Larsen & Toubro chairman AM Naik, sees little sign of a recovery in Asia’s third-largest economy, with some of his factories running far below capacity and facing a dearth of new orders.
Naik, the executive chairman of the 77-year old group, often viewed as a bellwether of India’s economy, said Prime Minister Narendra Modi’s reform agenda had failed to boost business among its core engineering, construction and infrastructure customers.
“In terms of economic revival, it is not happening on the ground,” Naik told Reuters on Wednesday at his office.
India matched China as the world’s fastest growing major economy with 7 percent growth in the last quarter, but economists have pointed to other indicators like capital investment to suggest the picture is not as rosy.
Naik said a recovery in private sector capital expenditure remained at least a year away, as corporations wrestling with hefty debts hold off investment even as New Delhi pumps billions of its own money into new road and rail schemes.
Several of L&T’s factories ready to build defence equipment for Modi’s “Make-in-India” campaign are waiting for orders, Naik said. He also questioned how the government could deliver on a pledge to build up to 30 kilometres of roads a day when less than a dozen highway projects had been put up for tender.