India’s GDP growth will slowdown due to global headwinds, says Deepak Parekh

“But India has enough of tailwinds with political stability, vaccine security, food security, a robust domestic consumption based economy,” Parekh said.

The country has leap-frogged on digitalisation initiatives and it has a robust regulatory system for the financial sector, he said, while speaking at the silver jubilee celebration of management institute SPJIMR’s Centre for Family Business and Entrepreneurship (CFBE).

Union minister for road and transport and highways Nitin Gadkari was also present at the event.

Parekh noted that amid rate hikes by central banks of the western world, India is lucky to have a pause in rate hike by the Reserve Bank of India in the recent policy.

“We are lucky to have finally got a pause in the rising interest rate cycle,” he said.

In its first bi-monthly monetary policy announced on April 6, the RBI, in a surprise move, left the repo rate unchanged at 6.5 per cent. This pause came after six consecutive hikes in the repo rate, to tame inflation, in the last 11 months, starting May 2022.

Parekh further said in the recent period, geopolitics has dominated over geoeconomics with spillover impacts on trade, services, technology, capital flows and even in the mobility of the labour force.

“There is immense distrust amongst countries at a time when we most need global co-operation to solve common pressing issues like global supply chains, global warming, cyber threats, money-laundering, data privacy, responsible use of artificial intelligence amongst several others,” he said.

Parekh said entrepreneurship in India has exploded because of the conducive start-up environment in the country. The country has the third largest number of start-ups after US and China.

“As for start-ups, many investors still have plenty of dry powder for good, innovative ideas, but the days of cash burn and high valuations are behind us,” he noted.

Speaking on the family-owned business, the harder decisions in such businesses is the ability to honestly address issues on gaps in the company.

“The million dollar question is when should the family make way for nonfamily professionals? Another critical issue is that seniority in age or patriarchy should never be mixed up with leadership,” he said.

According to Parekh, having a strong, diverse and inclusive board without conflicts of interest helps family-owned entities navigate through sensitive issues and tough decisions.

“It is important to be able to prioritise what is good for the company over what is good for the self. This is always easier said than done. Yet, long-term survival means being alert to changing realities, inculcating right governance practices and having a succession plan in place,” he said.

He said the companies that truly believe in corporate governance and its benefits, are the ones that succeed over the long run.

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