said there is no need for pessimism despite the economic slump . “My view is that there are some very good things happening,” he told ET in an interview, among them the transformation that will be wrought by the digital revolution. While his bank has raised red flags about demand in some segments of the economy, initiatives such as overseas sovereign borrowings are bold, Puri said, adding, “I would say it is imperative that we bring the money into the system and use it to spend for productive purposes.”Budget measures such as the higher surcharge on the super-rich have limitations when it comes to generating revenue but the idea behind this is to widen the tax base, said Puri, whose 25-year stewardship has seen HDFC Bank become the bellwether of India’s credit economy. Edited excerpts:The fact that there is a slowdown cannot be denied. But do we need to be pessimistic that India’s prospects are not bright in the medium to long term? I don’t think so. Everybody and his brother is coming up with a reason for the slowdown.But it is not fully clear as to what is the reason — whether it is related to election or global slowdown, or it is a sudden slowdown. My view is that there are some very good things happening. This pole vaulting based on digital is going to be a game changer for this country.To blame with a 20-20 hindsight is not fair. I would say it is imperative that we bring the money into the system and use it to spend for productive purposes. The issues on steel and all should be solved. Money is coming into agriculture, which is a good idea. Bank lending for consumption is also good because we need demand and as we move along systematically on the technology side there will be lots of startups etc., which is good. So, all I am saying is that do not expect an overnight turnaround, but I am firmly of the view that there will be uptick every quarter. We will still be dependent on government spending. If the divestment happens and infrastructure projects come up, the money will come, and demand will pick up.The changes we are seeing are phenomenal. I just came from Indore. We travelled 100 kilometres from Indore to a village. I met the shopkeepers there. They said their customers are from the town and some 300 villages around. Most of them are on WhatsApp, use cash but are tech savvy. But they didn’t want to pay merchant charges, so I offered them a payment app based on UPI (Unified Payments Interface) which does not have charges. I said what if I then give my mobile app to all the village customers around and they can come and pay on QR code and UPI. Simultaneously, I tied up with the telecom ministry, the CSC (Common Services Centres). The response has been phenomenal. People who did not take it first came back to take it. We have been able to close the asset or liability lead on the same day. More and more is happening on this both in terms of government as well as private enterprise. This will have a very positive impact in terms of cost dynamics and will come with new business.I do believe the NBFC crisis was averted. Problems still remain, which is what they are working on. It’s part liquidity but if the bigger ones get through, the small ones can be absorbed. The bigger issue is that their lending to portions of the economy has gone down. Banks cannot step in immediately but once things settle down, some of the stronger NBFCs will start to lend.Not all are crippled. Let us differentiate where you are unable to tap demand. Don’t mix the credit problem with the demand issue. One side you are saying that I cannot lend because I don’t have credit, other side you are saying there is no demand. What is the issue exactly? It is a combination. Their model has to be redefined. You cannot borrow short term and lend long term because some real estate fellow is giving you a fantastic rate. There is no free ride of borrowing at 6% and lending at 22%. You have to think.Real estate is a problem, especially at the high end. The cashflow issue has to play out there. All real estate is not a problem. Affordable real estate is booming. Construction activity has started to pick up. We have seen some uptick in consumption this month. The interest rate trajectory is on the way down. Liquidity has improved and it is reflecting in government yields and commercial paper rates. Let some money come in and monetary transmission with lower rates will happen. I feel the doom is over. We have hit the bottom.I believe this sovereign bond thing is good. Why are we saying if it is badly managed we will get hurt… don’t manage badly! If you exercise prudence, you will get it at a cheaper rate and at a good tenor. Hopefully, given that they have put so much emphasis on fiscal prudence, they will spend this on building assets, which will be one of the factors to revive the economy. Money will also come from RBI… at least some figure will come. Divestment is tough but not something that cannot be achieved. Money for infrastructure can come provided you do what you do with roads. The day they started giving toll financing guarantee, there was no shortage of money. Similarly, in these projects, if they are clear that they will give the right returns to the equity holders and contractors and bring the risk in line, it will come. They will have to be sure that they mean what they say. There is no shortage of money coming into India. It is for us to structure projects in a way that all participants feel comfortable. So, let us not completely be pessimistic.From 6% we can only go upwards. What happens in the next quarter we don’t know, but we will move up systematically depending on the efficiency of the execution to 7.5%. Beyond 7.5%, you need private investment, which comes only when demand is there. Right now, demand is not exceeding supply so it won’t come so soon unless someone takes a leap of faith.Our leap of faith is we have invested unbelievably in technology, people, market and products. Today we call ourselves a financial experience. Today, you are welcome to HDFC Bank on mobile. You can do your banking, loans, we will help you in safe shopping, we can do shop and compare, you don’t have to give me your credit card details. We will give third party, purchase and sale of stock. All my products are now available in semi-urban and rural India. We are taking our digital offering to 100,000 villages over the next one year. We are the only people lending to the smaller shopkeeper. I have done 1 million, I will take it to 10 million. I want to change the ability of people in semi-urban and rural India to get organised finance, and I want to make money also, I am not apologetic. We are working with the Googles and WhatsApps, etc.Exports are an issue and we will have to work very, very hard because the whole world wants to export. The Niti Aayog suggestion that we choose the item we want to export… when we create the enabling environment to help, then exports will happen. The entire supply chains from China are changing. Some of them have already started to move. We are not yet capturing enough of that. Some companies are there with whom we are in solid discussions.There is a limit how much we can tax the super-rich. But if we want volumes, the tax base has to be increased. I do believe they have the capability today, based on artificial intelligence, to substantially increase the tax base. Only 12,000 people earning more than Rs 5 crore? If you go to Malabar Hill or even around Lower Parel, there will be more people. You have taxed today because you needed to get it going but ultimately the solution is to broaden the tax base.Not now, if they stop here. If they go back to the old regime where it was Rs 100 and you paid Rs 102 as tax, it will have impact. The trajectory on tax for both corporates as well as the rich must go down. But that can happen when we expand the base. People may accept this measure for now but in the long run this is not the solution. Net-net our GDP growth is 6% and it is going to only improve gradually to go towards 7%. Itna kyun ro rahe hain jaise sab udd gaya. (Why wail as if everything has come crashing down?)There is a solution, for instance, if they move quickly… like if they close it with extreme urgency… whether like Tatas’ takeover of Bhushan Steel or Mittals’ takeover of Essar Steel. Those are good plants. Very quickly they should start contributing. Similarly, they can solve the power problem. Everybody has realised that bankruptcy code and cleanup of assets is a good thing. It’s just that it has got stuck because too many people got involved. They are not supposed to be a court but a liquidation authority, but that will happen.