Interview with ThyssenKrupp's India Managing Director, Sivasubramanian Natarajan

On his recent tour to Germany, PM Narendra Modi met Infrastructure major ThyssenKrupp's global Chairman, Heinrich Hiesinger. The company's India Managing Director, Sivasubramanian Natarajan, tells BT's Anilesh S. Mahajan that his group is upbeat about Modi's economic roadmap.

Q- The Modi government is completing one year in office. What are your thoughts?

                                   Mr.Sivasubramanian Natarajan

A- I don't want to comment on what the government is doing, but I do see that there are several initiatives taken. The outcome is certainly not as much as was expected, but it takes time. There is nothing wrong with the market. The market in India is huge and it certainly has to come up. For example, the infrastructure level is so poor, if India has to come to the level of China or the western world, then it needs investments. If not now, it would be one or two years later, but market does exist. Because of several reasons, projects are not coming up as expected. I believe that in the next six to twelve months, projects should pick up. I would give, say, one year for things to come up to expectations.

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Q- Do you think this will come despite the government or because of the government?

A- This could have come five years earlier also. It will get accelerated because of the government. The market existed five years earlier as well, but the project cycle did not pick up, the capex did not pick up because of whatever reasons, we call it policy paralysis or any other reason. We cannot wait, India cannot wait longer. If we want to have better infrastructure, better quality of life for Indians, it will have to come up. In 12 months, things should start taking shape. There are several initiatives I can see on the ground, maybe the outcome is still not as expected.

Q- Do you believe the low outcome is more because of the fundamentals (corporate debt or over-exposed banks) or are there some policy bottlenecks?

A- Yes, obviously there are policy bottlenecks; the project clearances are taking longer. Now the environmental clearances are much faster. Banks have actually tightened the procedure for lending. I think the fundamentals are even better because unscrupulous investors cannot get away with the projects. The projects, which will come up now, are far more solid than before because of these regulatory measures.

Q- There are two schools of thought. One says things are not moving on the ground, and obviously others believe that the government is fixing things. Your thoughts?

A- I would go with the latter. India is not China. Democracy takes its own time. Fundamentals are becoming stronger. A part of the coal mines are allocated. People have to come and invest money, for which you need land acquisition. So everything revolves around that. As I said, the outcome is still not visible but it has to happen. The projects have to come, the power position has to improve, the infrastructure position has to improve. Once the infrastructure starts, then you will find the core industry starts investing in that. The capacity utilisation becomes more. Once the capacity utilisation becomes more, there will be more investments. It will set everything in motion, like a chain reaction.

Q- What is the sentiment at your parent company?

A- The parent company is very upbeat because Mr Modi was in Germany and he met our chairman. He created so much news, wherever he goes he creates so much news. Across the world, people are looking at India as one of the strongest emerging markets. Brazil is down, Russia is down, nothing much is happening in Indonesia. Everyone is looking at India.

Q- But at the same time, foreign banks are downgrading India's rating. HSBC rated India as an underweight economy from an overweight till recently, Bank of America's report says the capex cycle will take some time to come back. Does it dent investor confidence? Do you see the capex cycle coming back in one year?

A- You can argue that it will take two to three years. For example, if you read the Deutsche Bank report 'India in 20-20', you cannot beat their arguments that we need to improve our industry, we need to make this a more export-oriented economy. Which country offers the kind of domestic consumption like India? None of these arguments you can find fault with. Instead of 12 months it can become 24 months but it will certainly come. The solar power of 100 GW, for a country like ours, is a great mission. All we need is great execution of these missions and make things happen. Source:Business Today

-By J5 news Team  

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