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Gujarat incidents not to affect economy: Goenka

BS Corporate Bureau

The economic agenda of the country would not be affected by the current political situation, said Sanjiv Goenka, president of the Confederation of Indian Industry.

"There is a realisation among political parties that the economy should not suffer because of the political situation. In fact, every time there is such a political crisis, there is a stronger will among the political parties to move ahead with the economic agenda for the nation," he told Business Standard.

According to Goenka, the economic environment today is much better than what it was a year ago. "Last year, virtually no company was making money. Steel, paper, cement, automobiles - every sector was in the doldrums," Goenka said.

"The economy has begun to pick up now. Companies are performing a lot better. The worst phase of the economic crisis is over," he said.

Terming the 6.2 per cent growth rate in the last quarter a good indicator, Goenka said he expected the growth rate to be the same if not better in the coming months.

Sectors like services and agriculture had shown a good performance in the last quarter. While the services industry witnessed a growth rate of 7.5 per cent, agriculture achieved a 7.2 per cent growth rate in the last quarter.

Goenka said new areas like biotechnology, entertainment, biomedics, pharmaceuticals, retail and IT-enabled services would contribute to the gross domestic product in the coming years.

On divestment, Goenka said: "It is being handled far better now. In fact, it has become a matter of routine. The process is transparent and goes through without any major hitches."

On the impact of the Gujarat violence on investment, he said: "The investment climate will not be affected by the Gujarat incidents. Investors who are familiar with India know one state will not affect the other."

However, corrective action by way of confidence-building measures was needed to revive the economy in Gujarat. CII has commissioned a study with the Indian Institute of Management (Ahmedabad) to suggest measures for reviving the economy in Gujarat.

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