Parekh optimistic on govt, says 10% growth possible

Parekh optimistic on govt, says 10% growth possible

Sounding seemingly bullish on the prospects of economic growth in India, industry leader and banking veteran Deepak Parekh said that the conditions are right to lay the foundation for a 10 per cent growth.

“I cannot recall any other instance than now when India had rising stock markets, falling oil prices and a stable, majority government all at the same time. These are exceptionally good conditions to once again lay the foundation for the much-aspired 10 per cent GDP growth for India,” Deepak Parekh said while addressing Artha 2014- Capital Markets Conclave- ISB.

A 10 per cent GDP growth is achievable in the future but I would not even hazard a guess as to by when India can attain this double digit growth, Parekh said, adding that the country is still a long haul away from double digit growth rates.

Parekh came down heavily on the government's strategy to hold on to its stake in loss making public sector enterprises.

Leaky bucket

“It remains inexplicable as to why the government continues to want to hold equity stakes in certain sectors or companies. For instance, Air India should have been flogged off long ago rather than crores of taxpayers money being poured into this leaky bucket,” Parekh said.

BSNL is another example of the government hanging on senselessly, especially given how well the private sector players have performed in this sector, Parekh added.
Lack of demand Commenting on the lack of IPOs in the market, Parekh said that promoters have not priced it properly due to which there is lack of demand for it in the market.

“At the beginning of this bull run, one had expected more IPOs to hit the market but this has not happened so far. In FY08, India had raised a record $9 billion from the capital
markets but the following years have not matched up,” Parekh said.

The cardinal rule is that one has to leave something on the table for investors, otherwise they will completely back out of such funding, he added.

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