Slowdown in economy structural; sectors like realty need a boost

The majority of the audience present in the Edelweiss Credit Conclave 2020 said that Nifty will be down 10 per cent from the current level in the near term and not the other way around. More than 60 per cent of the audience said India’s gross domestic product (GDP) would grow between 5-6 per cent this year.

Most of the panellists, bankers, brokers and other market participants present in the conclave agreed that the slowdown is real and it’s structural.

Samiran Chakraborty, chief economist at Citibank India said global economy is stabilising from the decline whereas geopolitical issues are very complicated and difficult to predict. Private investment is not happening which gives space for public investment to grow while option of rate cuts is very limited, may happen only in the second half of the year, he added. He further said that the consuming class as a percentage of the population has remained constant over the decade, which could be one of the reasons for the slowdown.


According to Navneet Munot, CIO, SBI Mutual Fund, real estate is a sector needs a huge boost, there's a big multiplier effect there. “The response to the NBFC crisis could have been better and quicker”.

On a lighter note, Ananth Narayan, faculty at SPJIMR said for every economist there's an equal and opposite economist, and both of them are wrong.

Nilesh Shah of Kotak Mahindra Mutual Fund is in favour of removal of long term capital gain tax and dividend distribution tax. Navneet Munot said the rally in stock market would be broad based this year as since 2018, only benchmarks rose while overall market capitalisation declined.

Corporate rate tax cut is an ill-thought decision to make stock market happy which will not spur the private investment in the country, according to Anil Singhvi, chairman, Ican Investments Advisors. “If there is no demand, why would corporate invest; need to put money in the pockets of the people, not corporates”.

“It's not a race, have patience for $ 5 trillion economy, have infrastructure in place. At today's rate of 5 per cent, we will reach $ 5 trillion only in 2030,” he added.

Kishore Biyani, chairman of Future Group said India can't afford to be slowing down. “Revive the real estate sector first, efficiency can come later. It's important to have value addition in the economy”.

According to Biyani, spending on weddings which is almost Rs 15 lakh crore every year has come down this year which is evident from the declining gold demand, personal care and beauty products.

Fintech companies have created new segments with the data they have while public sector banks can collaborate to create new synergies, according to PS Jayakumar, former MD & CEO, Bank of Baroda. Rashesh Shah of Edelweiss said slowdown is good for building a better future.