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The country urgently needs to shift focus from finance to commerce: Uday Kotak, Kotak Mahindra Bank
Uday Kotak, vice-chairman and managing director of Kotak Mahindra Bank, believes that solutions to India's problems are not in running after more US dollars, but fixing the broken Indian manufacturing. In an interview with ET, Kotak says that the society that has lost its bearings has to get it back - the middle class values that made the India story an attractive one globally. It will be a long and hard way to recovery. Edited excerpts: Is the India story fading? As we were all growing up there used to be a very big mantra in India which was called 'export or perish.' There was a long period when we used to focus on import substitution. In the past eight years, these two phrases 'export or perish' and 'import substitution' are no longer a part of the Indian economic vocabulary. I was looking at all the equipment and facilities, furniture for our new office. I was shocked that so much of it is imported. Tables and chairs are coming from Malaysia and China. You ask yourself what is happening to our manufacturing. If we are going to start importing, then we have a big challenge on our hands. Is the adverse trade balance the problem? You have to look at the March 2013 numbers and the number that strikes me the most - $500 billion imports and $300 billion exports. We have a $90-odd billion gap in terms of current account. It is a problem of commerce which is becoming a problem of finance. We have to get competitive. Can we afford to import Chinese Ganeshas? Are import curbs a solution? Today it has become a problem of finance. How are we trying to solve this - by getting more money to fix this. What about reducing the trade gap? If one is a heart patient, he needs a long walk. It's a long walk we must do. Is the young population an obstacle, or a boon? We have a billion mobile demand and 800 million users. Many are using more than one handset. Why are we not
Uday Kotak, vice-chairman and managing director of Kotak Mahindra Bank, believes that solutions to India's problems are not in running after more US dollars, but fixing the broken Indian manufacturing. In an interview with ET, Kotak says that the society that has lost its bearings has to get it back - the middle class values that made the India story an attractive one globally. It will be a long and hard way to recovery. Edited excerpts: Is the India story fading? As we were all growing up there used to be a very big mantra in India which was called 'export or perish.' There was a long period when we used to focus on import substitution. In the past eight years, these two phrases 'export or perish' and 'import substitution' are no longer a part of the Indian economic vocabulary. I was looking at all the equipment and facilities, furniture for our new office. I was shocked that so much of it is imported. Tables and chairs are coming from Malaysia and China. You ask yourself what is happening to our manufacturing. If we are going to start importing, then we have a big challenge on our hands. Is the adverse trade balance the problem? You have to look at the March 2013 numbers and the number that strikes me the most - $500 billion imports and $300 billion exports. We have a $90-odd billion gap in terms of current account. It is a problem of commerce which is becoming a problem of finance. We have to get competitive. Can we afford to import Chinese Ganeshas? Are import curbs a solution? Today it has become a problem of finance. How are we trying to solve this - by getting more money to fix this. What about reducing the trade gap? If one is a heart patient, he needs a long walk. It's a long walk we must do. Is the young population an obstacle, or a boon? We have a billion mobile demand and 800 million users. Many are using more than one handset. Why are we not