Industry expects growth-oriented policies; doesn’t see coalition as a speed breaker: Anish Shah

New Delhi: The industry expects growth-oriented policies to continue during the third term of the government under Prime Minister Narendra Modi and the compulsion of coalition politics will not be a speed brake, Mahindra Group CEO and CEO Anish Shah said on Tuesday. In addition to continuing its growth agenda, the industry expects the government to focus on four key areas – manufacturing for the world; women-led development; prosperity resulting from farms; and sustainable development. In an interview to PTI, Shah said that private capital expenditure, which is behind the government outlay, is also expected to increase with the continuation of stable government at the Centre.

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“From an industry perspective, stability is positive. It is also positive that this government has increased its focus on capital expenditure for long-term growth,” said Shah, who is also president of industry chamber FICCI.

Asked whether the compulsion of coalition politics, as the BJP failed to get a clear majority in the last general elections, could become a drag on economic growth, he replied in the negative.

“If we look back over the last 20 or 30 years, we have had a lot of coalition governments and the economy has continued to grow. Yes, we can now ask for faster progress, but given the actions taken over the last 10 years, and also given the stability of ministries… (there is) much greater confidence that the growth program will continue,” Shah said.

Asked about specific expectations from the government, Shah said: “First, I would say, continuation of the existing growth-oriented policies, and second, acceleration in (four) specific areas.” These include focusing on production through cost reduction and promoting ease of doing business to encourage the production of high-quality products. The second area requiring attention is women-led development, he said, adding that it was important to promote women’s participation in production.

“This is something where the corporate sector has an equal role (to play),” Shah added.

He said that women should have greater representation on company boards as well as in management positions.

Shah cited farm-based prosperity as the third area of ​​focus where the industry expects the government to take steps to improve farm productivity, reduce waste and promote mechanization.

He said there is a need to modernize value chains from farm to fork as this will have a long-term impact on the agricultural sector.

Highlighting the importance of sustainable development, Shah said the industry looks forward to the government taking steps to create sustainable urban infrastructure with special focus on the green economy.

He said the government’s high capital expenditure would help “increase private capital expenditure and result in greater demand… (and) faster growth. This is what we expect… now private investment will also increase.”

When asked what specific steps could be taken to increase private capex, he replied: “It will always depend on current capacity utilization and demand levels… So in some companies or industries where there is higher demand or higher capacity utilization , capex will be faster… we are looking at higher capacity utilization across all sectors and that is what will now start to drive capex.”

Citing the example of Mahindra Group, Shah said, “We have also made a lot of private capex in the last few years. We have tripled production capacity in the automotive industry. We are building a lot more resorts… a lot more real estate communities in many areas.”

Reiterating the importance of a stable government at the Centre, he said, “this is important because companies will also take this into account when it comes to capital expenditure decisions. Therefore… we are now in a good situation, and this should favor a period of higher growth also in the case of private investment expenditures.”