Uday Kotak: 'India mustn’t let a few conglomerates define its destiny, needs broad-based growth'

Veteran banker and Kotak Mahindra Bank founder Uday Kotak warned that India should not let select conglomerates “define its destiny” while urging the country to aim for broad-based growth with many “winners”. Kotak’s comments echoed concerns that a handful of tycoons and business houses are at the forefront of India’s economic success story.

“We need to see many flowers bloom. And I’m not a believer that a few companies should define India’s destiny,” Kotak told the Financial Times. "We need a broad-based growth of the Indian economy, with many winners.” He further said that the Indian economy needs to expand faster to lift millions out of poverty into the mainstream while adding the country needs to aspire to grow at 8-9 per cent.

Earlier this week, Kotak said at the India Today Conclave 2023 that massive consolidation has taken place and continues to happen and with that, there is consolidation of business power much different from wealth in a few hands. He said while this can give results in the short term, one would want many more businesses to flourish in India in the long term.

The banker extraordinaire further mentioned that the Centre is doing the right thing by increasing government spending while adding that an environment needs to be created so that India Inc is ready to make big decisions on investment in the future. Kotak also clarified that the government policy is not skewed but it “must encourage many flowers to bloom”. He also cited examples of the telecom, steel, and aviation sectors to further illustrate his point.

“Look at the telecom sector if we met here five years ago, there were 13 players and now at the best, we are two and a half. Let us look at the airline industry, you have consolidated to two and a quarter. Similarly, in the steel sector, two big guys and a lot of small guys,” he noted. He also said that the country needs free and fair markets backed by robust policy while adding that he would like to see the Competition Commission of India (CCI) play a stronger role.

Uday Kotak recently stepped down from his position as the MD and CEO of the Kotak Mahindra Bank. Kotak transitioned from the role of MD and CEO to a non-executive position on September 1 after more than two decades of running the institution.

At present, former joint MD Dipak Gupta has taken over the role of MD and CEO for a four-month interim period until December. Currently, the Kotak family holds a 26 per cent stake in the bank. Kotak Mahindra Bank has total assets worth Rs 6.2 lakh crore, including bank assets of Rs 4.89 lakh crore. The bank boasts of the fourth largest market capitalisation among banks with an m-cap of Rs 3.5 lakh crore.

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