New Delhi: HDFC Ltd mortgage lender chief executive Keki Mistry said on Saturday that “the worst is over” and that the economic recovery has been faster than expected.
Stating that growth in the December quarter could outpace the expansion seen in the corresponding quarter a year ago, Mistry said the Indian economy has shown resilience.
The benign interest rate regime will continue to advance and those rates will rise only after economic activity accelerates and inflationary pressure increases, said Mistry, vice president and chief executive officer of HDFC Ltd, in an online dialogue hosted by the Management Association. from all over India (AIMA). ).
However, he said that interest rates have bottomed out.
The government must identify sectors that create jobs and address their problems as a priority, AIMA said in a statement citing it.
Mistry said that the housing and real estate sector is the economy’s largest employer after agriculture, and that 80 percent of the workforce in the sector requires minimal skills.
It also sought priority support for the manufacturing sectors.
Speaking about repayment problems in the housing and real estate industry, Mistry said he expected delinquent loans to be in the single digits.
The veteran financial sector actor also said that most of the job losses during COVID-19 were limited to low-income workers and that job losses for the type of people who borrow money were not alarming.
Individual delinquent loans could be in the 2.5 to 4 percent range, which is also the extent of the loans that the RBI has allowed to restructure, Mistry added.
On the economic situation, Mistry said that the Indian economy has proven to be resilient.
“The worst is over and the recovery has been faster than expected. By the end of December, the economy would be at pre-COVID levels for most sectors. Growth for the December quarter could be better than growth for the quarter. December quarter last year, “he said.
However, Mistry called his optimism saying that a lot depended on whether another wave of the virus hit in the winter. Still, he said, the government was aware that India could not afford another blockade.
Job creation and putting money in the hands of the people should be the government’s top two priorities, Mistry said.
With consumption accounting for 60 percent of the Indian economy, recovery and growth efforts should be driven by the boost in consumption, he said.
“The cost of reducing taxes would not be too high, while the benefits of increased consumption would far outweigh the loss of revenue to the government. While corporate tax rates had dropped, the maximum individual tax rate had increased from 35% to 44 percent, “Mistry said.
Among others, Harsh Pati Singhania, Chairman of AIMA and Vice Chairman and CEO of JK Paper Ltd, said that interest rates could still be lowered a bit to stimulate the economy.
Singhania said there was a desperate need to generate demand.
“The government needs to be bold right now. Economic theory is one thing, but we need things to happen on the ground right now,” he said.
Kirloskar Brothers Chairman and Managing Director Sanjay Kirloskar said the economy was slowing even before COVID-19 and that many sectors performed better in September than the same month last year, according to the statement.
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