Uday Kotak, MD of Kotak Mahindra Bank, in an exclusive interview with CNBC-TV18, said that India seems to be going through a slowdown every 10 years. He advised, "if you stick to what you are doing and if you are ready to take risks at the right time, it is phenomenal returns over a long period of time."

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“In an interesting sort of way normally this problem starts within the last ending number ‘8’. In 1998, we saw the Indian financial sector crisis post the Asian crisis, in 2008 post the global financial crisis and 2018 also we saw a beginning of a crisis with a company called IL&FS and everything else followed," he said on the sidelines of the HT-Mint Asia Leadership Summit.

“India story is like a Bollywood story and like a Bollywood story it always has a very happy ending. So if I take a photograph called India, it is always challenging. If I look at a movie called India and I am looking at it from the lens of an entrepreneur over last 30-35 years, it’s an exhilarating journey," added Kotak.

"In the Indian context, my view is - it's never as good as it looks, it’s never as bad as it looks,” he further mentioned.

Edited excerpts from the interview:

How is India looking to you?

When I think about the last 30-35 years, India at every point of time has looked like a very difficult photograph and there are 100 things which are not going right in India. Therefore, in my entire journey from mid-80s to now, I look at India as a photograph and it looks very challenging and inevitably we get very coloured by it, but India story is like a Bollywood story and like a Bollywood story it always has a very happy ending.

So if I take a photograph called India, it is always challenging. If I look at a movie called India and I am looking at it from the lens of an entrepreneur over last 30-35 years; it’s an exhilarating journey and if you stick to what you are doing and if you are ready to take risks at the right time, it is phenomenal returns over a long period of time and that’s my experience.

I have seen the financial sector of India which was completely closed; 97-98 percent of Indian finance was public sector in 1985 and if you look at this movie called India over the last 35-40 years in finance, what you are seeing today is unrecognisable and I am grateful to India because this opportunity won’t come in many other parts of the world.

I think a lot has changed and you are a beneficiary of what has changed as far as the Indian economy and the Indian market is concerned, but since you used Bollywood analogy and you said it’s like watching a Bollywood movie. So where are we, are we at the interval point?

I think right now we are seeing the love story developing but there is a villain in the middle.

Who would that villain be?

I think the villain is the fact that there is this thing about slowing growth. Indians are scared to invest, worried that things are slow and they may not get better, this is the classic thing I have seen so many times over and every few years you go through it. In some interesting sort of way, it happens - normally this problem starts when the last ending number year is ‘8’. In 1998 we saw the Asian crisis happen globally.

You are into numerology also.

You look at the facts. In 1998 you saw the Indian financial sector crisis post the Asian crisis. In 2008 post the global financial crisis, and in 2018 also you saw the beginning of a crisis with a company called IL&FS and everything else which has followed.

So every 10 years we seem to be going through this but if you sort of stick to what you want to do, over the next few years things get better and then you suddenly wonder what an opportunity and therefore, in the Indian context, my view is it is never as good as it looks, it is never as bad as it looks.

So if there is a villain in the story at this point in time, what should the hero do?

I think the hero has to drop interest rates further.

The RBI has now mandated all banks to link your lending rates to external benchmarks which means that all of you are going to drop interest rates?

Which we are working on and we will continue to drop rates. The hero needs to do that, which is drop interest rates.

So repo at what?

By the end of March it is sub-5 from current 5.40 percent. I think the other area which we need to do, and this is my view, is allow a little bit of depreciation of the rupee.

Which is naturally happening.

Yes, so that’s the second thing I would strongly recommend and the third thing which is what I think is the villain in the story is too much of cash is back; you are back to cash level which is pre-demonetisation level and that is the villain in the story and a lot of challenges to the fisc are coming out of GST.

I think GST collections are a big issue because you go to many stores and you ask for buying something and the standard question which the storewala asks, bill ya bina bill. I don’t think that is acceptable. In today’s times, that is the villain in the story. Let us get our formal economy growing.

First Published:Sept 11, 2019 9:04 AM IST