The year 2012 saw some significant changes in regulation for the mutual fund industry and towards the end of the year, the government has also started taking steps to boost the economy.
A Balasubramanian, CEO, Birla Sun Life AMC spoke to Sandeep Singh on the limited downside and hopes for a brighter year and market performance amidst several steps being taken by the government. Excerpts:
Do you see the reforms initiated by government enough to stimulate the economy? The rating agencies have been talking of downgrades.
Efforts are being put in the right direction, whether it is from the government, regulator or the industry, so that we overcome the current challenges and go on a growth path. We are at an inflexion point so any progress that will be seen on the recent reform announcement will probably see a take-off in the economy. The government is also focussing on containing their expenditure and, if implemented in the true spirit, then the benefits can be seen next year. The steps include petrol prices hike, diesel prices hike, cap on subsidised LPG cylinders. While S&P downgrade remains a threat, the efforts are being put in the right direction and I expect it will have a positive effect as we move forward.
How do you see the growth from here?
The buoyancy is coming back with the hope and from here the downside is limited. Most of the policies today are pro-economic growth and somewhere down the line we will start seeing the benefits. Stock market is also building hope on that and as we start seeing some of the initiatives getting materialised, we will see the market continue to be buoyant.
FII inflows have been good this year. How do you see them going forward?
I am bullish on foreign inflows. Compared to other economies, India is still better and a recent report released by the US government estimates that Indias growth will be much higher than other Asian countries over the next two decades. In that sense, foreign investors will continue to look at India as a long-term investment destination.
In the beginning of 2012 it was said that the second half will see corporate investment coming back but that has not been so. Is the activity beginning now?
From corporates point of view they have been building capacity over the last two years and have announced various projects, but not all of them have taken