So we've had stellar and record Q1 growth at 7.8%. It seems like the Indian economy has managed to weather the storm. Whether it's the Iran war, whether it is the threat of AI taking over jobs and so on and so forth. And I'm coming to you in this special edition of Frankly Speaking from the beautiful city, the city of joy, Kolkata. And I'm joined by one of India's top corporate titans, the chairman of the RPSG group, Dr. Sanjiv Goenka. Thank you very much for joining us on Frankly Speaking.
Thank you, Zaka, for having me.
Let's start with the big headline that's come out this week, Q1 GDP number at 7.8%. When this quarter started, I'm sure a lot of people would have said, you know, can we clock 7%, will we get close to 8%. We had the war, we had fuel prices increase and so on and so forth. First of all, your reaction to this? Are you surprised on the upside with this number?
You know, I come from a space where I have immense confidence in Narendra Modi and his administration and their track record on delivery has been so strong that growth and that India would be the fastest growing economy was never in doubt. So to me, you know, if you leave the statistics out, that we would be the fastest growing economy was a given because of the policies, because of the approach, because of the ease of doing business. I think it's also about India claiming its position in the global economy that despite turbulence, despite headwinds globally, despite what's happening on the geopolitical front, despite what's happening on the fuel front, India knows how to grow and the Modi administration will make it grow. I think and that's a message, signal of huge confidence on India, the Indian government and the Indian economy.
The external factors that we talked about, you know, the Iran war, the rising fuel prices, there was also this talk about, you know, AI taking away jobs and so on and so forth. Do you think the worst of those external shocks are behind us now?
I don't know whether the worst is behind us or not, but India has learned to grow despite this. So what is very clear is that India will grow faster than the rest of the world despite whatever.
So what would you attribute that to? Is it because the India story is largely driven by a domestic consumption story?
I think it's consumption of course. I mean that's important but it's also the investment that's happening. And a lot of investments are happening. So and a lot of greenfield projects are happening and which again sort of is dependent largely upon the kind of policies the government articulates. And the government has been pro-investment and therefore you see a lot of investments happening. I think it might take 2, 3, 4, 5 years for those investments to fructify into operating projects because there is a certain time lag from land acquisition to etc etc etc but I think there is a lot that's happening.
Tell me about, you know, one of the concerns especially I think the post-COVID era was about private investment not coming in, bulk of the, you know, the heavy lifting was being done by the government whether it's capital expenditure so on and so forth. Are you now seeing much more private investment sort of crowding in?
If you see the top 30 corporates or top 40 corporates in India, bulk of them are investing sums which they've never done before. So that in itself is not only sizable, but you don't put money for emotion. You put money for return. So at this point in time, everyone is confident of getting a return on their investments. So they're investing.
So especially this quarter, I mean from whatever corporate earnings we've seen, I think the top 50 companies as you said have all returned double-digit growth or near double-digit growths. Again, what is that a testament to the India story? Is that a testament that, you know, geopolitical shocks India's managed its way better than most other countries or is it that, you know, we're yet to see the best of the India story, the most growth India story?
It's a testament to the fact that Modi and his government knows how to weather storms and I dare say that the best is yet to come. This is certainly not our best. You will see a lot more happening.
So if there's a young investor today in India wanting to get into, you know, the India story, what would your advice to them be?
You know, from the time when we started out to now, capital is not scarce, opportunities are not scarce. There is no red tape. So literally any and every opportunity is your canvas. Take whatever interests you, works for you and go ahead and do it.
You had identified three areas I think data centers, electric vehicle transformation, and one more I think high intensity manufacturing. Can you just elaborate for our viewers why you believe these are the three areas?
What I had said was that I see renewable energy as a very big area of growth and frankly I can see over the future, next midterm not short term, at least 50% of India's consumption going the renewable way. And with battery you get stable supply. So the combination is a very potent area of growth. And then the whole area of data centers because there is frankly India offers the best opportunity and if you have cheap power, you have reasonably priced land and you have good connectivity, you know, you have the raw materials for a successful venture.
What about those who are saying these data centers consume a lot of electricity, they consume a lot of water to run, and of course, the fear of AI taking over jobs. How would you speak to those concerns?
You know, AI is going to redefine jobs. I'm not sure it's going to take away jobs. So you will see a different category of jobs being created. You will, so the routine, for example, now in our organization many or most of our HR interviews are done through AI.
Oh, is it? So if I want to get a job in the RPSG group, an AI agent is interviewing me?
Explain. I mean, yeah, walk me through it. Like, how does that work?
It's actually fully researched. The AI agent researches the candidate, shortlists the questions, asks the questions, then prepares an assessment report and gives it to HR. So, the human interface is one step later.
So, the first shortlisting is already done by the AI.
Wow. Okay. So, the point you're making is that that's what's going to happen. That's so you will have those kind of jobs getting reduced but on the other hand there are so many other things that are happening.
Okay, you know investments are happening. So a data center would need jobs. A renewable energy plant would need jobs. A transmission plant would need jobs. A battery plant would need jobs. You know any of these areas, heavy manufacturing would need jobs. So look at the kind of investment that's happening. I mean we had given a proposal for a thermal power plant in Bengal after the BJP came to power and almost all the major equipment suppliers are booked for the next 5 years.
Yeah. So that it's never happened in the economy before.
Yeah. I'll just come to the Bengal story in a second but again on renewables because you're very bullish on renewables. Just where does this optimism come from? Because we've had electric vehicle penetration. I think India is still less than 10%. China on the other hand one in two cars is electric and this has happened over the last 10 years or so. So what makes you bullish about India going?
See electric cars is one. But renewable energy. So for example, we would like in the six cities that we distribute power in Rajasthan, in Uttar Pradesh and in Bengal, over the next 3 to 4 years, we would like to take at least 50% of the total energy into solar stroke wind. And I'm sure that is the same for every distribution license stroke entity. And that in itself adds up to a huge requirement and more and more investors now are backing projects and companies which are not relying on fossil fuels. So I think there is a whole movement that's happening and of course it's cheaper. So you know it's a combination.
So I think this past quarter is when the first time that India's renewable energy production I think outpaced its fossil fuel production. So you think that's a good sign?
It's a very good sign. I do believe both will grow. And both will grow significantly because the demand is growing so significantly. So I think you will have a situation where you will have a realignment of jobs. But on a net net basis you will have jobs being added.
Again on the jobs question, you know a lot of economists, some folks in the opposition have also been saying we're not creating enough good jobs for young people. You don't see that around you in terms of private sector?
I know we are recruiting. Okay, just in terms of, you know, we have this massive demographic dividend which we may not be able to fully capitalize if we are not able to create those kinds of quality jobs for young people. I mean I don't know on what basis anyone says something like this. I certainly am not seeing that happening in my organization. I mean I know new jobs are being created and recruitments are happening.
So I want to come back to the again the question of renewables versus fossil because the one thing that the war has shown is India's import dependence on crude again. Would that hasten India's switch towards renewables?
I think it would. But I think India was already embarking upon a huge investment in renewables. And if you look at the kind of capacity that's come up, that's coming up and that's committed to come up, it's massive.
So we're targeting I think 500, at least the initial assessment or the initial ambition was 500 gigawatt by the end of the decade, but I think we'd probably hit that, you know, much before that.
I think I mean we could well cross 500 gigawatt much more than that. And that you think takes off pressure from your traditional dependence. It definitely does and it cleans up the energy.
Yeah, of course. Which from a place where I come from, you know, every November, every December, we have this problem of pollution. So, it is a concern. Now let me come to Bengal and you had recently sort of mentioned about the new budget after the new government came into office. You had said that it was just brilliant. What opportunities do you see in this state after let's say 20, 30, 40 years of what's been very stagnant...
