In a chat with ET Now, Aditya Puri, MD, HDFC Bank, shares his macroeconomic and business outlook. Excerpts:



ET Now: The new government has come in, the budget is also out of the way. Do you think that the government is making the right noises and could we clock in above 5.5% growth in this fiscal?



Aditya Puri: The worst is definitely behind us. There is a pick-up in consumer. You see it in industrial activity, you see it in IIP. They are unclogging the projects which had actually reduced our capital output ratio. Once that comes back, in the short run, 5.2 to 5.5 is almost a certainty.



At the same time, they are looking at various policy changes that are required to bring in FII and FDI, make manufacturing easier, bring in manufacturing trade employment. In our view, both in the short and the medium to long term, prospects are bright.



ET Now: As far as inflation is concerned, it is still acting very stubborn and it has gone up in the month of July. So, do you think that the RBI should continue with this tightening stance because if we want sustainable long growth, inflation has to be under control?



Aditya Puri: If we look at the positive side, the only real inflation that we have not been able to bring under control is the food inflation and that is a bit volatile. Even though I do not know what is causing it, but I think it will come under control. In the meantime, I do not think reducing interest rates is the major need of the hour because even when you need projects to come up, it is going to be 8 to 12 months.



Inflation better be controlled and probably it will take six months to two years. Raghuram Rajan also said that if we follow the right fiscal policies on fiscal deficit reduction, he can look at interest rates again. So, I cannot second guess him. All I can say is, I agree with him.



ET Now: As far as ATM transactions are concerned, bankers have said that they are not keen on charging their own customers to withdraw, but if you are borrowing from other ATMs, they should charge. But RBI has allowed you to go ahead and charge your own customers also post five transactions. Do you think that is correct because you are charging your own customers for withdrawing the money that he has kept in your bank? Do you think it is fair on RBI’s part and the bankers’ part to do so and will you be looking at maintaining that? Will you be looking at charging your own customers?



Aditya Puri: When you go on a toll road, do you pay toll?



ET Now: Yes I pay.



Aditya Puri: Do you think it is fair?



ET Now: It is not fair.



Aditya Puri: Well, when you have an ATM, an ATM network costs money. If everything the banks give is free, you would not have banks left. I am sure you want the bank.



ET Now: What about the FIPB approval? You have submitted a new plan to them. Are you expecting it to come through soon?



Aditya Puri: We always live on hope.



ET Now: There was a discussion about HDFC and HDFC Bank merger. That rumour has again cropped up. So what is your view on that?



Aditya Puri: That always crops up. Deepak Parekh said it very clearly. Whenever it makes sense, we will look at it. At the moment no proposal is on the table.