There has been a shift in IDFC's operating profile from power, roads and ports to telcommunications and information technology, transportation logistics and urban infrastructure. Why?
When we started, we had four basic sectors, power, roads, ports and telecom. As we got into our first year, we found that this was too simplistic. We wanted to broadbase the thought process - conceptually and along project lines. So we organised the business around four heads. We said energy instead of power. Power was very limited.Energy meant oil, gas, pipelines. There are obviously synergies here. Roads and ports - very important. We have subsumed them under transport logistics. No the interconnections will be clear. Integrated transport has been talked of earlier, but since it cuts across ministries it has never worked.

The word integration is overused. But we are looking at new ways of delivering services. For instance, transport logistics is an extremely important element of global competitiveness. How can companies have an effective just-in-time if ports are not working and roads bad? How can we finance ports when we do not know what our port strategy is? We have 12 major ports, but there are tremendous inefficiencies. So we are setting up smaller ports, dotted along India's coastline when the volume of trade is static.

You could argue that you need only two or three ports that work. Are you going to build infrastructure for all these 35 ports?
You can't ask the railways to link everything. Does the privatesector do it? But then, if Mumbai port gets efficient, with all its connectivity, it can take the pants off any other port. We need to think through these things very carefully, and here the years of planning are over, it is the years of strategising that are very important. Words like blueprint or masterplan have disappeared from the lexicon.

What level can this be done at? It has to cut across ministries.
This is the other trouble. Our bureaucracy and official system is pigeon-holed. Everyone is in their little boxes. And to bring down these barriers is going to be extremely difficult. It is happening to a certain extent. For instance, why have a power ministry, coal ministry? We should have an energy ministry. Like we have done internally. Similarly, the Centre ought to have a transport ministry. Even in regulatory frameworks, we ought to think in terms of consolidation. We will have a power regulatory board, a gas authority, one at the centre, another at the state. We'll have a nightmare ofregulation that covers all ground. The new czars of India will be these regulators. Public-utility regulation is actually a complex art. So you have to really consolidate. Why not have a public utilities regulatory board that then applies these principles across the board. One issue in infrastructure development seems to be the lack of political will. What you need is actually the political will in the first place. Telecom, we have messed it up, totally because of a policy failure. We weren't sure. We wanted to maximise revenue. Why not say we want the best telecommunications network in the country and we want the cheapest. As a part of this process, the consumer is not mentioned at all. It is amazing. The privatisation process worldwide is about the consumer. In India, it is always something to do with the controller, which is the government and the owner. We have not privatised, just liberalised. You have been trying to drive privatisation. We are trying to tell Government to move away from providingservices. The philosophy is - if you want milk, buy a cow. We want to own the railroad to provide the railway service. The government only has to ensure that that the services are there, not provide them. Are you a little disappointed that for the kind of work IDFC is putting in, things are moving really slowly?. No, I'm not. I am an eternal optimist. Somehow cynicism really irritates me. I find everyone I talk to is cynical. I believe things will move. One is that we have hit rockbottom. Two, we don't have the money. The first few projects will be difficult. I think we are at that stage where first steps are being taken. Now there is some clarity, realism. And IDFC is very much on the ground. It is not suggesting wild policy about what we can do in 30 years time. You have recently formed an environmental advisory board.I think environmentalists have done us a huge favour. There are major environmental and social implication of projects that we have ignored for years.

IDFC has decided to build a verystrong capacity to look at these issues from a risk point of view. Today it is unacceptable to do certain things to people and the environment.
To ignore it would be foolish. What we have to do is establish property rights. That will take care of the genuine grievances of affected people and disarm the lunatic fringe.