Vikram Kirloskar: India will be doing better than many other countries

A ray of optimism

Monday, 4th May 2020

The pandemic has taken a toll on global economy. One of the major issues is stagnant consumption as a result of the lockdown. Small businesses are the worst hit, said Vikram S Kirloskar, CII’s president. He added that the small businesses have no other source of income.

“...They have employees, migrant labour to take care of. I think that's the real concern. Larger companies like mine, we have a way to look after our suppliers, our dealers and our employees. Whether it's help, distribution of food... There are things larger companies are doing in their area and around the country... But I think small businesses and small companies are going to have a tough time”, stated Mr. Kirloskar, MD and chairman of Kirloskar Systems Ltd as well as Toyota Kirloskar Motor’s Vice chairman.

With 9.35 lakh crore of bad loans on Indian banks, it has become difficult to cope up with a 3-month EMI moratorium on loans, as announced by RBI. The loans  9.35 lakh crore almost equals to 9.1% of their total assets.  

Though cash transfer schemes have been declared by the centre and a few states the country has not overcome the economic crisis caused by the pandemic.

Mr. Kirloskar reported, “The only way to get business running is through cash flow, which means customer come and buy. So just giving them a loan or repayment facility on their existing borrowings is terrific, but the demand is what is required, spending is what is required. We have to encourage spending after the lockdown is open so that a lot of these small and big businesses start recovering and cash flow starts moving”, to NDTV.

Tourism, hospitality and airline are the worst hit sectors which need financial aid from the government, said Mr. Kirloskar. “They have a lot of assets which are not being used for some time now, which are costing money as time goes by. I don't think travel is going to be encouraged even after the lockdown is over, it's going to take a few months”, he added.

But he asserted, “We cannot be pessimistic, we have to be optimistic in the sense the India story is still good, we still have a large domestic market which a lot of countries don't have. We do have skill and the economic condition of our country is not that bad compared to a lot of countries”.  

Source: NDTV