Axis Bank CEO Shikha Sharma stated that putting manufacturing sector back in growth mode and removing bottlenecks for the stuck-up projects will be vital in kick-starting the recovery process.
Axis Bank CEO Shikha Sharma is optimistic that the economy can definitely start to turnaround within a year from now. Prospective investors from overseas are watching the elections and if a stable government is formed there could be a big boost to fund inflows, according to her.
“We held investor meetings in the U.S. last week and the level of optimism about India is very high. I have not seen such interest in recent times and if a stable government is formed at the Centre, we could see huge portfolio flows,” she said addressing journalists of The Hindu group of publications here today.
Talking about the slowdown in the economy, Ms. Sharma said: “It’s really been one of the most challenging environments from our banking perspective, particularly the last 18 months. I have worked in the financial services sector for over three decades and to get this combination of low growth, high inflation and high interest rate — all at the same time — is not something I remember having seen during this period.” The only positives were management of fiscal and current deficits from a macro economic perspective. “And, so the worst is probably behind us and things should turn around. We are optimistic about the next five years. Of course, we don’t think changes are going to be seen immediately. Definitely not for the next couple of quarters but hopefully in a year to 18 months, we should see more vibrant and stronger economy and that is what we have also positioned ourselves,” she added.
She stated that putting manufacturing sector back in growth mode and removing bottlenecks for the stuck-up projects will be vital in kick-starting the recovery process. But she asserted that sentiments are also vital. “Recovery will first of all come from sentiments. If the fear and uncertainty reduces, consumption will come back and help make the stuck-up capital productive through clearance of projects in the pipeline.
Ms. Sharma pointed out that things were actually becoming a bit more stable in Europe, while in the US things are becoming more growth-oriented. “So two geographies are doing a bit better, China is going through a transition period of recovering from a period of very high growth phase. A positive secular trend is seen related to those economies. Clearly, India has seen much lower growth than normal for two years. I think the secular trend for India is also going to be positive. Of course, volatility will remain because of flow of money and technology change, but we are optimistic about next five years,” she said.
Answering a question on banking sector reforms, Ms. Sharma lauded RBI’s efforts on appointment of committee on bank governance, while she said RBI’s focus on quality of reporting by banks and data sharing to handle the credit quality issues, among others were all good steps in the right direction.