India has enough domestic resources to finance its growth without relying on foreign capital, but it needs to allocate savings more prudently than non productive assets such as gold, a market expert said.
Kotak Mahindra AMC CEO Nilesh Shah advocated greater public-private partnerships for state-owned firms to unlock wealth that will boost India’s growth.
“Do we have the money to finance our growth? The answer is yes. The day we can allocate our savings more properly, we can avoid foreign capital even if we need foreign technology,” Shah said in an interactive session at the MCCI Capital Market Conclave.
He mentioned the net import of gold worth USD 373 billion in the last 21 years and explained the unproductive use of domestic capital.
Shah also encouraged “public private partnerships for state owned firms to unlock value”, citing the example of Hindustan Zinc, where productivity jumped 17 times and more than Rs 10,000 crore was remitted to the exchequer as management was handed over to the private sector.
“We did not privatize Air India when it was a monopoly. Now that he had to divest, the government had to absorb a loss of Rs 70,000 crore,” Shah said.
When it comes to free trade agreements, he said, India should make more use of its digital infrastructure, services and manpower, which the country has in excess.
Another prominent capital markets expert Saurabh Mukherjea, founder and chief investment officer of Marcellus Investment Managers, said some powerful quiet changes that have taken place in the last few years have changed the game for India’s long-term growth.
These include physical infrastructure, tax and banking reforms, and strengthening digital infrastructure. He pointed out that 80 percent of corporate profits are generated by just 20 companies in India and this trend will continue. Shah also called for an enabling regulatory environment to enable growth.
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