Budget 2025: GDP Growth Target Too Conservative, Bolder Push Needed, Says Edelweiss Group CEO
Government capex will be in focus and middle class consumption will be a driver of the economy, said Rashesh Shah, chairman and CEO of the Edelweiss Group.
Highlighting that the announced GDP growth target of 6.3-6.8% is too low, Rashesh Shah, chairman and CEO of the Edelweiss Group, said that India needs to grow at 8% a year in order to achieve its developmental goals.
In an exclusive interview with NDTV Profit, Shah said that if there would have been a bold announcement that we want to be growing at 8%, even if it was said that this is to be achieved from FY27 onwards, it would have been a lot more helpful in boosting the economy.
Unless such growth expectations are not set out, our capital expenditure will stay muted, Shah said, adding that he would have been pleased with more aggressive moves on consumption and government capex.
Government capex will be in focus and middle class consumption will be a driver of the economy. Private capex will only come in when demand picks up. “We are still far away from private capex driving the economy. Exports will also not be a big driver because of the global disruptions,” Shah said.
In the budget announcement on Saturday, Finance Minister Nirmala Sitharaman said that the government will raise the FDI limit in the insurance sector to 100%. The enhanced FDI limit for insurance companies will be applicable to those that invest the entire premium in India.
Shah said that this is a bold announcement on the government’s part, noting that it was on the anvil for a long time but was held back due to a lot of political pushes and pressures.
“The announcement shows the government wants the insurance industry to grow. This is actually required as insurance plays a big role in long term capital formation”
It will help a lot, as there are a lot of large global insurance companies that are wanting to come into India, and they could not because either they could not find a good partner or they wanted 100% control. “It will spur investment in the industry. International insurance companies will see this as a big move. It will spur more capital into the industry,” Shah said.
