India should still see growth at near 7%: Kamath

MUMBAI: Notwithstanding the last quarter numbers at 5.3 per cent, India should see a growth rate of near-7 per cent, a top banker said here.

"Looking at the mood-swings at the industry level...India should still see growth at near-7 per cent despite the last quarter numbers coming in at 5.3 per cent," ICICI Bank Managing Director and CEO K V Kamath said at the International Bar Association (IBA) Business Law Conference here.

"If I am right and the feedback that was given to me was rather right -- 79 out of 80 of council members of CII believe that this quarter is better than the last quarter -- then I dare say that if we are looking at a 7 per cent growth for the year-ending March, we should look at at least 7 per cent growth for the year going ahead, too," Kamath said.

On India, as an emerging economic giant, Kamath said that the Indian economy started growing four-five years back. "Our economy transited from 5-6-7 per cent and then 8-9 per cent last year," he said.

Six months ago, global events occured in a way to to challenge India, Kamath said.

In the Indian context, manufacturing has not been the engine of growth, but knowledge-business has, he said.

"It is growing at a double-digit pace and today, in the country, service sector which is predominantly led by the knowledge-business is growing at around 55-60 per cent, while manufacturing is around 20-25 per cent. The rest is agriculture," Kamath said.




Kotak Mahindra Bank Chairman Uday Kotak, who also spoke at the conference, said that as de-globalisation gains momentum, India was beginning to see reversal of capital flows and money was going back home to its own destinations.

"A simple number to my mind is, say, that if you look at the market at its peak, global portfolio flows in India were at about USD 300-billion in January 2008 and India's foreign exchange reserves were USD 300-billion."

Portfolio flows stock at market price today is USD 50- billion and India's reserves continue to be USD 250-billion.

"So, we have seen a significant de-globalisation or capital flows, we are seeing a significant reversal on trade, we are seeing protection coming back in almost every country, barriers in both tangible and intangible forms getting greater and last of all we are seeing de-globalisation in jobs," he said.