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December 23, 2008

Is the doom & gloom overdone?

Extracts from a Roundtable discussion organized by Economic Times, featuring Aditya Birla Group chairman Kumar Mangalam Birla, Tata Sons executive director R Gopalakrishnan, JP Morgan India CEO Kalpana Morparia and Temasek India chairman Manish Kejriwal.
Manish: Things are bad. As in every downturn, it’s always exaggerated. In a bull market, you feel better than you should. In a market like this, you obviously feel worse than you should. Till August-September we didn’t realise the extent to which the slowdown had come. The fact is we are part of a global economy and we are not decoupled. Six months ago, you started seeing iron ore pile up in Chinese ports. These were early signs that one had to pick up. The next two quarters are going to be difficult. Having said that, I think India, unlike China, is not that dependant on the global markets. There is still a very strong domestic market.

ET: What are the three key actions that the government needs to take to bring 9% growth back?

We can do more if more liquidity is required. What you can really do is to put the infrastructure projects back on the fast track. Studies have shown that the lack of infrastructure in India is causing 1-1.5% decline in growth.

Kumar Birla: One of our biggest advantages is that we have demographics in our favour, and if you want to convert that into an advantage, you got to invest in education. Why should they not liberalise education as a sector? I think taking longer-term policies are also important. You don’t have major policy changes happening, except in the time of the Budget. The third thing is — I know it’s utopian — but I think if we have a two party system, many political problems would get resolved.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at