Passing GST will push our economy into double-digit growth: Adi Godrej
Dated 7th March, 2016
Veteran industrialist Adi Godrej is a man whose views are much sought after. As chairman of the 119-year-old Godrej Group, the 73-year-old has seen India during the licence-raj days as well as its emergence after liberalisation in the 1990s. He speaks to Viveat Susan Pinto about what he would have liked the Budget to have done, how its rural and agri push benefits his group; and the acquisition strategy of group companies. Edited excerpts:
How does the just-announced Budget benefit your group?
Two companies in particular stand to gain from this rural and agri push, Godrej Consumer and Godrej Agrovet. The projects the government has taken up as part of this push are very sensible and I see tangible benefits accruing to rural consumers as a result. The momentum coming out of this should benefit companies operating in this space. This includes two of our group as well. Apart from this, some provisions announced in the real estate sector such as those for affordable housing, exemptions for rental income taxation, housing finance deductions and no dividend distribution tax on Real Estate Investment Trusts are good. It has a positive rub-off on businesses operating in the space, including ours (Godrej Properties) as well.
Is there anything the Budget missed? Is there something you would like to tell the finance minister and Prime Minister?
While it was not expected that the finance minister would make any announcements on the goods & services tax (GST) in the Budget, since it is in Parliament, I would like to tell the PM to find some way of passing GST. It will push our economy into double-digit growth, which is what our country needs at this point. Everything else will, then, fall into place, which includes getting private-sector investments going.
During your group's 118-year celebration last year, you had identified certain pillars that would drive group revenue. Are you satisfied with the way they are headed?
The consumer goods market has slowed, so businesses operating there such as fast-moving consumer goods and consumer durables have felt the heat. But, our properties business is doing well. Our total bookings have doubled this year over last year. Defence and aerospace show huge potential thanks to the government's Make in India push. While we have been making (our products) in India for decades now, the emphasis this government is giving to Make in India will boost local manufacturing further.
I am also of the view that agri-products have huge scope in the country. The pillars we've identified can take us forward.
While acquisitions are something that the Godrej Group has executed successfully in the past few years, will you go back to doing JVs like you did in the 1990s and first decade of the current millennium?
It depends on the circumstances and the opportunities at hand. There is nothing we say we won't do. But, JVs seem unlikely at this point.
(This article is published in Business Standard on 7 March, 2016)