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Banker and founder of Kotak Mahindra Bank, Uday Kotak, on Tuesday backed Prime Minister Narendra Modi's recent remarks on austerity and moderated consumption, saying India must prepare itself for prolonged global uncertainty and avoid "living beyond its means"
Interacting with Industry leaders at the CII Annual Summit, Kotak said the Prime Minister's remarks reflected a larger strategic concern around India's economic resilience amid geopolitical instability and rising energy risks. Referring to the ongoing crisis in West Asia, Kotak described the situation as "a much more bigger, much more complex problem than it sounds," while underlining the need for the country to prepare for external shocks. He said the Prime Minister's appeal to reduce unnecessary consumption should be seen in the context of strengthening India's economic balance sheet. There are some simple things that a country can do, which is to moderate unnecessary consumption, which is counterproductive. I will see it in terms of the country's P&L and balance sheet, Kotak said. The veteran banker also recalled an earlier remark by the Prime Minister urging Indians to hold weddings within the country instead of abroad, saying the message carried a deeper economic meaning. "It was a very simple thing he said, but it had deep meaning," Kotak noted. "A truly atmanirbhar, self-reliant country is the one that does not need to depend on somebody else's money or power." Kotak said the global order has shifted sharply from the interconnected world fostered over the last several decades to a more protectionist and self-reliant framework. "What we have seen play out today is the exact opposite, each one for yourself," he said. "If you live beyond your means, sooner or later, the day of reckoning comes." Kotak warned that the impact of the Middle East conflict on global energy prices is yet to fully reach consumers and businesses in India. "We have not seen the impact in the last two months of the Middle East war in terms of energy price transmission. It's coming. And it's coming big," he said. He added that consumers with limited incomes would soon feel pressure from rising fuel-linked costs across sectors. "The shock is coming," Kotak cautioned, while urging businesses and policymakers to prepare in advance. "My view is we should prepare for paranoia before the event. And we must hope that tough times do not come or remain. But we must prepare for the worst." Kotak also called for a long-term strategic approach from Indian corporates, arguing that the country had "financialized too early" and companies needed to focus more on investments and future competitiveness rather than short-term stock market gains. (ANI)
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