India does not have a 10% GDP growth rate model right now: Rakesh Jhunjhunwala

India does not have a 10% GDP growth rate model right now: Rakesh Jhunjhunwala
India does not have a 10% GDP growth rate model right now: Rakesh Jhunjhunwala

Rakesh Jhunjhunwala, the big bull of D-street in an exclusive interview with CNBC-V18 expressed his concerns about the state of the market, and slowdown seen in the economy.

Jhunjhunwala pointed out the NBFC crisis, elections, as well as fiscal situations, have led to a short-term slowdown in the economy.

He said:

“Every bank is shy to lend corporates. This reluctance can be overcome by capitalizing banks & flushing the system with liquidity.”

However, he is positive that the economy and the market will rebound, but he is not sure when.

He also added:

“India is not in the ICU but we need a sense of urgency w.r.t dealing with NBFCs, and price being paid for correctness in business models is not too high.”

He stated that:

“Constant restructuring of PSU entities has also led to pain in the economy. I don’t feel that India has a 10 percent GDP growth rate model as of now. And, it would be difficult to see double-digit growth in the next 2 to 3 years.”

He is not bearish on the market at current levels and sees 10,750-11,000 levels on the Nifty to act as a bottom for markets.

In order to grow the Indian economy beyond the 6-7 percent mark, it will require stimulus from the government. Not just that but the government also have to stop the subsidy to public sector enterprises.

Jhunjhunwala said:

“Government needs to act fast on the economy. The economy needs government stimulus to grow beyond 6.5 percent. The government should stop subsiding Air India, BSNL and MTNL.”

He also added:

“Markets being in the state that they are, I cannot be happy about it, but we have to accept the reality as it is. So it is okay, it’s a part of life. Life is not linear; there are good times, there are bad times. So they do come and they go.”

He further stated that the government may not want to things in a rush, but he is confident that this government will surely do something in order to push the economy to a $5 trillion mark.

According to Jhunjhunwala, in order to realize the $5 trillion economy dream, the government needs to stabilize its policies.

He added:

“Trade war will impact India positively. There is no problem with respect to inflation, currency or export market. Predictability of policies is required to attract foreign investment.”

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