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Adi Godrej bullish on economy

Source: PTI
December 18, 2008 16:34 IST
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Stressing the need for the government to take more steps for boosting growth, noted industrialist and Godrej Group chief Adi Godrej on Thursday said the Indian economy needs a lot more liquidity to sustain its growth momentum.

"We need a lot of liquidity. We need to reduce interest rates. We need a lot of fiscal stimuli. Both monetary and fiscal stimuli are badly needed," the Godrej Group chairman and managing director said on the sidelines of a CII conference on corporate governance here after delivering the key address.

Currently, India is in a position where strong fiscal and monetary stimuli can help the country to grow faster and quicker, he said. "I hope the government acts well."

Describing the Rs 35,000-crore (Rs 350 billion) stimulus package announced by the Centre on December 7 as a "good package", Godrej said he was bullish on the economy and that things would look up soon.

"I am very bullish on the economy reviving quite soon. It depends on monetary and fiscal actions of the government. I think India's basic situation is quite good," he said.

The global economic meltdown has affected Indian retailers, making some of them default on payments, Godrej said.

"The default levels are higher now," he said.

Asked whether his Group would revise downward prices of its FMCG goods in wake of the government announcing a 4 per cent cut in excise duty, Godrej said, "Most FMCG products are done in excise-free zones. So there is no effect on them. All products in our group where excise duty is paid, it (the benefits) would be passed on (to the customers)."

With commodity and oil prices coming down, Godrej said he expected margins on a few of his Group's businesses to be healthy.

"There had been a lot of stress on meeting margins in some of our business. We expect margins on some of the business to restore. It will be good."

On his Group firm Godrej Properties' proposed IPO, Godrej said, "We have submitted the DRHP (draft red herring prospectus) and are waiting for SEBI to come back to us on it. We will decide (on its timing) based on market conditions. Currently, IPOs are difficult. There are hardly any IPOs. We will have to study the situation."

Asked whether Godrej is looking at acquiring companies domestically or overseas, he said, "We are looking at synergistic acquisitions. Godrej has a lot of cash value on its books."

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