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Why Indian economy is a half-full glass

Things may look bad but India is not in the economic doldrums, felt industry leaders at a panel discussion at the Bengal Chamber of Commerce on Tuesday.

“Finding the Up in the Downturn” — organised by the Calcutta management Association and the Calcutta Stock Exchange, in association with The Telegraph — was moderated by Joydeep Datta Gupta, the CEO of Deloitte and Touche.

The panellists were Sunil Mitra, former finance secretary and currently the chairman of the board of directors of the Calcutta Stock Exchange, Anup Sinha, economics professor at IIM Calcutta, Sanjay Budhia, MD of Patton Group of Industries, and Siddhartha Chatterjee, the country head of Trustline Securities.

The situation is certainly not as dismal as it is being made out to be, agreed the panellists, in reference to an article in The Economist that claimed the Indian growth story was over. “Investments need to come back to India,” said Mitra, pointing to the “three pillars” of Indian economy: consumption, savings and investments.

The Indian growth story isn’t as vibrant as it was, but Mitra was confident that it would bounce back.

Chatterjee pointed to the career path of his colleague Budhia to prove a point. “Sanjay was down when he started out and thought that portable water tanks would be a profitable venture. Now he’s doing well. So there has to be a period of down (slide),” Chatterjee said. “If we’ve managed 2002 and 2009, we’ll manage this. The investment climate is very persistent.”

India is currently the office of the world, said Budhia, and could well become its factory. At this point, India has the capability of acquiring companies outside the country, he felt. “While other countries are only talking about doom, we have to look at the positive things. The situation is very different in India and we cannot be complacent at a growth rate of 6.5 to 7 per cent,” said Budhia, who had brought a glass of water to the dais. “You need to see whether the glass is half-empty or half-full,” he said.

Sinha continued on the optimistic note. “We have been reading and seeing in the media that India’s growth has slowed down. It depends on which way you look at it. A growth rate at six per cent is a hell of a good job.”

But the main thrust of the discussion was that there can’t be any growth if there is no investment.

The panellists agreed India had a demographic advantage because it had more younger people that the West, which has a larger retired population. By 2015, they agreed, China would also have an ageing population and that is why India would do better.