India would be the story for the next 20 years: K V Kamath

Mr Kamathhighlighted that for a targeted growth of 10%, key focus on inclusive and equitable growth has to continue. Mr Kamath was addressing a CII meet in Mumbai on May 22, 2008.

With strong savings rate, domestic consumption, export performance and strong fiscal performance, the Indian economy is robust and geared up to meet growth challenges. While presenting the strong fundamentals of the Indian economy, he indicated that the government is taking active measures to curb inflation and address the various areas of concerns.

He mentioned that for the next five years, India and China would continue to lead the growth and would have many success stories. Though rising prices of oil, food and commodities were matters of concern, the global context has to be referred, maintained Mr Kamath. Inspite of the rise in commodity and consumer prices, low agricultural productivity, increasing pressure on Balance of Payments and infrastructural bottlenecks, growth of 8%-9% is still achievable. The fiscal, monetary and supply chain measures being taken by the Government and the tremendous growth of the industries would enable the economy to curb inflation and sustain growth at these percentages.

Viewing concerns in the global context, Mr Kamath cited that the inflation in developing countries is around 7% and since the Indian economy is comparatively less dependent on exports, the impact of global slowdown would not be huge. An inclusive growth of 10% for the medium term with target increase in manufacturing share to 25% by 2020 is achievable. Also, that the GDP has accelerated from 5%-6% p.a. in the 80s and 90s to over 7% in the current decade is an encouragement.
We are not seeing slowdown in investment which is a sign of optimism, said Mr Kamath. To take the per capita income from $1000 to $1500, it will take us next 5 years and to double it would take 7-8 years.

Talking about key risks in medium term, Mr Kamath stressed upon inadequate framework to handle urbanization process. With about 300 million people migrating, reinventing urbanization specifically in Tier II and Tier III cities has become very crucial. The developmental agenda for the medium term would be to have better access to health, education, skilling, urban regeneration and wider access to financial products, emphasized the CII President.

Highlighting the imperatives and enablers to achieve growth, Mr Kamath stressed that host of agricultural and labour reforms were the prerequisites. Also emphasizing on requisite of skilled manpower, the CII President mentioned that time has come to introduce vocational training in various institutes and universities to meet the demand of skilled jobs in the short term.

Elaborating on CIIs vision of India @ 75, Mr Kamath projected that by the year 2020, India should have worlds largest pool of trained manpower, India to become world leaders in industry and commerce and to account for 10% of world trade.