There has been a significant improvement in the economy during the second quarter, said Dinesh Khara, president of the State Bank of India. Khara spoke at the Hindustan Times Leadership Summit 2020. “I will relate the improvement to the unlock situation. Unlocks lead to increased demands, which leads to significant improvement,” Khara said.
“The way the Indian economy is reviving after the lockdown is giving many hope,” Khara added.
The Indian economy is projected to contract 10.3% this year, according to an IMF forecast. Even the Reserve Bank of India expects the economy to contract 9.5% in the current financial year. The SBI president predicted a contraction of 8-9% for fiscal year 21, adding that “all of us expect a smaller contraction in the second quarter than in the first quarter.” The Indian economy contracted 23.9% year-on-year in the first quarter of 2020.
“After unlocking, every day is a new day. The way the economic reactivation is taking place is giving hope to many. The evaluation matrix is seeing changes, also in corporate houses. People will wait for the reactivation of demand “added Dinesh Khara.
“The unorganized sector in the rural economy is experiencing positive activity. Migrant workers are returning to the cities, according to remittance information,” Khara explained.
On corporate ownership of banks in India, Khara said: “A lot depends on corporate governance, whether it is publicly or privately owned. As long as corporate governance is strict, the ownership structure doesn’t matter much. When the law exists, it is important how it is being implemented by management. “
“Banking systems fear negligence or supervision. Regulation has become strict over time,” Khara added.
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