Mr. Navneet Munot
MD and CEO, HDFC AMC Ltd
In conversation with the Bombay Chamber, Navneet Munot, MD & CEO of HDFC Asset Management Company, shares insights into the economic landscape of India for 2024 amidst global dynamics.
What is your outlook on the Indian economy in 2024, considering global dynamics? What key factors do you think will drive or hinder growth?
Over the past couple of years, India has been far more resilient compared to other economies. The macro-economic stability – growth, inflation, external sector, political – along with long term structural factors like favourable demography, financialisation of savings, shift in global supply chain, policy environment, rising services exports makes India primed for sustained growth in years to come. Risk to this outlook include any spikes in commodity prices due to geopolitical tensions, leading to inflation momentum reacceleration.
How do you assess the current business environment in India and what factors do you anticipate influencing investment decisions in 2024? Any specific sectors of interest or concern?
From a macro-economic standpoint, India is one of the few economies which looks well poised in the years to come owing to various structural tailwinds. With good growth potential ahead in India’s Amrtikaal, opportunities for alpha generation exist across the entire equity market spectrum, with bottom-up stock selection holding the key. In a way, India is truly a stock-pickers paradise due to the plethora of options it presents.
How do you see government policies shaping the business landscape in 2024? Are there particular policy measures crucial for fostering a favourable environment for businesses?
Potent combination of focus on manufacturing, infrastructure development (physical, social, digital), ease of doing business and simplification of regulation could pave the path for India to outshine peers in the next few years. More importantly, the emphasis on inclusive and sustainable growth could make India’s growth story unique compared to the likes of China and other Emerging Markets (EMs).
The Govt of Maharashtra has issued two notifications for paid holidays on days of polling in various constituencies.
A. Notification dated 3.4.24 declaring public holiday under Negotiable Instruments Act
B. Notification dated 22.3. 24 declaring paid holidays under Section 135 (b) of the Representation of People’s Act 1951.
Copy of Notification attached.
Mr. Tejas Desai
Partner at Ernst & Young
India continues to shine as a bright spot in the global economy, poised for steady growth driven by a myriad of factors, believes Tejas Desai, Partner, Private Equity & Financial Services – Tax & Regulatory services at Ernst & Young LLP, as he weighs in on the economic prospects of India in 2024 against the backdrop of global dynamics. “India’s growth momentum is expected to continue steadily in 2024 and beyond,” says Desai, highlighting key drivers such as rapid advancements in physical and digital infrastructure, increased government capital expenditure, and a diversified manufacturing footprint following post-Covid geopolitical realignments. Desai points to the decade-low banking NPAs and corporate leverage, along with a reformed and digitised tax ecosystem, as pivotal contributors to India’s robust economic performance.
Desai has a positive outlook for the investment climate for the medium-to-long term, underpinned by India’s structurally robust domestic growth, healthy corporate profitability, and supportive pro-growth policies. According to him, the significance of India’s inclusion in JP Morgan’s Government Bond Index-Emerging Markets (GBI-EM), is a testament to India’s growing prominence in the global economy. However, Desai cautions against near-term risks such as a slowdown in global growth, geopolitical tensions, and inflationary pressures, both globally and domestically, which could impact investment decisions in 2024.
Reflecting on government policies, Desai emphasises the importance of further improving India’s ease of doing business ranking to attract more foreign direct investment (FDI). “Though India has attracted FDI to the tune of USD 596 billion from FY 15 to FY 23, there is potential for greater capitalisation of opportunities presented by China plus one policy of global MNCs,” he says. Desai underscores the need for continued focus on predictability and stability in foreign investment rules, including entry norms and KYC requirements, to foster a conducive business environment. Moreover, he emphasises the importance of a balanced regulatory approach that ensures ease of doing business while preventing misuse, alongside the appropriate interpretation and implementation of tax laws.
The ECI has issued a communication on grant of paid holiday, on the date of polls, to all employees who are entitled to vote in ensuing Lok Sabha Elections and the bye-elections in Assembly Constituencies.
The communication is issued under Section 135B of the Representation of People’s Act 1951.
Copy of the communication is attached.
Mr. Indranil Pan
Co-chair, Economic Policy Research & Development Committee,
Bombay Chamber & Chief Economist, Yes Bank
In conversation with the Bombay Chamber, Mr Indranil Pan, Chief Economist, Yes Bank, gives his insights into the economic outlook for India in 2024 and the factors influencing investment decisions in the current business climate.
What is your outlook on the Indian economy in 2024, considering global dynamics? What key factors do you think will drive or hinder growth?
How do you assess the current business environment in India and what factors do you anticipate influencing investment decisions in 2024? Any specific sectors of interest or concern?
How do you see government policies shaping the business landscape in 2024? Are there particular policy measures crucial for fostering a favorable environment for businesses?
The Maharashtra Labour Welfare Fund Amendment Act 2024 has been amended to increase the rate of contribution to Rs 25/- per employee and thrice that rate for an employer.
Notification dated 18.3.24attached
Ranjit Shahani
(18-08-1949 – 09-03-2024)
With profound sadness, Bombay Chamber of Commerce & Industry mourns the loss of Mr. Ranjit Shahani, a former President of the Chamber and a distinguished figure who has left behind his legacy in the realms of industry, commerce, and pharmaceuticals. Mr. Shahani, aged 73, passed away on March 9, 2024, leaving behind a void that will be deeply felt by all who had the privilege of knowing him.
Born on August 18, 1949, Mr. Shahani embarked on a remarkable journey that intertwined his passion for innovation with his dedication to societal progress. His tenure as the Past President (2007-08) of the Bombay Chamber exemplified his visionary leadership, as he adeptly guided various committees towards fostering collaboration among diverse stakeholders for the advancement of industry.
Mr. Shahani’s illustrious career spanned over two decades at Novartis India, where he served as Vice Chairman and Managing Director from 1997 to 2017. Prior to this, he held pivotal roles at Roche Products India and Imperial Chemical Industries (ICI), both in India and the UK. He also assumed leadership positions in organisations such as the Swiss Chamber of Commerce and the Organisation of Pharmaceutical Producers of India.
Recognised as a trailblazer and thought leader, Mr. Shahani advocated for the strengthening of intellectual property rights, data protection, and the liberalisation of pharmaceutical pricing mechanisms in India.
Mr. Shahani graduated with a Bachelor’s degree in mechanical engineering from IIT-Kanpur, followed by an MBA from the Jamnalal Bajaj Institute of Management Studies in Mumbai. With his innate ability to inspire and mentor others, Mr Shahani has left behind an indelible mark on all those fortunate enough to cross his path.
May his soul Rest in Peace.
As we stand on the precipice of a new era, the triad of artificial intelligence (AI), supply chain innovation, and energy transition emerges not just as individual actors but as interconnected forces that will define the trajectory of our global future. This comprehensive exploration delves into how these key drivers will collectively shape industries, economies, and societies in the years to come, highlighting the challenges, opportunities, and potential pathways toward a sustainable and prosperous world.
AI’s role in the future cannot be overstated. With its roots burrowing deep into the fabric of every sector, AI is set to redefine the limits of possibility. From machine learning models that can predict disease outbreaks to AI-driven automation that streamlines manufacturing processes, the scope of AI’s influence is boundless. Its capacity to analyze vast datasets in real-time can lead to breakthroughs in scientific research, while its application in education could offer personalized learning experiences to students around the world.
Yet, the path forward is strewn with ethical considerations and the need for robust governance frameworks to ensure AI’s benefits are equitably distributed while minimizing its risks. Questions of privacy, data security, and the socio-economic impacts of automation necessitate thoughtful dialogue and proactive policy-making to harness AI’s potential responsibly.
The global supply chain network, often unnoticed by the end consumer, is the backbone of our modern economy. The pandemic underscored the fragility of this interconnected system, revealing how disruptions in one part of the world can ripple through to cause global shortages and economic turbulence. The future demands a reinvention of supply chain logistics, leveraging AI, blockchain technology, and IoT to create systems that are not only more efficient and transparent but also resilient to shocks.
Sustainability is another critical aspect, as the environmental impact of global logistics comes under increasing scrutiny. Innovations such as electric vehicle fleets for last-mile delivery, circular economy models, and sustainable sourcing practices highlight the potential for supply chains to contribute positively to environmental goals.
At the heart of the global dialogue on climate change is the energy transition — the shift from fossil fuel-based systems of energy production and consumption to renewable sources like wind, solar, and hydroelectric power. This transition is essential not only for reducing greenhouse gas emissions but also for creating energy systems that are secure, reliable, and accessible to all.
Technological advancements play a pivotal role in this transition, with AI optimizing energy storage and distribution, and breakthroughs in material science making renewable technologies more efficient and cost-effective. However, the transition also requires significant shifts in policy, investment, and consumer behavior, emphasizing the need for comprehensive strategies that address the economic and social dimensions of the shift toward green energy.
The intertwining of AI, supply chain innovation, and energy transition presents a complex but hopeful picture of the future. These domains, while distinct, are deeply interrelated, with progress in one area often spurring advancements in others. For instance, AI can enhance the efficiency of renewable energy sources, which in turn can power the data centers that are the backbone of AI research and development.
However, the successful integration of these forces hinges on a foundation of equity and inclusion, ensuring that the benefits of technological advancements and a green economy are accessible to all, regardless of geography or socio-economic status. It requires a global effort, transcending borders and sectors, to foster innovation, build resilient infrastructures, and implement policies that prioritize sustainability and fairness.
As we move forward, the role of education, public engagement, and international cooperation becomes ever more crucial. Building a future that leverages the potential of AI, optimizes supply chains for sustainability and resilience, and transitions to clean energy sources demands collective action and shared responsibility. It is a journey fraught with challenges but filled with immense possibilities, inviting us all to contribute to shaping a world that is not only technologically advanced but also equitable, sustainable, and thriving for generations to come.
Cüneyt Yavuzcan
Consul General of Türkiye in Mumbai
Mr. Nilesh Shah, Past President, Bombay Chamber and MD & Group President, Kotak Mahindra AMC
This is part of a series of Expert Insights on 2024 that the Bombay Chamber will be posting, featuring industry experts who will give their outlook on what this year has in store.
India’s economic growth trajectory remains positive in 2024, supported by strong domestic demand and a pick-up in private and public investments. However, global headwinds like rising interest rates in developed economies and potential recession worries could temporarily slow export demand and manufacturing activity, believes Nilesh Shah, Past President, Bombay Chamber and MD & Group President, Kotak Mahindra AMC, as he shares his insight on how the country will perform in 2024.
India has strong economic fundamentals. These include domestic consumption, policy stability and reforms. These factors should help India outperform other countries. They should also help India sustain over 7% GDP growth. This is like expecting a batsman to score a century every time they bat.
The current business environment in India looks conducive for attracting investments in 2024, aided by policy stability, continuity and ongoing macroeconomic stabilisation. Sectors like banking and financial services, information technology services, and manufacturing look particularly attractive as credit growth picks up, digital transformation rises and Make in India gains traction. However, pockets of overvaluation and irrational exuberance in some stocks could pose risks for investors, like low floating stocks where valuations remain high.
The government’s continued reform push across sectors like infrastructure, manufacturing, financial services is expected to significantly improve India’s competitiveness and lift its growth potential. Ongoing focus on governance, policy stability, green transition and sustainable growth makes India an attractive investment destination compared to other emerging markets like China, Brazil and South Africa. Continuity on this front is crucial for fostering a favorable business environment.
Mr. Asit Bhatia
Vice Chairman of the Global
Corporate & Investment Banking Group at India
Bank of America
This is the first of a series of Expert Insights on 2024 that the Bombay Chamber of Commerce & Industry will be posting, featuring industry experts who will give their outlook on what this year has in store.
“Of the 22 countries that get into elections in 2024, India is amongst the important ones. While fiscal profligacy in the run up to elections is not unheard of, the current government is expected to continue its focus on some additional expenditure to fuel growth,” said Asit Bhatia, Vice Chairman of the Global Corporate & Investment Banking Group at India Bank of America, as he reflected on the economic outlook for 2024 amidst the evolving global economic landscape.
Bhatia anticipates a period of stability and growth, with India poised to deliver steady and sustainable growth despite the volatile global macroeconomic environment. “I see the next several years as a golden period for India,” he added, expressing confidence that India’s growth rate could exceed the anticipated 6.5-7% over the next couple of years.
Acknowledging the commendable job by the Government and the Reserve Bank of India (RBI) in managing inflationary pressures, Bhatia emphasised the potential for further growth. “Various factors underscore India’s resilience in the face of global economic challenges,” he noted, citing the Government’s infrastructure push, healthy corporate balance sheets, robust consumption narrative, and well-capitalised banks witnessing heightened credit growth.
Assessing the current business environment in India, Bhatia highlights robust macroeconomic fundamentals, including high growth, manageable fiscal deficits, controlled inflation, and improving current account deficits. “The Government’s reform-driven approach (GST, IBC, RERA, labor laws etc.) has improved ease of doing business in India,” he said. Bhatia cited the key factors that will influence investment decisions as political instability that will jeopardise policy continuity, external shocks from geopolitical issues and rate/policy paths of global central banks.
Anticipating the factors influencing investment decisions in 2024, Bhatia pointed to potential risks such as political instability and external shocks arising from geopolitical tensions. While he believes that no specific sectors of concern but underscores the attractiveness of India’s manufacturing and consumption narrative, the services sector catering to global demands, and the financial sector poised for substantial credit growth due to under-penetration.
Examining the role of government policies in shaping the business landscape in 2024, Bhatia emphasised their pivotal importance adding that taxation policies, capital controls, protectionism, and infrastructure development initiatives are significant determinants of economic growth. He anticipates a continued thrust on reforms from the government, conducive to attracting foreign investment and fostering domestic capex. “We see rapid infrastructure ramp up, de-carbonisation (500GW renewable capacity by FY30), step up in exports (on implementation of PLI schemes), opening up of government monopolies (privatisation), improving tax compliance (increasing tax filers), rising digitisation and financial inclusion to continue to provide scope for India’s corporate earnings to outpace its nominal GDP growth structurally.”
Amidst the optimism, however, he cautions against overlooking external factors such as geopolitical tensions and recessionary trends in developed nations, which could hinder India’s growth trajectory, “I do see the global geo-political situation, recessionary trends in some of the more developed countries, a global high-interest rate / inflationary environment, as some of the key factors that can hinder India’s growth, as we are now more than ever entwined with the global economy.”
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