Well, I think the rates have to go down. We’re trying to be a part of the global economy. We’re trying to have tax rates that are prevalent in the Southeast Asian countries. You can’t have interest rates that are totally different from other countries.

• What is the inflation threshold for you?

Well, three to four per cent, four to five per cent. Not more than that.

• So you agree with what RBI did, they squeezed (the interest rates).

Yes.

• So you don’t buy the criticism that the central bank has been too conservative.

I don’t. I think that even if you look at the housing market, the Reserve Bank anticipated problems in the housing sector. They took a number of steps in the last two years to slow down housing, to cool down housing prices. They didn’t succeed very much, but at least they protected the banks and they protected the housing finance companies.

• And you agree with that.

I agree with that. They prohibited us from lending for land. For the last 18 months, no bank, no housing finance company can lend money for land if a developer is buying land. We can only give money after they get commencement certificates, which is when they start construction.

• Again you agree with that.

Hundred per cent.

• You are agreeing to the restrictions being placed on your own growth, your own business.

Yes. Because you know the point is that every builder was buying land with bank money and land prices were going up, up, and up. Unfortunately, what has happened is that they are still going up because the Indian lenders have been substituted with foreign lenders. The huge increase in FDI that we’ve seen this year . . . this year we expect the FDI to touch $25 billion to $5-7 billion, and a fair amount of that is in real estate. So the builders have now resorted to borrowing abroad or taking equity or preference capital from overseas. And with that money they buy land.

... contd.