Anand Mahindra believes that Indian stands out in the global scenario and that 2016 will propel the country to reach its true potential. At Mahindra Group’s 70th Annual General Meeting, Anand Mahindra spoke extensively of the group’s future plans, India’s growth potential and the commendable reforms drive by the government. Mahindra however, was quick to caution, saying, “it’s too early to celebrate”. We take a look at 5 things Anand Mahindra said, that stood out in terms of India’s macroeconomic conditions and the future of mobility.
1) Reforms of Modi government: Mahindra believes that many important initiatives like financial inclusion and large scale irrigation plans are quietly but successfully being implemented and their effects are beginning to kick in. “In 1991, a new liberalized India was born. I believe 2016 will propel India to reach its true potential. After the sweeping FDI reforms in June, the Rajya Sabha passed the landmark GST Bill last week, which I truly believe will unleash the ‘caged tiger’ – India’s huge common market – which for inexplicable reasons, we had kept divided,” he said. As the recovery strengthens, Mahindra is optimistic that private investment, which is lagging today, will make a comeback, and “we will soon have an environment that encourages the joys of risk taking. It is a time for the return of optimism”.
2) India stands out: “The global scenario in 2015-16 has been uncertain and unpredictable to say the least. Global conflicts, the migrant crisis, the new twists and turns to the terrorism tale, the unexpected Brexit result, concerns about Eurozone economies, currency devaluation by China, tension in the South China Sea – the list of unforeseeable and almost unbelievable developments goes on and on. Against this background of turmoil and turbulence, India stands out by contrast,” Mahindra said.
He is of the view that at the macro level, indicators are going in the right direction. “There has been a sharp rise in public spending on infrastructure, Consumer demand is rising. The rain gods this year are smiling on us and the monsoon is reasonably well distributed in most key states. So we are seeing an uptick along many key indicators like consumer sales and retail loans,” he said.
On the external front, because of India’s relative stability, inward FDI flows are growing. “Despite Brexit and other disruptions, the Indian rupee is relatively stable. And against the background of growing global uncertainty, the growth forecasts for India are being revised upwards by analysts everywhere,” he pointed out. “After what seems like a very long time, I am confident that India is turning the corner, even if things appear gridlocked in the rest of the world,” he added.
3) What keeps him awake: The one fear that keeps Mahindra up at night is that once things look up, complacency will set in. “…and, as a result, we will always be hostage to the next round of failed monsoons. Even today, in the second decade of the twenty first century, we scan the skies each year as anxiously as our forefathers did, two centuries ago. Every failed monsoon takes us one step forward two steps back,” Mahindra lamented
Mahindra highlighted the need “monsoon-proof” the economy. “We are moving in that direction. The government has made irrigation and drought-proofing a priority. 2.85 million hectares will be brought under irrigation through the flagship Pradhan Mantri Krishi Sinchayi Yojana scheme in 2016-17. Rs 86,500 crore will be spent over the next five years on the Accelerated Irrigation Benefits Programme. But our goal has to be even more ambitious than that. We must aim for complete Swaraj from the volatility of the monsoons,” he said.
4) Driverless cars: Opinion is greatly divided about the imminence of autonomous “driverless” vehicles on global roads, feels Mahindra. “I believe that the technology is closer than we imagined. But their use will first occur in ring-fenced ‘circuits’ almost like shuttle routes. These could be located in city centres or tourist monument venues, or in some dedicated freight corridors.”
At the management board meetings, Mahindra has stressed using the strength of “our telematics skills in the larger Mahindra Group, we must focus strongly on developing autonomous, driverless commercial vehicles. Elon Musk’s recent new plans support that approach.”
Additionally, Mahindra also believes, “the most fertile ground – pardon the pun- for autonomy is in agricultural tractors. This is something that has not been emphasised enough globally. This is an area where productivity increases are sorely needed to feed the growing needs of the world. Tractors that operate autonomously could change the future of food production”.
5) Renewables: “As for renewable energy power trains, I need hardly tell you that Mahindra has made a pioneering bet on this by our acquisition of Reva, and our evangelizing of electric vehicles, both through our products and our participation in the new Formula E racing series, is evidence of that. We believe that as battery costs come down, the economics of electric vehicles will be irresistible for shared mobility fleets, even as high performance electric cars sustain mindshare. We fully intend to be profitable participants in this new world.”