Davos WEF 2022 | Sanjiv Bajaj Says World Looking Up To India Amid Sombre Mood

Over the next decade, there is no reason why India should not play a stronger role, Sanjiv Bajaj says.

<div class="paragraphs"><p>Sanjiv Bajaj (Photographer: Vijay Sartape/BQ Prime)</p></div>
Sanjiv Bajaj (Photographer: Vijay Sartape/BQ Prime)

As the global mood has turned sombre after two boom years amid reversing liquidity and war, the world is looking up to India to step up, according to Sanjiv Bajaj. But inflation, he said, needs to be tamed quickly.

"Davos is right now [happening] in the middle of war, middle of reversing the liquidity boom of the last two years, and rising interest rates. The mood is sombre," Bajaj Finserv Ltd., told BQ Prime’s Menaka Doshi on the sidelines of World Economic Forum in Davos on Wednesday.

"But by that same account, as I'm talking to people, they are all looking to India as the one country that can step up and in a number of sectors become the manufacturing hub for the world," he said. "Initially, it may be China plus one. But over the next decade, there is no reason why we should not play a stronger role."

He expects the government's focus through the performance-linked incentives, cutting of corporate tax to pay off. A number of sectors in India are seeing uptick in capex cycle, Bajaj said, adding not just commodities, but also real estate and construction, and logistics.

Food and fuel prices have hurt the common man, he said. The country, however, will have to tame inflation in India quickly enough get the domestic consumption engine "roaring again".

While controlling oil prices is beyond control, India should be talking to companies to balance out global needs, he said.

The Reserve Bank of India has started increasing rates and also withdrawing liquidity from the market to tame inflation.

“India is at 70-80 bps [below] from where we were at the start of the pandemic, hence a normalisation of [policy] rates should happen,” Bajaj said. “It will temper demand and hence inflation, but a large part of inflation is on the supply side.”

Other Key Highlights

  • Finance business has come out stronger with digital; loss ratios are better than pre-pandemic levels.

  • Downside of high inflation will be slower growth, but the quality of growth should be good.

  • Not worried about asset quality deterioration.

  • Focus on both consumer segments and SMEs.

  • RBI’s scale-based regulation separates the men from the boys among NBFCs.

  • Opportunity for NBFCs to get better and stronger.

  • For next three years, growth not a problem.

  • NBFCs have choice if they want to become a bank or are happy being an NBFC.

  • Upcoming mutual fund will be a lot more digital, but still working on strategy, distribution routes.

  • Will check with the RBI if Bajaj Finserv is permitted to have different credit cards.

  • Already have 2 million credit cards, we understand the customers.

  • Working on payment platform this year.

  • Idea is to increase level of engagement with customers across payments, loans, insurance and customising products.

  • Digital wallet is with Mobiqwik; got approval from the RBI for prepaid licence and so launched own wallet.

Watch the full conversation below: