Industrialist Kumar Mangalam Birla on Thursday warned of “near-term challenges” for the economy, citing rising costs of oil, growing inflation, firming bond yields, and a widening current account deficit as areas of concern, PTI reported. Birla was speaking to shareholders at an annual general meeting of his company Ultratech Cement.
Birla said factors such as increasing trade protectionism, rising fuel prices, geo-political risks, and the uncertainty about tightening monetary policies in advanced economies had the potential to dim the current positive outlook.
“The ongoing global trade wars, more so between the US and China, are worrisome and will have a spillover negative effects on our economy,” Birla warned. He added that the economy has been resilient to the temporary effects of demonetisation and the Goods and Services Tax, explaining that infrastructure projects and schemes of affordable housing and smart cities could further lead to medium-term growth.
Birla said he expected the domestic cement industry to pick up after seven years of lukewarm growth. It saw a dip in the last financial year after a ban on sand mining and a duty hike on pet coke affected construction in major states. The industry is now being given a push by the government’s thrust on infrastructure development, revival of rural housing demand, and pushing low-cost housing.
Birla also informed shareholders that Ultratech has submitted a resolution plan for acquiring Binani Cement.