Deloitte India CEO N Venkatram on the state of India's economy

India might well be on the road to economic recovery according to Deloitte’s India CEO N Venkatram, who points at the recent uptick in demand and the government’s latest land and labour reforms. 

India’s economy has not fared well under Covid-19 – caused in part by the 7.5 million plus confirmed cases in the country that position it in second across the world behind only the US when it comes to the most affected markets. In June, reports emerged that the economy had contracted by 24%, sparking widespread panic.

According to the Deloitte boss, the worst is behind us, evidenced by murmurs of activity in key sectors of the economy. “Whether I look at retail, automotive or fashion, all these things are going to come back to normal. I do not believe that we need to worry about demand anymore,” he said to Economic Times.

It has been a few months since the economy reopened, and the government coupled its Covid-19 stimulus package at the time with a set of reforms that would generate long-term economic value. For Venkatram, these reforms have only served to strengthen the base for an economic recovery in India. Focused on land and labour regulations, the idea of the reform was to encourage business activity in India, and to consequently draw an injection of momentum via foreign direct investment (FDI).

Several economic experts have suggested that the Covid-19 crisis – for all its devastating consequences – has brought an economic opportunity for India to position itself as a manufacturing bright spot. At a time when the global business environment is looking to redirect supply chains away from a high-risk China market, India has the opportunity to fill this gap as an alternative manufacturing hub.

Key to achieving this goal is that India appears an attractive market to foreign investors. Historically burdened with bureaucratic excess and inefficiencies, the business environment could receive a much needed leg up via the land and labour reforms. This is Venkatram’s belief.

“When you look at the ease of doing business index, we were below 100 in the area of labour and this reform should pull us up substantially. I believe the multinationals will look at this very favourably in terms of making investments,” he said. For him, these reforms will combine with resurgent demand to take India’s economy over the hill.