While broadly complimenting Prime Minister Narendra Modi for adopting an approach to create an environment for doing business, Jeffrey Immelt, the chairman and CEO of US-based diversified conglomerate GE, was on Monday critical of the country’s energy sector regime, where he said the pricing is not right. “There is a need to curb power sector subsidies in India, especially power pricing,” Immelt said, but qualified it by adding that the government is moving in the right direction.
In an interaction with a select group of journalists, Immelt said that if the country wanted “electricity for all by 2020, then there’s no magic wand other than right pricing and building capabilities”. He said that if there was market pricing for gas, there would be more investment and production. Currently, he said, it was very difficult to build a power generation business here.
He said he would like to see reforms happening in the power sector and added that at some point of time there has to be “less subsidisation of local electricity prices”. “One needs to go to more market pricing. That’s going to allow reinvestment, that’s going to allow more production,” he added.
However, Immelt acknowledged it was easy for businessmen and industrialists to say such things but very hard for politicians to do the same.
Responding to a specific query, he said that he was not willing to invest in India’s nuclear energy industry unless there was an agreement on “common language” on the nuclear liability law.
However, Immelt said the prospects for big projects in India today were far better than what he saw earlier. “There’s no perfect environment anywhere but India today offers big opportunity,” he said, adding, “I see a lot of improvement coming now and that too after such a long time.”
Immelt, who earlier in the day also met Modi, heaped praise on the government’s Make in India project and said it was material to his firm. “GE is interested in commercial and military aviation, renewables, oil, gas, and sees big opportunity in making in India. It (India) is quickly evolving into a manufacturing base that we cannot avoid to ignore,” he said. “We want to ramp up our facilities to be in line with PM Modi’s Make in India direction,” he added.
“If you are a long-term investor in India, then you will be optimistic.”
Immelt was bullish on the infrastructure and transportation sector and said GE wanted to do a lot more in these sectors in India.
GE, which is present in the sectors of energy, transport, aviation and healthcare, recently got the the European Commission’s approval for its acquisition of the power and grid assets of French industrial company Alstom. In India the Competition Commission of India had earlier approved the deal. Immelt said that its alliance with Alstom will be immensely beneficial. Asked if GE was planning to make fresh investments in India, he did not give a specific figure but said it will be substantial. “For us in India $500 million is not a lot. If we are really building up in India, as great as it can be, and moving more manufacturing here, the number has to be substantial,” he said.