I Would Rather Focus On The Opportunities: Bimlendra Jha, MD & CEO, Ambuja Cement
In a chat with BW Businessworld’s Suman K. Jha, Bimlendra Jha , MD and CEO of Ambuja Cement, shares his views on the political and business environment in India and their implications. Jha, an alumnus of IIT, Varanasi and XLRI Jamshedpur, moved to the LafargeHolcim group company from Tata Steel in March this year.
Excerpts:
How do you look at the overall economic environment in India?
India emerged as one of the fastest growing economies in the world. The fundamentals for business are improving. The much-needed structural reform of the Good & Services Tax (GST) has materialised, financial inclusion has improved with Aadhaar-linked bank accounts at the bottom of the pyramid, and most vitally, the articulation and speedy execution of the Insolvency and Bankruptcy Code (IBC) has enhanced the accountability of borrowers.
The Real Estate (Regulation and Development) Act 2016, initiated by UPA 2, has now seen the light of day. Given the doubtful outcomes of demonetisation and a slowdown reinforced by the GST, one may still celebrate the move towards greater transparency and accountability brought by these changes. These are the strong foundations necessary to build on the economic freedom granted to this country by the then Prime Minister P.V. Narsimha Rao – Finance Minister Manmohan Singh combine in the early 1990s. As American author and philosopher Henry David Thoreau had said, “If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.” Prime Minister Narendra Modi seems to have done just that and we should be celebrating this Manmohan Singh – Narendra Modi artwork of the new India economy.
There has been increased public spending on infrastructure in the last few years. How do we keep the momentum going on infra?
The central government-led infrastructure spending (budget and off-budget) nearly doubled from Rs 2.8 trillion in the FY14 to Rs 5.3 trillion in FY18. The state governments also increased their developmental spend from Rs 2.2 trillion in FY14 to 4.7 trillion in FY18. The momentum is clearly strong on infrastructure spending, which is reflected even in the gradual growth in cement demand till March.
Continued momentum will depend on the achievement of fiscal and revenue targets of the government. Stronger emphasis on public-private partnerships will help enhance private sector contribution.
Some high-points of the Modi tenure like the IBC, were rarely debated during the elections.
Elections world over are being fought on emotional, rather than strong economic grounds. It is no surprise, therefore, that the IBC is seen as an elitist subject – dealing with recovering dues from wilful defaulters. It is not easy to communicate to the electorate the far-reaching implications of IBC towards greater accountability of borrowers, reducing credit risk for lenders, making credit available for entrepreneurs, leading to creation of jobs.
What challenges will the new government face?
I would rather focus on the opportunities that a new government will gain from now. We have the possibility of further unleashing entrepreneurship, transparency and financial inclusion, contribute to the growth of the India economy.
