Deepak Parekh at the EXPRESS

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The thing is, if we talk to Orissa government they have a point. For instance, you want to use the iron-ore from Orissa and make steel in West Bengal or some other neighboring state, why should we give up our natural resources that we have under Orrisa land because the royalty payments we get is so tiny under the old act? It has not been revised.

I think one of our failures is that we have not been able to get our metal and mining policies (in shape). If we talk about power and infrastructure, it is the biggest failure we’ve had. Cement construction is so expensive in India, I m not joking. The biggest concern is power: without power we do not have GDP growth. Without power you cannot progress. You ask Mr Tata or Mr Ambani, what was the basis of awarding the three power projects, the ultra mega power projects, to them? The basis of the projects was that we will give you land, water, connectivity or raw materials, environment approval. Mundra project was awarded a year ago; it’s still not happened because of permissions. We are not able to get our act together because of the number of agencies involved.

•SANDEEP SINGH: The CCEA has recently cleared the new business policy. Do you think it can actually adjust the issues of royalty?

As far as iron ore is concerned, when Posco wanted to export the iron-ore, we gave them permission to export. So when you export a product, you need foreign exchange. Today we are in a position in which we need more domestic production. We can rather have value added in our own country because value addition creates jobs and we need jobs. We are comfortable in foreign exchange reserves and funding side. We need to create jobs. Instead of selling iron ore, export steel.

•SANDEEP SINGH: What are some of the problems that you have had?

There are limestone deposits in a number of states like Meghalaya and Himachal Pradesh. I know companies in Himachal that were sitting on limestone deposits for 10 years. And there are one or two bankrupt companies that are sitting on iron ore mines and there is no way that we can take it back and re-allocate it to Tatas, who are ready to put in their money.

•ILA PATNAIK: What should be the regulatory framework in the Indian financial sector? Do you favour a single regulator ? Is India ready for a single regulator?

I think when you acquire a bank, you have to first inform the Reserve Bank of India, because that is the regulator. The support we got from the Reserve Bank this time was very quick: the paperwork is now going on. The Reserve Bank will only give its general approval after two general body meets. We have to inform the main regulator before we take up a strategic merger.

•SANDEEP SINGH: Would there be an increase in home loan rates?

I think there will be a marginal increase.

•TANEESHA KULSHRESTHA: Do you see speculatory interest moving out of real estate and should we see prices coming down further because of the same?

One did see investment or speculatory demand in real estate. People held assets with a view to sell them at a profit at a later date. However, we have been seeing such demand move out. Builders are already complaining of sales slowing down. Going forward, as these investors or speculators realise that there is no further upside in real estate prices, they will start selling out. There will also be people from who have been affected by the stock market meltdown and who will need to sell out their real estate holdings to make their margin calls. Such factors should bring rates down.

•TANEESHA KULSHRESTHA: There are companies like Rajshree Sugars & Chemicals in the South that are suing banks for selling them complex currency based derivatory products. What’s your take on the issue?

There are several companies that have filed such suits in courts recently. There have been differing judgments on the same. In some cases, the courts have asked the companies to take the losses and pay up, in some cases the banks have been asked to take the hit. However, one did not hear of such suits when people were making profits over the past two to three years. They have started complaining now. There have been companies who have said that they did not understand the risk involved or the information provided was not enough or the CFO did not have any power to enable such transactions. I do not think that the courts will ask for the banks to pay up based on such conjectures. However, at the same time, I do not think that such matters will be solved in the courts and will have to be settled out of it.

(The transcript was prepared by Neha Pal.)

editor@expressindia.com

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