Economy facing unprecedented inflation, says ITC boss Sanjiv Puri; lists 3 focus points to maintain growth

The Indian economy is facing unprecedented inflation just as the country is headed out of the covid-19 pandemic, said Sanjiv Puri, Chairman and Managing Director of ITC Ltd. Talking at The Financial Express Boardroom 2022, Sanjiv Puri said that inflation is a key concern, and the ongoing geopolitical conflict between Russia and Ukraine has only accentuated the concern. “As the pandemic was ebbing we are faced with a situation of unprecedented inflation. Both food and energy inflation are key and the recent conflict in Ukraine has only accentuated the situation,” the ITC Chairman said.

Sanjiv Puri’s comments come on the day when India recorded WPI inflation at over 13% and CPI inflation at 6.07%. Puri also touched upon three focus points that he believes India needs to work on to stay on the growth trajectory despite rising inflation.

Persistent inflation poses serious challenge

Even before the Russia and Ukraine war, inflation appeared to be persistent and not transitory, he said. “This certainly is a key concern given that India is a consumption driven economy and high inflation will potentially impact growth and resources.” India’s CPI inflation has now breached RBI tolerance band for inflation for the second consecutive month.

While inflation could prove to be a serious challenge for India’s economic growth, the veteran industrialist highlighted three focus points that he believes India needs to work on to stay on the growth track. These include employment generation, dealing with quality of income, and addressing challenges and opportunities of the climate crisis.

Triple decker strategy to make India’s growth resilient

Elaborating his point, Sanjiv Puri said that for employment generation the fundamental is getting capital investment in the economy. “Private investment is weak because capacity utilisation is lower at the moment. Investments that would have happened pre-covid will hopefully get filled up as consumption picks up,” he added while commending the Union Budget strategy of ramping up public expenditure. Puri further said that macros for investment have never been better with low interest rates and good corporate balance sheets and low taxes. 

Sanjiv Puri also touched upon increasing farmer’s income in India and said that agriculture is an enormous opportunity for India. “Just 7% of our produce is exported and our share in global trade is just 3%, and given the tailwinds of the post-pandemic world, it is possible to double our agriculture exports.”

Food processing an opportunity

Sanjiv Puri further highlighted how the food processing industry has massive opportunities ahead. With the growing population and changing diet patterns amid depleting natural resources, Puri noted that there is a tremendous opportunity in space.

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