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Veteran banker and Kotak Mahindra Bank founder Uday Kotak shared his year-end reflections as India completes 77 years of independence and the year 2024 comes to an end. Kotak urged Indian businesses to "go for growth" and "ignite animal spirits." He also outlined his ideas for the government and regulators to steer the Indian economy toward greater prosperity.
Kotak tells Indian businesses to go after "relentlessly for productivity", saying "ROTI is the return on time invested".
Kotak's blueprint for India also advises the country to "shun protectionism", saying that it may benefit in the short term but it makes everyone "uncompetitive" in the long term.
Kotak says that India needs to have a plan to eliminate the "current account deficit" in a reasonable time. India’s current account deficit (CAD) stood at $11.2 billion (1.2 per cent of GDP) in Q2 FY2024-25, down from $11.3 billion ( or 1.3 per cent of GDP) in Q2 FY2023-24. The CAD was recorded at $9.7 billion or 1.1% of India's GDP in the previous quarter.
He advises the government to increase spending on defence, saying that safety is a prerequisite for productivity. "Increase investment in defence. Power is power. Safety is a prerequisite for prosperity."
In the Union Budget of FY 2024-25, MoD was allocated ₹6.22 lakh crore (approx. US $75 Billion), the highest among the ministries and ₹1 lakh crore (18.43%) over the allocation for FY 2022-23 and 4.79% more than the allocation of FY 2023-24.
Kotak's advise to the government on "fiscal consolidation" is that it has to be "gentle and steady". "Continue with gentle and steady fiscal consolidation from here."
Kotak says regulators must avoid "over-regulation" and "micro-management" across sectors. "Zero accident policy is a high risk to growth."
He wants authorities to intervene only if there's evidence of "bubbles or manipulation". "Respect free and fair markets. Intervene only if there is evidence of bubbles or manipulation."
Kotak's next advice to those in power is: "India is 1.4 billion people. Let many flowers bloom."
Sharing his last bit of advice on India's tag of having many polluted cities, Kotak says India must get out of having amongst the most polluted cities in the world. "Let us walk the talk."
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