Millennium Post

India's consumption growth de-risks it from global uncertanity: Kamath

Confident about India continuing to grow on the back of its consumption-driven economy, veteran banker and BRICS nation's National Development Bank chief K V Kamath has said the world is going through very uncertain times but that may not have much impact on India.

At the same time, he also cautioned against excessive populism and said the country should do "what is right and what is required" and the first focus should be on driving economic growth, and then it can be ensured that fruits of it reach others to deliver inclusiveness of the growth story.

Kamath, who was here for the World Economic Forum Annual Meeting last week, also said that the demonetisation move in India would have only a "short-term blip" after which India should be back on a clear growth path.

On push for digital economy and the recent demonetisation move and whether the pain would be limited to short-term given the world economy is going through uncertain times, he said, "Clearly the world is enormously uncertain today. Having said that, that uncertainty do not have too much impact on India."

"We are still in consumption mode. We have to consume and grow. That safeguards us a lot from the uncertainty in the outside world," Kamath told PTI in an interview on the sidelines of WEF meet.

"Second, in terms of demonetisation, I would think that within the timeframe that the Prime Minister announced the move, I can see most of the things coming back to normal already. Probably the government wants the rest of the things to be digital because if we can leapfrog to a digital world, a whole lot of ills of the past can be addressed.

"I think that was a good move. We will see a short blip and then we should be back on a clear growth path."

On inclusive growth and India being ranked very low, including in a WEF report, Kamath said, "The whole issue of inclusion needs to be looked at in a context that where should one start. Ultimately, you realise that the key is to drive the growth.

"As you drive the growth, then you need to make sure that the growth touch many and it becomes inclusive growth.

"At times, the people tend to say that instead of investing in roads and linkages, put the money somewhere else.

The point is the roads and hard infrastructure give you the economic momentum and only from that economic momentum you will get the fruits of growth which reach many.

"I would say it is not about either/or and both needs to go hand in hand. To me both are not two equations but only one and we need to make sure that we drive it."

Asked whether populism should not be resorted to for the sake of it, Kamath said, "I think you should do what is right and what is required. And the right and required thing is that we need to grow. There is no question about it. And when we grow, we need to make sure that the benefits and fruits of that growth reach many".
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