New Delhi: India’s GDP declined by 23.9 percent in the June 2020 quarter. Meanwhile the economic growth will come into positive territory only by March or June quarter 2021, but India will have to turn the crisis into an opportunity by introducing reforms, Nilesh Shah, a part-time member of the Economic Advisory Council to the Prime Minister.
Shah is the managing director of Kotak Mahindra Asset Management Company, attributed the surge in equity markets to the optimism they get by looking at the future
Shah spoke at a webinar organized by professional networking platform Linkedin. He hinted that GDP will be hit by the pandemic for two years but stressed that we need to take advantage of the challenging situation, just the way we did in 1991 during the forex crisis which put the growth momentum in a new orbit.
Shah said many companies want to shift out of China and India can be the provider and welcome them. The cost of logistics, which makes Indian goods uncompetitive at the global level, has to be reduced. Besides, the cost of power has to go down as subsidized supply to farmers makes it expensive for the industry to get electricity, he said.
The resources made available to the companies will help Indian economy boost. The high capital flows, low oil prices , a good monsoon are among the factors which can make one hopeful about the future and added that the market is looking ahead with optimism.
Referring to Indian IT stocks he said, stocks are “fairly” priced and not over-expensive. The technology companies will be able to flourish in the future as well if they tap into the digital opportunity. The mutual fund industry is targeting a four-times growth in the number of those investing, to 10 crore people from the present 2.5 crore in the next five to six years.