Indian Economy Recovering Faster Than Expected: KV Kamath

KV Kamath reassured that the Indian economy is resetting and healing at a faster pace than we expected

(Photo: The Quint)

Video Editor: Ashutosh Bharadwaj

The COVID-19 pandemic has had an adverse impact on the global economy and subsequently the Indian economy, too. India reported a negative 23.9 per cent growth in GDP in the first quarter of FY21, which has led to several speculations regarding the direction in which the country is heading.

However, veteran banker and the ex-chief of the New Development Bank of BRICS countries, KV Kamath reassured that the Indian economy is resetting at a faster pace than we expected, and if the government continues with its existing policies, we will witness unbelievable things, in a conversation with The Quint’s editorial director Sanjay Pugalia.

The major reason behind this, he says, is that we have a strong domestic market which gives us the required momentum. He further added that we have an “excellent agricultural sector” which if combined with limited infrastructure and a push to the economy will be crucial.

In terms of the banking sector, he noted that “our banks are in a far better position because of the moratoriums and decisions taken by the RBI early in the lockdown.”

However, he is concerned about sectors like aviation, tourism and the hotel industry that are under major threat. On the contrary, the infrastructure sector has seen a rise in demand from the northeastern states, making it a new market for the sector.

On the topic of job losses, Kamath said that white-collar employees, who have been a victim of job losses, will become a part of what he calls the “digital supercycle”, which will not only create jobs but also boost our digital economy.

We are at a very young age in our potential in the digital world

KV Kamath, Veteran Banker

When asked about the government’s role in the economy, he remarked that the government has taken a conservative approach, which he thinks is a smart move.

He said, “The government is trying to contain the fiscal deficit.” This, along with the aids from the RBI, will help our economy “heal in six months”.