The richest banker Uday Kotak has flagged concerns over “softer issues” like the massive spike in pollution in the national Capital and has warned that it may hinder “hard growth” targets like a 9 per cent expansion of the economy. He also made a very persuasive case for domestic ownership of assets, saying foreign investors should not benefit from our growth story. “I think of what’s happening in New Delhi…are we at a stage where we really will find a big challenge because of the softer issues to manage a hard growth of 9 per cent per annum and how are we going to manage a balance between hard growth and softer aspects,” he told a seminar at the IGIDR here today. Pointing to former Reserve Bank governor Bimal Jalan’s earlier statement that 48 per cent of the food for the poor do not reach them, Kotak asked how are we going to manage the ecosystem for better serving the poor. Kotak, the executive vice-chairman and managing director of the fourth largest private sector lender Kotak Mahindra Bank, also pointed to other areas like judges and teachers, possibly referring to the gaps in both quality and quantity which get frequently written about. On the issue of foreign ownership of assets, he said, “it’s good we’ve opened up to foreign inflows, which we need for financing our external balance sheet. But it has come at a significant price as the nation is giving up a lot of its wealth to a lot of outside people.” He cited the example of mortgage lender HDFC, whose market cap has grown from Rs 500 crore in the 1980s to around Rs 2.60 trillion now but the company is 85 per cent owned by foreign funds. “The entire benefit of this growth from Rs 500 crore to around Rs 2.60 trillion has benefited a saver in Boston or anywhere else in the world,” he rued. Kotak said he looks at the current account balance as the country’s overall profit and loss statement and despite all the enabling factors like a reasonably low crude prices, the country has consistently been showing loss.
Kotak, however, lauded policymakers for managing the debt side of the balance-sheet very well.