Agenda as the president of the chamber

Since KK Modi and I have worked closely through out the last year, there will not be any quantum change in the position Ficci will take during the next one year. Modi and my ideas are not diametrically different. Changes could come in nuances, in small degree of emphasis which are bound to be take place between any two people. These changes will slowly unfold. He was bold, I am conservative. Perhaps I will be more of a professional sort than him.

On liberalisation andglobalisation

Today, the whole world going through turmoil so India has to tread its path very carefully. Policies of economic reforms and globalisation should nevertheless continue. There can be no going back on this. Only they have to be modulated and changed and changed very quickly from time-to-time. We have to take steps to come out of the slow down. Immediate action needs to be taken to accelerate the industrial growth rate.

On implementation of policies

The centre is thinking right on the revival of the economy. However, implementation of policies is slow. We need to jump start the economic growth. All plans are in place, but planned expenditure is not occuring while revenue expenditure has go up, subsidies have increased. However investment in road building, ports, power, bridges which give a fillip to employment generation and demand for capital expenditure is not occuring.

On reviving economic growth

Policy measures announced so far should be gone through within aspecified period of a month or two or else they will remain incomplete. I do not know why the government is not pushing investments in infrastructure projects.

Take the case of liberalisation of the insurance sector. It is time they introduced the policy. They have said that they will introduce it this session. But simply introducing will not do. The clearances should come, if 26 per cent foreign investment is to be allowed, it should be done. It will also send out right signals to foreign investors.

On inflation vs recession

We should not be overconcerned with inflation. Between inflation and recession, I consider recession to be a far more dangerous situation. Inflation can be corrected but correcting recession can take years. Right now the economy is facing a slow down and we should not allow the country to go into a recession.

On reviving capital market

The government must revive the capital market. I am not saying government alone can do it. But it should take all measures toimprove the market. I maintain that the foreign direct investment is very important. But the main role should come from the domestic investors. Local savings very important. Investors are putting money in banks fixed deposits. He does not see a turnaround in the capital market. His highest investment have come in sectors which are doing very badly. It is not that the promoter has necessarily taken them for ride. Their confidence has been shaken.

On regulating the stock market

At time just to protect investors, we have too much regulation. We must protect the investor, but not in such a way that no issue comes up. Today if the government wants to disinvest, it has to sell at very cheap price. Who is the loser?

On perking up sentiments in the market

Sebi should not be overregulatory. Every time to pull the plug even sometime over defensive. Sebi is even talking against UTI. Today without UTI, the entire market will collapse. If you give protection all the time, you cripple the market. Thebiggest shot to the stock market can come if the provident funds with its corpus of Rs 250,000 crore is allowed to invest 10 per cent of its funds in the stock market.

On the role of banks in the market

Banks are over cautious. There is a fear if being hounded in case the shares go down. But taking a decision is very important. They have to take the risk. For this it is very necessary to decentralise and the bank chairmen the power and authority to run the bank. On creeping acquisition and buybackIf somebody already has 51 per cent or above, there should not be any restriction on buying. There should not be any change in control.On the other hand, if it is below that and a promoter has to defend the himself against takeover, personally, I do not think there is anything wrong in his acquiring all of his stock. My personal view is that even 5 per cent is too low. I would have said acquisition sould be allowed even to 10 per cent.

On channelising money into stock markets

Defence mechanismsto protect investors are already in place. It is not many persons are swindling money off the market. If there was a case of siphoning off the money as in the case of some plantation company, no support can be given and strong action should be taken.

On liquidity in the economy

Availability of money should not be tightened. Banks have the money. They should have the discretionary power to lend not only to the industry but also to the trade.

On FDI in non-priority areas

Ficci has consistently held the view that we like FDI, particularly, in infrastructure where we do not have the money and technology required. Here we can allow 100 per cent ownership to foreign companies. They should also have a leading role to play in sectors which play a important role in exports. We do not need 100 per cent foreign companies in areas where we have the technology and the qualities are of international standards. They can come in as partners as technology suppliers.

On UTI and US-64

There isno danger of the Unit Trust being in crisis and investor money being in danger. Only if you create a crisis situation, there will be a run on it.

If the NAV has slipped slightly, but it will be up once the capital market picks up. UTI has been the biggest developer of the capital market.

On disinvestment

If the public gets shares cheap, and can make some money on it, they will always pick up PSU shares. Let the public make money. What is important is to go throught the disinvestment within a specified time period. To begin with, one PSU shares should be sold cheap.