Rate cut not enough, auto industry must become globally competitive: RC Bhargava
While govt has to do certain things, more needs to be done by industry itself, says Maruti chairman.
What do you make of the kind of verdict that Modi-led NDA government get and how do you think it is going to be for India in the next five years?
The voter has shown great understanding of what Mr Modi has been doing and has understood that this work which he started five years ago requires to be completed because restructuring the economy and the governance system of a country is not a short-term project. The voter has full confidence in the Prime Minister and he has voted to let this programme be carried on and accelerated. The mandate shows that people actually are supporting what Mr Modi is doing.
What is it in terms of actions and indications that you expect the government to work on immediately? Is there anything that you believe the government should have on the top of their agenda?
The Prime Minister has done what needs to be done to bring this country on the growth path and to get the industry growing. Looking at all the challenges which the economy is facing, there are actions which have to be taken in all areas of the economy.
It is best left to him and the government to work out the programme but I do hope that on the basis of this programme and on the basis of what has been done, there will be more of a national consensus on the programme which will be undertaken and we will not have what has been happening in the past of perfectly good economic measures getting blocked just because of the theory that an opposition must oppose.
It is certainly a bolder NDA 2.0. That is something that one must watch out for. How different will NDA 2.0 be from NDA-1? What do you think is going to be different about Prime Minister Modi from here on?
Fundamentally, Mr Modi and the government will be very much the same. Because of the confidence which the entire country has reposed in what they were doing and they should not have any hesitation now in taking these reforms to their logical conclusion because the people of the country are behind them
Growth is something that has been a key fear among market participants for the last couple of months. The pace of growth may have been tempering a bit. What do you think the government should do with respect to that? Is cutting rates enough?
No, I do not think interest rates are going to drive the growth of manufacturing and industry and the economy. That is giving far too much importance to interest rates. What is needed is to look at all the factors which are inhibiting Indian manufacturing from becoming globally competitive. While the government has some things to do, far more will need to be done by industry participant themselves and it is not going to be the government alone which can make the economy grow.
All the people engaged in manufacturing, in industry and in education and in infrastructure everybody has to understand that to get what the people want, they cannot continue to function as if they are running their small little empires for their own personal benefits, they have to look at the nation as a whole.
Given that for the last five to six months growth in auto sector over has slowed down, what role do you think government could play in spurring the auto sales since there seems to be a liquidity crunch?
The banking reforms have very much to do with this. The whole role of the PSU banks and how they should function because I do not think that we can get liquidity problems and such issues resolved unless we have a very healthy banking structure.
One of the major reform areas would be the public sector which I believe is a drag on the economy.
I want to get in your perspective on the international trade front as well.A key contentious point over there is what Donald Trump is doing with respect to autos. Do you think this is the moment that India could shine as other countries are caught in the trade tussle?
We certainly have an opportunity but to take that opportunity, our products must become more competitive than products made elsewhere. That was is why I was emphasising earlier also the importance of doing everything possible to make Indian industry competitive. Competitiveness comes from quality, cost reduction, increasing productivity, waste reduction, improving infrastructure, improving manpower skills etc.
And do you think these are areas where India’s manufacturing is lagging behind a tad bit?
Absolutely. I think we are not adequately competitive yet.
Who do you think would be most apt to fit in among the top brass or the key cabinet portfolios of the new government?
I am totally incompetent to answer that question.