking sites but now you have cloud computing, twitter, facebook. Technology is changing and this is a biggest challenge for businesses, Mahalingam added.

He also said that in the future regulatory pressures would continue to increase.

M Narendra, chairman and managing director of Indian Overseas Bank urged the businesses to focus on rural market. He also stressed the need for new entrepreneurs in the manufacturing sector.

He said that banks are willing to b help the private sector growth but there needs to be fiscal discipline and risks needed to be minimized.

Interestingly, experts also were optimistic of the a better growth perspective with oil prices coming down besides the Delhi-Mumbai freight corridor taking shape.

S Chandramohan, president and group chief financial officer TAFE LTD said the growth is also linked to the monsoon. He said the prediction is that there will be normal monsoon this year.

Chandramohan said that he expected the economy to attain the eight per cent growth by 2014-15 provided everything goes well in the global economy.

Interestingly, with the corporate sector feeling the pinch even the tax revenues of the government was hit during the global economic slowdown. It is believed the nation suffered nearly 2.5 per cent loss of tax revenue in the gross domestic product. When the GDP grew at eight per cent, the tax to GDP ratio grew by 25 per cent. The collection reflected huge saving in corporate sector as a result many policies were taken including slashing of customs rate.