As the prime minister Narendra Modi completes his three years into the Indian government in May this year, Zee Business' journalist Manoj Dharra caught up in an one-on-one interview with HDFC's vice chairman and CEO Keki Mistry and began by asking him about his views on the present Indian government and the status of the country's macros.

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Mistry believes that the three years of Modi's government have been fantastic and many initiatives have been taken to take India forward.

He rates 'Housing for All', demonetisation, digitisation as top three initiatives by Modi government but also feels that a lower tax rate bracket will improve tax collection and broaden the tax base.

Here's excerpt of that interview:

1. Modi government will complete three years, how will you describe its overall journey and how has India's macro situation changed specially in past one year?

India's macro situation over the last 35 years has never been strongly poised as we are at this point of time, all economic data suggest that our economy is at the best...the current account deficit (CAD) and fiscal deficit is under control, the inflation has come down from 11-12% earlier and now is under control...India’s currency is one of the strongest in recent times, Reserve Bank of India (RBI) has built up Reserves...

India is poised to be amongst the most significant economic countries in the world along with China and US...Macro data is fantastic

Three years of Modi government is fantastic many initiatives has been taken to take India forward...

2. India's macro numbers are looking better but private investment has not taken off well, do you see things improving going forward?

Over the years the capacity built by manufacturing companies have not been utilised, historically because of environmental clearances, projects have been delayed and that has caused non-performing asset (NPA) problem in the banking system...Also capacity has not been utilised because of global economic slowdown and has been very unconducive as steel prices have not performed well...Capital expenditure (Capex) will improve only when economic situation will improve and that will happen over 12-18 months...

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4. Post-demonetisation we have seen lending rates moving southwards, do you see it further falling or stabilising at current levels?

Demonetisation has been a super success, firstly there has been transmission of wealth from the rich to the poor, because of which consumption will pick-up and consumption will lead to higher capacity utilisation...Tax to gross domestic product (GDP) ratio will improve...money that was lying at home has been deposited and now this money is gone in lower interest rates and now it is going into the financial assets, it is going into stock market so markets have gone up, into bonds and into productive assets...

5. Coming back to macro numbers they are improving but real issue of jobs creation is stil lacking? What could be the reason for this? 

Jobs get generated in agriculture, construction, manufacturing and service sector...initiative by government to promote housing will create massive initiative and generate jobs such as plumbers, mechanics, carpenters, construction workers, cement companies, paint companies and steel companies  and many ancillary companies that are dependent on housing industry...

6. Goods and services tax (GST) is also big reform and lots of apprehension of it being inflationary and a bit disruptive for some sectors, how do you see this panning out? 

GST has had enough time to prepare, in a year or two it will improve the tax base and result in higher tax collection and eliminate tax evasion...
 
7. RBI stance par view?

 Any central banker has to be very careful about the rates and inflation doesn’t spike, if it does spike it will take a long time to come back and the entire economy will get impacted... So, RBI will always keep a cautious stance...We must keep in mind about food inflation that is related to monsoon, secondly they have to keep an eye on global commodity price movement, RBI has also look at what US Federal Reserve is doing...I dont see RBI increasing rates nor i see scope of rates coming down...
 
8. Top three efforts and three much-needed initiatives going forward?

Housing for all ,demonetisation, digitisation are top three initiatives by government. This governmentt has done a lot in three years but my personal opinion is lower tax rates will improve tax collection and broaden the tax base...

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