BackCorporate investments getting concentrated in few groups, govt should encourage flowers to bloom: Uday Kotak
He said many corporates are not going ahead with investments and added that we are witnessing 'significant consolidation and concentration' because of this.
PremiumVeteran banker Uday Kotak on 4 October requested the government to 'encourage many flowers to bloom', citing corporate investments getting concentrated in a few groups.
Stating that the policy is not skewed, the richest Indian banker on India Today Conclave clarified that he respects the work done by big corporations in creating world-class businesses and specifically named Mukesh Ambani-led Reliance Industries.
"I am saying something close to my heart, there is a significant concentration of new investments happening only by a few groups," Kotak said.
"I am not saying the policy is skewed, my sense is the policy must encourage many flowers to bloom," he added.
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Earlier, Kotak surprised all by stepping down from his executive role four months ahead of the end of the term. He said many corporates are not going ahead with investments and added that we are witnessing 'significant consolidation and concentration' because of this. The concentration can deliver in the short term, but it is in India's long-term interests to have many businesses flourish, he said.
He also listed out sectors in which concentration has grown, and urged the Competition Commission of India to step in the interest of 'fair play'.
"We need free and fair markets backed by the policy which allows a competitive marketplace", Kotak said, urging for the fair trade regulator to be more alert.
"I would certainly want to see a stronger role of the Competition Commission (of India) to ensure that there is fair play in the marketplace. You do not want such concentration in a few hands... I think (in) long term, as an Indian, I'd love to see many more Indians succeed," he added.
Kotak mentioned that the telecom sector has two-and-half players from 13 in five years, the steel sector has three big companies and aviation is reduced to just two-and-a-quarter players.
He also hinted that it is because of a lack of investments by India Inc. that the country trails China on the trade front, with a net deficit of $100 billion per year.
"Why is it that we in India cannot manufacture and find it cheaper to import from China? And that is a question we need to ask our corporates. That for all our strong fundamentals, why is it that corporate India is not able to compete with China?" he questioned.
With agency inputs.
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