Interest rate is an important factor for a pick-up in investments, said Adi Godrej, chairman, Godrej Group and former president CII. In an interview with Surabhi, Godrej, who is attending the Vibrant Gujarat Summit, said the government must improve the ease of doing business to encourage manufacturing growth. Excerpts:
There have been a lot of policy measures but investments are not picking up?
Investments are increasing but demand also must rise and for that there must be higher growth. In turn, it will help in a pick- up in investments. Some investments are also stuck in the infrastructure and mining sector for a want of clearances. But the Prime Minister is personally overseeing these and I expect them to be cleared.
How important is a rate cut for investment to pick up?
Interest rate (cut) is very important for this. And now with wholesale price index based inflation at zero, hopefully the Reserve Bank of India will reduce interest rates. So I am optimistic about investments picking up.
There has been a lot of discussion on India following the Chinese model of manufacturing as part of the ‘Make in India’ campaign. Your comments:
The ease of doing business is most important for investors. There are a lot of obstacles in manufacturing that should be cleared. And India should take the path that China took before. In China, wages are rising and there is a shortage of labour. India, on the other hand, has very strong manpower. If the government takes policy decisions to improve the ease of doing business, then India can be very competitive. It is very important to raise the share of manufacturing in our GDP from 16 per cent to 25 per cent, and I think that it can be done.
The Vibrant Gujarat Summit seems to be more of a pan-India summit this time.
There are a lot of attendees, including ministers from India and abroad. This is also the first Vibrant Gujarat since the PM demitted his office as chief minister of the state. I think it will add a lot to the investment process in India altogether.