India Can Achieve Growth Without Foreign Capital by Prudent Savings Allocation: Experts

India has sufficient domestic resources to finance its growth without the need for foreign capital, but it needs to use funds more wisely rather than investing them in wasteful items like gold, according to a market expert.

In order to generate wealth that will propel India's growth, Nilesh Shah, managing director of Kotak Mahindra AMC, argued for increased public-private partnerships for state-owned businesses.

"Do we have money to fund our growth? The answer is yes. The day we can allocate our savings more properly we can obviate foreign capital, though we would require foreign technology, "Shah said at the MCCI Capital Market Conclave as reported by PTI

He used the 373 billion USD in net gold imports during the previous 21 years to illustrate the wasteful use of domestic money.

Shah also backed "public-private partnerships for state-owned firms to unlock value" and used Hindustan Zinc as an illustration. Since management control was transferred to the private sector, productivity at Hindustan Zinc increased 17 times, and more than Rs 10,000 crore was paid to the government coffers.

"We didn't privatise Air India when it was a monopoly. Now, when it had to be divested, the government had to absorb a loss of Rs 70,000 crore," Shah said.

In regards to free trade agreements, he suggested that India should make greater use of its strong labour force, services, and digital infrastructure.

The founder and chief investment officer of Marcellus Investment Managers and a well-known capital market expert, Saurabh Mukherjea, claimed that several significant, unseen shifts that had occurred in recent years had changed the game for India's long-term development.
These include improvements to the physical infrastructure, tax and financial reforms, and the digital infrastructure.

He emphasised that just 20 corporations in India account for 80% of corporate earnings, and that this tendency will persist. Shah also urged for favourable regulatory conditions to promote growth.