Investment in infrastructure is “basically and primarily” necessary to achieve double-digit growth, according to KV Kamath.
“India has a lot of growth opportunities infrastructure front such as roads, highways and power sector like green energy initiatives,” Kamath, president of New Development Bank, told BloombergQuint on the sidelines of World Economic Forum, Davos in Switzerland. “It (growth) will not only drive economic momentum but also create jobs.”
What is required is to instill confidence not only in banking sector but capital markets in domestic arena, and also global investors in this (infrastructure) business. I don't think without an interplay of all these three we'll get what we want in infrastructure front.KV Kamath, President, New Development Bank
Kamath said private investment is necessary to maintain growth momentum in India as the government's ability to undertake infrastructure activity was limited. He cited the National Highway Authority of India's model in successfully operating roads and reinvesting revenue generated in new projects as a confidence-booster for the private sector to follow suit.
On Interest Rates
“I think we need to get interest rates to a level where economic activity becomes really burgeoning,” said the former chairman of ICICI Bank. Kamath said lending rates in China were nearly half when compared with India, adding a re-alignment of the country's interest rate was required to achieve the aspirational 10 percent growth.
What I'm worried about is, if NPAs double in six years. In India, you carry that burden for life. NPAs can be nurtured and put back to use. In twelve years, you not only have an interest rate cycle but also an economic cycle which works for common good.KV Kamath, President, New Development Bank
Watch the full interview here:
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