‘Be aggressive on divesting, cutting rates’ – Times of India

TNN
Mumbai: India needs to become aggressive on disinvestments and lowering interest rates. This, combined with actions such as direct transfers to the needy and measures to revive demand through stimulus, would go on to help the country become a $10-trillion economy in 10-15 years.
This was stated by Hindustan Unilever CMD Sanjiv Mehta at a digital event organised by industry body Ficci, in conversation with Apollo Hospitals joint MD Sangita Reddy.
Mehta said the contraction in the GDP is worrying, but understandable given that India went in for a hard lockdown after the Covid-19 pandemic started. He reckoned the GDP growth could be anywhere from -6% to minus mid-teens in FY21.
“When we see this kind of contraction, it poses a certain risk of people who had moved from the bottom of the pyramid (BoP) to lower middle-class levels post-liberalisation, being pushed back to BoP,” said Mehta. The government needs to take some emergency measures, including direct transfers to the poor, even urban poor who are seen to be rising. “It’s the right thing to do till the economy picks up and we owe it to them. There should be no Indian going to bed hungry,” he said.
Mehta, who does not believe the pandemic is a black swan event, spoke in favour of interest rate cuts even at the risk of inflation because he said that would be better than the economy going into a tailspin.
While MSMEs have been given a lifeline, Mehta said once the moratorium ends, many may still require help in paying their debts. “It’s important that they keep breathing till the economy picks up,” said Mehta. He stressed that the government should create headroom to spend money and possibly go aggressive on disinvestments to raise funds.
In addition, Mehta said a stimulus during the festive season would help boost consumer confidence and demand, thus benefiting the economy. “When cost of not doing exceeds the cost of doing, it would be unfortunate.. If we don’t take these measures now, it might become too late,” said Mehta.
He said the retreat on globalisation is not in the interest of the country and that India should do its best to ensure the process of globalisation in trade does not halt. “The dream should be to make India into a middle-income country… We could be a $10-trillion economy in 10-15 years.”
He, however, said he feared the pandemic may slow government and private sector action on climate change. “We should give way on procrastination and take concrete steps to bring down the climate curve. We cannot get a vaccine for climate change,” he said.