Mumbai:
ICICI Bank chairman KV Kamath has said the country's economy is all set to grow by 7 per cent despite all the concerns. In an exclusive interview to NDTV's Shaili Chopra, Kamath said the reason for his optimism is growth in infrastructure sector and buoyant demand in rural India. Excerpts:
NDTV: What lies ahead for the Indian economy?
Kamath. I think that the Indian economy will grow at more than 7 per cent based on the fundamentals. In my view statistical data is of little value and the way I look at it is really what's happening on the ground in investment scene. We at the ICICI Bank have the ability to take this call. We have the projects that are being implemented by our customers and we know our projects that are being implemented by other people.
NDTV: What are the drivers for your optimism?
Kamath: At this point in time the strongest driver is the infrastructure sector. There is strong growth all around and the power sector, which was lying idle for 7-8 years, is now moving at a rapid pace. Further, the demand in rural India has not slowed down at all and it remained the engine of growth during the time of economic slowdown. The demand for input material in rural sector like cement etc. continue to remain robust just like it was during the challenging times. It is because the rural sector is not entirely dependent on monsoon because agriculture is directly impact only 15-16 per cent of the GDP. I think other industries in rural India are creating the momentum. And if you slice rural India then probably 48 per cent of GDP is coming from rural India while agriculture is only contributing 16 or 17 per cent.
NDTV: So then you don't get bogged down by this whole talk of drought in the country at the moment? You're saying there are a lot of factors that are working for ensuring that the impact is minimum.
Kamath: Entirely correct. I would say that as far as the drought is concerned, it's a separate challenge which you have to address, which is make sure that food grain is brought in and is distributed to the public distribution system at affordable rates so that nobody goes hungry and that is the challenge. In economic context, the impact is only going to be marginal. It is not going to disturb the growth part that we are on.
NDTV: What lies ahead for the Indian economy?
Kamath. I think that the Indian economy will grow at more than 7 per cent based on the fundamentals. In my view statistical data is of little value and the way I look at it is really what's happening on the ground in investment scene. We at the ICICI Bank have the ability to take this call. We have the projects that are being implemented by our customers and we know our projects that are being implemented by other people.
NDTV: What are the drivers for your optimism?
Kamath: At this point in time the strongest driver is the infrastructure sector. There is strong growth all around and the power sector, which was lying idle for 7-8 years, is now moving at a rapid pace. Further, the demand in rural India has not slowed down at all and it remained the engine of growth during the time of economic slowdown. The demand for input material in rural sector like cement etc. continue to remain robust just like it was during the challenging times. It is because the rural sector is not entirely dependent on monsoon because agriculture is directly impact only 15-16 per cent of the GDP. I think other industries in rural India are creating the momentum. And if you slice rural India then probably 48 per cent of GDP is coming from rural India while agriculture is only contributing 16 or 17 per cent.
NDTV: So then you don't get bogged down by this whole talk of drought in the country at the moment? You're saying there are a lot of factors that are working for ensuring that the impact is minimum.
Kamath: Entirely correct. I would say that as far as the drought is concerned, it's a separate challenge which you have to address, which is make sure that food grain is brought in and is distributed to the public distribution system at affordable rates so that nobody goes hungry and that is the challenge. In economic context, the impact is only going to be marginal. It is not going to disturb the growth part that we are on.
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