We need to continue with the MGNREGA schemes and need to help the sections of the that have been impacted by the consumer inflation because that is going to be there," says TV Narendran, President, CII & CEO & MD, Tata Steel.

As CII President can you tell me if India Inc is expecting it to be a status quo Budget or a Budget that can do something and give a booster shot to growth?
From CII’s perspective we want the government to continue to do what it promised in the last Budget which is to spend big on infrastructure. That is important to get the demand growing in the economy. Private sector investment is likely to pick up over the next few months and it has already started picking up. We also want the government to do more on the consumption side as household balance sheets have been impacted by the pandemic. People have spent more on medical expenses than they plan to and there were job losses and salary cuts in many sectors, particularly the high contract sectors. So something more needs to be done to prop up consumption which is a bit fragile so that we can go back on track to a 9-9.5% growth for the next few years.

There are a couple of dimensions to it. One is a little bit more short term and is driven by the fact that the economies across the world including in India have recovered faster than most people had planned for and more supply chains were ready for. That has led to inflationary pressures across commodities including in freight rates and everything else. Some of that has started settling down over the last few weeks and a couple of months and it is expected to settle down.
The second part is a little bit more to do with liquidity and to do with availability of money and that fuelling asset inflation and everything else. CII stands by the recommendations that both on the investment side which the government needs to support and also needs to be supplemented by support on the consumption side and that is why I think we need to continue with the MGNREGA schemes and need to help the sections of the that have been impacted by the consumer inflation because that is going to be there.
It is still at the higher end of what RBI would like and so that is something that we need to address and I think going forward some support for the MSMEs particularly those MSMEs who have not come out of the cycle well, some contact for the high contact sectors which employ about 10 million people and also promotion of sectors like tourism, etc, where employment is generated so that the low ends of society also have incomes which can to some extent mitigate the impacts of inflation as it settles down.

If you look at investment over eight, 10 years back it was largely chemicals, metals and power, of which chemicals and metals is coming back. Power is changing, 10 years back it was mostly about thermal power plants. That is no longer where the money is flowing into. It is more green energy and renewables now. So, we are seeing the investment cycle coming back and that is why we feel that if the government continues infrastructure spending as it has promised to, the capex cycle will come back in the private sector.

We are seeing that amongst our members, most of them are at high capacity utilisation and have announced that over the next year, they will be reviving the capex cycle.