6.1% growth estimate for FY20 more realistic: Nilesh Shah, Kotak AMC

The GDP growth trajectory put forward by RBI from 5.3% in Q2 to 7% plus in Q4 of the current financial year will not happen unless and until efforts are taken by everyone and rate cuts are transmitted, says Nilesh Shah, MD, Kotak AMC, talking with ETNOW on the RBI credit policy. Excerpts:

RBI has gone ahead and revised the GDP forecast downwards in the monetary policy. Do you believe that the estimate that they have put out which is 6.1% for the whole year; 5.3% for Q2, 6.6% for Q3 and 7.2% for Q4 is more realistic?
Undoubtedly the revision downward is far more realistic than before the revision, however, the journey from 5.3% to 7% plus in the last quarter of current financial year will not happen unless and until efforts are taken by everyone.

Liquidity has turned positive but it has turned positive from July. We need to ensure that transmission happens. There is a lot of blocking of capital which is hurting transmission unless until transmission happens, the liquidity creation will not result into GDP growth.


God has been kind with monsoon and oil prices and to that extent, we have to ensure that transmission of credit happens at the borrower level be it corporate or retail and that will create the journey from 5.3% second quarter GDP growth to 7% plus in fourth quarter.