Adi Godrej, architect of the fabulous success of the Godrej group, won't admit that the Indian economy is suffering from a meltdown. "The economy has been hit by a slowdown, but I don't think we should overreact and term it a meltdown. The Indian economy is too strong to melt," he said.
On the sidelines of EmTech India 2009 in New Delhi, Assistant Managing Editor Indrani Roy Mitra caught up with Godrej and the conversation naturally centred around global crisis, its effect on the information technology sector, lay offs and what entrepreneurs should do to survive this global phenomenon.
How has US meltdown affected India?
I don't think there has been any meltdown as far as the Indian economy is concerned. There has been a definite slowdown and businesses have become sluggish but it has not really touched the bottom.
We have only felt the ripple effects of the US crisis and I am sure we would be able to brush ourselves off soon.
But recent data shows that even Indian companies are trimming workforce. How would you explain that?
I don't deny the fact that lay offs are taking place. In a slowdown, that's but natural. Having said that, I don't feel that there is any cause for alarm. Things, I am quite sure, will be better soon. Companies will start hiring instead of laying off.
So, are you saying that Indian economy has an optimistic future?
Yes. I also feel it has an optimistic present. Even while the entire world is grappling with a downturn, we are maintaining a solid growth rate of 6 to 7 per cent. That's simply commendable.
What do you think India should do to become a stronger player in the global arena?
The onus now rests on our entrepreneurs and policy makers to take stock of the situation and use it to their maximum advantage.
The ideal way of working would be -- not get panicky thinking about a meltdown all the time and not get overconfident through a conjecture that US meltdown won't affect us.
All that India needs at the moment is a cautious and balanced approach.
The Indian government has already announced three stimulus packages. Your comments please...
The government is doing what should be done. I have great faith in the resilience of the Indian economy and I sincerely believe that it has all the potential to tide over the present crisis.
An economy which can maintain such a stable growth rate even at this juncture should be taken seriously.
EmTech conclave speaks about innovation in the IT sector to survive the global crisis? Don't you think with billions losing their money in the stock markets across the globe, idea of innovation seems rather absurd?
Not really. Innovation is possible but only at a low scale at the moment. One does need to wait and watch and take the right step at the right moment.
Is there a lesson for us in the US economic crisis?
Yes of course. It teaches us to be prudent, cautious and tactical. It tells us that extravagance and slackness are detrimental to growth and are certain ways to disaster.
How has the slowdown affected Godrej group of companies?
Some of our companies have not really been hit that much, while for others, we have started doing a quick rethink.
For instance, Godrej Properties have started concentrating on low budget housing schemes to address the falling real estate prices. The company has realigned its strategies to build affordable houses for the low income groups.
This is a carefully weighed strategy that the company banks heavily on.
Any advice for the entrepreneurs?
I would like them to maintain a three pronged approach -- go slow but be steady; don't be rash with any policy decision and set aside lay-off as the last option; keep innovating though at a small scale.
When do you actually foresee India getting over this crisis?
I do believe things will start looking up from the second half of the next fiscal. You would not be interviewing me on slowdown then (smiles).
Photograph: Satish Bodas