Mahindra & Mahindra chairman Anand Mahindra has urged the manufacturing industry to increase private investment at a time when the government is heavily investing in infrastructure and the need for jobs for young people is high.
“Private capital investment is the key to capitalising on this opportunity. It's a key driver of growth, jobs, and demand. After the economic reforms of the 1990s, it rose from around 10% to around 27% of GDP. However, from 2011-12 onwards, private investment as a percentage of GDP has been falling to a worrisome level. We need to remedy that situation,” Mahindra writes to shareholders in the conglomerate’s annual report.
“It is undoubtedly a good time to be an Indian company. The interplay of geopolitics and economic linkages in the post-COVID era has seen India's position strengthen,” Mahindra says adding that conditions are working in India’s favour and it's time to seize the day.
“A new multi-polar manufacturing world is emerging, as nations and companies rush to reconfigure their supply chains to be more resilient and diversified. India has emerged as a key beneficiary. India's emerging role as one of the vital nodes in future-proofed supply chains across industries opens the door for growth within India and expansion beyond. Clearly, the tides of opportunity are rising,” he writes.
“For private industry, particularly manufacturing, this confluence of factors translates into an excellent chance to be a serious player in this new, multi-polar world,” he says.
“Domestically, the stars are in alignment. India has been heavily investing in infrastructure and logistics. India is the cheapest manufacturing destination in the world. There is a good supply of labour. The need for jobs for young people, our demographic dividend, is high,” the 69-year-old chairman of Mahindra Group says.
On private investment, Mahindra says the problem is not one of resources—rather one of mindset.
Particularly after COVID, Indian companies have become increasingly risk averse, sticking to the tried and true rather than blazing new trails, he says. “To some extent, this is understandable. But when opportunity beckons, when private industry can make a significant difference, it is time to set aside our fear of failure and take a leap of faith and self-belief,” says Mahindra.
The Mahindra Group has had an extremely successful few years on the back of a slew of strong product launches across our Auto Division and Farm Division complimented by a turnaround in Mahindra Finance and value creation within Growth Gems, says Mahindra.
“The XUV 3XO has broken barriers and created a new segment. The Scorpio-N has proved to be a blockbuster. The Oja tractor is a path-breaking product in the global tractor industry and promises to make its own tidal waves. On the back of this rising tide, we are stepping up our investments. We have already announced an investment of ₹37,000 crore across our Auto, Farm and Services businesses (excluding Tech Mahindra) in F25, F26 and F27. These investments will, to a large extent, go towards building capacity, with a pipeline of 26 new models/facelifts in the next 5 years,” he adds.
