Optimistic after India registered healthy growth rate figures of over 7 percent, Adi Godrej, chairman Godrej Group, on Wednesday told the BBC that he didn’t want the Indian government to withdraw stimulus announced in view of the last year’s global recession till a global recovery was clearly in sight.
Below are the excerpts from the interview:
Q: The world has been severely hit by recession since 2008, how has India been fairing in the downturn?
Adi Godrej: India has been coping really well. In fact we have been growing all along. We expect a growth rate of 7.5 percent in 2010, and the growth rate should be a little above 8% percent in the next year.
Q: Have the stimuli announced by the government helped? And is it the right time to withdraw them now?
Adi Godrej: Oh! Yes. The stimulus has helped undoubtedly.
I am of the strong opinion that the Indian government should not withdraw the additional stimulus at an early period. Not at least till such time that clear global recovery is in sight. Because the withdrawal of stimuli will not lead to any increase in tax collections, but there will a risk of the economy tanking again, so it makes no sense to remove it.
Also the government should not collect any additional taxes to combat fiscal deficit. Fiscal deficit is here to say for a while.
Q: India still has a lot of poverty and it would be in your advantage, as a consumer goods company, that their income rises; simply because they would be able to buy your products. What is being done to remove poverty?
Adi Godrej: Yes, our government is doing a lot to remove poverty. Our government is increasingly focusing on achieving inclusive growth. Steps have been taken to minimise the gap between the poor and the rich.
There are a lot of things being done in the rural area- there is the pay for work programme. Subsidies have been given in some areas, and food subsidy has been given to make basic requirements affordable.
Q: What about companies like yours? Do you also contribute in trying to eradicate poverty?
Adi Godrej: We are very involved in corporate social responsibility. We have a policy under which 25 percent of our share holding is in the name of the Godrej Trust, which means that 25% of the dividend of our group companies goes towards philanthropic causes. We are involved in three major areas of health, education and environment.
We are particularly involved in environment. The way things are going, we believe Green India would have to be the answer.
Thank You.
First Published: Wednesday, January 27, 2010, 14:30