ICICI Bank managing director and CEO KV Kamath said on Friday that India is likely to grow at around 8% in the immediate future, mainly because of a deceleration of growth in the manufacturing sector. ?However, the country is expected to attain around 10% growth in the longer run, and such a phase could continue till next 17-20 years,? he added.
Speaking at a conference on Friday in Mumbai on Challenges for a Higher Growth Economy organized by Confederation of Indian Industry (CII), Kamath said, ?High inflation is a temporary challenge that we are facing today. The spurt in inflation is not going to impact our economy?s growth substantially as liquidity in the system is at comfortable levels. Due to supply-side pressures, the affordability of a layman in the country has been impacted. I am sure the government will take appropriate policy measures to counter the inflation.?
He said, ?In most consumer credit items, the 35% advances growth that the Indian banking sector witnessed in the past has softened subsequent to the inflationary tendencies, particularly in the property market.? While addressing the CII gathering, Kamath spoke of many other challenges that the country faces today in order to accelerate the current growth process.
He said, ?We would encounter many more challenges of different types when the country?s per capita income crosses $2000, maybe within next 8-10 years. Our country fortunately will not be affected severely by the global crises due to the recession in the US. However, to sustain and boost our growth, the right training to the young generation workforce in the country is inevitable. I would identify skilling ? the infrastructure of people, as our prime challenge towards propelling our economic growth. In India, ample jobs exist and the job opportunities would grow in future. But do the right skills exist? We need to address these issues at the earliest.?
Citing the example of superior water resources management executed by the government of Gujarat, Kamath said that good policy reforms implemented by the states necessarily bolster the economic development of the respective regions. ?Continuation of policy reforms across the country is also a challenge ahead,? he said. On the bank’s outlook on interest rates, ICICI Bank joint managing director and CFO Chanda Kochhar said, ?Our advances would continue to grow at around 20-25% in the current fiscal. However, the composition of lending is expected to change. More credit growth is anticipated to happen in the corporate segment when compared to the expected consumer credit off take. We would wait for the Reserve Bank of India?s policy measure before taking a final call on the interest rates. But for the moment, they remain unchanged.?
She said, ?Over the next three years, a colossal sum of around $ 700 billion is expected to get invested across various projects in the country. The good news is that in spite of the rise in cost of debt and the recent slowdown witnessed in the economies across the globe, nobody till-date has announced withholding proposed investments in India.?