Hand-hold the industry till animal spirits are out, says Sanjiv Bajaj

Budget’s public capex focus must continue till private sector is able to play its own part in investing, Sanjiv Bajaj, president of Confederation of Indian Industry (CII) president and managing director of Bajaj Finserv, told Nivedita Mookerji in an interview. Edited excerpts:

How high are your expectations from the Budget?

This government has been high on reforms in the past few years, especially through the pandemic. It played an important role in the form of capex support through infrastructure investment when the private sector could not grow in the same manner and add to capital investment. India is showing a reasonable amount of resilience, but we are still living in a world that is quite fragile. That’s why we hope that the government will continue to invest significantly in public capex so that we are able to ride through this cycle at least till the private sector is able to play its own part in investing and adding to the capex cycle.

But with the 2024 election just one year away, won’t this Budget be populist?

In this government, the earlier Budget in the pre-election year was focused on building the economy. That’s what we hope will happen this time as well.

So don’t you think there will be major spends in social sectors like health and education?

I see such spends as beyond a mere populist Budget. We are a country with a very large population, which needs to have access to education and health. So when we support our citizens with quality health and education, we are actually helping in growing the economy. Such initiatives should also generate jobs and, therefore, they cannot be seen as mere populist measures.

CII has made some interesting Budget recommendations to Finance Minister Nirmala Sitharaman…. Those include employment creation and reduction in taxes…

We have some clear asks. We have seen a period of fiscal expansion during the pandemic… We should get back to better fiscal management… We also need an aggressive focus on continued privatisation and faster divestment to augment revenue. We should go for higher asset monetisation through the National Monetisation Plan. We should broaden the tax base to generate revenue. So, the first part of our demand is around fiscal management and the second around investment-led growth strategy.

Like last year, the government should increase public capex by 25 per cent, taking it to Rs 10 lakh crore (Rs 10 trillion), and also focus on rural demand. The third area that’s key is generating jobs. Some of the measures are long-term to provide a glide path… This is India’s decade.

Many in the government have said the industry must show animal spirits. Do you see the Budget doing anything that will make industry invest more?

I would say the government has done a lot already by bringing the tax rates down. It has made it attractive to invest in India. We are competitive globally. PLI (productivity-linked incentive) schemes have helped too. There’s no single bullet, but the private sector does look at minimum return… The government should continue with capex and hand-hold the industry till the animal spirits are out.

At this point, do you agree that industry is cautious?

It depends sector by sector. If you look at real estate, construction, housing, financial services — these are growing significantly. As long as the external environment stays stable, you will see private investment coming in the coming quarters.

You have spoken about 10 per cent growth and New India. Is there any timeline?

We must reach 10 per cent… That’s the opportunity the world is providing to India. There’s a new confident India that’s ready to take on the world on equal terms.

If you have to bet on any one thing that the Budget should do, what will that be?

There’s no one-silver bullet and the Budget is not a single-line item. However, we are looking for the Budget to set the right stage for growth.