Chairman of India's largest lender State Bank of India, Rajnish Kumar said he is bullish on the Indian economy, despite a downward revision of global growth forecast, adding that there has been improvement in the financial system.
Talking to BloombergQuint’s Menaka Doshi on the sidelines of the World Economic Forum 2020 in Davos, Kumar said, “India has a huge potential and there’s still a lot of interest in the Indian economy.”
“The slowdown is receiving attention at the highest levels, lot of consultation is going on and certain issues relating to the economy need to be sorted out. Once that happens, maybe there is a time lag. It is always there. But there is a huge potential in Indian economy. Outside investors or FDI..there's a still lot of interest in Indian economy,” Kumar said.
Kumar’s comments come at a time when India-born IMF Chief Economist Gita Gopinath said that the downward revision of global growth forecast was largely due to the economic slowdown in India.
“We’ve had a significant downward revision for India, over a 100 basis point for each of these years. It’s probably the most important factor for the overall global downgrade of 0.1 percent,” she said in a conversation with BloomergQuint in Davos.
IMF on Monday lowered growth estimate for India to 4.8 percent for 2019, citing stress in the non-bank financial sector and weak rural income growth as the major factors for the downward revision.
When asked where India stood in terms of resolution of bank Non Performing Assets (NPA), Kumar said, while 2018 has been the worst year regarding NPA in the banking system, there has been an improvement after that.
“If we look at the numbers, these two quarters, December and March... in terms of resolution they are going to be the best quarters. We already had one big case resolved, which is the Essar steel,” Kumar said.
Kumar also flagged concerns in the telecom sector, saying that the closure of any network operator will have far wider consequences than just for the sector.
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