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‘India Story at risk,PM must act’

The big boys of industry are taking their investments to foreign shores,said Deepak Parekh.

Written by Express News Service | Mumbai |
December 12, 2010 2:19:56 am

The current environment of negativity in the country has taken the wind out off India’s ambitious growth story,feels HDFC Chairman Deepak Parekh. The big boys of industry are taking their investments to foreign shores,and the UPA government needs to work as a team to get things back on track,he said.

In an interview to The Indian Express Editor-in-Chief Shekhar Gupta for NDTV’s Walk the Talk,Parekh echoed some of the sentiments expressed by Tata Group Chairman Ratan Tata two weeks ago. He was disappointed that “everything that was going so well a few months ago” seemed to have suddenly snapped and taken a downturn,Parekh said.

“We had really taken off and we were the darling of the Western world,of the multinationals,everyone wants to invest in India and suddenly there’s a snap and it’s amazing… it has really taken the wind off our ambitions and I am very disappointed. Saddened more than disappointed to see what’s happened,” Parekh said. These were “tough times”,he added.

Tata had expressed similar fears,also in an interview to Gupta. He had said that only weeks before the spectrum scandal led to the resignation of telecom minister A Raja and lobbyist Niira Radia’s tapes sparked a furore over alleged links between the government,business and media,US President Barack Obama had hailed India for having arrived on the world stage. But the slew of scandals that followed had made it appear that India could be going down the path of becoming a “banana republic”,Tata had said.

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Parekh,a respected corporate leader who has been courted equally by industry and government,said that the country’s big businesses were finding it tough to grow in an environment of extreme pulls and pressures,coupled with policy contradictions.

He referred to the Lavasa hill city project in Maharashtra as an example — the Union Environment Ministry,he said,had stopped the project after it had been approved by the state government and large sums of money had been invested in it by banks over years.

“I’ve gone and seen Lavasa and I think HCC (Hindustan Construction Corporation) has done a remarkable job. Now it’s not that he’s built it without government approvals. But you can’t give an order now — stop construction and bring it back to 2003 level or 2004 level. What are you trying to do? Break it down?” Parekh asked.

“What is happening,which is a very sorry state of affairs,if you look at the big houses in India,Tatas investing abroad,not in India,they want to but they can’t,because they don’t get the land,they have old mines but they don’t get extension of the mining,and then someone accuses them of mining illegally,all kinds of issues are there,” Parekh said.

“The big boys are looking outside because it is much more easier to do business,it’s simpler to do business,it’s straightforward business,it’s yes and no,it’s no grey matter,and you get to know. You may pay a higher price to acquire companies,we have bought banks,we’ve always had to pay a higher price when we do an acquisition,but in a year or two you make up for that.”

In a strong criticism of the government not characteristic of Indian corporate leaders,the housing finance industry veteran had tough words for Prime Minister Manmohan Singh’s UPA-II government,which he said was pulling in different directions.

“Why does a company do well? If each manager or each departmental head is pulling in different directions,you will not have a good company,or a good result,” he said. “The big boys in the government are pulling in different directions and not working as a team. (They are) following their own agenda,own departmental agenda,not looking at a broader picture,the prime minister has to get that organised.”

Parekh conceded there was a limit to what the PM could do on his own,but said he still needed to say something,“incentivise” the team to work together,rather than going to the press every time.

Parekh also expressed shock over how the leaked tapes of corporate lobbyist Niira Radia’s phone conversations with politicians,industrialists and journalists had played out and contributed to the mood of negativity prevailing in the country.

“The simple question is,why was the phone tapping done? Because of accumulation of large resources,large wealth in a short period of time,or foreign spy or something. (But) you can’t have telephones tapped for two years,that is invasion of privacy. Even if it’s a crook,even if someone’s doing something wrong,does it take you two years to find out whether he is wrong? You take action against that individual,you arrest that individual,you question that individual. If you continue tapping the phone for two years then it is invasion of privacy,and then the leaks… If the I-T Department feels there was evasion of tax,does it take two years of tapping a phone to find out?”

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