Friday October 16, 03:18 AM

Source: Indian Express Finance

Results positive, industry wants stimulus to continue

By fe Bureaus
The Centre s stimulus package, the first installment of which was announced at the end of last year to kick start the economy, has seen the desired results with the country being resilient to the overall global economic slowdown. Sectors like automobile, which were witnessing sluggish sales, have started looking up with eight consecutive months of higher sales leading the industry body, Society of Indian Automobile Manufacturers (Siam) announcing double digit growth in the current fiscal. In fact, the country may beat its own record of the highest sales set in 2006-07. Things are looking up in sectors like steel, cement and consumer durables. FE spoke to a cross section of India Inc leaders to assess whether it s time for the government to withdraw the stimulus package. The overwhelming response was that though the signals were bright, the government should carry on for some more time with the stimulus. The consensus was the RBI should carry on with the soft interest rate regime. Akhil Gupta, deputy group CEO and MD, Bharti Enterprises: Unlike most developed economies, India did not have to resort to any major fiscal stimuli. The Indian economy did not face the distress the other economies did and, expectedly, has been among the first to recover. Considering the relatively low level of fiscal stimulus, it would be prudent to let this continue for some time so that all uncertainties about our economic health are completely removed; and after that it should be withdrawn gradually . Swati Piramal, director, Piramal Healthcare: The stimulus has really worked well as reflected in double digit growth in industrial production. These measures should be continued for another one and two years . Ravi Sud, CFO, Hero Honda Motors: The government s stimulus package was timely, and certainly helped industry to grow. However, with so much liquidity in the system, there is likely to be pressure on inflation. If interest rates go up, it would also put pressure on growth. Fiscal deficit also remains a concern, and the government has to address it sooner than later . Pawan Goenka, president (automotive sector), Mahindra and Mahindra said, We believe that the stimulus package should continue. Any disturbance in the current positive momentum could easily reverse the current positive trend . Rajiv Dube, president (passenger cars), Tata Motors (TATAMOTORS.BO : 634.85 -8.85): Call of the industry is for the stimulus packages to continue. The world is not off the recession yet and if you see many of the countries that had floated stimulus packages are continuing with them. Indian authorities have been prompt with their support to the industry and have set an example in front of the world . RC Bhargava, chairman, Maruti Suzuki India: Numbers are going up in relation to last year when sales were very low. Since the growth that we ve seen is a two-year growth, the government support in the form of stimulus should not be withdrawn at this time as it will badly impact the customer sentiment and ability to purchase. Moreover, as uncertainty over interest rate and commodity prices continues to prevail, the government should continue the stimulus package. HS Lheem, managing director, Hyundai Motor India: Stimulus package by the government in the past has been helpful for the automobile industry. But with the scrappage incentive coming to an end in most EU countries, Centre s support in the form of stimulus package is needed to keep export on the growth path .