"The business sentiment has bounced back quite well. The contract-intensive sectors have done very well. As much as the broader economy is concerned, I think the mood is quite good at the moment," FICCI President-Elect Subhrakant Panda said in an exclusive interview to ANI."India is well placed as we have managed to control inflation better than other large economies have done. I would say that perhaps the worst is behind us. Unless there are some surprises in terms of black swan events," he said.
Panda said that the Reserve Bank of India (RBI) and the central government are working in tandem to put their best foot forward, but one does have to be cautious because of geopolitical developments, because of inflation being a global concern in India, too. He said, "Inflation has been an issue but by and large it has been imported and given that commodity prices have been cooling off, I would say that perhaps the worst is behind us. Unless there are some surprises in terms of black swan events."
On the current state of economy, Panda said, "India is one of the bright spots globally. Recently when we were in Washington DC with the delegation led by FICCI CEOs coinciding with the Finance Minister Nirmala Sitharaman's visit, we had interaction with various people including the chief economist of the IMF. The consensus which emerged was that India will be one of the engines of growth going ahead and will continue to be one of the fastest growing large economies."
Talking about inflation, Panda said India had done much better than most economies in terms of inflation. "We are at a better place than other economies, where, uncontrolled stimulus measures have led to uncontrolled inflation at this point in time. The general consensus is that, by early next year, we should start seeing inflation cooling off. I believe that the worst is behind us."
He said RBI had done well in a difficult situation and working in tandem with fiscal and monetary policy have together resulted in the situation being more under control than it is anywhere else in the world.
Talking about the depreciation of rupee against US dollar, Panda said, "The dollar strengthening as a result of the US Fed hiking rates in uncertain times. The rupee unquestionably has depreciated against the dollar, but if you look at it vis-a-vis other basket of currencies, it has actually depreciated less than other currencies. If you look at the rupee performance vis-a-vis other currencies like the Euro and Pound sterling etc, we have actually appreciated." He said, "We appreciate the stand taken by the RBI. Depreciation happened in in relatively stable manner without too much volatility. We certainly appreciate the RBI efforts to tamp down the volatility while not defending any particular level per se."
Talking about the recession in European countries and in the US, the UK, Panda said that this would not have much impact on India as India is placed well.
Panda said that the biggest rate hike by the Bank of England in three decades, the US has four supersized 75 basis points rate hikes, all of these showed that those economies are sort of struggling to get inflation under control, while inflation is a concern in India, but it is less and also has more to do with imported factors such as commodity pricing and oil and in particular.
He added, "So India has handled the situation quite well. It would be prudent to be cautious because clearly there are unresolved geopolitical conflicts. The spectre of inflation globally continues to spook. Some of the larger economies are staring at recession, which fortunately is something which is not a worry for India at all, but generally, I would say cautiously optimistic."
( With inputs from ANI )
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