Corporate India hopes to put behind it the economic woes of 2012 and ring in the New Year with optimism. The challenges remain, but industry sees positive signs on the horizon.

“As we welcome the New Year, the outlook for most economies is brightening,” says Kumar Mangalam Birla, Chairman, Aditya Birla Group.

“We tested some lows in 2012, I am sure we have the sagacity to learn, and be much stronger in 2013,” says Ramakrishnan Mukundan, Managing Director, Tata Chemicals Ltd.

Business Line sought the outlook for the New Year from some industry leaders. As Birla says “We welcome 2013 with sun-glasses.”

Kumar Mangalam Birla, Chairman, Aditya Birla Group

The curtains have come down on 2012. It was a tough year for the global economy. Almost every country grew more slowly than the previous year, although we avoided a global recession, like in 2009. Oil prices continued to be high, aggravated by unrest in West Asia. For China it was a watershed year, with growth falling below 8 per cent and with a historic political transition to a new leadership.

China is now actively pursuing a growth strategy that seeks to shift the momentum toward domestic consumption rather than rely on exports and investment.

The Euro zone is still struggling to find a solution to the sovereign debt crisis. It is clear that austerity alone will not bring the ailing economies back to health.

Some fiscal pact is necessary to complement the common currency and monetary pacts in Europe. This past year also saw a rapid slide in the currencies of developing countries such as Brazil and India.

Yet there were bright spots too. India received record inflows of foreign capital and the world’s highest quantum of inward remittances. The US corporate sector improved its balance-sheet and the iconic Apple Computers became the world’s most valuable company. President Obama’s re-election conveyed trust and optimism about recovery, though the campaign itself was bitterly partisan.

As we welcome the New Year, the outlook for most economies is brightening. The US and Euro zone are expected to fare better, and some solutions to the “fiscal cliff” as well as the European debt crisis are in the offing.

In India, I expect monetary stimulus in the form of rate cuts, and a pro-growth Union budget and reformist policies to be the highlights of next year.

We should see progress on fiscal consolidation with tax reforms and subsidy rationalisation.

With the revival in private and public investment spending, as well as boost in infrastructure and housing, I believe we will get back to a growth track of 8 per cent in the medium term. The increased vigilance and activism among citizens and stakeholders is also a force for the good in the medium term. We welcome 2013 with sun-glasses!

V. Balakrishnan, Head of Infosys BPO, Finacle and India Business Unit

Next year, continued concerns on the global economic environment will ensure that corporates focus more on efficiency, which will accelerate outsourcing and offshoring. The Indian IT industry needs to invest more in new technologies and platforms, as well as intellectual property, to be relevant to the customers’ business transformation needs.

R. Mukundan, Managing Director, Tata Chemicals Ltd In 2012, we probably expended most energy, buying time before taking few difficult and painful steps, not just in India but around the world. A lot more needs to be done to secure the long term future. Sustainability, transparency and good governance got a stronger boost during the year.

Going forward, we see three key issues of sustainability, technology and talent reshaping the global landscape.

Businesses have to move towards embracing the three forces to grow in a sustained manner. We tested some lows in 2012, I am sure we have the sagacity to learn, and be much stronger in 2013.

Aditya Ghosh, President, IndiGo Airlines

A key lesson of 2012 is to keep one’s costs lower than one’s revenues and meet customer demands with high-quality products or services, consistently.

We have been blessed with many years of double-digit growth. Once in a while, there is a slow year but India is a highly under-penetrated aircraft market with a burgeoning and productive population that needs to fly at affordable fares. Therefore, there is a long runway ahead of all of us! The key growth driver for Indian aviation has been and will be in future — the need for high quality low fare travel.

The economy and aviation industry both have a symbiotic relationship, so if India has to grow by 8-10 per cent then the aviation market has to grow at just double that rate.

Also, reaching out to people who have not had the opportunity to fly so far, and that is a huge section of the population in India.

The key challenges are to keep the cost low and continue to offer lower and affordable fares.

Ranjit Shahani, President, OPPI & Vice-Chairman and Managing Director, Novartis India Ltd

2012 was a challenging year for the pharmaceutical industry in India with the first compulsory license being issued for a pharmaceutical product followed by the revocation of some patents granted and then the announcement of the much-awaited National Pharmaceuticals Pricing Policy.

Hopefully 2013 will be more eventful but in a positive way. Universal Healthcare and healthcare access could gain momentum with 2014 being an election year and OPPI looks to partner with the government in its endeavours in this direction.

One looks forward to more clarity on intellectual property rights so that we have an environment that is conducive to innovation in the pharma industry.

Further, we can expect to see an increasing alignment of regulatory requirements with global best practices in the areas of marketing and clinical trial guidelines.

Tony Tyler, Director-General and Chief Executive Officer, International Air Transport Association

We expect the airline industry profits for 2012 to be $6.7 billion. And as we look into 2013 we see that rising to about $8.4 billion.

It is good news that the outlook is moving in a positive direction. But let’s keep the figures in perspective. After taking in an expected $637 billion in revenues, a net profit of $6.7 billion is a net profit margin of 1 per cent.

And $8.4 billion on expected revenues of $659 billion in 2013 will mean a net profit margin of 1.3 per cent. The industry is keeping its head above water. But only just.

(Inputs from Amrita Nair-Ghaswalla, Mumbai; Ashwini Phadnis, New Delhi; Venkatesh Ganesh, Bangalore.)

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