With growth of 7.5-8% for the current year, India would still be the fastest growing economy, he said, also proposing a production-linked scheme (PLI) for furniture and capital goods.

On electric two-wheeler fire accidents, he said the government asking companies to recall their vehicles is the “right” measure before adding that electrification is inevitable.

Narendran is CEO and Managing Director of Tata Steel.

Growth and capital investment

CII had previously forecast growth of 8.5-9.5% for the current fiscal year. He now expects weaker growth.

“7.5-8% (of growth) makes us the fastest growing major economy… We believe private sector investment will return this year,” adding that many indicators such as the perception of the GST, air passenger and mobility indicators are positive.

Narendran said chemicals and metals have seen the maximum expansion of private sector capacity after the pandemic and that production-linked incentive programs (PLIs) can be considered for furniture and capital goods. .

“I think the government expects private sector investment to flow in once the government has spent on infrastructure and I think that is what is happening,” he said.

Responding to a question on whether the rise will delay the CAPEX recovery, he said the biggest CAPEX announcements from the private sector were in the metals sector and that would continue as high commodity prices mean even more. incentives to invest in the growth of the metals sector.

Inflation problem

He suggested a more nuanced approach to inflation.

“Headline inflation, from a macroeconomic perspective, is obviously not good because it hurts households,” Narendran said, adding that it hurts the poorest of the poor the most.

However, higher food inflation also increases rural incomes.

“Food price inflation, to some extent, also helps rural households as incomes accrue to them and even today when wheat prices are rising and wheat exports are increasing for India, that helps the rural economy. So it’s a bit of a mixed bag,” he said.

In the case of steel and cement, he said the high prices are due to the fact that all sectors are linked to world events and value chains.

Prices for coking coal, a key component of steel, have fluctuated, putting pressure on steel companies to try to pass on some of these cost impacts to customers.

These higher prices, however, allowed the steel industry to become profitable, to pay off its debt and to announce more investments.

“If you want private sector investment, you have to allow them to have healthy balance sheets and be profitable so they can reinvest in growth. And that is exactly what is happening in India,” Narendran said.