The country is optimistic that the new government taking charge following the election would be a “decision-making government” that would bring in clarity of policy and enable the country to regain its growth, said Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank. She said this would help the banking sector come out of some of its current difficulties.
Delivering the keynote address at the inauguration of the new campus of Institute for Financial Management and Research (IFMR) at Sri City integrated business city at Tada, Andhra Pradesh, she said that currently everybody is looking forward to the election results and are all hoping for not one party or the other, but a much clearer, decision-making government so that clarity of policy emerges and things move forward.
“I am quite hopeful and optimistic that once we get a new government in place, we will get back into action, in a more decision-oriented environment that can take the country forward.”
When decision making comes back, a lot of projects start generating cash flows and this will help banking sector to come out of some of the difficulties it is facing today. In general, the banking sector in India is very strong, she added.
As the economy grows, the banking sector will grow 2.5 times the country’s GDP growth rate, Kochhar said. If the country’s GDP grows nine per cent, the banking sector will grow 20 per cent and the growth will be both on the consumption side and investment side of the business.
The banking sector has been adjusting to the changes in the economic environment during the last couple of years and the growth rate was halved.
Kochhar said while India is a land of opportunity, for every good and fundamental strength that India has, there is an accompanying challenge. For instance the country has the potential of demographic dividend, while the corresponding dichotomy is that the challenge of making all of them employable and creating enough employment opportunities for them.
She said there is a substantial potential to invest in infrastructure and the manufacturing sector in the country, but today the new investments are not taking place since there is a need for more clarity on approval and policies. Time-bound approvals are needed and still a clarity comes in, the investment cycle would not return.
“We have a great potential for investment, but we have to work hard to create a conducive environment for that,” she said. She added that the world today is a VUCA world (volatile, uncertain, complex and ambiguous) and will continue to be so, and all have to navigate their businesses and lives in this complex environment.
Addressing the students, faculty and the board members of IFMR, she said that the education institutions should keep the diversity of the country and the consumers and their culture in mind while preparing the curriculum and teaching management students.