Indian economy is resilient... changes in bilateral trade are a huge opportunity, says Crisil CEO
For those wondering why private sector capex is not visible, here's an answer — it has reached a critical stage from where it is beginning to flow — said, CEO at Crisil, the biggest rating company that has the pulse of the Indian corporate world. Recent regulatory actions may slow the growth rate, but there is no trouble in sight, Mehta told Bhaskar Dutta and MC Govardhana Rangan in an interview. Edited excerpts:
The latest GDP growth numbers surprised everyone. There are divergent views on it and we aren't seeing private capex yet. What are the corporates telling you?
There are a few parts to this. One is the PLI (production-linked incentive scheme). It's very targeted — 15 sectors — and it's going to happen. Then there is conventional capex, the point that you are talking about. We are looking at capacity utilisation across multiple segments right now. What we are seeing is that in the top eight key segments, the capacity today is higher than the decadal average capacity utilisation that we have seen across those segments whether you take cement, steel, oil and gas, etc. Cement and steel plants are already expanding, refining is talking about green capex investment. Capex investment in these companies is at 13-14% versus 7-8% earlier. We are talking 13-14% growth in fixed assets. They have now started investing at a higher pace than earlier.
The next question is about the sustainability of this growth. Can this be repeated?
The resilience of the Indian economy is on the back of continued domestic demand and
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