-Deepak S. Parekh, Chairman, HDFC Asset Management Company
HDFC Asset Management Company’s Chairman, Mr. Deepak S. Parekh addressing the shareholders has said that that Indian mutual fund industry has the potential to grow exponentially.
According to him, the year gone by will go down in history as one of the most difficult ones experienced globally. Rarely is there a catastrophe that is shared by the entire world at the same time. There were unprecedented setbacks due to covid-19, which resulted in the global economy witnessing one of the worst contractions.
The Indian economy too, contracted by 7.3% in FY20-21 – an event not witnessed since the liberalization of the economy. The second wave of covid-19 has been significantly higher than the first one and impacted the growth recovery that was underway since the last quarter of FY2020-21.
While there is rising concern of impact on consumer sentiments and whether the recovery will be as quick as last year, the fast pace normalization will happen as the economic activity stabilizes. According to Parekh, a substantial proportion of population will be vaccinated in India by the end of this year which is likely to support the rebound.
On a full year basis, overall economic impact is not likely to be material provided covid-19 related situation does not deteriorate significantly from hereon. The healthy investment growth in q4fy21 and thrust of central government to push capital spending through higher budgetary allocation, improving access to infrastructure financing, etc. should also aid the revival.
Considering the above, in our opinion, growth is likely to be strong in fy22 on the back of a favourable base effect, supportive fiscal and monetary policy and buoyant global environment.