NEW DELHI: Larsen & Toubro (L&T) chairman AM Naik on Thursday went public with his concerns about the economy, saying, “Growth is going to be not more than 6.5% this year. My feeling is that though they (government) claim it’s 7%, if we can maintain 6.5%, we’ll be lucky.”
It’s a “challenging time” for the private sector to make investments, he said, pointing to high NPA levels.
What had aggravated the situation, he indicated, was low demand for goods, which was making it difficult to repay loans, he said while speaking on the sidelines of L&T’s AGM.
‘US-China trade war an opportunity for India’All auto companies were in distress and Maruti
Suzuki
had to sharply cut back production for the fourth month in a row last month, L&T chairman Naik said on Thursday.
When asked if consumption was a worry, Naik retorted: “Where is the liquidity, where is the money? Lots of promises were made during the elections, and you have to fulfill them now.”
He called the situation on data credibility “challenging”, saying one needed to use one's own judgement while studying the official numbers. He recommended faster decision-making and project clearances like in
Gujarat
when Prime Minister
Narendra Modi was chief minister. “When the Tatas had come with their motor plant, for three days officials stayed in office and in one week, all the permissions were given,” he said, and added, “You can’t take years to clear an investment proposal.”
He said the trade war between US and China presented India with a huge opportunity, “if we are able to attract the units leaving China”. But he rued that India had not been successful on that front as those companies had already chosen
Vietnam
and
Thailand
. “How many industries have come here? For the past two years, the US has been talking of moving American industry out of China, but we were busy in elections. So, we did not do anything,” he said.
Lauding the government for improving ease of doing business, he said, a lot of what ails the country is a legacy of past governments.
“I am cautiously optimistic,” he said when asked for his outlook on the economy. He said it would take up to
18 months
for the government to accelerate public spending for faster development.
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