The chairman of Hindustan Unilever Limited (HUL), Mr. Sanjiv Mehta spoke about some crucial topics related to the economy and the measures which need to be implemented in order to save the economic downtrend. According to him, the government needs to do get “aggressive with spending” before the economic situation goes completely out of hands and it is too late. He said that the interest rates currently charged shall be slashed as the signs of urban distress have emerged ever since the pandemic began.
In an interaction with Sangita Reddy, the Ficci president he said, “There is a curve of cost of doing and the cost of not doing. When the cost of not doing exceeds the cost of doing, then it would be a very unfortunate situation for the country. We should not let that happen – we should definitely take the risk of being aggressive with spending. Because, if we don’t do it now, then it might become a bit too late.”
If the government puts in too much cash in the economy, there is a possibility if higher inflation. But for that, Mehta said, “Growth and controlling inflation have to move in tandem.” He added, “There is a risk of inflation, but the bigger risk is the economy going into a tailspin. So, there should be an aggressiveness with which we reduce the interest rates, clearly with the risk that there could be more inflation coming.”
The upcoming festive season is something the investors, retailers are looking forward to so that it can boost the consumer confidence consequently. The government has been focusing on the rural development. On that point, Mehta said, “The government should look at what we need to do for the urban consumers,” Mehta said. “There is very clear anecdotal evidence of growth rates in the staples in urban India slowing down, which could be a very clear pointer that the urban poor are feeling the stress.”
The government had announced collateral free loans for MSME’s which was a good step, but according to Mehta the load of these loans will be felt when the repayment phase will arrive. So to explain the order of important factors and sectors he said, “The first focus should be poor people, then the MSMEs and then stressed sectors.”
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