1 month ago
95
The Indian economy is likely to face temporary hiccups during the April to June period with India going to poll, said a leading industrialist.
“There tends to be some period of uncertainty resulting in a temporary slowdown,” Wheels India MD Srivats Ram told The Hindu. “I see a temporary disruption and a relative inaction for a couple of months,” he added.
Pointing out that 2024 is a year of mega elections with India, the U.S. and Indonesia going to polls, he said during the period of elections there is always a certain uncertainty.
According to him, Indian companies’ performance during Q1 would be affected but it would not change the overall tone of the Indian economy.
“The Indian economy is strong and there is no reason to be pessimistic about the future. India is also a beneficiary of the China de-risking strategy of global companies,” he added.
Asserting that the Indian economy’s growth trajectory would pick up soon after the elections are over, he said that it has a certain amount of momentum with industrial-related output and the services sector continuing to be positive.
While the services sector posted stellar growth, agriculture is in the negative despite government support and incentives. Mining sector is a mixed bag and the momentum will continue after polls.
Passenger vehicle sector has had a fairly strong growth and is in positive territory. Commercial vehicle is a cyclical market and will pick up after Q1. There are positives in the bus sector. Growth will continue in the wind mill sector as long as there is government support.
“Overall, India has seen good progress because of government-related policies and the pushing of the development agenda. It is more of a wait-and-watch scenario at the moment till the elections,” he said.
Regarding the outlook for FY25, Mr. Ram said the Indian economy should return to normalcy after elections, subject to a normal monsoon.
“I do expect the elected government to continue with infra investment in the long run. There has also been the announcement in the interim budget of support for R&D-led investment and that is encouraging. A solid foundation has been built that augurs well both for immediate growth as well as one in the long run,” he said.
On the U.S. economy, he said though there have been talks of headwind in the U.S. economy since the beginning of the financial year, there has been strong and robust growth there much against expectations. U.S. has been good and expect it to be strong, subject of course to the elections.
