Decoding Economic Revival with Ravi Pandit
Mr. Ravi Pandit, Past President-MCCIA and Group Chairman-KPIT Group in conversation with Mr. Sudhanwa Kopardekar, Director MCCIA about the Emerging Business and Economic Prospects.
Q: What is your take on the state of the world economy?
A: There are two things in the play, one being the Covid-19 pandemic and the second thing is that the long-term secular change. Some of these changes are expedited by Covid-19, while few have resulted only because of Covid-19. So, what we see around is a combination of both of these. Clearly, global production and global demand have taken a hit because of Covid-19.
We also see changes on account of secular change. For example, in the case of personal cars, there is a general reduction in production because of reduced demand. But there is also the whole trend towards shared mobility and electric mobility globally which will make a difference.
I am more interested in the transition that will take place in the world after Covid-19. I think the demand for residential areas will increase while demand for office spaces and shops will go down. Certainly, the world will never be the same again.
Q: What do you feel about the state of the Indian economy?
A: Clearly, the Indian economy has taken a bad beating. Again, I think some of that was because of Covid-19 and immediate factors and some of that was on account of our long-term problems like the high cost of energy due to poor electricity management and blockage of funds because of the way loans are sanctioned even after so many years of nationalisation.
Our response to Covid-19 is an answer to some of the problems. There has been a lot of criticism about how we responded to Covid-19. But the fact is that no country in the world knows the best way to act against Covid-19. There was a time when everybody talked about the way Sweden responded to Covid-19, but now their policymakers have apologised because they took Covid-19 very lightly.
Q: What kind of policy interventions are needed on the fiscal and monetary fronts in India to achieve higher levels of economic activity?
A: From a monetary perspective, I don’t think we should put more money into the system. I think we need better utilization of funds that are currently in use. There is a need for governance of expenditure rather than anything else. I strongly believe that there is a strong case for GST rationalization. I think the government has learnt the lesson so far. I am not in favour of either raising the taxes or cutting the taxes. We should learn to manage our expenses well. For example, the agriculture sector reforms such as ending the monopoly of APMCs is a phenomenal development.
Q: What can be done by SMEs to achieve business growth in the short to medium term?
A: I think the first thing that we all have to realize is that the world is changing and a change will create opportunities rather than trouble. We have to start with that mindset and apply it everywhere. For example, I used to go to Yoga classes twice a week, now that institution has started giving Yoga lectures at home. They have adapted well to the situation and hence their business is growing. Likewise, hotels and restaurants have started delivering food at home. In business, generally, it is always like this, out of 100 people, probably 10 of them are agile and completely change. In the new business, they will take the lead, the other 90 % of the people keep on ruing the fact that their earlier business has been ruined. My request to our members, look at the problem as an opportunity and think about what can be done.
Q: What can be done by the government to stimulate the economy?
A: The government should look at these problems as an opportunity and make basic broad policy changes in a way which would run our life. They have done good work for labour, they have to good work for banking which have they have not done yet, they have not done good work for the distribution of public services in urban areas, management of electricity, etc. There is so much work that needs to be done. I think we should go out and do it fast.
As soon as Covid-19 goes away people may protest for any strong change that you make. Can you imagine the government making changes in labour laws and not seeing a single protest? If an investment has to be done by the government in irrigation-let there be a Reverse Auction. Let the government put in Rs. 1 crore-and people commit another Rs. 50 lakh by their effort such that the highest traction (in terms of acres) is applicable. If we do something like this — the government’s expenditure can be managed.
I also think that the government has to come up with the Defence Procurement Policy which will give an opening to the private sector. What is the harm in giving orders to Indian Private parties where the quality of the domestic manufacturer is good, particularly in areas where we have been importing from international private parties? So, I think these are the changes we should do just now.
I also think that at this moment public health and insurance have to be more efficient. But the direction is right.
Q: What are your thoughts about Pune’s economy over the last few years and its potential?
A: Pune’s automotive industry has tremendous potential because of the new automotive segment-Electric Vehicles, Fuel Cells. In the education sector too, there is a huge potential because now that we know that a student does not have to be in person in the class, the whole world is a classroom. We need to think about how we can improve our offering when there are global universities-It is a very tough question. We have to increase our standards and if we increase that, then 10% of the people can do 90% of the work. The third area where we can do a lot of work is food processing by combining food processing with agriculture and eCommerce especially in the context of the new APMC Law. Pune has a lot of industries and I think this is a very smart time to rethink.
Q: Any thoughts for MCCIAs activities and initiatives for the industry over the past few months and in the months ahead?
A: We should see that in these areas (digital events organized by MCCIA) — the whole industry and not just Pune-based companies is our customer. So certainly, our scope changes. Now that we know that our members are suffering-this is the time to do more for them. — How do you digitize your business, how do you expand your business, how do you look at markets outside are some of the questions that need to be discussed. You could organize 15–20 minute talks on “How I have beaten Covid-19 (in terms of business).” Something on the lines of TED Talks could be very inspiring for our stakeholders.
( This is an edited excerpt from the interview that appeared in the November 2020 edition of Sampada, the monthly magazine of MCCIA. The complete issue of Sampada can be accessed at https://www.mcciapune.com/media/Publication/Publication_File/final_Oct_-_Nov_Diwali_Issue_2020_2.pdf )