Great Lakes Chennai Academician Shares Insight To Propel India's Corporate Sector

Prof Vishwanathan Iyer - Senior Associate Professor and Director of Accreditation, Great Lakes Institute of Management, Chennai spoke on how global financial trends including Exchange rate impacts, trade deficits (or surplus) in goods and services, FDI’s and FIIs are among the direct channels that impact India’s corporate sector. The ‘spillover’ effect on the recipient economy is felt to the extent of the integration with the global financial markets.

Prof Iyer said, “Government’s infrastructure push and defence manufacturing are expected to do the heavy lifting as far as the growth in the GDP is concerned. Government’s Gati Shakti initiative (National Master Plan for Multimodal Connectivity) and industrial corridor development are expected to be the key drivers in this context. While ‘Make in India’ initiative has come a long way in increasing the share of manufacturing (particularly electronics manufacturing) within India, its direct linkage with the exports is a function of the ability of the international markets to absorb. Hence, while growth in manufacturing is robust, it is mainly aimed at internal consumption.”

Sharing his analysis on the on-ground indicators, he said, “The GST collection (a hard measure) and Purchasing Manager’s Index (a perception measure) are pointing in the same direction. To quote the recent Morgan Stanley report on the Indian economy, PMI is at a 13-year high and real goods and services tax collections are 35 percent higher than the pre-COVID levels. Passenger vehicle sales and service exports are 131 percent and 184 percent of pre-COVID levels. These broader trends can be further confirmed from the recent Q1 results for FY2023-24. Out of the results declared for about 225+ companies so far, a healthy jump in the YoY growth of Revenues, Gross and Net Profit can be seen across multiple sectors. Listed companies across the sectors of Manufacturing, BFSI, Consumer durables, FMCG, Electricals, Software & IT services, Diamonds & Jewellery, Real Estate and Alcohol have shown considerable jumps in their YoY numbers. Such buoyant Q1 performance is expected to be carried through the financial year.”

Thus, while the global economy is still facing significant challenges, the Indian growth story continues to remain robust. Further, India’s financial sector also remains strong, buoyed by improvements in asset quality and robust credit growth.