On India today, the opportunities, and challenges…
India today is actually in a pretty good place, globally. But as with everything in India, it’s never “a hundred” or “a zero”. I think, India is always in between. But I think in the last three-four years, post-Covid, India has become relatively stronger.
Five-six years ago, the then Chief Economic Advisor, Arvind Subramanian, in one of the Economic Surveys, said, “India had a twin balance sheet problem.” Corporate balance-sheets were stressed and the bank balance sheets were stressed. Now, I have an opposite point of view. Now I think, we have what I would like to call a “quadruple balance sheet advantage”.
The government balance sheet is fairly strong. Tax revenues are robust. GST is robust. Overall, the government fiscal balances are in a controllable place, especially after Covid, unlike in many other countries.
Second, the RBI balance sheet is in a very good place.
Third, the bank balance sheets are the best that I’ve seen in my 34 years’ career in India.
Fourth, the corporate balance sheets are very healthy. Everybody has reduced debt. Everybody has made themselves stronger. So, we have a “quadruple balance sheet advantage”.
(On the flip side), the household balance sheets and the rural balance sheets are still slightly weaker than what they were pre-Covid. We are seeing consumption slowing down in the last three-four months. So, that’s the minus part. But that is true all over the world. I think that is because of inflation. Everybody’s trying to slow down the economy to bring inflation in control.
This story is from the 22 April 2023 edition of Business World India.
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This story is from the 22 April 2023 edition of Business World India.
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