Indian-born industrialist Swraj Paul said Monday that India's economic growth rate may fall below five percent, with grave implications for its poor.
“My view is that we may not even see five, five-and-a-half percent. I think it will go down even further. Because India at the moment is really, in the manufacturing sector, not very much different from the experience you have in Britain or in the United States,” he said in an interview broadcast by the BBC.
“Unless the confidence comes back we don't know how low it [India's growth rate] can go. And that confidence is not coming. In India, or the US or Britain, we have not seen the bottom yet. You can only hope for improvement once you are convinced you have almost touched the bottom,” he said at BBC's Hardtalk programme.
Paul, founder of the multinational Caparo group of companies, said he never believed that India was 'decoupled' from the global economy.
“I never thought that...I said in a speech in April that anybody who has enjoyed the benefits of globalisation cannot think of themselves as immune from the bad effects of globalisation...It is really living on the moon.”
Paul said his real worry was that the downturn in India would hit the poor the hardest.
“I have been very critical,” he said, adding his criticism of policies had made him “a little bit unpopular” in India.
“Unless you are going to alleviate poverty all this talk about 'we are going to be developed nation' is a farce. We are sitting on a time-bomb.”
India's economic growth had to benefit the 300 million living on a dollar a day or the 600 million on two dollars a day, Paul said, adding: “Otherwise, growth has no meaning. This cannot go on. It has gone on far too long.”
However, the veteran industrialist said he had “no doubt” that India would still be able to emerge as a manufacturing powerhouse.
And Caparo itself would return to its plans to manufacture buses in India, jointly with Hyundai of South Korea.
“All we have done is put it on hold,” Paul said.