India should improve output to strike growth-inflation balance: Unilever COO

India needs its inflation to come down significantly in a bid to achieve growth. Harish Manwani, Chief Operating Officer of Unilever believes that if India improves its productivity, it will be able to achieve the growth inflation balance. .He also said that businesses should focus on attaining responsible growth than sustainable growth..Below is the complete interview..Prashant: What is the underlying message that you're taking home?.Harish Manwani: The theme of Davos this year is the great transformation and I think what everyone recognises is that you cannot have business as usual whether you are a government or you happen to be a business. You have to start re-thinking about the new business models. And I think to put it in a nut-shell the world needs growth. But we have to grow differently. I think that's pretty much really what the engagement is all about..Prashant: What is growing differently?.Harish Manwani: The diminution of growth that is becoming very relevant across the world is one of responsible growth. How do you grow your businesses and at the same time make sure you're growing responsibly? You are growing sustainably and it is something that Unilever has embraced through the Unilever sustainable living plan, saying the world needs growth, our business needs growth..So we want to double the business but at the same time, we want to reduce our environmental impact by half. You want to source all our agricultural raw materials sustainably by 2020 and we want to provide one billion people with a better livelihood and better nutrition and hygiene. It is this aspect of business that is coming to the forefront now rather than just growing without concern about whether it is responsible or sustainable growth..Prashant: Responsible growth has been talked about in the last couple of years as well but I think one issue which has come up is, how do you get to responsible growth, for that you need disruption. You are a consumer giant, so you have not got that much flag but financial services industry, a lot of other industries have gotten quite a bit of fire and so the message is, at least from some sections, you need some sort of disruptions. One way or the other to get to the responsible growth that we want to talk about, how do you think about it?.Harish Manwani: Well, I don't think it is about disruption. I think responsible growth is about organizational character, it’s not about disruption. It is not that businesses have always been irresponsible; actually businesses always have been responsible by and large. It’s by exception that you see what goes on. So take our business for example, I mean as long as I can remember and as long as the company has been founded actually, we always believe that you can do well and do good at the same time..There are many companies whose philosophy has been based on making sure that whatever they do is done in a manner that benefits the society and benefits the business. And therefore, I don't think this is an exception. What we have seen in recent past is an exaggerated distortion is not about needing disruption, a distortion of the system and I think now what the businesses are trying to do and what the companies. I am talking particularly about the financial sector and countries are trying to do is to get back to a place where we can do the in a sensible way..Prashant: What is your view as far as India is concerned? It was started as a great infrastructure story but for the last couple of years it’s all been about the consumer; consumption has driven whatever growth we have seen in India over the last few years. What next?.Harish Manwani: Indian economy has always been at a demand-driven economy, domestic demand driven economy. From that point of view, it has a great future. Because one of the issues of some of the countries is that they are too dependent on exports and so on and so forth. I don't think India can be completely independent of what's going on globally but the underpinning of the Indian economy is really domestic demand and the fact that we have hugely under-penetrating markets. I mean if you take rural India, which is another equivalent of a huge country, that's waiting for its turn to come in terms of getting on to the consumption bandwagons. So, huge opportunity is in store for India. But the question really is at what pace we are going to go at. I don't think the question is about whether we have the potential or not..Prashant: So what's the pace going to be?.Harish Manwani: I think the pace will be determined really by the ability of the government, the ability of the businesses to work together. We can have inclusive growth in India because one of the issues of India which indeed is the issue in large number of emerging markets is the inclusive growth again. Our ability to make sure that we are able to serve the mass end of the consumers as indeed we are able to serve the top end of the consumers, from a business point of view. But from a country point of view, we should be able to ensure that we are developing the right skills and capabilities, to really give hundreds and millions of people an opportunity to participate in our economy..Prashant: So, growth slowdown is happening. The second is inflation. It has been said that inflation is started to come off, etc. What is the impact businesswise for you?.Harish Manwani: Well, I think it’s always a dilemma. First of all, at a macroeconomic level, the dilemma is always between growth and inflation. In a developing country, you have to just make sure that you don't throttle growth because that's ultimately the engine that will keep you going. At the same time, you have to have a balanced approach to make sure that you got inflation under control..Prashant: You think growth has been throttled?.Harish Manwani: No. But that is why I think we had high inflation. What we are trying to do is to get to the middle path and in many ways, this is a question of what is it you want to manage with a lag and what is it you want to manage right up front. I do believe that India is right to focus on growth but you have to equally ensure that you manage inflation. Now, managing inflation you can do it two ways. You either you manage it through a tremendous cost-effectiveness from a business point of view and productivity from an economy point of view. The answer is not all the time that you have to have inflation; the answer is you can improve productivity. And if you do that I think you may be able to solve all the problems..Prashant: If this scenario has to continue, businesswise, what's the impact? What do you have to do to deal with this?.Harish Manwani: I am talking first on the macro level than the business level. At the macro level, you have to manage the supply side of the economy. We have no dearth, by the way, of food grain. The question is can we do this more and more productively as we move along. We have no dearth of manufacturing, the question is do we have the right kind of labour skill, the right kind of productivity, do we have the right kind of infrastructure. These are the things the government has to manage..From a business point of view, I think our motto is - business as usual on growth and business unusual on cost. You have to manage your business more dynamically; those days are gone when you say I have a 5-year plan. So how do you do it? You have to keep making sure that you are kind of flexible enough in terms of your business systems to be able to take decisions whichever way the markets are going.

India should improve output to strike growth-inflation balance: Unilever COO

He also said that businesses should focus on attaining responsible growth than sustainable growth.

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