HDFC chairman Deepak Parekh is among the leading figures of corporate India. In this Walk the Talk on NDTV 24×7 with The Express Group Editor-in-Chief Shekhar Gupta, Parekh says the current negativity is affecting India?s growth story and that the government should get its act together

I am at Mumbai?s Cricket Club of India and my guest today is a cricket enthusiast but not somebody who is going to talk cricket with me. Deepak Parekh, let?s talk about what?s happening to corporate India, Indian economy, growth. Tough times.

Yes, these are tough times. Everything was going so well a few months ago. We were the darling of the western world and multinationals and everyone wanted to invest money in India. And suddenly, there is a snap. It was building over a period of time but it has really taken the wind out of our ambitions and I am very disappointed, saddened more than disappointed, to see what?s happening. What is happening is that businessmen are killing businessmen. MPs are eating MPs and Parliament. Media is eating media. There are half-a-dozen media people who are standing in judgment whether some of your colleagues were right or wrong. How can media people stand in front of other media? And it?s the same in business versus business.

So everybody is being judgmental about their own.

What is happening is a very sorry state of affairs if you look at the big houses in India today. The Tatas are investing abroad, not in India. They want to, but they can?t.

Why is it that they can?t?

They don?t get the land. They have old land, they don?t get extension of the mining leases. Then someone accuses them of mining illegally.

You put them under pressure by accusing them of mining illegally and give the same mines to some crony of yours.

I am aware of the fact that it has been 10 years that the Tatas have been trying to put up a steel unit in Orissa and they still haven?t got the land. So why should they invest in India? If you see their (Tata?s) strategy, they say they are getting 50 per cent of their revenues from overseas. You see the Ambanis, they are putting money in shale gas in the United States. Mukesh Ambani has gone on record to say that he has already put $5-6 billion in shale gas.

And he is going to invest another $12 billion in America.

And Sunil Mittal. He has taken a huge debt on his Indian balance sheet to grow in Africa. What has happened in telecom globally is consolidation, but in India consolidation is not happening. There are so many players. No one wants to sell, no one wants to merge, no one wants to work together.

Particularly when people can move real estate money to telecom.

Well, real estate money into telecom. Have you heard of that anywhere?

Well, so many real estate companies bought telecom in India.

Yes. There are players like Tatas, Birlas, Docomo, Sunil Mittal. These are big boys with deep pockets. Still there are new players getting into it.

And just causing a mess of the market.

It is only a scarce resource. Corner it, make money. Hoard it, make money. The other issue is that in legal cases, our jurisdiction must improve. How many cases are pending, where is the judgment? Where are court decisions being taken? The Satyam case is still going on. What are the charges? What is the final verdict?

So all these are driving Indian entrepreneurs away? Do you see India?s capital flying away, Indian investment flying away?

The big boys are looking outside because there it?s easier to do business, it?s simpler to do business. It?s a straightforward business, it?s no grey matter. You may pay a higher price to acquire companies, but in a year or two you make up for that.

You are a sort of friend, philosopher, guide and uncle of corporate India. Do people come and share this problem with you? Do they say, we can?t do business in India anymore?

Many people have talked about it. See, we need newer industrialists but we need genuine industrialists. We don?t need cronies-come-lately. And this is all related to two or three areas. Land, land and land. Take urban land in Mumbai. If you make an IT building, you get a higher FSI, so you bid for the land. Then you get the government to change the definition of IT. In Mumbai, IT now includes banking, back office, insurance, asset management, private equity. Land aggregators are the ones who are making money.

People are building land banks.

You see that happening in Alibaug, Panvel or around Delhi. The aggregators buy small land, accumulate them and then go to an industrial group and say, ?I am going to give you the land at this price?.

And the industrial group has a deal with the chief minister.

So basically, the people who suffer are the original land owners. They sell it at a low price. The land aggregator adds his huge margin because he says he has to pay people and then again, the land owner suffers.

You were a member of the Prime Minister?s investment commission. Your job was to invite big ticket investments to India. Does it hurt to see Indian investment going out?

I think Indian companies should also have overseas ambitions but not at the cost of growth. India is a growth story. For the next 10 years, we are going to get a 9-10 per cent GDP growth.

But not if the big Indian companies start moving out.

Yes. Get big quick, get rich quick?we don?t want those type of industrialists. You want industrialists to grow over a period of time. Tatas, Birlas, Reliance? all have grown over 30-40 years.

How does the PM fix this?

You know the system has become so difficult. Corruption is part of our lives. The whole system is corrupt. What can the poor Prime Minister do?

How does this government reconnect with corporate India?

I think there is a need to reconnect. There is disillusionment among the old corporate houses. The feeling is that we are not being given an equal opportunity because we are too straight. Those kinds of fears have to be dispelled by the PM. If Tatas can take 10 years to get land, then what is the future of other industrialists?

Because Tatas, for all their alleged lobbying clout, haven?t got a single mining licence in 10 years. All kinds of crooks are now squatting on mines.

And the ironic thing is that in this government, we have the largest number of professionals. Honest people and professional, yet we are unable to do anything and it has become worse.

If you look at this Cabinet, it has the largest percentage of truly honest people. So corruption is one thing. The second is communication and attitude. Where do you think has the government gone wrong? Where have the corporates gone wrong?

Well, the government has liberalised a lot of issues. They are talking so much about opening up new sectors but they are doing nothing about it. Take insurance. For five years, we have been hearing that it?s happening tomorrow. It just goes on. I know it may not be high in the priority of the government but for foreign companies, it?s a huge thing. India can get $3 billion if they open up insurance. Retail is one, defence is another. Look at the amount of money we spend on defence.

So the government?s credibility suffers.

The government has to take decisions. You can?t keep everything under the carpet.

There is also this new mindset that corporates are crooks. That the state is being taken over by corporates. You are saying that corporates have been victimised.

I think the fault is on both sides. There are corporates who like to get quicker decisions by paying off. So, you have to come out with some law?why is the giver not penalised and only the taker penalised? But you know the growth opportunities in India are so tremendous. We?ve never been in this positive situation when the entire world is looking at India.

So what are the three things that the Prime Minister should now do to change this mood?

First of all, the Prime Minister is handicapped because it?s a coalition government. Coalition members are pulling in different directions. What could the PM do?

Within his limitations, what are the three things that the PM should do now?

I think he should get back to the big groups who have a proven track record. Decisions have to be taken faster.

What has made you find so much negativity?

Disbursements on large projects are not happening, environment issues are coming in the way of development. Now, we want the environment to be protected, we want ecological improvements, but somewhere, we have to draw a balance. Do we want growth, and if we want growth, we have to make some sacrifices or take precautions. But you cannot say that you cannot give permissions. There is a disconnect between the industry ministry and the environment ministry. My personal view is, look at the existing industries that are creating all the pollution, emissions. They are going scot-free. Why can?t you try and clean the existing ones? I think you should have a responsibility to improve the existing industries. Don?t block a new entrant. And I don?t think we?ve lost it.

We can lose it.

Today, various people are asking if the growth in India is going to last.

So what does the PM do to sort out things like mining linkages, mineral linkages, environmental clearances. These are the few bottlenecks.

See, the different ministries have to work as a team. If each manager or each departmental head pulls in different directions, you will not have a good company or good results. The big boys in the government are pulling in different directions and not working as a team. We all have the same objective to see a better India, to see a prosperous India.

You find the big boys in the government too distracted or following their own agenda?

No, they are following their own department?s agenda and not looking at the broader picture. I think the PM has to get that organised.

Do you sometimes get the feeling that the Prime Minister has become a bit distanced or preoccupied?

No, I don?t think so. I think he is trying his best but I feel he is in that position because of coalition parties. Coalition parties have different agendas.

He is also in the situation because of the peculiar situation in his own party, as he himself tells you. Circumstances have made him the PM. And I think he takes that argument much too seriously.

I think he has a good opportunity. We still have three-and-a-half years of his government. And suddenly, we see in the papers ?mid-term polls?. We don?t want a mid-term poll. We just had elections. We want to see growth for three years.

And that should apply to the Opposition as well that?s blocking Parliament for the whole session.

Democracy is coming as a disadvantage. No Bill could be discussed, no Bill could become an Act. There are so many pending issues in Parliament.

Have you heard the tapes? Have you read about the tapes? What do these tell you?

I haven?t heard the tapes. I don?t want to waste time on that.

You talked about all this negativity. Have the tapes contributed to some of it?

I am not interested in reading (about) the tapes but the simple question is, why was the phone tapping done? You can?t have telephones tapped for two years. That is invasion of privacy. Even if it?s a crook, even if someone is doing something wrong, does it take you two years to find out whether something was wrong? You take action against that individual, you act against that individual. You question that individual. If you continue tapping the phone for two years, it is an invasion of privacy.

Have you spoken with Ratan Tata? Or with Mukesh or any of the people?

No, but there is a concern that if phones are tapped, then one has to be extremely careful because some of the conversations are strategic. Some of it is business secret, some of it is confidential. It?s your new venture.

So do you think the PM can bring in some calm or should he try and bring in some calm?

I think the team has to function cohesively, the senior ministers. One man can?t do so much but he has to say something and then the team has to be incentivised to work together. Industry minister gives you permission, environment blocks it. State government gives permission to build Lavasa, environment (ministry) says stop it.

All I can say is that your speaking on the subject brings in calm. Everybody knows that your personal interest in any of this is zero. You spent so much time in Satyam for not even a rupee. You are seen as a captain who doesn?t get paid, but bowls, bats, fields and also lifts the finger when somebody is out.

As I said in the beginning, I feel saddened. Which year has India had the US president, the French president…all in one year and in quick succession?

Deepak, I hope they are listening to you in Mumbai as well as in Delhi, because we all know that everything about you is so genuine and so straight from the heart and so salt of the earth. Except one thing about you that?s totally fake which is your retirement. So stay retired like this. Never stay out of this debate because the debate needs you and I think a growing India needs you.

Transcribed by Deepali Sharma For full text, visit http://www.indianexpress.com