The corporate giants of India are a worried lot sensing that recession will hit US and the whole world. “We need boldness, speed, decisiveness and experimentation in policy and implementation,” said Kumar Mangalam Birla while delivering the JRD Tata Memorial Lecture 2011.
The lecture on ‘Navigating India through a Choppy World’ was organised in New Delhi by the Associated Chambers of Commerce and Industry of India (Assocham).
“The prospects of a double-dip recession now seem very real. The quick-fixes, the massive stimulus packages, the QE1, the QE2 and now perhaps a QE3 are beginning to seem more like band-aids used to fix a leaking roof in a tropical storm,” said the chairman of Aditya Birla Group.
“The fiscal measures that were needed and were appropriate to resolve the problems in 2008 suddenly seem either unsustainable, or just not up to the task. The fiscal position of a host of countries has been stretched to breaking point. The queue behind Greece grows longer - Portugal, Spain, Italy, Ireland. The US debt situation has also escalated into a new zone of danger. Japan is entering a third decade of low growth,” he said.
Birla said the shifts in global economic situation in the wake of financial, global and fiscal crisis have become extremely volatile and unpredictable. This calls for a global coordinated response. “The prospects for a return to pre-crisis normalcy are difficult.The world today manifests certain polarities and contradictory developments – like simultaneous occurrence of low and high inflation, scarcity and shortage of labour, and sharp political differences.”
International trade is coming under pressure from the possibility of protectionism and currency manipulation, he said envisaging a period of continuing uncertainty for the medium term. Birla recounted the Aditya Birla Group’s positive experience of policy environment in various countries like Thailand, Brazil, Britain and Canada.
Birla said there are many lessons from international experiences. “We could plan our investments carefully, and there was a high degree of predictability. Regulations facilitated rather than hindered our projects. Policy clarity was high. It would augur well for our nation if our policies were clear, transparent, consistent and not reversed.”Only the unbridled actions of its people, its entrepreneurs, its dreamers, its visionaries can altogether bring new level of prosperity, he said.
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