At the helm of India's top engineering and infrastructure major that has over 64 diverse businesses across sectors, Mr A.M. Naik, Chairman and Managing Director, Larsen and Toubro, feels the current global and domestic economic indicators pointed to a clear slowdown of the Indian economy.
He said there was every reason to believe that the Government-envisaged growth rate of 8.5 to nine per cent would fall short of the target and did not visualise more than 7.5 per cent for the fiscal.
Global reality
Mr Naik said that all indicators on the global front definitely indicated a slowdown in growth in the country – from the Euro Zone crisis to increasing US deficit whose debt has risen to $14-trillion-plus.
Japan post-Fukushima is on the rebuild mode, which warranted an investment of $200 billion. The cumulative fallout of the Europe crisis, Japan disaster and the US deficit would slow investments, as each of them would be busy setting their houses in order as home priorities rank first.
Domestic slowdown
On the domestic front, he said the Indian economy is resilient but the happenings in the last six to nine months were not right for investor sentiments. The decision-making process of the Government had slowed down and added to that was the recent Mumbai blasts, which apart from the economic implications also affected the psychology of the people.
The Government has a lot of ground to cover to put growth back on the eight per cent to nine per cent track.
Globally, infrastructure was core to economic development and the pause in decision making had derailed the progress of development in the country, which as such suffered from poor infrastructure.
The delay was across sectors. Be it infrastructure for agriculture, urban areas, entertainment, water, power, airports and ports, the progress was dismal. As for railways, nothing had really moved and it continued to bank on the facilities developed four to five decades ago.
POLITICAL CLIMATE
Referring to the recent Cabinet reshuffle, Mr Naik said it was time the Government put the numerous scams and contentious issues behind and let law takes its course. The focus should shift to development and nation building, he said.
Mr Naik said corruption was a bane and the corporate world welcomed stern action against the guilty. Many a time corporates such as L&T had found it difficult to compete with other players as it placed them at a disadvantage. “Curbing corruption may not make corporates prosperous, but it would definitely not let them suffer. They don't have to worry about protecting their positions in tenders,” he said.
Coming down heavily on corruption, he said stringent actions would not only purify but also cleanse the rot that had set in the system.