“Growing of the economy and growing of manufacturing has to be the priority. We need political consensus on how to grow the economy,” Bhargava told TOI when asked about the slowdown pangs that have hit the Indian economy, the country’s industrial production and manufacturing sector, and the automobile industry.
“There have been so many measures that got stuck in Parliament, and in the Rajya Sabha. It has an impact on the economy,” the chairman of the country’s largest carmaker said, adding that there should be an agreement between the various political parties on how to go forward. “It is not a political matter, but (something which is) in everybody’s interest. We have not yet reached a national consensus on what is the method of growing the economy.”
Bhargava said that the “fundamental question” for the country and the different political parties should be on how to nurse the economy back to health, and what long-term strategies are needed for growth of the manufacturing sector and its various constituents.
“The downturn gives us an opportunity to think in-depth, and long-term. Do we all agree that the private sector has to grow faster in order to create manufacturing growth or not? Does everybody agree on this, or not? If this happens, then other things will follow. This should be one item of consensus. For more rapid growth of manufacturing, the private sector must be given the bulk of the impetus. Can we have national consensus on this?”
“We need to accelerate our rate of growth. Unless the rate of growth increases, investments will not be made. Investments are made only when the existing capacities are getting inadequate. But if we have spare capacity, then why will companies invest?” Bhargava said. “Remember that jobs will be created only when we have a growth in manufacturing.”
The depressed sentiments in the auto industry have seen Maruti’s parent SuzukiNSE -0.77 % giving a bleak outlook for this fiscal as it said that sales in India could fall by 20%, against the previous estimate of 4% growth.
“We are not growing as we need to grow at the moment,” Bhargava said when talking about the auto slowdown. Investment plans of the industry are not robust in view of the difficult economic growth climate. “New investments will come once we see the demand pick up. Everybody makes investments according to requirements.”
The Maruti chairman said that while the Narendra Modi government is working on plans to revive growth, there is a need to have long-term strategies rather than rolling out short-term boosters. “More micro-level, longer term planning is required. The government needs to provide inputs, and the rest has to be done by the industry. As far as Maruti is concerned, we are not able to make any firm long-term plans. We don’t know what we are supposed to do.”