Subhrakant Panda expresses faith in Indian economy even as the China trembles with COVID surge

Subhrakant Panda, who took over as industry body FICCI’s president recently, spoke to the media about his confidence in the Indian economy’s resilience. While China is dealing with a sharp upsurge in the number of COVID cases, and the world bracing for impact with the ongoing geo-political disruptions to supply chain, Panda said that the Indian economy and corporates have the depth and resilience to withstand any “short and sharp” disruption to the global supply chain. Though he did assert the need for appropriate caution and alertness.

“From India Inc’s perspective, the Indian economy and Indian corporates are resilient. We have a situation where cyclical sectors are concerned, corporate balance sheets are significantly deleveraged. There is not much you can do beyond this. Now if there are sectors that are China-specific, they will face disruption. One has to deal with it and I hope that this is a short, sharp disruption but again as I said I would not like to speculate and really look at it more from a human perspective than an industry perspective so that things don’t spiral out of control,”

Subhrakant Panda, President, FICCI

Panda is the Managing Director of Indian Metals & Ferro Alloys Ltd. and was head of the COVID Task Force at FICCI during the peak of the pandemic. Reminiscing of the initial strike of the pandemic, the subsequent early lockdown across the nation, and the careful re-opening of the economy, he said that the “the government is on top of things.”

“But even during the lockdowns, I think the central and state governments were very pragmatic in allowing certain sectors like continuous process industries, etc to run, which is why we had a good outcome,” he said.

His remarks come just a few days after the news of COVID surge in China, and the probable increase of cases across the world, spread like wildfire.

Also read: Tumultuous times for global supply chain as China’s COVID situation turns bad to worse

If this turns out into a new outbreak, movement restrictions would follow, derailing the pickup in the Chinese economy – a key pillar of global growth. As a manufacturer to the world, any disruption to exports may result in shortages that could drive up inflation internationally. On the other hand, if it turns out to be a worldwide surge, there also some chances of another mutation in the virus, which will eventually lead to other, bigger problems.

Panda is, however, hopeful that this won’t have a major impact on people in India as most of the adult population is double vaccinated, and many also have been administered the ‘booster shots’. He said “From the FICCI perspective, I hope we don’t have to revive the Covid task force.”

According to Panda, in light of the recession trend that is being witnessed across the West and rest of the world too, India needs to attract global supply chains, extend lower corporate tax rate of 15% for five years, and continue improving ease of doing business to spur manufacturing. He stressed on the need to expand the scope of production-linked incentives which are targeted towards India’s import dependent sectors. “You have to import fuel. But it should not be that electronics imports are at par or more than oil. This is the intended target (of the PLI schemes),” Panda said. He also applauded the Gati Shakti NMP which is working towards improving the ease of doing business in India.

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