MUMBAI: The Covid-19 pandemic has been ‘tough’ on India with record high infections and lockdown crippling economic activity, but the country can aspire for 7% economic growth soon with consistent policies and fair treatment of international capital, said Jamie Dimon, chairman of JPMorgan.
This crisis may be a great opportunity to deliver on the country’s growth potential as international businesses look for newer geographies that have skills and infrastructure and offer a stable regulatory regime, he said.
“It has obviously been very tough in India and you have taken a lot of bold decisions to get around this too, but it’s going to be tough,” Dimon told ET in an interview ahead of the bank’s annual investor conference that’s being held virtually this year with nearly 600 participants.
“India should aspire for the stars, India should aspire for 7% growth. India has done an unbelievable job in education. But I think you need capital market reforms, you need state-owned banks to be reformed, you need more consistent regulations and legal requirements to attract more capital,” he said.
Dimon, who has been advocating investing in India for his global clients, said policies such as flexibility for labour with a safety net would help in ensuring better treatment of investors while at the same time protecting workers against unexpected shocks. The US-China trade spat is addressing the shortcomings of the World Trade Organisation, Dimon said.
“The world is going to put more pressure on China around fair trade,” said Dimon. “Europe has started to feel that way, India has started to feel that way, Asia feels that way. America can lead the way in that. It is not going to be against China, but the world was one thing years ago when the WTO was set up, it is something different today.”
The impact of the virus would have been far worse had the governments and central banks not been quick on their feet to react with stimulus and quick slashing of interest rates and flooding the market with liquidity.
“The damage would have been far worse had they not done anything,” said Dimon. “You and I can criticise all these policies, but they moved so quickly especially the central banks. These policies will be debated for years, especially the after-effects, but I think they stopped it from getting much worse.”
There is an urgent need for companies to get back to work wherever it is safe as continuing to stay home could have far worse consequences on people and societies like depression due to lack of income.