‘India must focus on reforms as high growth is not a given’

India has tailwinds, such as its demographic advantage, to make it a high-growth economy, but the same cannot be considered foreordained and requires continued action, global private equity major Warburg Pincus CEO Charles Kaye said on Wednesday.

Implementing the reforms vision is the “principal challenge” for India, he said, specifying that both the challenges and opportunities for the country are domestic in nature. Warburg Pincus has invested $5 billion in India since 1995. Its bets include HDFC, Kotak Mahindra Bank and Bharti Airtel, where it made handsome returns, setting a milestone for risk capital investing.

“India has all the powerful tailwinds of demography and so much else, but that’s not destiny; it’s not foreordained and requires continued vigilance and significant action to continue to take advantage of that opportunity,” he emphasised.

Speaking at a business summit via video, he said India had improved remarkably since 1995 when the firm first invested in HDFC but added that the main challenge for the country was to complete the reforms vision.

Offloaded responsibility

He welcomed the policy response to the pandemic. “The more significant way it dealt with it is that it essentially offloaded responsibility… into the banking system and then provided meaningful monetary support through the RBI and moratoriums; we will see how it plays,” Mr. Kaye added.

India’s strategy seemed to be “letting the recovery itself lead economic recovery”.

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