Confident about India returning to 7 per cent growth path, top banker Aditya Puri has said that the government was serious about big economic reforms and “the proof of the pudding” will be pick-up in investments.
Puri, who heads the country’s most valued private sector lender HDFC Bank, said the new government has already removed the governance roadblocks that were stifling India’s true economic potential and it was working on “as big reforms as we possibly need”.
He also justified the prevalent exuberance about the India story, saying it was very much real and he would rather be ‘double exuberant’.
“We have got the right ingredients, we got the right government. We have identified the areas we want to work on and the government and business are collaborating. Why shouldn’t everybody be positive about India? I am very positive,” Puri told PTI in an interview here.
“Where is the question of tempering exuberance? I want to double the exuberance. Its absolutely for real,” he added.
Puri, Managing Director of HDFC Bank, said India’s economic growth rate was already among the highest in the world, while problems arising from a high current account deficit, a nagging problem of the past two years, has also been resolved.
“Other positives include control on the high fiscal deficit, which had led to some international rating agencies to threaten a rating downgrade, and a benign interest rate environment which will encourage investment,” he added.
Puri stated that such positives are attracting investors from abroad, helping the benchmark Sensex gain over 42 per cent since February to log new highs, and these factors should comfort us as well.
Puri, who has been confident about fundamentals being intact when when economic growth rate slipped below 5 per cent mark, said the formation of a stable government has added to the “always strong fundamentals”.
“What I was saying was our fundamentals are intact. There were issues of governance which were creating some roadblocks to our true potential. The fundamentals are still intact, and we are removing all roadblocks that were there and so my exuberance will only double,” Puri said.
Asked about big-ticket reform measures required in India, Puri said the government has taken decisions or shown progress on a number of fronts, such as Land Acquisition, Mineral Resources, Goods and Services Tax, Labour Reforms, Direct Benefit Transfer and Centre-State relations.
“These are as big reforms as we possibly need,” he said, while adding that “the proof of the pudding” will be when the investment picks up.
“Even without that, with only administrative efficiencies, the GDP growth rate will inch up to the 6 per cent mark and once the investment does pick up, we will reach the seven per cent GDP growth mark,” he said.
For two consecutive years, India has seen below 5 per cent GDP growth and many industry leaders had blamed a “policy paralysis” like situation and certain judicial decisions for this slowdown. However, the growth rate has begun to pick up and stood at 5.5 per cent growth in the first half of the current fiscal.
Puri, whose bank was last month allowed to raise foreign investment limit to 74 per cent from 49 per cent, also said that the government’s decision to allow banks to raise long term bonds for infrastructure lending, with a relaxation on the mandatory reserve requirements, were testimonies of the positive attitude of the Government.