Deepak Parekh praises Modi government, says large-scale corruption weeded out

MUMBAI: Veteran banker and chairman of India’s largest mortgage lender Deepak Parekh today praised the Narendra Modi government and said that large scale corruption has been weeded out.
"India has never been in a stronger position than today from a macro-economic perspective,” Parekh said at a risk summit organized by industry body CII in the financial capital. “The country is demonstrating immense growth potential helped by a strong leadership at the helm, driving key policy changes.”

Parekh also added that with an expected GDP of above 7.5 per cent India was a bright spot as compared to its global counterparts. "We in India hold a key advantage by being a major economy with tremendous growth potential," he said.

The veteran banker also red flagged slowdown in private capex and acknowledged that public sector spends were instrumental in propping up the economy. He elaborated saying that a lot of activities were taking place in the ports, water ways and airports sector. “Often when infrastructure projects are a work-in-progress, there tends to be a feeling that nothing is happening in the ground. But this is certainly not the case in India," he added.

Parekh also expressed concern over the confusing signals emanating from global economies. “On one hand, there is tepid growth, continued problems with European banks, massive over capacities in China, but on the other hand, key global stock markets have touched or are nearing all-time highs,” he said.

He added that investors were chasing emerging markets predominately for yields but the tide may turn when US starts hiking rates. "Any hint of raising interest rates in the US will result in massive capital outflows, once again resulting in unprecedented swings in currencies and stocks," he said.

In the last week itself, equity funds have pumped in $5 billion in emerging markets, while over $20 billion has been invested in emerging market bonds.