The American Chamber of Commerce in India in association with Bank of America Merill Lynch organized a Roundtable on India’s Economic Outlook – What Lies Ahead! on Thursday, 19th November 2015.

The session began with Ms. Surabhi Wahal, Regional Director- Western Region, AmCham India, welcoming the participants and the session’s speaker, Mr. Indranil Sengupta. It was followed by Mr. Asit Bhatia, Managing Director, Global Corporate & Investment Banking, Bank of America, who ushered in the topic through his opening remarks.

Mr. Indranil Sengupta, India Economist; Director- DSP Merrill Lynch Ltd., shared his expert views on the country’s economic outlook beginning with India’s growth story as the 2nd largest emerging market after China in the 2015 economy and the probability of India’s overtaking France in becoming the 5th largest economy by 2019. Through his presentation, Mr. Sengupta stated the improvement in macro- economic numbers in the last 2 years due to the move in trend from an easy monetary policy to an expectation of a tightened monetary policy. Global and domestic factors include investments, tightening of the RBI, the effect of the harvest seasons, the rural demand, low MSP hikes and the steady fall in rural wage growth greatly impacts GDP. The expectation that the 7th Pay Commission will stimulate consumption demand by 0.3-0.5% of GDP due to factors such as lower oil process, the doubling of car and housing loan limits and the government’s implementation of the OROP scheme for the armed service were also discussed. Among the numerous points put forth through the presentation, Mr. Sengupta also shared his views on the liquidity crunch and stated that a lot would depend on how the RBI addresses it. Mr. Sengupta shared his views on the relative value for when Fed hikes, that the U.S. recovery is positive for India due to the multiplier effect that it has on Indian exports, that the RBI can cut even as Fed hikes and that the INR over-evaluation fears are overdone. The focus of the government – reforms to follows BJP manifesto, focus on irrigation, re-urbanization (a la the Gujarat model) and the Swaminathan formula that supports rural demand were discussed. Mr. Sengupta also stressed on the 5 point strategy for revival of the CapEx cycle – road projects, power, housing, easier infra-financing norms and FDI. The interactive and energetic Q&A that followed answered questions on economic reforms, the impact of the governance and IPR.

The event concluded with Mr. Mahesh Krishnamurti, Managing Director, Resources Global Professionals Pvt. Ltd. giving the vote of thanks to the participants with special gratitude to Bank of America Merill Lynch and to Mr. Indranil Sengupta for sharing his expertise and for building such an engaging and passionate environment around the table. He commended Mr. Sengupta for his assertive and pragmatic views that brought out so factually the short term and long term challenges for the Indian economy and for bringing to light very tangible actionable that can be achieved with the support of AmCham.