Pawan Munjal, Managing Director and CEO of Hero Group, has been at the World Economic Forum for ten years now. Speaking exclusively to NDTV’s Shweta Rajpal Kohli at the Davos Forum, Munjal said that the global picture is quite uncertain.
Munjal added that India will achieve double digit growth in a couple of years going forward; however, the government here needs to focus on improving investor sentiment and developing infrastructure.
He feels that perception management and brand building is what India needs to do on a global stage. He said that senior government functionaries should have been in Davos.
Below is the complete interview.
Kohli: Many would say that the mood this year in Davos has been changing as quickly as the weather. It was freezing two days ago and now we are seeing a very bright sunny day. So, people are not sure about what lies ahead in 2012; some are saying it is all gloom and doom, others are saying it’s looking much better than expected.
Pawan Munjal: It is all about uncertainty. Nobody is really sure what is going to happen. I just walked out of a Eurozone session but I don’t know what is going to happen and I think that is the case with most people around here.
Kohli: And uncertainty is something which no one likes be it policy makers or business leaders because that is what holds back investments and the business mood. Going forward, do you expect this uncertainty to continue through 2012, till Europe really figures out how to get out of this crisis?
Pawan Munjal: This uncertainty to continue through 2012 for Europe and other nations connected with Europe. However, what one sees is that news coming out of the US is more positive. I believe there are some numbers, which came out today, are good numbers. So there is some hope there going forward. But when we come to places like India, we are hoping that things would start improving as we have seen slowdown of sorts.
Kohli: The year 2012 started off on a better note. The market is looking up, the rupee is looking better, so has your outlook become more positive?
Pawan Munjal: From my point of view of the two-wheeler industry, 2011 was a very good year. And 2012 may not be as good as 2011, but personally, I’m still hoping for a double digit growth. But this year maybe not as healthy as 2011.
Kohli: An interesting discussion that has always happens is about India comparing itself with the rest of the world, while back home we are worried about growth slipping from 9 per cent to 7 per cent levels. Everyone here is saying that it is not so bad at least we are growing at 7 per cent levels, whereas the rest of the world is not even growing at those rates. There is a talk of another recession happening, there is a talk of Europe collapsing. So, are we being too negative about our growth rates? Is there a real concern there?
Pawan Munjal: Well in terms of actual numbers of growth, I think the nation is doing very well as 7 per cent is a very health rate of growth. However, for a nation coming from where it is coming the last decade, we definitely need 9-10 per cent growth to get to where we want to.
Kohli: What is stopping us from achieving that growth?
Pawan Munjal: I’m sure there are a lot of issues like inflation, high interest rate; the sentiment is not so good, investments not happening. Going forward, we need some bold moves from the government and the elections are behind them that is what the industry is hoping for.
Kohli: But how soon can we achieve that 9 per cent growth that we were hoping to get in this fiscal? Will it take time to catch up and reach those growth rates? As far as the budget is concerned, is that a distant rate?
Pawan Munjal: I think that even a 9 per cent is years away. FY13 is not going to see 9 per growth, but we will see double digit in a couple of years from now.
Kohli: But before we reach that number, the industry has been engaging with the government saying that they need to fix interest rates. What according to you are the three things the government needs to fix almost immediately to make sure we start reviving the growth rates?
Pawan Munjal: In order to improve the overall sentiment, there has to be investments going into the economy which will actually spur growth. I am hoping that to come in April. We could start seeing the interest rates coming down. However, the government needs to create an atmosphere where the industry also starts putting in investments. The government has to do a lot on the infrastructure side as well.
Kohli: Infrastructure is going to be a key issue that the government will have to look into. Looking at Davos again, India has always made its presence felt and you have really been leading that industry delegation part of all those important meetings that take place. The ‘India Ingenious’ campaign was a big hit; we have seen banners all across the streets of Davos. Is India being able to sell its story as it did years ago? Are people buying it?
Pawan Munjal: This year, I don’t think so. One would have liked to see a lot more of Indian senior government functionaries here.
Kohli: That’s one of the key things, many Davos regulars are not here?
Pawan Munjal: The regular industry people are missing and also the government officials. I personally think that Davos has not given India the kind of attention, focus and importance that it should have given.
Kohli: Why is that so? The world is talking about India, China as the two economies to watch out for even we were expecting that at least 280 sessions scheduled here that focus on India and its growth rates.
Pawan Munjal: Last year, we created a huge hype here in Davos about it.
Kohli: Is it to do with our slowing growth?
Pawan Munjal: Maybe it is about what is happening in the country right now, may be it is keeping people away. But having said that, there are not too many countries where investment has to go in.
Kohli : So do you think the global perception of India has shifted in the past few years? Do you think a lot of that is holding back India’s perception?
Pawan Munjal: I would be fooling myself if i did not agree with you. All this has definitely taken a toll
Kohli: So perception management and brand building is what India needs to do on a global stage?
Pawan Munjal: Absolutely.
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