Broad-based revival soon in private capex: Narendran

Firms have not just started hiring in a big way but are willing to pay more for talent, says the CII chief

- BANIKINKAR PATTANAYAK

THE ECONOMY IS poised to witness a broad-based revival in the long-elusive private capex, led by sectors like metals, mining, chemicals, and electronics where investments have already started to pick up, TV Narendran, president of the Confederation of Indian Industry, told FE in an interview.

He asserted that any rise in interest rates is unlikely to bridle India Inc's expansion plans, as companies in the capital-intensive sectors have deleveraged substantially in recent years. “So, even if the interest rate goes up, companies’ borrowing costs, in absolute terms, are down from the earlier levels because of smaller debt. So, capital-intensive industries are better positioned to invest,” Narendran said. Many analysts expect the central bank to raise the interest rates in June to curb retail inflation, which scaled a 17month peak of 6.95% in March.

The employment prospect, too, has brightened, because companies have not just started hiring in a big way but they are willing to pay more for talent, Narendran said, adding that some of the sectors are facing an attrition issue. In fact, companies in sectors like hospitality will likely find it difficult to again draw workers, who lost their jobs due to the pandemic and are now employed in other sectors.