Speed up divestment in state behemoths: Deepak Parekh
23 February 2015
Indian business doyen Deepak Parekh, head of mortgage giant HDFC, on Sunday made a strong pitching for disinvestment in public sector behemoths such as Life Insurance Corp, Air India and Bharat Sanchar Nigam Ltd, saying it can unlock funds of ''lakhs of crores of rupees''.
He added that shares should be given to retail investors without depending on the overseas entities.
However, one of the major requirements for such large-scale disinvestments is a government thinking on those lines, as lack of political will and union pressure have been halting such proposals for a long time, including during the tenure of the previous UPA government, he said.
Giving examples from during the UPA regime, Parekh said he has been part of many important government panels, including those on BSNL and Indian Railways, but nothing moved on the suggestions made by those committees.
''If you run down a company in the public sector to a level that no private sector entity will want it, then what will you do?'' he wondered.
Just a couple of days earlier Parekh – more outspoken than most of his Indian business colleagues – had complained that Modi's tall promises on economic liberalisation had not resulted in any changes in ground realities, and that business confidence in his government was waning. (See: Modi optimism fading as red tape not being cut: Deepak Parekh)
Parekh hoped the first full Budget of the Narendra Modi government will focus on reforms without much populism, and pitched for incentives for companies to launch new projects to give a boost to the 'Make in India' campaign.
He said the government's finances are in a much better position to go ahead with reforms, following steps like reduction in subsidy and checking of wastages and leakages, but it would have to remain within its means.
While echoing finance minister Arun Jaitley's assertion that reforms can happen throughout the year, rather than being only in the budget, Parekh said the BJP's defeat in the Delhi elections was unlikely to result into any kind of populist measures at the cost of reforms.
He also flagged a continuing fear among bureaucrats of being hauled up as a major reason for inordinate delays in decision-making, saying things can change for the better if they are assured of protection.
Parekh said the Prime Minister has been time and again assuring the bureaucrats that they should not worry and act without fear or favour. ''This is the right thing to do, but seeing what has happened to some of their ex-colleagues, bureaucrats are still not 100-per cent sure that if they take a call and it goes wrong, will they be investigated or will they be treated like they made money or it was vested interest and all that,'' he said.
Parekh made these remarks in an interview to PTI, wherein he had also talked about steps that are required to improve ease of doing business in the country and to convert prevailing optimism into investments on the ground.
Parekh said a lot of decisions have been taken by the Modi government, ''but it is the process ... fast-tracking these processes will ensure improvement on the ease of doing business front''.