The Indian economy is facing unprecedented inflation just as the country is headed out of the Covid-19 pandemic,Sanjiv Puri, chairman and managing director of ITC, said. Talking at The Financial Express Boardroom 2022, Puri said inflation is a key concern, and the ongoing geopolitical conflict between Russia and Ukraine has only accentuated it. “As the pandemic was ebbing we are faced with a situation of unprecedented inflation. Both food and energy inflation are key and the recent conflict in Ukraine has only accentuated the situation,” the ITC chairman said. Puri also touched upon three focus points that he believes India needs to work on to stay on the growth trajectory despite rising inflation.
Persistent inflation poses serious challenge
Even before the Russia and Ukraine war, inflation appeared to be persistent and not transitory, Puri said. “This certainly is a key concern given that India is a consumption-driven economy and high inflation will potentially impact growth and resources.” CPI inflation has now breached RBI tolerance band for inflation for the second consecutive month. While inflation could prove to be a serious challenge for India’s economic growth, the veteran industrialist highlighted three focus points that he believes India needs to work on to stay on the growth track. These include employment generation, dealing with quality of income, and addressing challenges and opportunities of the climate crisis.
Triple-decker strategy to make India’s growth resilient
Elaborating his point, Puri said for employment generation, the fundamental is getting capital investment in the economy. “Private investment is weak because capacity utilisation is lower at the moment. Investments that would have happened pre-Covid will hopefully get filled up as consumption picks up,” he said, commending the Union Budget strategy of ramping up public expenditure. The ITC chief further said macros for investment have never been better with low interest rates and good corporate balance sheets and low taxes.
Puri also touched upon increasing farmer’s income in India and said that agriculture is an enormous opportunity for the country. “Just 7% of our produce is exported and our share in global trade is just 3%, and given the tailwinds of the post-pandemic world, it is possible to double our agriculture exports.”
Food processing an opportunity
Puri further highlighted how the food processing industry has massive opportunities ahead. With the growing population and changing diet patterns amid depleting natural resources, he noted that there is a tremendous opportunity in the space.