I’d say, fairly active. There were talks about an intermediate holding company concept and ICICI (Bank Ltd) was planning to do that but the government was not encouraging this because of the lack of clarity on who will regulate the intermediate holding company. If we go for a financial holding company, then RBI can be the regulator and the different constituents can be looked after by different regulators. This kind of model can work under RBI, the super regulator — also the holding company of the regulators. Worldwide you have this — Citicorp and HSBC have hundreds of subsidiaries under them in different countries. We really need to see how it plans out in India.
It’s taking fair amount of our time and attention as we will have to go for model, which works well for us. It could be next year or after the IPO but we are thinking about different models.
The Indian economy has had a phenomenal growth till recently. Do you see any missed opportunities?
We didn’t do many things. Particularly, we did not start any large project. There are six steel mills under planning but not even one of them got the (required) approvals. There are problems of land allocation, environment, iron ore, lack of infrastructure…. The Mittals, the Tatas, the Essar group, the Jindals (JSW Group) and Posco, all have big plans but none of them has started construction as yet. All these projects have been on the drawing board for four, or five years. We are shooting ourselves because there will be short supply of steel and the prices are going to escalate.
Similarly, I know plans of a dozen-odd greenfield and brownfield cement plants are. For instance, LafargeSA has plans for four states – Himachal Pradesh, Karnataka, Rajasthan and Meghalaya, but not a single project has started. They all have been on the drawing board for last three years because the company is not getting mines, limestone, environment clearance or people want favours. But multinationals are not allowed to pay money (bribes).
If we don’t increase our domestic supply of cement and steel, it’s going to kill us in the long run. In every sector, I see the same thing.
Similarly, we will have to increase farm productivity and improve our distribution system. We have to reform Food Corporation of India (FCI), the biggest public sector body with maximum number of warehouses.
We have been hearing horrendous stories about FCI. Food is rotting there. Has anybody looked at reforms at FCI? Shouldn’t there be a public debate on it? These are all adding to our inflation.
We have killed our fertilizer industry by giving them unremunerative prices. The government subsidy comes after 18 months and banks do not give working capital to the fertilizer companies. I was a director on the board of fertilizer company but I left as the company was turning a defaulter. I could see this coming and resigned very quickly as otherwise RBI would have blacklisted me (for being a director of a defaulting company).
I can give you hundreds of such examples in every sector where things are in our hands and we are to be blamed for not doing anything.
You are setting up an office in Singapore.