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India slipping on growth rate over the past few years and its economy continuing to face hurdles on various fronts, including low demand, are due to external factors that have posed several challenges one after another, according to Sanjiv Bajaj, CMD, Bajaj Finserv.
Once the country gets over the pandemic and the Ukraine war, and demand revives, there will be absorption of capacities, and the cycle of investment, demand creation, supply and consumption will start again, he said.
Speaking at The Indian Express Idea Exchange conducted virtually on Thursday, Bajaj said that the country is in a continued period of significant uncertainty, with the war creating an additional layer.
“But let’s hope that falls into resolution. Maybe then, in a couple of quarters, you will see strong growth coming in… Even as rates start tightening up, we know our central bank is focusing both on inflation as well as on growth,” he said but cautioned that the country can’t afford runaway inflation.
Speaking about his father, Rahul Bajaj, who passed away last month, Sanjiv Bajaj said that while he was described as a member of the so-called Bombay Club, “as we can see today, what he was trying to say is how do we make the market competitive”.
“He was the original Make in India and that today is a national call. And he stood very proudly by that. Make in India did not mean make in a manner that was uncompetitive, that would not sell all over the world,” he said.
While economists have been pointing that India Inc is witnessing consolidation with big players getting bigger, Bajaj said while large successful companies are ending up controlling capital, assets and land, the digital world is dramatically changing this equation across sectors.
“The digital world is breaking chains of old monopolies and driving competition because consumers are getting more and more choices… I actually see the days of companies depending on their size for success becoming less and less. If at all, size can be a disadvantage because it hinders innovation and risk-taking,” he said.
With his operations focused on the financial services sector, which has seen customers facing turbulence across banks and NBFCs over the past few years, Bajaj called for a swift and strong action by the regulator.
“My suggestion to all financial services regulators is to focus more on the bigger risks and not get into micro-management because that will not move the needle in the long run… Some regulators are bringing in people from the industry and are encouraging their own people to take up external roles for a certain period of time. This way, you bring the best of both worlds within the regulatory environment,” he said.
