MUMBAI: To become truly 'atmanirbhar’ (self-reliant) India would need to become 'atmanirbhar’ in financial services according to Sanjiv Bajaj
chairman and managing director Bajaj Finserv
.
This would mean that India would need a capital formation of $1.1 trillion for the next year which will have to rise to $1.7 trillion in five years to achieve the aspiration of becoming a $5 trillion economy.
“For India to become a $5 trillion economy the country would require gross fixed capital formation to rise from 27% to 33% of the GDP,” said Bajaj while speaking at the Times Network India Economic Conclave 2021.
“If our GDP growth grows 11.5% in FY22, it will require gross fixed capital formation (GFCF) about 33% of GDP or $1.1. trillion dollars,” said Bajaj. He pointed out that in 2007 when India was growing just below 10%, the GCFC was around 33%.
“Where will India generate the capital form? We need strong domestic savings and financial systems and at the same time attract foreign investments, We also need a solid set of institutions that can drive these capitals to productive use,” said Bajaj.
According to Bajaj large western democracies grew by having strong financial institutions. Singapore, which managed to grow rapidly, made a strong difference to its economy by being financially independent.
“Over-reliance on foreign capital brought countries down to their knees during the Asian currency crisis. We must have a strong domestic financial services industry in
Atmanirbhar Bharat,” said Bajaj.
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